HR 1880 IHCommentsClose CommentsPermalink

To establish a system of regulation and supervision for insurers, insurance agencies, and insurance producers chartered or licensed under Federal law that ensures the stability and financial integrity of those insurers, agencies, and producers and that protects policyholders and other consumers served by such insurers, agencies, or producers.CommentsClose CommentsPermalink

April 2, 2009CommentsClose CommentsPermalink

Ms. BEAN (for herself and Mr. ROYCE) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on the Judiciary and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

To establish a system of regulation and supervision for insurers, insurance agencies, and insurance producers chartered or licensed under Federal law that ensures the stability and financial integrity of those insurers, agencies, and producers and that protects policyholders and other consumers served by such insurers, agencies, or producers.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the ‘National Insurance Consumer Protection Act’.CommentsClose CommentsPermalink





(b) Table of Contents- The table of contents for this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title; table of contents.CommentsClose CommentsPermalink





Sec. 2. Purposes.CommentsClose CommentsPermalink





Sec. 3. Definitions.CommentsClose CommentsPermalink

TITLE I--OFFICE OF NATIONAL INSURANCE

Subtitle A--Establishment of Office and Appointment of National Insurance Commissioner

Sec. 101. Establishment of office and appointment of National Insurance Commissioner.CommentsClose CommentsPermalink





Sec. 102. Duties and powers of the commissioner.CommentsClose CommentsPermalink





Sec. 103. Independence and GAO audit.CommentsClose CommentsPermalink





Sec. 104. Office personnel matters.CommentsClose CommentsPermalink





Sec. 105. Division of Consumer Affairs.CommentsClose CommentsPermalink





Sec. 106. Division of Insurance Fraud.CommentsClose CommentsPermalink





Sec. 107. Office of the Ombudsman.CommentsClose CommentsPermalink





Sec. 108. Insurance self-regulatory organizations.CommentsClose CommentsPermalink





Sec. 109. Relationship to State law.CommentsClose CommentsPermalink

Subtitle B--Supervision of National Insurers and National Insurance Agencies

Sec. 111. Prudential supervision.CommentsClose CommentsPermalink





Sec. 112. Examinations.CommentsClose CommentsPermalink





Sec. 113. Reports.CommentsClose CommentsPermalink





Sec. 114. Annual assessments and other fees.CommentsClose CommentsPermalink





Sec. 115. Appropriations during start-up period.CommentsClose CommentsPermalink





Sec. 116. Disclosure of information.CommentsClose CommentsPermalink





Sec. 117. Anti-money laundering compliance.CommentsClose CommentsPermalink

Subtitle C--Enforcement Powers of Commissioner

Sec. 121. Revocation or suspension of charter or license.CommentsClose CommentsPermalink





Sec. 122. Other enforcement powers.CommentsClose CommentsPermalink





Sec. 123. Insurance fraud.CommentsClose CommentsPermalink





Sec. 124. Foreign investigations.CommentsClose CommentsPermalink





Sec. 125. Prompt corrective action.CommentsClose CommentsPermalink

TITLE II--SYSTEMIC RISK REGULATION, COORDINATING COUNCIL FOR FINANCIAL REGULATORS, INTERNATIONAL AGREEMENTS

Sec. 201. Systemic risk regulation.CommentsClose CommentsPermalink





Sec. 202. Coordinating council for financial regulators.CommentsClose CommentsPermalink





Sec. 203. International agreements.CommentsClose CommentsPermalink

TITLE III--NATIONAL INSURANCE COMPANIES AND NATIONAL INSURANCE AGENCIES

Subtitle A--Organization, Chartering, and Powers

Sec. 301. Organization and chartering.CommentsClose CommentsPermalink





Sec. 302. Corporate governance.CommentsClose CommentsPermalink





Sec. 303. Charter conversions.CommentsClose CommentsPermalink





Sec. 304. Powers.CommentsClose CommentsPermalink





Sec. 305. Chartering commencement date.CommentsClose CommentsPermalink

Subtitle B--Financial, Policy and Market Conduct Standards

Sec. 311. Financial standards.CommentsClose CommentsPermalink





Sec. 312. Policy standards.CommentsClose CommentsPermalink





Sec. 313. Market conduct standards.CommentsClose CommentsPermalink





Sec. 314. General principles.CommentsClose CommentsPermalink

Subtitle C--State Taxation

Sec. 321. State taxation of national insurers.CommentsClose CommentsPermalink





Sec. 322. State taxation of national insurance agencies.CommentsClose CommentsPermalink





Sec. 323. State taxation of nonadmitted and surplus lines of insurance.CommentsClose CommentsPermalink

TITLE IV--NATIONAL INSURANCE PRODUCERS

Sec. 401. Licensing of national insurance producers.CommentsClose CommentsPermalink





Sec. 402. Supervision and examination.CommentsClose CommentsPermalink





Sec. 403. Producer database.CommentsClose CommentsPermalink





Sec. 404. Duty to supervise.CommentsClose CommentsPermalink





Sec. 405. Relationship to State law.CommentsClose CommentsPermalink





Sec. 406. Licensing commencement date.CommentsClose CommentsPermalink

TITLE V--CHANGE IN CONTROL AND INSURANCE HOLDING COMPANIES

Sec. 501. Change in control.CommentsClose CommentsPermalink





Sec. 502. Reports by and examinations of insurance holding companies.CommentsClose CommentsPermalink





Sec. 503. Activities of insurance holding companies and subsidiaries.CommentsClose CommentsPermalink





Sec. 504. Capital, liquidity, dividend, operational, and other standards.CommentsClose CommentsPermalink





Sec. 505. Affiliate transactions.CommentsClose CommentsPermalink





Sec. 506. Relationship to other laws.CommentsClose CommentsPermalink





Sec. 507. No delegation permitted.CommentsClose CommentsPermalink

TITLE VI--CONSERVATORSHIP, RECEIVERSHIP, THE PAYMENT OF BENEFITS AND CLAIMS TO POLICYHOLDERS, AND ASSESSMENTS ON NATIONAL INSURERS

Sec. 601. Appointment of conservator or receiver.CommentsClose CommentsPermalink





Sec. 602. Establishment of the National Insurance Guaranty Corporation.CommentsClose CommentsPermalink





Sec. 603. Payment of claims to policyholders of national insurers.CommentsClose CommentsPermalink





Sec. 604. Assessments of national insurers.CommentsClose CommentsPermalink





Sec. 605. Participation in State guaranty associations.CommentsClose CommentsPermalink





Sec. 606. Report to Congress.CommentsClose CommentsPermalink

TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 701. Applicable law.CommentsClose CommentsPermalink





Sec. 702. Application of the Federal antitrust laws.CommentsClose CommentsPermalink

SEC. 2. PURPOSES.

The purposes of this Act are--CommentsClose CommentsPermalink





(1) to ensure the financial stability and integrity of national insurers, national insurance agencies, and national insurance producers through a comprehensive system of national supervision and regulation; andCommentsClose CommentsPermalink





(2) to ensure the fair and equitable treatment of policyholders, claimants, and other consumers served by national insurers, national insurance agencies, and national insurance producers.CommentsClose CommentsPermalink

SEC. 3. DEFINITIONS.

In this Act:CommentsClose CommentsPermalink





(1) AFFILIATE- The term ‘affiliate’ means any person that controls, is controlled by, or is under common control with another person.CommentsClose CommentsPermalink





(2) ANNUITY- The term ‘annuity’ means all agreements to make periodical payments for a period certain or where the making or continuance of all or some of a series of such payments, or the amount of any such payment, depends upon the continuance of human life.CommentsClose CommentsPermalink





(3) ANTI-FRAUD ORGANIZATION- The term ‘anti-fraud organization’ means an organization--CommentsClose CommentsPermalink





(A) whose purposes include investigation, prevention, and detection of insurance-related crime and fraud, including assistance to and cooperation with State and national public officials and law enforcement officers in their anti-fraud activities; andCommentsClose CommentsPermalink





(B) described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code.CommentsClose CommentsPermalink





(4) BUSINESS OF INSURANCE- The term ‘business of insurance’ has the meaning given such term in section 1033(f) of title 18, United States Code.CommentsClose CommentsPermalink





(5) COMMISSIONER- The term ‘Commissioner’ means the National Insurance Commissioner appointed under section 101.CommentsClose CommentsPermalink





(6) COMPANY- The term ‘company’ means any corporation, partnership, business trust, association, or similar organization.CommentsClose CommentsPermalink





(7) CONTROL- The term ‘control’--CommentsClose CommentsPermalink





(A) means the power of a person--CommentsClose CommentsPermalink





(i) with an ownership interest in a national insurer or national insurance agency (whether direct or indirect) to direct the management or policies of such national insurer or national insurance agency; orCommentsClose CommentsPermalink





(ii) to vote 25 percent or more of any class of voting securities of a national insurer or national insurance agency; andCommentsClose CommentsPermalink





(B) does not include a person that possesses power referred to in subparagraph (A) as a result of an official position, corporate office, or fiduciary relationship held by such person.CommentsClose CommentsPermalink





(8) CORPORATION- The term ‘Corporation’ means the National Insurance Guaranty Corporation established under section 601.CommentsClose CommentsPermalink





(9) FEDERAL BANKING AGENCIES- The term ‘Federal banking agencies’ means the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision.CommentsClose CommentsPermalink





(10) INSURANCE OPERATIONS- The term ‘insurance operations’ includes--CommentsClose CommentsPermalink





(A) the business of insurance;CommentsClose CommentsPermalink





(B) all acts and transactions relating to the sale, solicitation, negotiation, and underwriting of insurance;CommentsClose CommentsPermalink





(C) all acts and transactions relating to claims adjustment and settlement;CommentsClose CommentsPermalink





(D) all acts and transactions relating to the establishment of rates, rules, risk classifications, rating classifications, rating territories, and forms (including, endorsements, addendums, and policy language) for insurance;CommentsClose CommentsPermalink





(E) all acts and transactions relating to marketing and sales practices;CommentsClose CommentsPermalink





(F) financial condition and solvency;CommentsClose CommentsPermalink





(G) holding company transactions; andCommentsClose CommentsPermalink





(H) corporate governance.CommentsClose CommentsPermalink





(11) INSURANCE PRODUCER- The term ‘insurance producer’ means any person that sells, solicits, or negotiates policies of insurance, nonadmitted insurance, and surplus lines of insurance, but does not include a person that provides administrative services to an insurer.CommentsClose CommentsPermalink





(12) INSURER-AFFILIATED PARTY- The term ‘insurer-affiliated party’ means--CommentsClose CommentsPermalink





(A) any director, officer, employee, or controlling shareholder of, or agent for, a national insurer or a national insurance agency;CommentsClose CommentsPermalink





(B) any shareholder, consultant, joint venture partner, and any other person as determined by the Commissioner who participates in the conduct of the affairs of a national insurer or a national insurance agency; andCommentsClose CommentsPermalink





(C) any independent contractor (including any attorney, actuary, or accountant) of a national insurer or a national insurance agency who in that capacity knowingly or recklessly participates in any violation of any law or regulation, any breach of fiduciary duty, or any conduct that involves an undue risk of loss to the policyholders of a national insurer, and which violation, breach, or conduct caused or is likely to cause more than a minimal financial loss to, or a significant adverse effect on, a national insurer or the policyholders of a national insurer.CommentsClose CommentsPermalink





(13) INSURER IN FRATERNAL FORM- The term ‘insurer in fraternal form’ means an incorporated society, order, or supreme lodge without capital stock that--CommentsClose CommentsPermalink





(A) is conducted solely for the benefit of its members and their beneficiaries and not for profit;CommentsClose CommentsPermalink





(B) is operated on a lodge system with ritualistic form of work;CommentsClose CommentsPermalink





(C) has a representative form of government;CommentsClose CommentsPermalink





(D) provides benefits to members and their dependents; andCommentsClose CommentsPermalink





(E) operates for one or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic, or religious purposes for the benefit of its members, which may also be extended to others.CommentsClose CommentsPermalink





(14) LIFE INSURANCE- The term ‘life insurance’ means every insurance upon the lives of human beings, and every insurance appertaining thereto, including disability income insurance, long-term care insurance, and supplemental health insurance.CommentsClose CommentsPermalink





(15) NAIC- The term ‘NAIC’ means the National Association of Insurance Commissioners.CommentsClose CommentsPermalink





(16) NATIONAL INSURANCE AGENCY- The term ‘national insurance agency’ means a national insurance agency chartered under section 301.CommentsClose CommentsPermalink





(17) NATIONAL INSURANCE HOLDING COMPANY- The term ‘national insurance holding company’ means a company that controls a national insurer or national insurance agency.CommentsClose CommentsPermalink





(18) NATIONAL INSURANCE PRODUCER- The term ‘national insurance producer’ means a national insurance agent or broker licensed under section 401.CommentsClose CommentsPermalink





(19) NATIONAL INSURER- The term ‘national insurer’ means a national insurance company chartered under section 301.CommentsClose CommentsPermalink





(20) NATIONAL LIFE INSURER- The term ‘national life insurer’ means a national insurer that is chartered under section 301 to sell, solicit, negotiate, and underwrite life insurance.CommentsClose CommentsPermalink





(21) NONADMITTED INSURANCE- The term ‘nonadmitted insurance’ means property and casualty insurance permitted by the Commissioner to be placed directly or through an insurance producer with a nonadmitted insurer eligible to accept such insurance.CommentsClose CommentsPermalink





(22) NONADMITTED INSURER- The term ‘nonadmitted insurer’ means an insurer that is not licensed to engage in the business of insurance in a State and that--CommentsClose CommentsPermalink





(A) satisfies the eligibility requirements of the State in which an insured maintains its principal place of business, or, in the case of an individual, maintains a principal residence; andCommentsClose CommentsPermalink





(B) is not a national insurer.CommentsClose CommentsPermalink





(23) OFFICE- The term ‘Office’ means the Office of National Insurance established under section 101.CommentsClose CommentsPermalink





(24) PERSON- The term ‘person’ means any natural person, business entity, governmental body or entity, voluntary organization, or similar organization.CommentsClose CommentsPermalink





(25) POLICY- The term ‘policy’ means a policy, contract, certificate, or other evidence of insurance, or an annuity contract or a rider or endorsement thereto, but does not include a funding agreement, a reinsurance contract, or an agreement, special rider, or endorsement relating only to the manner of distributing benefits or to the reservation of rights and benefits used at the request of the individual policyholder.CommentsClose CommentsPermalink





(26) PROPERTY AND CASUALTY INSURANCE- The term ‘property and casualty insurance’ means a policy that insures, guarantees, or indemnifies against liability, loss of life, loss of health, or loss through damage to or destruction of property, including surety bonds, private passenger or commercial automobile, homeowners, mortgage guaranty, financial guaranty, commercial multiperil, general liability, professional liability, workers’ compensation, fire and allied lines, farm or ranch owners, multiperil, aircraft, fidelity, surety, medical malpractice, ocean marine, inland marine, and boiler and machinery insurance.CommentsClose CommentsPermalink





(27) PROTECTED CELL- The term ‘protected cell’ means an identified pool of assets and liabilities of a national insurer segregated and insulated from the remainder of the national insurer’s assets and liabilities.CommentsClose CommentsPermalink





(28) STATE- The term ‘State’ means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, any territory of the United States, Guam, American Samoa, the Trust Territory of the Pacific Islands, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.CommentsClose CommentsPermalink





(29) STATE INSURER- The term ‘State insurer’ means an insurer incorporated in or organized under the laws of a State that is not chartered as a national insurer under this Act.CommentsClose CommentsPermalink





(30) SUPPLEMENTAL HEALTH INSURANCE- The term ‘supplemental health insurance’ means a group or individual policy that provides coverage for hospital, medical or surgical benefits and is sold separately and not dependent upon comprehensive health or medical insurance, including a policy for accidents, accidental death and dismemberment, credit disability, dread disease, dental, hospital accident, hospital indemnity, hospital confinement indemnity, limited benefit medical, medical/surgical policies, Medicare supplement, retiree medical, specific treatment policies, travel, and vision.CommentsClose CommentsPermalink





(31) SURPLUS LINES OF INSURANCE- The term ‘surplus lines of insurance’ means insurance on properties, risks, or exposures located or to be performed in a State with a nonadmitted insurer that is sold, solicited, or negotiated by a national insurance agency, national insurance producer, or other insurance producer.CommentsClose CommentsPermalink





(32) TITLE INSURANCE- The term ‘title insurance’ or ‘business of title insurance’ means any of the following:CommentsClose CommentsPermalink





(A) A contract insuring or indemnifying the owners of real or personal property, or other persons lawfully interested therein, against loss or damage arising from any of the following conditions, or the reinsurance thereof:CommentsClose CommentsPermalink





(i) Defects in or any liens or encumbrances on the insured title.CommentsClose CommentsPermalink





(ii) Unmarketability of the insured title.CommentsClose CommentsPermalink





(iii) Invalidity, lack of priority, or unenforceability of any liens or encumbrances on the stated property.CommentsClose CommentsPermalink





(iv) Lack of legal right of access to the land.CommentsClose CommentsPermalink





(v) Unenforceability of rights in title to the real or personal property.CommentsClose CommentsPermalink





(B) Insuring the correctness of searches and examinations of all instruments, liens, or charges affecting the title to real or personal property.CommentsClose CommentsPermalink





(C) Procuring and furnishing information relative to the title to real or personal property, including abstracting, searching, and examining titles.CommentsClose CommentsPermalink





(D) Handling escrows, settlements, or closings done in conjunction with subparagraph (A), (B), (C), (E), or (F).CommentsClose CommentsPermalink





(E) Any product or service defined by the laws of any State as title insurance.CommentsClose CommentsPermalink





(F) Doing or proposing to do any business substantially equivalent to any of the activities described in this paragraph, in a manner designed to evade the provisions of this Act.CommentsClose CommentsPermalink





(33) TITLE INSURER- The term ‘title insurer’ means a company organized under the laws of a State for the purpose of conducting the business of title insurance.CommentsClose CommentsPermalink

TITLE I--OFFICE OF NATIONAL INSURANCECommentsClose CommentsPermalink

Subtitle A--Establishment of Office and Appointment of National Insurance CommissionerCommentsClose CommentsPermalink

SEC. 101. ESTABLISHMENT OF OFFICE AND APPOINTMENT OF NATIONAL INSURANCE COMMISSIONER.

(a) In General- There is established in the Department of the Treasury the Office of National Insurance.CommentsClose CommentsPermalink





(b) National Insurance Commissioner-CommentsClose CommentsPermalink





(1) IN GENERAL- There is established the position of the National Insurance Commissioner, who shall be the head of the Office.CommentsClose CommentsPermalink





(2) APPOINTMENT- The Commissioner shall be appointed by the President, by and with the advice and consent of the Senate, from among individuals who are citizens of the United States, for a term of 5 years, unless removed before the end of such term for cause by the President.CommentsClose CommentsPermalink





(3) VACANCY- A vacancy in the position of the Commissioner shall be filled in the manner established under paragraph (2). The Commissioner appointed to fill the vacancy shall be appointed only for the remainder of the term of the preceding Commissioner.CommentsClose CommentsPermalink





(4) SERVICE AFTER TERM- An individual may serve as the Commissioner after the expiration of the term for which appointed until such time as a successor has been appointed in accordance with paragraph (2).CommentsClose CommentsPermalink





(5) PROHIBITION ON FINANCIAL INTERESTS- The Commissioner may not have a direct or indirect financial interest in any national insurer or national insurance agency, except that the Commissioner may own, directly or indirectly, or may have a direct or indirect beneficial interest in an insurance policy written or sold by a national insurer, national insurance agency, or national insurance producer.CommentsClose CommentsPermalink





(6) GENERAL OVERSIGHT- The Commissioner shall be subject to the general oversight of the Secretary of the Treasury, but the Secretary may not intervene in any matter or proceeding before the Commissioner unless otherwise specifically provided by law.CommentsClose CommentsPermalink





(7) EXECUTIVE SCHEDULE- Section 5314 of title 5, United States Code, is amended by adding at the end following new item:CommentsClose CommentsPermalink





‘National Insurance Commissioner.’.CommentsClose CommentsPermalink

SEC. 102. DUTIES AND POWERS OF THE COMMISSIONER.

(a) Duties- The Commissioner shall--CommentsClose CommentsPermalink





(1) oversee the organization, incorporation, operation, regulation, and supervision of national insurers and national insurance agencies and shall issue charters therefore; andCommentsClose CommentsPermalink





(2) license, regulate, and supervise national insurance producers.CommentsClose CommentsPermalink





(b) Incidental Powers- The Commissioner may exercise such incidental powers as may be necessary to fulfill the duties specified in subsection (a).CommentsClose CommentsPermalink





(c) Rulemaking Powers- The Commissioner may issue such rules, regulations, orders, and interpretations as the Commissioner determines to be necessary to carry out the purposes of this Act. The Secretary of the Treasury may not delay or prevent the issuance of any rule, regulation, order, or interpretation by the Commissioner.CommentsClose CommentsPermalink





(d) Litigation Powers- The Commissioner may sue and be sued, complain and defend, and otherwise litigate, in the Commissioner’s name and through the Commissioner’s own attorney, in any Federal or State court.CommentsClose CommentsPermalink





(e) Enforcement Powers- The Commissioner may apply to the United States district court for the jurisdiction in which the main office of a national insurer or national insurance agency is located, or in which an insurer-affiliated party, national insurance producer, or other person is located, for the enforcement of any rule, regulation, order, or interpretation issued pursuant to this Act.CommentsClose CommentsPermalink

SEC. 103. INDEPENDENCE AND GAO AUDIT.

(a) Independence of Congressional Testimony and Recommendations- Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by inserting ‘the National Insurance Commissioner,’ after ‘the Director of the Office of Thrift Supervision,’.CommentsClose CommentsPermalink





(b) GAO Audit- The Commissioner shall make available to the Comptroller General of the United States all books and records necessary to audit all of the activities of the Office.CommentsClose CommentsPermalink

SEC. 104. OFFICE PERSONNEL MATTERS.

(a) In General- The Commissioner may employ such persons as are necessary to carry out the provisions of this Act.CommentsClose CommentsPermalink





(b) Compensation- The Commissioner shall fix the compensation and number of employees of the Office without regard to chapter 51 or subchapter III of chapter 53 of title 5, United States Code.CommentsClose CommentsPermalink





(c) Additional Compensation- The Commissioner may provide additional compensation and benefits to employees of the Office if the same type of compensation or benefits are then being provided by any Federal banking agency or, if not then being provided, could be provided by any such agency under applicable provisions of law or regulation. In setting and adjusting the total amount of compensation and benefits for employees of the Office, the Commissioner shall consult, and seek to maintain comparability with, the Federal banking agencies.CommentsClose CommentsPermalink





(d) Acting Commissioner- The Commissioner shall designate an employee of the Office to serve as the Acting Commissioner during the absence or disability of the Commissioner.CommentsClose CommentsPermalink





(e) Delegation of Powers-CommentsClose CommentsPermalink





(1) EMPLOYEES AND OTHERS- Unless otherwise prohibited by this Act, the Commissioner may delegate to any employee, representative, or agent any power of the Commissioner.CommentsClose CommentsPermalink





(2) SELF-REGULATORY ORGANIZATIONS- Unless otherwise prohibited by this Act, the Commissioner may, by regulation, delegate to any insurance self-regulatory organization any power of the Commissioner.CommentsClose CommentsPermalink

SEC. 105. DIVISION OF CONSUMER AFFAIRS.

(a) Establishment- The Commissioner shall establish a Division of Consumer Affairs within the Office, and shall appoint a Director of the Division of Consumer Affairs, who shall report to the Commissioner.CommentsClose CommentsPermalink





(b) Function- The Director of the Division of Consumer Affairs shall--CommentsClose CommentsPermalink





(1) act as a liaison between the Office and consumers of insurance;CommentsClose CommentsPermalink





(2) receive questions and complaints from consumer regarding acts or practices of national insurers, national insurance agencies, and national insurance producers; andCommentsClose CommentsPermalink





(3) take actions to resolve such questions and complaints.CommentsClose CommentsPermalink





(c) State Offices; Call Center- The Commissioner shall establish an office of the Division of Consumer Affairs in each State and a centralized call center, toll-free telephone number, and Internet address order to receive and act upon questions and complaints from consumers regarding acts or practices of national insurers, national insurance agencies, and national insurance producers.CommentsClose CommentsPermalink





(d) Reports- The Commissioner shall annually submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report on the volume of consumer complaints received by the Division of Consumer Affairs and the ability of the Office to address such complaints in a timely manner.CommentsClose CommentsPermalink

SEC. 106. DIVISION OF INSURANCE FRAUD.

(a) Establishment- The Commissioner shall establish a Division of Insurance Fraud within the Office, and shall appoint a Director of the Division of Insurance Fraud, who shall report to the Commissioner.CommentsClose CommentsPermalink





(b) Duties- The Director of the Division of Insurance Fraud shall carry out investigations of insurance fraud in accordance with section 123.CommentsClose CommentsPermalink

SEC. 107. OFFICE OF THE OMBUDSMAN.

(a) Office of the Ombudsman- The Commissioner shall establish an Office of the Ombudsman, and appoint an Ombudsman, who shall report to the Commissioner.CommentsClose CommentsPermalink





(b) Duty of the Ombudsman- The Ombudsman shall act as a liaison between the Office and any national insurer, national insurance agency, national insurance producer, or insurer-affiliated party adversely affected by the supervisory or regulatory activities of the Office, including the failure of the Office to take a requested action. The Ombudsman shall assure that safeguards exist to encourage complainants to come forward and preserve confidentiality.CommentsClose CommentsPermalink





(c) Powers of the Ombudsman- The Ombudsman--CommentsClose CommentsPermalink





(1) with the prior consent of the Commissioner, may stay any appealable decision or action during the resolution of an appealable matter; andCommentsClose CommentsPermalink





(2) shall review and report any weakness in policy or procedures to the Commissioner, and make recommendations to the Commissioner regarding changes in such policies or procedures.CommentsClose CommentsPermalink





(d) Appealable Matters- Subject to such procedures as the Commissioner may establish by regulation, any national insurer, national insurance agency, national insurance producer, or insurer-affiliated party adversely affected by an Office decision or action may seek Ombudsman review of such decision or action, other than--CommentsClose CommentsPermalink





(1) the appointment of a receiver or conservator;CommentsClose CommentsPermalink





(2) any preliminary examination conclusions communicated to the regulated person before a final examination report is issued;CommentsClose CommentsPermalink





(3) any formal enforcement-related action or decision, including the issuance of a cease-and-desist order, assessment of a civil money penalty, or commencement of a formal investigation;CommentsClose CommentsPermalink





(4) any formal or informal rulemaking pursuant to subchapter II of chapter 5 of title 5, United States Code;CommentsClose CommentsPermalink





(5) any decision or recommended decision following a formal adjudication conducted pursuant to subchapter II of chapter 5 of title 5, United States Code; orCommentsClose CommentsPermalink





(6) any request for agency records pursuant to section 552 of title 5, United States Code (commonly referred to as the Freedom of Information Act).CommentsClose CommentsPermalink





(e) Decisions of the Ombudsman- The Ombudsman shall investigate each matter for which review is sought under subsection (d) and, after consideration of all relevant information provided to the Ombudsman by the person seeking such review and the Commissioner, issue a written determination of the appeal. Such determination shall become the final decision of the Office, unless reversed, modified, or stayed by the Commissioner.CommentsClose CommentsPermalink





(f) Retaliation Prohibited- An employee of the Office of National Insurance may not take any adverse action against a complainant for appealing any decision or action to the Ombudsman.CommentsClose CommentsPermalink

SEC. 108. INSURANCE SELF-REGULATORY ORGANIZATIONS.

(a) Authority of the Commissioner- The Commissioner may provide for the registration of one or more insurance self-regulatory organizations, and supervise and regulate any such organization.CommentsClose CommentsPermalink





(b) Authority of Registered Insurance Self-Regulatory Organization- Except as otherwise provided in this Act, the Commissioner may authorize an insurance self-regulatory organization registered by the Commissioner to carry out the purposes of this Act, and enforce compliance by its members with the provisions of this Act, applicable regulations issued by the Commissioner, and the rules of the organization.CommentsClose CommentsPermalink

SEC. 109. RELATIONSHIP TO STATE LAW.

(a) In General- Except as authorized by this Act or otherwise authorized under Federal law, no national insurer, national insurance agency, or national insurance producer shall be subject to any form of licensing, examination, reporting, regulation, or supervision by a State relating to the insurance operations of such insurer, such agency, or such producer.CommentsClose CommentsPermalink





(b) Applicable State Laws- Notwithstanding subsection (a), a national insurers, national insurance agencies, and national insurance producers shall be subject to--CommentsClose CommentsPermalink





(1) State unclaimed property and escheat laws;CommentsClose CommentsPermalink





(2) tax laws of a State, in accordance with sections 321, 322, and 323;CommentsClose CommentsPermalink





(3) State law relating to participation in an assigned risk plan, mandatory joint underwriting association, or any other mandatory residual market mechanism designed to make insurance available to those unable to obtain insurance in the voluntary market, except to the extent that such State law--CommentsClose CommentsPermalink





(A) relates to participation in any voluntary joint underwriting association or similar arrangement;CommentsClose CommentsPermalink





(B) results in rates in effect for an assigned risk plan, mandatory joint underwriting association, or any other mandatory residual market mechanism that fail to cover the expected value of all future costs associated with insurance policies written by such residual market mechanism;CommentsClose CommentsPermalink





(C) requires a national insurer to use any particular rate, rating element, price, or form; orCommentsClose CommentsPermalink





(D) is inconsistent with any provision of this Act;CommentsClose CommentsPermalink





(4) State insurance law that prescribes the compulsory coverage requirements for workers’ compensation or motor vehicle insurance, or both, that every insurer must provide if the insurer issues insurance policies in such State, except to the extent that such State law requires a national insurer to use any particular rate, rating element, price, or form;CommentsClose CommentsPermalink





(5) State insurance law mandating the participation of insurers in an advisory or statistical organization, except to the extent that such State law requires a national insurer to use any particular rate, rating element, price, or form; andCommentsClose CommentsPermalink





(6) State law relating to participation in a workers’ compensation administration mechanism, except to the extent that such State law is inconsistent with any provision of this Act.CommentsClose CommentsPermalink





(c) Definitions- In this section:CommentsClose CommentsPermalink





(1) ADVISORY OR STATISTICAL ORGANIZATION- The term ‘advisory or statistical organization’ does not include the National Association of Insurance Commissioners.CommentsClose CommentsPermalink





(2) COMPULSORY COVERAGE- The term ‘compulsory coverage’ does not include any State statutory requirement other than those prescribing the minimum extent of insurance protection afforded by a policy of insurance.CommentsClose CommentsPermalink





(3) MANDATORY RESIDUAL MARKET- The term ‘mandatory residual market’ means a facility, entity, or plan required by and established pursuant to State law to provide coverage for persons that cannot obtain insurance in the private market.CommentsClose CommentsPermalink

Subtitle B--Supervision of National Insurers and National Insurance AgenciesCommentsClose CommentsPermalink

SEC. 111. PRUDENTIAL SUPERVISION.

(a) Sense of Congress- It is the sense of Congress that the Commissioner should--CommentsClose CommentsPermalink





(1) promote an open and continuous exchange of information between national insurers, national insurance agencies, and national insurance producers and the Office; andCommentsClose CommentsPermalink





(2) encourage such insurers, agencies, and producers to self-identify and self-correct actual or potential violations of law, regulation, or any other supervisory requirements that the Commissioner considers necessary before such actions harm policyholders or other consumers.CommentsClose CommentsPermalink





(b) Regulations- The Commissioner shall issue regulations on prudential supervision to--CommentsClose CommentsPermalink





(1) require national insurers, national insurance agencies, and national insurance producers to establish and implement internal risk control practices and procedures that are designed to detect and prevent violations of laws, regulations, and any other supervisory requirements that the Commissioner considers necessary;CommentsClose CommentsPermalink





(2) require national insurers, national insurance agencies, and national insurance producers to self-report violations of applicable laws, regulations, or such other supervisory requirements and to correct such violations;CommentsClose CommentsPermalink





(3) provide that if the Commissioner determines a violation of a law, regulation, or other supervisory requirement upon which an enforcement action may be based is correctable, the Commissioner shall provide warning to a national insurer, national insurance agency, or national insurance producer regarding such violation before taking such action;CommentsClose CommentsPermalink





(4) identify the range of enforcement actions the Commissioner may bring in response to a violation of law, regulation, or other supervisory requirement, and provide that, subject to subsection (c), the Commissioner shall pursue a continuum of enforcement actions that begins with the least severe sanction or penalty and gradually escalates to the most severe sanction or penalty;CommentsClose CommentsPermalink





(5) identify the factors the Commissioner will consider in determining whether to bring an enforcement action and in determining the type of action to be brought; andCommentsClose CommentsPermalink





(6) specify the Commissioner’s practices and procedures related to investigations, and provide that the Commissioner shall--CommentsClose CommentsPermalink





(A) notify a national insurer, national insurance agency, or national insurance producer within 10 days of completing an investigation; andCommentsClose CommentsPermalink





(B) review the status of all open investigations on a semiannual basis and determine if such matter should remain open or be closed.CommentsClose CommentsPermalink

SEC. 112. EXAMINATIONS.

(a) In General- The Commissioner may conduct such examinations of a national insurer or national insurance agency as the Commissioner considers necessary.CommentsClose CommentsPermalink





(b) Frequency-CommentsClose CommentsPermalink





(1) NATIONAL INSURERS- The Commissioner shall conduct a full-scope, on-site examination of each national insurer not less than once during any 24-month period.CommentsClose CommentsPermalink





(2) NATIONAL INSURANCE AGENCIES- The Commissioner shall conduct an examination of a national insurance agency in response to a complaint or evidence that such national insurance agency has violated or is about to violate--CommentsClose CommentsPermalink





(A) a law, rule, or regulation;CommentsClose CommentsPermalink





(B) any condition imposed in writing by the Commissioner in connection with issuing a license for a Federally licensed insurance producer; orCommentsClose CommentsPermalink





(C) any written agreement entered into with the Commissioner.CommentsClose CommentsPermalink





(c) Access to People and Records-CommentsClose CommentsPermalink





(1) IN GENERAL- In the course of examining a national insurer or national insurance agency, the Commissioner, upon request, shall be given prompt and reasonable access to officers, employees, agents, books, records, and documents of such insurer or agency.CommentsClose CommentsPermalink





(2) COURT ORDER- If prompt and reasonable access is not given as required under paragraph (1), the Commissioner may apply to the United States district court for the judicial district in which the main office of the national insurer or the national insurance agency is located for an order requiring that such information be promptly provided.CommentsClose CommentsPermalink





(3) SUBPOENA POWER- In connection with examination of a national insurer or national insurance agency, the Commissioner may--CommentsClose CommentsPermalink





(A) administer oaths and affirmations;CommentsClose CommentsPermalink





(B) examine, take, and preserve testimony under oath as to any matter in respect of the affairs or ownership of any such national insurer or national insurance agency;CommentsClose CommentsPermalink





(C) issue subpoenas; andCommentsClose CommentsPermalink





(D) in order to enforce a subpoena issued under subparagraph (C), apply to the United States district court for the judicial district--CommentsClose CommentsPermalink





(i) in which the main office of the national insurer or national insurance agency is located; orCommentsClose CommentsPermalink





(ii) in which the witness resides or carries on business.CommentsClose CommentsPermalink

SEC. 113. REPORTS.

Each national insurer and national insurance agency shall submit to the Commissioner such reports, containing such information and in such form, as the Commissioner may prescribe by regulation.CommentsClose CommentsPermalink

SEC. 114. ANNUAL ASSESSMENTS AND OTHER FEES.

(a) In General- The Commissioner may impose on national insurers, national insurance agencies, and national insurance producers an annual assessment and such other fees, including examination fees, as the Commissioner determines to be necessary and appropriate to fund the expenses of the Office, and to repay and loan to the Office provided under section 115.CommentsClose CommentsPermalink





(b) Regulations- The Commissioner shall, by regulation, establish a schedule for the annual assessment and other fees authorized in this section.CommentsClose CommentsPermalink





(c) Treatment of Assessments and Fees-CommentsClose CommentsPermalink





(1) DEPOSITS- The Commissioner may deposit assessments and fees collected under this section into any regular Government depository or any State or national bank.CommentsClose CommentsPermalink





(2) GOVERNMENT FUNDS AND APPORTIONMENT- Notwithstanding any other provision of law, assessments and fees imposed under this section shall not be considered government or public funds or appropriated money, and shall not be subject to apportionment for purposes of chapter 15 of title 31, United States Code, or under any other authority.CommentsClose CommentsPermalink





(d) Working Capital Fund- The Commissioner may impose assessments and fees in excess of actual expenses for any given year, to maintain an appropriate working capital fund, provided that the Commissioner remits to the payers of such assessments and fees any funds collected in excess of what the Commissioner determines to be necessary to maintain such working capital fund.CommentsClose CommentsPermalink





(e) Use of Funds- The Commissioner may use the fees and assessments collected pursuant to this section to pay all operating costs of the Office, including the salary and administrative expenses of the Office.CommentsClose CommentsPermalink

SEC. 115. APPROPRIATIONS DURING START-UP PERIOD.

The Commissioner may borrow from the Secretary of the Treasury such funds as the Commissioner determines to be necessary and appropriate to organize and begin operations of the Office. Any such loan shall be repaid, in full (with interest at a rate set by the Secretary of the Treasury), from assessments imposed under the terms of section 114 not later than the date that is 30 years after the date of the enactment of this Act, with individual payments on any loan to be made in such amounts and at such times as the Commissioner determines to be appropriate.CommentsClose CommentsPermalink

SEC. 116. DISCLOSURE OF INFORMATION.

(a) Regulations Required- The Commissioner shall issue regulations for the disclosure of reports, applications, filings, correspondence, records, and other information prepared by, reported to, obtained by, or submitted to the Commissioner.CommentsClose CommentsPermalink





(b) Supervisory Privilege- The regulations issued pursuant to subsection (a) shall prohibit the disclosure of confidential supervisory information, as such information is defined by the Commissioner in such regulation.CommentsClose CommentsPermalink





(c) Other Privileges- The submission by any person of any information to the Commissioner for any purpose in the course of any supervisory or regulatory process of the Commissioner shall not be construed as waiving, destroying, or otherwise affecting any privilege that such person may claim with respect to such information under Federal or State law as to any person or entity other than the Commissioner.CommentsClose CommentsPermalink

SEC. 117. ANTI-MONEY LAUNDERING COMPLIANCE.

(a) Regulation Required- The Commissioner shall, by regulation, require national insurers and national insurance agencies to establish and maintain procedures reasonably designed to assure and monitor compliance with the recordkeeping and reporting requirements of subchapter II of chapter 53 of title 31, United States Code, and implementing regulations issued by the Department of the Treasury, to the extent that those requirements apply to a national insurer or national insurance agency.CommentsClose CommentsPermalink





(b) Minimum Procedures- The regulations issued under subsection (a) shall require--CommentsClose CommentsPermalink





(1) the establishment of internal controls to monitor compliance with applicable requirements;CommentsClose CommentsPermalink





(2) testing for compliance;CommentsClose CommentsPermalink





(3) training of personnel; andCommentsClose CommentsPermalink





(4) the designation of an individual or individuals responsible for coordinating and monitoring compliance.CommentsClose CommentsPermalink

Subtitle C--Enforcement Powers of CommissionerCommentsClose CommentsPermalink

SEC. 121. REVOCATION OR SUSPENSION OF CHARTER OR LICENSE.

(a) Charter Revocation- The Commissioner may order the revocation of the charter of a national insurer or national insurance agency if the Commissioner determines that such insurer or agency--CommentsClose CommentsPermalink





(1) is engaged or has engaged in conduct that is hazardous to the insurer or agency and an undue risk of loss to the policyholders of such insurer;CommentsClose CommentsPermalink





(2) is in a financial or other condition that is not consistent with the continuation of existing operations; orCommentsClose CommentsPermalink





(3) is violating or has violated any--CommentsClose CommentsPermalink





(A) applicable law or regulation;CommentsClose CommentsPermalink





(B) order or condition imposed in writing by the Commissioner in connection with the approval of an application, filing, statement, notice, or other request by the insurer or agency; orCommentsClose CommentsPermalink





(C) written agreement entered into between the insurer or agency and the Commissioner.CommentsClose CommentsPermalink





(b) License Revocation- The Commissioner may order the revocation of the license of a national insurance producer if the Commissioner determines that such producer--CommentsClose CommentsPermalink





(1) is violating or has violated any applicable law, regulation, order, condition imposed in writing by the Commissioner in connection with the approval of an application, filing, statement, notice or other request by the producer, or written agreement entered into between the producer and the Commissioner;CommentsClose CommentsPermalink





(2) provided incorrect, misleading, incomplete, or materially untrue information in an application for a license;CommentsClose CommentsPermalink





(3) used fraudulent, coercive, or dishonest practices; orCommentsClose CommentsPermalink





(4) demonstrated incompetence, untrustworthiness, or financial irresponsibility as an insurance producer.CommentsClose CommentsPermalink





(c) Suspension Order- If the Commissioner, in the course of a charter or license revocation proceeding under this section, finds that a national insurer, national insurance agency, or national insurance producer poses an undue risk of loss to the policyholders of a national insurer as a whole, the Commissioner may order the suspension of the charter or license of such insurer, agency or producer, as applicable.CommentsClose CommentsPermalink





(d) Notice- If the Commissioner orders the revocation of a charter or a license under subsection (a) or (b), the Commissioner shall provide the national insurer, national insurance agency, or national insurance producer that is the subject of such revocation notice of such revocation. Such notice shall include--CommentsClose CommentsPermalink





(1) a statement of the reasons for such revocation, including any determination by the Commissioner under subsection (a) or (b); andCommentsClose CommentsPermalink





(2) a date and place for a hearing before the Commissioner with respect to such revocation.CommentsClose CommentsPermalink





(e) Hearing; Termination- If, on the basis of the evidence presented at a hearing before the Commissioner (or any person designated by the Commissioner for such purpose), in which all issues shall be determined on the record pursuant to section 554 of title 5, United States Code, and the written findings of the Commissioner (or such person) with respect to such evidence (which shall be conclusive), the Commissioner finds an undue risk of loss to the policyholders of a national insurer as a whole or a violation specified in the notice given under subsection (d) has been established, the Commissioner may issue an order terminating the charter or license of the national insurer, national insurance agency, or national insurance producer effective as of a date subsequent to that finding.CommentsClose CommentsPermalink





(f) Judicial Review-CommentsClose CommentsPermalink





(1) IN GENERAL- Any hearing provided for in this section (other than the hearing provided for in subsection (e)) shall be held in the Federal judicial district or in the territory in which the home office of the national insurer, national insurance agency, or national insurance producer is located unless the party afforded the hearing consents to another place, and shall be conducted in accordance with the provisions of chapter 5 of title 5 of the United States Code. After such hearing, and within 90 days after the Commissioner has notified the parties that the case has been submitted to it for final decision, it shall render its decision (which shall include findings of fact upon which its decision is predicated) and shall issue and serve upon each party to the proceeding an order consistent with the provisions of this section. Judicial review of any such order shall be exclusively as provided in this subsection.CommentsClose CommentsPermalink





(2) APPEAL- Any party to a proceeding under paragraph (1) may obtain a review of any order issued pursuant to paragraph (1) (other than an order issued with the consent of the national insurer, national insurance agency, or national insurance producer concerned) by the filing in the court of appeals of the United States for the circuit in which the home office of the national insurer, national insurance agency, or national insurance producer is located, or in the United States Court of Appeals for the District of Columbia Circuit, within 30 days after the date of service of such order, a written petition for the order to be modified, terminated, or set aside. The party filing such a petition shall transmit to the Commissioner a copy of the petition and the Commissioner shall file in the court the record in the proceeding, as provided in section 2112 of title 28 of the United States Code. Review of such proceedings shall be had as provided in chapter 7 of title 5 of the United States Code. The judgment and decree of the court shall be final, except that the same shall be subject to review by the Supreme Court upon certiorari, as provided in section 1254 of title 28 of the United States Code.CommentsClose CommentsPermalink

SEC. 122. OTHER ENFORCEMENT POWERS.

(a) In General- The Commissioner may issue cease and desist orders, prohibition, suspension, removal orders, and impose civil money penalties upon a national insurer, national insurance agency, national insurance producer, and any insurer-affiliated party on the same grounds and the same terms and conditions applicable to the issuance of such orders by a Federal banking agency under section 8 of the Federal Deposit Insurance Act, as if a national insurer, national insurance agency, or national insurance producer was an insured depository institution, an insurer-affiliated party was an institution-affiliated party, the Commissioner was a Federal banking agency, and a policyholder was a depositor.CommentsClose CommentsPermalink





(b) Holding Companies and Other Subsidiaries- This section shall apply to a national insurance holding company and to any subsidiary of a national insurance holding company in the same manner as such section applies to a national insurer.CommentsClose CommentsPermalink

SEC. 123. INSURANCE FRAUD.

(a) Investigations- Director of the Division of Insurance Fraud may investigate suspected fraudulent insurance acts by national insurers, national insurance agencies, national insurance producers, and other persons.CommentsClose CommentsPermalink





(b) Penalty-CommentsClose CommentsPermalink





(1) IN GENERAL- Except as provided in paragraphs (2) and (3), whoever commits a fraudulent insurance act or whoever knowingly and intentionally interferes with the investigations of a suspected fraudulent insurance act shall be subject to a fine of not more than $500,000, imprisonment for not more than 5 years or both.CommentsClose CommentsPermalink





(2) NATIONAL INSURERS, AGENCIES, INSURANCE PRODUCERS- If the person committing an offense referred to in paragraph (1) is a national insurer, national insurance agency, national insurance producer, or insurer-affiliated party, such person shall be subject to a fine of not more than $1,000,000 per violation per day, or imprisonment for not more than 10 years, or both.CommentsClose CommentsPermalink





(3) LOW AMOUNTS- If the person committing an offense referred to in paragraph (1) is not a national insurer, national insurance agency, national insurance producer, or insurer-affiliated party and the offense is a fraudulent insurance act involving an amount or value not exceeding $5,000, such person shall be subject to a fine of not more than $100,000, imprisonment for not more than one year, or both.CommentsClose CommentsPermalink





(4) ADDITIONAL PENALTIES- The penalties under this subsection shall be in addition to any other penalties imposed under this Act.CommentsClose CommentsPermalink





(5) RESTITUTION REQUIRED- Any person convicted of an offense referred to in paragraph (1) shall make monetary restitution for any financial loss or damage sustained by any other person as a result of such offense. Such restitution shall be the exclusive monetary remedy available to the victim at law or in equity after entry of judgment.CommentsClose CommentsPermalink





(c) Immunity From Liability-CommentsClose CommentsPermalink





(1) IN GENERAL- Except as provided under paragraph (2), any person who shares, furnishes, discloses, receives, collects, or uses information concerning a suspected, anticipated, or completed fraudulent insurance act shall not be liable to any person under any provision of law of the United States or of any State or political subdivision of any State, or under any contract or other legally enforceable agreement, for such act, if the information is provided to or received from--CommentsClose CommentsPermalink





(A) the Commissioner or any employee, agent, or representative of the Commissioner;CommentsClose CommentsPermalink





(B) a Federal, State, or local enforcement or regulatory official or an employee, agent, or representative of such official;CommentsClose CommentsPermalink





(C) a self-regulatory organization or an employee, agent, or representative of such organization;CommentsClose CommentsPermalink





(D) a person involved in the investigation (including cooperation or participation in an investigation), prevention, and detection of fraudulent insurance acts or an employee, agent, or representative of such person; orCommentsClose CommentsPermalink





(E) the NAIC or an employee, agent, or representative of the NAIC.CommentsClose CommentsPermalink





(2) MALICE-CommentsClose CommentsPermalink





(A) IN GENERAL- Paragraph (1) shall not apply with respect to false statements made with actual malice by a person to a person referred to in subparagraphs (A) through (E) of paragraph (1).CommentsClose CommentsPermalink





(B) CONTENTS OF COMPLAINT- In an action brought against a person for filing a report or furnishing other information concerning a fraudulent insurance act, the party bringing the action shall plead specifically any allegation that paragraph (1) does not apply because the person filed the report or furnished the information with actual malice.CommentsClose CommentsPermalink





(d) Fraudulent Insurance Act Defined- In this section, the term ‘fraudulent insurance act’ means an act or omission committed by a person who, knowingly and with intent to defraud, and for the purpose of depriving another of property or for pecuniary gain, commits, participates in, or aids, abets, or conspires to commit or solicits another person to commit, or permits its employees or its agents to commit, one or more of the following:CommentsClose CommentsPermalink





(1) Presenting, causing to be presented, or preparing with knowledge or belief that it will be presented to or by a national insurer, national insurance agency, State insurer, State insurance agency, or insurance producer acting with respect to a policy of insurance written by a national insurer or State insurer, false information as part of, in support of, or concerning a fact material to one or more of the following:CommentsClose CommentsPermalink





(A) An application for a new or renewal of an insurance policy or reinsurance contract.CommentsClose CommentsPermalink





(B) The rating of a national insurer or State insurer that writes an insurance policy or enters into a reinsurance contract.CommentsClose CommentsPermalink





(C) A claim for payment or benefit pursuant to an insurance policy or reinsurance contract.CommentsClose CommentsPermalink





(D) Premiums paid on an insurance policy or reinsurance contract.CommentsClose CommentsPermalink





(E) Payments made in accordance with the terms of an insurance policy or reinsurance contract.CommentsClose CommentsPermalink





(F) A document filed with the Commissioner.CommentsClose CommentsPermalink





(G) The financial condition of a national insurer or State insurer.CommentsClose CommentsPermalink





(H) The formation, acquisition, merger, consolidation, or dissolution of a national insurer or national insurance agency.CommentsClose CommentsPermalink





(I) The issuance of evidence of insurance.CommentsClose CommentsPermalink





(J) The reinstatement of an insurance policy.CommentsClose CommentsPermalink





(2) Solicitation or acceptance of new or renewal insurance risks on behalf of a national insurer, national insurance agency, State insurer, State insurance agency, or insurance producer, or other persons engaged in the business of insurance by a person who knows or should know that the national insurer or State insurer is insolvent at the time of the transaction.CommentsClose CommentsPermalink





(3) Removal, concealment, alteration, or destruction of the records of a national insurer, national insurance agency, State insurer, State insurance agency, or insurance producer.CommentsClose CommentsPermalink





(4) Transaction of the business of insurance in violation of laws requiring a charter or license under this Act.CommentsClose CommentsPermalink





(5) Attempting to commit, aiding or abetting in the commission of, or conspiracy to commit the acts or omissions specified in this subsection.CommentsClose CommentsPermalink

SEC. 124. FOREIGN INVESTIGATIONS.

(a) Requesting Assistance From Foreign Governments- In conducting any investigation, examination, or enforcement action under this subtitle, the Commissioner may request the assistance of any foreign government.CommentsClose CommentsPermalink





(b) Providing Assistance to Foreign Governments- The Commissioner may assist any foreign government that is conducting an investigation to determine whether any person has violated, is violating, or is about to violate any law or regulation relating to insurance matters or currency transactions administered or enforced by such foreign government.CommentsClose CommentsPermalink

SEC. 125. PROMPT CORRECTIVE ACTION.

(a) Rulemaking-CommentsClose CommentsPermalink





(1) IN GENERAL- Not later than the expiration of the 6-month period beginning upon the date of submission of the report under subsection (b)(3) to the Commissioner, the Commissioner shall promulgate such regulations, applicable to national insurers, as the Commissioner determines appropriate and consistent with the recommendation in that report to ensure that prompt corrective action is taken to resolve any hazardous financial condition of a national insurer.CommentsClose CommentsPermalink





(2) REQUIRED CONTENT- Rules required by this subsection shall include such capital measures and categories, capital standards, supervisory criteria, restrictions on permissible actions of such insurers, requirements for such insurers, procedures, provisions regarding conservatorship and receivership of such insurers, and other provisions as the Commissioner considers are appropriate and consistent with any recommendations in the report and the standards established pursuant to section 312 of this Act.CommentsClose CommentsPermalink





(b) GAO Study and Report-CommentsClose CommentsPermalink





(1) IN GENERAL- The Comptroller General of the United States shall conduct a study to identify an appropriate structure of procedures and requirements for taking prompt corrective actions with respect to national insurers, to ensure that any hazardous financial condition of such a national insurer is resolved effectively and efficiently, with the fewest possible losses.CommentsClose CommentsPermalink





(2) REQUIREMENTS- In conducting the study required by this subsection, the Comptroller General shall analyze and evaluate various proposals, structures, methods, and systems for taking prompt corrective actions with respect to various financial entities and institutions, including--CommentsClose CommentsPermalink





(A) the prompt corrective action requirements under section 38 of the Federal Deposit Insurance Act (12 U.S.C. 1831o) with respect to insured depository institutions; andCommentsClose CommentsPermalink





(B) the ‘Model Regulation to Define Standards and Commissioner’s Authority for Companies Deemed to be in Hazardous Financial Condition’ of the NAIC.CommentsClose CommentsPermalink





(3) REPORT-CommentsClose CommentsPermalink





(A) IN GENERAL- Not later than the expiration of the 6-month period beginning on the date of enactment of this Act, the Comptroller General shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Financial Services of the House of Representatives, and the Commissioner, regarding the study required under this subsection.CommentsClose CommentsPermalink





(B) CONTENTS- The report required under this paragraph shall describe the study and the results of the evaluations conducted under the study, and shall include a specific recommendation to the Commissioner for establishment of an appropriate structure of procedures and requirements for taking prompt corrective actions with respect to national insurers, to ensure that any hazardous financial condition of a national insurer is resolved effectively and efficiently with the fewest possible losses.CommentsClose CommentsPermalink

TITLE II--SYSTEMIC RISK REGULATION, COORDINATING COUNCIL FOR FINANCIAL REGULATORS, INTERNATIONAL AGREEMENTSCommentsClose CommentsPermalink

SEC. 201. SYSTEMIC RISK REGULATION.

(a) Delegation of Authority- Not later than 90 days after the date of enactment of this Act, the President shall designate a systemic risk regulator for covered institutions. In making this designation the President shall consult with the Chairman of the Senate Committee on Banking, Housing and Urban Affairs, and the House Committee on Financial Services, and shall designate a Federal agency, other than the Office of National Insurance, that has experience in financial regulation and supervision as the systemic risk regulator for covered institutions.CommentsClose CommentsPermalink





(b) Powers of Systemic Risk Regulator- Notwithstanding any other provision of law, the agency designated pursuant to subsection (a) may--CommentsClose CommentsPermalink





(1) request information on the activities and operations of a covered institution, or any affiliate of a covered institution, from such institution or such affiliate, and from the Office or a State insurance authority responsible for supervising such covered institution, as applicable;CommentsClose CommentsPermalink





(2) participate with the Office or a State insurance authority, as applicable, in an examination of a covered institution and any affiliate of such covered institution;CommentsClose CommentsPermalink





(3) if such agency determines that the activities of a covered institution, any affiliate of a covered institution, any category of covered institutions, or any product or service offered by a covered institution is having, or would have, serious adverse effects on economic conditions or financial stability, recommend corrective action to the Commissioner or a State insurance authority, including recommendations to--CommentsClose CommentsPermalink





(A) restrict or prohibit the covered institution, any affiliate of the covered institution, or any category of covered institutions from engaging in such activity or practice or offering such product or service; orCommentsClose CommentsPermalink





(B) take any other action that the agency deems appropriate to mitigate or avoid the adverse effects of such activity, practice, product or service;CommentsClose CommentsPermalink





(4) issue a rule or order to address the activities that are the subject of a recommendation made pursuant to paragraph (3), if--CommentsClose CommentsPermalink





(A) the Commissioner or State insurance authority fail to implement corrective actions within a reasonable period of time, as determined by such agency; andCommentsClose CommentsPermalink





(B) the Coordinating Council for Financial Regulators established in section 202 determines, by a two-thirds vote of its membership, that such corrective action is necessary to mitigate or avoid an impending serious adverse effect on economic conditions or financial stability in the United States; andCommentsClose CommentsPermalink





(5) in consultation with the Commissioner--CommentsClose CommentsPermalink





(A) determine if a covered institution is systemically important; andCommentsClose CommentsPermalink





(B) if such covered institution is determined to be systemically important, determine if such covered institution should be required to be chartered under title III of this Act.CommentsClose CommentsPermalink





(c) Access to Information and Confidentiality-CommentsClose CommentsPermalink





(1) COURT ORDER- If the agency designated pursuant to subsection (a) is not given prompt and reasonable access to officers, employees, agents, books, records and documents of a covered institution, or any affiliate of a covered institution, such agency may apply to the United States district court for the judicial district in which the main office of the covered institution is located for an order requiring that such access be promptly provided.CommentsClose CommentsPermalink





(2) CONFIDENTIALITY- Information provided or obtained under the terms of paragraph (2) or (3) of subsection (b) shall be treated as confidential supervisory information and exempt from the requirements of section 552 of title 5, United States Code.CommentsClose CommentsPermalink





(d) Judicial Review- Any covered institution or affiliate of a covered institution that is the subject of an order issued pursuant to this section may obtain review of such order in the United States Court of Appeals within any circuit where such institution or such affiliate has its principal place of business, or in the Court of Appeals in the District of Columbia, by filing in the court, within 30 days of after issuance of such order, a petition praying that the order be set aside. Such covered institution or affiliate shall transmit to the agency designated pursuant to subsection (a) a copy of such petition and the agency shall file in the court the record made before the agency, as provided in section 2112 of title 28, United States Code. Upon the filing of such petition, the court shall have jurisdiction to affirm, set aside, or modify the order and to require the agency to take such action with regard to the matter under review as the court deems proper. The findings of the agency as to the facts, if supported by substantial evidence, shall be conclusive.CommentsClose CommentsPermalink





(e) Costs- The agency designated pursuant to subsection (a) shall recover all direct and indirect costs associated with the exercise of its authority under this section through the imposition of an assessment on each covered institution that is equal to the product of--CommentsClose CommentsPermalink





(1) an assessment rate established by the agency, by regulation; andCommentsClose CommentsPermalink





(2) the amount of the covered institution’s average total assets during the preceding year.CommentsClose CommentsPermalink





(f) Report to Congress and GAO Review-CommentsClose CommentsPermalink





(1) REPORT TO CONGRESS- The agency designated pursuant to subsection (a) shall provide a written report to Congress of any action or determination made under paragraph (3), (4), or (5) of subsection (b), and an explanation of the basis for such determination.CommentsClose CommentsPermalink





(2) GAO REVIEW- The Comptroller General of the United States shall review and report to Congress on any determination under paragraph (3), (4), or (5) of subsection (b), including the basis for the determination and the purpose for which any action was taken.CommentsClose CommentsPermalink





(g) Covered Institution Defined- In this section, the term ‘covered institution’ means a national insurer and any insurance company organized and supervised under State law.CommentsClose CommentsPermalink

SEC. 202. COORDINATING COUNCIL FOR FINANCIAL REGULATORS.

(a) Establishment and Purpose- There is established the Coordinating National Council for Financial Regulators (in this section referred to as the ‘Council’) to serve as a forum for financial regulators to collectively identify and consider issues related to the regulation and supervision of financial services firms, including the stability and integrity of financial markets, investor and consumer protection, the efficiency and effectiveness of regulation and supervision, and other matters of mutual concern.CommentsClose CommentsPermalink





(b) Functions of the Council-CommentsClose CommentsPermalink





(1) DUTIES- The Council shall--CommentsClose CommentsPermalink





(A) monitor and measure the health and competitiveness of the financial services industry in the United States, including its component segments;CommentsClose CommentsPermalink





(B) develop early warning systems to detect potential points of weakness or strains in financial markets;CommentsClose CommentsPermalink





(C) recommend coordinated actions for national and State financial regulators and financial services firms, especially in times of market stress or financial crisis;CommentsClose CommentsPermalink





(D) develop model supervisory policies for national and State financial regulators; andCommentsClose CommentsPermalink





(E) as necessary, make determinations referred to in section 201(b)(4)(B).CommentsClose CommentsPermalink





(2) LIMITATION- Except as provided in paragraph (1)(E), the Council shall not have any independent supervisory or regulatory authority.CommentsClose CommentsPermalink





(c) Composition- The Council shall be composed of--CommentsClose CommentsPermalink





(1) the Secretary of the Treasury, who shall serve as the chair of the Council;CommentsClose CommentsPermalink





(2) the Chairman of the Board of Governors of the Federal Reserve System;CommentsClose CommentsPermalink





(3) the Chairman of the Securities and Exchange Commission;CommentsClose CommentsPermalink





(4) the Chairman of the Commodities Futures Trading Commission;CommentsClose CommentsPermalink





(5) the Comptroller of the Currency;CommentsClose CommentsPermalink





(6) the Director of the Office of Thrift Supervision;CommentsClose CommentsPermalink





(7) the Chairman of the Federal Deposit Insurance Corporation;CommentsClose CommentsPermalink





(8) the Commissioner of National Insurance;CommentsClose CommentsPermalink





(9) an individual appointed by the President, by and with the advice and consent of the Senate, who is knowledgeable in State regulation of depository institutions and other State licensed lenders;CommentsClose CommentsPermalink





(10) an individual appointed by the President, by and with the advice and consent of the Senate, who is knowledgeable in State regulation of the business of insurance; andCommentsClose CommentsPermalink





(11) an individual appointed by the President, by and with the advice and consent of the Senate, who is knowledgeable in State regulation of securities activities.CommentsClose CommentsPermalink





(d) Conditions Applicable to Appointed Members of the Council-CommentsClose CommentsPermalink





(1) CONSULTATION- In making the appointments under paragraphs (9), (10), and (11) of subsection (c), the President shall consult with the Conference of State Bank Supervisors, the National Association of Insurance Commissioners, and the North American Securities Administrators Association, or any successor organizations formed to represent the interests of State banking, insurance, and securities regulators.CommentsClose CommentsPermalink





(2) TERM AND VACANCY- Members appointed under paragraphs (9), (10), and (11) of subsection (c) shall serve for a term of 5 years. A vacancy in the Council of a member appointed under one of such paragraphs shall be filled in the same manner in which the original appointment was made. The member appointed to fill the vacancy shall be appointed only for the remainder of the term of the preceding member.CommentsClose CommentsPermalink





(3) TRAVEL EXPENSES- Members appointed under paragraphs (9), (10), and (11) of subsection (c) shall receive travel expenses, including per diem in lieu of subsistence, in accordance with applicable provisions under subchapter I of chapter 57 of title 5, United States Code.CommentsClose CommentsPermalink





(4) PROHIBITION ON FINANCIAL INTERESTS- A member appointed under paragraph (9), (10), or (11) of subsection (c) may not have a direct financial interest in any financial services firm.CommentsClose CommentsPermalink





(e) Meetings- The Council shall meet at least every 90 days upon the call of the Chair. Each member of the Council (other than the members appointed under paragraphs (9), (10), and (11) of subsection (c)) may designate a senior policymaking official to represent such member at a meeting of the Council, as necessary and appropriate.CommentsClose CommentsPermalink





(f) Consultation- The Council shall consult, as appropriate, with major market participants, the various exchanges, clearinghouses, self-regulatory bodies, trade associations and others, and may seek private sector solutions to issues whenever possible.CommentsClose CommentsPermalink





(g) Information Sharing- The members of the Council shall, to the extent permitted by law, share information as may be necessary to fulfill the functions of the Council.CommentsClose CommentsPermalink





(h) Annual Report- The Council shall submit an annual report to the President, Congress, and the governors and legislatures of each State on its activities.CommentsClose CommentsPermalink





(i) Administrative Support- The Secretary of the Treasury shall provide the Council with such administrative support services as may be necessary for the performance of its functions.CommentsClose CommentsPermalink





(j) Authorization- There is authorized to be appropriated such funds as may be necessary to carry out this section.CommentsClose CommentsPermalink

SEC. 203. INTERNATIONAL AGREEMENTS.

(a) In General- The Commissioner may engage in international efforts to secure bilateral and multilateral agreements with foreign insurance regulators and regional and global regulatory organizations in order to--CommentsClose CommentsPermalink





(1) promote the stability and integrity of insurance markets;CommentsClose CommentsPermalink





(2) encourage open and fair competition in such markets; andCommentsClose CommentsPermalink





(3) improve the quality and uniformity of insurance supervision and regulation internationally and provide the regulation of cross-border provisions of insurance and reinsurance services.CommentsClose CommentsPermalink





(b) Technical Assistance- The Commissioner may provide technical assistance to, and cooperation with, foreign insurance regulators and regional and global regulatory organizations, including the development and implementation of international regulatory standards for insurance, and the development and implementation of bilateral and multilateral mutual recognition agreements on the licensing of insurers and insurance producers.CommentsClose CommentsPermalink





(c) Consultation- In exercising the authority granted under this section, the Commissioner shall consult and cooperate with the Executive Office of the President and the United States Trade Representative.CommentsClose CommentsPermalink

TITLE III--NATIONAL INSURANCE COMPANIES AND NATIONAL INSURANCE AGENCIESCommentsClose CommentsPermalink

Subtitle A--Organization, Chartering, and PowersCommentsClose CommentsPermalink

SEC. 301. ORGANIZATION AND CHARTERING.

(a) Charters-CommentsClose CommentsPermalink





(1) IN GENERAL- The Commissioner shall, under such regulations as the Commissioner prescribes, issue charters to and provide for the organization of--CommentsClose CommentsPermalink





(A) national insurers in stock, mutual, reciprocal, or fraternal form; andCommentsClose CommentsPermalink





(B) national agencies as corporations, partnerships, limited liability companies, or in other forms recognized under State law.CommentsClose CommentsPermalink





(2) NATIONAL INSURERS- A charter for a national insurer issued under paragraph (1) may limit such national insurer to a specified line of insurance and shall only be issued for property and casualty insurance, life insurance, or the reinsurance of property and casualty insurance and life insurance. A national insurer may only provide insurance for the lines of insurance for which such insurer has been issued a charter under such paragraph.CommentsClose CommentsPermalink





(3) NATIONAL AGENCIES- A charter may be issued under paragraph (1) to a national insurance agency that sells, solicits, or negotiates property and casualty insurance, life insurance, or the reinsurance of property and casualty insurance and life insurance. A national insurance agency may sell, solicit, or negotiate lines of insurance other than those for which such national insurance agency has been issued a charter under paragraph (1) in accordance with applicable State laws.CommentsClose CommentsPermalink





(b) Chartering Criteria- In determining whether to issue a charter for a national insurer or national insurance agency, the Commissioner shall consider the character and competency of the parties seeking the charter, and the financial resources and future prospects of the proposed national insurer or proposed national insurance agency.CommentsClose CommentsPermalink





(c) Licensing of Non-United States Insurers-CommentsClose CommentsPermalink





(1) IN GENERAL- A non-United States insurer may transact insurance in the United States through a United States branch by chartering the United States branch to do business as a national insurer under this Act, under such regulations as the Commissioner may prescribe.CommentsClose CommentsPermalink





(2) CHARTERING CRITERIA- In carrying out subsection (b) with respect to a non-United States insurer, the Commissioner may take into account the nature of the insurance or reinsurance business that the non-United States insurer proposes to conduct through a United States branch and may give appropriate recognition to the capital and other assets maintained by the non-United States insurer in a jurisdiction other than the United States.CommentsClose CommentsPermalink





(3) OTHER APPLICABLE LAWS- Nothing in this section shall be construed to prohibit a non-United States insurer from doing business as an insurer without a charter under this Act on any basis permitted under applicable State laws or an international agreement.CommentsClose CommentsPermalink





(4) NONDISCRIMINATION-CommentsClose CommentsPermalink





(A) IN GENERAL- Except as provided in this section, the Commissioner may not impose any condition for the issuance of a charter under this section to a national insurer solely because the national insurer is--CommentsClose CommentsPermalink





(i) a subsidiary of a non-United States person;CommentsClose CommentsPermalink





(ii) partially owned by a non-United States person; orCommentsClose CommentsPermalink





(iii) a United States branch of a non-United States insurer.CommentsClose CommentsPermalink





(B) EXCEPTION- Notwithstanding subparagraph (A), the Commissioner may impose conditions for the issuance of a charter under this section that are different from those imposed on other national insurers if--CommentsClose CommentsPermalink





(i) the conditions attached are contained in the charter under which the national insurer chooses to operate; andCommentsClose CommentsPermalink





(ii) the Commissioner makes a written finding that the conditions are related to the protection of policyholders and are the minimum conditions necessary to achieve the purposes of this Act.CommentsClose CommentsPermalink





(d) No Delegation Permitted- The Commissioner may not delegate the authorities of the Commissioner under this section to any insurance self-regulatory organization.CommentsClose CommentsPermalink

SEC. 302. CORPORATE GOVERNANCE.

(a) Main Office- A national insurer or national insurance agency may designate any office at which it conducts insurance operations as its main office, and for purposes of jurisdiction, a national insurer or national insurance agency shall be deemed a citizen of the State in which its main office is located and of the State in which it has its principal place of business.CommentsClose CommentsPermalink





(b) Applicable Law- A national insurer or national insurance agency may elect to follow the corporate governance procedures of the law of the State in which the main office of the such insurer or agency is located, the law of the State in which a company that controls the insurer or agency is incorporated, title 8 of the Delaware Code (Delaware General Corporation Law), r the Model Business Corporation Act of the American Bar Association. A national insurer or national insurance agency shall designate in its bylaws the body of law selected.CommentsClose CommentsPermalink





(c) Independent Audit Committee for National Insurers-CommentsClose CommentsPermalink





(1) IN GENERAL- Each national insurer and national insurance agency shall establish an audit committee of the board of directors of such insurer or such agency, which shall be composed entirely of outside directors who are independent of management of such insurer or such agency.CommentsClose CommentsPermalink





(2) SATISFACTION- The requirement described in paragraph (1) shall be satisfied if a company that controls a national insurer or national insurance agency has established an audit committee of its board of directors entirely composed of outside directors who are independent of management of such controlling person, and such committee reviews the financial statements of the national insurer or national insurance agency.CommentsClose CommentsPermalink





(d) Participating Policy Procedures-CommentsClose CommentsPermalink





(1) IN GENERAL- A national insurer in mutual form shall elect to either adhere to participating policy procedures of the relevant law of the State in which its main office is located, or adhere to the participating policy procedures established by the Commissioner under paragraph (2).CommentsClose CommentsPermalink





(2) REGULATIONS- The Commissioner shall, by regulation, establish participating policy procedures, as the Commissioner determines to be appropriate to carry out paragraph (1).CommentsClose CommentsPermalink





(e) Consumer Liaison-CommentsClose CommentsPermalink





(1) IN GENERAL- Each national insurer and national insurance agency shall appoint a liaison to serve consumers and address complaints or disputes.CommentsClose CommentsPermalink





(2) PROCEDURES- Each national insurer and national insurance agency shall establish policies and procedures designed to reasonably ensure fair and expeditious handling of consumer complaints and disputes.CommentsClose CommentsPermalink





(3) REGULATIONS- The Commissioner shall issue regulations governing the standards for the liaison referred to in paragraph (1).CommentsClose CommentsPermalink

SEC. 303. CHARTER CONVERSIONS.

(a) Conversion From State to National Charter-CommentsClose CommentsPermalink





(1) IN GENERAL- Notwithstanding any other provision of law, the Commissioner may, pursuant to regulations issued by the Commissioner, allow a State insurer to convert to a national insurer and a State insurance agency to convert to a national insurance agency.CommentsClose CommentsPermalink





(2) EFFECT OF CONVERSION- A State insurer or State insurance agency that converts under this section shall, by operation of law and without further action, hold and be subject to all rights, privileges, liabilities, property interests, and other interests and obligations that the State insurer or State insurance agency held, or was subject to, immediately before the conversion.CommentsClose CommentsPermalink





(3) SPECIAL AUTHORITY- The Commissioner may, subject to such conditions as the Commissioner may prescribe by regulation, permit a national insurer or national insurance agency resulting from the conversion of a State insurer or State insurance agency, as applicable, to retain, hold, or exercise assets, liabilities, powers, and authorities that do not conform to the legal requirements otherwise applicable to national insurers or national insurance agencies to the extent the Commissioner determines is appropriate.CommentsClose CommentsPermalink





(b) Conversion From National to State Charter-CommentsClose CommentsPermalink





(1) IN GENERAL- A national insurer may convert to a State insurer and a national insurance agency may convert to a State insurance agency in accordance with applicable State law if--CommentsClose CommentsPermalink





(A) such national insurer or such national insurance agency notifies the Commissioner of the intention to convert in accordance with such procedures as the Commissioner may prescribe by regulation; andCommentsClose CommentsPermalink





(B) after conducting a review of such national insurer or such national insurance agency, the Commissioner approves the conversion.CommentsClose CommentsPermalink





(2) SAVINGS PROVISION- Nothing in this section or in the conversion of a national insurer to a State insurer or a national insurance agency to a State insurance Agency shall operate to abrogate any rights, privileges, liabilities, property interests, or other interests or obligations that a national insurer or national insurance agency held or was subject to immediately before the conversion.CommentsClose CommentsPermalink





(c) No Delegation Permitted- The Commissioner may not delegate any authority under this section to any insurance self-regulatory organization.CommentsClose CommentsPermalink

SEC. 304. POWERS.

(a) In General-CommentsClose CommentsPermalink





(1) NATIONAL INSURER- A national insurer may, pursuant to such regulations as the Commissioner prescribes--CommentsClose CommentsPermalink





(A) engage in the sale, solicitation, negotiation, and underwriting of property and casualty insurance (other than title insurance), life insurance, and reinsurance;CommentsClose CommentsPermalink





(B) establish and maintain one or more separate accounts and allocate amounts to such accounts, and establish and maintain one or more protected cells in connection with an insurance securitization and attribute to such cells insurance and reinsurance obligations with respect to its general account, obligations relating to the insurance securitization, and assets to fund such obligations;CommentsClose CommentsPermalink





(C) hold and accumulate funds pursuant to funding agreements;CommentsClose CommentsPermalink





(D) provide investment advice and investment management services; andCommentsClose CommentsPermalink





(E) engage in all other insurance operations and exercise all such incidental powers as shall be necessary to carry on insurance operations.CommentsClose CommentsPermalink





(2) NATIONAL INSURANCE AGENCY- A national insurance agency may, pursuant to such regulations and the Commissioner prescribes--CommentsClose CommentsPermalink





(A) engage in the sale, solicitation, and negotiation of policies of insurance issued by any national insurer or State insurer, and the sale, solicitation and negotiation of surplus lines of insurance and nonadmitted insurance for a nonadmitted insurer; andCommentsClose CommentsPermalink





(B) exercise all such incidental powers as shall be necessary to carry out such activities, including claims adjustment and settlement, risk management, employee benefits advice, retirement planning, and any other insurance-related consulting activities.CommentsClose CommentsPermalink





(b) Other Powers- A national insurer or national insurance agency may, subject to such regulations as the Commissioner prescribes--CommentsClose CommentsPermalink





(1) adopt and use a corporate seal, or a facsimile of it;CommentsClose CommentsPermalink





(2) have perpetual succession until such time as it is liquidated, dissolved, merged, or otherwise wound up in accordance with applicable law;CommentsClose CommentsPermalink





(3) adopt, amend, and repeal by-laws;CommentsClose CommentsPermalink





(4) sue or be sued, complain and defend, and otherwise litigate in any court and participate, as a party or otherwise, in any judicial, administrative, arbitral, or other proceeding, in its corporate name;CommentsClose CommentsPermalink





(5) make contracts and guarantees, incur liabilities, borrow money, issue notes, bonds, and other obligations (which may be convertible into or include the option to purchase other securities of the national insurer or national insurance agency), and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income;CommentsClose CommentsPermalink





(6) purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, improve, employ, use, and otherwise deal in and with real and personal property or other assets, or any interest therein, and sell, convey, mortgage, lease, exchange, transfer, or otherwise dispose of, or mortgage or pledge, all or any of its property and assets, or any interest therein;CommentsClose CommentsPermalink





(7) lend money, invest, and reinvest its funds and receive and hold real and personal property as security for repayment;CommentsClose CommentsPermalink





(8) participate with others in any corporation, partnership, limited partnership, joint venture, or other association, or in any transaction, undertaking, or arrangement, which the national insurer or national insurance agency would have power to conduct by itself, whether or not such participation involves sharing or delegating control with or to others;CommentsClose CommentsPermalink





(9) elect or appoint directors, officers, employees, and agents of the national insurer or national insurance agency, define their duties, fix their compensation, and lend them money and credit;CommentsClose CommentsPermalink





(10) make donations and otherwise devote its resources for the public welfare or for charitable, scientific, educational, humanitarian, philanthropic, or religious purposes; andCommentsClose CommentsPermalink





(11) engage in any other lawful activity that is necessary or convenient to further its activities and affairs.CommentsClose CommentsPermalink





(c) Subsidiaries- No national insurer or national insurance agency may establish or acquire a subsidiary without prior notice to the Commissioner, and shall conduct the activities in accordance with regulations and orders of the Commissioner.CommentsClose CommentsPermalink





(d) Other Corporate Transactions- No national insurer or national insurance agency shall engage in mutual to stock conversions, stock to mutual conversions, mergers, acquisitions, asset transfers, and other similar corporate transactions without the prior approval of the Commissioner, and subject to regulations and orders of the Commissioner.CommentsClose CommentsPermalink





(e) Prohibited Activities- No national insurer or national insurance agency may engage in any activity that the Commissioner determines, by regulation or order, poses a serious risk to the solvency of a national insurer or national insurance agency, jeopardizes the interests of policyholders of a national insurer or national insurance agency, or otherwise is incompatible with the public interest.CommentsClose CommentsPermalink





(f) Bulk Transfers-CommentsClose CommentsPermalink





(1) BULK TRANSFERS AUTHORIZED- A national insurer may only effect the following bulk transfers:CommentsClose CommentsPermalink





(A) A State insurer as the transferring insurer and a permitted national insurer as the assuming insurer.CommentsClose CommentsPermalink





(B) A permitted national insurer as the transferring insurer and a State insurer as the assuming insurer.CommentsClose CommentsPermalink





(C) A national insurer as the transferring insurer and a national insurer as the assuming insurer.CommentsClose CommentsPermalink





(D) A State insurer as the transferring insurer and a national insurer that is not a permitted national insurer as the assuming insurer.CommentsClose CommentsPermalink





(E) A national insurer that is not a permitted national insurer as the transferring insurer and a State insurer as the assuming insurer.CommentsClose CommentsPermalink





(2) COMMISSIONER APPROVAL-CommentsClose CommentsPermalink





(A) IN GENERAL- A national insurer shall not effect a bulk transfer as authorized under subparagraph (A), (B), (C), or (E) of paragraph (1) without the prior approval of the Commissioner, in accordance with such regulations as the Commissioner shall prescribe.CommentsClose CommentsPermalink





(B) STANDARD OF APPROVAL- The Commissioner shall approve a bulk transfer under subparagraph (B), after notice and a hearing, unless the Commissioner determines that the bulk transfer is likely to be hazardous to policyholders of transferred insurance policies, policyholders of the transferring insurer, or policyholders of the assuming insurer.CommentsClose CommentsPermalink





(3) POLICYHOLDER CONSENT-CommentsClose CommentsPermalink





(A) STATE INSURER AND PERMITTED NATIONAL INSURER- Notwithstanding any other provision of law, a national insurer is not required to obtain the consent of policyholders to effect a bulk transfer authorized under subparagraph (A) or (B) of paragraph (1).CommentsClose CommentsPermalink





(B) BETWEEN NATIONAL INSURERS OR STATE INSURER AND OTHER NATIONAL INSURER- Notwithstanding any other provision of law, the Commissioner shall determine whether a national insurer wishing to effect a bulk transfer authorized under subparagraph (C) or (E) of paragraph (1) is required to obtain the consent of policyholders to effect such transfer and the form in which such consent must be obtained.CommentsClose CommentsPermalink





(4) RELEASE FROM LIABILITY- Upon the completion of a bulk transfer under this section, the transferring insurer shall be released from its obligations under the transferred insurance policies.CommentsClose CommentsPermalink





(5) STATE LAW-CommentsClose CommentsPermalink





(A) PROHIBITION- Except as provided in subparagraph (B), a State may not--CommentsClose CommentsPermalink





(i) require a national insurer or a State insurer to--CommentsClose CommentsPermalink





(I) obtain policyholder consent to a bulk transfer; orCommentsClose CommentsPermalink





(II) submit the bulk transfer to State review or action (including approval and nondisapproval); orCommentsClose CommentsPermalink





(ii) prevent or significantly interfere with a bulk transfer effected pursuant to this section.CommentsClose CommentsPermalink





(B) CONSTRUCTION- Subparagraph (A) shall not be construed to prohibit any State from--CommentsClose CommentsPermalink





(i) collecting, reviewing, and taking action (including approval or disapproval) on applications and other documents or reports concerning a proposed bulk transfer authorized under--CommentsClose CommentsPermalink





(I) subparagraph (B), (D), or (E) of paragraph (1) to which a State insurer (other than a permitted national insurer) domiciled in that State is a party; orCommentsClose CommentsPermalink





(II) subparagraph (D) or (E) of paragraph (1) to which a State insurer (other than a permitted national insurer) doing business in that State, other than a State insurer domiciled in that State, is a party, if the review or action meets the standards set forth in subparagraph (C); orCommentsClose CommentsPermalink





(ii) requiring policyholder consent of a proposed bulk transfer permitted under paragraph (4) or (5) of subsection (b).CommentsClose CommentsPermalink





(C) STANDARDS- A review or action meets the standards under this paragraph, if it--CommentsClose CommentsPermalink





(i) is based on standards that are not more onerous than those imposed by the Commissioner;CommentsClose CommentsPermalink





(ii) occurs within a reasonable time frame that advances the purposes of this section;CommentsClose CommentsPermalink





(iii) is made in close consultation and cooperation with the Commissioner;CommentsClose CommentsPermalink





(iv) is without bias or discrimination toward either the transferring insurer or the assuming insurer;CommentsClose CommentsPermalink





(v) serves a legitimate State interest; andCommentsClose CommentsPermalink





(vi) does not frustrate the proposed bulk transfer.CommentsClose CommentsPermalink





(D) NOTICE OF FAILURE- If the Commissioner finds that any State review or action under subparagraph (B)(i) fails to meet any of the standards set forth in subparagraph (C), the Commissioner may provide the applicable State with notice of such failure and the reasons for such failure.CommentsClose CommentsPermalink





(6) DIFFERENTIAL TREATMENT PROHIBITED- A State may not treat a national insurer or a State insurer entering into a bulk transfer agreement with a national insurer or a State insurer, or any affiliate or subsidiary of such insurer, differently than any other insurer operating in that State.CommentsClose CommentsPermalink





(7) NO DELEGATION PERMITTED- The Commissioner may not delegate to any insurance self-regulatory organization any authority conferred under this subsection with respect to any bulk transfer involving a national insurer.CommentsClose CommentsPermalink





(8) DEFINITIONS- In this subsection:CommentsClose CommentsPermalink





(A) ASSUMING INSURER- The term ‘assuming insurer’ means the insurer that purchases or otherwise acquires existing insurance policies from another insurer by bulk transfer.CommentsClose CommentsPermalink





(B) BLOCK OF BUSINESS- The term ‘block of business’ means all those insurance policies of an insurer under a particular policy form.CommentsClose CommentsPermalink





(C) BULK TRANSFER- The term ‘bulk transfer’--CommentsClose CommentsPermalink





(i) means the transfer by an insurer to another insurer of existing insurance policies constituting all or substantially all of one or more of its lines of business or blocks of business; andCommentsClose CommentsPermalink





(ii) does not include--CommentsClose CommentsPermalink





(I) any sale in which the transferring insurer retains direct or indirect control of the assets supporting the transferred insurance policies;CommentsClose CommentsPermalink





(II) any transaction effected by an agreement under which the transferring insurer continues to remain directly liable to the policyholders under the insurance policies;CommentsClose CommentsPermalink





(III) the substitution of one insurer for another upon the expiration of insurance coverage pursuant to statutory or contractual requirements and the issuance of a new policy of insurance by that insurer;CommentsClose CommentsPermalink





(IV) the transfer of policies of insurance pursuant to merger or consolidation of two or more insurers to the extent that those transactions are regulated by statute;CommentsClose CommentsPermalink





(V) any transaction effected by an insurer subject to a judicial order of receivership, liquidation, or rehabilitation; orCommentsClose CommentsPermalink





(VI) any transfer of liabilities from one insurer to another under a single group insurance policy upon the request of the group policyholder.CommentsClose CommentsPermalink





(D) PERMITTED NATIONAL INSURER- The term ‘permitted national insurer’ means--CommentsClose CommentsPermalink





(i) a State insurer that has recently converted to a national insurer under section 303, as determined by the Commissioner; orCommentsClose CommentsPermalink





(ii) a national insurer that has been issued a charter under section 301 for a new line of insurance, as determined by the Commissioner.CommentsClose CommentsPermalink





(E) TRANSFERRED INSURANCE POLICIES- The term ‘transferred insurance policies’ means the insurance policies that are subject to the bulk transfer.CommentsClose CommentsPermalink





(F) TRANSFERRING INSURER- The term ‘transferring insurer’ means the insurer in privity of contract with the policyholders under the existing insurance policies that are subject to the bulk transfer.CommentsClose CommentsPermalink





(g) Effect of State Law- No State may prevent or restrict a national insurer or national insurance agency from exercising any power conferred by this section or by any regulation authorized by this section.CommentsClose CommentsPermalink

SEC. 305. CHARTERING COMMENCEMENT DATE.

The Commissioner may not charter a national insurer or national insurance agency until the Commissioner notifies Congress that the Office is operational and that all regulations necessary to govern the organization, formation, operations, and supervision of such insurers and agencies have been issued in final or interim final form. The Commissioner shall provide a notification to Congress not later than 2 years after the date of the enactment of this Act.CommentsClose CommentsPermalink

Subtitle B--Financial, Policy and Market Conduct StandardsCommentsClose CommentsPermalink

SEC. 311. FINANCIAL STANDARDS.

The Commissioner shall establish, by regulation, standards for national insurers and national insurance agencies on--CommentsClose CommentsPermalink





(1) accounting and disclosure;CommentsClose CommentsPermalink





(2) auditing;CommentsClose CommentsPermalink





(3) risk management;CommentsClose CommentsPermalink





(4) internal controls;CommentsClose CommentsPermalink





(5) investments;CommentsClose CommentsPermalink





(6) capital and liquidity;CommentsClose CommentsPermalink





(7) actuarial opinions;CommentsClose CommentsPermalink





(8) reinsurance; andCommentsClose CommentsPermalink





(9) such other matters as the Commissioner deems necessary to ensure the financial stability and integrity of national insurers and national insurance agencies.CommentsClose CommentsPermalink

SEC. 312. POLICY STANDARDS.

(a) Policy Standards- The Commissioner shall establish, by regulation, general policy requirements and requirements for different categories of policies issued by national insurers.CommentsClose CommentsPermalink





(b) Filing Requirement- No national insurer may issue a policy until the form of the policy has been filed with the Commissioner. The form shall be accompanied by written certification by an officer of the national insurer that the policy complies with requirements established under subsection (a).CommentsClose CommentsPermalink





(c) Law Applicable-CommentsClose CommentsPermalink





(1) LAW SPECIFIED BY PARTIES- The provisions of any insurance policy or other product of a national life insurer shall be interpreted in accordance with the law of the jurisdiction specified by the parties to the insurance policy or other product if the parties have specified the law of--CommentsClose CommentsPermalink





(A) the jurisdiction in which the main office of the national life insurer is located;CommentsClose CommentsPermalink





(B) the jurisdiction in which the principal place of business of the national life insurer is located; orCommentsClose CommentsPermalink





(C) the jurisdiction in which the insurance policy or other product is delivered.CommentsClose CommentsPermalink





(2) DEFAULT LAW- If the parties to an insurance policy or other product of a national life insurer have not specified the jurisdiction whose law shall govern the provisions of the insurance policy or other product, such provisions shall be interpreted in accordance with the law of the jurisdiction in which the insurance policy or other product is delivered.CommentsClose CommentsPermalink





(3) RULEMAKING- The Commissioner shall establish, by regulation, choice of law rules under this subsection.CommentsClose CommentsPermalink





(d) Interpretive Rulings-CommentsClose CommentsPermalink





(1) PROCEDURES- The Commissioner shall establish procedures by which national insurers may obtain interpretive rulings from the Office regarding the interpretation and application of the requirements established under this section.CommentsClose CommentsPermalink





(2) PUBLIC AVAILABILITY- Except as provided under paragraph (3), requests by national insurers for interpretive rulings from the Office and the complete text of such interpretive rulings shall not be made available to the public.CommentsClose CommentsPermalink





(3) PUBLICATION OF SUMMARIES- Notwithstanding paragraph (2), the Commissioner shall publish a summary of each interpretive opinion, excluding the name of the national insurer and any other identifying information, either promptly after the issuance of such opinion or, upon the request of the national insurer, after such delay as the Commissioner determines appropriate.CommentsClose CommentsPermalink





(e) Rates, Rating Elements, and Price- The Commissioner may not require a national insurer to use any particular rate, rating element, or price.CommentsClose CommentsPermalink

SEC. 313. MARKET CONDUCT STANDARDS.

(a) Standards- The Commissioner shall establish, by regulation, market conduct standards for national insurers, national insurance agencies, and national insurance producers that implement the model laws of the NAIC entitled ‘Unfair Trade Practices Act’ and ‘Unfair Claims Settlement Practices Act’.CommentsClose CommentsPermalink





(b) Disclosure-CommentsClose CommentsPermalink





(1) IN GENERAL- Subject to paragraph (2), the Commissioner shall require each policy issued by a national insurer to include the following disclosure on the cover page:CommentsClose CommentsPermalink





‘This policy has been issued by a national insurer, which is supervised by the Office of National Insurance. If you have any questions or complaints about this policy, you may contact the Division of Consumer Affairs, Office of National Insurance, XXXX.’.CommentsClose CommentsPermalink





(2) ADDRESS- The disclosure required under paragraph (1) shall, in place of the blank at the end, include the appropriate address, toll-free number, and Internet address of the Division of Consumer Affairs for the office of the Division located in the State in which the policyholder resides.CommentsClose CommentsPermalink

SEC. 314. GENERAL PRINCIPLES.

(a) General Principles- The financial, policy, and market conduct standards issued by the Commissioner pursuant to this subtitle shall--CommentsClose CommentsPermalink





(1) promote the stability and integrity of national insurers and national insurance agencies;CommentsClose CommentsPermalink





(2) protect policyholders and other consumers and investors; andCommentsClose CommentsPermalink





(3) encourage innovation and competition by national insurers and national insurance agencies.CommentsClose CommentsPermalink





(b) NAIC Standards- In establishing the financial, policy, and market conduct standards required by this subtitle, the Commissioner shall take into consideration standards, models, practices, and instructions established by the NAIC.CommentsClose CommentsPermalink

Subtitle C--State TaxationCommentsClose CommentsPermalink

SEC. 321. STATE TAXATION OF NATIONAL INSURERS.

(a) State Taxation Rule- Except as provided in subsection (b) and section 605(b), a national insurer doing business in any State shall be subject to all applicable State and local taxes, assessments, and charges, including insurance retaliatory taxes or other similar taxes, and shall be entitled to all applicable tax credits, deductions, and offsets provided under State law, as well as all policyholder surcharge provisions under State law, to the same extent and in the same manner as an insurer licensed to do business in such State and chartered in the State where the national insurer is considered domiciled under subsection (c) or (d), except that, such national insurer shall not be subject to--CommentsClose CommentsPermalink





(1) any additional taxes, assessments, and charges imposed by such State (or local government) by reason of the failure of the national insurer to be licensed or otherwise authorized to conduct business or write or sell insurance policies, by such State; orCommentsClose CommentsPermalink





(2) special assessments and charges that fund services that the State does not provide with respect to the national insurer.CommentsClose CommentsPermalink





(b) Exception- No State shall have the power to impose an insurance retaliatory tax on any national insurer, unless--CommentsClose CommentsPermalink





(1) for any tax purpose for which the State of domicile is relevant, every national insurer is treated by such State as domiciled in the State designated by each national insurer under subsection (c); andCommentsClose CommentsPermalink





(2) the insurance retaliatory tax is imposed by such State on every national insurer to the same extent and in the same manner as it is imposed on every insurer chartered in the State where the national insurer is considered domiciled under subsection (c).CommentsClose CommentsPermalink





(c) Designation of Domicile-CommentsClose CommentsPermalink





(1) IN GENERAL- A national insurer may designate as its State of domicile, by filing such designation in writing with the Commissioner--CommentsClose CommentsPermalink





(A) the State in which the national insurer’s principal place of business in the United States is located; orCommentsClose CommentsPermalink





(B) in the case of an insurer that has converted from a State insurer to a national insurer under this Act, the State in which such insurer was domiciled immediately before such conversion.CommentsClose CommentsPermalink





(2) NO DESIGNATION BY NATIONAL INSURER- If a national insurer does not make a designation of a State of domicile under this subsection, the national insurer shall be deemed to have designated as its State of domicile the State in which its principal place of business in the United States is located.CommentsClose CommentsPermalink





(3) CHANGE IN DOMICILE- A national insurer may change its State of domicile, with the approval of the Commissioner, to any other State in accordance with paragraph (1).CommentsClose CommentsPermalink





(d) Status of National Insurer- For purposes of State taxation, except as provided in this section, a national insurer shall not be exempt from any State tax or subject to a lesser burden of any State tax, solely by reason of its status as a national insurer under this Act.CommentsClose CommentsPermalink

SEC. 322. STATE TAXATION OF NATIONAL INSURANCE AGENCIES.

(a) State Taxation Rule- A national insurance agency shall be subject to all taxes imposed under any applicable provision of State law, to the same extent and in the same manner as an agency chartered in the State in which the national insurance agency is considered domiciled pursuant to subsection (b).CommentsClose CommentsPermalink





(b) State of Domicile- For purposes of this section, the State of domicile of a national insurance agency shall be deemed to be the State in which the principal place of business of the national insurance agency in the United States is located.CommentsClose CommentsPermalink





(c) Status of National Insurance Agency- For purposes of State taxation, except as provided in this section, a national insurance agency shall not be exempt from any State tax or subject to a lesser burden of any State tax, solely by reason of its status as a national insurance agency under this Act.CommentsClose CommentsPermalink

SEC. 323. STATE TAXATION OF NONADMITTED AND SURPLUS LINES OF INSURANCE.

No State, other than the State in which an insured maintains its principal place of business or, in the case of an individual, maintains a principal residence, may require a tax, fee, assessment, or other charge imposed on an insured, either directly or through a producer, that is based upon any payment made as consideration for nonadmitted insurance or surplus lines insurance, and any other compensation given in consideration for a contract of insurance.CommentsClose CommentsPermalink

TITLE IV--NATIONAL INSURANCE PRODUCERSCommentsClose CommentsPermalink

SEC. 401. LICENSING OF NATIONAL INSURANCE PRODUCERS.

(a) Authority- The Commissioner may license an individual person as a national insurance producer.CommentsClose CommentsPermalink





(b) Requirements for Sale of National Insurance- An individual may sell, solicit, or negotiate insurance for a national insurer only if--CommentsClose CommentsPermalink





(1) such individual--CommentsClose CommentsPermalink





(A) is licensed by the Commissioner under subsection (a); andCommentsClose CommentsPermalink





(B) is--CommentsClose CommentsPermalink





(i) an agent or employee of a national insurer or a national insurance agency; orCommentsClose CommentsPermalink





(ii) self-employed and not affiliated with another national insurance producer, as determined by the Commissioner; orCommentsClose CommentsPermalink





(2) such individual is licensed as an insurance producer under the laws of a State and sells, solicits, or negotiates such insurance to persons in such State.CommentsClose CommentsPermalink





(c) Scope of License-CommentsClose CommentsPermalink





(1) IN GENERAL- A national insurance producer may--CommentsClose CommentsPermalink





(A) sell, solicit, or negotiate insurance in any State for a national insurer or a State insurer;CommentsClose CommentsPermalink





(B) sell, solicit, or negotiate surplus lines of insurance and nonadmitted insurance for a non-admitted insurer; andCommentsClose CommentsPermalink





(C) exercise all such incidental powers as shall be necessary to carry out the activities referred to in subparagraphs (A) and (B), including claims adjustments and settlement, risk management, employee benefits advice, retirement planning, and any other insurance-related consulting activities.CommentsClose CommentsPermalink





(2) LIMITATIONS- The Commissioner may limit a license to one or more specified lines or types of insurance.CommentsClose CommentsPermalink





(d) Qualifications- The Commissioner shall, by regulation, specify educational and examination requirements for obtaining a national insurance producer license, and may impose different requirements for different lines or types of insurance.CommentsClose CommentsPermalink

SEC. 402. SUPERVISION AND EXAMINATION.

(a) Examinations-CommentsClose CommentsPermalink





(1) IN GENERAL- The Commissioner may examine a national insurance producer to assess the producer’s compliance with this Act and the regulations issued pursuant to this Act.CommentsClose CommentsPermalink





(2) MANDATORY EXAMINATIONS- The Commissioner shall provide for the examination of a national insurance producer in response to a complaint or any evidence that such producer has violated or is about to violate--CommentsClose CommentsPermalink





(A) a law, rule, or regulation;CommentsClose CommentsPermalink





(B) any condition imposed in writing by the Commissioner in connection with issuing a national insurance producer license; orCommentsClose CommentsPermalink





(C) any written agreement entered into with the Commissioner.CommentsClose CommentsPermalink





(b) Reports- The Commissioner may require a national insurance producer to make such reports, containing such information and in such form, as the Commissioner may prescribe by regulation.CommentsClose CommentsPermalink





(c) Powers- The powers authorized the Commissioner in section 121 shall apply to reports by and examinations of national insurance producers.CommentsClose CommentsPermalink





(d) Limitation on Liability-CommentsClose CommentsPermalink





(1) IN GENERAL- Subject to paragraph (2), no civil liability shall be imposed on and no cause of action shall arise from a national insurer or national insurance agency, an insurer-affiliated party, or a national insurance producer submitting a statement or information required under this Act, or any regulation thereunder, or requested in writing by the Commissioner relating to the conduct of a national insurance producer.CommentsClose CommentsPermalink





(2) EXCEPTION- Paragraph (1) shall not apply with respect to false statements made with actual malice.CommentsClose CommentsPermalink

SEC. 403. PRODUCER DATABASE.

(a) In General- The Commissioner shall develop and implement an electronic database consisting of information relating to national insurance producers and an electronic communication network that links the Commissioner with State insurance regulators and national insurers, national insurance agencies, and State insurers for an electronic exchange of such information.CommentsClose CommentsPermalink





(b) Maintenance- The Commissioner may delegate authority over the maintenance of each database described in subsection (a) to an insurance self-regulatory organization.CommentsClose CommentsPermalink

SEC. 404. DUTY TO SUPERVISE.

(a) National Insurers- Unless a national insurance producer is subject to the supervision of a national insurance agency under subsection (b), a national insurer shall supervise the sales and marketing practices of a national insurance producer with respect to the sale, solicitation, or negotiation of insurance policies of such national insurer, if--CommentsClose CommentsPermalink





(1) such producer is an--CommentsClose CommentsPermalink





(A) employee of the national insurer; orCommentsClose CommentsPermalink





(B) agent of the national insurer; andCommentsClose CommentsPermalink





(2) the principal business activity of such producer is devoted to the sale, solicitation, or negotiation of insurance policies for such insurer, the supervision of the agents for such insurer, or both.CommentsClose CommentsPermalink





(b) National Insurance Agencies- A national insurance agency shall supervise the sales and marketing practices of a national insurance producer with respect to the sale, solicitation, or negotiation of insurance policies, if such producer--CommentsClose CommentsPermalink





(1) is an employee of such agency and the sale, solicitation, and negotiation of insurance is within the scope of employment of the producer; orCommentsClose CommentsPermalink





(2) is an agent of such agency and the sale, solicitation, and negotiation of insurance is pursuant to the terms of an agreement between the agent and such agency.CommentsClose CommentsPermalink





(c) Standards for Supervision- The Commissioner shall, by regulation, establish standards for the duties under subsections (a) and (b). Such standards shall not conflict with the rules adopted by any self-regulatory organization approved by the Securities and Exchange Commission pursuant to its authority under section 19(b)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(b)(1)) for broker-dealer supervision of registered representatives.CommentsClose CommentsPermalink





(d) Exemption- The Commissioner may, by regulation, exempt any class of persons from the duties under subsections (a) and (b), if the Commissioner determines that, given the nature of the business relationship with the national insurance producer, it would be unreasonable or inappropriate to require the class member to supervise such producer.CommentsClose CommentsPermalink





(e) No Duty- A national insurer or national insurance agency is not required to supervise the sales and marketing practices of persons other than those referred to in subsections (a) or (b).CommentsClose CommentsPermalink





(f) Oversight of Independent National Insurance Producers-CommentsClose CommentsPermalink





(1) IN GENERAL- The Commissioner shall oversee the sales and marketing practices of a national insurance producer with respect to the sale, solicitation, or negotiation of insurance policies if such producer is not a person subject to supervision under subsection (a) or (b).CommentsClose CommentsPermalink





(2) STANDARDS AND PROCEDURES- The Commissioner shall, by regulation, establish standards and procedures for the oversight of the sales and marketing practices of national insurance producers described in paragraph (1).CommentsClose CommentsPermalink

SEC. 405. RELATIONSHIP TO STATE LAW.

(a) No State Restrictions- No State may prevent or restrict a national insurer or national insurance agency from engaging in the acts described in subsection (b) or from engaging the services of a person who engages in such acts for the national insurer or national insurance agency, nor shall any State require that a person be licensed by reason of engaging in such acts for a national insurer or national insurance agency.CommentsClose CommentsPermalink





(b) Acts Protected From State Restrictions- The acts referred to in subsection (a) are the following:CommentsClose CommentsPermalink





(1) Investigating, evaluating, ascertaining, or determining the amount of or negotiating, settling, or adjusting or otherwise participating in the disposal of claims, losses, or damages arising under insurance policies written by a national insurer.CommentsClose CommentsPermalink





(2) Soliciting, negotiating, or placing reinsurance cessions or retrocessions on behalf of a ceding national insurer without the authority or power to bind reinsurance on behalf of such national insurer.CommentsClose CommentsPermalink





(3) Binding or managing all or part of the assumed reinsurance business of a national insurer that is a reinsurer (including the management of a separate division, department, or underwriting office) and acting as an agent for such reinsurer.CommentsClose CommentsPermalink





(4) Directly or indirectly underwriting, collecting charges or premiums, or adjusting or settling claim, in connection with policies of insurance written by a national insurer.CommentsClose CommentsPermalink





(c) Activities of National Insurance Producers- No State may--CommentsClose CommentsPermalink





(1) prevent or restrict a national insurance producer from engaging in any activity authorized by this title; orCommentsClose CommentsPermalink





(2) require such producer to be licensed by reason of engaging in such activity on behalf of a national insurer, national insurance agency, State insurer, or a United States branch of a non-United States insurer.CommentsClose CommentsPermalink





(d) Activities of State Insurance Producers- No State may prevent or restrict an insurance producer licensed by such State from selling, soliciting, or negotiating insurance in such State on behalf of a national insurer or being employed by a national insurance agency.CommentsClose CommentsPermalink





(e) International Agreements- To the extent that a non-United States insurer is eligible to conduct a cross-border business pursuant to an international agreement, no State may--CommentsClose CommentsPermalink





(1) prevent or restrict such non-United States insurer from engaging in the activities authorized under such agreement; orCommentsClose CommentsPermalink





(2) prevent or restrict a national insurance agency or national insurance producer from engaging in any activity authorized by this Act on behalf of such non-United States insurer or require the agency or producer to be licensed by reason of engaging in such activity for such non-United States insurer.CommentsClose CommentsPermalink

SEC. 406. LICENSING COMMENCEMENT DATE.

The Commissioner shall not license a national insurance producer until the Commissioner notifies Congress that the Office is operational and that all regulations necessary to govern the licensing, operations, and supervision of such producer have been issued in final or interim final form. The Commissioner shall provide a notification to Congress not later than 2 years after the date of the enactment of this Act.CommentsClose CommentsPermalink

TITLE V--CHANGE IN CONTROL AND INSURANCE HOLDING COMPANIESCommentsClose CommentsPermalink

SEC. 501. CHANGE IN CONTROL.

(a) In General-CommentsClose CommentsPermalink





(1) LIMITATION- A person shall not, directly or indirectly or through or in concert with one or more other persons, acquire control of a national insurer until--CommentsClose CommentsPermalink





(A) such person has submitted a written notice as described in subsection (f) to the Commissioner of the intention of such person to acquire control of such national insurer; andCommentsClose CommentsPermalink





(B) the expiration of the disapproval period and all extensions of such period referred to in paragraph (2).CommentsClose CommentsPermalink





(2) DISAPPROVAL PERIOD-CommentsClose CommentsPermalink





(A) IN GENERAL- The Commissioner may disapprove the acquisition of effective control of a national insurer by issuing notice to the person wishing to acquire such effective control within 60 days of receiving a notice referred to in paragraph (1)(A).CommentsClose CommentsPermalink





(B) EXTENSION AUTHORIZED- The period for disapproval under subparagraph (A) may be extended not more than twice for a period of not more than 45 days each time, if--CommentsClose CommentsPermalink





(i) the Commissioner determines that an acquiring person has not furnished all the information required under this section;CommentsClose CommentsPermalink





(ii) in the judgment of the Commissioner, any material information submitted is substantially inaccurate;CommentsClose CommentsPermalink





(iii) the Commissioner has been unable to complete the investigation of an acquiring person required under this section because of any delay caused by, or the inadequate cooperation of, such acquiring person; orCommentsClose CommentsPermalink





(iv) the Commissioner determines that additional time is needed--CommentsClose CommentsPermalink





(I) to investigate and determine that no acquiring person has a record of failing to comply with the requirements of subchapter II of chapter 53 of title 31, United States Code; orCommentsClose CommentsPermalink





(II) to analyze the safety and soundness of any plans or proposals described in subsection (f)(6) or the future prospects of the national insurer.CommentsClose CommentsPermalink





(b) Investigation of Principals-CommentsClose CommentsPermalink





(1) IN GENERAL- Upon receiving a notice under subsection (a)(1), the Commissioner shall--CommentsClose CommentsPermalink





(A) conduct an investigation of the competence, experience, integrity, and financial ability of each person named in a notice of a proposed acquisition as a person by whom or for whom such acquisition is to be made; andCommentsClose CommentsPermalink





(B) make an independent determination of the accuracy and completeness of any information described in subsection (f) with respect to such person.CommentsClose CommentsPermalink





(2) REPORT- The Commissioner shall prepare a written report of any investigation under paragraph (1) that includes a summary of the results of such investigation and shall make such report publicly available in accordance with regulations issued by the Commissioner for the publication of reports under this paragraph.CommentsClose CommentsPermalink





(c) Public Comment- Upon receiving notice of a proposed acquisition, the Commissioner shall, unless the Commissioner determines that an emergency exists, within a reasonable period of time--CommentsClose CommentsPermalink





(1) publish the name of the national insurer to be acquired and the name of each person identified in such notice as a person by whom or for whom such acquisition is to be made; andCommentsClose CommentsPermalink





(2) solicit public comment on such proposed acquisition, particularly from persons in the geographic area where the national insurer is located, before final consideration of such notice by the Commissioner.CommentsClose CommentsPermalink





(d) Grounds for Disapproval- The Commissioner may disapprove a proposed acquisition, if--CommentsClose CommentsPermalink





(1) either the financial condition of any acquiring person or the future prospects of the institution is such as might jeopardize the financial stability of the national insurer or prejudice the interests of the customers of such insurer;CommentsClose CommentsPermalink





(2) the competence, experience, or integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the customers of the national insurer, or in the interest of the public to permit such person to control the national insurer; orCommentsClose CommentsPermalink





(3) any acquiring person neglects, fails, or refuses to furnish the Commissioner with all the information required by the Commissioner.CommentsClose CommentsPermalink





(e) Notice of Disapproval, Hearing-CommentsClose CommentsPermalink





(1) NOTICE OF DISAPPROVAL- Not later than 3 days after a decision to disapprove a proposed acquisition under this section, the Commissioner shall notify the acquiring person in writing of the disapproval. Such notice shall provide a statement of the basis for the disapproval.CommentsClose CommentsPermalink





(2) HEARING-CommentsClose CommentsPermalink





(A) IN GENERAL- Not later than 10 days after the receipt of a notice of disapproval under paragraph (1), a person may request a hearing before a United States district court with jurisdiction on the proposed acquisition.CommentsClose CommentsPermalink





(B) STANDARD OF REVIEW- A judge reviewing a notice of disapproval under paragraph (1) shall determine whether the decision of the Commissioner is reasonable.CommentsClose CommentsPermalink





(3) JUDICIAL REVIEW- A person whose proposed acquisition is disapproved after a hearing under paragraph (2) may obtain review by the United States court of appeals for the circuit in which the main office of the national insurer is to be acquired is located, or the United States Court of Appeals for the District of Columbia Circuit, by filing a notice of appeal in such court within 10 days from the date of such order, and simultaneously sending a copy of such notice by registered or certified mail to the Commissioner. The Commissioner shall promptly certify and file in such court the record upon which the disapproval was based. The findings of the Commissioner shall be set aside if found to be arbitrary or capricious or if found to violate procedures established by this section.CommentsClose CommentsPermalink





(f) Information- A notice described in this subsection is a notice that includes such relevant information in such form as the Commissioner may require by regulation or by specific request in connection with a particular notice.CommentsClose CommentsPermalink