I

104TH CONGRESS

1ST SESSION H. R. 176

To provide for disclosures for insurance in interstate commerce.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mr. COLLINS of Illinois introduced the following bill; which was referred to

the Committee on Commerce

A BILL

To provide for disclosures for insurance in interstate

commerce.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Anti Redlining in In5 surance Disclosure Act’’.

6 SEC. 2. FINDINGS AND CONSTRUCTION.

7 (a) FINDINGS.—The Congress finds that—

8 (1) disparities in property and casualty insur9 ance coverage provided by insurers engaged in inter10 state commerce between areas of different incomes

11 and racial composition could adversely affect inter-
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1 state commerce and the cost and availability of in2 surance for consumers, and

3 (2) appropriate disclosures of information by in4 surers would benefit consumers and insurance regu5 lators.

6 (b) CONSTRUCTION.—Nothing in this Act is intended

7 to, nor shall it be construed to, encourage unsound under8 writing practices.

9 SEC. 3. MAINTENANCE OF INFORMATION AND PUBLIC DIS10 CLOSURE.

11 (a) GENERAL RULE.—

12 (1) DESIGNATED INSURERS.—

13 (A) IN GENERAL.—Except as provided by

14 subsection (b)(7), each designated insurer shall,

15 in accordance with subsection (b), annually

16 compile, submit to the Secretary, and make

17 available to the public for each calendar year

18 and for designated lines of insurance in a des19 ignated MSA—

20 (i) the total number of policies, total

21 exposure units (in car years and house

22 years), and total earned premium of insur23 ance policies by designated line which were

24 issued by such insurer and the new written

25 exposure units, exposure units canceled,
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1 and the exposure units not renewed by

2 such insurer, and

3 (ii) the number of licensed agents of

4 such insurer whose principal place of busi5 ness is located in such designated MSA

6 and the number within each 5-digit zip

7 code in such designated MSA and with re8 spect to each such agent, whether such

9 agent is an employee, independent contrac10 tor working exclusively for such insurer, or

11 an independent contractor appointed to

12 represent such insurer on a non-exclusive

13 basis.

14 (B) SUBMISSIONS AND AVAILABILITY.—

15 The information described in subparagraph (A)

16 shall be—

17 (i) submitted to the Secretary in ac18 cordance with subsection (d), and

19 (ii) made available to the public, in

20 accordance with subsection (b)(2), for in21 spection and copying, at cost, at the home

22 office of the insurer and at a central de23 pository, established under subsection (c),

24 by the Secretary.
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1 (2) NON-DESIGNATED INSURERS.—Except as

2 provided in subsection (b)(7), every insurer which

3 sells an insurance policy in a designated line of in4 surance in a designated MSA and which is not a

5 designated insurer in such MSA shall submit to the

6 Secretary for each calendar year in accordance with

7 subsection (d) and regulations of the Secretary the

8 total exposure units (in car years and house years)

9 of insurance policies in a designated line sold in such

10 MSA. With respect to such policies, the insurer shall

11 report the designated MSA where the insured risks

12 are located for which such insurance is issued and

13 within such MSA report the 5-digit zip code where

14 the risk is located.

15 (b) REQUIREMENTS.—

16 (1) CONTENT.—The information required to be

17 maintained and made available under subsection

18 (a)(1) shall be itemized in order to clearly and con19 spicuously disclose the policies, the exposure units,

20 and the premium amount for each line of insurance

21 for which information is required and be itemized by

22 the 5-digit zip code where the risks are located.

23 (2) AVAILABILITY TO THE PUBLIC.—The infor24 mation required to be maintained and made avail25 able under subsection (a) shall be made available to
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1 the public on a timetable determined by the Sec2 retary but not later than October 1 of the calendar

3 year following the calendar year for which the infor4 mation is required to be made available, except that

5 such information shall not be made available to the

6 public until it is available in its entirety but it shall

7 be made available if not all the information required

8 to be reported is available on such October 1 or on

9 the date determined by the Secretary.

10 (3) SPECIFICATION OF DATA.—

11 (A) IN GENERAL.—With respect to infor12 mation which is required to be maintained and

13 made available under subsection (a)(1), the Sec14 retary shall by regulation establish specifica15 tions for the collection and public reporting of

16 such information with respect to the following

17 lines of insurance: private passenger auto18 mobile, homeowners, and dwelling fire and al19 lied lines. The specifications shall—

20 (i) provide that information be aggre21 gated among similar policyholders and re22 ported on that basis,

23 (ii) be designed to collect information

24 with respect to the availability, cost, and
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1 type of insurance coverage between and

2 among various geographic areas,

3 (iii) detail what data elements should

4 be collected,

5 (iv) provide for the collection of infor6 mation on an individual insurer basis,

7 (v) minimize burdens on insurance

8 agents, including independent insurance

9 agents,

10 (vi) provide the data required by

11 clause (ii) with the least burden on insur12 ers, particularly small insurers,

13 (vii) take into account the types of

14 data collected under the Home Mortgage

15 Disclosure Act of 1975,

16 (viii) take into account existing statis17 tical reporting systems in the insurance in18 dustry,

19 (ix) require itemization by 5-digit zip

20 code, and

21 (x) include information on policies

22 written in a residual market.

23 (B) CONSULTATIONS.—In developing the

24 specifications in subparagraph (A), the Sec25 retary shall consult with—
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1 (i) other Federal agencies with appro2 priate expertise,

3 (ii) State insurance regulators,

4 (iii) representatives of the insurance

5 industry, including statistical agents,

6 (iv) representatives of insurance pro7 ducers, including minority insurance pro8 ducers, and

9 (v) consumer, community, and civil

10 rights groups who are representative of a

11 diversity of geographic locations.

12 (C) EFFECTIVE DATE.—The regulation

13 under subparagraph (A) shall be issued no later

14 than 270 days after the date of the enactment

15 of this Act.

16 (4) COMMERCIAL INSURANCE STUDY AND PILOT

17 PROJECT.—

18 (A) STUDY.—The Secretary shall conduct

19 a study regarding the availability of commercial

20 insurance (other than professional liability in21 surance, workers compensation insurance, and

22 title insurance) with special emphasis on the

23 availability of commercial insurance for small

24 business. The study shall focus on—
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1 (i) an appropriate definition for small

2 business; and

3 (ii) preliminary views regarding the

4 availability, cost, and type of insurance

5 coverage for small business, which may be

6 based on surveys of members of the small

7 business community.

8 In conducting the study, the Secretary shall

9 consult with interested parties from a diversity

10 of locations, including State insurance regu11 lators, consumer, community, and civil rights

12 groups, representatives of small business, rep13 resentatives of the insurance industry, including

14 statistical agents, and representatives of insur15 ance producers, including minority insurance

16 producers. The Secretary shall submit a report

17 detailing the findings of the study to the Com18 mittee on Energy and Commerce of the House

19 of Representatives and the appropriate commit20 tee of the Senate no later than 18 months fol21 lowing the date of enactment of this Act.

22 (B) PROPOSAL OF PILOT PROJECT.—Con23 current with the conduct of the study under

24 subparagraph (A), the Secretary shall develop a

25 proposed data collection pilot project in the 5
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1 largest MSA’s to help determine the need for

2 any further data collection requirements to

3 evaluate the availability, cost, and type of insur4 ance coverage for small business. In developing

5 the proposed pilot project, the Secretary shall

6 consult with interested parties from a diversity

7 of locations, including State insurance regu8 lators, consumer, community, and civil rights

9 groups, representatives of small business, rep10 resentatives of the insurance industry, including

11 statistical agents, and representatives of insur12 ance producers, including minority insurance

13 producers. The Secretary shall submit a specific

14 proposal for a pilot project to the Committee on

15 Energy and Commerce of the House of Rep16 resentatives and the appropriate committee of

17 the Senate no later than 18 months following

18 the date of enactment of this Act.

19 (C) SPECIFICATIONS FOR PILOT

20 PROJECT.—Immediately following the submis21 sion of the proposal for a pilot project, the Sec22 retary shall, by regulation, establish specifica23 tions for the collection and public reporting of

24 information with respect to commercial insur25 ance for the proposed pilot project. As part of
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1 the specifications, the Secretary shall designate

2 the 5 largest MSA’s for purposes of the pilot

3 project. The specifications shall—

4 (i) provide that information be aggre5 gated among similar policyholders and re6 ported on that basis,

7 (ii) be designed to collect information

8 with respect to the availability, cost, and

9 type of insurance coverage between and

10 among various geographic areas,

11 (iii) provide for the collection of infor12 mation on an individual insurer basis,

13 (iv) provide the data required by

14 clause (ii) with the least burden on insur15 ers, particularly small insurers, and insur16 ance agents, including independent insur17 ance agents,

18 (v) take into account existing statis19 tical reporting systems in the insurance in20 dustry and use existing data sources to the

21 maximum practical extent,

22 (vi) include information on policies

23 written in a residual market,

24 (vii) detail what data elements should

25 be collected,
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1 (viii) detail what insurers should be

2 designated insurers for purposes of the

3 pilot project,

4 (ix) detail what lines of commercial

5 insurance should be designated for pur6 poses of the pilot project, with particular

7 consideration given to commercial fire and

8 business owners lines,

9 (x) include an appropriate definition

10 of small business, if necessary,

11 (xi) provide data representative of at

12 least 2 years of experience and provide

13 that the pilot project will terminate no

14 later than 2 years after its inception, and

15 (xii) provide adequate lead time to in16 surers designated under clause (viii) for

17 the reporting to begin.

18 The regulation shall be issued within 2 years of

19 the date of enactment of this Act.

20 (D) REPORTING UNDER PILOT PROJECT.—

21 Insurers designated under subparagraph

22 (C)(viii) shall report to the Secretary with re23 spect to lines of insurance designated under

24 subparagraph (C)(ix) in the 5 largest MSA’s,
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1 pursuant to the regulation issued by the Sec2 retary in subparagraph (C).

3 (E) ANALYSIS OF DATA UNDER PILOT

4 PROJECT.—At the conclusion of the pilot

5 project, the Secretary shall analyze the data

6 collected. Within 1 year of the conclusion of the

7 pilot project, the Secretary shall report to the

8 Committee on Energy and Commerce of the

9 House of Representatives and the appropriate

10 committee of the Senate on—

11 (i) any conclusions of the Secretary

12 regarding the data collected under the pilot

13 project, particularly regarding the avail14 ability, cost, and type of commercial insur15 ance for small business, and

16 (ii) the need for further data collec17 tion requirements to evaluate the availabil18 ity, cost, and type of such coverage or to

19 help ensure the availability of such cov20 erage.

21 (5) PERIOD OF MAINTENANCE.—Any informa22 tion required to be compiled and made available

23 under subsection (a) shall be maintained and made

24 available for a period of 3 years after the close of
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1 the first year during which such information is re2 quired to be maintained and made available.

3 (6) FORMAT FOR DISCLOSURES.—Subject to

4 subsection (c), the Secretary shall prescribe a stand5 ard format for making information available as re6 quired by subsection (a). Such format shall encour7 age the submission of information in a form read8 able by a computer.

9 (7) EXEMPTION.—

10 (A) SECRETARIAL ACTION.—If the Sec11 retary determines that a State has enacted a

12 law, or otherwise implemented a requirement

13 under which—

14 (i) insurers operating in that State

15 are subject to disclosure requirements on a

16 5-digit zip code basis substantially similar

17 to those of subsection (a),

18 (ii) there are adequate provisions for

19 enforcement, and

20 (iii) the information disclosed under

21 the State law or requirement is made avail22 able to the Secretary and the public in a

23 manner similar to other information dis24 closed under subsection (a),
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1 then the Secretary shall by regulation exempt

2 insurers operating in that State from complying

3 with the requirements of subsection (a) with re4 spect to that State’s portions of the designated

5 MSA’s. If the Secretary determines that the

6 State law or requirement no longer meets the

7 criteria of clauses (i) through (iii) or is no

8 longer in effect, the Secretary shall by regula9 tion revoke the exemption.

10 (B) UNITED STATES PROGRAM.—Report11 ing shall not be required under subsection (a)

12 with respect to insurance provided by a pro13 gram underwritten or administered by the Unit14 ed States.

15 (c) PUBLIC ACCESS SYSTEM.—The Secretary shall

16 implement a system to facilitate public access to informa17 tion required to be made available to the public under sub18 section (a). Such system shall include arrangements for

19 a central depository of information in each designated

20 MSA and for a telephone number which can be used by

21 the public, at cost, to request such information. State22 ments shall be made available to the public for inspection

23 and copying at such central depository of information for

24 all designated insurers within such MSA. The Secretary

25 shall also make copies of such statements available in
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1 forms readable by widely used personal computers, such

2 as in disc format. The Secretary may charge a fee for such

3 information, which may not exceed the amount, deter4 mined by the Secretary, that is equal to the cost of repro5 ducing the information.

6 (d) SUBMISSION TO SECRETARY.—With respect to

7 the information required to be submitted under subsection

8 (a) to the Secretary, the Secretary shall develop regula9 tions prescribing the format and method for submitting

10 such information. Such regulations shall ensure uniform11 ity among insurers, to the extent practicable, in the format

12 used for reporting, including the definitions of data ele13 ments. Any reporting insurer may submit in writing to

14 the Secretary such additional data or explanations as it

15 deems relevant to the decision by such insurer to sell in16 surance.

17 SEC. 4. DESIGNATIONS.

18 (a) DESIGNATIONS BY THE SECRETARY.—

19 (1) DESIGNATIONS OF MSA’S.—The Secretary

20 shall designate the MSA’s for which reporting is re21 quired under section 3(a). The Secretary shall des22 ignate the 25 MSA’s having the largest population.

23 (2) DESIGNATION OF INSURERS.—For each

24 MSA designated under paragraph (1), the Secretary

25 shall take the following actions:
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1 (A) The Secretary shall designate the in2 surers transacting insurance business in such

3 MSA for which reporting is required under sec4 tion 3(a). At a minimum, the Secretary shall

5 designate the 25 insurers in such MSA having

6 the largest premium volume in the designated

7 lines of insurance in each State in which such

8 MSA is located.

9 (B) In addition to the insurers designated

10 under subparagraph (A), the Secretary shall

11 also designate any entity primarily providing in12 surance in a designated line of insurance as

13 part of a residual market established by State

14 law.

15 (C) The Secretary shall also designate, in

16 addition to the insurers designated under sub17 paragraphs (A) and (B), insurers who specialize

18 in selling insurance in urban areas, including

19 surplus lines insurers.

20 (D) The Secretary shall also designate, in

21 addition to the insurers designated under sub22 paragraph (A), (B), and (C) insurers such that

23 insurers representing at least 80 percent of the

24 premium volume in each State in which such

25 MSA is located in the designated line of insur-
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1 ance are designated in such MSA. The Sec2 retary may not designate additional insurers

3 under this subparagraph if their market share

4 in the designated line of insurance in the appli5 cable States, as measured by premium volume

6 in each State in which such MSA is located, is

7 under 1 percent.

8 (E) In addition to the insurers designated

9 under subparagraph (A), (B), (C), and (D) the

10 Secretary may by regulation designate addi11 tional insurers in a MSA if the designation of

12 additional insurers is necessary to provide valid

13 data with respect to the availability, cost, and

14 type of insurance in the MSA.

15 (F) The Secretary shall revoke the des16 ignation of an insurer designated under sub17 paragraph (A) as follows: If such designated in18 surer has a market share in a designated line

19 of insurance in a MSA, as measured by pre20 mium volume in each State in which such MSA

21 is located, of under 1 percent, the Secretary

22 shall revoke the designation of such insurer be23 ginning with the insurer with the smallest mar24 ket share of such insurance if the remainder of

25 the designated insurers have a market share of
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1 at least 75 percent of such insurance as meas2 ured by premium volume in each State in which

3 such MSA is located. In addition, the Secretary

4 may revoke the designation of any insurer des5 ignated under subparagraph (A) with a market

6 share in a designated line of insurance in a

7 MSA, as measured by premium volume in each

8 State in which such MSA is located, of under

9 1 percent if such designation has not been re10 voked under this subparagraph and if such in11 surer primarily sells insurance in rural areas of

12 such MSA.

13 (G) For purposes of this paragraph, insur14 ers which are affiliated or are members of the

15 same group shall be considered together as one

16 insurer.

17 (3) DESIGNATION OF LINES OF INSURANCE.—

18 For each MSA designated under paragraph (1) the

19 following are the designated lines of property and

20 casualty insurance for which reporting is required

21 under section 3:

22 (A) Private passenger automobile insur23 ance.

24 (B) Homeowners insurance.
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1 (C) Dwelling fire and allied lines of insur2 ance.

3 (4) TIMING OF DESIGNATIONS.—

4 (A) INITIAL DESIGNATIONS.—The Sec5 retary shall make initial designations required

6 by paragraphs (1), (2), and (3) no later than

7 July 1 of the year preceding the first year for

8 which reporting is required under section 3.

9 Such initial designations shall be effective for 5

10 calendar years from the date of designation.

11 (B) SUBSEQUENT DESIGNATIONS.—Not

12 later than July 1 of the year preceding the fifth

13 year after a designation under subparagraph

14 (A) or this subparagraph, the Secretary shall

15 make another designation to be effective upon

16 the expiration of such 5 years and such des17 ignation shall be effective for 5 calendar years

18 from the date of designation.

19 (C) NOTICE.—The Secretary shall notify

20 persons involved in the designations no later

21 than the July 15 which follows the designation.

22 (b) OBTAINING INFORMATION.—The Secretary may

23 obtain from insurers such information as the Secretary

24 may require to make designations under subsection (a).
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1 SEC. 5. TASK FORCE ON AGENCY APPOINTMENTS.

2 (a) ESTABLISHMENT.—Within 90 days of the date of

3 the enactment of this Act, the Secretary shall establish

4 a task force on insurance agency appointments. The task

5 force shall—

6 (1) consist of representatives of appropriate

7 Federal agencies, property and casualty insurance

8 agents, including specifically minority insurance

9 agents, property and casualty insurance companies,

10 State insurance regulators, and public interest

11 groups,

12 (2) have a significant representation from mi13 nority insurance agents, and

14 (3) be chaired by the Secretary or the Sec15 retary’s designee.

16 (b) FUNCTION.— The task force shall—

17 (1) review the problems inner city and minority

18 agents may have in receiving appointments to rep19 resent property and casualty insurance companies,

20 (2) review the practices of insurers in terminat21 ing agents and consider the effect such practices

22 have on the availability or cost of insurance, espe23 cially in underserved areas, and

24 (3) recommend solutions to improve the ability

25 of inner city and minority insurance agents to mar26 ket property and casualty insurance products, in-
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1 cluding steps property and casualty insurance com2 panies should take to increase their appointments of

3 such agents.

4 (c) REPORT AND TERMINATION.—The task force

5 shall report to the Committee on Energy and Commerce

6 of the House of Representatives and the appropriate Com7 mittee of the Senate its findings under paragraphs (1) and

8 (2) of subsection (b) and its recommendations under para9 graph (3) of subsection (b) within 2 years after the date

10 of the enactment of this Act. The task force shall termi11 nate when the report is submitted to the Committees.

12 SEC. 6. IMPLEMENTATION OF SECTION 3.

13 (a) REGULATIONS.—The Secretary shall promulgate

14 such regulations as may be necessary to carry out section

15 3. Such regulations may—

16 (1) contain such classifications, differentiations,

17 or other provisions, and

18 (2) may provide for such adjustments and ex19 ceptions for any class of transactions,

20 as in the judgment of the Secretary are necessary and

21 proper to effectuate the purposes of such section and to

22 prevent circumvention or evasion thereof or to facilitate

23 compliance therewith.

24 (b) DATA COLLECTION CONTRACTOR.—The Sec25 retary may contract with a data collection contractor to
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1 carry out the Secretary’s responsibilities under section 3

2 if the contractor agrees to collect and make available the

3 data pursuant to the terms and conditions of such section.

4 A statistical agent may also be a data contractor.

5 (c) ROLE OF STATISTICAL AGENTS.—

6 (1) ACCEPTANCE OF DATA.—The Secretary

7 and, if applicable, the contractor under the sub8 section (b) contract may accept data reported under

9 section 3(a) by a statistical agent acting on behalf

10 of more than one insurer if—

11 (A) the statistical plan used by the statis12 tical agent for the reporting of data on insur13 ance provides for the reporting of data in a

14 manner compatible with section 3(a),

15 (B) the statistical agent reports such data

16 on an individual insurer basis, and, at the dis17 cretion of the Secretary, on an aggregate basis,

18 (C) the statistical agent provides adequate

19 procedures to protect the integrity of the data

20 reported,

21 (D) the statistical agent has procedures in

22 place which ensure that data reported under the

23 statistical plan in connection with reporting

24 under this Act and submitted to the Secretary

25 are not subject to adjustment by the statistical
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1 agent or an insurer for reasons other than tech2 nical accuracy and conformance to the statis3 tical plan,

4 (E) the statistical agent ensures that the

5 data of one insurer is not subject to review by

6 other insurers before public availability, and

7 (F) the statistical agent provides for the

8 reporting of data in a manner compatible with

9 the format prescribed by the Secretary under

10 section 3(d).

11 (2) DISCONTINUANCE OF DATA ACCEPTANCE.—

12 The Secretary may, after providing an opportunity

13 for a hearing, discontinue accepting data reported

14 under section 3(a) by a statistical agent acting on

15 behalf of more than one insurer if the Secretary de16 termines the requirements for acceptance of data in

17 paragraph (1) are no longer met.

18 (d) ROLE OF GAO.—The Comptroller General shall

19 have the authority to review and audit any data collection

20 and reporting performed under section 3, whether by the

21 Secretary, the contractor under the subsection (b) con22 tract, or a statistical agent, to ensure that the integrity

23 of the data collected and reported is protected.

24 (e) BURDENS ON INSURANCE AGENTS.—In prescrib25 ing regulations under this Act, the Secretary shall take
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1 into consideration the administrative, paperwork, and

2 other burdens on insurance agents, including independent

3 insurance agents, involved in complying with the require4 ments of this Act and shall minimize the burdens imposed

5 by such requirements with respect to such agents.

6 SEC. 7. RELATION TO STATE LAWS.

7 This Act does not annul, alter, or affect, or exempt

8 the obligation of any insurer subject to this Act to comply

9 with the laws of any State or subdivision thereof with re10 spect to public disclosure and recordkeeping.

11 SEC. 8. COMPILATION OF AGGREGATE DATA.

12 (a) SCOPE OF DATA AND TABLES.—The Secretary

13 shall compile each year, for each MSA, data aggregated

14 by 5-digit zip code for all insurers who are subject to sec15 tion 3 or who are exempt from section 3 under subsection

16 (b)(7)(A) of such section. The Secretary shall also produce

17 tables indicating, for each MSA, insurance policies aggre18 gated for various categories of 5-digit zip codes grouped

19 according to location, age of property, income level, and

20 racial characteristics of neighborhood.

21 (b) AGGREGATION OF INFORMATION.—Statistical

22 agents may aggregate the data of insurers that report to

23 them and may provide such information to the Secretary.

24 The Secretary may also provide the individual company
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1 data submitted by insurers to statistical agents for aggre2 gation.

3 (c) AVAILABILITY TO PUBLIC.—The data compiled

4 and the tables produced pursuant to subsection (a) shall

5 be made available to the public on a timetable determined

6 by the Secretary but not later than October 1 of the year

7 following the calendar year on which the data and tables

8 are based.

9 SEC. 9. ENFORCEMENT.

10 (a) CIVIL PENALTIES.—Any insurer who is deter11 mined by the Secretary, after providing opportunity for

12 a hearing on the record, to have violated the requirements

13 of section 3 shall be subject to a civil penalty of not to

14 exceed $5,000 for each day during which such violation

15 continues.

16 (b) INJUNCTION.—The Secretary may bring an ac17 tion in an appropriate United States district court for ap18 propriate declaratory and injunctive relief against any in19 surer who violates the requirements of section 3.

20 (c) INSURER LIABILITY.—An insurer shall be respon21 sible under subsections (a) and (b) for any violation of

22 a statistical agent acting on behalf of the insurer.

23 SEC. 10. SUNSET.

24 (a) EXPIRATION.—Except as provided in subsection

25 (b), this Act shall not be in effect after the expiration of
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1 5 years from its effective date. Prior to the expiration of

2 4 years from such date, the Secretary shall report to the

3 Commerce Committee of the House of Representatives

4 and the appropriate committee of the Senate—

5 (1) the quality of data received under section 3

6 and the effectiveness of the data requirement, in7 cluding the relation between the cost of such data

8 gathering and the benefits from having such data

9 available,

10 (2) the appropriateness of the geographic data

11 reporting units,

12 (3) the need for continued reporting by the des13 ignated insurers in urban areas,

14 (4) the efforts of insurers to meet the insurance

15 needs of minority and low-income neighborhoods,

16 and

17 (5) such other information as the Secretary de18 termines will assist in considering an extension of

19 this Act.

20 (b) EXTENSION.—Based on the Secretary’s report on

21 the need described in subsection (a)(3) and the informa22 tion described in subsection (a)(5), the Secretary may ex23 tend this Act for one period of 2 years.
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1 SEC. 11. STUDIES.

2 (a) STUDY OF INFORMATION ON INSURANCE APPLI3 CANTS.—

4 (1) IN GENERAL.—The Secretary shall conduct

5 a study to determine the feasibility and utility of the

6 collection of information with respect to the charac7 teristics of applicants for insurance and reasons for

8 rejection of applicants. The study shall examine the

9 extent to which—

10 (A) oral applications or representations are

11 used by insurers and agents in making deter12 minations regarding whether or not to insure a

13 prospective insured,

14 (B) written applications are used by insur15 ers and agents in making determinations re16 garding whether or not to insure a prospective

17 insured,

18 (C) written applications are submitted

19 after the insurer or agent has already made a

20 determination to provide insurance to a pro21 spective insured or has determined that the pro22 spective insured is eligible for insurance, and

23 (D) prospective insureds are discouraged

24 from submitting applications for insurance

25 based, in whole or in part, on—
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1 (i) the location of the risk to be in2 sured,

3 (ii) the race or ethnicity of the pro4 spective insured,

5 (iii) the racial or ethnic composition of

6 the neighborhood in which the risk to be

7 insured is located, and

8 (iv) in the case of residential property

9 insurance, the age and value of the risk to

10 be insured.

11 (2) REPORT.—The Secretary shall report the

12 results of the study under paragraph (1) to the

13 Committee on Energy and Commerce of the House

14 of Representatives and the appropriate Committee of

15 the Senate within 18 months of the date of the en16 actment of this Act.

17 (b) STUDY OF INSURER ACTIONS TO MEET INSUR18 ANCE NEEDS OF CERTAIN NEIGHBORHOODS.—The Sec19 retary shall conduct a study of various practices, actions,

20 programs, and methods undertaken by insurers to meet

21 the property and casualty insurance needs of residents of

22 low- and moderate-income neighborhoods, minority neigh23 borhoods, and small businesses located in such neighbor24 hoods. The Secretary may establish a task force of inter25 ested parties, including representatives of insurance com-
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1 panies, insurance agents, including minority agents, and

2 consumer representatives to discuss additional practices,

3 actions, programs, and methods to meet these needs. The

4 Secretary shall report the results of the study, including

5 any recommendations, to the Committee on Energy and

6 Commerce of the House of Representatives and the appro7 priate Committee of the Senate no later than 2 years after

8 the date of the enactment of this Act.

9 SEC. 12. DEFINITIONS.

10 For purposes of this Act:

11 (1) The term ‘‘commercial insurance’’ means

12 any line of property and casualty insurance, except

13 private passenger automobile and homeowner’s in14 surance.

15 (2) The term ‘‘designated insurer’’ means an

16 insurer designated by the Secretary pursuant to sec17 tion 4(a)(2).

18 (3) The term ‘‘designated line’’ means a line of

19 insurance specified in section 4(a)(3).

20 (4) The term ‘‘exposure units’’ means units in21 sured against risk of loss by an insurer and the term

22 ‘‘units’’ means an automobile or the number of units

23 in a building.

24 (5) The term ‘‘insurer’’ means any corporation,

25 association, society, order, firm, company, partner-
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1 ship, individual, or aggregation of individuals which

2 is subject to examination or supervision by any State

3 insurance regulator, or which is doing or represents

4 an insurance business. Such term does not include

5 an individual or entity which represents an insurer

6 as agent for the purpose of selling or which rep7 resents a consumer as a broker for the purpose of

8 buying insurance.

9 (6) The term ‘‘MSA’’ means a Metropolitan

10 Statistical Area or a Consolidated Metropolitan Sta11 tistical Area and the term ‘‘designated MSA’’ means

12 an MSA designated by the Secretary pursuant to

13 section 4(a)(1).

14 (7) The term ‘‘property and casualty insur15 ance’’ means insurance against loss of or damage to

16 property, insurance against loss of income or extra

17 expense incurred because of loss of, or damage to,

18 property, and insurance against third party liability

19 claims caused by negligence or imposed by statute or

20 contract.

21 (8) The term ‘‘residual market’’ means an as22 signed risk plan, joint underwriting association, or

23 any similar mechanism designed to make insurance

24 available to those unable to obtain it in the vol25 untary market.
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1 (9) The term ‘‘Secretary’’ means the Secretary

2 of Commerce.

3 (10) The term ‘‘State’’ means any State, the

4 District of Columbia, the Commonwealth of Puerto

5 Rico, the Northern Mariana Islands, the Virgin Is6 lands, American Samoa, and the Trust Territory of

7 the Pacific Islands.

8 SEC. 13. EFFECTIVE DATE.

9 The requirements of this Act shall take effect with

10 respect to information on insurance described in section

11 3 and developed in and after calendar year 1995.

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