1 or more insurers having lines of property insur-
ance in the State reinsured under this part and 1 or
more insurers with or without such reinsurance, un-
less the surviving company—
‘‘(A) meets the criteria of eligibility for re-
insurance; and
‘‘(B) within 10 days pays any reinsurance
premiums due; or
‘‘(2) after receipt by the Director of written no-
tice from the insurer or pool that it is canceling its
reinsurance agreement with the Director in the
State.
‘‘(f) CONTINUANCE
OF
EXISTING
REINSURANCE
POLICIES.—Notwithstanding any other provision of this
section, reinsurance pursuant to a policy written before
the date of termination or nonrenewal of reinsurance
under this section may be continued for the term of the
policy, for such time as the insurer annually pays reinsur-
ance premiums in such amounts as are established under
section 1223, based on the annual premiums earned on
such reinsured policies. For purposes of this subsection,
any policy renewed, extended, modified, or otherwise
changed, for which any additional premium is charged for
such change, shall be considered to be a policy written on
the date such change was made.
‘‘SEC. 1223. REINSURANCE AGREEMENTS, PREMIUMS, AND
RETAINED LOSSES.
‘‘(a) IN
GENERAL.—Reinsurance made available
under this part shall reimburse an insurer or pool for its
total proved and approved claims for covered physical loss
of property or damage to property during the term of the
reinsurance agreement under subsection (b) for the in-
surer or pool (and all direct expenses incurred in connec-
tion therewith, including expenses for processing, verify-
ing, and paying such claims) that are in excess of such
losses retained by the insurer or pool in accordance with
the regulations issued under subsection (d) and the rein-
surance agreement.
‘‘(b) REINSURANCE AGREEMENTS.—Such reinsur-
ance shall be made available pursuant to a reinsurance
agreement, which shall be a contract, agreement, treaty,
or other arrangement for reinsurance coverage entered
into by the Director with an insurer or pool, in consider-
ation of payment of premiums, fees, or other charges by
the insurer or pool.
‘‘(c) PREMIUMS.—The Director shall, by regulation,
establish the amount of premiums, fees, or other charges
to be charged under a reinsurance agreement, which shall
be the amount determined by the Director to be necessary
to cover the estimated amount of losses and other costs
of providing such reinsurance. The rates of the premiums,
fees, and other charges shall be established based upon
generally accepted actuarial principles and shall provide
for a minimum of cross-subsidization among classifica-
tions of reinsurance. In any single year, the rates under
contracts with insurers or pools throughout the States
shall be uniform. The Director may not change any pre-
miums, fees, or other charges except by regulations issued
in accordance with section 1247.
‘‘(d) RETAINED LOSSES.—The Director shall, by reg-
ulation, establish the amount of losses that, under each
reinsurance agreement, an insurer or pool shall retain be-
fore reinsurance coverage under this part applies to losses
of the insurer or pool. Such amount shall be adequate to
further the purposes of this part and consistent with the
objective of maintaining appropriate financial participa-
tion and risk sharing to the maximum extent practicable
on the part of ceding insurers and pools. In establishing
such amount the Director shall consult with the Advisory
Board.
‘‘(e) OTHER PROVISIONS.—Each reinsurance agree-
ment shall include terms and conditions similar to those
generally used in private catastrophe reinsurance con-
tracts, as the Director considers necessary or appropriate
to carry out the purposes of this part, and such other
terms and conditions as the Director considers necessary
or appropriate. Each reinsurance agreement shall provide
that any approved reinsurance claims payable under this
part shall be reduced by the amount of any reinsurance
collectible from sources other than the reinsurance pro-
gram under this part. In any single year, the terms and
conditions under reinsurance contracts with insurers or
pools throughout the States shall be uniform. The provi-
sions of section 1341(a) of title 31, United States Code,
shall not apply to reinsurance agreements under this sec-
tion.
‘‘(f) CONTRACT TERM.—Each reinsurance agreement
shall be for a 12-month term expiring on September 30.
‘‘SEC. 1224. SUITS FOR RECOVERY OF PREMIUMS.
‘‘(a) IN GENERAL.—The Director may bring a suit
in the appropriate United States district court to recover
from any insurer the amount of any unpaid premiums for
reinsurance under this part lawfully payable by such in-
surer to the Director.
‘‘(b) STATUTE OF LIMITATIONS.—
‘‘(1) IN
GENERAL.—No action or proceeding
shall be brought under subsection (a) or for the re-
covery of any premium paid to the Director in excess
of the amount due to the Director, after the expira-
tion of the 5-year period beginning upon the accrual
of the right for which the claim is made.
‘‘(2) FRAUD.—Where an insurer has made or
filed with the Director a false or fraudulent annual
statement or other document with the intent to
evade, in whole or in part, the payment of pre-
miums, a right for which a claim may be made shall
not be considered to have accrued for purposes of
this subsection until its discovery by the Director.
‘‘SEC. 1225. NATIONAL PROPERTY REINSURANCE FUND.
‘‘(a) ESTABLISHMENT.—To carry out the national
property reinsurance program under this part, the Direc-
tor shall establish in the Treasury of the United States
a fund to be known as the National Property Reinsurance
Fund (in this section referred to as the ‘‘Fund’’), which
shall be separate from the National Insurance Develop-
ment Fund established under section 1243. Amounts in
the Fund shall be available, to the extent provided in ap-
propriation Acts—
‘‘(1) to make such payments as may, from time
to time, be required under reinsurance contracts
under this part;
‘‘(2) to pay such administrative expenses as
may be necessary or appropriate to carry out this
part; and
‘‘(3) to repay to the Secretary of the Treasury
any amounts, including interest thereon, as may be
borrowed for the Secretary under section 520(b) for
purposes of the national property reinsurance pro-
gram under this part.
‘‘(b) CREDITS.—The Fund shall be credited with—
‘‘(1) reinsurance premiums, fees, and other
charges paid or collected in connection with reinsur-
ance provided under this part;
‘‘(2) any amounts appropriated for the Fund;
‘‘(3) interest earned on the investments of the
Fund pursuant to subsection (c); and
‘‘(4) amounts borrowed by the Director under
section 520(b) and deposited in the Fund.
‘‘(c) INVESTMENT.—If the Director determines that
the amounts in the Fund are in excess of amounts needed
to carry out the national property reinsurance program
under this part, the Director may request the Secretary
of the Treasury to invest any excess amounts the Director
determines advisable in obligations issued or guaranteed
by the United States.
‘‘(d) BUDGET.—An annual business-type budget for
the Fund shall be prepared, submitted to the Congress,
considered, and acted upon in the manner prescribed by
sections 9103 and 9104 of title 31, United States Code,
for wholly owned Government corporations.