SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Natural Disaster Protection and Insurance Act of 1997’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title.
Sec. 2. Findings.
Sec. 3. Purpose.
Sec. 4. Definitions.
Sec. 5. Severability.
TITLE I—NATURAL DISASTER INSURANCE
Sec. 101. National Commission on Catastrophe Risk and Insurance Loss Costs.
Sec. 102. Catastrophic excess-of-loss contracts.
Sec. 103. Private disaster insurance corporation.
Sec. 104. Study on tax treatment of insurer catastrophic reserves.
Sec. 105. Flood insurance.
Sec. 106. Insurance pricing incentives.
Sec. 107. Study of availability and affordability of catastrophe insurance.
TITLE II—MULTIHAZARD MITIGATION PROGRAM
Sec. 201. Development of State mitigation plans.
Sec. 202. Natural Disaster Hazard Mitigation Fund.
Sec. 203. Public infrastructure retrofitting.
Sec. 204. Wildland fires.
Sec. 205. Authorization of appropriations.
SEC. 2. FINDINGS.
The Congress finds that—
(1) in addition to earthquakes, other cata-
strophic natural disasters, such as major hurricanes
and volcanic eruptions, will—
(A) continue to strike the United States;
and
(B) inflict substantial long-term adverse
consequences in terms of deaths, injuries, dam-
age to property and other economic losses, as
well as social problems;
(2) the Federal Government and the govern-
ments of States and local communities are often not
adequately equipped to respond to catastrophic natu-
ral disasters;
(3) billions of dollars in taxpayer-supported gov-
ernment assistance will be paid to rebuild following
catastrophic natural disasters;
(4) millions of persons in the United States do
not have adequate insurance coverage to protect
their property from catastrophic natural disasters;
(5) the unique risks posed by catastrophic natu-
ral disasters make it difficult to provide adequate in-
surance coverage through existing insurance mecha-
nisms, including—
(A) a low frequency of occurrence;
(B) a high severity of losses;
(C) a high concentration of losses in par-
ticular geographic areas; and
(D) a considerable degree of uncertainty
associated with estimating expected losses over
a projected time period;
(6) in the early 1990’s, catastrophic disasters
(including Hurricane Andrew and Hurricane Iniki
and the Northridge earthquake) have inflicted sub-
stantial losses on private insurance companies and
those losses have affected the ability to write new
coverages in the affected regions and other parts of
the United States;
(7) the natural disasters referred to in para-
graph (6)—
(A) inflicted substantial losses on State
governments and local communities; and
(B) caused severe strains on the budgets of
the governments referred to in subparagraph
(A);
(8) hazard mitigation can reduce the long-term
consequences of natural disasters, especially with re-
spect to those persons who are least capable of help-
ing themselves;
(9) hazard mitigation measures, including the
adoption and implementation of appropriate building
and fire safety codes, retrofitting of structures, and
providing for public and community awareness, have
proven effective in reducing deaths, injuries, and
property damage caused by catastrophic natural dis-
asters;
(10) hazard mitigation measures are not—
(A) in place in many high-hazard areas;
and
(B) adequately enforced where the meas-
ures are in place; and
(11) emergency response capability, including
fire fighting, emergency medical assistance, and
search and rescue personnel, is as important as haz-
ard mitigation in lessening the impact of natural dis-
asters.
SEC. 3. PURPOSE.
The purpose of this Act is—
(1) to enhance access to disaster insurance cov-
erage by improving the capacity of the private insur-
ance industry through—
(A) the expanded availability of private in-
surance and reinsurance coverage for natural
disaster perils;
(B) the establishment of premium rates
based on expected losses and risk;
(C) an increased likelihood that the insur-
ance industry continues to provide affordable
coverage following a catastrophic natural disas-
ter; and
(D) more effective employment of the in-
surance industry through the provision of more
coverage, that should—
(i) speed rebuilding following a cata-
strophic natural disaster;
(ii) finance losses from natural disas-
ters, and consequently save funds derived
from tax revenues by reducing reliance on
disaster assistance from governments; and
(iii) encourage cost-effective hazard
mitigation efforts; and
(2) to reduce deaths, injuries, property damage,
and business interruptions from natural disasters
through a hazard mitigation program that provides
for—
(A) the building of safer structures and
the upgrading of existing buildings and lifelines;
(B) the enhancement of State and local
community emergency management;
(C) the improvement of State and local
emergency response capability, including the de-
velopment of standards and guidelines for staff-
ing, operations, and training;
(D) the forging of a partnership between
the Federal Government and the States and
local communities that makes the States and
local communities ultimately responsible for im-
plementing and enforcing multihazard mitiga-
tion measures and emergency management; and
(E) the creation of a self-sustaining fund-
ing mechanism to assist States in paying for
hazard mitigation efforts.
SEC. 4. DEFINITIONS.
For purposes of this Act, the following definitions
shall apply:
(1) BUILDING.—The term ‘‘building’’ means
any structure that is—
(A) fully or partially enclosed; and
(B) used or intended for housing persons
or sheltering property.
(2) CATASTROPHE LOSS COSTS.—The term ‘‘ca-
tastrophe loss costs’’ means loss costs for the perils
listed in section 101(e)(1).
(3) COMMERCIAL LOSSES.—
(A) The term ‘‘commercial losses’’ means
physical damage losses to insured commercial
property (other than residential property) and
other losses that are the result of earthquakes,
volcanic eruptions, tsunamis, or hurricanes for