I

103D CONGRESS

1ST SESSION H. R. 3169

To provide for public access to information regarding the availability of

insurance, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 29, 1993

Mr. KENNEDY (for himself and Mr. GONZALEZ) introduced the following bill;

which was referred to the Committee on Banking, Finance and Urban Affairs

A BILL

To provide for public access to information regarding the

availability of insurance, 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. SHORT TITLE AND TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Insurance Disclosure Act’’.

6 (b) TABLE OF CONTENTS.—

Sec. 1. Short title and table of contents.

Sec. 2. Findings and purposes.

Sec. 3. Establishment of general requirements to submit information.

Sec. 4. Reporting of noncommercial insurance information.

Sec. 5. Study of commercial insurance for residential properties and small businesses.

Sec. 6. Reporting of bid, performance, and payment bonds for small businesses.

Sec. 7. Reporting of rural insurance information.

Sec. 8. Waiver of reporting requirements.
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Sec. 9. Reporting by private mortgage insurers.

Sec. 10. Use of data contractor and statistical agents.

Sec. 11. Reporting of information regarding investments by insurers.

Sec. 12. Submission of information to Secretary and maintenance of information.

Sec. 13. Compilation of aggregate information.

Sec. 14. Availability and access system.

Sec. 15. Designations.

Sec. 16. Improved methods and reporting on basis of other areas.

Sec. 17. Annual reporting period.

Sec. 18. Disclosures by insurers to applicants and policyholders.

Sec. 19. Enforcement.

Sec. 20. Reports.

Sec. 21. Task force on agency appointments.

Sec. 22. Studies.

Sec. 23. Exemption and relation to State laws.

Sec. 24. Regulations.

Sec. 25. Definitions.

Sec. 26. Effective date.

1 SEC. 2. FINDINGS AND PURPOSES.

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

3 (1) there are disparities in insurance coverage

4 provided by some insurers between areas of different

5 incomes and racial composition;

6 (2) such disparities in affordability and avail7 ability of insurance severely limit the ability of quali8 fied consumers to obtain credit for home, business,

9 and automobile purchases; and

10 (3) the lack of affordable and adequate com11 mercial insurance for small businesses severely cur12 tails the establishment and growth of such busi13 nesses.

14 (b) PURPOSES.—The purposes of this Act are—

15 (1) to establish a nationwide database for deter16 mining the availability, affordability, and adequacy
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1 of insurance coverage for consumers and small busi2 nesses;

3 (2) to facilitate the enforcement of Federal and

4 State laws that prohibit illegally discriminatory in5 surance practices; and

6 (3) to determine whether the extent and charac7 teristics of insurance availability, affordability, and

8 coverage require public officials to take any actions

9 (A) to remedy redlining or other illegally or unfairly

10 discriminatory insurance practices, or (B) regarding

11 areas underserved by insurers.

12 (c) CONSTRUCTION.—Nothing in this Act is intended

13 to, nor shall it be construed to, encourage unsound under14 writing practices.

15 SEC. 3. ESTABLISHMENT OF GENERAL REQUIREMENTS TO

16 SUBMIT INFORMATION.

17 (a) IN GENERAL.—The Secretary of Housing and

18 Urban Development shall, by regulation, establish require19 ments for insurers to compile and submit information to

20 the Secretary for each annual reporting period, in accord21 ance with this Act.

22 (b) CONSULTATION.—In establishing the require23 ments for the submission of information under this Act,

24 the Secretary shall consult with Federal agencies having

25 appropriate expertise, the National Association of Insur-
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1 ance Commissioners, State insurance regulators, statis2 tical agents, representatives of small businesses, rep3 resentatives of insurance agents (including minority insur4 ance agents), representatives of property and casualty in5 surers, and community, consumer, and civil rights organi6 zations, as appropriate.

7 SEC. 4. REPORTING OF NONCOMMERCIAL INSURANCE IN8 FORMATION.

9 (a) IN GENERAL.—The requirements established pur10 suant to section 3 to carry out this section shall—

11 (1) be designed to ensure that information is

12 submitted and compiled under this section as may be

13 necessary to permit analysis and comparison of—

14 (A) the availability and affordability of in15 surance coverage and the quality or type of in16 surance coverage, by MSA and applicable re17 gion and race and gender of policyholders; and

18 (B) the location of the principal place of

19 business of insurance agents and the race of

20 such agents, and the location of the principal

21 place of business of insurance agents termi22 nated and the race of such agents, by MSA and

23 applicable region; and
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1 (2) specify the data elements required to be re2 ported under this section and require uniformity in

3 the definitions of the data elements.

4 (b) DESIGNATED INSURERS.—

5 (1) AGGREGATE INFORMATION.—The regula6 tions issued under section 3 shall require that each

7 designated insurer for a designated line of insurance

8 under subparagraph (A) or (B) of section 15(c)(1)

9 compile and submit to the Secretary, for each an10 nual reporting period—

11 (A) the total number of policies issued in

12 such line, total exposures covered by such poli13 cies, and total amount of premiums for such

14 policies, by designated line and by designated

15 MSA and applicable region in which the insured

16 risk is located;

17 (B) the total number of cancellations and

18 nonrenewals (expressed in terms of policies or

19 exposures, as determined by the Secretary), by

20 designated line and by designated MSA and ap21 plicable region in which the insured risk is lo22 cated;

23 (C) the total number and racial character24 istics of—
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1 (i) licensed agents of such insurer sell2 ing insurance in the designated line, by

3 designated MSA and applicable region in

4 which the agent’s principal place of busi5 ness is located; and

6 (ii) such agents who were terminated

7 by the insurer, by designated MSA and ap8 plicable region in which the agent’s prin9 cipal place of business was located; and

10 (D) for such designated line of insurance,

11 information that will enable the Secretary to as12 sess the aggregate loss experience for the in13 surer, by designated MSA and applicable region

14 in which the insured risk is located.

15 (2) SPECIFICATION OF INFORMATION FOR

16 ITEMIZED DISCLOSURE.—

17 (A) IN GENERAL.—The regulations issued

18 under section 3 regarding annual reporting re19 quirements for designated insurers for a des20 ignated line of insurance under subparagraph

21 (A) or (B) of section 15(c)(1) shall, with re22 spect to policies issued under the designated

23 line or exposure units covered by such policies,

24 as determined by the Secretary—
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1 (i) specify the data elements that shall

2 be submitted;

3 (ii) provide for the submission of in4 formation on an individual insurer basis;

5 (iii) provide for the submission of the

6 information with the least burden on insur7 ers, particularly small insurers, and insur8 ance agents;

9 (iv) take into account existing statis10 tical reporting systems in the insurance in11 dustry;

12 (v) require reporting by MSA and ap13 plicable region in which the insured risk is

14 located;

15 (vi) provide for the submission of in16 formation that identifies the designated

17 line, and subline or coverage type;

18 (vii) provide for the submission of in19 formation that distinguishes policies writ20 ten in a residual market from policies writ21 ten in the voluntary market;

22 (viii) specify—

23 (I) whether information shall be

24 submitted on the basis of policy or ex25 posure unit; and
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1 (II) whether information, when

2 submitted, shall be aggregated by like

3 policyholders with like policies, except

4 that the Secretary shall not permit

5 such aggregation if it will adversely

6 affect the accuracy of the information

7 reported;

8 (ix) provide for the submission of in9 formation regarding the number of can10 cellations and nonrenewals of policies

11 under the designated line by MSA and ap12 plicable region in which the insured risk is

13 located, by race and gender of the policy14 holder (if known to the insurer), and by

15 whether the policy was issued in a vol16 untary or residual market; and

17 (x) provide for the submission of in18 formation on the racial characteristics and

19 gender of policyholders at the level of de20 tail comparable to that required by the

21 Home Mortgage Disclosure Act of 1975

22 (and the regulations issued thereunder).

23 (B) RULES REGARDING OBTAINING RACIAL

24 INFORMATION.—With respect to the informa25 tion specified in clause (x), applicants for, and
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1 policyholders of, insurance may be asked their

2 racial characteristics only in writing. Any such

3 written question shall clearly indicate that a re4 sponse to the question is voluntary on the part

5 of the applicant or policyholder, but encour6 aged, and that the information is being re7 quested by the Federal Government to monitor

8 the availability and affordability of insurance. If

9 an applicant for, or policyholder of, insurance

10 declines to provide such information, the agent

11 or insurer for such insurance may provide such

12 information.

13 (3) RULE FOR REPORTING BY DESIGNATED IN14 SURERS.—A designated insurer for a designated line

15 shall submit—

16 (A) information required under subpara17 graphs (A), (B), and (D) of paragraph (1) and

18 information required pursuant to paragraph

19 (2), for risks insured under such line that are

20 located within each designated MSA any part of

21 which is located in a State for which the insurer

22 is designated; and

23 (B) information required under paragraph

24 (1)(C) for agents within such designated

25 MSA’s.
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1 (c) NONDESIGNATED INSURERS.—The regulations is2 sued under section 3 shall require each insurer that issues

3 an insurance policy in a designated line of insurance under

4 subparagraph (A) or (B) of section 15(c)(1) that covers

5 an insured risk located in a designated MSA and which

6 is not a designated insurer for the line in any State in

7 which any part of such MSA is located, to compile and

8 submit to the Secretary, for each annual reporting pe9 riod—

10 (1) the total number of policies issued in such

11 line,

12 (2) the total exposures covered by such policies,

13 and

14 (3) the total amount of premiums for such poli15 cies,

16 by designated MSA and applicable region in which the in17 sured risk is located.

18 SEC. 5. STUDY OF COMMERCIAL INSURANCE FOR RESIDEN19 TIAL PROPERTIES AND SMALL BUSINESSES.

20 (a) IN GENERAL.—The Secretary shall conduct a

21 study to determine the availability, affordability, and qual22 ity or types of commercial insurance coverage for residen23 tial properties and small businesses, in urban areas.

24 (b) SUBMISSION OF INFORMATION.—To acquire in25 formation for the study under this section, the Secretary
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1 shall, by regulation, establish requirements for insurers

2 providing commercial insurance for residential properties

3 and small businesses to compile and submit to the Sec4 retary on an annual basis information regarding such in5 surance, as follows:

6 (1) MSA’S.—The Secretary shall carry out the

7 study only with respect to the 25 MSA’s having the

8 largest populations, as determined by the Secretary

9 and specified in the regulations under this section.

10 (2) INSURERS.—For each of the MSA’s speci11 fied pursuant to paragraph (1), the Secretary shall

12 designate the insurers required to submit the infor13 mation. The Secretary shall designate a sufficient

14 number of insurers to provide a representative sam15 ple of the insurers providing such insurance in each

16 such MSA.

17 (3) LINES OF INSURANCE.—The Secretary shall

18 require the submission of information regarding

19 such lines, sublines, or coverage types of commercial

20 insurance as the Secretary determines are necessary

21 or important with respect to establishing, operating,

22 or maintaining residential properties and each type

23 of small business selected under paragraph (4), and

24 shall require submission of such information by such

25 lines, sublines, or coverage types.
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1 (4) SMALL BUSINESSES.—For purposes of

2 paragraph (3), the Secretary shall determine the

3 types of businesses that are typically small busi4 nesses and shall select a representative sample of

5 such types.

6 (5) DATA ELEMENTS.—The Secretary shall

7 identify the data elements required to be submitted.

8 (6) SUBMISSION BY LOCATION.—The Secretary

9 shall require the information to be submitted by des10 ignated MSA and applicable region in which the in11 sured risk is located.

12 (7) SUBMISSION BY INSURER.—The Secretary

13 shall require the submission of information on an in14 dividual insurer basis and shall specify whether in15 formation, when submitted, shall be aggregated by

16 like policies, except that the Secretary shall not per17 mit such aggregation if it will adversely affect the

18 accuracy of the information reported.

19 (8) SUNSET.—The Secretary shall require the

20 submission of information under this section only for

21 each of the first 5 annual reporting periods begin22 ning more than 36 months after the date of the en23 actment of this Act.
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1 (c) CONSIDERATIONS.—In establishing the require2 ments for submission of information under this section,

3 the Secretary shall—

4 (1) take into consideration the administrative,

5 paperwork, and other burdens on insurers and insur6 ance agents involved in complying with the require7 ments of this section;

8 (2) minimize the burdens imposed by such re9 quirements with respect to such insurers and agents;

10 and

11 (3) take into consideration existing statistical

12 reporting systems in the insurance industry.

13 (d) REPORT.—Not later than 6 months after the ex14 piration of the 5-year period referred to in subsection

15 (b)(8), the Secretary shall submit a report to the Congress

16 describing the information submitted under the study con17 ducted under this section and any findings of the Sec18 retary from the study regarding disparities in the avail19 ability, affordability, and quality or types of commercial

20 insurance coverage for residential properties and small

21 businesses, in urban areas.

22 SEC. 6. REPORTING OF BID, PERFORMANCE, AND PAYMENT

23 BONDS FOR SMALL BUSINESSES.

24 (a) IN GENERAL.—The Secretary shall by regulation

25 establish requirements in accordance with section 3 for in-
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1 surers to compile and submit to the Secretary, for each

2 annual reporting period, information regarding bid, per3 formance, and payment bonds for small businesses, by

4 lines designated under subparagraph (C) of section

5 15(c)(1), that is similar to the information required to be

6 submitted under section 4.

7 (b) CONTENTS.—The regulations under this section

8 shall provide for—

9 (1) designation of insurers required to submit

10 the information, pursuant to standards comparable

11 to the standards for designation under section 15(b),

12 and submission of the information on an individual

13 insurer basis;

14 (2) identification of data elements required to

15 be submitted;

16 (3) the information to be submitted by des17 ignated MSA and applicable region;

18 (4) the information to be submitted in a man19 ner similar to that required for information submit20 ted under section 4;

21 (5) an appropriate definition of small busi22 nesses; and

23 (6) the information to be submitted for each

24 annual reporting period.
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1 SEC. 7. REPORTING OF RURAL INSURANCE INFORMATION.

2 (a) IN GENERAL.—The Secretary shall, by regula3 tion, establish requirements for insurers to annually com4 pile and submit to the Secretary information concerning

5 the availability, affordability, and quality or type of insur6 ance in designated rural areas in the lines designated

7 under subparagraphs (A) and (B) of section 15(c)(1).

8 (b) CONTENT.—The regulations under this section

9 shall provide that—

10 (1) the information to be compiled and submit11 ted under this section by designated insurers and in12 surers that are not designated insurers shall be of

13 such types, data elements, and specificity that is as

14 identical as possible to the types, data elements, and

15 specificity of information required under this Act of

16 designated and nondesignated insurers, respectively,

17 for designated MSA’s and shall be subject to the

18 provisions of section 4(b)(2)(B); and

19 (2) the information compiled and submitted

20 under this section shall be compiled and submitted

21 on the basis of each 5-digit zip code in which the in22 sured risks are located, rather than on the basis of

23 designated MSA and applicable region (as otherwise

24 required in this Act).
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1 (c) DESIGNATION OF RURAL AREAS.—For purposes

2 of this section, the term ‘‘designated rural area’’ means

3 the following:

4 (1) FIRST 5 YEARS.—With respect to the first

5 5 annual reporting periods to which the reporting re6 quirements under this section apply, any of the 50

7 rural areas designated by the Secretary and speci8 fied in regulations issued pursuant to section 24,

9 which shall not be amended or revised after issu10 ance. The Secretary shall (to the extent possible)

11 designate 1 rural area under this paragraph in each

12 State of the United States.

13 (2) AFTER FIRST 5 YEARS.—With respect to

14 annual reporting periods thereafter, a rural area for

15 which a designation made by the Secretary under

16 this paragraph is in effect, pursuant to the following

17 requirements:

18 (A) The designations shall be made for

19 each of the successive 5-year periods at the

20 time provided in subparagraph (C), and the

21 first such period shall be the 5-year period be22 ginning upon the commencement of the 6th an23 nual reporting period to which the reporting re24 quirements under this Act apply.
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1 (B) The Secretary shall designate 50 rural

2 areas as designated rural areas for each such 5-

3 year period and shall designate such rural areas

4 based upon the information and recommenda5 tions made in the report under section 20(b) re6 lating to the period.

7 (C) The Secretary shall make the designa8 tion of rural areas for an ensuing 5-year period

9 by regulations issued—

10 (i) not later than the date occurring

11 12 months before the commencement of

12 the 5-year period; and

13 (ii) not later than 6 months after the

14 submission to the Secretary of the report

15 under section 20(b) relating to such pe16 riod.

17 (D) The designations for a 5-year period

18 shall take effect upon the commencement of the

19 first annual reporting period of the 5-year pe20 riod that begins at least 12 months after the is21 suance of the regulations making such designa22 tions, and shall remain in effect until the expi23 ration of the 5-year period.

24 Notwithstanding any other provision of this section, the

25 designation of a rural area shall remain in effect until a
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1 succeeding designation of rural areas under paragraph (2)

2 takes effect.

3 SEC. 8. WAIVER OF REPORTING REQUIREMENTS.

4 (a) WAIVER FOR STATES COLLECTING EQUIVALENT

5 INFORMATION.—

6 (1) AUTHORITY.—Subject to the requirements

7 under this section, the Secretary shall provide, by

8 regulation, for the waiver of the applicability of the

9 provisions of sections 4, 5, and 7 for each insurer

10 transacting business within a State referred to in

11 paragraph (2), but only with respect to information

12 required to be submitted under such sections that

13 relates to agents or insured risks located in the

14 State.

15 (2) REQUIREMENTS.—The Secretary may make

16 a waiver pursuant to paragraph (1) only with re17 spect to a State that the Secretary determines has

18 in effect a law or other requirement that—

19 (A) requires insurers to submit to the

20 State information that is at least the same or

21 equivalent to the information that is required to

22 be submitted to the Secretary pursuant to sec23 tions 4, 5, and 7;

24 (B) provides for adequate enforcement of

25 such law or other requirements;
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1 (C) provides for the same annual reporting

2 period used by the Secretary under this Act and

3 for submission of the information to the Sec4 retary in a timely fashion, as determined by the

5 Secretary; and

6 (D) provides that, to the extent statistical

7 agents are permitted to submit information to

8 the State on behalf of insurers, such agents are

9 subject to the same or equivalent requirements

10 as provided under section 10(b).

11 (3) DURATION.—A waiver pursuant to para12 graph (1) may remain in effect only during the pe13 riod for which the State law or other requirement re14 quired under paragraph (2) remains in effect.

15 (b) MULTIPLE-STATE MSA’S.—In the case of any

16 designated MSA that contains area within (1) any State

17 for which a waiver has been made pursuant to subsection

18 (a), and (2) any State for which such a waiver has not

19 been made, the provisions of this Act requiring submission

20 of information to the Secretary regarding such MSA shall

21 be considered to apply only to the portion of such MSA

22 that is located within the State for which such a waiver

23 has not been made.

24 (c) AUTHORITY FOR SECRETARY TO OBTAIN INFOR25 MATION DIRECTLY FROM INSURERS.—If the State for
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1 which a waiver has been made pursuant to subsection (a)

2 does not submit to the Secretary the information required

3 under subsection (a)(2)(A) or submits information that is

4 not complete, the Secretary shall require the insurers

5 transacting business within the State to submit such infor6 mation directly to the Secretary.

7 SEC. 9. REPORTING BY PRIVATE MORTGAGE INSURERS.

8 (a) HMDA REPORTING.—On an annual basis, the

9 Financial Institutions Examination Council shall deter10 mine the extent to which each insurer providing private

11 mortgage insurance is making available to the public and

12 submitting to the appropriate agency information regard13 ing such insurance that is equivalent to the information

14 regarding mortgages required to be reported under the

15 Home Mortgage Disclosure Act of 1975.

16 (b) REPORTING UNDER THIS ACT.—

17 (1) CERTIFICATION OF NONCOMPLIANCE.—If,

18 for any annual period referred to in subsection (a),

19 such Council determines that any insurer providing

20 private mortgage insurance is not making available

21 to the public or submitting the information referred

22 to in subsection (a) or that the information made

23 available or submitted is not equivalent information

24 as described in subsection (a), then the Council shall

25 notify the insurer of such noncompliance. If, after
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1 the expiration of a reasonable period of time, the in2 surer has not remedied such noncompliance to the

3 satisfaction of the Council, then the Council shall

4 immediately certify such noncompliance to the Sec5 retary.

6 (2) REQUIREMENT.—Upon the receipt of a cer7 tification under paragraph (1), the Secretary shall,

8 by regulation, require such insurer to submit to the

9 Secretary information regarding such insurance that

10 complies with the provisions of section 4 that are ap11 plicable to such insurance. Such regulations shall be

12 issued not later than 6 months after receipt of such

13 certification and shall apply to the first succeeding

14 annual reporting period that begins at least 6

15 months after issuance of such regulations and to

16 each annual reporting period thereafter.

17 SEC. 10. USE OF DATA CONTRACTOR AND STATISTICAL

18 AGENTS.

19 (a) DATA COLLECTION CONTRACTOR.—The Sec20 retary may contract with a data collection contractor to

21 collect the information required to be maintained and sub22 mitted under sections 4, 5, 7, 8, 9(b), and 11 if the con23 tractor agrees to collect the information pursuant to the

24 terms and conditions of such sections and this Act and

25 the regulations issued thereunder. Information submitted
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1 to such contractor shall be available to the public to the

2 same extent as if the information were submitted directly

3 to the Secretary.

4 (b) USE OF STATISTICAL AGENTS.—

5 (1) IN GENERAL.—The Secretary shall provide,

6 by regulation, that insurers may submit any infor7 mation required under sections 4, 5, 7, and 9(b)

8 through statistical agents acting on behalf of more

9 than one insurer.

10 (2) PROTECTIONS.—The regulations issued

11 under this subsection shall permit submission of in12 formation through a statistical agent only if the Sec13 retary determines that—

14 (A) the statistical agent has adequate pro15 cedures to protect the integrity of the informa16 tion submitted;

17 (B) the statistical agent has a statistical

18 plan and format for submitting the information

19 that meets the requirements of this Act;

20 (C) the statistical agent has procedures in

21 place that ensure that information reported

22 under the statistical plan in connection with re23 porting under this Act and submitted to the

24 Secretary is not subject to any adjustment by

25 the statistical agent or an insurer for reasons
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1 other than technical accuracy and conformance

2 to the statistical plan;

3 (D) the information of an insurer is not

4 subject to review by any other insurer before

5 being made available to the public; and

6 (E) acceptance of the information through

7 the statistical agent will not adversely affect the

8 accuracy of the information reported.

9 (3) DISCONTINUANCE OF ACCEPTANCE OF IN10 FORMATION.—The Secretary may discontinue ac11 cepting information reported through a statistical

12 agent pursuant to this subsection if the Secretary

13 determines that the requirements for such reporting

14 are no longer met or that continued acceptance of

15 such information is contrary to the goal of ensuring

16 the accuracy of the information reported.

17 (4) GAO AUDITS.—The Comptroller General

18 shall, at the request of the Secretary, audit informa19 tion collection and submission performed under this

20 subsection by data collection contractors or statis21 tical agents to ensure that the integrity of the infor22 mation collected and submitted is protected. In de23 termining whether to request an audit of a statis24 tical agent, the Secretary shall consider the suffi25 ciency (for purposes of this Act) of audits of the sta-
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1 tistical agent conducted in connection with State in2 surance regulation.

3 (5) LIABILITY.—Notwithstanding any use of a

4 statistical agent as authorized under this subsection,

5 an insurer using such an agent shall be responsible

6 for compliance with the requirements under this Act.

7 SEC. 11. REPORTING OF INFORMATION REGARDING IN8 VESTMENTS BY INSURERS.

9 (a) IN GENERAL.—The Secretary of Housing and

10 Urban Development shall, by regulation, require that each

11 designated insurer that makes a designated investment in

12 a property or business located in a designated MSA shall

13 compile and submit to the Secretary for each annual re14 porting period, the following information:

15 (1) DIRECT LOANS.—

16 (A) COMMERCIAL REAL ESTATE LOANS.—

17 The total number of loans for the purchase of

18 commercial real estate made by the designated

19 insurer, the aggregate amount of such loans,

20 and the amount of each such loan, by des21 ignated MSA and applicable region in which the

22 real estate for which the loan was made is lo23 cated.

24 (B) SINGLE-FAMILY MORTGAGES.—The

25 total number of mortgage loans for the pur-
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1 chase of 1- to 4-family dwellings made by the

2 designated insurer, the aggregate amount of

3 such loans, and the amount of each such loan,

4 by designated MSA and applicable region in

5 which the dwelling for which the loan was made

6 is located, which information shall be

7 disaggregated by racial characteristics, income

8 level, and gender of the borrower under the

9 loan.

10 (C) COMMERCIAL AND INDUSTRIAL

11 LOANS.—The total number of commercial and

12 industrial loans made by the designated insurer,

13 the aggregate amount of such loans, and the

14 amount of each such loan, by designated MSA

15 and applicable region in which the property or

16 business involved in the loan is located, which

17 information shall be disaggregated by the size

18 of business of the borrower under the loan and

19 by the ownership characteristic of the business,

20 which shall be classified as either minority21 owned, women-owned, or otherwise-owned.

22 (2) LOAN PURCHASES.—

23 (A) COMMERCIAL REAL ESTATE LOANS.—

24 The total number of loans for the purchase of

25 commercial real estate purchased by the des-
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1 ignated insurer, the aggregate amount of such

2 loans, and the amount of each such loan, by

3 designated MSA and applicable region in which

4 the real estate for which the loan was made is

5 located.

6 (B) SINGLE-FAMILY MORTGAGES.—The

7 total number of mortgage loans for the pur8 chase of 1- to 4-family dwellings purchased by

9 the designated insurer, the aggregate amount of

10 such loans, and the amount of each such loan,

11 by designated MSA and applicable region in

12 which the dwelling for which the loan was made

13 is located, which information shall be

14 disaggregated by racial characteristics, income

15 level, and gender of the borrower under the

16 loan.

17 (C) COMMERCIAL AND INDUSTRIAL

18 LOANS.—The total number of commercial and

19 industrial loans purchased by the designated in20 surer, the aggregate amount of such loans, and

21 the amount of each such loan, by designated

22 MSA and applicable region in which the prop23 erty or business involved in the loan is located,

24 which information shall be disaggregated by the

25 size of business of the borrower under the loan
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1 and by the ownership characteristic of the busi2 ness, which shall be classified as either minor3 ity-owned, women-owned, or otherwise-owned.

4 (3) OTHER INVESTMENTS.—For such other in5 vestments made by the designated insurer, as the

6 Secretary may designate pursuant to subsection (b),

7 the total number of such investments, the aggregate

8 amount of such investments, and the amount of each

9 such investment, by designated MSA and applicable

10 region in which the property or business involved in

11 the investment is located, as determined by the Sec12 retary, which information shall be disaggregated by

13 the size of business of the borrower under the loan

14 and by the ownership characteristic of the business,

15 which shall be classified as either minority-owned,

16 women-owned, or otherwise-owned.

17 (b) DESIGNATION OF OTHER INVESTMENTS.—

18 (1) IN GENERAL.—For purposes of subsection

19 (a)(3), the Secretary may designate activities and in20 vestments other than the investments described in

21 paragraphs (1) and (2) of subsection (a) for which

22 designated insurers shall compile and submit infor23 mation under this section.

24 (2) REQUIREMENT.—In making designations

25 under this subsection, the Secretary shall designate
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1 (A) activities and investments that significantly ben2 efit low- and moderate-income families and persons,

3 small businesses in distressed communities, or

4 minority- or women-owned businesses, and (B) ac5 tivities and investments that contribute to the cre6 ation of jobs and economic development of distressed

7 communities.

8 (3) CONSIDERATIONS.—The Secretary shall

9 specifically consider for designation under this sub10 section investments in community development fi11 nancial institutions, community development cor12 porations, State-issued bonds, and securities backed

13 by State development funds.

14 (c) SIZE OF BUSINESS.—The Secretary shall, by reg15 ulation, establish various categories of the sizes of busi16 nesses, for purposes of disaggregating information under

17 paragraphs (1)(C), (2)(C), and (3) of subsection (a) by

18 various sizes of businesses.

19 SEC. 12. SUBMISSION OF INFORMATION TO SECRETARY

20 AND MAINTENANCE OF INFORMATION.

21 (a) PERIOD OF MAINTENANCE.—Each insurer re22 quired by this Act to compile and submit information to

23 the Secretary shall maintain such information for the 3-

24 year period beginning upon the conclusion of the annual

25 reporting period to which such information relates. The
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1 Secretary shall maintain any information submitted to the

2 Secretary for such period as the Secretary considers ap3 propriate and feasible to carry out the purposes of this

4 Act and to allow for historical analysis and comparison

5 of the information.

6 (b) SUBMISSION.—The Secretary shall issue regula7 tions prescribing a standard schedule (taking into consid8 eration the provisions of section 14(a)), format, and meth9 od for submitting information under this Act to the Sec10 retary. The format and method of submitting the informa11 tion shall facilitate and encourage the submission in a

12 form readable by a computer. Any insurer submitting in13 formation to the Secretary may submit in writing to the

14 Secretary any additional information or explanations that

15 the insurer considers relevant to the decision by the in16 surer to sell insurance.

17 SEC. 13. COMPILATION OF AGGREGATE INFORMATION.

18 (a) INSURANCE INFORMATION.—For each annual re19 porting period, the Secretary shall—

20 (1) compile, for each designated MSA, by des21 ignated line (and if such information is submitted,

22 by subline or coverage type)—

23 (A) information submitted under sections

24 4, 5, 8, and 9(b) and loss ratios (if the submis25 sion of loss information is required), aggregated
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1 by applicable region for all insurers submitting

2 such information; and

3 (B) such information and loss ratios (if the

4 submission of loss information is required), ag5 gregated by applicable region for each such in6 surer; and

7 (2) produce tables based on information submit8 ted under sections 4, 5, 8, and 9(b) for each des9 ignated MSA, by insurer and for all insurers, by des10 ignated line (and if such information is submitted,

11 by subline or coverage type), indicating—

12 (A) insurance underwriting patterns aggre13 gated for the applicable regions within the

14 MSA, grouped according to location, age of

15 property, income level, and racial characteristics

16 of neighborhoods; and

17 (B) loss ratios based on the information

18 obtained pursuant to sections 4, 5, 8, and 9(b)

19 (if the submission of loss information is re20 quired), aggregated for the applicable regions

21 within the MSA, grouped according to location,

22 age of property, income level, and racial charac23 teristics of neighborhoods.

24 (b) AGENT INFORMATION.—For each annual report25 ing period and for each designated MSA, the Secretary
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1 shall compile, by designated line, the information submit2 ted under section 4(b)(1)(C)—

3 (1) by designated insurer by applicable region;

4 (2) by designated insurer aggregated for the

5 applicable regions within the designated MSA,

6 grouped according to location, age of property, in7 come level, and racial characteristics; and

8 (3) for all designated insurers that have submit9 ted such information for the designated MSA, aggre10 gated for the applicable regions within the des11 ignated MSA, grouped according to location, age of

12 property, income level, and racial characteristics.

13 (c) RURAL INSURANCE INFORMATION.—For each an14 nual reporting period, the Secretary shall—

15 (1) compile for each applicable 5-digit zip code,

16 by designated line (and if such information is sub17 mitted, by subline or coverage type)—

18 (A) information regarding insurance in

19 rural areas submitted under sections 7 and 8

20 and loss ratios, for all insurers for which such

21 information is submitted; and

22 (B) such information and loss ratios, for

23 each such insurer; and

24 (2) produce tables for each 5-digit zip code

25 based on information regarding insurance in rural
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1 areas submitted under sections 7 and 8, by insurer

2 and for all such insurers for which information is

3 submitted under such sections, by designated line

4 (and if such information is submitted, by subline or

5 coverage type), indicating—

6 (A) insurance underwriting patterns, ag7 gregated by zip codes, grouped according to lo8 cation, age of property, income level, and racial

9 characteristics of neighborhoods (where such

10 demographic information is available); and

11 (B) loss ratios, based on the information

12 obtained pursuant to sections 7 and 8, aggre13 gated by zip codes, grouped according to loca14 tion, age of property, income level, and racial

15 characteristics of neighborhoods (where such

16 demographic information is available).

17 (d) INVESTMENT INFORMATION.—For each annual

18 reporting period, the Secretary shall—

19 (1) compile the information submitted under

20 section 11, for each designated MSA—

21 (A) aggregated by applicable region for all

22 insurers, by designated investment; and

23 (B) aggregated by applicable region for

24 each insurer, by designated investment; and
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1 (2) produce tables for each designated MSA, for

2 each insurer and for all insurers, indicating patterns

3 of designated investments, which shall be aggregated

4 by applicable region, grouped according to racial

5 characteristics, income level, and gender of the bor6 rower or size of business of the borrower and owner7 ship characteristic of the business, as applicable.

8 SEC. 14. AVAILABILITY AND ACCESS SYSTEM.

9 (a) AVAILABILITY TO PUBLIC.—

10 (1) IN GENERAL.—The Secretary shall main11 tain and make available to the public, in accordance

12 with the requirements of this section, any informa13 tion submitted to the Secretary under this Act and

14 any information compiled by the Secretary under

15 this Act.

16 (2) TIMING.—The Secretary shall make such

17 information publicly available on a timetable deter18 mined by the Secretary, but not later than 9 months

19 after the conclusion of the annual reporting period

20 to which the information relates, except that such

21 information shall not be made available to the public

22 until it is available in its entirety unless not all the

23 information required to be reported is available by

24 such date.

25 (b) PUBLIC ACCESS SYSTEM.—
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1 (1) IMPLEMENTATION.—The Secretary shall

2 implement a system to facilitate access to any infor3 mation required to be made available to the public

4 under this Act.

5 (2) BASES OF AVAILABILITY.—The system shall

6 provide access in the following manners:

7 (A) ACCESS TO ITEMIZED INFORMATION.—

8 To information submitted under sections 4, 5,

9 7, 8, 9(b), and 11 on the basis of the insurer

10 submitting the information, on the basis of des11 ignated MSA and applicable region (or in the

12 case of rural information submitted under sec13 tion 7 or 8, on the basis of 5-digit zip code),

14 and on any other basis the Secretary considers

15 feasible and appropriate.

16 (B) ACCESS TO AGGREGATE INFORMA17 TION.—To aggregate information compiled

18 under section 13, on the basis of (i) the insurer

19 submitting the information, and (ii) designated

20 MSA and applicable region (or in the case of

21 rural information submitted under section 7 or

22 8, on the basis of 5-digit zip code), and on any

23 other basis the Secretary considers feasible and

24 appropriate.
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1 (3) METHOD.—The access system shall include

2 a toll-free telephone number that can be used by the

3 public to request such information and the address

4 at which a written request for such information may

5 be submitted.

6 (4) FORM.—The Secretary shall, by regulation,

7 establish the forms in which such information may

8 be furnished by the Secretary. Such forms shall in9 clude written statements, forms readable by widely

10 used personal computers, and, if feasible, on-line ac11 cess for personal computers. The Secretary shall

12 provide the information available under this section

13 in any such form requested by the person requesting

14 the information, except that the Secretary may

15 charge a fee for providing such information, which

16 may not exceed the amount, determined by the Sec17 retary, that is equal to the cost of reproducing the

18 information.

19 (5) ANALYSIS SOFTWARE.—The Secretary shall

20 make available to the public software that can be

21 used on a personal computer to analyze the informa22 tion provided under this section. The software shall

23 be capable of analyzing the information by insurer,

24 designated line, race, gender, MSA, and applicable

25 region. It shall also contain data compiled by the
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1 Secretary for each MSA and applicable region on in2 come levels, age of property, and racial characteris3 tics that can be used to evaluate the information

4 provided under this Act by insurers. The software

5 and any accompanying data shall be made available

6 to the public without charge, except for an amount,

7 determined by the Secretary, which shall not exceed

8 the actual cost of reproducing the software and the

9 accompanying data.

10 (c) PROTECTIONS REGARDING LOSS INFORMA11 TION.—

12 (1) PROHIBITION OF DISCLOSURE OF LOSS IN13 FORMATION.—Notwithstanding any other provision

14 of this Act, the Secretary may not make available to

15 the public or otherwise disclose any information sub16 mitted under this Act regarding the amount or num17 ber of claims paid by any insurer, the amount of

18 losses of any insurer, or the loss experience for any

19 insurer, except (A) in the form of a loss ratio (ex20 pressing the relationship of claims paid to pre21 miums) made available or disclosed in compliance

22 with the provisions of paragraph (2), or (B) as pro23 vided in paragraph (3).
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1 (2) PROTECTION OF IDENTITY OF INSURER.—

2 In making available to the public or otherwise dis3 closing a loss ratio for an insurer—

4 (A) the Secretary may not identify the in5 surer to which the loss ratio relates; and

6 (B) the Secretary may disclose the loss

7 ratio only in a manner that does not allow any

8 party to determine the identity of the specific

9 insurer to which the loss ratio relates, except

10 parties having access to information under

11 paragraph (3).

12 (3) CONFIDENTIALITY OF INFORMATION DIS13 CLOSED TO GOVERNMENTAL AGENCIES.—The Sec14 retary may make information referred to in para15 graph (1) and the identity of the specific insurer to

16 which such information relates available to any Fed17 eral entity and any State agency responsible for reg18 ulating insurance in a State and may otherwise dis19 close such information to any such entity or agency,

20 but only to the extent such entity or agency agrees

21 not to make any such information available or dis22 close such information to any other person.
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1 SEC. 15. DESIGNATIONS.

2 (a) DESIGNATION OF MSA’S.—For purposes of this

3 Act, the term ‘‘designated MSA’’ means the following

4 MSA’s:

5 (1) FIRST 5 YEARS.—With respect to the first

6 5 annual reporting periods to which the reporting re7 quirements under this Act apply (pursuant to sec8 tion 26), any of the 150 MSA’s selected as follows:

9 (A) The Secretary shall select the 50

10 MSA’s having the largest populations, as deter11 mined by the Secretary and specified in regula12 tions issued pursuant to section 24, which shall

13 not be amended or revised after issuance.

14 (B) The Secretary shall select 100 addi15 tional MSA’s, on a basis that provides for (i)

16 geographic diversity among the designated

17 MSA’s under this paragraph, and (ii) diversity

18 in size of the populations among such MSA’s.

19 (2) AFTER FIRST 5 YEARS.—With respect to

20 annual reporting periods thereafter, an MSA for

21 which a designation under this paragraph is in ef22 fect, pursuant to the following requirements:

23 (A) The designations shall be made for

24 each of the successive 5-year periods at the

25 time provided in subparagraph (C), and the

26 first such period shall be the 5-year period be-
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1 ginning upon the commencement of the 6th an2 nual reporting period to which the reporting re3 quirements under this Act apply.

4 (B) The Secretary shall designate not less

5 than 150 MSA’s as designated MSA’s for each

6 such 5-year period and shall designate such

7 MSA’s based upon the information and rec8 ommendations made in the report under section

9 20(b) relating to the period.

10 (C) The Secretary shall make the designa11 tion of MSA’s for an ensuing 5-year period by

12 regulations issued—

13 (i) not later than the date occurring

14 12 months before the commencement of

15 the 5-year period; and

16 (ii) not later than 6 months after the

17 submission to the Secretary of the report

18 under section 20(b) relating to such pe19 riod.

20 (D) The designations for a 5-year period

21 shall take effect upon the commencement of the

22 first annual reporting period of the 5-year pe23 riod that begins at least 12 months after the is24 suance of the regulations making such designa-
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1 tions, and shall remain in effect until the expi2 ration of the 5-year period.

3 Notwithstanding any other provision of this section, the

4 designation of an MSA shall remain in effect until a suc5 ceeding designation of MSA’s under paragraph (2) takes

6 effect.

7 (b) DESIGNATION OF INSURERS.—The Secretary

8 shall designate, for each designated line and each State,

9 insurers doing business in the lines as designated insurers

10 in the State for purposes of this Act, subject to the follow11 ing requirements:

12 (1) HIGHEST AGGREGATE PREMIUM VOLUME.—

13 (A) GENERAL RULE.—For a State, the

14 Secretary shall designate, for each designated

15 line, each of the insurers and insurer groups in16 cluded in the class established under this para17 graph for the State.

18 (B) DETERMINATION.—In the State, the

19 Secretary shall rank the insurers and insurer

20 groups in each designated line from the insurer

21 or group having the largest aggregate premium

22 volume in the State for such line to the insurer

23 or group having the smallest such aggregate

24 premium volume and shall include in the class

25 for the State only (i) the insurer or group of
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1 the highest rank, and (ii) each insurer or group

2 of successively lower rank if the inclusion of

3 such insurer or group in the class does not re4 sult in the sum of such aggregate premium vol5 umes for insurers and groups in the class ex6 ceeding 80 percent of the total aggregate pre7 mium volume in the State for the line, and (iii)

8 the first such successively lower ranked insurer

9 or insurer group whose inclusion in the class re10 sults in such sum exceeding 80 percent of the

11 total aggregate premium volume in the State

12 for the line.

13 (2) MINIMUM AGGREGATE PREMIUM VOLUME.—

14 For a State, the Secretary shall designate, for each

15 designated line, each insurer and insurer group not

16 designated pursuant to paragraph (1) whose pre17 mium volume in the State for the designated line ex18 ceeds 1 percent of the total aggregate premium vol19 ume in the State for the line.

20 (3) FAIR PLANS AND JOINT UNDERWRITING

21 ASSOCIATIONS.—For a State, the Secretary shall

22 designate, for each designated line—

23 (A) each statewide plan under part A of

24 title XII of the National Housing Act to assure

25 fair access to insurance requirements, and
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1 (B) each joint underwriting association,

2 that provides insurance under such line.

3 (4) DURATION.—The Secretary shall designate

4 insurers under this subsection once every 5 years.

5 Each insurer designated shall be a designated in6 surer for each of the first 5 successive annual re7 porting periods commencing after such designation.

8 (c) DESIGNATION OF LINES OF INSURANCE.—

9 (1) IN GENERAL.—The Secretary shall, by reg10 ulation, designate lines of insurance as designated

11 lines for purposes of this Act, as follows:

12 (A) AUTOMOBILE.—The Secretary shall

13 designate private passenger automobile insur14 ance and shall also designate any sublines and

15 coverage types of private passenger automobile

16 insurance that the Secretary considers appro17 priate to determine and compare the availabil18 ity, affordability, and type of coverage in such

19 line among applicable regions.

20 (B) NONCOMMERCIAL INSURANCE FOR

21 RESIDENTIAL PROPERTY.—The Secretary shall

22 designate homeowners insurance and dwelling

23 fire and allied lines, and shall distinguish the

24 coverage types in such lines by the perils cov25 ered and by market or replacement value. For
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1 purposes of this Act, homeowners insurance

2 shall not include any renters coverage or cov3 erage for the personal property of a condomin4 ium owner.

5 (C) BID, PERFORMANCE, AND PAYMENT

6 BONDS FOR SMALL BUSINESSES.—The Sec7 retary shall designate lines, and any sublines

8 and coverage types, of bid, performance, and

9 payment bonds for small businesses, for which

10 reporting is required pursuant to section 6, that

11 the Secretary considers appropriate to deter12 mine and compare the availability, affordability,

13 and quality or type of coverage in bid, perform14 ance, and payment bonds for small businesses

15 among applicable regions.

16 (2) REPORT.—At any time the Secretary deter17 mines that any line of insurance not described in

18 paragraph (1) should be a designated line because

19 disparities in coverage provided under such line exist

20 among geographic areas having different income lev21 els or racial composition, the Secretary shall submit

22 a report recommending designating such line of in23 surance as a designated line for purposes of this Act

24 to the Committee on Banking, Finance and Urban
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1 Affairs of the House of Representatives and the ap2 propriate Committees of the Senate.

3 (3) DURATION.—

4 (A) IN GENERAL.—Except as provided in

5 subparagraph (B), the Secretary shall make the

6 designations under this subsection once every 5

7 years, by regulation, and each line and subline

8 or coverage type designated under such regula9 tions shall be designated for each of the first 5

10 successive annual reporting periods occurring

11 after issuance of the regulations.

12 (B) ALTERATION.—During any 5-year pe13 riod referred to in subparagraph (A) in which

14 designations are in effect, the Secretary may

15 amend or revise the designated lines, sublines,

16 and coverage types only by regulation and only

17 in accordance with the requirements of this

18 subsection. Such regulations amending or revis19 ing designations shall apply only to annual re20 porting periods beginning after the expiration

21 of the 6-month period beginning on the date of

22 issuance of the regulations.

23 (d) TIMING OF DESIGNATIONS.—The Secretary shall

24 make the designations required by subsections (b)(4) and

25 (c)(3)(A) and notify interested parties during the 6-month
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1 period ending 6 months before the commencement of the

2 first annual reporting period to which such designations

3 apply.

4 (e) OBTAINING INFORMATION.—The Secretary may

5 require insurers to submit to the Secretary such informa6 tion as the Secretary considers necessary to make designa7 tions specifically required under this Act. The Secretary

8 may not require insurers to submit any information under

9 this subsection that relates to any line of insurance not

10 specifically authorized to be designated pursuant to this

11 Act or that is to be used solely for the purpose of a report

12 under subsection (c)(2).

13 SEC. 16. IMPROVED METHODS AND REPORTING ON BASIS

14 OF OTHER AREAS.

15 (a) DEVELOPMENT OF IMPROVED METHODS.—The

16 Secretary shall develop, or assist in the improvement of,

17 methods of matching addresses and applicable regions to

18 facilitate compliance by insurers, in as economical a man19 ner as possible, with the requirements of this Act. The

20 Secretary shall allow insurers, or statistical agents acting

21 on behalf of insurers, to match addresses and applicable

22 regions through the use of 9-digit zip codes if the Sec23 retary determines that such use will substantially reduce

24 the cost and burden to insurers of such matching without
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1 significant adverse impact on the reliability of the match2 ing.

3 (b) ADDRESS CONVERSION SOFTWARE.—The Sec4 retary shall make available, to any insurer required to pro5 vide information to the Secretary under this Act, computer

6 software that can be used to convert addresses to applica7 ble regions within designated MSA’s. The software shall

8 be made available in forms that provide such conversion

9 for designated MSA’s on a nationwide basis and on a

10 State-by-State basis. The software shall be made available

11 not less than 6-months before the first annual reporting

12 period to which the reporting requirements under this Act

13 apply (pursuant to section 226) and shall be updated an14 nually. The software shall be made available without

15 charge, except for an amount, determined by the Sec16 retary, which shall not exceed the actual cost of reproduc17 ing the software.

18 (c) CONVERTIBILITY.—

19 (1) AUTHORITY.—The Secretary may, by regu20 lation, provide for insurers to comply with the re21 quirements under sections 4, 5, 9(b), and 11 by re22 porting the information required under such sections

23 on the basis of geographical location other than

24 MSA and applicable region, but only if the Secretary

25 determines that information reported on such other
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1 basis is convertible to the basis of MSA and applica2 ble region and such conversion does not affect the

3 accuracy of the information.

4 (2) LIMITATION.—With respect to any informa5 tion submitted on the basis of geographical location

6 other than designated MSA and applicable region

7 pursuant to paragraph (1), the Secretary may dis8 close the information only on the basis of designated

9 MSA and applicable region.

10 SEC. 17. ANNUAL REPORTING PERIOD.

11 (a) IN GENERAL.—For purposes of this Act, the an12 nual reporting periods shall be the 12-month periods com13 mencing in each calendar year on the same day, which

14 shall be selected under subsection (b) by the Secretary.

15 (b) SELECTION.—Not later than the expiration of the

16 6-month period beginning on the date of the enactment

17 of this Act, the Secretary shall, by regulation, select a day

18 of the year upon which all annual reporting periods shall

19 commence. In determining such day, the Secretary shall

20 consider the reporting periods used for purposes of State

21 and other insurance statistical reporting systems, in order

22 to minimize the burdens on insurers.
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1 SEC. 18. DISCLOSURES BY INSURERS TO APPLICANTS AND

2 POLICYHOLDERS.

3 (a) IN GENERAL.—The Secretary shall, by regula4 tion, require the following disclosures:

5 (1) APPLICANTS.—Each insurer that, through

6 the insurer, or an agent or broker, declines a written

7 application or written request to issue an insurance

8 policy under a designated line shall provide to the

9 applicant at the time of such declination, through

10 such insurer, agent, or broker, one of the following:

11 (A) A written explanation of the specific

12 reasons for the declination.

13 (B) Written notice that (i) the applicant

14 may submit to the insurer, agent, or broker,

15 within 90 days of such notice, a written request

16 for a written explanation of the reasons for the

17 declination, and (ii) pursuant to such a request,

18 an explanation shall be provided to the appli19 cant within 21 days after receipt of such re20 quest.

21 If an insurer, agent, or broker making a declination

22 receives a written request referred to in subpara23 graph (B) within such 90-day period, the insurer,

24 agent, or broker shall provide a written explanation

25 referred to in such subparagraph within such 21-day

26 period.
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1 (2) POLICYHOLDERS.—Each insurer that can2 cels or refuses to renew an insurance policy under

3 a designated line shall provide to the policyholder, in

4 writing and within an appropriate period of time as

5 determined by the Secretary, the reasons for cancel6 ing or refusing to renew the policy.

7 (b) MODEL ACTS.—In issuing regulations under sub8 section (a), the Secretary shall consider relevant portions

9 of model acts developed by the National Association of In10 surance Commissioners.

11 (c) PREEMPTION.—Subsection (a) shall not be con12 strued to annul, alter, or effect, or exempt any insurer,

13 agent, or broker subject to the provisions of subsection

14 (a) from complying with any laws or requirements of any

15 State with respect to notifying insurance applicants or pol16 icyholders of the reasons for declination or cancellation of,

17 or refusal to renew insurance, except to the extent that

18 such laws or requirements are inconsistent with subsection

19 (a) (or the regulations issued thereunder) and then only

20 to the extent of such inconsistency. The Secretary is au21 thorized to determine whether such inconsistencies exist

22 and to resolve issues regarding such inconsistencies. The

23 Secretary may not provide that any State law or require24 ment is inconsistent with subsection (a) if it imposes re25 quirements equivalent to the requirements under such
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1 subsection or requirements that are more stringent or

2 comprehensive, in the determination of the Secretary.

3 (d) IMMUNITY.—In issuing regulations under sub4 section (a), the Secretary shall specifically consider the ne5 cessity of providing insurers, agents, and brokers immu6 nity solely for the act of conveying or communicating the

7 reasons for a declination or cancellation of, or refusal to

8 renew insurance on behalf of a principal making such deci9 sion. The Secretary may provide for immunity under the

10 regulations issued under subsection (a) if the Secretary

11 determines that such a provision is necessary and in the

12 public interest, except that the Secretary may not provide

13 immunity for any conduct that is negligent, reckless, or

14 willful.

15 (e) ENFORCEMENT.—The Secretary may authorize

16 the States to enforce the requirements under regulations

17 issued under subsection (a).

18 SEC. 19. ENFORCEMENT.

19 (a) CIVIL PENALTIES.—Any insurer who is deter20 mined by the Secretary, after providing opportunity for

21 a hearing on the record, to have violated any requirement

22 pursuant to this Act shall be subject to a civil penalty of

23 not to exceed $5,000 for each day during which such viola24 tion continues.
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1 (b) INJUNCTION.—The Secretary may bring an ac2 tion in an appropriate United States district court for ap3 propriate declaratory and injunctive relief against any in4 surer who violates the requirements referred to in sub5 section (a).

6 (c) INSURER LIABILITY.—An insurer shall be respon7 sible under subsections (a) and (b) for any violation of

8 a statistical agent acting on behalf of the insurer.

9 SEC. 20. REPORTS.

10 (a) ANNUAL REPORT.—The Secretary shall annually

11 report to the Committee on Banking, Finance and Urban

12 Affairs of the House of Representatives and the appro13 priate Committees of the Senate on the implementation

14 of this Act and shall make recommendations to such Com15 mittees on such additional legislation as the Secretary

16 deems appropriate to carry out this Act. The Secretary

17 shall include in each annual report a description of any

18 complaints or problems resulting from the implementation

19 of this Act, of which the Secretary has knowledge, made

20 by (or on behalf of) insurance policyholders that concern

21 the disclosure of information regarding policyholders and

22 any recommendations for addressing such problems. Each

23 report shall specifically address whether granting property

24 and casualty insurance powers to other financial

25 intermediaries would significantly reduce redlining and
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1 other discriminatory insurance practices and the Secretary

2 shall consult with the appropriate financial institution reg3 ulators regarding such issues in preparing the report.

4 (b) GAO REPORTS.—

5 (1) IN GENERAL.—The Comptroller General of

6 the United States shall submit a report under this

7 subsection to the Secretary and the Congress for

8 each 5-year period referred to in sections 7(c)(2)

9 and 15(a)(2), which contains information to be used

10 by the Secretary in implementing this Act during

11 such period.

12 (2) TIMING.—The report under this subsection

13 for each such 5-year period shall be submitted not

14 later than the date occurring 18 months before the

15 commencement of the period to which the report re16 lates.

17 (3) CONTENTS.—A report under this subsection

18 shall include the following information:

19 (A) An analysis of the adequacy of the im20 plementation of this Act and any recommenda21 tions of the Comptroller General for improving

22 the implementation.

23 (B) The costs to the Federal Government,

24 insurers, and consumers of implementing and

25 complying with this Act.
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1 (C) Any beneficial or harmful effects re2 sulting from the requirements of this Act.

3 (D) An analysis of whether, considering

4 the purposes of this Act, insurers are required

5 by this Act (or by implementing regulations) to

6 submit appropriate information.

7 (E) An analysis of whether sufficient evi8 dence exists of patterns of disparities in the

9 availability, affordability, and quality or type of

10 insurance coverage to warrant continued appli11 cability of the requirements of this Act.

12 (F) An analysis of whether the group of

13 designated MSA’s in effect at the time of the

14 report are appropriate for purposes of this Act.

15 (G) Specific recommendations, for use by

16 the Secretary in designating MSA’s for the 5-

17 year period for which the report is made, with

18 regard to—

19 (i) the characteristics of MSA’s that

20 should be included in the group of des21 ignated MSA’s;

22 (ii) the number of MSA’s that should

23 be included in the group;
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1 (iii) the number of MSA’s having each

2 particular characteristic that should be in3 cluded in the group; and

4 (iv) the characteristics of MSA’s, and

5 number of MSA’s having each such char6 acteristic, that should be removed from the

7 group of designated MSA’s in effect at the

8 time of the report.

9 (H) With respect only to the first report

10 required under this subsection, recommenda11 tions of whether the study conducted under sec12 tion 5 should be continued beyond the date in

13 section 5(b)(8) and, if so, whether the require14 ments regarding the submission of information

15 under the study should be expanded or changed

16 with respect to insurers, MSA’s, lines, sublines

17 or coverage types of insurance, and types of

18 small businesses, or whether the study should

19 be allowed to terminate under law.

20 (I) An analysis of whether the group of

21 designated rural areas in effect at the time of

22 the report are appropriate for purposes of this

23 Act.

24 (J) Specific recommendations, for use by

25 the Secretary in designating rural areas for
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1 purposes of section 7 for the 5-year period for

2 which the report is made, with regard to—

3 (i) the characteristics of rural areas

4 that should be included in the group of

5 designated rural areas under such section;

6 (ii) the number of rural areas having

7 each particular characteristic that should

8 be included in the group; and

9 (iii) the characteristics of rural areas,

10 and number of rural areas having each

11 such characteristic, that should be removed

12 from the group of designated rural areas

13 in effect at the time of the report.

14 (K) Any other information or recommenda15 tions relating to the requirements or implemen16 tation of this Act that the Comptroller General

17 considers appropriate.

18 (4) CONSULTATION.—In preparing each report

19 under this subsection, the Comptroller General shall

20 consult with Federal agencies having appropriate ex21 pertise, the National Association of Insurance Com22 missioners, State insurance regulators, statistical

23 agents, representatives of small businesses, rep24 resentatives of insurance agents (including minority

25 insurance agents) and property and casualty insur-
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1 ers, and community, consumer, and civil rights orga2 nizations.

3 SEC. 21. TASK FORCE ON AGENCY APPOINTMENTS.

4 (a) ESTABLISHMENT.—Not later than 90 days after

5 the date of the enactment of this Act, the Secretary shall

6 establish a task force on insurance agency appointments.

7 The task force shall—

8 (1) consist of representatives of appropriate

9 Federal agencies, property and casualty insurance

10 agents, including specifically minority insurance

11 agents, property and casualty insurers, State insur12 ance regulators, and community, consumer, and civil

13 rights organizations;

14 (2) have a significant representation from mi15 nority insurance agents; and

16 (3) be chaired by the Secretary or the Sec17 retary’s designee.

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

19 (1) review the problems inner city and minority

20 agents may have in receiving appointments to rep21 resent property and casualty insurers and consider

22 the effects such problems have on the availability,

23 affordability, and quality or type of insurance, espe24 cially in underserved areas;
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1 (2) review the practices of insurers in terminat2 ing agents and consider the effects such practices

3 have on the availability, affordability, and quality or

4 type of insurance, especially in underserved areas;

5 and

6 (3) recommend solutions to improve the ability

7 of inner city and minority insurance agents to mar8 ket property and casualty insurance products, in9 cluding steps property and casualty insurers should

10 take to increase their appointments of such agents.

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

12 shall report to the Committee on Banking, Finance and

13 Urban Affairs of the House of Representatives and the

14 appropriate Committees of the Senate its findings under

15 paragraphs (1) and (2) of subsection (b) and its rec16 ommendations under paragraph (3) of subsection (b) not

17 later than 2 years after the date of the enactment of this

18 Act. The task force shall terminate when the report is sub19 mitted to the Committees.

20 SEC. 22. STUDIES.

21 (a) STUDY OF INSURANCE PRESCREENING.—

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

23 a study to determine the feasibility and utility of re24 quiring insurers to report information with respect

25 to the characteristics of applicants for insurance and
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1 reasons for rejection of applicants. The study shall

2 examine the extent to which—

3 (A) oral applications or representations are

4 used by insurers and agents in making deter5 minations regarding whether or not to insure a

6 prospective insured;

7 (B) written applications are used by insur8 ers and agents in making determinations re9 garding whether or not to insure a prospective

10 insured;

11 (C) written applications are submitted

12 after the insurer or agent has already made a

13 determination to provide insurance to a pro14 spective insured or has determined that the pro15 spective insured is eligible for insurance; and

16 (D) prospective insureds are discouraged

17 from submitting applications for insurance

18 based, in whole or in part, on—

19 (i) the location of the risk to be in20 sured;

21 (ii) the racial characteristics of the

22 prospective insured;

23 (iii) the racial composition of the

24 neighborhood in which the risk to be in25 sured is located; and
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1 (iv) in the case of residential property

2 insurance, the age and value of the risk to

3 be insured.

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

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

6 Committee on Banking, Finance and Urban Affairs

7 of the House of Representatives and the appropriate

8 Committees of the Senate not later than 2 years

9 after the date of the enactment of this Act. The re10 port shall include recommendations of the Secretary

11 (A) with respect to requiring insurers to report on

12 the disposition of oral and written applications for

13 insurance, and (B) for any legislation that the Sec14 retary considers appropriate regarding the issues de15 scribed in the report.

16 (b) STUDY OF INSURER ACTIONS TO MEET INSUR17 ANCE NEEDS OF CERTAIN NEIGHBORHOODS.—The Sec18 retary shall conduct a study of various practices, actions,

19 and methods undertaken by insurers to meet the property

20 and casualty insurance needs of residents of low- and mod21 erate-income neighborhoods, minority neighborhoods, and

22 small businesses located in such neighborhoods. The Sec23 retary shall report the results of the study, including any

24 recommendations, to the Committee on Banking, Finance

25 and Urban Affairs of the House of Representatives and
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1 the appropriate Committees of the Senate not later than

2 2 years after the date of the enactment of this Act.

3 (c) STUDY OF DISPARATE CLAIMS TREATMENT.—

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

5 a study to determine whether, and the extent to

6 which, insurers engage in disparate treatment in

7 handling claims of policyholders under designated

8 lines of insurance based on the race, gender, and in9 come level of the policyholder, and on the racial

10 characteristics and income levels of the area in

11 which the insured risk is located. In conducting the

12 study, the Secretary shall specifically consider

13 whether residents of low-income neighborhoods or

14 areas and minority neighborhoods or areas are more

15 likely than residents of other areas to have their

16 claims contested or their insurance coverage can17 celed.

18 (2) REPORT.—The Secretary shall submit a re19 port on the results of the study to the Committee on

20 Banking, Finance and Urban Affairs of the House

21 of Representatives and the appropriate Committees

22 of the Senate not later than 2 years after the date

23 of the enactment of this Act.

24 (d) STUDY OF RATING TERRITORIES.—The Sec25 retary shall conduct a study to determine whether the
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1 practice in the insurance industry of basing insurance pre2 mium amounts on the territory in which the insured risk

3 is located has a disparate impact on the availability, af4 fordability, or quality of insurance by race, gender, or type

5 of neighborhood. The Secretary shall submit a report on

6 the results of the study to the Committee on Banking, Fi7 nance and Urban Affairs of the House of Representatives

8 and the appropriate Committees of the Senate not later

9 than 12 months after the date of the enactment of this

10 Act.

11 (e) STUDY OF INSURER REINVESTMENT REQUIRE12 MENTS.—

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

14 a study to determine the feasibility of requiring in15 surers to reinvest in communities and neighborhoods

16 from which they collect premiums for insurance and

17 whether, and the extent to which, community rein18 vestment requirements for insurers should be estab19 lished that are comparable to the community rein20 vestment requirements applicable to depository insti21 tutions. The Secretary shall consult with representa22 tives of insurers and consumer, community, and civil

23 rights organizations regarding the results of the

24 study and any recommendations to be made based

25 on the results of the study.
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1 (2) REPORT.—The Secretary shall report the

2 results of the study, including any such rec3 ommendations, to the Committee on Banking, Fi4 nance and Urban Affairs of the House of Represent5 atives and the appropriate Committees of the Senate

6 not later than 6 months after the conclusion of the

7 first annual reporting period to which the reporting

8 requirements under this Act apply (pursuant to sec9 tion 26).

10 SEC. 23. EXEMPTION AND RELATION TO STATE LAWS.

11 (a) EXEMPTION FOR UNITED STATES PROGRAMS.—

12 Reporting shall not be required under this Act with re13 spect to insurance provided by any program underwritten

14 or administered by the United States.

15 (b) RELATION TO STATE LAWS.—This Act does not

16 annul, alter, or affect, or exempt the obligation of any in17 surer subject to this Act to comply with the laws of any

18 State or subdivision thereof with respect to public disclo19 sure, submission of information, and recordkeeping.

20 SEC. 24. REGULATIONS.

21 (a) IN GENERAL.—The Secretary shall issue any reg22 ulations required under this Act and any other regulations

23 that may be necessary to carry out this Act. The regula24 tions shall be issued through rulemaking in accordance

25 with the procedures under section 553 of title 5, United
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1 States Code, for substantive rules. Except as otherwise

2 provided in this Act, such final regulations shall be issued

3 not later than the expiration of the 18-month period begin4 ning on the date of the enactment of this Act.

5 (b) BURDENS.—In prescribing such regulations, the

6 Secretary shall take into consideration the administrative,

7 paperwork, and other burdens on insurance agents, includ8 ing independent insurance agents, involved in complying

9 with the requirements of this Act and shall minimize the

10 burdens imposed by such requirements with respect to

11 such agents.

12 SEC. 25. DEFINITIONS.

13 For purposes of this Act:

14 (1) AGENT.—The term ‘‘agent’’ means, with re15 spect to an insurer, an agent licensed by a State

16 who sells property and casualty insurance. The term

17 includes agents who are employees of the insurer,

18 agents who are independent contractors working ex19 clusively for the insurer, and agents who are inde20 pendent contractors appointed to represent the in21 surer on a nonexclusive basis.

22 (2) APPLICABLE REGION.—The term ‘‘applica23 ble region’’ means, with respect to a designated

24 MSA—
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1 (A) for any county located within the MSA

2 that has a population of more than 30,000, the

3 applicable census tract within the county; or

4 (B) for any county located within the MSA

5 that has a population of 30,000 or less, the ap6 plicable county.

7 (3) COMMERCIAL INSURANCE.—The term

8 ‘‘commercial insurance’’ means any line of property

9 and casualty insurance, except private passenger

10 automobile, homeowner’s insurance and dwelling fire

11 and allied lines, and other personal lines of insur12 ance.

13 (4) DESIGNATED INSURER.—The term ‘‘des14 ignated insurer’’ means, with respect to a designated

15 line, an insurer designated for a State by the Sec16 retary under section 15(b) as a designated insurer

17 for such line or any insurer that is part of an in18 surer group selected under such section.

19 (5) DESIGNATED INVESTMENT.—The term

20 ‘‘designated investment’’ means making or purchas21 ing a loan for the purchase of commercial real es22 tate, making or purchasing a mortgage loan for the

23 purchase of a 1- to 4-family dwelling, making or

24 purchasing a commercial or industrial loan, or mak-
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1 ing any other investment designated by the Sec2 retary under section 11(b).

3 (6) DESIGNATED LINE.—The term ‘‘designated

4 line’’ means a line of insurance or bid, performance,

5 and payment bonds designated by the Secretary

6 under section 15(c).

7 (7) EXPOSURES.—The term ‘‘exposures’’

8 means, for purposes of section 4, with respect to an

9 insurance policy, an expression of an exposure unit

10 covered under the policy compared to the duration of

11 the policy (pursuant to standards established by the

12 Secretary for uniform reporting of exposures).

13 (8) EXPOSURE UNITS.—The term ‘‘exposure

14 units’’ means, for purposes of section 4, an auto15 mobile or dwelling covered under an insurance policy

16 for private passenger automobile or homeowners or

17 dwelling fire and allied lines coverage.

18 (9) INSURANCE.—The term ‘‘insurance’’ means

19 property and casualty insurance. Such term includes

20 primary insurance, surplus lines insurance, and any

21 other arrangement for the shifting and distributing

22 of risks that is determined to be insurance under the

23 law of any State in which the insurer or insurer

24 group engages in an insurance business.
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1 (10) INSURER.—Except with respect to section

2 9, the term ‘‘insurer’’ means any corporation, asso3 ciation, society, order, firm, company, mutual, part4 nership, individual, aggregation of individuals, or

5 any other legal entity that is authorized to transact

6 the business of property or casualty insurance in any

7 State or that is engaged in a property or casualty

8 insurance business. With respect to section 6, the

9 term means any person authorized to transact the

10 business of bid, performance, and payment bonds for

11 small businesses. The term does not include an indi12 vidual or entity which represents an insurer as agent

13 solely for the purpose of selling or which represents

14 a consumer as a broker solely for the purpose of

15 buying insurance.

16 (11) ISSUED.—The term ‘‘issued’’ means, with

17 respect to an insurance policy, newly issued or re18 newed.

19 (12) JOINT UNDERWRITING ASSOCIATION.—The

20 term ‘‘joint underwriting association’’ means an un21 incorporated association of insurers established to

22 provide a particular form of insurance to the public.

23 (13) MORTGAGE INSURANCE.—The term

24 ‘‘mortgage insurance’’ means insurance against the
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1 nonpayment of, or default on, a mortgage or loan

2 for residential or commercial property.

3 (14) MSA.—The term ‘‘MSA’’ means a Metro4 politan Statistical Area or a Primary Metropolitan

5 Statistical Area.

6 (15) PRIVATE MORTGAGE INSURANCE.—The

7 term ‘‘private mortgage insurance’’ means mortgage

8 insurance other than mortgage insurance made

9 available under the National Housing Act, title 38 of

10 the United States Code, or title V of the Housing

11 Act of 1949.

12 (16) PROPERTY AND CASUALTY INSURANCE.—

13 The term ‘‘property and casualty insurance’’ means

14 insurance against loss of or damage to property, in15 surance against loss of income or extra expense in16 curred because of loss of, or damage to, property,

17 and insurance against third party liability claims

18 caused by negligence or imposed by statute or con19 tract. Such term does not include workers’ com20 pensation, professional liability, or title insurance.

21 (17) RESIDUAL MARKET.—The term ‘‘residual

22 market’’ means an assigned risk plan, joint under23 writing association, or any similar mechanism de24 signed to make insurance available to those unable

25 to obtain it in the voluntary market. The term in-
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1 cludes each statewide plan under part A of title XII

2 of the National Housing Act to assure fair access to

3 insurance requirements.

4 (18) RURAL AREA.—The term ‘‘rural area’’

5 means any area that—

6 (A) has a population of 10,000 or more;

7 (B) has a continuous boundary; and

8 (C) contains only areas that are rural

9 areas, as such term is defined in section 520 of

10 the Housing Act of 1949 (except that clause

11 (3)(B) of such section 520 shall not apply for

12 purposes of this Act).

13 (19) SECRETARY.—The term ‘‘Secretary’’

14 means the Secretary of Housing and Urban Develop15 ment.

16 (20) STATE.—The term ‘‘State’’ means any

17 State, the District of Columbia, the Commonwealth

18 of Puerto Rico, the Northern Mariana Islands, the

19 Virgin Islands, American Samoa, and the Trust Ter20 ritory of the Pacific Islands.

21 SEC. 26. EFFECTIVE DATE.

22 The requirements of this Act relating to reporting of

23 information by insurers shall take effect with respect to

24 the first annual reporting period that begins more than

25 36 months after the date of the enactment of this Act.
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