Insurance companies constitute a major segment of the U.S. financial services industry. The industry is often separated into two parts: life and health insurance companies , which also often offer annuity products, and property and casualty insurance companies , which include most other lines of insurance, such as homeowners insurance, automobile insurance, and various commercial lines of insurance purchased by businesses. Premiums for life and health companies in 2015 totaled $593.7 billion with assets totaling $6.40 trillion. Premiums for property and casualty insurance companies totaled $518.4 billion with assets totaling $1.81 trillion. Different lines of insurance present very different characteristics and risks. Life insurance typically is a longer-term proposition with contracts stretching over decades and insurance risks that are relatively well defined in actuarial tables. Property/casualty insurance typically is a shorter-term proposition with six-month or one-year contracts and greater exposure to catastrophic risks. Health insurance has evolved in a very different direction, with many insurance companies heavily involved with health care delivery, including negotiating contracts with physicians and hospitals, and a regulatory system much more influenced by the federal government through the Medicare, Medicaid, the Employee Retirement Income Security Act of 1974 (ERISA), and the Patient Protection and Affordable Care Act (ACA). This report concentrates primarily on property/casualty and life insurance. Insurance companies, unlike banks and securities firms, have been chartered and regulated solely by the states for the past 150 years. Legal and legislative landmarks in the state-based insurance regulatory system have included Supreme Court decisions in 1868 ( Paul v. Virginia ) and 1944 ( U.S. v. South-Eastern Underwriters Associa t ion ) and federal legislation in 1945 (the McCarran-Ferguson Act). The McCarran-Ferguson Act specifically preserved the states' authority to regulate and tax insurance and also granted a federal antitrust exemption to the insurance industry for "the business of insurance." (The evolution of insurance regulation is presented in greater detail in Appendix A ; a legal analysis of the constitutionality of federal regulation of insurance can be found in Appendix B .) Since the passage of McCarran-Ferguson, both Congress and the federal courts have taken actions that have somewhat expanded the reach of the federal government into the insurance sphere. The insurance industry has often been divided over the possibility of federal actions affecting insurance. The states typically, though not always, have resisted federal actions, arguing that the states are better positioned to regulate insurance and address consumer complaints and that states have engaged in concerted actions to address concerns raised at the federal level. The two large legislative overhauls of financial regulation in the past two decades, the Gramm-Leach-Bliley Act of 1999 (GLBA) and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), expanded the federal role in insurance, but the states continued as the primary regulators of insurance following these acts. GLBA removed legal barriers between securities firms, banks, and insurers, allowing these firms to coexist under a financial holding company structure. Under the act, such a holding company was overseen by an umbrella regulator—the Federal Reserve for holding companies that included bank subsidiaries or the Office of Thrift Supervision (OTS) for holding companies with thrift or savings association subsidiaries. Within a holding company, GLBA established a system of functional regulation for the bank, thrift, securities, and insurance subsidiaries. This meant that insurance company subsidiaries within a bank or thrift holding company were functionally regulated by state insurance authorities, with limited oversight by the federal regulator of the holding company. For more information on GLBA, see " The Gramm-Leach-Bliley Act " below. The Dodd-Frank Act altered the post-GLBA regulatory structure, while leaving the basic functional regulatory paradigm largely the same. The act gave enhanced systemic risk regulatory authority to the Federal Reserve and to a new Financial Stability Oversight Council (FSOC), including some oversight authority over insurers. The authority to oversee holding companies, including those with insurance subsidiaries, was consolidated in the Federal Reserve with additional capital requirements added. The Dodd-Frank Act also included measures affecting the states' oversight of surplus lines insurance and reinsurance and the creation of a new Federal Insurance Office (FIO) within the Department of the Treasury. Insurance regulatory issues before the 114 th Congress include overseeing the implementation of, and possible amendments to, the Dodd-Frank Act, including specific legislation, such as H.R. 1478 / S. 798 , and provisions in S. 1484 / S. 1910 , which would limit the Federal Reserve and Federal Deposit Insurance Corporation (FDIC) authority over insurers and H.R. 5983 , which would merge and revamp the FIO and the independent insurance expert position on FSOC; legislation that would narrowly reform the current regulatory system, such as Title II of H.R. 26 / P.L. 114-1 , which attempts to streamline the state regulation of insurance producer licensing; and responding to international developments, such as the changes to the European Union's regulatory scheme known as Solvency II and the development of international standards by the International Association of Insurance Supervisors (IAIS). Legislation addressing U.S. involvement in the IAIS includes S. 1086 , H.R. 2141 , H.R. 5143 and H.R. 6436 as well as provisions in S. 1484 / S. 1910 . This report provides background on these issues as well as others that may be of congressional interest. It includes summaries and analysis of federal legislation and executive actions as well as policies undertaken at the state and international level. The National Association of Registered Agents and Brokers Reform Act of 2015 was introduced by Representative Randy Neugebauer on January 6, 2015, as Title II of H.R. 26 . It was identical to an amended version of S. 2244 in the 113 th Congress, which passed the House on December 10, 2014. H.R. 26 passed the House on January 7, 2015, passed the Senate on January 8, 2015, and was signed by the President ( P.L. 114-1 ) on January 12, 2015. As enacted, the National Association of Registered Agents and Brokers Reform Act establishes a National Association of Registered Agents and Brokers (NARAB). The association is to be a private, nonprofit corporation. Its members, required to be licensed as insurance producers in a single state and meet other requirements, will be able to operate in any other state subject only to payment of the licensing fee in that state, rather than having to obtain a separate license in the additional states, as is often the case now. The association members will still be subject to each state's consumer protection and market conduct regulation, but individual state laws that in certain respects treat out-of-state insurance producers differently from in-state producers are preempted. The NARAB will be overseen by a board made up of five appointees from the insurance industry and eight from the state insurance commissioners. The appointments are to be made by the President subject to Senate confirmation, and the President is empowered to dissolve the board as a whole or suspend individual members for cause or suspend the implementation of any rule or action taken by the association. Ten members of the NARAB board have been appointed by the President, but none have been acted on by the Senate. H.R. 5143 was introduced by Representative Blaine Luetkemeyer on February 25, 2016. It was marked up and ordered reported by the House Committee on Financial Services on a vote of 34-25 on June 16, 2016, and was reported ( H.Rept. 114-831 ) on November 22, 2015. CBO scored the bill, finding it would increase spending by a total of $7 million over 10 years. This amount was to be offset through a reduction in the Securities and Exchange Commission Reserve Fund added by the House Committee on Rules prior to consideration on the floor. H.R. 5143 was passed by the House on December 7, 2016, on a vote of 239-170. The White House released a Statement of Administration Policy indicating that presidential advisors would recommend a veto of the bill. In general, H.R. 5143 would bolster the primacy of the state-based insurance regulatory system and would increase public and congressional input into the negotiation of international insurance standards and covered agreements. H.R. 5143 lists specific U.S. objectives regarding international standards, such as ensuring that the Treasury and the Fed achieve consensus positions with the states, promoting the regulatory standards used in the United States, and ensuring transparency in international organizations and international standards. Beyond these general goals, H.R. 5143 creates specific procedural requirements for the adoption of international standards and covered agreements as well as augmenting the authorities of the FSOC independent insurance expert. Prior to the agreement to or adoption of international standards generally: The Treasury, Fed, and state insurance commissioners would be required to publish the standards and provide at least 30 days' public comment period. The Treasury and Fed would be jointly required to analyze the effect of the standards and report on the analysis. The report would be subject to public comment for at least 60 days and would be reviewed by the Comptroller General. The Treasury and Fed must certify that the proposed standards would not result in any change in state law. If the standards involve capital requirements, additional requirements would apply: The Fed must have previously issued its rules for domestic capital requirements. The standards must be consistent with both state and Fed capital standards. The Fed and Treasury must certify that these capital standards are solely designed to ensure that funds are available to pay policyholder claims. Any proposed standard must be submitted to Congress and lay over for a period of 90 calendar days.