[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2753 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2753

To provide for public access to information regarding the availability 
                 of insurance, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 27, 1993

Mr. Foglietta introduced the following bill; which was referred jointly 
to the Committees on Banking, Finance and Urban Affairs and Energy and 
                                Commerce

_______________________________________________________________________

                                 A BILL


 
To provide for public access to information regarding the availability 
                 of insurance, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Insurance Anti-Redlining Act of 
1993''.

SEC. 2. 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 Act is intended to, nor shall it 
be construed to, encourage unsound underwriting practices.

SEC. 3. MAINTENANCE OF INFORMATION AND PUBLIC DISCLOSURE.

    (a) Designated Insurers.--Except as provided in section 4(e), each 
insurer designated under section 7(a)(2), which sells a line of 
insurance designated under section 7(a)(3) in a Metropolitan 
Statistical Area or Consolidated Metropolitan Statistical Area (both 
hereafter in this Act 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 Secretary of Commerce (in 
accordance with section 6 and regulations of the Secretary) and to the 
public for inspection and copying at the home office or at a central 
depository established under section 5 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 4(e), 
each 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 Secretary (in accordance 
with section 6 and regulations of the Secretary) 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 Secretary but not later than September 1 of the 
calendar year following the calendar year for which the information is 
required to be reported.

SEC. 4. REQUIREMENTS.

    (a) Content.--The information required to be maintained and made 
available under section 3(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 Secretary 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 3(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 racial characteristics and gender 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 3 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 5, the Secretary 
shall prescribe a standard format for making information available as 
required by section 3. Such format shall encourage the submission of 
information in a form readable by a computer.
    (e) Exemptions.--
            (1) Secretarial action.--The Secretary may by regulation 
        exempt from the requirements of section 3 any insurer within 
        any State if the Secretary 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 3 and that such law contains adequate 
        provisions for enforcement.
            (2) United states program.--Reporting shall not be required 
        under section 3 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 3 and this 
section, the Secretary 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. 5. ACCESS SYSTEM.

    (a) In General.--The Secretary shall implement a system to 
facilitate access to information required to be maintained and made 
available under section 3. 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 Secretary 
shall make copies of such statements available in forms readable by 
widely used personal computers. The Secretary may charge a fee for such 
information, which may not exceed the amount, determined by the 
Secretary, 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 Secretary 
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 
Secretary.

SEC. 6. SUBMISSION TO SECRETARY.

    The information referred to in section 3 shall be submitted to the 
Secretary. The Secretary 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 Secretary such 
additional data or explanations as it deems relevant to the decision by 
such insurer to sell insurance.

SEC. 7. DESIGNATIONS.

    (a) Designations by the Secretary.--
            (1) Designations of msa's.--The Secretary shall, on an 
        annual basis, designate the MSA's for which reporting is 
        required under section 3. At a minimum, the Secretary shall 
        designate the 150 MSA's having the largest population. The 
        Secretary may designate additional MSA's on the basis of such 
        criteria as the Secretary may by rule develop. Such a rule 
        shall be issued in accordance with section 553 of title 5, 
        United States Code.
            (2) Designation of insurers.--For each MSA designated under 
        paragraph (1), the Secretary shall take the following actions:
                    (A) The Secretary shall annually designate the 
                insurers transacting insurance business in such MSA for 
                which reporting is required under section 3. At a 
                minimum, the Secretary shall annually designate the 25 
                insurers in such MSA having the largest premium volume 
                in the designated lines of insurance.
                    (B) The Secretary shall also annually designate any 
                entity providing insurance in a designated line of 
                insurance as part of a residual market established by 
                State law.
                    (C) The Secretary may designate additional insurers 
                on the basis of such criteria as the Secretary may by 
                rule develop. Such a rule shall be issued in accordance 
                with section 553 of title 5, United States Code. In 
                considering whether to designate additional insurers, 
                the Secretary shall ensure that--
                            (i) insurers who specialize in selling 
                        insurance in urban areas, including surplus 
                        lines insurers, are specifically considered for 
                        designation notwithstanding their premium 
                        volume; and
                            (ii) that insurers representing at least 90 
                        percent of the premium volume in the designated 
                        lines of insurance are designated in such MSA.
            (3) Designation of lines of insurance.--For each MSA 
        designated under paragraph (1) the Secretary shall designate 
        the lines of property and casualty insurance sold in such MSA 
        for which reporting is required under section 3. At a minimum, 
        the Secretary shall annually designate--
                    (A) private passenger automobile insurance 
                (including appropriate sublines and classes);
                    (B) property insurance which does not cover 
                commercial property (including appropriate sublines and 
                classes and related coverages such as coverage of 
                property contents and property insured at cash value); 
                and
                    (C) commercial insurance for small business.
        The Secretary may designate additional lines of insurance on 
        the basis of such criteria as the Secretary may by rule 
        develop. Such a rule shall be issued in accordance with section 
        553 of title 5, United States Code. For purposes of this Act, 
        the designation of a line of insurance includes a designation 
        of a subline or class of insurance.
            (4) Timing of designations.--The Secretary shall make the 
        annual designations required by paragraphs (1), (2), and (3) no 
        later than September 1 of the year preceding the year for which 
        reporting is required under section 3. The Secretary shall 
        notify persons involved in the designations no later than the 
        October 1 which follows the designation.
    (b) Obtaining Information.--The Secretary may obtain from insurers 
such information as the Secretary may require to make designations 
under subsection (a).

SEC. 8. DISCLOSURES TO REJECTED APPLICANTS.

    (a) In General.--Except as provided in subsection (e), the 
Secretary 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 
Secretary shall consider relevant portions of model acts developed by 
the National Association of Insurance Commissioners.
    (c) Enforcement.--The Secretary 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. 9. TERMINATION OF AGENTS.

    (a) Regulations.--Except as provided in subsection (d), the 
Secretary 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 Secretary 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. 10. IMPLEMENTATION.

    (a) In General.--The Secretary shall prescribe such regulations as 
may be necessary to carry out sections 3 through 6. 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 Secretary 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 
Secretary shall take into consideration the administrative, paperwork, 
and other burdens on insurance agents, including independent insurance 
agents, involved in complying with the requirements of sections 3 
through 6 and shall minimize the burdens imposed by such requirements 
with respect to such agents.

SEC. 11. IMPROVED METHODS.

    The Secretary 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 Act.

SEC. 12. COMPILATION OF AGGREGATE DATA.

    (a) Scope of Data and Tables.--The Secretary shall compile each 
year, for each MSA, aggregate data by census tract for all insurers who 
are subject to section 3 or who are exempt from section 3 under the 
provisions of section 4(e)(1) of such section. The Secretary 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 Secretary 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 5, in the forms required under such section, 
and subject to the provisions of such section.

SEC. 13. TESTERS.

    The Secretary may utilize employees and officers of the Department 
of Commerce 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. 14. ENFORCEMENT.

    (a) Civil Penalties.--An insurer who does not comply with the 
requirements of sections 3 through 6, or a regulation issued under 
section 8 or 9, 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 Secretary to enjoin an insurer 
from actions which are in violation of the requirements of sections 3 
through 6 or of a regulation issued under section 8 or 9.

SEC. 15. RELATION TO STATE LAWS.

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

SEC. 16. DEFINITIONS.

    For purposes of this Act:
            (1) The term ``commercial insurance'' means any line of 
        property and casualty insurance, except private passenger 
        automobile and homeowner's insurance.
            (2) The term ``designated insurer'' means an insured 
        designated by the Secretary under section 7(a)(2).
            (3) The term ``designated line'' means a line of insurance 
        designated by the Secretary under section 7(a)(3).
            (4) 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.
            (5) 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.
            (6) 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.
            (7) 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.
            (8) The term ``Secretary'' means the Secretary of Commerce.
            (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. 17. EFFECTIVE DATE.

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

                                 <all>

HR 2753 IH----2