premium equalization payments

premium equalization payments Sec. 1334. (a) The Secretary, on such terms and conditions as he may from time to time prescribe, shall make periodic payments to the pool formed or otherwise created under section 1331, in recognition of such reductions in chargeable premium rates under section 1308 below estimated premium rates under section 1307(a) (1) as are required in order to make flood insurance available on reasonable terms and conditions. (b) Such payments shall be based only on the aggregate amount of flood insurance retained by the pool after ceding reinsurance in accordance with the provisions of section 1335, and shall not exceed an aggregate amount in any payment period equal to the sum of the following: (1) an amount for losses which bears the same ratio to the amount of all proved and approved claims for losses under this title during any designated period as the amount equal to the difference between— (A) the sum of all premium payments for flood insurance coverage in force under this title during such designated period which would have been payable during such period if all such coverage were based on estimated risk premium rates under section 1307(a)(1) (excluding any administrative expenses which may be reflected in such rates, as specified in clause (ii) of section 1307 (a)(1)(B)), and (B) the sum of the premium payments actually paid or payable for such insurance under this title during such period, bears to the amount specified in clause (A); and (2) subject to the terms and conditions specified in the agreements entered into with the pool under section 1332, a proportionate amount for appropriate operating costs and allowances (as set forth in the schedules prescribed under section 1311) during any designated period which bears the same ratio to the total amount of such operating costs and allowances during such period as the ratio specified in paragraph (1), (c) Designated periods under this section and the methods for determining the sum of premiums paid or payable during such periods shall be established by the Secretary.