rectly dependent upon the amount of insurance 
policies written or sold and— 
(i) the officer, director, or employee’s 
activities are executive, administrative, 
managerial, clerical or a combination of 
these, and are only indirectly related to the 
sale, solicitation or negotiation of insur-
ance; 
(ii) the officer, director, or employee’s 
function relates to underwriting, loss con-
trol, inspection or the processing, adjust-
ing, investigating, or settling of a claim on 
a policy of insurance; or 
(iii) the officer, director, or employee 
is acting in the capacity of a special agent 
or agency supervisor assisting insurance 
producers where the person’s activities are 
limited to providing technical advice and 
assistance to federally licensed insurance 
producers and do not include the sale, so-
licitation or negotiation of insurance. 
(C) A person who secures and furnishes in-
formation for the purpose of group insurance 
policies; or for the purpose of enrolling individ-
uals under plans, or issuing certificates under 
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plans or otherwise assisting in administering 
plans, where no commission or other compensa-
tion directly dependent upon the amount of in-
surance policies written or sold is paid to the 
person for the service. 
(D) An employer or association or its offi-
cers, directors, employees, or the trustees of an 
employee trust plan, to the extent that the em-
ployer, officer, employee, director or trustee is 
engaged in the administration or operation of a 
program of employee benefits for the employer’s 
or association’s own employees or the employees 
of its subsidiaries or affiliates, which program 
involves the use of insurance written by the Na-
tional Insurer, as long as the employers, asso-
ciations, officers, directors, employees or trust-
ees are not in any manner compensated, di-
rectly or indirectly, by the National Insurer. 
(E) An employee of a National Insurer or 
an organization employed by a National Insurer 
that is engaging in the inspection, rating or 
classification of risks, or in the supervision of 
the training of insurance producers and that is 
not individually engaged in the sale, solicitation, 
or negotiation of insurance. 
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(F) A person whose activities are limited 
to advertising without the intent to solicit in-
surance through communications in printed 
publications or other forms of electronic mass 
media, provided that the person does not sell, 
solicit, or negotiate insurance. 
(G) A salaried full-time employee who 
counsels or advises his or her employer relative 
to the insurance interests of the employer or of 
the subsidiaries or business affiliates of the em-
ployer provided that the employee does not sell 
or solicit insurance or receive a commission or 
other compensation directly dependent upon the 
amount of insurance policies written or sold. 
(H) A person that sells, solicits, or nego-
tiates a funding agreement. 
(I) Any other kind of person identified by 
the Commissioner, by regulation, as not being 
an insurance producer within the meaning of 
this definition. 
(16) INSURANCE SECURITIZATION.—The term 
‘‘insurance securitization’’ means the issuance of 
debt instruments by a National Insurer, the pro-
ceeds from which support the exposures attributed 
to a protected cell, where repayment of principal or 
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interest, or both, to investors under the transaction 
terms is contingent upon the occurrence or non-
occurrence of an event with respect to which the Na-
tional Insurer is exposed to loss under insurance 
policies or reinsurance contracts it has written. 
(17) INSURER-AFFILIATED PARTY.—The term 
‘‘insurer-affiliated party’’ means— 
(A) any director, officer, employee, or con-
trolling shareholder (other than a holding com-
pany) of, or agent for, a National Insurer or a 
National Agency; 
(B) any other person who has filed or is 
required to file a statement with the Commis-
sioner under section 231; 
(C) any shareholder (other than a holding 
company), consultant, joint venture partner, 
and any other person as determined by the 
Commissioner (by regulation or case-by-case) 
who participates in the conduct of the affairs of 
a National Insurer or a National Agency; and 
(D) any independent contractor (including 
any attorney, actuary, or accountant) of a Na-
tional Insurer or a National Agency who in that 
capacity knowingly or recklessly participates in 
any violation of any law or regulation, any 
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breach of fiduciary duty, or any conduct that 
involves an undue risk of loss to a National In-
surer’s policyholders as a whole, and which vio-
lation, breach or conduct caused or is likely to 
cause more than a minimal financial loss to, or 
a significant adverse effect on, a National In-
surer or the policyholders of a National Insurer. 
(18) INSURER
IN
FRATERNAL
FORM.—The 
term ‘‘insurer in fraternal form’’ means an incor-
porated society, order or supreme lodge, without 
capital stock (generally known as a fraternal benefit 
society), that— 
(A) is conducted solely for the benefit of 
its members and their beneficiaries and not for 
profit; 
(B) is operated on a lodge system with rit-
ualistic form of work; 
(C) has a representative form of govern-
ment; 
(D) provides benefits to members and their 
dependents; and 
(E) operates for 1 or more social, intellec-
tual, educational, charitable, benevolent, moral, 
fraternal, patriotic, or religious purposes for the 
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benefit of its members, which may also be ex-
tended to others. 
(19) NAIC.—The term ‘‘NAIC’’ means the Na-
tional Association of Insurance Commissioners. 
(20) NATIONAL AGENCY.—The term ‘‘National 
Agency’’ means a National Insurance Agency char-
tered under section 201. 
(21) NATIONAL INSURER.—The term ‘‘National 
Insurer’’ means a National Insurance Company 
chartered under section 201. 
(22) NATIONAL
LIFE
INSURER.—The term 
‘‘National Life Insurer’’ means a National Insurer 
that holds a Federal license to sell, solicit, negotiate, 
and underwrite 1 or both of life insurance and annu-
ities, provided that a National Life Insurer may also 
sell, solicit, negotiate, and underwrite disability in-
come insurance, long-term care insurance, and fund-
ing agreements. 
(23) 
NATIONAL
PROPERTY/CASUALTY
IN-
SURER.—The term ‘‘National Property/Casualty In-
surer’’ means a National Insurer that holds a Fed-
eral license to sell, solicit, negotiate, and underwrite 
any combination of lines of property/casualty insur-
ance. 
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(24) NEGOTIATE.—The term ‘‘negotiate’’, in 
the context of negotiating insurance, means the act 
of conferring directly with or offering advice directly 
to a purchaser or prospective purchaser of a par-
ticular policy of insurance concerning any of the 
substantive benefits, terms, or conditions of the con-
tract, provided that the person engaged in that act 
either sells insurance to or obtains insurance cov-
erage for purchasers. 
(25) NON-UNITED STATES INSURER.—The term 
‘‘non-United States Insurer’’ means a business enti-
ty that is chartered or licensed by a foreign country 
to sell, solicit, negotiate, and underwrite insurance. 
(26) OFFICE.—The term ‘‘Office’’ means the 
Office of National Insurance. 
(27) PERSON.—The term ‘‘person’’ means any 
natural person, business entity, governmental body 
or entity, voluntary organization, or similar organi-
zation. 
(28) POLICY OF INSURANCE; INSURANCE POL-
ICY.—The term ‘‘policy of insurance’’ or ‘‘insurance 
policy’’ means a policy, contract, certificate, or other 
evidence of insurance. ‘‘Policy of insurance’’ includes 
an annuity contract and a funding agreement. 
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(29) POLICYHOLDER.—The term ‘‘policyholder’’ 
of an insurance policy means the person who is iden-
tified as the legal owner under the terms of the in-
surance policy or who is otherwise vested with legal 
title to the insurance policy. An assignment, absolute 
on its face, completed in accordance with the terms 
of the insurance policy and properly recording the 
assignee as the policyholder on the books of the in-
surer vests legal title in the name of the assignee. 
The term ‘‘policyholder’’ does not include a person 
with a mere beneficial interest in an insurance policy 
or a person to whom an insurance policy is assigned 
for collateral security purposes. 
(30) PROPERTY/CASUALTY
INSURANCE.—The 
term ‘‘property/casualty insurance’’— 
(A) means a product that insures, guaran-
tees, or indemnifies against liability, loss of life, 
loss of health, or loss through damage to or de-
struction of property, including surety bonds, 
private passenger or commercial automobile, 
homeowners, 
mortgage 
guaranty, 
financial 
guaranty, commercial multiperil, general liabil-
ity, professional liability, workers’ compensa-
tion, fire and allied lines, farm or ranch owners 
multiperil, aircraft, fidelity, surety, medical 
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malpractice, ocean marine, inland marine, and 
boiler and machinery insurance; and 
(B) does not include life insurance, dis-
ability income insurance, long-term care insur-
ance, health insurance, annuities, a funding 
agreement, or title insurance. 
(31) PROTECTED CELL.—The term ‘‘protected 
cell’’ means an identified pool of assets and liabil-
ities of a National Insurer segregated and insulated 
from the remainder of the National Insurer’s assets 
and liabilities. The remainder of the National Insur-
er’s assets and liabilities includes general account 
assets and liabilities, separate account assets and li-
abilities, and assets and liabilities of other protected 
cells. 
(32) PROTECTED CELL ACCOUNT.—The term 
‘‘protected cell account’’ means a specifically identi-
fied bank or custodial account established by a Na-
tional Insurer for the purpose of segregating the 
protected cell assets of 1 protected cell from the pro-
tected cell assets of other protected cells and from 
the assets of the National Insurer’s general account 
and separate accounts. 
(33) SELL.—The term ‘‘sell’’, in the context of 
selling a policy of insurance, includes exchanging a 
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policy of insurance by any means, for money or any 
other valuable consideration, on behalf of an insurer. 
(34) SEPARATE ACCOUNT.—The term ‘‘separate 
account’’ means an account established and main-
tained by a National Life Insurer under which in-
come, gains, and losses, whether or not realized, 
from assets allocated to such account, are, in accord-
ance with the applicable contract, credited to or 
charged against such account without regard to 
other income, gains, or losses of the National Life 
Insurer. 
(35) SOLICIT.—The term ‘‘solicit’’, in the con-
text of soliciting a policy of insurance, means at-
tempting to sell insurance or asking or urging a per-
son to apply for a particular kind of insurance from 
a particular insurer. 
(36) STATE.—The term ‘‘State’’ means each of 
the 50 States, the District of Columbia, the Com-
monwealth of Puerto Rico, any territory of the 
United States, Guam, American Samoa, the Trust 
Territory of the Pacific Islands, the United States 
Virgin Islands, and the Commonwealth of the North-
ern Mariana Islands. 
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(37) STATE
INSURANCE
AGENCY.—The term 
‘‘State insurance agency’’ means an insurance pro-
ducer that is incorporated under State law. 
(38) STATE
INSURER.—The term ‘‘State in-
surer’’ means an insurer incorporated or organized 
under the laws of a State. 
(39) 
SUBSIDIARY.—The 
term 
‘‘subsidiary’’ 
means a business entity controlled, directly or indi-
rectly, by another business entity. For the purposes 
of this definition— 
(A) a business entity is conclusively pre-
sumed to be controlled by a person that, di-
rectly or indirectly, with power to vote, owns, 
controls, or holds a majority of the outstanding 
voting securities of such business entity; 
(B) no presumption, either of control or of 
absence of control, arises if such ownership, 
control, or holding of voting securities is less 
than a majority but more than 5 percent; 
(C) absence of control is presumed if such 
ownership, control or holding of voting securi-
ties is 5 percent or less; and 
(D) in determining control, voting securi-
ties held in separate accounts of a business en-
tity shall be deemed to be owned by the busi-
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ness entity, but voting securities in an invest-
ment advisory account that are not owned by a 
business entity but are held in an account as to 
which the business entity is an investment ad-
viser shall not be deemed to be controlled or 
held by such business entity. 
(40) TRUSTEED ASSETS.—The term ‘‘trusteed 
assets’’ means assets required or permitted by this 
title to be deposited by a non-United States insurer 
with a qualified trustee for the security of its policy-
holders and creditors in the United States. 
(41) TRUSTEED SURPLUS.—The term ‘‘trusteed 
surplus’’ means, with respect to a United States 
branch, the value of the insurer’s trusteed assets de-
posited with a trustee under section 202(b), plus ac-
crued investment income thereon where such income 
is collectible by the trustee, less the aggregate net 
amount of all of its reserves and other liabilities in 
the United States as determined under section 
202(b). 
(42) UNITED
STATES
BRANCH.—The term 
‘‘United States branch’’ means the business unit 
through which business is transacted within the 
United States by a non-United States insurer and 
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the assets and liabilities of the insurer within the 
United States pertaining to such business. 
(43) UNITED
STATES
HOLDING
COMPANY.— 
The term ‘‘United States holding company’’ means, 
with respect to a National Insurer, a person orga-
nized or incorporated in a State that directly or indi-
rectly controls a National Insurer. 
(44) VIOLATION.—The term ‘‘violation’’ in-
cludes any action or inaction (alone or with another 
or others) for or toward causing, bringing about, 
participating in, counseling, or aiding or abetting a 
violation. 
(45) VOTING SECURITIES.—The term ‘‘voting 
securities’’ means securities of any class or any own-
ership interest having voting power for the election 
of directors, trustees, or management of a business 
entity, other than securities having such power only 
by reason of the happening of a contingency. 
TITLE I—OFFICE OF NATIONAL 
INSURANCE 
Subtitle A—Establishment of Office 
of National Insurance 
SEC. 101. ESTABLISHMENT. 
(a) IN GENERAL.—There is established, in the De-
partment of the Treasury, the Office of National Insur-
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ance, which shall be headed by the Commissioner of Na-
tional Insurance. 
(b) OFFICES.—The Commissioner shall establish a 
main office in Washington, D.C., not fewer than 6 regional 
offices, and such additional offices, within or outside the 
United States, as the Commissioner determines to be nec-
essary to carry out the provisions of this Act. 
(c) FUNDING.—The operations of the Office, includ-
ing the compensation of the Commissioner and all employ-
ees of the Office, shall be paid from fees and assessments 
imposed under the terms of section 122. 
(d) APPLICABILITY
OF ADMINISTRATIVE PROCE-
DURES ACT.—The Office shall be an agency of the United 
States for purposes of subchapter II of chapter 5 and 
chapter 6 of title 5, United States Code. 
(e) ANNUAL REPORT.—The Commissioner shall pre-
pare and submit to Congress an annual report on the ac-
tivities of the Office. 
SEC. 102. COMMISSIONER OF NATIONAL INSURANCE. 
(a) APPOINTMENT.— 
(1) IN GENERAL.—The Commissioner of Na-
tional Insurance shall be appointed by the President, 
by and with the advice and consent of the Senate, 
from among individuals who are citizens of the 
United States. 
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(2) TERM.—The Commissioner shall be ap-
pointed for a term of 5 years. 
(3) VACANCY.—A vacancy in the position of the 
Commissioner, which occurs before the expiration of 
the term for which the Commissioner was appointed 
shall be filled in the manner established under para-
graph (1). The Commissioner appointed to fill the 
vacancy shall be appointed only for the remainder of 
the term of the preceding Commissioner. 
(4) SERVICE AFTER TERM.—An individual may 
serve as the Commissioner after the expiration of 
the term for which appointed until the earlier of— 
(A) such time as a successor has been ap-
pointed; or 
(B) 1 year after the expiration of the indi-
vidual’s term. 
(5) PROHIBITION ON FINANCIAL INTERESTS.— 
The Commissioner may not have a direct or indirect 
financial interest in any National Insurer, National 
Agency, or other federally licensed insurance pro-
ducer, except that the Commissioner may own, di-
rectly or indirectly, or may have a direct or indirect 
beneficial interest in any insurance policy written or 
sold by a National Insurer or National Agency. 
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(6) OVERSIGHT.—The Commissioner shall be 
subject to the general oversight of the Secretary of 
the Treasury, who may not intervene in any matter 
or proceeding before the Commissioner (including 
agency enforcement, supervisory, reporting and ad-
ministrative actions, and research, financial analysis, 
and solvency determinations) unless otherwise spe-
cifically provided by law. 
(7) EXECUTIVE SCHEDULE.— 
(A) IN
GENERAL.—The Commissioner 
shall receive compensation at the rate pre-
scribed by law under section 5314 of title 5, 
United States Code, for positions at level III of 
the Executive Schedule. 
(B) 
TECHNICAL
AMENDMENT.—Section 
5314 of title 5, United States Code, is amended 
by inserting ‘‘Commissioner of National Insur-
ance, Department of the Treasury.’’ as a new 
item after ‘‘Administrator, Pipeline and Haz-
ardous Materials Safety Administration.’’. 
(b) POWERS OF THE COMMISSIONER.— 
(1) IN GENERAL.— 
(A) POWERS.—The Commissioner shall— 
(i) oversee the organization, incorpo-
ration, operation, regulation, and super-
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vision of National Insurers and National 
Agencies; 
(ii) issue charters and licenses for Na-
tional Insurers and National Agencies; 
(iii) license, regulate, and supervise 
federally 
licensed 
insurance 
producers 
other than National Agencies; and 
(iv) have exclusive authority to deter-
mine whether a person subject to this Act 
has complied with the Act or the applica-
tion of any State law to matters regulated 
under this Act, including the determination 
of any complaint raised by any person. 
(B) FINAL
AGENCY
ACTION.—A deter-
mination of the Commissioner under subpara-
graph (A)(iv) shall be the final agency action 
for purposes of judicial review of that action. 
(2) RULEMAKING.— 
(A) ISSUANCE
OF
REGULATIONS
AND 
OTHER ACTIONS.—The Commissioner may issue 
such rules, regulations, orders, and interpreta-
tions as the Commissioner determines to be 
necessary to carry out the purposes of this Act. 
(B) AUTONOMY.—The Secretary of the 
Treasury may not delay or prevent the issuance 
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of any rule, regulation, order, or interpretation 
by the Commissioner unless otherwise specifi-
cally authorized by law. 
(C) NO
DELEGATION
PERMITTED.—The 
Commissioner may not delegate any authority 
conferred under subparagraph (A) to any insur-
ance self-regulatory organization. 
(3) LITIGATION AUTHORITY.— 
(A) IN GENERAL.—The Commissioner may 
sue and be sued, complain and defend, and oth-
erwise litigate, in the Commissioner’s name and 
through the Commissioner’s own attorney, in 
any Federal or State court, other than the Su-
preme Court of the United States in which the 
Commissioner shall be represented by the Solic-
itor General of the United States. 
(B) ENFORCEMENT.—The Commissioner 
may apply to the United States district court 
for the jurisdiction in which the main office of 
a National Insurer or National Agency is lo-
cated, or in which any other federally licensed 
insurance producer or other person is located, 
for the enforcement of any effective and out-
standing rule, regulation, order, or interpreta-
tion issued pursuant to this Act. 
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(4) CONSULTATION
WITH
STATE
INSURANCE 
REGULATORS.—The Commissioner may, as appro-
priate, consult with State insurance regulators re-
sponsible for the supervision of States insurers, 
State insurance agencies, and State licensed insur-
ance producers regarding regulatory and supervisory 
matters of common interest. 
(5) INTERNATIONAL
COORDINATION
AND
CO-
OPERATION.— 
(A) IN GENERAL.—The Commissioner may 
engage in international efforts to secure bilat-
eral and multilateral cooperation and agree-
ments, as appropriate, with respect to insurance 
regulation in global markets in order to pro-
mote open and fair competition in such markets 
and to improve the quality and uniformity of in-
surance regulation in all countries. 
(B) FOREIGN INSURANCE REGULATORS.— 
The Commissioner may provide appropriate 
technical assistance to, and cooperation with, 
individual foreign insurance regulators and re-
gional and global regulatory organizations in in-
surance matters affecting international com-
merce, including— 
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(i) the development and implementa-
tion of international regulatory standards; 
and 
(ii) the development and implementa-
tion of bilateral and multilateral mutual 
recognition agreements on the licensing of 
insurance companies and insurance pro-
ducers. 
(C) CONSULTATION AND COOPERATION.— 
In exercising the authority granted under sub-
paragraphs (A) and (B), the Commissioner— 
(i) shall consult and cooperate with 
the Executive Office of the President and 
the United States Trade Representative; 
and 
(ii) may include a representative of 
any interested State insurance regulators 
as the Commissioner determines to be ap-
propriate. 
(6) INDEPENDENCE IN CONGRESSIONAL TESTI-
MONY
AND
RECOMMENDATIONS.—Section 111 of 
Public Law 93–495 (12 U.S.C. 250) is amended by 
inserting ‘‘the Commissioner of the National Insur-
ance,’’ after ‘‘the Director of the Office of Thrift Su-
pervision,’’. 
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(c) GAO AUDIT.—The Commissioner shall make 
available to the Comptroller General of the United States 
all books and records necessary to audit all of the activities 
of the Office. 
SEC. 103. OFFICE PERSONNEL MATTERS. 
(a) IN GENERAL.—The Commissioner may employ 
such examiners, lawyers, accountants, actuaries and other 
employees as are necessary to carry out the provisions of 
this Act. 
(b) COMPENSATION.—The Commissioner shall fix the 
compensation and number of employees of the Office with-
out regard to chapter 51 or subchapter III of chapter 53 
of title 5, United States Code. 
(c) ADDITIONAL
COMPENSATION.—The Commis-
sioner may provide additional compensation and benefits 
to employees of the Office if the same type of compensa-
tion or benefits are then being provided by any Federal 
banking agency or, if not then being provided, could be 
provided by any such agency under applicable provisions 
of law or regulation. In setting and adjusting the total 
amount of compensation and benefits for employees of the 
Office, the Commissioner shall consult, and seek to main-
tain comparability with, the Federal banking agencies. 
(d) ACTING
COMMISSIONER.—The Commissioner 
shall designate an employee of the Office to serve as the 
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Acting Commissioner during the absence or disability of 
the Commissioner. 
(e) DELEGATION OF POWERS.— 
(1) EMPLOYEES AND OTHERS.—Unless other-
wise prohibited by this Act, the Commissioner may 
delegate to any employee, representative, or agent 
any power of the Commissioner. 
(2) SELF-REGULATORY
ORGANIZATIONS.—Un-
less otherwise prohibited by this Act, the Commis-
sioner may, by regulation, delegate to any insurance 
self-regulatory organization any power of the Com-
missioner in accordance with the terms of section 
106. 
SEC. 104. DIVISION OF INSURANCE FRAUD. 
(a) ESTABLISHMENT.—There is established, within 
the Office, a Division of Insurance Fraud. 
(b) AUTHORITY.—The Division of Insurance Fraud 
shall have all powers necessary to enforce the terms of 
subtitle D, other than the power to execute search and 
arrest warrants. 
SEC. 105. DIVISION OF CONSUMER AFFAIRS. 
(a) ESTABLISHMENT.—There is established, within 
the Office, a Division of Consumer Affairs. 
(b) AUTHORITY.—The Division of Consumer Affairs 
shall support the Commissioner in the implementation and 
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enforcement of the market conduct regulations issued pur-
suant to section 215. 
SEC. 106. INSURANCE SELF-REGULATORY ORGANIZATIONS. 
(a) AUTHORITY OF THE COMMISSIONER.—Subject to 
the terms of this section, and the regulations issued pursu-
ant to this section, the Commissioner shall have the au-
thority to— 
(1) provide for the registration of an insurance 
self-regulatory organization; and 
(2) supervise and regulate any registered insur-
ance self-regulatory organization, which shall include 
the authority to— 
(A) review, approve, abrogate, modify, or 
add to the operating rules of an insurance self- 
regulatory organization; 
(B) review, approve, abrogate, or modify 
any disciplinary action taken by an insurance 
self-regulatory organization; 
(C) remove, suspend, or bar an individual 
from serving as an officer or director of an in-
surance self-regulatory organization; 
(D) remove or suspend a member of an in-
surance self-regulatory organization; and 
(E) suspend or revoke the registration of 
an insurance self-regulatory organization. 
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(b) AUTHORITY OF REGISTERED INSURANCE SELF- 
REGULATORY ORGANIZATIONS.—An insurance self-regu-
latory organization that is registered by the Commissioner 
shall have the authority to— 
(1) carry out the purpose of this Act; and 
(2) enforce compliance by its members with the 
provisions of this Act, applicable regulations issued 
by the Commissioner, and the rules of the organiza-
tion. 
(c) MEMBERSHIP.—An insurance self-regulatory or-
ganization may be formed by, and consist exclusively of— 
(1) National Insurers; 
(2) National Agencies; 
(3) federally licensed insurance producers; or 
(4) any combination of National Insurers, Na-
tional Agencies and federally licensed insurance pro-
ducers. 
(d) REGULATIONS.—Not later than 2 years after the 
date of enactment of this Act, the Commissioner shall 
issue regulations governing the registration and operations 
of insurance self-regulatory organizations. Such regula-
tions shall establish— 
(1) the procedures insurance self-regulatory or-
ganizations must follow to be registered by the Com-
missioner, which shall provide for public notice and 
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an opportunity for public comment on the proposed 
registration; 
(2) the standards that the Commissioner shall 
apply in reviewing a proposed registration, which 
shall require an insurance self-regulatory organiza-
tion to demonstrate that— 
(A) it has the capacity to— 
(i) carry out the purpose of this Act; 
and 
(ii) enforce compliance by its members 
with the provisions of this Act, applicable 
regulations, and the rules of the organiza-
tion; and 
(B) its operating rules— 
(i) assure a fair representation of its 
members in the selection of its directors 
and the administration of its affairs; 
(ii) provide for the equitable allocation 
of fees, dues, and other charges among its 
members; 
(iii) provide for the organization to 
take 
appropriate 
disciplinary 
actions 
against members, including the revocation 
of membership status, for violations of this 
Act, the regulations issued pursuant to this 
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Act, or the operating rules of the organiza-
tion; and 
(iv) include procedures for members 
that are subject to disciplinary actions to 
obtain review of such actions by the Com-
missioner; 
(3) the procedures and standards the Commis-
sioner shall follow in reviewing, approving, abro-
gating, or modifying any new operating rule or any 
amendment to an existing operating rule that is pro-
posed by an insurance self-regulatory organization, 
which shall include procedures for public notice and 
comment on such rule or amendment; 
(4) the procedures and standards the Commis-
sioner shall follow in abrogating, modifying, or add-
ing to the operating rules of an insurance self-regu-
latory organization; 
(5) the procedures and standards the Commis-
sioner shall follow in reviewing, approving, abro-
gating, or modifying any disciplinary action by an 
insurance self-regulatory organization; 
(6) the procedures and standards the Commis-
sioner shall follow in removing, suspending, or bar-
ing any individual from serving as an office, or di-
rector of an insurance self-regulatory organization; 
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(7) the procedures and standards the Commis-
sioner shall follow in suspending or revoking the reg-
istration of an insurance self-regulatory organiza-
tion; and 
(8) such other matters as the Commissioner de-
termines appropriate to ensure and protect the pub-
lic interest and the interests of policyholders. 
SEC. 107. OFFICE OF THE OMBUDSMAN. 
(a) ESTABLISHMENT OF THE OFFICE OF THE OM-
BUDSMAN.—There is established within the Office, an Of-
fice of the Ombudsman. The Commissioner shall appoint 
an Ombudsman to administer the Office of the Ombuds-
man. The Ombudsman shall report directly to the Com-
missioner. 
(b) DUTIES OF THE OMBUDSMAN.—The Ombudsman 
shall act as a liaison between the Office and any person 
adversely affected by the Office’s supervisory or regulatory 
activities, including the failure of the Office to take a re-
quested action. The Ombudsman shall assure that safe-
guards exist to encourage complainants to come forward 
and preserve confidentiality. 
(c) POWERS OF THE OMBUDSMAN.—The powers of 
the Ombudsman are the following: 
(1) with the prior consent of the Commissioner, 
the Ombudsman may stay any appealable decision or 
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action during the resolution of an appealable matter; 
and 
(2) review and report any weakness in policy or 
procedures to the Commissioner, and make rec-
ommendations regarding changes in such policies or 
procedures. 
(d) APPEALABLE MATTERS.—Any party adversely af-
fected by an Office decision or action may seek Ombuds-
man review of such decision or action, except for the fol-
lowing: 
(1) Appointments of receiver or conservators. 
(2) Preliminary examination conclusions com-
municated to the regulated entity before a final ex-
amination report is issued. 
(3) Any formal enforcement-related action or 
decision, including the issuance of a formal super-
visory agreement, a cease-and-desist order, a civil 
money penalty, or to take prompt corrective action, 
issue a safety and soundness order, or commence a 
formal investigation. 
(4) Formal and informal rulemakings pursuant 
to subchapter II of chapter 5 of title 5, United 
States Code. 
(5) Decisions or recommended decisions fol-
lowing formal adjudications conducted pursuant to 
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subchapter II of chapter 5 of title 5, United States 
Code. 
(6) Requests for agency records pursuant to 
section 552 of title 5, United States Code (com-
monly referred to as the Freedom of Information 
Act). 
(e) PROCEDURES FOR FILING AN APPEAL TO THE 
OMBUDSMAN.—An aggrieved party may seek review of an 
appealable matter by filing a written appeal with the Of-
fice of the Ombudsman. In the case of a National Insurer 
or National Agency, the appeal shall be signed by the 
President or Chief Executive Officer of the Insurer or 
Agency. The appeal shall set forth all of the reasons for 
the appeal and supporting documentation. The Ombuds-
man may arrange for a meeting of Office personnel and 
the complainants to discuss the appeal. 
(f) EFFECT OF FILING AN APPEAL.—Unless the Om-
budsman determines otherwise, and obtains the concur-
rence of the Commissioner, material supervisory decisions 
and actions are not stayed pending an appeal. 
(g) DECISION OF THE OMBUDSMAN.—After a thor-
ough investigation of the matter, and after considering all 
relevant information provided by the complainant and the 
Office, the Ombudsman shall issue a written determina-
tion of the appeal. Such determination shall become the 
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final decision of the Office, unless reversed, modified, or 
stayed by the Commissioner. 
(h) RETALIATION PROHIBITED.—The Office and its 
staff may not take any adverse action against a complain-
ant for appealing any decision or action to the Ombuds-
man. Upon learning of any possible retaliatory actions, the 
Ombudsman shall investigate the matter, and if the Om-
budsman determines that reasonable grounds exist to con-
clude that retaliation has taken place, shall refer the mat-
ter to the Commissioner. 
Subtitle 
B—Supervision 
of 
Na-
tional Insurers and National 
Agencies 
SEC. 121. EXAMINATION OF NATIONAL INSURERS AND NA-
TIONAL AGENCIES. 
(a) IN GENERAL.— 
(1) EXAMINATION.—The Commissioner shall 
provide for examinations of National Insurers and 
National Agencies. 
(2) REGULAR AND SPECIAL EXAMINATIONS OF 
NATIONAL INSURERS.—Not less than once during 
each 36-month period, the Commissioner shall con-
duct an on-site examination of each National In-
surer, and may conduct a special examination of a 
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National Insurer whenever the Commissioner deter-
mines that a special examination is necessary. 
(3) EXAMINATION OF NATIONAL AGENCIES.— 
The Commissioner may examine a National Agency 
only in response to a complaint or any other evi-
dence that the National Agency has violated or is 
about to violate— 
(A) a law, rule, or regulation; 
(B) any condition imposed in writing by 
the Commissioner in connection with issuing a 
license for a federally licensed insurance pro-
ducer; or 
(C) any written agreement entered into 
with the Commissioner. 
(4) AFFILIATES.— 
(A) IN
GENERAL.—In making examina-
tions of National Insurers or National Agencies, 
the Commissioner may, to the extent necessary 
to discover information concerning activities of 
an affiliate that may have a materially adverse 
effect on the operations, management, or finan-
cial condition of the National Insurer or Na-
tional Agency— 
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(i) require an affiliate to make such 
reports and provide such material as the 
Commissioner may direct; and 
(ii) conduct an examination of the af-
fairs of an affiliate, if— 
(I) the Commissioner has reason-
able cause to believe that the activities 
of the affiliate may have such an ef-
fect; 
(II) the examination is limited to 
the extent necessary to disclose infor-
mation related to such effect; and 
(III) the Commissioner is unable 
to obtain the necessary information 
from the National Insurer or National 
Agency. 
(B) ACCEPTANCE OF AVAILABLE INFORMA-
TION.—To the extent that the Commissioner re-
quires an affiliate to make reports or provide 
material under subparagraph (A), the Commis-
sioner shall, to the fullest extent possible, ac-
cept— 
(i) reports that the affiliate has pro-
vided or been required to provide to other 
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Federal or State regulatory authorities or 
appropriate self-regulatory organizations; 
(ii) information that is otherwise re-
quired to be reported publicly; and 
(iii) audited financial statements. 
(C) USE
OF
REGULATORY
REPORTS.—If 
the Commissioner determines to conduct an ex-
amination of an affiliate under subparagraph 
(B) and such affiliate is a functionally regu-
lated affiliate, the Commissioner shall, to the 
fullest extent possible, rely on the examination 
reports made by the functional regulator of 
such affiliate. 
(b) ACCESS TO PEOPLE AND RECORDS.— 
(1) IN GENERAL.—The Commissioner, upon re-
quest, shall be given prompt and reasonable access 
to National Insurer or National Agency officers, em-
ployees, and agents, and relevant books, records, and 
documents in the course of supervision, oversight, or 
examination of any National Insurer or National 
Agency. 
(2) COURT ORDER.—If prompt and reasonable 
access is not given as required under paragraph (1), 
the Commissioner may apply to the United States 
district court for the judicial district in which the 
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main office of the National Insurer or the National 
Agency is located, or in which the person denying 
such access resides or carries on business, for an 
order requiring that such information be promptly 
provided. 
(3) SUBPOENA POWER.—In connection with ex-
aminations of National Insurers, National Agencies, 
or affiliates under this section and the examination 
of federally licensed insurance producers under sec-
tion 301, the Commissioner may— 
(A) administer oaths and affirmations; 
(B) examine, take, and preserve testimony 
under oath as to any matter in respect of the 
affairs or ownership of any such National In-
surer, National Agency, affiliate, or federally li-
censed insurance producer; 
(C) issue subpoenas; and 
(D) in order to enforce a subpoena issued 
under subparagraph (C), apply to the United 
States district court for the judicial district— 
(i) in which the main office of the Na-
tional Insurer, National Agency, or affil-
iate is located; 
(ii) in which the federally licensed in-
surance producer is located; or 
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(iii) in which the witness resides or 
carries on business. 
SEC. 122. EXAMINATION FEES AND OTHER ASSESSMENTS. 
(a) EXAMINATION FEE.— 
(1) NATIONAL INSURERS, NATIONAL AGENCIES, 
AND
FEDERALLY
LICENSED
INSURANCE
PRO-
DUCERS.—The Commissioner shall assess the cost of 
conducting examinations of National Insurers, Na-
tional Agencies, and federally licensed insurance pro-
ducers against each such Insurer, Agency, or pro-
ducer, as the Commissioner determines to be appro-
priate. 
(2) AFFILIATES.—The Commissioner shall as-
sess the cost of conducting examinations of affiliates 
against each such affiliate, as the Commissioner de-
termines to be appropriate. 
(3) REFUSAL TO PAY.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), if any affiliate refuses to pay an as-
sessment imposed pursuant to paragraph (2), 
the Commissioner may assess such cost against 
the affiliated National Insurer or National 
Agency. 
(B) SHARED AFFILIATES.—If an affiliate 
is an affiliate of more than 1 National Insurer 
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or National Agency, the assessment with re-
spect to that affiliate may be assessed against, 
and collected from, any affiliated National In-
surer or National Agency, in such proportions 
as the Commissioner may prescribe. 
(b) PROCESSING FEE.—The Commissioner may as-
sess a fee against any person who submits to the Office 
an application, filing, statement, notice, or request for ap-
proval to cover the cost of processing such submission. 
(c) OTHER ASSESSMENTS.—The Commissioner may 
assess against National Insurers, National Agencies, and 
federally licensed insurance producers such additional fees 
as the Commissioner determines to be necessary and ap-
propriate to fund the expenses of the Office. 
(d) NOTICE.—The Commissioner shall notify Na-
tional Insurers, National Agencies, and federally licensed 
insurance producers of— 
(1) the initial fees and assessments imposed 
under this section; and 
(2) any change in fees and assessments. 
(e) TREATMENT OF FEES AND ASSESSMENTS.— 
(1) DEPOSITS.—Amounts received by the Com-
missioner from fees and assessments imposed under 
this section shall be deposited in the manner pro-
vided in section 5234 of the Revised Statutes (12 
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U.S.C. 192) with respect to assessments by the 
Comptroller of the Currency. 
(2) GOVERNMENT FUNDS; APPORTIONMENT.— 
Notwithstanding 
any 
other 
provision 
of 
law, 
amounts received by the Commissioner from any fee 
or assessment imposed under this section— 
(A) shall not be considered Government or 
public funds or appropriated money; and 
(B) shall not be subject to apportionment 
for purpose of chapter 15 of title 31, United 
States Code, or under any other authority. 
(f) WORKING CAPITAL FUND.— 
(1) IN GENERAL.—The Commissioner may im-
pose fees and assessments pursuant to subsections 
(a), (b), and (c), in excess of actual expenses for any 
given year, to maintain an appropriate working cap-
ital fund. 
(2) REFUNDS.—The Commissioner shall remit 
to the payers of such fees and assessments any 
funds collected in excess of what the Commissioner 
determines to be necessary to maintain such working 
capital fund. 
(g) USE OF FUNDS.—The Commissioner may use the 
combined resources collected through fees and assess-
ments imposed pursuant to this section to pay all direct 
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