255 
vides notice to the Commissioner that it does not in-
tend to levy such assessments or provide coverage or 
benefits to persons holding insurance policies issued 
by national insurers. If a State association or fund 
provides such notice and does not withdraw the no-
tice during the temporary period, the Corporation 
shall provide coverage or benefits in respect to any 
conservation, rehabilitation, or liquidation that 
would have otherwise been the responsibility of the 
State association or fund during the temporary pe-
riod. 
(3) DEFINITION.—In this subsection, the term 
‘‘temporary period’’ means the 4-year period begin-
ning on the date of enactment of this Act. 
SEC. 1603. ESTABLISHMENT OF THE NATIONAL INSURANCE 
GUARANTY CORPORATION. 
(a) ESTABLISHMENT OF THE CORPORATION.— 
(1) IN GENERAL.—In the event that the list 
published under section 1602(b)(1) indicates that in 
any State, the principal life and health or property 
and casualty guaranty association or fund (or both) 
in such State has not been determined to be a quali-
fied association, and if the Commissioner has not 
granted any petition to reconsider any such deter-
mination before the end of the 4-year period begin-
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256 
ning on the date of enactment of this Act, the Com-
missioner shall establish the National Insurance 
Guaranty Corporation (in this section referred to as 
the ‘‘Corporation’’), in accordance with this section. 
(2) NONPROFIT AND SUCCESSION.—The Cor-
poration shall be a nonprofit corporation and shall 
have succession until dissolved by an Act of Con-
gress. 
(3) APPLICATION OF DISTRICT OF COLUMBIA 
NONPROFIT
CORPORATION
ACT.—The Corporation 
shall, except as otherwise provided in this title, be 
subject to, and have all the powers conferred upon 
a nonprofit corporation by the District of Columbia 
Nonprofit Corporation Act (D.C. Code, 29–301.01 
et seq., or any successor thereto). 
(b) MEMBERSHIP OF THE CORPORATION.— 
(1) IN GENERAL.—The membership of the Cor-
poration shall consist of member insurers. 
(2) DEFINITION.—In this title, the term ‘‘mem-
ber insurer’’— 
(A) means any national insurer or a State 
insurer that operates in a State that does not 
have a qualified association for the line of in-
surance offered by such national insurer or 
State insurer in such State, if such line of in-
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257 
surance is the subject of coverage by the Cor-
poration; and 
(B) does not include— 
(i) a hospital or medical service orga-
nization, whether for profit or not-for-prof-
it; 
(ii) a health maintenance organiza-
tion; 
(iii) a fraternal benefit society; 
(iv) a mandatory or voluntary State 
pooling plan; 
(v) a mutual assessment company or 
other person that operates on an assess-
ment basis; 
(vi) a surplus lines carrier, a risk re-
tention group, or a State insurer writing 
business on a non-admitted or unlicensed 
basis; 
(vii) an organization whose lines of 
business include only charitable gift annu-
ities; or 
(viii) an entity similar to any entity 
described in any of clauses (i) through 
(vii). 
(c) CORPORATE GOVERNANCE.— 
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258 
(1) GOVERNING BODY.—The board of directors 
of the Corporation shall be the governing body of the 
Corporation and shall be vested with all powers nec-
essary for the management and administration of 
the affairs of the Corporation and the promotion of 
the purposes of the Corporation, as authorized by 
this Act. The authority of the board of directors 
shall be specified in the bylaws of the Corporation. 
(2) ELECTION OR APPOINTMENT.—The initial 
board of directors of the Corporation shall be elected 
by the membership of the Corporation, provided that 
if the membership fails to elect the initial board of 
the Corporation on or before the end of the 4-year 
period specified in section 1602(f), then the initial 
board shall be appointed from among the member-
ship by the Commissioner. Membership on the board 
of directors shall be fairly representative of members 
of differing size and lines of business written. 
(3) INITIAL BYLAWS AND RULES.—The Com-
missioner shall prescribe the initial bylaws and rules 
governing the Corporation, which shall set forth the 
composition of the board of directors, the term of 
board members, filling of board vacancies, board 
compensation, election of officers and procedures to 
call board meetings, and all matters necessary for 
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259 
the governance of the Corporation not addressed by 
the District of Columbia Nonprofit Corporation Act 
(D.C. Code, 29–301.01 et seq.). 
(4) AMENDMENTS TO BYLAWS AND RULES.— 
An amendment to the bylaws and rules of the Cor-
poration following the establishment of the initial by-
laws and rules as provided in paragraph (3) shall be 
adopted by the board of directors of the Corporation 
following the approval of the amendment by the 
Commissioner. 
(d) RELATIONSHIP OF CORPORATION TO THE FED-
ERAL GOVERNMENT.— 
(1) SUPERVISION AND OVERSIGHT.—The Cor-
poration shall be subject to supervision and over-
sight by the Commissioner. 
(2) NOT AN AGENCY OR INSTRUMENTALITY OF 
THE
FEDERAL
GOVERNMENT.—The Corporation 
shall not be an agency or instrumentality of the 
United States Government. 
(3) FULL FAITH AND CREDIT.—The obligations 
of the Corporation shall not be backed, directly or 
indirectly, by the full faith and credit of the United 
States. The Corporation shall receive no financial as-
sistance from or have any authority to borrow from 
the United States. 
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260 
(4) FUNDS NOT INCLUDED IN THE FEDERAL 
BUDGET.—Funds held by or due to the Corporation 
shall not be included in the budget of the United 
States, nor may the United States borrow or pledge 
such funds. 
(e) CONTRACTING WITH PERSON TO ADMINISTER 
BENEFITS.—The Corporation may contract, with the ap-
proval of the Commissioner, with another person to ad-
minister the benefits to be provided by the Corporation, 
or otherwise as necessary to fulfill the responsibilities of 
the Corporation under this title. 
(f) ACCOUNTS FOR ADMINISTRATION AND ASSESS-
MENTS.—For purposes of administration and assess-
ments, the Corporation shall establish and separately 
maintain 6 accounts as follows: 
(1) A life insurance account. 
(2) An annuity account. 
(3) A health account. 
(4) A workers’ compensation account. 
(5) An automobile insurance account. 
(6) An account for all other lines of property/ 
casualty insurance to which this title applies. 
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261 
SEC. 1604. BENEFITS FOR POLICYHOLDERS OF NATIONAL 
LIFE INSURERS. 
(a) IN GENERAL.—If a national life insurer or State 
life insurer is doing business in a State that does not have 
a qualified association, as defined in section 1602, for the 
line of insurance offered by such national life insurer or 
State life insurer in such State (and if such line of insur-
ance is covered by the Corporation), and such national life 
insurer or State life insurer is placed into receivership for 
purposes of liquidation, the Corporation shall provide ben-
efits as specified in subsections (b) and (c). 
(b) COVERED PERSONS.—Benefits shall be made 
available as follows: 
(1) To persons who, regardless of where the 
persons reside, are the beneficiaries, assignees, or 
payees of the persons covered under paragraph (2). 
(2) To persons who are owners of or certificate 
holders under the insurance policies, and in each 
case who are residents of the State in which the 
nonqualified association is located. 
(3) This title shall not provide coverage to a 
person who is a payee (or beneficiary) of a policy 
owner, if the payee (or beneficiary) is afforded any 
coverage by a qualified association. 
(4) This title is intended to provide coverage to 
persons who are residents of States in which non-
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