[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 40 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                 S. 40

To authorize the issuance of Federal charters and licenses for carrying 
 on the sale, solicitation, negotiation, and underwriting of insurance 
 or any other insurance operations, to provide a comprehensive system 
  for the Federal regulation and supervision of national insurers and 
national agencies, to provide for policyholder protections in the event 
of an insolvency or the impairment of a national insurer, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 24, 2007

Mr. Sununu (for himself and Mr. Johnson) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To authorize the issuance of Federal charters and licenses for carrying 
 on the sale, solicitation, negotiation, and underwriting of insurance 
 or any other insurance operations, to provide a comprehensive system 
  for the Federal regulation and supervision of national insurers and 
national agencies, to provide for policyholder protections in the event 
of an insolvency or the impairment of a national insurer, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``National Insurance 
Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
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. Regulatory supervision and relationship to State law.
Sec. 1126. Preservation of office records.
Sec. 1127. Compliance with anti-money laundering requirements.
           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 suspension, removal, 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.
Sec. 1163. Civil remedy.
 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. Participating policy procedures.
Sec. 1206. Conversion of State insurer to national insurer or State 
                            insurance agency to national agency.
Sec. 1207. Conversion of national insurer to State insurer or national 
                            agency to State agency.
Sec. 1208. Powers.
Sec. 1209. Separate accounts of national life insurer.
Sec. 1210. Protected cells.
Sec. 1211. Chartering and licensing commencement date.
         Subtitle B--Financial, Product, and Market Regulations

Sec. 1212. Transitional financial regulations.
Sec. 1213. Other financial regulations.
Sec. 1214. Product regulation for national life insurers.
Sec. 1215. Product regulation for national property/casualty insurers.
Sec. 1216. Regulation of sales and marketing.
Sec. 1217. Prompt corrective action.
                        Subtitle C--Reinsurance

Sec. 1221. Federal licensing of reinsurers.
Sec. 1222. Credit for insurance ceded by a national insurer or 
                            federally licensed reinsurer.
Sec. 1223. Relationship to State law.
Sec. 1224. Freedom of commercial contract.
Sec. 1225. Review by the Commissioner.
     Subtitle D--Acquisitions of Control; Mergers; Bulk Transfers; 
                             Domestication

Sec. 1231. Acquisition of control of national insurers.
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.
Sec. 1253. State taxation of non-admitted and surplus lines insurance.
  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. Effect of receivership proceeding.
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 associations.
Sec. 1603. Establishment of the National Insurance Guaranty 
                            Corporation.
Sec. 1604. Benefits for policyholders of national life 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. Regulations.
Sec. 1610. State taxation.
Sec. 1611. Examination of the Corporation; annual report.
Sec. 1612. Immunity.
     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 the 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 the Americans with Disabilities Act of 1990.
Sec. 1715. Amendment to the Age Discrimination in Employment Act.
Sec. 1716. Amendments to the Fair Credit Reporting Act.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to 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) to 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) to provide for the appointment of a Commissioner of 
        National Insurance, who, among other duties, is authorized--
                    (A) to issue Federal charters and licenses to 
                insurers and insurance producers;
                    (B) to 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) to 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.

SEC. 3. DEFINITIONS.

    In this Act, the following definitions shall apply:
            (1) Affiliate.--The term ``affiliate'' means any person 
        that controls, is controlled by, or is under common control 
        with another person.
            (2) Business entity.--The term ``business entity'' means a 
        corporation, association, partnership, trust, limited liability 
        company, limited liability partnership, or other legal entity.
            (3) Business of insurance.--The term ``business of 
        insurance'' has the meaning given to such term in section 
        1033(f) of title 18, United States Code.
            (4) Commissioner.--The term ``Commissioner'' means the 
        Commissioner of National Insurance.
            (5) Control.--
                    (A) In general.--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 person, 
                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.
                    (B) Special rule.--For purposes of sections 
                1204(c), 1231, 1243(g), and title IV, 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) Corporate governance procedures.--The term ``corporate 
        governance procedures'' includes rules governing--
                    (A) corporate finance;
                    (B) shareholders, members, policyholders, 
                directors, and officers and meetings, elections, 
                voting, and notice relating to such persons;
                    (C) indemnification of directors and officers and 
                insurance for indemnification of directors and 
                officers; and
                    (D) the duties of shareholders, directors, and 
                officers (including any duty of care or duty of fair 
                dealing and any business judgment rule).
            (7) Corporation.--The term ``Corporation'' means the 
        National Insurance Guaranty Corporation established under 
        section 1603.
            (8) Federal banking agencies.--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.
            (9) Federally licensed insurance producer.--The 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.
            (10) Fraudulent insurance act.--The term ``fraudulent 
        insurance act'' has the meaning given to such term in section 
        1037A(d)(3) of title 18, United States Code.
            (11) Functional regulator.--The term ``functional 
        regulator'' means--
                    (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.
            (12) Functionally regulated affiliate.--The term 
        ``functionally regulated affiliate'' means--
                    (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.
            (13) Insolvency; insolvent.--
                    (A) In general.--The term ``insolvency'' or 
                ``insolvent'' means the inability of an insurer to pay 
                its obligations when they are due or when the 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) Liabilities.--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.
            (14) Insurance operations.--The term ``insurance 
        operations'' includes--
                    (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;
                    (D) all acts and transactions relating to the 
                establishment of rates, rules, risk classifications, 
                rating classifications, rating territories, and forms 
                (including, endorsements, addendums, and policy 
                language) for insurance;
                    (E) all acts and transactions relating to marketing 
                and sales practices;
                    (F) financial condition and solvency;
                    (G) holding company transactions; and
                    (H) corporate governance.
            (15) Insurance person.--The term ``insurance person'' has 
        the same meaning as in section 1037A(d)(4) of title 18, United 
        States Code.
            (16) Insurance producer.--The term ``insurance producer''--
                    (A) 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, non-admitted insurance, and surplus lines of 
                insurance; and
                    (B) does not include--
                            (i) a national insurer;
                            (ii) an officer, director, or employee of a 
                        national insurer or of an insurance producer--
                                    (I) if 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
                                    (II) if--
                                            (aa) the activities of the 
                                        officer, director, or employee 
                                        are executive, administrative, 
                                        managerial, clerical, or a 
                                        combination thereof, and are 
                                        only indirectly related to the 
                                        sale, solicitation, or 
                                        negotiation of insurance;
                                            (bb) the functions of the 
                                        officer, director, or employee 
                                        relate to underwriting, loss 
                                        control, inspection, or the 
                                        processing, adjusting, 
                                        investigating, or settling of a 
                                        claim on a policy of insurance; 
                                        or
                                            (cc) 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;
                            (iii) 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;
                            (iv) an employer or association or its 
                        officers, directors, employees, or the trustees 
                        of an employee trust plan, to the extent that 
                        the employer, association, officer, director, 
                        employee, 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 employer, 
                        association, officer, director, employee, or 
                        trustee is not in any manner compensated, 
                        directly or indirectly, by the national 
                        insurer;
                            (v) 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;
                            (vi) 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;
                            (vii) 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;
                            (viii) a person that sells, solicits, or 
                        negotiates a funding agreement; or
                            (ix) any other kind of person identified by 
                        the Commissioner, by regulation, as not being 
                        an insurance producer for purposes of this Act.
            (17) Insurance securitization.--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.
            (18) Insurer-affiliated party.--The term ``insurer-
        affiliated party'' means--
                    (A) any director, officer, employee, or controlling 
                shareholder 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, consultant, joint venture 
                partner, and any other person as determined by the 
                Commissioner (by regulation or order) 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 the 
                policyholders of a national insurer 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 as a whole of a national insurer.
            (19) Insurer in fraternal form.--The 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.
            (20) NAIC.--The term ``NAIC'' means the National 
        Association of Insurance Commissioners.
            (21) National agency.--The term ``national agency'' means a 
        national insurance agency chartered under section 1201.
            (22) National insurer.--The term ``national insurer'' means 
        a national insurance company chartered under section 1201.
            (23) National life insurer.--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, and funding 
        agreements.
            (24) National property/casualty insurer.--The 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.
            (25) Negotiate.--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.
            (26) Non-admitted insurance.--The term ``non-admitted 
        insurance'' means any property/casualty insurance permitted to 
        be placed directly or through an insurance producer with a non-
        admitted insurer eligible to accept such insurance.
            (27) Non-admitted insurer.--The term ``non-admitted 
        insurer'' means an insurer that is not licensed to engage in 
        the business of insurance in a State and that--
                    (A) satisfies the eligibility requirements of the 
                State in which an insured maintains its principal place 
                of business, or, in the case of an individual, 
                maintains a principal residence; and
                    (B) is not a national insurer.
            (28) Non-united states insurer.--The term ``non-United 
        States insurer'' means a business entity that is organized 
        under the law of a foreign country to sell, solicit, negotiate, 
        and underwrite insurance, but is not so organized under the 
        laws of a State, and is not a national insurer.
            (29) Office.--The term ``Office'' means the Office of 
        National Insurance.
            (30) Participating policy procedures.--The term 
        ``participating policy procedures''--
                    (A) means the rules applicable to a life insurer in 
                mutual form, by which the insurer ascertains divisible 
                surplus and apportions an amount of divisible surplus 
                to participating insurance policies; and
                    (B) does not include any limitation on the amount 
                of surplus that may be retained by a life insurer in 
                mutual form.
            (31) Person.--The term ``person'' means any natural person, 
        business entity, governmental body or entity, voluntary 
        organization, or similar organization.
            (32) Policy of insurance; insurance policy.--The term 
        ``policy of insurance'' or ``insurance policy'' means a policy, 
        contract, certificate, or other evidence of insurance. ``Policy 
        of insurance'' or ``insurance policy'' includes an annuity 
        contract and a funding agreement, but does not include a 
        reinsurance contract.
            (33) Policyholder.--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.
            (34) Property/casualty insurance.--The 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.
            (35) Protected cell.--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.
            (36) Protected cell account.--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.
            (37) Sell.--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.
            (38) Separate account.--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.
            (39) Solicit.--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.
            (40) State.--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.
            (41) State insurance agency.--The term ``State insurance 
        agency'' means an insurance producer that is organized under 
        the laws of a State.
            (42) State insurer.--The term ``State insurer'' means an 
        insurer incorporated or organized under the laws of a State.
            (43) Subsidiary.--The term ``subsidiary'' means a business 
        entity controlled, directly or indirectly, by another business 
        entity. For 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.
            (44) Surplus lines of insurance.--The term ``surplus lines 
        of insurance'' means insurance on properties, risks, or 
        exposures located or to be performed in a State with a non-
        admitted insurer that is sold, solicited, or negotiated by a 
        national agency, federally licensed insurance producer, or 
        other insurance producer.
            (45) Title insurance.--The term ``title insurance'' or 
        ``business of title insurance'' means any of the following:
                    (A) A contract insuring or indemnifying the owners 
                of real or personal property, or other persons lawfully 
                interested therein, against loss or damage arising from 
                any of the following conditions, or the reinsurance 
                thereof:
                            (i) Defects in or any liens or encumbrances 
                        on the insured title.
                            (ii) Unmarketability of the insured title.
                            (iii) Invalidity, lack of priority, or 
                        unenforceability of any liens or encumbrances 
                        on the stated property.
                            (iv) Lack of legal right of access to the 
                        land.
                            (v) Unenforceability of rights in title to 
                        the real or personal property.
                    (B) Insuring the correctness of searches and 
                examinations of all instruments, liens, or charges 
                affecting the title to real or personal property.
                    (C) Procuring and furnishing information relative 
                to the title to real or personal property, including 
                abstracting, searching, and examining titles.
                    (D) Handling escrows, settlements, or closings done 
                in conjunction with subparagraph (A), (B), (C), (E), or 
                (F).
                    (E) Any product or service defined by the laws of 
                any State, whether by statute, regulation, or 
                administrative determination, as title insurance.
                    (F) Doing or proposing to do any business 
                substantially equivalent to any of the activities 
                described in this paragraph, in a manner designed to 
                evade the provisions of this Act.
            (46) Title insurer.--The term ``title insurer'' means a 
        company organized under the laws of a State for the purpose of 
        conducting the business of title insurance.
            (47) Trusteed assets.--The term ``trusteed assets'' means, 
        with respect to a United States branch, 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.
            (48) Trusteed surplus.--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).
            (49) United states branch.--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.
            (50) United states holding company.--The 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.
            (51) Violation.--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.
            (52) Voting securities.--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.

                 TITLE I--OFFICE OF NATIONAL INSURANCE

       Subtitle A--Establishment of Office of National Insurance

SEC. 1101. ESTABLISHMENT.

    (a) In General.--There is established, in the Department of the 
Treasury, the Office of National Insurance, which shall be headed by 
the Commissioner of National Insurance.
    (b) Offices.--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.
    (c) Funding.--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.
    (d) Applicability of Administrative Procedures Act.--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.
    (e) Annual Report.--The Commissioner shall prepare and submit to 
Congress an annual report on the activities of the Office.

SEC. 1102. COMMISSIONER OF NATIONAL INSURANCE.

    (a) Appointment.--
            (1) In general.--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.
            (2) Term.--The Commissioner shall be appointed for a term 
        of 5 years.
            (3) Vacancy.--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.
            (4) Service after term.--An individual may serve as the 
        Commissioner after the expiration of the term for which 
        appointed until the earlier of--
                    (A) such time as a successor has been appointed; or
                    (B) 1 year after the expiration of the individual's 
                term.
            (5) Prohibition on financial interests.--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.
            (6) Oversight.--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.
            (7) Executive schedule.--
                    (A) In general.--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.
                    (B) Technical amendment.--Section 5314 of title 5, 
                United States Code, is amended by inserting 
                ``Commissioner of National Insurance, Department of the 
                Treasury.'' as a new item after ``Administrator, 
                Pipeline and Hazardous Materials Safety 
                Administration.''.
    (b) Powers of the Commissioner.--
            (1) In general.--
                    (A) Powers.--The Commissioner shall--
                            (i) oversee the organization, 
                        incorporation, operation, regulation, and 
                        supervision of national insurers and national 
                        agencies;
                            (ii) issue charters and licenses for 
                        national insurers and national agencies;
                            (iii) license, regulate, and supervise 
                        federally licensed insurance producers other 
                        than national agencies; and
                            (iv) 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.
                    (B) Final agency action.--A determination of the 
                Commissioner under subparagraph (A)(iv) shall be the 
                final agency action for purposes of judicial review of 
                that action.
            (2) Rulemaking.--
                    (A) Issuance of regulations and other actions.--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.
                    (B) Autonomy.--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.
                    (C) No delegation permitted.--The Commissioner may 
                not delegate any authority conferred under subparagraph 
                (A) to any insurance self-regulatory organization.
            (3) Litigation authority.--
                    (A) In general.--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.
                    (B) Enforcement.--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.
            (4) Consultation with state insurance regulators.--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.
            (5) International coordination and cooperation.--
                    (A) In general.--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.
                    (B) Foreign insurance regulators.--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--
                            (i) the development and implementation of 
                        international regulatory standards; and
                            (ii) the development and implementation of 
                        bilateral and multilateral mutual recognition 
                        agreements on the licensing of insurance 
                        companies and insurance producers.
                    (C) Consultation and cooperation.--In exercising 
                the authority granted under subparagraphs (A) and (B), 
                the Commissioner--
                            (i) shall consult and cooperate with the 
                        Executive Office of the President and the 
                        United States Trade Representative; and
                            (ii) may include a representative of any 
                        interested State insurance regulators as the 
                        Commissioner determines to be appropriate.
            (6) Independence in congressional testimony and 
        recommendations.--Section 111 of Public Law 93-495 (12 U.S.C. 
        250) is amended by inserting ``the Commissioner of National 
        Insurance,'' after ``the Director of the Office of Thrift 
        Supervision,''.
    (c) GAO Audit.--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.

SEC. 1103. OFFICE PERSONNEL MATTERS.

    (a) In General.--The Commissioner may employ such examiners, 
lawyers, accountants, actuaries, and other employees as are necessary 
to carry out the provisions of this Act.
    (b) Compensation.--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.
    (c) Additional Compensation.--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.
    (d) Acting Commissioner.--The Commissioner shall designate an 
employee of the Office to serve as the Acting Commissioner during the 
absence or disability of the Commissioner.
    (e) Delegation of Powers.--
            (1) Employees and others.--Unless otherwise prohibited by 
        this Act, the Commissioner may delegate to any employee, 
        representative, or agent any power of the Commissioner.
            (2) Self-regulatory organizations.--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.

SEC. 1104. DIVISION OF INSURANCE FRAUD.

    (a) Establishment.--There is established, within the Office, a 
Division of Insurance Fraud.
    (b) Authority.--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.

SEC. 1105. DIVISION OF CONSUMER AFFAIRS.

    (a) Establishment.--There is established, within the Office, a 
Division of Consumer Affairs.
    (b) Authority.--The Division of Consumer Affairs shall support the 
Commissioner in the implementation and enforcement of the market 
conduct regulations issued pursuant to section 1216.

SEC. 1106. INSURANCE SELF-REGULATORY ORGANIZATIONS.

    (a) Authority of the Commissioner.--Subject to the terms of this 
section, and the regulations issued pursuant to this section, the 
Commissioner shall have the authority to--
            (1) provide for the registration of an insurance self-
        regulatory organization; and
            (2) supervise and regulate any registered insurance self-
        regulatory organization, which shall include the authority to--
                    (A) review, approve, abrogate, modify, or add to 
                the operating rules of an insurance self-regulatory 
                organization;
                    (B) review, approve, abrogate, or modify any 
                disciplinary action taken by an insurance self-
                regulatory organization;
                    (C) remove, suspend, or bar an individual from 
                serving as an officer or director of an insurance self-
                regulatory organization;
                    (D) remove or suspend a member of an insurance 
                self-regulatory organization; and
                    (E) suspend or revoke the registration of an 
                insurance self-regulatory organization.
    (b) Authority of Registered Insurance Self-Regulatory 
Organizations.--An insurance self-regulatory organization that is 
registered by the Commissioner shall have the authority to--
            (1) carry out the purpose of this Act; and
            (2) enforce compliance by its members with the provisions 
        of this Act, applicable regulations issued by the Commissioner, 
        and the rules of the organization.
    (c) Membership.--An insurance self-regulatory organization may be 
formed by, and consist exclusively of--
            (1) national insurers;
            (2) national agencies;
            (3) federally licensed insurance producers; or
            (4) any combination of national insurers, national 
        agencies, and federally licensed insurance producers.
    (d) Regulations.--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--
            (1) 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;
            (2) the standards that the Commissioner shall apply in 
        reviewing a proposed registration, which shall require an 
        insurance self-regulatory organization to demonstrate that--
                    (A) it has the capacity to--
                            (i) carry out the purpose of this Act; and
                            (ii) enforce compliance by its members with 
                        the provisions of this Act, applicable 
                        regulations, and the rules of the organization; 
                        and
                    (B) its operating rules--
                            (i) assure a fair representation of its 
                        members in the selection of its directors and 
                        the administration of its affairs;
                            (ii) provide for the equitable allocation 
                        of fees, dues, and other charges among its 
                        members;
                            (iii) 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
                            (iv) include procedures for members that 
                        are subject to disciplinary actions to obtain 
                        review of such actions by the Commissioner;
            (3) 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;
            (4) the procedures and standards the Commissioner shall 
        follow in abrogating, modifying, or adding to the operating 
        rules of an insurance self-regulatory organization;
            (5) the procedures and standards the Commissioner shall 
        follow in reviewing, approving, abrogating, or modifying any 
        disciplinary action by an insurance self-regulatory 
        organization;
            (6) the procedures and standards the Commissioner shall 
        follow in removing, suspending, or baring any individual from 
        serving as an officer or director of an insurance self-
        regulatory organization;
            (7) the procedures and standards the Commissioner shall 
        follow in suspending or revoking the registration of an 
        insurance self-regulatory organization; and
            (8) such other matters as the Commissioner determines 
        appropriate to ensure and protect the public interest and the 
        interests of policyholders.

SEC. 1107. OFFICE OF THE OMBUDSMAN.

    (a) Establishment of the Office of the Ombudsman.--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.
    (b) Duties of the Ombudsman.--
            (1) In general.--The Ombudsman shall act as a liaison 
        between the Office and any regulated person adversely affected 
        by the supervisory or regulatory activities of the Office, 
        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.
            (2) Definition.--For purposes of this section the term, a 
        ``regulated person'' means a national insurer, a national 
        agency, a federally licensed insurance producer, or an insurer-
        affiliated party.
    (c) Powers of the Ombudsman.--The Ombudsman--
            (1) with the prior consent of the Commissioner, may stay 
        any appealable decision or action during the resolution of an 
        appealable matter; and
            (2) shall review and report any weakness in policy or 
        procedures to the Commissioner, and make recommendations to the 
        Commissioner regarding changes in such policies or procedures.
    (d) Appealable Matters.--Any regulated person adversely affected by 
an Office decision or action may seek Ombudsman review of such decision 
or action, other than--
            (1) the appointment of a receiver or conservator;
            (2) any preliminary examination conclusions communicated to 
        the regulated person before a final examination report is 
        issued;
            (3) any formal enforcement-related action or decision, 
        including the issuance of a cease-and-desist order, assessment 
        of a civil money penalty, or commencement of a formal 
        investigation;
            (4) any formal or informal rulemaking pursuant to 
        subchapter II of chapter 5 of title 5, United States Code;
            (5) any decision or recommended decision following a formal 
        adjudication conducted pursuant to subchapter II of chapter 5 
        of title 5, United States Code; or
            (6) any request for agency records pursuant to section 552 
        of title 5, United States Code (commonly referred to as the 
        Freedom of Information Act).
    (e) Procedures for Filing an Appeal to the Ombudsman.--A regulated 
person may seek review of an appealable matter by filing a written 
appeal with the Office of the Ombudsman. In the case of a regulated 
person that is an entity, the appeal shall be signed by the President 
or Chief Executive Officer of the regulated person. 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.
    (f) Decisions of the Ombudsman.--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.
    (g) Retaliation Prohibited.--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.

   Subtitle B--Supervision of National Insurers and National Agencies

SEC. 1121. EXAMINATION OF NATIONAL INSURERS AND NATIONAL AGENCIES.

    (a) In General.--
            (1) Examination.--The Commissioner shall provide for 
        examinations of national insurers and national agencies.
            (2) Regular and special examinations of national 
        insurers.--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.
            (3) Examination of national agencies.--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--
                    (A) a law, rule, or regulation;
                    (B) any condition imposed in writing by the 
                Commissioner in connection with issuing a license for a 
                federally licensed insurance producer; or
                    (C) any written agreement entered into with the 
                Commissioner.
            (4) Affiliates.--
                    (A) In general.--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--
                            (i) require an affiliate to make such 
                        reports and provide such material as the 
                        Commissioner may direct; and
                            (ii) conduct an examination of the affairs 
                        of an affiliate, if--
                                    (I) the Commissioner has reasonable 
                                cause to believe that the activities of 
                                the affiliate may have such an effect;
                                    (II) the examination is limited to 
                                the extent necessary to disclose 
                                information related to such effect; and
                                    (III) the Commissioner is unable to 
                                obtain the necessary information from 
                                the national insurer or national 
                                agency.
                    (B) Acceptance of available information.--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--
                            (i) reports that the affiliate has provided 
                        or been required to provide to other Federal or 
                        State regulatory authorities or appropriate 
                        self-regulatory organizations;
                            (ii) information that is otherwise required 
                        to be reported publicly; and
                            (iii) audited financial statements.
                    (C) Use of regulatory reports.--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.
    (b) Access to People and Records.--
            (1) In general.--In the course of examining a national 
        insurer, national agency, or affiliate of a national insurer or 
        national agency, the Commissioner, upon request, shall be given 
        prompt and reasonable access to officers, employees, agents, 
        books, records, and documents of such insurer, agency, or 
        affiliate.
            (2) Court order.--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 affiliate or 
        person denying such access resides or conducts business, for an 
        order requiring that such information be promptly provided.
            (3) Subpoena power.--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--
                    (A) administer oaths and affirmations;
                    (B) 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;
                    (C) issue subpoenas; and
                    (D) in order to enforce a subpoena issued under 
                subparagraph (C), apply to the United States district 
                court for the judicial district--
                            (i) in which the main office of the 
                        national insurer, national agency, or affiliate 
                        is located;
                            (ii) in which the federally licensed 
                        insurance producer is located; or
                            (iii) in which the witness resides or 
                        carries on business.

SEC. 1122. EXAMINATION FEES AND OTHER ASSESSMENTS.

    (a) Examination Fee.--
            (1) National insurers, national agencies, and federally 
        licensed insurance producers.--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.
            (2) Affiliates.--The Commissioner shall assess the cost of 
        conducting examinations of affiliates against each such 
        affiliate, as the Commissioner determines to be appropriate.
            (3) Refusal to pay.--
                    (A) In general.--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.
                    (B) Shared affiliates.--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.
    (b) Processing Fee.--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.
    (c) Other Assessments.--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.
    (d) Notice.--The Commissioner shall notify national insurers, 
national agencies, and federally licensed insurance producers of--
            (1) the initial fees and assessments imposed under this 
        section; and
            (2) any change in fees and assessments.
    (e) Treatment of Fees and Assessments.--
            (1) Deposits.--Amounts received by the Commissioner from 
        fees and assessments imposed under this section shall be 
        deposited in the manner provided for in section 5234 of the 
        Revised Statutes of the United States (12 U.S.C. 192) with 
        respect to assessments by the Comptroller of the Currency.
            (2) Government funds; apportionment.--Notwithstanding any 
        other provision of law, amounts received by the Commissioner 
        from any fee or assessment imposed under this section--
                    (A) shall not be considered Government or public 
                funds or appropriated money; and
                    (B) shall not be subject to apportionment for 
                purpose of chapter 15 of title 31, United States Code, 
                or under any other authority.
    (f) Working Capital Fund.--
            (1) In general.--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.
            (2) Refunds.--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.
    (g) Use of Funds.--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.
    (h) Appropriations During Start-Up Period.--
            (1) Authorization.--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.
            (2) Payment.--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.
    (i) Rulemaking.--The Commissioner shall promulgate regulations with 
respect to the computation, assessment, notice, and collection of the 
fees and assessments provided for in this section.

SEC. 1123. DISCLOSURE OF INFORMATION.

    (a) Regulations Required.--The Commissioner shall, by regulation, 
establish standards for the disclosure of examination reports, other 
reports, applications, filings, correspondence, records, and other 
information prepared by, reported to, obtained by, or submitted to, the 
Commissioner. The regulation shall exclude matters to be addressed 
under regulations required under section 1161.
    (b) Supervisory Privilege.--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.
    (c) Other Privileges.--The submission by any person of any 
information to the Commissioner for any purpose in the course of any 
supervisory or regulatory process of the Commissioner shall not be 
construed as waiving, destroying, or otherwise affecting any privilege 
that such person may claim with respect to such information under 
Federal or State law as to any person or entity other than the 
Commissioner.

SEC. 1124. REPORTING REQUIREMENT.

    (a) General Authority.--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.
    (b) Financial Statements.--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).
    (c) Regulations.--The Commissioner shall promulgate regulations 
that--
            (1) specify the information that shall be disclosed in the 
        financial statements required under subsection (b); and
            (2) specify any additional financial schedules that 
        national insurers shall make available for examination by the 
        Commissioner upon request.

SEC. 1125. REGULATORY SUPERVISION AND RELATIONSHIP TO STATE LAW.

    (a) In General.--Except as authorized by this Act or otherwise 
authorized under Federal law, national insurers, national agencies, and 
federally licensed insurance producers shall not be subject to any form 
of licensing, examination, reporting, regulation, or other supervision 
relating to--
            (1) the sale, solicitation, or negotiation of insurance;
            (2) the underwriting of insurance; or
            (3) any other insurance operations.
    (b) Applicable State Laws.--Notwithstanding subsection (a), 
national insurers, national agencies, and federally licensed insurance 
producers shall be subject to--
            (1) applicable State unclaimed property and escheat laws;
            (2) applicable tax laws of a State, in accordance with 
        sections 1251, 1252, and 1253;
            (3) 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--
                    (A) relates to participation in any voluntary joint 
                underwriting association or similar arrangement;
                    (B) 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;
                    (C) requires a national insurer to use any 
                particular rate, rating element, price, or form; or
                    (D) is inconsistent with any provision of this Act;
            (4) 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, price, or 
        form;
            (5) 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
            (6) 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.
    (c) Terms.--For purposes of this section, the term--
            (1) ``advisory or statistical organization'' does not 
        include the National Association of Insurance Commissioners;
            (2) ``compulsory coverage'' does not include any State 
        statutory requirement other than those prescribing the minimum 
        extent of insurance protection afforded by a policy of 
        insurance; and
            (3) ``mandatory residual market'' means a facility, entity, 
        or plan required by and established pursuant to State law to 
        provide coverage for persons that cannot obtain insurance in 
        the private market.

SEC. 1126. PRESERVATION OF OFFICE RECORDS.

    (a) In General.--The Commissioner may cause any and all records, 
papers, or documents kept by the Office or in the possession or custody 
of the Office to be--
            (1) photographed or microphotographed or otherwise 
        reproduced upon film; or
            (2) preserved in any electronic medium or format which is 
        capable of--
                    (A) being read or scanned by computer; and
                    (B) being reproduced from such electronic medium or 
                format by printing any other form or reproduction of 
                electronically stored data.
    (b) Treatment as Original Records.--Any photographs, 
microphotographs, or photographic film or copies thereof described in 
subsection (a)(1) or reproduction or electronically stored data 
described in subsection (a)(2) shall be deemed to be an original record 
for all purposes, including introduction in evidence in all State and 
Federal courts or administrative agencies, and shall be admissible to 
prove any act, transaction, occurrence, or event therein recorded.
    (c) Authority of the Commissioner.--Any photographs, 
microphotographs, or photographic film or copies thereof described in 
subsection (a)(1) or reproduction of electronically stored data 
described in subsection (a)(2) shall be preserved in such manner as the 
Commissioner shall prescribe, and the original records, papers, or 
documents may be destroyed or otherwise disposed of, as the 
Commissioner may direct.

SEC. 1127. COMPLIANCE WITH ANTI-MONEY LAUNDERING REQUIREMENTS.

    (a) Compliance Required.--The Commissioner shall prescribe 
regulations requiring national life insurers to establish and maintain 
procedures reasonably designed to assure and monitor compliance with 
the requirements of subchapter II of chapter 53 of title 31, United 
States Code, to the extent applicable.
    (b) Examinations.--Each examination of a national life insurer 
shall include a review of the procedures required to be established and 
maintained under subsection (a).
    (c) Order.--The Commissioner shall issue an order, in the manner 
prescribed in subsection (c) or (d) of section 1142, requiring such 
insurer to cease and desist from a violation of this section or 
regulations prescribed under this section, if the Commissioner 
determines that a national life insurer--
            (1) has failed to establish and maintain the procedures 
        described in subsection (a); or
            (2) has failed to correct any problem with the procedures 
        maintained by such national life insurer which was previously 
        reported to such insurer by the Commissioner.

           Subtitle C--Enforcement of Federal Insurance Laws

SEC. 1141. NATIONAL INSURER LICENSE SUSPENSION, RESTRICTION, OR 
              REVOCATION.

    (a) In General.--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--
            (1) has engaged in conduct that is hazardous to the 
        national insurer and that involves an undue risk to the 
        policyholders of the national insurer, as a whole;
            (2) is in a financial or other condition that is not 
        consistent with the continuation of existing operations; or
            (3) has violated any--
                    (A) applicable law or regulation;
                    (B) 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
                    (C) written agreement entered into between the 
                national insurer and the Commissioner.
    (b) Notice to National Insurer.--
            (1) In general.--If the Commissioner determines under 
        subsection (a) that the Federal license of a national insurer 
        should be revoked or restricted, the Commissioner shall--
                    (A) serve the national insurer with written notice 
                of the intent of the Commissioner to revoke or restrict 
                such Federal license;
                    (B) provide the national insurer with a statement 
                of the basis for the determination to revoke or 
                restrict such Federal license; and
                    (C) notify, not less than 30 days before a hearing 
                under subsection (c), the date and place of the 
                hearing.
            (2) Notice of service.--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.
    (c) Revocation or Restriction Hearing.--
            (1) In general.--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.
            (2) Authority to revoke or restrict federal license.--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.
            (3) Consent to revocation or restriction.--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.
    (d) Notice of Revocation or Restriction Required.--
            (1) Notice by national insurer.--
                    (A) In general.--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.
                    (B) Type of notice.--Notice under this paragraph 
                shall be sent to the last address of record of the 
                policyholder 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.
            (2) Notice by commissioner.--
                    (A) In general.--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.
                    (B) Costs.--The cost of any notice provided under 
                subparagraph (A) shall be paid by the national insurer.
    (e) Temporary Suspension or Restriction.--
            (1) In general.--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 as a whole or to the public, the Commissioner 
        may issue an order temporarily suspending or restricting the 
        Federal license of the national insurer.
            (2) Notice of temporary order.--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.
            (3) Effective period of temporary order.--A temporary order 
        issued under paragraph (1) shall--
                    (A) become effective not earlier than 10 days from 
                the date of service upon the national insurer; and
                    (B) unless set aside, limited, or suspended by a 
                court in proceedings authorized under paragraph (4), 
                remain effective and enforceable until the earlier of--
                            (i) the effective date of an order under 
                        subsection (c)(2); or
                            (ii) the date on which the Commissioner 
                        determines that there is insufficient evidence 
                        to revoke or restrict a Federal license under 
                        this subsection.
            (4) Judicial review.--
                    (A) In general.--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.
                    (B) Jurisdiction.--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.
    (f) Decision To Suspend, Restrict, or Revoke.--
            (1) In general.--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.
            (2) Exception.--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.
    (g) Judicial Review.--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.

SEC. 1142. SUSPENSION, RESTRICTION, OR REVOCATION OF FEDERAL LICENSE OF 
              NATIONAL AGENCIES AND FEDERALLY LICENSED INSURANCE 
              PRODUCERS.

    (a) In General.--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--
            (1) 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;
            (2) provided incorrect, misleading, incomplete, or 
        materially untrue information in an application for a Federal 
        charter or a Federal producer license;
            (3) used fraudulent, coercive, or dishonest practices; or
            (4) demonstrated incompetence, untrustworthiness, or 
        financial irresponsibility as an insurance producer.
    (b) Notice to Federally Licensed Insurance Producer.--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--
            (1) 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;
            (2) 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
            (3) 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.
    (c) Revocation or Restriction Hearing.--
            (1) In general.--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.
            (2) Authority to revoke or restrict federal license.--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.
            (3) Consent to revocation or restriction.--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.
    (d) Notice of Revocation or Restriction Required.--
            (1) Notice by federally licensed insurance producer.--Each 
        national agency or other federally licensed insurance producer 
        shall give written notice of revocation or restriction under 
        this section to each national insurer or State insurer for 
        which such agency or producer acts as an insurance producer.
            (2) Notice by commissioner.--
                    (A) In general.--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 that the Commissioner determines to be 
                necessary and proper.
                    (B) Costs.--The cost of any notice provided under 
                subparagraph (A) shall be paid by the national agency 
                or other federally licensed insurance producer.
    (e) Temporary Suspension or Restriction.--
            (1) In general.--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 or a State insurer as a 
        whole, or to the public, the Commissioner may issue a temporary 
        order suspending or restricting the Federal producer license of 
        the agency or other producer.
            (2) Notice of temporary order.--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.
            (3) Effective period of temporary order.--Any temporary 
        order issued under paragraph (1) shall--
                    (A) become effective not earlier than 10 days from 
                the date of service upon the national agency or other 
                federally licensed insurance producer; and
                    (B) 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).
            (4) Judicial review.--
                    (A) In general.--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.
                    (B) Jurisdiction.--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.
    (f) Judicial Review.--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.

SEC. 1143. CEASE-AND-DESIST PROCEEDINGS.

    (a) Notice.--
            (1) Issuance.--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--
                    (A) has engaged, or is about to engage, in conduct 
                that is hazardous to a national insurer or a State 
                insurer and involves an undue risk to the policyholders 
                as a whole of a national insurer or a State insurer; or
                    (B) has violated, or is about to violate--
                            (i) a law, rule, or regulation;
                            (ii) 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, federally licensed 
                        insurance producer, or party; or
                            (iii) any written agreement entered into 
                        with the Commissioner by such insurer, agency, 
                        producer, or party.
            (2) Contents.--The notice issued under paragraph (1) 
        shall--
                    (A) contain a statement of the facts constituting 
                the alleged violations; and
                    (B) 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.
    (b) Hearing.--
            (1) Timing.--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.
            (2) Consent.--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.
    (c) Cease-and-Desist Order.--
            (1) In general.--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.
            (2) Contents.--A cease-and-desist order issued under this 
        subsection may--
                    (A) 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
                    (B) take affirmative action to correct the 
                conditions resulting from any such violation or 
                conduct.
            (3) Effective date.--A cease-and-desist order issued under 
        this subsection shall--
                    (A) 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
                    (B) remain in effect and enforceable as provided 
                therein, unless stayed, modified, terminated, or set 
                aside by action of the Commissioner or a reviewing 
                court.
            (4) Authority to limit activities.--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.
            (5) Standard for certain orders.--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.
    (d) Temporary Cease-and-Desist Orders.--
            (1) In general.--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 or a State insurer, or is likely 
        to weaken the condition of a national insurer or a State 
        insurer or otherwise prejudice the interests of the 
        policyholders, as a whole, of a national insurer or a State 
        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--
                    (A) cease and desist from any such violation or 
                conduct; and
                    (B) take affirmative action to prevent or remedy 
                such insolvency, dissipation, condition, or prejudice 
                pending completion of such proceedings.
            (2) Contents of order; effective date.--A temporary cease-
        and-desist order issued under paragraph (1)--
                    (A) may include any action authorized under section 
                1144(2);
                    (B) shall become effective upon service to the 
                national insurer, national agency, producer, or party; 
                and
                    (C) unless set aside, limited, or suspended by a 
                court under paragraph (3), shall remain in effect and 
                enforceable until the date on which--
                            (i) administrative proceedings pursuant to 
                        such order are completed;
                            (ii) the Commissioner dismisses the charges 
                        specified in such order; or
                            (iii) if a cease-and-desist order is issued 
                        against such national insurer, national agency, 
                        producer, or party, such order is effective.
            (3) Injunction.--
                    (A) In general.--A national insurer, national 
                agency, federally licensed insurance producer, or 
                insurer-affiliated party that has been served with a 
                temporary cease-and-desist order under this subsection 
                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.
                    (B) Jurisdiction.--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.
            (4) Incomplete or inaccurate records.--
                    (A) Temporary order.--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--
                            (i) the cessation of any activity or 
                        practice which gave rise to the incomplete or 
                        inaccurate state of the books or records; or
                            (ii) affirmative action to restore such 
                        books or records to a complete and accurate 
                        state.
                    (B) Effective period.--A temporary order issued 
                under subparagraph (A)--
                            (i) shall become effective upon service; 
                        and
                            (ii) unless set aside, limited, or 
                        suspended by a court in proceedings under 
                        paragraph (2), shall remain in effect and 
                        enforceable until the earlier of--
                                    (I) the completion of the 
                                proceeding initiated under subsection 
                                (a) in connection with the notice of 
                                charges; or
                                    (II) 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.

SEC. 1144. AFFIRMATIVE ACTION TO CORRECT CONDITIONS RESULTING FROM 
              VIOLATIONS OR CONDUCT.

    The authority granted to the Commissioner under this subtitle to 
issue an order that requires a national insurer, national agency, 
federally licensed insurance producer, or 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--
            (1) restrict the growth of the national insurer;
            (2) dispose of any asset or insurance policy or reinsurance 
        contract;
            (3) rescind any other agreements or contracts, other than 
        insurance policies or reinsurance contracts, to which the 
        national insurer is the issuer;
            (4) employ qualified officers or employees, subject to 
        approval by the Commissioner; and
            (5) take such other action as the Commissioner determines 
        to be appropriate if--
                    (A) such national insurer, national agency, 
                producer, or party was unjustly enriched in connection 
                with such violation or conduct; or
                    (B) the violation or conduct involved a reckless 
                disregard for the law or any applicable regulations or 
                prior order of the Commissioner.

SEC. 1145. SUSPENSION, REMOVAL, AND PROHIBITION AUTHORITY.

    (a) Authority To Issue Order.--The Commissioner may serve a written 
notice of the Commissioner's intention to suspend or remove an insurer-
affiliated 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--
            (1) an insurer-affiliated party has--
                    (A) violated--
                            (i) any law or regulation;
                            (ii) any final cease-and-desist order 
                        issued under section 1143;
                            (iii) 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
                            (iv) any written agreement between such 
                        national insurer or national agency and the 
                        Commissioner;
                    (B) engaged or participated in any conduct that--
                            (i) is hazardous to the national insurer or 
                        national agency; and
                            (ii) involves an undue risk to the 
                        policyholders of such national insurer, as a 
                        whole, or the policyholders, as a whole, 
                        serviced by such national agency; or
                    (C) committed or engaged in any act, omission, or 
                practice, which constitutes a breach of the fiduciary 
                duty of such party;
            (2) through any violation, conduct, practice, or breach 
        described in paragraph (1)--
                    (A) such national insurer or national agency has 
                suffered, or will probably suffer, financial loss or 
                other damage;
                    (B) the interests of the policyholders of the 
                national insurer or the policyholders serviced by the 
                national agency have been, or could be, prejudiced; or
                    (C) such party has received financial gain or other 
                benefit by reason of such violation, practice, or 
                breach; and
            (3) the violation, conduct, practice, or breach--
                    (A) involves personal dishonesty on the part of 
                such party; or
                    (B) 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.
    (b) Temporary Suspension Order.--
            (1) Suspension or prohibition authorized.--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--
                    (A) 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
                    (B) serves such party with the temporary order of 
                suspension or prohibition.
            (2) Effective period.--Any temporary order issued under 
        paragraph (1)--
                    (A) shall become effective upon service; and
                    (B) unless a court issues a stay of such order 
                under subsection (e), shall remain in effect and 
                enforceable until--
                            (i) the date the Commissioner dismisses the 
                        charges contained in the notice served under 
                        subsection (a) with respect to such party; or
                            (ii) the effective date of an order issued 
                        by the Commissioner to such party under 
                        subsection (a).
            (3) Copy of order.--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.
    (c) Procedures.--
            (1) Contents of notice.--A notice served under subsection 
        (a) shall include--
                    (A) a statement of the grounds for facts underlying 
                such notice; and
                    (B) the time and place of a hearing to be held 
                thereon.
            (2) Hearing.--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.
            (3) Suspension or removal.--
                    (A) Failure to appear.--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.
                    (B) Suspension or removal.--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.
                    (C) Effective date.--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.
    (d) Industrywide Prohibition.--
            (1) In general.--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--
                    (A) 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;
                    (B) 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;
                    (C) act as an insurer-affiliated party; or
                    (D) act as a federally licensed insurance producer.
            (2) Exception.--If, on or after the date on which an order 
        is issued under this subsection that 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.
            (3) Violation of order.--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.
    (e) Stay of Suspension or Prohibition.--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.

SEC. 1146. SUSPENSION OR PROHIBITION BASED ON CRIMINAL ACTIVITY.

    (a) Suspension or Prohibition.--
            (1) In general.--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--
                    (A) continued service or participation by such 
                party may pose a threat to the national insurer or 
                national agency or the interests of the policyholders 
                of the national insurer, as a whole, or the 
                policyholders, as a whole, serviced by the national 
                agency; and
                    (B) such party is charged in any information, 
                indictment, or complaint, with the commission of or 
                participation in--
                            (i) 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
                            (ii) 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.
            (2) Effective period.--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.
    (b) Removal or Prohibition.--
            (1) In general.--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--
                    (A) such judgment is not subject to further 
                appellate review; and
                    (B) 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.
            (2) Required for certain offenses.--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.
            (3) Effect on director or officer.--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 such national insurer or national agency.
            (4) Effect of acquittal.--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.
            (5) Effective period.--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.
    (c) Administrative Hearing.--
            (1) Request.--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.
            (2) Time and place.--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.
            (3) Notification of decision.--Not later than 60 days after 
        a hearing under this subsection, the Commissioner shall provide 
        written notification to the insurer-affiliated party that 
        indicates--
                    (A) 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;
                    (B) 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
                    (C) the basis for any decision by the Commissioner 
                that is adverse to such party.

SEC. 1147. ANCILLARY PROVISIONS.

    (a) Powers Related to Hearings.--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--
            (1) administer oaths and affirmations;
            (2) take depositions or cause depositions to be taken; and
            (3) issue, revoke, quash, or modify subpoenas and subpoenas 
        duces tecum.
    (b) Subpoena Power.--
            (1) In general.--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.
            (2) Enforcement.--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--
                    (A) the United States District Court for the 
                District of Columbia; or
                    (B) the United States district court for the 
                judicial district in which--
                            (i) such proceeding or other action is 
                        being conducted; or
                            (ii) the witness resides or conducts 
                        business.
            (3) Jurisdiction.--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.
            (4) Fees and mileage.--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.
            (5) Penalty for noncompliance.--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.
    (c) Expenses and Attorney Fees.--
            (1) In general.--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 insurer, agency, producer, or party to receive such 
        reasonable expenses and attorney fees, as it determines to be 
        just and proper.
            (2) Payment of expenses and fees.--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.
    (d) Rulemaking.--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.
    (e) Effect on Board of Directors.--
            (1) Lack of quorum.--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.
            (2) Temporary appointments.--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--
                    (A) the suspensions are terminated; or
                    (B) the suspended directors are replaced on the 
                board of directors of the national insurer or national 
                agency.
    (f) Notice After Separation From Service.--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.

SEC. 1148. HEARINGS AND JUDICIAL REVIEW OF SUSPENSION, REMOVAL, OR 
              PROHIBITION ORDER.

    (a) Judicial Hearing.--
            (1) In general.--A hearing under this subtitle (except for 
        a hearing under section 1146(c))--
                    (A) shall be conducted in accordance with the 
                provisions of chapter 5 of title 5, United States Code; 
                and
                    (B) 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.
            (2) Judgment.--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--
                    (A) render a decision;
                    (B) issue and serve upon each party to the 
                proceeding an order or orders consistent with the 
                provisions of this subtitle; and
                    (C) include findings of fact upon which the 
                decision of the Commissioner is predicated.
    (b) Judicial Review.--
            (1) In general.--Judicial review of any order under this 
        subtitle shall be limited to the provisions under this section.
            (2) Modification or termination of order by commissioner.--
                    (A) Before appeal.--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.
                    (B) After appeal.--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.
            (3) Filing of petition.--
                    (A) In general.--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.
                    (B) Exception.--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.
                    (C) Jurisdiction.--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:
                            (i) The court of appeals of the United 
                        States for the circuit in which--
                                    (I) the main office of the national 
                                insurer or national agency is located; 
                                or
                                    (II) the federally licensed 
                                insurance producer or the insurer-
                                affiliated party is located.
                            (ii) The United States Court of Appeals for 
                        the District of Columbia circuit.
            (4) Filing of record.--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.
            (5) Effect of review proceedings.--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.
            (6) Final judgment.--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.
    (c) Enforcement of Commissioner Order.--
            (1) Application.--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--
                    (A) the main office of the national insurer or 
                national agency is located;
                    (B) the federally licensed insurance producer is 
                located; or
                    (C) the insurer-affiliated party is located.
            (2) Jurisdiction.--The courts described in paragraph (1)--
                    (A) shall have jurisdiction and power to order and 
                require compliance with an order of the Commissioner 
                under this subtitle; and
                    (B) 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.

SEC. 1149. CIVIL AND CRIMINAL PENALTIES.

    (a) Civil Money Penalty.--
            (1) First tier.--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 person--
                    (A) violates any law or regulation;
                    (B) violates any final order or temporary order 
                issued pursuant to section 1143, 1144, 1145, or 1146;
                    (C) 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
                    (D) violates any written agreement between such 
                national insurer or national agency, producer, or party 
                and the Commissioner.
            (2) Second tier.--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--
                    (A) during which such person--
                            (i) commits any violation described in any 
                        clause of paragraph (1);
                            (ii) recklessly engages in any conduct that 
                        is hazardous to a national insurer, State 
                        insurer, or national agency and that involves 
                        an undue risk to the policyholders, as a whole, 
                        of such national insurer or State insurer, or 
                        the policyholders, as a whole, serviced by such 
                        national agency; or
                            (iii) breaches any fiduciary duty; and
                    (B) for which such violation, conduct, or breach--
                            (i) is part of a pattern of misconduct;
                            (ii) causes or is likely to cause more than 
                        a minimal loss to such national insurer or 
                        State insurer; or
                            (iii) results in pecuniary gain or other 
                        benefit to such national agency, producer, or 
                        affiliated party.
            (3) Third tier.--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 person--
                    (A) knowingly--
                            (i)(I) commits any violation described in 
                        any clause of paragraph (1); or
                            (II) engages in any conduct that is 
                        hazardous to a national insurer, State insurer, 
                        or national agency and that involves an undue 
                        risk to the policyholders, as a whole, of such 
                        national insurer, State insurer, or the 
                        policyholders, as a whole, serviced by such 
                        national agency; and
                            (ii) breaches any fiduciary duty; and
                    (B) knowingly or recklessly causes a substantial 
                loss to such national insurer, State 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.
            (4) Maximum amounts of penalties for any violation 
        described in paragraph (3).--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.
            (5) Assessment.--
                    (A) Written notice.--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).
                    (B) Finality of assessment.--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.
            (6) Authority to modify or remit penalty.--The Commissioner 
        may compromise, modify, or remit any penalty which the 
        Commissioner may assess or had already assessed under paragraph 
        (1), (2), or (3).
            (7) Mitigating factors.--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--
                    (A) the size of financial resources and good faith 
                of the national insurer, national agency, or other 
                person charged;
                    (B) the gravity of the violation;
                    (C) the history of previous violations; and
                    (D) such other matters as justice may require.
            (8) Hearing.--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.
            (9) Collection.--
                    (A) Referral.--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.
                    (B) Appropriateness of penalty not reviewable.--In 
                any civil action under subparagraph (A), the validity 
                and appropriateness of the penalty shall not be subject 
                to review.
            (10) Disbursement and use.--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.
    (b) Prejudgment Attachment.--
            (1) In general.--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--
                    (A) prohibits any person subject to the proceeding 
                from withdrawing, transferring, removing, dissipating, 
                or disposing of any funds, assets, or other property; 
                and
                    (B) appoints a temporary receiver to administer the 
                restraining order.
            (2) Standard.--
                    (A) Showing.--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.
                    (B) State proceeding.--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.
    (c) Criminal Penalty.--
            (1) In general.--Chapter 21 of title 18, United States 
        Code, is amended by adding at the end the following:
``Sec. 404. Violation of order by Commissioner of National Insurance
    ``Any person who, being subject to an order under section 1145 or 
1146 of the National Insurance Act of 2007, 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.''.
            (2) Clerical amendment.--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:

``Sec. 404. Violation of order by Commissioner of National 
                            Insurance.''.

SEC. 1150. PUBLIC DISCLOSURES OF FINAL ORDERS AND AGREEMENTS.

    (a) In General.--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--
            (1) any written agreement or other written statement for 
        which a violation may be enforced by the Commissioner;
            (2) any final order issued with respect to any 
        administrative enforcement proceeding initiated by the 
        Commissioner under this section or any other law; and
            (3) any modification to or termination of any order or 
        agreement made public pursuant to this paragraph.
    (b) Hearings.--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.
    (c) Transcript of Hearing.--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.
    (d) Documents Filed Under Seal.--
            (1) In general.--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.
            (2) Written report.--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).
    (e) Retention of Documents.--The Commissioner shall maintain a 
record for not less than 6 years of--
            (1) all the documents described in subsection (a); and
            (2) all informal enforcement agreements and other 
        supervisory actions and supporting documents issued in 
        connection with any administrative enforcement proceeding 
        initiated by the Commissioner.
    (f) Disclosures to Congress.--No provision of this section may be 
construed to authorize the withholding, or to prohibit the disclosure, 
of any information to Congress.

SEC. 1151. FOREIGN INVESTIGATIONS.

    (a) Requesting Assistance From Foreign Governments.--In conducting 
any investigation, examination, or enforcement action under this 
subtitle, the Commissioner may request the assistance of any foreign 
government.
    (b) Providing Assistance to Foreign Governments.--
            (1) In general.--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.
            (2) Investigation by commissioner.--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.
            (3) Factors to consider.--In deciding whether to provide 
        assistance under this section, the Commissioner shall 
        consider--
                    (A) whether the requesting authority has agreed to 
                provide reciprocal assistance with respect to insurance 
                matters within the jurisdiction of the Commissioner; 
                and
                    (B) whether compliance with the request would 
                prejudice the public interest of the United States.
    (c) Rule of Construction.--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.

SEC. 1152. ACTION OR PROCEEDING AGAINST NON-UNITED STATES INSURERS.

    (a) In General.--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.
    (b) Removal of Officer or Director.--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 the sale, solicitation, negotiation, and underwriting of 
insurance and all other insurance operations in the United States.
    (c) Venue.--
            (1) In general.--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.
            (2) Multiple jurisdictions.--If a national insurer has 
        offices in more than 1 jurisdiction, the venue of a proceeding 
        under this section--
                    (A) shall be in the jurisdiction within which the 
                office or offices involved in the proceeding are 
                located; and
                    (B) 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.
    (d) Service of Process.--
            (1) In general.--Any service required or authorized to be 
        made on a non-United States insurer may be made on any office 
        located within any State.
            (2) Exception.--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.

SEC. 1153. COOPERATION BETWEEN COMMISSIONER AND STATE COMMISSIONERS.

    (a) Notice to State Commissioners.--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:
            (1) Revocation, suspension, or restriction of the authority 
        of the national insurer or national agency to transact 
        insurance.
            (2) 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 policyholders or creditors.
            (3) The placement of a national insurer into receivership.

                      Subtitle D--Insurance Fraud

SEC. 1161. INVESTIGATION OF INSURANCE FRAUD.

    (a) Investigative Authority of Commissioner.--The Commissioner may 
investigate suspected fraudulent insurance acts by insurance persons 
engaged in the business of insurance or by other persons.
    (b) Fraud Warning Required.--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.
    (c) Mandatory Reporting of Fraudulent Insurance Acts.--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.
    (d) Immunity From Liability.--
            (1) In general.--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--
                    (A) the Commissioner or any employee, agent, or 
                representative of the Commissioner;
                    (B) Federal, State, or local enforcement or 
                regulatory officials or their employees, agents, or 
                representatives;
                    (C) a self-regulatory organization or its 
                employees, agents, or representatives;
                    (D) a person involved in the prevention and 
                detection of fraudulent insurance acts or that person's 
                agents, employees, or representatives; or
                    (E) the NAIC or its employees, agents, or 
                representatives.
            (2) Malice.--
                    (A) In general.--Paragraph (1) shall not apply to 
                false statements made with actual malice.
                    (B) Contents of complaint.--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.
            (3) Preservation of privilege and immunities.--This 
        subsection does not abrogate or modify common law or statutory 
        privileges or immunities enjoyed by a person described in 
        paragraph (1).
    (e) Confidentiality Regulations.--The Commissioner shall, by 
regulation, establish standards for the protection of confidential 
information submitted or obtained in an investigation of a suspected or 
actual fraudulent insurance act, the ability of the Commissioner to 
testify in private civil actions concerning any such confidential 
information and the sharing by the Commissioner of any such 
confidential information with other regulators, self-regulatory 
organizations, and other persons.

SEC. 1162. PENALTIES.

    If a person committing an offense under subsection (a) or (c) of 
section 1033 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 section 1034 of title 18, United States Code--
            (1) 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
            (2) 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.

SEC. 1163. CIVIL REMEDY.

    (a) Recovery Authorized.--Any national insurer, national agency, or 
federally licensed insurance producer that is injured by reason of a 
fraudulent insurance act may recover from the person committing the 
act--
            (1) return of any profit, benefit, compensation, or payment 
        received by the person committing the act;
            (2) reasonable attorney fees, related legal expenses, 
        including internal legal expenses and court costs; and
            (3) all other economic damages directly resulting from the 
        act.
    (b) Limitations.--No action under this section--
            (1) may be certified as a class action or made part of a 
        class action; and
            (2) may be maintained under this section if a court has 
        ordered restitution to the injured national insurer, national 
        agency, or federally licensed insurance producer upon criminal 
        conviction of the person committing the fraudulent insurance 
        act.
    (c) Sole Private Remedy.--The remedy provided under this section 
shall be the only private remedy for commission of a fraudulent 
insurance act, and no additional remedies shall be implied, nor shall 
the remedy provided under this section be used in conjunction with or 
in addition to any other remedies available at law or in equity to 
duplicate recovery for the same element of economic damage.

 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.

    (a) Authorization.--
            (1) In general.--The Commissioner may, in accordance with 
        the provisions of this Act, and under regulations prescribed by 
        the Commissioner pursuant to paragraph (2)--
                    (A) provide for the organization, incorporation, 
                operation, and regulation of national insurance 
                companies and national insurance agencies; and
                    (B) issue charters therefor.
            (2) Rulemaking.--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.
            (3) Organization.--The Commissioner shall require each 
        national agency to be organized as a corporation, partnership, 
        limited liability company, or in such other form as is 
        recognized under State law.
    (b) Chartering Criteria.--
            (1) Factors.--In determining whether to issue a charter for 
        a national insurer or national agency, the Commissioner shall 
        consider--
                    (A) the character and competency of the parties 
                seeking the charter; and
                    (B) the financial resources and future prospects of 
                the proposed national insurer or proposed national 
                agency.
            (2) Information.--The Commissioner shall request such 
        information from the applicant as the Commissioner determines 
        necessary to make the evaluation required under paragraph (1).
            (3) Corporate name.--
                    (A) National insurers.--The corporate name of each 
                national insurer shall include at the end the words 
                ``national insurer'' or the initials ``N.I.''.
                    (B) National agencies.--The corporate name of each 
                national agency shall include at the end the words 
                ``National Insurance Agency'' or the initials 
                ``N.I.A.''.
                    (C) Savings provision.--Nothing in this Act shall 
                preclude a State insurer or State insurance agency from 
                using the word ``national'' or ``Federal'' in its 
                corporate name if such word was included in the 
                corporate name of the State insurer or agency on or 
                before the date of enactment of this Act.
    (c) Issuance or Denial of Charter.--
            (1) Determination.--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--
                    (A) issue a charter certificate to the applicant; 
                or
                    (B) provide the applicant with a written 
                explanation of the grounds for denying a charter.
            (2) Federal producer license.--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.
            (3) Grounds for denial.--The Commissioner shall not grant a 
        charter to an applicant if--
                    (A) the applicant fails to--
                            (i) comply with all applicable formation 
                        requirements; and
                            (ii) provide any information requested by 
                        the Commissioner under subsection (b)(2);
                    (B) the applicant lacks--
                            (i) the financial resources necessary to 
                        comply with the standards under this Act; or
                            (ii) the character or competence to operate 
                        the national insurer or national agency in 
                        accordance with the standards under this Act; 
                        or
                    (C) the Commissioner determines that the national 
                insurer or national agency is being formed for an 
                illegitimate purpose.
    (d) Amendment of Charter.--The Commissioner may, under such 
regulations as the Commissioner may prescribe, provide for the 
amendment of charters issued to national insurers and national 
agencies.
    (e) No Delegation Permitted.--The Commissioner may not delegate to 
any insurance self-regulatory organization any authority conferred 
under this section with respect to--
            (1) the organization, incorporation, and powers of national 
        insurers or national agencies; or
            (2) the issuance and amendment of charters to a national 
        insurer or national agency.
    (f) Main Office.--
            (1) Designation.--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.
            (2) Charter to specify main office.--The charter of a 
        national insurer or national agency shall specify the State in 
        which its main office is located.
            (3) Change in main office.--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.
            (4) Citizenship.--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.
    (g) Insurer in Fraternal Form.--Any charter granted to a national 
insurer in fraternal form in connection with a conversion from a State 
insurer shall include provisions that allow the national insurer to 
operate as an insurer in fraternal form in a manner consistent with the 
requirements of its former State charter.

SEC. 1202. UNITED STATES BRANCHES OF NON-UNITED STATES INSURERS.

    (a) Authorization of Non-United States Insurer.--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.
    (b) Trust Account.--
            (1) In general.--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.
            (2) Assets.--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.
            (3) Surplus.--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 1212(a)(4).
            (4) Filing.--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.
    (c) Subject to Applicable Laws.--Except as otherwise provided under 
this section, a United States branch established under this section--
            (1) shall be subject to all laws applicable to a national 
        insurer; and
            (2) shall be treated as a national insurer for all purposes 
        of this Act.

SEC. 1203. FEDERAL LICENSING OF NATIONAL INSURERS.

    (a) In General.--A national insurer may not sell, solicit, 
negotiate, or underwrite any line of insurance for which it does not 
hold a Federal license.
    (b) Issuance of Federal Licenses.--
            (1) In general.--The Commissioner shall, under such 
        regulations as the Commissioner shall prescribe, issue Federal 
        licenses that--
                    (A) permit national insurers to sell, solicit, 
                negotiate, and underwrite lines of insurance; and
                    (B) specify the lines of insurance that each 
                national insurer may sell, solicit, negotiate, and 
                underwrite.
            (2) Rulemaking.--The regulations prescribed by the 
        Commissioner pursuant to paragraph (1) shall provide that--
                    (A) a national insurer may hold a license to sell, 
                solicit, negotiate, and underwrite property/casualty 
                insurance;
                    (B) 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
                    (C) no national insurer may obtain--
                            (i) a Federal license to engage in the 
                        sale, solicitation, negotiation, and 
                        underwriting of property/casualty insurance; 
                        and
                            (ii) a Federal license to engage in the 
                        sale, solicitation, negotiation, and 
                        underwriting of life insurance, annuities, or 
                        funding agreements.
            (3) Authority to limit scope of insurance.--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.
            (4) Title insurance.--The Commissioner shall not license 
        any person to engage in the business of title insurance, except 
        that nothing in this Act shall prevent a provider of title 
        insurance from being affiliated with a national insurer or 
        national agency.
            (5) Duration.--A Federal license issued by the Commissioner 
        pursuant to this subsection shall remain in effect until the 
        license is--
                    (A) surrendered by the national insurer; or
                    (B) revoked or suspended by the Commissioner in 
                accordance with the provisions of this Act.
    (c) Reinsurance.--A national insurer may--
            (1) only reinsure the lines of insurance that the national 
        insurer is--
                    (A) licensed to sell, solicit, negotiate, and 
                underwrite under its Federal license; or
                    (B) otherwise permitted to reinsure by the terms of 
                its Federal license; and
            (2) confine its business to reinsurance.
    (d) Nondiscrimination.--
            (1) In general.--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--
                    (A) a subsidiary of a non-United States person;
                    (B) partially owned by a non-United States person; 
                or
                    (C) a United States branch of a non-United States 
                insurer.
            (2) Exception.--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--
                    (A) if the conditions attached are imposed on the 
                legal form in which the national insurer chooses to 
                operate; or
                    (B) 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.

SEC. 1204. CORPORATE GOVERNANCE.

    (a) Compliance With This Act and Applicable Regulations.--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.
    (b) Adherence to State Law.--
            (1) In general.--Except as provided under paragraph (3), 
        and to the extent not inconsistent with the provisions of this 
        Act or regulations issued by the Commissioner under this Act, 
        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.
            (2) Designation.--Each national insurer and national agency 
        shall designate in its bylaws the body of relevant State law 
        selected for its corporate governance procedures.
            (3) Discriminatory provision.--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--
                    (A) shall not be obligated to follow such a 
                provision of the relevant State law; and
                    (B) may follow such other provision of law as the 
                Commissioner determines to be appropriate.
    (c) Independent Audit Committee for National Insurers.--
            (1) Establishment.--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.
            (2) Satisfaction.--The requirement described in paragraph 
        (1) will be satisfied if--
                    (A) 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
                    (B) the role of the audit committee of the 
                controlling person in subparagraph (A) includes review 
                of financial statements of the national insurer.

SEC. 1205. PARTICIPATING POLICY PROCEDURES.

    (a) Choice of Procedures.--A national life insurer in mutual form 
shall, at the time of its initial chartering and licensing under 
sections 1201 and 1203, or its conversion under section 1206, elect to 
either--
            (1) adhere to participating policy procedures of the 
        relevant law of the State in which its main office is located; 
        or
            (2) adhere to the participating policy procedures 
        established by regulation of the Commissioner under subsection 
        (b).
    (b) Regulations.--The Commissioner shall, by regulation, establish 
participating policy procedures, as the Commissioner determines to be 
appropriate to carry out this Act.
    (c) Exception.--No national life insurer in mutual form shall be 
subject to any limitation on the amount of surplus that it may retain.

SEC. 1206. CONVERSION OF STATE INSURER TO NATIONAL INSURER OR STATE 
              INSURANCE AGENCY TO NATIONAL AGENCY.

    (a) Authorization To Convert.--
            (1) In general.--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.
            (2) Organizational form.--A State insurer that converts to 
        a national insurer under paragraph (1) may--
                    (A) retain an organizational form permitted under 
                section 1201(a)(2); or
                    (B) change directly to another organizational form 
                that is permitted under section 1201(a)(2).
    (b) Conversion Procedures.--
            (1) In general.--The Commissioner may, under such 
        regulations as the Commissioner may prescribe, provide for--
                    (A) the conversion of State insurers into national 
                insurers;
                    (B) the conversion of State insurance agencies to 
                national agencies; and
                    (C) the issuance of charters to such converted 
                insurers and agencies.
            (2) Rulemaking.--Regulations issued by the Commissioner 
        under this section shall be consistent with--
                    (A) the regulations issued by the Commissioner 
                under section 1201; and
                    (B) the provisions of section 1242 or 1243, as 
                applicable, in the case of a change of form effected at 
                the time of a conversion of a State insurer into a 
                national insurer.
    (c) Effect of Conversion.--
            (1) In general.--Except as provided under paragraph (2), a 
        State insurer or State insurance agency that converts under 
        this section--
                    (A) 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;
                    (B) shall be deemed to be a continuation of the 
                corporate existence of the State insurer or State 
                insurance agency, as applicable; and
                    (C) 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.
            (2) Exceptions.--Notwithstanding paragraph (1), a State 
        insurer or State insurance agency that converts under this 
        section--
                    (A) shall not be subject to any requirement to 
                maintain deposits with State insurance regulatory 
                authorities;
                    (B) 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
                    (C) 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.
    (d) Special Authority.--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.
    (e) Mutual Holding Company Controlling State Insurers in Stock 
Form.--
            (1) In general.--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--
                    (A) 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
                    (B) upon and after the conversion under this 
                section, the mutual holding company--
                            (i) shall, to the extent provided in 
                        regulations issued by the Commissioner, be 
                        subject to--
                                    (I) title V; and
                                    (II) examination, reporting, 
                                regulation, and other supervision under 
                                this Act; and
                            (ii) 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.
            (2) Conversion to a corporation in stock form.--
        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--
                    (A) is found by the Commissioner to be fair and 
                equitable to the mutual holding company and its 
                members; and
                    (B) is generally similar to conversion of an 
                insurer in mutual form to a national insurer in stock 
                form pursuant to section 1243.
    (f) No Delegation Permitted.--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.

SEC. 1207. CONVERSION OF NATIONAL INSURER TO STATE INSURER OR NATIONAL 
              AGENCY TO STATE AGENCY.

    (a) In General.--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.
    (b) Savings Provision.--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.

SEC. 1208. POWERS.

    (a) In General.--Upon issuance of its charter, a national insurer 
or national agency shall have the power, subject to such regulations as 
the Commissioner may prescribe--
            (1) to have, alter, use, and reproduce a corporate seal, or 
        a facsimile of it;
            (2) to have perpetual succession until such time as it is 
        liquidated, dissolved, merged, or otherwise wound up in 
        accordance with applicable law;
            (3) to adopt, amend, and repeal by-laws;
            (4) to 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;
            (5) to 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;
            (6) to 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;
            (7) to lend money, invest, and reinvest its funds and 
        receive and hold real and personal property as security for 
        repayment;
            (8) to 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;
            (9) to 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;
            (10) to 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;
            (11) to 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 the death of 
        such shareholder, shares of its stock owned by such 
        shareholder;
            (12) in the case of a national life insurer--
                    (A) to 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) to provide for 
                life insurance, annuities, disability income insurance, 
                long-term care insurance, or funding agreements (and 
                incidental benefits), payable in fixed or variable 
                amounts (or both) from such accounts or from the 
                general account (or both);
                    (B) to hold and accumulate funds pursuant to 
                funding agreements; and
                    (C) to provide investment advice and investment 
                management services;
            (13) in the case of a national insurer--
                    (A) to engage in the sale, solicitation, 
                negotiation, and underwriting of insurance;
                    (B) to 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
                    (C) to engage in all other insurance operations and 
                exercise all such incidental powers as shall be 
                necessary to carry on insurance operations;
            (14) in the case of a national agency--
                    (A) to engage in the sale, solicitation, and 
                negotiation of--
                            (i) policies of insurance issued by any 
                        national insurer or State insurer; and
                            (ii) surplus lines insurance and non-
                        admitted insurance for a non-admitted insurer; 
                        and
                    (B) to exercise all such incidental powers as shall 
                be necessary to carry out such activities, including 
                claims adjustment and settlement, risk management, 
                employee benefits advice, retirement planning, and any 
                other insurance-related consulting activities;
            (15) to 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;
            (16) to make donations and otherwise devote its resources 
        for the public welfare or for charitable, scientific, 
        educational, humanitarian, philanthropic, or religious 
        purposes;
            (17) to serve as a promoter, partner, member, associate, or 
        manager of any business entity;
            (18) to provide loss control, advice, exposure 
        identification, and reduction strategies, and recommend and 
        expedite risk financing alternatives;
            (19) to engage in any other lawful activity that is 
        necessary or convenient to further its activities and affairs; 
        and
            (20) to exercise the powers granted by this Act in any 
        State and in any foreign jurisdiction.
    (b) Effect on State Law.--No State may, by statute, regulation, 
order, interpretation, or otherwise, 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.
    (c) Subsidiaries.--
            (1) National insurers.--
                    (A) Authorization.--
                            (i) In general.--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.
                            (ii) Restriction.--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.
                    (B) Calculation.--In calculating the amount 
                invested by a national insurer in a subsidiary under 
                subparagraph (A), there shall be included only the 
                following:
                            (i) 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.
                            (ii) All amounts expended by the national 
                        insurer in acquiring additional common stock, 
                        preferred stock, debt obligations, and other 
                        securities of the subsidiary.
                            (iii) All contributions by the national 
                        insurer to the capital or surplus of the 
                        subsidiary subsequent to its acquisition or 
                        formation.
                    (C) Qualification of investment; when determined.--
                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.
                    (D) Exception.--The limitations provided for in 
                subparagraph (A) shall not apply to investments by a 
                national insurer in--
                            (i) 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
                            (ii) any subsidiary whose sole business 
                        function is to own assets (including other 
                        subsidiaries) that the national insurer itself 
                        is authorized to own.
                    (E) Notice.--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).
            (2) National agencies.--
                    (A) Authorization.--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.
                    (B) Notice.--A national agency shall notify the 
                Commissioner, in writing, not later than 30 calendar 
                days after establishing, investing in, or acquiring a 
                subsidiary.
    (d) Dividends and Distributions to Shareholders.--
            (1) Shareholder dividends and distributions permitted.--A 
        national insurer may declare and pay dividends or make other 
        distributions in cash, bonds, or property on its outstanding 
        shares, unless--
                    (A) the national insurer is insolvent or would be 
                made insolvent by such payment; or
                    (B) the declaration, payment, or distribution would 
                be contrary to any restrictions contained in the 
                charter of the national insurer.
            (2) Source of shareholder dividends and distributions.--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.
            (3) Other provisions.--Shareholder dividends and 
        distributions made pursuant to this subsection shall be subject 
        to--
                    (A) the standards set forth in section 
                1403(a)(1)(E); and
                    (B) the notice requirements of section 1403(b).

SEC. 1209. SEPARATE ACCOUNTS OF NATIONAL LIFE INSURER.

    (a) Ownership.--Any amount allocated by a national life insurer to 
a separate account shall be owned by the national life insurer, the 
assets therein shall be the property of the national life insurer, and 
no national life insurer by reason of such account shall be or hold 
itself out to be a trustee.
    (b) Liabilities.--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.
    (c) Security Interests Permitted.--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.

SEC. 1210. PROTECTED CELLS.

    (a) Establishment.--A national insurer may, in connection with an 
insurance securitization, establish 1 or more protected cells with the 
approval of the Commissioner.
    (b) Protected Cell Assets.--
            (1) Ownership.--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.
            (2) Trustee.--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).
            (3) Liabilities.--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.
    (c) Security Interests Permitted.--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.
    (d) Reach of Creditors and Other Claimants.--
            (1) Availability.--Protected cell assets shall only be 
        available to the creditors of a national insurer that are 
        creditors in respect to that protected cell.
            (2) Recourse.--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.
            (3) Fraud.--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.
    (e) Rulemaking.--The Commissioner shall promulgate regulations that 
establish standards for protected cells established by national 
insurers.
    (f) Effect on State Law.--No State may, by statute, regulation, 
order, interpretation, or otherwise, require licensing or otherwise 
regulate in any manner--
            (1) an investor in an insurance securitization, solely by 
        reason of its investment, as an insurer, reinsurer, or other 
        person transacting insurance; or
            (2) 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.

SEC. 1211. CHARTERING AND LICENSING COMMENCEMENT DATE.

    (a) National Insurer.--The Commissioner may not charter or license 
a national insurer until after the following regulations have been 
published in final form or interim final form:
            (1) The fee and assessment regulations required by section 
        1122.
            (2) The reporting regulations required by section 1124.
            (3) The organizational regulations required by section 
        1201.
            (4) The licensing regulations required by section 1203.
            (5) The participating policy procedures regulations 
        required by section 1205.
            (6) The charter conversion regulations required by section 
        1206.
            (7) The transitional financial regulations required by 
        section 1212.
            (8) The product regulations required by section 1214.
            (9) The market conduct regulations required by section 
        1216.
            (10) The control regulations required by section 1231.
            (11) The merger, consolidation, and acquisition regulations 
        required by section 1232.
            (12) The bulk transfer regulations required by section 
        1233.
            (13) The conversion regulations required by sections 1242 
        and 1243.
            (14) The holding company regulations required by sections 
        1402 and 1403.
            (15) The receivership regulations required by section 1504.
            (16) The insolvency protection regulations required by 
        section 1609.
    (b) National Agencies.--The Commissioner may charter or license a 
national agency after the following regulations have been published in 
final form, including interim final form:
            (1) The fee and assessment regulations required by section 
        1122.
            (2) The reporting regulations required by section 1124.
            (3) The organizational regulations required by section 
        1201.
            (4) The charter conversion regulations required by section 
        1206.
            (5) The market conduct regulations required by section 
        1216.
            (6) The merger, consolidation, and acquisition regulations 
        required by section 1232.
            (7) The producer licensing regulations required by section 
        1301.
            (8) The holding company regulations required by sections 
        1402 and 1403.
    (c) Timing and Notice.--
            (1) Timing.--The regulations described in subsections (a) 
        and (b) shall be published in final form or interim final form, 
        not later than 2 years after the date of the initial 
        appointment and confirmation of the Commissioner.
            (2) Notice.--At such time as the regulations described in 
        subsections (a) or (b) have been issued in final form or 
        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.
            (3) Considering and acting upon applications.--
        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).

         Subtitle B--Financial, Product, and Market Regulations

SEC. 1212. TRANSITIONAL FINANCIAL REGULATIONS.

    (a) Promulgation of Financial Regulations That Are Consistent With 
NAIC Standards and Models.--The Commissioner shall establish, by 
regulation, the following:
            (1) Accounting principles for a national insurer, which are 
        consistent with the statutory accounting practices promulgated 
        by the NAIC in its ``Accounting Practices and Procedures 
        Manual''.
            (2) Auditing standards for a national insurer, which are 
        consistent with the guidance prescribed by the NAIC in its 
        ``Model Regulation Requiring Annual Audited Financial 
        Reports''.
            (3) Investment standards for a national insurer, which are 
        consistent with the ``Investment of Insurers Model Act (Defined 
        Standards Version)'' of the NAIC, except that such investment 
        standards shall not be bound by the provisions of the Model Act 
        related to authorized classes of investments, class or 
        individual investment limitations, or prohibited investments.
            (4) Risk-based capital standards for a national insurer, 
        which are consistent with the ``Risk-Based Capital (RBC) for 
        Insurers Model Act'' and the related ``RBC Instructions'' of 
        the NAIC and nondisclosure rules and remedies for failing to 
        meet such standards.
            (5) Valuation standards for the obligations and liabilities 
        of a national life insurer, which are consistent with the 
        statutory valuation practices promulgated by the NAIC in its 
        ``Accounting Practices and Procedures Manual''.
            (6) Continuing and alternative (nonforfeiture) benefits 
        standards applicable to national life insurers, which are 
        consistent with the ``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'' of the NAIC.
            (7) Standards for the preparation and filing of an annual 
        actuarial opinion on the adequacy of the assets of a national 
        life insurer to meet its reasonably expected obligations and 
        liabilities, which are consistent with the ``Actuarial Opinion 
        and Memorandum Regulation'' of the NAIC.
            (8) 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 ``Property and Casualty Actuarial 
        Opinion Model Law'' and applicable ``NAIC Property and Casualty 
        Annual Statement Instructions''.
    (b) NAIC Standards, Models, Practices, and Instructions.--The NAIC 
standards, models, practices, and instructions referred to in 
subsection (a) shall be the standards, models, practices, and 
instructions adopted by the NAIC as of May 24, 2007.
    (c) Effective Date and Five-Year Transitional Period for Initial 
Financial Regulations.--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.
    (d) NAIC Amendments.--If, after May 24, 2007, the NAIC amends any 
standard, model, practice, or instruction 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, 
model, practice, or instruction should apply to a national insurer, the 
Commissioner may specify, by regulation, whether the amendment applies 
in whole or in part.
    (e) Revisions or Modifications to Initial Financial Regulations by 
Commissioner.--
            (1) In general.--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.
            (2) Special circumstance.--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.
    (f) Accounting Principles.--Notwithstanding subsections (c), (d), 
and (e), accounting principles for a national property/casualty insurer 
shall be consistent with the statutory accounting practices promulgated 
by the NAIC for State property/casualty insurers in its ``Accounting 
Practices and Procedures Manual'', including any amendments thereto.

SEC. 1213. OTHER FINANCIAL REGULATIONS.

    In addition to the financial regulations specified in section 1212, 
the Commissioner may issue other financial regulations as the 
Commissioner determines necessary.

SEC. 1214. PRODUCT REGULATION FOR NATIONAL LIFE INSURERS.

    (a) Applicability.--This section shall apply to the insurance 
business of national life insurers.
    (b) Underwriting Standards.--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--
            (1) based on sound actuarial principles; or
            (2) related to actual or reasonably anticipated experience.
    (c) Law Applicable to Insurance Policies or Other Products of 
National Insurers.--
            (1) Law specified by parties.--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--
                    (A) the jurisdiction in which the main office of 
                the national insurer is located;
                    (B) the jurisdiction in which the principal place 
                of business of the national insurer is located; or
                    (C) the jurisdiction in which the insurance policy 
                or other product is delivered.
            (2) Default law.--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.
            (3) Rulemaking.--The Commissioner shall establish, by 
        regulation, choice of law rules and standards under this 
        subsection.
    (d) Standards for Policies.--
            (1) Policy.--In this subsection, the term ``policy''--
                    (A) means a policy, contract, certificate, or other 
                evidence of life insurance, disability income 
                insurance, or long-term care insurance, or an annuity 
                contract or a rider or endorsement thereto; and
                    (B) does not include--
                            (i) a funding agreement;
                            (ii) a reinsurance contract; or
                            (iii) 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.
            (2) Rulemaking.--The Commissioner shall establish, by 
        regulation, standards for policies issued by a national 
        insurer.
            (3) Types of policy requirements.--The standards 
        established under paragraph (2) may include general policy 
        requirements and requirements regarding particular classes of 
        policies.
    (e) Product Filings.--
            (1) Form filing.--A national insurer shall not issue a 
        policy until the form of the policy has been received by the 
        Commissioner.
            (2) Exemptions.--The Commissioner may, by regulation, 
        exempt particular categories of policies from the filing 
        requirement.
            (3) Compliance certificate.--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.
    (f) Interpretive Rulings.--
            (1) Procedures.--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.
            (2) Public availability.--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.
            (3) Publication of summaries.--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.
    (g) Group, Blanket, and Franchise Insurance.--
            (1) Authorization.--A national insurer may--
                    (A) sell, solicit, negotiate, and underwrite group, 
                blanket, and franchise insurance policies; and
                    (B) extend group, blanket, or franchise insurance 
                policies to insure the dependents of employees or 
                members, or any class of employees or members.
            (2) Rulemaking.--The Commissioner shall, by regulation, 
        establish standards for kinds and qualifications of permissible 
        groups for group, blanket, and franchise insurance policies.
    (h) Insurable Interest.--
            (1) Regulations required.--The Commissioner shall, by 
        regulation--
                    (A) define the term ``insurable interest'';
                    (B) identify what persons have an insurance 
                interest in the health and bodily safety of an 
                individual;
                    (C) establish circumstances under which an 
                insurance policy issued with respect to an individual, 
                other than a group insurance policy, may be 
                effectuated, including any insured consent 
                requirements; and
                    (D) establish rules for insurance policy transfers 
                and assignments, which transactions shall be permitted 
                for insurance policies written or sold in compliance 
                with the regulations.
            (2) Limitation on applicability.--The regulations required 
        by paragraph (1) shall not apply to an annuity contract or a 
        funding agreement.
    (i) Effect of State Law.--No State may, by statute, regulation, 
order, interpretation, or otherwise, impose any standard, relating to 
any matter addressed in this section, on national insurers or persons 
who purchase insurance from national insurers.

SEC. 1215. PRODUCT REGULATION FOR NATIONAL PROPERTY/CASUALTY INSURERS.

    (a) Application.--This section shall apply to the business of 
national property/casualty insurers.
    (b) Maintenance of Copies of Policies.--A national insurer shall 
maintain for inspection a copy of every insurance policy form that it 
uses to insure risks.
    (c) Annual Policy Form Listing.--A national insurer shall annually 
provide the Commissioner with a list of all standard policy forms it 
uses to insure risks.
    (d) Rates, Rating Elements, Price, and Forms.--The Act does not 
authorize the Commissioner to require a national insurer to use any 
particular rate, rating element, price, or form.

SEC. 1216. REGULATION OF SALES AND MARKETING.

    (a) Purpose.--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.
    (b) Rulemaking.--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.

SEC. 1217. PROMPT CORRECTIVE ACTION.

    (a) Rulemaking.--
            (1) In general.--Not later than the expiration of the 6-
        month period beginning upon the date of submission of the 
        report under subsection (b)(3) to the Commissioner, the 
        Commissioner shall promulgate such regulations, applicable to 
        national insurers, as the Commissioner determines appropriate 
        and consistent with the recommendation in that report to ensure 
        that prompt corrective action is taken to resolve any hazardous 
        financial condition of a national insurer.
            (2) Authorized content.--Rules required by this subsection 
        may include such capital measures and categories, capital 
        standards, supervisory criteria, restrictions on permissible 
        actions of such insurers, requirements for such insurers, 
        procedures, provisions regarding conservatorship and 
        receivership of such insurers, and other provisions as the 
        Commissioner considers are appropriate and consistent with any 
        recommendations in the report and the regulations issued 
        pursuant to section 1212(a)(4).
    (b) GAO Study and Report.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study to identify an appropriate 
        structure of procedures and requirements for taking prompt 
        corrective actions with respect to national insurers, to ensure 
        that any hazardous financial condition of such a national 
        insurer is resolved effectively and efficiently, with the 
        fewest possible losses.
            (2) Requirements.--In conducting the study required by this 
        subsection, the Comptroller General shall analyze and evaluate 
        various proposals, structures, methods, and systems for taking 
        prompt corrective actions with respect to various financial 
        entities and institutions, including--
                    (A) the prompt corrective action requirements under 
                section 38 of the Federal Deposit Insurance Act (12 
                U.S.C. 1831o) with respect to insured depository 
                institutions; and
                    (B) the ``Model Regulation to Define Standards and 
                Commissioner's Authority for Companies Deemed to be in 
                Hazardous Financial Condition'' of the NAIC, as updated 
                in 2006.
            (3) Report.--
                    (A) In general.--Not later than the expiration of 
                the 6-month period beginning on the date of enactment 
                of this Act, the Comptroller General shall submit a 
                report to the Committee on Banking, Housing, and Urban 
                Affairs of the Senate, the Committee on Financial 
                Services of the House of Representatives, and the 
                Commissioner, regarding the study required under this 
                subsection.
                    (B) Contents.--The report required under this 
                paragraph shall describe the study and the results of 
                the evaluations conducted under the study, and shall 
                include a specific recommendation to the Commissioner 
                for establishment of an appropriate structure of 
                procedures and requirements for taking prompt 
                corrective actions with respect to national insurers, 
                to ensure that any hazardous financial condition of a 
                national insurer is resolved effectively and 
                efficiently with the fewest possible losses.

                        Subtitle C--Reinsurance

SEC. 1221. FEDERAL LICENSING OF REINSURERS.

    (a) Authority to License.--
            (1) In general.--The Commissioner may--
                    (A) license insurers that are not National Insurers 
                to provide reinsurance; and
                    (B) prescribe, by regulation, the standards and 
                procedures for granting such licenses.
            (2) Criteria.--The standards prescribed under paragraph 
        (1)(B) shall give due consideration to--
                    (A) the public interest in providing secure and 
                sufficient reinsurance capacity in the United States; 
                and
                    (B) the need for promoting fair and effective 
                competition.
    (b) Determination and Finding; Issuance of License.--
            (1) Examination and investigation.--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.
            (2) Publication of findings.--The Commissioner shall 
        publish the Commissioner's findings and determination under 
        paragraph (1).
            (3) Issuance of federal license.--
                    (A) In general.--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.
                    (B) Restriction.--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 1211.
    (c) Minimum Standards for Licensing of Non-United States 
Insurers.--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--
            (1) 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;
            (2) submit to the jurisdiction of Federal, State, and local 
        courts in the United States; and
            (3) demonstrate that all judgments of all United States 
        courts would be enforceable and collectible by--
                    (A) 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
                    (B) 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.
    (d) Revocation of License.--
            (1) In general.--The Commissioner may revoke, suspend, or 
        restrict a Federal reinsurer's license in accordance with 
        subtitle C of title I.
            (2) Status of federally licensed reinsurer.--For purposes 
        of this subsection, a federally licensed reinsurer shall be 
        deemed to be a National Insurer under subtitle C of title I.
    (e) Annual Reports.--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.

SEC. 1222. CREDIT FOR INSURANCE CEDED BY A NATIONAL INSURER OR 
              FEDERALLY LICENSED REINSURER.

    (a) Credit for Insurance Ceded to a National Insurer or a Federally 
Licensed Reinsurer.--A national insurer may establish an asset or 
reduce its liabilities, to the extent of such liabilities, for 
insurance ceded to another national insurer or federally licensed 
reinsurer.
    (b) Other Asset or Reduction From Liability for Insurance Ceded.--A 
national insurer may establish an asset or reduce its liabilities, to 
the extent of such liabilities, for insurance--
            (1) that is ceded to--
                    (A) a State insurer;
                    (B) a United States branch entered through a State; 
                or
                    (C) a non-United States insurer; and
            (2) if such insurance is ceded consistent with the 
        standards established by the Commissioner pursuant to 
        subsection (c).
    (c) Regulation.--The Commissioner shall establish, by regulation, 
standards governing insurance ceded by a national insurer, as the 
Commissioner may determine to be necessary to protect the policyholders 
of a national insurer.

SEC. 1223. RELATIONSHIP TO STATE LAW.

    (a) Domiciliary State Discrimination Prohibited.--Except as 
provided in section 1224(b), no State may, by statute, regulation, 
order, interpretation, or otherwise, prevent or interfere with a State 
insurer domiciled in such State or a United States branch entered 
through such State from establishing an asset or reducing its liability 
as a result of insurance ceded to a national insurer or a federally 
licensed reinsurer, to the same extent as the State would allow such 
insurer, if the insurance were ceded to another State insurer domiciled 
in such State.
    (b) Non-Domiciliary Action Prohibited.--No State may, by statute, 
regulation, order, interpretation, or otherwise, prevent or interfere 
with a State insurer not domiciled in that State or a United States 
branch entered through another State from establishing an asset or 
reducing its liability as a result of insurance ceded to a national 
insurer or a federally licensed reinsurer, if the domicile of the 
ceding insurer allows such asset or reduction.

SEC. 1224. FREEDOM OF COMMERCIAL CONTRACT.

    (a) Prohibition.--Except as provided in subsection (b), a State may 
not--
            (1) deny a State insurer or a United States branch entered 
        through a State all or part of any asset, or require any 
        increase in liability for insurance ceded to any national 
        insurer or federally licensed reinsurer because its reinsurance 
        contract contains, or does not contain, 1 or more specific 
        contract terms; or
            (2) otherwise require specific language or terms in any 
        reinsurance contract.
    (b) Construction.--Notwithstanding subsection (a), a State may 
require a State insurer domiciled in such State or a United States 
branch entered through that State to use contract terms that are 
substantially equivalent to those required under section 1222(c).

SEC. 1225. REVIEW BY THE COMMISSIONER.

    (a) Review.--The Commissioner shall review any State action taken 
pursuant to subsection (b) of section 1224 to determine if the State 
action meets the standards set forth in that subsection.
    (b) Standards of Review.--Any State action taken pursuant to 
section 1224(b) shall meet the standards of this section, if--
            (1) it is closely based on standards established by the 
        Commissioner pursuant to section 1222(c);
            (2) it is made in consultation with the Commissioner;
            (3) it serves a legitimate State interest; and
            (4) it does not frustrate the subject reinsurance contract.
    (c) Notice of Failure; Effect of Failure.--If the Commissioner 
finds that any State action taken pursuant to subsection (b) of section 
1224 fails to meet any of the standards set forth in that subsection, 
the Commissioner shall provide the applicable State and State insurer 
with notice of, and reasons for, such failure, and such State action 
shall be deemed to be subject to section 1224(a), notwithstanding the 
terms of section 1224(b).
    (d) No Delegation Permitted.--The Commissioner may not delegate to 
any insurance self-regulatory organization any authority conferred 
under this section with respect to review by the Commissioner of any 
State action taken pursuant to section 1224(b).

     Subtitle D--Acquisitions of Control; Mergers; Bulk Transfers; 
                             Domestication

SEC. 1231. ACQUISITION OF CONTROL OF NATIONAL INSURERS.

    (a) Definitions.--For purposes of this section--
            (1) the term ``national insurer'' includes any person 
        controlling a national insurer; and
            (2) the term ``person'' does not include any securities 
        broker holding, in the usual and customary functions of the 
        broker, less than 20 percent of the voting securities of a 
        national insurer or of any person who controls a national 
        insurer.
    (b) Commissioner Approval Required.--
            (1) In general.--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 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. No person shall enter into an 
        agreement to merge with or otherwise acquire control of a 
        national insurer or any person controlling a national insurer 
        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--
                    (A) such person has filed with the Commissioner and 
                has sent to the national insurer, a statement that 
                complies with the regulations prescribed under 
                paragraph (3); and
                    (B) the offer, request, invitation, agreement, or 
                acquisition has been approved by the Commissioner.
            (2) Savings provision.--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, if such transaction is conditioned upon 
        obtaining the approval of the Commissioner in accordance with 
        paragraph (1).
            (3) Form and content of statement.--The Commissioner shall, 
        by regulation, prescribe the form and content of the statement 
        to be filed under paragraph (1)(A).
            (4) Approval by commissioner.--The Commissioner shall 
        approve any merger or other acquisition of control referred to 
        in this subsection unless the Commissioner finds that--
                    (A) after the acquisition of control, the national 
                insurer 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 
                was previously licensed;
                    (B) the financial condition of any acquiring person 
                may jeopardize the financial stability of the national 
                insurer or be hazardous to the policyholders of the 
                national insurer;
                    (C) the plans or proposals of the acquiring person 
                to liquidate the national insurer, 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;
                    (D) those persons who would control the operation 
                of the national insurer lack the competence, 
                experience, or integrity required to protect the 
                interests of policyholders of the national insurer; or
                    (E) the acquisition is likely to be hazardous to 
                the insurance-buying public.
    (c) Hearing.--
            (1) In general.--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).
            (2) Procedures.--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.
    (d) Exemptions.--The provisions of this section shall not apply 
to--
            (1) 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 as otherwise not comprehended within the purposes 
        of this section; or
            (2) a merger, consolidation, or acquisition subject to 
        section 1232.
    (e) Voting of Securities.--
            (1) Prohibition.--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 meeting, or may 
        be counted for quorum purposes.
            (2) Effect on shares.--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.
            (3) Invalidation of action.--No action taken at any meeting 
        described under paragraph (1) shall be invalidated by the 
        voting of the securities, unless--
                    (A) the action would affect control of the national 
                insurer; or
                    (B) such invalidation is ordered by a court.
            (4) Acquisition in contravention of this act.--If a 
        national insurer or the Commissioner has reason to believe that 
        any security of the national insurer has been or is about to be 
        acquired in contravention of the provisions of this section, 
        the national insurer or the Commissioner may apply to 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--
                    (A) to enjoin any offer, request, invitation, 
                agreement, or acquisition made in contravention of this 
                section;
                    (B) to enjoin the voting of any security so 
                acquired;
                    (C) to void any vote of the security already cast 
                at any meeting of shareholders; and
                    (D) 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 the public may require.
    (f) Sequestration of Voting Securities.--
            (1) In general.--If a person has acquired or is proposing 
        to acquire any voting securities in violation of this section, 
        the national insurer 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--
                    (A) seize or sequester any voting securities of the 
                national insurer owned directly or indirectly by the 
                person; and
                    (B) issue such order as may be appropriate to carry 
                out the provisions of this section.
            (2) Situs of ownership.--Notwithstanding any other 
        provision of law, for the purposes of this section, the situs 
        of ownership of the securities of a national insurer shall be 
        deemed to be the State in which the main office of the national 
        insurer is located.
    (g) Conflict With Other Federal Laws.--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 Bank Holding Company Act of 1956 (12 
U.S.C. 1841(p))).
    (h) No Delegation Permitted.--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.

SEC. 1232. MERGERS, CONSOLIDATIONS, AND ACQUISITIONS OF NATIONAL 
              INSURERS.

    (a) National Insurer as Resulting Insurer.--
            (1) In general.--Notwithstanding any other provision of 
        law, 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.
            (2) Merger, consolidation, and acquisition procedures.--The 
        Commissioner shall establish, by regulation, procedures for--
                    (A) 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
                    (B) 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.
            (3) Effect of merger or consolidation.--Upon the merger or 
        consolidation of a national insurer with another national 
        insurer or a State insurer under this section--
                    (A) 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;
                    (B) 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;
                    (C) 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
                    (D) 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.
            (4) Special authority.--The Commissioner may, subject to 
        such conditions as the Commissioner shall 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.
    (b) State Insurer as Resulting Insurer.--
            (1) In general.--Subject to applicable State law and such 
        notification procedures as the Commissioner shall 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.
            (2) Savings provision.--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.
    (c) Effect of Assumption of Liabilities.--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.
    (d) No Delegation Permitted.--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.
    (e) Coordination.--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).

SEC. 1233. BULK TRANSFERS.

    (a) Definitions.--In this section, the following definitions shall 
apply:
            (1) Assuming insurer.--The term ``assuming insurer'' means 
        the insurer that purchases or otherwise acquires existing 
        insurance policies from another insurer by bulk transfer.
            (2) Block of business.--The term ``block of business'' 
        means all those insurance policies of an insurer under a 
        particular policy form.
            (3) Bulk transfer.--The term ``bulk transfer''--
                    (A) 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
                    (B) does not include--
                            (i) any sale in which the transferring 
                        insurer retains direct or indirect control of 
                        the assets supporting the transferred insurance 
                        policies;
                            (ii) any transaction effected by an 
                        agreement under which the transferring insurer 
                        continues to remain directly liable to the 
                        policyholders under the insurance policies;
                            (iii) 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;
                            (iv) 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;
                            (v) any transaction effected by an insurer 
                        subject to a judicial order of receivership, 
                        liquidation, or rehabilitation; or
                            (vi) any transfer of liabilities from 1 
                        insurer to another under a single group 
                        insurance policy upon the request of the group 
                        policyholder.
            (4) Permitted national insurer.--The term ``permitted 
        national insurer'' means--
                    (A) a State insurer that is converting to a 
                national insurer under section 1206; or
                    (B) a national insurer that is being newly 
                chartered under section 1201 and licensed under section 
                1203.
            (5) Transferred insurance policies.--The term ``transferred 
        insurance policies'' means the insurance policies that are 
        subject to the bulk transfer.
            (6) Transferring insurer.--The term ``transferring 
        insurer'' means the insurer in privity of contract with the 
        policyholders under the existing insurance policies that are 
        subject to the bulk transfer.
    (b) Bulk Transfers Authorized.--The following bulk transfers are 
authorized:
            (1) A State insurer as the transferring insurer and a 
        permitted national insurer as the assuming insurer.
            (2) A permitted national insurer as the transferring 
        insurer and a State insurer as the assuming insurer.
            (3) A national insurer as the transferring insurer and a 
        national insurer as the assuming insurer.
            (4) A State insurer as the transferring insurer and a 
        national insurer that is not a permitted national insurer as 
        the assuming insurer.
            (5) A national insurer that is not a permitted national 
        insurer as the transferring insurer and a State insurer as the 
        assuming insurer.
    (c) Commissioner Approval.--
            (1) In general.--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 shall 
        prescribe.
            (2) Standard of approval.--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.
    (d) Policyholder Consent.--
            (1) No consent required.--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.
            (2) Between national insurers.--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.
            (3) Additional provisions.--In addition to any policyholder 
        consent required by any other applicable provision of law, the 
        Commissioner may prescribe, by regulation, 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.
    (e) Release From Liability.--Upon the completion of a bulk transfer 
under this section, the transferring insurer shall be released from its 
obligations under the transferred insurance policies.
    (f) State Law.--
            (1) Prohibition.--Except as provided in paragraph (2), a 
        State may not, by statute, regulation, order, interpretation, 
        or otherwise--
                    (A) require a national insurer, a permitted 
                national insurer, or a State insurer to--
                            (i) obtain policyholder consent to a bulk 
                        transfer; or
                            (ii) submit the bulk transfer to State 
                        review or action (including approval and 
                        nondisapproval); or
                    (B) prevent or significantly interfere with a bulk 
                transfer effected pursuant to this section.
            (2) Construction.--Paragraph (1) shall not be construed to 
        prohibit any State from--
                    (A) collecting, reviewing, and taking action 
                (including approval or disapproval) on applications and 
                other documents or reports concerning a proposed bulk 
                transfer permitted under--
                            (i) 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
                            (ii) 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
                    (B) requiring policyholder consent of a proposed 
                bulk transfer permitted under paragraph (4) or (5) of 
                subsection (b).
            (3) Standards.--A review or action meets the standards 
        under this paragraph, if it--
                    (A) is based on standards that are not more onerous 
                than those imposed by the Commissioner;
                    (B) occurs within a reasonable time frame that 
                advances the purposes of this section;
                    (C) is made in close consultation and cooperation 
                with the Commissioner;
                    (D) is without bias or discrimination toward either 
                the transferring insurer or the assuming insurer;
                    (E) serves a legitimate State interest; and
                    (F) does not frustrate the proposed bulk transfer.
            (4) Notice of failure.--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.
    (g) Differential Treatment Prohibited.--A State may not, by 
statute, regulation, order, interpretation, or otherwise, 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.
    (h) No Delegation Permitted.--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.

SEC. 1234. DOMESTICATION OF UNITED STATES BRANCH OF A NON-UNITED STATES 
              INSURER.

    (a) Domestication Permitted.--Notwithstanding any other provision 
of law, 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.
    (b) Approval by Commissioner.--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.
    (c) Effective Date of Domestication.--
            (1) In general.--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.
            (2) Effect of domestication.--On the date described in 
        paragraph (1)--
                    (A) 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;
                    (B) the acquiring national insurer shall be deemed 
                to have assumed all liabilities of the United States 
                branch;
                    (C) all deposits of the United States branch held 
                by State officers or other State regulatory agencies 
                under State law shall be released; and
                    (D) the non-United States insurer and the United 
                States branch shall be released from all liabilities so 
                assumed.
    (d) Release of Deposits.--At the time of the domestication of a 
United States branch under this section, the Commissioner shall--
            (1) 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
            (2) 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.
    (e) Withdrawal and Transfer of Trusteed Assets.--
            (1) In general.--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--
                    (A) withdraw the trusteed assets from the trust; 
                and
                    (B) transfer and deliver to the acquiring national 
                insurer all assets held by such trustee.
            (2) Limitation.--No State may, by statute, regulation, 
        order, interpretation, or otherwise, 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 domesticated 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.
    (f) No Delegation Permitted.--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.

SEC. 1235. MERGERS, CONSOLIDATIONS, AND ACQUISITIONS OF NATIONAL 
              AGENCIES.

    (a) National Agency Resulting.--
            (1) In general.--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.
            (2) Merger, consolidation, and acquisition procedures.--The 
        Commissioner is authorized, under such regulations as the 
        Commissioner may prescribe, to provide for--
                    (A) 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
                    (B) 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.
            (3) Effect of merger or consolidation.--Upon the merger or 
        consolidation of a national agency with another national agency 
        or a State insurance agency under this section--
                    (A) 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
                    (B) 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.
            (4) Limitation.--Upon a merger or consolidation under this 
        subsection, the resulting agency--
                    (A) 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
                    (B) 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.
            (5) Special authority.--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.
    (b) State Insurance Agency Resulting.--
            (1) In general.--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.
            (2) Savings provision.--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.
    (c) Effect of Assumption of Liabilities.--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.
    (d) No Delegation Permitted.--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.

                        Subtitle E--Conversions

SEC. 1241. DEFINITIONS.

    In this subtitle, the following definitions shall apply:
            (1) Adoption date.--The term ``adoption date'' means the 
        date on which the board of directors of the converting mutual 
        insurer or converting stock insurer adopts the plan of 
        conversion.
            (2) Converted mutual insurer.--The term ``converted mutual 
        insurer'' 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.
            (3) Converted stock insurer.--The term ``converted stock 
        insurer'' means the national insurer in stock form into which a 
        mutual insurer has been converted in accordance with the 
        provisions of section 1243.
            (4) Converting mutual insurer.--The term ``converting 
        mutual insurer'' means the mutual insurer that is converting 
        under a plan of conversion under section 1243.
            (5) Converting stock insurer.--The term ``converting stock 
        insurer'' means the stock life insurer that is converting under 
        a plan of conversion under section 1242.
            (6) Membership interests.--The term ``membership 
        interests''--
                    (A) 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;
                    (B) 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
                    (C) does not include rights in surplus, if any.
            (7) Mutual insurer.--The term ``mutual insurer'' 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.
            (8) Plan of conversion or plan.--The terms ``plan of 
        conversion'' and ``plan'' mean a plan of conversion adopted by 
        a stock life insurer or a mutual insurer in accordance with 
        this subtitle.
            (9) Rights in surplus.--The term ``rights in surplus''--
                    (A) 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;
                    (B) 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
                    (C) does not include any right expressly conferred 
                solely by the terms of an insurance policy.
            (10) Stock life insurer.--The term ``stock life insurer'' 
        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.

SEC. 1242. CONVERSION OF STOCK LIFE INSURER TO NATIONAL LIFE INSURER IN 
              MUTUAL FORM.

    (a) Authority To Convert.--Notwithstanding any other provision of 
law, a stock life insurer may convert to a national insurer in mutual 
form in accordance with a plan of conversion approved by the 
Commissioner under this section that meets the requirements of this 
section, and by complying with the requirements of this section and 
rules issued by the Commissioner under this Act.
    (b) Plan of Conversion.--
            (1) In general.--The plan of conversion required by this 
        section--
                    (A) shall be adopted by the board of directors of 
                the converting stock insurer; and
                    (B) shall provide for the conversion of the 
                converting stock insurer into a national life insurer 
                in mutual form.
            (2) Issuance of stock after adoption date.--No additional 
        shares of capital stock shall be issued after the adoption 
        date, except that--
                    (A) stock options to purchase capital stock may 
                continue to be issued under existing contracts; and
                    (B) outstanding options may continue to be 
                exercised until the effective date of the plan of 
                conversion.
            (3) Contents.--The plan of conversion shall provide for--
                    (A) 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
                    (B) 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.
    (c) Approval of Plan by Commissioner.--The Commissioner shall 
approve the plan of conversion required by this section, if the 
Commissioner finds, after a hearing, that--
            (1) the plan is fair and equitable to the policyholders, 
        shareholders, and holders of options to acquire capital stock 
        of the converting stock insurer;
            (2) the plan does not violate the law; and
            (3) 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.
    (d) Vote on Approval of Plan.--
            (1) Stockholders.--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.
            (2) Policyholders.--
                    (A) Submission.--The plan of conversion shall be 
                submitted to policyholders of the converting stock 
                insurer--
                            (i) who are insured for at least $1,000; 
                        and
                            (ii) whose policy of insurance is in 
                        force--
                                    (I) for a period of at least 1 year 
                                before the adoption date;
                                    (II) on the adoption date; and
                                    (III) on the date of the meeting of 
                                policyholders called for the purpose of 
                                approving the plan of conversion.
                    (B) Approval.--The plan of conversion shall be 
                subject to the approval of a majority of the votes cast 
                by the policyholders described in subparagraph (A).
    (e) Effect of Conversion on Converted Mutual Insurers.--
            (1) In general.--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.
            (2) No effect on existing rights and liabilities.--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.
            (3) Rights after conversion.--After conversion, the 
        converted mutual insurer shall--
                    (A) 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
                    (B) retain the rights and contracts existing prior 
                to conversion, subject to the effect of the plan.
    (f) Time Limits for Plan Actions.--
            (1) In general.--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).
            (2) Plan withdrawn.--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.
    (g) Effect on State Law.--No State may, by statute, regulation, 
order, interpretation, or otherwise, 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.
    (h) No Delegation Permitted.--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.

SEC. 1243. CONVERSION OF MUTUAL INSURER TO NATIONAL INSURER IN STOCK 
              FORM.

    (a) Authority To Convert.--Notwithstanding any other provision of 
law, a mutual insurer may convert to a national insurer in stock form 
in accordance with a plan of conversion approved by the Commissioner 
under this section that meets the requirements of this section, and by 
complying with the requirements of this section and the rules issued by 
the Commissioner under this Act.
    (b) Plan of Conversion.--
            (1) In general.--The plan of conversion--
                    (A) shall be adopted by the board of directors of 
                the converting mutual insurer;
                    (B) shall provide for the conversion of the 
                converting mutual insurer into a national insurer in 
                stock form; and
                    (C) may provide for effecting the conversion by 
                merger of the mutual insurer with another company.
            (2) Contents.--The plan of conversion shall provide that--
                    (A) all membership interests and rights in surplus 
                are extinguished;
                    (B) 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
                    (C) eligible persons may receive 1 or more kinds of 
                consideration, including--
                            (i) cash;
                            (ii) shares of capital stock of the 
                        converting mutual insurer;
                            (iii) 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;
                            (iv) premium credits;
                            (v) enhanced insurance benefits; or
                            (vi) 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.
    (c) Approval of Plan by Commissioner.--The Commissioner shall 
approve the plan of conversion required by this section, if the 
Commissioner finds, after a hearing, that--
            (1) the plan is fair and equitable to the insurer and its 
        policyholders;
            (2) the plan does not violate the law; and
            (3) 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.
    (d) Vote on Approval of Plan.--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.
    (e) Employee Stock Purchases; Stock Options.--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.
    (f) Effect of Conversion on Converted Stock Insurers.--
            (1) In general.--On the effective date of the plan of 
        conversion--
                    (A) the mutual insurer shall become a national 
                insurer in stock form;
                    (B) all membership interests and rights in surplus 
                shall be extinguished; and
                    (C) 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.
            (2) No effect on existing rights and liabilities.--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.
            (3) Rights after conversion.--After conversion, the 
        converted stock insurer shall--
                    (A) 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
                    (B) retain the rights and contracts existing prior 
                to conversion, subject to the effect of the plan.
    (g) Limitations on Acquiring Converted Stock Insurer.--
            (1) In general.--During the 5-year period beginning on 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.
            (2) Effect of violation.--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.
            (3) Enforcement.--
                    (A) Commencement.--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--
                            (i) the United States district court for 
                        the judicial district in which the main office 
                        of the converted stock insurer is located;
                            (ii) the United States District Court for 
                        the District of Columbia; or
                            (iii) any other court having jurisdiction.
                    (B) Order.--The court may issue any order it finds 
                necessary to cure the violation or to prevent the 
                proposed action.
    (h) Time Limits for Plan Actions.--
            (1) In general.--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).
            (2) Plan withdrawn.--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.
    (i) Effect on State Law.--No State may, by statute, regulation, 
order, interpretation, or otherwise, 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.
    (j) No Delegation Permitted.--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.

                       Subtitle F--State Taxation

SEC. 1251. STATE TAXATION OF NATIONAL INSURERS.

    (a) State Taxation Rule.--Except as provided in subsection (b) and 
section 1610, a national insurer doing business in any State shall be 
subject to all applicable State and local taxes, assessments, and 
charges including insurance retaliatory taxes or other similar taxes, 
and shall be entitled to all applicable tax credits, deductions, and 
offsets provided under State law, as well as all policyholder surcharge 
provisions 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), except that, such national insurer shall not be 
subject to--
            (1) any additional taxes, assessments, and charges imposed 
        by such State (or local government) by reason of the failure of 
        the national insurer to be licensed or otherwise authorized to 
        conduct business or write or sell insurance policies, by such 
        State; or
            (2) special assessments and charges that fund services that 
        the State does not provide with respect to the national 
        insurer.
    (b) Exception.--No State shall have power to impose an insurance 
retaliatory tax on any national insurer, unless--
            (1) 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
            (2) 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).
    (c) Designation of Domicile.--
            (1) In general.--A national insurer may designate, as its 
        State of domicile, by filing such designation in writing with 
        the Commissioner--
                    (A) the State in which the national insurer's 
                principal place of business in the United States is 
                located; or
                    (B) 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.
            (2) No designation by national insurer.--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.
    (d) Change in Domicile.--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).
    (e) Status of National Insurer.--For purposes of State taxation, a 
national insurer--
            (1) shall not be considered a department, agency, or 
        instrumentality of the Federal Government; and
            (2) 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.

SEC. 1252. STATE TAXATION OF NATIONAL AGENCIES.

    (a) State Taxation Rule.--A national agency shall be subject to all 
taxes imposed under any applicable provision of State law, to the same 
extent and in the same manner as an agency chartered in the State in 
which the national agency is considered domiciled pursuant to 
subsection (b).
    (b) State of Domicile.--For purposes of this section, the State of 
domicile of a national agency shall be deemed to be the State in which 
the principal place of business of the national agency in the United 
States is located.
    (c) Status of National Agency.--For purposes of State taxation, a 
national agency shall not--
            (1) be considered to be a department, agency, or 
        instrumentality of the Federal Government; and
            (2) 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.

SEC. 1253. STATE TAXATION OF NON-ADMITTED AND SURPLUS LINES INSURANCE.

    (a) In General.--No State, other than the State in which an insured 
maintains its principal place of business or, in the case of an 
individual, maintains a principal residence, may require any Premium 
Tax for Non-Admitted Insurance or Surplus Lines Insurance.
    (b) Definition.--For purposes of this section, the term ``Premium 
Tax for Non-Admitted or Surplus Lines Insurance'' means any tax, fee, 
assessment, or other charge imposed by a State on an insured, either 
directly or through a producer that is based upon any payment made as 
consideration for Non-Admitted Insurance or Surplus Lines Insurance, 
and any other compensation given in consideration for a contract of 
insurance.

  TITLE III--INSURANCE PRODUCERS AND OTHER INSURANCE SERVICING PERSONS

SEC. 1301. FEDERAL LICENSING OF INSURANCE PRODUCERS.

    (a) Commission Authority.--The Commissioner--
            (1) shall have authority to issue Federal producer 
        licenses; and
            (2) shall, by regulation--
                    (A) define the line or lines of insurance for which 
                a person may obtain a Federal producer license, which 
                shall include surplus lines of insurance or non-
                admitted insurance; and
                    (B) 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.
    (b) National Agencies.--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.
    (c) Authority of Person Holding a Federal Producer License.--A 
Federal producer license issued under this section authorizes the 
person to sell, solicit, or negotiate insurance in any State for any 
line or lines of insurance specified in such license, and exercise all 
such incidental powers, as shall be necessary to carry out such 
activities, including claims adjustments and settlement, risk 
management, employee benefits advice, retirement planning, and any 
other insurance-related consulting activities.
    (d) Examinations and Reports.--In addition to the examination and 
reporting requirements applicable to national agencies pursuant to 
sections 1124 and 1125, the Commissioner may--
            (1) provide for the examination of federally licensed 
        insurance producers that are not national agencies only in 
        response to a complaint or any evidence that the federally 
        licensed insurance producer has violated or is about to 
        violate--
                    (A) a law, rule, or regulation;
                    (B) any condition imposed in writing by the 
                Commissioner in connection with issuing a Federal 
                producer license; or
                    (C) any written agreement entered into with the 
                Commissioner; and
            (2) 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.
    (e) Information Practices.--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--
            (1) this protection may not apply to false statements made 
        with actual malice; and
            (2) such regulation shall not abrogate or modify any 
        existing common law or statutory privileges or immunities.
    (f) Authority of State Licensed Insurance Producer.--An insurance 
producer licensed by a State may sell, solicit, or negotiate insurance 
in such State on behalf of a national insurer without a Federal 
producer license.

SEC. 1302. PRODUCER DATABASE.

    (a) In General.--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.
    (b) Maintenance.--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.

SEC. 1303. SUPERVISION AND OVERSIGHT OF FEDERALLY LICENSED INSURANCE 
              PRODUCERS.

    (a) Purpose.--The purpose of this section is to establish when a 
national insurer, national agency, or other federally licensed 
insurance producer has a duty to supervise a federally licensed 
insurance producer who is an individual. The duty to supervise as 
required in this section shall be in addition to the authority of the 
Commissioner to exercise its powers under section 1102(b).
    (b) Duty To Supervise.--
            (1) National insurers.--A national insurer shall have a 
        duty to supervise the sales and marketing practices of a 
        federally licensed insurance producer who is an individual with 
        respect to the sale, solicitation, or negotiation of insurance 
        policies of such national insurer, if--
                    (A) such producer is an--
                            (i) employee of the national insurer; or
                            (ii) agent of the national insurer; and
                    (B) the entire or principal business activity of 
                such producer is devoted to the sale, solicitation, or 
                negotiation of insurance policies for such insurer, the 
                supervision of the agents for such insurer, or both.
            (2) National agencies and other federally licensed 
        producers.--A national agency or other federally licensed 
        insurance producer has a duty to supervise the sales and 
        marketing practices of a federally licensed insurance producer 
        who is an individual with respect to the sale, solicitation, or 
        negotiation of insurance policies, if such producer--
                    (A) is an employee of such agency or other 
                producer, and the sale, solicitation, and negotiation 
                of insurance is within the scope of employment of the 
                producer; or
                    (B) is an agent of such agency or other producer, 
                and the sale, solicitation, and negotiation of 
                insurance is pursuant to the terms of an agreement 
                between the agent and such national agency or other 
                producer.
            (3) Standards for supervision.--The Commissioner shall, by 
        regulation, establish standards for the duties established in 
        paragraphs (1) and (2). Such standards shall not conflict with 
        the rules adopted by any self-regulatory organization approved 
        by the Securities and Exchange Commission pursuant to its 
        authority under section 19(b)(1) of the Securities Exchange Act 
        of 1934 (15 U.S.C. 78s(b)(1)) for broker-dealer supervision of 
        registered representatives.
            (4) Exemption.--The Commissioner may, by regulation, exempt 
        any class of persons from the duties established under 
        paragraphs (1) and (2), if the Commissioner determines that, 
        given the nature of the business relationship with the 
        federally licensed insurance producer who is an individual, it 
        would be unreasonable or inappropriate to require the class 
        member to supervise such producer.
            (5) No duty.--A national insurer, national agency, or other 
        federally licensed insurance producer shall not have a duty to 
        supervise the sales and marketing practices of persons not 
        described in paragraph (1) or (2).
            (6) Oversight of individual independent federally licensed 
        insurance producers.--
                    (A) In general.--The sales and marketing practices 
                of a federally licensed insurance producer who is an 
                individual 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 a person subject to supervision under 
                the terms of paragraph (1) or (2).
                    (B) Standards and procedures.--The Commissioner 
                shall, by regulation, establish standards and 
                procedures for the direct oversight of the sales and 
                marketing practices of federally licensed insurance 
                producers described in subparagraph (A).
    (c) Wholesale Life Insurance Brokerage Agencies.--This section 
shall not apply to any wholesale life insurance brokerage agency, as 
that term is defined by the Commissioner.

SEC. 1304. RELATIONSHIP TO STATE LAW.

    (a) No State Restrictions.--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.
    (b) Acts Protected From State Restrictions.--The acts referred to 
in subsection (a) are the following:
            (1) 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.
            (2) 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.
            (3) 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.
            (4) Directly or indirectly underwriting, collecting charges 
        or premiums, or adjusting or settling claims, in connection 
        with policies of insurance written by a national insurer.
    (c) Activities of Federally Licensed Insurance Producers.--No State 
may--
            (1) by statute, regulation, order, interpretation, or 
        otherwise, prevent or restrict a federally licensed insurance 
        producer from engaging in any activity within the scope of 
        authority granted under section 1301(c); or
            (2) 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.
    (d) Activities of State Producers.--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.

SEC. 1305. LICENSING COMMENCEMENT DATE.

    (a) Federally Licensed Insurance Producers.--The Commissioner shall 
not license a Federal insurance producer until after the following 
regulations have been published in final form or interim final form:
            (1) The fee and assessment regulations required by section 
        1122.
            (2) The reporting regulations required by section 1124.
            (3) The market conduct regulations required by section 
        1216.
            (4) The producer licensing regulations required by section 
        1301.
            (5) Such other regulations that the Commissioner 
        determines, at the discretion of the Commissioner, to be 
        necessary prior to the initial licensing of Federal insurance 
        producers.
    (b) Timing and Notice.--
            (1) Timing.--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.
            (2) Notice.--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 under 
        this title.

                      TITLE IV--HOLDING COMPANIES

SEC. 1401. DEFINITIONS.

    In this title, the following definitions shall apply:
            (1) Extraordinary dividend or distribution.--Except as may 
        otherwise be specified by the Commissioner by regulation, the 
        term ``extraordinary dividend or distribution'' 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--
                    (A) 10 percent of the policyholder surplus of the 
                national insurer, as of the prior December 31; or
                    (B) the net income of the national insurer for the 
                12-month period ending on the prior December 31.
            (2) Insurance holding company system.--The term ``insurance 
        holding company system'' means 2 or more affiliated persons, 1 
        or more of which is a national insurer.

SEC. 1402. REGISTRATION.

    (a) Registration.--Each national insurer that is a member of an 
insurance holding company system shall register with the Commissioner.
    (b) Registration Statement.--The Commissioner shall, by regulation, 
prescribe--
            (1) the form and content of the registration statement to 
        be filed pursuant to subsection (a); and
            (2) the time and place where the registration statement is 
        required to be filed with the Commissioner.
    (c) Termination of Registration.--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.
    (d) Consolidated Registration Statement.--The Commissioner may 
require or allow 2 or more affiliated national insurers to file a 
consolidated registration statement.
    (e) Exemptions.--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.
    (f) Disclaimer.--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.

SEC. 1403. STANDARDS AND MANAGEMENT OF A NATIONAL INSURER WITHIN AN 
              INSURANCE HOLDING COMPANY SYSTEM.

    (a) Transactions Within an Insurance Holding Company System.--
            (1) Standards.--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:
                    (A) 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.
                    (B) 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.
                    (C) Expenses incurred and payment received shall be 
                allocated to the national insurer in conformity with 
                customary insurance accounting practices consistently 
                applied.
                    (D) 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.
                    (E) The national insurer's surplus following any 
                dividends or distributions to shareholders shall be 
                reasonable in relation to the outstanding liabilities 
                of the national insurer and adequate to meet its 
                financial needs.
            (2) Approval of certain transactions.--The Commissioner 
        shall, 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.
            (3) Compliance with standards.--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.
    (b) Extraordinary Dividends.--
            (1) In general.--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.
            (2) Conditional dividend or distribution.--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--
                    (A) the Commissioner has approved the payment of 
                the dividend or distribution; or
                    (B) the Commissioner has not disapproved payment 
                within the 30-day period referred to in paragraph (1).

SEC. 1404. RELATIONSHIP TO STATE LAW.

    (a) Permitted Affiliation.--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.
    (b) Reinsurance Pooling Agreements.--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.

SEC. 1405. CONFLICT WITH OTHER FEDERAL LAWS.

    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 Bank Holding Company 
Act of 1956 (12 U.S.C. 1841), and saving and loan holding companies, as 
defined in section 10 of the Homeowners' Loan Act (12 U.S.C. 1467a).

SEC. 1406. NO DELEGATION PERMITTED.

    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.

                         TITLE V--RECEIVERSHIP

SEC. 1501. APPOINTMENT OF OFFICE AS RECEIVER.

    (a) In General.--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.
    (b) Appointment.--In any receivership established under this title, 
the Commissioner shall appoint the Office as receiver.
    (c) Grounds for Appointment.--The grounds for establishing a 
receivership for the purpose of rehabilitating or liquidating a 
national insurer are as follows:
            (1) Insolvency.--The national insurer is insolvent.
            (2) Substantial dissipation.--The national insurer has 
        substantial dissipation of assets or earnings due to--
                    (A) any violation of any provision of Federal or 
                State law; or
                    (B) any hazardous practice.
            (3) Hazardous condition.--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.
            (4) Cease-and-desist orders.--The national insurer has 
        willfully violated a cease-and-desist order that has become 
        final.
            (5) Concealment.--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.
            (6) Inability to meet obligations.--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.
            (7) Violations of law.--The national insurer has willfully 
        and continuously violated any law or regulation, or committed 
        any hazardous practice or condition, that is likely to--
                    (A) cause insolvency or substantial dissipation of 
                assets or earnings; or
                    (B) weaken the condition of the national insurer.
            (8) Consent.--The national insurer, by resolution of its 
        board of directors or its shareholders or members, consents to 
        the appointment.
            (9) Money laundering.--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.
    (d) Directors Not Liable.--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.
    (e) Office Not Subject to Any Other Federal Agency.--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.

SEC. 1502. EFFECT OF RECEIVERSHIP PROCEEDING.

    Any order issued placing a national insurer into a receivership 
under this title for purposes of liquidation shall be deemed to be and 
have the effect of an order of liquidation by a court of competent 
jurisdiction with a finding of insolvency against the insurer for 
purposes of any provision of State law relating to guaranty 
associations.

SEC. 1503. POWERS AND DUTIES.

    (a) In General.--The Office, as receiver, shall have all of the 
powers of the directors, officers, and managers of the national 
insurer, whose authority shall be suspended, except as they are 
redelegated by the receiver.
    (b) Specific Powers.--In addition to those powers otherwise 
provided by this title, the Office, as receiver, shall have the power 
to--
            (1) use, sell, or lease property of the insurer;
            (2) 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;
            (3) collect all debts and monies due and claims belonging 
        to the national insurer, wherever located;
            (4) institute and pursue legal actions and to continue any 
        pending action, in any jurisdiction;
            (5) suspend, limit, or permit insurance policy withdrawals 
        in connection with insurance policies;
            (6) 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;
            (7) enter into contracts necessary to carry out the order 
        of rehabilitation or liquidation;
            (8) 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
            (9) 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.

SEC. 1504. RULEMAKING.

    (a) In General.--The Commissioner shall establish, by regulation, 
standards and procedures for receivership proceedings commenced under 
this title, including provisions regarding automatic stays and other 
stays of proceedings, 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.
    (b) Model.--Except as otherwise provided in this title, the 
regulations issued by the Commissioner under subsection (a) shall be 
substantially similar to the corresponding provisions of the Uniform 
Receivership Law adopted by the Interstate Insurance Receivership 
Compact Commission in September 1998.
    (c) Rules Regarding Coordination With State Guaranty 
Associations.--In order to facilitate insolvency protection of 
consumers pursuant to title VI, the regulations issued by the 
Commissioner under subsection (a) shall contain provisions that are 
substantially similar to sections 8I, 8J, 8K, and 14C of the Life and 
Health Insurance Guaranty Association Model Act, as promulgated by the 
NAIC, and in effect on May 24, 2007, and provisions substantially 
similar to sections 405 and 612 of the Insurer Receivership Model Act, 
promulgated by the NAIC in December 2005.

SEC. 1505. JUDICIAL REVIEW.

    (a) National Insurers.--
            (1) In general.--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.
            (2) Review.--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.
    (b) Claimants.--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.

                    TITLE VI--INSOLVENCY PROTECTION

SEC. 1601. PARTICIPATION IN GUARANTY ASSOCIATIONS.

    (a) Participation in State Guaranty Associations.--
            (1) National insurers.--A national insurer shall become and 
        continue as a member of a qualified association, as provided in 
        section 1602, for each line of insurance covered in each State 
        in which the national insurer is doing business.
            (2) Assessments.--Qualified associations shall be 
        authorized to levy assessments on national insurers. 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 or 
        fund under applicable State law.
    (b) Participation in National Insurance Guaranty Corporation.--A 
national insurer or a State insurer that offers a line of insurance in 
a State that does not have a qualified association for such line of 
insurance shall become and continue to be a member of the Corporation, 
if such line of insurance is the subject of coverage by the 
Corporation.

SEC. 1602. QUALIFIED AND NONQUALIFIED ASSOCIATIONS.

    (a) Qualified Association.--In this title, the term ``qualified 
association'' means a State insurance guaranty association or State 
insurance guaranty fund that--
            (1) admits as members both State and national insurers;
            (2) in the event that a member is placed into receivership, 
        provides benefits or coverage to the policyholders of such 
        member that are not less than the benefits or coverage 
        described in section 1604 (for life and health insurance 
        guaranty associations or funds) or section 1605 (for property 
        and casualty guaranty funds); and
            (3) has a board of directors that is--
                    (A) representative of insurers on a basis that does 
                not unfairly discriminate against national insurers; 
                and
                    (B) fairly representative of insurers of different 
                sizes and lines of insurance written.
    (b) Determination, Election, and Recertification.--
            (1) Determination.--Before the third anniversary of the 
        date of enactment of this Act (referred to in this section as 
        the ``pre-publication period''), the Commissioner shall--
                    (A) review all existing State insurance guaranty 
                associations and State insurance guaranty funds;
                    (B) publish a list of those associations and funds 
                that the Commissioner has determined to be qualified 
                associations in accordance with the requirements of 
                subsection (a); and
                    (C) give the reasons why any State insurance 
                association or State insurance guaranty fund is not 
                determined to be a qualified association, in accordance 
                with the requirements of subsection (a).
            (2) Petition and election.--After the pre-publication 
        period, any association or fund--
                    (A) that is not identified on the list published 
                pursuant to paragraph (1) may petition the Commissioner 
                for a determination that the association or fund is a 
                qualified association, and the Commissioner shall make 
                such a determination if the association or fund 
                establishes to the satisfaction of the Commissioner 
                that the requirements of subsection (a) have been met; 
                and
                    (B) that is named on the list published pursuant to 
                paragraph (1) shall have an additional 1-year period of 
                time following the pre-publication period (referred to 
                in this section as the ``post-publication period'') in 
                which to notify the Commissioner of the decision of the 
                association or fund to be a nonqualified association, 
                as defined in subsection (d).
            (3) Preemption.--Any association or fund that elects to be 
        a nonqualified association shall be subject to Federal 
        preemption according to subsections (e) and (f).
            (4) Reconsideration.--
                    (A) Letter to commissioner.--A State insurance 
                guaranty association or State insurance guaranty fund 
                may seek qualification as a qualified association by 
                letter to the Commissioner, if the Commissioner--
                            (i) determines that a State insurance 
                        guaranty association or State insurance 
                        guaranty fund does not meet the requirements of 
                        subsection (a), after the reasons for such 
                        denial have been addressed; or
                            (ii) revokes the status of a State 
                        insurance guaranty association or State 
                        insurance guaranty fund as a qualified 
                        association pursuant to subsection (c), after 
                        the reasons for such revocation have been 
                        addressed.
                    (B) Other elections.--An association or fund may 
                seek qualification as a qualified association by letter 
                to the Commissioner after it meets the terms of the 
                definition of a qualified association, as set forth in 
                subsection (a), in any case in which a State insurance 
                guaranty association or State insurance guaranty fund--
                            (i) elects to be a nonqualified association 
                        pursuant to paragraph (2)(B); or
                            (ii) refuses to assume responsibilities of 
                        a qualified association pursuant to subsection 
                        (f).
    (c) Revocation.--The Commissioner shall revoke a determination that 
an association or fund is a qualified association, if, at any time, the 
Commissioner determines that the association or fund fails to satisfy 
the terms of the definition of a qualified association, as set forth in 
subsection (a). In such event, the Commissioner shall provide a written 
notice of the revocation to the affected association or fund, and the 
relevant State insurance regulator, and the association or fund or the 
State insurance regulator may seek a review of the revocation under the 
terms of section 1706.
    (d) Nonqualified Association.--For purposes of this title, any 
State insurance guaranty association or State insurance guaranty fund 
that is not a qualified association shall be a ``nonqualified 
association''.
    (e) Preemption.--
            (1) Conservation, rehabilitation, or liquidation.--Except 
        as provided in paragraph (2) and in subsection (f), a 
        nonqualified association may not levy an assessment upon a 
        national insurer or State insurer to pay claims for a member 
        insurer that is subject to an order of conservation, 
        rehabilitation, or liquidation.
            (2) Exception.--In the event that a conservation, 
        rehabilitation, or liquidation of a national insurer or State 
        insurer referred to in paragraph (1) commences at a time when a 
        State insurance guaranty association or State insurance 
        guaranty fund is a qualified association, but such association 
        or fund subsequently becomes a nonqualified association, such 
        association or fund shall be entitled to levy assessments in 
        respect of such pending conservation, rehabilitation, or 
        liquidation on all companies doing business in the State where 
        the association or fund resides as if the association or fund 
        remained a qualified association, unless the Commissioner finds 
        that such association or fund has failed to provide protection 
        to consumers in accordance with State law or is unfairly 
        discriminating in coverage or assessments between national 
        insurers and State insurers (in which case the Commissioner 
        may, by order, transfer all coverage responsibilities and 
        assessment powers of the association or fund to the 
        Corporation).
            (3) Corporation authority.--The Corporation may contract 
        with a nonqualified association described in paragraph (2) for 
        the purpose of assuming the responsibilities of such 
        nonqualified association. The Corporation also may contract 
        with a State insurance guaranty association or State insurance 
        guaranty fund that has been determined to be a qualified 
        association pursuant to subsection (b)(4) for the purpose of 
        permitting such association or fund to assume the 
        responsibilities of the Corporation in a State where the 
        association or fund resides in respect to a conservation, 
        rehabilitation, or liquidation that commenced at a time when 
        such association or fund was a nonqualified association.
    (f) Temporary Period.--
            (1) In general.--Except as provided in paragraph (2), in 
        the event of a conservation, rehabilitation, or liquidation of 
        a State insurer or national insurer during the temporary 
        period, a State insurance guaranty association or State 
        insurance guaranty fund, in addition to its existing powers 
        under State law, may--
                    (A) assess national insurers in an insolvency of a 
                State insurer; and
                    (B) assess State insurers and national insurers in 
                an insolvency of a national insurer.
            (2) Exception.--Assessments may not be made under paragraph 
        (1) if, not later than 6 months after the date of enactment of 
        this Act or on the date of levying any such assessment, 
        whichever occurs first, the State association or fund provides 
        notice to the Commissioner that it does not intend to levy such 
        assessments or provide coverage or benefits to persons holding 
        insurance policies issued by national insurers. If a State 
        association or fund provides such notice and does not withdraw 
        the notice during the temporary period, the Corporation shall 
        provide coverage or benefits in respect to any conservation, 
        rehabilitation, or liquidation that would have otherwise been 
        the responsibility of the State association or fund during the 
        temporary period.
            (3) Definition.--In this subsection, the term ``temporary 
        period'' means the 4-year period beginning on the date of 
        enactment of this Act.

SEC. 1603. ESTABLISHMENT OF THE NATIONAL INSURANCE GUARANTY 
              CORPORATION.

    (a) Establishment of the Corporation.--
            (1) In general.--In the event that the list published under 
        section 1602(b)(1) indicates that in any State, the principal 
        life and health or property and casualty guaranty association 
        or fund (or both) in such State has not been determined to be a 
        qualified association, and if the Commissioner has not granted 
        any petition to reconsider any such determination before the 
        end of the 4-year period beginning on the date of enactment of 
        this Act, the Commissioner shall establish the National 
        Insurance Guaranty Corporation (in this section referred to as 
        the ``Corporation''), in accordance with this section.
            (2) Nonprofit and succession.--The Corporation shall be a 
        nonprofit corporation and shall have succession until dissolved 
        by an Act of Congress.
            (3) Application of district of columbia nonprofit 
        corporation act.--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 
        Columbia Nonprofit Corporation Act (D.C. Code, 29-301.01 et 
        seq., or any successor thereto).
    (b) Membership of the Corporation.--
            (1) In general.--The membership of the Corporation shall 
        consist of member insurers.
            (2) Definition.--In this title, the term ``member 
        insurer''--
                    (A) means any national insurer or a State insurer 
                that operates in a State that does not have a qualified 
                association for the line of insurance offered by such 
                national insurer or State insurer in such State, if 
                such line of insurance is the subject of coverage by 
                the Corporation; and
                    (B) does not include--
                            (i) a hospital or medical service 
                        organization, whether for profit or not-for-
                        profit;
                            (ii) a health maintenance organization;
                            (iii) a fraternal benefit society;
                            (iv) a mandatory or voluntary State pooling 
                        plan;
                            (v) a mutual assessment company or other 
                        person that operates on an assessment basis;
                            (vi) a surplus lines carrier, a risk 
                        retention group, or a State insurer writing 
                        business on a non-admitted or unlicensed basis;
                            (vii) an organization whose lines of 
                        business include only charitable gift 
                        annuities; or
                            (viii) an entity similar to any entity 
                        described in any of clauses (i) through (vii).
    (c) Corporate Governance.--
            (1) Governing body.--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 purposes of the Corporation, as authorized by 
        this Act. The authority of the board of directors shall be 
        specified in the bylaws of the Corporation.
            (2) Election or appointment.--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 end 
        of the 4-year period specified in section 1602(f), then the 
        initial board shall be appointed from among the membership by 
        the Commissioner. Membership on the board of directors shall be 
        fairly representative of members of differing size and lines of 
        business written.
            (3) Initial bylaws and rules.--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 Columbia Nonprofit Corporation Act (D.C. Code, 29-
        301.01 et seq.).
            (4) Amendments to bylaws and rules.--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.
    (d) Relationship of Corporation to the Federal Government.--
            (1) Supervision and oversight.--The Corporation shall be 
        subject to supervision and oversight by the Commissioner.
            (2) Not an agency or instrumentality of the federal 
        government.--The Corporation shall not be an agency or 
        instrumentality of the United States Government.
            (3) Full faith and credit.--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.
            (4) Funds not included in the federal budget.--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.
    (e) Contracting With Person To Administer Benefits.--The 
Corporation may contract, with the approval of the Commissioner, with 
another person to administer the benefits to be provided by the 
Corporation, or otherwise as necessary to fulfill the responsibilities 
of the Corporation under this title.
    (f) Accounts for Administration and Assessments.--For purposes of 
administration and assessments, the Corporation shall establish and 
separately maintain 6 accounts as follows:
            (1) A life insurance account.
            (2) An annuity account.
            (3) A health account.
            (4) A workers' compensation account.
            (5) An automobile insurance account.
            (6) An account for all other lines of property/casualty 
        insurance to which this title applies.

SEC. 1604. BENEFITS FOR POLICYHOLDERS OF NATIONAL LIFE INSURERS.

    (a) In General.--If a national life insurer or State life insurer 
is doing business in a State that does not have a qualified 
association, as defined in section 1602, for the line of insurance 
offered by such national life insurer or State life insurer in such 
State (and if such line of insurance is covered by the Corporation), 
and such national life insurer or State life insurer is placed into 
receivership for purposes of liquidation, the Corporation shall provide 
benefits as specified in subsections (b) and (c).
    (b) Covered Persons.--Benefits shall be made available as follows:
            (1) To persons who, regardless of where the persons reside, 
        are the beneficiaries, assignees, or payees of the persons 
        covered under paragraph (2).
            (2) To persons who are owners of or certificate holders 
        under the insurance policies, and in each case who are 
        residents of the State in which the nonqualified association is 
        located.
            (3) This title shall not provide coverage to a person who 
        is a payee (or beneficiary) of a policy owner, if the payee (or 
        beneficiary) is afforded any coverage by a qualified 
        association.
            (4) This title is intended to provide coverage to persons 
        who are residents of States in which nonqualified associations 
        are located and, in special circumstances, to persons who are 
        not residents of such States. 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 State in which the nonqualified 
        association is located, 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 State, 
        whether as a policy owner, 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 or by 
        the Corporation.
    (c) Insurance Policies Covered and Coverage Limits.--
            (1) Regulation.--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.
            (2) NAIC model.--The regulations described in paragraph (1) 
        shall be substantially similar to the ``Life and Health 
        Insurance Guaranty Association Model Act'' of the NAIC in 
        effect on May 24, 2007, subject to the exclusions and benefits 
        described in paragraphs (3) and (4), respectively.
            (3) Exclusions from coverage.--There shall be excluded from 
        coverage under this title--
                    (A) any portion of a policy or contract not 
                guaranteed by the insurer, or under which the risk is 
                borne by the policy or contract owner;
                    (B) any policy or contract of reinsurance, unless 
                assumption certificates have been issued pursuant to 
                the reinsurance policy or contract;
                    (C) any portion of a policy or contract, to the 
                extent that the rate of interest on which it is based--
                            (i) averaged over the period of 4 years 
                        prior to the date on which the Corporation 
                        becomes obligated with respect to the policy or 
                        contract, exceeds a rate of interest determined 
                        by subtracting 2 percentage points from the 
                        average corporate bond yield, as determined by 
                        the Commissioner, averaged for that same 4-year 
                        period or for such lesser period, if the policy 
                        or contract was issued less than 4 years before 
                        the Corporation became so obligated; and
                            (ii) on and after the date on which the 
                        Corporation becomes obligated with respect to 
                        the policy or contract, exceeds the rate of 
                        interest determined by subtracting 3 percentage 
                        points from the average corporate bond yield, 
                        as most recently available, as determined by 
                        the Commissioner;
                    (D) any portion of a policy or contract issued to a 
                plan or program of an employer, association, or other 
                person to provide life, health, or annuity benefits to 
                its employees, members, or others, to the extent that 
                the plan or program is self-funded or uninsured, 
                including benefits payable by an employer, association, 
                or other person under--
                            (i) a multiple employer welfare 
                        arrangement, as defined in section 514 of the 
                        Employee Retirement Income Security Act of 
                        1974;
                            (ii) a minimum premium group insurance 
                        plan;
                            (iii) a stop-loss group insurance plan; or
                            (iv) an administrative services only 
                        contract;
                    (E) any portion of a policy or contract, to the 
                extent that it provides for--
                            (i) dividends or experience rating credits;
                            (ii) voting rights; or
                            (iii) payment of any fees or allowances to 
                        any person, including the policy or contract 
                        owner, in connection with the service to or 
                        administration of the policy or contract;
                    (F) any portion of a policy or contract, to the 
                extent that the assessments required by section 1608 
                with respect to the policy or contract are preempted by 
                Federal or State law;
                    (G) any obligation that does not arise under the 
                express written terms of the policy or contract issued 
                by the insurer to the contract owner or policy owner, 
                including--
                            (i) claims based on marketing materials;
                            (ii) claims based on side letters, riders, 
                        or other documents that were issued by the 
                        insurer without meeting applicable policy form 
                        filing or approval requirements;
                            (iii) misrepresentations of or regarding 
                        policy benefits;
                            (iv) extra-contractual claims; or
                            (v) a claim for penalties or consequential 
                        or incidental damages;
                    (H) any contractual agreement that establishes the 
                obligations of the member insurer to provide a book 
                value accounting guaranty for defined contribution 
                benefit plan participants by reference to a portfolio 
                of assets that is owned by the benefit plan or its 
                trustee, which in each case is not an affiliate of the 
                member insurer;
                    (I) any unallocated annuity contract; and
                    (J) any funding agreement.
            (4) Coverage benefits.--The benefits provided under this 
        title shall in no event exceed the lesser of--
                    (A) the contractual obligations for which the 
                insurer is liable, or would have been liable if it were 
                not an impaired or insolvent insurer; or
                    (B) with respect to--
                            (i) 1 life, regardless of the number of 
                        insurance policies--
                                    (I) $300,000 in life insurance 
                                death benefits, but not more than 
                                $100,000 in net cash surrender and net 
                                cash withdrawal values for life 
                                insurance;
                                    (II) in health insurance benefits--
                                            (aa) $100,000 for long-term 
                                        care; or
                                            (bb) $300,000 for 
                                        disability insurance; or
                                    (III) $100,000 in the present value 
                                of annuity benefits, including net cash 
                                surrender and net cash withdrawal 
                                values; and
                            (ii) each payee of a structured settlement 
                        annuity (or beneficiary or beneficiaries of the 
                        payee if deceased), $100,000 in present value 
                        annuity benefits, in the aggregate, including 
                        net cash surrender and net cash withdrawal 
                        values, if any, except that, in no event shall 
                        benefits exceed--
                                    (I) an aggregate of $300,000 in 
                                benefits with respect to any 1 life 
                                under clause (i) and this clause; or
                                    (II) with respect to 1 policy owner 
                                of multiple nongroup insurance policies 
                                of life insurance, or 1 policy owner of 
                                1 or more group insurance policies of 
                                life insurance insuring the lives of 
                                multiple insureds, where the policy 
                                owner (or any benefit plan, trust, or 
                                other entity sponsored or controlled by 
                                the policy owner) is also the 
                                beneficiary, whether the policy owner 
                                is an individual, firm, corporation, or 
                                other person, and whether the 
                                individuals insured are officers, 
                                managers, employees, or other 
                                individuals, more than $5,000,000 in 
                                benefits, regardless of the number of 
                                such policies held by the policy owner.
            (5) Rule of construction.--The limitations set forth in 
        this subsection are limitations on benefits under this title 
        before taking into account either the subrogation and 
        assignment rights or the extent to which those benefits could 
        be provided out of the assets of the impaired or insolvent 
        insurer attributable to covered policies.
            (6) Use of assets.--The obligations for benefits under this 
        title may be met by the use of assets attributable to covered 
        policies or reimbursed to the Corporation pursuant to the 
        subrogation and assignment rights in section 1607.
    (d) Other Exclusions.--The Corporation shall not be required to 
guarantee, assume, reinsure, or perform or cause to be guaranteed, 
assumed, reinsured, or performed, the contractual obligations of the 
insolvent or impaired insurer under a covered policy that do not 
materially affect the economic values or economic benefits of the 
covered policy.

SEC. 1605. CLAIMS COVERED FOR POLICYHOLDERS OF NATIONAL PROPERTY/
              CASUALTY INSURERS.

    (a) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Association.--The term ``Association'' means any 
        property/casualty insurance guaranty association created under 
        the laws of the relevant State, no matter how denominated, 
        which performs the role of an association or fund paying 
        certain property/casualty claims made under policies of an 
        insolvent insurer to or on behalf of policyholders residing in 
        the State.
            (2) Claimant.--The term ``claimant'' means any insured 
        making a first party claim or any person instituting a 
        liability claim, except that no person who is an affiliate of 
        the insolvent insurer may be a claimant.
            (3) Covered claim.--The term ``covered claim''--
                    (A) means an unpaid claim, including one for 
                unearned premiums, submitted by a claimant, which 
                arises out of and is within the coverage and is subject 
                to the applicable limits of an insurance policy to 
                which this title applies issued by a member insurer, 
                if--
                            (i) such member insurer becomes an 
                        insolvent insurer after the effective date of 
                        this title; and
                            (ii) either--
                                    (I) the claimant or insured is a 
                                resident of a State that does not have 
                                a qualified association covering the 
                                type of risk insured at the time of the 
                                insured event (for which purpose, in 
                                the case of an entity other than an 
                                individual, the residence of a 
                                claimant, insured, or policyholder is 
                                the State in which its principal place 
                                of business is located at the time of 
                                the insured event); or
                                    (II) the claim is a first party 
                                claim for damage to property with a 
                                permanent location in the State; and
                    (B) does not include--
                            (i) any amount awarded as punitive or 
                        exemplary damages;
                            (ii) any amount sought as a return of 
                        premium under any retrospective rating plan;
                            (iii) any amount due any reinsurer, 
                        insurer, insurance pool, underwriting 
                        association, health maintenance organization, 
                        hospital plan corporation, professional health 
                        service corporation, or self-insurer as 
                        subrogation recoveries, reinsurance recoveries, 
                        contribution, indemnification, or otherwise, 
                        and no such claim for any amount due any 
                        reinsurer, insurer, insurance pool, 
                        underwriting association, health maintenance 
                        organization, hospital plan corporation, or 
                        self-insurer may be asserted against a person 
                        insured under a policy issued by an insolvent 
                        insurer, other than to the extent that such 
                        claim exceeds the obligation limitations of the 
                        Corporation set forth in this Act;
                            (iv) any first party claim by an insured 
                        whose net worth exceeds $25,000,000 on December 
                        31 of the year prior to the year in which the 
                        member insurer becomes an insolvent insurer 
                        (for which purpose, the net worth of the 
                        insured on that date shall be deemed to include 
                        the aggregate net worth of the insured and all 
                        of its affiliates and subsidiaries, as 
                        calculated on a consolidated basis); or
                            (v) any first party claim by an insured 
                        which is an affiliate of the insolvent insurer.
            (4) Insolvent insurer.--The term ``insolvent insurer'' 
        means an insurer with a line of business covered by the 
        Corporation and doing business in a State without a qualified 
        association, covering the type of risk insured, and against 
        whom a final order of liquidation with a finding of insolvency 
        has been issued pursuant to title V and the regulations 
        promulgated thereunder.
    (b) In General.--If a national property and casualty insurer or a 
State property and casualty insurer is doing business in a State that 
does not have a qualified association for the line of insurance offered 
by such insurer in such State (and if such line of insurance is covered 
by the Corporation), and such insurer is placed into receivership for 
purposes of liquidation, the Corporation shall provide benefits as 
specified in this section.
    (c) Insurance Lines Included.--This title shall provide coverage 
for covered claims on all lines of direct insurance (other than those 
specified in subsection (d))--
            (1) existing prior to the order of liquidation;
            (2) arising not later than 30 days after the order of 
        liquidation;
            (3) arising before the insurance policy expiration date, if 
        earlier than 30 days after the order or liquidation; or
            (4) arising before the insured replaces the insurance 
        policy or causes its cancellation, if the insured does so not 
        later than 30 days after the order of liquidation.
    (d) Insurance Lines Excluded.--This title shall not provide 
coverage on claims for--
            (1) life, annuity, health, or disability insurance (except 
        as provided in section 1604);
            (2) mortgage guaranty, financial guaranty, or other forms 
        of insurance offering protection against investment risks;
            (3) fidelity or surety bonds, or any other bonding 
        obligations;
            (4) credit insurance, vendors single interest insurance, or 
        collateral protection insurance or any similar insurance 
        protecting the interests of the creditor arising out of a 
        creditor-debtor transaction;
            (5) insurance of warranties or service contracts including 
        insurance that provides for the repair, replacement, or service 
        of goods or property, indemnification for repair, replacement, 
        or service for the operational or structural failure of the 
        goods or property due to a defect in materials, workmanship, or 
        normal wear and tear, or provides reimbursement for the 
        liability incurred by the issuer of agreements or service 
        contracts that provide such benefits;
            (6) title insurance;
            (7) ocean marine insurance;
            (8) any transaction or combination of transactions between 
        a person (including affiliates of such person) and an insurer 
        (including affiliates of such insurer) which involves the 
        transfer of investment or credit risk unaccompanied by transfer 
        of insurance risk; or
            (9) any insurance provided by or guaranteed by any State or 
        the Federal Government.
    (e) Coverage Limitations.--
            (1) In general.--The obligation to a claimant under this 
        section shall be satisfied by paying to the claimant--
                    (A) the full amount of a covered claim for the 
                benefits under a workers' compensation insurance 
                coverage;
                    (B) an amount not exceeding $10,000 per policy for 
                a covered claim for return of unearned premiums, less a 
                deductible of $100; and
                    (C) an amount not exceeding $300,000 per claim for 
                all other covered claims, except that for purposes of 
                such limitation, all claims of any kind whatsoever 
                arising out of, or related to, bodily injury or death 
                to any 1 person shall constitute a single claim, 
                regardless of the number of insurance policies issued 
                by the insolvent insurer, the number of claims made, or 
                the number of claimants.
            (2) Limitation.--In no event shall a claimant be entitled 
        to an amount in excess of the obligation of the insolvent 
        insurer under the policy or coverage from which the claim 
        arises.
            (3) Exclusions.--Notwithstanding any other provisions of 
        this title, for purposes of this subsection, a covered claim 
        shall not include--
                    (A) a claim filed more than 18 months after the 
                entry of the order of liquidation or the final date set 
                for the filing of claims against the liquidator or 
                receiver of the insolvent insurer pursuant to title V 
                and the regulations promulgated thereunder, whichever 
                date occurs first; or
                    (B) any claim filed with the Corporation or the 
                receiver for losses incurred but not reported under the 
                policy of the insured.
    (f) Exhaustion of Other Coverage.--
            (1) In general.--Any person having a claim under an 
        insurance policy, whether or not it is a policy issued by a 
        member insurer, and the claim under such other policy arises 
        from the same facts, injury, or loss that gave rise to a 
        covered claim against the Corporation, shall be required first 
        to exhaust all coverage provided by any such policy.
            (2) Reductions.--Any amount payable on a covered claim 
        under this title shall be reduced by the full applicable limits 
        stated in such other insurance policy, and the Corporation 
        shall receive a full credit for such stated limits, or, where 
        there are no applicable stated limits, the claim shall be 
        reduced by the total recovery.
            (3) Limitation.--Notwithstanding paragraphs (1) and (2)--
                    (A) no person shall be required to exhaust any 
                right under the policy of an insolvent insurer;
                    (B) a claim under a policy providing liability 
                coverage to a person who may be jointly and severally 
                liable with or a joint tortfeasor with the person 
                covered under the policy of the insolvent insurer that 
                gives rise to the covered claim shall be considered to 
                be a claim arising from the same facts, injury, or loss 
                that gave rise to the covered claim against the 
                Corporation;
                    (C) a claim under an insurance policy shall also 
                include, for purposes of this section--
                            (i) a claim against a health maintenance 
                        organization, a hospital plan corporation, or a 
                        professional health service corporation; and
                            (ii) any amount payable by or on behalf of 
                        a self-insurer; and
                    (D) to the extent that the obligation of the 
                Corporation is reduced by the application of this 
                section, the liability of the person insured by the 
                policy of the insolvent insurer for the claim shall be 
                reduced in the same amount.
            (4) Order of recovery.--Any person having a claim which may 
        be recovered under more than 1 qualified association shall seek 
        recovery first, from the qualified association of the place of 
        residence of the insured (or the Corporation, if the place of 
        residence is a State that does not have a qualified 
        association), except that if it is a first party claim for 
        damage to property with a permanent location, the person shall 
        seek recovery first from the qualified association (or the 
        Corporation, if applicable) of the location of the property, 
        and if it is a workers' compensation claim, the person shall 
        seek recovery first from the qualified association (or the 
        Corporation, if applicable) of the residence of the claimant. 
        Any recovery under this Act shall be reduced by the amount of 
        recovery from any other insurance guaranty association or its 
        equivalent.
    (g) Right to Recover.--The Corporation shall have the right to 
recover all amounts paid the Corporation on behalf of a person, whether 
for indemnity, defense, or otherwise, in the case of--
            (1) any insured whose net worth on December 31 of the year 
        immediately preceding the date on which the insurer becomes an 
        insolvent insurer exceeds $25,000,000 (and for such purpose, 
        the net worth of an insured on such date shall be deemed to 
        include the aggregate net worth of the insured and all of its 
        subsidiaries and affiliates, as calculated on a consolidated 
        basis); and
            (2) any person who is an affiliate of the insolvent 
        insurer.
    (h) Payment of Claims.--Payment of claims under this title by the 
Corporation shall be made from the appropriate property and casualty 
account established pursuant to section 1603.

SEC. 1606. POWERS AND DUTIES OF THE CORPORATION.

    (a) Powers and Duties Related to Certain National Life Insurers and 
State Life Insurers.--
            (1) National life insurers and state life insurers who are 
        member insurers subject to rehabilitation.--Subject to the 
        provisions of this title, if a national life insurer or a State 
        life insurer is a member insurer 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 or State life insurer, and that are 
        approved by the Commissioner--
                    (A) guarantee, assume, or reinsure, or cause to be 
                guaranteed, assumed, or reinsured, any or all of the 
                insurance policies of the national life insurer or 
                State life insurer; or
                    (B) 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 or State life 
                insurer, pending action under subparagraph (A).
            (2) National life insurers and state life insurers who are 
        member insurers subject to liquidation.--
                    (A) In general.--Subject to the provisions of this 
                title, if a national life insurer or a State life 
                insurer is a member insurer placed into receivership 
                for purposes of liquidation, the Corporation shall, in 
                its discretion, take either the actions specified in 
                subparagraph (B) or the actions specified in 
                subparagraph (C).
                    (B) Assumption of obligations of national life 
                insurer or state life insurer who is a member 
                insurer.--The Corporation--
                            (i) shall--
                                    (I) guarantee, assume, or reinsure, 
                                or cause to be guaranteed, assumed, or 
                                reinsured, the insurance policies of 
                                the national life insurer or State life 
                                insurer; or
                                    (II) assure payment of the 
                                contractual obligations of the national 
                                life insurer or State life insurer; and
                            (ii) shall provide monies, pledges, loans, 
                        notes, guarantees, or other means reasonably 
                        necessary to discharge the duties imposed by 
                        this section.
                    (C) Provision of benefits to policyholders.--The 
                Corporation--
                            (i) with respect to life insurance policies 
                        and annuities, 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 or State life insurer who is a 
                        member insurer, for claims incurred--
                                    (I) with respect to group insurance 
                                policies, not later than the earlier of 
                                the next renewal date under those 
                                insurance policies or 45 days, but not 
                                less than 30 days, after the date on 
                                which the Corporation becomes obligated 
                                under this section with respect to such 
                                policies; and
                                    (II) 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 not less than 30 days, from 
                                the date on which the Corporation 
                                becomes obligated under this section 
                                with respect to such policies;
                            (ii) shall make diligent efforts to provide 
                        all known insureds or annuitants (for nongroup 
                        insurance policies), or group policyholders 
                        with respect to group insurance policies, 30 
                        days advance notice of the termination 
                        (pursuant to clause (i)) of the benefits 
                        provided;
                            (iii) with respect to nongroup insurance 
                        policies covered by this title, 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 or 
                        State 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;
                            (iv) in providing the substitute coverage 
                        required under clause (iii), may offer either 
                        to reissue the terminated coverage or to issue 
                        an alternative policy, which alternative or 
                        reissued insurance policies--
                                    (I) shall be offered without 
                                requiring evidence of insurability;
                                    (II) may not provide for any 
                                waiting period or exclusion that would 
                                not have applied under the terminated 
                                policy; and
                                    (III) may be reinsured by the 
                                Corporation; and
                            (v) shall obtain the approval of the 
                        Commissioner of all alternative policies 
                        adopted or issued by the Corporation under this 
                        paragraph.
                    (D) Termination of benefits.--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 on which 
                the coverage or policy is replaced by another similar 
                policy by the policyholder, the insured, or the 
                Corporation.
            (3) Treatment of premiums.--
                    (A) Nonpayment of premiums.--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.
                    (B) Premiums due after liquidation initiated.--
                Premiums due for coverage under covered policies after 
                the Commissioner has initiated the liquidation of a 
                national life insurer or a State life insurer who is a 
                member 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.
            (4) Permanent and temporary liens.--In carrying out the 
        duties under paragraph (2), the Corporation may, subject to the 
        approval of the Commissioner--
                    (A) 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
                    (B) 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.
            (5) Indexed insurance policies.--
                    (A) In general.--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 
                subparagraph (B).
                    (B) Applicability.--Subparagraph (A) shall apply in 
                any case in which--
                            (i) in lieu of the index or other external 
                        reference provided for in the original 
                        insurance policy, the alternative insurance 
                        policy provides for--
                                    (I) a fixed interest rate;
                                    (II) payment of dividends with 
                                minimum guarantees; or
                                    (III) a different method for 
                                calculating interest or changes in 
                                value;
                            (ii) there is no requirement for evidence 
                        of insurability, waiting period, or other 
                        exclusion that would not have applied under the 
                        replaced insurance policy; and
                            (iii) the alternative insurance policy is 
                        substantially similar to the replaced insurance 
                        policy in all other material terms.
    (b) Powers and Duties Related to National Property/casualty 
Insurers and State Property/casualty Insurers Who Are Member Insurers 
With Respect to Covered Claims.--
            (1) In general.--Subject to the terms of this title, when a 
        national property/casualty insurer or a State property/casualty 
        insurer is a member insurer placed into receivership for 
        purposes of liquidation, the Corporation shall exercise the 
        powers and duties specified in this subsection.
            (2) Assumption of obligations.--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 
        or State property/casualty insurer, as if such insurer had not 
        become insolvent, including the right to pursue and retain 
        salvage and subrogation recoverable on covered claims 
        obligations to the extent paid by the Corporation.
            (3) Investigation and payment of claims.--The Corporation 
        shall investigate claims brought against the Corporation and 
        adjust, compromise, settle, and pay covered claims, to the 
        extent of the obligations of the Corporation. 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 State 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.
    (c) Other Corporation Powers.--In addition to the rights and powers 
provided elsewhere in this title, the Corporation may--
            (1) enter into such contracts as are necessary or proper to 
        carry out the provisions and purposes of this title;
            (2) sue or be sued, including taking any legal actions 
        necessary or proper to recover any unpaid assessments under 
        section 1608 and to settle claims or potential claims against 
        the Corporation;
            (3) 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);
            (4) 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;
            (5) take such legal action as may be necessary or 
        appropriate to avoid or recover payment of improper claims;
            (6) 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;
            (7) 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, 
        which person shall promptly comply with the request; and
            (8) take other necessary or appropriate action to discharge 
        the duties and obligations of the Corporation under this title 
        or to exercise the powers of the Corporation under this title.

SEC. 1607. SUBROGATION.

    (a) In General.--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 
insolvent 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.
    (b) Common Law Rights.--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.
    (c) Priority.--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.
    (d) Result if Found Invalid or Ineffective.--If any other provision 
of this section is held to be 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.
    (e) Payment of Portion.--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 this section, 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.

SEC. 1608. ASSESSMENTS.

    (a) Assessments by Corporation Authorized.--For the purpose of 
providing the funds necessary to provide the benefits or payments under 
this title, the Corporation shall be authorized to assess member 
insurers separately for each account, at such time and for such amounts 
as the board of directors of the Corporation finds necessary, in 
accordance with this section.
    (b) Classes of Assessments.--
            (1) In general.--The Corporation shall impose 3 classes of 
        assessments in accordance with paragraphs (2) through (4).
            (2) General administrative assessments.--
                    (A) In general.--Each member insurer shall be 
                assessed an amount necessary to cover the general 
                administrative and legal costs of the Corporation, 
                other than the costs specified in paragraphs (3) and 
                (4).
                    (B) Amount.--In setting the amount of the 
                assessment under subparagraph (A), the Corporation 
                shall divide such administrative and legal expenses 
                equally among all member insurers.
                    (C) Deposit.--The amount collected pursuant to this 
                paragraph shall be deposited, in equal amounts, in the 
                accounts established pursuant to section 1603(f).
            (3) Property/casualty assessments.--
                    (A) In general.--The Corporation shall--
                            (i) allocate claims paid and expenses 
                        incurred among the workers' compensation 
                        account, the automobile insurance account, or 
                        the other property/casualty account; and
                            (ii) assess member insurers doing business 
                        in States without qualified associations 
                        covering the types of risks insured that are 
                        licensed to sell property/casualty insurance 
                        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.
                    (B) Amount.--The assessment established under 
                subparagraph (A)(ii) 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 
                member insurer in States without qualified associations 
                on the kind of insurance in the account during the 
                calendar year preceding the assessment bears to the 
                premiums received by all assessed member insurers in 
                States without qualified associations on the kind of 
                insurance in the account during the year preceding the 
                assessment.
                    (C) Deposit.--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.
            (4) Life and annuity assessments.--
                    (A) In general.--The Corporation shall--
                            (i) allocate benefits paid and expenses 
                        incurred among the life insurance account, the 
                        annuity account, and the health account; and
                            (ii) assess member insurers doing business 
                        in States without qualified associations that 
                        are licensed to sell life insurance 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 providing such benefits.
                    (B) Amount.--The assessment established under 
                subparagraph (A)(ii) 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 member insurer in 
                States without qualified associations on the kind of 
                insurance in the account during the calendar year 
                preceding the assessment bears to the premiums received 
                by all assessed member insurers in States without 
                qualified associations on the kind of insurance in the 
                account during the year preceding the assessment.
                    (C) Deposit.--The assessments received pursuant to 
                this paragraph shall be deposited in the life insurance 
                account, the annuity account, or the health account, as 
                appropriate.
    (c) Notice and Imposition of Assessments.--
            (1) Written notice required.--The Corporation shall provide 
        each member insurer a written notice of an assessment, and 
        assessments shall be payable not earlier than 30 days after the 
        date of receipt of such notice.
            (2) Late payment.--Member insurers that fail to pay an 
        assessment when due shall be subject to an interest charge on 
        the assessment, as set by the Corporation.
            (3) Assessments not imposed until needed.--The Corporation 
        shall not impose an assessment described in paragraph (3) or 
        (4) of subsection (b) until such funds are needed.
            (4) Maximum assessment.--
                    (A) In general.--The Corporation may not assess a 
                member insurer doing business in States without 
                qualified associations in any year on any account in an 
                amount greater than 2 percent of the net direct written 
                premiums of the insurer for the calendar year preceding 
                the assessment on the kind of insurance in the account.
                    (B) Insufficient amount in life insurance account, 
                annuity account, or health account.--
                            (i) Insufficient amount in life insurance 
                        account.--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, the health account, or both, for the 
                        necessary additional amount, except that in 
                        each subsequent year, for so long as necessary, 
                        the Corporation shall assess up to the maximum 
                        on the life insurance account, in order to--
                                    (I) make all necessary payments 
                                from the life insurance account; and
                                    (II) reimburse the annuity account 
                                or the health account, or both, for the 
                                amounts assessed on behalf of the life 
                                insurance account.
                            (ii) Insufficient amount in annuity 
                        account.--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, the health account, or both, 
                        for the necessary additional amount, except 
                        that, in each subsequent year, for so long as 
                        necessary, the Corporation shall assess up to 
                        the maximum on the annuity account, in order 
                        to--
                                    (I) make all necessary payments 
                                from the annuity account; and
                                    (II) reimburse the life insurance 
                                account, the health account, or both, 
                                for the amounts assessed on behalf of 
                                the annuity account.
                            (iii) Insufficient amount in health 
                        account.--If the maximum assessment in any year 
                        does not provide an amount sufficient to make 
                        all necessary payments from the health account, 
                        the Corporation may assess the life insurance 
                        account, the annuity account, or both, for the 
                        necessary additional amount, except that, in 
                        each subsequent year, for so long as necessary, 
                        the Corporation shall assess up to the maximum 
                        on the health account, in order to--
                                    (I) make all necessary payments 
                                from the health account; and
                                    (II) reimburse the life insurance 
                                account, the annuity account, or both, 
                                for the amounts assessed on behalf of 
                                the health account.
                    (C) Insufficient amount in workers' compensation 
                account, automobile insurance account, or other 
                property/casualty insurance account.--
                            (i) Insufficient amount in workers' 
                        compensation account.--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, other property/
                        casualty insurance account, or both, for the 
                        necessary additional amount, except that, in 
                        each subsequent year, for as long as necessary, 
                        the Corporation shall assess up to the maximum 
                        on the workers compensation account, in order 
                        to--
                                    (I) make all necessary payments 
                                from the workers' compensation account; 
                                and
                                    (II) reimburse the automobile 
                                insurance account, the other property/
                                casualty insurance account, or both, 
                                for the amounts assessed on behalf of 
                                the workers' compensation account.
                            (ii) Insufficient amount in automobile 
                        insurance account.--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, the other property/
                        casualty insurance account, or both, for the 
                        necessary additional amount, except that, in 
                        each subsequent year, for so long as necessary, 
                        the Corporation shall assess up to the maximum 
                        on the automobile insurance account, in order 
                        to--
                                    (I) make all necessary payments 
                                from the automobile insurance account; 
                                and
                                    (II) reimburse the workers' 
                                compensation account, the other 
                                property/casualty insurance account, or 
                                both, for the amounts assessed on 
                                behalf of the automobile insurance 
                                account.
                            (iii) Insufficient amount in other 
                        property/casualty insurance account.--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, the 
                        automobile insurance account, or both, for the 
                        necessary additional amount, except that, in 
                        each subsequent year for so long as necessary, 
                        the Corporation shall assess up to the maximum 
                        on the other property/casualty insurance 
                        account, in order to--
                                    (I) make all necessary payments 
                                from the other property/casualty 
                                insurance account; and
                                    (II) reimburse the automobile 
                                insurance account, the workers' 
                                compensation account, or both, for the 
                                amounts assessed on behalf of the other 
                                property casualty insurance account.
    (d) Abated or Deferred Assessments.--
            (1) Authority of corporation.--The board of directors of 
        the Corporation may abate or defer, in whole or in part, an 
        assessment imposed on a member insurer under this title if, in 
        the opinion of the board, payment of the assessment would 
        endanger the ability of the member insurer to fulfill its 
        contractual obligations.
            (2) Shared burden.--In the event an assessment against a 
        member 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 member insurers doing business in 
        States without qualified associations, in a manner consistent 
        with the basis for assessments set forth in this section. Once 
        the conditions that caused action under this subsection have 
        been removed or rectified, the member insurer shall pay all 
        assessments that were deferred pursuant to a repayment plan 
        approved by the board of directors of the Corporation.
    (e) Refunds.--The board of directors of the Corporation may, by an 
equitable method, as established by its operating rules, refund to 
member insurers, in proportion to the contribution of each insurer to 
that account, the amount by which the assets of the account exceed the 
amount that 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.
    (f) Assessment Protests.--
            (1) In general.--A member insurer that wishes to protest 
        all or part of an assessment under this title 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.
            (2) Notification of determination.--Not later than 60 days 
        after the date of payment of an assessment under protest by a 
        member insurer, the Corporation shall notify the member insurer 
        in writing of the determination of the Corporation with respect 
        to the protest, unless the Corporation notifies the insurer 
        that additional time is required to resolve the issues raised 
        by the protest.
            (3) Final decision.--Not later than 30 days after a final 
        decision has been made, the Corporation shall notify the 
        protesting member insurer in writing of the final decision. Not 
        later than 60 days after the date of receipt of notice of the 
        final decision, the protesting member insurer may appeal that 
        final action to the Commissioner.
            (4) Referral.--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.
            (5) Protest or appeal upheld.--If the protest or appeal on 
        the assessment is upheld, the amount paid in error or excess 
        shall be returned to the member insurer. Interest on a refund 
        due a protesting member insurer shall be paid at the rate 
        actually earned by the Corporation.
    (g) Transitional Responsibilities.--In the event that the 
conservation, rehabilitation, or liquidation of a national insurer or 
State insurer commences at a time when a State insurance guaranty 
association or State insurance guaranty fund is a nonqualified 
association, but such association or fund subsequently becomes a 
qualified association, the Corporation shall continue to be responsible 
for such conservation, rehabilitation, or liquidation, unless and until 
the Corporation shall contract with such association or fund pursuant 
to section 1602(e)(3). The Corporation shall continue to be entitled to 
levy assessments in respect of such pending conservation, 
rehabilitation, or liquidation on all companies doing business in the 
State where the association or fund resides, as if the association or 
fund remained a nonqualified association.
    (h) Information Requests.--The Corporation may request information 
of member insurers doing business in States without qualified 
associations in order to aid in carrying out its duties under this 
section, and such member insurers shall promptly comply with such a 
request.

SEC. 1609. REGULATIONS.

    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.

SEC. 1610. STATE TAXATION.

    No State shall have the power to impose its premium tax, franchise 
tax, income tax, retaliatory tax, or other primary tax applicable to 
insurance companies, on any national insurer, unless such State allows 
the national insurer to recoup Corporation assessments allocable to 
such State--
            (1) in the same manner and to the same extent that a State 
        insurer is allowed to recoup State insurance guaranty 
        association or State insurance guaranty fund assessments in 
        such State; or
            (2) through the rates or a policyholder surcharge, at the 
        election of the national insurer, in any State that allows 
        State insurers to recoup State insurance guaranty association 
        or State insurance guaranty fund assessments only through the 
        rates.

SEC. 1611. EXAMINATION OF THE CORPORATION; ANNUAL REPORT.

    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 any State without a qualified 
association, a financial report in a form approved by the Commissioner 
and a report of the activities of the Corporation during the preceding 
fiscal year, as the activities relate to its duties and functions 
carried out under this title.

SEC. 1612. IMMUNITY.

    There shall be no liability on the part of, and no cause of action 
of any nature shall arise against, any of the following persons for any 
action or omission by them in the performance of their powers and 
duties under the State insurance guaranty association or fund or 
provisions of State insurance guaranty association or fund law or under 
this title:
            (1) A member insurer and its directors, officers, 
        employees, and agents.
            (2) Any State insurance guaranty association or State 
        insurance guaranty fund and its respective directors, officers, 
        employees, or agents.
            (3) The Corporation and its directors, officers, employees, 
        and agents.
            (4) The Commissioner and the representatives thereof.
            (5) Any State insurance commissioner and representatives 
        thereof.

     TITLE VII--CONFORMING AMENDMENTS AND MISCELLANEOUS PROVISIONS

SEC. 1701. NONDISCRIMINATION.

    No State may, by statute, regulation, order, interpretation, or 
otherwise, discriminate, in any manner, against--
            (1) 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;
            (2) 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;
            (3) any affiliate of a national insurer, national agency, 
        or a federally licensed insurance producer because the 
        affiliate is so affiliated;
            (4) any policyholder, insured, claimant, State-licensed 
        insurance producer, or any person engaged in the acts described 
        in section 1304(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
            (5) 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.

SEC. 1702. APPLICATION OF THE FEDERAL ANTITRUST LAWS TO NATIONAL 
              INSURERS, NATIONAL AGENCIES, AND FEDERALLY LICENSED 
              INSURANCE PRODUCERS.

    (a) Application.--Except as provided in subsection (b), the Sherman 
Act (15 U.S.C. 1 et seq.), the Clayton Act (15 U.S.C. 12 et seq.), the 
Federal Trade Commission Act (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:
            (1) 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.
            (2) 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.
    (b) Exception.--Section 5 of the Federal Trade Commission Act (15 
U.S.C. 45) shall not apply 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.

    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.

SEC. 1704. FEDERAL COURT JURISDICTION.

    Chapter 85 of part IV of title 28, United States Code, is amended 
by adding at the end the following:
``Sec. 1370. National insurer as party
    ``The district courts shall have original jurisdiction of any civil 
action--
            ``(1) commenced by the United States, or by direction of 
        any officers thereof, against any national insurer, national 
        agency, or any federally licensed insurance producer;
            ``(2) 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.''.

SEC. 1705. FEDERAL COURT VENUE.

    Chapter 87 of part IV of title 28, United States Code, is amended 
by adding at the end the following:

``SEC. 1414. NATIONAL INSURER OR NATIONAL AGENCY ACTION AGAINST 
              COMMISSIONER OF NATIONAL INSURANCE.

    ``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.''.

SEC. 1706. JUDICIAL REVIEW.

    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.

SEC. 1707. AMENDMENT TO THE FREEDOM OF INFORMATION ACT.

    Section 552(b)(8) of title 5, United States Code, is amended by 
inserting ``(including national insurers, national agencies, and 
federally licensed insurance producers)'' after ``financial 
institutions''.

SEC. 1708. AMENDMENTS TO THE FEDERAL SECURITIES LAWS.

    (a) Securities Act of 1933.--The Securities Act of 1933 (15 U.S.C. 
77a et seq.) is amended--
            (1) in section 2(a)(13), by inserting ``the Commissioner of 
        National Insurance or'' after ``subject to supervision by'';
            (2) in section 2(a)(14), by inserting ``the United States 
        or'' after ``the laws of'';
            (3) in section 3(a)(8), by inserting ``the Commissioner of 
        National Insurance or'' after ``subject to the supervision 
        of''; and
            (4) in section 4(5)(A)(ii), by inserting ``the Commissioner 
        of National Insurance or'' after ``subject to the supervision 
        of''.
    (b) Securities Exchange Act of 1934.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.) is amended--
            (1) in section 10A(i)(1)(A) (15 U.S.C. 78j-l(i)(1)(A)), by 
        inserting ``or Federal'' after ``purposes of State'';
            (2) in section 15(b)(4)(H) (15 U.S.C. 78o(b)(4)(H))--
                    (A) by striking ``or the National'' and inserting 
                ``the National''; and
                    (B) by inserting, ``or the Commissioner of National 
                Insurance'' after ``Union Administration''.
            (3) in section 17(i)(3)(C)(iii), by inserting ``or by the 
        Commissioner of National Insurance'' after ``appropriate State 
        insurance regulator''; and
            (4) in section 17(i)(4)--
                    (A) in subparagraph (A), by striking ``and'' after 
                the semicolon;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(D) the Commissioner of National Insurance with 
                regard to all interpretations of, and the enforcement 
                of, the National Insurance Act of 2007 relating to the 
                activities, conduct, and operations of national 
                insurers, national agencies, and federally licensed 
                insurance producers.''.
    (c) Amendments to Investment Company Act of 1940.--The Investment 
Company Act of 1940 (15 U.S.C. 80a-1 et seq.) is amended--
            (1) in section 2(a)(17), by inserting ``the Commissioner of 
        National Insurance or'' after ``subject to supervision by'';
            (2) in section 2(a)(37), by inserting ``the United States 
        or'' after ``the laws of'';
            (3) in section 12(g)--
                    (A) by inserting ``the Commissioner of National 
                Insurance or'' after ``affect or derogate from the 
                powers of''; and
                    (B) by inserting ``Federal or'' after ``affect the 
                right under'';
            (4) in section 26(f)(2)(B)(ii), by inserting ``or, in the 
        case of a national insurer chartered under the National 
        Insurance Act of 2007, files with the Commissioner of National 
        Insurance,'' after ``files with the insurance regulatory 
        authority of the State which is the domiciliary State of the 
        insurance company,''; and
            (5) in section 26(f)(2)(B)(iii), by inserting ``or, in the 
        case of a national insurer chartered under the National 
        Insurance Act of 2007, the Commissioner of National Insurance'' 
        after ``insurance authority of such State''.
    (d) Investment Advisers Act of 1940.--Section 203(e)(9) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-3(e)(9)) is amended--
            (1) by striking ``or the National'' and inserting ``the 
        National''; and
            (2) by inserting ``, or the Commissioner of National 
        Insurance'' after ``Union Administration''.

SEC. 1709. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974.

    The Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 
et seq.) is amended--
            (1) in section 401(b)(2)(A), by inserting ``or licensed as 
        a national insurer'' after ``qualified to do business in a 
        State''; and
            (2) in section 733(b)(2), by inserting ``or which is 
        licensed as a national insurer and which is subject to the 
        authority of the Commissioner of National Insurance'' after 
        ``(within the meaning of section 514(b)(2))''.

SEC. 1710. AMENDMENTS TO THE GRAMM-LEACH-BLILEY ACT.

    (a) Interagency Consultation.--
            (1) Amendments.--Section 307 of the Gramm-Leach-Bliley Act 
        (15 U.S.C. 6716) is amended by adding at the end the following:
    ``(g) Office of National Insurance.--In this section, the terms 
`State insurance regulator', `State insurance regulators', and 
`insurance regulator of any State' shall include the Office of National 
Insurance.''.
            (2) No waiver.--The provision of information or material by 
        the Office of National Insurance to a Federal banking agency 
        (as defined in section 3 of the Federal Deposit Insurance Act 
        (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.
    (b) Privacy.--The Gramm-Leach-Bliley Act (Public Law 106-102; 113 
Stat. 1338) is amended--
            (1) in section 504(a)(1), by inserting ``the Commissioner 
        of National Insurance,'' after ``Federal banking agencies,'';
            (2) in section 504(a)(3), by inserting ``, 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 2007'' after ``enactment of this Act'';
            (3) in section 505(a)(6), by inserting ``(other than a 
        person subject to the jurisdiction of the Office of National 
        Insurance under paragraph (8))'' after ``providing insurance'';
            (4) in section 505(a)--
                    (A) by redesignating paragraph (7) as paragraph 
                (8); and
                    (B) by inserting after paragraph (6) the following:
            ``(7) Under subtitle C of title I of the National Insurance 
        Act of 2007, 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.'';
            (5) in section 505(a)(8), as redesignated by paragraph (4) 
        of this section, by striking ``through (6)'' and inserting 
        ``through (7)'';
            (6) in section 505(b)(2), by striking ``and (7)'' and 
        inserting ``(7), and (8)'';
            (7) in section 509(2)--
                    (A) by redesignating subparagraphs (E) and (F) as 
                subparagraphs (F) and (G), respectively; and
                    (B) by inserting after subparagraph (D) the 
                following:
                    ``(E) the Commissioner of National Insurance;'';
            (8) in section 521(e), by inserting ``or Federal'' after 
        ``such institution under State'';
            (9) in section 522(b)(1)--
                    (A) in subparagraph (A)(iv), by striking ``and'' 
                after the semicolon;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by inserting after subparagraph (B) the 
                following:
                    ``(C) subtitle C of title I of the National 
                Insurance Act of 2007, by the Commissioner of National 
                Insurance with respect to any national insurer or 
                national agency and any federally licensed insurance 
                producer.''; and
            (10) in section 525, by inserting ``the Commissioner of 
        National Insurance,'' after ``National Credit Union 
        Administration,''.
    (c) Other Conforming Amendments.--The Gramm-Leach-Bliley Act 
(Public Law 106-102; 113 Stat. 1338) is amended--
            (1) in section 104(b), by inserting ``, or as required by 
        the Commissioner of National Insurance in accordance with the 
        National Insurance Act of 2007'' after ``subject to subsections 
        (c), (d), and (e)'';
            (2) in section 104(f)--
                    (A) by striking ``Subsections (c) and (d)'' and 
                inserting the following:
            ``(1) In general.--Subsections (c) and (d)'';
                    (B) by striking ``(1) the jurisdiction'' and 
                inserting the following: ``(A) the jurisdiction'';
                    (C) by striking ``(A) to investigate'' and 
                inserting the following: ``(i) to investigate'';
                    (D) by striking ``(B) to require'' and inserting 
                the following: ``(ii) to require'';
                    (E) by striking ``(2) State laws'' and inserting 
                the following: ``(B) State laws''; and
                    (F) by adding at the end the following:
            ``(2) Other.--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 2007.'';
            (3) in section 104(g)(4), by striking ``business of 
        insurance.'' and inserting ``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.'';
            (4) in section 112, by inserting in the heading 
        ``commissioner of national insurance'' after ``authority of 
        state insurance regulator'';
            (5) in section 301, by inserting ``, 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'' 
        after ``subject to section 104''; and
            (6) in section 311, by inserting at the end the following: 
        ``This subtitle shall not apply to a national insurer in mutual 
        form that is reorganizing into a mutual holding company.''.

SEC. 1711. AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
amended--
            (1) in section 45, by inserting in the section heading   
        ``, commissioner of office of national insurance,'' after 
        ``state insurance regulator''; and
            (2) in section 47(g)(1)--
                    (A) in subparagraph (A), by striking ``or'' after 
                the semicolon;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; or''; and
                    (C) by adding at the end the following:
                    ``(C) any authority of the Commissioner of National 
                Insurance under the National Insurance Act of 2007.''.

SEC. 1712. AMENDMENTS TO THE BANK HOLDING COMPANY ACT OF 1956.

    The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is 
amended--
            (1) in section 4(k)(4)(I)(iii), by inserting ``or Federal'' 
        after ``relevant State'';
            (2) in section 5(c)(2)(E)(iii), by inserting ``or by or on 
        behalf of the Commissioner of National Insurance'' after ``for 
        the supervision of insurance companies'';
            (3) in section 5(c)(3)(A)(ii)(I), by inserting ``or the 
        Office of National Insurance'' after ``Securities and Exchange 
        Commission'';
            (4) in section 5(c)(4)(B), by inserting ``or the 
        Commissioner of National Insurance'' after ``a State insurance 
        authority'';
            (5) in section 5(c)(5)(B)(iv), by inserting ``or by the 
        Commissioner of National Insurance'' after ``State insurance 
        regulator'';
            (6) in section 5(g), by inserting in the heading ``, 
        Commissioner of National Insurance'' after ``State Insurance 
        Regulator'';
            (7) in section 5(g)(1)(B), by inserting ``or the 
        Commissioner of National Insurance'' after ``State insurance 
        authority'';
            (8) in section 5(g)(2)--
                    (A) in the heading, by inserting ``, commissioner 
                of national insurance,'' after ``state insurance 
                authority''; and
                    (B) by inserting ``or the Commissioner of National 
                Insurance'' after ``the Board shall promptly notify the 
                State insurance authority''; and
            (9) in section 5(g)(3), by inserting ``, the Commissioner 
        of National Insurance,'' after ``If the Board receives a notice 
        described in paragraph (1)(B) from a State insurance 
        authority''.

SEC. 1713. AMENDMENTS TO TITLE 18 (CRIMES AND CRIMINAL PROCEDURE).

    (a) Amendments to Title 18.--Section 1033(b) of title 18, United 
States Code, is amended--
            (1) in paragraph (1)--
                    (A) by inserting ``removes, conceals, alters, 
                destroys,'' after ``willfully embezzles, abstracts, 
                purloins,''; and
                    (B) by inserting ``assets,'' after ``moneys, funds, 
                premiums, credits,''; and
            (2) in paragraph (2)--
                    (A) in the first sentence, by inserting ``removal, 
                concealment, alteration, destruction,'' after 
                ``embezzlement, abstraction, purloining,''; and
                    (B) in the second sentence, by inserting ``removed, 
                concealed, altered, destroyed,'' after ``embezzled, 
                abstracted, purloined,''.
    (b) Insurance Fraud.--Title 18, United States Code, is amended by 
inserting after section 1037 the following:
``Sec. 1037A. Insurance fraud
    ``(a) 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 
2007 or investigations of suspected or actual violations of this 
section shall be punished as provided in subsection (b).
    ``(b)(1) 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.
    ``(2) 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--
            ``(A) $1,000,000 per violation; or
            ``(B) a fine as provided under this title, or imprisonment 
        for not more than 10 years, or both.
    ``(3) 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.
    ``(4) The punishment in this subsection shall be in addition to any 
other penalties under the National Insurance Act of 2007.
    ``(5) Any person convicted of an offense under subsection (a) shall 
be ordered to make monetary restitution for any financial loss or 
damage sustained by any other person as a result of such offense. Such 
restitution shall be the exclusive monetary remedy available to the 
victim at law or in equity after entry of judgment. However, nothing in 
this paragraph shall preclude the maintenance of an action pursuant to 
section 1163 of the National Insurance Act of 2007, absent a 
conviction. If the person convicted of an offense under subsection (a) 
holds an occupational license under any provision of State or Federal 
law, the court shall notify the appropriate licensing authority of the 
conviction.
    ``(c)(1) 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.
    ``(2) 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.
    ``(3) 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.
    ``(d) In this section--
            ``(1) the terms `Commissioner,' `insurance policy,' 
        `insurance producer,' `insurer-affiliated party,' `national 
        agency,' `national insurer,' `person,' and `policy of 
        insurance' have the meanings given to the terms in section 3 of 
        the National Insurance Act of 2007;
            ``(2) the term `business of insurance' has the meaning 
        given to the term in section 1033(f)(1);
            ``(3) the term `fraudulent insurance act' means an act or 
        omission committed by a person who, knowingly and with intent 
        to defraud, and for the purpose of depriving another of 
        property or for pecuniary gain, commits, participates in, or 
        aids, abets, or conspires to commit or solicits another person 
        to commit, or permits its employees or its agents to commit, 1 
        or more of the following--
                    ``(A) 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--
                            ``(i) an application for a new or renewal 
                        of an insurance policy or reinsurance contract;
                            ``(ii) the rating of a national insurer 
                        that writes an insurance policy or enters into 
                        a reinsurance contract;
                            ``(iii) a claim for payment or benefit 
                        pursuant to an insurance policy or reinsurance 
                        contract;
                            ``(iv) premiums paid on an insurance policy 
                        or reinsurance contract;
                            ``(v) payments made in accordance with the 
                        terms of an insurance policy or reinsurance 
                        contract;
                            ``(vi) a document filed with the 
                        Commissioner;
                            ``(vii) the financial condition of a 
                        national insurer;
                            ``(viii) the formation, acquisition, 
                        merger, consolidation, dissolution, or 
                        withdrawal from 1 or more lines of insurance or 
                        reinsurance by a national insurer;
                            ``(ix) the issuance of evidence of 
                        insurance, whether in writing, electronic form, 
                        or otherwise; or
                            ``(x) the reinstatement of an insurance 
                        policy;
                    ``(B) 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;
                    ``(C) removal, concealment, alteration, or 
                destruction of the records of a national insurer, 
                national agency, or other person engaged in the 
                business of insurance;
                    ``(D) transaction of the business of insurance in 
                violation of laws requiring a license therefore under 
                the National Insurance Act of 2007; or
                    ``(E) attempting to commit, aiding or abetting in 
                the commission of, or conspiracy to commit the acts or 
                omissions specified in, this paragraph; and
            ``(4) the term `insurance person' 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.''.

SEC. 1714. AMENDMENTS TO THE AMERICANS WITH DISABILITIES ACT OF 1990.

    Section 501(c) of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12201(c)) is amended--
            (1) in paragraph (1), by inserting ``or Federal'' after 
        ``based on or not inconsistent with State'';
            (2) in paragraph (2), by inserting ``or Federal'' after 
        ``based on or not inconsistent with State''; and
            (3) in paragraph (3), by inserting ``or Federal'' after 
        ``subject to State''.

SEC. 1715. AMENDMENT TO THE AGE DISCRIMINATION IN EMPLOYMENT ACT.

    Section 12(c)(2) of the Age Discrimination in Employment Act of 
1967 (29 U.S.C. 631(c)(2)) is amended by inserting ``and the 
Commissioner of National Insurance'' after ``after consultation with 
the Secretary of the Treasury''.

SEC. 1716. AMENDMENTS TO THE FAIR CREDIT REPORTING ACT.

    Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (5), by striking ``and'' after the 
                semicolon;
                    (B) in paragraph (6), by striking the period at the 
                end and inserting ``; and'';
                    (C) by inserting after paragraph (6) the following:
            ``(7) subtitle C of title I of the National Insurance Act 
        of 2007, by the Commissioner of National Insurance with respect 
        to any national insurer, national agency, and any federally 
        licensed insurance producer.''; and
                    (D) by adding at the end of the undesignated matter 
                at the end the following: ``The terms used in paragraph 
                (7) that are not defined in this title shall have the 
                meaning given to them in section 3 of the National 
                Insurance Act of 2007.''; and
            (2) in subsection (e), by adding at the end the following:
            ``(3) The Commissioner of National Insurance shall 
        prescribe such regulations as are necessary to carry out the 
        purpose of this title with respect to any persons identified in 
        subsection (b)(7).''.
                                 <all>