(c) PROCEDURES.— 
(1) CONTENTS
OF
NOTICE.—A notice served 
under subsection (a) shall include— 
(A) a statement of the grounds for facts 
underlying such notice; and 
(B) the time and place of a hearing to be 
held thereon. 
(2) HEARING.—The hearing referred to in 
paragraph (1)(B) shall take place not earlier than 
30 days nor later than 60 days after the date of 
service of notice under subsection (a), unless another 
date is set by the Commissioner at the request of 
such party. 
(3) SUSPENSION OR REMOVAL.— 
(A) FAILURE TO APPEAR.—If a duly au-
thorized representative of the party receiving 
notice of a hearing under this subsection fails 
to appear at such hearing, such party shall be 
deemed to have consented to the issuance of an 
order of such removal or prohibition. 
(B) SUSPENSION
OR
REMOVAL.—In the 
event of such consent, or if upon the record 
made at any hearing under this subsection the 
Commissioner finds that any of the grounds 
specified in such notice have been established, 
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the Commissioner may issue such orders of sus-
pension or removal from office, or prohibition 
from participation in the conduct of the affairs 
of the National Insurer or National Agency, as 
the Commissioner determines to be appropriate. 
(C) EFFECTIVE DATE.—Any order issued 
under subparagraph (B) shall become effective 
on the expiration of 30 days after service upon 
the National Insurer or National Agency and 
such party (except in the case of an order 
issued upon consent, which shall become effec-
tive at the time specified in such order). Such 
order shall remain effective and enforceable as 
provided therein, except to such extent as it is 
stayed, modified, terminated, or set aside by ac-
tion of the Commissioner or a reviewing court. 
(d) INDUSTRYWIDE PROHIBITION.— 
(1) IN GENERAL.—Except as provided under 
paragraph (2), any person who, pursuant to any 
order issued under this section or section 146, has 
been removed or suspended from office in a National 
Insurer or National Agency or prohibited from par-
ticipating in the conduct of the affairs of a National 
Insurer or National Agency may not, while such 
order is in effect— 
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(A) continue or commence to hold any of-
fice in, or participate in any manner in the con-
duct of the affairs of any National Insurer or 
National Agency; 
(B) solicit, procure, transfer, attempt to 
transfer, vote, or attempt to vote any proxy, 
consent, or authorization with respect to any 
voting rights in any National Insurer or Na-
tional Agency; 
(C) act as an insurer-affiliated party; or 
(D) act as a federally licensed insurance 
producer. 
(2) EXCEPTION.—If, on or after the date an 
order is issued under this subsection, which removes 
or suspends from office any insurer-affiliated party 
or prohibits such party from participating in the 
conduct of the affairs of a National Insurer or Na-
tional Agency, such party receives the written con-
sent of the Commissioner, paragraph (1) shall, to 
the extent of such consent, cease to apply to such 
party with respect to the National Insurer or Na-
tional Agency described in each written consent. 
(3) VIOLATION
OF
ORDER.—Any violation of 
paragraph (1) by any person who is subject to an 
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order described in such subparagraph shall be treat-
ed as a violation of the order. 
(e) STAY OF SUSPENSION OR PROHIBITION.—Not 
later than 10 days after any insurer-affiliated party has 
been suspended from office or prohibited from participa-
tion in the conduct of the affairs of a National Insurer 
or National Agency by a temporary order issued under 
subsection (b), such party may apply to the United States 
district court for the judicial district in which the main 
office of the National Insurer or National Agency is lo-
cated, or the United States District Court for the District 
of Columbia, for a stay of such suspension or prohibition 
pending the completion of the administrative proceedings 
pursuant to the notice served upon such party under sub-
section (a), and such court shall have jurisdiction to stay 
such suspension or prohibition. 
SEC. 146. SUSPENSION OR PROHIBITION BASED ON CRIMI-
NAL ACTIVITY. 
(a) SUSPENSION OR PROHIBITION.— 
(1) IN GENERAL.—The Commissioner may sus-
pend an insurer-affiliated party from office or pro-
hibit such party from further participation in any 
manner in the conduct of the affairs of a National 
Insurer or National Agency, by written notice served 
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upon such party and the National Insurer or Na-
tional Agency, if— 
(A) continued service or participation by 
such party may pose a threat to the National 
Insurer or National Agency or the interests of 
the National Insurer’s policyholders or the pol-
icyholders serviced by the National Agency; and 
(B) such party is charged in any informa-
tion, indictment, or complaint, of participation 
in— 
(i) a crime involving dishonesty or 
breach of trust which is punishable by im-
prisonment for a term exceeding 1 year 
under Federal or State law; or 
(ii) a criminal violation of section 
1956, 1957, or 1960 of title 18, United 
States Code, or section 5322 or 5324 of 
title 31, United States Code. 
(2) EFFECTIVE PERIOD.—A suspension or pro-
hibition under paragraph (1) shall remain in effect 
until the information, indictment, or complaint re-
ferred to in paragraph (1)(B) is resolved or other-
wise terminated by the Commissioner. 
(b) REMOVAL OR PROHIBITION.— 
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(1) IN GENERAL.—If a judgment of conviction 
or an agreement to enter a pretrial diversion or 
other similar program is entered against an insurer- 
affiliated party in connection with a crime described 
in subsection (a)(1)(B)(i), the Commissioner may 
issue and serve upon such party and the National 
Insurer or National Agency an order removing such 
party from office or prohibiting such party from fur-
ther participation in any manner in the conduct of 
the affairs of the National Insurer or National 
Agency without the prior written consent of the 
Commissioner if— 
(A) such judgment is not subject to further 
appellate review; and 
(B) continued service or participation by 
such party may pose a threat to the National 
Insurer or the interests of the policyholders of 
the National Insurer or a National Agency or 
the policyholders serviced by such Agency. 
(2) REQUIRED
FOR
CERTAIN
OFFENSES.—In 
the case of a judgment of conviction or agreement 
against an insurer-affiliated party in connection with 
a violation described in subsection (a)(1)(B)(ii), the 
Commissioner shall issue and serve upon such party 
and the National Insurer or National Agency an 
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order removing such party from office or prohibiting 
such party from further participation in any manner 
in the conduct of the affairs of the National Insurer 
or National Agency without the prior written con-
sent of the Commissioner. 
(3) EFFECT ON DIRECTOR OR OFFICER.—An 
insurer-affiliated party who is a director or officer 
and who is subject to an order under this subsection, 
shall cease to be a director or officer of a National 
Insurer or National Agency. 
(4) EFFECT OF ACQUITTAL.—A finding of not 
guilty or other disposition of the charge shall not 
preclude the Commissioner from instituting pro-
ceedings after such finding or disposition to remove 
such party from office or to prohibit further partici-
pation in National Insurer or National Agency af-
fairs under subsection (a) or (b) of section 145. 
(5) EFFECTIVE PERIOD.—A notice of suspen-
sion or order of removal issued under this subsection 
shall remain effective and outstanding until the com-
pletion of any hearing or appeal under subsection (c) 
or unless the suspension or order of removal is oth-
erwise terminated by the Commissioner. 
(c) ADMINISTRATIVE HEARING.— 
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(1) REQUEST.—Not later than 30 days after 
the date on which a notice of suspension or order of 
removal is received by an insurer-affiliated party 
under this subsection, such party may submit a writ-
ten request to the Commissioner for an opportunity 
to appear before the Commissioner to show that the 
continued service to, or participation in, the conduct 
of the affairs of the National Insurer or National 
Agency by such party will not pose a threat to the 
National Insurer or to the interests of its policy-
holders or to a National Agency or the policyholders 
serviced by such Agency. 
(2) TIME AND PLACE.—Upon receipt of a re-
quest under paragraph (1), the Commissioner shall 
set a time and place at which the requesting party 
may appear, personally or through counsel, before 1 
or more designated employees of the Commissioner 
to submit written materials or, at the discretion of 
the Commissioner, oral testimony, and oral argu-
ment. A hearing under this subsection shall take 
place not later than 30 days after the receipt of a 
request under paragraph (1), unless extended at the 
request of the party. 
(3) NOTIFICATION
OF
DECISION.—Not later 
than 60 days after a hearing under this subsection, 
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the Commissioner shall provide written notification 
to the insurer-affiliated party that indicates— 
(A) whether the suspension or prohibition 
from participation in any manner in the con-
duct of the affairs of the National Insurer or 
National Agency will be continued, terminated, 
or otherwise modified; 
(B) whether the order removing such party 
from office or prohibiting such party from fur-
ther participation in any manner in the conduct 
of the affairs of the National Insurer or Na-
tional Agency will be rescinded or otherwise 
modified; and 
(C) the basis for any decision by the Com-
missioner that is adverse to such party. 
SEC. 147. ANCILLARY PROVISIONS. 
(a) POWERS RELATED TO HEARINGS.—In the course 
of or in connection with any proceeding or other action 
under this subtitle, the Commissioner, and any person des-
ignated to conduct any hearing under this section, may— 
(1) administer oaths and affirmations; 
(2) take depositions or cause depositions to be 
taken; and 
(3) issue, revoke, quash, or modify subpoenas 
and subpoenas duces tecum. 
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(b) SUBPOENA POWER.— 
(1) IN GENERAL.—The Commissioner, or des-
ignee of the Commissioner, may require the attend-
ance of witnesses and the production of documents 
provided for in this section from any place in any 
State or other place subject to the jurisdiction of the 
United States at any designated place where such 
proceeding or other action is being conducted. 
(2) ENFORCEMENT.—The Commissioner or any 
party to proceedings under this section may apply 
for the enforcement of any subpoena or subpoena 
duces tecum issued under this section to— 
(A) the United States District Court for 
the District of Columbia; or 
(B) the United States district court for the 
judicial district in which— 
(i) such proceeding or other action is 
being conducted; or 
(ii) the witness resides or carries on 
business. 
(3) JURISDICTION.—The courts described under 
paragraph (2) shall have jurisdiction and power to 
order and require compliance with any subpoena or 
subpoena duces tecum issued under this section. 
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(4) FEES AND MILEAGE.—Any witness subpoe-
naed under this subsection shall be paid the same 
fees and mileage that are paid witnesses in the dis-
trict courts of the United States. 
(5) PENALTY FOR NONCOMPLIANCE.—Any per-
son who willfully fails or refuses to attend and tes-
tify or to answer any lawful inquiry or to produce 
books, papers, correspondence, memoranda, con-
tracts, agreements, or other records, if in such per-
son’s power so to do, in obedience to the subpoena 
of the Commissioner, shall be guilty of a mis-
demeanor and, upon conviction, shall be subject to 
a fine of not more than $1,000 or to imprisonment 
for a term of not more than 1 year or both. 
(c) EXPENSES AND ATTORNEY FEES.— 
(1) IN GENERAL.—Any court having jurisdic-
tion of any proceeding or other action instituted 
under this section by a National Insurer or National 
Agency, a federally licensed insurance producer, or 
an insurer-affiliated party may allow any such party 
to receive such reasonable expenses and attorneys’ 
fees as it determines to be just and proper. 
(2) PAYMENT OF EXPENSES AND FEES.—Ex-
penses and fees awarded under paragraph (1) shall 
be paid by the National Insurer or National Agency, 
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the federally licensed insurance producer, or the in-
surer-affiliated party from the assets of such in-
surer, agency, producer, or party. 
(d) RULEMAKING.—The Commissioner may promul-
gate such regulations as may be necessary with respect 
to any proceedings, claims, examinations, investigations, 
or other actions authorized by this subtitle. 
(e) EFFECT ON BOARD OF DIRECTORS.— 
(1) LACK OF QUORUM.—If the suspension of 1 
or more directors under this subtitle reduces the 
board of directors of a National Insurer or National 
Agency below a quorum, all powers and functions 
vested in or exercisable by such board shall vest in, 
and be exercisable by, the director or directors on 
the board not so suspended, until a quorum is rees-
tablished. 
(2) TEMPORARY APPOINTMENTS.—If all of the 
directors of a National Insurer or National Agency 
are suspended under this subtitle, the Commissioner 
shall appoint persons to serve temporarily as direc-
tors in their place until the earlier of the date on 
which— 
(A) the suspensions are terminated; or 
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(B) the suspended directors are replaced 
on the board of directors of the National In-
surer or National Agency. 
(f) NOTICE AFTER SEPARATION FROM SERVICE.— 
The resignation, termination of employment or participa-
tion, or separation of an insurer-affiliated party (including 
a separation caused by the closing of a National Insurer 
or National Agency) shall not affect the jurisdiction and 
authority of the Commissioner to issue any notice against 
any such party under this subtitle if such notice is served 
before the end of the 6-year period beginning on the date 
on which such party ceased to be an insurer-affiliated 
party with respect to such National Insurer or National 
Agency. 
SEC. 148. HEARINGS AND JUDICIAL REVIEW OF REMOVAL, 
SUSPENSION, OR PROHIBITION ORDER. 
(a) JUDICIAL HEARING.— 
(1) IN GENERAL.—A hearing under this subtitle 
(except for a hearing under section 146(c))— 
(A) shall be conducted in accordance with 
the provisions of chapter 5 of title 5, United 
States Code; and 
(B) shall be held in the Federal judicial 
district in which the main office of the National 
Insurer or National Agency is located or in 
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which the federally licensed insurance producer 
or the insurer-affiliated party is located, unless 
the party afforded the hearing consents to an-
other place. 
(2) JUDGMENT.—After a hearing under this 
subsection and not later than 90 days after the 
Commissioner has notified the parties that the case 
has been submitted to the Commissioner for final 
decision, the Commissioner shall— 
(A) render a decision; 
(B) issue and serve upon each party to the 
proceeding an order or orders consistent with 
the provisions of this subtitle; and 
(C) include findings of fact upon which the 
Commissioner’s decision is predicated. 
(b) JUDICIAL REVIEW.— 
(1) IN GENERAL.—Judicial review of any order 
under this subtitle shall be limited to the provisions 
under this section. 
(2) MODIFICATION OR TERMINATION OF ORDER 
BY COMMISSIONER.— 
(A) BEFORE APPEAL.—Until a petition for 
review is timely filed in a court of appeals of 
the United States, in accordance with para-
graph (3), the Commissioner may modify, ter-
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minate, or set aside any order under this sec-
tion. 
(B) AFTER APPEAL.—After an appeal de-
scribed under subparagraph (A) is filed, the 
Commissioner may not modify, terminate, or 
set aside any order under this section without 
the permission of the court. 
(3) FILING OF PETITION.— 
(A) IN
GENERAL.—Except as provided 
under subparagraph (B), any party to a pro-
ceeding under this section may obtain judicial 
review of any order served under subsection (a) 
by filing a written petition in a court of appeals 
described in subparagraph (C) not later than 
30 days after the date of service of such order, 
requesting that the order of the Commissioner 
be modified, terminated, or set aside. 
(B) EXCEPTION.—Judicial review shall not 
be available for an order issued under sub-
section (d) with the consent of the National In-
surer or National Agency, the federally licensed 
insurance producer, or the insurer-affiliated 
party. 
(C) JURISDICTION.—After a petition is 
filed under this paragraph, the following courts 
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shall have exclusive jurisdiction to modify, ter-
minate, or set aside, in whole or in part, the 
order of the Commissioner: 
(i) The court of appeals of the United 
States for the circuit in which— 
(I) the main office of the Na-
tional Insurer or National Agency is 
located; or 
(II) the federally licensed insur-
ance producer or the insurer-affiliated 
party is located. 
(ii) The United States Court of Ap-
peals for the District of Columbia. 
(4) FILING OF RECORD.—The clerk of the court 
shall transmit a copy of the petition filed under 
paragraph (3) to the Commissioner, who shall file in 
the court the record in the proceeding, in accordance 
with section 2112 of title 28, United States Code. 
(5) EFFECT OF REVIEW PROCEEDINGS.—The 
commencement of proceedings for judicial review 
under this subsection shall not, unless specifically 
ordered by the court, operate as a stay of any order 
issued by the Commissioner. 
(6) FINAL JUDGMENT.—Judicial review under 
this section shall be subject to chapter 7 of title 5, 
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United States Code. The judgment and decree of the 
court shall be final, except that the same shall be 
subject to review by the Supreme Court upon certio-
rari, as provided in section 1254 of title 28, United 
States Code. 
(c) ENFORCEMENT OF COMMISSIONER ORDER.— 
(1) APPLICATION.—The Commissioner may 
submit an application, to enforce any effective and 
outstanding notice or order issued under this sec-
tion, to the United States district court for the judi-
cial district in which— 
(A) the main office of the National Insurer 
or National Agency is located; 
(B) the federally licensed insurance pro-
ducer is located; or 
(C) the insurer-affiliated party is located. 
(2) JURISDICTION.—The courts described in 
paragraph (1)— 
(A) shall have jurisdiction and power to 
order and require compliance with an order of 
the Commissioner under this subtitle; and 
(B) except as otherwise provided in this 
subtitle, shall not have jurisdiction to affect, by 
injunction or otherwise, the issuance or enforce-
ment of any notice or order under this subtitle, 
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or to review, modify, suspend, terminate, or set 
aside any such notice or order. 
SEC. 149. CIVIL AND CRIMINAL PENALTIES. 
(a) CIVIL MONEY PENALTY.— 
(1) FIRST TIER.—A National Insurer or Na-
tional Agency, federally licensed insurance producer, 
or insurer-affiliated party shall pay a civil penalty of 
not more than $5,000 for each day during which 
such entity— 
(A) violates any law or regulation; 
(B) violates any final order or temporary 
order issued pursuant to section 143, 144, 145, 
or 146; 
(C) violates any condition imposed in writ-
ing by the Commissioner in connection with the 
grant of any application or other request by 
such National Insurer or National Agency, pro-
ducer or party; or 
(D) violates any written agreement be-
tween such National Insurer or National Agen-
cy, producer, or party and the Commissioner. 
(2) SECOND TIER.—Notwithstanding paragraph 
(1), a National Insurer, National Agency, federally 
licensed insurance producer, or insurer-affiliated 
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party shall pay a civil penalty of not more than 
$25,000 for each day— 
(A) during which such entity— 
(i) commits any violation described in 
any clause of paragraph (1); 
(ii) recklessly engages in any conduct 
that is hazardous to a National Insurer, 
State insurer, United States branch of a 
non-United States insurer, or National 
Agency and that involves an undue risk to 
the policyholders, as a whole, of such Na-
tional Insurer, State insurer, or United 
States branch of a non-United States in-
surer or the policyholders, as a whole, serv-
iced by such National Agency; or 
(iii) breaches any fiduciary duty; and 
(B) for which such violation, conduct, or 
breach— 
(i) is part of a pattern of misconduct; 
(ii) causes or is likely to cause more 
than a minimal loss to such National In-
surer, State insurer, or United States 
branch of a non-United States insurer; or 
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(iii) results in pecuniary gain or other 
benefit to such National Agency, producer 
or affiliated party. 
(3) THIRD TIER.—Notwithstanding paragraphs 
(1) and (2), a National Insurer, National Agency, 
federally licensed insurance producer, or any in-
surer-affiliated party shall pay a civil penalty in an 
amount not to exceed the applicable maximum 
amount determined under paragraph (4) for each 
day during which such entity— 
(A) knowingly— 
(i)(I) commits any violation described 
in any clause of paragraph (1); or 
(II) engages in any conduct that is 
hazardous to a National Insurer, State in-
surer, United States branch of a non- 
United States insurer, or National Agency 
and that involves an undue risk to the pol-
icyholders, as a whole, of such National In-
surer, State insurer, or United States 
branch of a non-United States insurer or 
the policyholders, as a whole, serviced by 
such National Agency; and 
(ii) breaches any fiduciary duty; and 
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100 
(B) knowingly or recklessly causes a sub-
stantial loss to such National Insurer, State in-
surer, United States branch of a non-United 
States insurer, or National Agency or a sub-
stantial pecuniary gain or other benefit to such 
producer or affiliated party by reason of such 
violation, conduct, or breach. 
(4) MAXIMUM
AMOUNTS
OF
PENALTIES
FOR 
ANY VIOLATION DESCRIBED IN PARAGRAPH (3).— 
The maximum daily amount of any civil penalty 
which may be assessed under paragraph (3) for any 
violation, practice, or breach described in such para-
graph is $1,000,000. 
(5) ASSESSMENT.— 
(A) WRITTEN NOTICE.—Any penalty im-
posed under paragraph (1), (2), or (3) may be 
assessed and collected by the Commissioner by 
written notice, which shall contain a statement 
of the facts constituting the basis for the as-
sessment of any penalty imposed under para-
graph (1), (2), or (3). 
(B) FINALITY OF ASSESSMENT.—If, with 
respect to any assessment under subparagraph 
(A), a hearing is not requested under para-
graph (8) within the period of time allowed 
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101 
under such paragraph, the assessment shall 
constitute a final and unappealable order. 
(6) AUTHORITY
TO
MODIFY
OR
REMIT
PEN-
ALTY.—The Commissioner may compromise, modify, 
or remit any penalty which the Commissioner may 
assess or had already assessed under paragraph (1), 
(2), or (3). 
(7) MITIGATING FACTORS.—In determining the 
amount of any penalty imposed under paragraph 
(1), (2), or (3), the Commissioner shall take into ac-
count the appropriateness of the penalty in relation 
to— 
(A) the size of financial resources and good 
faith of the National Insurer, National Agency, 
or other person charged; 
(B) the gravity of the violation; 
(C) the history of previous violations; and 
(D) such other matters as justice may re-
quire. 
(8) HEARING.—The National Insurer, National 
Agency, or other person against whom any penalty 
is assessed under this paragraph shall be afforded a 
hearing by the Commissioner if such National In-
surer, National Agency, or person submits a request 
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102 
for such hearing within 20 days after the issuance 
of the notice of assessment. 
(9) COLLECTION.— 
(A) REFERRAL.—If any National Insurer, 
National Agency, or other person fails to pay 
an assessment after any penalty assessed under 
this paragraph has become final, the Commis-
sioner shall recover the amount assessed by ac-
tion in the appropriate United States district 
court. 
(B) APPROPRIATENESS OF PENALTY NOT 
REVIEWABLE.—In any civil action under sub-
paragraph (A), the validity and appropriateness 
of the penalty shall not be subject to review. 
(10) DISBURSEMENT AND USE.—All penalties 
collected under authority of this paragraph shall be 
deposited into the Treasury, and shall not be used 
to fund the compensation of the Commissioner or 
employees of the Office or the expenses of the Of-
fice. 
(b) PREJUDGMENT ATTACHMENT.— 
(1) IN GENERAL.—In any action brought by the 
Commissioner under this section, or in actions 
brought in aid of, or to enforce an order in, any ad-
ministrative or other civil action for money damages, 
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restitution, or civil money penalties brought by the 
Commissioner, the court may, upon application of 
the Commissioner, issue a restraining order that— 
(A) prohibits any person subject to the 
proceeding from withdrawing, transferring, re-
moving, dissipating, or disposing of any funds, 
assets, or other property; and 
(B) appoints a temporary receiver to ad-
minister the restraining order. 
(2) STANDARD.— 
(A) SHOWING.—Rule 65 of the Federal 
Rules of Civil Procedure shall apply with re-
spect to any proceeding under paragraph (1), 
without regard to the requirement of such rule 
that the applicant show that the injury, loss, or 
damage is irreparable and immediate. 
(B) STATE PROCEEDING.—If, in the case 
of any proceeding in a State court, the court 
determines that rules of civil procedure avail-
able under the laws of such State provide sub-
stantially similar protections to a party’s right 
to due process as Rule 65, the relief sought 
under paragraph (1) may be requested under 
the laws of such State. 
(c) CRIMINAL PENALTY.— 
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