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‘‘(D) take all other actions necessary and
proper to carry out the operations of the Cor-
poration.
‘‘(4) EXCLUDED
POWERS.—The Corporation
shall not—
‘‘(A) exercise powers that are reserved to
the Federal Government as sovereign;
‘‘(B) have the power to commit any sov-
ereign government financially; and
‘‘(C) have as employees Federal employees
subject to title 5 of the United States Code.
‘‘(f) TAX STATUS.—
‘‘(1) IN GENERAL.—The Corporation shall be
subject to the Federal taxation applied to private
corporations, except as described in paragraph (2).
‘‘(2) NET OPERATING LOSS CARRYBACK.—Con-
sistent with the section 172(b)(1) of the Internal
Revenue Code of 1986 (26 U.S.C. 172(b)(1)), a net
operating loss of the Corporation for any taxable
year shall be a—
‘‘(A) net operating loss carryback to each
of the taxable years during the period—
‘‘(i) beginning with the taxable year in
which the Corporation commenced oper-
ation, and
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‘‘(ii) ending with the taxable year pre-
ceding the loss year, and
‘‘(B) a net operating loss carryover to each
of the 15 taxable years following the taxable
year of the loss.
‘‘(g) LIMITATIONS OF LIABILITY.—
‘‘(1) INDIVIDUAL MEMBERS.—Individual mem-
bers of the Corporation, as defined in subsection (b),
shall not be liable, or in any way responsible, for the
obligations of the Corporation and the trust ac-
counts described in section 906.
‘‘(2) UNDER FEDERAL LAW.—No action by the
Corporation or its Board pertaining to the plan of
operation described in section 902 or the rates de-
scribed in section 903 shall subject the Corporation
or the Board to liability under Federal law or any
law of a State if that action has been taken pursu-
ant to authority taken under this Act.
‘‘SEC. 902 PLAN OF OPERATION.
‘‘(a) ESTABLISHMENT.—
‘‘(1) DEVELOPMENT.—The Board shall develop
a plan of operation (hereinafter in this title referred
to as the ‘‘plan’’) describing the administration of
the Corporation and the provision of the insurance
coverages provided by the Corporation.
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‘‘(2) GENERAL CONTENTS.—The plan shall set
forth the specific policy and programmatic details,
including all guidelines, criteria, definitions, clari-
fications, and procedures necessary for the primary
insurance coverages described in subtitle B and the
reinsurance coverage described in subtitle C to oper-
ate under standard conditions of insurance which
shall be applicable in all States.
‘‘(3) INSURANCE
COVERAGE
PARTICULARS.—
The plan, at a minimum, shall include the following
particulars regarding the insurance coverages issued
or provided by the Corporation:
‘‘(A) The final rates, or adjustments there-
to, established under section 903.
‘‘(B) The specific terms and conditions
which shall include—
‘‘(i) coverage eligibility requirements;
‘‘(ii) coverage limits;
‘‘(iii) deductibles;
‘‘(iv) quota-share amounts as de-
scribed in section 914(c); and
‘‘(v) levels of retained losses as de-
scribed in section 923.
‘‘(C) The specific insurance forms and pol-
icy contracts.
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‘‘(D) The criteria for the settlement of in-
surance claims.
‘‘(4) MISCELLANEOUS PLAN PROVISIONS.—The
plan, at a minimum, shall include the following mis-
cellaneous provisions:
‘‘(A) The minimum financial viability
standards necessary for private insurers and
State insurance pools to qualify as eligible enti-
ties to purchase the reinsurance coverage under
section 921(b).
‘‘(B) The commercial lines of insurance
which have a significant loss potential from
earthquakes, volcanic eruptions, tsunamis, and
hurricanes that will be used in determining
commercial losses.
‘‘(C) The terms for the repayment of any
obligations issued in the private market pursu-
ant to section 901(e)(3)(C).
‘‘(D) The conditions for private insurers to
withdraw from acting as service providers of the
primary insurance coverages pursuant to sec-
tion 906(d)(3)(C).
‘‘(E) Appropriate limitations on private in-
surers acting as service providers of the pri-
mary insurance coverages under section 912(b)
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from withdrawing from offering property and
casualty insurance in the voluntary private mar-
ket in certain States.
‘‘(F) Grievance procedures for resolving
disputes among members of the Corporation re-
sulting from the decisions of the Board.
‘‘(5) PROPRIETARY
INFORMATION.—To the
maximum extent practicable, the plan of operation
shall protect as proprietary specific information pro-
vided by private insurers necessary to develop the
rates and specific terms and conditions of the insur-
ance coverages issued or provided by the Corpora-
tion.
‘‘(6) INSURER STABILITY IN THE INSURANCE
COVERAGES.—To the maximum extent practicable,
the plan of operation shall encourage stability with
respect to private insurer participation in the insur-
ance coverages issued or provided by the Corpora-
tion.
‘‘(b) APPROVAL OF THE PLAN.—The plan described
in paragraph (a), and amendments thereto, shall be re-
vised and approved by the Natural Disaster Insurance
Board of Actuaries according to the process described in
section 904(c).
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‘‘(c) ANNUAL REPORT.—The Board shall prepare a
written report annually on the overall operations of the
Corporation which shall be distributed to all members of
the Corporation and to the Independent Board of Actuar-
ies established in section 904.
‘‘SEC. 903. PRICING.
‘‘(a) ESTABLISHMENT OF RATES.—Using generally
accepted actuarial principles and consistent with section
904(d)(5), the Board shall develop and establish, and ad-
just when necessary, the rates for the primary insurance
coverages issued by the Corporation under section 911 and
rates for the reinsurance coverage provided by the Cor-
poration under section 921. Such rates, and adjustments
thereto, shall be based on historical aggregate losses sup-
plemented by natural disaster modeling techniques and
other scientific evidence and loss adjustment expenses cal-
culated to determine to their ultimate value and projected
through the utilization of trend analysis to a future point
of time.
‘‘(b) ACTUARIALLY
SOUND
REQUIREMENT.—The
rates established or adjusted under subsection (a) shall be
actuarially sound by reflecting the risk of loss to the in-
sured property from the natural disaster perils covered
and shall satisfy the following two actuarial principles: