I 
110TH CONGRESS 
1ST SESSION H. R. 3200 
To authorize the issuance of Federal charters and licenses for carrying on 
the sale, solicitation, negotiation, and underwriting of insurance or any 
other insurance operations, to provide a comprehensive system for the 
Federal regulation and supervision of national insurers and national 
agencies, to provide for policyholder protections in the event of an insol-
vency or the impairment of a national insurer, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 26, 2007 
Ms. BEAN (for herself and Mr. ROYCE) introduced the following bill; which 
was referred to the Committee on Financial Services, and in addition to 
the Committee on the Judiciary, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To authorize the issuance of Federal charters and licenses 
for carrying on the sale, solicitation, negotiation, and 
underwriting of insurance or any other insurance oper-
ations, to provide a comprehensive system for the Fed-
eral regulation and supervision of national insurers and 
national agencies, to provide for policyholder protections 
in the event of an insolvency or the impairment of a 
national insurer, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘National Insurance Act of 2007’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Purposes. 
Sec. 3. Definitions. 
TITLE I—OFFICE OF NATIONAL INSURANCE 
Subtitle A—Establishment of Office of National Insurance 
Sec. 1101. Establishment. 
Sec. 1102. Commissioner of National Insurance. 
Sec. 1103. Office personnel matters. 
Sec. 1104. Division of Insurance Fraud. 
Sec. 1105. Division of Consumer Affairs. 
Sec. 1106. Insurance self-regulatory organizations. 
Sec. 1107. Office of the Ombudsman. 
Subtitle B—Supervision of National Insurers and National Agencies 
Sec. 1121. Examination of national insurers and national agencies. 
Sec. 1122. Examination fees and other assessments. 
Sec. 1123. Disclosure of information. 
Sec. 1124. Reporting requirement. 
Sec. 1125. Regulatory supervision and relationship to State law. 
Sec. 1126. Preservation of office records. 
Sec. 1127. Compliance with anti-money laundering requirements. 
Subtitle C—Enforcement of Federal Insurance Laws 
Sec. 1141. National insurer license suspension, restriction, or revocation. 
Sec. 1142. Suspension, restriction, or revocation of Federal license of national 
agencies and federally licensed insurance producers. 
Sec. 1143. Cease-and-desist proceedings. 
Sec. 1144. Affirmative action to correct conditions resulting from violations or 
conduct. 
Sec. 1145. Suspension, removal, and prohibition authority. 
Sec. 1146. Suspension or prohibition based on criminal activity. 
Sec. 1147. Ancillary provisions. 
Sec. 1148. Hearings and judicial review of suspension, removal, or prohibition 
order. 
Sec. 1149. Civil and criminal penalties. 
Sec. 1150. Public disclosures of final orders and agreements. 
Sec. 1151. Foreign investigations. 
Sec. 1152. Action or proceeding against non-United States insurers. 
Sec. 1153. Cooperation between Commissioner and State commissioners. 
Subtitle D—Insurance Fraud 
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Sec. 1161. Investigation of insurance fraud. 
Sec. 1162. Penalties. 
Sec. 1163. Civil remedy. 
TITLE II—NATIONAL INSURANCE COMPANIES AND NATIONAL 
INSURANCE AGENCIES 
Subtitle A—Organization, Licensing, and Operations 
Sec. 1201. Organization, operation, and regulation of national insurance com-
panies and national insurance agencies. 
Sec. 1202. United States branches of non-United States insurers. 
Sec. 1203. Federal licensing of national insurers. 
Sec. 1204. Corporate governance. 
Sec. 1205. Participating policy procedures. 
Sec. 1206. Conversion of State insurer to national insurer or State insurance 
agency to national agency. 
Sec. 1207. Conversion of national insurer to State insurer or national agency 
to State agency. 
Sec. 1208. Powers. 
Sec. 1209. Separate accounts of national life insurer. 
Sec. 1210. Protected cells. 
Sec. 1211. Chartering and licensing commencement date. 
Subtitle B—Financial, Product, and Market Regulations 
Sec. 1212. Transitional financial regulations. 
Sec. 1213. Other financial regulations. 
Sec. 1214. Product regulation for national life insurers. 
Sec. 1215. Product regulation for national property/casualty insurers. 
Sec. 1216. Regulation of sales and marketing. 
Sec. 1217. Prompt corrective action. 
Subtitle C—Reinsurance 
Sec. 1221. Federal licensing of reinsurers. 
Sec. 1222. Credit for insurance ceded by a national insurer or federally licensed 
reinsurer. 
Sec. 1223. Relationship to State law. 
Sec. 1224. Freedom of commercial contract. 
Sec. 1225. Review by the Commissioner. 
Subtitle D—Acquisitions of Control; Mergers; Bulk Transfers; Domestication 
Sec. 1231. Acquisition of control of national insurers. 
Sec. 1232. Mergers, consolidations, and acquisitions of national insurers. 
Sec. 1233. Bulk transfers. 
Sec. 1234. Domestication of United States branch of a non-United States in-
surer. 
Sec. 1235. Mergers, consolidations, and acquisitions of national agencies. 
Subtitle E—Conversions 
Sec. 1241. Definitions. 
Sec. 1242. Conversion of stock life insurer to national life insurer in mutual 
form. 
Sec. 1243. Conversion of mutual insurer to national insurer in stock form. 
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Subtitle F—State Taxation 
Sec. 1251. State taxation of national insurers. 
Sec. 1252. State taxation of national agencies. 
Sec. 1253. State taxation of non-admitted and surplus lines insurance. 
TITLE III—INSURANCE PRODUCERS AND OTHER INSURANCE 
SERVICING PERSONS 
Sec. 1301. Federal licensing of insurance producers. 
Sec. 1302. Producer database. 
Sec. 1303. Supervision and oversight of federally licensed insurance producers. 
Sec. 1304. Relationship to State law. 
Sec. 1305. Licensing commencement date. 
TITLE IV—HOLDING COMPANIES 
Sec. 1401. Definitions. 
Sec. 1402. Registration. 
Sec. 1403. Standards and management of a national insurer within an insur-
ance holding company system. 
Sec. 1404. Relationship to State law. 
Sec. 1405. Conflict with other Federal laws. 
Sec. 1406. No delegation permitted. 
TITLE V—RECEIVERSHIP 
Sec. 1501. Appointment of Office as receiver. 
Sec. 1502. Effect of receivership proceeding. 
Sec. 1503. Powers and duties. 
Sec. 1504. Rulemaking. 
Sec. 1505. Judicial review. 
TITLE VI—INSOLVENCY PROTECTION 
Sec. 1601. Participation in guaranty associations. 
Sec. 1602. Qualified and nonqualified associations. 
Sec. 1603. Establishment of the National Insurance Guaranty Corporation. 
Sec. 1604. Benefits for policyholders of national life insurers. 
Sec. 1605. Claims covered for policyholders of national property/casualty insur-
ers. 
Sec. 1606. Powers and duties of the Corporation. 
Sec. 1607. Subrogation. 
Sec. 1608. Assessments. 
Sec. 1609. Regulations. 
Sec. 1610. State taxation. 
Sec. 1611. Examination of the Corporation; annual report. 
Sec. 1612. Immunity. 
TITLE VII—CONFORMING AMENDMENTS AND MISCELLANEOUS 
PROVISIONS 
Sec. 1701. Nondiscrimination. 
Sec. 1702. Application of the Federal antitrust laws to national insurers, na-
tional agencies, and federally licensed insurance producers. 
Sec. 1703. Application of State law and regulation to national insurers, na-
tional agencies, and federally licensed insurance producers. 
Sec. 1704. Federal court jurisdiction. 
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Sec. 1705. Federal court venue. 
Sec. 1706. Judicial review. 
Sec. 1707. Amendment to the Freedom of Information Act. 
Sec. 1708. Amendments to the Federal securities laws. 
Sec. 1709. Amendments to the Employee Retirement Income Security Act of 
1974. 
Sec. 1710. Amendments to the Gramm-Leach-Bliley Act. 
Sec. 1711. Amendments to the Federal Deposit Insurance Act. 
Sec. 1712. Amendments to the Bank Holding Company Act of 1956. 
Sec. 1713. Amendments to title 18 (crimes and criminal procedure). 
Sec. 1714. Amendments to the Americans with Disabilities Act of 1990. 
Sec. 1715. Amendment to the Age Discrimination in Employment Act. 
Sec. 1716. Amendments to the Fair Credit Reporting Act. 
Sec. 1717. GAO study of insurance sector competitiveness. 
SEC. 2. PURPOSES. 
The purposes of this Act are— 
(1) to establish a comprehensive system of Fed-
eral chartering, licensing, regulation, and supervision 
for insurers and insurance producers that is inde-
pendent of the State system of insurance licensing, 
regulation, and supervision, yet that requires feder-
ally chartered and licensed insurers and producers to 
comply with certain State laws, including State tax 
laws; 
(2) to provide for the creation of an Office of 
National Insurance within the Department of the 
Treasury that is funded by assessments imposed 
upon federally chartered and licensed insurers and 
insurance producers; and 
(3) to provide for the appointment of a Com-
missioner of National Insurance, who, among other 
duties, is authorized— 
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(A) to issue Federal charters and licenses 
to insurers and insurance producers; 
(B) to exclusively regulate and supervise 
the operations and solvency of federally char-
tered or licensed insurers and producers on a 
uniform, nationwide basis, including the con-
duct of such insurers and producers with policy-
holders; and 
(C) to protect the interests of policyholders 
by establishing a comprehensive scheme for the 
receivership for federally chartered insurers 
that requires federally chartered insurers to 
participate in qualified State guaranty funds. 
SEC. 3. DEFINITIONS. 
In this Act, the following definitions shall apply: 
(1) AFFILIATE.—The term ‘‘affiliate’’ means 
any person that controls, is controlled by, or is 
under common control with another person. 
(2) ANTI-FRAUD
ORGANIZATION.—The term 
‘‘anti-fraud organization’’ means an organization 
whose purposes include investigation, prevention and 
detection of insurance-related crime and fraud (in-
cluding assistance to and cooperation with state and 
national public officials and law enforcement officers 
in their anti-fraud activities) and which is qualified 
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as a not for profit organization under section 501(c) 
of the Internal Revenue Code of 1986. 
(3) BUSINESS
ENTITY.—The term ‘‘business 
entity’’ means a corporation, association, partner-
ship, trust, limited liability company, limited liability 
partnership, or other legal entity. 
(4) BUSINESS
OF
INSURANCE.—The term 
‘‘business of insurance’’ has the meaning given to 
such term in section 1033(f) of title 18, United 
States Code. 
(5) 
COMMISSIONER.—The 
term 
‘‘Commis-
sioner’’ means the Commissioner of National Insur-
ance. 
(6) CONTROL.— 
(A) IN GENERAL.—The term ‘‘control’’, in-
cluding the terms ‘‘controlling’’, ‘‘controlled 
by’’, and ‘‘under common control with’’ means 
the possession, direct or indirect, of the power 
to direct or cause the direction of the manage-
ment and policies of a person, whether through 
the ownership of voting securities, by contract 
or otherwise, unless the power is the result of 
an official position with or corporate office held 
by a person. 
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(B) SPECIAL RULE.—For purposes of sec-
tions 1204(c), 1231, 1243(g), and title IV, con-
trol shall be presumed to exist if any person, di-
rectly or indirectly, owns, controls, holds with 
the power to vote, or holds proxies representing, 
10 percent or more of the voting securities of 
any other person. 
(7) CORPORATE GOVERNANCE PROCEDURES.— 
The term ‘‘corporate governance procedures’’ in-
cludes rules governing— 
(A) corporate finance; 
(B) shareholders, members, policyholders, 
directors, and officers and meetings, elections, 
voting, and notice relating to such persons; 
(C) indemnification of directors and offi-
cers and insurance for indemnification of direc-
tors and officers; and 
(D) the duties of shareholders, directors, 
and officers (including any duty of care or duty 
of fair dealing and any business judgment rule). 
(8) CORPORATION.—The term ‘‘Corporation’’ 
means the National Insurance Guaranty Corporation 
established under section 1603. 
(9) FEDERAL BANKING AGENCIES.—The term 
‘‘Federal banking agencies’’ means the Office of the 
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Comptroller of the Currency, the Board of Gov-
ernors of the Federal Reserve System, the Federal 
Deposit Insurance Corporation, and the Office of 
Thrift Supervision. 
(10) FEDERALLY LICENSED INSURANCE PRO-
DUCER.—The term ‘‘federally licensed insurance 
producer’’ means a person, including a national 
agency and a natural person acting on behalf of a 
national agency, that is an insurance producer li-
censed pursuant to section 1301. 
(11) FRAUDULENT INSURANCE ACT.—The term 
‘‘fraudulent insurance act’’ has the meaning given to 
such term in section 1037A(d)(3) of title 18, United 
States Code. 
(12) FUNCTIONAL
REGULATOR.—The term 
‘‘functional regulator’’ means— 
(A) in the case of a broker-dealer, invest-
ment advisor or investment company, the Secu-
rities and Exchange Commission; 
(B) in the case of a State insurer or State 
insurance producer, the appropriate State in-
surance regulator of a State that has jurisdic-
tion over such insurer or insurance producer; 
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(C) in the case of a bank holding company 
or financial holding company, the Federal Re-
serve Board; 
(D) in the case of a savings and loan hold-
ing company, the Office of Thrift Supervision; 
(E) in the case of a national bank, the Of-
fice of the Comptroller of the Currency; 
(F) in the case of a Federal savings bank 
or Federal savings association, the Office of 
Thrift Supervision; 
(G) in the case of a State bank, the appro-
priate State banking authority for the State in 
which the bank is chartered or the Federal De-
posit Insurance Corporation, in the case of a 
State bank that is not a member of the Federal 
Reserve System, or the Federal Reserve Board, 
in the case of a State bank that is a member 
of the Federal Reserve System; 
(H) in the case of a State savings bank or 
State savings association, the appropriate bank-
ing authority for the State in which the thrift 
is chartered; and 
(I) in the case of a commodities company, 
the Commodities Exchange Commission. 
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(13) FUNCTIONALLY REGULATED AFFILIATE.— 
The term ‘‘functionally regulated affiliate’’ means— 
(A) a broker or dealer that is registered 
under the Securities Exchange Act of 1934; 
(B) a registered investment adviser, reg-
istered by or on behalf of either the Securities 
and Exchange Commission or any State; 
(C) an investment company that is reg-
istered under the Investment Company Act of 
1940; 
(D) a State insurer or State insurance pro-
ducer that is subject to supervision by a State 
insurance regulator; 
(E) a bank holding company or financial 
holding company registered with or certified by 
the Federal Reserve Board; 
(F) a national bank subject to the super-
vision of the Office of the Comptroller of the 
Currency; 
(G) a State bank subject to the supervision 
of a State banking regulator; 
(H) a Federal savings bank or Federal 
savings association subject to the supervision of 
the Office of Thrift Supervision; 
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