SEC. 633. ADJUSTMENT AND PAYMENT OF CLAIMS AND JU-
DICIAL REVIEW. 
The insurance companies and other insurers that 
form, associate, or otherwise join together in the pool 
under this part may adjust and pay all claims for proved 
and approved losses covered by toxic mold hazard insur-
ance in accordance with the provisions of this title and, 
upon the disallowance by any such company or other in-
surer of any such claim, or upon the refusal of the claim-
ant to accept the amount allowed upon any such claim, 
the claimant, within one year after the date of mailing 
of notice of disallowance or partial disallowance of the 
claim, may institute an action on such claim against such 
company or other insurer in the United States district 
court for the district in which the insured property or the 
major part thereof shall have been situated, and original 
exclusive jurisdiction is hereby conferred upon such court 
to hear and determine such action without regard to the 
amount in controversy. 
SEC. 634. PREMIUM EQUALIZATION PAYMENTS. 
(a) PAYMENTS.—The Director, on such terms and 
conditions as the Director may from time to time pre-
scribe, shall make periodic payments to the pool formed 
or otherwise created under section 631, in recognition of 
such reductions in chargeable premium rates under section 
605 below estimated premium rates under section 604(1)
as are required in order to make toxic mold hazard insur-
ance available on reasonable terms and conditions. 
(b) PERIODS AND METHODS.—Designated periods 
under this section and the methods for determining the 
sum of premiums paid or payable during such periods 
shall be established by the Director. 
SEC. 635. EMERGENCY IMPLEMENTATION OF PROGRAM. 
(a) AUTHORITY.—Notwithstanding any other provi-
sions of this title, for the purpose of providing toxic mold 
hazard insurance coverage at the earliest possible time, 
the Director may carry out the insurance program under 
subtitle A during the period ending September 30, 2006, 
in accordance with the provisions of this part and the 
other provisions of this title insofar as they relate to this 
part, but subject to the modifications made by or under 
subsection (b). 
(b) PREMIUM RATES AND PROCEDURES.—In car-
rying out the toxic mold hazard insurance program pursu-
ant to subsection (a), the Director— 
(1) shall provide insurance coverage without re-
gard to any estimated risk premium rates which 
would otherwise be determined under section 604; 
and 
(2) shall utilize the provisions and procedures 
contained in or prescribed by this part (other than
section 634) and sections 651 and 652 to such ex-
tent and in such manner as the Director may con-
sider necessary or appropriate to carry out the pur-
pose of this section. 
PART 2—GOVERNMENT PROGRAM WITH 
INDUSTRY ASSISTANCE 
SEC. 641. FEDERAL OPERATION OF PROGRAM. 
(a) AUTHORITY.—If at any time, after consultation 
with representatives of the insurance industry, the Direc-
tor determines that operation of the toxic mold hazard in-
surance program as provided under part 1 cannot be car-
ried out, or that such operation, in itself, would be assisted 
materially by the Federal Government’s assumption, in 
whole or in part, of the operational responsibility for toxic 
mold insurance under this title (on a temporary or other 
basis), the Director shall promptly undertake any nec-
essary arrangements to carry out the program of toxic 
mold hazard insurance under subtitle A through the facili-
ties of the Federal Government, utilizing, for purposes of 
providing such insurance coverage— 
(1) insurance companies and other insurers, in-
surance agents and brokers, and insurance adjust-
ment organizations, as fiscal agents of the United 
States;
(2) such other officers and employees of any ex-
ecutive agency (as defined in section 105 of title 5 
of the United States Code) as the Director and the 
head of any such agency may from time to time, 
agree upon, on a reimbursement or other basis; or 
(3) both the alternatives specified in paragraphs 
(1) and (2). 
(b) REPORT.—Upon making the determination re-
ferred to in subsection (a), the Director shall make a re-
port to the Congress and, at the same time, to the private 
insurance companies participating in the toxic mold haz-
ard insurance program under this title. Such report 
shall— 
(1) state the reason for such determinations; 
(2) include findings that support such deter-
mination; 
(3) indicate the extent to which it is anticipated 
that the insurance industry will be utilized in pro-
viding toxic mold hazard insurance coverage under 
the program; and 
(4) contain such recommendations as the Direc-
tor considers appropriate. 
The Director shall not implement the program of toxic 
mold hazard insurance under subtitle A through the facili-
ties of the Federal Government before the expiration of
the 9-month period beginning upon the date of submission 
of the report under this subsection unless it would be im-
possible to continue to effectively carry out the program 
operations during such period. 
SEC. 642. ADJUSTMENT AND PAYMENT OF CLAIMS AND JU-
DICIAL REVIEW. 
If the program is carried out as provided in section 
1341, the Director may adjust and make payment of any 
claims for proved and approved losses covered by toxic 
mold hazard insurance, and upon the disallowance by the 
Director of any such claims, or upon the refusal of the 
claimant to accept the amount allowed upon any such 
claim, the claimant, within one year after the date of mail-
ing of notice of disallowance or partial disallowance by the 
Director, may institute an action against the Director on 
such claim in the United States district court for the dis-
trict in which the insured property or the major part 
thereof shall have been situated, and original exclusive ju-
risdiction is hereby conferred upon such court to hear and 
determine such action without regard to the amount in 
controversy.
PART 3—PROVISIONS OF GENERAL 
APPLICABILITY 
SEC. 651. SERVICES BY INSURANCE INDUSTRY. 
(a) CONTRACTS
AND
AGREEMENTS.—In admin-
istering the toxic mold hazard insurance program under 
this subtitle, the Director may enter into any contracts, 
agreements, or other appropriate arrangements which 
may, from time to time, be necessary for the purpose of 
utilizing, on such terms and conditions as may be agreed 
upon, the facilities and services of any insurance compa-
nies or other insurers, insurance agents and brokers, or 
insurance adjustment organizations; and such contracts, 
agreements, or arrangements may include provision for 
payment of applicable operating costs and allowances for 
such facilities and services as set forth in the schedules 
prescribed under section 607. 
(b) EXEMPTION FROM COMPETITIVE BIDDING RE-
QUIREMENTS.—Any such contracts, agreements, or other 
arrangements may be entered into without regard to the 
provisions of section 3709 of the Revised Statutes (41 
U.S.C. 5) or any other provisions of law requiring competi-
tive bidding and without regard to the provisions of the 
Federal Advisory Committee Act (5 U.S.C. App.). 
(c) LIABILITY.—The Director of the Federal Emer-
gency Management Agency shall hold any agent or broker 
selling or undertaking to sell toxic mold insurance cov-
erage under this title harmless from any judgment for 
damages against such agent or broker as a result of any 
court action by a policyholder or applicant arising out of 
an error or omission on the part of the Federal Emergency 
Management Agency, and shall provide any such agent or 
broker with indemnification, including court costs and rea-
sonable attorney fees, arising out of and caused by an 
error or omission on the part of the Federal Emergency 
Management Agency and its contractors. The Director of 
the Federal Emergency Management Agency may not hold 
harmless or indemnify an agent or broker for his or her 
error or omission. 
SEC. 652. USE OF INSURANCE POOL, COMPANIES, OR 
OTHER PRIVATE ORGANIZATIONS FOR CER-
TAIN PAYMENTS. 
(a) AUTHORITY.—To provide for maximum efficiency 
in the administration of the toxic mold hazard insurance 
program and to facilitate the expeditious payment of any 
Federal funds under such program, the Director may 
enter into contracts with a pool formed or otherwise cre-
ated under section 631, or any insurance company or 
other private organization, for the purpose of securing per-
formance by such pool, company, or organization or any 
or all of the following responsibilities:
(1) Estimating and later determining any 
amounts of payments to be made. 
(2) Receiving from the Director, disbursing, 
and accounting for funds in making such payments. 
(3) Making such audits of the records of any 
insurance company or other insurer, insurance agent 
or broker, or insurance adjustment organization as 
may be necessary to assure that proper payments 
are made. 
(4) Otherwise assisting in such manner as the 
contract may provide to further the purposes of this 
title. 
(b) TERMS AND CONDITIONS.—Any contract with the 
pool or an insurance company or other private organiza-
tion under this section may contain such terms and condi-
tions at the Director finds necessary or appropriate for 
carrying out responsibilities under subsection (a), and may 
provide for payment of any costs which the Director deter-
mines are incidental to carrying out such responsibilities 
which are covered by the contract. 
(c) EXEMPTION FROM COMPETITIVE BIDDING RE-
QUIREMENTS.—Any contract entered into under sub-
section (a) may be entered into without regard to section 
3709 of the Revised Statutes (41 U.S.C. 5) or any other 
provision of law requiring competitive bidding.
(d) EFFICIENCY AND EFFECTIVENESS.—No contract 
may be entered into under this section unless the Director 
finds that the pool, company, or organization will perform 
its obligations under the contract efficiently and effec-
tively, and will meet such requirements as to financial re-
sponsibility, legal authority, and other matters as the Di-
rector finds appropriate. 
(e) CERTIFICATION OF PAYMENTS.— 
(1) BONDING.—Any such contract may require 
the pool, company, or organization or any of its offi-
cers or employees certifying payments or disbursing 
funds pursuant to the contract, or otherwise partici-
pating in carrying out the contract, to give surety 
bond to the United States in such amount as the Di-
rector may deem appropriate. 
(2) LIABILITY.— 
(A) No individual designated pursuant to a 
contract under this section to certify payments 
shall, in the absence of gross negligence or in-
tent to defraud the United States, be liable with 
respect to any payment certified by such indi-
vidual under this section. 
(B) No officer disbursing funds shall in 
the absence of gross negligence or intent to de-
fraud the United States, be liable with respect
to any payment by such officer under this sec-
tion if it was based upon a voucher signed by 
an individual designated to certify payments as 
provided in paragraph (2) of this subsection. 
(f) CONTRACT TERM.—Any contract entered into 
under this section shall be for a term of one year, and 
may be made automatically renewable from term to term 
in the absence of notice by either party of an intention 
to terminate at the end of the current term; except that 
the Director may terminate any such contract at any time 
(after reasonable notice to the pool, company, or organiza-
tion involved) if the Director finds that the pool, company, 
or organization has failed substantially to carry out the 
contract, or is carrying out the contract in a manner in-
consistent with the efficient and effective administration 
of the toxic mold hazard insurance program under this 
title. 
SEC. 653. SETTLEMENT AND ARBITRATION. 
(a) AUTHORITY.—The Director may make final set-
tlement of any claims or demands which may arise as a 
result of any financial transactions that the Director is 
authorized to carry out under this subtitle, and may, to 
assist the Director in making any such settlement, refer 
any disputes relating to such claims or demands to arbi-
tration, with the consent of the parties concerned.
(b) ARBITRATION.—Such arbitration shall be advi-
sory in nature, and any award, decision, or recommenda-
tion which may be made shall become final only upon the 
approval of the Director. 
SEC. 654. RECORDS AND AUDITS. 
(a) MAINTENANCE
OF RECORDS.—The insurance 
pool formed or otherwise created under part 1 of this sub-
title, and any insurance company or other private organi-
zation executing any contract, agreement, or other appro-
priate arrangement with the Director under part 2 or this 
part, shall keep such records as the Director shall pre-
scribe, including records which fully disclose the total costs 
of the program undertaken or the services being rendered, 
and such other records as will facilitate an effective audit. 
(b) ACCESS TO RECORDS.—The Director and the 
Comptroller General of the United States, or any of their 
duly authorized representatives, shall have access for the 
purpose of audit and examination to any books, docu-
ments, papers and any such insurance company or other 
private organization that are pertinent to the costs of the 
program undertaken or the services being rendered.
Subtitle C—Miscellaneous 
Provisions 
SEC. 661. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) DIRECTOR.—The term ‘‘Director’’ means 
the Director of the Federal Emergency Management 
Agency. 
(2) FUND.—The term ‘‘Fund’’ means the Na-
tional Toxic Mold Hazard Insurance Fund estab-
lished under section 606. 
(3) INSURANCE ADJUSTMENT ORGANIZATION.— 
The term ‘‘insurance adjustment organization’’ in-
cludes any organizations and persons engaged in the 
business of adjusting loss claims arising under insur-
ance policies issued by any insurance company or 
other insurer. 
(4) INSURANCE COMPANY; OTHER INSURER; IN-
SURANCE AGENT OR BROKER.—The terms ‘‘insur-
ance company’’, ‘‘other insurer’’ and ‘‘insurance 
agent or broker’’ include any organizations and per-
sons authorized to engage in the insurance business 
under the laws of any State.