takes into account measures to mitigate in-
surance losses; and
(viii) the State program complies with
such other requirements that the Secretary
considers necessary to carry out the pur-
poses of this Act.
(b) TERMS OF CONTRACTS.—Each contract under
this section for reinsurance coverage under this Act shall
be subject to the following terms and conditions:
(1) MATURITY.—The term of the contract shall
not exceed 1 year.
(2) PAYMENT CONDITION.—The contract shall
authorize claims payments for eligible losses only to
the eligible State program purchasing the coverage.
(3) RETAINED
LOSSES
REQUIREMENT.—The
contract shall pay eligible losses only if the total
amount of insurance claims for losses, which are
covered by qualified lines, occur to properties located
within the State covered by the contract, and result
from a single event of a covered peril, exceeds the
amount of retained losses provided under the con-
tract (pursuant to section 8(a)) purchased by the eli-
gible State program.
(4) MULTIPLE
EVENTS.—The contract shall
cover any eligible losses from one or more covered
events that may occur during the term of the con-
tract.
(5) TIMING
OF
ELIGIBLE
LOSSES.—Eligible
losses under the contract shall include only insur-
ance claims for property covered by qualified lines
that are reported to the eligible State program with-
in the 3-year period beginning upon the event or
events for which payment under the contract is
made.
(6) PRICING.—
(A) DETERMINATION.—The cost of rein-
surance coverage under the contract shall be an
amount established by the Secretary as follows:
(i) RECOMMENDATIONS.—The Sec-
retary shall take into consideration the rec-
ommendations of the Commission in estab-
lishing the cost, but the cost may not be
less than the amount recommended by the
Commission.
(ii) FAIRNESS
TO
TAXPAYERS.—The
cost shall be established at a level that is
designed to return to the Federal Govern-
ment fair compensation for the risks being
borne by the people of the United States
and that takes into consideration the devel-
opmental stage of empirical models of nat-
ural disasters and the capacity of private
markets to absorb insured losses from nat-
ural disasters.
(iii) SELF-SUFFICIENCY.—The rates
for reinsurance coverage shall be estab-
lished at a level that annually produces ex-
pected premiums which shall be sufficient
to pay the annualized cost of all claims,
loss adjustment expenses, and all adminis-
trative costs of reinsurance coverage of-
fered under this section.
(B) COMPONENTS.—The cost shall consist
of the following components:
(i) RISK-BASED PRICE.—A risk-based
price, which shall reflect the anticipated
annualized payout of the contract accord-
ing to the actuarial analysis and rec-
ommendations of the Commission.
(ii) RISK LOAD.—A risk load in an
amount that is not less than the risk-based
price under clause (i).
(iii) ADMINISTRATIVE COSTS.—A sum
sufficient to provide for the operation of
the Commission and the administrative ex-
penses incurred by the Secretary in carry-
ing out this Act.
(7) REPAYMENT
TERMS.—The contract shall
include a condition that requires that, in the event
that a covered purchaser receives payments for
qualifying claims that consist of amounts derived
from obligations issued under section 9(d), such cov-
ered purchaser shall continue to purchase the rein-
surance coverage provided under this Act, in
amounts that are at least as great as those imme-
diately before the Fund was credited with amounts
borrowed under section 9(d), until such borrowed
moneys, including interest, are repaid pursuant to
section 9(d)(5)(B).
(8) INFORMATION.—The contract shall contain
a condition providing that the Commission may re-
quire the State program that is covered to submit to
the Commission all information on the State pro-
gram relevant to the duties of the Commission, as
determined by the Secretary.
(9) EXHAUSTION OF COVERAGE.—
(A) IN
GENERAL.—Each contract shall
provide that, if during the term of the contract
the coverage under the contract is exhausted
because of payment for losses from a covered
event, the covered purchaser shall, during the
15-day period beginning upon the covered event
that causes exhaustion of the coverage under
the original contract, have an option to make
a single purchase of similar coverage for the re-
maining term of the contract under terms and
conditions similar to the original contract, but
reflecting a new loss cost estimate and at a cost
prorated based upon the remaining term.
(B) DISCRETION.—To facilitate making
available contracts pursuant to the exercise of
options under subparagraph (A), the Secretary
may make—
(i) any estimates and determinations
that may be necessary regarding whether
coverage under a contract is exhausted and
the amount of losses retained by a State
program;
(ii) any estimates and assumptions
necessary to establish the price, terms, and
conditions of a contract provided pursuant
to such an option; and
(iii) any subsequent adjustments to a
contract provided pursuant to the exercise
of such an option (including cancellation of
the contract) to conform the price, terms,
and conditions in accordance with findings
by the Secretary regarding issues pre-
viously estimated and assumed by the Sec-
retary pursuant to clause (ii).
(10) OTHERS.—The contract shall contain such
other terms as the Secretary considers necessary to
carry out this Act and to ensure the long-term fi-
nancial integrity of the program under this Act.
(c) PRICE GOUGING PROTECTIONS.—Notwithstand-
ing any other provision of this section, a State-operated
program that otherwise meets the requirements of this
section shall be eligible to purchase a contract under this
section for reinsurance coverage made available under this
Act only if the Secretary determines that there are in ef-
fect, in such State, laws or regulations sufficient to pro-
hibit price gouging, during the term of such reinsurance
coverage, in any disaster area located within the State.
SEC. 7. AUCTION OF CONTRACTS FOR REINSURANCE COV-
ERAGE.
(a) AUCTION PROGRAM REQUIREMENTS.—The Sec-
retary shall carry out a program to auction contracts for
reinsurance coverage under this Act made available pursu-
ant to section 3(a)(2), which shall comply with the follow-
ing requirements:
(B) RISK
LOAD.—A risk load in an
amount that is not less than the risk-based
price under subparagraph (A).
(C) ADMINISTRATIVE COSTS.—A sum suf-
ficient to provide for the operation of the Com-
mission and the administrative expenses in-
curred by the Secretary in carrying out this sec-
tion.
(D) MITIGATION.—An adjustment that
takes into account any efforts that are being
made to reduce losses to property in the region
in which the contract is being sold.
(4) OTHER
REQUIREMENTS.—The Secretary
may establish such other requirements for the auc-
tion program as the Secretary considers necessary to
carry out this Act.
(b) CONTRACT TERMS AND CONDITIONS.—Each con-
tract for reinsurance coverage auctioned under the pro-
gram under this section shall include the following terms
and conditions:
(1) MATURITY.—The term of each such con-
tract shall not exceed 1 year.
(2) TRANSFERABILITY.—The contract shall at
all times be fully transferable, assignable, and divis-
ible.
(3) MULTIPLE
EVENTS.—The contract shall
contain the provisions described in section 6(b)(4).
(4) THRESHOLD OF COVERAGE.—Each contract
auctioned in a region established under subsection
(a)(2) shall provide that the covered purchaser may
receive a payment for losses covered under the con-
tract if, under a process specified in the contract,
the Secretary determines that the insurance industry
will, as a result of a single event of a covered peril,
incur losses within the coverage area for such region
that are covered by one or more lines of insurance
under section 5 in an aggregate amount, for such
event, greater than the level of retained losses speci-
fied in section 8.
(5) EXHAUSTION
OF
COVERAGE.—Each con-
tract shall contain the provisions described in section
6(b)(9).
(6) OTHERS.—The contract shall contain such
other terms as the Secretary considers necessary to
carry out this Act and to ensure the long-term fi-
nancial integrity of the program under this Act.
(c) PRICE GOUGING PROTECTIONS.—Notwithstand-
ing any other provision of this section, a contract for rein-
surance auctioned under this section shall provide reinsur-
ance coverage only for losses incurred for property located
in a State for which the Secretary of the Treasury has
determined that there are in effect, in such State, laws
or regulations sufficient to prohibit price gouging, during
the term of such reinsurance coverage, in any disaster
area located within the State.
SEC. 8. MINIMUM LEVEL OF RETAINED LOSSES AND MAXI-
MUM FEDERAL LIABILITY.
(a) AVAILABLE LEVELS OF RETAINED LOSSES.—In
making reinsurance coverage available under this Act, the
Secretary shall make available for purchase contracts for
such coverage that require the sustainment of retained
losses from a single event of a covered peril (as required
under sections 6(b)(3) and 7(b)(4) for payment of eligible
losses) in various amounts, as the Secretary determines
appropriate and subject to the requirements under sub-
section (b).
(b) MINIMUM LEVEL OF RETAINED LOSSES.—
(1) CONTRACTS FOR STATE PROGRAMS.—Sub-
ject to paragraph (3) and notwithstanding any other
provision of this Act, a contract for reinsurance cov-
erage under section 6 for an eligible State program
that offers insurance or reinsurance coverage de-
scribed in subparagraph (A) or (B), respectively, of
section 6(a)(1) may not be made available or sold
unless the contract requires retained losses from a
single event of a covered peril in the following
amount:
(A) IN
GENERAL.—The State program
shall sustain an amount of retained losses of
not less than the greater of—
(i) $2,000,000,000;
(ii) the claims-paying capacity of the
eligible State program, as determined by
the Secretary; and
(iii) an amount, determined by the
Secretary in consultation with the Commis-
sion which is sufficient to cover eligible
losses in the State during a 12-month pe-
riod for all events having a likelihood of oc-
currence of once every 100 years.
(B) TRANSITION
RULE
FOR
EXISTING
STATE PROGRAMS.—
(i) CLAIMS-PAYING
CAPACITY.—Sub-
ject to clause (ii), in the case of any eligi-
ble State program that was offering insur-
ance or reinsurance coverage on the date
of the enactment of this Act and the
claims-paying capacity of which is greater
than $2,000,000,000 but less than an
amount determined for the State under
subparagraph (A)(iii), the minimum level
of retained losses applicable under this
paragraph shall be the claims-paying ca-
pacity of such State program.
(ii) AGREEMENT.—Clause (i) shall
apply to a State program only if the State
program enters into a written agreement
with the Secretary that shall provide a
schedule for increasing the claims-paying
capacity of the State program to the
amount determined sufficient by the Sec-
retary under subparagraph (A)(iii) of this
subsection over a period not to exceed 5
years. The Secretary may extend the 5-
year period for not more than 2 additional
one-year periods if the Secretary deter-
mines that losses incurred by the State
program as a result of covered perils create
excessive hardship on the State program.
The Secretary shall consult with the appro-
priate officials of the State program re-
garding the required schedule and any po-
tential one-year extensions.
(C) TRANSITION
RULE
FOR
NEW
STATE
PROGRAMS.—
(i) 100-YEAR EVENT.—The Secretary
may provide that, in the case of an eligible
State program that, after January 1,
1999, commences offering insurance or re-
insurance coverage, during the 5-year pe-
riod beginning on the date that reinsur-
ance coverage under section 6 is first made
available, the minimum level of retained
losses applicable under this paragraph
shall be the amount determined for the
State under subparagraph (A)(iii), except
that such minimum level shall be adjusted
annually as provided in clause (ii) of this
subparagraph.
(ii) ANNUAL ADJUSTMENT.—Each an-
nual adjustment under this clause shall in-
crease the minimum level of retained losses
applicable under this subparagraph to an
eligible State program described in clause
(i) in a manner such that—
(I) during the course of such 5-
year period, the applicable minimum
level of retained losses approaches the
minimum level that, under subpara-
graph (A), will apply to the eligible
State program upon the expiration of
such period; and
(II) each such annual increase is
a substantially similar amount, to the
extent practicable.
(D) REDUCTION
BECAUSE
OF
REDUCED
CLAIMS-PAYING CAPACITY.—
(i) 
AUTHORITY.—Notwithstanding
subparagraphs (A), (B), and (C) or the
terms contained in a contract for reinsur-
ance pursuant to such subparagraphs, if
the Secretary determines that the claims-
paying capacity of an eligible State pro-
gram has been reduced because of payment
for losses due to an event, the Secretary
may reduce the minimum level of retained
losses for the State commensurate with the
current capacity of the State program, as
determined by the Secretary, but in no
case may such minimum level be less than
$2,000,000,000.
(ii) TERM
OF
REDUCTION.—If the
minimum level of retained losses for an eli-
gible State program is reduced pursuant to
clause (i), upon the expiration of the 5-
year period beginning upon such reduction
the minimum level of retained losses appli-
cable to such State program under a con-
tract for reinsurance coverage under sec-
tion 6 shall be increased to an amount not
less than the amount applicable to such
State program immediately before such re-
duction.
(E) CLAIMS-PAYING CAPACITY.—For pur-
poses of this paragraph, the claims-paying ca-
pacity of a State-operated insurance or reinsur-
ance program under section 6(a)(1) shall be de-
termined by the Secretary, in consultation with
the Commission, taking into consideration re-
tained losses to private insurers in the State in
an amount assigned by the State insurance
commissioner, the cash surplus of the program,
and the lines of credit, reinsurance, and other
financing mechanisms of the program estab-
lished by law.
(2) AUCTION
CONTRACTS.—Subject to para-
graph (3) and notwithstanding any other provision
of this Act, a contract for reinsurance coverage may
not be made available or sold under section 7
through a regional auction unless the contract re-
quires that the insurance industry in the region for
which the auction was conducted sustains a cumu-
lative amount of retained losses (in covered lines re-
sulting from covered perils) of not less than the
greater of—
(A) $2,000,000,000; and
(B) an amount, determined by the Sec-
retary in consultation with the Commission,
which is sufficient to cover eligible losses in the
region during a 12-month period for all events
having a likelihood of occurrence of once every
100 years.
(3) ANNUAL
ADJUSTMENT.—The Secretary
may annually raise the minimum level of retained
losses established under paragraph (1) for an eligible
State program or under paragraph (2) for a region
to reflect, as determined by the Secretary—
(A) in the case of an eligible State pro-
gram, changes to the claims-paying capacity of
the program;
(B) changes in the capacity of the private
insurance and reinsurance market;
(C) increases in the market value of prop-
erties; or
(D) such other situations as the Secretary
considers appropriate.
In making any determination under this paragraph
in the minimum level of retained losses, the Sec-
retary shall establish such level at an amount such
that the program under this Act for making reinsur-
ance coverage available does not displace or compete
with the private insurance or reinsurance markets or
capital markets, as determined by the Secretary.
(4) OPTIONAL ANNUAL INFLATIONARY ADJUST-
MENT.—The Secretary may, on an annual basis,
raise the minimum level of retained losses estab-
lished under paragraph (1) for each eligible State
program and under paragraph (2) for each region to
reflect the annual rate of inflation. Any such raise
shall be made in accordance with an inflation index
that the Secretary determines to be appropriate. The
first such raise may be made one year after con-
tracts for reinsurance coverage under this Act are
first made available for purchase.
(c) MAXIMUM FEDERAL LIABILITY.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, the maximum amount paid for all
events in any single year by the Secretary pursuant
to claims under all contracts for reinsurance cov-
erage under this Act shall not exceed the applicable
maximum amount for such year determined under
paragraph (2). If, in any single year, claims under
existing contracts for reinsurance coverage exceed
the applicable maximum amount, each claimant shall
receive a prorated portion of the amount available
for payment of claims.
(2) APPLICABLE MAXIMUM AMOUNT.—For pur-
poses of paragraph (1), the applicable maximum
amount shall be—
(A) for any year not referred to in sub-
paragraph (B), $25,000,000,000, except that
the Secretary shall annually adjust such
amount (as it may have been previously ad-
justed) to provide for inflation in accordance
with an inflation index that the Secretary deter-
mines to be appropriate; or
(B) for any year during the 4-year period
beginning on the date that contracts for rein-
surance coverage under this Act are first made
available for purchase, the dollar amount that
the Secretary shall establish and annually re-
vise, which may not in any event exceed
$25,000,000,000.
(d) LIMITATION ON PERCENTAGE OF RISK IN EX-
CESS OF RETAINED LOSSES.—
(1) IN
GENERAL.—The Secretary may not
make available for purchase contracts for reinsur-
ance coverage under this Act that represent more
than 50 percent of the risk of insured losses in ex-
cess of retained losses—
(A) in the case of a contract under section
6 for an eligible State program, for such State;
and
(B) in the case of a contract made avail-
able through a regional auction under section 7,
for such region.
(2) PAYOUT.—For purposes of this subsection,
the amount of payout from a reinsurance contract
shall be the amount of eligible losses multiplied by
the percentage in effect at the time under paragraph
(1).
SEC. 9. DISASTER REINSURANCE FUND.
(a) ESTABLISHMENT.—There is established within
the Treasury of the United States a fund to be known
as the Disaster Reinsurance Fund (in this section referred
to as the ‘‘Fund’’).
(b) CREDITS.—The Fund shall be credited with—
(1) amounts received annually from the sale of
contracts for reinsurance coverage under this Act;
(2) any amounts borrowed under subsection
(d);
(3) any amounts earned on investments of the
Fund pursuant to subsection (e); and
(4) such other amounts as may be credited to
the Fund.
(c) USES.—Amounts in the Fund may be used only
to the extent approved in appropriation Acts and only for
the following purposes:
(1) CONTRACT PAYMENTS.—For payments to
covered purchasers under contracts for reinsurance
coverage for eligible losses under such contracts.
(2) COMMISSION COSTS.—To pay for the oper-
ating costs of the Commission.
(3) ADMINISTRATIVE EXPENSES.—To pay for
the administrative expenses incurred by the Sec-
retary in carrying out the reinsurance program
under this Act.
(4) TERMINATION.—Upon termination under
section 12, as provided in such section.
(d) BORROWING.—
(1) AUTHORITY.—To the extent that the
amounts in the Fund are insufficient to pay claims
and expenses under subsection (c), the Secretary
may issue such obligations of the Fund as may be
necessary to cover the insufficiency and shall pur-
chase any such obligations issued.
(2) PUBLIC DEBT TRANSACTION.—For the pur-
pose of purchasing any such obligations, the Sec-
retary may use as a public debt transaction the pro-
ceeds from the sale of any securities issued under
chapter 31 of title 31, United States Code, and the
purposes for which securities are issued under such
chapter are hereby extended to include any purchase
by the Secretary of such obligations under this sub-
section.
(3) CHARACTERISTICS OF OBLIGATIONS.—Obli-
gations issued under this subsection shall be in such
forms and denominations, bear such maturities, bear
interest at such rate, and be subject to such other
terms and conditions, as the Secretary shall deter-
mine.
(4) TREATMENT.—All redemptions, purchases,
and sales by the Secretary of obligations under this
subsection shall be treated as public debt trans-
actions of the United States.
(5) CONDITIONS.—The following conditions
shall apply to any obligations issued under this sub-
section:
(A) The Secretary may issue such obliga-
tions only to such extent and in such amounts
as are provided in appropriation Acts.
(B) Any obligations issued under this sub-
section shall be repaid, including interest, from
the Fund and shall be recouped from premiums
charged for reinsurance coverage provided
under this Act.
(e) INVESTMENT.—If the Secretary determines that
the amounts in the Fund are in excess of current needs,
the Secretary may invest such amounts as the Secretary
considers advisable in obligations issued or guaranteed by
the United States.
(f) PROHIBITION OF FEDERAL FUNDS.—Except for
amounts made available pursuant to subsection (d) and
section 10(h), no Federal funds shall be authorized or ap-
propriated for the Fund or for carrying out the reinsur-
ance program under this Act.
SEC. 10. NATIONAL COMMISSION ON CATASTROPHE RISKS
AND INSURANCE LOSS COSTS.
(a) ESTABLISHMENT.—The Secretary shall establish
a commission to be known as the National Commission
on Catastrophe Risks and Insurance Loss Costs.
(b) DUTIES.—The Commission shall meet for the sole
purpose of advising the Secretary regarding the estimated
loss costs associated with the contracts for reinsurance
coverage available under this Act and carrying out the
functions specified in this Act.
(c) MEMBERS.—The Commission shall consist of not
more than 5 members, who shall be appointed by the Sec-
retary and shall be broadly representative of the public
interest. Members shall have no personal, professional, or
financial interest at stake in the deliberations of the Com-
mission. The membership of the Commission shall at all
times include at least 1 representative of a nationally rec-
ognized consumer organization.
(d) TREATMENT
OF NON-FEDERAL MEMBERS.—
Each member of the Commission who is not otherwise em-
ployed by the Federal Government shall be considered a
special Government employee for purposes of sections 202
and 208 of title 18, United States Code.
(e) EXPERTS AND CONSULTANTS.— The Commission
may procure temporary and intermittent services under
section 3109(b) of title 5, United States Code, but at a
rate not in excess of the daily equivalent of the annual
rate of basic pay payable for level V of the Executive
Schedule, for each day during which the individual pro-
cured is performing such services for the Commission.
(f) COMPENSATION.—Each member of the Commis-
sion who is not an officer or employee of the Federal Gov-
ernment shall be compensated at a rate of basic pay pay-
able for level V of the Executive Schedule, for each day
(including travel time) during which such member is en-
gaged in the performance of the duties of the Commission.
All members of the Commission who are officers or em-
ployees of the United States shall serve without compensa-
tion in addition to that received for their services as offi-
cers or employees of the United States.
(g) OBTAINING DATA.—The Commission and the
Secretary may solicit loss exposure data and such other
information either deems necessary to carry out its re-
sponsibilities from governmental agencies and bodies and
organizations that act as statistical agents for the insur-
ance industry. The Commission and the Secretary shall
take such actions as are necessary to ensure that informa-
tion that either deems is confidential or proprietary is dis-
closed only to authorized individuals working for the Com-
mission or the Secretary. No company which refuses to
provide information requested by the Commission or the
Secretary may participate in the program for reinsurance
coverage authorized under this Act, nor may any State
participate if any governmental agency within that State
has refused to provide information requested by the Com-
mission or the Secretary.
(h) FUNDING.—
(1) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated—
(A) $1,000,000 for fiscal year 1999 for the
initial expenses in establishing the Commission
and the initial activities of the Commission that
cannot timely be covered by amounts obtained
pursuant 
to 
sections 
6(b)(6)(B)(iii) 
and
7(a)(4)(C), as determined by the Secretary; and
(B) such additional sums as may be nec-
essary to carry out subsequent activities of the
Commission.
(2) OFFSET.—The Secretary shall provide, to
the maximum extent practicable, that an amount
equal to any amount appropriated under paragraph
(1) is obtained from purchasers of reinsurance cov-
erage under this Act and deposited in the Fund es-
tablished under section 9. Such amounts shall be ob-
tained by inclusion of a provision for the Commis-
sion’s expenses incorporated into the pricing of the
contracts for such reinsurance coverage, pursuant to
sections 6(b)(6)(B)(iii) and 7(a)(4)(C).
(i) TERMINATION.—The Commission shall terminate
upon the effective date of the repeal under section 12(c).
SEC. 11. DEFINITIONS.
For purposes of this Act, the following definitions
shall apply:
(1) COMMISSION.—The term ‘‘Commission’’
means the National Commission on Catastrophe
Risks and Insurance Loss Costs established under
section 10.
(2) COVERED PERILS.—The term ‘‘covered per-
ils’’ means the natural disaster perils under section
5.
(3) COVERED PURCHASER.—The term ‘‘covered
purchaser’’ means—
(A) with respect to reinsurance coverage
made available under a contract under section
6, the eligible State-operated insurance or rein-
surance program that purchases such coverage;
and
(B) with respect to reinsurance coverage
made available under a contract under section
7, the purchaser of the contract auctioned
under such section or any subsequent holder or
holders of the contract.
(4) DISASTER AREA.—The term ‘‘disaster area’’
means a geographical area, with respect to which—
(A) a covered peril specified in section 5
has occurred; and
(B) a declaration that a major disaster ex-
ists, as a result of the occurrence of such
peril—
(i) has been made by the President of
the United States; and
(ii) is in effect.
(5) ELIGIBLE
LOSSES.—The term ‘‘eligible
losses’’ shall be defined by the Secretary, after con-
sultation with the Commission.
(6) ELIGIBLE STATE PROGRAM.—The term ‘‘eli-
gible State program’’ means a State program that,
pursuant to section 6(a), is eligible to purchase rein-
surance coverage made available through contracts
under section 6.
(7) 
PRICE
GOUGING.—The 
term 
‘‘price
gouging’’ means the providing of any consumer good
or service by a supplier for a price that the supplier
knows or has reason to know is greater, by at least
the percentage set forth in a State law or regulation
prohibiting such act (notwithstanding any real cost
increase due to any attendant business risk and
other reasonable expenses that result from the major
disaster involved), than the price charged by the
supplier for such consumer good or service imme-
diately before the disaster.
(8) QUALIFIED
LINES.—The term ‘‘qualified
lines’’ means lines of insurance coverage for which
losses are covered under section 4 by reinsurance
coverage under this Act.
(9) REINSURANCE COVERAGE.—The term ‘‘re-
insurance coverage under this Act’’ includes cov-
erage under contracts made available under sections
6 and 7.
(10) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of the Treasury.
(11) STATE.—The term ‘‘State’’ means the
States of the United States, the District of Colum-
bia, the Commonwealth of Puerto Rico, the Com-
monwealth of the Northern Mariana Islands, Guam,
the Virgin Islands, American Samoa, and any other
territory or possession of the United States.
SEC. 12. TERMINATION.
(a) IN GENERAL.—Except as provided in subsection
(b), the Secretary may not provide any reinsurance cov-
erage under this Act covering any period after the expira-
tion of the 10-year period beginning on the date of the
enactment of this Act.
(b) EXTENSION.—If upon the expiration of the period
under subsection (a) the Secretary, in consultation with
the Commission, determines that continuation of the pro-
gram for reinsurance coverage under this Act is necessary
to carry out the purpose of this Act under section 3(b)
because of insufficient growth of capacity in the private
homeowners’ insurance market, the Secretary shall con-
tinue to provide reinsurance coverage under this Act until
the expiration of the 5-year period beginning upon the ex-
piration of the period under subsection (a).
(c) REPEAL.—Effective upon the date that reinsur-
ance coverage under this Act is no longer available or in
force pursuant to subsection (a) or (b), this title (except
for this section) is repealed.
(d) DEFICIT REDUCTION.—The Secretary shall cover
into the General Fund of the Treasury any amounts re-
maining in the Fund under section 9 upon the repeal of
this title.
SEC. 13. ANNUAL STUDY OF COST AND AVAILABILITY OF
DISASTER INSURANCE AND PROGRAM NEED.
(a) IN GENERAL.—The Secretary shall, on an annual
basis, conduct a study and submit to the Congress a public
report on the cost and availability of homeowners’ insur-
ance for losses resulting from catastrophic natural disas-
ters covered by the reinsurance program under this Act.
(b) CONTENTS.—Each annual study under this sec-
tion shall determine and identify, on an aggregate basis—
(1) for each State or region, the capacity of the
private homeowners’ insurance market with respect
to coverage for losses from catastrophic natural dis-
asters;
(2) for each State or region, the percentage of
homeowners who have such coverage, the disasters
covered, and the average cost of such coverage;
(3) for each State or region, the progress that
private reinsurers and capital markets have made in
providing reinsurance for such homeowners’ insur-
ance;
(4) for each State or region, the effects of the
Federal reinsurance program under this Act on the
availability and affordability of such insurance; and
(5) the appropriate time for termination of the
Federal reinsurance program under this Act.
(c) TIMING.—Each annual report under this section
shall be submitted not later than March 30 of the year
after the year for which the study was conducted.
(d) COMMENCEMENT
OF
REPORTING
REQUIRE-
MENT.—The Secretary shall first submit an annual report
under this section 2 years after the date of the enactment
of this Act.
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