I
103D CONGRESS
2D SESSION
H. R. 5075
To ensure that sellers and underwriters of insurance are qualified and subject
to consumer protection requirements.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 22, 1994
Mr. DINGELL (for himself and Mrs. COLLINS of Illinois) introduced the
following bill; which was referred to the Committee on Energy and Commerce
A BILL
To ensure that sellers and underwriters of insurance are
qualified and subject to consumer protection requirements.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Insurance Sales and
Underwriting Consumer Protection Act of 1994’’.
SEC. 2. PURPOSE.
The purpose of this Act is to protect consumers and
potential consumers of insurance by ensuring that sellers
and underwriters of insurance in interstate commerce are
professionally qualified to sell and solicit insurance and
underwrite insurance and are subject to the consumer pro-
tection requirements applicable in the State in which the
insurance is sold, solicited, or underwritten.
SEC. 3. PROTECTION OF INSURANCE PURCHASERS.
(a) IN GENERAL.—A person may not sell or solicit
the purchase of insurance in a State unless that person
qualifies under and complies with all insurance regulatory
requirements applicable in the State in which the sale or
solicitation of insurance takes place.
(b) APPLICABLE
REQUIREMENTS.—The require-
ments covered under subsection (a) include—
(1) qualifying for and maintaining a license to
sell or solicit the purchase of insurance if such li-
cense is required by the insurance regulatory author-
ity of the State in which the insurance is sold or its
purchase solicited, and
(2) complying with all consumer protection re-
quirements, such as those applicable to disclosure,
unfair trade practices, and product advertising, that
apply to the marketing of insurance in the State in
which the insurance is sold or its purchase solicited.
(c) COVERED TRANSACTIONS.—The insurance sales
and solicitations covered by this section include the sales
and solicitations of any insurance sold, solicited, under-
written, or reinsured by an entity that operates in inter-
state commerce or is part of an entity any part of which
operates in interstate commerce.
SEC. 4. PROTECTION OF INSURANCE POLICYHOLDERS.
(a) IN GENERAL.—A person may not underwrite in-
surance in a State unless that person complies with all
insurance regulatory requirements applicable in the State
in which the insurance is underwritten.
(b) APPLICABLE
REQUIREMENTS.—The require-
ments covered under subsection (a) include—
(1) qualifying for and maintaining a license to
underwrite insurance if such license is required by
the insurance regulatory authority of the State in
which the insurance is underwritten;
(2) if a license is not required by the insurance
regulatory authority of the State in which the insur-
ance is underwritten, otherwise meeting any applica-
ble financial or other requirements imposed by the
State in which the insurance is underwritten; and
(3) complying with all consumer protection re-
quirements, such as those applicable to disclosure,
unfair trade practices, and product advertising, that
apply to underwriting insurance in the State in
which the insurance is underwritten.
(c) COVERED TRANSACTIONS.—The insurance under-
writing covered by this section includes any insurance un-
derwritten or reinsured by an entity that operates in inter-
state commerce or is part of an entity any part of which
operates in interstate commerce.
SEC. 5. SAVINGS CLAUSE.
The provisions of this Act do not alter or affect the
provisions of the Liability Risk Retention Act of 1986 (15
U.S.C. 3901 et seq.).
SEC. 6. ENFORCEMENT.
(a) IN GENERAL.—If the appropriate State does not
take action against a violation of the sales, solicitation,
and underwriting requirements covered by this Act, the
Department of Justice may file a civil action as to such
violation.
(b) STANDARD FOR A VIOLATION.—The determina-
tion of whether an act constitutes a violation under this
Act shall be made pursuant to the insurance laws and reg-
ulations of the applicable State.
(c) REMEDIES.—In an action under subsection (a),
the Department of Justice may ask for either or both of
the following:
(1) An order prohibiting that person from en-
gaging in the prohibited conduct.
(2) A civil fine of up to $1,000 for each viola-
tion.
SEC. 7. DEFINITION OF INSURANCE.
For purposes of this Act, the term ‘‘insurance’’
means any product defined or regulated as insurance by
the insurance regulatory authority of the State in which
the insurance is sold, solicited, or underwritten.
SEC. 8. EFFECTIVE DATE.
The requirements of this Act shall take effect 180
days after the date of enactment.
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