II

104TH CONGRESS

1ST SESSION S. 380

To provide for public access to information regarding the availability of

insurance, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 9 (legislative day, JANUARY 30), 1995

Mr. FEINGOLD (for himself and Mr. SIMON) introduced the following bill;

which was read twice and referred to the Committee on Banking, Housing, 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; TABLE OF CONTENTS.

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

5 ‘‘Anti-Redlining in Insurance Disclosure Act of 1995’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:

Sec. 1. Short title; 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.
2

•S 380 IS

Sec. 6. Reporting of rural insurance information.

Sec. 7. Waiver of reporting requirements.

Sec. 8. Reporting by private mortgage insurers.

Sec. 9. Use of data contractor and statistical agents.

Sec. 10. Submission of information to Secretary and maintenance of information.

Sec. 11. Compilation of aggregate information.

Sec. 12. Availability and access system.

Sec. 13. Designations.

Sec. 14. Improved methods and reporting on basis of other areas.

Sec. 15. Annual reporting period.

Sec. 16. Disclosures by insurers to applicants and policyholders.

Sec. 17. Enforcement.

Sec. 18. Reports.

Sec. 19. Task force on agency appointments.

Sec. 20. Studies.

Sec. 21. Exemption and relation to State laws.

Sec. 22. Regulations.

Sec. 23. Definitions.

Sec. 24. 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 and busi9 ness 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
3

•S 380 IS

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 ac9 tions—

10 (A) to remedy redlining or other illegally

11 or unfairly discriminatory insurance practices;

12 or

13 (B) regarding areas underserved by insur14 ers.

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

16 to, nor shall it be construed to, encourage unsound under17 writing practices.

18 SEC. 3. ESTABLISHMENT OF GENERAL REQUIREMENTS TO

19 SUBMIT INFORMATION.

20 (a) IN GENERAL.—The Secretary shall, by regula21 tion, establish requirements for insurers to compile and

22 submit information to the Secretary for each annual re23 porting period, in accordance with this Act.

24 (b) CONSULTATION.—In establishing the require25 ments for the submission of information under this Act,
4

•S 380 IS

1 the Secretary shall consult with Federal agencies having

2 appropriate expertise, the National Association of Insur3 ance Commissioners, State insurance regulators, statis4 tical agents, representatives of small businesses, rep5 resentatives of insurance agents (including minority insur6 ance agents), representatives of property and casualty in7 surers, and community, consumer, and civil rights organi8 zations, as appropriate.

9 SEC. 4. REPORTING OF NONCOMMERCIAL INSURANCE IN10 FORMATION.

11 (a) IN GENERAL.—The requirements established pur12 suant to section 3 to carry out this section shall—

13 (1) be designed to ensure that information is

14 submitted and compiled under this section as may be

15 necessary to permit analysis and comparison of—

16 (A) the availability and affordability of in17 surance coverage and the quality or type of in18 surance coverage, by MSA and the applicable

19 region, race, and gender of policyholders; and

20 (B) the location of the principal place of

21 business of insurance agents and the race of

22 such agents, and the location of the principal

23 place of business of insurance agents termi24 nated and the race of such agents, by MSA and

25 applicable region; and
5

•S 380 IS

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 section 13(c)(1) compile and submit to the

9 Secretary, for each annual reporting period—

10 (A) the total number of policies issued in

11 such line, total exposures covered by such poli12 cies, and total amount of premiums for such

13 policies, by designated line and by designated

14 MSA and applicable region in which the insured

15 risk is located;

16 (B) the total number of cancellations and

17 nonrenewals (expressed in terms of policies or

18 exposures, as determined by the Secretary), by

19 designated line and by designated MSA and ap20 plicable region in which the insured risk is

21 located;

22 (C) the total number and racial characteris23 tics of—

24 (i) licensed agents of such insurer sell25 ing insurance in the designated line, by
6

•S 380 IS

1 designated MSA and applicable region in

2 which the agent’s principal place of busi3 ness is located; and

4 (ii) such agents who were terminated

5 by the insurer, by designated MSA and ap6 plicable region in which the agent’s prin7 cipal place of business was located; and

8 (D) for such designated line of insurance,

9 information that will enable the Secretary to as10 sess the aggregate loss experience for the in11 surer, by designated MSA and applicable region

12 in which the insured risk is located.

13 (2) SPECIFICATION OF INFORMATION FOR

14 ITEMIZED DISCLOSURE.—

15 (A) IN GENERAL.—The regulations issued

16 under section 3 regarding annual reporting re17 quirements for designated insurers for a des18 ignated line of insurance under section 13(c)(1)

19 shall, with respect to policies issued under the

20 designated line or exposure units covered by

21 such policies, as determined by the Secretary—

22 (i) specify the data elements that shall

23 be submitted;

24 (ii) provide for the submission of in25 formation on an individual insurer basis;
7

•S 380 IS

1 (iii) provide for the submission of the

2 information with the least burden on insur3 ers, particularly small insurers, and insur4 ance agents;

5 (iv) take into account existing statis6 tical reporting systems in the insurance in7 dustry;

8 (v) require reporting by MSA and ap9 plicable region in which the insured risk is

10 located;

11 (vi) provide for the submission of in12 formation that identifies the designated

13 line and subline or coverage type;

14 (vii) provide for the submission of in15 formation that distinguishes policies writ16 ten in a residual market from policies writ17 ten in the voluntary market;

18 (viii) specify—

19 (I) whether information shall be

20 submitted on the basis of policy or ex21 posure unit; and

22 (II) whether information, when

23 submitted, shall be aggregated by like

24 policyholders with like policies, except

25 that the Secretary shall not permit
8

•S 380 IS

1 such aggregation if it will adversely

2 affect the accuracy of the information

3 reported;

4 (ix) provide for the submission of in5 formation regarding the number of can6 cellations and nonrenewals of policies

7 under the designated line by MSA and ap8 plicable region in which the insured risk is

9 located, by race and gender of the policy10 holder (if known to the insurer), and by

11 whether the policy was issued in a vol12 untary or residual market; and

13 (x) provide for the submission of in14 formation on the racial characteristics and

15 gender of policyholders at the level of de16 tail comparable to that required by the

17 Home Mortgage Disclosure Act of 1975

18 (and the regulations issued thereunder).

19 (B) RULES REGARDING OBTAINING RACIAL

20 INFORMATION.—With respect to the informa21 tion specified in subparagraph (A)(x), appli22 cants for, and policyholders of, insurance may

23 be asked their racial characteristics only in

24 writing. Any such written question shall clearly

25 indicate that a response to the question is vol-
9

•S 380 IS

1 untary on the part of the applicant or policy2 holder, but encouraged, and that the informa3 tion is being requested by the Federal Govern4 ment to monitor the availability and afford5 ability of insurance. If an applicant for, or pol6 icyholder of, insurance declines to provide such

7 information, the agent or insurer for such in8 surance may provide such information.

9 (3) RULE FOR REPORTING BY DESIGNATED IN10 SURERS.—A designated insurer for a designated line

11 shall submit—

12 (A) information required under subpara13 graphs (A), (B), and (D) of paragraph (1) and

14 information required pursuant to paragraph

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

16 located within each designated MSA, any part

17 of which is located in a State for which the in18 surer is designated; and

19 (B) information required under paragraph

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

21 MSA’s.

22 (c) NONDESIGNATED INSURERS.—The regulations is23 sued under section 3 shall require each insurer that issues

24 an insurance policy in a designated line of insurance under

25 section 13(c)(1) that covers an insured risk located in a
10

•S 380 IS

1 designated MSA and which is not a designated insurer for

2 the line in any State in which any part of such MSA is

3 located, to compile and submit to the Secretary, for each

4 annual reporting period—

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

6 line;

7 (2) the total exposures covered by such policies;

8 and

9 (3) the total amount of premiums for such poli10 cies;

11 by designated MSA and applicable region in which the in12 sured risk is located.

13 SEC. 5. STUDY OF COMMERCIAL INSURANCE FOR RESIDEN14 TIAL PROPERTIES AND SMALL BUSINESSES.

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

16 study to determine the availability, affordability, and qual17 ity or types of commercial insurance coverage for residen18 tial properties and small businesses, in urban areas.

19 (b) SUBMISSION OF INFORMATION.—To acquire in20 formation for the study under this section, the Secretary

21 shall, by regulation, establish requirements for insurers

22 providing commercial insurance for residential properties

23 and small businesses to compile and submit to the Sec24 retary on an annual basis information regarding such in25 surance, as follows:
11

•S 380 IS

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

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

3 largest populations, as determined by the Secretary

4 and specified in the regulations under this section.

5 (2) INSURERS.—For each of the MSA’s speci6 fied pursuant to paragraph (1), the Secretary shall

7 designate the insurers required to submit the infor8 mation. The Secretary shall designate a sufficient

9 number of insurers to provide a representative sam10 ple of the insurers providing such insurance in each

11 such MSA.

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

13 require the submission of information regarding

14 such lines, sublines, or coverage types of commercial

15 insurance as the Secretary determines are necessary

16 or important with respect to establishing, operating,

17 or maintaining residential properties and each type

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

19 shall require submission of such information by such

20 lines, sublines, or coverage types.

21 (4) SMALL BUSINESSES.—For purposes of

22 paragraph (3), the Secretary shall determine the

23 types of businesses that are typical of small busi24 nesses and shall select a representative sample of

25 such types.
12

•S 380 IS

1 (5) DATA ELEMENTS.—The Secretary shall

2 identify the data elements required to be submitted.

3 (6) SUBMISSION BY LOCATION.—The Secretary

4 shall require the information to be submitted by des5 ignated MSA and applicable region in which the in6 sured risk is located.

7 (7) SUBMISSION BY INSURER.—The Secretary

8 shall require the submission of information on an in9 dividual insurer basis and shall specify whether in10 formation, when submitted, shall be aggregated by

11 like policies, except that the Secretary shall not per12 mit such aggregation if it will adversely affect the

13 accuracy of the information reported.

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

15 submission of information under this section only for

16 each of the first 5 annual reporting periods begin17 ning more than 3 years after the date of enactment

18 of this Act.

19 (c) CONSIDERATIONS.—In establishing the require20 ments for submission of information under this section,

21 the Secretary shall—

22 (1) take into consideration the administrative,

23 paperwork, and other burdens on insurers and insur24 ance agents involved in complying with the require25 ments of this section;
13

•S 380 IS

1 (2) minimize the burdens imposed by such re2 quirements with respect to such insurers and agents;

3 and

4 (3) take into consideration existing statistical

5 reporting systems in the insurance industry.

6 (d) REPORT.—Not later than 6 months after the ex7 piration of the fifth of the 5 annual reporting periods re8 ferred to in subsection (b)(8), the Secretary shall submit

9 a report to the Congress describing the information sub10 mitted under the study conducted under this section and

11 any findings of the Secretary from the study regarding

12 disparities in the availability, affordability, and quality or

13 types of commercial insurance coverage for residential

14 properties and small businesses, in urban areas.

15 SEC. 6. REPORTING OF RURAL INSURANCE INFORMATION.

16 (a) IN GENERAL.—The Secretary shall, by regula17 tion, establish requirements for insurers to annually com18 pile and submit to the Secretary information concerning

19 the availability, affordability, and quality or type of insur20 ance in designated rural areas in the lines designated

21 under section 13(c)(1).

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

23 shall provide that—

24 (1) the information to be compiled and submit25 ted under this section by designated insurers and in-
14

•S 380 IS

1 surers that are not designated insurers shall be of

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

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

4 specificity of information required under this Act of

5 designated and nondesignated insurers, respectively,

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

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

8 (2) the information compiled and submitted

9 under this section shall be compiled and submitted

10 on the basis of each 5-digit zip code in which the in11 sured risks are located, rather than on the basis of

12 designated MSA and applicable region (as otherwise

13 required in this Act).

14 (c) DESIGNATION OF RURAL AREAS.—For purposes

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

16 the following:

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

18 5 annual reporting periods to which the reporting re19 quirements under this section apply, any of the 50

20 rural areas designated by the Secretary and speci21 fied in regulations issued pursuant to section 22,

22 which shall not be amended or revised after issu23 ance. The Secretary shall (to the extent possible)

24 designate one rural area under this paragraph in

25 each State of the United States.
15

•S 380 IS

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

2 annual reporting periods thereafter, a rural area for

3 which a designation made by the Secretary under

4 this paragraph is in effect, pursuant to the following

5 requirements:

6 (A) The designations shall be made for

7 each of the successive 5-year periods at the

8 time provided in subparagraph (C), and the

9 first such period shall be the 5-year period be10 ginning upon the commencement of the sixth

11 annual reporting period to which the reporting

12 requirements under this Act apply.

13 (B) The Secretary shall designate 50 rural

14 areas as designated rural areas for each such 5-

15 year period and shall designate such rural areas

16 based upon the information and recommenda17 tions made in the report under section 18(b) re18 lating to the period.

19 (C) The Secretary shall make the designa20 tion of rural areas for an ensuing 5-year period

21 by regulations issued—

22 (i) not later than 12 months before

23 the commencement of the 5-year period;

24 and
16

•S 380 IS

1 (ii) not later than 6 months after the

2 submission to the Secretary of the report

3 under section 18(b) relating to such pe4 riod.

5 (D) The designations of rural areas for a

6 5-year period shall take effect upon the com7 mencement of the first annual reporting period

8 of the 5-year period beginning not less than 12

9 months after the issuance of the regulations

10 making such designations, and shall remain in

11 effect until the expiration of the 5-year period.

12 Notwithstanding any other provision of this section, the

13 designation of a rural area shall remain in effect until a

14 succeeding designation of rural areas under paragraph (2)

15 takes effect.

16 SEC. 7. WAIVER OF REPORTING REQUIREMENTS.

17 (a) WAIVER FOR STATES COLLECTING EQUIVALENT

18 INFORMATION.—

19 (1) AUTHORITY.—Subject to the requirements

20 under this section, the Secretary shall provide, by

21 regulation, for the waiver of the applicability of the

22 provisions of sections 4, 5, and 6 for each insurer

23 transacting business within a State referred to in

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

25 required to be submitted under such sections that
17

•S 380 IS

1 relates to agents or insured risks located in the

2 State.

3 (2) REQUIREMENTS.—The Secretary may make

4 a waiver pursuant to paragraph (1) only with re5 spect to a State that the Secretary determines has

6 in effect a law or other requirement that—

7 (A) requires insurers to submit to the

8 State information that is the same as or equiva9 lent to the information that is required to be

10 submitted to the Secretary pursuant to sections

11 4, 5, and 6;

12 (B) provides for adequate enforcement of

13 such law or other requirements;

14 (C) provides for the same annual reporting

15 period used by the Secretary under this Act and

16 for submission of the information to the Sec17 retary in a timely fashion, as determined by the

18 Secretary; and

19 (D) provides that, to the extent statistical

20 agents are permitted to submit information to

21 the State on behalf of insurers, such agents are

22 subject to the same or equivalent requirements

23 as provided under section 9(b).

24 (3) DURATION.—A waiver pursuant to para25 graph (1) may remain in effect only during the pe-
18

•S 380 IS

1 riod for which the State law or other requirement

2 under paragraph (2) remains in effect.

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

4 designated MSA that contains area within—

5 (1) any State for which a waiver has been made

6 pursuant to subsection (a); and

7 (2) any State for which such a waiver has not

8 been made;

9 the provisions of this Act requiring submission of informa10 tion to the Secretary regarding such MSA shall be consid11 ered to apply only to the portion of such MSA that is lo12 cated within the State for which such a waiver has not

13 been made.

14 (c) AUTHORITY FOR SECRETARY TO OBTAIN INFOR15 MATION DIRECTLY FROM INSURERS.—If the State for

16 which a waiver has been made pursuant to subsection (a)

17 does not submit to the Secretary the information required

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

19 not complete, the Secretary shall require the insurers

20 transacting business within the State to submit such infor21 mation directly to the Secretary.

22 SEC. 8. REPORTING BY PRIVATE MORTGAGE INSURERS.

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

24 Federal Financial Institutions Examination Council (here25 after in this section referred to as the ‘‘Council’’) shall
19

•S 380 IS

1 determine the extent to which each insurer providing pri2 vate mortgage insurance is making available to the public

3 and submitting to the appropriate agency information re4 garding such insurance that is equivalent to the informa5 tion regarding mortgages required to be reported under

6 the Home Mortgage Disclosure Act of 1975.

7 (b) REPORTING UNDER THIS ACT.—

8 (1) CERTIFICATION OF NONCOMPLIANCE.—If,

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

10 the Council determines that any insurer providing

11 private mortgage insurance is not making available

12 to the public or submitting the information referred

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

14 available or submitted is not equivalent information

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

16 notify the insurer of such noncompliance. If, after

17 the expiration of a reasonable period of time, the in18 surer has not remedied such noncompliance to the

19 satisfaction of the Council, then the Council shall

20 immediately certify such noncompliance to the Sec21 retary.

22 (2) REQUIREMENT.—Upon the receipt of a cer23 tification under paragraph (1), the Secretary shall,

24 by regulation, require such insurer to submit to the

25 Secretary information regarding such insurance that
20

•S 380 IS

1 complies with the provisions of section 4 that are ap2 plicable to such insurance. Such regulations shall be

3 issued not later than 6 months after receipt of such

4 certification and shall apply to the first succeeding

5 annual reporting period beginning not less than 6

6 months after issuance of such regulations and to

7 each annual reporting period thereafter.

8 SEC. 9. USE OF DATA CONTRACTOR AND STATISTICAL

9 AGENTS.

10 (a) DATA COLLECTION CONTRACTOR.—The Sec11 retary may contract with a data collection contractor to

12 collect the information required to be maintained and sub13 mitted under sections 4, 5, 6, 7, and 8(b), if the contractor

14 agrees to collect the information pursuant to the terms

15 and conditions of such sections and this Act and the regu16 lations issued thereunder. Information submitted to such

17 contractor shall be available to the public to the same ex18 tent as if the information were submitted directly to the

19 Secretary.

20 (b) USE OF STATISTICAL AGENTS.—

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

22 by regulation, that insurers may submit any infor23 mation required under sections 4, 5, 6, and 8(b)

24 through statistical agents acting on behalf of more

25 than one insurer.
21

•S 380 IS

1 (2) PROTECTIONS.—The regulations issued

2 under this subsection shall permit submission of in3 formation through a statistical agent only if the Sec4 retary determines that—

5 (A) the statistical agent has adequate pro6 cedures to protect the integrity of the informa7 tion submitted;

8 (B) the statistical agent has a statistical

9 plan and format for submitting the information

10 that meets the requirements of this Act;

11 (C) the statistical agent has procedures in

12 place that ensure that information reported

13 under the statistical plan in connection with re14 porting under this Act and submitted to the

15 Secretary is not subject to any adjustment by

16 the statistical agent or an insurer for reasons

17 other than technical accuracy and conformance

18 to the statistical plan;

19 (D) the information of an insurer is not

20 subject to review by any other insurer before

21 being made available to the public; and

22 (E) acceptance of the information through

23 the statistical agent will not adversely affect the

24 accuracy of the information reported.
22

•S 380 IS

1 (3) DISCONTINUANCE OF ACCEPTANCE OF IN2 FORMATION.—The Secretary may discontinue ac3 cepting information reported through a statistical

4 agent pursuant to this subsection if the Secretary

5 determines that the requirements for such reporting

6 are no longer met or that continued acceptance of

7 such information is contrary to the goal of ensuring

8 the accuracy of the information reported.

9 (4) GAO AUDITS.—The Comptroller General of

10 the United States shall, at the request of the Sec11 retary, audit information collection and submission

12 performed under this subsection by data collection

13 contractors or statistical agents to ensure that the

14 integrity of the information collected and submitted

15 is protected. In determining whether to request an

16 audit of a statistical agent, the Secretary shall con17 sider the sufficiency (for purposes of this Act) of au18 dits of the statistical agent conducted in connection

19 with State insurance regulation.

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

21 statistical agent as authorized under this subsection,

22 an insurer using such an agent shall be responsible

23 for compliance with the requirements under this Act.
23

•S 380 IS

1 SEC. 10. SUBMISSION OF INFORMATION TO SECRETARY

2 AND MAINTENANCE OF INFORMATION.

3 (a) PERIOD OF MAINTENANCE.—Each insurer re4 quired by this Act to compile and submit information to

5 the Secretary shall maintain such information for the 3-

6 year period beginning upon the conclusion of the annual

7 reporting period to which such information relates. The

8 Secretary shall maintain any information submitted to the

9 Secretary for such period as the Secretary considers ap10 propriate and feasible to carry out the purposes of this

11 Act and to allow for historical analysis and comparison

12 of the information.

13 (b) SUBMISSION.—The Secretary shall issue regula14 tions prescribing a standard schedule (taking into consid15 eration the provisions of section 12(a)), format, and meth16 od for submitting information under this Act to the Sec17 retary. The format and method of submitting the informa18 tion shall facilitate and encourage the submission in a

19 form readable by a computer. Any insurer submitting in20 formation to the Secretary may submit in writing to the

21 Secretary any additional information or explanations that

22 the insurer considers relevant to the decision by the in23 surer to sell insurance.

24 SEC. 11. COMPILATION OF AGGREGATE INFORMATION.

25 (a) INSURANCE INFORMATION.—For each annual re26 porting period, the Secretary shall—
24

•S 380 IS

1 (1) compile, for each designated MSA, by des2 ignated line (and if such information is submitted,

3 by subline or coverage type)—

4 (A) information submitted under sections

5 4, 5, 7, and 8(b) and loss ratios (if the submis6 sion of loss information is required), aggregated

7 by applicable region for all insurers submitting

8 such information; and

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

10 submission of loss information is required), ag11 gregated by applicable region for each such in12 surer; and

13 (2) produce tables based on information submit14 ted under sections 4, 5, 7, and 8(b) for each des15 ignated MSA, by insurer and for all insurers, by des16 ignated line (and if such information is submitted,

17 by subline or coverage type), indicating—

18 (A) insurance underwriting patterns aggre19 gated for the applicable regions within the

20 MSA, grouped according to location, age of

21 property, income level, and racial characteristics

22 of neighborhoods; and

23 (B) loss ratios based on the information

24 obtained pursuant to sections 4, 5, 7, and 8(b)

25 (if the submission of loss information is re-
25

•S 380 IS

1 quired), aggregated for the applicable regions

2 within the MSA, grouped according to location,

3 age of property, income level, and racial charac4 teristics of neighborhoods.

5 (b) AGENT INFORMATION.—For each annual report6 ing period and for each designated MSA, the Secretary

7 shall compile, by designated line, the information submit8 ted under section 4(b)(1)(C)—

9 (1) by designated insurer by applicable region;

10 (2) by designated insurer aggregated for the

11 applicable regions within the designated MSA,

12 grouped according to location, age of property, in13 come level, and racial characteristics; and

14 (3) for all designated insurers that have submit15 ted such information for the designated MSA, aggre16 gated for the applicable regions within the des17 ignated MSA, grouped according to location, age of

18 property, income level, and racial characteristics.

19 (c) RURAL INSURANCE INFORMATION.—For each an20 nual reporting period, the Secretary shall—

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

22 by designated line (and if such information is sub23 mitted, by subline or coverage type)—

24 (A) information regarding insurance in

25 rural areas submitted under sections 6 and 7
26

•S 380 IS

1 and loss ratios, for all insurers for which such

2 information is submitted; and

3 (B) such information and loss ratios, for

4 each such insurer; and

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

6 based on information regarding insurance in rural

7 areas submitted under sections 6 and 7, by insurer

8 and for all such insurers for which information is

9 submitted under such sections, by designated line

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

11 coverage type), indicating—

12 (A) insurance underwriting patterns, ag13 gregated by zip codes, grouped according to lo14 cation, age of property, income level, and racial

15 characteristics of neighborhoods (where such

16 demographic information is available); and

17 (B) loss ratios, based on the information

18 obtained pursuant to sections 6 and 7, aggre19 gated by zip codes, grouped according to loca20 tion, age of property, income level, and racial

21 characteristics of neighborhoods (where such

22 demographic information is available).

23 SEC. 12. AVAILABILITY AND ACCESS SYSTEM.

24 (a) AVAILABILITY TO PUBLIC.—
27

•S 380 IS

1 (1) IN GENERAL.—The Secretary shall main2 tain and make available to the public, in accordance

3 with the requirements of this section, any informa4 tion submitted to the Secretary under this Act and

5 any information compiled by the Secretary under

6 this Act.

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

8 information publicly available on a timetable deter9 mined by the Secretary, but not later than 9 months

10 after the conclusion of the annual reporting period

11 to which the information relates, except that such

12 information shall not be made available to the public

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

14 information required to be reported is available by

15 such date.

16 (b) PUBLIC ACCESS SYSTEM.—

17 (1) IMPLEMENTATION.—The Secretary shall

18 implement a system to facilitate access to any infor19 mation required to be made available to the public

20 under this Act.

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

22 provide access in the following manners:

23 (A) ACCESS TO ITEMIZED INFORMATION.—

24 To information submitted under sections 4, 5,

25 6, 7, and 8(b) on the basis of the insurer sub-
28

•S 380 IS

1 mitting the information, on the basis of des2 ignated MSA and applicable region (or in the

3 case of rural information submitted under sec4 tion 6 or 7, on the basis of 5-digit zip code),

5 and on any other basis the Secretary considers

6 feasible and appropriate.

7 (B) ACCESS TO AGGREGATE INFORMA8 TION.—To aggregate information compiled

9 under section 11, on the basis of—

10 (i) the insurer submitting the infor11 mation;

12 (ii) designated MSA and applicable re13 gion (or in the case of rural information

14 submitted under section 6 or 7, on the

15 basis of 5-digit zip code); and

16 (iii) any other basis the Secretary con17 siders feasible and appropriate.

18 (3) METHOD.—The access system shall include

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

20 public to request such information and the address

21 at which a written request for such information may

22 be submitted.

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

24 establish the forms in which such information may

25 be furnished by the Secretary. Such forms shall in-
29

•S 380 IS

1 clude written statements, forms readable by widely

2 used personal computers, and, if feasible, on-line ac3 cess for personal computers. The Secretary shall

4 provide the information available under this section

5 in any such form requested by the person requesting

6 the information, except that the Secretary may

7 charge a fee for providing such information, which

8 may not exceed the amount, determined by the Sec9 retary, that is equal to the cost of reproducing the

10 information.

11 (5) ANALYSIS SOFTWARE.—The Secretary shall

12 make available to the public software that can be

13 used on a personal computer to analyze the informa14 tion provided under this section. The software shall

15 be capable of analyzing the information by insurer,

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

17 region. It shall also contain data compiled by the

18 Secretary for each MSA and applicable region on in19 come levels, age of property, and racial characteris20 tics that can be used to evaluate the information

21 provided under this Act by insurers. The software

22 and any accompanying data shall be made available

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

24 determined by the Secretary, which shall not exceed
30

•S 380 IS

1 the actual cost of reproducing the software and the

2 accompanying data.

3 (c) PROTECTIONS REGARDING LOSS INFORMA4 TION.—

5 (1) PROHIBITION OF DISCLOSURE OF LOSS IN6 FORMATION.—Notwithstanding any other provision

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

8 the public or otherwise disclose any information sub9 mitted under this Act regarding the amount or num10 ber of claims paid by any insurer, the amount of

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

12 insurer, except—

13 (A) in the form of a loss ratio (expressing

14 the relationship of claims paid to premiums)

15 made available or disclosed in compliance with

16 the provisions of paragraph (2); or

17 (B) as provided in paragraph (3).

18 (2) PROTECTION OF IDENTITY OF INSURER.—

19 In making available to the public or otherwise dis20 closing a loss ratio for an insurer—

21 (A) the Secretary may not identify the in22 surer to which the loss ratio relates; and

23 (B) the Secretary may disclose the loss

24 ratio only in a manner that does not allow any

25 party to determine the identity of the specific
31

•S 380 IS

1 insurer to which the loss ratio relates, except

2 parties having access to information under

3 paragraph (3).

4 (3) CONFIDENTIALITY OF INFORMATION DIS5 CLOSED TO GOVERNMENTAL AGENCIES.—The Sec6 retary may make information referred to in para7 graph (1) and the identity of the specific insurer to

8 which such information relates available to any Fed9 eral entity and any State agency responsible for reg10 ulating insurance in a State and may otherwise dis11 close such information to any such entity or agency,

12 but only to the extent such entity or agency agrees

13 not to make any such information available or dis14 close such information to any other person.

15 SEC. 13. DESIGNATIONS.

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

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

18 MSA’s:

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

20 5 annual reporting periods to which the reporting re21 quirements under this Act apply (pursuant to sec22 tion 24), any of the 150 MSA’s selected as follows:

23 (A) The Secretary shall select the 50

24 MSA’s having the largest populations, as deter25 mined by the Secretary and specified in regula-
32

•S 380 IS

1 tions issued pursuant to section 22, which shall

2 not be amended or revised after issuance.

3 (B) The Secretary shall select 100 addi4 tional MSA’s, on a basis that provides for—

5 (i) geographic diversity among the

6 designated MSA’s under this paragraph;

7 and

8 (ii) diversity in size of the populations

9 among such MSA’s.

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

11 annual reporting periods thereafter, an MSA for

12 which a designation under this paragraph is in ef13 fect, pursuant to the following requirements:

14 (A) The designations shall be made for

15 each of the successive 5-year periods at the

16 time provided in subparagraph (C), and the

17 first such period shall be the 5-year period be18 ginning upon the commencement of the sixth

19 annual reporting period to which the reporting

20 requirements under this Act apply.

21 (B) The Secretary shall designate not less

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

23 such 5-year period and shall designate such

24 MSA’s based upon the information and rec-
33

•S 380 IS

1 ommendations made in the report under section

2 18(b) relating to the period.

3 (C) The Secretary shall make the designa4 tion of MSA’s for an ensuing 5-year period by

5 regulations issued—

6 (i) not later than 12 months before

7 the commencement of the 5-year period;

8 and

9 (ii) not later than 6 months after the

10 submission to the Secretary of the report

11 under section 20(b) relating to such pe12 riod.

13 (D) The designations of MSA’s for a 5-

14 year period shall take effect upon the com15 mencement of the first annual reporting period

16 of the 5-year period beginning not less than 12

17 months after the issuance of the regulations

18 making such designations, and shall remain in

19 effect until the expiration of the 5-year period.

20 Notwithstanding any other provision of this section, the

21 designation of an MSA shall remain in effect until a suc22 ceeding designation of MSA’s under paragraph (2) takes

23 effect.

24 (b) DESIGNATION OF INSURERS.—The Secretary

25 shall designate, for each designated line and each State,
34

•S 380 IS

1 insurers doing business in the lines as designated insurers

2 in the State for purposes of this Act, subject to the follow3 ing requirements:

4 (1) HIGHEST AGGREGATE PREMIUM VOLUME.—

5 (A) GENERAL RULE.—For each State, the

6 Secretary shall designate, for each designated

7 line, each of the insurers and insurer groups in8 cluded in the class established under this para9 graph for the State.

10 (B) DETERMINATION.—In each State, the

11 Secretary shall rank the insurers and insurer

12 groups in each designated line from the insurer

13 or group having the largest aggregate premium

14 volume in the State for such line to the insurer

15 or group having the smallest such aggregate

16 premium volume and shall include in the class

17 for the State only—

18 (i) the insurer or group of the highest

19 rank;

20 (ii) each insurer or group of succes21 sively lower rank if the inclusion of such

22 insurer or group in the class does not re23 sult in the sum of such aggregate premium

24 volumes for insurers and groups in the

25 class exceeding 80 percent of the total ag-
35

•S 380 IS

1 gregate premium volume in the State for

2 the line; and

3 (iii) the first such successively lower

4 ranked insurer or insurer group whose in5 clusion in the class results in such sum ex6 ceeding 80 percent of the total aggregate

7 premium volume in the State for the line.

8 (2) MINIMUM AGGREGATE PREMIUM VOLUME.—

9 For each State, the Secretary shall designate, for

10 each designated line, each insurer and insurer group

11 not designated pursuant to paragraph (1) whose

12 premium volume in the State for the designated line

13 exceeds 1 percent of the total aggregate premium

14 volume in the State for the line.

15 (3) FAIR PLANS AND JOINT UNDERWRITING

16 ASSOCIATIONS.—For each State, the Secretary shall

17 designate, for each designated line—

18 (A) each statewide plan under part A of

19 title XII of the National Housing Act to assure

20 fair access to insurance requirements; and

21 (B) each joint underwriting association;

22 that provides insurance under such line.

23 (4) DURATION.—The Secretary shall designate

24 insurers under this subsection once every 5 years.

25 Each insurer designated shall be a designated in-
36

•S 380 IS

1 surer for each of the first 5 successive annual re2 porting periods commencing after such designation.

3 (c) DESIGNATION OF LINES OF INSURANCE.—

4 (1) IN GENERAL.—The Secretary shall, by reg5 ulation, designate homeowners, dwelling fire, and al6 lied lines of insurance as designated lines for pur7 poses of this Act, and shall distinguish the coverage

8 types in such lines by the perils covered and by mar9 ket or replacement value. For purposes of this Act,

10 homeowners insurance shall not include any renters

11 coverage or coverage for the personal property of a

12 condominium owner.

13 (2) REPORT.—At any time the Secretary deter14 mines that any line of insurance not described in

15 paragraph (1) should be a designated line because

16 disparities in coverage provided under such line exist

17 among geographic areas having different income lev18 els or racial composition, the Secretary shall submit

19 a report recommending designating such line of in20 surance as a designated line for purposes of this Act

21 to the Committee on Banking, Finance and Urban

22 Affairs of the House of Representatives and the ap23 propriate committees of the Senate.

24 (3) DURATION.—
37

•S 380 IS

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

2 subparagraph (B), the Secretary shall make the

3 designations under this subsection once every 5

4 years, by regulation, and each line and subline

5 or coverage type designated under such regula6 tions shall be designated for each of the first 5

7 successive annual reporting periods occurring

8 after issuance of the regulations.

9 (B) ALTERATION.—During any 5-year pe10 riod referred to in subparagraph (A) in which

11 designations are in effect, the Secretary may

12 amend or revise the designated lines, sublines,

13 and coverage types only by regulation and only

14 in accordance with the requirements of this

15 subsection. Such regulations amending or revis16 ing designations shall apply only to annual re17 porting periods beginning after the expiration

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

19 issuance of the regulations.

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

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

22 (c)(3)(A) and notify interested parties during the 6-month

23 period ending 6 months before the commencement of the

24 first annual reporting period to which such designations

25 apply.
38

•S 380 IS

1 (e) OBTAINING INFORMATION.—The Secretary may

2 require insurers to submit to the Secretary such informa3 tion as the Secretary considers necessary to make designa4 tions specifically required under this Act. The Secretary

5 may not require insurers to submit any information under

6 this subsection that relates to any line of insurance not

7 specifically authorized to be designated pursuant to this

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

9 under subsection (c)(2).

10 SEC. 14. IMPROVED METHODS AND REPORTING ON BASIS

11 OF OTHER AREAS.

12 (a) DEVELOPMENT OF IMPROVED METHODS.—The

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

14 methods of matching addresses and applicable regions to

15 facilitate compliance by insurers, in as economical a man16 ner as possible, with the requirements of this Act. The

17 Secretary shall allow insurers, or statistical agents acting

18 on behalf of insurers, to match addresses and applicable

19 regions through the use of 9-digit zip codes if the Sec20 retary determines that such use will substantially reduce

21 the cost and burden to insurers of such matching without

22 significant adverse impact on the reliability of the match23 ing.

24 (b) ADDRESS CONVERSION SOFTWARE.—The Sec25 retary shall make available, to any insurer required to pro-
39

•S 380 IS

1 vide information to the Secretary under this Act, computer

2 software that can be used to convert addresses to applica3 ble regions within designated MSA’s. The software shall

4 be made available in forms that provide such conversion

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

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

7 not later than 6 months before the first annual reporting

8 period to which the reporting requirements under this Act

9 apply (pursuant to section 26) and shall be updated annu10 ally. The software shall be made available without charge,

11 except for an amount, determined by the Secretary, which

12 shall not exceed the actual cost of reproducing the soft13 ware.

14 (c) CONVERTIBILITY.—

15 (1) AUTHORITY.—The Secretary may, by regu16 lation, provide for insurers to comply with the re17 quirements under sections 4, 5, and 8(b) by report18 ing the information required under such sections on

19 the basis of geographical location other than MSA

20 and applicable region, but only if the Secretary de21 termines that information reported on such other

22 basis is convertible to the basis of MSA and applica23 ble region and such conversion does not affect the

24 accuracy of the information.
40

•S 380 IS

1 (2) LIMITATION.—With respect to any informa2 tion submitted on the basis of geographical location

3 other than designated MSA and applicable region

4 pursuant to paragraph (1), the Secretary may dis5 close the information only on the basis of designated

6 MSA and applicable region.

7 SEC. 15. ANNUAL REPORTING PERIOD.

8 (a) IN GENERAL.—For purposes of this Act, the an9 nual reporting periods shall be the 12-month periods com10 mencing in each calendar year on the same day, which

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

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

13 6-month period beginning on the date of enactment of this

14 Act, the Secretary shall, by regulation, select a day of the

15 year upon which all annual reporting periods shall com16 mence. In determining such day, the Secretary shall con17 sider the reporting periods used for purposes of State and

18 other insurance statistical reporting systems, in order to

19 minimize the burdens on insurers.

20 SEC. 16. DISCLOSURES BY INSURERS TO APPLICANTS AND

21 POLICYHOLDERS.

22 (a) IN GENERAL.—The Secretary shall, by regula23 tion, require the following disclosures:

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

25 the insurer, or an agent or broker, declines a written
41

•S 380 IS

1 application or written request to issue an insurance

2 policy under a designated line shall provide to the

3 applicant at the time of such declination, through

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

5 (A) A written explanation of the specific

6 reasons for the declination.

7 (B) Written notice that—

8 (i) the applicant may submit to the

9 insurer, agent, or broker, within 90 days of

10 such notice, a written request for a written

11 explanation of the reasons for the declina12 tion; and

13 (ii) pursuant to such a request, an ex14 planation shall be provided to the applicant

15 within 21 days after receipt of such re16 quest.

17 (2) PROVISION OF EXPLANATION.—If an in18 surer, agent, or broker making a declination receives

19 a written request referred to in paragraph (1)(B)

20 within such 90-day period, the insurer, agent, or

21 broker shall provide a written explanation referred

22 to in such subparagraph within such 21-day period.

23 (3) POLICYHOLDERS.—Each insurer that can24 cels or refuses to renew an insurance policy under

25 a designated line shall provide to the policyholder, in
42

•S 380 IS

1 writing and within an appropriate period of time as

2 determined by the Secretary, the reasons for cancel3 ing or refusing to renew the policy.

4 (b) MODEL ACTS.—In issuing regulations under sub5 section (a), the Secretary shall consider relevant portions

6 of model acts developed by the National Association of In7 surance Commissioners.

8 (c) PREEMPTION.—Subsection (a) shall not be con9 strued to annul, alter, or effect, or exempt any insurer,

10 agent, or broker subject to the provisions of subsection

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

12 State with respect to notifying insurance applicants or pol13 icyholders of the reasons for declination or cancellation of,

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

15 such laws or requirements are inconsistent with subsection

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

17 to the extent of such inconsistency. The Secretary is au18 thorized to determine whether such inconsistencies exist

19 and to resolve issues regarding such inconsistencies. The

20 Secretary may not provide that any State law or require21 ment is inconsistent with subsection (a) if it imposes re22 quirements equivalent to the requirements under such

23 subsection or requirements that are more stringent or

24 comprehensive, in the determination of the Secretary.
43

•S 380 IS

1 (d) IMMUNITY.—In issuing regulations under sub2 section (a), the Secretary shall specifically consider the ne3 cessity of providing insurers, agents, and brokers with im4 munity solely for the act of conveying or communicating

5 the reasons for a declination or cancellation of, or refusal

6 to renew insurance on behalf of a principal making such

7 decision. The Secretary may provide for immunity under

8 the regulations issued under subsection (a) if the Sec9 retary determines that such a provision is necessary and

10 in the public interest, except that the Secretary may not

11 provide immunity for any conduct that is negligent, reck12 less, or willful.

13 (e) ENFORCEMENT.—The Secretary may authorize

14 the States to enforce the requirements under regulations

15 issued under subsection (a).

16 SEC. 17. ENFORCEMENT.

17 (a) CIVIL PENALTIES.—Any insurer who is deter18 mined by the Secretary, after providing opportunity for

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

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

21 not to exceed $5,000 for each day during which such viola22 tion continues.

23 (b) INJUNCTION.—The Secretary may bring an ac24 tion in an appropriate United States district court for ap25 propriate declaratory and injunctive relief against any in-
44

•S 380 IS

1 surer who violates the requirements referred to in sub2 section (a).

3 (c) INSURER LIABILITY.—An insurer shall be respon4 sible under subsections (a) and (b) for any violation of

5 a statistical agent acting on behalf of the insurer.

6 SEC. 18. REPORTS.

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

8 report to the Committee on Banking, Finance and Urban

9 Affairs of the House of Representatives and the appro10 priate committees of the Senate on the implementation of

11 this Act and shall make recommendations to such commit12 tees on such additional legislation as the Secretary deems

13 appropriate to carry out this Act. The Secretary shall in14 clude in each annual report a description of any com15 plaints or problems resulting from the implementation of

16 this Act, of which the Secretary has knowledge, made by

17 (or on behalf of) insurance policyholders that concern the

18 disclosure of information regarding policyholders and any

19 recommendations for addressing such problems. Each re20 port shall specifically address whether granting property

21 and casualty insurance powers to other financial

22 intermediaries would significantly reduce redlining and

23 other discriminatory insurance practices and the Secretary

24 shall consult with the appropriate financial institution reg25 ulators regarding such issues in preparing the report.
45

•S 380 IS

1 (b) GAO REPORTS.—

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

3 the United States shall submit a report under this

4 subsection to the Secretary and the Congress for

5 each 5-year period referred to in sections 6(c)(2)

6 and 13(a)(2), which contains information to be used

7 by the Secretary in implementing this Act during

8 such period.

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

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

11 later than 18 months before the commencement of

12 the period to which the report relates.

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

14 shall include the following information:

15 (A) An analysis of the adequacy of the im16 plementation of this Act and any recommenda17 tions of the Comptroller General for improving

18 the implementation.

19 (B) The costs to the Federal Government,

20 insurers, and consumers of implementing and

21 complying with this Act.

22 (C) Any beneficial or harmful effects re23 sulting from the requirements of this Act.

24 (D) An analysis of whether, considering

25 the purposes of this Act, insurers are required
46

•S 380 IS

1 by this Act (or by implementing regulations) to

2 submit appropriate information.

3 (E) An analysis of whether sufficient evi4 dence exists of patterns of disparities in the

5 availability, affordability, and quality or type of

6 insurance coverage to warrant continued appli7 cability of the requirements of this Act.

8 (F) An analysis of whether the group of

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

10 report are appropriate for purposes of this Act.

11 (G) Specific recommendations, for use by

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

13 year period for which the report is made, with

14 regard to—

15 (i) the characteristics of MSA’s that

16 should be included in the group of des17 ignated MSA’s;

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

19 be included in the group;

20 (iii) the number of MSA’s having each

21 particular characteristic that should be in22 cluded in the group; and

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

24 number of MSA’s having each such char25 acteristic, that should be removed from the
47

•S 380 IS

1 group of designated MSA’s in effect at the

2 time of the report.

3 (H) With respect only to the first report

4 required under this subsection, recommenda5 tions of whether the study conducted under sec6 tion 5 should be continued beyond the date in

7 section 5(b)(8) and, if so, whether the require8 ments regarding the submission of information

9 under the study should be expanded or changed

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

11 or coverage types of insurance, and types of

12 small businesses, or whether the study should

13 be allowed to terminate under law.

14 (I) An analysis of whether the group of

15 designated rural areas in effect at the time of

16 the report are appropriate for purposes of this

17 Act.

18 (J) Specific recommendations, for use by

19 the Secretary in designating rural areas for

20 purposes of section 6 for the 5-year period for

21 which the report is made, with regard to—

22 (i) the characteristics of rural areas

23 that should be included in the group of

24 designated rural areas under such section;
48

•S 380 IS

1 (ii) the number of rural areas having

2 each particular characteristic that should

3 be included in the group; and

4 (iii) the characteristics of rural areas,

5 and number of rural areas having each

6 such characteristic, that should be removed

7 from the group of designated rural areas

8 in effect at the time of the report.

9 (K) Any other information or recommenda10 tions relating to the requirements or implemen11 tation of this Act that the Comptroller General

12 considers appropriate.

13 (4) CONSULTATION.—In preparing each report

14 under this subsection, the Comptroller General shall

15 consult with Federal agencies having appropriate ex16 pertise, the National Association of Insurance Com17 missioners, State insurance regulators, statistical

18 agents, representatives of small businesses, rep19 resentatives of insurance agents (including minority

20 insurance agents) and property and casualty insur21 ers, and community, consumer, and civil rights orga22 nizations.

23 SEC. 19. TASK FORCE ON AGENCY APPOINTMENTS.

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

25 the date of enactment of this Act, the Secretary shall es-
49

•S 380 IS

1 tablish a task force on insurance agency appointments

2 (hereafter in this section referred to as the ‘‘Task Force’’).

3 The Task Force shall—

4 (1) consist of representatives of appropriate

5 Federal agencies, property and casualty insurance

6 agents, including specifically minority insurance

7 agents, property and casualty insurers, State insur8 ance regulators, and community, consumer, and civil

9 rights organizations;

10 (2) have a significant representation from mi11 nority insurance agents; and

12 (3) be chaired by the Secretary or the Sec13 retary’s designee.

14 (b) FUNCTION.— The Task Force shall—

15 (1) review the problems inner-city and minority

16 agents may have in receiving appointments to rep17 resent property and casualty insurers and consider

18 the effects such problems have on the availability,

19 affordability, and quality or type of insurance, espe20 cially in underserved areas;

21 (2) review the practices of insurers in terminat22 ing agents and consider the effects such practices

23 have on the availability, affordability, and quality or

24 type of insurance, especially in underserved areas;

25 and
50

•S 380 IS

1 (3) recommend solutions to improve the ability

2 of inner-city and minority insurance agents to mar3 ket property and casualty insurance products, in4 cluding steps property and casualty insurers should

5 take to increase their appointments of such agents.

6 (c) REPORT AND TERMINATION.—The Task Force

7 shall report to the Committee on Banking, Finance and

8 Urban Affairs of the House of Representatives and the

9 appropriate committees of the Senate its findings under

10 paragraphs (1) and (2) of subsection (b) and its rec11 ommendations under paragraph (3) of subsection (b) not

12 later than 2 years after the date of enactment of this Act.

13 The Task Force shall terminate on the date on which the

14 report is submitted to the committees.

15 SEC. 20. STUDIES.

16 (a) STUDY OF INSURANCE PRESCREENING.—

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

18 a study to determine the feasibility and utility of re19 quiring insurers to report information with respect

20 to the characteristics of applicants for insurance and

21 reasons for rejection of applicants. The study shall

22 examine the extent to which—

23 (A) oral applications or representations are

24 used by insurers and agents in making deter-
51

•S 380 IS

1 minations regarding whether or not to insure a

2 prospective insured;

3 (B) written applications are used by insur4 ers and agents in making determinations re5 garding whether or not to insure a prospective

6 insured;

7 (C) written applications are submitted

8 after the insurer or agent has already made a

9 determination to provide insurance to a pro10 spective insured or has determined that the pro11 spective insured is eligible for insurance; and

12 (D) prospective insured persons are dis13 couraged from submitting applications for in14 surance based, in whole or in part, on—

15 (i) the location of the risk to be in16 sured;

17 (ii) the racial characteristics of the

18 prospective insured;

19 (iii) the racial composition of the

20 neighborhood in which the risk to be in21 sured is located; and

22 (iv) in the case of residential property

23 insurance, the age and value of the risk to

24 be insured.
52

•S 380 IS

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

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

3 Committee on Banking, Finance and Urban Affairs

4 of the House of Representatives and the appropriate

5 committees of the Senate, not later than 2 years

6 after the date of enactment of this Act. The report

7 shall include recommendations of the Secretary—

8 (A) with respect to requiring insurers to

9 report on the disposition of oral and written ap10 plications for insurance; and

11 (B) for any legislation that the Secretary

12 considers appropriate regarding the issues de13 scribed in the report.

14 (b) STUDY OF INSURER ACTIONS TO MEET INSUR15 ANCE NEEDS OF CERTAIN NEIGHBORHOODS.—The Sec16 retary shall conduct a study of various practices, actions,

17 and methods undertaken by insurers to meet the property

18 and casualty insurance needs of residents of low- and mod19 erate-income neighborhoods, minority neighborhoods, and

20 small businesses located in such neighborhoods. The Sec21 retary shall report the results of the study, including any

22 recommendations, to the Committee on Banking, Finance

23 and Urban Affairs of the House of Representatives and

24 the appropriate committees of the Senate, not later than

25 2 years after the date of enactment of this Act.
53

•S 380 IS

1 (c) STUDY OF DISPARATE CLAIMS TREATMENT.—

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

3 a study to determine whether, and the extent to

4 which, insurers engage in disparate treatment in

5 handling claims of policyholders under designated

6 lines of insurance based on the race, gender, and in7 come level of the policyholder, and on the racial

8 characteristics and income levels of the area in

9 which the insured risk is located. In conducting the

10 study, the Secretary shall specifically consider

11 whether residents of low-income neighborhoods or

12 areas and minority neighborhoods or areas are more

13 likely than residents of other areas to have their

14 claims contested or their insurance coverage can15 celed.

16 (2) REPORT.—The Secretary shall submit a re17 port on the results of the study to the Committee on

18 Banking, Finance and Urban Affairs of the House

19 of Representatives and the appropriate committees

20 of the Senate, not later than 2 years after the date

21 of enactment of this Act.

22 (d) STUDY OF RATING TERRITORIES.—The Sec23 retary shall conduct a study to determine whether the

24 practice in the insurance industry of basing insurance pre25 mium amounts on the territory in which the insured risk
54

•S 380 IS

1 is located has a disparate impact on the availability, af2 fordability, or quality of insurance by race, gender, or type

3 of neighborhood. The Secretary shall submit a report on

4 the results of the study to the Committee on Banking, Fi5 nance and Urban Affairs of the House of Representatives

6 and the appropriate committees of the Senate, not later

7 than 12 months after the date of enactment of this Act.

8 (e) STUDY OF INSURER REINVESTMENT REQUIRE9 MENTS.—

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

11 a study to determine the feasibility of requiring in12 surers to reinvest in communities and neighborhoods

13 from which they collect premiums for insurance and

14 whether, and the extent to which, community rein15 vestment requirements for insurers should be estab16 lished that are comparable to the community rein17 vestment requirements applicable to depository insti18 tutions. The Secretary shall consult with representa19 tives of insurers and consumer, community, and civil

20 rights organizations regarding the results of the

21 study and any recommendations to be made based

22 on the results of the study.

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

24 results of the study, including any such rec25 ommendations, to the Committee on Banking, Fi-
55

•S 380 IS

1 nance and Urban Affairs of the House of Represent2 atives and the appropriate committees of the Senate,

3 not later than 6 months after the conclusion of the

4 first annual reporting period to which the reporting

5 requirements under this Act apply (pursuant to sec6 tion 26).

7 SEC. 21. EXEMPTION AND RELATION TO STATE LAWS.

8 (a) EXEMPTION FOR UNITED STATES PROGRAMS.—

9 Reporting shall not be required under this Act with re10 spect to insurance provided by any program underwritten

11 or administered by the United States.

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

13 annul, alter, or affect, or exempt the obligation of any in14 surer subject to this Act to comply with the laws of any

15 State or subdivision thereof with respect to public disclo16 sure, submission of information, and recordkeeping.

17 SEC. 22. REGULATIONS.

18 (a) IN GENERAL.—The Secretary shall issue any reg19 ulations required under this Act and any other regulations

20 that may be necessary to carry out this Act. The regula21 tions shall be issued through rulemaking in accordance

22 with the procedures under section 553 of title 5, United

23 States Code, for substantive rules. Except as otherwise

24 provided in this Act, such final regulations shall be issued
56

•S 380 IS

1 not later than the expiration of the 18-month period begin2 ning on the date of enactment of this Act.

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

4 Secretary shall take into consideration the administrative,

5 paperwork, and other burdens on insurance agents, includ6 ing independent insurance agents, involved in complying

7 with the requirements of this Act and shall minimize the

8 burdens imposed by such requirements with respect to

9 such agents.

10 SEC. 23. DEFINITIONS.

11 For purposes of this Act, the following definitions

12 shall apply:

13 (1) AGENT.—The term ‘‘agent’’ means, with re14 spect to an insurer, an agent licensed by a State

15 who sells property and casualty insurance. The term

16 includes agents who are employees of the insurer,

17 agents who are independent contractors working ex18 clusively for the insurer, and agents who are inde19 pendent contractors appointed to represent the in20 surer on a nonexclusive basis.

21 (2) APPLICABLE REGION.—The term ‘‘applica22 ble region’’ means, with respect to a designated

23 MSA—
57

•S 380 IS

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 homeowner’s, dwell10 ing fire, allied lines, and other personal lines of in11 surance.

12 (4) DESIGNATED INSURER.—The term ‘‘des13 ignated insurer’’ means, with respect to a designated

14 line, an insurer designated for a State by the Sec15 retary under section 13(b) as a designated insurer

16 for such line or any insurer that is part of an in17 surer group selected under such section.

18 (5) DESIGNATED INVESTMENT.—The term

19 ‘‘designated investment’’ means making or purchas20 ing a loan for the purchase of commercial real es21 tate, making or purchasing a mortgage loan for the

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

23 purchasing a commercial or industrial loan.

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

25 line’’ means a line of insurance or bid, performance,
58

•S 380 IS

1 and payment bonds designated by the Secretary

2 under section 13(c).

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

4 means, with respect to an insurance policy, an ex5 pression of an exposure unit covered under the pol6 icy compared to the duration of the policy (pursuant

7 to standards established by the Secretary for uni8 form reporting of exposures).

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

10 units’’ means a dwelling covered under an insurance

11 policy for homeowners, dwelling fire, or allied lines

12 coverage.

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

14 property and casualty insurance. Such term includes

15 primary insurance, surplus lines insurance, and any

16 other arrangement for the shifting and distributing

17 of risks that is determined to be insurance under the

18 law of any State in which the insurer or insurer

19 group engages in an insurance business.

20 (10) INSURER.—Except with respect to section

21 8, the term ‘‘insurer’’ means any corporation, asso22 ciation, society, order, firm, company, mutual, part23 nership, individual, aggregation of individuals, or

24 any other legal entity that is authorized to transact

25 the business of property or casualty insurance in any
59

•S 380 IS

1 State or that is engaged in a property or casualty

2 insurance business. The term includes any certified

3 foreign direct insurer, but does not include an indi4 vidual or entity which represents an insurer as agent

5 solely for the purpose of selling or which represents

6 a consumer as a broker solely for the purpose of

7 buying insurance.

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

9 respect to an insurance policy, newly issued or re10 newed.

11 (12) JOINT UNDERWRITING ASSOCIATION.—The

12 term ‘‘joint underwriting association’’ means an un13 incorporated association of insurers established to

14 provide a particular form of insurance to the public.

15 (13) MORTGAGE INSURANCE.—The term

16 ‘‘mortgage insurance’’ means insurance against the

17 nonpayment of, or default on, a mortgage or loan

18 for residential or commercial property.

19 (14) MSA.—The term ‘‘MSA’’ means a Metro20 politan Statistical Area or a Primary Metropolitan

21 Statistical Area.

22 (15) PRIVATE MORTGAGE INSURANCE.—The

23 term ‘‘private mortgage insurance’’ means mortgage

24 insurance other than mortgage insurance made

25 available under the National Housing Act, title 38 of
60

•S 380 IS

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

2 Act of 1949.

3 (16) PROPERTY AND CASUALTY INSURANCE.—

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

5 insurance against loss of or damage to property, in6 surance against loss of income or extra expense in7 curred because of loss of, or damage to, property,

8 and insurance against third party liability claims

9 caused by negligence or imposed by statute or con10 tract. Such term does not include workers’ com11 pensation, professional liability, or title insurance.

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

13 market’’ means an assigned risk plan, joint under14 writing association, or any similar mechanism de15 signed to make insurance available to those unable

16 to obtain it in the voluntary market. The term in17 cludes each statewide plan under part A of title XII

18 of the National Housing Act to assure fair access to

19 insurance requirements.

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

21 means any area that—

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

23 (B) has a continuous boundary; and

24 (C) contains only areas that are rural

25 areas, as such term is defined in section 520 of
61

•S 380 IS

1 the Housing Act of 1949 (except that clause

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

3 purposes of this Act).

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

5 means the Secretary of Housing and Urban Develop6 ment.

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

8 State, the District of Columbia, the Commonwealth

9 of Puerto Rico, the Northern Mariana Islands, the

10 Virgin Islands, American Samoa, and the Trust Ter11 ritory of the Pacific Islands.

12 SEC. 24. EFFECTIVE DATE.

13 The requirements of this Act relating to reporting of

14 information by insurers shall take effect with respect to

15 the first annual reporting period that begins not less than

16 3 years after the date of enactment of this Act.

Æ

S 380 IS——2

S 380 IS——3

S 380 IS——4

S 380 IS——5