,i  #aag? ,,congress  #b;d ,session  ,h4
 ,r4 #gfdc  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,may #c1 #bjbb,mr4    
,cri/ introduc$ ! foll[+ bill2 :i* 0    
ref]r$ to ! ,committee on ,f9ancial     
,s]vices  ,a ,,bill  ,to e/abli% a      
,natural ,disa/] ,risk ,re9surance      
,program1 & = o!r purposes4  #a4 ,%ort  
title ,?is ,act may be cit$ z ! ,fuel+  
,af=dable ,insurance = ,today's         
,home[n]s ,act ( #bjbb or ! ,,fai? ,act 
( #bjbb4  #b4 ,natural ,disa/] ,risk    
,re9surance ,program  7a7 ,e/abli%m5t ( 
program  7#a7 ,9 g5]al ,!re is e/abli%$ 
9 ! ,dep>tm5t ( ! ,treasury ! ,natural  
,disa/] ,risk ,re9surance ,program1 :i* 
%all apply only to cov]$ ev5ts occurr+  
on or aft] ,janu>y #a1 #bjbc4  7#b7     
,goal ,! goal ( ! ,program %all be to   
protect insur]s f insolv5cy result+ f   
cov]$ ev5ts ( a significant magnitude 9 
a mann] t provides = af=dability (      
cov]age 9 ! m>ketplace = losses f su*   
cov]$ ev5ts4  7#c7 ,au?ority ( ,secret>y
 ,not)/&+ any o!r provision ( ,/ate or  

,f$]al law1 ! ,secret>y %all adm9i/] !  
,program1 9 consultation ) ! ,director (
 ! ,f$]al ,insurance ,(fice1 & %all make
 paym5ts to ,/ates 9 accordance )       
subsection 7b7 to cov] insur$ losses4   
7#d7 ,volunt>y p>ticipation  7,a7 ,9    
g5]al ,p>ticipation 9 ! ,program %all be
 volunt>y on ! "p ( a ,/ate1 subject to 
! requirem5ts "u p>agraph 7#d74  7,b7   
,election ,! ,secret>y %all provide a   
proc$ure by :i* ,/ates may elect to     
p>ticipate 9 ! ,program4  7,c7          
,t]m9ation ( p>ticipation ,! ,secret>y  
%all provide a proc$ure by :i* ,/ates   
may elect to t]m9ate p>ticipation 9 !   
,program1 :i* %all require advance      
notice to ! ,secret>y ( n less ?an #ahj 
days be=e su* t]m9ation is effective4   
7#e7 ,requir$ ,/ate plan ,to be eligible
 to p>ticipate 9 ! ,program a ,/ate %all
 h 9 effect a plan1 approv$ by !        
,secret>y1 t provides su* assurances to 
! ,secret>y z ! ,secret>y consid]s      
necess>y-- 7,a7 to ensure t insur]s w   
cov] claims = insur$ losses occurr+ 9 ! 

,/ate dur+ ! p>ticipation ( ! ,/ate 9 ! 
,program n exce$+ ! trigg] am\nt = !    
,/ate "u subsection 7b77#b72  7,b7 to   
ensure t insur]s submit to ! ,/ate      
insurance regulator & ! ,/ate insurance 
regulator submits to ! ,secret>y1 9     
accordance ) su* reasonable proc$ures z 
! ,secret>y may e/abli%1 in=mation      
suffici5t = adm9i/ration ( ! ,program1  
includ+ in=mation reg>d+ claims = insur$
 losses occurr+ 9 ! ,/ate1 insur$ losses
 incurr$1 & direct writt5 premium =     
cov]$ insurance 9 ! ,/ate2  7,c7 to     
di/ribute ,f$]al paym5ts "u ! ,program  
appropriately among insur]s bas$ on     
insur$ losses suff]$ by insur]s &       
insur]s' m>ket %>es2  7,d7 to pl$ge !   
,/ate's full fai? & cr$it t[>d full     
repaym5t to ! ,secret>y1 )9 #aj ye>s (  
receipt1 ( any ,f$]al paym5t am\nts     
provid$ "u subsection 7b7 & to provide a
 regul> paym5t s*$ule ov] su* #aj-ye>   
p]iod2 &  7,e7 to provide appropriate   
treatm5t "u ! program = any insur] t is 
a ,/ate residual m>ket insurance entity4

  7#f7 ,treatm5t ( exi/+ policies ,?is  
,act may n be con/ru$ to affect any     
policy = cov]$ insurance 9 =ce on ! date
 ( ! comm5cem5t ( p>ticipation 9 !      
,program by ! ,/ate 9 :i* ! dwell+ cov]$
 by su* insurance is locat$1 b !        
,program %all apply to policies r5ew$   
aft] su* date4  7b7 ,f$]al paym5ts =    
excessive insur$ losses  7#a7 ,f$]al    
paym5t ,pursuant to ! occurr5ce ( a     
cov]$ ev5t1 ! ,secret>y %all pay to ea* 
p>ticipat+ ,/ate an am\nt equal to !    
am\nt by :i* ! aggregate indu/ry-wide   
insur$ losses )9 su* p>ticipat+ ,/ate   
result+ f su* cov]$ ev5t exce$ ! trigg] 
am\nt 9 effect at su* "t "u p>agraph    
7#b7 = su* p>ticipat+ ,/ate = ! type (  
cov]$ ev5t t occurr$4 ,! ,secret>y %all 
provide = paym5ts "u ?is subsection = a 
p>ticipat+ ,/ate = a cov]$ ev5t to be   
made 9 in/allm5ts ( approximately #be   
p]c5t ( ! e/imat$ total am\nt to be     
provid$ = su* ,/ate 9 connection ) su*  
disa/]1 z be/ det]m9$ by ! ,secret>y    
aft] consid]ation ( ! in=mation reg>d+  

insur$ losses provid$ to ! ,secret>y    
pursuant to p>agraph 7#b77;,d74  7#b7   
,/ate trigg] am\nts  7,a7 ,,nas au?ority
 ,! ,secret>y %all ent] into an agreem5t
 ) ! ,national ,academy ( ,sci5ces 79   
?is p>agraph ref]r$ to z ! ,academy7 "u 
:i* ! ,academy %all propose to !        
,secret>y1 = ea* p>ticipat+ ,/ate & =   
ea* diff]5t type ( cov]$ ev5t1 a trigg] 
am\nt "u ?is p>agraph4 ,a trigg] am\nt  
propos$ = a ,/ate %all be effective =   
purposes ( ! ,program only ^u review1   
adju/m5t if necess>y1 & approval by !   
,secret>y4  7,b7 ,consid]ations ,!      
trigg] am\nt propos$ by ! ,academy = a  
p>ticipat+ ,/ate = a type ( cov]$ ev5t  
%all be ! less] (-- 7i7 ! total direct  
writt5 premiums = cov]$ insurance 9 !   
p>ticipat+ ,/ate2 &  7ii7 ! am\nt1 z    
det]m9$ by ! ,academy1 t :5 appli$ "u ! 
,program1 protects insur]s f insolv5cy 9
 ! case ( cov]$ ev5t ( su* type ( a     
sev]ity equal to or exce$+ t ( a cov]$  
ev5t ( su* type hav+ a two p]c5t *ance (
 occurr+ 9 any giv5 ye>4  7,c7 ,revision

 ,! agreem5t pursuant to subp>agraph    
7,a7 %all provide = ! ,academy to review
 & revise ! propos$ trigg] am\nts = ea* 
p>ticipat+ ,/ate n less frequ5tly ?an   
once e #bd mon?s1 & m frequ5tly at !    
reque/ ( ! ,secret>y4 ,any revis$ trigg]
 am\nt may n take effect "u ! ,program  
be=e ! expiration ( ! #ahj-;day p]iod   
beg9n+ ^u ! provision by ! ,secret>y to 
su* p>ticipat+ ,/ate ( writt5           
notification ( su* revis$ trigg] am\nt4 
7,d7 ,assessm5t ( insur$ losses ,!      
agreem5t pursuant to subp>agraph 7,a7   
%all provide t foll[+ ! occurr5ce ( a   
cov]$ ev5t1 ! ,academy %all1 = ea*      
p>ticipat+ ,/ate affect$1 make          
assessm5ts ( ! insur$ losses = ea* su*  
,/ate & provide su* in=mation to !      
,secret>y4 ,su* assessm5ts %all be made 
on an ongo+ basis z necess>y to make an 
accurate det]m9ation ( su* insur$       
losses4  7,e7 ,exp]ts  7i7 ,au?ority ,! 
agreem5t pursuant to subp>agraph 7,a7   
%all provide t1 9 e/abli%+ propos$      
trigg] am\nts "u ?is p>agraph & assess+ 

insur$ losses pursuant to subp>agraph   
7,d71 ! ,academy may contract ) su*     
exp]ts & consultants1 includ+ exp]ts 9  
disa/] model+1 z x consid]s appropriate4
  7ii7 ,au?orization ( appropriations   
,!re is au?oriz$ to be appropriat$ to ! 
,national ,academy ( ,sci5ces su* sums z
 may be necess>y = co/s ( hir+ exp]ts & 
consultants pursuant to clause 7i74     
7#c7 ,au?ority to issue bonds to fund   
,f$]al paym5ts  7,a7 ,issuance ,9       
connection ) a cov]$ ev5t = :i* !       
,secret>y is requir$ to make a paym5t "u
 p>agraph 7#a7 to a p>ticipat+ ,/ate1 ! 
,secret>y %all issue bonds "u ?is       
p>agraph1 ! proce$s ( :i* %all be us$ = 
mak+ su* paym5t4  7,b7 ,t]ms ,bonds     
issu$ "u ?is p>agraph %all be 9 su* =m &
 d5om9ations1 & %all be subject to su*  
t]ms & conditions ( issue1 conv]sion1   
r$emption1 maturation1 & paym5t z !     
,secret>y may prescribe & %all be fully 
& unconditionally gu>ante$ bo? z to     
int]e/ & pr9cipal by ! ,unit$ ,/ates1 & 
su* gu>anty %all be express$ on ! face (

 ea* bond4  7,c7 ,int]e/ ,bonds issu$ "u
 ?is p>agraph %all be> int]e/ at a rate 
n less ?an ! curr5t av]age yield on     
out/&+ m>ket obligations ( ! ,unit$     
,/ates ( comp>able maturity dur+ ! mon? 
prec$+ ! issuance ( ! obligation z      
det]m9$ by ! ,secret>y4  7,d7 ,am\nt ,! 
aggregate am\nt ( bonds issu$ "u ?is    
p>agraph 9 connection ) a cov]$ ev5t    
%all be equal to ! aggregate am\nt (    
paym5ts made by ! ,secret>y pursuant to 
p>agraph 7#a7 9 connection ) su* cov]$  
ev5t & su* additional am\nt z !         
,secret>y consid]s appropriate to cov]  
any adm9i/rative co/s incurr$ by ! ,/ate
 9 connection ) borr[+ "u ?is p>agraph 9
 connection ) su* cov]$ ev5t4  7,e7     
,treatm5t ,all bonds issu$ "u ?is       
p>agraph1 & ! int]e/ on or cr$its )     
respect to su* obligations1 %all n be   
subject to taxation by any ,/ate1 c\nty1
 municipality1 or local tax+ au?ority4  
7#d7 ,rec\pm5t ( ,f$]al am\nts ,ea*     
p>ticipat+ ,/ate t receives a paym5t    
pursuant to p>agraph 7#a7 %all repay !  

,secret>y1 pursuant to its pl$ge made 9 
accordance ) subsection 7a77#d77;,d7 &  
)9 #aj ye>s ( su* receipt1 an am\nt     
equal to su* paym5t1 toge!r ) int]e/ on 
su* am\nt suffici5t to cov] ! co/s to ! 
,secret>y ( borr[+ su* am\nts pursuant  
to ?is p>agraph4 ,! ,secret>y %all cov] 
any am\nts repaid pursuant to ?is       
p>agraph into ! g5]al fund ( !          
,treasury4  #c4 ,report+  7a7 ,by ,/ates
  7#a7 ,annual reports ,! ,secret>y %all
 require ! ,/ate insurance regulator =  
ea* p>ticipat+ ,/ate to submit a report 
annually to ! ,secret>y reg>d+ ea* cov]$
 ev5t result+ 9 paym5t "u section       
#b7;b77#a71 dur+ ! p]iod t any paym5t   
am\nts = su* ev5t h n be5 fully repaid 9
 accordance ) section #b7;b77#d71 reg>d+
 insur$ losses 9 ! ,/ate result+ f su*  
cov]$ ev5t1 additional su* insur$ losses
 expect$ to be incurr$1 includ+ ! tim+ (
 su* losses1 & any progress 9 repaym5t  
to ! ,secret>y = ! ,f$]al paym5ts made4 
7#b7 ,f9al report ,! ,secret>y %all     
require ! ,/ate insurance regulator =   

ea* p>ticipat+ ,/ate receiv+ a paym5t "u
 section #b7;b77#a7 9 connection ) a    
cov]$ ev5t to submit to ! ,secret>y1 ^u 
full repaym5t ( all su* paym5ts made 9  
connection ) su* cov]$ ev5t1 a f9al     
report conta9+ su* in=mation z !        
,secret>y %all require4  #d4 ,g5]al     
au?ority  7a7 ,g5]al au?ority ,!        
,secret>y %all h ! p[]s & au?orities    
necess>y to c>ry out ! ,program1 includ+
 au?ority-- 7#a7 to inve/igate & audit  
all claims = a cov]$ ev5t 9 a ,/ate =   
:i* paym5ts h be5 made by ! ,secret>y "u
 ! ,program2 &  7#b7 to prescribe       
regulations & proc$ures to effectively  
adm9i/] & implem5t ! ,program4  7b7     
,consultation ,! ,secret>y %all consult 
) ! ,national ,association ( ,insurance 
,commission]s1 z ! ,secret>y det]m9es   
appropriate1 conc]n+ ! ,program4  7c7   
,contracts = s]vices ,! ,secret>y may   
employ p]sons or contract = s]vices z   
may be necess>y to implem5t ! ,program4 
7d7 ,submission ( premium in=mation     
7#a7 ,9 g5]al ,! ,secret>y %all annually

 compile in=mation on ! premium rates ( 
insur]s = cov]$ insurance = ! prec$+    
ye>4  7#b7 ,access to in=mation ,to !   
ext5t t su* in=mation is n o!rwise      
available to ! ,secret>y1 ! ,secret>y   
may require ea* insur] to submit to !   
,national ,association ( ,insurance     
,commission]s premium rates = cov]$     
insurance1 z necess>y to c>ry out       
p>agraph 7#a71 & ! ,national            
,association ( ,insurance ,commission]s 
%all make su* in=mation available to !  
,secret>y4  7#c7 ,availability to       
,congress ,! ,secret>y %all make        
in=mation compil$ "u ?is subsection     
available to ! ,congress1 ^u reque/4    
7e7 ,adm9i/rative exp5ses ,!re are h]eby
 appropriat$1 out ( funds 9 ! ,treasury 
n o!rwise appropriat$1 su* sums z may be
 necess>y to pay reasonable co/s (      
adm9i/]+ ! ,program4  #e4 ,def9itions ,9
 ?is ,act1 ! foll[+ def9itions %all     
apply3 7#a7 ,affiliate ,! t]m affiliate 
means1 ) respect to a p>ticipat+ insur]1
 any entity t controls1 is controll$ by1

 or is "u common control ) ! insur]4    
7#b7 ,control  7,a7 ,9 g5]al ,an entity 
has control ov] ano!r entity1 if-- 7i7 !
 entity directly or indirectly or act+  
?r\gh #a or m o!r p]sons owns1 controls1
 or has p[] to vote #be p]c5t or m ( any
 class ( vot+ securities ( ! o!r entity2
  7ii7 ! entity controls 9 any mann] !  
election ( a majority ( ! directors or  
tru/ees ( ! o!r entity2 or  7iii7 !     
,secret>y det]m9es1 aft] notice &       
opportunity = he>+1 t ! entity directly 
or indirectly ex]cises a controll+      
influ5ce ov] ! managem5t or policies ( !
 o!r entity4  7,b7 ,rule ( con/ruction  
,an entity1 includ+ any affiliate !re(1 
does n h control ov] ano!r entity1 if1 z
 ( ,janu>y #a1 #bjbc1 ! entity is act+ z
 an attorney-9-fact1 z def9$ by !       
,secret>y1 = ! o!r entity & su* o!r     
entity is a reciprocal insur]1 provid$ t
 ! entity is n1 = reasons o!r ?an !     
attorney-9-fact relation%ip1 def9$ z    
hav+ control "u subp>agraph 7,a74  7#c7 
,cov]$ ev5t  7,a7 ,9 g5]al ,! t]m cov]$ 

ev5t means volcanic eruption1 sev]e     
/orm1 tropical /orm1 hurricane1         
e>?quake1 tsunami1 fire1 tornado1 hail1 
or any o!r natural disa/] n eligible =  
cov]age "u ! ,national ,flood ,insurance
 ,program "u ! ,national ,flood         
,insurance ,act ( #aifh 7#db ,u4,s4,c4  
#djja et seq471 t is c]tifi$ by !       
,secret>y z a cov]$ ev5t = purposes (   
?is ,act4  7,b7 ,nondelegation ,!       
,secret>y may n delegate or designate to
 any o!r (fic]1 employee1 or p]son1 any 
c]tification "u subp>agraph 7,a7 ( :e!r1
 dur+ ! effective p]iod ( ! ,program1 a 
cov]$ ev5t occurs4  7#d7 ,cov]$         
insurance ,! t]m cov]$ insurance means  
prop]ty & casualty insurance cov]age = a
 s+le-family or multifamily resid5ce1   
includ+ home[n]s insurance1 condom9ium  
insurance1 coop]ative insurance1 &      
resid5tial r5tal insurance4 ,su* t]m    
does n include private mortgage         
insurance 7z su* t]m is def9$ 9 section 
#b ( ! ,home[n]s ,protection ,act (     
#aiih 7#ab ,u4,s4,c4 #dija77 or title   

insurance4  7#e7 ,insur$ loss  7,a7 ,9  
g5]al ,! t]m insur$ loss means any loss 
t-- 7i7 results f a cov]$ ev5t2  7ii7 is
 cov]$ by cov]$ insurance issu$ by an   
insur]1 reg>dless ( :e!r ! insur] is    
solv5t2 &  7iii7 occurs )9 a ,/ate4     
7,b7 ,includ$ am\nts ,su* t]m includes !
 co/s ( claims inve/igation1 adju/m5t1  
litigation1 & all o!r usual co/s paid by
 ! insur] 9 connection ) cov]age = cov]$
 ev5t4  7#f7 ,insur] ,! t]m insur] means
 any entity1 includ+ any affiliate      
!re(-- 7,a7 t is-- 7i7 lic5s$ or admitt$
 to engage 9 ! bus9ess ( provid+ prim>y 
or excess insurance 9 any ,/ate2  7ii7 n
 lic5s$ or admitt$ z describ$ 9 clause  
7i71 if x is an eligible surplus l9e    
c>ri] li/$ on ! ,qu>t]ly ,li/+ ( ,ali5  
,insur]s ( ! ,national ,association (   
,insurance ,commission]s1 or any        
successor !reto2  7iii7 approv$ = !     
purpose ( (f]+ prop]ty & casualty       
insurance by a ,f$]al ag5cy 9 connection
 ) m>itime1 en]gy1 or aviation activity2
 or  7iv7 a ,/ate residual m>ket        

insurance entity2  7,b7 t receives      
direct e>n$ premiums = cov]$ insurance  
cov]age2 &  7,c7 t meets any o!r crit]ia
 t ! ,secret>y may reasonably prescribe4
  7#g7 ,p>ticipat+ ,/ate ,! t]m         
p>ticipat+ ,/ate means a ,/ate t has    
elect$ pursuant to section #b7;a77#c7 to
 p>ticipate 9 ! ,program & has n t]m9at$
 su* p>ticipation4  7#h7 ,p]son ,! t]m  
p]son means any individual1 bus9ess or  
nonpr(it entity 7includ+ ^? organiz$ 9 !
 =m ( a p>tn]%ip1 limit$ liability      
company1 corporation1 or association71  
tru/ or e/ate1 or a ,/ate or political  
subdivision ( a ,/ate or o!r gov]nm5tal 
unit4  7#i7 ,program ,! t]m ,program    
means ! ,natural ,disa/] ,risk          
,re9surance ,program e/abli%$ by ?is    
,act4  7#aj7 ,secret>y ,! t]m ,secret>y 
means ! ,secret>y ( ! ,treasury4  7#aa7 
,/ate ,! t]m ,/ate means any ,/ate ( !  
,unit$ ,/ates1 ! ,di/rict ( ,columbia1 !
 ,commonweal? ( ,pu]to ,rico1 !         
,commonweal? ( ! ,nor!rn ,m>iana ,isl&s1
 ,am]ican ,samoa1 ,guam1 ! ,unit$ ,/ates

 ,virg9 ,isl&s1 & any o!r t]ritory or   
possession ( ! ,unit$ ,/ates4  7#ab7    
,/ate insurance regulator ,! t]m ,/ate  
insurance regulator means1 ) respect to 
a ,/ate1 ! regulatory au?ority          
responsible = ! sup]vision ( insur]s4   
7#ac7 ,rule ( con/ruction = dates ,)    
respect to any ref]5ce to a date 9 ?is  
,act1 su* day %all be con/ru$-- 7,a7 to 
beg9 at #ab3ja a4m4 on t date2 &  7,b7  
to end at midnight on t date4