113 HR 4871 RH: TRIA Reform Act of 2014
U.S. House of Representatives
2014-07-16
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title and table of contents
(a)This Act may be cited as the TRIA Reform Act of 2014
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title and table of contents.
Title I—TRIA reform
Sec. 101. References.
Sec. 102. Extension of program.
Sec. 103. Certification of acts of terrorism.
Sec. 104. Separate treatment of conventional terrorism from NBCR terrorism.
Sec. 105. Availability of coverage.
Sec. 106. Terrorism loss risk-spreading premiums amount.
Sec. 107. Increase of aggregate retention amount; mandatory recoupment.
Sec. 108. Terrorism loss risk-spreading premium.
Sec. 109. Risk-sharing mechanisms.
Sec. 110. Reporting of terrorism insurance data.
Sec. 111. Delivery of notices to policyholders.
Sec. 112. Definition of control.
Sec. 113. Annual study of small insurer market competitiveness.
Sec. 114. CBO and OMB studies regarding budgeting for costs of Federal insurance programs.
Sec. 115. GAO study on upfront premiums and capital reserve fund.
Title II—National Association of Registered Agents and Brokers Reform
Sec. 201. Short title.
Sec. 202. Reestablishment of the National Association of Registered Agents and Brokers.
<enum>I</enum><header>TRIA reform</header>
<section id="H2D7F77B7157A40C3AF51024BA48B3D78"><enum>101.</enum><header>References</header><text display-inline="no-display-inline">Except as otherwise expressly provided, wherever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Terrorism Risk Insurance Act of 2002 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note).</text></section>
<section id="H670937A15F864FDBB45EF493DE37877E"><enum>102.</enum><header>Extension of program</header>
<subsection id="HEB6984D7CB444045A941C7E794C69859"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (a) of section 108 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended by striking <quote>December 31, 2014</quote> and inserting <quote>December 31, 2019</quote>.</text></subsection>
<subsection id="H792A568C39454EB0BEC2430FA56561F6"><enum>(b)</enum><header>Program years</header><text>Subparagraph (G) of section 102(11) (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended by striking <quote>2014</quote> and inserting <quote>2019</quote>.</text></subsection></section>
<section id="HB9FF1DC111F54830BDD0A5AC5EA90766"><enum>103.</enum><header>Certification of acts of terrorism</header>
<subsection id="H88127C13AE844BB9B53DA4612BA579D1"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (1) of section 102 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended—</text>
<paragraph id="HAA1E17BBA129424790E50A1E22CD7C8C"><enum>(1)</enum><text>in subparagraph (A), in the matter preceding clause (i), by striking <quote>concurrence with the Secretary of State</quote> and inserting <quote>consultation with the Secretary of Homeland Security</quote>;</text></paragraph>
<paragraph id="HB1E8DE9AF1464221933AC628D074FA67"><enum>(2)</enum><text>in subparagraph (B)—</text>
<subparagraph id="H6D71F9E625C043099CCD1B35EBC68BB5"><enum>(A)</enum><text>in clause (i), by striking <quote>; or</quote> and inserting a period;</text></subparagraph>
<subparagraph id="HE0F20EA9B32F4F43A0094DDBE02B06A9"><enum>(B)</enum><text>by striking clause (ii); and</text></subparagraph>
<subparagraph id="H76DE96C1359A495DB5ECDBC0D25A4A09"><enum>(C)</enum><text>by striking <quote>terrorism if—</quote> and all that follows through <quote>(i) the act</quote> and inserting <quote>terrorism if the act</quote>;</text></subparagraph></paragraph>
<paragraph id="H5685738F2F19420285879CFDBEDBD385"><enum>(3)</enum><text>by redesignating subparagraphs (C) and (D) as subparagraphs (E) and (G), respectively;</text></paragraph>
<paragraph id="H6A3411E1FBB84430881739DFE389EA58"><enum>(4)</enum><text>by inserting after subparagraph (B) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H801C30CE5CED471087A8B40813B063D9" style="OLC">
<subparagraph id="H4F4BD53A3640486BA79CF25C2BEC02AA"><enum>(C)</enum><header>Timing of certification</header>
<clause id="HCFE6C77B665D4394A945D4F98A4F9FFD"><enum>(i)</enum><header>Preliminary certification notice</header><text display-inline="yes-display-inline">The Secretary shall issue a preliminary certification notice indicating whether an act is expected to be a certified act of terrorism not later than 15 days after—</text>
<subclause id="HC3CF72F0D7834073A3E68E5329D55886"><enum>(I)</enum><text>the date of the occurrence of a potential act of terrorism; or</text></subclause>
<subclause id="HFDE969CEE07944A9A866C4906B26B48C"><enum>(II)</enum><text>the receipt of a petition seeking a preliminary certification decision submitted by an insurer having an in-force policy or policies that could be affected by a certification decision.</text></subclause></clause>
<clause id="HA39149C1A98343849EBCE08D88078505"><enum>(ii)</enum><header>Final certification notice</header><text display-inline="yes-display-inline">Not later than 90 days after the date of the occurrence of a potential act of terrorism or the receipt of a petition submitted to the Secretary pursuant to clause (i)(II), the Secretary shall issue a final certification notice indicating whether an act is a certified act of terrorism for purposes of this Act.</text></clause>
<clause id="H5F07EF4DE70641E1B0802826CC9C1428"><enum>(iii)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Failure to issue a preliminary certification notice under clause (i) shall not prevent the Secretary from issuing a final certification notice under clause (ii).</text></clause></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph>
<paragraph id="HCAAA880266F149C9A27C33A03A233119"><enum>(5)</enum><text>by inserting before subparagraph (G), as so redesignated by paragraph (3) of this subsection, the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H7531EA1A534C443AA54529D29162E6F5" style="OLC">
<subparagraph id="HB6B958A629E84B6EA00C1CB8B4DA93E7"><enum>(F)</enum><header>Failure to make determination</header><text display-inline="yes-display-inline">If the Secretary does not certify, or make a determination not to certify, an act as an act of terrorism before the expiration of the 90-day period beginning on the occurrence of such act, such act shall be treated for purposes of this Act as having been determined by the Secretary not to be an act of terrorism and such determination shall be final and shall not be subject to judicial review.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection commented="no" id="H2736A2907F434632BDDE82603D3E85F7"><enum>(b)</enum><header>Applicability</header><text>The amendments made by subsection (a) shall apply to the Program Year for the Terrorism Insurance Program established by title I of the Terrorism Risk Insurance Act of 2002 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) that begins on January 1, 2015, and Program Years thereafter.</text></subsection></section>
<section id="H807A8E951CB64813A018415C620CF082"><enum>104.</enum><header>Separate treatment of conventional terrorism from NBCR terrorism</header>
<subsection id="H16D8420064DA4584BCA5A15F339A0E15"><enum>(a)</enum><header>Definition</header>
<paragraph id="H5E079FC75287402991ED8650C5F653BF"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Section 102 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended—</text>
<subparagraph id="HD5DC1F19310542ADABAD4D3258DE5736"><enum>(A)</enum><text>in paragraph (1), by inserting after subparagraph (C), as added by section 103(a)(4) of this Act, the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HDA5B1723513544EC8E887365C822D302" style="OLC">
<subparagraph id="H47D600D0F1C94083925A6C3E17F0DC73"><enum>(D)</enum><header>Act of NBCR terrorism</header><text display-inline="yes-display-inline">Each certification of an act of terrorism under subparagraph (A) shall include a determination of whether such act involves NBCR terrorism.</text></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="H71B9F15A25E2423897C0908A5D406485"><enum>(B)</enum><text>by redesignating paragraphs (9) through (16) as paragraphs (10) through (17), respectively; and</text></subparagraph>
<subparagraph id="H017DEFC353C64BFB8D5CA83EA8FE8E19"><enum>(C)</enum><text>by inserting after paragraph (8) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H6B21CF3FFA104AEE9157668927C42E99" style="OLC">
<paragraph id="HDD34F6452659441FAA6C2BDA86623DC7"><enum>(9)</enum><header>NBCR terrorism</header><text display-inline="yes-display-inline">Notwithstanding paragraph (1), the term <quote>NBCR terrorism</quote> means an act of terrorism to the extent that the insured losses involve, regardless of any other cause or event that contributes concurrently or in any sequence to such insurance loss—</text>
<subparagraph id="HDC325B7AE5B5434D8C557D52A9F4D551"><enum>(A)</enum><text>an act of terrorism that is carried out by means of the dispersal or application of radioactive material, or through the use of a nuclear weapon or device that involves or produces a nuclear reaction, nuclear radiation, or radioactive contamination;</text></subparagraph>
<subparagraph id="H24C6D11465E84D15B40CFDC47EAB25CF"><enum>(B)</enum><text>the release of radioactive material, and it appears that one purpose of the act of terrorism was to release such material;</text></subparagraph>
<subparagraph id="H208FAA9C3EDF488FBDAF54A0815FC52C"><enum>(C)</enum><text>an act of terrorism that is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical material; or</text></subparagraph>
<subparagraph id="H3D6F8A2C1E8443D4BE88C77D914589D1"><enum>(D)</enum><text>the release of pathogenic or poisonous biological or chemical material, and it appears that one purpose of the act of terrorism was to release such material.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph commented="no" id="H85B0FC5106A6487290874663F7D199EC"><enum>(2)</enum><header>Applicability</header><text>The amendments made by paragraph (1) shall apply to the Program Year for the Terrorism Insurance Program established by title I of the Terrorism Risk Insurance Act of 2002 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) that begins on January 1, 2016, and Program Years thereafter.</text></paragraph></subsection>
<subsection id="HFE0FA3CA82864A06B3913DFC8D9853D1"><enum>(b)</enum><header>Federal share of insured loss compensation</header><text>Subparagraph (A) of section 103(e)(1) (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended—</text>
<paragraph id="HBF4CF21216264D96B4C4C60BF0EF0467"><enum>(1)</enum><text>by striking <quote>The Federal share</quote> and inserting <quote>Subject to subparagraphs (B) and (C), the Federal share</quote>;</text></paragraph>
<paragraph id="HA8E18E02803B4B8FA0432F23D908E576"><enum>(2)</enum><text>by striking <quote>an insurer during the Transition period</quote> and inserting the following:</text>
<quoted-block display-inline="yes-display-inline" id="H090C228F39284458B250AA0DAD7AF2C0" style="OLC"><text>an insurer—</text>
<clause id="H79C40F25847A4DC19FC5285D9D7B61ED"><enum>(i)</enum><text display-inline="yes-display-inline">during the Transition period,</text></clause><after-quoted-block>;</after-quoted-block></quoted-block></paragraph>
<paragraph id="H1ECC89E65C18485F83996C80D3E667B2"><enum>(3)</enum><text>by inserting <quote>through the Program Year ending on December 31, 2015,</quote> after <quote>each Program Year thereafter</quote>;</text></paragraph>
<paragraph id="H8A490F8EA7D84A6AB50CDBAA65775BE5"><enum>(4)</enum><text>by striking the period at the end and inserting <quote>; and</quote>; and</text></paragraph>
<paragraph id="H0A1EB86ECC5248ED98F3C75EEBE4A7FA"><enum>(5)</enum><text>by adding at the end the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="HA6856D7FFF334D0EACCDB61B68E6365B" style="OLC">
<clause id="HEE6E5A4B54064AE1B390C39CADD0E7EC"><enum>(ii)</enum><text display-inline="yes-display-inline">shall be equal to—</text>
<subclause id="H83A7D209F61247D1BFE2994312C6D5F2"><enum>(I)</enum><text display-inline="yes-display-inline">except as provided in subclause (II)—</text>
<item id="H821FDA5041DB4E1FBCCBA544F855BDCF"><enum>(aa)</enum><text>during the Program Year beginning on January 1, 2016, 84 percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such Program Year;</text></item>
<item id="H9F53C102564B41BAA555186642E1C625"><enum>(bb)</enum><text display-inline="yes-display-inline">during the Program Year beginning on January 1, 2017, 83 percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such Program Year;</text></item>
<item id="H2C2256A6F2AD4825BA9D6D2946606F33"><enum>(cc)</enum><text display-inline="yes-display-inline">during the Program Year beginning on January 1, 2018, 82 percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such Program Year; and</text></item>
<item id="H35B2C398E33E4ED0B8EBF0AAB65F10FC"><enum>(dd)</enum><text display-inline="yes-display-inline">during the Program Year beginning on January 1, 2019, 80 percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such Program Year; and</text></item></subclause>
<subclause id="HA259D51D5AC44F9D9E4421A2AFCCC59D"><enum>(II)</enum><text display-inline="yes-display-inline">in the case of insured losses resulting from acts of NBCR terrorism, during the Program Year beginning on January 1, 2016, and each Program Year thereafter, 85 percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such Program Year.</text></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H7903263241314B38B2CC6A8DF746EA03"><enum>(c)</enum><header>Program trigger</header><text display-inline="yes-display-inline">Subparagraph (B) of section 103(e)(1) (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended—</text>
<paragraph id="H774CCDD1DCE0404E83F844D3872478E5"><enum>(1)</enum><text>in the matter preceding clause (i)—</text>
<subparagraph id="H3FD19E2D21B649869CDA8B724138D230"><enum>(A)</enum><text>by striking <quote>a certified act</quote> and inserting <quote>certified acts</quote>; and</text></subparagraph>
<subparagraph id="HF8DF6FBC4EEF4ACF8B8D1D05DD9EE631"><enum>(B)</enum><text>by striking <quote>such certified act</quote> and inserting <quote>such certified acts</quote>;</text></subparagraph></paragraph>
<paragraph id="H4D0315C7B2514DA7BA59079C334C8721"><enum>(2)</enum><text>in clause (i) by striking <quote>or</quote> at the end;</text></paragraph>
<paragraph id="HE207A264E2AC423A944371A226ED9577"><enum>(3)</enum><text>in clause (ii), by striking the period at the end and inserting the following <quote>through the Program Year ending on December 31, 2015; or</quote>;</text></paragraph>
<paragraph id="HD51ADF5EF1BA4231A4869CE542C852CF"><enum>(4)</enum><text>by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H9A57AB2C4AD342B08741F681FC1A7420" style="OLC">
<clause id="HD1E45EE0018F48568DA68013303FCE9D"><enum>(iii)</enum>
<subclause commented="no" display-inline="yes-display-inline" id="H407999D688574D9C9E0E9EB1D3A13AE7"><enum>(I)</enum><text display-inline="yes-display-inline">except as provided in subclause (II)—</text>
<item id="HB03C2542972F424F8BA43329C68B0232" indent="up1"><enum>(aa)</enum><text display-inline="yes-display-inline">$200,000,000, with respect to such insured losses occurring in the Program Year beginning on January 1, 2016;</text></item>
<item id="H7D976521A0A84E2F9AA8547879D33BF2" indent="up1"><enum>(bb)</enum><text>$300,000,000, with respect to such insured losses occurring in the Program Year beginning on January 1, 2017;</text></item>
<item id="H6DA73EC3BB2944438DF9617AB58AA9B5" indent="up1"><enum>(cc)</enum><text>$400,000,000, with respect to such insured losses occurring in the Program Year beginning on January 1, 2018; and</text></item>
<item id="HB35D945D6DDC4AF0840A94B3E74EAF55" indent="up1"><enum>(dd)</enum><text>$500,000,000, with respect to such insured losses occurring in the Program Year beginning on January 1, 2019; and</text></item></subclause>
<subclause id="HBB3AD83246D44CAEB20AA4022FA53B38" indent="up1"><enum>(II)</enum><text display-inline="yes-display-inline">in the case of an act of NBCR terrorism, $100,000,000, with respect to such insured losses occurring in the Program Year beginning on January 1, 2016, or any Program Year thereafter.</text></subclause></clause><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph>
<paragraph id="H5F9116C8232F45F0B615C71961364953"><enum>(5)</enum><text>by adding after and below clause (iii), as added by paragraph (4) of this subsection, the following:</text>
<quoted-block display-inline="no-display-inline" id="H06493A76D4DC4F9DB58C9A87DA5A4A4C" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">In determining the aggregate industry insured losses resulting from certified acts of terrorism for purposes of this subparagraph, the Secretary shall not consider any act of terrorism resulting, in the aggregate, in less than $50,000,000 in insured losses.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section>
<section display-inline="no-display-inline" id="H99B5FD19B2A24412B776C4F5542236B0"><enum>105.</enum><header>Availability of coverage</header><text display-inline="no-display-inline">Subsection (c) of section 103 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HA681166382D249CDBC7D3A868CC2E6B4" style="OLC">
<subsection id="H3E89F24D15024D049350112942EAA7F5"><enum>(c)</enum><header>Mandatory availability</header>
<paragraph id="H24431FA27C8E41BEA2C7B6191D811370"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in paragraph (2), during each Program Year, each entity that meets the definition of an insurer under section 102 shall make available—</text>
<subparagraph id="HB1658773BCE546B3AEC5C98818C7D6A5"><enum>(A)</enum><text>in all of its property and casualty insurance policies, coverage for insured losses; and</text></subparagraph>
<subparagraph id="H999B7A0ABE524E69AA10A692F9C8AF4C"><enum>(B)</enum><text display-inline="yes-display-inline">property and casualty insurance coverage for insured losses that does not differ materially from the terms, amounts, and other coverage limitations applicable to losses arising from events other than acts of terrorism.</text></subparagraph></paragraph>
<paragraph id="HBE41EDE06B254D30A0B3E5279A9605CC"><enum>(2)</enum><header>No mandatory availability for small insurers</header><text display-inline="yes-display-inline">The Secretary shall provide, by regulation and in consultation with State insurance regulatory authorities, that paragraph (1) shall not apply for a Program Year with respect to any small insurer (as such term is defined in such regulations by the Secretary) that, at the option of the insurer, makes a request for such inapplicability for such Program Year to the appropriate State insurance regulatory authority for the State in which such insurer is domiciled and is determined by such State insurance regulatory authority to meet such requirements for financial hardship or financial infeasibility of providing coverage for insured losses as the Secretary shall establish in such regulations. The insurer shall provide notice, in a manner satisfactory to the State insurance regulatory authority, informing affected prospective and current policyholders whether such coverage is not provided by the insurer. This paragraph may not be construed to require any State insurance regulatory authority to undertake making determinations under this paragraph.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H45AAB28214044AD7844BABF3730391D9"><enum>106.</enum><header>Terrorism loss risk-spreading premiums amount</header>
<subsection id="HFE729DF7FABB436492B8FC781D4538DD"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subparagraph (C) of section 103(e)(7) (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended—</text>
<paragraph id="H59B8B754F68E49509834BC5C2351678F"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>subparagraphs (A) through (E)</quote> and inserting <quote>subparagraphs (A) through (F)</quote>; and</text></paragraph>
<paragraph id="H08205F867F4A413FBF98E6E60B5375EB"><enum>(2)</enum><text>by striking <quote>133 percent</quote> and inserting <quote>150 percent</quote>.</text></paragraph></subsection>
<subsection commented="no" id="HB93AD2BF5C7041248C1BB862EF8AA223"><enum>(b)</enum><header>Applicability</header><text>The amendment made by subsection (a) shall apply to the Program Year for the Terrorism Insurance Program established by title I of the Terrorism Risk Insurance Act of 2002 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) that begins on January 1, 2016, and Program Years thereafter.</text></subsection></section>
<section id="H6D57B3B66F634F438CE2090748DA360D"><enum>107.</enum><header>Increase of aggregate retention amount; mandatory recoupment</header>
<subsection id="H670D9D9EDAF643C7945D08A36F2166C6"><enum>(a)</enum><header>In General</header><text display-inline="yes-display-inline">Paragraph (6) of section 103(e) (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended—</text>
<paragraph id="HA1FBC18849FA4247B1B174DE5245C047"><enum>(1)</enum><text>in subparagraph (D)(ii), by striking <quote>and</quote> at the end;</text></paragraph>
<paragraph id="HD9F9584300F54B55B4C0111B70E8C993"><enum>(2)</enum><text>in subparagraph (E)—</text>
<subparagraph id="HFC688A9F605A47F2B9CC40D31F41A363"><enum>(A)</enum><text>in the matter preceding clause (i), by inserting <quote>through the Program Year ending on December 31, 2015</quote> before the comma; and</text></subparagraph>
<subparagraph id="HB108090D341A45DCAE799BD52021D557"><enum>(B)</enum><text>in clause (ii), by striking the period at the end and inserting <quote>; and</quote>; and</text></subparagraph></paragraph>
<paragraph id="HE5F8C7CDE2E64F1BA34778593AB8E822"><enum>(3)</enum><text display-inline="yes-display-inline">by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H38ED4FB18A8E4F20AE956EC6D8E3AB1A" style="OLC">
<subparagraph id="H45B31E5500A5484A932CF44C3D28B90D"><enum>(F)</enum><text display-inline="yes-display-inline">for the Program Year beginning January 1, 2016, and each Program Year thereafter, the lesser of—</text>
<clause id="H17ADDEA6DA9F4A3F8A4E2C510D64AB39"><enum>(i)</enum><text>the amount that is equal to the sum of the insurer deductibles for the Program Year for all insurers participating in the Program; and</text></clause>
<clause id="H909F1B1723244D77BDA862146C0C7A58"><enum>(ii)</enum><text>the aggregate amount, for all insurers, of insured losses during such Program Year.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HF72E78CEFA40480EBC37911F406465E5"><enum>(b)</enum><header>Mandatory recoupment</header>
<paragraph id="H030F89C3F3114EE8B2A24CDBBD249E54"><enum>(1)</enum><header>Amount; timing</header><text display-inline="yes-display-inline">Paragraph (7) of section 103(e) (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended—</text>
<subparagraph id="H470CE60501C6439582A23FA7A137EE1B"><enum>(A)</enum><text>by striking subparagraphs (A) and (B) and inserting the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H9EC4D6C5DBF14188AECD5C7B7159E331" style="OLC">
<subparagraph id="H9B2159F89A914CC98BBDF1454AC956C3"><enum>(A)</enum><header>Mandatory recoupment amount</header><text display-inline="yes-display-inline">For purposes of this paragraph, the mandatory recoupment amount for each of the periods referred to in subparagraphs (A) through (F) of paragraph (6) shall be equal to the lesser of—</text>
<clause id="HF58C9F04919144219C3E4866C310493F"><enum>(i)</enum><text>the aggregate amount, for all insurers, of insured losses during such period that are compensated by the Federal Government pursuant to paragraph (1); or</text></clause>
<clause id="H60ADB3201BC54D86897C233C95CD81C7"><enum>(ii)</enum><text>the insurance marketplace aggregate retention amount under paragraph (6) for such period.</text></clause></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="HA983DC961FB541B69D9D7722747F5B9B"><enum>(B)</enum><text>in subparagraph (E)(i)(III), by striking <quote>after January 1, 2012</quote> and inserting <quote>before December 31, 2014</quote>; and</text></subparagraph>
<subparagraph id="H7A8162098F9A4E0F846B3CD7A68F4E28"><enum>(C)</enum><text>by redesignating subparagraphs (C), (D), (E) (as so amended), and (F) as subparagraphs (B), (C), (D), and (E), respectively.</text></subparagraph></paragraph>
<paragraph id="H75FFB03FF5AE40778C149649F09EAD32"><enum>(2)</enum><header>Conforming amendments</header><text>Section 103(e) (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended in paragraph (7)(D)(i), as so redesignated by paragraph (1)(C) of this subsection, by striking <quote>subparagraph (C)</quote> and inserting <quote>subparagraph (B)</quote>.</text> </paragraph></subsection></section>
<section id="H964B59A999284D8BA07183C3BA7633D9"><enum>108.</enum><header>Terrorism loss risk-spreading premium</header>
<subsection id="H452338DA2CE6432386B89142739C3045"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 103(e) (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended by striking paragraph (8) and inserting the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H28E1CB6ECCF1402BBF6D7011A7ABE1D5" style="OLC">
<paragraph id="HF27BEE13F38A40ACBA55F64AC93FB733"><enum>(8)</enum><header>Terrorism loss risk-spreading premiums</header>
<subparagraph id="H93C8E92F8D1B42109CAC3D72B231ADDA"><enum>(A)</enum><header>Establishment</header><text display-inline="yes-display-inline">After an act of terrorism, the Secretary shall, to the extent provided in paragraph (7)(B), and may, to the extent provided in paragraph (7)(C), establish terrorism loss risk-spreading premiums, which shall be imposed as a policyholder premium surcharge on property and casualty insurance policies for all participating insurers in force after the date of such establishment.</text></subparagraph>
<subparagraph id="H7A37A82A23E04E4CB97AEE3BDE5184B6"><enum>(B)</enum><header>Collection</header><text>The Secretary shall provide for insurers to collect terrorism loss risk-spreading premiums and remit such amounts collected to the Secretary.</text></subparagraph>
<subparagraph id="H663B6AA42ED34C838E6173AA32189444"><enum>(C)</enum><header>Determination of premiums</header><text>In determining the method and manner of imposing terrorism loss risk-spreading premiums, including the amount of such premiums, the Secretary shall—</text>
<clause id="HF228948B32AA4ABB96A8E5D078200F27"><enum>(i)</enum><text>impose such terrorism loss risk-spreading premiums beginning with such period of coverage during the year as the Secretary determines appropriate, but shall commence imposition of such premiums not later than 18 months after the occurrence of the act of terrorism for which such premiums are imposed;</text></clause>
<clause id="H9004E5E809EB4BA08B349C23047E966C"><enum>(ii)</enum><text>base any terrorism loss risk-spreading premium on a percentage of the premium amount charged for property and casualty insurance coverage under the policy; and</text></clause>
<clause id="H4C02D91A71AC42AFA56C4290DE4B0F0C"><enum>(iii)</enum><text>take into consideration—</text>
<subclause id="HDE16D98E3CCB418DB0D94DC647E40BC5"><enum>(I)</enum><text>the economic impact on commercial centers of urban areas, including the effect on commercial rents and commercial insurance premiums, particularly rents and premiums charged to small businesses, and the availability of lease space and commercial insurance within urban areas;</text></subclause>
<subclause id="H920BAC9606A94C1284D4397913E1AF8E"><enum>(II)</enum><text>the risk factors related to rural areas and smaller commercial centers, including the potential exposure to loss and the likely magnitude of such loss, as well as any resulting cross-subsidization that might result; and</text></subclause>
<subclause id="H4181F1630BFF4D00BB15189D5AC3A5FC"><enum>(III)</enum><text>the various exposures to terrorism risk for different lines of insurance.</text></subclause></clause></subparagraph>
<subparagraph id="HD3B8977C47D2466187C2778E7FE6FCD4"><enum>(D)</enum><header>Percentage limitation</header><text>A terrorism loss risk-spreading premium collected on a discretionary basis pursuant to paragraph (7)(C) shall not be less than, on an annual basis, the amount equal to 3 percent of the premium charged for property and casualty insurance coverage under the policy.</text></subparagraph>
<subparagraph id="H74D8E0472C2F4675BEED4B7352DB95D4"><enum>(E)</enum><header>Timing of premiums</header><text>The Secretary may adjust the timing of terrorism loss risk-spreading premiums to provide for equivalent application of the provisions of this title to policies that are not based on a calendar year, or to apply such provisions on a daily, monthly, or quarterly basis, as appropriate.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection commented="no" id="H6BC17003AEA348B4851A78AFC365DB81"><enum>(b)</enum><header>Applicability</header><text>The amendment made by subsection (a) shall apply to the Program Year for the Terrorism Insurance Program established by title I of the Terrorism Risk Insurance Act of 2002 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) that begins on January 1, 2016, and Program Years thereafter.</text></subsection></section>
<section id="HB47B826C7CD74B2E93CDC81D720697AF"><enum>109.</enum><header>Risk-sharing mechanisms</header>
<subsection id="H4A45D80F13F04B43BD1737CC6F697453"><enum>(a)</enum><header>In General</header><text display-inline="yes-display-inline">Section 103(e) (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HAEE21C6257BC4F368089C807EDB1BAC3" style="OLC">
<paragraph id="H4400A3904F0242D08DBA4B01EE34F980"><enum>(9)</enum><header>Risk-sharing mechanisms</header>
<subparagraph id="HC81A19EE61B14CB59E8888EFD47ABCDE"><enum>(A)</enum><header>Finding; rule of construction</header><text display-inline="yes-display-inline">The Congress finds that it is desirable to encourage the growth of nongovernmental, private market reinsurance capacity for protection against losses arising from acts of terrorism. Therefore, nothing in this title shall prohibit insurers from developing risk-sharing mechanisms (including mutual reinsurance facilities and agreements, use of the capital markets, and insurance-linked securities) to voluntarily reinsure terrorism losses between and among themselves that are not subject to reimbursement under this section.</text></subparagraph>
<subparagraph id="H4BCD6813050A4B25BD57CFB6E5EF4752"><enum>(B)</enum><header>Establishment of advisory committee</header><text>The Secretary shall appoint an Advisory Committee to—</text>
<clause id="HA779D10D3B5E48DEA761BE2D09ADAFB4"><enum>(i)</enum><text>encourage the creation and development of such risk-sharing mechanisms;</text></clause>
<clause id="HDE7FAC56B90B432E8DD3EC3BFF7439A5"><enum>(ii)</enum><text>assist the Secretary and be available to administer such risk-sharing mechanisms; and</text></clause>
<clause id="H724C9AC219C146CEBA8154CE2BCD90C0"><enum>(iii)</enum><text>develop articles of incorporation, bylaws, and a plan of operation for any long-term reinsurance facility authorized or created in the future.</text></clause></subparagraph>
<subparagraph id="H042763F739774BC6820F334B86A09E18"><enum>(C)</enum><header>Membership</header><text>The Advisory Committee shall be composed of nine members who are directors, officers, or other employees of insurers, reinsurers, or capital market participants that are participating or that desire to participate in such mechanisms, and who are representative of the affected sectors of the insurance industry, including commercial property insurance, commercial casualty insurance, reinsurance, and alternative risk transfer industries.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection commented="no" id="HB74509F801F74AE7A950710B987305DE"><enum>(b)</enum><header>Applicability</header><text>The amendment made by subsection (a) shall apply to the Program Year for the Terrorism Insurance Program established by title I of the Terrorism Risk Insurance Act of 2002 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) that begins on January 1, 2015, and Program Years thereafter.</text></subsection></section>
<section id="H57A7B06F1E464791B1A33ABBC986DF04"><enum>110.</enum><header>Reporting of terrorism insurance data</header><text display-inline="no-display-inline">Section 104 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HA01168558B7C4B1593DC6FD0F9366FAB" style="OLC">
<subsection id="H381D7F5715BB442CACDBBEEFBAD7FCB1"><enum>(h) </enum><header>Reporting of terrorism insurance data</header>
<paragraph id="H3FDFFA1E6DB24ED6BDA6AE8888397E67"><enum>(1)</enum><header>Authority</header><text display-inline="yes-display-inline">During the Program Year beginning on January 1, 2016, and in each Program Year thereafter, the Secretary shall require insurers participating in the Program to submit to the Secretary such information regarding insurance coverage for terrorism losses of such insurers as the Secretary considers appropriate to analyze the effectiveness of the Program, which shall include information regarding—</text>
<subparagraph id="H2235E8B95D6040B6AE0885CCC7BBF7BD"><enum>(A)</enum><text>lines of insurance with exposure to such losses;</text></subparagraph>
<subparagraph id="H57B00363B38645879DA788B2D5BE90CC"><enum>(B)</enum><text>premiums earned on such coverage;</text></subparagraph>
<subparagraph id="H8C455F8053FE4E56A37D3F422B627EA4"><enum>(C)</enum><text>geographical location of exposures;</text></subparagraph>
<subparagraph id="H8492C13CF0C34F4BB540FD7361257E2A"><enum>(D)</enum><text>pricing of such coverage;</text></subparagraph>
<subparagraph id="H1E31E3FFA30045B79209F9E230D96CA7"><enum>(E)</enum><text>the take-up rate for such coverage;</text></subparagraph>
<subparagraph id="H243FC443E1BB46AD841F8F6F59BED569"><enum>(F)</enum><text display-inline="yes-display-inline">the amount of private reinsurance for acts of terrorism purchased; and</text></subparagraph>
<subparagraph id="H5CEE58979D354F83AF4297B269F12569"><enum>(G)</enum><text>such other matters as the Secretary considers appropriate.</text></subparagraph></paragraph>
<paragraph id="H0F7F46D62E8242169881F283527EAD21"><enum>(2)</enum><header>Reports</header><text display-inline="yes-display-inline">Not later than 6 months after the termination of the Program Year beginning on January 1, 2016, and not later than 6 months after the termination of each Program Year thereafter, the Secretary shall submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate that includes—</text>
<subparagraph id="HD094624FB4524EABA7C2810B62082155"><enum>(A)</enum><text>an analysis of the overall effectiveness of the Program;</text></subparagraph>
<subparagraph id="H8194BF8C2751449FB1682B674E5B7141"><enum>(B)</enum><text>an evaluation of any changes or trends in the data collected under paragraph (1);</text></subparagraph>
<subparagraph id="H08BB2863D649420A9A99144B34CCF98A"><enum>(C)</enum><text display-inline="yes-display-inline">an evaluation of whether any aspects of the Program have the effect of discouraging or impeding insurers from providing commercial property casualty insurance coverage or coverage for acts of terrorism;</text></subparagraph>
<subparagraph id="HC4A6EEB20B5D4C7CBCD40D0DDB96B02E"><enum>(D)</enum><text>an evaluation of the impact of the Program on workers’ compensation insurers;</text></subparagraph>
<subparagraph id="HAC50486FAFE746D299DB3382954B3E68"><enum>(E)</enum><text>an evaluation of the impact on availability and affordability of terrorism insurance coverage and fiscal protection of the taxpayers of separate Federal treatment under the Program for nuclear, biological, chemical, and radiological terrorism; and</text></subparagraph>
<subparagraph id="H41B39A59AFFC4B2B8D1254CD12C2BE55"><enum>(F)</enum><text>in the case of the data reported in paragraph (1)(B), an updated estimate of the total amount earned since the commencement of Program Year 1.</text></subparagraph></paragraph>
<paragraph id="H3027C75AD85F4478A8EFC1CCA3691C1F"><enum>(3)</enum><header>Protection of data</header><text display-inline="yes-display-inline">To the extent possible, the Secretary shall contract with an insurance statistical aggregator to collect the information described in paragraph (1), which shall keep any nonpublic information confidential and provide it to the Secretary in an aggregate form or in such other form or manner that does not permit identification of the insurer submitting such information.</text></paragraph>
<paragraph id="H3B8EE9BC30A5411DB343D037B1B53ECB"><enum>(4)</enum><header>Advance coordination</header><text>Before collecting any data or information under paragraph (1) from an insurer, or affiliate of an insurer, the Secretary shall coordinate with the appropriate State insurance regulatory authorities or their representatives and any relevant government agency or publicly available sources to determine if the information to be collected is available from, and may be obtained in a timely manner by, individually or collectively, such entities. If the Secretary determines that such data or information is available, and may be obtained in a timely matter, from such entities, the Secretary shall obtain the data or information from such entities. If the Secretary determines that such data or information is not so available, the Secretary may collect such data or information from an insurer and affiliates.</text></paragraph>
<paragraph id="H4EBAE9A603ED4EF2AB22B38817B33F2F"><enum>(5)</enum><header>Confidentiality</header>
<subparagraph id="HF32B01769F5848F4871F2AA25AA1016A"><enum>(A)</enum><header>Retention of privilege</header><text display-inline="yes-display-inline">The submission of any non-publicly available data and information to the Secretary and the sharing of any non-publicly available data with or by the Secretary among other Federal agencies, the State insurance regulatory authorities and their collective agents, or any other entities under this subsection shall not constitute a waiver of, or otherwise affect, any privilege arising under Federal or State law (including the rules of any Federal or State court) to which the data or information is otherwise subject.</text></subparagraph>
<subparagraph id="HB7B99CD5D45148F1A19325708F407140"><enum>(B)</enum><header>Continued application of prior confidentiality agreements</header><text>Any requirement under Federal or State law to the extent otherwise applicable, or any requirement pursuant to a written agreement in effect between the original source of any non-publicly available data or information and the source of such data or information to the Secretary, regarding the privacy or confidentiality of any data or information in the possession of the source to the Secretary, shall continue to apply to such data or information after the data or information has been provided pursuant to this subsection.</text></subparagraph>
<subparagraph id="HFCB3FF088BA342909C267E87088C5054"><enum>(C)</enum><header>Information-sharing agreement</header><text>Any data or information obtained by the Secretary under this subsection may be made available to State insurance regulatory authorities, individually or collectively through an information-sharing agreement that—</text>
<clause id="HDCD658B27AA04371A7458E1D145E8A5B"><enum>(i)</enum><text>shall comply with applicable Federal law; and</text></clause>
<clause id="H8FB1E8DE180C412BBD3CD65E2F3817F4"><enum>(ii)</enum><text>shall not constitute a waiver of, or otherwise affect, any privilege under Federal or State law (including any privilege referred to in subparagraph (A) and the rules of any Federal or State court) to which the data or information is otherwise subject.</text></clause></subparagraph>
<subparagraph id="H1DAE5C4D59184FEDB03F89CB229148F7"><enum>(D)</enum><header>Agency disclosure requirements</header><text><external-xref legal-doc="usc" parsable-cite="usc/5/552">Section 552</external-xref> of title 5, United States Code, including any exceptions thereunder, shall apply to any data or information submitted under this subsection to the Secretary by an insurer or affiliate of an insurer.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H202790AF12584B06AEBF842C9CF53A04"><enum>111.</enum><header>Delivery of notices to policyholders</header><text display-inline="no-display-inline">Section 103(b)(2) (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended—</text>
<paragraph id="H531AF2C81C084D0492EC263B30EECC26"><enum>(1)</enum><text>in subparagraph (B), by striking <quote>, purchase,</quote>; and</text></paragraph>
<paragraph id="H388BED1BB92B49838A70E08C25C6C857"><enum>(2)</enum><text>in subparagraph (C), by striking <quote>, purchase,</quote>.</text></paragraph></section>
<section id="H4C2FB5B0B5B84E2CA4A29F4295531A36"><enum>112.</enum><header>Definition of control</header><text display-inline="no-display-inline">Paragraph (3) of section 102 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended—</text>
<paragraph id="H4666405D651043AE840F8184999388EB"><enum>(1)</enum><text>by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii), and (iii), respectively and realigning such clauses, as so redesignated, so as to be indented six ems from the left margin;</text></paragraph>
<paragraph id="H40E03342741241D6870B882EB4AF1778"><enum>(2)</enum><text>in the matter preceding clause (i) (as so redesignated), by striking <quote>An entity has</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="HC45A522B74E4415C9925480E79948BF9" style="OLC">
<subparagraph id="HF6622A1B7A4340D8823231033F1744FD"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">An entity has</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph>
<paragraph id="H0007A070132640CCBD9FB28498A48F9D"><enum>(3)</enum><text>by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H04F02680F63C47DCA1DB98F0364B7A46" style="OLC">
<subparagraph id="H452607F0853F4E349B50D35CE3D73F78"><enum>(B)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">An entity, including any affiliate thereof, does not have control over another entity if, as of the date of the enactment of the <short-title>TRIA Reform Act of 2014</short-title>, the entity is acting as an attorney-in-fact, as defined by the Secretary, for the other entity and such other entity is a reciprocal insurer, provided that the entity is not, for reasons other than the attorney-in-fact relationship, defined as having control under subparagraph (A).</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section>
<section id="H4AF7A1B9EAEB473BA5BA558FAE2C989F"><enum>113.</enum><header>Annual study of small insurer market competitiveness</header><text display-inline="no-display-inline">Section 108 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H5A4AFBA6A4DB41559F364CF66D178FF4" style="OLC">
<subsection id="H88A93AC231274039BA87EACE49050D41"><enum>(h)</enum><header>Study of small insurer market competitiveness</header>
<paragraph id="HF9351E9A97554AADB363F8BAC97A73AD"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary shall conduct an annual study of small insurers participating in the Program, and identify any competitive challenges small insurers face in the terrorism risk insurance marketplace, including—</text>
<subparagraph id="H88993BC4FC004AED948B8FFE931D5AED"><enum>(A)</enum><text>changes to the market share, premium volume, and policyholder surplus of small insurers relative to large insurers;</text></subparagraph>
<subparagraph id="H77E8B94F8A2F444D9A8AF72CEC559C3D"><enum>(B)</enum><text>how the property and casualty insurance market for terrorism risk differs between small and large insurers, and whether such a difference exists within other perils;</text></subparagraph>
<subparagraph id="HC46523D807924FE29E260D2BB4464578"><enum>(C)</enum><text>the impact of the Program’s mandatory availability requirement under section 103(c) and the voluntary opt-out for small insurers;</text></subparagraph>
<subparagraph id="H4454E70B9AEB47C1B6437AFA9C389CBC"><enum>(D)</enum><text>the effect of increasing the trigger amount for the Program under section 103(e)(1)(B)(iii)(I) on small insurers;</text></subparagraph>
<subparagraph id="H588F8253D4FC4F3F8F0E66A8D836162F"><enum>(E)</enum><text>the availability and cost of private reinsurance for small insurers; and</text></subparagraph>
<subparagraph id="H2DA7F698DF6A4D49AA50935527DCE545"><enum>(F)</enum><text>the impact that State workers compensation laws have on small insurers, particularly the impact of mandatory, non-excludable participation and unlimited financial liability.</text></subparagraph></paragraph>
<paragraph id="H3DA658B033D94A8FB0F2644A92B2C89E"><enum>(2)</enum><header>Timing and report</header><text>The Secretary shall complete the first study under paragraph (1) and submit a report to the Congress setting forth the findings and conclusions of the study not later than June 30, 2016, and shall complete an annual study under paragraph (1) and submit a report regarding such study to the Congress by June 1 annually thereafter.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H4E642CA032784D77A5F332F6EC132574"><enum>114.</enum><header>CBO and OMB studies regarding budgeting for costs of Federal insurance programs</header><text display-inline="no-display-inline">Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act, the Director of the Congressional Budget Office and the Director of the Office of Management and Budget shall each—</text>
<paragraph id="H13E1AE8BA2B54076BE88BD824EDDED14"><enum>(1)</enum><text>conduct a study to determine the feasibility of applying accrual accounting concepts to budgeting for the costs of the Terrorism Risk Insurance Program and for the costs of the other Federal insurance programs; and</text></paragraph>
<paragraph id="HCD69DADBEFB743F29973592D0FB9E1B6"><enum>(2)</enum><text>submit a report regarding such study to the Committees on the Budget of the House of Representatives and the Senate, which shall include a recommendation specifically addressing the feasibility of applying fair value concepts to budgeting for the costs of Federal insurance programs, including the Terrorism Risk Insurance Program.</text></paragraph></section>
<section id="HDBF918C11195425E9ABA2845B802EDD4"><enum>115.</enum><header>GAO study on upfront premiums and capital reserve fund</header>
<subsection id="H5EA1D28FF6A24402A998005A8C58CFDD"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">Not later than 2 years after the date of the enactment of this Act, the Comptroller General of the United States shall complete a study on the viability of the Federal Government—</text>
<paragraph id="H9CF6E78ABE0D4381B385F2EDF50E7A3B"><enum>(1)</enum><text>assessing and collecting upfront premiums on insurers that participate in the Terrorism Risk Insurance Program established under the Terrorism Risk Insurance Act of 2002 (<external-xref legal-doc="usc" parsable-cite="usc/15/6701">15 U.S.C. 6701</external-xref> note) (in this section referred to as the <quote>Program</quote>), which shall include a comparison of practices in international markets to assess and collect premiums either before or after terrorism losses are incurred; and</text></paragraph>
<paragraph id="HD97290FEDD2443AD81A67DAF23FADD25"><enum>(2)</enum><text display-inline="yes-display-inline">creating a capital reserve fund under the Program and requiring insurers participating in the Program to dedicate capital specifically for terrorism losses before such losses are incurred, which shall include a comparison of practices in international markets to establish reserve funds.</text></paragraph></subsection>
<subsection id="H452F6BEC422444FC9FA09EA4870BE9B0"><enum>(b)</enum><header>Required content</header><text>The study required under subsection (a) shall examine, but shall not be limited to, the following issues:</text>
<paragraph id="HA9872D64A5494AC2978797B4843DA32E"><enum>(1)</enum><header>Upfront premiums</header><text display-inline="yes-display-inline">With respect to upfront premiums described in subsection (a)(1)—</text>
<subparagraph id="H55B363D9F4E94FD083CD6D2831815D71"><enum>(A)</enum><text>how the Federal Government could determine the price of such upfront premiums on insurers that participate in the Program;</text></subparagraph>
<subparagraph id="H2F3D5E10EAFD4356ADFC5FA036D1C9CE"><enum>(B)</enum><text>how the Federal Government could collect such upfront premiums;</text></subparagraph>
<subparagraph id="H3EBFA861751A4E2EA11076C4EC944620"><enum>(C)</enum><text>how the Federal Government could ensure that such upfront premiums are not spent for purposes other than satisfying claims through the Program;</text></subparagraph>
<subparagraph id="H28FC1117456C460BB77BA1D6772DE356"><enum>(D)</enum><text>how the assessment and collection of such upfront premiums could affect take-up rates for terrorism risk coverage in different regions and industries;</text></subparagraph>
<subparagraph id="H276097EF30114D5D86A04C74B49E1BEC"><enum>(E)</enum><text>the effect of collecting such upfront premiums on the private market for terrorism risk reinsurance; and</text></subparagraph>
<subparagraph id="HCC92AD4067484A83BC24732B2C406815"><enum>(F)</enum><text>the size of the Federal Government subsidy insurers currently receive through their participation in the Program.</text></subparagraph></paragraph>
<paragraph id="H238D82E3A50F47D4AAB9EFCB989E6461"><enum>(2)</enum><header>Capital reserve fund</header><text>With respect to the capital reserve fund described in subsection (a)(2)—</text>
<subparagraph id="H0F5D5A01685B466EA95C9621D2DDA735"><enum>(A)</enum><text display-inline="yes-display-inline">how the creation of a capital reserve fund would affect the Federal Government’s fiscal exposure under the Terrorism Risk Insurance Program and the ability of the Program to meet its statutory purposes;</text></subparagraph>
<subparagraph id="H4C732341E3584F499D56A65A1DA5133B"><enum>(B)</enum><text>how a capital reserve fund would impact insurers and reinsurers, including liquidity, insurance pricing, and capacity to provide terrorism risk coverage;</text></subparagraph>
<subparagraph id="HAD4AAEC5F37C485C8D523AE307A99ABC"><enum>(C)</enum><text>the feasibility of segregating funds attributable to terrorism risk from funds attributable to other insurance lines;</text></subparagraph>
<subparagraph id="H96D230D346594E3CA3BAB0AE24244CAC"><enum>(D)</enum><text>how a capital reserve fund would be viewed and treated under current Financial Accounting Standards Board accounting rules and the tax laws; and</text></subparagraph>
<subparagraph id="H157FFE4F1CEE45F7B52F1705E4FC2487"><enum>(E)</enum><text>how a capital reserve fund would affect the States’ ability to regulate insurers participating in the Program.</text></subparagraph></paragraph>
<paragraph id="HA013B455A0E247FD8E33F399B1D1AEB5"><enum>(3)</enum><header>International practices</header><text display-inline="yes-display-inline">With respect to international markets referred to in paragraphs (1) and (2) of subsection (A), how other countries, if any—</text>
<subparagraph id="HE41473B85F1443FEBCA59B5DAC178B75"><enum>(A)</enum><text>have established terrorism insurance structures;</text></subparagraph>
<subparagraph id="H030FC11CF79D4DA09877CF342618D1C8"><enum>(B)</enum><text>charge premiums or otherwise collect funds to pay for the costs of terrorism insurance structures, including risk and administrative costs; and</text></subparagraph>
<subparagraph id="H0B87448FD9BB426384391A3F2BF5AEF3"><enum>(C)</enum><text>have established capital reserve funds to pay for the costs of terrorism insurance structures.</text></subparagraph></paragraph>
<paragraph id="H96EBC8E4F09B4B90AD923FB49688315E"><enum>(4)</enum><header>Duration</header><text display-inline="yes-display-inline">With respect to the capital reserve fund described in subsection (a)(2), how the duration of the Program would affect the viability of such capital reserve fund.</text></paragraph></subsection>
<subsection id="H9A148D7DB53B455BAC02A8C96B070199"><enum>(c)</enum><header>Report</header><text>Upon completion of the study required under subsection (a), the Comptroller General shall submit a report on the results of such study to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives.</text></subsection>
<subsection id="H8FC1746A5550483889CF141E1AD537E3"><enum>(d)</enum><header>Public availability</header><text>The study and report required under this section shall be made available to the public in electronic form and shall be published on the website of the Government Accountability Office.</text></subsection></section>
<enum>II</enum><header>National Association of Registered Agents and Brokers Reform</header>
<section id="HB26B1D49B68E4B8CBF539FDF5DA3573F" section-type="subsequent-section"><enum>201.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>National Association of Registered Agents and Brokers Reform Act of 2014</short-title></quote>.</text></section>
<section id="H1EF3ED04A0FA477DB2F970506239BA43"><enum>202.</enum><header>Reestablishment of the National Association of Registered Agents and Brokers</header>
<subsection id="H315B21E2AB3644AC9B733A6AB6E190C6"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subtitle C of title III of the Gramm-Leach-Bliley Act (<external-xref legal-doc="usc" parsable-cite="usc/15/6751">15 U.S.C. 6751 et seq.</external-xref>) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H9C9F81AF2E1D4D1599A1A8B63F7A567E" style="OLC">
<subtitle id="HC117D07A88ED49399153DC9C937B0C89"><enum>C</enum><header>National Association of Registered Agents and Brokers</header>
<section id="H35F264DD4F79460D939EC4D04C7425DC"><enum>321.</enum><header>National Association of Registered Agents and Brokers</header>
<subsection id="HD8D9D6E8DF26401DA3F0A14AE4B0498A"><enum>(a)</enum><header>Establishment</header><text>There is established the National Association of Registered Agents and Brokers (referred to in this subtitle as the <quote>Association</quote>).</text></subsection>
<subsection id="H2828568EF7F648B59EF97927C5AB40D5"><enum>(b)</enum><header>Status</header><text>The Association shall—</text>
<paragraph id="HEC7F41D5B66D47CA8DA5F53DFB565E75"><enum>(1)</enum><text>be a nonprofit corporation;</text></paragraph>
<paragraph id="H808779E2066E49EC8CCB69180272855C"><enum>(2)</enum><text>not be an agent or instrumentality of the Federal Government;</text></paragraph>
<paragraph id="H5254789939914053804BE5A2639CB796"><enum>(3)</enum><text>be an independent organization that may not be merged with or into any other private or public entity; and</text></paragraph>
<paragraph id="HA2A06214DE584DA6A4E22D6130136000"><enum>(4)</enum><text>except as otherwise provided in this subtitle, be subject to, and have all the powers conferred upon, a nonprofit corporation by the District of Columbia Nonprofit Corporation Act (D.C. Code, sec. 29–301.01 et seq.) or any successor thereto.</text></paragraph></subsection></section>
<section id="H3474869131C442B885EEE8369DB7C977"><enum>322.</enum><header>Purpose</header><text display-inline="no-display-inline">The purpose of the Association shall be to provide a mechanism through which licensing, continuing education, and other nonresident insurance producer qualification requirements and conditions may be adopted and applied on a multi-state basis without affecting the laws, rules, and regulations, and preserving the rights of a State, pertaining to—</text>
<paragraph id="H392428AFC16C4AA8A9E724D2FBB18D7C"><enum>(1)</enum><text>licensing, continuing education, and other qualification requirements of insurance producers that are not members of the Association;</text></paragraph>
<paragraph id="H0053598F300B4966B97C48B145C11EB7"><enum>(2)</enum><text>resident or nonresident insurance producer appointment requirements;</text></paragraph>
<paragraph id="H055130875436416F906FA2DEBD4D663D"><enum>(3)</enum><text>supervising and disciplining resident and nonresident insurance producers;</text></paragraph>
<paragraph id="H8D79F12F18124078BA26354B5D54E9A1"><enum>(4)</enum><text>establishing licensing fees for resident and nonresident insurance producers so that there is no loss of insurance producer licensing revenue to the State; and</text></paragraph>
<paragraph id="H78D3B86434CA4F6592635848B92954D6"><enum>(5)</enum><text>prescribing and enforcing laws and regulations regulating the conduct of resident and nonresident insurance producers.</text></paragraph></section>
<section id="H550763386FD2459CB9094B457C7FB2B0"><enum>323.</enum><header>Membership</header>
<subsection id="HFE23D3C2E5814A2589251C522D57FE12"><enum>(a)</enum><header>Eligibility</header>
<paragraph id="HB4E21EEAA3564F92B4B5913B0D53D7EF"><enum>(1)</enum><header>In general</header><text>Any insurance producer licensed in its home State shall, subject to paragraphs (2) and (4), be eligible to become a member of the Association.</text></paragraph>
<paragraph id="HBA6DA8D3CC0943BBAD32FE6D59748657"><enum>(2)</enum><header>Ineligibility for suspension or revocation of license</header><text>Subject to paragraph (3), an insurance producer is not eligible to become a member of the Association if a State insurance regulator has suspended or revoked the insurance license of the insurance producer in that State.</text></paragraph>
<paragraph id="H077FE5E6D1394F1C93442D335DCA7E96"><enum>(3)</enum><header>Resumption of eligibility</header><text>Paragraph (2) shall cease to apply to any insurance producer if—</text>
<subparagraph id="HFED95481405B44DCAABAB475AA011A49"><enum>(A)</enum><text>the State insurance regulator reissues or renews the license of the insurance producer in the State in which the license was suspended or revoked, or otherwise terminates or vacates the suspension or revocation; or</text></subparagraph>
<subparagraph id="H82EDA4EF9FC2463EBB479B83D2F79DE2"><enum>(B)</enum><text>the suspension or revocation expires or is subsequently overturned by a court of competent jurisdiction.</text></subparagraph></paragraph>
<paragraph id="H900EF739CAED44AFAF355FFC8711D3D2"><enum>(4)</enum><header>Criminal history record check required</header>
<subparagraph id="H4815045B6FD8437598A078E32E5B14CE"><enum>(A)</enum><header>In general</header><text>An insurance producer who is an individual shall not be eligible to become a member of the Association unless the insurance producer has undergone a criminal history record check that complies with regulations prescribed by the Attorney General of the United States under subparagraph (K).</text></subparagraph>
<subparagraph id="H31530D55751442F4B95A417830896FD6"><enum>(B)</enum><header>Criminal history record check requested by home State</header><text>An insurance producer who is licensed in a State and who has undergone a criminal history record check during the 2-year period preceding the date of submission of an application to become a member of the Association, in compliance with a requirement to undergo such criminal history record check as a condition for such licensure in the State, shall be deemed to have undergone a criminal history record check for purposes of subparagraph (A).</text></subparagraph>
<subparagraph id="H9167B1F620AB4BB48C5BFF62BE9C3F29"><enum>(C)</enum><header>Criminal history record check requested by Association</header>
<clause id="H9064A2DC70AF4F6BA0A96AFE9804DD7F"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The Association shall, upon request by an insurance producer licensed in a State, submit fingerprints or other identification information obtained from the insurance producer, and a request for a criminal history record check of the insurance producer, to the Federal Bureau of Investigation.</text></clause>
<clause id="H76E8F6ADAD5C44E9B4E06570431607AC"><enum>(ii)</enum><header>Procedures</header><text display-inline="yes-display-inline">The board of directors of the Association (referred to in this subtitle as the <term>Board</term>) shall prescribe procedures for obtaining and utilizing fingerprints or other identification information and criminal history record information, including the establishment of reasonable fees to defray the expenses of the Association in connection with the performance of a criminal history record check and appropriate safeguards for maintaining confidentiality and security of the information. Any fees charged pursuant to this clause shall be separate and distinct from those charged by the Attorney General pursuant to subparagraph (I).</text></clause></subparagraph>
<subparagraph id="H75229B2D35914929AFD1569D385E8711"><enum>(D)</enum><header>Form of request</header><text display-inline="yes-display-inline">A submission under subparagraph (C)(i) shall include such fingerprints or other identification information as is required by the Attorney General concerning the person about whom the criminal history record check is requested, and a statement signed by the person authorizing the Attorney General to provide the information to the Association and for the Association to receive the information.</text></subparagraph>
<subparagraph id="H133A034C8539419E8DA658435202CA5E"><enum>(E)</enum><header>Provision of information by Attorney General</header><text display-inline="yes-display-inline">Upon receiving a submission under subparagraph (C)(i) from the Association, the Attorney General shall search all criminal history records of the Federal Bureau of Investigation, including records of the Criminal Justice Information Services Division of the Federal Bureau of Investigation, that the Attorney General determines appropriate for criminal history records corresponding to the fingerprints or other identification information provided under subparagraph (D) and provide all criminal history record information included in the request to the Association.</text></subparagraph>
<subparagraph id="HB24FA646319042D1B33342C2FD7EC8EE"><enum>(F)</enum><header>Limitation on permissible uses of information</header><text>Any information provided to the Association under subparagraph (E) may only—</text>
<clause id="HDA1D0772FD814074B5D8D3C7CBDA1BE9"><enum>(i)</enum><text>be used for purposes of determining compliance with membership criteria established by the Association;</text></clause>
<clause id="H4E2B47B1088946B88A35D0FA5AF199C7"><enum>(ii)</enum><text>be disclosed to State insurance regulators, or Federal or State law enforcement agencies, in conformance with applicable law; or</text></clause>
<clause id="HC6A053E62E794665A6EB76824679F425"><enum>(iii)</enum><text>be disclosed, upon request, to the insurance producer to whom the criminal history record information relates.</text></clause></subparagraph>
<subparagraph id="HEA0FD70CDBAD4842A3B0805CEB37AF9D"><enum>(G)</enum><header>Penalty for improper use or disclosure</header><text display-inline="yes-display-inline">Whoever knowingly uses any information provided under subparagraph (E) for a purpose not authorized in subparagraph (F), or discloses any such information to anyone not authorized to receive it, shall be fined not more than $50,000 per violation as determined by a court of competent jurisdiction.</text></subparagraph>
<subparagraph id="H655D3BD215AD4871941FD082C159A0A0"><enum>(H)</enum><header>Reliance on information</header><text>Neither the Association nor any of its Board members, officers, or employees shall be liable in any action for using information provided under subparagraph (E) as permitted under subparagraph (F) in good faith and in reasonable reliance on its accuracy.</text></subparagraph>
<subparagraph id="H79CA45FEED6949F08417FE4656B44759"><enum>(I)</enum><header>Fees</header><text>The Attorney General may charge a reasonable fee for conducting the search and providing the information under subparagraph (E), and any such fee shall be collected and remitted by the Association to the Attorney General.</text></subparagraph>
<subparagraph id="HD0F34A6FD9AB4EE8B6FFD851198A6F58"><enum>(J)</enum><header>Rule of construction</header><text>Nothing in this paragraph shall be construed as—</text>
<clause id="H1728749F43BB4888ACC149B460920B22"><enum>(i)</enum><text>requiring a State insurance regulator to perform criminal history record checks under this section; or</text></clause>
<clause id="H64778A70880A4419BC8FED8CAA71FD00"><enum>(ii)</enum><text>limiting any other authority that allows access to criminal history records.</text></clause></subparagraph>
<subparagraph id="H9FE747962CF245DCA71B57340488F4DE"><enum>(K)</enum><header>Regulations</header><text>The Attorney General shall prescribe regulations to carry out this paragraph, which shall include—</text>
<clause id="HF0D3D948D24842B18BD8368C07B525C2"><enum>(i)</enum><text>appropriate protections for ensuring the confidentiality of information provided under subparagraph (E); and</text></clause>
<clause id="H108EB72FCF35442AB745F6DFF589FCDC"><enum>(ii)</enum><text>procedures providing a reasonable opportunity for an insurance producer to contest the accuracy of information regarding the insurance producer provided under subparagraph (E).</text></clause></subparagraph>
<subparagraph id="H71AAF71EA9E24290AF85E19A3EB2956F"><enum>(L)</enum><header>Ineligibility for membership</header>
<clause id="H3C3353BBEBF446D8899C5E9E429DF088"><enum>(i)</enum><header>In general</header><text>The Association may, under reasonably consistently applied standards, deny membership to an insurance producer on the basis of criminal history record information provided under subparagraph (E), or where the insurance producer has been subject to disciplinary action, as described in paragraph (2).</text></clause>
<clause id="H2C77BE885ED14348BD88D77875B1F10D"><enum>(ii)</enum><header>Rights of applicants denied membership</header><text>The Association shall notify any insurance producer who is denied membership on the basis of criminal history record information provided under subparagraph (E) of the right of the insurance producer to—</text>
<subclause id="H0953357CE7EC4A06B803B4CB61906FAE"><enum>(I)</enum><text>obtain a copy of all criminal history record information provided to the Association under subparagraph (E) with respect to the insurance producer; and</text></subclause>
<subclause id="H06DBFA1279CB4766A03B087F0C247C3E"><enum>(II)</enum><text>challenge the denial of membership based on the accuracy and completeness of the information.</text></subclause></clause></subparagraph>
<subparagraph id="HFB81002823044FA2861E89C9517061D3"><enum>(M)</enum><header>Definition</header><text>For purposes of this paragraph, the term <term>criminal history record check</term> means a national background check of criminal history records of the Federal Bureau of Investigation.</text></subparagraph></paragraph></subsection>
<subsection id="H71A2F322269648F2939880116F61DEEB"><enum>(b)</enum><header>Authority to establish membership criteria</header><text>The Association may establish membership criteria that bear a reasonable relationship to the purposes for which the Association was established.</text></subsection>
<subsection id="H9D50D5C178914836A13EF2A4A8818DCD"><enum>(c)</enum><header>Establishment of classes and categories of membership</header>
<paragraph id="H3764CBA0BF5546648AA224891E7E19BD"><enum>(1)</enum><header>Classes of membership</header><text>The Association may establish separate classes of membership, with separate criteria, if the Association reasonably determines that performance of different duties requires different levels of education, training, experience, or other qualifications.</text></paragraph>
<paragraph id="H74EA4414F98F40E69FDF730D3D0F0D9C"><enum>(2)</enum><header>Business entities</header><text>The Association shall establish a class of membership and membership criteria for business entities. A business entity that applies for membership shall be required to designate an individual Association member responsible for the compliance of the business entity with Association standards and the insurance laws, standards, and regulations of any State in which the business entity seeks to do business on the basis of Association membership.</text></paragraph>
<paragraph id="HC1E0574A796345F390DD574162B69BE0"><enum>(3)</enum><header>Categories</header>
<subparagraph id="HE3FCDB28093546B0BFD25D3BB4578ADA"><enum>(A)</enum><header>Separate categories for insurance producers permitted</header><text>The Association may establish separate categories of membership for insurance producers and for other persons or entities within each class, based on the types of licensing categories that exist under State laws.</text></subparagraph>
<subparagraph id="H25F7F8ECD98145B9B1C79CB80B70823D"><enum>(B)</enum><header>Separate treatment for depository institutions prohibited</header><text>No special categories of membership, and no distinct membership criteria, shall be established for members that are depository institutions or for employees, agents, or affiliates of depository institutions.</text></subparagraph></paragraph></subsection>
<subsection id="HC60951E886D94FDC9EEF4ECEA7F72529"><enum>(d)</enum><header>Membership criteria</header>
<paragraph id="HA2BF307E217C44E0A6E399D5BE77A3DA"><enum>(1)</enum><header>In general</header><text>The Association may establish criteria for membership which shall include standards for personal qualifications, education, training, and experience. The Association shall not establish criteria that unfairly limit the ability of a small insurance producer to become a member of the Association, including imposing discriminatory membership fees.</text></paragraph>
<paragraph id="H73BB1DE2AD134B57A0B3853CB0D739F2"><enum>(2)</enum><header>Qualifications</header><text>In establishing criteria under paragraph (1), the Association shall not adopt any qualification less protective to the public than that contained in the National Association of Insurance Commissioners (referred to in this subtitle as the <term>NAIC</term>) Producer Licensing Model Act in effect as of the date of enactment of the National Association of Registered Agents and Brokers Reform Act of 2013, and shall consider the highest levels of insurance producer qualifications established under the licensing laws of the States.</text></paragraph>
<paragraph id="H7DFE064F8A6B4189B1A7941A2D9173D1"><enum>(3)</enum><header>Assistance from States</header>
<subparagraph id="HC6F30145ED05471FA8941511434B3C8F"><enum>(A)</enum><header>In general</header><text>The Association may request a State to provide assistance in investigating and evaluating the eligibility of a prospective member for membership in the Association.</text></subparagraph>
<subparagraph id="HF3ECC3A7474A4BCCB1AF8502F35B3E33"><enum>(B)</enum><header>Authorization of information sharing</header><text>A submission under subsection (a)(4)(C)(i) made by an insurance producer licensed in a State shall include a statement signed by the person about whom the assistance is requested authorizing—</text>
<clause id="H777700C485344E6DABA75E53B7A9E788"><enum>(i)</enum><text>the State to share information with the Association; and</text></clause>
<clause id="H1873BE029631485687C7B86526E73AB3"><enum>(ii)</enum><text>the Association to receive the information.</text></clause></subparagraph>
<subparagraph id="HCF081D86A4774446A63CD7D2FD32CD2C"><enum>(C)</enum><header>Rule of construction</header><text>Subparagraph (A) shall not be construed as requiring or authorizing any State to adopt new or additional requirements concerning the licensing or evaluation of insurance producers.</text></subparagraph></paragraph>
<paragraph id="HC189D37BF0D645609DA4975EA628DEF6"><enum>(4)</enum><header>Denial of membership</header><text>The Association may, based on reasonably consistently applied standards, deny membership to any State-licensed insurance producer for failure to meet the membership criteria established by the Association.</text></paragraph></subsection>
<subsection id="H7558D72DA10143A185C753400E1B899D"><enum>(e)</enum><header>Effect of membership</header>
<paragraph id="H2A9180BFE5A94B838829EAB0AD7AB009"><enum>(1)</enum><header>Authority of association members</header><text>Membership in the Association shall—</text>
<subparagraph id="H3152FD481E3141CFB3D08F03A33A5C79"><enum>(A)</enum><text>authorize an insurance producer to sell, solicit, or negotiate insurance in any State for which the member pays the licensing fee set by the State for any line or lines of insurance specified in the home State license of the insurance producer, and exercise all such incidental powers as shall be necessary to carry out such activities, including claims adjustments and settlement to the extent permissible under the laws of the State, risk management, employee benefits advice, retirement planning, and any other insurance-related consulting activities;</text></subparagraph>
<subparagraph id="H049F7647A9374BD5BBF8C6450D2BA59C"><enum>(B)</enum><text>be the equivalent of a nonresident insurance producer license for purposes of authorizing the insurance producer to engage in the activities described in subparagraph (A) in any State where the member pays the licensing fee; and</text></subparagraph>
<subparagraph id="H7F51EF9A16384F4F97D509B06C397C06"><enum>(C)</enum><text>be the equivalent of a nonresident insurance producer license for the purpose of subjecting an insurance producer to all laws, regulations, provisions or other action of any State concerning revocation, suspension, or other enforcement action related to the ability of a member to engage in any activity within the scope of authority granted under this subsection and to all State laws, regulations, provisions, and actions preserved under paragraph (5).</text></subparagraph></paragraph>
<paragraph id="HA8780371C60646E0B544F82D06DDC54D"><enum>(2)</enum><header>Violent Crime Control and Law Enforcement Act of 1994</header><text>Nothing in this subtitle shall be construed to alter, modify, or supercede any requirement established by <external-xref legal-doc="usc" parsable-cite="usc/18/1033">section 1033</external-xref> of title 18, United States Code.</text></paragraph>
<paragraph id="H333648797FF44CF6B15116578592DBB8"><enum>(3)</enum><header>Agent for remitting fees</header><text>The Association shall act as an agent for any member for purposes of remitting licensing fees to any State pursuant to paragraph (1).</text></paragraph>
<paragraph id="H4A9160EB7A134F8191909CB708470376"><enum>(4)</enum><header>Notification of action</header>
<subparagraph id="H24D2EDF8F73A40FA910D0D1E18907156"><enum>(A)</enum><header>In general</header><text>The Association shall notify the States (including State insurance regulators) and the NAIC when an insurance producer has satisfied the membership criteria of this section. The States (including State insurance regulators) shall have 10 business days after the date of the notification in order to provide the Association with evidence that the insurance producer does not satisfy the criteria for membership in the Association.</text></subparagraph>
<subparagraph id="H9E6F41E378F7421AAB31E932592C4E76"><enum>(B)</enum><header>Ongoing disclosures required</header><text>On an ongoing basis, the Association shall disclose to the States (including State insurance regulators) and the NAIC a list of the States in which each member is authorized to operate. The Association shall immediately notify the States (including State insurance regulators) and the NAIC when a member is newly authorized to operate in one or more States, or is no longer authorized to operate in one or more States on the basis of Association membership.</text></subparagraph></paragraph>
<paragraph id="H2F86C19B235F4002B1EFA824E175814C"><enum>(5)</enum><header>Preservation of consumer protection and market conduct regulation</header>
<subparagraph id="HF29906D839DC411ABFCA0CC85AE21BAA"><enum>(A)</enum><header>In general</header><text>No provision of this section shall be construed as altering or affecting the applicability or continuing effectiveness of any law, regulation, provision, or other action of any State, including those described in subparagraph (B), to the extent that the State law, regulation, provision, or other action is not inconsistent with the provisions of this subtitle related to market entry for nonresident insurance producers, and then only to the extent of the inconsistency.</text></subparagraph>
<subparagraph id="H663FE8532EDE476087A023C3DD0E3BBE"><enum>(B)</enum><header>Preserved regulations</header><text>The laws, regulations, provisions, or other actions of any State referred to in subparagraph (A) include laws, regulations, provisions, or other actions that—</text>
<clause id="HD5AAAD6DF45548D882CE92232B440718"><enum>(i)</enum><text>regulate market conduct, insurance producer conduct, or unfair trade practices;</text></clause>
<clause id="H70D1A04578EE4AF8B5BF88CC511F1619"><enum>(ii)</enum><text>establish consumer protections; or</text></clause>
<clause id="HEA2743C3A2A04346B4FADBF36BC65C34"><enum>(iii)</enum><text>require insurance producers to be appointed by a licensed or authorized insurer.</text></clause></subparagraph></paragraph></subsection>
<subsection id="H6D83E2EAEA3E4894A0D72EDD786BD026"><enum>(f)</enum><header>Biennial renewal</header><text>Membership in the Association shall be renewed on a biennial basis.</text></subsection>
<subsection id="H1399A773EB0C4574958CB77C5F575F6C"><enum>(g)</enum><header>Continuing education</header>
<paragraph id="H76F6767F748340CDB0E8F861B49771AF"><enum>(1)</enum><header>In general</header><text>The Association shall establish, as a condition of membership, continuing education requirements which shall be comparable to the continuing education requirements under the licensing laws of a majority of the States.</text></paragraph>
<paragraph id="H2D9143B03BFF4FFFBE1DDC9702F14FB8"><enum>(2)</enum><header>State continuing education requirements</header><text>A member may not be required to satisfy continuing education requirements imposed under the laws, regulations, provisions, or actions of any State other than the home State of the member.</text></paragraph>
<paragraph id="HB3EAD2C730A247F0B6EE5094E616D137"><enum>(3)</enum><header>Reciprocity</header><text>The Association shall not require a member to satisfy continuing education requirements that are equivalent to any continuing education requirements of the home State of the member that have been satisfied by the member during the applicable licensing period.</text></paragraph>
<paragraph id="H15F09B29B9A6440397E88A16198616DE"><enum>(4)</enum><header>Limitation on the Association</header><text>The Association shall not directly or indirectly offer any continuing education courses for insurance producers.</text></paragraph></subsection>
<subsection id="H878F653D73194B12A71A2E7A4190BDE6"><enum>(h)</enum><header>Probation, suspension and revocation</header>
<paragraph id="HCA0A98F2218C4D55AB8D669E4A7DF503"><enum>(1)</enum><header>Disciplinary action</header><text>The Association may place an insurance producer that is a member of the Association on probation or suspend or revoke the membership of the insurance producer in the Association, or assess monetary fines or penalties, as the Association determines to be appropriate, if—</text>
<subparagraph id="H89AB1BE5279C48E1B468DFDF10B386E6"><enum>(A)</enum><text>the insurance producer fails to meet the applicable membership criteria or other standards established by the Association;</text></subparagraph>
<subparagraph id="H1DD4100FF024422D91A4ABA63B528F22"><enum>(B)</enum><text>the insurance producer has been subject to disciplinary action pursuant to a final adjudicatory proceeding under the jurisdiction of a State insurance regulator;</text></subparagraph>
<subparagraph id="H3A9D6F720F41442BACB6DD145722DAB8"><enum>(C)</enum><text>an insurance license held by the insurance producer has been suspended or revoked by a State insurance regulator; or</text></subparagraph>
<subparagraph id="H276CBCD7ABD44F11BCD4F437501EFDDB"><enum>(D)</enum><text>the insurance producer has been convicted of a crime that would have resulted in the denial of membership pursuant to subsection (a)(4)(L)(i) at the time of application, and the Association has received a copy of the final disposition from a court of competent jurisdiction.</text></subparagraph></paragraph>
<paragraph id="H4424993B40D740A4A5A1ECD289E546AB"><enum>(2)</enum><header>Violations of Association standards</header><text>The Association shall have the power to investigate alleged violations of Association standards.</text></paragraph>
<paragraph id="HF1049D73676D4C0FB215D3035972B4BE"><enum>(3)</enum><header>Reporting</header><text>The Association shall immediately notify the States (including State insurance regulators) and the NAIC when the membership of an insurance producer has been placed on probation or has been suspended, revoked, or otherwise terminated, or when the Association has assessed monetary fines or penalties.</text></paragraph></subsection>
<subsection id="H5F193194FEF14A5EBB7232C41ECB6AC6"><enum>(i)</enum><header>Consumer complaints</header>
<paragraph id="HE8B754F0E0D34408BBFB2659F63BC2DA"><enum>(1)</enum><header>In general</header><text>The Association shall—</text>
<subparagraph id="H5F1E62C834DA4C3BA1D7C798E36540FC"><enum>(A)</enum><text>refer any complaint against a member of the Association from a consumer relating to alleged misconduct or violations of State insurance laws to the State insurance regulator where the consumer resides and, when appropriate, to any additional State insurance regulator, as determined by standards adopted by the Association; and</text></subparagraph>
<subparagraph id="HFF46F18C5CA94395B12C96B025D4E9AC"><enum>(B)</enum><text>make any related records and information available to each State insurance regulator to whom the complaint is forwarded.</text></subparagraph></paragraph>
<paragraph id="HA29ACDD3552C495CA0BC18B8BBC6BBFE"><enum>(2)</enum><header>Telephone and other access</header><text>The Association shall maintain a toll-free number for purposes of this subsection and, as practicable, other alternative means of communication with consumers, such as an Internet webpage.</text></paragraph>
<paragraph id="H86D3E6789571423882A26B79185D13EF"><enum>(3)</enum><header>Final disposition of investigation</header><text>State insurance regulators shall provide the Association with information regarding the final disposition of a complaint referred pursuant to paragraph (1)(A), but nothing shall be construed to compel a State to release confidential investigation reports or other information protected by State law to the Association.</text></paragraph></subsection>
<subsection id="H0704046979834A3CB4AE33B6BEBD334B"><enum>(j)</enum><header>Information sharing</header><text>The Association may—</text>
<paragraph id="H68729CA919FD46B8A20C00C3668862CF"><enum>(1)</enum><text>share documents, materials, or other information, including confidential and privileged documents, with a State, Federal, or international governmental entity or with the NAIC or other appropriate entity referred to paragraphs (3) and (4), provided that the recipient has the authority and agrees to maintain the confidentiality or privileged status of the document, material, or other information;</text></paragraph>
<paragraph id="HDDAEA3D092E84E7CBA5119F9E9087F66"><enum>(2)</enum><text>limit the sharing of information as required under this subtitle with the NAIC or any other non-governmental entity, in circumstances under which the Association determines that the sharing of such information is unnecessary to further the purposes of this subtitle;</text></paragraph>
<paragraph id="H0448E83FC7E949898BD20FD01F97C56E"><enum>(3)</enum><text>establish a central clearinghouse, or utilize the NAIC or another appropriate entity, as determined by the Association, as a central clearinghouse, for use by the Association and the States (including State insurance regulators), through which members of the Association may disclose their intent to operate in 1 or more States and pay the licensing fees to the appropriate States; and</text></paragraph>
<paragraph id="H47AF03C6F82E415C96BF57657C61EB25"><enum>(4)</enum><text>establish a database, or utilize the NAIC or another appropriate entity, as determined by the Association, as a database, for use by the Association and the States (including State insurance regulators) for the collection of regulatory information concerning the activities of insurance producers.</text></paragraph></subsection>
<subsection id="H3C7BB3CB9DE24B55BFC2954FB231F460"><enum>(k)</enum><header>Effective Date</header><text>The provisions of this section shall take effect on the later of—</text>
<paragraph id="H0F24DC14BD394BB48055A617AA1608A2"><enum>(1)</enum><text>the expiration of the 2-year period beginning on the date of enactment of the National Association of Registered Agents and Brokers Reform Act of 2013; and</text></paragraph>
<paragraph id="H23BE234801A4450A915CB9A20C91E587"><enum>(2)</enum><text>the date of incorporation of the Association.</text></paragraph></subsection></section>
<section id="H3CACE941FECB48F0AAC8567FA991C3B8"><enum>324.</enum><header>Board of directors</header>
<subsection id="H338AA750D2FB4CF68E5F36C4649F0364"><enum>(a)</enum><header>Establishment</header><text>There is established a board of directors of the Association, which shall have authority to govern and supervise all activities of the Association.</text></subsection>
<subsection id="H4F3AF57608C64D41B50294C5FD2FA0A6"><enum>(b)</enum><header>Powers</header><text>The Board shall have such of the powers and authority of the Association as may be specified in the bylaws of the Association.</text></subsection>
<subsection id="H1972FFE15B7F4CB181E07DD24FC27454"><enum>(c)</enum><header>Composition</header>
<paragraph id="H26905D3A2DA2450BAE149ACD1E1016FD"><enum>(1)</enum><header>In general</header><text>The Board shall consist of 13 members who shall be appointed by the President, by and with the advice and consent of the Senate, in accordance with the procedures established under Senate Resolution 116 of the 112<superscript>th</superscript> Congress, of whom—</text>
<subparagraph id="H070FF70A2C8B4ADDA789A831232269F4"><enum>(A)</enum><text>8 shall be State insurance commissioners appointed in the manner provided in paragraph (2), 1 of whom shall be designated by the President to serve as the chairperson of the Board until the Board elects one such State insurance commissioner Board member to serve as the chairperson of the Board;</text></subparagraph>
<subparagraph id="HE8741DE859BF4333AB2A850847C5D338"><enum>(B)</enum><text>3 shall have demonstrated expertise and experience with property and casualty insurance producer licensing; and</text></subparagraph>
<subparagraph id="HD3476DC26AEA40A3B4FB1D22AC5FE74D"><enum>(C)</enum><text display-inline="yes-display-inline">2 shall have demonstrated expertise and experience with life or health insurance producer licensing.</text></subparagraph></paragraph>
<paragraph id="H53D1B868E4464E74A19C800B9C91B380"><enum>(2)</enum><header>State insurance regulator representatives</header>
<subparagraph id="HA29B1CCA37DE4B0D812C57E7D0B30FFB"><enum>(A)</enum><header>Recommendations</header><text>Before making any appointments pursuant to paragraph (1)(A), the President shall request a list of recommended candidates from the States through the NAIC, which shall not be binding on the President. If the NAIC fails to submit a list of recommendations not later than 15 business days after the date of the request, the President may make the requisite appointments without considering the views of the NAIC.</text></subparagraph>
<subparagraph id="HD15F633BC42144F3A996CF17B5E99157"><enum>(B)</enum><header>Political affiliation</header><text>Not more than 4 Board members appointed under paragraph (1)(A) shall belong to the same political party.</text></subparagraph>
<subparagraph id="HEE953F3DF2D44F7DAD2EC70034FE57DB"><enum>(C)</enum><header>Former State insurance commissioners</header>
<clause id="HFEFEE6EE5EB84A56B725E2351AE40654"><enum>(i)</enum><header>In general</header><text>If, after offering each currently serving State insurance commissioner an appointment to the Board, fewer than 8 State insurance commissioners have accepted appointment to the Board, the President may appoint the remaining State insurance commissioner Board members, as required under paragraph (1)(A), of the appropriate political party as required under subparagraph (B), from among individuals who are former State insurance commissioners.</text></clause>
<clause id="HA568E9AD02924C7E80E37726E89CBB5E"><enum>(ii)</enum><header>Limitation</header><text>A former State insurance commissioner appointed as described in clause (i) may not be employed by or have any present direct or indirect financial interest in any insurer, insurance producer, or other entity in the insurance industry, other than direct or indirect ownership of, or beneficial interest in, an insurance policy or annuity contract written or sold by an insurer.</text></clause></subparagraph>
<subparagraph id="H3265CDE56A7E4F03A885090DF78A3FF5"><enum>(D)</enum><header>Service through term</header><text>If a Board member appointed under paragraph (1)(A) ceases to be a State insurance commissioner during the term of the Board member, the Board member shall cease to be a Board member.</text></subparagraph></paragraph>
<paragraph id="H55A4527651854C50B5B2C2F5F1CD75E9"><enum>(3)</enum><header>Private sector representatives</header><text>In making any appointment pursuant to subparagraph (B) or (C) of paragraph (1), the President may seek recommendations for candidates from groups representing the category of individuals described, which shall not be binding on the President.</text></paragraph>
<paragraph id="H6F9AE41FB12247B5BBA93A047ED47552"><enum>(4)</enum><header>State insurance commissioner defined</header><text>For purposes of this subsection, the term <term>State insurance commissioner</term> means a person who serves in the position in State government, or on the board, commission, or other body that is the primary insurance regulatory authority for the State.</text></paragraph></subsection>
<subsection id="H38DFF6A3168C4435B3B605BFF1A6114A"><enum>(d)</enum><header>Terms</header>
<paragraph id="HD00E3994365F4FFD970811B33F1222B8"><enum>(1)</enum><header>In general</header><text>Except as provided under paragraph (2), the term of service for each Board member shall be 2 years.</text></paragraph>
<paragraph id="HA7EA4C70B9EC4FA1AA585F790944AE0B"><enum>(2)</enum><header>Exceptions</header>
<subparagraph id="H74616C04BDE2402BB0B444DA0CC2BB0F"><enum>(A)</enum><header>1-year terms</header><text>The term of service shall be 1 year, as designated by the President at the time of the nomination of the subject Board members for—</text>
<clause id="H8A19AE5F8FAA4458AF44BB8D7897ED7A"><enum>(i)</enum><text>4 of the State insurance commissioner Board members initially appointed under paragraph (1)(A), of whom not more than 2 shall belong to the same political party;</text></clause>
<clause id="H1FCC126532744E879C6897BA1A977291"><enum>(ii)</enum><text>1 of the Board members initially appointed under paragraph (1)(B); and</text></clause>
<clause id="H89D3375C29C74620A1484F63ED5AC18D"><enum>(iii)</enum><text>1 of the Board members initially appointed under paragraph (1)(C).</text></clause></subparagraph>
<subparagraph id="H24F60ECBEA904BB7ABE991DE8B14A5F0"><enum>(B)</enum><header>Expiration of Term</header><text>A Board member may continue to serve after the expiration of the term to which the Board member was appointed for the earlier of 2 years or until a successor is appointed.</text></subparagraph>
<subparagraph id="H1CDB7CA8623B4942A62383D1E680E9B0"><enum>(C)</enum><header>Mid-term appointments</header><text>A Board member appointed to fill a vacancy occurring before the expiration of the term for which the predecessor of the Board member was appointed shall be appointed only for the remainder of that term.</text></subparagraph></paragraph>
<paragraph id="HE3B8C6464CC742918F4CA238C997E426"><enum>(3)</enum><header>Successive terms</header><text>Board members may be reappointed to successive terms.</text></paragraph></subsection>
<subsection id="H62F773FE33B042C1AFBD2D0529571E77"><enum>(e)</enum><header>Initial appointments</header><text>The appointment of initial Board members shall be made no later than 90 days after the date of enactment of the <short-title>National Association of Registered Agents and Brokers Reform Act of 2014</short-title>.</text></subsection>
<subsection id="H893DF6E5196249CA81C8311296B47D48"><enum>(f)</enum><header>Meetings</header>
<paragraph id="H362640DB642548E69C40E52A2E669162"><enum>(1)</enum><header>In general</header><text>The Board shall meet—</text>
<subparagraph id="H2C6D98E144B8487AB111CCD6161297EC"><enum>(A)</enum><text>at the call of the chairperson;</text></subparagraph>
<subparagraph id="H1AC6837209CB4118B124A108D0F2677D"><enum>(B)</enum><text>as requested in writing to the chairperson by not fewer than 5 Board members; or</text></subparagraph>
<subparagraph id="H29001296B1D94D409B056CA2034A01F9"><enum>(C)</enum><text>as otherwise provided by the bylaws of the Association.</text></subparagraph></paragraph>
<paragraph id="H08F47E51991E4B7195C5D2D41D039BE2"><enum>(2)</enum><header>Quorum required</header><text>A majority of all Board members shall constitute a quorum.</text></paragraph>
<paragraph id="H520AA777B69F4F8197F22636423BFA1D"><enum>(3)</enum><header>Voting</header><text>Decisions of the Board shall require the approval of a majority of all Board members present at a meeting, a quorum being present.</text></paragraph>
<paragraph id="H8A5B5D7C1250462881B82F36FF4B7B7C"><enum>(4)</enum><header>Initial meeting</header><text>The Board shall hold its first meeting not later than 45 days after the date on which all initial Board members have been appointed.</text></paragraph></subsection>
<subsection id="HC20E862E7F8A4C6B965E293FFDD0CF0A"><enum>(g)</enum><header>Restriction on confidential information</header><text>Board members appointed pursuant to subparagraphs (B) and (C) of subsection (c)(1) shall not have access to confidential information received by the Association in connection with complaints, investigations, or disciplinary proceedings involving insurance producers.</text></subsection>
<subsection id="H50BD6F5551024566AD6F328B50D855CD"><enum>(h)</enum><header>Ethics and conflicts of interest</header><text>The Board shall issue and enforce an ethical conduct code to address permissible and prohibited activities of Board members and Association officers, employees, agents, or consultants. The code shall, at a minimum, include provisions that prohibit any Board member or Association officer, employee, agent or consultant from—</text>
<paragraph id="H0C5F02C720C7439BAD8D4215DCD5014B"><enum>(1)</enum><text>engaging in unethical conduct in the course of performing Association duties;</text></paragraph>
<paragraph id="HB8B82E21E5344CCD94C28719DE6553AF"><enum>(2)</enum><text>participating in the making or influencing the making of any Association decision, the outcome of which the Board member, officer, employee, agent, or consultant knows or had reason to know would have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on the person or a member of the immediate family of the person;</text></paragraph>
<paragraph id="HE958755A75904CFD88117E3A4A11BAC1"><enum>(3)</enum><text>accepting any gift from any person or entity other than the Association that is given because of the position held by the person in the Association;</text></paragraph>
<paragraph id="H86C22B82F5604CD9A31F6714945077C1"><enum>(4)</enum><text>making political contributions to any person or entity on behalf of the Association; and</text></paragraph>
<paragraph id="HDE58E31590D94EECA6524CA1B6F40E8F"><enum>(5)</enum><text>lobbying or paying a person to lobby on behalf of the Association.</text></paragraph></subsection>
<subsection id="HCAFFED1F8E87473A859864F26B035625"><enum>(i)</enum><header>Compensation</header>
<paragraph id="H330D1C689400475693A394C320C3F552"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), no Board member may receive any compensation from the Association or any other person or entity on account of Board membership.</text></paragraph>
<paragraph id="HF1FD76EDF1724D30BBE76BE65D99E4DC"><enum>(2)</enum><header>Travel expenses and per diem</header><text>Board members may be reimbursed only by the Association for travel expenses, including per diem in lieu of subsistence, at rates consistent with rates authorized for employees of Federal agencies under subchapter I of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/5/57">chapter 57</external-xref> of title 5, United States Code, while away from home or regular places of business in performance of services for the Association.</text></paragraph></subsection></section>
<section id="H72718E8283D14A87B6378AF41065BC7B"><enum>325.</enum><header>Bylaws, standards, and disciplinary actions</header>
<subsection id="HDB8CD9D09FD74EAA9DA7B4CBCDAD5160"><enum>(a)</enum><header>Adoption and amendment of bylaws and standards</header>
<paragraph id="HC9967485357F4E838141C11F850F8E04"><enum>(1)</enum><header>Procedures</header><text>The Association shall adopt procedures for the adoption of bylaws and standards that are similar to procedures under subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/5/5">chapter 5</external-xref> of title 5, United States Code (commonly known as the <quote>Administrative Procedure Act</quote>).</text></paragraph>
<paragraph id="H9D3CB01AEC4347DCB05969228B229145"><enum>(2)</enum><header>Copy required to be filed</header><text>The Board shall submit to the President, through the Department of the Treasury, and the States (including State insurance regulators), and shall publish on the website of the Association, all proposed bylaws and standards of the Association, or any proposed amendment to the bylaws or standards of the Association, accompanied by a concise general statement of the basis and purpose of such proposal.</text></paragraph>
<paragraph id="H14AFD72D83B8405CA339E2F50A3CB403"><enum>(3)</enum><header>Effective date</header><text>Any proposed bylaw or standard of the Association, and any proposed amendment to the bylaws or standards of the Association, shall take effect, after notice under paragraph (2) and opportunity for public comment, on such date as the Association may designate, unless suspended under section 329(c).</text></paragraph>
<paragraph id="H88C33E36A33F4F8FA9B19786258E173E"><enum>(4)</enum><header>Rule of construction</header><text>Nothing in this section shall be construed to subject the Board or the Association to the requirements of subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/5/5">chapter 5</external-xref> of title 5, United States Code (commonly known as the <quote>Administrative Procedure Act</quote>).</text></paragraph></subsection>
<subsection id="H9B89846245D34F938B6E8F629F1CA397"><enum>(b)</enum><header>Disciplinary action by the Association</header>
<paragraph id="H18570C7443984F10B169EB8099043C45"><enum>(1)</enum><header>Specification of charges</header><text>In any proceeding to determine whether membership shall be denied, suspended, revoked, or not renewed, or to determine whether a member of the Association should be placed on probation (referred to in this section as a <quote>disciplinary action</quote>) or whether to assess fines or monetary penalties, the Association shall bring specific charges, notify the member of the charges, give the member an opportunity to defend against the charges, and keep a record.</text></paragraph>
<paragraph id="H18B6394E4ACC49459FCF5093C5AA98CB"><enum>(2)</enum><header>Supporting statement</header><text>A determination to take disciplinary action shall be supported by a statement setting forth—</text>
<subparagraph id="H939EECBC209540CE99297B34BDE2C8A1"><enum>(A)</enum><text>any act or practice in which the member has been found to have been engaged;</text></subparagraph>
<subparagraph id="H93BEFCAEFA8C465296F758E40821125B"><enum>(B)</enum><text>the specific provision of this subtitle or standard of the Association that any such act or practice is deemed to violate; and</text></subparagraph>
<subparagraph id="H91571148ED6946A2B6FE94E52D24FB15"><enum>(C)</enum><text>the sanction imposed and the reason for the sanction.</text></subparagraph></paragraph>
<paragraph id="H143C369B256B4377B0FBB643583BDFA4"><enum>(3)</enum><header>Ineligibility of private sector representatives</header><text>Board members appointed pursuant to section 324(c)(3) may not—</text>
<subparagraph id="HB26824F32B7C417D9779F94ECC8231DF"><enum>(A)</enum><text>participate in any disciplinary action or be counted toward establishing a quorum during a disciplinary action; and</text></subparagraph>
<subparagraph id="H480724CFD5924A02917CDC96C3E6A028"><enum>(B)</enum><text>have access to confidential information concerning any disciplinary action.</text></subparagraph></paragraph></subsection></section>
<section id="H8E3A61B334804A5496197EA89778149D"><enum>326.</enum><header>Powers</header><text display-inline="no-display-inline">In addition to all the powers conferred upon a nonprofit corporation by the District of Columbia Nonprofit Corporation Act, the Association shall have the power to—</text>
<paragraph id="HF7EB6C1DF26E40E582532B224698E87B"><enum>(1)</enum><text>establish and collect such membership fees as the Association finds necessary to impose to cover the costs of its operations;</text></paragraph>
<paragraph id="H9BCAEC45037A4253BED59FAE35E5CF9B"><enum>(2)</enum><text>adopt, amend, and repeal bylaws, procedures, or standards governing the conduct of Association business and performance of its duties;</text></paragraph>
<paragraph id="H8B3D6C0AAB854CAB9B3D4B899B211AF5"><enum>(3)</enum><text>establish procedures for providing notice and opportunity for comment pursuant to section 325(a);</text></paragraph>
<paragraph id="H16D05F64BDA149E89E0AF690E841FAF3"><enum>(4)</enum><text>enter into and perform such agreements as necessary to carry out the duties of the Association;</text></paragraph>
<paragraph id="H4F2CE52606D24CFE811D07548B48E2B8"><enum>(5)</enum><text>hire employees, professionals, or specialists, and elect or appoint officers, and to fix their compensation, define their duties and give them appropriate authority to carry out the purposes of this subtitle, and determine their qualification;</text></paragraph>
<paragraph id="H01C2BCE8E47143F3B201C38A5AD95C55"><enum>(6)</enum><text>establish personnel policies of the Association and programs relating to, among other things, conflicts of interest, rates of compensation, where applicable, and qualifications of personnel;</text></paragraph>
<paragraph id="HD3BD624DB8F44A7CAF59FEA74552C051"><enum>(7)</enum><text>borrow money; and</text></paragraph>
<paragraph id="HD286814C753B4510930E8BEAC1C6A522"><enum>(8)</enum><text>secure funding for such amounts as the Association determines to be necessary and appropriate to organize and begin operations of the Association, which shall be treated as loans to be repaid by the Association with interest at market rate.</text></paragraph></section>
<section id="H9FB75AB823A74993958DC29DEF58A62E"><enum>327.</enum><header>Report by the Association</header>
<subsection id="H4BFB818ADC77452596A755EECA3191E8"><enum>(a)</enum><header>In general</header><text>As soon as practicable after the close of each fiscal year, the Association shall submit to the President, through the Department of the Treasury, and the States (including State insurance regulators), and shall publish on the website of the Association, a written report regarding the conduct of its business, and the exercise of the other rights and powers granted by this subtitle, during such fiscal year.</text></subsection>
<subsection id="HFB747E8E5FA248AE888995B9B53AE8E6"><enum>(b)</enum><header>Financial statements</header><text>Each report submitted under subsection (a) with respect to any fiscal year shall include audited financial statements setting forth the financial position of the Association at the end of such fiscal year and the results of its operations (including the source and application of its funds) for such fiscal year.</text></subsection></section>
<section id="HD4D3210A58E347EE8D1BC7A8DFFDC64B"><enum>328.</enum><header>Liability of the Association and the Board members, officers, and employees of the Association</header>
<subsection id="HE95FDD0F0A9447C6B4AE79A78EE775F7"><enum>(a)</enum><header>In general</header><text>The Association shall not be deemed to be an insurer or insurance producer within the meaning of any State law, rule, regulation, or order regulating or taxing insurers, insurance producers, or other entities engaged in the business of insurance, including provisions imposing premium taxes, regulating insurer solvency or financial condition, establishing guaranty funds and levying assessments, or requiring claims settlement practices.</text></subsection>
<subsection id="HAE659D0A62B54489AEAB943A79E1B52E"><enum>(b)</enum><header>Liability of Board members, officers, and employees</header><text>No Board member, officer, or employee of the Association shall be personally liable to any person for any action taken or omitted in good faith in any matter within the scope of their responsibilities in connection with the Association.</text></subsection></section>
<section id="H50DE748F01FE43178D9DE05045984E3E"><enum>329.</enum><header>Presidential oversight</header>
<subsection id="H8619C38A1B5A4E7D823CAF8420166398"><enum>(a)</enum><header>Removal of Board</header><text>If the President determines that the Association is acting in a manner contrary to the interests of the public or the purposes of this subtitle or has failed to perform its duties under this subtitle, the President may remove the entire existing Board for the remainder of the term to which the Board members were appointed and appoint, in accordance with section 324 and with the advice and consent of the Senate, in accordance with the procedures established under Senate Resolution 116 of the 112<superscript>th</superscript> Congress, new Board members to fill the vacancies on the Board for the remainder of the terms.</text></subsection>
<subsection id="HCA3A67C6BFC44BE0BA53475EA3267AE0"><enum>(b)</enum><header>Removal of Board member</header><text>The President may remove a Board member only for neglect of duty or malfeasance in office.</text></subsection>
<subsection id="HB62D3AEFED404AA782E4BC97B0FD3871"><enum>(c)</enum><header>Suspension of bylaws and standards and prohibition of actions</header><text>Following notice to the Board, the President, or a person designated by the President for such purpose, may suspend the effectiveness of any bylaw or standard, or prohibit any action, of the Association that the President or the designee determines is contrary to the purposes of this subtitle.</text></subsection></section>
<section id="HA9BB166D72614896808EE8021A286DE3"><enum>330.</enum><header>Relationship to State law</header>
<subsection id="H28CF441493C9455DB179A097161C2930"><enum>(a)</enum><header>Preemption of State laws</header><text>State laws, regulations, provisions, or other actions purporting to regulate insurance producers shall be preempted to the extent provided in subsection (b).</text></subsection>
<subsection id="H61F2959904C14070BD7B23CCB1906B0C"><enum>(b)</enum><header>Prohibited actions</header>
<paragraph id="H84065AFBD76542FFB2E46532BB2F679E"><enum>(1)</enum><header>In general</header><text>No State shall—</text>
<subparagraph id="HFB7DC03BE7C74B099B1F1FDA5A88D514"><enum>(A)</enum><text>impede the activities of, take any action against, or apply any provision of law or regulation arbitrarily or discriminatorily to, any insurance producer because that insurance producer or any affiliate plans to become, has applied to become, or is a member of the Association;</text></subparagraph>
<subparagraph id="H69F8AAD54AB040F28A8DB2B515980E66"><enum>(B)</enum><text>impose any requirement upon a member of the Association that it pay fees different from those required to be paid to that State were it not a member of the Association; or</text></subparagraph>
<subparagraph id="HEC282BEDD81940E4818DA2687C984014"><enum>(C)</enum><text>impose any continuing education requirements on any nonresident insurance producer that is a member of the Association.</text></subparagraph></paragraph>
<paragraph id="HD9B3E2538066439EAFDA7ABE434F88AF"><enum>(2)</enum><header>States other than a home State</header><text>No State, other than the home State of a member of the Association, shall—</text>
<subparagraph id="HF912D2F278084D1CB63A5F019E7CF26F"><enum>(A)</enum><text>impose any licensing, personal or corporate qualifications, education, training, experience, residency, continuing education, or bonding requirement upon a member of the Association that is different from the criteria for membership in the Association or renewal of such membership;</text></subparagraph>
<subparagraph id="H5CB1203C557D41C394FAD8048A419AD3"><enum>(B)</enum><text>impose any requirement upon a member of the Association that it be licensed, registered, or otherwise qualified to do business or remain in good standing in the State, including any requirement that the insurance producer register as a foreign company with the secretary of state or equivalent State official;</text></subparagraph>
<subparagraph id="HCC29B81C1ABD4E8C85DEABD60B7D918B"><enum>(C)</enum><text>require that a member of the Association submit to a criminal history record check as a condition of doing business in the State; or</text></subparagraph>
<subparagraph id="H53164A00A55C44A39D3D4CC8C054EF2D"><enum>(D)</enum><text>impose any licensing, registration, or appointment requirements upon a member of the Association, or require a member of the Association to be authorized to operate as an insurance producer, in order to sell, solicit, or negotiate insurance for commercial property and casualty risks to an insured with risks located in more than one State, if the member is licensed or otherwise authorized to operate in the State where the insured maintains its principal place of business and the contract of insurance insures risks located in that State.</text></subparagraph></paragraph>
<paragraph id="H71FC3ABCE145438584F9776C7612835C"><enum>(3)</enum><header>Preservation of State disciplinary authority</header><text>Nothing in this section may be construed to prohibit a State from investigating and taking appropriate disciplinary action, including suspension or revocation of authority of an insurance producer to do business in a State, in accordance with State law and that is not inconsistent with the provisions of this section, against a member of the Association as a result of a complaint or for any alleged activity, regardless of whether the activity occurred before or after the insurance producer commenced doing business in the State pursuant to Association membership.</text></paragraph></subsection></section>
<section id="HB0BE1FA6B6F843CC964DBB6649E0BABC"><enum>331.</enum><header>Coordination with Financial Industry Regulatory Authority</header><text display-inline="no-display-inline">The Association shall coordinate with the Financial Industry Regulatory Authority in order to ease any administrative burdens that fall on members of the Association that are subject to regulation by the Financial Industry Regulatory Authority, consistent with the requirements of this subtitle and the Federal securities laws.</text></section>
<section id="H7A9F37C706A44314BF1984BC04F7491E"><enum>332.</enum><header>Right of action</header>
<subsection id="H6F2AB6F091524A458F6938702D21596A"><enum>(a)</enum><header>Right of action</header><text>Any person aggrieved by a decision or action of the Association may, after reasonably exhausting available avenues for resolution within the Association, commence a civil action in an appropriate United States district court, and obtain all appropriate relief.</text></subsection>
<subsection id="HE667C6521C92459C95172EEB7E3248FC"><enum>(b)</enum><header>Association interpretations</header><text>In any action under subsection (a), the court shall give appropriate weight to the interpretation of the Association of its bylaws and standards and this subtitle.</text></subsection></section>
<section id="HF2AF3B42D9724D1CA016661C968DE0CD"><enum>333.</enum><header>Federal funding prohibited</header><text display-inline="no-display-inline">The Association may not receive, accept, or borrow any amounts from the Federal Government to pay for, or reimburse, the Association for, the costs of establishing or operating the Association.</text></section>
<section id="HC6CEDE2DE2794C54B2770505A4BFF98A"><enum>334.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this subtitle, the following definitions shall apply:</text>
<paragraph id="H5AD96DF5DECA4E7EA5B815186BD05F24"><enum>(1)</enum><header>Business entity</header><text>The term <term>business entity</term> means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.</text></paragraph>
<paragraph id="H27F1BCBD9BDC490CAE0C43FFF38D8867"><enum>(2)</enum><header>Depository institution</header><text>The term <term>depository institution</term> has the meaning as in section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>).</text></paragraph>
<paragraph id="H06E1747ADAD644D1BD6390B8CA02B410"><enum>(3)</enum><header>Home State</header><text>The term <term>home State</term> means the State in which the insurance producer maintains its principal place of residence or business and is licensed to act as an insurance producer.</text></paragraph>
<paragraph id="HFE2E58366A124E4888B9767E28399A7E"><enum>(4)</enum><header>Insurance</header><text>The term <term>insurance</term> means any product, other than title insurance or bail bonds, defined or regulated as insurance by the appropriate State insurance regulatory authority.</text></paragraph>
<paragraph id="H7AE95B4D0BC44E8489B8F92D9FD21CD2"><enum>(5)</enum><header>Insurance producer</header><text>The term <term>insurance producer</term> means any insurance agent or broker, excess or surplus lines broker or agent, insurance consultant, limited insurance representative, and any other individual or entity that sells, solicits, or negotiates policies of insurance or offers advice, counsel, opinions or services related to insurance.</text></paragraph>
<paragraph id="HF424FC2D93D1424BBD9208FF646BFF59"><enum>(6)</enum><header>Insurer</header><text>The term <term>insurer</term> has the meaning as in <external-xref legal-doc="usc" parsable-cite="usc/31/313">section 313(e)(2)(B)</external-xref> of title 31, United States Code.</text></paragraph>
<paragraph id="HB5C968DF15D44E679919125B1006BDE6"><enum>(7)</enum><header>Principal place of business</header><text>The term <term>principal place of business</term> means the State in which an insurance producer maintains the headquarters of the insurance producer and, in the case of a business entity, where high-level officers of the entity direct, control, and coordinate the business activities of the business entity.</text></paragraph>
<paragraph id="HE337FF97765B45DEA34B17CEAFF7D340"><enum>(8)</enum><header>Principal place of residence</header><text>The term <term>principal place of residence</term> means the State in which an insurance producer resides for the greatest number of days during a calendar year.</text></paragraph>
<paragraph id="H97FD449B45474B35B946EA68C38BEF40"><enum>(9)</enum><header>State</header><text>The term <term>State</term> includes any State, the District of Columbia, any territory of the United States, and Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands.</text></paragraph>
<paragraph id="H9E2D2D86B25F434785C84DE089256A5B"><enum>(10)</enum><header>State law</header>
<subparagraph id="H8C7DE48FCC71473B948AD245A768D140"><enum>(A)</enum><header>In general</header><text>The term <term>State law</term> includes all laws, decisions, rules, regulations, or other State action having the effect of law, of any State.</text></subparagraph>
<subparagraph id="HFAAB9929FEA64204BCA96145A6DD8840"><enum>(B)</enum><header>Laws applicable in the District of Columbia</header><text>A law of the United States applicable only to or within the District of Columbia shall be treated as a State law rather than a law of the United States.</text></subparagraph></paragraph></section></subtitle><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HED9490AD7B6A463DB0F0D122B3D925E8"><enum>(b)</enum><header>Technical amendment</header><text>The table of contents for the Gramm-Leach-Bliley Act is amended by striking the items relating to subtitle C of title III and inserting the following new items:</text>
<quoted-block id="H657F1DCA48454F9C900A596F777FD8E4" style="OLC">
<toc>
<toc-entry idref="HC117D07A88ED49399153DC9C937B0C89" level="subtitle">Subtitle C—National Association of Registered Agents and Brokers</toc-entry>
<toc-entry idref="H35F264DD4F79460D939EC4D04C7425DC" level="section">Sec. 321. National Association of Registered Agents and Brokers.</toc-entry>
<toc-entry idref="H3474869131C442B885EEE8369DB7C977" level="section">Sec. 322. Purpose.</toc-entry>
<toc-entry idref="H550763386FD2459CB9094B457C7FB2B0" level="section">Sec. 323. Membership.</toc-entry>
<toc-entry idref="H3CACE941FECB48F0AAC8567FA991C3B8" level="section">Sec. 324. Board of directors.</toc-entry>
<toc-entry idref="H72718E8283D14A87B6378AF41065BC7B" level="section">Sec. 325. Bylaws, standards, and disciplinary actions.</toc-entry>
<toc-entry idref="H8E3A61B334804A5496197EA89778149D" level="section">Sec. 326. Powers.</toc-entry>
<toc-entry idref="H9FB75AB823A74993958DC29DEF58A62E" level="section">Sec. 327. Report by the Association.</toc-entry>
<toc-entry idref="HD4D3210A58E347EE8D1BC7A8DFFDC64B" level="section">Sec. 328. Liability of the Association and the Board members, officers, and employees of the Association.</toc-entry>
<toc-entry idref="H50DE748F01FE43178D9DE05045984E3E" level="section">Sec. 329. Presidential oversight.</toc-entry>
<toc-entry idref="HA9BB166D72614896808EE8021A286DE3" level="section">Sec. 330. Relationship to State law.</toc-entry>
<toc-entry idref="HB0BE1FA6B6F843CC964DBB6649E0BABC" level="section">Sec. 331. Coordination with financial industry regulatory authority.</toc-entry>
<toc-entry idref="H7A9F37C706A44314BF1984BC04F7491E" level="section">Sec. 332. Right of action.</toc-entry>
<toc-entry level="section">Sec. 333. Federal funding prohibited.</toc-entry>
<toc-entry idref="HC6CEDE2DE2794C54B2770505A4BFF98A" level="section">Sec. 334. Definitions.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
July 16, 2014
Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed