HR 3355 RFS
(b) CONDITIONS FOR LOAN ELIGIBILITY.—A loan 
under this section may be made only to a qualified reinsur-
ance program and only if— 
(1) before the loan is made— 
(A) the qualified reinsurance program sub-
mits to the Secretary a report setting forth, in 
such form and including such information as 
the Secretary shall require, how the program 
plans to repay the loan; 
(B) based upon the report of the program, 
the Secretary determines that the program can 
meet its repayment obligation under the loan 
and certifies that the program can meet such 
obligation; and 
(C) the State or regional reinsurance pro-
gram enters into an agreement with the Sec-
retary, as the Secretary shall require, that the 
State will not use Federal funds of any kind or 
from any Federal source (including any disaster 
or other financial assistance, loan proceeds, and 
any other assistance or subsidy) to repay the 
loan; 
(2) the program cannot access capital in the 
private market at a commercially reasonable rate, in-
cluding through catastrophe bonds and other securi-
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HR 3355 RFS
ties sold through the facility created in title I of this 
Act, as determined by the Secretary, and a loan may 
be made to such a qualified reinsurance program 
only to the extent that such program cannot access 
capital in the private market at a commercially rea-
sonable rate; 
(3) the Secretary determines that an event has 
resulted in insured losses in a State with a qualified 
reinsurance program; 
(4) the loan complies with the requirements 
under subsection (d) or (e), as applicable; and 
(5) the State demonstrates to the Secretary 
that it has the ability to repay the loans. 
(c) MANDATORY ASSISTANCE FOR QUALIFIED REIN-
SURANCE PROGRAMS.—The Secretary shall upon the re-
quest of a qualified reinsurance program and subject to 
subsection (b), make a loan under subsection (d) or (e) 
for such program in the amount requested by such pro-
gram (subject to the limitations under subsections (d)(2) 
and (e)(2), respectively). 
(d) LIQUIDITY LOANS.—A loan under this subsection 
for a qualified reinsurance program shall be subject to the 
following requirements: 
(1) PRECONDITIONS.—The Secretary shall have 
determined that the qualified reinsurance program— 
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(A) has a capital liquidity shortage, in ac-
cordance with regulations that the Secretary 
shall establish; and 
(B) cannot access capital in the private 
markets at a commercially reasonable rate. 
(2) AMOUNT.—The principal amount of the 
loan may not exceed the ceiling coverage level for the 
qualified reinsurance program. 
(3) RATE OF INTEREST.—The loan shall bear 
interest at an annual rate 3 percentage points high-
er than marketable obligations of the Treasury hav-
ing the same term to maturity as the loan and 
issued during the most recently completed month, as 
determined by the Secretary, or such higher rate as 
may be necessary to ensure that the amounts of in-
terest paid under such loans exceed the sum of the 
costs (as such term is defined in section 502 of the 
Federal Credit Reform Act of 1990 (2 U.S.C. 
661a)) of such loans, the administrative costs in-
volved in carrying out a program under this title for 
such loans, and any incidental effects on govern-
mental receipts and outlays. 
(4) TERM.—The loan shall have a term to ma-
turity of not less than 5 years and not more than 
10 years. 
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(e) CATASTROPHIC LOANS.—A loan under this sub-
section for a qualified reinsurance program shall be sub-
ject to the following requirements: 
(1) PRECONDITIONS.—The Secretary shall have 
determined that an event has resulted in insured 
losses in a State with a qualified reinsurance pro-
gram and that such insured losses in such State are 
in excess of 150 percent of the aggregate amount of 
direct written premium for property and casualty in-
surance, for risks located in that State, over the cal-
endar year preceding such event, in accordance with 
regulations that the Secretary shall establish. 
(2) AMOUNT.—The principal amount of the 
loan made pursuant to an event referred to in para-
graph (1) may not exceed the amount by which the 
insured losses sustained as a result of such event ex-
ceed the ceiling coverage level for the qualified rein-
surance program. 
(3) RATE OF INTEREST.—The loan shall bear 
interest at an annual rate 0.20 percentage points 
higher than marketable obligations of the Treasury 
having a term to maturity of not less than 10 years 
and issued during the most recently completed 
month, as determined by the Secretary, or such 
higher rate as may be necessary to ensure that the 
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amounts of interest paid under such loans exceed 
the sum of the costs (as such term is defined in sec-
tion 502 of the Federal Credit Reform Act of 1990 
(2 U.S.C. 661a)) of such loans, the administrative 
costs involved in carrying out a program under this 
title for such loans, and any incidental effects on 
governmental receipts and outlays. 
(4) TERM.—The loan shall have a term to ma-
turity of not less than 10 years. 
(f) USE OF FUNDS.—Amounts from a loan under this 
section shall only be used to provide reinsurance or 
retrocessional coverage to underlying primary insurers or 
reinsurers for losses arising from all personal residential 
lines of insurance, as defined in the Uniform Property & 
Casualty Product Coding Matrix published and main-
tained by the National Association of Insurance Commis-
sioners. Such amounts shall not be used for any other pur-
pose. 
SEC. 203. REPORTS AND AUDITS. 
The Secretary shall submit a report to the President 
and the Congress annually that identifies and describes 
any loans made under this title during such year and any 
repayments during such year of loans made under this 
title, and describes actions taken to ensure accountability 
of loan funds. The Secretary shall provide for regular au-
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