II 

Calendar No. 294 

113TH CONGRESS 

2D SESSION S. 1926 

To delay the implementation of certain provisions of the Biggert-Waters 

Flood Insurance Reform Act of 2012 and to reform the National Association of Registered Agents and Brokers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 14, 2014 

Mr. MENENDEZ (for himself, Mr. ISAKSON, Mr. VITTER, and Ms. LANDRIEU) 

introduced the following bill; which was read the first time 

JANUARY 15, 2014 

Read the second time and placed on the calendar 

A BILL 

To delay the implementation of certain provisions of the 

Biggert-Waters Flood Insurance Reform Act of 2012 

and to reform the National Association of Registered 

Agents and Brokers, and for other purposes. 

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

3 SECTION 1. TABLE OF CONTENTS. 

4 The table of contents for this Act is as follows: 

Sec. 1. Table of contents. 

TITLE I—HOMEOWNER FLOOD INSURANCE AFFORDABILITY ACT 


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Sec. 101. Short title. 

Sec. 102. Definitions. 

Sec. 103. Delayed implementation of flood insurance rate increases; draft affordability framework. 

Sec. 104. Affordability study and report. 

Sec. 105. Affordability study funding. 

Sec. 106. Funds to reimburse homeowners for successful map appeals. 

Sec. 107. Flood protection systems. 

Sec. 108. Treatment of floodproofed residential basements. 

Sec. 109. Designation of flood insurance advocate. 

TITLE II—NATIONAL ASSOCIATION OF REGISTERED AGENTS AND 

BROKERS 

Sec. 201. Short Title. 

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

and Brokers. 

1 TITLE I—HOMEOWNER FLOOD 

2 INSURANCE AFFORDABILITY 

3 ACT 

4 SEC. 101. SHORT TITLE. 

5 This title may be cited as the ‘‘Homeowner Flood In6 surance Affordability Act of 2014’’. 

7 SEC. 102. DEFINITIONS. 

8 As used in this title, the following definitions shall 

9 apply: 

10 (1) ADJUSTED BASE FLOOD ELEVATION.—For 

11 purposes of rating a floodproofed covered structure, 

12 the term ‘‘adjusted base flood elevation’’ means the 

13 base flood elevation for a covered structure on the 

14 applicable effective flood insurance rate map, plus 1 

15 foot. 


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1 (2) ADMINISTRATOR.—The term ‘‘Adminis2 trator’’ means the Administrator of the Federal 

3 Emergency Management Agency. 

4 (3) AFFORDABILITY STUDY.—The term ‘‘af5 fordability study’’ means the study required under 

6 section 100236 of the Biggert-Waters Flood Insur7 ance Reform Act of 2012 (Public Law 112–141; 126 

8 Stat. 957). 

9 (4) APPLICABLE FLOOD PLAIN MANAGEMENT

10 MEASURES.—The term ‘‘applicable flood plain man11 agement measures’’ means flood plain management 

12 measures adopted by a community under section 

13 60.3(c) of title 44, Code of Federal Regulations. 

14 (5) COVERED STRUCTURE.—The term ‘‘covered 

15 structure’’ means a residential structure— 

16 (A) that is located in a community that 

17 has adopted flood plain management measures 

18 that are approved by the Federal Emergency 

19 Management Agency and that satisfy the re20 quirements for an exception for floodproofed 

21 residential basements under section 60.6(c) of 

22 title 44, Code of Federal Regulations; and 

23 (B) that was built in compliance with the 

24 applicable flood plain management measures. 


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1 (6) DRAFT AFFORDABILITY FRAMEWORK.—The 

2 term ‘‘draft affordability framework’’ means the 

3 draft programmatic and regulatory framework re4 quired to be prepared by the Administrator and sub5 mitted to Congress under section 103(d) addressing 

6 the issues of affordability of flood insurance sold 

7 under the National Flood Insurance Program, in8 cluding issues identified in the affordability study. 

9 (7) FLOODPROOFED ELEVATION.—The term 

10 ‘‘floodproofed elevation’’ means the height of 

11 floodproofing on a covered structure, as identified on 

12 the Residential Basement Floodproofing Certificate 

13 for the covered structure. 

14 (8) NATIONAL FLOOD INSURANCE PROGRAM.— 

15 The term ‘‘National Flood Insurance Program’’ 

16 means the program established under the National 

17 Flood Insurance Act of 1968 (42 U.S.C. 4001 et 

18 seq.). 

19 SEC. 103. DELAYED IMPLEMENTATION OF FLOOD INSUR20 ANCE RATE INCREASES; DRAFT AFFORD21 ABILITY FRAMEWORK. 

22 (a) DELAYED IMPLEMENTATION OF FLOOD INSUR23 ANCE RATE INCREASES.— 

24 (1) GRANDFATHERED PROPERTIES.—Beginning 

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1 trator may not implement section 1308(h) of the 

2 National Flood Insurance Act of 1968 (42 U.S.C. 

3 4015(h)). 

4 (2) PRE-FIRM PROPERTIES.—Beginning on the 

5 date of enactment of this Act, the Administrator 

6 may not implement— 

7 (A) section 1307(g)(1) of the National 

8 Flood Insurance Act of 1968 (42 U.S.C. 

9 4014(g)(1)); or 

10 (B) section 1307(g)(3) of the National 

11 Flood Insurance Act of 1968 (42 U.S.C. 

12 4014(g)(3)) with respect to any policy described 

13 in that section, provided that the decision of the 

14 policy holder to permit a lapse in flood insur15 ance coverage was as a result of the property 

16 covered by the policy no longer being required 

17 to retain such coverage. 

18 (3) EXPIRATION.—The prohibitions set forth 

19 under paragraphs (1) and (2) shall expire 6 months 

20 after the later of— 

21 (A) the date on which the Administrator 

22 proposes the draft affordability framework; or 

23 (B) the date on which the Administrator 

24 certifies in writing to Congress that the Federal 

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1 mented a flood mapping approach that, when 

2 applied, results in technically credible flood haz3 ard data in all areas where Flood Insurance 

4 Rate Maps are prepared or updated. 

5 (b) PROPERTY SALE TRIGGER.— 

6 (1) IN GENERAL.—Section 1307(g)(2) of the 

7 National Flood Insurance Act of 1968 (42 U.S.C. 

8 4014(g)(2)) is amended to read as follows: 

9 ‘‘(2) any property purchased after the expira10 tion of the 6-month period set forth under section 

11 103(a)(3) of the Homeowner Flood Insurance Af12 fordability Act of 2014;’’. 

13 (2) PROTECTION OF SUBSIDY FOR PROPERTIES

14 PURCHASED ON OR BEFORE EXPIRATION DATE.— 

15 Notwithstanding paragraph (1) or (3) of section 

16 1307(g) of the National Flood Insurance Act of 

17 1968 (42 U.S.C. 4014(g)(1) and (3)), the Adminis18 trator may not reduce the risk premium rate subsidy 

19 for flood insurance for a property purchased on or 

20 before the expiration of the 6-month period set forth 

21 under subsection (a)(3) of this section based on the 

22 fact that— 

23 (A) the property was not insured by the 

24 flood insurance program as of the date of en25 actment of the Biggert-Waters Flood Insurance 


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1 Reform Act of 2012 (Public Law 112–141; 126 

2 Stat. 916); or 

3 (B) on or before the expiration of that 6- 

4 month period, the policy for the property had 

5 lapsed in coverage as a result of the deliberate 

6 choice of the policy holder, provided that the 

7 decision of the policy holder to permit a lapse 

8 in coverage was as a result of the property no 

9 longer being required to retain such coverage. 

10 (c) TREATMENT OF PRE-FIRM PROPERTIES.—Be11 ginning on the date of enactment of this Act and ending 

12 upon the expiration of the 6-month period set forth under 

13 subsection (a)(3), the Administrator shall restore the risk 

14 premium rate subsidies for flood insurance estimated 

15 under section 1307(a)(2) of the National Flood Insurance 

16 Act of 1968 (42 U.S.C. 4014(a)(2)) for any property— 

17 (1) with respect to which the Administrator 

18 may not, under subsection (a)(2)(A) of this section, 

19 implement section 1307(g)(1) of the National Flood 

20 Insurance Act of 1968; 

21 (2) with respect to which the Administrator 

22 may not, under subsection (a)(2)(B) of this section, 

23 implement section 1307(g)(3) of the National Flood 

24 Insurance Act of 1968; or 


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1 (3) described in section 1307(g)(2) of the Na2 tional Flood Insurance Act of 1968 (42 U.S.C. 

3 4014(g)(2)), as in effect on the day before the date 

4 of enactment of this Act. 

5 (d) DRAFT AFFORDABILITY FRAMEWORK.— 

6 (1) IN GENERAL.—The Administrator shall pre7 pare a draft affordability framework that proposes 

8 to address, via programmatic and regulatory 

9 changes, the issues of affordability of flood insur10 ance sold under the National Flood Insurance Pro11 gram, including issues identified in the affordability 

12 study. 

13 (2) CRITERIA.—In carrying out the require14 ments under paragraph (1), the Administrator shall 

15 consider the following criteria: 

16 (A) Accurate communication to consumers 

17 of the flood risk associated with their property. 

18 (B) Targeted assistance to flood insurance 

19 policy holders based on their financial ability to 

20 continue to participate in the National Flood 

21 Insurance Program. 

22 (C) Individual or community actions to 

23 mitigate the risk of flood or lower the cost of 

24 flood insurance. 


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1 (D) The impact of increases in risk pre2 mium rates on participation in the National 

3 Flood Insurance Program. 

4 (E) The impact flood insurance rate map 

5 updates have on the affordability of flood insur6 ance. 

7 (3) DEADLINE FOR SUBMISSION.—Not later 

8 than 18 months after the date on which the Admin9 istrator submits the affordability study, the Admin10 istrator shall submit to the full Committee on Bank11 ing, Housing, and Urban Affairs and the full Com12 mittee on Appropriations of the Senate and the full 

13 Committee on Financial Services and the full Com14 mittee on Appropriations of the House of Represent15 atives the draft affordability framework. 

16 (e) INTERAGENCY AGREEMENTS.—The Adminis17 trator may enter into an agreement with another Federal 

18 agency to— 

19 (1) complete the affordability study; or 

20 (2) prepare the draft affordability framework. 

21 (f) CLEAR COMMUNICATIONS.—The Administrator 

22 shall clearly communicate full flood risk determinations to 

23 individual property owners regardless of whether their pre24 mium rates are full actuarial rates. 


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1 (g) RULE OF CONSTRUCTION.—Nothing in this sec2 tion shall be construed to provide the Administrator with 

3 the authority to provide assistance to homeowners based 

4 on affordability that was not available prior to the enact5 ment of the Biggert-Waters Flood Insurance Reform Act 

6 of 2012 (Public Law 112–141; 126 Stat. 916). 

7 SEC. 104. AFFORDABILITY STUDY AND REPORT. 

8 Notwithstanding the deadline under section 

9 100236(c) of the Biggert-Waters Flood Insurance Reform 

10 Act of 2012 (Public Law 112–141; 126 Stat. 957), not 

11 later than 2 years after the date of enactment of this Act, 

12 the Administrator shall submit to the full Committee on 

13 Banking, Housing, and Urban Affairs and the full Com14 mittee on Appropriations of the Senate and the full Com15 mittee on Financial Services and the full Committee on 

16 Appropriations of the House of Representatives the af17 fordability study and report required under such section. 

18 SEC. 105. AFFORDABILITY STUDY FUNDING. 

19 Section 100236(d) of the Biggert-Waters Flood In20 surance Reform Act of 2012 (Public Law 112–141; 126 

21 Stat. 957) is amended by striking ‘‘not more than 

22 $750,000’’ and inserting ‘‘such amounts as may be nec23 essary’’. 


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1 SEC. 106. FUNDS TO REIMBURSE HOMEOWNERS FOR SUC2 CESSFUL MAP APPEALS. 

3 (a) IN GENERAL.—Section 1363(f) of the National 

4 Flood Insurance Act of 1968 (42 U.S.C. 4104(f)) is 

5 amended by striking the second sentence and inserting the 

6 following: ‘‘The Administrator may use such amounts 

7 from the National Flood Insurance Fund established 

8 under section 1310 as may be necessary to carry out this 

9 subsection.’’. 

10 (b) CONFORMING AMENDMENT.—Section 1310(a) of 

11 the National Flood Insurance Act of 1968 (42 U.S.C. 

12 4017(a)) is amended— 

13 (1) in paragraph (6), by striking ‘‘and’’ at the 

14 end; 

15 (2) in paragraph (7), by striking the period at 

16 the end and inserting ‘‘; and’’; and 

17 (3) by adding at the end the following: 

18 ‘‘(8) for carrying out section 1363(f).’’. 

19 SEC. 107. FLOOD PROTECTION SYSTEMS. 

20 (a) ADEQUATE PROGRESS ON CONSTRUCTION OF

21 FLOOD PROTECTION SYSTEMS.—Section 1307(e) of the 

22 National Flood Insurance Act of 1968 (42 U.S.C. 

23 4014(e)) is amended— 

24 (1) in the first sentence, by inserting ‘‘or recon25 struction’’ after ‘‘construction’’; 


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1 (2) by striking the second sentence and insert2 ing the following: ‘‘The Administrator shall find that 

3 adequate progress on the construction or reconstruc4 tion of a flood protection system, based on the 

5 present value of the completed flood protection sys6 tem, has been made only if (1) 100 percent of the 

7 cost of the system has been authorized, (2) at least 

8 60 percent of the cost of the system has been appro9 priated, (3) at least 50 percent of the cost of the 

10 system has been expended, and (4) the system is at 

11 least 50 percent completed.’’; and 

12 (3) by adding at the end the following: ‘‘Not13 withstanding any other provision of law, in deter14 mining whether a community has made adequate 

15 progress on the construction, reconstruction, or im16 provement of a flood protection system, the Adminis17 trator shall consider all sources of funding, including 

18 Federal, State, and local funds.’’. 

19 (b) COMMUNITIES RESTORING DISACCREDITED

20 FLOOD PROTECTION SYSTEMS.—Section 1307(f) of the 

21 National Flood Insurance Act of 1968 (42 U.S.C. 

22 4014(f)) is amended by striking the first sentence and in23 serting the following: ‘‘Notwithstanding any other provi24 sion of law, this subsection shall apply to riverine and 

25 coastal levees that are located in a community which has 


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1 been determined by the Administrator of the Federal 

2 Emergency Management Agency to be in the process of 

3 restoring flood protection afforded by a flood protection 

4 system that had been previously accredited on a Flood In5 surance Rate Map as providing 100-year frequency flood 

6 protection but no longer does so, and shall apply without 

7 regard to the level of Federal funding of or participation 

8 in the construction, reconstruction, or improvement of the 

9 flood protection system.’’. 

10 SEC. 108. TREATMENT OF FLOODPROOFED RESIDENTIAL 

11 BASEMENTS. 

12 In implementing section 1308(h) of the National 

13 Flood Insurance Act of 1968 (42 U.S.C. 4015(h)), the Ad14 ministrator shall rate a covered structure using the ele15 vation difference between the floodproofed elevation of the 

16 covered structure and the adjusted base flood elevation of 

17 the covered structure. 

18 SEC. 109. DESIGNATION OF FLOOD INSURANCE ADVOCATE. 

19 (a) IN GENERAL.—The Administrator shall designate 

20 a Flood Insurance Advocate to advocate for the fair treat21 ment of policy holders under the National Flood Insurance 

22 Program and property owners in the mapping of flood 

23 hazards, the identification of risks from flood, and the im24 plementation of measures to minimize the risk of flood. 


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1 (b) DUTIES AND RESPONSIBILITIES.—The duties 

2 and responsibilities of the Flood Insurance Advocate des3 ignated under subsection (a) shall be to— 

4 (1) educate property owners and policyholders 

5 under the National Flood Insurance Program on— 

6 (A) individual flood risks; 

7 (B) flood mitigation; 

8 (C) measures to reduce flood insurance 

9 rates through effective mitigation; and 

10 (D) the flood insurance rate map review 

11 and amendment process; 

12 (2) assist policy holders under the National 

13 Flood Insurance Program and property owners to 

14 understand the procedural requirements related to 

15 appealing preliminary flood insurance rate maps and 

16 implementing measures to mitigate evolving flood 

17 risks; 

18 (3) assist in the development of regional capac19 ity to respond to individual constituent concerns 

20 about flood insurance rate map amendments and re21 visions; 

22 (4) coordinate outreach and education with 

23 local officials and community leaders in areas im24 pacted by proposed flood insurance rate map amend25 ments and revisions; and 


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1 (5) aid potential policy holders under the Na2 tional Flood Insurance Program in obtaining and 

3 verifying accurate and reliable flood insurance rate 

4 information when purchasing or renewing a flood in5 surance policy. 

6 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

7 are authorized to be appropriated for each fiscal year such 

8 sums as may be necessary to carry out the duties and re9 sponsibilities of the Flood Insurance Advocate. 

10 TITLE II—NATIONAL ASSOCIA11 TION OF REGISTERED 

12 AGENTS AND BROKERS 

13 SEC. 201. SHORT TITLE. 

14 This title may be cited as the ‘‘National Association 

15 of Registered Agents and Brokers Reform Act of 2014’’. 

16 SEC. 202. REESTABLISHMENT OF THE NATIONAL ASSOCIA17 TION OF REGISTERED AGENTS AND BRO18 KERS. 

19 (a) IN GENERAL.—Subtitle C of title III of the 

20 Gramm-Leach-Bliley Act (15 U.S.C. 6751 et seq.) is 

21 amended to read as follows: 


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1 ‘‘Subtitle C—National Association 

2 of Registered Agents and Brokers 

3 ‘‘SEC. 321. NATIONAL ASSOCIATION OF REGISTERED 

4 AGENTS AND BROKERS. 

5 ‘‘(a) ESTABLISHMENT.—There is established the Na6 tional Association of Registered Agents and Brokers (re7 ferred to in this subtitle as the Association). 

8 ‘‘(b) STATUS.—The Association shall— 

9 ‘‘(1) be a nonprofit corporation; 

10 ‘‘(2) not be an agent or instrumentality of the 

11 Federal Government; 

12 ‘‘(3) be an independent organization that may 

13 not be merged with or into any other private or pub14 lic entity; and 

15 ‘‘(4) except as otherwise provided in this sub16 title, be subject to, and have all the powers conferred 

17 upon, a nonprofit corporation by the District of Co18 lumbia Nonprofit Corporation Act (D.C. Code, sec. 

19 29–301.01 et seq.) or any successor thereto. 

20 ‘‘SEC. 322. PURPOSE. 

21 ‘‘The purpose of the Association shall be to provide 

22 a mechanism through which licensing, continuing edu23 cation, and other nonresident insurance producer quali24 fication requirements and conditions may be adopted and 

25 applied on a multi-state basis without affecting the laws, 


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1 rules, and regulations, and preserving the rights of a 

2 State, pertaining to— 

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

4 qualification requirements of insurance producers 

5 that are not members of the Association; 

6 ‘‘(2) resident or nonresident insurance producer 

7 appointment requirements; 

8 ‘‘(3) supervising and disciplining resident and 

9 nonresident insurance producers; 

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

11 nonresident insurance producers so that there is no 

12 loss of insurance producer licensing revenue to the 

13 State; and 

14 ‘‘(5) prescribing and enforcing laws and regula15 tions regulating the conduct of resident and non16 resident insurance producers. 

17 ‘‘SEC. 323. MEMBERSHIP. 

18 ‘‘(a) ELIGIBILITY.— 

19 ‘‘(1) IN GENERAL.—Any insurance producer li20 censed in its home State shall, subject to paragraphs 

21 (2) and (4), be eligible to become a member of the 

22 Association. 

23 ‘‘(2) INELIGIBILITY FOR SUSPENSION OR REV24 OCATION OF LICENSE.—Subject to paragraph (3), 

25 an insurance producer is not eligible to become a 


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1 member of the Association if a State insurance regu2 lator has suspended or revoked the insurance license 

3 of the insurance producer in that State. 

4 ‘‘(3) RESUMPTION OF ELIGIBILITY.—Paragraph 

5 (2) shall cease to apply to any insurance producer 

6 if— 

7 ‘‘(A) the State insurance regulator reissues 

8 or renews the license of the insurance producer 

9 in the State in which the license was suspended 

10 or revoked, or otherwise terminates or vacates 

11 the suspension or revocation; or 

12 ‘‘(B) the suspension or revocation expires 

13 or is subsequently overturned by a court of 

14 competent jurisdiction. 

15 ‘‘(4) CRIMINAL HISTORY RECORD CHECK RE16 QUIRED.— 

17 ‘‘(A) IN GENERAL.—An insurance pro18 ducer who is an individual shall not be eligible 

19 to become a member of the Association unless 

20 the insurance producer has undergone a crimi21 nal history record check that complies with reg22 ulations prescribed by the Attorney General of 

23 the United States under subparagraph (K). 

24 ‘‘(B) CRIMINAL HISTORY RECORD CHECK

25 REQUESTED BY HOME STATE.—An insurance 


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1 producer who is licensed in a State and who has 

2 undergone a criminal history record check dur3 ing the 2-year period preceding the date of sub4 mission of an application to become a member 

5 of the Association, in compliance with a re6 quirement to undergo such criminal history 

7 record check as a condition for such licensure 

8 in the State, shall be deemed to have undergone 

9 a criminal history record check for purposes of 

10 subparagraph (A). 

11 ‘‘(C) CRIMINAL HISTORY RECORD CHECK

12 REQUESTED BY ASSOCIATION.— 

13 ‘‘(i) IN GENERAL.—The Association 

14 shall, upon request by an insurance pro15 ducer licensed in a State, submit identi16 fication information obtained from the in17 surance producer, and a request for a 

18 criminal history record check of the insur19 ance producer, to the Federal Bureau of 

20 Investigation. 

21 ‘‘(ii) PROCEDURES.—The board of di22 rectors of the Association (referred to in 

23 this subtitle as the Board) shall prescribe 

24 procedures for obtaining and utilizing iden25 tification information and criminal history 


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1 record information, including the establish2 ment of reasonable fees required to per3 form a criminal history record check and 

4 appropriate safeguards for maintaining 

5 confidentiality and security of the informa6 tion. 

7 ‘‘(D) FORM OF REQUEST.—A submission 

8 under subparagraph (C)(i) shall include such 

9 identification information as is required by the 

10 Attorney General concerning the person about 

11 whom the criminal history record check is re12 quested, and a statement signed by the person 

13 authorizing the Attorney General to provide the 

14 information to the Association and for the As15 sociation to receive the information. 

16 ‘‘(E) PROVISION OF INFORMATION BY AT17 TORNEY GENERAL.—Upon receiving a submis18 sion under subparagraph (C)(i) from the Asso19 ciation, the Attorney General shall search all 

20 criminal history records of the Federal Bureau 

21 of Investigation, including records of the Crimi22 nal Justice Information Services Division of the 

23 Federal Bureau of Investigation, that the At24 torney General determines appropriate for 

25 criminal history records corresponding to the 


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1 identification information provided under sub2 paragraph (D) and provide all criminal history 

3 record information included in the request to 

4 the Association. 

5 ‘‘(F) LIMITATION ON PERMISSIBLE USES

6 OF INFORMATION.—Any information provided 

7 to the Association under subparagraph (E) may 

8 only— 

9 ‘‘(i) be used for purposes of deter10 mining compliance with membership cri11 teria established by the Association; 

12 ‘‘(ii) be disclosed to State insurance 

13 regulators, or Federal or State law en14 forcement agencies, in conformance with 

15 applicable law; or 

16 ‘‘(iii) be disclosed, upon request, to 

17 the insurance producer to whom the crimi18 nal history record information relates. 

19 ‘‘(G) PENALTY FOR IMPROPER USE OR

20 DISCLOSURE.—Whoever knowingly uses any in21 formation provided under subparagraph (E) for 

22 a purpose not authorized in subparagraph (F), 

23 or discloses any such information to anyone not 

24 authorized to receive it, shall be fined under 


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1 title 18, United States Code, imprisoned for not 

2 more than 2 years, or both. 

3 ‘‘(H) RELIANCE ON INFORMATION.—Nei4 ther the Association nor any of its Board mem5 bers, officers, or employees shall be liable in 

6 any action for using information provided under 

7 subparagraph (E) as permitted under subpara8 graph (F) in good faith and in reasonable reli9 ance on its accuracy. 

10 ‘‘(I) FEES.—The Attorney General may 

11 charge a reasonable fee for conducting the 

12 search and providing the information under 

13 subparagraph (E), and any such fee shall be 

14 collected and remitted by the Association to the 

15 Attorney General. 

16 ‘‘(J) RULE OF CONSTRUCTION.—Nothing 

17 in this paragraph shall be construed as— 

18 ‘‘(i) requiring a State insurance regu19 lator to perform criminal history record 

20 checks under this section; or 

21 ‘‘(ii) limiting any other authority that 

22 allows access to criminal history records. 

23 ‘‘(K) REGULATIONS.—The Attorney Gen24 eral shall prescribe regulations to carry out this 

25 paragraph, which shall include— 


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1 ‘‘(i) appropriate protections for ensur2 ing the confidentiality of information pro3 vided under subparagraph (E); and 

4 ‘‘(ii) procedures providing a reason5 able opportunity for an insurance producer 

6 to contest the accuracy of information re7 garding the insurance producer provided 

8 under subparagraph (E). 

9 ‘‘(L) INELIGIBILITY FOR MEMBERSHIP.— 

10 ‘‘(i) IN GENERAL.—The Association 

11 may, under reasonably consistently applied 

12 standards, deny membership to an insur13 ance producer on the basis of criminal his14 tory record information provided under 

15 subparagraph (E), or where the insurance 

16 producer has been subject to disciplinary 

17 action, as described in paragraph (2). 

18 ‘‘(ii) RIGHTS OF APPLICANTS DENIED

19 MEMBERSHIP.—The Association shall no20 tify any insurance producer who is denied 

21 membership on the basis of criminal his22 tory record information provided under 

23 subparagraph (E) of the right of the insur24 ance producer to— 


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1 ‘‘(I) obtain a copy of all criminal 

2 history record information provided to 

3 the Association under subparagraph 

4 (E) with respect to the insurance pro5 ducer; and 

6 ‘‘(II) challenge the denial of 

7 membership based on the accuracy 

8 and completeness of the information. 

9 ‘‘(M) DEFINITION.—For purposes of this 

10 paragraph, the term criminal history record 

11 check means a national background check of 

12 criminal history records of the Federal Bureau 

13 of Investigation. 

14 ‘‘(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRI15 TERIA.—The Association may establish membership cri16 teria that bear a reasonable relationship to the purposes 

17 for which the Association was established. 

18 ‘‘(c) ESTABLISHMENT OF CLASSES AND CATEGORIES

19 OF MEMBERSHIP.— 

20 ‘‘(1) CLASSES OF MEMBERSHIP.—The Associa21 tion may establish separate classes of membership, 

22 with separate criteria, if the Association reasonably 

23 determines that performance of different duties re24 quires different levels of education, training, experi25 ence, or other qualifications. 


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1 ‘‘(2) BUSINESS ENTITIES.—The Association 

2 shall establish a class of membership and member3 ship criteria for business entities. A business entity 

4 that applies for membership shall be required to des5 ignate an individual Association member responsible 

6 for the compliance of the business entity with Asso7 ciation standards and the insurance laws, rules, and 

8 regulations of any State in which the business entity 

9 seeks to do business on the basis of Association 

10 membership. 

11 ‘‘(3) CATEGORIES.— 

12 ‘‘(A) SEPARATE CATEGORIES FOR INSUR13 ANCE PRODUCERS PERMITTED.—The Associa14 tion may establish separate categories of mem15 bership for insurance producers and for other 

16 persons or entities within each class, based on 

17 the types of licensing categories that exist 

18 under State laws. 

19 ‘‘(B) SEPARATE TREATMENT FOR DEPOSI20 TORY INSTITUTIONS PROHIBITED.—No special 

21 categories of membership, and no distinct mem22 bership criteria, shall be established for mem23 bers that are depository institutions or for em24 ployees, agents, or affiliates of depository insti25 tutions. 


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1 ‘‘(d) MEMBERSHIP CRITERIA.— 

2 ‘‘(1) IN GENERAL.—The Association may estab3 lish criteria for membership which shall include 

4 standards for personal qualifications, education, 

5 training, and experience. The Association shall not 

6 establish criteria that unfairly limit the ability of a 

7 small insurance producer to become a member of the 

8 Association, including imposing discriminatory mem9 bership fees. 

10 ‘‘(2) QUALIFICATIONS.—In establishing criteria 

11 under paragraph (1), the Association shall not adopt 

12 any qualification less protective to the public than 

13 that contained in the National Association of Insur14 ance Commissioners (referred to in this subtitle as 

15 the NAIC) Producer Licensing Model Act in effect 

16 as of the date of enactment of the National Associa17 tion of Registered Agents and Brokers Reform Act 

18 of 2014, and shall consider the highest levels of in19 surance producer qualifications established under 

20 the licensing laws of the States. 

21 ‘‘(3) ASSISTANCE FROM STATES.— 

22 ‘‘(A) IN GENERAL.—The Association may 

23 request a State to provide assistance in inves24 tigating and evaluating the eligibility of a proVerDate Mar 15 2010 23:24 Jan 16, 2014 Jkt 039200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S1926.PCS S1926

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1 spective member for membership in the Associa2 tion. 

3 ‘‘(B) AUTHORIZATION OF INFORMATION

4 SHARING.—A submission under subsection 

5 (a)(4)(C)(i) made by an insurance producer li6 censed in a State shall include a statement 

7 signed by the person about whom the assistance 

8 is requested authorizing— 

9 ‘‘(i) the State to share information 

10 with the Association; and 

11 ‘‘(ii) the Association to receive the in12 formation. 

13 ‘‘(C) RULE OF CONSTRUCTION.—Subpara14 graph (A) shall not be construed as requiring or 

15 authorizing any State to adopt new or addi16 tional requirements concerning the licensing or 

17 evaluation of insurance producers. 

18 ‘‘(4) DENIAL OF MEMBERSHIP.—The Associa19 tion may, based on reasonably consistently applied 

20 standards, deny membership to any State-licensed 

21 insurance producer for failure to meet the member22 ship criteria established by the Association. 

23 ‘‘(e) EFFECT OF MEMBERSHIP.— 

24 ‘‘(1) AUTHORITY OF ASSOCIATION MEMBERS.— 

25 Membership in the Association shall— 


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1 ‘‘(A) authorize an insurance producer to 

2 sell, solicit, or negotiate insurance in any State 

3 for which the member pays the licensing fee set 

4 by the State for any line or lines of insurance 

5 specified in the home State license of the insur6 ance producer, and exercise all such incidental 

7 powers as shall be necessary to carry out such 

8 activities, including claims adjustments and set9 tlement to the extent permissible under the laws 

10 of the State, risk management, employee bene11 fits advice, retirement planning, and any other 

12 insurance-related consulting activities; 

13 ‘‘(B) be the equivalent of a nonresident in14 surance producer license for purposes of author15 izing the insurance producer to engage in the 

16 activities described in subparagraph (A) in any 

17 State where the member pays the licensing fee; 

18 and 

19 ‘‘(C) be the equivalent of a nonresident in20 surance producer license for the purpose of sub21 jecting an insurance producer to all laws, regu22 lations, provisions or other action of any State 

23 concerning revocation, suspension, or other en24 forcement action related to the ability of a 

25 member to engage in any activity within the 


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1 scope of authority granted under this subsection 

2 and to all State laws, regulations, provisions, 

3 and actions preserved under paragraph (5). 

4 ‘‘(2) VIOLENT CRIME CONTROL AND LAW EN5 FORCEMENT ACT OF 1994.—Nothing in this subtitle 

6 shall be construed to alter, modify, or supercede any 

7 requirement established by section 1033 of title 18, 

8 United States Code. 

9 ‘‘(3) AGENT FOR REMITTING FEES.—The Asso10 ciation shall act as an agent for any member for 

11 purposes of remitting licensing fees to any State 

12 pursuant to paragraph (1). 

13 ‘‘(4) NOTIFICATION OF ACTION.— 

14 ‘‘(A) IN GENERAL.—The Association shall 

15 notify the States (including State insurance 

16 regulators) and the NAIC when an insurance 

17 producer has satisfied the membership criteria 

18 of this section. The States (including State in19 surance regulators) shall have 10 business days 

20 after the date of the notification in order to 

21 provide the Association with evidence that the 

22 insurance producer does not satisfy the criteria 

23 for membership in the Association. 

24 ‘‘(B) ONGOING DISCLOSURES REQUIRED.— 

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1 close to the States (including State insurance 

2 regulators) and the NAIC a list of the States 

3 in which each member is authorized to operate. 

4 The Association shall immediately notify the 

5 States (including State insurance regulators) 

6 and the NAIC when a member is newly author7 ized to operate in one or more States, or is no 

8 longer authorized to operate in one or more 

9 States on the basis of Association membership. 

10 ‘‘(5) PRESERVATION OF CONSUMER PROTEC11 TION AND MARKET CONDUCT REGULATION.— 

12 ‘‘(A) IN GENERAL.—No provision of this 

13 section shall be construed as altering or affect14 ing the applicability or continuing effectiveness 

15 of any law, regulation, provision, or other action 

16 of any State, including those described in sub17 paragraph (B), to the extent that the State law, 

18 regulation, provision, or other action is not in19 consistent with the provisions of this subtitle re20 lated to market entry for nonresident insurance 

21 producers, and then only to the extent of the in22 consistency. 

23 ‘‘(B) PRESERVED REGULATIONS.—The 

24 laws, regulations, provisions, or other actions of 

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1 clude laws, regulations, provisions, or other ac2 tions that— 

3 ‘‘(i) regulate market conduct, insur4 ance producer conduct, or unfair trade 

5 practices; 

6 ‘‘(ii) establish consumer protections; 

7 or 

8 ‘‘(iii) require insurance producers to 

9 be appointed by a licensed or authorized 

10 insurer. 

11 ‘‘(f) BIENNIAL RENEWAL.—Membership in the Asso12 ciation shall be renewed on a biennial basis. 

13 ‘‘(g) CONTINUING EDUCATION.— 

14 ‘‘(1) IN GENERAL.—The Association shall es15 tablish, as a condition of membership, continuing 

16 education requirements which shall be comparable to 

17 the continuing education requirements under the li18 censing laws of a majority of the States. 

19 ‘‘(2) STATE CONTINUING EDUCATION REQUIRE20 MENTS.—A member may not be required to satisfy 

21 continuing education requirements imposed under 

22 the laws, regulations, provisions, or actions of any 

23 State other than the home State of the member. 

24 ‘‘(3) RECIPROCITY.—The Association shall not 

25 require a member to satisfy continuing education reVerDate Mar 15 2010 23:24 Jan 16, 2014 Jkt 039200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S1926.PCS S1926

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1 quirements that are equivalent to any continuing 

2 education requirements of the home State of the 

3 member that have been satisfied by the member dur4 ing the applicable licensing period. 

5 ‘‘(4) LIMITATION ON THE ASSOCIATION.—The 

6 Association shall not directly or indirectly offer any 

7 continuing education courses for insurance pro8 ducers. 

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

10 ‘‘(1) DISCIPLINARY ACTION.—The Association 

11 may place an insurance producer that is a member 

12 of the Association on probation or suspend or revoke 

13 the membership of the insurance producer in the As14 sociation, or assess monetary fines or penalties, as 

15 the Association determines to be appropriate, if— 

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

17 the applicable membership criteria or other 

18 standards established by the Association; 

19 ‘‘(B) the insurance producer has been sub20 ject to disciplinary action pursuant to a final 

21 adjudicatory proceeding under the jurisdiction 

22 of a State insurance regulator; 

23 ‘‘(C) an insurance license held by the in24 surance producer has been suspended or re25 voked by a State insurance regulator; or 


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1 ‘‘(D) the insurance producer has been con2 victed of a crime that would have resulted in 

3 the denial of membership pursuant to sub4 section (a)(4)(L)(i) at the time of application, 

5 and the Association has received a copy of the 

6 final disposition from a court of competent ju7 risdiction. 

8 ‘‘(2) VIOLATIONS OF ASSOCIATION STAND9 ARDS.—The Association shall have the power to in10 vestigate alleged violations of Association standards. 

11 ‘‘(3) REPORTING.—The Association shall imme12 diately notify the States (including State insurance 

13 regulators) and the NAIC when the membership of 

14 an insurance producer has been placed on probation 

15 or has been suspended, revoked, or otherwise termi16 nated, or when the Association has assessed mone17 tary fines or penalties. 

18 ‘‘(i) CONSUMER COMPLAINTS.— 

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

20 ‘‘(A) refer any complaint against a mem21 ber of the Association from a consumer relating 

22 to alleged misconduct or violations of State in23 surance laws to the State insurance regulator 

24 where the consumer resides and, when appro25 priate, to any additional State insurance reguVerDate Mar 15 2010 23:24 Jan 16, 2014 Jkt 039200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S1926.PCS S1926

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1 lator, as determined by standards adopted by 

2 the Association; and 

3 ‘‘(B) make any related records and infor4 mation available to each State insurance regu5 lator to whom the complaint is forwarded. 

6 ‘‘(2) TELEPHONE AND OTHER ACCESS.—The 

7 Association shall maintain a toll-free number for 

8 purposes of this subsection and, as practicable, other 

9 alternative means of communication with consumers, 

10 such as an Internet webpage. 

11 ‘‘(3) FINAL DISPOSITION OF INVESTIGATION.— 

12 State insurance regulators shall provide the Associa13 tion with information regarding the final disposition 

14 of a complaint referred pursuant to paragraph 

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

16 State to release confidential investigation reports or 

17 other information protected by State law to the As18 sociation. 

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

20 may— 

21 ‘‘(1) share documents, materials, or other infor22 mation, including confidential and privileged docu23 ments, with a State, Federal, or international gov24 ernmental entity or with the NAIC or other appro25 priate entity referenced in paragraphs (3) and (4), 


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1 provided that the recipient has the authority and 

2 agrees to maintain the confidentiality or privileged 

3 status of the document, material, or other informa4 tion; 

5 ‘‘(2) limit the sharing of information as re6 quired under this subtitle with the NAIC or any 

7 other non-governmental entity, in circumstances 

8 under which the Association determines that the 

9 sharing of such information is unnecessary to fur10 ther the purposes of this subtitle; 

11 ‘‘(3) establish a central clearinghouse, or utilize 

12 the NAIC or another appropriate entity, as deter13 mined by the Association, as a central clearinghouse, 

14 for use by the Association and the States (including 

15 State insurance regulators), through which members 

16 of the Association may disclose their intent to oper17 ate in 1 or more States and pay the licensing fees 

18 to the appropriate States; and 

19 ‘‘(4) establish a database, or utilize the NAIC 

20 or another appropriate entity, as determined by the 

21 Association, as a database, for use by the Associa22 tion and the States (including State insurance regu23 lators) for the collection of regulatory information 

24 concerning the activities of insurance producers. 


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1 ‘‘(k) EFFECTIVE DATE.—The provisions of this sec2 tion shall take effect on the later of— 

3 ‘‘(1) the expiration of the 2-year period begin4 ning on the date of enactment of the National Asso5 ciation of Registered Agents and Brokers Reform 

6 Act of 2014; and 

7 ‘‘(2) the date of incorporation of the Associa8 tion. 

9 ‘‘SEC. 324. BOARD OF DIRECTORS. 

10 ‘‘(a) ESTABLISHMENT.—There is established a board 

11 of directors of the Association, which shall have authority 

12 to govern and supervise all activities of the Association. 

13 ‘‘(b) POWERS.—The Board shall have such of the 

14 powers and authority of the Association as may be speci15 fied in the bylaws of the Association. 

16 ‘‘(c) COMPOSITION.— 

17 ‘‘(1) IN GENERAL.—The Board shall consist of 

18 13 members who shall be appointed by the Presi19 dent, by and with the advice and consent of the Sen20 ate, in accordance with the procedures established 

21 under Senate Resolution 116 of the 112th Congress, 

22 of whom— 

23 ‘‘(A) 8 shall be State insurance commis24 sioners appointed in the manner provided in 

25 paragraph (2), 1 of whom shall be designated 


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•S 1926 PCS

1 by the President to serve as the chairperson of 

2 the Board until the Board elects one such State 

3 insurance commissioner Board member to serve 

4 as the chairperson of the Board; 

5 ‘‘(B) 3 shall have demonstrated expertise 

6 and experience with property and casualty in7 surance producer licensing; and 

8 ‘‘(C) 2 shall have demonstrated expertise 

9 and experience with life or health insurance 

10 producer licensing. 

11 ‘‘(2) STATE INSURANCE REGULATOR REP12 RESENTATIVES.— 

13 ‘‘(A) RECOMMENDATIONS.—Before making 

14 any appointments pursuant to paragraph 

15 (1)(A), the President shall request a list of rec16 ommended candidates from the States through 

17 the NAIC, which shall not be binding on the 

18 President. If the NAIC fails to submit a list of 

19 recommendations not later than 15 business 

20 days after the date of the request, the President 

21 may make the requisite appointments without 

22 considering the views of the NAIC. 

23 ‘‘(B) POLITICAL AFFILIATION.—Not more 

24 than 4 Board members appointed under paraVerDate Mar 15 2010 23:24 Jan 16, 2014 Jkt 039200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\S1926.PCS S1926

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1 graph (1)(A) shall belong to the same political 

2 party. 

3 ‘‘(C) FORMER STATE INSURANCE COMMIS4 SIONERS.— 

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

6 each currently serving State insurance 

7 commissioner an appointment to the 

8 Board, fewer than 8 State insurance com9 missioners have accepted appointment to 

10 the Board, the President may appoint the 

11 remaining State insurance commissioner 

12 Board members, as required under para13 graph (1)(A), of the appropriate political 

14 party as required under subparagraph (B), 

15 from among individuals who are former 

16 State insurance commissioners. 

17 ‘‘(ii) LIMITATION.—A former State 

18 insurance commissioner appointed as de19 scribed in clause (i) may not be employed 

20 by or have any present direct or indirect fi21 nancial interest in any insurer, insurance 

22 producer, or other entity in the insurance 

23 industry, other than direct or indirect own24 ership of, or beneficial interest in, an inVerDate Mar 15 2010 23:24 Jan 16, 2014 Jkt 039200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\S1926.PCS S1926

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1 surance policy or annuity contract written 

2 or sold by an insurer. 

3 ‘‘(D) SERVICE THROUGH TERM.—If a 

4 Board member appointed under paragraph 

5 (1)(A) ceases to be a State insurance commis6 sioner during the term of the Board member, 

7 the Board member shall cease to be a Board 

8 member. 

9 ‘‘(3) PRIVATE SECTOR REPRESENTATIVES.—In 

10 making any appointment pursuant to subparagraphs 

11 (B) and (C) of paragraph (1), the President may 

12 seek recommendations for candidates from groups 

13 representing the category of individuals described, 

14 which shall not be binding on the President. 

15 ‘‘(4) STATE INSURANCE COMMISSIONER DE16 FINED.—For purposes of this subsection, the term 

17 State insurance commissioner means a person who 

18 serves in the position in State government, or on the 

19 board, commission, or other body that is the primary 

20 insurance regulatory authority for the State. 

21 ‘‘(d) TERMS.— 

22 ‘‘(1) IN GENERAL.—Except as provided under 

23 paragraph (2), the term of service for each Board 

24 member shall be 2 years. 

25 ‘‘(2) EXCEPTIONS.— 


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1 ‘‘(A) 1-YEAR TERMS.—The term of service 

2 shall be 1 year, as designated by the President 

3 at the time of the nomination of the subject 

4 Board members for— 

5 ‘‘(i) 4 of the State insurance commis6 sioner Board members initially appointed 

7 under paragraph (1)(A), of whom not more 

8 than 2 shall belong to the same political 

9 party; 

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

11 appointed under paragraph (1)(B); and 

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

13 appointed under paragraph (1)(C). 

14 ‘‘(B) EXPIRATION OF TERM.—A Board 

15 member may continue to serve after the expira16 tion of the term to which the Board member 

17 was appointed for the earlier of 2 years or until 

18 a successor is appointed. 

19 ‘‘(C) MID-TERM APPOINTMENTS.—A 

20 Board member appointed to fill a vacancy oc21 curring before the expiration of the term for 

22 which the predecessor of the Board member 

23 was appointed shall be appointed only for the 

24 remainder of that term. 


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1 ‘‘(3) SUCCESSIVE TERMS.—Board members 

2 may be reappointed to successive terms. 

3 ‘‘(e) INITIAL APPOINTMENTS.—The appointment of 

4 initial Board members shall be made no later than 90 days 

5 after the date of enactment of the National Association 

6 of Registered Agents and Brokers Reform Act of 2014. 

7 ‘‘(f) MEETINGS.— 

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

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

10 ‘‘(B) as requested in writing to the chair11 person by not fewer than 5 Board members; or 

12 ‘‘(C) as otherwise provided by the bylaws 

13 of the Association. 

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

15 Board members shall constitute a quorum. 

16 ‘‘(3) VOTING.—Decisions of the Board shall re17 quire the approval of a majority of all Board mem18 bers present at a meeting, a quorum being present. 

19 ‘‘(4) INITIAL MEETING.—The Board shall hold 

20 its first meeting not later than 45 days after the 

21 date on which all initial Board members have been 

22 appointed. 

23 ‘‘(g) RESTRICTION ON CONFIDENTIAL INFORMA24 TION.—Board members appointed pursuant to subpara25 graphs (B) and (C) of subsection (c)(1) shall not have acVerDate Mar 15 2010 23:24 Jan 16, 2014 Jkt 039200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S1926.PCS S1926

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1 cess to confidential information received by the Associa2 tion in connection with complaints, investigations, or dis3 ciplinary proceedings involving insurance producers. 

4 ‘‘(h) ETHICS AND CONFLICTS OF INTEREST.—The 

5 Board shall issue and enforce an ethical conduct code to 

6 address permissible and prohibited activities of Board 

7 members and Association officers, employees, agents, or 

8 consultants. The code shall, at a minimum, include provi9 sions that prohibit any Board member or Association offi10 cer, employee, agent or consultant from— 

11 ‘‘(1) engaging in unethical conduct in the 

12 course of performing Association duties; 

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

14 the making of any Association decision, the outcome 

15 of which the Board member, officer, employee, 

16 agent, or consultant knows or had reason to know 

17 would have a reasonably foreseeable material finan18 cial effect, distinguishable from its effect on the pub19 lic generally, on the person or a member of the im20 mediate family of the person; 

21 ‘‘(3) accepting any gift from any person or enti22 ty other than the Association that is given because 

23 of the position held by the person in the Association; 

24 ‘‘(4) making political contributions to any per25 son or entity on behalf of the Association; and 


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1 ‘‘(5) lobbying or paying a person to lobby on 

2 behalf of the Association. 

3 ‘‘(i) COMPENSATION.— 

4 ‘‘(1) IN GENERAL.—Except as provided in para5 graph (2), no Board member may receive any com6 pensation from the Association or any other person 

7 or entity on account of Board membership. 

8 ‘‘(2) TRAVEL EXPENSES AND PER DIEM.— 

9 Board members may be reimbursed only by the As10 sociation for travel expenses, including per diem in 

11 lieu of subsistence, at rates consistent with rates au12 thorized for employees of Federal agencies under 

13 subchapter I of chapter 57 of title 5, United States 

14 Code, while away from home or regular places of 

15 business in performance of services for the Associa16 tion. 

17 ‘‘SEC. 325. BYLAWS, STANDARDS, AND DISCIPLINARY AC18 TIONS. 

19 ‘‘(a) ADOPTION AND AMENDMENT OF BYLAWS AND

20 STANDARDS.— 

21 ‘‘(1) PROCEDURES.—The Association shall 

22 adopt procedures for the adoption of bylaws and 

23 standards that are similar to procedures under sub24 chapter II of chapter 5 of title 5, United States 


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1 Code (commonly known as the Administrative Proce2 dure Act). 

3 ‘‘(2) COPY REQUIRED TO BE FILED.—The 

4 Board shall submit to the President, through the 

5 Department of the Treasury, and the States (includ6 ing State insurance regulators), and shall publish on 

7 the website of the Association, all proposed bylaws 

8 and standards of the Association, or any proposed 

9 amendment to the bylaws or standards of the Asso10 ciation, accompanied by a concise general statement 

11 of the basis and purpose of such proposal. 

12 ‘‘(3) EFFECTIVE DATE.—Any proposed bylaw 

13 or standard of the Association, and any proposed 

14 amendment to the bylaws or standards of the Asso15 ciation, shall take effect, after notice under para16 graph (2) and opportunity for public comment, on 

17 such date as the Association may designate, unless 

18 suspended under section 329(c). 

19 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in 

20 this section shall be construed to subject the Board 

21 or the Association to the requirements of subchapter 

22 II of chapter 5 of title 5, United States Code (com23 monly known as the Administrative Procedure Act). 

24 ‘‘(b) DISCIPLINARY ACTION BY THE ASSOCIATION.— 


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1 ‘‘(1) SPECIFICATION OF CHARGES.—In any pro2 ceeding to determine whether membership shall be 

3 denied, suspended, revoked, or not renewed, or to 

4 determine whether a member of the Association 

5 should be placed on probation (referred to in this 

6 section as a disciplinary action) or whether to assess 

7 fines or monetary penalties, the Association shall 

8 bring specific charges, notify the member of the 

9 charges, give the member an opportunity to defend 

10 against the charges, and keep a record. 

11 ‘‘(2) SUPPORTING STATEMENT.—A determina12 tion to take disciplinary action shall be supported by 

13 a statement setting forth— 

14 ‘‘(A) any act or practice in which the mem15 ber has been found to have been engaged; 

16 ‘‘(B) the specific provision of this subtitle 

17 or standard of the Association that any such 

18 act or practice is deemed to violate; and 

19 ‘‘(C) the sanction imposed and the reason 

20 for the sanction. 

21 ‘‘(3) INELIGIBILITY OF PRIVATE SECTOR REP22 RESENTATIVES.—Board members appointed pursu23 ant to section 324(c)(3) may not— 


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1 ‘‘(A) participate in any disciplinary action 

2 or be counted toward establishing a quorum 

3 during a disciplinary action; and 

4 ‘‘(B) have access to confidential informa5 tion concerning any disciplinary action. 

6 ‘‘SEC. 326. POWERS. 

7 ‘‘In addition to all the powers conferred upon a non8 profit corporation by the District of Columbia Nonprofit 

9 Corporation Act, the Association shall have the power to— 

10 ‘‘(1) establish and collect such membership fees 

11 as the Association finds necessary to impose to cover 

12 the costs of its operations; 

13 ‘‘(2) adopt, amend, and repeal bylaws, proce14 dures, or standards governing the conduct of Asso15 ciation business and performance of its duties; 

16 ‘‘(3) establish procedures for providing notice 

17 and opportunity for comment pursuant to section 

18 325(a); 

19 ‘‘(4) enter into and perform such agreements as 

20 necessary to carry out the duties of the Association; 

21 ‘‘(5) hire employees, professionals, or special22 ists, and elect or appoint officers, and to fix their 

23 compensation, define their duties and give them ap24 propriate authority to carry out the purposes of this 

25 subtitle, and determine their qualification; 


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1 ‘‘(6) establish personnel policies of the Associa2 tion and programs relating to, among other things, 

3 conflicts of interest, rates of compensation, where 

4 applicable, and qualifications of personnel; 

5 ‘‘(7) borrow money; and 

6 ‘‘(8) secure funding for such amounts as the 

7 Association determines to be necessary and appro8 priate to organize and begin operations of the Asso9 ciation, which shall be treated as loans to be repaid 

10 by the Association with interest at market rate. 

11 ‘‘SEC. 327. REPORT BY THE ASSOCIATION. 

12 ‘‘(a) IN GENERAL.—As soon as practicable after the 

13 close of each fiscal year, the Association shall submit to 

14 the President, through the Department of the Treasury, 

15 and the States (including State insurance regulators), and 

16 shall publish on the website of the Association, a written 

17 report regarding the conduct of its business, and the exer18 cise of the other rights and powers granted by this sub19 title, during such fiscal year. 

20 ‘‘(b) FINANCIAL STATEMENTS.—Each report sub21 mitted under subsection (a) with respect to any fiscal year 

22 shall include audited financial statements setting forth the 

23 financial position of the Association at the end of such 

24 fiscal year and the results of its operations (including the 

25 source and application of its funds) for such fiscal year. 


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1 ‘‘SEC. 328. LIABILITY OF THE ASSOCIATION AND THE 

2 BOARD MEMBERS, OFFICERS, AND EMPLOY3 EES OF THE ASSOCIATION. 

4 ‘‘(a) IN GENERAL.—The Association shall not be 

5 deemed to be an insurer or insurance producer within the 

6 meaning of any State law, rule, regulation, or order regu7 lating or taxing insurers, insurance producers, or other en8 tities engaged in the business of insurance, including pro9 visions imposing premium taxes, regulating insurer sol10 vency or financial condition, establishing guaranty funds 

11 and levying assessments, or requiring claims settlement 

12 practices. 

13 ‘‘(b) LIABILITY OF BOARD MEMBERS, OFFICERS, 

14 AND EMPLOYEES.—No Board member, officer, or em15 ployee of the Association shall be personally liable to any 

16 person for any action taken or omitted in good faith in 

17 any matter within the scope of their responsibilities in con18 nection with the Association. 

19 ‘‘SEC. 329. PRESIDENTIAL OVERSIGHT. 

20 ‘‘(a) REMOVAL OF BOARD.—If the President deter21 mines that the Association is acting in a manner contrary 

22 to the interests of the public or the purposes of this sub23 title or has failed to perform its duties under this subtitle, 

24 the President may remove the entire existing Board for 

25 the remainder of the term to which the Board members 

26 were appointed and appoint, in accordance with section 


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1 324 and with the advice and consent of the Senate, in 

2 accordance with the procedures established under Senate 

3 Resolution 116 of the 112th Congress, new Board mem4 bers to fill the vacancies on the Board for the remainder 

5 of the terms. 

6 ‘‘(b) REMOVAL OF BOARD MEMBER.—The President 

7 may remove a Board member only for neglect of duty or 

8 malfeasance in office. 

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

10 PROHIBITION OF ACTIONS.—Following notice to the 

11 Board, the President, or a person designated by the Presi12 dent for such purpose, may suspend the effectiveness of 

13 any bylaw or standard, or prohibit any action, of the Asso14 ciation that the President or the designee determines is 

15 contrary to the purposes of this subtitle. 

16 ‘‘SEC. 330. RELATIONSHIP TO STATE LAW. 

17 ‘‘(a) PREEMPTION OF STATE LAWS.—State laws, 

18 regulations, provisions, or other actions purporting to reg19 ulate insurance producers shall be preempted to the extent 

20 provided in subsection (b). 

21 ‘‘(b) PROHIBITED ACTIONS.— 

22 ‘‘(1) IN GENERAL.—No State shall— 

23 ‘‘(A) impede the activities of, take any ac24 tion against, or apply any provision of law or 

25 regulation arbitrarily or discriminatorily to, any 


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1 insurance producer because that insurance pro2 ducer or any affiliate plans to become, has ap3 plied to become, or is a member of the Associa4 tion; 

5 ‘‘(B) impose any requirement upon a mem6 ber of the Association that it pay fees different 

7 from those required to be paid to that State 

8 were it not a member of the Association; or 

9 ‘‘(C) impose any continuing education re10 quirements on any nonresident insurance pro11 ducer that is a member of the Association. 

12 ‘‘(2) STATES OTHER THAN A HOME STATE.— 

13 No State, other than the home State of a member 

14 of the Association, shall— 

15 ‘‘(A) impose any licensing, personal or cor16 porate qualifications, education, training, expe17 rience, residency, continuing education, or 

18 bonding requirement upon a member of the As19 sociation that is different from the criteria for 

20 membership in the Association or renewal of 

21 such membership; 

22 ‘‘(B) impose any requirement upon a mem23 ber of the Association that it be licensed, reg24 istered, or otherwise qualified to do business or 

25 remain in good standing in the State, including 


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1 any requirement that the insurance producer 

2 register as a foreign company with the sec3 retary of state or equivalent State official; 

4 ‘‘(C) require that a member of the Associa5 tion submit to a criminal history record check 

6 as a condition of doing business in the State; or 

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

8 appointment requirements upon a member of 

9 the Association, or require a member of the As10 sociation to be authorized to operate as an in11 surance producer, in order to sell, solicit, or ne12 gotiate insurance for commercial property and 

13 casualty risks to an insured with risks located 

14 in more than one State, if the member is li15 censed or otherwise authorized to operate in the 

16 State where the insured maintains its principal 

17 place of business and the contract of insurance 

18 insures risks located in that State. 

19 ‘‘(3) PRESERVATION OF STATE DISCIPLINARY

20 AUTHORITY.—Nothing in this section may be con21 strued to prohibit a State from investigating and 

22 taking appropriate disciplinary action, including sus23 pension or revocation of authority of an insurance 

24 producer to do business in a State, in accordance 

25 with State law and that is not inconsistent with the 


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1 provisions of this section, against a member of the 

2 Association as a result of a complaint or for any al3 leged activity, regardless of whether the activity oc4 curred before or after the insurance producer com5 menced doing business in the State pursuant to As6 sociation membership. 

7 ‘‘SEC. 331. COORDINATION WITH FINANCIAL INDUSTRY 

8 REGULATORY AUTHORITY. 

9 ‘‘The Association shall coordinate with the Financial 

10 Industry Regulatory Authority in order to ease any admin11 istrative burdens that fall on members of the Association 

12 that are subject to regulation by the Financial Industry 

13 Regulatory Authority, consistent with the requirements of 

14 this subtitle and the Federal securities laws . 

15 ‘‘SEC. 332. RIGHT OF ACTION. 

16 ‘‘(a) RIGHT OF ACTION.—Any person aggrieved by 

17 a decision or action of the Association may, after reason18 ably exhausting available avenues for resolution within the 

19 Association, commence a civil action in an appropriate 

20 United States district court, and obtain all appropriate re21 lief. 

22 ‘‘(b) ASSOCIATION INTERPRETATIONS.—In any ac23 tion under subsection (a), the court shall give appropriate 

24 weight to the interpretation of the Association of its by25 laws and standards and this subtitle. 


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1 ‘‘SEC. 333. FEDERAL FUNDING PROHIBITED. 

2 ‘‘The Association may not receive, accept, or borrow 

3 any amounts from the Federal Government to pay for, or 

4 reimburse the Association for, the costs of establishing or 

5 operating the Association. 

6 ‘‘SEC. 334. DEFINITIONS. 

7 ‘‘For purposes of this subtitle, the following defini8 tions shall apply: 

9 ‘‘(1) BUSINESS ENTITY.—The term business 

10 entity means a corporation, association, partnership, 

11 limited liability company, limited liability partner12 ship, or other legal entity. 

13 ‘‘(2) DEPOSITORY INSTITUTION.—The term de14 pository institution has the meaning as in section 3 

15 of the Federal Deposit Insurance Act (12 U.S.C. 

16 1813). 

17 ‘‘(3) HOME STATE.—The term home State 

18 means the State in which the insurance producer 

19 maintains its principal place of residence or business 

20 and is licensed to act as an insurance producer. 

21 ‘‘(4) INSURANCE.—The term insurance means 

22 any product, other than title insurance or bail 

23 bonds, defined or regulated as insurance by the ap24 propriate State insurance regulatory authority. 

25 ‘‘(5) INSURANCE PRODUCER.—The term insur26 ance producer means any insurance agent or broker, 


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1 excess or surplus lines broker or agent, insurance 

2 consultant, limited insurance representative, and any 

3 other individual or entity that sells, solicits, or nego4 tiates policies of insurance or offers advice, counsel, 

5 opinions or services related to insurance. 

6 ‘‘(6) INSURER.—The term insurer has the 

7 meaning as in section 313(e)(2)(B) of title 31, 

8 United States Code . 

9 ‘‘(7) PRINCIPAL PLACE OF BUSINESS.—The 

10 term principal place of business means the State in 

11 which an insurance producer maintains the head12 quarters of the insurance producer and, in the case 

13 of a business entity, where high-level officers of the 

14 entity direct, control, and coordinate the business 

15 activities of the business entity. 

16 ‘‘(8) PRINCIPAL PLACE OF RESIDENCE.—The 

17 term principal place of residence means the State in 

18 which an insurance producer resides for the greatest 

19 number of days during a calendar year. 

20 ‘‘(9) STATE.—The term State includes any 

21 State, the District of Columbia, any territory of the 

22 United States, and Puerto Rico, Guam, American 

23 Samoa, the Trust Territory of the Pacific Islands, 

24 the Virgin Islands, and the Northern Mariana Is25 lands. 


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1 ‘‘(10) STATE LAW.— 

2 ‘‘(A) IN GENERAL.—The term State law 

3 includes all laws, decisions, rules, regulations, 

4 or other State action having the effect of law, 

5 of any State. 

6 ‘‘(B) LAWS APPLICABLE IN THE DISTRICT

7 OF COLUMBIA.—A law of the United States ap8 plicable only to or within the District of Colum9 bia shall be treated as a State law rather than 

10 a law of the United States.’’. 

11 (b) TECHNICAL AMENDMENT.—The table of contents 

12 for the Gramm-Leach-Bliley Act is amended by striking 

13 the items relating to subtitle C of title III and inserting 

14 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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Calendar No. 294 

113TH CONGRESS 

2D SESSION S. 1926 

A BILL 

To delay the implementation of certain provisions 

other purposes. tion of Registered Agents and Brokers, and for Act of 2012 and to reform the National Associaof the Biggert-Waters Flood Insurance Reform 

JANUARY 15, 2014 

Read the second time and placed on the calendar 


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