49–008 

113TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 113–654 

PROVIDING FOR CONSIDERATION OF THE BILL (S. 2244) TO EXTEND THE 

TERMINATION DATE OF THE TERRORISM INSURANCE PROGRAM ESTABLISHED UNDER THE TERRORISM RISK INSURANCE ACT OF 2002, AND 

FOR OTHER PURPOSES; PROVIDING FOR CONSIDERATION OF MOTIONS 

TO SUSPEND THE RULES; AND PROVIDING FOR PROCEEDINGS DURING 

THE PERIOD FROM DECEMBER 12, 2014, THROUGH JANUARY 3, 2015 

DECEMBER 9, 2014.—Referred to the House Calendar and ordered to be printed 

Mr. SESSIONS, from the Committee on Rules, 

submitted the following 

R E P O R T 

[To accompany H. Res. 775] 

The Committee on Rules, having had under consideration House 

Resolution 775, by a nonrecord vote, report the same to the House 

with the recommendation that the resolution be adopted. 

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for consideration of S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014, under 

a closed rule. The resolution provides one hour of debate equally 

divided and controlled by the chair and ranking minority member 

of the Committee on Financial Services. The resolution waives all 

points of order against consideration of the bill. The resolution provides that the amendment in the nature of a substitute printed in 

this report shall be considered as adopted and the bill, as amended, 

shall be considered as read. The resolution waives all points of 

order against provisions in the bill, as amended. The resolution 

provides one motion to commit with or without instructions. 

Section 2 of the resolution provides that it shall be in order at 

any time on the legislative day of December 11, 2014, for the 

Speaker to entertain motions that the House suspend the rules as 

though under clause 1 of rule XV and that the Speaker or his designee shall consult with the Minority Leader or her designee on the 

designation of any matter for consideration pursuant to this section. 

Section 3 of the resolution provides that on any legislative day 

of the second session of the One Hundred Thirteenth Congress 

after December 11, 2014: the Journal of the proceedings of the previous day shall be considered as approved; and the Chair may at 


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any time declare the House adjourned to meet at a date and time, 

within the limits of clause 4, section 5, article I of the Constitution, 

to be announced by the Chair in declaring the adjournment. 

Section 4 of the resolution provides that the Speaker may appoint Members to perform the duties of the Chair for the duration 

of the period addressed by section 3 of the resolution as though 

under clause 8(a) of rule I. 

Section 5 provides that each day during the period addressed by 

section 3 shall not constitute a calendar day for purposes of section 

7 of the War Powers Resolution (50 U.S.C. 1546). 

Section 6 of the resolution provides that each day during the period addressed by section 3 of the resolution shall not constitute a 

legislative day for purposes of clause 7 of rule XIII (resolutions of 

inquiry). 

EXPLANATION OF WAIVERS

The waiver of all points of order against consideration of the bill 

includes a waiver of the following: 

Section 302(f) of the Congressional Budget Act, which prohibits 

consideration of amendments providing new budget authority in excess of a 302(a) allocation of such authority. 

Clause 10 of rule XXI, prohibiting the consideration of a bill if 

it has the net effect of increasing mandatory spending over the 

five-year or ten-year period. However, it is important to note the 

bill reduces the deficit by $147 million over 5 years and $457 million over 10 years. 

Although the resolution waives all points of order against provisions in the bill, as amended, the Committee is not aware of any 

points of order. The waiver is prophylactic in nature. 

SUMMARY OF THE AMENDMENT CONSIDERED AS ADOPTED

1. Neugebauer (TX): Substitute Amendment 

TEXT OF AMENDMENT CONSIDERED AS ADOPTED

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Terrorism Risk 

Insurance Program Reauthorization Act of 2014’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act is as 

follows: 

Sec. 1. Short title and table of contents. 

TITLE I—EXTENSION OF TERRORISM INSURANCE PROGRAM 

Sec. 101. Extension of Terrorism Insurance Program. 

Sec. 102. Federal share. 

Sec. 103. Program trigger. 

Sec. 104. Recoupment of Federal share of compensation under the program. 

Sec. 105. Certification of acts of terrorism; consultation with Secretary of Homeland 

Security. 

Sec. 106. Technical amendments. 

Sec. 107. Improving the certification process. 

Sec. 108. GAO study. 

Sec. 109. Membership of Board of Governors of the Federal Reserve System. 

Sec. 110. Advisory Committee on Risk-Sharing Mechanisms. 

Sec. 111. Reporting of terrorism insurance data. 

Sec. 112. Annual study of small insurer market competitiveness. 


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TITLE II—NATIONAL ASSOCIATION OF REGISTERED AGENTS AND 

BROKERS REFORM 

Sec. 201. Short title. 

Sec. 202. Reestablishment of the National Association of Registered Agents and 

Brokers. 

TITLE III—BUSINESS RISK MITIGATION AND PRICE STABILIZATION 

Sec. 301. Short title. 

Sec. 302. Margin requirements. 

Sec. 303. Implementation. 

TITLE I—EXTENSION OF TERRORISM 

INSURANCE PROGRAM 

SEC. 101. EXTENSION OF TERRORISM INSURANCE PROGRAM. 

Section 108(a) of the Terrorism Risk Insurance Act of 2002 (15 

U.S.C. 6701 note) is amended by striking ‘‘December 31, 2014’’ and 

inserting ‘‘December 31, 2020’’. 

SEC. 102. FEDERAL SHARE. 

Section 103(e)(1)(A) of the Terrorism Risk Insurance Act of 2002 

(15 U.S.C. 6701 note) is amended by inserting ‘‘and beginning on 

January 1, 2016, shall decrease by 1 percentage point per calendar 

year until equal to 80 percent’’ after ‘‘85 percent’’. 

SEC. 103. PROGRAM TRIGGER. 

Subparagraph (B) of section 103(e)(1) (15 U.S.C. 6701 note) is 

amended in the matter preceding clause (i)— 

(1) by striking ‘‘a certified act’’ and inserting ‘‘certified acts’’; 

(2) by striking ‘‘such certified act’’ and inserting ‘‘such certified acts’’; and 

(3) by striking ‘‘exceed’’ and all that follows through clause 

(ii) and inserting the following: ‘‘exceed— 

‘‘(i) $100,000,000, with respect to such insured losses 

occurring in calendar year 2015; ‘‘(ii) $120,000,000, with respect to such insured 

losses occurring in calendar year 2016; ‘‘(iii) $140,000,000, with respect to such insured 

losses occurring in calendar year 2017; ‘‘(iv) $160,000,000, with respect to such insured 

losses occurring in calendar year 2018; ‘‘(v) $180,000,000, with respect to such insured 

losses occurring in calendar year 2019; and ‘‘(vi) $200,000,000, with respect to such insured 

losses occurring in calendar year 2020 and any calendar year thereafter.’’. 

SEC. 104. RECOUPMENT OF FEDERAL SHARE OF COMPENSATION 

UNDER THE PROGRAM. 

Section 103(e) of the Terrorism Risk Insurance Act of 2002 (15 

U.S.C. 6701 note) is amended— 

(1) by amending paragraph (6) to read as follows: 

‘‘(6) INSURANCE MARKETPLACE AGGREGATE RETENTION

AMOUNT.— 

‘‘(A) IN GENERAL.—For purposes of paragraph (7), the insurance marketplace aggregate retention amount shall be 

the lesser of— 


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‘‘(i) $27,500,000,000, as such amount is revised pursuant to this paragraph; and 

‘‘(ii) the aggregate amount, for all insurers, of insured losses during such calendar year. 

‘‘(B) REVISION OF INSURANCE MARKETPLACE AGGREGATE

RETENTION AMOUNT.— ‘‘(i) PHASE-IN.—Beginning in the calendar year that 

follows the date of enactment of the Terrorism Risk 

Insurance Program Reauthorization Act of 2014, the 

amount set forth under subparagraph (A)(i) shall increase by $2,000,000,000 per calendar year until equal 

to $37,500,000,000. 

‘‘(ii) FURTHER REVISION.—Beginning in the calendar 

year that follows the calendar year in which the 

amount set forth under subparagraph (A)(i) is equal to 

$37,500,000,000, the amount under subparagraph 

(A)(i) shall be revised to be the amount equal to the 

annual average of the sum of insurer deductibles for 

all insurers participating in the Program for the prior 

3 calendar years, as such sum is determined by the 

Secretary under subparagraph (C). 

‘‘(C) RULEMAKING.—Not later than 3 years after the date 

of enactment of the Terrorism Risk Insurance Program Reauthorization Act of 2014, the Secretary shall— 

‘‘(i) issue final rules for determining the amount of 

the sum described under subparagraph (B)(ii); and 

‘‘(ii) provide a timeline for public notification of such 

determination.’’; and 

(2) in paragraph (7)— 

(A) in subparagraph (A)— 

(i) in the matter preceding clause (i), by striking ‘‘for 

each of the periods referred to in subparagraphs (A) 

through (E) of paragraph (6)’’; and 

(ii) in clause (i), by striking ‘‘for such period’’; 

(B) by striking subparagraph (B) and inserting the following: 

‘‘(B) [Reserved.]’’; 

(C) in subparagraph (C)— 

(i) by striking ‘‘occurring during any of the periods 

referred to in any of subparagraphs (A) through (E) of 

paragraph (6), terrorism loss risk-spreading premiums 

in an amount equal to 133 percent’’ and inserting ‘‘, 

terrorism loss risk-spreading premiums in an amount 

equal to 140 percent’’; and 

(ii) by inserting ‘‘as calculated under subparagraph 

(A)’’ after ‘‘mandatory recoupment amount’’; and 

(D) in subparagraph (E)(i)— 

(i) in subclause (I)— 

(I) by striking ‘‘2010’’ and inserting ‘‘2017’’; and 

(II) by striking ‘‘2012’’ and inserting ‘‘2019’’; 

(ii) in subclause (II)— 

(I) by striking ‘‘2011’’ and inserting ‘‘2018’’; 

(II) by striking ‘‘2012’’ and inserting ‘‘2019’’; and 

(III) by striking ‘‘2017’’ and inserting ‘‘2024’’; 

and 


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(iii) in subclause (III)— 

(I) by striking ‘‘2012’’ and inserting ‘‘2019’’; and 

(II) by striking ‘‘2017’’ and inserting ‘‘2024’’. 

SEC. 105. CERTIFICATION OF ACTS OF TERRORISM; CONSULTATION 

WITH SECRETARY OF HOMELAND SECURITY. 

(a) IN GENERAL.—Paragraph (1)(A) of section 102 (15 U.S.C. 6701 

note) is amended in the matter preceding clause (i), by striking 

‘‘concurrence with the Secretary of State’’ and inserting ‘‘consultation with the Secretary of Homeland Security’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall take effect on January 1, 2015. 

SEC. 106. TECHNICAL AMENDMENTS. 

The Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) 

is amended— 

(1) in section 102— 

(A) in paragraph (3)— 

(i) by redesignating subparagraphs (A), (B), and (C) 

as clauses (i), (ii), and (iii), respectively; 

(ii) in the matter preceding clause (i) (as so redesignated), by striking ‘‘An entity has’’ and inserting the 

following: 

‘‘(A) IN GENERAL.—An entity has’’; and 

(iii) by adding at the end the following new subparagraph: 

‘‘(B) RULE OF CONSTRUCTION.—An entity, including any 

affiliate thereof, does not have ‘control’ over another entity, 

if, as of the date of enactment of the Terrorism Risk Insurance Program Reauthorization Act of 2014, the entity is 

acting as an attorney-in-fact, as defined by the Secretary, 

for the other entity and such other entity is a reciprocal 

insurer, provided that the entity is not, for reasons other 

than the attorney-in-fact relationship, defined as having 

‘control’ under subparagraph (A).’’; 

(B) in paragraph (7)— 

(i) by striking subparagraphs (A) through (F) and inserting the following: 

‘‘(A) the value of an insurer’s direct earned premiums 

during the immediately preceding calendar year, multiplied by 20 percent; and’’; 

(ii) by redesignating subparagraph (G) as subparagraph (B); and 

(iii) in subparagraph (B), as so redesignated by 

clause (ii)— 

(I) by striking ‘‘notwithstanding subparagraphs 

(A) through (F), for the Transition Period or any 

Program Year’’ and inserting ‘‘notwithstanding 

subparagraph (A), for any calendar year’’; and 

(II) by striking ‘‘Period or Program Year’’ and 

inserting ‘‘calendar year’’; 

(C) by striking paragraph (11); and 

(D) by redesignating paragraphs (12) through (16) as 

paragraphs (11) through (15), respectively; and 

(2) in section 103— 

(A) in subsection (b)(2)— 


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(i) in subparagraph (B), by striking ‘‘, purchase,’’; 

and 

(ii) in subparagraph (C), by striking ‘‘, purchase,’’; 

(B) in subsection (c), by striking ‘‘Program Year’’ and inserting ‘‘calendar year’’; 

(C) in subsection (e)— 

(i) in paragraph (1)(A), as previously amended by 

section 102— 

(I) by striking ‘‘the Transition Period and each 

Program Year through Program Year 4 shall be 

equal to 90 percent, and during Program Year 5 

and each Program Year thereafter’’ and inserting 

‘‘each calendar year’’; 

(II) by striking the comma after ‘‘80 percent’’; 

and 

(III) by striking ‘‘such Transition Period or such 

Program Year’’ and inserting ‘‘such calendar 

year’’; and 

(ii) in paragraph (2)(A), by striking ‘‘the period beginning on the first day of the Transition Period and 

ending on the last day of Program Year 1, or during 

any Program Year thereafter’’ and inserting ‘‘a calendar year’’; and 

(iii) in paragraph (3), by striking ‘‘the period beginning on the first day of the Transition Period and ending on the last day of Program Year 1, or during any 

other Program Year’’ and inserting ‘‘any calendar 

year’’; and 

(D) in subsection (g)(2)— 

(i) by striking ‘‘the Transition Period or a Program 

Year’’ each place that term appears and inserting ‘‘the 

calendar year’’; 

(ii) by striking ‘‘such period’’ and inserting ‘‘the calendar year’’; and 

(iii) by striking ‘‘that period’’ and inserting ‘‘the calendar year’’. 

SEC. 107. IMPROVING THE CERTIFICATION PROCESS. 

(a) DEFINITIONS.—As used in this section— 

(1) the term ‘‘act of terrorism’’ has the same meaning as in 

section 102(1) of the Terrorism Risk Insurance Act of 2002 (15 

U.S.C. 6701 note); 

(2) the term ‘‘certification process’’ means the process by 

which the Secretary determines whether to certify an act as an 

act of terrorism under section 102(1) of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note); and 

(3) the term ‘‘Secretary’’ means the Secretary of the Treasury. 

(b) STUDY.—Not later than 9 months after the date of enactment 

of this Act, the Secretary shall conduct and complete a study on the 

certification process. 

(c) REQUIRED CONTENT.—The study required under subsection (a) 

shall include an examination and analysis of— 

(1) the establishment of a reasonable timeline by which the 

Secretary must make an accurate determination on whether to 

certify an act as an act of terrorism; 


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(2) the impact that the length of any timeline proposed to be 

established under paragraph (1) may have on the insurance industry, policyholders, consumers, and taxpayers as a whole; 

(3) the factors the Secretary would evaluate and monitor 

during the certification process, including the ability of the 

Secretary to obtain the required information regarding the 

amount of projected and incurred losses resulting from an act 

which the Secretary would need in determining whether to certify the act as an act of terrorism; 

(4) the appropriateness, efficiency, and effectiveness of the 

consultation process required under section 102(1)(A) of the 

Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) 

and any recommendations on changes to the consultation process; and 

(5) the ability of the Secretary to provide guidance and updates to the public regarding any act that may reasonably be 

certified as an act of terrorism. 

(d) REPORT.—Upon completion of the study required under subsection (a), the Secretary shall submit a report on the results of 

such study to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the 

House of Representatives. 

(e) RULEMAKING.—Section 102(1) of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended— 

(1) by redesignating subparagraph (D) as subparagraph (E); 

and 

(2) by inserting after subparagraph (C) the following: 

‘‘(D) TIMING OF CERTIFICATION.—Not later than 9 months 

after the report required under section 107 of the Terrorism Risk Insurance Program Reauthorization Act of 

2014 is submitted to the appropriate committees of Congress, the Secretary shall issue final rules governing the 

certification process, including establishing a timeline for 

which an act is eligible for certification by the Secretary on 

whether an act is an act of terrorism under this paragraph.’’. 

SEC. 108. GAO STUDY. 

(a) STUDY.—Not later than 2 years after the date of enactment 

of this Act, the Comptroller General of the United States shall complete a study on the viability and effects of the Federal Government— 

(1) assessing and collecting upfront premiums on insurers 

that participate in the Terrorism Insurance Program established under the Terrorism Risk Insurance Act of 2002 (15 

U.S.C. 6701 note) (hereafter in this section referred to as the 

‘‘Program’’), which shall include a comparison of practices in 

international markets to assess and collect premiums either 

before or after terrorism losses are incurred; and 

(2) creating a capital reserve fund under the Program and 

requiring insurers participating in the Program to dedicate 

capital specifically for terrorism losses before such losses are 

incurred, which shall include a comparison of practices in 

international markets to establish reserve funds. 

(b) REQUIRED CONTENT.—The study required under subsection 

(a) shall examine, but shall not be limited to, the following issues: 


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(1) UPFRONT PREMIUMS.—With respect to upfront premiums 

described in subsection (a)(1)— 

(A) how the Federal Government could determine the 

price of such upfront premiums on insurers that participate in the Program; 

(B) how the Federal Government could collect and manage such upfront premiums; 

(C) how the Federal Government could ensure that such 

upfront premiums are not spent for purposes other than 

claims through the Program; 

(D) how the assessment and collection of such upfront 

premiums could affect take-up rates for terrorism risk coverage in different regions and industries and how it could 

impact small businesses and consumers in both metropolitan and non-metropolitan areas; 

(E) the effect of collecting such upfront premiums on insurers both large and small; 

(F) the effect of collecting such upfront premiums on the 

private market for terrorism risk reinsurance; and 

(G) the size of any Federal Government subsidy insurers 

may receive through their participation in the Program, 

taking into account the Program’s current post-event 

recoupment structure. 

(2) CAPITAL RESERVE FUND.—With respect to the capital reserve fund described in subsection (a)(2)— 

(A) how the creation of a capital reserve fund would affect the Federal Government’s fiscal exposure under the 

Terrorism Risk Insurance Program and the ability of the 

Program to meet its statutory purposes; 

(B) how a capital reserve fund would impact insurers 

and reinsurers, including liquidity, insurance pricing, and 

capacity to provide terrorism risk coverage; 

(C) the feasibility of segregating funds attributable to 

terrorism risk from funds attributable to other insurance 

lines; 

(D) how a capital reserve fund would be viewed and 

treated under current Financial Accounting Standards 

Board accounting rules and the tax laws; and 

(E) how a capital reserve fund would affect the States’ 

ability to regulate insurers participating in the Program. 

(3) INTERNATIONAL PRACTICES.—With respect to international 

markets referred to in paragraphs (1) and (2) of subsection (a), 

how other countries, if any— 

(A) have established terrorism insurance structures; 

(B) charge premiums or otherwise collect funds to pay 

for the costs of terrorism insurance structures, including 

risk and administrative costs; and 

(C) have established capital reserve funds to pay for the 

costs of terrorism insurance structures. 

(c) REPORT.—Upon completion of the study required under subsection (a), the Comptroller General shall submit a report on the 

results of such study to the Committee on Banking, Housing, and 

Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives. 


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(d) PUBLIC AVAILABILITY.—The study and report required under 

this section shall be made available to the public in electronic form 

and shall be published on the website of the Government Accountability Office. 

SEC. 109. MEMBERSHIP OF BOARD OF GOVERNORS OF THE FEDERAL 

RESERVE SYSTEM. 

(a) IN GENERAL.—The first undesignated paragraph of section 10 

of the Federal Reserve Act (12 U.S.C. 241) is amended by inserting 

after the second sentence the following: ‘‘In selecting members of 

the Board, the President shall appoint at least 1 member with 

demonstrated primary experience working in or supervising community banks having less than $10,000,000,000 in total assets.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

take effect on the date of enactment of this Act and apply to appointments made on and after that effective date, excluding any 

nomination pending in the Senate on that date. 

SEC. 110. ADVISORY COMMITTEE ON RISK-SHARING MECHANISMS. 

(a) FINDING; RULE OF CONSTRUCTION.— 

(1) FINDING.—Congress finds that it is desirable to encourage 

the growth of nongovernmental, private market reinsurance 

capacity for protection against losses arising from acts of terrorism. 

(2) RULE OF CONSTRUCTION.—Nothing in this Act, any 

amendment made by this Act, or the Terrorism Risk Insurance 

Act of 2002 (15 U.S.C. 6701 note) shall prohibit insurers from 

developing risk-sharing mechanisms to voluntarily reinsure 

terrorism losses between and among themselves. 

(b) ADVISORY COMMITTEE ON RISK-SHARING MECHANISMS.— 

(1) ESTABLISHMENT.—The Secretary of the Treasury shall establish and appoint an advisory committee to be known as the 

‘‘Advisory Committee on Risk-Sharing Mechanisms’’ (referred 

to in this subsection as the ‘‘Advisory Committee’’). 

(2) DUTIES.—The Advisory Committee shall provide advice, 

recommendations, and encouragement with respect to the creation and development of the nongovernmental risk-sharing 

mechanisms described under subsection (a). 

(3) MEMBERSHIP.—The Advisory Committee shall be composed of 9 members who are directors, officers, or other employees of insurers, reinsurers, or capital market participants 

that are participating or that desire to participate in the nongovernmental risk-sharing mechanisms described under subsection (a), and who are representative of the affected sectors 

of the insurance industry, including commercial property insurance, commercial casualty insurance, reinsurance, and alternative risk transfer industries. 

(c) EFFECTIVE DATE.—The provisions of this section shall take effect on January 1, 2015. 

SEC. 111. REPORTING OF TERRORISM INSURANCE DATA. 

Section 104 (15 U.S.C. 6701 note) is amended by adding at the 

end the following new subsection: 

‘‘(h) REPORTING OF TERRORISM INSURANCE DATA.— 

‘‘(1) AUTHORITY.—During the calendar year beginning on 

January 1, 2016, and in each calendar year thereafter, the Secretary shall require insurers participating in the Program to 


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submit to the Secretary such information regarding insurance 

coverage for terrorism losses of such insurers as the Secretary 

considers appropriate to analyze the effectiveness of the Program, which shall include information regarding— 

‘‘(A) lines of insurance with exposure to such losses; 

‘‘(B) premiums earned on such coverage; 

‘‘(C) geographical location of exposures; 

‘‘(D) pricing of such coverage; 

‘‘(E) the take-up rate for such coverage; 

‘‘(F) the amount of private reinsurance for acts of terrorism purchased; and 

‘‘(G) such other matters as the Secretary considers appropriate. 

‘‘(2) REPORTS.—Not later than June 30, 2016, and every 

other June 30 thereafter, the Secretary shall submit a report 

to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and 

Urban Affairs of the Senate that includes— 

‘‘(A) an analysis of the overall effectiveness of the Program; 

‘‘(B) an evaluation of any changes or trends in the data 

collected under paragraph (1); 

‘‘(C) an evaluation of whether any aspects of the Program have the effect of discouraging or impeding insurers 

from providing commercial property casualty insurance 

coverage or coverage for acts of terrorism; 

‘‘(D) an evaluation of the impact of the Program on 

workers’ compensation insurers; and 

‘‘(E) in the case of the data reported in paragraph (1)(B), 

an updated estimate of the total amount earned since January 1, 2003. 

‘‘(3) PROTECTION OF DATA.—To the extent possible, the Secretary shall contract with an insurance statistical aggregator 

to collect the information described in paragraph (1), which 

shall keep any nonpublic information confidential and provide 

it to the Secretary in an aggregate form or in such other form 

or manner that does not permit identification of the insurer 

submitting such information. 

‘‘(4) ADVANCE COORDINATION.—Before collecting any data or 

information under paragraph (1) from an insurer, or affiliate of 

an insurer, the Secretary shall coordinate with the appropriate 

State insurance regulatory authorities and any relevant government agency or publicly available sources to determine if 

the information to be collected is available from, and may be 

obtained in a timely manner by, individually or collectively, 

such entities. If the Secretary determines that such data or information is available, and may be obtained in a timely matter, 

from such entities, the Secretary shall obtain the data or information from such entities. If the Secretary determines that 

such data or information is not so available, the Secretary may 

collect such data or information from an insurer and affiliates. 

‘‘(5) CONFIDENTIALITY.— ‘‘(A) RETENTION OF PRIVILEGE.—The submission of any 

non-publicly available data and information to the Secretary and the sharing of any non-publicly available data 


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with or by the Secretary among other Federal agencies, 

the State insurance regulatory authorities, or any other 

entities under this subsection shall not constitute a waiver 

of, or otherwise affect, any privilege arising under Federal 

or State law (including the rules of any Federal or State 

court) to which the data or information is otherwise subject. 

‘‘(B) CONTINUED APPLICATION OF PRIOR CONFIDENTIALITY

AGREEMENTS.—Any requirement under Federal or State 

law to the extent otherwise applicable, or any requirement 

pursuant to a written agreement in effect between the 

original source of any non-publicly available data or information and the source of such data or information to the 

Secretary, regarding the privacy or confidentiality of any 

data or information in the possession of the source to the 

Secretary, shall continue to apply to such data or information after the data or information has been provided pursuant to this subsection. 

‘‘(C) INFORMATION-SHARING AGREEMENT.—Any data or 

information obtained by the Secretary under this subsection may be made available to State insurance regulatory authorities, individually or collectively through an 

information-sharing agreement that— 

‘‘(i) shall comply with applicable Federal law; and 

‘‘(ii) shall not constitute a waiver of, or otherwise affect, any privilege under Federal or State law (including any privilege referred to in subparagraph (A) and 

the rules of any Federal or State court) to which the 

data or information is otherwise subject. 

‘‘(D) AGENCY DISCLOSURE REQUIREMENTS.—Section 552 

of title 5, United States Code, including any exceptions 

thereunder, shall apply to any data or information submitted under this subsection to the Secretary by an insurer or affiliate of an insurer.’’. 

SEC. 112. ANNUAL STUDY OF SMALL INSURER MARKET COMPETITIVENESS. 

Section 108 (15 U.S.C. 6701 note) is amended by adding at the 

end the following new subsection: 

‘‘(h) STUDY OF SMALL INSURER MARKET COMPETITIVENESS.— 

‘‘(1) IN GENERAL.—Not later than June 30, 2017, and every 

other June 30 thereafter, the Secretary shall conduct a study 

of small insurers (as such term is defined by regulation by the 

Secretary) participating in the Program, and identify any competitive challenges small insurers face in the terrorism risk insurance marketplace, including— 

‘‘(A) changes to the market share, premium volume, and 

policyholder surplus of small insurers relative to large insurers; 

‘‘(B) how the property and casualty insurance market for 

terrorism risk differs between small and large insurers, 

and whether such a difference exists within other perils; 

‘‘(C) the impact of the Program’s mandatory availability 

requirement under section 103(c) on small insurers; 

‘‘(D) the effect of increasing the trigger amount for the 

Program under section 103(e)(1)(B) on small insurers; 


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‘‘(E) the availability and cost of private reinsurance for 

small insurers; and 

‘‘(F) the impact that State workers compensation laws 

have on small insurers and workers compensation carriers 

in the terrorism risk insurance marketplace. 

‘‘(2) REPORT.—The Secretary shall submit a report to the 

Congress setting forth the findings and conclusions of each 

study required under paragraph (1).’’. 

TITLE II—NATIONAL ASSOCIATION OF 

REGISTERED AGENTS AND BROKERS 

REFORM 

SEC. 201. SHORT TITLE. 

This title may be cited as the ‘‘National Association of Registered 

Agents and Brokers Reform Act of 2014’’. 

SEC. 202. REESTABLISHMENT OF THE NATIONAL ASSOCIATION OF 

REGISTERED AGENTS AND BROKERS. 

(a) IN GENERAL.—Subtitle C of title III of the Gramm-Leach-Bliley Act (15 U.S.C. 6751 et seq.) is amended to read as follows: 

‘‘Subtitle C—National Association of 

Registered Agents and Brokers 

‘‘SEC. 321. NATIONAL ASSOCIATION OF REGISTERED AGENTS AND 

BROKERS. 

‘‘(a) ESTABLISHMENT.—There is established the National Association of Registered Agents and Brokers (referred to in this subtitle 

as the ‘Association’). 

‘‘(b) STATUS.—The Association shall— 

‘‘(1) be a nonprofit corporation; 

‘‘(2) not be an agent or instrumentality of the Federal Government; 

‘‘(3) be an independent organization that may not be merged 

with or into any other private or public entity; and 

‘‘(4) except as otherwise provided in this subtitle, be subject 

to, and have all the powers conferred upon, a nonprofit corporation by the District of Columbia Nonprofit Corporation Act 

(D.C. Code, sec. 29–301.01 et seq.) or any successor thereto. 

‘‘SEC. 322. PURPOSE. 

‘‘The purpose of the Association shall be to provide a mechanism 

through which licensing, continuing education, and other nonresident insurance producer qualification requirements and conditions may be adopted and applied on a multi-state basis without 

affecting the laws, rules, and regulations, and preserving the rights 

of a State, pertaining to— 

‘‘(1) licensing, continuing education, and other qualification 

requirements of insurance producers that are not members of 

the Association; 

‘‘(2) resident or nonresident insurance producer appointment 

requirements; 


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‘‘(3) supervising and disciplining resident and nonresident insurance producers; 

‘‘(4) establishing licensing fees for resident and nonresident 

insurance producers so that there is no loss of insurance producer licensing revenue to the State; and 

‘‘(5) prescribing and enforcing laws and regulations regulating the conduct of resident and nonresident insurance producers. 

‘‘SEC. 323. MEMBERSHIP. 

‘‘(a) ELIGIBILITY.— ‘‘(1) IN GENERAL.—Any insurance producer licensed in its 

home State shall, subject to paragraphs (2) and (4), be eligible 

to become a member of the Association. 

‘‘(2) INELIGIBILITY FOR SUSPENSION OR REVOCATION OF LI- CENSE.—Subject to paragraph (3), an insurance producer is not 

eligible to become a member of the Association if a State insurance regulator has suspended or revoked the insurance license 

of the insurance producer in that State. 

‘‘(3) RESUMPTION OF ELIGIBILITY.—Paragraph (2) shall cease 

to apply to any insurance producer if— 

‘‘(A) the State insurance regulator reissues or renews the 

license of the insurance producer in the State in which the 

license was suspended or revoked, or otherwise terminates 

or vacates the suspension or revocation; or 

‘‘(B) the suspension or revocation expires or is subsequently overturned by a court of competent jurisdiction. 

‘‘(4) CRIMINAL HISTORY RECORD CHECK REQUIRED.— ‘‘(A) IN GENERAL.—An insurance producer who is an individual shall not be eligible to become a member of the 

Association unless the insurance producer has undergone 

a criminal history record check that complies with regulations prescribed by the Attorney General of the United 

States under subparagraph (K). 

‘‘(B) CRIMINAL HISTORY RECORD CHECK REQUESTED BY

HOME STATE.—An insurance producer who is licensed in a 

State and who has undergone a criminal history record 

check during the 2-year period preceding the date of submission of an application to become a member of the Association, in compliance with a requirement to undergo such 

criminal history record check as a condition for such licensure in the State, shall be deemed to have undergone a 

criminal history record check for purposes of subparagraph 

(A). 

‘‘(C) CRIMINAL HISTORY RECORD CHECK REQUESTED BY ASSOCIATION.— 

‘‘(i) IN GENERAL.—The Association shall, upon request by an insurance producer licensed in a State, 

submit fingerprints or other identification information 

obtained from the insurance producer, and a request 

for a criminal history record check of the insurance 

producer, to the Federal Bureau of Investigation. 

‘‘(ii) PROCEDURES.—The board of directors of the Association (referred to in this subtitle as the ‘Board’) 

shall prescribe procedures for obtaining and utilizing 

fingerprints or other identification information and 


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criminal history record information, including the establishment of reasonable fees to defray the expenses 

of the Association in connection with the performance 

of a criminal history record check and appropriate 

safeguards for maintaining confidentiality and security of the information. Any fees charged pursuant to 

this clause shall be separate and distinct from those 

charged by the Attorney General pursuant to subparagraph (I). 

‘‘(D) FORM OF REQUEST.—A submission under subparagraph (C)(i) shall include such fingerprints or other identification information as is required by the Attorney General 

concerning the person about whom the criminal history 

record check is requested, and a statement signed by the 

person authorizing the Attorney General to provide the information to the Association and for the Association to receive the information. 

‘‘(E) PROVISION OF INFORMATION BY ATTORNEY GENERAL.—Upon receiving a submission under subparagraph 

(C)(i) from the Association, the Attorney General shall 

search all criminal history records of the Federal Bureau 

of Investigation, including records of the Criminal Justice 

Information Services Division of the Federal Bureau of Investigation, that the Attorney General determines appropriate for criminal history records corresponding to the fingerprints or other identification information provided 

under subparagraph (D) and provide all criminal history 

record information included in the request to the Association. 

‘‘(F) LIMITATION ON PERMISSIBLE USES OF INFORMATION.—Any information provided to the Association under 

subparagraph (E) may only— 

‘‘(i) be used for purposes of determining compliance 

with membership criteria established by the Association; 

‘‘(ii) be disclosed to State insurance regulators, or 

Federal or State law enforcement agencies, in conformance with applicable law; or 

‘‘(iii) be disclosed, upon request, to the insurance 

producer to whom the criminal history record information relates. 

‘‘(G) PENALTY FOR IMPROPER USE OR DISCLOSURE.—Whoever knowingly uses any information provided under subparagraph (E) for a purpose not authorized in subparagraph (F), or discloses any such information to anyone not 

authorized to receive it, shall be fined not more than 

$50,000 per violation as determined by a court of competent jurisdiction. 

‘‘(H) RELIANCE ON INFORMATION.—Neither the Association nor any of its Board members, officers, or employees 

shall be liable in any action for using information provided 

under subparagraph (E) as permitted under subparagraph 

(F) in good faith and in reasonable reliance on its accuracy. 


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‘‘(I) FEES.—The Attorney General may charge a reasonable fee for conducting the search and providing the information under subparagraph (E), and any such fee shall be 

collected and remitted by the Association to the Attorney 

General. 

‘‘(J) RULE OF CONSTRUCTION.—Nothing in this paragraph 

shall be construed as— 

‘‘(i) requiring a State insurance regulator to perform 

criminal history record checks under this section; or 

‘‘(ii) limiting any other authority that allows access 

to criminal history records. 

‘‘(K) REGULATIONS.—The Attorney General shall prescribe regulations to carry out this paragraph, which shall 

include— 

‘‘(i) appropriate protections for ensuring the confidentiality of information provided under subparagraph (E); and 

‘‘(ii) procedures providing a reasonable opportunity 

for an insurance producer to contest the accuracy of 

information regarding the insurance producer provided 

under subparagraph (E). 

‘‘(L) INELIGIBILITY FOR MEMBERSHIP.— 

‘‘(i) IN GENERAL.—The Association may, under reasonably consistently applied standards, deny membership to an insurance producer on the basis of criminal 

history record information provided under subparagraph (E), or where the insurance producer has been 

subject to disciplinary action, as described in paragraph (2). 

‘‘(ii) RIGHTS OF APPLICANTS DENIED MEMBERSHIP.— 

The Association shall notify any insurance producer 

who is denied membership on the basis of criminal 

history record information provided under subparagraph (E) of the right of the insurance producer to— 

‘‘(I) obtain a copy of all criminal history record 

information provided to the Association under 

subparagraph (E) with respect to the insurance 

producer; and 

‘‘(II) challenge the denial of membership based 

on the accuracy and completeness of the information. 

‘‘(M) DEFINITION.—For purposes of this paragraph, the 

term ‘criminal history record check’ means a national 

background check of criminal history records of the Federal Bureau of Investigation. 

‘‘(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRITERIA.—The Association may establish membership criteria that bear a reasonable 

relationship to the purposes for which the Association was established. 

‘‘(c) ESTABLISHMENT OF CLASSES AND CATEGORIES OF MEMBERSHIP.— 

‘‘(1) CLASSES OF MEMBERSHIP.—The Association may establish separate classes of membership, with separate criteria, if 

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ferent duties requires different levels of education, training, experience, or other qualifications. 

‘‘(2) BUSINESS ENTITIES.—The Association shall establish a 

class of membership and membership criteria for business entities. A business entity that applies for membership shall be required to designate an individual Association member responsible for the compliance of the business entity with Association 

standards and the insurance laws, standards, and regulations 

of any State in which the business entity seeks to do business 

on the basis of Association membership. 

‘‘(3) CATEGORIES.— 

‘‘(A) SEPARATE CATEGORIES FOR INSURANCE PRODUCERS

PERMITTED.—The Association may establish separate categories of membership for insurance producers and for 

other persons or entities within each class, based on the 

types of licensing categories that exist under State laws. 

‘‘(B) SEPARATE TREATMENT FOR DEPOSITORY INSTITUTIONS

PROHIBITED.—No special categories of membership, and no 

distinct membership criteria, shall be established for members that are depository institutions or for employees, 

agents, or affiliates of depository institutions. 

‘‘(d) MEMBERSHIP CRITERIA.— 

‘‘(1) IN GENERAL.—The Association may establish criteria for 

membership which shall include standards for personal qualifications, education, training, and experience. The Association 

shall not establish criteria that unfairly limit the ability of a 

small insurance producer to become a member of the Association, including imposing discriminatory membership fees. 

‘‘(2) QUALIFICATIONS.—In establishing criteria under paragraph (1), the Association shall not adopt any qualification less 

protective to the public than that contained in the National Association of Insurance Commissioners (referred to in this subtitle as the ‘NAIC’) Producer Licensing Model Act in effect as 

of the date of enactment of the National Association of Registered Agents and Brokers Reform Act of 2014, and shall consider the highest levels of insurance producer qualifications established under the licensing laws of the States. 

‘‘(3) ASSISTANCE FROM STATES.— 

‘‘(A) IN GENERAL.—The Association may request a State 

to provide assistance in investigating and evaluating the 

eligibility of a prospective member for membership in the 

Association. 

‘‘(B) AUTHORIZATION OF INFORMATION SHARING.—A submission under subsection (a)(4)(C)(i) made by an insurance 

producer licensed in a State shall include a statement 

signed by the person about whom the assistance is requested authorizing— 

‘‘(i) the State to share information with the Association; and 

‘‘(ii) the Association to receive the information. 

‘‘(C) RULE OF CONSTRUCTION.—Subparagraph (A) shall 

not be construed as requiring or authorizing any State to 

adopt new or additional requirements concerning the licensing or evaluation of insurance producers. 


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‘‘(4) DENIAL OF MEMBERSHIP.—The Association may, based on 

reasonably consistently applied standards, deny membership to 

any State-licensed insurance producer for failure to meet the 

membership criteria established by the Association. 

‘‘(e) EFFECT OF MEMBERSHIP.— ‘‘(1) AUTHORITY OF ASSOCIATION MEMBERS.—Membership in 

the Association shall— 

‘‘(A) authorize an insurance producer to sell, solicit, or 

negotiate insurance in any State for which the member 

pays the licensing fee set by the State for any line or lines 

of insurance specified in the home State license of the insurance producer, and exercise all such incidental powers 

as shall be necessary to carry out such activities, including 

claims adjustments and settlement to the extent permissible under the laws of the State, risk management, employee benefits advice, retirement planning, and any other 

insurance-related consulting activities; 

‘‘(B) be the equivalent of a nonresident insurance producer license for purposes of authorizing the insurance 

producer to engage in the activities described in subparagraph (A) in any State where the member pays the licensing fee; and 

‘‘(C) be the equivalent of a nonresident insurance producer license for the purpose of subjecting an insurance 

producer to all laws, regulations, provisions or other action 

of any State concerning revocation, suspension, or other 

enforcement action related to the ability of a member to 

engage in any activity within the scope of authority granted under this subsection and to all State laws, regulations, 

provisions, and actions preserved under paragraph (5). 

‘‘(2) VIOLENT CRIME CONTROL AND LAW ENFORCEMENT ACT OF

1994.—Nothing in this subtitle shall be construed to alter, modify, or supercede any requirement established by section 1033 

of title 18, United States Code. 

‘‘(3) AGENT FOR REMITTING FEES.—The Association shall act 

as an agent for any member for purposes of remitting licensing 

fees to any State pursuant to paragraph (1). 

‘‘(4) NOTIFICATION OF ACTION.— ‘‘(A) IN GENERAL.—The Association shall notify the 

States (including State insurance regulators) and the 

NAIC when an insurance producer has satisfied the membership criteria of this section. The States (including State 

insurance regulators) shall have 10 business days after the 

date of the notification in order to provide the Association 

with evidence that the insurance producer does not satisfy 

the criteria for membership in the Association. 

‘‘(B) ONGOING DISCLOSURES REQUIRED.—On an ongoing 

basis, the Association shall disclose to the States (including State insurance regulators) and the NAIC a list of the 

States in which each member is authorized to operate. The 

Association shall immediately notify the States (including 

State insurance regulators) and the NAIC when a member 

is newly authorized to operate in one or more States, or is 

no longer authorized to operate in one or more States on 

the basis of Association membership. 


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‘‘(5) PRESERVATION OF CONSUMER PROTECTION AND MARKET

CONDUCT REGULATION.— 

‘‘(A) IN GENERAL.—No provision of this section shall be 

construed as altering or affecting the applicability or continuing effectiveness of any law, regulation, provision, or 

other action of any State, including those described in subparagraph (B), to the extent that the State law, regulation, 

provision, or other action is not inconsistent with the provisions of this subtitle related to market entry for nonresident insurance producers, and then only to the extent 

of the inconsistency. 

‘‘(B) PRESERVED REGULATIONS.—The laws, regulations, 

provisions, or other actions of any State referred to in subparagraph (A) include laws, regulations, provisions, or 

other actions that— 

‘‘(i) regulate market conduct, insurance producer 

conduct, or unfair trade practices; 

‘‘(ii) establish consumer protections; or 

‘‘(iii) require insurance producers to be appointed by 

a licensed or authorized insurer. 

‘‘(f) BIENNIAL RENEWAL.—Membership in the Association shall be 

renewed on a biennial basis. 

‘‘(g) CONTINUING EDUCATION.— 

‘‘(1) IN GENERAL.—The Association shall establish, as a condition of membership, continuing education requirements 

which shall be comparable to the continuing education requirements under the licensing laws of a majority of the States. 

‘‘(2) STATE CONTINUING EDUCATION REQUIREMENTS.—A member may not be required to satisfy continuing education requirements imposed under the laws, regulations, provisions, or 

actions of any State other than the home State of the member. 

‘‘(3) RECIPROCITY.—The Association shall not require a member to satisfy continuing education requirements that are 

equivalent to any continuing education requirements of the 

home State of the member that have been satisfied by the 

member during the applicable licensing period. 

‘‘(4) LIMITATION ON THE ASSOCIATION.—The Association shall 

not directly or indirectly offer any continuing education courses 

for insurance producers. 

‘‘(h) PROBATION, SUSPENSION AND REVOCATION.— 

‘‘(1) DISCIPLINARY ACTION.—The Association may place an insurance producer that is a member of the Association on probation or suspend or revoke the membership of the insurance 

producer in the Association, or assess monetary fines or penalties, as the Association determines to be appropriate, if— 

‘‘(A) the insurance producer fails to meet the applicable 

membership criteria or other standards established by the 

Association; 

‘‘(B) the insurance producer has been subject to disciplinary action pursuant to a final adjudicatory proceeding 

under the jurisdiction of a State insurance regulator; 

‘‘(C) an insurance license held by the insurance producer 

has been suspended or revoked by a State insurance regulator; or 


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‘‘(D) the insurance producer has been convicted of a 

crime that would have resulted in the denial of membership pursuant to subsection (a)(4)(L)(i) at the time of application, and the Association has received a copy of the final 

disposition from a court of competent jurisdiction. 

‘‘(2) VIOLATIONS OF ASSOCIATION STANDARDS.—The Association shall have the power to investigate alleged violations of 

Association standards. 

‘‘(3) REPORTING.—The Association shall immediately notify 

the States (including State insurance regulators) and the NAIC 

when the membership of an insurance producer has been 

placed on probation or has been suspended, revoked, or otherwise terminated, or when the Association has assessed monetary fines or penalties. 

‘‘(i) CONSUMER COMPLAINTS.— 

‘‘(1) IN GENERAL.—The Association shall— 

‘‘(A) refer any complaint against a member of the Association from a consumer relating to alleged misconduct or 

violations of State insurance laws to the State insurance 

regulator where the consumer resides and, when appropriate, to any additional State insurance regulator, as determined by standards adopted by the Association; and 

‘‘(B) make any related records and information available 

to each State insurance regulator to whom the complaint 

is forwarded. 

‘‘(2) TELEPHONE AND OTHER ACCESS.—The Association shall 

maintain a toll-free number for purposes of this subsection 

and, as practicable, other alternative means of communication 

with consumers, such as an Internet webpage. 

‘‘(3) FINAL DISPOSITION OF INVESTIGATION.—State insurance 

regulators shall provide the Association with information regarding the final disposition of a complaint referred pursuant 

to paragraph (1)(A), but nothing shall be construed to compel 

a State to release confidential investigation reports or other information protected by State law to the Association. 

‘‘(j) INFORMATION SHARING.—The Association may— 

‘‘(1) share documents, materials, or other information, including confidential and privileged documents, with a State, 

Federal, or international governmental entity or with the 

NAIC or other appropriate entity referred to paragraphs (3) 

and (4), provided that the recipient has the authority and 

agrees to maintain the confidentiality or privileged status of 

the document, material, or other information; 

‘‘(2) limit the sharing of information as required under this 

subtitle with the NAIC or any other non-governmental entity, 

in circumstances under which the Association determines that 

the sharing of such information is unnecessary to further the 

purposes of this subtitle; 

‘‘(3) establish a central clearinghouse, or utilize the NAIC or 

another appropriate entity, as determined by the Association, 

as a central clearinghouse, for use by the Association and the 

States (including State insurance regulators), through which 

members of the Association may disclose their intent to operate 

in 1 or more States and pay the licensing fees to the appropriate States; and 


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‘‘(4) establish a database, or utilize the NAIC or another appropriate entity, as determined by the Association, as a database, for use by the Association and the States (including State 

insurance regulators) for the collection of regulatory information concerning the activities of insurance producers. 

‘‘(k) EFFECTIVE DATE.—The provisions of this section shall take 

effect on the later of— 

‘‘(1) the expiration of the 2-year period beginning on the date 

of enactment of the National Association of Registered Agents 

and Brokers Reform Act of 2014; and 

‘‘(2) the date of incorporation of the Association. 

‘‘SEC. 324. BOARD OF DIRECTORS. 

‘‘(a) ESTABLISHMENT.—There is established a board of directors of 

the Association, which shall have authority to govern and supervise 

all activities of the Association. 

‘‘(b) POWERS.—The Board shall have such of the powers and authority of the Association as may be specified in the bylaws of the 

Association. 

‘‘(c) COMPOSITION.— ‘‘(1) IN GENERAL.—The Board shall consist of 13 members 

who shall be appointed by the President, by and with the advice and consent of the Senate, in accordance with the procedures established under Senate Resolution 116 of the 112th

Congress, of whom— 

‘‘(A) 8 shall be State insurance commissioners appointed 

in the manner provided in paragraph (2), 1 of whom shall 

be designated by the President to serve as the chairperson 

of the Board until the Board elects one such State insurance commissioner Board member to serve as the chairperson of the Board; 

‘‘(B) 3 shall have demonstrated expertise and experience 

with property and casualty insurance producer licensing; 

and 

‘‘(C) 2 shall have demonstrated expertise and experience 

with life or health insurance producer licensing. 

‘‘(2) STATE INSURANCE REGULATOR REPRESENTATIVES.— ‘‘(A) RECOMMENDATIONS.—Before making any appointments pursuant to paragraph (1)(A), the President shall 

request a list of recommended candidates from the States 

through the NAIC, which shall not be binding on the 

President. If the NAIC fails to submit a list of recommendations not later than 15 business days after the 

date of the request, the President may make the requisite 

appointments without considering the views of the NAIC. 

‘‘(B) POLITICAL AFFILIATION.—Not more than 4 Board 

members appointed under paragraph (1)(A) shall belong to 

the same political party. 

‘‘(C) FORMER STATE INSURANCE COMMISSIONERS.— 

‘‘(i) IN GENERAL.—If, after offering each currently 

serving State insurance commissioner an appointment 

to the Board, fewer than 8 State insurance commissioners have accepted appointment to the Board, the 

President may appoint the remaining State insurance 

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quired under subparagraph (B), from among individuals who are former State insurance commissioners. 

‘‘(ii) LIMITATION.—A former State insurance commissioner appointed as described in clause (i) may not be 

employed by or have any present direct or indirect financial interest in any insurer, insurance producer, or 

other entity in the insurance industry, other than direct or indirect ownership of, or beneficial interest in, 

an insurance policy or annuity contract written or sold 

by an insurer. 

‘‘(D) SERVICE THROUGH TERM.—If a Board member appointed under paragraph (1)(A) ceases to be a State insurance commissioner during the term of the Board member, 

the Board member shall cease to be a Board member. 

‘‘(3) PRIVATE SECTOR REPRESENTATIVES.—In making any appointment pursuant to subparagraph (B) or (C) of paragraph 

(1), the President may seek recommendations for candidates 

from groups representing the category of individuals described, 

which shall not be binding on the President. 

‘‘(4) STATE INSURANCE COMMISSIONER DEFINED.—For purposes of this subsection, the term ‘State insurance commissioner’ means a person who serves in the position in State government, or on the board, commission, or other body that is the 

primary insurance regulatory authority for the State. 

‘‘(d) TERMS.— ‘‘(1) IN GENERAL.—Except as provided under paragraph (2), 

the term of service for each Board member shall be 2 years. 

‘‘(2) EXCEPTIONS.— ‘‘(A) 1-YEAR TERMS.—The term of service shall be 1 year, 

as designated by the President at the time of the nomination of the subject Board members for— 

‘‘(i) 4 of the State insurance commissioner Board 

members initially appointed under paragraph (1)(A), of 

whom not more than 2 shall belong to the same political party; 

‘‘(ii) 1 of the Board members initially appointed 

under paragraph (1)(B); and 

‘‘(iii) 1 of the Board members initially appointed 

under paragraph (1)(C). 

‘‘(B) EXPIRATION OF TERM.—A Board member may continue to serve after the expiration of the term to which the 

Board member was appointed for the earlier of 2 years or 

until a successor is appointed. 

‘‘(C) MID-TERM APPOINTMENTS.—A Board member appointed to fill a vacancy occurring before the expiration of 

the term for which the predecessor of the Board member 

was appointed shall be appointed only for the remainder 

of that term. 

‘‘(3) SUCCESSIVE TERMS.—Board members may be reappointed to successive terms. 

‘‘(e) INITIAL APPOINTMENTS.—The appointment of initial Board 

members shall be made no later than 90 days after the date of enactment of the National Association of Registered Agents and Brokers Reform Act of 2014. 

‘‘(f) MEETINGS.— 


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‘‘(1) IN GENERAL.—The Board shall meet— 

‘‘(A) at the call of the chairperson; 

‘‘(B) as requested in writing to the chairperson by not 

fewer than 5 Board members; or 

‘‘(C) as otherwise provided by the bylaws of the Association. 

‘‘(2) QUORUM REQUIRED.—A majority of all Board members 

shall constitute a quorum. 

‘‘(3) VOTING.—Decisions of the Board shall require the approval of a majority of all Board members present at a meeting, a quorum being present. 

‘‘(4) INITIAL MEETING.—The Board shall hold its first meeting 

not later than 45 days after the date on which all initial Board 

members have been appointed. 

‘‘(g) RESTRICTION ON CONFIDENTIAL INFORMATION.—Board members appointed pursuant to subparagraphs (B) and (C) of subsection (c)(1) shall not have access to confidential information received by the Association in connection with complaints, investigations, or disciplinary proceedings involving insurance producers. 

‘‘(h) ETHICS AND CONFLICTS OF INTEREST.—The Board shall issue 

and enforce an ethical conduct code to address permissible and prohibited activities of Board members and Association officers, employees, agents, or consultants. The code shall, at a minimum, include provisions that prohibit any Board member or Association officer, employee, agent or consultant from— 

‘‘(1) engaging in unethical conduct in the course of performing Association duties; 

‘‘(2) participating in the making or influencing the making of 

any Association decision, the outcome of which the Board member, officer, employee, agent, or consultant knows or had reason to know would have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on the person or a member of the immediate family of 

the person; 

‘‘(3) accepting any gift from any person or entity other than 

the Association that is given because of the position held by 

the person in the Association; 

‘‘(4) making political contributions to any person or entity on 

behalf of the Association; and 

‘‘(5) lobbying or paying a person to lobby on behalf of the Association. 

‘‘(i) COMPENSATION.— 

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), no 

Board member may receive any compensation from the Association or any other person or entity on account of Board membership. 

‘‘(2) TRAVEL EXPENSES AND PER DIEM.—Board members may 

be reimbursed only by the Association for travel expenses, including per diem in lieu of subsistence, at rates consistent with 

rates authorized for employees of Federal agencies under subchapter I of chapter 57 of title 5, United States Code, while 

away from home or regular places of business in performance 

of services for the Association. 

‘‘SEC. 325. BYLAWS, STANDARDS, AND DISCIPLINARY ACTIONS. 

‘‘(a) ADOPTION AND AMENDMENT OF BYLAWS AND STANDARDS.— 


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‘‘(1) PROCEDURES.—The Association shall adopt procedures 

for the adoption of bylaws and standards that are similar to 

procedures under subchapter II of chapter 5 of title 5, United 

States Code (commonly known as the ‘Administrative Procedure Act’). 

‘‘(2) COPY REQUIRED TO BE FILED.—The Board shall submit to 

the President, through the Department of the Treasury, and 

the States (including State insurance regulators), and shall 

publish on the website of the Association, all proposed bylaws 

and standards of the Association, or any proposed amendment 

to the bylaws or standards of the Association, accompanied by 

a concise general statement of the basis and purpose of such 

proposal. 

‘‘(3) EFFECTIVE DATE.—Any proposed bylaw or standard of 

the Association, and any proposed amendment to the bylaws or 

standards of the Association, shall take effect, after notice 

under paragraph (2) and opportunity for public comment, on 

such date as the Association may designate, unless suspended 

under section 329(c). 

‘‘(4) RULE OF CONSTRUCTION.—Nothing in this section shall 

be construed to subject the Board or the Association to the requirements of subchapter II of chapter 5 of title 5, United 

States Code (commonly known as the ‘Administrative Procedure Act’). 

‘‘(b) DISCIPLINARY ACTION BY THE ASSOCIATION.— ‘‘(1) SPECIFICATION OF CHARGES.—In any proceeding to determine whether membership shall be denied, suspended, revoked, or not renewed, or to determine whether a member of 

the Association should be placed on probation (referred to in 

this section as a ‘disciplinary action’) or whether to assess fines 

or monetary penalties, the Association shall bring specific 

charges, notify the member of the charges, give the member an 

opportunity to defend against the charges, and keep a record. 

‘‘(2) SUPPORTING STATEMENT.—A determination to take disciplinary action shall be supported by a statement setting 

forth— 

‘‘(A) any act or practice in which the member has been 

found to have been engaged; 

‘‘(B) the specific provision of this subtitle or standard of 

the Association that any such act or practice is deemed to 

violate; and 

‘‘(C) the sanction imposed and the reason for the sanction. 

‘‘(3) INELIGIBILITY OF PRIVATE SECTOR REPRESENTATIVES.— 

Board members appointed pursuant to section 324(c)(3) may 

not— 

‘‘(A) participate in any disciplinary action or be counted 

toward establishing a quorum during a disciplinary action; 

and 

‘‘(B) have access to confidential information concerning 

any disciplinary action. 

‘‘SEC. 326. POWERS. 

‘‘In addition to all the powers conferred upon a nonprofit corporation by the District of Columbia Nonprofit Corporation Act, the Association shall have the power to— 


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‘‘(1) establish and collect such membership fees as the Association finds necessary to impose to cover the costs of its operations; 

‘‘(2) adopt, amend, and repeal bylaws, procedures, or standards governing the conduct of Association business and performance of its duties; 

‘‘(3) establish procedures for providing notice and opportunity 

for comment pursuant to section 325(a); 

‘‘(4) enter into and perform such agreements as necessary to 

carry out the duties of the Association; 

‘‘(5) hire employees, professionals, or specialists, and elect or 

appoint officers, and to fix their compensation, define their duties and give them appropriate authority to carry out the purposes of this subtitle, and determine their qualification; 

‘‘(6) establish personnel policies of the Association and programs relating to, among other things, conflicts of interest, 

rates of compensation, where applicable, and qualifications of 

personnel; 

‘‘(7) borrow money; and 

‘‘(8) secure funding for such amounts as the Association determines to be necessary and appropriate to organize and begin 

operations of the Association, which shall be treated as loans 

to be repaid by the Association with interest at market rate. 

‘‘SEC. 327. REPORT BY THE ASSOCIATION. 

‘‘(a) IN GENERAL.—As soon as practicable after the close of each 

fiscal year, the Association shall submit to the President, through 

the Department of the Treasury, and the States (including State 

insurance regulators), and shall publish on the website of the Association, a written report regarding the conduct of its business, and 

the exercise of the other rights and powers granted by this subtitle, 

during such fiscal year. 

‘‘(b) FINANCIAL STATEMENTS.—Each report submitted under subsection (a) with respect to any fiscal year shall include audited financial statements setting forth the financial position of the Association at the end of such fiscal year and the results of its operations (including the source and application of its funds) for such 

fiscal year. 

‘‘SEC. 328. LIABILITY OF THE ASSOCIATION AND THE BOARD MEMBERS, OFFICERS, AND EMPLOYEES OF THE ASSOCIATION. 

‘‘(a) IN GENERAL.—The Association shall not be deemed to be an 

insurer or insurance producer within the meaning of any State law, 

rule, regulation, or order regulating or taxing insurers, insurance 

producers, or other entities engaged in the business of insurance, 

including provisions imposing premium taxes, regulating insurer 

solvency or financial condition, establishing guaranty funds and 

levying assessments, or requiring claims settlement practices. 

‘‘(b) LIABILITY OF BOARD MEMBERS, OFFICERS, AND EMPLOYEES.— No Board member, officer, or employee of the Association shall be 

personally liable to any person for any action taken or omitted in 

good faith in any matter within the scope of their responsibilities 

in connection with the Association. 

‘‘SEC. 329. PRESIDENTIAL OVERSIGHT. 

‘‘(a) REMOVAL OF BOARD.—If the President determines that the 

Association is acting in a manner contrary to the interests of the 


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25 

public or the purposes of this subtitle or has failed to perform its 

duties under this subtitle, the President may remove the entire existing Board for the remainder of the term to which the Board 

members were appointed and appoint, in accordance with section 

324 and with the advice and consent of the Senate, in accordance 

with the procedures established under Senate Resolution 116 of the 

112th Congress, new Board members to fill the vacancies on the 

Board for the remainder of the terms. 

‘‘(b) REMOVAL OF BOARD MEMBER.—The President may remove a 

Board member only for neglect of duty or malfeasance in office. 

‘‘(c) SUSPENSION OF BYLAWS AND STANDARDS AND PROHIBITION OF

ACTIONS.—Following notice to the Board, the President, or a person 

designated by the President for such purpose, may suspend the effectiveness of any bylaw or standard, or prohibit any action, of the 

Association that the President or the designee determines is contrary to the purposes of this subtitle. 

‘‘SEC. 330. RELATIONSHIP TO STATE LAW. 

‘‘(a) PREEMPTION OF STATE LAWS.—State laws, regulations, provisions, or other actions purporting to regulate insurance producers 

shall be preempted to the extent provided in subsection (b). 

‘‘(b) PROHIBITED ACTIONS.— ‘‘(1) IN GENERAL.—No State shall— 

‘‘(A) impede the activities of, take any action against, or 

apply any provision of law or regulation arbitrarily or 

discriminatorily to, any insurance producer because that 

insurance producer or any affiliate plans to become, has 

applied to become, or is a member of the Association; 

‘‘(B) impose any requirement upon a member of the Association that it pay fees different from those required to 

be paid to that State were it not a member of the Association; or 

‘‘(C) impose any continuing education requirements on 

any nonresident insurance producer that is a member of 

the Association. 

‘‘(2) STATES OTHER THAN A HOME STATE.—No State, other 

than the home State of a member of the Association, shall— 

‘‘(A) impose any licensing, personal or corporate qualifications, education, training, experience, residency, continuing education, or bonding requirement upon a member 

of the Association that is different from the criteria for 

membership in the Association or renewal of such membership; 

‘‘(B) impose any requirement upon a member of the Association that it be licensed, registered, or otherwise qualified to do business or remain in good standing in the 

State, including any requirement that the insurance producer register as a foreign company with the secretary of 

state or equivalent State official; 

‘‘(C) require that a member of the Association submit to 

a criminal history record check as a condition of doing 

business in the State; or 

‘‘(D) impose any licensing, registration, or appointment 

requirements upon a member of the Association, or require 

a member of the Association to be authorized to operate as 

an insurance producer, in order to sell, solicit, or negotiate 


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26 

insurance for commercial property and casualty risks to an 

insured with risks located in more than one State, if the 

member is licensed or otherwise authorized to operate in 

the State where the insured maintains its principal place 

of business and the contract of insurance insures risks located in that State. 

‘‘(3) PRESERVATION OF STATE DISCIPLINARY AUTHORITY.— Nothing in this section may be construed to prohibit a State 

from investigating and taking appropriate disciplinary action, 

including suspension or revocation of authority of an insurance 

producer to do business in a State, in accordance with State 

law and that is not inconsistent with the provisions of this section, against a member of the Association as a result of a complaint or for any alleged activity, regardless of whether the activity occurred before or after the insurance producer commenced doing business in the State pursuant to Association 

membership. 

‘‘SEC. 331. COORDINATION WITH FINANCIAL INDUSTRY REGULATORY 

AUTHORITY. 

‘‘The Association shall coordinate with the Financial Industry 

Regulatory Authority in order to ease any administrative burdens 

that fall on members of the Association that are subject to regulation by the Financial Industry Regulatory Authority, consistent 

with the requirements of this subtitle and the Federal securities 

laws. 

‘‘SEC. 332. RIGHT OF ACTION. 

‘‘(a) RIGHT OF ACTION.—Any person aggrieved by a decision or action of the Association may, after reasonably exhausting available 

avenues for resolution within the Association, commence a civil action in an appropriate United States district court, and obtain all 

appropriate relief. 

‘‘(b) ASSOCIATION INTERPRETATIONS.—In any action under subsection (a), the court shall give appropriate weight to the interpretation of the Association of its bylaws and standards and this subtitle. 

‘‘SEC. 333. FEDERAL FUNDING PROHIBITED. 

‘‘The Association may not receive, accept, or borrow any amounts 

from the Federal Government to pay for, or reimburse, the Association for, the costs of establishing or operating the Association. 

‘‘SEC. 334. DEFINITIONS. 

‘‘For purposes of this subtitle, the following definitions shall 

apply: 

‘‘(1) BUSINESS ENTITY.—The term ‘business entity’ means a 

corporation, association, partnership, limited liability company, 

limited liability partnership, or other legal entity. 

‘‘(2) DEPOSITORY INSTITUTION.—The term ‘depository institution’ has the meaning as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813). 

‘‘(3) HOME STATE.—The term ‘home State’ means the State in 

which the insurance producer maintains its principal place of 

residence or business and is licensed to act as an insurance 

producer. 

‘‘(4) INSURANCE.—The term ‘insurance’ means any product, 

other than title insurance or bail bonds, defined or regulated 


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27 

as insurance by the appropriate State insurance regulatory authority. 

‘‘(5) INSURANCE PRODUCER.—The term ‘insurance producer’ 

means any insurance agent or broker, excess or surplus lines 

broker or agent, insurance consultant, limited insurance representative, and any other individual or entity that sells, solicits, or negotiates policies of insurance or offers advice, counsel, 

opinions or services related to insurance. 

‘‘(6) INSURER.—The term ‘insurer’ has the meaning as in section 313(e)(2)(B) of title 31, United States Code. 

‘‘(7) PRINCIPAL PLACE OF BUSINESS.—The term ‘principal 

place of business’ means the State in which an insurance producer maintains the headquarters of the insurance producer 

and, in the case of a business entity, where high-level officers 

of the entity direct, control, and coordinate the business activities of the business entity. 

‘‘(8) PRINCIPAL PLACE OF RESIDENCE.—The term ‘principal 

place of residence’ means the State in which an insurance producer resides for the greatest number of days during a calendar year. 

‘‘(9) STATE.—The term ‘State’ includes any State, the District 

of Columbia, any territory of the United States, and Puerto 

Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands. 

‘‘(10) STATE LAW.— 

‘‘(A) IN GENERAL.—The term ‘State law’ includes all 

laws, decisions, rules, regulations, or other State action 

having the effect of law, of any State. 

‘‘(B) LAWS APPLICABLE IN THE DISTRICT OF COLUMBIA.— 

A law of the United States applicable only to or within the 

District of Columbia shall be treated as a State law rather 

than a law of the United States.’’. 

(b) TECHNICAL AMENDMENT.—The table of contents for the 

Gramm-Leach-Bliley Act is amended by striking the items relating 

to subtitle C of title III and inserting the following new items: 

‘‘Subtitle C—National Association of Registered Agents and Brokers 

‘‘Sec. 321. National Association of Registered Agents and Brokers. 

‘‘Sec. 322. Purpose. 

‘‘Sec. 323. Membership. 

‘‘Sec. 324. Board of directors. 

‘‘Sec. 325. Bylaws, standards, and disciplinary actions. 

‘‘Sec. 326. Powers. 

‘‘Sec. 327. Report by the Association. 

‘‘Sec. 328. Liability of the Association and the Board members, officers, and employees of the Association. 

‘‘Sec. 329. Presidential oversight. 

‘‘Sec. 330. Relationship to State law. 

‘‘Sec. 331. Coordination with financial industry regulatory authority. 

‘‘Sec. 332. Right of action. 

‘‘Sec. 333. Federal funding prohibited. 

‘‘Sec. 334. Definitions.’’. 


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TITLE III—BUSINESS RISK MITIGATION 

AND PRICE STABILIZATION 

SEC. 301. SHORT TITLE. 

This title may be cited as the ‘‘Business Risk Mitigation and 

Price Stabilization Act of 2014’’. 

SEC. 302. MARGIN REQUIREMENTS. 

(a) COMMODITY EXCHANGE ACT AMENDMENT.—Section 4s(e) of 

the Commodity Exchange Act (7 U.S.C. 6s(e)), as added by section 

731 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is amended by adding at the end the following new paragraph: 

‘‘(4) APPLICABILITY WITH RESPECT TO COUNTERPARTIES.—The 

requirements of paragraphs (2)(A)(ii) and (2)(B)(ii), including 

the initial and variation margin requirements imposed by rules 

adopted pursuant to paragraphs (2)(A)(ii) and (2)(B)(ii), shall 

not apply to a swap in which a counterparty qualifies for an 

exception under section 2(h)(7)(A), or an exemption issued 

under section 4(c)(1) from the requirements of section 

2(h)(1)(A) for cooperative entities as defined in such exemption, 

or satisfies the criteria in section 2(h)(7)(D).’’. 

(b) SECURITIES EXCHANGE ACT AMENDMENT.—Section 15F(e) of 

the Securities Exchange Act of 1934 (15 U.S.C. 78o–10(e)), as 

added by section 764(a) of the Dodd-Frank Wall Street Reform and 

Consumer Protection Act, is amended by adding at the end the following new paragraph: 

‘‘(4) APPLICABILITY WITH RESPECT TO COUNTERPARTIES.—The 

requirements of paragraphs (2)(A)(ii) and (2)(B)(ii) shall not 

apply to a security-based swap in which a counterparty qualifies for an exception under section 3C(g)(1) or satisfies the criteria in section 3C(g)(4).’’. 

SEC. 303. IMPLEMENTATION. 

The amendments made by this title to the Commodity Exchange 

Act shall be implemented— 

(1) without regard to— 

(A) chapter 35 of title 44, United States Code; and 

(B) the notice and comment provisions of section 553 of 

title 5, United States Code; 

(2) through the promulgation of an interim final rule, pursuant to which public comment will be sought before a final rule 

is issued; and 

(3) such that paragraph (1) shall apply solely to changes to 

rules and regulations, or proposed rules and regulations, that 

are limited to and directly a consequence of such amendments. 

Æ 


SSpencer on DSK4SPTVN1PROD with REPORTS