1662 
automated valuation model, a broker price opinion, 
or other methodology or mechanism.’’. 
SEC. 9506. REAL ESTATE SETTLEMENT PROCEDURES ACT 
OF 1974 AMENDMENT RELATING TO CERTAIN 
APPRAISAL FEES. 
Section 4 of the Real Estate Settlement Procedures 
Act of 1974 is amended by adding at the end the following 
new subsection: 
‘‘(c) The standard form described in subsection (a) 
shall include, in the case of an appraisal coordinated by 
an appraisal management company (as such term is de-
fined in section 1121(11) of the Financial Institutions Re-
form, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
3350(11))), a clear disclosure of— 
‘‘(1) the fee paid directly to the appraiser by 
such company; and 
‘‘(2) the administration fee charged by such 
company.’’.
1663 
Subtitle G—Sense of Congress Re-
garding the Importance of Gov-
ernment Sponsored Enterprises 
Reform 
SEC. 9601. SENSE OF CONGRESS REGARDING THE IMPOR-
TANCE OF GOVERNMENT-SPONSORED EN-
TERPRISES REFORM TO ENHANCE THE PRO-
TECTION, LIMITATION, AND REGULATION OF 
THE TERMS OF RESIDENTIAL MORTGAGE 
CREDIT. 
(a) FINDINGS.—The Congress finds as follows: 
(1) The Government-sponsored enterprises, 
Federal National Mortgage Association (Fannie 
Mae) and the Federal Home Loan Mortgage Cor-
poration (Freddie Mac), were chartered by Congress 
to ensure a reliable and affordable supply of mort-
gage funding, but enjoy a dual legal status as pri-
vately owned corporations with Government man-
dated affordable housing goals. 
(2) In 1996, the Department of Housing and 
Urban Development required that 42 percent of 
Fannie Mae’s and Freddie Mac’s mortgage financing 
should go to borrowers with income levels below the 
median for a given area.
1664 
(3) In 2004, the Department of Housing and 
Urban Development revised those goals, increasing 
them to 56 percent of their overall mortgage pur-
chases by 2008, and additionally mandated that 12 
percent of all mortgage purchases by Fannie Mae 
and Freddie Mac be ‘‘special affordable’’ loans made 
to borrowers with incomes less than 60 percent of an 
area’s median income, a target that ultimately in-
creased to 28 percent for 2008. 
(4) To help fulfill those mandated affordable 
housing goals, in 1995 the Department of Housing 
and Urban Development authorized Fannie Mae and 
Freddie Mac to purchase subprime securities that 
included loans made to low-income borrowers. 
(5) After this authorization to purchase 
subprime securities, subprime and near-prime loans 
increased from 9 percent of securitized mortgages in 
2001 to 40 percent in 2006, while the market share 
of conventional mortgages dropped from 78.8 per-
cent in 2003 to 50.1 percent by 2007 with a cor-
responding increase in subprime and Alt-A loans 
from 10.1 percent to 32.7 percent over the same pe-
riod. 
(6) In 2004 alone, Fannie Mae and Freddie 
Mac purchased $175,000,000,000 in subprime mort-
1665 
gage securities, which accounted for 44 percent of 
the market that year, and from 2005 through 2007, 
Fannie Mae and Freddie Mac purchased approxi-
mately $1,000,000,000,000 in subprime and Alt-A 
loans, while Fannie Mae’s acquisitions of mortgages 
with less than 10 percent down payments almost tri-
pled. 
(7) According to data from the Federal Hous-
ing Finance Agency (FHFA) for the fourth quarter 
of 2008, Fannie Mae and Freddie Mac own or guar-
antee 75 percent of all newly originated mortgages, 
and Fannie Mae and Freddie Mac currently own 
13.3 percent of outstanding mortgage debt in the 
United States and have issued mortgage-backed se-
curities for 31.0 percent of the residential debt mar-
ket, a combined total of 44.3 percent of outstanding 
mortgage debt in the United States. 
(8) On September 7, 2008, the FHFA placed 
Fannie Mae and Freddie Mac into conservatorship, 
with the Treasury Department subsequently agree-
ing to purchase at least $200,000,000,000 of pre-
ferred stock from each enterprise in exchange for 
warrants for the purchase of 79.9 percent of each 
enterprise’s common stock.
1666 
(9) The conservatorship for Fannie Mae and 
Freddie Mac has potentially exposed taxpayers to 
upwards of $5,300,000,000,000 worth of risk. 
(10) The hybrid public-private status of Fannie 
Mae and Freddie Mac is untenable and must be re-
solved to assure that consumers are offered and re-
ceive residential mortgage loans on terms that rea-
sonably reflect their ability to repay the loans and 
that are understandable and not unfair, deceptive, or 
abusive. 
(b) SENSE OF THE CONGRESS.—It is the sense of 
the Congress that efforts to enhance by the protection, 
limitation, and regulation of the terms of residential mort-
gage credit and the practices related to such credit would 
be incomplete without enactment of meaningful structural 
reforms of Fannie Mae and Freddie Mac. 
Subtitle H—Reports and Data 
Collection 
SEC. 9701. GAO STUDY REPORT ON GOVERNMENT EFFORTS 
TO COMBAT MORTGAGE FORECLOSURE RES-
CUE 
SCAMS 
AND 
LOAN 
MODIFICATION 
FRAUD. 
(a) STUDY.—The Comptroller General of the United 
States shall conduct a study of the current inter-agency 
efforts of the Secretary of the Treasury, the Secretary of
1667 
Housing and Urban Development, the Attorney General, 
and the Federal Trade Commission to crackdown on mort-
gage foreclosure rescue scams and loan modification fraud 
in order to advise the Congress to the risks and 
vulnerabilities of emerging schemes in the loan modifica-
tion arena. 
(b) REPORT.— 
(1) IN
GENERAL.—The Comptroller General 
shall submit a report to the Congress on the study 
conducted under subsection (a) containing such rec-
ommendations for legislative and administrative ac-
tions as the Comptroller General may determine to 
be appropriate in addition to the recommendations 
required under paragraph (2). 
(2) SPECIFIC TOPICS.—The report made under 
paragraph (1) shall include— 
(A) an evaluation of the effectiveness of 
the inter-agency task force current efforts to 
combat mortgage foreclosure rescue scams and 
loan modification fraud scams; 
(B) specific recommendations on agency or 
legislative action that are essential to properly 
protect homeowners from mortgage foreclosure 
rescue scams and loan modification fraud 
scams; and
1668 
(C) the adequacy of financial resources 
that the Federal Government is allocating to— 
(i) crackdown on loan modification 
and foreclosure rescue scams; and 
(ii) the education of homeowners 
about fraudulent scams relating to loan 
modification and foreclosure rescues. 
SEC. 9702. REPORTING OF MORTGAGE DATA BY STATE. 
(a) IN GENERAL.—Section 104(a) of the Helping 
Families Save Their Homes Act of 2009 (division A of 
Public Law 111–22) is amended— 
(1) in paragraph (2), by striking ‘‘resulting’’ 
and inserting ‘‘in each State that result’’; 
(2) in paragraph (3), by inserting ‘‘each State 
for’’ after ‘‘modifications in’’; and 
(3) in paragraph (4), by inserting ‘‘in each 
State’’ after ‘‘total number of loans’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
104(b)(1)(A) of such Act is amended by adding at the end 
the following sentence: ‘‘Not later than 60 days after the 
date of the enactment of the Wall Street Reform and Con-
sumer Protection Act of 2009, the Comptroller of the Cur-
rency and the Director of the Office of Thrift Supervision 
shall update such requirements to reflect amendments 
made to this section by such Act.’’.
1669 
Subtitle I—Multifamily Mortgage 
Resolution 
SEC. 9801. MULTIFAMILY MORTGAGE RESOLUTION PRO-
GRAM. 
(a) ESTABLISHMENT.—The Secretary of Housing 
and Urban Development shall develop a program under 
this subsection to ensure the protection of current and fu-
ture tenants and at-risk multifamily properties, where fea-
sible, based on criteria that may include— 
(1) creating sustainable financing of such prop-
erties, that may take into consideration such factors 
as— 
(A) the rental income generated by such 
properties; and 
(B) the preservation of adequate operating 
reserves; 
(2) maintaining the level of Federal, State, and 
city subsidies in effect as of the date of the enact-
ment of this Act; 
(3) providing funds for rehabilitation; and 
(4) facilitating the transfer of such properties, 
when appropriate and with the agreement of owners, 
to responsible new owners and ensuring affordability 
of such properties.
1670 
(b) COORDINATION.—The Secretary of Housing and 
Urban Development may, in carrying out the program de-
veloped under this section, coordinate with the Secretary 
of the Treasury, the Federal Deposit Insurance Corpora-
tion, the Board of Governors of the Federal Reserve Sys-
tem, the Federal Housing Finance Agency, and any other 
Federal Government agency that the Secretary considers 
appropriate. 
(c) DEFINITION.—For purposes of this section, the 
term ‘‘multifamily properties’’ means a residential struc-
ture that consists of 5 or more dwelling units. 
Subtitle J—Study of Effect of 
Drywall Presence on Foreclosures 
SEC. 9901. STUDY OF EFFECT OF DRYWALL PRESENCE ON 
FORECLOSURES. 
(a) STUDY.—The Secretary of Housing and Urban 
Development, in consultation with the Secretary of the 
Treasury, shall conduct a study of the effect on residential 
mortgage loan foreclosures of— 
(1) the presence in residential structures sub-
ject to such mortgage loans of drywall that was im-
ported from China during the period beginning with 
2004 and ending at the end of 2007; and
1671 
(2) the availability of property insurance for 
residential structures in which such drywall is 
present. 
(b) REPORT.—Not later than the expiration of the 
120-day period beginning on the date of the enactment 
of this Act, the Secretary of Housing and Urban Develop-
ment shall submit to the Congress a report on the study 
conducted under subsection (a) containing its findings, 
conclusions, and recommendations. 
Subtitle K—Home Affordable 
Modification Program 
SEC. 9911. HOME AFFORDABLE MODIFICATION PROGRAM 
GUIDELINES. 
(a) NET PRESENT VALUE INPUT DATA.—The Sec-
retary of the Treasury (in this section referred to as the 
‘‘Secretary’’) shall revise the supplemental directives and 
other guidelines for the Home Affordable Modification 
Program of the Making Home Affordable initiative of the 
Secretary of the Treasury, authorized under the Emer-
gency Economic Stabilization Act of 2008 (Public Law 
110–343), to require each mortgage servicer participating 
in such program to provide each borrower under a mort-
gage whose request for a mortgage modification under the 
Program is denied with all borrower-related and mort-
gage-related input data used in any net present value
1672 
(NPV) analyses performed in connection with the subject 
mortgage. Such input data shall be provided to the bor-
rower at the time of such denial. 
(b) WEB-BASED SITE FOR NPV CALCULATOR AND 
APPLICATION.— 
(1) NPV CALCULATOR.—In carrying out the 
Home Affordable Modification Program, the Sec-
retary shall establish and maintain a site on the 
World Wide Web that provides a calculator for net 
present value analyses of a mortgage, based on the 
Secretary’s methodology for calculating such value, 
that mortgagors can use to enter information re-
garding their own mortgages and that provides a de-
termination after entering such information regard-
ing a mortgage of whether such mortgage would be 
accepted or rejected for modification under the Pro-
gram, using such methodology. 
(2) DISCLOSURE.— Such Web site shall also 
prominently disclose that each mortgage servicer 
participating in such Program may use a method for 
calculating net present value of a mortgage that is 
different than the method used by such calculator. 
(3) APPLICATION.— The Secretary shall make 
a reasonable effort to include on such World Wide 
Web site a method for homeowners to apply for a
1673 
mortgage modification under the Home Affordable 
Modification Program. 
(c) PUBLIC AVAILABILITY OF NPV METHODOLOGY, 
COMPUTER MODEL, AND VARIABLES.—The Secretary 
shall make publicly available, including by posting on a 
World Wide Web site of the Secretary— 
(1) the Secretary’s methodology and computer 
model, including all formulae used in such computer 
model, used for calculating net present value of a 
mortgage that is used by the calculator established 
pursuant to subsection (b); and 
(2) all variables used in such net present value 
analysis. 
Subtitle L—Making Home 
Affordable Program 
SEC. 9921. PUBLIC AVAILABILITY OF INFORMATION. 
(a) REVISIONS TO PROGRAM GUIDELINES.—The Sec-
retary of the Treasury (in this section referred to as the 
‘‘Secretary’’) shall revise the guidelines for the Home Af-
fordable Modification Program of the Making Home Af-
fordable initiative of the Secretary of the Treasury, au-
thorized under the Emergency Economic Stabilization Act 
of 2008 (Public Law 110–343), to provide that the data 
being collected by the Secretary from each mortgage
1674 
servicer and lender participating in the Program is made 
public in accordance with subsection (b). 
(b) PUBLIC AVAILABILITY.—Data shall be made 
available according to the following guidelines: 
(1) Not more than 14 days after each monthly 
deadline for submission of data by mortgage 
servicers and lenders participating in the Program, 
reports shall be made publicly available by means of 
a World Wide Web site of the Secretary, and by sub-
mitting a report to the Congress, that shall includes 
the following information: 
(A) The number of requests for mortgage 
modifications under the Program that the 
servicer or lender has received. 
(B) The number of requests for mortgage 
modifications under the Program that the 
servicer or lender has processed. 
(C) The number of requests for mortgage 
modifications under the Program that the 
servicer or lender has approved. 
(D) The number of requests for mortgage 
modifications under the Program that the 
servicer or lender has denied. 
(2) Not more than 60 days after each monthly 
deadline for submission of data by mortgage
1675 
servicers and lenders participating in the Program, 
the Secretary shall make data tables available to the 
public at the individual record level. The Secretary 
shall issue regulations prescribing— 
(A) the procedures for disclosing such data 
to the public; and 
(B) such deletions as the Secretary may 
determine to be appropriate to protect any pri-
vacy interest of any mortgage modification ap-
plicant, including the deletion or alteration of 
the applicant’s name and identification number. 
TITLE 
VIII—FORECLOSURE 
AVOIDANCE 
AND 
AFFORD-
ABLE HOUSING 
SEC. 10001. EMERGENCY MORTGAGE RELIEF. 
(a) USE OF TARP FUNDS.—Using the authority 
available under sections 101(a) and 115(a) of division A 
of the Emergency Economic Stabilization Act of 2008 (12 
U.S.C. 5211(a), 5225(a)), the Secretary of the Treasury 
shall transfer to the Secretary of Housing and Urban De-
velopment $3,000,000,000, and the Secretary of Housing 
and Urban Development shall credit such amount to the 
Emergency Homeowners’ Relief Fund, which such Sec-
retary shall establish pursuant to section 107 of the Emer-
gency Housing Act of 1975 (12 U.S.C. 2706), as such
1676 
Act is amended by this section, for use for emergency 
mortgage assistance in accordance with title I of such Act. 
(b) REAUTHORIZATION OF EMERGENCY MORTGAGE 
RELIEF PROGRAM.—Title I of the Emergency Housing 
Act of 1975 is amended— 
(1) in section 103 (12 U.S.C. 2702)— 
(A) in paragraph (2)— 
(i) by striking ‘‘have indicated’’ and 
all that follows through ‘‘regulation of the 
holder’’ and insert ‘‘have certified’’; 
(ii) by striking ‘‘(such as the volume 
of delinquent loans in its portfolio)’’; and 
(iii) by striking ‘‘, except that such 
statement’’ and all that follows through 
‘‘purposes of this title’’; and 
(B) in paragraph (4), by inserting ‘‘or 
medical conditions’’ after ‘‘adverse economic 
conditions’’; 
(2) in section 104 (12 U.S.C. 2703)— 
(A) in subsection (b), by striking ‘‘, but 
such assistance’’ and all that follows through 
the period at the end and inserting the fol-
lowing: ‘‘. The amount of assistance provided to 
a homeowner under this title shall be an 
amount that the Secretary determines is rea-
1677 
sonably necessary to supplement such amount 
as the homeowner is capable of contributing to-
ward such mortgage payment, except that the 
aggregate amount of such assistance provided 
for any homeowner shall not exceed $50,000.’’; 
(B) in subsection (d), by striking ‘‘interest 
on a loan or advance’’and all that follows 
through the end of the subsection and inserting 
the following: ‘‘(1) the rate of interest on any 
loan or advance of credit insured under this 
title shall be fixed for the life of the loan or ad-
vance of credit and shall not exceed the rate of 
interest that is generally charged for mortgages 
on single-family housing insured by the Sec-
retary of Housing and Urban Development 
under title II of the National Housing Act at 
the time such loan or advance of credit is made, 
and (2) no interest shall be charged on interest 
which is deferred on a loan or advance of credit 
made under this title. In establishing rates, 
terms and conditions for loans or advances of 
credit made under this title, the Secretary shall 
take into account a homeowner’s ability to 
repay such loan or advance of credit.’’; and
1678 
(C) in subsection (e), by inserting after the 
period at the end of the first sentence the fol-
lowing: ‘‘Any eligible homeowner who receives a 
grant or an advance of credit under this title 
may repay the loan in full, without penalty, by 
lump sum or by installment payments at any 
time before the loan becomes due and pay-
able.’’; 
(3) in section 105 (12 U.S.C. 2704)— 
(A) by striking subsection (b); 
(B) in subsection (e)— 
(i) by inserting ‘‘and emergency mort-
gage relief payments made under section 
106’’ after ‘‘insured under this section’’; 
and 
(ii) by striking ‘‘$1,500,000,000 at 
any 
one 
time’’ 
and 
inserting 
‘‘$3,000,000,000’’; 
(C) by redesignating subsections (c), (d), 
and (e) as subsections (b), (c), and (d), respec-
tively; and 
(D) by adding at the end the following new 
subsection: 
‘‘(e) The Secretary shall establish underwriting 
guidelines or procedures to allocate amounts made avail-
1679 
able for loans and advances insured under this section and 
for emergency relief payments made under section 106 
based on the likelihood that a mortgagor will be able to 
resume mortgage payments, pursuant to the requirement 
under section 103(5).’’; 
(4) in section 107— 
(A) by striking ‘‘(a)’’; and 
(B) by striking subsection (b); 
(5) in section 108 (12 U.S.C. 2707), by adding 
at the end the following new subsection: 
‘‘(d) COVERAGE OF EXISTING PROGRAMS.—The Sec-
retary shall allow funds to be administered by a State that 
has an existing program that is determined by the Sec-
retary to provide substantially similar assistance to home-
owners. After such determination is made such State shall 
not be required to modify such program to comply with 
the provisions of this title.’’; 
(6) in section 109 (12 U.S.C. 2708)— 
(A) in the section heading, by striking 
‘‘AUTHORIZATION AND’’; 
(B) by striking subsection (a); 
(C) by striking ‘‘(b)’’; and 
(D) by striking ‘‘1977’’ and inserting 
‘‘2011’’;
1680 
(7) by striking sections 110, 111, and 113 (12 
U.S.C. 2709, 2710, 2712); and 
(8) by redesignating section 112 (12 U.S.C. 
2711) as section 110. 
SEC. 10002. ADDITIONAL ASSISTANCE FOR NEIGHBORHOOD 
STABILIZATION PROGRAM. 
Using the authority made available under sections 
101(a) and 115(a) of division A of the Emergency Eco-
nomic Stabilization Act of 2008 (12 U.S.C. 5211(a), 
5225(a)), the Secretary of the Treasury shall transfer to 
the Secretary of Housing and Urban Development 
$1,000,000,000, and the Secretary of Housing and Urban 
Development shall use such amounts for assistance to 
States and units of general local government for the rede-
velopment of abandoned and foreclosed homes, in accord-
ance with the same provisions applicable under the second 
undesignated paragraph under the heading ‘‘Community 
Planning and Development—Community Development 
Fund’’ in title XII of division A of the American Recovery 
and Reinvestment Act of 2009 (Public Law 111–5; 123 
Stat. 217) to amounts made available under such second 
undesignated paragraph, except as follows: 
(1) Notwithstanding the matter of such second 
undesignated paragraph that precedes the first pro-
1683 
(i) any organization which has been con-
victed for a violation under Federal law relating 
to an election for Federal office; or 
(ii) any organization which employs appli-
cable individuals. 
(B) In this paragraph, the term ‘‘applicable in-
dividual’’ means an individual who— 
(i) is— 
(I) employed by the organization in a 
permanent or temporary capacity; 
(II) contracted or retained by the or-
ganization; or 
(III) acting on behalf of, or with the 
express or apparent authority of, the orga-
nization; and 
(ii) has been convicted for a violation 
under Federal law relating to an election for 
Federal office. 
TITLE IX—NONADMITTED AND 
REINSURANCE REFORM ACT 
SEC. 10051. SHORT TITLE. 
This title may be cited as the ‘‘Nonadmitted and Re-
insurance Reform Act of 2009’’.
1684 
SEC. 10052. EFFECTIVE DATE. 
Except as otherwise specifically provided in this title, 
this title shall take effect upon the expiration of the 12- 
month period beginning on the date of the enactment of 
this Act. 
Subtitle A—Nonadmitted Insurance 
SEC. 10101. REPORTING, PAYMENT, AND ALLOCATION OF 
PREMIUM TAXES. 
(a) HOME STATE’S EXCLUSIVE AUTHORITY.— No 
State other than the home State of an insured may require 
any premium tax payment for nonadmitted insurance. 
(b) ALLOCATION
OF
NONADMITTED
PREMIUM 
TAXES.— 
(1) IN GENERAL.—The States may enter into a 
compact or otherwise establish procedures to allocate 
among the States the premium taxes paid to an in-
sured’s home State described in subsection (a). 
(2) EFFECTIVE
DATE.—Except as expressly 
otherwise provided in such compact or other proce-
dures, any such compact or other procedures— 
(A) if adopted on or before the expiration 
of the 330-day period that begins on the date 
of the enactment of this Act, shall apply to any 
premium taxes that, on or after such date of 
enactment, are required to be paid to any State
1685 
that is subject to such compact or procedures; 
and 
(B) if adopted after the expiration of such 
330-day period, shall apply to any premium 
taxes that, on or after January 1 of the first 
calendar year that begins after the expiration of 
such 330-day period, are required to be paid to 
any State that is subject to such compact or 
procedures. 
(3) REPORT.—Upon the expiration of the 330- 
day period referred to in paragraph (2), the NAIC 
may submit a report to the Committee on Financial 
Services and Committee on the Judiciary of the 
House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate 
identifying and describing any compact or other pro-
cedures for allocation among the States of premium 
taxes that have been adopted during such period by 
any States. 
(4) NATIONWIDE SYSTEM.—The Congress in-
tends that each State adopt nationwide uniform re-
quirements, forms, and procedures, such as an inter-
state compact, that provides for the reporting, pay-
ment, collection, and allocation of premium taxes for 
nonadmitted insurance consistent with this section.
1686 
(c) ALLOCATION BASED ON TAX ALLOCATION RE-
PORT.— To facilitate the payment of premium taxes 
among the States, an insured’s home State may require 
surplus lines brokers and insureds who have independently 
procured insurance to annually file tax allocation reports 
with the insured’s home State detailing the portion of the 
nonadmitted insurance policy premium or premiums at-
tributable to properties, risks or exposures located in each 
State. The filing of a nonadmitted insurance tax allocation 
report and the payment of tax may be made by a person 
authorized by the insured to act as its agent. 
SEC. 10102. REGULATION OF NONADMITTED INSURANCE BY 
INSURED’S HOME STATE. 
(a) HOME STATE AUTHORITY.—Except as otherwise 
provided in this section, the placement of nonadmitted in-
surance shall be subject to the statutory and regulatory 
requirements solely of the insured’s home State. 
(b) BROKER LICENSING.—No State other than an in-
sured’s home State may require a surplus lines broker to 
be licensed in order to sell, solicit, or negotiate non-
admitted insurance with respect to such insured. 
(c) ENFORCEMENT PROVISION.—With respect to sec-
tion 10101 and subsections (a) and (b) of this section, 
any law, regulation, provision, or action of any State that 
applies or purports to apply to nonadmitted insurance sold
1687 
to, solicited by, or negotiated with an insured whose home 
State is another State shall be preempted with respect to 
such application. 
(d) WORKERS’ COMPENSATION EXCEPTION.—This 
section may not be construed to preempt any State law, 
rule, or regulation that restricts the placement of workers’ 
compensation insurance or excess insurance for self-fund-
ed workers’ compensation plans with a nonadmitted in-
surer. 
SEC. 10103. PARTICIPATION IN NATIONAL PRODUCER 
DATABASE. 
After the expiration of the 2-year period beginning 
on the date of the enactment of this Act, a State may 
not collect any fees relating to licensing of an individual 
or entity as a surplus lines broker in the State unless the 
State has in effect at such time laws or regulations that 
provide for participation by the State in the national in-
surance producer database of the NAIC, or any other 
equivalent uniform national database, for the licensure of 
surplus lines brokers and the renewal of such licenses. 
SEC. 10104. UNIFORM STANDARDS FOR SURPLUS LINES 
ELIGIBILITY. 
A State may not— 
(1) impose eligibility requirements on, or other-
wise establish eligibility criteria for, nonadmitted in-
1688 
surers domiciled in a United States jurisdiction, ex-
cept in conformance with such requirements and cri-
teria in sections 5A(2) and 5C(2)(a) of the Non-Ad-
mitted Insurance Model Act, unless the State has 
adopted nationwide uniform requirements, forms, 
and procedures developed in accordance with section 
10101(b) of this title that include alternative nation-
wide uniform eligibility requirements; and 
(2) prohibit a surplus lines broker from placing 
nonadmitted insurance with, or procuring non-
admitted insurance from, a nonadmitted insurer 
domiciled outside the United States that is listed on 
the Quarterly Listing of Alien Insurers maintained 
by the International Insurers Department of the 
NAIC. 
SEC. 10105. STREAMLINED APPLICATION FOR COMMER-
CIAL PURCHASERS. 
A surplus lines broker seeking to procure or place 
nonadmitted insurance in a State for an exempt commer-
cial purchaser shall not be required to satisfy any State 
requirement to make a due diligence search to determine 
whether the full amount or type of insurance sought by 
such exempt commercial purchaser can be obtained from 
admitted insurers if—
1689 
(1) the broker procuring or placing the surplus 
lines insurance has disclosed to the exempt commer-
cial purchaser that such insurance may or may not 
be available from the admitted market that may pro-
vide greater protection with more regulatory over-
sight; and 
(2) the exempt commercial purchaser has sub-
sequently requested in writing the broker to procure 
or place such insurance from a nonadmitted insurer. 
SEC. 10106. GAO STUDY OF NONADMITTED INSURANCE 
MARKET. 
(a) IN GENERAL.—The Comptroller General of the 
United States shall conduct a study of the nonadmitted 
insurance market to determine the effect of the enactment 
of this subtitle on the size and market share of the non-
admitted insurance market for providing coverage typi-
cally provided by the admitted insurance market. 
(b) CONTENTS.—The study shall determine and ana-
lyze— 
(1) the change in the size and market share of 
the nonadmitted insurance market and in the num-
ber of insurance companies and insurance holding 
companies providing such business in the 18-month 
period that begins upon the effective date of this 
Act;
1690 
(2) the extent to which insurance coverage typi-
cally provided by the admitted insurance market has 
shifted to the nonadmitted insurance market; 
(3) the consequences of any change in the size 
and market share of the nonadmitted insurance 
market, including differences in the price and avail-
ability of coverage available in both the admitted 
and nonadmitted insurance markets; 
(4) the extent to which insurance companies 
and insurance holding companies that provide both 
admitted and nonadmitted insurance have experi-
enced shifts in the volume of business between ad-
mitted and nonadmitted insurance; and 
(5) the extent to which there has been a change 
in the number of individuals who have nonadmitted 
insurance policies, the type of coverage provided 
under such policies, and whether such coverage is 
available in the admitted insurance market. 
(c) CONSULTATION WITH NAIC.—In conducting the 
study under this section, the Comptroller General shall 
consult with the NAIC. 
(d) REPORT.—The Comptroller General shall com-
plete the study under this section and submit a report to 
the Committee on Financial Services of the House of Rep-
resentatives and the Committee on Banking, Housing, and
1691 
Urban Affairs of the Senate regarding the findings of the 
study not later than 30 months after the effective date 
of this Act. 
SEC. 10107. DEFINITIONS. 
For purposes of this subtitle, the following definitions 
shall apply: 
(1) ADMITTED INSURER.—The term ‘‘admitted 
insurer’’ means, with respect to a State, an insurer 
licensed to engage in the business of insurance in 
such State. 
(2) AFFILIATE.—The term ‘‘affiliate’’ means, 
with respect to an insured, any entity that controls, 
is controlled by, or is under common control with the 
insured. 
(3) AFFILIATED GROUP.—The term ‘‘affiliated 
group’’ means any group of entities that are all af-
filiated. 
(4) CONTROL.—An entity has ‘‘control’’ over 
another entity if— 
(A) the entity directly or indirectly or act-
ing through one or more other persons owns, 
controls or has the power to vote 25 percent or 
more of any class of voting securities of the 
other entity; or
1692 
(B) the entity controls in any manner the 
election of a majority of the directors or trust-
ees of the other entity. 
(5) EXEMPT
COMMERCIAL
PURCHASER.—The 
term ‘‘exempt commercial purchaser’’ means any 
person purchasing commercial insurance that, at the 
time of placement, meets the following requirements: 
(A) The person employs or retains a quali-
fied risk manager to negotiate insurance cov-
erage. 
(B) The person has paid aggregate nation-
wide commercial property and casualty insur-
ance premiums in excess of $100,000 in the im-
mediately preceding 12 months. 
(C)(i) The person meets at least one of the 
following criteria: 
(I) The person possesses a net 
worth in excess of $20,000,000, as 
such amount is adjusted pursuant to 
clause (ii). 
(II) The person generates annual 
revenues in excess of $50,000,000, as 
such amount is adjusted pursuant to 
clause (ii).
1693 
(III) The person employs more 
than 500 full time or full time equiva-
lent employees per individual insured 
or is a member of an affiliated group 
employing more than 1,000 employees 
in the aggregate. 
(IV) The person is a not-for-prof-
it organization or public entity gener-
ating annual budgeted expenditures of 
at least $30,000,000, as such amount 
is adjusted pursuant to clause (ii). 
(V) The person is a municipality 
with a population in excess of 50,000 
persons. 
(ii) Effective on the fifth January 1 
occurring after the date of the enactment 
of this Act and each fifth January 1 occur-
ring thereafter, the amounts in subclauses 
(I), (II), and (IV) of clause (i) shall be ad-
justed to reflect the percentage change for 
such 5-year period in the Consumer Price 
Index for All Urban Consumers published 
by the Bureau of Labor Statistics of the 
Department of Labor. 
(6) HOME STATE.—
1694 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘‘home State’’ 
means, with respect to an insured— 
(i) the State in which an insured 
maintains its principal place of business or, 
in the case of an individual, the individ-
ual’s principal residence; or 
(ii) if 100 percent of the insured risk 
is located out of the State referred to in 
subparagraph (A), the State to which the 
greatest percentage of the insured’s tax-
able premium for that insurance contract 
is allocated. 
(B) AFFILIATED GROUPS.—If more than 
one insured from an affiliated group are named 
insureds on a single nonadmitted insurance con-
tract, the term ‘‘home State’’ means the home 
State, as determined pursuant to subparagraph 
(A), of the member of the affiliated group that 
has the largest percentage of premium attrib-
uted to it under such insurance contract. 
(7) INDEPENDENTLY PROCURED INSURANCE.— 
The term ‘‘independently procured insurance’’ 
means insurance procured directly by an insured 
from a nonadmitted insurer.
1695 
(8) NAIC.—The term ‘‘NAIC’’ means the Na-
tional Association of Insurance Commissioners or 
any successor entity. 
(9) NONADMITTED
INSURANCE.—The term 
‘‘nonadmitted insurance’’ means any property and 
casualty insurance permitted to be placed directly or 
through a surplus lines broker with a nonadmitted 
insurer eligible to accept such insurance. 
(10) 
NON-ADMITTED
INSURANCE
MODEL 
ACT.—The term ‘‘Non-Admitted Insurance Model 
Act’’ means the provisions of the Non-Admitted In-
surance Model Act, as adopted by the NAIC on Au-
gust 3, 1994, and amended on September 30, 1996, 
December 6, 1997, October 2, 1999, and June 8, 
2002. 
(11) 
NONADMITTED
INSURER.—The 
term 
‘‘nonadmitted insurer’’ means, with respect to a 
State, an insurer not licensed to engage in the busi-
ness of insurance in such State. 
(12) QUALIFIED
RISK
MANAGER.—The term 
‘‘qualified risk manager’’ means, with respect to a 
policyholder of commercial insurance, a person who 
meets all of the following requirements:
1696 
(A) The person is an employee of, or third 
party consultant retained by, the commercial 
policyholder. 
(B) The person provides skilled services in 
loss prevention, loss reduction, or risk and in-
surance coverage analysis, and purchase of in-
surance. 
(C) The person— 
(i)(I) has a bachelor’s degree or high-
er from an accredited college or university 
in risk management, business administra-
tion, finance, economics, or any other field 
determined by a State insurance commis-
sioner or other State regulatory official or 
entity to demonstrate minimum com-
petence in risk management; and 
(II)(aa) has three years of experi-
ence in risk financing, claims adminis-
tration, loss prevention, risk and in-
surance analysis, or purchasing com-
mercial lines of insurance; or 
(bb) has one of the following 
designations: 
(AA) a designation as a 
Chartered 
Property 
and
1697 
Casualty 
Underwriter 
(in 
this subparagraph referred 
to as ‘‘CPCU’’) issued by 
the American Institute for 
CPCU/Insurance Institute of 
America; 
(BB) a designation as 
an Associate in Risk Man-
agement (ARM) issued by 
the American Institute for 
CPCU/Insurance Institute of 
America; 
(CC) a designation as 
Certified 
Risk 
Manager 
(CRM) issued by the Na-
tional Alliance for Insurance 
Education & Research; 
(DD) a designation as 
a RIMS Fellow (RF) issued 
by the Global Risk Manage-
ment Institute; or 
(EE) any other des-
ignation, certification, or li-
cense determined by a State 
insurance commissioner or
1698 
other State insurance regu-
latory official or entity to 
demonstrate minimum com-
petency in risk management; 
(ii)(I) has at least seven years of ex-
perience in risk financing, claims adminis-
tration, loss prevention, risk and insurance 
coverage analysis, or purchasing commer-
cial lines of insurance; and 
(II) has any one of the designa-
tions specified in subitems (AA) 
through (EE) of clause (i)(II)(bb); 
(iii) has at least 10 years of experi-
ence in risk financing, claims administra-
tion, loss prevention, risk and insurance 
coverage analysis, or purchasing commer-
cial lines of insurance; or 
(iv) has a graduate degree from an 
accredited college or university in risk 
management, business administration, fi-
nance, economics, or any other field deter-
mined by a State insurance commissioner 
or other State regulatory official or entity 
to demonstrate minimum competence in 
risk management.
1699 
(13) PREMIUM TAX.—The term ‘‘premium tax’’ 
means, with respect to surplus lines or independently 
procured insurance coverage, any tax, fee, assess-
ment, or other charge imposed by a government en-
tity directly or indirectly based on any payment 
made as consideration for an insurance contract for 
such insurance, including premium deposits, assess-
ments, registration fees, and any other compensation 
given in consideration for a contract of insurance. 
(14) SURPLUS LINES BROKER.—The term ‘‘sur-
plus lines broker’’ means an individual, firm, or cor-
poration which is licensed in a State to sell, solicit, 
or negotiate insurance on properties, risks, or expo-
sures located or to be performed in a State with 
nonadmitted insurers. 
(15) STATE.—The term ‘‘State’’ includes any 
State of the United States, the District of Columbia, 
the Commonwealth of Puerto Rico, Guam, the 
Northern Mariana Islands, the Virgin Islands, and 
American Samoa. 
Subtitle B—Reinsurance 
SEC. 10201. REGULATION OF CREDIT FOR REINSURANCE 
AND REINSURANCE AGREEMENTS. 
(a) CREDIT
FOR REINSURANCE.—If the State of 
domicile of a ceding insurer is an NAIC-accredited State,
1700 
or has financial solvency requirements substantially simi-
lar to the requirements necessary for NAIC accreditation, 
and recognizes credit for reinsurance for the insurer’s 
ceded risk, then no other State may deny such credit for 
reinsurance. 
(b) 
ADDITIONAL
PREEMPTION
OF 
EXTRATERRITORIAL APPLICATION OF STATE LAW.—In 
addition to the application of subsection (a), all laws, regu-
lations, provisions, or other actions of a State that is not 
the domiciliary State of the ceding insurer, except those 
with respect to taxes and assessments on insurance com-
panies or insurance income, are preempted to the extent 
that they— 
(1) restrict or eliminate the rights of the ceding 
insurer or the assuming insurer to resolve disputes 
pursuant to contractual arbitration to the extent 
such contractual provision is not inconsistent with 
the provisions of title 9, United States Code; 
(2) require that a certain State’s law shall gov-
ern the reinsurance contract, disputes arising from 
the reinsurance contract, or requirements of the re-
insurance contract; 
(3) attempt to enforce a reinsurance contract 
on terms different than those set forth in the rein-
1701 
surance contract, to the extent that the terms are 
not inconsistent with this subtitle; or 
(4) otherwise apply the laws of the State to re-
insurance agreements of ceding insurers not domi-
ciled in that State. 
SEC. 10202. REGULATION OF REINSURER SOLVENCY. 
(a) DOMICILIARY STATE REGULATION.—If the State 
of domicile of a reinsurer is an NAIC-accredited State or 
has financial solvency requirements substantially similar 
to the requirements necessary for NAIC accreditation, 
such State shall be solely responsible for regulating the 
financial solvency of the reinsurer. 
(b) NONDOMICILIARY STATES.— 
(1) LIMITATION ON FINANCIAL INFORMATION 
REQUIREMENTS.—If the State of domicile of a rein-
surer is an NAIC-accredited State or has financial 
solvency requirements substantially similar to the re-
quirements necessary for NAIC accreditation, no 
other State may require the reinsurer to provide any 
additional financial information other than the infor-
mation the reinsurer is required to file with its 
domiciliary State. 
(2) RECEIPT OF INFORMATION.—No provision 
of this section shall be construed as preventing or 
prohibiting a State that is not the State of domicile
1702 
of a reinsurer from receiving a copy of any financial 
statement filed with its domiciliary State. 
SEC. 10203. DEFINITIONS. 
For purposes of this subtitle, the following definitions 
shall apply: 
(1) CEDING INSURER.—The term ‘‘ceding in-
surer’’ means an insurer that purchases reinsurance. 
(2) DOMICILIARY STATE.—The terms ‘‘State of 
domicile’’ and ‘‘domiciliary State’’ means, with re-
spect to an insurer or reinsurer, the State in which 
the insurer or reinsurer is incorporated or entered 
through, and licensed. 
(3) REINSURANCE.—The term ‘‘reinsurance’’ 
means the assumption by an insurer of all or part 
of a risk undertaken originally by another insurer. 
(4) REINSURER.— 
(A) IN GENERAL.—The term ‘‘reinsurer’’ 
means an insurer to the extent that the in-
surer— 
(i) is principally engaged in the busi-
ness of reinsurance; 
(ii) does not conduct significant 
amounts of direct insurance as a percent-
age of its net premiums; and
1703 
(iii) is not engaged in an ongoing 
basis in the business of soliciting direct in-
surance. 
(B) DETERMINATION.—A determination of 
whether an insurer is a reinsurer shall be made 
under the laws of the State of domicile in ac-
cordance with this paragraph. 
(5) STATE.—The term ‘‘State’’ includes any 
State of the United States, the District of Columbia, 
the Commonwealth of Puerto Rico, Guam, the 
Northern Mariana Islands, the Virgin Islands, and 
American Samoa. 
Subtitle C—Rule of Construction 
SEC. 10301. RULE OF CONSTRUCTION. 
Nothing in this title or amendments to this title shall 
be construed to modify, impair, or supersede the applica-
tion of the antitrust laws. Any implied or actual conflict 
between this title and any amendments to this title and 
the antitrust laws shall be resolved in favor of the oper-
ation of the antitrust laws. 
SEC. 10302. SEVERABILITY. 
If any section or subsection of this title, or any appli-
cation of such provision to any person or circumstance, 
is held to be unconstitutional, the remainder of this title,
1704 
and the application of the provision to any other person 
or circumstance, shall not be affected. 
TITLE 
X—INTEREST-BEARING 
TRANSACTION ACCOUNTS AU-
THORIZED 
SEC. 11001. INTEREST-BEARING TRANSACTION ACCOUNTS 
AUTHORIZED. 
(a) REPEAL OF PROHIBITION ON PAYMENT OF IN-
TEREST ON DEMAND DEPOSITS.— 
(1) FEDERAL RESERVE ACT.—Section 19(i) of 
the Federal Reserve Act (12 U.S.C. 371a) is amend-
ed to read as follows: 
‘‘(i) [Repealed]’’. 
(2) HOME OWNERS’ LOAN ACT.—The first sen-
tence of section 5(b)(1)(B) of the Home Owners’ 
Loan Act (12 U.S.C. 1464(b)(1)(B)) is amended by 
striking ‘‘savings association may not—’’ and all 
that follows through ‘‘(ii) permit any’’ and inserting 
‘‘savings association may not permit any’’. 
(3) FEDERAL DEPOSIT INSURANCE ACT.—Sec-
tion 18(g) of the Federal Deposit Insurance Act (12 
U.S.C. 1828(g)) is amended to read as follows: 
‘‘(g) [Repealed]’’.
1705 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect at the end of the 1-year 
period beginning on the date of the enactment of this Act. 
Passed the House of Representatives December 11, 
2009. 
Attest: 
Clerk.
111TH CONGRESS 
1ST SESSION 
H. R. 4173 
AN ACT 
To provide for financial regulatory reform, to pro-
tect consumers and investors, to enhance Federal 
understanding of insurance issues, to regulate 
the over-the-counter derivatives markets, and for 
other purposes.