H.R. 4504

119th CONGRESS 1st Session

To require the Secretary of the Treasury to establish a catastrophic property loss reinsurance program, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES · July 17, 2025 · Sponsor: Ms. Kamlager-Dove · Committee: Committee on Financial Services

Table of contents

• H.R. 4504
  • SEC. 1. Short title
  • SEC. 2. Definitions
  • SEC. 3. Catastrophic property loss reinsurance program
  • SEC. 4. Reports on relocation fund and earthquake coverage
  • SEC. 5. Long-term policy pilot program

SEC. 1. Short title

• This Act may be cited as the or the .

SEC. 2. Definitions

• In this Act:
  • The term all-perils property insurance policy means a property insurance policy approved by a State which includes coverage for catastrophe perils as those perils are added to the Program.
  • The term catastrophe peril means the damage caused by—
  • The term engaged in the business of insurance means a person or entity that is subject to oversight by a State insurance department.
  • The term Fund means the Federal Catastrophe Reinsurance Fund established under section 3(i).
  • The term — insurer
  • The term participating insurer means an insurer that is participating in the Program.
  • The term Program means the catastrophic property loss reinsurance program established under section 3(a).
  • The term property insurance policy means a contract of insurance, through a policy form approved by a State insurance department, that provides, among other coverages, coverage for physical damage to residential or commercial property.
  • The term Secretary means the Secretary of the Treasury.
  • The term statistical plan means—

SEC. 3. Catastrophic property loss reinsurance program

• (a) In general
  • Not later than 4 years after the date of enactment of this Act, the Secretary shall establish a catastrophic property loss reinsurance program to provide reinsurance for qualifying primary insurance companies.
• (b) Eligibility
  • An insurer is qualified to participate in the Program if such insurer—
    • offers an all-perils property insurance policy, as perils are phased in under subsection (d), for—
      • residential property insurance policies; or
      • commercial property insurance policies; and
    • offers a loss prevention partnership with the policyholder to encourage investments and activities that reduce insured and economic losses from a catastrophe peril.
• (c) Consultation
  • The Secretary may contract with reinsurance brokers and consultants to assist the Secretary in the design and management of the Program.
• (d) Program phase-In timeline
  • The Secretary shall—
    • not later than January 1 of the year beginning 4 years after the date of enactment of this Act, operate the Program for the perils of wind and hurricane;
    • not later than January 1 of the year beginning 5 years after the date of enactment of this Act, operate the Program for the perils of severe convective storm and wildfire;
    • not later than January 1 of the year beginning 6 years after the date of enactment of this Act, operate the Program for the peril of flood; and
    • not later than the earlier of January 1 of the year beginning 8 years after the date of enactment of this Act or the date on which the feasibility report described in section 4(2) is submitted, operate the Program for the peril of earthquake.
• (e) Threshold for payment
  • (1) In general
    • The Secretary shall, after consulting with the advisory committee established under subsection (h), establish a financial threshold at which a participating insurer may receive amounts from the fund established under subsection (i).
  • (2) Threshold calculation
    • The threshold established under paragraph (1) shall be an amount that is not greater than 40 percent of the probable maximum loss of an individual participating insurer for each catastrophe peril included in the Program.
  • (3) Considerations
    • In establishing the threshold described in paragraph (1), the Secretary shall consider—
      • the amount of reinsurance necessary to meaningfully reduce the cost to the participating insurer to—
        • (i) provide coverage for catastrophe perils covered by the Program; and
        • (ii) encourage States to require participating insurers to offer an all-perils property insurance policy;
      • the levels of primary insurer retention and private reinsurance market capacity necessary to—

SEC. 4. Reports on relocation fund and earthquake coverage

• The Secretary shall—
  • not later than 2 years after the date of enactment of this Act, submit to Congress a report on the feasibility of establishing a fund to relocate homes and businesses that have become uninsurable due to catastrophe perils; and
  • not later than 3 years after the date of enactment of this Act, submit to Congress a report on the feasibility of including earthquakes as a peril covered under the all-perils property insurance policy.

SEC. 5. Long-term policy pilot program

• (a) In general
  • The Secretary shall, in consultation with States and the National Association of Insurance Commissioners, establish a pilot program for all-perils property insurance policies, as perils are phased in under section 3(d), with a policy term of at least 5 years (in this section referred to as a ). multi-year policy
• (b) Premium and policy conditions
  • An insurer who participates in the pilot program established under this section may—
    • increase premiums based on—
      • price indexes of construction costs;
      • changes in home value; and
      • optional coverages selected by the policyholder;
    • not increase premiums based on a change in the assessment by the insurer of the catastrophe peril risks associated with the insured property;
    • require property maintenance consistent with the condition of the property at time of initial policy issuance; and
    • require loss mitigation investment partnerships as a condition for the multi-year policy.
• (c) Actions by the policyholder
  • (1) Policy continuation
    • With the agreement of the insurer, a consumer purchasing the property during the term of the multi-year policy may continue the policy for the remainder of the term.
  • (2) Election to new insurer
    • If the policyholder elects to move to a new insurer during the term of the multi-year policy, the new insurer may take into account loss mitigation investment partnerships with the prior insurers in rate setting.
  • (3) Cancellation by policyholder
    • If the policyholder is the recipient of any funds for loss prevention property improvements from the insurer, Federal, State, local government, or other source and the policyholder cancels the policy before the end of the multi-year policy term, the policyholder shall return a pro-rata share of such improvement to the source of the funds.

• (i) promote stable and competitive markets for catastrophe reinsurance; and
• (ii) incentivize the establishment by private parties of capital market alternatives to reinsurance, for example the creation of a market for catastrophe bonds; and