Union Calendar No. 150

103D CONGRESS

1ST SESSION H. R. 1188

[Report No. 103–270]

A BILL

To provide for disclosures for insurance in

S

interstate commerce.

EPTEMBER 29, 1993

Reported with an amendment, committed to the Commitordered to be printed tee of the Whole House on the State of the Union, and
IB

Union Calendar No. 150

103D CONGRESS

1ST SESSION H. R. 1188

[Report No. 103–270]

To provide for disclosures for insurance in interstate commerce.

IN THE HOUSE OF REPRESENTATIVES

MARCH 3, 1993

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

the Committee on Energy and Commerce

SEPTEMBER 29, 1993

Additional sponsors: Mr. TOWNS, Mr. REYNOLDS, Mr. OWENS, Mr. DELLUMS,

Mr. GENE GREEN of Texas, Mr. FRANKS of Connecticut, Mrs. CLAYTON,

Mr. CLAY, Mr. JEFFERSON, Miss COLLINS of Michigan, Mr. SERRANO,

Mr. RANGEL, Mr. BLACKWELL, Mr. FOGLIETTA, Mr. FILNER, Mrs.

MEEK, Mr. DIXON, Mr. HASTINGS, Mr. FROST, Ms. EDDIE BERNICE

JOHNSON of Texas, Mr. WATT, Mr. MFUME, Ms. NORTON, Mr. MARKEY,

Mr. GUTIERREZ, and Mr. TUCKER

SEPTEMBER 29, 1993

Reported with an amendment, committed to the Committee of the Whole

House on the State of the Union and ordered to be printed

[Strike out all after the enacting clause and insert the part printed in italic]

[For text of introduced bill, see copy of bill as introduced on March 3, 1993]

A BILL

To provide for disclosures for insurance in interstate

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Anti Redlining in Insur5 ance Disclosure Act’’.

6 SEC. 2. FINDINGS AND CONSTRUCTION.

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

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

11 racial composition could adversely affect interstate

12 commerce and the cost and availability of insurance

13 for consumers, and

14 (2) appropriate disclosures of information by in15 surers would benefit consumers and insurance regu16 lators.

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

18 to, nor shall it be construed to, encourage unsound under19 writing practices.

20 SEC. 3. MAINTENANCE OF INFORMATION AND PUBLIC DIS21 CLOSURE.

22 (a) GENERAL RULE.—

23 (1) DESIGNATED INSURERS.—

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

25 subsection (b)(7), each designated insurer shall,
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1 in accordance with subsection (b), annually com2 pile, submit to the Secretary, and make available

3 to the public for each calendar year and for des4 ignated lines of insurance in a designated

5 MSA—

6 (i) the total number of policies, total

7 exposure units (in car years and house

8 years), and total earned premium of insur9 ance policies by designated line which were

10 issued by such insurer and the new written

11 exposure units, exposure units canceled, and

12 the exposure units not renewed by such in13 surer, and

14 (ii) the number of licensed agents of

15 such insurer whose principal place of busi16 ness is located in such designated MSA and

17 the number within each 5-digit zip code in

18 such designated MSA and with respect to

19 each such agent, whether such agent is an

20 employee, independent contractor working

21 exclusively for such insurer, or an inde22 pendent contractor appointed to represent

23 such insurer on a non-exclusive basis.
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1 (B) SUBMISSIONS AND AVAILABILITY.—The

2 information described in subparagraph (A) shall

3 be—

4 (i) submitted to the Secretary in ac5 cordance with subsection (d), and

6 (ii) made available to the public, in

7 accordance with subsection (b)(2), for in8 spection and copying, at cost, at the home

9 office of the insurer and at a central deposi10 tory, established under subsection (c), by the

11 Secretary.

12 (2) NON-DESIGNATED INSURERS.—Except as

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

14 sells an insurance policy in a designated line of in15 surance in a designated MSA and which is not a des16 ignated insurer in such MSA shall submit to the Sec17 retary for each calendar year in accordance with sub18 section (d) and regulations of the Secretary the total

19 exposure units (in car years and house years) of in20 surance policies in a designated line sold in such

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

22 report the designated MSA where the insured risks

23 are located for which such insurance is issued and

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

25 the risk is located.
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1 (b) REQUIREMENTS.—

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

3 maintained and made available under subsection

4 (a)(1) shall be itemized in order to clearly and con5 spicuously disclose the policies, the exposure units,

6 and the premium amount for each line of insurance

7 for which information is required and be itemized by

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

9 (2) AVAILABILITY TO THE PUBLIC.—The infor10 mation required to be maintained and made available

11 under subsection (a) shall be made available to the

12 public on a timetable determined by the Secretary but

13 not later than October 1 of the calendar year follow14 ing the calendar year for which the information is re15 quired to be made available, except that such infor16 mation shall not be made available to the public until

17 it is available in its entirety but it shall be made

18 available if not all the information required to be re19 ported is available on such October 1 or on the date

20 determined by the Secretary.

21 (3) SPECIFICATION OF DATA.—

22 (A) IN GENERAL.—With respect to informa23 tion which is required to be maintained and

24 made available under subsection (a)(1), the Sec25 retary shall by regulation establish specifications
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1 for the collection and public reporting of such in2 formation with respect to the following lines of

3 insurance: private passenger automobile, home4 owners, and dwelling fire and allied lines. The

5 specifications shall—

6 (i) provide that information be aggre7 gated among similar policyholders and re8 ported on that basis,

9 (ii) be designed to collect information

10 with respect to the availability, cost, and

11 type of insurance coverage between and

12 among various geographic areas,

13 (iii) detail what data elements should

14 be collected,

15 (iv) provide for the collection of infor16 mation on an individual insurer basis,

17 (v) minimize burdens on insurance

18 agents, including independent insurance

19 agents,

20 (vi) provide the data required by

21 clause (ii) with the least burden on insur22 ers, particularly small insurers,

23 (vii) take into account the types of

24 data collected under the Home Mortgage

25 Disclosure Act of 1975,
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1 (viii) take into account existing statis2 tical reporting systems in the insurance in3 dustry,

4 (ix) require itemization by 5-digit zip

5 code, and

6 (x) include information on policies

7 written in a residual market.

8 (B) CONSULTATIONS.—In developing the

9 specifications in subparagraph (A), the Secretary

10 shall consult with—

11 (i) other Federal agencies with appro12 priate expertise,

13 (ii) State insurance regulators,

14 (iii) representatives of the insurance

15 industry, including statistical agents,

16 (iv) representatives of insurance pro17 ducers, including minority insurance pro18 ducers, and

19 (v) consumer, community, and civil

20 rights groups who are representative of a

21 diversity of geographic locations.

22 (C) EFFECTIVE DATE.—The regulation

23 under subparagraph (A) shall be issued no later

24 than 270 days after the date of the enactment of

25 this Act.
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1 (4) COMMERCIAL INSURANCE STUDY AND PILOT

2 PROJECT.—

3 (A) STUDY.—The Secretary shall conduct a

4 study regarding the availability of commercial

5 insurance (other than professional liability in6 surance, workers compensation insurance, and

7 title insurance) with special emphasis on the

8 availability of commercial insurance for small

9 business. The study shall focus on—

10 (i) an appropriate definition for small

11 business; and

12 (ii) preliminary views regarding the

13 availability, cost, and type of insurance

14 coverage for small business, which may be

15 based on surveys of members of the small

16 business community.

17 In conducting the study, the Secretary shall con18 sult with interested parties from a diversity of

19 locations, including State insurance regulators,

20 consumer, community, and civil rights groups,

21 representatives of small business, representatives

22 of the insurance industry, including statistical

23 agents, and representatives of insurance produc24 ers, including minority insurance producers. The

25 Secretary shall submit a report detailing the
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1 findings of the study to the Committee on En2 ergy and Commerce of the House of Representa3 tives and the appropriate committee of the Sen4 ate no later than 18 months following the date

5 of enactment of this Act.

6 (B) PROPOSAL OF PILOT PROJECT.—Con7 current with the conduct of the study under sub8 paragraph (A), the Secretary shall develop a

9 proposed data collection pilot project in the 5

10 largest MSA’s to help determine the need for any

11 further data collection requirements to evaluate

12 the availability, cost, and type of insurance cov13 erage for small business. In developing the pro14 posed pilot project, the Secretary shall consult

15 with interested parties from a diversity of loca16 tions, including State insurance regulators,

17 consumer, community, and civil rights groups,

18 representatives of small business, representatives

19 of the insurance industry, including statistical

20 agents, and representatives of insurance produc21 ers, including minority insurance producers. The

22 Secretary shall submit a specific proposal for a

23 pilot project to the Committee on Energy and

24 Commerce of the House of Representatives and

25 the appropriate committee of the Senate no later
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1 than 18 months following the date of enactment

2 of this Act.

3 (C) SPECIFICATIONS FOR PILOT PROJECT.—

4 Immediately following the submission of the pro5 posal for a pilot project, the Secretary shall, by

6 regulation, establish specifications for the collec7 tion and public reporting of information with

8 respect to commercial insurance for the proposed

9 pilot project. As part of the specifications, the

10 Secretary shall designate the 5 largest MSA’s for

11 purposes of the pilot project. The specifications

12 shall—

13 (i) provide that information be aggre14 gated among similar policyholders and re15 ported on that basis,

16 (ii) be designed to collect information

17 with respect to the availability, cost, and

18 type of insurance coverage between and

19 among various geographic areas,

20 (iii) provide for the collection of infor21 mation on an individual insurer basis,

22 (iv) provide the data required by

23 clause (ii) with the least burden on insur24 ers, particularly small insurers, and insur-
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1 ance agents, including independent insur2 ance agents,

3 (v) take into account existing statis4 tical reporting systems in the insurance in5 dustry and use existing data sources to the

6 maximum practical extent,

7 (vi) include information on policies

8 written in a residual market,

9 (vii) detail what data elements should

10 be collected,

11 (viii) detail what insurers should be

12 designated insurers for purposes of the pilot

13 project,

14 (ix) detail what lines of commercial in15 surance should be designated for purposes of

16 the pilot project, with particular consider17 ation given to commercial fire and business

18 owners lines,

19 (x) include an appropriate definition

20 of small business, if necessary,

21 (xi) provide data representative of at

22 least 2 years of experience and provide that

23 the pilot project will terminate no later

24 than 2 years after its inception, and
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1 (xii) provide adequate lead time to in2 surers designated under clause (viii) for the

3 reporting to begin.

4 The regulation shall be issued within 2 years of

5 the date of enactment of this Act.

6 (D) REPORTING UNDER PILOT PROJECT.—

7 Insurers designated under subparagraph

8 (C)(viii) shall report to the Secretary with re9 spect to lines of insurance designated under sub10 paragraph (C)(ix) in the 5 largest MSA’s, pursu11 ant to the regulation issued by the Secretary in

12 subparagraph (C).

13 (E) ANALYSIS OF DATA UNDER PILOT

14 PROJECT.—At the conclusion of the pilot project,

15 the Secretary shall analyze the data collected.

16 Within 1 year of the conclusion of the pilot

17 project, the Secretary shall report to the Commit18 tee on Energy and Commerce of the House of

19 Representatives and the appropriate committee

20 of the Senate on—

21 (i) any conclusions of the Secretary re22 garding the data collected under the pilot

23 project, particularly regarding the avail24 ability, cost, and type of commercial insur25 ance for small business, and
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1 (ii) the need for further data collection

2 requirements to evaluate the availability,

3 cost, and type of such coverage or to help

4 ensure the availability of such coverage.

5 (5) PERIOD OF MAINTENANCE.—Any informa6 tion required to be compiled and made available

7 under subsection (a) shall be maintained and made

8 available for a period of 3 years after the close of the

9 first year during which such information is required

10 to be maintained and made available.

11 (6) FORMAT FOR DISCLOSURES.—Subject to sub12 section (c), the Secretary shall prescribe a standard

13 format for making information available as required

14 by subsection (a). Such format shall encourage the

15 submission of information in a form readable by a

16 computer.

17 (7) EXEMPTION.—

18 (A) SECRETARIAL ACTION.—If the Secretary

19 determines that a State has enacted a law, or

20 otherwise implemented a requirement under

21 which—

22 (i) insurers operating in that State are

23 subject to disclosure requirements on a 5-

24 digit zip code basis substantially similar to

25 those of subsection (a),
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1 (ii) there are adequate provisions for

2 enforcement, and

3 (iii) the information disclosed under

4 the State law or requirement is made avail5 able to the Secretary and the public in a

6 manner similar to other information dis7 closed under subsection (a),

8 then the Secretary shall by regulation exempt in9 surers operating in that State from complying

10 with the requirements of subsection (a) with re11 spect to that State’s portions of the designated

12 MSA’s. If the Secretary determines that the State

13 law or requirement no longer meets the criteria

14 of clauses (i) through (iii) or is no longer in ef15 fect, the Secretary shall by regulation revoke the

16 exemption.

17 (B) UNITED STATES PROGRAM.—Reporting

18 shall not be required under subsection (a) with

19 respect to insurance provided by a program un20 derwritten or administered by the United States.

21 (c) PUBLIC ACCESS SYSTEM.—The Secretary shall im22 plement a system to facilitate public access to information

23 required to be made available to the public under subsection

24 (a). Such system shall include arrangements for a central

25 depository of information in each designated MSA and for
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1 a telephone number which can be used by the public, at

2 cost, to request such information. Statements shall be made

3 available to the public for inspection and copying at such

4 central depository of information for all designated insurers

5 within such MSA. The Secretary shall also make copies of

6 such statements available in forms readable by widely used

7 personal computers, such as in disc format. The Secretary

8 may charge a fee for such information, which may not ex9 ceed the amount, determined by the Secretary, that is equal

10 to the cost of reproducing the information.

11 (d) SUBMISSION TO SECRETARY.—With respect to the

12 information required to be submitted under subsection (a)

13 to the Secretary, the Secretary shall develop regulations pre14 scribing the format and method for submitting such infor15 mation. Such regulations shall ensure uniformity among

16 insurers, to the extent practicable, in the format used for

17 reporting, including the definitions of data elements. Any

18 reporting insurer may submit in writing to the Secretary

19 such additional data or explanations as it deems relevant

20 to the decision by such insurer to sell insurance.

21 SEC. 4. DESIGNATIONS.

22 (a) DESIGNATIONS BY THE SECRETARY.—

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

24 shall designate the MSA’s for which reporting is re-
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1 quired under section 3(a). The Secretary shall des2 ignate the 25 MSA’s having the largest population.

3 (2) DESIGNATION OF INSURERS.—For each MSA

4 designated under paragraph (1), the Secretary shall

5 take the following actions:

6 (A) The Secretary shall designate the insur7 ers transacting insurance business in such MSA

8 for which reporting is required under section

9 3(a). At a minimum, the Secretary shall des10 ignate the 25 insurers in such MSA having the

11 largest premium volume in the designated lines

12 of insurance in each State in which such MSA

13 is located.

14 (B) In addition to the insurers designated

15 under subparagraph (A), the Secretary shall also

16 designate any entity primarily providing insur17 ance in a designated line of insurance as part of

18 a residual market established by State law.

19 (C) The Secretary shall also designate, in

20 addition to the insurers designated under sub21 paragraphs (A) and (B), insurers who specialize

22 in selling insurance in urban areas, including

23 surplus lines insurers.

24 (D) The Secretary shall also designate, in

25 addition to the insurers designated under sub-
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1 paragraph (A), (B), and (C) insurers such that

2 insurers representing at least 80 percent of the

3 premium volume in each State in which such

4 MSA is located in the designated line of insur5 ance are designated in such MSA. The Secretary

6 may not designate additional insurers under this

7 subparagraph if their market share in the des8 ignated line of insurance in the applicable

9 States, as measured by premium volume in each

10 State in which such MSA is located, is under 1

11 percent.

12 (E) In addition to the insurers designated

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

14 Secretary may by regulation designate addi15 tional insurers in a MSA if the designation of

16 additional insurers is necessary to provide valid

17 data with respect to the availability, cost, and

18 type of insurance in the MSA.

19 (F) The Secretary shall revoke the designa20 tion of an insurer designated under subpara21 graph (A) as follows: If such designated insurer

22 has a market share in a designated line of insur23 ance in a MSA, as measured by premium vol24 ume in each State in which such MSA is located,

25 of under 1 percent, the Secretary shall revoke the
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1 designation of such insurer beginning with the

2 insurer with the smallest market share of such

3 insurance if the remainder of the designated in4 surers have a market share of at least 75 percent

5 of such insurance as measured by premium vol6 ume in each State in which such MSA is located.

7 In addition, the Secretary may revoke the des8 ignation of any insurer designated under sub9 paragraph (A) with a market share in a des10 ignated line of insurance in a MSA, as measured

11 by premium volume in each State in which such

12 MSA is located, of under 1 percent if such des13 ignation has not been revoked under this sub14 paragraph and if such insurer primarily sells

15 insurance in rural areas of such MSA.

16 (G) For purposes of this paragraph, insur17 ers which are affiliated or are members of the

18 same group shall be considered together as one

19 insurer.

20 (3) DESIGNATION OF LINES OF INSURANCE.—For

21 each MSA designated under paragraph (1) the follow22 ing are the designated lines of property and casualty

23 insurance for which reporting is required under sec24 tion 3:

25 (A) Private passenger automobile insurance.
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1 (B) Homeowners insurance.

2 (C) Dwelling fire and allied lines of insur3 ance.

4 (4) TIMING OF DESIGNATIONS.—

5 (A) INITIAL DESIGNATIONS.—The Secretary

6 shall make initial designations required by para7 graphs (1), (2), and (3) no later than July 1 of

8 the year preceding the first year for which re9 porting is required under section 3. Such initial

10 designations shall be effective for 5 calendar

11 years from the date of designation.

12 (B) SUBSEQUENT DESIGNATIONS.—Not

13 later than July 1 of the year preceding the fifth

14 year after a designation under subparagraph (A)

15 or this subparagraph, the Secretary shall make

16 another designation to be effective upon the expi17 ration of such 5 years and such designation shall

18 be effective for 5 calendar years from the date of

19 designation.

20 (C) NOTICE.—The Secretary shall notify

21 persons involved in the designations no later

22 than the July 15 which follows the designation.

23 (b) OBTAINING INFORMATION.—The Secretary may ob24 tain from insurers such information as the Secretary may

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

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

3 the enactment of this Act, the Secretary shall establish a

4 task force on insurance agency appointments. The task force

5 shall—

6 (1) consist of representatives of appropriate Fed7 eral agencies, property and casualty insurance agents,

8 including specifically minority insurance agents,

9 property and casualty insurance companies, State in10 surance regulators, and public interest groups,

11 (2) have a significant representation from mi12 nority insurance agents, and

13 (3) be chaired by the Secretary or the Secretary’s

14 designee.

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

16 (1) review the problems inner city and minority

17 agents may have in receiving appointments to rep18 resent property and casualty insurance companies,

19 (2) review the practices of insurers in terminat20 ing agents and consider the effect such practices have

21 on the availability or cost of insurance, especially in

22 underserved areas, and

23 (3) recommend solutions to improve the ability

24 of inner city and minority insurance agents to mar25 ket property and casualty insurance products, includ26 ing steps property and casualty insurance companies
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1 should take to increase their appointments of such

2 agents.

3 (c) REPORT AND TERMINATION.—The task force shall

4 report to the Committee on Energy and Commerce of the

5 House of Representatives and the appropriate Committee

6 of the Senate its findings under paragraphs (1) and (2)

7 of subsection (b) and its recommendations under paragraph

8 (3) of subsection (b) within 2 years after the date of the

9 enactment of this Act. The task force shall terminate when

10 the report is submitted to the Committees.

11 SEC. 6. IMPLEMENTATION OF SECTION 3.

12 (a) REGULATIONS.—The Secretary shall promulgate

13 such regulations as may be necessary to carry out section

14 3. Such regulations may—

15 (1) contain such classifications, differentiations,

16 or other provisions, and

17 (2) may provide for such adjustments and excep18 tions for any class of transactions,

19 as in the judgment of the Secretary are necessary and prop20 er to effectuate the purposes of such section and to prevent

21 circumvention or evasion thereof or to facilitate compliance

22 therewith.

23 (b) DATA COLLECTION CONTRACTOR.—The Secretary

24 may contract with a data collection contractor to carry out

25 the Secretary’s responsibilities under section 3 if the con-
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1 tractor agrees to collect and make available the data pursu2 ant to the terms and conditions of such section. A statistical

3 agent may also be a data contractor.

4 (c) ROLE OF STATISTICAL AGENTS.—

5 (1) ACCEPTANCE OF DATA.—The Secretary and,

6 if applicable, the contractor under the subsection (b)

7 contract may accept data reported under section 3(a)

8 by a statistical agent acting on behalf of more than

9 one insurer if—

10 (A) the statistical plan used by the statis11 tical agent for the reporting of data on insurance

12 provides for the reporting of data in a manner

13 compatible with section 3(a),

14 (B) the statistical agent reports such data

15 on an individual insurer basis, and, at the dis16 cretion of the Secretary, on an aggregate basis,

17 (C) the statistical agent provides adequate

18 procedures to protect the integrity of the data re19 ported,

20 (D) the statistical agent has procedures in

21 place which ensure that data reported under the

22 statistical plan in connection with reporting

23 under this Act and submitted to the Secretary

24 are not subject to adjustment by the statistical

25 agent or an insurer for reasons other than tech-
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1 nical accuracy and conformance to the statistical

2 plan,

3 (E) the statistical agent ensures that the

4 data of one insurer is not subject to review by

5 other insurers before public availability, and

6 (F) the statistical agent provides for the re7 porting of data in a manner compatible with the

8 format prescribed by the Secretary under section

9 3(d).

10 (2) DISCONTINUANCE OF DATA ACCEPTANCE.—

11 The Secretary may, after providing an opportunity

12 for a hearing, discontinue accepting data reported

13 under section 3(a) by a statistical agent acting on be14 half of more than one insurer if the Secretary deter15 mines the requirements for acceptance of data in

16 paragraph (1) are no longer met.

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

18 have the authority to review and audit any data collection

19 and reporting performed under section 3, whether by the

20 Secretary, the contractor under the subsection (b) contract,

21 or a statistical agent, to ensure that the integrity of the

22 data collected and reported is protected.

23 (e) BURDENS ON INSURANCE AGENTS.—In prescribing

24 regulations under this Act, the Secretary shall take into

25 consideration the administrative, paperwork, and other
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1 burdens on insurance agents, including independent insur2 ance agents, involved in complying with the requirements

3 of this Act and shall minimize the burdens imposed by such

4 requirements with respect to such agents.

5 SEC. 7. RELATION TO STATE LAWS.

6 This Act does not annul, alter, or affect, or exempt the

7 obligation of any insurer subject to this Act to comply with

8 the laws of any State or subdivision thereof with respect

9 to public disclosure and recordkeeping.

10 SEC. 8. COMPILATION OF AGGREGATE DATA.

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

12 shall compile each year, for each MSA, data aggregated by

13 5-digit zip code for all insurers who are subject to section

14 3 or who are exempt from section 3 under subsection

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

16 tables indicating, for each MSA, insurance policies aggre17 gated for various categories of 5-digit zip codes grouped ac18 cording to location, age of property, income level, and racial

19 characteristics of neighborhood.

20 (b) AGGREGATION OF INFORMATION.—Statistical

21 agents may aggregate the data of insurers that report to

22 them and may provide such information to the Secretary.

23 The Secretary may also provide the individual company

24 data submitted by insurers to statistical agents for aggrega25 tion.
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1 (c) AVAILABILITY TO PUBLIC.—The data compiled and

2 the tables produced pursuant to subsection (a) shall be made

3 available to the public on a timetable determined by the

4 Secretary but not later than October 1 of the year following

5 the calendar year on which the data and tables are based.

6 SEC. 9. ENFORCEMENT.

7 (a) CIVIL PENALTIES.—Any insurer who is deter8 mined by the Secretary, after providing opportunity for a

9 hearing on the record, to have violated the requirements of

10 section 3 shall be subject to a civil penalty of not to exceed

11 $5,000 for each day during which such violation continues.

12 (b) INJUNCTION.—The Secretary may bring an action

13 in an appropriate United States district court for appro14 priate declaratory and injunctive relief against any insurer

15 who violates the requirements of section 3.

16 (c) INSURER LIABILITY.—An insurer shall be respon17 sible under subsections (a) and (b) for any violation of a

18 statistical agent acting on behalf of the insurer.

19 SEC. 10. SUNSET.

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

21 (b), this Act shall not be in effect after the expiration of

22 5 years from its effective date. Prior to the expiration of

23 4 years from such date, the Secretary shall report to the

24 Energy and Commerce Committee of the House of Rep25 resentatives and the appropriate committee of the Senate—
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1 (1) the quality of data received under section 3

2 and the effectiveness of the data requirement, includ3 ing the relation between the cost of such data gather4 ing and the benefits from having such data available,

5 (2) the appropriateness of the geographic data

6 reporting units,

7 (3) the need for continued reporting by the des8 ignated insurers in urban areas,

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

10 needs of minority and low-income neighborhoods, and

11 (5) such other information as the Secretary de12 termines will assist in considering an extension of

13 this Act.

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

15 the need described in subsection (a)(3) and the information

16 described in subsection (a)(5), the Secretary may extend

17 this Act for one period of 2 years.

18 SEC. 11. STUDIES.

19 (a) STUDY OF INFORMATION ON INSURANCE APPLI20 CANTS.—

21 (1) IN GENERAL.—The Secretary shall conduct a

22 study to determine the feasibility and utility of the

23 collection of information with respect to the character24 istics of applicants for insurance and reasons for re-
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1 jection of applicants. The study shall examine the ex2 tent 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 regard9 ing whether or not to insure a prospective in10 sured,

11 (C) written applications are submitted after

12 the insurer or agent has already made a deter13 mination to provide insurance to a prospective

14 insured or has determined that the prospective

15 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 race or ethnicity of the prospec22 tive insured,

23 (iii) the racial or ethnic composition of

24 the 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 re5 sults of the study under paragraph (1) to the Com6 mittee on Energy and Commerce of the House of Rep7 resentatives and the appropriate Committee of the

8 Senate within 18 months of the date of the enactment

9 of this Act.

10 (b) STUDY OF INSURER ACTIONS TO MEET INSURANCE

11 NEEDS OF CERTAIN NEIGHBORHOODS.—The Secretary

12 shall conduct a study of various practices, actions, pro13 grams, and methods undertaken by insurers to meet the

14 property and casualty insurance needs of residents of low15 and moderate-income neighborhoods, minority neighbor16 hoods, and small businesses located in such neighborhoods.

17 The Secretary may establish a task force of interested par18 ties, including representatives of insurance companies, in19 surance agents, including minority agents, and consumer

20 representatives to discuss additional practices, actions, pro21 grams, and methods to meet these needs. The Secretary shall

22 report the results of the study, including any recommenda23 tions, to the Committee on Energy and Commerce of the

24 House of Representatives and the appropriate Committee
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1 of the Senate no later than 2 years after the date of the

2 enactment of this Act.

3 SEC. 12. DEFINITIONS.

4 For purposes of this Act:

5 (1) The term ‘‘commercial insurance’’ means any

6 line of property and casualty insurance, except pri7 vate passenger automobile and homeowner’s insur8 ance.

9 (2) The term ‘‘designated insurer’’ means an in10 surer designated by the Secretary pursuant to section

11 4(a)(2).

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

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

14 (4) The term ‘‘exposure units’’ means units in15 sured against risk of loss by an insurer and the term

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

17 in a building.

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

19 association, society, order, firm, company, partner20 ship, individual, or aggregation of individuals which

21 is subject to examination or supervision by any State

22 insurance regulator, or which is doing or represents

23 an insurance business. Such term does not include an

24 individual or entity which represents an insurer as

25 agent for the purpose of selling or which represents a
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1 consumer as a broker for the purpose of buying insur2 ance.

3 (6) The term ‘‘MSA’’ means a Metropolitan Sta4 tistical Area or a Consolidated Metropolitan Statis5 tical Area and the term ‘‘designated MSA’’ means an

6 MSA designated by the Secretary pursuant to section

7 4(a)(1).

8 (7) The term ‘‘property and casualty insurance’’

9 means insurance against loss of or damage to prop10 erty, insurance against loss of income or extra ex11 pense incurred because of loss of, or damage to, prop12 erty, and insurance against third party liability

13 claims caused by negligence or imposed by statute or

14 contract.

15 (8) The term ‘‘residual market’’ means an as16 signed risk plan, joint underwriting association, or

17 any similar mechanism designed to make insurance

18 available to those unable to obtain it in the voluntary

19 market.

20 (9) The term ‘‘Secretary’’ means the Secretary of

21 Commerce.

22 (10) The term ‘‘State’’ means any State, the Dis23 trict of Columbia, the Commonwealth of Puerto Rico,

24 the Northern Mariana Islands, the Virgin Islands,
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1 American Samoa, and the Trust Territory of the Pa2 cific Islands.

3 SEC. 13. EFFECTIVE DATE.

4 The requirements of this Act shall take effect with re5 spect to information on insurance described in section 3

6 and developed in and after calendar year 1995.

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