ance coverage under this Act that would pay out
more than 50 percent of eligible losses in excess of
retained losses for the region for which the contract
was made available.
(2) PAYOUT.—For purposes of this subsection,
the amount of payout from a reinsurance contract
shall be the amount of eligible losses in excess of re-
tained losses multiplied by the percentage under
paragraph (1).
SEC. 7. 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 shall be available
to the Secretary only for the following purposes:
(1) CONTRACT PAYMENTS.—For payments to
covered purchasers under contracts for reinsurance
coverage under this Act 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 11, 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) REPAYMENT.—Any obligations issued under
this subsection shall be repaid, including interest,
from the Fund and shall be recouped from pre-
miums 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) of this
section and section 8(h), no Federal funds shall be author-
ized or appropriated for the Fund or for carrying out the
reinsurance program under this Act.
SEC. 8. 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 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
insurance or reinsurance program participate if any gov-
ernmental agency within that State has refused to provide
information requested by the Commission or the Sec-
retary.
(h) FUNDING.—
(1) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated—
(A) $1,000,000 for fiscal year 2003 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 section 5(a)(3)(C), as determined
by the Secretary;
(B) such additional sums as may be nec-
essary to carry out subsequent activities of the
Commission;