INSURE Act
- Bill Number
- H.R. 4504
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-07-17: Referred to the House Committee on Financial Services.
- Last Updated
- 2026-01-16T09:06:10Z
AI-Generated Summary
Purpose
The INSURE Act (H.R. 4504) aims to create a federal reinsurance program to help property insurance companies manage large-scale losses from natural disasters, such as hurricanes and wildfires. By providing a financial backstop, the legislation seeks to stabilize insurance markets, encourage broader coverage for high-risk areas, and promote activities that reduce future disaster damages. This addresses growing challenges from climate-related events making some properties hard to insure.
Key Provisions
- Program Establishment: The Secretary of the Treasury must set up the Catastrophic Property Loss Reinsurance Program within 4 years of enactment. It offers reinsurance (a form of insurance for insurers) to qualified companies covering damages from specified "catastrophe perils" like wind, hurricanes, wildfires, severe storms, floods, and potentially earthquakes.
- Eligibility and Participation: Insurers qualify if they offer "all-perils" property insurance policies (covering multiple disaster types, as phased in) for homes or businesses and partner with policyholders on loss prevention efforts, such as property upgrades to reduce risks.
- Phase-In Timeline: Coverage starts with wind and hurricanes (year 4), adds severe storms and wildfires (year 5), floods (year 6), and earthquakes (year 8 or earlier, based on a feasibility report).
- Financial Mechanisms:
- Threshold for Payouts: Reinsurance kicks in after an insurer's losses exceed a threshold (up to 40% of their maximum expected loss per peril), set to balance affordability, market stability, and incentives for private alternatives like catastrophe bonds (investments that pay out during disasters).
- Premiums: Participating insurers pay quarterly premiums based on their risk exposure, expected losses, and program costs. Premiums must be at least 50% of expected losses plus admin fees, with annual increases capped at 7% (excluding exposure adjustments).
- Federal Fund: A Federal Catastrophe Reinsurance Fund holds premiums and invests them. If funds run low, the Treasury can issue government-backed notes or bonds to cover claims, with repayment from fund earnings.
- Loss Prevention: Insurers must encourage policyholders to invest in risk-reducing measures (e.g., requiring upgrades for coverage). The program excludes simple premium discounts without insurer investment or general advice as qualifying partnerships.
- Advisory Committee: A diverse 20+ member group advises on program design, premiums, and thresholds. It includes consumer advocates, insurers, reinsurers, regulators, legislators, agents, lenders, and federal agency representatives (e.g., FEMA, EPA).
- Data Collection: Insurers report quarterly data on exposures and claims via a standardized plan. Data is shared (without personal info) with federal offices, states, and others to monitor financial risks and promote competitive markets. A statistical agent handles collection.
- Reports: Within 2 years, assess feasibility of a relocation fund for uninsurable properties; within 3 years, evaluate adding earthquakes.
- Pilot Program: Test multi-year (at least 5-year) all-perils policies, where premiums can't rise due to changing risk assessments but can adjust for construction costs or home values. Includes rules for policy transfers, maintenance, and repaying loss prevention funds if canceled early.
Significant Changes to Existing Law
This bill introduces an entirely new federal reinsurance framework, which does not currently exist at the national level for private property insurers (unlike the National Flood Insurance Program, which is separate and government-run). It shifts some disaster risk from states and private markets to the federal government, potentially overriding or influencing state insurance rules by encouraging "all-perils" policies. It also mandates new data reporting and creates a dedicated fund with borrowing authority, expanding Treasury's role beyond traditional financial oversight.
Potential Impacts
- Government Agencies: The Treasury gains new responsibilities for program administration, fund management, and debt issuance, potentially increasing federal spending and borrowing. Agencies like FEMA and EPA may collaborate on loss prevention and data use, improving disaster preparedness coordination.
- Citizens: Homeowners and businesses in disaster-prone areas could see more affordable and available insurance, reducing uninsurable properties and aiding recovery. However, federal involvement might lead to higher taxes or premiums indirectly. The pilot could stabilize long-term rates but require upfront investments in property upgrades.
- International Relations: Minimal direct impact, though shared data on U.S. insurance risks could inform global financial stability assessments. The program might attract international reinsurers to U.S. markets, fostering economic ties.
Main Stakeholders Affected
- Insurers and Reinsurers: Primary property insurers (participating ones) gain reinsurance access but must pay premiums and report data; reinsurers advise but face competition from the federal backstop.
- Consumers and Policyholders: Individuals and businesses in high-risk areas benefit from expanded coverage and loss prevention incentives, especially underserved communities.
- State Governments: Insurance regulators oversee participation and data; states may adopt all-perils mandates to leverage the program, affecting local markets.
- Federal Agencies: Treasury leads implementation; others (e.g., HUD, VA, OMB) provide input via the advisory committee.
- Financial Institutions: Banks and mortgage lenders could see reduced lending risks in insured areas; the Office of Financial Research monitors systemic stability.
- Advocacy Groups: Consumer, environmental, and climate organizations influence via the advisory committee, pushing for equitable access.
Notable Legal, Constitutional, or Political Implications
- Legal: The program's data collection must protect policyholder privacy (no public disclosure of personal info), aligning with existing privacy laws. Premiums and thresholds require balanced considerations to avoid favoring large insurers, potentially inviting lawsuits over fairness. The relocation fund report could lead to eminent domain or property rights issues if pursued.
- Constitutional: Federal borrowing via notes/bonds (guaranteed by the U.S.) is standard but expands executive authority under Treasury, possibly raising debt ceiling debates. Interstate commerce clause likely justifies federal intervention in insurance, a traditionally state-regulated field.
- Political: Bipartisan sponsorship highlights disaster policy consensus, but funding reliance on premiums and bonds may spark debates on federal risk exposure amid climate change. The diverse advisory committee promotes inclusivity but could politicize decisions; phase-in delays allow for adjustments based on feasibility reports.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Kamlager-Dove, Sydney [D-CA-37]
Cosponsors (6)
Rep. Matsui, Doris O. [D-CA-7], Rep. Carbajal, Salud O. [D-CA-24], Rep. Wasserman Schultz, Debbie [D-FL-25], Rep. Tokuda, Jill N. [D-HI-2], Rep. Lofgren, Zoe [D-CA-18], Rep. Huffman, Jared [D-CA-2]
Recent Actions
- 2025-07-17: Referred to the House Committee on Financial Services.
- 2025-07-17: Introduced in House
- 2025-07-17: Introduced in House
Bill Versions
- Incorporating National Support for Unprecedented Risks and Emergencies Act — issued 2025-07-17 — PDF (18 pages)