International Insurance Standards Act of 2018

Mr. Speaker, I move to suspend the rules and pass the bill (S. 488) to increase the threshold for disclosures required by the Securities and Exchange Commission relating to compensatory benefit plans, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on this bill.

Mr. Speaker, I yield myself as much time as I may consume.

Mr. Speaker, two things that are vital to the American economy: number one, 3 percent economic growth, and number two, competing with China.

Three percent economic growth, Mr. Speaker, is so important because, when you look at the history of America, if you look at jobs that are created, if you look at increasing incomes, if you look at decreasing unemployment, this happens in our 3 percent-plus growth years, and that is why it is so great that America is once again seeing 3 percent-plus economic growth.

But, Mr. Speaker, can we keep it?

There are some alarming trends that we have to arrest, and that is that, unfortunately, entrepreneurship, that is, launching new businesses, recently hit a generational low. Companies that are going public--and 90 percent of the jobs that a company creates happen after they go public, IPOs, initial public offerings--they have been in a decline, a 20-year decline, and they have reached a new low.

If we look at what China is trying to do with their 2025 program, Mr. Speaker, and dominate the world in high tech and then we turn around and we see that China has over a third of the world's IPOs, America-- our decline is now down to 11 percent--has got to change.

So thus, today, we are taking up the JOBS and Investor Confidence Act, also known as the JOBS Act 3.0.

What we are trying to do, Mr. Speaker, number one, we are doing it on a bipartisan basis, but we are trying to ensure that our entrepreneurs at least don't face the challenge of having the capital they need to launch their companies, because, Mr. Speaker, when we have more small businesses that are launching new enterprises and going public and staying public, these are the Amazons and the Googles and the Microsofts of the future.

So, again, Members on both sides of the aisle have come together because, historically, capital formation has been a bipartisan issue here. We have come together, Democrat and Republican, to make sure that these small

businesses get this start. And we try to treat the whole capital formation ecosystem, from venture capital with the HALOS Act and helping accredited investors be able to bring their capital to the table, to early growth companies and how they have to handle the very expensive 404(b) Sarbanes-Oxley provision, to the stages of companies going public, but once they go public, Mr. Speaker, the ability to stay public, and so we have a venture exchange bill to make sure that they can concentrate their liquidity in one area.

So this is important. It is important to keep 3 percent economic growth. It is important that America's garages have fewer old cars, more new startups.

I want to thank Members on both sides of the aisle, but I especially want to thank the ranking member, the gentlewoman from California, working so strongly and fervently and on a good, bipartisan, cooperative basis to produce the JOBS and Investor Confidence Act.

Mr. Speaker, I expect that we can have a strong bipartisan vote on the floor, and I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the gentleman from Michigan (Mr. Huizenga), the chairman of the Capital Markets, Securities, and Investments Subcommittee, the real leader of this capital formation package on the Republican side of the aisle, and also the sponsor of two provisions of the bill: H.R. 477, the Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act, and H.R. 6139, the Improving Investment Research for Small and Emerging Issuers Act.

Mr. Speaker, I yield 1 minute to the gentleman from Ohio (Mr. Chabot), who is the chairman of the House Small Business Committee and who has sponsored a very important provision in the package, H.R. 79, the Helping Angels Lead Our Startups Act.

Mr. Speaker, I yield 1 minute to the gentlewoman from Missouri (Mrs. Wagner), the chair of our Oversight and Investigations Subcommittee, also the lead sponsor of an important provision in this package of bills, H.R. 5970, the Modernizing Disclosure for Investors Act.

Mr. Speaker, I yield 1 minute to the gentleman from Kentucky (Mr. Barr), the chair of our Monetary Policy and Trade Subcommittee.

Mr. Speaker, I yield 1 minute to the gentleman from Illinois (Mr. Hultgren), who is the vice-chairman of our Capital Markets, Securities, and Investment Subcommittee.

Mr. Hultgren is the lead sponsor of two provisions of the bill, H.R. 5749, the Options Market Stability Act, and H.R. 6319, the Expanding Investment in Small Businesses Act.

Mr. Speaker, I yield 1 minute to the gentleman from Wisconsin (Mr. Duffy), who is the chairman of our Housing and Insurance Subcommittee. Mr. Duffy is the sponsor of a provision of this bill, H.R. 4537, the International Insurance Standards Act.

Mr. Speaker, I yield 1 minute to the gentleman from North Carolina (Mr. Pittenger), who is the vice-chairman of the Financial Services Subcommittee on Terrorism and Illicit Finance.

Mr. Speaker, I yield 1 minute to the gentleman from Pennsylvania (Mr. Rothfus), the vice chairman of our Financial Institutions Subcommittee, who is also the lead Republican sponsor of one of the bills in the package, H.R. 6069, the Fight Illicit Networks and Detect Trafficking Act.

Mr. Speaker, I yield 1 minute to the gentleman from California (Mr. Sherman), a senior Democrat on the committee and the lead sponsor of the bill.

Mr. Speaker, I yield 1 minute to the gentleman from Texas (Mr. Williams), the vice chairman of the Financial Services Subcommittee on Monetary Policy and Trade.

Mr. Speaker, I yield 1 minute to the gentleman from Arkansas (Mr. Hill), the majority whip of the committee and also the lead sponsor of H.R. 5783, the Cooperate with Law Enforcement Agencies and Watch Act, and who worked, also, extensively on H.R. 1585, the Fair Investment Opportunities for Professional Experts Act.

Mr. Speaker, I yield 1 minute to the gentleman from Minnesota (Mr. Emmer), who is the lead sponsor of a very important provision in the package, H.R. 5877, the Main Street Growth Act.

Mr. Speaker, I yield 1 minute to the gentleman from Georgia (Mr. Loudermilk), who is the lead sponsor of two provisions in the package: H.R. 3555, the Exchange Regulatory Improvement Act, and H.R. 5953, the earlier referenced BUILD Act.

Mr. Speaker, I yield 1 minute to the gentleman from North Carolina (Mr. Budd), the lead sponsor of one of the provisions in the bill, H.R. 3903, the Encouraging Public Offerings Act.

Mr. Speaker, I yield the gentlewoman from California an additional 30 seconds.

Mr. Speaker, may I inquire how much time I have remaining.

Mr. Speaker, I yield myself the balance of my time.

Indeed, Mr. Speaker, some would say the ranking member and I can't agree even on the time of day. I was told when this debate started that thunderstorms came over Washington, D.C., it was that monumental of an achievement.

But in seriousness, I do want to offer my thanks and my gratitude to the ranking member. She and her staff worked very constructively with us on this bill and the preceding important bill, the CFIUS reform, which we are still trying to work out our differences on with the Senate. But, long story short, we came together.

This is going to be an important day for small business. It is an important day for 3 percent economic growth, which is so important to American families.

I, too, want to echo how important the work of our staffs is. Particularly on the majority side, I wish to thank Kevin Edgar and Fritz Vaughan and their staff for their contribution.

This is going to make a difference, ultimately, because small businesses one day become big businesses. This will make a difference in economic growth for all Americans.

Mr. Speaker, I urge all Members to support the JOBS and Investor Confidence Act of 2018, and I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, this bill is an example of true bipartisanship. I want to thank Chairman Hensarling, the members of the Financial Services Committee, and the staff on both sides of the aisle for their work on this legislative package.

S. 488, the JOBS and Investor Confidence Act of 2018, is evidence that Democrats and Republicans can come together to strengthen our Nation's small businesses and entrepreneurs, bolster investor confidence, protect consumers, promote financial stability, and counter human and drug trafficking.

S. 488 helps small businesses grow by encouraging capital formation and requires the Securities and Exchange Commission to consider unique issues facing rural small businesses and small investment advisers. When entrepreneurs are looking to retire, S. 488 allows them to easily sell their businesses.

The bill also requires several rulemakings and studies to encourage small businesses to go public, including by protecting them from excessive underwriting fees.

Main Street investors and consumers also benefit from S. 488. One provision, which I authored, cracks down on corporate insiders engaged in illegal insider trading.

Democrats also led provisions to enhance disclosures about outsized insider voting power.

The bill also creates a task force at the SEC to protect seniors and their financial best interests.

Additionally, the bill helps nonprofits, like Habitat for Humanity, continue to extend affordable mortgages to low-income families aspiring to the dream of homeownership.

Thanks to Mr. Ellison, the legislation enables millions of Americans with thin credit files to improve and build their credit by allowing alternative types of data, like the on-time payment of rent and utilities, to be included in their credit reports without preempting State law.

S. 488 also improves financial stability. The bill directs regulators to improve the calculation for bank capital held to offset risk in the options and derivatives markets so that riskier products are covered by more capital

Finally, S. 488 strengthens our government's efforts to stop drug and human trafficking by preventing criminals who engage in these unconscionable acts from accessing the financial system.

There are several provisions that we did not reach bipartisan agreement on in time, including reforms to private offerings under regulation D that requires issuers to file disclosures before their first sell and after the termination of the offering. I am pleased that the chairman has offered to continue working on this and other issues with me, and I hope that the Senate has its own chance to make these and other changes.

Throughout my work on this legislation, I insisted that nothing could be included that would weaken Dodd-Frank's financial reforms, harm consumers, or provide giveaways to Wall Street. Instead, building on the bipartisan work of the Financial Services Committee, S. 488 includes measures that will help small businesses grow and protect hardworking Americans who entrust their savings to the capital markets.

Mr. Speaker, I again thank my colleagues for their strong bipartisan support on this legislation, and I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the gentlewoman from New York (Mrs. Carolyn B. Maloney), the ranking member of our Capital Markets, Securities, and Investment Subcommittee of the Financial Services Committee, and the leading sponsor and Democratic cosponsor of several of the bills in this package.

Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. David Scott), a senior member of the Financial Services Committee and the leading Democratic cosponsor of several of the bills in this package.

Mr. Speaker, I yield an additional 30 seconds to the gentleman.

Mr. Speaker, I yield 2 minutes to the gentleman from Connecticut (Mr. Himes), a member of the Financial Services Committee, the chair of the New Democrat Coalition, and the author of one of the bills in this package that ensures companies aren't paying excessive fees to go public.

Mr. Speaker, I yield 2 minutes to the gentleman from Illinois (Mr. Foster), who is a member of the Financial Services Committee and a leading Democratic cosponsor on several of the bills in this package.

Mr. Speaker, I yield the gentleman from Illinois an additional 20 seconds.

Will the Speaker please check the minutes again? We have calculated differently, and we think I have 9 minutes.

I am sorry. What is the Chair saying about the time that I have remaining?

Mr. Speaker, I yield 2 minutes to the gentlewoman from Ohio (Mrs. Beatty), who is a member of the Financial Services Committee who helped ensure that this bill cracks down on the use of digital currency in human trafficking.

Mr. Speaker, I yield 2 minutes to the gentleman from New Jersey (Mr. Gottheimer), who is a member of the Financial Services Committee and author of one of the bills in this package.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I continue to reserve the balance of my time.

Mr. Speaker, I have no further requests for time, and I yield myself the remainder of my time to close.

I once again thank my colleagues for their outstanding bipartisan work on this carefully crafted bipartisan legislation. S. 488, the JOBS and Investor Confidence Act of 2018, is an example of Members on both sides of the aisle working together to support our Nation's small businesses and investors.

S. 488 facilitates access to capital for small businesses, increases protections for consumers and investors, fights the scourge of drug and human trafficking, and promotes financial stability.

S. 488 is supported by institutional investors, angel investors, venture capitalists, biotech companies, credit unions, small businesses, entrepreneurs, and exchanges. This bill will help entrepreneurs, small businesses, and investors to thrive in our economy.

Finally, I would like to thank Mr. Hensarling for his foresight in knowing that this was possible because both sides of the aisle really support small businesses. It was Mr. Hensarling who said: Given that we do both support small businesses, why can't we come together around a package where we have already shown our support on individual bills either in committee or on the floor and put it all together?

He did that. He provided that leadership. I joined with him.

Our staffs are to be congratulated because they worked very hard on both sides of the aisle to work out any concerns that we may have, any differences that we may have. They did a magnificent job, and they are responsible for helping us to understand what certainly is and was possible.

So despite this, if I may say, there are many onlookers who never thought this could happen. There are many pundits, those who come from special interests, those who come from right here in the House on both sides of the aisle, who are still questioning.

Mr. Speaker, I had one inquiry from one of the magazines, I believe it was, who said: Tell me what happened in the background, what was really going on. How did this all come together?

I want the gentleman from Texas to know I told him it is none of his business. It really happened, and we are pleased about it. We worked very hard on that.

Mr. Speaker, I thank Mr. Hensarling and all of the members who worked so hard to make this happen, and I yield back the balance of my time.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4537) to preserve the State-based system of insurance regulation and provide greater oversight of and transparency on international insurance standards setting processes, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and to include any extraneous material on the bill.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, first I would like to commend my friends, Mr. Duffy and Mr. Heck, for their work on this very important issue. For over 150 years, U.S. insurance companies of every kind--including property- casualty, life, reinsurance, health, and auto--have all been regulated primarily by the States.

Congress and the States have occasionally reviewed the effectiveness of the State-based regulation of insurance and coordinated efforts that they have to achieve greater regulatory uniformity. In fact, in 1945, Congress passed the McCarran-Ferguson Act, which confirmed the States' regulatory authority over insurance except where a Federal law expressly provides otherwise.

As a former State representative in the Michigan Legislature, I know firsthand that Michigan does a better job of protecting policyholders within their borders than the Federal Government can do. I have seen it in action. Even more, Michigan certainly knows how to maintain a robust insurance marketplace that works for Michigan consumers. I would assume the exact same thing in Wisconsin and in Washington and in California and all throughout the States.

However, there are those who believe Washington knows best. In fact, title V of the Dodd-Frank Act enlarged the Federal Government's role in the insurance industry by creating a Federal office specifically tasked with insurance matters. The Dodd-Frank Act established FIO, or the Federal Insurance Office, at the U.S. Department of the Treasury and charged the FIO Director with the responsibility to both represent the interests of U.S. insurers during the negotiation of international agreements and then advise the Office of the United States Trade Representative during trade negotiations.

At the same time, the Dodd-Frank Act changed domestic insurance regulation. Dodd-Frank led to changes in the U.S. participation at the International Association of Insurance Supervisors, also known as IAIS, which develops international insurance regulations for its 190 jurisdictions in more than 140 countries.

Mr. Speaker, I know that I am not the only one who is concerned that this could influence the Federal Government to look at replacing our State-based regulatory insurance model with some sort of international standards that were created, frankly, by unelected European bureaucrats. The outcomes of these discussions could have significant impact on the U.S. insurance markets, consumers, and the companies that provide those products.

Therefore, the U.S. needs to maintain a strong, unified voice that will ensure our successful State-based, policyholder-centric system of insurance regulation is the model for the discussions and the basis of the official United States position abroad.

H.R. 4537, the International Insurance Standards Act, introduced by my friend and colleague, Representative Duffy, would require the United States to recognize the primacy of the U.S. State-based insurance regulatory regime when entering into and agreeing to international insurance negotiations. Additionally, this bill would provide needed transparency throughout the negotiation process and provide Congress with final approval authorization.

As the IAIS works on topics like global capital standards, governance,

and market conduct, H.R. 4537 would position the U.S. to participate in the discussions, while also protecting itself from European standards that could be detrimental to U.S. consumers, insurers, and markets.

Mr. Speaker, I would like to commend, again, Representative Duffy and Representative Heck for their bipartisan work on this important bill, which passed the Financial Services Committee on a vote of 56-4. I urge my colleagues on both sides of the aisle to protect an insurance regulatory model that has worked well for over 150 years and vote in favor of H.R. 4537.

Mr. Speaker, I reserve the balance of my time.

Committee on Ways and Means,

House of Representatives,

Washington, DC, June 22, 2018.

Hon. Jeb Hensarling,

Chairman, Committee on Financial Services, Washington, DC.

Dear Chairman Hensarling: I am writing with respect to the

jurisdictional interest of the Committee on Ways and Means in

matters being considered in H.R. 4537, the International

Insurance Standards Act of 2018.

As a result of your having consulted with us on provisions

in H.R. 4537 that fall within the Rule X jurisdiction of the

Committee on Ways and Means, I agree to waive formal

consideration of this bill so that it may move expeditiously

to the floor. The Committee on Ways and Means takes this

action with the mutual understanding that we do not waive any

jurisdiction over the subject matter contained in this or

similar legislation, and the Committee will be appropriately

consulted and involved as the bill or similar legislation

moves forward so that we may address any remaining issues

that fall within our jurisdiction. The Committee also

reserves the right to seek appointment of an appropriate

number of conferees to any House-Senate conference involving

this or similar legislation, and requests your support for

such request.

Finally, I would appreciate your response to this letter

confirming this understanding, and would ask that a copy of

our exchange of letters on this matter be included in the

Congressional Record during floor consideration of H.R. 4537.

Sincerely,

Kevin Brady,

Chairman.

Mr. Speaker, I yield such time as he may consume to the gentleman from Wisconsin (Mr. Duffy). My friend and colleague is a leader of this effort.

Mr. Speaker, I would like to point out to the ranking member that that could, too, be a unifying part of the House of Representatives, our collective frustration with the airlines and delays in getting us all here in a timely fashion for important things like this.

But that little bipartisan sentiment aside, I, too, want to commend Mr. Heck and Mr. Duffy for their work on this, and I urge all of my colleagues to support this underlying bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I want to thank the gentleman from Michigan, who is also a very good friend of mine, for yielding.

I rise in support of H.R. 4537, the International Insurance Standards Act. I first want to start with thanking the gentleman from Washington (Mr. Heck) for the countless hours and effort that he put in, in a bipartisan effort, crafting this bill that would allow us to get an incredibly wonderful bipartisan vote.

On top of that, we had some jurisdictional issues, so we had two chairmen from Texas, of the Ways and Means and Rules Committees, Chairman Brady and Chairman Sessions, who also worked with us to navigate those jurisdictional issues.

I also want to thank the ranking member, Ms. Waters, for working with both Mr. Heck and me to navigate some of the issues that she had with this bill to allow us to craft a piece of legislation that could get bipartisan support. I know at a time when a lot of people don't think that bipartisanship necessarily happens in this Chamber or in this town, because it doesn't make great news, it happens. People work together; they compromise; and they find a pathway forward. I think this is a

great example of that, and I want to thank the ranking member for her help in this effort and for her support. Again, it passed out of committee 56-4.

In essence, what we are doing here is saying that we have had a State-based model in America that has served this country very well for 150 years. We have been focusing on policyholder protection and solvency protection. Our insurance industry has been pretty resilient, and we are proud of it.

But we also recognize that the world is changing. It has become a far smaller world. We have different standards in different countries, and we have to be able to navigate those differences. As Americans, we have to be able to engage with the rest of the world. That is a good thing. But as we engage, we also want to make sure that we don't sell our State-based American model for some other model in some other country.

If we want to change an insurance model of regulation in America, that is our job in this Chamber. We shouldn't have some executive appointee negotiate a trade deal that undermines our State-based model. So that was the vision of what we are trying to accomplish.

In essence, we provide parameters to U.S. negotiators to prevent Federal U.S. negotiators from entering into an international insurance agreement unless it is consistent and reflective of the existing U.S. system of insurance regulation. So, again, it has to be consistent and reflective of our model.

It creates more transparency in the international insurance negotiation process, as U.S. negotiators have to regularly inform Congress as to the state and content of the negotiations that are being undertaken. It also ensures that our State insurance regulators are closely consulted in a process of the international insurance standards setting.

So this is a well-crafted bill that took in concerns that both sides of the aisle had.

I would like to note, as a Member of this body, and I think both sides feel this way, and whether it was President Clinton or President Bush or President Obama or now President Trump, we have a role in this Chamber, and, oftentimes, we cede power to the executive. I think it is important for us to exert some authority here to say that, if we are going to change the rules, then you just can't do it without us and through international negotiations.

I think this is a look to that point that, again, we have a great model. If we are going to change it, we need to be a part of it. We need to be consulted.

So with that, Mr. Speaker, I want to thank the ranking member, and I want to thank Mr. Heck and the gentleman from Michigan.

Mr. Speaker, I yield myself such time as I may consume.

H.R. 4537, as amended, would ensure that international insurance standards or agreements are consistent with our domestic insurance system. The bill also encourages greater transparency, accountability, and congressional involvement in the development of international insurance standards and covered agreements.

H.R. 4537, the International Insurance Standards Act of 2018, is a product of months of bipartisan negotiations. I am pleased to be able to support the final compromise bill that is before us today.

Today's bill is a reflection of the work of the bill's sponsors, Mr. Duffy and Mr. Heck, and many others, including myself, to narrow and streamline the bill so that we do not intentionally weaken the United States' ability to negotiate strong rules internationally.

This is important. We cannot forget that, during 2007 and 2009, the United States faced the most severe financial crisis since the Great Depression. One of the most notable events during the crisis was the near collapse of insurance giant AIG, which threatened the stability of the entire U.S. financial system.

AIG's rapid demise and need for a Federal bailout underscored the importance of consolidated supervision and appropriate prudential standards for certain types of nonbank financial institutions, including large, global insurance companies.

The Dodd-Frank Act helped us fill in these gaps. I would like to note that the core Dodd-Frank reforms, in this respect, remain intact in this bill.

Again, I would like to thank Mr. Duffy, Mr. Heck, and their staffs for working with me and my staff to improve the bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, I would like to take a special moment to thank Mr. Duffy and Mr. Heck. They worked very hard to resolve the concerns and the differences that arose in trying to put together this legislation.

As Mr. Duffy has said, the world has changed, and we cannot be isolated in any way, just thinking about regulations that absolutely are impacted by what is going on internationally. I think, with all the hard work that was done by these two Members, we were able to figure out how to protect the work of the States and the laws that we have, but, at the same time, recognize that we are working in an international atmosphere. We must understand that gaps must be closed; I think we have done that sufficiently.

Again, I would like to thank them. Mr. Heck is just getting off the plane. He wanted to be here, because he has worked so hard on this legislation. He is not able to make it, but I want everybody to recognize that he did a tremendous job in helping us work through the difficulties of this legislation.

Mr. Speaker, I have no additional speakers, and I yield back the balance of my time.