108 
jurisdiction on the corrective action or actions speci-
fied in the notice and the time period for taking 
such action or actions. 
(2) STANDARD OF REVIEW.—A judge reviewing 
a notice issued pursuant to subsection (b) shall de-
termine whether the decision of the Commissioner is 
reasonable. 
(d) JUDICIAL REVIEW.—A national insurance hold-
ing company or subsidiary of a national insurance holding 
company that remains subject to a notice for corrective 
action following a hearing under subsection (c) may obtain 
review of the notice by the United States court of appeals 
for the circuit in which the main office of the national 
insurer to be acquired is located, or the United States 
Court of Appeals for the District of Columbia Circuit, by 
filing an appeal in such court not later than 10 days after 
the date on which the Commissioner has affirmed or modi-
fied the notice, and simultaneously sending a copy of such 
appeal by registered or certified mail to the Commissioner. 
The Commissioner shall promptly certify and file in such 
court the record upon which the notice was based. The 
determination of the Commissioner shall be set aside if 
found to be arbitrary or capricious. 
(e) APPLICABILITY TO NON-UNITED STATES INSUR-
ANCE HOLDING COMPANIES AND SUBSIDIARIES.—Each 
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non-United States insurance holding company and each 
non-United States subsidiary thereof shall be subject to 
the report and examination authority of this section only 
to the extent authorized by an applicable international 
agreement. 
SEC. 504. CAPITAL, LIQUIDITY, DIVIDEND, OPERATIONAL, 
AND OTHER STANDARDS. 
The Commissioner shall establish, by rule or order, 
capital, liquidity, dividend, operational, and any other 
standards for a national insurance holding company that 
the Commissioner deems appropriate to ensure the sol-
vency and sound operation of each national insurance 
holding company. 
SEC. 505. AFFILIATE TRANSACTIONS. 
(a) IN GENERAL.—Transactions between a national 
insurer and any affiliate shall be subject to the following 
standards: 
(1) The terms shall be fair, reasonable, and at 
least as favorable to the national insurer as those 
that would be offered to, or would apply to, a non-
affiliate. 
(2) Charges or fees for services performed shall 
be reasonable and at least as favorable to the na-
tional insurer as those that would be offered to, or 
would apply to, a nonaffiliate. 
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(3) Expenses incurred and payment received 
shall be allocated to the national insurer in con-
formity with customary insurance accounting prac-
tices consistently applied. 
(4) The books, accounts, and records of each 
party to all such transactions shall be so maintained 
as to clearly and accurately disclose the nature and 
details of the transactions including such accounting 
information as is necessary to support the reason-
ableness of the charges or fees to the respective par-
ties. 
(5) The national insurer’s surplus following any 
dividends or distributions to shareholders shall be 
reasonable in relation to the outstanding liabilities of 
the national insurer and adequate to meet its finan-
cial needs. 
(b) APPROVAL OF CERTAIN TRANSACTIONS.—The 
Commissioner may, by regulation, specify certain trans-
actions involving a national insurer and any affiliate that 
are not permissible for a national insurer, unless the na-
tional insurer has notified the Commissioner in writing of 
its intention to enter into the transaction and the Commis-
sioner has either approved or failed to approve the trans-
action within a specified time period. 
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SEC. 506. RELATIONSHIP TO OTHER LAWS. 
(a) PERMITTED AFFILIATION.—A national insurer 
may be affiliated with an insurer or agency that is not 
chartered or licensed under this Act. 
(b) REINSURANCE
POOLING
AGREEMENTS.—The 
Commissioner shall have exclusive jurisdiction over rein-
surance pooling agreements to which one or more national 
insurers and affiliated State insurers are parties under 
which policies of insurance sold, solicited, negotiated, and 
underwritten by, and reinsurance assumed by, affiliated 
national insurers and State insurers are pooled. 
(c) CONFLICT WITH OTHER FEDERAL LAWS.—This 
title shall not be construed to conflict with or supersede 
the provisions of any other Federal law or regulation gov-
erning the regulation of holding companies, including fi-
nancial holding companies, as defined in section 2 of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1841), 
and savings and loan holding companies, as defined in sec-
tion 10 of the Home Owners’ Loan Act (12 U.S.C. 
1467a). 
SEC. 507. NO DELEGATION PERMITTED. 
The Commissioner may not delegate to any insurance 
self-regulatory organization any authority conferred under 
this title with respect to regulation of a national insurer 
that is an affiliate of a national insurance holding com-
pany. 
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TITLE 
VI—CONSERVATORSHIP, 
RECEIVERSHIP, 
THE 
PAY-
MENT 
OF 
BENEFITS 
AND 
CLAIMS TO POLICYHOLDERS, 
AND ASSESSMENTS ON NA-
TIONAL INSURERS 
SEC. 601. APPOINTMENT OF CONSERVATOR OR RECEIVER. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, if any of the grounds under subsection (b) 
exist, the Commissioner may appoint a person as a conser-
vator or receiver for a national insurer. 
(b) GROUNDS FOR APPOINTMENT.—The grounds for 
establishing a conservatorship or receivership are as fol-
lows: 
(1) INSOLVENCY.—The national insurer is in-
solvent. 
(2) SUBSTANTIAL DISSIPATION.—The national 
insurer has substantial dissipation of assets or earn-
ings due to— 
(A) a violation of any provision of Federal 
or State law; or 
(B) a hazardous practice. 
(3) HAZARDOUS CONDITION.—The national in-
surer is in such condition that the further trans-
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action of business would be hazardous, financially or 
otherwise, to policyholders, creditors, or the public. 
(4) CEASE-AND-DESIST ORDER.—The national 
insurer has willfully violated a cease-and-desist 
order. 
(5) CONCEALMENT.—The national insurer has 
concealed the books, papers, records, or assets of the 
insurer, or has refused to submit the books, papers, 
records, or affairs of the insurer, for inspection to 
any examiner or to any lawful agent of the Commis-
sioner. 
(6) INABILITY
TO
MEET
OBLIGATIONS.—The 
national insurer is likely to be unable to pay its obli-
gations or meet the demands of its creditors in the 
normal course of business. 
(7) VIOLATION OF LAW.—The national insurer 
has willfully and continuously violated any law or 
regulation, or committed any hazardous practice or 
condition, that is likely to— 
(A) cause insolvency or substantial dissipa-
tion of assets or earnings; or 
(B) weaken the condition of the national 
insurer. 
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(8) CONSENT.—The national insurer, by resolu-
tion of its board of directors or its shareholders or 
members, consents to the appointment. 
(9) MONEY LAUNDERING.—The Attorney Gen-
eral notifies the Commissioner in writing that the 
national insurer has been found guilty of a criminal 
offense under section 1956 or 1957 of title 18, 
United States Code, or section 5322 or 5324 of title 
31, United States Code. 
SEC. 602. ESTABLISHMENT OF THE NATIONAL INSURANCE 
GUARANTY CORPORATION. 
(a) ESTABLISHMENT.—There is established the Na-
tional Insurance Guaranty Corporation. 
(b) DIRECTOR.—The head of the National Insurance 
Guaranty Corporation shall be the Director of the Na-
tional Insurance Guaranty Corporation, who shall be ap-
pointed by the Commissioner. 
(c) NONPROFIT AND SUCCESSION.—The Corporation 
shall be a nonprofit corporation and shall have succession 
until dissolved by an Act of Congress. 
(d) APPLICATION OF DISTRICT OF COLUMBIA NON-
PROFIT CORPORATION ACT.—The Corporation shall, ex-
cept as otherwise provided in this title, be subject to, and 
have all the powers conferred upon a nonprofit corporation 
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115 
by the District of Columbia Nonprofit Corporation Act 
(D.C. Code, 29–301.01 et seq., or any successor thereto). 
SEC. 603. PAYMENT OF CLAIMS TO POLICYHOLDERS OF NA-
TIONAL INSURERS. 
(a) LIFE INSURANCE POLICIES.—If a national in-
surer is placed into receivership for purposes of liquida-
tion, the Director of the Corporation shall pay the claims 
on life insurance policies issued by such insurer in a man-
ner that is consistent with the terms and limits of the 
‘‘Life and Health Insurance Guaranty Association Model 
Act’’ of the NAIC. 
(b) PROPERTY AND CASUALTY POLICIES.—If a na-
tional insurer is placed into receivership for purposes of 
liquidation, the Director of the Corporation shall pay the 
claims of property and casualty insurance policies issued 
by such insurer in a manner that is consistent with the 
terms and limits of the ‘‘Post-Assessment Property and 
Liability Insurance Guaranty Association Model Act’’ of 
the NAIC. 
SEC. 604. ASSESSMENTS OF NATIONAL INSURERS. 
(a) ASSESSMENTS AUTHORIZED.—For the purpose of 
paying the claims of policyholders and other claims 
against a national insurer that is placed into receivership, 
the Director of the Corporation shall impose an assess-
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ment against all other national insurers in accordance 
with this section. 
(b) NOTICE AND IMPOSITION OF ASSESSMENTS.— 
(1) ASSESSMENTS ONLY TO INSURERS IN SAME 
LINE OF BUSINESS.— 
(A) IN
GENERAL.—The Director of the 
Corporation shall only impose an assessment 
against a national insurer if such national in-
surer is in the business of providing the same 
type of insurance as the national insurer that is 
placed into receivership. 
(B) LINES
OF
INSURANCE.—In deter-
mining whether a national insurer is in the 
business of providing the same type of insur-
ance as the national insurer that is placed into 
receivership under subparagraph (A), the Direc-
tor may consider subsets of property and cas-
ualty insurance or life insurance as different 
types of insurance. 
(2) WRITTEN NOTICE REQUIRED.—The Direc-
tor of the Corporation shall provide each national in-
surer a written notice of an assessment, and assess-
ments shall be payable not later than 30 days after 
the date of receipt of such notice. 
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(3) LATE PAYMENT.—A national insurer that 
fails to pay an assessment when due shall be subject 
to an interest charge on the assessment, as set by 
the Director of the Corporation. 
(4) ASSESSMENTS NOT IMPOSED UNTIL NEED-
ED.—The Director of the Corporation shall not im-
pose an assessment upon a national insurer until 
such funds are needed. 
(5) AMOUNT OF ASSESSMENT.—Each national 
insurer shall be assessed its share of all claims in-
curred by the receivership, including administrative 
costs of the Director of the Corporation, in an 
amount equal to the product of— 
(A) an assessment rate established by the 
Director of the Corporation by regulation; and 
(B) the proportion that the net direct writ-
ten premiums of the insurer for the calendar 
year preceding the assessment bears to the net 
direct written premiums of all national insurers 
determined by the Commissioner to be in the 
business of providing the same type of insur-
ance as the national insurer that is placed into 
receivership under paragraph (1)(A) for the cal-
endar year preceding the assessment. 
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(c) ABATED OR DEFERRED ASSESSMENTS.—The Di-
rector of the Corporation may abate or defer, in whole or 
in part, an assessment imposed on a national insurer if 
payment of the assessment would endanger the ability of 
the insurer to fulfill its contractual obligations. In the 
event an assessment against a national insurer is abated 
or deferred, in whole or in part, the amount by which the 
assessment is abated or deferred may be assessed against 
all other national insurers, in a manner consistent with 
the basis for assessments set forth in this section. Once 
the conditions that caused action under this subsection 
have been removed or rectified, the insurer shall pay all 
assessments that were deferred pursuant to a repayment 
plan approved by the Director of the Corporation. 
SEC. 605. PARTICIPATION IN STATE GUARANTY ASSOCIA-
TIONS. 
(a) IN GENERAL.—A national insurer shall partici-
pate in the State guaranty association for a line of insur-
ance in each State in which such insurer is doing business 
in such line of insurance, provided that no State may 
charge an assessment rate or otherwise treat a national 
insurer in a manner differently than such State treats a 
State insurer doing business in such State. 
(b) TAXATION.—No State shall impose a premium 
tax, franchise tax, income tax, retaliatory tax, or other pri-
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