Insurance priorities for the U.S. Senate

Sen. Chris Dodd, D-Conn., is the incoming chairman of the Senate Committee on Banking, Housing and Urban Affairs, which has jurisdiction over flood and terrorism insurance, as well as over regulation of insurance, credit and other financial services markets. The following are excerpts taken from Sen. Dodd’s remarks on Dec. 7 2006, outlining what he sees as priorities for his committee.

After last month’s mid-term elections, I said I thought that voters were demanding two things from Washington: a change in tone and a change in direction. By “change in tone,” I was referring to the voters’ demand that we replace partisanship with cooperation and progress. This Committee has a long tradition of members working on a bipartisan basis. Chairman (Richard) Shelby certainly deserves a great deal of credit for honoring and strengthening that tradition.

I believe that the Committee should have two primary priorities. The first is strengthening the military and homeland security of our nation. The Committee has been engaged in that effort over the past several years, particularly since the attacks of Sept. 11, 2001. It is my intention that this work should continue. Its importance can hardly be overemphasized.

To that end, I will continue the Committee’s efforts to combat terrorist financing with oversight hearings and, if necessary, legislation. This includes breaking up drug trafficking and money laundering operations, particularly those used by narco-terrorists — from Afghanistan to Latin America. I will also work … to again report out a transit security bill.

We will revisit TRIA, the Terrorism Risk Insurance Act. That law, passed in 2002, has done a good job of helping to protect companies and consumers from the economic risk associated with a future terrorist attack. It is set to expire at the end of 2007. The Committee will consider whether to extend this law, and if so, what form a reauthorized TRIA should take.

In addition to security, the second priority of the Committee will be prosperity. By that, I mean exploring the ways in which we can ensure that our economy continues to grow and create wealth and opportunity for the broadest possible number of Americans.

Over the past several years, we have seen some troubling trends take root in our nation. The working majority of Americans has found itself struggling against powerful forces — global competition for well-paying jobs, stagnant incomes, and explosive increases in the cost of health care, housing, education, and energy.

Our first obligation in this regard will be to discharge core oversight responsibilities. We will conduct our semi-annual hearings with the chairman of the Federal Reserve Board. We will continue to monitor the health of the dollar and review the Administration’s policy on the trading and exchange rate practices of other nations. We will conduct oversight of the regulatory agencies.

I intend to turn the Committee’s attention to other matters that also bear on the ability of our people to prosper. We will, for starters, give a high priority to expanding homeownership opportunities for Americans. Nothing is more fundamental than homeownership to the achievement of the American Dream.

We will examine hedge funds and the role this trillion dollar industry is playing in the economy. We will examine proposals to strengthen the competitive position of our financial markets in the global economy, including the recent report of the Committee on Capital Markets Regulation.

As a result of Hurricane Katrina and other floods, the National Flood Insurance Program is heading to bankruptcy. It will need to be reauthorized. Chairman Shelby and Sen. (Paul) Sarbanes passed a good bill out of Committee earlier this year. I’d like the Committee to pursue this legislation and try to convince colleagues off the Committee to support it.

And speaking of Hurricane Katrina, we will continue the Committee’s oversight of recovery efforts. We will also consider the implications that global warming is having.

Forecasters predict that, as a result of global warming, hurricanes, floods, tornadoes, and other natural disasters can be expected to rise in the future. Already, we are witnessing decisions by private insurers to reduce their exposure in areas of our country that they deem to be at excessive risk of a natural catastrophe. Those decisions are matters of not just local and state interest, but the national interest. Because insurance is a fundamental prerequisite to a healthy national economy … we will review the status of the current regime of state regulation of insurance, and consider proposals to establish an optional federal charter for insurers.

In our economy, credit plays an essential role in people’s ability to make progress economically. At the same time, it has become increasingly evident over the last several years that certain forms of credit can create pitfalls that trap consumers in a hole of debt from which they may never escape. [I]t is highly appropriate that the Committee consider the impact of credit cards and other forms of unsecured debt on consumers’ economic prospects.

It is not enough that we be concerned with the providers of financial services. We must also turn our concern to the users of those services. We will examine efforts … to improve financial literacy … and … protecting the security and privacy of personal financial information — and what procedures ought to be followed if that security is breached.

Topics Catastrophe USA Legislation Flood Politics