(b) APPLICABLE
STATE
LAWS.—Notwithstanding 
subsection (a), national insurers, national agencies, and 
federally licensed insurance producers shall be subject 
to— 
(1) applicable State unclaimed property and es-
cheat laws; 
(2) applicable tax laws of a State, in accordance 
with sections 1251, 1252, and 1253; 
(3) applicable State law relating to participa-
tion in an assigned risk plan, mandatory joint un-
derwriting association, or any other mandatory re-
sidual market mechanism designed to make insur-
ance available to those unable to obtain insurance in 
the voluntary market, except to the extent that such 
State law— 
(A) relates to participation in any vol-
untary joint underwriting association or similar 
arrangement; 
(B) results in rates in effect for an as-
signed risk plan, mandatory joint underwriting 
association, or any other mandatory residual 
market mechanism that fail to cover the ex-
pected value of all future costs associated with 
insurance policies written by such residual mar-
ket mechanism; 
VerDate Aug 31 2005 
00:23 Jul 28, 2007
Jkt 059200
PO 00000
Frm 00058
Fmt 6652
Sfmt 6201
E:\BILLS\H3200.IH
H3200
bajohnson on PROD1PC69 with BILLS
(C) requires a national insurer to use any 
particular rate, rating element, price, or form; 
or 
(D) is inconsistent with any provision of 
this Act; 
(4) applicable State insurance law that pre-
scribes the compulsory coverage requirements for 
workers’ compensation or motor vehicle insurance, 
or both, that every insurer must provide if the in-
surer issues insurance policies in such State, except 
to the extent that such State law requires a national 
insurer to use any particular rate, rating element, 
price, or form; 
(5) applicable State insurance law mandating 
the participation of insurers in an advisory or statis-
tical organization, except to the extent that such 
State law requires a national insurer to use any par-
ticular rate, rating element, price, or form; and 
(6) applicable State law relating to participa-
tion in a workers’ compensation administration 
mechanism, except to the extent that such State law 
is inconsistent with any provision of this Act. 
(c) TERMS.—For purposes of this section, the term— 
VerDate Aug 31 2005 
00:23 Jul 28, 2007
Jkt 059200
PO 00000
Frm 00059
Fmt 6652
Sfmt 6201
E:\BILLS\H3200.IH
H3200
bajohnson on PROD1PC69 with BILLS
(1) ‘‘advisory or statistical organization’’ does 
not include the National Association of Insurance 
Commissioners; 
(2) ‘‘compulsory coverage’’ does not include any 
State statutory requirement other than those pre-
scribing the minimum extent of insurance protection 
afforded by a policy of insurance; and 
(3) ‘‘mandatory residual market’’ means a facil-
ity, entity, or plan required by and established pur-
suant to State law to provide coverage for persons 
that cannot obtain insurance in the private market. 
SEC. 1126. PRESERVATION OF OFFICE RECORDS. 
(a) IN GENERAL.—The Commissioner may cause any 
and all records, papers, or documents kept by the Office 
or in the possession or custody of the Office to be— 
(1) photographed or microphotographed or oth-
erwise reproduced upon film; or 
(2) preserved in any electronic medium or for-
mat which is capable of— 
(A) being read or scanned by computer; 
and 
(B) being reproduced from such electronic 
medium or format by printing any other form 
or reproduction of electronically stored data. 
VerDate Aug 31 2005 
00:23 Jul 28, 2007
Jkt 059200
PO 00000
Frm 00060
Fmt 6652
Sfmt 6201
E:\BILLS\H3200.IH
H3200
bajohnson on PROD1PC69 with BILLS
(b) TREATMENT AS ORIGINAL RECORDS.—Any pho-
tographs, microphotographs, or photographic film or cop-
ies thereof described in subsection (a)(1) or reproduction 
or electronically stored data described in subsection (a)(2) 
shall be deemed to be an original record for all purposes, 
including introduction in evidence in all State and Federal 
courts or administrative agencies, and shall be admissible 
to prove any act, transaction, occurrence, or event therein 
recorded. 
(c) AUTHORITY OF THE COMMISSIONER.—Any pho-
tographs, microphotographs, or photographic film or cop-
ies thereof described in subsection (a)(1) or reproduction 
of electronically stored data described in subsection (a)(2) 
shall be preserved in such manner as the Commissioner 
shall prescribe, and the original records, papers, or docu-
ments may be destroyed or otherwise disposed of, as the 
Commissioner may direct. 
SEC. 1127. COMPLIANCE WITH ANTI-MONEY LAUNDERING 
REQUIREMENTS. 
(a) COMPLIANCE REQUIRED.—The Commissioner 
shall prescribe regulations requiring national life insurers 
to establish and maintain procedures reasonably designed 
to assure and monitor compliance with the requirements 
of subchapter II of chapter 53 of title 31, United States 
Code, to the extent applicable. 
VerDate Aug 31 2005 
00:23 Jul 28, 2007
Jkt 059200
PO 00000
Frm 00061
Fmt 6652
Sfmt 6201
E:\BILLS\H3200.IH
H3200
bajohnson on PROD1PC69 with BILLS
(b) EXAMINATIONS.—Each examination of a national 
life insurer shall include a review of the procedures re-
quired to be established and maintained under subsection 
(a). 
(c) ORDER.—The Commissioner shall issue an order, 
in the manner prescribed in subsection (c) or (d) of section 
1142, requiring such insurer to cease and desist from a 
violation of this section or regulations prescribed under 
this section, if the Commissioner determines that a na-
tional life insurer— 
(1) has failed to establish and maintain the pro-
cedures described in subsection (a); or 
(2) has failed to correct any problem with the 
procedures maintained by such national life insurer 
which was previously reported to such insurer by the 
Commissioner. 
Subtitle C—Enforcement of 
Federal Insurance Laws 
SEC. 1141. NATIONAL INSURER LICENSE SUSPENSION, RE-
STRICTION, OR REVOCATION. 
(a) IN GENERAL.—In accordance with the conditions 
under this section, the Commissioner may revoke or re-
strict the Federal license of a national insurer if the Com-
missioner determines that the national insurer— 
VerDate Aug 31 2005 
00:23 Jul 28, 2007
Jkt 059200
PO 00000
Frm 00062
Fmt 6652
Sfmt 6201
E:\BILLS\H3200.IH
H3200
bajohnson on PROD1PC69 with BILLS
(1) has engaged in conduct that is hazardous to 
the national insurer and that involves an undue risk 
to the policyholders of the national insurer, as a 
whole; 
(2) is in a financial or other condition that is 
not consistent with the continuation of existing oper-
ations; or 
(3) has violated any— 
(A) applicable law or regulation; 
(B) order or condition imposed in writing 
by the Commissioner in connection with the ap-
proval of an application, filing, statement, no-
tice, or other request by the national insurer; or 
(C) written agreement entered into be-
tween the national insurer and the Commis-
sioner. 
(b) NOTICE TO NATIONAL INSURER.— 
(1) IN GENERAL.—If the Commissioner deter-
mines under subsection (a) that the Federal license 
of a national insurer should be revoked or restricted, 
the Commissioner shall— 
(A) serve the national insurer with written 
notice of the intent of the Commissioner to re-
voke or restrict such Federal license; 
VerDate Aug 31 2005 
00:23 Jul 28, 2007
Jkt 059200
PO 00000
Frm 00063
Fmt 6652
Sfmt 6201
E:\BILLS\H3200.IH
H3200
bajohnson on PROD1PC69 with BILLS
(B) provide the national insurer with a 
statement of the basis for the determination to 
revoke or restrict such Federal license; and 
(C) notify, not less than 30 days before a 
hearing under subsection (c), the date and place 
of the hearing. 
(2) NOTICE OF SERVICE.—Any service required 
or authorized to be made by the Commissioner 
under this section may be made by registered mail, 
or in such other manner reasonably calculated to 
give actual notice as the Commissioner may by regu-
lation or otherwise provide. 
(c) REVOCATION OR RESTRICTION HEARING.— 
(1) IN GENERAL.—Before revoking or restrict-
ing a Federal license, the Commissioner shall con-
duct a hearing in accordance with section 554 of 
title 5, United States Code, to determine if the con-
ditions described in subsection (a) exist. 
(2) AUTHORITY TO REVOKE OR RESTRICT FED-
ERAL LICENSE.—If, on the basis of the evidence pre-
sented at the hearing under paragraph (1) and the 
written findings of the Commissioner with respect to 
such evidence, the Commissioner establishes the ex-
istence of any conduct, condition, or violation speci-
fied in the notice sent to a national insurer under 
VerDate Aug 31 2005 
00:23 Jul 28, 2007
Jkt 059200
PO 00000
Frm 00064
Fmt 6652
Sfmt 6201
E:\BILLS\H3200.IH
H3200
bajohnson on PROD1PC69 with BILLS
subsection (b), the Commissioner may issue an order 
revoking or restricting the Federal license of the na-
tional insurer, which shall be effective as of a date 
subsequent to such finding. 
(3) CONSENT
TO
REVOCATION
OR
RESTRIC-
TION.—If a duly authorized representative of the na-
tional insurer fails to appear at the hearing under 
this subsection, the national insurer shall be deemed 
to have consented to the revocation or restriction of 
its Federal license, and the Commissioner may im-
mediately revoke or restrict such Federal license. 
(d) NOTICE OF REVOCATION OR RESTRICTION RE-
QUIRED.— 
(1) NOTICE BY NATIONAL INSURER.— 
(A) IN
GENERAL.—The national insurer 
shall give notice of a revocation or restriction of 
its Federal license under this section to each 
policyholder affected by the revocation or re-
striction. 
(B) TYPE OF NOTICE.—Notice under this 
paragraph shall be sent to the last address of 
record of the policyholder on the books of the 
national insurer, in such manner and at such 
time as the Commissioner determines to be nec-
essary for the protection of policyholders. 
VerDate Aug 31 2005 
00:23 Jul 28, 2007
Jkt 059200
PO 00000
Frm 00065
Fmt 6652
Sfmt 6201
E:\BILLS\H3200.IH
H3200
bajohnson on PROD1PC69 with BILLS
(2) NOTICE BY COMMISSIONER.— 
(A) IN
GENERAL.—The Commissioner 
shall publish notice of a revocation or restric-
tion under this section. If the Commissioner de-
termines that a national insurer has not given 
notice of an order under this subsection in ac-
cordance with the requirements of the Commis-
sioner, the Commissioner may provide such no-
tice in such manner as the Commissioner may 
find to be necessary and proper. 
(B) COSTS.—The cost of any notice pro-
vided under subparagraph (A) shall be paid by 
the national insurer. 
(e) TEMPORARY SUSPENSION OR RESTRICTION.— 
(1) IN GENERAL.—If the Commissioner, in the 
course of a revocation proceeding under this section, 
finds that the national insurer poses an immediate 
threat to the interests of its policyholders as a whole 
or to the public, the Commissioner may issue an 
order temporarily suspending or restricting the Fed-
eral license of the national insurer. 
(2) NOTICE
OF
TEMPORARY
ORDER.—A na-
tional insurer whose Federal license is temporarily 
suspended or restricted under this subsection shall 
give notice of an order issued under this paragraph 
VerDate Aug 31 2005 
00:23 Jul 28, 2007
Jkt 059200
PO 00000
Frm 00066
Fmt 6652
Sfmt 6201
E:\BILLS\H3200.IH
H3200
bajohnson on PROD1PC69 with BILLS