I

103D CONGRESS

1ST SESSION H. R. 2873

To amend the Robert T. Stafford Disaster Relief and Emergency Assistance

Act to provide for an expanded Federal program of hazard mitigation,

relief, and insurance against the risk of catastrophic natural disasters,

such as hurricanes, earthquakes, and volcanic eruptions, and for other

purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 4, 1993

Mr. MINETA (for himself and Mr. BOEHLERT) introduced the following bill;

which was referred jointly to the Committees on Public Works and Transportation and Banking, Finance and Urban Affairs

FEBRUARY 2, 1994

Additional sponsors: Mr. GIBBONS, Mr. YOUNG of Alaska, Mr. SHAW, Mr.

BACCHUS of Florida, Mr. PORTER, Mr. QUILLEN, Mr. RAVENEL, Mr.

SUNDQUIST, Ms. BROWN of Florida, Mr. MICA, Mr. MCCOLLUM, Mr.

UNDERWOOD, Mr. JOHNSTON of Florida, Mr. PETERSON of Florida, Mr.

HUTTO, Mr. CANADY, Mr. KNOLLENBERG, Mr. LIPINSKI, Mr. EWING,

Mr. DEUTSCH, Mr. DEFAZIO, Mr. COOPER, Mr. BROWN of California,

Mr. BURTON of Indiana, Mr. HASTINGS, Mr. MILLER of Florida, Mr.

TAYLOR of North Carolina, Mr. HOBSON, Ms. EDDIE BERNICE JOHNSON

of Texas, Mr. LAUGHLIN, Mr. FILNER, Mr. STARK, Mr. GORDON, Mr.

BILIRAKIS, Mr. LEWIS of Florida, Mr. CLINGER, Mr. OBERSTAR, Mr.

LEVY, Mr. LEWIS of California, Mr. KLECZKA, Mr. GENE GREEN of

Texas, Mr. SWIFT, Ms. MOLINARI, Mr. RAHALL, Mr. CALLAHAN, Mrs.

LLOYD, Mr. BACHUS of Alabama, Mr. STENHOLM, Mrs. MEEK, Mr. DERRICK, Mr. MINGE, Mr. TANNER, Ms. DUNN, Mr. CALVERT, Mr. VOLKMER, Ms. ROS-LEHTINEN, Mr. TORRICELLI, Mr. JEFFERSON, Mr.

CLYBURN, Mr. DIAZ-BALART, Mr. SWETT, Mr. FARR of California, Mr.

CLEMENT, Mr. SPENCE, Ms. CANTWELL, Mr. BORSKI, Mrs. FOWLER,

Mr. WELDON, Mr. CONDIT, Mr. BLILEY, Mr. ENGEL, Mr. FOGLIETTA,

Mr. DOOLITTLE, Mr. FORD of Tennessee, Mr. HAYES, Mr. GILLMOR, Mr.

TUCKER, Mr. COSTELLO, and Mr. EDWARDS of California
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HR 2873 SC

A BILL

To amend the Robert T. Stafford Disaster Relief and Emergency Assistance Act to provide for an expanded Federal

program of hazard mitigation, relief, and insurance

against the risk of catastrophic natural disasters, such

as hurricanes, earthquakes, and volcanic eruptions, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act shall be cited as the ‘‘Natural Disaster Pro5 tection Act of 1993’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 Section 101 of the Robert T. Stafford Disaster Relief

8 and Emergency Assistance Act (42 U.S.C. 5121) is

9 amended as follows:

10 (a) In subsection (a), by—

11 (1) striking ‘‘and’’ in paragraph (1);

12 (2) inserting ‘‘and’’ following the semicolon in

13 paragraph (2);

14 (3) inserting the following new paragraph be15 fore ‘‘special measures’’:

16 ‘‘(3) because catastrophic natural disasters,

17 such as major hurricanes, earthquakes, and volcanic

18 eruptions, pose particular problems in terms of sub19 stantial long-term consequences, ill-equipped pre-
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1 paredness efforts, lack of hazard mitigation meas2 ures (such as enforced building codes), and inad3 equate insurance and reinsurance coverage;’’;

4 (4) inserting ‘‘promoting hazard mitigation

5 compliance and in’’ after ‘‘affected States in’’; and

6 (5) inserting ‘‘insurance and reinsurance cov7 erage,’’ after ‘‘rendering of aid, assistance,’’.

8 (b) In subsection (b), by—

9 (1) inserting before the semicolon in paragraph

10 (1) ‘‘by including State hazard mitigation compli11 ance, Federal primary insurance, and Federal excess

12 reinsurance programs’’;

13 (2) inserting after ‘‘preparedness’’ in paragraph

14 (2) ‘‘, hazard mitigation compliance,’’;

15 (3) striking the second ‘‘and’’ in paragraph (3)

16 and inserting in lieu thereof ‘‘, hazard mitigation,

17 emergency first response’’;

18 (4) striking ‘‘insurance coverage’’ in paragraph

19 (4) and inserting in lieu thereof ‘‘multi-hazard pri20 mary insurance coverage with premiums based on

21 risk’’;

22 (5) inserting before the semicolon in paragraph

23 (4) ‘‘and creating a Federal excess reinsurance pro24 gram in partnership with the private-sector to speed

25 rebuilding following a catastrophic natural disaster’’;
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1 (6) inserting before the semicolon in paragraph

2 (5) ‘‘and the adoption and enforcement of multi-haz3 ard building codes, and improved first responder ca4 pabilities’’; and

5 (7) inserting after ‘‘disasters’’ in paragraph (6)

6 ‘‘and a self-sustaining funding mechanism to help

7 States pay for hazard mitigation.’’.

8 SEC. 3. DEFINITIONS.

9 Section 102 of the Robert T. Stafford Disaster Relief

10 and Emergency Assistance Act (42 U.S.C. 5122) is

11 amended as follows:

12 (a) In paragraph (7) add ‘‘the Federal National

13 Mortgage Association, and the Federal Home Loan Mort14 gage Corporation,’’ following ‘‘United State Postal Serv15 ice,’’.

16 (b) Add at the end the following new paragraphs:

17 ‘‘(10) The term ‘critical facilities’ means

18 schools and structures essential to emergency serv19 ices necessary for post natural disaster recovery (in20 cluding hospitals, fire and police facilities, temporary

21 shelters, and emergency operating and preparedness

22 centers).

23 ‘‘(11) The term ‘Director’ means the Director

24 of the Federal Emergency Management Agency.
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1 ‘‘(12) The term ‘disaster-prone State’ means

2 any State determined by the Director pursuant to

3 section 701 to be a hurricane-prone, windstorm4 prone, earthquake-prone, volcanic eruption-prone, or

5 flood-prone State.

6 ‘‘(13) The term ‘earthquake’ means any shak7 ing or trembling of the crust of the earth caused by

8 underground seismic forces or by breaking and shift9 ing of rock beneath the surface.

10 ‘‘(14) The term ‘earthquake-prone State’ means

11 a State determined by the Director pursuant to sec12 tion 701 to have an exposure to the earthquake

13 peril.

14 ‘‘(15) The term ‘Federal assistance’ means any

15 form of financial aid, including grants, loans, loan16 guarantees, subsidies, insurance, and payments, pro17 vided by a Federal agency.

18 ‘‘(16) The term ‘first responder’ means those

19 fire fighting, police, and emergency medical person20 nel with the statutory authority to engage in and

21 provide immediate emergency response services.

22 ‘‘(17) The term ‘flood’ or ‘flooding’ means a

23 general and temporary condition of partial or com24 plete inundation of normally dry land areas from the

25 overflow of inland or tidal waters or the unusual and
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1 rapid accumulation of runoff of surface waters from

2 any source.

3 ‘‘(18) The term ‘flood-prone State’ means a

4 State determined by the Director pursuant to sec5 tion 701 to have an exposure to the flood peril.

6 ‘‘(19) The term ‘hurricane’ means a non-fron7 tal, warm core, low pressure atmospheric system

8 having a definite organized circulation, including any

9 associated windstorm events occurring within 72

10 hours before and after the hurricane, with sustained

11 wind speeds of 74 miles per hour or greater and offi12 cially declared to be a hurricane by the National

13 Hurricane Center.

14 ‘‘(20) The term ‘hurricane-prone State’ means

15 a State determined by the Director pursuant to sec16 tion 701 to have an exposure to the hurricane peril.

17 ‘‘(21) The term ‘hurricane zone’ means an area

18 within a State identified by the Director as being

19 subject to major risk from the hurricane peril.

20 ‘‘(22) The term ‘insurance industry’ means all

21 private insurers and private reinsurers.

22 ‘‘(23) The term ‘lifelines’ means critical public

23 infrastructure, including highways, bridges, water

24 transportation and treatment facilities, electric
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1 transmission systems, pipelines, and telecommuni2 cations networks.

3 ‘‘(24) The term ‘local community’ means a po4 litical subdivision of a State which has zoning and

5 building code jurisdiction over a particular area

6 which is exposed to the hurricane, windstrom, earth7 quake, volcanic-eruption, or flood peril.

8 ‘‘(25) The term ‘multi-hazard coverage’ means

9 policies, riders, or endorsements of insurance issued

10 on Federal paper pursuant to subtitle A of title VIII

11 that provide indemnity, in whole or in part, for the

12 loss, destruction, or damage of residential property.

13 ‘‘(26) The term ‘ordinance or law coverage’

14 means insurance coverage for the increased cost of

15 construction to repair or rebuild structures and the

16 cost of demolition due to the enforcement of any

17 ordinance or law, such as building codes.

18 ‘‘(27) The terms ‘private insurer’ and ‘private

19 reinsurer’ mean any insurer or reinsurer that is (A)

20 licensed or admitted to write property and casualty

21 insurance or reinsurance within a State, or (B) is a

22 branch of an insurer or reinsurer organized or incor23 porated in a country other than the United States

24 that is entered through and licensed by a State to

25 conduct insurance or reinsurance business. In the
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1 case of an insurance exchange or group of unincor2 porated underwriters, the term means an underwrit3 ing syndicate, notwithstanding the licensed or admit4 ted status of the insurance exchange or group of

5 unincorporated underwriters.

6 ‘‘(28) The term ‘residential property’ means

7 any (A) 1- to 4-family residential structure (includ8 ing mobile or manufactured homes) and the personal

9 property therein, and (B) personal property of occu10 pants of residential structures (including condomin11 iums, cooperatives, and apartment structures).

12 ‘‘(29) The term ‘seismic zone’ means an area

13 within a State identified by the Director as being

14 subject to major risk from the earthquake peril.

15 ‘‘(30) The term ‘State residual insurance pool16 ing program’ means any State-authorized joint un17 derwriting or joint reinsurance association, risk pool,

18 residual market mechanism, or other type of State19 sanctioned entity providing property insurance cov20 erage against hurricanes, earthquakes, volcanic

21 eruptions, or tsunamis.

22 ‘‘(31) The term ‘substantially modified building

23 construction’ means additional or improvements to

24 an existing structure which constitute at least a 50

25 percent increase in the overall value of the structure.
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1 ‘‘(32) The term ‘supplemental losses’ means

2 claim and loss adjustment expense payments for the

3 multi-hazard coverage issued pursuant to subtitle A

4 of title VIII that exceed the accumulated amounts in

5 the Primary Insurance Program Fund.

6 ‘‘(33) The term ‘tsunami’ means an ocean wave

7 generated by underwater disturbances in the earth’s

8 crust, primarily earthquakes and submarine volcanic

9 eruptions.

10 ‘‘(34) The term ‘volcanic eruption’ means the

11 expulsion, as a result of natural causes, of molten

12 rock, rock fragments, gases, ashes, mud, lava flows,

13 and other natural substances through an opening in

14 the crust of the Earth.

15 ‘‘(35) The term ‘volcanic eruption-prone State’

16 means a State determined by the Director pursuant

17 to section 701 to have an exposure to the volcanic

18 eruption peril.

19 ‘‘(36) The term ‘volcanic zone’ means an area

20 within a State identified by the Director as being

21 subject to major risk from the volcanic eruption

22 peril.

23 ‘‘(37) the term ‘windstorm’ means an atmos24 pheric disturbance marked by high velocity move-
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1 ments of air, such as a tornado, but does not include

2 a hurricane.

3 ‘‘(38) The term ‘windstorm-prone State’ means

4 a State determined by the Director pursuant to sec5 tion 701 to have an exposure to the windstorm

6 peril.’’.

7 SEC. 4. DISASTER ASSISTANCE AMENDMENTS.

8 Title IV of the Robert T. Stafford Disaster Relief and

9 Emergency Assistance Act (42 U.S.C. 5121 et seq.) is

10 amended as follows:

11 (a) In section 404 (42 U.S.C. 7170c), add ‘‘(a) HAZ12 ARD MITIGATION GRANTS.—’’ following the section head13 ing and add the following new subsections at the end:

14 ‘‘(b) HAZARD MITIGATION INITIATIVES.—Consistent

15 with this title and other existing Federal law, the Director

16 shall develop programs to carry out the following multi17 hazard mitigation and emergency management initia18 tives—

19 ‘‘(1) the development of model building codes

20 and other hazard mitigation measures for cata21 strophic natural disasters, such as hurricanes, wind22 storms, earthquakes, volcanic-eruptions, or floods,

23 which are based on both preventing personal injuries

24 and mitigating property damage;
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1 ‘‘(2) adequate training and licensing of archi2 tects, engineers building inspectors, building code

3 enforcement personnel, planners, and similar profes4 sionals to ensure proper compliance with hazard

5 mitigation standards;

6 ‘‘(3) expanded research to strengthen building

7 codes and promote development of cost-effective

8 building technologies and related hazard mitigation

9 measures;

10 ‘‘(4) the transfer of hazard mitigation tech11 nology to States, local communities, and other per12 sons, such as private building contractors, respon13 sible for the implementation and enforcement of

14 hazard mitigation measures;

15 ‘‘(5) aid for Federal, State, and local emergency

16 response operations following natural disasters which

17 could include the acquisition of additional facilities,

18 equipment, and personnel as well as resources for

19 training and public assistance; and

20 ‘‘(6) education to enhance public awareness of

21 the risk of and hazards from natural disasters and

22 ways to mitigate the personal, physical, and eco23 nomic losses.

24 ‘‘(c) FEDERAL REGULATIONS.—Within 18 months of

25 the date of enactment of the Natural Disaster Protection
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1 Act of 1993, the Director, in coordination with other Fed2 eral agencies, shall issue final multi-hazard mitigation reg3 ulations necessary to carry out the hazard mitigation ac4 tivities described in subsection (b). Such regulations shall

5 be issued pursuant to the provisions of subchapter II of

6 charter 5 of title 5, United States Code.’’.

7 (b) In section 405 (42 U.S.C. 5171), add the follow8 ing new subsection at the end:

9 ‘‘(d) FEDERALLY-CONNECTED BUILDINGS.—All new

10 buildings owned or leased by any Federal agency or receiv11 ing Federal assistance shall meet the newest edition of the

12 relevant building code requirements, including relevant

13 building and housing codes and performance building

14 standards. Within 18 months of the date of enactment of

15 the Natural Disaster Protection Act of 1993, the Director,

16 in coordination with other Federal agencies, shall issue

17 final regulations necessary to carry out this subsection,

18 pursuant to the provisions of subchapter II of chapter 5

19 of title 5, United States Code.’’.

20 (c) In section 406 (42 U.S.C. 5172), add the follow21 ing new subsection at the end:

22 ‘‘(g) MITIGATION NON-COMPLIANCE PENALTY.—No

23 public assistance disaster funds under this section shall

24 be provided to any local community which has failed, with25 in 5 years from the date of enactment of the Natural Dis-
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1 aster Protection Act of 1993, to comply with the multi2 hazard building and safety codes described in section

3 702(a) and the flood performance standards described in

4 section 702(b).’’.

5 (d) In section 407 (42 U.S.C. 5173), add the follow6 ing new subsection at the end:

7 ‘‘(e) MITIGATION NON-COMPLIANCE PENALTY.—No

8 public assistance disaster funds under this section shall

9 be provided to any local community which has failed, with10 in 5 years from the date of enactment of the Natural Dis11 aster Protection Act of 1993, to comply with the multi12 hazard building and safety codes described in section

13 702(a) and the flood performance standards described in

14 section 702(b).’’.

15 SEC. 5. MULTI-HAZARD MITIGATION PROGRAM.

16 The Robert T. Stafford Disaster Relief and Emer17 gency Assistance Act (42 U.S.C. 5121 et seq.) is amended

18 by adding at the end the following new title:

19 TITLE VII—MULTI-HAZARD MITIGATION

20 PROGRAM

21 ‘‘SEC. 701. IDENTIFICATION AND DESIGNATION OF DISAS22 TER-PRONE STATES.

23 ‘‘(a) INITIAL IDENTIFICATION.—The Director, con24 sistent with existing Federal law, shall identify States
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1 which are prone to damages from the following natural

2 disaster perils—

3 ‘‘(1) hurricanes;

4 ‘‘(2) windstorms;

5 ‘‘(3) earthquakes;

6 ‘‘(4) volcanic eruptions; and

7 ‘‘(5) flooding.

8 ‘‘(b) DESIGNATION BY PERIL.—The Director shall

9 designate all States identified pursuant to subsection (a)

10 as disaster-prone States, and separately designate States

11 as hurricane-prone, windstorm-prone, earthquake-prone,

12 volcanic eruption-prone, or flood-prone, as appropriate,

13 within 1 year of the date of the enactment of the Natural

14 Disaster Protection Act of 1993. The Director shall cause

15 a listing of such States to be published in the Federal Reg16 ister and in widely circulated local newspapers in the ap17 plicable States before the expiration of such 1-year period.

18 ‘‘(c) FINAL NOTIFICATION.—The designation for

19 each State under subsection (b) shall become final for the

20 purposes of this Act 6 months after such designations are

21 published in the Federal Register. The Director shall

22 notify the chief executive officer of each such State des23 ignated, in writing, before the expiration of such 6-month

24 period.
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1 ‘‘(d) ONGOING DESIGNATION AND NOTIFICATION.—

2 Based upon any additional hurricane, windstorm, seismic,

3 volcanic, or flood information that from time-to-time be4 comes available, the Director may designate States (not

5 designated under subsection (b)) having an exposure to

6 hurricane, windstorm, earthquake, volcanic eruption, or

7 flood perils. Any such States shall be designated pursuant

8 to the terms of subsection (b) and notified pursuant to

9 terms of subsection (c).

10 ‘‘(e) APPEAL.—Any State aggrieved by a final deter11 mination as a disaster-prone State, pursuant to sub12 sections (c) or (d), may, after exhausting administrative

13 remedies, appeal such determination to any United States

14 district court for a district located within the State, not

15 more than 60 days after receipt of notice of such deter16 mination. The scope of review by the court shall be as pro17 vided under chapter 7 of title 5, United States Code. Dur18 ing the pendency of any such litigation, all determinations

19 of the Director shall be effective and final for the purposes

20 of this title unless stayed by the court for good cause

21 shown.

22 ‘‘SEC. 702. BUILDING AND SAFETY STANDARDS.

23 ‘‘(a) MULTI-HAZARD BUILDING AND SAFETY

24 CODES.—At a minimum, each State designated as a hurri-
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1 cane-prone State, a windstorm-prone State, or an earth2 quake-prone State shall either—

3 ‘‘(1) for all new and substantially modified

4 building construction in that State, adopt the rel5 evant natural disaster hazard mitigation portions of

6 the newest edition of the National Building Code,

7 the Standard Building Code, or the Uniform Build8 ing Code and other relevant building and housing

9 codes and standards, including the national consen10 sus safety codes of the National Fire Protection As11 sociation (specifically the National Electrical Code,

12 the National Fuel Gas Code, the Flammable and

13 Combustible Liquids Code, and the Standard for the

14 Storage and Handling of Liquified Petroleum

15 Gases); or

16 ‘‘(2) certify that the State’s local communities

17 have adopted and are enforcing building codes which

18 meet or exceed the minimum natural disaster hazard

19 mitigation portions of any of the 3 model building

20 codes and other building and housing codes and

21 standards described in paragraph (1) for all new and

22 substantially modified building construction in that

23 State.
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1 ‘‘(b) FLOOD PERFORMANCE STANDARDS.—At a min2 imum, each State designated as a flood-prone State shall

3 either—

4 ‘‘(1) adopt the relevant flood minimum per5 formance standards, flood-proofing, and other flood

6 protection measures authorized pursuant to the Na7 tional Flood Insurance Act of 1968, as amended (42

8 U.S.C. 4001 et seq.), which minimize flood damage

9 for new and substantially modified building con10 struction located in flood-prone local communities; or

11 ‘‘(2) certify that all the State’s flood-prone local

12 communities have adopted and are enforcing the

13 minimum performance standards described in para14 graph (1) for new and substantially modified build15 ing construction.

16 ‘‘SEC. 703. STATE MITIGATION PLANS.

17 ‘‘(a) GENERAL AUTHORITY.—Each State designated

18 as a disaster-prone State shall either—

19 ‘‘(1) develop a mitigation plan which establishes

20 the State’s plan with accompanying schedules for

21 improving the State’s ability to reduce the hazards

22 of future natural disasters, such as hurricanes,

23 windstorms, earthquakes, volcanic-eruptions, or

24 floods; or
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1 ‘‘(2) designate an existing mitigation plan

2 which includes the processes described in subsection

3 (b).

4 ‘‘(b) CONTENT OF STATE MITIGATION PLANS.—

5 Each State mitigation plan shall include, at a minimum,

6 a process for—

7 ‘‘(1) verifying compliance with the multi-hazard

8 building and safety codes described in section 702(a)

9 and the flood performance standards described in

10 section 702(b) to ensure these building standards

11 are being enforced;

12 ‘‘(2) identifying, consistent with the National

13 Flood Insurance Act, as amended (42 U.S.C. 4001

14 et seq.), the areas within the State which have some

15 risk from the hazards of natural disasters, including

16 hurricanes, windstorms, earthquakes, volcanic erup17 tions, and floods, and further categorizing at-risk

18 areas based on the degree of risk;

19 ‘‘(3) establishing priorities by risk and location

20 of which types of structures, including State build21 ings, lifelines, and critical facilities, may be in need

22 of hazard mitigation;

23 ‘‘(4) identifying which hazard mitigation meas24 ures, such as building codes, non-structural mitiga25 tion, and retrofitting, for each of the natural disas-
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1 ter perils that are most cost-effective and most likely

2 to prevent personal injury and reduce property

3 losses;

4 ‘‘(5) improving the emergency response to natu5 ral disasters, which shall include capabilities for fire

6 fighting, search and rescue, and the provision of

7 shelters, communications, and medical relief;

8 ‘‘(6) expediting the rebuilding of lifelines and

9 the recovery by individuals and the State’s business

10 and commercial sector;

11 ‘‘(7) encouraging the development of local com12 munity-based hazard mitigation plans;

13 ‘‘(8) achieving compliance with and enforcement

14 of the Federal multi-hazard mitigation standards or

15 requirements set forth in regulations promulgated by

16 the Director pursuant to this Act; and

17 ‘‘(9) developing standards and guidelines for

18 the safe staffing, operations, and regular training of

19 first responders for disaster emergency mitigation.

20 ‘‘(c) SUBMISSION OF STATE MITIGATION PLANS TO

21 FEMA.—Within 2 years of being designated disaster22 prone pursuant to section 701, each disaster-prone State

23 shall submit its completed mitigation plan to the Director.
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1 ‘‘SEC. 704. COMPLIANCE BY STATES.

2 ‘‘(a) DEFINITION OF COMPLIANCE STATE.—A disas3 ter-prone State shall be considered a compliance State for

4 purposes of this title, if within 5 years of the date of enact5 ment of the Natural Disaster Protection Act of 1993, the

6 State is certified under subsection (b)(3) as a compliance

7 State and, where appropriate, if its compliance status has

8 been renewed pursuant to the terms of subsection (b)(4).

9 ‘‘(b) DETERMINATION OF COMPLIANCE.—

10 ‘‘(1) STATE SUBMISSION OF CERTIFICATION.—

11 Within 3 years of being designated disaster-prone

12 pursuant to section 701, each disaster-prone State

13 shall submit a certification to the Director stating

14 whether the State has—

15 ‘‘(A) substantially complied with, and is

16 substantially enforcing, the multi-hazard build17 ing codes provisions of section 702(a) and the

18 flood performance standards of section 702(b);

19 and

20 ‘‘(B) started implementing its mitigation

21 plan, including the specific processes described

22 in section 703(b).

23 ‘‘(2) REVIEW BY DIRECTOR.—The Director

24 shall review each certification submitted under para25 graph (1) to determine whether it is an accurate

26 manifestation of the submitting State’s substantial
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1 compliance with, and enforcement of, the hazard

2 mitigation measures described in sections 702 and

3 703.

4 ‘‘(3) COMPLIANCE DETERMINATION.—If the

5 Director determines that the State certification is

6 substantially accurate and the State has substan7 tially adopted and is substantially enforcing and car8 rying out the applicable hazard mitigation measures

9 described in sections 702 and 703, the Director shall

10 promptly certify the State as a compliance State for

11 purposes of subsection (a). If the Director deter12 mines that the State certification is substantially in13 accurate, the Director shall promptly return the cer14 tification submission to the State with suggested

15 changes for obtaining certification as a compliance

16 State.

17 ‘‘(4) COMPLIANCE RENEWAL.—The Director

18 shall review the compliance with, and enforcement

19 of, the applicable hazard mitigation measures by

20 each compliance State meeting the requirements of

21 subsection (a) not less than once every 2 years and

22 shall renew compliance certificates under the terms

23 of paragraph (3) as appropriate.

24 ‘‘(5) REGULATIONS.—The Director shall issue

25 final regulations not later than 18 months after the
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1 date of the enactment of the Natural Disaster Pro2 tection Act of 1993 describing the criteria to be used

3 in determining whether a State is a compliance

4 State.

5 (c) PENALTIES FOR NON-COMPLIANCE.—The follow6 ing penalties shall become effective 5 years from the date

7 of enactment of the Natural Disaster Protection Act of

8 1993:

9 ‘‘(1) NO MITIGATION FUNDS.—Funds from the

10 Self-Sustaining Mitigation Fund under section 705

11 shall not be made available to any State which has

12 not been certified as a compliance State.

13 ‘‘(2) HIGHER PREMIUMS AND DEDUCTIBLES.—

14 Premium rates and deductibles assessed under the

15 Primary Insurance Program of subtitle A of title

16 VIII shall be increased, as determined by the Direc17 tor under the plan of operation of section 821 and

18 consistent with actuarially sound requirements of

19 section 804, for all policyholders residing in a State

20 which has not been certified as a compliance State.

21 ‘‘(3) NO ASSISTANCE OR FEDERAL BUILD22 INGS.—No Federal assistance shall be provided to

23 any new Federal building or new Federally leased,

24 assisted, or regulated building covered under Execu25 tive Order 11988 (‘‘Floodplain Management’’, May
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1 24, 1977) and Executive Order 12699 (‘‘Seismic

2 Safety of Federal and Federally Assisted or Regu3 lated New Building Construction’’, January 5, 1990)

4 which is located in a State which has not been cer5 tified as a compliance State.

6 ‘‘SEC. 705. SELF-SUSTAINING MITIGATION FUND.

7 ‘‘(a) ESTABLISHMENT.—

8 ‘‘(1) A percentage of the annual multi-hazard

9 coverage premiums collected under the Primary In10 surance Program under subtitle A of title VIII and

11 the excess reinsurance premiums collected under the

12 Reinsurance Program under subtitle B of title VIII

13 shall be deposited, on a quarterly basis, in a sepa14 rate fund to be known as the Self-Sustaining Mitiga15 tion Fund.

16 ‘‘(2) The Director shall set the percentage de17 scribed in paragraph (1) which shall be at least 5

18 percent, but shall not exceed 10 percent, unless the

19 Director determines that the amounts in the Pri20 mary Insurance Program Fund established under

21 section 805 and the Reinsurance Fund established

22 under section 815 are sufficient to provide for any

23 probable expected losses from future hurricanes,

24 earthquakes, and volcanic eruptions.
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1 ‘‘(3) Interest on amounts in the Self-Sustaining

2 Mitigation Fund shall be credited to the Fund.

3 ‘‘(b) USE.—Amounts in the Self-Sustaining Mitiga4 tion Fund shall be available, to the extent provided in ap5 propriations Acts, to the Director to use as follows:

6 ‘‘(1) STATE SUPPORT.—The Director shall pro7 vide amounts in the Fund as financial assistance to

8 each disaster-prone State, unless 5 years from the

9 date of enactment of the Natural Disaster Protec10 tion Act of 1993 has passed and that State has not

11 been certified as a compliance State under section

12 704.

13 ‘‘(A) Each State’s share of such financial

14 assistance shall be based solely on a pro rata

15 formula of the Primary Insurance Program pre16 miums collected pursuant to subtitle A of title

17 VIII from the policyholders residing in that

18 State.

19 ‘‘(B) Such financial assistance shall be

20 used by disaster-prone States to support hazard

21 mitigation activities described in sections 702

22 and 703 and any activities required by the Fed23 eral regulations issued pursuant to section 404.

24 Priority shall be given to those hazard mitiga25 tion activities necessary to bring the State into
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1 compliance with the building standards of sec2 tion 702, including the adequate enforcement of

3 such standards.

4 ‘‘(C) Disaster-prone States shall transfer a

5 percentage, as established in Federal regula6 tions, of such financial assistance to local com7 munities to support activities necessary to en8 sure State compliance with the hazard mitiga9 tion requirements of this title.

10 ‘‘(D) The Director shall from time-to-time

11 conduct audits to ensure that disaster-prone

12 States and local communities are using such fi13 nancial assistance to support the hazard mitiga14 tion activities described in subparagraphs (B)

15 and (C).

16 ‘‘(2) FEDERAL SUPPORT.—A portion of the

17 amounts in the Self-Sustaining Mitigation Fund, as

18 determined by the Director, may be used to support

19 Federal hazard mitigation and emergency manage20 ment activities described in section 404.

21 ‘‘(c) FEDERAL REGULATION.—Within 12 months of

22 the date of enactment of the Natural Disaster Protection

23 Act of 1993, the Director shall issue final Federal regula24 tions, pursuant to the provisions of subchapter II of chap-
26

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1 ter 5 of title 5, United States Code, necessary to carry

2 out this section.

3 ‘‘SEC. 706. NATURAL DISASTER MITIGATION AND PLANNING

4 ADVISORY COMMITTEE.

5 ‘‘(a) ESTABLISHMENT.—There is established an inde6 pendent advisory committee within the executive branch

7 to be known as the Natural Disaster Mitigation and Plan8 ning Advisory Committee (in this section referred to as

9 the ‘Committee’). To the extent not contradicted by the

10 provisions of this section, the Committee shall be subject

11 to the provisions of the Federal Advisory Committee Act

12 (5 U.S.C. Appendix 2). The establishment of the Commit13 tee shall not result in the creation of any new permanent

14 staff or new office facilities.

15 ‘‘(b) MEMBERSHIP.—The Committee shall be com16 posed of 20 members appointed by the Director. The

17 members shall be chosen from among citizens of the

18 United States and shall include—

19 ‘‘(1) 1 individual who is a metropolitan fire

20 chief;

21 ‘‘(2) 1 individual who is a State fire marshal;

22 ‘‘(3) 1 individual who is a volunteer fire fighter;

23 ‘‘(4) 1 individual who is an organized labor rep24 resentative of the fire services;
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1 ‘‘(5) 1 individual who is a search and rescue

2 expert;

3 ‘‘(6) 1 individual who is a State director of

4 emergency medical services;

5 ‘‘(7) 1 individual who represents the interests of

6 the model building code bodies;

7 ‘‘(8) 1 individual who is a State emergency

8 manager;

9 ‘‘(9) 1 individual who is a local emergency

10 manager;

11 ‘‘(10) 1 individual who is a flood plain

12 manager;

13 ‘‘(11) 1 individual who represents the interests

14 of law enforcement;

15 ‘‘(12) 1 individual who is an architect;

16 ‘‘(13) 1 individual who is a builder;

17 ‘‘(14) 1 individual who is a structural engineer;

18 ‘‘(15) 1 individual who represents a building

19 trades labor union;

20 ‘‘(16) 1 individual who is a recognized seismic

21 hazard mitigation expert;

22 ‘‘(17) 1 individual who is a recognized wind

23 hazard mitigation expert;

24 ‘‘(18) 1 individual who represents the interests

25 of consumers;
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1 ‘‘(19) 1 individual who represents the private

2 insurers; and

3 ‘‘(20) 1 individual who represents the insurance

4 agents.

5 ‘‘(c) VACANCIES.—A vacancy on the Committee shall

6 be filled in the manner in which the original appointment

7 was made.

8 ‘‘(d) CHAIRPERSON.—The Director shall designate a

9 chairperson of the Committee from among members

10 selected for appointment to the Committee.

11 ‘‘(e) SELECTION.—Not later than 180 days after the

12 date of the enactment of the Natural Disaster Protection

13 Act of 1993 and after consulting with the State and local

14 emergency management community, the Director shall ap15 point the members of the Committee.

16 ‘‘(f) FUNCTIONS OF THE COMMITTEE.—The Com17 mittee shall advise the Director on hazard mitigation and

18 disaster planning, including the development and imple19 mentation of the multi-hazard mitigation programs cre20 ated pursuant to this title. The Committee shall review

21 and comment on all draft Federal regulations issued by

22 the Director pursuant to this title.

23 ‘‘(g) RESPONSIBILITIES OF THE DIRECTOR.—The

24 Director shall fully cooperate with the Committee and pro25 vide the Committee with access to personnel and informa-
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1 tion as the Committee considers necessary to carry out

2 its functions. The Director shall request comments from

3 the Committee on any questions regarding operation of

4 multi-hazard mitigation programs established under this

5 title.’’.

6 SEC. 6. FEDERAL INSURANCE PROGRAMS.

7 The Robert T. Stafford Disaster Relief and Emer8 gency Assistance Act (42 U.S.C. 5121 et seq.) is amended

9 by adding after title VII as set forth above, the following

10 new title:

11 ‘‘TITLE VIII—FEDERAL INSURANCE

12 PROGRAMS

13 ‘‘Subtitle A—Primary Insurance Program

14 ‘‘SEC. 801. BASIC AUTHORITY AND PROGRAM OPERATION.

15 ‘‘(a) ESTABLISHMENT.—To carry out the purposes of

16 this subtitle, the Director shall establish and carry out a

17 national multi-hazard insurance program (in this title re18 ferred to as the ‘Primary Insurance Program’) to provide

19 insurance against loss resulting from physical damage to

20 or loss of real property or personal property related there21 to, in any State or States, arising from any earthquake

22 and volcanic eruption (including any fire proximately

23 caused by such volcanic eruption).

24 ‘‘(b) IMPLEMENTATION.—In carrying out the Pri25 mary Insurance Program, the Director shall arrange for
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1 participation, on other than a risk-sharing basis, by pri2 vate insurers, insurance agents and brokers, insurance

3 adjustment organizations, and other persons. The Direc4 tor may take any actions reasonably necessary and appro5 priate to carry out this subtitle, including the making of

6 contracts, the employment and compensation of persons,

7 the acquisition of real and personal property, and the rea8 sonable auditing of private insurers participating in the

9 Primary Insurance Program limited to matters directly re10 lated to their participation in such program.

11 ‘‘(c) INSURANCE PRACTICES.—Any actions of the

12 Director under this subtitle shall be consistent with stand13 ard insurance practices and generally accepted accounting,

14 actuarial, and underwriting principles.

15 ‘‘(d) FLOOD INSURANCE STUDY.—The Director shall

16 evaluate the feasibility and benefits of including flood as

17 a covered peril under the national multi-hazard insurance

18 program. Such evaluation shall include an examination of

19 whether to integrate existing flood insurance policies is20 sued under the National Flood Insurance Act of 1968, as

21 amended (42 U.S.C. 4001 et seq.), into the multi-hazard

22 coverage policy issued under this subtitle. The Director

23 shall submit a report, including any recommendations, to

24 the Congress within 1 year of the date of enactment of

25 the Natural Disaster Protection Act of 1993.
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1 ‘‘(e) IMPROVED PARTICIPATION IN FEDERAL FLOOD

2 INSURANCE PROGRAM.—

3 ‘‘(1) NOTIFICATION REQUIREMENT.—Agents

4 and brokers or private insurers participating in the

5 Federal flood insurance program pursuant to the

6 National Flood Insurance Act, as amended (42

7 U.S.C. 4001 et seq.), shall promptly notify the Di8 rector of any policyholder who refuses to purchase

9 Federal flood insurance if such policyholder is re10 quired pursuant to such Act to purchase such cov11 erage as a condition of receiving any Federal assist12 ance for acquisition or construction of the insured

13 property and the agent, broker, or private insurer

14 knows of such requirement.

15 ‘‘(2) FEMA OBLIGATION.—

16 (A) GENERAL AUTHORITY.—Within 180

17 days of receiving a notification of any non-com18 pliant policholder as described in paragraph (1),

19 the Director shall take necessary and appro20 priate steps consistent with the National Flood

21 Insurance Act, as amended (42 U.S.C. 4001 et

22 seq.), to assure said policyholder purchases the

23 required Federal flood insurance coverage.

24 ‘‘(B) REPORT TO CONGRESS.—Within 180

25 days of enactment of the Natural Disaster Pro-
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1 tection Act of 1993, the Director shall submit

2 a report to Congress of any additional sanc3 tions, or other measures, deemed necessary and

4 appropriate to assure policyholders purchase

5 the required Federal insurance coverage under

6 subparagraph (A).

7 ‘‘(3) REGULATIONS.—Pursuant to the provi8 sions of subchapter II of chapter 5 of title 5, United

9 States Code, the Director shall issue any regulations

10 necessary to carry out this subsection.’’.

11 ‘‘SEC. 802. SCOPE OF PROGRAM.

12 ‘‘(a) ELIGIBLE PROPERTIES.—In carrying out the

13 Primary Insurance Program, the Director shall make

14 multi-hazard coverage available only for residential prop15 erties that are located in earthquake and volcanic erup16 tion-prone States as determined by section 701.

17 ‘‘(b) ADDITIONAL TYPES OF PROPERTIES.—If the

18 Director makes an affirmative finding, in consultation

19 with the Federal Insurance and Reinsurance Advisory

20 Committee established pursuant to section 822, that the

21 private insurance industry cannot adequately provide cov22 erage to other types of properties, the Director may rec23 ommend to Congress that multi-hazard coverage under

24 this subtitle be made available to cover other types of

25 properties.
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1 ‘‘SEC. 803. TERMS AND LIMITATIONS OF INSURANCE

2 COVERAGE.

3 ‘‘(a) TERMS.—Pursuant to the plan of operation es4 tablished under section 821 and after consultation with

5 the Federal Insurance and Reinsurance Advisory Commit6 tee established under section 822, the Director shall estab7 lish, by regulation, the general terms and conditions of

8 insurability for properties eligible for multi-hazard cov9 erage under section 802. Such regulations shall meet the

10 requirements of this section and may include—

11 ‘‘(1) the type and locational classification of

12 such eligible properties;

13 ‘‘(2) specific insurability definitions for eligible

14 properties;

15 ‘‘(3) the specific types of damage that may be

16 covered by such insurance;

17 ‘‘(4) appropriate premium rates consistent with

18 the actuarial requirement of section 804;

19 ‘‘(5) appropriate loss-deductibles including vari20 able deductibles based on the existence of loss-reduc21 tion measures that affect the risk of loss;

22 ‘‘(6) appropriate limits on coverage for each

23 classification of eligible properties;

24 ‘‘(7) appropriate minimum coverage amounts

25 for each classification of eligible properties, which

26 may not be less than the outstanding principal bal-
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1 ance of the mortgage loan securing the property or

2 the maximum coverage limit for the property under

3 paragraph (6), whichever is less; and

4 ‘‘(8) any other terms and limitations relating to

5 such residential property insurance coverage that

6 may be necessary to carry out the purposes of this

7 subtitle.

8 ‘‘(b) HAZARDS COVERED.—The multi-hazard cov9 erage under this subtitle shall cover any damage to cov10 ered eligible property, including debris removal, additional

11 living expenses incurred as a result of direct damage to

12 the premises, and ordinance and law coverage up to the

13 policy limits set by subsection (a)(5) with additional ordi14 nance and law coverage available pursuant to the plan of

15 operation under section 821, proximately caused by—

16 ‘‘(1) an earthquake, except for any fire proxi17 mately caused by an earthquake;

18 ‘‘(2) a volcanic eruption, including any fire

19 proximately caused by a volcanic eruption; and

20 ‘‘(3) a tsunami associated with an earthquake

21 or volcanic eruption.

22 ‘‘(c) PROGRAM PARTICIPATION.—Upon the issuance

23 of regulations establishing the plan of operation under sec24 tion 821, any private insurer may participate in the Pri25 mary Insurance Program regardless of whether such pri-
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1 vate insurer provides any insurance to residential property

2 policyholders.

3 ‘‘(d) OBLIGATIONS OF PARTICIPATING INSURERS.—

4 Any private insurer electing to participate in the Primary

5 Insurance Program shall provide to all its residential prop6 erty policyholders for residential property determined to

7 be eligible under subsection (a) and located in earthquake

8 and volcanic eruption-prone States either—

9 ‘‘(1) the multi-hazard coverage under this sub10 title, or

11 ‘‘(2) coverage on its own behalf that is equiva12 lent to the multi-hazard coverage provided under

13 this subtitle at rates established for the coverage

14 under this subtitle.

15 ‘‘(e) OBLIGATIONS OF NON-PARTICIPATING INSUR16 ERS.—Any private insurer electing not to participate in

17 the Primary Insurance Program shall notify, pursuant to

18 regulations adopted by the Director, all of its residential

19 policyholders in earthquake and volcanic eruption-prone

20 States of its non-participation in such program, and of

21 the absence of insurance and reinsurance protection for

22 multi-hazard coverage under this title.

23 ‘‘SEC. 804. ACTUARIALLY SOUND RATES.

24 ‘‘(a) ESTABLISHMENT OF RATES.—The Director

25 shall from time-to-time establish and prescribe by regula-
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1 tion on a State, risk zone, or other appropriate basis, actu2 arially sound rates for types or classes of property eligible

3 for multi-hazard coverage and the terms and conditions

4 under which such rates apply.

5 ‘‘(b) CONSULTATION.—In carrying out this section,

6 the Director shall consult with the Federal Insurance and

7 Reinsurance Advisory Committee established under sec8 tion 822 and may enter into contracts, agreements, or

9 other arrangements to utilize the services of the United

10 States Geological Survey, the National Oceanic and At11 mospheric Administration, and other relevant Federal,

12 State, and local governmental agencies, and other persons.

13 ‘‘(c) CONSIDERATIONS.—The Director shall establish

14 actuarially sound rates under this section based on—

15 ‘‘(1) considerations of the risks involved, includ16 ing an examination of any of the following factors

17 which are deemed relevant—

18 ‘‘(A) the severity and frequency of earth19 quakes by seismic zone and States in which the

20 insured property is located, including known

21 differences in risks from active faults and

22 known susceptibility to landslide, site amplifi23 cation, and liquefaction;

24 ‘‘(B) the risk of damage associated with a

25 volcanic eruption by volcanic zone and States in
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1 which the insured property is located, including

2 proximity to known lava flows;

3 ‘‘(C) the risk of damage associated with a

4 tsunami caused by an earthquake or volcanic

5 eruption;

6 ‘‘(D) the value of the insured property;

7 ‘‘(E) the age of the structures located on

8 the insured property;

9 ‘‘(F) the construction type of the struc10 tures located on the insured property, including

11 woodframe, masonry, and masonry veneer;

12 ‘‘(G) the architectural type of the struc13 tures located on the insured property, including

14 soft first floor, box construction, and split level;

15 ‘‘(H) hazard mitigation measures followed

16 in the construction or subsequent retrofitting of

17 residential property structures; and

18 ‘‘(I) any other relevant criteria; and

19 ‘‘(2) application of accepted actuarial and rate20 making principles that reflect the risks involved, an21 ticipated insurance-related administrative and oper22 ating costs and loss and loss-adjustment expense

23 payments, contributions from the Self-Sustaining

24 Mitigation Fund established under section 705, and

25 provision for adequate reserves.
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1 ‘‘(d) MINIMIZATION OF CROSS-SUBSIDIZATION.—To

2 the maximum extent practicable, the rates established

3 under this section shall be actuarially sound and shall re4 sult in a minimum of cross-subsidization by reasonably re5 flecting the risk of damaging earthquakes, volcanic erup6 tions, and tsunamis, as appropriate, in total and for each

7 subclassification of policyholders.

8 ‘‘(e) ACTUARIALLY SOUND REQUIREMENT.—In set9 ting and adjusting rates under this section, the Director

10 shall provide that, over an extended period of time, ex11 pected expenditures from the Primary Insurance Program

12 Fund under section 805(c) do not exceed expected receipts

13 of the Primary Insurance Program Fund under section

14 805(b).

15 ‘‘(f) LIMITATIONS.—

16 ‘‘(1) To the maximum extent practicable, any

17 rate classification system developed by the Director

18 to establish actuarially sound rates under this sec19 tion shall be—

20 ‘‘(A) cost effective and shall not impose

21 costs for the initial establishment or the subse22 quent administration of the rating plan that are

23 disproportionate to the size of the insurance

24 premiums collected; and
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1 ‘‘(B) simple and easy to understand, iden2 tify, and use by insurance agents and policy3 holders.

4 ‘‘(2) The premiums collected under the Primary

5 Insurance Program shall not be used to establish

6 highly specific geographic rating zones and micro7 zonation maps for the earthquake, volcanic eruption,

8 and tsunami perils.

9 ‘‘SEC. 805. PRIMARY INSURANCE PROGRAM FUND.

10 ‘‘(a) ESTABLISHMENT.—There is established in the

11 Treasury of the United States the Primary Insurance Pro12 gram Fund (in this section referred to as the ‘Insurance

13 Fund’) for the purpose of carrying out the Primary Insur14 ance Program under this subtitle.

15 ‘‘(b) CREDITS OF FUND.—The Insurance Fund shall

16 be credited with—

17 ‘‘(1) insurance premiums received by the Direc18 tor under the Primary Insurance Program (less any

19 amounts credited to the Self-Sustaining Mitigation

20 Fund under section 705) and interest earned on pre21 miums, as provided in subsection (e);

22 ‘‘(2) any amounts borrowed under section 806;

23 ‘‘(3) any amounts appropriated to the Insur24 ance Fund; and
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1 ‘‘(4) any interest earned on amounts invested

2 under subsection (d).

3 ‘‘(c) USES OF FUND.—Amounts in the Insurance

4 Fund shall be available for—

5 ‘‘(1) payments for losses and loss adjustment

6 expenses under subsection (f);

7 ‘‘(2) payments for insurance company expense

8 allowances paid (including agents’ commissions,

9 State premium taxes, and companies’ administration

10 expenses);

11 ‘‘(3) any and all administrative and operating

12 expenses in carrying out the Primary Insurance Pro13 gram; and

14 ‘‘(4) principal and interest payments on

15 amounts borrowed under section 806 for supple16 mental losses, if any.

17 ‘‘(d) INVESTMENT OF AMOUNTS.—The Director may

18 request the Secretary of the Treasury to invest any

19 amount in the Primary Insurance Program Fund in obli20 gations issued or guaranteed by the United States, as the

21 Director considers appropriate.

22 ‘‘(e) INSURANCE PAYMENTS TO FUND.—Private in23 surers issuing multi-hazard coverage shall remit the pre24 miums collected, less the insurers’ expense allowances (as

25 provided for in the plan of operation under section 821),
41

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1 to the Director on a quarterly basis 30 days after the end

2 of the quarter, according to the procedures prescribed in

3 the plan of operation. Such private insurers shall maintain

4 a separate, interest-bearing account for the premiums to

5 be submitted to the Director. The interest collected on this

6 account shall be forwarded to the Insurance Fund with

7 the premiums on a quarterly basis.

8 ‘‘(f) REIMBURSEMENT OF INSURERS.—

9 ‘‘(1) REQUIREMENT AND PROCEDURE.—The

10 Director shall reimburse private insurers providing

11 multi-hazard coverage pursuant to this subtitle from

12 amounts made available from the Insurance Fund.

13 Reimbursement for all claim payments up to and in14 cluding the policy limits of coverage and for all loss

15 adjustment expenses paid as a result of an earth16 quake, volcanic eruption, or tsunami, as appropriate,

17 shall be made as follows:

18 ‘‘(A) The Director shall reimburse insurers

19 within 30 days of the date any claim payments

20 and loss adjustment expense payments are

21 made pursuant to the Federal Government’s

22 obligations.

23 ‘‘(B) If the gross reimbursements exceed

24 amounts available in the Insurance Fund,

25 amounts borrowed from the Treasury of the
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1 United States under section 806 shall cover the

2 supplemental losses.

3 ‘‘(2) REGULATIONS.—The Director may issue

4 regulations establishing the general method or meth5 ods by which proved and approved claims for losses

6 may be adjusted and paid for damages covered by

7 the multi-hazard coverage issued under this subtitle.

8 The claim practices of the Insurance Fund shall be

9 subject to and conform with any applicable State in10 surance unfair trade practices statutes. Judicial re11 view of a decision of the Director regarding reim12 bursement of a private insurer shall be available

13 pursuant to section 821(e).

14 ‘‘(g) OBLIGATIONS.—All multi-hazard coverage pro15 vided through the Primary Insurance Program under this

16 subtitle shall constitute obligations of the United States.

17 The full faith and credit of the United States is pledged

18 for the full payment and performance of such obligations.

19 The private insurers participating in the program shall

20 bear no risk and shall assume no liability for the multi21 hazard coverage provided through the program.

22 ‘‘(h) STATUS OF FUND.—Any premiums collected for

23 deposit in the Insurance Fund shall be exempt from all

24 taxation now or hereafter imposed by the United States,

25 by any territory, dependency or possession thereof, or by
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1 the State, county, municipality, or local taxing authority,

2 except that the insurance policies issued by or in conjunc3 tion with the Federal Government pursuant to this title

4 shall be subject, where applicable, to State insurance pre5 mium taxes.

6 ‘‘SEC. 806. BORROWING FROM TREASURY.

7 ‘‘(a) AUTHORITY.—To the extent that the accumu8 lated assets, including any return on investments, in the

9 Primary Insurance Program Fund established under sec10 tion 805 are insufficient to pay claims and expenses, the

11 Director shall issue, from time-to-time, to the Secretary

12 of the Treasury, notes and other obligations to cover the

13 insufficiency; except that the amounts of such obligations

14 outstanding at any one time shall not exceed such sums

15 as the Congress may provide acting upon the rec16 ommendation of the Director.

17 ‘‘(b) INTEREST RATE.—Obligations under subsection

18 (a) shall bear interest at a rate determined by the Sec19 retary of the Treasury, taking into consideration the cur20 rent average market yield on outstanding marketable obli21 gations of the United States of comparable maturities.

22 ‘‘(c) DEPOSITS.—Any amounts borrowed by the Di23 rector under this section shall be deposited in the Primary

24 Insurance Program Fund established under section 805.
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1 ‘‘(d) REPAYMENT.—Any amounts borrowed under

2 this section shall be recouped, including interest on the

3 borrowed funds, in future premiums for multi-hazard cov4 erage pursuant to the plan of operation established under

5 section 821. The Secretary of the Treasury shall grant ex6 tensions in repayment schedules that the Director advises

7 the Secretary are necessary.

8 ‘‘SEC. 807. INSURANCE MITIGATION INCENTIVES.

9 ‘‘In carrying out the Primary Insurance Program

10 under this subtitle and pursuant to the plan of operation

11 established under section 821, the Director shall provide

12 for the following insurance mitigation incentives which

13 shall conform with the actuarially sound rate requirements

14 of section 804:

15 ‘‘(1) Charging lower premiums or deductible

16 amounts for any residential property located in an

17 earthquake-prone State which meets the seismic

18 building standards under section 702(a).

19 ‘‘(2) Charging lower premium rates or deduct20 ible amounts for any residential property located in

21 an earthquake-prone State that passes a seismic

22 safety inspection and meets the requirements of the

23 seismic mitigation standards established in title VII.

24 ‘‘(3) Charging lower premium rates or deduct25 ible amounts for new residential property not con-
45

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1 structed in volcanic zones in a volcanic eruption2 prone State.

3 ‘‘Subtitle B—Reinsurance Program

4 ‘‘SEC. 811. BASIC AUTHORITY AND PROGRAM OPERATION.

5 ‘‘(a) ELIGIBILITY.—

6 ‘‘(1) PROVISION OF COVERAGE.—Upon the is7 suance of regulations establishing the plan of oper8 ation under section 821, the Director shall make

9 available to eligible entities excess reinsurance cov10 erage for any direct and indirect losses under the

11 covered lines set forth in section 813 that arise from

12 a hurricane, earthquake, volcanic eruption, or tsu13 nami.

14 ‘‘(2) ELIGIBLE ENTITIES.—The following enti15 ties are eligible to purchase the excess reinsurance

16 coverage:

17 ‘‘(A) Any private insurer participating in

18 the Primary Insurance Program under subtitle

19 A.

20 ‘‘(B) Any private reinsurer which reinsures

21 any private insurer participating in the Primary

22 Insurance Program under subtitle A.

23 ‘‘(C) Any workers’ compensation fund op24 erated by a State.
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1 ‘‘(D) Any State residual insurance pooling

2 program.

3 ‘‘(b) TERMS.—The reinsurance contracts issued by

4 the Federal Government pursuant to this subtitle shall

5 contain terms and conditions similar to those generally

6 used in private catastrophic reinsurance contracts.

7 ‘‘(c) JUDICIAL REVIEW.—Judicial review of a deci8 sion of the Director regarding payment of claims shall be

9 made available pursuant to section 821(e).

10 ‘‘(d) SINGLE ENTITIES.—Any private insurer and re11 insurer companies or United States affiliates under the

12 same ownership or management or part of the same hold13 ing company system, as determined under the plan of op14 eration established under section 821, shall be considered

15 a single entity for purposes of this subtitle.

16 ‘‘SEC. 812. LEVELS OF RETAINED LOSSES.

17 ‘‘(a) INDUSTRY-WIDE ELIGIBILITY.—Excess reinsur18 ance under this subtitle shall be available to all private

19 insurers and private reinsurers eligible for reinsurance

20 pursuant to section 811(a)(2) as follows:

21 ‘‘(1) INDUSTRY RETAINED LOSSES.—The Rein22 surance Fund established under section 815 shall

23 provide excess reinsurance when, as determined by

24 the Director pursuant to the plan of operation under

25 section 821, the insurance industry is likely to incur
47

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1 gross losses in the lines covered in section 813(a)

2 arising from hurricane, earthquake, volcanic erup3 tion, and tsunami events occurring during any 12-

4 month period that exceed 15 percent of the consoli5 dated industry surplus as regards policyholders; pro6 vided that, only such separate events which will like7 ly result in industry gross losses of at least

8 $1,500,000,000, adjusted annually in accordance

9 with the percentage change in the Consumer Price

10 Index, shall be aggregated to reach the 15-percent

11 level.

12 ‘‘(2) INDIVIDUAL COMPANY RETAINED

13 LOSSES.—After the insurance industry has sustained

14 gross losses described in paragraph (1), the Reinsur15 ance Fund established under section 815 shall pay

16 to an individual private insurer or private reinsurer

17 95 percent of qualifying losses in excess of 15 per18 cent of the consolidated surplus as regards policy19 holders of the private insurer or private reinsurer.

20 ‘‘(b) INDIVIDUAL INSURER ELIGIBILITY.—

21 ‘‘(1) INDIVIDUAL INSURER RETAINED

22 LOSSES.—If subsection (a) is not applicable, a pri23 vate insurer or private reinsurer shall be eligible for

24 excess reinsurance coverage and reimbursement from

25 the Reinsurance Fund established under section 815
48

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1 if the insurer or reinsurer has incurred gross losses

2 from a single—

3 ‘‘(A) earthquake, volcanic eruption, or tsu4 nami event that is included in the lines covered

5 in section 813(a) and that exceeds 20 percent

6 of the consolidated surplus as regards policy7 holders of the private insurer or private rein8 surer; or

9 ‘‘(B) hurricane event that is included in

10 the lines covered in section 813(a) and that ex11 ceeds 20 percent of the consolidated surplus as

12 regards policyholders of the private insurer or

13 private reinsurer, except that the workers’ com14 pensation and earthquake lines of coverage

15 under section 813(a) shall be excluded.

16 ‘‘(2) REINSURANCE FUND PAYMENTS.—After

17 the private insurer or private reinsurer has sustained

18 gross losses described in paragraph (1), the Reinsur19 ance Fund established under section 815 shall pay

20 95 percent of qualifying losses, as defined in sub21 section (d), in excess of 20 percent of the consoli22 dated surplus as regards policyholders of the private

23 insurer or the private reinsurer.

24 ‘‘(3) LIMITATION OF REINSURANCE FUND PAY25 MENTS.—The payments by the Reinsurance Fund
49

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1 under this subsection shall be limited to 200 percent

2 of the consolidated surplus as regards policyholders

3 of the private insurer or private reinsurer.

4 ‘‘(c) STATE INSURANCE PROGRAMS.—Excess rein5 surance under this subtitle shall be available to each State

6 workers’ compensation program and State residual insur7 ance pooling program eligible for reinsurance pursuant to

8 section 811(a)(2) as follows:

9 ‘‘(1) INDUSTRY LOSSES.—The Reinsurance

10 Fund established under section 815 shall provide ex11 cess reinsurance when, as determined by the Direc12 tor pursuant to the plan of operation under section

13 821, the insurance industry is likely to incur gross

14 losses in the State served by the eligible State insur15 ance program arising from hurricane, earthquake,

16 volcanic eruption, and tsunami events occurring dur17 ing any 12-month period that exceed 10 times the

18 sum of the direct earned premiums for the lines of

19 coverage described in sections 813(a) (2), (3), (4),

20 and (5) or $10,000,000,000, adjusted annually in

21 accordance with the percentage change in the

22 Consumer Price Index, whichever amount is less.

23 ‘‘(2) MINIMUM LOSSES.—Such lessor amount

24 described in paragraph (1) must equal at least
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1 $500,000,000, adjusted annually in accordance with

2 the percentage change in the Consumer Price Index.

3 ‘‘(3) RETAINED LOSSES.—After the insurance

4 industry has sustained gross losses described in

5 paragraph (1), the Reinsurance Fund established

6 under section 815 shall pay to an individual State

7 workers’ compensation program or State residual in8 surance pooling program 95 percent of qualifying

9 losses in excess of the lessor amount described in

10 paragraph (1).

11 ‘‘(d) QUALIFYING LOSSES.—For the purpose of this

12 subtitle, ‘‘qualifying losses’’ includes—

13 ‘‘(1) the losses and loss adjustment expenses in14 curred by a private insurer, private reinsurer, State

15 workers’ compensation fund, or State residual insur16 ance pooling program, and

17 ‘‘(2) any assessments, surcharges, or other li18 abilities imposed by any State residual insurance

19 pooling program or guaranty fund,

20 attributable to hurricanes, earthquakes, volcanic erup21 tions, and tsunamis occurring during any 12-month period

22 encompassing the events described in subsections (a)(1)

23 and (c)(1) or the event described in subsection (b)(1)

24 reduced by—

25 ‘‘(1) any collectible reinsurance recoverable, and
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1 ‘‘(2) an appropriate percentage of any

2 uncollectible reinsurance arising from the event as

3 set in the plan of operation to be issued by regula4 tion under section 821.

5 ‘‘(e) OBLIGATIONS.—All reinsurance contracts issued

6 under this subtitle shall constitute obligations, in accord7 ance with the terms of such reinsurance, of the United

8 States. The full faith and credit of the United States is

9 pledged for the full payment and performance of such

10 obligations.

11 ‘‘(f) DEFINITIONS.—For purposes of this subtitle:

12 ‘‘(1) The term ‘consolidated industry surplus as

13 regards policyholders’ means the consolidated sur14 plus as regards policyholders of the property and

15 casualty insurance industry (excluding life insur16 ance) for the calendar year immediately preceding

17 the hurricane, earthquake, volcanic eruption, or tsu18 nami events described in subsection (a)(1) as deter19 mined by the National Association of Insurance

20 Commissioners or other credible source and pub21 lished annually in the Federal Register by the

22 Director.

23 ‘‘(2) The term ‘consolidated surplus as regards

24 policyholders’ means the surplus as regards policy25 holders of the private insurer, private reinsurer, or
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1 group of private insurers and/or reinsurers (exclud2 ing life insurance) based on financial data submitted

3 to the National Association of Insurance Commis4 sioners or other credible source and published annu5 ally in the Federal Register by the Director for the

6 calendar year immediately preceding the hurricane,

7 earthquake, volcanic eruption, or tsunami event or

8 events described in subsections (a)(1) and (b)(1).

9 ‘‘(3) The term ‘direct earned premiums’ means

10 the direct earned premiums for certain lines of prop11 erty and casualty insurance coverage as published in

12 the National Association of Insurance Commis13 sioners Fire and Casualty Annual Statement filed

14 with the applicable State department of insurance

15 for the most recent calendar year available preceding

16 the hurricane, earthquake, volcanic eruption, or tsu17 nami events described in subsection (c)(1).

18 ‘‘(4) The term ‘gross losses’ means all losses

19 and loss adjustment expenses, prior to deducting any

20 private reinsurance recoverables.

21 ‘‘(5) The term ‘subject net written premium’

22 means direct and reinsurance premiums received by

23 private insurers and private reinsurers, less pre24 miums paid for ceded reinsurance, for all lines of

25 coverage listed in section 313(a), except the workers’
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1 compensation and earthquake lines of coverage shall

2 be excluded for the purposes of setting actuarially

3 sound rates for hurricanes.

4 ‘‘(6) The term ‘uncollectible reinsurance’ means

5 reinsurance proceeds due and payable in accordance

6 with the terms of the reinsurance contract which are

7 not paid within 12 months of the due date.

8 ‘‘SEC. 813. LINES OF INSURANCE.

9 ‘‘(a) COVERED LINES.—The Director shall provide

10 reinsurance coverage to private insurers, State workers’

11 compensation funds and State residual insurance pooling

12 programs for all of the following lines of insurance appear13 ing in the National Association of Insurance Commis14 sioners Fire and Casualty Annual Statement:

15 ‘‘(1) Fire.

16 ‘‘(2) Allied Lines.

17 ‘‘(3) Farmowners Multiple Peril.

18 ‘‘(4) Homeowners Multiple Peril.

19 ‘‘(5) Commercial Multiple Peril.

20 ‘‘(6) Ocean Marine.

21 ‘‘(7) Inland Marine.

22 ‘‘(8) Earthquake.

23 ‘‘(9) Workers’ Compensation.

24 ‘‘(10) Other Liability.

25 ‘‘(11) Products Liability.
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1 ‘‘(12) Aircraft (All Perils).

2 ‘‘(13) Glass.

3 ‘‘(14) Burglary and Theft.

4 ‘‘(15) Boiler and Machinery.

5 ‘‘(16) Reinsurance.

6 Reinsurance coverage must be purchased for all covered

7 lines of insurance and in all affected hurricane, seismic,

8 or volcanic rating zones in hurricane-prone, earthquake9 prone, or volcanic eruption-prone States with the rates for

10 such coverage set by the Director, pursuant to section

11 814.

12 ‘‘(b) OTHER LINES.—The Reinsurance Fund estab13 lished under section 815 shall provide reinsurance cov14 erage to private reinsurers for all of the lines of insurance

15 referred to in subsection (a) as well as other lines of insur16 ance appearing in the National Association of Insurance

17 Commissioners Fire and Casualty Annual Statement, as

18 determined by the Director in the plan of operation pursu19 ant to section 821 and in consultation with the Federal

20 Insurance and Reinsurance Advisory Committee estab21 lished under section 822.

22 ‘‘SEC. 814. ACTUARIALLY SOUND RATES.

23 ‘‘(a) ESTABLISHMENT.—Using generally accepted ac24 tuarial principles, the Director shall establish the rates for

25 the excess reinsurance coverage and adjust the rates when
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1 necessary. To the maximum extent practicable, such rates

2 shall be actuarially sound and shall result in a minimum

3 of cross-subsidization, consistent with the infrequency of

4 catastrophic hurricanes, earthquakes, volcanic eruptions,

5 and tsunamis. In setting and adjusting the rates, the Di6 rector shall provide that, over an extended period of time,

7 expected expenditures from the Reinsurance Fund under

8 section 815(c) do not exceed expected receipts of the Rein9 surance Fund under section 815(b).

10 ‘‘(b) CONSULTATION.—In carrying out this section,

11 the Director shall consult with the Federal Insurance and

12 Reinsurance Advisory Committee established in section

13 822 and may enter into contracts, agreements, or other

14 arrangements to utilize the services of the United States

15 Geological Survey, the National Oceanic and Atmospheric

16 Administration, and other relevant Federal, State, and

17 local governmental agencies, and other persons.

18 ‘‘(c) CONSIDERATIONS—In setting or adjusting such

19 actuarially sound rates, the Director shall provide for a

20 minimum degree of cross-subsidization among classes of

21 reinsureds by reasonably reflecting the differences in risk

22 of and vulnerability to loss from hurricanes, earthquakes,

23 and volcanic eruptions that would be subject to payment

24 from the Reinsurance Fund established under section 815,

25 by giving due consideration to the following:
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1 ‘‘(1) The premium rate volume of the reinsured

2 by line of insurance under section 813(a) by hurri3 cane, seismic, or volcanic zone or State in which the

4 risks insured or reinsured by the reinsurer are lo5 cated.

6 ‘‘(2) The proportion of the total expected

7 amount of payments for qualifying losses and loss

8 adjustment expenses by line of insurance under sec9 tion 813(a) by hurricane, seismic, or volcanic zone

10 or State expected for each reinsured.

11 ‘‘(3) The nature, scope, and adequacy of the

12 private reinsurance or retrocessional reinsurance

13 purchased by the private insurer, private reinsurer,

14 State workers’ compensation fund, or State residual

15 insurance pooling program in light of its manage16 ment expertise and the number, size, concentration,

17 and location of its risk exposures by lines of insur18 ance under section 813(a).

19 ‘‘(4) The payback of losses sustained by the Re20 insurance Fund established under section 815 due to

21 payments made to a private insurer, private rein22 surer, State workers’ compensation fund, or State

23 residual insurance pooling program.

24 ‘‘(5) The ratio between subject net written pre25 mium and consolidated surplus as regards policy-
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1 holders for each private insurer and reinsurer during

2 the most recent calendar year.

3 ‘‘(6) The nature of the risk for each private in4 surer and reinsurer insured under coverages re5 ported in the National Association of Insurance

6 Commissioners Fire and Casualty Annual Statement

7 filed with the applicable State department of insur8 ance for the most recent calendar year and covering

9 the lines of businesses listed in section 813(a).

10 ‘‘(d) LIMITATION.—Any rate classification system

11 used by the Director under this section shall be cost-effec12 tive and shall not impose costs for the initial establishment

13 or the subsequent administration of the rating plan that

14 are disproportionate to the size of the insurance premiums

15 collected.

16 ‘‘(e) QUARTERLY PAYMENT.—Premiums paid to the

17 Reinsurance Fund for reinsurance coverage under this

18 subtitle shall be paid on a quarterly basis and shall be

19 accumulated in the Reinsurance Fund, to be managed

20 pursuant to section 815.

21 ‘‘SEC. 815. REINSURANCE FUND.

22 ‘‘(a) ESTABLISHMENT.—There is established in the

23 Treasury of the United States the Reinsurance Fund for

24 the purposes of carrying out the Reinsurance Program

25 under this subtitle.
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1 ‘‘(b) CREDITS OF FUND.—The Reinsurance Fund

2 shall be credited with—

3 ‘‘(1) any reinsurance premiums received by the

4 Director under the Reinsurance Program;

5 ‘‘(2) any amounts borrowed under section 816;

6 and

7 ‘‘(3) any amounts earned under subsection (d).

8 ‘‘(c) USE OF FUND.—The Reinsurance Fund shall be

9 available to the Director for—

10 ‘‘(1) payments for qualifying losses under the

11 Reinsurance Program under this subtitle;

12 ‘‘(2) any and all administrative and operating

13 expenses in carrying out the Reinsurance Program;

14 and

15 ‘‘(3) principal and interest payments on

16 amounts borrowed from the Treasury under section

17 816, if any.

18 ‘‘(d) INVESTMENT.—The Director shall request the

19 Secretary of the Treasury to invest any amounts in the

20 Reinsurance Fund in obligations issued or guaranteed by

21 the United States, as the Director considers appropriate.

22 ‘‘(e) STATUS OF FUNDS.—Any reinsurance premiums

23 collected for deposit in the Reinsurance Fund shall be ex24 empt from all taxation now or hereafter imposed by the

25 United States, by any territory, dependency or possession
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1 thereof, or by any State, county, municipality, or local tax2 ing authority.

3 ‘‘SEC. 816. BORROWING FROM TREASURY.

4 ‘‘(a) AUTHORITY.—To the extent that the accumu5 lated assets, including any return on investments, in the

6 Reinsurance Fund are insufficient to pay claims and ex7 penses, the Director shall issue, from time-to-time, to the

8 Secretary of the Treasury, notes and other obligations to

9 cover the insufficiency; except that the amounts of such

10 obligations outstanding at any one time shall not exceed

11 such sums as the Congress may provide acting upon the

12 recommendation of the Director.

13 ‘‘(b) INTEREST RATE.—Obligations under subsection

14 (a) shall bear interest at a rate determined by the Sec15 retary of the Treasury, taking into consideration the cur16 rent average market yield on outstanding marketable obli17 gations of the United States or comparable maturities.

18 ‘‘(c) DEPOSITS.—Any amounts borrowed by the Di19 rector under this section shall be deposited in the Reinsur20 ance Fund.

21 ‘‘(d) REPAYMENT.—Any amounts borrowed pursuant

22 to this section shall be recouped, including interest on the

23 borrowed funds, in future rates for excess reinsurance cov24 erage pursuant to the plan of operation established under

25 section 821. The Secretary of the Treasury shall grant ex-
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1 tensions in repayment schedules that the Director advises

2 the Secretary are necessary.

3 ‘‘Subtitle C—Program Administration

4 ‘‘SEC. 821. PLAN OF OPERATION.

5 ‘‘(a) DEVELOPMENT.—The Director shall develop a

6 plan of operation to ensure the fair, reasonable, and equi7 table administration of the Primary Insurance Program

8 Fund established under section 805, the Reinsurance

9 Fund established under section 815, and other activities

10 under this title.

11 ‘‘(b) CONTENTS.—The plan of operation shall set

12 forth the specific policy and programmatic details for op13 erating the Primary Insurance Program created under

14 subtitle A and the Reinsurance Program created under

15 subtitle B, including all guidelines, criteria, definitions,

16 clarifications, and procedures necessary to carry out this

17 title.

18 ‘‘(c) ESTABLISHMENT.—

19 ‘‘(1) SUBMISSION OF DRAFT TO ADVISORY COM20 MITTEE.—Not later than the expiration of the 12-

21 month period beginning on the date of the enact22 ment of the Natural Disaster Protection Act of

23 1993, the Director shall submit a draft of the plan

24 of operation to the Federal Insurance and Reinsur25 ance Advisory Committee established under section
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1 822. Before issuing any regulations under paragraph

2 (2), the Director shall consider any recommenda3 tions made by such Advisory Committee regarding

4 the draft plan of operation.

5 ‘‘(2) REGULATIONS.—Not later than the expira6 tion of the 18-month period beginning on the date

7 of the enactment of the Natural Disaster Protection

8 Act of 1993, the Director shall issue final regula9 tions establishing the plan of operation under this

10 section, subject to the provisions of subchapter II of

11 chapter 5 of title 5, United States Code. In issuing

12 regulations under this paragraph, the Director shall

13 cause to be published in the Federal Register a de14 scription of any differences between the rec15 ommendations of the Federal Insurance and Rein16 surance Advisory Committee established under sec17 tion 822 and the regulations (including the guide18 lines, criteria, definitions, clarifications, and proce19 dures under the plan) developed by the Director.

20 The description shall contain, for each such dif21 ference, an explanation of why the recommendations

22 of the Federal Insurance and Reinsurance Advisory

23 Committee were not included in the proposed regula24 tions.
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1 ‘‘(3) SUBSEQUENT CHANGES.—Any future

2 changes to the plan of operation shall be made in ac3 cordance with the process described in paragraphs

4 (1) and (2).

5 ‘‘(d) ADDITIONAL REGULATIONS.—In addition to the

6 regulations establishing the plan of operation, the Director

7 may issue any regulations necessary to carry out this title,

8 pursuant to the provisions of subchapter II of chapter 5

9 of title 5, United States Code.

10 ‘‘(e) SUITS.—Any lawsuits by or against the Director

11 (or employees of the Federal Emergency Management

12 Agency) in connection with activities under this title shall

13 be brought in the district court of the United States with

14 jurisdiction over the action, except that any action by an

15 insurer or reinsurer against the Director (or employees of

16 the Federal Emergency Management Agency) shall be

17 brought in the United States District Court for the Dis18 trict of Columbia.

19 ‘‘SEC. 822. FEDERAL INSURANCE AND REINSURANCE ADVI20 SORY COMMITTEE.

21 ‘‘(a) ESTABLISHMENT.—There is established an inde22 pendent advisory committee within the executive branch

23 to be known as the Federal Insurance and Reinsurance

24 Advisory Committee (in this section referred to as the

25 Committee). To the extent not contradicted by the provi-
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1 sions of this section, the Committee shall be subject to

2 the provisions of the Federal Advisory Committee Act (5

3 U.S.C. Appendix 2). The establishment of the Committee

4 shall not result in the creation of any new permanent staff

5 or new office facilities.

6 ‘‘(b) MEMBERSHIP.—The Committee shall be com7 posed of 7 members appointed by the Director. The mem8 bers shall be chosen from among citizens of the United

9 States and shall include—

10 ‘‘(1) 1 individual who represents the interests of

11 consumers;

12 ‘‘(2) 1 individual who is a State emergency

13 planner;

14 ‘‘(3) 1 individual who is a State insurance com15 missioner;

16 ‘‘(4) 1 individual who represents the interests of

17 the private insurers;

18 ‘‘(5) 1 individual who represents the interests of

19 the private reinsurers;

20 ‘‘(6) 1 individual who represents the interests of

21 the insurance agents; and

22 ‘‘(7) 1 individual who is a professional actuary.

23 ‘‘(c) VACANCIES.—A vacancy in the Commission shall

24 be filled in the manner in which the original appointment

25 was made.
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1 ‘‘(d) CHAIRPERSON.—The Director shall designate a

2 chairperson of the Committee from among members se3 lected for appointment to the Committee.

4 ‘‘(e) SELECTION.—Not later than 180 days after the

5 date of the enactment of the Natural Disaster Protection

6 Act of 1993 and after consulting with the insurance indus7 try and the State and local emergency management com8 munity, the Director shall appoint the members of the

9 Committee.

10 ‘‘(f) FUNCTIONS OF THE COMMITTEE.—The Com11 mittee shall review the draft plan of operation established

12 under section 821. Within 120 days after receiving the

13 draft plan of operation, the Committee shall submit to the

14 Director written comments and recommendations for any

15 changes to the plan. After regulations establishing the

16 plan of operation have been issued, the committee shall

17 submit a written report not less than once every 180 days

18 to the Director and the Congress evaluating the operation

19 of the Federal insurance programs established under this

20 title and making recommendations for any actions relating

21 to such programs. The Committee shall provide counsel

22 to the Director regarding actuarial and insurance related

23 services pursuant to sections 804(b) and 814(b). The

24 Committee shall respond as soon as practicable to all re-
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1 quests of the Director made pursuant to subsection (g)

2 or section 821(c).

3 ‘‘(g) RESPONSIBILITIES OF THE DIRECTOR.—The

4 Director shall fully cooperate with the Committee and pro5 vide the Committee with access to personnel and informa6 tion as the Committee considers necessary to carry out

7 its functions. The Director shall request comments from

8 the Committee on any questions regarding operation of

9 the Federal insurance programs established under this

10 title.’’.

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