,i #aaith ,,congress #b;d ,session ,h4 ,r4 #ajfhf ,,in ,,the ,,house ,,of ,,representatives ,october #a1 #bjbf,mr4 ,min 7for himself1 ,mr4 ,olszewski1 ,mr4 ,bera1 ,ms4 ,bonamici1 ,mr4 ,case1 ,ms4 ,castor of ,florida1 ,mr4 ,cisneros1 ,mr4 ,cohen1 ,ms4 ,dexter1 ,mr4 ,kennedy of ,new ,york1 ,mr4 ,levin1 ,mr4 ,mullin1 ,ms4 ,ross1 ,ms4 ,salinas1 and ,mr4 ,thanedar7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,a ,,bill ,to direct the ,secretary of ,homeland ,security1 acting through the ,administrator of the ,federal ,emergency ,management ,agency1 to establish a pilot program to award grants to covered entities to support the design1 development1 facilitation1 or implementation of community-based catastrophe insurance4 #a4 ,short title ,this ,act may be cited as the ,community ,disaster ,protection ,act4 #b4 ,community-based catastrophe insurance pilot program 7a7 ,in general ,not later than #a year after the date of enactment of this ,act1 the ,secretary1 acting through the ,administrator1 shall establish a pilot program to award grants to covered entities for the design1 development1 or implementation of community-based catastrophe insurance programs to-- 7#a7 facilitate or offer community-based catastrophe insurance for properties with high financial exposure to losses from natural hazards or disasters1 where such losses-- 7,a7 are not covered under traditional property insurance products offered on public or private markets and available to members of the community2 or 7,b7 present material and growing risks to existing property insurance carriers or other members of the insurance or risk transfer community2 7#b7 help stabilize the traditional private property insurance market through innovative risk transfer approaches2 and 7#c7 promote or incentivize community-wide or individual measures to reduce potential losses from1 or increase resilience to1 natural hazards or disasters covered by such program4 7b7 ,eligible uses of funds ,a covered entity receiving a grant under this section may use such funds to carry out #a or more of the following activities in furtherance of a community-based catastrophe insurance program pursuant to subsection 7a73 7#a7 ,conducting consumer research1 including assessments of the financial exposure of households to natural hazards or disasters1 anticipated or potential household recovery needs1 insurance literacy1 property insurance coverage gaps1 affordability constraints1 and preferred insurance delivery channels4 7#b7 ,conducting consumer outreach1 education1 and enrollment activities targeted to community members1 including through community-based organizations1 local governments1 housing providers1 insurers or reinsurers1 insurance or reinsurance producers1 financial institutions1 or other entities4 7#c7 ,utilizing or configuring catastrophe risk models1 hazard assessments1 exposure data1 or other analytical tools to better understand or help identify the magnitude1 nature1 or geographic scope of natural hazard or disaster risks in the community4 7#d7 ,designing and evaluating program features1 including with respect to parametric programs-- 7,a7 evaluating1 testing1 and validating parametric triggers based on objective1 independently verifiable hazard data1 including meteorological1 hydrological1 geological1 or other available data sources2 or 7,b7 evaluating and reducing basis risk1 including through an analysis of the correlation between proposed parametric triggers and expected recovery costs and losses4 7#e7 ,developing regulatory1 actuarial1 and operational frameworks or modifications necessary for the approval1 administration1 and oversight of community-based catastrophe insurance products4 7#f7 ,establishing systems for delivery of insurance claims or benefit payments within a reasonable period following a triggering event4 7#g7 ,conducting program evaluation and collecting data on participation rates1 payout timeliness1 recovery outcomes1 consumer satisfaction1 and cost-effectiveness with respect to the program4 7#h7 ,securing non-,federal financial support for a community-based catastrophe insurance program1 including-- 7,a7 identifying1 evaluating1 soliciting1 or negotiating potential sources of non-,federal premium assistance or risk capital1 including ,state and local appropriations1 philanthropic contributions1 community development financial institutions1 insurance-linked securities1 or other sources2 7,b7 establishing and administering accounts1 trusts1 or other vehicles necessary to receive1 hold1 and disburse non-,federal funds for the payment of premiums or the provision of risk capital2 7,c7 designing premium assistance mechanisms to be funded with non-,federal sources1 including eligibility criteria and contribution structures2 and 7,d7 developing plans for the long-term financial sustainability of the program1 including identification of sources of premium assistance and risk capital following the conclusion of the pilot program4 7#i7 ,entering into partnerships with #a or more entities identified in subsection 7d74 7c7 ,program features 7#a7 ,policy requirements ,a community-based catastrophe insurance product designed1 developed1 facilitated1 or implemented with funds awarded under this section shall-- 7,a7 supplement traditional property insurance products on existing public or private markets and not be designed to replace or displace available private market insurance coverage2 7,b7 limit coverage to losses attributable to specified natural hazards or disasters that present high financial risk to the community or the stability of the private property insurance market pursuant to subsection 7a77#a72 7,c7 to the extent possible1 provide clear and conspicuous consumer disclosures1 in plain language and in the languages commonly used in the community1 before enrollment and upon each renewal1 regarding-- 7i7 the perils covered1 the perils excluded1 and any coverage limits1 deductibles1 or waiting periods applicable to the product2 7ii7 the manner in which coverage under the product interacts with traditional property insurance products held by the participant1 including whether recovery under the product affects any claim1 premium1 or renewal under such products2 7iii7 the effect1 if any1 that receipt of a payout under the product may have on eligibility for1 or the amount of1 ,federal1 ,state1 or local disaster assistance1 including assistance subject to section #cab of the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act 7#db ,u4,s4,c4 #eaee72 7iv7 whether the product satisfies any ,federal or ,state requirement to obtain and maintain insurance1 including any requirement under section #caa of such ,act 7#db ,u4,s4,c4 #eaed7 or under the ,flood ,disaster ,protection ,act of #aigc 7#db ,u4,s4,c4 #djjb et seq472 7v7 the identity of the entity bearing the risk of loss1 any financial strength rating of such entity1 and whether obligations under the product are covered by any ,state insurance guaranty association or similar mechanism2 7vi7 the amount of the premium1 the portion of the premium paid by any party other than the participant1 the expected duration of any such assistance1 and the effect on the participant if such assistance is reduced or discontinued2 7vii7 the term of coverage1 the conditions under which coverage may be cancelled1 nonrenewed1 or terminated1 and the effect on participants if the community-based catastrophe insurance program is discontinued2 7viii7 whether participation is voluntary and the process by which a member of the community may decline or withdraw from participation2 7ix7 the process for submitting questions1 claims1 and complaints1 including contact information for the applicable ,state insurance regulator2 and 7x7 any other disclosure applicable under ,state law or regulatory requirements2 7,d7 ensure any premiums are actuarially sound1 transparent1 and designed to support program sustainability while promoting broad participation2 7,e7 promote or incentivize community-wide or individual measures to reduce potential losses from1 or increase resilience to1 natural hazards or disasters covered by such product1 including through1 to the extent possible-- 7i7 reinvestment of any excess funds of the community-based catastrophe insurance program to mitigate natural hazard or disaster risks covered under the product2 or 7ii7 disclosure of community-wide or individual measures that may reduce the risk of losses covered under the product2 7,f7 provide for streamlined enrollment and claims disbursement processes to the extent practicable2 7,g7 in instances where such a program is a parametric program pursuant to paragraph 7#c77;,b7-- 7i7 utilize an objective and predetermined trigger condition or conditions for payout of benefits1 and provide for distribution of benefits in a timely manner after verification that such condition or conditions have been met2 7ii7 include a strategy to minimize basis risk and regularly evaluate trigger performance2 and 7iii7 in addition to the disclosures required under subparagraph 7,c71 provide clear consumer disclosures regarding the differences between indemnity insurance and parametric products1 trigger conditions1 payout amounts and limitations1 potential effects of payouts on other ,federal assistance1 potential basis risk1 and other relevant details2 and 7,h7 comply with all applicable ,state insurance laws and regulatory requirements1 including any applicable licensing1 form filing1 rate filing1 and market conduct requirements1 and in furtherance of such compliance-- 7i7 prior to offering the product1 seek from the insurance regulator of each ,state in which the product will be offered a determination or written confirmation as to whether the product constitutes insurance under the laws of such ,state and1 if so1 the licensing and filing requirements applicable to the product and to the covered entity2 7ii7 place coverage with an insurer authorized or eligible to transact such business in each such ,state1 or with a risk-bearing entity established and operating in accordance with the laws of such ,state2 7iii7 ensure that any sale1 solicitation1 negotiation1 or enrollment activity conducted by the covered entity1 or by any partner of the covered entity1 is performed by persons licensed as insurance producers under applicable ,state law or pursuant to an exemption available under such law2 and 7iv7 provide the insurance regulator of each such ,state with notice of the program prior to implementation and with reasonable access to program data for regulatory and oversight purposes4 7#b7 ,program requirements ,a covered entity administering a community-based catastrophe insurance program designed1 developed1 or implemented with funds awarded under this section shall-- 7,a7 to the extent feasible1 facilitate or provide access to financial incentives1 technical assistance1 or guidance to members of the community to promote investments1 best practices1 or other actions to reduce potential losses from1 or increase resilience to1 natural hazards or disasters risks covered by such program2 7,b7 assess and communicate1 publicly and to the property insurance community1 changes in the natural hazard or disaster risk of policyholders or the region served by such program1 including changes resulting from participation in community-based catastrophe insurance and risk reduction investments undertaken by property owners1 renters1 businesses1 and other members pursuant to such program1 for the purposes of negotiating insurance product terms that are actuarially justified2 7,c7 comply with all applicable ,state insurance laws and regulatory requirements1 including securing appropriate authorization from each ,state in which the product will be offered with respect to covered entities seeking to offer1 issue1 underwrite1 or administer community-based catastrophe insurance pursuant to subparagraph 7,d77iii72 and 7,d7 utilize #a or a mixture of the following community-based insurance frameworks3 7i7 ,the covered entity facilitates the purchase of insurance between insurers and members of the community1 where such members contract directly with the insurer and the covered entity oversees community outreach and education and conducts premium negotiation with the insurer4 7ii7 ,the covered entity arranges a community-based catastrophe insurance product on behalf of members of a community1 where the covered entity facilitates enrollment of such members in the insurance product1 payment to the insurer1 and payout of claims to such members4 7iii7 ,the covered entity establishes a risk-bearing entity to offer1 issue1 underwrite1 or administer community-based catastrophe insurance for members of the community1 including purchasing reinsurance1 managing the payment of insurance claims1 setting insurance product terms1 and other functions necessary to administer such insurance4 7#c7 ,authorized activities ,a covered entity administering a community-based catastrophe insurance program designed1 developed1 or implemented with funds awarded under this section may-- 7,a7 utilize mobile-based technologies or other technologies for insurance delivery1 consumer information1 and other purposes2 or 7,b7 operate such program as a parametric risk transfer model through which fixed or graduated payments are provided to enrolled members of the community when predetermined trigger conditions are met following specified natural hazard or disaster events4 7d7 ,coordination ,in designing1 developing1 or implementing a community-based catastrophe insurance program pursuant to subsection 7a71 a covered entity receiving a grant under this section shall coordinate with-- 7#a7 members of the community1 including property owners1 renters1 businesses1 and other entities targeted for participation in the community-based catastrophe insurance product2 7#b7 the insurance regulator of each ,state in which the community-based catastrophe insurance program will operate2 7#c7 private industry1 including insurers and reinsurers2 and 7#d7 other relevant entities with expertise in natural hazard and disaster risk assessment1 mitigation1 recovery1 or insurability1 or in the delivery of financial assistance or benefits1 including-- 7,a7 other covered entities2 7,b7 insurance or reinsurance producers2 7,c7 nonprofit organizations2 7,d7 catastrophe risk modeling firms2 7,e7 academic and research institutions2 or 7,f7 financial technology providers4 7e7 ,prioritization of applicants ,in awarding grants under this section1 the ,administrator shall conduct a competitive process for considering and identifying applications from covered entities to ensure grant recipients-- 7#a7 represent broad geographic conditions1 demographics1 unmet natural hazard or disaster resiliency or recovery needs1 and other factors to produce a wide range of data to evaluate program performance and viability2 7#b7 target communities with high potential financial exposure to losses from natural hazards or disasters covered under the proposed community-based catastrophe insurance program for participation in such program2 and 7#c7 identify sufficient capital sources and public-private partnerships to ensure the long-term sustainability and effectiveness of the community-based catastrophe insurance program developed with funds under this section4 7f7 ,guidance 7#a7 ,in general ,not later than #ahj days after the date of enactment of this ,act1 the ,administrator shall issue guidance for the implementation of the pilot program established under subsection 7a71 including with respect to-- 7,a7 application requirements and evaluation criteria2 7,b7 the minimum requirements described in subsection 7c77#a72 7,c7 allowable uses of funds under subsection 7b71 including any limitation on administrative costs2 7,d7 coordination with ,state insurance regulators regarding the requirements of subsection 7c77#a77;,h71 including model approaches to determining whether a community-based catastrophe insurance product constitutes insurance under the laws of a ,state2 and 7,e7 the data reporting required under subsection 7h77#e74 7#b7 ,consultation ,in developing guidance under paragraph 7#a71 the ,administrator shall consult with-- 7,a7 the ,national ,association of ,insurance ,commissioners2 7,b7 ,state insurance regulators2 7,c7 the ,federal ,insurance ,office of the ,department of the ,treasury2 7,d7 covered entities and organizations representing covered entities2 and 7,e7 insurers1 reinsurers1 and other participants in the private risk transfer market1 including insurance and reinsurance producers4 7g7 ,termination ,the authorization to carry out the community-based catastrophe insurance pilot program established under subsection 7a7 shall terminate on ,september #cj1 #bjca4 7h7 ,,gao reports 7#a7 ,reports required ,the ,comptroller ,general of the ,united ,states shall1 with respect to community-based catastrophe insurance programs designed1 developed1 or implemented pursuant to this section1 conduct and submit to ,congress-- 7,a7 a study not later than #a year after at least #c covered entities utilized such programs to address a natural hazard or disaster event or not later than #c years after establishment of the pilot program under subsection 7a71 whichever occurs earlier2 and 7,b7 a study not later than #a year after the conclusion of the pilot program established under subsection 7a74 7#b7 ,evaluation criteria ,each study conducted under paragraph 7#a7 shall contain an evaluation of the effectiveness of programs designed1 developed1 or implemented pursuant to this section with respect to-- 7,a7 the timeliness of insurance claim1 benefit determinations1 and payout delivery2 7,b7 the extent to which claim and benefit payments addressed immediate natural hazard or disaster-related financial losses and recovery expenses2 7,c7 the extent to which risk reduction investments undertaken through the program were reflected in premium1 terms1 or capacity2 7,d7 participation rates among eligible households and communities1 including demographic1 geographic1 and income-based characteristics of participating and nonparticipating households2 7,e7 affordability of coverage and the effectiveness of any premium assistance mechanisms1 including the sources1 sufficiency1 and durability of any non-,federal premium assistance or risk capital secured pursuant to subsection 7b77#h72 7,f7 administrative costs relative to benefits delivered2 7,g7 impacts of the program on-- 7i7 post-disaster financial stability1 recovery outcomes1 and reliance on other forms of public assistance2 and 7ii7 awareness1 assessment1 mitigation1 and reduction of natural hazard or disaster risks covered under such program2 7,h7 with respect to members of the community-- 7i7 understanding of program terms1 trigger conditions1 and payout expectations1 and the effectiveness of outreach1 education1 and enrollment strategies2 and 7ii7 satisfaction with program administration and benefit delivery2 and 7,i7 any statutory1 regulatory1 operational1 actuarial1 or data-related barriers to broader implementation of community-based catastrophe insurance4 7#c7 ,recommendations ,the study required under paragraph 7#a77;,b7 shall include recommendations regarding-- 7,a7 opportunities for ,congress1 the ,department of ,homeland ,security1 and other ,federal agencies to support covered entities in the design1 development1 and implementation of community-based catastrophe insurance programs2 and 7,b7 whether ,congress should authorize1 expand1 modify1 or make permanent the pilot program established under subsection 7a74 7#d7 ,evaluation of non-traditional risk transfer ,the study required under paragraph 7#a77;,b7 shall include-- 7,a7 an examination of what the ,federal ,emergency ,management ,agency considers to be insurance under section #caa of the ,stafford ,disaster ,relief and ,emergency ,assistance ,act 7#db ,u4,s4,c4 #eaed72 7,b7 a review of recent developments and advancements in the private risk transfer market1 including-- 7i7 the creation of risk transfer mechanisms and instruments beyond traditional property insurance since #aihh2 and 7ii7 the efficacy of other community-based catastrophe insurance demonstrations or policies implemented in the ,united ,states2 and 7,c7 an evaluation of-- 7i7 whether community-based catastrophe insurance would adequately encourage individuals1 ,states1 local governments1 and other covered entities to reduce exposure to losses from natural hazards or disasters by obtaining private coverage to supplement and replace governmental assistance2 7ii7 the design parameters and contract terms required for non-traditional insurance risk transfer mechanisms and instruments to be considered by the ,federal ,emergency ,management ,agency as insurance for purposes of any requirements to obtain and maintain insurance coverage under the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act 7#db ,u4,s4,c4 #eaba et seq472 and 7iii7 the impact that denial of recognition of non-traditional insurance risk transfer mechanisms and instruments by the ,federal ,emergency ,management ,agency has on the utilization of such products by ,states1 local governments1 and other covered entities to supplement or replace government assistance through private options4 7#e7 ,data sharing requirement ,a covered entity receiving grant funding under this section shall be required to provide appropriate and reasonable data to the ,comptroller ,general on the performance of the community-based catastrophe insurance product designed1 developed1 facilitated1 or implemented with funds from this section to support reporting requirements under this subsection4 ,nothing in this section shall require disclosure of proprietary1 trade secret1 or confidential insurer1 reinsurer1 or catastrophe-modeling information4 7#f7 ,consultation ,in conducting each study required under paragraph 7#a71 the ,comptroller ,general shall consult with-- 7,a7 the ,national ,association of ,insurance ,commissioners2 7,b7 ,state insurance regulators2 7,c7 the ,federal ,insurance ,office of the ,department of the ,treasury2 and 7,d7 recipients of grants awarded under this section4 7i7 ,definitions ,in this section3 7#a7 ,administrator ,the term ,administrator means the ,administrator of the ,federal ,emergency ,management ,agency4 7#b7 ,alaska ,native ,corporation ,the term ,alaska ,native ,corporation has the meaning given the term ,native ,corporation in section #c of the ,alaska ,native ,claims ,settlement ,act 7#db ,u4,s4,c4 #afjb74 7#c7 ,basis risk ,the term basis risk means the potential difference between the actual loss from a natural hazard or disaster event and the payout from a parametric program4 7#d7 ,community ,the term community means a defined geographic region encompassing a group of properties1 including those owned or utilized by homeowners1 renters1 businesses1 and other relevant stakeholders4 7#e7 ,community-based catastrophe insurance ,the term community-based catastrophe insurance means natural hazard or disaster insurance that is arranged by a covered entity to provide coverage to a community4 7#f7 ,covered entities ,the term covered entities-- 7,a7 means-- 7i7 ,states1 ,tribal governments1 or any political subdivision thereof2 7ii7 ,native ,hawaiian organizations2 7iii7 ,alaska ,native ,corporations2 7iv7 community-based1 nonprofit organizations2 or 7v7 other relevant stakeholders as identified by the ,administrator with sufficient authority to facilitate or offer coverage of catastrophe insurance for a group of properties2 and 7,b7 shall1 to the extent a covered entity offers1 issues1 underwrites1 administers1 or otherwise bears insurance risk1 only include entities described in subparagraph 7a7 that are authorized to do so under applicable ,state insurance laws and regulatory requirements4 7#g7 ,native ,hawaiian organization ,the term ,native ,hawaiian organization-- 7,a7 means an organization that-- 7i7 serves and represents the interests of ,native ,hawaiians2 7ii7 provides services to ,native ,hawaiians2 and 7iii7 has expertise in ,native ,hawaiian affairs2 and 7,b7 includes ,native ,hawaiian organizations registered with ,office of ,native ,hawaiian ,relations of the ,department of the ,interior4 7#h7 ,secretary ,the term ,secretary means the ,secretary of ,homeland ,security4 7#i7 ,tribal government ,the term ,tribal government means the recognized governing body of an ,indian ,tribe4 7j7 ,preservation of ,state authority ,nothing in this ,act1 including any grant condition1 guidance1 program requirement1 or other action taken pursuant to this ,act1 shall be construed to preempt1 supersede1 impair1 or otherwise affect the application of ,state insurance laws or the authority of a ,state insurance regulator to regulate the business of insurance4 ,to the extent any provision of this ,act relates to the business of insurance1 the ,act of ,march #i1 #aide 7commonly known as the ,mc,carran-,ferguson ,act7 shall apply4 ,no provision of this ,act shall be construed to authorize any ,federal department1 agency1 officer1 employee1 contractor1 grantee1 or program administrator to approve insurance products1 establish insurance rates1 license insurers or producers1 approve policy forms1 regulate claims handling1 establish market conduct standards1 or otherwise exercise authority reserved to ,state insurance regulators under applicable ,state laws and regulatory requirements4 7k7 ,authorization of appropriations ,there is authorized to be appropriated to the ,secretary #bj1jjj1jjj for each of fiscal years #bjbg through #bjca to carry out the grant program established under subsection 7a74