I 114th CONGRESS 1st Session H. R. 2141 IN THE HOUSE OF REPRESENTATIVES April 30, 2015 Mr. Duffy (for himself, Mr. Neugebauer , Mr. Westmoreland , Mr. Garrett , and Mr. Huizenga of Michigan ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To require consultation with Congress, insurers, and consumers with respect to domestic insurance and international insurance standards, regulations, or frameworks, and for other purposes.

1. Short title This Act may be cited as the International Insurance Standards Transparency and Policyholder Protection Act of 2015 . 2. Consultation concerning negotiations with respect to international insurance regulatory frameworks (a) Findings Congress finds the following: (1) The State-based system for insurance regulation in the United States has served American consumers well for more than 150 years. (2) Protecting policyholders by guaranteeing an insurer’s ability to pay claims has been the hallmark of the successful U.S. system and should be the paramount objective of domestic prudential regulation and emerging international standards. (3) The Dodd-Frank Wall Street Reform and Consumer Protection Act ( Public Law 111–203 ) reaffirmed the State-based insurance regulatory system, while giving the Board of Governors of the Federal Reserve System authority to regulate certain non-bank entities on a consolidated basis, including insurers that have been designated systemically important financial institutions or that include an insured depository institution and are regulated by the States at the insurance entity level. (4) United States regulators participating in discussions or negotiations regarding international insurance regulatory frameworks should support standards designed solely for the protection of policyholders. (5) The Federal Insurance Office should seek advice and recommendations from a diverse group of outside experts in performing the duties and authorities of the Office to ensure policy holders are protected. (b) Negotiating objectives for international insurance regulatory frameworks The negotiating objectives of the United States regarding international insurance regulatory frameworks are as follows: (1) To seek standards, requirements, and rules focused solely on protection of policy holders, as reflected in the United States solvency regime. (2) To promote a principles-based approach to insurance supervision, in which capital adequacy is assessed using risk-based capital requirements combined with qualitative risk assessment and management tools on a legal entity basis, rather than a quantitative global capital standard for insurance groups. (3) To seek the most efficient and least disruptive approaches to enhancing regulatory assessment of the capital adequacy of insurance groups, including tools that are already in place, such as supervisory colleges, as well as the evaluation of the capitalization of an insurance group using the existing internal model of the group, where appropriate, which captures the risks associated with each unique line of business and geographic mix of the group. (4) To negotiate an international insurance regulatory framework that recognizes United States prudential measures as equivalent to foreign measures. (c) Prohibitions and focus on policy holder protection With respect to negotiations related to any international insurance regulatory framework: (1) Inappropriate bank capital standards United States representatives shall not agree to, accept, or establish, and shall use their voice and vote to oppose, any international standard that applies to— (A) insurers, capital standards, and rules designed for banks; or (B) any insurer that has not been designated a systemically important financial institution under United States law or a global systemically important insurer by the Financial Stability Oversight Council, capital standards and rules designed for systemically important bank or non-bank financial institutions. (2) Focus on policyholder protection (A) In general United States representatives shall not agree to, accept, or establish, and shall use their voice and vote to oppose, any capital standard or rule applicable to United States insurance entities or groups unless that standard is designed solely to help ensure that sufficient funds are available to pay claims to an insurer’s policyholders in the event of the liquidation of that entity. (B) Enhanced capital standards The limitation under subparagraph (A) does not apply to enhanced capital standards applicable to insurance entities or groups designated under section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5323 ). (d) Notice and consultation (1) In general With respect to any international insurance regulatory framework, the President shall— (A) not less than 90 days before the United States intends to participate in or enter into negotiations with respect to such a regulatory framework, provide to the covered congressional committees written notice of the intention of the United States to participate in or enter into such negotiations and an outline of the objectives of such negotiations, including whether and how such objectives achieve the objectives set forth in subsection (b) and are consistent with the prohibitions under subsection (c) and with existing Federal and State laws or regulations or policy related to prudential regulation of insurance; (B) during the negotiations of such a regulatory framework, including prior to significant decisions points in the negotiations and prior to development of interim drafts, and before agreeing to, accepting, or establishing such framework, consult with the covered congressional committees and the Federal Advisory Committee on Insurance established under section 313(f) of title 31, United States Code, including with respect to whether and how such negotiations or any international insurance regulatory framework achieves the objectives set forth in subsection (b) and is consistent with the prohibitions under subsection (c) and with existing Federal and State laws or regulations or policy related to prudential regulation of insurance; (C) in the course of negotiating such a regulatory framework, provide members and appropriate staff of the covered congressional committees access to pertinent documents relating to the negotiations of such framework; (D) not less than 60 days before the date on which the United States intends to agree to, accept, or establish such a framework, the President shall— (i) notify the covered congressional committees of the intention of the United States to agree to, accept, or establish such a framework by providing a description in enough detail for the covered congressional committees to comment; (ii) notify the Federal Advisory Committee on Insurance of the intention of the United States to agree to, accept, or establish such framework by providing a description in enough detail for the members to comment; and (iii) publish notice of such intention by providing a description in enough detail in the Federal Register to meet the requirements for public consultation under subsection (h); and (E) not less than 15 days before the United States agrees to, accepts, or establishes such a regulatory framework, the President shall submit to the covered congressional committees and the Federal Advisory Committee on Insurance the final text of such framework and a description of how the proposed framework achieves the objectives set forth in subsection (b) and is consistent with the prohibitions under subsection (c), and how such proposed framework differs from existing Federal and State laws or regulations or policy related to prudential regulation of insurance. (2) Availability of information to Members of Congress The covered congressional committees shall make available to all Members of Congress the information required to be provided under paragraph (1)(A). (e) Coordination with the National Association of Insurance Commissioners In developing objectives pursuant to subsection (d)(1)(A) for an international insurance regulatory framework, and throughout the negotiations of such framework, the President shall closely consult and coordinate with the National Association of Insurance Commissioners. (f) Government Accountability Office assessments (1) Notice and submission Not later than 60 days before the date on which the United States intends to agree to, accept, or establish an international insurance regulatory framework, the President shall provide to the Comptroller General of the United States a description of such framework in enough detail to allow the Comptroller General to conduct the assessment required under paragraph (2). (2) Assessment Not later than 60 days after the date on which President provides the information described in paragraph (1) with respect to an international insurance agreement, the Comptroller General shall submit to the President and the covered congressional committees an assessment of the economic effects of such agreement on the United States insurance industry, consumers of insurance, and the United States economy. (g) Negotiations in progress on date of enactment (1) Notice Not later than 15 days after the date of the enactment of this Act, the President shall provide to the covered congressional committees and the Federal Advisory Committee on Insurance the written notice described in subsection (d)(1) with respect to negotiations relating to an international insurance regulatory framework that were in progress on such date. (2) Government accountability assessment (A) Notice and submission Not later than 60 days after the date of the enactment of this Act, the President shall provide to the Comptroller General of the United States a description of each international insurance regulatory framework for which negotiations were in progress on such date in enough detail to allow the Comptroller General to conduct the assessment required under subparagraph (B). (B) Assessment Not later than 60 days after the date on which the President provides the information described in subparagraph (A) with respect to an international insurance regulatory framework, the Comptroller General shall submit to the President and the covered congressional committees an assessment of the economic effects of such framework on the United States insurance industry, consumers of insurance, and the United States economy. (h) Public consultation (1) Notice of negotiations Not later than 90 days before the United States intends to participate in or enter into negotiations to agree to, accept, or establish an international insurance regulatory framework with an international standard-setting organization or a foreign government, authority, or regulatory entity, the President shall publish in the Federal Register and make available for public comment written notice of the intention of the United States to participate in or enter into such negotiations and an outline of the objectives of such negotiations, including whether and how such objectives achieve the objectives set forth in subsection (b) and are consistent with the prohibitions under subsection (c) and with existing Federal and State laws or regulations or policy related to prudential regulation of insurance. (2) Description of framework Not later than 60 days before the date on which the United States agrees to, accepts, or establishes an international insurance regulatory framework with an international standard-setting organization or a foreign government, authority, or regulatory entity, the President shall publish in the Federal Register a description of the framework in enough detail to make such framework available for public comment. (3) Framework agreement Not later than 15 days before agreeing to, accepting, or establishing an international insurance regulatory framework, publish in the Federal Register the final text of the framework and a description of how the framework achieves the objectives set forth in subsection (b) and is consistent with the prohibitions under subsection and how such proposed framework differs from existing Federal and State laws or regulations or policy related to prudential regulation of insurance. (i) Savings Provisions Nothing in this section shall— (1) preempt— (A) any State insurance measure that governs any insurer’s rates, premiums, underwriting, or sales practices; (B) any State coverage requirements for insurance; (C) the application of the antitrust laws of any State to the business of insurance; or (D) any State insurance measure governing the capital or solvency of an insurer, except to the extent that such State insurance measure results in less favorable treatment of a non-United States insurer than a United States insurer; (2) be construed to alter, amend, or limit any provision of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5481 et seq. ); or (3) affect the preemption of any State insurance measure otherwise inconsistent with and preempted by Federal law. (j) Exclusion The requirements of this section shall not apply to any covered agreement, as such term is defined in section 313(r) of title 31, United States Code (as added by the amendment made by section 502(a)(3) the Dodd-Frank Wall Street Reform and Consumer Protection Act ( Public Law 111–203 , 124 Stat. 1587)). (k) Definitions In this section: (1) Covered congressional committees The term covered congressional committees means the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing and Urban Affairs of the Senate. (2) International insurance regulatory framework The term international insurance regulatory framework means any international supervisory standards developed by an international standards setting organization in which the United States participates, including the Common Framework for the Supervision of Internationally Active Insurance Groups, that provides for group-wide supervision of internationally active insurance groups and includes an insurance capital standard.