110 HR 1065 : Nonadmitted and Reinsurance U.S. House of Representatives 2007-06-26 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
IIB 110th CONGRESS 1st Session H. R. 1065 IN THE SENATE OF THE UNITED STATES June 26, 2007 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To streamline the regulation of nonadmitted insurance and reinsurance, and for other purposes.
1.
Short title and table of contents
(a)
Short title
This Act may be cited as the Nonadmitted and Reinsurance Reform Act of 2007. (b)
Table of contents
The table of contents for this Act is as follows: Sec. 1. Short title and table of contents. Sec. 2. Effective date. Title I—Nonadmitted insurance Sec. 101. Reporting, payment, and allocation of premium taxes. Sec. 102. Regulation of nonadmitted insurance by insured’s home State. Sec. 103. Participation in national producer database. Sec. 104. Uniform standards for surplus lines eligibility. Sec. 105. Streamlined application for commercial purchasers. Sec. 106. GAO study of nonadmitted insurance market. Sec. 107. Definitions. Title II—Reinsurance Sec. 201. Regulation of credit for reinsurance and reinsurance agreements. Sec. 202. Regulation of reinsurer solvency. Sec. 203. Definitions. Title III—Rule of construction Sec. 301. Rule of Construction.
2.
Effective date
Except as otherwise specifically provided in this Act, this Act shall take effect upon the expiration of the 12-month period beginning on the date of the enactment of this Act.
<enum>I</enum><header>Nonadmitted insurance</header> <section id="HB124C9FB006F4C508CD0FD331C673DB"><enum>101.</enum><header>Reporting, payment, and allocation of premium taxes</header> <subsection id="H88406397288941F9ACACC5E143AA506E"><enum>(a)</enum><header>Home State’s exclusive authority</header><text>No State other than the home State of an insured may require any premium tax payment for nonadmitted insurance.</text> </subsection><subsection id="HD36DF87D4ABE47C182F4F22EAEDAE6CE"><enum>(b)</enum><header>Allocation of nonadmitted premium taxes</header> <paragraph id="HD335E52A56B0425B82A6B4FD66EFFB81"><enum>(1)</enum><header>In general</header><text>The States may enter into a compact or otherwise establish procedures to allocate among the States the premium taxes paid to an insured’s home State described in subsection (a).</text> </paragraph><paragraph display-inline="no-display-inline" id="H04C60664CEA84790B0B370BB00B098E7"><enum>(2)</enum><header>Effective date</header><text display-inline="yes-display-inline">Except as expressly otherwise provided in such compact or other procedures, any such compact or other procedures—</text> <subparagraph id="HAEE218F8B46F46D6A8FE6E00741414FF"><enum>(A)</enum><text display-inline="yes-display-inline">if adopted on or before the expiration of the 330-day period that begins on the date of the enactment of this Act, shall apply to any premium taxes that, on or after such date of enactment, are required to be paid to any State that is subject to such compact or procedures; and</text> </subparagraph><subparagraph id="H1D905468EA564C1A8362DB5EE7BAED9E"><enum>(B)</enum><text display-inline="yes-display-inline">if adopted after the expiration of such 330-day period, shall apply to any premium taxes that, on or after January 1 of the first calendar year that begins after the expiration of such 330-day period, are required to be paid to any State that is subject to such compact or procedures.</text> </subparagraph></paragraph><paragraph id="HCB87DB4236F940278CD3E4FDCA9C1FE0"><enum>(3)</enum><header>Report</header><text display-inline="yes-display-inline">Upon the expiration of the 330-day period referred to in paragraph (2), the NAIC may submit a report to the Committee on Financial Services and Committee on the Judiciary of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate identifying and describing any compact or other procedures for allocation among the States of premium taxes that have been adopted during such period by any States.</text> </paragraph><paragraph id="HF36E6640F6064016BC00B8A31D9B10DC"><enum>(4)</enum><header>Nationwide system</header><text>The Congress intends that each State adopt a nationwide or uniform procedure, such as an interstate compact, that provides for the reporting, payment, collection, and allocation of premium taxes for nonadmitted insurance consistent with this section.</text> </paragraph></subsection><subsection id="H4326FFBA98214722B8E4A0A775C8CB02"><enum>(c)</enum><header>Allocation based on tax allocation report</header><text>To facilitate the payment of premium taxes among the States, an insured’s home State may require surplus lines brokers and insureds who have independently procured insurance to annually file tax allocation reports with the insured’s home State detailing the portion of the nonadmitted insurance policy premium or premiums attributable to properties, risks or exposures located in each State. The filing of a nonadmitted insurance tax allocation report and the payment of tax may be made by a person authorized by the insured to act as its agent.</text> </subsection></section><section id="H3C43AAD3291E44A5B172001676CF5373"><enum>102.</enum><header>Regulation of nonadmitted insurance by insured’s home State</header> <subsection id="H43DD0872EB3B46EAA25994738B592147"><enum>(a)</enum><header>Home State authority</header><text display-inline="yes-display-inline">Except as otherwise provided in this section, the placement of nonadmitted insurance shall be subject to the statutory and regulatory requirements solely of the insured’s home State.</text> </subsection><subsection id="H14D9455F47834AE08C3F906B87676532"><enum>(b)</enum><header>Broker licensing</header><text>No State other than an insured’s home State may require a surplus lines broker to be licensed in order to sell, solicit, or negotiate nonadmitted insurance with respect to such insured.</text> </subsection><subsection id="HC131CA9820DF469BB58B00421D459700"><enum>(c)</enum><header>Enforcement provision</header><text>Any law, regulation, provision, or action of any State that applies or purports to apply to nonadmitted insurance sold to, solicited by, or negotiated with an insured whose home State is another State shall be preempted with respect to such application.</text> </subsection><subsection id="H9A06F6D7A4F34ED9A864E6395CE222E7"><enum>(d)</enum><header>Workers’ compensation exception</header><text display-inline="yes-display-inline">This section may not be construed to preempt any State law, rule, or regulation that restricts the placement of workers’ compensation insurance or excess insurance for self-funded workers’ compensation plans with a nonadmitted insurer.</text> </subsection></section><section id="H927889A72F2A4DB18800C8D4E3174804"><enum>103.</enum><header>Participation in national producer database</header><text display-inline="no-display-inline">After the expiration of the 2-year period beginning on the date of the enactment of this Act, a State may not collect any fees relating to licensing of an individual or entity as a surplus lines broker in the State unless the State has in effect at such time laws or regulations that provide for participation by the State in the national insurance producer database of the NAIC, or any other equivalent uniform national database, for the licensure of surplus lines brokers and the renewal of such licenses.</text> </section><section id="H32AFF8E3DAB747FFB0D2B347ADC2ABB3"><enum>104.</enum><header>Uniform standards for surplus lines eligibility</header><text display-inline="no-display-inline">A State may not—</text> <paragraph id="HE8ABE5C6183844D49100512FBD9D09E5"><enum>(1)</enum><text display-inline="yes-display-inline">impose eligibility requirements on, or otherwise establish eligibility criteria for, nonadmitted insurers domiciled in a United States jurisdiction, except in conformance with section 5A(2) and 5C(2)(a) of the Non-Admitted Insurance Model Act; and</text> </paragraph><paragraph id="H1921FB1479754E78A4F9512F23089142"><enum>(2)</enum><text display-inline="yes-display-inline">prohibit a surplus lines broker from placing nonadmitted insurance with, or procuring nonadmitted insurance from, a nonadmitted insurer domiciled outside the United States that is listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the NAIC.</text> </paragraph></section><section id="H38B51461C68C4720AA5062895ED9BE84"><enum>105.</enum><header>Streamlined application for commercial purchasers</header><text display-inline="no-display-inline">A surplus lines broker seeking to procure or place nonadmitted insurance in a State for an exempt commercial purchaser shall not be required to satisfy any State requirement to make a due diligence search to determine whether the full amount or type of insurance sought by such exempt commercial purchaser can be obtained from admitted insurers if—</text> <paragraph id="H7B8F28105D6A4EF1943F7F79E47DF6E4"><enum>(1)</enum><text>the broker procuring or placing the surplus lines insurance has disclosed to the exempt commercial purchaser that such insurance may or may not be available from the admitted market that may provide greater protection with more regulatory oversight; and</text> </paragraph><paragraph id="H28A23F93F6894C7CB7CB2C24CB18005F"><enum>(2)</enum><text>the exempt commercial purchaser has subsequently requested in writing the broker to procure or place such insurance from a nonadmitted insurer.</text> </paragraph></section><section display-inline="no-display-inline" id="H5E13C601380A44DB893E37E85E92EA2E" section-type="subsequent-section"><enum>106.</enum><header>GAO study of nonadmitted insurance market</header> <subsection id="H965DEDF094CA481BAFB978D3020262BF"><enum>(a)</enum><header>In general</header><text>The Comptroller General of the United States shall conduct a study of the nonadmitted insurance market to determine the effect of the enactment of this title on the size and market share of the nonadmitted insurance market for providing coverage typically provided by the admitted insurance market.</text> </subsection><subsection id="HBE02FA8D73754D06AFC51618F87E4BD6"><enum>(b)</enum><header>Contents</header><text>The study shall determine and analyze—</text> <paragraph id="HADCD850826F84BFD87877D6E449DCDC"><enum>(1)</enum><text>the change in the size and market share of the nonadmitted insurance market and in the number of insurance companies and insurance holding companies providing such business in the 18-month period that begins upon the effective date of this Act;</text> </paragraph><paragraph id="H889DC4DE26E64CE20033500013C0C7B5"><enum>(2)</enum><text>the extent to which insurance coverage typically provided by the admitted insurance market has shifted to the nonadmitted insurance market;</text> </paragraph><paragraph id="HBCE80C6527714335ACDCAFED41CEF600"><enum>(3)</enum><text>the consequences of any change in the size and market share of the nonadmitted insurance market, including differences in the price and availability of coverage available in both the admitted and nonadmitted insurance markets;</text> </paragraph><paragraph id="H73936E67AD444149BC771D9829432325"><enum>(4)</enum><text>the extent to which insurance companies and insurance holding companies that provide both admitted and nonadmitted insurance have experienced shifts in the volume of business between admitted and nonadmitted insurance; and</text> </paragraph><paragraph id="H0225CA568AB34F84A32204D2D458469D"><enum>(5)</enum><text>the extent to which there has been a change in the number of individuals who have nonadmitted insurance policies, the type of coverage provided under such policies, and whether such coverage is available in the admitted insurance market.</text> </paragraph></subsection><subsection id="H2F0D637118A14702ADA352E1E0F59BD"><enum>(c)</enum><header>Consultation with NAIC</header><text>In conducting the study under this section, the Comptroller General shall consult with the NAIC.</text> </subsection><subsection id="HCFBF77193BAC4D7493819EC2ADF8B5BC"><enum>(d)</enum><header>Report</header><text>The Comptroller General shall complete the study under this section and submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate regarding the findings of the study not later than 30 months after the effective date of this Act.</text> </subsection></section><section id="HCCD3CCF865614A3BA546004C95D9DBA8"><enum>107.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title, the following definitions shall apply:</text> <paragraph id="HBDBDD4269B044EADA02552F65904FF4"><enum>(1)</enum><header>Admitted insurer</header><text>The term <quote>admitted insurer</quote> means, with respect to a State, an insurer licensed to engage in the business of insurance in such State.</text> </paragraph><paragraph id="HE4A45AA9ABEE49789BE3C4F8487B72EA"><enum>(2)</enum><header>Exempt commercial purchaser</header><text display-inline="yes-display-inline">The term <quote>exempt commercial purchaser</quote> means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:</text> <subparagraph id="H856715D9EC8E4339ABA42123EEA9E642"><enum>(A)</enum><text>The person employs or retains a qualified risk manager to negotiate insurance coverage.</text> </subparagraph><subparagraph display-inline="no-display-inline" id="H8984BE3C6ADA4E45AA0562F2A9D7F7C"><enum>(B)</enum><text>The person has paid aggregate nationwide commercial property and casualty insurance premiums in excess of $100,000 in the immediately preceding 12 months.</text> </subparagraph><subparagraph id="HB0609E246A944FDCB8F1EBAF27A3514E"><enum>(C)</enum><clause commented="no" display-inline="yes-display-inline" id="HB9DF37B3C096445B8251EA8C69431CA1"><enum>(i)</enum><text>The person meets at least one of the following criteria:</text> <subclause id="H70E5D71CEACB4489B1908EEDE4482C2" indent="up1"><enum>(I)</enum><text>The person possesses a net worth in excess of $20,000,000, as such amount is adjusted pursuant to clause (ii).</text> </subclause><subclause id="H3B76B24B18A948D8B8AC2658C392BFAD" indent="up1"><enum>(II)</enum><text>The person generates annual revenues in excess of $50,000,000, as such amount is adjusted pursuant to clause (ii).</text> </subclause><subclause id="H4D6607015F8B4750AF7DF88100259F4E" indent="up1"><enum>(III)</enum><text>The person employs more than 500 full time or full time equivalent employees per individual insured or is a member of affiliated group employing more than 1,000 employees in the aggregate.</text> </subclause><subclause id="H6BEA58D3C821453FA835A0F37000005E" indent="up1"><enum>(IV)</enum><text>The person is a not-for-profit organization or public entity generating annual budgeted expenditures of at least $30,000,000, as such amount is adjusted pursuant to clause (ii).</text> </subclause><subclause id="H8B379F6E4F254FF38CBD2BB8284747C9" indent="up1"><enum>(V)</enum><text>The person is a municipality with a population in excess of 50,000 persons.</text> </subclause></clause><clause id="HD2F4D9B6045F47F489440052E6D82B9D" indent="up1"><enum>(ii)</enum><text>Effective on the fifth January 1 occurring after the date of the enactment of this Act and each fifth January 1 occurring thereafter, the amounts in subclauses (I), (II), and (IV) of clause (i) shall be adjusted to reflect the percentage change for such five-year period in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.</text> </clause></subparagraph></paragraph><paragraph commented="no" id="H1B1F8071050748D7B7FF4E56985CE2E8"><enum>(3)</enum><header>Home State</header><text>The term <quote>home State</quote> means the State in which an insured maintains its principal place of business or, in the case of an individual, the individual’s principal residence.</text> </paragraph><paragraph id="HD5B00869E11045569EC37CEFA2B70F9"><enum>(4)</enum><header>Independently procured insurance</header><text>The term <quote>independently procured insurance</quote> means insurance procured directly by an insured from a nonadmitted insurer.</text> </paragraph><paragraph display-inline="no-display-inline" id="H3033EFAD65AE444BA9A0EA31D0FFF1E"><enum>(5)</enum><header>NAIC</header><text>The term <quote>NAIC</quote> means the National Association of Insurance Commissioners or any successor entity.</text> </paragraph><paragraph id="H619B7E959B944979B261EA9BB9C9410"><enum>(6)</enum><header>Nonadmitted insurance</header><text>The term <quote>nonadmitted insurance</quote> means any property and casualty insurance permitted to be placed directly or through a surplus lines broker with a nonadmitted insurer eligible to accept such insurance.</text> </paragraph><paragraph id="H5373C1171E7D43B2B4898043D1D9DBAD"><enum>(7)</enum><header>Non-admitted insurance model act</header><text>The term <quote>Non-Admitted Insurance Model Act</quote> means the provisions of the Non-Admitted Insurance Model Act, as adopted by the NAIC on August 3, 1994, and amended on September 30, 1996, December 6, 1997, October 2, 1999, and June 8, 2002.</text> </paragraph><paragraph id="HBD7DBE022F1345BDAB3718FA361100A9"><enum>(8)</enum><header>Nonadmitted insurer</header><text>The term <quote>nonadmitted insurer</quote> means, with respect to a State, an insurer not licensed to engage in the business of insurance in such State.</text> </paragraph><paragraph id="HB11F0B76EEE34739B520B1EB6DAFB2F"><enum>(9)</enum><header>Qualified risk manager</header><text display-inline="yes-display-inline">The term <quote>qualified risk manager</quote> means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements:</text> <subparagraph id="H134D0A4786794186AE03EAA2BECFE19D"><enum>(A)</enum><text>The person is an employee of, or third party consultant retained by, the commercial policyholder.</text> </subparagraph><subparagraph id="HB43FE9DCE437457B008BB0B616131421"><enum>(B)</enum><text>The person provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance.</text> </subparagraph><subparagraph id="H449A8E99EA6C417FB8A34B63E61EB51C"><enum>(C)</enum><text display-inline="yes-display-inline">The person—</text> <clause id="HAD450BA09FE345D88FA3D400336E9F85"><enum>(i)</enum><subclause commented="no" display-inline="yes-display-inline" id="H1E3D737BBC0143C7A4E3D8FF82D1CF2"><enum>(I)</enum><text>has a bachelor’s degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a State insurance commissioner or other State regulatory official or entity to demonstrate minimum competence in risk management; and</text> </subclause><subclause id="H20FEC994D3A3451DB9C101C41FFC10FC" indent="up1"><enum>(II)</enum><item commented="no" display-inline="yes-display-inline" id="H830D0EA9723B4E9DB0406800694E325F"><enum>(aa)</enum><text display-inline="yes-display-inline">has three years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance; or</text> </item><item id="H0E869BB180624DB0980030FC001CAA62" indent="up1"><enum>(bb)</enum><text>has one of the following designations:</text> <subitem id="H0B777C6F4B76487EB64C9ED500F504D0"><enum>(AA)</enum><text>a designation as a Chartered Property and Casualty Underwriter (in this subparagraph referred to as <quote>CPCU</quote>) issued by the American Institute for CPCU/Insurance Institute of America;</text> </subitem><subitem id="HF0DFC14D190A4007881FB8DD21002677"><enum>(BB)</enum><text>a designation as an Associate in Risk Management (ARM) issued by the American Institute for CPCU/Insurance Institute of America;</text> </subitem><subitem id="H68E92B974D6B4FB18EF202FC6BC88D8E"><enum>(CC)</enum><text>a designation as Certified Risk Manager (CRM) issued by the National Alliance for Insurance Education & Research;</text> </subitem><subitem id="HB881F4AB61B94651B927DE06668952D1"><enum>(DD)</enum><text>a designation as a RIMS Fellow (RF) issued by the Global Risk Management Institute; or</text> </subitem><subitem id="H0FBEC18FDDF040E595BEEB4E1954A4AE"><enum>(EE)</enum><text>any other designation, certification, or license determined by a State insurance commissioner or other State insurance regulatory official or entity to demonstrate minimum competency in risk management;</text> </subitem></item></subclause></clause><clause id="HE55602579E7241F6A73693301BD92BFC"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="H0D32C3BC585E462BA68B835645BEE0C4"><enum>(I)</enum><text>has at least seven years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; and</text> </subclause><subclause id="H5FB1FBFB5BCA4F2BBDB9EDE767311B1F" indent="up1"><enum>(II)</enum><text>has any one of the designations specified in subitems (AA) through (EE) of clause (i)(II)(bb);</text> </subclause></clause><clause id="HDB904E89B97C49559528CDBA761CB463"><enum>(iii)</enum><text>has at least 10 years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; or</text> </clause><clause id="HA810C19EE260423DB96F1B4C66D398C4"><enum>(iv)</enum><text display-inline="yes-display-inline">has a graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a State insurance commissioner or other State regulatory official or entity to demonstrate minimum competence in risk management.</text> </clause></subparagraph></paragraph><paragraph id="HC9BA56176A28470E88F2DCF73B979E3E"><enum>(10)</enum><header>Premium tax</header><text>The term <quote>premium tax</quote> means, with respect to surplus lines or independently procured insurance coverage, any tax, fee, assessment, or other charge imposed by a State on an insured based on any payment made as consideration for an insurance contract for such insurance, including premium deposits, assessments, registration fees, and any other compensation given in consideration for a contract of insurance.</text> </paragraph><paragraph id="H86072A9395CD4360962657E1103411A6"><enum>(11)</enum><header>Surplus lines broker</header><text>The term <quote>surplus lines broker</quote> means an individual, firm, or corporation which is licensed in a State to sell, solicit, or negotiate insurance on properties, risks, or exposures located or to be performed in a State with nonadmitted insurers.</text> </paragraph><paragraph display-inline="no-display-inline" id="HDD7D45E7F976423BAC64DB486800F55F"><enum>(12)</enum><header>State</header><text>The term <quote>State</quote> includes any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa.</text> </paragraph></section><enum>II</enum><header>Reinsurance</header> <section id="HC7EE9260FA544066AFCA4E2352CBCE2D" section-type="subsequent-section"><enum>201.</enum><header>Regulation of credit for reinsurance and reinsurance agreements</header> <subsection id="HFD3C3A1EE9FD40A3805F77A8FC07115F"><enum>(a)</enum><header>Credit for reinsurance</header><text>If the State of domicile of a ceding insurer is an NAIC-accredited State, or has financial solvency requirements substantially similar to the requirements necessary for NAIC accreditation, and recognizes credit for reinsurance for the insurer’s ceded risk, then no other State may deny such credit for reinsurance.</text> </subsection><subsection display-inline="no-display-inline" id="HE93A3BEE3CDF4D9896B5008CA944CA46"><enum>(b)</enum><header>Additional preemption of extraterritorial application of State law</header><text display-inline="yes-display-inline">In addition to the application of subsection (a), all laws, regulations, provisions, or other actions of a State that is not the domiciliary State of the ceding insurer, except those with respect to taxes and assessments on insurance companies or insurance income, are preempted to the extent that they—</text> <paragraph id="H58FE8469C418479FBC72A27F65B4D929"><enum>(1)</enum><text display-inline="yes-display-inline">restrict or eliminate the rights of the ceding insurer or the assuming insurer to resolve disputes pursuant to contractual arbitration to the extent such contractual provision is not inconsistent with the provisions of title 9, United States Code;</text> </paragraph><paragraph id="H9E91A84325074610ADDE72F86007B78"><enum>(2)</enum><text>require that a certain State’s law shall govern the reinsurance contract, disputes arising from the reinsurance contract, or requirements of the reinsurance contract;</text> </paragraph><paragraph id="H59CFA5E623864D0DBC1299D92BECC866"><enum>(3)</enum><text>attempt to enforce a reinsurance contract on terms different than those set forth in the reinsurance contract, to the extent that the terms are not inconsistent with this title; or</text> </paragraph><paragraph id="H0A15E4F48578480E88C1FAAE0360C8FE"><enum>(4)</enum><text>otherwise apply the laws of the State to reinsurance agreements of ceding insurers not domiciled in that State.</text> </paragraph></subsection></section><section display-inline="no-display-inline" id="H72EA6EDED4AE486AADDAD5D6C8AA8BD" section-type="subsequent-section"><enum>202.</enum><header>Regulation of reinsurer solvency</header> <subsection id="H638FF8F9203343F084B5AD9D54FB4D5F"><enum>(a)</enum><header>Domiciliary state regulation</header><text display-inline="yes-display-inline">If the State of domicile of a reinsurer is an NAIC-accredited State or has financial solvency requirements substantially similar to the requirements necessary for NAIC accreditation, such State shall be solely responsible for regulating the financial solvency of the reinsurer.</text> </subsection><subsection display-inline="no-display-inline" id="H4E22D09B1B804A64948EA5161C98F3F4"><enum>(b)</enum><header>Nondomiciliary states</header> <paragraph id="H6E29F1783A0C4A58ABFA2766F402747"><enum>(1)</enum><header>Limitation on financial information requirements</header><text display-inline="yes-display-inline">If the State of domicile of a reinsurer is an NAIC-accredited State or has financial solvency requirements substantially similar to the requirements necessary for NAIC accreditation, no other State may require the reinsurer to provide any additional financial information other than the information the reinsurer is required to file with its domiciliary State.</text> </paragraph><paragraph id="H7D00237C491744E0B2B14624A22B4763"><enum>(2)</enum><header>Receipt of information</header><text display-inline="yes-display-inline">No provision of this section shall be construed as preventing or prohibiting a State that is not the State of domicile of a reinsurer from receiving a copy of any financial statement filed with its domiciliary State.</text> </paragraph></subsection></section><section display-inline="no-display-inline" id="H4F4FDEAC3D614F90B5ED19BB616263F9" section-type="subsequent-section"><enum>203.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title, the following definitions shall apply:</text> <paragraph id="HA888B6AD4D67410F9200A75532C356D3"><enum>(1)</enum><header>Ceding insurer</header><text>The term <quote>ceding insurer</quote> means an insurer that purchases reinsurance.</text> </paragraph><paragraph id="HD5106C1CC3D84E2EA1FB01123F133150"><enum>(2)</enum><header>Domiciliary State</header><text>The terms <quote>State of domicile</quote> and <quote>domiciliary State</quote> means, with respect to an insurer or reinsurer, the State in which the insurer or reinsurer is incorporated or entered through, and licensed.</text> </paragraph><paragraph id="H0B728D936A8C405EB2202D82C3674534"><enum>(3)</enum><header>Reinsurance</header><text>The term <quote>reinsurance</quote> means the assumption by an insurer of all or part of a risk undertaken originally by another insurer.</text> </paragraph><paragraph id="H9CFED3A3EC774A3D93CEB48CD772A023"><enum>(4)</enum><header>Reinsurer</header> <subparagraph id="HA6B6906F87BA4D83BE78B7E0AA153FFA"><enum>(A)</enum><header>In general</header><text>The term “reinsurer” means an insurer to the extent that the insurer—</text> <clause id="H7C39727EBD4A4C16AF3541D5C5310000"><enum>(i)</enum><text>is principally engaged in the business of reinsurance;</text> </clause><clause id="H8DEDBA9EB80A43E9A3B540F914598B7C"><enum>(ii)</enum><text>does not conduct significant amounts of direct insurance as a percentage of its net premiums; and</text> </clause><clause id="H850A0744903C442AA1C8ED4835B6D86"><enum>(iii)</enum><text>is not engaged in an ongoing basis in the business of soliciting direct insurance.</text> </clause></subparagraph><subparagraph id="H8C042EA0FC7F43CB943987074CC81DC2"><enum>(B)</enum><header>Determination</header><text>A determination of whether an insurer is a reinsurer shall be made under the laws of the State of domicile in accordance with this paragraph.</text> </subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H2E97270E5D1B495092AB00EDA4862CAA"><enum>(5)</enum><header>State</header><text>The term <quote>State</quote> includes any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa.</text> </paragraph></section><enum>III</enum><header>Rule of construction</header> <section id="HE0D429D366834587B0B67B55DC2C6832"><enum>301.</enum><header>Rule of Construction</header><text display-inline="no-display-inline">Nothing in this Act or amendments to this Act shall be construed to modify, impair, or supersede the application of the antitrust laws. Any implied or actual conflict between this Act and any amendments to this Act and the antitrust laws shall be resolved in favor of the operation of the antitrust laws.</text> </section> Passed the House of Representatives June 25, 2007. Lorraine C. Miller, Clerk.