,i #aagth ,,congress #b;d ,session ,h4 ,r4 #gfdc ,,in ,,the ,,house ,,of ,,representatives ,may #c1 #bjbb,mr4 ,crist introduced the following bill2 which was referred to the ,committee on ,financial ,services ,a ,,bill ,to establish a ,natural ,disaster ,risk ,reinsurance ,program1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,fueling ,affordable ,insurance for ,today's ,homeowners ,act of #bjbb or the ,,faith ,act of #bjbb4 #b4 ,natural ,disaster ,risk ,reinsurance ,program 7a7 ,establishment of program 7#a7 ,in general ,there is established in the ,department of the ,treasury the ,natural ,disaster ,risk ,reinsurance ,program1 which shall apply only to covered events occurring on or after ,january #a1 #bjbc4 7#b7 ,goal ,the goal of the ,program shall be to protect insurers from insolvency resulting from covered events of a significant magnitude in a manner that provides for affordability of coverage in the marketplace for losses from such covered events4 7#c7 ,authority of ,secretary ,notwithstanding any other provision of ,state or ,federal law1 the ,secretary shall administer the ,program1 in consultation with the ,director of the ,federal ,insurance ,office1 and shall make payments to ,states in accordance with subsection 7b7 to cover insured losses4 7#d7 ,voluntary participation 7,a7 ,in general ,participation in the ,program shall be voluntary on the part of a ,state1 subject to the requirements under paragraph 7#d74 7,b7 ,election ,the ,secretary shall provide a procedure by which ,states may elect to participate in the ,program4 7,c7 ,termination of participation ,the ,secretary shall provide a procedure by which ,states may elect to terminate participation in the ,program1 which shall require advance notice to the ,secretary of not less than #ahj days before such termination is effective4 7#e7 ,required ,state plan ,to be eligible to participate in the ,program a ,state shall have in effect a plan1 approved by the ,secretary1 that provides such assurances to the ,secretary as the ,secretary considers necessary-- 7,a7 to ensure that insurers will cover claims for insured losses occurring in the ,state during the participation of the ,state in the ,program not exceeding the trigger amount for the ,state under subsection 7b77#b72 7,b7 to ensure that insurers submit to the ,state insurance regulator and the ,state insurance regulator submits to the ,secretary1 in accordance with such reasonable procedures as the ,secretary may establish1 information sufficient for administration of the ,program1 including information regarding claims for insured losses occurring in the ,state1 insured losses incurred1 and direct written premium for covered insurance in the ,state2 7,c7 to distribute ,federal payments under the ,program appropriately among insurers based on insured losses suffered by insurers and insurers' market shares2 7,d7 to pledge the ,state's full faith and credit toward full repayment to the ,secretary1 within #aj years of receipt1 of any ,federal payment amounts provided under subsection 7b7 and to provide a regular payment schedule over such #aj-year period2 and 7,e7 to provide appropriate treatment under the program for any insurer that is a ,state residual market insurance entity4 7#f7 ,treatment of existing policies ,this ,act may not be construed to affect any policy for covered insurance in force on the date of the commencement of participation in the ,program by the ,state in which the dwelling covered by such insurance is located1 but the ,program shall apply to policies renewed after such date4 7b7 ,federal payments for excessive insured losses 7#a7 ,federal payment ,pursuant to the occurrence of a covered event1 the ,secretary shall pay to each participating ,state an amount equal to the amount by which the aggregate industry-wide insured losses within such participating ,state resulting from such covered event exceed the trigger amount in effect at such time under paragraph 7#b7 for such participating ,state for the type of covered event that occurred4 ,the ,secretary shall provide for payments under this subsection for a participating ,state for a covered event to be made in installments of approximately #be percent of the estimated total amount to be provided for such ,state in connection with such disaster1 as best determined by the ,secretary after consideration of the information regarding insured losses provided to the ,secretary pursuant to paragraph 7#b77;,d74 7#b7 ,state trigger amounts 7,a7 ,,nas authority ,the ,secretary shall enter into an agreement with the ,national ,academy of ,sciences 7in this paragraph referred to as the ,academy7 under which the ,academy shall propose to the ,secretary1 for each participating ,state and for each different type of covered event1 a trigger amount under this paragraph4 ,a trigger amount proposed for a ,state shall be effective for purposes of the ,program only upon review1 adjustment if necessary1 and approval by the ,secretary4 7,b7 ,considerations ,the trigger amount proposed by the ,academy for a participating ,state for a type of covered event shall be the lesser of-- 7i7 the total direct written premiums for covered insurance in the participating ,state2 and 7ii7 the amount1 as determined by the ,academy1 that when applied under the ,program1 protects insurers from insolvency in the case of covered event of such type of a severity equal to or exceeding that of a covered event of such type having a two percent chance of occurring in any given year4 7,c7 ,revision ,the agreement pursuant to subparagraph 7,a7 shall provide for the ,academy to review and revise the proposed trigger amounts for each participating ,state not less frequently than once every #bd months1 and more frequently at the request of the ,secretary4 ,any revised trigger amount may not take effect under the ,program before the expiration of the #ahj-;day period beginning upon the provision by the ,secretary to such participating ,state of written notification of such revised trigger amount4 7,d7 ,assessment of insured losses ,the agreement pursuant to subparagraph 7,a7 shall provide that following the occurrence of a covered event1 the ,academy shall1 for each participating ,state affected1 make assessments of the insured losses for each such ,state and provide such information to the ,secretary4 ,such assessments shall be made on an ongoing basis as necessary to make an accurate determination of such insured losses4 7,e7 ,experts 7i7 ,authority ,the agreement pursuant to subparagraph 7,a7 shall provide that1 in establishing proposed trigger amounts under this paragraph and assessing insured losses pursuant to subparagraph 7,d71 the ,academy may contract with such experts and consultants1 including experts in disaster modeling1 as it considers appropriate4 7ii7 ,authorization of appropriations ,there is authorized to be appropriated to the ,national ,academy of ,sciences such sums as may be necessary for costs of hiring experts and consultants pursuant to clause 7i74 7#c7 ,authority to issue bonds to fund ,federal payments 7,a7 ,issuance ,in connection with a covered event for which the ,secretary is required to make a payment under paragraph 7#a7 to a participating ,state1 the ,secretary shall issue bonds under this paragraph1 the proceeds of which shall be used for making such payment4 7,b7 ,terms ,bonds issued under this paragraph shall be in such form and denominations1 and shall be subject to such terms and conditions of issue1 conversion1 redemption1 maturation1 and payment as the ,secretary may prescribe and shall be fully and unconditionally guaranteed both as to interest and principal by the ,united ,states1 and such guaranty shall be expressed on the face of each bond4 7,c7 ,interest ,bonds issued under this paragraph shall bear interest at a rate not less than the current average yield on outstanding market obligations of the ,united ,states of comparable maturity during the month preceding the issuance of the obligation as determined by the ,secretary4 7,d7 ,amount ,the aggregate amount of bonds issued under this paragraph in connection with a covered event shall be equal to the aggregate amount of payments made by the ,secretary pursuant to paragraph 7#a7 in connection with such covered event and such additional amount as the ,secretary considers appropriate to cover any administrative costs incurred by the ,state in connection with borrowing under this paragraph in connection with such covered event4 7,e7 ,treatment ,all bonds issued under this paragraph1 and the interest on or credits with respect to such obligations1 shall not be subject to taxation by any ,state1 county1 municipality1 or local taxing authority4 7#d7 ,recoupment of ,federal amounts ,each participating ,state that receives a payment pursuant to paragraph 7#a7 shall repay the ,secretary1 pursuant to its pledge made in accordance with subsection 7a77#d77;,d7 and within #aj years of such receipt1 an amount equal to such payment1 together with interest on such amount sufficient to cover the costs to the ,secretary of borrowing such amounts pursuant to this paragraph4 ,the ,secretary shall cover any amounts repaid pursuant to this paragraph into the general fund of the ,treasury4 #c4 ,reporting 7a7 ,by ,states 7#a7 ,annual reports ,the ,secretary shall require the ,state insurance regulator for each participating ,state to submit a report annually to the ,secretary regarding each covered event resulting in payment under section #b7;b77#a71 during the period that any payment amounts for such event have not been fully repaid in accordance with section #b7;b77#d71 regarding insured losses in the ,state resulting from such covered event1 additional such insured losses expected to be incurred1 including the timing of such losses1 and any progress in repayment to the ,secretary for the ,federal payments made4 7#b7 ,final report ,the ,secretary shall require the ,state insurance regulator for each participating ,state receiving a payment under section #b7;b77#a7 in connection with a covered event to submit to the ,secretary1 upon full repayment of all such payments made in connection with such covered event1 a final report containing such information as the ,secretary shall require4 #d4 ,general authority 7a7 ,general authority ,the ,secretary shall have the powers and authorities necessary to carry out the ,program1 including authority-- 7#a7 to investigate and audit all claims for a covered event in a ,state for which payments have been made by the ,secretary under the ,program2 and 7#b7 to prescribe regulations and procedures to effectively administer and implement the ,program4 7b7 ,consultation ,the ,secretary shall consult with the ,national ,association of ,insurance ,commissioners1 as the ,secretary determines appropriate1 concerning the ,program4 7c7 ,contracts for services ,the ,secretary may employ persons or contract for services as may be necessary to implement the ,program4 7d7 ,submission of premium information 7#a7 ,in general ,the ,secretary shall annually compile information on the premium rates of insurers for covered insurance for the preceding year4 7#b7 ,access to information ,to the extent that such information is not otherwise available to the ,secretary1 the ,secretary may require each insurer to submit to the ,national ,association of ,insurance ,commissioners premium rates for covered insurance1 as necessary to carry out paragraph 7#a71 and the ,national ,association of ,insurance ,commissioners shall make such information available to the ,secretary4 7#c7 ,availability to ,congress ,the ,secretary shall make information compiled under this subsection available to the ,congress1 upon request4 7e7 ,administrative expenses ,there are hereby appropriated1 out of funds in the ,treasury not otherwise appropriated1 such sums as may be necessary to pay reasonable costs of administering the ,program4 #e4 ,definitions ,in this ,act1 the following definitions shall apply3 7#a7 ,affiliate ,the term affiliate means1 with respect to a participating insurer1 any entity that controls1 is controlled by1 or is under common control with the insurer4 7#b7 ,control 7,a7 ,in general ,an entity has control over another entity1 if-- 7i7 the entity directly or indirectly or acting through #a or more other persons owns1 controls1 or has power to vote #be percent or more of any class of voting securities of the other entity2 7ii7 the entity controls in any manner the election of a majority of the directors or trustees of the other entity2 or 7iii7 the ,secretary determines1 after notice and opportunity for hearing1 that the entity directly or indirectly exercises a controlling influence over the management or policies of the other entity4 7,b7 ,rule of construction ,an entity1 including any affiliate thereof1 does not have control over another entity1 if1 as of ,january #a1 #bjbc1 the entity is acting as an attorney-in-fact1 as defined by the ,secretary1 for the other entity and such other entity is a reciprocal insurer1 provided that the entity is not1 for reasons other than the attorney-in-fact relationship1 defined as having control under subparagraph 7,a74 7#c7 ,covered event 7,a7 ,in general ,the term covered event means volcanic eruption1 severe storm1 tropical storm1 hurricane1 earthquake1 tsunami1 fire1 tornado1 hail1 or any other natural disaster not eligible for coverage under the ,national ,flood ,insurance ,program under the ,national ,flood ,insurance ,act of #aifh 7#db ,u4,s4,c4 #djja et seq471 that is certified by the ,secretary as a covered event for purposes of this ,act4 7,b7 ,nondelegation ,the ,secretary may not delegate or designate to any other officer1 employee1 or person1 any certification under subparagraph 7,a7 of whether1 during the effective period of the ,program1 a covered event occurs4 7#d7 ,covered insurance ,the term covered insurance means property and casualty insurance coverage for a single-family or multifamily residence1 including homeowners insurance1 condominium insurance1 cooperative insurance1 and residential rental insurance4 ,such term does not include private mortgage insurance 7as such term is defined in section #b of the ,homeowners ,protection ,act of #aiih 7#ab ,u4,s4,c4 #dija77 or title insurance4 7#e7 ,insured loss 7,a7 ,in general ,the term insured loss means any loss that-- 7i7 results from a covered event2 7ii7 is covered by covered insurance issued by an insurer1 regardless of whether the insurer is solvent2 and 7iii7 occurs within a ,state4 7,b7 ,included amounts ,such term includes the costs of claims investigation1 adjustment1 litigation1 and all other usual costs paid by the insurer in connection with coverage for covered event4 7#f7 ,insurer ,the term insurer means any entity1 including any affiliate thereof-- 7,a7 that is-- 7i7 licensed or admitted to engage in the business of providing primary or excess insurance in any ,state2 7ii7 not licensed or admitted as described in clause 7i71 if it is an eligible surplus line carrier listed on the ,quarterly ,listing of ,alien ,insurers of the ,national ,association of ,insurance ,commissioners1 or any successor thereto2 7iii7 approved for the purpose of offering property and casualty insurance by a ,federal agency in connection with maritime1 energy1 or aviation activity2 or 7iv7 a ,state residual market insurance entity2 7,b7 that receives direct earned premiums for covered insurance coverage2 and 7,c7 that meets any other criteria that the ,secretary may reasonably prescribe4 7#g7 ,participating ,state ,the term participating ,state means a ,state that has elected pursuant to section #b7;a77#c7 to participate in the ,program and has not terminated such participation4 7#h7 ,person ,the term person means any individual1 business or nonprofit entity 7including those organized in the form of a partnership1 limited liability company1 corporation1 or association71 trust or estate1 or a ,state or political subdivision of a ,state or other governmental unit4 7#i7 ,program ,the term ,program means the ,natural ,disaster ,risk ,reinsurance ,program established by this ,act4 7#aj7 ,secretary ,the term ,secretary means the ,secretary of the ,treasury4 7#aa7 ,state ,the term ,state means any ,state of the ,united ,states1 the ,district of ,columbia1 the ,commonwealth of ,puerto ,rico1 the ,commonwealth of the ,northern ,mariana ,islands1 ,american ,samoa1 ,guam1 the ,united ,states ,virgin ,islands1 and any other territory or possession of the ,united ,states4 7#ab7 ,state insurance regulator ,the term ,state insurance regulator means1 with respect to a ,state1 the regulatory authority responsible for the supervision of insurers4 7#ac7 ,rule of construction for dates ,with respect to any reference to a date in this ,act1 such day shall be construed-- 7,a7 to begin at #ab3ja a4m4 on that date2 and 7,b7 to end at midnight on that date4