Christopher Dodd

Mr. DODD

Mr. DODD. I am happy to yield.

Mr. DODD. Madam President, I move to reconsider the vote.

Mr. DODD. Madam President, in the interest of time, I yield my time and leave the remaining time to the proponent of the amendment.

Mr. DODD. Madam President, I know my colleague from Nevada wants to be heard for a few minutes as in morning business. I will make an appeal here, as I see the leader on the floor. I only know of a couple more amendments at this point. Maybe there are more. If there are, I would like to know about them so I can have some idea and let the leader know, or give the leader an idea as to how we are going to be proceeding. I know Senator Gramm may have an amendment. I gather that Senator Hatch's may be withdrawn. I know there is an amendment by Senator Leahy. There will be a colloquy between Senator Collins and Senator Ben Nelson. My colleague from Oregon, Senator Wyden, has an interest in an amendment as well. Senator Nelson of Florida also has an amendment we may try to take up. Those are the parameters at this point. There may be other amendments. If there are, let's get some sense of it so the leader can set a schedule.

Mr. DODD. I am always glad to do it. I will be happy to hear the questions. I do not know how well I can respond to them. I suggest the absence of a quorum.

Mr. DODD. Mr. President, as a procedural matter, obviously we are not in a position to do that. I told my colleague in conversations we have had about his amendment that I will be happy to work with him to tighten up, if he believes it is necessary, the language in the underlying bill. Obviously, what is before us is a much larger amendment that covers a lot of other subject matters other than just the issue of separation of accounting. I will state for the record as well, he may prevail with his amendment. If he does, then obviously all of his language gets included. If his amendment fails when voted upon, then I will be happy to work with him to see if we cannot tighten up the language to such a degree that will satisfy him and satisfy our concerns as well. At this point, for me, in the midst of a floor action, to work on language is not the most appropriate setting for doing that, and procedurally it is awkward, obviously, with an amendment pending. We have to set that aside and take language, and I prefer we do it in the way I suggested. If the amendment of the Senator from Florida prevails, the issue becomes moot. If he does not prevail, he has my commitment to work on language to tighten up and do what he wants to do and what we are interested in doing as well, and that is getting a very clear accounting, have a very clear understanding of the difference between premiums collected for terrorism insurance and premiums collected for nonterrorism insurance, so we can have a better understanding over the next 2 years or 3 years, depending on how long this program is going to go if other amendments are adopted. The Senator already made note of the fact that we are dealing with a 24-month bill, and that is only the second 12 months if the Secretary of the Treasury decides to extend the program for an additional year. As it is presently worded, this will expire, assuming it is enacted over the next week or two and signed into law, let's say, sometime around the middle of July. Twelve months from now this whole program will be over. Our fervent hope is that by that time, the costing of this product and the other issues we talked about today will kick in and get the Federal Government out of this entirely and let the private sector deal with this issue as they have historically. But for the events on 9-11, we would not be here. The fact that there was a $50 billion event, which vastly exceeded what the reinsurance industry could calculate would be the cost, has understandably caused the industry to back up in terms of its willingness to provide insurance coverage for events they no longer can cost out, at least effectively in their minds, absent, of course, a series of other events which no one knows will be the case. That is how costing out occurs with natural disasters. After a number of years when you have certain hurricanes, as my friend from Florida knows, it is easier for them to cost events when there are a series of events they can judge over a series of years. Because this is such a unique event, what happened here--and we hope this is the last time it ever occurs--but in the absence of having a series of events, it is very difficult for them actuarially to determine what costs are in order to set premiums. I will be happy to work with my colleague from Florida under the circumstances that I have described.

Mr. DODD. The key paragraphs deal with the underlying issue; that is, the Treasury Department does not have the infrastructure needed to monitor insurance rates as the amendment proposes. Putting such a monitor mechanism in place could be cost prohibitive, particularly when the underlying Federal legislation is short term in nature. These are the State commissioners. They say: The separate accounting could cause reporting difficulties and added expenses for insurers, insurance regulators and presumably the Treasury Department. The marginal benefits and costs associated with collecting the information could outweigh the benefits that could be derived from the information. Lastly they say: At this time, state regulators already have the ability to address this issue, making additional Federal oversight unnecessary. Mr. President, does my colleague have additional questions?

Mr. DODD. Mr. President, I will concede that point because this is a 2-year bill that sunsets. Obviously, we are talking about if all of a sudden the Department of the Treasury--is going to set rates and engage in all of the activities that a normal insurance commissioner would, on a Federal level it is going to require a rather significant step forward. Let me address this. The one point the Senator from Florida has raised with which I agree--the language is different, but I think the point is the same. In the underlying bill, on page 12, lines 7 through 12, paragraph 2, under conditions for Federal payments: No payment may be made by the Secretary under subsection (e) unless . . . (2) the participating insurance company provides clear and conspicuous disclosure to the policyholder of the premium charged for insured losses covered by the Program and the Federal share of compensation for insured losses under the program. In effect, it is separate accounting so that we have a very clear accounting procedure which allows that whatever premiums are collected for terrorism insurance would be accounted for separately from other premiums collected. The language the Senator from Florida has is even more explicit. It requires segregation of the funds and the like. I don't disagree with him on that part of his amendment, that we ought to have separate accounting. Secondly, in response to some comments made by my colleague from Florida, there are significant reporting requirements. Let me remind my colleagues again, what we have done with the underlying bill is maintain the important role of State insurance commissioners. Rates will be set by insurance commissioners at the State level. Now they are done differently. I will repeat the point. Under existing law in the 50 States, 40 States presently allow rates on property and casualty in the commercial field to go forward, and then the commissioner can rule that the rate is too high. In 10 States, the State law prohibits any rate increase prior to approval by the State commissioner's office. Under this bill, we do a number of things. One of the things we do here is follow what 40 States do. In other words, under this, we will allow for rate increases to occur, but we in no way undercut the historic role of State commissioners then to oppose a rate increase. So we maintain a very strong role for the insurance commissioners. Why? Because, obviously, the expertise is there. They have the shops and the personnel to do it. To all of a sudden allow one Federal regulator, the Department of the Treasury, to do that would be asking too much, and it would be very difficult for the apparatus to be set up.

Mr. DODD. In response, I think the story in the Washington Post this morning, in fact, makes the case of why we are here. Those rates are going up on the National Geographic building and on the Washington Post itself. There were several other enterprises. George Washington University, for instance, is mentioned in the article. That is done in the absence of this bill. As I described apparently not very well a few minutes ago, costing this kind of an event, 9-11, is very difficult. So the insurance industry is out there and it is going to protect itself. We believe with this bill being a backstop for a couple of years we could help put the brakes on exactly the kind of story the Senator is reading from the Washington Post. If my colleague is worried about premium rate increases, it seems to me that while our bill is not perfect, there is a greater likelihood we are going to be able to protect consumers more against rate increases having passed this bill, making the case that now there is a backstop so that the kind of exposure that they would be subjected to in the absence of this bill would be less. If we do not pass this bill, if it is voted against, or a Federal regulator is created and there is a lot of other unnecessary bureaucracy, then we run the risk of not only what happened in Washington happening elsewhere--in fact, it is happening. We already know that terrorism insurance is not available in a lot of places, and where it is, it is very costly. We want to do what we can to stop the tremendous increase in that cost. That is what brings us here. That is why, as well--I made the point earlier and I make it again--we require on page 12 of our bill that there be a very clear disclosure of what premiums are being charged. We put that right in the bill, clear and conspicuous to policyholders, what the premiums are and what the distinction is between premiums collected for that and premiums collected for other forms of insurance. We do not go as far as my colleague from Florida does by requiring segregation of accounts, but we think that provision for 24 months is a good consumer protection provision, and it will give us the kind of information we need to have. The three reports I have mentioned are rather extensive involving the National Association of Insurance Commissioners, the GAO, the Commerce Department, the Treasury Department, the Federal Trade Commission, all requiring information be gathered so we can get, within 6 months, some clear indication of how this is working. In conclusion, I say to my colleague from Florida, I will be the first to admit I cannot tell him that the Senator from New Jersey; the Senator from Maryland; the two Senators from New York, Mrs. Clinton and Mr. Schumer; and I have written a perfect bill. If the Senator is asking me to say that, I cannot say that because we are in uncharted waters in many ways. So we are trying to respond to a problem that exists. We know for a fact that there is a major slowdown in our economy because major projects have either been cancelled or stalled because they cannot get the financing necessary to go forward. The reason they cannot get the financing is because they cannot get the insurance. Every homeowner in America knows what I am talking about. If they cannot get insurance, then their banker is not going to lend them the money for the mortgage. That is a fact of life. That is just as true in commercial enterprises as it is in residential. With the absence of insurance, the banks do not lend the money. The projects do not go forward and there is higher unemployment and a slowdown of the economy. If my colleague is looking for perfection, I cannot give it to him. All I can tell him is we are trying our best to frame something for 24 months that will reduce the spike in premium costs and have as a backstop the Federal Government, but let the private sector try to solve these crises or problems in the interim, with us getting out of the business as soon as we can.

Mr. DODD. At some point I will, but let me get through my statement. Let me tell you some of the reporting requirements we have here and why this would be. The Senator's amendment does set up the Secretary of the Treasury to be the regulator. There may be Members who believe that is a progressive step. I think it is dangerous. Secondly, it would have the effect of a price control, trapping capital for many issues that do not experience a loss attributable to acts of terrorism. I don't think we want to do that. We are not trying to facilitate a clogging up of the commercial process that is ongoing. Thirdly, with regard to the reports, the Secretary must report to Congress 9 months after date of enactment on the availability and affordability of the insurance for terrorism and a reflection on the impact on the U.S. economy. The Secretary must report to Congress 9 months after the date of enactment on the availability of life insurance and other lines of insurance coverage. We only deal with property and casualty. There is a legitimate issue being raised about other forms of insurance that we do not cover in this bill. Also, participating insurance companies must report their terrorism premium rates to the National Association of Insurance Commissioners every 6 months. These reports will be forwarded from the NAIC to the Treasury Department, the Commerce Department, the Federal Trade Commission, and the General Accounting Office. These agencies would submit a joint report to Congress summarizing and evaluating the data they receive from the NAIC. The GAO will report to Congress on its evaluation of the agency reports. We are trying to get as much internal information as we can coming through here so we can provide additional data when it comes to rate increases. There is a very important point to make about insurance commissioners. Insurance commissioners not only set rates, what premiums can be charged, but in every State they bear the responsibility of seeing to it that insurance companies that do business in their States are solvent. That is a critical issue for consumers. In fact, if they hold policies under an insurance company and that company lacks solvency, then obviously those consumers are in jeopardy of not having their claims paid if some event occurs. I am not just talking about terrorism insurance here. So the dual responsibility of insurance commissioners is to not only set rates, but also to make sure that the companies themselves are solvent. Again, this is not terribly complicated when it comes to the political questions. It doesn't take a lot to attack an insurance company. That is a safe bet politically. People don't like rate increases, and they know the difficulties they can have when claims are filed. The problem is, if you are opposed to the idea of insurance companies, vote against the bill. I guess that is a simple answer; it is probably a safe bet if that is your concern. If you are worried at all, as you ought to be, about the fact that banks are not providing the loans to major commercial enterprises because of the absence of terrorism insurance, and you hear, as we have, from the AFL-CIO, as well as others, that there is a growing job loss over this, it is causing a problem economically, and when you already have 10 percent of the commercial mortgage markets and the secondary-market-backed securities already in the first quarter not forthcoming in the bond market, these are signals that we have a problem economically. If you want the Federal Government to be an insurance company, you ought to vote for the amendment of the Senator from Florida. That is what we did in World War II. If you believe it makes sense in the longer term to have the private sector involved in insurance and not the Federal Government, then it seems to me you ought to vote against this amendment and vote for the underlying bill. That is a choice you have to make. In a few hours, you can make that choice. The amendment of the Senator from Florida runs the risk of providing a program that I don't think is workable, except for the point I mentioned earlier. I don't disagree with my colleague about having an accounting process that makes it possible for us to distinguish between premiums collected for terrorism insurance and for nonterrorism insurance. I hope that when this amendment comes up for a vote in about an hour, or less than that, my colleagues will do what I think is the responsible thing to do here, and that is reject this amendment. I have told my colleague from Florida I am happy to work with him on the provision dealing with the accounting question because I agree with him on that. I think we want to have clear accounting so we know what is going on. With all due respect--and he is a good friend, and I have great respect for him, and I admire the work he did as insurance commissioner of the State of Florida--providing the Secretary of the Treasury the ability to become an insurance regulator goes too far, in my view. To require segregation of these accounts entirely would run the risk of insurance commissioners at the local level being able to guarantee the solvency of these companies to do business in their States, which you know, as a former insurance commissioner, is a critical part of the function of an insurance commissioner at the State level. For those reasons, I strongly urge that my colleagues reject this amendment. I see my friend from Massachusetts. I am wondering what is on his mind. Let me suspend for 1 minute, Mr. President. Our colleague from Massachusetts informs me there is a markup of a bill that may require the presence of both the Senator from Connecticut and the Senator from Florida.

Mr. DODD. Let me say to my colleague, we are doing here what is done in 40 States. My colleague is right; in 10 States they do it differently. We tried to set up a system that made some sense. That is, you are right, the rates go into effect but we still retain the strong involvement of your State insurance commissioners to go forward. I ask unanimous consent a letter be printed in the Record that I received from the National Association of Insurance Commissioners on this amendment and their concerns about the amendment of distinguished Senator from Florida.

Mr. DODD

Mr. DODD. Madam President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a markup on Thursday, June 13, 2002, at 10:00 a.m. in Dirksen Room 226. Tentative Agenda i. nominations Henry E. Autrey to be a U.S. District Court Judge for the Eastern District of Missouri; Richard E. Dorr to be a U.S. District Court Judge for the Western District of Missouri; David Godbey to be a U.S. District Court Judge for the Northern District of Texas; Henry Hudson to be a U.S. District Court Judge for the Eastern District of Virginia; Timothy Savage to be a U.S. District Court Judge for the Eastern District of Pennsylvania; and Amy J. St. Eve to be a U.S. District Court Judge for the Northern District of Illinois. To be a United States Attorney: Gregory Robert Miller for the Northern District of Florida, and Kevin Vincent Ryan for the Northern District of California. To be a United States Marshal: Ray Elmer Carnahan for the Eastern District of Arkansas, David Scott Carpenter for the District of North Dakota, Theresa Merrow for the Eastern District of Georgia, Ruben Monzon for the Southern District of Texas, and James Michael Wahlrab for the Southern District of Ohio. ii. bills S. 1956, The Safe Explosives Act [Kohl/Hatch/Schumer/Cantwell] S. 1291, Development, Relief, and Education for Alien Minors Act [Hatch] S. 2134, Terrorism Victim's Access to Compensation Act of 2002 [Harkin/Allen] H.R. 3375, Embassy Employee Compensation Act [Blunt] III. Resolutions S. Con. Res. 104, A concurrent resolution recognizing the American Society of Civil Engineers on the occasion of the 150th anniversary of its founding and for the many vital contributions of civil engineers to the quality of life of the people of the United States, including the research and development projects that have led to the physical infrastructure of modern America. [Jeffords/Smith] H. Con. Res. 387, Recognizing the American Society of Civil Engineers for reaching its 150th Anniversary and for the many vital contributions of civil engineers to the quality of life of our Nation's people including the research and development projects that have led to the physcial infrastructure of modern America [Barton/Moore]

Mr. DODD. Madam President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Thursday, June 13, 2002 at 2:30 p.m. to hold a closed business meeting.

Mr. DODD. Madam President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a hearing on Judicial Nominations on Thursday, June 13, 2002, in Dirksen Room 226 at 2 p.m. Agenda Witnesses Panel I: The Honorable Arlen Specter, United States Senator (R-PA); the Honorable Mitch McConnell, United States Senator (R-KY); the Honorable Dianne Feinstein, United States Senator (D-CA); the Honorable Rick Santorum, United States Senator (R-PA); the Honorable Jim Bunning, United States Senator (R-KY); the Honorable Bill Nelson, United States Senator (D-FL); and the Honorable Roscoe Bartlett, United States Representative (Republican, 6th District of Maryland). Panel II: John Rogers to the U.S. Court of Appeals for the Sixth Circuit. Panel III: David Cercone to be U.S. District Court Judge for the Western District of Pennsylvania; Morrison Cohen England Jr. to be U.S. District Court Judge for the Eastern District of California; and Kenneth Marra to be U.S. District Court Judge for the Southern District of Florida. Panel IV: Lawrence Greenfeld to be Director, Bureau of Justice Statistics.

Mr. DODD. Madam President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, June 13, 2002 at 10:00 a.m. to hold a hearing on the CEDAW Treaty. Agenda Witnesses Panel 1: The Honorable Carolyn B. Maloney (D-NY), U.S. House of Representatives, Washington, DC; the Honorable Juanita Millender- McDonald (D-CA), U.S. House of Representatives, Washington, DC; the Honorable Constance A. Morella (R-MD), U.S. House of Representatives, Washington, DC; and the Honorable Lynn C. Woolsey (D-CA), U.S. House of Representatives, Washington, DC. Panel 2: The Honorable Harold Hongju Koh, Prefessor, Yale Law School, Former Assistant Secretary of State for Human Rights, New Haven, CT; the Honorable Juliette C. McLennan, Former U.S. Representative to the UN Commission on the Status of Women, Easton, MD; Ms. Jane E. Smith, Chief Executive Officer, Business and Professional Women/USA, Washington, DC; Ms. Kathryn Ogden Balmforth, Member, Firm of Wood Crapo, L.L.C., Salt Lake City, Utah, Former Director, World Family Policy Center, Brigham Young University, Provo, Utah; Ms. Jeane Kirkpatrick, Senior Fellow & Director of Foreign and Defense Policy Studies, American Enterprise Institute, Former Permanent Representative to the United Nations, Washington, DC; and Dr. Christina Hoff Sommers, Resident Scholar, American Enterprise Institute, Chevy Chase, MD.

Mr. DODD. Madam President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, June 13, 2002 at 2:15 p.m. to hold a business meeting to consider and vote on S. 2525, a bill to amend the Foreign Assistance Act of 1961 to increase assistance for foreign countries seriously affected by HIV-AIDS, tuberculosis, and malaria, and for other purposes.

Mr. DODD. Madam President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet for a hearing on Implementation of Reading First and Reading Programs and Strategies during the session of the Senate on Thursday, June 13, 2002 at 10 a.m. in SD-430.

Mr. DODD. Madam President, I ask unanimous consent that the Committee on Finance be authorized to meet in open executive session during the session of the Senate on Thursday, June 13, 2002, at 10 a.m. Agenda: H.R. 7: Community Solutions Act. S. 2498: Tax Shelter Transparency Act. S. 2119: Reversing the Expatriation of Profits Offshore Act.

Mr. DODD. Madam President, I ask unanimous consent that the Subcommittee on Housing and Transportation of the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Thursday, June 13, 2002, at 10:00 a.m. to conduct an oversight hearing on ``TEA-21: A National Partnership.''

Mr. DODD

Mr. DODD. Madam President, I ask unanimous consent that Jessica Byrnes be granted floor privileges for the duration of the debate on S. 2600.

Mr. DODD

Mr. DODD. The Senator's understanding is correct. Reinsurance is important to the property and casualty insurers as well as to the group life insurance industry.

Mr. DODD. I concur with the senior Senator from Texas and will do all I can to address the legitimate needs of group life insurers in conference. To that end, I would invite the group life industry to continue to work with us so that we can better understand the problems that it now faces.

Mr. DODD

Mr. DODD. I would make a parliamentary inquiry. If there is a unanimous consent request which is agreed to, for the consideration of an amendment that would otherwise fail in a postcloture environment, does that amendment still prevail if cloture is invoked? Or at least will that amendment be considered without being violative of the rules of cloture?

Mr. DODD. My concern is we are providing the Senator from Kansas something that has been provided to no one else. We could have every Member demand a unanimous consent on totally irrelevant amendments to this bill. If we go down that road and if the Senator wants to kill this bill, that is fine, filibuster the bill, but to bring up totally extraneous amendments, it seems to me, is unwarranted. I have talked a number of our colleagues out of offering amendments that had nothing to do with this bill, no matter how meritorious their proposals. Certainly, the majority leader has indicated the Senator has the right precloture to bring up an amendment. Cloture has not been invoked. If we can move this bill along, there is no reason for it to be invoked, but to cut out one exception for one Member to make a unanimous consent request, after I have talked other people out of it, I do not think is terribly fair. I urge my colleague from Kansas to withdraw the request. If we can agree to move this bill along, we are dealing, then, with the Santorum amendment tomorrow. We have tomorrow, next Monday, next Tuesday. We can spend all next week on this bill if Members are so inclined.

Mr. DODD. Will the majority leader yield for one question?