[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3339 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 3339
To provide for public access to information regarding the availability
of insurance for small businesses, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 19, 2001
Mr. Gutierrez (for himself, Mr. LaFalce, Mr. Filner, Mrs. Jones of
Ohio, Mr. Davis of Illinois, Mr. Rush, Mr. Lipinski, Ms. Carson of
Indiana, Mr. Clay, Mr. McGovern, Ms. Schakowsky, Mr. Blagojevich, Mr.
Owens, and Mrs. Christensen) introduced the following bill; which was
referred to the Committee on Financial Services, and in addition to the
Committee on Small Business, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as
fall within the jurisidiction of the committee concerned
_______________________________________________________________________
A BILL
To provide for public access to information regarding the availability
of insurance for small businesses, 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 ``Small Business Insurance Data
Disclosure Act''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) there are 25,500,000 small businesses in the United
States, representing more than 99 percent of the employers in
the Nation;
(2) small business employ 51 percent of the private sector
workforce and create more than 80 percent of all new jobs in
the United States;
(3) there were 612,400 new employer firms in the United
States in 2000, an increase of 4.3 percent from 1999;
(4) small business bankruptcies decreased by 14.8 percent
between 1999 and 2000 to the lowest level in more than 20
years;
(5) the business failure index has decreased by 1.7 percent
since 1999;
(6) small businesses are the most vulnerable market sector
in times of economic uncertainty or downturn and experience
difficulties with making loan payments on existing debts,
paying employees, paying vendors, purchasing materials,
supplies, and inventory, paying rent, mortgage, insurance
premiums, and other operating expenses, and securing financing
for their businesses;
(7) there are disparities in the insurance coverage
provided by some insurers between areas having different
incomes and racial composition;
(8) such disparities in affordability and availability of
insurance severely limit the ability of entrepreneurs to obtain
credit for starting, growing, or expanding small businesses;
and
(9) the lack of affordable and adequate small business
insurance severely curtails the establishment and growth of
such businesses.
(b) Purposes.--The purposes of this Act are--
(1) to enhance the availability and affordability of
insurance products and services to all small businesses of all
economic circumstances and in all geographic areas;
(2) to enhance the ability of insurance companies to meet
the needs of all small businesses, including small businesses
located in underserved communities and minority- and women-
owned small businesses;
(3) to establish a nationwide database for determining the
availability, affordability, and adequacy of insurance coverage
for small businesses;
(4) to facilitate the enforcement of Federal and State laws
that prohibit illegally discriminatory insurance practices; and
(5) to determine whether the extent and characteristics of
small business insurance availability, affordability, and
coverage require public officials to take any actions--
(A) to remedy redlining or other illegally or
unfairly discriminatory insurance practices; or
(B) regarding areas underserved by insurers, with
respect to small business insurance.
SEC. 3. ESTABLISHMENT OF GENERAL REQUIREMENTS TO SUBMIT SMALL BUSINESS
INSURANCE INFORMATION.
(a) In General.--The Administrator of the Small Business
Administration shall, by regulation, establish requirements for
insurers to compile and submit information to the Administrator for
each annual reporting period, in accordance with this Act.
(b) Consultation.--In establishing the requirements for the
submission of information under this Act, the Administrator shall
consult with Federal agencies having appropriate expertise, the
National Association of Insurance Commissioners, State insurance
regulators, statistical agents, representatives of small businesses,
representatives of insurance agents (including minority insurance
agents), representatives of property and casualty insurers that provide
insurance for small businesses, and community, consumer, and civil
rights organizations, as appropriate.
(c) Health and Life Insurance Lines Not Included.--This Act shall
not apply to life or health lines of insurance or to insurers that
provide only life or health insurance products.
SEC. 4. REPORTING OF SMALL BUSINESS INSURANCE INFORMATION.
(a) In General.--The requirements established pursuant to section 3
to carry out this section shall--
(1) be designed to ensure that information is submitted and
compiled under this section as may be necessary to permit
analysis and comparison of the availability and affordability
of insurance coverage and the quality or type of insurance
coverage for small businesses, by census tract (including low-
and moderate-income neighborhoods), location of the small
business, and the race and gender of small business owners; and
(2) specify the data elements required to be reported under
this section and require uniformity in the definitions of the
data elements.
(b) Insurers.--
(1) Aggregate information.--The regulations issued under
section 3 shall require that each insurer for a designated line
of insurance under section 8(a)(1) shall compile and submit to
the Administrator, for each annual reporting period--
(A) the total number of policies issued in such
line, total exposures covered by such policies, and
total amount of premiums for such policies, by
designated line and by census tract, including low- and
moderate-income neighborhoods, in which the insured
risk is located;
(B) the total number of cancellations and
nonrenewals (expressed in terms of policies or
exposures, as determined by the Administrator), by
designated line and by census tract, including low- and
moderate-income neighborhoods, in which the insured
risk is located; and
(C) for such designated line of insurance,
information that will enable the Administrator to
assess the aggregate loss experience for the insurer,
by census tract, including low- and moderate-income
neighborhoods, in which the insured risk is located.
(2) Specification of information for itemized disclosure.--
(A) In general.--The regulations issued under
section 3 regarding annual reporting requirements for
insurers for a designated line of insurance under
section 8(a)(1) shall, with respect to policies issued
under the designated line or exposure units covered by
such policies, as determined by the Administrator--
(i) specify the data elements that shall be
submitted;
(ii) provide for the submission of
information on an individual insurer basis;
(iii) provide for the submission of the
information with the least burden on insurers,
particularly small insurers, and insurance
agents;
(iv) take into account existing statistical
reporting systems in the insurance industry;
(v) require reporting by census tract,
including low- and moderate-income
neighborhoods, in which the insured risk is
located;
(vi) provide for the submission of
information that--
(I) identifies the designated line,
and subline or coverage type; and
(II) where applicable,
distinguishes between the type of
policy under each such subline or
coverage type that provides full
replacement cost and all other bases
for computing claims, such as actual
cash value and fair market value;
(vii) provide for the submission of
information that distinguishes policies written
in a residual market from policies written in
the voluntary market;
(viii) specify--
(I) whether information shall be
submitted on the basis of policy or
exposure unit; and
(II) whether information, when
submitted, shall be aggregated by like
policyholders with like policies,
except that the Administrator shall not
permit such aggregation if it will
adversely affect the accuracy of the
information reported;
(ix) in addition to reporting approvals,
provide for the submission of information
regarding the number of denials, cancellations,
and nonrenewals of policies under the
designated line by census tract in which the
insured risk is located, by race, gender, and
revenue size of the small business
policyholder, and by whether the policy was
issued in a voluntary or residual market; and
(x) provide for the submission of
information on the racial characteristics,
gender, and revenue size of the small business
policyholders at the level of detail comparable
to that required by the Home Mortgage
Disclosure Act of 1975 (and the regulations
issued thereunder).
(B) Rules regarding obtaining racial information.--
(i) Writing requirement.--The information
specified in subparagraph (A)(x) relating to
the racial characteristics of applicants for,
and policyholders of, insurance shall be
obtained only in accordance with the procedures
for requesting and recording racial information
established in Regulation C of the Board of
Governors of the Federal Reserve System under
the Home Mortgage Disclosure Act of 1975, as in
effect on the date of the enactment of this
Act.
(ii) Notice of voluntary nature of
question.--Any such written question shall
clearly indicate that a response to the
question is voluntary on the part of the
applicant or policyholder, but encouraged, and
that the information is being requested by the
Federal Government to monitor the availability
and affordability of insurance.
(iii) Provision of information by agent or
insurer.--If an applicant for, or policyholder
of, insurance declines to provide such
information, the agent or insurer for such
insurance may provide such information.
(3) Rule for reporting by insurers.--An insurer for a
designated line shall submit information required under
paragraph (1) and information required pursuant to paragraph
(2), for risks insured under such line that are located within
each census tract any part of which is located in a State for
which the insurer is offering the designated line.
SEC. 5. WAIVER OF REPORTING REQUIREMENTS.
(a) Waiver for States Collecting Equivalent Information.--
(1) Authority.--Subject to the requirements under this
section, the Administrator shall provide, by regulation, for
the waiver of the applicability of the provisions of section 4
for each insurer transacting business within a State referred
to in paragraph (2), but only with respect to information
required to be submitted under such sections that relates to
insured risks located in the State.
(2) Requirements.--The Administrator may make a waiver
pursuant to paragraph (1) only with respect to a State that the
Administrator determines has in effect a law or other
requirement that--
(A) requires insurers to submit to the State
information that is at least the same or equivalent to
the information that is required to be submitted to the
Administrator pursuant to section 4;
(B) provides for adequate enforcement of such law
or other requirements; and
(C) provides for the same annual reporting period
used by the Administrator under this Act and for
submission of the information to the Administrator in a
timely fashion, as determined by the Administrator.
(3) Duration.--A waiver pursuant to paragraph (1) may
remain in effect only during the period for which the State law
or other requirement required under paragraph (2) remains in
effect.
(b) Multiple-State Areas.--In the case of any census tract that
contains area within--
(1) any State for which a waiver has been made pursuant to
subsection (a), and
(2) any State for which such a waiver has not been made,
the provisions of this Act requiring submission of information to the
Administrator regarding such tract or area shall be considered to apply
only to the portion that is located within the State for which such a
waiver has not been made.
(c) Authority for Administrator To Obtain Information Directly From
Insurers.--If the State for which a waiver has been made pursuant to
subsection (a) does not submit to the Administrator the information
required under subsection (a)(2)(A) or submits information that is not
complete, the Administrator shall require the insurers transacting
business within the State to submit such information directly to the
Administrator.
SEC. 6. SUBMISSION OF INFORMATION TO ADMINISTRATOR AND MAINTENANCE OF
INFORMATION.
(a) Period of Maintenance.--Each insurer required by this Act to
compile and submit information to the Administrator shall maintain such
information for the 3-year period beginning upon the conclusion of the
annual reporting period to which such information relates. The
Administrator shall maintain any information submitted to the
Administrator for such period as the Administrator considers
appropriate and feasible to carry out the purposes of this Act and to
allow for historical analysis and comparison of the information.
(b) Submission.--The Administrator shall issue regulations
prescribing a standard schedule (taking into consideration the
provisions of section 7(a)), format, and method for submitting
information under this Act to the Administrator. The format and method
of submitting the information shall facilitate and encourage the
submission in a form readable by a computer. Any insurer submitting
information to the Administrator may submit in writing to the
Administrator any additional information or explanations that the
insurer considers relevant to the decision by the insurer to sell
insurance.
SEC. 7. AVAILABILITY AND ACCESS SYSTEM.
(a) Availability to Public.--
(1) In general.--The Administrator shall maintain and make
available to the public, in accordance with the requirements of
this section, any information submitted to the Administrator
under this Act and any information compiled by the
Administrator under this Act.
(2) Timing.--The Administrator shall make such information
publicly available on a timetable determined by the
Administrator, but not later than 9 months after the conclusion
of the annual reporting period to which the information
relates, except that such information shall not be made
available to the public until it is available in its entirety
unless not all the information required to be reported is
available by such date.
(b) Public Access System.--
(1) Implementation.--The Administrator shall implement a
system to facilitate access to any information required to be
made available to the public under this Act.
(2) Bases of availability.--The system shall provide access
in the following manners:
(A) Access to itemized information.--With respect
to information submitted under by insurers, on the
basis of the insurer submitting the information, on the
basis of the census tract, including low- and moderate-
income neighborhoods, and on any other basis the
Administrator considers feasible and appropriate.
(B) Access to aggregate information.--With respect
to aggregate information compiled by the Administrator,
on the basis of (i) the insurer submitting the
information, and (ii) the census tract, including low-
and moderate-income neighborhoods, and on any other
basis the Administrator considers feasible and
appropriate.
(c) Protections Regarding Loss Information.--
(1) Prohibition of disclosure of loss information.--
Notwithstanding any other provision of this Act, the
Administrator may not make available to the public or otherwise
disclose any information submitted under this Act regarding the
amount or number of claims paid by any insurer, the amount of
losses of any insurer, or the loss experience for any insurer,
except (A) in the form of a loss ratio (expressing the
relationship of claims paid to premiums) made available or
disclosed in compliance with the provisions of paragraph (2),
or (B) as provided in paragraph (3).
(2) Protection of identity of insurer.--In making available
to the public or otherwise disclosing a loss ratio for an
insurer--
(A) the Administrator may not identify the insurer
to which the loss ratio relates; and
(B) the Administrator may disclose the loss ratio
only in a manner that does not allow any party to
determine the identity of the specific insurer to which
the loss ratio relates, except parties having access to
information under paragraph (3).
(3) Confidentiality of information disclosed to
governmental agencies.--The Administrator may make information
referred to in paragraph (1) and the identity of the specific
insurer to which such information relates available to any
Federal entity and any State agency responsible for regulating
insurance in a State and may otherwise disclose such information to any
such entity or agency, but only to the extent such entity or agency
agrees not to make any such information available or disclose such
information to any other person.
SEC. 8. DESIGNATIONS.
(a) Designation of Lines of Insurance.--
(1) In general.--The Administrator shall, by regulation,
designate as designated lines for purposes of this Act any
lines of insurance for small businesses and any sublines and
coverage types of small business insurance that the
Administrator considers appropriate to determine and compare
the availability, affordability, and type of coverage in such
lines among applicable regions.
(2) Report.--At any time the Administrator determines that
any line of insurance for small businesses not described in
paragraph (1) should be a designated line because disparities
in coverage provided under such line exist among geographic
areas having different income levels or racial composition, the
Administrator shall submit a report recommending designating
such line of insurance as a designated line for purposes of
this Act to the Committee on Financial Services of the House of
Representatives and the appropriate committees of the Senate.
(3) Duration.--
(A) In general.--Except as provided in subparagraph
(B), the Administrator shall make the designations
under this subsection once every 5 years, by
regulation, and each line and subline or coverage type
designated under such regulations shall be designated
for each of the first 5 successive annual reporting
periods occurring after issuance of the regulations.
(B) Alteration.--During any 5-year period referred
to in subparagraph (A) in which designations are in
effect, the Administrator may amend or revise the
designated lines, sublines, and coverage types only by
regulation and only in accordance with the requirements
of this subsection. Such regulations amending or
revising designations shall apply only to annual
reporting periods beginning after the expiration of the
6-month period beginning on the date of issuance of the
regulations.
(b) Timing of Designations.--The Administrator shall make the
designations required by subsection (a)(3)(A) and notify interested
parties during the 6-month period ending 6 months before the
commencement of the first annual reporting period to which such
designations apply.
(c) Obtaining Information.--The Administrator may require insurers
to submit to the Administrator such information as the Administrator
considers necessary to make designations specifically required under
this Act. The Administrator may not require insurers to submit any
information under this subsection that relates to any line of small
business insurance not specifically authorized to be designated
pursuant to this Act or that is to be used solely for the purpose of a
report under subsection (a)(2).
SEC. 9. ENFORCEMENT.
(a) Civil Penalties.--Any insurer who is determined by the
Administrator, after providing opportunity for a hearing on the record,
to have violated any requirement pursuant to this Act shall be subject
to a civil penalty of not to exceed $5,000 for each day during which
such violation continues.
(b) Injunction.--The Administrator may bring an action in an
appropriate United States district court for appropriate declaratory
and injunctive relief against any insurer who violates the requirements
referred to in subsection (a).
(c) Insurer Liability.--An insurer shall be responsible under
subsections (a) and (b) for any violation of a statistical agent acting
on behalf of the insurer.
SEC. 10. EXEMPTION AND RELATION TO STATE LAWS.
(a) Exemption for United States Programs.--Reporting shall not be
required under this Act with respect to insurance provided by any
program underwritten or administered by the United States.
(b) Relation to State Laws.--This Act shall not be construed as
annulling, altering, or affecting the laws of any State or any
political subdivision of a State relating to public disclosure,
submission of information, and recordkeeping or exempting any insurer
subject to this Act from any obligation under, or an obligation to
comply with, any such law.
SEC. 11. SURVEY OF AVAILABILITY AND AFFORDABILITY OF SMALL BUSINESS
PROPERTY AND CASUALTY INSURANCE.
(a) Survey.--The Administrator of the Small Business Administration
shall, through the Office of Advocacy of such Administration, conduct a
survey of a statistically representative sample of small business
owners regarding their experiences in applying for, obtaining, and
being refused small business insurance, which shall--
(1) obtain information about coverage levels, including
coverage for acts of terrorism and acts of nature, and average
annual premiums; and
(2) involve a sample size that is large enough to reach
meaningful conclusions about the availability and affordability
of insurance by gender, race, and ethnicity of the small
business owner, by revenue amount of the small business, and by
census tract location of the small business.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Administrator of the Small Business Administration
shall complete the survey under subsection (a) and submit a report to
the Congress regarding the results of the survey, which shall include--
(1) identification and an analysis of any trends in the
availability and affordability of small business insurance
products or services, particularly with respect to small
businesses in low-income communities, minority-owned small
businesses, and women-owned small businesses;
(2) identification and an analysis of any barriers to the
availability and affordability of insurance products and
services, particularly with respect to small businesses in low-
income communities, minority-owned small businesses, and women-owned
small businesses; and
(3) any recommendations to increase access to affordable
insurance products and services by small business owners,
including to small businesses in low-income communities,
minority-owned small businesses, and women-owned small
businesses.
SEC. 12. SOUND UNDERWRITING PRACTICES.
This Act may not be construed to encourage or authorize unsound
underwriting practices.
SEC. 13. REGULATIONS.
(a) Authorization.--
(1) In general.--The Administrator shall issue any
regulations required under this Act and any other regulations
that may be necessary to carry out this Act.
(2) Substantive regulations.--The regulations shall be
issued in accordance with the procedures under section 553 of
title 5, United States Code, for substantive regulations.
(3) Effective date.--Except as otherwise provided in this
Act, such final regulations shall be issued before the end of
the 18-month period beginning on the date of the enactment of
this Act.
(b) Burdens.--In prescribing such regulations, 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 this Act and shall
minimize the burdens imposed by such requirements with respect to such
agents.
SEC. 14. DEFINITIONS.
For purposes of this Act, the following definitions shall apply:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Small Business Administration.
(2) Agent.--The term ``agent''--
(A) means, with respect to an insurer, an agent
licensed by a State who sells property and casualty
insurance; and
(B) includes agents who are employees of the
insurer, agents who are independent contractors working
exclusively for the insurer, and agents who are
independent contractors appointed to represent the
insurer on a nonexclusive basis.
(3) Designated line.--The term ``designated line'' means a
line of insurance or bid, performance, and payment bonds
designated by the Administrator under section 8(a).
(4) Exposures.--The term ``exposures'' means, for purposes
of section 4, with respect to an insurance policy, an
expression of an exposure unit covered under the policy
compared to the duration of the policy (pursuant to standards
established by the Administrator for uniform reporting of
exposures).
(5) Exposure units.--The term ``exposure units'' means, for
purposes of section 4, a small business covered under an
insurance policy for small business fire and allied lines
coverage.
(6) Insurance.--The term ``insurance'' means property and
casualty insurance. Such term includes primary insurance,
surplus lines insurance, and any other arrangement for the
shifting and distributing of risks that is determined to be
insurance under the law of any State in which the insurer or
insurer group engages in an insurance business.
(7) Insurer.--The term ``insurer''--
(A) means any corporation, association, society,
order, firm, company, mutual, partnership, individual,
aggregation of individuals, or any other legal entity
that is authorized to transact the business of property
or casualty insurance in any State or that is engaged
in a property or casualty insurance business; and
(B) does not include an individual or entity which
represents an insurer as agent solely for the purpose
of selling or which represents a consumer as a broker
solely for the purpose of buying insurance.
(8) Issued.--The term ``issued'' means, with respect to an
insurance policy, newly issued or renewed.
(9) Joint underwriting association.--The term ``joint
underwriting association'' means an unincorporated association
of insurers established to provide a particular form of
insurance to the public.
(10) Minority.--The term ``minority'' has the meaning given
such term in section 1204(c) of the Financial Institutions
Reform, Recovery, and Enhancement Act of 1989 (12 U.S.C. 1811
note).
(11) Minority-owned small business.--The term ``minority-
owned small business'' means a small business--
(A) more than 50 percent of the ownership or
control of which is held by one or more minority
individuals; and
(B) more than 50 percent of the net profits or loss
of which accrues to one or more minority individuals.
(12) Property and casualty insurance.--The term ``property
and casualty insurance''--
(A) 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; and
(B) does not include workers' compensation,
professional liability, or title insurance.
(13) Residual market.--The term ``residual market''--
(A) 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; and
(B) includes each statewide plan under part A of
title XII of the National Housing Act to assure fair
access to insurance requirements.
(14) Small business.--The term ``small business'' has the
meaning given such term in section 3 of the Small Business Act
(15 U.S.C. 632)
(15) State.--The term ``State'' means any State, the
District of Columbia, the Commonwealth of Puerto Rico, the
Northern Mariana Islands, the Virgin Islands, American Samoa,
and the Trust Territory of the Pacific Islands.
(16) Women-owned small business.--The term ``women-owned
small business'' means a small business--
(A) more than 50 percent of the ownership or
control of which is held by one or more women; and
(B) more than 50 percent of the net profits or loss
of which accrues to one or more women.
SEC. 15. ANNUAL REPORTING PERIOD.
(a) In General.--For purposes of this Act, the annual reporting
periods shall be the 12-month periods commencing in each calendar year
on the same day, which shall be selected under subsection (b) by the
Administrator.
(b) Selection.--Not later than the expiration of the 6-month period
beginning on the date of the enactment of this Act, the Administrator
shall, by regulation, select a day of the year upon which all annual
reporting periods shall commence. In determining such day, the
Administrator shall consider the reporting periods used for purposes of
State and other insurance statistical reporting systems, in order to
minimize the burdens on insurers.
SEC. 16. EFFECTIVE DATE.
The requirements of this Act relating to reporting of information
by insurers shall take effect with respect to the first annual
reporting period that begins more than 18 months after the date of the
enactment of this Act.
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