225 
negotiate insurance in any State for any line or lines of 
insurance specified in such license, and exercise all such 
incidental powers, as shall be necessary to carry out such 
activities, including claims adjustments and settlement, 
risk management, employee benefits advice, retirement 
planning, and any other insurance-related consulting ac-
tivities. 
(d) EXAMINATIONS AND REPORTS.—In addition to 
the examination and reporting requirements applicable to 
national agencies pursuant to sections 1124 and 1125, the 
Commissioner may— 
(1) provide for the examination of federally li-
censed insurance producers that are not national 
agencies only in response to a complaint or any evi-
dence that the federally licensed insurance producer 
has violated or is about to violate— 
(A) a law, rule, or regulation; 
(B) any condition imposed in writing by 
the Commissioner in connection with issuing a 
Federal producer license; or 
(C) any written agreement entered into 
with the Commissioner; and 
(2) require federally licensed insurance pro-
ducers that are not national agencies to make such 
reports, containing such information and in such 
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226 
form, as the Commissioner may prescribe by regula-
tion, to the extent necessary to require compliance 
with this Act. 
(e) INFORMATION PRACTICES.—The Commissioner 
may, by regulation, provide that there shall be no civil li-
ability imposed on and no cause of action shall arise from 
a national insurer or national agency, an insurer-affiliated 
party, or a federally licensed insurance producer submit-
ting any statement or information required under this Act 
or any regulation thereunder or requested in writing by 
the Commissioner relating to the conduct of a federally 
licensed insurance producer, provided that— 
(1) this protection may not apply to false state-
ments made with actual malice; and 
(2) such regulation shall not abrogate or modify 
any existing common law or statutory privileges or 
immunities. 
(f) AUTHORITY
OF STATE LICENSED INSURANCE 
PRODUCER.—An insurance producer licensed by a State 
may sell, solicit, or negotiate insurance in such State on 
behalf of a national insurer without a Federal producer 
license. 
SEC. 1302. PRODUCER DATABASE. 
(a) IN GENERAL.—The Commissioner shall adopt 
regulations for the development of an electronic database 
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227 
consisting of information relating to federally licensed in-
surance producers and an electronic communication net-
work that links the Commissioner with State insurance 
regulators and insurers for an electronic exchange of such 
information. 
(b) MAINTENANCE.—The Commissioner, by rule or 
order, may delegate authority over the maintenance of 
each database described in subsection (a) to an insurance 
self-regulatory organization. In making any such rule or 
entering any such order, the Commissioner shall take into 
consideration the regulatory capabilities and procedures of 
the insurance self-regulatory organization, availability of 
staff, convenience of location, avoidance of unnecessary 
regulatory duplication, and any other factors the Commis-
sioner may consider appropriate to the protection of pol-
icyholders, the efficiency of the producer licensing system, 
and the cooperation and coordination among regulatory 
organizations. 
SEC. 1303. SUPERVISION AND OVERSIGHT OF FEDERALLY 
LICENSED INSURANCE PRODUCERS. 
(a) PURPOSE.—The purpose of this section is to es-
tablish when a national insurer, national agency, or other 
federally licensed insurance producer has a duty to super-
vise a federally licensed insurance producer who is an indi-
vidual. The duty to supervise as required in this section 
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228 
shall be in addition to the authority of the Commissioner 
to exercise its powers under section 1102(b). 
(b) DUTY TO SUPERVISE.— 
(1) NATIONAL INSURERS.—A national insurer 
shall have a duty to supervise the sales and mar-
keting practices of a federally licensed insurance 
producer who is an individual with respect to the 
sale, solicitation, or negotiation of insurance policies 
of such national insurer, if— 
(A) such producer is an— 
(i) employee of the national insurer; 
or 
(ii) agent of the national insurer; and 
(B) the entire or principal business activity 
of such producer is devoted to the sale, solicita-
tion, or negotiation of insurance policies for 
such insurer, the supervision of the agents for 
such insurer, or both. 
(2) NATIONAL AGENCIES AND OTHER FEDER-
ALLY LICENSED PRODUCERS.—A national agency or 
other federally licensed insurance producer has a 
duty to supervise the sales and marketing practices 
of a federally licensed insurance producer who is an 
individual with respect to the sale, solicitation, or 
negotiation of insurance policies, if such producer— 
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229 
(A) is an employee of such agency or other 
producer, and the sale, solicitation, and negotia-
tion of insurance is within the scope of employ-
ment of the producer; or 
(B) is an agent of such agency or other 
producer, and the sale, solicitation, and negotia-
tion of insurance is pursuant to the terms of an 
agreement between the agent and such national 
agency or other producer. 
(3) STANDARDS FOR SUPERVISION.—The Com-
missioner shall, by regulation, establish standards 
for the duties established in paragraphs (1) and (2). 
Such standards shall not conflict with the rules 
adopted by any self-regulatory organization approved 
by the Securities and Exchange Commission pursu-
ant to its authority under section 19(b)(1) of the Se-
curities Exchange Act of 1934 (15 U.S.C. 78s(b)(1)) 
for broker-dealer supervision of registered represent-
atives. 
(4) EXEMPTION.—The Commissioner may, by 
regulation, exempt any class of persons from the du-
ties established under paragraphs (1) and (2), if the 
Commissioner determines that, given the nature of 
the business relationship with the federally licensed 
insurance producer who is an individual, it would be 
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230 
unreasonable or inappropriate to require the class 
member to supervise such producer. 
(5) NO
DUTY.—A national insurer, national 
agency, or other federally licensed insurance pro-
ducer shall not have a duty to supervise the sales 
and marketing practices of persons not described in 
paragraph (1) or (2). 
(6) OVERSIGHT OF INDIVIDUAL INDEPENDENT 
FEDERALLY LICENSED INSURANCE PRODUCERS.— 
(A) IN
GENERAL.—The sales and mar-
keting practices of a federally licensed insur-
ance producer who is an individual with respect 
to the sale, solicitation, or negotiation of insur-
ance policies shall be subject to the direct over-
sight of the Commissioner, if such producer is 
not a person subject to supervision under the 
terms of paragraph (1) or (2). 
(B) STANDARDS AND PROCEDURES.—The 
Commissioner shall, by regulation, establish 
standards and procedures for the direct over-
sight of the sales and marketing practices of 
federally licensed insurance producers described 
in subparagraph (A). 
(c) WHOLESALE
LIFE
INSURANCE
BROKERAGE 
AGENCIES.—This section shall not apply to any wholesale 
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231 
life insurance brokerage agency, as that term is defined 
by the Commissioner. 
SEC. 1304. RELATIONSHIP TO STATE LAW. 
(a) NO STATE RESTRICTIONS.—No State may, by 
statute, regulation, order, interpretation, or otherwise, 
prevent or restrict a national insurer from engaging in the 
acts described in subsection (b) for any person, or from 
engaging the services of a person who engages in such acts 
for the national insurer, nor shall any State require that 
a person be licensed by reason of engaging in such acts 
for a national insurer. 
(b) ACTS
PROTECTED
FROM
STATE
RESTRIC-
TIONS.—The acts referred to in subsection (a) are the fol-
lowing: 
(1) Investigating, evaluating, ascertaining, or 
determining the amount of or negotiating, settling, 
or adjusting or otherwise participating in the dis-
posal of claims, losses, or damages arising under in-
surance policies written by a national insurer, 
whether the person performing the act is called an 
adjuster, independent adjuster, or another name. 
(2) Soliciting, negotiating, or placing reinsur-
ance cessions or retrocessions on behalf of a ceding 
national insurer without the authority or power to 
bind reinsurance on behalf of such national insurer, 
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232 
whether the person performing the act is called a re-
insurance intermediary or another name. 
(3) Having authority to bind or manage all or 
part of the assumed reinsurance business of a na-
tional insurer that is a reinsurer (including the man-
agement of a separate division, department, or un-
derwriting office) and acting as an agent for such 
reinsurer, whether the person performing the act is 
called a reinsurance intermediary-manager, man-
ager, or another name. 
(4) Directly or indirectly underwriting, col-
lecting charges or premiums, or adjusting or settling 
claims, in connection with policies of insurance writ-
ten by a national insurer. 
(c) ACTIVITIES OF FEDERALLY LICENSED INSUR-
ANCE PRODUCERS.—No State may— 
(1) by statute, regulation, order, interpretation, 
or otherwise, prevent or restrict a federally licensed 
insurance producer from engaging in any activity 
within the scope of authority granted under section 
1301(c); or 
(2) require such producer to be licensed by rea-
son of engaging in such acts on behalf of a national 
insurer, State insurer, or a United States branch of 
a non-United States insurer. 
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233 
(d) ACTIVITIES OF STATE PRODUCERS.—No State 
may, by statute, regulation, order, interpretation, or other-
wise, prevent or restrict an insurance producer licensed 
by such State from selling, soliciting, or negotiating insur-
ance in such State on behalf of a national insurer. 
SEC. 1305. LICENSING COMMENCEMENT DATE. 
(a) 
FEDERALLY
LICENSED
INSURANCE
PRO-
DUCERS.—The Commissioner shall not license a Federal 
insurance producer until after the following regulations 
have been published in final form or interim final form: 
(1) The fee and assessment regulations required 
by section 1122. 
(2) The reporting regulations required by sec-
tion 1124. 
(3) The market conduct regulations required by 
section 1216. 
(4) The producer licensing regulations required 
by section 1301. 
(5) Such other regulations that the Commis-
sioner determines, at the discretion of the Commis-
sioner, to be necessary prior to the initial licensing 
of Federal insurance producers. 
(b) TIMING AND NOTICE.— 
(1) TIMING.—The regulations described in sub-
section (a) shall be published in final form, not later 
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than 2 years after the initial appointment and con-
firmation of the Commissioner. 
(2) NOTICE.—At such time as the regulations 
described in subsection (a) have been issued in final 
form, the Commissioner shall publish a notice in the 
Federal Register announcing that the Office is pre-
pared to act on licensing applications under this 
title. 
TITLE IV—HOLDING COMPANIES 
SEC. 1401. DEFINITIONS. 
In this title, the following definitions shall apply: 
(1) EXTRAORDINARY DIVIDEND OR DISTRIBU-
TION.—Except as may otherwise be specified by the 
Commissioner by regulation, the term ‘‘extraor-
dinary dividend or distribution’’ means a dividend or 
distribution of cash or other property on its out-
standing shares (excluding pro rata distributions of 
any class of the national insurer’s own shares), 
whose fair market value, together with that of other 
dividends or distributions made within the prior 12 
months, exceeds the greater of— 
(A) 10 percent of the policyholder surplus 
of the national insurer, as of the prior Decem-
ber 31; or 
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(B) the net income of the national insurer 
for the 12-month period ending on the prior 
December 31. 
(2) INSURANCE HOLDING COMPANY SYSTEM.— 
The term ‘‘insurance holding company system’’ 
means 2 or more affiliated persons, 1 or more of 
which is a national insurer. 
SEC. 1402. REGISTRATION. 
(a) REGISTRATION.—Each national insurer that is a 
member of an insurance holding company system shall 
register with the Commissioner. 
(b) REGISTRATION STATEMENT.—The Commissioner 
shall, by regulation, prescribe— 
(1) the form and content of the registration 
statement to be filed pursuant to subsection (a); and 
(2) the time and place where the registration 
statement is required to be filed with the Commis-
sioner. 
(c) TERMINATION OF REGISTRATION.—The Commis-
sioner shall terminate the registration of any national in-
surer which demonstrates that it no longer is a member 
of an insurance holding company system. 
(d) CONSOLIDATED REGISTRATION STATEMENT.— 
The Commissioner may require or allow 2 or more affili-
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