Randy Neugebauer

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 26) to extend the termination date of the Terrorism Insurance Program established under the Terrorism Risk Insurance Act of 2002, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and to insert extraneous material for the Record on H.R. 26, currently under consideration.

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

Mr. Speaker, for those of you watching at home today, this is not a C-SPAN rerun. I stand before you today to discuss the Terrorism Risk Insurance Program Reauthorization Act, a bill that passed this House 417-7 at the end of the previous Congress.

This bill is a result of long and difficult bicameral and bipartisan negotiations. But for whatever reason, the previous Senate decided that it was more important to go home a couple of days earlier rather than reauthorize the TRIA program. As a result, the program expired at the end of the year.

So, today, the House will act on this important piece of legislation once again. Doing so will provide certainty to the terrorism risk insurance market and ensure that the American economy remains resilient against the threat of terrorism.

Congress passed the Terrorism Risk Insurance Act of 2002 in the aftermath of 9/11. It was intended to provide a 2-year transition period in which the market participants could develop resources that would enable them to offer private terrorism insurance coverage once the program expired. For various reasons, that transition has not taken hold.

Throughout the last 2 years, my subcommittee learned how evolved the terrorism risk insurance marketplace has become since the last reauthorization. Since the advent of TRIA in 2002, markets have stabilized, risk management practices have improved, terrorism risk modeling and underwriting has advanced, and the price of terrorism risk coverage has actually declined by 70 percent.

But we have also learned that this evolution of TRIA has failed to keep up with marketplace realities. In fact, the program remains largely unchanged over the last 12 years. This has hindered the growth of private market participation in terrorism risk insurance and resulted in a bad deal for the taxpayers.

The bill before us today is an effort to recognize and to keep pace with the market developments of the terrorism risk insurance marketplace over the past decade. The bill strengthens taxpayer protections without altering the program's fundamental functions, brings greater certainty and stability to the terrorism risk market, and lays a foundation for a more robust private market for terrorism risk.

With regard to the taxpayer protection, the program's trigger doubles from $100 million to $200 million. It also decreases the Federal share of insurers' losses from 85 percent to 80 percent and enhances the taxpayer repayment requirements. And for the first time, we will have meaningful data on the program to increase accountability and transparency.

To provide certainty, the program is extended for 6 years but makes no changes for the first year so that the market will have time to adjust. It also clarifies it streamlines the terrorism certification process so that policyholders are better protected.

Most importantly, the bill today creates a framework that will allow for a more healthy private market terrorism risk over time that slowly replaces taxpayer-funded reinsurance with private sector capital.

Finally, the bill before us today includes some bipartisan reforms that will help boost the economy and job opportunities for all Americans. These Dodd-Frank fixes will help America's hardworking farmers, ranchers, and business owners. They did not cause the financial crisis, and they deserve immediate relief.

I am also proud of the inclusion of the reestablishment of the National Association of Registered Agents and Brokers, or NARAB, which is an efficient and effective way to enable insurance agents and brokers to be licensed on a multistate basis while retaining essential State regulatory authority.

I thank Chairman Hensarling for trusting me to reform this important program, and I urge my colleagues to vote ``yes'' on H.R. 26.

I reserve the balance of my time.

Mr. Speaker, I enter into the Record an exchange of letters between the Financial Services Committee and the House Agriculture Committee.

House of Representatives,

Committee on Agriculture,

Washington, DC, January 7, 2015.

Hon. Jeb Hensarling,

Chairman, Committee on Financial Services, Rayburn House

Office Building, Washington, DC.

Dear Chairman Hensarling: I am writing concerning H.R. 26,

Terrorism Risk Insurance Program Reauthorization Act of 2015.

As you know, provisions of H.R. 26 are within the

jurisdiction of the Committee on Agriculture. In order to

expedite floor consideration of the bill, the Committee on

Agriculture will forgo action on H.R. 26. Further, the

Committee will not oppose the bill's consideration on the

suspension calendar. This is also being done with the

understanding that it does not in any way prejudice the

Committee with respect to the appointment of conferees or its

jurisdictional prerogatives on this or similar legislation.

I would appreciate your response to this letter, confirming

this understanding with respect to H.R. 26, and would ask

that a copy of our exchange of letters on this matter be

included in the Congressional Record during Floor

consideration.

Sincerely,

K. Michael Conaway,

Chairman.

Mr. Speaker, I yield 3 minutes to the gentleman from Texas (Mr. Conaway), my neighbor to the south, our new committee chairman for the House Agriculture Committee.

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

Mr. Speaker, I want to thank the gentleman from Georgia for his tireless efforts on NARAB. I think we are going to get it done this time. I know he has worked on it a number of years. He and I have worked together to try to get this done. It is a commonsense piece of legislation, and I am hopeful that this will be the time to get it passed.

I am now pleased to yield 3 minutes to the gentleman from New York (Mr. King), who has been a tireless advocate for the TRIA program.

I thank the gentleman from Massachusetts. I want to tell him how much I enjoyed working with him. He was the ranking Member of the Housing and Insurance Subcommittee, and we had an opportunity to work together. It was a pleasure to do.

Mr. Speaker, it is my pleasure to yield 2 minutes to the gentleman from Indiana (Mr. Stutzman), a distinguished member of the Financial Services Committee.

Mr. Speaker, it is now my pleasure to yield 1 minute to the gentleman from New Hampshire (Mr. Guinta), a distinguished member of the Financial Services Committee.

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

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

Mr. Speaker, in closing, I think what you can see by the comments today is that we have a bipartisan piece of legislation. It is a piece of legislation that passed overwhelmingly in the House in the 113th Congress. Unfortunately, it was not taken up by the Senate.

This is a win-win bill. It does a number of really good things for the country; and, more importantly, for the taxpayers, it begins to bring reform in a program that originally was meant to be a temporary program but somehow has become a permanent program, beginning to stairstep-up the private market participation and stairstep-down the taxpayers' participation. It increases the trigger; it increases the amount of recovery that the taxpayers would be able to recover in the case of an event.

Another thing you heard many people talk about is this end-user provision that is going to help farmers and ranchers and small businesses not have to put up additional capital so they can use that capital to create jobs for America.

Another provision in this bill is the NARAB II, which is a small business provision allowing your local insurance agent, maybe he or she can sell insurance in multiple States by being a member of NARAB and being able to not have to get a license in each individual State, but if they are licensed and meet the qualifications in that State, that is recognized by other States.

So this is a great bipartisan effort. It has been, as mentioned, a long process, and so I urge my colleagues to support H.R. 26.

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

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

Mr. Speaker, I rise today in support of my bill, the National Windstorm Impact Reduction Act, H.R. 23. I also want to thank Chairman Smith for his leadership on this issue, and I appreciate him agreeing to bring this back up early in the 114th Congress.

I think we have already heard of a number of people quote a lot of statistics about the amount of damage that occurs from windstorms in this country and the loss of lives. You know, particularly 2011 was a very bad year. As it was pointed out, we had a number of people that were killed that year and over $28 billion in damage to property alone.

What is happening is the risk is growing because our population centers are growing. You know, a tornado that goes through a town center does a lot more damage than one that goes through an empty prairie. As these storms are getting costlier over time, at a time where we are $18 trillion in debt, it is important that we utilize the taxpayers' resources in an effective way. This particular program, as it was mentioned, is reauthorized at a fixed level, the level from previous reauthorization, but also it is designed to make the program more efficient and effective in the future.

When a family loses a home, you know, they don't have to just rebuild the house; they have to rebuild their lives. We know a lot of people have either experienced losses of property or life, loved ones, or they know people that have.

In particular, it is a personal thing for me because, on May 11th of 1970, I had just taken my last final for that semester at Texas Tech University, and 3 hours or 4 hours later, a major tornado ripped through Lubbock, Texas, and killed 26 people, including destroying the apartment complex that I lived in.

I was fortunately unharmed in that event, but what I did get to witness is the tremendous amount of damage that can happen from these storms and the loss of life. You saw things that you didn't think were possible--cars in parking lots that were rolled up and swirled up like an ice cream cone.

So one of the things that later on, to me, in the building business, one of the things that we began to learn is, from important research that was done, that we were able to use certain building techniques that made houses more wind resistant, made buildings more wind resistant, and that is exactly what this bill, NWIRP, does. It takes these four agencies that currently have jurisdiction over that--and those include NOAA, the National Science Foundation, FEMA, and NIST-- and makes sure that they are using those funds appropriately and that there is not a lot of duplication in the research going on. Each one of them has an area of expertise. We want to do a better job of predicting these storms. We want to do a better job of learning how we can mitigate the damage from those.

One of the things that happened right after the May 11 tornado in Lubbock is that Texas Tech University began doing research on windstorms and the effects of different materials, and later on they founded the National Wind Institute, which is doing important research on simulating cyclones and different kinds of wind events and the impact that they have on materials and certain building techniques. Certainly that will be important to our country as we move forward.

What does that do for the taxpayers? Well, obviously if we can learn more about predicting the outcomes, we can make our buildings stronger, but, more importantly, save lives. And one of the things I know from a lot of the research that has been going on right now, that designs are being incorporated in a lot of buildings.

Recently I was at a new elementary school in my district, and one of the things that we learned is that they incorporated certain building techniques within the cafeteria of that new elementary. Basically, the cafeteria became a storm shelter for the students going to that elementary. Those are the kind of things that will be beneficial from this.

I urge my colleagues to help me reauthorize H.R. 23.

I thank the chairman of the Rules Committee for allowing me this time.

Mr. Speaker, this is a very important piece of legislation to our country. We have heard a little bit of the history that, after 9/11, the insurance industry took a pretty substantial hit. Their reserves were drained to pay out on these claims. As they were looking at writing new business, they were very concerned about what the future held because America had never experienced that kind of disaster in the past, so they were trying to figure out how to underwrite those in the future. TRIA was put into place temporarily to be a backstop for the industry for them to get back on their feet. They have gotten back on their feet, and their reserves are at all-time highs, and they have had a number of years now to model this risk.

The reason it was originally important to do that was, basically, in order to continue the construction projects or the number of projects around the country, the insurance industry needed some assurance that they wouldn't have to bear that kind of event again.

When we began to look at this process when we knew this was going to expire at the end of this year, we knew that there were kind of three options out there. One was to let the program expire as it was meant to be a temporary program. There were some Members who wanted to do that, and some Members did not. Others wanted to just extend the program the way it was. Under the Bush administration, though, we began a process to begin to reform this and to begin to transition more and more of the risk away from the taxpayers and back to the insurance companies. Unfortunately, when it was last reauthorized, none of those reforms were built into it. Even the President of the United States says that TRIA needs to be reformed, and he has offered up, for example, to change the trigger levels.

One of the things we have done with this bill is we didn't really change the overall structure of TRIA. We could have written a whole new terrorism insurance program. We didn't think that was good for the market. The market had already begun to adapt to the current framework, so we felt, if we worked within the existing framework--changing some of the triggers and some of the knobs on this particular program--that that would begin to allow the industry to take on more of the risk and for the taxpayers to take less of that risk. I think we have accomplished that with this bill.

As has been pointed out, I think a lot of people, quite honestly, don't know a lot about TRIA. One of the things is that the insurance industry takes the first losses under this program. So, if there were a loss today, as the gentleman mentioned, 20 percent of the previous year's premiums, which, if industrywide, would be about $40 billion today, would go directly to the insurance companies. Should those losses exceed that--should we have another catastrophic event--then what would happen is that the taxpayers and the insurance industry would begin to share those expenses with a provision now. We have strengthened that in this bill. I think one of the more important parts of it is that the taxpayers would get their money back and would get some return on their money. I think we are headed in a good direction.

I would respond to the point that some extraneous things were put in this bill. When it came over from the Senate, it came over with an extraneous item in it as well, and that was to change the structure of future Federal Reserve Board of Governors.

They also sent over a program which, quite honestly, I agree with, which is something that is in this bill, of allowing your local insurance agent--if he is licensed in or she is licensed in the State one resides in, to do business in other States. None of the policy that is in this bill is new policy. This is policy that this body has voted on in the past. With that, I think we have got a good bill.

I see my good friend from New York (Mrs. Maloney) over there, and I am anxious to hear her thoughts on that because this is an issue that she has been very interested in.

I thank the distinguished chairman of the Rules Committee.

Mr. Speaker, I think the point that we want to continue making here is that when we use the existing framework, the objective here was to give certainty to the industry--both the insurance industry and to the people that the insurance industry is insuring--so that over the next 6 years, they will know what the policy is. But at the same time, we are beginning to transition some of these reforms that hopefully will be a trend for future reauthorizations, should they be necessary. And let me emphasize that: should they be necessary.

One of the things that we do know is that the industry is doing a better job of being able to model what the potential risks are. There is some mitigation going on to make sure that new structures, new facilities take into account preventing the potential for certain types of attacks. So we want to encourage that kind of behavior. But it doesn't encourage that kind of behavior if there isn't some economic incentive. There is no economic incentive if the taxpayers keep having to pick up the bills on a number of these programs.

I am very pleased with the reforms that are built into this. I think we bring the market certainty in that we didn't materially change the program and that we are doing a long-term reauthorization.

I think the interesting thing is--and I think we can make the point-- there is really not anything controversial in this bill. Now, there are some people who don't like the fact that there have been some things included in it. But, quite honestly, we are taking up a Senate bill that was sent over to us with extraneous policy built into it. It is policy that, quite honestly, some of us agree with, particularly the NARAB. And why that NARAB provision, NARAB II, is important, as I said earlier, is because your local insurance agent now can do business in adjoining States without having to go take a license test in each individual State. It doesn't preempt the States' ability to regulate the insurance activity in that State but actually streamlines it and basically is a small business bill.

The other issue that has been talked about is this Business Risk Mitigation and Stabilization Act. That is an important piece of legislation because a lot of our small businesses are out there. They are trying to raise capital. They are trying to create jobs. And there are certain risks that they just don't want to take or they feel like it is in the best interest of their business to be able to help someone risk-share that with. And many of the products that they buy to share that risk, the risk factor of doing business with that company is already priced into that transaction.

But we have an overinterpretation here now, where not only are those businesses paying a risk premium but they are also having to put up additional collateral. So this begins to keep the working collateral for the company so that they can invest in new equipment and in things that can help create new jobs in this country.

I want to talk about the fact that 411 people, including the gentlewoman from New York (Mrs. Carolyn B. Maloney), voted for this piece of legislation. So this is not something that we are trying to sneak in on anybody. This is something that was voted on, in this House, by 411 votes.

And Mr. Dodd and Mr. Frank, the primary authors of the Dodd-Frank bill, both said that this was never an intention of Dodd-Frank and have spoken in favor of some kind of reform to that in the future.

So this is a good piece of legislation, and I am a little concerned that my colleagues think that it is in jeopardy. Well, the only reason it would be in jeopardy is if our colleagues over on the other side of the building decide, for some reason, that they don't want to reauthorize TRIA. That is certainly a decision that they would be making on their own. But, again, nothing in this bill is policy that has not been considered by this body in the past.

So, Mr. Speaker, I encourage my colleagues to support this rule. We need to move this forward. Time is running short, and the marketplace needs that certainty. I am confident that we will pass this bill in the House today, and we are going to encourage our folks over in the Senate to ratify that. We hope the President of the United States will help bring market certainty to the American industry in the future.