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(h) may receive from or exchange with any State insurance commission or agency or with any private corporation or association engaged in the writing of insurance against property loss within the United States such loss-experience information as may be necessary to the establishment of premium rates for reinsurance authorized to be issued by the Corporation upon a sound actuarial basis and upon the lowest practicable level;
(i) shall be entitled to the free use of the United States mails in the same manner as the other executive agencies of the Government; and
(j) may exercise, by the Board or duly authorized officers or agents of the Corporation, all powers specifically granted by the provisions of this Act and such incidental powers as are necessary to carry out the functions and powers of the Corporation.
FUNCTIONS OF CORPORATION Sec. 8. (a) The Corporation is authorized to provide such reinsurance of insurance companies against loss on account of insurance carried by such companies against damage to, or loss of, real or personal property (including property owned by State or local governments) due to flood, tidal wave, earthquake, or hurricane, occurring within the United States or its Territories, as may be necessary to enable such companies to provide insurance against such damage or loss where it would otherwise be unavailable.
(b) The Corporation shall prescribe premium rates for the reinsurance authorized by this Act upon consideration of (1) the risks involved, and (2) the desirability in the public interest of providing insurance protection which would not otherwise be available.
(c) The Corporation shall by regulation provide for the determination of (1) the types of property with respect to which reinsurance will be granted, (2) the nature and limits of losses or damage which may be covered by such reinsurance, (3) such other matters as may be necessary to carry out the purposes of this Act.
(d) Reinsurance shall be provided by the Corporation under this Act only to the extent that it is not otherwise available at reasonable rates and upon reasonable conditions from private sources. In providing such reinsurance, the Commission shall utilize the facilities and service of private insurance companies to the maximum extent practicable.
PAYMENT OF CLAIMS
SEC. 9. Under such regulations as the Corporation may prescribe, it shall adjust and pay valid claims for losses covered by reinsurance under this Act. Upon disallowance by the Corporation of any such claim, the claimant, within one year after the date of mailing of notice of disallowance by the Corporation, may institute an action on such claim in the United States district court for the district in which the insured property or the major part thereof shall have been situated. Exclusive jurisdiction is hereby conferred upon such court to hear and determine such action without regard to the amount in controversy.
NATIONAL DISASTER INSURANCE FUND SEC. 10. (a) There is hereby established in the Treasury of the United States a permanent trust fund to be known as the national disaster insurance fund (referred to hereinafter as the "fund”). All premiums paid to the Corporation for reinsurance under this Act shall be deposited and covered into the Treasury to the credit of the fund, which, together with interest earned thereon, shall he available for the payment of liabilities under such reinsurance. Payments from the fund shall be made upon and in accordance with awards by the Corporation.
(b) The Corporation is authorized to set aside out of the fund such reserve amounts as may be required under accepted actuarial principles to meet all liabilities under such insurance. The Secretary of the Treasury is authorized to invest or reinvest all or any part of the remainder thereof in interest-bearing obligations of the Government of the United States, or in obligations guaranteed as to principal and interest by such Government, and to sell such obligations for the purposes of such fund.
(e) Administrative expenses of the Corporation shall not be paid from the fund, but shall be borne by the Government of the United States. There is hereby authorized to be appropriated to the Corporation, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary for the administration and operation of the Corporation.
SEC. 11. The Corporation shall make a comprehensive annual report of its operations to the Congress as soon as practicable after the first day of January in each year.
EXEMPTION FROM TAXATION
Sec. 12. The Corporation, including its franchise, capital, reserves and surplus, and its income and property, shall be exempt from all taxation now or hereafter imposed by the Government of the United States, any Territory, dependency or possession thereof, any State, county, or municipality, or by any other local taxing authority.
MISCELLANEOUS PROVISIONS SEC. 13. (a) The Board shall designate an agent upon whom service of process may be made in each State, Territory or jurisdiction in which property upon which the Corporation has issued insurance may be situated.
SEC. 14. Section 101 of the Government Corporation Control Act is amended (a) by striking out "and" immediately preceding the name "Tennessee Valley Associated Cooperatives, Incorporated,” and (b) by inserting immediately after such name a semicolon and the following: "and National Disaster Insurance Corporation."
SECTIONAL ANALYSIS OF NATIONAL DISASTER INSURANCE CORPORATION ACT OF
1956 (PROPOSED Carlson BILL) Short title
National Disaster Insurance Corporation Act of 1956. Section 2. Declaration of purpose
To promote national welfare by alleviating economic distress in United States from certain national disasters and impairment of interstate and foreign commerce by providing, through reinsurance of insurance companies, reasonable cost insurance against property damage from flood, tidal wave, earthquake, or hurricane. Section 3. Establishment of Corporation
(a) Creates National Disaster Insurance Corporation as United States agency, with main office in the District of Columbia and branches permitted elsewhere.
(b) Authorized capital is $50 million stock subscribed by United States. Authorizes appropriation of up to $50 million to Secretary of the Treasury to subscribe to such stock. Secretary to issue receipts to Corporation as evidence of stock ownership by United States. Proceeds to be deposited to Corporation's credit in national disaster insurance fund established by section 10. Section 4. Management and personnel
(a) Three man Board of Directors to manage Corporation. Appointed by President subject to Senate confirmation. President names one as Chairman of Board. No more than two to belong to same political party. Term: 6 years (original terms staggered 2, 4, and 6 years, respectively). Person appointed to fill vacancy holds for remainder of term. Salary: Chairman, $10,000; other Directors, $15,000, per annum.
(b) Directors to devote time principally to Corporation. Persons holding office or employment in any privately or publicly owned insurance company aren't eligible for directorship in Corporation.
(c) Two directors are a quorum, and Board may act as long as two members hold office. Section 5. Housekeeping provisions
Within funds appropriated, Board shall (1) employ and pay officers, attorneys, experts, employees, and agents necessary, (2) define their duties and authority, (3) delegate Board powers to them as determined, (4) require bond of them as Board designates, and (5) fix bond penalties and pay premiums.
sation 6. Advisory Committee and consultants
(a) Board may appoint (1) Advisory Committee of not over five experienced in writing property insurance, to advise on execution of Corporation's functions and (2) part-time consultants and advisers Board deems necessary. United States employes receive no added pay for any of above service. Others receive (1) not over $50 per day when actually employed, as Board determines, and (2) travel and subsistence (or per diem allowance).
(b) Persons serving under this section are excluded from the provisions of 18 I'nited States Code, sections 281 and 283, except when their conduct is on a matter directly involving the Corporation. Section 7. General powers The Corporation
(a) has succession until dissolved by Congress ;
(d) may make contracts and by lease, hold and dispose of real and personnal property necessary and incident to its business;
(e) sue and be sued in State and Federal courts;
(f) conduct research, surveys, and investigations necessary and incident to its functions and powers ;
(g) use employees and facilities of Government agencies, with consent of agency;
(h) receive or exchange loss-experience information with State insurance commission or agency or private property-insurance corporation or association; to help set reinsurance premium rates on actuarial basis and on lowest practicable level;
(i) has franking privilege; and
(j) may, by Board or Corporation officers or agents, exercise powers
granted by act plus those incidentally necessary. Section 8. Functions of Corporation
(a) Authorized to provide reinsurance against loss by insuring companies on policies issued against real or personal property damage from flood, tidal wave, earthquake, or hurricane in United States, as necessary to enable companies to issue such insurance otherwise unavailable. Includes State and local government property.
(b) Reinsurance premium rate to be fixed by Corporation, considering (1) risks and (2) public interest desirability of providing insurance otherwise unavailable.
(c) Corporation by regulation shall determine (1) types of property reinsured, (2) nature and limits of reinsured damage, (3) other necessary matters.
(d) Reinsure only to extent not available from private sources at reasonable rates on reasonable conditions. Use services of private insurance companies to maximum. Section 9. Payment of claims
Corporation to adjust and pay valid claims for reinsured losses. On claim disallowance, claimant may sue in 1 year after disallowance notice mailed. Sue in United States district court for district where most of the insured property is located. Exclusive jurisdiction given such court, regardless of amount in controversy. Section 10. National disaster insurance fund
(a) Establishes permanent trust fund in United States Treasury, known as national disaster insurance fund. All reinsurance premiums go into it. Including interest earned, fund is available for payment of reinsurance liabilities. Corporation awards payments from fund.
(b) Corporation authorized to create actuarial reserve funds out of fund. Secretary of the Treasury may invest rest of fund in United States obligations.
(c) Administrative expense of Corporation shall be paid by United States, not out of fund. Appropriation of necessary amounts authorized for that purpose. Section 11. Annual report
Corporation to make comprehensive annual operations report to Congress as soon as practicable after beginning of each year. Section 12. Eremption from taxation
Corporation (franchise, capital, reserves, surplus, income, and property) exempt from Federal, State, and local taxation.
Section 19. Miscellaneous provisions
(a) Board to name agent to accept service of process in each jurisdiction where corporation reinsured property is located. Section 14
Corporation subjected to Government Corporation Control Act.
[Committee print, October 25, 1955, intended to be proposed by Mr. -)
[S. 84th Cong., 2d sess.) A BILL To provide for indemnity against disasters, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the Disaster Indemnity Act of 1956.
DECLARATION OF PURPOSE
SEC. 2. The repeated occurrence of natural disasters and the threat of war damage in the United States, its Territories and possessions results in undue interference with the general welfare of its residents, the adequacy of commercial and industrial facilities, and the production and distribution of goods for use in interstate commerce and foreign trade, and impairs the common defense of the Nation. In the absence of an adequate program through the operation of private enterprise to make reimbursement for losses caused by disasters or war damage, it is the intention of the Congress that the Federal Government participate in a program to provide reimbursement for such losses by means of direct Federal indemnity or reinsurance.
FUNCTIONS SEC. 3. (a) In order to carry out the purposes of this Act, the President, through the Administrator of the Small Business Administration or such other existing officer or agency of the Government as he may designate, is authorized to provide indemnity and reinsurance against losses resulting from damage to or destruction of real or personal property (including property owned by State or local governments) due to any natural disaster occurring within the United States, its Territories, or its possessions: Provided, however, That such indemnity or reinsurance may be provided only if it cannot be obtained at reasonable rates or upon reasonable conditions from a company authorized to do an insurance business in any State, Territory, or possession of the United States.
(b) The President or his designee shall from time to time prescribe fees and premium rates for indemnity and reinsurance authorized in accordance with the provisions of this Act, and establish terms and conditions for providing such indemnity or reinsurance. In exercising the authority conferred upon them by this subsection, the President or his designee shall take into consideration the risks insured against, the desirability in the public interest of providing indemnity or insurance protection and the aim of providing from premiums collected under this Act, investment income thereon and salvage receipts, a sum sufficient to meet administrative and operative expenses in addition to reserves for probable losses.
(c) The President or his designee shall by regulation provide for determining the types of property with respect to which indemnity or reinsurance will be provided under this Act, the nature and limits of losses or damage for which such indemnity or reinsurance will be provided and such other matters as are deemed necessary to carry out the purposes of this Act: Provided, however, That in the category of residential property designed for the use of one to four families, the aggregate liability on a single property under such indemnity or insurance so reinsured shall not exceed $60,000, and in no category shall the total liability under any indemnity or insurance so reinsured exceed $250,000 on any property in a single area covered by a separate agreement for indemnity or insurance policy so reinsured: And provided further, That under any reinsurance agreement, the President or his designee may provide reinsurance to the maximum of not exceeding 100 per centum of the first $1,000 of approved claim of loss under any policy so reinsured, not exceeding 100 per centum of all approved claims of loss under any such policy in excess of $50,000, and not exceeding 80 per centum of approved claims of loss between those amounts under any policy so reinsured. (d) The liability of the President or his designee under indemnity or reinsurance agreements under this section shall not exceed $2,000,000,000 at any one time.
(e) The President or his designee is authorized to determine the maximum premium rate permissible to be charged for any policy of insurance reinsured under the provisions of this Act, and all terms and conditions of any such policy shall be subject to the approval of the President or his designee.
(f) In issuing and administering indemnity and reinsurance coverage under this Act, the President or his designee shall use to the maximum extent practicable the services of private companies authorized to do an insurance business in any State, Territory, or possession of the United States, pursuant to agreements hereby authorized to be entered into between the President or his designee and such companies prescribing their respective rights and obligations, including provision for any such company to act as underwriting agent or claim agent, or both, on behalf of the President or his designee, and provision for reasonable compensation to be paid for services rendered by such company pursuant to such agreements.
(g) The President or his designee may receive from or exchange with any State or Territorial insurance commission or agency or with any private corporation or association experienced in the problems of indemnity, insurance or reinsurance, such information as may be useful in the establishment of indemnity fees and reinsurance rates and the administration of the programs authorized under the provisions of this Act.
(h) The President or his designee (1) shall appoint an advisory committee of not less than three nor more than twenty-five persons familiar with the problems of indemnity, insurance, or reinsurance to advise him with respect to the execution of functions under this Act and (2) may employ such part-time consultants and advisory personnel, without regard to the civil service and classification laws, as he may deem necessary in carrying out the purposes of this Act. Persons who, while so serving, hold other remunerative employment with the United States shall receive no additional compensation for such service. Others so serving may receive compensation at not exceeding $50 per diem, plus necessary travel expenses.
Sec. 4. (a) Under such regulations as the President or his designee shall prescribe, he shall arrange for prompt payment of approved claims of loss under any indemnity or reinsurance coverage issued under the provisions of this Act.
(b) Upon disallowance of any claim for loss under such indemnity or reinsurance coverage, the claimant, within one year after the date of mailing of the notice of disallowance, may institute an action on such claim in the United States district court for the district in which the property, or the major value thereof, covered by the indemnity or reinsurance agreement is located. Exclusive jurisdiction is hereby conferred upon such court to hear and determine such action without regard to the amount in controversy.
SEC. 5. (a) To carry out the functions authorized by this Act, the President or his designee shall establish a Disaster Indemnity Fund and a Disaster Reinsurance Reserve Fund. All indemnity fees collected under section 3 of this Act shall be deposited in the Disaster Îndemnity Fund. All reinsurance premiums collected under section 3 of this Act shall be deposited in the Disaster Reinsurance Reserve Fund.
(b) Moneys in both such funds may be invested in obligations of the United States or in obligations guaranteed as to principal and interest by the United States. Such obligations may be sold and the proceeds reinvested as above provided, if deemed advisable by the President or his designee. Income from sach investment or reinvestment shall be deposited in the respective fund from which the investment was made.
(c) All salvage proceeds realized by the President or his designee under this Act shall likewise be deposited in the appropriate respective fund.
(d) In order to place and maintain these two funds in operative condition, the President or his designee is authorized and empowered to issue to the Secretary of the Treasury from time to time and to have outstanding at any one time, in an amount not exceeding $1,000,000,000 (or such greater amount as may be approved by the President) notes and other obligations in such forms and denominations, bearing such maturities, and subject to such terms and conditions as may be prescribed by the issuer with the approval of the Secretary of the Treasury. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average rate on outstanding marketable obligations of the United States