Sec. 100232. REINSURANCE

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## SEC. 100232 REINSURANCE ###

(a)FEMA and GAO Reports on Privatization Not later than 18 months after the date of enactment of this Act, the Administrator and the Comptroller General of the United States shall each— ####

(1)conduct a separate study to assess a broad range of options, methods, and strategies for privatizing the National Flood Insurance Program; and ####

(2)submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate with recommendations for the best manner to accomplish the privatization described in paragraph (1). ###

(b)Private Risk-management Initiatives The Administrator may carry out such private risk-management initiatives as are otherwise authorized under applicable law, as the Administrator considers appropriate to determine the capacity of private insurers, reinsurers, and financial markets to assist communities, on a voluntary basis only, in managing the full range of financial risks associated with flooding. ###

(c)Reinsurance Assessment ####

(1)Private market pricing assessment Not later than 12 months after the date of enactment of this Act, the Administrator shall submit to Congress a report that— #####

(A)assesses the capacity of the private reinsurance, capital, and financial markets to assist communities, on a voluntary basis, in managing the full range of financial risks associated with flooding by requesting proposals to assume a portion of the insurance risk of the National Flood Insurance Program; #####

(B)describes any responses to the request for proposals under subparagraph (A); #####

(C)assesses whether the rates and terms contained in any proposals received by the Administrator are— ######

(i)reasonable and appropriate; and ######

(ii)in an amount sufficient to maintain the ability of the National Flood Insurance Program to pay claims; #####

(D)describes the extent to which carrying out the proposals received by the Administrator would minimize the likelihood that the Administrator would use the borrowing authority under section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016); #####

(E)describes fluctuations in historical reinsurance rates; and #####

(F)includes an economic cost-benefit analysis of the impact on the National Flood Insurance Program if the Administrator were to exercise the authority under section 1335(a)(2) of the National Flood Insurance Act of 1968 (42 U.S.C. 4055(a)(2)), as added by this section, to secure reinsurance of coverage provided by the National Flood Insurance Program from the private market. ####

(2)Protocol for release of data The Administrator shall develop a protocol, including adequate privacy protections, to provide for the release of data sufficient to conduct the assessment required under paragraph (1). ###

(d)Reinsurance The National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.) is amended— ####

(1)in section 1331(a)(2) (42 U.S.C. 4051(a)(2)), by inserting “, including as reinsurance of coverage provided by the flood insurance program” before “, on such terms”; ####

(2)in section 1332(c)(2) (42 U.S.C. 4052(c)(2)), by inserting “or reinsurance” after “flood insurance coverage”; ####

(3)in section 1335(a) (42 U.S.C. 4055(a))— #####

(A)by striking “ The Director ” and inserting the following: > > #### “(1) In general > > The Administrator” > ; and #####

(B)by adding at the end the following: > > #### “(2) Private reinsurance > > The Administrator is authorized to secure reinsurance of coverage provided by the flood insurance program from the private market at rates and on terms determined by the Administrator to be reasonable and appropriate, in an amount sufficient to maintain the ability of the program to pay claims.” > ; ####

(4)in section 1346(a) (42 U.S.C. 4082(a))— #####

(A)in the matter preceding paragraph (1), by inserting after “for the purpose of” the following: “securing reinsurance of insurance coverage provided by the program or for the purpose of”; #####

(B)in paragraph (1)— ######

(i)by striking “estimating” and inserting “Estimating”; and ######

(ii)by striking the semicolon at the end and inserting a period; #####

(C)in paragraph (2)— ######

(i)by striking “receiving” and inserting “Receiving”; and ######

(ii)by striking the semicolon at the end and inserting a period; #####

(D)in paragraph (3)— ######

(i)by striking “making” and inserting “Making”; and ######

(ii)by striking “‘; and’” and inserting a period; #####

(E)by redesignating paragraph

(4)as paragraph (5); #####

(F)in paragraph (5), as so redesignated, by striking “otherwise” and inserting “Otherwise”; and #####

(G)by inserting after paragraph

(3)the following new paragraph: > > #### “(4) > > Placing reinsurance coverage on insurance provided by such program.” > ; and ####

(5)in section 1370(a)(3) (42 U.S.C. 4121(a)(3)), by striking “include any” and all that follows and inserting the following: “include any organization or person that is authorized to engage in the business of insurance under the laws of any State, subject to the reporting requirements of the Securities Exchange Act of 1934 pursuant to section 13(a) or 15(d) of such Act (15 U.S.C. 78m(a) and 78o(d)), or authorized by the Administrator to assume reinsurance on risks insured by the flood insurance program;”. ###

(e)Assessment of Claims-paying Ability **[**[42 U.S.C. 4027b](/us/usc/t42/s4027b)**]** ####

(1)Assessment #####

(A)Assessment required ######

(i)In general Not later than September 30 of each year, the Administrator shall conduct an assessment of the ability of the National Flood Insurance Program to pay claims. ######

(ii)Private market reinsurance The assessment under this paragraph for any year in which the Administrator exercises the authority under section 1335(a)(2) of the National Flood Insurance Act of 1968 (42 U.S.C. 4055(a)(2)), as added by this section, to secure reinsurance of coverage provided by the National Flood Insurance Program from the private market shall include information relating the use of private sector reinsurance and reinsurance equivalents by the Administrator, whether or not the Administrator used the borrowing authority under section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016). ######

(iii)First assessment The Administrator shall conduct the first assessment required under this paragraph not later than September 30, 2012. #####

(B)Considerations In conducting an assessment under subparagraph (A), the Administrator shall take into consideration regional concentrations of coverage written by the National Flood Insurance Program, peak flood zones, and relevant mitigation measures. ####

(2)Annual report of the administrator of activities under the national flood insurance program The Administrator shall— #####

(A)include the results of each assessment in the report required under section 100231(b); and #####

(B)not later than 30 days after the date on which the Administrator completes an assessment required under paragraph (1), make the results of the assessment available to the public.

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