I 
111TH CONGRESS 
1ST SESSION H. R. 1880 
To establish a system of regulation and supervision for insurers, insurance 
agencies, and insurance producers chartered or licensed under Federal 
law that ensures the stability and financial integrity of those insurers, 
agencies, and producers and that protects policyholders and other con-
sumers served by such insurers, agencies, or producers. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 2, 2009 
Ms. BEAN (for herself and Mr. ROYCE) introduced the following bill; which 
was referred to the Committee on Financial Services, and in addition to 
the Committees on the Judiciary and Energy and Commerce, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To establish a system of regulation and supervision for insur-
ers, insurance agencies, and insurance producers char-
tered or licensed under Federal law that ensures the 
stability and financial integrity of those insurers, agen-
cies, and producers and that protects policyholders and 
other consumers served by such insurers, agencies, or 
producers. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘National Insurance Consumer Protection Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Purposes. 
Sec. 3. Definitions. 
TITLE I—OFFICE OF NATIONAL INSURANCE 
Subtitle A—Establishment of Office and Appointment of National Insurance 
Commissioner 
Sec. 101. Establishment of office and appointment of National Insurance Com-
missioner. 
Sec. 102. Duties and powers of the commissioner. 
Sec. 103. Independence and GAO audit. 
Sec. 104. Office personnel matters. 
Sec. 105. Division of Consumer Affairs. 
Sec. 106. Division of Insurance Fraud. 
Sec. 107. Office of the Ombudsman. 
Sec. 108. Insurance self-regulatory organizations. 
Sec. 109. Relationship to State law. 
Subtitle B—Supervision of National Insurers and National Insurance 
Agencies 
Sec. 111. Prudential supervision. 
Sec. 112. Examinations. 
Sec. 113. Reports. 
Sec. 114. Annual assessments and other fees. 
Sec. 115. Appropriations during start-up period. 
Sec. 116. Disclosure of information. 
Sec. 117. Anti-money laundering compliance. 
Subtitle C—Enforcement Powers of Commissioner 
Sec. 121. Revocation or suspension of charter or license. 
Sec. 122. Other enforcement powers. 
Sec. 123. Insurance fraud. 
Sec. 124. Foreign investigations. 
Sec. 125. Prompt corrective action. 
TITLE II—SYSTEMIC RISK REGULATION, COORDINATING COUNCIL 
FOR FINANCIAL REGULATORS, INTERNATIONAL AGREEMENTS 
Sec. 201. Systemic risk regulation. 
Sec. 202. Coordinating council for financial regulators. 
Sec. 203. International agreements. 
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TITLE III—NATIONAL INSURANCE COMPANIES AND NATIONAL 
INSURANCE AGENCIES 
Subtitle A—Organization, Chartering, and Powers 
Sec. 301. Organization and chartering. 
Sec. 302. Corporate governance. 
Sec. 303. Charter conversions. 
Sec. 304. Powers. 
Sec. 305. Chartering commencement date. 
Subtitle B—Financial, Policy and Market Conduct Standards 
Sec. 311. Financial standards. 
Sec. 312. Policy standards. 
Sec. 313. Market conduct standards. 
Sec. 314. General principles. 
Subtitle C—State Taxation 
Sec. 321. State taxation of national insurers. 
Sec. 322. State taxation of national insurance agencies. 
Sec. 323. State taxation of nonadmitted and surplus lines of insurance. 
TITLE IV—NATIONAL INSURANCE PRODUCERS 
Sec. 401. Licensing of national insurance producers. 
Sec. 402. Supervision and examination. 
Sec. 403. Producer database. 
Sec. 404. Duty to supervise. 
Sec. 405. Relationship to State law. 
Sec. 406. Licensing commencement date. 
TITLE V—CHANGE IN CONTROL AND INSURANCE HOLDING 
COMPANIES 
Sec. 501. Change in control. 
Sec. 502. Reports by and examinations of insurance holding companies. 
Sec. 503. Activities of insurance holding companies and subsidiaries. 
Sec. 504. Capital, liquidity, dividend, operational, and other standards. 
Sec. 505. Affiliate transactions. 
Sec. 506. Relationship to other laws. 
Sec. 507. No delegation permitted. 
TITLE VI—CONSERVATORSHIP, RECEIVERSHIP, THE PAYMENT OF 
BENEFITS AND CLAIMS TO POLICYHOLDERS, AND ASSESS-
MENTS ON NATIONAL INSURERS 
Sec. 601. Appointment of conservator or receiver. 
Sec. 602. Establishment of the National Insurance Guaranty Corporation. 
Sec. 603. Payment of claims to policyholders of national insurers. 
Sec. 604. Assessments of national insurers. 
Sec. 605. Participation in State guaranty associations. 
Sec. 606. Report to Congress. 
TITLE VII—MISCELLANEOUS PROVISIONS 
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Sec. 701. Applicable law. 
Sec. 702. Application of the Federal antitrust laws. 
SEC. 2. PURPOSES. 
The purposes of this Act are— 
(1) to ensure the financial stability and integ-
rity of national insurers, national insurance agen-
cies, and national insurance producers through a 
comprehensive system of national supervision and 
regulation; and 
(2) to ensure the fair and equitable treatment 
of policyholders, claimants, and other consumers 
served by national insurers, national insurance agen-
cies, and national insurance producers. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) AFFILIATE.—The term ‘‘affiliate’’ means 
any person that controls, is controlled by, or is 
under common control with another person. 
(2) ANNUITY.—The term ‘‘annuity’’ means all 
agreements to make periodical payments for a period 
certain or where the making or continuance of all or 
some of a series of such payments, or the amount 
of any such payment, depends upon the continuance 
of human life. 
(3) ANTI-FRAUD
ORGANIZATION.—The term 
‘‘anti-fraud organization’’ means an organization— 
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(A) whose purposes include investigation, 
prevention, and detection of insurance-related 
crime and fraud, including assistance to and co-
operation with State and national public offi-
cials and law enforcement officers in their anti- 
fraud activities; and 
(B) described in section 501(c)(3) of the 
Internal Revenue Code of 1986 and exempt 
from tax under section 501(a) of such Code. 
(4) BUSINESS
OF
INSURANCE.—The term 
‘‘business of insurance’’ has the meaning given such 
term in section 1033(f) of title 18, United States 
Code. 
(5) 
COMMISSIONER.—The 
term 
‘‘Commis-
sioner’’ means the National Insurance Commissioner 
appointed under section 101. 
(6) COMPANY.—The term ‘‘company’’ means 
any corporation, partnership, business trust, associa-
tion, or similar organization. 
(7) CONTROL.—The term ‘‘control’’— 
(A) means the power of a person— 
(i) with an ownership interest in a na-
tional insurer or national insurance agency 
(whether direct or indirect) to direct the 
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management or policies of such national 
insurer or national insurance agency; or 
(ii) to vote 25 percent or more of any 
class of voting securities of a national in-
surer or national insurance agency; and 
(B) does not include a person that pos-
sesses power referred to in subparagraph (A) as 
a result of an official position, corporate office, 
or fiduciary relationship held by such person. 
(8) CORPORATION.—The term ‘‘Corporation’’ 
means the National Insurance Guaranty Corporation 
established under section 601. 
(9) FEDERAL BANKING AGENCIES.—The term 
‘‘Federal banking agencies’’ means the Office of the 
Comptroller of the Currency, the Board of Gov-
ernors of the Federal Reserve System, the Federal 
Deposit Insurance Corporation, and the Office of 
Thrift Supervision. 
(10) INSURANCE OPERATIONS.—The term ‘‘in-
surance operations’’ includes— 
(A) the business of insurance; 
(B) all acts and transactions relating to 
the sale, solicitation, negotiation, and under-
writing of insurance; 
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(C) all acts and transactions relating to 
claims adjustment and settlement; 
(D) all acts and transactions relating to 
the establishment of rates, rules, risk classifica-
tions, rating classifications, rating territories, 
and 
forms 
(including, 
endorsements, 
addendums, and policy language) for insurance; 
(E) all acts and transactions relating to 
marketing and sales practices; 
(F) financial condition and solvency; 
(G) holding company transactions; and 
(H) corporate governance. 
(11) INSURANCE
PRODUCER.—The term ‘‘in-
surance producer’’ means any person that sells, so-
licits, or negotiates policies of insurance, non-
admitted insurance, and surplus lines of insurance, 
but does not include a person that provides adminis-
trative services to an insurer. 
(12) INSURER-AFFILIATED PARTY.—The term 
‘‘insurer-affiliated party’’ means— 
(A) any director, officer, employee, or con-
trolling shareholder of, or agent for, a national 
insurer or a national insurance agency; 
(B) any shareholder, consultant, joint ven-
ture partner, and any other person as deter-
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mined by the Commissioner who participates in 
the conduct of the affairs of a national insurer 
or a national insurance agency; and 
(C) any independent contractor (including 
any attorney, actuary, or accountant) of a na-
tional insurer or a national insurance agency 
who in that capacity knowingly or recklessly 
participates in any violation of any law or regu-
lation, any breach of fiduciary duty, or any con-
duct that involves an undue risk of loss to the 
policyholders of a national insurer, and which 
violation, breach, or conduct caused or is likely 
to cause more than a minimal financial loss to, 
or a significant adverse effect on, a national in-
surer or the policyholders of a national insurer. 
(13) INSURER
IN
FRATERNAL
FORM.—The 
term ‘‘insurer in fraternal form’’ means an incor-
porated society, order, or supreme lodge without 
capital stock that— 
(A) is conducted solely for the benefit of 
its members and their beneficiaries and not for 
profit; 
(B) is operated on a lodge system with rit-
ualistic form of work; 
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(C) has a representative form of govern-
ment; 
(D) provides benefits to members and their 
dependents; and 
(E) operates for one or more social, intel-
lectual, 
educational, 
charitable, 
benevolent, 
moral, fraternal, patriotic, or religious purposes 
for the benefit of its members, which may also 
be extended to others. 
(14) LIFE INSURANCE.—The term ‘‘life insur-
ance’’ means every insurance upon the lives of 
human beings, and every insurance appertaining 
thereto, including disability income insurance, long- 
term care insurance, and supplemental health insur-
ance. 
(15) NAIC.—The term ‘‘NAIC’’ means the Na-
tional Association of Insurance Commissioners. 
(16) NATIONAL
INSURANCE
AGENCY.—The 
term ‘‘national insurance agency’’ means a national 
insurance agency chartered under section 301. 
(17) NATIONAL
INSURANCE
HOLDING
COM-
PANY.—The term ‘‘national insurance holding com-
pany’’ means a company that controls a national in-
surer or national insurance agency. 
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(18) NATIONAL
INSURANCE
PRODUCER.—The 
term ‘‘national insurance producer’’ means a na-
tional insurance agent or broker licensed under sec-
tion 401. 
(19) NATIONAL INSURER.—The term ‘‘national 
insurer’’ means a national insurance company char-
tered under section 301. 
(20) NATIONAL LIFE INSURER.—The term ‘‘na-
tional life insurer’’ means a national insurer that is 
chartered under section 301 to sell, solicit, negotiate, 
and underwrite life insurance. 
(21) NONADMITTED
INSURANCE.—The term 
‘‘nonadmitted insurance’’ means property and cas-
ualty insurance permitted by the Commissioner to be 
placed directly or through an insurance producer 
with a nonadmitted insurer eligible to accept such 
insurance. 
(22) 
NONADMITTED
INSURER.—The 
term 
‘‘nonadmitted insurer’’ means an insurer that is not 
licensed to engage in the business of insurance in a 
State and that— 
(A) satisfies the eligibility requirements of 
the State in which an insured maintains its 
principal place of business, or, in the case of an 
individual, maintains a principal residence; and 
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(B) is not a national insurer. 
(23) OFFICE.—The term ‘‘Office’’ means the 
Office of National Insurance established under sec-
tion 101. 
(24) PERSON.—The term ‘‘person’’ means any 
natural person, business entity, governmental body 
or entity, voluntary organization, or similar organi-
zation. 
(25) POLICY.—The term ‘‘policy’’ means a pol-
icy, contract, certificate, or other evidence of insur-
ance, or an annuity contract or a rider or endorse-
ment thereto, but does not include a funding agree-
ment, a reinsurance contract, or an agreement, spe-
cial rider, or endorsement relating only to the man-
ner of distributing benefits or to the reservation of 
rights and benefits used at the request of the indi-
vidual policyholder. 
(26) PROPERTY AND CASUALTY INSURANCE.— 
The term ‘‘property and casualty insurance’’ means 
a policy that insures, guarantees, or indemnifies 
against liability, loss of life, loss of health, or loss 
through damage to or destruction of property, in-
cluding surety bonds, private passenger or commer-
cial automobile, homeowners, mortgage guaranty, fi-
nancial guaranty, commercial multiperil, general li-
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ability, professional liability, workers’ compensation, 
fire and allied lines, farm or ranch owners, 
multiperil, aircraft, fidelity, surety, medical mal-
practice, ocean marine, inland marine, and boiler 
and machinery insurance. 
(27) PROTECTED CELL.—The term ‘‘protected 
cell’’ means an identified pool of assets and liabil-
ities of a national insurer segregated and insulated 
from the remainder of the national insurer’s assets 
and liabilities. 
(28) STATE.—The term ‘‘State’’ means each of 
the 50 States, the District of Columbia, the Com-
monwealth of Puerto Rico, any territory of the 
United States, Guam, American Samoa, the Trust 
Territory of the Pacific Islands, the United States 
Virgin Islands, and the Commonwealth of the North-
ern Mariana Islands. 
(29) STATE
INSURER.—The term ‘‘State in-
surer’’ means an insurer incorporated in or orga-
nized under the laws of a State that is not chartered 
as a national insurer under this Act. 
(30) SUPPLEMENTAL
HEALTH
INSURANCE.— 
The term ‘‘supplemental health insurance’’ means a 
group or individual policy that provides coverage for 
hospital, medical or surgical benefits and is sold sep-
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arately and not dependent upon comprehensive 
health or medical insurance, including a policy for 
accidents, accidental death and dismemberment, 
credit disability, dread disease, dental, hospital acci-
dent, hospital indemnity, hospital confinement in-
demnity, limited benefit medical, medical/surgical 
policies, Medicare supplement, retiree medical, spe-
cific treatment policies, travel, and vision. 
(31) SURPLUS
LINES
OF
INSURANCE.—The 
term ‘‘surplus lines of insurance’’ means insurance 
on properties, risks, or exposures located or to be 
performed in a State with a nonadmitted insurer 
that is sold, solicited, or negotiated by a national in-
surance agency, national insurance producer, or 
other insurance producer. 
(32) TITLE INSURANCE.—The term ‘‘title in-
surance’’ or ‘‘business of title insurance’’ means any 
of the following: 
(A) A contract insuring or indemnifying 
the owners of real or personal property, or 
other 
persons 
lawfully 
interested 
therein, 
against loss or damage arising from any of the 
following conditions, or the reinsurance thereof: 
(i) Defects in or any liens or encum-
brances on the insured title. 
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(ii) Unmarketability of the insured 
title. 
(iii) Invalidity, lack of priority, or un-
enforceability of any liens or encumbrances 
on the stated property. 
(iv) Lack of legal right of access to 
the land. 
(v) Unenforceability of rights in title 
to the real or personal property. 
(B) Insuring the correctness of searches 
and examinations of all instruments, liens, or 
charges affecting the title to real or personal 
property. 
(C) Procuring and furnishing information 
relative to the title to real or personal property, 
including abstracting, searching, and examining 
titles. 
(D) Handling escrows, settlements, or clos-
ings done in conjunction with subparagraph 
(A), (B), (C), (E), or (F). 
(E) Any product or service defined by the 
laws of any State as title insurance. 
(F) Doing or proposing to do any business 
substantially equivalent to any of the activities 
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described in this paragraph, in a manner de-
signed to evade the provisions of this Act. 
(33) TITLE INSURER.—The term ‘‘title insurer’’ 
means a company organized under the laws of a 
State for the purpose of conducting the business of 
title insurance. 
TITLE I—OFFICE OF NATIONAL 
INSURANCE 
Subtitle A—Establishment of Office 
and Appointment of National In-
surance Commissioner 
SEC. 101. ESTABLISHMENT OF OFFICE AND APPOINTMENT 
OF NATIONAL INSURANCE COMMISSIONER. 
(a) IN GENERAL.—There is established in the De-
partment of the Treasury the Office of National Insur-
ance. 
(b) NATIONAL INSURANCE COMMISSIONER.— 
(1) IN GENERAL.—There is established the po-
sition of the National Insurance Commissioner, who 
shall be the head of the Office. 
(2) APPOINTMENT.—The Commissioner shall be 
appointed by the President, by and with the advice 
and consent of the Senate, from among individuals 
who are citizens of the United States, for a term of 
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5 years, unless removed before the end of such term 
for cause by the President. 
(3) VACANCY.—A vacancy in the position of the 
Commissioner shall be filled in the manner estab-
lished under paragraph (2). The Commissioner ap-
pointed to fill the vacancy shall be appointed only 
for the remainder of the term of the preceding Com-
missioner. 
(4) SERVICE AFTER TERM.—An individual may 
serve as the Commissioner after the expiration of 
the term for which appointed until such time as a 
successor has been appointed in accordance with 
paragraph (2). 
(5) PROHIBITION ON FINANCIAL INTERESTS.— 
The Commissioner may not have a direct or indirect 
financial interest in any national insurer or national 
insurance agency, except that the Commissioner may 
own, directly or indirectly, or may have a direct or 
indirect beneficial interest in an insurance policy 
written or sold by a national insurer, national insur-
ance agency, or national insurance producer. 
(6) GENERAL OVERSIGHT.—The Commissioner 
shall be subject to the general oversight of the Sec-
retary of the Treasury, but the Secretary may not 
intervene in any matter or proceeding before the 
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Commissioner unless otherwise specifically provided 
by law. 
(7) EXECUTIVE SCHEDULE.—Section 5314 of 
title 5, United States Code, is amended by adding 
at the end following new item: 
‘‘National Insurance Commissioner.’’. 
SEC. 102. DUTIES AND POWERS OF THE COMMISSIONER. 
(a) DUTIES.—The Commissioner shall— 
(1) oversee the organization, incorporation, op-
eration, regulation, and supervision of national in-
surers and national insurance agencies and shall 
issue charters therefore; and 
(2) license, regulate, and supervise national in-
surance producers. 
(b) INCIDENTAL POWERS.—The Commissioner may 
exercise such incidental powers as may be necessary to ful-
fill the duties specified in subsection (a). 
(c) RULEMAKING POWERS.—The Commissioner may 
issue such rules, regulations, orders, and interpretations 
as the Commissioner determines to be necessary to carry 
out the purposes of this Act. The Secretary of the Treas-
ury may not delay or prevent the issuance of any rule, 
regulation, order, or interpretation by the Commissioner. 
(d) LITIGATION POWERS.—The Commissioner may 
sue and be sued, complain and defend, and otherwise liti-
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gate, in the Commissioner’s name and through the Com-
missioner’s own attorney, in any Federal or State court. 
(e) ENFORCEMENT
POWERS.—The Commissioner 
may apply to the United States district court for the juris-
diction in which the main office of a national insurer or 
national insurance agency is located, or in which an in-
surer-affiliated party, national insurance producer, or 
other person is located, for the enforcement of any rule, 
regulation, order, or interpretation issued pursuant to this 
Act. 
SEC. 103. INDEPENDENCE AND GAO AUDIT. 
(a) INDEPENDENCE OF CONGRESSIONAL TESTIMONY 
AND RECOMMENDATIONS.—Section 111 of Public Law 
93–495 (12 U.S.C. 250) is amended by inserting ‘‘the Na-
tional Insurance Commissioner,’’ after ‘‘the Director of 
the Office of Thrift Supervision,’’. 
(b) GAO AUDIT.—The Commissioner shall make 
available to the Comptroller General of the United States 
all books and records necessary to audit all of the activities 
of the Office. 
SEC. 104. OFFICE PERSONNEL MATTERS. 
(a) IN GENERAL.—The Commissioner may employ 
such persons as are necessary to carry out the provisions 
of this Act. 
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(b) COMPENSATION.—The Commissioner shall fix the 
compensation and number of employees of the Office with-
out regard to chapter 51 or subchapter III of chapter 53 
of title 5, United States Code. 
(c) ADDITIONAL
COMPENSATION.—The Commis-
sioner may provide additional compensation and benefits 
to employees of the Office if the same type of compensa-
tion or benefits are then being provided by any Federal 
banking agency or, if not then being provided, could be 
provided by any such agency under applicable provisions 
of law or regulation. In setting and adjusting the total 
amount of compensation and benefits for employees of the 
Office, the Commissioner shall consult, and seek to main-
tain comparability with, the Federal banking agencies. 
(d) ACTING
COMMISSIONER.—The Commissioner 
shall designate an employee of the Office to serve as the 
Acting Commissioner during the absence or disability of 
the Commissioner. 
(e) DELEGATION OF POWERS.— 
(1) EMPLOYEES AND OTHERS.—Unless other-
wise prohibited by this Act, the Commissioner may 
delegate to any employee, representative, or agent 
any power of the Commissioner. 
(2) SELF-REGULATORY
ORGANIZATIONS.—Un-
less otherwise prohibited by this Act, the Commis-
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sioner may, by regulation, delegate to any insurance 
self-regulatory organization any power of the Com-
missioner. 
SEC. 105. DIVISION OF CONSUMER AFFAIRS. 
(a) ESTABLISHMENT.—The Commissioner shall es-
tablish a Division of Consumer Affairs within the Office, 
and shall appoint a Director of the Division of Consumer 
Affairs, who shall report to the Commissioner. 
(b) FUNCTION.—The Director of the Division of Con-
sumer Affairs shall— 
(1) act as a liaison between the Office and con-
sumers of insurance; 
(2) receive questions and complaints from con-
sumer regarding acts or practices of national insur-
ers, national insurance agencies, and national insur-
ance producers; and 
(3) take actions to resolve such questions and 
complaints. 
(c) STATE OFFICES; CALL CENTER.—The Commis-
sioner shall establish an office of the Division of Consumer 
Affairs in each State and a centralized call center, toll- 
free telephone number, and Internet address order to re-
ceive and act upon questions and complaints from con-
sumers regarding acts or practices of national insurers, 
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national insurance agencies, and national insurance pro-
ducers. 
(d) REPORTS.—The Commissioner shall annually 
submit to the Committee on Financial Services of the 
House of Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate a report on the 
volume of consumer complaints received by the Division 
of Consumer Affairs and the ability of the Office to ad-
dress such complaints in a timely manner. 
SEC. 106. DIVISION OF INSURANCE FRAUD. 
(a) ESTABLISHMENT.—The Commissioner shall es-
tablish a Division of Insurance Fraud within the Office, 
and shall appoint a Director of the Division of Insurance 
Fraud, who shall report to the Commissioner. 
(b) DUTIES.—The Director of the Division of Insur-
ance Fraud shall carry out investigations of insurance 
fraud in accordance with section 123. 
SEC. 107. OFFICE OF THE OMBUDSMAN. 
(a) OFFICE OF THE OMBUDSMAN.—The Commis-
sioner shall establish an Office of the Ombudsman, and 
appoint an Ombudsman, who shall report to the Commis-
sioner. 
(b) DUTY OF THE OMBUDSMAN.—The Ombudsman 
shall act as a liaison between the Office and any national 
insurer, national insurance agency, national insurance 
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producer, or insurer-affiliated party adversely affected by 
the supervisory or regulatory activities of the Office, in-
cluding the failure of the Office to take a requested action. 
The Ombudsman shall assure that safeguards exist to en-
courage complainants to come forward and preserve con-
fidentiality. 
(c) POWERS OF THE OMBUDSMAN.—The Ombuds-
man— 
(1) with the prior consent of the Commissioner, 
may stay any appealable decision or action during 
the resolution of an appealable matter; and 
(2) shall review and report any weakness in pol-
icy or procedures to the Commissioner, and make 
recommendations to the Commissioner regarding 
changes in such policies or procedures. 
(d) APPEALABLE MATTERS.—Subject to such proce-
dures as the Commissioner may establish by regulation, 
any national insurer, national insurance agency, national 
insurance producer, or insurer-affiliated party adversely 
affected by an Office decision or action may seek Ombuds-
man review of such decision or action, other than— 
(1) the appointment of a receiver or conser-
vator; 
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(2) any preliminary examination conclusions 
communicated to the regulated person before a final 
examination report is issued; 
(3) any formal enforcement-related action or 
decision, including the issuance of a cease-and-desist 
order, assessment of a civil money penalty, or com-
mencement of a formal investigation; 
(4) any formal or informal rulemaking pursuant 
to subchapter II of chapter 5 of title 5, United 
States Code; 
(5) any decision or recommended decision fol-
lowing a formal adjudication conducted pursuant to 
subchapter II of chapter 5 of title 5, United States 
Code; or 
(6) any request for agency records pursuant to 
section 552 of title 5, United States Code (com-
monly referred to as the Freedom of Information 
Act). 
(e) DECISIONS OF THE OMBUDSMAN.—The Ombuds-
man shall investigate each matter for which review is 
sought under subsection (d) and, after consideration of all 
relevant information provided to the Ombudsman by the 
person seeking such review and the Commissioner, issue 
a written determination of the appeal. Such determination 
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shall become the final decision of the Office, unless re-
versed, modified, or stayed by the Commissioner. 
(f) RETALIATION PROHIBITED.—An employee of the 
Office of National Insurance may not take any adverse 
action against a complainant for appealing any decision 
or action to the Ombudsman. 
SEC. 108. INSURANCE SELF-REGULATORY ORGANIZATIONS. 
(a) AUTHORITY OF THE COMMISSIONER.—The Com-
missioner may provide for the registration of one or more 
insurance self-regulatory organizations, and supervise and 
regulate any such organization. 
(b) AUTHORITY OF REGISTERED INSURANCE SELF- 
REGULATORY ORGANIZATION.—Except as otherwise pro-
vided in this Act, the Commissioner may authorize an in-
surance self-regulatory organization registered by the 
Commissioner to carry out the purposes of this Act, and 
enforce compliance by its members with the provisions of 
this Act, applicable regulations issued by the Commis-
sioner, and the rules of the organization. 
SEC. 109. RELATIONSHIP TO STATE LAW. 
(a) IN GENERAL.—Except as authorized by this Act 
or otherwise authorized under Federal law, no national in-
surer, national insurance agency, or national insurance 
producer shall be subject to any form of licensing, exam-
ination, reporting, regulation, or supervision by a State 
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relating to the insurance operations of such insurer, such 
agency, or such producer. 
(b) APPLICABLE
STATE
LAWS.—Notwithstanding 
subsection (a), a national insurers, national insurance 
agencies, and national insurance producers shall be sub-
ject to— 
(1) State unclaimed property and escheat laws; 
(2) tax laws of a State, in accordance with sec-
tions 321, 322, and 323; 
(3) State law relating to participation in an as-
signed risk plan, mandatory joint underwriting asso-
ciation, or any other mandatory residual market 
mechanism designed to make insurance available to 
those unable to obtain insurance in the voluntary 
market, except to the extent that such State law— 
(A) relates to participation in any vol-
untary joint underwriting association or similar 
arrangement; 
(B) results in rates in effect for an as-
signed risk plan, mandatory joint underwriting 
association, or any other mandatory residual 
market mechanism that fail to cover the ex-
pected value of all future costs associated with 
insurance policies written by such residual mar-
ket mechanism; 
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(C) requires a national insurer to use any 
particular rate, rating element, price, or form; 
or 
(D) is inconsistent with any provision of 
this Act; 
(4) State insurance law that prescribes the 
compulsory coverage requirements for workers’ com-
pensation or motor vehicle insurance, or both, that 
every insurer must provide if the insurer issues in-
surance policies in such State, except to the extent 
that such State law requires a national insurer to 
use any particular rate, rating element, price, or 
form; 
(5) State insurance law mandating the partici-
pation of insurers in an advisory or statistical orga-
nization, except to the extent that such State law re-
quires a national insurer to use any particular rate, 
rating element, price, or form; and 
(6) State law relating to participation in a 
workers’ compensation administration mechanism, 
except to the extent that such State law is incon-
sistent with any provision of this Act. 
(c) DEFINITIONS.—In this section: 
(1) ADVISORY
OR
STATISTICAL
ORGANIZA-
TION.—The term ‘‘advisory or statistical organiza-
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tion’’ does not include the National Association of 
Insurance Commissioners. 
(2) COMPULSORY COVERAGE.—The term ‘‘com-
pulsory coverage’’ does not include any State statu-
tory requirement other than those prescribing the 
minimum extent of insurance protection afforded by 
a policy of insurance. 
(3) MANDATORY
RESIDUAL
MARKET.—The 
term ‘‘mandatory residual market’’ means a facility, 
entity, or plan required by and established pursuant 
to State law to provide coverage for persons that 
cannot obtain insurance in the private market. 
Subtitle 
B—Supervision 
of 
Na-
tional Insurers and National In-
surance Agencies 
SEC. 111. PRUDENTIAL SUPERVISION. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that the Commissioner should— 
(1) promote an open and continuous exchange 
of information between national insurers, national 
insurance agencies, and national insurance pro-
ducers and the Office; and 
(2) encourage such insurers, agencies, and pro-
ducers to self-identify and self-correct actual or po-
tential violations of law, regulation, or any other su-
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(4) identify the range of enforcement actions 
the Commissioner may bring in response to a viola-
tion of law, regulation, or other supervisory require-
ment, and provide that, subject to subsection (c), the 
Commissioner shall pursue a continuum of enforce-
ment actions that begins with the least severe sanc-
tion or penalty and gradually escalates to the most 
severe sanction or penalty; 
(5) identify the factors the Commissioner will 
consider in determining whether to bring an enforce-
ment action and in determining the type of action to 
be brought; and 
(6) specify the Commissioner’s practices and 
procedures related to investigations, and provide 
that the Commissioner shall— 
(A) notify a national insurer, national in-
surance agency, or national insurance producer 
within 10 days of completing an investigation; 
and 
(B) review the status of all open investiga-
tions on a semiannual basis and determine if 
such matter should remain open or be closed. 
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SEC. 112. EXAMINATIONS. 
(a) IN GENERAL.—The Commissioner may conduct 
such examinations of a national insurer or national insur-
ance agency as the Commissioner considers necessary. 
(b) FREQUENCY.— 
(1) NATIONAL INSURERS.—The Commissioner 
shall conduct a full-scope, on-site examination of 
each national insurer not less than once during any 
24-month period. 
(2) NATIONAL
INSURANCE
AGENCIES.—The 
Commissioner shall conduct an examination of a na-
tional insurance agency in response to a complaint 
or evidence that such national insurance agency has 
violated or is about to violate— 
(A) a law, rule, or regulation; 
(B) any condition imposed in writing by 
the Commissioner in connection with issuing a 
license for a Federally licensed insurance pro-
ducer; or 
(C) any written agreement entered into 
with the Commissioner. 
(c) ACCESS TO PEOPLE AND RECORDS.— 
(1) IN GENERAL.—In the course of examining 
a national insurer or national insurance agency, the 
Commissioner, upon request, shall be given prompt 
and reasonable access to officers, employees, agents, 
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books, records, and documents of such insurer or 
agency. 
(2) COURT ORDER.—If prompt and reasonable 
access is not given as required under paragraph (1), 
the Commissioner may apply to the United States 
district court for the judicial district in which the 
main office of the national insurer or the national 
insurance agency is located for an order requiring 
that such information be promptly provided. 
(3) SUBPOENA POWER.—In connection with ex-
amination of a national insurer or national insur-
ance agency, the Commissioner may— 
(A) administer oaths and affirmations; 
(B) examine, take, and preserve testimony 
under oath as to any matter in respect of the 
affairs or ownership of any such national in-
surer or national insurance agency; 
(C) issue subpoenas; and 
(D) in order to enforce a subpoena issued 
under subparagraph (C), apply to the United 
States district court for the judicial district— 
(i) in which the main office of the na-
tional insurer or national insurance agency 
is located; or 
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(ii) in which the witness resides or 
carries on business. 
SEC. 113. REPORTS. 
Each national insurer and national insurance agency 
shall submit to the Commissioner such reports, containing 
such information and in such form, as the Commissioner 
may prescribe by regulation. 
SEC. 114. ANNUAL ASSESSMENTS AND OTHER FEES. 
(a) IN GENERAL.—The Commissioner may impose on 
national insurers, national insurance agencies, and na-
tional insurance producers an annual assessment and such 
other fees, including examination fees, as the Commis-
sioner determines to be necessary and appropriate to fund 
the expenses of the Office, and to repay and loan to the 
Office provided under section 115. 
(b) REGULATIONS.—The Commissioner shall, by reg-
ulation, establish a schedule for the annual assessment 
and other fees authorized in this section. 
(c) TREATMENT OF ASSESSMENTS AND FEES.— 
(1) DEPOSITS.—The Commissioner may deposit 
assessments and fees collected under this section 
into any regular Government depository or any State 
or national bank. 
(2) GOVERNMENT
FUNDS
AND
APPORTION-
MENT.—Notwithstanding any other provision of law, 
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assessments and fees imposed under this section 
shall not be considered government or public funds 
or appropriated money, and shall not be subject to 
apportionment for purposes of chapter 15 of title 31, 
United States Code, or under any other authority. 
(d) WORKING CAPITAL FUND.—The Commissioner 
may impose assessments and fees in excess of actual ex-
penses for any given year, to maintain an appropriate 
working capital fund, provided that the Commissioner re-
mits to the payers of such assessments and fees any funds 
collected in excess of what the Commissioner determines 
to be necessary to maintain such working capital fund. 
(e) USE OF FUNDS.—The Commissioner may use the 
fees and assessments collected pursuant to this section to 
pay all operating costs of the Office, including the salary 
and administrative expenses of the Office. 
SEC. 115. APPROPRIATIONS DURING START-UP PERIOD. 
The Commissioner may borrow from the Secretary of 
the Treasury such funds as the Commissioner determines 
to be necessary and appropriate to organize and begin op-
erations of the Office. Any such loan shall be repaid, in 
full (with interest at a rate set by the Secretary of the 
Treasury), from assessments imposed under the terms of 
section 114 not later than the date that is 30 years after 
the date of the enactment of this Act, with individual pay-
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ments on any loan to be made in such amounts and at 
such times as the Commissioner determines to be appro-
priate. 
SEC. 116. DISCLOSURE OF INFORMATION. 
(a) REGULATIONS REQUIRED.—The Commissioner 
shall issue regulations for the disclosure of reports, appli-
cations, filings, correspondence, records, and other infor-
mation prepared by, reported to, obtained by, or submitted 
to the Commissioner. 
(b) SUPERVISORY
PRIVILEGE.—The regulations 
issued pursuant to subsection (a) shall prohibit the disclo-
sure of confidential supervisory information, as such infor-
mation is defined by the Commissioner in such regulation. 
(c) OTHER PRIVILEGES.—The submission by any 
person of any information to the Commissioner for any 
purpose in the course of any supervisory or regulatory 
process of the Commissioner shall not be construed as 
waiving, destroying, or otherwise affecting any privilege 
that such person may claim with respect to such informa-
tion under Federal or State law as to any person or entity 
other than the Commissioner. 
SEC. 117. ANTI-MONEY LAUNDERING COMPLIANCE. 
(a) REGULATION REQUIRED.—The Commissioner 
shall, by regulation, require national insurers and national 
insurance agencies to establish and maintain procedures 
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reasonably designed to assure and monitor compliance 
with the recordkeeping and reporting requirements of sub-
chapter II of chapter 53 of title 31, United States Code, 
and implementing regulations issued by the Department 
of the Treasury, to the extent that those requirements 
apply to a national insurer or national insurance agency. 
(b) MINIMUM PROCEDURES.—The regulations issued 
under subsection (a) shall require— 
(1) the establishment of internal controls to 
monitor compliance with applicable requirements; 
(2) testing for compliance; 
(3) training of personnel; and 
(4) the designation of an individual or individ-
uals responsible for coordinating and monitoring 
compliance. 
Subtitle C—Enforcement Powers of 
Commissioner 
SEC. 121. REVOCATION OR SUSPENSION OF CHARTER OR 
LICENSE. 
(a) CHARTER REVOCATION.—The Commissioner may 
order the revocation of the charter of a national insurer 
or national insurance agency if the Commissioner deter-
mines that such insurer or agency— 
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(1) is engaged or has engaged in conduct that 
is hazardous to the insurer or agency and an undue 
risk of loss to the policyholders of such insurer; 
(2) is in a financial or other condition that is 
not consistent with the continuation of existing oper-
ations; or 
(3) is violating or has violated any— 
(A) applicable law or regulation; 
(B) order or condition imposed in writing 
by the Commissioner in connection with the ap-
proval of an application, filing, statement, no-
tice, or other request by the insurer or agency; 
or 
(C) written agreement entered into be-
tween the insurer or agency and the Commis-
sioner. 
(b) LICENSE REVOCATION.—The Commissioner may 
order the revocation of the license of a national insurance 
producer if the Commissioner determines that such pro-
ducer— 
(1) is violating or has violated any applicable 
law, regulation, order, condition imposed in writing 
by the Commissioner in connection with the approval 
of an application, filing, statement, notice or other 
request by the producer, or written agreement en-
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tered into between the producer and the Commis-
sioner; 
(2) provided incorrect, misleading, incomplete, 
or materially untrue information in an application 
for a license; 
(3) used fraudulent, coercive, or dishonest prac-
tices; or 
(4) 
demonstrated 
incompetence, 
untrustworthiness, or financial irresponsibility as an 
insurance producer. 
(c) SUSPENSION ORDER.—If the Commissioner, in 
the course of a charter or license revocation proceeding 
under this section, finds that a national insurer, national 
insurance agency, or national insurance producer poses an 
undue risk of loss to the policyholders of a national insurer 
as a whole, the Commissioner may order the suspension 
of the charter or license of such insurer, agency or pro-
ducer, as applicable. 
(d) NOTICE.—If the Commissioner orders the revoca-
tion of a charter or a license under subsection (a) or (b), 
the Commissioner shall provide the national insurer, na-
tional insurance agency, or national insurance producer 
that is the subject of such revocation notice of such rev-
ocation. Such notice shall include— 
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(1) a statement of the reasons for such revoca-
tion, including any determination by the Commis-
sioner under subsection (a) or (b); and 
(2) a date and place for a hearing before the 
Commissioner with respect to such revocation. 
(e) HEARING; TERMINATION.—If, on the basis of the 
evidence presented at a hearing before the Commissioner 
(or any person designated by the Commissioner for such 
purpose), in which all issues shall be determined on the 
record pursuant to section 554 of title 5, United States 
Code, and the written findings of the Commissioner (or 
such person) with respect to such evidence (which shall 
be conclusive), the Commissioner finds an undue risk of 
loss to the policyholders of a national insurer as a whole 
or a violation specified in the notice given under subsection 
(d) has been established, the Commissioner may issue an 
order terminating the charter or license of the national 
insurer, national insurance agency, or national insurance 
producer effective as of a date subsequent to that finding. 
(f) JUDICIAL REVIEW.— 
(1) IN GENERAL.—Any hearing provided for in 
this section (other than the hearing provided for in 
subsection (e)) shall be held in the Federal judicial 
district or in the territory in which the home office 
of the national insurer, national insurance agency, 
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or national insurance producer is located unless the 
party afforded the hearing consents to another place, 
and shall be conducted in accordance with the provi-
sions of chapter 5 of title 5 of the United States 
Code. After such hearing, and within 90 days after 
the Commissioner has notified the parties that the 
case has been submitted to it for final decision, it 
shall render its decision (which shall include findings 
of fact upon which its decision is predicated) and 
shall issue and serve upon each party to the pro-
ceeding an order consistent with the provisions of 
this section. Judicial review of any such order shall 
be exclusively as provided in this subsection. 
(2) APPEAL.—Any party to a proceeding under 
paragraph (1) may obtain a review of any order 
issued pursuant to paragraph (1) (other than an 
order issued with the consent of the national insurer, 
national insurance agency, or national insurance 
producer concerned) by the filing in the court of ap-
peals of the United States for the circuit in which 
the home office of the national insurer, national in-
surance agency, or national insurance producer is lo-
cated, or in the United States Court of Appeals for 
the District of Columbia Circuit, within 30 days 
after the date of service of such order, a written pe-
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tition for the order to be modified, terminated, or set 
aside. The party filing such a petition shall transmit 
to the Commissioner a copy of the petition and the 
Commissioner shall file in the court the record in the 
proceeding, as provided in section 2112 of title 28 
of the United States Code. Review of such pro-
ceedings shall be had as provided in chapter 7 of 
title 5 of the United States Code. The judgment and 
decree of the court shall be final, except that the 
same shall be subject to review by the Supreme 
Court upon certiorari, as provided in section 1254 of 
title 28 of the United States Code. 
SEC. 122. OTHER ENFORCEMENT POWERS. 
(a) IN GENERAL.—The Commissioner may issue 
cease and desist orders, prohibition, suspension, removal 
orders, and impose civil money penalties upon a national 
insurer, national insurance agency, national insurance 
producer, and any insurer-affiliated party on the same 
grounds and the same terms and conditions applicable to 
the issuance of such orders by a Federal banking agency 
under section 8 of the Federal Deposit Insurance Act, as 
if a national insurer, national insurance agency, or na-
tional insurance producer was an insured depository insti-
tution, an insurer-affiliated party was an institution-affili-
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ated party, the Commissioner was a Federal banking 
agency, and a policyholder was a depositor. 
(b) HOLDING COMPANIES
AND OTHER SUBSIDI-
ARIES.—This section shall apply to a national insurance 
holding company and to any subsidiary of a national in-
surance holding company in the same manner as such sec-
tion applies to a national insurer. 
SEC. 123. INSURANCE FRAUD. 
(a) INVESTIGATIONS.—Director of the Division of In-
surance Fraud may investigate suspected fraudulent in-
surance acts by national insurers, national insurance 
agencies, national insurance producers, and other persons. 
(b) PENALTY.— 
(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), whoever commits a fraudulent 
insurance act or whoever knowingly and intentionally 
interferes with the investigations of a suspected 
fraudulent insurance act shall be subject to a fine of 
not more than $500,000, imprisonment for not more 
than 5 years or both. 
(2) NATIONAL
INSURERS, AGENCIES, INSUR-
ANCE PRODUCERS.—If the person committing an of-
fense referred to in paragraph (1) is a national in-
surer, national insurance agency, national insurance 
producer, or insurer-affiliated party, such person 
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shall be subject to a fine of not more than 
$1,000,000 per violation per day, or imprisonment 
for not more than 10 years, or both. 
(3) LOW AMOUNTS.—If the person committing 
an offense referred to in paragraph (1) is not a na-
tional insurer, national insurance agency, national 
insurance producer, or insurer-affiliated party and 
the offense is a fraudulent insurance act involving 
an amount or value not exceeding $5,000, such per-
son shall be subject to a fine of not more than 
$100,000, imprisonment for not more than one year, 
or both. 
(4) ADDITIONAL
PENALTIES.—The penalties 
under this subsection shall be in addition to any 
other penalties imposed under this Act. 
(5) RESTITUTION REQUIRED.—Any person con-
victed of an offense referred to in paragraph (1) 
shall make monetary restitution for any financial 
loss or damage sustained by any other person as a 
result of such offense. Such restitution shall be the 
exclusive monetary remedy available to the victim at 
law or in equity after entry of judgment. 
(c) IMMUNITY FROM LIABILITY.— 
(1) IN GENERAL.—Except as provided under 
paragraph (2), any person who shares, furnishes, 
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discloses, receives, collects, or uses information con-
cerning a suspected, anticipated, or completed fraud-
ulent insurance act shall not be liable to any person 
under any provision of law of the United States or 
of any State or political subdivision of any State, or 
under any contract or other legally enforceable 
agreement, for such act, if the information is pro-
vided to or received from— 
(A) the Commissioner or any employee, 
agent, or representative of the Commissioner; 
(B) a Federal, State, or local enforcement 
or regulatory official or an employee, agent, or 
representative of such official; 
(C) a self-regulatory organization or an 
employee, agent, or representative of such orga-
nization; 
(D) a person involved in the investigation 
(including cooperation or participation in an in-
vestigation), prevention, and detection of fraud-
ulent insurance acts or an employee, agent, or 
representative of such person; or 
(E) the NAIC or an employee, agent, or 
representative of the NAIC. 
(2) MALICE.— 
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(A) IN GENERAL.—Paragraph (1) shall not 
apply with respect to false statements made 
with actual malice by a person to a person re-
ferred to in subparagraphs (A) through (E) of 
paragraph (1). 
(B) CONTENTS OF COMPLAINT.—In an ac-
tion brought against a person for filing a report 
or furnishing other information concerning a 
fraudulent insurance act, the party bringing the 
action shall plead specifically any allegation 
that paragraph (1) does not apply because the 
person filed the report or furnished the infor-
mation with actual malice. 
(d) FRAUDULENT INSURANCE ACT DEFINED.—In 
this section, the term ‘‘fraudulent insurance act’’ means 
an act or omission committed by a person who, knowingly 
and with intent to defraud, and for the purpose of depriv-
ing another of property or for pecuniary gain, commits, 
participates in, or aids, abets, or conspires to commit or 
solicits another person to commit, or permits its employees 
or its agents to commit, one or more of the following: 
(1) Presenting, causing to be presented, or pre-
paring with knowledge or belief that it will be pre-
sented to or by a national insurer, national insur-
ance agency, State insurer, State insurance agency, 
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or insurance producer acting with respect to a policy 
of insurance written by a national insurer or State 
insurer, false information as part of, in support of, 
or concerning a fact material to one or more of the 
following: 
(A) An application for a new or renewal of 
an insurance policy or reinsurance contract. 
(B) The rating of a national insurer or 
State insurer that writes an insurance policy or 
enters into a reinsurance contract. 
(C) A claim for payment or benefit pursu-
ant to an insurance policy or reinsurance con-
tract. 
(D) Premiums paid on an insurance policy 
or reinsurance contract. 
(E) Payments made in accordance with the 
terms of an insurance policy or reinsurance con-
tract. 
(F) A document filed with the Commis-
sioner. 
(G) The financial condition of a national 
insurer or State insurer. 
(H) The formation, acquisition, merger, 
consolidation, or dissolution of a national in-
surer or national insurance agency. 
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(I) The issuance of evidence of insurance. 
(J) The reinstatement of an insurance pol-
icy. 
(2) Solicitation or acceptance of new or renewal 
insurance risks on behalf of a national insurer, na-
tional insurance agency, State insurer, State insur-
ance agency, or insurance producer, or other persons 
engaged in the business of insurance by a person 
who knows or should know that the national insurer 
or State insurer is insolvent at the time of the trans-
action. 
(3) Removal, concealment, alteration, or de-
struction of the records of a national insurer, na-
tional insurance agency, State insurer, State insur-
ance agency, or insurance producer. 
(4) Transaction of the business of insurance in 
violation of laws requiring a charter or license under 
this Act. 
(5) Attempting to commit, aiding or abetting in 
the commission of, or conspiracy to commit the acts 
or omissions specified in this subsection. 
SEC. 124. FOREIGN INVESTIGATIONS. 
(a) REQUESTING ASSISTANCE FROM FOREIGN GOV-
ERNMENTS.—In conducting any investigation, examina-
tion, or enforcement action under this subtitle, the Com-
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missioner may request the assistance of any foreign gov-
ernment. 
(b) PROVIDING ASSISTANCE TO FOREIGN GOVERN-
MENTS.—The Commissioner may assist any foreign gov-
ernment that is conducting an investigation to determine 
whether any person has violated, is violating, or is about 
to violate any law or regulation relating to insurance mat-
ters or currency transactions administered or enforced by 
such foreign government. 
SEC. 125. PROMPT CORRECTIVE ACTION. 
(a) RULEMAKING.— 
(1) IN GENERAL.—Not later than the expira-
tion of the 6-month period beginning upon the date 
of submission of the report under subsection (b)(3) 
to the Commissioner, the Commissioner shall pro-
mulgate such regulations, applicable to national in-
surers, as the Commissioner determines appropriate 
and consistent with the recommendation in that re-
port to ensure that prompt corrective action is taken 
to resolve any hazardous financial condition of a na-
tional insurer. 
(2) REQUIRED
CONTENT.—Rules required by 
this subsection shall include such capital measures 
and categories, capital standards, supervisory cri-
teria, restrictions on permissible actions of such in-
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surers, requirements for such insurers, procedures, 
provisions regarding conservatorship and receiver-
ship of such insurers, and other provisions as the 
Commissioner considers are appropriate and con-
sistent with any recommendations in the report and 
the standards established pursuant to section 312 of 
this Act. 
(b) GAO STUDY AND REPORT.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study to identify 
an appropriate structure of procedures and require-
ments for taking prompt corrective actions with re-
spect to national insurers, to ensure that any haz-
ardous financial condition of such a national insurer 
is resolved effectively and efficiently, with the fewest 
possible losses. 
(2) REQUIREMENTS.—In conducting the study 
required by this subsection, the Comptroller General 
shall analyze and evaluate various proposals, struc-
tures, methods, and systems for taking prompt cor-
rective actions with respect to various financial enti-
ties and institutions, including— 
(A) the prompt corrective action require-
ments under section 38 of the Federal Deposit 
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Insurance Act (12 U.S.C. 1831o) with respect 
to insured depository institutions; and 
(B) the ‘‘Model Regulation to Define 
Standards and Commissioner’s Authority for 
Companies Deemed to be in Hazardous Finan-
cial Condition’’ of the NAIC. 
(3) REPORT.— 
(A) IN GENERAL.—Not later than the ex-
piration of the 6-month period beginning on the 
date of enactment of this Act, the Comptroller 
General shall submit a report to the Committee 
on Banking, Housing, and Urban Affairs of the 
Senate, the Committee on Financial Services of 
the House of Representatives, and the Commis-
sioner, regarding the study required under this 
subsection. 
(B) 
CONTENTS.—The 
report 
required 
under this paragraph shall describe the study 
and the results of the evaluations conducted 
under the study, and shall include a specific 
recommendation to the Commissioner for estab-
lishment of an appropriate structure of proce-
dures and requirements for taking prompt cor-
rective actions with respect to national insurers, 
to ensure that any hazardous financial condi-
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tion of a national insurer is resolved effectively 
and efficiently with the fewest possible losses. 
TITLE II—SYSTEMIC RISK REGU-
LATION, 
COORDINATING 
COUNCIL 
FOR 
FINANCIAL 
REGULATORS, 
INTER-
NATIONAL AGREEMENTS 
SEC. 201. SYSTEMIC RISK REGULATION. 
(a) DELEGATION OF AUTHORITY.—Not later than 90 
days after the date of enactment of this Act, the President 
shall designate a systemic risk regulator for covered insti-
tutions. In making this designation the President shall 
consult with the Chairman of the Senate Committee on 
Banking, Housing and Urban Affairs, and the House 
Committee on Financial Services, and shall designate a 
Federal agency, other than the Office of National Insur-
ance, that has experience in financial regulation and su-
pervision as the systemic risk regulator for covered institu-
tions. 
(b) POWERS OF SYSTEMIC RISK REGULATOR.—Not-
withstanding any other provision of law, the agency des-
ignated pursuant to subsection (a) may— 
(1) request information on the activities and op-
erations of a covered institution, or any affiliate of 
a covered institution, from such institution or such 
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affiliate, and from the Office or a State insurance 
authority responsible for supervising such covered 
institution, as applicable; 
(2) participate with the Office or a State insur-
ance authority, as applicable, in an examination of 
a covered institution and any affiliate of such cov-
ered institution; 
(3) if such agency determines that the activities 
of a covered institution, any affiliate of a covered in-
stitution, any category of covered institutions, or any 
product or service offered by a covered institution is 
having, or would have, serious adverse effects on 
economic conditions or financial stability, rec-
ommend corrective action to the Commissioner or a 
State insurance authority, including recommenda-
tions to— 
(A) restrict or prohibit the covered institu-
tion, any affiliate of the covered institution, or 
any category of covered institutions from en-
gaging in such activity or practice or offering 
such product or service; or 
(B) take any other action that the agency 
deems appropriate to mitigate or avoid the ad-
verse effects of such activity, practice, product 
or service; 
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(4) issue a rule or order to address the activi-
ties that are the subject of a recommendation made 
pursuant to paragraph (3), if— 
(A) the Commissioner or State insurance 
authority fail to implement corrective actions 
within a reasonable period of time, as deter-
mined by such agency; and 
(B) the Coordinating Council for Financial 
Regulators established in section 202 deter-
mines, by a two-thirds vote of its membership, 
that such corrective action is necessary to miti-
gate or avoid an impending serious adverse ef-
fect on economic conditions or financial stability 
in the United States; and 
(5) in consultation with the Commissioner— 
(A) determine if a covered institution is 
systemically important; and 
(B) if such covered institution is deter-
mined to be systemically important, determine 
if such covered institution should be required to 
be chartered under title III of this Act. 
(c) ACCESS
TO
INFORMATION
AND
CONFIDEN-
TIALITY.— 
(1) COURT ORDER.—If the agency designated 
pursuant to subsection (a) is not given prompt and 
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reasonable access to officers, employees, agents, 
books, records and documents of a covered institu-
tion, or any affiliate of a covered institution, such 
agency may apply to the United States district court 
for the judicial district in which the main office of 
the covered institution is located for an order requir-
ing that such access be promptly provided. 
(2) CONFIDENTIALITY.—Information provided 
or obtained under the terms of paragraph (2) or (3) 
of subsection (b) shall be treated as confidential su-
pervisory information and exempt from the require-
ments of section 552 of title 5, United States Code. 
(d) JUDICIAL REVIEW.—Any covered institution or 
affiliate of a covered institution that is the subject of an 
order issued pursuant to this section may obtain review 
of such order in the United States Court of Appeals within 
any circuit where such institution or such affiliate has its 
principal place of business, or in the Court of Appeals in 
the District of Columbia, by filing in the court, within 30 
days of after issuance of such order, a petition praying 
that the order be set aside. Such covered institution or 
affiliate shall transmit to the agency designated pursuant 
to subsection (a) a copy of such petition and the agency 
shall file in the court the record made before the agency, 
as provided in section 2112 of title 28, United States 
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Code. Upon the filing of such petition, the court shall have 
jurisdiction to affirm, set aside, or modify the order and 
to require the agency to take such action with regard to 
the matter under review as the court deems proper. The 
findings of the agency as to the facts, if supported by sub-
stantial evidence, shall be conclusive. 
(e) COSTS.—The agency designated pursuant to sub-
section (a) shall recover all direct and indirect costs associ-
ated with the exercise of its authority under this section 
through the imposition of an assessment on each covered 
institution that is equal to the product of— 
(1) an assessment rate established by the agen-
cy, by regulation; and 
(2) the amount of the covered institution’s aver-
age total assets during the preceding year. 
(f) REPORT TO CONGRESS AND GAO REVIEW.— 
(1) REPORT TO CONGRESS.—The agency des-
ignated pursuant to subsection (a) shall provide a 
written report to Congress of any action or deter-
mination made under paragraph (3), (4), or (5) of 
subsection (b), and an explanation of the basis for 
such determination. 
(2) GAO REVIEW.—The Comptroller General of 
the United States shall review and report to Con-
gress on any determination under paragraph (3), 
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(4), or (5) of subsection (b), including the basis for 
the determination and the purpose for which any ac-
tion was taken. 
(g) COVERED INSTITUTION DEFINED.—In this sec-
tion, the term ‘‘covered institution’’ means a national in-
surer and any insurance company organized and super-
vised under State law. 
SEC. 202. COORDINATING COUNCIL FOR FINANCIAL REGU-
LATORS. 
(a) ESTABLISHMENT AND PURPOSE.—There is es-
tablished the Coordinating National Council for Financial 
Regulators (in this section referred to as the ‘‘Council’’) 
to serve as a forum for financial regulators to collectively 
identify and consider issues related to the regulation and 
supervision of financial services firms, including the sta-
bility and integrity of financial markets, investor and con-
sumer protection, the efficiency and effectiveness of regu-
lation and supervision, and other matters of mutual con-
cern. 
(b) FUNCTIONS OF THE COUNCIL.— 
(1) DUTIES.—The Council shall— 
(A) monitor and measure the health and 
competitiveness of the financial services indus-
try in the United States, including its compo-
nent segments; 
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(B) develop early warning systems to de-
tect potential points of weakness or strains in 
financial markets; 
(C) recommend coordinated actions for na-
tional and State financial regulators and finan-
cial services firms, especially in times of market 
stress or financial crisis; 
(D) develop model supervisory policies for 
national and State financial regulators; and 
(E) as necessary, make determinations re-
ferred to in section 201(b)(4)(B). 
(2) LIMITATION.—Except as provided in para-
graph (1)(E), the Council shall not have any inde-
pendent supervisory or regulatory authority. 
(c) COMPOSITION.—The Council shall be composed 
of— 
(1) the Secretary of the Treasury, who shall 
serve as the chair of the Council; 
(2) the Chairman of the Board of Governors of 
the Federal Reserve System; 
(3) the Chairman of the Securities and Ex-
change Commission; 
(4) the Chairman of the Commodities Futures 
Trading Commission; 
(5) the Comptroller of the Currency; 
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(6) the Director of the Office of Thrift Super-
vision; 
(7) the Chairman of the Federal Deposit Insur-
ance Corporation; 
(8) the Commissioner of National Insurance; 
(9) an individual appointed by the President, by 
and with the advice and consent of the Senate, who 
is knowledgeable in State regulation of depository in-
stitutions and other State licensed lenders; 
(10) an individual appointed by the President, 
by and with the advice and consent of the Senate, 
who is knowledgeable in State regulation of the busi-
ness of insurance; and 
(11) an individual appointed by the President, 
by and with the advice and consent of the Senate, 
who is knowledgeable in State regulation of securi-
ties activities. 
(d) CONDITIONS APPLICABLE TO APPOINTED MEM-
BERS OF THE COUNCIL.— 
(1) CONSULTATION.—In making the appoint-
ments under paragraphs (9), (10), and (11) of sub-
section (c), the President shall consult with the Con-
ference of State Bank Supervisors, the National As-
sociation of Insurance Commissioners, and the 
North American Securities Administrators Associa-
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tion, or any successor organizations formed to rep-
resent the interests of State banking, insurance, and 
securities regulators. 
(2) TERM AND VACANCY.—Members appointed 
under paragraphs (9), (10), and (11) of subsection 
(c) shall serve for a term of 5 years. A vacancy in 
the Council of a member appointed under one of 
such paragraphs shall be filled in the same manner 
in which the original appointment was made. The 
member appointed to fill the vacancy shall be ap-
pointed only for the remainder of the term of the 
preceding member. 
(3) TRAVEL
EXPENSES.—Members appointed 
under paragraphs (9), (10), and (11) of subsection 
(c) shall receive travel expenses, including per diem 
in lieu of subsistence, in accordance with applicable 
provisions under subchapter I of chapter 57 of title 
5, United States Code. 
(4) PROHIBITION ON FINANCIAL INTERESTS.— 
A member appointed under paragraph (9), (10), or 
(11) of subsection (c) may not have a direct finan-
cial interest in any financial services firm. 
(e) MEETINGS.—The Council shall meet at least 
every 90 days upon the call of the Chair. Each member 
of the Council (other than the members appointed under 
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paragraphs (9), (10), and (11) of subsection (c)) may des-
ignate a senior policymaking official to represent such 
member at a meeting of the Council, as necessary and ap-
propriate. 
(f) CONSULTATION.—The Council shall consult, as 
appropriate, with major market participants, the various 
exchanges, clearinghouses, self-regulatory bodies, trade as-
sociations and others, and may seek private sector solu-
tions to issues whenever possible. 
(g) INFORMATION SHARING.—The members of the 
Council shall, to the extent permitted by law, share infor-
mation as may be necessary to fulfill the functions of the 
Council. 
(h) ANNUAL REPORT.—The Council shall submit an 
annual report to the President, Congress, and the gov-
ernors and legislatures of each State on its activities. 
(i) ADMINISTRATIVE SUPPORT.—The Secretary of 
the Treasury shall provide the Council with such adminis-
trative support services as may be necessary for the per-
formance of its functions. 
(j) AUTHORIZATION.—There is authorized to be ap-
propriated such funds as may be necessary to carry out 
this section. 
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SEC. 203. INTERNATIONAL AGREEMENTS. 
(a) IN GENERAL.—The Commissioner may engage in 
international efforts to secure bilateral and multilateral 
agreements with foreign insurance regulators and regional 
and global regulatory organizations in order to— 
(1) promote the stability and integrity of insur-
ance markets; 
(2) encourage open and fair competition in such 
markets; and 
(3) improve the quality and uniformity of insur-
ance supervision and regulation internationally and 
provide the regulation of cross-border provisions of 
insurance and reinsurance services. 
(b) TECHNICAL ASSISTANCE.—The Commissioner 
may provide technical assistance to, and cooperation with, 
foreign insurance regulators and regional and global regu-
latory organizations, including the development and imple-
mentation of international regulatory standards for insur-
ance, and the development and implementation of bilateral 
and multilateral mutual recognition agreements on the li-
censing of insurers and insurance producers. 
(c) CONSULTATION.—In exercising the authority 
granted under this section, the Commissioner shall consult 
and cooperate with the Executive Office of the President 
and the United States Trade Representative. 
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TITLE 
III—NATIONAL 
INSUR-
ANCE COMPANIES AND NA-
TIONAL 
INSURANCE 
AGEN-
CIES 
Subtitle A—Organization, 
Chartering, and Powers 
SEC. 301. ORGANIZATION AND CHARTERING. 
(a) CHARTERS.— 
(1) IN
GENERAL.—The Commissioner shall, 
under such regulations as the Commissioner pre-
scribes, issue charters to and provide for the organi-
zation of— 
(A) national insurers in stock, mutual, re-
ciprocal, or fraternal form; and 
(B) national agencies as corporations, 
partnerships, limited liability companies, or in 
other forms recognized under State law. 
(2) NATIONAL INSURERS.—A charter for a na-
tional insurer issued under paragraph (1) may limit 
such national insurer to a specified line of insurance 
and shall only be issued for property and casualty 
insurance, life insurance, or the reinsurance of prop-
erty and casualty insurance and life insurance. A na-
tional insurer may only provide insurance for the 
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lines of insurance for which such insurer has been 
issued a charter under such paragraph. 
(3) NATIONAL AGENCIES.—A charter may be 
issued under paragraph (1) to a national insurance 
agency that sells, solicits, or negotiates property and 
casualty insurance, life insurance, or the reinsurance 
of property and casualty insurance and life insur-
ance. A national insurance agency may sell, solicit, 
or negotiate lines of insurance other than those for 
which such national insurance agency has been 
issued a charter under paragraph (1) in accordance 
with applicable State laws. 
(b) CHARTERING CRITERIA.—In determining wheth-
er to issue a charter for a national insurer or national 
insurance agency, the Commissioner shall consider the 
character and competency of the parties seeking the char-
ter, and the financial resources and future prospects of 
the proposed national insurer or proposed national insur-
ance agency. 
(c) LICENSING
OF NON-UNITED STATES INSUR-
ERS.— 
(1) IN GENERAL.—A non-United States insurer 
may transact insurance in the United States through 
a United States branch by chartering the United 
States branch to do business as a national insurer 
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under this Act, under such regulations as the Com-
missioner may prescribe. 
(2) CHARTERING
CRITERIA.—In carrying out 
subsection (b) with respect to a non-United States 
insurer, the Commissioner may take into account the 
nature of the insurance or reinsurance business that 
the non-United States insurer proposes to conduct 
through a United States branch and may give ap-
propriate recognition to the capital and other assets 
maintained by the non-United States insurer in a ju-
risdiction other than the United States. 
(3) OTHER
APPLICABLE
LAWS.—Nothing in 
this section shall be construed to prohibit a non- 
United States insurer from doing business as an in-
surer without a charter under this Act on any basis 
permitted under applicable State laws or an inter-
national agreement. 
(4) NONDISCRIMINATION.— 
(A) IN GENERAL.—Except as provided in 
this section, the Commissioner may not impose 
any condition for the issuance of a charter 
under this section to a national insurer solely 
because the national insurer is— 
(i) a subsidiary of a non-United 
States person; 
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(ii) partially owned by a non-United 
States person; or 
(iii) a United States branch of a non- 
United States insurer. 
(B) EXCEPTION.—Notwithstanding sub-
paragraph (A), the Commissioner may impose 
conditions for the issuance of a charter under 
this section that are different from those im-
posed on other national insurers if— 
(i) the conditions attached are con-
tained in the charter under which the na-
tional insurer chooses to operate; and 
(ii) the Commissioner makes a written 
finding that the conditions are related to 
the protection of policyholders and are the 
minimum conditions necessary to achieve 
the purposes of this Act. 
(d) NO DELEGATION PERMITTED.—The Commis-
sioner may not delegate the authorities of the Commis-
sioner under this section to any insurance self-regulatory 
organization. 
SEC. 302. CORPORATE GOVERNANCE. 
(a) MAIN OFFICE.—A national insurer or national in-
surance agency may designate any office at which it con-
ducts insurance operations as its main office, and for pur-
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poses of jurisdiction, a national insurer or national insur-
ance agency shall be deemed a citizen of the State in which 
its main office is located and of the State in which it has 
its principal place of business. 
(b) APPLICABLE LAW.—A national insurer or na-
tional insurance agency may elect to follow the corporate 
governance procedures of the law of the State in which 
the main office of the such insurer or agency is located, 
the law of the State in which a company that controls the 
insurer or agency is incorporated, title 8 of the Delaware 
Code (Delaware General Corporation Law), r the Model 
Business Corporation Act of the American Bar Associa-
tion. A national insurer or national insurance agency shall 
designate in its bylaws the body of law selected. 
(c) INDEPENDENT AUDIT COMMITTEE
FOR NA-
TIONAL INSURERS.— 
(1) IN GENERAL.—Each national insurer and 
national insurance agency shall establish an audit 
committee of the board of directors of such insurer 
or such agency, which shall be composed entirely of 
outside directors who are independent of manage-
ment of such insurer or such agency. 
(2) SATISFACTION.—The requirement described 
in paragraph (1) shall be satisfied if a company that 
controls a national insurer or national insurance 
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agency has established an audit committee of its 
board of directors entirely composed of outside direc-
tors who are independent of management of such 
controlling person, and such committee reviews the 
financial statements of the national insurer or na-
tional insurance agency. 
(d) PARTICIPATING POLICY PROCEDURES.— 
(1) IN GENERAL.—A national insurer in mutual 
form shall elect to either adhere to participating pol-
icy procedures of the relevant law of the State in 
which its main office is located, or adhere to the 
participating policy procedures established by the 
Commissioner under paragraph (2). 
(2) REGULATIONS.—The Commissioner shall, 
by regulation, establish participating policy proce-
dures, as the Commissioner determines to be appro-
priate to carry out paragraph (1). 
(e) CONSUMER LIAISON.— 
(1) IN GENERAL.—Each national insurer and 
national insurance agency shall appoint a liaison to 
serve consumers and address complaints or disputes. 
(2) PROCEDURES.—Each national insurer and 
national insurance agency shall establish policies and 
procedures designed to reasonably ensure fair and 
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expeditious handling of consumer complaints and 
disputes. 
(3) REGULATIONS.—The Commissioner shall 
issue regulations governing the standards for the li-
aison referred to in paragraph (1). 
SEC. 303. CHARTER CONVERSIONS. 
(a) CONVERSION FROM STATE TO NATIONAL CHAR-
TER.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Commissioner may, pursuant to 
regulations issued by the Commissioner, allow a 
State insurer to convert to a national insurer and a 
State insurance agency to convert to a national in-
surance agency. 
(2) EFFECT OF CONVERSION.—A State insurer 
or State insurance agency that converts under this 
section shall, by operation of law and without fur-
ther action, hold and be subject to all rights, privi-
leges, liabilities, property interests, and other inter-
ests and obligations that the State insurer or State 
insurance agency held, or was subject to, imme-
diately before the conversion. 
(3) SPECIAL
AUTHORITY.—The Commissioner 
may, subject to such conditions as the Commissioner 
may prescribe by regulation, permit a national in-
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surer or national insurance agency resulting from 
the conversion of a State insurer or State insurance 
agency, as applicable, to retain, hold, or exercise as-
sets, liabilities, powers, and authorities that do not 
conform to the legal requirements otherwise applica-
ble to national insurers or national insurance agen-
cies to the extent the Commissioner determines is 
appropriate. 
(b) CONVERSION FROM NATIONAL TO STATE CHAR-
TER.— 
(1) IN GENERAL.—A national insurer may con-
vert to a State insurer and a national insurance 
agency may convert to a State insurance agency in 
accordance with applicable State law if— 
(A) such national insurer or such national 
insurance agency notifies the Commissioner of 
the intention to convert in accordance with such 
procedures as the Commissioner may prescribe 
by regulation; and 
(B) after conducting a review of such na-
tional insurer or such national insurance agen-
cy, the Commissioner approves the conversion. 
(2) SAVINGS PROVISION.—Nothing in this sec-
tion or in the conversion of a national insurer to a 
State insurer or a national insurance agency to a 
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State insurance Agency shall operate to abrogate 
any rights, privileges, liabilities, property interests, 
or other interests or obligations that a national in-
surer or national insurance agency held or was sub-
ject to immediately before the conversion. 
(c) NO DELEGATION PERMITTED.—The Commis-
sioner may not delegate any authority under this section 
to any insurance self-regulatory organization. 
SEC. 304. POWERS. 
(a) IN GENERAL.— 
(1) NATIONAL
INSURER.—A national insurer 
may, pursuant to such regulations as the Commis-
sioner prescribes— 
(A) engage in the sale, solicitation, nego-
tiation, and underwriting of property and cas-
ualty insurance (other than title insurance), life 
insurance, and reinsurance; 
(B) establish and maintain one or more 
separate accounts and allocate amounts to such 
accounts, and establish and maintain one or 
more protected cells in connection with an in-
surance securitization and attribute to such 
cells insurance and reinsurance obligations with 
respect to its general account, obligations relat-
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ing to the insurance securitization, and assets 
to fund such obligations; 
(C) hold and accumulate funds pursuant to 
funding agreements; 
(D) provide investment advice and invest-
ment management services; and 
(E) engage in all other insurance oper-
ations and exercise all such incidental powers as 
shall be necessary to carry on insurance oper-
ations. 
(2) NATIONAL
INSURANCE
AGENCY.—A na-
tional insurance agency may, pursuant to such regu-
lations and the Commissioner prescribes— 
(A) engage in the sale, solicitation, and ne-
gotiation of policies of insurance issued by any 
national insurer or State insurer, and the sale, 
solicitation and negotiation of surplus lines of 
insurance and nonadmitted insurance for a non-
admitted insurer; and 
(B) exercise all such incidental powers as 
shall be necessary to carry out such activities, 
including claims adjustment and settlement, 
risk management, employee benefits advice, re-
tirement planning, and any other insurance-re-
lated consulting activities. 
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(b) OTHER POWERS.—A national insurer or national 
insurance agency may, subject to such regulations as the 
Commissioner prescribes— 
(1) adopt and use a corporate seal, or a fac-
simile of it; 
(2) have perpetual succession until such time as 
it is liquidated, dissolved, merged, or otherwise 
wound up in accordance with applicable law; 
(3) adopt, amend, and repeal by-laws; 
(4) sue or be sued, complain and defend, and 
otherwise litigate in any court and participate, as a 
party or otherwise, in any judicial, administrative, 
arbitral, or other proceeding, in its corporate name; 
(5) make contracts and guarantees, incur liabil-
ities, borrow money, issue notes, bonds, and other 
obligations (which may be convertible into or include 
the option to purchase other securities of the na-
tional insurer or national insurance agency), and se-
cure any of its obligations by mortgage or pledge of 
any of its property, franchises, or income; 
(6) purchase, receive, subscribe for, or other-
wise acquire, own, hold, vote, improve, employ, use, 
and otherwise deal in and with real and personal 
property or other assets, or any interest therein, and 
sell, convey, mortgage, lease, exchange, transfer, or 
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otherwise dispose of, or mortgage or pledge, all or 
any of its property and assets, or any interest there-
in; 
(7) lend money, invest, and reinvest its funds 
and receive and hold real and personal property as 
security for repayment; 
(8) participate with others in any corporation, 
partnership, limited partnership, joint venture, or 
other association, or in any transaction, under-
taking, or arrangement, which the national insurer 
or national insurance agency would have power to 
conduct by itself, whether or not such participation 
involves sharing or delegating control with or to oth-
ers; 
(9) elect or appoint directors, officers, employ-
ees, and agents of the national insurer or national 
insurance agency, define their duties, fix their com-
pensation, and lend them money and credit; 
(10) make donations and otherwise devote its 
resources for the public welfare or for charitable, sci-
entific, educational, humanitarian, philanthropic, or 
religious purposes; and 
(11) engage in any other lawful activity that is 
necessary or convenient to further its activities and 
affairs. 
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(c) SUBSIDIARIES.—No national insurer or national 
insurance agency may establish or acquire a subsidiary 
without prior notice to the Commissioner, and shall con-
duct the activities in accordance with regulations and or-
ders of the Commissioner. 
(d) OTHER CORPORATE TRANSACTIONS.—No na-
tional insurer or national insurance agency shall engage 
in mutual to stock conversions, stock to mutual conver-
sions, mergers, acquisitions, asset transfers, and other 
similar corporate transactions without the prior approval 
of the Commissioner, and subject to regulations and or-
ders of the Commissioner. 
(e) PROHIBITED ACTIVITIES.—No national insurer or 
national insurance agency may engage in any activity that 
the Commissioner determines, by regulation or order, 
poses a serious risk to the solvency of a national insurer 
or national insurance agency, jeopardizes the interests of 
policyholders of a national insurer or national insurance 
agency, or otherwise is incompatible with the public inter-
est. 
(f) BULK TRANSFERS.— 
(1) BULK
TRANSFERS
AUTHORIZED.—A na-
tional insurer may only effect the following bulk 
transfers: 
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(A) A State insurer as the transferring in-
surer and a permitted national insurer as the 
assuming insurer. 
(B) A permitted national insurer as the 
transferring insurer and a State insurer as the 
assuming insurer. 
(C) A national insurer as the transferring 
insurer and a national insurer as the assuming 
insurer. 
(D) A State insurer as the transferring in-
surer and a national insurer that is not a per-
mitted national insurer as the assuming in-
surer. 
(E) A national insurer that is not a per-
mitted national insurer as the transferring in-
surer and a State insurer as the assuming in-
surer. 
(2) COMMISSIONER APPROVAL.— 
(A) IN GENERAL.—A national insurer shall 
not effect a bulk transfer as authorized under 
subparagraph (A), (B), (C), or (E) of para-
graph (1) without the prior approval of the 
Commissioner, in accordance with such regula-
tions as the Commissioner shall prescribe. 
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(B) STANDARD OF APPROVAL.—The Com-
missioner shall approve a bulk transfer under 
subparagraph (B), after notice and a hearing, 
unless the Commissioner determines that the 
bulk transfer is likely to be hazardous to policy-
holders of transferred insurance policies, policy-
holders of the transferring insurer, or policy-
holders of the assuming insurer. 
(3) POLICYHOLDER CONSENT.— 
(A) STATE INSURER AND PERMITTED NA-
TIONAL INSURER.—Notwithstanding any other 
provision of law, a national insurer is not re-
quired to obtain the consent of policyholders to 
effect a bulk transfer authorized under sub-
paragraph (A) or (B) of paragraph (1). 
(B) BETWEEN
NATIONAL
INSURERS
OR 
STATE
INSURER
AND
OTHER
NATIONAL
IN-
SURER.—Notwithstanding any other provision 
of law, the Commissioner shall determine 
whether a national insurer wishing to effect a 
bulk transfer authorized under subparagraph 
(C) or (E) of paragraph (1) is required to ob-
tain the consent of policyholders to effect such 
transfer and the form in which such consent 
must be obtained. 
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(4) RELEASE FROM LIABILITY.—Upon the com-
pletion of a bulk transfer under this section, the 
transferring insurer shall be released from its obliga-
tions under the transferred insurance policies. 
(5) STATE LAW.— 
(A) PROHIBITION.—Except as provided in 
subparagraph (B), a State may not— 
(i) require a national insurer or a 
State insurer to— 
(I) obtain policyholder consent to 
a bulk transfer; or 
(II) submit the bulk transfer to 
State review or action (including ap-
proval and nondisapproval); or 
(ii) prevent or significantly interfere 
with a bulk transfer effected pursuant to 
this section. 
(B) CONSTRUCTION.—Subparagraph (A) 
shall not be construed to prohibit any State 
from— 
(i) collecting, reviewing, and taking 
action (including approval or disapproval) 
on applications and other documents or re-
ports concerning a proposed bulk transfer 
authorized under— 
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(I) subparagraph (B), (D), or 
(E) of paragraph (1) to which a State 
insurer (other than a permitted na-
tional insurer) domiciled in that State 
is a party; or 
(II) subparagraph (D) or (E) of 
paragraph (1) to which a State in-
surer (other than a permitted national 
insurer) doing business in that State, 
other than a State insurer domiciled 
in that State, is a party, if the review 
or action meets the standards set 
forth in subparagraph (C); or 
(ii) requiring policyholder consent of a 
proposed bulk transfer permitted under 
paragraph (4) or (5) of subsection (b). 
(C) STANDARDS.—A review or action 
meets the standards under this paragraph, if 
it— 
(i) is based on standards that are not 
more onerous than those imposed by the 
Commissioner; 
(ii) occurs within a reasonable time 
frame that advances the purposes of this 
section; 
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(iii) is made in close consultation and 
cooperation with the Commissioner; 
(iv) is without bias or discrimination 
toward either the transferring insurer or 
the assuming insurer; 
(v) serves a legitimate State interest; 
and 
(vi) does not frustrate the proposed 
bulk transfer. 
(D) NOTICE OF FAILURE.—If the Commis-
sioner finds that any State review or action 
under subparagraph (B)(i) fails to meet any of 
the standards set forth in subparagraph (C), 
the Commissioner may provide the applicable 
State with notice of such failure and the rea-
sons for such failure. 
(6) DIFFERENTIAL TREATMENT PROHIBITED.— 
A State may not treat a national insurer or a State 
insurer entering into a bulk transfer agreement with 
a national insurer or a State insurer, or any affiliate 
or subsidiary of such insurer, differently than any 
other insurer operating in that State. 
(7) NO DELEGATION PERMITTED.—The Com-
missioner may not delegate to any insurance self- 
regulatory organization any authority conferred 
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under this subsection with respect to any bulk trans-
fer involving a national insurer. 
(8) DEFINITIONS.—In this subsection: 
(A) ASSUMING INSURER.—The term ‘‘as-
suming insurer’’ means the insurer that pur-
chases or otherwise acquires existing insurance 
policies from another insurer by bulk transfer. 
(B) BLOCK
OF
BUSINESS.—The term 
‘‘block of business’’ means all those insurance 
policies of an insurer under a particular policy 
form. 
(C) BULK
TRANSFER.—The term ‘‘bulk 
transfer’’— 
(i) means the transfer by an insurer 
to another insurer of existing insurance 
policies constituting all or substantially all 
of one or more of its lines of business or 
blocks of business; and 
(ii) does not include— 
(I) any sale in which the trans-
ferring insurer retains direct or indi-
rect control of the assets supporting 
the transferred insurance policies; 
(II) any transaction effected by 
an agreement under which the trans-
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ferring insurer continues to remain di-
rectly liable to the policyholders under 
the insurance policies; 
(III) the substitution of one in-
surer for another upon the expiration 
of insurance coverage pursuant to 
statutory or contractual requirements 
and the issuance of a new policy of in-
surance by that insurer; 
(IV) the transfer of policies of in-
surance pursuant to merger or con-
solidation of two or more insurers to 
the extent that those transactions are 
regulated by statute; 
(V) any transaction effected by 
an insurer subject to a judicial order 
of receivership, liquidation, or reha-
bilitation; or 
(VI) any transfer of liabilities 
from one insurer to another under a 
single group insurance policy upon the 
request of the group policyholder. 
(D) PERMITTED
NATIONAL
INSURER.— 
The 
term 
‘‘permitted 
national 
insurer’’ 
means— 
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(i) a State insurer that has recently 
converted to a national insurer under sec-
tion 303, as determined by the Commis-
sioner; or 
(ii) a national insurer that has been 
issued a charter under section 301 for a 
new line of insurance, as determined by 
the Commissioner. 
(E) 
TRANSFERRED
INSURANCE
POLI-
CIES.—The term ‘‘transferred insurance poli-
cies’’ means the insurance policies that are sub-
ject to the bulk transfer. 
(F) TRANSFERRING INSURER.—The term 
‘‘transferring insurer’’ means the insurer in 
privity of contract with the policyholders under 
the existing insurance policies that are subject 
to the bulk transfer. 
(g) EFFECT OF STATE LAW.—No State may prevent 
or restrict a national insurer or national insurance agency 
from exercising any power conferred by this section or by 
any regulation authorized by this section. 
SEC. 305. CHARTERING COMMENCEMENT DATE. 
The Commissioner may not charter a national insurer 
or national insurance agency until the Commissioner noti-
fies Congress that the Office is operational and that all 
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regulations necessary to govern the organization, forma-
tion, operations, and supervision of such insurers and 
agencies have been issued in final or interim final form. 
The Commissioner shall provide a notification to Congress 
not later than 2 years after the date of the enactment of 
this Act. 
Subtitle B—Financial, Policy and 
Market Conduct Standards 
SEC. 311. FINANCIAL STANDARDS. 
The Commissioner shall establish, by regulation, 
standards for national insurers and national insurance 
agencies on— 
(1) accounting and disclosure; 
(2) auditing; 
(3) risk management; 
(4) internal controls; 
(5) investments; 
(6) capital and liquidity; 
(7) actuarial opinions; 
(8) reinsurance; and 
(9) such other matters as the Commissioner 
deems necessary to ensure the financial stability and 
integrity of national insurers and national insurance 
agencies. 
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SEC. 312. POLICY STANDARDS. 
(a) POLICY STANDARDS.—The Commissioner shall 
establish, by regulation, general policy requirements and 
requirements for different categories of policies issued by 
national insurers. 
(b) FILING REQUIREMENT.—No national insurer 
may issue a policy until the form of the policy has been 
filed with the Commissioner. The form shall be accom-
panied by written certification by an officer of the national 
insurer that the policy complies with requirements estab-
lished under subsection (a). 
(c) LAW APPLICABLE.— 
(1) LAW SPECIFIED BY PARTIES.—The provi-
sions of any insurance policy or other product of a 
national life insurer shall be interpreted in accord-
ance with the law of the jurisdiction specified by the 
parties to the insurance policy or other product if 
the parties have specified the law of— 
(A) the jurisdiction in which the main of-
fice of the national life insurer is located; 
(B) the jurisdiction in which the principal 
place of business of the national life insurer is 
located; or 
(C) the jurisdiction in which the insurance 
policy or other product is delivered. 
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