IB 

Union Calendar No. 391 

113TH CONGRESS 

2D SESSION H. R. 4871 

[Report No. 113–523] 

To reauthorize the Terrorism Risk Insurance Act of 2002, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 17, 2014 

Mr. NEUGEBAUER (for himself and Mr. WESTMORELAND) introduced the 

following bill; which was referred to the Committee on Financial Services 

JULY 16, 2014 

Additional sponsors: Mr. ROYCE, Mr. BACHUS, Mr. MULVANEY, Mr. 

MCHENRY, Mr. GARRETT, Mr. STIVERS, Mr. FINCHER, Mr. HUIZENGA

of Michigan, Mr. ROSS, Ms. GRANGER, Mr. OLSON, Mr. CARTER, Mr. 

SMITH of Texas, Mr. SAM JOHNSON of Texas, Mr. THORNBERRY, Mr. 

CULBERSON, Mr. SESSIONS, Mr. CONAWAY, Mr. WEBER of Texas, Mr. 

STOCKMAN, Mr. HALL, Mr. MARCHANT, Mr. DUFFY, Mr. LUETKEMEYER, Mr. HURT, Mr. ROGERS of Alabama, and Mr. JOLLY

JULY 16, 2014 

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

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

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

[For text of introduced bill, see copy of bill as introduced on June 17, 2014] 

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A BILL 

To reauthorize the Terrorism Risk Insurance Act of 2002, 

and for other purposes. 

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

3 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘TRIA Reform Act of 2014’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title and table of contents. 

TITLE I—TRIA REFORM 

Sec. 101. References. 

Sec. 102. Extension of program. 

Sec. 103. Certification of acts of terrorism. 

Sec. 104. Separate treatment of conventional terrorism from NBCR terrorism. 

Sec. 105. Availability of coverage. 

Sec. 106. Terrorism loss risk-spreading premiums amount. 

Sec. 107. Increase of aggregate retention amount; mandatory recoupment. 

Sec. 108. Terrorism loss risk-spreading premium. 

Sec. 109. Risk-sharing mechanisms. 

Sec. 110. Reporting of terrorism insurance data. 

Sec. 111. Delivery of notices to policyholders. 

Sec. 112. Definition of control. 

Sec. 113. Annual study of small insurer market competitiveness. 

Sec. 114. CBO and OMB studies regarding budgeting for costs of Federal insurance programs. 

Sec. 115. GAO study on upfront premiums and capital reserve fund. 

TITLE II—NATIONAL ASSOCIATION OF REGISTERED AGENTS AND 

BROKERS REFORM 

Sec. 201. Short title. 

Sec. 202. Reestablishment of the National Association of Registered Agents and 

Brokers. 

8 TITLE I—TRIA REFORM 

9 SEC. 101. REFERENCES. 

10 Except as otherwise expressly provided, wherever in 

11 this title an amendment or repeal is expressed in terms of 

12 an amendment to, or repeal of, a section or other provision, 

13 the reference shall be considered to be made to a section or 

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1 other provision of the Terrorism Risk Insurance Act of 2002 

2 (15 U.S.C. 6701 note). 

3 SEC. 102. EXTENSION OF PROGRAM. 

4 (a) IN GENERAL.—Subsection (a) of section 108 (15 

5 U.S.C. 6701 note) is amended by striking ‘‘December 31, 

6 2014’’ and inserting ‘‘December 31, 2019’’. 

7 (b) PROGRAM YEARS.—Subparagraph (G) of section 

8 102(11) (15 U.S.C. 6701 note) is amended by striking 

9 ‘‘2014’’ and inserting ‘‘2019’’. 

10 SEC. 103. CERTIFICATION OF ACTS OF TERRORISM. 

11 (a) IN GENERAL.—Paragraph (1) of section 102 (15 

12 U.S.C. 6701 note) is amended— 

13 (1) in subparagraph (A), in the matter preceding 

14 clause (i), by striking ‘‘concurrence with the Secretary 

15 of State’’ and inserting ‘‘consultation with the Sec16 retary of Homeland Security’’; 

17 (2) in subparagraph (B)— 

18 (A) in clause (i), by striking ‘‘; or’’ and in19 serting a period; 

20 (B) by striking clause (ii); and 

21 (C) by striking ‘‘terrorism if—’’ and all 

22 that follows through ‘‘(i) the act’’ and inserting 

23 ‘‘terrorism if the act’’; 

24 (3) by redesignating subparagraphs (C) and (D) 

25 as subparagraphs (E) and (G), respectively; 

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1 (4) by inserting after subparagraph (B) the fol2 lowing new subparagraph: 

3 ‘‘(C) TIMING OF CERTIFICATION.— 

4 ‘‘(i) PRELIMINARY CERTIFICATION NO5 TICE.—The Secretary shall issue a prelimi6 nary certification notice indicating whether 

7 an act is expected to be a certified act of 

8 terrorism not later than 15 days after— 

9 ‘‘(I) the date of the occurrence of 

10 a potential act of terrorism; or 

11 ‘‘(II) the receipt of a petition seek12 ing a preliminary certification deci13 sion submitted by an insurer having 

14 an in-force policy or policies that could 

15 be affected by a certification decision. 

16 ‘‘(ii) FINAL CERTIFICATION NOTICE.— 

17 Not later than 90 days after the date of the 

18 occurrence of a potential act of terrorism or 

19 the receipt of a petition submitted to the 

20 Secretary pursuant to clause (i)(II), the 

21 Secretary shall issue a final certification 

22 notice indicating whether an act is a cer23 tified act of terrorism for purposes of this 

24 Act. 

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1 ‘‘(iii) RULE OF CONSTRUCTION.—Fail2 ure to issue a preliminary certification no3 tice under clause (i) shall not prevent the 

4 Secretary from issuing a final certification 

5 notice under clause (ii).’’; and 

6 (5) by inserting before subparagraph (G), as so 

7 redesignated by paragraph (3) of this subsection, the 

8 following new subparagraph: 

9 ‘‘(F) FAILURE TO MAKE DETERMINATION.— 

10 If the Secretary does not certify, or make a deter11 mination not to certify, an act as an act of ter12 rorism before the expiration of the 90-day period 

13 beginning on the occurrence of such act, such act 

14 shall be treated for purposes of this Act as hav15 ing been determined by the Secretary not to be 

16 an act of terrorism and such determination shall 

17 be final and shall not be subject to judicial re18 view.’’. 

19 (b) APPLICABILITY.—The amendments made by sub20 section (a) shall apply to the Program Year for the Ter21 rorism Insurance Program established by title I of the Ter22 rorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) 

23 that begins on January 1, 2015, and Program Years there24 after. 

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1 SEC. 104. SEPARATE TREATMENT OF CONVENTIONAL TER2 RORISM FROM NBCR TERRORISM. 

3 (a) DEFINITION.— 

4 (1) IN GENERAL.—Section 102 (15 U.S.C. 6701 

5 note) is amended— 

6 (A) in paragraph (1), by inserting after 

7 subparagraph (C), as added by section 103(a)(4) 

8 of this Act, the following new subparagraph: 

9 ‘‘(D) ACT OF NBCR TERRORISM.—Each cer10 tification of an act of terrorism under subpara11 graph (A) shall include a determination of 

12 whether such act involves NBCR terrorism.’’; 

13 (B) by redesignating paragraphs (9) 

14 through (16) as paragraphs (10) through (17), 

15 respectively; and 

16 (C) by inserting after paragraph (8) the fol17 lowing new paragraph: 

18 ‘‘(9) NBCR TERRORISM.—Notwithstanding 

19 paragraph (1), the term ‘NBCR terrorism’ means an 

20 act of terrorism to the extent that the insured losses 

21 involve, regardless of any other cause or event that 

22 contributes concurrently or in any sequence to such 

23 insurance loss— 

24 ‘‘(A) an act of terrorism that is carried out 

25 by means of the dispersal or application of ra26 dioactive material, or through the use of a numstockstill on DSK4VPTVN1PROD with BILLS

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1 clear weapon or device that involves or produces 

2 a nuclear reaction, nuclear radiation, or radio3 active contamination; 

4 ‘‘(B) the release of radioactive material, and 

5 it appears that one purpose of the act of ter6 rorism was to release such material; 

7 ‘‘(C) an act of terrorism that is carried out 

8 by means of the dispersal or application of path9 ogenic or poisonous biological or chemical mate10 rial; or 

11 ‘‘(D) the release of pathogenic or poisonous 

12 biological or chemical material, and it appears 

13 that one purpose of the act of terrorism was to 

14 release such material.’’. 

15 (2) APPLICABILITY.—The amendments made by 

16 paragraph (1) shall apply to the Program Year for 

17 the Terrorism Insurance Program established by title 

18 I of the Terrorism Risk Insurance Act of 2002 (15 

19 U.S.C. 6701 note) that begins on January 1, 2016, 

20 and Program Years thereafter. 

21 (b) FEDERAL SHARE OF INSURED LOSS COMPENSA22 TION.—Subparagraph (A) of section 103(e)(1) (15 U.S.C. 

23 6701 note) is amended— 

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1 (1) by striking ‘‘The Federal share’’ and insert2 ing ‘‘Subject to subparagraphs (B) and (C), the Fed3 eral share’’; 

4 (2) by striking ‘‘an insurer during the Transi5 tion period’’ and inserting the following: ‘‘an in6 surer— 

7 ‘‘(i) during the Transition period,’’; 

8 (3) by inserting ‘‘through the Program Year end9 ing on December 31, 2015,’’ after ‘‘each Program Year 

10 thereafter’’; 

11 (4) by striking the period at the end and insert12 ing ‘‘; and’’; and 

13 (5) by adding at the end the following new 

14 clause: 

15 ‘‘(ii) shall be equal to— 

16 ‘‘(I) except as provided in sub17 clause (II)— 

18 ‘‘(aa) during the Program 

19 Year beginning on January 1, 

20 2016, 84 percent of that portion of 

21 the amount of such insured losses 

22 that exceeds the applicable insurer 

23 deductible required to be paid 

24 during such Program Year; 

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1 ‘‘(bb) during the Program 

2 Year beginning on January 1, 

3 2017, 83 percent of that portion of 

4 the amount of such insured losses 

5 that exceeds the applicable insurer 

6 deductible required to be paid 

7 during such Program Year; 

8 ‘‘(cc) during the Program 

9 Year beginning on January 1, 

10 2018, 82 percent of that portion of 

11 the amount of such insured losses 

12 that exceeds the applicable insurer 

13 deductible required to be paid 

14 during such Program Year; and 

15 ‘‘(dd) during the Program 

16 Year beginning on January 1, 

17 2019, 80 percent of that portion of 

18 the amount of such insured losses 

19 that exceeds the applicable insurer 

20 deductible required to be paid 

21 during such Program Year; and 

22 ‘‘(II) in the case of insured losses 

23 resulting from acts of NBCR terrorism, 

24 during the Program Year beginning on 

25 January 1, 2016, and each Program 

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1 Year thereafter, 85 percent of that por2 tion of the amount of such insured 

3 losses that exceeds the applicable in4 surer deductible required to be paid 

5 during such Program Year.’’. 

6 (c) PROGRAM TRIGGER.—Subparagraph (B) of section 

7 103(e)(1) (15 U.S.C. 6701 note) is amended— 

8 (1) in the matter preceding clause (i)— 

9 (A) by striking ‘‘a certified act’’ and insert10 ing ‘‘certified acts’’; and 

11 (B) by striking ‘‘such certified act’’ and in12 serting ‘‘such certified acts’’; 

13 (2) in clause (i) by striking ‘‘or’’ at the end; 

14 (3) in clause (ii), by striking the period at the 

15 end and inserting the following ‘‘through the Program 

16 Year ending on December 31, 2015; or’’; 

17 (4) by adding at the end the following: 

18 ‘‘(iii)(I) except as provided in sub19 clause (II)— 

20 ‘‘(aa) $200,000,000, with respect 

21 to such insured losses occurring in the 

22 Program Year beginning on January 

23 1, 2016; 

24 ‘‘(bb) $300,000,000, with respect 

25 to such insured losses occurring in the 

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1 Program Year beginning on January 

2 1, 2017; 

3 ‘‘(cc) $400,000,000, with respect 

4 to such insured losses occurring in the 

5 Program Year beginning on January 

6 1, 2018; and 

7 ‘‘(dd) $500,000,000, with respect 

8 to such insured losses occurring in the 

9 Program Year beginning on January 

10 1, 2019; and 

11 ‘‘(II) in the case of an act of NBCR 

12 terrorism, $100,000,000, with respect to 

13 such insured losses occurring in the Pro14 gram Year beginning on January 1, 2016, 

15 or any Program Year thereafter.’’; and 

16 (5) by adding after and below clause (iii), as 

17 added by paragraph (4) of this subsection, the fol18 lowing: 

19 ‘‘In determining the aggregate industry insured 

20 losses resulting from certified acts of terrorism 

21 for purposes of this subparagraph, the Secretary 

22 shall not consider any act of terrorism resulting, 

23 in the aggregate, in less than $50,000,000 in in24 sured losses.’’. 

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1 SEC. 105. AVAILABILITY OF COVERAGE. 

2 Subsection (c) of section 103 (15 U.S.C. 6701 note) is 

3 amended to read as follows: 

4 ‘‘(c) MANDATORY AVAILABILITY.— 

5 ‘‘(1) IN GENERAL.—Except as provided in para6 graph (2), during each Program Year, each entity 

7 that meets the definition of an insurer under section 

8 102 shall make available— 

9 ‘‘(A) in all of its property and casualty in10 surance policies, coverage for insured losses; and 

11 ‘‘(B) property and casualty insurance cov12 erage for insured losses that does not differ mate13 rially from the terms, amounts, and other cov14 erage limitations applicable to losses arising 

15 from events other than acts of terrorism. 

16 ‘‘(2) NO MANDATORY AVAILABILITY FOR SMALL

17 INSURERS.—The Secretary shall provide, by regula18 tion and in consultation with State insurance regu19 latory authorities, that paragraph (1) shall not apply 

20 for a Program Year with respect to any small insurer 

21 (as such term is defined in such regulations by the 

22 Secretary) that, at the option of the insurer, makes a 

23 request for such inapplicability for such Program 

24 Year to the appropriate State insurance regulatory 

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1 latory authority to meet such requirements for finan2 cial hardship or financial infeasibility of providing 

3 coverage for insured losses as the Secretary shall es4 tablish in such regulations. The insurer shall provide 

5 notice, in a manner satisfactory to the State insur6 ance regulatory authority, informing affected prospec7 tive and current policyholders whether such coverage 

8 is not provided by the insurer. This paragraph may 

9 not be construed to require any State insurance regu10 latory authority to undertake making determinations 

11 under this paragraph.’’. 

12 SEC. 106. TERRORISM LOSS RISK-SPREADING PREMIUMS 

13 AMOUNT. 

14 (a) IN GENERAL.—Subparagraph (C) of section 

15 103(e)(7) (15 U.S.C. 6701 note) is amended— 

16 (1) by striking ‘‘subparagraphs (A) through (E)’’ 

17 and inserting ‘‘subparagraphs (A) through (F)’’; and 

18 (2) by striking ‘‘133 percent’’ and inserting ‘‘150 

19 percent’’. 

20 (b) APPLICABILITY.—The amendment made by sub21 section (a) shall apply to the Program Year for the Ter22 rorism Insurance Program established by title I of the Ter23 rorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) 

24 that begins on January 1, 2016, and Program Years there25 after. 

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1 SEC. 107. INCREASE OF AGGREGATE RETENTION AMOUNT; 

2 MANDATORY RECOUPMENT. 

3 (a) IN GENERAL.—Paragraph (6) of section 103(e) (15 

4 U.S.C. 6701 note) is amended— 

5 (1) in subparagraph (D)(ii), by striking ‘‘and’’ 

6 at the end; 

7 (2) in subparagraph (E)— 

8 (A) in the matter preceding clause (i), by 

9 inserting ‘‘through the Program Year ending on 

10 December 31, 2015’’ before the comma; and 

11 (B) in clause (ii), by striking the period at 

12 the end and inserting ‘‘; and’’; and 

13 (3) by adding at the end the following new sub14 paragraph: 

15 ‘‘(F) for the Program Year beginning Janu16 ary 1, 2016, and each Program Year thereafter, 

17 the lesser of— 

18 ‘‘(i) the amount that is equal to the 

19 sum of the insurer deductibles for the Pro20 gram Year for all insurers participating in 

21 the Program; and 

22 ‘‘(ii) the aggregate amount, for all in23 surers, of insured losses during such Pro24 gram Year.’’. 

25 (b) MANDATORY RECOUPMENT.— 

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1 (1) AMOUNT; TIMING.—Paragraph (7) of section 

2 103(e) (15 U.S.C. 6701 note) is amended— 

3 (A) by striking subparagraphs (A) and (B) 

4 and inserting the following new subparagraph: 

5 ‘‘(A) MANDATORY RECOUPMENT AMOUNT.— 

6 For purposes of this paragraph, the mandatory 

7 recoupment amount for each of the periods re8 ferred to in subparagraphs (A) through (F) of 

9 paragraph (6) shall be equal to the lesser of— 

10 ‘‘(i) the aggregate amount, for all in11 surers, of insured losses during such period 

12 that are compensated by the Federal Gov13 ernment pursuant to paragraph (1); or 

14 ‘‘(ii) the insurance marketplace aggre15 gate retention amount under paragraph (6) 

16 for such period.’’; 

17 (B) in subparagraph (E)(i)(III), by strik18 ing ‘‘after January 1, 2012’’ and inserting ‘‘be19 fore December 31, 2014’’; and 

20 (C) by redesignating subparagraphs (C), 

21 (D), (E) (as so amended), and (F) as subpara22 graphs (B), (C), (D), and (E), respectively. 

23 (2) CONFORMING AMENDMENTS.—Section 103(e) 

24 (15 U.S.C. 6701 note) is amended in paragraph 

25 (7)(D)(i), as so redesignated by paragraph (1)(C) of 

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1 this subsection, by striking ‘‘subparagraph (C)’’ and 

2 inserting ‘‘subparagraph (B)’’. 

3 SEC. 108. TERRORISM LOSS RISK-SPREADING PREMIUM. 

4 (a) IN GENERAL.—Section 103(e) (15 U.S.C. 6701 

5 note) is amended by striking paragraph (8) and inserting 

6 the following new paragraph: 

7 ‘‘(8) TERRORISM LOSS RISK-SPREADING PRE8 MIUMS.— 

9 ‘‘(A) ESTABLISHMENT.—After an act of ter10 rorism, the Secretary shall, to the extent pro11 vided in paragraph (7)(B), and may, to the ex12 tent provided in paragraph (7)(C), establish ter13 rorism loss risk-spreading premiums, which shall 

14 be imposed as a policyholder premium surcharge 

15 on property and casualty insurance policies for 

16 all participating insurers in force after the date 

17 of such establishment. 

18 ‘‘(B) COLLECTION.—The Secretary shall 

19 provide for insurers to collect terrorism loss risk20 spreading premiums and remit such amounts 

21 collected to the Secretary. 

22 ‘‘(C) DETERMINATION OF PREMIUMS.—In 

23 determining the method and manner of imposing 

24 terrorism loss risk-spreading premiums, includmstockstill on DSK4VPTVN1PROD with BILLS

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1 ing the amount of such premiums, the Secretary 

2 shall— 

3 ‘‘(i) impose such terrorism loss risk4 spreading premiums beginning with such 

5 period of coverage during the year as the 

6 Secretary determines appropriate, but shall 

7 commence imposition of such premiums not 

8 later than 18 months after the occurrence of 

9 the act of terrorism for which such pre10 miums are imposed; 

11 ‘‘(ii) base any terrorism loss risk12 spreading premium on a percentage of the 

13 premium amount charged for property and 

14 casualty insurance coverage under the pol15 icy; and 

16 ‘‘(iii) take into consideration— 

17 ‘‘(I) the economic impact on com18 mercial centers of urban areas, includ19 ing the effect on commercial rents and 

20 commercial insurance premiums, par21 ticularly rents and premiums charged 

22 to small businesses, and the avail23 ability of lease space and commercial 

24 insurance within urban areas; 

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1 ‘‘(II) the risk factors related to 

2 rural areas and smaller commercial 

3 centers, including the potential expo4 sure to loss and the likely magnitude of 

5 such loss, as well as any resulting 

6 cross-subsidization that might result; 

7 and 

8 ‘‘(III) the various exposures to 

9 terrorism risk for different lines of in10 surance. 

11 ‘‘(D) PERCENTAGE LIMITATION.—A ter12 rorism loss risk-spreading premium collected on 

13 a discretionary basis pursuant to paragraph 

14 (7)(C) shall not be less than, on an annual basis, 

15 the amount equal to 3 percent of the premium 

16 charged for property and casualty insurance cov17 erage under the policy. 

18 ‘‘(E) TIMING OF PREMIUMS.—The Secretary 

19 may adjust the timing of terrorism loss risk20 spreading premiums to provide for equivalent 

21 application of the provisions of this title to poli22 cies that are not based on a calendar year, or to 

23 apply such provisions on a daily, monthly, or 

24 quarterly basis, as appropriate.’’. 

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1 (b) APPLICABILITY.—The amendment made by sub2 section (a) shall apply to the Program Year for the Ter3 rorism Insurance Program established by title I of the Ter4 rorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) 

5 that begins on January 1, 2016, and Program Years there6 after. 

7 SEC. 109. RISK-SHARING MECHANISMS. 

8 (a) IN GENERAL.—Section 103(e) (15 U.S.C. 6701 

9 note) is amended by adding at the end the following new 

10 paragraph: 

11 ‘‘(9) RISK-SHARING MECHANISMS.— 

12 ‘‘(A) FINDING; RULE OF CONSTRUCTION.— 

13 The Congress finds that it is desirable to encour14 age the growth of nongovernmental, private mar15 ket reinsurance capacity for protection against 

16 losses arising from acts of terrorism. Therefore, 

17 nothing in this title shall prohibit insurers from 

18 developing risk-sharing mechanisms (including 

19 mutual reinsurance facilities and agreements, 

20 use of the capital markets, and insurance-linked 

21 securities) to voluntarily reinsure terrorism 

22 losses between and among themselves that are not 

23 subject to reimbursement under this section. 

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1 ‘‘(B) ESTABLISHMENT OF ADVISORY COM2 MITTEE.—The Secretary shall appoint an Advi3 sory Committee to— 

4 ‘‘(i) encourage the creation and devel5 opment of such risk-sharing mechanisms; 

6 ‘‘(ii) assist the Secretary and be avail7 able to administer such risk-sharing mecha8 nisms; and 

9 ‘‘(iii) develop articles of incorporation, 

10 bylaws, and a plan of operation for any 

11 long-term reinsurance facility authorized or 

12 created in the future. 

13 ‘‘(C) MEMBERSHIP.—The Advisory Com14 mittee shall be composed of nine members who 

15 are directors, officers, or other employees of in16 surers, reinsurers, or capital market participants 

17 that are participating or that desire to partici18 pate in such mechanisms, and who are represent19 ative of the affected sectors of the insurance in20 dustry, including commercial property insur21 ance, commercial casualty insurance, reinsur22 ance, and alternative risk transfer industries.’’. 

23 (b) APPLICABILITY.—The amendment made by sub24 section (a) shall apply to the Program Year for the Ter25 rorism Insurance Program established by title I of the Termstockstill on DSK4VPTVN1PROD with BILLS

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1 rorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) 

2 that begins on January 1, 2015, and Program Years there3 after. 

4 SEC. 110. REPORTING OF TERRORISM INSURANCE DATA. 

5 Section 104 (15 U.S.C. 6701 note) is amended by add6 ing at the end the following new subsection: 

7 ‘‘(h) REPORTING OF TERRORISM INSURANCE DATA.— 

8 ‘‘(1) AUTHORITY.—During the Program Year be9 ginning on January 1, 2016, and in each Program 

10 Year thereafter, the Secretary shall require insurers 

11 participating in the Program to submit to the Sec12 retary such information regarding insurance coverage 

13 for terrorism losses of such insurers as the Secretary 

14 considers appropriate to analyze the effectiveness of 

15 the Program, which shall include information regard16 ing— 

17 ‘‘(A) lines of insurance with exposure to 

18 such losses; 

19 ‘‘(B) premiums earned on such coverage; 

20 ‘‘(C) geographical location of exposures; 

21 ‘‘(D) pricing of such coverage; 

22 ‘‘(E) the take-up rate for such coverage; 

23 ‘‘(F) the amount of private reinsurance for 

24 acts of terrorism purchased; and 

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1 ‘‘(G) such other matters as the Secretary 

2 considers appropriate. 

3 ‘‘(2) REPORTS.—Not later than 6 months after 

4 the termination of the Program Year beginning on 

5 January 1, 2016, and not later than 6 months after 

6 the termination of each Program Year thereafter, the 

7 Secretary shall submit a report to the Committee on 

8 Financial Services of the House of Representatives 

9 and the Committee on Banking, Housing, and Urban 

10 Affairs of the Senate that includes— 

11 ‘‘(A) an analysis of the overall effectiveness 

12 of the Program; 

13 ‘‘(B) an evaluation of any changes or trends 

14 in the data collected under paragraph (1); 

15 ‘‘(C) an evaluation of whether any aspects 

16 of the Program have the effect of discouraging or 

17 impeding insurers from providing commercial 

18 property casualty insurance coverage or coverage 

19 for acts of terrorism; 

20 ‘‘(D) an evaluation of the impact of the 

21 Program on workers’ compensation insurers; 

22 ‘‘(E) an evaluation of the impact on avail23 ability and affordability of terrorism insurance 

24 coverage and fiscal protection of the taxpayers of 

25 separate Federal treatment under the Program 

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1 for nuclear, biological, chemical, and radiological 

2 terrorism; and 

3 ‘‘(F) in the case of the data reported in 

4 paragraph (1)(B), an updated estimate of the 

5 total amount earned since the commencement of 

6 Program Year 1. 

7 ‘‘(3) PROTECTION OF DATA.—To the extent pos8 sible, the Secretary shall contract with an insurance 

9 statistical aggregator to collect the information de10 scribed in paragraph (1), which shall keep any non11 public information confidential and provide it to the 

12 Secretary in an aggregate form or in such other form 

13 or manner that does not permit identification of the 

14 insurer submitting such information. 

15 ‘‘(4) ADVANCE COORDINATION.—Before collecting 

16 any data or information under paragraph (1) from 

17 an insurer, or affiliate of an insurer, the Secretary 

18 shall coordinate with the appropriate State insurance 

19 regulatory authorities or their representatives and 

20 any relevant government agency or publicly available 

21 sources to determine if the information to be collected 

22 is available from, and may be obtained in a timely 

23 manner by, individually or collectively, such entities. 

24 If the Secretary determines that such data or infor25 mation is available, and may be obtained in a timely 

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1 matter, from such entities, the Secretary shall obtain 

2 the data or information from such entities. If the Sec3 retary determines that such data or information is 

4 not so available, the Secretary may collect such data 

5 or information from an insurer and affiliates. 

6 ‘‘(5) CONFIDENTIALITY.— 

7 ‘‘(A) RETENTION OF PRIVILEGE.—The sub8 mission of any non-publicly available data and 

9 information to the Secretary and the sharing of 

10 any non-publicly available data with or by the 

11 Secretary among other Federal agencies, the 

12 State insurance regulatory authorities and their 

13 collective agents, or any other entities under this 

14 subsection shall not constitute a waiver of, or 

15 otherwise affect, any privilege arising under 

16 Federal or State law (including the rules of any 

17 Federal or State court) to which the data or in18 formation is otherwise subject. 

19 ‘‘(B) CONTINUED APPLICATION OF PRIOR

20 CONFIDENTIALITY AGREEMENTS.—Any require21 ment under Federal or State law to the extent 

22 otherwise applicable, or any requirement pursu23 ant to a written agreement in effect between the 

24 original source of any non-publicly available 

25 data or information and the source of such data 

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1 or information to the Secretary, regarding the 

2 privacy or confidentiality of any data or infor3 mation in the possession of the source to the Sec4 retary, shall continue to apply to such data or 

5 information after the data or information has 

6 been provided pursuant to this subsection. 

7 ‘‘(C) INFORMATION-SHARING AGREEMENT.— 

8 Any data or information obtained by the Sec9 retary under this subsection may be made avail10 able to State insurance regulatory authorities, 

11 individually or collectively through an informa12 tion-sharing agreement that— 

13 ‘‘(i) shall comply with applicable Fed14 eral law; and 

15 ‘‘(ii) shall not constitute a waiver of, 

16 or otherwise affect, any privilege under Fed17 eral or State law (including any privilege 

18 referred to in subparagraph (A) and the 

19 rules of any Federal or State court) to 

20 which the data or information is otherwise 

21 subject. 

22 ‘‘(D) AGENCY DISCLOSURE REQUIRE23 MENTS.—Section 552 of title 5, United States 

24 Code, including any exceptions thereunder, shall 

25 apply to any data or information submitted 

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1 under this subsection to the Secretary by an in2 surer or affiliate of an insurer.’’. 

3 SEC. 111. DELIVERY OF NOTICES TO POLICYHOLDERS. 

4 Section 103(b)(2) (15 U.S.C. 6701 note) is amended— 

5 (1) in subparagraph (B), by striking ‘‘, pur6 chase,’’; and 

7 (2) in subparagraph (C), by striking ‘‘, pur8 chase,’’. 

9 SEC. 112. DEFINITION OF CONTROL. 

10 Paragraph (3) of section 102 (15 U.S.C. 6701 note) 

11 is amended— 

12 (1) by redesignating subparagraphs (A), (B), 

13 and (C) as clauses (i), (ii), and (iii), respectively and 

14 realigning such clauses, as so redesignated, so as to be 

15 indented six ems from the left margin; 

16 (2) in the matter preceding clause (i) (as so re17 designated), by striking ‘‘An entity has’’ and insert18 ing the following: 

19 ‘‘(A) IN GENERAL.—An entity has’’; and 

20 (3) by adding at the end the following new sub21 paragraph: 

22 ‘‘(B) RULE OF CONSTRUCTION.—An entity, 

23 including any affiliate thereof, does not have 

24 control over another entity if, as of the date of 

25 the enactment of the TRIA Reform Act of 2014, 

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1 the entity is acting as an attorney-in-fact, as de2 fined by the Secretary, for the other entity and 

3 such other entity is a reciprocal insurer, pro4 vided that the entity is not, for reasons other 

5 than the attorney-in-fact relationship, defined as 

6 having control under subparagraph (A).’’. 

7 SEC. 113. ANNUAL STUDY OF SMALL INSURER MARKET 

8 COMPETITIVENESS. 

9 Section 108 (15 U.S.C. 6701 note) is amended by add10 ing at the end the following new subsection: 

11 ‘‘(h) STUDY OF SMALL INSURER MARKET COMPETI12 TIVENESS.— 

13 ‘‘(1) IN GENERAL.—The Secretary shall conduct 

14 an annual study of small insurers participating in 

15 the Program, and identify any competitive challenges 

16 small insurers face in the terrorism risk insurance 

17 marketplace, including— 

18 ‘‘(A) changes to the market share, premium 

19 volume, and policyholder surplus of small insur20 ers relative to large insurers; 

21 ‘‘(B) how the property and casualty insur22 ance market for terrorism risk differs between 

23 small and large insurers, and whether such a 

24 difference exists within other perils; 

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1 ‘‘(C) the impact of the Program’s manda2 tory availability requirement under section 

3 103(c) and the voluntary opt-out for small insur4 ers; 

5 ‘‘(D) the effect of increasing the trigger 

6 amount for the Program under section 

7 103(e)(1)(B)(iii)(I) on small insurers; 

8 ‘‘(E) the availability and cost of private re9 insurance for small insurers; and 

10 ‘‘(F) the impact that State workers com11 pensation laws have on small insurers, particu12 larly the impact of mandatory, non-excludable 

13 participation and unlimited financial liability. 

14 ‘‘(2) TIMING AND REPORT.—The Secretary shall 

15 complete the first study under paragraph (1) and sub16 mit a report to the Congress setting forth the findings 

17 and conclusions of the study not later than June 30, 

18 2016, and shall complete an annual study under 

19 paragraph (1) and submit a report regarding such 

20 study to the Congress by June 1 annually thereafter.’’. 

21 SEC. 114. CBO AND OMB STUDIES REGARDING BUDGETING 

22 FOR COSTS OF FEDERAL INSURANCE PRO23 GRAMS. 

24 Not later than the expiration of the 12-month period 

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1 rector of the Congressional Budget Office and the Director 

2 of the Office of Management and Budget shall each— 

3 (1) conduct a study to determine the feasibility 

4 of applying accrual accounting concepts to budgeting 

5 for the costs of the Terrorism Risk Insurance Program 

6 and for the costs of the other Federal insurance pro7 grams; and 

8 (2) submit a report regarding such study to the 

9 Committees on the Budget of the House of Representa10 tives and the Senate, which shall include a rec11 ommendation specifically addressing the feasibility of 

12 applying fair value concepts to budgeting for the costs 

13 of Federal insurance programs, including the Ter14 rorism Risk Insurance Program. 

15 SEC. 115. GAO STUDY ON UPFRONT PREMIUMS AND CAP16 ITAL RESERVE FUND. 

17 (a) STUDY.—Not later than 2 years after the date of 

18 the enactment of this Act, the Comptroller General of the 

19 United States shall complete a study on the viability of the 

20 Federal Government— 

21 (1) assessing and collecting upfront premiums on 

22 insurers that participate in the Terrorism Risk In23 surance Program established under the Terrorism 

24 Risk Insurance Act of 2002 (15 U.S.C. 6701 note) (in 

25 this section referred to as the ‘‘Program’’), which shall 

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1 include a comparison of practices in international 

2 markets to assess and collect premiums either before 

3 or after terrorism losses are incurred; and 

4 (2) creating a capital reserve fund under the 

5 Program and requiring insurers participating in the 

6 Program to dedicate capital specifically for terrorism 

7 losses before such losses are incurred, which shall in8 clude a comparison of practices in international mar9 kets to establish reserve funds. 

10 (b) REQUIRED CONTENT.—The study required under 

11 subsection (a) shall examine, but shall not be limited to, 

12 the following issues: 

13 (1) UPFRONT PREMIUMS.—With respect to up14 front premiums described in subsection (a)(1)— 

15 (A) how the Federal Government could de16 termine the price of such upfront premiums on 

17 insurers that participate in the Program; 

18 (B) how the Federal Government could col19 lect such upfront premiums; 

20 (C) how the Federal Government could en21 sure that such upfront premiums are not spent 

22 for purposes other than satisfying claims through 

23 the Program; 

24 (D) how the assessment and collection of 

25 such upfront premiums could affect take-up rates 

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1 for terrorism risk coverage in different regions 

2 and industries; 

3 (E) the effect of collecting such upfront pre4 miums on the private market for terrorism risk 

5 reinsurance; and 

6 (F) the size of the Federal Government sub7 sidy insurers currently receive through their par8 ticipation in the Program. 

9 (2) CAPITAL RESERVE FUND.—With respect to 

10 the capital reserve fund described in subsection 

11 (a)(2)— 

12 (A) how the creation of a capital reserve 

13 fund would affect the Federal Government’s fis14 cal exposure under the Terrorism Risk Insurance 

15 Program and the ability of the Program to meet 

16 its statutory purposes; 

17 (B) how a capital reserve fund would im18 pact insurers and reinsurers, including liquid19 ity, insurance pricing, and capacity to provide 

20 terrorism risk coverage; 

21 (C) the feasibility of segregating funds at22 tributable to terrorism risk from funds attrib23 utable to other insurance lines; 

24 (D) how a capital reserve fund would be 

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1 counting Standards Board accounting rules and 

2 the tax laws; and 

3 (E) how a capital reserve fund would affect 

4 the States’ ability to regulate insurers partici5 pating in the Program. 

6 (3) INTERNATIONAL PRACTICES.—With respect to 

7 international markets referred to in paragraphs (1) 

8 and (2) of subsection (A), how other countries, if 

9 any— 

10 (A) have established terrorism insurance 

11 structures; 

12 (B) charge premiums or otherwise collect 

13 funds to pay for the costs of terrorism insurance 

14 structures, including risk and administrative 

15 costs; and 

16 (C) have established capital reserve funds to 

17 pay for the costs of terrorism insurance struc18 tures. 

19 (4) DURATION.—With respect to the capital re20 serve fund described in subsection (a)(2), how the du21 ration of the Program would affect the viability of 

22 such capital reserve fund. 

23 (c) REPORT.—Upon completion of the study required 

24 under subsection (a), the Comptroller General shall submit 

25 a report on the results of such study to the Committee on 

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1 Banking, Housing, and Urban Affairs of the Senate and 

2 the Committee on Financial Services of the House of Rep3 resentatives. 

4 (d) PUBLIC AVAILABILITY.—The study and report re5 quired under this section shall be made available to the pub6 lic in electronic form and shall be published on the website 

7 of the Government Accountability Office. 

8 TITLE II—NATIONAL ASSOCIA9 TION OF REGISTERED 

10 AGENTS AND BROKERS RE11 FORM 

12 SEC. 201. SHORT TITLE. 

13 This title may be cited as the ‘‘National Association 

14 of Registered Agents and Brokers Reform Act of 2014’’. 

15 SEC. 202. REESTABLISHMENT OF THE NATIONAL ASSOCIA16 TION OF REGISTERED AGENTS AND BRO17 KERS. 

18 (a) IN GENERAL.—Subtitle C of title III of the 

19 Gramm-Leach-Bliley Act (15 U.S.C. 6751 et seq.) is amend20 ed to read as follows: 

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1 ‘‘Subtitle C—National Association 

2 of Registered Agents and Brokers 

3 ‘‘SEC. 321. NATIONAL ASSOCIATION OF REGISTERED 

4 AGENTS AND BROKERS. 

5 ‘‘(a) ESTABLISHMENT.—There is established the Na6 tional Association of Registered Agents and Brokers (re7 ferred to in this subtitle as the ‘Association’). 

8 ‘‘(b) STATUS.—The Association shall— 

9 ‘‘(1) be a nonprofit corporation; 

10 ‘‘(2) not be an agent or instrumentality of the 

11 Federal Government; 

12 ‘‘(3) be an independent organization that may 

13 not be merged with or into any other private or pub14 lic entity; and 

15 ‘‘(4) except as otherwise provided in this subtitle, 

16 be subject to, and have all the powers conferred upon, 

17 a nonprofit corporation by the District of Columbia 

18 Nonprofit Corporation Act (D.C. Code, sec. 29–301.01 

19 et seq.) or any successor thereto. 

20 ‘‘SEC. 322. PURPOSE. 

21 ‘‘The purpose of the Association shall be to provide a 

22 mechanism through which licensing, continuing education, 

23 and other nonresident insurance producer qualification re24 quirements and conditions may be adopted and applied on 

25 a multi-state basis without affecting the laws, rules, and 

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1 regulations, and preserving the rights of a State, pertaining 

2 to— 

3 ‘‘(1) licensing, continuing education, and other 

4 qualification requirements of insurance producers 

5 that are not members of the Association; 

6 ‘‘(2) resident or nonresident insurance producer 

7 appointment requirements; 

8 ‘‘(3) supervising and disciplining resident and 

9 nonresident insurance producers; 

10 ‘‘(4) establishing licensing fees for resident and 

11 nonresident insurance producers so that there is no 

12 loss of insurance producer licensing revenue to the 

13 State; and 

14 ‘‘(5) prescribing and enforcing laws and regula15 tions regulating the conduct of resident and non16 resident insurance producers. 

17 ‘‘SEC. 323. MEMBERSHIP. 

18 ‘‘(a) ELIGIBILITY.— 

19 ‘‘(1) IN GENERAL.—Any insurance producer li20 censed in its home State shall, subject to paragraphs 

21 (2) and (4), be eligible to become a member of the As22 sociation. 

23 ‘‘(2) INELIGIBILITY FOR SUSPENSION OR REV24 OCATION OF LICENSE.—Subject to paragraph (3), an 

25 insurance producer is not eligible to become a member 

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1 of the Association if a State insurance regulator has 

2 suspended or revoked the insurance license of the in3 surance producer in that State. 

4 ‘‘(3) RESUMPTION OF ELIGIBILITY.—Paragraph 

5 (2) shall cease to apply to any insurance producer 

6 if— 

7 ‘‘(A) the State insurance regulator reissues 

8 or renews the license of the insurance producer 

9 in the State in which the license was suspended 

10 or revoked, or otherwise terminates or vacates the 

11 suspension or revocation; or 

12 ‘‘(B) the suspension or revocation expires or 

13 is subsequently overturned by a court of com14 petent jurisdiction. 

15 ‘‘(4) CRIMINAL HISTORY RECORD CHECK RE16 QUIRED.— 

17 ‘‘(A) IN GENERAL.—An insurance producer 

18 who is an individual shall not be eligible to be19 come a member of the Association unless the in20 surance producer has undergone a criminal his21 tory record check that complies with regulations 

22 prescribed by the Attorney General of the United 

23 States under subparagraph (K). 

24 ‘‘(B) CRIMINAL HISTORY RECORD CHECK

25 REQUESTED BY HOME STATE.—An insurance 

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1 producer who is licensed in a State and who has 

2 undergone a criminal history record check dur3 ing the 2-year period preceding the date of sub4 mission of an application to become a member of 

5 the Association, in compliance with a require6 ment to undergo such criminal history record 

7 check as a condition for such licensure in the 

8 State, shall be deemed to have undergone a 

9 criminal history record check for purposes of 

10 subparagraph (A). 

11 ‘‘(C) CRIMINAL HISTORY RECORD CHECK

12 REQUESTED BY ASSOCIATION.— 

13 ‘‘(i) IN GENERAL.—The Association 

14 shall, upon request by an insurance pro15 ducer licensed in a State, submit finger16 prints or other identification information 

17 obtained from the insurance producer, and 

18 a request for a criminal history record check 

19 of the insurance producer, to the Federal 

20 Bureau of Investigation. 

21 ‘‘(ii) PROCEDURES.—The board of di22 rectors of the Association (referred to in this 

23 subtitle as the ‘Board’) shall prescribe pro24 cedures for obtaining and utilizing finger25 prints or other identification information 

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1 and criminal history record information, 

2 including the establishment of reasonable 

3 fees to defray the expenses of the Association 

4 in connection with the performance of a 

5 criminal history record check and appro6 priate safeguards for maintaining confiden7 tiality and security of the information. Any 

8 fees charged pursuant to this clause shall be 

9 separate and distinct from those charged by 

10 the Attorney General pursuant to subpara11 graph (I). 

12 ‘‘(D) FORM OF REQUEST.—A submission 

13 under subparagraph (C)(i) shall include such 

14 fingerprints or other identification information 

15 as is required by the Attorney General con16 cerning the person about whom the criminal his17 tory record check is requested, and a statement 

18 signed by the person authorizing the Attorney 

19 General to provide the information to the Asso20 ciation and for the Association to receive the in21 formation. 

22 ‘‘(E) PROVISION OF INFORMATION BY AT23 TORNEY GENERAL.—Upon receiving a submis24 sion under subparagraph (C)(i) from the Asso25 ciation, the Attorney General shall search all 

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1 criminal history records of the Federal Bureau of 

2 Investigation, including records of the Criminal 

3 Justice Information Services Division of the Fed4 eral Bureau of Investigation, that the Attorney 

5 General determines appropriate for criminal his6 tory records corresponding to the fingerprints or 

7 other identification information provided under 

8 subparagraph (D) and provide all criminal his9 tory record information included in the request 

10 to the Association. 

11 ‘‘(F) LIMITATION ON PERMISSIBLE USES OF

12 INFORMATION.—Any information provided to the 

13 Association under subparagraph (E) may only— 

14 ‘‘(i) be used for purposes of deter15 mining compliance with membership cri16 teria established by the Association; 

17 ‘‘(ii) be disclosed to State insurance 

18 regulators, or Federal or State law enforce19 ment agencies, in conformance with appli20 cable law; or 

21 ‘‘(iii) be disclosed, upon request, to the 

22 insurance producer to whom the criminal 

23 history record information relates. 

24 ‘‘(G) PENALTY FOR IMPROPER USE OR DIS25 CLOSURE.—Whoever knowingly uses any informstockstill on DSK4VPTVN1PROD with BILLS

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1 mation provided under subparagraph (E) for a 

2 purpose not authorized in subparagraph (F), or 

3 discloses any such information to anyone not au4 thorized to receive it, shall be fined not more 

5 than $50,000 per violation as determined by a 

6 court of competent jurisdiction. 

7 ‘‘(H) RELIANCE ON INFORMATION.—Neither 

8 the Association nor any of its Board members, 

9 officers, or employees shall be liable in any ac10 tion for using information provided under sub11 paragraph (E) as permitted under subparagraph 

12 (F) in good faith and in reasonable reliance on 

13 its accuracy. 

14 ‘‘(I) FEES.—The Attorney General may 

15 charge a reasonable fee for conducting the search 

16 and providing the information under subpara17 graph (E), and any such fee shall be collected 

18 and remitted by the Association to the Attorney 

19 General. 

20 ‘‘(J) RULE OF CONSTRUCTION.—Nothing in 

21 this paragraph shall be construed as— 

22 ‘‘(i) requiring a State insurance regu23 lator to perform criminal history record 

24 checks under this section; or 

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1 ‘‘(ii) limiting any other authority that 

2 allows access to criminal history records. 

3 ‘‘(K) REGULATIONS.—The Attorney General 

4 shall prescribe regulations to carry out this 

5 paragraph, which shall include— 

6 ‘‘(i) appropriate protections for ensur7 ing the confidentiality of information pro8 vided under subparagraph (E); and 

9 ‘‘(ii) procedures providing a reasonable 

10 opportunity for an insurance producer to 

11 contest the accuracy of information regard12 ing the insurance producer provided under 

13 subparagraph (E). 

14 ‘‘(L) INELIGIBILITY FOR MEMBERSHIP.— 

15 ‘‘(i) IN GENERAL.—The Association 

16 may, under reasonably consistently applied 

17 standards, deny membership to an insur18 ance producer on the basis of criminal his19 tory record information provided under sub20 paragraph (E), or where the insurance pro21 ducer has been subject to disciplinary ac22 tion, as described in paragraph (2). 

23 ‘‘(ii) RIGHTS OF APPLICANTS DENIED

24 MEMBERSHIP.—The Association shall notify 

25 any insurance producer who is denied memmstockstill on DSK4VPTVN1PROD with BILLS

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1 bership on the basis of criminal history 

2 record information provided under subpara3 graph (E) of the right of the insurance pro4 ducer to— 

5 ‘‘(I) obtain a copy of all criminal 

6 history record information provided to 

7 the Association under subparagraph 

8 (E) with respect to the insurance pro9 ducer; and 

10 ‘‘(II) challenge the denial of mem11 bership based on the accuracy and 

12 completeness of the information. 

13 ‘‘(M) DEFINITION.—For purposes of this 

14 paragraph, the term ‘criminal history record 

15 check’ means a national background check of 

16 criminal history records of the Federal Bureau of 

17 Investigation. 

18 ‘‘(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRI19 TERIA.—The Association may establish membership criteria 

20 that bear a reasonable relationship to the purposes for 

21 which the Association was established. 

22 ‘‘(c) ESTABLISHMENT OF CLASSES AND CATEGORIES

23 OF MEMBERSHIP.— 

24 ‘‘(1) CLASSES OF MEMBERSHIP.—The Associa25 tion may establish separate classes of membership, 

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1 with separate criteria, if the Association reasonably 

2 determines that performance of different duties re3 quires different levels of education, training, experi4 ence, or other qualifications. 

5 ‘‘(2) BUSINESS ENTITIES.—The Association shall 

6 establish a class of membership and membership cri7 teria for business entities. A business entity that ap8 plies for membership shall be required to designate an 

9 individual Association member responsible for the 

10 compliance of the business entity with Association 

11 standards and the insurance laws, standards, and 

12 regulations of any State in which the business entity 

13 seeks to do business on the basis of Association mem14 bership. 

15 ‘‘(3) CATEGORIES.— 

16 ‘‘(A) SEPARATE CATEGORIES FOR INSUR17 ANCE PRODUCERS PERMITTED.—The Association 

18 may establish separate categories of membership 

19 for insurance producers and for other persons or 

20 entities within each class, based on the types of 

21 licensing categories that exist under State laws. 

22 ‘‘(B) SEPARATE TREATMENT FOR DEPOSI23 TORY INSTITUTIONS PROHIBITED.—No special 

24 categories of membership, and no distinct mem25 bership criteria, shall be established for members 

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1 that are depository institutions or for employees, 

2 agents, or affiliates of depository institutions. 

3 ‘‘(d) MEMBERSHIP CRITERIA.— 

4 ‘‘(1) IN GENERAL.—The Association may estab5 lish criteria for membership which shall include 

6 standards for personal qualifications, education, 

7 training, and experience. The Association shall not es8 tablish criteria that unfairly limit the ability of a 

9 small insurance producer to become a member of the 

10 Association, including imposing discriminatory mem11 bership fees. 

12 ‘‘(2) QUALIFICATIONS.—In establishing criteria 

13 under paragraph (1), the Association shall not adopt 

14 any qualification less protective to the public than 

15 that contained in the National Association of Insur16 ance Commissioners (referred to in this subtitle as the 

17 ‘NAIC’) Producer Licensing Model Act in effect as of 

18 the date of enactment of the National Association of 

19 Registered Agents and Brokers Reform Act of 2013, 

20 and shall consider the highest levels of insurance pro21 ducer qualifications established under the licensing 

22 laws of the States. 

23 ‘‘(3) ASSISTANCE FROM STATES.— 

24 ‘‘(A) IN GENERAL.—The Association may 

25 request a State to provide assistance in invesmstockstill on DSK4VPTVN1PROD with BILLS

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1 tigating and evaluating the eligibility of a pro2 spective member for membership in the Associa3 tion. 

4 ‘‘(B) AUTHORIZATION OF INFORMATION

5 SHARING.—A submission under subsection 

6 (a)(4)(C)(i) made by an insurance producer li7 censed in a State shall include a statement 

8 signed by the person about whom the assistance 

9 is requested authorizing— 

10 ‘‘(i) the State to share information 

11 with the Association; and 

12 ‘‘(ii) the Association to receive the in13 formation. 

14 ‘‘(C) RULE OF CONSTRUCTION.—Subpara15 graph (A) shall not be construed as requiring or 

16 authorizing any State to adopt new or addi17 tional requirements concerning the licensing or 

18 evaluation of insurance producers. 

19 ‘‘(4) DENIAL OF MEMBERSHIP.—The Association 

20 may, based on reasonably consistently applied stand21 ards, deny membership to any State-licensed insur22 ance producer for failure to meet the membership cri23 teria established by the Association. 

24 ‘‘(e) EFFECT OF MEMBERSHIP.— 

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1 ‘‘(1) AUTHORITY OF ASSOCIATION MEMBERS.— 

2 Membership in the Association shall— 

3 ‘‘(A) authorize an insurance producer to 

4 sell, solicit, or negotiate insurance in any State 

5 for which the member pays the licensing fee set 

6 by the State for any line or lines of insurance 

7 specified in the home State license of the insur8 ance producer, and exercise all such incidental 

9 powers as shall be necessary to carry out such 

10 activities, including claims adjustments and set11 tlement to the extent permissible under the laws 

12 of the State, risk management, employee benefits 

13 advice, retirement planning, and any other in14 surance-related consulting activities; 

15 ‘‘(B) be the equivalent of a nonresident in16 surance producer license for purposes of author17 izing the insurance producer to engage in the ac18 tivities described in subparagraph (A) in any 

19 State where the member pays the licensing fee; 

20 and 

21 ‘‘(C) be the equivalent of a nonresident in22 surance producer license for the purpose of sub23 jecting an insurance producer to all laws, regu24 lations, provisions or other action of any State 

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1 forcement action related to the ability of a mem2 ber to engage in any activity within the scope of 

3 authority granted under this subsection and to 

4 all State laws, regulations, provisions, and ac5 tions preserved under paragraph (5). 

6 ‘‘(2) VIOLENT CRIME CONTROL AND LAW EN7 FORCEMENT ACT OF 1994.—Nothing in this subtitle 

8 shall be construed to alter, modify, or supercede any 

9 requirement established by section 1033 of title 18, 

10 United States Code. 

11 ‘‘(3) AGENT FOR REMITTING FEES.—The Asso12 ciation shall act as an agent for any member for pur13 poses of remitting licensing fees to any State pursu14 ant to paragraph (1). 

15 ‘‘(4) NOTIFICATION OF ACTION.— 

16 ‘‘(A) IN GENERAL.—The Association shall 

17 notify the States (including State insurance reg18 ulators) and the NAIC when an insurance pro19 ducer has satisfied the membership criteria of 

20 this section. The States (including State insur21 ance regulators) shall have 10 business days after 

22 the date of the notification in order to provide 

23 the Association with evidence that the insurance 

24 producer does not satisfy the criteria for mem25 bership in the Association. 

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1 ‘‘(B) ONGOING DISCLOSURES REQUIRED.— 

2 On an ongoing basis, the Association shall dis3 close to the States (including State insurance 

4 regulators) and the NAIC a list of the States in 

5 which each member is authorized to operate. The 

6 Association shall immediately notify the States 

7 (including State insurance regulators) and the 

8 NAIC when a member is newly authorized to op9 erate in one or more States, or is no longer au10 thorized to operate in one or more States on the 

11 basis of Association membership. 

12 ‘‘(5) PRESERVATION OF CONSUMER PROTECTION

13 AND MARKET CONDUCT REGULATION.— 

14 ‘‘(A) IN GENERAL.—No provision of this 

15 section shall be construed as altering or affecting 

16 the applicability or continuing effectiveness of 

17 any law, regulation, provision, or other action of 

18 any State, including those described in subpara19 graph (B), to the extent that the State law, regu20 lation, provision, or other action is not incon21 sistent with the provisions of this subtitle related 

22 to market entry for nonresident insurance pro23 ducers, and then only to the extent of the incon24 sistency. 

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1 ‘‘(B) PRESERVED REGULATIONS.—The laws, 

2 regulations, provisions, or other actions of any 

3 State referred to in subparagraph (A) include 

4 laws, regulations, provisions, or other actions 

5 that— 

6 ‘‘(i) regulate market conduct, insur7 ance producer conduct, or unfair trade 

8 practices; 

9 ‘‘(ii) establish consumer protections; or 

10 ‘‘(iii) require insurance producers to be 

11 appointed by a licensed or authorized in12 surer. 

13 ‘‘(f) BIENNIAL RENEWAL.—Membership in the Asso14 ciation shall be renewed on a biennial basis. 

15 ‘‘(g) CONTINUING EDUCATION.— 

16 ‘‘(1) IN GENERAL.—The Association shall estab17 lish, as a condition of membership, continuing edu18 cation requirements which shall be comparable to the 

19 continuing education requirements under the licens20 ing laws of a majority of the States. 

21 ‘‘(2) STATE CONTINUING EDUCATION REQUIRE22 MENTS.—A member may not be required to satisfy 

23 continuing education requirements imposed under the 

24 laws, regulations, provisions, or actions of any State 

25 other than the home State of the member. 

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1 ‘‘(3) RECIPROCITY.—The Association shall not 

2 require a member to satisfy continuing education re3 quirements that are equivalent to any continuing 

4 education requirements of the home State of the mem5 ber that have been satisfied by the member during the 

6 applicable licensing period. 

7 ‘‘(4) LIMITATION ON THE ASSOCIATION.—The As8 sociation shall not directly or indirectly offer any 

9 continuing education courses for insurance producers. 

10 ‘‘(h) PROBATION, SUSPENSION AND REVOCATION.— 

11 ‘‘(1) DISCIPLINARY ACTION.—The Association 

12 may place an insurance producer that is a member 

13 of the Association on probation or suspend or revoke 

14 the membership of the insurance producer in the Asso15 ciation, or assess monetary fines or penalties, as the 

16 Association determines to be appropriate, if— 

17 ‘‘(A) the insurance producer fails to meet 

18 the applicable membership criteria or other 

19 standards established by the Association; 

20 ‘‘(B) the insurance producer has been sub21 ject to disciplinary action pursuant to a final 

22 adjudicatory proceeding under the jurisdiction of 

23 a State insurance regulator; 

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1 ‘‘(C) an insurance license held by the insur2 ance producer has been suspended or revoked by 

3 a State insurance regulator; or 

4 ‘‘(D) the insurance producer has been con5 victed of a crime that would have resulted in the 

6 denial of membership pursuant to subsection 

7 (a)(4)(L)(i) at the time of application, and the 

8 Association has received a copy of the final dis9 position from a court of competent jurisdiction. 

10 ‘‘(2) VIOLATIONS OF ASSOCIATION STANDARDS.— 

11 The Association shall have the power to investigate al12 leged violations of Association standards. 

13 ‘‘(3) REPORTING.—The Association shall imme14 diately notify the States (including State insurance 

15 regulators) and the NAIC when the membership of an 

16 insurance producer has been placed on probation or 

17 has been suspended, revoked, or otherwise terminated, 

18 or when the Association has assessed monetary fines 

19 or penalties. 

20 ‘‘(i) CONSUMER COMPLAINTS.— 

21 ‘‘(1) IN GENERAL.—The Association shall— 

22 ‘‘(A) refer any complaint against a member 

23 of the Association from a consumer relating to 

24 alleged misconduct or violations of State insur25 ance laws to the State insurance regulator where 

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1 the consumer resides and, when appropriate, to 

2 any additional State insurance regulator, as de3 termined by standards adopted by the Associa4 tion; and 

5 ‘‘(B) make any related records and infor6 mation available to each State insurance regu7 lator to whom the complaint is forwarded. 

8 ‘‘(2) TELEPHONE AND OTHER ACCESS.—The As9 sociation shall maintain a toll-free number for pur10 poses of this subsection and, as practicable, other al11 ternative means of communication with consumers, 

12 such as an Internet webpage. 

13 ‘‘(3) FINAL DISPOSITION OF INVESTIGATION.— 

14 State insurance regulators shall provide the Associa15 tion with information regarding the final disposition 

16 of a complaint referred pursuant to paragraph 

17 (1)(A), but nothing shall be construed to compel a 

18 State to release confidential investigation reports or 

19 other information protected by State law to the Asso20 ciation. 

21 ‘‘(j) INFORMATION SHARING.—The Association may— 

22 ‘‘(1) share documents, materials, or other infor23 mation, including confidential and privileged docu24 ments, with a State, Federal, or international govern25 mental entity or with the NAIC or other appropriate 

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1 entity referred to paragraphs (3) and (4), provided 

2 that the recipient has the authority and agrees to 

3 maintain the confidentiality or privileged status of 

4 the document, material, or other information; 

5 ‘‘(2) limit the sharing of information as required 

6 under this subtitle with the NAIC or any other non7 governmental entity, in circumstances under which 

8 the Association determines that the sharing of such 

9 information is unnecessary to further the purposes of 

10 this subtitle; 

11 ‘‘(3) establish a central clearinghouse, or utilize 

12 the NAIC or another appropriate entity, as deter13 mined by the Association, as a central clearinghouse, 

14 for use by the Association and the States (including 

15 State insurance regulators), through which members 

16 of the Association may disclose their intent to operate 

17 in 1 or more States and pay the licensing fees to the 

18 appropriate States; and 

19 ‘‘(4) establish a database, or utilize the NAIC or 

20 another appropriate entity, as determined by the As21 sociation, as a database, for use by the Association 

22 and the States (including State insurance regulators) 

23 for the collection of regulatory information concerning 

24 the activities of insurance producers. 

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1 ‘‘(k) EFFECTIVE DATE.—The provisions of this section 

2 shall take effect on the later of— 

3 ‘‘(1) the expiration of the 2-year period begin4 ning on the date of enactment of the National Asso5 ciation of Registered Agents and Brokers Reform Act 

6 of 2013; and 

7 ‘‘(2) the date of incorporation of the Association. 

8 ‘‘SEC. 324. BOARD OF DIRECTORS. 

9 ‘‘(a) ESTABLISHMENT.—There is established a board 

10 of directors of the Association, which shall have authority 

11 to govern and supervise all activities of the Association. 

12 ‘‘(b) POWERS.—The Board shall have such of the pow13 ers and authority of the Association as may be specified 

14 in the bylaws of the Association. 

15 ‘‘(c) COMPOSITION.— 

16 ‘‘(1) IN GENERAL.—The Board shall consist of 13 

17 members who shall be appointed by the President, by 

18 and with the advice and consent of the Senate, in ac19 cordance with the procedures established under Senate 

Resolution 116 of the 112 20 th Congress, of whom— 

21 ‘‘(A) 8 shall be State insurance commis22 sioners appointed in the manner provided in 

23 paragraph (2), 1 of whom shall be designated by 

24 the President to serve as the chairperson of the 

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1 surance commissioner Board member to serve as 

2 the chairperson of the Board; 

3 ‘‘(B) 3 shall have demonstrated expertise 

4 and experience with property and casualty in5 surance producer licensing; and 

6 ‘‘(C) 2 shall have demonstrated expertise 

7 and experience with life or health insurance pro8 ducer licensing. 

9 ‘‘(2) STATE INSURANCE REGULATOR REPRESENT10 ATIVES.— 

11 ‘‘(A) RECOMMENDATIONS.—Before making 

12 any appointments pursuant to paragraph 

13 (1)(A), the President shall request a list of rec14 ommended candidates from the States through 

15 the NAIC, which shall not be binding on the 

16 President. If the NAIC fails to submit a list of 

17 recommendations not later than 15 business days 

18 after the date of the request, the President may 

19 make the requisite appointments without consid20 ering the views of the NAIC. 

21 ‘‘(B) POLITICAL AFFILIATION.—Not more 

22 than 4 Board members appointed under para23 graph (1)(A) shall belong to the same political 

24 party. 

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1 ‘‘(C) FORMER STATE INSURANCE COMMIS2 SIONERS.— 

3 ‘‘(i) IN GENERAL.—If, after offering 

4 each currently serving State insurance com5 missioner an appointment to the Board, 

6 fewer than 8 State insurance commissioners 

7 have accepted appointment to the Board, 

8 the President may appoint the remaining 

9 State insurance commissioner Board mem10 bers, as required under paragraph (1)(A), of 

11 the appropriate political party as required 

12 under subparagraph (B), from among indi13 viduals who are former State insurance 

14 commissioners. 

15 ‘‘(ii) LIMITATION.—A former State in16 surance commissioner appointed as de17 scribed in clause (i) may not be employed 

18 by or have any present direct or indirect fi19 nancial interest in any insurer, insurance 

20 producer, or other entity in the insurance 

21 industry, other than direct or indirect own22 ership of, or beneficial interest in, an insur23 ance policy or annuity contract written or 

24 sold by an insurer. 

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1 ‘‘(D) SERVICE THROUGH TERM.—If a 

2 Board member appointed under paragraph 

3 (1)(A) ceases to be a State insurance commis4 sioner during the term of the Board member, the 

5 Board member shall cease to be a Board member. 

6 ‘‘(3) PRIVATE SECTOR REPRESENTATIVES.—In 

7 making any appointment pursuant to subparagraph 

8 (B) or (C) of paragraph (1), the President may seek 

9 recommendations for candidates from groups rep10 resenting the category of individuals described, which 

11 shall not be binding on the President. 

12 ‘‘(4) STATE INSURANCE COMMISSIONER DE13 FINED.—For purposes of this subsection, the term 

14 ‘State insurance commissioner’ means a person who 

15 serves in the position in State government, or on the 

16 board, commission, or other body that is the primary 

17 insurance regulatory authority for the State. 

18 ‘‘(d) TERMS.— 

19 ‘‘(1) IN GENERAL.—Except as provided under 

20 paragraph (2), the term of service for each Board 

21 member shall be 2 years. 

22 ‘‘(2) EXCEPTIONS.— 

23 ‘‘(A) 1-YEAR TERMS.—The term of service 

24 shall be 1 year, as designated by the President 

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1 at the time of the nomination of the subject 

2 Board members for— 

3 ‘‘(i) 4 of the State insurance commis4 sioner Board members initially appointed 

5 under paragraph (1)(A), of whom not more 

6 than 2 shall belong to the same political 

7 party; 

8 ‘‘(ii) 1 of the Board members initially 

9 appointed under paragraph (1)(B); and 

10 ‘‘(iii) 1 of the Board members initially 

11 appointed under paragraph (1)(C). 

12 ‘‘(B) EXPIRATION OF TERM.—A Board 

13 member may continue to serve after the expira14 tion of the term to which the Board member was 

15 appointed for the earlier of 2 years or until a 

16 successor is appointed. 

17 ‘‘(C) MID-TERM APPOINTMENTS.—A Board 

18 member appointed to fill a vacancy occurring be19 fore the expiration of the term for which the 

20 predecessor of the Board member was appointed 

21 shall be appointed only for the remainder of that 

22 term. 

23 ‘‘(3) SUCCESSIVE TERMS.—Board members may 

24 be reappointed to successive terms. 

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1 ‘‘(e) INITIAL APPOINTMENTS.—The appointment of 

2 initial Board members shall be made no later than 90 days 

3 after the date of enactment of the National Association of 

4 Registered Agents and Brokers Reform Act of 2014. 

5 ‘‘(f) MEETINGS.— 

6 ‘‘(1) IN GENERAL.—The Board shall meet— 

7 ‘‘(A) at the call of the chairperson; 

8 ‘‘(B) as requested in writing to the chair9 person by not fewer than 5 Board members; or 

10 ‘‘(C) as otherwise provided by the bylaws of 

11 the Association. 

12 ‘‘(2) QUORUM REQUIRED.—A majority of all 

13 Board members shall constitute a quorum. 

14 ‘‘(3) VOTING.—Decisions of the Board shall re15 quire the approval of a majority of all Board mem16 bers present at a meeting, a quorum being present. 

17 ‘‘(4) INITIAL MEETING.—The Board shall hold 

18 its first meeting not later than 45 days after the date 

19 on which all initial Board members have been ap20 pointed. 

21 ‘‘(g) RESTRICTION ON CONFIDENTIAL INFORMATION.— 

22 Board members appointed pursuant to subparagraphs (B) 

23 and (C) of subsection (c)(1) shall not have access to con24 fidential information received by the Association in connecmstockstill on DSK4VPTVN1PROD with BILLS

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1 tion with complaints, investigations, or disciplinary pro2 ceedings involving insurance producers. 

3 ‘‘(h) ETHICS AND CONFLICTS OF INTEREST.—The 

4 Board shall issue and enforce an ethical conduct code to 

5 address permissible and prohibited activities of Board 

6 members and Association officers, employees, agents, or con7 sultants. The code shall, at a minimum, include provisions 

8 that prohibit any Board member or Association officer, em9 ployee, agent or consultant from— 

10 ‘‘(1) engaging in unethical conduct in the course 

11 of performing Association duties; 

12 ‘‘(2) participating in the making or influencing 

13 the making of any Association decision, the outcome 

14 of which the Board member, officer, employee, agent, 

15 or consultant knows or had reason to know would 

16 have a reasonably foreseeable material financial effect, 

17 distinguishable from its effect on the public generally, 

18 on the person or a member of the immediate family 

19 of the person; 

20 ‘‘(3) accepting any gift from any person or enti21 ty other than the Association that is given because of 

22 the position held by the person in the Association; 

23 ‘‘(4) making political contributions to any per24 son or entity on behalf of the Association; and 

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1 ‘‘(5) lobbying or paying a person to lobby on be2 half of the Association. 

3 ‘‘(i) COMPENSATION.— 

4 ‘‘(1) IN GENERAL.—Except as provided in para5 graph (2), no Board member may receive any com6 pensation from the Association or any other person or 

7 entity on account of Board membership. 

8 ‘‘(2) TRAVEL EXPENSES AND PER DIEM.—Board 

9 members may be reimbursed only by the Association 

10 for travel expenses, including per diem in lieu of sub11 sistence, at rates consistent with rates authorized for 

12 employees of Federal agencies under subchapter I of 

13 chapter 57 of title 5, United States Code, while away 

14 from home or regular places of business in perform15 ance of services for the Association. 

16 ‘‘SEC. 325. BYLAWS, STANDARDS, AND DISCIPLINARY AC17 TIONS. 

18 ‘‘(a) ADOPTION AND AMENDMENT OF BYLAWS AND

19 STANDARDS.— 

20 ‘‘(1) PROCEDURES.—The Association shall adopt 

21 procedures for the adoption of bylaws and standards 

22 that are similar to procedures under subchapter II of 

23 chapter 5 of title 5, United States Code (commonly 

24 known as the ‘Administrative Procedure Act’). 

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1 ‘‘(2) COPY REQUIRED TO BE FILED.—The Board 

2 shall submit to the President, through the Department 

3 of the Treasury, and the States (including State in4 surance regulators), and shall publish on the website 

5 of the Association, all proposed bylaws and standards 

6 of the Association, or any proposed amendment to the 

7 bylaws or standards of the Association, accompanied 

8 by a concise general statement of the basis and pur9 pose of such proposal. 

10 ‘‘(3) EFFECTIVE DATE.—Any proposed bylaw or 

11 standard of the Association, and any proposed 

12 amendment to the bylaws or standards of the Associa13 tion, shall take effect, after notice under paragraph 

14 (2) and opportunity for public comment, on such date 

15 as the Association may designate, unless suspended 

16 under section 329(c). 

17 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in this 

18 section shall be construed to subject the Board or the 

19 Association to the requirements of subchapter II of 

20 chapter 5 of title 5, United States Code (commonly 

21 known as the ‘Administrative Procedure Act’). 

22 ‘‘(b) DISCIPLINARY ACTION BY THE ASSOCIATION.— 

23 ‘‘(1) SPECIFICATION OF CHARGES.—In any pro24 ceeding to determine whether membership shall be de25 nied, suspended, revoked, or not renewed, or to determstockstill on DSK4VPTVN1PROD with BILLS

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1 mine whether a member of the Association should be 

2 placed on probation (referred to in this section as a 

3 ‘disciplinary action’) or whether to assess fines or 

4 monetary penalties, the Association shall bring spe5 cific charges, notify the member of the charges, give 

6 the member an opportunity to defend against the 

7 charges, and keep a record. 

8 ‘‘(2) SUPPORTING STATEMENT.—A determina9 tion to take disciplinary action shall be supported by 

10 a statement setting forth— 

11 ‘‘(A) any act or practice in which the mem12 ber has been found to have been engaged; 

13 ‘‘(B) the specific provision of this subtitle or 

14 standard of the Association that any such act or 

15 practice is deemed to violate; and 

16 ‘‘(C) the sanction imposed and the reason 

17 for the sanction. 

18 ‘‘(3) INELIGIBILITY OF PRIVATE SECTOR REP19 RESENTATIVES.—Board members appointed pursuant 

20 to section 324(c)(3) may not— 

21 ‘‘(A) participate in any disciplinary action 

22 or be counted toward establishing a quorum dur23 ing a disciplinary action; and 

24 ‘‘(B) have access to confidential information 

25 concerning any disciplinary action. 

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1 ‘‘SEC. 326. POWERS. 

2 ‘‘In addition to all the powers conferred upon a non3 profit corporation by the District of Columbia Nonprofit 

4 Corporation Act, the Association shall have the power to— 

5 ‘‘(1) establish and collect such membership fees 

6 as the Association finds necessary to impose to cover 

7 the costs of its operations; 

8 ‘‘(2) adopt, amend, and repeal bylaws, proce9 dures, or standards governing the conduct of Associa10 tion business and performance of its duties; 

11 ‘‘(3) establish procedures for providing notice 

12 and opportunity for comment pursuant to section 

13 325(a); 

14 ‘‘(4) enter into and perform such agreements as 

15 necessary to carry out the duties of the Association; 

16 ‘‘(5) hire employees, professionals, or specialists, 

17 and elect or appoint officers, and to fix their com18 pensation, define their duties and give them appro19 priate authority to carry out the purposes of this sub20 title, and determine their qualification; 

21 ‘‘(6) establish personnel policies of the Associa22 tion and programs relating to, among other things, 

23 conflicts of interest, rates of compensation, where ap24 plicable, and qualifications of personnel; 

25 ‘‘(7) borrow money; and 

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1 ‘‘(8) secure funding for such amounts as the As2 sociation determines to be necessary and appropriate 

3 to organize and begin operations of the Association, 

4 which shall be treated as loans to be repaid by the As5 sociation with interest at market rate. 

6 ‘‘SEC. 327. REPORT BY THE ASSOCIATION. 

7 ‘‘(a) IN GENERAL.—As soon as practicable after the 

8 close of each fiscal year, the Association shall submit to the 

9 President, through the Department of the Treasury, and the 

10 States (including State insurance regulators), and shall 

11 publish on the website of the Association, a written report 

12 regarding the conduct of its business, and the exercise of 

13 the other rights and powers granted by this subtitle, during 

14 such fiscal year. 

15 ‘‘(b) FINANCIAL STATEMENTS.—Each report submitted 

16 under subsection (a) with respect to any fiscal year shall 

17 include audited financial statements setting forth the finan18 cial position of the Association at the end of such fiscal year 

19 and the results of its operations (including the source and 

20 application of its funds) for such fiscal year. 

21 ‘‘SEC. 328. LIABILITY OF THE ASSOCIATION AND THE 

22 BOARD MEMBERS, OFFICERS, AND EMPLOY23 EES OF THE ASSOCIATION. 

24 ‘‘(a) IN GENERAL.—The Association shall not be 

25 deemed to be an insurer or insurance producer within the 

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1 meaning of any State law, rule, regulation, or order regu2 lating or taxing insurers, insurance producers, or other en3 tities engaged in the business of insurance, including provi4 sions imposing premium taxes, regulating insurer solvency 

5 or financial condition, establishing guaranty funds and lev6 ying assessments, or requiring claims settlement practices. 

7 ‘‘(b) LIABILITY OF BOARD MEMBERS, OFFICERS, AND

8 EMPLOYEES.—No Board member, officer, or employee of the 

9 Association shall be personally liable to any person for any 

10 action taken or omitted in good faith in any matter within 

11 the scope of their responsibilities in connection with the As12 sociation. 

13 ‘‘SEC. 329. PRESIDENTIAL OVERSIGHT. 

14 ‘‘(a) REMOVAL OF BOARD.—If the President deter15 mines that the Association is acting in a manner contrary 

16 to the interests of the public or the purposes of this subtitle 

17 or has failed to perform its duties under this subtitle, the 

18 President may remove the entire existing Board for the re19 mainder of the term to which the Board members were ap20 pointed and appoint, in accordance with section 324 and 

21 with the advice and consent of the Senate, in accordance 

22 with the procedures established under Senate Resolution 

116 of the 112 23 th Congress, new Board members to fill the 

24 vacancies on the Board for the remainder of the terms. 

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1 ‘‘(b) REMOVAL OF BOARD MEMBER.—The President 

2 may remove a Board member only for neglect of duty or 

3 malfeasance in office. 

4 ‘‘(c) SUSPENSION OF BYLAWS AND STANDARDS AND

5 PROHIBITION OF ACTIONS.—Following notice to the Board, 

6 the President, or a person designated by the President for 

7 such purpose, may suspend the effectiveness of any bylaw 

8 or standard, or prohibit any action, of the Association that 

9 the President or the designee determines is contrary to the 

10 purposes of this subtitle. 

11 ‘‘SEC. 330. RELATIONSHIP TO STATE LAW. 

12 ‘‘(a) PREEMPTION OF STATE LAWS.—State laws, regu13 lations, provisions, or other actions purporting to regulate 

14 insurance producers shall be preempted to the extent pro15 vided in subsection (b). 

16 ‘‘(b) PROHIBITED ACTIONS.— 

17 ‘‘(1) IN GENERAL.—No State shall— 

18 ‘‘(A) impede the activities of, take any ac19 tion against, or apply any provision of law or 

20 regulation arbitrarily or discriminatorily to, 

21 any insurance producer because that insurance 

22 producer or any affiliate plans to become, has 

23 applied to become, or is a member of the Associa24 tion; 

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1 ‘‘(B) impose any requirement upon a mem2 ber of the Association that it pay fees different 

3 from those required to be paid to that State were 

4 it not a member of the Association; or 

5 ‘‘(C) impose any continuing education re6 quirements on any nonresident insurance pro7 ducer that is a member of the Association. 

8 ‘‘(2) STATES OTHER THAN A HOME STATE.—No 

9 State, other than the home State of a member of the 

10 Association, shall— 

11 ‘‘(A) impose any licensing, personal or cor12 porate qualifications, education, training, expe13 rience, residency, continuing education, or bond14 ing requirement upon a member of the Associa15 tion that is different from the criteria for mem16 bership in the Association or renewal of such 

17 membership; 

18 ‘‘(B) impose any requirement upon a mem19 ber of the Association that it be licensed, reg20 istered, or otherwise qualified to do business or 

21 remain in good standing in the State, including 

22 any requirement that the insurance producer 

23 register as a foreign company with the secretary 

24 of state or equivalent State official; 

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1 ‘‘(C) require that a member of the Associa2 tion submit to a criminal history record check as 

3 a condition of doing business in the State; or 

4 ‘‘(D) impose any licensing, registration, or 

5 appointment requirements upon a member of the 

6 Association, or require a member of the Associa7 tion to be authorized to operate as an insurance 

8 producer, in order to sell, solicit, or negotiate in9 surance for commercial property and casualty 

10 risks to an insured with risks located in more 

11 than one State, if the member is licensed or oth12 erwise authorized to operate in the State where 

13 the insured maintains its principal place of 

14 business and the contract of insurance insures 

15 risks located in that State. 

16 ‘‘(3) PRESERVATION OF STATE DISCIPLINARY AU17 THORITY.—Nothing in this section may be construed 

18 to prohibit a State from investigating and taking ap19 propriate disciplinary action, including suspension 

20 or revocation of authority of an insurance producer 

21 to do business in a State, in accordance with State 

22 law and that is not inconsistent with the provisions 

23 of this section, against a member of the Association 

24 as a result of a complaint or for any alleged activity, 

25 regardless of whether the activity occurred before or 

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1 after the insurance producer commenced doing busi2 ness in the State pursuant to Association member3 ship. 

4 ‘‘SEC. 331. COORDINATION WITH FINANCIAL INDUSTRY 

5 REGULATORY AUTHORITY. 

6 ‘‘The Association shall coordinate with the Financial 

7 Industry Regulatory Authority in order to ease any admin8 istrative burdens that fall on members of the Association 

9 that are subject to regulation by the Financial Industry 

10 Regulatory Authority, consistent with the requirements of 

11 this subtitle and the Federal securities laws. 

12 ‘‘SEC. 332. RIGHT OF ACTION. 

13 ‘‘(a) RIGHT OF ACTION.—Any person aggrieved by a 

14 decision or action of the Association may, after reasonably 

15 exhausting available avenues for resolution within the Asso16 ciation, commence a civil action in an appropriate United 

17 States district court, and obtain all appropriate relief. 

18 ‘‘(b) ASSOCIATION INTERPRETATIONS.—In any action 

19 under subsection (a), the court shall give appropriate 

20 weight to the interpretation of the Association of its bylaws 

21 and standards and this subtitle. 

22 ‘‘SEC. 333. FEDERAL FUNDING PROHIBITED. 

23 ‘‘The Association may not receive, accept, or borrow 

24 any amounts from the Federal Government to pay for, or 

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1 reimburse, the Association for, the costs of establishing or 

2 operating the Association. 

3 ‘‘SEC. 334. DEFINITIONS. 

4 ‘‘For purposes of this subtitle, the following definitions 

5 shall apply: 

6 ‘‘(1) BUSINESS ENTITY.—The term ‘business en7 tity’ means a corporation, association, partnership, 

8 limited liability company, limited liability partner9 ship, or other legal entity. 

10 ‘‘(2) DEPOSITORY INSTITUTION.—The term ‘de11 pository institution’ has the meaning as in section 3 

12 of the Federal Deposit Insurance Act (12 U.S.C. 

13 1813). 

14 ‘‘(3) HOME STATE.—The term ‘home State’ 

15 means the State in which the insurance producer 

16 maintains its principal place of residence or business 

17 and is licensed to act as an insurance producer. 

18 ‘‘(4) INSURANCE.—The term ‘insurance’ means 

19 any product, other than title insurance or bail bonds, 

20 defined or regulated as insurance by the appropriate 

21 State insurance regulatory authority. 

22 ‘‘(5) INSURANCE PRODUCER.—The term ‘insur23 ance producer’ means any insurance agent or broker, 

24 excess or surplus lines broker or agent, insurance con25 sultant, limited insurance representative, and any 

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1 other individual or entity that sells, solicits, or nego2 tiates policies of insurance or offers advice, counsel, 

3 opinions or services related to insurance. 

4 ‘‘(6) INSURER.—The term ‘insurer’ has the 

5 meaning as in section 313(e)(2)(B) of title 31, United 

6 States Code. 

7 ‘‘(7) PRINCIPAL PLACE OF BUSINESS.—The term 

8 ‘principal place of business’ means the State in which 

9 an insurance producer maintains the headquarters of 

10 the insurance producer and, in the case of a business 

11 entity, where high-level officers of the entity direct, 

12 control, and coordinate the business activities of the 

13 business entity. 

14 ‘‘(8) PRINCIPAL PLACE OF RESIDENCE.—The 

15 term ‘principal place of residence’ means the State in 

16 which an insurance producer resides for the greatest 

17 number of days during a calendar year. 

18 ‘‘(9) STATE.—The term ‘State’ includes any 

19 State, the District of Columbia, any territory of the 

20 United States, and Puerto Rico, Guam, American 

21 Samoa, the Trust Territory of the Pacific Islands, the 

22 Virgin Islands, and the Northern Mariana Islands. 

23 ‘‘(10) STATE LAW.— 

24 ‘‘(A) IN GENERAL.—The term ‘State law’ 

25 includes all laws, decisions, rules, regulations, or 

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1 other State action having the effect of law, of 

2 any State. 

3 ‘‘(B) LAWS APPLICABLE IN THE DISTRICT

4 OF COLUMBIA.—A law of the United States ap5 plicable only to or within the District of Colum6 bia shall be treated as a State law rather than 

7 a law of the United States.’’. 

8 (b) TECHNICAL AMENDMENT.—The table of contents 

9 for the Gramm-Leach-Bliley Act is amended by striking the 

10 items relating to subtitle C of title III and inserting the 

11 following new items: 

‘‘Subtitle C—National Association of Registered Agents and Brokers 

‘‘Sec. 321. National Association of Registered Agents and Brokers. 

‘‘Sec. 322. Purpose. 

‘‘Sec. 323. Membership. 

‘‘Sec. 324. Board of directors. 

‘‘Sec. 325. Bylaws, standards, and disciplinary actions. 

‘‘Sec. 326. Powers. 

‘‘Sec. 327. Report by the Association. 

‘‘Sec. 328. Liability of the Association and the Board members, officers, and employees of the Association. 

‘‘Sec. 329. Presidential oversight. 

‘‘Sec. 330. Relationship to State law. 

‘‘Sec. 331. Coordination with financial industry regulatory authority. 

‘‘Sec. 332. Right of action. 

‘‘Sec. 333. Federal funding prohibited. 

‘‘Sec. 334. Definitions.’’. 

mstockstill on DSK4VPTVN1PROD with BILLS

mstockstill on DSK4VPTVN1PROD with BILLS

Union Calendar No. 391 

113TH CONGRESS 

2D SESSION H. R. 4871 

[Report No. 113–523] 

A BILL 

To reauthorize the Terrorism Risk Insurance Act of 

2002, and for other purposes. 

JULY 16, 2014 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 

mstockstill on DSK4VPTVN1PROD with BILLS