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from a nonadmitted insurer without utilizing the
services of a surplus lines licensee licensed by the
State in which the insured resides or the insured
risk is located.
(18) The term ‘‘doing business’’ includes any of
the following acts, whether effected by mail or other-
wise:
(A) The issuance or delivery of contracts
of insurance.
(B) The issuance or delivery of any con-
tract of guaranty or suretyship as a vocation
and not merely incidental to any other legiti-
mate business or activity of the guarantor or
surety.
(C) The solicitation of applications for
such contracts, or other negotiations prelimi-
nary to the execution of such contracts;
(D) The receipt or collection of premiums,
membership fees, assessments, or other consid-
eration for such contracts.
(E) The transaction of matters subsequent
to execution of such contracts and arising out
of them.
(F) The transaction of business in sub-
stance equivalent to subparagraphs (A) through
241
(E) in a manner designed to evade laws regard-
ing the regulation of insurance.
(G) Operating under a license or certificate
of authority or a certificate of solvency issued
by the Commission or by a State insurance reg-
ulator.
(19) The term ‘‘domestic insurer or reinsurer’’
means an entity which is domiciled in the United
States and is authorized by the Commission or a
State to conduct the business of insurance or rein-
surance within the States, territories, or possessions
of the United States. It includes the duly licensed
United States branch of a foreign insurer or rein-
surer.
(20) The term ‘‘domiciliary State’’ means the
State in which an insurer or reinsurer is incor-
porated or organized.
(21) The term ‘‘eligible surplus lines insurer’’
means a nonadmitted insurer with which a surplus
lines licensee may place surplus lines insurance
under this Act.
(22) The term ‘‘fair consideration’’ means con-
sideration given for property or an obligation—
(A) when in exchange for such property or
obligation, as a fair equivalent therefor, and in
242
good faith, property is conveyed or services are
rendered or an obligation is incurred or an an-
tecedent debt is satisfied; or
(B) when such property or obligation is re-
ceived in good faith to secure a present advance
or 
antecedent 
debt 
in 
an 
amount 
not
disproportionally small as compared to the
value of the property or obligation obtained.
(23) The term ‘‘financial impairment’’ means a
member insurer which is not an insolvent insurer,
and which is—
(A) determined by the Commission to be
potentially unable to fulfill its contractual obli-
gations; or
(B) placed under an order of rehabilitation
or conservation by a court of competent juris-
diction.
(24) The term ‘‘financial statement’’ means any
financial statement which an insurer is required by
law to file with its principal regulatory agency or, if
none is so required, the insurer’s annual financial
report.
(25) The term ‘‘foreign country’’ means any ju-
risdiction not in any State.
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(26) The term ‘‘foreign insurer or reinsurer’’
means an entity which is domiciled outside the Unit-
ed States and is authorized to conduct the business
of insurance or reinsurance by a jurisdiction, coun-
try, territory, or possession outside the United
States.
(27) The term ‘‘general assets’’ means all prop-
erty, real, personal, or otherwise, not specifically
mortgaged, pledged, deposited, or otherwise encum-
bered for the security or benefit of specified persons
or classes of persons. As to specifically encumbered
property, the term ‘‘general assets’’ includes all such
property or its proceeds in excess of the amount nec-
essary to discharge the sum secured thereby.
(28) The term ‘‘guaranty association’’ means
any property, casualty, worker’s compensation, life,
health, and any other association established for the
payment of claims of an insurer in receivership.
(29) The term ‘‘highly capitalized insurer’’
means an insurer that maintains at all times a mini-
mum net worth or trusteed surplus of at least
$50,000,000 (to be subject to periodic adjustment
for inflation pursuant to section 202(c)(2)).
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(30) The term ‘‘holding company’’ means any
person or entity which directly or indirectly controls
an insurer.
(31) The term ‘‘holding company system’’
means a holding company together with its con-
trolled insurers, reinsurers, and other controlled ac-
tivities.
(32) The term ‘‘insolvency’’ or ‘‘insolvent’’
means that an insurer or reinsurer is unable to pay
its obligations when they are due or that its admit-
ted assets (as determined under this Act or its State
of regulation) do not exceed its liabilities plus the
greater of—
(A) any net worth required by law for its
organization; or
(B) the total par or stated value of its au-
thorized and issued capital stock.
For purposes of this paragraph, the term ‘‘liabil-
ities’’ shall include specific requirements imposed by
the Commission upon the insurer or reinsurer at the
time of certification or subsequent thereto.
(33) The term ‘‘insurer’’ means any corpora-
tion, association, society, order, firm, company, part-
nership, individual, or aggregation of individuals
which is subject to examination or supervision by the
245
Commission or any State insurance regulator, or
which is doing or represents an insurance business.
(34) The term ‘‘large insurance buyer’’ means
a purchaser with assets in excess of liabilities of at
least $10,000,000 as of December 31 of the preced-
ing year (to be subject to periodic adjustment for in-
flation pursuant to section 202(c)(2)) and where—
(A) the purchaser certifies to the insurer,
under standards established by the Commission,
that it meets the net worth requirement;
(B) the insurer maintains such certifi-
cation in its files; and
(C) the insurer submits to the Commission
in its annual report a list of all such large in-
surance purchasers.
(35) The term ‘‘life insurance’’ means insur-
ance upon the lives of human beings and insurance
pertaining thereto.
(36) The term ‘‘market assistance plan’’ means
any plan, other than a residual market plan, estab-
lished by a State to assist insurance consumers to
procure coverage from admitted insurers.
(37) The term ‘‘member insurer’’ means an in-
surer which is a member of the National Insurance
Protection Corporation.
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(38) The term ‘‘NARAB’’ means the National
Association of Registered Agents and Brokers.
(39) The term ‘‘net direct written premiums’’
means direct gross premiums written on insurance
policies to which title V applies, less returned pre-
miums thereon and dividends paid or credited to pol-
icyholders on such direct business. ‘‘Net direct writ-
ten premiums’’ does not include premiums on con-
tracts between insurers and reinsurers.
(40) The term ‘‘net reinsurance premium’’
means premiums paid for reinsurance to which this
title applies less premiums paid to another reinsurer.
(41) The term ‘‘net worth’’ means, with respect
to an insurer, the excess of total assets over liabil-
ities of an insurer, which is the sum of all net worth
accounts minus any impairment thereof.
(42) The term ‘‘NIPC’’ means the National In-
surance Protection Corporation.
(43) The term ‘‘nonadmitted insurer’’ means an
insurer not licensed to do an insurance business pur-
suant to a certificate of authority issued by a State,
except that an insurer holding a certificate of au-
thority issued by one or more States may be a
nonadmitted insurer with respect to risks located in
247
any State in which the insurer does not hold a cer-
tificate of authority.
(44) The term ‘‘personal lines insurer’’ means
any property and casualty insurance issued for non-
commercial personal, family, or household purposes.
(45) The term ‘‘property and casualty insur-
ance’’ means insurance against loss of, damage to,
loss of income or extra expense incurred because of
loss of, or damage to, property; insurance against
third party liability claims caused by negligence or
imposed by statute or contract; insurance providing
benefits pursuant to any workers’ compensation law.
(46) The term ‘‘professional reinsurer’’ means a
reinsurer, including the United States branch of a
foreign reinsurer which, as its exclusive business,
contracts to indemnify insurers against loss or obli-
gations contractually undertaken by the insurer, and
retains substantial net risk for its own account. Re-
gardless of how such business is regulated for other
purposes, a professional reinsurer may undertake co-
surety obligations if—
(A) the lead surety is licensed by a State;
(B) the obligations of such co-surety are
not covered by any State guaranty fund; and
248
(C) premiums for such obligations are sub-
ject to State premium taxes.
(47) The term ‘‘qualified financial institution’’
means any financial institution that—
(A) is organized, or in the case of a United
States branch or office of a foreign banking or-
ganization licensed, under the laws of the Unit-
ed States or any State thereof;
(B) is regulated, supervised, and examined
by Federal or State authorities having regu-
latory authority over banks and trust compa-
nies; and
(C) has been determined by the Commis-
sion to meet such standards of financial condi-
tion and strength as are considered necessary
for the protection of the public.
(48) The term ‘‘railroad insurance’’ means in-
surance on operations of railroads engaged in trans-
portation in interstate commerce and their property
used in those operations.
(49) The term ‘‘receiver’’ means the Commis-
sion or the appropriate State insurance regulator
acting in the capacity of rehabilitator or liquidator
of an insurer or reinsurer.
249
(50) The term ‘‘receivership’’ means the reha-
bilitation or liquidation of an insurer or reinsurer.
(51) The term ‘‘reinsurance’’ means the as-
sumption by the reinsurer of all or part of a risk
originally undertaken by the ceding insurer, but does
not mean the substitution of one insurer for another
through a novation.
(52) the term ‘‘reinsurer’’ means an insurer
which contracts to indemnify a ceding insurer for all
or part of a risk originally undertaken by the ceding
insurer. ‘‘Reinsurer’’ shall not include any entity
that is more than 25 percent owned or financially
controlled by any State, by a foreign government, or
by any political subdivision, instrumentality, or
agency of either, if—
(A) such government, subdivision, instru-
mentality, or agency provides financial support
to the business of insurance of the entity and
thereby enables it to compete unfairly for busi-
ness with other reinsurers; or
(B) such ownership or control provides the
insurer with sovereign immunity.
(53) The term ‘‘residual market’’ means an as-
signed risk plan, joint underwriting association, or
any similar mechanism designed to make insurance
250
available to those unable to obtain it in the vol-
untary market.
(54) The term ‘‘secured claim’’ means any
claim secured by mortgage, trust, deed, pledge, de-
posit as security, escrow, or otherwise, but does not
include claims against general assets.
(55) The term ‘‘special deposit claim’’ means
any claim secured by a deposit made pursuant to
statute for the security or benefit of a limited class
or classes of persons, but does not include any claim
secured by general assets.
(56) 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.
(57) The term ‘‘State insurance regulator’’
means the principal insurance regulatory authority
of a State.
(58) The term ‘‘State law’’ means the constitu-
tion and statutes of any State and any regulation,
rule, or requirement promulgated pursuant to statu-
tory authority.
(59) The term ‘‘surplus lines insurance’’ means
any insurance permitted to be placed through a sur-
251
plus lines licensee with a nonadmitted insurer eligi-
ble to accept such insurance pursuant to section
203.
(60) The term ‘‘surplus lines licensee’’ means
an individual partnership, firm, association, or cor-
poration licensed in one or more States to place sur-
plus lines insurance with nonadmitted insurers eligi-
ble to accept such insurance.
(61) The term ‘‘transfer’’ includes the sale and
every other and different mode, direct or indirect, of
disposing of or of parting with property or with an
interest therein, disposing of or of parting with the
possession thereof, or fixing a lien upon property or
upon an interest therein, absolutely, conditionally, or
voluntarily, by or without judicial proceedings. The
retention of a security title to property delivered to
a debtor shall be deemed a transfer suffered by the
debtor.
(62) The term ‘‘trusteed surplus’’ means the
fair market value of the amount placed in trust by
a reinsurer for the exclusive benefit of its ceding in-
surers, minus any incurred losses.
(63) The term ‘‘United States branch’’ means
the business unit through which business is trans-
acted in the United States by an insurer, including
252
the assets and liabilities of such insurer within the
United States pertaining to such business and the
management powers pertaining to such business.
(64) The term ‘‘United States reinsurance li-
abilities’’ means the amount reflected as an asset or
deduction from liabilities on the financial statement
of a domestic insurer for reinsurance recoverable
from a domestic or foreign insurer or reinsurer.
(65) The term ‘‘wet marine and transportation
insurance’’ means—
(A) insurance upon vessels, crafts, hulls,
and of interests therein or with relation thereto;
(B) insurance of marine builders’ risks,
marine war risks, and contracts of marine pro-
tection and indemnity insurance;
(C) insurance of freights and disburse-
ments pertaining to a subject of insurance com-
ing within this subsection; and
(D) insurance of personal property and in-
terests therein, in the course of exportation
from or importation into any country, or in the
course of transportation coastwide or on inland
waters, including transportation by land, water,
or air from point of origin to final destination;
in connection with any and all risks or perils of
253
navigation, transit or transportation; and while
being prepared for and while awaiting ship-
ment; and during any delays, transshipment, or
reshipment incident thereto.
TITLE IX—TECHNICAL AND
CONFORMING AMENDMENTS
SEC. 901. EXECUTIVE SCHEDULE TECHNICAL AND CON-
FORMING AMENDMENTS.
(a) TITLE 5.—
(1) Section 5314 of title 5, United States Code,
is amended by adding at the end the following:
‘‘Chairman, Federal Insurance Solvency Com-
mission.’’.
(2) Section 5315 of such title is amended by
adding at the end the following:
‘‘Members, Federal Insurance Solvency Com-
mission.’’.
(b) SECURITIES EXCHANGE ACT OF 1934.—Section
15A of the Securities Exchange Act of 1934 (15 U.S.C.
78o–3) is amended by adding at the end the following:
‘‘(j) COORDINATION
WITH
NARAB.—Each reg-
istered national securities association shall coordinate with
the National Association of Registered Agents and Bro-
kers established under section 601 of the Federal Insur-
ance Solvency Act of 1993 in order to ease any adminis-
254
trative burdens that fall on persons that are members of
both associations, consistent with the purposes of such Act
and this Act.
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