Insurance Disclosure Act - Directs the Secretary of Housing and Urban Development (the Secretary) to establish requirements for insurers to compile and submit information to the Secretary for each annual reporting period concerning the affordability and availability of insurance coverage for: (1) noncommercial insurance; (2) commercial insurance for residential properties and small businesses in urban areas; (3) bid, performance, and payment bonds for small businesses; and (4) insurance in designated rural areas.
Authorizes the Secretary to waive such disclosure requirements if the State within which the insurer transacts business has an equivalent disclosure mechanism in place.
Directs the Financial Institutions Examination Council to determine the extent to which private mortgage insurers make available to the public and to regulatory agencies the mortgage information required to be reported under the Home Mortgage Disclosure Act of 1975.
Provides for contracting out such data collection or submission of such data through statistical agents.
Directs the Secretary to set forth specified annual disclosure requirements for loans and investments made by designated insurers in a designated metropolitan statistical area.
Prescribes guidelines for: (1) the compilation and public accessibility of the disclosures mandated by this Act; and (2) written notification by an insurer to applicants and policyholders regarding the reasons that coverage was denied.
Sets forth civil penalties for insurers in violation of this Act.
Directs the Secretary to establish a task force to report to certain congressional committees on insurance agency appointments affecting inner city and minority agents.
Requires the Secretary to conduct studies and report to certain congressional committees on: (1) prescreening of insurance applicants; (2) insurer practices affecting the insurance needs of low- and moderate-income neighborhoods, minority neighborhoods, and small businesses located in such neighborhoods; (3) disparate treatment of policyholders by insurers based upon sex, race, or income level; (4) the disparate impact upon policyholders of basing insurance premiums upon the territory in which the insured risk is located; and (5) community reinvestment requirements for insurers that are comparable to those for depository institutions.
[Congressional Bills 103th Congress]
[From the U.S. Government Printing Office]
[H.R. 3169 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 3169
To provide for public access to information regarding the availability
of insurance, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 29, 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 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 ``Insurance
Disclosure Act''.
(b) Table of Contents.--
Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Establishment of general requirements to submit information.
Sec. 4. Reporting of noncommercial insurance information.
Sec. 5. Study of commercial insurance for residential properties and
small businesses.
Sec. 6. Reporting of bid, performance, and payment bonds for small
businesses.
Sec. 7. Reporting of rural insurance information.
Sec. 8. Waiver of reporting requirements.
Sec. 9. Reporting by private mortgage insurers.
Sec. 10. Use of data contractor and statistical agents.
Sec. 11. Reporting of information regarding investments by insurers.
Sec. 12. Submission of information to Secretary and maintenance of
information.
Sec. 13. Compilation of aggregate information.
Sec. 14. Availability and access system.
Sec. 15. Designations.
Sec. 16. Improved methods and reporting on basis of other areas.
Sec. 17. Annual reporting period.
Sec. 18. Disclosures by insurers to applicants and policyholders.
Sec. 19. Enforcement.
Sec. 20. Reports.
Sec. 21. Task force on agency appointments.
Sec. 22. Studies.
Sec. 23. Exemption and relation to State laws.
Sec. 24. Regulations.
Sec. 25. Definitions.
Sec. 26. Effective date.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) there are disparities in insurance coverage provided by
some insurers between areas of different incomes and racial
composition;
(2) such disparities in affordability and availability of
insurance severely limit the ability of qualified consumers to
obtain credit for home, business, and automobile purchases; and
(3) the lack of affordable and adequate commercial
insurance for small businesses severely curtails the
establishment and growth of such businesses.
(b) Purposes.--The purposes of this Act are--
(1) to establish a nationwide database for determining the
availability, affordability, and adequacy of insurance coverage
for consumers and small businesses;
(2) to facilitate the enforcement of Federal and State laws
that prohibit illegally discriminatory insurance practices; and
(3) to determine whether the extent and characteristics of
insurance availability, affordability, and coverage require
public officials to take any actions (A) to remedy redlining or
other illegally or unfairly discriminatory insurance practices,
or (B) regarding areas underserved by insurers.
(c) Construction.--Nothing in this Act is intended to, nor shall it
be construed to, encourage unsound underwriting practices.
SEC. 3. ESTABLISHMENT OF GENERAL REQUIREMENTS TO SUBMIT INFORMATION.
(a) In General.--The Secretary of Housing and Urban Development
shall, by regulation, establish requirements for insurers to compile
and submit information to the Secretary for each annual reporting
period, in accordance with this Act.
(b) Consultation.--In establishing the requirements for the
submission of information under this Act, the Secretary shall consult
with Federal agencies having appropriate expertise, the National
Association of Insurance Commissioners, State insurance regulators,
statistical agents, representatives of small businesses,
representatives of insurance agents (including minority insurance
agents), representatives of property and casualty insurers, and
community, consumer, and civil rights organizations, as appropriate.
SEC. 4. REPORTING OF NONCOMMERCIAL INSURANCE INFORMATION.
(a) In General.--The requirements established pursuant to section 3
to carry out this section shall--
(1) be designed to ensure that information is submitted and
compiled under this section as may be necessary to permit
analysis and comparison of--
(A) the availability and affordability of insurance
coverage and the quality or type of insurance coverage,
by MSA and applicable region and race and gender of
policyholders; and
(B) the location of the principal place of business
of insurance agents and the race of such agents, and
the location of the principal place of business of
insurance agents terminated and the race of such
agents, by MSA and applicable region; and
(2) specify the data elements required to be reported under
this section and require uniformity in the definitions of the
data elements.
(b) Designated Insurers.--
(1) Aggregate information.--The regulations issued under
section 3 shall require that each designated insurer for a
designated line of insurance under subparagraph (A) or (B) of
section 15(c)(1) compile and submit to the Secretary, for each
annual reporting period--
(A) the total number of policies issued in such
line, total exposures covered by such policies, and
total amount of premiums for such policies, by
designated line and by designated MSA and applicable
region in which the insured risk is located;
(B) the total number of cancellations and
nonrenewals (expressed in terms of policies or
exposures, as determined by the Secretary), by
designated line and by designated MSA and applicable
region in which the insured risk is located;
(C) the total number and racial characteristics
of--
(i) licensed agents of such insurer selling
insurance in the designated line, by designated
MSA and applicable region in which the agent's
principal place of business is located; and
(ii) such agents who were terminated by the
insurer, by designated MSA and applicable
region in which the agent's principal place of
business was located; and
(D) for such designated line of insurance,
information that will enable the Secretary to assess
the aggregate loss experience for the insurer, by
designated MSA and applicable region in which the
insured risk is located.
(2) Specification of information for itemized disclosure.--
(A) In general.--The regulations issued under
section 3 regarding annual reporting requirements for
designated insurers for a designated line of insurance
under subparagraph (A) or (B) of section 15(c)(1)
shall, with respect to policies issued under the
designated line or exposure units covered by such
policies, as determined by the Secretary--
(i) specify the data elements that shall be
submitted;
(ii) provide for the submission of
information on an individual insurer basis;
(iii) provide for the submission of the
information with the least burden on insurers,
particularly small insurers, and insurance
agents;
(iv) take into account existing statistical
reporting systems in the insurance industry;
(v) require reporting by MSA and applicable
region in which the insured risk is located;
(vi) provide for the submission of
information that identifies the designated
line, and subline or coverage type;
(vii) provide for the submission of
information that distinguishes policies written
in a residual market from policies written in
the voluntary market;
(viii) specify--
(I) whether information shall be
submitted on the basis of policy or
exposure unit; and
(II) whether information, when
submitted, shall be aggregated by like
policyholders with like policies,
except that the Secretary shall not
permit such aggregation if it will
adversely affect the accuracy of the
information reported;
(ix) provide for the submission of
information regarding the number of
cancellations and nonrenewals of policies under
the designated line by MSA and applicable
region in which the insured risk is located, by
race and gender of the policyholder (if known
to the insurer), and by whether the policy was
issued in a voluntary or residual market; and
(x) provide for the submission of
information on the racial characteristics and
gender of policyholders at the level of detail
comparable to that required by the Home
Mortgage Disclosure Act of 1975 (and the
regulations issued thereunder).
(B) Rules regarding obtaining racial information.--
With respect to the information specified in clause
(x), applicants for, and policyholders of, insurance
may be asked their racial characteristics only in
writing. Any such written question shall clearly
indicate that a response to the question is voluntary
on the part of the applicant or policyholder, but
encouraged, and that the information is being requested
by the Federal Government to monitor the availability
and affordability of insurance. If an applicant for, or
policyholder of, insurance declines to provide such
information, the agent or insurer for such insurance
may provide such information.
(3) Rule for reporting by designated insurers.--A
designated insurer for a designated line shall submit--
(A) information required under subparagraphs (A),
(B), and (D) of paragraph (1) and information required
pursuant to paragraph (2), for risks insured under such
line that are located within each designated MSA any
part of which is located in a State for which the
insurer is designated; and
(B) information required under paragraph (1)(C) for
agents within such designated MSA's.
(c) Nondesignated Insurers.--The regulations issued under section 3
shall require each insurer that issues an insurance policy in a
designated line of insurance under subparagraph (A) or (B) of section
15(c)(1) that covers an insured risk located in a designated MSA and
which is not a designated insurer for the line in any State in which
any part of such MSA is located, to compile and submit to the
Secretary, for each annual reporting period--
(1) the total number of policies issued in such line,
(2) the total exposures covered by such policies, and
(3) the total amount of premiums for such policies,
by designated MSA and applicable region in which the insured risk is
located.
SEC. 5. STUDY OF COMMERCIAL INSURANCE FOR RESIDENTIAL PROPERTIES AND
SMALL BUSINESSES.
(a) In General.--The Secretary shall conduct a study to determine
the availability, affordability, and quality or types of commercial
insurance coverage for residential properties and small businesses, in
urban areas.
(b) Submission of Information.--To acquire information for the
study under this section, the Secretary shall, by regulation, establish
requirements for insurers providing commercial insurance for
residential properties and small businesses to compile and submit to
the Secretary on an annual basis information regarding such insurance,
as follows:
(1) MSA's.--The Secretary shall carry out the study only
with respect to the 25 MSA's having the largest populations, as
determined by the Secretary and specified in the regulations
under this section.
(2) Insurers.--For each of the MSA's specified pursuant to
paragraph (1), the Secretary shall designate the insurers
required to submit the information. The Secretary shall
designate a sufficient number of insurers to provide a
representative sample of the insurers providing such insurance
in each such MSA.
(3) Lines of insurance.--The Secretary shall require the
submission of information regarding such lines, sublines, or
coverage types of commercial insurance as the Secretary
determines are necessary or important with respect to
establishing, operating, or maintaining residential properties
and each type of small business selected under paragraph (4),
and shall require submission of such information by such lines,
sublines, or coverage types.
(4) Small businesses.--For purposes of paragraph (3), the
Secretary shall determine the types of businesses that are
typically small businesses and shall select a representative
sample of such types.
(5) Data elements.--The Secretary shall identify the data
elements required to be submitted.
(6) Submission by location.--The Secretary shall require
the information to be submitted by designated MSA and
applicable region in which the insured risk is located.
(7) Submission by insurer.--The Secretary shall require the
submission of information on an individual insurer basis and
shall specify whether information, when submitted, shall be
aggregated by like policies, except that the Secretary shall
not permit such aggregation if it will adversely affect the
accuracy of the information reported.
(8) Sunset.--The Secretary shall require the submission of
information under this section only for each of the first 5
annual reporting periods beginning more than 36 months after
the date of the enactment of this Act.
(c) Considerations.--In establishing the requirements for
submission of information under this section, the Secretary shall--
(1) take into consideration the administrative, paperwork,
and other burdens on insurers and insurance agents involved in
complying with the requirements of this section;
(2) minimize the burdens imposed by such requirements with
respect to such insurers and agents; and
(3) take into consideration existing statistical reporting
systems in the insurance industry.
(d) Report.--Not later than 6 months after the expiration of the 5-
year period referred to in subsection (b)(8), the Secretary shall
submit a report to the Congress describing the information submitted
under the study conducted under this section and any findings of the
Secretary from the study regarding disparities in the availability,
affordability, and quality or types of commercial insurance coverage
for residential properties and small businesses, in urban areas.
SEC. 6. REPORTING OF BID, PERFORMANCE, AND PAYMENT BONDS FOR SMALL
BUSINESSES.
(a) In General.--The Secretary shall by regulation establish
requirements in accordance with section 3 for insurers to compile and
submit to the Secretary, for each annual reporting period, information
regarding bid, performance, and payment bonds for small businesses, by
lines designated under subparagraph (C) of section 15(c)(1), that is
similar to the information required to be submitted under section 4.
(b) Contents.--The regulations under this section shall provide
for--
(1) designation of insurers required to submit the
information, pursuant to standards comparable to the standards
for designation under section 15(b), and submission of the
information on an individual insurer basis;
(2) identification of data elements required to be
submitted;
(3) the information to be submitted by designated MSA and
applicable region;
(4) the information to be submitted in a manner similar to
that required for information submitted under section 4;
(5) an appropriate definition of small businesses; and
(6) the information to be submitted for each annual
reporting period.
SEC. 7. REPORTING OF RURAL INSURANCE INFORMATION.
(a) In General.--The Secretary shall, by regulation, establish
requirements for insurers to annually compile and submit to the
Secretary information concerning the availability, affordability, and
quality or type of insurance in designated rural areas in the lines
designated under subparagraphs (A) and (B) of section 15(c)(1).
(b) Content.--The regulations under this section shall provide
that--
(1) the information to be compiled and submitted under this
section by designated insurers and insurers that are not
designated insurers shall be of such types, data elements, and
specificity that is as identical as possible to the types, data
elements, and specificity of information required under this
Act of designated and nondesignated insurers, respectively, for
designated MSA's and shall be subject to the provisions of
section 4(b)(2)(B); and
(2) the information compiled and submitted under this
section shall be compiled and submitted on the basis of each 5-
digit zip code in which the insured risks are located, rather
than on the basis of designated MSA and applicable region (as
otherwise required in this Act).
(c) Designation of Rural Areas.--For purposes of this section, the
term ``designated rural area'' means the following:
(1) First 5 years.--With respect to the first 5 annual
reporting periods to which the reporting requirements under
this section apply, any of the 50 rural areas designated by the
Secretary and specified in regulations issued pursuant to
section 24, which shall not be amended or revised after
issuance. The Secretary shall (to the extent possible)
designate 1 rural area under this paragraph in each State of
the United States.
(2) After first 5 years.--With respect to annual reporting
periods thereafter, a rural area for which a designation made
by the Secretary under this paragraph is in effect, pursuant to
the following requirements:
(A) The designations shall be made for each of the
successive 5-year periods at the time provided in
subparagraph (C), and the first such period shall be
the 5-year period beginning upon the commencement of
the 6th annual reporting period to which the reporting
requirements under this Act apply.
(B) The Secretary shall designate 50 rural areas as
designated rural areas for each such 5-year period and
shall designate such rural areas based upon the
information and recommendations made in the report
under section 20(b) relating to the period.
(C) The Secretary shall make the designation of
rural areas for an ensuing 5-year period by regulations
issued--
(i) not later than the date occurring 12
months before the commencement of the 5-year
period; and
(ii) not later than 6 months after the
submission to the Secretary of the report under
section 20(b) relating to such period.
(D) The designations for a 5-year period shall take
effect upon the commencement of the first annual
reporting period of the 5-year period that begins at
least 12 months after the issuance of the regulations
making such designations, and shall remain in effect
until the expiration of the 5-year period.
Notwithstanding any other provision of this section, the designation of
a rural area shall remain in effect until a succeeding designation of
rural areas under paragraph (2) takes effect.
SEC. 8. WAIVER OF REPORTING REQUIREMENTS.
(a) Waiver for States Collecting Equivalent Information.--
(1) Authority.--Subject to the requirements under this
section, the Secretary shall provide, by regulation, for the
waiver of the applicability of the provisions of sections 4, 5,
and 7 for each insurer transacting business within a State
referred to in paragraph (2), but only with respect to
information required to be submitted under such sections that
relates to agents or insured risks located in the State.
(2) Requirements.--The Secretary may make a waiver pursuant
to paragraph (1) only with respect to a State that the
Secretary determines has in effect a law or other requirement
that--
(A) requires insurers to submit to the State
information that is at least the same or equivalent to
the information that is required to be submitted to the
Secretary pursuant to sections 4, 5, and 7;
(B) provides for adequate enforcement of such law
or other requirements;
(C) provides for the same annual reporting period
used by the Secretary under this Act and for submission
of the information to the Secretary in a timely
fashion, as determined by the Secretary; and
(D) provides that, to the extent statistical agents
are permitted to submit information to the State on
behalf of insurers, such agents are subject to the same
or equivalent requirements as provided under section
10(b).
(3) Duration.--A waiver pursuant to paragraph (1) may
remain in effect only during the period for which the State law
or other requirement required under paragraph (2) remains in
effect.
(b) Multiple-State MSA's.--In the case of any designated MSA that
contains area within (1) any State for which a waiver has been made
pursuant to subsection (a), and (2) any State for which such a waiver
has not been made, the provisions of this Act requiring submission of
information to the Secretary regarding such MSA shall be considered to
apply only to the portion of such MSA that is located within the State
for which such a waiver has not been made.
(c) Authority for Secretary to Obtain Information Directly From
Insurers.--If the State for which a waiver has been made pursuant to
subsection (a) does not submit to the Secretary the information
required under subsection (a)(2)(A) or submits information that is not
complete, the Secretary shall require the insurers transacting business
within the State to submit such information directly to the Secretary.
SEC. 9. REPORTING BY PRIVATE MORTGAGE INSURERS.
(a) HMDA Reporting.--On an annual basis, the Financial Institutions
Examination Council shall determine the extent to which each insurer
providing private mortgage insurance is making available to the public
and submitting to the appropriate agency information regarding such
insurance that is equivalent to the information regarding mortgages
required to be reported under the Home Mortgage Disclosure Act of 1975.
(b) Reporting Under This Act.--
(1) Certification of noncompliance.--If, for any annual
period referred to in subsection (a), such Council determines
that any insurer providing private mortgage insurance is not
making available to the public or submitting the information
referred to in subsection (a) or that the information made
available or submitted is not equivalent information as
described in subsection (a), then the Council shall notify the
insurer of such noncompliance. If, after the expiration of a
reasonable period of time, the insurer has not remedied such
noncompliance to the satisfaction of the Council, then the
Council shall immediately certify such noncompliance to the
Secretary.
(2) Requirement.--Upon the receipt of a certification under
paragraph (1), the Secretary shall, by regulation, require such
insurer to submit to the Secretary information regarding such
insurance that complies with the provisions of section 4 that
are applicable to such insurance. Such regulations shall be
issued not later than 6 months after receipt of such
certification and shall apply to the first succeeding annual
reporting period that begins at least 6 months after issuance
of such regulations and to each annual reporting period
thereafter.
SEC. 10. USE OF DATA CONTRACTOR AND STATISTICAL AGENTS.
(a) Data Collection Contractor.--The Secretary may contract with a
data collection contractor to collect the information required to be
maintained and submitted under sections 4, 5, 7, 8, 9(b), and 11 if the
contractor agrees to collect the information pursuant to the terms and
conditions of such sections and this Act and the regulations issued
thereunder. Information submitted to such contractor shall be available
to the public to the same extent as if the information were submitted
directly to the Secretary.
(b) Use of Statistical Agents.--
(1) In general.--The Secretary shall provide, by
regulation, that insurers may submit any information required
under sections 4, 5, 7, and 9(b) through statistical agents
acting on behalf of more than one insurer.
(2) Protections.--The regulations issued under this
subsection shall permit submission of information through a
statistical agent only if the Secretary determines that--
(A) the statistical agent has adequate procedures
to protect the integrity of the information submitted;
(B) the statistical agent has a statistical plan
and format for submitting the information that meets
the requirements of this Act;
(C) the statistical agent has procedures in place
that ensure that information reported under the
statistical plan in connection with reporting under
this Act and submitted to the Secretary is not subject
to any adjustment by the statistical agent or an
insurer for reasons other than technical accuracy and
conformance to the statistical plan;
(D) the information of an insurer is not subject to
review by any other insurer before being made available
to the public; and
(E) acceptance of the information through the
statistical agent will not adversely affect the
accuracy of the information reported.
(3) Discontinuance of acceptance of information.--The
Secretary may discontinue accepting information reported
through a statistical agent pursuant to this subsection if the
Secretary determines that the requirements for such reporting
are no longer met or that continued acceptance of such
information is contrary to the goal of ensuring the accuracy of
the information reported.
(4) GAO audits.--The Comptroller General shall, at the
request of the Secretary, audit information collection and
submission performed under this subsection by data collection
contractors or statistical agents to ensure that the integrity
of the information collected and submitted is protected. In
determining whether to request an audit of a statistical agent,
the Secretary shall consider the sufficiency (for purposes of
this Act) of audits of the statistical agent conducted in
connection with State insurance regulation.
(5) Liability.--Notwithstanding any use of a statistical
agent as authorized under this subsection, an insurer using
such an agent shall be responsible for compliance with the
requirements under this Act.
SEC. 11. REPORTING OF INFORMATION REGARDING INVESTMENTS BY INSURERS.
(a) In General.--The Secretary of Housing and Urban Development
shall, by regulation, require that each designated insurer that makes a
designated investment in a property or business located in a designated
MSA shall compile and submit to the Secretary for each annual reporting
period, the following information:
(1) Direct loans.--
(A) Commercial real estate loans.--The total number
of loans for the purchase of commercial real estate
made by the designated insurer, the aggregate amount of
such loans, and the amount of each such loan, by
designated MSA and applicable region in which the real
estate for which the loan was made is located.
(B) Single-family mortgages.--The total number of
mortgage loans for the purchase of 1- to 4-family
dwellings made by the designated insurer, the aggregate
amount of such loans, and the amount of each such loan,
by designated MSA and applicable region in which the
dwelling for which the loan was made is located, which
information shall be disaggregated by racial
characteristics, income level, and gender of the
borrower under the loan.
(C) Commercial and industrial loans.--The total
number of commercial and industrial loans made by the
designated insurer, the aggregate amount of such loans,
and the amount of each such loan, by designated MSA and
applicable region in which the property or business
involved in the loan is located, which information
shall be disaggregated by the size of business of the
borrower under the loan and by the ownership
characteristic of the business, which shall be
classified as either minority-owned, women-owned, or
otherwise-owned.
(2) Loan purchases.--
(A) Commercial real estate loans.--The total number
of loans for the purchase of commercial real estate
purchased by the designated insurer, the aggregate
amount of such loans, and the amount of each such loan,
by designated MSA and applicable region in which the
real estate for which the loan was made is located.
(B) Single-family mortgages.--The total number of
mortgage loans for the purchase of 1- to 4-family
dwellings purchased by the designated insurer, the
aggregate amount of such loans, and the amount of each
such loan, by designated MSA and applicable region in
which the dwelling for which the loan was made is
located, which information shall be disaggregated by
racial characteristics, income level, and gender of the
borrower under the loan.
(C) Commercial and industrial loans.--The total
number of commercial and industrial loans purchased by
the designated insurer, the aggregate amount of such
loans, and the amount of each such loan, by designated
MSA and applicable region in which the property or
business involved in the loan is located, which
information shall be disaggregated by the size of
business of the borrower under the loan and by the
ownership characteristic of the business, which shall
be classified as either minority-owned, women-owned, or
otherwise-owned.
(3) Other investments.--For such other investments made by
the designated insurer, as the Secretary may designate pursuant
to subsection (b), the total number of such investments, the
aggregate amount of such investments, and the amount of each
such investment, by designated MSA and applicable region in
which the property or business involved in the investment is
located, as determined by the Secretary, which information
shall be disaggregated by the size of business of the borrower
under the loan and by the ownership characteristic of the
business, which shall be classified as either minority-owned,
women-owned, or otherwise-owned.
(b) Designation of Other Investments.--
(1) In general.--For purposes of subsection (a)(3), the
Secretary may designate activities and investments other than
the investments described in paragraphs (1) and (2) of
subsection (a) for which designated insurers shall compile and
submit information under this section.
(2) Requirement.--In making designations under this
subsection, the Secretary shall designate (A) activities and
investments that significantly benefit low- and moderate-income
families and persons, small businesses in distressed
communities, or minority- or women-owned businesses, and (B)
activities and investments that contribute to the creation of
jobs and economic development of distressed communities.
(3) Considerations.--The Secretary shall specifically
consider for designation under this subsection investments in
community development financial institutions, community
development corporations, State-issued bonds, and securities
backed by State development funds.
(c) Size of Business.--The Secretary shall, by regulation,
establish various categories of the sizes of businesses, for purposes
of disaggregating information under paragraphs (1)(C), (2)(C), and (3)
of subsection (a) by various sizes of businesses.
SEC. 12. SUBMISSION OF INFORMATION TO SECRETARY AND MAINTENANCE OF
INFORMATION.
(a) Period of Maintenance.--Each insurer required by this Act to
compile and submit information to the Secretary shall maintain such
information for the 3-year period beginning upon the conclusion of the
annual reporting period to which such information relates. The
Secretary shall maintain any information submitted to the Secretary for
such period as the Secretary considers appropriate and feasible to
carry out the purposes of this Act and to allow for historical analysis
and comparison of the information.
(b) Submission.--The Secretary shall issue regulations prescribing
a standard schedule (taking into consideration the provisions of
section 14(a)), format, and method for submitting information under
this Act to the Secretary. The format and method of submitting the
information shall facilitate and encourage the submission in a form
readable by a computer. Any insurer submitting information to the
Secretary may submit in writing to the Secretary any additional
information or explanations that the insurer considers relevant to the
decision by the insurer to sell insurance.
SEC. 13. COMPILATION OF AGGREGATE INFORMATION.
(a) Insurance Information.--For each annual reporting period, the
Secretary shall--
(1) compile, for each designated MSA, by designated line
(and if such information is submitted, by subline or coverage
type)--
(A) information submitted under sections 4, 5, 8,
and 9(b) and loss ratios (if the submission of loss
information is required), aggregated by applicable
region for all insurers submitting such information;
and
(B) such information and loss ratios (if the
submission of loss information is required), aggregated
by applicable region for each such insurer; and
(2) produce tables based on information submitted under
sections 4, 5, 8, and 9(b) for each designated MSA, by insurer
and for all insurers, by designated line (and if such
information is submitted, by subline or coverage type),
indicating--
(A) insurance underwriting patterns aggregated for
the applicable regions within the MSA, grouped
according to location, age of property, income level,
and racial characteristics of neighborhoods; and
(B) loss ratios based on the information obtained
pursuant to sections 4, 5, 8, and 9(b) (if the
submission of loss information is required), aggregated
for the applicable regions within the MSA, grouped
according to location, age of property, income level,
and racial characteristics of neighborhoods.
(b) Agent Information.--For each annual reporting period and for
each designated MSA, the Secretary shall compile, by designated line,
the information submitted under section 4(b)(1)(C)--
(1) by designated insurer by applicable region;
(2) by designated insurer aggregated for the applicable
regions within the designated MSA, grouped according to
location, age of property, income level, and racial
characteristics; and
(3) for all designated insurers that have submitted such
information for the designated MSA, aggregated for the
applicable regions within the designated MSA, grouped according
to location, age of property, income level, and racial
characteristics.
(c) Rural Insurance Information.--For each annual reporting period,
the Secretary shall--
(1) compile for each applicable 5-digit zip code, by
designated line (and if such information is submitted, by
subline or coverage type)--
(A) information regarding insurance in rural areas
submitted under sections 7 and 8 and loss ratios, for
all insurers for which such information is submitted;
and
(B) such information and loss ratios, for each such
insurer; and
(2) produce tables for each 5-digit zip code based on
information regarding insurance in rural areas submitted under
sections 7 and 8, by insurer and for all such insurers for
which information is submitted under such sections, by
designated line (and if such information is submitted, by
subline or coverage type), indicating--
(A) insurance underwriting patterns, aggregated by
zip codes, grouped according to location, age of
property, income level, and racial characteristics of
neighborhoods (where such demographic information is
available); and
(B) loss ratios, based on the information obtained
pursuant to sections 7 and 8, aggregated by zip codes,
grouped according to location, age of property, income
level, and racial characteristics of neighborhoods
(where such demographic information is available).
(d) Investment Information.--For each annual reporting period, the
Secretary shall--
(1) compile the information submitted under section 11, for
each designated MSA--
(A) aggregated by applicable region for all
insurers, by designated investment; and
(B) aggregated by applicable region for each
insurer, by designated investment; and
(2) produce tables for each designated MSA, for each
insurer and for all insurers, indicating patterns of designated
investments, which shall be aggregated by applicable region,
grouped according to racial characteristics, income level, and
gender of the borrower or size of business of the borrower and
ownership characteristic of the business, as applicable.
SEC. 14. AVAILABILITY AND ACCESS SYSTEM.
(a) Availability to Public.--
(1) In general.--The Secretary shall maintain and make
available to the public, in accordance with the requirements of
this section, any information submitted to the Secretary under
this Act and any information compiled by the Secretary under
this Act.
(2) Timing.--The Secretary shall make such information
publicly available on a timetable determined by the Secretary,
but not later than 9 months after the conclusion of the annual
reporting period to which the information relates, except that
such information shall not be made available to the public
until it is available in its entirety unless not all the
information required to be reported is available by such date.
(b) Public Access System.--
(1) Implementation.--The Secretary shall implement a system
to facilitate access to any information required to be made
available to the public under this Act.
(2) Bases of availability.--The system shall provide access
in the following manners:
(A) Access to itemized information.--To information
submitted under sections 4, 5, 7, 8, 9(b), and 11 on
the basis of the insurer submitting the information, on
the basis of designated MSA and applicable region (or
in the case of rural information submitted under
section 7 or 8, on the basis of 5-digit zip code), and
on any other basis the Secretary considers feasible and
appropriate.
(B) Access to aggregate information.--To aggregate
information compiled under section 13, on the basis of
(i) the insurer submitting the information, and (ii)
designated MSA and applicable region (or in the case of
rural information submitted under section 7 or 8, on
the basis of 5-digit zip code), and on any other basis
the Secretary considers feasible and appropriate.
(3) Method.--The access system shall include a toll-free
telephone number that can be used by the public to request such
information and the address at which a written request for such
information may be submitted.
(4) Form.--The Secretary shall, by regulation, establish
the forms in which such information may be furnished by the
Secretary. Such forms shall include written statements, forms
readable by widely used personal computers, and, if feasible,
on-line access for personal computers. The Secretary shall
provide the information available under this section in any
such form requested by the person requesting the information,
except that the Secretary may charge a fee for providing such
information, which may not exceed the amount, determined by the
Secretary, that is equal to the cost of reproducing the
information.
(5) Analysis software.--The Secretary shall make available
to the public software that can be used on a personal computer
to analyze the information provided under this section. The
software shall be capable of analyzing the information by
insurer, designated line, race, gender, MSA, and applicable
region. It shall also contain data compiled by the Secretary
for each MSA and applicable region on income levels, age of
property, and racial characteristics that can be used to
evaluate the information provided under this Act by insurers.
The software and any accompanying data shall be made available
to the public without charge, except for an amount, determined
by the Secretary, which shall not exceed the actual cost of
reproducing the software and the accompanying data.
(c) Protections Regarding Loss Information.--
(1) Prohibition of disclosure of loss information.--
Notwithstanding any other provision of this Act, the Secretary
may not make available to the public or otherwise disclose any
information submitted under this Act regarding the amount or
number of claims paid by any insurer, the amount of losses of
any insurer, or the loss experience for any insurer, except (A)
in the form of a loss ratio (expressing the relationship of
claims paid to premiums) made available or disclosed in
compliance with the provisions of paragraph (2), or (B) as
provided in paragraph (3).
(2) Protection of identity of insurer.--In making available
to the public or otherwise disclosing a loss ratio for an
insurer--
(A) the Secretary may not identify the insurer to
which the loss ratio relates; and
(B) the Secretary may disclose the loss ratio only
in a manner that does not allow any party to determine
the identity of the specific insurer to which the loss
ratio relates, except parties having access to
information under paragraph (3).
(3) Confidentiality of information disclosed to
governmental agencies.--The Secretary may make information
referred to in paragraph (1) and the identity of the specific
insurer to which such information relates available to any
Federal entity and any State agency responsible for regulating
insurance in a State and may otherwise disclose such
information to any such entity or agency, but only to the
extent such entity or agency agrees not to make any such
information available or disclose such information to any other
person.
SEC. 15. DESIGNATIONS.
(a) Designation of MSA's.--For purposes of this Act, the term
``designated MSA'' means the following MSA's:
(1) First 5 years.--With respect to the first 5 annual
reporting periods to which the reporting requirements under
this Act apply (pursuant to section 26), any of the 150 MSA's
selected as follows:
(A) The Secretary shall select the 50 MSA's having
the largest populations, as determined by the Secretary
and specified in regulations issued pursuant to section
24, which shall not be amended or revised after
issuance.
(B) The Secretary shall select 100 additional
MSA's, on a basis that provides for (i) geographic
diversity among the designated MSA's under this
paragraph, and (ii) diversity in size of the
populations among such MSA's.
(2) After first 5 years.--With respect to annual reporting
periods thereafter, an MSA for which a designation under this
paragraph is in effect, pursuant to the following requirements:
(A) The designations shall be made for each of the
successive 5-year periods at the time provided in
subparagraph (C), and the first such period shall be
the 5-year period beginning upon the commencement of
the 6th annual reporting period to which the reporting
requirements under this Act apply.
(B) The Secretary shall designate not less than 150
MSA's as designated MSA's for each such 5-year period
and shall designate such MSA's based upon the
information and recommendations made in the report
under section 20(b) relating to the period.
(C) The Secretary shall make the designation of
MSA's for an ensuing 5-year period by regulations
issued--
(i) not later than the date occurring 12
months before the commencement of the 5-year
period; and
(ii) not later than 6 months after the
submission to the Secretary of the report under
section 20(b) relating to such period.
(D) The designations for a 5-year period shall take
effect upon the commencement of the first annual
reporting period of the 5-year period that begins at
least 12 months after the issuance of the regulations
making such designations, and shall remain in effect
until the expiration of the 5-year period.
Notwithstanding any other provision of this section, the designation of
an MSA shall remain in effect until a succeeding designation of MSA's
under paragraph (2) takes effect.
(b) Designation of Insurers.--The Secretary shall designate, for
each designated line and each State, insurers doing business in the
lines as designated insurers in the State for purposes of this Act,
subject to the following requirements:
(1) Highest aggregate premium volume.--
(A) General rule.--For a State, the Secretary shall
designate, for each designated line, each of the
insurers and insurer groups included in the class
established under this paragraph for the State.
(B) Determination.--In the State, the Secretary
shall rank the insurers and insurer groups in each
designated line from the insurer or group having the
largest aggregate premium volume in the State for such
line to the insurer or group having the smallest such
aggregate premium volume and shall include in the class
for the State only (i) the insurer or group of the
highest rank, and (ii) each insurer or group of
successively lower rank if the inclusion of such
insurer or group in the class does not result in the
sum of such aggregate premium volumes for insurers and
groups in the class exceeding 80 percent of the total
aggregate premium volume in the State for the line, and
(iii) the first such successively lower ranked insurer
or insurer group whose inclusion in the class results
in such sum exceeding 80 percent of the total aggregate
premium volume in the State for the line.
(2) Minimum aggregate premium volume.--For a State, the
Secretary shall designate, for each designated line, each
insurer and insurer group not designated pursuant to paragraph
(1) whose premium volume in the State for the designated line
exceeds 1 percent of the total aggregate premium volume in the
State for the line.
(3) FAIR plans and joint underwriting associations.--For a
State, the Secretary shall designate, for each designated
line--
(A) each statewide plan under part A of title XII
of the National Housing Act to assure fair access to
insurance requirements, and
(B) each joint underwriting association,
that provides insurance under such line.
(4) Duration.--The Secretary shall designate insurers under
this subsection once every 5 years. Each insurer designated
shall be a designated insurer for each of the first 5
successive annual reporting periods commencing after such
designation.
(c) Designation of Lines of Insurance.--
(1) In general.--The Secretary shall, by regulation,
designate lines of insurance as designated lines for purposes
of this Act, as follows:
(A) Automobile.--The Secretary shall designate
private passenger automobile insurance and shall also
designate any sublines and coverage types of private
passenger automobile insurance that the Secretary
considers appropriate to determine and compare the
availability, affordability, and type of coverage in
such line among applicable regions.
(B) Noncommercial insurance for residential
property.--The Secretary shall designate homeowners
insurance and dwelling fire and allied lines, and shall
distinguish the coverage types in such lines by the
perils covered and by market or replacement value. For
purposes of this Act, homeowners insurance shall not
include any renters coverage or coverage for the
personal property of a condominium owner.
(C) Bid, performance, and payment bonds for small
businesses.--The Secretary shall designate lines, and
any sublines and coverage types, of bid, performance,
and payment bonds for small businesses, for which
reporting is required pursuant to section 6, that the
Secretary considers appropriate to determine and
compare the availability, affordability, and quality or
type of coverage in bid, performance, and payment bonds
for small businesses among applicable regions.
(2) Report.--At any time the Secretary determines that any
line of insurance not described in paragraph (1) should be a
designated line because disparities in coverage provided under
such line exist among geographic areas having different income
levels or racial composition, the Secretary shall submit a
report recommending designating such line of insurance as a
designated line for purposes of this Act to the Committee on
Banking, Finance and Urban Affairs of the House of
Representatives and the appropriate Committees of the Senate.
(3) Duration.--
(A) In general.--Except as provided in subparagraph
(B), the Secretary shall make the designations under
this subsection once every 5 years, by regulation, and
each line and subline or coverage type designated under
such regulations shall be designated for each of the
first 5 successive annual reporting periods occurring
after issuance of the regulations.
(B) Alteration.--During any 5-year period referred
to in subparagraph (A) in which designations are in
effect, the Secretary may amend or revise the
designated lines, sublines, and coverage types only by
regulation and only in accordance with the requirements
of this subsection. Such regulations amending or
revising designations shall apply only to annual
reporting periods beginning after the expiration of the
6-month period beginning on the date of issuance of the
regulations.
(d) Timing of Designations.--The Secretary shall make the
designations required by subsections (b)(4) and (c)(3)(A) and notify
interested parties during the 6-month period ending 6 months before the
commencement of the first annual reporting period to which such
designations apply.
(e) Obtaining Information.--The Secretary may require insurers to
submit to the Secretary such information as the Secretary considers
necessary to make designations specifically required under this Act.
The Secretary may not require insurers to submit any information under
this subsection that relates to any line of insurance not specifically
authorized to be designated pursuant to this Act or that is to be used
solely for the purpose of a report under subsection (c)(2).
SEC. 16. IMPROVED METHODS AND REPORTING ON BASIS OF OTHER AREAS.
(a) Development of Improved Methods.--The Secretary shall develop,
or assist in the improvement of, methods of matching addresses and
applicable regions to facilitate compliance by insurers, in as
economical a manner as possible, with the requirements of this Act. The
Secretary shall allow insurers, or statistical agents acting on behalf
of insurers, to match addresses and applicable regions through the use
of 9-digit zip codes if the Secretary determines that such use will
substantially reduce the cost and burden to insurers of such matching
without significant adverse impact on the reliability of the matching.
(b) Address Conversion Software.--The Secretary shall make
available, to any insurer required to provide information to the
Secretary under this Act, computer software that can be used to convert
addresses to applicable regions within designated MSA's. The software
shall be made available in forms that provide such conversion for
designated MSA's on a nationwide basis and on a State-by-State basis.
The software shall be made available not less than 6-months before the
first annual reporting period to which the reporting requirements under
this Act apply (pursuant to section 226) and shall be updated annually.
The software shall be made available without charge, except for an
amount, determined by the Secretary, which shall not exceed the actual
cost of reproducing the software.
(c) Convertibility.--
(1) Authority.--The Secretary may, by regulation, provide
for insurers to comply with the requirements under sections 4,
5, 9(b), and 11 by reporting the information required under
such sections on the basis of geographical location other than
MSA and applicable region, but only if the Secretary determines
that information reported on such other basis is convertible to
the basis of MSA and applicable region and such conversion does
not affect the accuracy of the information.
(2) Limitation.--With respect to any information submitted
on the basis of geographical location other than designated MSA
and applicable region pursuant to paragraph (1), the Secretary
may disclose the information only on the basis of designated
MSA and applicable region.
SEC. 17. ANNUAL REPORTING PERIOD.
(a) In General.--For purposes of this Act, the annual reporting
periods shall be the 12-month periods commencing in each calendar year
on the same day, which shall be selected under subsection (b) by the
Secretary.
(b) Selection.--Not later than the expiration of the 6-month period
beginning on the date of the enactment of this Act, the Secretary
shall, by regulation, select a day of the year upon which all annual
reporting periods shall commence. In determining such day, the
Secretary shall consider the reporting periods used for purposes of
State and other insurance statistical reporting systems, in order to
minimize the burdens on insurers.
SEC. 18. DISCLOSURES BY INSURERS TO APPLICANTS AND POLICYHOLDERS.
(a) In General.--The Secretary shall, by regulation, require the
following disclosures:
(1) Applicants.--Each insurer that, through the insurer, or
an agent or broker, declines a written application or written
request to issue an insurance policy under a designated line
shall provide to the applicant at the time of such declination,
through such insurer, agent, or broker, one of the following:
(A) A written explanation of the specific reasons
for the declination.
(B) Written notice that (i) the applicant may
submit to the insurer, agent, or broker, within 90 days
of such notice, a written request for a written
explanation of the reasons for the declination, and
(ii) pursuant to such a request, an explanation shall
be provided to the applicant within 21 days after
receipt of such request.
If an insurer, agent, or broker making a declination receives a
written request referred to in subparagraph (B) within such 90-
day period, the insurer, agent, or broker shall provide a
written explanation referred to in such subparagraph within
such 21-day period.
(2) Policyholders.--Each insurer that cancels or refuses to
renew an insurance policy under a designated line shall provide
to the policyholder, in writing and within an appropriate
period of time as determined by the Secretary, the reasons for
canceling or refusing to renew the policy.
(b) Model Acts.--In issuing regulations under subsection (a), the
Secretary shall consider relevant portions of model acts developed by
the National Association of Insurance Commissioners.
(c) Preemption.--Subsection (a) shall not be construed to annul,
alter, or effect, or exempt any insurer, agent, or broker subject to
the provisions of subsection (a) from complying with any laws or
requirements of any State with respect to notifying insurance
applicants or policyholders of the reasons for declination or
cancellation of, or refusal to renew insurance, except to the extent
that such laws or requirements are inconsistent with subsection (a) (or
the regulations issued thereunder) and then only to the extent of such
inconsistency. The Secretary is authorized to determine whether such
inconsistencies exist and to resolve issues regarding such
inconsistencies. The Secretary may not provide that any State law or
requirement is inconsistent with subsection (a) if it imposes
requirements equivalent to the requirements under such subsection or
requirements that are more stringent or comprehensive, in the
determination of the Secretary.
(d) Immunity.--In issuing regulations under subsection (a), the
Secretary shall specifically consider the necessity of providing
insurers, agents, and brokers immunity solely for the act of conveying
or communicating the reasons for a declination or cancellation of, or
refusal to renew insurance on behalf of a principal making such
decision. The Secretary may provide for immunity under the regulations
issued under subsection (a) if the Secretary determines that such a
provision is necessary and in the public interest, except that the
Secretary may not provide immunity for any conduct that is negligent,
reckless, or willful.
(e) Enforcement.--The Secretary may authorize the States to enforce
the requirements under regulations issued under subsection (a).
SEC. 19. ENFORCEMENT.
(a) Civil Penalties.--Any insurer who is determined by the
Secretary, after providing opportunity for a hearing on the record, to
have violated any requirement pursuant to this Act shall be subject to
a civil penalty of not to exceed $5,000 for each day during which such
violation continues.
(b) Injunction.--The Secretary may bring an action in an
appropriate United States district court for appropriate declaratory
and injunctive relief against any insurer who violates the requirements
referred to in subsection (a).
(c) Insurer Liability.--An insurer shall be responsible under
subsections (a) and (b) for any violation of a statistical agent acting
on behalf of the insurer.
SEC. 20. REPORTS.
(a) Annual Report.--The Secretary shall annually report to the
Committee on Banking, Finance and Urban Affairs of the House of
Representatives and the appropriate Committees of the Senate on the
implementation of this Act and shall make recommendations to such
Committees on such additional legislation as the Secretary deems
appropriate to carry out this Act. The Secretary shall include in each
annual report a description of any complaints or problems resulting
from the implementation of this Act, of which the Secretary has
knowledge, made by (or on behalf of) insurance policyholders that
concern the disclosure of information regarding policyholders and any
recommendations for addressing such problems. Each report shall
specifically address whether granting property and casualty insurance
powers to other financial intermediaries would significantly reduce
redlining and other discriminatory insurance practices and the
Secretary shall consult with the appropriate financial institution
regulators regarding such issues in preparing the report.
(b) GAO Reports.--
(1) In general.--The Comptroller General of the United
States shall submit a report under this subsection to the
Secretary and the Congress for each 5-year period referred to
in sections 7(c)(2) and 15(a)(2), which contains information to
be used by the Secretary in implementing this Act during such
period.
(2) Timing.--The report under this subsection for each such
5-year period shall be submitted not later than the date
occurring 18 months before the commencement of the period to
which the report relates.
(3) Contents.--A report under this subsection shall include
the following information:
(A) An analysis of the adequacy of the
implementation of this Act and any recommendations of
the Comptroller General for improving the
implementation.
(B) The costs to the Federal Government, insurers,
and consumers of implementing and complying with this
Act.
(C) Any beneficial or harmful effects resulting
from the requirements of this Act.
(D) An analysis of whether, considering the
purposes of this Act, insurers are required by this Act
(or by implementing regulations) to submit appropriate
information.
(E) An analysis of whether sufficient evidence
exists of patterns of disparities in the availability,
affordability, and quality or type of insurance
coverage to warrant continued applicability of the
requirements of this Act.
(F) An analysis of whether the group of designated
MSA's in effect at the time of the report are
appropriate for purposes of this Act.
(G) Specific recommendations, for use by the
Secretary in designating MSA's for the 5-year period
for which the report is made, with regard to--
(i) the characteristics of MSA's that
should be included in the group of designated
MSA's;
(ii) the number of MSA's that should be
included in the group;
(iii) the number of MSA's having each
particular characteristic that should be
included in the group; and
(iv) the characteristics of MSA's, and
number of MSA's having each such
characteristic, that should be removed from the
group of designated MSA's in effect at the time
of the report.
(H) With respect only to the first report required
under this subsection, recommendations of whether the
study conducted under section 5 should be continued
beyond the date in section 5(b)(8) and, if so, whether
the requirements regarding the submission of
information under the study should be expanded or
changed with respect to insurers, MSA's, lines,
sublines or coverage types of insurance, and types of
small businesses, or whether the study should be
allowed to terminate under law.
(I) An analysis of whether the group of designated
rural areas in effect at the time of the report are
appropriate for purposes of this Act.
(J) Specific recommendations, for use by the
Secretary in designating rural areas for purposes of
section 7 for the 5-year period for which the report is
made, with regard to--
(i) the characteristics of rural areas that
should be included in the group of designated
rural areas under such section;
(ii) the number of rural areas having each
particular characteristic that should be
included in the group; and
(iii) the characteristics of rural areas,
and number of rural areas having each such
characteristic, that should be removed from the
group of designated rural areas in effect at
the time of the report.
(K) Any other information or recommendations
relating to the requirements or implementation of this
Act that the Comptroller General considers appropriate.
(4) Consultation.--In preparing each report under this
subsection, the Comptroller General shall consult with Federal
agencies having appropriate expertise, the National Association
of Insurance Commissioners, State insurance regulators,
statistical agents, representatives of small businesses,
representatives of insurance agents (including minority
insurance agents) and property and casualty insurers, and
community, consumer, and civil rights organizations.
SEC. 21. TASK FORCE ON AGENCY APPOINTMENTS.
(a) Establishment.--Not later than 90 days after the date of the
enactment of this Act, the Secretary shall establish a task force on
insurance agency appointments. The task force shall--
(1) consist of representatives of appropriate Federal
agencies, property and casualty insurance agents, including
specifically minority insurance agents, property and casualty
insurers, State insurance regulators, and community, consumer,
and civil rights organizations;
(2) have a significant representation from minority
insurance agents; and
(3) be chaired by the Secretary or the Secretary's
designee.
(b) Function.--The task force shall--
(1) review the problems inner city and minority agents may
have in receiving appointments to represent property and
casualty insurers and consider the effects such problems have
on the availability, affordability, and quality or type of
insurance, especially in underserved areas;
(2) review the practices of insurers in terminating agents
and consider the effects such practices have on the
availability, affordability, and quality or type of insurance,
especially in underserved areas; and
(3) recommend solutions to improve the ability of inner
city and minority insurance agents to market property and
casualty insurance products, including steps property and
casualty insurers should take to increase their appointments of
such agents.
(c) Report and Termination.--The task force shall report to the
Committee on Banking, Finance and Urban Affairs of the House of
Representatives and the appropriate Committees of the Senate its
findings under paragraphs (1) and (2) of subsection (b) and its
recommendations under paragraph (3) of subsection (b) not later than 2
years after the date of the enactment of this Act. The task force shall
terminate when the report is submitted to the Committees.
SEC. 22. STUDIES.
(a) Study of Insurance Prescreening.--
(1) In general.--The Secretary shall conduct a study to
determine the feasibility and utility of requiring insurers to
report information with respect to the characteristics of
applicants for insurance and reasons for rejection of
applicants. The study shall examine the extent to which--
(A) oral applications or representations are used
by insurers and agents in making determinations
regarding whether or not to insure a prospective
insured;
(B) written applications are used by insurers and
agents in making determinations regarding whether or
not to insure a prospective insured;
(C) written applications are submitted after the
insurer or agent has already made a determination to
provide insurance to a prospective insured or has
determined that the prospective insured is eligible for
insurance; and
(D) prospective insureds are discouraged from
submitting applications for insurance based, in whole
or in part, on--
(i) the location of the risk to be insured;
(ii) the racial characteristics of the
prospective insured;
(iii) the racial composition of the
neighborhood in which the risk to be insured is
located; and
(iv) in the case of residential property
insurance, the age and value of the risk to be
insured.
(2) Report.--The Secretary shall report the results of the
study under paragraph (1) to the Committee on Banking, Finance
and Urban Affairs of the House of Representatives and the
appropriate Committees of the Senate not later than 2 years
after the date of the enactment of this Act. The report shall
include recommendations of the Secretary (A) with respect to
requiring insurers to report on the disposition of oral and
written applications for insurance, and (B) for any legislation
that the Secretary considers appropriate regarding the issues
described in the report.
(b) Study of Insurer Actions to Meet Insurance Needs of Certain
Neighborhoods.--The Secretary shall conduct a study of various
practices, actions, and methods undertaken by insurers to meet the
property and casualty insurance needs of residents of low- and
moderate-income neighborhoods, minority neighborhoods, and small
businesses located in such neighborhoods. The Secretary shall report
the results of the study, including any recommendations, to the
Committee on Banking, Finance and Urban Affairs of the House of
Representatives and the appropriate Committees of the Senate not later
than 2 years after the date of the enactment of this Act.
(c) Study of Disparate Claims Treatment.--
(1) In general.--The Secretary shall conduct a study to
determine whether, and the extent to which, insurers engage in
disparate treatment in handling claims of policyholders under
designated lines of insurance based on the race, gender, and
income level of the policyholder, and on the racial
characteristics and income levels of the area in which the
insured risk is located. In conducting the study, the Secretary
shall specifically consider whether residents of low-income
neighborhoods or areas and minority neighborhoods or areas are
more likely than residents of other areas to have their claims
contested or their insurance coverage canceled.
(2) Report.--The Secretary shall submit a report on the
results of the study to the Committee on Banking, Finance and
Urban Affairs of the House of Representatives and the
appropriate Committees of the Senate not later than 2 years
after the date of the enactment of this Act.
(d) Study of Rating Territories.--The Secretary shall conduct a
study to determine whether the practice in the insurance industry of
basing insurance premium amounts on the territory in which the insured
risk is located has a disparate impact on the availability,
affordability, or quality of insurance by race, gender, or type of
neighborhood. The Secretary shall submit a report on the results of the
study to the Committee on Banking, Finance and Urban Affairs of the
House of Representatives and the appropriate Committees of the Senate
not later than 12 months after the date of the enactment of this Act.
(e) Study of Insurer Reinvestment Requirements.--
(1) In general.--The Secretary shall conduct a study to
determine the feasibility of requiring insurers to reinvest in
communities and neighborhoods from which they collect premiums
for insurance and whether, and the extent to which, community
reinvestment requirements for insurers should be established
that are comparable to the community reinvestment requirements
applicable to depository institutions. The Secretary shall
consult with representatives of insurers and consumer,
community, and civil rights organizations regarding the results
of the study and any recommendations to be made based on the
results of the study.
(2) Report.--The Secretary shall report the results of the
study, including any such recommendations, to the Committee on
Banking, Finance and Urban Affairs of the House of
Representatives and the appropriate Committees of the Senate
not later than 6 months after the conclusion of the first
annual reporting period to which the reporting requirements
under this Act apply (pursuant to section 26).
SEC. 23. EXEMPTION AND RELATION TO STATE LAWS.
(a) Exemption for United States Programs.--Reporting shall not be
required under this Act with respect to insurance provided by any
program underwritten or administered by the United States.
(b) Relation to State Laws.--This Act does not annul, alter, or
affect, or exempt the obligation of any insurer subject to this Act to
comply with the laws of any State or subdivision thereof with respect
to public disclosure, submission of information, and recordkeeping.
SEC. 24. REGULATIONS.
(a) In General.--The Secretary shall issue any regulations required
under this Act and any other regulations that may be necessary to carry
out this Act. The regulations shall be issued through rulemaking in
accordance with the procedures under section 553 of title 5, United
States Code, for substantive rules. Except as otherwise provided in
this Act, such final regulations shall be issued not later than the
expiration of the 18-month period beginning on the date of the
enactment of this Act.
(b) Burdens.--In prescribing such regulations, the Secretary shall
take into consideration the administrative, paperwork, and other
burdens on insurance agents, including independent insurance agents,
involved in complying with the requirements of this Act and shall
minimize the burdens imposed by such requirements with respect to such
agents.
SEC. 25. DEFINITIONS.
For purposes of this Act:
(1) Agent.--The term ``agent'' means, with respect to an
insurer, an agent licensed by a State who sells property and
casualty insurance. The term includes agents who are employees
of the insurer, agents who are independent contractors working
exclusively for the insurer, and agents who are independent
contractors appointed to represent the insurer on a
nonexclusive basis.
(2) Applicable region.--The term ``applicable region''
means, with respect to a designated MSA--
(A) for any county located within the MSA that has
a population of more than 30,000, the applicable census
tract within the county; or
(B) for any county located within the MSA that has
a population of 30,000 or less, the applicable county.
(3) Commercial insurance.--The term ``commercial
insurance'' means any line of property and casualty insurance,
except private passenger automobile, homeowner's insurance and
dwelling fire and allied lines, and other personal lines of
insurance.
(4) Designated insurer.--The term ``designated insurer''
means, with respect to a designated line, an insurer designated
for a State by the Secretary under section 15(b) as a
designated insurer for such line or any insurer that is part of
an insurer group selected under such section.
(5) Designated investment.--The term ``designated
investment'' means making or purchasing a loan for the purchase
of commercial real estate, making or purchasing a mortgage loan
for the purchase of a 1- to 4-family dwelling, making or
purchasing a commercial or industrial loan, or making any other
investment designated by the Secretary under section 11(b).
(6) Designated line.--The term ``designated line'' means a
line of insurance or bid, performance, and payment bonds
designated by the Secretary under section 15(c).
(7) Exposures.--The term ``exposures'' means, for purposes
of section 4, with respect to an insurance policy, an
expression of an exposure unit covered under the policy
compared to the duration of the policy (pursuant to standards
established by the Secretary for uniform reporting of
exposures).
(8) Exposure units.--The term ``exposure units'' means, for
purposes of section 4, an automobile or dwelling covered under
an insurance policy for private passenger automobile or
homeowners or dwelling fire and allied lines coverage.
(9) Insurance.--The term ``insurance'' means property and
casualty insurance. Such term includes primary insurance,
surplus lines insurance, and any other arrangement for the
shifting and distributing of risks that is determined to be
insurance under the law of any State in which the insurer or
insurer group engages in an insurance business.
(10) Insurer.--Except with respect to section 9, the term
``insurer'' means any corporation, association, society, order,
firm, company, mutual, partnership, individual, aggregation of
individuals, or any other legal entity that is authorized to
transact the business of property or casualty insurance in any
State or that is engaged in a property or casualty insurance
business. With respect to section 6, the term means any person
authorized to transact the business of bid, performance, and
payment bonds for small businesses. The term does not include
an individual or entity which represents an insurer as agent
solely for the purpose of selling or which represents a
consumer as a broker solely for the purpose of buying
insurance.
(11) Issued.--The term ``issued'' means, with respect to an
insurance policy, newly issued or renewed.
(12) Joint underwriting association.--The term ``joint
underwriting association'' means an unincorporated association
of insurers established to provide a particular form of
insurance to the public.
(13) Mortgage insurance.--The term ``mortgage insurance''
means insurance against the nonpayment of, or default on, a
mortgage or loan for residential or commercial property.
(14) MSA.--The term ``MSA'' means a Metropolitan
Statistical Area or a Primary Metropolitan Statistical Area.
(15) Private mortgage insurance.--The term ``private
mortgage insurance'' means mortgage insurance other than
mortgage insurance made available under the National Housing
Act, title 38 of the United States Code, or title V of the
Housing Act of 1949.
(16) Property and casualty insurance.--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. Such term does
not include workers' compensation, professional liability, or
title insurance.
(17) Residual market.--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. The term includes
each statewide plan under part A of title XII of the National
Housing Act to assure fair access to insurance requirements.
(18) Rural area.--The term ``rural area'' means any area
that--
(A) has a population of 10,000 or more;
(B) has a continuous boundary; and
(C) contains only areas that are rural areas, as
such term is defined in section 520 of the Housing Act
of 1949 (except that clause (3)(B) of such section 520
shall not apply for purposes of this Act).
(19) Secretary.--The term ``Secretary'' means the Secretary
of Housing and Urban Development.
(20) State.--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. 26. EFFECTIVE DATE.
The requirements of this Act relating to reporting of information
by insurers shall take effect with respect to the first annual
reporting period that begins more than 36 months after the date of the
enactment of this Act.
<all>
HR 3169 IH----2
HR 3169 IH----3
HR 3169 IH----4
HR 3169 IH----5
Introduced in House
Introduced in House
Referred to the House Committee on Banking, Finance + Urban Affrs.
Referred to the Subcommittee on Consumer Credit and Insurance.
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