114TH CONGRESS 

2D SESSION H. R. 5143 

AN ACT 

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, 
2 

•HR 5143 EH

1 SECTION 1. SHORT TITLE. 

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

3 Standards Act of 2016’’. 

4 SEC. 2. CONGRESSIONAL FINDINGS. 

5 The Congress finds the following: 

6 (1) The State-based system for insurance regu7 lation in the United States has served American con8 sumers well for more than 150 years and has fos9 tered an open and competitive marketplace with a 

10 diversity of insurance products to the benefit of pol11 icyholders and consumers. 

12 (2) Protecting policyholders by regulating to en13 sure an insurer’s ability to pay claims has been the 

14 hallmark of the successful United States system and 

15 should be the paramount objective of domestic pru16 dential regulation and emerging international stand17 ards. 

18 (3) United States officials participating in dis19 cussions or negotiations regarding international in20 surance standards shall support standards designed 

21 for the protection of policyholders. 

22 (4) The Secretary of the Treasury shall seek 

23 advice and recommendations from a diverse group of 

24 outside experts in performing the duties and au25 thorities of the Secretary to coordinate Federal ef-
3 

•HR 5143 EH

1 forts and develop Federal policy on prudential as2 pects of international insurance matters. 

3 (5) The draft of the Higher Loss Absorbency 

4 capital standard adopted in 2015 by the Inter5 national Association of Insurance Supervisors, not6 withstanding the concerns of U.S. parties to the 

7 International Association of Insurance Supervisors, 

8 unequally affects insurance products offered in the 

9 United States, an issue that must be addressed. 

10 (6) Any international standard agreed to at the 

11 International Association of Insurance Supervisors is 

12 not self-executing in the United States for any in13 surer until implemented through the required Fed14 eral or State legislative or regulatory process. 

15 SEC. 3. OBJECTIVES FOR INTERNATIONAL INSURANCE 

16 STANDARDS. 

17 The objectives of the United States regarding inter18 national insurance standards are as follows: 

19 (1) To ensure standards that maintain strong 

20 protection of policy holders, as reflected in the 

21 United States solvency regime. 

22 (2) To ensure, pursuant to enactment of the In23 surance Capital Standards Clarification Act of 2014 

24 (Public Law 113–279), standards that are appro-
4 

•HR 5143 EH

1 priate for insurers and are not bank-centric in na2 ture. 

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

4 insurance supervision, in which capital adequacy is 

5 assessed using risk-based capital requirements for 

6 insurance combined with qualitative risk assessment 

7 and management tools. 

8 (4) To consider the most efficient and least dis9 ruptive approaches to enhancing regulatory assess10 ment of the capital adequacy of insurance groups, 

11 including tools that are already in place. 

12 (5) To ensure that any international insurance 

13 standard recognizes prudential measures used within 

14 the United States as satisfying standards finalized 

15 by international standard-setting organizations. 

16 (6) To support increasing transparency at any 

17 global insurance or international standard-setting or18 ganization in which the United States participates, 

19 including advocating for greater stakeholder public 

20 observer access to working groups and committee 

21 meetings of the International Association of Insur22 ance Supervisors. 

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

24 for public consultation and comment regarding any 

25 proposed international insurance standard before it 
5 

•HR 5143 EH

1 takes effect and that any such final standard is com2 posed in plain writing (as such term is defined in 

3 section 3 of the Plain Writing Act of 2010 (5 U.S.C. 

4 301 note)). 

5 (8) To ensure that the Secretary of the Treas6 ury and the Board of Governors of the Federal Re7 serve System achieve consensus positions with State 

8 insurance commissioners when the Secretary and the 

9 Board are United States participants in discussions 

10 on insurance issues before the International Associa11 tion of Insurance Supervisors, Financial Stability 

12 Board, or any other international forum of financial 

13 regulators or supervisors that considers such issues. 

14 (9) To consider the impact of any such stand15 ard on the availability and cost of products to con16 sumers. 

17 (10) To avoid measures that could limit the 

18 availability and accessibility of risk protection and 

19 retirement security products that are essential to 

20 meeting the needs of aging populations. 

21 (11) To ensure that the merits of existing 

22 State-based capital standards are recognized and in23 corporated in any domestic or global insurance cap24 ital standard. 
6 

•HR 5143 EH

1 (12) To advocate for insurance regulatory 

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

3 complexity of the risks posed by the regulated insur4 ance group and entity or activity. 

5 SEC. 4. REQUIREMENTS FOR CONSENT TO ADOPT INTER6 NATIONAL INSURANCE STANDARDS. 

7 (a) PUBLICATION OF STANDARDS; ADOPTION OF

8 CAPITAL AND PRUDENTIAL STANDARDS.—The United 

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

10 consent to the adoption of a final international insurance 

11 standard with an international standard-setting organiza12 tion or a foreign government, authority, or regulatory enti13 ty unless the requirements under both of the following 

14 paragraphs are complied with: 

15 (1) PUBLICATION.—The requirements under 

16 this paragraph are complied with if the conditions 

17 under one of the following subparagraphs have been 

18 met: 

19 (A) BY FEDERAL RESERVE AND TREAS20 URY.—The Chairman of the Board of Gov21 ernors of the Federal Reserve System and the 

22 Secretary of the Treasury have caused the pro23 posed text of the proposed final international 

24 insurance standard to be published in the Fed25 eral Register and made available for public 
7 

•HR 5143 EH

1 comment for a period of not fewer than 30 days 

2 (which period may run concurrently with the 

3 90-day period referred to in subsection (b)(3)). 

4 (B) BY STATE INSURANCE COMMIS5 SIONERS.—The State insurance commissioners 

6 have caused the proposed text of the proposed 

7 international insurance standard to be pub8 lished in a similar form and manner that pro9 vides for notice and public comment. 

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

11 final international insurance standard setting forth 

12 any capital standard or standards for insurers— 

13 (A) such international capital standard is 

14 consistent with capital requirements set forth in 

15 the State-based system of insurance regulation; 

16 (B) the Board has issued capital require17 ments for insurance companies supervised by 

18 the Board and subject to such requirements, 

19 which shall be issued through rulemaking in ac20 cordance with the procedures established under 

21 section 553 of title 5, United States Code, re22 garding substantive rules, under which the peri23 ods for notice and public comment shall each 

24 have a duration of not fewer than 60 days; and 
8 

•HR 5143 EH

1 (C) to the extent that such international 

2 capital standard is intended to be applied to a 

3 company or companies supervised by the Board 

4 of Governors of the Federal Reserve System, is 

5 consistent with the capital requirements of the 

6 Board for such companies. 

7 (b) SUBMISSION AND LAYOVER PROVISIONS.—The 

8 Secretary and the Board may not agree to, accept, estab9 lish, enter into, or consent to the adoption of an inter10 national insurance standard established through an inter11 national standard-setting organization or a foreign govern12 ment, authority, or regulatory entity unless— 

13 (1) the Secretary and the Board have— 

14 (A) conducted an analysis under subsection 

15 (c) of the proposed international insurance 

16 standard; and 

17 (B) submitted to the covered congressional 

18 committees, on a day on which both Houses of 

19 Congress are in session, a copy of the proposed 

20 final text of the proposed international insur21 ance standard and the report required under 

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

23 (2) the Secretary and the Chairman of the 

24 Board have determined, pursuant to such analysis, 
9 

•HR 5143 EH

1 that the proposed standard will not result in any 

2 change in State law; 

3 (3) with respect to a capital standard under 

4 subsection (a)(2), the Secretary and the Chairman 

5 of the Board certify that the proposed international 

6 capital standard is designed solely to help ensure 

7 that sufficient funds are available to pay claims to 

8 an insurer’s policyholders in the event of the liquida9 tion of that entity; and 

10 (4) a period of 90 calendar days beginning on 

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

12 of the standard is submitted to the covered congres13 sional committees under paragraph (1)(B) has ex14 pired, during which period the Congress may take 

15 action to approve or reject such final standard. 

16 (c) JOINT ANALYSIS BY CHAIR OF THE FEDERAL

17 RESERVE AND SECRETARY OF THE TREASURY.— 

18 (1) IN GENERAL.—An analysis under this sub19 section of a proposed final international insurance 

20 standard shall be an analysis conducted by the Sec21 retary and the Chairman of the Board of Governors 

22 of the Federal Reserve System, in consultation with 

23 the State insurance commissioners, of the impact of 

24 such standard on consumers and markets in the 
10 

•HR 5143 EH

1 United States and whether any changes in State law 

2 will result from such final standard. 

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

4 under this subsection of a final international insur5 ance standard, the Secretary and the Board shall 

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

7 covered congressional committees and the Comp8 troller General of the United States. The report 

9 shall include a statement setting forth the deter10 mination made pursuant to paragraph (1) regarding 

11 any changes in State law resulting from such final 

12 standard. 

13 (3) NOTICE AND COMMENT.— 

14 (A) NOTICE.—The Secretary and the 

15 Chairman of the Board of Governors of the 

16 Federal Reserve System shall provide notice be17 fore the date on which drafting the report is 

18 commenced and after the date on which the 

19 draft of the report is completed. 

20 (B) OPPORTUNITY FOR COMMENT.—There 

21 shall be an opportunity for public comment for 

22 a period beginning on the date on which the re23 port is submitted under paragraph (2) and end24 ing on the date that is not fewer than 60 days 

25 after the date on which the report is submitted. 
11 

•HR 5143 EH

1 Nothing in this subparagraph shall affect the 

2 authority of the Board to issue the rule referred 

3 to in subsection (a)(2). 

4 (4) REVIEW BY COMPTROLLER GENERAL.— 

5 Upon submission of a report pursuant to paragraph 

6 (2) to the Comptroller General, the Comptroller 

7 General shall review the report and shall submit a 

8 report to the Congress setting forth the conclusions 

9 of the Comptroller General’s review. 

10 (d) LIMITED EFFECT.—This section may not be con11 strued to establish or expand any authority to implement 

12 an international insurance standard in the United States 

13 or for the United States or any representative of the Fed14 eral Government to adopt or enter into any international 

15 insurance standard. 

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

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

18 15 U.S.C. 1011 et seq.), commonly referred to as the 

19 ‘‘McCarran-Ferguson Act’’, this section may not be con20 strued to preempt State law. 

21 SEC. 5. REPORTS. 

22 (a) REPORTS AND TESTIMONY BY SECRETARY OF

23 THE TREASURY AND CHAIR OF THE FEDERAL RE24 SERVE.—The Secretary and the Chairman of the Board 

25 of Governors of the Federal Reserve System shall submit 
12 

•HR 5143 EH

1 to the covered congressional committees an annual report 

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

3 to the covered congressional committees on the efforts of 

4 the Secretary and the Chairman with the State insurance 

5 commissioners with respect to international insurance 

6 standard-setting organizations and international insur7 ance standards, including— 

8 (1) a description of the insurance standard-set9 ting issues under discussion at international stand10 ard-setting bodies, including the Financial Stability 

11 Board and the International Association of Insur12 ance Supervisors; 

13 (2) a description of the effects that inter14 national insurance standards could have on con15 sumers and insurance markets in the United States; 

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

17 Secretary and the Board in international insurance 

18 discussions or on any international insurance stand19 ard; 

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

21 and the Board to increase transparency and ac22 countability at the Financial Stability Board with re23 spect to insurance proposals and the International 

24 Association of Insurance Supervisors, including ef25 forts to provide additional public access to working 
13 

•HR 5143 EH

1 groups and committees of the International Associa2 tion of Insurance Supervisors; and 

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

4 Board are meeting the objectives set forth in section 

5 3, or, if such objectives are not being met, an expla6 nation of the reasons for not meeting such objec7 tives. 

8 (b) REPORTS AND TESTIMONY BY STATE INSURANCE

9 COMMISSIONERS.—The State insurance commissioners 

10 may provide testimony or reports to the Congress on the 

11 issues described in subsection (a). 

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

13 180 days after the date of enactment of this Act, the 

14 Chairman of the Board of Governors of the Federal Re15 serve System and the Secretary shall submit to the Con16 gress a report and provide testimony to the Congress on 

17 the efforts of the Chairman and the Secretary pursuant 

18 to subsection (a)(4) of this section to increase trans19 parency at meetings of the International Association of In20 surance Supervisors. 

21 (d) GAO REPORT ON TRANSPARENCY OF OUTSIDE

22 ORGANIZATIONS.— 

23 (1) IN GENERAL.—Not later than 1 year after 

24 the date of enactment of this Act, the Comptroller 

25 General of the United States shall submit to the cov-
14 

•HR 5143 EH

1 ered congressional committees a report, and provide 

2 testimony to such committees, identifying and ana3 lyzing the transparency and accountability of any or4 ganization acting as a designee of, or at the direc5 tion of, the head of a State insurance department on 

6 issues related to international insurance standards, 

7 which is not employed directly by the State. 

8 (2) CONTENT.—The report and testimony re9 quired under this section shall include a description 

10 and analysis of— 

11 (A) the role, involvement, or relationship, 

12 of any organization identified pursuant to para13 graph (1), of, with, or to the State insurance 

14 departments’ activities as authorized by, di15 rected by, or otherwise referred to in this Act, 

16 including a description and analysis regarding 

17 such organization’s participation in policy and 

18 decision-making deliberations and activities re19 lated to international insurance standards; 

20 (B) any financial support provided by such 

21 organization to any State insurance department 

22 personnel in furtherance of their activities re23 lated to international insurance standards, the 

24 nature and amount of such support, and any 

25 understandings between the organization and 
15 

•HR 5143 EH

1 the State regarding travel protocols and State 

2 laws governing State officials’ receipt of, bene3 fitting from, or being subsidized by, outside 

4 funds; 

5 (C) the budget, including revenues and ex6 penses, of any organization identified pursuant 

7 to paragraph (1) relating to participation in 

8 international insurance discussions on issues be9 fore, involving, or relating to the International 

10 Association of Insurance Supervisors, the Fi11 nancial Stability Board, or any other inter12 national forum of financial regulators or super13 visors that considers such issues, and how the 

14 organization collects money to fund such activi15 ties; 

16 (D) whether each such budget of such an 

17 organization is developed under a process com18 parable in its transparency and accountability 

19 to the process under which budgets are devel20 oped and appropriated for State departments of 

21 insurance and Federal executive branch regu22 latory agencies, including— 

23 (i) an identification of any bodies 

24 independent of the organization that set 
16 

•HR 5143 EH

1 standards for and/or oversee that organiza2 tion’s budgeting process; and 

3 (ii) a description of the extent to 

4 which and how the organization, in fund5 ing its operations, uses or benefits from its 

6 members’ ability to compel entities subject 

7 to its members’ regulatory authority to use 

8 the services of the organization or any of 

9 its affiliates; and 

10 (E) the extent to which the work product 

11 of any organization identified pursuant to para12 graph (1) has the effect of establishing any self13 executing national standards, and in what way, 

14 and whether such standards are developed 

15 under processes comparable in their trans16 parency and accountability to the process under 

17 which national standards are developed by the 

18 Congress or Federal executive branch agencies. 

19 SEC. 6. DEFINITIONS. 

20 In this Act: 

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

22 Board of Governors of the Federal Reserve System, 

23 or the designee of the Board. 

24 (2) COVERED CONGRESSIONAL COMMITTEES.— 

25 The term ‘‘covered congressional committees’’ means 
17 

•HR 5143 EH

1 the Committee on Financial Services of the House of 

2 Representatives and the Committee on Banking, 

3 Housing and Urban Affairs of the Senate. 

4 (3) INTERNATIONAL INSURANCE STANDARD.— 

5 The term ‘‘international insurance standard’’ means 

6 any international insurance supervisory standard de7 veloped by an international standards setting organi8 zation, or regulatory or supervisory forum, in which 

9 the United States participates, including the Com10 mon Framework for the Supervision of Internation11 ally Active Insurance Groups, the Financial Stability 

12 Board, and the International Association of Insur13 ance Supervisors. 

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

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

16 designee. 

17 (5) STATE INSURANCE COMMISSIONERS.—The 

18 term ‘‘State insurance commissioners’’ means the 

19 heads of the State insurance departments or their 

20 designees acting at their direction. 

21 SEC. 7. TREATMENT OF COVERED AGREEMENTS. 

22 Section 314 of title 31, United States Code is amend23 ed— 

24 (1) in subsection (c)— 
18 

•HR 5143 EH

1 (A) by redesignating paragraphs (1) and 

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

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

4 so redesignated, the following new paragraph: 

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

6 United States Trade Representative have caused to 

7 be published in the Federal Register, and made 

8 available for public comment for a period of not 

9 fewer than 30 days (which period may run concur10 rently with the 90-day period for the covered agree11 ment referred to in paragraph (3)), the proposed 

12 text of the covered agreement;’’; and 

13 (2) by adding at the end the following new sub14 sections: 

15 ‘‘(d) CONSULTATION WITH STATE INSURANCE COM16 MISSIONERS.—In any negotiations regarding a con17 templated covered agreement, the Secretary and the 

18 United States Trade Representative shall consult with and 

19 directly include State insurance commissioners. 

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

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

22 a covered agreement shall not be used to establish or pro23 vide the Federal Insurance Office or the Treasury with 

24 any general supervisory or regulatory authority over the 
19 

•HR 5143 EH

1 business of insurance or with the authority to participate 

2 in a supervisory college or similar process. 

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

4 agreement shall not be considered an international insur5 ance standard for purposes of the Transparent Insurance 

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

7 Act.’’. 

8 SEC. 8. DUTIES OF INDEPENDENT MEMBER OF FINANCIAL 

9 STABILITY OVERSIGHT COUNCIL. 

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

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

12 5322(a)) is amended by adding at the end the following 

13 new paragraph: 

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

15 assist the Council with its responsibilities to monitor 

16 international insurance developments, advise Con17 gress, and make recommendations, the Independent 

18 Member of the Council shall have the authority to— 

19 ‘‘(A) regularly consult with international 

20 insurance supervisors and international finan21 cial stability counterparts; 

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

23 Secretary of the Treasury with respect to rep24 resenting the Federal Government of the 

25 United States, as appropriate, in the Inter-
20 

•HR 5143 EH

1 national Association of Insurance Supervisors 

2 (including to become a non-voting member 

3 thereof), particularly on matters of systemic 

4 risk, and to consult with the Board of Gov5 ernors of the Federal Reserve System and the 

6 States concerning such matters; 

7 ‘‘(C) attend the Financial Stability Board 

8 of The Group of Twenty and join with other 

9 members from the United States, including on 

10 matters related to insurance and financial sta11 bility, and provide for the attendance and par12 ticipation at such Board, on matters related to 

13 insurance and financial stability, of State insur14 ance commissioners; and 

15 ‘‘(D) attend, with the United States dele16 gation, the Organization for Economic Coopera17 tion and Development and observe and partici18 pate at the Insurance and Private Pensions 

19 Committee of such Organization on matters re20 lated to insurance and financial stability.’’. 

21 SEC. 9. STATE INSURANCE REGULATOR INVOLVEMENT IN 

22 INTERNATIONAL STANDARD SETTING. 

23 Parties representing the United States at the Finan24 cial Stability Board of the Group of Twenty on matters, 

25 and in meetings, related to insurance and financial sta-
21 

•HR 5143 EH

1 bility shall consult with, and seek to include in such meet2 ings, the State insurance commissioners. 

3 SEC. 10. RULE OF CONSTRUCTION. 

4 Nothing in this Act or the amendments made by this 

5 Act may be construed to support or endorse the domestic 

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

7 or any such domestic capital standards established by the 

8 Board. 

9 SEC. 11. SECURITIES AND EXCHANGE COMMISSION RE10 SERVE FUND. 

11 Clause (i) of section 4(i)(2)(B) of the Securities Ex12 change Act of 1934 (15 U.S.C. 78d(i)(2)(B)(i)) is amend13 ed by inserting before the semicolon the following: ‘‘, ex14 cept that for fiscal year 2017, the amount deposited may 

15 not exceed $43,000,000’’. 

Passed the House of Representatives December 7, 

2016. 

Attest: 

Clerk. 
114TH CONGRESS 

2D SESSION H. R. 5143 

AN ACT 

To provide greater transparency and congressional 

setting processes, and for other purposes. oversight of international insurance standards