I
103D CONGRESS
1ST SESSION
H. R. 2753
To provide for public access to information regarding the availability of
insurance, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 27, 1993
Mr. FOGLIETTA introduced the following bill; which was referred jointly to the
Committees on Banking, Finance and Urban Affairs and Energy and
Commerce
A BILL
To provide for public access to information regarding the
availability of insurance, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Insurance Anti-Redlin-
ing Act of 1993’’.
SEC. 2. FINDINGS AND CONSTRUCTION.
(a) FINDINGS.—The Congress finds that—
(1) there are disparities in property and cas-
ualty insurance coverage provided by some insurers
between areas of different incomes and racial com-
position;
(2) such disparities adversely affect the afford-
ability and availability of insurance for consumers;
(3) the lack of affordable and adequate insur-
ance for qualified consumers severely limits the abil-
ity of such consumers to obtain credit for home,
business, and automobile purchases; and
(4) disclosures of insurance activities of insur-
ers would benefit consumers and insurance regu-
lators without imposing any undue burden on insur-
ers.
(b) CONSTRUCTION.—Nothing in this Act is intended
to, nor shall it be construed to, encourage unsound under-
writing practices.
SEC. 3. MAINTENANCE OF INFORMATION AND PUBLIC DIS-
CLOSURE.
(a) DESIGNATED INSURERS.—Except as provided in
section 4(e), each insurer designated under section
7(a)(2), which sells a line of insurance designated under
section 7(a)(3) in a Metropolitan Statistical Area or Con-
solidated Metropolitan Statistical Area (both hereafter in
this Act referred to as an ‘‘MSA’’) designated by the Di-
rector of the Office of Management and Budget, shall
compile and make available for each calendar year to the
Secretary of Commerce (in accordance with section 6 and
regulations of the Secretary) and to the public for inspec-
tion and copying at the home office or at a central deposi-
tory established under section 5 and at least one branch
office (if there is one) within such MSA—
(1) the number and total coverage amount of
insurance policies by designated line which were is-
sued in such MSA;
(2) the number and total coverage amount of
insurance policies by designated line for which the
insurer received a completed application in such
MSA;
(3) the number and total coverage amount of
insurance policies by designated line for which the
insurer received a completed application and which
were not issued, in such MSA;
(4) the number and total coverage amount of
insurance policies by designated line which were re-
newed in such MSA;
(5) the number and total coverage amount of
insurance policies by designated line for which the
insurer received a completed application for renewal
in such MSA;
(6) the number and total coverage amount of
insurance policies by designated line for which the
insurer received a completed application for renewal
and which were not renewed, in such MSA;
(7) the number and total coverage amount of
insurance policies by designated line which were can-
celed by the insurer, in such MSA;
(8) the number of agents of such insurer whose
principal place of business is located in such MSA
and the number within each census tract or county,
as applicable, in such MSA and with respect to each
such agent, whether such agent is an employee,
independent contractor working exclusively for such
insurer, or an independent contractor appointed to
represent such insurer on a nonexclusive basis;
(9) the number of agents of such insurer whose
principal place of business was located in such MSA
but which was relocated outside such MSA or whose
agency was terminated, and the number of such
agents for each census tract or county, as applicable,
in such MSA; and
(10) the number of agents of such insurer
whose principal place of business was established at
a location in such MSA and the number of such
agents for each census tract or county, as applicable,
in such MSA.
(b) NONDESIGNATED INSURERS.—Except as pro-
vided in section 4(e), each insurer which sells an insurance
policy in a designated line of insurance in an MSA and
which is not a designated insurer in such MSA shall report
for each calendar year to the Secretary (in accordance
with section 6 and regulations of the Secretary) the num-
ber of insurance policies in a designated line sold in such
MSA on an annualized basis which adjusts for varying du-
rations of insurance policies sold—
(1) itemized by census tract for policies sold
within any county with a population of more than
30,000 within the MSA; or
(2) by county for insurance policies sold within
any other county in such MSA.
Such information shall be made available to the public on
a timetable determined by the Secretary but not later than
September 1 of the calendar year following the calendar
year for which the information is required to be reported.
SEC. 4. REQUIREMENTS.
(a) CONTENT.—The information required to be main-
tained and made available under section 3(a) shall—
(1) be itemized in order to clearly and conspicu-
ously disclose the number and coverage amount for
each line of insurance for which information is re-
quired by—
(A) census tracts for insurance policies
within any county with a population of more
than 30,000 within the MSA; or
(B) county for insurance policies within
any other county within such MSA;
(2) disclose for each designated line of insur-
ance in an MSA and, with respect to each such line,
for each census tract or county, as applicable, in the
MSA—
(A) the total number of claims made which
with respect to property insurance shall be
disaggregated by the type and use of the prop-
erty insured, which types and uses shall in-
clude—
(i) properties consisting of 1 to 4
dwelling units;
(ii) properties consisting of more than
4 dwelling units;
(iii) owner-occupied properties;
(iv) rental properties; and
(v) vacant properties; and
(B) the total amount paid in claims which
with respect to property insurance shall be
disaggregated by the type and use of the prop-
erty insured, which types and uses shall include
the types and uses described in clauses (i)
through (v) of subparagraph (A);
(3) disclose the standards and criteria used in
underwriting each designated line of insurance; and
(4) be made available to the public on a time-
table determined by the Secretary but not later than
September 1 of the calendar year following the cal-
endar year for which the information is required to
be made available.
(b) ITEMIZATION OF DATA.—With respect to insur-
ance and applications for which information is required
to be maintained and made available under section 3(a),
the following information shall be maintained and made
available for each policy and each completed application:
(1) The MSA for which such insurance is is-
sued or applied and within such MSA the census
tract or county, as applicable, for which such insur-
ance is issued or requested.
(2) The designated insurer who issued such in-
surance or to whom the application was made.
(3) The date of the issuance of such insurance.
(4) The line of the insurance which is des-
ignated and any subline or class of such insurance.
(5) The type of insurance or policy form for
which applications are made and the types of insur-
ance and policy forms which are issued.
(6) The amount of coverage provided under
such insurance and any applicable deductibles.
(7) The amount of the premiums for such in-
surance.
(8) The durations of such insurance.
(9) The racial characteristics and gender of the
applicants for such insurance.
(10) A notation if such insurance was issued in
a voluntary or residual market.
(11) The date of, and reason for, any declina-
tion, cancellation, or nonrenewal made for such in-
surance.
(12) With respect to property insurance, the
market value of the property insured and the type
and use of property insured.
(c) PERIOD OF MAINTENANCE.—Any information re-
quired to be compiled and made available under section
3 shall be maintained and made available for a period of
5 years after the close of the first year during which such
information is required to be maintained and made avail-
able.
(d) FORMAT FOR DISCLOSURES.—Subject to section
5, the Secretary shall prescribe a standard format for
making information available as required by section 3.
Such format shall encourage the submission of informa-
tion in a form readable by a computer.
(e) EXEMPTIONS.—
(1) SECRETARIAL ACTION.—The Secretary may
by regulation exempt from the requirements of sec-
tion 3 any insurer within any State if the Secretary
determines that under the laws of such State that
such insurer is subject to disclosure requirements on
a census tract basis substantially similar to those of
section 3 and that such law contains adequate provi-
sions for enforcement.
(2) UNITED
STATES
PROGRAM.—Reporting
shall not be required under section 3 with respect to
insurance provided by a program underwritten or
administered by the United States, including the na-
tional flood insurance program under the National
Flood Insurance Act of 1968, the program for insur-
ance against burglary and theft under title XII of
the National Housing Act, and mortgage insurance
under the National Housing Act.
(f) COMPLETED APPLICATION.—For purposes of sec-
tion 3 and this section, the Secretary shall define ‘‘com-
pleted applications’’ to—
(1) ensure that the disclosure required by such
sections appropriately reflects the characteristics of
the applicants interested in purchasing insurance in
an MSA; and
(2) prevent insurers from evading the intent of
such sections through practices designed to discour-
age applicants from completing applications.
SEC. 5. ACCESS SYSTEM.
(a) IN GENERAL.—The Secretary shall implement a
system to facilitate access to information required to be
maintained and made available under section 3. Such sys-
tem shall also include arrangements for a publicly acces-
sible central depository of information in each MSA, as
provided under subsection (b), and for a telephone number
which can be used by the public, at cost, to request such
information. Written statements containing such informa-
tion shall be made available to the public for inspection
and copying at such central depository of information for
all designated insurers within such MSA. The Secretary
shall make copies of such statements available in forms
readable by widely used personal computers. The Sec-
retary may charge a fee for such information, which may
not exceed the amount, determined by the Secretary, that
is equal to the cost of producing the computer statements.
(b) USE OF HOME MORTGAGE DISCLOSURE ACT DE-
POSITORIES.—To the extent practicable, the central de-
positories referred to in subsection (a) shall be the central
depositories established under section 304(f) of the Home
Mortgage Disclosure Act of 1975. The Federal Financial
Institutions Examination Council shall consult with the
Secretary regarding the use of such depositories and shall
provide for the use of such depositories to the extent
agreed to by such Council and the Secretary.
SEC. 6. SUBMISSION TO SECRETARY.
The information referred to in section 3 shall be sub-
mitted to the Secretary. The Secretary shall develop regu-
lations prescribing—
(1) the format for making such information
available;
(2) the method for submission of such informa-
tion; and
(3) the procedures for making the information
available to the public.
Any reporting insurer may submit in writing to the Sec-
retary such additional data or explanations as it deems
relevant to the decision by such insurer to sell insurance.
SEC. 7. DESIGNATIONS.
(a) DESIGNATIONS BY THE SECRETARY.—
(1) DESIGNATIONS OF MSA’S.—The Secretary
shall, on an annual basis, designate the MSA’s for
which reporting is required under section 3. At a
minimum, the Secretary shall designate the 150
MSA’s having the largest population. The Secretary
may designate additional MSA’s on the basis of such
criteria as the Secretary may by rule develop. Such
a rule shall be issued in accordance with section 553
of title 5, United States Code.
(2) DESIGNATION
OF
INSURERS.—For each
MSA designated under paragraph (1), the Secretary
shall take the following actions:
(A) The Secretary shall annually designate
the insurers transacting insurance business in
such MSA for which reporting is required under
section 3. At a minimum, the Secretary shall
annually designate the 25 insurers in such MSA
having the largest premium volume in the
designated lines of insurance.
(B) The Secretary shall also annually des-
ignate any entity providing insurance in a des-
ignated line of insurance as part of a residual
market established by State law.
(C) The Secretary may designate addi-
tional insurers on the basis of such criteria as
the Secretary may by rule develop. Such a rule
shall be issued in accordance with section 553
of title 5, United States Code. In considering
whether to designate additional insurers, the
Secretary shall ensure that—
(i) insurers who specialize in selling
insurance in urban areas, including surplus
lines insurers, are specifically considered
for designation notwithstanding their pre-
mium volume; and
(ii) that insurers representing at least
90 percent of the premium volume in
the designated lines of insurance are
designated in such MSA.
(3) DESIGNATION OF LINES OF INSURANCE.—
For each MSA designated under paragraph (1) the
Secretary shall designate the lines of property and
casualty insurance sold in such MSA for which re-
porting is required under section 3. At a minimum,
the Secretary shall annually designate—
(A) private passenger automobile insurance
(including appropriate sublines and classes);
(B) property insurance which does not
cover commercial property (including appro-
priate sublines and classes and related cov-
erages such as coverage of property contents
and property insured at cash value); and
(C) commercial insurance for small busi-
ness.
The Secretary may designate additional lines of in-
surance on the basis of such criteria as the Sec-
retary may by rule develop. Such a rule shall be
issued in accordance with section 553 of title 5,
United States Code. For purposes of this Act, the
designation of a line of insurance includes a designa-
tion of a subline or class of insurance.
(4) TIMING OF DESIGNATIONS.—The Secretary
shall make the annual designations required by
paragraphs (1), (2), and (3) no later than Septem-
ber 1 of the year preceding the year for which re-
porting is required under section 3. The Secretary
shall notify persons involved in the designations no
later than the October 1 which follows the designa-
tion.
(b) OBTAINING INFORMATION.—The Secretary may
obtain from insurers such information as the Secretary
may require to make designations under subsection (a).
SEC. 8. DISCLOSURES TO REJECTED APPLICANTS.
(a) IN GENERAL.—Except as provided in subsection
(e), the Secretary shall, by regulations issued under sec-
tion 553 of title 5, United States Code—
(1) require insurers to provide to each applicant
for insurance in a designated line—
(A) reasons for denying an application for
such insurance or for canceling or not renewing
a policy in force; and
(B) actions the applicant may take to qual-
ify for such insurance; and
(2) restrict the use insurers may make of infor-
mation relating to—
(A) adverse underwriting decisions; or
(B) insurance coverage in a residual mar-
ket.
(b) MODEL ACTS.—In issuing regulations under sub-
section (a), the Secretary shall consider relevant portions
of model acts developed by the National Association of In-
surance Commissioners.
(c) ENFORCEMENT.—The Secretary may delegate to
the States the authority to enforce the requirements of
regulations issued under subsection (a).
(d) PREEMPTION.—Subsection (a) is not to be con-
strued to preempt any State from imposing on insurers
requirements of the type stated in such subsection, includ-
ing requirements which are more stringent or more com-
prehensive.
(e) EXEMPTION.—A regulation issued under sub-
section (a) may not apply to insurance provided under a
program underwritten or administered by the United
States, including the national flood insurance program
under the National Flood Insurance Act of 1968, the pro-
gram for insurance against burglary and theft under title
XII of the National Housing Act, and mortgage insurance
under the National Housing Act.
(f) 
DEFINITION.—For 
purposes 
of 
subsection
(a)(2)(A), an adverse underwriting decision means any of
the following actions with respect to insurance trans-
actions involving insurance coverage which is individually
underwritten:
(1) A declination of insurance coverage.
(2) A termination of insurance coverage.
(3) Failure of an agent to apply for insurance
coverage with a specific insurance entity which the
agent represents and which is requested by the ap-
plicant.
(4) In the case of property or casualty insur-
ance coverage—
(A) placement by an insurance entity or
agent of a risk with a residual market mecha-
nism, an unauthorized insurer, or an insurance
entity which specializes in substandard risks; or
(B) the charging of higher rates on the
basis of information which differs from that
which the applicant or policyholder furnished.
SEC. 9. TERMINATION OF AGENTS.
(a) REGULATIONS.—Except as provided in subsection
(d), the Secretary shall, by regulation issued under section
553 of title 5, United States Code, ensure that the prac-
tices of insurers in terminating agents who handle private
mortgage insurance or property or casualty insurance do
not result in an inappropriate effect on the availability or
affordability of insurance from such insurers. Such regula-
tions shall specifically ensure that such practices do not
result in unfair discrimination against agents as a result
of their geographic locations or of the geographic locations
of their clients. Regulations under this subsection shall be
stated in terms of minimum standards.
(b) PREEMPTION.—Subsection (a) may not be con-
strued to preempt any State from imposing on insurers
requirements of the type stated in such subsection, includ-
ing requirements which are more stringent or more com-
prehensive.
(c) ENFORCEMENT.—The Secretary may delegate to
the States the enforcement of such regulations.
(d) EXEMPTION.—A regulation issued under sub-
section (a) may not apply to insurance provided under a
program underwritten or administered by the United
States, including the national flood insurance program
under the National Flood Insurance Act of 1968, the pro-
gram for insurance against burglary and theft under title
XII of the National Housing Act, and mortgage insurance
under the National Housing Act.
SEC. 10. IMPLEMENTATION.
(a) IN GENERAL.—The Secretary shall prescribe
such regulations as may be necessary to carry out sections
3 through 6. Such regulations may contain such classifica-
tions, differentiations, or other provisions, and may pro-
vide for such adjustments and exceptions for any class of
transactions, as in the judgment of the Secretary are nec-
essary and proper to effectuate the purposes of such sec-
tion and to prevent circumvention or evasion thereof or
to facilitate compliance therewith.
(b) BURDENS.—In prescribing regulations under sub-
section (a), the Secretary shall take into consideration the
administrative, paperwork, and other burdens on insur-
ance agents, including independent insurance agents, in-
volved in complying with the requirements of sections 3
through 6 and shall minimize the burdens imposed by such
requirements with respect to such agents.