Anti-Redlining in Insurance Disclosure Act - Requires certain insurers to maintain and make available to the Secretary of Commerce (the Secretary) and the public specified information relating to their insurance practices and activities with respect to property and casualty insurance sold in urban areas, such as the number of policies sold by census tract, itemized by demographic characteristics.
Directs the Secretary to: (1) study and report to certain congressional committees on the availability of commercial insurance for small businesses; and (2) develop and submit to certain congressional committees a proposed data collection pilot project in certain metropolitan statistical areas (MSAs) to ascertain the need for additional data to evaluate the availability of insurance coverage for small businesses.
Directs the Secretary to: (1) exempt insurers operating under State disclosure requirement laws substantially similar to those under this Act; and (2) implement a public information central depository in each designated MSA to disseminate the information required under this Act. Prescribes data collection parameters for designated MSAs and insurers, including: (1) private passenger automobile insurance; (2) homeowners insurance; and (3) dwelling fire and allied lines of insurance.
Requires the Secretary to establish a task force on insurance agency appointments to review and report to certain congressional committees on: (1) the status of insurance agency appointments for inner city and minority agents; (2) the practices of insurers in terminating agents; and (3) recommendations to improve the ability of inner city and minority agents to market property and casualty insurance.
Permits the Secretary to use data collection contractors and statistical agents.
Requires the Secretary to compile data annually for each MSA for all insurers either subject to or exempt from this Act.
Provides civil penalties for violations of this Act.
Directs the Secretary to study and report to certain congressional committees on: (1) the feasibility and utility of collecting information on specified characteristics of insurance applicants and the reasons for their rejection; and (2) actions by insurers to meet the property and casualty insurance needs of low- and moderate-income and minority neighborhoods, and the small businesses located in such neighborhoods.
[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1257 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 1257
To reconstitute the Federal Insurance Administration as an independent
agency within the executive branch, provide for minimum standards
applicable to foreign insurers and reinsurers providing insurance in
the United States, make liquidity assistance available to well-
capitalized insurance companies, and provide for public access to
information regarding the availability of insurance, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 9, 1993
Mr. Kennedy (for himself and Mr. Gonzalez) introduced the following
bill; which was referred to the Committee on Banking, Finance and Urban
Affairs
_______________________________________________________________________
A BILL
To reconstitute the Federal Insurance Administration as an independent
agency within the executive branch, provide for minimum standards
applicable to foreign insurers and reinsurers providing insurance in
the United States, make liquidity assistance available to well-
capitalized insurance companies, and provide for public access to
information regarding the availability of insurance, 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 AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Federal Insurance
Administration Act''.
(b) Table of Contents.--
Sec. 1. Short title and table of contents.
TITLE I--FEDERAL INSURANCE ADMINISTRATION
Sec. 101. Reestablishment of Federal Insurance Administration as
independent establishment in executive
branch.
Sec. 102. Administrator.
Sec. 103. Transfer of functions.
Sec. 104. Personnel.
Sec. 105. Property and records.
Sec. 106. Administrative provisions.
Sec. 107. Continuation of service of Administrator.
Sec. 108. Report.
Sec. 109. References.
Sec. 110. Savings provisions.
Sec. 111. Definitions.
Sec. 112. Conforming amendments.
Sec. 113. Effective date.
TITLE II--REGULATION OF FOREIGN INSURERS
Sec. 201. Purpose.
Sec. 202. Certification of direct insurers.
Sec. 203. Standards for certification of direct insurers.
Sec. 204. Certification of reinsurers.
Sec. 205. Standards for certification of reinsurers.
Sec. 206. Financial statements and examinations.
Sec. 207. Decertification.
Sec. 208. GAO audits.
Sec. 209. National insurance intelligence database.
Sec. 210. Penalties.
Sec. 211. Definitions.
Sec. 212. Limitation on preemption.
Sec. 213. Effective date.
TITLE III--LIQUIDITY ASSISTANCE BY FEDERAL RESERVE BANKS TO WELL-
CAPITALIZED INSURANCE COMPANIES
Sec. 301. Short title.
Sec. 302. Certification of eligibility for liquidity assistance.
Sec. 303. Requests for liquidity assistance.
Sec. 304. Report.
Sec. 305. Provision of liquidity assistance to insurance companies by
Federal Reserve banks.
Sec. 306. Regulations.
TITLE IV--DISCLOSURE OF INSURANCE AVAILABILITY INFORMATION
Sec. 401. Short title.
Sec. 402. Findings and construction.
Sec. 403. Maintenance of information and public disclosure.
Sec. 404. Requirements.
Sec. 405. Access system.
Sec. 406. Submission to Administrator.
Sec. 407. Designations.
Sec. 408. Disclosures to rejected applicants.
Sec. 409. Termination of agents.
Sec. 410. Implementation.
Sec. 411. Improved methods.
Sec. 412. Compilation of aggregate data.
Sec. 413. Testers.
Sec. 414. Report.
Sec. 415. Enforcement.
Sec. 416. Relation to State laws.
Sec. 417. Definitions.
Sec. 418. Effective date.
TITLE I--FEDERAL INSURANCE ADMINISTRATION
SEC. 101. REESTABLISHMENT OF FEDERAL INSURANCE ADMINISTRATION AS
INDEPENDENT ESTABLISHMENT IN EXECUTIVE BRANCH.
The Federal Insurance Administration of the Federal Emergency
Management Agency is hereby established as an independent establishment
in the executive branch of the Government to be known as the Federal
Insurance Administration.
SEC. 102. ADMINISTRATOR.
There shall be at the head of the Federal Insurance Administration
a Federal Insurance Administrator, who shall be appointed by the
President, by and with the advice and consent of the Senate. The
Administration shall be administered under the supervision and
direction of the Administrator.
SEC. 103. TRANSFER OF FUNCTIONS.
(a) In General.--There are transferred to the Administrator all
functions of--
(1) the Director of the Federal Emergency Management Agency
under--
(A) the Flood Disaster Protection Act of 1973 (42
U.S.C. 4001 et seq.);
(B) the National Flood Insurance Act of 1968 (42
U.S.C. 4011 et seq.), including borrowing under section
1309 of such Act pursuant to the authority under
section 15(e) of the Federal Flood Insurance Act of
1956 (42 U.S.C. 2414(e));
(C) title XII of the National Housing Act (12
U.S.C. 1749bbb et seq.);
(D) the Coastal Barrier Resources Act (16 U.S.C.
3501 et seq.); and
(E) section 2(d) of Executive Order 11988 (42
U.S.C. 4321 note; relating to floodplain management);
and
(2) the Federal Insurance Administrator and Federal
Insurance Administration, of the Federal Emergency Management
Agency.
(b) Effect of Transfers.--The transfer of each function from an
officer or office under subsection (a) shall include any aspects of
such function vested in a subordinate of such officer or in a component
of such office.
SEC. 104. PERSONNEL.
(a) Appointment.--The Administrator may select, appoint, employ,
and fix the compensation of any officers and employees necessary to
carry out the functions of the Administrator.
(b) Transfer.--
(1) In general.--The personnel employed in connection with
the functions and office transferred by this title are hereby
transferred to the Administrator.
(2) Effect.--Any full-time or part-time personnel employed
in permanent positions shall not be separated or reduced in
grade or compensation because of the transfer under this
subsection during the 1-year period beginning upon the date of
the effectiveness of this title.
(c) Treatment of Requirements Under Title 5, United States Code.--
(1) Appointments above gs-15.--The Director of the Office
of Personnel Management shall, under section 5108 of title 5,
United States Code, provide for the establishment, upon the
transfer of personnel by this section, in each of the grade
levels above GS-15 of a number of positions in the
Administration equal to the number of positions in such grade
level that were filled by personnel transferred by this
section.
(2) Inapplicability of approval provision.--Personnel
referred to in paragraph (1) may be appointed to positions
established under such paragraph without regard to the
provisions of section 3324 of title 5, United States Code, if
the individual appointed in such position is an individual who
is transferred by this section and, on the day preceding the
date of the effectiveness of this title, holds a position and
has duties comparable to those of the position to which
appointed hereunder.
(3) Termination of authority.--The authority under this
subsection with respect to any position shall terminate when
the person first appointed to fill such position ceases to hold
such position.
SEC. 105. PROPERTY AND RECORDS.
The contracts, liabilities, records, property, and other assets and
interests of, or made available in connection with, the functions and
office transferred by this title are hereby transferred to the
Administrator for appropriate allocation.
SEC. 106. ADMINISTRATIVE PROVISIONS.
The Administrator may--
(1) issue any regulations the Administrator considers
necessary to carry out the functions of the Administrator;
(2) organize the Administration as the Administrator
determines necessary or appropriate, subject to the provisions
of this title;
(3) except as otherwise provided by law, delegate any
function of the Administrator to the officers and employees of
the Administration as the Administrator may designate, and may
authorize successive redelegations of such functions as the
Administrator considers necessary or appropriate; except that
the delegation of functions under this paragraph shall not
relieve the Administrator of responsibility for the
administration of such functions;
(4) procure the services of experts and consultants in
accordance with section 3109 of title 5, United States Code;
(5) accept and use gifts, bequests, and donations of
property;
(6) use the United States mails in the same manner and
under the same conditions as other departments and agencies of
the United States;
(7) subject to the provisions of the Federal Property and
Administrative Services Act of 1949, make, enter into, and
perform such contracts, grants, leases, cooperative agreements,
or other similar transactions and make such payments as the
Administrator determines necessary or appropriate to carry out
the functions of the Administrator; except that the authority
to enter into contracts and to make payments shall be effective
only to such extent or in such amounts as are provided in
appropriation Acts; and
(8) cause a seal of office to be made for the
Administration of such design as the Administrator shall
approve, and judicial notice shall be taken of the seal.
SEC. 107. CONTINUATION OF SERVICE OF ADMINISTRATOR.
The individual serving as the Federal Insurance Administrator of
the Federal Emergency Management Agency on the date of the
effectiveness of this title may act as Administrator until the date an
individual is appointed under this Act to the position of
Administrator, or until the end of the 120-day period provided for in
section 3348 of title 5, United States Code (relating to limitations on
the period of time a vacancy may be filled temporarily), whichever is
earlier, and while so acting shall be compensated at the rate provided
for the Administrator.
SEC. 108. REPORT.
Not later than 3 months after the conclusion of each fiscal year,
the Administrator shall submit to the Committee on Banking, Finance and
Urban Affairs of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate, a report regarding
the activities of the Administration during the fiscal year. The report
shall include a statement of the goals, priorities, and plans for the
Administration, an assessment of the progress made toward attainment of
such goals, priorities, and plans, and a financial statement of the
Administration describing the operations of the Administration and the
financial operating plans and forecasts for the Administration for the
ensuing year.
SEC. 109. REFERENCES.
Any reference in any other Federal law, Executive order, rule,
regulation, or delegation of authority, or any document of or
pertaining to the Federal Emergency Management Agency--
(1) to the Federal Insurance Administrator of the Federal
Emergency Management Agency is deemed to refer to the Federal
Insurance Administrator of the Federal Insurance Administration
established under this title; and
(2) to the Federal Insurance Administration under the
Federal Emergency Management Agency is deemed to refer to the
Federal Insurance Administration established under this title.
SEC. 110. SAVINGS PROVISIONS.
(a) Legal Documents.--All orders, determinations, rules,
regulations, permits, grants, contracts, certificates, licenses, and
privileges--
(1) that have been issued, made, granted, or allowed to
become effective by the President, by the Director of the
Federal Emergency Management Agency, by the Federal Insurance
Administrator of the Federal Emergency Management Agency, or by
a court of competent jurisdiction, in the performance of
functions of the Director under the provisions referred to in
section 103(a) or the Federal Insurance Administrator of the
Federal Emergency Management Agency, and
(2) that are in effect on the date of the effectiveness of
this title (or become effective after such date pursuant to
their terms as in effect on such date),
shall continue in effect according to their terms until modified,
terminated, superseded, set aside, or revoked in accordance with law by
the President, the Administrator or other authorized official, by a
court of competent jurisdiction, or by operation of law.
(b) Proceedings.--The provisions of this title shall not affect any
proceedings or any application for any benefits, service, license,
permit, certificate, or financial assistance pending before the Federal
Emergency Management Agency on the date of the effectiveness of this
title, but such proceedings and applications shall be continued. Orders
shall be issued in such proceedings, appeals shall be taken therefrom,
and payments shall be made pursuant to such orders, as if this Act had
not been enacted, and orders issued in any such proceeding shall
continue in effect until modified, terminated, superseded, or revoked
by a duly authorized official, by a court of competent jurisdiction, or
by operation of law. Nothing in this subsection shall be deemed to
prohibit the discontinuance or modification of any such proceeding
under the same terms and conditions and to the same extent that such
proceeding could have been discontinued or modified if this title had
not been enacted.
(c) Suits.--The provisions of this title shall not affect suits
commenced before the date of the effectiveness of this title, and in
all such suits, proceeding shall be had, appeals taken, and judgments
rendered in the same manner and with the same effect as if this title
had not been enacted.
(d) Nonabatement of Actions.--No suit, action, or other proceeding
commenced by or against the Director of the Federal Emergency
Management Agency or the Federal Insurance Administration of such
Agency, or by or against any individual in the official capacity of
such individual as an officer of such Agency or Administration, shall
abate by reason of the enactment of this title.
(e) Continuance of Suits.--If, before the date of the effectiveness
of this Act, any agency or officer thereof in the official capacity of
such officer, is party to a suit, and under this title any function of
such agency or officer is transferred to the Administrator or any other
official of the Administration, then such suit shall be continued with
the Administrator or other appropriate official of the Administration
substituted or added as a party.
SEC. 111. DEFINITIONS.
For purposes of this Act:
(1) The term ``Administration'' means the Federal Insurance
Administration, as established under section 101.
(2) The term ``Administrator'' means the Federal Insurance
Administrator-, as such position is established under section
102.
(3) The term ``function'' includes any duty, obligation,
power, authority, responsibility, right, privilege, activity,
or program.
SEC. 112. CONFORMING AMENDMENTS.
(a) Flood Disaster Protection Act of 1973.--The Flood Disaster
Protection Act of 1973 (42 U.S.C. 4001 et seq.) is amended--
(1) in section 3(a), by striking paragraph (6) and
inserting the following new paragraph:
``(6) `Administrator' means the Federal Insurance
Administrator.'';
(2) in section 201(b), by striking ``Director's'' and
inserting ``Administrator's''; and
(3) by striking ``Director'' each place it appears and
inserting ``Administrator''.
(b) National Flood Insurance Act of 1968.--The National Flood
Insurance Act of 1968 (42 U.S.C. 4011 et seq.) is amended--
(1) in section 1304(a), by striking ``Director of the
Federal Emergency Management Agency'' and inserting ``Federal
Insurance Administrator'';
(2) in section 1307(f)--
(A) by striking ``Director of the Federal Emergency
Management Agency'' each place it appears and inserting
``Administrator''; and
(B) by striking ``and the Federal Emergency
Management Agency'' and inserting ``and the Federal
Insurance Administration'';
(3) in section 1345(c)--
(A) by striking ``Director of the Federal Emergency
Management Agency'' each place it appears and inserting
``Administrator''; and
(B) by striking ``part of the Federal Emergency
Management Agency'' each place it appears and inserting
``part of the Federal Insurance Administration'';
(4) in section 1363, by striking ``Director's'' each place
it appears and inserting ``Administrator's'';
(5) in section 1370(a), by striking paragraph (6) and
inserting the following new paragraph:
``(6) the term `Administrator' means the Federal Insurance
Administrator.''; and
(6) by striking ``Director'' each place it appears and
inserting ``Administrator''.
(c) Federal Flood Insurance Act of 1956.--Section 15(e) of the
Federal Flood Insurance Act of 1956 (42 U.S.C. 2414(e)) is amended by
striking ``Director of the Federal Emergency Management Agency'' each
place it appears and inserting ``Federal Insurance Administrator''.
(d) National Housing Act.--Title XII of the National Housing Act
(12 U.S.C. 1749bbb et seq.) is amended--
(1) in section 1203(a), by striking paragraph (17) and
inserting the following new paragraph:
``(17) `Administrator' means the Federal Insurance
Administrator.'';
(2) in section 1231(c), by striking ``Director's'' and
inserting ``Administrator's''; and
(3) by striking ``Director'' each place it appears and
inserting ``Administrator''.
(e) Compensation at Level IV of Executive Schedule.--Section 5315
of title 5, United States Code, is amended by striking ``Federal
Insurance Administrator, Federal Emergency Management Agency.'' and
inserting the following new item:
``Federal Insurance Administrator, Federal Insurance
Administration.''.
(f) Housing and Urban Development Act of 1968.--Section 1105 of the
Housing and Urban Development Act of 1968 (42 U.S.C. 4129) is amended
by striking subsection (a).
SEC. 113. EFFECTIVE DATE.
(a) In General.--Except as provided in subsection (b), this title
shall take effect upon the expiration of the 180-day period beginning
on the date of the enactment of this Act.
(b) Appointment of Administrator.--Notwithstanding any other
provision of law or of this title, the President may, any time after
the date of the enactment of this Act, appoint an individual to serve
as Federal Insurance Administrator, as such position is established
under section 102. An appointment under this section may not be
construed to affect the position of Federal Insurance Administrator
under the Federal Emergency Management Agency or the authority of such
official during the period under subsection (a).
TITLE II--REGULATION OF FOREIGN INSURERS
SEC. 201. PURPOSE.
The purposes of this title are--
(1) to establish minimum solvency, registration, and other
business requirements for foreign insurers who provide
insurance to residents of the United States covering property
or risks located in the United States on a direct written
basis; and
(2) to establish minimum requirements for reinsurance ceded
to foreign insurers and reinsurers by insurers formed and
licensed within the United States that may be claimed as an
asset or deduction from liability.
SEC. 202. CERTIFICATION OF DIRECT INSURERS.
(a) Requirement for Conducting Business.--Notwithstanding any other
State or Federal law, no foreign insurer may act as a direct insurer
unless the foreign insurer is certified under this title by the Federal
Insurance Administrator as a certified direct insurer and no person may
assist or facilitate the placement of insurance with a foreign insurer
acting as a direct insurer unless the foreign insurer is so certified.
(b) Application.--The Administrator shall provide for foreign
insurers to apply, in the form and manner determined by the
Administrator, for certification under this title. The Administrator
may establish and charge a reasonable application fee to cover any
costs of the application procedure and reviewing applications.
(c) Certification.--The Administrator may certify a foreign insurer
as a certified direct insurer for purposes of this title only if the
foreign insurer submits an application under this section containing
the information described in section 203 and the Administrator
determines that the foreign insurer complies with the standards
established under section 203.
SEC. 203. STANDARDS FOR CERTIFICATION OF DIRECT INSURERS.
The Administrator shall establish standards for certifying, and
renewing certification, of foreign insurers as certified direct
insurers, which shall include the following requirements:
(1) Examinations, audits, and financial statements.--The
foreign insurer shall--
(A) maintain any books and records in accordance
with any requirements established by the Administrator;
(B) provide the Administrator access to such books
and records for purpose of examinations under section
206(b); and
(C) submit to the Administrator financial
information in accordance with section 206(a).
(2) Regulatory fee.--The foreign insurer shall pay to the
Administrator a fee not exceeding the amount determined by the
Administrator that, together with other such fees, is
sufficient to cover the costs of administering any activities
under this title relating to foreign insurers.
(3) Minimum net worth.--The foreign insurer shall have a
net worth in an amount not less than the amount established by
the Administrator. The net worth of an insurer and the value of
any assets and liabilities of an insurer shall be determined,
for purposes of this paragraph, in accordance with generally
accepted accounting practices and as provided by the
Administrator.
(4) Reserve.--The foreign insurer shall establish and
maintain a capital reserve with the Administrator, which shall
be in the form determined by the Administrator and shall meet
the following requirements:
(A) Availability of proceeds.--The proceeds of the
reserve shall be available only for the purpose of
securing the payment of valid claims of the United
States policyholders of the insurer and other claimants
under such policies.
(B) Balance.--Except as provided in subparagraph
(C), the reserve shall have a balance, at all times, of
cash, readily marketable securities, and letters of
credit, acceptable in the determination of the
Administrator, in an amount not less than the amount
equal to the percentage of the aggregate amount of the
United States direct written obligations of the insurer
that is established by the Administrator under this
subparagraph. The Administrator shall establish such
percentage based on the percentage of reserves
necessary to be held to protect the interests of United
States policyholders of the insurer and other claimants
under such policies.
(C) Unsafe financial conditions.--The Administrator
may increase the percentage under subparagraph (B) for
an insurer if the Administrator determines that such
insurer is operating in a manner likely to result in an
unsafe or unsound financial condition.
(5) Agent for service of process.--The foreign insurer
shall appoint and maintain an agent in the United States upon
whom process may be served in any action, suit, or proceeding.
(6) Jurisdiction of courts.--The foreign insurer shall
agree to submit to the jurisdiction of any court of the United
States or of any State, of competent jurisdiction, to be fully
bound by its decision.
(7) Regulation by domicile.--The foreign insurer shall
annually submit to the Administrator a certificate of
compliance, certificate of good standing, or equivalent
documentation (as determined by the Administrator) properly
attested by the body responsible for regulation of the insurer
in the domicile of the insurer, evidencing authority under the
laws of the domicile of the insurer to engage in the business
of insurance.
(8) Biographical information.--The foreign insurer shall
annually submit to the Administrator, in the form and manner
determined by the Administrator--
(A) biographical information on all senior officers
and directors of the insurer that demonstrates a level
of competency, experience, and integrity sufficient to
indicate that permitting the insurer to conduct
business in the United States would not be hazardous to
United States policyholders and creditors of the
insurer or to the general public; and
(B) financial, management, and operational
information on any entities that directly or indirectly
control the insurer, as the Administrator shall
provide.
(9) Insurance experience.--The foreign insurer shall--
(A) have been actively and continuously engaged in
the business of insurance for a period of not less than
3 years ending upon the submission of an application
under section 202;
(B) be a wholly owned subsidiary of an insurer and
have been actively and continuously engaged in the
business of insurance for a period of not less than 3
years ending upon the submission of an application
under section 202; or
(C) be the continuing corporation resulting from a
merger or consolidation of insurers, at least one of
which has been actively and continuously engaged in the
business of insurance for a period of not less than 3
years ending upon the submission of an application
under section 202.
(10) Other.--The foreign insurer shall meet any other
requirements as the Administrator may provide.
SEC. 204. CERTIFICATION OF REINSURERS.
(a) Requirement for Conducting Business.--Notwithstanding any other
State or Federal law, no insurer licensed by any State nor any
certified direct insurer under this title may claim reinsurance from a
foreign reinsurer as an asset or deduction from liability for purposes
of any financial statement (including financial statements required
under this title) unless the foreign reinsurer is certified under this
title by the Administrator as a certified reinsurer.
(b) Application.--The Administrator shall provide for foreign
reinsurers to apply, in the form and manner determined by the
Administrator, for certification under this title. The Administrator
may establish and charge a reasonable application fee to cover any
costs of the application procedure and reviewing applications.
(c) Certification.--The Administrator may certify a foreign
reinsurer as a certified reinsurer for purposes of this title only if
the foreign reinsurer submits an application under this section
containing any information described in section 205 and the
Administrator determines that the foreign reinsurer complies with the
standards established under section 205.
SEC. 205. STANDARDS FOR CERTIFICATION OF REINSURERS.
The Administrator shall establish standards for certifying, and
renewing certification, of foreign reinsurers as certified reinsurers,
which shall include the following requirements:
(1) Examinations, audits, and financial statements.--The
foreign reinsurer shall--
(A) maintain any books and records in accordance
with any requirements established by the Administrator;
(B) provide the Administrator access to such books
and records for purpose of examinations under section
206(b); and
(C) submit to the Administrator financial
information in accordance with section 206(a).
(2) Regulatory fee.--The foreign reinsurer shall pay to the
Administrator a fee not exceeding the amount determined by the
Administrator that, together with other such fees, is
sufficient to cover the costs of administering any activities
under this title relating to foreign reinsurers.
(3) Minimum net worth.--The foreign reinsurer shall have a
net worth in an amount not less than the amount established by
the Administrator. The net worth of a reinsurer and the value
of any assets and liabilities of a reinsurer shall be
determined, for purposes of this paragraph, in accordance with
generally accepted accounting practices and as provided by the
Administrator.
(4) Trust fund.--The foreign reinsurer shall establish and
maintain a capital reserve with the Administrator, which shall
be in the form determined by the Administrator and shall meet
the following requirements:
(A) Availability of proceeds.--The proceeds of the
reserve shall be available only for the purpose of
securing the payment of valid claims of the United
States policyholders of the reinsurer and other
claimants under such policies.
(B) Balance.--Except as provided in subparagraph
(C), the reserve shall have a balance, at all times, of
cash, readily marketable securities, and letters of
credit, acceptable in the determination of the
Administrator, in an amount not less than the amount
equal to the percentage of the aggregate amount of the
United States reinsurance obligations of the reinsurer
that is established by the Administrator under this
subparagraph. The Administrator shall establish such
percentage based on the percentage of reserves
necessary to be held to protect the interests of United
States policyholders of the reinsurer and other
claimants under such policies.
(C) Unsafe financial conditions.--The Administrator
may increase the percentage under subparagraph (B) for
a reinsurer if the Administrator determines that such
reinsurer is operating in a manner likely to result in
an unsafe or unsound financial condition.
(5) Agent for service of process.--The foreign reinsurer
shall appoint and maintain an agent in the United States upon
whom process may be served in any action, suit, or proceeding.
(6) Jurisdiction of courts.--
(A) In general.--The foreign reinsurer shall agree
to submit to the jurisdiction of any court of the
United States or of any State, of competent
jurisdiction, to be fully bound by its decision.
(B) Arbitration.--The provisions of subparagraph
(A) may not be construed to annul, alter, or effect any
obligation of the parties to a reinsurance agreement to
arbitrate or otherwise resolve their disputes that is
established by such an agreement; except that the title
to or the right to be paid out of any trust fund
established or maintained pursuant to paragraph (4)
shall not be subject to arbitration or other
resolution.
(7) Regulation by domicile.--The foreign reinsurer shall
annually submit to the Administrator a certificate of
compliance, certificate of good standing, or equivalent
documentation (as determined by the Administrator) properly
attested by the body responsible for regulation of the
reinsurer in the domicile of the reinsurer, evidencing
authority under the laws of the domicile of the reinsurer to
engage in the business of reinsurance.
(8) Biographical information.--The foreign reinsurer shall
annually submit to the Administrator, in the form and manner
determined by the Administrator--
(A) biographical information on all senior officers
and directors of the reinsurer that demonstrates a
level of competency, experience, and integrity
sufficient to indicate that permitting the reinsurer to
conduct business in the United States would not be
hazardous to United States cedants and creditors of the
reinsurer or to the general public; and
(B) financial, management, and operational
information on all entities that directly or indirectly
control the reinsurer, as the Administrator shall
provide.
(9) Insurance experience.--The foreign reinsurer shall--
(A) have been actively and continuously engaged in
the business of insurance for a period of not less than
3 years ending upon the submission of an application
under section 204;
(B) be a wholly owned subsidiary of an insurer and
have been actively and continuously engaged in the
business of insurance for a period of not less than 3
years ending upon the submission of an application
under section 204; or
(C) be the continuing corporation resulting from a
merger or consolidation of insurers, at least one of
which has been actively and continuously engaged in the
business of insurance for a period of not less than 3
years ending upon the submission of an application
under section 204.
(10) Other.--The foreign reinsurer shall meet any other
requirements as the Administrator may provide.
SEC. 206. FINANCIAL STATEMENTS AND EXAMINATIONS.
(a) Financial Statements.--
(1) In general.--The Administrator shall establish
standards under this subsection requiring foreign insurers and
foreign reinsurers to submit financial statements to the
Administrator.
(2) GAAP principles.--The standards shall require that each
financial statement comply with generally accepted accounting
principles and be developed in accordance with such principles.
(3) Independent audit.--Each financial statement shall
include an audit conducted by a independent certified public
accountant or other qualified independent auditor in accordance
with generally accepted accounting principles.
(4) Timing.--The Administrator shall require submission of
a financial statement under this subsection by--
(A) each insurer and each reinsurer applying for
certification under section 202 or 204, as applicable;
and
(B) each certified direct insurer and each
certified reinsurer, on an annual basis.
(5) Additional information.--The Administrator may at any
time require any foreign insurer or foreign reinsurer to submit
to the Administrator, in addition to the information contained
in a financial statement under this subsection, financial
information that the Administrator considers reasonable and
necessary to determine the financial condition of the insurer
or reinsurer.
(b) Examinations.--
(1) In general.--The Administrator shall establish
standards under this subsection for examinations of foreign
insurers and foreign reinsurers to determine their financial
condition.
(2) Timing.--The Administrator--
(A) shall conduct an examination under this
subsection of each insurer and each reinsurer applying
for certification under section 202 or 204; and
(B) may conduct an examination of an insurer or a
reinsurer at any time the Director considers an
examination reasonable and necessary to determine the
financial condition of the insurer or reinsurer.
(3) Expense.--The Administrator shall assess any costs of
an examination under this section against the foreign insurer
or foreign reinsurer examined and shall collect such amounts.
SEC. 207. DECERTIFICATION.
The Administrator may suspend or revoke the certification of
certified foreign insurers and reinsurers if the Administrator
determines that such an insurer or a reinsurer fails to comply with the
requirements of this title and the standards established pursuant to
this title. The Administrator shall establish standards for suspending
and revoking such certifications under this section.
SEC. 208. GAO AUDITS.
The Comptroller General of the United States shall audit the
operations of the Administrator carried out under this title in
accordance with generally accepted Government auditing standards. All
books, records, accounts, reports, files, and property belonging to, or
used by, the Administrator shall be made available to the Comptroller
General. Audits under this section shall be conducted upon the
expiration of the 1-year period beginning upon the date of the
effectiveness of this title and biennially thereafter. Upon the
conclusion of each audit under this section, the Comptroller General
shall submit a report describing the audit to the Committee on Banking,
Finance and Urban Affairs of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate.
SEC. 209. NATIONAL INSURANCE INTELLIGENCE DATABASE.
(a) In General.--The Administrator shall collect information
regarding individuals and other persons that have engaged in, or that
the Administrator has reason to believe to have engaged in, illegal
activity relating to insurance or reinsurance activities. The
Administrator shall establish a computer-based database of such
information and shall regularly update the database.
(b) Law Enforcement Access.--The Administrator shall make
information from the database under this section available to
appropriate Federal and State law enforcement and regulatory agencies
upon request.
(c) Confidentiality.--Except as provided in subsection (b),
notwithstanding any other law, regulation, ordinance, any agreement,
any judgment or order of any court, tribunal, or other officer, or any
other legal process, the Administrator may not disclose any information
from the database under this section.
SEC. 210. PENALTIES.
(a) Civil Money Penalty.--Any person or insurer who knowingly fails
to comply with any provision of this title shall be subject to a civil
penalty, imposed by the Administrator, in an amount not to exceed
$1,000,000.
(b) Criminal Offense.--Whoever knowingly submits information
required under this title to the Administrator that is false and
misleading shall be fined under title 18, United States Code, or
imprisoned not more than 30 years, or both.
SEC. 211. DEFINITIONS.
For purposes of this title:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Federal Insurance Administration, as
established under section 101.
(2) Certified direct insurer and certified reinsurer.--The
terms ``certified direct insurer'' and ``certified reinsurer''
mean a foreign insurer certified under section 202 and a
foreign reinsurer certified under section 204, respectively.
(3) Control.--The term ``control'' means direct or indirect
possession of the power to direct or cause the direction of the
management and policies of a person, including through the
ownership of voting securities, by contract other than a
commercial contract for goods or nonmanagerial services, or
otherwise, unless the power is the result of an official
position with or corporate office held by the person.
(4) Direct insurer.--The term ``direct insurer'' means a
foreign insurer that accepts United States direct risk pursuant
to a State surplus or excess lines law. The term does not
include foreign insurers accepting United States direct risks
by other lawful means.
(5) Foreign insurer.--The term ``foreign insurer'' means an
insurer or reinsurer other than--
(A) an insurer or reinsurer organized under the
laws of any State or Canada; and
(B) the United States branch of a foreign insurer.
The term includes insurers and reinsurers doing business as
single insurers, groups of individual unincorporated
underwriters, and groups of incorporated insurers under common
administration.
(6) Foreign reinsurer.--The term ``foreign reinsurer''
means a foreign insurer that assumes, from an insurer or
reinsurer licensed by any State, all or any portion of risks
undertaken by the licensed insurer. The term does not include a
foreign insurer that--
(A) assumes only risks arising out of the insuring
of the company or other person that owns the insurer or
of which the insurer is a subsidiary or affiliate; and
(B) does not undertake any other business that is
not related to the company or other person that owns
the insurer or of which the insurer is a subsidiary or
affiliate.
(7) Letter of credit.--The term ``letter of credit'' means
a clean irrevocable letter of credit issued or confirmed by a
qualified financial institution, in a form prescribed by the
Administrator.
(8) Readily marketable securities.--The term ``readily
marketable securities'' means securities registered for trading
on a national securities exchange in accordance with section 12
of the Securities Exchange Act of 1934 and any other securities
approved by the Administrator.
(9) State.--The term ``State'' means the States of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Mariana Islands,
Guam, the Virgin Islands, American Samoa, the Trust Territory
of the Pacific Islands, and any other territory or possession
of the United States.
(10) United states branch of foreign insurer.--The term
``United States branch of foreign Insurer'' means the business
unit through which insurance business is transacted within the
United States by a foreign insurer and whose assets and
liabilities pertaining to such business are within the United
States.
(11) United states direct written insurance obligations.--
The term ``United States direct written insurance obligations''
means obligations of a direct insurer for unearned premium and
unpaid claims, including incurred but not reported claims.
(12) United states reinsurance obligations.--The term
``United States reinsurance obligations'' means obligations to
insurers licensed by any State for reported claims, incurred
but not reported claims, unearned premium, losses and loss
adjustment expense, aggregate life reserves, and aggregate
reserves for accident and health risks.
SEC. 212. LIMITATION ON PREEMPTION.
This title may not be construed to preempt the law of any State,
except to the extent that such laws are inconsistent with the
provisions of this title, and then only to the extent of such
inconsistency. The Administrator is authorized to determine whether
such inconsistencies exist.
SEC. 213. EFFECTIVE DATE.
The provisions of this title shall take effect upon the expiration
of the 12-month period beginning on the date of the enactment of this
Act.
TITLE III--LIQUIDITY ASSISTANCE BY FEDERAL RESERVE BANKS TO WELL-
CAPITALIZED INSURANCE COMPANIES
SEC. 301. SHORT TITLE.
This title may be cited as the ``Insurance Liquidity and Solvency
Act of 1993''.
SEC. 302. CERTIFICATION OF ELIGIBILITY FOR LIQUIDITY ASSISTANCE.
(a) In General.--The Federal Insurance Administrator shall
establish standards under this section for determining the eligibility
of, and certifying, insurance companies for liquidity assistance
pursuant to section 13B of the Federal Reserve Act.
(b) Contents.--The standards under this section shall--
(1) establish guidelines for the types and manners of
organization of companies that may be certified under this
section;
(2) establish minimum financial resource and solvency
requirements for insurance companies that, in the determination
of the Administrator, ensure that any company complying with
such requirements is sufficiently capitalized for purposes of
obtaining liquidity assistance pursuant to section 13B of the
Federal Reserve Act; and
(3) provide that only insurance companies meeting or
exceeding the minimum financial requirements established under
paragraph (2) may be certified under this section.
(c) Compliance Reports From States.--No insurance company may be
certified under this section as eligible for liquidity assistance
pursuant to section 13B of the Federal Reserve Act until the
Administrator has reviewed any examinations and enforcement and
compliance reports received or requested from any State insurance
regulatory authority which has jurisdiction over such company, or any
activities conducted by such company.
(d) Examinations and Financial Statements.--In determining whether
insurance companies are eligible for certification under this section,
the Administrator may require insurance companies to submit financial
statements and may conduct examinations of insurance companies in the
same manner required and conducted with respect to foreign insurers and
reinsurers under section 206.
(e) Procedures for Certification of Eligible Companies.--
(1) In general.--The Administrator shall establish
procedures for certifying insurance companies as eligible for
liquidity assistance pursuant to section 13B of the Federal
Reserve Act.
(2) Availability of list.--The Administrator shall make
publicly available a list of the insurance companies certified
under this section as eligible for liquidity assistance
pursuant to such Act.
(f) Financial Resource and Solvency Requirements.--Before the end
of the 180-day period beginning on the date of the enactment of this
Act, the Administrator, in consultation with State insurance regulatory
authorities, shall establish the minimum financial resource and
solvency requirements for insurance companies under subsection (b)(2).
(g) Decertification.--The Administrator may suspend or revoke the
certification of an insurance company previously certified under this
section if the Administrator determines that the insurance company
fails to comply with the provisions of this section or the requirements
established under this section. The Administrator shall establish
standards for suspending and revoking such certifications under this
section.
SEC. 303. REQUESTS FOR LIQUIDITY ASSISTANCE.
(a) In General.--The Administrator shall establish standards and
procedures under this section for insurance companies certified under
section 302 to apply for the approval of the Administrator for a
request for liquidity assistance pursuant to section 13B of the Federal
Reserve Act and for the Administrator to approve such applications.
(b) Contents.--The standards established under this section shall
provide that the Administrator may approve an application for a request
for liquidity assistance pursuant to section 13B of the Federal Reserve
Act only if--
(1) the application is submitted by an insurance company
certified under section 302;
(2) the Administrator determines that the insurance company
submitting the request is threatened by a liquidity crisis
resulting from policyholder withdrawals;
(3) the Administrator determines that short-term credit is
not otherwise available to the insurance company; and
(4) the Administrator determines that such liquidity
assistance is appropriate for the company considering the
circumstances of the company and is likely to assist the
company in withstanding the liquidity crisis.
(c) Copies to Board and State Insurance Regulatory Authority.--Any
insurance company submitting an application under this section to the
Administrator for approval of a request for liquidity assistance shall
submit a copy of the application to the Board of Governors of the
Federal Reserve System and any appropriate State insurance regulatory
authority.
(d) Contents of Application.--Any application under this section
shall contain--
(1) evidence of the certification of the insurance company
under section 302; and
(2) a certification by the insurance company that, as of
the date of such application, the company is and, during the
12-month period ending on such date, has been in compliance
with the minimum financial resource and solvency requirements
of the Administrator established under section 302(b)(2) and
any appropriate State insurance regulatory authority.
SEC. 304. REPORT.
The Administrator shall submit an annual report to the Committee on
Banking, Finance and Urban Affairs of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of the Senate on--
(1) any insurance companies certified under section 302 or
denied certification under such section, during the year
covered by the report; and
(2) any insurance companies for which applications for
requests for liquidity assistance were approved or for which
such applications were denied, during the year covered by the
report.
SEC. 305. PROVISION OF LIQUIDITY ASSISTANCE TO INSURANCE COMPANIES BY
FEDERAL RESERVE BANKS.
The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended by
inserting after section 13A the following new section:
``SEC. 13B. PROCEDURES APPLICABLE TO LIQUIDITY ASSISTANCE TO INSURANCE
COMPANIES.
``(a) In General.--For the purpose of ensuring that liquidity
assistance is available on an objective basis to any well-capitalized
insurance company that is threatened by a liquidity crisis resulting
from policyholder withdrawals and the unavailability of short-term
credit, and in addition to any other procedure or condition established
under this Act, the procedures and conditions established under this
section shall apply to liquidity assistance provided by any Federal
Reserve bank under this Act to any insurance company certified and
approved under title III of the Federal Insurance Administration Act.
``(b) Eligibility.--An insurance company may obtain liquidity
assistance under this Act under the same terms and conditions as a
member bank, but only if the company is certified by the Federal
Insurance Administrator to be eligible for such assistance in
accordance with the procedures established under section 302 of the
Federal Insurance Administration Act and an application for a request
for such liquidity assistance has been approved by the Administrator in
accordance with the procedures established under section 303 of such
Act.
``(c) Terms and Conditions of Assistance.--
``(1) In general.--Liquidity assistance may be provided
under this Act by a Federal Reserve bank only in the amount,
and to the extent, that such assistance is requested in an
application approved by the Federal Insurance Administrator
under section 303 of the Federal Insurance Administration Act.
``(2) Comparable terms.--Any liquidity assistance provided
under this Act by any Federal Reserve bank to any insurance
company shall be made for such period of time and at such
financing costs as are generally applicable to advances to
depository institutions (as defined in section 19(b)(1)(A))
under sections 10, 10A, and 10B.
``(3) Notification of liquidity assistance and denial of
assistance to fia.--Any Federal Reserve bank which provides or
denies liquidity assistance under this Act to any insurance
company shall provide prompt notice of such assistance or
denial to the Federal Insurance Administrator any appropriate
State insurance regulatory authority, which shall include the
amount of assistance provided or denied and the reason for any
such denial.
``(d) Liquidity Assistance Defined.--For purposes of this section,
the term `liquidity assistance' means, with respect to any insurance
company--
``(1) any advance made by any Federal Reserve bank under
this Act to the insurance company; or
``(2) the discounting by any such bank under this Act of
any note, draft, bill, or other obligation issued, drawn, or
endorsed by the insurance company.
``(e) Regulations.--The Board shall prescribe such regulations as
the Board may determine to be appropriate to carry out the purposes of
this section.
``(f) Annual Report To Banking Committees.--The Board shall submit
an annual report to the Committee on Banking, Finance and Urban Affairs
of the House of Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate on any liquidity assistance provided by
any Federal Reserve bank to any insurance company during the year
covered by the report.''.
SEC. 306. REGULATIONS.
The Administrator may issue any regulations the Administrator
considers appropriate to carry out the duties of the Administrator
under this title.
TITLE IV--DISCLOSURE OF INSURANCE AVAILABILITY INFORMATION
SEC. 401. SHORT TITLE.
This title may be cited as the ``Insurance Disclosure Act''.
SEC. 402. FINDINGS AND CONSTRUCTION.
(a) Findings.--The Congress finds that--
(1) there are disparities in property and casualty
insurance coverage provided by some insurers between areas of
different incomes and racial composition;
(2) such disparities adversely affect the affordability and
availability of insurance for consumers;
(3) the lack of affordable and adequate insurance for
qualified consumers severely limits the ability of such
consumers to obtain credit for home, business, and automobile
purchases; and
(4) disclosures of insurance activities of insurers would
benefit consumers and insurance regulators without imposing any
undue burden on insurers.
(b) Construction.--Nothing in this title is intended to, nor shall
it be construed to, encourage unsound underwriting practices.
SEC. 403. MAINTENANCE OF INFORMATION AND PUBLIC DISCLOSURE.
(a) Designated Insurers.--Except as provided in section 404(e),
each insurer designated under section 407(a), which sells a line of
insurance designated under section 407(b) in a Metropolitan Statistical
Area or Consolidated Metropolitan Statistical Area (both hereafter in
this title referred to as an ``MSA'') designated by the Director of the
Office of Management and Budget, shall compile and make available for
each calendar year to the Federal Insurance Administrator (in
accordance with section 406 and regulations of the Administrator) and
to the public for inspection and copying at the home office or at a
central depository established under section 405 and at least one
branch office (if there is one) within such MSA--
(1) the number and total coverage amount of insurance
policies by designated line which were issued in such MSA;
(2) the number and total coverage amount of insurance
policies by designated line for which the insurer received a
completed application in such MSA;
(3) the number and total coverage amount of insurance
policies by designated line for which the insurer received a
completed application and which were not issued, in such MSA;
(4) the number and total coverage amount of insurance
policies by designated line which were renewed in such MSA;
(5) the number and total coverage amount of insurance
policies by designated line for which the insurer received a
completed application for renewal in such MSA;
(6) the number and total coverage amount of insurance
policies by designated line for which the insurer received a
completed application for renewal and which were not renewed,
in such MSA;
(7) the number and total coverage amount of insurance
policies by designated line which were canceled by the insurer,
in such MSA;
(8) the number of agents of such insurer whose principal
place of business is located in such MSA and the number within
each census tract or county, as applicable, in such MSA and
with respect to each such agent, whether such agent is an
employee, independent contractor working exclusively for such
insurer, or an independent contractor appointed to represent
such insurer on a nonexclusive basis;
(9) the number of agents of such insurer whose principal
place of business was located in such MSA but which was
relocated outside such MSA or whose agency was terminated, and
the number of such agents for each census tract or county, as
applicable, in such MSA; and
(10) the number of agents of such insurer whose principal
place of business was established at a location in such MSA and
the number of such agents for each census tract or county, as
applicable, in such MSA.
(b) Nondesignated Insurers.--Except as provided in section 404(e),
every insurer which sells an insurance policy in a designated line of
insurance in an MSA and which is not a designated insurer in such MSA
shall report for each calendar year to the Administrator (in accordance
with section 406 and regulations of the Administrator) the number of
insurance policies in a designated line sold in such MSA on an
annualized basis which adjusts for varying durations of insurance
policies sold--
(1) itemized by census tract for policies sold within any
county with a population of more than 30,000 within the MSA; or
(2) by county for insurance policies sold within any other
county in such MSA.
Such information shall be made available to the public on a timetable
determined by the Administrator but not later than September 1 of the
calendar year following the calendar year for which the information is
required to be reported.
SEC. 404. REQUIREMENTS.
(a) Content.--The information required to be maintained and made
available under section 403(a) shall--
(1) be itemized in order to clearly and conspicuously
disclose the number and coverage amount for each line of
insurance for which information is required by--
(A) census tracts for insurance policies within any
county with a population of more than 30,000 within the
MSA; or
(B) county for insurance policies within any other
county within such MSA;
(2) disclose for each designated line of insurance in an
MSA and, with respect to each such line, for each census tract
or county, as applicable, in the MSA--
(A) the total number of claims made which with
respect to property insurance shall be disaggregated by
the type and use of the property insured, which types
and uses shall include--
(i) properties consisting of 1 to 4
dwelling units;
(ii) properties consisting of more than 4
dwelling units;
(iii) owner-occupied properties;
(iv) rental properties; and
(v) vacant properties; and
(B) the total amount paid in claims which with
respect to property insurance shall be disaggregated by
the type and use of the property insured, which types
and uses shall include the types and uses described in
clauses (i) through (v) of subparagraph (A);
(3) disclose the standards and criteria used in
underwriting each designated line of insurance; and
(4) be made available to the public on a timetable
determined by the Administrator but not later than September 1
of the calendar year following the calendar year for which the
information is required to be made available.
(b) Itemization of Data.--With respect to insurance and
applications for which information is required to be maintained and
made available under section 403(a), the following information shall be
maintained and made available for each policy and each completed
application:
(1) The MSA for which such insurance is issued or applied
and within such MSA the census tract or county, as applicable,
for which such insurance is issued or requested.
(2) The designated insurer who issued such insurance or to
whom the application was made.
(3) The date of the issuance of such insurance.
(4) The line of the insurance which is designated and any
subline or class of such insurance.
(5) The type of insurance or policy form for which
applications are made and the types of insurance and policy
forms which are issued.
(6) The amount of coverage provided under such insurance
and any applicable deductibles.
(7) The amount of the premiums for such insurance.
(8) The durations of such insurance.
(9) The gender and racial characteristics of the applicants
for such insurance.
(10) A notation if such insurance was issued in a voluntary
or residual market.
(11) The date of, and reason for, any declination,
cancellation, or nonrenewal made for such insurance.
(12) With respect to property insurance, the market value
of the property insured and the type and use of property
insured.
(c) Period of Maintenance.--Any information required to be compiled
and made available under section 403 shall be maintained and made
available for a period of 5 years after the close of the first year
during which such information is required to be maintained and made
available.
(d) Format for Disclosures.--Subject to section 405, the
Administrator shall prescribe a standard format for making information
available as required by section 403. Such format shall encourage the
submission of information in a form readable by a computer.
(e) Exemptions.--
(1) Secretarial action.--The Administrator may by
regulation exempt from the requirements of section 403 any
insurer within any State if the Administrator determines that
under the laws of such State that such insurer is subject to
disclosure requirements on a census tract basis substantially
similar to those of section 403 and that such law contains
adequate provisions for enforcement.
(2) United states program.--Reporting shall not be required
under section 403 with respect to insurance provided by a
program underwritten or administered by the United States,
including the national flood insurance program under the
National Flood Insurance Act of 1968, the program for insurance
against burglary and theft under title XII of the National
Housing Act, and mortgage insurance under the National Housing
Act.
(f) Completed Application.--For purposes of section 403 and this
section, the Administrator shall define ``completed applications'' to--
(1) ensure that the disclosure required by such sections
appropriately reflects the characteristics of the applicants
interested in purchasing insurance in an MSA; and
(2) prevent insurers from evading the intent of such
sections through practices designed to discourage applicants
from completing applications.
SEC. 405. ACCESS SYSTEM.
(a) In General.--The Administrator shall implement a system to
facilitate access to information required to be maintained and made
available under section 403. Such system shall also include
arrangements for a publicly accessible central depository of
information in each MSA, as provided under subsection (b), and for a
telephone number which can be used by the public, at cost, to request
such information. Written statements containing such information shall
be made available to the public for inspection and copying at such
central depository of information for all designated insurers within
such MSA. The Administrator shall make copies of such statements
available in forms readable by widely used personal computers. The
Administrator may charge a fee for such information, which may not
exceed the amount, determined by the Administrator, that is equal to
the cost of producing the computer statements.
(b) Use of Home Mortgage Disclosure Act Depositories.--To the
extent practicable, the central depositories referred to in subsection
(a) shall be the central depositories established under section 304(f)
of the Home Mortgage Disclosure Act of 1975. The Federal Financial
Institutions Examination Council shall consult with the Administrator
regarding the use of such depositories and shall provide for the use of
such depositories to the extent agreed to by such Council and the
Administrator.
SEC. 406. SUBMISSION TO ADMINISTRATOR.
The information referred to in section 403 shall be submitted to
the Administrator. The Administrator shall develop regulations
prescribing--
(1) the format for making such information available;
(2) the method for submission of such information; and
(3) the procedures for making the information available to
the public.
Any reporting insurer may submit in writing to the Administrator such
additional data or explanations as it deems relevant to the decision by
such insurer to sell insurance.
SEC. 407. DESIGNATIONS.
(a) Designation of Insurers.--For each MSA, the Administrator shall
take the following actions:
(1) The Administrator shall annually designate the insurers
transacting insurance business in such MSA for which reporting
is required under section 403. At a minimum, the Administrator
shall annually designate the 25 insurers in such MSA having the
largest premium volume in the designated lines of insurance.
(2) The Administrator shall also annually designate any
entity providing insurance in a designated line of insurance as
part of a residual market established by State law.
(3) The Administrator may designate additional insurers on
the basis of such criteria as the Administrator may by
regulation develop. Such a regulation shall be issued in
accordance with section 553 of title 5, United States Code. In
considering whether to designate additional insurers, the
Administrator shall ensure that--
(A) insurers who specialize in selling insurance in
urban areas, including surplus lines insurers, are
specifically considered for designation notwithstanding
their premium volume; and
(B) insurers representing at least 90 percent of
the premium volume in the designated lines of insurance
are designated in such MSA.
(b) Designation of Lines of Insurance.--For each MSA, the
Administrator shall designate the lines of insurance sold in such MSA
for which reporting is required under section 403. At a minimum, the
Administrator shall annually designate private mortgage insurance and
the following lines of property and casualty insurance:
(1) Private passenger automobile insurance (including
appropriate sublines and classes).
(2) Property insurance which does not cover commercial
property (including homeowners, fire, burglary and theft, and
other lines, and appropriate sublines and classes and related
coverages such as coverage of property contents and property
insured at full replacement value or market value).
(3) Commercial insurance for small business.
The Administrator may designate additional lines of insurance on the
basis of such criteria as the Administrator may by regulation develop.
Such a regulation shall be issued in accordance with section 553 of
title 5, United States Code. For purposes of this title, the
designation of a line of insurance includes a designation of a subline
or class of insurance.
(c) Timing of Designations.--The Administrator shall make the
annual designations required by subsections (a) and (b) no later than
September 1 of the year preceding the year for which reporting is
required under section 403. The Administrator shall notify persons
involved in the designations no later than the October 1 which follows
the designation.
(d) Obtaining Information.--The Administrator may obtain from
insurers such information as the Administrator may require to make
designations under this section.
SEC. 408. DISCLOSURES TO REJECTED APPLICANTS.
(a) In General.--Except as provided in subsection (e), the
Administrator shall, by regulations issued under section 553 of title
5, United States Code--
(1) require insurers to provide to each applicant for
insurance in a designated line--
(A) reasons for denying an application for such
insurance or for canceling or not renewing a policy in
force; and
(B) actions the applicant may take to qualify for
such insurance; and
(2) restrict the use insurers may make of information
relating to--
(A) adverse underwriting decisions; or
(B) insurance coverage in a residual market.
(b) Model Acts.--In issuing regulations under subsection (a), the
Administrator shall consider relevant portions of model acts developed
by the National Association of Insurance Commissioners.
(c) Enforcement.--The Administrator may delegate to the States the
authority to enforce the requirements of regulations issued under
subsection (a).
(d) Preemption.--Subsection (a) is not to be construed to preempt
any State from imposing on insurers requirements of the type stated in
such subsection, including requirements which are more stringent or
more comprehensive.
(e) Exemption.--A regulation issued under subsection (a) may not
apply to insurance provided under a program underwritten or
administered by the United States, including the national flood
insurance program under the National Flood Insurance Act of 1968, the
program for insurance against burglary and theft under title XII of the
National Housing Act, and mortgage insurance under the National Housing
Act.
(f) Definition.--For purposes of subsection (a)(2)(A), an adverse
underwriting decision means any of the following actions with respect
to insurance transactions involving insurance coverage which is
individually underwritten:
(1) A declination of insurance coverage.
(2) A termination of insurance coverage.
(3) Failure of an agent to apply for insurance coverage
with a specific insurance entity which the agent represents and
which is requested by the applicant.
(4) In the case of property or casualty insurance
coverage--
(A) placement by an insurance entity or agent of a
risk with a residual market mechanism, an unauthorized
insurer, or an insurance entity which specializes in
substandard risks; or
(B) the charging of higher rates on the basis of
information which differs from that which the applicant
or policyholder furnished.
SEC. 409. TERMINATION OF AGENTS.
(a) Regulations.--Except as provided in subsection (d), the
Administrator shall, by regulation issued under section 553 of title 5,
United States Code, ensure that the practices of insurers in
terminating agents who handle private mortgage insurance or property or
casualty insurance do not result in an inappropriate effect on the
availability or affordability of insurance from such insurers. Such
regulations shall specifically ensure that such practices do not result
in unfair discrimination against agents as a result of their geographic
locations or of the geographic locations of their clients. Regulations
under this subsection shall be stated in terms of minimum standards.
(b) Preemption.--Subsection (a) may not be construed to preempt any
State from imposing on insurers requirements of the type stated in such
subsection, including requirements which are more stringent or more
comprehensive.
(c) Enforcement.--The Administrator may delegate to the States the
enforcement of such regulations.
(d) Exemption.--A regulation issued under subsection (a) may not
apply to insurance provided under a program underwritten or
administered by the United States, including the national flood
insurance program under the National Flood Insurance Act of 1968, the
program for insurance against burglary and theft under title XII of the
National Housing Act, and mortgage insurance under the National Housing
Act.
SEC. 410. IMPLEMENTATION.
(a) In General.--The Administrator shall prescribe such regulations
as may be necessary to carry out sections 403 through 406. Such
regulations may contain such classifications, differentiations, or
other provisions, and may provide for such adjustments and exceptions
for any class of transactions, as in the judgment of the Administrator
are necessary and proper to effectuate the purposes of such section and
to prevent circumvention or evasion thereof or to facilitate compliance
therewith.
(b) Burdens.--In prescribing regulations under subsection (a), the
Administrator shall take into consideration the administrative,
paperwork, and other burdens on insurance agents, including independent
insurance agents, involved in complying with the requirements of
sections 403 through 406 and shall minimize the burdens imposed by such
requirements with respect to such agents.
SEC. 411. IMPROVED METHODS.
The Administrator shall develop, or assist in the improvement of,
methods of matching addresses and census tracts to facilitate
compliance by insurers, in as economical a manner as possible, with the
requirements of this title.
SEC. 412. COMPILATION OF AGGREGATE DATA.
(a) Scope of Data and Tables.--The Administrator shall compile each
year, for each MSA, aggregate data by census tract for all insurers who
are subject to section 403 or who are exempt from section 403 under the
provisions of section 404(e)(1) of such section. The Administrator
shall also produce tables indicating, for each MSA, aggregate insurance
underwriting patterns for various categories of census tracts grouped
according to location, age of property, income level, and racial
characteristics.
(b) Availability to Public.--The data compiled and the tables
produced pursuant to subsection (a) shall be made available to the
public on a timetable determined by the Administrator but not later
than December 1 of the year following the calendar year on which the
data and tables are based. The data shall be made available using the
system implemented under section 405, in the forms required under such
section, and subject to the provisions of such section.
SEC. 413. TESTERS.
The Administrator may utilize employees and officers of the Federal
Insurance Administration and may provide advice and technical
assistance to State and local government agencies and public and
private entities (including nonprofit organizations), to develop,
implement, carry out, or coordinate programs or activities designed
to--
(1) prevent or eliminate discriminatory insurance
practices; or
(2) obtain enforcement of Federal and State laws
prohibiting discriminatory insurance practices.
SEC. 414. REPORT.
The Administrator shall report to the Committee on Banking, Finance
and Urban Affairs of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate on the implementation
of this title, any activities carried out pursuant to section 413, and
shall make recommendations to such committees on such additional
legislation as the Administrator deems appropriate to carry out this
title.
SEC. 415. ENFORCEMENT.
(a) Civil Penalties.--An insurer who does not comply with the
requirements of sections 403 through 406, or a regulation issued under
section 408 or 409, shall be subject to a civil penalty of not to
exceed $5,000 for each day during which such violation continues.
(b) Injunction.--The district courts of the United States shall
have jurisdiction over a petition of the Administrator to enjoin an
insurer from actions which are in violation of the requirements of
sections 403 through 406 or of a regulation issued under section 408 or
409.
SEC. 416. RELATION TO STATE LAWS.
This title does not annul, alter, affect, or exempt the obligation
of any insurer subject to this title to comply with the laws of any
State or subdivision thereof with respect to public disclosure and
recordkeeping.
SEC. 417. DEFINITIONS.
For purposes of this title:
(1) The term ``Administrator'' means the Federal Insurance
Administrator.
(2) The term ``commercial insurance'' means any line of
property and casualty insurance, except private passenger
automobile and homeowner's insurance.
(3) The term ``designated insurer'' means an insured
designated by the Administrator under section 407(a).
(4) The term ``designated line'' means a line of insurance
designated by the Administrator under section 407(b).
(5) The term ``insurer'' means any corporation,
association, society, order, firm, company, partnership,
individual, or aggregation of individuals which is subject to
examination or supervision by any State insurance regulator, or
which is doing or represents an insurance business.
(6) The term ``private mortgage insurance'' means insurance
against the nonpayment of, or default on, a mortgage or loan
for residential or commercial property, except that such term
does not include mortgage insurance made available under the
National Housing Act.
(7) 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.
(8) The term ``residual market'' means an assigned risk
plan, joint underwriting association, or any similar mechanism
designed to make insurance available to those unable to obtain
it in the voluntary market.
(9) 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. 418. EFFECTIVE DATE.
The requirements of this title shall take effect with respect to
calendar year 1994.
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Introduced in House
Introduced in House
Referred to the House Committee on Banking, Finance + Urban Affrs.
Sponsor introductory remarks on measure. (CR E579-580)
Referred to the Subcommittee on Consumer Credit and Insurance.
Subcommittee Hearings Held.
Subcommittee Hearings Held.
Subcommittee Consideration and Mark-up Session Held.
Forwarded by Subcommittee to Full Committee (Amended).
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended) by the Yeas and Nays: 30 - 19.
Sponsor introductory remarks on measure. (CR E2250)
Reported (Amended) by the Committee on Banking, Finance + Urban Affrs. H. Rept. 103-302, Part I.
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Reported (Amended) by the Committee on Banking, Finance + Urban Affrs. H. Rept. 103-302, Part I.
Referred sequentially to the House Committee on Energy and Commerce for a period ending not later than Nov. 19, 1993 for consideration of such provisions of the bill and amendment as fall within the jurisdiction of the committee pursuant to clause 1(h), rule X.
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended) by Voice Vote.
Reported (Amended) by the Committee on Energy and Commerce. H. Rept. 103-302, Part II.
Reported (Amended) by the Committee on Energy and Commerce. H. Rept. 103-302, Part II.
Placed on the Union Calendar, Calendar No. 166.