Title: State Insurance Regulation Preservation Act
Policy area: Finance and Financial Sector

Summary:
State Insurance Regulation Preservation Act
This bill amends the Home Owners' Loan Act to limit the applicability of reporting and filing requirements for insurance savings and loan holding companies (ISLHCs). Such holding companies shall also be exempt from requirements relating to examination and supervision by the Federal Reserve Board (FRB) if they meet certain state and federal capital requirements. Certain FRB regulations as applied to ISLHCs must be tailored to the insurance business and applicable state insurance requirements.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5059 Introduced in House (IH)]

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115th CONGRESS
  2d Session
                                H. R. 5059

To amend the Home Owners' Loan Act with respect to the registration and 
 supervision of insurance savings and loan holding companies, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 15, 2018

  Mr. Rothfus (for himself and Mrs. Beatty) introduced the following 
    bill; which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To amend the Home Owners' Loan Act with respect to the registration and 
 supervision of insurance savings and loan holding companies, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``State Insurance Regulation 
Preservation Act''.

SEC. 2. SUPERVISION OF INSURANCE SAVINGS AND LOAN HOLDING COMPANIES.

    (a) Definitions.--Section 10(a)(1) of the Home Owners' Loan Act (12 
U.S.C. 1467a(a)(1)) is amended by adding at the end the following:
                    ``(K) Insurance savings and loan holding company.--
                The term `insurance savings and loan holding company' 
                means--
                            ``(i) a top-tier savings and loan holding 
                        company that is an insurance underwriting 
                        company;
                            ``(ii) a savings and loan holding company 
                        that held 75 percent or more of its total 
                        consolidated assets in an insurance 
                        underwriting company or insurance underwriting 
                        companies, other than assets associated with 
                        insurance for credit risk, during the 4 most 
                        recent consecutive quarters, as calculated in 
                        accordance with generally accepted accounting 
                        principles or the Statutory Accounting 
                        Principles of the National Association of 
                        Insurance Commissioners, as applicable; or
                            ``(iii) a top-tier savings and loan holding 
                        company that--
                                    ``(I) was registered as a savings 
                                and loan holding company before July 
                                21, 2010; and
                                    ``(II) is a New York not-for-profit 
                                corporation formed for the purpose of 
                                holding the stock of a New York 
                                insurance company.
                    ``(L) Insurance underwriting company.--The term 
                `insurance underwriting company' means an entity that 
                is--
                            ``(i) engaged in the business of insurance;
                            ``(ii) subject to regulation by a State 
                        insurance regulator; and
                            ``(iii) covered by a State law that is 
                        designed to specifically deal with the 
                        rehabilitation, liquidation, or insolvency of 
                        an insurance company.
                    ``(M) Material subsidiary.--The term `material 
                subsidiary'--
                            ``(i) means a subsidiary that has--
                                    ``(I) off-balance sheet activities 
                                not less than $5,000,000,000;
                                    ``(II) equity capital not less than 
                                5 percent of the consolidated equity 
                                capital of the top-tier holding 
                                company; or
                                    ``(III) consolidated operating 
                                revenue not less than 5 percent of the 
                                consolidated operating revenue of the 
                                top-tier holding company; and
                            ``(ii) does not include a subsidiary that 
                        is--
                                    ``(I) a functionally regulated 
                                subsidiary;
                                    ``(II) a nonoperating shell holding 
                                company; or
                                    ``(III) primarily engaged in--
                                            ``(aa) servicing activities 
                                        for the holding company or its 
                                        affiliates, including the 
                                        activities described in section 
                                        225.22(b)(2) of title 12, Code 
                                        of Federal Regulations; or
                                            ``(bb) internal financial 
                                        activities, as that term is 
                                        defined in section 10A(a).''.
    (b) Registration and Examination.--Section 10(b) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(b)) is amended--
            (1) in paragraph (1), by inserting ``, and which shall, if 
        applicable, provide for a savings and loan holding company to 
        register as an insurance savings and loan holding company'' 
        before the period at the end of the first sentence;
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by striking ``Each savings 
                and loan holding company'' and inserting ``Subject to 
                subparagraph (D), each savings and loan holding 
                company'';
                    (B) in subparagraph (C)--
                            (i) by striking ``Upon'' and inserting the 
                        following:
                            ``(i) In general.--Upon''; and
                            (ii) by adding at the end the following:
                            ``(ii) Insurance savings and loan 
                        companies.--In the case of an insurance savings 
                        and loan holding company--
                                    ``(I) clause (i) shall not apply; 
                                and
                                    ``(II) the Board shall submit a 
                                request for any information described 
                                in clauses (i) through (iii) of 
                                subparagraph (B) to the appropriate 
                                Federal or State regulatory 
                                agencies.''; and
                    (C) by adding at the end the following:
                    ``(D) Insurance savings and loan holding 
                companies.--An insurance savings and loan holding 
                company may be required only to file reports related 
                to--
                            ``(i) the organizational structure of the 
                        company and any changes in that structure;
                            ``(ii) transactions between the company and 
                        its affiliates;
                            ``(iii) balance sheet and income statements 
                        of a material subsidiary of the company; and
                            ``(iv) the capital holdings of the company 
                        in relation to applicable minimum capital 
                        standards.'';
            (3) in paragraph (3), by inserting ``, other than an 
        insurance savings and loan holding company,'' after 
        ``company''; and
            (4) in paragraph (4)--
                    (A) in subparagraph (A), by inserting ``and 
                subparagraph (D)'' after ``2010''; and
                    (B) by adding at the end the following:
                    ``(D) Insurance savings and loan holding 
                companies.--
                            ``(i) Tailored examinations and 
                        supervision.--Board examinations of, and 
                        supervisory guidance applicable to, an 
                        insurance savings and loan holding company 
                        shall be based upon a supervisory framework 
                        that is--
                                    ``(I) tailored to the risks and 
                                activities of the business of 
                                insurance; and
                                    ``(II) developed in consultation 
                                with State insurance authorities to 
                                ensure that such framework does not 
                                duplicate or conflict with State 
                                insurance requirements.
                            ``(ii) Exemption for companies that meet 
                        applicable capital standards.--Subject to 
                        clause (iii), the Board shall neither examine 
                        nor apply supervisory guidance to an insurance 
                        savings and loan holding company, or any 
                        subsidiary of an insurance savings and loan 
                        holding company (other than a material 
                        subsidiary), if such company--
                                    ``(I) meets or exceeds applicable 
                                State insurance capital standards; and
                                    ``(II) meets or exceeds any minimum 
                                capital standards for an insurance 
                                savings and loan holding company 
                                promulgated by the Board under section 
                                171 of the Financial Stability Act of 
                                2010 (12 U.S.C. 5371).
                            ``(iii) Corrective action plan.--
                                    ``(I) In general.--If, based upon a 
                                capital report submitted pursuant to 
                                paragraph (2)(D)(iv), an insurance 
                                savings and loan holding company is not 
                                in compliance with any applicable 
                                minimum capital standards, the Board 
                                shall provide a notice of noncompliance 
                                to the company and require the company 
                                to submit, within 45 days of the 
                                receipt of such notice, a plan to 
                                restore the capital of the company to a 
                                level that meets the applicable minimum 
                                standards not later than the later of--
                                            ``(aa) 1 year after the 
                                        date on which the plan is 
                                        submitted; or
                                            ``(bb) a date determined by 
                                        the Board.
                                    ``(II) Failure to submit plan.--If 
                                a company fails to submit a required 
                                capital restoration plan, or fails to 
                                restore capital to applicable minimum 
                                standards within the time period 
                                specified in the plan, the Board, 
                                following notice and an opportunity for 
                                a hearing, may prohibit the application 
                                of clause (ii) to the company until the 
                                later of--
                                            ``(aa) the date on which 
                                        the company has met applicable 
                                        minimum capital standards for 2 
                                        calendar years; or
                                            ``(bb) a date determined by 
                                        the Board.''.
    (c) Administration and Enforcement.--Section 10(g) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(g)) is amended--
            (1) in paragraph (1), by inserting ``In issuing any 
        regulation, order, or supervisory guidance applicable to an 
        insurance savings and loan holding company, including a 
        regulation, order, or guidance related to capital, stress 
        testing, and cybersecurity, the Board shall tailor such 
        regulation, order, or guidance to the risks and activities of 
        the business of insurance and shall consult with State 
        insurance authorities to ensure that the regulation, order, or 
        guidance does not duplicate or conflict with State insurance 
        requirements.'' after the period at the end; and
            (2) in paragraph (2), by inserting ``In the case of an 
        insurance savings and loan holding company, the authority of 
        the Board to conduct investigations shall be limited to the 
        material subsidiaries of the insurance savings and loan holding 
        company.'' after the period at the end.
    (d) Intermediate Holding Companies.--Section 10A(d) of the Home 
Owners' Loan Act (12 U.S.C. 1467b(d)) is amended by adding at the end 
the following:
            ``(3) Insurance savings and loan holding companies.--If the 
        Board requires a grandfathered unitary savings and loan holding 
        company that is an insurance savings and loan holding company 
        to establish an intermediary holding company to engage in 
        financial activities, the intermediary holding company shall be 
        treated as an insurance savings and loan holding company for 
        purposes of supervision and regulation by the Board.''.
    (e) Emergency Supervisory Authority.--Section 10 of the Home 
Owners' Loan Act (12 U.S.C. 1467a) is amended by adding the following 
new subsection at the end thereof:
    ``(u) Emergency Supervisory Authority.--The Board, by order, may 
suspend the application of paragraphs (2)(C)(ii), (2)(D), and (4)(D) of 
subsection (c) and the final sentences of paragraphs (1) and (2) of 
subsection (g) to an insurance savings and loan holding company and 
apply subsection (b)(3) to an insurance savings and loan holding 
company if the Board, after consultation with the State insurance 
authority for the insurance savings and loan holding company, 
reasonably determines that the operations and activities of the 
insurance savings and loan holding company pose a serious and imminent 
risk to the financial safety and soundness or stability of the 
insurance savings and loan holding company's subsidiary saving 
association.''.

SEC. 3. ASSESSMENTS AND FEES FOR INSURANCE SAVINGS AND LOAN HOLDING 
              COMPANIES.

    Section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended, 
in the second subsection (s) (relating to assessments), by adding at 
the end the following:
            ``(3) Excluded assets.--With respect to an insurance 
        savings and loan holding company, as defined in section 10 of 
        the Home Owners' Loan Act (12 U.S.C. 1467a), the total 
        consolidated assets described in paragraph (2)(B) shall not 
        include any asset of an insurance company.''.
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