I
103D CONGRESS
1ST SESSION
H. R. 1188
To provide for disclosures for insurance in interstate commerce.
IN THE HOUSE OF REPRESENTATIVES
MARCH 3, 1993
Mrs. COLLINS of Illinois introduced the following bill; which was referred to
the Committee on Energy and Commerce
A BILL
To provide for disclosures for insurance in interstate
commerce.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Anti Redlining in
Insurance Disclosure Act’’.
SEC. 2. FINDINGS AND CONSTRUCTION.
(a) FINDINGS.—The Congress finds that—
(1) there are disparities in property and cas-
ualty insurance coverage provided by some insurers
engaged in interstate commerce between areas of
different incomes and racial composition,
sold in such MSA on an annualized basis which ad-
justs for varying durations of insurance policies
sold—
(A) itemized by census tract for policies
sold within any county with a population of
more than 30,000 within the designated MSA,
or
(B) by county for insurance policies sold
within any other county in such MSA.
Such information shall be made available to the pub-
lic on a timetable determined by the Secretary but
not later than December 31 of the calendar year fol-
lowing the calendar year for which the information
is required to be reported.
(b) REQUIREMENTS.—
(1) CONTENT.—The information required to be
maintained and made available under subsection
(a)(1) shall—
(A) be itemized in order to clearly and con-
spicuously disclose the number and coverage
amount for each line of insurance for which
information is required by—
(i) census tracts for insurance policies
within any county with a population of
more than 30,000 within the designated
MSA, or
(ii) county for insurance policies with-
in any other county within such designated
MSA,
(B) disclose for each designated line of in-
surance in a designated MSA and, with respect
to each such line, for each census tract or
county, as applicable, in the designated MSA—
(i) the total number of claims made
which with respect to property insurance
shall be disaggregated by the type and use
of the property insured, and
(ii) the total amount paid in claims
which with respect to property insurance
shall be disaggregated by the type and use
of the property insured.
(C) disclose the standards and criteria
used in underwriting each designated line of
insurance, and
(D) be made available to the public on a
timetable determined by the Secretary but not
later than December 31 of the calendar year
following the calendar year for which the infor-
mation is required to be made available.
(2) ITEMIZATION OF DATA.—With respect to
insurance for which information is required to be
maintained and made available under subsection
(a)(1), the following information shall be maintained
and made available for each completed application
and for each policy:
(A) The designated MSA for which such
insurance is issued and within such MSA the
census tract or county, as applicable, for which
such insurance is issued.
(B) The designated insurer who issued
such insurance.
(C) The date of the issuance of such insur-
ance.
(D) The line of the insurance which is des-
ignated and any subline or class of such insur-
ance.
(E) The type of insurance or policy form
for which applications are made and the types
of insurance and policy forms which are issued.
(F) The amount of coverage provided
under such insurance and any applicable
deductibles.
(G) The amount of the premiums for such
insurance.
(H) The durations of such insurance.
(I) The gender and racial characteristics of
the applicants for such insurance.
(J) A notation if such insurance was
issued in a voluntary or residual market.
(K) The reason for any declination, can-
cellation, or non-renewal made for such insur-
ance.
(L) With respect to property insurance,
the market value of the property insured and
the type and use of property insured.
(3) PERIOD OF MAINTENANCE.—Any informa-
tion required to be compiled and made available
under subsection (a) shall be maintained and made
available for a period of 5 years after the close of
the first year during which such information is
required to be maintained and made available.
(4) FORMAT
FOR DISCLOSURES.—Subject to
subsection (c), the Secretary shall prescribe a stand-
ard format for making information available as re-
quired by subsection (a). Such format shall encour-
age the submission of information in a form read-
able by a computer.
(5) EXEMPTION.—
(A) SECRETARIAL ACTION.—The Secretary
may by regulation exempt from the require-
ments of subsection (a) any insurer within any
State if the Secretary determines that under
the laws of such State that such insurer is sub-
ject to disclosure requirements on a census
tract basis substantially similar to those of sub-
section (a) and that such law contains adequate
provisions for enforcement.
(B) UNITED
STATES
PROGRAM.—Report-
ing shall not be required under subsection (a)
with respect to insurance provided by a
program underwritten or administered by the
United States.
(6) COMPLETED APPLICATION.—For purposes
of subsection (a) and this subsection, the Secretary
shall define ‘‘completed applications’’ to—
(A) ensure that the disclosure required by
such subsections appropriately reflects the char-
acteristics of the applicants interested in pur-
chasing insurance in a designated MSA, and
(B) prevent insurers from evading the in-
tent of such subsections through practices de-
signed to discourage applicants from completing
applications.
(1) DESIGNATIONS OF MSA’S.—The Secretary
shall, on an annual basis, designate the MSA’s for
which reporting is required under section 3. At a
minimum, the Secretary shall designate the 150
MSA’s having the largest population. The Secretary
may designate additional MSA’s on the basis of such
criteria as the Secretary may by rule develop. Such
a rule shall be issued in accordance with section 553
of title 5, United States Code.
(2) DESIGNATION
OF
INSURERS.—For each
MSA designated under paragraph (1), the Secretary
shall take the following actions:
(A) The Secretary shall annually designate
the insurers transacting insurance business in
such MSA for which reporting is required under
section 3. At a minimum, the Secretary shall
annually designate the 25 insurers in such MSA
having the largest premium volume in the
designated lines of insurance.
(B) The Secretary shall also annually des-
ignate any entity providing insurance in a des-
ignated line of insurance as part of a residual
market established by State law.
(C) The Secretary may designate addi-
tional insurers on the basis of such criteria as
the Secretary may by rule develop. Such a rule
shall be issued in accordance with section 553
of title 5, United States Code. In considering
whether to designate additional insurers, the
Secretary shall ensure that—
(i) insurers who specialize in selling
insurance in urban areas, including surplus
lines insurers, are specifically considered
for designation notwithstanding their pre-
mium volume, and
(ii) that insurers representing at least
90 percent of the premium volume in
the designated lines of insurance are
designated in such MSA.
(3) DESIGNATION OF LINES OF INSURANCE.—
For each MSA designated under paragraph (1) the
Secretary shall designate the lines of property and
casualty insurance sold in such MSA for which re-
porting is required under section 3. At a minimum,
the Secretary shall annually designate—
(A) private passenger automobile insurance
(including appropriate sublines and classes),
(B) property insurance which does not
cover commercial property (including appro-
priate sublines and classes and related cov-
erages such as coverage of property contents
and property insured at cash value), and
(C) commercial insurance for small busi-
ness.
The Secretary may designate additional lines of in-
surance on the basis of such criteria as the Sec-
retary may by rule develop. Such a rule shall be
issued in accordance with section 553 of title 5,
United States Code. For purposes of this Act, the
designation of a line of insurance includes a designa-
tion of a subline or class of insurance.
(4) TIMING OF DESIGNATIONS.—The Secretary
shall make the annual designations required by
paragraphs (1), (2), and (3) no later than Septem-
ber 1 of the year preceding the year for which re-
porting is required under section 3. The Secretary
shall notify persons involved in the designations no
later than the October 1 which follows the designa-
tion.
(b) OBTAINING INFORMATION.—The Secretary may
obtain from insurers such information as the Secretary
may require to make designations under subsection (a).
SEC. 5. DISCLOSURES TO REJECTED APPLICANTS.
(a) IN GENERAL.—Except as provided in subsection
(e), the Secretary shall, by regulation issued under section
553 of title 5, United States Code—
(1) require insurers to provide to each applicant
for insurance in a designated line—
(A) reasons for denying an application for
such insurance or for canceling or not renewing
a policy in force, and
(B) actions the applicant may take to qual-
ify for such insurance, and
(2) restrict the use insurers may make of infor-
mation relating to—
(A) adverse underwriting decisions, or
(B) insurance coverage in a residual mar-
ket.
(b) MODEL ACTS.—In issuing regulations under sub-
section (a), the Secretary shall consider relevant portions
of model acts developed by the National Association of
Insurance Commissioners.
(c) ENFORCEMENT.—The Secretary may delegate to
the States the authority to enforce the requirements of
regulations issued under subsection (a).
(d) PREEMPTION.—Subsection (a) is not to be con-
strued to preempt any State from imposing on insurers
requirements of the type stated in such subsection, includ-
ing requirements which are more stringent or more com-
prehensive.
(e) EXEMPTION.—A regulation issued under sub-
section (a) may not apply to insurance provided under a
program underwritten or administered by the United
States.
(f) 
DEFINITION.—For 
purposes 
of 
subsection
(a)(2)(A), an adverse underwriting decision means any of
the following actions with respect to insurance trans-
actions involving insurance coverage which is individually
underwritten:
(1) A declination of insurance coverage.
(2) A termination of insurance coverage.
(3) Failure of an agent to apply for insurance
coverage with a specific insurance entity which the
agent represents and which is requested by the
applicant.
(4) In the case of property or casualty insur-
ance coverage—
(A) place by an insurance entity or agent
of a risk with a residual market mechanism, an
unauthorized insurer, or an insurance entity
which specializes in substandard risks, or
(B) the charging of higher rates on the
basis of information which differs from that
which the applicant or policyholder furnished.
SEC. 6. TERMINATION OF AGENTS.
(a) REGULATIONS.—Except as provided in subsection
(d), the Secretary shall, by regulation issued under section
553 of title 5, United States Code, ensure that the prac-
tices of insurers in terminating agents who handle prop-
erty or casualty insurance do not result in an inappropri-
ate effect on the availability or affordability of insurance
from such insurers. Such regulations shall specifically en-
sure that such practices do not result in unfair discrimina-
tion against agents as a result of their geographic loca-
tions or of the geographic locations of their clients. Regu-
lations under subsection (a) shall be stated in terms of
minimum standards.
(b) PREEMPTION.—Subsection (a) is not to be con-
strued to preempt any State from imposing on insurers
requirements of the type stated in such subsection, includ-
ing requirements which are more stringent or more com-
prehensive.
(c) ENFORCEMENT.—The Secretary may delegate to
the States the enforcement of such regulations.
(d) EXEMPTION.—A regulation issued under sub-
section (a) may not apply to insurance provided under a
program underwritten or administered by the United
States.
SEC. 7. IMPLEMENTATION.
The Secretary shall prescribe such regulations as may
be necessary to carry out section 3. Such regulations may
contain such classifications, differentiations, or other pro-
visions, and may provide for such adjustments and excep-
tions for any class of transactions, as in the judgment of
the Secretary are necessary and proper to effectuate the
purposes of such section and to prevent circumvention or
evasion thereof or to facilitate compliance therewith.
SEC. 8. RELATION TO STATE LAWS.
This Act does not annul, alter, or affect, or exempt
the obligation of any insurer subject to this Act to comply
with the laws of any State or subdivision thereof with
respect to public disclosure and recordkeeping.
SEC. 9. IMPROVED METHODS.
The Secretary shall develop, or assist in the improve-
ment of, methods of matching addresses and census tracts
to facilitate compliance by insurers, in as economical a
manner as possible, with the requirements of this Act.
SEC. 10. REPORT.
The Secretary shall report to the Committee on En-
ergy and Commerce of the House of Representatives and
the Committee on
of the Senate on the im-
plementation of this Act and shall make recommendations
to such committees on such additional legislation as the
Secretary deems appropriate to carry out this Act.
SEC. 11. COMPILATION OF AGGREGATE DATA.
(a) SCOPE OF DATA AND TABLES.—The Secretary
shall compile each year, for each MSA, aggegate data by
census tract for all insurers who are subject to section 3
or who are exempt from section 3 under subsection
(b)(5)(A) of such section. The Secretary shall also produce
tables indicating, for each MSA, aggregate insurance un-
derwriting patterns for various categories of census tracts
grouped according to location, age of property, income
level, and racial characteristics.
(b) AVAILABILITY TO PUBLIC.—The data compiled
and the tables produced pursuant to subsection (a) shall
be made available to the public on a timetable determined
by the Secretary but not later than December 31 of the
year following the calendar year on which the data and
tables are based.
SEC. 12. ENFORCEMENT.
(a) CIVIL PENALTIES.—An insurer who does not
comply with the requirements of section 3 or a regulation
issued under section 5 or 6 shall be subject to a civil pen-
alty of not to exceed $5,000 for each day during which
such violation continues.
(b) INJUNCTION.—The district courts of the United
States shall have jurisdiction over a petition of the Sec-
retary to enjoin an insurer from actions which are in viola-
tion of the requirements of section 3 or of a regulation
issued under section 5 or 6.
SEC. 13. DEFINITIONS.
For purposes of this Act:
(1) The term ‘‘commercial insurance’’ means
any line of property and casualty insurance, except
private passenger automobile and homeowner’s in-
surance.
(2) The term ‘‘insurer’’ means any corporation,
association, society, order, firm, company, partner-
ship, individual, or aggregation of individuals which
is subject to examination or supervision by any State
insurance regulator, or which is doing or represents
an insurance business.
(3) The term ‘‘personal lines of insurance’’
means any property and casualty insurance issued
for noncommercial personal, family, or household
purposes.
(4) The term ‘‘property and casualty insur-
ance’’ means insurance against loss of or damage to
property, insurance against loss of income or extra
expense incurred because of loss of, or damage to,
property, and insurance against third party liability
claims caused by negligence or imposed by statute or
contract.
(5) The term ‘‘residual market’’ means an as-
signed risk plan, joint underwriting association, or
any similar mechanism designed to make insurance
available to those unable to obtain it in the
voluntary market.
(6) The term ‘‘Secretary’’ means the Secretary
of Commerce.
(7) The term ‘‘State’’ means any State, the
District of Columbia, the Commonwealth of Puerto
Rico, the Northern Mariana Islands, the Virgin Is-
lands, American Samoa, and the Trust Territory of
the Pacific Islands.
SEC. 14. EFFECTIVE DATE
The requirements of this Act shall take effect with
respect to calendar year 1995.
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HR 1188 1H——2