281
necessary or appropriate in the public interest or to
effectuate the purposes of this subtitle.
(2) As soon as practicable after the close of
each fiscal year, the Association shall submit to the
NAIC a written report regarding the conduct of its
business, and the exercise of the other rights and
powers granted by this subtitle, during such fiscal
year. Such report shall include financial statements
setting forth the financial position of the Association
at the end of such fiscal year and the results of its
operations (including the source and application of
its funds) for such fiscal year. The NAIC shall
transmit such report to the President and the Con-
gress with such comment thereon as the NAIC de-
termines to be appropriate.
SEC. 331. LIABILITY OF THE ASSOCIATION AND THE DIREC-
TORS, OFFICERS, AND EMPLOYEES OF THE
ASSOCIATION.
(a) IN GENERAL.—The Association shall not be
deemed to be an insurer or insurance producer within the
meaning of any State law, rule, regulation, or order regu-
lating or taxing insurers, insurance producers, or other en-
tities engaged in the business of insurance, including pro-
visions imposing premium taxes, regulating insurer sol-
vency or financial condition, establishing guaranty funds
282
and levying assessments, or requiring claims settlement
practices.
(b) LIABILITY OF THE ASSOCIATION, ITS DIREC-
TORS, OFFICERS, AND EMPLOYEES.—Neither the Associa-
tion nor any of its directors, officers, or employees shall
have any liability to any person for any action taken or
omitted in good faith under or in connection with any mat-
ter subject to this subtitle.
SEC. 332. ELIMINATION OF NAIC OVERSIGHT.
(a) IN GENERAL.—The Association shall be estab-
lished without NAIC oversight and the provisions set forth
in section 324, subsections (a), (b), (c), and (e) of section
328, and sections 329(b) and 330 of this subtitle shall
cease to be effective if, at the end of the 2-year period
after the date on which the provisions of this subtitle take
effect pursuant to section 321—
(1) at least a majority of the States represent-
ing at least 50 percent of the total United States
commercial-lines insurance premiums have not satis-
fied the uniformity or reciprocity requirements of
subsections (a) and (b) of section 321; and
(2) the NAIC has not approved the Associa-
tion’s bylaws as required by section 328, the NAIC
is unable to operate or supervise the Association, or
283
the Association is not conducting its activities as re-
quired under this Act.
(b) BOARD APPOINTMENTS.—If the repeals required
by subsection (a) are implemented—
(1)
GENERAL
APPOINTMENT
POWER.—The
President, with the advice and consent of the United
States Senate, shall appoint the members of the As-
sociation’s Board established under section 326 from
lists of candidates recommended to the President by
the
National
Association
of
Insurance
Commis-
sioners.
(2) PROCEDURES
FOR
OBTAINING
NATIONAL
ASSOCIATION
OF
INSURANCE
COMMISSIONERS
AP-
POINTMENT RECOMMENDATIONS.—
(A) INITIAL
DETERMINATION
AND
REC-
OMMENDATIONS.—After the date on which the
provisions of part a of this section take effect,
then the National Association of Insurance
Commissioners shall have 60 days to provide a
list of recommended candidates to the Presi-
dent. If the National Association of Insurance
Commissioners fails to provide a list by that
date, or if any list that is provided does not in-
clude at least 14 recommended candidates or
comply with the requirements of section 326(c),
284
the President shall, with the advice and consent
of the United States Senate, make the requisite
appointments without considering the views of
the NAIC.
(B) SUBSEQUENT APPOINTMENTS.—After
the initial appointments, the National Associa-
tion of Insurance Commissioners shall provide a
list of at least 6 recommended candidates for
the Board to the President by January 15 of
each subsequent year. If the National Associa-
tion of Insurance Commissioners fails to pro-
vide a list by that date, or if any list that is
provided
does
not
include
at
least
rec-
ommended candidates or comply with the re-
quirements of section 326(c), the President,
with the advice and consent of the Senate, shall
make the requisite appointments without con-
sidering the views of the NAIC.
(C) PRESIDENTIAL OVERSIGHT.—
(i) REMOVAL.—If the President deter-
mines that the Association is not acting in
the interests of the public, the President
may remove the entire existing Board for
the remainder of the term to which the
members of the Board were appointed and
285
appoint, with the advice and consent of the
Senate, new members to fill the vacancies
on the Board for the remainder of such
terms.
(ii) SUSPENSION
OF
RULES
OR
AC-
TIONS.—The President, or a person des-
ignated by the President for such purpose,
may suspend the effectiveness of any rule,
or prohibit any action, of the Association
which the President or the designee deter-
mines is contrary to the public interest.
(d) ANNUAL REPORT.—As soon as practicable after
the close of each fiscal year, the Association shall submit
to the President and to Congress a written report relative
to the conduct of its business, and the exercise of the other
rights and powers granted by this subtitle, during such
fiscal year. Such report shall include financial statements
setting forth the financial position of the Association at
the end of such fiscal year and the results of its operations
(including the source and application of its funds) for such
fiscal year.
SEC. 333. RELATIONSHIP TO STATE LAW.
(a) PREEMPTION OF STATE LAWS.—State laws, reg-
ulations, provisions, or actions purporting to regulate in-
286
surance producers shall be preempted in the following in-
stances:
(1) No State shall impede the activities of, take
any action against, or apply any provision of law or
regulation to, any insurance producer because that
insurance producer or any affiliate plans to become,
has applied to become, or is a member of the Asso-
ciation.
(2) No State shall impose any requirement
upon a member of the Association that it pay dif-
ferent fees to be licensed or otherwise qualified to do
business in that State, including bonding require-
ments, based on its residency.
(3) No State shall impose any licensing, ap-
pointment, integrity, personal or corporate qualifica-
tions, education, training, experience, residency, or
continuing education requirement upon a member of
the Association that is different than the criteria for
membership in the Association or renewal of such
membership, except that counter-signature require-
ments imposed on nonresident producers shall not be
deemed to have the effect of limiting or conditioning
a producer’s activities because of its residence or
place of operations under this section.
299
proper incident thereto (subject to such terms and
conditions contained in such regulation, unless modi-
fied by the Board);’’.
(b) CONFORMING CHANGES TO OTHER STATUTES.—
(1) AMENDMENT TO THE BANK HOLDING COM-
PANY ACT AMENDMENTS OF 1970.—Section 105 of the
Bank Holding Company Act Amendments of 1970 (12
U.S.C. 1850) is amended by striking ‘‘, to engage di-
rectly or indirectly in a nonbanking activity pursu-
ant to section 4 of such Act,’’.
(2) AMENDMENT TO THE BANK SERVICE COM-
PANY ACT.—Section 4(f) of the Bank Service Com-
pany Act (12 U.S.C. 1864(f)) is amended by striking
the period and adding at the end the following: ‘‘as
of the day before the date of enactment of the Finan-
cial Services Act of 1998.’’.
SEC. 103. FINANCIAL HOLDING COMPANIES.
The Bank Holding Company Act of 1956 is amended
by inserting after section 5 (12 U.S.C. 1844) the following
new section:
‘‘SEC. 6. FINANCIAL HOLDING COMPANIES.
‘‘(a) FINANCIAL HOLDING COMPANY DEFINED.—For
purposes of this section, the term ‘financial holding com-
pany’ means a bank holding company which meets the re-
quirements of subsection (b).