I
103D CONGRESS
1ST SESSION
H. R. 1257
To reconstitute the Federal Insurance Administration as an independent
agency within the executive branch, provide for minimum standards appli-
cable to foreign insurers and reinsurers providing insurance in the United
States, make liquidity assistance available to well-capitalized insurance
companies, and provide for public access to information regarding the
availability of insurance, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 9, 1993
Mr. KENNEDY (for himself and Mr. GONZALEZ) introduced the following bill;
which was referred to the Committee on Banking, Finance and Urban Affairs
A BILL
To reconstitute the Federal Insurance Administration as an
independent agency within the executive branch, provide
for minimum standards applicable to foreign insurers
and reinsurers providing insurance in the United States,
make liquidity assistance available to well-capitalized in-
surance companies, and provide for public access to in-
formation 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 AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Federal Insurance Administration Act’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
TITLE I—FEDERAL INSURANCE ADMINISTRATION
Sec. 101. Reestablishment of Federal Insurance Administration as independent
establishment in executive branch.
Sec. 102. Administrator.
Sec. 103. Transfer of functions.
Sec. 104. Personnel.
Sec. 105. Property and records.
Sec. 106. Administrative provisions.
Sec. 107. Continuation of service of Administrator.
Sec. 108. Report.
Sec. 109. References.
Sec. 110. Savings provisions.
Sec. 111. Definitions.
Sec. 112. Conforming amendments.
Sec. 113. Effective date.
TITLE II—REGULATION OF FOREIGN INSURERS
Sec. 201. Purpose.
Sec. 202. Certification of direct insurers.
Sec. 203. Standards for certification of direct insurers.
Sec. 204. Certification of reinsurers.
Sec. 205. Standards for certification of reinsurers.
Sec. 206. Financial statements and examinations.
Sec. 207. Decertification.
Sec. 208. GAO audits.
Sec. 209. National insurance intelligence database.
Sec. 210. Penalties.
Sec. 211. Definitions.
Sec. 212. Limitation on preemption.
Sec. 213. Effective date.
TITLE III—LIQUIDITY ASSISTANCE BY FEDERAL RESERVE
BANKS TO WELL-CAPITALIZED INSURANCE COMPANIES
Sec. 301. Short title.
Sec. 302. Certification of eligibility for liquidity assistance.
Sec. 303. Requests for liquidity assistance.
Sec. 304. Report.
Sec. 305. Provision of liquidity assistance to insurance companies by Federal
Reserve banks.
Sec. 306. Regulations.
TITLE IV—DISCLOSURE OF INSURANCE AVAILABILITY
INFORMATION
Sec. 401. Short title.
Sec. 402. Findings and construction.
Sec. 403. Maintenance of information and public disclosure.
Sec. 404. Requirements.
Sec. 405. Access system.
Sec. 406. Submission to Administrator.
Sec. 407. Designations.
Sec. 408. Disclosures to rejected applicants.
Sec. 409. Termination of agents.
Sec. 410. Implementation.
Sec. 411. Improved methods.
Sec. 412. Compilation of aggregate data.
Sec. 413. Testers.
Sec. 414. Report.
Sec. 415. Enforcement.
Sec. 416. Relation to State laws.
Sec. 417. Definitions.
Sec. 418. Effective date.
TITLE I—FEDERAL INSURANCE
ADMINISTRATION
SEC. 101. REESTABLISHMENT OF FEDERAL INSURANCE AD-
MINISTRATION AS INDEPENDENT ESTABLISH-
MENT IN EXECUTIVE BRANCH.
The Federal Insurance Administration of the Federal
Emergency Management Agency is hereby established as
an independent establishment in the executive branch of
the Government to be known as the Federal Insurance Ad-
ministration.
SEC. 102. ADMINISTRATOR.
There shall be at the head of the Federal Insurance
Administration a Federal Insurance Administrator, who
shall be appointed by the President, by and with the advice
and consent of the Senate. The Administration shall be
administered under the supervision and direction of the
Administrator.
SEC. 103. TRANSFER OF FUNCTIONS.
(a) IN GENERAL.—There are transferred to the Ad-
ministrator all functions of—
(1) the Director of the Federal Emergency
Management Agency under—
(A) the Flood Disaster Protection Act of
1973 (42 U.S.C. 4001 et seq.);
(B) the National Flood Insurance Act of
1968 (42 U.S.C. 4011 et seq.), including bor-
rowing under section 1309 of such Act pursu-
ant to the authority under section 15(e) of the
Federal Flood Insurance Act of 1956 (42
U.S.C. 2414(e));
(C) title XII of the National Housing Act
(12 U.S.C. 1749bbb et seq.);
(D) the Coastal Barrier Resources Act (16
U.S.C. 3501 et seq.); and
(E) section 2(d) of Executive Order 11988
(42 U.S.C. 4321 note; relating to floodplain
management); and
(2) the Federal Insurance Administrator and
Federal Insurance Administration, of the Federal
Emergency Management Agency.
(b) EFFECT OF TRANSFERS.—The transfer of each
function from an officer or office under subsection (a)
shall include any aspects of such function vested in a sub-
ordinate of such officer or in a component of such office.
SEC. 104. PERSONNEL.
(a) APPOINTMENT.—The Administrator may select,
appoint, employ, and fix the compensation of any officers
and employees necessary to carry out the functions of the
Administrator.
(b) TRANSFER.—
(1) IN GENERAL.—The personnel employed in
connection with the functions and office transferred
by this title are hereby transferred to the Adminis-
trator.
(2) EFFECT.—Any full-time or part-time per-
sonnel employed in permanent positions shall not be
separated or reduced in grade or compensation be-
cause of the transfer under this subsection during
the 1-year period beginning upon the date of the ef-
fectiveness of this title.
(c) TREATMENT OF REQUIREMENTS UNDER TITLE
5, UNITED STATES CODE.—
(1) APPOINTMENTS ABOVE GS–15.—The Direc-
tor of the Office of Personnel Management shall,
under section 5108 of title 5, United States Code,
provide for the establishment, upon the transfer of
personnel by this section, in each of the grade levels
above GS–15 of a number of positions in the Admin-
istration equal to the number of positions in such
grade level that were filled by personnel transferred
by this section.
(2) INAPPLICABILITY
OF
APPROVAL
PROVI-
SION.—Personnel referred to in paragraph (1) may
be appointed to positions established under such
paragraph without regard to the provisions of sec-
tion 3324 of title 5, United States Code, if the indi-
vidual appointed in such position is an individual
who is transferred by this section and, on the day
preceding the date of the effectiveness of this title,
holds a position and has duties comparable to those
of the position to which appointed hereunder.
(3) TERMINATION
OF
AUTHORITY.—The au-
thority under this subsection with respect to any po-
sition shall terminate when the person first ap-
pointed to fill such position ceases to hold such posi-
tion.
SEC. 105. PROPERTY AND RECORDS.
The contracts, liabilities, records, property, and other
assets and interests of, or made available in connection
with, the functions and office transferred by this title are
hereby transferred to the Administrator for appropriate
allocation.
SEC. 106. ADMINISTRATIVE PROVISIONS.
The Administrator may—
(1) issue any regulations the Administrator con-
siders necessary to carry out the functions of the
Administrator;
(2) organize the Administration as the Adminis-
trator determines necessary or appropriate, subject
to the provisions of this title;
(3) except as otherwise provided by law, dele-
gate any function of the Administrator to the offi-
cers and employees of the Administration as the Ad-
ministrator may designate, and may authorize suc-
cessive redelegations of such functions as the Ad-
ministrator considers necessary or appropriate; ex-
cept that the delegation of functions under this
paragraph shall not relieve the Administrator of re-
sponsibility for the administration of such functions;
(4) procure the services of experts and consult-
ants in accordance with section 3109 of title 5,
United States Code;
(5) accept and use gifts, bequests, and dona-
tions of property;
(6) use the United States mails in the same
manner and under the same conditions as other de-
partments and agencies of the United States;
(7) subject to the provisions of the Federal
Property and Administrative Services Act of 1949,
make, enter into, and perform such contracts,
grants, leases, cooperative agreements, or other simi-
lar transactions and make such payments as the Ad-
ministrator determines necessary or appropriate to
carry out the functions of the Administrator; except
that the authority to enter into contracts and to
make payments shall be effective only to such extent
or in such amounts as are provided in appropriation
Acts; and
(8) cause a seal of office to be made for the Ad-
ministration of such design as the Administrator
shall approve, and judicial notice shall be taken of
the seal.
SEC. 107. CONTINUATION OF SERVICE OF ADMINISTRATOR.
The individual serving as the Federal Insurance Ad-
ministrator of the Federal Emergency Management Agen-
cy on the date of the effectiveness of this title may act
as Administrator until the date an individual is appointed
under this Act to the position of Administrator, or until
the end of the 120-day period provided for in section 3348
of title 5, United States Code (relating to limitations on
the period of time a vacancy may be filled temporarily),
whichever is earlier, and while so acting shall be com-
pensated at the rate provided for the Administrator.
SEC. 108. REPORT.
Not later than 3 months after the conclusion of each
fiscal year, the Administrator shall submit to the Commit-
tee on Banking, Finance and Urban Affairs of the House
of Representatives and the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate, a report regarding
the activities of the Administration during the fiscal year.
The report shall include a statement of the goals, prior-
ities, and plans for the Administration, an assessment of
the progress made toward attainment of such goals, prior-
ities, and plans, and a financial statement of the Adminis-
tration describing the operations of the Administration
and the financial operating plans and forecasts for the Ad-
ministration for the ensuing year.
SEC. 109. REFERENCES.
Any reference in any other Federal law, Executive
order, rule, regulation, or delegation of authority, or any
document of or pertaining to the Federal Emergency Man-
agement Agency—
(1) to the Federal Insurance Administrator of
the Federal Emergency Management Agency is
deemed to refer to the Federal Insurance Adminis-
trator of the Federal Insurance Administration es-
tablished under this title; and
(2) to the Federal Insurance Administration
under the Federal Emergency Management Agency
is deemed to refer to the Federal Insurance Admin-
istration established under this title.
SEC. 110. SAVINGS PROVISIONS.
(a) LEGAL DOCUMENTS.—All orders, determinations,
rules, regulations, permits, grants, contracts, certificates,
licenses, and privileges—
(1) that have been issued, made, granted, or al-
lowed to become effective by the President, by the
Director of the Federal Emergency Management
Agency, by the Federal Insurance Administrator of
the Federal Emergency Management Agency, or by
a court of competent jurisdiction, in the performance
of functions of the Director under the provisions re-
ferred to in section 103(a) or the Federal Insurance
Administrator of the Federal Emergency Manage-
ment Agency, and
(2) that are in effect on the date of the effec-
tiveness of this title (or become effective after such
date pursuant to their terms as in effect on such
date),
shall continue in effect according to their terms until
modified, terminated, superseded, set aside, or revoked in
accordance with law by the President, the Administrator
or other authorized official, by a court of competent juris-
diction, or by operation of law.
(b) PROCEEDINGS.—The provisions of this title shall
not affect any proceedings or any application for any bene-
fits, service, license, permit, certificate, or financial assist-
ance pending before the Federal Emergency Management
Agency on the date of the effectiveness of this title, but
such proceedings and applications shall be continued. Or-
ders shall be issued in such proceedings, appeals shall be
taken therefrom, and payments shall be made pursuant
to such orders, as if this Act had not been enacted, and
orders issued in any such proceeding shall continue in ef-
fect until modified, terminated, superseded, or revoked by
a duly authorized official, by a court of competent jurisdic-
tion, or by operation of law. Nothing in this subsection
shall be deemed to prohibit the discontinuance or modi-
fication of any such proceeding under the same terms and
conditions and to the same extent that such proceeding
could have been discontinued or modified if this title had
not been enacted.
(c) SUITS.—The provisions of this title shall not af-
fect suits commenced before the date of the effectiveness
of this title, and in all such suits, proceeding shall be had,
appeals taken, and judgments rendered in the same man-
ner and with the same effect as if this title had not been
enacted.
(d) NONABATEMENT OF ACTIONS.—No suit, action,
or other proceeding commenced by or against the Director
of the Federal Emergency Management Agency or the
Federal Insurance Administration of such Agency, or by
or against any individual in the official capacity of such
individual as an officer of such Agency or Administration,
shall abate by reason of the enactment of this title.
(e) CONTINUANCE OF SUITS.—If, before the date of
the effectiveness of this Act, any agency or officer thereof
in the official capacity of such officer, is party to a suit,
and under this title any function of such agency or officer
is transferred to the Administrator or any other official
of the Administration, then such suit shall be continued
with the Administrator or other appropriate official of the
Administration substituted or added as a party.
SEC. 111. DEFINITIONS.
For purposes of this Act:
(1) The term ‘‘Administration’’ means the Fed-
eral Insurance Administration, as established under
section 101.
(2) The term ‘‘Administrator’’ means the Fed-
eral Insurance Administrator, as such position is es-
tablished under section 102.
(3) The term ‘‘function’’ includes any duty, ob-
ligation, power, authority, responsibility, right, privi-
lege, activity, or program.
SEC. 112. CONFORMING AMENDMENTS.
(a) FLOOD DISASTER PROTECTION ACT OF 1973.—
The Flood Disaster Protection Act of 1973 (42 U.S.C.
4001 et seq.) is amended—
(1) in section 3(a), by striking paragraph (6)
and inserting the following new paragraph:
‘‘(6) ‘Administrator’ means the Federal Insur-
ance Administrator.’’;
(2) in section 201(b), by striking ‘‘Director’s’’
and inserting ‘‘Administrator’s’’; and
(3) by striking ‘‘Director’’ each place it appears
and inserting ‘‘Administrator’’.
(b) NATIONAL FLOOD INSURANCE ACT OF 1968.—
The National Flood Insurance Act of 1968 (42 U.S.C.
4011 et seq.) is amended—
(1) in section 1304(a), by striking ‘‘Director of
the Federal Emergency Management Agency’’ and
inserting ‘‘Federal Insurance Administrator’’;
(2) in section 1307(f)—
(A) by striking ‘‘Director of the Federal
Emergency Management Agency’’ each place it
appears and inserting ‘‘Administrator’’; and
(B) by striking ‘‘and the Federal Emer-
gency Management Agency’’ and inserting ‘‘and
the Federal Insurance Administration’’;
(3) in section 1345(c)—
(A) by striking ‘‘Director of the Federal
Emergency Management Agency’’ each place it
appears and inserting ‘‘Administrator’’; and
(B) by striking ‘‘part of the Federal Emer-
gency Management Agency’’ each place it ap-
pears and inserting ‘‘part of the Federal Insur-
ance Administration’’;
(4) in section 1363, by striking ‘‘Director’s’’
each place it appears and inserting ‘‘Administra-
tor’s’’;
(5) in section 1370(a), by striking paragraph
(6) and inserting the following new paragraph:
‘‘(6) the term ‘Administrator’ means the Fed-
eral Insurance Administrator.’’; and
(6) by striking ‘‘Director’’ each place it appears
and inserting ‘‘Administrator’’.
(c) FEDERAL FLOOD INSURANCE ACT OF 1956.—
Section 15(e) of the Federal Flood Insurance Act of 1956
(42 U.S.C. 2414(e)) is amended by striking ‘‘Director of
the Federal Emergency Management Agency’’ each place
it appears and inserting ‘‘Federal Insurance Adminis-
trator’’.
(d) NATIONAL HOUSING ACT.—Title XII of the Na-
tional Housing Act (12 U.S.C. 1749bbb et seq.) is amend-
ed—
(1) in section 1203(a), by striking paragraph
(17) and inserting the following new paragraph:
‘‘(17) ‘Administrator’ means the Federal Insur-
ance Administrator.’’;
(2) in section 1231(c), by striking ‘‘Director’s’’
and inserting ‘‘Administrator’s’’; and
(3) by striking ‘‘Director’’ each place it appears
and inserting ‘‘Administrator’’.
(e) COMPENSATION AT LEVEL IV OF EXECUTIVE
SCHEDULE.—Section 5315 of title 5, United States Code,
is amended by striking ‘‘Federal Insurance Administrator,
Federal Emergency Management Agency.’’ and inserting
the following new item:
‘‘Federal Insurance Administrator, Federal In-
surance Administration.’’.
(f) HOUSING AND URBAN DEVELOPMENT ACT OF
1968.—Section 1105 of the Housing and Urban Develop-
ment Act of 1968 (42 U.S.C. 4129) is amended by strik-
ing subsection (a).
SEC. 113. EFFECTIVE DATE.
(a) IN GENERAL.—Except as provided in subsection
(b), this title shall take effect upon the expiration of the
180-day period beginning on the date of the enactment
of this Act.
(b) APPOINTMENT
OF ADMINISTRATOR.—Notwith-
standing any other provision of law or of this title, the
President may, any time after the date of the enactment
of this Act, appoint an individual to serve as Federal In-
surance Administrator, as such position is established
under section 102. An appointment under this section may
not be construed to affect the position of Federal Insur-
ance Administrator under the Federal Emergency Man-
agement Agency or the authority of such official during
the period under subsection (a).
TITLE II—REGULATION OF
FOREIGN INSURERS
SEC. 201. PURPOSE.
The purposes of this title are—
(1) to establish minimum solvency, registration,
and other business requirements for foreign insurers
who provide insurance to residents of the United
States covering property or risks located in the Unit-
ed States on a direct written basis; and
(2) to establish minimum requirements for rein-
surance ceded to foreign insurers and reinsurers by
insurers formed and licensed within the United
States that may be claimed as an asset or deduction
from liability.
SEC. 202. CERTIFICATION OF DIRECT INSURERS.
(a) REQUIREMENT FOR CONDUCTING BUSINESS.—
Notwithstanding any other State or Federal law, no for-
eign insurer may act as a direct insurer unless the foreign
insurer is certified under this title by the Federal Insur-
ance Administrator as a certified direct insurer and no
person may assist or facilitate the placement of insurance
with a foreign insurer acting as a direct insurer unless
the foreign insurer is so certified.
(b) APPLICATION.—The Administrator shall provide
for foreign insurers to apply, in the form and manner de-
termined by the Administrator, for certification under this
title. The Administrator may establish and charge a rea-
sonable application fee to cover any costs of the applica-
tion procedure and reviewing applications.
(c) CERTIFICATION.—The Administrator may certify
a foreign insurer as a certified direct insurer for purposes
of this title only if the foreign insurer submits an applica-
tion under this section containing the information de-
scribed in section 203 and the Administrator determines
that the foreign insurer complies with the standards estab-
lished under section 203.
SEC. 203. STANDARDS FOR CERTIFICATION OF DIRECT IN-
SURERS.
The Administrator shall establish standards for cer-
tifying, and renewing certification, of foreign insurers as
certified direct insurers, which shall include the following
requirements:
(1) EXAMINATIONS, AUDITS, AND
FINANCIAL
STATEMENTS.—The foreign insurer shall—
(A) maintain any books and records in ac-
cordance with any requirements established by
the Administrator;
(B) provide the Administrator access to
such books and records for purpose of examina-
tions under section 206(b); and
(C) submit to the Administrator financial
information in accordance with section 206(a).
(2) REGULATORY
FEE.—The foreign insurer
shall pay to the Administrator a fee not exceeding
the amount determined by the Administrator that,
together with other such fees, is sufficient to cover
the costs of administering any activities under this
title relating to foreign insurers.
(3) MINIMUM
NET
WORTH.—The foreign in-
surer shall have a net worth in an amount not less
than the amount established by the Administrator.
The net worth of an insurer and the value of any
assets and liabilities of an insurer shall be deter-
mined, for purposes of this paragraph, in accordance
with generally accepted accounting practices and as
provided by the Administrator.
(4) RESERVE.—The foreign insurer shall estab-
lish and maintain a capital reserve with the Admin-
istrator, which shall be in the form determined by
the Administrator and shall meet the following re-
quirements:
(A) AVAILABILITY
OF
PROCEEDS.—The
proceeds of the reserve shall be available only
for the purpose of securing the payment of valid
claims of the United States policyholders of the
insurer and other claimants under such policies.
(B) BALANCE.—Except as provided in sub-
paragraph (C), the reserve shall have a balance,
at all times, of cash, readily marketable securi-
ties, and letters of credit, acceptable in the de-
termination of the Administrator, in an amount
(A) have been actively and continuously
engaged in the business of insurance for a pe-
riod of not less than 3 years ending upon the
submission of an application under section 202;
(B) be a wholly owned subsidiary of an in-
surer and have been actively and continuously
engaged in the business of insurance for a pe-
riod of not less than 3 years ending upon the
submission of an application under section 202;
or
(C) be the continuing corporation resulting
from a merger or consolidation of insurers, at
least one of which has been actively and con-
tinuously engaged in the business of insurance
for a period of not less than 3 years ending
upon the submission of an application under
section 202.
(10) OTHER.—The foreign insurer shall meet
any other requirements as the Administrator may
provide.
SEC. 204. CERTIFICATION OF REINSURERS.
(a) REQUIREMENT FOR CONDUCTING BUSINESS.—
Notwithstanding any other State or Federal law, no in-
surer licensed by any State nor any certified direct insurer
under this title may claim reinsurance from a foreign rein-
surer as an asset or deduction from liability for purposes
of any financial statement (including financial statements
required under this title) unless the foreign reinsurer is
certified under this title by the Administrator as a cer-
tified reinsurer.
(b) APPLICATION.—The Administrator shall provide
for foreign reinsurers to apply, in the form and manner
determined by the Administrator, for certification under
this title. The Administrator may establish and charge a
reasonable application fee to cover any costs of the appli-
cation procedure and reviewing applications.
(c) CERTIFICATION.—The Administrator may certify
a foreign reinsurer as a certified reinsurer for purposes
of this title only if the foreign reinsurer submits an appli-
cation under this section containing any information de-
scribed in section 205 and the Administrator determines
that the foreign reinsurer complies with the standards es-
tablished under section 205.
SEC. 205. STANDARDS FOR CERTIFICATION OF REINSUR-
ERS.
The Administrator shall establish standards for cer-
tifying, and renewing certification, of foreign reinsurers as
certified reinsurers, which shall include the following re-
quirements:
(1) EXAMINATIONS, AUDITS, AND
FINANCIAL
STATEMENTS.—The foreign reinsurer shall—
(A) maintain any books and records in ac-
cordance with any requirements established by
the Administrator;
(B) provide the Administrator access to
such books and records for purpose of examina-
tions under section 206(b); and
(C) submit to the Administrator financial
information in accordance with section 206(a).
(2) REGULATORY FEE.—The foreign reinsurer
shall pay to the Administrator a fee not exceeding
the amount determined by the Administrator that,
together with other such fees, is sufficient to cover
the costs of administering any activities under this
title relating to foreign reinsurers.
(3) MINIMUM NET WORTH.—The foreign rein-
surer shall have a net worth in an amount not less
than the amount established by the Administrator.
The net worth of a reinsurer and the value of any
assets and liabilities of a reinsurer shall be deter-
mined, for purposes of this paragraph, in accordance
with generally accepted accounting practices and as
provided by the Administrator.
(4) TRUST FUND.—The foreign reinsurer shall
establish and maintain a capital reserve with the Ad-
ministrator, which shall be in the form determined
by the Administrator and shall meet the following
requirements:
(A) AVAILABILITY
OF
PROCEEDS.—The
proceeds of the reserve shall be available only
for the purpose of securing the payment of valid
claims of the United States policyholders of the
reinsurer and other claimants under such poli-
cies.
(B) BALANCE.—Except as provided in sub-
paragraph (C), the reserve shall have a balance,
at all times, of cash, readily marketable securi-
ties, and letters of credit, acceptable in the de-
termination of the Administrator, in an amount
not less than the amount equal to the percent-
age of the aggregate amount of the United
States reinsurance obligations of the reinsurer
that is established by the Administrator under
this subparagraph. The Administrator shall es-
tablish such percentage based on the percentage
of reserves necessary to be held to protect the
interests of United States policyholders of the
reinsurer and other claimants under such poli-
cies.
(C) UNSAFE
FINANCIAL
CONDITIONS.—
The Administrator may increase the percentage
under subparagraph (B) for a reinsurer if the
Administrator determines that such reinsurer is
operating in a manner likely to result in an un-
safe or unsound financial condition.
(5) AGENT
FOR
SERVICE
OF
PROCESS.—The
foreign reinsurer shall appoint and maintain an
agent in the United States upon whom process may
be served in any action, suit, or proceeding.
(6) JURISDICTION OF COURTS.—
(A) IN GENERAL.—The foreign reinsurer
shall agree to submit to the jurisdiction of any
court of the United States or of any State, of
competent jurisdiction, to be fully bound by its
decision.
(B) ARBITRATION.—The provisions of sub-
paragraph (A) may not be construed to annul,
alter, or effect any obligation of the parties to
a reinsurance agreement to arbitrate or other-
wise resolve their disputes that is established by
such an agreement; except that the title to or
the right to be paid out of any trust fund estab-
(10) OTHER.—The foreign reinsurer shall meet
any other requirements as the Administrator may
provide.
SEC. 206. FINANCIAL STATEMENTS AND EXAMINATIONS.
(a) FINANCIAL STATEMENTS.—
(1) IN GENERAL.—The Administrator shall es-
tablish standards under this subsection requiring
foreign insurers and foreign reinsurers to submit fi-
nancial statements to the Administrator.
(2) GAAP PRINCIPLES.—The standards shall
require that each financial statement comply with
generally accepted accounting principles and be de-
veloped in accordance with such principles.
(3) 
INDEPENDENT
AUDIT.—Each 
financial
statement shall include an audit conducted by a
independent certified public accountant or other
qualified independent auditor in accordance with
generally accepted accounting principles.
(4) TIMING.—The Administrator shall require
submission of a financial statement under this sub-
section by—
(A) each insurer and each reinsurer apply-
ing for certification under section 202 or 204,
as applicable; and
(B) each certified direct insurer and each
certified reinsurer, on an annual basis.
(5) ADDITIONAL INFORMATION.—The Adminis-
trator may at any time require any foreign insurer
or foreign reinsurer to submit to the Administrator,
in addition to the information contained in a finan-
cial statement under this subsection, financial infor-
mation that the Administrator considers reasonable
and necessary to determine the financial condition of
the insurer or reinsurer.
(b) EXAMINATIONS.—
(1) IN GENERAL.—The Administrator shall es-
tablish standards under this subsection for examina-
tions of foreign insurers and foreign reinsurers to
determine their financial condition.
(2) TIMING.—The Administrator—
(A) shall conduct an examination under
this subsection of each insurer and each rein-
surer applying for certification under section
202 or 204; and
(B) may conduct an examination of an in-
surer or a reinsurer at any time the Director
considers an examination reasonable and nec-
essary to determine the financial condition of
the insurer or reinsurer.
(3) EXPENSE.—The Administrator shall assess
any costs of an examination under this section
against the foreign insurer or foreign reinsurer ex-
amined and shall collect such amounts.
SEC. 207. DECERTIFICATION.
The Administrator may suspend or revoke the certifi-
cation of certified foreign insurers and reinsurers if the
Administrator determines that such an insurer or a rein-
surer fails to comply with the requirements of this title
and the standards established pursuant to this title. The
Administrator shall establish standards for suspending
and revoking such certifications under this section.
SEC. 208. GAO AUDITS.
The Comptroller General of the United States shall
audit the operations of the Administrator carried out
under this title in accordance with generally accepted Gov-
ernment auditing standards. All books, records, accounts,
reports, files, and property belonging to, or used by, the
Administrator shall be made available to the Comptroller
General. Audits under this section shall be conducted upon
the expiration of the 1-year period beginning upon the
date of the effectiveness of this title and biennially there-
after. Upon the conclusion of each audit under this sec-
tion, the Comptroller General shall submit a report de-
scribing the audit to the Committee on Banking, Finance
and Urban Affairs of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs
of the Senate.
SEC. 
209. 
NATIONAL 
INSURANCE 
INTELLIGENCE
DATABASE.
(a) IN GENERAL.—The Administrator shall collect
information regarding individuals and other persons that
have engaged in, or that the Administrator has reason to
believe to have engaged in, illegal activity relating to insur-
ance or reinsurance activities. The Administrator shall es-
tablish a computer-based database of such information
and shall regularly update the database.
(b) LAW ENFORCEMENT ACCESS.—The Adminis-
trator shall make information from the database under
this section available to appropriate Federal and State law
enforcement and regulatory agencies upon request.
(c) CONFIDENTIALITY.—Except as provided in sub-
section (b), notwithstanding any other law, regulation, or-
dinance, any agreement, any judgment or order of any
court, tribunal, or other officer, or any other legal process,
the Administrator may not disclose any information from
the database under this section.
SEC. 210. PENALTIES.
(a) CIVIL MONEY PENALTY.—Any person or insurer
who knowingly fails to comply with any provision of this
title shall be subject to a civil penalty, imposed by the Ad-
ministrator, in an amount not to exceed $1,000,000.
(b) CRIMINAL OFFENSE.—Whoever knowingly sub-
mits information required under this title to the Adminis-
trator that is false and misleading shall be fined under
title 18, United States Code, or imprisoned not more than
30 years, or both.
SEC. 211. DEFINITIONS.
For purposes of this title:
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Federal In-
surance Administration, as established under section
101.
(2) CERTIFIED
DIRECT
INSURER
AND
CER-
TIFIED REINSURER.—The terms ‘‘certified direct in-
surer’’ and ‘‘certified reinsurer’’ mean a foreign in-
surer certified under section 202 and a foreign rein-
surer certified under section 204, respectively.
(3) CONTROL.—The term ‘‘control’’ means di-
rect or indirect possession of the power to direct or
cause the direction of the management and policies
of a person, including through the ownership of vot-
ing securities, by contract other than a commercial
contract for goods or nonmanagerial services, or oth-
erwise, unless the power is the result of an official
position with or corporate office held by the person.
(4) DIRECT
INSURER.—The term ‘‘direct in-
surer’’ means a foreign insurer that accepts United
States direct risk pursuant to a State surplus or ex-
cess lines law. The term does not include foreign in-
surers accepting United States direct risks by other
lawful means.
(5) FOREIGN INSURER.—The term ‘‘foreign in-
surer’’ means an insurer or reinsurer other than—
(A) an insurer or reinsurer organized
under the laws of any State or Canada; and
(B) the United States branch of a foreign
insurer.
The term includes insurers and reinsurers doing
business as single insurers, groups of individual un-
incorporated underwriters, and groups of incor-
porated insurers under common administration.
(6) FOREIGN REINSURER.—The term ‘‘foreign
reinsurer’’ means a foreign insurer that assumes,
from an insurer or reinsurer licensed by any State,
all or any portion of risks undertaken by the licensed
insurer. The term does not include a foreign insurer
that—
(A) assumes only risks arising out of the
insuring of the company or other person that
owns the insurer or of which the insurer is a
subsidiary or affiliate; and
(B) does not undertake any other business
that is not related to the company or other per-
son that owns the insurer or of which the in-
surer is a subsidiary or affiliate.
(7) LETTER OF CREDIT.—The term ‘‘letter of
credit’’ means a clean irrevocable letter of credit is-
sued or confirmed by a qualified financial institu-
tion, in a form prescribed by the Administrator.
(8) READILY MARKETABLE SECURITIES.—The
term ‘‘readily marketable securities’’ means securi-
ties registered for trading on a national securities
exchange in accordance with section 12 of the Secu-
rities Exchange Act of 1934 and any other securities
approved by the Administrator.
(9) STATE.—The term ‘‘State’’ means the
States of the United States, the District of Colum-
bia, the Commonwealth of Puerto Rico, the Com-
monwealth of the Northern Mariana Islands, Guam,
the Virgin Islands, American Samoa, the Trust Ter-
ritory of the Pacific Islands, and any other territory
or possession of the United States.
(10) UNITED STATES BRANCH OF FOREIGN IN-
SURER.—The term ‘‘United States branch of foreign
Insurer’’ means the business unit through which in-
surance business is transacted within the United
States by a foreign insurer and whose assets and li-
abilities pertaining to such business are within the
United States.
(11) UNITED STATES DIRECT WRITTEN INSUR-
ANCE OBLIGATIONS.—The term ‘‘United States di-
rect written insurance obligations’’ means obliga-
tions of a direct insurer for unearned premium and
unpaid claims, including incurred but not reported
claims.
(12) UNITED
STATES
REINSURANCE
OBLIGA-
TIONS.—The term ‘‘United States reinsurance obli-
gations’’ means obligations to insurers licensed by
any State for reported claims, incurred but not re-
ported claims, unearned premium, losses and loss
adjustment expense, aggregate life reserves, and ag-
gregate reserves for accident and health risks.
SEC. 212. LIMITATION ON PREEMPTION.
This title may not be construed to preempt the law
of any State, except to the extent that such laws are incon-
sistent with the provisions of this title, and then only to
the extent of such inconsistency. The Administrator is au-
thorized to determine whether such inconsistencies exist.
SEC. 213. EFFECTIVE DATE.
The provisions of this title shall take effect upon the
expiration of the 12-month period beginning on the date
of the enactment of this Act.
TITLE 
III—LIQUIDITY 
ASSIST-
ANCE BY FEDERAL RESERVE
BANKS 
TO 
WELL-CAPITAL-
IZED INSURANCE COMPANIES
SEC. 301. SHORT TITLE.
This title may be cited as the ‘‘Insurance Liquidity
and Solvency Act of 1993’’.
SEC. 302. CERTIFICATION OF ELIGIBILITY FOR LIQUIDITY
ASSISTANCE.
(a) IN GENERAL.—The Federal Insurance Adminis-
trator shall establish standards under this section for de-
termining the eligibility of, and certifying, insurance com-
panies for liquidity assistance pursuant to section 13B of
the Federal Reserve Act.
(b) CONTENTS.—The standards under this section
shall—
(1) establish guidelines for the types and man-
ners of organization of companies that may be cer-
tified under this section;
(2) establish minimum financial resource and
solvency requirements for insurance companies that,
in the determination of the Administrator, ensure
that any company complying with such requirements
is sufficiently capitalized for purposes of obtaining
liquidity assistance pursuant to section 13B of the
Federal Reserve Act; and
(3) provide that only insurance companies meet-
ing or exceeding the minimum financial require-
ments established under paragraph (2) may be cer-
tified under this section.
(c) COMPLIANCE REPORTS FROM STATES.—No in-
surance company may be certified under this section as
eligible for liquidity assistance pursuant to section 13B
of the Federal Reserve Act until the Administrator has
reviewed any examinations and enforcement and compli-
ance reports received or requested from any State insur-
ance regulatory authority which has jurisdiction over such
company, or any activities conducted by such company.
(d) EXAMINATIONS AND FINANCIAL STATEMENTS.—
In determining whether insurance companies are eligible
for certification under this section, the Administrator may
require insurance companies to submit financial state-
ments and may conduct examinations of insurance compa-
nies in the same manner required and conducted with re-
spect to foreign insurers and reinsurers under section 206.
(e) PROCEDURES FOR CERTIFICATION OF ELIGIBLE
COMPANIES.—
(1) IN GENERAL.—The Administrator shall es-
tablish procedures for certifying insurance compa-
nies as eligible for liquidity assistance pursuant to
section 13B of the Federal Reserve Act.
(2) AVAILABILITY OF LIST.—The Administrator
shall make publicly available a list of the insurance
companies certified under this section as eligible for
liquidity assistance pursuant to such Act.
(f) FINANCIAL RESOURCE AND SOLVENCY REQUIRE-
MENTS.—Before the end of the 180-day period beginning
on the date of the enactment of this Act, the Adminis-
trator, in consultation with State insurance regulatory au-
thorities, shall establish the minimum financial resource
and solvency requirements for insurance companies under
subsection (b)(2).
(g) DECERTIFICATION.—The Administrator may sus-
pend or revoke the certification of an insurance company
previously certified under this section if the Administrator
determines that the insurance company fails to comply
with the provisions of this section or the requirements es-
tablished under this section. The Administrator shall es-