239 
(1) IN GENERAL.—No national insurer that is 
a member of an insurance holding company system 
shall pay any extraordinary dividend or distribution 
to its shareholders until 30 days after the Commis-
sioner has received notice of the declaration in a 
form prescribed by the Commissioner. 
(2) CONDITIONAL
DIVIDEND
OR
DISTRIBU-
TION.—A national insurer that is a member of an 
insurance holding company system may declare an 
extraordinary dividend or distribution which is con-
ditional upon the Commissioner’s approval, and the 
declaration shall confer no rights upon shareholders 
unless— 
(A) the Commissioner has approved the 
payment of the dividend or distribution; or 
(B) the Commissioner has not disapproved 
payment within the 30-day period referred to in 
paragraph (1). 
SEC. 1404. RELATIONSHIP TO STATE LAW. 
(a) PERMITTED AFFILIATION.—A national insurer 
that is part of an insurance holding company system may 
be affiliated with an insurer or agency that is not char-
tered or licensed under this Act. 
(b) REINSURANCE
POOLING
AGREEMENTS.—The 
Commissioner shall have exclusive jurisdiction over rein-
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surance pooling agreements to which 1 or more national 
property/casualty insurers and affiliated State property/ 
casualty insurers, or agency are parties under which poli-
cies of insurance sold, solicited, negotiated, and under-
written by and reinsurance assumed by affiliated national 
property/casualty insurers and State property/casualty in-
surers are pooled. 
SEC. 1405. CONFLICT WITH OTHER FEDERAL LAWS. 
This title shall be interpreted and applied so as not 
to conflict with or supersede the provisions of any other 
Federal law or regulation governing the regulation of hold-
ing companies, including financial holding companies, as 
defined in section 2 of the Bank Holding Company Act 
of 1956 (12 U.S.C. 1841), and saving and loan holding 
companies, as defined in section 10 of the Homeowners’ 
Loan Act (12 U.S.C. 1467a). 
SEC. 1406. 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 a member of an insurance holding company system. 
TITLE V—RECEIVERSHIP 
SEC. 1501. APPOINTMENT OF OFFICE AS RECEIVER. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of Federal or State law, if any of the grounds under 
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241 
subsection (c) exist, at the discretion of the Commissioner, 
the Commissioner may establish a receivership for a na-
tional insurer for the purpose of rehabilitation or liquida-
tion, as appropriate. 
(b) APPOINTMENT.—In any receivership established 
under this title, the Commissioner shall appoint the Office 
as receiver. 
(c) GROUNDS FOR APPOINTMENT.—The grounds for 
establishing a receivership for the purpose of rehabili-
tating or liquidating a national insurer are as follows: 
(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) any violation of any provision of Fed-
eral or State law; or 
(B) any hazardous practice. 
(3) HAZARDOUS CONDITION.—The national in-
surer is in such condition that the further trans-
action of business would be hazardous, financially or 
otherwise, to policyholders, creditors, or the public. 
(4) CEASE-AND-DESIST ORDERS.—The national 
insurer has willfully violated a cease-and-desist order 
that has become final. 
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242 
(5) CONCEALMENT.—The national insurer has 
concealed the books, papers, records, or assets of the 
national insurer, or has refused to submit the books, 
papers, records, or affairs of the national insurer, 
for inspection to any examiner or to any lawful 
agent of the Commissioner. 
(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) VIOLATIONS 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. 
(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, 
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243 
United States Code, or section 5322 or 5324 of title 
31, United States Code. 
(d) DIRECTORS NOT LIABLE.—The members of the 
board of directors of a national insurer shall not be liable 
to the shareholders, members, policyholders, or creditors 
of the insurer for acquiescing in, or consenting in good 
faith to, the appointment of the Office as a receiver. 
(e) OFFICE NOT SUBJECT TO ANY OTHER FEDERAL 
AGENCY.—When acting as receiver, the Office shall not 
be subject to the direction or supervision of any other 
agency of the United States or any State in the exercise 
of the rights, powers, and privileges of the Office. 
SEC. 1502. EFFECT OF RECEIVERSHIP PROCEEDING. 
Any order issued placing a national insurer into a re-
ceivership under this title for purposes of liquidation shall 
be deemed to be and have the effect of an order of liquida-
tion by a court of competent jurisdiction with a finding 
of insolvency against the insurer for purposes of any provi-
sion of State law relating to guaranty associations. 
SEC. 1503. POWERS AND DUTIES. 
(a) IN GENERAL.—The Office, as receiver, shall have 
all of the powers of the directors, officers, and managers 
of the national insurer, whose authority shall be sus-
pended, except as they are redelegated by the receiver. 
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244 
(b) SPECIFIC POWERS.—In addition to those powers 
otherwise provided by this title, the Office, as receiver, 
shall have the power to— 
(1) use, sell, or lease property of the insurer; 
(2) after notice and a hearing, borrow money 
on the security of the national insurer’s assets, bor-
row money without security, and execute and deliver 
all documents necessary to such transaction for the 
purpose of facilitating the receiver; 
(3) collect all debts and monies due and claims 
belonging to the national insurer, wherever located; 
(4) institute and pursue legal actions and to 
continue any pending action, in any jurisdiction; 
(5) suspend, limit, or permit insurance policy 
withdrawals in connection with insurance policies; 
(6) do other acts as are necessary or expedient 
to collect, marshal, or protect the assets or property, 
including the power to sell, compound, compromise, 
or assign debts for purposes of collection upon such 
terms and conditions as the receiver considers best 
and that are consistent with this title; 
(7) enter into contracts necessary to carry out 
the order of rehabilitation or liquidation; 
(8) hold hearings, subpoena witnesses to compel 
their attendance, administer oaths, examine a person 
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245 
under oath, and compel a person to subscribe to the 
person’s testimony after it has been correctly re-
duced to writing and, in connection with these pow-
ers, require the production of books, papers, records, 
or other documents that the receiver considers rel-
evant to the inquiry; and 
(9) exercise all powers held or conferred upon 
receivers by the laws of the United States that are 
not inconsistent with the provisions of this title. 
SEC. 1504. RULEMAKING. 
(a) IN GENERAL.—The Commissioner shall establish, 
by regulation, standards and procedures for receivership 
proceedings commenced under this title, including provi-
sions regarding automatic stays and other stays of pro-
ceedings, procedures, and priorities for the allowance or 
disallowance of claims, standards for the treatment of re-
insurance, and such other matters as the Commissioner 
determines appropriate. 
(b) MODEL.—Except as otherwise provided in this 
title, the regulations issued by the Commissioner under 
subsection (a) shall be substantially similar to the cor-
responding provisions of the Uniform Receivership Law 
adopted by the Interstate Insurance Receivership Compact 
Commission in September 1998. 
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246 
(c) RULES REGARDING COORDINATION WITH STATE 
GUARANTY ASSOCIATIONS.—In order to facilitate insol-
vency protection of consumers pursuant to title VI, the 
regulations issued by the Commissioner under subsection 
(a) shall contain provisions that are substantially similar 
to sections 8I, 8J, 8K, and 14C of the Life and Health 
Insurance Guaranty Association Model Act, as promul-
gated by the NAIC, and in effect on May 24, 2007, and 
provisions substantially similar to sections 405 and 612 
of the Insurer Receivership Model Act, promulgated by the 
NAIC in December 2005. 
SEC. 1505. JUDICIAL REVIEW. 
(a) NATIONAL INSURERS.— 
(1) IN GENERAL.—Whenever the Office is ap-
pointed as a receiver for a national insurer, the na-
tional insurer may, within 30 days of such appoint-
ment, bring an action in the United States District 
Court for the judicial district in which the principal 
place of business of such insurer is located, or in the 
United States District Court for the District of Co-
lumbia, for an order requiring the Office to remove 
itself as receiver. 
(2) REVIEW.—Upon the filing of an action 
under paragraph (1), the court shall, upon the mer-
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247 
its dismiss such action or direct the Office to remove 
itself as such receiver. 
(b) CLAIMANTS.—If the Office, acting as a receiver, 
disallows a claim against the receivership, a claimant may, 
within 60 days of the notice of disallowance, bring an ac-
tion in the United States District Court for the judicial 
district in which the principal place of business of the na-
tional insurer is located, or in the United States District 
Court for the District of Columbia, to challenge the dis-
allowance. 
TITLE VI—INSOLVENCY 
PROTECTION 
SEC. 1601. PARTICIPATION IN GUARANTY ASSOCIATIONS. 
(a) PARTICIPATION IN STATE GUARANTY ASSOCIA-
TIONS.— 
(1) NATIONAL INSURERS.—A national insurer 
shall become and continue as a member of a quali-
fied association, as provided in section 1602, for 
each line of insurance covered in each State in which 
the national insurer is doing business. 
(2) ASSESSMENTS.—Qualified associations shall 
be authorized to levy assessments on national insur-
ers. National insurers shall be obligated to pay such 
assessments, to the extent that they are levied on 
the same terms that State insurers are obligated to 
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248 
pay assessments to the association or fund under ap-
plicable State law. 
(b) PARTICIPATION IN NATIONAL INSURANCE GUAR-
ANTY CORPORATION.—A national insurer or a State in-
surer that offers a line of insurance in a State that does 
not have a qualified association for such line of insurance 
shall become and continue to be a member of the Corpora-
tion, if such line of insurance is the subject of coverage 
by the Corporation. 
SEC. 1602. QUALIFIED AND NONQUALIFIED ASSOCIATIONS. 
(a) QUALIFIED ASSOCIATION.—In this title, the term 
‘‘qualified association’’ means a State insurance guaranty 
association or State insurance guaranty fund that— 
(1) admits as members both State and national 
insurers; 
(2) in the event that a member is placed into 
receivership, provides benefits or coverage to the pol-
icyholders of such member that are not less than the 
benefits or coverage described in section 1604 (for 
life and health insurance guaranty associations or 
funds) or section 1605 (for property and casualty 
guaranty funds); and 
(3) has a board of directors that is— 
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249 
(A) representative of insurers on a basis 
that does not unfairly discriminate against na-
tional insurers; and 
(B) fairly representative of insurers of dif-
ferent sizes and lines of insurance written. 
(b) DETERMINATION, ELECTION, AND RECERTIFI-
CATION.— 
(1) DETERMINATION.—Before the third anni-
versary of the date of enactment of this Act (re-
ferred to in this section as the ‘‘pre-publication pe-
riod’’), the Commissioner shall— 
(A) review all existing State insurance 
guaranty associations and State insurance 
guaranty funds; 
(B) publish a list of those associations and 
funds that the Commissioner has determined to 
be qualified associations in accordance with the 
requirements of subsection (a); and 
(C) give the reasons why any State insur-
ance association or State insurance guaranty 
fund is not determined to be a qualified associa-
tion, in accordance with the requirements of 
subsection (a). 
(2) PETITION AND ELECTION.—After the pre- 
publication period, any association or fund— 
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250 
(A) that is not identified on the list pub-
lished pursuant to paragraph (1) may petition 
the Commissioner for a determination that the 
association or fund is a qualified association, 
and the Commissioner shall make such a deter-
mination if the association or fund establishes 
to the satisfaction of the Commissioner that the 
requirements of subsection (a) have been met; 
and 
(B) that is named on the list published 
pursuant to paragraph (1) shall have an addi-
tional 1-year period of time following the pre- 
publication period (referred to in this section as 
the ‘‘post-publication period’’) in which to no-
tify the Commissioner of the decision of the as-
sociation or fund to be a nonqualified associa-
tion, as defined in subsection (d). 
(3) PREEMPTION.—Any association or fund 
that elects to be a nonqualified association shall be 
subject to Federal preemption according to sub-
sections (e) and (f). 
(4) RECONSIDERATION.— 
(A) LETTER TO COMMISSIONER.—A State 
insurance guaranty association or State insur-
ance guaranty fund may seek qualification as a 
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251 
qualified association by letter to the Commis-
sioner, if the Commissioner— 
(i) determines that a State insurance 
guaranty association or State insurance 
guaranty fund does not meet the require-
ments of subsection (a), after the reasons 
for such denial have been addressed; or 
(ii) revokes the status of a State in-
surance guaranty association or State in-
surance guaranty fund as a qualified asso-
ciation pursuant to subsection (c), after 
the reasons for such revocation have been 
addressed. 
(B) OTHER
ELECTIONS.—An association 
or fund may seek qualification as a qualified as-
sociation by letter to the Commissioner after it 
meets the terms of the definition of a qualified 
association, as set forth in subsection (a), in 
any case in which a State insurance guaranty 
association or State insurance guaranty fund— 
(i) elects to be a nonqualified associa-
tion pursuant to paragraph (2)(B); or 
(ii) refuses to assume responsibilities 
of a qualified association pursuant to sub-
section (f). 
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252 
(c) REVOCATION.—The Commissioner shall revoke a 
determination that an association or fund is a qualified 
association, if, at any time, the Commissioner determines 
that the association or fund fails to satisfy the terms of 
the definition of a qualified association, as set forth in 
subsection (a). In such event, the Commissioner shall pro-
vide a written notice of the revocation to the affected asso-
ciation or fund, and the relevant State insurance regu-
lator, and the association or fund or the State insurance 
regulator may seek a review of the revocation under the 
terms of section 1706. 
(d) NONQUALIFIED ASSOCIATION.—For purposes of 
this title, any State insurance guaranty association or 
State insurance guaranty fund that is not a qualified asso-
ciation shall be a ‘‘nonqualified association’’. 
(e) PREEMPTION.— 
(1) CONSERVATION, REHABILITATION, OR LIQ-
UIDATION.—Except as provided in paragraph (2) 
and in subsection (f), a nonqualified association may 
not levy an assessment upon a national insurer or 
State insurer to pay claims for a member insurer 
that is subject to an order of conservation, rehabili-
tation, or liquidation. 
(2) EXCEPTION.—In the event that a conserva-
tion, rehabilitation, or liquidation of a national in-
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253 
surer or State insurer referred to in paragraph (1) 
commences at a time when a State insurance guar-
anty association or State insurance guaranty fund is 
a qualified association, but such association or fund 
subsequently becomes a nonqualified association, 
such association or fund shall be entitled to levy as-
sessments in respect of such pending conservation, 
rehabilitation, or liquidation on all companies doing 
business in the State where the association or fund 
resides as if the association or fund remained a 
qualified association, unless the Commissioner finds 
that such association or fund has failed to provide 
protection to consumers in accordance with State 
law or is unfairly discriminating in coverage or as-
sessments between national insurers and State in-
surers (in which case the Commissioner may, by 
order, transfer all coverage responsibilities and as-
sessment powers of the association or fund to the 
Corporation). 
(3) CORPORATION AUTHORITY.—The Corpora-
tion may contract with a nonqualified association de-
scribed in paragraph (2) for the purpose of assum-
ing the responsibilities of such nonqualified associa-
tion. The Corporation also may contract with a 
State insurance guaranty association or State insur-
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254 
ance guaranty fund that has been determined to be 
a qualified association pursuant to subsection (b)(4) 
for the purpose of permitting such association or 
fund to assume the responsibilities of the Corpora-
tion in a State where the association or fund resides 
in respect to a conservation, rehabilitation, or liq-
uidation that commenced at a time when such asso-
ciation or fund was a nonqualified association. 
(f) TEMPORARY PERIOD.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), in the event of a conservation, rehabilita-
tion, or liquidation of a State insurer or national in-
surer during the temporary period, a State insur-
ance guaranty association or State insurance guar-
anty fund, in addition to its existing powers under 
State law, may— 
(A) assess national insurers in an insol-
vency of a State insurer; and 
(B) assess State insurers and national in-
surers in an insolvency of a national insurer. 
(2) EXCEPTION.—Assessments may not be 
made under paragraph (1) if, not later than 6 
months after the date of enactment of this Act or 
on the date of levying any such assessment, which-
ever occurs first, the State association or fund pro-
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