1.Short title; table of
contents
(a)This Act may be cited
as the National Insurance Act of
2006
.
(b)The table of
contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purpose.
Sec. 3. Definitions.
TITLE I—OFFICE OF NATIONAL INSURANCE
Subtitle A—Establishment of Office of National
Insurance
Sec. 1101. Establishment.
Sec. 1102. Commissioner of National Insurance.
Sec. 1103. Office personnel matters.
Sec. 1104. Division of Insurance Fraud.
Sec. 1105. Division of Consumer Affairs.
Sec. 1106. Insurance self-regulatory organizations.
Sec. 1107. Office of the Ombudsman.
Subtitle B—Supervision of National Insurers and National
Agencies
Sec. 1121. Examination of National Insurers and National
Agencies.
Sec. 1122. Examination fees and other assessments.
Sec. 1123. Disclosure of information.
Sec. 1124. Reporting requirement.
Sec. 1125. Relationship to State law.
Subtitle C—Enforcement of Federal Insurance Laws
Sec. 1141. National Insurer license suspension, restriction, or
revocation.
Sec. 1142. Suspension, restriction, or revocation of Federal
license of National Agencies and federally licensed insurance
producers.
Sec. 1143. Cease-and-desist proceedings.
Sec. 1144. Affirmative action to correct conditions resulting
from violations or conduct.
Sec. 1145. Suspension, removal, and prohibition
authority.
Sec. 1146. Suspension or prohibition based on criminal
activity.
Sec. 1147. Ancillary provisions.
Sec. 1148. Hearings and judicial review of removal, suspension,
or prohibition order.
Sec. 1149. Civil and criminal penalties.
Sec. 1150. Public disclosures of final orders and
agreements.
Sec. 1151. Foreign investigations.
Sec. 1152. Action or proceeding against non-United States
Insurers.
Sec. 1153. Cooperation between Commissioner and State
commissioners.
Subtitle D—Insurance Fraud
Sec. 1161. Investigation of insurance fraud.
Sec. 1162. Penalties.
TITLE II—NATIONAL INSURANCE COMPANIES AND NATIONAL INSURANCE
AGENCIES
Subtitle A—Organization, Licensing, and Operations
Sec. 1201. Organization, operation, and regulation of National
Insurance Companies and National Insurance Agencies.
Sec. 1202. United States branches of non-United States
Insurers.
Sec. 1203. Federal licensing of National Insurers.
Sec. 1204. Corporate governance.
Sec. 1205. Conversion of State Insurer to National Insurer or
State Insurance Agency to National Agency.
Sec. 1206. Conversion of National Insurer to State Insurer or
National Agency to State Agency.
Sec. 1207. Powers.
Sec. 1208. Separate accounts of National Life
Insurer.
Sec. 1209. Protected cells.
Sec. 1210. Chartering and licensing commencement
date.
Subtitle B—Financial, Product, and Market
Regulation
Sec. 1211. Transitional financial regulations.
Sec. 1212. Other financial regulations.
Sec. 1213. Product regulation for National Life
Insurers.
Sec. 1214. Product regulation for National Property/Casualty
Insurers.
Sec. 1215. Regulation of sales and marketing.
Subtitle C—Reinsurance
Sec. 1221. Federal licensing of reinsurers.
Sec. 1222. Credit for reinsurance.
Sec. 1223. Relationship to State law.
Subtitle D—Acquisitions of Control; Mergers; Bulk Transfers;
Domestication
Sec. 1231. Acquisition of control of National Insurers and
National Agencies.
Sec. 1232. Mergers, consolidations, and acquisitions of
National Insurers.
Sec. 1233. Bulk transfers.
Sec. 1234. Domestication of United States branch of a
non-United States Insurer.
Sec. 1235. Mergers, consolidations, and acquisitions of
National Agencies.
Subtitle E—Conversions
Sec. 1241. Definitions.
Sec. 1242. Conversion of stock life insurer to National Life
Insurer in mutual form.
Sec. 1243. Conversion of mutual insurer to National Insurer in
stock form.
Subtitle F—State Taxation
Sec. 1251. State taxation of National Insurers.
Sec. 1252. State taxation of National Agencies.
TITLE III—INSURANCE PRODUCERS AND OTHER INSURANCE SERVICING
PERSONS
Sec. 1301. Federal licensing of insurance
producers.
Sec. 1302. Producer database.
Sec. 1303. Supervision and oversight of federally licensed
insurance producers.
Sec. 1304. Relationship to State law.
Sec. 1305. Licensing commencement date.
TITLE IV—HOLDING COMPANIES
Sec. 1401. Definitions.
Sec. 1402. Registration.
Sec. 1403. Standards and management of a National Insurer
within an insurance holding company system.
Sec. 1404. Relationship to State law.
Sec. 1405. Conflict with other Federal laws.
Sec. 1406. No delegation permitted.
TITLE V—RECEIVERSHIP
Sec. 1501. Appointment of Office as receiver.
Sec. 1502. Automatic stay.
Sec. 1503. Powers and duties.
Sec. 1504. Rulemaking.
Sec. 1505. Judicial review.
TITLE VI—INSOLVENCY PROTECTION
Sec. 1601. Participation in guaranty associations.
Sec. 1602. Qualified and nonqualified State.
Sec. 1603. Establishment of the National Insurance Guaranty
Corporation.
Sec. 1604. Benefits for policy holders of National
Insurers.
Sec. 1605. Claims covered for policyholders of National
Property/Casualty Insurers.
Sec. 1606. Powers and duties of the Corporation.
Sec. 1607. Subrogation.
Sec. 1608. Assessments.
Sec. 1609. Regulation.
Sec. 1610. State taxation.
Sec. 1611. Examination of the Corporation; annual
report.
TITLE VII—CONFORMING AMENDMENTS AND MISCELLANEOUS
PROVISIONS
Sec. 1701. Nondiscrimination.
Sec. 1702. Application of the Federal antitrust laws to
National Insurers, National Agencies, and federally licensed insurance
producers.
Sec. 1703. Application of State law and regulation to National
Insurers, National Agencies, and federally licensed insurance
producers.
Sec. 1704. Federal Court jurisdiction.
Sec. 1705. Federal Court venue.
Sec. 1706. Judicial review.
Sec. 1707. Amendment to Freedom of Information Act.
Sec. 1708. Amendments to the Federal securities
laws.
Sec. 1709. Amendments to the Employee Retirement Income Security Act of
1974.
Sec. 1710. Amendments to the Gramm-Leach-Bliley
Act.
Sec. 1711. Amendments to the Federal Deposit Insurance Act.
Sec. 1712. Amendments to the Bank Holding Company Act of 1956.
Sec. 1713. Amendments to title
18 (crimes and criminal
procedure).
Sec. 1714. Amendments to Americans with Disabilities Act of
1990.
Sec. 1715. Amendment to Age Discrimination in Employment
Act.
Sec. 1716. Amendments to the Fair Credit Reporting Act.
2.The purpose of this Act is to—
(1)establish a comprehensive system of Federal
chartering, licensing, regulation, and supervision for insurers and insurance
producers that is independent of the State system of insurance licensing,
regulation, and supervision, yet that requires federally chartered and licensed
insurers and producers to comply with certain State laws, including State tax
laws;
(2)provide for the creation of an Office of
National Insurance within the Department of the Treasury that is funded by
assessments imposed upon federally chartered and licensed insurers and
insurance producers; and
(3)provide for the appointment of a
Commissioner of National Insurance, who, among other duties, is authorized
to—
(A)issue Federal charters and licenses to
insurers and insurance producers;
(B)exclusively regulate and supervise the
operations and solvency of federally chartered or licensed insurers and
producers on a uniform, nationwide basis, including the conduct of such
insurers and producers with policyholders; and
(C)protect the interests of policyholders by
establishing a comprehensive scheme for the receivership for federally
chartered insurers that requires federally chartered insurers to participate in
qualified State guaranty funds.
3.In this Act:
(1)The term affiliate means any
person that controls, is controlled by, or is under common control with another
person.
(2)The term
affiliate insurer means any person that controls, is controlled
by, or is under common control with, a National Insurer or a National
Agency.
(3)The term
business of insurance has the meaning given to such term in
section 1033(f) of title 18, United States Code.
(4)The term Commissioner means
the Commissioner of National Insurance.
(5)The term control, including
the terms controlling, controlled by, and under
common control with, means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
business entity, whether through the ownership of voting securities, by
contract or otherwise, unless the power is the result of an official position
with or corporate office held by a person. For purposes of sections 1204(c),
1231, 1243(g), and title III, control shall be presumed to exist if any person,
directly or indirectly, owns, controls, holds with the power to vote, or holds
proxies representing, 10 percent or more of the voting securities of any other
person.
(6)The term Corporation means the
National Insurance Guaranty Corporation that is established in section
1603.
(7)The term
Federal banking agencies means the Office of the Comptroller of
the Currency, the Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, and the Office of Thrift Supervision.
(8)Federally
licensed insurance producerThe term federally licensed insurance
producer means a person, including a National Agency and a natural
person acting on behalf of a National Agency, that is an insurance producer
licensed pursuant to section 1301.
(9)The term
fraudulent insurance act has the meaning given to such term in
section 1037A(d)(3) of title 18, United States Code.
(10)The term
functional regulator shall mean—
(A)in the case of a broker-dealer, investment
advisor or investment Company, the Securities and Exchange Commission;
(B)in the case of a State insurer or State
insurance producer, the appropriate State insurance regulator of a State that
has jurisdiction over such insurer or insurance producer;
(C)in the case of a bank holding company or
financial holding company, the Federal Reserve Board;
(D)in the case of a savings and loan holding
company, the Office of Thrift Supervision;
(E)in the case of a national bank, the Office
of the Comptroller of the Currency;
(F)in the case of a Federal savings bank or
Federal savings association, the Office of Thrift Supervision;
(G)in the case of a State bank, the
appropriate State banking authority for the State in which the bank is
chartered or the Federal Deposit Insurance Corporation, in the case of a State
bank that is not a member of the Federal Reserve System, or the Federal Reserve
Board, in the case of a State bank that is a member of the Federal Reserve
System;
(H)in the case of a State savings bank or
State savings association, the appropriate banking authority for the State in
which the thrift is chartered; and
(I)in the case of a commodities company, the
Commodities Exchange Commission.
(11)Functionally
regulated affiliateThe term
functionally regulated affiliate shall mean—
(A)a broker or dealer that is registered under
the Securities Exchange Act of
1934;
(B)a registered investment adviser, registered
by or on behalf of either the Securities and Exchange Commission or any
State;
(C)an investment company that is registered
under the Investment Company Act of
1940;
(D)a State insurer or State insurance producer
that is subject to supervision by a State insurance regulator;
(E)a bank holding company or financial holding
company registered with or certified by the Federal Reserve Board;
(F)a national bank subject to the supervision
of the Office of the Comptroller of the Currency;
(G)a State bank subject to the supervision of
a State banking regulator;
(H)a Federal savings bank or Federal savings
association subject to the supervision of the Office of Thrift
Supervision;
(I)a State savings bank or State savings
association subject to the supervision of a State banking regulator; and
(J)a business entity that is subject to
regulation by the Commodity Futures Trading Commission, with respect to
commodities activities of such entity and activities incidental to such
commodities activities.
(12)
(A)The term
insolvency or insolvent means the inability of an
insurer to pay its obligations when they are due or when assets do not exceed
liabilities plus the greater of—
(i)any capital and surplus required by law for
its organization; or
(ii)the total par or stated value of its
authorized and issued capital stock.
(B)In this paragraph, the term
liabilities shall include reserves required by statute or by rule
or specific requirements imposed by the Commissioner upon an insurer.
(13)The term
insurance operations includes but is not limited to—
(A)the business of insurance;
(B)all acts and transactions relating to the
sale, solicitation, negotiation, and underwriting of insurance;
(C)all acts and transactions relating to
claims adjustment and settlement; and
(D)all acts and transactions relating to the
establishment of rates, rules, risk classifications, rating classifications,
rating territories and forms (including, but not limited to, endorsements,
addendums and policy language) for insurance.
(14)The term
insurance person has the meaning given such term in section
1037A(d)(4) of title 18.
(15)The term
insurance producer means any person, including a National Agency
and a natural person acting on behalf of a National Agency, that sells,
solicits or negotiates policies of insurance, except that none of the following
is an insurance producer:
(A)A National Insurer.
(B)An officer, director, or employee of a
National Insurer or of an insurance producer, provided that the officer,
director, or employee does not receive any commission or other compensation on
insurance policies written or sold by the National Insurer or insurance
producer which commission or other compensation is directly dependent upon the
amount of insurance policies written or sold and—
(i)the officer, director, or employee’s
activities are executive, administrative, managerial, clerical or a combination
of these, and are only indirectly related to the sale, solicitation or
negotiation of insurance;
(ii)the officer, director, or employee’s
function relates to underwriting, loss control, inspection or the processing,
adjusting, investigating, or settling of a claim on a policy of insurance;
or
(iii)the officer, director, or employee is
acting in the capacity of a special agent or agency supervisor assisting
insurance producers where the person’s activities are limited to providing
technical advice and assistance to federally licensed insurance producers and
do not include the sale, solicitation or negotiation of insurance.
(C)A person who secures and furnishes
information for the purpose of group insurance policies; or for the purpose of
enrolling individuals under plans, or issuing certificates under plans or
otherwise assisting in administering plans, where no commission or other
compensation directly dependent upon the amount of insurance policies written
or sold is paid to the person for the service.
(D)An employer or association or its officers,
directors, employees, or the trustees of an employee trust plan, to the extent
that the employer, officer, employee, director or trustee is engaged in the
administration or operation of a program of employee benefits for the
employer’s or association’s own employees or the employees of its subsidiaries
or affiliates, which program involves the use of insurance written by the
National Insurer, as long as the employers, associations, officers, directors,
employees or trustees are not in any manner compensated, directly or
indirectly, by the National Insurer.
(E)An employee of a National Insurer or an
organization employed by a National Insurer that is engaging in the inspection,
rating or classification of risks, or in the supervision of the training of
insurance producers and that is not individually engaged in the sale,
solicitation, or negotiation of insurance.
(F)A person whose activities are limited to
advertising without the intent to solicit insurance through communications in
printed publications or other forms of electronic mass media, provided that the
person does not sell, solicit, or negotiate insurance.
(G)A salaried full-time employee who counsels
or advises his or her employer relative to the insurance interests of the
employer or of the subsidiaries or business affiliates of the employer provided
that the employee does not sell or solicit insurance or receive a commission or
other compensation directly dependent upon the amount of insurance policies
written or sold.
(H)A person that sells, solicits, or
negotiates a funding agreement.
(I)Any other kind of person identified by the
Commissioner, by regulation, as not being an insurance producer within the
meaning of this definition.
(16)The term
insurance securitization means the issuance of debt instruments by
a National Insurer, the proceeds from which support the exposures attributed to
a protected cell, where repayment of principal or interest, or both, to
investors under the transaction terms is contingent upon the occurrence or
nonoccurrence of an event with respect to which the National Insurer is exposed
to loss under insurance policies or reinsurance contracts it has
written.
(17)The term
insurer-affiliated party means—
(A)any director, officer, employee, or
controlling shareholder (other than a holding company) of, or agent for, a
National Insurer or a National Agency;
(B)any other person who has filed or is
required to file a statement with the Commissioner under section 1231;
(C)any shareholder (other than a holding
company), consultant, joint venture partner, and any other person as determined
by the Commissioner (by regulation or case-by-case) who participates in the
conduct of the affairs of a National Insurer or a National Agency; and
(D)any independent contractor (including any
attorney, actuary, or accountant) of a National Insurer or a National Agency
who in that capacity knowingly or recklessly participates in any violation of
any law or regulation, any breach of fiduciary duty, or any conduct that
involves an undue risk of loss to a National Insurer’s policyholders as a
whole, and which violation, breach or conduct caused or is likely to cause more
than a minimal financial loss to, or a significant adverse effect on, a
National Insurer or the policyholders of a National Insurer.
(18)Insurer in
fraternal formThe term
insurer in fraternal form means an incorporated society, order or
supreme lodge, without capital stock (generally known as a fraternal benefit
society), that—
(A)is conducted solely for the benefit of its
members and their beneficiaries and not for profit;
(B)is operated on a lodge system with
ritualistic form of work;
(C)has a representative form of
government;
(D)provides benefits to members and their
dependents; and
(E)operates for 1 or more social,
intellectual, educational, charitable, benevolent, moral, fraternal, patriotic,
or religious purposes for the benefit of its members, which may also be
extended to others.
(19)The term NAIC means the
National Association of Insurance Commissioners.
(20)The term
National Agency means a National Insurance Agency chartered under
section 1201.
(21)The term
National Insurer means a National Insurance Company chartered
under section 1201.
(22)The term
National Life Insurer means a National Insurer that holds a
Federal license to sell, solicit, negotiate, and underwrite 1 or both of life
insurance and annuities, provided that a National Life Insurer may also sell,
solicit, negotiate, and underwrite disability income insurance, long-term care
insurance, health insurance, and funding agreements.
(23)National
property/casualty insurerThe
term National Property/Casualty Insurer means a National Insurer
that holds a Federal license to sell, solicit, negotiate, and underwrite any
combination of lines of property/casualty insurance, provided that a National
Property/Casualty Insurer may also sell, solicit, negotiate, and underwrite
health insurance.
(24)The term negotiate, in the
context of negotiating insurance, means the act of conferring directly with or
offering advice directly to a purchaser or prospective purchaser of a
particular policy of insurance concerning any of the substantive benefits,
terms, or conditions of the contract, provided that the person engaged in that
act either sells insurance to or obtains insurance coverage for
purchasers.
(25)Non-United
States insurerThe term
non-United States Insurer means a business entity that is
chartered or licensed by a foreign country to sell, solicit, negotiate, and
underwrite insurance.
(26)The term Office means the
Office of National Insurance.
(27)The term person means any
natural person, business entity, governmental body or entity, voluntary
organization, or similar organization.
(28)Policy of
insurance; insurance policyThe term policy of insurance
or insurance policy means a policy, contract, certificate, or
other evidence of insurance. Policy of insurance
includes an
annuity contract and a funding agreement.
(29)The term policyholder of an
insurance policy means the person who is identified as the legal owner under
the terms of the insurance policy or who is otherwise vested with legal title
to the insurance policy. An assignment, absolute on its face, completed in
accordance with the terms of the insurance policy and properly recording the
assignee as the policyholder on the books of the insurer vests legal title in
the name of the assignee. The term policyholder does not include a
person with a mere beneficial interest in an insurance policy or a person to
whom an insurance policy is assigned for collateral security purposes.
(30)Property/casualty
insuranceThe term
property/casualty insurance—
(A)means a product that insures, guarantees,
or indemnifies against liability, loss of life, loss of health, or loss through
damage to or destruction of property, including surety bonds, private passenger
or commercial automobile, homeowners, mortgage guaranty, financial guaranty,
commercial multiperil, general liability, professional liability, workers’
compensation, fire and allied lines, farm or ranch owners multiperil, aircraft,
fidelity, surety, medical malpractice, ocean marine, inland marine, and boiler
and machinery insurance; and
(B)does not include life insurance, disability
income insurance, long-term care insurance, health insurance, annuities, a
funding agreement, or title insurance.
(31)The term protected
cell means an identified pool of assets and liabilities of a National
Insurer segregated and insulated from the remainder of the National Insurer’s
assets and liabilities. The remainder of the National Insurer’s assets and
liabilities includes general account assets and liabilities, separate account
assets and liabilities, and assets and liabilities of other protected
cells.
(32)The term
protected cell account means a specifically identified bank or
custodial account established by a National Insurer for the purpose of
segregating the protected cell assets of 1 protected cell from the protected
cell assets of other protected cells and from the assets of the National
Insurer’s general account and separate accounts.
(33)The term sell, in the context
of selling a policy of insurance, includes exchanging a policy of insurance by
any means, for money or any other valuable consideration, on behalf of an
insurer.
(34)The term
separate account means an account established and maintained by a
National Life Insurer under which income, gains, and losses, whether or not
realized, from assets allocated to such account, are, in accordance with the
applicable contract, credited to or charged against such account without regard
to other income, gains, or losses of the National Life Insurer.
(35)The term solicit, in the
context of soliciting a policy of insurance, means attempting to sell insurance
or asking or urging a person to apply for a particular kind of insurance from a
particular insurer.
(36)The term State means each of
the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, any
territory of the United States, Guam, American Samoa, the Trust Territory of
the Pacific Islands, the United States Virgin Islands, and the Commonwealth of
the Northern Mariana Islands.
(37)The term
State insurance agency means an insurance producer that is
incorporated under State law.
(38)The term State
insurer means an insurer incorporated or organized under the laws of a
State.
(39)The term subsidiary means a
business entity controlled, directly or indirectly, by another business entity.
For the purposes of this definition—
(A)a business entity is conclusively presumed
to be controlled by a person that, directly or indirectly, with power to vote,
owns, controls, or holds a majority of the outstanding voting securities of
such business entity;
(B)no presumption, either of control or of
absence of control, arises if such ownership, control, or holding of voting
securities is less than a majority but more than 5 percent;
(C)absence of control is presumed if such
ownership, control or holding of voting securities is 5 percent or less;
and
(D)in determining control, voting securities
held in separate accounts of a business entity shall be deemed to be owned by
the business entity, but voting securities in an investment advisory account
that are not owned by a business entity but are held in an account as to which
the business entity is an investment adviser shall not be deemed to be
controlled or held by such business entity.
(40)The term
trusteed assets means assets required or permitted by this title
to be deposited by a non-United States insurer with a qualified trustee for the
security of its policyholders and creditors in the United States.
(41)The term
trusteed surplus means, with respect to a United States branch,
the value of the insurer’s trusteed assets deposited with a trustee under
section 1202(b), plus accrued investment income thereon where such income is
collectible by the trustee, less the aggregate net amount of all of its
reserves and other liabilities in the United States as determined under section
1202(b).
(42)The term United
States branch means the business unit through which business is
transacted within the United States by a non-United States insurer and the
assets and liabilities of the insurer within the United States pertaining to
such business.
(43)United states
holding companyThe term
United States holding company means, with respect to a National
Insurer, a person organized or incorporated in a State that directly or
indirectly controls a National Insurer.
(44)The term violation includes
any action or inaction (alone or with another or others) for or toward causing,
bringing about, participating in, counseling, or aiding or abetting a
violation.
(45)The term
voting securities means securities of any class or any ownership
interest having voting power for the election of directors, trustees, or
management of a business entity, other than securities having such power only
by reason of the happening of a contingency.
<enum>I</enum><header>OFFICE OF NATIONAL INSURANCE</header>
<subtitle commented="no" id="IDEDECC2D21B654D58A5BB19DADD83CA51" style="OLC"><enum>A</enum><header>Establishment of Office of National
Insurance</header>
<section commented="no" display-inline="no-display-inline" id="ID29F21D992A7E442CA559151C60F6EF3A" section-type="subsequent-section"><enum>1101.</enum><header>Establishment</header>
<subsection commented="no" display-inline="no-display-inline" id="IDBF30C170FAAC4991B8B418E01C59CC16"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">There is established,
in the Department of the Treasury, the Office of National Insurance, which
shall be headed by the Commissioner of National Insurance.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID11BF27017E61452DADEE264FB73D6A34"><enum>(b)</enum><header>Offices</header><text display-inline="yes-display-inline">The Commissioner shall establish a main
office in Washington, D.C., not fewer than 6 regional offices, and such
additional offices, within or outside the United States, as the Commissioner
determines to be necessary to carry out the provisions of this Act.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDB2EF9069E9FE4467846BB2ADC86E4418"><enum>(c)</enum><header>Funding</header><text display-inline="yes-display-inline">The operations of the Office, including the
compensation of the Commissioner and all employees of the Office, shall be paid
from fees and assessments imposed under the terms of section 1122.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID53EE5F9B721246028CC11756D899994E"><enum>(d)</enum><header>Applicability
of Administrative Procedures Act</header><text display-inline="yes-display-inline">The Office shall be an agency of the United
States for purposes of subchapter II of chapter 5 and chapter 6 of title 5,
United States Code.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID6760A227CFA34FA6B110E2F243911A60"><enum>(e)</enum><header>Annual
Report</header><text display-inline="yes-display-inline">The Commissioner shall
prepare and submit to Congress an annual report on the activities of the
Office.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID08364FF6FD024075B490D0BA5A36C431" section-type="subsequent-section"><enum>1102.</enum><header>Commissioner of
National Insurance</header>
<subsection commented="no" display-inline="no-display-inline" id="ID0AB74314D8154CC4A721936EEBEE14B6"><enum>(a)</enum><header>Appointment</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID96182778FA7844F7AF10B41733554EFF"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner of
National Insurance shall be appointed by the President, by and with the advice
and consent of the Senate, from among individuals who are citizens of the
United States.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC03A6EAE6BF04F4CA43A15B4D691EB5B"><enum>(2)</enum><header>Term</header><text display-inline="yes-display-inline">The Commissioner shall be appointed for a
term of 5 years.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCA74C55421AB49DB91EFE07FF9DF59FD"><enum>(3)</enum><header>Vacancy</header><text display-inline="yes-display-inline">A vacancy in the position of the
Commissioner, which occurs before the expiration of the term for which the
Commissioner was appointed shall be filled in the manner established under
paragraph (1). The Commissioner appointed to fill the vacancy shall be
appointed only for the remainder of the term of the preceding
Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD7F806EBB777486396E1C2DEF157AF79"><enum>(4)</enum><header>Service after
term</header><text display-inline="yes-display-inline">An individual may serve
as the Commissioner after the expiration of the term for which appointed until
the earlier of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID314EE8BC21E24BCDB8DA7A48EEADC358"><enum>(A)</enum><text display-inline="yes-display-inline">such time as a successor has been
appointed; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAA0FAB0F9B074881861889B924C185A8"><enum>(B)</enum><text display-inline="yes-display-inline">1 year after the expiration of the
individual’s term.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB8A3D186BF454D8E8478E1C09C91CA16"><enum>(5)</enum><header>Prohibition on
financial interests</header><text display-inline="yes-display-inline">The
Commissioner may not have a direct or indirect financial interest in any
National Insurer, National Agency, or other federally licensed insurance
producer, except that the Commissioner may own, directly or indirectly, or may
have a direct or indirect beneficial interest in any insurance policy written
or sold by a National Insurer or National Agency.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE81DCDF67F9F4193BCBD63ADC2736CCB"><enum>(6)</enum><header>Oversight</header><text display-inline="yes-display-inline">The Commissioner shall be subject to the
general oversight of the Secretary of the Treasury, who may not intervene in
any matter or proceeding before the Commissioner unless otherwise specifically
provided by law.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA0C5361FF3BA47858E3097EC7FD2FFFF"><enum>(7)</enum><header>Executive
schedule</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2F38895DB99846BC87792C5931E576A2"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner
shall receive compensation at the rate prescribed by law under section 5314 of
title 5, United States Code, for positions at level III of the Executive
Schedule.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC8CAE2F996BE4D21948DCC1B39A3FB29"><enum>(B)</enum><header>Technical
amendment</header><text display-inline="yes-display-inline">Section 5314 of
title 5, United States Code, is amended by inserting <quote>Commissioner of
National Insurance, Department of the Treasury.</quote> as a new item after
<quote>Administrator, Pipeline and Hazardous Materials Safety
Administration.</quote>.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDF7DD6E2120F043D99680D40BA5C52E2A"><enum>(b)</enum><header>Powers of the
Commissioner</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDEE87876BB67A4B01A47717783012F7C5"><enum>(1)</enum><header>In
general</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idD02A15383481405E98733CB7202E6C47"><enum>(A)</enum><header>Powers</header><text display-inline="yes-display-inline">The Commissioner shall—</text>
<clause commented="no" display-inline="no-display-inline" id="IDC5A6A06164064FBFB3283F9650C051C8"><enum>(i)</enum><text display-inline="yes-display-inline">oversee the organization, incorporation,
operation, regulation, and supervision of National Insurers and National
Agencies;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDCD787C6CE9EC4B50B048F42A7256B634"><enum>(ii)</enum><text display-inline="yes-display-inline">issue charters and licenses for National
Insurers and National Agencies;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID5C0813E33DFF4B3B88B53C4F2855021E"><enum>(iii)</enum><text display-inline="yes-display-inline">license, regulate, and supervise federally
licensed insurance producers other than National Agencies; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id927234F288D74AB898DC7D417807B702"><enum>(iv)</enum><text display-inline="yes-display-inline">have exclusive authority to determine
whether a person subject to this Act has complied with the Act or the
application of any State law to matters regulated under this Act, including the
determination of any complaint raised by any person.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idB1CF086540CB44DEAB945C223B960A1B"><enum>(B)</enum><header>Final agency
action</header><text display-inline="yes-display-inline">A determination of the
Commissioner under subparagraph (A)(iv) shall be the final agency action for
purposes of judicial review of that action.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC0BBF7AE20964C21916EF15EC943B9EC"><enum>(2)</enum><header>Rulemaking</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID1174C38CA6654E1DBF184FA7FA3270F5"><enum>(A)</enum><header>Issuance of
regulations and other actions</header><text display-inline="yes-display-inline">The Commissioner may issue such rules,
regulations, orders, and interpretations as the Commissioner determines to be
necessary to carry out the purposes of this Act.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6BBE977B4B414A499BA8F77D5D73125D"><enum>(B)</enum><header>Autonomy</header><text display-inline="yes-display-inline">The Secretary of the Treasury may not delay
or prevent the issuance of any rule, regulation, order, or interpretation by
the Commissioner unless otherwise specifically authorized by law.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6D0C0FFBEE2A48AF9DEC5EA58591360E"><enum>(C)</enum><header>No delegation
permitted</header><text display-inline="yes-display-inline">The Commissioner
may not delegate any authority conferred under subparagraph (A) to any
insurance self-regulatory organization.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID061E0B3083A548999B04ADA118F340B8"><enum>(3)</enum><header>Litigation
authority</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE756488627C841FA9B896D9592FE0020"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may
sue and be sued, complain and defend, and otherwise litigate, in the
Commissioner’s name and through the Commissioner’s own attorney, in any Federal
or State court, other than the Supreme Court of the United States in which the
Commissioner shall be represented by the Solicitor General of the United
States.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0A5D4605508C4DCDBB04A91B8476C7E9"><enum>(B)</enum><header>Enforcement</header><text display-inline="yes-display-inline">The Commissioner may apply to the United
States district court for the jurisdiction in which the main office of a
National Insurer or National Agency is located, or in which any other federally
licensed insurance producer or other person is located, for the enforcement of
any effective and outstanding rule, regulation, order, or interpretation issued
pursuant to this Act.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE0287AA3241A48228727BD489E19F763"><enum>(4)</enum><header>Consultation
with state insurance regulators</header><text display-inline="yes-display-inline">The Commissioner may, as appropriate,
consult with State insurance regulators responsible for the supervision of
States insurers, State insurance agencies, and State licensed insurance
producers regarding regulatory and supervisory matters of common
interest.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA413618BC9E94268A91E8E3F076286FA"><enum>(5)</enum><header>International
coordination and cooperation</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID158D5BE8D1664C6C8EE53531C5227BDC"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may
engage in international efforts to secure bilateral and multilateral
cooperation and agreements, as appropriate, with respect to insurance
regulation in global markets in order to promote open and fair competition in
such markets and to improve the quality and uniformity of insurance regulation
in all countries.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7B06999C17964D12BAC4C137AE16373B"><enum>(B)</enum><header>Foreign
insurance regulators</header><text display-inline="yes-display-inline">The
Commissioner may provide appropriate technical assistance to, and cooperation
with, individual foreign insurance regulators and regional and global
regulatory organizations in insurance matters affecting international commerce,
including—</text>
<clause commented="no" display-inline="no-display-inline" id="IDBAC8DC658AD74091BA75D750B128FC38"><enum>(i)</enum><text display-inline="yes-display-inline">the development and implementation of
international regulatory standards; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID0A76135D8A3E4DEE9DDFF293520509C9"><enum>(ii)</enum><text display-inline="yes-display-inline">the development and implementation of
bilateral and multilateral mutual recognition agreements on the licensing of
insurance companies and insurance producers.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1B1DF2BF14DD473EB5130434EB63E248"><enum>(C)</enum><header>Consultation
and cooperation</header><text display-inline="yes-display-inline">In exercising
the authority granted under subparagraphs (A) and (B), the Commissioner—</text>
<clause commented="no" display-inline="no-display-inline" id="IDC8BB6586801C4ED791CD5FCF171B1185"><enum>(i)</enum><text display-inline="yes-display-inline">shall consult and cooperate with the
Executive Office of the President and the United States Trade Representative;
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID1FBDDEE5E2704E2D9B42D67B9B681AFE"><enum>(ii)</enum><text display-inline="yes-display-inline">may include a representative of any
interested State insurance regulators as the Commissioner determines to be
appropriate.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDd83f7ada8b2a497998de8c0eeba0cc2b"><enum>(6)</enum><header>Independence in
congressional testimony and recommendations</header><text display-inline="yes-display-inline">Section 111 of Public Law 93–495 (12 U.S.C.
250) is amended by inserting <quote>the Commissioner of the National
Insurance,</quote> after <quote>the Director of the Office of Thrift
Supervision,</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID124C4FD00F574672B3BAF87C98CEF205"><enum>(c)</enum><header>GAO
Audit</header><text display-inline="yes-display-inline">The Commissioner shall
make available to the Comptroller General of the United States all books and
records necessary to audit all of the activities of the Office.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDBBD7D937D08042F79F96F4D507ABE319" section-type="subsequent-section"><enum>1103.</enum><header>Office personnel
matters</header>
<subsection commented="no" display-inline="no-display-inline" id="ID87CB6BAD73884440A308300B8E450081"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">The Commissioner may
employ such examiners, lawyers, accountants, actuaries and other employees as
are necessary to carry out the provisions of this Act.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDEDFD9B2C45E347C5AFED884129478DFA"><enum>(b)</enum><header>Compensation</header><text display-inline="yes-display-inline">The Commissioner shall fix the compensation
and number of employees of the Office without regard to chapter 51 or
subchapter III of chapter 53 of title 5, United States Code.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID061B5D19EBBF41B9BA9A182357367419"><enum>(c)</enum><header>Additional
Compensation</header><text display-inline="yes-display-inline">The Commissioner
may provide additional compensation and benefits to employees of the Office if
the same type of compensation or benefits are then being provided by any
Federal banking agency or, if not then being provided, could be provided by any
such agency under applicable provisions of law or regulation. In setting and
adjusting the total amount of compensation and benefits for employees of the
Office, the Commissioner shall consult, and seek to maintain comparability
with, the Federal banking agencies.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID7A041B94FBCA409BAE65C2A35145CC4B"><enum>(d)</enum><header>Acting
Commissioner</header><text display-inline="yes-display-inline">The Commissioner
shall designate an employee of the Office to serve as the Acting Commissioner
during the absence or disability of the Commissioner.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID27AA8E69588445B7999F306D094B2A99"><enum>(e)</enum><header>Delegation of
Powers</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID0956FB48F9D34CA994ED3E9BE0F7CCC6"><enum>(1)</enum><header>Employees and
others</header><text display-inline="yes-display-inline">Unless otherwise
prohibited by this Act, the Commissioner may delegate to any employee,
representative, or agent any power of the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID15AF7D7CEF9A4259B824E1B263611784"><enum>(2)</enum><header>Self-regulatory
organizations</header><text display-inline="yes-display-inline">Unless
otherwise prohibited by this Act, the Commissioner may, by regulation, delegate
to any insurance self-regulatory organization any power of the Commissioner in
accordance with the terms of section 1106.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID3C2747EAA7D54568A5D1A211EA0109CD" section-type="subsequent-section"><enum>1104.</enum><header>Division of
Insurance Fraud</header>
<subsection commented="no" display-inline="no-display-inline" id="IDF056D699FB084B5DBDC9FE0274B909DD"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established, within the Office, a
Division of Insurance Fraud.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID5E84408CABCE4E288DB085A63C0FB069"><enum>(b)</enum><header>Authority</header><text display-inline="yes-display-inline">The Division of Insurance Fraud shall have
all powers necessary to enforce the terms of subtitle D, other than the power
to execute search and arrest warrants.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDD11689E00B73449BBA1D3DE063DF43FC" section-type="subsequent-section"><enum>1105.</enum><header>Division of
Consumer Affairs</header>
<subsection commented="no" display-inline="no-display-inline" id="ID346f7dc6c9064017b6ff7c9283177267"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established, within the Office, a
Division of Consumer Affairs.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDb6959e2d4e1e4c26a6a728e59adfc993"><enum>(b)</enum><header>Authority</header><text display-inline="yes-display-inline">The Division of Consumer Affairs shall
support the Commissioner in the implementation and enforcement of the market
conduct regulations issued pursuant to section 1215.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID27D47152AED742F4AB10350C424AF52A" section-type="subsequent-section"><enum>1106.</enum><header>Insurance
self-regulatory organizations</header>
<subsection commented="no" display-inline="no-display-inline" id="ID8c03541093d249c4a01225ca0f6bc595"><enum>(a)</enum><header>Authority of
the commissioner</header><text display-inline="yes-display-inline">Subject to
the terms of this section, and the regulations issued pursuant to this section,
the Commissioner shall have the authority to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID40a09866016c468cb7e56a458d01b087"><enum>(1)</enum><text display-inline="yes-display-inline">provide for the registration of an
insurance self-regulatory organization; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDa404534dc4b1408a85ad0dc124866333"><enum>(2)</enum><text display-inline="yes-display-inline">supervise and regulate any registered
insurance self-regulatory organization, which shall include the authority
to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5df1998a210641b48e550f2f6b470b2e"><enum>(A)</enum><text display-inline="yes-display-inline">review, approve, abrogate, modify, or add
to the operating rules of an insurance self-regulatory organization;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID62bb82b89be34e41899b421b987872d6"><enum>(B)</enum><text display-inline="yes-display-inline">review, approve, abrogate, or modify any
disciplinary action taken by an insurance self-regulatory organization;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3e562b38f43945819739c0ec0cb15ac8"><enum>(C)</enum><text display-inline="yes-display-inline">remove, suspend, or bar an individual from
serving as an officer or director of an insurance self-regulatory
organization;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID9b6adeee6d924619a962bd50c6acc742"><enum>(D)</enum><text display-inline="yes-display-inline">remove or suspend a member of an insurance
self-regulatory organization; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3fb68a39d6e2481dbb54fc0477c660d4"><enum>(E)</enum><text display-inline="yes-display-inline">suspend or revoke the registration of an
insurance self-regulatory organization.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID8aa54c3ce93147c39e981e290fa3973b"><enum>(b)</enum><header>Authority of
registered insurance self-regulatory organizations</header><text display-inline="yes-display-inline">An
insurance self-regulatory organization that is registered by the Commissioner
shall have the authority to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID521f6ffb5249401c8a3fc71b596475cf"><enum>(1)</enum><text display-inline="yes-display-inline">carry out the purpose of this Act;
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9fc664b1fac3469e8460bb7cadb2cc17"><enum>(2)</enum><text display-inline="yes-display-inline">enforce compliance by its members with the
provisions of this Act, applicable regulations issued by the Commissioner, and
the rules of the organization.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID95b8a594f5f244779aa13a4ec27fea92"><enum>(c)</enum><header>Membership</header><text display-inline="yes-display-inline">An insurance self-regulatory organization
may be formed by, and consist exclusively of—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDc9d75cb472454c68bc7ae25c8c8129fe"><enum>(1)</enum><text display-inline="yes-display-inline">National Insurers;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4a18cfc0ca6349cfae40fbfc5f298b76"><enum>(2)</enum><text display-inline="yes-display-inline">National Agencies;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6c46bd9ac9334ad5ad7db0717e74a95e"><enum>(3)</enum><text display-inline="yes-display-inline">federally licensed insurance producers;
or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDcd89723ae4314a67a2d8bc8db3962075"><enum>(4)</enum><text display-inline="yes-display-inline">any combination of National Insurers,
National Agencies and federally licensed insurance producers.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDc09b632ea97f4f7883dc1f7d57e325ca"><enum>(d)</enum><header>Regulations</header><text display-inline="yes-display-inline">Not later than 2 years after the date of
enactment of this Act, the Commissioner shall issue regulations governing the
registration and operations of insurance self-regulatory organizations. Such
regulations shall establish—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDb88abd57b354444c994b956035ee9fe1"><enum>(1)</enum><text display-inline="yes-display-inline">the procedures insurance self-regulatory
organizations must follow to be registered by the Commissioner, which shall
provide for public notice and an opportunity for public comment on the proposed
registration;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDc5c65f2cbf604f01b1c8a1bc6b6a0b13"><enum>(2)</enum><text display-inline="yes-display-inline">the standards that the Commissioner shall
apply in reviewing a proposed registration, which shall require an insurance
self-regulatory organization to demonstrate that—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID3e9d4100ed4540d3b210f307dbc540a3"><enum>(A)</enum><text display-inline="yes-display-inline">it has the capacity to—</text>
<clause commented="no" display-inline="no-display-inline" id="IDe34c3ac8c68e4186ba4b2755d4336b25"><enum>(i)</enum><text display-inline="yes-display-inline">carry out the purpose of this Act;
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID9ad342430dbd4cbe9a4e8471229385a4"><enum>(ii)</enum><text display-inline="yes-display-inline">enforce compliance by its members with the
provisions of this Act, applicable regulations, and the rules of the
organization; and</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1e0277f6899c4497b771c72ee89cbc63"><enum>(B)</enum><text display-inline="yes-display-inline">its operating rules—</text>
<clause commented="no" display-inline="no-display-inline" id="ID7d661bc23af843629423aeac560c485f"><enum>(i)</enum><text display-inline="yes-display-inline">assure a fair representation of its members
in the selection of its directors and the administration of its affairs;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8e064955a97a4b2983cb67f3972f08ac"><enum>(ii)</enum><text display-inline="yes-display-inline">provide for the equitable allocation of
fees, dues, and other charges among its members;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID80f63fd10ce14f47b7ce90dad663f6fb"><enum>(iii)</enum><text display-inline="yes-display-inline">provide for the organization to take
appropriate disciplinary actions against members, including the revocation of
membership status, for violations of this Act, the regulations issued pursuant
to this Act, or the operating rules of the organization; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4f2cc5de5d9148099a2d3cac2482ab24"><enum>(iv)</enum><text display-inline="yes-display-inline">include procedures for members that are
subject to disciplinary actions to obtain review of such actions by the
Commissioner;</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID32714e983f2d4f46bc8b62770bb8c00d"><enum>(3)</enum><text display-inline="yes-display-inline">the procedures and standards the
Commissioner shall follow in reviewing, approving, abrogating, or modifying any
new operating rule or any amendment to an existing operating rule that is
proposed by an insurance self-regulatory organization, which shall include
procedures for public notice and comment on such rule or amendment;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID08d750973c5d4eeeac89ee4a123d88cb"><enum>(4)</enum><text display-inline="yes-display-inline">the procedures and standards the
Commissioner shall follow in abrogating, modifying, or adding to the operating
rules of an insurance self-regulatory organization;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDd8db525e625e4ef2990445b8c825c90e"><enum>(5)</enum><text display-inline="yes-display-inline">the procedures and standards the
Commissioner shall follow in reviewing, approving, abrogating, or modifying any
disciplinary action by an insurance self-regulatory organization;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5e92ef7f63b542e884ca4d28d119b423"><enum>(6)</enum><text display-inline="yes-display-inline">the procedures and standards the
Commissioner shall follow in removing, suspending, or baring any individual
from serving as an office, or director of an insurance self-regulatory
organization;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4b796886101b488aaf4391337c21d8e7"><enum>(7)</enum><text display-inline="yes-display-inline">the procedures and standards the
Commissioner shall follow in suspending or revoking the registration of an
insurance self-regulatory organization; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDe63e547c4d9742c4a665e386a7468371"><enum>(8)</enum><text display-inline="yes-display-inline">such other matters as the Commissioner
determines appropriate to ensure and protect the public interest and the
interests of policyholders.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID6469c05e8c9841d1b97bd02f75939ed6" section-type="subsequent-section"><enum>1107.</enum><header>Office of the
Ombudsman</header>
<subsection commented="no" display-inline="no-display-inline" id="IDc5475e29ec16492ea942dbe21a2724ee"><enum>(a)</enum><header>Establishment
of the office of the ombudsman</header><text display-inline="yes-display-inline">There is established within the Office, an
Office of the Ombudsman. The Commissioner shall appoint an Ombudsman to
administer the Office of the Ombudsman. The Ombudsman shall report directly to
the Commissioner.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID38d99041a3ab496b9ec812187c09f0b3"><enum>(b)</enum><header>Duties of the
ombudsman</header><text display-inline="yes-display-inline">The Ombudsman shall
act as a liaison between the Office and any person adversely affected by the
Office’s supervisory or regulatory activities, including the failure of the
Office to take a requested action. The Ombudsman shall assure that safeguards
exist to encourage complainants to come forward and preserve
confidentiality.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID65dd5068c76f4423b760c3a117987bd6"><enum>(c)</enum><header>Powers of the
ombudsman</header><text display-inline="yes-display-inline">The powers of the
Ombudsman are the following:</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDcd459e4ad08343ae884d77373e0ca0c7"><enum>(1)</enum><text display-inline="yes-display-inline">with the prior consent of the Commissioner,
the Ombudsman may stay any appealable decision or action during the resolution
of an appealable matter; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDd9a3b1694eac40f6a434c985d0f5a8f3"><enum>(2)</enum><text display-inline="yes-display-inline">review and report any weakness in policy or
procedures to the Commissioner, and make recommendations regarding changes in
such policies or procedures.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDfe870e2d8bac40029e6d01bc89cced28"><enum>(d)</enum><header>Appealable
matters</header><text display-inline="yes-display-inline">Any party adversely
affected by an Office decision or action may seek Ombudsman review of such
decision or action, except for the following:</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDc6055f2937904fcbbd3d569e1c16d865"><enum>(1)</enum><text display-inline="yes-display-inline">Appointments of receiver or
conservators.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDc1e0d8ca23df412698357a062c5c2140"><enum>(2)</enum><text display-inline="yes-display-inline">Preliminary examination conclusions
communicated to the regulated entity before a final examination report is
issued.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID41a2baf6fe2247e48b634c0b27c2adda"><enum>(3)</enum><text display-inline="yes-display-inline">Any formal enforcement-related action or
decision, including the issuance of a formal supervisory agreement, a
cease-and-desist order, a civil money penalty, or to take prompt corrective
action, issue a safety and soundness order, or commence a formal
investigation.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3cf7d4ee62b849e194a8f42830bda360"><enum>(4)</enum><text display-inline="yes-display-inline">Formal and informal rulemakings pursuant to
subchapter II of chapter 5 of title 5, United States Code.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDe43f3f7019a045f1b0a75d2bdd05c19a"><enum>(5)</enum><text display-inline="yes-display-inline">Decisions or recommended decisions
following formal adjudications conducted pursuant to subchapter II of chapter 5
of title 5, United States Code.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7d9aab4e236244a88c68659c13ca00fa"><enum>(6)</enum><text display-inline="yes-display-inline">Requests for agency records pursuant to
section 552 of title 5, United States Code (commonly referred to as the Freedom
of Information Act).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDaabb3c561e524ba9af4794fd8702fd0c"><enum>(e)</enum><header>Procedures for
filing an appeal to the ombudsman</header><text display-inline="yes-display-inline">An aggrieved party may seek review of an
appealable matter by filing a written appeal with the Office of the Ombudsman.
In the case of a National Insurer or National Agency, the appeal shall be
signed by the President or Chief Executive Officer of the Insurer or Agency.
The appeal shall set forth all of the reasons for the appeal and supporting
documentation. The Ombudsman may arrange for a meeting of Office personnel and
the complainants to discuss the appeal.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID099cf929aed14859b25834a1fc64cc67"><enum>(f)</enum><header>Effect of
filing an appeal</header><text display-inline="yes-display-inline">Unless the
Ombudsman determines otherwise, and obtains the concurrence of the
Commissioner, material supervisory decisions and actions are not stayed pending
an appeal.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID3959632e756844639a0ac6d5e8489bb2"><enum>(g)</enum><header>Decision of the
ombudsman</header><text display-inline="yes-display-inline">After a thorough
investigation of the matter, and after considering all relevant information
provided by the complainant and the Office, the Ombudsman shall issue a written
determination of the appeal. Such determination shall become the final decision
of the Office, unless reversed, modified, or stayed by the Commissioner.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDe27c6fb3764d41be8acb446d51eb5e1c"><enum>(h)</enum><header>Retaliation
prohibited</header><text display-inline="yes-display-inline">The Office and its
staff may not take any adverse action against a complainant for appealing any
decision or action to the Ombudsman. Upon learning of any possible retaliatory
actions, the Ombudsman shall investigate the matter, and if the Ombudsman
determines that reasonable grounds exist to conclude that retaliation has taken
place, shall refer the matter to the Commissioner.</text>
</subsection></section></subtitle><subtitle commented="no" id="IDF8982B4DBDAA42F496AFA5DDE2FDFA50" style="OLC"><enum>B</enum><header>Supervision of National Insurers and National
Agencies</header>
<section commented="no" display-inline="no-display-inline" id="IDCB0E3E2991BE4031AC027B4C217951C5" section-type="subsequent-section"><enum>1121.</enum><header>Examination of
National Insurers and National Agencies</header>
<subsection commented="no" display-inline="no-display-inline" id="ID12AF082A91AE43249017E000993CEEC3"><enum>(a)</enum><header>In
General</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDA50231C3D78947BC946851EAB4F8A859"><enum>(1)</enum><header>Examination</header><text display-inline="yes-display-inline">The Commissioner shall provide for
examinations of National Insurers and National Agencies.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF568868EF0A14F2B9E98820D3796A1B5"><enum>(2)</enum><header>Regular and
special examinations of national insurers</header><text display-inline="yes-display-inline">Not less than once during each 36-month
period, the Commissioner shall conduct an on-site examination of each National
Insurer, and may conduct a special examination of a National Insurer whenever
the Commissioner determines that a special examination is necessary.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7C3639EB08994695947618D7EAF20314"><enum>(3)</enum><header>Examination of
national agencies</header><text display-inline="yes-display-inline">The
Commissioner may examine a National Agency only in response to a complaint or
any other evidence that the National Agency has violated or is about to
violate—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID40d538193205408eafa58c28c24d2d7e"><enum>(A)</enum><text display-inline="yes-display-inline">a law, rule, or regulation;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0eb717dc39704b6aa162aefb8136909b"><enum>(B)</enum><text display-inline="yes-display-inline">any condition imposed in writing by the
Commissioner in connection with issuing a license for a federally licensed
insurance producer; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDcbd62c87f9a6417096df6630994beea0"><enum>(C)</enum><text display-inline="yes-display-inline">any written agreement entered into with the
Commissioner.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5A9F9F815FBB408F9564BE08FD5A09D0"><enum>(4)</enum><header>Affiliates</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9889B178EF4F4623ADBC416740A0967E"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">In making
examinations of National Insurers or National Agencies, the Commissioner may,
to the extent necessary to discover information concerning activities of an
affiliate that may have a materially adverse effect on the operations,
management, or financial condition of the National Insurer or National
Agency—</text>
<clause commented="no" display-inline="no-display-inline" id="IDC9FC11D2088E497891D186B5A3305A7D"><enum>(i)</enum><text display-inline="yes-display-inline">require an affiliate to make such reports
and provide such material as the Commissioner may direct; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7516CA51D140467483972DD190F9397B"><enum>(ii)</enum><text display-inline="yes-display-inline">conduct an examination of the affairs of an
affiliate, if—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID4E724391528E4AAB9CCFF12151463E98"><enum>(I)</enum><text display-inline="yes-display-inline">the Commissioner has reasonable cause to
believe that the activities of the affiliate may have such an effect;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID2EE2A3B92ED44870968BAE8BA70FEF8E"><enum>(II)</enum><text display-inline="yes-display-inline">the examination is limited to the extent
necessary to disclose information related to such effect; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDD5F3C56C6C284B0A868B4AFB38726F2E"><enum>(III)</enum><text display-inline="yes-display-inline">the Commissioner is unable to obtain the
necessary information from the National Insurer or National Agency.</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7AB787A97C9A43768A007A58EF175430"><enum>(B)</enum><header>Acceptance of
available information</header><text display-inline="yes-display-inline">To the
extent that the Commissioner requires an affiliate to make reports or provide
material under subparagraph (A), the Commissioner shall, to the fullest extent
possible, accept—</text>
<clause commented="no" display-inline="no-display-inline" id="IDC99FE9EE03B44FD7A3027A0531368865"><enum>(i)</enum><text display-inline="yes-display-inline">reports that the affiliate has provided or
been required to provide to other Federal or State regulatory authorities or
appropriate self-regulatory organizations;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID67150BC5C05B47CB99F871AD9264E10B"><enum>(ii)</enum><text display-inline="yes-display-inline">information that is otherwise required to
be reported publicly; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7ACDDDC3F9CA4CCFA76E40DAC93CD47B"><enum>(iii)</enum><text display-inline="yes-display-inline">audited financial statements.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5AB807D3CFD8401487006EF8ED81EE48"><enum>(C)</enum><header>Use of
regulatory reports</header><text display-inline="yes-display-inline">If the
Commissioner determines to conduct an examination of an affiliate under
subparagraph (B) and such affiliate is a functionally regulated affiliate, the
Commissioner shall, to the fullest extent possible, rely on the examination
reports made by the functional regulator of such affiliate.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID2019C3F701A04A0FA1D2485DF30DD031"><enum>(b)</enum><header>Access to
People and Records</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDE81B4D32096048C4AFA4778F2E8E3899"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner,
upon request, shall be given prompt and reasonable access to National Insurer
or National Agency officers, employees, and agents, and relevant books,
records, and documents in the course of supervision, oversight, or examination
of any National Insurer or National Agency.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID42792F52C5DB453C9FDDCD381AFE3F6B"><enum>(2)</enum><header>Court
order</header><text display-inline="yes-display-inline">If prompt and
reasonable access is not given as required under paragraph (1), the
Commissioner may apply to the United States district court for the judicial
district in which the main office of the National Insurer or the National
Agency is located, or in which the person denying such access resides or
carries on business, for an order requiring that such information be promptly
provided.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCB3E5D0ECB964F20B3E6437C329FED68"><enum>(3)</enum><header>Subpoena
power</header><text display-inline="yes-display-inline">In connection with
examinations of National Insurers, National Agencies, or affiliates under this
section and the examination of federally licensed insurance producers under
section 1301, the Commissioner may—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA5439CCE9D4C46F1B088632DC7A180EE"><enum>(A)</enum><text display-inline="yes-display-inline">administer oaths and affirmations;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDABC1669656D74CD286064C5A9B93FFF7"><enum>(B)</enum><text display-inline="yes-display-inline">examine, take, and preserve testimony under
oath as to any matter in respect of the affairs or ownership of any such
National Insurer, National Agency, affiliate, or federally licensed insurance
producer;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID50914F944DB945FE83CD3BFAE6F04778"><enum>(C)</enum><text display-inline="yes-display-inline">issue subpoenas; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCDBFD81AB5B641079E919A5B445C2555"><enum>(D)</enum><text display-inline="yes-display-inline">in order to enforce a subpoena issued under
subparagraph (C), apply to the United States district court for the judicial
district—</text>
<clause commented="no" display-inline="no-display-inline" id="ID7756472EA34147E28AEAF9AA9B116E0C"><enum>(i)</enum><text display-inline="yes-display-inline">in which the main office of the National
Insurer, National Agency, or affiliate is located;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID38EEC95B000F40448E47199F2A783BB1"><enum>(ii)</enum><text display-inline="yes-display-inline">in which the federally licensed insurance
producer is located; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDBD9CC9693A9340BC98C8242501C5AF27"><enum>(iii)</enum><text display-inline="yes-display-inline">in which the witness resides or carries on
business.</text>
</clause></subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDFC7EF87F498A4874803BA664CF80C659" section-type="subsequent-section"><enum>1122.</enum><header>Examination fees
and other assessments</header>
<subsection commented="no" display-inline="no-display-inline" id="ID96C939A6176C49529073E76F9AFA8173"><enum>(a)</enum><header>Examination
Fee</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID3E0BE32D553D4B9A99CA5538E506BC82"><enum>(1)</enum><header>National
insurers, national agencies, and federally licensed insurance
producers</header><text display-inline="yes-display-inline">The Commissioner
shall assess the cost of conducting examinations of National Insurers, National
Agencies, and federally licensed insurance producers against each such Insurer,
Agency, or producer, as the Commissioner determines to be appropriate.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC70B3BF7847848FEBAF5107BAE22153F"><enum>(2)</enum><header>Affiliates</header><text display-inline="yes-display-inline">The Commissioner shall assess the cost of
conducting examinations of affiliates against each such affiliate, as the
Commissioner determines to be appropriate.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8623B561C19649BDA3A5E53370DE3778"><enum>(3)</enum><header>Refusal to
pay</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID4B6BD3063E174452A83E0BA936719340"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to
subparagraph (B), if any affiliate refuses to pay an assessment imposed
pursuant to paragraph (2), the Commissioner may assess such cost against the
affiliated National Insurer or National Agency.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD1B8B6B1924A4BEBA027899B860072D1"><enum>(B)</enum><header>Shared
affiliates</header><text display-inline="yes-display-inline">If an affiliate is
an affiliate of more than 1 National Insurer or National Agency, the assessment
with respect to that affiliate may be assessed against, and collected from, any
affiliated National Insurer or National Agency, in such proportions as the
Commissioner may prescribe.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDD0A0F694216E4EF89E6503958EF25A9F"><enum>(b)</enum><header>Processing
Fee</header><text display-inline="yes-display-inline">The Commissioner may
assess a fee against any person who submits to the Office an application,
filing, statement, notice, or request for approval to cover the cost of
processing such submission.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDBD0078DBD2424CB4A7464EAB4FB5E98C"><enum>(c)</enum><header>Other
Assessments</header><text display-inline="yes-display-inline">The Commissioner
may assess against National Insurers, National Agencies, and federally licensed
insurance producers such additional fees as the Commissioner determines to be
necessary and appropriate to fund the expenses of the Office.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDe4b34e04cea04360a9d4e4f6801449b2"><enum>(d)</enum><header>Notice</header><text display-inline="yes-display-inline">The Commissioner shall notify National
Insurers, National Agencies, and federally licensed insurance producers
of—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID21a9197a5db64e5f89b1214b50717574"><enum>(1)</enum><text display-inline="yes-display-inline">the initial fees and assessments imposed
under this section; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDb0b53d7cb812433db30c04d19799476d"><enum>(2)</enum><text display-inline="yes-display-inline">any change in fees and assessments.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDE5169FA8C0834AD3967667260BCD1206"><enum>(e)</enum><header>Treatment of
Fees and Assessments</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDACA1F8AC07194E538284FFE814B8E396"><enum>(1)</enum><header>Deposits</header><text display-inline="yes-display-inline">Amounts received by the Commissioner from
fees and assessments imposed under this section shall be deposited in the
manner provided in section 5234 of the Revised Statutes (12 U.S.C. 192) with
respect to assessments by the Comptroller of the Currency.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5329FFBA5A9B42678D319000E4288C7C"><enum>(2)</enum><header>Government
funds; apportionment</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law,
amounts received by the Commissioner from any fee or assessment imposed under
this section—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID63AFBCC8C25F4F69AA203ED79D0F2527"><enum>(A)</enum><text display-inline="yes-display-inline">shall not be considered Government or
public funds or appropriated money; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID247B11076B754C758D04C4554B58D5B9"><enum>(B)</enum><text display-inline="yes-display-inline">shall not be subject to apportionment for
purpose of chapter 15 of title 31, United States Code, or under any other
authority.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID25F2FC49DD504965AA1BF2C5F0020756"><enum>(f)</enum><header>Working Capital
Fund</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID259C7A58E8474B2295E0B981C7E23888"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may
impose fees and assessments pursuant to subsections (a), (b), and (c), in
excess of actual expenses for any given year, to maintain an appropriate
working capital fund.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2F89DAC3D5F743C2B8B9E8C399A838C2"><enum>(2)</enum><header>Refunds</header><text display-inline="yes-display-inline">The Commissioner shall remit to the payers
of such fees and assessments any funds collected in excess of what the
Commissioner determines to be necessary to maintain such working capital
fund.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID57B45D1E215C49C39D90976A38E8130C"><enum>(g)</enum><header>Use of
Funds</header><text display-inline="yes-display-inline">The Commissioner may
use the combined resources collected through fees and assessments imposed
pursuant to this section to pay all direct and indirect operating costs of the
Office, including the salary and administrative expenses of the Office.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID68A84D491E47473B9AA7C3015A8BF56C"><enum>(h)</enum><header>Appropriations
During Start-Up Period</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID5AB6BDC17FD54FEB8262DE965CF20AD2"><enum>(1)</enum><header>Authorization</header><text display-inline="yes-display-inline">The Commissioner may borrow from the
Secretary of the Treasury such funds as the Commissioner determines to be
necessary and appropriate to organize and begin operations of the
Office.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6FBAE2A375F64521B5FA03D0DB379B08"><enum>(2)</enum><header>Payment</header><text display-inline="yes-display-inline">Any loan extended pursuant to paragraph (1)
shall be repaid, in full (with interest at a rate set by the Secretary of the
Treasury), within 30 years following the date of enactment of this Act, with
individual payments on any loan to be made in such amounts and at such times as
the Commissioner determines to be appropriate.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID02798A2A0DE74377A75FF00CDAD53D20"><enum>(i)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Commissioner shall promulgate
regulations with respect to the computation, assessment, and collection of the
fees and assessments provided for in this section.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID0b73bcbacf3c4698b04b4306de6fd343" section-type="subsequent-section"><enum>1123.</enum><header>Disclosure of
information</header>
<subsection commented="no" display-inline="no-display-inline" id="ID6e79ecfbfc9f403786d59a722aa23f99"><enum>(a)</enum><header>Regulations
required</header><text display-inline="yes-display-inline">The Commissioner
shall, by regulation, establish standards for the disclosure of examination
reports, applications, filings, correspondence, records, and other information
prepared by, or submitted to, the Commissioner.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDf0de37d6997247a6b1b77f1aef4a51fc"><enum>(b)</enum><header>Supervisory
privilege</header><text display-inline="yes-display-inline">The regulation
issued pursuant to subsection (a) shall prohibit the disclosure of confidential
supervisory information, as such information is defined by the Commissioner in
such regulation.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDcbdfa76d53d2498cab101bb3d27e5606"><enum>(c)</enum><header>Other
privileges</header><text display-inline="yes-display-inline">The submission of
any information to the Commissioner shall not waive or otherwise affect any
privilege a person may claim with respect to such information under Federal or
State law as to a party other than the Commissioner.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID21D128F24DB542658A7DAA2BD6158975" section-type="subsequent-section"><enum>1124.</enum><header>Reporting
requirement</header>
<subsection commented="no" display-inline="no-display-inline" id="ID6F3539D8B493487AAF8A9B018656DDBC"><enum>(a)</enum><header>General
Authority</header><text display-inline="yes-display-inline">The Commissioner is
authorized to require National Insurers and National Agencies to make such
reports, containing such information and in such form, as the Commissioner may
prescribe by regulation.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDA3F6C5CD1C2042919FD8CA1369AE224A"><enum>(b)</enum><header>Financial
Statements</header><text display-inline="yes-display-inline">Each National
Insurer holding a Federal license shall submit annual and quarterly financial
statements, in compliance with the accounting principles and auditing standards
specified under section 1211, to the Commissioner at such times and in such
form as the Commissioner may require under regulations promulgated pursuant to
subsection (c).</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDF0816FE6FBA34420834545AD2B3F8EE4"><enum>(c)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Commissioner shall promulgate
regulations that—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDC662B0EEA5A645F89A8B93C11C07EFCB"><enum>(1)</enum><text display-inline="yes-display-inline">specify the information that shall be
disclosed in the financial statements required under subsection (b); and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID790326A8826F4BD4B2CF2F1E0500E026"><enum>(2)</enum><text display-inline="yes-display-inline">specify any additional financial schedules
that National Insurers shall make available for examination by the Commissioner
upon request.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID6B18978BBDA54D46924A50B9C9E537C7" section-type="subsequent-section"><enum>1125.</enum><header>Relationship to
State law</header>
<subsection commented="no" display-inline="no-display-inline" id="ID5355ABE225A9409D8AFFB95DF54B306C"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">Except as provided
under subsection (b) or otherwise authorized under Federal law, National
Insurers, National Agencies, and federally licensed insurance producers shall
not be subject to any form of State licensing, examination, reporting,
regulation, or other supervision relating to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID1B816B46CEFC41C98EE8182D7A1A7062"><enum>(1)</enum><text display-inline="yes-display-inline">the sale, solicitation, or negotiation of
insurance;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCE1E25B1565F49C1962FD29E6751BABB"><enum>(2)</enum><text display-inline="yes-display-inline">the underwriting of insurance; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID27A7C0E820454EE792FAAEDFF02D5B95"><enum>(3)</enum><text display-inline="yes-display-inline">any other insurance operations, including
all products, marketing and sales practices, claims adjustment and settlement,
financial condition and solvency, and holding company transactions.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID147E0860335B4496A99F2E9432C3F57E"><enum>(b)</enum><header>Applicable
State Laws</header><text display-inline="yes-display-inline">Notwithstanding
subsection (a), National Insurers, National Agencies, and federally licensed
insurance producers shall be subject to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID43E007A415974BD682D31878F7282074"><enum>(1)</enum><text display-inline="yes-display-inline">applicable State unclaimed property and
escheat laws;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID78BE4A95BDD140F28F66B16992D84953"><enum>(2)</enum><text display-inline="yes-display-inline">applicable tax laws of a State in
accordance with sections 1251 and 1252;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5CDF0882C05D41E7B441566B7263FD41"><enum>(3)</enum><text display-inline="yes-display-inline">applicable State law relating to
participation in an assigned risk plan, mandatory joint underwriting
association, or any other mandatory residual market mechanism designed to make
insurance available to those unable to obtain insurance in the voluntary
market, except to the extent that such State law—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE78FFDD3F418498F942AE32083DB75BE"><enum>(A)</enum><text display-inline="yes-display-inline">relates to participation in any voluntary
joint underwriting association or similar arrangement;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID47FA0BD3A1AF492AA75D33F95F85174F"><enum>(B)</enum><text display-inline="yes-display-inline">results in rates in effect for an assigned
risk plan, mandatory joint underwriting association, or any other mandatory
residual market mechanism that fail to cover the expected value of all future
costs associated with insurance policies written by such residual market
mechanism;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDACA530395D8F4C3894C1C6C14353D88C"><enum>(C)</enum><text display-inline="yes-display-inline">requires a National Insurer to use any
particular rate, rating element, price or form; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6668E8D4C2E243FB81F4C47E659A0907"><enum>(D)</enum><text display-inline="yes-display-inline">is inconsistent with any provision of this
Act;</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID42C27352B3E44B119F113ECD684B0887"><enum>(4)</enum><text display-inline="yes-display-inline">applicable State insurance law that
prescribes the compulsory coverage requirements for workers’ compensation or
motor vehicle insurance, or both, that every insurer must provide if the
insurer issues insurance policies in such State, except to the extent that such
State law requires a National Insurer to use any particular rate, rating
element, or price;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBD5DD49727034CA3BFE9DC6D8A47A6E3"><enum>(5)</enum><text display-inline="yes-display-inline">applicable State insurance law mandating
the participation of insurers in an advisory or statistical organization,
except to the extent that such State law requires a National Insurer to use any
particular rate, rating element, price, or form; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF63E74A7251B412BBCA3992A6B192956"><enum>(6)</enum><text display-inline="yes-display-inline">applicable State law relating to
participation in a workers’ compensation administration mechanism, except to
the extent that such State law is inconsistent with any provision of this
Act.</text>
</paragraph></subsection></section></subtitle><subtitle commented="no" id="ID865CB44E7C3B46E7BB77DD65095C637C" style="OLC"><enum>C</enum><header>Enforcement of Federal Insurance
Laws</header>
<section commented="no" display-inline="no-display-inline" id="ID9D63B1692EA64C60B26125BD9471A7EA" section-type="subsequent-section"><enum>1141.</enum><header>National Insurer
license suspension, restriction, or revocation</header>
<subsection commented="no" display-inline="no-display-inline" id="IDAABD273CFB9F42819AB968FA565FE19C"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">In accordance with
the conditions under this section, the Commissioner may revoke or restrict the
Federal license of a National Insurer if the Commissioner determines that the
National Insurer—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDCAF8D15BB10C4C2298D88574BF08D6F3"><enum>(1)</enum><text display-inline="yes-display-inline">has engaged in conduct that is hazardous to
the National Insurer and that involves an undue risk to the National Insurer’s
policyholders;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1B1FF4748CBF475693E4592D1F751234"><enum>(2)</enum><text display-inline="yes-display-inline">is in a financial or other condition that
is not consistent with the continuation of existing operations; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID05860728EECA41A6B60404D551F34BD4"><enum>(3)</enum><text display-inline="yes-display-inline">has violated any—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2465E6F9A5714E348ABF6B4ECA585CB2"><enum>(A)</enum><text display-inline="yes-display-inline">applicable law or regulation;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDEB4E384CD1644716ADB5DD97F4E12D78"><enum>(B)</enum><text display-inline="yes-display-inline">order or condition imposed in writing by
the Commissioner in connection with the approval of an application, filing,
statement, notice, or other request by the National Insurer; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID23376F5C8ADE4D95B0D1EA96C0DB400B"><enum>(C)</enum><text display-inline="yes-display-inline">written agreement entered into between the
National Insurer and the Commissioner.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID25CAE66B046049E099CEC671695DAF98"><enum>(b)</enum><header>Notice To
National Insurer</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDC4178D7A379A4ED2B123E17D2A39B5F7"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">If the Commissioner
determines under subsection (a) that the Federal license of a National Insurer
should be revoked or restricted, the Commissioner shall—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID91848DE1F5F94416B0DB3303FAFF9E32"><enum>(A)</enum><text display-inline="yes-display-inline">serve the National Insurer with written
notice of the intent of the Commissioner to revoke or restrict such Federal
license;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID77F3F475756E46B7969334C4DA87502B"><enum>(B)</enum><text display-inline="yes-display-inline">provide the National Insurer with a
statement of the basis for the determination to revoke or restrict such Federal
license; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDEA4D263CA5654F049793A236C99FF698"><enum>(C)</enum><text display-inline="yes-display-inline">notify, not less than 30 days before a
hearing under subsection (c), of the date and place of the hearing.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1FBA7D0B8C744938A35B2E2BE0AD8B59"><enum>(2)</enum><header>Notice of
service</header><text display-inline="yes-display-inline">Any service required
or authorized to be made by the Commissioner under this section may be made by
registered mail, or in such other manner reasonably calculated to give actual
notice as the Commissioner may by regulation or otherwise provide.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID305B4079A4A64B9384AA1955780971CE"><enum>(c)</enum><header>Revocation or
Restriction Hearing</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID39FBE2F726E440838F8D018A9E164775"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Before revoking or
restricting a Federal license, the Commissioner shall conduct a hearing in
accordance with section 554 of title 5, United States Code, to determine if the
conditions described in subsection (a) exist.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID67045F208EEF4818940BE1093123D96E"><enum>(2)</enum><header>Authority to
revoke or restrict federal license</header><text display-inline="yes-display-inline">If, on the basis of the evidence presented
at the hearing under paragraph (1) and the written findings of the Commissioner
with respect to such evidence, the Commissioner establishes the existence of
any conduct, condition, or violation specified in the notice sent to a National
Insurer under subsection (b), the Commissioner may issue an order revoking or
restricting the Federal license of the National Insurer, which shall be
effective as of a date subsequent to such finding.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDE640F1E2E00446F887FFA7B96EDEE13"><enum>(3)</enum><header>Consent to
revocation or restriction</header><text display-inline="yes-display-inline">If
a duly authorized representative of the National Insurer fails to appear at the
hearing under this subsection, the National Insurer shall be deemed to have
consented to the revocation or restriction of its Federal license, and the
Commissioner may immediately revoke or restrict such Federal license.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID1FA21AC5E3804FF390DDF044938F1753"><enum>(d)</enum><header>Publication of
Notice of Revocation or Restriction</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID1408FB86B3CE40EB9ED93F827DBCA8C8"><enum>(1)</enum><header>Notice by
national insurer</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID82CAB5215C7C49DC9187A720886D2A28"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The National Insurer
shall give notice of a revocation or restriction of its Federal license under
this section to each policyholder affected by the revocation or
restriction.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID78DC7325900C4BD49DD3525C69AFCAE7"><enum>(B)</enum><header>Type of
notice.</header><text display-inline="yes-display-inline">Notice under this
paragraph shall be sent to the policyholder’s last address of record on the
books of the National Insurer, in such manner and at such time as the
Commissioner determines to be necessary for the protection of
policyholders.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4F3072ABD4EA4F8786A4F4736834B90F"><enum>(2)</enum><header>Notice by
commissioner</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9AEBBB4D6789416BA72F1E21979B68E6"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner
shall publish notice of a revocation or restriction under this section. If the
Commissioner determines that a National Insurer has not given notice of an
order under this subsection in accordance with the requirements of the
Commissioner, the Commissioner may provide such notice in such manner as the
Commissioner may find to be necessary and proper.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA96F9BF51EDD48EB9E06579D96C4F3D9"><enum>(B)</enum><header>Costs</header><text display-inline="yes-display-inline">The cost of any notice provided under
subparagraph (A) shall be paid by the National Insurer.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID4883311A09A54F1C9B8CCB8BAB2F0635"><enum>(e)</enum><header>Temporary
Suspension or Restriction</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDED5F74ACFF4A4C77840750B8B7CB30CD"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">If the Commissioner,
in the course of a revocation proceeding under this section, finds that the
National Insurer poses an immediate threat to the interests of its
policyholders or to the public, the Commissioner shall issue an order
temporarily suspending or restricting the Federal license of the National
Insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2019027AA3BD45ED9AA8A57BDDBD214F"><enum>(2)</enum><header>Notice of
temporary order</header><text display-inline="yes-display-inline">A National
Insurer whose Federal license is temporarily suspended or restricted under this
subsection shall give notice of an order issued under this paragraph to each
affected policyholder in such manner and at such times as the Commissioner may
find to be necessary and may order for the protection of policyholders and the
public.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFF9C1B2C24C64D1A9C56E4FA5AFFA21D"><enum>(3)</enum><header>Effective
period of temporary order</header><text display-inline="yes-display-inline">A
temporary order issued under paragraph (1) shall—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID31DF029787CD433B9D26B224E07B0371"><enum>(A)</enum><text display-inline="yes-display-inline">become effective not earlier than 10 days
from the date of service upon the National Insurer; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF134765958594DA8B056D739577EED52"><enum>(B)</enum><text display-inline="yes-display-inline">unless set aside, limited, or suspended by
a court in proceedings authorized under paragraph (4), remain effective and
enforceable until the earlier of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID685B9169F9F648199CB87EF3564E1A69"><enum>(i)</enum><text display-inline="yes-display-inline">the effective date of an order under
subsection (c)(2); or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDDBF3510BDDAC4895883D3477951846E5"><enum>(ii)</enum><text display-inline="yes-display-inline">the date on which the Commissioner
determines that there is insufficient evidence to revoke or restrict a Federal
license under this subsection.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEE4C8AA89AEA451599F3CAFC03F5FF5F"><enum>(4)</enum><header>Judicial
review</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC5E82AB221C744619FA72073A39F3A62"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">During the 10-day
period beginning on the date on which a temporary order has been issued under
paragraph (1), the National Insurer may apply to a court described in
subparagraph (B) for an injunction setting aside, limiting, or suspending the
enforcement, operation, or effectiveness of such order.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6B8D51ECC0F947B2A264313EF35476AC"><enum>(B)</enum><header>Jurisdiction</header><text display-inline="yes-display-inline">The United States District Court for the
District of Columbia and the United States district court for the judicial
district in which the main office of the National Insurer is located shall have
jurisdiction to issue an injunction under this paragraph.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID8712C8F0188F437AB0FC65CEA677E5C0"><enum>(f)</enum><header>Decision To
Suspend, Restrict, or Revoke</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID827EF905DB2B4F6AADEB7535A044C656"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided
under paragraph (2), any decision by the Commissioner to suspend, restrict, or
revoke a Federal license under this section shall be made by the Commissioner
and may not be delegated.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID448A28C8152142DB9290883D12637A77"><enum>(2)</enum><header>Exception</header><text display-inline="yes-display-inline">The Commissioner may, by order, designate
an employee of the Office who may make a decision described in paragraph (1) if
the Commissioner is not able to act by reason of recusal or is otherwise
disqualified from acting.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID7E95670ABDB243AC89D307BAE17A9F44"><enum>(g)</enum><header>Judicial
Review</header><text display-inline="yes-display-inline">Any National Insurer
whose Federal license has been revoked or restricted by order of the
Commissioner under this section shall have the right of judicial review of such
order only to the same extent as provided for the review of orders under
section 1148.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID2387322DB77F4289B2DCFC1D9A55E0D9" section-type="subsequent-section"><enum>1142.</enum><header>Suspension,
restriction, or revocation of Federal license of National Agencies and
federally licensed insurance producers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID7A6CF8C4282B4FB695E095FD92B8F735"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">In accordance with
the provisions of this section, the Commissioner may revoke or restrict the
Federal producer license, including lines of insurance covered by such license,
of a National Agency or other federally licensed insurance producer if the
Commissioner determines that the Agency or producer has—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID0F292EBCB49C4891903EE0D14D44C6A7"><enum>(1)</enum><text display-inline="yes-display-inline">violated any applicable law, regulation,
order, condition imposed in writing by the Commissioner in connection with the
approval of an application, filing, statement, notice or other request by the
producer, or written agreement entered into between the producer and the
Commissioner;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID156641FED67A48118556DACEED29E764"><enum>(2)</enum><text display-inline="yes-display-inline">provided incorrect, misleading, incomplete
or materially untrue information in an application for a Federal charter or a
Federal producer license;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3139AF5548434C93ACDD0E662B29FE0D"><enum>(3)</enum><text display-inline="yes-display-inline">used fraudulent, coercive, or dishonest
practices; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC277EAF25C6B4ACD901F77091A5F4AFE"><enum>(4)</enum><text display-inline="yes-display-inline">demonstrated incompetence,
untrustworthiness, or financial irresponsibility as an insurance
producer.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID796E5192E15142A0959ACA174DDFE8F0"><enum>(b)</enum><header>Notice to
Federally Licensed Insurance Producer</header><text display-inline="yes-display-inline">If the Commissioner determines that any
conduct, breach, or violation specified in subsection (a) requires revocation
or restriction of the Federal producer license of a National Agency or other
federally licensed insurance producer, the Commissioner shall—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID692B2BE13A7E454091C87CE8E81A645D"><enum>(1)</enum><text display-inline="yes-display-inline">serve written notice on the National Agency
or other federally licensed insurance producer of the Commissioner’s intention
to revoke or restrict the Federal producer license;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1F9E322A6BA247C7A5E1330F0D9995E5"><enum>(2)</enum><text display-inline="yes-display-inline">provide the National Agency or other
federally licensed insurance producer with a statement of the basis for the
determination to revoke or restrict the Federal producer license; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID02E7ABCFD5C04A0188CAE267D5C76535"><enum>(3)</enum><text display-inline="yes-display-inline">notify the National Agency or other
federally licensed insurance producer, not less than 30 days before a hearing
under subsection (c), of the date and place of the hearing.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA9C1A6A5650D4570A210EA0B9803900B"><enum>(c)</enum><header>Revocation or
Restriction Hearing</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID0855BDFD50464C969705FD9F31CDD0B7"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Before revoking or
restricting a Federal producer license, the Commissioner shall conduct a
hearing in accordance with section 554 of title 5, United States Code, to
determine if the conditions described in subsection (a) exist.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0CDCDFCF33F14786B6E5954F27DB79C1"><enum>(2)</enum><header>Authority to
revoke or restrict federal license</header><text display-inline="yes-display-inline">If, on the basis of the evidence presented
at the hearing under paragraph (1) and the written findings of the Commissioner
with respect to such evidence, the Commissioner finds any conduct, condition,
or violation specified in the notice sent to a National Agency or other
federally licensed insurance producer under subsection (b), the Commissioner
may issue an order revoking or restricting the Federal producer license of the
National Agency or other federally licensed insurance producer, which shall be
effective as of a date subsequent to such finding.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC578323D988C46488239CE806FD972B5"><enum>(3)</enum><header>Consent to
revocation or restriction</header><text display-inline="yes-display-inline">If
a duly authorized representative of the National Agency or other federally
licensed insurance producer fails to appear at the hearing under this
subsection, the National Agency or other federally licensed insurance producer
shall be deemed to have consented to the revocation or restriction of its
Federal producer license, and the Commissioner may immediately revoke or
restrict such Federal producer license.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID78B3A171901E4226948E4CDB1C987132"><enum>(d)</enum><header>Notice of
Revocation or Restriction</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID275579E99D9D4EC4AE954B1E4884ABBA"><enum>(1)</enum><header>Notice by
federally licensed insurance producer</header><text display-inline="yes-display-inline">Each National Agency or other federally
licensed insurance producer shall give written notice of such revocation or
restriction to each National Insurer, State insurer, or United States branch of
a non-United States insurer for which such producer acts as an insurance
producer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEF5D9731DFB8499082813B0F5CECB21F"><enum>(2)</enum><header>Notice by
commissioner</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDEE97A31CDA9E481D90F3CE85F2458D5E"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner
shall publish notice of a revocation or restriction under this section. If the
Commissioner determines that a National Agency or other federally licensed
insurance producer has not given notice of an order under this subsection in
accordance with the requirements of the Commissioner, the Commissioner may
provide such notice in any manner the Commissioner determines to be necessary
and proper.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8E2BE29208C94C689019564B179FE4A9"><enum>(B)</enum><header>Costs</header><text display-inline="yes-display-inline">The cost of any notice provided under
subparagraph (A) shall be paid by the National Agency or other federally
licensed insurance producer.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID69116F48B11140CA80B96F69CE6CD581"><enum>(e)</enum><header>Temporary
Suspension or Restriction</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDDD1E99AB4919480583994B06CE9DE5CA"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">If the Commissioner,
in the course of a revocation or restriction proceeding under this section,
finds that the National Agency or other federally licensed insurance producer
poses an immediate threat to the interests of the policyholders of a National
Insurer, a State insurer, or a United States branch of a non-United States
insurer or to the public, the Commissioner may issue a temporary order
suspending or restricting the Agency’s or other producer’s Federal producer
license.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBDE05335704E42978981DA4C6B91C2DF"><enum>(2)</enum><header>Notice of
temporary order</header><text display-inline="yes-display-inline">The National
Agency or other federally licensed insurance producer shall give notice of a
temporary order issued under this paragraph in such manner and at such times as
the Commissioner may find to be necessary and may order for the protection of
policyholders and the public.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD43DC2BD9FD14B829189F663172D08AA"><enum>(3)</enum><header>Effective
period of temporary order</header><text display-inline="yes-display-inline">Any
temporary order issued under paragraph (1) shall—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID596C374B38B04C379A41996D19E8450B"><enum>(A)</enum><text display-inline="yes-display-inline">become effective not earlier than 10 days
from the date of service upon the National Agency or other federally licensed
insurance producer; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID62E9AF554F144302821D83F59F8562E2"><enum>(B)</enum><text display-inline="yes-display-inline">unless set aside, limited, or suspended by
a court under paragraph (4), remain effective and enforceable until an order of
the Commissioner under subsection (c) becomes final or until the Commissioner
dismisses the proceedings under paragraph (4).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID06175461CFF949EBB3C012E743EB9DE0"><enum>(4)</enum><header>Judicial
review</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8318E23329554524BAE8E5673BC70CB0"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">During the 10-day
period beginning on the date on which a temporary order has been issued under
paragraph (1), the National Agency or other federally licensed insurance
producer may apply to a court described in subparagraph (B) for an injunction
setting aside, limiting, or suspending the enforcement, operation, or
effectiveness of such order.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDDF2F7C85A4EF4E338F48D2B69A74116D"><enum>(B)</enum><header>Jurisdiction</header><text display-inline="yes-display-inline">The United States District Court for the
District of Columbia and the United States district court for the judicial
district in which the federally licensed insurance producers (or the main
office of the National Agency) is located shall have jurisdiction to issue an
injunction under this paragraph.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID5FB8485E510D4EEAAF48A1F0FF685A79"><enum>(f)</enum><header>Judicial
Review</header><text display-inline="yes-display-inline">Any National Agency or
other federally licensed insurance producer whose Federal producer license has
been revoked or restricted by order of the Commissioner under this subsection
shall have the right of judicial review of such order only to the same extent
as provided for the review of orders under section 1148.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDE17D82FBCF7B445DBEB94689304755CE" section-type="subsequent-section"><enum>1143.</enum><header>Cease-and-desist
proceedings</header>
<subsection commented="no" display-inline="no-display-inline" id="IDFB826205F8944BBF9475A40049022EAF"><enum>(a)</enum><header>Notice</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID48A4683309194A80A3F461806A7ECD30"><enum>(1)</enum><header>Issuance</header><text display-inline="yes-display-inline">The Commissioner may issue and serve upon a
National Insurer, National Agency, federally licensed insurance producer, or
insurer-affiliated party a notice of charges if the Commissioner determines
that such Insurer, Agency, producer, or party—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDD0CD31661A7C44FFA8B78EEC5855A1A7"><enum>(A)</enum><text display-inline="yes-display-inline">has engaged, or is about to engage, in
conduct that is hazardous to a National Insurer, a State insurer, or a United
States branch of a non-United States insurer and involves an undue risk to the
policyholders, as a whole, of a National Insurer, a State insurer, or a United
States branch of a non-United States insurer; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0E426CBBBFE941EB8CC38C0A50634352"><enum>(B)</enum><text display-inline="yes-display-inline">has violated, or is about to
violate—</text>
<clause commented="no" display-inline="no-display-inline" id="IDC12895F5DC064A5FA82C3711BDFD4413"><enum>(i)</enum><text display-inline="yes-display-inline">a law, rule, or regulation;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID00F0481689E246EBBFF43B3A0BC9D0F2"><enum>(ii)</enum><text display-inline="yes-display-inline">any condition imposed in writing by the
Commissioner in connection with the granting of any application, filing,
statement, notice, or other request by the National Insurer, National Agency or
the federally licensed insurance producer; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDECCAF10FDF8B49898EF9F79843398404"><enum>(iii)</enum><text display-inline="yes-display-inline">any written agreement entered into with the
Commissioner.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1D09FB0F2D3742D0A8624DB5496ABAAD"><enum>(2)</enum><header>Contents</header><text display-inline="yes-display-inline">The notice issued under paragraph (1)
shall—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA0343B130B134084BF5B62F9377D16F6"><enum>(A)</enum><text display-inline="yes-display-inline">contain a statement of the facts
constituting the alleged violations; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID02ADFB624F8E4CEAB60908DBA81B88CD"><enum>(B)</enum><text display-inline="yes-display-inline">state the time and place at which a hearing
will be held to determine whether an order to cease and desist should be issued
against the National Insurer, National Agency, federally licensed insurance
producer, or insurer-affiliated party.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID0DEE7D05975640DC8EF86F8E4AF08830"><enum>(b)</enum><header>Hearing</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID4F02B25B40BE472F820AA1C8BC0B4D2A"><enum>(1)</enum><header>Timing</header><text display-inline="yes-display-inline">A hearing under this section shall be
scheduled for a date which is not earlier than 30 days nor later than 60 days
after the service of notice under subsection (a) unless another date is set by
the Commissioner at the request of any party so served.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID853318F67A93458D918DDA5CF14C461F"><enum>(2)</enum><header>Consent</header><text display-inline="yes-display-inline">If a duly authorized representative of a
party served notice under subsection (a) fails to appear at a hearing under
this section, the party shall be deemed to have consented to the issuance of
the cease-and-desist order.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDC6F49242F6ED443988F98D0B29B25427"><enum>(c)</enum><header>Cease-and-Desist
Order</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDF6ED497D01314120B096389E9044126B"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">If the Commissioner
finds, upon the record made at a hearing under this section, that any violation
or conduct specified in the notice of charges has been established, or if the
party consents, the Commissioner may issue and serve upon the National Insurer,
National Agency, federally licensed insurance producer, or insurer-affiliated
party, an order to cease and desist from any such violation or conduct.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEB91913E1A2E44D79BF81770F49ECBEE"><enum>(2)</enum><header>Contents</header><text display-inline="yes-display-inline">A cease-and-desist order under this section
may—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA20B1FFD2FCE4208A65230163ABFB2EA"><enum>(A)</enum><text display-inline="yes-display-inline">require the National Insurer, National
Agency, federally licensed insurance producer, or insurer-affiliated party to
cease and desist from the alleged violation or conduct; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB6086EF62D0140D8AE1024C5C4ADC4E0"><enum>(B)</enum><text display-inline="yes-display-inline">take affirmative action to correct the
conditions resulting from any such violation or conduct.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID93CF8B40DFA647AB965592BA2F1509C7"><enum>(3)</enum><header>Effective
date</header><text display-inline="yes-display-inline">A cease-and-desist order
shall—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID69E621ABF0094D8EB4980C0FC3EF5CDA"><enum>(A)</enum><text display-inline="yes-display-inline">take effect on the expiration of the date
which is 30 days after the service of such order upon the party or on another
date, if issued upon consent; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5A7553D4B12C4E2B9EE1E6E2C97D64E3"><enum>(B)</enum><text display-inline="yes-display-inline">remain in effect and enforceable as
provided therein, unless stayed, modified, terminated, or set aside by action
of the Commissioner or a reviewing court.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID75DA812054084DB0A9109188B052E49F"><enum>(4)</enum><header>Authority to
limit activities</header><text display-inline="yes-display-inline">The
authority to issue an order under this section includes the authority to place
limitations on the activities or functions of a National Insurer, National
Agency, a federally licensed insurance producer or an insurer-affiliated
party.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID22AB9BF155D34312B6C0E93FF67961BD"><enum>(5)</enum><header>Standard for
certain orders</header><text display-inline="yes-display-inline">No authority
under this section to prohibit any insurer-affiliated party from withdrawing,
transferring, removing, dissipating, or disposing of any funds, assets, or
other property may be exercised unless the Commissioner meets the standards of
Rule 65 of the Federal Rules of Civil Procedure, without regard to the
requirement of such rule that the applicant show that the injury, loss, or
damage is irreparable and immediate.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID8DEAE516E97D4D468ABAD660C954A78E"><enum>(d)</enum><header>Temporary
Cease-and-Desist Orders</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID604056C7712A41F59289103724798184"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">If the Commissioner
determines that the violation, threatened violation, or conduct specified in
the notice of charges served under subsection (c)(1) is likely to cause
insolvency or significant dissipation of assets or earnings of a National
Insurer, a State insurer, a United States branch of a non-United States insurer
or is likely to weaken the condition of a National Insurer, a State insurer, or
a United States branch of a non-United States insurer or otherwise prejudice
the interests of the policyholders of a National Insurer, a State insurer, or a
United States branch of a non-United States insurer before the completion of
the proceedings conducted under subsection (c)(1), the Commissioner may issue a
temporary order requiring the National Insurer, National Agency, producer, or
party to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC8EA6A2B5608484F851D2DDFB9CF1DAC"><enum>(A)</enum><text display-inline="yes-display-inline">cease and desist from any such violation or
conduct; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE230A95546604FA683EFDDA33865D3C3"><enum>(B)</enum><text display-inline="yes-display-inline">take affirmative action to prevent or
remedy such insolvency, dissipation, condition, or prejudice pending completion
of such proceedings.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID901EA8D72C754B0291E65A1B1F2E1A07"><enum>(2)</enum><header>Contents of
order; effective date</header><text display-inline="yes-display-inline">An
order under paragraph (1)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID85BA751DCE2646288090BBB32EB2DFF0"><enum>(A)</enum><text display-inline="yes-display-inline">may include any action authorized under
section 1144(2);</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDACA96CB97E294511BDFE964B8225AF4D"><enum>(B)</enum><text display-inline="yes-display-inline">shall become effective upon service upon
the National Insurer, National Agency, producer, or party; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6F89C0613A1D4D639A8E1953FAF75C36"><enum>(C)</enum><text display-inline="yes-display-inline">unless set aside, limited, or suspended by
a court under paragraph (3), shall remain in effect and enforceable until the
date on which—</text>
<clause commented="no" display-inline="no-display-inline" id="ID0ABB00B1F0FB48A19978EA5CCAFD1F69"><enum>(i)</enum><text display-inline="yes-display-inline">administrative proceedings pursuant to such
order are completed;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID69797225D1474FBA8D4036A2895DA2C5"><enum>(ii)</enum><text display-inline="yes-display-inline">the Commissioner dismisses the charges
specified in such order; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8C53E265DD884110822BE2DF3E7A6C0F"><enum>(iii)</enum><text display-inline="yes-display-inline">if a cease-and-desist order is issued
against such National Insurer, National Agency, producer, or party, such order
is effective.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID29037937AD494474B40C149834071910"><enum>(3)</enum><header>Injunction</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDAF1C4909AA0E4BE2B714E72204C90877"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">A National Insurer,
National Agency, federally licensed insurance producer, or insurer-affiliated
party that has been served with a temporary cease-and-desist order may, not
later than 10 days after the date of such service, apply to a court described
in subparagraph (B) for an injunction setting aside, limiting, or suspending
the enforcement, operation, or effectiveness of such order until the completion
of administrative proceedings under this section.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID61351C4442A94DBB9F7AF79848529738"><enum>(B)</enum><header>Jurisdiction</header><text display-inline="yes-display-inline">The United States District Court for the
District of Columbia and the United States district court for the judicial
district in which the producer, party, or main office of the National Insurer
or National Agency is located shall have jurisdiction to issue an injunction
under this paragraph.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID96CA7D381AAC43509E6B5F58D3AA6B6D"><enum>(4)</enum><header>Incomplete or
inaccurate records</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID66A603C08DEF41B29ECF2CC4E2485409"><enum>(A)</enum><header>Temporary
order</header><text display-inline="yes-display-inline">If a notice of charges
served under subsection (a) specifies, on the basis of particular facts and
circumstances, that the books and records of a National Insurer are so
incomplete or inaccurate that the Commissioner is unable, through the normal
supervisory process, to determine the financial condition of that National
Insurer or the details or purpose of any transaction or transactions that may
have a material effect on the financial condition of that National Insurer, the
Commissioner may issue a temporary order requiring—</text>
<clause commented="no" display-inline="no-display-inline" id="ID40AA0DDB77364D55A6D4265EE209456D"><enum>(i)</enum><text display-inline="yes-display-inline">the cessation of any activity or practice
which gave rise to the incomplete or inaccurate state of the books or records;
or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID28A175EE5BD7473787261C7F9BF6A5C0"><enum>(ii)</enum><text display-inline="yes-display-inline">affirmative action to restore such books or
records to a complete and accurate state.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD749C69F1F7F4E6B9A90479A913DA287"><enum>(B)</enum><header>Effective
period</header><text display-inline="yes-display-inline">Any temporary order
issued under subparagraph (A)—</text>
<clause commented="no" display-inline="no-display-inline" id="ID651F0543D9CA4FDEB2A95357FF7783BA"><enum>(i)</enum><text display-inline="yes-display-inline">shall become effective upon service;
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDFAD8D3F20D24408C9AD6D22CA8F860EC"><enum>(ii)</enum><text display-inline="yes-display-inline">unless set aside, limited, or suspended by
a court in proceedings under paragraph (2), shall remain in effect and
enforceable until the earlier of—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID45C93A816435426E8650001E34E68B7C"><enum>(I)</enum><text display-inline="yes-display-inline">the completion of the proceeding initiated
under subsection (a) in connection with the notice of charges; or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDD9675B18CE7749858E0A226605E8C9C8"><enum>(II)</enum><text display-inline="yes-display-inline">the date the Commissioner determines, by
examination or otherwise, that the books and records of the National Insurer
accurately reflect the financial condition of the National Insurer.</text>
</subclause></clause></subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID957B5AF672BF40FFA366A0E58D992B05" section-type="subsequent-section"><enum>1144.</enum><header>Affirmative action
to correct conditions resulting from violations or conduct</header><text display-inline="no-display-inline">The authority granted to the Commissioner
under this subtitle to issue an order that requires a National Insurer,
National Agency, a federally licensed insurance producer, or an
insurer-affiliated party to take affirmative action to correct or remedy any
condition resulting from any violation or conduct with respect to which such
order is issued includes the authority to require such National Insurer,
National Agency, producer or party to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID9A2CAC297D28490489FF065B726DADAC"><enum>(1)</enum><text display-inline="yes-display-inline">restrict the growth of the National
Insurer;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB2679280E6804FBF9416855376325723"><enum>(2)</enum><text display-inline="yes-display-inline">dispose of any asset or insurance contract,
including any insurance policy;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0546F257D58747B088AEF58C352C6C90"><enum>(3)</enum><text display-inline="yes-display-inline">rescind any other agreements or contracts,
other than insurance contracts, to which the National Insurer is the
issuer;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID314A91C4783F44D9812125CA7D2BC252"><enum>(4)</enum><text display-inline="yes-display-inline">employ qualified officers or employees,
subject to approval by the Commissioner; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0352168F0E1C46A7996092D0DB4464B1"><enum>(5)</enum><text display-inline="yes-display-inline">take such other action as the Commissioner
determines to be appropriate if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5EBB301BC56D4FD29DAD3CCAB6808CE0"><enum>(A)</enum><text display-inline="yes-display-inline">such National Insurer, National Agency,
producer, or party was unjustly enriched in connection with such violation or
conduct; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAFA90CDDD3D94A16A1AEE090387D601D"><enum>(B)</enum><text display-inline="yes-display-inline">the violation or conduct involved a
reckless disregard for the law or any applicable regulations or prior order of
the Commissioner.</text>
</subparagraph></paragraph></section><section commented="no" display-inline="no-display-inline" id="IDC17425918E36417C9126ED219D6C2919" section-type="subsequent-section"><enum>1145.</enum><header>Suspension,
removal, and prohibition authority</header>
<subsection commented="no" display-inline="no-display-inline" id="ID4EDBD30E5E4F495689E9CEF7119E38AB"><enum>(a)</enum><header>Authority To
Issue Order</header><text display-inline="yes-display-inline">The Commissioner
may serve a written notice of the Commissioner’s intention to suspend or remove
a party from office or to prohibit any further participation by such party in
the conduct of the affairs of any National Insurer or National Agency, if the
Commissioner determines that—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDC4A14F70C7734286BE865C0A79CDB21D"><enum>(1)</enum><text display-inline="yes-display-inline">an insurer-affiliated party has—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID515351DBCA7E496488E287410E8F192C"><enum>(A)</enum><text display-inline="yes-display-inline">violated—</text>
<clause commented="no" display-inline="no-display-inline" id="ID75AC6384CEC649AFAAD9B62AB8F1BC8C"><enum>(i)</enum><text display-inline="yes-display-inline">any law or regulation;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDF7FCF69CE8724DB292705832BB2004E2"><enum>(ii)</enum><text display-inline="yes-display-inline">any final cease-and-desist order issued
under section 1143;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID31F2C095D08A45149D3972521B1F5C15"><enum>(iii)</enum><text display-inline="yes-display-inline">any condition imposed in writing by the
Commissioner in connection with the grant of any application, filing,
statement, notice, or other request by such National Insurer or National
Agency; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID60A3EEB07ADF47D7856A20057884EB33"><enum>(iv)</enum><text display-inline="yes-display-inline">any written agreement between such National
Insurer or National Agency and the Commissioner;</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE58892593ED14EA59C23B003E003052A"><enum>(B)</enum><text display-inline="yes-display-inline">engaged or participated in any conduct
that—</text>
<clause commented="no" display-inline="no-display-inline" id="ID982D585E1DC940F5981CCE84352A2A3F"><enum>(i)</enum><text display-inline="yes-display-inline">is hazardous to the National Insurer or
National Agency; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDA24DB67B786C45988B02E67D46D5C32B"><enum>(ii)</enum><text display-inline="yes-display-inline">involves an undue risk to the policyholders
of such National Insurer or the policyholders serviced by such National Agency;
or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID53379D5562AB431795087E910069D258"><enum>(C)</enum><text display-inline="yes-display-inline">committed or engaged in any act, omission,
or practice, which constitutes a breach of fiduciary duty;</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB3FF768D65CC40BCAC52B17A68F9A8E1"><enum>(2)</enum><text display-inline="yes-display-inline">through any violation, conduct, practice,
or breach described in paragraph (1)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA05FD48988914669A556917F1186D06F"><enum>(A)</enum><text display-inline="yes-display-inline">such National Insurer or National Agency
has suffered, or will probably suffer, financial loss or other damage;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID455E9A7F00AA41B59A8580802A17F918"><enum>(B)</enum><text display-inline="yes-display-inline">the interests of the policyholders of the
National Insurer or the policyholders serviced by the National Agency have
been, or could be, prejudiced; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE7748710B3024AE9837D19B61F420B38"><enum>(C)</enum><text display-inline="yes-display-inline">such party has received financial gain or
other benefit by reason of such violation, practice, or breach; and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEB43FAFEBE7047AEB57580E6BA1E8F42"><enum>(3)</enum><text display-inline="yes-display-inline">the violation, conduct, practice, or
breach—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9A543A8F350B401B8E0B89626707E849"><enum>(A)</enum><text display-inline="yes-display-inline">involves personal dishonesty on the part of
such party; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID9CF6422F50FE4654A92209668C120DC3"><enum>(B)</enum><text display-inline="yes-display-inline">demonstrates willful or continuing
disregard by such party for the condition of such National Insurer or National
Agency or the interests of the National Insurer’s policyholders or the
policyholders serviced by the National Agency.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB34F2BC46C82456FBB732691B358F2A2"><enum>(b)</enum><header>Temporary
Suspension Order</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDA93F91360AE54BE8B26B0162C156B001"><enum>(1)</enum><header>Suspension or
prohibition authorized</header><text display-inline="yes-display-inline">If the
Commissioner serves written notice under subsection (a) on any
insurer-affiliated party of the Commissioner’s intention to issue an order
under such subsection, the Commissioner may issue a temporary order suspending
such party from office or prohibiting such party from further participation in
any manner in the conduct of the affairs of the National Insurer or National
Agency, if the Commissioner—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC73CC526FB5A4553BAB9AD4AF813FDF7"><enum>(A)</enum><text display-inline="yes-display-inline">determines that such action is necessary
for the protection of the National Insurer or its policyholders or the National
Agency or the policyholders serviced by such Agency; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7F8473BD8F764BA9961566E72E4FAB1C"><enum>(B)</enum><text display-inline="yes-display-inline">serves such party with the temporary order
of suspension or prohibition.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF045B571DA994AD2864CA3F2008229FC"><enum>(2)</enum><header>Effective
period</header><text display-inline="yes-display-inline">Any temporary order
issued under paragraph (1)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC9C707654437493CA350BD772DF03B1E"><enum>(A)</enum><text display-inline="yes-display-inline">shall become effective upon service;
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1A832D338CBB41E9ADA8ABD85F0103EE"><enum>(B)</enum><text display-inline="yes-display-inline">unless a court issues a stay of such order
under subsection (e), shall remain in effect and enforceable until—</text>
<clause commented="no" display-inline="no-display-inline" id="ID6E990C504FD94867881E3648CBD8CDEF"><enum>(i)</enum><text display-inline="yes-display-inline">the date the Commissioner dismisses the
charges contained in the notice served under subsection (a) with respect to
such party; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDCD8049CDB77E4ACC9318E74793E723BA"><enum>(ii)</enum><text display-inline="yes-display-inline">the effective date of an order issued by
the Commissioner to such party under subsection (a).</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBE319A549BB941F885715E74CD261E0C"><enum>(3)</enum><header>Copy of
order</header><text display-inline="yes-display-inline">If the Commissioner
issues a temporary order under paragraph (1) to any insurer-affiliated party,
the Commissioner shall serve a copy of such order on any National Insurer or
National Agency with which such party is affiliated at the time such order is
issued.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID10740A27DC574CE087B4C61E4C776A4D"><enum>(c)</enum><header>Procedures</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID1BE1E408BA4547A6ABF108007E68F347"><enum>(1)</enum><header>Contents of
notice</header><text display-inline="yes-display-inline">A notice served under
subsection (a) shall include—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDB0621363048849A08DCE1B9D48A82444"><enum>(A)</enum><text display-inline="yes-display-inline">a statement of the grounds for facts
underlying such notice; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID952725BCCF09412599704E9C30EFC9CB"><enum>(B)</enum><text display-inline="yes-display-inline">the time and place of a hearing to be held
thereon.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDAACBFAEDCBD4933BF933F5FBECC7017"><enum>(2)</enum><header>Hearing</header><text display-inline="yes-display-inline">The hearing referred to in paragraph (1)(B)
shall take place not earlier than 30 days nor later than 60 days after the date
of service of notice under subsection (a), unless another date is set by the
Commissioner at the request of such party.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9FD939016A11412985981BD34D263420"><enum>(3)</enum><header>Suspension or
removal</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8BAE5C7179DB43228AA59E436AE627BE"><enum>(A)</enum><header>Failure to
appear</header><text display-inline="yes-display-inline">If a duly authorized
representative of the party receiving notice of a hearing under this subsection
fails to appear at such hearing, such party shall be deemed to have consented
to the issuance of an order of such removal or prohibition.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1865D3EDADDB45B48BAFB6230565B16E"><enum>(B)</enum><header>Suspension or
removal</header><text display-inline="yes-display-inline">In the event of such
consent, or if upon the record made at any hearing under this subsection the
Commissioner finds that any of the grounds specified in such notice have been
established, the Commissioner may issue such orders of suspension or removal
from office, or prohibition from participation in the conduct of the affairs of
the National Insurer or National Agency, as the Commissioner determines to be
appropriate.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID704812669552443B94BBD35D120369E2"><enum>(C)</enum><header>Effective
date</header><text display-inline="yes-display-inline">Any order issued under
subparagraph (B) shall become effective on the expiration of 30 days after
service upon the National Insurer or National Agency and such party (except in
the case of an order issued upon consent, which shall become effective at the
time specified in such order). Such order shall remain effective and
enforceable as provided therein, except to such extent as it is stayed,
modified, terminated, or set aside by action of the Commissioner or a reviewing
court.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID50B66C54C486459AA57691D23893F50E"><enum>(d)</enum><header>Industrywide
Prohibition</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID16E00BE9CE334668AF08EF7EC73C2E17"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided
under paragraph (2), any person who, pursuant to any order issued under this
section or section 1146, has been removed or suspended from office in a
National Insurer or National Agency or prohibited from participating in the
conduct of the affairs of a National Insurer or National Agency may not, while
such order is in effect—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID93B1B80865644814AE1E59958E2B53BA"><enum>(A)</enum><text display-inline="yes-display-inline">continue or commence to hold any office in,
or participate in any manner in the conduct of the affairs of any National
Insurer or National Agency;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID22F41A11F3B04B2280EAF43E31B03547"><enum>(B)</enum><text display-inline="yes-display-inline">solicit, procure, transfer, attempt to
transfer, vote, or attempt to vote any proxy, consent, or authorization with
respect to any voting rights in any National Insurer or National Agency;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2D5C89DBE6EB4F82A4D3AEEF31FB3AFB"><enum>(C)</enum><text display-inline="yes-display-inline">act as an insurer-affiliated party;
or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID80C321855112478F903338C71751C3F8"><enum>(D)</enum><text display-inline="yes-display-inline">act as a federally licensed insurance
producer.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3DDDBC4B07A642C09F33373CEC1DCF61"><enum>(2)</enum><header>Exception</header><text display-inline="yes-display-inline">If, on or after the date an order is issued
under this subsection, which removes or suspends from office any
insurer-affiliated party or prohibits such party from participating in the
conduct of the affairs of a National Insurer or National Agency, such party
receives the written consent of the Commissioner, paragraph (1) shall, to the
extent of such consent, cease to apply to such party with respect to the
National Insurer or National Agency described in each written consent.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB5B3CEE08913413BAD0811ECDD9B117E"><enum>(3)</enum><header>Violation of
order</header><text display-inline="yes-display-inline">Any violation of
paragraph (1) by any person who is subject to an order described in such
subparagraph shall be treated as a violation of the order.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID4A0D430CD0DF4FF4B41C2AFE90589EE4"><enum>(e)</enum><header>Stay of
Suspension or Prohibition</header><text display-inline="yes-display-inline">Not
later than 10 days after any insurer-affiliated party has been suspended from
office or prohibited from participation in the conduct of the affairs of a
National Insurer or National Agency by a temporary order issued under
subsection (b), such party may apply to the United States district court for
the judicial district in which the main office of the National Insurer or
National Agency is located, or the United States District Court for the
District of Columbia, for a stay of such suspension or prohibition pending the
completion of the administrative proceedings pursuant to the notice served upon
such party under subsection (a), and such court shall have jurisdiction to stay
such suspension or prohibition.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDB6FE39E42EED4A68B5014EF9CE787521" section-type="subsequent-section"><enum>1146.</enum><header>Suspension or
prohibition based on criminal activity</header>
<subsection commented="no" display-inline="no-display-inline" id="IDC53159378DC74A87B75C0DFC58B5A6A5"><enum>(a)</enum><header>Suspension or
Prohibition</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID460B3362AB704FE79F8C2DAA8F42679F"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may
suspend an insurer-affiliated party from office or prohibit such party from
further participation in any manner in the conduct of the affairs of a National
Insurer or National Agency, by written notice served upon such party and the
National Insurer or National Agency, if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID71C3911AD57A455597F8FB042151404D"><enum>(A)</enum><text display-inline="yes-display-inline">continued service or participation by such
party may pose a threat to the National Insurer or National Agency or the
interests of the National Insurer’s policyholders or the policyholders serviced
by the National Agency; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5191F94155F34C62810543AAEBE85C2C"><enum>(B)</enum><text display-inline="yes-display-inline">such party is charged in any information,
indictment, or complaint, of participation in—</text>
<clause commented="no" display-inline="no-display-inline" id="ID436E962EB7BA46F1AE9281EBCC3357B7"><enum>(i)</enum><text display-inline="yes-display-inline">a crime involving dishonesty or breach of
trust which is punishable by imprisonment for a term exceeding 1 year under
Federal or State law; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8056A608395D40B8A3A01CE27EAA3DCE"><enum>(ii)</enum><text display-inline="yes-display-inline">a criminal violation of section 1956, 1957,
or 1960 of title 18, United States Code, or section 5322 or 5324 of title 31,
United States Code.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC2FFD011AEE74B3D830801B02DB1C91C"><enum>(2)</enum><header>Effective
period</header><text display-inline="yes-display-inline">A suspension or
prohibition under paragraph (1) shall remain in effect until the information,
indictment, or complaint referred to in paragraph (1)(B) is resolved or
otherwise terminated by the Commissioner.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDBF6DF07EE321428593446D897829D6F3"><enum>(b)</enum><header>Removal or
Prohibition</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDBA4829A3137D4B04B548F9320314E851"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">If a judgment of
conviction or an agreement to enter a pretrial diversion or other similar
program is entered against an insurer-affiliated party in connection with a
crime described in subsection (a)(1)(B)(i), the Commissioner may issue and
serve upon such party and the National Insurer or National Agency an order
removing such party from office or prohibiting such party from further
participation in any manner in the conduct of the affairs of the National
Insurer or National Agency without the prior written consent of the
Commissioner if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDD0864931BB7E47BC96A8335A1AF45277"><enum>(A)</enum><text display-inline="yes-display-inline">such judgment is not subject to further
appellate review; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCC6E6FCB61D942A4B464B2B876FAFCD6"><enum>(B)</enum><text display-inline="yes-display-inline">continued service or participation by such
party may pose a threat to the National Insurer or the interests of the
policyholders of the National Insurer or a National Agency or the policyholders
serviced by such Agency.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCCD74D74E35E439D814A8C6BFFBE9FC0"><enum>(2)</enum><header>Required for
certain offenses</header><text display-inline="yes-display-inline">In the case
of a judgment of conviction or agreement against an insurer-affiliated party in
connection with a violation described in subsection (a)(1)(B)(ii), the
Commissioner shall issue and serve upon such party and the National Insurer or
National Agency an order removing such party from office or prohibiting such
party from further participation in any manner in the conduct of the affairs of
the National Insurer or National Agency without the prior written consent of
the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID77C2E62F75E54108BF5C78EEF0F5A0AD"><enum>(3)</enum><header>Effect on
director or officer</header><text display-inline="yes-display-inline">An
insurer-affiliated party who is a director or officer and who is subject to an
order under this subsection, shall cease to be a director or officer of a
National Insurer or National Agency.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6E591F0F0CBE430C86F7B54C9769D512"><enum>(4)</enum><header>Effect of
acquittal</header><text display-inline="yes-display-inline">A finding of not
guilty or other disposition of the charge shall not preclude the Commissioner
from instituting proceedings after such finding or disposition to remove such
party from office or to prohibit further participation in National Insurer or
National Agency affairs under subsection (a) or (b) of section 1145.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB277787CEC4B4670AF0F0F3E7F40AB9F"><enum>(5)</enum><header>Effective
period</header><text display-inline="yes-display-inline">A notice of suspension
or order of removal issued under this subsection shall remain effective and
outstanding until the completion of any hearing or appeal under subsection (c)
or unless the suspension or order of removal is otherwise terminated by the
Commissioner.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDC173A01DF26942249553C4C9D38CF247"><enum>(c)</enum><header>Administrative
Hearing</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID78DB4A8FBF584D56A6870EB52F2831AA"><enum>(1)</enum><header>Request</header><text display-inline="yes-display-inline">Not later than 30 days after the date on
which a notice of suspension or order of removal is received by an
insurer-affiliated party under this subsection, such party may submit a written
request to the Commissioner for an opportunity to appear before the
Commissioner to show that the continued service to, or participation in, the
conduct of the affairs of the National Insurer or National Agency by such party
will not pose a threat to the National Insurer or to the interests of its
policyholders or to a National Agency or the policyholders serviced by such
Agency.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD5C0869DE71B4AF1BF2257CB80CEEF48"><enum>(2)</enum><header>Time and
place</header><text display-inline="yes-display-inline">Upon receipt of a
request under paragraph (1), the Commissioner shall set a time and place at
which the requesting party may appear, personally or through counsel, before 1
or more designated employees of the Commissioner to submit written materials
or, at the discretion of the Commissioner, oral testimony, and oral argument. A
hearing under this subsection shall take place not later than 30 days after the
receipt of a request under paragraph (1), unless extended at the request of the
party.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID34753331997C447BB85588B6B882756E"><enum>(3)</enum><header>Notification of
decision</header><text display-inline="yes-display-inline">Not later than 60
days after a hearing under this subsection, the Commissioner shall provide
written notification to the insurer-affiliated party that indicates—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDADD8083C7F14465CBBBAA1899965049D"><enum>(A)</enum><text display-inline="yes-display-inline">whether the suspension or prohibition from
participation in any manner in the conduct of the affairs of the National
Insurer or National Agency will be continued, terminated, or otherwise
modified;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID27FF49E676E14BE2B0D0952B9BBF97FE"><enum>(B)</enum><text display-inline="yes-display-inline">whether the order removing such party from
office or prohibiting such party from further participation in any manner in
the conduct of the affairs of the National Insurer or National Agency will be
rescinded or otherwise modified; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCD76FF0A5A4E4143A8477AE313D101C9"><enum>(C)</enum><text display-inline="yes-display-inline">the basis for any decision by the
Commissioner that is adverse to such party.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID25FF7283F7694022815EBBD42919FA8C" section-type="subsequent-section"><enum>1147.</enum><header>Ancillary
provisions</header>
<subsection commented="no" display-inline="no-display-inline" id="ID6F8A169CA1AA488683F143F566D000E8"><enum>(a)</enum><header>Powers Related
to Hearings</header><text display-inline="yes-display-inline">In the course of
or in connection with any proceeding or other action under this subtitle, the
Commissioner, and any person designated to conduct any hearing under this
section, may—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID96DD02847A3F43AFA3D3CB7B20DB3762"><enum>(1)</enum><text display-inline="yes-display-inline">administer oaths and affirmations;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB453DD8CFB5C4437BD91AA78B8848BC8"><enum>(2)</enum><text display-inline="yes-display-inline">take depositions or cause depositions to be
taken; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF2E1AD4EDD7E45898ADFA310EE222679"><enum>(3)</enum><text display-inline="yes-display-inline">issue, revoke, quash, or modify subpoenas
and subpoenas duces tecum.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID49D07851D5CD42B792D50A63B5CCE5C2"><enum>(b)</enum><header>Subpoena
Power</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDE0FAC6B68202451E82CF2960B803C0FB"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner, or
designee of the Commissioner, may require the attendance of witnesses and the
production of documents provided for in this section from any place in any
State or other place subject to the jurisdiction of the United States at any
designated place where such proceeding or other action is being
conducted.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2BD20F9D32934B52AC4FDA227AA157B3"><enum>(2)</enum><header>Enforcement</header><text display-inline="yes-display-inline">The Commissioner or any party to
proceedings under this section may apply for the enforcement of any subpoena or
subpoena duces tecum issued under this section to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC75AC0955933475E93E9940987943C56"><enum>(A)</enum><text display-inline="yes-display-inline">the United States District Court for the
District of Columbia; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID982EC71D9932483CA4108AE1F5BB7A18"><enum>(B)</enum><text display-inline="yes-display-inline">the United States district court for the
judicial district in which—</text>
<clause commented="no" display-inline="no-display-inline" id="ID419FC38C697B4E0FA802480A4A5FE568"><enum>(i)</enum><text display-inline="yes-display-inline">such proceeding or other action is being
conducted; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDDE2BA8C75FEA41EAB320C5FEF677ED55"><enum>(ii)</enum><text display-inline="yes-display-inline">the witness resides or carries on
business.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID44FEC3DE25C645288FEC4CB3A2D1F33F"><enum>(3)</enum><header>Jurisdiction</header><text display-inline="yes-display-inline">The courts described under paragraph (2)
shall have jurisdiction and power to order and require compliance with any
subpoena or subpoena duces tecum issued under this section.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDD3859F9B7924FA6A21B9B697EDBAEF1"><enum>(4)</enum><header>Fees and
mileage</header><text display-inline="yes-display-inline">Any witness
subpoenaed under this subsection shall be paid the same fees and mileage that
are paid witnesses in the district courts of the United States.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA667B346561B484CA8577F6F1C9A99E9"><enum>(5)</enum><header>Penalty for
noncompliance</header><text display-inline="yes-display-inline">Any person who
willfully fails or refuses to attend and testify or to answer any lawful
inquiry or to produce books, papers, correspondence, memoranda, contracts,
agreements, or other records, if in such person’s power so to do, in obedience
to the subpoena of the Commissioner, shall be guilty of a misdemeanor and, upon
conviction, shall be subject to a fine of not more than $1,000 or to
imprisonment for a term of not more than 1 year or both.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID71D6F43448044BF6B86AC7A6EBA16F46"><enum>(c)</enum><header>Expenses and
Attorney Fees</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID53789BE07A644CE88860F828B8D455C6"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Any court having
jurisdiction of any proceeding or other action instituted under this section by
a National Insurer or National Agency, a federally licensed insurance producer,
or an insurer-affiliated party may allow any such party to receive such
reasonable expenses and attorneys’ fees as it determines to be just and
proper.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE1BA6B596F994811B0073203C86B865A"><enum>(2)</enum><header>Payment of
expenses and fees</header><text display-inline="yes-display-inline">Expenses
and fees awarded under paragraph (1) shall be paid by the National Insurer or
National Agency, the federally licensed insurance producer, or the
insurer-affiliated party from the assets of such insurer, agency, producer, or
party.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDCFDE200FD8BF42E9BC7ACD0B389F6117"><enum>(d)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Commissioner may promulgate such
regulations as may be necessary with respect to any proceedings, claims,
examinations, investigations, or other actions authorized by this
subtitle.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID82227439AEAE46B48B0826B127DBD29B"><enum>(e)</enum><header>Effect on Board
of Directors</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID6C45D5DC265545CC9854BA5A73C2E136"><enum>(1)</enum><header>Lack of
quorum</header><text display-inline="yes-display-inline">If the suspension of 1
or more directors under this subtitle reduces the board of directors of a
National Insurer or National Agency below a quorum, all powers and functions
vested in or exercisable by such board shall vest in, and be exercisable by,
the director or directors on the board not so suspended, until a quorum is
reestablished.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCE49DBE99C70419E85FE481F3633875E"><enum>(2)</enum><header>Temporary
appointments</header><text display-inline="yes-display-inline">If all of the
directors of a National Insurer or National Agency are suspended under this
subtitle, the Commissioner shall appoint persons to serve temporarily as
directors in their place until the earlier of the date on which—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDD65F88AF31F5465D9ECEBFD7E7191F4A"><enum>(A)</enum><text display-inline="yes-display-inline">the suspensions are terminated; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF64B3540C03F435386F8089D9512E26E"><enum>(B)</enum><text display-inline="yes-display-inline">the suspended directors are replaced on the
board of directors of the National Insurer or National Agency.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID2AA22072CA2741109B9935606FD50736"><enum>(f)</enum><header>Notice After
Separation From Service</header><text display-inline="yes-display-inline">The
resignation, termination of employment or participation, or separation of an
insurer-affiliated party (including a separation caused by the closing of a
National Insurer or National Agency) shall not affect the jurisdiction and
authority of the Commissioner to issue any notice against any such party under
this subtitle if such notice is served before the end of the 6-year period
beginning on the date on which such party ceased to be an insurer-affiliated
party with respect to such National Insurer or National Agency.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID727C078700D74B9A95AE0B7BF4ADE2E2" section-type="subsequent-section"><enum>1148.</enum><header>Hearings and
judicial review of removal, suspension, or prohibition order</header>
<subsection commented="no" display-inline="no-display-inline" id="IDCE927552112846CAA4207553A025E18A"><enum>(a)</enum><header>Judicial
Hearing</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID5C4496F9DAAE431392CAF35B01F618EC"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">A hearing under this
subtitle (except for a hearing under section 1146(c))—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID0D04AB2F5D4745D99C9F1B5B363BED7C"><enum>(A)</enum><text display-inline="yes-display-inline">shall be conducted in accordance with the
provisions of chapter 5 of title 5, United States Code; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID688B1F5F22D646DEB300C2B4643F80B5"><enum>(B)</enum><text display-inline="yes-display-inline">shall be held in the Federal judicial
district in which the main office of the National Insurer or National Agency is
located or in which the federally licensed insurance producer or the
insurer-affiliated party is located, unless the party afforded the hearing
consents to another place.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBF678247D8614CCC97DA20A60921373B"><enum>(2)</enum><header>Judgment</header><text display-inline="yes-display-inline">After a hearing under this subsection and
not later than 90 days after the Commissioner has notified the parties that the
case has been submitted to the Commissioner for final decision, the
Commissioner shall—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDFD862BE8FE4E4B428AE6F8208AF20CEC"><enum>(A)</enum><text display-inline="yes-display-inline">render a decision;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID986CD103212E4784AF20099BB99FC05A"><enum>(B)</enum><text display-inline="yes-display-inline">issue and serve upon each party to the
proceeding an order or orders consistent with the provisions of this subtitle;
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCDD6079D1A6E402E8C2ED8AE7930B8DC"><enum>(C)</enum><text display-inline="yes-display-inline">include findings of fact upon which the
Commissioner’s decision is predicated.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB9DC279239C1461BB7803B37D9A86C3D"><enum>(b)</enum><header>Judicial
Review</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID7AF77E47FAFF46D0B004EB66353FC54C"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Judicial review of
any order under this subtitle shall be limited to the provisions under this
section.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID41BBC867E6284B88ABFBFDA56A1B98D1"><enum>(2)</enum><header>Modification or
termination of order by commissioner</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID800D93C79A5E4484A033870AFCDAA48C"><enum>(A)</enum><header>Before
appeal</header><text display-inline="yes-display-inline">Until a petition for
review is timely filed in a court of appeals of the United States, in
accordance with paragraph (3), the Commissioner may modify, terminate, or set
aside any order under this section.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID307E55E7DE554DA985C44E1CB1BE30A2"><enum>(B)</enum><header>After
appeal</header><text display-inline="yes-display-inline">After an appeal
described under subparagraph (A) is filed, the Commissioner may not modify,
terminate, or set aside any order under this section without the permission of
the court.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID51D714F9670E40E68FAA39CCC0E64302"><enum>(3)</enum><header>Filing of
petition</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID3F72C21FA29845E6B40CC9BA3A484CCC"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided
under subparagraph (B), any party to a proceeding under this section may obtain
judicial review of any order served under subsection (a) by filing a written
petition in a court of appeals described in subparagraph (C) not later than 30
days after the date of service of such order, requesting that the order of the
Commissioner be modified, terminated, or set aside.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8CD20EC90CA54D3DBB01412E62CF7687"><enum>(B)</enum><header>Exception</header><text display-inline="yes-display-inline">Judicial review shall not be available for
an order issued under subsection (d) with the consent of the National Insurer
or National Agency, the federally licensed insurance producer, or the
insurer-affiliated party.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7548276030A8445D82B7170700D00E50"><enum>(C)</enum><header>Jurisdiction</header><text display-inline="yes-display-inline">After a petition is filed under this
paragraph, the following courts shall have exclusive jurisdiction to modify,
terminate, or set aside, in whole or in part, the order of the
Commissioner:</text>
<clause commented="no" display-inline="no-display-inline" id="ID20F15E7D148B4FCB9B17A9175221D5CC"><enum>(i)</enum><text display-inline="yes-display-inline">The court of appeals of the United States
for the circuit in which—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID3759B71AFF3E4015881CAE2FF8A9C9A0"><enum>(I)</enum><text display-inline="yes-display-inline">the main office of the National Insurer or
National Agency is located; or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID519DD223A378416B9644EC87F1A93AA5"><enum>(II)</enum><text display-inline="yes-display-inline">the federally licensed insurance producer
or the insurer-affiliated party is located.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID075A1D7F554047D681DA892F673039C5"><enum>(ii)</enum><text display-inline="yes-display-inline">The United States Court of Appeals for the
District of Columbia.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA966900931974FB1978C0FF3A7F87AE9"><enum>(4)</enum><header>Filing of
record</header><text display-inline="yes-display-inline">The clerk of the court
shall transmit a copy of the petition filed under paragraph (3) to the
Commissioner, who shall file in the court the record in the proceeding, in
accordance with section 2112 of title 28, United States Code.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB97523F6AB9C4E2C8D10191D12BCA583"><enum>(5)</enum><header>Effect of
review proceedings</header><text display-inline="yes-display-inline">The
commencement of proceedings for judicial review under this subsection shall
not, unless specifically ordered by the court, operate as a stay of any order
issued by the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCF11602F1F984E4E90E65776407D1FAF"><enum>(6)</enum><header>Final
judgment</header><text display-inline="yes-display-inline">Judicial review
under this section shall be subject to chapter 7 of title 5, United States
Code. The judgment and decree of the court shall be final, except that the same
shall be subject to review by the Supreme Court upon certiorari, as provided in
section 1254 of title 28, United States Code.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDDD70B1522DCA4342B45EB5738948417A"><enum>(c)</enum><header>Enforcement of
Commissioner Order</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDC8A6575D600E4C358779367A3CDB8C36"><enum>(1)</enum><header>Application</header><text display-inline="yes-display-inline">The Commissioner may submit an application,
to enforce any effective and outstanding notice or order issued under this
section, to the United States district court for the judicial district in
which—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID4899CFB258CF4261BD8B70F340649D21"><enum>(A)</enum><text display-inline="yes-display-inline">the main office of the National Insurer or
National Agency is located;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC456556579534F01A3E4B817EBCE8DC6"><enum>(B)</enum><text display-inline="yes-display-inline">the federally licensed insurance producer
is located; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID265FA63F268747AEABF640BD3102C316"><enum>(C)</enum><text display-inline="yes-display-inline">the insurer-affiliated party is
located.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE692211E116848F99E0FC3259D24C573"><enum>(2)</enum><header>Jurisdiction</header><text display-inline="yes-display-inline">The courts described in paragraph
(1)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDF13E8516BB83405EB1FBDF7F08A1369C"><enum>(A)</enum><text display-inline="yes-display-inline">shall have jurisdiction and power to order
and require compliance with an order of the Commissioner under this subtitle;
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA86AEFDCCA2E4944A61F06BA1EDFB740"><enum>(B)</enum><text display-inline="yes-display-inline">except as otherwise provided in this
subtitle, shall not have jurisdiction to affect, by injunction or otherwise,
the issuance or enforcement of any notice or order under this subtitle, or to
review, modify, suspend, terminate, or set aside any such notice or
order.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID908736C04EFC41DBA52ED688D0BA3C05" section-type="subsequent-section"><enum>1149.</enum><header>Civil and criminal
penalties</header>
<subsection commented="no" display-inline="no-display-inline" id="IDC27A44B3F91A4ED789BB28454140AC23"><enum>(a)</enum><header>Civil Money
Penalty</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID51EDDD5E4A9741AC88E7C71D06E02639"><enum>(1)</enum><header>First
tier</header><text display-inline="yes-display-inline">A National Insurer or
National Agency, federally licensed insurance producer, or insurer-affiliated
party shall pay a civil penalty of not more than $5,000 for each day during
which such entity—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID07B6DEA5076D40CD977FCAC689C6DA88"><enum>(A)</enum><text display-inline="yes-display-inline">violates any law or regulation;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID647F8697557C4DC1896BA656D608D417"><enum>(B)</enum><text display-inline="yes-display-inline">violates any final order or temporary order
issued pursuant to section 1143, 1144, 1145, or 1146;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC59A389285E34819BEDDABDF5BF64485"><enum>(C)</enum><text display-inline="yes-display-inline">violates any condition imposed in writing
by the Commissioner in connection with the grant of any application or other
request by such National Insurer or National Agency, producer or party;
or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2401C0CAA33F4A9E943BFB7473DF6AA5"><enum>(D)</enum><text display-inline="yes-display-inline">violates any written agreement between such
National Insurer or National Agency, producer, or party and the
Commissioner.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE1106BFA78FC46DBAD47E18F5A0414C8"><enum>(2)</enum><header>Second
tier</header><text display-inline="yes-display-inline">Notwithstanding
paragraph (1), a National Insurer, National Agency, federally licensed
insurance producer, or insurer-affiliated party shall pay a civil penalty of
not more than $25,000 for each day—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA31B7CE4BCAB4D5AB8C1B701B6FEA3E8"><enum>(A)</enum><text display-inline="yes-display-inline">during which such entity—</text>
<clause commented="no" display-inline="no-display-inline" id="id138ABCC4FCD14E91B3F2A1C0F404A285"><enum>(i)</enum><text display-inline="yes-display-inline">commits any violation described in any
clause of paragraph (1);</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id0B8C246DC6944FE09053C2E3971C94F9"><enum>(ii)</enum><text display-inline="yes-display-inline">recklessly engages in any conduct that is
hazardous to a National Insurer, State insurer, United States branch of a
non-United States insurer, or National Agency and that involves an undue risk
to the policyholders, as a whole, of such National Insurer, State insurer, or
United States branch of a non-United States insurer or the policyholders, as a
whole, serviced by such National Agency; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id7950DFF5FE6846E38D398ACDA9EE9A77"><enum>(iii)</enum><text display-inline="yes-display-inline">breaches any fiduciary duty; and</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID98D0733A194848229BE49C9AB689FFD7"><enum>(B)</enum><text display-inline="yes-display-inline">for which such violation, conduct, or
breach—</text>
<clause commented="no" display-inline="no-display-inline" id="IDA43C773B4F364568A8D5CABEC1A3EB84"><enum>(i)</enum><text display-inline="yes-display-inline">is part of a pattern of misconduct;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDF290FBA86E4E47E38824C2DDF02111C5"><enum>(ii)</enum><text display-inline="yes-display-inline">causes or is likely to cause more than a
minimal loss to such National Insurer, State insurer, or United States branch
of a non-United States insurer; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID26D3C281D5F144EDB79339D887C59131"><enum>(iii)</enum><text display-inline="yes-display-inline">results in pecuniary gain or other benefit
to such National Agency, producer or affiliated party.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE2F5780A52D14F45B9DCDF554C331C59"><enum>(3)</enum><header>Third
tier</header><text display-inline="yes-display-inline">Notwithstanding
paragraphs (1) and (2), a National Insurer, National Agency, federally licensed
insurance producer, or any insurer-affiliated party shall pay a civil penalty
in an amount not to exceed the applicable maximum amount determined under
paragraph (4) for each day during which such entity—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID146FE6E3FC484F4085C39446634C165F"><enum>(A)</enum><text display-inline="yes-display-inline">knowingly—</text>
<clause commented="no" display-inline="no-display-inline" id="ID7516F26401EA45FB993A95ED3F27C98A"><enum>(i)</enum><subclause commented="no" display-inline="yes-display-inline" id="id14B49C3A664E4277B426B65F35094F00"><enum>(I)</enum><text display-inline="yes-display-inline">commits any violation described in any
clause of paragraph (1); or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDAFF641F9AA874E4AB749C80ACB80C050" indent="up1"><enum>(II)</enum><text display-inline="yes-display-inline">engages in any conduct that is hazardous to
a National Insurer, State insurer, United States branch of a non-United States
insurer, or National Agency and that involves an undue risk to the
policyholders, as a whole, of such National Insurer, State insurer, or United
States branch of a non-United States insurer or the policyholders, as a whole,
serviced by such National Agency; and</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="id45CBE55D5EB74A5EAE47B265A66C7DD1"><enum>(ii)</enum><text display-inline="yes-display-inline">breaches any fiduciary duty; and</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6BF1F7A155AD41378844AB6B1CEDAE9E"><enum>(B)</enum><text display-inline="yes-display-inline">knowingly or recklessly causes a
substantial loss to such National Insurer, State insurer, United States branch
of a non-United States insurer, or National Agency or a substantial pecuniary
gain or other benefit to such producer or affiliated party by reason of such
violation, conduct, or breach.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID88F1E5E764DB40429BEB10FBA8DDF65D"><enum>(4)</enum><header>Maximum amounts
of penalties for any violation described in paragraph
<enum-in-header>(3)</enum-in-header></header><text display-inline="yes-display-inline">The maximum daily amount of any civil
penalty which may be assessed under paragraph (3) for any violation, practice,
or breach described in such paragraph is $1,000,000.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2BCC6698919B4874BAAD56C0BF17DBAA"><enum>(5)</enum><header>Assessment</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID1C3BEC95A52A4A4EACAB6CA4CC4ED64D"><enum>(A)</enum><header>Written
notice</header><text display-inline="yes-display-inline">Any penalty imposed
under paragraph (1), (2), or (3) may be assessed and collected by the
Commissioner by written notice, which shall contain a statement of the facts
constituting the basis for the assessment of any penalty imposed under
paragraph (1), (2), or (3).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD774A31C74B04667839203A6FF895704"><enum>(B)</enum><header>Finality of
assessment</header><text display-inline="yes-display-inline">If, with respect
to any assessment under subparagraph (A), a hearing is not requested under
paragraph (8) within the period of time allowed under such paragraph, the
assessment shall constitute a final and unappealable order.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID08CD26FA0AC0491C9B887E189FA26C0D"><enum>(6)</enum><header>Authority to
modify or remit penalty</header><text display-inline="yes-display-inline">The
Commissioner may compromise, modify, or remit any penalty which the
Commissioner may assess or had already assessed under paragraph (1), (2), or
(3).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID45B449105BE243228774E6C61259A70E"><enum>(7)</enum><header>Mitigating
factors</header><text display-inline="yes-display-inline">In determining the
amount of any penalty imposed under paragraph (1), (2), or (3), the
Commissioner shall take into account the appropriateness of the penalty in
relation to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8F97810C273544979525F03E79A251AA"><enum>(A)</enum><text display-inline="yes-display-inline">the size of financial resources and good
faith of the National Insurer, National Agency, or other person charged;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5D1F078FC33F4C90B7AF56AB0C663097"><enum>(B)</enum><text display-inline="yes-display-inline">the gravity of the violation;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID81A5879509A54B54A5287D83C1A8892A"><enum>(C)</enum><text display-inline="yes-display-inline">the history of previous violations;
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID73EF5C7BCDED4515BC8ADD645F2C553C"><enum>(D)</enum><text display-inline="yes-display-inline">such other matters as justice may
require.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6FE8378936B748C2BDD1EB6C2B244165"><enum>(8)</enum><header>Hearing</header><text display-inline="yes-display-inline">The National Insurer, National Agency, or
other person against whom any penalty is assessed under this paragraph shall be
afforded a hearing by the Commissioner if such National Insurer, National
Agency, or person submits a request for such hearing within 20 days after the
issuance of the notice of assessment.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC769EA50543A4CD7851F11406AA76129"><enum>(9)</enum><header>Collection</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDF6C9F661B9A24186A5360B9B5EC00CEC"><enum>(A)</enum><header>Referral</header><text display-inline="yes-display-inline">If any National Insurer, National Agency,
or other person fails to pay an assessment after any penalty assessed under
this paragraph has become final, the Commissioner shall recover the amount
assessed by action in the appropriate United States district court.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4761AA2DFA2B44E2AAA25344B3AD259E"><enum>(B)</enum><header>Appropriateness
of penalty not reviewable</header><text display-inline="yes-display-inline">In
any civil action under subparagraph (A), the validity and appropriateness of
the penalty shall not be subject to review.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEF10C40B3E4C4B34AF973D6A84A47061"><enum>(10)</enum><header>Disbursement
and use</header><text display-inline="yes-display-inline">All penalties
collected under authority of this paragraph shall be deposited into the
Treasury, and shall not be used to fund the compensation of the Commissioner or
employees of the Office or the expenses of the Office.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID4FF9B147282B46EF970286C93F67D6F7"><enum>(b)</enum><header>Prejudgment
Attachment</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDA8496FDEB5FB48C2B86537AF1577B9D5"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">In any action brought
by the Commissioner under this section, or in actions brought in aid of, or to
enforce an order in, any administrative or other civil action for money
damages, restitution, or civil money penalties brought by the Commissioner, the
court may, upon application of the Commissioner, issue a restraining order
that—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA2703E9718C345C181AD1238885373FF"><enum>(A)</enum><text display-inline="yes-display-inline">prohibits any person subject to the
proceeding from withdrawing, transferring, removing, dissipating, or disposing
of any funds, assets, or other property; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC847306A17B549FEBAA02F5D64024080"><enum>(B)</enum><text display-inline="yes-display-inline">appoints a temporary receiver to administer
the restraining order.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB0017FA8848E4FA4BEFF7435212C3D45"><enum>(2)</enum><header>Standard</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA4768AD0B4A44C4AA5B6F648FE74B515"><enum>(A)</enum><header>Showing</header><text display-inline="yes-display-inline">Rule 65 of the Federal Rules of Civil
Procedure shall apply with respect to any proceeding under paragraph (1),
without regard to the requirement of such rule that the applicant show that the
injury, loss, or damage is irreparable and immediate.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA58BF48621D84DB3B8EFA10BD7D7B543"><enum>(B)</enum><header>State
proceeding</header><text display-inline="yes-display-inline">If, in the case of
any proceeding in a State court, the court determines that rules of civil
procedure available under the laws of such State provide substantially similar
protections to a party’s right to due process as Rule 65, the relief sought
under paragraph (1) may be requested under the laws of such State.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB5D5B84978F74AFE8063C78552F0C52A"><enum>(c)</enum><header>Criminal
Penalty</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID02714655264342D59EA92BC566BEBE12"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Chapter 21 of title
18, United States Code, is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="IDA26AEB93B4484AABB1B8F14C84A42A45" style="USC">
<section commented="no" display-inline="no-display-inline" id="ID85D0CC3A31A14651BD33E496670F663E" section-type="subsequent-section"><enum>404.</enum><header>Violation of order
by Commissioner of National Insurance</header><text display-inline="no-display-inline">Any person who, being subject to an order
under section 1145 or 1146 of the National Insurance Act of 2006, without the
prior written approval of the Commissioner of National Insurance, knowingly
participates, directly or indirectly, in any manner (including by engaging in
an activity specifically prohibited in such an order) in the conduct of the
affairs of any National Insurer or National Agency shall be fined not more than
$1,000,000, imprisoned for not more than 5 years, or
both.</text>
</section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7E6CAA863D014B7796A8A71F55EAE635"><enum>(2)</enum><header>Clerical
amendment</header><text display-inline="yes-display-inline">The table of
sections at the beginning of chapter 21 of title 18, United States Code, is
amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="ID88EA10950CC34BDEB4C5CCED7E54FCD1" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry bold="off" level="section">Sec. 404. Violation of order by
Commissioner of National
Insurance.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID5A1582C68E1A43E9AD6F93D8E6780E29" section-type="subsequent-section"><enum>1150.</enum><header>Public disclosures
of final orders and agreements</header>
<subsection commented="no" display-inline="no-display-inline" id="IDF91A14FA49F5466F831B29E3E9EF1179"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">Unless the
Commissioner determines that publication of any such agreement, statement,
order, modification, or termination would be contrary to the public interest,
the Commissioner shall, on a monthly basis, publish and make publicly
available—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID1727CF87282040379DC1C4CB9545FC76"><enum>(1)</enum><text display-inline="yes-display-inline">any written agreement or other written
statement for which a violation may be enforced by the Commissioner;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID297D7A43EC2743A5AFA203E6E2895BF4"><enum>(2)</enum><text display-inline="yes-display-inline">any final order issued with respect to any
administrative enforcement proceeding initiated by the Commissioner under this
section or any other law; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0D4BDFC3A8224E038ABE05C3BE37EBA1"><enum>(3)</enum><text display-inline="yes-display-inline">any modification to or termination of any
order or agreement made public pursuant to this paragraph.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID02749C4EB9D0499288C79C8BA9950C15"><enum>(b)</enum><header>Hearings</header><text display-inline="yes-display-inline">All hearings on the record with respect to
any notice of charges issued by the Commissioner shall be open to the public,
unless the Commissioner determines that holding an open hearing would be
contrary to the public interest.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID771122335462400EBCB63F2F86BF44A6"><enum>(c)</enum><header>Transcript of
Hearing</header><text display-inline="yes-display-inline">A transcript
containing all testimony and other documentary evidence shall be prepared for
all hearings commenced pursuant to section 1148. A transcript of public
hearings shall be made available to the public pursuant to section 552 of title
5, United States Code.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDE8170CE7FBD34EA68198A35CF1744AAB"><enum>(d)</enum><header>Documents Filed
Under Seal</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDB128C6E750914589AD2BF1BB0F479AAF"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may
file any document or part of a document under seal in any administrative
hearing commenced by the Commissioner if the Commissioner determines that
disclosure of all or part of the document would be contrary to the public
interest.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3B2D9A8EB7BE4DC7889F6E52112895E6"><enum>(2)</enum><header>Written
report</header><text display-inline="yes-display-inline">A written report shall
be made part of any determination to withhold any part of a document from the
transcript of the hearing required under subsection (b).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID94EF60CBD79E4B16BF39EA4413B99C60"><enum>(e)</enum><header>Retention of
Documents</header><text display-inline="yes-display-inline">The Commissioner
shall maintain a record for not less than 6 years of—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID42F508DC6FA94A4991BE01ABC07FE696"><enum>(1)</enum><text display-inline="yes-display-inline">all the documents described in subsection
(a); and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID721E1C1C49E1493B8D683ED0DA2D9A5C"><enum>(2)</enum><text display-inline="yes-display-inline">all informal enforcement agreements and
other supervisory actions and supporting documents issued in connection with
any administrative enforcement proceeding initiated by the Commissioner.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID2DFD039AF7D34E1D8C416892B99944F4"><enum>(f)</enum><header>Disclosures to
Congress</header><text display-inline="yes-display-inline">No provision of this
section may be construed to authorize the withholding, or to prohibit the
disclosure, of any information to Congress.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID2602D16912CA496B909E54A9C4DB7564" section-type="subsequent-section"><enum>1151.</enum><header>Foreign
investigations</header>
<subsection commented="no" display-inline="no-display-inline" id="IDD39C32EBE8BB40AA9B44E4175FDFC456"><enum>(a)</enum><header>Requesting
Assistance From Foreign Governments</header><text display-inline="yes-display-inline">In conducting any investigation,
examination, or enforcement action under this subtitle, the Commissioner may
request the assistance of any foreign government.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID74F3C303AEDD42AAB0A312A52B38592D"><enum>(b)</enum><header>Providing
Assistance to Foreign Governments</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDDBA04B627AB649B2851D2844F8362193"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may
assist any foreign government that is conducting an investigation to determine
whether any person has violated, is violating, or is about to violate any law
or regulation relating to insurance matters or currency transactions
administered or enforced by such foreign government.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID628E4BCB6C864F1DB4D403F10F664B4E"><enum>(2)</enum><header>Investigation
by commissioner</header><text display-inline="yes-display-inline">The
Commissioner may investigate and collect information and evidence pertinent to
a request for assistance under paragraph (1). Any such investigation shall
comply with the laws of the United States and the policies and procedures of
the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID07609F06E74340FC98C21522B00A077F"><enum>(3)</enum><header>Factors to
consider</header><text display-inline="yes-display-inline">In deciding whether
to provide assistance under this section, the Commissioner shall
consider—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID98BF1BD8569E492A8712D26EECA4C82B"><enum>(A)</enum><text display-inline="yes-display-inline">whether the requesting authority has agreed
to provide reciprocal assistance with respect to insurance matters within the
jurisdiction of the Commissioner; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID332B4D335E8342F0B0687C4F98EB6F31"><enum>(B)</enum><text display-inline="yes-display-inline">whether compliance with the request would
prejudice the public interest of the United States.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDBC871A4F19CE4249A07FA85217AA6D37"><enum>(c)</enum><header>Rule of
Construction</header><text display-inline="yes-display-inline">Nothing in this
section shall be construed to limit the authority of the Commissioner or any
other Federal agency to provide or receive assistance or information to or from
any foreign governmental authority with respect to any matter.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID64348334DDFB4CE89A2552B290B1BA78" section-type="subsequent-section"><enum>1152.</enum><header>Action or
proceeding against non-United States Insurers</header>
<subsection commented="no" display-inline="no-display-inline" id="IDDDB8151BDC004E7F9C554A3B7ED435BE"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">The Commissioner may
not take any action under this subtitle against a non-United States insurer or
any officer, director, employee, or agent of such insurer unless the
Commissioner believes that conduct or practice of such insurer or individual
has been, is, or is likely to be, carried on in connection with an act or
practice within 1 or more States, which constitutes an appropriate basis for
action by the Commissioner under this subtitle.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID8FC49164F7A64E5880484E5FFCC9BE31"><enum>(b)</enum><header>Removal of
Officer or Director</header><text display-inline="yes-display-inline">If an
officer, director, or other person associated with a non-United States insurer
fails to appear promptly as a party in any case in which an action or
proceeding is brought, pursuant to an allegation under subsection (a), for the
suspension or removal of such officer, director, or other person, or fails to
comply with any effective order or judgment therein, any failure by the
non-United States insurer to secure the removal of the officer, director, or
other person from any office such person holds in such insurer and from any
further participation in its affairs shall constitute grounds for ordering the
non-United States Insurer to terminate all sale, solicitation, negotiation, and
underwriting of insurance and all other insurance operations in the United
States.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID7301EBE2CF0149BF8B010D585BDB4B54"><enum>(c)</enum><header>Venue</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID3515CF7E7C5C4E79B435A50F8638FBC9"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided
under paragraph (2), if the venue of any judicial or administrative proceeding
under this section is to be determined by reference to the location of the main
office of a National Insurer, the venue of such a proceeding shall be within
the judicial district or other relevant jurisdiction in which the non-United
States insurer has 1 or more offices.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6D9639A598D9427AB42C880D66F75C16"><enum>(2)</enum><header>Multiple
jurisdictions</header><text display-inline="yes-display-inline">If a National
Insurer has offices in more than 1 jurisdiction, the venue of a proceeding
under this section—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2F5BFFB1420E4E7E9F3FBD99E1A4E7D3"><enum>(A)</enum><text display-inline="yes-display-inline">shall be in the jurisdiction within which
the office or offices involved in the proceeding are located; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID12C8DF2AA0504B5BA86E4FEB85849A71"><enum>(B)</enum><text display-inline="yes-display-inline">if there is more than 1 jurisdiction under
subparagraph (A), shall be proper in any such jurisdiction in which the
proceeding is brought or to which it may appropriately be transferred.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID79778D49F5494441BC3EBA291E09B5FF"><enum>(d)</enum><header>Service of
Process</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDFB4E99EE2FCD40BC9F037964F1A3C4B4"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Any service required
or authorized to be made on a non-United States insurer may be made on any
office located within any State.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBCE8B58D5BCF4F87B5FA4D908005F457"><enum>(2)</enum><header>Exception</header><text display-inline="yes-display-inline">If any service of process under paragraph
(1) is in connection with an action or proceeding involving 1 or more offices
located in any State, service shall be made on at least 1 office so
involved.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDC949A8FB7046417E86616C8B6EC635FD" section-type="subsequent-section"><enum>1153.</enum><header>Cooperation between
Commissioner and State commissioners</header>
<subsection commented="no" display-inline="no-display-inline" id="IDF4A39C7C39214AE6AE80DBE374D69AEB"><enum>(a)</enum><header>Notice to State
Commissioners</header><text display-inline="yes-display-inline">The
Commissioner shall notify the State commissioner in each State in which a
National Insurer or National Agency is doing business not later than 30 days
after the date of taking any of the following actions:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID45B4E69F0F504892842A79C26031FF09"><enum>(1)</enum><text display-inline="yes-display-inline">Revocation, suspension, or restriction of
the National Insurer’s or National Agency’s authority to transact
insurance.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID217E075764F84F09BE719BDA752B6F38"><enum>(2)</enum><text display-inline="yes-display-inline">The entry of a formal order that the
National Insurer restrict its premium writing, obtain additional contributions
to surplus, reinsure all or any part of its business, or increase capital,
surplus, or any other account for the security of policyowners or
creditors.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBF27F7852DD54B4EB27EEB806952DF9F"><enum>(3)</enum><text display-inline="yes-display-inline">The placement of a National Insurer into
receivership.</text>
</paragraph></subsection></section></subtitle><subtitle commented="no" id="ID91EAD09ECE5F48F88FEC9677DB98EED7" style="OLC"><enum>D</enum><header>Insurance Fraud</header>
<section commented="no" display-inline="no-display-inline" id="ID55680E161CFF4470AB48DA004830B8D0" section-type="subsequent-section"><enum>1161.</enum><header>Investigation of
insurance fraud</header>
<subsection commented="no" display-inline="no-display-inline" id="ID441557ABCB8449E8B77B075324FA4BB4"><enum>(a)</enum><header>Investigative
Authority of Commissioner</header><text display-inline="yes-display-inline">The
Commissioner may investigate suspected fraudulent insurance acts by insurance
persons engaged in the business of insurance or by other persons.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDDB64D87585B442399888145C0F5FB305"><enum>(b)</enum><header>Fraud Warning
Required</header><text display-inline="yes-display-inline">The Commissioner, by
regulation, shall require each National Insurer to place a fraud warning on
claim forms and applications for policies of insurance written, or to be
written, by a National Insurer, regardless of the form of transmission.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID0DA624FBB44F4DD0934936E061787DC2"><enum>(c)</enum><header>Mandatory
Reporting of Fraudulent Insurance Acts</header><text display-inline="yes-display-inline">A National Insurer, or an insurance person
engaged in the business of insurance, that knows or reasonably believes that a
fraudulent insurance act is being, will be, or has been committed, shall submit
such information to the Commissioner in a form and manner prescribed by the
Commissioner.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID0099FFE56BA74D3FA21548FE6480C126"><enum>(d)</enum><header>Immunity From
Liability</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID507ACD3074D14AF896E97D3DE6B4ABC7"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided
under paragraphs (2) and (3), any person who furnishes information concerning
suspected, anticipated, or completed fraudulent insurance acts shall not be
liable to any person under any law or regulation of the United States, any
constitution, law, or regulation of any State or political subdivision of any
State, or under any contract or other legally enforceable agreement (including
any arbitration agreement), for such act, if the information is provided to or
received from—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8B091E1173354481A9098DAEA8514A93"><enum>(A)</enum><text display-inline="yes-display-inline">the Commissioner or any employee, agent, or
representative of the Commissioner;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1172181675614BE9980506B08214AFA7"><enum>(B)</enum><text display-inline="yes-display-inline">Federal, State, or local enforcement or
regulatory officials or their employees, agents, or representatives;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID007FE0FEC76B490FBA878436DDE1BF61"><enum>(C)</enum><text display-inline="yes-display-inline">a self-regulatory organization or its
employees, agents, or representatives;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDDB79E614F7B94C9ABF3D7D28B94F7F6C"><enum>(D)</enum><text display-inline="yes-display-inline">a person involved in the prevention and
detection of fraudulent insurance acts or that person’s agents, employees, or
representatives; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAE7EFFA6A31C49928DF8B85D98FB05BE"><enum>(E)</enum><text display-inline="yes-display-inline">the NAIC or its employees, agents, or
representatives.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID875186FB0CDA4A0E99AE0D27FF7B2DA7"><enum>(2)</enum><header>Malice</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID20248E4CF4584C3BA9F8FA6AC588DC37"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Paragraph (1) shall
not apply to false statements made with actual malice.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6CF777EBDD2643609792F508EC048E6E"><enum>(B)</enum><header>Contents of
complaint</header><text display-inline="yes-display-inline">In an action
brought against a person for filing a report or furnishing other information
concerning a fraudulent insurance act, the party bringing the action shall
plead specifically any allegation that paragraph (1) does not apply because the
person filed the report or furnished the information with actual malice.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID25EE1616BD9F4E0086A5587E38F45633"><enum>(3)</enum><header>Preservation of
privilege and immunities</header><text display-inline="yes-display-inline">This
subsection does not abrogate or modify common law or statutory privileges or
immunities enjoyed by a person described in paragraph (1).</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID852265BBA7C74974A97C73C4FE022B5A" section-type="subsequent-section"><enum>1162.</enum><header>Penalties</header><text display-inline="no-display-inline">If a person committing an offense under
subsection (a) or (c) of section 1037A of title 18, United States Code, is a
National Insurer, a National Agency, or other federally licensed insurance
producer, or an insurer-affiliated party, the Commissioner may, in addition to
the punishment set forth in such section 1037A—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID47A34C887E4C4E6B868F37D9FC5563A5"><enum>(1)</enum><text display-inline="yes-display-inline">revoke, suspend, or restrict the Federal
license of such National Insurer, National Agency, or other federally licensed
insurance producer, or insurer-affiliated party pursuant to subtitle C;
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2A45422D44C149DEA9735F32060A4599"><enum>(2)</enum><text display-inline="yes-display-inline">order such National Insurer, National
Agency, or other federally licensed insurance producer, or insurer-affiliated
party to make restitution to persons aggrieved by such offenses.</text>
</paragraph></section></subtitle><enum>II</enum><header>NATIONAL INSURANCE COMPANIES AND NATIONAL
INSURANCE AGENCIES</header>
<subtitle commented="no" id="IDC9995ECA873F4F88910C9C9F8345EFF7" style="OLC"><enum>A</enum><header>Organization, Licensing, and
Operations</header>
<section commented="no" display-inline="no-display-inline" id="IDE5E5880837994FE58A18471C5C74AB04" section-type="subsequent-section"><enum>1201.</enum><header>Organization,
operation, and regulation of National Insurance Companies and National
Insurance Agencies</header>
<subsection commented="no" display-inline="no-display-inline" id="IDE7E04C9441BA4AC2A3BF95BA4F2A368C"><enum>(a)</enum><header>Authorization</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID7A921B27B3694A628D4A91A31B5DC33C"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may,
in accordance with the provisions of this Act, and under regulations prescribed
by the Commissioner pursuant to paragraph (2)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID576E38C5FA5241B698288B1E7D1B2250"><enum>(A)</enum><text display-inline="yes-display-inline">provide for the organization,
incorporation, operation, and regulation of National Insurance Companies and
National Insurance Agencies; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7EBD35713EDF4174AEDB393EC975C0E3"><enum>(B)</enum><text display-inline="yes-display-inline">issue charters therefore.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAAE37AD4C1DB491794129DFB8F9D94D5"><enum>(2)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Commissioner shall issue regulations
that permit the organization of National Insurers in stock, mutual, reciprocal,
or fraternal form, and address such other matters related to the chartering and
licensing of National Insurers and National Agencies, as the Commissioner
determines appropriate.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE04205EE835F40AAB2C13AA031AAE01F"><enum>(3)</enum><header>Organization</header><text display-inline="yes-display-inline">The Commissioner shall require National
Agencies to be organized in stock form.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID479354B29B754DC290E535D4A9360630"><enum>(b)</enum><header>Chartering
Criteria</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID4EE724B658C84FC6A792B44C6A9FEE17"><enum>(1)</enum><header>Factors</header><text display-inline="yes-display-inline">In determining whether to issue a charter
for a National Insurer or National Agency, the Commissioner shall
consider—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDCA72A390936847A797B3EC942F9089B6"><enum>(A)</enum><text display-inline="yes-display-inline">the character and competency of the parties
seeking the charter; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDBAA5233F25A04D9A9D515A03E53238C9"><enum>(B)</enum><text display-inline="yes-display-inline">the financial resources and future
prospects of the proposed National Insurer or proposed National Agency.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF0928DC699964FFAAC410EE2B3F98FF1"><enum>(2)</enum><header>Information</header><text display-inline="yes-display-inline">The Commissioner shall request such
information from the applicant as the Commissioner determines necessary to make
the evaluation required under paragraph (1).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID828FC2FB653843048B180D790B413103"><enum>(3)</enum><header>Corporate
name</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDEE703D3A7E2441489A25529C14172FAD"><enum>(A)</enum><header>National
insurers</header><text display-inline="yes-display-inline">The corporate name
of each National Insurer shall include at the end the words <quote>National
Insurer</quote> or the initials <quote>N.I.</quote>.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID73ACBDCB37984B44878406691FB7FC9C"><enum>(B)</enum><header>National
agencies</header><text display-inline="yes-display-inline">The corporate name
of each National Agency shall include at the end the words <quote>National
Insurance Agency</quote> or the initials <quote>NIA</quote>.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID39E7965945CA43E48B9A27D7064493CE"><enum>(C)</enum><header>Savings
provision</header><text display-inline="yes-display-inline">Nothing in this Act
shall preclude a State insurer or State insurance agency from using the word
<quote>national</quote> or <quote>Federal</quote> in its corporate name if such
word was included in the State insurer’s or agency’s corporate name on or
before the date of enactment of this Act.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID9964F8B0ACD74620BBB8DE8DCE058132"><enum>(c)</enum><header>Issuance or
Denial of Charter</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID6FF83E184F384E4284BB6AB855E7EFCC"><enum>(1)</enum><header>Determination</header><text display-inline="yes-display-inline">Not later than 60 days after the receipt of
the articles of incorporation or other organization document from a proposed
National Insurer or National Agency, and such other information required under
subsection (b)(2), the Commissioner shall—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDBB4B99033BBF4AABB703C236F90E57BD"><enum>(A)</enum><text display-inline="yes-display-inline">issue a charter certificate to the
applicant; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDBB1F6E78C683402AAC8595B0EA077DD7"><enum>(B)</enum><text display-inline="yes-display-inline">provide the applicant with a written
explanation of the grounds for denying a charter.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9D98501A532644828D5A5C7D639DBA06"><enum>(2)</enum><header>Federal
producer license</header><text display-inline="yes-display-inline">If the
Commissioner issues a charter certificate to a National Agency, the
Commissioner shall concurrently issue a Federal producer license to the
applicant pursuant to section 1301. A National Agency may not sell, solicit, or
negotiate any line of insurance for which it does not hold a Federal producer
license.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID17605A674513479198950E79F155000B"><enum>(3)</enum><header>Grounds for
denial</header><text display-inline="yes-display-inline">The Commissioner shall
not grant a charter to an applicant if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC5C73E241FBA4F54989BF6A5EDA3F21D"><enum>(A)</enum><text display-inline="yes-display-inline">the applicant fails to—</text>
<clause commented="no" display-inline="no-display-inline" id="IDBF1CD724D1FB4A89A2495E7833B2B6BA"><enum>(i)</enum><text display-inline="yes-display-inline">comply with all applicable formation
requirements; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID298D2AA2E3634CB996EB5A6C06D1CB62"><enum>(ii)</enum><text display-inline="yes-display-inline">provide any information requested by the
Commissioner under subsection (b)(2);</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDBA6D476C5C71498082330419F88228D9"><enum>(B)</enum><text display-inline="yes-display-inline">the applicant lacks—</text>
<clause commented="no" display-inline="no-display-inline" id="idC32AC535D61D4CBA8A6187CCA979C141"><enum>(i)</enum><text display-inline="yes-display-inline">the financial resources necessary to comply
with the standards under this Act; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDFD48169895244715A8592A7026EFF2D9"><enum>(ii)</enum><text display-inline="yes-display-inline">the character or competence to operate the
National Insurer or National Agency in accordance with the standards under this
Act; or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC7E88ED1933F41698F04C97D6DD0D68B"><enum>(C)</enum><text display-inline="yes-display-inline">the Commissioner determines that the
National Insurer or National Agency is being formed for an illegitimate
purpose.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA66B7F340A6741D2B265B6EDB8B211A5"><enum>(d)</enum><header>Amendment of
Charter</header><text display-inline="yes-display-inline">The Commissioner may,
under such regulations as the Commissioner may prescribe, provide for the
amendment of charters issued to National Insurers and National Agencies.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID923F089C87DC41109CA1AA8CA920AEE8"><enum>(e)</enum><header>No Delegation
Permitted</header><text display-inline="yes-display-inline">The Commissioner
may not delegate to any insurance self-regulatory organization any authority
conferred under this section with respect to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDF3B09FF5FD05432899FC8E3E01CE7588"><enum>(1)</enum><text display-inline="yes-display-inline">the organization, incorporation, and powers
of National Insurers or National Agencies; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID799731854FF14774B883B221EC1B9E23"><enum>(2)</enum><text display-inline="yes-display-inline">the issuance and amendment of charters to a
National Insurer or National Agency.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID06319C1A4F56411BA07D6D1050652E1E"><enum>(f)</enum><header>Main
Office</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID19E816926B73479189D19A9D1848D17E"><enum>(1)</enum><header>Designation</header><text display-inline="yes-display-inline">Subject to the approval of the
Commissioner, a National Insurer or National Agency may designate any office at
which it conducts insurance operations as its main office.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE5412928333449A882D76EBC0EB1989D"><enum>(2)</enum><header>Charter to
specify main office</header><text display-inline="yes-display-inline">A
National Insurer or National Agency shall specify the State in which its main
office is located.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9F96C7039B8F4F57962F55250C62ADC0"><enum>(3)</enum><header>Change in main
office</header><text display-inline="yes-display-inline">With the approval of
the Commissioner, a National Insurer or National Agency may change the
designation of its main office, including to another existing office of the
National Insurer or National Agency.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF0A5441C4983451E974A251D9B19A447"><enum>(4)</enum><header>Citizenship</header><text display-inline="yes-display-inline">For purposes of jurisdiction, a National
Insurer or National Agency shall be deemed a citizen of the State in which its
main office is located and of the State in which it has its principal place of
business.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID9DE30E30DC8D4CF990CE7D3DB7175B29" section-type="subsequent-section"><enum>1202.</enum><header>United States
branches of non-United States Insurers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID324B7A603D92482D8E96386A87B0BBDD"><enum>(a)</enum><header>Authorization
of Non-United States Insurer</header><text display-inline="yes-display-inline">A non-United States insurer may transact
insurance in the United States through a United States branch by qualifying and
licensing the United States branch to do business as a National Insurer under
this Act, under such regulations as the Commissioner may prescribe.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID1505142060BF4347B4BB6AA2E0278803"><enum>(b)</enum><header>Trust
Account</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID7098DD5B1FD045E78F9AB4378EC30032"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner
shall not license a United States branch until the non-United States insurer
establishes a trust account, pursuant to a deed of trust that meets the
requirements of this subsection.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC7221B3A0F0C426092696D1415A3B8A9"><enum>(2)</enum><header>Assets</header><text display-inline="yes-display-inline">The trusteed assets of a United States
branch shall be held pursuant to a deed of trust with a United States bank that
meets such requirements as the Commissioner may prescribe, in trust for the
exclusive benefit, security, and protection of the policyholders, or
policyholders and creditors, of the United States branch in the United States
maintained as long as there is outstanding any liability of the United States
branch arising out of its insurance transactions in the United States.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID54C4F16732BD4186BFE493CB6AB5876E"><enum>(3)</enum><header>Surplus</header><text display-inline="yes-display-inline">The trusteed surplus of a United States
branch shall be subject to the same solvency standards required of National
Insurers, including the risk-based capital standards described in section
1211.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID374AF850C16D49C1B80F7B5AFDC1C1E1"><enum>(4)</enum><header>Filing</header><text display-inline="yes-display-inline">The Commissioner may require a United
States branch to file a statement, in such form as the Commissioner may
prescribe, that has been certified by the trustee.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDF5C04B9ECF5642DC84F6562C577097EA"><enum>(c)</enum><header>Subject to
Applicable Laws</header><text display-inline="yes-display-inline">Except as
otherwise provided under this section, a United States branch established under
this section—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID01B68970FBAD4CE5952B0AD55F274C0B"><enum>(1)</enum><text display-inline="yes-display-inline">shall be subject to all laws applicable to
a National Insurer; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID379D294CBC014DE78024BAE786D15BBF"><enum>(2)</enum><text display-inline="yes-display-inline">shall be treated as a National Insurer for
all purposes of this Act.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID25D41C00CF1449CFAD5D24C20346CC7B" section-type="subsequent-section"><enum>1203.</enum><header>Federal licensing
of National Insurers</header>
<subsection commented="no" display-inline="no-display-inline" id="IDD5B42D360DD54362996D0A6A2821B31E"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">A National Insurer
may not sell, solicit, negotiate, or underwrite any line of insurance for which
it does not hold a Federal license.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID05240912FB01416D90AC57AC1B45E5A2"><enum>(b)</enum><header>Issuance of
Federal Licenses</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDD7B04128644E46F9A80EF2C1D078E466"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may,
under such regulations as the Commissioner may prescribe, issue Federal
licenses that—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID61A71D8F356A452389F078607E8A88DB"><enum>(A)</enum><text display-inline="yes-display-inline">permit National Insurers to sell, solicit,
negotiate, and underwrite lines of insurance; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID242A4A2E75B649999DD2CFFAF6E803D6"><enum>(B)</enum><text display-inline="yes-display-inline">specify the lines of insurance that each
National Insurer may sell, solicit, negotiate, and underwrite.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID68983106519B43D081693E8BA41221A0"><enum>(2)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The regulations prescribed by the
Commissioner pursuant to paragraph (1) shall provide that—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC8E790692285483495DD04F105ED3072"><enum>(A)</enum><text display-inline="yes-display-inline">a National Insurer may hold a license to
sell, solicit, negotiate, and underwrite property/casualty insurance;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDDE8AA6F1ABC44835B22307C771889119"><enum>(B)</enum><text display-inline="yes-display-inline">a National Insurer that holds a license to
sell, solicit, negotiate, and underwrite life insurance may also sell, solicit,
negotiate, and underwrite disability income insurance, long-term care
insurance, annuities, and funding agreements; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1DC8B6B2A4134C768E7DD82897D64AD9"><enum>(C)</enum><text display-inline="yes-display-inline">no National Insurer may obtain—</text>
<clause commented="no" display-inline="no-display-inline" id="ID8B760921EC5B4F5D8E6268BBD5989C12"><enum>(i)</enum><text display-inline="yes-display-inline">a Federal license to engage in the sale,
solicitation, negotiation, and underwriting of property/casualty insurance;
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID55A144460EA547FEB293A069BE5B29C1"><enum>(ii)</enum><text display-inline="yes-display-inline">a Federal license to engage in the sale,
solicitation, negotiation, and underwriting of life insurance, annuities, or
funding agreements.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAF9CC6A359C849E3B56447427D2A5ED6"><enum>(3)</enum><header>Authority to
limit scope of insurance</header><text display-inline="yes-display-inline">Subject to paragraph (2), the regulations
prescribed by the Commissioner pursuant to paragraph (1) may provide that a
National Insurer that holds a license to sell, solicit, negotiate, and
underwrite specified lines of insurance may not hold a license to sell,
solicit, negotiate, and underwrite other specified lines of insurance.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID697508DA0DFE40D5B6C0846C4DBBA654"><enum>(4)</enum><header>Duration</header><text display-inline="yes-display-inline">A Federal license issued by the
Commissioner pursuant to this subsection shall remain in effect until the
license is—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDFBABBAC541F848EF86909AFAF1603260"><enum>(A)</enum><text display-inline="yes-display-inline">surrendered by the National Insurer;
or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2863ADF135D84BAF8895B879AB9B8BDC"><enum>(B)</enum><text display-inline="yes-display-inline">revoked or suspended by the Commissioner in
accordance with the provisions of this Act.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID4AE22763596744F3BB65FEDE38AF67C7"><enum>(c)</enum><header>Reinsurance</header><text display-inline="yes-display-inline">A National Insurer may—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDAD2D4A58AA704BAB80185C9CD4449AF2"><enum>(1)</enum><text display-inline="yes-display-inline">only reinsure the lines of insurance that
the National Insurer is—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE654C2DDFE9041A48574ED0039788C75"><enum>(A)</enum><text display-inline="yes-display-inline">licensed to sell, solicit, negotiate, and
underwrite under its Federal license; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDEF36ED8ABBEF4F539E73552BF30F40A6"><enum>(B)</enum><text display-inline="yes-display-inline">otherwise permitted to reinsure by the
terms of its Federal license; and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID07100D4527E6457789F73752725C4EA7"><enum>(2)</enum><text display-inline="yes-display-inline">confine its business to reinsurance.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID59A0D48D22544876972FE31EA971776D"><enum>(d)</enum><header>Nondiscrimination</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID1D841930B905437FB6BE315FFF3E3BF1"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided in
paragraph (2) and section 1202, the Commissioner may not impose any condition
for the granting of a Federal license to a National Insurer under this section
solely because the National Insurer is—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID609D6FADD8924B7C923CDE123ED55B27"><enum>(A)</enum><text display-inline="yes-display-inline">a subsidiary of a non-United States
person;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7A218B6EAC474F548E2F76BB600C5AB5"><enum>(B)</enum><text display-inline="yes-display-inline">partially owned by a non-United States
person; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7574BA7D064248B18F77C24FFAFF301E"><enum>(C)</enum><text display-inline="yes-display-inline">a United States branch of a non-United
States insurer.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDA8CA593E3D54B3792932981917B682E"><enum>(2)</enum><header>Exception</header><text display-inline="yes-display-inline">Notwithstanding paragraph (1), the
Commissioner may impose conditions for the granting of a Federal license that
are different from those imposed on other National Insurers—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID931592B9121842F1AB75A213C05457F6"><enum>(A)</enum><text display-inline="yes-display-inline">if the conditions attached are imposed on
the legal form in which the National Insurer chooses to operate; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE126C4A8DA0D46D19491ED1EF7EC3E66"><enum>(B)</enum><text display-inline="yes-display-inline">if the Commissioner makes a written finding
that the conditions are related to the protection of policyholders and are the
minimum conditions necessary to achieve the purposes of this Act.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID288D3949BD82453DA264EEADCE03E7B5" section-type="subsequent-section"><enum>1204.</enum><header>Corporate
governance</header>
<subsection commented="no" display-inline="no-display-inline" id="IDF6444B47334A4E54BC93BEE179AADCF0"><enum>(a)</enum><header>Compliance With
This Act and Applicable Regulations</header><text display-inline="yes-display-inline">The corporate governance procedures of a
National Insurer and a National Agency shall be consistent with the provisions
of this Act and all regulations issued by the Commissioner under this
Act.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID1DE6AE1A83964E54BB81CC781BF044A5"><enum>(b)</enum><header>Adherence to
State Law</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDE5718B8A886C4ADC88AADA1501FF212B"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided
under paragraph (3), each National Insurer and National Agency shall adhere to
corporate governance procedures of the relevant State law of the State in which
its main office is located or the State in which 1 of its United States holding
companies is organized or incorporated.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC131D449A1D34C2794A7C3D62D936E70"><enum>(2)</enum><header>Designation</header><text display-inline="yes-display-inline">Each National Insurer and National Agency
shall designate in its bylaws the body of relevant State law selected for its
corporate governance procedures.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4C847CEA60FC49CAB2C3F61E81F47696"><enum>(3)</enum><header>Discriminatory
provision</header><text display-inline="yes-display-inline">If the Commissioner
determines that any provision of a State corporate governance law is
discriminatory as applied to National Insurers or National Agencies, such
Insurer or Agency—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID4D3AE165F496447FB287AB8B10CCCEE0"><enum>(A)</enum><text display-inline="yes-display-inline">shall not be obligated to follow such a
provision of the relevant State law; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDBE0B7AE855CE4D28B46E989CD59DE5DF"><enum>(B)</enum><text display-inline="yes-display-inline">may follow such other provision of law as
the Commissioner determines to be appropriate.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDDAA4055BBD374729BFAF8DC52DC44669"><enum>(c)</enum><header>Independent
Audit Committee for National Insurers</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDF196319D6F5A469E8B2197044889BEED"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">Each National Insurer shall establish an
audit committee of its board of directors, which shall be composed entirely of
outside directors who are independent of management of the National
Insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC175E748787F46539C29E891649AD4FE"><enum>(2)</enum><header>Satisfaction</header><text display-inline="yes-display-inline">The requirement described in paragraph (1)
will be satisfied if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID6C516BA090F043E88B125D00AB54D0BB"><enum>(A)</enum><text display-inline="yes-display-inline">any person that controls the National
Insurer has established an audit committee of its board of directors entirely
composed of outside directors who are independent of management of such
controlling person; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID20022099B6EF4E298DFB8EE7A34ABB6D"><enum>(B)</enum><text display-inline="yes-display-inline">the role of the audit committee of the
controlling person in subparagraph (A) includes review of financial statements
of the National Insurer.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDEF957547D5A04A51B8C4FDE1D47F5230" section-type="subsequent-section"><enum>1205.</enum><header>Conversion of State
Insurer to National Insurer or State Insurance Agency to National
Agency</header>
<subsection commented="no" display-inline="no-display-inline" id="IDA62500AEC9944209A9C16FF98FFDE424"><enum>(a)</enum><header>Authorization
To Convert</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID01AEACB59208437D8278798B1CCB6903"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of law and subject to the approval of the Commissioner, a State
insurer may convert to a National Insurer and a State insurance agency may
convert to a National Agency.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6C900E9FEDFC4E7893BA3F5E38F39C4F"><enum>(2)</enum><header>Organizational
form</header><text display-inline="yes-display-inline">A State insurer that
converts to a National Insurer under paragraph (1) may—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID90576045C4A94A56821EBF84F8169CEA"><enum>(A)</enum><text display-inline="yes-display-inline">retain an organizational form permitted
under section 1201(a)(2); or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7883C95D4E9C4FA798F110A24C6D32D4"><enum>(B)</enum><text display-inline="yes-display-inline">change directly to another organizational
form that is permitted under section 1201(a)(2).</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA1445EAA51014BFD9C1F056B13414FEF"><enum>(b)</enum><header>Conversion
Procedures</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDA32F63C025234636B1D45543A20DD8C0"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may,
under such regulations as the Commissioner may prescribe, provide for—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID99078AD2385A4D4191276F2D0B0A44C1"><enum>(A)</enum><text display-inline="yes-display-inline">the conversion of State insurers into
National Insurers;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAF9B16DE86BA48109FAF20210CCA2A2A"><enum>(B)</enum><text display-inline="yes-display-inline">the conversion of State insurance agencies
to National Agencies; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD5E162F880174D1F8D359048EF964C78"><enum>(C)</enum><text display-inline="yes-display-inline">the issuance of charters to such converted
insurers and agencies.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAB1A59025E15440DB7A8295AA90E1541"><enum>(2)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The regulations issued by the Commissioner
under this section shall be consistent with—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5501988CB0084084A0F14EB858CAF983"><enum>(A)</enum><text display-inline="yes-display-inline">the regulations issued by the Commissioner
under section 1201; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4FC20A9FD69B42FF898C095B515347C5"><enum>(B)</enum><text display-inline="yes-display-inline">the provisions of section 1242 or 1243, in
the case of a change of form effected at the time of a conversion of a State
insurer into a National Insurer.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDD7ED6027750C42519F1D279DEC209546"><enum>(c)</enum><header>Effect of
Conversion</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID95BCED73C7E44D0FBC644DC580A712F3"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided
under paragraph (2), a State insurer or State insurance agency that converts
under this section—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDDB0F58E537364A658FF5313879E2DAD1"><enum>(A)</enum><text display-inline="yes-display-inline">shall be subject to the provisions of this
Act and to examination and regulation as provided under this Act to the same
extent as other National Insurers and National Agencies organized under this
Act;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID9F81108F8B684F15BB603349588F9F38"><enum>(B)</enum><text display-inline="yes-display-inline">shall be deemed to be a continuation of the
corporate existence of the State insurer or State insurance agency, as
applicable; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFCA5B00674F34B918EEBD42F71D100BE"><enum>(C)</enum><text display-inline="yes-display-inline">shall, by operation of law and without
further action, hold and be subject to all rights, privileges, liabilities,
property interests, and other interests and obligations that the State insurer
or State insurance agency held, or was subject to, immediately before the
conversion.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID965A754222E14048A2B3CE308782881D"><enum>(2)</enum><header>Exceptions</header><text display-inline="yes-display-inline">Notwithstanding paragraph (1), a State
insurer or State insurance agency that converts under this section—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID1F72373EAC1C446FAC46079863B9E0D8"><enum>(A)</enum><text display-inline="yes-display-inline">shall not be subject to any requirement to
maintain deposits with State insurance regulatory authorities;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7762CC7565DF4FBE885BE720AB5CE9E9"><enum>(B)</enum><text display-inline="yes-display-inline">shall not hold any State license to sell,
solicit, negotiate, and underwrite insurance that was held by the State insurer
or State insurance agency; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFDC9C0E538EA476FB048D7177725CDD7"><enum>(C)</enum><text display-inline="yes-display-inline">shall obtain, in accordance with section
1203 or 1301, as applicable, a Federal license for all lines of insurance that
it sells, solicits, negotiates, or underwrites.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID3422EC55BA66494BBF3A5B4A5BFD662B"><enum>(d)</enum><header>Special
Authority</header><text display-inline="yes-display-inline">The Commissioner
may, subject to such conditions as the Commissioner may prescribe by
regulation, permit a National Insurer or National Agency resulting from the
conversion of a State insurer or State insurance agency, as applicable, to
retain, hold, or exercise assets, liabilities, powers, and authorities that do
not conform to the legal requirements otherwise applicable to National Insurers
or National Agencies to the extent the Commissioner determines is
appropriate.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id337B5C6115DA40FAA002573C81EF7850"><enum>(e)</enum><header>Mutual holding
company controlling State insurers in stock form</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDcfaa0af4e7ee46bbacd4ebaf2da8ef87"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">If a State insurer
converting under this section is an insurer in stock form that is controlled by
a mutual holding company as a result of a previous conversion under State law
from an insurer in mutual form to an insurer in stock form, and, after the
conversion under this section, the mutual holding company would not control any
other State insurers having policies in force that give rise to membership in
the mutual holding company, then, notwithstanding any other provision of law,
in accordance with this section and regulations issued by the
Commissioner—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID7d7a833d9c3b457b8b11e2895f18a9af"><enum>(A)</enum><text display-inline="yes-display-inline">upon the conversion under this section, the
mutual holding company may remain a corporation organized under the law of the
State under which it was incorporated or may merge into a mutual holding
company incorporated under the law of another State; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2363845f1ffe4e268a2cf2d8235bc58c"><enum>(B)</enum><text display-inline="yes-display-inline">upon and after the conversion under this
section, the mutual holding company—</text>
<clause commented="no" display-inline="no-display-inline" id="ID373d27084b9c4a538eb87ddf9f59f3ea"><enum>(i)</enum><text display-inline="yes-display-inline">shall, to the extent provided in
regulations issued by the Commissioner, be subject to—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID2bd9cd2bca3847c9b8ee5e533c5ec4bb"><enum>(I)</enum><text display-inline="yes-display-inline">title V; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDe7cd2da9d9e74ca099ba1134b34a20cc"><enum>(II)</enum><text display-inline="yes-display-inline">examination, reporting, regulation, and
other supervision under this Act; and</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="IDb474f11af3ff47488be93f448b8a4623"><enum>(ii)</enum><text display-inline="yes-display-inline">shall not be subject to any form of
licensing, examination, reporting, regulation, or other supervision by reason
of being a mutual holding company or relating to the rights of members, the
sale, solicitation, negotiation, or underwriting of insurance (including all
products of National Insurers) or any other insurance operations except as
authorized under Federal law and except as provided in section 1125(b), as if
the mutual holding company were a National Insurer under this Act.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID70a6f1c2f9db4b4f9dc31a5c1a2535c7"><enum>(2)</enum><header>Conversion to a
corporation in stock form</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law
and in accordance with this subsection and regulations issued by the
Commissioner, a mutual holding company described in paragraph (1) may convert
to a corporation in stock form in a manner that—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDa486b1fff1b8472684a6c0df6a3beee4"><enum>(A)</enum><text display-inline="yes-display-inline">is found by the Commissioner to be fair and
equitable to the mutual holding company and its members; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID65741482b6f24ae780de896b5c7364f6"><enum>(B)</enum><text display-inline="yes-display-inline">is generally similar to conversion of an
insurer in mutual form to a National Insurer in stock form pursuant to section
1243.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB834AF2CE9DA4E7EBAEC0CE61DEC3E89"><enum>(f)</enum><header>No Delegation
Permitted</header><text display-inline="yes-display-inline">The Commissioner
may not delegate any authority under this section involving the conversion of a
State insurer into a National Insurer or a State insurance agency into a
National Agency to any insurance self-regulatory organization.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDB7CA3A5D384049C69FE00E52AE8895AC" section-type="subsequent-section"><enum>1206.</enum><header>Conversion of
National Insurer to State Insurer or National Agency to State Agency</header>
<subsection commented="no" display-inline="no-display-inline" id="ID119B07F63EA84FA4A461F8EC8BB1E867"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">Subject to such
notification procedures as the Commissioner may prescribe by regulation, a
National Insurer may convert into a State insurer and a National Agency may
convert into a State insurance agency, in accordance with applicable State
law.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDAC8D286904B847AA9939F634C07A3926"><enum>(b)</enum><header>Savings
Provision</header><text display-inline="yes-display-inline">Nothing in this
section or in the conversion of a National Insurer into a State insurer or a
National Agency into a State insurance Agency shall operate to abrogate any
rights, privileges, liabilities, property interests, or other interests or
obligations that a National Insurer or National Agency held or was subject to
immediately before the conversion.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID3EDD1AF6EA7F4AB7AA4048AF404662E7" section-type="subsequent-section"><enum>1207.</enum><header>Powers</header>
<subsection commented="no" display-inline="no-display-inline" id="IDEF05C2F4EB6241E3A64964F3C6F578B9"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">Upon issuance of its
charter, a National Insurer or National Agency shall have the power, subject to
such regulations as the Commissioner may prescribe, to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID4F48DE637594466D9799D7CB69FE2434"><enum>(1)</enum><text display-inline="yes-display-inline">have, alter, use, and reproduce a corporate
seal, or a facsimile of it;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7F6044C995154E19B47F2BFB9CD2222F"><enum>(2)</enum><text display-inline="yes-display-inline">have perpetual succession until such time
as it is liquidated, dissolved, merged, or otherwise wound up in accordance
with applicable law;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID29E7E5B1EBD34F3EB5335DF9BC03D312"><enum>(3)</enum><text display-inline="yes-display-inline">adopt, amend, and repeal by-laws;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8843943D24CC4063A9207E1ADE62D27F"><enum>(4)</enum><text display-inline="yes-display-inline">sue or be sued, complain and defend, and
otherwise litigate in any court and participate, as a party or otherwise, in
any judicial, administrative, arbitral, or other proceeding, in its corporate
name;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4DF6A6F66EB14BB3A45C7A2F64FB4E24"><enum>(5)</enum><text display-inline="yes-display-inline">make contracts and guarantees, incur
liabilities, borrow money, issue notes, bonds, and other obligations (which may
be convertible into or include the option to purchase other securities of the
National Insurer or National Agency), and secure any of its obligations by
mortgage or pledge of any of its property, franchises, or income;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA6F820AE8AB1499E90B499AC17388A48"><enum>(6)</enum><text display-inline="yes-display-inline">purchase, receive, subscribe for, or
otherwise acquire, own, hold, vote, improve, employ, use, and otherwise deal in
and with real and personal property or other assets, or any interest therein,
and sell, convey, mortgage, lease, exchange, transfer, or otherwise dispose of,
or mortgage or pledge, all or any of its property and assets, or any interest
therein;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA8BBB1DC48D647928D51A0C05B5332D8"><enum>(7)</enum><text display-inline="yes-display-inline">lend money, invest, and reinvest its funds
and receive and hold real and personal property as security for
repayment;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFFDD940D76C446B098B5D398F1E00368"><enum>(8)</enum><text display-inline="yes-display-inline">participate with others in any corporation,
partnership, limited partnership, joint venture, or other association, or in
any transaction, undertaking, or arrangement, which the National Insurer or
National Agency would have power to conduct by itself, whether or not such
participation involves sharing or delegating control with or to others;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0E3D721176C0473DBE49C02FCA177A9D"><enum>(9)</enum><text display-inline="yes-display-inline">elect or appoint directors, officers,
employees, and agents of the National Insurer or National Agency, define their
duties, fix their compensation, and lend them money and credit;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID302EF5B25C4C427CA9E6BDF23A80ACAF"><enum>(10)</enum><text display-inline="yes-display-inline">pay pensions and establish pension plans,
pension trusts, profit-sharing plans, share bonus plans, share option plans,
and other benefit or incentive plans for any or all current or former
directors, officers, employees, and agents of the National Insurer or National
Agency, its subsidiaries or its affiliates;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFAD6E6EF50304ECFBE5C7DCF5BDF91BC"><enum>(11)</enum><text display-inline="yes-display-inline">provide insurance for its benefit on the
life of any of its directors, officers, or employees, or on the life of any
shareholder for the purpose of acquiring at such shareholder’s death shares of
its stock owned by such shareholder;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID87D2DB30B5E54B71B10ACB09A072F1FD"><enum>(12)</enum><text display-inline="yes-display-inline">in the case of a National Life
Insurer—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC49623D1463843D3AFE63465801450E5"><enum>(A)</enum><text display-inline="yes-display-inline">establish and maintain 1 or more separate
accounts and allocate amounts to such accounts (including any proceeds applied
under optional modes of settlement or under dividend options);</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID34FB07426FB04C8B92700C480BF59930"><enum>(B)</enum><text display-inline="yes-display-inline">provide life insurance, annuities,
disability income insurance, long-term care insurance, or funding agreements
(and incidental benefits), payable in fixed or variable amounts from the
accounts described in subparagraph (A) or from the general account;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID75D1A5473A1B4286871399B574863661"><enum>(C)</enum><text display-inline="yes-display-inline">hold and accumulate funds pursuant to
funding agreements; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6A9E1DC114C84F3581EDCCEDAB1F738A"><enum>(D)</enum><text display-inline="yes-display-inline">provide investment advice and investment
management services;</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8E430B1386074F428514881DD48E3D02"><enum>(13)</enum><text display-inline="yes-display-inline">in the case of a National Insurer—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID00094BFFFB6A4ABAA19B679676D026C1"><enum>(A)</enum><text display-inline="yes-display-inline">engage in the sale, solicitation,
negotiation, and underwriting of insurance;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5E184AE578144243934B9657645E2355"><enum>(B)</enum><text display-inline="yes-display-inline">establish and maintain 1 or more protected
cells in connection with an insurance securitization and attribute to such
cells insurance and reinsurance obligations with respect to its general
account, obligations relating to the insurance securitization and assets to
fund such obligations; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCC9A73F20B5048ADB92323199DD06352"><enum>(C)</enum><text display-inline="yes-display-inline">engage in all other insurance operations
and exercise all such incidental powers as shall be necessary to carry on
insurance operations;</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5BCFC653B9A743318C07987D9E5829C7"><enum>(14)</enum><text display-inline="yes-display-inline">in the case of a National Agency, engage in
the sale, solicitation, and negotiation of policies of insurance issued by any
National Insurer, State insurer, or United States branch of a non-United States
insurer, and exercise all such incidental powers as shall be necessary to carry
out such activities, including claims adjustment and settlement, risk
management, employee benefits advice, and retirement planning;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7DC1A407323E49B1B14FEA58C09CFD66"><enum>(15)</enum><text display-inline="yes-display-inline">provide benefits or payments to its
directors, officers, and employees, subsidiaries or affiliates, and to their
estates, families, dependents, or beneficiaries, in recognition of the past
services of the directors, officers, and employees to the National Insurer or
National Agency or its subsidiaries or affiliates;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5269F4D14540406BB1CC05573C10E0DF"><enum>(16)</enum><text display-inline="yes-display-inline">make donations and otherwise devote its
resources for the public welfare or for charitable, scientific, educational,
humanitarian, philanthropic, or religious purposes;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID96048EE6142B45BCA5743B633A6F9824"><enum>(17)</enum><text display-inline="yes-display-inline">serve as a promoter, partner, member,
associate, or manager of any business entity;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID668EAC5BBADF4B8DB4007500289CD578"><enum>(18)</enum><text display-inline="yes-display-inline">provide loss control, advice, exposure
identification, and reduction strategies, and recommend and expedite risk
financing alternatives;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID65D1BA2200B94651B741AC120474832E"><enum>(19)</enum><text display-inline="yes-display-inline">engage in any other lawful activity that is
necessary or convenient to further its activities and affairs; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE02F51233AB44373965905789AC88878"><enum>(20)</enum><text display-inline="yes-display-inline">exercise the powers granted by this Act in
any State and in any foreign jurisdiction.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID12857CAC46AB41F0BBDCF66FCBA11A09"><enum>(b)</enum><header>Effect on State
Law</header><text display-inline="yes-display-inline">No State may, by statute,
regulation, order, interpretation, or other action, prevent or restrict a
National Insurer or National Agency from exercising any power conferred by this
section or by any regulation authorized by this section.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDB9A65BCBB3FB4604A3F07CA3404809B7"><enum>(c)</enum><header>Subsidiaries</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDecb5f6f17b86413fa40ffb10a29697af"><enum>(1)</enum><header>National
Insurers</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5547c94448de48d68a6b56f59071983c"><enum>(A)</enum><header>Authorization</header>
<clause commented="no" display-inline="no-display-inline" id="id800BAA17F6FE413992EF9733F5E313B2"><enum>(i)</enum><header>In
general</header><text display-inline="yes-display-inline">A National Insurer
may establish, invest in, or otherwise acquire 1 or more subsidiaries engaged
or organized to engage in any business lawful under the laws of the
jurisdictions in which the subsidiaries are organized.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idCF80CDF46F9A42719FD3693D6E4A1ABD"><enum>(ii)</enum><header>Restriction</header><text display-inline="yes-display-inline">Without the prior written approval of the
Commissioner, not more than 20 percent of the National Insurer’s assets may be
invested in any 1 subsidiary described in clause (i) and not more than 40
percent of a National Insurer’s assets may be invested in 2 or more
subsidiaries engaged in such other activities.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID413e557b512c4650974a97d6d563cd19"><enum>(B)</enum><header>Calculation</header><text display-inline="yes-display-inline">In calculating the amount invested by a
National Insurer in a subsidiary under subparagraph (A), there shall be
included only the following:</text>
<clause commented="no" display-inline="no-display-inline" id="IDabdd7b85d7734ce4831005c1748543d2"><enum>(i)</enum><text display-inline="yes-display-inline">Total net monies or other consideration
expended and obligations assumed by the National Insurer in the acquisition or
formation of the subsidiary, including all organizational expenses and
contributions to capital and surplus of the subsidiary whether or not
represented by the purchase of capital stock or issuance of other
securities.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID003897ee077d46c2ad94684ab4e88f9b"><enum>(ii)</enum><text display-inline="yes-display-inline">All amounts expended by the National
Insurer in acquiring additional common stock, preferred stock, debt
obligations, and other securities of the subsidiary.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID948aee87a8be40eea3acb36c34687e2f"><enum>(iii)</enum><text display-inline="yes-display-inline">All contributions by the National Insurer
to the capital or surplus of the subsidiary subsequent to its acquisition or
formation.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDce0fd9b9a8aa40208bb30cc2518c4202"><enum>(C)</enum><header>Qualification
of investment; when determined</header><text display-inline="yes-display-inline">Whether any investment made pursuant to
subparagraph (A) meets the applicable requirements of such subparagraph shall
be determined before the investment is made by calculating the applicable
investment limitations as though the investment had already been made, taking
into account the then outstanding principal balance on all previous investments
in debt obligations, and the value of all previous investments in equity
securities as of the day they were made, net of any return of capital invested,
not including dividends.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6ea17dee63994deea91cf1695ffced0d"><enum>(D)</enum><header>Exception</header><text display-inline="yes-display-inline">The limitations provided for in
subparagraph (A) shall not apply to investments by a National Insurer
in—</text>
<clause commented="no" display-inline="no-display-inline" id="IDabf85f7959a04943b1658681c93538e3"><enum>(i)</enum><text display-inline="yes-display-inline">any subsidiary engaged primarily in the
sale, solicitation, negotiation, and underwriting of any line of insurance that
the National Insurer is authorized to sell, solicit, negotiate, and underwrite;
or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID3dbf9258b79b45b281eed443a88911c8"><enum>(ii)</enum><text display-inline="yes-display-inline">any subsidiary whose sole business function
is to own assets (including other subsidiaries) that the National Insurer
itself is authorized to own.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDc8ddf16f6585404e8f68dbb2768bd250"><enum>(E)</enum><header>Notice</header><text display-inline="yes-display-inline">A National Insurer shall notify the
Commissioner, in writing, not later than 20 calendar days after establishing,
investing in, or acquiring a subsidiary, unless the transaction requires the
prior written approval of the Commissioner under subparagraph (A).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6aff9d1d7aa14441b95cc114c5bd44cd"><enum>(2)</enum><header>National
agencies</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8f095a0d05204de78a98adae1433bd0b"><enum>(A)</enum><header>Authorization</header><text display-inline="yes-display-inline">A National Agency may establish, invest in,
or otherwise acquire 1 or more subsidiaries engaged or organized to engage in
any business activity that is lawful for a National Agency under this
Act.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID254e9019cb914b22924c1f98976094f1"><enum>(B)</enum><header>Notice</header><text display-inline="yes-display-inline">A National Agency shall notify the
Commissioner, in writing, not later than 30 calendar days after establishing,
investing in, or acquiring a subsidiary.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDafda6ef3be174cc0b2cdcc917c8d6aa3"><enum>(d)</enum><header>Dividends and
distributions to shareholders</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDca5223ff18bd4435b31b80476428e6d0"><enum>(1)</enum><header>Shareholder
dividends and distributions permitted</header><text display-inline="yes-display-inline">A National Insurer may declare and pay
dividends or make other distributions in cash, bonds, or property on its
outstanding shares, unless—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDafe99f1304e447b186ececdeba2a8b00"><enum>(A)</enum><text display-inline="yes-display-inline">the National Insurer is insolvent or would
be made insolvent by such payment; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDa6ec9eb2ed0b4b04bac1114fa625630a"><enum>(B)</enum><text display-inline="yes-display-inline">the declaration, payment, or distribution
would be contrary to any restrictions contained in the charter of the National
Insurer.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDaa88938c16b54792a13033bd7e1f03d9"><enum>(2)</enum><header>Source of
shareholder dividends and distributions</header><text display-inline="yes-display-inline">A National Insurer may only declare and pay
dividends or make other distributions out of surplus if the assets of the
National Insurer after such declaration, payment, or distribution is not less
than the amount of its capital.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDfb18c6b4225e4603a3c3cdcfa614184a"><enum>(3)</enum><header>Other
provisions</header><text display-inline="yes-display-inline">Shareholder
dividends and distributions made pursuant to this subsection shall be subject
to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDac15566e43984e8c9789b9ce5391951d"><enum>(A)</enum><text display-inline="yes-display-inline">the standards set forth in section
1403(a)(1)(E); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID40ccba5e52ed495883d34d34bfaf933e"><enum>(B)</enum><text display-inline="yes-display-inline">the notice requirements of section
1403(b).</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID555E5153E63E41149FF175CBAE0E7F82" section-type="subsequent-section"><enum>1208.</enum><header>Separate accounts
of National Life Insurer</header>
<subsection commented="no" display-inline="no-display-inline" id="ID177237B033D6467EBB7B5FEFD2A7D047"><enum>(a)</enum><header>Ownership</header><text display-inline="yes-display-inline">Any amount allocated by a National Life
Insurer to a separate account shall be owned and controlled by the National
Life Insurer and no National Life Insurer by reason of such account shall be or
hold itself out to be a trustee.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDCA4150E974C84FC2A749C09A342DAB12"><enum>(b)</enum><header>Liabilities</header><text display-inline="yes-display-inline">Assets allocated by a National Life Insurer
to a separate account shall not be chargeable with liabilities arising out of
any other business of the National Life Insurer to the extent so provided in
the applicable agreements.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDE0F47C4C6D0F43F0BBF6CAA255909C8D"><enum>(c)</enum><header>Security
Interests Permitted</header><text display-inline="yes-display-inline">A
National Life Insurer may allow for a security interest to attach to assets
allocated to a separate account if the security interest is in favor of a
creditor of the separate account and otherwise allowed under applicable
law.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDF10DCBCDBBE34A5F95521E5C826B5379" section-type="subsequent-section"><enum>1209.</enum><header>Protected
cells</header>
<subsection commented="no" display-inline="no-display-inline" id="ID8516D1E3D1734D258ADA7DFC4B3F5D14"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">A National Insurer may establish 1 or more
protected cells with the approval of the Commissioner.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID28D9A0806BFE4C8EA64A30DA95690B8B"><enum>(b)</enum><header>Protected Cell
Assets</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDF2C52A1C7F784EE7A36BB0EEAA06CEDE"><enum>(1)</enum><header>Ownership</header><text display-inline="yes-display-inline">All amounts attributed to a protected cell
established under this section, including assets transferred to a protected
cell account, shall be owned by the National Insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDECC2CA8218946AC87C6AB109BDE626E"><enum>(2)</enum><header>Trustee</header><text display-inline="yes-display-inline">The National Insurer may not be, nor hold
itself out to be, a trustee with respect to the protected cell assets of the
protected cell account described in paragraph (1).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID19CD7BD3F0C5451EB35FB5DC8FE7780B"><enum>(3)</enum><header>Liabilities</header><text display-inline="yes-display-inline">The assets of a protected cell established
under this section shall not be chargeable with liabilities arising out of any
other business of the National Insurer.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID696B53A23A1F47AF83593B1015C28490"><enum>(c)</enum><header>Security
Interests Permitted</header><text display-inline="yes-display-inline">A
National Insurer may allow for a security interest to attach to protected cell
assets or a protected cell account if the security interest is in favor of a
creditor of the protected cell and otherwise allowed under applicable
law.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDB555953FB6E54C4388BB57C1B6046D02"><enum>(d)</enum><header>Reach of
Creditors and Other Claimants</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDB2206900AB1F408D8EE87AC3FCBC9D46"><enum>(1)</enum><header>Availability</header><text display-inline="yes-display-inline">Protected cell assets shall only be
available to the creditors of a National Insurer that are creditors in respect
to that protected cell.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD33FB34B7F894C6DBD46F3B2C3061FCD"><enum>(2)</enum><header>Recourse</header><text display-inline="yes-display-inline">Creditors with respect to a protected cell
shall have no recourse against the protected cell assets of other protected
cells or the general account assets of the National Insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2FDD0610360D4C4F887D4EDF622DD821"><enum>(3)</enum><header>Fraud</header><text display-inline="yes-display-inline">The establishment of a protected cell shall
not, in and of itself, constitute a fraudulent conveyance, an intent by a
National Insurer to defraud creditors, or the carrying out of business by a
National Insurer for any other fraudulent purpose.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID436684B4EE4E409F86F95B95ACAF8345"><enum>(e)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Commissioner shall promulgate
regulations that establish standards for protected cells established by
National Insurers.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID7577E455E342465CAF1C17E04F5B7BF9"><enum>(f)</enum><header>Effect on State
Law</header><text display-inline="yes-display-inline">No State may, by statute,
regulation, order, interpretation, or otherwise, require licensing or otherwise
regulate in any manner—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDD15903ABEFD0460E83F5C676859A3C20"><enum>(1)</enum><text display-inline="yes-display-inline">an investor in an insurance securitization,
solely by reason of its investment, as an insurer, reinsurer, or other person
transacting insurance; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBA9967EEFFF142ED92A394206353FA8E"><enum>(2)</enum><text display-inline="yes-display-inline">an underwriter or selling agent (or its
partners, directors, officers, members, managers, employees, agents,
representatives, or advisors) in an insurance securitization as an insurance or
reinsurance agent, broker, producer, intermediary, advisor, consultant, or
similar insurance professional by virtue of its activities in connection with
the insurance securitization.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDF1C692505E2C42A1A460EF800213AB31" section-type="subsequent-section"><enum>1210.</enum><header>Chartering and
licensing commencement date</header>
<subsection commented="no" display-inline="no-display-inline" id="ID5b4d92b7f86f425483b345c86b1b5de4"><enum>(a)</enum><header>National
insurer</header><text display-inline="yes-display-inline">The Commissioner may
charter or license a National Insurer when the following regulations have been
published in interim final form:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID35a1404f127b4360be3ae96517dd360a"><enum>(1)</enum><text display-inline="yes-display-inline">The fee and assessment regulations
authorized by section 1122.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID807eb41995d34ce9a7ef7c33b014e13c"><enum>(2)</enum><text display-inline="yes-display-inline">The reporting regulations authorized by
section 1124.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDbd222e7311fe4c26a6f289bcb735c6cc"><enum>(3)</enum><text display-inline="yes-display-inline">The organizational regulations authorized
by section 1201.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDd71a3c2d6fd5432ab6cf36dd45d2f757"><enum>(4)</enum><text display-inline="yes-display-inline">The licensing regulations authorized by
section 1203.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDfe99e6c8f0f94502bd2ffa8bbdd1ca7e"><enum>(5)</enum><text display-inline="yes-display-inline">The charter conversion regulations
authorized by section 1205.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDa699e8f2f57f49f7b89c4fb6b02c8c61"><enum>(6)</enum><text display-inline="yes-display-inline">The transitional financial regulations
authorized by section 1211.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDa45e1a4e749845948adbdda1bd37d63c"><enum>(7)</enum><text display-inline="yes-display-inline">The product regulations authorized by
section 1213.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDf00a2972d489416681ef7d8c8b01dd6f"><enum>(8)</enum><text display-inline="yes-display-inline">The market conduct regulations authorized
by section 1215.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDec4bb0afd96342ecafc105e379227f09"><enum>(9)</enum><text display-inline="yes-display-inline">The control regulations authorized by
section 1231.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID196c666f68e5409fbf402cc5d7f6f09a"><enum>(10)</enum><text display-inline="yes-display-inline">The merger, consolidation, and acquisition
regulations authorized by section 1232.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDd41f7e8d6cdb44079459996813c16b08"><enum>(11)</enum><text display-inline="yes-display-inline">The bulk transfer regulations authorized by
section 1233.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDe5356af566784334bde8aebed2138634"><enum>(12)</enum><text display-inline="yes-display-inline">The conversion regulations authorized by
sections 1242 and 1243.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDd28ef8cbd37d422da2b7df1b40b81991"><enum>(13)</enum><text display-inline="yes-display-inline">The holding company regulations authorized
by sections 1402 and 1403.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9dc7b600e37b48b1a294623c431ed2c5"><enum>(14)</enum><text display-inline="yes-display-inline">The receivership regulations authorized by
section 1504.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0cfd58d6909d48799da6807ad66b482b"><enum>(15)</enum><text display-inline="yes-display-inline">The insolvency protection regulations
authorized by section 1609.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDae7d5caed72f4d0881b16e497653f32c"><enum>(b)</enum><header>National
agencies</header><text display-inline="yes-display-inline">The Commissioner may
charter or license a National Agency when the following regulations have been
published in interim final form:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID9fa4532a6f414613a87fb3550c4a6dd9"><enum>(1)</enum><text display-inline="yes-display-inline">The fee and assessment regulations
authorized by section 1122.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5d52b71ab95a4dd689785defd6ea42d7"><enum>(2)</enum><text display-inline="yes-display-inline">The reporting regulations authorized by
section 1124.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID94150d5528844541b36515d17268c672"><enum>(3)</enum><text display-inline="yes-display-inline">The organizational regulations authorized
by section 1201.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID26e9f9f72f8043a69332b652073cfc17"><enum>(4)</enum><text display-inline="yes-display-inline">The charter conversion regulations
authorized by section 1205.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID115fa70974554c09813b0779f49ec5a2"><enum>(5)</enum><text display-inline="yes-display-inline">The market conduct regulations authorized
by section 1215.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDb8ca8afca1e24c6cb3832cb958da064c"><enum>(6)</enum><text display-inline="yes-display-inline">The control regulations authorized by
section 1231.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID89f49df4d61f46d0a24be8dcb2344632"><enum>(7)</enum><text display-inline="yes-display-inline">The merger, consolidation, and acquisition
regulations authorized by section 1232.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0048349b19344f67a5057ef50d276bf5"><enum>(8)</enum><text display-inline="yes-display-inline">The producer licensing regulations
authorized by section 1301.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDe57c48ab061b4284a5a11beb21233979"><enum>(9)</enum><text display-inline="yes-display-inline">The holding company regulations authorized
by sections 1402 and 1403.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID29ae5929e9ad4e9fb40e5f8f8335088a"><enum>(c)</enum><header>Timing and
notice</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID438279b028c5481388c906770549b942"><enum>(1)</enum><header>Timing</header><text display-inline="yes-display-inline">The regulations described in subsections
(a) and (b) shall be published in interim final form not later than 2 years
after the initial appointment and confirmation of the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDb7490bc38604463ea67f0d6d9c3921d6"><enum>(2)</enum><header>Notice</header><text display-inline="yes-display-inline">At such time as the regulations described
in subsections (a) or (b) have been issued in interim final form, the
Commissioner shall publish a notice in the Federal Register announcing that the
Office is prepared to act on chartering and licensing applications.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id78FDB4FE939443EEB8FC0C721808CE73"><enum>(3)</enum><header>Considering and
acting upon applications</header><text display-inline="yes-display-inline">Notwithstanding any challenge to the
regulations described in subsections (a) and (b), the Commissioner shall have
the authority to consider, and act upon, chartering and licensing applications
immediately upon publication of the notice described in paragraph (2).</text>
</paragraph></subsection></section></subtitle><subtitle commented="no" id="IDBFFE97079E8947BCA8D3ED8F6F935D40" style="OLC"><enum>B</enum><header>Financial, Product, and Market
Regulation</header>
<section commented="no" display-inline="no-display-inline" id="ID58CB0858B8E7421FB85F1298FD19EF25" section-type="subsequent-section"><enum>1211.</enum><header>Transitional
financial regulations</header>
<subsection commented="no" display-inline="no-display-inline" id="idDAC00A04F5E940C6990C8E22D0071156"><enum>(a)</enum><header>Promulgation of
initial financial regulations that are consistent with NAIC standards and
models</header><text display-inline="yes-display-inline">The Commissioner shall
establish, by regulation, the following:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID9cf228a4074644f7a61b9fafe75952a3"><enum>(1)</enum><text display-inline="yes-display-inline">Accounting principles for a National
Insurer, which are consistent with the statutory accounting practices
promulgated by the NAIC in its <quote>Accounting Practices and Procedures
Manual</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8305b56d5c5545829555b4e9f2501922"><enum>(2)</enum><text display-inline="yes-display-inline">Auditing standards for a National Insurer,
which are consistent with the guidance prescribed by the NAIC in its
<quote>Model Regulation Requiring Annual Audited Financial
Reports</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDa5462da56aa14113b827f1a62f675f73"><enum>(3)</enum><text display-inline="yes-display-inline">Investment standards for a National
Insurer, which are consistent with the NAIC’s <quote>Investment of Insurers
Model Act (Defined Standards Version)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID13b52604397449c6a501f852dbac5288"><enum>(4)</enum><text display-inline="yes-display-inline">Risk-based capital standards for a National
Insurer, which are consistent with NAIC’s <quote>Risk-Based Capital (RBC) for
Insurers Model Act</quote> and the related <quote>RBC
Instructions</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDc905462bd0b4405eb8606eb68c31c6b7"><enum>(5)</enum><text display-inline="yes-display-inline">Valuation standards for the obligations and
liabilities of a National Life Insurer, which are consistent with the NAIC’s
<quote>Standard Valuation Law, Valuation of Life Insurance Policies Regulation,
Universal Life Insurance Model Regulation, and Variable Life Insurance Model
Regulation</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID372f940189ed430f9eef2c7cd99a98ac"><enum>(6)</enum><text display-inline="yes-display-inline">Continuing and alternative (nonforfeiture)
benefits standards applicable to National Life Insurers, which are consistent
with the NAIC’s <quote>Standard Nonforfeiture Law for Life Insurance, Variable
Life Insurance Model Regulation, Standard Nonforfeiture Law for Individual
Deferred Annuities, Long-Term Care Insurance Model Act, and Long-Term Care
Insurance Model Regulation</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID469435b6459449db9be8670159022468"><enum>(7)</enum><text display-inline="yes-display-inline">Standards for the preparation and filing of
an annual actuarial opinion on the adequacy of a National Life Insurer’s assets
to meet its reasonably expected obligations and liabilities, which are
consistent with the NAIC’s <quote>Actuarial Opinion and Memorandum
Regulation</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDeb8c80f975ca458b8f2d4673eace2e7a"><enum>(8)</enum><text display-inline="yes-display-inline">Standards for the preparation and filing of
an annual actuarial opinion on the loss and loss adjustment expense reserves of
a National Property/Casualty Insurer, which are consistent with the NAIC’s
<quote>Property and Casualty Actuarial Opinion Model Law</quote> and applicable
<quote>NAIC Property and Casualty Annual Statement Instructions</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDee6270fc486b44c590743faca425b52d"><enum>(b)</enum><header>N<enum-in-header>AIC</enum-in-header>
standards and models</header><text display-inline="yes-display-inline">The NAIC
standards and models cited in subsection (a) shall be the standards and models
adopted by the NAIC as of the date of introduction of the National Insurance
Act of 2006 as a bill in Congress.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDea013ad613184bafa71a2eb0ce2a3169"><enum>(c)</enum><header>Effective date
and five-year transitional period for initial financial
regulations</header><text display-inline="yes-display-inline">The financial
regulations specified in subsection (a) shall be issued in final form no later
than 2 years following the initial appointment and confirmation of the
Commissioner, and each regulation shall remain in effect for 5 years following
the date upon which it becomes effective.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID8949d03cd22a45b79947f382dd60acf1"><enum>(d)</enum><header>N<enum-in-header>AIC</enum-in-header>
amendments</header><text display-inline="yes-display-inline">If, after the date
of introduction of the National Insurance Act of 2006 as a bill in Congress,
the NAIC amends any standard or model upon which the initial financial
regulations are based, the Commissioner shall determine, by regulation, whether
such amendment shall apply to a National Insurer. If the Commissioner
determines that an NAIC amendment to a standard or model should apply to a
National Insurer, the Commissioner may specify, by regulation, whether the
amendment applies in whole or in part.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDd2b35ba449234e71ab1e63b08ceb1ce0"><enum>(e)</enum><header>Revisions or
modifications to initial regulations by commissioner</header>
<paragraph commented="no" display-inline="no-display-inline" id="idABEDEE43027C4021A50181248B6CEA83"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to paragraph
(2), after an initial financial regulation specified in subsection (a) has been
in effect for 5 years, the Commissioner may, by regulation, revise or modify
the regulation.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idA3980FDD060344538F94C028087B076C"><enum>(2)</enum><header>Special
circumstance</header><text display-inline="yes-display-inline">The Commissioner
may, by regulation, revise or modify an initial financial regulation at any
time if the Commissioner determines that any such revision or modification is
necessary to protect policyholders or prevent hazardous conduct by a National
Insurer.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID35f168de8ff94d61bd01c866abf2c1b9" section-type="subsequent-section"><enum>1212.</enum><header>Other financial
regulations</header><text display-inline="no-display-inline">In addition to the
financial regulations specified in section 1211, the Commissioner may issue
other financial regulations as the Commissioner determines necessary.</text>
</section><section commented="no" display-inline="no-display-inline" id="IDf874b1789342464d80f7efe44186c735" section-type="subsequent-section"><enum>1213.</enum><header>Product regulation
for National Life Insurers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID43b7cbd21a6c45918e04459d215e8955"><enum>(a)</enum><header>Applicability</header><text display-inline="yes-display-inline">This section shall apply to the insurance
business of National Life Insurers.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDd26e9534b5224f168dea250f792ebead"><enum>(b)</enum><header>Underwriting
standards</header><text display-inline="yes-display-inline">A National Insurer
may classify or underwrite risks if any decision to refuse to insure, to
continue to insure, to limit the amount, extent, or kind of coverage, or to
charge a different rate for the same coverage is—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID163ef282e0d34ccab07f61e7946fb9ae"><enum>(1)</enum><text display-inline="yes-display-inline">based on sound actuarial principles;
or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID23d67c787bdd44d38ac3afa6d17c3062"><enum>(2)</enum><text display-inline="yes-display-inline">related to actual or reasonably anticipated
experience.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDa3ccfe4e90b047b894bc232dd5a0def4"><enum>(c)</enum><header>Law applicable
to insurance policies or other products of national insurers</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID731d689c210f427fa878121c08bf6a4e"><enum>(1)</enum><header>Law specified
by parties</header><text display-inline="yes-display-inline">Subject to any
applicable Federal law, the provisions of any insurance policy or other product
of a National Insurer shall be interpreted in accordance with the law of the
jurisdiction specified by the parties to the insurance policy or other product
if the parties have specified the law of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID65eb3590ec6540d6a11252cb040a679c"><enum>(A)</enum><text display-inline="yes-display-inline">the jurisdiction in which the main office
of the National Insurer is located;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2904aa3fdb7a4e58b4bdcbdfc0e31328"><enum>(B)</enum><text display-inline="yes-display-inline">the jurisdiction in which the principal
place of business of the National Insurer is located; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDcbae4eac1550456280e0f5a16e0ce79a"><enum>(C)</enum><text display-inline="yes-display-inline">the jurisdiction in which the insurance
policy or other product is delivered.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2075b686434f4d1e8bdf71e4943101ba"><enum>(2)</enum><header>Default
law</header><text display-inline="yes-display-inline">If the parties to an
insurance policy or other product of a National Insurer have not specified the
jurisdiction whose law shall govern the provisions of the insurance policy or
other product, such provisions shall be interpreted in accordance with the law
of the jurisdiction in which the insurance policy or other product is
delivered.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDe2db8fb633414b109a06e7f929622405"><enum>(3)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Commissioner shall establish, by
regulation, choice of law rules and standards under this subsection.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID7C2F8A938E824F5D8BCAB9DC1A2AF79C"><enum>(d)</enum><header>Standards for
policies</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID92a71c7ac92c44289cb4d0a3634d82e7"><enum>(1)</enum><header>Policy</header><text display-inline="yes-display-inline">In this subsection, the term
<term>policy</term>—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID0f18229d27fe414cb0b865b1dd75c98f"><enum>(A)</enum><text display-inline="yes-display-inline">means—</text>
<clause commented="no" display-inline="no-display-inline" id="ID4518f1c2a4874791ad640fba7f6f86b5"><enum>(i)</enum><text display-inline="yes-display-inline">a policy, contract, certificate, or other
evidence of life insurance, disability income insurance, or long-term care
insurance; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDdb6b859812e3471f86c208dfe01c42f7"><enum>(ii)</enum><text display-inline="yes-display-inline">an annuity contract or a rider or
endorsement to such contract; and</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID60fa62d5828b4d66a2aa6406a3ce9913"><enum>(B)</enum><text display-inline="yes-display-inline">does not include—</text>
<clause commented="no" display-inline="no-display-inline" id="ID0696e4d273e1463f8f065ffd7669fdb5"><enum>(i)</enum><text display-inline="yes-display-inline">a funding agreement;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID33287d49991443c29bf8707f7bdf5dde"><enum>(ii)</enum><text display-inline="yes-display-inline">a reinsurance contract; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDf38ed61d5d4a479aa6ebccaab2d675b0"><enum>(iii)</enum><text display-inline="yes-display-inline">an agreement, special rider, or endorsement
relating only to the manner of distributing benefits or to the reservation of
rights and benefits used at the request of the individual policyholder.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBE51F14498494C02B24DEAB05964374E"><enum>(2)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Commissioner shall establish, by
regulation, standards for policies issued by a National Insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6F6465BF1A73456BB94C3113BFA88AB4"><enum>(3)</enum><header>Types of policy
requirements</header><text display-inline="yes-display-inline">The standards
established under paragraph (1) may include general policy requirements and
requirements regarding particular classes of policies.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID7322BB1626274B94B348BF5E324AFB44"><enum>(e)</enum><header>Product
Filings</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDDECC36D22DCA40A88E72FE5EB47F2E25"><enum>(1)</enum><header>Form
approval</header><text display-inline="yes-display-inline">A National Insurer
shall not issue a policy until the form of the policy has been received by the
Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAF2A403A4A884495925F95AC539F9FFE"><enum>(2)</enum><header>Exemptions</header><text display-inline="yes-display-inline">The Commissioner may, by regulation, exempt
particular categories of policies from the filing requirement.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7B7056B5A928437EA6DD2A02C11E5A9C"><enum>(3)</enum><header>Compliance
certificate</header><text display-inline="yes-display-inline">In accordance
with regulations promulgated by the Commissioner, any filing of a policy form
shall be accompanied by written certification by an officer of the National
Insurer that the policy form complies with the standards applicable to such
form.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA5BBA40D21E944B6A83540572F607651"><enum>(f)</enum><header>Interpretive
Rulings</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDEEEC02DFBBB64D138A36CBC06E6020D4"><enum>(1)</enum><header>Procedures</header><text display-inline="yes-display-inline">The Commissioner shall establish procedures
by which National Insurers may obtain interpretive rulings from the Office
regarding the interpretation and application of the standards established under
this section.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID74E106EA6C8D40118DFBCB54E841EEF9"><enum>(2)</enum><header>Public
availability</header><text display-inline="yes-display-inline">Except as
provided under paragraph (3), requests by National Insurers for interpretive
rulings from the Office and the complete text of such interpretive rulings
shall not be made available to the public.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID23AEF0D9CE854DC3B86FF11602EBCE18"><enum>(3)</enum><header>Publication of
summaries</header><text display-inline="yes-display-inline">Notwithstanding
paragraph (2), the Commissioner shall publish a summary of each interpretive
opinion, excluding the name of the National Insurer and any other identifying
information, either promptly after the issuance of such opinion or, upon the
request of the National Insurer, after such delay as the Commissioner
determines appropriate.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idC706905B24E049FDB39861FD2D14F629"><enum>(g)</enum><header>Group, blanket,
and franchise insurance</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID1F424F0019114E8DADDB32491FB27F28"><enum>(1)</enum><header>Authorization</header><text display-inline="yes-display-inline">A National Insurer may—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID99CF17C2C6DB4871BD4283656D62462E"><enum>(A)</enum><text display-inline="yes-display-inline">sell, solicit, negotiate, and underwrite
group, blanket, and franchise insurance policies; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB34733006F7243EC9D68599EA99E8CC0"><enum>(B)</enum><text display-inline="yes-display-inline">extend group, blanket, or franchise
insurance policies to insure the dependents of employees or members, or any
class of employees or members.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5EA5EC8839964F4788DB46F680A2D361"><enum>(2)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Commissioner shall, by regulation,
establish standards for kinds and qualifications of permissible groups for
group, blanket, and franchise insurance policies.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id18D5524C10ED423A9BA4B4896CF2F101"><enum>(h)</enum><header>Insurable
interest</header><text display-inline="yes-display-inline">The Commissioner
shall define, by regulation, the term <term>insurable interest.</term></text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID9DE498F6DE974015ACF378196B3BF187"><enum>(i)</enum><header>Criteria Under
Which New Life Insurance May Exceed the Insurance Being Replaced</header><text display-inline="yes-display-inline">Any new life insurance may exceed the
insurance being replaced—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDFC3E37744DB942469EA72B9A8783F9C8"><enum>(1)</enum><text display-inline="yes-display-inline">if a business entity or a trust entity has
an insurable interest and the authority to purchase life insurance;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8B8CA06CC56D4BCD837EA2D90B598413"><enum>(2)</enum><text display-inline="yes-display-inline">to the extent the application of the cash
surrender value of the insurance being replaced as a premium under the new life
insurance policy requires a larger amount of insurance—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID02AFD22EC0DA4E039284D0476342874B"><enum>(A)</enum><text display-inline="yes-display-inline">to qualify as life insurance; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID600AF9CF13574865A65691890D21A5B7"><enum>(B)</enum><text display-inline="yes-display-inline">to not be treated as a modified endowment
contract for Federal income tax purposes;</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID994C219FAADF4FDAA9D2CABF64B33A0F"><enum>(3)</enum><text display-inline="yes-display-inline">to otherwise comply with applicable Federal
law; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2EEE7DB473D64F7F857BA85D35455492"><enum>(4)</enum><text display-inline="yes-display-inline">if, upon cessation of premium payments, a
former employee or trustee elects under the insurance policy to use the cash
value available under the insurance policy to restructure the term, face
amount, or investment options under the insurance policy.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID1C86C1D2D4024B3CB0FA1AFDCB6FC190"><enum>(j)</enum><header>Effect of State
Law</header><text display-inline="yes-display-inline">No State may impose any
standard, relating to any matter addressed in this section, on National
Insurers or persons who purchase insurance from National Insurers.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID91c6e5ea147f4a4c9d34caf520276880" section-type="subsequent-section"><enum>1214.</enum><header>Product regulation
for National Property/Casualty Insurers</header>
<subsection commented="no" display-inline="no-display-inline" id="id6F9C7F64F0DC4A08AFF91E6184B83535"><enum>(a)</enum><header>Application</header><text display-inline="yes-display-inline">This section shall apply to the business of
National Property/Casualty Insurers.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDED0AE2D6AE2C45C38D13588BA01465BB"><enum>(b)</enum><header>Maintenance of
Copies of Policies</header><text display-inline="yes-display-inline">A National
Insurer shall maintain for inspection a copy of every insurance policy form
that it uses to insure risks.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID0EFADD049DEF40F5B0EC69CE55F90550"><enum>(c)</enum><header>Annual Policy
Form Listing</header><text display-inline="yes-display-inline">A National
Insurer shall annually provide the Commissioner with a list of all standard
policy forms it uses to insure risks.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID19CA82CC79484FA8975C10C067EB2963"><enum>(d)</enum><header>Rates, Rating
Elements, Price, and Forms</header><text display-inline="yes-display-inline">The Act does not authorize the Commissioner
to require a National Insurer to use any particular rate, rating element,
price, or form.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID05D829B457BF4AF8A6AE478042064C27" section-type="subsequent-section"><enum>1215.</enum><header>Regulation of sales
and marketing</header>
<subsection commented="no" display-inline="no-display-inline" id="IDD289A9D4F4AE4C208701F59B421F7371"><enum>(a)</enum><header>Purpose</header><text display-inline="yes-display-inline">The purpose of this section is to ensure
appropriate Federal regulation of the sales and marketing practices of National
Insurers, National Agencies, and federally licensed insurance producers to
prevent unfair methods of competition and unfair and deceptive acts and
practices in the advertising, sale, issuance, distribution, and administration
of insurance policies and other products of National Insurers and claims under
insurance policies and other products of National Insurers.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID58BCBD0EA965470989B8D07F551E8884"><enum>(b)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Commissioner shall promulgate such
regulations, applicable to National Insurers, National Agencies, and federally
licensed insurance producers, as the Commissioner determines to be necessary to
carry out the purpose of this section, including rules governing the
advertising, sale, issuance, distribution, and administration of insurance
policies and other products of National Insurers and claims under insurance
policies and other products of National Insurers.</text>
</subsection></section></subtitle><subtitle commented="no" id="idC9353B40C10C43DCBB55E321FBCF2E06" style="OLC"><enum>C</enum><header>Reinsurance</header>
<section commented="no" display-inline="no-display-inline" id="ID0a03dcf0700a4c0faec4fd6c522caa9c" section-type="subsequent-section"><enum>1221.</enum><header>Federal licensing
of reinsurers</header>
<subsection commented="no" display-inline="no-display-inline" id="IDa562abc5d6bb4b139be44de23ebcac4b"><enum>(a)</enum><header>Authority to
license</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID7f6c49403a8b49d5b2c7369db217eac7"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner
may—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDf1f89c5ffe294fe1a5b4a217d23681b3"><enum>(A)</enum><text display-inline="yes-display-inline">license insurers that are not National
Insurers to provide reinsurance; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDb2738c745049471f9233c5a9065960ea"><enum>(B)</enum><text display-inline="yes-display-inline">prescribe, by regulation, the standards and
procedures for granting such licenses.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDf83f9748a2a84505a48a1bf90fbe16ae"><enum>(2)</enum><header>Criteria</header><text display-inline="yes-display-inline">The standards prescribed under paragraph
(1)(B) shall give due consideration to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5d1bb0e4e0e841f5a8a6be4c9a269255"><enum>(A)</enum><text display-inline="yes-display-inline">the public interest in providing secure and
sufficient reinsurance capacity in the United States; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID49d9d340ab1d437ea8cd2c65de653349"><enum>(B)</enum><text display-inline="yes-display-inline">the need for promoting fair and effective
competition.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDdec385f311e44cd0adecfd42399d5868"><enum>(b)</enum><header>Determination
and finding; issuance of license</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID3ed8e434347c4fc2beab3993d10e7d83"><enum>(1)</enum><header>Examination and
investigation</header><text display-inline="yes-display-inline">Upon the
receipt of an application for a license under this section, the Commissioner
shall examine the information submitted by the applicant and may conduct
further examinations and investigations, as necessary, to determine whether the
applicant satisfies the standards for a license under this section.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDbe42536215c04bbeb3d49cc36342eff8"><enum>(2)</enum><header>Publication of
findings</header><text display-inline="yes-display-inline">The Commissioner
shall publish the Commissioner’s findings and determination under paragraph
(1).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDe16be00723824cca888f645b26fcbee6"><enum>(3)</enum><header>Issuance of
Federal license</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idD050D0ECA8944B23AB464F9AADD808C8"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided in
subparagraph (B), if the Commissioner determines that the applicant has
satisfied the applicable requirements of this section, the Commissioner shall
issue a Federal license to provide reinsurance.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idA91A4A604EC74C878BAB689929409A32"><enum>(B)</enum><header>Restriction</header><text display-inline="yes-display-inline">The Commissioner shall not issue a Federal
license for reinsurance until after the Commissioner is authorized to charter
and license a National Insurer pursuant to section 1210.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID94251da962b044aca11fed9fe86ecf58"><enum>(c)</enum><header>Minimum
standards for licensing of non-United States insurers</header><text display-inline="yes-display-inline">The Commissioner shall not issue a license
under this section to any insurer that is not a State insurer or a United
States branch of a non-United States insurer unless the insurer agrees
to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDbb4306dda0aa426f903d7081e0c16b60"><enum>(1)</enum><text display-inline="yes-display-inline">report its financial statements to the
Commissioner on a basis that the Commissioner determines to be substantially
similar to that required of National Insurers under section 1124;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDea2e577e427c4c8fb5f7a6714a9a1f81"><enum>(2)</enum><text display-inline="yes-display-inline">submit to the jurisdiction of Federal,
State, and local courts in the United States; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDc0495d6bf56c47b58f6fda472289e7b2"><enum>(3)</enum><text display-inline="yes-display-inline">demonstrate that all judgments of all
United States courts would be enforceable and collectible by—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9f472734c2ec4699a1704ebba809e128"><enum>(A)</enum><text display-inline="yes-display-inline">being organized or incorporated in a
jurisdiction with which the United States has entered into a treaty on the
recognition and enforcement of judgments rendered by Federal, State, and local
courts in the United States; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDabdf2c8f0a074073ab317c6f24f8acb7"><enum>(B)</enum><text display-inline="yes-display-inline">agreeing to post prejudgment security in
the United States upon the commencement of any litigation or arbitration in the
United States, subject to such regulations as the Commissioner may
prescribe.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDd34c66242818404ab6918e92b9828b99"><enum>(d)</enum><header>Revocation of
license</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDdd626aeab28e494f94d5b5e1370a490f"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may
revoke, suspend, or restrict a Federal reinsurer’s license in accordance with
subtitle C of title I.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID53468edc95a443caac09b5dcc411d257"><enum>(2)</enum><header>Status of
Federally licensed reinsurer</header><text display-inline="yes-display-inline">For purposes of this subsection, a
federally licensed reinsurer shall be deemed to be a National Insurer under
subtitle C of title I.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDfa00f1dc33cd422f82c23da305b2e175"><enum>(e)</enum><header>Annual
reports</header><text display-inline="yes-display-inline">The Commissioner
shall require each reinsurer licensed under this section to submit an annual
report of its financial condition and an annual report on the condition of any
trust fund regulated under this subtitle in such form as may be prescribed by
the Commissioner.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID9bf903187b02404f9ed7b258b0274aa6" section-type="subsequent-section"><enum>1222.</enum><header>Credit for
reinsurance</header>
<subsection commented="no" display-inline="no-display-inline" id="ID8004e37bef1f4094bcdd295b3909fee4"><enum>(a)</enum><header>Credit for
reinsurance ceded to a national insurer or a Federally licensed
reinsurer</header><text display-inline="yes-display-inline">A National Insurer
may establish an asset or reduce its liabilities, to the extent of such
liabilities, for reinsurance ceded to another National Insurer or a federally
licensed reinsurer.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDad3074347b034551bb46ebe40bb16862"><enum>(b)</enum><header>Other asset or
reduction from liability for reinsurance ceded</header><text display-inline="yes-display-inline">A National Insurer may establish an asset
or reduce its liabilities, to the extent of such liabilities, for
reinsurance—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID7fcd52a98dc946a294cef94241d845d6"><enum>(1)</enum><text display-inline="yes-display-inline">that is ceded to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDb8d01ea3fa7346eca3d3d3f96f714992"><enum>(A)</enum><text display-inline="yes-display-inline">a State insurer;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5dbd926f93ed47ffa7ee68040a3dfb5e"><enum>(B)</enum><text display-inline="yes-display-inline">a United States branch entered through a
State; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDee092033518f44f1b369e60a04edd9f7"><enum>(C)</enum><text display-inline="yes-display-inline">a non-United States insurer; and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6d157a0d5e9347afb3435831dae55421"><enum>(2)</enum><text display-inline="yes-display-inline">if such reinsurance is secured consistent
with the regulation issued by the Commissioner pursuant to subsection
(c).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDd8b07b7f08b642cf978abc85182095bc"><enum>(c)</enum><header>Regulation</header><text display-inline="yes-display-inline">The Commissioner shall establish, by
regulation, security standards governing the ceding of insurance by a National
Insurer to any of the entities listed in subsection (b)(1) in order to protect
the policyholders of a National Insurer.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDc016cc8bdb554d18b3abfafe38a2763f" section-type="subsequent-section"><enum>1223.</enum><header>Relationship to
State law</header><text display-inline="no-display-inline">No State may prevent
a State insurer from—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDc965cf6cd2244715b79c891860af8c68"><enum>(1)</enum><text display-inline="yes-display-inline">ceding insurance to a National Insurer or a
federally licensed reinsurer; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID98f6e75d7ea842a0ae57091d08bf26bd"><enum>(2)</enum><text display-inline="yes-display-inline">establishing an asset or reducing its
liabilities as a result of such reinsurance to the same extent as the State
would allow such insurer if the insurance were ceded to another State
insurer.</text>
</paragraph></section></subtitle><subtitle commented="no" id="IDC6E14BA3B47F47EB95D73CBD3E86AC33" style="OLC"><enum>D</enum><header>Acquisitions of Control; Mergers; Bulk
Transfers; Domestication</header>
<section commented="no" display-inline="no-display-inline" id="IDB5C57FFE61934BEDBD390AA2574BB9D3" section-type="subsequent-section"><enum>1231.</enum><header>Acquisition of
control of National Insurers and National Agencies</header>
<subsection commented="no" display-inline="no-display-inline" id="IDACF82A09C07445918BB93C447E591EFC"><enum>(a)</enum><header>Definitions</header><text display-inline="yes-display-inline">For purposes of this section—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDE8267D8B779B42939305CF57BFFE52EA"><enum>(1)</enum><text display-inline="yes-display-inline">the terms <term>National Insurer</term> and
<term>National Agency</term> include any person controlling a National Insurer
or National Agency; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC6FD038608354AE899950ADD033B95D0"><enum>(2)</enum><text display-inline="yes-display-inline">the term <term>person</term> does not
include any securities broker holding, in the usual and customary broker’s
function, less than 20 percent of the voting securities of a National Insurer
or National Agency or of any person which controls a National Insurer or
National Agency.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID3614AEA210364D67A017A9A1C075EF1B"><enum>(b)</enum><header>Commissioner
Approval Required</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID650EEE1704E24117AC54D950A584A4DD"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">No person other than
the issuer shall make a tender offer for, make a request or invitation for
tenders of, or enter into any agreement to exchange securities for, or acquire,
in the open market or otherwise, any voting security of a National Insurer or
National Agency if, after the consummation of such transaction, such person
would, directly or indirectly (or by conversion or by exercise of any right to
acquire) be in control of the National Insurer or National Agency. No person
shall enter into an agreement to merge with or otherwise acquire control of a
National Insurer or National Agency or any person controlling a National
Insurer or National Agency unless, at the time the offer, request, or
invitation is made or the agreement is entered into, or before the acquisition
of the securities if no offer or agreement is involved—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID68DF7FA0295B447EA31EE9493F0AFC04"><enum>(A)</enum><text display-inline="yes-display-inline">such person has filed with the Commissioner
and has sent to the National Insurer or National Agency, a statement that
complies with the regulations prescribed under paragraph (3); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC5BEE83415C345E9A9EB0EE541FBEB7E"><enum>(B)</enum><text display-inline="yes-display-inline">the offer, request, invitation, agreement,
or acquisition has been approved by the Commissioner.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD2956BC26F7D47A4982A9849700313FF"><enum>(2)</enum><header>Savings
provision</header><text display-inline="yes-display-inline">Nothing in this
subsection shall be construed to prohibit a person from making an offer,
request, or invitation or entering into an agreement to acquire control of a
National Insurer or National Agency, if such transaction is conditioned upon
obtaining the approval of the Commissioner in accordance with paragraph
(1).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB6D1C1082EE644FF9B382ED486DFA63F"><enum>(3)</enum><header>Form and
content of statement</header><text display-inline="yes-display-inline">The
Commissioner shall, by regulation, prescribe the form and content of the
statement to be filed under paragraph (1)(A).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB4FC1EE3BD2B4848B9A6C650D8F31347"><enum>(4)</enum><header>Approval by
commissioner</header><text display-inline="yes-display-inline">The Commissioner
shall approve any merger or other acquisition of control referred to in this
subsection unless the Commissioner finds that—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDD522E603F7874EC6AF9C3502DBB7DA55"><enum>(A)</enum><text display-inline="yes-display-inline">after the acquisition of control, the
National Insurer or National Agency would not be able to satisfy the
requirements for the issuance of a Federal license to write the line or lines
of insurance for which the National Insurer or National Agency was previously
licensed;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7235909737FD4286AD9A881CF65FFD17"><enum>(B)</enum><text display-inline="yes-display-inline">the financial condition of any acquiring
person may jeopardize the financial stability of the National Insurer or
National Agency or be hazardous to the policyholders of the National
Insurer;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB956767FCA984357AD9115910BABB0B3"><enum>(C)</enum><text display-inline="yes-display-inline">the plans or proposals of the acquiring
person to liquidate the National Insurer or National Agency, sell its assets,
consolidate or merge it with any person, or make any other material change in
its business or corporate structure or management, are unfair and unreasonable
to policyholders of the National Insurer and not in the public interest;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID83C568106EE14C43BE30351DE2075EF9"><enum>(D)</enum><text display-inline="yes-display-inline">those persons who would control the
operation of the National Insurer or National Agency lack the competence,
experience, or integrity required to protect the interests of policyholders of
the National Insurer or National Agency; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF81F64AAD6934A868452DF6A60E6A767"><enum>(E)</enum><text display-inline="yes-display-inline">the acquisition is likely to be hazardous
to the insurance-buying public.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID19A77969FAB943969A569509B3135949"><enum>(c)</enum><header>Hearing</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID156CB23598044324A3D214C48FB7D9CC"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner may,
in his sole discretion, hold a hearing on a merger or other acquisition of
control that is subject to this section and for which a statement has been
filed under subsection (b)(1)(A).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID06EB0811A0564110B4C02C4591BBA187"><enum>(2)</enum><header>Procedures</header><text display-inline="yes-display-inline">A hearing under this subsection shall be
subject to the procedures under section 1148, except that the Commissioner may
determine the location of such hearing.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID4CDDC573AF734A5EBD7181ED80CCB597"><enum>(d)</enum><header>Exemptions</header><text display-inline="yes-display-inline">The provisions of this section shall not
apply to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID956EECCD204D497188392533B2B5965D"><enum>(1)</enum><text display-inline="yes-display-inline">any offer, request, invitation, agreement,
or acquisition exempted by the Commissioner for not having been made or entered
into for the purpose, and not having the effect, of changing or influencing the
control of a National Insurer or National Agency, or as otherwise not
comprehended within the purposes of this section; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAB9B4BA8BBC5404E9E1980B80F6051DF"><enum>(2)</enum><text display-inline="yes-display-inline">a merger, consolidation, or acquisition
subject to section 1232.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA3CDAF7CBADC40A6B017967C6F84972E"><enum>(e)</enum><header>Voting of
Securities</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID973F61CF053A45149949C762E092C67D"><enum>(1)</enum><header>Prohibition</header><text display-inline="yes-display-inline">No security which is the subject of any
agreement or arrangement regarding acquisition, or which is acquired or to be
acquired, in contravention of the provisions of this section may be voted at
any shareholder’s meeting, or may be counted for quorum purposes.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7FC5A6FFBEB54B6588D8DD3A660A0377"><enum>(2)</enum><header>Effect on
shares</header><text display-inline="yes-display-inline">Any action of
shareholders requiring the affirmative vote of a percentage of shares may be
taken as though the securities described under paragraph (1) were not issued
and outstanding.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID674F3E933FAF4BA4975C56E8AC1068AE"><enum>(3)</enum><header>Invalidation of
action</header><text display-inline="yes-display-inline">No action taken at any
meeting described under paragraph (1) shall be invalidated by the voting of the
securities, unless—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA61B68F4160842089F87D915102322DD"><enum>(A)</enum><text display-inline="yes-display-inline">the action would affect control of the
National Insurer or National Agency; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID132344021D004C5CBB0075AB8798D1CC"><enum>(B)</enum><text display-inline="yes-display-inline">such invalidation is ordered by a
court.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC8EFAAD2806342BA8DAE3091ECD3B3A3"><enum>(4)</enum><header>Acquisition in
contravention of this act</header><text display-inline="yes-display-inline">If
a National Insurer or the Commissioner has reason to believe that any security
of the National Insurer or National Agency has been or is about to be acquired
in contravention of the provisions of this section, the National Insurer or
National Agency or the Commissioner may apply to the United States district
court for the judicial district in which the main office of the National
Insurer or National Agency is located or the United States District Court for
the District of Columbia—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE107A50113174798A1D0C1C6D161E9E8"><enum>(A)</enum><text display-inline="yes-display-inline">to enjoin any offer, request, invitation,
agreement, or acquisition made in contravention of this section;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID766C13E4351E40CD8F48715ECF5251CD"><enum>(B)</enum><text display-inline="yes-display-inline">to enjoin the voting of any security so
acquired;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCD3623D6F33842F198FAC256B83C4870"><enum>(C)</enum><text display-inline="yes-display-inline">to void any vote of the security already
cast at any meeting of shareholders; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4D1B2A271DE74652BD02A19DDA5A4A65"><enum>(D)</enum><text display-inline="yes-display-inline">for such other equitable relief as the
nature of the case and the interest of the National Insurer’s policyholders,
the creditors and shareholders of the National Insurer or National Agency or
the public may require.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID5C3062F62EA8484895D2D2EE2DBD0DA6"><enum>(f)</enum><header>Sequestration
of Voting Securities</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDFF4C6AC2897244A28D986860D3D49598"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">If a person has
acquired or is proposing to acquire any voting securities in violation of this
section, the National Insurer ,National Agency or the Commissioner may request
the United States district court for the judicial district in which the main
office of the National Insurer is located or the United States District Court
for the District of Columbia to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID75285F70B9FB41B29DED0A10F41C23AB"><enum>(A)</enum><text display-inline="yes-display-inline">seize or sequester any voting securities of
the National Insurer or National Agency owned directly or indirectly by the
person; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID63AEAACA846C41EEA5294BC935E019DB"><enum>(B)</enum><text display-inline="yes-display-inline">issue such order as may be appropriate to
carry out the provisions of this section.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID29C5C014B2CC4D2BA9111E68E2094F53"><enum>(2)</enum><header>Situs of
ownership</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of law, for the purposes of this section, the situs of
ownership of the securities of National Insurers and National Agencies shall be
deemed to be the State in which the main office of the National Insurer or
National Agency is located.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID6E1A546368FF4B119C322669A8D454AE"><enum>(g)</enum><header>Conflict With
Other Federal Laws</header><text display-inline="yes-display-inline">This
section shall be interpreted and applied so as not to conflict with or
supersede the provisions of any other Federal law or regulation governing the
regulation of holding companies, including financial holding companies (as
defined in section 2(p) of the <act-name parsable-cite="BHC65">Bank Holding
Company Act of 1956</act-name> (12 U.S.C. 1841(p)).</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID01A138A011C1457D8F96856542DC6C7C"><enum>(h)</enum><header>No Delegation
Permitted</header><text display-inline="yes-display-inline">The Commissioner
may not delegate to any insurance self-regulatory organization any authority
conferred under this section with respect to any merger or other acquisition of
control of a National Insurer.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID4125692143C14CD2BE345CFBC831365A" section-type="subsequent-section"><enum>1232.</enum><header>Mergers,
consolidations, and acquisitions of National Insurers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID12795012FF854033A8A7C19D1B069ECB"><enum>(a)</enum><header>National
Insurer as Resulting Insurer</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID5B09F38893304B8D981742742D390EE5"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided
under subsection (e), a National Insurer may, with the approval of the
Commissioner, merge, consolidate with, acquire all or substantially all the
assets of, or assume all or substantially all the liabilities of, another
National Insurer or a State insurer in a transaction in which a National
Insurer is the resulting insurer, the acquiring insurer, or the assuming
insurer, regardless of whether the insurers involved in the transaction are in
stock form, mutual form, or fraternal form.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB2E739858EC749DE88CF324B955001BE"><enum>(2)</enum><header>Merger,
consolidation, and acquisition procedures</header><text display-inline="yes-display-inline">The Commissioner shall establish, by
regulation, procedures for—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2D16ED91AC784063B1CB9D0BE2DD2F93"><enum>(A)</enum><text display-inline="yes-display-inline">the merger or consolidation of a National
Insurer with another National Insurer or a State insurer in a transaction in
which a National Insurer is the resulting insurer; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF694B8AEDA02469CADC96304A2D7B84E"><enum>(B)</enum><text display-inline="yes-display-inline">the acquisition or assumption by a National
Insurer of all or substantially all the assets or liabilities of another
National Insurer or a State insurer in a transaction in which the National
Insurer is the acquiring insurer or assuming insurer.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID480ABFA2CD344EA4930F480F97E393EE"><enum>(3)</enum><header>Effect of
merger or consolidation</header><text display-inline="yes-display-inline">Upon
the merger or consolidation of a National Insurer with another National Insurer
or a State insurer under this section—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA2FC66719E104ADAA1340772A3FE4418"><enum>(A)</enum><text display-inline="yes-display-inline">the corporate existence of each of the
merging or consolidating insurers shall be merged or consolidated into the
resulting insurer, and the resulting insurer shall be deemed to be the same
corporation as each insurer participating in the merger or
consolidation;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFF0355B7061345E198DC10BC00BE8A18"><enum>(B)</enum><text display-inline="yes-display-inline">except as provided under subparagraph (D),
the resulting insurer shall hold and be subject to all rights, privileges,
liabilities, property interests, and other interests and obligations that each
insurer participating in the merger or consolidation held or was subject to
immediately prior to the merger or consolidation;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID22DE389EC6C14B139C7708D6AD31C069"><enum>(C)</enum><text display-inline="yes-display-inline">the resulting insurer shall obtain, in
accordance with section 1203, a Federal license for all lines of insurance that
it sells, solicits, negotiates, or underwrites, except for those lines of
insurance for which a National Insurer participating in the merger or
consolidation held a Federal license immediately before the merger or
consolidation; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID24559E012D3D491AA14498D3C850B5EB"><enum>(D)</enum><text display-inline="yes-display-inline">the resulting insurer shall not hold any
State license to sell, solicit, negotiate, or underwrite insurance that was
held by a State insurer participating in the merger or consolidation.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7E855E53A6B84F12B8DEF754948C29C0"><enum>(4)</enum><header>Special
authority</header><text display-inline="yes-display-inline">The Commissioner
may, subject to such conditions as the Commissioner may prescribe, permit a
National Insurer resulting from a merger or consolidation under this section to
retain, hold, or exercise such assets, liabilities, powers, and authorities
that do not conform to the legal requirements applicable to National Insurers
as the Commissioner determines appropriate.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA46E8D820E5D4908B2AD5DB35C92AA5B"><enum>(b)</enum><header>State Insurer
as Resulting Insurer</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID191842BF246A4BF4AF539D6385416262"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to applicable
State law and such notification procedures as the Commissioner may prescribe by
regulation, a State insurer may merge with, consolidate with, acquire assets
of, or assume liabilities of, a National Insurer in a transaction in which a
State insurer is the resulting insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE603D2AC0F2F402982C53BAA4D8806CF"><enum>(2)</enum><header>Savings
provision</header><text display-inline="yes-display-inline">Nothing in this
subsection or in a transaction under this subsection shall abrogate any rights,
privileges, liabilities, property interests, or other interests or obligations
that the National Insurer held or was subject to immediately before the
transaction.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDAFBBE192AAD9439FBECE8863D6854A64"><enum>(c)</enum><header>Effect of
Assumption of Liabilities</header><text display-inline="yes-display-inline">If
the liabilities of a National Insurer are assumed by another National Insurer
or a State insurer in accordance with this Act, the National Insurer shall be
released from all such liabilities upon their assumption by the other National
Insurer or a State insurer.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID543D656899274958A2B040FD64882F10"><enum>(d)</enum><header>No Delegation
Permitted</header><text display-inline="yes-display-inline">The Commissioner
may not delegate to any insurance self-regulatory organization any authority
conferred under this section with respect to any merger, consolidation,
acquisition of assets, or assumption of liabilities involving a National
Insurer.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDD88D32B470F64ADD86EC8144640FF639"><enum>(e)</enum><header>Coordination</header><text display-inline="yes-display-inline">This section shall not apply to any bulk
transfer (as defined in section 1233(a)(2)) that is subject to approval of the
Commissioner in accordance with section 1233(b).</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID8ED62EC8E7D84C6DA1288492D8BB893A" section-type="subsequent-section"><enum>1233.</enum><header>Bulk
transfers</header>
<subsection commented="no" display-inline="no-display-inline" id="IDC71C641FFEBC4FBB81CB9406D2A4C6C1"><enum>(a)</enum><header>Definitions</header><text display-inline="yes-display-inline">In this section:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID67AD588BDA7B4E42827E4C61DB315D13"><enum>(1)</enum><header>Block of
business</header><text display-inline="yes-display-inline">The term <term>block
of business</term> means all those insurance policies of an insurer under a
particular policy form.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8D9B8B2635E147B09D8BC12422794E95"><enum>(2)</enum><header>Bulk
transfer</header><text display-inline="yes-display-inline">The term <term>bulk
transfer</term>—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDBE8DBB59484E434B8B36F3AE55FD9DC7"><enum>(A)</enum><text display-inline="yes-display-inline">means the transfer by an insurer to another
insurer of existing insurance policies constituting all or substantially all of
1 or more of its lines of business or blocks of business; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD3406601388D48199BD320ED58C7B786"><enum>(B)</enum><text display-inline="yes-display-inline">does not include—</text>
<clause commented="no" display-inline="no-display-inline" id="ID8736F27743194A6C9CDC005EFFEF5951"><enum>(i)</enum><text display-inline="yes-display-inline">any sale in which the transferring insurer
retains direct or indirect control of the assets supporting the transferred
insurance policies;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID951080F744954C8DA64340442C310958"><enum>(ii)</enum><text display-inline="yes-display-inline">any transaction effected by an agreement
under which the transferring insurer continues to remain directly liable to the
policyholders under the insurance policies;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID3C588E261B7544028E9A01C91475CDEE"><enum>(iii)</enum><text display-inline="yes-display-inline">the substitution of 1 insurer for another
upon the expiration of insurance coverage pursuant to statutory or contractual
requirements and the issuance of a new policy of insurance by that
insurer;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID26AF7A4A73B840FB9C769B2F95DA3D9C"><enum>(iv)</enum><text display-inline="yes-display-inline">the transfer of policies of insurance
pursuant to merger or consolidation of 2 or more insurers to the extent that
those transactions are regulated by statute;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID50A43A5EB9734AD4AD97F154E090A041"><enum>(v)</enum><text display-inline="yes-display-inline">any transaction effected by an insurer
subject to a judicial order of receivership, liquidation, or rehabilitation;
or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID91FCF93D40C849A081DF06528F07AAB2"><enum>(vi)</enum><text display-inline="yes-display-inline">any transfer of liabilities from 1 insurer
to another under a single group insurance policy upon the request of the group
policyholder.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFFD36BB30C5F4F66A2E19306DD88B2D0"><enum>(3)</enum><header>Permitted
national insurer</header><text display-inline="yes-display-inline">The term
<term>permitted National Insurer</term> means—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID76467EDED0084DB7ADBDA5F5BD92E07F"><enum>(A)</enum><text display-inline="yes-display-inline">a State insurer that is converting to a
National Insurer under section 1205; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID39E3055C8016479C9AE232008928A8F4"><enum>(B)</enum><text display-inline="yes-display-inline">a National Insurer that is being newly
chartered under section 1201 and licensed under section 1203.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1FE9F2A31CF2422EB6157AAC37391133"><enum>(4)</enum><header>Transferred
insurance policies</header><text display-inline="yes-display-inline">The term
<term>transferred insurance policies</term> means the insurance policies that
are subject to the bulk transfer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID74AE0FAC8247466AAE4BDEA0DED6B529"><enum>(5)</enum><header>Transferring
insurer</header><text display-inline="yes-display-inline">The term
<term>transferring insurer</term> means the insurer in privity of contract with
the policyholders under the existing insurance policies that are subject to the
bulk transfer.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID18CF36A9EAC64897A8CFE3579DA721B4"><enum>(b)</enum><header>Bulk Transfers
Authorized</header><text display-inline="yes-display-inline">The following bulk
transfers are authorized:</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDB3EBD6CC4B274EECABC8226F1495C4BE"><enum>(1)</enum><text display-inline="yes-display-inline">A State insurer as the transferring insurer
and a permitted National Insurer as the assuming insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAC66586D052B4E1F8D74F16F996B8F88"><enum>(2)</enum><text display-inline="yes-display-inline">A permitted National Insurer as the
transferring insurer and a State insurer as the assuming insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID443FEBCA819C4F64BFC2B3C4DCF02A40"><enum>(3)</enum><text display-inline="yes-display-inline">A National Insurer as the transferring
insurer and a National Insurer as the assuming insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8F4CCC2527064C4DB6CEE61B32901944"><enum>(4)</enum><text display-inline="yes-display-inline">A State insurer as the transferring insurer
and a National Insurer that is not a permitted National Insurer as the assuming
insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6F57E3BA3B5C49BEAE5CEACF7F028C91"><enum>(5)</enum><text display-inline="yes-display-inline">A National Insurer that is not a permitted
National Insurer as the transferring insurer and a State insurer as the
assuming insurer.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA8FB5640C94247419E74389F567D40CF"><enum>(c)</enum><header>Commissioner
Approval</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDD7E40D7BAE024D0F9E6498E433DC76DD"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">A National Insurer
shall not effect a bulk transfer as either the transferring insurer or the
assuming insurer as authorized under paragraph (1), (2), (3), or (5) of
subsection (b) without the prior approval of the Commissioner in accordance
with such regulations as the Commissioner may prescribe.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1644C5593CB846C4836F004FE36BDE8D"><enum>(2)</enum><header>Standard of
approval</header><text display-inline="yes-display-inline">The Commissioner
shall approve a bulk transfer under paragraph (1), after notice and a hearing,
unless the Commissioner determines that the bulk transfer is likely to be
hazardous to policyholders of transferred insurance policies, policyholders of
the transferring insurer, or policyholders of the assuming insurer.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID1524BC70EDD042688E99A3B7DCE278B3"><enum>(d)</enum><header>Policyholder
Consent</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDC6564D1ED0EA4D379ACE6EE8CCAD511D"><enum>(1)</enum><header>No consent
required</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of law, a National Insurer may, upon the approval of the
Commissioner, effect a bulk transfer under paragraph (1) or (2) of subsection
(b) as either the transferring insurer or the assuming insurer without
obtaining policyholder consent.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD5D72946EBD94E0A99236F90F567A8D3"><enum>(2)</enum><header>Between
national insurers</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law,
a National Insurer may, upon the approval of the Commissioner, effect a bulk
transfer under subsection (b)(3) as either the transferring insurer or the
assuming insurer in accordance with the requirements prescribed by the
Commissioner. Such requirements shall specify whether policyholder consent to
such a bulk transfer is required and, if policyholder consent is required, the
form in which such consent is required to be given.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID82A898DE231B4FCE912B267A07584FC8"><enum>(3)</enum><header>Additional
provisions</header><text display-inline="yes-display-inline">In addition to any
policyholder consent required by any other applicable provision of law, the
Commissioner may by regulation prescribe whether policyholder consent is
required for a bulk transfer authorized under subsection (b)(5) and, if
policyholder consent is required, the form in which such consent is required to
be given.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID94271DBDCFB74C1C91FC113EE16A2895"><enum>(e)</enum><header>Release From
Liability</header><text display-inline="yes-display-inline">Upon the completion
of a bulk transfer under this section, the transferring insurer shall be
released from its obligations under the transferred insurance policies.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID633761924B9348D685C316E2DB158E6E"><enum>(f)</enum><header>State
Law</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID472A3EDE5B554E688C395F13C5D3EDCF"><enum>(1)</enum><header>Prohibition</header><text display-inline="yes-display-inline">Except as provided in paragraph (2), a
State may not—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID69822A4BDAC742269EEBE4ADBF59AB3E"><enum>(A)</enum><text display-inline="yes-display-inline">require a National Insurer, a permitted
National Insurer, or a State insurer to—</text>
<clause commented="no" display-inline="no-display-inline" id="ID8A476CEED78C487EBED17CDD894D8093"><enum>(i)</enum><text display-inline="yes-display-inline">obtain policyholder consent to a bulk
transfer; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC5143F93E5FD4F098B582BA0364AB341"><enum>(ii)</enum><text display-inline="yes-display-inline">submit the bulk transfer to State review or
action (including approval and disapproval); or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID525052AA99C640988177C81C585EA0A5"><enum>(B)</enum><text display-inline="yes-display-inline">prevent or significantly interfere with a
bulk transfer effected pursuant to this section.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1BBE92E7151F45A5B510A638DEC47343"><enum>(2)</enum><header>Construction</header><text display-inline="yes-display-inline">Paragraph (1) shall not be construed to
prohibit any State from—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID23CA08EBB38348E6A011C5723F3E24A5"><enum>(A)</enum><text display-inline="yes-display-inline">collecting, reviewing, and taking action
(including approval or disapproval) on applications and other documents or
reports concerning a proposed bulk transfer permitted under—</text>
<clause commented="no" display-inline="no-display-inline" id="ID1BED50A2FFDA4D9497BC39D04547E419"><enum>(i)</enum><text display-inline="yes-display-inline">paragraph (2), (4), or (5) of subsection
(b) to which a State insurer (other than a permitted National Insurer)
domiciled in that State is a party; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC2FBE70E80BD43A09EF50A3E34171B9B"><enum>(ii)</enum><text display-inline="yes-display-inline">paragraph (4) or (5) of subsection (b) to
which a State insurer (other than a permitted National Insurer), other than a
State insurer domiciled in that State, is a party, if the review or action
meets the standards set forth in paragraph (3); or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF6A44E02DA6A47B3B34DB8BE13A87501"><enum>(B)</enum><text display-inline="yes-display-inline">requiring policyholder consent of a
proposed bulk transfer permitted under paragraph (4) or (5) of subsection
(b).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID91C3831AAFCE4397AF13F5AFF843287D"><enum>(3)</enum><header>Standards</header><text display-inline="yes-display-inline">A review or action meets the standards
under this paragraph if it—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDDEFC68A1CACE4EA0A0BBB1BE7D3A1238"><enum>(A)</enum><text display-inline="yes-display-inline">is based on standards that are not more
onerous than those imposed by the Commissioner;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3A4548AE5F4741CA8B95683255BBD711"><enum>(B)</enum><text display-inline="yes-display-inline">occurs within a reasonable timeframe that
advances the purposes of this section;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2811BA8D20F34E088506E99AFCBFE6FF"><enum>(C)</enum><text display-inline="yes-display-inline">is made in close consultation and
cooperation with the Commissioner;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFF2C7A9AB1ED42339E5CD75C666BA87B"><enum>(D)</enum><text display-inline="yes-display-inline">is without bias or discrimination toward
either the transferring insurer or the assuming insurer;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC3CC00CD929546BE888C49E3083414AF"><enum>(E)</enum><text display-inline="yes-display-inline">serves a legitimate State interest;
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDABD8CBAFC6FD426BB702E69865B2169F"><enum>(F)</enum><text display-inline="yes-display-inline">does not frustrate the proposed bulk
transfer.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID37D48C0C463947329D39F1C7D38E907C"><enum>(4)</enum><header>Notice of
failure</header><text display-inline="yes-display-inline">If the Commissioner
finds that any State review or action under paragraph (2)(A) fails to meet any
of the standards set forth in paragraph (3), the Commissioner may provide the
applicable State with notice of such failure and the reasons for such
failure.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID4568563AD0E64DE0A9467BE154105024"><enum>(g)</enum><header>Differential
Treatment Prohibited</header><text display-inline="yes-display-inline">A State
may not treat a National Insurer, a permitted National Insurer, or a State
insurer entering into a bulk transfer agreement with a National Insurer, a
permitted National Insurer, a State insurer, or any affiliate or subsidiary of
such insurer, differently than any other insurer operating in that
State.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID1672623CD1C84AF2A7A19402B97EA2B2"><enum>(h)</enum><header>No Delegation
Permitted</header><text display-inline="yes-display-inline">The Commissioner
may not delegate to any insurance self-regulatory organization any authority
conferred under this section with respect to any bulk transfer involving a
National Insurer.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDE0622EFB5E264722AF3291C14AB24EE7" section-type="subsequent-section"><enum>1234.</enum><header>Domestication of
United States branch of a non-United States Insurer</header>
<subsection commented="no" display-inline="no-display-inline" id="IDF13B2D49C28D4902997F8889A4F7AA1A"><enum>(a)</enum><header>Domestication
Permitted</header><text display-inline="yes-display-inline">Any non-United
States insurer having its United States branch entered through a State or
established pursuant to section 1202 and owning beneficially, directly or
indirectly, all outstanding shares of a National Insurer may, upon the written
approval by the Commissioner, domesticate its United States branch by agreeing
in writing with such National Insurer to the acquisition of the business and
assets, and the assumption of all liabilities, of the United States branch, by
the National Insurer for no consideration except such assumption.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID9B94800B613E466BB56EE27628AB5008"><enum>(b)</enum><header>Approval by
Commissioner</header><text display-inline="yes-display-inline">If the
Commissioner determines that the domestication of a United States branch of a
non-United States insurer complies with the provisions of this section and that
the interests of policyholders and creditors of the United States branch are
not materially affected in an adverse manner by such domestication, the
Commissioner may approve the domestication in accordance with this
section.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID2384A4A6FC00458097E4CF9BC1E99CBE"><enum>(c)</enum><header>Effective Date
of Domestication</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDCFA8379F8B3149CBB161360D9DC0653A"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The domestication of
the United States branch shall be effective on the date on which a certified
copy of the instrument of transfer and assumption is filed with the
Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID58D15062120B47D690E427221F131595"><enum>(2)</enum><header>Effect of
domestication</header><text display-inline="yes-display-inline">On the date
described in paragraph (1)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9AB888CD4F3E4A65B51FBC2AE25EA669"><enum>(A)</enum><text display-inline="yes-display-inline">all rights, franchises, and interests of
such United States branch in and to every species of property, real, personal,
and mixed, and things in action belonging to such branch, shall be deemed
transferred to and vested in the acquiring National Insurer;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID76CBBC30D24A43C991F7662E1BF6A486"><enum>(B)</enum><text display-inline="yes-display-inline">the acquiring National Insurer shall be
deemed to have assumed all liabilities of the United States branch;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3440F4D396FE4339B51C4B6E8326AE88"><enum>(C)</enum><text display-inline="yes-display-inline">all deposits of the United States branch
held by State officers or other State regulatory agencies under State law shall
be released; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID551785DED4274BE6A9E05246A55904A0"><enum>(D)</enum><text display-inline="yes-display-inline">the non-United States insurer and the
United States branch shall be released from all liabilities so assumed.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDCDD310E8BBAB489A84EDC90E931AF257"><enum>(d)</enum><header>Release of
Deposits</header><text display-inline="yes-display-inline">At the time of the
domestication of a United States branch under this section, the Commissioner
shall—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDF1ECF8E30415412094D3B8869F378BFA"><enum>(1)</enum><text display-inline="yes-display-inline">transfer to the account of the acquiring
National Insurer the securities deposited by such United States branch in
compliance with the provisions of this Act; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID037836E3EE624267A21681517F743412"><enum>(2)</enum><text display-inline="yes-display-inline">consent that the trustee of the trusteed
assets deposited by such United States branch in compliance with the provisions
of this Act shall withdraw from the trust and transfer and deliver to the
acquiring National Insurer all assets held by such trustee.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID6ABB89B120084AB6960D65A292ED5942"><enum>(e)</enum><header>Withdrawal and
Transfer of Trusteed Assets</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID93C429EBBA3241049A99C92F2AE3E051"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">At the time of the
domestication of a United States branch established under State law, the
trustee of any trusteed assets deposited by such United States branch in
compliance with applicable State law shall, with the consent of the
Commissioner—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID735953D5DC434765A40B9D17888E4812"><enum>(A)</enum><text display-inline="yes-display-inline">withdraw the trusteed assets from the
trust; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB6202EA69EFF411B9136290E08A2FDB7"><enum>(B)</enum><text display-inline="yes-display-inline">transfer and deliver to the acquiring
National Insurer all assets held by such trustee.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7BB5BB16B55E4884924162622448D05C"><enum>(2)</enum><header>Limitation</header><text display-inline="yes-display-inline">No State may prevent, significantly
interfere with, review, approve, or disapprove the withdrawal of trusteed
assets or other deposits of a United States branch established under State law
that is domesticating pursuant to this section, if such withdrawal is made
contemporaneously with or subsequent to the consummation of a domestication of
the United States branch under this section.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID27DC5C4576D24FEAB9B7ED11689A87A8"><enum>(f)</enum><header>No Delegation
Permitted</header><text display-inline="yes-display-inline">The Commissioner
may not delegate to any insurance self-regulatory organization any authority
under this section with respect to the domestication of a United States branch
of a non-United States insurer.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID967343EB886E4E41BCCDE4A77B3DDFAB" section-type="subsequent-section"><enum>1235.</enum><header>Mergers,
consolidations, and acquisitions of National Agencies</header>
<subsection commented="no" display-inline="no-display-inline" id="IDB385DA40983F4E18ACDA9694BC9B12AB"><enum>(a)</enum><header>National Agency
Resulting</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID7453F991746C4F4FABF307EF02FE1334"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of law, a National Agency may, with the approval of the
Commissioner, merge, consolidate with, acquire all or substantially all the
assets of, or assume all or substantially all the liabilities of, another
National Agency or a State insurance agency in a transaction in which a
National Agency is the resulting agency, the acquiring agency, or the assuming
agency.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCA7AB09F29BE4F159319CE99823C8652"><enum>(2)</enum><header>Merger,
consolidation, and acquisition procedures</header><text display-inline="yes-display-inline">The Commissioner is authorized, under such
regulations as the Commissioner may prescribe, to provide for—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID47ABF64DDB94438B9A2DE2702ADB37E7"><enum>(A)</enum><text display-inline="yes-display-inline">the merger or consolidation of a National
Agency with another National Agency or a State insurance agency in a
transaction in which a National Agency is the resulting agency; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFFE126B4E8B94E7982CBA012BB22ED4F"><enum>(B)</enum><text display-inline="yes-display-inline">the acquisition or assumption by a National
Agency of all or substantially all the assets or all or substantially all the
liabilities of another National Agency or a State insurance agency in a
transaction in which the National Agency is the acquiring or assuming
agency.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE9FCAE407A144C65901C2D13DAC0705F"><enum>(3)</enum><header>Effect of
merger or consolidation</header><text display-inline="yes-display-inline">Upon
the merger or consolidation of a National Agency with another National Agency
or a State insurance agency under this section—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID05533532E83F4ED5A57CB1093683F764"><enum>(A)</enum><text display-inline="yes-display-inline">the corporate existence of each of the
merging or consolidating agencies shall be merged or consolidated into the
resulting agency, and the resulting agency shall be deemed to be the same
corporation as each agency participating in the merger or consolidation;
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0F05B0EA5BBB46208F8803E62715B051"><enum>(B)</enum><text display-inline="yes-display-inline">except as provided under paragraph (4), the
resulting agency shall have all the rights, privileges, liabilities, property
interests, and other interests and obligations that each agency participating
in the merger or consolidation had immediately before the merger or
consolidation.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID35125F8B1AD14A98B5ED0C9F1AD3422E"><enum>(4)</enum><header>Limitation</header><text display-inline="yes-display-inline">Upon a merger or consolidation under this
subsection, the resulting agency—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID448949ECEBEA43388BC6EA5325A659AE"><enum>(A)</enum><text display-inline="yes-display-inline">shall not hold any State license to sell,
solicit, or negotiate insurance that was held by a State agency participating
in the merger or consolidation; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID809FA5A152B14E0CB62656C3CDDFEE8D"><enum>(B)</enum><text display-inline="yes-display-inline">shall obtain, in accordance with section
1301, appropriate licenses for all lines of insurance that it sells, solicits,
or negotiates except for those lines of insurance for which a National Agency
participating in the merger or consolidation held a Federal producer’s license
immediately before the merger or consolidation.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID495767CD71A549DBBC170D097D5DBCB6"><enum>(5)</enum><header>Special
authority</header><text display-inline="yes-display-inline">The Commissioner
may, subject to such regulations as the Commissioner may prescribe, permit a
National Agency resulting from a merger or consolidation under this subsection
to retain, hold, or exercise such assets, liabilities, powers, and authorities
that do not conform to the legal requirements applicable to National Agencies
as the Commissioner determines to be appropriate.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID8BAA93D92ADF4E1C9CBA3BC89BAD90BB"><enum>(b)</enum><header>State Insurance
Agency Resulting</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID18BA35CF1B1A480DBAEABF696DF7AF21"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to such
notification procedures as the Commissioner may prescribe by regulation, a
State insurance agency may merge, consolidate with, acquire assets of, or
assume liabilities of, a National Agency in a transaction in which a State
insurance agency is the resulting agency, in accordance with applicable State
law.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB3912C329B1D4210A7B5EEB214F09252"><enum>(2)</enum><header>Savings
provision</header><text display-inline="yes-display-inline">Nothing in this
subsection or in a transaction pursuant to this subsection shall abrogate any
rights, privileges, liabilities, property interests, other interests, or
obligations that the National Agency had immediately before the
transaction.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB2E451C02CE449398A62EA62CC8B97DE"><enum>(c)</enum><header>Effect of
Assumption of Liabilities</header><text display-inline="yes-display-inline">If
the liabilities of a National Agency are assumed by another National Agency or
a State insurance agency in accordance with the provisions of this Act, such
National Agency from whom the liabilities are assumed shall be released from
all liabilities so assumed upon their assumption by the other National Agency
or a State insurance agency.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDF9A5B6B53B4F42B3AC882F4491BCAFDE"><enum>(d)</enum><header>No Delegation
Permitted</header><text display-inline="yes-display-inline">The Commissioner
may not delegate to any insurance self-regulatory organization any authority
conferred under this section with respect to any merger, consolidation, or
acquisition of assets or assumption of liabilities involving a National
Agency.</text>
</subsection></section></subtitle><subtitle commented="no" id="ID4F3D105F4F7948339EBA6457E100FC51" style="OLC"><enum>E</enum><header>Conversions</header>
<section commented="no" display-inline="no-display-inline" id="IDF084870DD05E402D92FE50846DDB9B56" section-type="subsequent-section"><enum>1241.</enum><header>Definitions</header><text display-inline="no-display-inline">In this subtitle:</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDC5AF3A18600A40F38710CC2270D20EC4"><enum>(1)</enum><header>Adoption
Date</header><text display-inline="yes-display-inline">The term <term>adoption
date</term> means the date on which the board of directors of the converting
mutual insurer or converting stock insurer adopts the plan of
conversion.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC5B4054E6CAD421B9DA2818F16170ED0"><enum>(2)</enum><header>Converted
mutual insurer</header><text display-inline="yes-display-inline">The term
<term>converted mutual insurer</term> means the National Life Insurer in mutual
form into which a stock life insurer has been converted in accordance with the
provisions of section 1242.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7553CA9C52FC4910BE320FE525836F2B"><enum>(3)</enum><header>Converted stock
insurer</header><text display-inline="yes-display-inline">The term
<term>converted stock insurer</term> means the National Insurer in stock form
into which a mutual insurer has been converted in accordance with the
provisions of section 1243.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC2633D8D01CC4160B70979FEAED36A4A"><enum>(4)</enum><header>Converting
mutual insurer</header><text display-inline="yes-display-inline">The term
<term>converting mutual insurer</term> means the mutual insurer that is
converting under a plan of conversion under section 1243.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID14D449D738DE411FA4F6879224A2B5BC"><enum>(5)</enum><header>Converting
stock insurer</header><text display-inline="yes-display-inline">The term
<term>converting stock insurer</term> means the stock life insurer that is
converting under a plan of conversion under section 1242.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEAF03D78B3A4438EA5B27EFD87DDA056"><enum>(6)</enum><header>Membership
interests</header><text display-inline="yes-display-inline">The term
<term>membership interests</term>—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5C57487B702E4251BB5B8BB613E2366E"><enum>(A)</enum><text display-inline="yes-display-inline">means the interests of members and
policyholders of the mutual insurer arising under the charter and bylaws of the
mutual insurer or otherwise by applicable law;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5A18863964C84B189BB1D21CDD5B6142"><enum>(B)</enum><text display-inline="yes-display-inline">includes the right to vote for directors of
the mutual insurer and the right to vote on any plan of merger or consolidation
of the mutual insurer; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID867EB714E5CB425EB002195138A25C94"><enum>(C)</enum><text display-inline="yes-display-inline">does not include rights in surplus, if
any.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE5D76F787E1E463D8A1069F24429C419"><enum>(7)</enum><header>Mutual
insurer</header><text display-inline="yes-display-inline">The term <term>mutual
insurer</term> means the State insurer in mutual form or National Insurer in
mutual form that is converting to a National Insurer in stock form pursuant to
a plan of conversion adopted in accordance with section 1243.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID53316FBB89424AE6A34B615DF35B01ED"><enum>(8)</enum><header>Plan of
conversion or plan</header><text display-inline="yes-display-inline">The terms
<term>plan of conversion</term> and <term>plan</term> mean a plan of conversion
adopted by a stock life insurer or a mutual insurer in accordance with this
subtitle.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAEF9989226314031A2D2B781C624BF1B"><enum>(9)</enum><header>Rights in
surplus</header><text display-inline="yes-display-inline">The term <term>rights
in surplus</term>—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID35196C385F524B489A1DB407E704D902"><enum>(A)</enum><text display-inline="yes-display-inline">means rights, if any, of members or
policyholders of the mutual insurer to a return of that portion of the surplus
that has not been apportioned or declared by the board of directors for
policyholder dividends;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID31B8D10B8F7F4809912871F547E00012"><enum>(B)</enum><text display-inline="yes-display-inline">includes rights of members or policyholders
of the mutual insurer to a distribution of surplus in liquidation or
conservation of the insurer under applicable law, or in a dissolution or
winding up; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID950A9841684940F9A2A422EE986AE789"><enum>(C)</enum><text display-inline="yes-display-inline">does not include any right expressly
conferred solely by the terms of an insurance policy.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCC02037853AE48758143DE474291400C"><enum>(10)</enum><header>Stock life
insurer</header><text display-inline="yes-display-inline">The term <term>stock
life insurer</term> means the State life insurer in stock form or National Life
Insurer in stock form that is converting to a National Life Insurer in mutual
form pursuant to a plan of conversion adopted in accordance with section
1242.</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="IDE51AB5C9526C4436BF9DB88C4465CF8F" section-type="subsequent-section"><enum>1242.</enum><header>Conversion of stock
life insurer to National Life Insurer in mutual form</header>
<subsection commented="no" display-inline="no-display-inline" id="IDF619E33375AF4238994B53CE84C0A816"><enum>(a)</enum><header>Authority To
Convert</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of law, a stock life insurer may convert to a National Insurer
in mutual form by complying with the requirements of this section and such
regulations as the Commissioner may promulgate pursuant to this Act.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID0D4987EF2C974088B45CE4E498EE64EB"><enum>(b)</enum><header>Plan of
Conversion</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDAEAA94493572479AAA409BC59EA9EA8A"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The plan of
conversion—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID6BED62571C484D9484F99F9468EE3AA4"><enum>(A)</enum><text display-inline="yes-display-inline">shall be adopted by the board of directors
of the converting stock insurer; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID21CA752B699F424B8AC11E300D29390E"><enum>(B)</enum><text display-inline="yes-display-inline">shall provide for the conversion of the
converting stock insurer into a National Life Insurer in mutual form.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID596E30022E2347C4A74B459B3F6D618B"><enum>(2)</enum><header>Issuance of
stock after adoption date</header><text display-inline="yes-display-inline">No
additional shares of capital stock shall be issued after the adoption date,
except that—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID0BD2432D133D4F22B7A8D0600300902E"><enum>(A)</enum><text display-inline="yes-display-inline">stock options to purchase capital stock may
continue to be issued under existing contracts; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFC535B7058F54A51A550F6128184A3E7"><enum>(B)</enum><text display-inline="yes-display-inline">outstanding options may continue to be
exercised until the effective date of the plan of conversion.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCBCAB0E86BE543C9B964DFFF3457323C"><enum>(3)</enum><header>Contents</header><text display-inline="yes-display-inline">The plan of conversion shall provide
for—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDCAD3FEF0644848AC9A9A7A02C84914B0"><enum>(A)</enum><text display-inline="yes-display-inline">the purchase by the converting stock
insurer of all of its outstanding capital stock, at a price either specified in
the plan or to be determined under a formula specified in the plan, for cash or
other consideration as set forth in the plan; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID96D1F4E4C163439BAAEA838DED55EDED"><enum>(B)</enum><text display-inline="yes-display-inline">the termination, upon terms specified in
the plan, of any contractual obligation inconsistent with the nature of a
mutual insurer, including any obligation to issue stock options or issue
capital stock upon exercise of options.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID4456FC1B0D78474BA141C7E980A6E0BE"><enum>(c)</enum><header>Approval of
Plan by Commissioner</header><text display-inline="yes-display-inline">The
Commissioner shall approve the plan of conversion if the Commissioner finds,
after a hearing, that—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID3BBC58F778CA4CF5B58300649C1A4CA4"><enum>(1)</enum><text display-inline="yes-display-inline">the plan is fair and equitable to the
policyholders, shareholders, and holders of options to acquire capital stock of
the converting stock insurer;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD709506B6C904DCF922C2446E1850E20"><enum>(2)</enum><text display-inline="yes-display-inline">the plan does not violate the law;
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID069C3DE1DDEC48F6AE8AD70FBBB155F2"><enum>(3)</enum><text display-inline="yes-display-inline">the converted mutual insurer will, after
the conversion, satisfy the requirements for the issuance of a license to write
the lines of insurance for which it is licensed.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID2B67EEFECB024635A04F35461556A2AD"><enum>(d)</enum><header>Vote on
Approval of Plan</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDF7A10EC4BDED4989830B922884786703"><enum>(1)</enum><header>Stockholders</header><text display-inline="yes-display-inline">The plan of conversion shall be submitted
to the holders of record on the adoption date of the converting stock insurer’s
shares entitled to vote thereon and shall be subject to approval of the holders
of a majority of such shares.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDADF36E172B2445A7AC16A280C4872AD9"><enum>(2)</enum><header>Policyholders</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDCE3FAD6F9F9048209AA7CBD60F6B9F36"><enum>(A)</enum><header>Submission</header><text display-inline="yes-display-inline">The plan shall be submitted to
policyholders of the converting stock insurer—</text>
<clause commented="no" display-inline="no-display-inline" id="IDE56F07A85442480CAA86BB8D4E1B4B8B"><enum>(i)</enum><text display-inline="yes-display-inline">who are insured for at least $1,000;
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID0AD077DC723A49FD8793DC7850DF0599"><enum>(ii)</enum><text display-inline="yes-display-inline">whose policy of insurance is in
force—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDE30093B1A67944E6971506DDC504E792"><enum>(I)</enum><text display-inline="yes-display-inline">for a period of at least 1 year before the
adoption date;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDC12F998923A541C982B0FEFE95CB3EAE"><enum>(II)</enum><text display-inline="yes-display-inline">on the adoption date; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID87B3D62359194BB59704B10F49661420"><enum>(III)</enum><text display-inline="yes-display-inline">on the date of the meeting of policyholders
called for the purpose of approving the plan.</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID61FF087DAEA64802AC53D03DBC67D38E"><enum>(B)</enum><header>Approval</header><text display-inline="yes-display-inline">The plan shall be subject to the approval
of a majority of the votes cast by the policyholders described in subparagraph
(A).</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID1A9C39E9C5A342F2931C78CA365A169D"><enum>(e)</enum><header>Effect of
Conversion on Converted Mutual Insurers</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID1599337FC1FF472E84726893D3A6C146"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">On the effective date
of the plan of conversion, the stock insurer shall become a National Life
Insurer in mutual form and shareholders eligible to receive consideration under
the plan of conversion are entitled to receive the consideration specified in
the plan in exchange for their shares of capital stock of the converting stock
insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD698950B354344B19130244D7DA66160"><enum>(2)</enum><header>No effect on
existing rights and liabilities</header><text display-inline="yes-display-inline">The converted mutual insurer is a
continuation of the original stock life insurer, and the conversion shall not
annul, modify, or change any of the original stock life insurer’s existing
suits, rights, contracts, or liabilities, except as provided in the plan of
conversion.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5516729B3C7E46F1B25F9929D2043D45"><enum>(3)</enum><header>Rights after
conversion</header><text display-inline="yes-display-inline">After conversion,
the converted mutual insurer shall—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE48498A259A84555A2D55A9D8E60F753"><enum>(A)</enum><text display-inline="yes-display-inline">exercise all the rights and powers and
perform all the duties conferred or imposed by law upon insurers writing the
classes of insurance written by the converted mutual insurer; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3649578B8BF048A5AB6A8DB98C19BDF4"><enum>(B)</enum><text display-inline="yes-display-inline">retain the rights and contracts existing
prior to conversion, subject to the effect of the plan.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID8E4529FA26334DF89E52A17C0A25FEFF"><enum>(f)</enum><header>Time Limits for
Plan Actions</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID57F530250A2744F0ABF611544239ACA8"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of law, actions concerning any plan of conversion or proposed
plan of conversion under this section or any acts taken or proposed to be taken
under this section shall be commenced not later than 30 days after the date on
which the plan of conversion is approved by the Commissioner under subsection
(c).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6D49753F6BDD4F1EA17D5A8664EBEBB8"><enum>(2)</enum><header>Plan
withdrawn</header><text display-inline="yes-display-inline">If the plan of
conversion is withdrawn, the actions described in paragraph (1) shall be
commenced not later than 30 days after the date on which the board of directors
approves a resolution to withdraw the plan.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID3092E46A7D8A47ACB9643CCAA3218801"><enum>(g)</enum><header>Effect on State
Law</header><text display-inline="yes-display-inline">No State may prevent or
interfere with a conversion under this section or impede the activities of,
take any action against, or apply any provision of law or regulation to, any
such stock life insurer because the stock life insurer plans to convert, or has
converted, to a National Life Insurer in mutual form under this section.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID32F2071DF7BA409AAED5769076E8604F"><enum>(h)</enum><header>No Delegation
Permitted</header><text display-inline="yes-display-inline">The Commissioner
may not delegate to any insurance self-regulatory organization any authority
under this section with respect to the conversion of a stock life
insurer.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID050057CC29C040B7964BBCA0636AA261" section-type="subsequent-section"><enum>1243.</enum><header>Conversion of
mutual insurer to National Insurer in stock form</header>
<subsection commented="no" display-inline="no-display-inline" id="ID0AD3C3D6C8184681BDEEAFB3A0F41BCF"><enum>(a)</enum><header>Authority To
Convert</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of law, a mutual insurer may convert to a National Insurer in
stock form by complying with the requirements of this section and such
regulations as the Commissioner may promulgate pursuant to this Act.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID62B64EC325B74EF4A1BB9EE84E011034"><enum>(b)</enum><header>Plan of
Conversion</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID9B67CF294E6C454F9EC9563112573CB4"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The plan of
conversion—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9DF9DBD2145146B9A6F42E6FD1EF4731"><enum>(A)</enum><text display-inline="yes-display-inline">shall be adopted by the board of directors
of the converting mutual insurer;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE8D60A431E1F4ECDA6232DF6E89E4F1B"><enum>(B)</enum><text display-inline="yes-display-inline">shall provide for the conversion of the
converting mutual insurer into a National Insurer in stock form; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0B13DE8E94764F4994023FD3A1C83EC4"><enum>(C)</enum><text display-inline="yes-display-inline">may provide for effecting the conversion by
merger of the mutual insurer with another company.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID573AA19F91044DBCA8CF19BA9F5DF390"><enum>(2)</enum><header>Contents</header><text display-inline="yes-display-inline">The plan of conversion shall provide
that—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDBA3AABAF9FE24FF488A5B965D842A98E"><enum>(A)</enum><text display-inline="yes-display-inline">all membership interests and rights in
surplus are extinguished;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA0C0CB43D86E4F37AF304909DCB64C5B"><enum>(B)</enum><text display-inline="yes-display-inline">each eligible person will receive, without
payment by the person, consideration that is allocated among the eligible
persons using a fair and equitable formula; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAC3800E8F55C40B0A4C984422A13EDB6"><enum>(C)</enum><text display-inline="yes-display-inline">eligible persons may receive 1 or more
kinds of consideration, including—</text>
<clause commented="no" display-inline="no-display-inline" id="ID862E45C4FC4549539789152F6AB5EA48"><enum>(i)</enum><text display-inline="yes-display-inline">cash;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7B01F62A1E8F490BA2BEBA638864C1C0"><enum>(ii)</enum><text display-inline="yes-display-inline">shares of capital stock of the converting
mutual insurer;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID2B8E1967AD6C46928648690DABED49B6"><enum>(iii)</enum><text display-inline="yes-display-inline">shares of capital stock (or interests in
shares of capital stock) of a corporation that, after the conversion, directly
or indirectly, controls the converted stock insurer;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID96ECF49689F44C078926DD0D746015BE"><enum>(iv)</enum><text display-inline="yes-display-inline">premium credits;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID82FF4D9B3716496DA6256575A1347AD3"><enum>(v)</enum><text display-inline="yes-display-inline">enhanced insurance benefits; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8B7614E3CE17446488FDBA8FB1F9A3BB"><enum>(vi)</enum><text display-inline="yes-display-inline">in the case of a converting mutual insurer
that is a life insurer, credits to insurance policy account values, as set
forth in the plan.</text>
</clause></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID07F3B9D7412D42AC94B6F31C35F60533"><enum>(c)</enum><header>Approval of
Plan by Commissioner</header><text display-inline="yes-display-inline">The
Commissioner shall approve the plan of conversion if the Commissioner finds,
after a hearing, that—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDA6DDE83FD176472BB2AEF0A1A9EF499E"><enum>(1)</enum><text display-inline="yes-display-inline">the plan is fair and equitable to the
insurer and its policyholders;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9FC8375C00404A39ABEC8391B3598EB5"><enum>(2)</enum><text display-inline="yes-display-inline">the plan does not violate the law;
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF8AE37F969074AD1A0BB4AD48AC5B32D"><enum>(3)</enum><text display-inline="yes-display-inline">the converted stock insurer will, after the
conversion, satisfy the requirements for the issuance of a license to write the
line or lines of insurance for which it is licensed.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID5D8013FD563B46098E5E2A5613637FDE"><enum>(d)</enum><header>Vote on
Approval of Plan</header><text display-inline="yes-display-inline">The plan of
conversion shall be submitted to those persons who are eligible to vote on the
plan and shall be subject to approval of a majority of the votes cast by such
persons.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDB332E59E6821473E99636CD3AC344CDD"><enum>(e)</enum><header>Employee Stock
Purchases; Stock Options</header><text display-inline="yes-display-inline">Subject to regulations prescribed by the
Commissioner, the converted insurer or a corporation that, after the
conversion, directly or indirectly, controls the converted insurer, may
establish stock option, incentive, and share ownership plans customary for
publicly traded companies in the same and similar industries.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID1B70F717A5184211B4A8E6518A965662"><enum>(f)</enum><header>Effect of
Conversion on Converted Stock Insurers</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDC9469778208B499E9E16F8D7C597FEE0"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">On the effective date
of the plan of conversion—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID645AFB448D2040F4BFBB5A868B375BE6"><enum>(A)</enum><text display-inline="yes-display-inline">the mutual insurer shall become a National
Insurer in stock form;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4FF26C2693E8468EAC1D2B59C48A2971"><enum>(B)</enum><text display-inline="yes-display-inline">all membership interests and rights in
surplus shall be extinguished; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5C02E0D319B64492B62E52E376B3BEF6"><enum>(C)</enum><text display-inline="yes-display-inline">persons eligible to receive consideration
under the plan of conversion shall be entitled to receive the consideration
specified in the plan in exchange for membership interests and liquidation of
rights in surplus.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC46DD09F41E740A1BDD72D3D7EC6C8AB"><enum>(2)</enum><header>No effect on
existing rights and liabilities</header><text display-inline="yes-display-inline">The converted stock insurer is a
continuation of the original mutual insurer, and the conversion shall not
annul, modify, or change any of the original mutual insurer’s existing suits,
rights, contracts, or liabilities, except as provided in the plan of
conversion.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1C4BCF95F42F4982B4B854D266A5559C"><enum>(3)</enum><header>Rights after
conversion</header><text display-inline="yes-display-inline">After conversion,
the converted stock insurer shall—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID4C71A8BF85464814A2595F65EB2756F6"><enum>(A)</enum><text display-inline="yes-display-inline">exercise all the rights and powers and
perform all the duties conferred or imposed by law upon insurers writing the
classes of insurance written by the converted stock insurer; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDADE749F7B48F4C909FA4473DD07A8490"><enum>(B)</enum><text display-inline="yes-display-inline">retain the rights and contracts existing
prior to conversion, subject to the effect of the plan.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB58D8DF9699B48629320768F03055A41"><enum>(g)</enum><header>Limitations on
Acquiring Converted Stock Insurer</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDF9F3CBEEBFFE464289F88CF0286DA3F2"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Beginning on the date
of enactment of this Act and continuing for a period of 5 years following the
effective date of the plan of conversion, no person or group of persons acting
in concert shall directly or indirectly offer to acquire, or acquire in any
manner the beneficial ownership of, 5 percent or more of any class of voting
securities of a converted insurer or of a person that controls the converted
insurer, without the prior consent of the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6D47DFFFB13741FE96D3A1F407FFE496"><enum>(2)</enum><header>Effect of
violation</header><text display-inline="yes-display-inline">Upon the violation
of paragraph (1), or any action that, if consummated, would constitute such a
violation, all voting securities of the converted insurer or of the person
acquired by any person in excess of the maximum amount permitted to be acquired
by the person under paragraph (1) shall be deemed to be nonvoting securities of
the converted stock insurer or of that person.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE4D80A3CC29641B98D89722E91224B7D"><enum>(3)</enum><header>Enforcement</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID82A30706FF564225BC5A53773CC192AB"><enum>(A)</enum><header>Commencement</header><text display-inline="yes-display-inline">A violation or action described in
paragraph (1) may be enforced or enjoined by appropriate proceeding commenced
by the converted stock insurer or the Commissioner in—</text>
<clause commented="no" display-inline="no-display-inline" id="ID9C9E905385334B12A30A6A1BC26C7184"><enum>(i)</enum><text display-inline="yes-display-inline">the United States district court for the
judicial district in which the main office of the converted stock insurer is
located;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC961DFFD466748D6A6DDA039FEECC942"><enum>(ii)</enum><text display-inline="yes-display-inline">the United States District Court for the
District of Columbia; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE7118F8C640B4AFBAEF588F614B88D2F"><enum>(iii)</enum><text display-inline="yes-display-inline">any other court having jurisdiction.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3989896BD7B4400393509BA0ADBD10E0"><enum>(B)</enum><header>Order</header><text display-inline="yes-display-inline">The court may issue any order it finds
necessary to cure the violation or to prevent the proposed action.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID8D53285A5FA14CEDBF7FB7FFD226C182"><enum>(h)</enum><header>Time Limits for
Plan Actions</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDEF65DE95BCD2444CBA34BF7B48BAC5D3"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of law, actions concerning any plan of conversion or proposed
plan of conversion under this section or any acts taken or proposed to be taken
under this section shall be commenced not later than 30 days after the date on
which the plan of conversion is approved by the Commissioner under subsection
(c).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD0CDF4B3A1954671AB9904E907D138F6"><enum>(2)</enum><header>Plan
withdrawn</header><text display-inline="yes-display-inline">If the plan of
conversion is withdrawn, the actions shall be commenced not later than 30 days
after the date on which the board of directors approves a resolution to
withdraw the plan.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID56CAD0E101B347EAB9182FD4C6F794C4"><enum>(i)</enum><header>Effect on state
law</header><text display-inline="yes-display-inline">No State may prevent or
interfere with a conversion under this section or impede the activities of,
take any action against, or apply any provision of law or regulation to, any
such mutual insurer because that mutual insurer plans to convert, or has
converted, to a National Insurer in stock form under this section.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID8CB6CC9176BF4192B1CF67D515964BF9"><enum>(j)</enum><header>No Delegation
Permitted</header><text display-inline="yes-display-inline">The Commissioner
may not delegate to any insurance self-regulatory organization any authority
under this section with respect to the conversion of a mutual insurer.</text>
</subsection></section></subtitle><subtitle commented="no" id="ID9069D8CAF1CD4F26982DCCD40BDFB3DD" style="OLC"><enum>F</enum><header>State Taxation</header>
<section commented="no" display-inline="no-display-inline" id="IDA9EB8176ADA1488285F0576802B85726" section-type="subsequent-section"><enum>1251.</enum><header>State taxation of
National Insurers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID601A7669E016444DB557BFD1F775F089"><enum>(a)</enum><header>State Taxation
Rule</header><text display-inline="yes-display-inline">Except as provided in
subsection (b), a National Insurer doing business in any State shall be subject
to all State and local taxes, including insurance retaliatory taxes or other
similar taxes, and shall be entitled to all tax credits, deductions, and
offsets provided under State law to the same extent and in the same manner as
an insurer licensed to do business in such State and chartered in the State
where the National Insurer is considered domiciled under subsection (c) or (d),
but shall not be subject to any additional taxes imposed by such State by
reason of the National Insurer’s failure to be licensed or otherwise authorized
to conduct business or write or sell insurance policies, by such State.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID68FBEE63C5134DF49C10791C246AF49B"><enum>(b)</enum><header>Exception</header><text display-inline="yes-display-inline">No State shall have power to impose an
insurance retaliatory tax on any National Insurer unless—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID8B60D3CC14BB4FE28304DAE0713D79D6"><enum>(1)</enum><text display-inline="yes-display-inline">for any tax purpose for which State of
domicile is relevant, every National Insurer is treated by such State as
domiciled in the State designated by each National Insurer under subsection
(c); and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID202FBFDAE9E44732A93F98B43E79E636"><enum>(2)</enum><text display-inline="yes-display-inline">the insurance retaliatory tax is imposed by
such State on every National Insurer to the same extent and in the same manner
as it is imposed on every insurer chartered in the State where the National
Insurer is considered domiciled under subsection (c).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID7C9AB9FC6EEE464F80B37FE969DAA51A"><enum>(c)</enum><header>Designation of
Domicile</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDCCDC9FBCDF7E4F2080B6872395B6F9E2"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">A National Insurer
may designate, as its State of domicile, by filing such designation in writing
with the Commissioner—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID1465B7E838904BD1B1905BEE72D17D1F"><enum>(A)</enum><text display-inline="yes-display-inline">the State in which the National Insurer’s
principal place of business in the United States is located; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID07D8389E9E4940FC812E90D4D2BF062D"><enum>(B)</enum><text display-inline="yes-display-inline">in the case of an insurer that has
converted from a State insurer to a National Insurer under this Act, the State
in which such insurer was domiciled immediately before such conversion.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBFBC94852D964C4FACB9DDAE9517F1AD"><enum>(2)</enum><header>No Designation
by national insurer</header><text display-inline="yes-display-inline">If a
National Insurer does not make a designation of a State of domicile under this
subsection, the National Insurer shall be deemed to have designated as its
State of domicile the State in which its principal place of business in the
United States is located.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID072F6A5B63B645738AF3EBAD8FF7C25C"><enum>(d)</enum><header>Change in
Domicile</header><text display-inline="yes-display-inline">A National Insurer
may change its State of domicile, with the approval of the Commissioner, to any
other State meeting the requirements under subsection (c).</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID984FDAE65014457595CBBBF9B964E016"><enum>(e)</enum><header>Status of
National Insurer</header><text display-inline="yes-display-inline">For purposes
of State taxation, a National Insurer—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID6A5FB66E20634DADB42A6FBED3B03BE6"><enum>(1)</enum><text display-inline="yes-display-inline">shall not be considered a department,
agency, or instrumentality of the Federal Government; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID75D30D6A410D48E385ECB517C3B19D7B"><enum>(2)</enum><text display-inline="yes-display-inline">except as provided in this section, a
National Insurer shall not be exempt from any State tax or subject to a lesser
burden of any State tax, solely by reason of its status as a National Insurer
under this Act.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID08EB1C99074746ADB3EDCB0A72069FCC" section-type="subsequent-section"><enum>1252.</enum><header>State taxation of
National Agencies</header>
<subsection commented="no" display-inline="no-display-inline" id="IDADACEEA4B44C4024A1196FF3B6FB743E"><enum>(a)</enum><header>State Taxation
Rule</header><text display-inline="yes-display-inline">A National Agency shall
be subject to all taxes imposed under the authority of any State legislation to
the same extent and in the same manner as an agency chartered in the State
where the National Agency is considered domiciled pursuant to subsection
(b).</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID8C1B871CD7F149C4A03A707F298F878D"><enum>(b)</enum><header>State of
Domicile</header><text display-inline="yes-display-inline">For purposes of this
section, the State of domicile of a National Agency shall be deemed to be the
State in which the Agency’s principal place of business in the United States is
located.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID0B62593228D04E1FB2977881F86EFE5C"><enum>(c)</enum><header>Status of
National Agency</header><text display-inline="yes-display-inline">For purposes
of State taxation, a National Agency shall not—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDA5242CE72A9A463A945C7F50F15B94FF"><enum>(1)</enum><text display-inline="yes-display-inline">be considered to be a department, agency,
or instrumentality of the Federal Government; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB3CD4EDF37E64339AE352E58C9266A8B"><enum>(2)</enum><text display-inline="yes-display-inline">except as provided in this section, be
exempt from any State tax or subject to a lesser burden of any State tax,
solely by reason of its status as a National Agency under this Act.</text>
</paragraph></subsection></section></subtitle><enum>III</enum><header>INSURANCE PRODUCERS AND OTHER INSURANCE
SERVICING PERSONS</header>
<section commented="no" display-inline="no-display-inline" id="IDE83DEFBFE32F4506BFDA14C71CAC6708" section-type="subsequent-section"><enum>1301.</enum><header>Federal licensing
of insurance producers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID727D3FBCA3CC4DD29C3110CDB0C8E956"><enum>(a)</enum><header>Commissioner's
Authority</header><text display-inline="yes-display-inline">The
Commissioner—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID871B8D94EAD444C9A8EB865D3B48FFCB"><enum>(1)</enum><text display-inline="yes-display-inline">shall have authority to issue Federal
producer licenses; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8E18AD4272DB49B6875CC39FA43B0223"><enum>(2)</enum><text display-inline="yes-display-inline">shall, by regulation—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5D04D0CFAF9446F2AFCE7D06448F3A88"><enum>(A)</enum><text display-inline="yes-display-inline">define the line or lines of insurance
(which shall include health insurance as a line of insurance) for which a
person may obtain a Federal producer license; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID576C97DDF347472AA6D04AD0F3380D5E"><enum>(B)</enum><text display-inline="yes-display-inline">specify educational and examination
requirements for persons seeking a Federal producer license, other than
National Agencies that are subject to chartering criteria under section
1201.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDC3A3455214B34E3ABF59585CF747B31A"><enum>(b)</enum><header>National
Agencies</header><text display-inline="yes-display-inline">The Commissioner
shall issue a Federal producer license to a National Agency upon the issuance
of a charter certificate to such Agency pursuant to section 1201.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID0936BAEB3B6B468ABBD8906D8C16C219"><enum>(c)</enum><header>Authority of
Person Holding a Federal Producer License</header><text display-inline="yes-display-inline">A Federal producer license authorizes the
person to sell, solicit, or negotiate insurance in any State for any line or
lines of insurance specified in such license.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID60EF621C4FD64973B46A8BD12BBFF57F"><enum>(d)</enum><header>Examinations
and Reports</header><text display-inline="yes-display-inline">In addition to
the examination and reporting requirements applicable to National Agencies
pursuant to sections 1124 and 1125, the Commissioner may—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDC89AB0469F05492C9A3E6106F351D141"><enum>(1)</enum><text display-inline="yes-display-inline">provide for the examination of federally
licensed insurance producers that are not National Agencies only in response to
a complaint or any other evidence that the federally licensed insurance
producer has violated or is about to violate—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID1c5927db5b864fd19b467ff608f5925c"><enum>(A)</enum><text display-inline="yes-display-inline">a law, rule, or regulation;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDaee39180ea2f4a09bd020d26e2905793"><enum>(B)</enum><text display-inline="yes-display-inline">any condition imposed in writing by the
Commissioner in connection with issuing a Federal producer’s license; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2bc886cc5c5544d4aeae946674b39ae5"><enum>(C)</enum><text display-inline="yes-display-inline">any written agreement entered into with the
Commissioner; and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD1FA2EE241FB40B497156A4AEB6F5320"><enum>(2)</enum><text display-inline="yes-display-inline">require federally licensed insurance
producers that are not National Agencies to make such reports, containing such
information and in such form, as the Commissioner may prescribe by regulation
to the extent necessary to require compliance with this Act.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID19334449DD0A43E4B1663533406EA5E0"><enum>(e)</enum><header>Information
Practices</header><text display-inline="yes-display-inline">The Commissioner
may, by regulation, provide that there shall be no civil liability imposed on
and no cause of action shall arise from a National Insurer or National Agency,
an insurer-affiliated party, or a federally licensed insurance producer
submitting any statement or information required under this Act or any
regulation thereunder or requested in writing by the Commissioner relating to
the conduct of a federally licensed insurance producer, provided that—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDFC7BCC331E7242EB80447E1BCF2C3FA3"><enum>(1)</enum><text display-inline="yes-display-inline">this protection may not apply to false
statements made with actual malice; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID06D12289A5454415BADCE3F67F788B0A"><enum>(2)</enum><text display-inline="yes-display-inline">such regulation shall not abrogate or
modify any existing common law or statutory privileges or immunities.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDB7D7920B53494BB69C1515862E5CF583" section-type="subsequent-section"><enum>1302.</enum><header>Producer
database</header>
<subsection commented="no" display-inline="no-display-inline" id="ID38CD1C12C2C6407885D2F402746F6B57"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">The Commissioner
shall adopt regulations for the development of an electronic database
consisting of information relating to federally licensed insurance producers
and an electronic communication network that links the Commissioner with State
insurance regulators and insurers for an electronic exchange of such
information.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID9E59D271A2CE4A9E80703A6E866C4021"><enum>(b)</enum><header>Maintenance</header><text display-inline="yes-display-inline">The Commissioner, by rule or order, may
delegate authority over the maintenance of each database described in
subsection (a) to an insurance self-regulatory organization. In making any such
rule or entering any such order, the Commissioner shall take into consideration
the regulatory capabilities and procedures of the insurance self-regulatory
organization, availability of staff, convenience of location, avoidance of
unnecessary regulatory duplication, and any other factors the Commissioner may
consider appropriate to the protection of policyholders, the efficiency of the
producer licensing system, and the cooperation and coordination among
regulatory organizations.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDE9B40087109D46C09B25C10490511C5A" section-type="subsequent-section"><enum>1303.</enum><header>Supervision and
oversight of federally licensed insurance producers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID7EB18D6E925540DE852E6D0E33548BE5"><enum>(a)</enum><header>Purpose</header><text display-inline="yes-display-inline">The purpose of this section is to establish
when a National Insurer, National Agency, or federally licensed insurance
producer has a duty to supervise a federally licensed insurance producer. The
duty to supervise as required in this section shall be in addition to the
authority of the Commissioner to supervise federally licensed insurance
producers under section 1102(b).</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID8A7845DF1D364F42875601FE2273889F"><enum>(b)</enum><header>Duty To
Supervise</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID54417B29CF2948B78F84A1A01B6042E6"><enum>(1)</enum><header>National
insurers</header><text display-inline="yes-display-inline">A National Insurer
shall have a duty to supervise the sales and marketing practices of a federally
licensed insurance producer with respect to the sale, solicitation, or
negotiation of insurance policies of such National Insurer, if such
producer—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID52F66F33115F4804BC6776F19A80256F"><enum>(A)</enum><text display-inline="yes-display-inline">is an employee of the National Insurer;
or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDDB610DD13B66427991E10AB864815AD9"><enum>(B)</enum><text display-inline="yes-display-inline">is an agent of the National Insurer—</text>
<clause commented="no" display-inline="no-display-inline" id="ID69AC4364D3CB4A339F858122A154B26F"><enum>(i)</enum><text display-inline="yes-display-inline">who is an individual; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID9895FD71038A48538A9E34317AE9132C"><enum>(ii)</enum><text display-inline="yes-display-inline">whose entire or principal business activity
is devoted to the sale, solicitation, or negotiation of insurance policies for
such Insurer, the recumbent, training, or supervision of the agents, or
both.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0154A663FC26482C8C2C3E3B507F178A"><enum>(2)</enum><header>National
agencies</header><text display-inline="yes-display-inline">A National Agency or
other federally licensed insurance producer that is an entity has a duty to
supervise the sales and marketing practices of its employees and agents with
respect to the sale, solicitation, or negotiation of insurance policies
if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID290B5E4EB4A44C058C529A8C5D53CAC0"><enum>(A)</enum><text display-inline="yes-display-inline">in the case of an employee, the insurance
policy sold, solicited, or negotiated is within the scope of such person’s
employment; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID06CB5C5C264A4C999B68E22C2BACB9F7"><enum>(B)</enum><text display-inline="yes-display-inline">in the case of an agent, the insurance
policy is sold, solicited, or negotiated pursuant to the terms of the agreement
between the agent and such National Agency or other entity that is a federally
licensed insurance producer.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8B8F36A5F70B4594A4456A9A06B4DEB6"><enum>(3)</enum><header>Standards for
supervision</header><text display-inline="yes-display-inline">The Commissioner
shall, by regulation, establish standards for the supervision of the sales and
marketing practices of federally licensed insurance producers required in
paragraphs (1) and (2).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAA3BA41603DB435189BEEAE526FD3EBE"><enum>(4)</enum><header>No
duty</header><text display-inline="yes-display-inline">A National Insurer,
National Agency, or other federally licensed insurance producer that is an
entity shall not have a duty to supervise the sales and marketing practices of
persons not listed in paragraphs (1) and (2).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBC96638531024ACDBD91EB9E64141FB4"><enum>(5)</enum><header>Oversight of
individual independent federally licensed insurance producers</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2FA019941675452799CB85E0FA9FAE76"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The sales and
marketing practices of a federally licensed insurance producer with respect to
the sale, solicitation, or negotiation of insurance policies shall be subject
to the direct oversight of the Commissioner if such producer is not—</text>
<clause commented="no" display-inline="no-display-inline" id="IDB2EEF06A67B44A4CBD47A3DDA0BC7041"><enum>(i)</enum><text display-inline="yes-display-inline">an individual who is an employee or agent
of a National Insurer, National Agency, or other federally licensed insurance
producer that is an entity; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID20D073CD6B3F4BC6A5657FEA6276083E"><enum>(ii)</enum><text display-inline="yes-display-inline">an individual whose entire or principal
business activity is devoted to the sale, solicitation, or negotiation of
insurance policies for a National Insurer or recumbent, training, or
supervision of the agents.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8DD05BCAD3B64321AB70F053E28AE6C1"><enum>(B)</enum><header>Standards and
procedures</header><text display-inline="yes-display-inline">The Commissioner
shall, by regulation, establish standards and procedures for the direct
oversight of the sales and marketing practices of federally licensed insurance
producers provided in subparagraph (A).</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID141C87F9FB004A85A8B883B42AE1B04A" section-type="subsequent-section"><enum>1304.</enum><header>Relationship to
State law</header>
<subsection commented="no" display-inline="no-display-inline" id="IDE5D8A9E5654446E58914E95A51CB78FA"><enum>(a)</enum><header>No State
Restrictions</header><text display-inline="yes-display-inline">No State may, by
statute, regulation, order, interpretation, or otherwise, prevent or restrict a
National Insurer from engaging in the acts described in subsection (b) for any
person, or from engaging the services of a person who engages in such acts for
the National Insurer, nor shall any State require that a person be licensed by
reason of engaging in such acts for a National Insurer.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDA42D78A7291A46E4954517D9DCADA3C5"><enum>(b)</enum><header>Acts Protected
From State Restrictions</header><text display-inline="yes-display-inline">The
acts referred to in subsection (a) are the following:</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDB4B1018BFF824568952B60B532AFEAD0"><enum>(1)</enum><text display-inline="yes-display-inline">Investigating, evaluating, ascertaining, or
determining the amount of or negotiating, settling, or adjusting or otherwise
participating in the disposal of claims, losses, or damages arising under
insurance policies written by a National Insurer, whether the person performing
the act is called an adjuster, independent adjuster, or another name.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7C2AC59D732B4340BC139F87918C39C0"><enum>(2)</enum><text display-inline="yes-display-inline">Soliciting, negotiating, or placing
reinsurance cessions or retrocessions on behalf of a ceding National Insurer
without the authority or power to bind reinsurance on behalf of such National
Insurer, whether the person performing the act is called a reinsurance
intermediary or another name.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3E149DE489734B1192509BA962CE48CF"><enum>(3)</enum><text display-inline="yes-display-inline">Having authority to bind or manage all or
part of the assumed reinsurance business of a National Insurer that is a
reinsurer (including the management of a separate division, department, or
underwriting office) and acting as an agent for such reinsurer whether the
person performing the act is called a reinsurance intermediary-manager,
manager, or another name.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID643F760F13384920A70FD01534530CB7"><enum>(4)</enum><text display-inline="yes-display-inline">Directly or indirectly underwriting,
collecting charges or premiums, or adjusting or settling claims, in connection
with policies of insurance written by a National Insurer.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID9CCCAB9E43D54C5C9B47192AE35F5305"><enum>(c)</enum><header>Activities of
Federally Licensed Insurance Producers</header><text display-inline="yes-display-inline">No State may—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID42AFCF6B3C414802AD701354B67991BE"><enum>(1)</enum><text display-inline="yes-display-inline">by statute, regulation, order,
interpretation, or otherwise, prevent or restrict a federally licensed
insurance producer from selling, soliciting, or negotiating insurance in such
State on behalf of a National Insurer, State insurer, or United States branch
of a non-United States Insurer; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCB4CC33F6EEA494D85B902C42DCE275A"><enum>(2)</enum><text display-inline="yes-display-inline">require such producer to be licensed by
reason of engaging in such acts on behalf of a National Insurer, State insurer,
or a United States branch of a non-United States Insurer.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDAE63FC731ABE4EEC9CBE290C0376B977"><enum>(d)</enum><header>Activities of
State Producers</header><text display-inline="yes-display-inline">No State may,
by statute, regulation, order, interpretation, or otherwise, prevent or
restrict an insurance producer licensed by such State from selling, soliciting,
or negotiating insurance in such State on behalf of a National Insurer.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDe5f4b220fe9b40408aa453b5bafe7dd5" section-type="subsequent-section"><enum>1305.</enum><header>Licensing
commencement date</header>
<subsection commented="no" display-inline="no-display-inline" id="ID7abad3ccb67d4250b887846e38d361f4"><enum>(a)</enum><header>Federally
licensed insurance producers</header><text display-inline="yes-display-inline">The Commissioner shall not license a
Federal insurance producer until after the following regulations have been
published in final form:</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDb7aa366935574947b4d41e441798c3c5"><enum>(1)</enum><text display-inline="yes-display-inline">The fee and assessment regulations
authorized by section 1122.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDabf7c5e33ca742708d2bea05c8baf7de"><enum>(2)</enum><text display-inline="yes-display-inline">The reporting regulations authorized by
section 1124.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0a087d2d771f4508a3a05a29322229a5"><enum>(3)</enum><text display-inline="yes-display-inline">The market conduct regulations authorized
by section 1215.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDb7bcaa21dee2486cb0600e1c67cfe42f"><enum>(4)</enum><text display-inline="yes-display-inline">The producer licensing regulations
authorized by section 1301.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDacd8748e528b46c29f645dfe539a29c6"><enum>(5)</enum><text display-inline="yes-display-inline">Such other regulations that the
Commissioner determines, at the Commissioner's discretion, to be necessary
prior to the initial licensing of Federal insurance producers.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID503c51b5ba20497da95a1eb4245a67bd"><enum>(b)</enum><header>Timing and
notice</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID53baf654a0544bd99b0614b128628e20"><enum>(1)</enum><header>Timing</header><text display-inline="yes-display-inline">The regulations described in subsection (a)
shall be published in final form not later than 2 years after the initial
appointment and confirmation of the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID55dd39ec4543426cb671a2a4dbdc233b"><enum>(2)</enum><header>Notice</header><text display-inline="yes-display-inline">At such time as the regulations described
in subsection (a) have been issued in final form, the Commissioner shall
publish a notice in the Federal Register announcing that the Office is prepared
to act on licensing applications.</text>
</paragraph></subsection></section><enum>IV</enum><header>HOLDING COMPANIES</header>
<section commented="no" display-inline="no-display-inline" id="ID7C080C17908D43479D97E23C9BC90FD0" section-type="subsequent-section"><enum>1401.</enum><header>Definitions</header><text display-inline="no-display-inline">In this title:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID6A0AF29DE95A4A68BE65B336C4D4B6E6"><enum>(1)</enum><header>Extraordinary
dividend or distribution</header><text display-inline="yes-display-inline">Except as may otherwise be specified by the
Commissioner by regulation, the term <term>extraordinary dividend or
distribution</term> means a dividend or distribution of cash or other property
on its outstanding shares (excluding pro rata distributions of any class of the
National Insurer’s own shares), whose fair market value together with that of
other dividends or distributions made within the prior 12 months exceeds the
greater of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC8CA4C564848440DB8A7DE1DF67A61DD"><enum>(A)</enum><text display-inline="yes-display-inline">10 percent of the National Insurer’s
policyholder surplus as of the prior December 31; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID82BC6DE691FC4A7E96E4866764596556"><enum>(B)</enum><text display-inline="yes-display-inline">the net income of the National Insurer for
the 12-month period ending the prior December 31.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID19AE84AC436D408EAEAFEE084A02E874"><enum>(2)</enum><header>Insurance
holding company system</header><text display-inline="yes-display-inline">The
term <term>insurance holding company system</term> means 2 or more affiliated
persons, 1 or more of which is a National Insurer.</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="ID40F1C8EB98E44C61817F1F0B0845AEDF" section-type="subsequent-section"><enum>1402.</enum><header>Registration</header>
<subsection commented="no" display-inline="no-display-inline" id="ID3E4099A5C817462390298C3EFD0B81D1"><enum>(a)</enum><header>Registration</header><text display-inline="yes-display-inline">Each National Insurer that is a member of
an insurance holding company system shall register with the
Commissioner.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID07201CD1381E48EDA2EFBF6894ED3CBA"><enum>(b)</enum><header>Registration
Statement</header><text display-inline="yes-display-inline">The Commissioner
shall, by regulation, prescribe—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDA14334F490D64C2381DE8A8380A0A991"><enum>(1)</enum><text display-inline="yes-display-inline">the form and content of the registration
statement to be filed pursuant to subsection (a); and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD4F6122C878541AE8932566A3316055B"><enum>(2)</enum><text display-inline="yes-display-inline">the time and place where the registration
statement is required to be filed with the Commissioner.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDDC596C55AA2247B2954816D1FA47D5D6"><enum>(c)</enum><header>Termination of
Registration</header><text display-inline="yes-display-inline">The Commissioner
shall terminate the registration of any National Insurer which demonstrates
that it no longer is a member of an insurance holding company system.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID00323693A5D1498986C8675DD9B822CB"><enum>(d)</enum><header>Consolidated
Registration Statement</header><text display-inline="yes-display-inline">The
Commissioner may require or allow 2 or more affiliated National Insurers to
file a consolidated registration statement.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID723D64BCA97D4BB9B363F9BE9A747C47"><enum>(e)</enum><header>Exemptions</header><text display-inline="yes-display-inline">The provisions of this section shall not
apply to any National Insurer, information, or transaction if, and to the
extent that, the Commissioner by regulation or order, exempts such Insurer,
information, or transaction from the provisions of this section.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID2994784697BA4644B120CE2A6E28E6E8"><enum>(f)</enum><header>Disclaimer</header><text display-inline="yes-display-inline">Any person may file with the Commissioner a
disclaimer of affiliation with any National Insurer or a disclaimer may be
filed by the National Insurer or any member of an insurance holding company
system. The disclaimer shall fully disclose all material relationships and
bases for affiliation between the person and the National Insurer as well as
the basis for disclaiming the affiliation. After a disclaimer has been filed,
the National Insurer shall be relieved of any duty to register or report under
this section which may arise out of the National Insurer’s relationship with
the person unless and until the Commissioner disallows the disclaimer. The
Commissioner shall disallow a disclaimer only after furnishing all parties in
interest with notice and opportunity to be heard and after making specific
findings of fact to support the disallowance.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDA7CD728B22564E4E8A6E58D6F02BDFD9" section-type="subsequent-section"><enum>1403.</enum><header>Standards and
management of a National Insurer within an insurance holding company
system</header>
<subsection commented="no" display-inline="no-display-inline" id="ID22D146FE92E640B282B40268E05B61A6"><enum>(a)</enum><header>Transactions
Within an Insurance Holding Company System</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID35263A3E5CD746A2BFE5673DD094D693"><enum>(1)</enum><header>Standards</header><text display-inline="yes-display-inline">Transactions within an insurance holding
company system to which a National Insurer subject to registration under
section 1402 is a party shall be subject to the following standards:</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID1795616D94BC432A844A90B8B2BAB262"><enum>(A)</enum><text display-inline="yes-display-inline">The terms shall be fair, reasonable, and at
least as favorable to the National Insurer as those that would be offered to,
or would apply to, a nonaffiliate.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6DDCCC4A7E9247828F77D12477EBC119"><enum>(B)</enum><text display-inline="yes-display-inline">Charges or fees for services performed
shall be reasonable and at least as favorable to the National Insurer as those
that would be offered to, or would apply to, a nonaffiliate.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID25AFFF0137774466A3B767C7093082AA"><enum>(C)</enum><text display-inline="yes-display-inline">Expenses incurred and payment received
shall be allocated to the National Insurer in conformity with customary
insurance accounting practices consistently applied.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1457F8B7CE9C40099162F6469D30A526"><enum>(D)</enum><text display-inline="yes-display-inline">The books, accounts, and records of each
party to all such transactions shall be so maintained as to clearly and
accurately disclose the nature and details of the transactions including such
accounting information as is necessary to support the reasonableness of the
charges or fees to the respective parties.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID377E5839F93E4244B572B8C43B49AB4F"><enum>(E)</enum><text display-inline="yes-display-inline">The National Insurer’s surplus as regards
policyholders following any dividends or distributions to shareholders shall be
reasonable in relation to the National Insurer’s outstanding liabilities and
adequate to meet its financial needs.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB2B0D384AF304DA9A023D026F893C6F7"><enum>(2)</enum><header>Approval of
certain transactions</header><text display-inline="yes-display-inline">The
Commissioner may, by regulation, specify certain transactions involving a
National Insurer and any person in its insurance holding company system that
are not permissible for a National Insurer unless the National Insurer has
notified the Commissioner in writing of its intention to enter into the
transaction and the Commissioner either has approved or not disapproved the
transaction within a specified time period.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7D530990EEE14ECAAB62A7782E465FFC"><enum>(3)</enum><header>Compliance with
standards</header><text display-inline="yes-display-inline">The Commissioner,
in reviewing any transaction for which notice is required pursuant to paragraph
(2), shall consider whether the transaction complies with the standards set
forth in paragraph (1) and whether the transaction may adversely affect the
interests of policyholders.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID9DD690FADF2A4209A15FE5A16C81BBE3"><enum>(b)</enum><header>Extraordinary
Dividends</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID2C280B3982314E22A669D289567EEC83"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">No National Insurer
that is a member of an insurance holding company system shall pay any
extraordinary dividend or distribution to its shareholders until 30 days after
the Commissioner has received notice of the declaration in a form prescribed by
the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB56A74DF5D774E26BBFF317B8396D311"><enum>(2)</enum><header>Conditional
dividend or distribution</header><text display-inline="yes-display-inline">A
National Insurer that is a member of an insurance holding company system may
declare an extraordinary dividend or distribution which is conditional upon the
Commissioner’s approval, and the declaration shall confer no rights upon
shareholders unless—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE5E6769A20CE4633A7959CDCCD34AFBD"><enum>(A)</enum><text display-inline="yes-display-inline">the Commissioner has approved the payment
of the dividend or distribution; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE73B969A0ED448488A0DAFCE1A28514C"><enum>(B)</enum><text display-inline="yes-display-inline">the Commissioner has not disapproved
payment within the 30-day period referred to in paragraph (1).</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID7E1D14E3163641ACBDA59E364A000E59" section-type="subsequent-section"><enum>1404.</enum><header>Relationship to
State law</header>
<subsection commented="no" display-inline="no-display-inline" id="ID164E4409AEC34FD885C2F92669F21374"><enum>(a)</enum><header>Permitted
Affiliation</header><text display-inline="yes-display-inline">A National
Insurer that is part of an insurance holding company system may be affiliated
with an insurer or agency that is not chartered or licensed under this
Act.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDB4EC42CC9D8E4E9FBFF691AC0535E7F7"><enum>(b)</enum><header>Reinsurance
Pooling Agreements</header><text display-inline="yes-display-inline">The
Commissioner shall have exclusive jurisdiction over reinsurance pooling
agreements to which 1 or more National Property/Casualty Insurers and
affiliated State property/casualty insurers, or agency are parties under which
policies of insurance sold, solicited, negotiated, and underwritten by and
reinsurance assumed by affiliated National Property/Casualty Insurers and State
property/casualty insurers are pooled.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID4481A07C8C8C4AC792AB53B52DC23E2E" section-type="subsequent-section"><enum>1405.</enum><header>Conflict with other
Federal laws</header><text display-inline="no-display-inline">This title shall
be interpreted and applied so as not to conflict with or supersede the
provisions of any other Federal law or regulation governing the regulation of
holding companies, including financial holding companies as defined in section
2 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of
1956</act-name> (12 U.S.C. 1841).</text>
</section><section commented="no" display-inline="no-display-inline" id="ID97F340A75B694948A8CA76AB4F2D6C23" section-type="subsequent-section"><enum>1406.</enum><header>No delegation
permitted</header><text display-inline="no-display-inline">The Commissioner may
not delegate to any insurance self-regulatory organization any authority
conferred under this title with respect to regulation of a National Insurer
that is a member of an insurance holding company system.</text>
</section><enum>V</enum><header>RECEIVERSHIP</header>
<section commented="no" display-inline="no-display-inline" id="ID1C40DA9CCBC64C1EBC5C52203DFB7805" section-type="subsequent-section"><enum>1501.</enum><header>Appointment of
Office as receiver</header>
<subsection commented="no" display-inline="no-display-inline" id="ID5D4D323521714CEEBA883A801B9065BB"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of Federal or State law, if any of the grounds under subsection
(c) exist, at the discretion of the Commissioner, the Commissioner may
establish a receivership for a National Insurer for the purpose of
rehabilitation or liquidation, as appropriate.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDE8614B640ECB48708459E42B3BE5FABC"><enum>(b)</enum><header>Appointment</header><text display-inline="yes-display-inline">In any receivership established under this
title, the Commissioner shall appoint the Office as receiver.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDCFA3FDF3BAEC4AE08E26C2EFB7A96A90"><enum>(c)</enum><header>Grounds for
Appointment</header><text display-inline="yes-display-inline">The grounds for
appointing receivership for the purpose of rehabilitating or liquidating a
National Insurer are as follows:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID005962C2121248A4A937707C4E29DE18"><enum>(1)</enum><header>Insolvency</header><text display-inline="yes-display-inline">The National Insurer is insolvent.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDb29dba7dd5734b22aa80c6fc5b837186"><enum>(2)</enum><header>Substantial
dissipation</header><text display-inline="yes-display-inline">The National
Insurer has substantial dissipation of assets or earnings due to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDae720c6c0cbf434790750b22cadba464"><enum>(A)</enum><text display-inline="yes-display-inline">any violation of any provision of Federal
or State law; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDe5131faa83ad4ae49d0e09f0597e74d3"><enum>(B)</enum><text display-inline="yes-display-inline">any hazardous practice.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID45d7024c1dcd408aabeb371d8fd91806"><enum>(3)</enum><header>Hazardous
condition</header><text display-inline="yes-display-inline">The National
Insurer is in such condition that the further transaction of business would be
hazardous, financially or otherwise, to policyholders, creditors, or the
public.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID787811aa42474bf58540e70f54c4750e"><enum>(4)</enum><header>Cease-and-desist
orders</header><text display-inline="yes-display-inline">The National Insurer
has willfully violated a cease-and-desist order that has become final.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9fa33cb13bf94ccfa3533d706d15d0e6"><enum>(5)</enum><header>Concealment</header><text display-inline="yes-display-inline">The National Insurer has concealed the
books, papers, records, or assets of the National Insurer, or has refused to
submit the books, papers, records, or affairs of the National Insurer, for
inspection to any examiner or to any lawful agent of the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9b59972df3454ff1970c8eed9b511680"><enum>(6)</enum><header>Inability to
meet obligations.</header><text display-inline="yes-display-inline">The
National Insurer is likely to be unable to pay its obligations or meet the
demands of its creditors in the normal course of business.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDa3b33ea5fb494c10b57b070df396a091"><enum>(7)</enum><header>Losses</header><text display-inline="yes-display-inline">The National Insurer has incurred or is
likely to incur losses that will deplete all or substantially all of its
capital, and there is no reasonable prospect for the National Insurer to
replenish its capital.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDeed53e8cf5754e298700cff5f2c56c43"><enum>(8)</enum><header>Violations of
law</header><text display-inline="yes-display-inline">The National Insurer has
violated any law or regulation, or committed any hazardous practice or
condition, that is likely to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9e568962baec4305bf7104d180b41312"><enum>(A)</enum><text display-inline="yes-display-inline">cause insolvency or substantial dissipation
of assets or earnings; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8e18b93d49384403baf9eb3e6aad2b3f"><enum>(B)</enum><text display-inline="yes-display-inline">weaken the condition of the National
Insurer.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID59c4749e6bd94e3eb7e10a35cd32b9f9"><enum>(9)</enum><header>Consent</header><text display-inline="yes-display-inline">The National Insurer, by resolution of its
board of directors or its shareholders or members, consents to the
appointment.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6f38e2a2b29d44b382e46743ed7b1d20"><enum>(10)</enum><header>Money
laundering.</header><text display-inline="yes-display-inline">The Attorney
General notifies the Commissioner in writing that the National Insurer has been
found guilty of a criminal offense under section 1956 or 1957 of title 18,
United States Code, or section 5322 or 5324 of title 31, United States
Code.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID616F4D09F51E4A129F9A897F710382EC"><enum>(d)</enum><header>Directors Not
Liable</header><text display-inline="yes-display-inline">The members of the
board of directors of a National Insurer shall not be liable to the
shareholders, members, policyholders, or creditors of the insurer for
acquiescing in, or consenting in good faith to, the appointment of the Office
as a receiver.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDDB05C35BBA1E4F17A18F2CEDBAEB029C"><enum>(e)</enum><header>Office Not
Subject to any Other Federal Agency</header><text display-inline="yes-display-inline">When acting as receiver, the Office shall
not be subject to the direction or supervision of any other agency of the
United States or any State in the exercise of the rights, powers, and
privileges of the Office.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID1E130D5C325548ED8A776A074C868319" section-type="subsequent-section"><enum>1502.</enum><header>Automatic
stay</header>
<subsection commented="no" display-inline="no-display-inline" id="ID07434F1164D645C8A6C70D2F6AB3BCD1"><enum>(a)</enum><header>Automatic
Stay</header><text display-inline="yes-display-inline">Except as provided in
subsection (c) or as otherwise provided in this title, the commencement of a
receivership proceeding under this title operates as a stay, applicable to all
entities, of—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID94213595C89E42F78E2904665CCACBFA"><enum>(1)</enum><text display-inline="yes-display-inline">the commencement or continuation, including
the issuance or employment of process, of a judicial, administrative, or other
action or proceeding against the National Insurer, including an arbitration
proceeding, that was or could have been commenced before the commencement of
the receivership proceeding under this title, or to recover a claim against the
National Insurer that arose before the commencement of the receivership
proceeding under this title;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1A105C114502481DA4DC28E82FF54BEC"><enum>(2)</enum><text display-inline="yes-display-inline">the enforcement, against the National
Insurer or against property of the National Insurer, of a judgment obtained
before the commencement of the receivership proceeding under this title;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5CDC57A205FB4A93A2F7659B431B6FFB"><enum>(3)</enum><text display-inline="yes-display-inline">any act to obtain possession of property of
the National Insurer or of property from the National Insurer or to exercise
control over property or records of the National Insurer;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID50F2F65FD35741A48EF5D469F5F39559"><enum>(4)</enum><text display-inline="yes-display-inline">any act to create, perfect, or enforce any
lien against property of the National Insurer;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4597A8BA6FF346E0A79A3DBC58264A81"><enum>(5)</enum><text display-inline="yes-display-inline">any act to collect, assess, or recover a
claim against the National Insurer that arose before the commencement of a
receivership proceeding under this title; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0E669A468F47422699DBA98F7DB928BF"><enum>(6)</enum><text display-inline="yes-display-inline">the commencement or continuation of an
action or proceeding against a reinsurer of the National Insurer, by the holder
of a claim against the National Insurer, seeking reinsurance recoveries that
are contractually due to the National Insurer.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID585BCDE4D8C646EB88CE25794E021D2B"><enum>(b)</enum><header>Other
Stay</header><text display-inline="yes-display-inline">Except as provided in
subsections (c) and (d) or as otherwise provided in this title, the
commencement of a receivership proceeding under this title operates as a stay,
applicable to all entities, of the commencement or continuation, including the
issuance or employment of process, of a judicial, administrative, or other
action or proceeding, including the enforcement of any judgment against any
insured that was or could have been commenced before the commencement of the
receivership proceeding under this title or to recover a claim against any
insured that arose before or after the commencement of the receivership
proceedings under this title and for which the insurer is or may be liable
under an insurance policy or is obligated to defend a party. The stay provided
by this subsection shall terminate 90 days after appointment of the receiver
unless extended by order of the Commissioner, for good cause shown, after
notice to any affected parties and such hearing as the Commissioner determines
is appropriate, provided that any applicable statute of limitation with respect
to any claim against an insured shall be tolled during the period of the stay
provided by this subsection and any extensions.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDCF69609D945F495E988831CC7D72DC10"><enum>(c)</enum><header>Exceptions</header><text display-inline="yes-display-inline">The commencement of a receivership
proceeding under this title does not operate as a stay of—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID2D42BC7D788247EDB3A2ADC5DEBCE2C1"><enum>(1)</enum><text display-inline="yes-display-inline">criminal actions;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCF5C84E4E0024351B65DE0C2A9D08214"><enum>(2)</enum><text display-inline="yes-display-inline">any act to perfect, or to maintain or
continue the perfection of, an interest in property to the extent such act is
accomplished within any relation back period under applicable law;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID69AFC8449FDF421B961BB078A1B90507"><enum>(3)</enum><text display-inline="yes-display-inline">setoff as permitted by regulations issued
by the Commissioner;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC5C0968C9D59416E881ACD97D4CF145B"><enum>(4)</enum><text display-inline="yes-display-inline">termination of reinsurance contracts
covering insurance policies;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA8957117EA594913871EE7B0614E557D"><enum>(5)</enum><text display-inline="yes-display-inline">pursuit and enforcement of nonmonetary
governmental claims, judgments, and proceedings;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6AA2D760D7444A1D8CBFDAFADD3160AB"><enum>(6)</enum><text display-inline="yes-display-inline">enforcement of a lessor’s rights under a
lease that expired prior to the filing of the receivership proceeding;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID00B5FD4A34D2451A9296B05EE033E435"><enum>(7)</enum><text display-inline="yes-display-inline">presentment of a negotiable instrument and
the giving of notice of and protesting dishonor of such an instrument;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3FB5C9DE1C9949FCA9B38EB9E963C49B"><enum>(8)</enum><text display-inline="yes-display-inline">enforcement of rights against single
beneficiary trusts;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB0A5BD39930E4FAD87466108C1A3AE13"><enum>(9)</enum><text display-inline="yes-display-inline">termination, liquidation, and netting of
obligations under qualified financial contracts as such contracts are defined
by regulations issued by the Commissioner;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE2AFF123E3D84E8AB08BE12266186D0A"><enum>(10)</enum><text display-inline="yes-display-inline">discharge by a guaranty association of
statutory responsibilities or the pursuit of claims against a guaranty
association to the extent permitted by law other than this title; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3D2E4623FA8343A0A8A7D74EAAEBDD40"><enum>(11)</enum><text display-inline="yes-display-inline">an action that is—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDD3CF6B5950924850A3BFC0062F9DC4CA"><enum>(A)</enum><text display-inline="yes-display-inline">an audit by a governmental unit to
determine tax liability;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID85290C2BC672468E81C52212E787DD80"><enum>(B)</enum><text display-inline="yes-display-inline">the issuance to the insurer by a
governmental unit of a notice of tax deficiency;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID9FDBEB38D55743EB9EC731603F4F5ECE"><enum>(C)</enum><text display-inline="yes-display-inline">a demand for tax returns; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE52410CF9EB2455C9561D98755D26613"><enum>(D)</enum><text display-inline="yes-display-inline">the making of an assessment for any tax and
issuance of a notice and demand for payment of such an assessment.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID5BD5AA193F144465919997BD2CDC0C79"><enum>(d)</enum><header>Length of
Stay</header><text display-inline="yes-display-inline">Except as provided in
subsection (f)—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID8CF6749F1FCA4F99A1FBB487ABF9936A"><enum>(1)</enum><text display-inline="yes-display-inline">the stay of an act against property of the
insurer under subsection (a) continues until such property is no longer
property of the receivership; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDECA7DA773A2B4D4BB4DAD92F73D43863"><enum>(2)</enum><text display-inline="yes-display-inline">the stay of any other act under subsection
(a) continues until the receivership is terminated.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID2B6D7F90C7FA483793BEED122279B07F"><enum>(e)</enum><header>Other
Exceptions</header><text display-inline="yes-display-inline">Notwithstanding
the provisions of subsection (a)—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDAB928F8105FD4DCE8E982A054941DB91"><enum>(1)</enum><text display-inline="yes-display-inline">claims against the National Insurer that
arose before the commencement of the receivership proceeding under this title
may be asserted as a counterclaim in any judicial, administrative, or other
action or proceeding initiated by or on behalf of the receiver against the
holder of such claims; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFAB9AD55FC22425AA9B6F110A8922405"><enum>(2)</enum><text display-inline="yes-display-inline">a party against whom a judicial,
administrative, or other action or proceeding is initiated by or on behalf of
the receiver may assert and enforce any contractual right the party may have to
require arbitration of any dispute under any law.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID9F772FDEA9D0418CB4881BBBA4D7D5C8"><enum>(f)</enum><header>Relief From
Stay</header><text display-inline="yes-display-inline">On request of a party in
interest and after notice and such hearing as the Commissioner determines
appropriate, the Commissioner may grant relief from the stay in effect pursuant
to subsection (a), such as by terminating, annulling, modifying, or
conditioning such stay—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID4FE81C82856841F89073F7C147A7633D"><enum>(1)</enum><text display-inline="yes-display-inline">for cause; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID93BB921471F448AF99045BC9676CA0AF"><enum>(2)</enum><text display-inline="yes-display-inline">with respect to a stay of an action against
property under subsection (a) if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID73FAD23B4131484995634E9E9757D35D"><enum>(A)</enum><text display-inline="yes-display-inline">the National Insurer does not have an
equity in such property; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID52B99FC8B90548729A797B20DD41DBC2"><enum>(B)</enum><text display-inline="yes-display-inline">such property is not necessary to an
effective plan.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID08CFF35A9AA14D5AA81B3B9783281FC7"><enum>(g)</enum><header>Burden of
Proof</header><text display-inline="yes-display-inline">In any hearing under
subsection (a), the party seeking relief from the stay shall have the burden of
proof on each issue that must be established by clear and convincing
evidence.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID5B13871F2988494EACAA4F67DE03D7C2"><enum>(h)</enum><header>Damages for
Willful Violation of Stay</header><text display-inline="yes-display-inline">The
estate of a National Insurer that is injured by any willful violation of a stay
provided by this section shall be entitled to actual damages, including costs
and attorneys’ fees, and, in appropriate circumstances, the Court may impose
additional sanctions.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDE48E730C8DE742A1BFC9DD9CD4068E47" section-type="subsequent-section"><enum>1503.</enum><header>Powers and
duties</header>
<subsection commented="no" display-inline="no-display-inline" id="ID89C8B40B066C47DE8A960CB3B2B14549"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">The receiver shall
have all the powers of the directors, officers, and managers of the insurer,
whose authority shall be suspended, except as they are redelegated by the
receiver or liquidator.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDD8F62F9B7B0F46E89D0749D59CCFE6F4"><enum>(b)</enum><header>Specific
Powers</header><text display-inline="yes-display-inline">In addition to those
powers otherwise provided by this title, the receiver or liquidator shall have
the power to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDE1F5160038DA4B2CAFFC384F577A0B7F"><enum>(1)</enum><text display-inline="yes-display-inline">use, sell, or lease property of the
insurer;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDABE5CA94DCD4279A340A6914F181A0B"><enum>(2)</enum><text display-inline="yes-display-inline">after notice and a hearing, borrow money on
the security of the National Insurer’s assets, borrow money without security,
and execute and deliver all documents necessary to such transaction for the
purpose of facilitating the receiver;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3F42059CA3C3471484B710538D936671"><enum>(3)</enum><text display-inline="yes-display-inline">collect all debts and money due and claims
belonging to the National Insurer, wherever located;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5AC12F6458A84E1696DE83F143658725"><enum>(4)</enum><text display-inline="yes-display-inline">institute and pursue legal actions and to
continue any pending action, in any jurisdiction;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID55948071418A4C378BA5757C00B7C49B"><enum>(5)</enum><text display-inline="yes-display-inline">suspend, limit, or permit insurance policy
withdrawals in connection with insurance policies;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCB8B397F015240209E4F43F1F204CFED"><enum>(6)</enum><text display-inline="yes-display-inline">do other acts as are necessary or expedient
to collect, marshal, or protect the assets or property, including the power to
sell, compound, compromise, or assign debts for purposes of collection upon
such terms and conditions as the receiver considers best and that are
consistent with this title;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6716BA98E91B455EB63E80C9F8DBB043"><enum>(7)</enum><text display-inline="yes-display-inline">enter into contracts necessary to carry out
the order of rehabilitation or liquidation;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7160E8E6BC034F3E8E9C25AABEC3F846"><enum>(8)</enum><text display-inline="yes-display-inline">hold hearings, subpoena witnesses to compel
their attendance, administer oaths, examine a person under oath, and compel a
person to subscribe to the person’s testimony after it has been correctly
reduced to writing and, in connection with these powers, require the production
of books, papers, records, or other documents that the receiver considers
relevant to the inquiry; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8B793AB821254D60A6A5AE29D9B7E277"><enum>(9)</enum><text display-inline="yes-display-inline">exercise all powers held or conferred upon
receivers by the laws of the United States that are not inconsistent with the
provisions of this title.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID4D2EB0C17E2A42DDA0378F3F5B0B7E63" section-type="subsequent-section"><enum>1504.</enum><header>Rulemaking</header>
<subsection commented="no" display-inline="no-display-inline" id="IDF8106E0B84824A81BEF15B3737B81152"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">The Commissioner
shall establish, by regulation, standards and procedures for receivership
proceedings commenced under this title, including procedures and priorities for
the allowance or disallowance of claims, standards for the treatment of
reinsurance, and such other matters as the Commissioner determines
appropriate.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDA9DC48719E304B9E9EDCFACE91F2BD99"><enum>(b)</enum><header>Model</header><text display-inline="yes-display-inline">The regulations issued by the Commissioner
under subsection (a) shall be based upon the Uniform Receivership Law adopted
by the Interstate Insurance Receivership Compact Commission in September
1998.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID1B0660D33FBE49AC88C01FF7DDC7B049" section-type="subsequent-section"><enum>1505.</enum><header>Judicial
review</header>
<subsection commented="no" display-inline="no-display-inline" id="IDB128B297529C4EE8885FBECAA5BA20CB"><enum>(a)</enum><header>National
Insurers</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDD5CEB0982AD745A28AE4EE7F4422B510"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Whenever the Office
is appointed as a receiver for a National Insurer, the National Insurer may,
within 30 days of such appointment, bring an action in the United States
District Court for the judicial district in which the principal place of
business of such insurer is located, or in the United States District Court for
the District of Columbia, for an order requiring the Office to remove itself as
receiver.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF203ACD46A004B669E6CBC1882F62885"><enum>(2)</enum><header>Review</header><text display-inline="yes-display-inline">Upon the filing of an action under
paragraph (1), the court shall, upon the merits dismiss such action or direct
the Office to remove itself as such receiver.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDC1D63B2E11614A569402083A2A04113D"><enum>(b)</enum><header>Claimants</header><text display-inline="yes-display-inline">If the Office, acting as a receiver,
disallows a claim against the receivership, a claimant may, within 60 days of
the notice of disallowance, bring an action in the United States District Court
for the judicial district in which the principal place of business of the
National Insurer is located, or in the United States District Court for the
District of Columbia, to challenge the disallowance.</text>
</subsection></section><enum>VI</enum><header>INSOLVENCY PROTECTION</header>
<section commented="no" display-inline="no-display-inline" id="IDF95B2E27C4ED4AB6BF09280715DD7349" section-type="subsequent-section"><enum>1601.</enum><header>Participation in
guaranty associations</header>
<subsection commented="no" display-inline="no-display-inline" id="ID6D1C07E8021948AD958173AB26DBB55C"><enum>(a)</enum><header>Participation
in State Guaranty Associations</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID177b061ac1204024a7e38933a2d3569d"><enum>(1)</enum><header>National life
insurers</header><text display-inline="yes-display-inline">A National Life
Insurer shall become and continue as a member of the life and health guaranty
association in each qualified State in which the National Insurer is doing
business.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID474bb4c3a041415d9b3c02ca57918301"><enum>(2)</enum><header>National
property/casualty insurers</header><text display-inline="yes-display-inline">A
National Property/Casualty Insurer shall become and continue as a member of the
property/casualty guaranty association in each qualified State in which the
National Insurer is doing business.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4056ECF984BB4C27B16B0294C3804858"><enum>(3)</enum><header>Assessments</header><text display-inline="yes-display-inline">Associations in qualified States shall be
authorized to levy assessments on National Insurers doing business in such
States. National Insurers shall be obligated to pay such assessments to the
extent that they are levied on the same terms that State insurers are obligated
to pay assessments to the association under applicable State law.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA0C3CE805EC846BEA6C364377B6DAC5C"><enum>(b)</enum><header>Participation
in National Insurance Guaranty Association</header><text display-inline="yes-display-inline">A National Insurer that does business in 1
or more nonqualified States shall become and continue to be a member of the
National Insurance Guaranty Corporation.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDB8A62574E45B49508CAADFA6192142E4" section-type="subsequent-section"><enum>1602.</enum><header>Qualified and
nonqualified State</header>
<subsection commented="no" display-inline="no-display-inline" id="IDb4f3ed068e714da8a02fd63ba824da68"><enum>(a)</enum><header>Qualified State
defined</header><text display-inline="yes-display-inline">In this title, the
term <term>qualified State</term> means a State in which the Commissioner has
determined that, pursuant to State law—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID7fa92411c8754dad94dab276166643db"><enum>(1)</enum><text display-inline="yes-display-inline">the State has established—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID165a4a311700454da85466d82d638262"><enum>(A)</enum><text display-inline="yes-display-inline">an association that admits as members both
State life insurers and National Life Insurers, and that, in the event a member
is placed into receivership for purposes of rehabilitation or liquidation, may
provide benefits to the policyholders of such National Life Insurers that are
not less than the benefits provided to policyholders of State life insurers;
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDdf031705fe7f447487cc0e4fb9507765"><enum>(B)</enum><text display-inline="yes-display-inline">an association that admits as members both
State property/casualty insurers and National Property/Casualty Insurers, and
that, in the event a member is placed into receivership for purposes of
liquidation, may provide coverage to policyholders of such National
Property/Casualty Insurers that is not less than the coverage provided to
policyholders of State property/casualty insurers;</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7a5886918c16405ba2017b59fdf857f3"><enum>(2)</enum><text display-inline="yes-display-inline">the boards of directors of the associations
described in paragraph (1) are required to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID241c7002580e48dab5ff51c6b433e3ce"><enum>(A)</enum><text display-inline="yes-display-inline">be representative of insurers on a basis
that does not unfairly discriminate against National Insurers; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0b41e1905f2744a4a0d8eb606288099b"><enum>(B)</enum><text display-inline="yes-display-inline">be fairly representative of insurers of
different sizes and lines of insurance written; and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID24b35810a47b40719d8a3612c367126f"><enum>(3)</enum><text display-inline="yes-display-inline">the bylaws of the associations described in
paragraph (1) provide that if either such association fails to act within a
reasonable period of time with respect to a National Insurer, the Commissioner
shall have the powers and the duties of the association under the laws of the
State that established the association with respect to the National
Insurer.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID69a919c453b04f50a5e5ef7b49ceb388"><enum>(b)</enum><header>Determination</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID20fb59c5f1df4f8b81f779b40178efa4"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner
shall establish, by regulation, a procedure for determining whether a State is
a qualified State.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID35c419befb784a3199cf195db9a57795"><enum>(2)</enum><header>Certification</header><text display-inline="yes-display-inline">The Commissioner shall determine that a
State is a qualified State upon receipt of a—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID44c492d2016942109c3cd76dd824537e"><enum>(A)</enum><text display-inline="yes-display-inline">written request that is jointly filed by
the life and health guaranty association and the property/casualty guaranty
association established by a State; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID16342f119e8b4386a9f97fbbfe6fbe6b"><enum>(B)</enum><text display-inline="yes-display-inline">certification by the State’s insurance
regulator that such State and such associations satisfy the terms of the
definition of a qualified State, as set forth in subsection (a).</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID611716e85018412f83d4c91ceb0903bc"><enum>(c)</enum><header>Revocation</header><text display-inline="yes-display-inline">The Commissioner shall revoke a
determination that a State is a qualified State if the Commissioner determines
that a State is a nonqualified State. In such event, the Commissioner shall
provide a written notice of the revocation to the affected associations and the
relevant State insurance regulator, and the associations or the State insurance
regulator may seek a review of the revocation under terms of section
1706.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID3bb5dddbab9a4ec6b42724dc9528714c"><enum>(d)</enum><header>List of
qualified and nonqualified States</header><text display-inline="yes-display-inline">Not later than 6 months after the initial
appointment and confirmation of the Commissioner, the Commissioner shall
publish, in the Federal Register, a list of qualified and nonqualified
States.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID4e6e1248bb394fc4952709a8a49bf8bd"><enum>(e)</enum><header>Temporary
status</header><text display-inline="yes-display-inline">In the event that a
State ceases to satisfy the conditions set forth in subparagraph (A) or (B) of
subsection (a)(1) because the Commissioner increases the benefits or coverage
provided by the Corporation pursuant to section 1604 or 1605, such State shall
continue to be classified as a qualified State for a period of 24 months
following the date of the Commissioner’s action to increase the benefits or
coverage.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID8acd6bc920a0485686e00cf38a5407f7"><enum>(f)</enum><header>Nonqualified
State</header><text display-inline="yes-display-inline">For purposes of this
title, any State that is not a qualified State is a <quote>non-qualified
State.</quote></text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID9B54B674B221476A98D28ACC3D75E9D1" section-type="subsequent-section"><enum>1603.</enum><header>Establishment of
the National Insurance Guaranty Corporation</header>
<subsection commented="no" display-inline="no-display-inline" id="ID5CDD1F23BC5048F9B721496288C66BD6"><enum>(a)</enum><header>Establishment
of the Corporation</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID7118199E003A424CA00960C34C2EBD73"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">There is established
the National Insurance Guaranty Corporation.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD5E18959E7944F7BBA3B5E149A86B31F"><enum>(2)</enum><header>Nonprofit and
succession</header><text display-inline="yes-display-inline">The Corporation
shall be a nonprofit corporation and shall have succession until dissolved by
an Act of Congress.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID23D1029F78B440C78FA143ABC0F174B2"><enum>(3)</enum><header>Application of
district of columbia nonprofit corporation act</header><text display-inline="yes-display-inline">The Corporation shall, except as otherwise
provided in this title, be subject to, and have all the powers conferred upon a
nonprofit corporation by the District of <act-name parsable-cite="CNCA">Columbia Nonprofit Corporation Act</act-name> (D.C. Code,
section 29–301.01 et seq.).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDD9A7A04064F54B4DB9CA2EB4BD276A42"><enum>(b)</enum><header>Membership in
the Corporation</header><text display-inline="yes-display-inline">The
membership of the Corporation shall consist of all National Insurers and State
insurers doing business in 1 or more nonqualified State.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDF74FAB6047FD4717890308C27BBF1E0A"><enum>(c)</enum><header>Corporate
Governance</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID4BDD604E51F3495FAF10A61A2D0AAA04"><enum>(1)</enum><header>Governing
body</header><text display-inline="yes-display-inline">The board of directors
of the Corporation shall be the governing body of the Corporation and shall be
vested with all powers necessary for the management and administration of the
affairs of the Corporation and the promotion of the Corporation’s purposes as
authorized by this Act. The board of directors’ authority shall be specified in
the bylaws of the Corporation.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7AEA0AE65786402FA8CEF864F180423D"><enum>(2)</enum><header>Election or
appointment</header><text display-inline="yes-display-inline">The initial board
of directors of the Corporation shall be elected by the membership of the
Corporation, provided that if the membership fails to elect the initial board
of the Corporation on or before the chartering and licensing commencement date
for National Insurers that is described in section 1210, then the initial board
shall be appointed by the Commissioner. Membership on the board of directors
shall be fairly representative of members of differing size and lines of
business written.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID266C994BB037460D92B06B59BACAD856"><enum>(3)</enum><header>Initial bylaws
and rules</header><text display-inline="yes-display-inline">The Commissioner
shall prescribe the initial bylaws and rules governing the Corporation, which
shall set forth the composition of the board of directors, the term of board
members, filling of board vacancies, board compensation, election of officers
and procedures to call board meetings, and all matters necessary for the
governance of the Corporation not addressed by the District of
<act-name parsable-cite="CNCA">Columbia Nonprofit Corporation Act</act-name>
(D.C. Code, section 29–301.01 et seq.).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID22AE1D4E8AF145C4855B491985DF372F"><enum>(4)</enum><header>Amendments to
bylaws and rules</header><text display-inline="yes-display-inline">An amendment
to the bylaws and rules of the Corporation following the establishment of the
initial bylaws and rules as provided in paragraph (3) shall be adopted by the
board of directors of the Corporation following the approval of the amendment
by the Commissioner.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDBF477E8148354B2BA313914CA5EC8109"><enum>(d)</enum><header>Relationship of
Corporation to the Federal Government</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID7BFD9DB6B5D54663BD0D9762B1131EB9"><enum>(1)</enum><header>Supervision and
oversight</header><text display-inline="yes-display-inline">The Corporation
shall be subject to supervision and oversight by the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE2EBCAF3F6764BD5814C910BD0F64CD3"><enum>(2)</enum><header>Not an agency
or instrumentality of the Federal Government</header><text display-inline="yes-display-inline">The Corporation shall not be an agency or
instrumentality of the United States Government.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE156A69F7BDC4C149ED10FC16E936A6B"><enum>(3)</enum><header>Full faith and
credit</header><text display-inline="yes-display-inline">The obligations of the
Corporation shall not be backed, directly or indirectly, by the full faith and
credit of the United States. The Corporation shall receive no financial
assistance from or have any authority to borrow from the United States.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID599BC80CAA52460D9CB6EBE6B41F2434"><enum>(4)</enum><header>Funds not
included in the Federal budget</header><text display-inline="yes-display-inline">Funds held by or due to the Corporation
shall not be included in the budget of the United States, nor may the United
States borrow or pledge such funds.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID4B94F2D285A04A0E81E3021C916DA055"><enum>(e)</enum><header>Contracting
With Person To Administer Benefits</header><text display-inline="yes-display-inline">The Corporation may contract, with the
approval of the Commissioner, with another person to administer the benefits to
be provided by the Corporation under this title.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDe8bf893b7fe44bd9af9228f28ffa2725"><enum>(f)</enum><header>Accounts for
administration and assessments</header><text display-inline="yes-display-inline">For purposes of administration and
assessments, the Corporation shall establish and separately maintain 5 accounts
as follows:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID9f00ed4bb3e64d5e90cab3c145c20108"><enum>(1)</enum><text display-inline="yes-display-inline">A life insurance account.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDdda69ee3866a41eba6f629a96fca8fa0"><enum>(2)</enum><text display-inline="yes-display-inline">An annuity account.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDc4ab13c480284951bd431c59a3a45b2e"><enum>(3)</enum><text display-inline="yes-display-inline">A workers’ compensation account.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5b53ba7fd7254d91bf82fb1877ca419c"><enum>(4)</enum><text display-inline="yes-display-inline">An automobile insurance account.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDb67b0875615049b887ae92251e611546"><enum>(5)</enum><text display-inline="yes-display-inline">An account for all other lines of
property/casualty insurance to which this title applies.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID1E780490F5BC4BB6A99D47D139F983FA" section-type="subsequent-section"><enum>1604.</enum><header>Benefits for policy
holders of National Life Insurers</header>
<subsection commented="no" display-inline="no-display-inline" id="IDe6826200691a4caf89ad40c0c02c5937"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to the
provisions of this title, the Corporation shall provide benefits to the
policyholders of a National Life Insurer that is doing business in a
nonqualified State and is placed into receivership by the Commissioner for
purposes of rehabilitation or liquidation.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID5F12A292B0D144B4B5B86E63AD702F6B"><enum>(b)</enum><header>Covered
Persons</header><text display-inline="yes-display-inline">Benefits shall be
made available as follows:</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDFEB8E1742B0C4FAF8605712A14187350"><enum>(1)</enum><text display-inline="yes-display-inline">To persons who, regardless of where the
persons reside, are the beneficiaries, assignees, or payees of the persons
covered under paragraph (2).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2B799CFB6E8A451497C7865EA532A4B8"><enum>(2)</enum><text display-inline="yes-display-inline">To persons who are owners of or certificate
holders under the insurance policies (other than unallocated annuity contracts,
and structured settlement annuities) and in each case who are residents of a
nonqualified State.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7D85E10820AA4E5181718EA9109EFCA5"><enum>(3)</enum><text display-inline="yes-display-inline">This title shall not provide coverage to a
person who is a payee (or beneficiary) of a policyowner resident of a
nonqualified State, if the payee (or beneficiary) is afforded any coverage by a
qualified State’s association.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID56BBBFFC57E4475496E735422188AE7F"><enum>(4)</enum><text display-inline="yes-display-inline">This title is intended to provide coverage
to persons who are residents of a nonqualified State and, in special
circumstances, to persons who are not a resident in a nonqualified State. In
order to avoid duplicate coverage, if a person who would otherwise receive
coverage under this title is provided coverage under the laws of any State
other than the non-qualified State, the person shall not be provided coverage
under this title. In determining the application of the provisions of this
paragraph in situations where a person could be covered by the association of
more than 1 qualifying or nonqualifying State, whether as a policyowner, payee,
beneficiary, or assignee, this title shall be construed in conjunction with the
laws of such States to result in coverage by only 1 association.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID46091136c3e54f37994c60b4bcadd7dc"><enum>(c)</enum><header>Insurance
policies covered and coverage limits</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID0c13385f6bd14244b0fc94bb2def6718"><enum>(1)</enum><header>Regulation</header><text display-inline="yes-display-inline">The Commissioner shall establish, by
regulation, the lines of insurance covered, the scope of coverage, defenses,
exclusions, and the coverage limits on benefits for policyholders.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8bc792bda2834eafb1a5962be962b996"><enum>(2)</enum><header>NAIC
model</header><text display-inline="yes-display-inline">The regulations
described in paragraph (1) shall be based on the NAIC’s <quote>Life and Health
Insurance Guaranty Association Model Act</quote> in effect on the date of
enactment of this Act.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDe1d41a6c94ba4b72908700c0cce0dbf8"><enum>(3)</enum><header>NAIC
amendments</header><text display-inline="yes-display-inline">The Commissioner
may, by regulation, specify that any amendment made by the NAIC to the lines of
insurance covered in its <quote>Life and Health Insurance Guaranty Association
Model Act</quote> or the limits on the coverage for such policies shall apply,
in whole or in part, to the Corporation.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8e9aef0a589a47a4a353995b3c628695"><enum>(4)</enum><header>Adjustments by
the commissioner</header><text display-inline="yes-display-inline">The
Commissioner may, by regulation, modify the lines of insurance covered by this
section or increase the coverage limits for such insurance, as the Commissioner
determines appropriate.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDbcafe0f9c7374576bc218a3a1285ba6f"><enum>(5)</enum><header>Payment of
benefits</header><text display-inline="yes-display-inline">Payments for
benefits under this section shall be made from the life insurance account or
the annuity account, as appropriate.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDee4214ef9c914b8daa66a7a9a4be394c" section-type="subsequent-section"><enum>1605.</enum><header>Claims covered for
policyholders of National Property/Casualty Insurers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID875652a615564194a58589049cd1d679"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to the
provisions of this title, the Corporation shall provide coverage for claims by
policyholders of a National Property/Casualty Insurer that is doing business in
a non-qualified State and is placed into receivership by the Commissioner for
purposes of liquidation.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID13fd273d5b0248ebbefcf9b0cdbef056"><enum>(b)</enum><header>Insurance
policies covered and coverage limits</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDb520f87d0cf940b0b02d7f1e23357c10"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commissioner
shall specify, by regulation, the lines of property/casualty insurance covered,
the scope of coverage, defenses, exclusions, and the limits on covered
claims.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3d0811f8a6aa446a9e5231427e2b2059"><enum>(2)</enum><header>NAIC
model</header><text display-inline="yes-display-inline">The regulation
described in paragraph (1) shall be based upon the NAIC’s
<quote>Property/Casualty Guaranty Association Model Act</quote> in effect on
the date of enactment of this Act.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID804a41b775f44cc486d7af17af468a71"><enum>(3)</enum><header>NAIC
amendments</header><text display-inline="yes-display-inline">The Commissioner
may, by regulation, specify that any amendment made by the NAIC to the lines of
insurance covered or the coverage limits in the NAIC’s <quote>Property/Casualty
Guaranty Association Model Act</quote> shall apply, in whole or in part, to
coverage provided by the Corporation.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9647704ac08e41f681eb5555655f7bc7"><enum>(4)</enum><header>Adjustments by
the commissioner</header><text display-inline="yes-display-inline">The
Commissioner may, by regulation, modify the lines of insurance covered or
increase the coverage levels described in this subsection, as the Commissioner
determines appropriate.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID77bbbe83093a4d978c7da815d7666be3"><enum>(c)</enum><header>Payment of
benefits</header><text display-inline="yes-display-inline">Payments for claims
under this section shall be made from the property and casualty account
established pursuant to section 1603.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID71FFC63BB1944009B7AB02AD007A70F0" section-type="subsequent-section"><enum>1606.</enum><header>Powers and duties
of the Corporation</header>
<subsection commented="no" display-inline="no-display-inline" id="ID4895eff1db2a4f218d99f4f891d10eff"><enum>(a)</enum><header>Powers and
duties related to national life insurers</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID28874db3b99c49d299972fa456c9e10e"><enum>(1)</enum><header>National
insurers subject to rehabilitation</header><text display-inline="yes-display-inline">Subject to the provisions of this title, if
a National Life Insurer is placed into receivership for purposes of
rehabilitation, the Corporation may, in its discretion, and subject to any
conditions imposed by the Corporation that do not impair the contractual
obligations of the National Life Insurer, and that are approved by the
Commissioner, do one of the following:</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDe877eb34ca784d2bbabf58e9ee70da8b"><enum>(A)</enum><text display-inline="yes-display-inline">Guarantee, assume, or reinsure, or cause to
be guaranteed, assumed or reinsured, any or all of the insurance policies of
the National Life Insurer.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID45c9cdd2390145f8ac448d01b8339e1d"><enum>(B)</enum><text display-inline="yes-display-inline">Provide such monies, pledges, loans, notes,
guarantees or other means as are proper to effectuate subparagraph (A) and
assure payment of the contractual obligations of the National Life Insurer
pending action under subparagraph (A).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID25941f75a39f46538f4e93d926f12597"><enum>(2)</enum><header>National life
insurers subject to liquidation</header><text display-inline="yes-display-inline">Subject to the provisions of this title, if
a National Life Insurer is placed into receivership for purposes of
liquidation, the Corporation shall, in its discretion, take either the actions
specified in subparagraph (A) or the actions specified in subparagraph
(B).</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDfc800a2965334f7ebddc51d1f5e0fa57"><enum>(A)</enum><header>Assumption of
the obligations of the national life insurer</header><text display-inline="yes-display-inline">The Corporation shall—</text>
<clause commented="no" display-inline="no-display-inline" id="ID4a66e412af534ed294992f12eeec0b48"><enum>(i)</enum><subclause commented="no" display-inline="yes-display-inline" id="id41FFD454CBB44CE18C6C8D0102CAAA78"><enum>(I)</enum><text display-inline="yes-display-inline">guarantee, assume or reinsure, or cause to
be guaranteed, assumed or reinsured, the insurance policies of the National
Life Insurer; or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idAF1C8A13766F46F7B6D70F4BBB93AC2B" indent="up1"><enum>(II)</enum><text display-inline="yes-display-inline">assure payment of the contractual
obligations of the National Life Insurer; and</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID12977e14f5bf493c8b943a42b4613826"><enum>(ii)</enum><text display-inline="yes-display-inline">provide monies, pledges, loans, notes,
guarantees, or other means reasonably necessary to discharge the duties imposed
by this section.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID90bcb196c55548e9bf630ad010ed297c"><enum>(B)</enum><header>Provision of
benefits to policyholders</header><text display-inline="yes-display-inline">The
Corporation shall provide benefits in accordance with the following
provisions:</text>
<clause commented="no" display-inline="no-display-inline" id="ID00419463e3f34128b4195e9bd468330d"><enum>(i)</enum><header>Assure payment
of benefits</header><text display-inline="yes-display-inline">With respect to
life insurance policies and annuities, the Corporation shall assure payment of
benefits for premiums identical to the premiums and benefits (except for terms
of conversion and renewability) that would have been payable under the
insurance policies of the National Life Insurer, for claims incurred—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID9382275a71ab4665906ce717562d10df"><enum>(I)</enum><text display-inline="yes-display-inline">with respect to group insurance policies,
not later than the earlier of the next renewal date under those insurance
policies or 45 days, but in no event less than 30 days, after the date on which
the Corporation becomes obligated under this section with respect to such
policies; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDec315ca115224ea4b60fd63a0b77a22b"><enum>(II)</enum><text display-inline="yes-display-inline">with respect to nongroup insurance
policies, not later than the earlier of the next renewal date (if any) under
the insurance policies or 1 year, but in no event less than 30 days, from the
date on which the Corporation becomes obligated under this section with respect
to such policies.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID52d5040500574c98984ae7cbb2e83e7b"><enum>(ii)</enum><header>Notice</header><text display-inline="yes-display-inline">The Corporation shall make diligent efforts
to provide all known insured or annuitants (for non-group insurance policies),
or group policyholders with respect to group insurance policies, 30 days notice
of the termination (pursuant to clause (i)) of the benefits provided.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID0e9cd9b7a40d4adbb7b78637ab99deb0"><enum>(iii)</enum><header>Substitute
coverage</header><text display-inline="yes-display-inline">With respect to
nongroup insurance policies covered by this title, the Corporation shall make
available to each known insured or annuitant and to each individual formerly
insured or formerly an annuitant under a group policy who is not eligible for
replacement group coverage, substitute coverage on an individual basis in
accordance with the provisions of clause (iv), if the insured or annuitants had
a right under law or the terminated policy or annuity to convert coverage to
individual coverage or to continue an individual policy or annuity in force
until a specified age or for a specified time, during which the National Life
Insurer had no right unilaterally to make changes in any provision of the
policy or had a right only to make changes in premium by class.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID16acb067948c4fcc97d97b8d0eec4044"><enum>(iv)</enum><header>Alternative or
reissued policies</header><text display-inline="yes-display-inline">In
providing the substitute coverage required under clause (iii), the Corporation
may offer either to reissue the terminated coverage or to issue an alternative
policy. Alternative or reissued insurance policies shall be offered without
requiring evidence of insurability, and shall not provide for any waiting
period or exclusion that would not have applied under the terminated policy.
The Corporation may reinsure any alternative or reissued policy.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4f19fdbf94514c31993ccda8bb5c2c0a"><enum>(v)</enum><header>Alternative
insurance policies</header><text display-inline="yes-display-inline">Alternative policies adopted or issued by
the Corporation shall be subject to approval by the Commissioner.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDf93cfa1575454f4cb64a5e04e36a08d8"><enum>(vi)</enum><header>Termination of
benefits</header><text display-inline="yes-display-inline">Benefits under this
title with respect to coverage under any policy of an insolvent National Life
Insurer or under any reissued or alternative policy shall cease on the date the
coverage or policy is replaced by another similar policy by the policyholder,
the insured, or the Corporation.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2b5f8f8a95f54fc18f7e56334ad0d58b"><enum>(3)</enum><header>Treatment of
premiums</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID78cdf58ee81a44e09997ce5ea3838209"><enum>(A)</enum><header>Nonpayment of
premiums</header><text display-inline="yes-display-inline">The nonpayment of
premiums within 31 days after the date required under the terms of any
guaranteed, assumed, alternative, or reissued policy or substitute coverage
provided pursuant to paragraphs (1) or (2) shall terminate benefits under this
title with respect to the policy, except with respect to any claims incurred or
any net cash surrender value that may be due in accordance with the provisions
of this title.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID668fdc1d4ad74098a889086e0e956669"><enum>(B)</enum><header>Premiums due
after liquidation initiated</header><text display-inline="yes-display-inline">Premiums due for coverage under covered
policies after the Commissioner has initiated the liquidation of a National
Life Insurer shall belong to and be payable at the direction of the
Corporation, and the Corporation shall be liable for unearned premiums due to
the policyholders under the covered policies.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDb45d049d9bf247d7b5ec112583311370"><enum>(4)</enum><header>Permanent and
temporary liens</header><text display-inline="yes-display-inline">In carrying
out the duties under paragraph (2), the Corporation may, subject to the
approval of the Commissioner—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID160b86284d2644889774a79147578e46"><enum>(A)</enum><text display-inline="yes-display-inline">impose permanent policy liens in connection
with a guarantee, assumption or reinsurance contract, if the Corporation finds
that the amounts which can be assessed under this title are less than the
amounts needed to assure full and prompt performance of the protections
provided under this title, or that the economic or financial conditions as they
affect the insurance industry are sufficiently adverse to render the imposition
of such permanent policy liens to be in the public interest; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDe48a3bf6c648425fba7327d6f2e1aaa0"><enum>(B)</enum><text display-inline="yes-display-inline">impose temporary moratoriums or liens on
payments of cash values and policy loans, or any other right to withdraw funds
on payments of cash values and policy loans, or any other right to withdraw
funds held in conjunction with insurance policies, in addition to any
contractual provisions for deferral of cash or policy loan value.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID527be1c1f54a49a2bed9aa42356911d2"><enum>(5)</enum><header>Indexed
insurance policies</header><text display-inline="yes-display-inline">In
carrying out its duties in connection with paragraphs (1) or (2), the
Corporation may, subject to the approval of the Commissioner, issue substitute
coverage for an insurance policy that provides an interest rate, crediting
rate, or similar factor determined by use of an index or other external
reference stated in the insurance policy employed in calculating returns or
changes in value by issuing an alternative insurance policy in accordance with
the following provisions:</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDd3250fd067604d2f9f2d80c9993b1bcf"><enum>(A)</enum><text display-inline="yes-display-inline">In lieu of the index or other external
reference provided for in the original insurance policy, the alternative
insurance policy provides for—</text>
<clause commented="no" display-inline="no-display-inline" id="IDa9b8882949874881bc4d8ada45881ea4"><enum>(i)</enum><text display-inline="yes-display-inline">a fixed interest rate;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4e56a2c626ad4b0e9cd2eb598ccfbf3d"><enum>(ii)</enum><text display-inline="yes-display-inline">payment of dividends with minimum
guarantees; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID198437f693c04eeab133e563832a859e"><enum>(iii)</enum><text display-inline="yes-display-inline">a different method for calculating interest
or changes in value.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDb998974deb1a42b0aa9a5d1567d3ef11"><enum>(B)</enum><text display-inline="yes-display-inline">There shall be no requirement for evidence
of insurability, waiting period, or other exclusion that would not have applied
under the replaced insurance policy.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDf1cd7b65a9564d049588261374077bb5"><enum>(C)</enum><text display-inline="yes-display-inline">The alternative insurance policy is
substantially similar to the replaced insurance policy in all other material
terms.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID7511fc89945748a585e830f642c73470"><enum>(b)</enum><header>Powers and
duties related to national property/Casualty insurers</header><text display-inline="yes-display-inline">Subject to the terms of this title, when a
National Property/Casualty Insurer is placed into receivership for purposes of
liquidation, the Corporation shall exercise the powers and duties specified in
this subsection.</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID0ce1de4629964cf78c3aebf9f0cd6f14"><enum>(1)</enum><header>Assume
obligations</header><text display-inline="yes-display-inline">The Corporation
shall be deemed the insurer to the extent of its obligation on covered claims
and to that extent shall have all rights, duties, and obligations of the
insolvent National Property/Casualty Insurer as if such Insurer had not become
insolvent, including but not limited to the right to pursue and retain salvage
and subrogation recoverable on covered claims obligations to the extent paid by
the Corporation.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID90abbcd0a624488f99f7092c49d43c29"><enum>(2)</enum><header>Investigate and
pay claims</header><text display-inline="yes-display-inline">The Corporation
shall investigate claims brought against the Corporation and adjust,
compromise, settle and pay covered claims to the extent of the Corporation’s
obligations. The Corporation shall pay claims in any order that it determines
reasonable, including the payment of claims as they are received from the
claimants or in groups or categories of claims. The Corporation may review
settlements, releases and adjustments to which the insolvent National
Property/Casualty Insurer or its insured were parties to determine the extent
to which the settlements, releases and judgments may be properly contested. The
Corporation shall have the right to appoint or substitute and to direct legal
counsel retained under liability insurance policies for the defense of covered
claims.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID55660B129D534B3884D352078012FAD8"><enum>(c)</enum><header>Other
Corporation Powers</header><text display-inline="yes-display-inline">In
addition to the rights and powers provided elsewhere in this title, the
Corporation may—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDE34A0F5D1475495ABA84648A81123753"><enum>(1)</enum><text display-inline="yes-display-inline">enter into such contracts as are necessary
or proper to carry out the provisions and purposes of this title;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID357B98D713C54C228B218991B2982E29"><enum>(2)</enum><text display-inline="yes-display-inline">sue or be sued, including taking any legal
actions necessary or proper to recover any unpaid assessments under section
1607 and to settle claims or potential claims against the Corporation;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBAC6F894FA254C8888F6AF84F737FC52"><enum>(3)</enum><text display-inline="yes-display-inline">borrow money to effect the purposes of this
title and any notes or other evidence of indebtedness of the Corporation not in
default shall be legal investments for National Insurers and may be carried as
assets;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3FFCD2F0772E42BB8F55138C7C3A0F19"><enum>(4)</enum><text display-inline="yes-display-inline">employ or retain such persons as are
necessary or appropriate to handle the financial transactions of the
Corporation and to perform such other functions as become necessary or proper
under this title;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA3A79886D84643A3A45BC366F331CA42"><enum>(5)</enum><text display-inline="yes-display-inline">take such legal action as may be necessary
or appropriate to avoid or recover payment of improper claims;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID74981A2B13C94036B9EF8E16607A8B54"><enum>(6)</enum><text display-inline="yes-display-inline">exercise, for the purposes of this title
and to the extent approved by the Commissioner, the powers of a National
Insurer, except that the Corporation may not issue insurance policies or
annuity contracts other than those issued to provide the protections under this
title;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA346DF3054884DC18C34321E734002A5"><enum>(7)</enum><text display-inline="yes-display-inline">request information from a person seeking
protection under this title in order to aid the Corporation in determining its
obligations under this title with respect to the person, and the person shall
promptly comply with the request; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF56C436E022F40BA88B391885786693D"><enum>(8)</enum><text display-inline="yes-display-inline">take other necessary or appropriate action
to discharge the Corporation’s duties and obligations under this title or to
exercise the Corporation’s powers under this title.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDB2C452917F3A4FC28EAF4A1B04129C7E" section-type="subsequent-section"><enum>1607.</enum><header>Subrogation</header>
<subsection commented="no" display-inline="no-display-inline" id="ID322813176C6042DAA29BC87A9D13D560"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">Persons receiving
benefits or payments for claims under this title shall be deemed to have
assigned their rights under, and any causes of action against any person for
losses arising under, resulting from, or otherwise relating to, their covered
policies to the Corporation, and the Corporation shall have a claim by way of
subrogation to the rights of such persons against the assets of the National
Insurer, to the extent of the benefits received or claims paid because of this
title. The Corporation shall also have the right to require an assignment to
the Corporation of such rights and cause of action by any payee, policyowner,
beneficiary, insured, or annuitant as a condition precedent to the receipt of
any right or benefits conferred by this title upon the person.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID9A39E3FB7D7A422681EEA90A5EDA3FB6"><enum>(b)</enum><header>Common Law
Rights</header><text display-inline="yes-display-inline">In addition to
subsection (a), the Corporation shall have all common law rights of subrogation
and any other equitable or legal remedy that would have been available to the
National Insurer or policyowner, beneficiary, or payee of an insurance policy
with respect to the policy.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID302BA53F161946C7BC0808A2EE9A56BD"><enum>(c)</enum><header>Priority</header><text display-inline="yes-display-inline">The priority of the subrogation rights of
the Corporation against the assets of a National Insurer shall be governed by
the regulations issued by the Commissioner pursuant to section 1504.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID78E98CC344BE4A97A26C27CA8A37BDE4"><enum>(d)</enum><header>Result if Found
Invalid or Ineffective</header><text display-inline="yes-display-inline">If the
preceding provisions of this section are invalid or ineffective with respect to
any person or claim for any reason, the amount payable under this title with
respect to the related benefits or payments under this title shall be reduced
by the amount realized by any other person with respect to the person or claim
that is attributable to the insurance policies (or portion of the insurance
policies) covered by this title.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDAA8A850E2B324B7ABD42C5080ACE412D"><enum>(e)</enum><header>Payment of
Portion</header><text display-inline="yes-display-inline">If benefits or
payments have been provided under this title with respect to a covered
obligation and a person recovers amounts as to which the Corporation has rights
as described in the preceding subsections, the person shall pay to the
Corporation the portion of the recovery attributable to the insurance policies
(or portion of the insurance policies) covered by this title.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID3D17B98A9FAB4DA7B4AF981F459EFB95" section-type="subsequent-section"><enum>1608.</enum><header>Assessments</header>
<subsection commented="no" display-inline="no-display-inline" id="ID227200912D5D4AF780C0042E03527032"><enum>(a)</enum><header>Assessments by
Corporation Authorized</header><text display-inline="yes-display-inline">For
the purpose of providing the funds necessary to provide the benefits or
payments under this title, the Corporation shall be authorized to assess
National Insurers doing business in nonqualified States separately for each
account, at such time and for such amounts as the board of directors of the
Corporation finds necessary, in accordance with the provisions of this
section.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID5c5c83246b104a49bc4d5cdb5e753bc4"><enum>(b)</enum><header>Classes of
assessments</header><text display-inline="yes-display-inline">The Corporation
shall impose 3 classes of assessments as follows:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID7d6fcefaf1b04ba2915e218098043ea8"><enum>(1)</enum><header>General
administrative assessments</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idBAFC2F5095B94891870111C90A04C61D"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Each National Insurer
that is a member of the Corporation shall be assessed an amount necessary to
cover the general administrative and legal costs of the Corporation, other than
the costs specified in paragraphs (2) and (3).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idA5FDFE6C8FA7445FAB3918D6CB5EF956"><enum>(B)</enum><header>Amount</header><text display-inline="yes-display-inline">In setting the amount of the assessment
under subparagraph (A), the Corporation shall divide such administrative and
legal expenses equally among all members of the Corporation.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE5E342329DC94F54A8A81443E5766C8B"><enum>(C)</enum><header>Deposit</header><text display-inline="yes-display-inline">The amount collected pursuant to this
paragraph shall be deposited, in equal amounts, in the 5 accounts established
pursuant to section 1603(f).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID31db6a6efd2e4464b4197562daa076ed"><enum>(2)</enum><header>Property/casualty
assessments</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idE51C2768EDEA4DCE9F2E489F529ED85E"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Corporation
shall—</text>
<clause commented="no" display-inline="no-display-inline" id="id3CDDC87B0B164B48996F27692759AB64"><enum>(i)</enum><text display-inline="yes-display-inline">allocate claims paid and expenses incurred
among the workers’ compensation account, the automobile insurance account, or
the other property/casualty account; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idFAB5C786739E4A5BBEBBF6DAF0DAB048"><enum>(ii)</enum><text display-inline="yes-display-inline">assess National Property/Casualty Insurers
that are members of the Corporation separately for each account described in
clause (i) the amounts necessary to pay the obligations of the Corporation
under section 1605 and the expenses of handling such claims.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id09283BBD6B58400C8FEA41CC52BB7BC1"><enum>(B)</enum><header>Amount</header><text display-inline="yes-display-inline">The assessment established under
subparagraph (A)(ii) for a National Property/Casualty Insurer shall equal an
amount that bears the same ratio to the total amount of claims and expenses
allocated to an account pursuant to subparagraph (A)(i) as the premiums
received by such National Property/Casualty Insurer on the kind of insurance in
the account in nonqualified States during the calendar year preceding the
assessment bears to the premiums received by all assessed National
Property/Casualty Insurers on the kind of insurance in the account in
nonqualified States during the year preceding the assessment.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id0548632D0D77463E8852345E3BCD53AA"><enum>(C)</enum><header>Deposit</header><text display-inline="yes-display-inline">The assessments received pursuant to this
paragraph shall be deposited in the workers’ compensation account, the
automobile insurance account, or the other property/casualty account, as
appropriate.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2a27a85c1b0847e8912513965962025a"><enum>(3)</enum><header>Life and
annuity assessments</header>
<subparagraph commented="no" display-inline="no-display-inline" id="id5EF49DE1577148A69FE1C0AF32060211"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Corporation
shall—</text>
<clause commented="no" display-inline="no-display-inline" id="idB63659C90A09442896FCF88F61178576"><enum>(i)</enum><text display-inline="yes-display-inline">allocate benefits paid and expenses
incurred among the life insurance account and the annuity account; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idC478423BA5CD429D90D0B3E60D827914"><enum>(ii)</enum><text display-inline="yes-display-inline">assess National Life Insurers that are
members of the Corporation separately for each account described in clause (i)
the amounts necessary to pay the obligations of the Corporation under section
1604 and the expenses of handling such benefits.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idD1AB2FA7FA464ED28434F9DC8B1CD2DE"><enum>(B)</enum><header>Amount</header><text display-inline="yes-display-inline">The assessment established under
subparagraph (A)(ii) for a National Life Insurer shall equal an amount that
bears the same ratio to the total of benefits and expenses allocated to an
account pursuant to subparagraph (A)(i) as the premiums received by such
National Life Insurer on the kind of insurance in the account in nonqualified
States during the calendar year preceding the assessment bears to the premiums
received by all assessed National Life Insurers on the kind of insurance in the
account in nonqualified States during the year preceding the assessment.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id16A43646C9234F5697268C086A2A1B97"><enum>(C)</enum><header>Deposit</header><text display-inline="yes-display-inline">The assessments received pursuant to this
paragraph shall be deposited in the life insurance account or the annuity
account, as appropriate.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDa8aae7eaa83c4db68484393a994525d5"><enum>(c)</enum><header>Notice and
imposition of assessments</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID896efec714e2431ba6afc3363770ba51"><enum>(1)</enum><header>Written notice
required</header><text display-inline="yes-display-inline">The Corporation
shall provide each National Insurer a written notice of an assessment, and
assessments shall be payable not less than 30 days after such notice.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDd2fce25015dd4b229a4a9fa4e33778f3"><enum>(2)</enum><header>Late
payment</header><text display-inline="yes-display-inline">National Insurers
that fail to pay an assessment when due shall be subject to an interest charge
on the assessment, as set by the Corporation.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDb6edd54e4f2544f9a3b0076554510338"><enum>(3)</enum><header>Assessments not
made until needed</header><text display-inline="yes-display-inline">The
Corporation shall not impose an assessment described in paragraph (2) or (3) of
subsection (b) until such funds are needed.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idA16928F4181744D695381260FE7E18BC"><enum>(4)</enum><header>Maximum
assessment</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDa02943d14e3d426389f06846c6f139de"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Corporation may
not assess a National Insurer in any year on any account an amount greater than
2 percent of the Insurer’s net direct written premiums for the calendar year
preceding the assessment on the kind of insurance in the account.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDcee45f0bf1564ce38b0b999ee8752851"><enum>(B)</enum><header>Insufficient
amount in life insurance account or annuity account</header>
<clause commented="no" display-inline="no-display-inline" id="id9D159270EF5C48429C96DB2BB3358B1E"><enum>(i)</enum><header>Insufficient
amount in life insurance account</header><text display-inline="yes-display-inline">If the maximum assessment in any year does
not provide an amount sufficient to make all necessary payments from the life
insurance account, the Corporation may assess the annuity account for the
necessary additional amount.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID70b617673d0e4cabafc2d022a1f89856"><enum>(ii)</enum><header>Insufficient
amount in annuity account</header><text display-inline="yes-display-inline">If
the maximum assessment in any year does not provide an amount sufficient to
make all necessary payments from the annuity account, the Corporation may
assess the life insurance account for the necessary additional amount.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID74a342051f014556a193217332efa2c7"><enum>(C)</enum><header>Insufficient
amount in workers' compensation account, automobile insurance account, or other
property/casualty insurance account</header>
<clause commented="no" display-inline="no-display-inline" id="ID8632288e01ca424082395d28e251ef9b"><enum>(i)</enum><header>Insufficient
amount in workers' compensation account</header><text display-inline="yes-display-inline">If the maximum assessment in any year does
not provide an amount sufficient to make all necessary payments from the
workers’ compensation account, the Corporation may assess the automobile
insurance account or the other property/casualty insurance account, or both,
for the necessary additional amount.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID43b4df65265945629196c99f7250f8df"><enum>(ii)</enum><header>Insufficient
amount in automobile insurance account</header><text display-inline="yes-display-inline">If the maximum assessment in any year does
not provide an amount sufficient to make all necessary payments from the
automobile insurance account, the Corporation may assess the workers’
compensation account or the other property/casualty insurance account, or both,
for the necessary additional amount.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDd0b1933558c4439ba87c2a63369fcd7a"><enum>(iii)</enum><header>Insufficient
amount in other property/casualty insurance account</header><text display-inline="yes-display-inline">If the maximum assessment in any year does
not provide an amount sufficient to make all necessary payments from the other
property/casualty insurance account, the Corporation may assess the workers’
compensation account or the automobile insurance account, or both, for the
necessary additional amount.</text>
</clause></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDE71A1961DCF847509D174924918EECB9"><enum>(d)</enum><header>Abated or
Deferred Assessments</header><text display-inline="yes-display-inline">The
board of directors of the Corporation may abate or defer, in whole or in part,
the assessment of a National Insurer if, in the opinion of the board, payment
of the assessment would endanger the ability of the National Insurer to fulfill
the Insurer’s contractual obligations. In the event an assessment against a
National Insurer is abated or deferred, in whole or in part, the amount by
which the assessment is abated or deferred may be assessed against the other
National Insurers doing business in non-qualified States, in a manner
consistent with the basis for assessments set forth in this section. Once the
conditions that caused a deferral have been removed or rectified, the National
Insurer shall pay all assessments that were deferred pursuant to a repayment
plan approved by the board of directors of the Corporation.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID21F892483AAC4751B7A5178A4D784873"><enum>(e)</enum><header>Refunds</header><text display-inline="yes-display-inline">The board of directors of the Corporation
may, by an equitable method as established by operating rules, refund to
National Insurers, in proportion to the contribution of each Insurer to that
account, the amount by which the assets of the account exceed the amount the
board finds is necessary to carry out during the coming year the obligations of
this title with regard to that account, including assets accruing from
assignment, subrogation, net realized gains, and income from investments. A
reasonable amount may be retained in any account to provide funds for the
continuing expenses of the Corporation, and for future claims.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID4E3E3976D90B46998813E56FA6B14C6C"><enum>(f)</enum><header>Assessment
Protests</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDAAE7AC9941EA4DB382ED19AEF7D6545D"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">A National Insurer
that wishes to protest all or part of an assessment shall pay when due the full
amount of the assessment as set forth in the notice provided by the
Corporation. The payment shall be available to meet obligations under this
title during the pendency of the protest or any subsequent appeal. Payment
shall be accompanied by a statement in writing that the payment is made under
protest and setting forth a brief statement of the grounds for the
protest.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID27DAB7B26769466C8C8A0EC00EBC7914"><enum>(2)</enum><header>Notification of
determination</header><text display-inline="yes-display-inline">Within 60 days
following the payment of an assessment under protest by a National Insurer, the
Corporation shall notify the National Insurer in writing of the Corporation’s
determination with respect to the protest unless the Corporation notifies the
Insurer that additional time is required to resolve the issues raised by the
protest.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE66E8F0A42B84D7F8C4D8EAC750223CA"><enum>(3)</enum><header>Final
decision</header><text display-inline="yes-display-inline">Within 30 days after
a final decision has been made, the Corporation shall notify the protesting
National Insurer in writing of the final decision. Within 60 days of receipt of
notice of the final decision, the protesting National Insurer may appeal that
final action to the Commissioner.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID69D53EC74A7A47B38AC7FAC4F30B2A5D"><enum>(4)</enum><header>Referral</header><text display-inline="yes-display-inline">In the alternative to rendering a final
decision with respect to a protest based on a question regarding the assessment
base, the Corporation may refer protests to the Commissioner for a final
decision, with or without a recommendation from the Corporation.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFCBD90B880694F33AC2DFE0E4A8FD4B4"><enum>(5)</enum><header>Protest or
appeal upheld</header><text display-inline="yes-display-inline">If the protest
or appeal on the assessment is upheld, the amount paid in error or excess shall
be returned to the National Insurer. Interest on a refund due a protesting
National Insurer shall be paid at the rate actually earned by the
Corporation.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDCC3A6303D5B1456EB1A6DAEF4E33FE67"><enum>(g)</enum><header>Information
Requests</header><text display-inline="yes-display-inline">The Corporation may
request information of National Insurers doing business in nonqualified States
in order to aid in carrying out the Corporation’s duties under this section and
such Insurers shall promptly comply with such a request.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID9035934B588B48E5A82F6F5DF6B7A216" section-type="subsequent-section"><enum>1609.</enum><header>Regulation</header><text display-inline="no-display-inline">In addition to the duties and powers
enumerated elsewhere in this title, the Commissioner shall issue such
regulations as the Commissioner determines necessary to facilitate the
operations of the Corporation and implement the terms of this title.</text>
</section><section commented="no" display-inline="no-display-inline" id="ID795DD5EE0B7B4B738339787A01FC6640" section-type="subsequent-section"><enum>1610.</enum><header>State
taxation</header><text display-inline="no-display-inline">No State shall have
the power to impose its premium, franchise, or income tax on any National
Insurer unless deductions or offsets of the Corporation and association
assessments against such premium, franchise, or income tax are allowed National
Insurers to the same extent and in the same manner as allowed State
insurers.</text>
</section><section commented="no" display-inline="no-display-inline" id="IDF30D6748CE374BDAB72B426DAA2DBB07" section-type="subsequent-section"><enum>1611.</enum><header>Examination of the
Corporation; annual report</header><text display-inline="no-display-inline">The
Corporation shall be subject to examination and regulation by the Commissioner.
The Corporation shall submit to the Commissioner and each State insurance
commissioner in each non-qualified State, a financial report in a form approved
by the Commissioner and a report of the Corporation’s activities during the
preceding fiscal year, as the activities relate to the duties and functions
carried out under this title.</text>
</section><enum>VII</enum><header>CONFORMING AMENDMENTS AND MISCELLANEOUS
PROVISIONS</header>
<section commented="no" display-inline="no-display-inline" id="ID646847F3674C4E7299882F87D495AC96" section-type="subsequent-section"><enum>1701.</enum><header>Nondiscrimination</header><text display-inline="no-display-inline">No State may discriminate, in any manner,
against—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDD1B752D820C341F183EA5DB94DF902A8"><enum>(1)</enum><text display-inline="yes-display-inline">any State insurer because such insurer or
any affiliate has applied to become, or has declared its intention to become, a
National Insurer chartered under this Act;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0DD47E976DDE4AC7B88E7EFC6686F0A8"><enum>(2)</enum><text display-inline="yes-display-inline">any State-licensed insurance producer
because such insurance producer or an affiliate has applied to become, or has
declared its intention to become, a National Agency chartered under this Act or
a federally licensed insurance producer licensed under this Act;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2F05B09CAF7D47AAAC425452EB3CB80F"><enum>(3)</enum><text display-inline="yes-display-inline">any affiliate of a National Insurer,
National Agency, or a federally licensed insurance producer because the
affiliate is so affiliated;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID07F3896F577148BF87FDDCB923BC5FE7"><enum>(4)</enum><text display-inline="yes-display-inline">any policyholder, insured, claimant,
State-licensed insurance producer, or any person engaged in the acts described
in section 1404(b) because of any dealing with a National Insurer, National
Agency, a federally licensed insurance producer, or an affiliate of a National
Insurer, National Agency, or a federally licensed insurance producer; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9FDFD2D0C73E4FD3843D95171CCE1265"><enum>(5)</enum><text display-inline="yes-display-inline">any State-licensed insurance producer
(including with respect to such producer’s sales, solicitation, or negotiation
of any insurance policy written or sold by a State insurer) because it sells,
solicits, or negotiates an insurance policy written or sold by a National
Insurer.</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="ID4017315EE86A4C299CFDD3BFDD29E820" section-type="subsequent-section"><enum>1702.</enum><header>Application of the
Federal antitrust laws to National Insurers, National Agencies, and federally
licensed insurance producers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID3037F4C65B4B444CBFD97A19683E794C"><enum>(a)</enum><header>Application</header><text display-inline="yes-display-inline">Except as provided in subsection (b), the
<act-name parsable-cite="SHERMAN">Sherman Act</act-name> (15 U.S.C. 1 et seq.),
the <act-name parsable-cite="CLAY">Clayton Act</act-name> (15 U.S.C. 12 et
seq.), the <act-name parsable-cite="FTCA">Federal Trade Commission
Act</act-name> (15 U.S.C. 41 et seq.), and the Act of June 19, 1936 (49 Stat.
1526) (commonly known as the Robinson-Patman Antidiscrimination Act), shall be
applicable to National Insurers, National Agencies, and federally licensed
insurance producers to the same extent as other businesses are subject to such
laws, except as follows:</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDC77289ED6B954601B41AB9D50E2C2702"><enum>(1)</enum><text display-inline="yes-display-inline">Such laws shall not apply to the
development, dissemination, or use of standard insurance policy forms
(including, standard endorsements, addendums, and policy language), or to
activities incidental thereto, by National Insurers, National Agencies, and
federally licensed insurance producers.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8C9E4CF31C6444CA852008476139858E"><enum>(2)</enum><text display-inline="yes-display-inline">Section 3 of the Act of March 9, 1945 (59
Stat. 33; 15 U.S.C. 1013), shall apply to National Insurers, National Agencies,
and federally licensed insurance producers to the extent that such insurers and
producers are subject to State law.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID347E31F0987D4A818C7096663BADB8C3"><enum>(b)</enum><header>Exception</header><text display-inline="yes-display-inline">Section 5 of the
<act-name parsable-cite="FTCA">Federal Trade Commission Act</act-name> (15
U.S.C. 45) shall not apply to National Insurers, National Agencies, and
federally licensed insurance producers.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID2E8DCC7BA4B74698944500BCF0D509FB" section-type="subsequent-section"><enum>1703.</enum><header>Application of
State law and regulation to National Insurers, National Agencies, and federally
licensed insurance producers</header><text display-inline="no-display-inline">Except to the extent expressly provided in
this Act, National Insurers, National Agencies and federally licensed insurance
producers shall not be subject under State law to any form of licensing,
examination, reporting, regulation, or other supervision relating to the sale,
solicitation, or negotiation of insurance, to the underwriting of insurance, or
to any other insurance operations.</text>
</section><section commented="no" display-inline="no-display-inline" id="IDE4D466A0B8E141E8954341A8FE0F3ED6" section-type="subsequent-section"><enum>1704.</enum><header>Federal Court
jurisdiction</header><text display-inline="no-display-inline">Chapter 87 of
part IV of title 28, United States Code, is amended by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="ID0B2A5DF9883B48739147F00124E1A357" style="USC">
<section commented="no" display-inline="no-display-inline" id="ID3B6675259AB44155BA23358202A20477" section-type="subsequent-section"><enum>1414.</enum><header>National Insurer as
party</header><text display-inline="no-display-inline">The district courts
shall have original jurisdiction of any civil action—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID70DDADF8E4FC454FB7B669C2157E0E80"><enum>(1)</enum><text display-inline="yes-display-inline">commenced by the United States, or by
direction of any officers thereof, against any National Insurer, National
Agency or any federally licensed insurance producer;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID55CB51F831654EB7AA8BB00253120C53"><enum>(2)</enum><text display-inline="yes-display-inline">to enjoin the Commissioner of National
Insurance in the Commissioner’s capacity as head of the Office of National
Insurance or as the receiver of a National
Insurer.</text>
</paragraph></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section commented="no" display-inline="no-display-inline" id="ID84E248511B8A4EE7AD8E7D40899691C6" section-type="subsequent-section"><enum>1705.</enum><header>Federal Court
venue</header><text display-inline="no-display-inline">Chapter 87 of part IV of
title 28, United States Code, as amended by section 1704, is further amended by
adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="ID8222EB2C92B6429090C30CAB6203A644" style="USC">
<section commented="no" display-inline="no-display-inline" id="ID1FC4E7FC00474632AF61159790A2326A" section-type="subsequent-section"><enum>1415.</enum><header>National Insurer or
National Agency action against Commissioner of National Insurance</header><text display-inline="no-display-inline">Any civil action by a National Insurer or a
National Agency to enjoin the Commissioner of National Insurance, under the
provisions of any Act of Congress relating to such insurers or agencies, may be
prosecuted in the judicial district where such insurer or agency is
located.</text>
</section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section commented="no" display-inline="no-display-inline" id="ID7D43B699F41844A6B0E396D3C19FADCC" section-type="subsequent-section"><enum>1706.</enum><header>Judicial
review</header><text display-inline="no-display-inline">Except as otherwise
expressly provided in this Act, any party aggrieved by an order of the
Commissioner under this Act may obtain a review of such order in the United
States Court of Appeals within any circuit wherein such party has its main
office, or in the Court of Appeals for the District of Columbia, by filing in
the court, within 30 days after the entry of the Commissioner’s order, a
petition praying that the order of the Commissioner be set aside, modified, or
terminated. A copy of such petition shall be forthwith transmitted to the
Commissioner by the clerk of the court, and thereupon the Commissioner shall
file in the court the record made before the Commissioner, as provided in
section 2112 of title 28, United States Code. Upon the filing of such petition,
the court shall have jurisdiction to affirm, set aside, modify, or terminate
the order of the Commissioner and to require the Commissioner to take such
action with regard to the matter under review as the court determines proper.
Review of an order under this section shall be had as provided in chapter 7 of
part I of title 5, United States Code. The judgment and decree of the court
shall be final, except that the same shall be subject to review by the Supreme
Court upon certiorari, as provided in section 1254 of title 28, United States
Code.</text>
</section><section commented="no" display-inline="no-display-inline" id="IDD6975FE2AE6D4AED974EC7E0149D82FB" section-type="subsequent-section"><enum>1707.</enum><header>Amendment to
Freedom of Information Act</header><text display-inline="no-display-inline">Section 552(b)(8) of title 5, United States
Code, is amended by inserting <quote>(including National Insurers and National
Agencies)</quote> after <quote>financial institutions</quote>.</text>
</section><section commented="no" display-inline="no-display-inline" id="ID88E30BCE556946B6ADECF03C6278B7A2" section-type="subsequent-section"><enum>1708.</enum><header>Amendments to the
Federal securities laws</header>
<subsection commented="no" display-inline="no-display-inline" id="ID3B68C17306FA479187BB1EB07367D7FF"><enum>(a)</enum><header><act-name parsable-cite="SA33">Securities Act of 1933</act-name></header><text display-inline="yes-display-inline">The <act-name parsable-cite="SA33">Securities Act of 1933</act-name> (15 U.S.C. 77a et seq.)
is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDEFF51548C0DE4C41963CEEC98CCC3344"><enum>(1)</enum><text display-inline="yes-display-inline">in section 2(a)(13), by inserting
<quote>the Commissioner of National Insurance or</quote> after <quote>subject
to supervision by</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID704AE292087B493A9B4397C59EDD3AFD"><enum>(2)</enum><text display-inline="yes-display-inline">in section 2(a)(14), by inserting
<quote>the United States or</quote> after <quote>the laws of</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAF2E488075D34C86B1625A9343AA0291"><enum>(3)</enum><text display-inline="yes-display-inline">in section 3(a)(8), by inserting <quote>the
Commissioner of National Insurance or</quote> after <quote>subject to the
supervision of</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2C2B4219954943D880B17333AFDFD154"><enum>(4)</enum><text display-inline="yes-display-inline">in section 4(5)(A)(ii), by inserting
<quote>the Commissioner of National Insurance or</quote> after <quote>subject
to the supervision of</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID34207F681D6A4B13AB14BD077D0DD462"><enum>(b)</enum><header><act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name></header><text display-inline="yes-display-inline">The <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (15 U.S.C.
78a) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID3D0C08F3E15248AEB515E037B3EE4D42"><enum>(1)</enum><text display-inline="yes-display-inline">in section 17(i)(3)(C)(iii), by inserting
<quote>or by the Commissioner of National Insurance</quote> after
<quote>appropriate State insurance regulator</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID750503AAD0484EA5B4E0E1AB98D4D952"><enum>(2)</enum><text display-inline="yes-display-inline">in section 17(i)(4)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDB0BAA2CDC3A948AEB082F64488ACABF2"><enum>(A)</enum><text display-inline="yes-display-inline">in subparagraph (A), by striking
<quote>and</quote> after the semicolon;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA3F9804CE69E4DF684E67762CCC68EAF"><enum>(B)</enum><text display-inline="yes-display-inline">in subparagraph (B), by striking the period
at the end and inserting <quote>; and</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE17349A86A5F47C6BF7373684711AA4F"><enum>(C)</enum><text display-inline="yes-display-inline">by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="IDF6E7B7B45B044DCB856D44D60DADC939" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID8CDE3B46D4584C06B2F126291551DEE7"><enum>(D)</enum><text display-inline="yes-display-inline">the Commissioner of National Insurance with
regard to all interpretations of, and the enforcement of, the National
Insurance Act of 2006 relating to the activities, conduct, and operations of
National Insurers, National Agencies, and federally licensed insurance
producers.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID9728715CE406420184CBB28ADCDFC1E2"><enum>(c)</enum><header>Amendments to
<act-name parsable-cite="ICA40">Investment Company Act of
1940</act-name></header><text display-inline="yes-display-inline">The
<act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (15
U.S.C. 80a–1 et seq.) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID03DB4519F673476980B45E6DE19FF2D8"><enum>(1)</enum><text display-inline="yes-display-inline">in section 2(a)(17), by inserting
<quote>the Commissioner of National Insurance or</quote> after <quote>subject
to supervision by</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID83A7E2836E644E2082623760ECD12DFA"><enum>(2)</enum><text display-inline="yes-display-inline">in section 2(a)(37), by inserting
<quote>the United States or</quote> after <quote>the laws of</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB2D069DB48484C179CEB91E8E306E20F"><enum>(3)</enum><text display-inline="yes-display-inline">in section 12(g)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDCFC4F19B661041A9A9151A0459B2A922"><enum>(A)</enum><text display-inline="yes-display-inline">by inserting <quote>the Commissioner of
National Insurance or</quote> after <quote>affect or derogate from the powers
of</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2C131AE9F97D4EF881E829A4FC02998A"><enum>(B)</enum><text display-inline="yes-display-inline">by inserting <quote>Federal or</quote>
after <quote>affect the right under</quote>;</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEB0427874F87468284961168CD514718"><enum>(4)</enum><text display-inline="yes-display-inline">in section 26(f)(2)(B)(ii), by inserting
<quote>or, in the case of a National Insurer chartered under the National
Insurance Act of 2006, files with the Commissioner of National
Insurance,</quote> after <quote>files with the insurance regulatory authority
of the State which is the domiciliary State of the insurance company,</quote>;
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF7F31DF7F34448E5AE409DA12E1EE457"><enum>(5)</enum><text display-inline="yes-display-inline">in section 26(f)(2)(B)(iii), by inserting
<quote>or, in the case of a National Insurer chartered under the National
Insurance Act of 2006, the Commissioner of National Insurance</quote> after
<quote>insurance authority of such State</quote>.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID04DA23D3E86C4DDAAEDB2C5D06BE2722" section-type="subsequent-section"><enum>1709.</enum><header>Amendments to the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name></header><text display-inline="no-display-inline">The
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (29 U.S.C. 1001 et seq.) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID94F68E9F702643BA9AD720CA729B9560"><enum>(1)</enum><text display-inline="yes-display-inline">in section 401(b)(2)(A), by inserting
<quote>or licensed as a National Insurer</quote> after <quote>qualified to do
business in a State</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID26CDD43B2CEF4A73B8C87F8982C10EC0"><enum>(2)</enum><text display-inline="yes-display-inline">in section 733(b)(2), by inserting
<quote>or which is licensed as a National Insurer and which is subject to the
authority of the Commissioner of National Insurance</quote> after
<quote>(within the meaning of section 514(b)(2))</quote>.</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="IDC2F1BD3B01234675986EC24B2D065183" section-type="subsequent-section"><enum>1710.</enum><header>Amendments to the
Gramm-Leach-Bliley Act</header>
<subsection commented="no" display-inline="no-display-inline" id="IDE022010E2339468A98DC8FD024622D46"><enum>(a)</enum><header>Interagency
Consultation</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID3AA46E2A137544219FA153C2F2E527E6"><enum>(1)</enum><header>Amendments</header><text display-inline="yes-display-inline">Section 307 of the Gramm-Leach-Bliley Act
(15 U.S.C. 6716) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="ID7110F66F2D5D47E9BBC36558AA4DDF82" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID6BD29A17ABB449CE9C4328EBED1FBCDA"><enum>(g)</enum><header>Office of
National Insurance</header><text display-inline="yes-display-inline">In this
section, the terms <term>State insurance regulator</term>, <term>State
insurance regulators</term>, and <term>insurance regulator of any State</term>
shall include the Office of National
Insurance.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5B9F045224E14F038791FB4395608A94"><enum>(2)</enum><header>No
waiver</header><text display-inline="yes-display-inline">The provision of
information or material by the Office of National Insurance to a Federal
banking agency (as defined in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (12 U.S.C. 1813))
shall not constitute a waiver of, or otherwise affect, any privilege or other
form of legal protection or exemption from public disclosure to which such
information or material is otherwise subject.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDD287AA0F643646CEA74B04AD0CAE482A"><enum>(b)</enum><header>Privacy</header><text display-inline="yes-display-inline">The Gramm-Leach-Bliley Act (Public Law
106–102; 113 Stat. 1338) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID1DFDC276C0D140DA82C5CEE459B1C4EB"><enum>(1)</enum><text display-inline="yes-display-inline">in section 504(a)(1), by inserting
<quote>the Commissioner of National Insurance,</quote> after <quote>Federal
banking agencies,</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD2F86E018C934350BC12D4A466EB43FA"><enum>(2)</enum><text display-inline="yes-display-inline">in section 504(a)(3), by inserting <quote>,
except that, in the case of the Commissioner of National Insurance, such
regulations shall be issued in final form not later than 12 months after the
date of enactment of the National Insurance Act of 2006</quote> after
<quote>enactment of this Act</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID312EEEC224C1440E87BC7EBE1002D662"><enum>(3)</enum><text display-inline="yes-display-inline">in section 505(a)(6), by inserting
<quote>(other than a person subject to the jurisdiction of the Office of
National Insurance under paragraph (8))</quote> after <quote>providing
insurance</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB18AF93505054653A2789C16D573AF0D"><enum>(4)</enum><text display-inline="yes-display-inline">in section 505(a)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2573624686B2477D8A8A5A87E740ADED"><enum>(A)</enum><text display-inline="yes-display-inline">by redesignating paragraph (7) as paragraph
(8); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID500DA2E5EA0E494D8EE4D8F7C1AA60AE"><enum>(B)</enum><text display-inline="yes-display-inline">by inserting after paragraph (6) the
following:</text>
<quoted-block display-inline="no-display-inline" id="IDA816968BB5FD4181BC73A6300EC51D92" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID77CBF2F60C17490F8351C1EC1894A19F"><enum>(7)</enum><text display-inline="yes-display-inline">Under subtitle C of title I of the National
Insurance Act of 2006, by the Commissioner of National Insurance with respect
to any National Insurer or National Agency, any subsidiaries of such an entity
(except any financial institution or other person subject to the jurisdiction
of any agency or authority under paragraphs (1) through (6)), and any federally
licensed insurance
producer.</text>
</paragraph><after-quoted-block>;</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3498CA060FB74760BF78828D910D3633"><enum>(5)</enum><text display-inline="yes-display-inline">in section 505(a)(8), as redesignated by
paragraph (4) of this section, by striking <quote>through (6)</quote> and
inserting <quote>through (7)</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID26C31B7C05E541078010E86FF98DED08"><enum>(6)</enum><text display-inline="yes-display-inline">in section 505(b)(2), by striking
<quote>and (7)</quote> and inserting <quote>(7), and (8)</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7153C13523C94F8288EDD031F26AFCF9"><enum>(7)</enum><text display-inline="yes-display-inline">in section 509(2)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID7408A6D5076D463E820C6AB9CD2C8B6E"><enum>(A)</enum><text display-inline="yes-display-inline">by redesignating subparagraphs (E) and (F)
as subparagraphs (F) and (G), respectively; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2B06613AE2904FE791BCECB6518A5C83"><enum>(B)</enum><text display-inline="yes-display-inline">by inserting after subparagraph (D) the
following:</text>
<quoted-block display-inline="no-display-inline" id="ID38418E75977A43309769E4FF07FC0295" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID8471F7ED2E7542C5B9B229CED3DAF9BF"><enum>(E)</enum><text display-inline="yes-display-inline">the Commissioner of National
Insurance;</text>
</subparagraph><after-quoted-block>;</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1DF7D23401734ED090B328D4C3FA4904"><enum>(8)</enum><text display-inline="yes-display-inline">in section 521(e), by inserting <quote>or
Federal</quote> after <quote>such institution under State</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID08EC12CFC0A149E68FE9469FBF94B6F9"><enum>(9)</enum><text display-inline="yes-display-inline">in section 522(b)(1)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID61CD0D0DD0034A1AA7CC5CD872B8FCB8"><enum>(A)</enum><text display-inline="yes-display-inline">in subparagraph (A)(iv), by striking
<quote>and</quote> after the semicolon;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6E08A5C77C1941079CD5D2F764EC024A"><enum>(B)</enum><text display-inline="yes-display-inline">in subparagraph (B), by striking the period
at the end and inserting <quote>; and</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID293ED6BEBBED4DEBA76BC3C84CB3855B"><enum>(C)</enum><text display-inline="yes-display-inline">by inserting after subparagraph (B) the
following:</text>
<quoted-block display-inline="no-display-inline" id="ID8B64EF10D6F74B2A99146712C81936EF" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID36EFD3866FBC48968A026FAE1A10C30B"><enum>(C)</enum><text display-inline="yes-display-inline">subtitle C of title I of the National
Insurance Act of 2006, by the Commissioner of National Insurance with respect
to any National Insurer or National Agency and any federally licensed insurance
producer.</text>
</subparagraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID11ED6C34E6BB44618D983A32DF6D3932"><enum>(10)</enum><text display-inline="yes-display-inline">in section 525, by inserting <quote>the
Commissioner of National Insurance,</quote> after <quote>National Credit Union
Administration,</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID7B36FBBBCAF54511B5A5579A1C6176B9"><enum>(c)</enum><header>Other
Conforming Amendments</header><text display-inline="yes-display-inline">The
Gramm-Leach-Bliley Act (Public Law 106–102; 113 Stat. 1338) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDB5B2F8E8986C4B01831D59D8339EB4C8"><enum>(1)</enum><text display-inline="yes-display-inline">in section 104(b), by inserting <quote>, or
as required by the Commissioner of National Insurance in accordance with the
National Insurance Act of 2006</quote> after <quote>subject to subsections (c),
(d), and (e)</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8BF745C3553C4AFB8F342DD9E0CFAFBC"><enum>(2)</enum><text display-inline="yes-display-inline">in section 104(f)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID6F09417481F54B989B10EBF4A3082BDB"><enum>(A)</enum><text display-inline="yes-display-inline">by striking <quote>Subsections (c) and
(d)</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="IDC64CB4BCDEE24F6D9FFAA3BD6DED1ACF" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID824A83A56B7C4F1F99BC313CE694A31A"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Subsections (c) and
(d)</text>
</paragraph><after-quoted-block>;</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID569D1663BF274B80A79A930A12745A0D"><enum>(B)</enum><text display-inline="yes-display-inline">by striking <quote>(1) the
jurisdiction</quote> and inserting the following: <quote>(A) the
jurisdiction</quote>;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4A1FF3617548479B9AFEDF267C99BFFF"><enum>(C)</enum><text display-inline="yes-display-inline">by striking <quote>(A) to
investigate</quote> and inserting the following: <quote>(i) to
investigate</quote>;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF3150B8B73344E88A620EC0A42641351"><enum>(D)</enum><text display-inline="yes-display-inline">by striking <quote>(B) to require</quote>
and inserting the following: <quote>(ii) to require</quote>;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8BE152D73C16405FABE16B88A53C087C"><enum>(E)</enum><text display-inline="yes-display-inline">by striking <quote>(2) State laws</quote>
and inserting the following: <quote>(B) State laws</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCFCD37C6149E4BD9811D0C06F4872FA9"><enum>(F)</enum><text display-inline="yes-display-inline">by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="ID6DEFD5B1E51B4DD2AB38D9D57751B05B" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID898A82CD4CA34625A0A09E3A04D7C7B7"><enum>(2)</enum><header>Other</header><text display-inline="yes-display-inline">Notwithstanding any provision of subsection
(d), paragraphs (2) and (3) of subsection (d) and subsection (e) shall not
apply to any person to the extent that such person is engaged in the business
of insurance or other insurance operations pursuant to authority provided under
the National Insurance Act of
2006.</text>
</paragraph><after-quoted-block>;</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCB5BB28C646746A59F59B7C8EB09FA50"><enum>(3)</enum><text display-inline="yes-display-inline">in section 104(g)(4), by striking
<quote>business of insurance.</quote> and inserting <quote>business of
insurance, but only to the extent that such person is doing so pursuant to a
license issued under the authority of State law.</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID101379C2800E44169F6166369CC18081"><enum>(4)</enum><text display-inline="yes-display-inline">in section 112, by inserting in the heading
<quote><header-in-text level="section" style="OLC">commissioner of national
insurance</header-in-text></quote> after <quote><header-in-text level="section" style="OLC">authority of state insurance
regulator</header-in-text></quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC9B74DDE4EED4A3D933DC32035420CD3"><enum>(5)</enum><text display-inline="yes-display-inline">in section 301, by inserting <quote>,
except that the insurance activities of a National Insurer, National Agency,
and a federally licensed insurance producer shall be functionally regulated by
the Office of National Insurance</quote> after <quote>subject to section
104</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA148A209C81E4BD785CE1B089D252CFC"><enum>(6)</enum><text display-inline="yes-display-inline">in section 311, by inserting at the end the
following: <quote>This subtitle shall not apply to a National Insurer in mutual
form that is reorganizing into a mutual holding company.</quote>.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID49DA99B6FA104A9081084A3E8E4F826C" section-type="subsequent-section"><enum>1711.</enum><header>Amendments to the
<act-name parsable-cite="FDIA">Federal Deposit Insurance
Act</act-name></header><text display-inline="no-display-inline">The
<act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (12
U.S.C. 1811 et seq.) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID6D2B2F4A599D418C897CB58AF07185AF"><enum>(1)</enum><text display-inline="yes-display-inline">in section 45, by inserting in the heading
<quote>, <header-in-text level="section" style="OLC">commissioner of office of
national insurance</header-in-text>,</quote> after <quote><header-in-text level="section" style="OLC">state insurance regulator</header-in-text></quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7A294382118C4033A1C7956E305FCCAD"><enum>(2)</enum><text display-inline="yes-display-inline">in section 47(g)(1)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA41FACA69BB145A4990EE5BA121B91AF"><enum>(A)</enum><text display-inline="yes-display-inline">in subparagraph (A), by striking
<quote>or</quote> after the semicolon;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD485ECA61F1448339581B6FE8D943F2A"><enum>(B)</enum><text display-inline="yes-display-inline">in subparagraph (B), by striking the period
at the end and inserting <quote>; or</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2CBB015795044C589AB85D48F33BF037"><enum>(C)</enum><text display-inline="yes-display-inline">by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="IDDDAFA91C51B5440CB4E37D23E3C94DD1" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID32756E70415E4BA19737CE065D17F925"><enum>(C)</enum><text display-inline="yes-display-inline">any authority of the Commissioner of
National Insurance under the National Insurance Act of
2006.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></section><section commented="no" display-inline="no-display-inline" id="ID3BB6F8802C8B49308B173F8EB225F4AE" section-type="subsequent-section"><enum>1712.</enum><header>Amendments to the
<act-name parsable-cite="BHC65">Bank Holding Company Act of
1956</act-name></header><text display-inline="no-display-inline">The
<act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (12
U.S.C. 1841 et seq.) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDB974FC9F888D4BAC8DBA24D9B18CB219"><enum>(1)</enum><text display-inline="yes-display-inline">in section 4(k)(4)(I)(iii), by inserting
<quote>or Federal</quote> after <quote>relevant State</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF9D6C7F59FE54B00B2001071DC063AF7"><enum>(2)</enum><text display-inline="yes-display-inline">in section 5(c)(2)(E)(iii), by inserting
<quote>or by or on behalf of the Commissioner of National Insurance</quote>
after <quote>for the supervision of insurance companies</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD68DE10F18A24C5A85A3AA3C0CB74C85"><enum>(3)</enum><text display-inline="yes-display-inline">in section 5(c)(3)(A)(ii)(I), by inserting
<quote>or the Office of National Insurance</quote> after <quote>Securities and
Exchange Commission</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5A64E5FAC6F34BC285238E91AB05BF11"><enum>(4)</enum><text display-inline="yes-display-inline">in section 5(c)(4)(B), by inserting
<quote>or the Commissioner of National Insurance</quote> after <quote>a State
insurance authority</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID47A96A5B0383449F8E8E7E654E1C7508"><enum>(5)</enum><text display-inline="yes-display-inline">in section 5(c)(5)(B)(iv), by inserting
<quote>or by the Commissioner of National Insurance</quote> after <quote>State
insurance regulator</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE647D40108A8400796AE2B5602C4A877"><enum>(6)</enum><text display-inline="yes-display-inline">in section 5(g), by inserting in the
heading <quote>, <header-in-text level="subsection" style="OLC">commissioner of
national insurance</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">state insurance
regulator</header-in-text></quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID86662543C4F3470D9FF4E7E9326A0A4B"><enum>(7)</enum><text display-inline="yes-display-inline">in section 5(g)(1)(B), by inserting
<quote>or the Commissioner of National Insurance</quote> after <quote>State
insurance authority</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID332116685FB549D190B218BABF053070"><enum>(8)</enum><text display-inline="yes-display-inline">in section 5(g)(2)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC9FEE5A3D7724EC5ACB96C09091C5EB4"><enum>(A)</enum><text display-inline="yes-display-inline">in the heading, by inserting <quote>,
<header-in-text level="paragraph" style="OLC">commissioner of national
insurance,</header-in-text></quote> after <quote><header-in-text level="paragraph" style="OLC">state insurance
authority</header-in-text></quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6757661AB65E41E28C4EB163EFD26F40"><enum>(B)</enum><text display-inline="yes-display-inline">by inserting <quote>or the Commissioner of
National Insurance</quote> after <quote>the Board shall promptly notify the
State insurance authority</quote>; and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB1EDF4C598F84F1197BB3D53765E4C25"><enum>(9)</enum><text display-inline="yes-display-inline">in section 5(g)(3), by inserting <quote>,
the Commissioner of National Insurance,</quote> after <quote>If the Board
receives a notice described in paragraph (1)(B) from a State insurance
authority</quote>.</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="ID2ACE23A8193247F5AF1F1F16D29BFDD2" section-type="subsequent-section"><enum>1713.</enum><header>Amendments to title
<enum-in-header>18</enum-in-header> (crimes and criminal procedure)</header>
<subsection commented="no" display-inline="no-display-inline" id="ID4446596E55AD451FB29DC09343C85827"><enum>(a)</enum><header>Amendments to
18 U.S.C. 1033</header><text display-inline="yes-display-inline">Section
1033(b) of title 18, United States Code, is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDAEF1B34BE03B46A28EEF068CE1D771C5"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraph (1)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE3264C80F2DC46F9A68A7C394389834B"><enum>(A)</enum><text display-inline="yes-display-inline">by inserting <quote>removes, conceals,
alters, destroys,</quote> after <quote>willfully embezzles, abstracts,
purloins,</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID355EAA5726DC4CF49F494F5E10FDB450"><enum>(B)</enum><text display-inline="yes-display-inline">by inserting <quote>assets,</quote> after
<quote>moneys, funds, premiums, credits,</quote>; and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0F978ED5DBCB42D5A88B9008201D10D6"><enum>(2)</enum><text display-inline="yes-display-inline">in paragraph (2)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDBF7CD4E6F3644B879BE5971BE848B25A"><enum>(A)</enum><text display-inline="yes-display-inline">in the first sentence, by inserting
<quote>removal, concealment, alteration, destruction,</quote> after
<quote>embezzlement, abstraction, purloining,</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID9C68FBD4B9BA4E34B9C6E350391A5C6E"><enum>(B)</enum><text display-inline="yes-display-inline">in the second sentence, by inserting
<quote>removed, concealed, altered, destroyed,</quote> after <quote>embezzled,
abstracted, purloined,</quote>.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDE7A5EE1AFD3C468B86DEB99A75032371"><enum>(b)</enum><header>Addition of a
New Section <enum-in-header>1037A</enum-in-header></header><text display-inline="yes-display-inline">Title
18, United States Code, is amended by inserting after section 1037 the
following:</text>
<quoted-block display-inline="no-display-inline" id="ID6A09BCD6C98D41A5B37F93F7D44D4F7E" style="USC">
<section commented="no" display-inline="no-display-inline" id="ID741197FB3DD74261B5B07C761D876938" section-type="subsequent-section"><enum>1037A.</enum><header>Insurance
fraud</header>
<subsection commented="no" display-inline="no-display-inline" id="ID16E311D7247D4279BA6543DDC64F781F"><enum>(a)</enum><text display-inline="yes-display-inline">Whoever commits a fraudulent insurance act
or whoever knowingly and intentionally interferes with the enforcement of the
provisions of subtitle D of title I of the National Insurance Act of 2006 or
investigations of suspected or actual violations of this section shall be
punished as provided in subsection (b).</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDA9B552C1C9784BFE8B0FA095F21FE040"><enum>(b)</enum><paragraph commented="no" display-inline="yes-display-inline" id="ID55C30549CEAD4A3E84DCB4D32D8C05C2"><enum>(1)</enum><text display-inline="yes-display-inline">Except as provided in paragraph (2), the
punishment for an offense under subsection (a) is a fine as provided under this
title or imprisonment for not more than 10 years, or both.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE51D6DD05D2146869A985C1CE4B03249" indent="up1"><enum>(2)</enum><text display-inline="yes-display-inline">Where the person committing an offense
under subsection (a) is a National Insurer, National Agency, insurer-affiliated
party, or a federally licensed insurance producer, punishment for an offense
under subsection (a) shall be a fine, the maximum of which is the greater
of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID19FC8B492AC040388F724446A289597B"><enum>(A)</enum><text display-inline="yes-display-inline">$1,000,000 per violation; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID25166EA0271B4AA3A30810A46DCA7710"><enum>(B)</enum><text display-inline="yes-display-inline">a
fine as provided under this title; or imprisonment for not more than 10 years,
or both.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID03C8A1F762C146C4B756C7616CA9EB3B" indent="up1"><enum>(3)</enum><text display-inline="yes-display-inline">If the fraudulent insurance act involved an
amount or value not exceeding $5,000, whoever violates subsection (a) shall be
fined as provided in this title or imprisoned not more than 1 year, or
both.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID513426F71B474A85BE38E7BB4B146F32" indent="up1"><enum>(4)</enum><text display-inline="yes-display-inline">The punishment in this subsection shall be
in addition to any other penalties under the National Insurance Act of
2006.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDF9DF6D0EDFD8468DAD38396A9D2CCD21"><enum>(c)</enum><paragraph commented="no" display-inline="yes-display-inline" id="ID46C0E18421AE4C2FBF2C61B52A43A116"><enum>(1)</enum><text display-inline="yes-display-inline">Any individual who has been convicted of
any criminal felony involving dishonesty or breach of trust, and who
participates in the business of insurance, shall be fined as provided in this
title or imprisoned not more than 5 years, or both.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID01DE732C4C91481B92338F9E33170159" indent="up1"><enum>(2)</enum><text display-inline="yes-display-inline">Any insurance person who is engaged in the
business of insurance who knowingly and intentionally permits the participation
described in paragraph (1) shall be fined as provided in this title or
imprisoned not more than 5 years, or both.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1507BF0219F44DFCA12F0AE3DBBEB829" indent="up1"><enum>(3)</enum><text display-inline="yes-display-inline">A
person described in paragraph (1) or (2) may participate in the business of
insurance or permit such participation, as the case may be, if such person has
the written consent of the Commissioner of National Insurance.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID7B07629F8BBB4798B9B6D76B8458B3F6"><enum>(d)</enum><text display-inline="yes-display-inline">In this section—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID0948E07FA19C44039293E33988B2E4CF"><enum>(1)</enum><text display-inline="yes-display-inline">the terms
<term>Commissioner,</term><quote>insurance policy,</quote><quote>insurance
producer,</quote><quote>insurer-affiliated party,</quote><quote>National
Agency,</quote><quote>National Insurer,</quote><quote>person,</quote> and
<quote>policy of insurance</quote> have the meanings given to the terms in
section 3 of the National Insurance Act of 2006;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8F019DBA79544265A9FB6AD9E5FF9BDF"><enum>(2)</enum><text display-inline="yes-display-inline">the term <term>business of insurance</term>
has the meaning given to the term in section 1033(f)(1);</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3F901E6B6844498A90DE272E9E40F6C1"><enum>(3)</enum><text display-inline="yes-display-inline">the term <term>fraudulent insurance
act</term> means an act or omission committed by a person who, knowingly and
with intent to defraud, commits or conceals any material information
concerning, 1 or more of the following—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDBF813809B9764AB3B984AD749AC8F6E7"><enum>(A)</enum><text display-inline="yes-display-inline">presenting, causing to be presented or
preparing with knowledge or belief that it will be presented to or by a
National Insurer, National Agency, or an insurance producer acting with respect
to a policy of insurance written by a National Insurer, false information as
part of, in support of or concerning a fact material to 1 or more of the
following—</text>
<clause commented="no" display-inline="no-display-inline" id="ID840F098736A5462BA55E250778ACA444"><enum>(i)</enum><text display-inline="yes-display-inline">an application for a new or renewal of an
insurance policy or reinsurance contract;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID5EA5D9073E0E4F9D8CBF3ACAD6D2D106"><enum>(ii)</enum><text display-inline="yes-display-inline">the rating of a National Insurer that
writes an insurance policy or enters into a reinsurance contract;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID0330822D139144B99859DFAE2040AE30"><enum>(iii)</enum><text display-inline="yes-display-inline">a claim for payment or benefit pursuant to
an insurance policy or reinsurance contract;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID2052B0CAFEC942FFBCA7D1384F4118DE"><enum>(iv)</enum><text display-inline="yes-display-inline">premiums paid on an insurance policy or
reinsurance contract;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDD576047BFAC84BC3A622A4F52B1D9736"><enum>(v)</enum><text display-inline="yes-display-inline">payments made in accordance with the terms
of an insurance policy or reinsurance contract;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7C3993D83B86401B98087797A4379DE9"><enum>(vi)</enum><text display-inline="yes-display-inline">a document filed with the
Commissioner;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID5784B08FA782499CB25BFB7D488F0453"><enum>(vii)</enum><text display-inline="yes-display-inline">the financial condition of a National
Insurer;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID632FBB44E72647D1801B29495CDAF8D7"><enum>(viii)</enum><text display-inline="yes-display-inline">the formation, acquisition, merger,
consolidation, dissolution, or withdrawal from 1 or more lines of insurance or
reinsurance by a National Insurer;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDD23432F5EAEE49308EA26AC28DA947A4"><enum>(ix)</enum><text display-inline="yes-display-inline">the issuance of evidence of insurance,
whether in writing, electronic form or otherwise; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID6CF7808BF6F64118A1FD520C99D40953"><enum>(x)</enum><text display-inline="yes-display-inline">the reinstatement of an insurance
policy;</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1DB5C4E1D5084607A5E4BC9925095427"><enum>(B)</enum><text display-inline="yes-display-inline">solicitation or acceptance of new or
renewal insurance risks on behalf of a National Insurer, National Agency, or
other persons engaged in the business of insurance by a person who knows or
should know that the National Insurer or other person responsible for the risk
is insolvent at the time of the transaction;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE3672F986AEC4B9B89131FE60AAD362E"><enum>(C)</enum><text display-inline="yes-display-inline">removal, concealment, alteration, or
destruction of the records of a National Insurer, National Agency, or other
person engaged in the business of insurance;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID69BCC6E36A3F4E69B29DFC39F59D3271"><enum>(D)</enum><text display-inline="yes-display-inline">transaction of the business of insurance in
violation of laws requiring a license therefore under the National Insurance
Act of 2006; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID02003DEB80AF4848BB5CA65F2E344463"><enum>(E)</enum><text display-inline="yes-display-inline">attempting to commit, aiding or abetting in
the commission of, or conspiracy to commit the acts or omissions specified in,
this paragraph; and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6395C48F81514AC6A037B59415FDEB32"><enum>(4)</enum><text display-inline="yes-display-inline">the term <term>insurance person</term>
means officers, directors, agents, or employees of National Insurers or
National Agencies, or other persons authorized to act on behalf of National
Insurers or National
Agencies.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDD378212955784AEEAA9EE43DE2687026" section-type="subsequent-section"><enum>1714.</enum><header>Amendments to
Americans with Disabilities Act of 1990</header><text display-inline="no-display-inline">Section 501(c) of the Americans with
Disabilities Act of 1990 (42 U.S.C. 12201(c)) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID4A9734C235CF48A4A616999818FDF95B"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraph (1), by inserting <quote>or
Federal</quote> after <quote>based on or not inconsistent with
State</quote>;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5245BF172E6E4D418598ECE1BFDF9715"><enum>(2)</enum><text display-inline="yes-display-inline">in paragraph (2), by inserting <quote>or
Federal</quote> after <quote>based on or not inconsistent with State</quote>;
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4FED4A59E15B4A61A5722B0CB948BC29"><enum>(3)</enum><text display-inline="yes-display-inline">in paragraph (3), by inserting <quote>or
Federal</quote> after <quote>subject to State</quote>.</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="ID65CEA805E23D433799BDB24638972031" section-type="subsequent-section"><enum>1715.</enum><header>Amendment to Age
Discrimination in Employment Act</header><text display-inline="no-display-inline">Section 12(c)(2) of the Age Discrimination
in Employment Act of 1967 (29 U.S.C. 631(c)(2)) is amended by inserting
<quote>and the Commissioner of National Insurance</quote> after <quote>after
consultation with the Secretary of the Treasury</quote>.</text>
</section><section commented="no" display-inline="no-display-inline" id="IDDFF284467F0645F8A1A58744FE0C963D" section-type="subsequent-section"><enum>1716.</enum><header>Amendments to the
<act-name parsable-cite="FCRA">Fair Credit Reporting
Act</act-name></header><text display-inline="no-display-inline">Section 621 of
the <act-name parsable-cite="FCRA">Fair Credit Reporting Act</act-name> (15
U.S.C. 1681s) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDFFCA683B34924222AA79C1FD8CB17C1E"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (b)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID32A8EDD241BA436895C04963FEE77658"><enum>(A)</enum><text display-inline="yes-display-inline">in paragraph (5), by striking
<quote>and</quote> after the semicolon;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID07AD011AA2804EF78D1BA178965A2EDD"><enum>(B)</enum><text display-inline="yes-display-inline">in paragraph (6), by striking the period at
the end and inserting <quote>; and</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID97D0B71980894F9194ADC08099B78228"><enum>(C)</enum><text display-inline="yes-display-inline">by inserting after paragraph (6) the
following:</text>
<quoted-block display-inline="no-display-inline" id="ID7960AB476819463D9AB4950BDF31EA0C" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID3EC7369351C8425C85AC68D4F79A78C1"><enum>(7)</enum><text display-inline="yes-display-inline">subtitle C of title I of the National
Insurance Act of 2006, by the Commissioner of National Insurance with respect
to any National Insurer, National Agency, and any federally licensed insurance
producer.</text>
</paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCFA757133A52473099E2E71EE1015EAF"><enum>(D)</enum><text display-inline="yes-display-inline">by adding after the flush matter at the end
the following: <quote>The terms used in paragraph (7) that are not defined in
this Act shall have the meaning given to them in section 3 of the National
Insurance Act of 2006.</quote>; and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF2BB7B8AFB504D858E34DEA370AF8E6B"><enum>(2)</enum><text display-inline="yes-display-inline">in subsection (e), by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="ID97882FB262BB4F0C9CD8E742B6F9462C" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID5A35C357A8DC4EC6B3E4EBA57AF2693D"><enum>(3)</enum><text display-inline="yes-display-inline">The Commissioner of National Insurance
shall prescribe such regulations as necessary to carry out the purpose of this
Act with respect to any persons identified under subsection
(b)(7).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section>