[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1257 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 1257

To reconstitute the Federal Insurance Administration as an independent 
   agency within the executive branch, provide for minimum standards 
 applicable to foreign insurers and reinsurers providing insurance in 
    the United States, make liquidity assistance available to well-
   capitalized insurance companies, and provide for public access to 
  information regarding the availability of insurance, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 9, 1993

  Mr. Kennedy (for himself and Mr. Gonzalez) introduced the following 
bill; which was referred to the Committee on Banking, Finance and Urban 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
To reconstitute the Federal Insurance Administration as an independent 
   agency within the executive branch, provide for minimum standards 
 applicable to foreign insurers and reinsurers providing insurance in 
    the United States, make liquidity assistance available to well-
   capitalized insurance companies, and provide for public access to 
  information regarding the availability of insurance, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Federal Insurance 
Administration Act''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
               TITLE I--FEDERAL INSURANCE ADMINISTRATION

Sec. 101. Reestablishment of Federal Insurance Administration as 
                            independent establishment in executive 
                            branch.
Sec. 102. Administrator.
Sec. 103. Transfer of functions.
Sec. 104. Personnel.
Sec. 105. Property and records.
Sec. 106. Administrative provisions.
Sec. 107. Continuation of service of Administrator.
Sec. 108. Report.
Sec. 109. References.
Sec. 110. Savings provisions.
Sec. 111. Definitions.
Sec. 112. Conforming amendments.
Sec. 113. Effective date.
                TITLE II--REGULATION OF FOREIGN INSURERS

Sec. 201. Purpose. 
Sec. 202. Certification of direct insurers.
Sec. 203. Standards for certification of direct insurers.
Sec. 204. Certification of reinsurers.
Sec. 205. Standards for certification of reinsurers.
Sec. 206. Financial statements and examinations.
Sec. 207. Decertification.
Sec. 208. GAO audits.
Sec. 209. National insurance intelligence database.
Sec. 210. Penalties.
Sec. 211. Definitions.
Sec. 212. Limitation on preemption.
Sec. 213. Effective date.
   TITLE III--LIQUIDITY ASSISTANCE BY FEDERAL RESERVE BANKS TO WELL-
                    CAPITALIZED INSURANCE COMPANIES

Sec. 301. Short title.
Sec. 302. Certification of eligibility for liquidity assistance.
Sec. 303. Requests for liquidity assistance.
Sec. 304. Report.
Sec. 305. Provision of liquidity assistance to insurance companies by 
                            Federal Reserve banks.
Sec. 306. Regulations.
       TITLE IV--DISCLOSURE OF INSURANCE AVAILABILITY INFORMATION

Sec. 401. Short title.
Sec. 402. Findings and construction.
Sec. 403. Maintenance of information and public disclosure.
Sec. 404. Requirements.
Sec. 405. Access system.
Sec. 406. Submission to Administrator.
Sec. 407. Designations.
Sec. 408. Disclosures to rejected applicants.
Sec. 409. Termination of agents.
Sec. 410. Implementation.
Sec. 411. Improved methods.
Sec. 412. Compilation of aggregate data.
Sec. 413. Testers.
Sec. 414. Report.
Sec. 415. Enforcement.
Sec. 416. Relation to State laws.
Sec. 417. Definitions.
Sec. 418. Effective date.

               TITLE I--FEDERAL INSURANCE ADMINISTRATION

SEC. 101. REESTABLISHMENT OF FEDERAL INSURANCE ADMINISTRATION AS 
              INDEPENDENT ESTABLISHMENT IN EXECUTIVE BRANCH.

    The Federal Insurance Administration of the Federal Emergency 
Management Agency is hereby established as an independent establishment 
in the executive branch of the Government to be known as the Federal 
Insurance Administration.

SEC. 102. ADMINISTRATOR.

    There shall be at the head of the Federal Insurance Administration 
a Federal Insurance Administrator, who shall be appointed by the 
President, by and with the advice and consent of the Senate. The 
Administration shall be administered under the supervision and 
direction of the Administrator.

SEC. 103. TRANSFER OF FUNCTIONS.

    (a) In General.--There are transferred to the Administrator all 
functions of--
            (1) the Director of the Federal Emergency Management Agency 
        under--
                    (A) the Flood Disaster Protection Act of 1973 (42 
                U.S.C. 4001 et seq.);
                    (B) the National Flood Insurance Act of 1968 (42 
                U.S.C. 4011 et seq.), including borrowing under section 
                1309 of such Act pursuant to the authority under 
                section 15(e) of the Federal Flood Insurance Act of 
                1956 (42 U.S.C. 2414(e));
                    (C) title XII of the National Housing Act (12 
                U.S.C. 1749bbb et seq.);
                    (D) the Coastal Barrier Resources Act (16 U.S.C. 
                3501 et seq.); and
                    (E) section 2(d) of Executive Order 11988 (42 
                U.S.C. 4321 note; relating to floodplain management); 
                and
            (2) the Federal Insurance Administrator and Federal 
        Insurance Administration, of the Federal Emergency Management 
        Agency.
    (b) Effect of Transfers.--The transfer of each function from an 
officer or office under subsection (a) shall include any aspects of 
such function vested in a subordinate of such officer or in a component 
of such office.

SEC. 104. PERSONNEL.

    (a) Appointment.--The Administrator may select, appoint, employ, 
and fix the compensation of any officers and employees necessary to 
carry out the functions of the Administrator.
    (b) Transfer.--
            (1) In general.--The personnel employed in connection with 
        the functions and office transferred by this title are hereby 
        transferred to the Administrator.
            (2) Effect.--Any full-time or part-time personnel employed 
        in permanent positions shall not be separated or reduced in 
        grade or compensation because of the transfer under this 
        subsection during the 1-year period beginning upon the date of 
        the effectiveness of this title.
    (c) Treatment of Requirements Under Title 5, United States Code.--
            (1) Appointments above gs-15.--The Director of the Office 
        of Personnel Management shall, under section 5108 of title 5, 
        United States Code, provide for the establishment, upon the 
        transfer of personnel by this section, in each of the grade 
        levels above GS-15 of a number of positions in the 
        Administration equal to the number of positions in such grade 
        level that were filled by personnel transferred by this 
        section.
            (2) Inapplicability of approval provision.--Personnel 
        referred to in paragraph (1) may be appointed to positions 
        established under such paragraph without regard to the 
        provisions of section 3324 of title 5, United States Code, if 
        the individual appointed in such position is an individual who 
        is transferred by this section and, on the day preceding the 
        date of the effectiveness of this title, holds a position and 
        has duties comparable to those of the position to which 
        appointed hereunder.
            (3) Termination of authority.--The authority under this 
        subsection with respect to any position shall terminate when 
        the person first appointed to fill such position ceases to hold 
        such position.

SEC. 105. PROPERTY AND RECORDS.

    The contracts, liabilities, records, property, and other assets and 
interests of, or made available in connection with, the functions and 
office transferred by this title are hereby transferred to the 
Administrator for appropriate allocation.

SEC. 106. ADMINISTRATIVE PROVISIONS.

    The Administrator may--
            (1) issue any regulations the Administrator considers 
        necessary to carry out the functions of the Administrator;
            (2) organize the Administration as the Administrator 
        determines necessary or appropriate, subject to the provisions 
        of this title;
            (3) except as otherwise provided by law, delegate any 
        function of the Administrator to the officers and employees of 
        the Administration as the Administrator may designate, and may 
        authorize successive redelegations of such functions as the 
        Administrator considers necessary or appropriate; except that 
        the delegation of functions under this paragraph shall not 
        relieve the Administrator of responsibility for the 
        administration of such functions;
            (4) procure the services of experts and consultants in 
        accordance with section 3109 of title 5, United States Code;
            (5) accept and use gifts, bequests, and donations of 
        property;
            (6) use the United States mails in the same manner and 
        under the same conditions as other departments and agencies of 
        the United States;
            (7) subject to the provisions of the Federal Property and 
        Administrative Services Act of 1949, make, enter into, and 
        perform such contracts, grants, leases, cooperative agreements, 
        or other similar transactions and make such payments as the 
        Administrator determines necessary or appropriate to carry out 
        the functions of the Administrator; except that the authority 
        to enter into contracts and to make payments shall be effective 
        only to such extent or in such amounts as are provided in 
        appropriation Acts; and
            (8) cause a seal of office to be made for the 
        Administration of such design as the Administrator shall 
        approve, and judicial notice shall be taken of the seal.

SEC. 107. CONTINUATION OF SERVICE OF ADMINISTRATOR.

    The individual serving as the Federal Insurance Administrator of 
the Federal Emergency Management Agency on the date of the 
effectiveness of this title may act as Administrator until the date an 
individual is appointed under this Act to the position of 
Administrator, or until the end of the 120-day period provided for in 
section 3348 of title 5, United States Code (relating to limitations on 
the period of time a vacancy may be filled temporarily), whichever is 
earlier, and while so acting shall be compensated at the rate provided 
for the Administrator.

SEC. 108. REPORT.

    Not later than 3 months after the conclusion of each fiscal year, 
the Administrator shall submit to the Committee on Banking, Finance and 
Urban Affairs of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate, a report regarding 
the activities of the Administration during the fiscal year. The report 
shall include a statement of the goals, priorities, and plans for the 
Administration, an assessment of the progress made toward attainment of 
such goals, priorities, and plans, and a financial statement of the 
Administration describing the operations of the Administration and the 
financial operating plans and forecasts for the Administration for the 
ensuing year.

SEC. 109. REFERENCES.

    Any reference in any other Federal law, Executive order, rule, 
regulation, or delegation of authority, or any document of or 
pertaining to the Federal Emergency Management Agency--
            (1) to the Federal Insurance Administrator of the Federal 
        Emergency Management Agency is deemed to refer to the Federal 
        Insurance Administrator of the Federal Insurance Administration 
        established under this title; and
            (2) to the Federal Insurance Administration under the 
        Federal Emergency Management Agency is deemed to refer to the 
        Federal Insurance Administration established under this title.

SEC. 110. SAVINGS PROVISIONS.

    (a) Legal Documents.--All orders, determinations, rules, 
regulations, permits, grants, contracts, certificates, licenses, and 
privileges--
            (1) that have been issued, made, granted, or allowed to 
        become effective by the President, by the Director of the 
        Federal Emergency Management Agency, by the Federal Insurance 
        Administrator of the Federal Emergency Management Agency, or by 
        a court of competent jurisdiction, in the performance of 
        functions of the Director under the provisions referred to in 
        section 103(a) or the Federal Insurance Administrator of the 
        Federal Emergency Management Agency, and
            (2) that are in effect on the date of the effectiveness of 
        this title (or become effective after such date pursuant to 
        their terms as in effect on such date),
shall continue in effect according to their terms until modified, 
terminated, superseded, set aside, or revoked in accordance with law by 
the President, the Administrator or other authorized official, by a 
court of competent jurisdiction, or by operation of law.
    (b) Proceedings.--The provisions of this title shall not affect any 
proceedings or any application for any benefits, service, license, 
permit, certificate, or financial assistance pending before the Federal 
Emergency Management Agency on the date of the effectiveness of this 
title, but such proceedings and applications shall be continued. Orders 
shall be issued in such proceedings, appeals shall be taken therefrom, 
and payments shall be made pursuant to such orders, as if this Act had 
not been enacted, and orders issued in any such proceeding shall 
continue in effect until modified, terminated, superseded, or revoked 
by a duly authorized official, by a court of competent jurisdiction, or 
by operation of law. Nothing in this subsection shall be deemed to 
prohibit the discontinuance or modification of any such proceeding 
under the same terms and conditions and to the same extent that such 
proceeding could have been discontinued or modified if this title had 
not been enacted.
    (c) Suits.--The provisions of this title shall not affect suits 
commenced before the date of the effectiveness of this title, and in 
all such suits, proceeding shall be had, appeals taken, and judgments 
rendered in the same manner and with the same effect as if this title 
had not been enacted.
    (d) Nonabatement of Actions.--No suit, action, or other proceeding 
commenced by or against the Director of the Federal Emergency 
Management Agency or the Federal Insurance Administration of such 
Agency, or by or against any individual in the official capacity of 
such individual as an officer of such Agency or Administration, shall 
abate by reason of the enactment of this title.
    (e) Continuance of Suits.--If, before the date of the effectiveness 
of this Act, any agency or officer thereof in the official capacity of 
such officer, is party to a suit, and under this title any function of 
such agency or officer is transferred to the Administrator or any other 
official of the Administration, then such suit shall be continued with 
the Administrator or other appropriate official of the Administration 
substituted or added as a party.

SEC. 111. DEFINITIONS.

    For purposes of this Act:
            (1) The term ``Administration'' means the Federal Insurance 
        Administration, as established under section 101.
            (2) The term ``Administrator'' means the Federal Insurance 
        Administrator-, as such position is established under section 
        102.
            (3) The term ``function'' includes any duty, obligation, 
        power, authority, responsibility, right, privilege, activity, 
        or program.

SEC. 112. CONFORMING AMENDMENTS.

    (a) Flood Disaster Protection Act of 1973.--The Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4001 et seq.) is amended--
            (1) in section 3(a), by striking paragraph (6) and 
        inserting the following new paragraph:
            ``(6) `Administrator' means the Federal Insurance 
        Administrator.'';
            (2) in section 201(b), by striking ``Director's'' and 
        inserting ``Administrator's''; and
            (3) by striking ``Director'' each place it appears and 
        inserting ``Administrator''.
    (b) National Flood Insurance Act of 1968.--The National Flood 
Insurance Act of 1968 (42 U.S.C. 4011 et seq.) is amended--
            (1) in section 1304(a), by striking ``Director of the 
        Federal Emergency Management Agency'' and inserting ``Federal 
        Insurance Administrator'';
            (2) in section 1307(f)--
                    (A) by striking ``Director of the Federal Emergency 
                Management Agency'' each place it appears and inserting 
                ``Administrator''; and
                    (B) by striking ``and the Federal Emergency 
                Management Agency'' and inserting ``and the Federal 
                Insurance Administration'';
            (3) in section 1345(c)--
                    (A) by striking ``Director of the Federal Emergency 
                Management Agency'' each place it appears and inserting 
                ``Administrator''; and
                    (B) by striking ``part of the Federal Emergency 
                Management Agency'' each place it appears and inserting 
                ``part of the Federal Insurance Administration'';
            (4) in section 1363, by striking ``Director's'' each place 
        it appears and inserting ``Administrator's'';
            (5) in section 1370(a), by striking paragraph (6) and 
        inserting the following new paragraph:
            ``(6) the term `Administrator' means the Federal Insurance 
        Administrator.''; and
            (6) by striking ``Director'' each place it appears and 
        inserting ``Administrator''.
    (c) Federal Flood Insurance Act of 1956.--Section 15(e) of the 
Federal Flood Insurance Act of 1956 (42 U.S.C. 2414(e)) is amended by 
striking ``Director of the Federal Emergency Management Agency'' each 
place it appears and inserting ``Federal Insurance Administrator''.
    (d) National Housing Act.--Title XII of the National Housing Act 
(12 U.S.C. 1749bbb et seq.) is amended--
            (1) in section 1203(a), by striking paragraph (17) and 
        inserting the following new paragraph:
            ``(17) `Administrator' means the Federal Insurance 
        Administrator.'';
            (2) in section 1231(c), by striking ``Director's'' and 
        inserting ``Administrator's''; and
            (3) by striking ``Director'' each place it appears and 
        inserting ``Administrator''.
    (e) Compensation at Level IV of Executive Schedule.--Section 5315 
of title 5, United States Code, is amended by striking ``Federal 
Insurance Administrator, Federal Emergency Management Agency.'' and 
inserting the following new item:
            ``Federal Insurance Administrator, Federal Insurance 
        Administration.''.
    (f) Housing and Urban Development Act of 1968.--Section 1105 of the 
Housing and Urban Development Act of 1968 (42 U.S.C. 4129) is amended 
by striking subsection (a).

SEC. 113. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this title 
shall take effect upon the expiration of the 180-day period beginning 
on the date of the enactment of this Act.
    (b) Appointment of Administrator.--Notwithstanding any other 
provision of law or of this title, the President may, any time after 
the date of the enactment of this Act, appoint an individual to serve 
as Federal Insurance Administrator, as such position is established 
under section 102. An appointment under this section may not be 
construed to affect the position of Federal Insurance Administrator 
under the Federal Emergency Management Agency or the authority of such 
official during the period under subsection (a).

                TITLE II--REGULATION OF FOREIGN INSURERS

SEC. 201. PURPOSE.

    The purposes of this title are--
            (1) to establish minimum solvency, registration, and other 
        business requirements for foreign insurers who provide 
        insurance to residents of the United States covering property 
        or risks located in the United States on a direct written 
        basis; and
            (2) to establish minimum requirements for reinsurance ceded 
        to foreign insurers and reinsurers by insurers formed and 
        licensed within the United States that may be claimed as an 
        asset or deduction from liability.

SEC. 202. CERTIFICATION OF DIRECT INSURERS.

    (a) Requirement for Conducting Business.--Notwithstanding any other 
State or Federal law, no foreign insurer may act as a direct insurer 
unless the foreign insurer is certified under this title by the Federal 
Insurance Administrator as a certified direct insurer and no person may 
assist or facilitate the placement of insurance with a foreign insurer 
acting as a direct insurer unless the foreign insurer is so certified.
    (b) Application.--The Administrator shall provide for foreign 
insurers to apply, in the form and manner determined by the 
Administrator, for certification under this title. The Administrator 
may establish and charge a reasonable application fee to cover any 
costs of the application procedure and reviewing applications.
    (c) Certification.--The Administrator may certify a foreign insurer 
as a certified direct insurer for purposes of this title only if the 
foreign insurer submits an application under this section containing 
the information described in section 203 and the Administrator 
determines that the foreign insurer complies with the standards 
established under section 203.

SEC. 203. STANDARDS FOR CERTIFICATION OF DIRECT INSURERS.

    The Administrator shall establish standards for certifying, and 
renewing certification, of foreign insurers as certified direct 
insurers, which shall include the following requirements:
            (1) Examinations, audits, and financial statements.--The 
        foreign insurer shall--
                    (A) maintain any books and records in accordance 
                with any requirements established by the Administrator;
                    (B) provide the Administrator access to such books 
                and records for purpose of examinations under section 
                206(b); and
                    (C) submit to the Administrator financial 
                information in accordance with section 206(a).
            (2) Regulatory fee.--The foreign insurer shall pay to the 
        Administrator a fee not exceeding the amount determined by the 
        Administrator that, together with other such fees, is 
        sufficient to cover the costs of administering any activities 
        under this title relating to foreign insurers.
            (3) Minimum net worth.--The foreign insurer shall have a 
        net worth in an amount not less than the amount established by 
        the Administrator. The net worth of an insurer and the value of 
        any assets and liabilities of an insurer shall be determined, 
        for purposes of this paragraph, in accordance with generally 
        accepted accounting practices and as provided by the 
        Administrator.
            (4) Reserve.--The foreign insurer shall establish and 
        maintain a capital reserve with the Administrator, which shall 
        be in the form determined by the Administrator and shall meet 
        the following requirements:
                    (A) Availability of proceeds.--The proceeds of the 
                reserve shall be available only for the purpose of 
                securing the payment of valid claims of the United 
                States policyholders of the insurer and other claimants 
                under such policies.
                    (B) Balance.--Except as provided in subparagraph 
                (C), the reserve shall have a balance, at all times, of 
                cash, readily marketable securities, and letters of 
                credit, acceptable in the determination of the 
                Administrator, in an amount not less than the amount 
                equal to the percentage of the aggregate amount of the 
                United States direct written obligations of the insurer 
                that is established by the Administrator under this 
                subparagraph. The Administrator shall establish such 
                percentage based on the percentage of reserves 
                necessary to be held to protect the interests of United 
                States policyholders of the insurer and other claimants 
                under such policies.
                    (C) Unsafe financial conditions.--The Administrator 
                may increase the percentage under subparagraph (B) for 
                an insurer if the Administrator determines that such 
                insurer is operating in a manner likely to result in an 
                unsafe or unsound financial condition.
            (5) Agent for service of process.--The foreign insurer 
        shall appoint and maintain an agent in the United States upon 
        whom process may be served in any action, suit, or proceeding.
            (6) Jurisdiction of courts.--The foreign insurer shall 
        agree to submit to the jurisdiction of any court of the United 
        States or of any State, of competent jurisdiction, to be fully 
        bound by its decision.
            (7) Regulation by domicile.--The foreign insurer shall 
        annually submit to the Administrator a certificate of 
        compliance, certificate of good standing, or equivalent 
        documentation (as determined by the Administrator) properly 
        attested by the body responsible for regulation of the insurer 
        in the domicile of the insurer, evidencing authority under the 
        laws of the domicile of the insurer to engage in the business 
        of insurance.
            (8) Biographical information.--The foreign insurer shall 
        annually submit to the Administrator, in the form and manner 
        determined by the Administrator--
                    (A) biographical information on all senior officers 
                and directors of the insurer that demonstrates a level 
                of competency, experience, and integrity sufficient to 
                indicate that permitting the insurer to conduct 
                business in the United States would not be hazardous to 
                United States policyholders and creditors of the 
                insurer or to the general public; and
                    (B) financial, management, and operational 
                information on any entities that directly or indirectly 
                control the insurer, as the Administrator shall 
                provide.
            (9) Insurance experience.--The foreign insurer shall--
                    (A) have been actively and continuously engaged in 
                the business of insurance for a period of not less than 
                3 years ending upon the submission of an application 
                under section 202;
                    (B) be a wholly owned subsidiary of an insurer and 
                have been actively and continuously engaged in the 
                business of insurance for a period of not less than 3 
                years ending upon the submission of an application 
                under section 202; or
                    (C) be the continuing corporation resulting from a 
                merger or consolidation of insurers, at least one of 
                which has been actively and continuously engaged in the 
                business of insurance for a period of not less than 3 
                years ending upon the submission of an application 
                under section 202.
            (10) Other.--The foreign insurer shall meet any other 
        requirements as the Administrator may provide.

SEC. 204. CERTIFICATION OF REINSURERS.

    (a) Requirement for Conducting Business.--Notwithstanding any other 
State or Federal law, no insurer licensed by any State nor any 
certified direct insurer under this title may claim reinsurance from a 
foreign reinsurer as an asset or deduction from liability for purposes 
of any financial statement (including financial statements required 
under this title) unless the foreign reinsurer is certified under this 
title by the Administrator as a certified reinsurer.
    (b) Application.--The Administrator shall provide for foreign 
reinsurers to apply, in the form and manner determined by the 
Administrator, for certification under this title. The Administrator 
may establish and charge a reasonable application fee to cover any 
costs of the application procedure and reviewing applications.
    (c) Certification.--The Administrator may certify a foreign 
reinsurer as a certified reinsurer for purposes of this title only if 
the foreign reinsurer submits an application under this section 
containing any information described in section 205 and the 
Administrator determines that the foreign reinsurer complies with the 
standards established under section 205.

SEC. 205. STANDARDS FOR CERTIFICATION OF REINSURERS.

    The Administrator shall establish standards for certifying, and 
renewing certification, of foreign reinsurers as certified reinsurers, 
which shall include the following requirements:
            (1) Examinations, audits, and financial statements.--The 
        foreign reinsurer shall--
                    (A) maintain any books and records in accordance 
                with any requirements established by the Administrator;
                    (B) provide the Administrator access to such books 
                and records for purpose of examinations under section 
                206(b); and
                    (C) submit to the Administrator financial 
                information in accordance with section 206(a).
            (2) Regulatory fee.--The foreign reinsurer shall pay to the 
        Administrator a fee not exceeding the amount determined by the 
        Administrator that, together with other such fees, is 
        sufficient to cover the costs of administering any activities 
        under this title relating to foreign reinsurers.
            (3) Minimum net worth.--The foreign reinsurer shall have a 
        net worth in an amount not less than the amount established by 
        the Administrator. The net worth of a reinsurer and the value 
        of any assets and liabilities of a reinsurer shall be 
        determined, for purposes of this paragraph, in accordance with 
        generally accepted accounting practices and as provided by the 
        Administrator.
            (4) Trust fund.--The foreign reinsurer shall establish and 
        maintain a capital reserve with the Administrator, which shall 
        be in the form determined by the Administrator and shall meet 
        the following requirements:
                    (A) Availability of proceeds.--The proceeds of the 
                reserve shall be available only for the purpose of 
                securing the payment of valid claims of the United 
                States policyholders of the reinsurer and other 
                claimants under such policies.
                    (B) Balance.--Except as provided in subparagraph 
                (C), the reserve shall have a balance, at all times, of 
                cash, readily marketable securities, and letters of 
                credit, acceptable in the determination of the 
                Administrator, in an amount not less than the amount 
                equal to the percentage of the aggregate amount of the 
                United States reinsurance obligations of the reinsurer 
                that is established by the Administrator under this 
                subparagraph. The Administrator shall establish such 
                percentage based on the percentage of reserves 
                necessary to be held to protect the interests of United 
                States policyholders of the reinsurer and other 
                claimants under such policies.
                    (C) Unsafe financial conditions.--The Administrator 
                may increase the percentage under subparagraph (B) for 
                a reinsurer if the Administrator determines that such 
                reinsurer is operating in a manner likely to result in 
                an unsafe or unsound financial condition.
            (5) Agent for service of process.--The foreign reinsurer 
        shall appoint and maintain an agent in the United States upon 
        whom process may be served in any action, suit, or proceeding.
            (6) Jurisdiction of courts.--
                    (A) In general.--The foreign reinsurer shall agree 
                to submit to the jurisdiction of any court of the 
                United States or of any State, of competent 
                jurisdiction, to be fully bound by its decision.
                    (B) Arbitration.--The provisions of subparagraph 
                (A) may not be construed to annul, alter, or effect any 
                obligation of the parties to a reinsurance agreement to 
                arbitrate or otherwise resolve their disputes that is 
                established by such an agreement; except that the title 
                to or the right to be paid out of any trust fund 
                established or maintained pursuant to paragraph (4) 
                shall not be subject to arbitration or other 
                resolution.
            (7) Regulation by domicile.--The foreign reinsurer shall 
        annually submit to the Administrator a certificate of 
        compliance, certificate of good standing, or equivalent 
        documentation (as determined by the Administrator) properly 
        attested by the body responsible for regulation of the 
        reinsurer in the domicile of the reinsurer, evidencing 
        authority under the laws of the domicile of the reinsurer to 
        engage in the business of reinsurance.
            (8) Biographical information.--The foreign reinsurer shall 
        annually submit to the Administrator, in the form and manner 
        determined by the Administrator--
                    (A) biographical information on all senior officers 
                and directors of the reinsurer that demonstrates a 
                level of competency, experience, and integrity 
                sufficient to indicate that permitting the reinsurer to 
                conduct business in the United States would not be 
                hazardous to United States cedants and creditors of the 
                reinsurer or to the general public; and
                    (B) financial, management, and operational 
                information on all entities that directly or indirectly 
                control the reinsurer, as the Administrator shall 
                provide.
            (9) Insurance experience.--The foreign reinsurer shall--
                    (A) have been actively and continuously engaged in 
                the business of insurance for a period of not less than 
                3 years ending upon the submission of an application 
                under section 204;
                    (B) be a wholly owned subsidiary of an insurer and 
                have been actively and continuously engaged in the 
                business of insurance for a period of not less than 3 
                years ending upon the submission of an application 
                under section 204; or
                    (C) be the continuing corporation resulting from a 
                merger or consolidation of insurers, at least one of 
                which has been actively and continuously engaged in the 
                business of insurance for a period of not less than 3 
                years ending upon the submission of an application 
                under section 204.
            (10) Other.--The foreign reinsurer shall meet any other 
        requirements as the Administrator may provide.

SEC. 206. FINANCIAL STATEMENTS AND EXAMINATIONS.

    (a) Financial Statements.--
            (1) In general.--The Administrator shall establish 
        standards under this subsection requiring foreign insurers and 
        foreign reinsurers to submit financial statements to the 
        Administrator.
            (2) GAAP principles.--The standards shall require that each 
        financial statement comply with generally accepted accounting 
        principles and be developed in accordance with such principles.
            (3) Independent audit.--Each financial statement shall 
        include an audit conducted by a independent certified public 
        accountant or other qualified independent auditor in accordance 
        with generally accepted accounting principles.
            (4) Timing.--The Administrator shall require submission of 
        a financial statement under this subsection by--
                    (A) each insurer and each reinsurer applying for 
                certification under section 202 or 204, as applicable; 
                and
                    (B) each certified direct insurer and each 
                certified reinsurer, on an annual basis.
            (5) Additional information.--The Administrator may at any 
        time require any foreign insurer or foreign reinsurer to submit 
        to the Administrator, in addition to the information contained 
        in a financial statement under this subsection, financial 
        information that the Administrator considers reasonable and 
        necessary to determine the financial condition of the insurer 
        or reinsurer.
    (b) Examinations.--
            (1) In general.--The Administrator shall establish 
        standards under this subsection for examinations of foreign 
        insurers and foreign reinsurers to determine their financial 
        condition.
            (2) Timing.--The Administrator--
                    (A) shall conduct an examination under this 
                subsection of each insurer and each reinsurer applying 
                for certification under section 202 or 204; and
                    (B) may conduct an examination of an insurer or a 
                reinsurer at any time the Director considers an 
                examination reasonable and necessary to determine the 
                financial condition of the insurer or reinsurer.
            (3) Expense.--The Administrator shall assess any costs of 
        an examination under this section against the foreign insurer 
        or foreign reinsurer examined and shall collect such amounts.

SEC. 207. DECERTIFICATION.

    The Administrator may suspend or revoke the certification of 
certified foreign insurers and reinsurers if the Administrator 
determines that such an insurer or a reinsurer fails to comply with the 
requirements of this title and the standards established pursuant to 
this title. The Administrator shall establish standards for suspending 
and revoking such certifications under this section.

SEC. 208. GAO AUDITS.

    The Comptroller General of the United States shall audit the 
operations of the Administrator carried out under this title in 
accordance with generally accepted Government auditing standards. All 
books, records, accounts, reports, files, and property belonging to, or 
used by, the Administrator shall be made available to the Comptroller 
General. Audits under this section shall be conducted upon the 
expiration of the 1-year period beginning upon the date of the 
effectiveness of this title and biennially thereafter. Upon the 
conclusion of each audit under this section, the Comptroller General 
shall submit a report describing the audit to the Committee on Banking, 
Finance and Urban Affairs of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate.

SEC. 209. NATIONAL INSURANCE INTELLIGENCE DATABASE.

    (a) In General.--The Administrator shall collect information 
regarding individuals and other persons that have engaged in, or that 
the Administrator has reason to believe to have engaged in, illegal 
activity relating to insurance or reinsurance activities. The 
Administrator shall establish a computer-based database of such 
information and shall regularly update the database.
    (b) Law Enforcement Access.--The Administrator shall make 
information from the database under this section available to 
appropriate Federal and State law enforcement and regulatory agencies 
upon request.
    (c) Confidentiality.--Except as provided in subsection (b), 
notwithstanding any other law, regulation, ordinance, any agreement, 
any judgment or order of any court, tribunal, or other officer, or any 
other legal process, the Administrator may not disclose any information 
from the database under this section.

SEC. 210. PENALTIES.

    (a) Civil Money Penalty.--Any person or insurer who knowingly fails 
to comply with any provision of this title shall be subject to a civil 
penalty, imposed by the Administrator, in an amount not to exceed 
$1,000,000.
    (b) Criminal Offense.--Whoever knowingly submits information 
required under this title to the Administrator that is false and 
misleading shall be fined under title 18, United States Code, or 
imprisoned not more than 30 years, or both.

SEC. 211. DEFINITIONS.

    For purposes of this title:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Federal Insurance Administration, as 
        established under section 101.
            (2) Certified direct insurer and certified reinsurer.--The 
        terms ``certified direct insurer'' and ``certified reinsurer'' 
        mean a foreign insurer certified under section 202 and a 
        foreign reinsurer certified under section 204, respectively.
            (3) Control.--The term ``control'' means direct or indirect 
        possession of the power to direct or cause the direction of the 
        management and policies of a person, including through the 
        ownership of voting securities, by contract other than a 
        commercial contract for goods or nonmanagerial services, or 
        otherwise, unless the power is the result of an official 
        position with or corporate office held by the person.
            (4) Direct insurer.--The term ``direct insurer'' means a 
        foreign insurer that accepts United States direct risk pursuant 
        to a State surplus or excess lines law. The term does not 
        include foreign insurers accepting United States direct risks 
        by other lawful means.
            (5) Foreign insurer.--The term ``foreign insurer'' means an 
        insurer or reinsurer other than--
                    (A) an insurer or reinsurer organized under the 
                laws of any State or Canada; and
                    (B) the United States branch of a foreign insurer.
        The term includes insurers and reinsurers doing business as 
        single insurers, groups of individual unincorporated 
        underwriters, and groups of incorporated insurers under common 
        administration.
            (6) Foreign reinsurer.--The term ``foreign reinsurer'' 
        means a foreign insurer that assumes, from an insurer or 
        reinsurer licensed by any State, all or any portion of risks 
        undertaken by the licensed insurer. The term does not include a 
        foreign insurer that--
                    (A) assumes only risks arising out of the insuring 
                of the company or other person that owns the insurer or 
                of which the insurer is a subsidiary or affiliate; and
                    (B) does not undertake any other business that is 
                not related to the company or other person that owns 
                the insurer or of which the insurer is a subsidiary or 
                affiliate.
            (7) Letter of credit.--The term ``letter of credit'' means 
        a clean irrevocable letter of credit issued or confirmed by a 
        qualified financial institution, in a form prescribed by the 
        Administrator.
            (8) Readily marketable securities.--The term ``readily 
        marketable securities'' means securities registered for trading 
        on a national securities exchange in accordance with section 12 
        of the Securities Exchange Act of 1934 and any other securities 
        approved by the Administrator.
            (9) State.--The term ``State'' means the States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, American Samoa, the Trust Territory 
        of the Pacific Islands, and any other territory or possession 
        of the United States.
            (10) United states branch of foreign insurer.--The term 
        ``United States branch of foreign Insurer'' means the business 
        unit through which insurance business is transacted within the 
        United States by a foreign insurer and whose assets and 
        liabilities pertaining to such business are within the United 
        States.
            (11) United states direct written insurance obligations.--
        The term ``United States direct written insurance obligations'' 
        means obligations of a direct insurer for unearned premium and 
        unpaid claims, including incurred but not reported claims.
            (12) United states reinsurance obligations.--The term 
        ``United States reinsurance obligations'' means obligations to 
        insurers licensed by any State for reported claims, incurred 
        but not reported claims, unearned premium, losses and loss 
        adjustment expense, aggregate life reserves, and aggregate 
        reserves for accident and health risks.

SEC. 212. LIMITATION ON PREEMPTION.

    This title may not be construed to preempt the law of any State, 
except to the extent that such laws are inconsistent with the 
provisions of this title, and then only to the extent of such 
inconsistency. The Administrator is authorized to determine whether 
such inconsistencies exist.

SEC. 213. EFFECTIVE DATE.

    The provisions of this title shall take effect upon the expiration 
of the 12-month period beginning on the date of the enactment of this 
Act.

   TITLE III--LIQUIDITY ASSISTANCE BY FEDERAL RESERVE BANKS TO WELL-
                    CAPITALIZED INSURANCE COMPANIES

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Insurance Liquidity and Solvency 
Act of 1993''.

SEC. 302. CERTIFICATION OF ELIGIBILITY FOR LIQUIDITY ASSISTANCE.

    (a) In General.--The Federal Insurance Administrator shall 
establish standards under this section for determining the eligibility 
of, and certifying, insurance companies for liquidity assistance 
pursuant to section 13B of the Federal Reserve Act.
    (b) Contents.--The standards under this section shall--
            (1) establish guidelines for the types and manners of 
        organization of companies that may be certified under this 
        section;
            (2) establish minimum financial resource and solvency 
        requirements for insurance companies that, in the determination 
        of the Administrator, ensure that any company complying with 
        such requirements is sufficiently capitalized for purposes of 
        obtaining liquidity assistance pursuant to section 13B of the 
        Federal Reserve Act; and
            (3) provide that only insurance companies meeting or 
        exceeding the minimum financial requirements established under 
        paragraph (2) may be certified under this section.
    (c) Compliance Reports From States.--No insurance company may be 
certified under this section as eligible for liquidity assistance 
pursuant to section 13B of the Federal Reserve Act until the 
Administrator has reviewed any examinations and enforcement and 
compliance reports received or requested from any State insurance 
regulatory authority which has jurisdiction over such company, or any 
activities conducted by such company.
    (d) Examinations and Financial Statements.--In determining whether 
insurance companies are eligible for certification under this section, 
the Administrator may require insurance companies to submit financial 
statements and may conduct examinations of insurance companies in the 
same manner required and conducted with respect to foreign insurers and 
reinsurers under section 206.
    (e) Procedures for Certification of Eligible Companies.--
            (1) In general.--The Administrator shall establish 
        procedures for certifying insurance companies as eligible for 
        liquidity assistance pursuant to section 13B of the Federal 
        Reserve Act.
            (2) Availability of list.--The Administrator shall make 
        publicly available a list of the insurance companies certified 
        under this section as eligible for liquidity assistance 
        pursuant to such Act.
    (f) Financial Resource and Solvency Requirements.--Before the end 
of the 180-day period beginning on the date of the enactment of this 
Act, the Administrator, in consultation with State insurance regulatory 
authorities, shall establish the minimum financial resource and 
solvency requirements for insurance companies under subsection (b)(2).
    (g) Decertification.--The Administrator may suspend or revoke the 
certification of an insurance company previously certified under this 
section if the Administrator determines that the insurance company 
fails to comply with the provisions of this section or the requirements 
established under this section. The Administrator shall establish 
standards for suspending and revoking such certifications under this 
section.

SEC. 303. REQUESTS FOR LIQUIDITY ASSISTANCE.

    (a) In General.--The Administrator shall establish standards and 
procedures under this section for insurance companies certified under 
section 302 to apply for the approval of the Administrator for a 
request for liquidity assistance pursuant to section 13B of the Federal 
Reserve Act and for the Administrator to approve such applications.
    (b) Contents.--The standards established under this section shall 
provide that the Administrator may approve an application for a request 
for liquidity assistance pursuant to section 13B of the Federal Reserve 
Act only if--
            (1) the application is submitted by an insurance company 
        certified under section 302;
            (2) the Administrator determines that the insurance company 
        submitting the request is threatened by a liquidity crisis 
        resulting from policyholder withdrawals;
            (3) the Administrator determines that short-term credit is 
        not otherwise available to the insurance company; and
            (4) the Administrator determines that such liquidity 
        assistance is appropriate for the company considering the 
        circumstances of the company and is likely to assist the 
        company in withstanding the liquidity crisis.
    (c) Copies to Board and State Insurance Regulatory Authority.--Any 
insurance company submitting an application under this section to the 
Administrator for approval of a request for liquidity assistance shall 
submit a copy of the application to the Board of Governors of the 
Federal Reserve System and any appropriate State insurance regulatory 
authority.
    (d) Contents of Application.--Any application under this section 
shall contain--
            (1) evidence of the certification of the insurance company 
        under section 302; and
            (2) a certification by the insurance company that, as of 
        the date of such application, the company is and, during the 
        12-month period ending on such date, has been in compliance 
        with the minimum financial resource and solvency requirements 
        of the Administrator established under section 302(b)(2) and 
        any appropriate State insurance regulatory authority.

SEC. 304. REPORT.

    The Administrator shall submit an annual report to the Committee on 
Banking, Finance and Urban Affairs of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs of the Senate on--
            (1) any insurance companies certified under section 302 or 
        denied certification under such section, during the year 
        covered by the report; and
            (2) any insurance companies for which applications for 
        requests for liquidity assistance were approved or for which 
        such applications were denied, during the year covered by the 
        report.

SEC. 305. PROVISION OF LIQUIDITY ASSISTANCE TO INSURANCE COMPANIES BY 
              FEDERAL RESERVE BANKS.

    The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended by 
inserting after section 13A the following new section:

``SEC. 13B. PROCEDURES APPLICABLE TO LIQUIDITY ASSISTANCE TO INSURANCE 
              COMPANIES.

    ``(a) In General.--For the purpose of ensuring that liquidity 
assistance is available on an objective basis to any well-capitalized 
insurance company that is threatened by a liquidity crisis resulting 
from policyholder withdrawals and the unavailability of short-term 
credit, and in addition to any other procedure or condition established 
under this Act, the procedures and conditions established under this 
section shall apply to liquidity assistance provided by any Federal 
Reserve bank under this Act to any insurance company certified and 
approved under title III of the Federal Insurance Administration Act.
    ``(b) Eligibility.--An insurance company may obtain liquidity 
assistance under this Act under the same terms and conditions as a 
member bank, but only if the company is certified by the Federal 
Insurance Administrator to be eligible for such assistance in 
accordance with the procedures established under section 302 of the 
Federal Insurance Administration Act and an application for a request 
for such liquidity assistance has been approved by the Administrator in 
accordance with the procedures established under section 303 of such 
Act.
    ``(c) Terms and Conditions of Assistance.--
            ``(1) In general.--Liquidity assistance may be provided 
        under this Act by a Federal Reserve bank only in the amount, 
        and to the extent, that such assistance is requested in an 
        application approved by the Federal Insurance Administrator 
        under section 303 of the Federal Insurance Administration Act.
            ``(2) Comparable terms.--Any liquidity assistance provided 
        under this Act by any Federal Reserve bank to any insurance 
        company shall be made for such period of time and at such 
        financing costs as are generally applicable to advances to 
        depository institutions (as defined in section 19(b)(1)(A)) 
        under sections 10, 10A, and 10B.
            ``(3) Notification of liquidity assistance and denial of 
        assistance to fia.--Any Federal Reserve bank which provides or 
        denies liquidity assistance under this Act to any insurance 
        company shall provide prompt notice of such assistance or 
        denial to the Federal Insurance Administrator any appropriate 
        State insurance regulatory authority, which shall include the 
        amount of assistance provided or denied and the reason for any 
        such denial.
    ``(d) Liquidity Assistance Defined.--For purposes of this section, 
the term `liquidity assistance' means, with respect to any insurance 
company--
            ``(1) any advance made by any Federal Reserve bank under 
        this Act to the insurance company; or
            ``(2) the discounting by any such bank under this Act of 
        any note, draft, bill, or other obligation issued, drawn, or 
        endorsed by the insurance company.
    ``(e) Regulations.--The Board shall prescribe such regulations as 
the Board may determine to be appropriate to carry out the purposes of 
this section.
    ``(f) Annual Report To Banking Committees.--The Board shall submit 
an annual report to the Committee on Banking, Finance and Urban Affairs 
of the House of Representatives and the Committee on Banking, Housing, 
and Urban Affairs of the Senate on any liquidity assistance provided by 
any Federal Reserve bank to any insurance company during the year 
covered by the report.''.

SEC. 306. REGULATIONS.

    The Administrator may issue any regulations the Administrator 
considers appropriate to carry out the duties of the Administrator 
under this title.

       TITLE IV--DISCLOSURE OF INSURANCE AVAILABILITY INFORMATION

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Insurance Disclosure Act''.

SEC. 402. FINDINGS AND CONSTRUCTION.

    (a) Findings.--The Congress finds that--
            (1) there are disparities in property and casualty 
        insurance coverage provided by some insurers between areas of 
        different incomes and racial composition;
            (2) such disparities adversely affect the affordability and 
        availability of insurance for consumers;
            (3) the lack of affordable and adequate insurance for 
        qualified consumers severely limits the ability of such 
        consumers to obtain credit for home, business, and automobile 
        purchases; and
            (4) disclosures of insurance activities of insurers would 
        benefit consumers and insurance regulators without imposing any 
        undue burden on insurers.
    (b) Construction.--Nothing in this title is intended to, nor shall 
it be construed to, encourage unsound underwriting practices.

SEC. 403. MAINTENANCE OF INFORMATION AND PUBLIC DISCLOSURE.

    (a) Designated Insurers.--Except as provided in section 404(e), 
each insurer designated under section 407(a), which sells a line of 
insurance designated under section 407(b) in a Metropolitan Statistical 
Area or Consolidated Metropolitan Statistical Area (both hereafter in 
this title referred to as an ``MSA'') designated by the Director of the 
Office of Management and Budget, shall compile and make available for 
each calendar year to the Federal Insurance Administrator (in 
accordance with section 406 and regulations of the Administrator) and 
to the public for inspection and copying at the home office or at a 
central depository established under section 405 and at least one 
branch office (if there is one) within such MSA--
            (1) the number and total coverage amount of insurance 
        policies by designated line which were issued in such MSA;
            (2) the number and total coverage amount of insurance 
        policies by designated line for which the insurer received a 
        completed application in such MSA;
            (3) the number and total coverage amount of insurance 
        policies by designated line for which the insurer received a 
        completed application and which were not issued, in such MSA;
            (4) the number and total coverage amount of insurance 
        policies by designated line which were renewed in such MSA;
            (5) the number and total coverage amount of insurance 
        policies by designated line for which the insurer received a 
        completed application for renewal in such MSA;
            (6) the number and total coverage amount of insurance 
        policies by designated line for which the insurer received a 
        completed application for renewal and which were not renewed, 
        in such MSA;
            (7) the number and total coverage amount of insurance 
        policies by designated line which were canceled by the insurer, 
        in such MSA;
            (8) the number of agents of such insurer whose principal 
        place of business is located in such MSA and the number within 
        each census tract or county, as applicable, in such MSA and 
        with respect to each such agent, whether such agent is an 
        employee, independent contractor working exclusively for such 
        insurer, or an independent contractor appointed to represent 
        such insurer on a nonexclusive basis;
            (9) the number of agents of such insurer whose principal 
        place of business was located in such MSA but which was 
        relocated outside such MSA or whose agency was terminated, and 
        the number of such agents for each census tract or county, as 
        applicable, in such MSA; and
            (10) the number of agents of such insurer whose principal 
        place of business was established at a location in such MSA and 
        the number of such agents for each census tract or county, as 
        applicable, in such MSA.
    (b) Nondesignated Insurers.--Except as provided in section 404(e), 
every insurer which sells an insurance policy in a designated line of 
insurance in an MSA and which is not a designated insurer in such MSA 
shall report for each calendar year to the Administrator (in accordance 
with section 406 and regulations of the Administrator) the number of 
insurance policies in a designated line sold in such MSA on an 
annualized basis which adjusts for varying durations of insurance 
policies sold--
            (1) itemized by census tract for policies sold within any 
        county with a population of more than 30,000 within the MSA; or
            (2) by county for insurance policies sold within any other 
        county in such MSA.
Such information shall be made available to the public on a timetable 
determined by the Administrator but not later than September 1 of the 
calendar year following the calendar year for which the information is 
required to be reported.

SEC. 404. REQUIREMENTS.

    (a) Content.--The information required to be maintained and made 
available under section 403(a) shall--
            (1) be itemized in order to clearly and conspicuously 
        disclose the number and coverage amount for each line of 
        insurance for which information is required by--
                    (A) census tracts for insurance policies within any 
                county with a population of more than 30,000 within the 
                MSA; or
                    (B) county for insurance policies within any other 
                county within such MSA;
            (2) disclose for each designated line of insurance in an 
        MSA and, with respect to each such line, for each census tract 
        or county, as applicable, in the MSA--
                    (A) the total number of claims made which with 
                respect to property insurance shall be disaggregated by 
                the type and use of the property insured, which types 
                and uses shall include--
                            (i) properties consisting of 1 to 4 
                        dwelling units;
                            (ii) properties consisting of more than 4 
                        dwelling units;
                            (iii) owner-occupied properties;
                            (iv) rental properties; and
                            (v) vacant properties; and
                    (B) the total amount paid in claims which with 
                respect to property insurance shall be disaggregated by 
                the type and use of the property insured, which types 
                and uses shall include the types and uses described in 
                clauses (i) through (v) of subparagraph (A);
            (3) disclose the standards and criteria used in 
        underwriting each designated line of insurance; and
            (4) be made available to the public on a timetable 
        determined by the Administrator but not later than September 1 
        of the calendar year following the calendar year for which the 
        information is required to be made available.
    (b) Itemization of Data.--With respect to insurance and 
applications for which information is required to be maintained and 
made available under section 403(a), the following information shall be 
maintained and made available for each policy and each completed 
application:
            (1) The MSA for which such insurance is issued or applied 
        and within such MSA the census tract or county, as applicable, 
        for which such insurance is issued or requested.
            (2) The designated insurer who issued such insurance or to 
        whom the application was made.
            (3) The date of the issuance of such insurance.
            (4) The line of the insurance which is designated and any 
        subline or class of such insurance.
            (5) The type of insurance or policy form for which 
        applications are made and the types of insurance and policy 
        forms which are issued.
            (6) The amount of coverage provided under such insurance 
        and any applicable deductibles.
            (7) The amount of the premiums for such insurance.
            (8) The durations of such insurance.
            (9) The gender and racial characteristics of the applicants 
        for such insurance.
            (10) A notation if such insurance was issued in a voluntary 
        or residual market.
            (11) The date of, and reason for, any declination, 
        cancellation, or nonrenewal made for such insurance.
            (12) With respect to property insurance, the market value 
        of the property insured and the type and use of property 
        insured.
    (c) Period of Maintenance.--Any information required to be compiled 
and made available under section 403 shall be maintained and made 
available for a period of 5 years after the close of the first year 
during which such information is required to be maintained and made 
available.
    (d) Format for Disclosures.--Subject to section 405, the 
Administrator shall prescribe a standard format for making information 
available as required by section 403. Such format shall encourage the 
submission of information in a form readable by a computer.
    (e) Exemptions.--
            (1) Secretarial action.--The Administrator may by 
        regulation exempt from the requirements of section 403 any 
        insurer within any State if the Administrator determines that 
        under the laws of such State that such insurer is subject to 
        disclosure requirements on a census tract basis substantially 
        similar to those of section 403 and that such law contains 
        adequate provisions for enforcement.
            (2) United states program.--Reporting shall not be required 
        under section 403 with respect to insurance provided by a 
        program underwritten or administered by the United States, 
        including the national flood insurance program under the 
        National Flood Insurance Act of 1968, the program for insurance 
        against burglary and theft under title XII of the National 
        Housing Act, and mortgage insurance under the National Housing 
        Act.
    (f) Completed Application.--For purposes of section 403 and this 
section, the Administrator shall define ``completed applications'' to--
            (1) ensure that the disclosure required by such sections 
        appropriately reflects the characteristics of the applicants 
        interested in purchasing insurance in an MSA; and
            (2) prevent insurers from evading the intent of such 
        sections through practices designed to discourage applicants 
        from completing applications.

SEC. 405. ACCESS SYSTEM.

    (a) In General.--The Administrator shall implement a system to 
facilitate access to information required to be maintained and made 
available under section 403. Such system shall also include 
arrangements for a publicly accessible central depository of 
information in each MSA, as provided under subsection (b), and for a 
telephone number which can be used by the public, at cost, to request 
such information. Written statements containing such information shall 
be made available to the public for inspection and copying at such 
central depository of information for all designated insurers within 
such MSA. The Administrator shall make copies of such statements 
available in forms readable by widely used personal computers. The 
Administrator may charge a fee for such information, which may not 
exceed the amount, determined by the Administrator, that is equal to 
the cost of producing the computer statements.
    (b) Use of Home Mortgage Disclosure Act Depositories.--To the 
extent practicable, the central depositories referred to in subsection 
(a) shall be the central depositories established under section 304(f) 
of the Home Mortgage Disclosure Act of 1975. The Federal Financial 
Institutions Examination Council shall consult with the Administrator 
regarding the use of such depositories and shall provide for the use of 
such depositories to the extent agreed to by such Council and the 
Administrator.

SEC. 406. SUBMISSION TO ADMINISTRATOR.

    The information referred to in section 403 shall be submitted to 
the Administrator. The Administrator shall develop regulations 
prescribing--
            (1) the format for making such information available;
            (2) the method for submission of such information; and
            (3) the procedures for making the information available to 
        the public.
Any reporting insurer may submit in writing to the Administrator such 
additional data or explanations as it deems relevant to the decision by 
such insurer to sell insurance.

SEC. 407. DESIGNATIONS.

    (a) Designation of Insurers.--For each MSA, the Administrator shall 
take the following actions:
            (1) The Administrator shall annually designate the insurers 
        transacting insurance business in such MSA for which reporting 
        is required under section 403. At a minimum, the Administrator 
        shall annually designate the 25 insurers in such MSA having the 
        largest premium volume in the designated lines of insurance.
            (2) The Administrator shall also annually designate any 
        entity providing insurance in a designated line of insurance as 
        part of a residual market established by State law.
            (3) The Administrator may designate additional insurers on 
        the basis of such criteria as the Administrator may by 
        regulation develop. Such a regulation shall be issued in 
        accordance with section 553 of title 5, United States Code. In 
        considering whether to designate additional insurers, the 
        Administrator shall ensure that--
                    (A) insurers who specialize in selling insurance in 
                urban areas, including surplus lines insurers, are 
                specifically considered for designation notwithstanding 
                their premium volume; and
                    (B) insurers representing at least 90 percent of 
                the premium volume in the designated lines of insurance 
                are designated in such MSA.
    (b) Designation of Lines of Insurance.--For each MSA, the 
Administrator shall designate the lines of insurance sold in such MSA 
for which reporting is required under section 403. At a minimum, the 
Administrator shall annually designate private mortgage insurance and 
the following lines of property and casualty insurance:
            (1) Private passenger automobile insurance (including 
        appropriate sublines and classes).
            (2) Property insurance which does not cover commercial 
        property (including homeowners, fire, burglary and theft, and 
        other lines, and appropriate sublines and classes and related 
        coverages such as coverage of property contents and property 
        insured at full replacement value or market value).
            (3) Commercial insurance for small business.
The Administrator may designate additional lines of insurance on the 
basis of such criteria as the Administrator may by regulation develop. 
Such a regulation shall be issued in accordance with section 553 of 
title 5, United States Code. For purposes of this title, the 
designation of a line of insurance includes a designation of a subline 
or class of insurance.
    (c) Timing of Designations.--The Administrator shall make the 
annual designations required by subsections (a) and (b) no later than 
September 1 of the year preceding the year for which reporting is 
required under section 403. The Administrator shall notify persons 
involved in the designations no later than the October 1 which follows 
the designation.
    (d) Obtaining Information.--The Administrator may obtain from 
insurers such information as the Administrator may require to make 
designations under this section.

SEC. 408. DISCLOSURES TO REJECTED APPLICANTS.

    (a) In General.--Except as provided in subsection (e), the 
Administrator shall, by regulations issued under section 553 of title 
5, United States Code--
            (1) require insurers to provide to each applicant for 
        insurance in a designated line--
                    (A) reasons for denying an application for such 
                insurance or for canceling or not renewing a policy in 
                force; and
                    (B) actions the applicant may take to qualify for 
                such insurance; and
            (2) restrict the use insurers may make of information 
        relating to--
                    (A) adverse underwriting decisions; or
                    (B) insurance coverage in a residual market.
    (b) Model Acts.--In issuing regulations under subsection (a), the 
Administrator shall consider relevant portions of model acts developed 
by the National Association of Insurance Commissioners.
    (c) Enforcement.--The Administrator may delegate to the States the 
authority to enforce the requirements of regulations issued under 
subsection (a).
    (d) Preemption.--Subsection (a) is not to be construed to preempt 
any State from imposing on insurers requirements of the type stated in 
such subsection, including requirements which are more stringent or 
more comprehensive.
    (e) Exemption.--A regulation issued under subsection (a) may not 
apply to insurance provided under a program underwritten or 
administered by the United States, including the national flood 
insurance program under the National Flood Insurance Act of 1968, the 
program for insurance against burglary and theft under title XII of the 
National Housing Act, and mortgage insurance under the National Housing 
Act.
    (f) Definition.--For purposes of subsection (a)(2)(A), an adverse 
underwriting decision means any of the following actions with respect 
to insurance transactions involving insurance coverage which is 
individually underwritten:
            (1) A declination of insurance coverage.
            (2) A termination of insurance coverage.
            (3) Failure of an agent to apply for insurance coverage 
        with a specific insurance entity which the agent represents and 
        which is requested by the applicant.
            (4) In the case of property or casualty insurance 
        coverage--
                    (A) placement by an insurance entity or agent of a 
                risk with a residual market mechanism, an unauthorized 
                insurer, or an insurance entity which specializes in 
                substandard risks; or
                    (B) the charging of higher rates on the basis of 
                information which differs from that which the applicant 
                or policyholder furnished.

SEC. 409. TERMINATION OF AGENTS.

    (a) Regulations.--Except as provided in subsection (d), the 
Administrator shall, by regulation issued under section 553 of title 5, 
United States Code, ensure that the practices of insurers in 
terminating agents who handle private mortgage insurance or property or 
casualty insurance do not result in an inappropriate effect on the 
availability or affordability of insurance from such insurers. Such 
regulations shall specifically ensure that such practices do not result 
in unfair discrimination against agents as a result of their geographic 
locations or of the geographic locations of their clients. Regulations 
under this subsection shall be stated in terms of minimum standards.
    (b) Preemption.--Subsection (a) may not be construed to preempt any 
State from imposing on insurers requirements of the type stated in such 
subsection, including requirements which are more stringent or more 
comprehensive.
    (c) Enforcement.--The Administrator may delegate to the States the 
enforcement of such regulations.
    (d) Exemption.--A regulation issued under subsection (a) may not 
apply to insurance provided under a program underwritten or 
administered by the United States, including the national flood 
insurance program under the National Flood Insurance Act of 1968, the 
program for insurance against burglary and theft under title XII of the 
National Housing Act, and mortgage insurance under the National Housing 
Act.

SEC. 410. IMPLEMENTATION.

    (a) In General.--The Administrator shall prescribe such regulations 
as may be necessary to carry out sections 403 through 406. Such 
regulations may contain such classifications, differentiations, or 
other provisions, and may provide for such adjustments and exceptions 
for any class of transactions, as in the judgment of the Administrator 
are necessary and proper to effectuate the purposes of such section and 
to prevent circumvention or evasion thereof or to facilitate compliance 
therewith.
    (b) Burdens.--In prescribing regulations under subsection (a), the 
Administrator shall take into consideration the administrative, 
paperwork, and other burdens on insurance agents, including independent 
insurance agents, involved in complying with the requirements of 
sections 403 through 406 and shall minimize the burdens imposed by such 
requirements with respect to such agents.

SEC. 411. IMPROVED METHODS.

    The Administrator shall develop, or assist in the improvement of, 
methods of matching addresses and census tracts to facilitate 
compliance by insurers, in as economical a manner as possible, with the 
requirements of this title.

SEC. 412. COMPILATION OF AGGREGATE DATA.

    (a) Scope of Data and Tables.--The Administrator shall compile each 
year, for each MSA, aggregate data by census tract for all insurers who 
are subject to section 403 or who are exempt from section 403 under the 
provisions of section 404(e)(1) of such section. The Administrator 
shall also produce tables indicating, for each MSA, aggregate insurance 
underwriting patterns for various categories of census tracts grouped 
according to location, age of property, income level, and racial 
characteristics.
    (b) Availability to Public.--The data compiled and the tables 
produced pursuant to subsection (a) shall be made available to the 
public on a timetable determined by the Administrator but not later 
than December 1 of the year following the calendar year on which the 
data and tables are based. The data shall be made available using the 
system implemented under section 405, in the forms required under such 
section, and subject to the provisions of such section.

SEC. 413. TESTERS.

    The Administrator may utilize employees and officers of the Federal 
Insurance Administration and may provide advice and technical 
assistance to State and local government agencies and public and 
private entities (including nonprofit organizations), to develop, 
implement, carry out, or coordinate programs or activities designed 
to--
            (1) prevent or eliminate discriminatory insurance 
        practices; or
            (2) obtain enforcement of Federal and State laws 
        prohibiting discriminatory insurance practices.

SEC. 414. REPORT.

    The Administrator shall report to the Committee on Banking, Finance 
and Urban Affairs of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate on the implementation 
of this title, any activities carried out pursuant to section 413, and 
shall make recommendations to such committees on such additional 
legislation as the Administrator deems appropriate to carry out this 
title.

SEC. 415. ENFORCEMENT.

    (a) Civil Penalties.--An insurer who does not comply with the 
requirements of sections 403 through 406, or a regulation issued under 
section 408 or 409, shall be subject to a civil penalty of not to 
exceed $5,000 for each day during which such violation continues.
    (b) Injunction.--The district courts of the United States shall 
have jurisdiction over a petition of the Administrator to enjoin an 
insurer from actions which are in violation of the requirements of 
sections 403 through 406 or of a regulation issued under section 408 or 
409.

SEC. 416. RELATION TO STATE LAWS.

    This title does not annul, alter, affect, or exempt the obligation 
of any insurer subject to this title to comply with the laws of any 
State or subdivision thereof with respect to public disclosure and 
recordkeeping.

SEC. 417. DEFINITIONS.

    For purposes of this title:
            (1) The term ``Administrator'' means the Federal Insurance 
        Administrator.
            (2) The term ``commercial insurance'' means any line of 
        property and casualty insurance, except private passenger 
        automobile and homeowner's insurance.
            (3) The term ``designated insurer'' means an insured 
        designated by the Administrator under section 407(a).
            (4) The term ``designated line'' means a line of insurance 
        designated by the Administrator under section 407(b).
            (5) The term ``insurer'' means any corporation, 
        association, society, order, firm, company, partnership, 
        individual, or aggregation of individuals which is subject to 
        examination or supervision by any State insurance regulator, or 
        which is doing or represents an insurance business.
            (6) The term ``private mortgage insurance'' means insurance 
        against the nonpayment of, or default on, a mortgage or loan 
        for residential or commercial property, except that such term 
        does not include mortgage insurance made available under the 
        National Housing Act.
            (7) The term ``property and casualty insurance'' means 
        insurance against loss of or damage to property, insurance 
        against loss of income or extra expense incurred because of 
        loss of, or damage to, property, and insurance against third 
        party liability claims caused by negligence or imposed by 
        statute or contract.
            (8) The term ``residual market'' means an assigned risk 
        plan, joint underwriting association, or any similar mechanism 
        designed to make insurance available to those unable to obtain 
        it in the voluntary market.
            (9) The term ``State'' means any State, the District of 
        Columbia, the Commonwealth of Puerto Rico, the Northern Mariana 
        Islands, the Virgin Islands, American Samoa, and the Trust 
        Territory of the Pacific Islands.

SEC. 418. EFFECTIVE DATE.

    The requirements of this title shall take effect with respect to 
calendar year 1994.

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