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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-
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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— 
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(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; 
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(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 
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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 
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(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). 
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(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.— 
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(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. 
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(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: 
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(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 
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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 
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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. 
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(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, 
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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-
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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 
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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 
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(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, 
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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]’’. 
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(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: 
LORRAINE C. MILLER, 
Clerk. 
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