232
title insurance as agent as of January 1, 1997, a national
bank and a subsidiary of a national bank may sell title
insurance as agent in such State in the same manner and
to the same extent such State banks are authorized to sell
title insurance as agent in such State.
SEC. 307. EXPEDITED AND EQUALIZED DISPUTE RESOLU-
TION FOR FINANCIAL REGULATORS.
(a) FILING IN COURT OF APPEAL.—In the case of
a regulatory conflict between a State insurance regulator
and a Federal regulator as to whether any product is or
is not insurance as defined in section 304(c) of this Act,
or whether a State statute, regulation, order, or interpre-
tation regarding any insurance sales or solicitation activity
is properly treated as preempted under Federal law, either
regulator may seek expedited judicial review of such deter-
mination by the United States Court of Appeals for the
circuit in which the State is located or in the United
States Court of Appeals for the District of Columbia Cir-
cuit by filing a petition for review in such court.
(b) EXPEDITED REVIEW.—The United States court
of appeals in which a petition for review is filed in accord-
ance with paragraph (1) shall complete all action on such
petition, including rendering a judgment, before the end
of the 60-day period beginning on the date such petition
233
is filed, unless all parties to such proceeding agree to any
extension of such period.
(c) SUPREME COURT REVIEW.—Any request for
certiori to the Supreme Court of the United States of any
judgment of a United States court of appeals with respect
to a petition for review under this section shall be filed
with the United States Supreme Court as soon as prac-
ticable after such judgment is issued.
(d) STATUTE OF LIMITATION.—No action may be
filed under this section challenging an order, ruling, deter-
mination, or other action of a Federal financial regulator
or State insurance regulator after the later of—
(1) the end of the 12-month period beginning
on the date the first public notice is made of such
order, ruling, or determination in its final form; or
(2) the end of the 6-month period beginning on
the date such order, ruling, or determination takes
effect.
(e) STANDARD OF REVIEW.—The court shall decide
an action filed under this section based on its review on
the merits of all questions presented under State and Fed-
eral law, including the nature of the product or activity
and the history and purpose of its regulation under State
and Federal law, without unequal deference.
234
SEC. 308. CONSUMER PROTECTION REGULATIONS.
(a) REGULATIONS REQUIRED.—
(1) IN GENERAL.—The Federal Deposit Insur-
ance Act (12 U.S.C. 1811 et seq.) is amended by
adding at the end the following new section:
‘‘SEC. 45. CONSUMER PROTECTION REGULATIONS.
‘‘(a) REGULATIONS REQUIRED.—
‘‘(1) IN GENERAL.—The Federal banking agen-
cies shall prescribe and publish in final form, before
the end of the 1-year period beginning on the date
of the enactment of this Act, consumer protection
regulations (which the agencies jointly determine to
be appropriate) that—
‘‘(A) apply to retail sales practices, solici-
tations, advertising, or offers of any insurance
product by any insured depository institution or
wholesale financial institution or any person
who is engaged in such activities at an office of
the institution or on behalf of the institution;
and
‘‘(B) are consistent with the requirements
of this Act and provide such additional protec-
tions for consumers to whom such sales, solici-
tations, advertising, or offers are directed as
the agency determines to be appropriate.
235
‘‘(2) APPLICABILITY
TO
SUBSIDIARIES.—The
regulations prescribed pursuant to paragraph (1)
shall extend such protections to any subsidiaries of
an insured depository institution, as deemed appro-
priate by the regulators referred to in paragraph (3),
where such extension is determined to be necessary
to ensure the consumer protections provided by this
section.
‘‘(3) CONSULTATION
AND
JOINT
REGULA-
TIONS.—The Federal banking agencies shall consult
with each other and prescribe joint regulations pur-
suant to paragraph (1), after consultation with the
State insurance regulators, as appropriate.
‘‘(b) SALES PRACTICES.—The regulations prescribed
pursuant to subsection (a) shall include anticoercion rules
applicable to the sale of insurance products which prohibit
an insured depository institution from engaging in any
practice that would lead a consumer to believe an exten-
sion of credit, in violation of section 106(b) of the Bank
Holding Company Act Amendments of 1970, is condi-
tional upon—
‘‘(1) the purchase of an insurance product from
the institution or any of its affiliates or subsidiaries;
or
236
‘‘(2) an agreement by the consumer not to ob-
tain, or a prohibition on the consumer from obtain-
ing, an insurance product from an unaffiliated en-
tity.
‘‘(c) DISCLOSURES AND ADVERTISING.—The regula-
tions prescribed pursuant to subsection (a) shall include
the following provisions relating to disclosures and adver-
tising in connection with the initial purchase of an insur-
ance product:
‘‘(1) DISCLOSURES.—
‘‘(A) IN GENERAL.—Requirements that the
following disclosures be made orally and in writ-
ing before the completion of the initial sale and,
in the case of clause (iv), at the time of applica-
tion for an extension of credit:
‘‘(i) UNINSURED STATUS.—As appro-
priate, the product is not insured by the
Federal Deposit Insurance Corporation,
the United States Government, or the in-
sured depository institution.
‘‘(ii) INVESTMENT RISK.—In the case
of a variable annuity or other insurance
product which involves an investment risk,
that there is an investment risk associated
237
with the product, including possible loss of
value.
‘‘(iv) COERCION.—The approval of an
extension of credit may not be conditioned
on—
‘‘(I) the purchase of an insurance
product from the institution in which
the application for credit is pending or
any of its affiliates or subsidiaries; or
‘‘(II) an agreement by the con-
sumer not to obtain, or a prohibition
on the consumer from obtaining, an
insurance product from an unaffili-
ated entity.
‘‘(B) MAKING DISCLOSURE READILY UN-
DERSTANDABLE.—Regulations prescribed under
subparagraph (A) shall encourage the use of
disclosure that is conspicuous, simple, direct,
and readily understandable, such as the follow-
ing:
‘‘(i) ‘NOT FDIC–INSURED’.
‘‘(ii) ‘NOT GUARANTEED BY THE
BANK’.
‘‘(iii) ‘MAY GO DOWN IN VALUE’.
238
‘‘(C) ADJUSTMENTS
FOR
ALTERNATIVE
METHODS
OF
PURCHASE.—In prescribing the
requirements under subparagraphs (A) and
(D), necessary adjustments shall be made for
purchase in person, by telephone, or by elec-
tronic media to provide for the most appro-
priate and complete form of disclosure and ac-
knowledgments.
‘‘(D) CONSUMER
ACKNOWLEDGMENT.—A
requirement that an insured depository institu-
tion shall require any person selling an insur-
ance product at any office of, or on behalf of,
the institution to obtain, at the time a con-
sumer receives the disclosures required under
this paragraph or at the time of the initial pur-
chase by the consumer of such product, an ac-
knowledgment by such consumer of the receipt
of the disclosure required under this subsection
with respect to such product.
‘‘(2) 
PROHIBITION
ON
MISREPRESENTA-
TIONS.—A prohibition on any practice, or any adver-
tising, at any office of, or on behalf of, the insured
depository institution, or any subsidiary as appro-
priate, which could mislead any person or otherwise
239
cause a reasonable person to reach an erroneous be-
lief with respect to—
‘‘(A) the uninsured nature of any insur-
ance product sold, or offered for sale, by the in-
stitution or any subsidiary of the institution; or
‘‘(B) in the case of a variable annuity or
other insurance product that involves an invest-
ment risk, the investment risk associated with
any such product.
‘‘(d) SEPARATION OF BANKING AND NONBANKING
ACTIVITIES.—
‘‘(1) REGULATIONS
REQUIRED.—The regula-
tions prescribed pursuant to subsection (a) shall in-
clude such provisions as the Federal banking agen-
cies consider appropriate to ensure that the routine
acceptance of deposits and the making of loans is
kept, to the extent practicable, physically segregated
from insurance product activity.
‘‘(2) REQUIREMENTS.—Regulations prescribed
pursuant to paragraph (1) shall include the follow-
ing requirements:
‘‘(A) SEPARATE SETTING.—A clear delin-
eation of the setting in which, and the cir-
cumstances under which, transactions involving
insurance products should be conducted in a lo-
240
cation physically segregated from an area where
retail deposits are routinely accepted.
‘‘(B) REFERRALS.—Standards which per-
mit any person accepting deposits from, or
making loans to, the public in an area where
such transactions are routinely conducted in an
insured depository institution to refer a cus-
tomer who seeks to purchase any insurance
product to a qualified person who sells such
product, only if the person making the referral
receives no more than a one-time nominal fee of
a fixed dollar amount for each referral that
does not depend on whether the referral results
in a transaction.
‘‘(C) QUALIFICATION AND LICENSING RE-
QUIREMENTS.—Standards prohibiting any in-
sured depository institution from permitting
any person to sell or offer for sale any insur-
ance product in any part of any office of the in-
stitution, or on behalf of the institution, unless
such person is appropriately qualified and li-
censed.
‘‘(e) DOMESTIC VIOLENCE DISCRIMINATION PROHI-
BITION.—
241
‘‘(1) IN GENERAL.—In the case of an applicant
for, or an insured under, any insurance product de-
scribed in paragraph (2), the status of the applicant
or insured as a victim of domestic violence, or as a
provider of services to victims of domestic violence,
shall not be considered as a criterion in any decision
with regard to insurance underwriting, pricing, re-
newal, or scope of coverage of insurance policies, or
payment of insurance claims, except as required or
expressly permitted under State law.
‘‘(2) SCOPE OF APPLICATION.—The prohibition
contained in paragraph (1) shall apply to any insur-
ance product which is sold or offered for sale, as
principal, agent, or broker, by any insured deposi-
tory institution or any person who is engaged in
such activities at an office of the institution or on
behalf of the institution.
‘‘(3) SENSE OF THE CONGRESS.—It is the sense
of the Congress that, by the end of the 30-month pe-
riod beginning on the date of the enactment of this
Act, the States should enact prohibitions against dis-
crimination with respect to insurance products that
are at least as strict as the prohibitions contained in
paragraph (1).
242
‘‘(4) DOMESTIC VIOLENCE DEFINED.—For pur-
poses of this subsection, the term ‘domestic violence’
means the occurrence of 1 or more of the following
acts by a current or former family member, house-
hold member, intimate partner, or caretaker:
‘‘(A) Attempting to cause or causing or
threatening another person physical harm, se-
vere emotional distress, psychological trauma,
rape, or sexual assault.
‘‘(B) Engaging in a course of conduct or
repeatedly committing acts toward another per-
son, including following the person without
proper authority, under circumstances that
place the person in reasonable fear of bodily in-
jury or physical harm.
‘‘(C) Subjecting another person to false
imprisonment.
‘‘(D) Attempting to cause or cause damage
to property so as to intimidate or attempt to
control the behavior of another person.
‘‘(f) CONSUMER GRIEVANCE PROCESS.—The Federal
banking agencies shall jointly establish a consumer com-
plaint mechanism, for receiving and expeditiously address-
ing consumer complaints alleging a violation of regulations
issued under the section, which shall—
243
‘‘(1) establish a group within each regulatory
agency to receive such complaints;
‘‘(2) develop procedures for investigating such
complaints;
‘‘(3) develop procedures for informing consum-
ers of rights they may have in connection with such
complaints; and
‘‘(4) develop procedures for addressing concerns
raised by such complaints, as appropriate, including
procedures for the recovery of losses to the extent
appropriate.
‘‘(g) EFFECT ON OTHER AUTHORITY.—
‘‘(1) IN GENERAL.—No provision of this section
shall be construed as granting, limiting, or otherwise
affecting—
‘‘(A) any authority of the Securities and
Exchange Commission, any self-regulatory or-
ganization, the Municipal Securities Rule-
making Board, or the Secretary of the Treasury
under any Federal securities law; or
‘‘(B) except as provided in paragraph (2),
any authority of any State insurance commis-
sioner or other State authority under any State
law.
‘‘(2) COORDINATION WITH STATE LAW.—
245
scribed under this section shall supersede the
comparable provision of such State statute, reg-
ulation, order, or interpretation.
‘‘(h) INSURANCE PRODUCT DEFINED.—For purposes
of this section, the term ‘insurance product’ includes an
annuity contract the income of which is subject to tax
treatment under section 72 of the Internal Revenue Code
of 1986.’’.
SEC. 309. CERTAIN STATE AFFILIATION LAWS PREEMPTED
FOR INSURANCE COMPANIES AND AFFILI-
ATES.
No State may, by law, regulation, order, interpreta-
tion, or otherwise—
(1) prevent or significantly interfere with the
ability of any insurer, or any affiliate of an insurer
(whether such affiliate is organized as a stock com-
pany, mutual holding company, or otherwise), to be-
come a financial holding company or to acquire con-
trol of an insured depository institution;
(2) limit the amount of an insurer’s assets that
may be invested in the voting securities of an in-
sured depository institution (or any company which
controls such institution), except that the laws of an
insurer’s State of domicile may limit the amount of
246
such investment to an amount that is not less than
5 percent of the insurer’s admitted assets; or
(3) prevent, significantly interfere with, or have
the authority to review, approve, or disapprove a
plan of reorganization by which an insurer proposes
to reorganize from mutual form to become a stock
insurer (whether as a direct or indirect subsidiary of
a mutual holding company or otherwise) unless such
State is the State of domicile of the insurer.
Subtitle B—Redomestication of
Mutual Insurers
SEC. 311. GENERAL APPLICATION.
This subtitle shall only apply to a mutual insurance
company in a State which has not enacted a law which
expressly establishes reasonable terms and conditions for
a mutual insurance company domiciled in such State to
reorganize into a mutual holding company.
SEC. 312. REDOMESTICATION OF MUTUAL INSURERS.
(a) REDOMESTICATION.—A mutual insurer organized
under the laws of any State may transfer its domicile to
a transferee domicile as a step in a reorganization in
which, pursuant to the laws of the transferee domicile and
consistent with the standards in subsection (f), the mutual
insurer becomes a stock insurer that is a direct or indirect
subsidiary of a mutual holding company.
247
(b) RESULTING DOMICILE.—Upon complying with
the applicable law of the transferee domicile governing
transfers of domicile and completion of a transfer pursu-
ant to this section, the mutual insurer shall cease to be
a domestic insurer in the transferor domicile and, as a
continuation of its corporate existence, shall be a domestic
insurer of the transferee domicile.
(c) LICENSES PRESERVED.—The certificate of au-
thority, agents’ appointments and licenses, rates, approv-
als and other items that a licensed State allows and that
are in existence immediately prior to the date that a re-
domesticating insurer transfers its domicile pursuant to
this subtitle shall continue in full force and effect upon
transfer, if the insurer remains duly qualified to transact
the business of insurance in such licensed State.
(d) EFFECTIVENESS
OF OUTSTANDING POLICIES
AND CONTRACTS.—
(1) IN
GENERAL.—All outstanding insurance
policies and annuities contracts of a redomesticating
insurer shall remain in full force and effect and need
not be endorsed as to the new domicile of the in-
surer, unless so ordered by the State insurance regu-
lator of a licensed State, and then only in the case
of outstanding policies and contracts whose owners
reside in such licensed State.
248
(2) FORMS.—
(A) Applicable State law may require a re-
domesticating insurer to file new policy forms
with the State insurance regulator of a licensed
State on or before the effective date of the
transfer.
(B) Notwithstanding subparagraph (A), a
redomesticating insurer may use existing policy
forms with appropriate endorsements to reflect
the new domicile of the redomesticating insurer
until the new policy forms are approved for use
by the State insurance regulator of such li-
censed State.
(e) NOTICE.—A redomesticating insurer shall give
notice of the proposed transfer to the State insurance reg-
ulator of each licensed State and shall file promptly any
resulting amendments to corporate documents required to
be filed by a foreign licensed mutual insurer with the in-
surance regulator of each such licensed State.
(f) PROCEDURAL REQUIREMENTS.—No mutual in-
surer may redomesticate to another State and reorganize
into a mutual holding company pursuant to this section
unless the State insurance regulator of the transferee
domicile determines that the plan of reorganization of the
insurer includes the following requirements:
249
(1) APPROVAL BY BOARD OF DIRECTORS AND
POLICYHOLDERS.—The reorganization is approved
by at least a majority of the board of directors of
the mutual insurer and at least a majority of the
policyholders who vote after notice, disclosure of the
reorganization and the effects of the transaction on
policyholder contractual rights, and reasonable op-
portunity to vote, in accordance with such notice,
disclosure, and voting procedures as are approved by
the State insurance regulator of the transferee domi-
cile.
(2) CONTINUED VOTING CONTROL BY POLICY-
HOLDERS; REVIEW OF PUBLIC STOCK OFFERING.—
After the consummation of a reorganization, the pol-
icyholders of the reorganized insurer shall have the
same voting rights with respect to the mutual hold-
ing company as they had before the reorganization
with respect to the mutual insurer. With respect to
an initial public offering of stock, the offering shall
be conducted in compliance with applicable securities
laws and in a manner approved by the State insur-
ance regulator of the transferee domicile.
(3) AWARD OF STOCK OR GRANT OF OPTIONS
TO OFFICERS AND DIRECTORS.—For a period of 6
months after completion of an initial public offering,
250
neither a stock holding company nor the converted
insurer shall award any stock options or stock
grants to persons who are elected officers or direc-
tors of the mutual holding company, the stock hold-
ing company, or the converted insurer, except with
respect to any such awards or options to which a
person is entitled as a policyholder and as approved
by the State insurance regulator of the transferee
domicile.
(4) CONTRACTUAL RIGHTS.—Upon reorganiza-
tion into a mutual holding company, the contractual
rights of the policyholders are preserved.
(5) FAIR AND EQUITABLE TREATMENT OF POL-
ICYHOLDERS.—The reorganization is approved as
fair and equitable to the policyholders by the insur-
ance regulator of the transferee domicile.
SEC. 313. EFFECT ON STATE LAWS RESTRICTING REDOMES-
TICATION.
(a) IN GENERAL.—Unless otherwise permitted by
this subtitle, State laws of any transferor domicile that
conflict with the purposes and intent of this subtitle are
preempted, including but not limited to—
(1) any law that has the purpose or effect of
impeding the activities of, taking any action against,
or applying any provision of law or regulation to,
251
any insurer or an affiliate of such insurer because
that insurer or any affiliate plans to redomesticate,
or has redomesticated, pursuant to this subtitle;
(2) any law that has the purpose or effect of
impeding the activities of, taking action against, or
applying any provision of law or regulation to, any
insured or any insurance licensee or other inter-
mediary because such person or entity has procured
insurance from or placed insurance with any insurer
or affiliate of such insurer that plans to redomes-
ticate, or has redomesticated, pursuant to this sub-
title, but only to the extent that such law would
treat such insured licensee or other intermediary dif-
ferently than if the person or entity procured insur-
ance from, or placed insurance with, an insured li-
censee or other intermediary which had not redomes-
ticated;
(3) any law that has the purpose or effect of
terminating, because of the redomestication of a mu-
tual insurer pursuant to this subtitle, any certificate
of authority, agent appointment or license, rate ap-
proval, or other approval, of any State insurance
regulator or other State authority in existence imme-
diately prior to the redomestication in any State
other than the transferee domicile.
252
(b) DIFFERENTIAL TREATMENT PROHIBITED.—No
State law, regulation, interpretation, or functional equiva-
lent thereof, of a State other than a transferee domicile
may treat a redomesticating or redomesticated insurer or
any affiliate thereof any differently than an insurer oper-
ating in that State that is not a redomesticating or re-
domesticated insurer.
(c) LAWS PROHIBITING OPERATIONS.—If any li-
censed State fails to issue, delays the issuance of, or seeks
to revoke an original or renewal certificate of authority
of a redomesticated insurer immediately following re-
domestication, except on grounds and in a manner consist-
ent with its past practices regarding the issuance of cer-
tificates of authority to foreign insurers that are not re-
domesticating, then the redomesticating insurer shall be
exempt from any State law of the licensed State to the
extent that such State law or the operation of such State
law would make unlawful, or regulate, directly or indi-
rectly, the operation of the redomesticated insurer, except
that such licensed State may require the redomesticated
insurer to—
(1) comply with the unfair claim settlement
practices law of the licensed State;
(2) pay, on a nondiscriminatory basis, applica-
ble premium and other taxes which are levied on li-
253
censed insurers or policyholders under the laws of
the licensed State;
(3) register with and designate the State insur-
ance regulator as its agent solely for the purpose of
receiving service of legal documents or process;
(4) submit to an examination by the State in-
surance regulator in any licensed state in which the
redomesticated insurer is doing business to deter-
mine the insurer’s financial condition, if—
(A) the State insurance regulator of the
transferee domicile has not begun an examina-
tion of the redomesticated insurer and has not
scheduled such an examination to begin before
the end of the 1-year period beginning on the
date of the redomestication; and
(B) any such examination is coordinated to
avoid unjustified duplication and repetition;
(5) comply with a lawful order issued in—
(A) a delinquency proceeding commenced
by the State insurance regulator of any licensed
State if there has been a judicial finding of fi-
nancial impairment under paragraph (7); or
(B) a voluntary dissolution proceeding;
(6) comply with any State law regarding decep-
tive, false, or fraudulent acts or practices, except
254
that if the licensed State seeks an injunction regard-
ing the conduct described in this paragraph, such in-
junction must be obtained from a court of competent
jurisdiction as provided in section 314(a);
(7) comply with an injunction issued by a court
of competent jurisdiction, upon a petition by the
State insurance regulator alleging that the redomes-
ticating insurer is in hazardous financial condition
or is financially impaired;
(8) participate in any insurance insolvency
guaranty association on the same basis as any other
insurer licensed in the licensed State; and
(9) require a person acting, or offering to act,
as an insurance licensee for a redomesticated insurer
in the licensed State to obtain a license from that
State, except that such State may not impose any
qualification or requirement that discriminates
against a nonresident insurance licensee.
SEC. 314. OTHER PROVISIONS.
(a) JUDICIAL REVIEW.—The appropriate United
States district court shall have exclusive jurisdiction over
litigation arising under this section involving any redomes-
ticating or redomesticated insurer.
(b) SEVERABILITY.—If any provision of this section,
or the application thereof to any person or circumstances,
255
is held invalid, the remainder of the section, and the appli-
cation of such provision to other persons or circumstances,
shall not be affected thereby.
SEC. 315. DEFINITIONS.
For purposes of this subtitle, the following definitions
shall apply:
(1) COURT
OF
COMPETENT
JURISDICTION.—
The term ‘‘court of competent jurisdiction’’ means a
court authorized pursuant to section 314(a) to adju-
dicate litigation arising under this subtitle.
(2) DOMICILE.—The term ‘‘domicile’’ means
the State in which an insurer is incorporated, char-
tered, or organized.
(3) INSURANCE LICENSEE.—The term ‘‘insur-
ance licensee’’ means any person holding a license
under State law to act as insurance agent, subagent,
broker, or consultant.
(4) 
INSTITUTION.—The 
term 
‘‘institution’’
means a corporation, joint stock company, limited li-
ability company, limited liability partnership, asso-
ciation, trust, partnership, or any similar entity.
(5) LICENSED
STATE.—The term ‘‘licensed
State’’ means any State, the District of Columbia,
American Samoa, Guam, Puerto Rico, or the United
States Virgin Islands in which the redomesticating
256
insurer has a certificate of authority in effect imme-
diately prior to the redomestication.
(6) MUTUAL INSURER.—The term ‘‘mutual in-
surer’’ means a mutual insurer organized under the
laws of any State.
(7) PERSON.—The term ‘‘person’’ means an in-
dividual, institution, government or governmental
agency, State or political subdivision of a State, pub-
lic corporation, board, association, estate, trustee, or
fiduciary, or other similar entity.
(8) POLICYHOLDER.—The term ‘‘policyholder’’
means the owner of a policy issued by a mutual in-
surer, except that, with respect to voting rights, the
term means a member of a mutual insurer or mu-
tual holding company granted the right to vote, as
determined under applicable State law.
(9) REDOMESTICATED
INSURER.—The term
‘‘redomesticated insurer’’ means a mutual insurer
that has redomesticated pursuant to this subtitle.
(10) REDOMESTICATING
INSURER.—The term
‘‘redomesticating insurer’’ means a mutual insurer
that is redomesticating pursuant to this subtitle.
(11) REDOMESTICATION
OR
TRANSFER.—The
terms ‘‘redomestication’’ and ‘‘transfer’’ mean the
257
transfer of the domicile of a mutual insurer from
one State to another State pursuant to this subtitle.
(12) STATE
INSURANCE
REGULATOR.—The
term ‘‘State insurance regulator’’ means the prin-
cipal insurance regulatory authority of a State, the
District of Columbia, American Samoa, Guam,
Puerto Rico, or the United States Virgin Islands.
(13) STATE
LAW.—The term ‘‘State law’’
means the statutes of any State, the District of Co-
lumbia, American Samoa, Guam, Puerto Rico, or the
United States Virgin Islands and any regulation,
order, or requirement prescribed pursuant to any
such statute.
(14) 
TRANSFEREE
DOMICILE.—The 
term
‘‘transferee domicile’’ means the State to which a
mutual insurer is redomesticating pursuant to this
subtitle.
(15) 
TRANSFEROR
DOMICILE.—The 
term
‘‘transferor domicile’’ means the State from which a
mutual insurer is redomesticating pursuant to this
subtitle.
SEC. 316. EFFECTIVE DATE.
This subtitle shall take effect on the date of the en-
actment of this Act.
258
Subtitle C—National Association of
Registered Agents and Brokers
SEC. 321. STATE FLEXIBILITY IN MULTISTATE LICENSING
REFORMS.
(a) IN GENERAL.—The provisions of this subtitle
shall take effect unless by the end of the 3-year period
beginning on the date of the enactment of this Act at least
a majority of the States—
(1) have enacted uniform laws and regulations
governing the licensure of individuals and entities
authorized to sell and solicit the purchase of insur-
ance within the State; or
(2) have enacted reciprocity laws and regula-
tions governing the licensure of nonresident individ-
uals and entities authorized to sell and solicit insur-
ance within those States.
(b) UNIFORMITY REQUIRED.—States shall be deemed
to have established the uniformity necessary to satisfy
subsection (a)(1) if the States—
(1) establish uniform criteria regarding the in-
tegrity, personal qualifications, education, training,
and experience of licensed insurance producers, in-
cluding the qualification and training of sales per-
sonnel in ascertaining the appropriateness of a par-
ticular insurance product for a prospective customer;
259
(2) establish uniform continuing education re-
quirements for licensed insurance producers;
(3) establish uniform ethics course require-
ments for licensed insurance producers in conjunc-
tion with the continuing education requirements
under paragraph (2);
(4) establish uniform criteria to ensure that an
insurance product, including any annuity contract,
sold to a consumer is suitable and appropriate for
the consumer based on financial information dis-
closed by the consumer; and
(5) do not impose any requirement upon any in-
surance producer to be licensed or otherwise quali-
fied to do business as a nonresident that has the ef-
fect of limiting or conditioning that producer’s ac-
tivities because of its residence or place of oper-
ations, except that counter-signature requirements
imposed on nonresident producers shall not be
deemed to have the effect of limiting or conditioning
a producer’s activities because of its residence or
place of operations under this section.
(c) 
RECIPROCITY
REQUIRED.—States 
shall 
be
deemed to have established the reciprocity required to sat-
isfy subsection (a)(2) if the following conditions are met:
260
(1) 
ADMINISTRATIVE
LICENSING
PROCE-
DURES.—At least a majority of the States permit a
producer that has a resident license for selling or so-
liciting the purchase of insurance in its home State
to receive a license to sell or solicit the purchase of
insurance in such majority of States as a non-
resident to the same extent such producer is per-
mitted to sell or solicit the purchase of insurance in
its State, without satisfying any additional require-
ments other than submitting—
(A) a request for licensure;
(B) the application for licensure that the
producer submitted to its home State;
(C) proof that the producer is licensed and
in good standing in its home State; and
(D) the payment of any requisite fee to the
appropriate authority,
if the producer’s home State also awards such li-
censes on such a reciprocal basis.
(2) 
CONTINUING
EDUCATION
REQUIRE-
MENTS.—A majority of the States accept an insur-
ance producer’s satisfaction of its home State’s con-
tinuing education requirements for licensed insur-
ance producers to satisfy the States’ own continuing
education requirements if the producer’s home State
261
also recognizes the satisfaction of continuing edu-
cation requirements on such a reciprocal basis.
(3) NO
LIMITING
NONRESIDENT
REQUIRE-
MENTS.—A majority of the States do not impose
any requirement upon any insurance producer to be
licensed or otherwise qualified to do business as a
nonresident that has the effect of limiting or condi-
tioning that producer’s activities because of its resi-
dence 
or 
place 
of 
operations, 
except 
that
countersignature requirements imposed on non-
resident producers shall not be deemed to have the
effect of limiting or conditioning a producer’s activi-
ties because of its residence or place of operations
under this section.
(4) RECIPROCAL
RECIPROCITY.—Each of the
States that satisfies paragraphs (1), (2), and (3)
grants reciprocity to residents of all of the other
States that satisfy such paragraphs.
(d) DETERMINATION.—
(1) NAIC DETERMINATION.—At the end of the
3-year period beginning on the date of the enact-
ment of this Act, the National Association of Insur-
ance Commissioners shall determine, in consultation
with the insurance commissioners or chief insurance
regulatory officials of the States, whether the uni-
262
formity or reciprocity required by subsections (b)
and (c) has been achieved.
(2) 
JUDICIAL
REVIEW.—The 
appropriate
United States district court shall have exclusive ju-
risdiction over any challenge to the National Asso-
ciation of Insurance Commissioners’ determination
under this section and such court shall apply the
standards set forth in section 706 of title 5, United
States Code, when reviewing any such challenge.
(e) CONTINUED APPLICATION.—If, at any time, the
uniformity or reciprocity required by subsections (b) and
(c) no longer exists, the provisions of this subtitle shall
take effect within 2 years, unless the uniformity or reci-
procity required by those provisions is satisfied before the
expiration of that 2-year period.
(f) SAVINGS PROVISION.—No provision of this sec-
tion shall be construed as requiring that any law, regula-
tion, provision, or action of any State which purports to
regulate insurance producers, including any such law, reg-
ulation, provision, or action which purports to regulate un-
fair trade practices or establish consumer protections, in-
cluding countersignature laws, be altered or amended in
order to satisfy the uniformity or reciprocity required by
subsections (b) and (c), unless any such law, regulation,
provision, or action is inconsistent with a specific require-
263
ment of any such subsection and then only to the extent
of such inconsistency.
SEC. 
322. 
NATIONAL 
ASSOCIATION 
OF 
REGISTERED
AGENTS AND BROKERS.
(a) ESTABLISHMENT.—There is established the Na-
tional Association of Registered Agents and Brokers
(hereafter in this subtitle referred to as the ‘‘Associa-
tion’’).
(b) STATUS.—The Association shall—
(1) be a nonprofit corporation;
(2) have succession until dissolved by an Act of
Congress;
(3) not be an agency or establishment of the
United States Government; and
(4) except as otherwise provided in this Act, be
subject to, and have all the powers conferred upon
a nonprofit corporation by the District of Columbia
Nonprofit Corporation Act (D.C. Code, sec. 29y–
1001 et seq.).
SEC. 323. PURPOSE.
The purpose of the Association shall be to provide
a mechanism through which uniform licensing, appoint-
ment, continuing education, and other insurance producer
sales qualification requirements and conditions can be
adopted and applied on a multistate basis, while preserv-
264
ing the right of States to license, supervise, and discipline
insurance producers and to prescribe and enforce laws and
regulations with regard to insurance-related consumer
protection and unfair trade practices.
SEC. 324. RELATIONSHIP TO THE FEDERAL GOVERNMENT.
The Association shall be subject to the supervision
and oversight of the National Association of Insurance
Commissioners (hereafter in this subtitle referred to as the
‘‘NAIC’’) and shall not be an agency or an instrumentality
of the United States Government.
SEC. 325. MEMBERSHIP.
(a) ELIGIBILITY.—
(1) IN GENERAL.—Any State-licensed insurance
producer shall be eligible to become a member in the
Association.
(2) INELIGIBILITY FOR SUSPENSION OR REV-
OCATION OF LICENSE.—Notwithstanding paragraph
(1), a State-licensed insurance producer shall not be
eligible to become a member if a State insurance
regulator has suspended or revoked such producer’s
license in that State during the 3-year preceding the
date such producer applies for membership.
(3) RESUMPTION OF ELIGIBILITY.—Paragraph
(2) shall cease to apply to any insurance producer
if—
265
(A) the State insurance regulator renews
the license of such producer in the State in
which the license was suspended or revoked; or
(B) the suspension or revocation is subse-
quently overturned.
(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRI-
TERIA.—The Association shall have the authority to estab-
lish membership criteria that—
(1) bear a reasonable relationship to the pur-
poses for which the Association was established; and
(2) do not unfairly limit the access of smaller
agencies to the Association membership.
(c) 
ESTABLISHMENT
OF
CLASSES
AND
CAT-
EGORIES.—
(1) CLASSES OF MEMBERSHIP.—The Associa-
tion may establish separate classes of membership,
with separate criteria, if the Association reasonably
determines that performance of different duties re-
quires different levels of education, training, or expe-
rience.
(2) CATEGORIES.—The Association may estab-
lish separate categories of membership for individ-
uals and for other persons. The establishment of any
such categories of membership shall be based either
on the types of licensing categories that exist under
266
State laws or on the aggregate amount of business
handled by an insurance producer. No special cat-
egories of membership, and no distinct membership
criteria, shall be established for members which are
insured depository institutions or wholesale financial
institutions or for their employees, agents, or affili-
ates.
(d) MEMBERSHIP CRITERIA.—
(1) IN GENERAL.—The Association may estab-
lish criteria for membership which shall include
standards for integrity, personal qualifications, edu-
cation, training, and experience.
(2) MINIMUM STANDARD.—In establishing cri-
teria under paragraph (1), the Association shall con-
sider the highest levels of insurance producer quali-
fications established under the licensing laws of the
States.
(e) EFFECT OF MEMBERSHIP.—Membership in the
Association shall entitle the member to licensure in each
State for which the member pays the requisite fees, includ-
ing licensing fees and, where applicable, bonding require-
ments, set by such State.
(f) ANNUAL RENEWAL.—Membership in the Associa-
tion shall be renewed on an annual basis.
267
(g) CONTINUING EDUCATION.—The Association shall
establish, as a condition of membership, continuing edu-
cation requirements which shall be comparable to or great-
er than the continuing education requirements under the
licensing laws of a majority of the States.
(h) SUSPENSION AND REVOCATION.—The Associa-
tion may—
(1) inspect and examine the records and offices
of the members of the Association to determine com-
pliance with the criteria for membership established
by the Association; and
(2) suspend or revoke the membership of an in-
surance producer if—
(A) the producer fails to meet the applica-
ble membership criteria of the Association; or
(B) the producer has been subject to dis-
ciplinary action pursuant to a final adjudicatory
proceeding under the jurisdiction of a State in-
surance regulator, and the Association con-
cludes that retention of membership in the As-
sociation would not be in the public interest.
(i) OFFICE OF CONSUMER COMPLAINTS.—
(1) IN GENERAL.—The Association shall estab-
lish an office of consumer complaints that shall—
268
(A) receive and investigate complaints
from both consumers and State insurance regu-
lators related to members of the Association;
and
(B) recommend to the Association any dis-
ciplinary actions that the office considers appro-
priate, to the extent that any such rec-
ommendation is not inconsistent with State law.
(2) RECORDS AND REFERRALS.—The office of
consumer complaints of the Association shall—
(A) maintain records of all complaints re-
ceived in accordance with paragraph (1) and
make such records available to the NAIC and
to each State insurance regulator for the State
of residence of the consumer who filed the com-
plaint; and
(B) refer, when appropriate, any such com-
plaint to any appropriate State insurance regu-
lator.
(3) TELEPHONE AND OTHER ACCESS.—The of-
fice of consumer complaints shall maintain a toll-free
telephone number for the purpose of this subsection
and, as practicable, other alternative means of com-
munication with consumers, such as an Internet
home page.
269
SEC. 326. BOARD OF DIRECTORS.
(a) ESTABLISHMENT.—There is established the
board of directors of the Association (hereafter in this sub-
title referred to as the ‘‘Board’’) for the purpose of govern-
ing and supervising the activities of the Association and
the members of the Association.
(b) POWERS.—The Board shall have such powers and
authority as may be specified in the bylaws of the Associa-
tion.
(c) COMPOSITION.—
(1) MEMBERS.—The Board shall be composed
of 7 members appointed by the NAIC.
(2) REQUIREMENT.—At least 4 of the members
of the Board shall have significant experience with
the regulation of commercial lines of insurance in at
least 1 of the 20 States in which the greatest total
dollar amount of commercial-lines insurance is
placed in the United States.
(3) INITIAL BOARD MEMBERSHIP.—
(A) IN GENERAL.—If, by the end of the 2-
year period beginning on the date of the enact-
ment of this Act, the NAIC has not appointed
the initial 7 members of the Board of the Asso-
ciation, the initial Board shall consist of the 7
State insurance regulators of the 7 States with
the greatest total dollar amount of commercial-
270
lines insurance in place as of the end of such
period.
(B) ALTERNATE COMPOSITION.—If any of
the State insurance regulators described in sub-
paragraph (A) declines to serve on the Board,
the State insurance regulator with the next
greatest total dollar amount of commercial-lines
insurance in place, as determined by the NAIC
as of the end of such period, shall serve as a
member of the Board.
(C) INOPERABILITY.—If fewer than 7
State insurance regulators accept appointment
to the Board, the Association shall be estab-
lished without NAIC oversight pursuant to sec-
tion 332.
(d) TERMS.—The term of each director shall, after
the initial appointment of the members of the Board, be
for 3 years, with 1⁄3 of the directors to be appointed each
year.
(e) BOARD VACANCIES.—A vacancy on the Board
shall be filled in the same manner as the original appoint-
ment of the initial Board for the remainder of the term
of the vacating member.
271
(f) MEETINGS.—The Board shall meet at the call of
the chairperson, or as otherwise provided by the bylaws
of the Association.
SEC. 327. OFFICERS.
(a) IN GENERAL.—
(1) POSITIONS.—The officers of the Association
shall consist of a chairperson and a vice chairperson
of the Board, a president, secretary, and treasurer
of the Association, and such other officers and as-
sistant officers as may be deemed necessary.
(2) MANNER OF SELECTION.—Each officer of
the Board and the Association shall be elected or ap-
pointed at such time and in such manner and for
such terms not exceeding 3 years as may be pre-
scribed in the bylaws of the Association.
(b) CRITERIA FOR CHAIRPERSON.— Only individuals
who are members of the National Association of Insurance
Commissioners shall be eligible to serve as the chairperson
of the board of directors.
SEC. 328. BYLAWS, RULES, AND DISCIPLINARY ACTION.
(a) ADOPTION AND AMENDMENT OF BYLAWS.—
(1) COPY REQUIRED TO BE FILED WITH THE
NAIC.—The board of directors of the Association
shall file with the NAIC a copy of the proposed by-
laws or any proposed amendment to the bylaws, ac-
272
companied by a concise general statement of the
basis and purpose of such proposal.
(2) EFFECTIVE DATE.—Except as provided in
paragraph (3), any proposed bylaw or proposed
amendment shall take effect—
(A) 30 days after the date of the filing of
a copy with the NAIC;
(B) upon such later date as the Associa-
tion may designate; or
(C) such earlier date as the NAIC may de-
termine.
(3) DISAPPROVAL
BY
THE
NAIC.—Notwith-
standing paragraph (2), a proposed bylaw or amend-
ment shall not take effect if, after public notice and
opportunity to participate in a public hearing—
(A) the NAIC disapproves such proposal as
being contrary to the public interest or contrary
to the purposes of this subtitle and provides no-
tice to the Association setting forth the reasons
for such disapproval; or
(B) the NAIC finds that such proposal in-
volves a matter of such significant public inter-
est that public comment should be obtained, in
which case it may, after notifying the Associa-
tion in writing of such finding, require that the
273
procedures set forth in subsection (b) be fol-
lowed with respect to such proposal, in the
same manner as if such proposed bylaw change
were a proposed rule change within the mean-
ing of such paragraph.
(b) ADOPTION AND AMENDMENT OF RULES.—
(1) FILING PROPOSED REGULATIONS WITH THE
NAIC.—
(A) IN GENERAL.—The board of directors
of the Association shall file with the NAIC a
copy of any proposed rule or any proposed
amendment to a rule of the Association which
shall be accompanied by a concise general state-
ment of the basis and purpose of such proposal.
(B) OTHER RULES AND AMENDMENTS IN-
EFFECTIVE.—No proposed rule or amendment
shall take effect unless approved by the NAIC
or otherwise permitted in accordance with this
paragraph.
(2) INITIAL CONSIDERATION BY THE NAIC.—
Within 35 days after the date of publication of no-
tice of filing of a proposal, or before the end of such
longer period not to exceed 90 days as the NAIC
may designate after such date if the NAIC finds
such longer period to be appropriate and sets forth
274
its reasons for so finding, or as to which the Asso-
ciation consents, the NAIC shall—
(A) by order approve such proposed rule or
amendment; or
(B) institute proceedings to determine
whether such proposed rule or amendment
should be modified or disapproved.
(3) NAIC PROCEEDINGS.—
(A) IN GENERAL.—Proceedings instituted
by the NAIC with respect to a proposed rule or
amendment pursuant to paragraph (2) shall—
(i) include notice of the grounds for
disapproval under consideration;
(ii) provide opportunity for hearing;
and
(iii) be concluded within 180 days
after the date of the Association’s filing of
such proposed rule or amendment.
(B) DISPOSITION OF PROPOSAL.—At the
conclusion of any proceeding under subpara-
graph (A), the NAIC shall, by order, approve or
disapprove the proposed rule or amendment.
(C) EXTENSION OF TIME FOR CONSIDER-
ATION.—The NAIC may extend the time for
275
concluding any proceeding under subparagraph
(A) for—
(i) not more than 60 days if the
NAIC finds good cause for such extension
and sets forth its reasons for so finding; or
(ii) for such longer period as to which
the Association consents.
(4) STANDARDS FOR REVIEW.—
(A) GROUNDS FOR APPROVAL.—The NAIC
shall approve a proposed rule or amendment if
the NAIC finds that the rule or amendment is
in the public interest and is consistent with the
purposes of this Act.
(B) APPROVAL BEFORE END OF NOTICE
PERIOD.—The NAIC shall not approve any pro-
posed rule before the end of the 30-day period
beginning on the date the Association files pro-
posed rules or amendments in accordance with
paragraph (1) unless the NAIC finds good
cause for so doing and sets forth the reasons
for so finding.
(5) ALTERNATE PROCEDURE.—
(A) IN
GENERAL.—Notwithstanding any
provision of this subsection other than subpara-
graph (B), a proposed rule or amendment relat-
276
ing to the administration or organization of the
Association may take effect—
(i) upon the date of filing with the
NAIC, if such proposed rule or amendment
is designated by the Association as relating
solely to matters which the NAIC, consist-
ent with the public interest and the pur-
poses of this subsection, determines by rule
do not require the procedures set forth in
this paragraph; or
(ii) upon such date as the NAIC shall
for good cause determine.
(B) ABROGATION BY THE NAIC.—
(i) IN GENERAL.—At any time within
60 days after the date of filing of any pro-
posed rule or amendment under subpara-
graph (A)(i) or (B)(ii), the NAIC may re-
peal such rule or amendment and require
that the rule or amendment be refiled and
reviewed in accordance with this para-
graph, if the NAIC finds that such action
is necessary or appropriate in the public
interest, for the protection of insurance
producers or policyholders, or otherwise in
furtherance of the purposes of this subtitle.
277
(ii) EFFECT OF RECONSIDERATION BY
THE NAIC.—Any action of the NAIC pur-
suant to clause (i) shall—
(I) not affect the validity or force
of a rule change during the period
such rule or amendment was in effect;
and
(II) not be considered to be final
action.
(c) ACTION REQUIRED BY THE NAIC.—The NAIC
may, in accordance with such rules as the NAIC deter-
mines to be necessary or appropriate to the public interest
or to carry out the purposes of this subtitle, require the
Association to adopt, amend, or repeal any bylaw, rule or
amendment of the Association, whenever adopted.
(d) DISCIPLINARY ACTION BY THE ASSOCIATION.—
(1) SPECIFICATION OF CHARGES.—In any pro-
ceeding to determine whether membership shall be
denied, suspended, revoked, and not renewed (here-
after in this section referred to as a ‘‘disciplinary ac-
tion’’), the Association shall bring specific charges,
notify such member of such charges and give the
member an opportunity to defend against the
charges, and keep a record.
278
(2) SUPPORTING
STATEMENT.—A determina-
tion to take disciplinary action shall be supported by
a statement setting forth—
(A) any act or practice in which such
member has been found to have been engaged;
(B) the specific provision of this subtitle,
the rules or regulations under this subtitle, or
the rules of the Association which any such act
or practice is deemed to violate; and
(C) the sanction imposed and the reason
for such sanction.
(e) NAIC REVIEW OF DISCIPLINARY ACTION.—
(1) NOTICE TO THE NAIC.—If the Association
orders any disciplinary action, the Association shall
promptly notify the NAIC of such action.
(2) REVIEW BY THE NAIC.—Any disciplinary
action taken by the Association shall be subject to
review by the NAIC—
(A) on the NAIC’s own motion; or
(B) upon application by any person ag-
grieved by such action if such application is
filed with the NAIC not more than 30 days
after the later of—
(i) the date the notice was filed with
the NAIC pursuant to paragraph (1); or
279
(ii) the date the notice of the discipli-
nary action was received by such aggrieved
person.
(f) EFFECT OF REVIEW.—The filing of an applica-
tion to the NAIC for review of a disciplinary action, or
the institution of review by the NAIC on the NAIC’s own
motion, shall not operate as a stay of disciplinary action
unless the NAIC otherwise orders.
(g) SCOPE OF REVIEW.—
(A) IN GENERAL.—In any proceeding to
review such action, after notice and the oppor-
tunity for hearing, the NAIC shall—
(i) determine whether the action
should be taken;
(ii) affirm, modify, or rescind the dis-
ciplinary sanction; or
(iii) remand to the Association for
further proceedings.
(B) DISMISSAL
OF
REVIEW.—The NAIC
may dismiss a proceeding to review disciplinary
action if the NAIC finds that—
(i) the specific grounds on which the
action is based exist in fact;
(ii) the action is in accordance with
applicable rules and regulations; and
280
(iii) such rules and regulations are,
and were, applied in a manner consistent
with the purposes of this Act.
SEC. 329. ASSESSMENTS.
(a) INSURANCE PRODUCERS SUBJECT TO ASSESS-
MENT.—The Association may establish such application
and membership fees as the Association finds necessary
to cover the costs of its operations, including fees made
reimbursable to the NAIC under subsection (b), except
that, in setting such fees, the Association may not dis-
criminate against smaller insurance producers.
(b) NAIC ASSESSMENTS.—The NAIC may assess the
Association for any costs it incurs under this subtitle.
SEC. 330. FUNCTIONS OF THE NAIC.
(a) ADMINISTRATIVE PROCEDURE.—Determinations
of the NAIC, for purposes of making rules pursuant to
section 328, shall be made after appropriate notice and
opportunity for a hearing and for submission of views of
interested persons.
(b) EXAMINATIONS AND REPORTS.—
(1) The NAIC may make such examinations
and inspections of the Association and require the
Association to furnish it with such reports and
records or copies thereof as the NAIC may consider
281
necessary or appropriate in the public interest or to
effectuate the purposes of this subtitle.
(2) As soon as practicable after the close of
each fiscal year, the Association shall submit to the
NAIC a written report regarding the conduct of its
business, and the exercise of the other rights and
powers granted by this subtitle, during such fiscal
year. Such report shall include financial statements
setting forth the financial position of the Association
at the end of such fiscal year and the results of its
operations (including the source and application of
its funds) for such fiscal year. The NAIC shall
transmit such report to the President and the Con-
gress with such comment thereon as the NAIC de-
termines to be appropriate.
SEC. 331. LIABILITY OF THE ASSOCIATION AND THE DIREC-
TORS, OFFICERS, AND EMPLOYEES OF THE
ASSOCIATION.
(a) IN GENERAL.—The Association shall not be
deemed to be an insurer or insurance producer within the
meaning of any State law, rule, regulation, or order regu-
lating or taxing insurers, insurance producers, or other en-
tities engaged in the business of insurance, including pro-
visions imposing premium taxes, regulating insurer sol-
vency or financial condition, establishing guaranty funds
282
and levying assessments, or requiring claims settlement
practices.
(b) LIABILITY OF THE ASSOCIATION, ITS DIREC-
TORS, OFFICERS, AND EMPLOYEES.—Neither the Associa-
tion nor any of its directors, officers, or employees shall
have any liability to any person for any action taken or
omitted in good faith under or in connection with any mat-
ter subject to this subtitle.
SEC. 332. ELIMINATION OF NAIC OVERSIGHT.
(a) IN GENERAL.—The Association shall be estab-
lished without NAIC oversight and the provisions set forth
in section 324, subsections (a), (b), (c), and (e) of section
328, and sections 329(b) and 330 of this subtitle shall
cease to be effective if, at the end of the 2-year period
after the date on which the provisions of this subtitle take
effect pursuant to section 321—
(1) at least a majority of the States represent-
ing at least 50 percent of the total United States
commercial-lines insurance premiums have not satis-
fied the uniformity or reciprocity requirements of
subsections (a) and (b) of section 321; and
(2) the NAIC has not approved the Associa-
tion’s bylaws as required by section 328, the NAIC
is unable to operate or supervise the Association, or
283
the Association is not conducting its activities as re-
quired under this Act.
(b) BOARD APPOINTMENTS.—If the repeals required
by subsection (a) are implemented—
(1) GENERAL
APPOINTMENT
POWER.—The
President, with the advice and consent of the United
States Senate, shall appoint the members of the As-
sociation’s Board established under section 326 from
lists of candidates recommended to the President by
the National Association of Insurance Commis-
sioners.
(2) PROCEDURES
FOR
OBTAINING
NATIONAL
ASSOCIATION
OF
INSURANCE
COMMISSIONERS
AP-
POINTMENT RECOMMENDATIONS.—
(A) INITIAL
DETERMINATION
AND
REC-
OMMENDATIONS.—After the date on which the
provisions of part a of this section take effect,
then the National Association of Insurance
Commissioners shall have 60 days to provide a
list of recommended candidates to the Presi-
dent. If the National Association of Insurance
Commissioners fails to provide a list by that
date, or if any list that is provided does not in-
clude at least 14 recommended candidates or
comply with the requirements of section 326(c),
284
the President shall, with the advice and consent
of the United States Senate, make the requisite
appointments without considering the views of
the NAIC.
(B) SUBSEQUENT APPOINTMENTS.—After
the initial appointments, the National Associa-
tion of Insurance Commissioners shall provide a
list of at least 6 recommended candidates for
the Board to the President by January 15 of
each subsequent year. If the National Associa-
tion of Insurance Commissioners fails to pro-
vide a list by that date, or if any list that is
provided does not include at least 6 rec-
ommended candidates or comply with the re-
quirements of section 326(c), the President,
with the advice and consent of the Senate, shall
make the requisite appointments without con-
sidering the views of the NAIC.
(C) PRESIDENTIAL OVERSIGHT.—
(i) REMOVAL.—If the President deter-
mines that the Association is not acting in
the interests of the public, the President
may remove the entire existing Board for
the remainder of the term to which the
members of the Board were appointed and
285
appoint, with the advice and consent of the
Senate, new members to fill the vacancies
on the Board for the remainder of such
terms.
(ii) SUSPENSION
OF
RULES
OR
AC-
TIONS.—The President, or a person des-
ignated by the President for such purpose,
may suspend the effectiveness of any rule,
or prohibit any action, of the Association
which the President or the designee deter-
mines is contrary to the public interest.
(d) ANNUAL REPORT.—As soon as practicable after
the close of each fiscal year, the Association shall submit
to the President and to Congress a written report relative
to the conduct of its business, and the exercise of the other
rights and powers granted by this subtitle, during such
fiscal year. Such report shall include financial statements
setting forth the financial position of the Association at
the end of such fiscal year and the results of its operations
(including the source and application of its funds) for such
fiscal year.
SEC. 333. RELATIONSHIP TO STATE LAW.
(a) PREEMPTION OF STATE LAWS.—State laws, reg-
ulations, provisions, or actions purporting to regulate in-
286
surance producers shall be preempted in the following in-
stances:
(1) No State shall impede the activities of, take
any action against, or apply any provision of law or
regulation to, any insurance producer because that
insurance producer or any affiliate plans to become,
has applied to become, or is a member of the Asso-
ciation.
(2) No State shall impose any requirement
upon a member of the Association that it pay dif-
ferent fees to be licensed or otherwise qualified to do
business in that State, including bonding require-
ments, based on its residency.
(3) No State shall impose any licensing, ap-
pointment, integrity, personal or corporate qualifica-
tions, education, training, experience, residency, or
continuing education requirement upon a member of
the Association that is different than the criteria for
membership in the Association or renewal of such
membership, except that counter-signature require-
ments imposed on nonresident producers shall not be
deemed to have the effect of limiting or conditioning
a producer’s activities because of its residence or
place of operations under this section.
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(4) No State shall implement the procedures of
such State’s system of licensing or renewing the li-
censes of insurance producers in a manner different
from the authority of the Association under section
325.
(b) SAVINGS PROVISION.—Except as provided in sub-
section (a), no provision of this section shall be construed
as altering or affecting the continuing effectiveness of any
law, regulation, provision, or action of any State which
purports to regulate insurance producers, including any
such law, regulation, provision, or action which purports
to regulate unfair trade practices or establish consumer
protections, including, but not limited to, countersignature
laws.
SEC. 334. COORDINATION WITH OTHER REGULATORS.
(a) COORDINATION WITH STATE INSURANCE REGU-
LATORS.—The Association shall have the authority to—
(1) issue uniform insurance producer applica-
tions and renewal applications that may be used to
apply for the issuance or removal of State licenses,
while preserving the ability of each State to impose
such conditions on the issuance or renewal of a li-
cense as are consistent with section 333;
(2) establish a central clearinghouse through
which members of the Association may apply for the