tracts written by such program, in accordance 
with the principles under section 303(g); 
(C) shall make available to all qualifying 
policyholders insurance or reinsurance coverage, 
as applicable, and mitigation services on a basis 
that is not unfairly discriminatory; and 
(D) publishes, and displays in a prominent 
location on a Website for the State insurance 
program, information for the State insurance 
program of estimated assessments and surcharges 
on policyholders, in accordance with State laws, 
regulations, or other requirements, for a range of 
natural disaster or catastrophic events having a 
varying magnitude of losses, including an event 
projected to result in losses of such magnitude 
that they have a 1 percent chance of being 
equaled or exceeded in any single year, based on 
the current year estimated aggregate funding ca-
pacity of the State insurance program and State 
reinsurance program. 
(7) LAND
USE
AND
ZONING.—The State pro-
gram, to the extent possible, seeks to encourage appro-
priate State and local government units to develop 
comprehensive land use and zoning plans that include 
natural hazard mitigation. 
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(8) RISK-BASED CAPITAL REQUIREMENTS.—The 
State program— 
(A) complies with such risk-based capital 
requirements as applicable State law may im-
pose and shall take into consideration asset risk, 
credit risk, underwriting risk, and such other 
relevant risk as determined by the Secretary; and 
(B) for each calendar year, prepares and 
submits to the Secretary a report identifying its 
claim-paying capacity at such time after the 
conclusion of such year, and containing such in-
formation and in such form, as the Secretary 
shall require. 
(9) OTHER REQUIREMENTS.—The State program 
complies with such additional organizational, under-
writing, and financial requirements as the Secretary 
shall, by regulation, provide to carry out the purposes 
of this Act. 
(b) CERTIFICATION.—The Secretary shall establish 
procedures for initial certification and recertification as an 
eligible State program. 
(c) TRANSITIONAL MECHANISMS.—For the 5-year pe-
riod beginning on the date of the enactment of this Act, 
in the case of a State that does not have an eligible State 
program for the State, a State residual insurance market 
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entity, or State-sponsored provider of natural catastrophe 
insurance, for such State shall be considered to be an eligi-
ble State program, but only if such State residual insurance 
market entity, or State-sponsored provider of natural catas-
trophe insurance, was in existence before such date of enact-
ment. 
(d) REINSURANCE TO COVER EXPOSURE.—This sec-
tion may not be construed to limit or prevent any eligible 
State program from obtaining reinsurance coverage for in-
sured losses retained by insurers pursuant to this section. 
SEC. 502. STUDY AND CONDITIONAL COVERAGE OF COM-
MERCIAL RESIDENTIAL LINES OF INSUR-
ANCE. 
The Secretary shall study, on an expedited basis, the 
need for and impact of expanding the programs established 
by this Act to apply to insured losses of eligible State pro-
grams for losses arising from all commercial insurance poli-
cies which provide coverage for properties that are composed 
predominantly of residential rental units. The Secretary 
shall consider the catastrophic insurance and reinsurance 
market for commercial residential properties, and specifi-
cally the availability of adequate private insurance cov-
erage when an insured event occurs, the impact any such 
capacity restrictions have on housing affordability for rent-
ers, and the likelihood that such an expansion of the pro-
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gram would increase insurance capacity for this market 
segment. 
SEC. 503. STUDY OF RISK-BASED PRICING AND STATE PRO-
GRAM RATES. 
The Comptroller General of the United States shall 
conduct a study to analyze— 
(1) risk-based rate pricing, to determine the use 
of actuarially sound pricing for State insurance, re-
insurance, or residual market programs, including 
what measures States are taking to implement actu-
arially sound rates; and 
(2) rates for State insurance, reinsurance, or re-
sidual market programs that fail to cover the expected 
value of all future costs, including the cost of capital, 
associated with insurance policies or reinsurance con-
tracts written by such programs or fail to have suffi-
cient assets above their indebtedness to meet their ob-
ligations. 
Not later than 6 months after the date of the enactment 
of this Act, the Comptroller General shall submit a report 
to the Congress on the results of the study under this section. 
SEC. 504. DEFINITIONS. 
In this Act: 
(1) COMMITMENT
TO
GUARANTEE.—The term 
‘‘commitment to guarantee’’ means a commitment to 
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make debt guarantees to an eligible State program 
pursuant to section 202(c). 
(2) ELIGIBLE STATE PROGRAM.—The term ‘‘eli-
gible State program’’ means a State program that the 
Secretary certifies as an eligible State program under 
section 501. 
(3) INSURED
LOSS.—The term ‘‘insured loss’’ 
means any loss that is determined by an eligible 
State program as being covered by insurance or rein-
surance made available under that eligible State pro-
gram. 
(4) QUALIFYING ASSETS.—The term ‘‘qualifying 
assets’’ means the policyholder surplus of the eligible 
State program as stated in the most recent quarterly 
financial statement filed by the program with the 
domiciliary regulator of the program in the last quar-
ter ending prior to the event or events. 
(5) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury. 
(6) STATE.—The term ‘‘State’’ includes the sev-
eral States, the District of Columbia, the Common-
wealth of Puerto Rico, Guam, the Commonwealth of 
the Northern Mariana Islands, the United States Vir-
gin Islands, and American Samoa, and any other ter-
ritory or possession of the United States. 
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SEC. 505. REGULATIONS. 
The Secretary shall issue such regulations as may be 
necessary to carry out this Act. 
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Union Calendar No. 306 
111TH CONGRESS 
2D SESSION 
H. R. 2555 
[Report No. 111–534] 
A BILL 
To ensure the availability and affordability of 
homeowners’ insurance coverage for catastrophic 
events. 
JULY 13, 2010 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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