are composed predominantly of residential rental units. 
The Secretary shall consider the catastrophic insurance 
and reinsurance market for commercial residential prop-
erties, and specifically the availability of adequate private 
insurance coverage when an insured event occurs, the im-
pact any such capacity restrictions have on housing afford-
ability for renters, and the likelihood that such an expan-
sion of the program 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; 
(2) rates for State insurance, reinsurance, or 
residual market programs that fail to cover the ex-
pected value of all future costs, including the cost of 
capital, associated with insurance policies or reinsur-
ance contracts written by such programs or fail to 
have sufficient assets above their indebtedness to 
meet their obligations; and 
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(3) any financial complications arising for pol-
icyholders resulting from increased policy costs. 
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 sec-
tion. 
SEC. 504. DEFINITIONS. 
In this Act: 
(1) COMMITMENT TO GUARANTEE.—The term 
‘‘commitment to guarantee’’ means a commitment to 
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 re-
insurance made available under that eligible State 
program. 
(4) QUALIFYING
ASSETS.—The term ‘‘quali-
fying assets’’ means the policyholder surplus of the 
eligible State program as stated in the most recent 
quarterly financial statement filed by the program 
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with the domiciliary regulator of the program in the 
last quarter 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 
several States, the District of Columbia, the Com-
monwealth of Puerto Rico, Guam, the Common-
wealth of the Northern Mariana Islands, the United 
States Virgin Islands, and American Samoa, and 
any other territory or possession of the United 
States. 
SEC. 505. REGULATIONS. 
The Secretary shall issue such regulations as may be 
necessary to carry out this Act. 
Æ 
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