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chased the reinsurance coverage provided by the Corpora-
tion under section 921.
‘‘SEC. 923. LEVELS OF RETAINED LOSSES.
‘‘(a) INDUSTRY WIDE ELIGIBILITY.—
‘‘(1) IN
GENERAL.—Excess reinsurance cov-
erage under this subtitle shall be available to all pri-
vate insurers eligible for reinsurance pursuant to
section 921(b) in accordance with this subsection.
‘‘(2) INDUSTRY RETAINED LOSSES.—
‘‘(A) IN GENERAL.—The reinsurance ac-
count established under section 906(b) shall
provide excess reinsurance coverage when, as
determined by the Board of the Corporation
pursuant to the plan of operation under section
902, the insurance industry is likely to incur
gross losses covered under section 921(c) aris-
ing from hurricane, earthquake, volcanic erup-
tion, and tusnami events occurring during any
12-month period that exceed 15 percent of the
consolidated industry surplus as regards policy-
holders.
‘‘(B) CALCULATION.—Only such separate
events that will likely result in industry gross
losses of at least $1,500,000,000, adjusted an-
nually in accordance with the percentage
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change in the Consumer Price Index, shall be
aggregated to reach the 15 percent level for
gross losses described in subparagraph (A).
‘‘(3) 
INDIVIDUAL
COMPANY
RETAINED
LOSSES.—After the insurance industry has sustained
gross losses described in paragraph (2), the reinsur-
ance account established under section 906(b) shall
pay to a private insurer 95 percent of qualifying
losses in excess of 15 percent of the consolidated
surplus as regards policyholders of the private in-
surer.
‘‘(b) INDIVIDUAL INSURER ELIGIBILITY.—
‘‘(1) 
INDIVIDUAL
INSURER
RETAINED
LOSSES.—If subsection (a) is not applicable, a pri-
vate insurer shall be eligible for excess reinsurance
coverage and reimbursement from the reinsurance
account established under section 906(b) if the in-
surer has incurred gross losses from a single—
‘‘(A) earthquake, volcanic eruption, or tsu-
nami event that is included in the lines covered
under section 921(c) and that exceeds 20 per-
cent of the consolidated surplus as regards pol-
icyholders of the private insurer; or
‘‘(B) hurricane event that is included in
the lines covered under section 921(c) and that
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exceed 20 percent of the consolidated surplus as
regards policyholders of the private insurer, ex-
cept that losses in the workers’ compensation
and earthquake lines of coverage shall be ex-
cluded.
‘‘(2) REINSURANCE
ACCOUNT
PAYMENTS.—
After the private insurer has sustained gross losses
described in paragraph (1), the reinsurance account
established under section 906(b) shall pay 95 per-
cent of qualifying losses in excess of 20 percent of
the consolidated surplus as regards policyholders of
the private insurer.
‘‘(3) LIMITATION
OF
REINSURANCE
ACCOUNT
PAYMENTS.—The payments by the reinsurance ac-
count under this subsection shall be limited to 200
percent of the consolidated surplus as regards pol-
icyholders of the private insurer.
‘‘(c) STATE INSURANCE PROGRAMS.—Excess rein-
surance coverage under this subtitle shall be available to
each insurance pool eligible for reinsurance pursuant to
section 921(b) in accordance with the following:
‘‘(1) STATE
POOL
LOSSES.—The reinsurance
account established under section 906(b) shall pro-
vide excess reinsurance coverage when, as deter-
mined by the Director pursuant to the plan of oper-
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ation under section 902, the State insurance pool is
likely to incur gross losses in the State served by the
eligible State insurance pool arising from hurricane,
earthquake, volcanic eruption, and tsunami events
occurring during any 12-month period that exceed
10 times the sum of the direct earned premiums for
that State insurance pool for the losses covered
under section 921(c) or $10,000,000,000, adjusted
annually in accordance with the percentage change
in the Consumer Price Index, whichever amount is
less.
‘‘(2) MINIMUM LOSSES.—The lesser amount de-
scribed in paragraph (1) must equal at least
$500,000,000, adjusted annually in accordance with
the percentage change in the Consumer Price Index.
‘‘(3) RETAINED LOSSES.—After the insurance
industry has sustained gross losses described in
paragraph (1), the reinsurance account established
under section 906(b) shall pay to an individual State
insurance pool 95 percent of qualifying losses in ex-
cess of the lesser amount described in paragraph
(1).
‘‘(d) QUALIFYING LOSSES.—For the purpose of this
subtitle, ‘qualifying losses’ include—
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‘‘(1) the losses and loss adjustment expense in-
curred by a private insurer or State insurance pool;
and
‘‘(2) any assessments, surcharges, or other li-
abilities imposed by any State residual insurance
pooling program or guaranty account, attributable to
hurricanes, earthquakes, volcanic eruptions, and
tsunamis occurring during any 12-month period en-
compassing the events described in subsections
(a)(2) and (c)(1) or the event described in sub-
section (b)(1), reduced by—
‘‘(A) any collectible reinsurance recover-
able, and
‘‘(B) an appropriate percentage of any
uncollectible reinsurance arising from the event
as set in the plan of operation under section
902.
‘‘(e) OBLIGATIONS.—All reinsurance contracts issued
under this subtitle shall constitute obligations, in accord-
ance with the terms of the reinsurance, of the Corporation.
‘‘(f) DEFINITIONS.—In this section, the following
definitions apply:
‘‘(1) The term ‘consolidated industry surplus as
regards policyholders’ means the consolidated sur-
plus as regards policyholders of the property and
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casualty insurance industry (excluding life insur-
ance) for the calendar year immediately preceding
the hurricane, earthquake, volcanic eruption, or tsu-
nami events described in subsection (a)(2) as deter-
mined by the National Association of Insurance
Commissioners or other credible source as deter-
mined by the Corporation.
‘‘(2) The term ‘consolidated surplus as regards
policyholders’ means the surplus as regards policy-
holders of the private insurer (excluding life insur-
ance) based on financial data submitted to the Na-
tional Association of Insurance Commissioners or
other credible source as determined by the Corpora-
tion for the calendar year immediately preceding the
hurricane, earthquake, volcanic eruption, or tsunami
events described in subsections (a)(2) and (b)(1).
‘‘(3) The term ‘direct earned premiums’ means
the direct earned premiums for certain lines of prop-
erty and casualty insurance coverage as published in
the National Association of Insurance Commis-
sioners Fire and Casualty Annual Statement filed
with the applicable State department of insurance
for the most recent calender year available preceding
the hurricane, earthquake, volcanic eruption, or tsu-
nami events described in subsection (c)(1).
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‘‘(4) The term ‘gross losses’ means all losses
and loss adjustment expenses, before deduction of
any private reinsurance recoverables.
‘‘(5) The term ‘uncollectible reinsurance’ means
reinsurance proceeds due and payable in accordance
with the terms of the reinsurance contract that are
not paid within 12 months of the due date.
‘‘TITLE X—NATURAL DISASTER
PROTECTION FUND
‘‘SEC. 1001. ESTABLISHMENT.
‘‘(a) THE FUND.—There is established within the
Treasury of the United States a trust fund to be known
as the Natural Disaster Protection Fund (hereinafter re-
ferred to in this title as the ‘Fund’), consisting of such
amounts as may be appropriated or credited to the Fund
as provided in this title.
‘‘(b) ACCOUNTS.—There are established in the Fund
three separate accounts as follows:
‘‘(1) A Private Loss Account as described in
section 1002.
‘‘(2) A Public Loss Account as described in sec-
tion 1003.
‘‘(3) A Mitigation Account as described in sec-
tion 1004.
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‘‘(c) NO COMMINGLING.—The amounts in the three
accounts established in subsection (b) shall be kept sepa-
rate. The Secretary of the Treasury shall not permit bor-
rowing of monies between the three accounts.
‘‘SEC. 1002. PRIVATE LOSS ACCOUNT.
‘‘The Private Loss Account established in section
1001(b) shall provide direct Federal loans to cover short-
falls in the primary account described in section 906(a)
and the reinsurance account described in section 906(b),
subject to the lending authority, conditions, and repay-
ment terms of section 906(d).
‘‘SEC. 1003. PUBLIC LOSS ACCOUNT.
‘‘(a) IN GENERAL.—The Public Loss Account estab-
lished in section 1001(b) shall cover losses to, and retro-
fitting of, public facilities and critical facilities and life-
lines.
‘‘(b) DESCRIPTION OF ACCOUNT.—
‘‘(1) SOURCE OF FUNDS.—The Director shall
transfer and credit to the Public Loss Account
amounts specifically designated and appropriated—
‘‘(A) annually pursuant to title IV for re-
pair and restoration of Federal facilities, public
facilities, and critical facilities and lifelines;
‘‘(B) pursuant to any natural disaster
emergency supplemental appropriations Act en-