IB
Union Calendar No. 150
103D CONGRESS
1ST SESSION
H. R. 1188
[Report No. 103–270]
To provide for disclosures for insurance in interstate commerce.
IN THE HOUSE OF REPRESENTATIVES
MARCH 3, 1993
Mrs. COLLINS of Illinois introduced the following bill; which was referred to
the Committee on Energy and Commerce
SEPTEMBER 29, 1993
Additional sponsors: Mr. TOWNS, Mr. REYNOLDS, Mr. OWENS, Mr. DELLUMS,
Mr. GENE GREEN of Texas, Mr. FRANKS of Connecticut, Mrs. CLAYTON,
Mr. CLAY, Mr. JEFFERSON, Miss COLLINS of Michigan, Mr. SERRANO,
Mr. RANGEL, Mr. BLACKWELL, Mr. FOGLIETTA, Mr. FILNER, Mrs.
MEEK, Mr. DIXON, Mr. HASTINGS, Mr. FROST, Ms. EDDIE BERNICE
JOHNSON of Texas, Mr. WATT, Mr. MFUME, Ms. NORTON, Mr. MARKEY,
Mr. GUTIERREZ, and Mr. TUCKER
SEPTEMBER 29, 1993
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on March 3, 1993]
A BILL
To provide for disclosures for insurance in interstate
commerce.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Anti Redlining in Insur-
ance Disclosure Act’’.
SEC. 2. FINDINGS AND CONSTRUCTION.
(a) FINDINGS.—The Congress finds that—
(1) disparities in property and casualty insur-
ance coverage provided by insurers engaged in inter-
state commerce between areas of different incomes and
racial composition could adversely affect interstate
commerce and the cost and availability of insurance
for consumers, and
(2) appropriate disclosures of information by in-
surers would benefit consumers and insurance regu-
lators.
(b) CONSTRUCTION.—Nothing in this Act is intended
to, nor shall it be construed to, encourage unsound under-
writing practices.
SEC. 3. MAINTENANCE OF INFORMATION AND PUBLIC DIS-
CLOSURE.
(a) GENERAL RULE.—
(1) DESIGNATED INSURERS.—
(A) IN GENERAL.—Except as provided by
subsection (b)(7), each designated insurer shall,
in accordance with subsection (b), annually com-
pile, submit to the Secretary, and make available
to the public for each calendar year and for des-
ignated lines of insurance in a designated
MSA—
(i) the total number of policies, total
exposure units (in car years and house
years), and total earned premium of insur-
ance policies by designated line which were
issued by such insurer and the new written
exposure units, exposure units canceled, and
the exposure units not renewed by such in-
surer, and
(ii) the number of licensed agents of
such insurer whose principal place of busi-
ness is located in such designated MSA and
the number within each 5-digit zip code in
such designated MSA and with respect to
each such agent, whether such agent is an
employee, independent contractor working
exclusively for such insurer, or an inde-
pendent contractor appointed to represent
such insurer on a non-exclusive basis.
(B) SUBMISSIONS AND AVAILABILITY.—The
information described in subparagraph (A) shall
be—
(i) submitted to the Secretary in ac-
cordance with subsection (d), and
(ii) made available to the public, in
accordance with subsection (b)(2), for in-
spection and copying, at cost, at the home
office of the insurer and at a central deposi-
tory, established under subsection (c), by the
Secretary.
(2) NON-DESIGNATED
INSURERS.—Except as
provided in subsection (b)(7), every insurer which
sells an insurance policy in a designated line of in-
surance in a designated MSA and which is not a des-
ignated insurer in such MSA shall submit to the Sec-
retary for each calendar year in accordance with sub-
section (d) and regulations of the Secretary the total
exposure units (in car years and house years) of in-
surance policies in a designated line sold in such
MSA. With respect to such policies, the insurer shall
report the designated MSA where the insured risks
are located for which such insurance is issued and
within such MSA report the 5-digit zip code where
the risk is located.
(b) REQUIREMENTS.—
(1) CONTENT.—The information required to be
maintained and made available under subsection
(a)(1) shall be itemized in order to clearly and con-
spicuously disclose the policies, the exposure units,
and the premium amount for each line of insurance
for which information is required and be itemized by
the 5-digit zip code where the risks are located.
(2) AVAILABILITY TO THE PUBLIC.—The infor-
mation required to be maintained and made available
under subsection (a) shall be made available to the
public on a timetable determined by the Secretary but
not later than October 1 of the calendar year follow-
ing the calendar year for which the information is re-
quired to be made available, except that such infor-
mation shall not be made available to the public until
it is available in its entirety but it shall be made
available if not all the information required to be re-
ported is available on such October 1 or on the date
determined by the Secretary.
(3) SPECIFICATION OF DATA.—
(A) IN GENERAL.—With respect to informa-
tion which is required to be maintained and
made available under subsection (a)(1), the Sec-
retary shall by regulation establish specifications
for the collection and public reporting of such in-
formation with respect to the following lines of
insurance: private passenger automobile, home-
owners, and dwelling fire and allied lines. The
specifications shall—
(i) provide that information be aggre-
gated among similar policyholders and re-
ported on that basis,
(ii) be designed to collect information
with respect to the availability, cost, and
type of insurance coverage between and
among various geographic areas,
(iii) detail what data elements should
be collected,
(iv) provide for the collection of infor-
mation on an individual insurer basis,
(v) minimize burdens on insurance
agents, including independent insurance
agents,
(vi) provide the data required by
clause (ii) with the least burden on insur-
ers, particularly small insurers,
(vii) take into account the types of
data collected under the Home Mortgage
Disclosure Act of 1975,
(ii) the need for further data collection
requirements to evaluate the availability,
cost, and type of such coverage or to help
ensure the availability of such coverage.
(5) PERIOD
OF
MAINTENANCE.—Any informa-
tion required to be compiled and made available
under subsection (a) shall be maintained and made
available for a period of 3 years after the close of the
first year during which such information is required
to be maintained and made available.
(6) FORMAT FOR DISCLOSURES.—Subject to sub-
section (c), the Secretary shall prescribe a standard
format for making information available as required
by subsection (a). Such format shall encourage the
submission of information in a form readable by a
computer.
(7) EXEMPTION.—
(A) SECRETARIAL ACTION.—If the Secretary
determines that a State has enacted a law, or
otherwise implemented a requirement under
which—
(i) insurers operating in that State are
subject to disclosure requirements on a 5-
digit zip code basis substantially similar to
those of subsection (a),
(ii) there are adequate provisions for
enforcement, and
(iii) the information disclosed under
the State law or requirement is made avail-
able to the Secretary and the public in a
manner similar to other information dis-
closed under subsection (a),
then the Secretary shall by regulation exempt in-
surers operating in that State from complying
with the requirements of subsection (a) with re-
spect to that State’s portions of the designated
MSA’s. If the Secretary determines that the State
law or requirement no longer meets the criteria
of clauses (i) through (iii) or is no longer in ef-
fect, the Secretary shall by regulation revoke the
exemption.
(B) UNITED STATES PROGRAM.—Reporting
shall not be required under subsection (a) with
respect to insurance provided by a program un-
derwritten or administered by the United States.
(c) PUBLIC ACCESS SYSTEM.—The Secretary shall im-
plement a system to facilitate public access to information
required to be made available to the public under subsection
(a). Such system shall include arrangements for a central
depository of information in each designated MSA and for
a telephone number which can be used by the public, at
cost, to request such information. Statements shall be made
available to the public for inspection and copying at such
central depository of information for all designated insurers
within such MSA. The Secretary shall also make copies of
such statements available in forms readable by widely used
personal computers, such as in disc format. The Secretary
may charge a fee for such information, which may not ex-
ceed the amount, determined by the Secretary, that is equal
to the cost of reproducing the information.
(d) SUBMISSION TO SECRETARY.—With respect to the
information required to be submitted under subsection (a)
to the Secretary, the Secretary shall develop regulations pre-
scribing the format and method for submitting such infor-
mation. Such regulations shall ensure uniformity among
insurers, to the extent practicable, in the format used for
reporting, including the definitions of data elements. Any
reporting insurer may submit in writing to the Secretary
such additional data or explanations as it deems relevant
to the decision by such insurer to sell insurance.
SEC. 4. DESIGNATIONS.
(a) DESIGNATIONS BY THE SECRETARY.—
(1) DESIGNATIONS
OF
MSA’S.—The Secretary
shall designate the MSA’s for which reporting is re-
quired under section 3(a). The Secretary shall des-
ignate the 25 MSA’s having the largest population.
(2) DESIGNATION OF INSURERS.—For each MSA
designated under paragraph (1), the Secretary shall
take the following actions:
(A) The Secretary shall designate the insur-
ers transacting insurance business in such MSA
for which reporting is required under section
3(a). At a minimum, the Secretary shall des-
ignate the 25 insurers in such MSA having the
largest premium volume in the designated lines
of insurance in each State in which such MSA
is located.
(B) In addition to the insurers designated
under subparagraph (A), the Secretary shall also
designate any entity primarily providing insur-
ance in a designated line of insurance as part of
a residual market established by State law.
(C) The Secretary shall also designate, in
addition to the insurers designated under sub-
paragraphs (A) and (B), insurers who specialize
in selling insurance in urban areas, including
surplus lines insurers.
(D) The Secretary shall also designate, in
addition to the insurers designated under sub-
paragraph (A), (B), and (C) insurers such that
insurers representing at least 80 percent of the
premium volume in each State in which such
MSA is located in the designated line of insur-
ance are designated in such MSA. The Secretary
may not designate additional insurers under this
subparagraph if their market share in the des-
ignated line of insurance in the applicable
States, as measured by premium volume in each
State in which such MSA is located, is under 1
percent.
(E) In addition to the insurers designated
under subparagraph (A), (B), (C), and (D) the
Secretary may by regulation designate addi-
tional insurers in a MSA if the designation of
additional insurers is necessary to provide valid
data with respect to the availability, cost, and
type of insurance in the MSA.
(F) The Secretary shall revoke the designa-
tion of an insurer designated under subpara-
graph (A) as follows: If such designated insurer
has a market share in a designated line of insur-
ance in a MSA, as measured by premium vol-
ume in each State in which such MSA is located,
of under 1 percent, the Secretary shall revoke the
designation of such insurer beginning with the
insurer with the smallest market share of such
insurance if the remainder of the designated in-
surers have a market share of at least 75 percent
of such insurance as measured by premium vol-
ume in each State in which such MSA is located.
In addition, the Secretary may revoke the des-
ignation of any insurer designated under sub-
paragraph (A) with a market share in a des-
ignated line of insurance in a MSA, as measured
by premium volume in each State in which such
MSA is located, of under 1 percent if such des-
ignation has not been revoked under this sub-
paragraph and if such insurer primarily sells
insurance in rural areas of such MSA.
(G) For purposes of this paragraph, insur-
ers which are affiliated or are members of the
same group shall be considered together as one
insurer.
(3) DESIGNATION OF LINES OF INSURANCE.—For
each MSA designated under paragraph (1) the follow-
ing are the designated lines of property and casualty
insurance for which reporting is required under sec-
tion 3:
(A) Private passenger automobile insurance.
(B) Homeowners insurance.
(C) Dwelling fire and allied lines of insur-
ance.
(4) TIMING OF DESIGNATIONS.—
(A) INITIAL DESIGNATIONS.—The Secretary
shall make initial designations required by para-
graphs (1), (2), and (3) no later than July 1 of
the year preceding the first year for which re-
porting is required under section 3. Such initial
designations shall be effective for 5 calendar
years from the date of designation.
(B) 
SUBSEQUENT
DESIGNATIONS.—Not
later than July 1 of the year preceding the fifth
year after a designation under subparagraph (A)
or this subparagraph, the Secretary shall make
another designation to be effective upon the expi-
ration of such 5 years and such designation shall
be effective for 5 calendar years from the date of
designation.
(C) NOTICE.—The Secretary shall notify
persons involved in the designations no later
than the July 15 which follows the designation.
(b) OBTAINING INFORMATION.—The Secretary may ob-
tain from insurers such information as the Secretary may
require to make designations under subsection (a).
SEC. 5. TASK FORCE ON AGENCY APPOINTMENTS.
(a) ESTABLISHMENT.—Within 90 days of the date of
the enactment of this Act, the Secretary shall establish a
task force on insurance agency appointments. The task force
shall—
(1) consist of representatives of appropriate Fed-
eral agencies, property and casualty insurance agents,
including specifically minority insurance agents,
property and casualty insurance companies, State in-
surance regulators, and public interest groups,
(2) have a significant representation from mi-
nority insurance agents, and
(3) be chaired by the Secretary or the Secretary’s
designee.
(b) FUNCTION.— The task force shall—
(1) review the problems inner city and minority
agents may have in receiving appointments to rep-
resent property and casualty insurance companies,
(2) review the practices of insurers in terminat-
ing agents and consider the effect such practices have
on the availability or cost of insurance, especially in
underserved areas, and
(3) recommend solutions to improve the ability
of inner city and minority insurance agents to mar-
ket property and casualty insurance products, includ-
ing steps property and casualty insurance companies
should take to increase their appointments of such
agents.
(c) REPORT AND TERMINATION.—The task force shall
report to the Committee on Energy and Commerce of the
House of Representatives and the appropriate Committee
of the Senate its findings under paragraphs (1) and (2)
of subsection (b) and its recommendations under paragraph
(3) of subsection (b) within 2 years after the date of the
enactment of this Act. The task force shall terminate when
the report is submitted to the Committees.
SEC. 6. IMPLEMENTATION OF SECTION 3.
(a) REGULATIONS.—The Secretary shall promulgate
such regulations as may be necessary to carry out section
3. Such regulations may—
(1) contain such classifications, differentiations,
or other provisions, and
(2) may provide for such adjustments and excep-
tions for any class of transactions,
as in the judgment of the Secretary are necessary and prop-
er to effectuate the purposes of such section and to prevent
circumvention or evasion thereof or to facilitate compliance
therewith.
(b) DATA COLLECTION CONTRACTOR.—The Secretary
may contract with a data collection contractor to carry out
the Secretary’s responsibilities under section 3 if the con-
tractor agrees to collect and make available the data pursu-
ant to the terms and conditions of such section. A statistical
agent may also be a data contractor.
(c) ROLE OF STATISTICAL AGENTS.—
(1) ACCEPTANCE OF DATA.—The Secretary and,
if applicable, the contractor under the subsection (b)
contract may accept data reported under section 3(a)
by a statistical agent acting on behalf of more than
one insurer if—
(A) the statistical plan used by the statis-
tical agent for the reporting of data on insurance
provides for the reporting of data in a manner
compatible with section 3(a),
(B) the statistical agent reports such data
on an individual insurer basis, and, at the dis-
cretion of the Secretary, on an aggregate basis,
(C) the statistical agent provides adequate
procedures to protect the integrity of the data re-
ported,
(D) the statistical agent has procedures in
place which ensure that data reported under the
statistical plan in connection with reporting
under this Act and submitted to the Secretary
are not subject to adjustment by the statistical
agent or an insurer for reasons other than tech-
nical accuracy and conformance to the statistical
plan,
(E) the statistical agent ensures that the
data of one insurer is not subject to review by
other insurers before public availability, and
(F) the statistical agent provides for the re-
porting of data in a manner compatible with the
format prescribed by the Secretary under section
3(d).
(2) DISCONTINUANCE OF DATA ACCEPTANCE.—
The Secretary may, after providing an opportunity
for a hearing, discontinue accepting data reported
under section 3(a) by a statistical agent acting on be-
half of more than one insurer if the Secretary deter-
mines the requirements for acceptance of data in
paragraph (1) are no longer met.
(d) ROLE OF GAO.—The Comptroller General shall
have the authority to review and audit any data collection
and reporting performed under section 3, whether by the
Secretary, the contractor under the subsection (b) contract,
or a statistical agent, to ensure that the integrity of the
data collected and reported is protected.
(e) BURDENS ON INSURANCE AGENTS.—In prescribing
regulations under this Act, the Secretary shall take into
consideration the administrative, paperwork, and other
burdens on insurance agents, including independent insur-
ance agents, involved in complying with the requirements
of this Act and shall minimize the burdens imposed by such
requirements with respect to such agents.
SEC. 7. RELATION TO STATE LAWS.
This Act does not annul, alter, or affect, or exempt the
obligation of any insurer subject to this Act to comply with
the laws of any State or subdivision thereof with respect
to public disclosure and recordkeeping.
SEC. 8. COMPILATION OF AGGREGATE DATA.
(a) SCOPE OF DATA AND TABLES.—The Secretary
shall compile each year, for each MSA, data aggregated by
5-digit zip code for all insurers who are subject to section
3 or who are exempt from section 3 under subsection
(b)(7)(A) of such section. The Secretary shall also produce
tables indicating, for each MSA, insurance policies aggre-
gated for various categories of 5-digit zip codes grouped ac-
cording to location, age of property, income level, and racial
characteristics of neighborhood.
(b) 
AGGREGATION
OF
INFORMATION.—Statistical
agents may aggregate the data of insurers that report to
them and may provide such information to the Secretary.
The Secretary may also provide the individual company
data submitted by insurers to statistical agents for aggrega-
tion.
(c) AVAILABILITY TO PUBLIC.—The data compiled and
the tables produced pursuant to subsection (a) shall be made
available to the public on a timetable determined by the
Secretary but not later than October 1 of the year following
the calendar year on which the data and tables are based.
SEC. 9. ENFORCEMENT.
(a) CIVIL PENALTIES.—Any insurer who is deter-
mined by the Secretary, after providing opportunity for a
hearing on the record, to have violated the requirements of
section 3 shall be subject to a civil penalty of not to exceed
$5,000 for each day during which such violation continues.
(b) INJUNCTION.—The Secretary may bring an action
in an appropriate United States district court for appro-
priate declaratory and injunctive relief against any insurer
who violates the requirements of section 3.
(c) INSURER LIABILITY.—An insurer shall be respon-
sible under subsections (a) and (b) for any violation of a
statistical agent acting on behalf of the insurer.
SEC. 10. SUNSET.
(a) EXPIRATION.—Except as provided in subsection
(b), this Act shall not be in effect after the expiration of
5 years from its effective date. Prior to the expiration of
4 years from such date, the Secretary shall report to the
Energy and Commerce Committee of the House of Rep-
resentatives and the appropriate committee of the Senate—
(1) the quality of data received under section 3
and the effectiveness of the data requirement, includ-
ing the relation between the cost of such data gather-
ing and the benefits from having such data available,
(2) the appropriateness of the geographic data
reporting units,
(3) the need for continued reporting by the des-
ignated insurers in urban areas,
(4) the efforts of insurers to meet the insurance
needs of minority and low-income neighborhoods, and
(5) such other information as the Secretary de-
termines will assist in considering an extension of
this Act.
(b) EXTENSION.—Based on the Secretary’s report on
the need described in subsection (a)(3) and the information
described in subsection (a)(5), the Secretary may extend
this Act for one period of 2 years.
SEC. 11. STUDIES.
(a) STUDY OF INFORMATION ON INSURANCE APPLI-
CANTS.—
(1) IN GENERAL.—The Secretary shall conduct a
study to determine the feasibility and utility of the
collection of information with respect to the character-
istics of applicants for insurance and reasons for re-
jection of applicants. The study shall examine the ex-
tent to which—
(A) oral applications or representations are
used by insurers and agents in making deter-
minations regarding whether or not to insure a
prospective insured,
(B) written applications are used by insur-
ers and agents in making determinations regard-
ing whether or not to insure a prospective in-
sured,
(C) written applications are submitted after
the insurer or agent has already made a deter-
mination to provide insurance to a prospective
insured or has determined that the prospective
insured is eligible for insurance, and
(D) prospective insureds are discouraged
from submitting applications for insurance
based, in whole or in part, on—
(i) the location of the risk to be in-
sured,
(ii) the race or ethnicity of the prospec-
tive insured,
(iii) the racial or ethnic composition of
the neighborhood in which the risk to be in-
sured is located, and
of the Senate no later than 2 years after the date of the
enactment of this Act.
SEC. 12. DEFINITIONS.
For purposes of this Act:
(1) The term ‘‘commercial insurance’’ means any
line of property and casualty insurance, except pri-
vate passenger automobile and homeowner’s insur-
ance.
(2) The term ‘‘designated insurer’’ means an in-
surer designated by the Secretary pursuant to section
4(a)(2).
(3) The term ‘‘designated line’’ means a line of
insurance specified in section 4(a)(3).
(4) The term ‘‘exposure units’’ means units in-
sured against risk of loss by an insurer and the term
‘‘units’’ means an automobile or the number of units
in a building.
(5) The term ‘‘insurer’’ means any corporation,
association, society, order, firm, company, partner-
ship, individual, or aggregation of individuals which
is subject to examination or supervision by any State
insurance regulator, or which is doing or represents
an insurance business. Such term does not include an
individual or entity which represents an insurer as
agent for the purpose of selling or which represents a
consumer as a broker for the purpose of buying insur-
ance.
(6) The term ‘‘MSA’’ means a Metropolitan Sta-
tistical Area or a Consolidated Metropolitan Statis-
tical Area and the term ‘‘designated MSA’’ means an
MSA designated by the Secretary pursuant to section
4(a)(1).
(7) The term ‘‘property and casualty insurance’’
means insurance against loss of or damage to prop-
erty, insurance against loss of income or extra ex-
pense incurred because of loss of, or damage to, prop-
erty, and insurance against third party liability
claims caused by negligence or imposed by statute or
contract.
(8) The term ‘‘residual market’’ means an as-
signed risk plan, joint underwriting association, or
any similar mechanism designed to make insurance
available to those unable to obtain it in the voluntary
market.
(9) The term ‘‘Secretary’’ means the Secretary of
Commerce.
(10) The term ‘‘State’’ means any State, the Dis-
trict of Columbia, the Commonwealth of Puerto Rico,
the Northern Mariana Islands, the Virgin Islands,
American Samoa, and the Trust Territory of the Pa-
cific Islands.
SEC. 13. EFFECTIVE DATE.
The requirements of this Act shall take effect with re-
spect to information on insurance described in section 3
and developed in and after calendar year 1995.
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