Insurance Disclosure Act of 1995

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Insurance Disclosure Act of 1995''.

SEC. 2. DISCLOSURES BY INSURERS TO APPLICANTS.

    (a) Requirement To Provide Written Explanation or Notice of 
Declination.--The Secretary of Housing and Urban Development shall, by 
regulation, require that each insurer who, through the insurer, or an 
agent or broker, declines a written application or written request to 
issue an insurance policy under a designated line shall provide to the 
applicant at the time of such declination, through such insurer, agent, 
or broker, one of the following:
            (1) A written explanation of the specific reasons for the 
        declination.
            (2) Written notice that (A) the applicant may submit to the 
        insurer, agent, or broker, within 90 days of such notice, a 
        written request for a written explanation of the reasons for 
        the declination, and (B) pursuant to such a request, an 
        explanation shall be provided to the applicant within 21 days 
        after receipt of such request.
    (b) Response to Request for Explanation.--If an insurer, agent, or 
broker making a declination receives a written request referred to in 
subsection (a)(2) within such 90-day period, the insurer, agent, or 
broker shall provide a written explanation referred to in such 
subsection within such 21-day period.

SEC. 3. DISCLOSURES BY INSURERS TO POLICYHOLDERS.

    The Secretary of Housing and Urban Development shall, by 
regulation, require that each insurer who cancels or refuses to renew 
an insurance policy under a designated line shall provide to the 
policyholder, in writing and within an appropriate period of time as 
determined by the Secretary, the reasons for canceling or refusing to 
renew the policy.

SEC. 4. CONSIDERATION OF MODEL ACTS.

    In issuing regulations under sections 2 and 3, the Secretary shall 
consider relevant portions of model acts developed by the National 
Association of Insurance Commissioners.

SEC. 5. EFFECT ON STATE LAWS.

    Sections 2 and 3 shall not be construed to annul, alter, or effect, 
or exempt any insurer, agent, or broker subject to the provisions of 
such sections from complying with any laws or requirements of any State 
with respect to notifying insurance applicants or policyholders of the 
reasons for declination or cancellation of, or refusal to renew 
insurance, except to the extent that such laws or requirements are 
inconsistent with such sections (or the regulations issued thereunder) 
and then only to the extent of such inconsistency. The Secretary is 
authorized to determine whether such inconsistencies exist and to 
resolve issues regarding such inconsistencies. The Secretary may not 
provide that any State law or requirement is inconsistent with section 
2 or 3 if it imposes requirements equivalent to the requirements under 
such sections or requirements that are more stringent or comprehensive, 
in the determination of the Secretary.

SEC. 6. IMMUNITY.

    In issuing regulations under sections 2 and 3, the Secretary shall 
specifically consider the necessity of providing insurers, agents, and 
brokers immunity solely for the act of conveying or communicating the 
reasons for a declination or cancellation of, or refusal to renew 
insurance on behalf of a principal making such decision. The Secretary 
may provide for immunity under the regulations issued under sections 2 
and 3 if the Secretary determines that such a provision is necessary 
and in the public interest, except that the Secretary may not provide 
immunity for any conduct that is negligent, reckless, or willful.

SEC. 7. DESIGNATION OF LINES OF INSURANCE.

    (a) In General.--The Secretary shall, by regulation, designate 
lines of insurance as designated lines for purposes of this Act, as 
follows:
            (1) Automobile.--The Secretary shall designate private 
        passenger automobile insurance and shall also designate any 
        sublines and coverage types of private passenger automobile 
        insurance that the Secretary considers appropriate for purposes 
        of this Act.
            (2) Noncommercial insurance for residential property.--The 
        Secretary shall designate homeowners insurance and dwelling 
        fire and allied lines, and shall distinguish the coverage types 
        in such lines by the perils covered and by market or 
        replacement value, as the Secretary considers appropriate for 
        purposes of this Act. For purposes of this Act, homeowners 
        insurance shall not include any renters coverage or coverage 
        for the personal property of a condominium owner.
    (b) Report.--At any time the Secretary determines that any line of 
insurance not described in subsection (a) should be a designated line 
because disparities in coverage provided under such line exist among 
geographic areas having different income levels or racial composition, 
the Secretary shall submit a report to the Congress recommending 
designating such line of insurance as a designated line for purposes of 
this Act.
    (c) Duration.--
            (1) In general.--Except as provided in paragraph (2), the 
        Secretary shall make the designations under this section once 
        every 5 years, by regulation, and each line and subline or 
        coverage type designated under such regulations shall be 
        designated for the 5-year period beginning upon the issuance of 
such regulations.
            (2) Alteration.--During any 5-year period referred to in 
        paragraph (1) in which designations are in effect, the 
        Secretary may amend or revise the designated lines, sublines, 
        and coverage types only by regulation and only in accordance 
        with the requirements of this section. Such regulations 
        amending or revising designations shall apply only to that 
        portion of the 5-year period during which such amendment or 
        revision is made that remains after the expiration of the 6-
        month period beginning on the date of issuance of the 
        regulations.
    (d) Timing of Designations.--The Secretary shall make the 
designations required by subsection (c)(1) and notify interested 
parties during the 6-month period ending 6 months before the 
commencement of the 5-year period to which such designations apply.
    (e) Obtaining Information.--The Secretary may require insurers to 
submit to the Secretary such information as the Secretary considers 
necessary to make designations specifically required under this 
section. The Secretary may not require insurers to submit any 
information under this subsection that relates to any line of insurance 
not specifically authorized to be designated pursuant to this section 
or that is to be used solely for the purpose of a report under 
subsection (b).

SEC. 8. STATE ENFORCEMENT.

    The Secretary may authorize the States to enforce the requirements 
under regulations issued under sections 2 and 3.

SEC. 9. ENFORCEMENT.

    (a) Civil Penalties.--Any insurer who is determined by the 
Secretary, after providing opportunity for a hearing on the record, to 
have violated any requirement pursuant to this Act shall be subject to 
a civil penalty of not to exceed $5,000 for each day during which such 
violation continues.
    (b) Injunction.--The Secretary may bring an action in an 
appropriate United States district court for appropriate declaratory 
and injunctive relief against any insurer who violates the requirements 
referred to in subsection (a).

SEC. 10. DEFINITIONS.

    For purposes of this Act:
            (1) Agent.--The term ``agent'' means, with respect to an 
        insurer, an agent licensed by a State who sells property and 
        casualty insurance. The term includes agents who are employees 
        of the insurer, agents who are independent contractors working 
        exclusively for the insurer, and agents who are independent 
        contractors appointed to represent the insurer on a 
        nonexclusive basis.
            (2) Designated line.--The term ``designated line'' means a 
        line of insurance designated by the Secretary under section 7.
            (3) Insurance.--The term ``insurance'' means property and 
        casualty insurance. Such term includes primary insurance, 
        surplus lines insurance, and any other arrangement for the 
        shifting and distributing of risks that is determined to be 
        insurance under the law of any State in which the insurer or 
        insurer group engages in an insurance business.
            (4) Insurer.--The term ``insurer'' means any corporation, 
        association, society, order, firm, company, mutual, 
        partnership, individual, aggregation of individuals, or any 
        other legal entity that is authorized to transact the business 
        of property or casualty insurance in any State or that is 
        engaged in a property or casualty insurance business. The term 
        does not include an individual or entity which represents an 
        insurer as agent solely for the purpose of selling or which 
        represents a consumer as a broker solely for the purpose of 
        buying insurance.
            (5) Property and casualty insurance.--The term ``property 
        and casualty insurance'' 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. Such term does 
        not include workers' compensation, professional liability, or 
        title insurance.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (7) State.--The term ``State'' means any State, the 
        District of Columbia, the Commonwealth of Puerto Rico, the 
        Northern Mariana Islands, the Virgin Islands, American Samoa, 
        and the Trust Territory of the Pacific Islands.

SEC. 11. REGULATIONS.

    (a) In General.--The Secretary shall issue any regulations required 
under this Act and any other regulations that may be necessary to carry 
out this Act. The regulations shall be issued through rulemaking in 
accordance with the procedures under section 553 of title 5, United 
States Code, for substantive rules. Except as otherwise provided in 
this Act, the final regulations to carry out this Act shall be issued 
not later than the expiration of the 18-month period beginning on the 
date of the enactment of this Act and shall take effect upon issuance.
    (b) Burdens.--In prescribing such regulations, the Secretary shall 
take into consideration the administrative, paperwork, and other 
burdens on insurance agents, including independent insurance agents, 
involved in complying with the requirements of this Act and shall 
minimize the burdens imposed by such requirements with respect to such 
agents.

Summary: Insurance Disclosure Act of 1995 - Instructs the Secretary of Housing and Urban Development to require insurers to provide written disclosures to applicants and policyholders, stating the reasons for: (1) declining a written application; or (2) cancelling or refusing to renew an existing policy. 
Authorizes the Secretary to provide immunity to insurers, agents, and brokers regarding their communication of a cancellation, denial, or nonrenewal of insurance. 
Prescribes guidelines under which the Secretary shall designate certain lines of insurance. 
Sets forth enforcement guidelines, including civil penalties and injunctive relief.