I
103D CONGRESS
1ST SESSION
H. R. 935
To provide for a Federal program of insurance against the risk of catastrophic
earthquakes, volcanic eruptions, and hurricanes, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 17, 1993
Mrs. MINK introduced the following bill; which was referred jointly to the
Committees on Banking, Finance and Urban Affairs and Science, Space,
and Technology
MAY 13, 1993
Additional sponsors: Mr. HASTINGS, Mr. RANGEL, Mr. MCCOLLUM, Mr.
MCDERMOTT, Mr. MILLER Of California, and Mr. JEFFERSON
A BILL
To provide for a Federal program of insurance against the
risk of catastrophic earthquakes, volcanic eruptions, and
hurricanes, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act shall be cited as the
‘‘Earthquake, Volcanic Eruption, and Hurricane Hazards
Insurance Act of 1993’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
TITLE I—PARTICIPATION BY STATES IN ADOPTION OF HAZARD
REDUCTION MEASURES
Sec. 101. Identification of earthquake-prone, volcanic eruption-prone, and hur-
ricane-prone States.
Sec. 102. Earthquake, Volcanic Eruption, and Hurricane Loss Mitigation Advi-
sory Committee.
Sec. 103. Establishment of criteria for loss-reduction measures.
Sec. 104. Self-Sustaining Mitigation Fund.
Sec. 105. State implementation of loss-reduction measures.
Sec. 106. Requirement to purchase primary insurance.
Sec. 107. Effect of noncompliance with State mitigation program.
Sec. 108. Coordination with other programs.
Sec. 109. Report to Congress.
Sec. 110. Regulations.
TITLE II—PRIMARY INSURANCE PROGRAM
Sec. 201. Basic authority and program organization.
Sec. 202. Scope of program.
Sec. 203. Terms and limitations of insurance coverage.
Sec. 204. Establishment of actuarial premium rates.
Sec. 205. Chargeable premium rates.
Sec. 206. Insurance mitigation incentives.
Sec. 207. Earthquake, Volcanic Eruption, and Hurricane Insurance and Rein-
surance Advisory Committee.
Sec. 208. Residential Property Insurance Fund.
Sec. 209. Borrowing from Treasury.
TITLE III—NATIONAL EARTHQUAKE, VOLCANIC ERUPTION, AND
HURRICANE EXCESS LOSS REINSURANCE PROGRAM
Sec. 301. Reinsurance program.
Sec. 302. Lines of insurance.
Sec. 303. Rates.
Sec. 304. Reinsurance contracts.
Sec. 305. Reinsurance Fund.
Sec. 306. Borrowing from Treasury.
SEC. 2. FINDINGS.
The Congress finds that—
(1) the catastrophic and unpredictable nature
of earthquakes, volcanic eruptions, and hurricanes
prevent individual private insurers from offering the
necessary insurance against these perils without the
participation of the Federal Government;
(2) in the absence of an adequate system for in-
suring against losses from earthquakes, volcanic
eruptions, and hurricanes, the Federal Government
and State governments will bear excessive and avoid-
able costs of disaster relief and the commerce and
economy of the Nation would be seriously desta-
bilized;
(3) the existing systems of private insurance,
reinsurance, and government disaster relief are inad-
equate and should be improved and better coordi-
nated;
(4) a reasonable method of providing insurance
against such losses is to create a Federal earth-
quake, volcanic eruption, and hurricane insurance
and reinsurance program, to assist in making insur-
ance against such disasters widely available and af-
fordable to the general public; and
(5) in providing such insurance, the Federal
Government should work constructively with the
States and localities to assist and require, if appro-
priate, the development, adoption, and enforcement
of hazard reduction measures, including building
codes, land-use planning, and strengthening of new
and existing structures.
SEC. 3. DEFINITIONS.
For purposes of this Act:
(1) The term ‘‘additional losses’’ means claim
and loss adjustment expense payments for earth-
quake, volcanic eruption, and hurricane coverage is-
sued pursuant to title II that exceed the accumu-
lated amounts in the Residential Property Insurance
Fund.
(2) The term ‘‘alien insurer’’ means an insurer
or reinsurer organized or incorporated in a country
other than the United States.
(3) The term ‘‘critical facilities vulnerable to
hurricanes’’ means schools and structures essential
to emergency services necessary for post hurricane
recovery (including hospitals, fire and policy facili-
ties, temporary shelters, and emergency operating
and preparedness centers) that—
(A) have unreinforced masonry bearing
walls, tilt-up construction, nonductile concrete
frame construction, or other construction, as
determined by the Director, that makes them
susceptible to damage from hurricanes; and
(B) are located in hurricane zones within
hurricane-prone States.
(4) The term ‘‘Director’’ means the Director of
the Federal Emergency Management Agency.
(5) The term ‘‘earthquake’’ means any shaking
or trembling of the crust of the earth caused by un-
derground seismic forces or by breaking and shifting
of rock beneath the surface.
(6) The term ‘‘earthquake, volcanic eruption,
and hurricane coverage’’ means insurance issued
pursuant to title II.
(7) The term ‘‘earthquake-prone State’’ means
a State determined by the Director pursuant to sec-
tion 101 to have an exposure to the earthquake
peril.
(8) The term ‘‘Federal agency’’ means any de-
partment, agency, corporation, or other instrumen-
tality of the executive branch of the Federal Govern-
ment, and includes the Federal National Mortgage
Association and the Federal Home Loan Mortgage
Corporation.
(9) The term ‘‘federally related mortgage loan’’
has the meaning given the term in section 3(1) of
the Real Estate Settlement Procedures Act of 1974,
except that the term does not include any loan de-
scribed in subparagraph (B)(iv) of such section.
(10) The term ‘‘fires associated with an earth-
quake’’ means any fire proximately caused by an
earthquake.
(11) The term ‘‘fires associated with a volcanic
eruption’’ means any fire proximately caused by a
volcanic eruption.
(12) The term ‘‘hurricane-prone State’’ means
a State determined by the Director pursuant to sec-
tion 101 to have an exposure to hurricane peril.
(13) The term ‘‘hurricane zone’’ means an area
within a State identified and classified by the Direc-
tor under section 101(a) as subject to major hurri-
cane risk.
(14) The term ‘‘Insurance and Reinsurance Ad-
visory Committee’’ means the Earthquake, Volcanic
Eruption, and Hurricane Insurance and Reinsurance
Advisory Committee established under section 207.
(15) The term ‘‘Insurance Fund’’ means the
Residential Property Insurance Fund established
under section 208.
(16) The term ‘‘insurance industry’’ means all
private insurers and private reinsurers.
(17) The term ‘‘large building’’ means any
nonresidential structure that has more than 1 story
or more than 5,000 square feet per story.
(18) The term ‘‘Loss Mitigation Advisory Com-
mittee’’ means the Earthquake, Volcanic Eruption,
and Hurricane Loss Mitigation Advisory Committee
established under section 102.
(19) The term ‘‘loss-reduction criteria’’ means
the criteria for earthquake, volcanic eruption, and
hurricane loss mitigation established by the Director
under section 103.
(20) the term ‘‘Primary Insurance Program’’
means the national earthquake, volcanic eruption,
and hurricane insurance program under title II.
(21) The terms ‘‘private insurer’’ and ‘‘private
reinsurer’’ mean any insurer or reinsurer that is (A)
licensed or admitted to write property and casualty
insurance or reinsurance within a State, or (B) is a
branch of an alien insurer or reinsurer that is en-
tered through and licensed by a State to conduct in-
surance or reinsurance business. In the case of an
insurance exchange or group of unincorporated un-
derwriters, the term means an underwriting syn-
dicate, notwithstanding the licensed or admitted sta-