Detailed Summary

Homeowners' Defense Act of 2009 - Establishes the National Catastrophe Risk Consortium as a nonprofit, nonfederal entity to: (1) 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) issue, on a conduit basis, securities and other financial instruments linked to catastrophe risks insured or reinsured through Consortium members; (3) coordinate reinsurance contracts; (4) act as a centralized repository of state risk information accessible by certain private-market participants; and (5) establish a database to perform research and analysis that encourages standardization of the risk-linked securities market.

Authorizes the Secretary of the Treasury to guarantee holders of debt against loss of principal or interest, or both, on any such debt issued by eligible state programs for purposes of promoting the availability of private capital to provide liquidity and capacity to state catastrophe insurance programs and expediting the payment of claims under such programs and better assist the financial recovery from significant natural catastrophes. Provides separate limits on the total principal amount of such obligations for programs that cover earthquake peril and those that cover all other perils.

Directs the Secretary to make contracts for reinsurance coverage available for purchase by eligible state programs. Provides pricing guidelines and a limit on aggregate potential federal liability.

Establishes a Federal Natural Catastrophe Reinsurance Fund in the Treasury to be funded by amounts received from the sale of reinsurance coverage contracts, amounts appropriated for liability for claims payment, and earnings on investments.

Directs the Secretary of Housing and Urban Development (HUD) to establish and carry out a program of grants to eligible entities to develop, enhance, or maintain programs to prevent and mitigate losses from natural catastrophes.

Requires a study of the need for and impact of expanding the programs established by this Act to apply to insured losses of eligible state programs for losses arising from commercial insurance policies that provide coverage for properties composed predominantly of residential rental units.

Status of the Legislation

Latest Major Action: 5/21/2009: Referred to House committee. Status: Referred to the House Committee on Financial Services.

Points in Favor

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Points Against

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