Union Calendar No. 166
103D CONGRESS
1ST SESSION
H. R. 1257
[Report No. 103–302, Parts I and II]
A BILL
To reconstitute the Federal Insurance Administra-
tion as an independent agency within the execu-
tive branch, provide for minimum standards ap-
plicable to foreign insurers and reinsurers provid-
ing insurance in the United States, make liquid-
ity assistance available to well-capitalized insur-
ance companies, and provide for public access to
information regarding the availability of insur-
ance, and for other purposes.
OCTOBER 28, 1993
Reported from the Committee on Energy and Commerce
with amendments, committed to the Committee of the
Whole House on the State of the Union, and ordered
to be printed
IB
Union Calendar No. 166
103D CONGRESS
1ST SESSION
H. R. 1257
[Report No. 103–302, Parts I and II]
To reconstitute the Federal Insurance Administration as an independent
agency within the executive branch, provide for minimum standards appli-
cable to foreign insurers and reinsurers providing insurance in the United
States, make liquidity assistance available to well-capitalized insurance
companies, and provide for public access to information regarding the
availability of insurance, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 9, 1993
Mr. KENNEDY (for himself and Mr. GONZALEZ) introduced the following bill;
which was referred to the Committee on Banking, Finance and Urban Affairs
OCTOBER 19, 1993
Reported with amendments, referred to the Committee on Energy and Com-
merce for a period ending not later than November 19, 1993, for consid-
eration of such provisions of the bill and amendment as fall within the
jurisdiction of the committee pursuant to clause 1(h), rule X
[Strike out all after the enacting clause and insert the part printed in italic]
OCTOBER 28, 1993
Additional sponsors: Mr. HINCHEY, Ms. VELA´ZQUEZ, Mr. DIXON, Mr. FIELDS
of Louisiana, Mr. MFUME, Mr. GUTIERREZ, Ms. ESHOO, and Mr. DE LUGO
OCTOBER 28, 1993
Reported from the Committee on Energy and Commerce with amendments,
committed to the Committee of the Whole House on the State of the
Union, and ordered to be printed
[Omit the part in italic black brackets and insert the part printed in boldface roman]
[For text of introduced bill, see copy of bill as introduced on March 9, 1993]
A BILL
To reconstitute the Federal Insurance Administration as an
independent agency within the executive branch, provide
for minimum standards applicable to foreign insurers
and reinsurers providing insurance in the United States,
make liquidity assistance available to well-capitalized in-
surance companies, and provide for public access to in-
formation regarding the availability of insurance, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
ƒSECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
ƒ(a) SHORT TITLE.—This Act may be cited as the
‘‘Insurance Consumer Protection Act’’.
ƒ(b) TABLE OF CONTENTS.—
ƒSec. 1. Short title and table of contents.
ƒTITLE I—CERTIFICATION OF FOREIGN INSURERS
ƒSubtitle A—Certification of Foreign Direct Insurers
ƒSec. 101. Requirement for conducting direct insurance business.
ƒSec. 102. Application.
ƒSec. 103. Certification procedure.
ƒSec. 104. Requirements for foreign direct insurers.
ƒSec. 105. Financial statements.
ƒSec. 106. Authority to establish risk-based capital standards.
ƒSubtitle B—Certification of Foreign Reinsurers
ƒSec. 121. Requirement for claiming credit for reinsurance.
ƒSec. 122. Application.
ƒSec. 123. Certification procedure.
ƒSec. 124. Requirements for foreign reinsurers.
ƒSec. 125. Financial statements.
ƒSec. 126. Authority to establish risk-based capital standards.
ƒSubtitle C—Enforcement
ƒSec. 141. Examinations of foreign insurers.
ƒSec. 142. Termination and suspension of certification.
ƒSec. 143. Cease-and-desist orders.
ƒSec. 144. Actions by State insurance regulators to enforce requirements applica-
ble to foreign insurers.
ƒSec. 145. Criminal penalties.
ƒSec. 146. Notification to State insurance regulators and coordination with for-
eign insurance regulators.
ƒSec. 147. National insurance intelligence database.
ƒSubtitle D—General Provisions
ƒSec. 161. Transfer of information with State insurance regulators.
ƒSec. 162. National Advisory Council of State Insurance Regulators.
ƒSec. 163. GAO study of accounting principles.
ƒSec. 164. Fees.
ƒSec. 165. Forms.
ƒSec. 166. Determination of qualified financial institutions and control.
ƒSec. 167. Definitions.
ƒSec. 168. Relation to State laws.
ƒSec. 169. Effective dates.
ƒTITLE II—DISCLOSURE OF INSURANCE AVAILABILITY AND
INSURER INVESTMENT INFORMATION
ƒSec. 201. Short title.
ƒSec. 202. Findings and purposes.
ƒSec. 203. Establishment of general requirements to submit information.
ƒSec. 204. Reporting of noncommercial insurance information.
ƒSec. 205. Study of commercial insurance for residential properties and small
businesses.
ƒSec. 206. Reporting of bid, performance, and payment bonds for small busi-
nesses.
ƒSec. 207. Reporting of rural insurance information.
ƒSec. 208. Waiver of reporting requirements.
ƒSec. 209. Reporting by private mortgage insurers.
ƒSec. 210. Use of data contractor and statistical agents.
ƒSec. 211. Reporting of information regarding investments by insurers.
ƒSec. 212. Submission of information to Secretary and maintenance of informa-
tion.
ƒSec. 213. Compilation of aggregate information.
ƒSec. 214. Availability and access system.
ƒSec. 215. Designations.
ƒSec. 216. Improved methods and reporting on basis of other areas.
ƒSec. 217. Annual reporting period.
ƒSec. 218. Disclosures by insurers to applicants and policyholders.
ƒSec. 219. Enforcement.
ƒSec. 220. Reports.
ƒSec. 221. Task force on agency appointments.
ƒSec. 222. Studies.
ƒSec. 223. Exemption and relation to State laws.
ƒSec. 224. Regulations.
ƒSec. 225. Definitions.
ƒSec. 226. Effective date.
ƒTITLE I—CERTIFICATION OF
FOREIGN INSURERS
ƒSubtitle A—Certification of
Foreign Direct Insurers
ƒSEC. 101. REQUIREMENT FOR CONDUCTING DIRECT IN-
SURANCE BUSINESS.
ƒNo foreign insurer may engage in the business of in-
surance in any State by accepting or renewing United
States direct written insurance obligations after the date
provided in section 169(c) unless the foreign insurer is cer-
tified under this subtitle by the Secretary of the Treasury
as a certified foreign direct insurer. No person may assist
or facilitate, in any State, the acceptance or renewal of
United States direct written insurance obligations with a
foreign insurer unless the foreign insurer is so certified.
ƒSEC. 102. APPLICATION.
ƒThe Secretary shall provide for a foreign insurer to
apply, in the form and manner determined by the Sec-
retary, for certification under this subtitle as a certified for-
eign direct insurer.
ƒSEC. 103. CERTIFICATION PROCEDURE.
ƒ(a) IN GENERAL.—The Secretary may certify a for-
eign insurer as a certified foreign direct insurer for pur-
poses of this title only if—
the needs and protections of United States policyholders,
creditors, and the general public.
ƒSEC. 104. REQUIREMENTS FOR FOREIGN DIRECT INSUR-
ERS.
ƒ(a) IN GENERAL.—Each foreign direct insurer shall
comply with the following requirements:
ƒ(1) MINIMUM
NET
WORTH
AND
RISK-BASED
CAPITAL STANDARDS.—The foreign insurer shall have
a net worth in an amount not less than $15,000,000
(or 
an 
aggregate 
amount 
of 
not 
less 
than
$10,000,000,000, in the case of a group of incor-
porated insurers under common administration), or
such higher amount as the Secretary may require
based on the amount of business transacted by the for-
eign insurer and the aggregate amount of the United
States direct written insurance obligations of the for-
eign insurer and shall comply with any risk-based
capital standards established by the Secretary under
section 106. The Secretary shall determine the net
worth of a foreign insurer and may adjust the value
of any assets and liabilities of an insurer, for pur-
poses of this paragraph, in accordance with the ac-
counting standards established by the Secretary pur-
suant to section 105(d).
ƒ(2) TRUST FUND.—The foreign insurer shall es-
tablish and, at all times, maintain at a qualified fi-
nancial institution in the United States an irrev-
ocable trust, which shall meet the following require-
ments:
ƒ(A) AVAILABILITY
OF
PROCEEDS.—The
trust instrument shall provide that contested
claims shall be valid and enforceable upon the
final order of any court of competent jurisdiction
in the United States. Legal title to assets of the
trust shall be vested in the trustees of the trust
and all assets shall be available to meet the Unit-
ed States direct written insurance obligations of
the insurer, notwithstanding any other specified
use of the trust. The trust shall remain in effect
for such time as the insurer has outstanding ob-
ligations due under policies subject to the trust.
ƒ(B) BALANCE.—Except as provided in
subparagraph (C), the trust fund shall have a
balance, at all times, of cash, readily marketable
securities, and letters of credit, acceptable in the
determination of the Secretary, in an amount
not less than—
ƒ(i) for a single insurer, the greater
of—
ƒ(I) $2,500,000; or
ƒ(II) the lesser of (a) the aggre-
gate amount of the United States di-
rect written insurance obligations of
the insurer, or (b) $10,000,000;
ƒ(ii) for an insurer that is a group in-
cluding incorporated and individual unin-
corporated underwriters, the sum of—
ƒ(I) $50,000,000; and
ƒ(II) the aggregate amount of the
United States direct written insurance
obligations of the insurer plus an
amount equal to all other liabilities se-
cured by the trust; and
ƒ(iii) for an insurer that is a group of
incorporated insurers under common ad-
ministration, the sum of—
ƒ(I) $50,000,000; and
ƒ(II) the aggregate amount of the
United States direct written insurance
obligations pursuant to insurance con-
tracts subscribed to by members of the
group and issued by or through each
member of the group.
ƒ(C) UNSAFE FINANCIAL CONDITIONS.—The
Secretary may increase the minimum balance
required to be maintained under subparagraph
(B) by an insurer, on a case-by-case basis, if the
Secretary determines that such insurer is operat-
ing in a manner likely to result in an unsafe or
unsound financial condition.
The Secretary may develop and require the use of
standard forms, agreements, and contracts for use in
establishing trusts under this paragraph. The trust
agreement shall require the qualified financial insti-
tution to serve at all times as trustee and shall pro-
vide that the Secretary shall have access to such books
and records regarding the trust fund as may be nec-
essary to conduct audits required under section
141(c). Notwithstanding any Federal or State law, if
the insurer is placed in supervision, rehabilitation, or
liquidation, or any equivalent status by the State or
country of its domicile, or the Secretary determines
pursuant to regulations issued by the Secretary that
the condition of the insurer is such that the further
transaction of business by the insurer will be hazard-
ous to United States policyholders or creditors, or to
the public, then the Secretary shall have the sole au-
thority for distributing the proceeds of any trust fund
under this paragraph for payment of the valid claims
of the United States policyholders of the insurer and
other claimants under such policies. The trustees of
the trust shall submit a report in writing to the Sec-
retary annually, not later than the date established by
the Secretary by regulation. The report shall state the
balance of the trust, list the investments of the trust
for the 12-month period for which the report is made,
and certify the date of the termination of the trust
with respect to new business (if planned) or certify
that the trust will not expire before the date occurring
12 months after the expiration of the 12-month period
for which the report is made.
ƒ(3) AGENT
FOR
SERVICE
OF
PROCESS.—The
foreign insurer shall appoint and maintain, in the
form and manner required by the Secretary, an agent
in the United States upon whom process may be
served in any action, suit, or proceeding.
ƒ(4) JURISDICTION OF COURTS.—The foreign in-
surer shall agree to submit to the jurisdiction of any
court of the United States or of any State, of com-
petent jurisdiction, and to be fully bound by its deci-
sion.
ƒ(5) REGULATION
BY
DOMICILE.—The foreign
insurer shall annually submit to the Secretary a cer-
tificate of compliance, certificate of good standing, or
equivalent documentation (as determined by the Sec-
retary) properly attested by the foreign insurance reg-
ulator for the domicile of the insurer, evidencing au-
thority under the laws of the domicile of the insurer
to engage in the business of insurance in such domi-
cile.
ƒ(6) BIOGRAPHICAL INFORMATION.—The foreign
insurer shall annually submit to the Secretary, in the
form and manner determined by the Secretary—
ƒ(A) biographical information on all senior
officers and directors of the insurer that dem-
onstrates a level of competency, experience, and
integrity sufficient to indicate that permitting
the insurer to conduct business in the United
States would not be contrary to the interests of
United States policyholders, creditors, or the gen-
eral public; and
ƒ(B) biographical, management, and oper-
ational information, as the Secretary shall pro-
vide, on any persons that control the insurer.
ƒ(7) INSURANCE EXPERIENCE.—The foreign in-
surer shall—
ƒ(A) have been actively and continuously
engaged in the business of insurance as a direct
insurer for a period of not less than 3 years end-
ing upon the submission of an application under
section 102;
ƒ(B) be a wholly owned subsidiary of an
insurer actively and continuously engaged in the
business of insurance as a direct insurer for a
period of not less than 3 years ending upon the
submission of an application under section 102;
or
ƒ(C) be the continuing corporation result-
ing from a merger or consolidation of insurers,
at least one of which has been actively and con-
tinuously engaged in the business of insurance as
a direct insurer for a period of not less than 3
years ending upon the submission of an applica-
tion under section 102.
ƒ(8) OTHER.—The foreign insurer shall meet
any other requirements relating to the solvency or ca-
pacity, or safety and soundness of the business prac-
tices of the insurer, that are established by the Sec-
retary as the Secretary may determine are reasonably
necessary to protect the interests of United States pol-
icyholders, creditors, or the general public.
ƒ(b) WAIVER.—The Secretary may reduce or waive
any of the requirements under paragraphs (3) through (8)
of subsection (a) with respect to a foreign insurer if the
Secretary determines on a case-by-case basis that the for-
eign insurer has demonstrated, to the satisfaction of the Sec-
retary, experience, competence, and capacity to safely and
soundly engage in the business of insurance in the United
States.
ƒSEC. 105. FINANCIAL STATEMENTS.
ƒ(a) REQUIREMENT.—
ƒ(1) FINANCIAL
STATEMENTS
SUBMITTED
TO
FOREIGN REGULATORS.—Each foreign direct insurer
shall—
ƒ(A) upon application under section 102
for certification as a certified foreign direct in-
surer, and
ƒ(B) in the case of a certified foreign direct
insurer, on an annual basis, for purposes of re-
newing certification,
submit to the Secretary the financial statements of the
insurer, and of any persons that control the insurer,
that are required to be submitted to the foreign insur-
ance regulators for the insurer.
ƒ(2) INDEPENDENT
AUDIT.—Each financial
statement submitted to the Secretary under para-
graph (1) shall include an audit conducted by a inde-
pendent certified public accountant or other qualified
States an irrevocable trust, which shall meet the
following requirements:
ƒ(i) AVAILABILITY
OF
PROCEEDS.—
The trust instrument shall provide that con-
tested claims shall be valid and enforceable
upon the final order of any court of com-
petent jurisdiction in the United States.
Legal title to assets of the trust shall be vest-
ed in the trustees of the trust and all assets
shall be available to meet the United States
reinsurance obligations of the reinsurer,
notwithstanding any other specified use of
the trust. The trust shall remain in effect
for such time as the insurer has outstanding
obligations due under reinsurance obliga-
tions subject to the trust.
ƒ(ii) BALANCE.—Except as provided
in subparagraph (C), the trust fund shall
have a balance, at all times, of cash, readily
marketable securities, and letters of credit,
acceptable in the determination of the Sec-
retary, in an amount not less than—
ƒ(I) for a single assuming in-
surer, $5,000,000;
ƒ(II) for an insurer that is a
group including incorporated and in-
dividual unincorporated underwriters,
the sum of $100,000,000 and the aggre-
gate amount of the United States rein-
surance obligations of the insurer, plus
an amount equal to all other liabilities
secured by the trust; and
ƒ(III) for an insurer that is a
group of incorporated insurers under
common administration, the sum of
$100,000,000 
and 
the 
aggregate
amount of the United States reinsur-
ance obligations pursuant to reinsur-
ance contracts subscribed to by mem-
bers of the group and issued by or
through each member of the group.
ƒ(iii) 
UNSAFE
FINANCIAL
CONDI-
TIONS.—The Secretary may increase the
minimum balance required to be main-
tained under subparagraph (B) by a rein-
surer, on a case-by-case basis, if the Sec-
retary determines that the reinsurer is oper-
ating in a manner likely to result in an un-
safe or unsound financial condition.
The Secretary may develop and require the use
of standard forms, agreements, and contracts for
use in establishing trusts under this paragraph.
The trust agreement shall require the qualified
financial institution to serve at all times as
trustee and shall provide that the Secretary shall
have access to such books and records regarding
the trust fund as may be necessary to conduct
audits required under section 141(c). Notwith-
standing any Federal or State law, if the rein-
surer is placed in supervision, rehabilitation, or
liquidation, or any equivalent status by the
State or country of its domicile, or the Secretary
determines pursuant to regulations issued by the
Secretary that the condition of the reinsurer is
such that the further transaction of business by
the reinsurer will be hazardous to the interests of
United States policyholders or creditors, or to the
public, then the Secretary shall have the sole au-
thority for distributing the proceeds of any trust
fund under this subparagraph for payment of
valid claims of the United States reinsurance ob-
ligations of the reinsurer and other claimants
under such policies. The trustees of the trust
shall submit a report in writing to the Secretary
annually, not later than the date established by
the Secretary by regulation. The report shall
state the balance of the trust, list the investments
of the trust for the 12-month period for which the
report is made, and certify the date of the termi-
nation of the trust with respect to new business
(if planned) or certify that the trust will not ex-
pire before the date occurring 12 months after
the expiration of the 12-month period for which
the report is made.
ƒ(B) OTHER SECURITY.—The foreign rein-
surer shall fund all United States reinsurance
obligations of the reinsurer in the form of—
ƒ(i) cash under the control of the
ceding United States insurer;
ƒ(ii) a clean, irrevocable, uncondi-
tional, and automatically renewable letter
of credit issued by a qualified financial in-
stitution and held by the ceding insurer; or
ƒ(iii) any other form of funding that
the Secretary determines is appropriate.
ƒ(3) AGENT
FOR
SERVICE
OF
PROCESS.—The
foreign reinsurer shall appoint and maintain, in the
form and manner required by the Secretary, an agent
in the United States upon whom process may be
served in any action, suit, or proceeding.
ƒ(4) JURISDICTION OF COURTS.—
ƒ(A) IN GENERAL.—The foreign reinsurer
shall agree to submit to the jurisdiction of any
court of the United States or of any State, of
competent jurisdiction, and to be fully bound by
its decision.
ƒ(B) ARBITRATION.—The provisions of sub-
paragraph (A) may not be construed to annul,
alter, or affect any obligation of the parties to a
reinsurance agreement to arbitrate or otherwise
resolve their disputes that is established by such
an agreement.
ƒ(5) REGULATION
BY
DOMICILE.—The foreign
reinsurer shall annually submit to the Secretary a
certificate of compliance, certificate of good standing,
or equivalent documentation (as determined by the
Secretary) properly attested by the foreign insurance
regulator for the domicile of the reinsurer, evidencing
authority under the laws of the domicile of the rein-
surer to engage in the business of reinsurance in such
domicile.
ƒ(6) BIOGRAPHICAL INFORMATION.—The foreign
reinsurer shall annually submit to the Secretary, in
the form and manner determined by the Secretary—
ƒ(A) biographical information on all senior
officers and directors of the reinsurer that dem-
onstrates a level of competency, experience, and
integrity sufficient to indicate that permitting
the reinsurer to conduct business in the United
States would not be contrary to the interests of
United States cedants, policyholders, creditors,
or the general public; and
ƒ(B) biographical, management, and oper-
ational information, as the Secretary shall pro-
vide, on any persons that control the reinsurer.
ƒ(7) INSURANCE EXPERIENCE.—The foreign re-
insurer shall—
ƒ(A) have been actively and continuously
engaged in the business of insurance as a rein-
surer for a period of not less than 3 years ending
upon the submission of an application under sec-
tion 122;
ƒ(B) be a wholly owned subsidiary of an
insurer and continuously engaged in the business
of insurance as a reinsurer for a period of not
recommendations of the Comptroller General con-
tained in the report under such section, and (D) the
specific characteristics of the insurance business and
reinsurers.
ƒSEC. 126. AUTHORITY TO ESTABLISH RISK-BASED CAPITAL
STANDARDS.
ƒ(a) AUTHORITY.—The Secretary may, by regulation,
establish risk-based capital standards under this section re-
quiring a foreign reinsurer to have a net worth appropriate
to the underwriting, financial, investment, and other risk
assumed by the insurer (as provided under subsection
(b)(1)), and may require, for certification as a certified for-
eign reinsurer, that a foreign reinsurer comply with such
standards.
ƒ(b) CONTENT.—
ƒ(1) IN
GENERAL.—Any risk-based capital
standards established under this section shall require
a foreign reinsurer to maintain an amount of capital
that is sufficient, as determined by the Secretary, for
the foreign reinsurer to maintain minimum capital
amounts taking into account the nature and type of
risks assumed by the insurer, the premium volume of
risks assumed by the reinsurer, the composition, qual-
ity, duration, and liquidity of the reinsurer’s invest-
ment portfolio, and the adequacy of the capital re-
serves of the reinsurer, and such other risks as the
Secretary considers appropriate.
ƒ(2) CAPITAL LEVELS.—Any risk-based capital
standards established under this section may include
various capital levels designed to identify the serious-
ness of any capital inadequacies of a foreign rein-
surer.
ƒ(3) ENFORCEMENT.—The Secretary may pro-
vide that if the amount of capital maintained by a
foreign reinsurer does not meet or exceed the amount
required to be maintained under the various risk-
based capital standards, the Secretary may take ac-
tions under subtitle C to enforce such requirements
and may take other actions as the Secretary considers
appropriate to facilitate compliance with such re-
quirements.
ƒSubtitle C—Enforcement
ƒSEC. 141. EXAMINATIONS OF FOREIGN INSURERS.
ƒ(a) IN GENERAL.—The Secretary shall establish
standards under this section for examinations of foreign in-
surers to determine their financial condition.
ƒ(b) TIMING.—The Secretary—
ƒ(1) shall conduct an examination under this
section of each foreign insurer applying for certifi-
cation under section 102 or 122; and
ƒ(2) may conduct an examination of a foreign
insurer at any time the Secretary considers an exam-
ination reasonable and necessary to determine the fi-
nancial condition of the insurer.
ƒ(c) AUDITS OF TRUST FUNDS.—At any time the Sec-
retary considers an audit reasonable and necessary to deter-
mine the financial condition of the trust fund established
pursuant to section 104(2) or 124(2) by a foreign insurer,
the Secretary may—
ƒ(1) conduct an audit of the trust fund; or
ƒ(2) require the insurer to provide for an audit
of the trust fund, conducted by a independent certified
public accountant or other qualified independent
auditor in accordance with the accounting standards
established under section 105(d) or 125(d), as appli-
cable, and to submit the results of the audit to the
Secretary.
ƒ(d) ACCESS.—Each foreign insurer examined pursu-
ant to this section shall provide the Secretary access to any
books and records of the insurer for purpose of conducting
any examination or audit under this section.
ƒSEC. 142. TERMINATION AND SUSPENSION OF CERTIFI-
CATION.
ƒ(a) TERMINATION OF CERTIFICATION.—
ƒ(1) VOLUNTARY TERMINATION.—
ƒ(A) NOTICE.—Any foreign insurer may
terminate the insurer’s status as a certified for-
eign insurer if such foreign insurer provides
written notice to the Secretary of the insurer’s
intent to terminate such status not less than 90
days before the effective date of such termination.
ƒ(B) CESSATION OF BUSINESS.—With re-
spect to foreign insurers that terminate their cer-
tified status pursuant to this paragraph, the Sec-
retary shall issue regulations providing for—
ƒ(i) the termination, in an orderly
and appropriate manner, of the activities of
such insurers relating to the conducting of
the business of foreign direct insurance or
foreign reinsurance; and
ƒ(ii) the manner and timing for such
insurers to obtain access to the proceeds of
the trust fund of the insurer under section
104(2) or section 124(2), as applicable.
ƒ(2) INVOLUNTARY TERMINATION.—
ƒ(A) GROUNDS.—The Secretary may take
action under this paragraph to terminate the
status of a foreign insurer if the Secretary deter-
mines that—
ƒ(i) a certified foreign insurer or the
directors, officers, managers, or trustees of a
certified foreign insurer have engaged or are
engaging in unsafe or unsound practices in
conducting the business of the foreign in-
surer;
ƒ(ii) a certified foreign insurer is in
an unsafe or unsound condition to continue
operations as a certified foreign insurer; or
ƒ(iii) a certified foreign insurer or the
directors or trustees of a certified foreign in-
surer have violated any applicable law, reg-
ulation, order, condition imposed in writing
by the Secretary in connection with the cer-
tification of the foreign insurer as a cer-
tified foreign insurer, or any written agree-
ment entered into between the certified for-
eign insurer and the Secretary.
ƒ(B) NOTICE TO APPROPRIATE STATE IN-
SURANCE REGULATORS.—Upon any determina-
tion by the Secretary that the grounds exist to
take action under this paragraph, the Secretary
shall notify each appropriate State insurance
regulator of the determination and the facts and
circumstances on which such determination is
based, and consult with the regulator regarding
the action proposed to be taken.
ƒ(C) NOTICE TO FOREIGN INSURER.—Upon
any determination by the Secretary to take ac-
tion under this paragraph, the Secretary shall—
ƒ(i) serve written notice to the foreign
insurer of the Secretary’s intention to ter-
minate the certified status of the foreign in-
surer;
ƒ(ii) provide the foreign insurer with
a statement of the charges on the basis of
which the determination to terminate such
insurer’s certified status was made; and
ƒ(iii) notify the foreign insurer of the
date (not less than 30 days after notice
under this subparagraph) and place for a
hearing before the Secretary (or any person
designated by the Secretary) with respect to
the termination of the foreign insurer’s cer-
tified status.
ƒ(D) ISSUANCE OF ORDER.—If, on the basis
of the evidence presented at a hearing before the
Secretary (or any person designated by the Sec-
retary for such purpose) and the written findings
of the Secretary (or such person) with respect to
such evidence (which shall be conclusive), the
Secretary finds that any unsafe or unsound
practice or condition or any violation specified
in the notice to an foreign insurer under sub-
paragraph (C) has been established, the Sec-
retary may issue an order terminating the cer-
tified status of such foreign insurer effective as of
a date subsequent to such finding. In any such
hearing, all issues shall be determined on the
record subject to the requirements of section 554
of title 5, United States Code.
ƒ(E) APPEARANCE AND CONSENT TO TER-
MINATION.—Unless the foreign insurer appears
at the hearing by a duly authorized representa-
tive, the insurer shall be deemed to have con-
sented to the termination of its status as a cer-
tified foreign insurer and the Secretary may
issue an order terminating such status.
ƒ(F) JUDICIAL REVIEW.—Any foreign in-
surer whose certified status has been terminated
by order of the Secretary under this paragraph
shall have the right of judicial review of such
order only to the same extent as provided for the
review of orders under section 143(f).
ƒ(G) PUBLICATION OF NOTICE OF TERMI-
NATION.—The Secretary may publish notice of
termination under this paragraph and the for-
eign insurer shall give notice of such termination
to each of its policyholders and cedants at the
last address of record on the books of the foreign
insurer, in such manner and at such time as the
Secretary may consider to be necessary and may
order for the protection of policyholders and
cedants.
ƒ(b) TEMPORARY SUSPENSION OF CERTIFICATION.—
ƒ(1) IN GENERAL.—The Secretary may issue a
temporary order suspending the certified status of the
foreign insurer if, after consultation with the appro-
priate State insurance regulators, the Secretary initi-
ates a termination proceeding under subsection (a)(2)
and finds with respect to a certified foreign insurer
that—
ƒ(A) such foreign insurer (or any of its di-
rectors, officers, managers, or trustees) is engag-
ing in an unsafe or unsound practice in con-
ducting the business of the foreign insurer;
ƒ(B) such foreign insurer is in an unsafe or
unsound condition to continue operating as a
certified foreign insurer; or
ƒ(C) such foreign insurer (or any of its di-
rectors, officers, managers, or trustees) has vio-
lated any applicable law, rule, regulation, or
order, or any condition imposed in writing by
the Secretary, or any written agreement entered
into with the Secretary,
ƒ(2) EFFECTIVE
PERIOD.—Any order issued
under paragraph (1) shall become effective not earlier
than 10 days from the date of service upon the foreign
insurer and, unless set aside, limited, or suspended by
a court in proceedings authorized hereunder, such
temporary order shall remain effective and enforceable
until an order of the Secretary under subsection
(a)(2)(D) becomes final or until the Secretary dis-
misses the proceedings under subsection (a)(2).
ƒ(3) JUDICIAL REVIEW.—Before the expiration
of the 10-day period beginning on the date any tem-
porary order has been served upon a foreign insurer
under paragraph (1), such foreign insurer may apply
to the United States District Court for the District of
Columbia for an injunction setting aside, limiting, or
suspending the enforcement, operation, or effectiveness
of such order, and such court shall have jurisdiction
to issue such injunction.
ƒ(4) CONTINUATION OF APPLICABILITY OF RE-
QUIREMENTS.—A foreign insurer for which a tem-
porary order has been issued under this subsection
shall continue to be subject to the requirements of this
title applicable to foreign insurers and certified for-
eign insurers and the Secretary shall have the same
powers and rights with respect to such foreign insurer
as in the case of a certified foreign insurer, subject to
the administrative proceedings as provided in this
title.
ƒ(5) PUBLICATION
OF
ORDER.—A foreign in-
surer for which a temporary order has been issued
under this subsection shall give notice of the order to
each of its policyholders and cedants in such manner
and at such times as the Secretary may find to be
necessary and may order for the protection of the pol-
icyholders and cedants. If the Secretary determines
that the foreign insurer has not substantially com-
plied with the notice to policyholders and cedants re-
quired by the Secretary, the Secretary may provide
such notice in such manner as the Secretary may find
to be necessary and appropriate.
ƒ(c) FINAL
DECISIONS
TO
TERMINATE
CERTIFI-
CATION.—The Secretary shall make, and may not delegate,
any decision to—
ƒ(1) issue a temporary order terminating certifi-
cation of a foreign insurer; or
ƒ(2) issue a final order terminating certification
of a foreign insurer.
ƒSEC. 143. CEASE-AND-DESIST ORDERS.
ƒ(a) CEASE-AND-DESIST ORDERS.—
ƒ(1) GROUNDS FOR ISSUANCE.—The Secretary
may issue and serve upon a foreign insurer or an in-
surer-affiliated party a notice of charges under this
subsection if, in the determination of the Secretary—
ƒ(A) the foreign insurer or insurer-affili-
ated party is in an unsafe or unsound condition;
ƒ(B) the foreign insurer or insurer-affili-
ated party is engaging or has engaged, or the
Secretary has reasonable cause to believe that the
foreign insurer or insurer-affiliated party is
about to engage, in an unsafe or unsound prac-
tice in conducting the business of such foreign
insurer; or
ƒ(C) the foreign insurer or insurer-affili-
ated party is violating or has violated, or the
Secretary has reasonable cause to believe that the
foreign insurer or insurer-affiliated party is
about to violate, a law, rule, or regulation, or
any condition imposed in writing by the Sec-
retary or any written agreement entered into
with the Secretary.
ƒ(2) CONTENTS OF NOTICE OF CHARGES.—The
notice shall contain a statement of the facts constitut-
ing the unsafe or unsound condition, the unsafe or
unsound practice or practices, or the alleged violation
or violations, and shall fix a time and place at which
a hearing will be held to determine whether an order
to cease and desist therefrom should issue against the
foreign insurer or insurer-affiliated party.
ƒ(3) HEARING AND FAILURE TO APPEAR.—Such
hearing shall be fixed for a date not earlier than 30
days nor later than 60 days after service of such no-
tice unless an earlier or a later date is set by the Sec-
retary at the request of any party so served. Unless
the party or parties so served appears at the hearing
personally or by a duly authorized representative, the
party shall be deemed to have consented to the issu-
ance of the cease-and-desist order under paragraph
(4).
ƒ(4) ISSUANCE OF ORDER.—In the event of con-
sent under paragraph (3) or if, upon the record made
at any such hearing, the Secretary finds that any un-
safe or unsound condition, unsafe or unsound prac-
tice, or violation specified in the notice of charges has
been established, the Secretary may issue and serve
upon the foreign insurer or insurer-affiliated party
an order to cease and desist from any such violation
or practice. Such order may, by provisions which
may be mandatory or otherwise, require the foreign
insurer or insurer-affiliated party to cease and desist
from the same, and, further, to take affirmative action
as provided in subsection (c) to correct the conditions
resulting from any such condition, practice, or viola-
tion.
ƒ(5) 
EFFECTIVE
DATE.—A 
cease-and-desist
order under this subsection shall become effective upon
the date specified in the order or, if no date is speci-
fied, upon the expiration of the 30-day period begin-
ning upon service of the order upon the foreign in-
surer or other person concerned and shall remain ef-
fective and enforceable as provided therein, except to
such extent as it is stayed, modified, terminated, or
set aside by action of the Secretary or a reviewing
court.
ƒ(b) TEMPORARY CEASE-AND-DESIST ORDERS.—
ƒ(1) GROUNDS
FOR
ISSUANCE.—Whenever the
Secretary determines that the unsafe or unsound con-
dition, the unsafe or unsound practice or practices, or
the violation or threatened violation specified in the
notice of charges served upon a foreign insurer or in-
surer-affiliated party pursuant to subsection (a)(1),
or the continuation thereof, is likely—
ƒ(A) to cause insolvency or significant dis-
sipation of assets or earnings of the foreign in-
surer, or
ƒ(B) to weaken the condition of the foreign
insurer or otherwise prejudice the interests of its
policyholders or cedants prior to the completion
of the proceedings conducted pursuant to sub-
section (a),
the Secretary may issue a temporary order requiring
the foreign insurer or insurer-affiliated party to cease
and desist from any such violation or practice and to
take affirmative action to prevent or remedy such in-
solvency, dissipation, condition, practice, violation, or
prejudice pending completion of such proceedings.
ƒ(2) EFFECTIVE
DATE.—An order under this
subsection shall become effective upon service upon the
foreign insurer or such party participating in the
conduct of the affairs of the foreign insurer and, un-
less set aside, limited, or suspended by a court in pro-
ceedings authorized by paragraph (3), shall remain
effective and enforceable pending the completion of the
administrative proceedings pursuant to such notice
and until such time as the Secretary dismisses the
charges specified in such notice, or if a cease-and-de-
sist order is issued against the foreign insurer or such
party, until the effective date of such order.
ƒ(3) JUDICIAL REVIEW.—Within 10 days after a
foreign insurer or insurer-affiliated party has been
served with a temporary cease-and-desist order under
this subsection, the foreign insurer or such party may
apply to the United States District Court for the Dis-
trict of Columbia for an injunction setting aside, lim-
iting, or suspending the enforcement, operation, or ef-
fectiveness of such order pending the completion of the
administrative proceedings pursuant to the notice of
charges served upon the foreign insurer or such party
under subsection (a)(1), and such court shall have ju-
risdiction to issue such injunction.
ƒ(4) INCOMPLETE OR INACCURATE RECORDS.—
ƒ(A) TEMPORARY ORDER.—If a notice of
charges served under subsection (a)(1) specifies,
on the basis of particular facts and cir-
cumstances, that a foreign insurer’s books and
records are so incomplete or inaccurate that the
Secretary is unable, through the normal super-
visory process, to determine the financial condi-
tion of the foreign insurer or the details or pur-
pose of any transaction or transactions that may
have a material effect on the financial condition
of the foreign insurer, the Secretary may issue a
temporary order requiring—
ƒ(i) the cessation of any activity or
practice which gave rise, whether in whole
or in part, to the incomplete or inaccurate
state of the books or records; or
ƒ(ii) affirmative action to restore such
books or records to a complete and accurate
state, until the completion of the proceed-
ings initiated under subsection (a)(1).
ƒ(B) EFFECTIVE PERIOD.—Any temporary
order issued under subparagraph (A)—
ƒ(i) shall become effective upon service;
and
ƒ(ii) unless set aside, limited, or sus-
pended by a court in proceedings under
paragraph (3), shall remain in effect and
enforceable until the earlier of—
ƒ(I) the completion of the pro-
ceeding 
initiated 
under 
subsection
(a)(1) in connection with the notice of
charges; or
ƒ(II) the date that the Secretary
determines, by examination or other-
wise, that the foreign insurer’s books
and records are accurate and reflect
the financial condition of the foreign
insurer.
ƒ(5) INJUNCTION.—In the case of violation or
threatened violation of, or failure to obey, a tem-
porary cease-and-desist order issued pursuant to
paragraph (1), the Secretary may apply to the
United States District Court for the District of Co-
lumbia for an injunction to enforce such order. If the
court determines that there has been such violation or
threatened violation or failure to obey, it shall be the
duty of the court to issue such injunction.
ƒ(c) AFFIRMATIVE ACTION TO CORRECT CONDITIONS
RESULTING FROM VIOLATIONS OR PRACTICES.—The au-
thority to issue orders under subsections (a) and (b) that
requires a foreign insurer or insurer-affiliated party to take
affirmative action to correct or remedy any unsafe or un-
sound condition or conditions resulting from any practice
or violation, with respect to which such order is issued, in-
cludes the authority to require such foreign insurer or in-
surer-affiliated party to—
ƒ(1) make restitution or provide reimbursement,
indemnification, or guarantee against loss;
ƒ(2) rescind agreements or contracts;
ƒ(3) employ qualified officers or employees (who
may be subject to approval by the Secretary at the di-
rection of the Secretary); and
ƒ(4) take such other action as the Secretary de-
termines to be appropriate.
ƒ(d) AUTHORITY TO LIMIT ACTIVITIES.—The author-
ity to issue orders under subsections (a) and (b) includes
the authority to place limitations on the activities or func-
tions of a foreign insurer or insurer-affiliated party.
ƒ(e) STANDARDS FOR HEARINGS.—
ƒ(1) VENUE.—Any hearing provided for in this
section shall be held in the judicial district of the
United States District Court for the District of Co-
lumbia and shall be conducted in accordance with the
provisions of chapter 5 of title 5 of the United States
Code.
ƒ(2) ISSUANCE OF ORDER.—After such hearing,
and within 90 days after the Secretary has notified
the parties that the case has been submitted to the
Secretary for final decision, the Secretary shall render
the decision (which shall include findings of fact upon
which its decision is predicated) and shall issue and
serve upon each party to the proceeding an order or
orders consistent with the provisions of this section.
ƒ(3) MODIFICATION.—Judicial review of any
cease and desist order (other than a temporary cease
and desist order) shall be exclusively as provided in
subsection (f). Unless a petition for review is timely
filed as provided in subsection (f)(1) and thereafter
until the record in the proceeding has been filed as so
provided, the Secretary may at any time, modify, ter-
minate, or set aside any such order upon such notice
and in such manner as the Secretary considers prop-
er. Upon such filing of the record, the Secretary may
modify, terminate, or set aside any such order with
permission of the court.
ƒ(f) JUDICIAL REVIEW.—
ƒ(1) COMMENCEMENT.—Any party to any pro-
ceeding under this section may obtain a review of any
order served pursuant to this section (other than a
temporary cease and desist order issued with the con-
sent, whether actual or deemed, of the foreign insurer
or insurer-affiliated party concerned) by the filing 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 petition praying that
the order be modified, terminated, or set aside. The
clerk of the court shall transmit a copy of such peti-
tion to the Secretary, and thereupon the Secretary
shall file in the court the record in the proceeding, as
provided in section 2112 of title 28 of the United
States Code.
ƒ(2) JURISDICTION.—Upon the filing of such pe-
tition, such court shall have jurisdiction, which upon
the filing of the record shall (except as provided in the
last sentence of subsection (e)(3)) be exclusive, to af-
firm, modify, terminate, or set aside, in whole or in
part, the order of the Secretary.
ƒ(3) REVIEW.—Review of such proceedings shall
be had as provided in chapter 7 of title 5 of the
United States Code.
ƒ(4) FINAL JUDGMENT.—The judgment and de-
cree 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.
ƒ(5) NO AUTOMATIC STAY.—The commencement
of proceedings for judicial review under this sub-
section shall not, unless specifically ordered by the
court, operate as a stay of any order issued by the
Secretary.
ƒ(g) ENFORCEMENT AND JURISDICTION.—
ƒ(1) ENFORCEMENT.—The Secretary may (in
the discretion of the Secretary) apply to any United
States district court, or the United States court of
any territory, within the jurisdiction of which the for-
eign insurer transacts business, for the enforcement of
any effective and outstanding notice or order issued
under this section. Such courts shall have jurisdiction
and power to order and require compliance herewith.
ƒ(2) JURISDICTION.—Except as otherwise pro-
vided in this section, no court shall have jurisdiction
to affect by injunction or otherwise the issuance or en-
forcement of any notice or order under this section,
or to review, modify, suspend, terminate, or set aside
any such notice or order.
ƒ(h) CIVIL MONETARY PENALTY.—
ƒ(1) FIRST TIER.—Any foreign insurer which,
and any insurer-affiliated party who—
ƒ(A) violates any provision of this title or
any regulation issued pursuant to this title,
ƒ(B) violates any final order or temporary
order issued pursuant to subsection (a) or (b),
ƒ(C) violates any condition imposed in
writing by the Secretary in connection with the
certification of any foreign insurer as a certified
foreign insurer, or
ƒ(D) violates any written agreement be-
tween such foreign insurer and the Secretary,
shall forfeit and pay a civil penalty of not more than
$50,000 for each day during which such violation
continues.
ƒ(2) SECOND
TIER.—Notwithstanding para-
graph (1), any foreign insurer which, and any in-
surer-affiliated party who—
ƒ(A)(i) commits any violation described in
any subparagraph of paragraph (1),
ƒ(ii) recklessly engages in an unsafe or un-
sound practice in conducting the affairs of such
foreign insurer, or
ƒ(iii) breaches any fiduciary duty, and
ƒ(B) which violation, practice, or breach—
ƒ(i) is part of a pattern of misconduct;
ƒ(ii) causes or is likely to cause more
than a minimal loss to such foreign insurer;
or
ƒ(iii) results in pecuniary gain or
other benefit to such party,
shall forfeit and pay a civil penalty of not more than
$100,000 for each day during which such violation,
practice, or breach continues.
ƒ(3) THIRD TIER.—Notwithstanding paragraphs
(1) and (2), any foreign insurer which, and any in-
surer-affiliated party who—
ƒ(A) knowingly—
ƒ(i) commits any violation described
in any subparagraph of paragraph (1),
ƒ(ii) engages in any unsafe or un-
sound practice in conducting the affairs of
such foreign insurer, or
ƒ(iii) breaches any fiduciary duty,
and
ƒ(B) knowingly or recklessly causes a sub-
stantial loss to such foreign insurer or a substan-
tial pecuniary gain or other benefit to such
party by reason of such violation, practice, or
breach,
shall forfeit and pay a civil penalty in an amount
not to exceed the applicable maximum amount deter-
mined under paragraph (4) for each day during
which such violation, practice, or breach continues.
ƒ(4) MAXIMUM
AMOUNTS
OF
PENALTIES
FOR
ANY VIOLATION DESCRIBED IN PARAGRAPH (3).—The
maximum daily amount of any civil penalty which
may be assessed pursuant to paragraph (3) for any
violation, practice, or breach described in such sub-
paragraph is—
ƒ(A) in the case of any person other than
a foreign insurer, an amount to not exceed
$500,000; and
ƒ(B) in the case of any foreign insurer, an
amount not to exceed the lesser of—
ƒ(i) $1,000,000; or
ƒ(ii) 1 percent of the total assets of
such insurer.
ƒ(5) ASSESSMENT.—
ƒ(A) WRITTEN NOTICE.—Any penalty im-
posed under paragraph (1), (2), or (3) may be
assessed and collected by the Secretary by writ-
ten notice.
ƒ(B) FINALITY OF ASSESSMENT.—If, with
respect to any assessment under subparagraph
(A), a hearing is not requested pursuant to para-
graph (8) within the period of time allowed
under such paragraph, the assessment shall con-
stitute a final and unappealable order.
ƒ(6) AUTHORITY
TO
MODIFY
OR
REMIT
PEN-
ALTY.—The Secretary may compromise, modify, or
remit any penalty that the Secretary may assess or
had already assessed under paragraph (1), (2), or (3).
ƒ(7) MITIGATING FACTORS.—In determining the
amount of any penalty imposed under paragraph (1),
(2), or (3), the Secretary shall take into account the
appropriateness of the penalty with respect to—
ƒ(A) the size of financial resources and
good faith of the foreign insurer or other person
charged;
ƒ(B) the gravity of the violation;
ƒ(C) the history of previous violations; and
ƒ(D) such other matters as justice may re-
quire.
ƒ(8) HEARING.—The foreign insurer or other
person against whom any penalty is assessed under
this subsection shall be afforded an agency hearing if
such insurer or person submits a request for such
hearing within 20 days after the issuance of the no-
tice of assessment.
ƒ(9) COLLECTION.—
ƒ(A) REFERRAL.—If any foreign insurer or
other person fails to pay an assessment after any
penalty assessed under this subsection has be-
come final, the Secretary shall recover the
amount assessed by action in the appropriate
United States district court.
ƒ(B) APPROPRIATENESS OF PENALTY NOT
REVIEWABLE.—In any civil action under sub-
paragraph (A), the validity and appropriateness
of the penalty shall not be subject to review.
ƒ(10) DISBURSEMENT.—All penalties collected
under authority of this subsection shall be paid to the
Secretary and shall be available to the Secretary, in
such amounts and to such extent as are or have been
provided in appropriation Acts, to carry out this
title.
ƒ(11) REGULATIONS.—The Secretary shall pre-
scribe regulations establishing such procedures as may
be necessary to carry out this subsection.
ƒ(i) NOTICE UNDER THIS SECTION AFTER SEPARA-
TION FROM SERVICE.—The resignation, termination of em-
ployment or participation, or separation of an insurer-af-
filiated party (including a separation caused by the closing
of the foreign insurer) shall not affect the jurisdiction and
authority of the Secretary to issue any notice and proceed
under this section against any such party, if such notice
is served before the end of the 6-year period beginning on
the date such party ceased to be such a party with respect
to such foreign insurer (whether such date occurs before, on,
or after the date of the enactment of this Act).
ƒ(j) PREJUDGMENT ATTACHMENT.—
ƒ(1) IN GENERAL.—In any action brought by
the Secretary pursuant to this section, or in actions
brought in aid of, or to enforce an order in, any ad-
ministrative or other civil action for monetary dam-
ages, restitution, or civil monetary penalties brought
by the Secretary, the court may, upon application of
the Secretary, issue a restraining order that—
ƒ(A) prohibits any person subject to the
proceeding from withdrawing, transferring, re-
moving, dissipating, or disposing of any funds,
assets or other property; and
ƒ(B) appoints a temporary receiver to ad-
minister the restraining order.
ƒ(2) STANDARD.—A permanent or temporary
injunction or restraining order shall be granted with-
out bond upon a proper showing that monetary dam-
ages, restitution, or civil monetary penalties, as
sought by the Secretary, is appropriate.
ƒ(k) SERVICE.—Any service required or authorized to
be made by the Secretary under this section may be made
by registered mail, or in such other manner reasonably cal-
culated to give actual notice as the Secretary may by regu-
lation or otherwise provide. Copies of any notice or order
served by the Secretary upon any foreign insurer or any
insurer-affiliated party, pursuant to the provisions of this
section, shall also be sent to the appropriate State insurance
regulator.
ƒ(l) NOTICE TO STATE REGULATORS.—In connection
with any proceeding under subsection (a) or (b)(1) involv-
ing a foreign insurer or any insurer-affiliated party, the
Secretary shall provide the appropriate State insurance
regulator with notice of the Secretary’s intent to institute
such a proceeding and the grounds therefore. No foreign in-
surer or other party who is the subject of any notice or order
issued by the Secretary under this section shall have stand-
ing to raise the requirements of this subsection as ground
for attacking the validity of any such notice or order.
ƒ(m) OATHS AND SUBPOENAS.—
ƒ(1) AUTHORITY.—In the course of or in connec-
tion with any proceeding under this section, the Sec-
retary (or any designated representative thereof, in-
cluding any person designated to conduct any hearing
under this section) shall have the power—
ƒ(A) to administer oaths and affirmations;
ƒ(B) to take or cause to be taken deposi-
tions; and
ƒ(C) to issue, revoke, quash, or modify sub-
poenas and subpoenas duces tecum.
The Secretary may make rules and regulations with
respect to any such proceedings, claims, examina-
tions, or investigations.
ƒ(2) WITNESSES AND DOCUMENTS.—The attend-
ance of witnesses and the production of documents
provided for in this subsection may be required from
any place in any State or in any territory or other
place subject to the jurisdiction of the United States
at any designated place where such proceeding is
being conducted.
ƒ(3) ENFORCEMENT.—The Secretary or any
party to proceedings under this section may apply to
the United States District Court for the District of
Columbia, or the United States district court for the
judicial district or the United States court in any ter-
ritory in which such proceeding is being conducted, or
where the witness resides or carries on business, for
enforcement of any subpoena or subpoena duces tecum
issued pursuant to this subsection, and such courts
shall have jurisdiction and power to order and re-
quire compliance therewith.
ƒ(4) FEES AND EXPENSES.—Witnesses subpoe-
naed under this subsection shall be paid the same fees
and mileage that are paid witnesses in the district
courts of the United States. Any court having juris-
diction of any proceeding instituted under this section
by an foreign insurer or a director or officer thereof,
may allow to any such party such reasonable expenses
and attorneys’ fees as it deems just and proper, and
such expenses and fees shall be paid by the foreign in-
surer or from its assets.
ƒ(5) MISDEMEANOR.—Any person who willfully
shall fail or refuse to attend and testify or to answer
any lawful inquiry or to produce books, papers, cor-
respondence, memoranda, contracts, agreements, or
other records, if in such person’s power so to do, in
obedience to the subpoena of the Secretary, shall be
guilty of a misdemeanor and, upon conviction, shall
be subject to a fine of not more than $1,000 or to im-
prisonment for a term of not more than 1 year or
both.
ƒ(n) ACTS OUTSIDE THE UNITED STATES.—An act
or practice outside the United States on the part of a for-
eign insurer or any officer, director, employee, or agent
thereof may not constitute the basis for any action by any
officer or agency of the United States under this section,
unless—
ƒ(1) such officer or agency alleges a belief that
such act or practice has been, is, or is likely to be a
cause of or carried on in connection with or in fur-
therance of an act or practice within any one or more
States which, in and of itself, would constitute an ap-
propriate basis for action by a Federal officer or
agency under this section; or
ƒ(2) the alleged act or practice is one which, if
proven, would, in the judgment of the Secretary, ad-
versely affect the United States policyholders or
cedants of the insurer.
ƒ(o) PUBLIC DISCLOSURES OF FINAL ORDERS AND
AGREEMENTS.—
ƒ(1) IN GENERAL.—The Secretary shall publish
and make available to the public on a monthly
basis—
ƒ(A) any written agreement or other writ-
ten statement for which a violation may be en-
forced by the Secretary, unless the Secretary (in
the discretion of the Secretary) determines that
publication would be contrary to the public in-
terest;
ƒ(B) any final order issued with respect to
any administrative enforcement proceeding initi-
ated by the Secretary under this section; and
ƒ(C) any modification to or termination of
any order or agreement made public pursuant to
this paragraph.
ƒ(2) HEARINGS.—All hearings on the record
with respect to any notice of charges issued by the
Secretary shall be open to the public, unless the Sec-
retary (in the discretion of the Secretary) determines
that holding an open hearing would be contrary to
the public interest.
ƒ(3) REPORTS
TO
CONGRESS.—The Secretary
shall prepare a written report as a part of each deter-
mination not to hold a public hearing pursuant to
paragraph (2) or not to publish a document pursuant
to paragraph (1)(A). At the end of each calendar
quarter, the Secretary shall submit all such reports to
the Congress.
ƒ(4) TRANSCRIPT OF HEARING.—The Secretary
shall prepare a transcript that includes all testimony
and other documentary evidence for all hearings com-
menced pursuant to subsection (e). A transcript of
public hearings shall be made available to the public
pursuant to section 552 of title 5, United States Code.
ƒ(5) DELAY
OF
PUBLICATION
UNDER
EXCEP-
TIONAL CIRCUMSTANCES.—If the Secretary makes a
determination in writing that the publication of a
final order pursuant to paragraph (1)(B) would seri-
ously threaten the safety and soundness of a foreign
insurer, the Secretary may delay the publication of
the document for a reasonable time.
ƒ(6) RETENTION
OF
DOCUMENTS.—The Sec-
retary shall keep and maintain a record, for a period
of at least 6 years, of all documents described in
paragraph (1) and all informal enforcement agree-
ments and other supervisory actions and supporting
documents issued with respect to or in connection
with any administrative enforcement proceeding ini-
tiated by the Secretary under this section.
ƒSEC. 144. ACTIONS BY STATE INSURANCE REGULATORS TO
ENFORCE REQUIREMENTS APPLICABLE TO
FOREIGN INSURERS.
ƒ(a) IN GENERAL.—Subject to the provisions of this
section, any appropriate State insurance regulator may
bring a civil action in a Federal or State court of competent
jurisdiction, on behalf of the Secretary, against any foreign
insurer that commits any action that would make the for-
eign insurer subject to a civil monetary penalty under sec-
tion 143(h). The court shall have the jurisdiction to enjoin
such action and apply the appropriate civil monetary pen-
alty under section 143(h).
ƒ(b) NOTICE TO SECRETARY.—A State insurance reg-
ulator may bring an action under this section only if the
State insurance regulator notifies the Secretary in writing,
not less than 30 days before the commencement of the ac-
tion, of the regulator’s intent to bring the action, of the
identities of the foreign insurer or persons to be named as
defendants to the action, and of all information the regu-
lator possesses regarding the activity that is the subject of
the action that may materially affect the Secretary’s deci-
sion to initiate a proceeding to impose a civil monetary
penalty under section 143(h) against the prospective defend-
ants. Any notice or information received by the Secretary
pursuant to this subsection shall remain confidential and
shall not be disclosed to any foreign insurer or person to
be named as a defendant to the action.
ƒ(c) NOTICE BY SECRETARY OF INTENDED ACTION.—
The Secretary shall notify a State insurance regulator pro-
viding notice under subsection (b) of whether the Secretary
intends to initiate a proceeding to impose a civil monetary
penalty under section 143(h) against the prospective defend-
ants. Notice under this subsection shall be provided, in writ-
ing, not later than the expiration of the 30-day period be-
ginning on the date that the Secretary receives the written
notice under subsection (b).
ƒ(d) REQUIREMENTS FOR ACTION BY STATE INSUR-
ANCE REGULATOR.—A State insurance regulator may
bring an action under this section only—
ƒ(1) after receipt of notice under subsection (c)
that the Secretary does not intend to initiate a pro-
ceeding to impose a civil monetary penalty under sec-
tion 143(h) against the prospective defendants;
ƒ(2) if, upon the expiration of the period re-
ferred to in subsection (c), the Secretary has not pro-
vided the notice required under subsection (c); or
ƒ(3) if the Secretary provides notice under sub-
section (c) that the Secretary intends to initiate a
proceeding to impose a civil monetary penalty under
section 143(h) against the prospective defendants, but
upon the expiration of the 90-day period beginning
on the date such notice is sent the Secretary has not
initiated such a proceeding.
A notice by the Secretary under paragraph (1), absence of
notice by the Secretary under paragraph (2), or failure by
the Secretary to initiate a proceeding under paragraph (3),
shall not be admissible as evidence of the liability or non-
liability of a defendant in any civil proceeding commenced
by a State insurance regulator pursuant to this section. A
matter considered by or in the possession of the Secretary
shall not be discoverable in any civil proceeding commenced
by a State insurance regulator pursuant to this section.
ƒ(e) PROHIBITION OF SETTLEMENT WITHOUT SEC-
RETARY’S CONSENT.—No settlement agreement with regard
to any action under this section may be entered into or
agreed to by any State insurance regulator who brought the
action on behalf of the Secretary without the prior written
consent of the Secretary.
ƒ(f) SHARE OF PENALTY.—
ƒ(1) STATE ACTIONS.—In any action brought
under this section, the court shall distribute 50 per-
cent of any civil monetary penalty imposed to the
State insurance regulator who brought the action and
50 percent to the Secretary.
ƒ(2) CIVIL MONETARY PENALTIES.—If a State
insurance regulator furnishes the Secretary with no-
tice and information pursuant to subsection (b) and
such notice and information is a contributing factor
in imposing a civil monetary penalty under section
143(h), then the court shall distribute to the State in-
surance regulator the greater of (A) one-third of the
amount of the civil monetary penalty imposed, or (B)
the costs of the investigation conducted by the State
insurance regulator.
ƒSEC. 145. CRIMINAL PENALTIES.
ƒ(a) SUBMISSION OF FALSE AND MISLEADING INFOR-
MATION.—Whoever knowingly submits information re-
quired under this title to the Secretary that is false and
misleading shall be fined under title 18, United States Code,
or imprisoned not more than 30 years, or both.
ƒ(b) FALSE REPRESENTATION OF CERTIFICATION.—
ƒ(1) IN
GENERAL.—Section 709 of title 18,
United States Code, is amended by inserting after the
undesignated paragraph relating to the Overseas Pri-
vate Investment Corporation the following new para-
graph:
ƒ‘‘Whoever falsely advertises or represents, or publishes
or displays any sign, symbol, or advertisement reasonably
calculated to convey the impression that a foreign insurer
that is not a certified foreign insurer under title I of the
Insurance Consumer Protection Act is such a certified for-
eign insurer; or’’.
ƒ(2) EFFECTIVE
DATE.—This subsection shall
take effect upon the expiration of the 18-month period
beginning upon the date of the enactment of this Act.
ƒSEC. 146. NOTIFICATION TO STATE INSURANCE REGU-
LATORS AND COORDINATION WITH FOREIGN
INSURANCE REGULATORS.
ƒ(a) STATE INSURANCE REGULATORS.—
ƒ(1) NOTICE.—Subject to any other require-
ments of this title, the Secretary shall notify each ap-
propriate State insurance regulator before examining
any foreign insurer under this subtitle, terminating
or suspending the certification of any certified foreign
insurer under this subtitle, issuing any order or tak-
ing any other enforcement action authorized against
any foreign insurer or insurer-affiliated party pursu-
ant to this subtitle, or imposing any civil monetary
penalty or commencing any criminal action pursuant
to this subtitle and the amendment made by this sub-
title.
ƒ(2) EFFECT OF REQUIREMENT.—No foreign in-
surer or other party who is the subject of any notice
or order issued by the Secretary pursuant to sub-
section shall have standing to raise the requirements
of this subsection as ground for attacking the validity
of any such notice or order.
ƒ(b) FOREIGN INSURANCE REGULATORS.—
ƒ(1) REQUESTING ASSISTANCE FROM FOREIGN
INSURANCE REGULATORS.—In conducting any inves-
tigation, examination, or enforcement action under
this title, the Secretary may—
ƒ(A) request the assistance of any foreign
insurance regulator; and
ƒ(B) maintain an office outside the United
States.
ƒ(2) PROVIDING ASSISTANCE TO FOREIGN INSUR-
ANCE REGULATORS.—
ƒ(A) IN GENERAL.—The Secretary may, at
the request of any foreign insurance regulator,
assist such regulator if such regulator states that
the requesting regulator is conducting an inves-
tigation to determine whether any person has
violated, is violating, or is about to violate any
law or regulation relating to insurance or rein-
surance matters administered or enforced by the
requesting regulator.
ƒ(B) INVESTIGATION BY SECRETARY.—The
Secretary may, in the discretion of the Secretary,
investigate and collect information and evidence
pertinent to a request for assistance under sub-
paragraph (A). Any such investigation shall
comply with the laws of the United States and
the policies and procedures of the Secretary.
ƒ(C) FACTORS TO CONSIDER.—In deciding
whether to provide assistance under this para-
graph, the Secretary shall consider—
ƒ(i) whether the requesting regulator
has agreed to provide reciprocal assistance
with respect to insurance and reinsurance
matters within the jurisdiction of the Sec-
retary; and
ƒ(ii) whether compliance with the re-
quest would prejudice the public interest of
the United States.
ƒ(3) RULE OF CONSTRUCTION.—Paragraphs (1)
and (2) shall not be construed to limit the authority
of the Secretary to provide or receive assistance or in-
formation to or from any foreign authority with re-
spect to any matter.
ƒSEC. 
147. 
NATIONAL 
INSURANCE 
INTELLIGENCE
DATABASE.
ƒ(a) IN GENERAL.—The Secretary shall collect infor-
mation regarding individuals and other persons that have
engaged in any activity in violation of any Federal or State
law, regulation, or order relating to insurance or reinsur-
ance activities. The Secretary shall establish a computer-
based database of such information and shall regularly up-
date the database.
ƒ(b) LAW ENFORCEMENT ACCESS.—The Secretary
shall make information from the database under this section
available to appropriate Federal and State law enforcement
and regulatory agencies upon request.
ƒ(c) CONFIDENTIALITY.—Except as provided in sub-
section (b), notwithstanding any other law, regulation, or-
dinance, any agreement, any judgment or order of any
court, tribunal, or other officer, or any other legal process,
the Secretary may not disclose any information from the
database under this section.
ƒSubtitle D—General Provisions
ƒSEC. 161. TRANSFER OF INFORMATION WITH STATE IN-
SURANCE REGULATORS.
ƒThe Secretary shall provide to a State insurance reg-
ulator any application submitted under section 102 or 122
by a foreign insurer, any financial statement or other infor-
mation submitted under section 105 or 125 by a foreign
insurer, and any other information submitted to the Sec-
retary under this title by a foreign insurer, if such informa-
tion is requested by such State insurance regulator for such
insurer.
ƒSEC. 162. NATIONAL ADVISORY COUNCIL OF STATE INSUR-
ANCE REGULATORS.
ƒ(a) ESTABLISHMENT.—The Secretary shall establish
an advisory council to be known as the National Advisory
Council of State Insurance Regulators.
ƒ(b) DUTIES.—The National Advisory Council of
State Insurance Regulators shall advise the Secretary on
activities with respect to the requirements for foreign insur-
ers under this title, certification of foreign insurers under
this title, standards of such certification, and any other ac-
tivities of the Secretary under this title. The Advisory Coun-
cil may submit such advice and recommendations to the
Secretary in writing and the Secretary shall respond, in
writing, to any such advice, and shall include in any such
response an explanation of any actions taken with respect
to the advice and any reasons for not following any rec-
ommendations of the Advisory Council that were not adopt-
ed by the Secretary.
ƒ(c) MEMBERSHIP.—
ƒ(1) NUMBER
AND
APPOINTMENT.—The Na-
tional Advisory Council of State Insurance Regu-
lators shall be composed of 10 members appointed by
the Secretary subject to the following requirements:
ƒ(A) STATE
INSURANCE
REGULATORS.—
The members shall be the individuals serving as
the heads, members of the governing bodies, or
the designees of such individuals, of the State in-
surance regulators of 10 different States.
ƒ(B) DIVERSITY
AMONG
STATE
POPU-
LATION.—In appointing the membership of the
Advisory Council, the Secretary shall provide
that the States represented by members shall dif-
fer widely, with respect to each other, in popu-
lation.
ƒ(C) GEOGRAPHICAL
DIVERSITY.—In ap-
pointing the membership of the Advisory Coun-
cil, the Secretary shall provide that the States
represented by members include States from the
various regions of the United States.
ƒ(2) TERMS.—
ƒ(A) IN GENERAL.—Each member shall be
appointed for a term of 2 years, except as pro-
vided in subparagraphs (B) and (C).
ƒ(B) TERMS OF INITIAL APPOINTEES.—As
designated by the Secretary at the time of ap-
pointment, of the members first appointed, 5
shall be appointed for terms of 1 year.
ƒ(C) VACANCIES.—If, before the expiration
of the term of a member of the Advisory Council,
such member no longer serves as a State insur-
ance regulator, the Secretary shall appoint a
successor who shall meet the requirements of this
subsection to serve for the remainder of that
term. A member may serve after the expiration
of that member’s term until a successor has taken
office.
ƒ(d) MEETINGS.—The National Advisory Council of
State Insurance Regulators shall meet not less frequently
than once each calendar quarter of each year.
ƒ(e) PERMANENT STATUS.—Section 14(a)(2)(B) of the
Federal Advisory Committee Act (5 U.S.C. App.; relating
to the termination of advisory committees) shall not apply
to the National Advisory Council of State Insurance Regu-
lators.
ƒSEC. 163. GAO STUDY OF ACCOUNTING PRINCIPLES.
ƒ(a) STUDY.—The Comptroller General of the United
States shall conduct a study of the applicability and appro-
priateness of generally accepted accounting principles and
United States statutory accounting principles for use in
evaluating the financial statements required to be submitted
under sections 105 and 125 by foreign insurers. The study
shall be designed to determine what accounting principles
are most appropriate to the businesses of insurance and re-
insurance, taking into consideration the characteristics of
such businesses and insurers and reinsurers.
ƒ(b) REPORT.—The Comptroller General shall submit
a report to the Committee on Banking, Finance and Urban
Affairs of the House of Representatives and the Committee
on Banking, Housing, and Urban Affairs of the Senate, not
later than the expiration of the 12-month period beginning
on the date of the enactment of this Act on the results of
the study. The report shall include a determination of the
accounting principles most appropriate for use in evaluat-
ing financial statements under sections 105 and 125, the
extent of the applicability of such principles for use in such
financial statements, identification and analysis of any
benefits and problems in using such principles for such pur-
statement, report, or other documentation required under
this title (or any regulation or order issued pursuant to
this title) shall be submitted to the Secretary, the content
of such information, and the standards, procedures, and
manner of any certification, authentication, or verification
to be followed in preparing and submitting such informa-
tion.
ƒSEC. 166. DETERMINATION OF QUALIFIED FINANCIAL IN-
STITUTIONS AND CONTROL.
ƒ(a) QUALIFIED FINANCIAL INSTITUTIONS.—For pur-
poses of this title, a qualified financial institution shall be
an insured depository institution (as such term is defined
in section 3(c) of the Federal Deposit Insurance Act) that
is adequately capitalized (for purposes of section 38 of such
Act), including a United States branch of a foreign bank,
and has been determined by the Secretary to meet such ad-
ditional standards of financial condition and standing as
the Secretary considers necessary and appropriate for pur-
poses of this title.
ƒ(b) CONTROL.—For purposes of this title, a person
shall be considered to have control with respect to another
person if—
ƒ(1) such person directly, indirectly, or acting
through 1 or more other persons, owns, controls, or
has the power to vote 25 percent or more of any class
of voting securities of such other person;
ƒ(2) such person controls, in any manner, the
election of a majority of the directors or trustees of
such other person; or
ƒ(3) the Secretary makes a determination on the
record, after notice and opportunity for a hearing,
that such person directly or indirectly exercises a con-
trolling influence over the management or policies of
such other person; except that, in making any such
determination, control shall be presumed to exist if
such person directly, indirectly, or acting through 1
or more other persons, owns, controls, or has the
power to vote 10 percent or more of any class of vot-
ing securities of such other person.
ƒSEC. 167. DEFINITIONS.
ƒFor purposes of this title:
ƒ(1) APPROPRIATE
STATE
INSURANCE
REGU-
LATOR.—The term ‘‘appropriate State insurance reg-
ulator’’ means, with respect to a foreign insurer, the
State insurance regulator for any State in which the
foreign insurer does a substantial amount of business,
as determined by the Secretary.
ƒ(2) CERTIFIED
FOREIGN
DIRECT
INSURER.—
The term ‘‘certified foreign direct insurer’’ means a
foreign insurer certified under subtitle A.
ƒ(3) CERTIFIED FOREIGN INSURER.—The term
‘‘certified foreign insurer’’ means a certified foreign
direct insurer or a certified foreign reinsurer.
ƒ(4) CERTIFIED
FOREIGN
REINSURER.—The
term ‘‘certified foreign reinsurer’’ means foreign rein-
surer certified under subtitle B.
ƒ(5) FOREIGN
DIRECT
INSURER.—The term
‘‘foreign direct insurer’’ means a foreign insurer that
has outstanding United States direct written insur-
ance obligations (not including obligations for life in-
surance or health insurance).
ƒ(6) FOREIGN
INSURANCE
REGULATOR.—The
term ‘‘foreign insurance regulator’’ means the agency
having principal insurance regulatory authority in
any country other than the United States.
ƒ(7) FOREIGN INSURER.—The term ‘‘foreign in-
surer’’ means an insurer or reinsurer other than—
ƒ(A) an insurer or reinsurer organized
under the laws of any State; or
ƒ(B) the United States branch of a foreign
insurer.
The term includes insurers and reinsurers doing busi-
ness as single insurers, groups including individual
unincorporated underwriters, and groups of incor-
porated insurers under common administration.
ƒ(8) FOREIGN REINSURER.—The term ‘‘foreign
reinsurer’’ means a foreign insurer that insures any
portion of risks undertaken by a United States in-
surer (not including risks covered by life insurance or
health insurance).
ƒ(9) HEALTH
INSURANCE.—The term ‘‘health
insurance’’ means any health insurance, accident and
health insurance, accident and sickness or disability
insurance contract or certificate of insurance, whether
issued on a group or individual basis, that pays bene-
fits to an insured who becomes ill, injured, or disabled
or who receives any medical or dental treatment or
therapy covered by the terms of the contract, except
contracts or certificates that (A) provide such benefits
for illness or injury that results from the liability of
another, (B) pay benefits as the result of an occupa-
tional injury or disease covered by a contract of work-
ers’ compensation and employers’ liability insurance,
or (C) are issued by a mandatory State pooling plan
or any agency or program established or required by
the Federal Government.
ƒ(10) INSURER-AFFILIATED
PARTY.—The term
‘‘insurer affiliated party’’ means—
ƒ(A) any director, officer, employee, or con-
trolling stockholder of, or agent for, a foreign in-
surer;
ƒ(B) any shareholder, consultant, joint ven-
ture partner, and any other person as deter-
mined by the Secretary (by regulation or case-
by-case) who participates in the conduct of the
affairs of a foreign insurer; and
ƒ(C) any independent contractor (including
any attorney, appraiser, actuary, or accountant)
who knowingly or recklessly participates in—
ƒ(i) any violation of any law or regu-
lation,
ƒ(ii) any breach of fiduciary duty, or
ƒ(iii) any unsafe or unsound practice,
which caused or is likely to cause more than a
minimal financial loss to, or a significant ad-
verse affect on, the foreign insurer.
ƒ(11) LETTER OF CREDIT.—The term ‘‘letter of
credit’’ means a clean irrevocable letter of credit is-
sued or confirmed by a qualified financial institution,
in a form prescribed by the Secretary.
ƒ(12) LIFE INSURANCE.—The term ‘‘life insur-
ance’’ means any contract or certificate of insurance,
whether issued on a group or individual basis, that
is designed primarily to pay benefits to or on behalf
of a beneficiary as the result of the death of an indi-
vidual. The term includes contracts that may also
pay benefits, in addition to death benefits, in the form
of surrender values, premium deferral in the event of
a disability, or income payments prior to the death
of the insured. The term also includes any annuity or
other contract or certificate of insurance, whether is-
sued on a group or individual basis, that pays an in-
come benefit for the life of 1 or more persons or for
a specified period of time (including single lump-sum
payments), including annuity contracts and certifi-
cates under group annuity contracts in the form of
guaranteed investment contracts, deposit administra-
tion contracts, unallocated funding agreements, allo-
cated funding agreements, structured settlement agree-
ments, lottery contracts, and any immediate or de-
ferred annuity contracts.
ƒ(13) READILY MARKETABLE SECURITIES.—The
term ‘‘readily marketable securities’’ means securities
registered for trading on a national securities ex-
change in accordance with section 12 of the Securities
ƒSEC. 169. EFFECTIVE DATES.
ƒ(a) ISSUANCE
OF REGULATIONS.—The Secretary
shall issue any regulations necessary to carry out this title
(including regulations establishing standards or require-
ments for applications under sections 102 and 122, for for-
eign insurers under sections 104 and 124, for accounting
under sections 105 and 125, for examination under section
141, for termination and suspension of certification under
section 142, for cease-and-desist orders under section 143,
and for qualified financial institutions under section 166)
not later than the expiration of the 18-month period begin-
ning on the date of the enactment of this Act.
ƒ(b) CERTIFICATION.—Not later than the expiration
of the 24-month period beginning on the date of the enact-
ment of this Act, the Secretary shall commence certifying
foreign insurers as certified foreign direct insurers and cer-
tified foreign reinsurers under subtitles A and B, respec-
tively.
ƒ(c) REQUIREMENTS FOR CONDUCTING DIRECT IN-
SURANCE AND REINSURANCE BUSINESS.—The date referred
to in sections 101 and 121 (relating to requirements for
foreign insurers to conduct direct insurance business or to
claim credit for reinsurance) shall be the date of the expira-
tion of the 30-month period beginning on the date of the
enactment of this Act.
ƒTITLE II—DISCLOSURE OF IN-
SURANCE AVAILABILITY AND
INSURER 
INVESTMENT 
IN-
FORMATION
ƒSEC. 201. SHORT TITLE.
ƒThis title may be cited as the ‘‘Insurance Disclosure
Act’’.
ƒSEC. 202. FINDINGS AND PURPOSES.
ƒ(a) FINDINGS.—The Congress finds that—
ƒ(1) there are disparities in insurance coverage
provided by some insurers between areas of different
incomes and racial composition;
ƒ(2) such disparities in affordability and avail-
ability of insurance severely limit the ability of quali-
fied consumers to obtain credit for home, business,
and automobile purchases; and
ƒ(3) the lack of affordable and adequate commer-
cial insurance for small businesses severely curtails
the establishment and growth of such businesses.
ƒ(b) PURPOSES.—The purposes of this title are—
ƒ(1) to establish a nationwide database for de-
termining the availability, affordability, and ade-
quacy of insurance coverage for consumers and small
businesses;
ƒ(2) to facilitate the enforcement of Federal and
State laws that prohibit illegally discriminatory in-
surance practices; and
ƒ(3) to determine whether the extent and charac-
teristics of insurance availability, affordability, and
coverage require public officials to take any actions
(A) to remedy redlining or other illegally or unfairly
discriminatory insurance practices, or (B) regarding
areas underserved by insurers.
ƒ(c) CONSTRUCTION.—Nothing in this title is intended
to, nor shall it be construed to, encourage unsound under-
writing practices.
ƒSEC. 203. ESTABLISHMENT OF GENERAL REQUIREMENTS
TO SUBMIT INFORMATION.
ƒ(a) IN GENERAL.—The Secretary of Housing and
Urban Development shall, by regulation, establish require-
ments for insurers to compile and submit information to
the Secretary for each annual reporting period, in accord-
ance with this title.
ƒ(b) CONSULTATION.—In establishing the require-
ments for the submission of information under this title,
the Secretary shall consult with Federal agencies having ap-
propriate expertise, the National Association of Insurance
Commissioners, State insurance regulators, statistical
agents, representatives of small businesses, representatives
of insurance agents (including minority insurance agents),
representatives of property and casualty insurers, and com-
munity, consumer, and civil rights organizations, as appro-
priate.
ƒSEC. 204. REPORTING OF NONCOMMERCIAL INSURANCE
INFORMATION.
ƒ(a) IN GENERAL.—The requirements established pur-
suant to section 203 to carry out this section shall—
ƒ(1) be designed to ensure that information is
submitted and compiled under this section as may be
necessary to permit analysis and comparison of—
ƒ(A) the availability and affordability of
insurance coverage and the quality or type of in-
surance coverage, by MSA and applicable region
and race and gender of policyholders; and
ƒ(B) the location of the principal place of
business of insurance agents and the race of such
agents, and the location of the principal place of
business of insurance agents terminated and the
race of such agents, by MSA and applicable re-
gion; and
ƒ(2) specify the data elements required to be re-
ported under this section and require uniformity in
the definitions of the data elements.
ƒ(b) DESIGNATED INSURERS.—
ƒ(1) AGGREGATE
INFORMATION.—The regula-
tions issued under section 203 shall require that each
designated insurer for a designated line of insurance
under subparagraph (A) or (B) of section 215(c)(1)
compile and submit to the Secretary, for each annual
reporting period—
ƒ(A) the total number of policies issued in
such line, total exposures covered by such poli-
cies, and total amount of premiums for such
policies, by designated line and by designated
MSA and applicable region in which the insured
risk is located;
ƒ(B) the total number of cancellations and
nonrenewals (expressed in terms of policies or ex-
posures, as determined by the Secretary), by des-
ignated line and by designated MSA and appli-
cable region in which the insured risk is located;
ƒ(C) the total number and racial character-
istics of—
ƒ(i) licensed agents of such insurer
selling insurance in the designated line, by
designated MSA and applicable region in
which the agent’s principal place of business
is located; and
ƒ(ii) such agents who were terminated
by the insurer, by designated MSA and ap-
plicable region in which the agent’s prin-
cipal place of business was located; and
ƒ(D) for such designated line of insurance,
information that will enable the Secretary to as-
sess the aggregate loss experience for the insurer,
by designated MSA and applicable region in
which the insured risk is located.
ƒ(2) SPECIFICATION OF INFORMATION FOR ITEM-
IZED DISCLOSURE.—
ƒ(A) IN GENERAL.—The regulations issued
under section 203 regarding annual reporting
requirements for designated insurers for a des-
ignated line of insurance under subparagraph
(A) or (B) of section 215(c)(1) shall, with respect
to policies issued under the designated line or ex-
posure units covered by such policies, as deter-
mined by the Secretary—
ƒ(i) specify the data elements that
shall be submitted;
ƒ(ii) provide for the submission of in-
formation on an individual insurer basis;
ƒ(iii) provide for the submission of the
information with the least burden on insur-
ers, particularly small insurers, and insur-
ance agents;
ƒ(iv) take into account existing statis-
tical reporting systems in the insurance in-
dustry;
ƒ(v) require reporting by MSA and
applicable region in which the insured risk
is located;
ƒ(vi) provide for the submission of in-
formation that identifies the designated
line, and subline or coverage type;
ƒ(vii) provide for the submission of in-
formation that distinguishes policies written
in a residual market from policies written
in the voluntary market;
ƒ(viii) specify—
ƒ(I) whether information shall be
submitted on the basis of policy or ex-
posure unit; and
ƒ(II) whether information, when
submitted, shall be aggregated by like
policyholders with like policies, except
that the Secretary shall not permit
such aggregation if it will adversely af-
fect the accuracy of the information re-
ported;
ƒ(ix) provide for the submission of in-
formation regarding the number of cancella-
tions and nonrenewals of policies under the
designated line by MSA and applicable re-
gion in which the insured risk is located, by
race and gender of the policyholder (if
known to the insurer), and by whether the
policy was issued in a voluntary or residual
market; and
ƒ(x) provide for the submission of in-
formation on the racial characteristics and
gender of policyholders at the level of detail
comparable to that required by the Home
Mortgage Disclosure Act of 1975 (and the
regulations issued thereunder).
ƒ(B) RULES REGARDING OBTAINING RACIAL
INFORMATION.—With respect to the information
specified in subparagraph (A)(x), applicants for,
and policyholders of, insurance may be asked
their racial characteristics only in writing. Any
such written question shall clearly indicate that
a response to the question is voluntary on the
part of the applicant or policyholder, but encour-
aged, and that the information is being requested
by the Federal Government to monitor the avail-
ability and affordability of insurance. If an ap-
plicant for, or policyholder of, insurance declines
to provide such information, the agent or insurer
for such insurance may provide such informa-
tion.
ƒ(3) RULE FOR REPORTING BY DESIGNATED IN-
SURERS.—A designated insurer for a designated line
shall submit—
ƒ(A) information required under subpara-
graphs (A), (B), and (D) of paragraph (1) and
information required pursuant to paragraph (2),
for risks insured under such line that are located
within each designated MSA any part of which
is located in a State for which the insurer is des-
ignated; and
ƒ(B) information required under para-
graph (1)(C) for agents within such designated
MSA’s.
ƒ(c) NONDESIGNATED INSURERS.—The regulations is-
sued under section 203 shall require each insurer that issues
an insurance policy in a designated line of insurance under
subparagraph (A) or (B) of section 215(c)(1) that covers
an insured risk located in a designated MSA and which
is not a designated insurer for the line in any State in
which any part of such MSA is located, to compile and sub-
mit to the Secretary, for each annual reporting period—
ƒ(1) the total number of policies issued in such
line,
ƒ(2) the total exposures covered by such policies,
and
ƒ(3) the total amount of premiums for such poli-
cies,
by designated MSA and applicable region in which the in-
sured risk is located.
ƒSEC. 205. STUDY OF COMMERCIAL INSURANCE FOR RESI-
DENTIAL 
PROPERTIES 
AND 
SMALL 
BUSI-
NESSES.
ƒ(a) IN GENERAL.—The Secretary shall conduct a
study to determine the availability, affordability, and qual-
ity or types of commercial insurance coverage for residen-
tial properties and small businesses, in urban areas.
ƒ(b) SUBMISSION OF INFORMATION.—To acquire in-
formation for the study under this section, the Secretary
shall, by regulation, establish requirements for insurers pro-
viding commercial insurance for residential properties and
small businesses to compile and submit to the Secretary on
an annual basis information regarding such insurance, as
follows:
ƒ(1) MSA’S.—The Secretary shall carry out the
study only with respect to the 25 MSA’s having the
largest populations, as determined by the Secretary
and specified in the regulations under this section.
ƒ(2) INSURERS.—For each of the MSA’s speci-
fied pursuant to paragraph (1), the Secretary shall
designate the insurers required to submit the informa-
tion. The Secretary shall designate a sufficient num-
ber of insurers to provide a representative sample of
the insurers providing such insurance in each such
MSA.
ƒ(3) LINES OF INSURANCE.—The Secretary shall
require the submission of information regarding such
lines, sublines, or coverage types of commercial insur-
ance as the Secretary determines are necessary or im-
portant with respect to establishing, operating, or
maintaining residential properties and each type of
small business selected under paragraph (4), and
shall require submission of such information by such
lines, sublines, or coverage types.
ƒ(4) SMALL
BUSINESSES.—For purposes of
paragraph (3), the Secretary shall determine the types
of businesses that are typically small businesses and
shall select a representative sample of such types.
ƒ(5) DATA
ELEMENTS.—The Secretary shall
identify the data elements required to be submitted.
ƒ(6) SUBMISSION BY LOCATION.—The Secretary
shall require the information to be submitted by des-
ignated MSA and applicable region in which the in-
sured risk is located.
ƒ(7) SUBMISSION BY INSURER.—The Secretary
shall require the submission of information on an in-
dividual insurer basis and shall specify whether in-
formation, when submitted, shall be aggregated by like
policies, except that the Secretary shall not permit
such aggregation if it will adversely affect the accu-
racy of the information reported.
ƒ(8) SUNSET.—The Secretary shall require the
submission of information under this section only for
each of the first 5 annual reporting periods beginning
more than 36 months after the date of the enactment
of this Act.
ƒ(c) CONSIDERATIONS.—In establishing the require-
ments for submission of information under this section, the
Secretary shall—
ƒ(1) take into consideration the administrative,
paperwork, and other burdens on insurers and insur-
ance agents involved in complying with the require-
ments of this section;
ƒ(2) minimize the burdens imposed by such re-
quirements with respect to such insurers and agents;
and
ƒ(3) take into consideration existing statistical
reporting systems in the insurance industry.
ƒ(d) REPORT.—Not later than 6 months after the expi-
ration of the 5-year period referred to in subsection (b)(8),
the Secretary shall submit a report to the Congress describ-
ing the information submitted under the study conducted
under this section and any findings of the Secretary from
the study regarding disparities in the availability, afford-
ability, and quality or types of commercial insurance cov-
erage for residential properties and small businesses, in
urban areas.
ƒSEC. 206. REPORTING OF BID, PERFORMANCE, AND PAY-
MENT BONDS FOR SMALL BUSINESSES.
ƒ(a) IN GENERAL.—The Secretary shall by regulation
establish requirements in accordance with section 203 for
insurers to compile and submit to the Secretary, for each
annual reporting period, information regarding bid, per-
formance, and payment bonds for small businesses, by lines
designated under subparagraph (C) of section 215(c)(1),
that is similar to the information required to be submitted
under section 204.
ƒ(b) CONTENTS.—The regulations under this section
shall provide for—
ƒ(1) designation of insurers required to submit
the information, pursuant to standards comparable to
the standards for designation under section 215(b),
and submission of the information on an individual
insurer basis;
ƒ(2) identification of data elements required to
be submitted;
ƒ(3) the information to be submitted by des-
ignated MSA and applicable region;
ƒ(4) the information to be submitted in a man-
ner similar to that required for information submit-
ted under section 204;
ƒ(5) an appropriate definition of small busi-
nesses; and
ƒ(6) the information to be submitted for each
annual reporting period.
ƒSEC. 207. REPORTING OF RURAL INSURANCE INFORMA-
TION.
ƒ(a) IN GENERAL.—The Secretary shall, by regula-
tion, establish requirements for insurers to annually com-
pile and submit to the Secretary information concerning
the availability, affordability, and quality or type of insur-
ance in designated rural areas in the lines designated under
subparagraphs (A) and (B) of section 215(c)(1).
ƒ(b) CONTENT.—The regulations under this section
shall provide that—
ƒ(1) the information to be compiled and submit-
ted under this section by designated insurers and in-
surers that are not designated insurers shall be of
such types, data elements, and specificity that is as
identical as possible to the types, data elements, and
specificity of information required under this title of
designated and nondesignated insurers, respectively,
for designated MSA’s and shall be subject to the pro-
visions of section 204(b)(2)(B); and
ƒ(2) the information compiled and submitted
under this section shall be compiled and submitted on
the basis of each 5-digit zip code in which the insured
risks are located, rather than on the basis of des-
ignated MSA and applicable region (as otherwise re-
quired in this title).
ƒ(c) DESIGNATION OF RURAL AREAS.—For purposes
of this section, the term ‘‘designated rural area’’ means the
following:
ƒ(1) FIRST 5 YEARS.—With respect to the first
5 annual reporting periods to which the reporting re-
quirements under this section apply, any of the 50
rural areas designated by the Secretary and specified
in regulations issued pursuant to section 224, which
shall not be amended or revised after issuance. The
Secretary shall (to the extent possible) designate 1
rural area under this paragraph in each State of the
United States.
ƒ(2) AFTER FIRST 5 YEARS.—With respect to
annual reporting periods thereafter, a rural area for
which a designation made by the Secretary under this
paragraph is in effect, pursuant to the following re-
quirements:
ƒ(A) The designations shall be made for
each of the successive 5-year periods at the time
provided in subparagraph (C), and the first such
period shall be the 5-year period beginning upon
the commencement of the 6th annual reporting
period to which the reporting requirements under
this title apply.
ƒ(B) The Secretary shall designate 50 rural
areas as designated rural areas for each such 5-
year period and shall designate such rural areas
based upon the information and recommenda-
tions made in the report under section 220(b) re-
lating to the period.
ƒ(C) The Secretary shall make the designa-
tion of rural areas for an ensuing 5-year period
by regulations issued—
ƒ(i) not later than the date occurring
12 months before the commencement of the
5-year period; and
ƒ(ii) not later than 6 months after the
submission to the Secretary of the report
under section 220(b) relating to such period.
ƒ(D) The designations for a 5-year period
shall take effect upon the commencement of the
first annual reporting period of the 5-year pe-
riod that begins at least 12 months after the is-
suance of the regulations making such designa-
tions, and shall remain in effect until the expira-
tion of the 5-year period.
Notwithstanding any other provision of this section, the des-
ignation of a rural area shall remain in effect until a suc-
ceeding designation of rural areas under paragraph (2)
takes effect.
ƒSEC. 208. WAIVER OF REPORTING REQUIREMENTS.
ƒ(a) WAIVER FOR STATES COLLECTING EQUIVALENT
INFORMATION.—
ƒ(1) AUTHORITY.—Subject to the requirements
under this section, the Secretary shall provide, by reg-
ulation, for the waiver of the applicability of the pro-
visions of sections 204, 205, and 207 for each insurer
transacting business within a State referred to in
paragraph (2), but only with respect to information
required to be submitted under such sections that re-
lates to agents or insured risks located in the State.
ƒ(2) REQUIREMENTS.—The Secretary may make
a waiver pursuant to paragraph (1) only with respect
to a State that the Secretary determines has in effect
a law or other requirement that—
ƒ(A) requires insurers to submit to the
State information that is at least the same or
equivalent to the information that is required to
be submitted to the Secretary pursuant to sec-
tions 204, 205, and 207;
ƒ(B) provides for adequate enforcement of
such law or other requirements;
ƒ(C) provides for the same annual report-
ing period used by the Secretary under this title
and for submission of the information to the Sec-
retary in a timely fashion, as determined by the
Secretary; and
ƒ(D) provides that, to the extent statistical
agents are permitted to submit information to
the State on behalf of insurers, such agents are
101
ƒSEC. 209. REPORTING BY PRIVATE MORTGAGE INSURERS.
ƒ(a) HMDA REPORTING.—On an annual basis, the
Financial Institutions Examination Council shall deter-
mine the extent to which each insurer providing private
mortgage insurance is making available to the public and
submitting to the appropriate agency information regard-
ing such insurance that is equivalent to the information
regarding mortgages required to be reported under the
Home Mortgage Disclosure Act of 1975.
ƒ(b) REPORTING UNDER THIS TITLE.—
ƒ(1) CERTIFICATION
OF
NONCOMPLIANCE.—If,
for any annual period referred to in subsection (a),
such Council determines that any insurer providing
private mortgage insurance is not making available
to the public or submitting the information referred
to in subsection (a) or that the information made
available or submitted is not equivalent information
as described in subsection (a), then the Council shall
notify the insurer of such noncompliance. If, after the
expiration of a reasonable period of time, the insurer
has not remedied such noncompliance to the satisfac-
tion of the Council, then the Council shall imme-
diately certify such noncompliance to the Secretary.
ƒ(2) REQUIREMENT.—Upon the receipt of a cer-
tification under paragraph (1), the Secretary shall,
by regulation, require such insurer to submit to the
102
Secretary information regarding such insurance that
complies with the provisions of section 204 that are
applicable to such insurance. Such regulations shall
be issued not later than 6 months after receipt of such
certification and shall apply to the first succeeding
annual reporting period that begins at least 6 months
after issuance of such regulations and to each annual
reporting period thereafter.
ƒSEC. 210. USE OF DATA CONTRACTOR AND STATISTICAL
AGENTS.
ƒ(a) DATA COLLECTION CONTRACTOR.—The Secretary
may contract with a data collection contractor to collect the
information required to be maintained and submitted
under sections 204, 205, 207, 208, 209(b), and 211 if the
contractor agrees to collect the information pursuant to the
terms and conditions of such sections and this title and the
regulations issued thereunder. Information submitted to
such contractor shall be available to the public to the same
extent as if the information were submitted directly to the
Secretary.
ƒ(b) USE OF STATISTICAL AGENTS.—
ƒ(1) IN GENERAL.—The Secretary shall provide,
by regulation, that insurers may submit any infor-
mation required under sections 204, 205, 207, and
103
209(b) through statistical agents acting on behalf of
more than one insurer.
ƒ(2) PROTECTIONS.—The regulations issued
under this subsection shall permit submission of in-
formation through a statistical agent only if the Sec-
retary determines that—
ƒ(A) the statistical agent has adequate pro-
cedures to protect the integrity of the informa-
tion submitted;
ƒ(B) the statistical agent has a statistical
plan and format for submitting the information
that meets the requirements of this title;
ƒ(C) the statistical agent has procedures in
place that ensure that information reported
under the statistical plan in connection with re-
porting under this title and submitted to the Sec-
retary is not subject to any adjustment by the
statistical agent or an insurer for reasons other
than technical accuracy and conformance to the
statistical plan;
ƒ(D) the information of an insurer is not
subject to review by any other insurer before
being made available to the public; and
104
ƒ(E) acceptance of the information through
the statistical agent will not adversely affect the
accuracy of the information reported.
ƒ(3) DISCONTINUANCE OF ACCEPTANCE OF IN-
FORMATION.—The Secretary may discontinue accept-
ing information reported through a statistical agent
pursuant to this subsection if the Secretary deter-
mines that the requirements for such reporting are no
longer met or that continued acceptance of such infor-
mation is contrary to the goal of ensuring the accu-
racy of the information reported.
ƒ(4) GAO AUDITS.—The Comptroller General
shall, at the request of the Secretary, audit informa-
tion collection and submission performed under this
subsection by data collection contractors or statistical
agents to ensure that the integrity of the information
collected and submitted is protected. In determining
whether to request an audit of a statistical agent, the
Secretary shall consider the sufficiency (for purposes
of this title) of audits of the statistical agent con-
ducted in connection with State insurance regulation.
ƒ(5) LIABILITY.—Notwithstanding any use of a
statistical agent as authorized under this subsection,
an insurer using such an agent shall be responsible
for compliance with the requirements under this title.
105
ƒSEC. 211. REPORTING OF INFORMATION REGARDING IN-
VESTMENTS BY INSURERS.
ƒ(a) IN GENERAL.—The Secretary of Housing and
Urban Development shall, by regulation, require that each
designated insurer that makes a designated investment in
a property or business located in a designated MSA shall
compile and submit to the Secretary for each annual report-
ing period, the following information:
ƒ(1) DIRECT LOANS.—
ƒ(A) COMMERCIAL REAL ESTATE LOANS.—
The total number of loans for the purchase of
commercial real estate made by the designated
insurer, the aggregate amount of such loans, and
the amount of each such loan, by designated
MSA and applicable region in which the real es-
tate for which the loan was made is located.
ƒ(B) 
SINGLE-FAMILY
MORTGAGES.—The
total number of mortgage loans for the purchase
of 1- to 4-family dwellings made by the des-
ignated insurer, the aggregate amount of such
loans, and the amount of each such loan, by des-
ignated MSA and applicable region in which the
dwelling for which the loan was made is located,
which information shall be disaggregated by ra-
cial characteristics, income level, and gender of
the borrower under the loan.
106
ƒ(C) 
COMMERCIAL
AND
INDUSTRIAL
LOANS.—The total number of commercial and
industrial loans made by the designated insurer,
the aggregate amount of such loans, and the
amount of each such loan, by designated MSA
and applicable region in which the property or
business involved in the loan is located, which
information shall be disaggregated by the size of
business of the borrower under the loan and by
the ownership characteristic of the business,
which shall be classified as either minority-
owned, women-owned, or otherwise-owned.
ƒ(2) LOAN PURCHASES.—
ƒ(A) COMMERCIAL REAL ESTATE LOANS.—
The total number of loans for the purchase of
commercial real estate purchased by the des-
ignated insurer, the aggregate amount of such
loans, and the amount of each such loan, by des-
ignated MSA and applicable region in which the
real estate for which the loan was made is lo-
cated.
ƒ(B) 
SINGLE-FAMILY
MORTGAGES.—The
total number of mortgage loans for the purchase
of 1- to 4-family dwellings purchased by the des-
ignated insurer, the aggregate amount of such
107
loans, and the amount of each such loan, by des-
ignated MSA and applicable region in which the
dwelling for which the loan was made is located,
which information shall be disaggregated by ra-
cial characteristics, income level, and gender of
the borrower under the loan.
ƒ(C) 
COMMERCIAL
AND
INDUSTRIAL
LOANS.—The total number of commercial and
industrial loans purchased by the designated in-
surer, the aggregate amount of such loans, and
the amount of each such loan, by designated
MSA and applicable region in which the prop-
erty or business involved in the loan is located,
which information shall be disaggregated by the
size of business of the borrower under the loan
and by the ownership characteristic of the busi-
ness, which shall be classified as either minority-
owned, women-owned, or otherwise-owned.
ƒ(3) OTHER INVESTMENTS.—For such other in-
vestments made by the designated insurer, as the Sec-
retary may designate pursuant to subsection (b), the
total number of such investments, the aggregate
amount of such investments, and the amount of each
such investment, by designated MSA and applicable
region in which the property or business involved in
108
the investment is located, as determined by the Sec-
retary, which information shall be disaggregated by
the size of business of the borrower under the loan and
by the ownership characteristic of the business, which
shall be classified as either minority-owned, women-
owned, or otherwise-owned.
ƒ(b) DESIGNATION OF OTHER INVESTMENTS.—
ƒ(1) IN GENERAL.—For purposes of subsection
(a)(3), the Secretary may designate activities and in-
vestments other than the investments described in
paragraphs (1) and (2) of subsection (a) for which
designated insurers shall compile and submit infor-
mation under this section.
ƒ(2) REQUIREMENT.—In making designations
under this subsection, the Secretary shall designate
(A) activities and investments that significantly bene-
fit low- and moderate-income families and persons,
small businesses in distressed communities, or
minority- or women-owned businesses, and (B) activi-
ties and investments that contribute to the creation of
jobs and economic development of distressed commu-
nities.
ƒ(3) CONSIDERATIONS.—The Secretary shall
specifically consider for designation under this sub-
section investments in community development finan-
109
cial institutions, community development corpora-
tions, State-issued bonds, and securities backed by
State development funds.
ƒ(c) SIZE OF BUSINESS.—The Secretary shall, by reg-
ulation, establish various categories of the sizes of busi-
nesses, for purposes of disaggregating information under
paragraphs (1)(C), (2)(C), and (3) of subsection (a) by var-
ious sizes of businesses.
ƒSEC. 212. SUBMISSION OF INFORMATION TO SECRETARY
AND MAINTENANCE OF INFORMATION.
ƒ(a) PERIOD OF MAINTENANCE.—Each insurer re-
quired by this title to compile and submit information to
the Secretary shall maintain such information for the 3-
year period beginning upon the conclusion of the annual
reporting period to which such information relates. The
Secretary shall maintain any information submitted to the
Secretary for such period as the Secretary considers appro-
priate and feasible to carry out the purposes of this title
and to allow for historical analysis and comparison of the
information.
ƒ(b) SUBMISSION.—The Secretary shall issue regula-
tions prescribing a standard schedule (taking into consider-
ation the provisions of section 214(a)), format, and method
for submitting information under this title to the Secretary.
The format and method of submitting the information shall
110
facilitate and encourage the submission in a form readable
by a computer. Any insurer submitting information to the
Secretary may submit in writing to the Secretary any ad-
ditional information or explanations that the insurer con-
siders relevant to the decision by the insurer to sell insur-
ance.
ƒSEC. 213. COMPILATION OF AGGREGATE INFORMATION.
ƒ(a) INSURANCE INFORMATION.—For each annual re-
porting period, the Secretary shall—
ƒ(1) compile, for each designated MSA, by des-
ignated line (and if such information is submitted, by
subline or coverage type)—
ƒ(A) information submitted under sections
204, 205, 208, and 209(b) and loss ratios (if the
submission of loss information is required), ag-
gregated by applicable region for all insurers
submitting such information; and
ƒ(B) such information and loss ratios (if
the submission of loss information is required),
aggregated by applicable region for each such in-
surer; and
ƒ(2) produce tables based on information sub-
mitted under sections 204, 205, 208, and 209(b) for
each designated MSA, by insurer and for all insurers,
111
by designated line (and if such information is sub-
mitted, by subline or coverage type), indicating—
ƒ(A) insurance underwriting patterns ag-
gregated for the applicable regions within the
MSA, grouped according to location, age of prop-
erty, income level, and racial characteristics of
neighborhoods; and
ƒ(B) loss ratios based on the information
obtained pursuant to sections 204, 205, 208, and
209(b) (if the submission of loss information is
required), aggregated for the applicable regions
within the MSA, grouped according to location,
age of property, income level, and racial charac-
teristics of neighborhoods.
ƒ(b) AGENT INFORMATION.—For each annual report-
ing period and for each designated MSA, the Secretary shall
compile, by designated line, the information submitted
under section 204(b)(1)(C)—
ƒ(1) by designated insurer by applicable region;
ƒ(2) by designated insurer aggregated for the ap-
plicable regions within the designated MSA, grouped
according to location, age of property, income level,
and racial characteristics; and
ƒ(3) for all designated insurers that have sub-
mitted such information for the designated MSA, ag-
112
gregated for the applicable regions within the des-
ignated MSA, grouped according to location, age of
property, income level, and racial characteristics.
ƒ(c) RURAL INSURANCE INFORMATION.—For each an-
nual reporting period, the Secretary shall—
ƒ(1) compile for each applicable 5-digit zip code,
by designated line (and if such information is sub-
mitted, by subline or coverage type)—
ƒ(A) information regarding insurance in
rural areas submitted under sections 207 and
208 and loss ratios, for all insurers for which
such information is submitted; and
ƒ(B) such information and loss ratios, for
each such insurer; and
ƒ(2) produce tables for each 5-digit zip code
based on information regarding insurance in rural
areas submitted under sections 207 and 208, by in-
surer and for all such insurers for which information
is submitted under such sections, by designated line
(and if such information is submitted, by subline or
coverage type), indicating—
ƒ(A) insurance underwriting patterns, ag-
gregated by zip codes, grouped according to loca-
tion, age of property, income level, and racial
113
characteristics of neighborhoods (where such de-
mographic information is available); and
ƒ(B) loss ratios, based on the information
obtained pursuant to sections 207 and 208, ag-
gregated by zip codes, grouped according to loca-
tion, age of property, income level, and racial
characteristics of neighborhoods (where such de-
mographic information is available).
ƒ(d) INVESTMENT INFORMATION.—For each annual
reporting period, the Secretary shall—
ƒ(1) compile the information submitted under
section 211, for each designated MSA—
ƒ(A) aggregated by applicable region for all
insurers, by designated investment; and
ƒ(B) aggregated by applicable region for
each insurer, by designated investment; and
ƒ(2) produce tables for each designated MSA, for
each insurer and for all insurers, indicating patterns
of designated investments, which shall be aggregated
by applicable region, grouped according to racial
characteristics, income level, and gender of the bor-
rower or size of business of the borrower and owner-
ship characteristic of the business, as applicable.
ƒSEC. 214. AVAILABILITY AND ACCESS SYSTEM.
ƒ(a) AVAILABILITY TO PUBLIC.—
114
ƒ(1) IN GENERAL.—The Secretary shall main-
tain and make available to the public, in accordance
with the requirements of this section, any information
submitted to the Secretary under this title and any
information compiled by the Secretary under this
title.
ƒ(2) TIMING.—The Secretary shall make such
information publicly available on a timetable deter-
mined by the Secretary, but not later than 9 months
after the conclusion of the annual reporting period to
which the information relates, except that such infor-
mation shall not be made available to the public until
it is available in its entirety unless not all the infor-
mation required to be reported is available by such
date.
ƒ(b) PUBLIC ACCESS SYSTEM.—
ƒ(1) IMPLEMENTATION.—The Secretary shall
implement a system to facilitate access to any infor-
mation required to be made available to the public
under this title.
ƒ(2) BASES OF AVAILABILITY.—The system shall
provide access in the following manners:
ƒ(A) ACCESS
TO
ITEMIZED
INFORMA-
TION.—To information submitted under sections
204, 205, 207, 208, 209(b), and 211 on the basis
115
of the insurer submitting the information, on the
basis of designated MSA and applicable region
(or in the case of rural information submitted
under section 207 or 208, on the basis of 5-digit
zip code), and on any other basis the Secretary
considers feasible and appropriate.
ƒ(B) ACCESS
TO
AGGREGATE
INFORMA-
TION.—To aggregate information compiled under
section 213, on the basis of (i) the insurer sub-
mitting the information, and (ii) designated
MSA and applicable region (or in the case of
rural information submitted under section 207
or 208, on the basis of 5-digit zip code), and on
any other basis the Secretary considers feasible
and appropriate.
ƒ(3) METHOD.—The access system shall include
a toll-free telephone number that can be used by the
public to request such information and the address at
which a written request for such information may be
submitted.
ƒ(4) FORM.—The Secretary shall, by regulation,
establish the forms in which such information may be
furnished by the Secretary. Such forms shall include
written statements, forms readable by widely used
personal computers, and, if feasible, on-line access for
116
personal computers. The Secretary shall provide the
information available under this section in any such
form requested by the person requesting the informa-
tion, except that the Secretary may charge a fee for
providing such information, which may not exceed
the amount, determined by the Secretary, that is
equal to the cost of reproducing the information.
ƒ(5) ANALYSIS SOFTWARE.—The Secretary shall
make available to the public software that can be used
on a personal computer to analyze the information
provided under this section. The software shall be ca-
pable of analyzing the information by insurer, des-
ignated line, race, gender, MSA, and applicable re-
gion. It shall also contain data compiled by the Sec-
retary for each MSA and applicable region on income
levels, age of property, and racial characteristics that
can be used to evaluate the information provided
under this title by insurers. The software and any ac-
companying data shall be made available to the pub-
lic without charge, except for an amount, determined
by the Secretary, which shall not exceed the actual
cost of reproducing the software and the accompany-
ing data.
ƒ(c) PROTECTIONS
REGARDING
LOSS
INFORMA-
TION.—
117
ƒ(1) PROHIBITION OF DISCLOSURE OF LOSS IN-
FORMATION.—Notwithstanding any other provision of
this title, the Secretary may not make available to the
public or otherwise disclose any information submit-
ted under this title regarding the amount or number
of claims paid by any insurer, the amount of losses
of any insurer, or the loss experience for any insurer,
except (A) in the form of a loss ratio (expressing the
relationship of claims paid to premiums) made avail-
able or disclosed in compliance with the provisions of
paragraph (2), or (B) as provided in paragraph (3).
ƒ(2) PROTECTION OF IDENTITY OF INSURER.—
In making available to the public or otherwise disclos-
ing a loss ratio for an insurer—
ƒ(A) the Secretary may not identify the in-
surer to which the loss ratio relates; and
ƒ(B) the Secretary may disclose the loss
ratio only in a manner that does not allow any
party to determine the identity of the specific in-
surer to which the loss ratio relates, except par-
ties having access to information under para-
graph (3).
ƒ(3) CONFIDENTIALITY
OF
INFORMATION
DIS-
CLOSED
TO
GOVERNMENTAL
AGENCIES.—The Sec-
retary may make information referred to in para-
118
graph (1) and the identity of the specific insurer to
which such information relates available to any Fed-
eral entity and any State agency responsible for regu-
lating insurance in a State and may otherwise dis-
close such information to any such entity or agency,
but only to the extent such entity or agency agrees not
to make any such information available or disclose
such information to any other person.
ƒSEC. 215. DESIGNATIONS.
ƒ(a) DESIGNATION OF MSA’S.—For purposes of this
title, the term ‘‘designated MSA’’ means the following
MSA’s:
ƒ(1) FIRST 5 YEARS.—With respect to the first
5 annual reporting periods to which the reporting re-
quirements under this title apply (pursuant to section
226), any of the 150 MSA’s selected as follows:
ƒ(A) The Secretary shall select the 50
MSA’s having the largest populations, as deter-
mined by the Secretary and specified in regula-
tions issued pursuant to section 224, which shall
not be amended or revised after issuance.
ƒ(B) The Secretary shall select 100 addi-
tional MSA’s, on a basis that provides for (i) ge-
ographic diversity among the designated MSA’s
119
under this paragraph, and (ii) diversity in size
of the populations among such MSA’s.
ƒ(2) AFTER FIRST 5 YEARS.—With respect to
annual reporting periods thereafter, an MSA for
which a designation under this paragraph is in effect,
pursuant to the following requirements:
ƒ(A) The designations shall be made for
each of the successive 5-year periods at the time
provided in subparagraph (C), and the first such
period shall be the 5-year period beginning upon
the commencement of the 6th annual reporting
period to which the reporting requirements under
this title apply.
ƒ(B) The Secretary shall designate not less
than 150 MSA’s as designated MSA’s for each
such 5-year period and shall designate such
MSA’s based upon the information and rec-
ommendations made in the report under section
220(b) relating to the period.
ƒ(C) The Secretary shall make the designa-
tion of MSA’s for an ensuing 5-year period by
regulations issued—
ƒ(i) not later than the date occurring
12 months before the commencement of the
5-year period; and
120
ƒ(ii) not later than 6 months after the
submission to the Secretary of the report
under section 220(b) relating to such period.
ƒ(D) The designations for a 5-year period
shall take effect upon the commencement of the
first annual reporting period of the 5-year pe-
riod that begins at least 12 months after the is-
suance of the regulations making such designa-
tions, and shall remain in effect until the expira-
tion of the 5-year period.
Notwithstanding any other provision of this section, the des-
ignation of an MSA shall remain in effect until a succeed-
ing designation of MSA’s under paragraph (2) takes effect.
ƒ(b) DESIGNATION
OF INSURERS.—The Secretary
shall designate, for each designated line and each State, in-
surers doing business in the lines as designated insurers in
the State for purposes of this title, subject to the following
requirements:
ƒ(1) HIGHEST AGGREGATE PREMIUM VOLUME.—
ƒ(A) GENERAL
RULE.—For a State, the
Secretary shall designate, for each designated
line, each of the insurers and insurer groups in-
cluded in the class established under this para-
graph for the State.
121
ƒ(B) DETERMINATION.—In the State, the
Secretary shall rank the insurers and insurer
groups in each designated line from the insurer
or group having the largest aggregate premium
volume in the State for such line to the insurer
or group having the smallest such aggregate pre-
mium volume and shall include in the class for
the State only (i) the insurer or group of the
highest rank, and (ii) each insurer or group of
successively lower rank if the inclusion of such
insurer or group in the class does not result in
the sum of such aggregate premium volumes for
insurers and groups in the class exceeding 80
percent of the total aggregate premium volume in
the State for the line, and (iii) the first such suc-
cessively lower ranked insurer or insurer group
whose inclusion in the class results in such sum
exceeding 80 percent of the total aggregate pre-
mium volume in the State for the line.
ƒ(2) MINIMUM AGGREGATE PREMIUM VOLUME.—
For a State, the Secretary shall designate, for each
designated line, each insurer and insurer group not
designated pursuant to paragraph (1) whose premium
volume in the State for the designated line exceeds 1
122
percent of the total aggregate premium volume in the
State for the line.
ƒ(3) FAIR PLANS AND JOINT UNDERWRITING AS-
SOCIATIONS.—For a State, the Secretary shall des-
ignate, for each designated line—
ƒ(A) each statewide plan under part A of
title XII of the National Housing Act to assure
fair access to insurance requirements, and
ƒ(B) each joint underwriting association,
that provides insurance under such line.
ƒ(4) DURATION.—The Secretary shall designate
insurers under this subsection once every 5 years.
Each insurer designated shall be a designated insurer
for each of the first 5 successive annual reporting pe-
riods commencing after such designation.
ƒ(c) DESIGNATION OF LINES OF INSURANCE.—
ƒ(1) IN GENERAL.—The Secretary shall, by reg-
ulation, designate lines of insurance as designated
lines for purposes of this title, as follows:
ƒ(A) AUTOMOBILE.—The Secretary shall
designate private passenger automobile insurance
and shall also designate any sublines and cov-
erage types of private passenger automobile in-
surance that the Secretary considers appropriate
to determine and compare the availability, af-
123
fordability, and type of coverage in such line
among applicable regions.
ƒ(B) NONCOMMERCIAL
INSURANCE
FOR
RESIDENTIAL
PROPERTY.—The Secretary shall
designate homeowners insurance and dwelling
fire and allied lines, and shall distinguish the
coverage types in such lines by the perils covered
and by market or replacement value. For pur-
poses of this title, homeowners insurance shall
not include any renters coverage or coverage for
the personal property of a condominium owner.
ƒ(C) BID, PERFORMANCE, AND
PAYMENT
BONDS FOR SMALL BUSINESSES.—The Secretary
shall designate lines, and any sublines and cov-
erage types, of bid, performance, and payment
bonds for small businesses, for which reporting is
required pursuant to section 206, that the Sec-
retary considers appropriate to determine and
compare the availability, affordability, and qual-
ity or type of coverage in bid, performance, and
payment bonds for small businesses among ap-
plicable regions.
ƒ(2) REPORT.—At any time the Secretary deter-
mines that any line of insurance not described in
paragraph (1) should be a designated line because
124
disparities in coverage provided under such line exist
among geographic areas having different income levels
or racial composition, the Secretary shall submit a
report recommending designating such line of insur-
ance as a designated line for purposes of this title to
the Committee on Banking, Finance and Urban Af-
fairs of the House of Representatives and the appro-
priate Committees of the Senate.
ƒ(3) DURATION.—
ƒ(A) IN GENERAL.—Except as provided in
subparagraph (B), the Secretary shall make the
designations under this subsection once every 5
years, by regulation, and each line and subline
or coverage type designated under such regula-
tions shall be designated for each of the first 5
successive annual reporting periods occurring
after issuance of the regulations.
ƒ(B) ALTERATION.—During any 5-year pe-
riod referred to in subparagraph (A) in which
designations are in effect, the Secretary may
amend or revise the designated lines, sublines,
and coverage types only by regulation and only
in accordance with the requirements of this sub-
section. Such regulations amending or revising
designations shall apply only to annual report-
125
ing periods beginning after the expiration of the
6-month period beginning on the date of issuance
of the regulations.
ƒ(d) TIMING OF DESIGNATIONS.—The Secretary shall
make the designations required by subsections (b)(4) and
(c)(3)(A) and notify interested parties during the 6-month
period ending 6 months before the commencement of the
first annual reporting period to which such designations
apply.
ƒ(e) OBTAINING INFORMATION.—The Secretary may
require insurers to submit to the Secretary such informa-
tion as the Secretary considers necessary to make designa-
tions specifically required under this title. The Secretary
may not require insurers to submit any information under
this subsection that relates to any line of insurance not spe-
cifically authorized to be designated pursuant to this title
or that is to be used solely for the purpose of a report under
subsection (c)(2).
ƒSEC. 216. IMPROVED METHODS AND REPORTING ON BASIS
OF OTHER AREAS.
ƒ(a) DEVELOPMENT OF IMPROVED METHODS.—The
Secretary shall develop, or assist in the improvement of,
methods of matching addresses and applicable regions to fa-
cilitate compliance by insurers, in as economical a manner
as possible, with the requirements of this title. The Sec-
126
retary shall allow insurers, or statistical agents acting on
behalf of insurers, to match addresses and applicable re-
gions through the use of 9-digit zip codes if the Secretary
determines that such use will substantially reduce the cost
and burden to insurers of such matching without signifi-
cant adverse impact on the reliability of the matching.
ƒ(b) ADDRESS CONVERSION SOFTWARE.—The Sec-
retary shall make available, to any insurer required to pro-
vide information to the Secretary under this title, computer
software that can be used to convert addresses to applicable
regions within designated MSA’s. The software shall be
made available in forms that provide such conversion for
designated MSA’s on a nationwide basis and on a State-
by-State basis. The software shall be made available not less
than 6-months before the first annual reporting period to
which the reporting requirements under this title apply
(pursuant to section 226) and shall be updated annually.
The software shall be made available without charge, except
for an amount, determined by the Secretary, which shall
not exceed the actual cost of reproducing the software.
ƒ(c) CONVERTIBILITY.—
ƒ(1) AUTHORITY.—The Secretary may, by regu-
lation, provide for insurers to comply with the re-
quirements under sections 204, 205, 209(b), and 211
by reporting the information required under such sec-
127
tions on the basis of geographical location other than
MSA and applicable region, but only if the Secretary
determines that information reported on such other
basis is convertible to the basis of MSA and applica-
ble region and such conversion does not affect the ac-
curacy of the information.
ƒ(2) LIMITATION.—With respect to any informa-
tion submitted on the basis of geographical location
other than designated MSA and applicable region
pursuant to paragraph (1), the Secretary may dis-
close the information only on the basis of designated
MSA and applicable region.
ƒSEC. 217. ANNUAL REPORTING PERIOD.
ƒ(a) IN GENERAL.—For purposes of this title, the an-
nual reporting periods shall be the 12-month periods com-
mencing in each calendar year on the same day, which shall
be selected under subsection (b) by the Secretary.
ƒ(b) SELECTION.—Not later than the expiration of the
6-month period beginning on the date of the enactment of
this Act, the Secretary shall, by regulation, select a day of
the year upon which all annual reporting periods shall
commence. In determining such day, the Secretary shall
consider the reporting periods used for purposes of State
and other insurance statistical reporting systems, in order
to minimize the burdens on insurers.
128
ƒSEC. 218. DISCLOSURES BY INSURERS TO APPLICANTS
AND POLICYHOLDERS.
ƒ(a) IN GENERAL.—The Secretary shall, by regula-
tion, require the following disclosures:
ƒ(1) APPLICANTS.—Each insurer that, through
the insurer, or an agent or broker, declines a written
application or written request to issue an insurance
policy under a designated line shall provide to the ap-
plicant at the time of such declination, through such
insurer, agent, or broker, one of the following:
ƒ(A) A written explanation of the specific
reasons for the declination.
ƒ(B) Written notice that (i) the applicant
may submit to the insurer, agent, or broker,
within 90 days of such notice, a written request
for a written explanation of the reasons for the
declination, and (ii) pursuant to such a request,
an explanation shall be provided to the appli-
cant within 21 days after receipt of such request.
If an insurer, agent, or broker making a declination
receives a written request referred to in subparagraph
(B) within such 90-day period, the insurer, agent, or
broker shall provide a written explanation referred to
in such subparagraph within such 21-day period.
ƒ(2) POLICYHOLDERS.—Each insurer that can-
cels or refuses to renew an insurance policy under a
129
designated line shall provide to the policyholder, in
writing and within an appropriate period of time as
determined by the Secretary, the reasons for canceling
or refusing to renew the policy.
ƒ(b) MODEL ACTS.—In issuing regulations under sub-
section (a), the Secretary shall consider relevant portions
of model acts developed by the National Association of In-
surance Commissioners.
ƒ(c) PREEMPTION.—Subsection (a) shall not be con-
strued to annul, alter, or effect, or exempt any insurer,
agent, or broker subject to the provisions of subsection (a)
from complying with any laws or requirements of any State
with respect to notifying insurance applicants or policy-
holders of the reasons for declination or cancellation of, or
refusal to renew insurance, except to the extent that such
laws or requirements are inconsistent with subsection (a)
(or the regulations issued thereunder) and then only to the
extent of such inconsistency. The Secretary is authorized to
determine whether such inconsistencies exist and to resolve
issues regarding such inconsistencies. The Secretary may
not provide that any State law or requirement is inconsist-
ent with subsection (a) if it imposes requirements equiva-
lent to the requirements under such subsection or require-
ments that are more stringent or comprehensive, in the de-
termination of the Secretary.
130
ƒ(d) IMMUNITY.—In issuing regulations under sub-
section (a), the Secretary shall specifically consider the ne-
cessity of providing insurers, agents, and brokers immunity
solely for the act of conveying or communicating the reasons
for a declination or cancellation of, or refusal to renew in-
surance on behalf of a principal making such decision. The
Secretary may provide for immunity under the regulations
issued under subsection (a) if the Secretary determines that
such a provision is necessary and in the public interest,
except that the Secretary may not provide immunity for
any conduct that is negligent, reckless, or willful.
ƒ(e) ENFORCEMENT.—The Secretary may authorize
the States to enforce the requirements under regulations is-
sued under subsection (a).
ƒSEC. 219. ENFORCEMENT.
ƒ(a) CIVIL PENALTIES.—Any insurer who is deter-
mined by the Secretary, after providing opportunity for a
hearing on the record, to have violated any requirement
pursuant to this title shall be subject to a civil penalty of
not to exceed $5,000 for each day during which such viola-
tion continues.
ƒ(b) INJUNCTION.—The Secretary may bring an ac-
tion in an appropriate United States district court for ap-
propriate declaratory and injunctive relief against any in-
131
surer who violates the requirements referred to in subsection
(a).
ƒ(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.
ƒSEC. 220. REPORTS.
ƒ(a) ANNUAL REPORT.—The Secretary shall annually
report to the Committee on Banking, Finance and Urban
Affairs of the House of Representatives and the appropriate
Committees of the Senate on the implementation of this title
and shall make recommendations to such Committees on
such additional legislation as the Secretary deems appro-
priate to carry out this title. The Secretary shall include
in each annual report a description of any complaints or
problems resulting from the implementation of this title, of
which the Secretary has knowledge, made by (or on behalf
of) insurance policyholders that concern the disclosure of
information regarding policyholders and any recommenda-
tions for addressing such problems. Each report shall spe-
cifically address whether granting property and casualty
insurance powers to other financial intermediaries would
significantly reduce redlining and other discriminatory in-
surance practices and the Secretary shall consult with the
appropriate financial institution regulators regarding such
issues in preparing the report.
132
ƒ(b) GAO REPORTS.—
ƒ(1) IN GENERAL.—The Comptroller General of
the United States shall submit a report under this
subsection to the Secretary and the Congress for each
5-year period referred to in sections 207(c)(2) and
215(a)(2), which contains information to be used by
the Secretary in implementing this title during such
period.
ƒ(2) TIMING.—The report under this subsection
for each such 5-year period shall be submitted not
later than the date occurring 18 months before the
commencement of the period to which the report re-
lates.
ƒ(3) CONTENTS.—A report under this subsection
shall include the following information:
ƒ(A) An analysis of the adequacy of the im-
plementation of this title and any recommenda-
tions of the Comptroller General for improving
the implementation.
ƒ(B) The costs to the Federal Government,
insurers, and consumers of implementing and
complying with this title.
ƒ(C) Any beneficial or harmful effects re-
sulting from the requirements of this title.
133
ƒ(D) An analysis of whether, considering
the purposes of this title, insurers are required
by this title (or by implementing regulations) to
submit appropriate information.
ƒ(E) An analysis of whether sufficient evi-
dence exists of patterns of disparities in the
availability, affordability, and quality or type of
insurance coverage to warrant continued appli-
cability of the requirements of this title.
ƒ(F) An analysis of whether the group of
designated MSA’s in effect at the time of the re-
port are appropriate for purposes of this title.
ƒ(G) Specific recommendations, for use by
the Secretary in designating MSA’s for the 5-
year period for which the report is made, with
regard to—
ƒ(i) the characteristics of MSA’s that
should be included in the group of des-
ignated MSA’s;
ƒ(ii) the number of MSA’s that should
be included in the group;
ƒ(iii) the number of MSA’s having
each particular characteristic that should be
included in the group; and
134
ƒ(iv) the characteristics of MSA’s, and
number of MSA’s having each such char-
acteristic, that should be removed from the
group of designated MSA’s in effect at the
time of the report.
ƒ(H) With respect only to the first report
required under this subsection, recommendations
of whether the study conducted under section 205
should be continued beyond the date in section
205(b)(8) and, if so, whether the requirements re-
garding the submission of information under the
study should be expanded or changed with re-
spect to insurers, MSA’s, lines, sublines or cov-
erage types of insurance, and types of small
businesses, or whether the study should be al-
lowed to terminate under law.
ƒ(I) An analysis of whether the group of
designated rural areas in effect at the time of the
report are appropriate for purposes of this title.
ƒ(J) Specific recommendations, for use by
the Secretary in designating rural areas for pur-
poses of section 207 for the 5-year period for
which the report is made, with regard to—
136
ƒSEC. 221. TASK FORCE ON AGENCY APPOINTMENTS.
ƒ(a) ESTABLISHMENT.—Not later than 90 days after
the date of the enactment of this Act, the Secretary shall
establish a task force on insurance agency appointments.
The task force shall—
ƒ(1) consist of representatives of appropriate
Federal agencies, property and casualty insurance
agents, including specifically minority insurance
agents, property and casualty insurers, State insur-
ance regulators, and community, consumer, and civil
rights organizations;
ƒ(2) have a significant representation from mi-
nority insurance agents; and
ƒ(3) be chaired by the Secretary or the Sec-
retary’s designee.
ƒ(b) FUNCTION.— The task force shall—
ƒ(1) review the problems inner city and minor-
ity agents may have in receiving appointments to
represent property and casualty insurers and consider
the effects such problems have on the availability, af-
fordability, and quality or type of insurance, espe-
cially in underserved areas;
ƒ(2) review the practices of insurers in termi-
nating agents and consider the effects such practices
have on the availability, affordability, and quality or
137
type of insurance, especially in underserved areas;
and
ƒ(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 insurers should take
to increase their appointments of such agents.
ƒ(c) REPORT AND TERMINATION.—The task force shall
report to the Committee on Banking, Finance and Urban
Affairs of the House of Representatives and the appropriate
Committees of the Senate its findings under paragraphs (1)
and (2) of subsection (b) and its recommendations under
paragraph (3) of subsection (b) not later than 2 years after
the date of the enactment of this Act. The task force shall
terminate when the report is submitted to the Committees.
ƒSEC. 222. STUDIES.
ƒ(a) STUDY OF INSURANCE PRESCREENING.—
ƒ(1) IN GENERAL.—The Secretary shall conduct
a study to determine the feasibility and utility of re-
quiring insurers to report information with respect to
the characteristics of applicants for insurance and
reasons for rejection of applicants. The study shall ex-
amine the extent to which—
ƒ(A) oral applications or representations
are used by insurers and agents in making deter-
138
minations regarding whether or not to insure a
prospective insured;
ƒ(B) written applications are used by in-
surers and agents in making determinations re-
garding whether or not to insure a prospective
insured;
ƒ(C) written applications are submitted
after the insurer or agent has already made a
determination to provide insurance to a prospec-
tive insured or has determined that the prospec-
tive insured is eligible for insurance; and
ƒ(D) prospective insureds are discouraged
from submitting applications for insurance
based, in whole or in part, on—
ƒ(i) the location of the risk to be in-
sured;
ƒ(ii) the racial characteristics of the
prospective insured;
ƒ(iii) the racial composition of the
neighborhood in which the risk to be insured
is located; and
ƒ(iv) in the case of residential prop-
erty insurance, the age and value of the risk
to be insured.
139
ƒ(2) REPORT.—The Secretary shall report the
results of the study under paragraph (1) to the Com-
mittee on Banking, Finance and Urban Affairs of the
House of Representatives and the appropriate Com-
mittees of the Senate not later than 2 years after the
date of the enactment of this Act. The report shall in-
clude recommendations of the Secretary (A) with re-
spect to requiring insurers to report on the disposi-
tion of oral and written applications for insurance,
and (B) for any legislation that the Secretary consid-
ers appropriate regarding the issues described in the
report.
ƒ(b) STUDY OF INSURER ACTIONS TO MEET INSUR-
ANCE NEEDS
OF CERTAIN NEIGHBORHOODS.—The Sec-
retary shall conduct a study of various practices, actions,
and methods undertaken by insurers to meet the property
and casualty insurance needs of residents of low- and mod-
erate-income neighborhoods, minority neighborhoods, and
small businesses located in such neighborhoods. The Sec-
retary shall report the results of the study, including any
recommendations, to the Committee on Banking, Finance
and Urban Affairs of the House of Representatives and the
appropriate Committees of the Senate not later than 2 years
after the date of the enactment of this Act.
ƒ(c) STUDY OF DISPARATE CLAIMS TREATMENT.—
140
ƒ(1) IN GENERAL.—The Secretary shall conduct
a study to determine whether, and the extent to
which, insurers engage in disparate treatment in han-
dling claims of policyholders under designated lines of
insurance based on the race, gender, and income level
of the policyholder, and on the racial characteristics
and income levels of the area in which the insured
risk is located. In conducting the study, the Secretary
shall specifically consider whether residents of low-in-
come neighborhoods or areas and minority neighbor-
hoods or areas are more likely than residents of other
areas to have their claims contested or their insurance
coverage canceled.
ƒ(2) REPORT.—The Secretary shall submit a re-
port on the results of the study to the Committee on
Banking, Finance and Urban Affairs of the House of
Representatives and the appropriate Committees of
the Senate not later than 2 years after the date of the
enactment of this Act.
ƒ(d) STUDY OF RATING TERRITORIES.—The Secretary
shall conduct a study to determine whether the practice in
the insurance industry of basing insurance premium
amounts on the territory in which the insured risk is lo-
cated has a disparate impact on the availability, afford-
ability, or quality of insurance by race, gender, or type of
141
neighborhood. The Secretary shall submit a report on the
results of the study to the Committee on Banking, Finance
and Urban Affairs of the House of Representatives and the
appropriate Committees of the Senate not later than 12
months after the date of the enactment of this Act.
ƒ(e) STUDY OF INSURER REINVESTMENT REQUIRE-
MENTS.—
ƒ(1) IN GENERAL.—The Secretary shall conduct
a study to determine the feasibility of requiring in-
surers to reinvest in communities and neighborhoods
from which they collect premiums for insurance and
whether, and the extent to which, community reinvest-
ment requirements for insurers should be established
that are comparable to the community reinvestment
requirements applicable to depository institutions.
The Secretary shall consult with representatives of in-
surers and consumer, community, and civil rights or-
ganizations regarding the results of the study and
any recommendations to be made based on the results
of the study.
ƒ(2) REPORT.—The Secretary shall report the
results of the study, including any such recommenda-
tions, to the Committee on Banking, Finance and
Urban Affairs of the House of Representatives and the
appropriate Committees of the Senate not later than
142
6 months after the conclusion of the first annual re-
porting period to which the reporting requirements
under this title apply (pursuant to section 226).
ƒSEC. 223. EXEMPTION AND RELATION TO STATE LAWS.
ƒ(a) EXEMPTION FOR UNITED STATES PROGRAMS.—
Reporting shall not be required under this title with respect
to insurance provided by any program underwritten or ad-
ministered by the United States.
ƒ(b) RELATION TO STATE LAWS.—This title does not
annul, alter, or affect, or exempt the obligation of any in-
surer subject to this title to comply with the laws of any
State or subdivision thereof with respect to public disclo-
sure, submission of information, and recordkeeping.
ƒSEC. 224. REGULATIONS.
ƒ(a) IN GENERAL.—The Secretary shall issue any reg-
ulations required under this title and any other regulations
that may be necessary to carry out this title. The regula-
tions shall be issued through rulemaking in accordance with
the procedures under section 553 of title 5, United States
Code, for substantive rules. Except as otherwise provided
in this title, such final regulations shall be issued not later
than the expiration of the 18-month period beginning on
the date of the enactment of this Act.
ƒ(b) BURDENS.—In prescribing such regulations, the
Secretary shall take into consideration the administrative,
143
paperwork, and other burdens on insurance agents, includ-
ing independent insurance agents, involved in complying
with the requirements of this title and shall minimize the
burdens imposed by such requirements with respect to such
agents.
ƒSEC. 225. DEFINITIONS.
ƒFor purposes of this title:
ƒ(1) AGENT.—The term ‘‘agent’’ means, with re-
spect to an insurer, an agent licensed by a State who
sells property and casualty insurance. The term in-
cludes agents who are employees of the insurer, agents
who are independent contractors working exclusively
for the insurer, and agents who are independent con-
tractors appointed to represent the insurer on a
nonexclusive basis.
ƒ(2) APPLICABLE REGION.—The term ‘‘applica-
ble region’’ means, with respect to a designated
MSA—
ƒ(A) for any county located within the
MSA that has a population of more than 30,000,
the applicable census tract within the county; or
ƒ(B) for any county located within the
MSA that has a population of 30,000 or less, the
applicable county.
144
ƒ(3) COMMERCIAL INSURANCE.—The term ‘‘com-
mercial insurance’’ means any line of property and
casualty insurance, except private passenger auto-
mobile, homeowner’s insurance and dwelling fire and
allied lines, and other personal lines of insurance.
ƒ(4) DESIGNATED
INSURER.—The term ‘‘des-
ignated insurer’’ means, with respect to a designated
line, an insurer designated for a State by the Sec-
retary under section 215(b) as a designated insurer
for such line or any insurer that is part of an insurer
group selected under such section.
ƒ(5) DESIGNATED INVESTMENT.—The term ‘‘des-
ignated investment’’ means making or purchasing a
loan for the purchase of commercial real estate, mak-
ing or purchasing a mortgage loan for the purchase
of a 1- to 4-family dwelling, making or purchasing
a commercial or industrial loan, or making any other
investment designated by the Secretary under section
211(b).
ƒ(6) DESIGNATED LINE.—The term ‘‘designated
line’’ means a line of insurance or bid, performance,
and payment bonds designated by the Secretary
under section 215(c).
ƒ(7) EXPOSURES.—The term ‘‘exposures’’ means,
for purposes of section 204, with respect to an insur-
145
ance policy, an expression of an exposure unit covered
under the policy compared to the duration of the pol-
icy (pursuant to standards established by the Sec-
retary for uniform reporting of exposures).
ƒ(8) EXPOSURE
UNITS.—The term ‘‘exposure
units’’ means, for purposes of section 204, an auto-
mobile or dwelling covered under an insurance policy
for private passenger automobile or homeowners or
dwelling fire and allied lines coverage.
ƒ(9) INSURANCE.—The term ‘‘insurance’’ means
property and casualty insurance. Such term includes
primary insurance, surplus lines insurance, and any
other arrangement for the shifting and distributing of
risks that is determined to be insurance under the law
of any State in which the insurer or insurer group
engages in an insurance business.
ƒ(10) INSURER.—Except with respect to section
209, the term ‘‘insurer’’ means any corporation, asso-
ciation, society, order, firm, company, mutual, part-
nership, individual, aggregation of individuals, or
any other legal entity that is authorized to transact
the business of property or casualty insurance in any
State or that is engaged in a property or casualty in-
surance business. With respect to section 206, the term
means any person authorized to transact the business
146
of bid, performance, and payment bonds for small
businesses. The term includes any certified foreign di-
rect insurer under title I, but does not include an in-
dividual or entity which represents an insurer as
agent solely for the purpose of selling or which rep-
resents a consumer as a broker solely for the purpose
of buying insurance.
ƒ(11) ISSUED.—The term ‘‘issued’’ means, with
respect to an insurance policy, newly issued or re-
newed.
ƒ(12) JOINT UNDERWRITING ASSOCIATION.—The
term ‘‘joint underwriting association’’ means an un-
incorporated association of insurers established to
provide a particular form of insurance to the public.
ƒ(13) MORTGAGE INSURANCE.—The term ‘‘mort-
gage 
insurance’’ 
means 
insurance 
against 
the
nonpayment of, or default on, a mortgage or loan for
residential or commercial property.
ƒ(14) MSA.—The term ‘‘MSA’’ means a Metro-
politan Statistical Area or a Primary Metropolitan
Statistical Area.
ƒ(15) PRIVATE
MORTGAGE
INSURANCE.—The
term ‘‘private mortgage insurance’’ means mortgage
insurance other than mortgage insurance made avail-
able under the National Housing Act, title 38 of the
147
United States Code, or title V of the Housing Act of
1949.
ƒ(16) PROPERTY AND CASUALTY INSURANCE.—
The term ‘‘property and casualty insurance’’ means
insurance against loss of or damage to property, in-
surance against loss of income or extra expense in-
curred because of loss of, or damage to, property, and
insurance against third party liability claims caused
by negligence or imposed by statute or contract. Such
term does not include workers’ compensation, profes-
sional liability, or title insurance.
ƒ(17) RESIDUAL MARKET.—The term ‘‘residual
market’’ means an assigned risk plan, joint under-
writing association, or any similar mechanism de-
signed to make insurance available to those unable to
obtain it in the voluntary market. The term includes
each statewide plan under part A of title XII of the
National Housing Act to assure fair access to insur-
ance requirements.
ƒ(18) RURAL
AREA.—The term ‘‘rural area’’
means any area that—
ƒ(A) has a population of 10,000 or more;
ƒ(B) has a continuous boundary; and
ƒ(C) contains only areas that are rural
areas, as such term is defined in section 520 of
148
the Housing Act of 1949 (except that clause
(3)(B) of such section 520 shall not apply for
purposes of this title).
ƒ(19) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of Housing and Urban Develop-
ment.
ƒ(20) STATE.—The term ‘‘State’’ means any
State, the District of Columbia, the Commonwealth of
Puerto Rico, the Northern Mariana Islands, the Vir-
gin Islands, American Samoa, and the Trust Terri-
tory of the Pacific Islands.
ƒSEC. 226. EFFECTIVE DATE.
ƒThe requirements of this title relating to reporting
of information by insurers shall take effect with respect to
the first annual reporting period that begins more than 36
months after the date of the enactment of this Act.
øAmend the title so as to read: ‘‘A bill to establish
minimum standards applicable to foreign insurers and re-
insurers providing insurance in the United States, and
provide for public access to information regarding the
availability of insurance, and for other purposes.’’.¿
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Anti Redlin-
ing in Insurance Disclosure Act’’.
SEC. 2. FINDINGS AND CONSTRUCTION.
(a) FINDINGS.—The Congress finds that—
149
(1) disparities in property and cas-
ualty insurance coverage provided by in-
surers engaged in interstate 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 infor-
mation by insurers would benefit con-
sumers and insurance regulators.
(b) CONSTRUCTION.—Nothing in this Act is
intended to, nor shall it be construed to, en-
courage unsound underwriting practices.
SEC. 3. MAINTENANCE OF INFORMATION AND PUBLIC DIS-
CLOSURE.
(a) GENERAL RULE.—
(1) DESIGNATED INSURERS.—
(A) IN
GENERAL.—Except as pro-
vided by subsection (b)(7), each des-
ignated insurer shall, in accordance
with subsection (b), annually compile,
submit to the Secretary, and make
available to the public for each cal-
150
endar year and for designated lines of
insurance in a designated MSA—
(i) the total number of poli-
cies, total exposure units (in car
years and house years), and total
earned 
premium 
of 
insurance
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 insurer, and
(ii) the number of licensed
agents of such insurer whose
principal place of business is lo-
cated 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 con-
tractor working exclusively for
such insurer, or an independent
contractor appointed to represent
151
such insurer on a non-exclusive
basis.
(B) SUBMISSIONS
AND
AVAILABIL-
ITY.—The information described in
subparagraph (A) shall be—
(i) submitted to the Secretary
in accordance with subsection (d),
and
(ii) made available to the pub-
lic, in accordance with subsection
(b)(2), for inspection and copying,
at cost, at the home office of the
insurer and at a central deposi-
tory, 
established 
under 
sub-
section (c), by the Secretary.
(2) NON-DESIGNATED INSURERS.—Except
as provided in subsection (b)(7), every in-
surer which sells an insurance policy in a
designated line of insurance in a des-
ignated MSA and which is not a des-
ignated insurer in such MSA shall submit
to the Secretary for each calendar year in
accordance with subsection (d) and regu-
lations of the Secretary the total expo-
sure units (in car years and house years)
152
of insurance policies in a designated line
sold in such MSA. With respect to such
policies, the insurer shall report the des-
ignated MSA where the insured risks are
located for which such insurance is is-
sued and within such MSA report the 5-
digit zip code where the risk is located.
(b) REQUIREMENTS.—
(1) CONTENT.—The information re-
quired to be maintained and made avail-
able under subsection (a)(1) shall be item-
ized in order to clearly and conspicu-
ously 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
information 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 cal-
endar year following the calendar year
for which the information is required to
153
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 reported
is available on such October 1 or on the
date determined by the Secretary.
(3) SPECIFICATION OF DATA.—
(A) IN GENERAL.—With respect to
information which is required to be
maintained and made available under
subsection (a)(1), the Secretary shall
by regulation establish specifications
for the collection and public report-
ing of such information 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 aggregated among similar pol-
icyholders and reported on that
basis,
(ii) be designed to collect in-
formation with respect to the
154
availability, cost, and type of in-
surance coverage between and
among various geographic areas,
(iii) detail what data elements
should be collected,
(iv) provide for the collection
of information on an individual
insurer basis,
(v) minimize burdens on in-
surance agents, including inde-
pendent insurance agents,
(vi) provide the data required
by clause (ii) with the least bur-
den 
on 
insurers, 
particularly
small insurers,
(vii) take into account the
types of data collected under the
Home Mortgage Disclosure Act of
1975,
(viii) take into account exist-
ing statistical reporting systems
in the insurance industry,
(ix) require itemization by 5-
digit zip code, and
155
(x) include information on
policies written in a residual mar-
ket.
(B) CONSULTATIONS.—In develop-
ing the specifications in subpara-
graph (A), the Secretary shall consult
with—
(i) 
other 
Federal 
agencies
with appropriate expertise,
(ii) 
State 
insurance 
regu-
lators,
(iii) representatives of the in-
surance industry, including sta-
tistical agents,
(iv) representatives of insur-
ance producers, including minor-
ity insurance producers, and
(v) consumer, community, and
civil rights groups who are rep-
resentative of a diversity of geo-
graphic locations.
(C) EFFECTIVE DATE.—The regula-
tion under subparagraph (A) shall be
issued no later than 270 days after
the date of the enactment of this Act.
156
(4) COMMERCIAL INSURANCE STUDY AND
PILOT PROJECT.—
(A) STUDY.—The Secretary shall
conduct a study regarding the avail-
ability 
of 
commercial 
insurance
(other than professional liability in-
surance, workers compensation in-
surance, and title insurance) with
special emphasis on the availability
of commercial insurance for small
business. The study shall focus on—
(i) an appropriate definition
for small business; and
(ii) preliminary views regard-
ing the availability, cost, and type
of insurance coverage for small
business, which may be based on
surveys of members of the small
business community.
In conducting the study, the Sec-
retary shall consult with interested
parties from a diversity of locations,
including State insurance regulators,
consumer, 
community, 
and 
civil
rights 
groups, 
representatives 
of
157
small business, representatives of the
insurance industry, including statis-
tical agents, and representatives of
insurance producers, including mi-
nority insurance producers. The Sec-
retary shall submit a report detailing
the findings of the study to the Com-
mittee on Energy and Commerce of
the House of Representatives and the
appropriate committee of the Senate
no later than 18 months following the
date of enactment of this Act.
(B) PROPOSAL OF PILOT PROJECT.—
Concurrent with the conduct of the
study under subparagraph (A), the
Secretary shall develop a proposed
data collection pilot project in the 5
largest MSA’s to help determine the
need for any further data collection
requirements to evaluate the avail-
ability, cost, and type of insurance
coverage for small business. In devel-
oping the proposed pilot project, the
Secretary shall consult with inter-
ested parties from a diversity of loca-
158
tions, including State insurance regu-
lators, consumer, community, and
civil rights groups, representatives of
small business, representatives of the
insurance industry, including statis-
tical agents, and representatives of
insurance producers, including mi-
nority insurance producers. The Sec-
retary shall submit a specific pro-
posal for a pilot project to the Com-
mittee on Energy and Commerce of
the House of Representatives and the
appropriate committee of the Senate
no later than 18 months following the
date of enactment of this Act.
(C) 
SPECIFICATIONS
FOR
PILOT
PROJECT.—Immediately following the
submission of the proposal for a pilot
project, the Secretary shall, by regu-
lation, establish specifications for the
collection and public reporting of in-
formation with respect to commercial
insurance 
for 
the 
proposed 
pilot
project. As part of the specifications,
the Secretary shall designate the 5
159
largest MSA’s for purposes of the
pilot 
project. 
The 
specifications
shall—
(i) provide that information
be aggregated among similar pol-
icyholders and reported on that
basis,
(ii) be designed to collect in-
formation with respect to the
availability, cost, and type of in-
surance coverage between and
among various geographic areas,
(iii) provide for the collection
of information on an individual
insurer basis,
(iv) provide the data required
by clause (ii) with the least bur-
den 
on 
insurers, 
particularly
small 
insurers, 
and 
insurance
agents, including independent in-
surance agents,
(v) take into account existing
statistical reporting systems in
the insurance industry and use