strophic risk borne by private insurers without in-
curring many of the additional costs imposed on pri-
vate insurers, and thus enable all insurers within the 
State to underwrite and price coverage at rates de-
signed to encourage property owners to acquire lev-
els of insurance appropriate to their individual risks. 
(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 
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. 
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) use a catastrophe risk database to perform 
research and analysis that encourages standardiza-
tion of the risk-linked securities market; 
(6) perform any other functions, other than as-
suming risk or incurring debt, that are deemed nec-
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. 
(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). 
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 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. 
(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