I 

114TH CONGRESS 

2D SESSION H. R. 5143 

To provide greater transparency and congressional oversight of international 

insurance standards setting processes, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 29, 2016 

Mr. LUETKEMEYER (for himself, Mr. HUIZENGA of Michigan, Mr. PEARCE, 

Mrs. WAGNER, Mr. BARR, Mr. ROTHFUS, and Mr. WESTMORELAND) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To provide greater transparency and congressional oversight 

of international insurance standards setting processes, 

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. 

4 This Act may be cited as the ‘‘Transparent Insurance 

5 Standards Act of 2016’’. 

6 SEC. 2. CONGRESSIONAL FINDINGS. 

7 The Congress finds the following: 

8 (1) The State-based system for insurance regu9 lation in the United States has served American conVerDate Sep 11 2014 05:52 May 05, 2016 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5143.IH H5143

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1 sumers well for more than 150 years and has fos2 tered an open and competitive marketplace with a 

3 diversity of insurance products to the benefit of pol4 icyholders and consumers. 

5 (2) Protecting policyholders by regulating to en6 sure an insurer’s ability to pay claims has been the 

7 hallmark of the successful United States system and 

8 should be the paramount objective of domestic pru9 dential regulation and emerging international stand10 ards. 

11 (3) United States officials participating in dis12 cussions or negotiations regarding international in13 surance standards shall support standards designed 

14 for the protection of policyholders. 

15 (4) The Secretary of the Treasury shall seek 

16 advice and recommendations from a diverse group of 

17 outside experts in performing the duties and au18 thorities of the Secretary to coordinate Federal ef19 forts and develop Federal policy on prudential as20 pects of international insurance matters. 

21 (5) The draft of the Higher Loss Absorbency 

22 capital standard adopted in 2015 by the Inter23 national Association of Insurance Supervisors, not24 withstanding the concerns of U.S. parties to the 

25 International Association of Insurance Supervisors, 


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1 unequally affects insurance products offered in the 

2 United States, an issue that must be addressed. 

3 (6) Any international standard agreed to at the 

4 International Association of Insurance Supervisors is 

5 not self-executing in the United States for any in6 surer until implemented through the required Fed7 eral or State legislative or regulatory process. 

8 SEC. 3. OBJECTIVES FOR INTERNATIONAL INSURANCE 

9 STANDARDS. 

10 The objectives of the United States regarding inter11 national insurance standards are as follows: 

12 (1) To ensure standards that maintain strong 

13 protection of policy holders, as reflected in the 

14 United States solvency regime. 

15 (2) To ensure, pursuant to enactment of the In16 surance Capital Standards Clarification Act of 2014 

17 (Public Law 113–279), standards that are appro18 priate for insurers and are not bank-centric in na19 ture. 

20 (3) To promote a principles-based approach to 

21 insurance supervision, in which capital adequacy is 

22 assessed using risk-based capital requirements for 

23 insurance combined with qualitative risk assessment 

24 and management tools. 


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1 (4) To consider the most efficient and least dis2 ruptive approaches to enhancing regulatory assess3 ment of the capital adequacy of insurance groups, 

4 including tools that are already in place. 

5 (5) To ensure that any international insurance 

6 standard recognizes prudential measures used within 

7 the United States as satisfying standards finalized 

8 by international standard-setting organizations. 

9 (6) To support increasing transparency at any 

10 global insurance or international standard-setting or11 ganization in which the United States participates, 

12 including advocating for greater stakeholder public 

13 observer access to working groups and committee 

14 meetings of the International Association of Insur15 ance Supervisors. 

16 (7) To ensure that there is a sufficient period 

17 for public consultation and comment regarding any 

18 proposed international insurance standard before it 

19 takes effect. 

20 (8) To ensure that the Secretary of the Treas21 ury and the Board of Governors of the Federal Re22 serve System achieve consensus positions with State 

23 insurance commissioners when the Secretary and the 

24 Board are United States participants in discussions 

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1 tion of Insurance Supervisors, Financial Stability 

2 Board, or any other international forum of financial 

3 regulators or supervisors that considers such issues. 

4 (9) To consider the impact of any such stand5 ard on the availability and cost of products to con6 sumers. 

7 (10) To avoid measures that could limit the 

8 availability and accessibility of risk protection and 

9 retirement security products that are essential to 

10 meeting the needs of aging populations. 

11 (11) To ensure that the merits of existing 

12 State-based capital standards are recognized and in13 corporated in any domestic or global insurance cap14 ital standard. 

15 (12) To advocate for insurance regulatory 

16 standards that are based on the nature, scale, and 

17 complexity of the risks posed by the regulated insur18 ance group and entity or activity. 

19 SEC. 4. REQUIREMENTS FOR CONSENT TO ADOPT INTER20 NATIONAL INSURANCE STANDARDS. 

21 (a) PUBLICATION OF STANDARDS; ADOPTION OF

22 CAPITAL AND PRUDENTIAL STANDARDS.—The United 

23 States may not agree to, accept, establish, enter into, or 

24 consent to the adoption of a final international insurance 

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1 tion or a foreign government, authority, or regulatory enti2 ty unless the requirements under both of the following 

3 paragraphs are complied with: 

4 (1) PUBLICATION.—The requirements under 

5 this paragraph are complied with if the conditions 

6 under one of the following subparagraphs have been 

7 met: 

8 (A) BY FEDERAL RESERVE AND TREAS9 URY.—The Chairman of the Board of Gov10 ernors of the Federal Reserve System and the 

11 Secretary of the Treasury have caused the pro12 posed text of the proposed international insur13 ance standard to be published in the Federal 

14 Register and made available for public comment 

15 for a period of not fewer than 30 days (which 

16 period may run concurrently with the 90-day 

17 period referred to in subsection (b)(3)). 

18 (B) BY STATE INSURANCE COMMIS19 SIONERS.—The State insurance commissioners 

20 have caused the proposed text of the proposed 

21 international insurance standard to be pub22 lished in a similar form and manner that pro23 vides for notice and public comment. 


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1 (2) CAPITAL STANDARD.—In the case only of a 

2 final international insurance standard setting forth 

3 any capital standard or standards for insurers— 

4 (A) such international capital standard is 

5 consistent with capital requirements set forth in 

6 the State-based system of insurance regulation; 

7 (B) the Board has issued capital require8 ments for insurance companies supervised by 

9 the Board and subject to such requirements, 

10 which shall be issued through rulemaking in ac11 cordance with the procedures established under 

12 section 553 of title 5, United States Code, re13 garding substantive rules, under which the peri14 ods for notice and public comment shall each 

15 have a duration of not fewer than 60 days; and 

16 (C) to the extent that such international 

17 capital standard is intended to be applied to a 

18 company or companies supervised by the Board 

19 of Governors of the Federal Reserve System, is 

20 consistent with the capital requirements of the 

21 Board for such companies. 

22 (b) SUBMISSION AND LAYOVER PROVISIONS.—The 

23 Secretary and the Board may not agree to, accept, estab24 lish, enter into, or consent to the adoption of an inter25 national insurance standard established through an interVerDate Sep 11 2014 05:52 May 05, 2016 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5143.IH H5143

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1 national standard-setting organization or a foreign govern2 ment, authority, or regulatory entity unless— 

3 (1) the Secretary and the Board have— 

4 (A) conducted an analysis under subsection 

5 (c) of the proposed international insurance 

6 standard; and 

7 (B) submitted to the covered congressional 

8 committees, on a day on which both Houses of 

9 Congress are in session, a copy of the proposed 

10 final text of the proposed international insur11 ance standard and the report required under 

12 subsection (c)(2) regarding such analysis; 

13 (2) the Secretary and the Chairman of the 

14 Board have determined, pursuant to such analysis, 

15 that the proposed standard will not result in any 

16 change in State law; and 

17 (3) a period of 90 calendar days beginning on 

18 the date on which the copy of the proposed final text 

19 of the standard is submitted to the covered congres20 sional committees under paragraph (1)(B) has ex21 pired, during which period the Congress may take 

22 action to approve or reject such final standard. 

23 (c) JOINT ANALYSIS BY CHAIR OF THE FEDERAL

24 RESERVE AND SECRETARY OF THE TREASURY.— 


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1 (1) IN GENERAL.—An analysis under this sub2 section of a proposed final international insurance 

3 standard shall be an analysis conducted by the Sec4 retary and the Chairman of the Board of Governors 

5 of the Federal Reserve System, in consultation with 

6 the State insurance commissioners, of the impact of 

7 such standard on consumers and markets in the 

8 United States and whether any changes in State law 

9 will result from such final standard. 

10 (2) REPORT.—Upon completion of an analysis 

11 under this subsection of a final international insur12 ance standard, the Secretary and the Board shall 

13 submit a report on the results of the analysis to the 

14 covered congressional committees and the Comp15 troller General of the United States. The report 

16 shall include a statement setting forth the deter17 mination made pursuant to paragraph (1) regarding 

18 any changes in State law resulting from such final 

19 standard. 

20 (3) NOTICE AND COMMENT.— 

21 (A) NOTICE.—The Secretary and the 

22 Chairman of the Board of Governors of the 

23 Federal Reserve System shall provide notice be24 fore the date on which drafting the report is 


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1 commenced and after the date on which the 

2 draft of the report is completed. 

3 (B) OPPORTUNITY FOR COMMENT.—There 

4 shall be an opportunity for public comment for 

5 a period beginning on the date on which the re6 port is submitted under paragraph (2) and end7 ing on the date that is not fewer than 60 days 

8 after the date on which the report is submitted. 

9 Nothing in this subparagraph shall affect the 

10 authority of the Board to issue the rule referred 

11 to in subsection (a)(2). 

12 (4) REVIEW BY COMPTROLLER GENERAL.— 

13 Upon submission of a report pursuant to paragraph 

14 (2) to the Comptroller General, the Comptroller 

15 General shall review the report and shall submit a 

16 report to the Congress setting forth the conclusions 

17 of the Comptroller General’s review. 

18 (d) LIMITED EFFECT.—This section may not be con19 strued to establish or expand any authority to implement 

20 an international insurance standard in the United States 

21 or for the United States or any representative of the Fed22 eral Government to adopt or enter into any international 

23 insurance standard. 

24 (e) TREATMENT OF STATE LAW.—In accordance 

25 with the Act of March 9, 1945 (Chapter 20; 59 Stat. 33; 


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1 15 U.S.C. 1011 et seq.), commonly referred to as the 

2 ‘‘McCarran-Ferguson Act’’, this section may not be con3 strued to preempt State law. 

4 SEC. 5. REPORTS. 

5 (a) REPORTS AND TESTIMONY BY SECRETARY OF

6 THE TREASURY AND CHAIR OF THE FEDERAL RE7 SERVE.—The Secretary and the Chairman of the Board 

8 of Governors of the Federal Reserve System shall submit 

9 to the covered congressional committees an annual report 

10 and provide testimony, not less often than every 6 months, 

11 to the covered congressional committees on the efforts of 

12 the Secretary and the Chairman with the State insurance 

13 commissioners with respect to international insurance 

14 standard-setting organizations and international insur15 ance standards, including— 

16 (1) a description of the insurance standard-set17 ting issues under discussion at international stand18 ard-setting bodies, including the Financial Stability 

19 Board and the International Association of Insur20 ance Supervisors; 

21 (2) a description of the effects that inter22 national insurance standards could have on con23 sumers and insurance markets in the United States; 

24 (3) a description of any position taken by the 

25 Secretary and the Board in international insurance 


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1 discussions or on any international insurance stand2 ard; 

3 (4) a description of the efforts by the Secretary 

4 and the Board to increase transparency and ac5 countability at the Financial Stability Board with re6 spect to insurance proposals and the International 

7 Association of Insurance Supervisors, including ef8 forts to provide additional public access to working 

9 groups and committees of the International Associa10 tion of Insurance Supervisors; and 

11 (5) a description of how the Secretary and the 

12 Board are meeting the objectives set forth in section 

13 3, or, if such objectives are not being met, an expla14 nation of the reasons for not meeting such objec15 tives. 

16 (b) REPORTS AND TESTIMONY BY STATE INSURANCE

17 COMMISSIONERS.—The State insurance commissioners 

18 may provide testimony or reports to the Congress on the 

19 issues described in subsection (a). 

20 (c) REPORT ON TRANSPARENCY.—Not later than 

21 180 days after the date of enactment of this Act, the 

22 Chairman of the Board of Governors of the Federal Re23 serve System and the Secretary shall submit to the Con24 gress a report and provide testimony to the Congress on 

25 the efforts of the Chairman and the Secretary pursuant 


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1 to subsection (a)(4) of this section to increase trans2 parency at meetings of the International Association of In3 surance Supervisors. 

4 SEC. 6. DEFINITIONS. 

5 In this Act: 

6 (1) BOARD.—The term ‘‘Board’’ means the 

7 Board of Governors of the Federal Reserve System, 

8 or the designee of the Board. 

9 (2) COVERED CONGRESSIONAL COMMITTEES.— 

10 The term ‘‘covered congressional committees’’ means 

11 the Committee on Financial Services of the House of 

12 Representatives and the Committee on Banking, 

13 Housing and Urban Affairs of the Senate. 

14 (3) INTERNATIONAL INSURANCE STANDARD.— 

15 The term ‘‘international insurance standard’’ means 

16 any international insurance supervisory standard de17 veloped by an international standards setting organi18 zation, or regulatory or supervisory forum, in which 

19 the United States participates, including the Com20 mon Framework for the Supervision of Internation21 ally Active Insurance Groups, the Financial Stability 

22 Board, and the International Association of Insur23 ance Supervisors. 


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1 (4) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of the Treasury, or the Secretary’s 

3 designee. 

4 (5) STATE INSURANCE COMMISSIONERS.—The 

5 term ‘‘State insurance commissioners’’ means the 

6 heads of the insurance commissions for the States, 

7 or State employees who are the designees of such of8 ficials. 

9 SEC. 7. TREATMENT OF COVERED AGREEMENTS. 

10 Section 314 of title 31, United States Code is amend11 ed— 

12 (1) in subsection (c)— 

13 (A) by designating paragraphs (1) and (2) 

14 as paragraphs (2) and (3), respectively; and 

15 (B) by inserting before paragraph (2), as 

16 so redesignated, the following new paragraph: 

17 ‘‘(1) the Secretary of the Treasury and the 

18 United States Trade Representative have caused to 

19 be published in the Federal Register, and made 

20 available for public comment for a period of not 

21 fewer than 30 days (which period may run concur22 rently with the 90-day period for the covered agree23 ment referred to in paragraph (3)), the proposed 

24 text of the covered agreement;’’; and 


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1 (2) by adding at the end the following new sub2 sections: 

3 ‘‘(d) CONSULTATION WITH STATE INSURANCE COM4 MISSIONERS.—In any negotiations regarding a con5 templated covered agreement, the Secretary and the 

6 United States Trade Representative shall consult with and 

7 directly include State insurance commissioners. 

8 ‘‘(e) PROHIBITION ON REGULATORY AUTHORITY.— 

9 In accordance with subsections (k) and (l) of section 313, 

10 a covered agreement shall not be used to establish or pro11 vide the Federal Insurance Office or the Treasury with 

12 any general supervisory or regulatory authority over the 

13 business of insurance or with the authority to participate 

14 in a supervisory college or similar process. 

15 ‘‘(f) TREATMENT UNDER OTHER LAW.—A covered 

16 agreement shall not be considered an international insur17 ance standard for purposes of the Transparent Insurance 

18 Standards Act of 2016 and shall not be subject to such 

19 Act.’’. 

20 SEC. 8. DUTIES OF INDEPENDENT MEMBER OF FINANCIAL 

21 STABILITY OVERSIGHT COUNCIL. 

22 Subsection (a) of section 112 of the Dodd-Frank Wall 

23 Street Reform and Consumer Protection Act (12 U.S.C. 

24 5322(a)) is amended by adding at the end the following 

25 new paragraph: 


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1 ‘‘(3) DUTIES OF INDEPENDENT MEMBER.—To 

2 assist the Council with its responsibilities to monitor 

3 international insurance developments, advise Con4 gress, and make recommendations, the Independent 

5 Member of the Council shall have the authority to— 

6 ‘‘(A) regularly consult with international 

7 insurance supervisors and international finan8 cial stability counterparts; 

9 ‘‘(B) consult with, advise, and assist the 

10 Secretary of the Treasury with respect to rep11 resenting the Federal Government of the 

12 United States, as appropriate, in the Inter13 national Association of Insurance Supervisors 

14 (including to become a non-voting member 

15 thereof), particularly on matters of systemic 

16 risk, and to consult with the Board of Gov17 ernors of the Federal Reserve System and the 

18 States concerning such matters; 

19 ‘‘(C) attend the Financial Stability Board 

20 of The Group of Twenty and join with other 

21 members from the United States, including on 

22 matters related to insurance and financial sta23 bility, and provide for the attendance and par24 ticipation at such Board, on matters related to 


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1 insurance and financial stability, of State insur2 ance commissioners; and 

3 ‘‘(D) attend, with the United States dele4 gation, the Organization for Economic Coopera5 tion and Development and observe and partici6 pate at the Insurance and Private Pensions 

7 Committee of such Organization on matters re8 lated to insurance and financial stability.’’. 

9 SEC. 9. STATE INSURANCE REGULATOR INVOLVEMENT IN 

10 INTERNATIONAL STANDARD SETTING. 

11 Parties representing the United States at the Finan12 cial Stability Board of the Group of Twenty on matters, 

13 and in meetings, related to insurance and financial sta14 bility shall consult with, and seek to include in such meet15 ings, the State insurance commissioners. 

16 SEC. 10. RULE OF CONSTRUCTION. 

17 Nothing in this Act or the amendments made by this 

18 Act may be construed to support or endorse the domestic 

19 capital standard for insurers referred to in section 4(a)(2) 

20 or any such domestic capital standards established by the 

21 Board. 

Æ 


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