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 2013 totaled $533.8 billion with assets totaling $6.08 trillion. Premiums for property and casualty insurance companies totaled $484.4 billion with assets totaling $1.76 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 healthcare 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 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 Services 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 Treasury Department. Insurance regulatory issues before the 113 th Congress included overseeing the implementation of, and possible amendments to, the Dodd-Frank Act, including legislation such as H.R. 605 , which would remove insurers from the act's orderly liquidation authority; H.R. 2140 , H.R. 4510 , H.R. 5461 , S. 2102 , and S. 2270 , addressing the capital requirements and accounting standards to be used by the Federal Reserve in its oversight of some insurers; and S. 2726 / H.R. 5388 , which would exclude captive insurers from the definition of a nonadmitted insurer under the act. legislation that would narrowly reform the current regulatory system, such as S. 534 , S. 1926 , S. 2244 , H.R. 1155 / H.R. 1064 , and H.R. 4871 , which would attempt to harmonize the state regulation of insurance producer licensing, among other provisions. 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). Recent insurance legislation that was not introduced in the 113 th Congress includes legislation to create a federal charter and regulatory apparatus for insurance ( H.R. 1880 in the 111 th Congress), remove or limit the McCarran-Ferguson Act's antitrust exclusion for the general business of insurance ( H.R. 1583 in the 111 th Congress), and expand the Liability Risk Retention Act, or LRRA ( H.R. 2126 in the 112 th Congress). Draft legislation to expand the LRRA was, however, the subject of a May 20, 2014, House Financial Services Subcommittee hearing. The National Association of Registered Agents and Brokers Reform Act of 2013 ( S. 534 ) was introduced in the Senate by Senator Jon Tester along with 13 cosponsors on March 12, 2013. The Senate Committee on Banking, Housing, and Urban Affairs' Subcommittee on Securities, Insurance, and Investment held a hearing on the bill on March 19, 2013. The full committee amended the bill and ordered it reported on June 6, 2013. Two identical bills, H.R. 1064 and H.R. 1155 , were introduced in the House by Representative Randy Neugebauer. H.R. 1155 was introduced on March 14, 2013, with 42 cosponsors and additional cosponsors added since introduction, whereas H.R. 1064 has not had additional cosponsors added since its introduction with 41 cosponsors on March 12, 2013. H.R. 1155 , with an amendment closely tracking the Senate committee amendment, was considered under suspension of rules and passed on a vote of 397-6 on September 10, 2013. The National Association of Registered Agents and Brokers Reform Act would establish a National Association of Registered Agents and Brokers (NARAB). Apparently because the 1999 Gramm-Leach-Bliley Act included provisions that could have created an identically named association, the current legislation is often referred to as "NARAB II." The NARAB II association would be a private, nonprofit corporation. Its members, required to be licensed as an insurance producer in a single state and meet other requirements, would 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 member would still be subject to each state's consumer protection and market conduct regulation, but individual state laws that treated out-of-state insurance producers differently from in-state producers would be preempted. The NARAB II association would be overseen by a board made up of five appointees from the insurance industry and eight from the state insurance commissioners. The appointments would be made by the President, and the President could dissolve the board as a whole or suspend the implementation of any rule or action taken by the association. S. 534 and H.R. 1155 as amended are nearly identical in structure, except for slightly different language relating to background checks. On January 29, 2014, the Senate added the text of S. 534 as amended to S. 1926 , a bill addressing flood insurance, by voice vote. S. 1926 as amended passed the Senate the following day by a vote of 67-32. The House, however, did not take up S. 1926 , and P.L. 113-89 addressing flood insurance was ultimately enacted on March 21, 2014, without containing any NARAB provisions. On June 19, 2014, the House Committee on Financial Services added the text of H.R. 1155 as amended to H.R. 4871 , a bill addressing terrorism risk insurance, by voice vote. H.R. 4871 as amended was ordered favorably reported the following day by a vote of 32-27. On July 17, 2014, the Senate adopted language nearly identical to H.R. 1155 as an amendment to S. 2244 , a bill addressing terrorism risk insurance, by voice vote. The change introduced was a new Section 335 that would sunset the NARAB language two years after the association approves its first member. S. 2244 as amended passed the Senate on a vote of 93-4. On December 10, 2014, the House passed a further amended version of S. 2244 , including NARAB language but not including the Section 335 sunset provisions.