113 HR 737 IH: Homeowners’ Defense Act of 2013
U.S. House of Representatives
2013-02-14
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; table of
contents
(a)This Act may be cited as the Homeowners’ Defense Act of
2013
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Establishment; status; principal office;
membership.
Sec. 4. Functions.
Sec. 5. Powers.
Sec. 6. Nonprofit entity; conflicts of interest;
audits.
Sec. 7. Management.
Sec. 8. Staff; experts and consultants.
Sec. 9. Federal liability.
Sec. 10. Authorization of appropriations.
2.
(a)The
Congress finds that—
(1)the United States has a history of
catastrophic natural disasters, including hurricanes, tornadoes, flood, fire,
earthquakes, and volcanic eruptions;
(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 investment in their home represents their single biggest
asset and the protection of that investment is paramount 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 policyholders (in the case of mutually owned companies), have thus
significantly raised premiums and curtailed insurance coverage in States
exposed to major catastrophes;
(7)such effects on
the insurance industry have been harmful to economic activity in States exposed
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 insured losses to homeowners in
excess of $50,000,000,000;
(9)while the total costs of Hurricane Sandy
have not yet been calculated, Fitch Ratings, a global credit ratings agency,
has estimated that insured losses will amount to between $20,000,000,000 and
$25,000,000,000;
(10)the Federal
Government has provided and will continue to provide resources to pay for
losses from future catastrophes; and
(11)it is the proper
role of the Federal Government to prepare for and protect its citizens from
catastrophes and to facilitate consumer protection, victim assistance, and
recovery, including financial recovery.
(b)The purpose of this Act is to establish a
national catastrophic risk consortium to ensure the availability and
affordability of homeowners’ insurance coverage for catastrophic events.
3.Establishment; status;
principal office; membership
(a)There
is established an entity to be known as the National Catastrophe Risk
Consortium (in this Act referred to as the
Consortium).
(b)The
Consortium is not a department, agency, or instrumentality of the United States
Government.
(c)The principal office and place of business of the
Consortium shall be such location within the United States determined by the
Board of Directors to be the most advantageous for carrying out the purpose and
functions of the Consortium.
(d)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.
4.The Consortium shall—
(1)work with all States, particularly those
participating 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
financial instruments linked to the catastrophe risks insured or reinsured
through members of the Consortium in the capital markets;
(3)coordinate
reinsurance contracts between participating, qualified reinsurance funds and
private parties;
(4)act as a
centralized repository of State risk information that can be accessed by
private-market participants seeking to participate in the transactions
described in paragraphs (2) and (3) of this section;
(5)establish a
catastrophe risk database to perform research and analysis that encourages
standardization of the risk-linked securities market;
(6)perform any other
functions, other than assuming risk or incurring debt, that are deemed
necessary to aid in the transfer of catastrophe risk from participating States
to private parties; and
(7)submit annual reports to Congress
describing the activities of the Consortium for the preceding year, and the
first such annual report shall include an assessment of the costs to States and
regions associated with catastrophe risk and an analysis of the costs and
benefits, for States not participating in the Consortium, of such
nonparticipation.
5.The Consortium—
(1)may make and
perform such contracts and other agreements with any individual or other
private or public entity however designated and wherever 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
necessary and incident to carrying out this Act.
6.Nonprofit entity;
conflicts of interest; audits
(a)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)No director, officer, or employee of the Consortium
shall in any manner, directly or indirectly, participate in the deliberation
upon or the determination of any question affecting his or her personal
interests or the interests of any Consortium, partnership, or organization in
which he or she is directly or indirectly interested.
(c)
(1)The financial statements of the Consortium shall be audited
annually in accordance with generally accepted auditing standards by
independent certified public accountants.
(2)The
report of each annual audit pursuant to paragraph (1) shall be included in the
annual report submitted in accordance with section 4(7).
(d)Prohibition on
election and lobbying activities
(1)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—
(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 contribution, candidate,
Federal office, and political committee have the
meanings given such terms in section 301 of the Federal Election Campaign Act
of 1971 (2 U.S.C. 431).(2)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 expenditures for the purpose of influencing any such election;
(B)employ or retain any person who engages in
influencing legislating (as such term is defined in section 4911(d) of the
Internal Revenue 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.
7.
(a)Board of
directors; membership; designation of chairperson
(1)The management of the Consortium shall be vested in a
board of directors (referred to in this Act as the Board) composed
of not less than 3 members.
(2)The
Secretary of the Treasury, or the designee of the Secretary, shall serve as the
chairperson of the Board.
(3)The
members of the Board shall include—
(A)the Secretary of
Homeland Security and the Secretary of Commerce, or the designees 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 participating in the Consortium, who shall be appointed by such
State.
(b)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)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 payable for level IV of the Executive Schedule under
section 5315 of title 5, United States Code, as in effect 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)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)Members of the Consortium 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.
(d)A
majority of the Board shall constitute a quorum.
(e)The Board shall appoint an executive director of the
Consortium on such terms as the Board may determine.
8.Staff; experts and
consultants
(a)
(1)The
Board of the Consortium may appoint and terminate such other staff as are
necessary to enable the Consortium to perform its duties.
(2)The
Board of the Consortium may fix the compensation of the executive director and
other staff.
(b)The Board shall procure the services of experts and
consultants as the Board considers appropriate.
9.The Federal
Government and the Consortium shall not bear any liabilities arising from the
actions of the Consortium. Participating States shall retain all catastrophe
risk until the completion of a transaction described in paragraphs (2) and (3)
of section 4.
10.Authorization of
appropriationsThere are
authorized to be appropriated to carry out this Act $20,000,000 for each of
fiscal years 2014 through 2018.