I 
112TH CONGRESS 
1ST SESSION H. R. 2582 
To ensure the availability and affordability of homeowners’ insurance coverage 
for catastrophic events. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 19, 2011 
Ms. WILSON of Florida introduced the following bill; which was referred to 
the Committee on Financial Services 
A BILL 
To ensure the availability and affordability of homeowners’ 
insurance coverage for catastrophic events. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Homeowners’ Defense Act of 2011’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Findings and purposes. 
TITLE I—NATIONAL CATASTROPHE RISK CONSORTIUM 
Sec. 101. Establishment; status; principal office; membership. 
Sec. 102. Functions. 
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Sec. 103. Powers. 
Sec. 104. Nonprofit entity; conflicts of interest; audits. 
Sec. 105. Management. 
Sec. 106. Staff; experts and consultants. 
Sec. 107. Federal liability. 
Sec. 108. Authorization of appropriations. 
TITLE II—CATASTROPHE OBLIGATION GUARANTEES 
Sec. 201. Purposes. 
Sec. 202. Establishment of debt guarantee program. 
Sec. 203. Effect of guarantee. 
Sec. 204. Full faith and credit. 
Sec. 205. Fees for guarantees; amount; collection. 
Sec. 206. Payment of losses. 
Sec. 207. Regulations. 
TITLE III—REINSURANCE COVERAGE FOR ELIGIBLE STATE 
PROGRAMS 
Sec. 301. Program authority. 
Sec. 302. Contract principles. 
Sec. 303. Terms of reinsurance contracts. 
Sec. 304. Maximum Federal liability. 
Sec. 305. Federal Natural Catastrophe Reinsurance Fund. 
Sec. 306. Regulations. 
TITLE IV—MITIGATION GRANT PROGRAM 
Sec. 401. Mitigation grant program. 
TITLE V—GENERAL PROVISIONS 
Sec. 501. Eligible State programs. 
Sec. 502. Study and conditional coverage of commercial residential lines of in-
surance. 
Sec. 503. Study of risk-based pricing and State program rates. 
Sec. 504. Definitions. 
Sec. 505. Regulations. 
SEC. 2. FINDINGS AND PURPOSES. 
(a) FINDINGS.—The Congress finds that— 
(1) the United States has a history of cata-
strophic natural disasters, including hurricanes, tor-
nadoes, flood, fire, earthquakes, and volcanic erup-
tions; 
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(2) although catastrophic natural disasters 
occur infrequently, they will continue to occur and 
are predictable; 
(3) such disasters generate large economic 
losses and a major component of those losses comes 
from damage and destruction to homes; 
(4) for the majority of Americans, their invest-
ment in their home represents their single biggest 
asset and the protection of that investment is para-
mount to economic and social stability; 
(5) the United States needs to take and support 
State actions to be better prepared for and better 
protected from catastrophes; 
(6) as the risk of catastrophic losses grows, so 
do the risks that any premiums collected by private 
insurers for extending coverage will be insufficient to 
cover future catastrophes, and private insurers, in 
an effort to protect their shareholders and policy-
holders (in the case of mutually owned companies), 
have thus significantly raised premiums and cur-
tailed insurance coverage in States exposed to major 
catastrophes; 
(7) such effects on the insurance industry have 
been harmful to economic activity in States exposed 
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to major catastrophes and have placed significant 
burdens on residents of such States; 
(8) Hurricanes Katrina, Rita, and Wilma 
struck the United States in 2005, causing over 
$200,000,000,000 in total economic losses, and in-
sured 
losses 
to 
homeowners 
in 
excess 
of 
$50,000,000,000; 
(9) the Federal Government has provided and 
will continue to provide resources to pay for losses 
from future catastrophes; 
(10) when Federal assistance is provided to the 
States, accountability for Federal funds disbursed is 
paramount; 
(11) the Government Accountability Office or 
other appropriate agencies must have the means in 
place to confirm that Federal funds for catastrophe 
relief have reached the appropriate victims and have 
contributed to the recovery effort as efficiently as 
possible so that taxpayer funds are not misspent and 
citizens are enabled to rebuild and resume produc-
tive activities as quickly as possible; 
(12) States that are recipients of Federal funds 
must be responsible to account for and provide an 
efficient means for distribution of funds to home-
owners to enable the rapid rebuilding of local econo-
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mies after a catastrophic event without unduly bur-
dening taxpayers who live in areas seldom affected 
by natural disasters; 
(13) State insurance and reinsurance programs 
can provide a mechanism for States to exercise that 
responsibility if they appropriately underwrite and 
price risk, and if they pay claims quickly and within 
established contractual terms; 
(14) making available Federal guarantees to en-
hance the capability of eligible State programs to 
issue debt will minimize the exposure of State and 
Federal taxpayers who otherwise may bear the con-
sequences of underfunded programs or under-in-
sured communities following catastrophic events, es-
pecially during today’s historic market turmoil; and 
(15) it is the proper role of the Federal Govern-
ment to prepare for and protect its citizens from ca-
tastrophes and to facilitate consumer protection, vic-
tim assistance, and recovery, including financial re-
covery. 
(b) PURPOSES.—The purposes of this Act are to es-
tablish a program to provide Federal support for State- 
sponsored insurance programs to help homeowners pre-
pare for and recover from the damages caused by natural 
catastrophes, to encourage mitigation and prevention for 
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such catastrophes, to promote the use of private market 
capital as a means to insure against such catastrophes, 
to expedite the payment of claims and better assist in the 
financial recovery from such catastrophes. 
TITLE 
I—NATIONAL 
CATAS-
TROPHE RISK CONSORTIUM 
SEC. 101. ESTABLISHMENT; STATUS; PRINCIPAL OFFICE; 
MEMBERSHIP. 
(a) ESTABLISHMENT.—There is established an entity 
to be known as the ‘‘National Catastrophe Risk Consor-
tium’’ (in this title referred to as the ‘‘Consortium’’). 
(b) STATUS.—The Consortium is not a department, 
agency, or instrumentality of the United States Govern-
ment. 
(c) PRINCIPAL OFFICE.—The principal office and 
place of business of the Consortium shall be such location 
within the United States determined by the Board of Di-
rectors to be the most advantageous for carrying out the 
purpose and functions of the Consortium. 
(d) MEMBERSHIP.—Any State that has established a 
reinsurance fund or has authorized the operation of a 
State residual insurance market entity, or State-sponsored 
provider of natural catastrophe insurance, shall be eligible 
to participate in the Consortium. 
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SEC. 102. FUNCTIONS. 
The Consortium shall— 
(1) work with all States, particularly those par-
ticipating in the Consortium, to gather and maintain 
an inventory of catastrophe risk obligations held by 
State reinsurance funds, State residual insurance 
market entities, and State-sponsored providers of 
natural catastrophe insurance; 
(2) at the discretion of the affected members 
and on a conduit basis, issue securities and other fi-
nancial instruments linked to the catastrophe risks 
insured or reinsured through members of the Con-
sortium in the capital markets; 
(3) coordinate reinsurance contracts between 
participating, qualified reinsurance funds and pri-
vate parties; 
(4) act as a centralized repository of State risk 
information that can be accessed by private-market 
participants seeking to participate in the trans-
actions described in paragraphs (2) and (3) of this 
section; 
(5) establish a catastrophe risk database to per-
form research and analysis that encourages stand-
ardization of the risk-linked securities market; 
(6) perform any other functions, other than as-
suming risk or incurring debt, that are deemed nec-
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essary to aid in the transfer of catastrophe risk from 
participating States to private parties; and 
(7) submit annual reports to Congress describ-
ing the activities of the Consortium for the pre-
ceding year, and the first such annual report shall 
include an assessment of the costs to States and re-
gions associated with catastrophe risk and an anal-
ysis of the costs and benefits, for States not partici-
pating in the Consortium, of such nonparticipation. 
SEC. 103. POWERS. 
The Consortium— 
(1) may make and perform such contracts and 
other agreements with any individual or other pri-
vate or public entity however designated and wher-
ever situated, as may be necessary for carrying out 
the functions of the Consortium; and 
(2) shall have such other powers, other than the 
power to assume risk or incur debt, as may be nec-
essary and incident to carrying out this Act. 
SEC. 104. NONPROFIT ENTITY; CONFLICTS OF INTEREST; 
AUDITS. 
(a) NONPROFIT ENTITY.—The Consortium shall be 
a nonprofit entity and no part of the net earnings of the 
Consortium shall inure to the benefit of any member, 
founder, contributor, or individual. 
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(b) CONFLICTS OF INTEREST.—No director, officer, 
or employee of the Consortium shall in any manner, di-
rectly or indirectly, participate in the deliberation upon or 
the determination of any question affecting his or her per-
sonal interests or the interests of any Consortium, part-
nership, or organization in which he or she is directly or 
indirectly interested. 
(c) AUDITS.— 
(1) ANNUAL AUDIT.—The financial statements 
of the Consortium shall be audited annually in ac-
cordance with generally accepted auditing standards 
by independent certified public accountants. 
(2) REPORTS.—The report of each annual audit 
pursuant to paragraph (1) shall be included in the 
annual report submitted in accordance with section 
102(7). 
(d) PROHIBITION ON ELECTION AND LOBBYING AC-
TIVITIES.— 
(1) FEDERAL.—The Consortium may not— 
(A) make any contribution to a candidate 
for election for Federal office or to a political 
committee; 
(B) employ or retain— 
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(i) a registered lobbyist under the 
Lobbying Disclosure Act of 1995 (2 U.S.C. 
1601 et seq.); or 
(ii) an organization that employs one 
or more lobbyists and is registered under 
section 4(a)(2) of such Act (2 U.S.C. 
1603(a)(2)); or 
(C) provide any thing of value, other than 
educational materials or information, to any 
elected official of the Federal Government. 
For purposes of this paragraph, the terms ‘‘con-
tribution’’, ‘‘candidate’’, ‘‘Federal office’’, and ‘‘po-
litical committee’’ have the meanings given such 
terms in section 301 of the Federal Election Cam-
paign Act of 1971 (2 U.S.C. 431). 
(2) CONSORTIUM.—The Consortium may not— 
(A) make any contribution to a candidate 
for election for any State or local office or to 
any committee, club, association, or other group 
that receives contributions or makes expendi-
tures for the purpose of influencing any such 
election; 
(B) employ or retain any person who en-
gages in influencing legislating (as such term is 
defined in section 4911(d) of the Internal Rev-
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enue Code of 1986 (26 U.S.C. 4911(d))) of any 
State or local legislative body; or 
(C) provide any thing of value, other than 
educational materials or information, to any 
elected official of any State or local government. 
SEC. 105. MANAGEMENT. 
(a) BOARD OF DIRECTORS; MEMBERSHIP; DESIGNA-
TION OF CHAIRPERSON.— 
(1) BOARD OF DIRECTORS.—The management 
of the Consortium shall be vested in a board of di-
rectors (referred to in this title as the ‘‘Board’’) 
composed of not less than 3 members. 
(2) CHAIRPERSON.—The Secretary of the 
Treasury, or the designee of the Secretary, shall 
serve as the chairperson of the Board. 
(3) MEMBERSHIP.—The members of the Board 
shall include— 
(A) the Secretary of Homeland Security 
and the Secretary of Commerce, or the des-
ignees of such Secretaries, respectively, but only 
during such times as there are fewer than two 
States participating in the Consortium; and 
(B) a member from each State partici-
pating in the Consortium, who shall be ap-
pointed by such State. 
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(b) BYLAWS.—The Board may prescribe, amend, and 
repeal such bylaws as may be necessary for carrying out 
the functions of the Consortium. 
(c) COMPENSATION, ACTUAL, NECESSARY, 
AND 
TRANSPORTATION EXPENSES.— 
(1) NON-FEDERAL EMPLOYEES.—A member of 
the Board who is not otherwise employed by the 
Federal Government shall be entitled to receive the 
daily equivalent of the annual rate of basic pay pay-
able for level IV of the Executive Schedule under 
section 5315 of title 5, United States Code, as in ef-
fect from time to time, for each day (including travel 
time) during which such member is engaged in the 
actual performance of duties of the Consortium. 
(2) FEDERAL EMPLOYEES.—A member of the 
Board who is an officer or employee of the Federal 
Government shall serve without additional pay (or 
benefits in the nature of compensation) for service 
as a member of the Consortium. 
(3) TRAVEL EXPENSES.—Members of the Con-
sortium shall be entitled to receive travel expenses, 
including per diem in lieu of subsistence, equivalent 
to those set forth in subchapter I of chapter 57 of 
title 5, United States Code. 
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