42 U.S.C. § 1436c
Insurance for public housing agencies and Indian housing authorities (THE PUBLIC HEALTH AND WELFARE (42 U.S.C.))
Operative Text
On and after , notwithstanding any other provision of State or Federal law, regulation or other requirement, any public housing agency or Indian housing authority that purchases any line of insurance from a nonprofit insurance entity, owned and controlled by public housing agencies or Indian housing authorities, and approved by the Secretary, may purchase such insurance without regard to competitive procurement. On and after , the Secretary shall establish standards as set forth herein, by regulation, adopted after notice and comment rulemaking pursuant to subchapter II of chapter 5 of title 5, which will become effective not later than one year from . On and after , in establishing standards for approval of such nonprofit insurance entities, the Secretary shall be assured that such entities have sufficient surplus capital to meet reasonably expected losses, reliable accounting systems, sound actuarial projections, and employees experienced in the insurance industry. The Secretary shall not place restrictions on the investment of funds of any such entity that is regulated by the insurance department of any State that describes the types of investments insurance companies licensed in such State may make. With regard to such entities that are not so regulated, the Secretary shall establish investment guidelines that are comparable to State law regulating the investments of insurance companies. On and after , the Secretary shall not approve additional nonprofit insurance entities until such standards have become final, nor shall the Secretary revoke the approval of any nonprofit insurance entity previously approved by the Department unless for cause and after a due process hearing. On and after , until the Department of Housing and Urban Development has adopted regulations specifying the nature and quality of insurance covering the potential personal injury liability exposure of public housing authorities and Indian housing authorities (and their contractors, including architectural and engineering services) as a result of testing and abatement of lead-based paint in federally subsidized public and Indian housing units, said authorities shall be permitted to purchase insurance for such risk, as an allowable expense against amounts available for capital improvements (modernization): , That such insurance is competitively selected and that coverage provided under such policies, as certified by the authority, provides reasonable coverage for the risk of liability exposure, taking into consideration the potential liability concerns inherent in the testing and abatement of lead-based paint, and the managerial and quality assurance responsibilities associated with the conduct of such activities. Provided
Under 42 U.S.C. § 1436c, public housing agencies and Indian housing authorities are permitted to purchase insurance from qualifying nonprofit insurance entities—owned and controlled by those same agencies and approved by the federal Department of Housing and Urban Development (HUD)—without going through the usual competitive bidding process. HUD is required to set regulatory standards ensuring these nonprofit insurers maintain adequate surplus capital, reliable accounting, sound actuarial practices, and experienced staff. Until HUD finalizes regulations on lead-based paint liability insurance specifically, housing authorities may use capital improvement funds to purchase such coverage, provided it is competitively selected and certified to offer reasonable protection for lead-based paint testing and abatement risks.
Plain English — not legal advice.
Public housing agencies and Indian housing authorities operating under 42 U.S.C. § 1436c generally document their insurer's HUD-approved status before bypassing competitive procurement for insurance purchases. Compliant operators verify that any nonprofit insurance entity they use meets HUD's standards for surplus capital, actuarial soundness, and experienced personnel. For lead-based paint liability coverage specifically, operators typically ensure that any policy purchased with capital improvement funds is competitively selected and that the authority certifies the coverage as reasonable given the risks of testing and abatement activities.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
42 U.S.C. § 1436c governs how public housing agencies and Indian housing authorities may obtain insurance, which can affect the financial stability and risk management of the housing authority responsible for your home. Tenants in federally subsidized public or Indian housing may have an interest in whether their housing authority is properly insured—particularly for lead-based paint testing and abatement liability—since adequate coverage relates to the authority's ability to manage those activities responsibly. Tenants who have concerns about their housing authority's insurance practices or lead-based paint activities can reach out to their local HUD field office, a tenant-rights organization, or a legal aid provider familiar with public housing regulations for general information.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 3, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
Effective Timeline
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