I

106TH CONGRESS

1ST SESSION H. R. 1429

To establish a program under the Secretary of Housing and Urban

Development to eliminate redlining in the insurance business.

IN THE HOUSE OF REPRESENTATIVES

APRIL 15, 1999

Mr. JACKSON of Illinois (for himself, Mr. FRANK of Massachusetts, Ms.

PELOSI, Ms. LEE, Mr. LANTOS, Mr. CUMMINGS, Mr. HINCHEY, Mr.

CLAY, Ms. SCHAKOWSKY, Mrs. CLAYTON, Mr. BARRETT of Wisconsin,

Mr. BRADY of Pennsylvania, Ms. JACKSON-LEE of Texas, Mr. RUSH,

Mrs. CHRISTENSEN, Mr. HASTINGS of Florida, Ms. KILPARTICK, Mr.

THOMPSON of Mississippi, Mr. OWENS, Mr. FILNER, Mr. HILLIARD, Mr.

MEEKS of New York, Ms. NORTON, Mrs. MEEK of Florida, Mr. BISHOP,

and Ms. EDDIE BERNICE JOHNSON of Texas) introduced the following

bill; which was referred to the Committee on Banking and Financial

Services

A BILL

To establish a program under the Secretary of Housing

and Urban Development to eliminate redlining in the

insurance business.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Anti-Redlining Insur5 ance Disclosure Act of 1999’’.
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1 SEC. 2. FINDINGS AND CONSTRUCTION.

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

3 (1) disparities in property and casualty insur4 ance coverage provided by insurers engaged in inter5 state commerce between areas of different incomes

6 and racial composition could adversely affect inter7 state commerce and the cost and availability of in8 surance for consumers;

9 (2) insurance companies are increasingly using

10 credit reports in their insurance underwriting prac11 tices;

12 (3) the use of credit reports to deny insurance

13 coverage to individuals and businesses in poor and

14 minority communities could adversely affect inter15 state commerce; and

16 (4) appropriate disclosures of information by in17 surers would benefit consumers and insurance regu18 lators.

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

20 to, nor shall it be construed to, encourage unsound under21 writing practices.

22 SEC. 3. MAINTENANCE OF INFORMATION AND PUBLIC DIS23 CLOSURE.

24 (a) GENERAL RULE.—

25 (1) DESIGNATED INSURERS.—
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1 (A) IN GENERAL.—Except as provided by

2 subsection (b)(6), each designated insurer shall,

3 in accordance with subsection (b), annually

4 compile, submit to the Secretary, and make

5 available to the public for each calendar year

6 and for designated lines of insurance in a des7 ignated Metropolitan Statistical Area (referred

8 to in this Act as ‘‘MSA’’) for which the insurer

9 was designated under section 4(a)(2)—

10 (i) the total number of policies, total

11 exposure units (in car years and house

12 years), and total earned premium of insur13 ance policies by designated line which were

14 issued by such insurer, exposure units can15 celed, and the exposure units not renewed

16 by such insurer;

17 (ii) the total number of claims made

18 which, with respect to property insurance,

19 shall be disaggregated by the type and use

20 of the property insured, which types and

21 uses shall include—

22 (I) properties consisting of one to

23 4 dwelling units;

24 (II) properties consisting of more

25 than 4 dwelling units;
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1 (III) owner occupied properties;

2 (IV) rental properties: and

3 (V) vacant properties;

4 (iii) disclose the standards and cri5 teria used in underwriting each designated

6 line of insurance; and

7 (iv) the number of licensed agents of

8 such insurer and the number within each

9 census track in such designated MSA,

10 whether such agent is an employee, inde11 pendent contractor working exclusively for

12 such insurer, or an independent contractor

13 appointed to represent such insurer on a

14 nonexclusive basis.

15 (B) SUBMISSIONS AND AVAILABILITY.—

16 The information described in subparagraph (A)

17 shall be—

18 (i) submitted to the Secretary in ac19 cordance with subsection (d); and

20 (ii) made available to the public, in

21 accordance with subsection (b)(2), for in22 spection and copying, at cost, at the home

23 office of the insurer and at a central de24 pository established under subsection (c),

25 by the Secretary.
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1 (2) NONDESIGNATED INSURERS.—Except as

2 provided in subsection (b)(6), every insurer which

3 sells an insurance policy in a designated line of in4 surance in a designated MSA, and which is not a

5 designated insurer in such MSA shall submit to the

6 Secretary for each calendar year in accordance with

7 subsection (d) and regulations of the Secretary the

8 total exposure units (in car years and house years)

9 of insurance policies in a designated line sold in such

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

11 report the designated MSA where the insured risks

12 are located for which such insurance is issued and

13 within such MSA report the census track where the

14 risk is located.

15 (b) REQUIREMENTS.—

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

17 maintained and made available under subsection

18 (a)(1) shall be itemized in order to clearly and con19 spicuously disclose the policies, the exposure units,

20 and the premium amount for each line of insurance

21 for which information is required and be itemized by

22 the census track where the risks are located.

23 (2) AVAILABILITY TO THE PUBLIC.—The infor24 mation required to be maintained and made avail25 able under subsection (a) shall be made available to
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1 the public on a timetable determined by the Sec2 retary but not later than October 1 of the calendar

3 year following the calendar year for which the infor4 mation is required to be made available, except that

5 such information shall not be made available to the

6 public until it is available in its entirety, but it shall

7 be made available if not all the information required

8 to be reported is available on such October 1 or on

9 the date determined by the Secretary.

10 (3) SPECIFICATION OF DATA.—

11 (A) IN GENERAL.—With respect to infor12 mation which is required to be maintained and

13 made available under subsection (a)(1), the Sec14 retary shall by regulation establish specifica15 tions for the collection and public reporting of

16 such information with respect to the following

17 lines of insurance: private passenger auto18 mobile, homeowners, dwelling fire and allied

19 lines, small business commercial, and surety

20 bonds. The specifications shall—

21 (i) provide that information be aggre22 gated among similar policyholders and re23 ported on that basis;

24 (ii) be designed to collect information

25 with respect to the availability, cost, and
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1 type of insurance coverage between and

2 among various geographic areas;

3 (iii) detail what data elements should

4 be collected;

5 (iv) provide for the collection of infor6 mation on an individual insurer basis;

7 (v) minimize burdens on insurance

8 agents, including independent insurance

9 agents;

10 (vi) provide the data required by

11 clause (ii) with the least burden on insur12 ers, particularly small insurers;

13 (vii) take into account the types of

14 data collected under the Home Mortgage

15 Disclosure Act of 1975, such as gender,

16 racial and financial characteristics of appli17 cants for insurance and the reason for any

18 declines, cancellations, or nonrenewals

19 made for such insurance;

20 (viii) take into account existing statis21 tical reporting systems in the insurance in22 dustry;

23 (ix) require itemization by census

24 track; and
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1 (x) include information on policies

2 written in a residual market.

3 (B) CONSULTATIONS.—In developing the

4 specifications in subparagraph (A), the Sec5 retary shall consult with—

6 (i) other Federal agencies with appro7 priate expertise;

8 (ii) State insurance regulators;

9 (iii) representatives of the insurance

10 industry, including statistical agents;

11 (iv) representatives of insurance pro12 ducers, including minority insurance pro13 ducers; and

14 (v) consumer, community, and civil

15 rights groups who are representative of a

16 diversity of geographic locations.

17 (C) EFFECTIVE DATE.—The regulation

18 under subparagraph (A) shall be issued no later

19 than 270 days after the date of the enactment

20 of this Act.

21 (4) PERIOD OF MAINTENANCE.—Any informa22 tion required to be compiled and made available

23 under subsection (a)(1) shall be maintained and

24 made available for a period of 3 years after the close
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1 of the first year during which such information is re2 quired to be maintained and made available.

3 (5) FORMAT FOR DISCLOSURES.—Subject to

4 subsection (c), the Secretary shall prescribe a stand5 ard format for making information available as re6 quired by subsection (a)(1). Such format shall en7 courage the submission of information in a form

8 readable by a computer.

9 (6) EXEMPTION.—

10 (A) SECRETARIAL ACTION.—If the Sec11 retary determines that a State has enacted a

12 law, or otherwise implemented a requirement

13 under which—

14 (i) insurers operating in that State

15 are subject to disclosure requirements on a

16 census track basis substantially similar to

17 those of subsection (a);

18 (ii) there are adequate provisions for

19 enforcement; and

20 (iii) the information disclosed under

21 the State law or requirement is made avail22 able to the Secretary and the public in a

23 manner similar to other information dis24 closed under subsection (a)(1),
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1 then the Secretary shall by regulation exempt

2 insurers operating in that State from complying

3 with the requirements of subsection (a)(1) with

4 respect to that State’s portions of the des5 ignated MSA’s. If the Secretary determines

6 that the State law or requirement no longer

7 meets the criteria of clauses (i) through (iii) or

8 is no longer in effect, the Secretary shall by

9 regulation revoke the exemption.

10 (B) UNITED STATES PROGRAM.—Report11 ing shall not be required under subsection (a)

12 with respect to insurance provided by a pro13 gram underwritten or administered by the

14 United States.

15 (c) PUBLIC ACCESS SYSTEM.—The Secretary shall

16 implement a system to facilitate public access to informa17 tion required to be made available to the public under sub18 section (a)(1). Such system shall include arrangements for

19 a central depository of information in each designated

20 MSA and for a telephone number which can be used by

21 the public, at cost, to request such information. State22 ments shall be made available to the public for inspection

23 and copying at such central depository of information for

24 all designated insurers within such MSA. The Secretary

25 shall also make copies of such statements available in
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1 forms readable by widely used personal computers, such

2 as in disc format. The Secretary may charge a fee for such

3 information, which may not exceed the amount, deter4 mined by the Secretary, that is equal to the cost of repro5 ducing the information.

6 (d) SUBMISSION TO SECRETARY.—With respect to

7 the information required to be submitted under subsection

8 (a) to the Secretary, the Secretary shall develop regula9 tions prescribing the format and method for submitting

10 such information. Such regulations shall ensure uni11 formity among insurers, to the extent practicable, in the

12 format used for reporting, including the definitions of data

13 elements. Any reporting insurer may submit in writing to

14 the Secretary such additional data or explanations as it

15 deems relevant to the decision by such insurer to sell in16 surance.

17 SEC. 4. DESIGNATIONS.

18 (a) DESIGNATIONS BY THE SECRETARY.—

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

20 shall designate the MSA’s for which reporting is re21 quired under section 3(a). At a minimum, the Sec22 retary shall designate the 50 MSA’s having the larg23 est population.
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1 (2) DESIGNATION OF INSURERS.—For each

2 MSA designated under paragraph (1), the Secretary

3 shall take the following actions:

4 (A) The Secretary shall designate the in5 surers transacting insurance business in such

6 MSA for which reporting is required under sec7 tion 3(a). At a minimum, the Secretary shall

8 designate the 25 insurers in such MSA having

9 the largest premium volume in the designated

10 lines of insurance in each State in which such

11 MSA is located.

12 (B) In addition to the insurers designated

13 under subparagraph (A), the Secretary shall

14 also designate any entity primarily providing in15 surance in a designated line of insurance as

16 part of a residual market established by State

17 law.

18 (C) The Secretary shall also designate, in

19 addition to the insurers designated under sub20 paragraphs (A) and (B), insurers who specialize

21 in selling insurance in urban areas, including

22 surplus lines insurers.

23 (D) The Secretary shall also designate, in

24 addition to the insurers designated under sub25 paragraphs (A), (B), and (C) insurers such that
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1 insurers representing at least 80 percent of the

2 premium volume in each State in which such

3 MSA is located in the designated line of insur4 ance are designated in such MSA. The Sec5 retary may not designate additional insurers

6 under this subparagraph if their market share

7 in the designated line of insurance in the appli8 cable States, as measured by premium volume

9 in each State in which such MSA is located, is

10 under 1 percent.

11 (E) In addition to the insurers designated

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

13 Secretary may by regulation designate addi14 tional insurers in a MSA if the designation of

15 additional insurers is necessary to provide valid

16 data with respect to the availability, cost, and

17 type of insurance in the MSA.

18 (F) The Secretary shall revoke the des19 ignation of an insurer designated under sub20 paragraph (A) as follows: If such designated in21 surer has a market share in a designated line

22 of insurance in a MSA, as measured by pre23 mium volume in each State in which such MSA

24 is located, of under 1 percent, the Secretary

25 shall revoke the designation of such insurer be-
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1 ginning with the insurer with the smallest mar2 ket share of such insurance if the remainder of

3 the designated insurers have a market share of

4 at least 75 percent of such insurance as meas5 ured by premium volume in each State in which

6 such MSA is located. In addition, the Secretary

7 may revoke the designation of any insurer des8 ignated under subparagraph (A) with a market

9 share in a designated line of insurance in a

10 MSA, as measured by premium volume in each

11 State in which such MSA is located, of under

12 1 percent if such designation has not been re13 voked under this subparagraph and if such in14 surer primarily sells insurance in rural areas of

15 such MSA.

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

18 same group shall be considered together as 1

19 insurer.

20 (3) DESIGNATION OF LINES OF INSURANCE.—

21 For each MSA designated under paragraph (1), the

22 following are the designated lines of property and

23 casualty insurance for which reporting is required

24 under section 3:
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1 (A) Private passenger automobile insur2 ance.

3 (B) Homeowners insurance.

4 (C) Dwelling fire and allied lines of insur5 ance.

6 (D) Commercial insurance for small busi7 ness.

8 (E) Surety bonds.

9 The Secretary may designate additional lines of in10 surance on the basis of such criteria as the Sec11 retary may by rule develop. Such a rule shall be

12 issued in accordance with section 553 of title 5,

13 United States Code. For purposes of this Act, the

14 designation of a line of insurance includes a designa15 tion of a subline of class of insurance.

16 (4) TIMING OF DESIGNATIONS.—

17 (A) INITIAL DESIGNATIONS.—The Sec18 retary shall make initial designations required

19 by paragraphs (1), (2), and (3) no later than

20 July 1 of the year preceding the first year for

21 which reporting is required under section 3.

22 Such initial designations shall be effective for 5

23 calendar years from the date of designation.

24 (B) SUBSEQUENT DESIGNATIONS.—Not

25 later than July 1 of the year preceding the fifth
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1 year after a designation under subparagraph

2 (A) or this subparagraph, the Secretary shall

3 make another designation to be effective upon

4 the expiration of such 5 years and such des5 ignation shall be effective for 5 calendar years

6 from the date of designation.

7 (C) NOTICE.—The Secretary shall notify

8 persons involved in the designations no later

9 than the July 15 which follows the designation.

10 (b) OBTAINING INFORMATION.—The Secretary may

11 obtain from insurers such information as the Secretary

12 may require to make designations under subsection (a).

13 SEC. 5. DISCLOSURES TO REJECTED APPLICANTS.

14 (a) IN GENERAL.—Except as provided in subsection

15 (e), the Secretary shall, by regulation issued under section

16 553 of title 5, United States Code—

17 (1) require insurers to provide to each applicant

18 for insurance in a designated line—

19 (A) reasons for denying an application for

20 such insurance or for canceling or not renewing

21 a policy in force; and

22 (B) actions the applicant may take to qual23 ify for such insurance; and

24 (2) restrict the use insurers may make of infor25 mation relating to—
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1 (A) adverse underwriting decisions; or

2 (B) insurance coverage in a residential

3 market.

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

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

8 (c) ENFORCEMENT.—The Secretary may delegate to

9 the States the authority to enforce the requirements of

10 regulations issued under subsection (a).

11 (d) PREEMPTION.—Subsection (a) is not to be con12 strued to preempt any State from imposing on insurers

13 requirements of the type stated in such subsection, includ14 ing requirements which are more stringent or more com15 prehensive.

16 (e) EXEMPTION.—A regulation issued under sub17 section (a) may not apply to insurance provided under a

18 program underwritten or administered by the United

19 States.

20 (f) DEFINITION.—For purposes of subsection

21 (a)(2)(A), an adverse underwriting decision means any of

22 the following actions with respect to insurance trans23 actions involving insurance coverage which is individually

24 underwritten:

25 (1) A declination of insurance coverage.
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1 (2) A termination of insurance coverage.

2 (3) Failure of an agent to apply for insurance

3 coverage with a specific insurance entity which the

4 agent represents and which is requested by the ap5 plicant.

6 (4) In the case of property or casualty insur7 ance coverage—

8 (A) place by an insurance entity or agent

9 of a risk with a residual market mechanism, an

10 unauthorized insurer, or an insurance entity

11 which specializes in substandard risks; or

12 (B) the charging of higher rates on the

13 basis of information which differs from that

14 which the applicant or policyholder furnished.

15 SEC. 6. TASK FORCE ON AGENCY APPOINTMENTS.

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

17 the enactment of this Act, the Secretary shall establish

18 a task force on insurance agency appointments. The task

19 force shall—

20 (1) consist of representatives of appropriate

21 Federal agencies, property and casualty insurance

22 agents, including specifically minority insurance

23 agents, property and casualty insurance companies,

24 State insurance regulators, and public interest

25 groups;
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1 (2) have a significant representation from mi2 nority insurance agents; and

3 (3) be chaired by the Secretary or the Sec4 retary’s designee.

5 (b) FUNCTION.—The task force shall—

6 (1) review the problems inner city and minority

7 agents may have in receiving appointments to rep8 resent property and casualty insurance companies;

9 (2) review the practices of insurers in termi10 nating agents and consider the effect such practices

11 have on the availability or cost of insurance, espe12 cially in underserved areas; and

13 (3) recommend solutions to improve the ability

14 of inner city and minority insurance agents to mar15 ket property and casualty insurance products, in16 cluding steps property and casualty insurance com17 panies should take to increase their appointments of

18 such agents.

19 (c) REPORT AND TERMINATION.—The task force

20 shall report to the Committee on Banking and Financial

21 Services of the House of Representatives and the appro22 priate committee of the Senate its findings under para23 graphs (1) and (2) of subsection (b) and its recommenda24 tions under paragraph (3) of subsection (b) within 2 years

25 after the date of the enactment of this Act. The task force
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1 shall terminate when the report is submitted to the com2 mittees.

3 SEC. 7. IMPLEMENTATION OF SECTION 3.

4 (a) REGULATIONS.—The Secretary shall promulgate

5 such regulations as may be necessary to carry out section

6 3. Such regulations may—

7 (1) contain such classifications, differentiations,

8 or other provisions; and

9 (2) provide for such adjustments and exceptions

10 for any class of transactions,

11 as in the judgment of the Secretary are necessary and

12 proper to effectuate the purposes of such section and to

13 prevent circumvention or evasion thereof or to facilitate

14 compliance therewith.

15 (b) DATA COLLECTION CONTRACTOR.—The Sec16 retary may contract with a data collection contractor to

17 carry out the Secretary’s responsibilities under section 3

18 if the contractor agrees to collect and make available the

19 data pursuant to the terms and conditions of such section.

20 A statistical agent may also be a data contractor.

21 (c) ROLE OF STATISTICAL AGENTS.—

22 (1) ACCEPTANCE OF DATA.—The Secretary

23 and, if applicable, the contractor under the sub24 section (b) contract may accept data reported under
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1 section 3(a) by a statistical agent acting on behalf

2 of more than 1 insurer if—

3 (A) the statistical plan used by the statis4 tical agent for the reporting of data on insur5 ance provides for the reporting of data in a

6 manner compatible with section 3(a);

7 (B) the statistical agent reports such data

8 on an individual insurer basis, and, at the dis9 cretion of the Secretary, on an aggregate basis;

10 (C) the statistical agent provides adequate

11 procedures to protect the integrity of the data

12 reported;

13 (D) the statistical agent has procedures in

14 place which ensure that data reported under the

15 statistical plan in connection with reporting

16 under this Act and submitted to the Secretary

17 are not subject to adjustment by the statistical

18 agent or an insurer for reasons other than tech19 nical accuracy and conformance to the statis20 tical plan;

21 (E) the statistical agent ensures that the

22 data of 1 insurer is not subject to review by

23 other insurers before public availability; and

24 (F) the statistical agent provides for the

25 reporting of data in a manner compatible with
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1 the format prescribed by the Secretary under

2 section 3(d).

3 (2) DISCONTINUANCE OF DATA ACCEPTANCE.—

4 The Secretary may, after providing an opportunity

5 for a hearing, discontinue accepting data reported

6 under section 3(a) by a statistical agent acting on

7 behalf of more than 1 insurer if the Secretary deter8 mines the requirements for acceptance of data in

9 paragraph (1) are no longer met.

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

11 have the authority to review and audit any data collection

12 and reporting performed under section 3, whether by the

13 Secretary, the contractor under the subsection (b) con14 tract, or a statistical agent, to ensure that the integrity

15 of the data collected and reported is protected.

16 (e) BURDENS ON INSURANCE AGENTS.—In pre17 scribing regulations under this Act, the Secretary shall

18 take into consideration the administrative, paperwork, and

19 other burdens on insurance agents, including independent

20 insurance agents involved in complying with the require21 ments of this Act and shall minimize the burdens imposed

22 by such requirements with respect to such agents.

23 SEC. 8. RELATION TO STATE LAWS.

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

25 obligation of any insurer subject to this Act to comply with
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1 the laws of any State or subdivision thereof with respect

2 to public disclosure and record keeping.

3 SEC. 9. COMPILATION OF AGGREGATE DATA.

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

5 shall compile each year, for each designated MSA, data

6 aggregated by 5-digit zip code for all insurers who are sub7 ject to section 3 or who are exempt from section 3 under

8 subsection (b)(6)(A) of such section. The Secretary shall

9 also produce tables indicating, for each MSA, insurance

10 policies aggregated for various categories of 5-digit zip

11 codes grouped according to location, age of property, in12 come level, and racial characteristics of neighborhood.

13 (b) AGGREGATION OF INFORMATION.—Statistical

14 agents may aggregate the data of insurers that report to

15 them and may provide such information to the Secretary.

16 The Secretary may also provide the individual company

17 data submitted by insurers to statistical agents for aggre18 gation.

19 (c) AVAILABILITY TO PUBLIC.—The data compiled

20 and the tables produced pursuant to subsection (a) shall

21 be made available to the public on a timetable determined

22 by the Secretary but not later than October 1 of the year

23 following the calendar year on which the data and tables

24 are based.
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1 SEC. 10. 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 the requirements

5 of section 3 shall be subject to a civil penalty of not to

6 exceed $5,000 for each day during which such violation

7 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 of section 3.

12 (c) INSURER LIABILITY.—An insurer shall be respon13 sible under subsections (a) and (b) for any violation of

14 a statistical agent acting on behalf of the insurer.

15 SEC. 11. SUNSET.

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

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

18 5 years from its effective date. Prior to the expiration of

19 4 years from such date, the Secretary shall report to the

20 Banking and Financial Services Committee of the House

21 of Representatives and the appropriate committee of the

22 Senate—

23 (1) the quality of data received under section 3

24 and the effectiveness of the data requirement, in25 cluding the relation between the cost of such data
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1 gathering and the benefits from having such data

2 available;

3 (2) the appropriateness of the geographic data

4 reporting units;

5 (3) the need for continued reporting by the des6 ignated insurers in urban areas;

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

8 needs of minority and low-income neighborhoods;

9 and

10 (5) such other information as the Secretary de11 termines will assist in considering an extension of

12 this Act.

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

14 the need described in subsection (a)(3) and the informa15 tion described in subsection (a)(5), the Secretary may ex16 tend this Act for one period of 2 years.

17 SEC. 12. STUDIES.

18 (a) STUDY OF INFORMATION ON INSURANCE APPLI19 CANTS.—

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

21 a study to determine the feasibility and utility of the

22 collection of information with respect to the charac23 teristics of applicants for insurance and reasons for

24 rejection of applicants. The study shall examine the

25 extent to which—
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1 (A) oral applications or representations are

2 used by insurers and agents in making deter3 minations regarding whether or not to insure a

4 prospective insured;

5 (B) written applications are used by insur6 ers and agents in making determinations re7 garding whether or not to insure a prospective

8 insured;

9 (C) written applications are submitted

10 after the insurer or agent has already made a

11 determination to provide insurance to a pro12 spective insured or has determined that the pro13 spective insured is eligible for insurance; and

14 (D) prospective insureds are discouraged

15 from submitting applications for insurance

16 based, in whole or in part, on—

17 (i) the location of the risk to be in18 sured;

19 (ii) the race or ethnicity of the pro20 spective insured;

21 (iii) the racial or ethnic composition of

22 the neighborhood in which the risk to be

23 insured is located; and
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1 (iv) in the case of residential property

2 insurance, the age and value of the risk to

3 be insured.

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

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

6 Committee on Banking and Financial Services of the

7 House of Representatives and the appropriate com8 mittee of the Senate within 18 months of the date

9 of the enactment of this Act.

10 (b) STUDY OF INSURER ACTIONS TO MEET INSUR11 ANCE NEEDS OF CERTAIN NEIGHBORHOODS.—The Sec12 retary shall conduct a study of various practices, actions,

13 programs, and methods undertaken by insurers to meet

14 the property and casualty insurance needs of residents of

15 low- and moderate-income neighborhoods, minority neigh16 borhoods, and small businesses located in such neighbor17 hoods. The Secretary may establish a task force of inter18 ested parties, including representatives of insurance com19 panies, insurance agents, including minority agents, and

20 consumer representatives to discuss additional practices,

21 actions, programs, and methods to meet these needs. The

22 Secretary shall report the results of the study, including

23 any recommendations, to the Committee on Banking and

24 Financial Services of the House of Representatives and
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1 the appropriate committee of the Senate no later than 2

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

3 (c) STUDY OF DISPARATE CLAIM TREATMENT.—

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

5 a study to determine whether, and the extent to

6 which, insurers engage in disparate treatment in

7 handling claims of policyholders under designated

8 lines of insurance based on the race, gender, and in9 come level of the policyholder and the racial charac10 teristics and income levels of the area in which the

11 insurance risk is located. In conducting the study,

12 the Secretary shall specifically consider whether the

13 residents of low-income neighborhoods or areas and

14 minority neighborhoods or areas are more likely

15 than residents of other areas to have their claims

16 contested or their insurance coverage canceled.

17 (2) REPORT.—The Secretary shall submit a re18 port on the results of the study under paragraph (1)

19 to the Committee on Banking and Financial Affairs

20 of the House of Representatives and the appropriate

21 Committees of the Senate not later than 2 years

22 after the date of the enactment of this Act.

23 (d) STUDY OF RATING TERRITORIES.—The Sec24 retary shall conduct a study to determine whether the

25 practice in the insurance industry of basing insurance pre-
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1 miums on the territory in which the insured risk is located

2 has a disparate impact on the availability, affordability,

3 or quality of insurance by race, gender, or type of neigh4 borhood. The Secretary shall submit a report on the re5 sults of the study to the Committee on Banking and Fi6 nancial Affairs of the House of Representatives and the

7 appropriate Committees of the Senate not later than 12

8 months after the date of the enactment of this Act.

9 (e) STUDY OF REINVESTMENT REQUIREMENTS.—

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

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

13 from which they collect premiums for insurance and

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

20 rights organizations regarding the results of the

21 study and any recommendations to be made based

22 on the results of the study.

23 (2) REPORT.— The Secretary shall submit a re24 port on the results of the study, including any such

25 recommendations, to the Committee on Banking and
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1 Financial Affairs of the House of Representatives

2 and the appropriate Committees of the Senate not

3 later than 6 months after the conclusion of the first

4 annual reporting period to which the reporting re5 quirements under this Act apply.

6 SEC. 13. DEFINITIONS.

7 For purposes of this Act:

8 (1) COMMERCIAL INSURANCE.—The term

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

10 and casualty insurance, except private passenger

11 automobile and homeowner’s insurance.

12 (2) DESIGNATED INSURER.—The term ‘‘des13 ignated insurer’’ means an insurer designated by the

14 Secretary pursuant to section 4(a)(2).

15 (3) DESIGNATED LINE.—The term ‘‘designated

16 line’’ means a line of insurance specified in 4(a)(3).

17 (4) EXPOSURE UNITS.—The term ‘‘exposure

18 units’’ means units insured against risk of loss by an

19 insurer and the term ‘‘units’’ means an automobile

20 or the number of units in a building.

21 (5) INSURER.—The term ‘‘insurer’’ means any

22 corporation, association, society, order, firm, com23 pany, partnership, individual, or aggregation of indi24 viduals which is subject to examination or super25 vision by any State insurance regulator, or which is
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1 doing or represents an insurance business. Such

2 term does not include an individual or entity which

3 represents an insurer as agent for the purpose of

4 selling or which represents a consumer as a broker

5 for the purpose of buying insurance.

6 (6) MSA.—The term ‘‘MSA’’ means a Metro7 politan Statistical Area or a Consolidated Metropoli8 tan Statistical Area and the term ‘‘designated MSA’’

9 means an MSA designated by the Secretary pursu10 ant to section 4(a)(1).

11 (7) PROPERTY AND CASUALTY INSURANCE.—

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

13 insurance against loss of or damage to property, in14 surance against loss of income or extra expense in15 curred because of loss of, or damage to, property,

16 and insurance against third party liability claims

17 caused by negligence or imposed by statute or con18 tract.

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

20 market’’ means an assigned risk plan, joint under21 writing association, or any similar mechanism de22 signed to make insurance available to those unable

23 to obtain it in the voluntary market.

24 (9) SECRETARY.—The term ‘‘Secretary’’ means

25 the Secretary of Housing and Urban Development.
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1 (10) The term ‘‘State’’ means any State, the

2 District of Columbia, the Commonwealth of Puerto

3 Rico, the Northern Mariana Islands, the Virgin Is4 lands, American Samoa, and the Trust Territory of

5 the Pacific Islands.

6 SEC. 14. EFFECTIVE DATE.

7 The requirements of this Act shall take effect with

8 respect to information on insurance described in section

9 3 and developed in and after calendar year 2001.

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