Sec. 101. Disaster insurance program
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The Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5121 et seq.) is amended by adding at the end the following new title: The National Disaster Insurance Corporation established under subtitle B shall establish and carry out an insurance program under this subtitle to provide coverage to States against certain losses and costs arising from disasters, which shall be funded solely by State premiums and payments and shall operate on an actuarially sound basis.
The Corporation shall establish the terms and conditions for the provision of disaster insurance under the disaster insurance program of the Corporation, which shall include— the general terms and conditions of insurance coverage; limitations on the scope and amounts of coverage provided; the establishment, under section 804, of appropriate annual premium charges; appropriate loss deductibles; and the methods by which proved and approved claims for losses shall be adjusted and paid.
In establishing the terms and conditions under this section, the Corporation shall ensure that the insurance program accomplishes the following objectives: The amount of coverage provided under the program shall be sufficient to provide State participants with amounts adequate for recovery from disasters. The risks and costs of disasters shall be equitably distributed among the State participants. Participation in the program by all States shall be encouraged. The terms and conditions of the insurance program shall be established in consultation with the Administrator of the Federal Emergency Management Agency, the Disaster Insurance Advisory Committee under section 826, and other relevant Federal agencies and shall be effective only if approved by the Administrator and the Advisory Committee.
The insurance program shall provide insurance coverage under this subtitle for each participant in the Corporation. The initial coverage available under the program shall take effect on October 1, 2019. The insurance program may provide insurance coverage only to participants and each State shall be eligible to become a participant pursuant to the requirements of section 821(d). The insurance program may provide coverage only for the following losses and costs to a participant that arise from a disaster:
Costs of performing any work or services essential to saving lives and protecting and preserving property or public health and safety, including— removing debris and wreckage; conducting search and rescue, and providing emergency medical care, emergency mass care, emergency shelter, food, water, medicine, and other essential needs, including movement of supplies or persons; clearing roads and constructing temporary bridges necessary to the performance of emergency tasks and essential community services; providing temporary facilities for schools and other essential community services; demolishing unsafe structures that endanger the public; warning of further risks and hazards; disseminating of public information and assistance regarding health and safety measures; and reducing immediate threats to life, property, and public health and safety.
Costs of distributing or rendering food, medicine, and other consumable supplies, and other services and assistance to victims of the disaster. Costs of coordinating relief efforts. Costs of obtaining technical advice regarding— disaster management and control; performing essential community services; and disseminating information regarding public health and safety, issuing warnings of risks and hazards. Costs of conducting hazard mitigation measures that the Corporation determines to be cost-effective and that will substantially reduce the risk of future damage, hardship, loss, or suffering in any area affected by the disaster.
Costs for the repair, restoration, reconstruction, or replacement of facilities (including public, private, and private nonprofit facilities, and commercial and agricultural facilities) and residences that are damaged or destroyed by the disaster and for associated expenses incurred by the owners of the facilities and residences, and losses from damage or destruction to such facilities and residences. Costs of providing, by purchase or lease, temporary housing (including unoccupied habitable dwellings), suitable rental housing, mobile homes, or other readily fabricated dwellings to persons who, as a result of the disaster, require temporary housing.
Costs of providing assistance on a temporary basis in the form of mortgage or rental payments to or on behalf of individuals and families who, as a result of financial hardship caused by the disaster, have received written notice of dispossession or eviction from a residence by reason of a foreclosure of any mortgage or lien, cancellation of any contract of sale, or termination of any lease, entered into prior to such disaster, except that such costs may not cover assistance provided for a duration exceeding the period of financial hardship or 18 months, whichever is less.
Costs of professional counseling services to victims of the disaster to relieve mental health problems caused or aggravated by the disaster or its aftermath. Loss to a participant of a substantial portion of tax and other revenues, but only if the participant demonstrates a need for reimbursement of such losses to perform its governmental functions. Costs of establishing temporary communications systems in the area affected by the disaster. Costs of providing temporary public transportation service in the area affected by the disaster to meet emergency needs and to provide transportation to governmental offices, supply centers, stores, post offices, schools, major employment centers, and such other places as may be necessary in order to enable the community to resume its normal pattern of life as soon as possible.
Costs of equipment, supplies, and personnel for the suppression of any fire on publicly or privately owned forest or grassland. Losses and costs associated with providing the following assistance: Loans for— the repair, rehabilitation, or replacement of properties of small business concerns that are damaged or destroyed as a result of the disaster; refinancing mortgages or other liens against residences and properties of small business concerns that are destroyed or substantially damaged as a result of the disaster; and assisting small business concerns that suffer substantial economic injury as a result of the disaster.
Emergency loans to persons whose farming, ranching, or aquaculture operations have been substantially affected by a disaster. Assistance for the repair or reconstruction of highways, roads, and trails that suffer serious damage as the result of the disaster. Insurance for mortgages and rehabilitation loans for 1- to 4-family residences of mortgagors and borrowers whose residences are destroyed or damaged as a result of the disaster. Any other costs or losses sustained in providing disaster relief in the State, that are determined by the Corporation to be appropriate and which are not inconsistent with the provisions of this subtitle.
The insurance program may not provide coverage for the following losses and costs: Any losses or costs not arising from a disaster. Any losses or costs sustained by or relating to Federal facilities. The Corporation shall require each State, as a condition of participation in the Corporation and coverage under the insurance program during any fiscal year, to make a premium payment to the Corporation for such fiscal year in an amount determined in accordance with this section.
The Corporation shall annually review the premium payments charged to each participant and, if appropriate, adjust such payment amounts. The premium payments established under this section shall be— established using generally accepted actuarial principles; to the maximum extent practicable, based on a consideration of the respective risks involved, including differences in— the risk of occurrence of disasters; hazard mitigation measures in place, including any disaster preparedness plan of the participant for mitigation, warning, emergency operations, rehabilitation, and recovery; anticipated covered losses and costs in the event of a disaster; and the extent to which other sources of insurance or assistance will cover costs and losses for types of property and activities covered in a State; and adequate, on the basis of generally accepted actuarial principles, to provide— amounts in the reserve account of the Corporation under section 823 for anticipated claims; and for any administrative and operating expenses of the Corporation in carrying out the insurance program.
The Corporation may not assess any premium charges established under this section before the charges have been certified as actuarially sound by the Disaster Insurance Advisory Commission established by section 826. The Corporation shall credit the amount of the payment made by a State pursuant to section 821(d)(1) toward any premium charges under this section owed by the State. For each fiscal year, the amount of the premium charges owed for such fiscal year by each State that is participating in the Corporation and the insurance program under this subtitle shall be reduced by the amount determined for such State under paragraph (2).
For a fiscal year, the amount determined under this paragraph for each State that is a participant shall be the amount that bears the same percentage to the full premium charges owed by such State for such fiscal year as the total amount appropriated pursuant to paragraph
(3)for such fiscal year bears to the sum of all premium charges owed by all participating States for such fiscal year. There is authorized to be appropriated to the Corporation for each fiscal year an amount equal to 10 percent of the sum of all premium charges owed by all States participating in the Corporation and the insurance program under this subtitle for such fiscal year. The Corporation shall adjust and pay all claims for proved and approved losses and costs covered by insurance provided under this subtitle. The amount of any claim paid for losses or costs under the insurance program may not include any amount for any portion of such losses or costs covered by amounts provided under any other source of insurance or financial assistance. If a facility or residence located in a special flood hazard area identified for more than 1 year by the Administrator pursuant to the National Flood Insurance Act of 1968 is damaged or destroyed by flooding in a disaster and such facility or residence is not covered on the date of such flooding by flood insurance, the amount of a claim for coverage under this subtitle which would otherwise be paid under the insurance program under this subtitle for costs of repair, restoration, reconstruction, and replacement of such facility or residence and associated expenses shall be reduced in accordance with paragraph (2). The amount of the reduction in a claim for a facility or residence pursuant to paragraph
(1)shall be the lesser of— the value of such facility or residence on the date of the flood damage or destruction; or the maximum amount of insurance proceeds which would have been payable with respect to such facility or residence if such facility had been covered by flood insurance under the National Flood Insurance Act of 1968 on such date. Paragraphs
(1)and
(2)shall not apply to a private nonprofit facility or residence that is not covered by flood insurance solely because of the local government’s failure to participate in the flood insurance program under the National Flood Insurance Act of 1968. If the Corporation disallows a claim or the claimant refuses to accept the amount allowed upon any claim, the claimant may, before the expiration of the 1-year period beginning upon the claimant’s receipt of written notice of the disallowance or partial disallowance of the claim, institute an action on such claim against the Corporation in the United States District Court for the District of Columbia. Original exclusive jurisdiction is hereby conferred upon such Court to hear and determine such action without regard to the amount in controversy. There is authorized to be established a body corporate to be known as the National Disaster Insurance Corporation, which shall be subject to the provisions of this title. The Corporation shall not be an agency or establishment of the Federal Government. The principal office of the Corporation shall be located in the District of Columbia or the metropolitan area thereof. The purpose of the Corporation shall be to carry out the insurance program under subtitle A. The Corporation shall be under the direction of a board of directors who shall be elected by the participants in the Corporation. Members of the board shall not be considered, by reason of such membership, to be employees of the Federal Government. Except as otherwise provided by the Corporation pursuant to section 822(2)— the board shall be composed of 7 members, selected by a majority of the participants in the Corporation through an election
(i)that shall take place at the initial organizational meeting of the Corporation held pursuant to subsection (e)(1), and
(ii)in which each of the participants shall have 1 vote; and the term of each member of the board shall be 5 years. A State shall be considered as a participant in the Corporation for purposes of this title only if the State complies with the following requirements: The State has made a payment to the Corporation (or to the Administrator pursuant to subsection (e)(2)) in an amount equal to 1 percent of the aggregate amount of Federal financial assistance provided, during fiscal years 2009 through 2018, to the State (or to or on behalf of persons or property located in the State) for disaster relief relating to a major disaster or emergency declared under this Act, as determined by the Administrator. For purposes of this paragraph, the term Federal financial assistance shall include any grant, payment, subsidy, or loan provided by any agency of the Federal Government, and the amount of assistance provided under a loan shall be considered to be an amount equal to the principal obligation under the loan. The State has paid any premium charges assessed for such State pursuant to section 804, in accordance with the requirements established by the Corporation for payment of such charges. For purposes of the organizational meeting under subsection (e)(1), any State that complies with paragraph
(1)of this subsection shall be considered as a participant. The Administrator shall call an organizational meeting for the Corporation to be held not later than August 31, 2019, at which the participants shall elect the initial members of the board of directors and shall take such other actions as may be necessary to establish the Corporation in accordance with this title. The Administrator shall notify each State of the meeting and the purposes of the meeting and shall organize and chair the meeting. Before the organization of the Corporation pursuant to paragraph (1), the Administrator shall collect payments under subsection (d)(1) on behalf of the Corporation. The Corporation shall be privately owned by the participants in the insurance program. Obligations and indebtedness of the Corporation shall not be considered obligations and indebtedness of the Federal Government or guaranteed by the Federal Government. The Corporation may appoint and hire officers and employees at the discretion of the Corporation, but may not pay any officer or employee at a rate exceeding the rate of basic pay payable for level IV of the Executive Schedule. Any such officers and employees shall not be considered officers or employees of the Federal Government and shall not be subject to the provisions of title 5, United States Code. The Corporation shall have the power— to adopt, alter, and use a corporate seal; to make and enforce contracts and agreements appropriate to carry out this title; to settle, adjust, compromise, and release claims against the corporation; to sue and be sued; to acquire, hold, and own, and deal with and dispose of real and personal property to the extent appropriate to carry out this title; to have succession until dissolved by an Act of Congress; and to exercise all other lawful powers necessary or appropriate to carry out this title. After consultation with the Administrator and other appropriate Federal agencies, the Corporation shall establish appropriate guidelines for the structure and operation of the Corporation and the insurance program, which— shall include standards relating to the vacancies, bylaws, and powers of the board; may include provisions, applicable only after October 1, 2019, establishing the composition of the board and the terms of office of the members of the board other than as provided for in section 821(c)(2); and shall include a minimum capital requirement pursuant to section 823(d). The Corporation shall establish and manage a reserve account for the operation of the insurance program. The reserve account of the Corporation shall be credited with— any premium charges under section 804 collected by the Corporation; any amounts appropriated for the Corporation pursuant to sections 804(e)(3) and 825(a); and any interest earned on investments of the Corporation pursuant to subsection (c)(2). Amounts in the reserve account of the Corporation shall be available— for payment of qualifying claims under the insurance program of participants, consistent with the terms and conditions established under section 802(a); to the extent that the Corporation determines that such amounts are in excess of current needs and the amount required to be held in the reserve account pursuant to subsection (d), for investment as the Corporation considers appropriate; for covering the costs of the Corporation and administering and operating the insurance program; and for covering travel expenses of members of the Disaster Insurance Advisory Commission established by section 826. The Corporation shall at all times maintain amounts in the reserve account equal to or in excess of the applicable minimum capital level determined under paragraph (2). The Corporation shall establish a series of minimum capital levels appropriate to ensure sufficient capitalization of the Corporation based on the nature and extent of the underwriting, investment, and other risks assumed by the Corporation. The capital levels shall not be effective unless approved by the Administrator. Any amounts deposited in the reserve account, including income derived from the investment of amounts under subsection (c)(2), shall be exempt from all taxation now or hereafter imposed by the United States, or by any State, county, municipality, or local taxing authority. To the extent that the amounts in the reserve fund are insufficient to pay claims and expenses of the Corporation and maintain amounts in accordance with the requirements under section 823(d), the Corporation may issue to the Secretary of the Treasury notes and other obligations to cover the insufficiency. The Secretary may purchase obligations issued under subsection
(a)only if the President determines that the financial condition of the Corporation is adequate to ensure repayment of the obligations. Such obligations shall have terms and conditions as determined by the Secretary of the Treasury. For purposes of carrying out this title, there is authorized to be appropriated to the Corporation an amount equal to the difference between— the sum of any balances remaining, at the end of September 30, 2019, in the Disaster Relief appropriation and the Disaster Assistance Direct Loan Program Account of the Federal Emergency Management Agency; and the amounts determined by the Administrator to be necessary to reserve from such appropriation and in such Account, for purposes of providing assistance pursuant to any major disaster or emergency that commences or occurs (or is declared or determined to have commenced or occurred) on or before September 30, 2019. Except as provided in subsection (a), section 804(e), and section 824, no Federal funds may be authorized, appropriated, or used to fund any activity of the Corporation. There is hereby established a commission to be known as the Disaster Insurance Advisory Commission (in this section referred to as the Commission ). The Commission shall be composed of 11 members appointed by the President, in consultation with the Administrator. Of the members of the Commission, not less than 6 shall be individuals who have been nominated for such appointment by States that are participants in the Corporation, except that (to the extent possible) not more than one such member may be appointed to the Commission pursuant to the nomination of any single State. Each member of the Commission shall have experience or expertise in at least one of the areas described in subparagraphs
(A)through
(D)of paragraph (2). The membership of the Commission shall, at all times, include— not less than 1 individual who has experience or expertise in actuarial issues relating to disaster insurance; not less than 1 individual who has experience or expertise in the management of insurance companies; not less than 1 individual who has experience or expertise in the regulation of insurance companies; and not less than 1 individual who has experience or expertise in disaster relief. Each member of the Commission shall be appointed for a term of 4 years, except as provided in subparagraph (B). As designated by the President at the time of appointment, of the members first appointed to the Commission— 5 shall be appointed for terms of 6 years; and 6 shall be appointed for terms of 4 years. The President shall designate a chairperson of the Commission from among members appointed to the Commission. Members of the Commission shall serve without pay. Each member of the Commission shall receive travel expenses, including per diem in lieu of subsistence, in accordance with sections 5702 and 5703 of title 5, United States Code, except that such expenses shall be paid by the Corporation. The Commission shall— in coordination with the Administrator, assist the Corporation in establishing the terms and conditions of the insurance program under subtitle A, review such terms and conditions, and approve or disapprove such terms and conditions as appropriate to carry out this title; and review the annual premium charges established under section 804 by the Corporation to determine whether such charges are established in compliance with the requirements of such section, and if so, certify such compliance to the Corporation. Section 14(a)(2)(B) of the Federal Advisory Committee Act (5 U.S.C. App.; relating to the termination of advisory committees) shall not apply to the Commission. As soon as practicable after October 1, 2019, the Comptroller General of the United States shall audit the activities of the Corporation and the Disaster Insurance Advisory Commission established by section 826 to ensure that such entities are complying with the provisions of this title. After the completion of the audit described in subsection (a), the Comptroller General shall conduct similar audits not less than once every 3 years. The Comptroller General shall submit reports of the audits performed under this section to the Congress. For purposes of this title: The term board means the board of directors of the Corporation. The term Corporation means the National Disaster Insurance Corporation. The term Administrator means the Administrator of the Federal Emergency Management Agency. The term disaster means any natural catastrophe (including any hurricane, tornado, storm, high water, winddriven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought), or, regardless of cause, any fire, flood, serious accident, or explosion, in or affecting any State or part of a State. The term insurance program means the program established under this title by the Corporation for disaster insurance coverage. .
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Sec. 101
Disaster insurance program
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