749
of a redomesticating insurer shall remain
in full force and effect and need not be
endorsed as to the new domicile of the in-
surer, unless so ordered by the State in-
surance regulator of a licensed State, and
then only in the case of outstanding poli-
cies and contracts whose owners reside
in such licensed State.
(2) FORMS.—
(A) Applicable State law may re-
quire a redomesticating insurer to
file new policy forms with the State
insurance regulator of a licensed
State on or before the effective date
of the transfer.
(B) 
Notwithstanding 
subpara-
graph (A), a redomesticating insurer
may use existing policy forms with
appropriate endorsements to reflect
the new domicile of the redomes-
ticating insurer until the new policy
forms are approved for use by the
State insurance regulator of such li-
censed State.
750
(e) NOTICE.—A redomesticating insurer
shall give notice of the proposed transfer to
the State insurance regulator of each licensed
State and shall file promptly any resulting
amendments to corporate documents re-
quired to be filed by a foreign licensed mutual
insurer with the insurance regulator of each
such licensed State.
(f) PROCEDURAL REQUIREMENTS.—No mu-
tual insurer may redomesticate to another
State and reorganize into a mutual holding
company pursuant to this section unless the
State insurance regulator of the transferee
domicile determines that the plan of reorga-
nization of the insurer includes the following
requirements:
(1) APPROVAL BY BOARD OF DIRECTORS
AND
POLICYHOLDERS.—The reorganization
is approved by at least a majority of the
board of directors of the mutual insurer
and at least a majority of the policy-
holders who vote after notice, disclosure
of the reorganization and the effects of
the transaction on policyholder contrac-
tual rights, and reasonable opportunity
751
to vote, in accordance with such notice,
disclosure, and voting procedures as are
approved by the State insurance regu-
lator of the transferee domicile.
(2) CONTINUED VOTING CONTROL BY POL-
ICYHOLDERS; REVIEW OF PUBLIC STOCK OF-
FERING.—After the consummation of a re-
organization, the policyholders of the re-
organized insurer shall have the same
voting rights with respect to the mutual
holding company as they had before the
reorganization with respect to the mu-
tual insurer. With respect to an initial
public offering of stock, the offering shall
be conducted in compliance with applica-
ble securities laws and in a manner ap-
proved by the State insurance regulator
of the transferee domicile.
(3) AWARD OF STOCK OR GRANT OF OP-
TIONS TO OFFICERS AND DIRECTORS.—For a
period of 6 months after completion of an
initial public offering, neither a stock
holding company nor the converted in-
surer shall award any stock options or
stock grants to persons who are elected
752
officers or directors of the mutual hold-
ing company, the stock holding company,
or the converted insurer, except with re-
spect to any such awards or options to
which a person is entitled as a policy-
holder and as approved by the State in-
surance regulator of the transferee domi-
cile.
(4) CONTRACTUAL RIGHTS.—Upon reor-
ganization into a mutual holding com-
pany, the contractual rights of the policy-
holders are preserved.
(5) FAIR AND EQUITABLE TREATMENT OF
POLICYHOLDERS.—The 
reorganization 
is
approved as fair and equitable to the pol-
icyholders by the insurance regulator of
the transferee domicile.
SEC. 313. EFFECT ON STATE LAWS RESTRICTING REDOMES-
TICATION.
(a) IN GENERAL.—Unless otherwise per-
mitted by this subtitle, State laws of any
transferor domicile that conflict with the pur-
poses and intent of this subtitle are pre-
empted, including but not limited to—
753
(1) any law that has the purpose or
effect of impeding the activities of, taking
any action against, or applying any provi-
sion of law or regulation to, any insurer
or an affiliate of such insurer because
that insurer or any affiliate plans to re-
domesticate, or has redomesticated, pur-
suant to this subtitle;
(2) any law that has the purpose or
effect of impeding the activities of, taking
action against, or applying any provision
of law or regulation to, any insured or
any insurance licensee or other inter-
mediary because such person has pro-
cured insurance from or placed insur-
ance with any insurer or affiliate of such
insurer that plans to redomesticate, or
has redomesticated, pursuant to this sub-
title, but only to the extent that such law
would treat such insured licensee or
other intermediary differently than if the
person 
procured 
insurance 
from, 
or
placed insurance with, an insured li-
censee or other intermediary which had
not redomesticated;
754
(3) any law that has the purpose or
effect of terminating, because of the re-
domestication of a mutual insurer pursu-
ant to this subtitle, any certificate of au-
thority, agent appointment or license,
rate approval, or other approval, of any
State insurance regulator or other State
authority in existence immediately prior
to the redomestication in any State other
than the transferee domicile.
(b) 
DIFFERENTIAL
TREATMENT
PROHIB-
ITED.—No State law, regulation, interpreta-
tion, or functional equivalent thereof, of a
State other than a transferee domicile may
treat a redomesticating or redomesticated in-
surer or any affiliate thereof any differently
than an insurer operating in that State that
is not a redomesticating or redomesticated in-
surer.
(c) LAWS PROHIBITING OPERATIONS.—If any
licensed State fails to issue, delays the
issuance of, or seeks to revoke an original or
renewal certificate of authority of a redomes-
ticated insurer immediately following re-
domestication, except on grounds and in a
755
manner consistent with its past practices re-
garding the issuance of certificates of author-
ity to foreign insurers that are not redomes-
ticating, then the redomesticating insurer
shall be exempt from any State law of the li-
censed State to the extent that such State law
or the operation of such State law would
make unlawful, or regulate, directly or indi-
rectly, the operation of the redomesticated in-
surer, except that such licensed State may re-
quire the redomesticated insurer to—
(1) comply with the unfair claim set-
tlement practices law of the licensed
State;
(2) pay, on a nondiscriminatory basis,
applicable 
premium 
and 
other 
taxes
which are levied on licensed insurers or
policyholders under the laws of the li-
censed State;
(3) register with and designate the
State insurance regulator as its agent
solely for the purpose of receiving service
of legal documents or process;
(4) submit to an examination by the
State insurance regulator in any licensed
756
state in which the redomesticated insurer
is doing business to determine the insur-
er’s financial condition, if—
(A) the State insurance regulator
of the transferee domicile has not
begun an examination of the re-
domesticated insurer and has not
scheduled such an examination to
begin before the end of the 1-year pe-
riod beginning on the date of the re-
domestication; and
(B) any such examination is co-
ordinated to avoid unjustified dupli-
cation and repetition;
(5) comply with a lawful order issued
in—
(A) 
a 
delinquency 
proceeding
commenced by the State insurance
regulator of any licensed State if
there has been a judicial finding of fi-
nancial impairment under paragraph
(7); or
(B) a voluntary dissolution pro-
ceeding;
757
(6) comply with any State law regard-
ing deceptive, false, or fraudulent acts or
practices, except that if the licensed
State seeks an injunction regarding the
conduct described in this paragraph,
such injunction must be obtained from a
court of competent jurisdiction as pro-
vided in section 314(a);
(7) comply with an injunction issued
by a court of competent jurisdiction,
upon a petition by the State insurance
regulator 
alleging 
that 
the 
redomes-
ticating insurer is in hazardous financial
condition or is financially impaired;
(8) participate in any insurance insol-
vency guaranty association on the same
basis as any other insurer licensed in the
licensed State; and
(9) require a person acting, or offer-
ing to act, as an insurance licensee for a
redomesticated insurer in the licensed
State to obtain a license from that State,
except that such State may not impose
any qualification or requirement that dis-
758
criminates against a nonresident insur-
ance licensee.
SEC. 314. OTHER PROVISIONS.
(a) JUDICIAL
REVIEW.—The appropriate
United States district court shall have exclu-
sive jurisdiction over litigation arising under
this section involving any redomesticating or
redomesticated insurer.
(b) SEVERABILITY.—If any provision of this
section, or the application thereof to any per-
son or circumstances, is held invalid, the re-
mainder of the section, and the application of
such provision to other persons or cir-
cumstances, shall not be affected thereby.
SEC. 315. DEFINITIONS.
For purposes of this subtitle, the fol-
lowing definitions shall apply:
(1) COURT
OF
COMPETENT
JURISDIC-
TION.—The term ‘‘court of competent ju-
risdiction’’ means a court authorized pur-
suant to section 314(a) to adjudicate liti-
gation arising under this subtitle.
(2) DOMICILE.—The term ‘‘domicile’’
means the State in which an insurer is
incorporated, chartered, or organized.
759
(3) INSURANCE
LICENSEE.—The term
‘‘insurance licensee’’ means any person
holding a license under State law to act
as insurance agent, subagent, broker, or
consultant.
(4) INSTITUTION.—The term ‘‘institu-
tion’’ means a corporation, joint stock
company, limited liability company, lim-
ited liability partnership, association,
trust, partnership, or any similar entity.
(5) LICENSED
STATE.—The term ‘‘li-
censed State’’ means any State, the Dis-
trict 
of 
Columbia, 
American 
Samoa,
Guam, Puerto Rico, or the United States
Virgin Islands in which the redomes-
ticating insurer has a certificate of au-
thority in effect immediately prior to the
redomestication.
(6) MUTUAL INSURER.—The term ‘‘mu-
tual insurer’’ means a mutual insurer or-
ganized under the laws of any State.
(7) 
PERSON.—The 
term 
‘‘person’’
means an individual, institution, govern-
ment or governmental agency, State or
political subdivision of a State, public
760
corporation, board, association, estate,
trustee, or fiduciary, or other similar en-
tity.
(8) POLICYHOLDER.—The term ‘‘policy-
holder’’ means the owner of a policy
issued by a mutual insurer, except that,
with respect to voting rights, the term
means a member of a mutual insurer or
mutual holding company granted the
right to vote, as determined under appli-
cable State law.
(9) 
REDOMESTICATED
INSURER.—The
term ‘‘redomesticated insurer’’ means a
mutual insurer that has redomesticated
pursuant to this subtitle.
(10) REDOMESTICATING
INSURER.—The
term ‘‘redomesticating insurer’’ means a
mutual insurer that is redomesticating
pursuant to this subtitle.
(11) REDOMESTICATION OR TRANSFER.—
The terms ‘‘redomestication’’ and ‘‘trans-
fer’’ mean the transfer of the domicile of
a mutual insurer from one State to an-
other State pursuant to this subtitle.
761
(12) STATE
INSURANCE
REGULATOR.—
The term ‘‘State insurance regulator’’
means the principal insurance regulatory
authority of a State, the District of Co-
lumbia, American Samoa, Guam, Puerto
Rico, or the United States Virgin Islands.
(13) STATE LAW.—The term ‘‘State law’’
means the statutes of any State, the Dis-
trict 
of 
Columbia, 
American 
Samoa,
Guam, Puerto Rico, or the United States
Virgin Islands and any regulation, order,
or requirement prescribed pursuant to
any such statute.
(14) TRANSFEREE DOMICILE.—The term
‘‘transferee domicile’’ means the State to
which a mutual insurer is redomes-
ticating pursuant to this subtitle.
(15) TRANSFEROR DOMICILE.—The term
‘‘transferor domicile’’ means the State
from which a mutual insurer is redomes-
ticating pursuant to this subtitle.
SEC. 316. EFFECTIVE DATE.
This subtitle shall take effect on the date
of the enactment of this Act.
762
Subtitle C—National Association of
Registered Agents and Brokers
SEC. 321. STATE FLEXIBILITY IN MULTISTATE LICENSING
REFORMS.
(a) IN GENERAL.—The provisions of this
subtitle shall take effect unless, not later than
3 years after the date of enactment of this Act,
at least a majority of the States—
(1) have enacted uniform laws and
regulations governing the licensure of in-
dividuals and entities authorized to sell
and solicit the purchase of insurance
within the State; or
(2) have enacted reciprocity laws and
regulations governing the licensure of
nonresident individuals and entities au-
thorized to sell and solicit insurance
within those States.
(b) UNIFORMITY REQUIRED.—States shall be
deemed to have established the uniformity
necessary to satisfy subsection (a)(1) if the
States—
(1) establish uniform criteria regard-
ing the integrity, personal qualifications,
education, training, and experience of li-
763
censed insurance producers, including
the qualification and training of sales
personnel in ascertaining the appro-
priateness of a particular insurance prod-
uct for a prospective customer;
(2) establish uniform continuing edu-
cation requirements for licensed insur-
ance producers;
(3) establish uniform ethics course re-
quirements for licensed insurance pro-
ducers in conjunction with the con-
tinuing education requirements under
paragraph (2);
(4) establish uniform criteria to en-
sure that an insurance product, including
any annuity contract, sold to a consumer
is suitable and appropriate for the con-
sumer based on financial information dis-
closed by the consumer; and
(5) do not impose any requirement
upon any insurance producer to be li-
censed or otherwise qualified to do busi-
ness as a nonresident that has the effect
of limiting or conditioning that pro-
ducer’s activities because of its residence
764
or 
place 
of 
operations, 
except 
that
counter-signature requirements imposed
on nonresident producers shall not be
deemed to have the effect of limiting or
conditioning a producer’s activities be-
cause of its residence or place of oper-
ations under this section.
(c) RECIPROCITY REQUIRED.—States shall
be deemed to have established the reciprocity
required to satisfy subsection (a)(2) if the fol-
lowing conditions are met:
(1) ADMINISTRATIVE
LICENSING
PROCE-
DURES.—At least a majority of the States
permit a producer that has a resident li-
cense for selling or soliciting the pur-
chase of insurance in its home State to
receive a license to sell or solicit the pur-
chase of insurance in such majority of
States as a nonresident to the same ex-
tent that such producer is permitted to
sell or solicit the purchase of insurance
in its State, if the producer’s home State
also awards such licenses on such a re-
ciprocal basis, without satisfying any ad-
765
ditional 
requirements 
other 
than
submitting—
(A) a request for licensure;
(B) the application for licensure
that the producer submitted to its
home State;
(C) proof that the producer is li-
censed and in good standing in its
home State; and
(D) the payment of any requisite
fee to the appropriate authority.
(2) CONTINUING
EDUCATION
REQUIRE-
MENTS.—A majority of the States accept
an insurance producer’s satisfaction of
its home State’s continuing education re-
quirements for licensed insurance pro-
ducers to satisfy the States’ own con-
tinuing education requirements if the
producer’s home State also recognizes
the satisfaction of continuing education
requirements on such a reciprocal basis.
(3) NO LIMITING NONRESIDENT REQUIRE-
MENTS.—A majority of the States do not
impose any requirement upon any insur-
ance producer to be licensed or other-
766
wise qualified to do business as a non-
resident that has the effect of limiting or
conditioning that producer’s activities
because of its residence or place of oper-
ations, except that countersignature re-
quirements imposed on nonresident pro-
ducers shall not be deemed to have the
effect of limiting or conditioning a pro-
ducer’s activities because of its residence
or place of operations under this section.
(4) RECIPROCAL RECIPROCITY.—Each of
the States that satisfies paragraphs (1),
(2), and (3) grants reciprocity to residents
of all of the other States that satisfy such
paragraphs.
(d) DETERMINATION.—
(1) NAIC DETERMINATION.—At the end
of the 3-year period beginning on the
date of the enactment of this Act, the Na-
tional Association of Insurance Commis-
sioners shall determine, in consultation
with the insurance commissioners or
chief insurance regulatory officials of the
States, whether the uniformity or reci-
767
procity required by subsections (b) and
(c) has been achieved.
(2) JUDICIAL REVIEW.—The appropriate
United States district court shall have ex-
clusive jurisdiction over any challenge to
the National Association of Insurance
Commissioners’ determination under this
section and such court shall apply the
standards set forth in section 706 of title
5, United States Code, when reviewing
any such challenge.
(e) CONTINUED
APPLICATION.—If, at any
time, the uniformity or reciprocity required
by subsections (b) and (c) no longer exists, the
provisions of this subtitle shall take effect 2
years after the date on which such uniformity
or reciprocity ceases to exist, unless the uni-
formity or reciprocity required by those pro-
visions is satisfied before the expiration of
that 2-year period.
(f) SAVINGS PROVISION.—No provision of
this section shall be construed as requiring
that any law, regulation, provision, or action
of any State which purports to regulate insur-
ance producers, including any such law, regu-
768
lation, provision, or action which purports to
regulate unfair trade practices or establish
consumer 
protections, 
including
countersignature laws, be altered or amended
in order to satisfy the uniformity or reci-
procity required by subsections (b) and (c),
unless any such law, regulation, provision, or
action is inconsistent with a specific require-
ment of any such subsection and then only to
the extent of such inconsistency.
(g) UNIFORM LICENSING.—Nothing in this
section shall be construed to require any
State to adopt new or additional licensing re-
quirements to achieve the uniformity nec-
essary to satisfy subsection (a)(1).
SEC. 
322. 
NATIONAL 
ASSOCIATION 
OF 
REGISTERED
AGENTS AND BROKERS.
(a) ESTABLISHMENT.—There is established
the National Association of Registered Agents
and Brokers (hereafter in this subtitle re-
ferred to as the ‘‘Association’’).
(b) STATUS.—The Association shall—
(1) be a nonprofit corporation;
(2) have succession until dissolved by
an Act of Congress;
769
(3) not be an agent or instrumentality
of the United States Government; and
(4) except as otherwise provided in
this Act, be subject to, and have all the
powers conferred upon a nonprofit cor-
poration by the District of Columbia Non-
profit Corporation Act (D.C. Code, sec.
29y–1001 et seq.).
SEC. 323. PURPOSE.
The purpose of the Association shall be to
provide a mechanism through which uniform
licensing, appointment, continuing education,
and other insurance producer sales qualifica-
tion requirements and conditions can be
adopted and applied on a multistate basis,
while preserving the right of States to license,
supervise, and discipline insurance producers
and to prescribe and enforce laws and regula-
tions with regard to insurance-related con-
sumer protection and unfair trade practices.
SEC. 324. RELATIONSHIP TO THE FEDERAL GOVERNMENT.
The Association shall be subject to the su-
pervision and oversight of the National Asso-
ciation of Insurance Commissioners (here-
770
after in this subtitle referred to as the
‘‘NAIC’’).
SEC. 325. MEMBERSHIP.
(a) ELIGIBILITY.—
(1) IN
GENERAL.—Any State-licensed
insurance producer shall be eligible to
become a member in the Association.
(2) INELIGIBILITY
FOR
SUSPENSION
OR
REVOCATION OF LICENSE.—Notwithstanding
paragraph (1), a State-licensed insurance
producer shall not be eligible to become
a member if a State insurance regulator
has suspended or revoked such pro-
ducer’s license in that State during the 3-
year period preceding the date on which
such producer applies for membership.
(3) RESUMPTION OF ELIGIBILITY.—Para-
graph (2) shall cease to apply to any in-
surance producer if—
(A) the State insurance regulator
renews the license of such producer
in the State in which the license was
suspended or revoked; or
(B) the suspension or revocation
is subsequently overturned.
771
(b) AUTHORITY TO ESTABLISH MEMBERSHIP
CRITERIA.—The Association shall have the au-
thority to establish membership criteria
that—
(1) bear a reasonable relationship to
the purposes for which the Association
was established; and
(2) do not unfairly limit the access of
smaller agencies to the Association mem-
bership.
(c) ESTABLISHMENT OF CLASSES AND CAT-
EGORIES.—
(1) CLASSES OF MEMBERSHIP.—The As-
sociation may establish separate classes
of membership, with separate criteria, if
the Association reasonably determines
that performance of different duties re-
quires different levels of education, train-
ing, or experience.
(2) CATEGORIES.—The Association may
establish separate categories of member-
ship for individuals and for other per-
sons. The establishment of any such cat-
egories of membership shall be based ei-
ther on the types of licensing categories
772
that exist under State laws or on the ag-
gregate amount of business handled by
an insurance producer. No special cat-
egories of membership, and no distinct
membership criteria, shall be established
for members which are insured deposi-
tory institutions or wholesale financial
institutions 
or 
for 
their 
employees,
agents, or affiliates.
(d) MEMBERSHIP CRITERIA.—
(1) IN GENERAL.—The Association may
establish criteria for membership which
shall include standards for integrity, per-
sonal qualifications, education, training,
and experience.
(2) 
MINIMUM
STANDARD.—In 
estab-
lishing criteria under paragraph (1), the
Association shall consider the highest
levels of insurance producer qualifica-
tions established under the licensing
laws of the States.
(e) EFFECT OF MEMBERSHIP.—Membership
in the Association shall entitle the member to
licensure in each State for which the member
pays the requisite fees, including licensing
773
fees and, where applicable, bonding require-
ments, set by such State.
(f) ANNUAL RENEWAL.—Membership in the
Association shall be renewed on an annual
basis.
(g) CONTINUING EDUCATION.—The Associa-
tion shall establish, as a condition of member-
ship, 
continuing 
education 
requirements
which shall be comparable to or greater than
the continuing education requirements under
the licensing laws of a majority of the States.
(h) SUSPENSION AND REVOCATION.—The As-
sociation may—
(1) inspect and examine the records
and offices of the members of the Asso-
ciation to determine compliance with the
criteria for membership established by
the Association; and
(2) suspend or revoke the member-
ship of an insurance producer if—
(A) the producer fails to meet the
applicable membership criteria of the
Association; or
(B) the producer has been subject
to disciplinary action pursuant to a
774
final adjudicatory proceeding under
the jurisdiction of a State insurance
regulator, and the Association con-
cludes that retention of membership
in the Association would not be in the
public interest.
(i) OFFICE OF CONSUMER COMPLAINTS.—
(1) IN GENERAL.—The Association shall
establish an office of consumer com-
plaints that shall—
(A) receive and investigate com-
plaints from both consumers and
State insurance regulators related to
members of the Association; and
(B) recommend to the Association
any disciplinary actions that the of-
fice considers appropriate, to the ex-
tent that any such recommendation is
not inconsistent with State law.
(2) RECORDS AND REFERRALS.—The of-
fice of consumer complaints of the Asso-
ciation shall—
(A) maintain records of all com-
plaints received in accordance with
paragraph (1) and make such records
775
available to the NAIC and to each
State insurance regulator for the
State of residence of the consumer
who filed the complaint; and
(B) refer, when appropriate, any
such complaint to any appropriate
State insurance regulator.
(3) TELEPHONE
AND
OTHER
ACCESS.—
The office of consumer complaints shall
maintain a toll-free telephone number for
the purpose of this subsection and, as
practicable, other alternative means of
communication with consumers, such as
an Internet home page.
SEC. 326. BOARD OF DIRECTORS.
(a) ESTABLISHMENT.—There is established
the board of directors of the Association
(hereafter in this subtitle referred to as the
‘‘Board’’) for the purpose of governing and su-
pervising the activities of the Association and
the members of the Association.
(b) POWERS.—The Board shall have such
powers and authority as may be specified in
the bylaws of the Association.
(c) COMPOSITION.—
776
(1) MEMBERS.—The Board shall be
composed of 7 members appointed by the
NAIC.
(2) REQUIREMENT.—At least 4 of the
members of the Board shall have signifi-
cant experience with the regulation of
commercial lines of insurance in at least
1 of the 20 States in which the greatest
total dollar amount of commercial-lines
insurance is placed in the United States.
(3) INITIAL BOARD MEMBERSHIP.—
(A) IN GENERAL.—If, by the end of
the 2-year period beginning on the
date of enactment of this Act, the
NAIC has not appointed the initial 7
members of the Board of the Associa-
tion, the initial Board shall consist of
the 7 State insurance regulators of
the 7 States with the greatest total
dollar amount of commercial-lines in-
surance in place as of the end of such
period.
(B) 
ALTERNATE
COMPOSITION.—If
any of the State insurance regulators
described in subparagraph (A) de-
777
clines to serve on the Board, the State
insurance regulator with the next
greatest total dollar amount of com-
mercial-lines insurance in place, as
determined by the NAIC as of the end
of such period, shall serve as a mem-
ber of the Board.
(C) INOPERABILITY.—If fewer than
7 State insurance regulators accept
appointment to the Board, the Asso-
ciation shall be established without
NAIC oversight pursuant to section
332.
(d) TERMS.—The term of each director
shall, after the initial appointment of the
members of the Board, be for 3 years, with 1⁄3
of the directors to be appointed each year.
(e) BOARD VACANCIES.—A vacancy on the
Board shall be filled in the same manner as
the original appointment of the initial Board
for the remainder of the term of the vacating
member.
(f) MEETINGS.—The Board shall meet at
the call of the chairperson, or as otherwise
provided by the bylaws of the Association.
778
SEC. 327. OFFICERS.
(a) IN GENERAL.—
(1) POSITIONS.—The officers of the As-
sociation shall consist of a chairperson
and a vice chairperson of the Board, a
president, secretary, and treasurer of the
Association, and such other officers and
assistant officers as may be deemed nec-
essary.
(2) MANNER OF SELECTION.—Each offi-
cer of the Board and the Association shall
be elected or appointed at such time and
in such manner and for such terms not
exceeding 3 years as may be prescribed
in the bylaws of the Association.
(b) CRITERIA FOR CHAIRPERSON.—Only in-
dividuals who are members of the NAIC shall
be eligible to serve as the chairperson of the
board of directors.
SEC. 328. BYLAWS, RULES, AND DISCIPLINARY ACTION.
(a) ADOPTION
AND
AMENDMENT
OF
BY-
LAWS.—
(1) COPY REQUIRED TO BE FILED WITH
THE NAIC.—The board of directors of the
Association shall file with the NAIC a
copy of the proposed bylaws or any pro-
779
posed amendment to the bylaws, accom-
panied by a concise general statement of
the basis and purpose of such proposal.
(2) EFFECTIVE
DATE.—Except as pro-
vided in paragraph (3), any proposed
bylaw or proposed amendment shall take
effect—
(A) 30 days after the date of the
filing of a copy with the NAIC;
(B) upon such later date as the
Association may designate; or
(C) upon such earlier date as the
NAIC may determine.
(3) DISAPPROVAL
BY
THE
NAIC.—Not-
withstanding paragraph (2), a proposed
bylaw or amendment shall not take effect
if, after public notice and opportunity to
participate in a public hearing—
(A) the NAIC disapproves such
proposal as being contrary to the
public interest or contrary to the pur-
poses of this subtitle and provides no-
tice to the Association setting forth
the reasons for such disapproval; or
780
(B) the NAIC finds that such pro-
posal involves a matter of such sig-
nificant public interest that public
comment 
should 
be 
obtained, 
in
which case it may, after notifying the
Association in writing of such find-
ing, require that the procedures set
forth in subsection (b) be followed
with respect to such proposal, in the
same manner as if such proposed
bylaw change were a proposed rule
change within the meaning of such
subsection.
(b) ADOPTION AND AMENDMENT OF RULES.—
(1) 
FILING
PROPOSED
REGULATIONS
WITH THE NAIC.—
(A) IN GENERAL.—The board of di-
rectors of the Association shall file
with the NAIC a copy of any proposed
rule or any proposed amendment to a
rule of the Association which shall be
accompanied by a concise general
statement of the basis and purpose of
such proposal.
781
(B) OTHER RULES AND AMENDMENTS
INEFFECTIVE.—No proposed rule or
amendment shall take effect unless
approved by the NAIC or otherwise
permitted in accordance with this
paragraph.
(2) INITIAL
CONSIDERATION
BY
THE
NAIC.—Not later than 35 days after the
date of publication of notice of filing of a
proposal, or before the end of such longer
period not to exceed 90 days as the NAIC
may designate after such date, if the
NAIC finds such longer period to be ap-
propriate and sets forth its reasons for so
finding, or as to which the Association
consents, the NAIC shall—
(A) by order approve such pro-
posed rule or amendment; or
(B) institute proceedings to deter-
mine whether such proposed rule or
amendment should be modified or
disapproved.
(3) NAIC PROCEEDINGS.—
(A) IN GENERAL.—Proceedings in-
stituted by the NAIC with respect to
782
a proposed rule or amendment pursu-
ant to paragraph (2) shall—
(i) 
include 
notice 
of 
the
grounds for disapproval under
consideration;
(ii) provide opportunity for
hearing; and
(iii) be concluded not later
than 180 days after the date of the
Association’s filing of such pro-
posed rule or amendment.
(B) DISPOSITION OF PROPOSAL.—At
the conclusion of any proceeding
under subparagraph (A), the NAIC
shall, 
by 
order, 
approve 
or 
dis-
approve the proposed rule or amend-
ment.
(C) EXTENSION OF TIME FOR CONSID-
ERATION.—The NAIC may extend the
time for concluding any proceeding
under subparagraph (A) for—
(i) not more than 60 days if
the NAIC finds good cause for
such extension and sets forth its
reasons for so finding; or
783
(ii) for such longer period as
to which the Association con-
sents.
(4) STANDARDS FOR REVIEW.—
(A) GROUNDS FOR APPROVAL.—The
NAIC shall approve a proposed rule
or amendment if the NAIC finds that
the rule or amendment is in the pub-
lic interest and is consistent with the
purposes of this Act.
(B) APPROVAL BEFORE END OF NO-
TICE PERIOD.—The NAIC shall not ap-
prove any proposed rule before the
end of the 30-day period beginning on
the date on which the Association
files proposed rules or amendments
in accordance with paragraph (1), un-
less the NAIC finds good cause for so
doing and sets forth the reasons for
so finding.
(5) ALTERNATE PROCEDURE.—
(A) IN GENERAL.—Notwithstanding
any provision of this subsection other
than subparagraph (B), a proposed
rule or amendment relating to the ad-
784
ministration or organization of the
Association shall take effect—
(i) upon the date of filing with
the NAIC, if such proposed rule
or amendment is designated by
the Association as relating solely
to matters which the NAIC, con-
sistent with the public interest
and the purposes of this sub-
section, determines by rule do not
require the procedures set forth
in this paragraph; or
(ii) upon such date as the
NAIC shall for good cause deter-
mine.
(B) ABROGATION BY THE NAIC.—
(i) IN
GENERAL.—At any time
within 60 days after the date of
filing of any proposed rule or
amendment under subparagraph
(A)(i) or clause (ii) of this sub-
paragraph, the NAIC may repeal
such rule or amendment and re-
quire that the rule or amendment
be refiled and reviewed in accord-
785
ance with this paragraph, if the
NAIC finds that such action is
necessary or appropriate in the
public interest, for the protection
of insurance producers or policy-
holders, or otherwise in further-
ance of the purposes of this sub-
title.
(ii) EFFECT
OF
RECONSIDER-
ATION BY THE NAIC.—Any action of
the NAIC pursuant to clause (i)
shall—
(I) not affect the validity
or force of a rule change dur-
ing the period such rule or
amendment was in effect; and
(II) not be considered to
be a final action.
(c) ACTION REQUIRED BY THE NAIC.—The
NAIC may, in accordance with such rules as
the NAIC determines to be necessary or ap-
propriate to the public interest or to carry out
the purposes of this subtitle, require the Asso-
ciation to adopt, amend, or repeal any bylaw,
786
rule or amendment of the Association, when-
ever adopted.
(d) DISCIPLINARY ACTION BY THE ASSOCIA-
TION.—
(1) SPECIFICATION OF CHARGES.—In any
proceeding to determine whether mem-
bership shall be denied, suspended, re-
voked, or not renewed (hereafter in this
section referred to as a ‘‘disciplinary ac-
tion’’), the Association shall bring specific
charges, notify such member of such
charges, give the member an opportunity
to defend against the charges, and keep a
record.
(2) SUPPORTING STATEMENT.—A deter-
mination to take disciplinary action shall
be supported by a statement setting
forth—
(A) any act or practice in which
such member has been found to have
been engaged;
(B) the specific provision of this
subtitle, 
the 
rules 
or 
regulations
under this subtitle, or the rules of the
787
Association which any such act or
practice is deemed to violate; and
(C) the sanction imposed and the
reason for such sanction.
(e) NAIC REVIEW
OF
DISCIPLINARY
AC-
TION.—
(1) NOTICE TO THE NAIC.—If the Asso-
ciation orders any disciplinary action,
the Association shall promptly notify the
NAIC of such action.
(2) REVIEW BY THE NAIC.—Any discipli-
nary action taken by the Association
shall be subject to review by the NAIC—
(A) on the NAIC’s own motion; or
(B) upon application by any per-
son aggrieved by such action if such
application is filed with the NAIC not
more than 30 days after the later of—
(i) the date the notice was
filed with the NAIC pursuant to
paragraph (1); or
(ii) the date the notice of the
disciplinary action was received
by such aggrieved person.
788
(f) EFFECT OF REVIEW.—The filing of an ap-
plication to the NAIC for review of a discipli-
nary action, or the institution of review by
the NAIC on the NAIC’s own motion, shall not
operate as a stay of disciplinary action unless
the NAIC otherwise orders.
(g) SCOPE OF REVIEW.—
(1) IN GENERAL.—In any proceeding to
review such action, after notice and the
opportunity for hearing, the NAIC shall—
(A) determine whether the action
should be taken;
(B) affirm, modify, or rescind the
disciplinary sanction; or
(C) remand to the Association for
further proceedings.
(2) DISMISSAL
OF
REVIEW.—The NAIC
may dismiss a proceeding to review dis-
ciplinary action if the NAIC finds that—
(A) the specific grounds on which
the action is based exist in fact;
(B) the action is in accordance
with applicable rules and regulations;
and
789
(C) such rules and regulations
are, and were, applied in a manner
consistent with the purposes of this
subtitle.
SEC. 329. ASSESSMENTS.
(a) INSURANCE PRODUCERS SUBJECT TO AS-
SESSMENT.—The Association may establish
such application and membership fees as the
Association finds necessary to cover the costs
of its operations, including fees made reim-
bursable to the NAIC under subsection (b), ex-
cept that, in setting such fees, the Association
may not discriminate against smaller insur-
ance producers.
(b) NAIC ASSESSMENTS.—The NAIC may as-
sess the Association for any costs that the
NAIC incurs under this subtitle.
SEC. 330. FUNCTIONS OF THE NAIC.
(a) ADMINISTRATIVE
PROCEDURE.—Deter-
minations of the NAIC, for purposes of mak-
ing rules pursuant to section 328, shall be
made after appropriate notice and oppor-
tunity for a hearing and for submission of
views of interested persons.
(b) EXAMINATIONS AND REPORTS.—
790
(1) EXAMINATIONS.—The NAIC may
make such examinations and inspections
of the Association and require the Asso-
ciation to furnish to the NAIC such re-
ports and records or copies thereof as the
NAIC may consider necessary or appro-
priate in the public interest or to effec-
tuate the purposes of this subtitle.
(2) REPORT BY ASSOCIATION.—As soon
as practicable after the close of each fis-
cal 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 state-
ments setting forth the financial position
of the Association at the end of such fis-
cal 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 Presi-
dent and the Congress with such com-
ment thereon as the NAIC determines to
be appropriate.
791
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 pro-
ducer within the meaning of any State law,
rule, regulation, or order regulating or taxing
insurers, insurance producers, or other enti-
ties engaged in the business of insurance, in-
cluding provisions imposing premium taxes,
regulating insurer solvency or financial con-
dition, establishing guaranty funds and lev-
ying assessments, or requiring claims settle-
ment practices.
(b) LIABILITY OF THE ASSOCIATION, ITS DI-
RECTORS, OFFICERS, AND EMPLOYEES.—Neither
the Association nor any of its directors, offi-
cers, or employees shall have any liability to
any person for any action taken or omitted in
good faith under or in connection with any
matter subject to this subtitle.
SEC. 332. ELIMINATION OF NAIC OVERSIGHT.
(a) IN GENERAL.—The Association shall be
established without NAIC oversight and the
provisions set forth in section 324, sub-
sections (a), (b), (c), and (e) of section 328, and
792
sections 329(b) and 330 of this subtitle shall
cease to be effective if, at the end of the 2-year
period beginning on the date on which the
provisions of this subtitle take effect pursu-
ant to section 321—
(1) at least a majority of the States
representing at least 50 percent of the
total United States commercial-lines in-
surance premiums have not satisfied the
uniformity or reciprocity requirements of
subsections (a), (b), and (c) of section 321;
and
(2) the NAIC has not approved the As-
sociation’s bylaws as required by section
328 or is unable to operate or supervise
the Association, or the Association is not
conducting 
its 
activities 
as 
required
under this Act.
(b) BOARD APPOINTMENTS.—If the repeals
required by subsection (a) are implemented,
the following shall apply:
(1) GENERAL
APPOINTMENT
POWER.—
The President, with the advice and con-
sent of the Senate, shall appoint the
members of the Association’s Board es-
793
tablished under section 326 from lists of
candidates recommended to the Presi-
dent by the National Association of Insur-
ance Commissioners.
(2) PROCEDURES
FOR
OBTAINING
NA-
TIONAL ASSOCIATION OF INSURANCE COMMIS-
SIONERS
APPOINTMENT
RECOMMENDA-
TIONS.—
(A) INITIAL
DETERMINATION
AND
RECOMMENDATIONS.—After the date on
which the provisions of subsection (a)
take effect, the NAIC shall, not later
than 60 days thereafter, provide a list
of recommended candidates to the
President. If the NAIC fails to provide
a list by that date, or if any list that
is provided does not include at least
14 recommended candidates or com-
ply with the requirements of section
326(c), the President shall, with the
advice and consent of the Senate,
make 
the 
requisite 
appointments
without considering the views of the
NAIC.
794
(B) SUBSEQUENT
APPOINTMENTS.—
After the initial appointments, the
NAIC 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 NAIC
fails to provide a list by that date, or
if any list that is provided does not
include at least 6 recommended can-
didates or comply with the require-
ments of section 326(c), the President,
with the advice and consent of the
Senate, shall make the requisite ap-
pointments without considering the
views of the NAIC.
(C) PRESIDENTIAL OVERSIGHT.—
(i) REMOVAL.—If the President
determines 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 appoint, with the
advice and consent of the Senate,
795
new members to fill the vacancies
on the Board for the remainder of
such terms.
(ii) SUSPENSION
OF
RULES
OR
ACTIONS.—The President, or a per-
son designated by the President
for such purpose, may suspend
the effectiveness of any rule, or
prohibit any action, of the Asso-
ciation which the President or
the designee determines is con-
trary to the public interest.
(c) ANNUAL
REPORT.—As soon as prac-
ticable after the close of each fiscal year, the
Association shall submit to the President and
to the 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 ap-
plication of its funds) for such fiscal year.
796
SEC. 333. RELATIONSHIP TO STATE LAW.
(a) PREEMPTION
OF
STATE
LAWS.—State
laws, regulations, provisions, or other actions
purporting to regulate insurance producers
shall be preempted as provided in subsection
(b).
(b) PROHIBITED ACTIONS.—No State shall—
(1) impede the activities of, take any
action against, or apply any provision of
law or regulation to, any insurance pro-
ducer because that insurance producer
or any affiliate plans to become, has ap-
plied to become, or is a member of the As-
sociation;
(2) 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, in-
cluding bonding requirements, based on
its residency;
(3) impose any licensing, appoint-
ment, integrity, personal or corporate
qualifications, education, training, expe-
rience, residency, or continuing edu-
cation requirement upon a member of the
Association that is different from the cri-
797
teria for membership in the Association
or renewal of such membership, except
that counter-signature requirements im-
posed on nonresident producers shall not
be deemed to have the effect of limiting
or conditioning a producer’s activities be-
cause of its residence or place of oper-
ations under this section; or
(4) implement the procedures of such
State’s system of licensing or renewing
the licenses of insurance producers in a
manner different from the authority of
the Association under section 325.
(c) SAVINGS PROVISION.—Except as pro-
vided in subsections (a) and (b), no provision
of this section shall be construed as altering
or affecting the continuing effectiveness of
any law, regulation, provision, or other action
of any State which purports to regulate insur-
ance producers, including any such law, regu-
lation, provision, or action which purports to
regulate unfair trade practices or establish
consumer 
protections, 
including
countersignature laws.
798
SEC. 334. COORDINATION WITH OTHER REGULATORS.
(a) COORDINATION WITH STATE INSURANCE
REGULATORS.—The Association shall have the
authority to—
(1) issue uniform insurance producer
applications and renewal applications
that may be used to apply for the
issuance or removal of State licenses,
while preserving the ability of each State
to 
impose 
such 
conditions 
on 
the
issuance or renewal of a license as are
consistent with section 333;
(2) establish a central clearinghouse
through which members of the Associa-
tion may apply for the issuance or re-
newal of licenses in multiple States; and
(3) establish or utilize a national
database for the collection of regulatory
information concerning the activities of
insurance producers.
(b) COORDINATION WITH THE NATIONAL AS-
SOCIATION OF SECURITIES DEALERS.—The Asso-
ciation shall coordinate with the National As-
sociation of Securities Dealers in order to
ease any administrative burdens that fall on
persons that are members of both associa-
799
tions, consistent with the purposes of this
subtitle and the Federal securities laws.
SEC. 335. JUDICIAL REVIEW.
(a) 
JURISDICTION.—The 
appropriate
United States district court shall have exclu-
sive jurisdiction over litigation involving the
Association, including disputes between the
Association and its members that arise under
this subtitle. Suits brought in State court in-
volving the Association shall be deemed to
have arisen under Federal law and therefore
be subject to jurisdiction in the appropriate
United States district court.
(b) EXHAUSTION
OF
REMEDIES.—An ag-
grieved person shall be required to exhaust
all available administrative remedies before
the Association and the NAIC before it may
seek judicial review of an Association deci-
sion.
(c) STANDARDS OF REVIEW.—The standards
set forth in section 553 of title 5, United States
Code, shall be applied whenever a rule or
bylaw of the Association is under judicial re-
view, and the standards set forth in section
554 of title 5, United States Code, shall be ap-
800
plied whenever a disciplinary action of the
Association is judicially reviewed.
SEC. 336. DEFINITIONS.
For purposes of this subtitle, the fol-
lowing definitions shall apply:
(1) HOME
STATE.—The term ‘‘home
State’’ means the State in which the in-
surance producer maintains its principal
place of residence and is licensed to act
as an insurance producer.
(2) INSURANCE.—The term ‘‘insurance’’
means any product, other than title in-
surance, defined or regulated as insur-
ance by the appropriate State insurance
regulatory authority.
(3) INSURANCE
PRODUCER.—The term
‘‘insurance producer’’ means any insur-
ance agent or broker, surplus lines
broker, insurance consultant, limited in-
surance representative, and any other
person that solicits, negotiates, effects,
procures, delivers, renews, continues or
binds policies of insurance or offers ad-
vice, counsel, opinions or services related
to insurance.
801
(4) STATE.—The term ‘‘State’’ includes
any State, the District of Columbia, Amer-
ican Samoa, Guam, Puerto Rico, and the
United States Virgin Islands.
(5) STATE LAW.—The term ‘‘State law’’
includes all laws, decisions, rules, regula-
tions, or other State action having the ef-
fect of law, of any State. A law of the
United States applicable only to the Dis-
trict of Columbia shall be treated as a
State law rather than a law of the United
States.
Subtitle D—Rental Car Agency
Insurance Activities
SEC. 341. STANDARD OF REGULATION FOR MOTOR VEHI-
CLE RENTALS.
(a) PROTECTION AGAINST RETROACTIVE AP-
PLICATION
OF
REGULATORY
AND
LEGAL
AC-
TION.—Except as provided in subsection (b),
during the 3-year period beginning on the
date of the enactment of this Act, it shall be
a presumption that no State law imposes any
licensing, appointment, or education require-
ments on any person who solicits the pur-
chase of or sells insurance connected with,
802
and incidental to, the lease or rental of a
motor vehicle.
(b) PREEMINENCE
OF
STATE
INSURANCE
LAW.—No provision of this section shall be
construed as altering the validity, interpreta-
tion, construction, or effect of—
(1) any State statute;
(2) the prospective application of any
court judgment interpreting or applying
any State statute; or
(3) the prospective application of any
final State regulation, order, bulletin, or
other statutorily authorized interpreta-
tion or action,
which, by its specific terms, expressly regu-
lates or exempts from regulation any person
who solicits the purchase of or sells insurance
connected with, and incidental to, the short-
term lease or rental of a motor vehicle.
(c) SCOPE
OF APPLICATION.—This section
shall apply with respect to—
(1) the lease or rental of a motor vehi-
cle for a total period of 90 consecutive
days or less; and
803
(2) insurance which is provided in
connection with, and incidentally to,
such lease or rental for a period of con-
secutive days not exceeding the lease or
rental period.
(d) MOTOR VEHICLE DEFINED.—For pur-
poses of this section, the term ‘‘motor vehicle’’
has the meaning given to such term in section
13102 of title 49, United States Code.
Subtitle E—Confidentiality
SEC. 351. CONFIDENTIALITY OF HEALTH AND MEDICAL IN-
FORMATION.
(a) IN GENERAL.—A company which under-
writes or sells annuities contracts or con-
tracts insuring, guaranteeing, or indem-
nifying against loss, harm, damage, illness,
disability, or death (other than credit-related
insurance) and any subsidiary or affiliate
thereof shall maintain a practice of protecting
the confidentiality of individually identifiable
customer health and medical and genetic in-
formation and may disclose such information
only—
(1) with the consent, or at the direc-
tion, of the customer;
804
(2) for insurance underwriting and
reinsuring policies, account administra-
tion, reporting, investigating, or pre-
venting fraud or material misrepresenta-
tion, 
processing 
premium 
payments,
processing 
insurance 
claims, 
admin-
istering insurance benefits (including uti-
lization review activities), providing in-
formation to the customer’s physician or
other health care provider, participating
in research projects, enabling the pur-
chase, transfer, merger, or sale of any in-
surance-related business, or as otherwise
required or specifically permitted by Fed-
eral or State law; or
(3) in connection with—
(A) the authorization, settlement,
billing, processing, clearing, transfer-
ring, reconciling, or collection of
amounts charged, debited, or other-
wise paid using a debit, credit, or
other payment card or account num-
ber, or by other payment means;
(B) the transfer of receivables, ac-
counts, or interest therein;
805
(C) the audit of the debit, credit,
or other payment information;
(D) 
compliance 
with 
Federal,
State, or local law;
(E) compliance with a properly
authorized civil, criminal, or regu-
latory investigation by Federal, State,
or local authorities as governed by
the requirements of this section; or
(F) fraud protection, risk control,
resolving customer disputes or in-
quiries, communicating with the per-
son to whom the information relates,
or reporting to consumer reporting
agencies.
(b) STATE ACTIONS FOR VIOLATIONS.—In ad-
dition to such other remedies as are provided
under State law, if the chief law enforcement
officer of a State, State insurance regulator,
or an official or agency designated by a State,
has reason to believe that any person has vio-
lated or is violating this title, the State may
bring an action to enjoin such violation in any
appropriate United States district court or in
any other court of competent jurisdiction.
806
(c) EFFECTIVE DATE; SUNSET.—
(1) EFFECTIVE
DATE.—Except as pro-
vided in paragraph (2), subsection (a)
shall take effect on February 1, 2000.
(2) SUNSET.—Subsection (a) shall not
take effect if, or shall cease to be effec-
tive on and after the date on which, legis-
lation is enacted that satisfies the re-
quirements in section 264(c)(1) of the
Health Insurance Portability and Ac-
countability Act of 1996 (Public Law 104–
191; 110 Stat. 2033).
(d) CONSULTATION.—While subsection (a) is
in effect, State insurance regulatory authori-
ties, through the National Association of In-
surance Commissioners, shall consult with
the Secretary of Health and Human Services
in connection with the administration of such
subsection.
807
TITLE 
IV—UNITARY 
SAVINGS
AND LOAN HOLDING COMPA-
NIES
SEC. 401. PREVENTION OF CREATION OF NEW S&L HOLD-
ING COMPANIES WITH COMMERCIAL AFFILI-
ATES.—
(a) AMENDMENT
TO HOME OWNERS’ LOAN
ACT.—Section 10(c) of the Home Owners’ Loan
Act (12 U.S.C. 1467a(c)) is amended by adding
at the end the following new paragraph:
‘‘(9) PREVENTION OF NEW AFFILIATIONS
BETWEEN S&L HOLDING COMPANIES AND COM-
MERCIAL FIRMS.—
‘‘(A) 
IN
GENERAL.—Notwith-
standing paragraph (3), no company
may directly or indirectly, including
through any merger, consolidation, or
other type of business combination,
acquire control of a savings associa-
tion after May 27, 1999, unless the
company is engaged, directly or indi-
rectly 
(including 
through 
a 
sub-
sidiary other than a savings associa-
tion), only in activities that are
permitted—
808
‘‘(i) under paragraphs (1)(C)
or (2); or
‘‘(ii) for financial holding com-
panies under section 6(c) of the
Bank Holding Company Act of
1956.
‘‘(B) PREVENTION OF NEW COMMER-
CIAL
AFFILIATIONS.—Notwithstanding
paragraph (3), no savings and loan
holding company may engage directly
or indirectly (including through a
subsidiary other than a savings asso-
ciation) in any activity other than as
described in clauses (i) and (ii) of
subparagraph (A).
‘‘(C) PRESERVATION
OF
AUTHORITY
OF EXISTING UNITARY S&L HOLDING COM-
PANIES.—Subparagraphs (A) and (B)
shall not apply with respect to any
company that was a savings and loan
holding company on May 27, 1999, or
that becomes a savings and loan hold-
ing company pursuant to an applica-
tion pending before the Office of
809
Thrift Supervision on or before that
date, and that—
‘‘(i) meets and continues to
meet the requirements of para-
graph (3); and
‘‘(ii) continues to control not
fewer than 1 savings association
that it controlled on May 27, 1999,
or that it acquired pursuant to an
application pending before the
Office of Thrift Supervision on or
before that date, or the successor
to such savings association.
‘‘(D) CORPORATE
REORGANIZATIONS
PERMITTED.—This paragraph does not
prevent a transaction—
‘‘(i) that involves solely a com-
pany under common control with
a savings and loan holding com-
pany from acquiring, directly or
indirectly, control of the savings
and loan holding company or any
savings association that is al-
ready a subsidiary of the savings
and loan holding company; or
810
‘‘(ii) that involves solely a
merger, consolidation, or other
type of business combination as a
result of which a company under
common control with the savings
and loan holding company ac-
quires, directly or indirectly, con-
trol of the savings and loan hold-
ing company or any savings asso-
ciation that is already a sub-
sidiary of the savings and loan
holding company.
‘‘(E) AUTHORITY
TO
PREVENT
EVA-
SIONS.—The Director may issue inter-
pretations, regulations, or orders that
the Director deems necessary to ad-
minister and carry out the purpose
and prevent evasions of this para-
graph, 
including 
a 
determination
that, notwithstanding the form of a
transaction, the transaction would in
substance result in a company acquir-
ing control of a savings association.
‘‘(F) PRESERVATION
OF
AUTHORITY
FOR
FAMILY
TRUSTS.—Subparagraphs
811
(A) and (B) shall not apply with re-
spect to any trust that becomes a sav-
ings and loan holding company with
respect to a savings association, if—
‘‘(i) not less than 85 percent of
the beneficial ownership interests
in the trust are continuously
owned, directly or indirectly, by
or for the benefit of members of
the same family, or their spouses,
who are lineal descendants of
common 
ancestors 
who 
con-
trolled, 
directly 
or 
indirectly,
such savings association on May
27, 1999, or a subsequent date
pursuant to an application pend-
ing before the Office of Thrift Su-
pervision on or before May 27,
1999; and
‘‘(ii) at the time at which such
trust becomes a savings and loan
holding company, such ancestors
or lineal descendants, or spouses
of such descendants, have di-
rectly or indirectly controlled the
812
savings association continuously
since May 27, 1999, or a subse-
quent date pursuant to an appli-
cations pending before the Office
of Thrift Supervision on or before
May 27, 1999.’’.
(b) 
CONFORMING
AMENDMENT.—Section
10(o)(5) of the Home Owners’ Loan Act (15
U.S.C. 1467a(o)(5)) is amended—
(1) in subparagraph (E), by striking ‘‘,
except subparagraph (B)’’; and
(2) by adding at the end the following
new subparagraph:
‘‘(F) In the case of a mutual hold-
ing company which is a savings and
loan holding company described in
subsection (c)(3), engaging in the ac-
tivities permitted under subsection
(c)(9)(A)(ii).’’.
(c) GAO STUDY OF AFFILIATION OF SAVINGS
ASSOCIATIONS
WITH
COMMERCIAL
COMPANIES
AND S&L HOLDING COMPANY REGULATION.—
(1) 
IN
GENERAL.—The 
Comptroller
General shall conduct a study of—
813
(A) the effect of permitting the af-
filiation of savings associations with
commercial companies, including—
(i) 
competitive 
effects 
as
between—
(I) commercial companies
that are not permitted to affil-
iate with depository institu-
tions and ones that have a
savings association affiliate;
and
(II) savings associations
that do not have a commercial
affiliate and ones who do; and
(ii) conflicts of interest; and
(B) the diligence and effective-
ness of the Director of the Office of
Thrift Supervision in examining and
regulating savings and loan holding
companies, generally, and savings
and loan holding companies which
are a commercial company or have a
commercial affiliate, in particular.
(2) REPORT.—Before the end of the 1-
year period beginning on the date of the
814
enactment of this Act, the Comptroller
General shall submit a report to the Con-
gress containing the findings and conclu-
sions of the Comptroller General with re-
spect to the study required under para-
graph 
(1), 
together 
with 
such 
rec-
ommendations for administrative and
legislative action as the Comptroller Gen-
eral may determine to be appropriate.
SEC. 402. RETENTION OF ‘‘FEDERAL’’ IN NAME OF CON-
VERTED FEDERAL SAVINGS ASSOCIATION.
Section 2 of the Act entitled ‘‘An Act to en-
able national banking associations to increase
their capital stock and to change their names
or locations’’, approved May 1, 1886 (12 U.S.C.
30), is amended by adding at the end the fol-
lowing new subsection:
‘‘(d) RETENTION OF ‘FEDERAL’ IN NAME OF
CONVERTED FEDERAL SAVINGS ASSOCIATION.—
‘‘(1) 
IN
GENERAL.—Notwithstanding
subsection (a) or any other provision of
law, any depository institution the char-
ter of which is converted from that of a
Federal savings association to a national
bank or a State bank after the date of the
815
enactment of the Financial Services Act
of 1999 may retain the term ‘Federal’ in
the name of such institution if such de-
pository institution remains an insured
depository institution.
‘‘(2) DEFINITIONS.—For purposes of
this subsection, the terms ‘depository in-
stitution’, ‘insured depository institution’,
‘national bank’, and ‘State bank’ have the
same meanings as in section 3 of the Fed-
eral Deposit Insurance Act.’’.
TITLE V—PRIVACY OF
CONSUMER INFORMATION
Subtitle A—Disclosure of
Nonpublic Personal Information
SEC. 501. OBLIGATIONS WITH RESPECT TO PERSONAL IN-
FORMATION.
(a) GENERAL
REQUIREMENTS.—Except as
otherwise provided in this subtitle, a finan-
cial institution may not, directly or through
any affiliate, divulge or make an unrelated
use of any nonpublic personal information
collected by the financial institution in con-
nection with any transaction with a consumer
816
in any financial product or any financial serv-
ice, unless—
(1) such financial institution provides
or has provided to the consumer a notice
that complies with section 502 and the
rules thereunder; and
(2) such financial institution main-
tains procedures to protect the confiden-
tiality and security of nonpublic personal
information.
(b) OPT-OUT REQUIRED
FOR INFORMATION
TRANSFERS.—The Commission shall by rule
prohibit a financial institution from making
available any nonpublic personal information
to any affiliate of the institution, or to any
other person that is not an affiliate of the in-
stitution, unless the consumer to whom the
information pertains—
(1) is given the opportunity in accord-
ance with such rule to object to the trans-
fer of such information; and
(2) does not object, or withdraws the
objection.
(c) ACCESS TO AND CORRECTION OF INFOR-
MATION VENDED TO THIRD PARTIES.—
817
(1) RULE REQUIRED.—The Commission
shall by rule require a financial institu-
tion that, for any consideration, makes
available nonpublic personal information
collected by the financial institution in
connection with any transaction with a
consumer in any financial product or any
financial service to any person or entity
other than an employee or agent of such
institution, an affiliate of such institu-
tion, or an employee or agent of such af-
filiate, to afford that consumer—
(A) the opportunity to examine,
upon request, the nonpublic personal
information that was so made avail-
able; and
(B) the opportunity to dispute the
accuracy of any of such information,
and to present evidence thereon.
(2) EXCEPTION FOR PROPRIETARY INFOR-
MATION.—The rule required by paragraph
(1) shall not require a financial institu-
tion to afford a customer who requests
access to the nonpublic personal informa-
tion that was made available the oppor-
818
tunity to examine or dispute any data ob-
tained by any analysis or evaluation per-
formed using such information, or to ex-
amine or dispute the methodology of
such analysis or evaluation.
(d) GENERAL EXCEPTIONS.—Subsections (a)
and (b) shall not prohibit the divulging of
nonpublic personal information, the making
of an unrelated use of such information, or
the making available of such information to
affiliates or other persons by the financial
institution—
(1) as necessary to effect or enforce
the transaction or a related transaction;
(2) as necessary to protect the con-
fidentiality or security of its records per-
taining to the consumer, the financial
service or financial product, or the trans-
action therein;
(3) as necessary to take precautions
against liability;
(4) as necessary to respond to judicial
process;
(5) to the extent permitted or re-
quired under other provisions of law and
819
in accordance with the Right to Financial
Privacy Act of 1974, to provide informa-
tion to law enforcement agencies (includ-
ing a functional regulator or the Commis-
sion) or for an investigation on a matter
related to public safety;
(6) to a consumer reporting agency in
accordance with title VI of the Consumer
Credit Protection Act; or
(7) in executing a sale or exchange
whereby the financial institution trans-
fers to another financial institution or
other person the business unit or oper-
ation, or substantially all the assets of the
business unit or operation, with which
the 
customer’s 
transactions 
were 
ef-
fected.
SEC. 502. NOTICE CONCERNING DIVULGING INFORMATION.
(a) 
RULE
REQUIRED.—The 
Commission
shall, after consultation with the Federal
functional regulators and one or more rep-
resentatives of State insurance regulators,
prescribe rules in accordance with this sec-
tion to prohibit unfair and deceptive acts and
practices in connection with the divulging of
820
nonpublic personal information or with mak-
ing unrelated uses of such information. Such
rules shall require any financial institution,
through the use of a form that complies with
the rules prescribed under subsection (b), to
clearly and conspicuously disclose to the
consumer—
(1) the categories of nonpublic per-
sonal information that are collected by
the financial institution;
(2) the practices and policies of the fi-
nancial institution with respect to divulg-
ing nonpublic personal information, or
making unrelated uses of such informa-
tion, including—
(A) the categories of persons to
whom the information is or may be
divulged or who may be permitted to
make unrelated uses of such informa-
tion, other than the persons to whom
the information must be provided to
effect or enforce the transaction; and
(B) the practices and policies of
the institution with respect to divulg-
ing or making unrelated uses of non-
821
public personal information of per-
sons who have ceased to be cus-
tomers of the financial institution;
and
(3) the policies that the institution
maintains to protect the confidentiality
and security of nonpublic personal infor-
mation.
(b) DESIGN OF NOTICE REQUIREMENTS.—In
prescribing the form of a notice for purposes
of subsection (a), the Commission shall ensure
that consumers are readily able to compare
differences in the measures that the financial
institution takes, and the policies that the in-
stitution has established, to protect the con-
sumer’s privacy as compared to the measures
taken and the policies established by other fi-
nancial institutions. Such form shall specifi-
cally identify any rights the institution af-
fords consumers to grant or deny consent to
(1) the divulging of nonpublic personal infor-
mation for any purpose other than as re-
quired in order to effect or enforce the con-
sumer’s transaction, or (2) the making of an
unrelated use of such information.
822
(c) ADDITIONAL CONTENTS
OF RULES; EX-
EMPTIVE RULES.—The Commission shall, by
rule after consultation with the functional
regulators, and may by order—
(1) specify the divulgences and uses
of information which, for purposes of this
subtitle and the rules prescribed there-
under, may be treated as necessary to ef-
fect or enforce a consumer’s transaction
with respect to a variety of financial
services and financial products;
(2) specify timing requirements with
respect to notices to new and existing
customers, which shall not require no-
tices more frequently than annually un-
less there has been a change in the infor-
mation required to be disclosed pursuant
to subsection (a); and
(3) provide, consistent with the pur-
poses of this subtitle, exemptions or tem-
porary waivers to, or delayed effective
dates for, any requirement of this subtitle
or the rules prescribed thereunder.
(d) EXEMPTIVE RULES TO PERMIT EFFICIENT
DATA STORAGE
AND RETRIEVAL.—The exemp-
823
tive rules prescribed by the Commission pur-
suant to subsection (c)(3) shall include such
rules as may be necessary to permit financial
institutions and their affiliates to establish
and maintain efficient systems to collect and
access nonpublic personal information in
shared or networked data storage and re-
trieval facilities that are implemented in a
manner consistent with the requirements of
section 501.
(e) RULEMAKING DEADLINE.—The Commis-
sion shall initially prescribe the rules re-
quired by this section within one year after
the date of enactment of this Act. Such rules,
and any revisions of such rules, shall be pre-
scribed in accordance with section 553 of title
5, United States Code.
SEC. 503. ENFORCEMENT.
(a) IN
GENERAL.—This subtitle and the
rules prescribed thereunder shall be enforced
by the Federal Trade Commission under the
Federal Trade Commission Act (15 U.S.C. 41 et
seq.).
(b) ACTIONS BY THE COMMISSION.—The Fed-
eral Trade Commission shall prevent any per-
824
son from violating this subtitle and the rules
prescribed thereunder in the same manner,
by the same means, and with the same juris-
diction, powers, and duties as though all ap-
plicable terms and provisions of the Federal
Trade Commission Act (15 U.S.C. 41 et seq.)
were incorporated into and made a part of
this subtitle, except that notwithstanding sec-
tion 5(a)(2) of such Act (15 U.S.C. 45(a)(2)) the
Commission shall, for purposes of this title,
have jurisdiction with respect to banks, sav-
ings and loan institutions, and Federal credit
unions. Any person who violates this subtitle
or the rules prescribed thereunder shall be
subject to the penalties and entitled to the
privileges and immunities provided in the
Federal Trade Commission Act in the same
manner, by the same means, and with the
same jurisdiction, power, and duties as
though all applicable terms and provisions of
the Federal Trade Commission Act were in-
corporated into and made a part of this sub-
title.
(c) TREATMENT OF RULES.—A rule issued by
the Commission under this title shall be treat-
825
ed as a rule issued under section 18(a)(1)(B)
of the Federal Trade Commission Act (15
U.S.C. 57a(a)(1)(B)).
SEC. 504. DEFINITIONS.
As used in this subtitle:
(1) COMMISSION.—The term ‘‘Commis-
sion’’ means the Federal Trade Commis-
sion.
(2) FEDERAL FUNCTIONAL REGULATOR.—
The term ‘‘Federal functional regulator’’
means—
(A) the Board of Governors of the
Federal Reserve System;
(B) the Office of the Comptroller
of the Currency;
(C) the Board of Directors of the
Federal Deposit Insurance Corpora-
tion;
(D) the Director of the Office of
Thrift Supervision;
(E) the National Credit Union Ad-
ministration Board;
(F) the Farm Credit Administra-
tion; and
826
(G) the Securities and Exchange
Commission.
(3) FINANCIAL INSTITUTION.—The term
‘‘financial institution’’ means any institu-
tion the business of which is engaging in
financial activities or activities that are
incidental to financial activities, as deter-
mined under section 6(c) of the Bank
Holding Company Act of 1956. Such term,
when used in connection with a trans-
action for a consumer, means only the fi-
nancial institution with which the con-
sumer expects to conduct such trans-
action and does not include any affiliate,
subsidiary, or contractually-related party
of that financial institution, even if such
affiliate, subsidiary, or party is also a fi-
nancial institution and participates in
the effecting or enforcement of such
transaction.
(4) 
NONPUBLIC
PERSONAL
INFORMA-
TION.—The term ‘‘nonpublic personal in-
formation’’ means personally identifiable
information, other than publicly avail-
able directory information, pertaining to
827
an individual’s transactions with a finan-
cial institution.
(5) 
DIRECTORY
INFORMATION.—The
term ‘‘publicly available directory infor-
mation’’ means subscriber list informa-
tion required to be made available for
publication pursuant to section 222(e) of
the Communications Act of 1934 (47
U.S.C. 222(3)).
(6) UNRELATED USE.—The term ‘‘unre-
lated use’’, when used with respect to in-
formation collected by the financial insti-
tution in connection with any transaction
with a consumer in any financial product
or any financial service, means any use
other than a use that is necessary to ef-
fect or enforce such transaction.
(7) DIVULGE; DIVULGENCE.—The terms
‘‘divulge’’ and ‘‘divulgence’’, when used
with respect nonpublic personal informa-
tion collected by the financial institution
in connection with any transaction with
a consumer in any financial product or
any financial service, means to make
such information available to any person
828
or entity other than an employee or
agent of such institution, an affiliate of
such institution, or an employee or agent
of such affiliate.
(8) AFFILIATE.—The term ‘‘affiliate’’
means any company that controls, is con-
trolled by, or is under common control
with another company.
(9) NECESSARY
TO
EFFECT
OR
EN-
FORCE.—The divulging or use of non-
public personal information shall be
treated—
(A) as necessary to effect a trans-
action with a consumer if the divulg-
ing or use is required, or is one of the
usual and accepted methods, to carry
out the transaction and record and
maintain the customer’s account in
the ordinary course of providing the
financial service or financial product,
and includes—
(i) providing the consumer
with a confirmation, statement, or
other record of the transaction,
or information on the status or
829
value of the financial service or
financial product; and
(ii) the accrual or recognition
of incentives or bonuses associ-
ated with the transaction that are
provided by the financial institu-
tion or any other party; and
(B) as necessary to enforce a
transaction with a consumer if the di-
vulging or use is required, or is one
of the lawful methods, to enforce the
rights of the financial institution or
of other persons engaged in carrying
out the financial transaction, or pro-
viding the financial product or finan-
cial service.
The Commission shall, consistent with
the purposes of this subtitle, prescribe by
rule actions that shall, in a variety of fi-
nancial services, and with respect to a
variety of financial products, be treated
as necessary to effect or enforce a finan-
cial transaction.
(10) FINANCIAL
SERVICES; 
FINANCIAL
PRODUCTS; TRANSACTION; RELATED
TRANS-
830
ACTION.—The 
Commission 
shall, 
con-
sistent with the purposes of this subtitle,
prescribe by rule definitions of the terms
‘‘financial services’’, ‘‘financial products’’,
‘‘transaction’’, ‘‘related transaction’’, and
‘‘unrelated third party’’ for purposes of
this subtitle.
SEC. 505. EFFECTIVE DATE.
This subtitle shall take effect one year
after the date on which the Commission pre-
scribes in final form the rules required by sec-
tion 502(a), except to the extent that a later
date is specified in such rules.
Subtitle B—Fraudulent Access to
Financial Information
SEC. 521. PRIVACY PROTECTION FOR CUSTOMER INFORMA-
TION OF FINANCIAL INSTITUTIONS.
(a) PROHIBITION ON OBTAINING CUSTOMER
INFORMATION BY FALSE PRETENSES.—It shall be
a violation of this subtitle for any person to
obtain or attempt to obtain, or cause to be dis-
closed or attempt to cause to be disclosed to
any person, customer information of a finan-
cial institution relating to another person—
831
(1) by making a false, fictitious, or
fraudulent statement or representation
to an officer, employee, or agent of a fi-
nancial institution;
(2) by making a false, fictitious, or
fraudulent statement or representation
to a customer of a financial institution; or
(3) by providing any document to an
officer, employee, or agent of a financial
institution, knowing that the document is
forged, counterfeit, lost, or stolen, was
fraudulently obtained, or contains a false,
fictitious, or fraudulent statement or rep-
resentation.
(b) PROHIBITION ON SOLICITATION OF A PER-
SON TO OBTAIN CUSTOMER INFORMATION FROM
FINANCIAL
INSTITUTION
UNDER
FALSE
PRE-
TENSES.—It shall be a violation of this subtitle
to request a person to obtain customer infor-
mation of a financial institution, knowing
that the person will obtain, or attempt to ob-
tain, the information from the institution in
any manner described in subsection (a).
(c) NONAPPLICABILITY
TO
LAW
ENFORCE-
MENT AGENCIES.—No provision of this section
832
shall be construed so as to prevent any action
by a law enforcement agency, or any officer,
employee, or agent of such agency, to obtain
customer information of a financial institu-
tion in connection with the performance of
the official duties of the agency.
(d) NONAPPLICABILITY TO FINANCIAL INSTI-
TUTIONS IN CERTAIN CASES.—No provision of
this section shall be construed so as to pre-
vent any financial institution, or any officer,
employee, or agent of a financial institution,
from obtaining customer information of such
financial institution in the course of—
(1) testing the security procedures or
systems of such institution for maintain-
ing the confidentiality of customer infor-
mation;
(2) investigating allegations of mis-
conduct or negligence on the part of any
officer, employee, or agent of the finan-
cial institution; or
(3) recovering customer information
of the financial institution which was ob-
tained or received by another person in
833
any manner described in subsection (a)
or (b).
(e) NONAPPLICABILITY TO INSURANCE INSTI-
TUTIONS
FOR
INVESTIGATION
OF
INSURANCE
FRAUD.—No provision of this section shall be
construed so as to prevent any insurance in-
stitution, or any officer, employee, or agency
of an insurance institution, from obtaining in-
formation as part of an insurance investiga-
tion into criminal activity, fraud, material
misrepresentation, or material nondisclosure
that is authorized for such institution under
State law, regulation, interpretation, or order.
(f) NONAPPLICABILITY TO CERTAIN TYPES OF
CUSTOMER INFORMATION OF FINANCIAL INSTITU-
TIONS.—No provision of this section shall be
construed so as to prevent any person from
obtaining customer information of a financial
institution that otherwise is available as a
public record filed pursuant to the securities
laws (as defined in section 3(a)(47) of the Se-
curities Exchange Act of 1934).
SEC. 522. ADMINISTRATIVE ENFORCEMENT.
(a) ENFORCEMENT BY FEDERAL TRADE COM-
MISSION.—Compliance with this subtitle shall
834
be enforced by the Federal Trade Commission
in the same manner and with the same power
and authority as the Commission has under
the title VIII, the Fair Debt Collection Prac-
tices Act, to enforce compliance with such
title.
(b) NOTICE
OF
ACTIONS.—The Federal
Trade Commission shall—
(1) notify the Securities and Ex-
change Commission whenever the Fed-
eral Trade Commission initiates an inves-
tigation with respect to a financial insti-
tution subject to regulation by the Secu-
rities and Exchange Commission;
(2) notify the Federal banking agency
(as defined in section 3(z) of the Federal
Deposit Insurance Act) whenever the
Commission initiates an investigation
with respect to a financial institution
subject to regulation by such Federal
banking agency; and
(3) notify the appropriate State insur-
ance regulator whenever the Commission
initiates an investigation with respect to
835
a financial institution subject to regula-
tion by such regulator.
SEC. 523. CRIMINAL PENALTY.
(a) IN GENERAL.—Whoever knowingly and
intentionally violates, or knowingly and in-
tentionally attempts to violate, section 521
shall be fined in accordance with title 18,
United States Code, or imprisoned for not
more than 5 years, or both.
(b) ENHANCED PENALTY
FOR AGGRAVATED
CASES.—Whoever violates, or attempts to vio-
late, section 521 while violating another law
of the United States or as part of a pattern of
any illegal activity involving more than
$100,000 in a 12-month period shall be fined
twice the amount provided in subsection
(b)(3) or (c)(3) (as the case may be) of section
3571 of title 18, United States Code, impris-
oned for not more than 10 years, or both.
SEC. 524. RELATION TO STATE LAWS.
(a) IN GENERAL.—This subtitle shall not be
construed as superseding, altering, or affect-
ing the statutes, regulations, orders, or inter-
pretations in effect in any State, except to the
extent that such statutes, regulations, orders,
836
or interpretations are inconsistent with the
provisions of this subtitle, and then only to
the extent of the inconsistency.
(b) GREATER
PROTECTION
UNDER
STATE
LAW.—For purposes of this section, a State
statute, regulation, order, or interpretation is
not inconsistent with the provisions of this
subtitle if the protection such statute, regula-
tion, order, or interpretation affords any per-
son is greater than the protection provided
under this subtitle as determined by the Com-
mission, on its own motion or upon the peti-
tion of any interested party.
SEC. 525. AGENCY GUIDANCE.
In furtherance of the objectives of this
subtitle, each Federal banking agency (as de-
fined in section 3(z) of the Federal Deposit In-
surance Act) and the Securities and Exchange
Commission or self-regulatory organizations,
as appropriate, shall review regulations and
guidelines applicable to financial institutions
under their respective jurisdictions and shall
prescribe such revisions to such regulations
and guidelines as may be necessary to ensure
that such financial institutions have policies,
837
procedures, and controls in place to prevent
the unauthorized disclosure of customer fi-
nancial information and to deter and detect
activities proscribed under section 521.
SEC. 526. REPORTS.
(a) REPORT TO THE CONGRESS.—Before the
end of the 18-month period beginning on the
date of the enactment of this Act, the Comp-
troller General, in consultation with the Fed-
eral Trade Commission, Federal banking
agencies, the Securities and Exchange Com-
mission, appropriate Federal law enforce-
ment agencies, and appropriate State insur-
ance regulators, shall submit to the Congress
a report on the following:
(1) The efficacy and adequacy of the
remedies provided in this subtitle in ad-
dressing attempts to obtain financial in-
formation by fraudulent means or by
false pretenses.
(2) Any recommendations for addi-
tional legislative or regulatory action to
address threats to the privacy of finan-
cial information created by attempts to
838
obtain information by fraudulent means
or false pretenses.
(b) ANNUAL
REPORT
BY
ADMINISTERING
AGENCIES.—The Federal Trade Commission
and the Attorney General shall submit to Con-
gress an annual report on number and dis-
position of all enforcement actions taken pur-
suant to this subtitle.
SEC. 527. DEFINITIONS.
For purposes of this subtitle, the fol-
lowing definitions shall apply:
(1) CUSTOMER.—The term ‘‘customer’’
means, with respect to a financial institu-
tion, any person (or authorized rep-
resentative of a person) to whom the fi-
nancial institution provides a product or
service, including that of acting as a fidu-
ciary.
(2) CUSTOMER INFORMATION OF A FINAN-
CIAL INSTITUTION.—The term ‘‘customer in-
formation 
of 
a 
financial 
institution’’
means any information maintained by or
for a financial institution which is de-
rived from the relationship between the
financial institution and a customer of
839
the financial institution and is identified
with the customer.
(3) DOCUMENT.—The term ‘‘document’’
means any information in any form.
(4) FINANCIAL INSTITUTION.—
(A) IN GENERAL.—The term ‘‘finan-
cial institution’’ means any institu-
tion engaged in the business of pro-
viding financial services to customers
who maintain a credit, deposit, trust,
or other financial account or relation-
ship with the institution.
(B) CERTAIN
FINANCIAL
INSTITU-
TIONS
SPECIFICALLY
INCLUDED.—The
term ‘‘financial institution’’ includes
any depository institution (as defined
in section 19(b)(1)(A) of the Federal
Reserve Act), any broker or dealer,
any investment adviser or investment
company, any insurance company,
any loan or finance company, any
credit card issuer or operator of a
credit card system, and any consumer
reporting agency that compiles and
maintains files on consumers on a na-
840
tionwide basis (as defined in section
603(p)).
(C) SECURITIES INSTITUTIONS.—For
purposes of subparagraph (B)—
(i) the terms ‘‘broker’’ and
‘‘dealer’’ have the meanings pro-
vided in section 3 of the Securi-
ties Exchange Act of 1934 (15
U.S.C. 78c);
(ii) the term ‘‘investment ad-
viser’’ has the meaning provided
in section 202(a)(11) of the Invest-
ment Advisers Act of 1940 (15
U.S.C. 80b–2(a)); and
(iii) 
the 
term 
‘‘investment
company’’ has the meaning pro-
vided in section 3 of the Invest-
ment Company Act of 1940 (15
U.S.C. 80a–3).
(D) FURTHER DEFINITION BY REGU-
LATION.—The Federal Trade Commis-
sion, after consultation with Federal
banking agencies and the Securities
and Exchange Commission, may pre-
scribe regulations clarifying or de-
841
scribing the types of institutions
which shall be treated as financial in-
stitutions for purposes of this sub-
title.