II

103D CONGRESS

2D SESSION S. 2402

To provide for public access to information regarding the availability of

insurance, and for other purposes.

IN THE SENATE OF THE UNITED STATES

AUGUST 18, 1994

Mr. RIEGLE (for himself, Mr. FEINGOLD, Mr. SIMON, Mrs. BOXER, and Ms.

MOSELEY-BRAUN) 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 ‘‘Homeowners Insurance Disclosure Act of 1994’’.

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.
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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; and

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.

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

11 (1) to establish a nationwide database for deter12 mining the availability, affordability, and adequacy

13 of insurance coverage for consumers;

14 (2) to facilitate the enforcement of Federal and

15 State laws that prohibit illegally discriminatory in16 surance practices; and
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1 (3) to determine whether the extent and charac2 teristics of insurance availability, affordability, and

3 coverage require public officials to take any ac4 tions—

5 (A) to remedy redlining or other illegally

6 or unfairly discriminatory insurance practices;

7 or

8 (B) to promote insurance availability and

9 affordability in areas underserved by insurers.

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

11 to, nor shall it be construed to, encourage unsound under12 writing practices.

13 SEC. 3. ESTABLISHMENT OF GENERAL REQUIREMENTS TO

14 SUBMIT INFORMATION.

15 (a) IN GENERAL.—The Secretary shall, by regula16 tion, establish requirements for insurers to compile and

17 submit information to the Secretary for each annual re18 porting period, in accordance with this Act.

19 (b) CONSULTATION.—In establishing the require20 ments for the submission of information under this Act,

21 the Secretary shall consult with Federal agencies having

22 appropriate expertise, the National Association of Insur23 ance Commissioners, State insurance regulators, statis24 tical agents, representatives of small businesses, rep25 resentatives of insurance agents (including minority insur-
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1 ance agents), representatives of property and casualty in2 surers, and community, consumer, and civil rights organi3 zations, as appropriate.

4 SEC. 4. REPORTING OF NONCOMMERCIAL INSURANCE IN5 FORMATION.

6 (a) IN GENERAL.—The requirements established pur7 suant to section 3 to carry out this section shall—

8 (1) be designed to ensure that information is

9 submitted and compiled under this section as may be

10 necessary to permit analysis and comparison of—

11 (A) the availability and affordability of in12 surance coverage and the quality or type of in13 surance coverage, by MSA and the applicable

14 region, race, and gender of policyholders; and

15 (B) the location of the principal place of

16 business of insurance agents and the race of

17 such agents, and the location of the principal

18 place of business of insurance agents termi19 nated and the race of such agents, by MSA and

20 applicable region; and

21 (2) specify the data elements required to be re22 ported under this section and require uniformity in

23 the definitions of the data elements.

24 (b) DESIGNATED INSURERS.—
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1 (1) AGGREGATE INFORMATION.—The regula2 tions issued under section 3 shall require that each

3 designated insurer for a designated line of insurance

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

5 Secretary, for each annual reporting period—

6 (A) the total number of policies issued in

7 such line, total exposures covered by such poli8 cies, and total amount of premiums for such

9 policies, by designated line and by designated

10 MSA and applicable region in which the insured

11 risk is located;

12 (B) the total number of cancellations and

13 nonrenewals (expressed in terms of policies or

14 exposures, as determined by the Secretary), by

15 designated line and by designated MSA and ap16 plicable region in which the insured risk is

17 located;

18 (C) the total number and racial characteris19 tics of—

20 (i) licensed agents of such insurer sell21 ing insurance in the designated line, by

22 designated MSA and applicable region in

23 which the agent’s principal place of busi24 ness is located; and
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1 (ii) such agents who were terminated

2 by the insurer, by designated MSA and ap3 plicable region in which the agent’s prin4 cipal place of business was located; and

5 (D) for such designated line of insurance,

6 information that will enable the Secretary to as7 sess the aggregate loss experience for the in8 surer, by designated MSA and applicable region

9 in which the insured risk is located.

10 (2) SPECIFICATION OF INFORMATION FOR

11 ITEMIZED DISCLOSURE.—

12 (A) IN GENERAL.—The regulations issued

13 under section 3 regarding annual reporting re14 quirements for designated insurers for a des15 ignated line of insurance under section 13(c)(1)

16 shall, with respect to policies issued under the

17 designated line or exposure units covered by

18 such policies, as determined by the Secretary—

19 (i) specify the data elements that shall

20 be submitted;

21 (ii) provide for the submission of in22 formation on an individual insurer basis;

23 (iii) provide for the submission of the

24 information with the least burden on insur-
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1 ers, particularly small insurers, and insur2 ance agents;

3 (iv) take into account existing statis4 tical reporting systems in the insurance in5 dustry;

6 (v) require reporting by MSA and ap7 plicable region in which the insured risk is

8 located;

9 (vi) provide for the submission of in10 formation that identifies the designated

11 line and subline or coverage type;

12 (vii) provide for the submission of in13 formation that distinguishes policies writ14 ten in a residual market from policies writ15 ten in the voluntary market;

16 (viii) specify—

17 (I) whether information shall be

18 submitted on the basis of policy or ex19 posure unit; and

20 (II) whether information, when

21 submitted, shall be aggregated by like

22 policyholders with like policies, except

23 that the Secretary shall not permit

24 such aggregation if it will adversely
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1 affect the accuracy of the information

2 reported;

3 (ix) provide for the submission of in4 formation regarding the number of can5 cellations and nonrenewals of policies

6 under the designated line by MSA and ap7 plicable region in which the insured risk is

8 located, by race and gender of the policy9 holder (if known to the insurer), and by

10 whether the policy was issued in a vol11 untary or residual market; and

12 (x) provide for the submission of in13 formation on the racial characteristics and

14 gender of policyholders at the level of de15 tail comparable to that required by the

16 Home Mortgage Disclosure Act of 1975

17 (and the regulations issued thereunder).

18 (B) RULES REGARDING OBTAINING RACIAL

19 INFORMATION.—With respect to the informa20 tion specified in subparagraph (A)(x), appli21 cants for, and policyholders of, insurance may

22 be asked their racial characteristics only in

23 writing. Any such written question shall clearly

24 indicate that a response to the question is vol25 untary on the part of the applicant or policy-
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1 holder, but encouraged, and that the informa2 tion is being requested by the Federal Govern3 ment to monitor the availability and afford4 ability of insurance. If an applicant for, or pol5 icyholder of, insurance declines to provide such

6 information, the agent or insurer for such in7 surance may provide such information.

8 (3) RULE FOR REPORTING BY DESIGNATED IN9 SURERS.—A designated insurer for a designated line

10 shall submit—

11 (A) information required under subpara12 graphs (A), (B), and (D) of paragraph (1) and

13 information required pursuant to paragraph

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

15 located within each designated MSA, any part

16 of which is located in a State for which the in17 surer is designated; and

18 (B) information required under paragraph

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

20 MSA’s.

21 (c) NONDESIGNATED INSURERS.—The regulations is22 sued under section 3 shall require each insurer that issues

23 an insurance policy in a designated line of insurance under

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

25 designated MSA and which is not a designated insurer for
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1 the line in any State in which any part of such MSA is

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

3 annual reporting period—

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

5 line;

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

7 and

8 (3) the total amount of premiums for such poli9 cies;

10 by designated MSA and applicable region in which the in11 sured risk is located.

12 SEC. 5. STUDY OF COMMERCIAL INSURANCE FOR RESIDEN13 TIAL PROPERTIES AND SMALL BUSINESSES.

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

15 study to determine the availability, affordability, and qual16 ity or types of commercial insurance coverage for residen17 tial properties and small businesses, in urban areas.

18 (b) SUBMISSION OF INFORMATION.—To acquire in19 formation for the study under this section, the Secretary

20 shall, by regulation, establish requirements for insurers

21 providing commercial insurance for residential properties

22 and small businesses to compile and submit to the Sec23 retary on an annual basis information regarding such in24 surance, as follows:
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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.
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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;
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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-
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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 25

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.

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

25 annual reporting periods thereafter, a rural area for
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1 which a designation made by the Secretary under

2 this paragraph is in effect, pursuant to the following

3 requirements:

4 (A) The designations shall be made for

5 each of the successive 5-year periods at the

6 time provided in subparagraph (C), and the

7 first such period shall be the 5-year period be8 ginning upon the commencement of the sixth

9 annual reporting period to which the reporting

10 requirements under this Act apply.

11 (B) The Secretary shall designate 25 rural

12 areas as designated rural areas for each such 5-

13 year period and shall designate such rural areas

14 based upon the information and recommenda15 tions made in the report under section 18(b) re16 lating to the period.

17 (C) The Secretary shall make the designa18 tion of rural areas for an ensuing 5-year period

19 by regulations issued—

20 (i) not later than 12 months before

21 the commencement of the 5-year period;

22 and

23 (ii) not later than 6 months after the

24 submission to the Secretary of the report
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1 under section 18(b) relating to such pe2 riod.

3 (D) The designations of rural areas for a

4 5-year period shall take effect upon the com5 mencement of the first annual reporting period

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

7 months after the issuance of the regulations

8 making such designations, and shall remain in

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

10 Notwithstanding any other provision of this section, the

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

12 succeeding designation of rural areas under paragraph (2)

13 takes effect.

14 SEC. 7. WAIVER OF REPORTING REQUIREMENTS.

15 (a) WAIVER FOR STATES COLLECTING EQUIVALENT

16 INFORMATION.—

17 (1) AUTHORITY.—Subject to the requirements

18 under this section, the Secretary shall provide, by

19 regulation, for the waiver of the applicability of the

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

21 transacting business within a State referred to in

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

23 required to be submitted under such sections that

24 relates to agents or insured risks located in the

25 State.
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1 (2) REQUIREMENTS.—The Secretary may make

2 a waiver pursuant to paragraph (1) only with re3 spect to a State that the Secretary determines has

4 in effect a law or other requirement that—

5 (A) requires insurers to submit to the

6 State information that is the same as or equiva7 lent to the information that is required to be

8 submitted to the Secretary pursuant to sections

9 4, 5, and 6;

10 (B) provides for adequate enforcement of

11 such law or other requirements;

12 (C) provides for the same annual reporting

13 period used by the Secretary under this Act and

14 for submission of the information to the Sec15 retary in a timely fashion, as determined by the

16 Secretary; and

17 (D) provides that, to the extent statistical

18 agents are permitted to submit information to

19 the State on behalf of insurers, such agents are

20 subject to the same or equivalent requirements

21 as provided under section 9(b).

22 (3) DURATION.—A waiver pursuant to para23 graph (1) may remain in effect only during the pe24 riod for which the State law or other requirement

25 under paragraph (2) remains in effect.
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1 (b) MULTIPLE-STATE MSA’S.—In the case of any

2 designated MSA that contains area within—

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

4 pursuant to subsection (a); and

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

6 been made;

7 the provisions of this Act requiring submission of informa8 tion to the Secretary regarding such MSA shall be consid9 ered to apply only to the portion of such MSA that is lo10 cated within the State for which such a waiver has not

11 been made.

12 (c) AUTHORITY FOR SECRETARY TO OBTAIN INFOR13 MATION DIRECTLY FROM INSURERS.—If the State for

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

15 does not submit to the Secretary the information required

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

17 not complete, the Secretary shall require the insurers

18 transacting business within the State to submit such infor19 mation directly to the Secretary.

20 SEC. 8. REPORTING BY PRIVATE MORTGAGE INSURERS.

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

22 Federal Financial Institutions Examination Council (here23 after in this section referred to as the ‘‘Council’’) shall

24 determine the extent to which each insurer providing pri25 vate mortgage insurance is making available to the public
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1 and submitting to the appropriate agency information re2 garding such insurance that is equivalent to the informa3 tion regarding mortgages required to be reported under

4 the Home Mortgage Disclosure Act of 1975.

5 (b) REPORTING UNDER THIS ACT.—

6 (1) CERTIFICATION OF NONCOMPLIANCE.—If,

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

8 the Council determines that any insurer providing

9 private mortgage insurance is not making available

10 to the public or submitting the information referred

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

12 available or submitted is not equivalent information

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

14 notify the insurer of such noncompliance. If, after

15 the expiration of a reasonable period of time, the in16 surer has not remedied such noncompliance to the

17 satisfaction of the Council, then the Council shall

18 immediately certify such noncompliance to the Sec19 retary.

20 (2) REQUIREMENT.—Upon the receipt of a cer21 tification under paragraph (1), the Secretary shall,

22 by regulation, require such insurer to submit to the

23 Secretary information regarding such insurance that

24 complies with the provisions of section 4 that are ap25 plicable to such insurance. Such regulations shall be
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1 issued not later than 6 months after receipt of such

2 certification and shall apply to the first succeeding

3 annual reporting period beginning not less than 6

4 months after issuance of such regulations and to

5 each annual reporting period thereafter.

6 SEC. 9. USE OF DATA CONTRACTOR AND STATISTICAL

7 AGENTS.

8 (a) DATA COLLECTION CONTRACTOR.—The Sec9 retary may contract with a data collection contractor to

10 collect the information required to be maintained and sub11 mitted under sections 4, 5, 6, 7, and 8(b), if the contractor

12 agrees to collect the information pursuant to the terms

13 and conditions of such sections and this Act and the regu14 lations issued thereunder. Information submitted to such

15 contractor shall be available to the public to the same ex16 tent as if the information were submitted directly to the

17 Secretary.

18 (b) USE OF STATISTICAL AGENTS.—

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

20 by regulation, that insurers may submit any infor21 mation required under sections 4, 5, 6, and 8(b)

22 through statistical agents acting on behalf of more

23 than one insurer.

24 (2) PROTECTIONS.—The regulations issued

25 under this subsection shall permit submission of in-
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1 formation through a statistical agent only if the Sec2 retary determines that—

3 (A) the statistical agent has adequate pro4 cedures to protect the integrity of the informa5 tion submitted;

6 (B) the statistical agent has a statistical

7 plan and format for submitting the information

8 that meets the requirements of this Act;

9 (C) the statistical agent has procedures in

10 place that ensure that information reported

11 under the statistical plan in connection with re12 porting under this Act and submitted to the

13 Secretary is not subject to any adjustment by

14 the statistical agent or an insurer for reasons

15 other than technical accuracy and conformance

16 to the statistical plan;

17 (D) the information of an insurer is not

18 subject to review by any other insurer before

19 being made available to the public; and

20 (E) acceptance of the information through

21 the statistical agent will not adversely affect the

22 accuracy of the information reported.

23 (3) DISCONTINUANCE OF ACCEPTANCE OF IN24 FORMATION.—The Secretary may discontinue ac25 cepting information reported through a statistical
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1 agent pursuant to this subsection if the Secretary

2 determines that the requirements for such reporting

3 are no longer met or that continued acceptance of

4 such information is contrary to the goal of ensuring

5 the accuracy of the information reported.

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

7 the United States shall, at the request of the Sec8 retary, audit information collection and submission

9 performed under this subsection by data collection

10 contractors or statistical agents to ensure that the

11 integrity of the information collected and submitted

12 is protected. In determining whether to request an

13 audit of a statistical agent, the Secretary shall con14 sider the sufficiency (for purposes of this Act) of au15 dits of the statistical agent conducted in connection

16 with State insurance regulation.

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

18 statistical agent as authorized under this subsection,

19 an insurer using such an agent shall be responsible

20 for compliance with the requirements under this Act.

21 SEC. 10. SUBMISSION OF INFORMATION TO SECRETARY

22 AND MAINTENANCE OF INFORMATION.

23 (a) PERIOD OF MAINTENANCE.—The Secretary shall

24 maintain any information submitted to the Secretary for

25 such period as the Secretary considers appropriate and
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1 feasible to carry out the purposes of this Act and to allow

2 for historical analysis and comparison of the information.

3 (b) SUBMISSION.—The Secretary shall issue regula4 tions prescribing a standard schedule (taking into consid5 eration the provisions of section 12(a)), format, and meth6 od for submitting information under this Act to the Sec7 retary. The format and method of submitting the informa8 tion shall facilitate and encourage the submission in a

9 form readable by a computer. Any insurer submitting in10 formation to the Secretary may submit in writing to the

11 Secretary any additional information or explanations that

12 the insurer considers relevant to the decision by the in13 surer to sell insurance.

14 SEC. 11. COMPILATION OF AGGREGATE INFORMATION.

15 (a) INSURANCE INFORMATION.—For each annual re16 porting period, the Secretary shall—

17 (1) compile, for each designated MSA, by des18 ignated line (and if such information is submitted,

19 by subline or coverage type)—

20 (A) information submitted under sections

21 4, 5, 7, and 8(b) and loss ratios (if the submis22 sion of loss information is required), aggregated

23 by applicable region for all insurers submitting

24 such information; and
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1 (B) such information and loss ratios (if the

2 submission of loss information is required), ag3 gregated by applicable region for each such in4 surer; and

5 (2) produce tables based on information submit6 ted under sections 4, 5, 7, and 8(b) for each des7 ignated MSA, by insurer and for all insurers, by des8 ignated line (and if such information is submitted,

9 by subline or coverage type), indicating—

10 (A) insurance underwriting patterns aggre11 gated for the applicable regions within the

12 MSA, grouped according to location, age of

13 property, income level, and racial characteristics

14 of neighborhoods; and

15 (B) loss ratios based on the information

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

17 (if the submission of loss information is re18 quired), aggregated for the applicable regions

19 within the MSA, grouped according to location,

20 age of property, income level, and racial charac21 teristics of neighborhoods.

22 (b) AGENT INFORMATION.—For each annual report23 ing period and for each designated MSA, the Secretary

24 shall compile, by designated line, the information submit25 ted under section 4(b)(1)(C)—
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1 (1) by designated insurer by applicable region;

2 (2) by designated insurer aggregated for the

3 applicable regions within the designated MSA,

4 grouped according to location, age of property, in5 come level, and racial characteristics; and

6 (3) for all designated insurers that have submit7 ted such information for the designated MSA, aggre8 gated for the applicable regions within the des9 ignated MSA, grouped according to location, age of

10 property, income level, and racial characteristics.

11 (c) RURAL INSURANCE INFORMATION.—For each an12 nual reporting period, the Secretary shall—

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

14 by designated line (and if such information is sub15 mitted, by subline or coverage type)—

16 (A) information regarding insurance in

17 rural areas submitted under sections 6 and 7

18 and loss ratios, for all insurers for which such

19 information is submitted; and

20 (B) such information and loss ratios, for

21 each such insurer; and

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

23 based on information regarding insurance in rural

24 areas submitted under sections 6 and 7, by insurer

25 and for all such insurers for which information is
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1 submitted under such sections, by designated line

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

3 coverage type), indicating—

4 (A) insurance underwriting patterns, ag5 gregated by zip codes, grouped according to lo6 cation, age of property, income level, and racial

7 characteristics of neighborhoods (where such

8 demographic information is available); and

9 (B) loss ratios, based on the information

10 obtained pursuant to sections 6 and 7, aggre11 gated by zip codes, grouped according to loca12 tion, age of property, income level, and racial

13 characteristics of neighborhoods (where such

14 demographic information is available).

15 SEC. 12. AVAILABILITY AND ACCESS SYSTEM.

16 (a) AVAILABILITY TO PUBLIC.—

17 (1) IN GENERAL.—The Secretary shall main18 tain and make available to the public, in accordance

19 with the requirements of this section, any informa20 tion submitted to the Secretary under this Act and

21 any information compiled by the Secretary under

22 this Act.

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

24 information publicly available on a timetable deter25 mined by the Secretary, but not later than 9 months
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1 after the conclusion of the annual reporting period

2 to which the information relates, except that such

3 information shall not be made available to the public

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

5 information required to be reported is available by

6 such date.

7 (b) PUBLIC ACCESS SYSTEM.—

8 (1) IMPLEMENTATION.—The Secretary shall

9 implement a system to facilitate access to any infor10 mation required to be made available to the public

11 under this Act.

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

13 provide access in accordance with the following:

14 (A) ACCESS TO ITEMIZED INFORMATION.—

15 To information submitted under sections 4, 5,

16 6, 7, and 8(b) on the basis of the insurer sub17 mitting the information, on the basis of des18 ignated MSA and applicable region (or in the

19 case of rural information submitted under sec20 tion 6 or 7, on the basis of 5-digit zip code),

21 and on any other basis the Secretary considers

22 feasible and appropriate.

23 (B) ACCESS TO AGGREGATE INFORMA24 TION.—To aggregate information compiled

25 under section 11, on the basis of—
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1 (i) the insurer submitting the infor2 mation;

3 (ii) designated MSA and applicable re4 gion (or in the case of rural information

5 submitted under section 6 or 7, on the

6 basis of 5-digit zip code); and

7 (iii) any other basis the Secretary con8 siders feasible and appropriate.

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

10 a telephone number that can be used by the public

11 to request such information and the address at

12 which a written request for such information may be

13 submitted.

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

15 establish the forms in which such information may

16 be furnished by the Secretary. Such forms shall in17 clude written statements, forms readable by widely

18 used personal computers, and, if feasible, on-line ac19 cess for personal computers. The Secretary shall

20 provide the information available under this section

21 in any such form requested by the person requesting

22 the information, except that the Secretary shall

23 charge a fee for providing such information, which

24 may not exceed the amount, determined by the Sec-
29

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1 retary, that is equal to the cost of reproducing the

2 information.

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
30

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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 100 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-
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1 tions issued pursuant to section 22, which shall

2 not be amended or revised after issuance.

3 (B) The Secretary shall select 50 addi4 tional MSA’s, on a basis that provides for—

5 (i) geographic diversity among the

6 designated MSA’s under this paragraph;

7 (ii) diversity in size of the populations

8 among such MSA’s; and

9 (iii) the inclusion of MSA’s with a

10 high concentration of racial minorities.

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

12 annual reporting periods thereafter, an MSA for

13 which a designation under this paragraph is in ef14 fect, pursuant to the following requirements:

15 (A) The designations shall be made for

16 each of the successive 5-year periods at the

17 time provided in subparagraph (C), and the

18 first such period shall be the 5-year period be19 ginning upon the commencement of the sixth

20 annual reporting period to which the reporting

21 requirements under this Act apply.

22 (B) The Secretary shall designate not less

23 than 100 MSA’s as designated MSA’s for each

24 such 5-year period and shall designate such

25 MSA’s based upon the information and rec-
32

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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,
33

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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-
34

•S 2402 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-
35

•S 2402 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, Housing, and Urban

22 Affairs of the Senate and the appropriate commit23 tees of the House of Representatives.

24 (3) DURATION.—
36

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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.
37

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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) CONVERTIBILITY.—
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1 (1) AUTHORITY.—The Secretary may, by regu2 lation, provide for insurers to comply with the re3 quirements under sections 4, 5, and 8(b) by report4 ing the information required under such sections on

5 the basis of geographical location other than MSA

6 and applicable region, but only if the Secretary de7 termines that information reported on such other

8 basis is convertible to the basis of MSA and applica9 ble region and such conversion does not affect the

10 accuracy of the information.

11 (2) LIMITATION.—With respect to any informa12 tion submitted on the basis of geographical location

13 other than designated MSA and applicable region

14 pursuant to paragraph (1), the Secretary may dis15 close the information only on the basis of designated

16 MSA and applicable region.

17 SEC. 15. ANNUAL REPORTING PERIOD.

18 (a) IN GENERAL.—For purposes of this Act, the an19 nual reporting periods shall be the 12-month periods com20 mencing in each calendar year on the same day, which

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

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

23 6-month period beginning on the date of enactment of this

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

25 year upon which all annual reporting periods shall com-
39

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1 mence. In determining such day, the Secretary shall con2 sider the reporting periods used for purposes of State and

3 other insurance statistical reporting systems, in order to

4 minimize the burdens on insurers.

5 SEC. 16. DISCLOSURES BY INSURERS TO APPLICANTS AND

6 POLICYHOLDERS.

7 (a) IN GENERAL.—The Secretary shall, by regula8 tion, require the following disclosures:

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

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

11 application or written request to issue an insurance

12 policy under a designated line shall provide to the

13 applicant at the time of such declination, through

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

15 (A) A written explanation of the specific

16 reasons for the declination.

17 (B) Written notice that—

18 (i) the applicant may submit to the

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

20 such notice, a written request for a written

21 explanation of the reasons for the declina22 tion; and

23 (ii) pursuant to such a request, an ex24 planation shall be provided to the applicant
40

•S 2402 IS

1 within 21 days after receipt of such re2 quest.

3 (2) PROVISION OF EXPLANATION.—If an in4 surer, agent, or broker making a declination receives

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

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

7 broker shall provide a written explanation referred

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

9 (3) POLICYHOLDERS.—Each insurer that can10 cels or refuses to renew an insurance policy under

11 a designated line shall provide to the policyholder, in

12 writing and within an appropriate period of time as

13 determined by the Secretary, the reasons for cancel14 ing or refusing to renew the policy.

15 (b) MODEL ACTS.—In issuing regulations under sub16 section (a), the Secretary shall consider relevant portions

17 of model acts developed by the National Association of In18 surance Commissioners.

19 (c) PREEMPTION.—Subsection (a) shall not be con20 strued to annul, alter, or effect, or exempt any insurer,

21 agent, or broker subject to the provisions of subsection

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

23 State with respect to notifying insurance applicants or pol24 icyholders of the reasons for declination or cancellation of,

25 or refusal to renew insurance, except to the extent that
41

•S 2402 IS

1 such laws or requirements are inconsistent with subsection

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

3 to the extent of such inconsistency. The Secretary is au4 thorized to determine whether such inconsistencies exist

5 and to resolve issues regarding such inconsistencies. The

6 Secretary may not provide that any State law or require7 ment is inconsistent with subsection (a) if it imposes re8 quirements equivalent to the requirements under such

9 subsection or requirements that are more stringent or

10 comprehensive, in the determination of the Secretary.

11 (d) IMMUNITY.—In issuing regulations under sub12 section (a), the Secretary shall specifically consider the ne13 cessity of providing insurers, agents, and brokers with im14 munity solely for the act of conveying or communicating

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

16 to renew insurance on behalf of a principal making such

17 decision. The Secretary may provide for immunity under

18 the regulations issued under subsection (a) if the Sec19 retary determines that such a provision is necessary and

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

21 provide immunity for any conduct that is negligent, reck22 less, or willful.

23 (e) ENFORCEMENT.—The Secretary may authorize

24 the States to enforce the requirements under regulations

25 issued under subsection (a).
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1 SEC. 17. ENFORCEMENT.

2 (a) CIVIL PENALTIES.—Any insurer who is deter3 mined by the Secretary, after providing opportunity for

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

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

6 not to exceed $5,000 for each day during which such viola7 tion continues.

8 (b) INJUNCTION.—The Secretary may bring an ac9 tion in an appropriate United States district court for ap10 propriate declaratory and injunctive relief against any in11 surer who violates the requirements referred to in sub12 section (a).

13 (c) INSURER LIABILITY.—An insurer shall be respon14 sible under subsections (a) and (b) for any violation of

15 a statistical agent acting on behalf of the insurer.

16 SEC. 18. REPORTS.

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

18 report to the Committee on Banking, Housing, and Urban

19 Affairs of the Senate and the appropriate committees of

20 the House of Representatives on the implementation of

21 this Act and shall make recommendations to such commit22 tees on such additional legislation as the Secretary deems

23 appropriate to carry out this Act. The Secretary shall in24 clude in each annual report a description of any com25 plaints or problems resulting from the implementation of

26 this Act, of which the Secretary has knowledge, made by
43

•S 2402 IS

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

2 disclosure of information regarding policyholders and any

3 recommendations for addressing such problems.

4 (b) GAO REPORTS.—

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

6 the United States shall submit a report under this

7 subsection to the Secretary and the Congress for

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

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

10 by the Secretary in implementing this Act during

11 such period.

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

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

14 later than 18 months before the commencement of

15 the period to which the report relates.

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

17 shall include the following information:

18 (A) An analysis of the adequacy of the im19 plementation of this Act and any recommenda20 tions of the Comptroller General for improving

21 the implementation.

22 (B) The costs to the Federal Government,

23 insurers, and consumers of implementing and

24 complying with this Act.
44

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

3 (D) An analysis of whether, considering

4 the purposes of this Act, insurers are required

5 by this Act (or by implementing regulations) to

6 submit appropriate information.

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

9 availability, affordability, and quality or type of

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

12 (F) An analysis of whether the group of

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

14 report are appropriate for purposes of this Act.

15 (G) Specific recommendations, for use by

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

17 year period for which the report is made, with

18 regard to—

19 (i) the characteristics of MSA’s that

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

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

23 be included in the group;
45

•S 2402 IS

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

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

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

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

7 group of designated MSA’s in effect at the

8 time of the report.

9 (H) With respect only to the first report

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

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

15 under the study should be expanded or changed

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

17 or coverage types of insurance, and types of

18 small businesses, or whether the study should

19 be allowed to terminate under law.

20 (I) An analysis of whether the group of

21 designated rural areas in effect at the time of

22 the report are appropriate for purposes of this

23 Act.

24 (J) Specific recommendations, for use by

25 the Secretary in designating rural areas for
46

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

2 which the report is made, with regard to—

3 (i) the characteristics of rural areas

4 that should be included in the group of

5 designated rural areas under such section;

6 (ii) the number of rural areas having

7 each particular characteristic that should

8 be included in the group; and

9 (iii) the characteristics of rural areas,

10 and number of rural areas having each

11 such characteristic, that should be removed

12 from the group of designated rural areas

13 in effect at the time of the report.

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

17 considers appropriate.

18 (4) CONSULTATION.—In preparing each report

19 under this subsection, the Comptroller General shall

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

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

25 insurance agents) and property and casualty insur-
47

•S 2402 IS

1 ers, and community, consumer, and civil rights orga2 nizations.

3 SEC. 19. TASK FORCE ON AGENCY APPOINTMENTS.

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

5 the date of enactment of this Act, the Secretary shall es6 tablish a task force on insurance agency appointments

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

8 The Task Force shall—

9 (1) consist of representatives of appropriate

10 Federal agencies, property and casualty insurance

11 agents, including specifically minority insurance

12 agents, property and casualty insurers, State insur13 ance regulators, and community, consumer, and civil

14 rights organizations;

15 (2) have a significant representation from mi16 nority insurance agents; and

17 (3) be chaired by the Secretary or the Sec18 retary’s designee.

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

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

21 agents may have in receiving appointments to rep22 resent property and casualty insurers and consider

23 the effects such problems have on the availability,

24 affordability, and quality or type of insurance, espe25 cially in underserved areas;
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•S 2402 IS

1 (2) review the practices of insurers in terminat2 ing agents and consider the effects such practices

3 have on the availability, affordability, and quality or

4 type of insurance, especially in underserved areas;

5 and

6 (3) recommend solutions to improve the ability

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

10 take to increase their appointments of such agents.

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

12 shall report to the Committee on Banking, Housing, and

13 Urban Affairs of the Senate and the appropriate commit14 tees of the House of Representatives its findings under

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

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

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

19 report is submitted to the committees.

20 SEC. 20. STUDIES.

21 (a) STUDY OF INSURANCE PRESCREENING.—

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

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

25 to the characteristics of applicants for insurance and
49

•S 2402 IS

1 reasons for rejection of applicants. The study shall

2 examine the extent to which—

3 (A) oral applications or representations are

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

6 prospective insured;

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

10 insured;

11 (C) written applications are submitted

12 after the insurer or agent has already made a

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

16 (D) prospective insured persons are dis17 couraged from submitting applications for in18 surance based, in whole or in part, on—

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

21 (ii) the racial characteristics of the

22 prospective insured;

23 (iii) the racial composition of the

24 neighborhood in which the risk to be in25 sured is located; and
50

•S 2402 IS

1 (iv) in the case of residential property

2 insurance, the age and value of the risk to

3 be insured.

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

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

6 Committee on Banking, Housing, and Urban Affairs

7 of the Senate and the appropriate committees of the

8 House of Representatives, not later than 2 years

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

10 shall include recommendations of the Secretary—

11 (A) with respect to requiring insurers to

12 report on the disposition of oral and written ap13 plications for insurance; and

14 (B) for any legislation that the Secretary

15 considers appropriate regarding the issues de16 scribed in the report.

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

20 and methods undertaken by insurers to meet the property

21 and casualty insurance needs of residents of low- and mod22 erate-income neighborhoods, minority neighborhoods, and

23 small businesses located in such neighborhoods. The Sec24 retary shall report the results of the study, including any

25 recommendations, to the Committee on Banking, Housing,
51

•S 2402 IS

1 and Urban Affairs of the Senate and the appropriate com2 mittees of the House of Representatives, not later than

3 2 years after the date of enactment of this Act.

4 (c) STUDY OF DISPARATE CLAIMS TREATMENT.—

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

6 a study to determine whether, and the extent to

7 which, insurers engage in disparate treatment in

8 handling claims of policyholders under designated

9 lines of insurance based on the race, gender, and in10 come level of the policyholder, and on the racial

11 characteristics and income levels of the area in

12 which the insured risk is located. In conducting the

13 study, the Secretary shall specifically consider

14 whether residents of low-income neighborhoods or

15 areas and minority neighborhoods or areas are more

16 likely than residents of other areas to have their

17 claims contested or their insurance coverage can18 celed.

19 (2) REPORT.—The Secretary shall submit a re20 port on the results of the study to the Committee on

21 Banking, Housing, and Urban Affairs of the Senate

22 and the appropriate committees of the House of

23 Representatives, not later than 2 years after the

24 date of enactment of this Act.
52

•S 2402 IS

1 (d) STUDY OF RATING TERRITORIES.—The Sec2 retary shall conduct a study to determine whether the

3 practice in the insurance industry of basing insurance pre4 mium amounts on the territory in which the insured risk

5 is located has a disparate impact on the availability, af6 fordability, or quality of insurance by race, gender, or type

7 of neighborhood. The Secretary shall submit a report on

8 the results of the study to the Committee on Banking,

9 Housing, and Urban Affairs of the Senate and the appro10 priate committees of the House of Representatives, not

11 later than 12 months after the date of enactment of this

12 Act.

13 (e) STUDY OF INSURER REINVESTMENT REQUIRE14 MENTS.—

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

16 a study to determine the feasibility of requiring in17 surers to reinvest in communities and neighborhoods

18 from which they collect premiums for insurance and

19 whether, and the extent to which, community rein20 vestment requirements for insurers should be estab21 lished that are comparable to the community rein22 vestment requirements applicable to depository insti23 tutions. The Secretary shall consult with representa24 tives of insurers and consumer, community, and civil

25 rights organizations regarding the results of the
53

•S 2402 IS

1 study and any recommendations to be made based

2 on the results of the study.

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

4 results of the study, including any such rec5 ommendations, to the Committee on Banking, Hous6 ing, and Urban Affairs of the Senate and the appro7 priate committees of the House of Representatives,

8 not later than 6 months after the conclusion of the

9 first annual reporting period to which the reporting

10 requirements under this Act apply (pursuant to sec11 tion 26).

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

13 (a) EXEMPTION FOR UNITED STATES PROGRAMS.—

14 Reporting shall not be required under this Act with re15 spect to insurance provided by any program underwritten

16 or administered by the United States.

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

18 annul, alter, or affect, or exempt the obligation of any in19 surer subject to this Act to comply with the laws of any

20 State or subdivision thereof with respect to public disclo21 sure, submission of information, and recordkeeping.

22 SEC. 22. REGULATIONS.

23 (a) IN GENERAL.—The Secretary shall issue any reg24 ulations required under this Act and any other regulations

25 that may be necessary to carry out this Act. The regula-
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1 tions shall be issued through rulemaking in accordance

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

3 States Code, for substantive rules. Except as otherwise

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

5 not later than the expiration of the 18-month period begin6 ning on the date of enactment of this Act.

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

8 Secretary shall take into consideration the administrative,

9 paperwork, and other burdens on insurance agents, includ10 ing independent insurance agents, involved in complying

11 with the requirements of this Act and shall minimize the

12 burdens imposed by such requirements with respect to

13 such agents.

14 SEC. 23. DEFINITIONS.

15 For purposes of this Act, the following definitions

16 shall apply:

17 (1) AGENT.—The term ‘‘agent’’ means, with re18 spect to an insurer, an agent licensed by a State

19 who sells property and casualty insurance. The term

20 includes agents who are employees of the insurer,

21 agents who are independent contractors working ex22 clusively for the insurer, and agents who are inde23 pendent contractors appointed to represent the in24 surer on a nonexclusive basis.
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1 (2) APPLICABLE REGION.—The term ‘‘applica2 ble region’’ means, with respect to a designated

3 MSA—

4 (A) for any county located within the MSA

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

6 applicable census tract within the county; or

7 (B) for any county located within the MSA

8 that has a population of 30,000 or less, the ap9 plicable county.

10 (3) COMMERCIAL INSURANCE.—The term

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

12 and casualty insurance, except homeowner’s, dwell13 ing fire, allied lines, and other personal lines of in14 surance.

15 (4) DESIGNATED INSURER.—The term ‘‘des16 ignated insurer’’ means, with respect to a designated

17 line, an insurer designated for a State by the Sec18 retary under section 13(b) as a designated insurer

19 for such line or any insurer that is part of an in20 surer group selected under such section.

21 (5) DESIGNATED LINE.—The term ‘‘designated

22 line’’ means a line of insurance designated by the

23 Secretary under section 13(c).

24 (6) EXPOSURES.—The term ‘‘exposures’’

25 means, with respect to an insurance policy, an ex-
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1 pression of an exposure unit covered under the pol2 icy compared to the duration of the policy (pursuant

3 to standards established by the Secretary for uni4 form reporting of exposures).

5 (7) EXPOSURE UNITS.—The term ‘‘exposure

6 units’’ means a dwelling covered under an insurance

7 policy for homeowners, dwelling fire, or allied lines

8 coverage.

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

10 property and casualty insurance. Such term includes

11 primary insurance, surplus lines insurance, and any

12 other arrangement for the shifting and distributing

13 of risks that is determined to be insurance under the

14 law of any State in which the insurer or insurer

15 group engages in an insurance business.

16 (9) INSURER.—Except with respect to section

17 8, the term ‘‘insurer’’ means any corporation, asso18 ciation, society, order, firm, company, mutual, part19 nership, individual, aggregation of individuals, or

20 any other legal entity that is authorized to transact

21 the business of property or casualty insurance in any

22 State or that is engaged in a property or casualty

23 insurance business. The term includes any certified

24 foreign direct insurer, but does not include an indi25 vidual or entity which represents an insurer as agent
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1 solely for the purpose of selling or which represents

2 a consumer as a broker solely for the purpose of

3 buying insurance.

4 (10) ISSUED.—The term ‘‘issued’’ means, with

5 respect to an insurance policy, newly issued or re6 newed.

7 (11) JOINT UNDERWRITING ASSOCIATION.—The

8 term ‘‘joint underwriting association’’ means an un9 incorporated association of insurers established to

10 provide a particular form of insurance to the public.

11 (12) MORTGAGE INSURANCE.—The term

12 ‘‘mortgage insurance’’ means insurance against the

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

14 for residential or commercial property.

15 (13) MSA.—The term ‘‘MSA’’ means a Metro16 politan Statistical Area or a Primary Metropolitan

17 Statistical Area.

18 (14) PRIVATE MORTGAGE INSURANCE.—The

19 term ‘‘private mortgage insurance’’ means mortgage

20 insurance other than mortgage insurance made

21 available under the National Housing Act, title 38 of

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

23 Act of 1949.

24 (15) PROPERTY AND CASUALTY INSURANCE.—

25 The term ‘‘property and casualty insurance’’ means
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1 insurance against loss of or damage to property, in2 surance against loss of income or extra expense in3 curred because of loss of, or damage to, property,

4 and insurance against third party liability claims

5 caused by negligence or imposed by statute or con6 tract. Such term does not include workers’ com7 pensation, professional liability, or title insurance.

8 (16) RESIDUAL MARKET.—The term ‘‘residual

9 market’’ means an assigned risk plan, joint under10 writing association, or any similar mechanism de11 signed to make insurance available to those unable

12 to obtain it in the voluntary market. The term in13 cludes each statewide plan under part A of title XII

14 of the National Housing Act to assure fair access to

15 insurance requirements.

16 (17) RURAL AREA.—The term ‘‘rural area’’

17 means any area that—

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

19 (B) has a continuous boundary; and

20 (C) contains only areas that are rural

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

22 the Housing Act of 1949 (except that clause

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

24 purposes of this Act).
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1 (18) SECRETARY.—The term ‘‘Secretary’’

2 means the Secretary of Housing and Urban Develop3 ment.

4 (19) STATE.—The term ‘‘State’’ means any

5 State, the District of Columbia, the Commonwealth

6 of Puerto Rico, the Northern Mariana Islands, the

7 Virgin Islands, American Samoa, and the Trust Ter8 ritory of the Pacific Islands.

9 SEC. 24. EFFECTIVE DATE.

10 The requirements of this Act relating to reporting of

11 information by insurers shall take effect with respect to

12 the first annual reporting period that begins not less than

13 2 years after the date of enactment of this Act.

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