1.Short title; table of contents
(a)This Act may be cited as the
Nonadmitted and Reinsurance Reform Act
of 2007
.
(b)The table of contents for this Act is as
follows:
Sec. 1. Short title; table of
contents.
Sec. 2. Effective
date.
TITLE I—NONADMITTED
INSURANCE
Sec. 101. Reporting, payment,
and allocation of premium taxes.
Sec. 102. Regulation of
nonadmitted insurance by insured’s home State.
Sec. 103. Participation in
national producer database.
Sec. 104. Uniform standards for
surplus lines eligibility.
Sec. 105. Streamlined
application for commercial purchasers.
Sec. 106. GAO study of
nonadmitted insurance market.
Sec. 107.
Definitions.
TITLE II—REINSURANCE
Sec. 201. Regulation of credit
for reinsurance and reinsurance agreements.
Sec. 202. Regulation of
reinsurer solvency.
Sec. 203.
Definitions.
TITLE III—RULE OF
CONSTRUCTION
Sec. 301. Rule of
Construction.
2.Except as otherwise
specifically provided in this Act, this Act shall take effect upon the
expiration of the 12-month period beginning on the date of enactment of this
Act.
<enum>I</enum><header display-inline="yes-display-inline">NONADMITTED INSURANCE</header>
<section commented="no" display-inline="no-display-inline" id="ID5115DB51476841FEAC23C2CBE0B60E2E" section-type="subsequent-section"><enum>101.</enum><header display-inline="yes-display-inline">Reporting, payment, and allocation of
premium taxes</header>
<subsection commented="no" display-inline="no-display-inline" id="IDAF36618923724C54AE3C5AB0F5E63E6B"><enum>(a)</enum><header display-inline="yes-display-inline">Home State’s Exclusive
Authority</header><text display-inline="yes-display-inline">No State other than
the home State of an insured may require any premium tax payment for
nonadmitted insurance.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID3740FFEA8F6F47D5BEF2E3044B946A85"><enum>(b)</enum><header display-inline="yes-display-inline">Allocation of Nonadmitted Premium
Taxes</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID10E26D8AF7ED4E61BFD6B8D62AC67971"><enum>(1)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">The States may enter into a compact or
otherwise establish procedures to allocate among the States the premium taxes
paid to an insured’s home State described in subsection (a).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3AD4FF30252949039CD90DE73F913B7E"><enum>(2)</enum><header display-inline="yes-display-inline">Effective
date</header><text display-inline="yes-display-inline">Except as expressly
otherwise provided in such compact or other procedures, any such compact or
other procedures—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9643C25B57664A94AB23182B589E755A"><enum>(A)</enum><text display-inline="yes-display-inline">if adopted on or before the expiration of
the 330-day period that begins on the date of the enactment of this Act, shall
apply to any premium taxes that, on or after such date of enactment, are
required to be paid to any State that is subject to such compact or procedures;
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID870306E5586E426AAB65D7076F6E338F"><enum>(B)</enum><text display-inline="yes-display-inline">if adopted after the expiration of such
330-day period, shall apply to any premium taxes that, on or after January 1 of
the first calendar year that begins after the expiration of such 330-day
period, are required to be paid to any State that is subject to such compact or
procedures.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID35B5C5942EEC42D6AABA52B1B12F7131"><enum>(3)</enum><header display-inline="yes-display-inline">Report</header><text display-inline="yes-display-inline">Upon the expiration of the 330-day period
referred to in paragraph (2), the NAIC may submit a report to the Committee on
Financial Services and Committee on the Judiciary of the House of
Representatives and the Committee on Banking, Housing, and Urban Affairs of the
Senate identifying and describing any compact or other procedures for
allocation among the States of premium taxes that have been adopted during such
period by any States.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDDC47EED56FF4E50AD2304C2BDE2C563"><enum>(4)</enum><header display-inline="yes-display-inline">Nationwide system</header><text display-inline="yes-display-inline">The Congress intends that each State adopt
a nationwide or uniform procedure, such as an interstate compact, that provides
for the reporting, payment, collection, and allocation of premium taxes for
nonadmitted insurance consistent with this section.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID50095DF603944950A459E45B6DF21F98"><enum>(c)</enum><header display-inline="yes-display-inline">Allocation Based on Tax Allocation
Report</header><text display-inline="yes-display-inline">To facilitate the
payment of premium taxes among the States, an insured’s home State may require
surplus lines brokers and insureds who have independently procured insurance to
annually file tax allocation reports with the insured’s home State detailing
the portion of the nonadmitted insurance policy premium or premiums
attributable to properties, risks or exposures located in each State. The
filing of a nonadmitted insurance tax allocation report and the payment of tax
may be made by a person authorized by the insured to act as its agent.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID3A0A4308947C47E3AF539A3C1D5B0BD0" section-type="subsequent-section"><enum>102.</enum><header display-inline="yes-display-inline">Regulation of nonadmitted insurance by
insured’s home State</header>
<subsection commented="no" display-inline="no-display-inline" id="IDF4168DD8242C4A49B2666FED0998AA30"><enum>(a)</enum><header display-inline="yes-display-inline">Home State Authority</header><text display-inline="yes-display-inline">Except as otherwise provided in this
section, the placement of nonadmitted insurance shall be subject to the
statutory and regulatory requirements solely of the insured’s home
State.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDA7200EBA22F84C6FA808DC4DF90E5F67"><enum>(b)</enum><header display-inline="yes-display-inline">Broker Licensing</header><text display-inline="yes-display-inline">No State other than an insured’s home State
may require a surplus lines broker to be licensed in order to sell, solicit, or
negotiate nonadmitted insurance with respect to such insured.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID52BAED07BEF445C3A9280DDADCFE70D3"><enum>(c)</enum><header display-inline="yes-display-inline">Enforcement Provision</header><text display-inline="yes-display-inline">Any law, regulation, provision, or action
of any State that applies or purports to apply to nonadmitted insurance sold
to, solicited by, or negotiated with an insured whose home State is another
State shall be preempted with respect to such application.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDC205300D27D342A7AC59661FA22EF3A7"><enum>(d)</enum><header display-inline="yes-display-inline">Workers’ Compensation
Exception</header><text display-inline="yes-display-inline">This section may
not be construed to preempt any State law, rule, or regulation that restricts
the placement of workers’ compensation insurance or excess insurance for
self-funded workers’ compensation plans with a nonadmitted insurer.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID56A41D4E500E439BB3C2379A587643B2" section-type="subsequent-section"><enum>103.</enum><header display-inline="yes-display-inline">Participation in national producer
database</header><text display-inline="no-display-inline">After the expiration
of the 2-year period beginning on the date of the enactment of this Act, a
State may not collect any fees relating to licensing of an individual or entity
as a surplus lines broker in the State unless the State has in effect at such
time laws or regulations that provide for participation by the State in the
national insurance producer database of the NAIC, or any other equivalent
uniform national database, for the licensure of surplus lines brokers and the
renewal of such licenses.</text>
</section><section commented="no" display-inline="no-display-inline" id="IDCD347D2B0EE34A96BF7E9239CA4618E8" section-type="subsequent-section"><enum>104.</enum><header display-inline="yes-display-inline">Uniform standards for surplus lines
eligibility</header><text display-inline="no-display-inline">A State may
not—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID5D0E795219D34741BE0595085E199075"><enum>(1)</enum><text display-inline="yes-display-inline">impose eligibility requirements on, or
otherwise establish eligibility criteria for, nonadmitted insurers domiciled in
a United States jurisdiction, except in conformance with section 5A(2) and
5C(2)(a) of the Non-Admitted Insurance Model Act; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB3361425166E4FC3BE441B2C25A21C5F"><enum>(2)</enum><text display-inline="yes-display-inline">prohibit a surplus lines broker from
placing nonadmitted insurance with, or procuring nonadmitted insurance from, a
nonadmitted insurer domiciled outside the United States that is listed on the
Quarterly Listing of Alien Insurers maintained by the International Insurers
Department of the NAIC.</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="IDCF90784237334C769B81D063E823419D" section-type="subsequent-section"><enum>105.</enum><header display-inline="yes-display-inline">Streamlined application for commercial
purchasers</header><text display-inline="no-display-inline">A surplus lines
broker seeking to procure or place nonadmitted insurance in a State for an
exempt commercial purchaser shall not be required to satisfy any State
requirement to make a due diligence search to determine whether the full amount
or type of insurance sought by such exempt commercial purchaser can be obtained
from admitted insurers if—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDF98C6FEAAF7E4BB386385A3239EF9C5C"><enum>(1)</enum><text display-inline="yes-display-inline">the broker procuring or placing the surplus
lines insurance has disclosed to the exempt commercial purchaser that such
insurance may or may not be available from the admitted market that may provide
greater protection with more regulatory oversight; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID81330E0E03BA471CB0F913B8956E685D"><enum>(2)</enum><text display-inline="yes-display-inline">the exempt commercial purchaser has
subsequently requested in writing the broker to procure or place such insurance
from a nonadmitted insurer.</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="IDF2E5F57456E34F03A449396AB01E56A7" section-type="subsequent-section"><enum>106.</enum><header display-inline="yes-display-inline">GAO study of nonadmitted insurance
market</header>
<subsection commented="no" display-inline="no-display-inline" id="IDA8530205E97A48988962F783817B3584"><enum>(a)</enum><header display-inline="yes-display-inline">In General</header><text display-inline="yes-display-inline">The Comptroller General of the United
States shall conduct a study of the nonadmitted insurance market to determine
the effect of the enactment of this title on the size and market share of the
nonadmitted insurance market for providing coverage typically provided by the
admitted insurance market.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDB888FF48CB1D49CB83EF4195C990B74B"><enum>(b)</enum><header display-inline="yes-display-inline">Contents</header><text display-inline="yes-display-inline">The study shall determine and
analyze—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID950FFD64D4DB4591A294C8EF29CDAB68"><enum>(1)</enum><text display-inline="yes-display-inline">the change in the size and market share of
the nonadmitted insurance market and in the number of insurance companies and
insurance holding companies providing such business in the 18-month period that
begins upon the effective date of this Act;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6239A28E6DAA406BBF3EE9A530A0258C"><enum>(2)</enum><text display-inline="yes-display-inline">the extent to which insurance coverage
typically provided by the admitted insurance market has shifted to the
nonadmitted insurance market;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID688545C6DA214C09B94979C9B388939A"><enum>(3)</enum><text display-inline="yes-display-inline">the consequences of any change in the size
and market share of the nonadmitted insurance market, including differences in
the price and availability of coverage available in both the admitted and
nonadmitted insurance markets;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA69020D87E554C9CBE7D571F0DA63668"><enum>(4)</enum><text display-inline="yes-display-inline">the extent to which insurance companies and
insurance holding companies that provide both admitted and nonadmitted
insurance have experienced shifts in the volume of business between admitted
and nonadmitted insurance; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6A0EE8FB8BB3497E8B2506AA221E5098"><enum>(5)</enum><text display-inline="yes-display-inline">the extent to which there has been a change
in the number of individuals who have nonadmitted insurance policies, the type
of coverage provided under such policies, and whether such coverage is
available in the admitted insurance market.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB4299F4D4B624F119F5827732B822E24"><enum>(c)</enum><header display-inline="yes-display-inline">Consultation With NAIC</header><text display-inline="yes-display-inline">In conducting the study under this section,
the Comptroller General shall consult with the NAIC.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID004FDE197FBB448AA89E38BFF9DD8D35"><enum>(d)</enum><header display-inline="yes-display-inline">Report</header><text display-inline="yes-display-inline">The Comptroller General shall complete the
study under this section and submit a report to the Committee on Financial
Services of the House of Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate regarding the findings of the study not later
than 30 months after the effective date of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDF1843A621EEF4FCEBF262A396C52FE0F" section-type="subsequent-section"><enum>107.</enum><header display-inline="yes-display-inline">Definitions</header><text display-inline="no-display-inline">For purposes of this title, the following
definitions shall apply:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID1221A49BF41D4D47ABDAEB17EE00AFA3"><enum>(1)</enum><header display-inline="yes-display-inline">Admitted insurer</header><text display-inline="yes-display-inline">The term <term>admitted insurer</term>
means, with respect to a State, an insurer licensed to engage in the business
of insurance in such State.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID90ABF30D58044A7BA1BE22BDA33472B4"><enum>(2)</enum><header display-inline="yes-display-inline">Exempt commercial purchaser</header><text display-inline="yes-display-inline">The term <term>exempt commercial
purchaser</term> means any person purchasing commercial insurance that meets
the following requirements:</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID3716F1007643406EBF588A925BC7C635"><enum>(A)</enum><text display-inline="yes-display-inline">The person employs or retains a qualified
risk manager to negotiate insurance coverage.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID468A77D8966C4A5796CCF4E00120EA04"><enum>(B)</enum><text display-inline="yes-display-inline">The person has paid aggregate nationwide
commercial property and casualty insurance premiums in excess of $100,000 in
the immediately preceding 12 months.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAA8496A8D0484EC5B8A2C9790834D4E1"><enum>(C)</enum><text display-inline="yes-display-inline">The person meets at least one of the
following criteria:</text>
<clause commented="no" display-inline="no-display-inline" id="IDEA715A8A193342B6BCFD9AF0AF1202A6"><enum>(i)</enum><text display-inline="yes-display-inline">The person possesses a net worth in excess
of $20,000,000.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID2B06C687566C4C0F9CCC3CD3B8E68A04"><enum>(ii)</enum><text display-inline="yes-display-inline">The person generates annual revenues in
excess of $50,000,000.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID80D84604C274429E90280EF23946D186"><enum>(iii)</enum><text display-inline="yes-display-inline">The person employs more than 500 full time
or full time equivalent employees per individual insured or is a member of
affiliated group employing more than 1,000 employees in the aggregate.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDF74DF7D0F965453D8464798C812EE51B"><enum>(iv)</enum><text display-inline="yes-display-inline">The person is a not-for-profit organization
or public entity generating annual budgeted expenditures of at least
$30,000,000.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID60364FAC5DEA4908A1A9917FC2C87CDC"><enum>(v)</enum><text display-inline="yes-display-inline">The person is a municipality with a
population in excess of 50,000 persons.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD66CE83D606C4BFDBF9F2CE2F82E7C3B"><enum>(3)</enum><header display-inline="yes-display-inline">Home state</header><text display-inline="yes-display-inline">The term <term>home State</term> means the
State in which an insured maintains its principal place of business or, in the
case of an individual, the individual’s principal residence.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID46D93C3638894A758EED495057E4A927"><enum>(4)</enum><header display-inline="yes-display-inline">Independently procured
insurance</header><text display-inline="yes-display-inline">The term
<term>independently procured insurance</term> means insurance procured directly
by an insured from a nonadmitted insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID295E1C54E6F14D6FB32163D6F6A184B0"><enum>(5)</enum><header display-inline="yes-display-inline">NAIC</header><text display-inline="yes-display-inline">The term <term>NAIC</term> means the
National Association of Insurance Commissioners, or any successor
entity.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID136CB53437E3459598BD57E0A547357D"><enum>(6)</enum><header display-inline="yes-display-inline">Nonadmitted insurance</header><text display-inline="yes-display-inline">The term <term>nonadmitted insurance</term>
means any property and casualty insurance permitted to be placed directly or
through a surplus lines broker with a nonadmitted insurer eligible to accept
such insurance.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9232FDF964794253963C798A8791C028"><enum>(7)</enum><header display-inline="yes-display-inline">Non-admitted insurance model
act</header><text display-inline="yes-display-inline">The term
<term>Non-Admitted Insurance Model Act</term> means the provisions of the
Non-Admitted Insurance Model Act, as adopted by the NAIC on August 3, 1994, and
amended on September 30, 1996, December 6, 1997, October 2, 1999, and June 8,
2002.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5B4ACD0F3C0D4EBB809960F7A4F92FA2"><enum>(8)</enum><header display-inline="yes-display-inline">Nonadmitted insurer</header><text display-inline="yes-display-inline">The term <term>nonadmitted insurer</term>
means, with respect to a State, an insurer not licensed to engage in the
business of insurance in such State.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID97724AD75BC1450EB9FA368DCFAB1947"><enum>(9)</enum><header display-inline="yes-display-inline">Qualified risk manager</header><text display-inline="yes-display-inline">The term <term>qualified risk
manager</term> means, with respect to a policyholder of commercial insurance, a
person who meets all of the following requirements:</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5AF42B083DC94C66A93EB52E950F36A6"><enum>(A)</enum><text display-inline="yes-display-inline">The person is an employee of, or third
party consultant retained by, the commercial policyholder.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID247139AEC6BE4B329473C3EFFFEEA2DD"><enum>(B)</enum><text display-inline="yes-display-inline">The person provides skilled services in
loss prevention, loss reduction, or risk and insurance coverage analysis, and
purchase of insurance.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB3FB1E0E7ED4402483CEC0C9DD3D9959"><enum>(C)</enum><text display-inline="yes-display-inline">The person possesses at least two of the
following credentials:</text>
<clause commented="no" display-inline="no-display-inline" id="ID169C12364F074B6580212C0344F10DD2"><enum>(i)</enum><text display-inline="yes-display-inline">An advanced degree in risk management
issued by an accredited college or university.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8C36DA357C524013A1B66218F8FBF9A5"><enum>(ii)</enum><text display-inline="yes-display-inline">At least 5 years of experience in one or
more of the following areas of commercial property insurance or commercial
casualty insurance:</text>
<subclause commented="no" display-inline="no-display-inline" id="ID166D6D66BD9A4C08A2FC79337CAA69C7"><enum>(I)</enum><text display-inline="yes-display-inline">Risk financing.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID81E4529427A449718CD5B03BFAFAE892"><enum>(II)</enum><text display-inline="yes-display-inline">Claims administration.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID0CAE0BB242A1417EB7D8B277D86E91B2"><enum>(III)</enum><text display-inline="yes-display-inline">Loss prevention.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID4A60EC7AED164E2492655F0CEBE8106B"><enum>(IV)</enum><text display-inline="yes-display-inline">Risk and insurance coverage
analysis.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID08EF1F3A5ADA41059129FE9716DA48E1"><enum>(iii)</enum><text display-inline="yes-display-inline">At least one of the following
designations:</text>
<subclause commented="no" display-inline="no-display-inline" id="IDC14C9BF57B694981AB57E6144C902FB8"><enum>(I)</enum><text display-inline="yes-display-inline">A designation as a Chartered Property and
Casualty Underwriter (in this clause referred to as <quote>CPCU</quote>) issued
by the American Institute for CPCU/Insurance Institute of America.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID6F75341E74A94BCAB0A52A6D89AC053E"><enum>(II)</enum><text display-inline="yes-display-inline">A designation as an Associate in Risk
Management (ARM) issued by American Institute for CPCU/Insurance Institute of
America.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID2404C14E587942F0B73613E9731C56B3"><enum>(III)</enum><text display-inline="yes-display-inline">A designation as a Certified Risk Manager
(CRM) issued by the National Alliance for Insurance Education &
Research.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID808E8C53AB844066B393134D48B17C06"><enum>(IV)</enum><text display-inline="yes-display-inline">A designation as a RIMS Fellow (RF) issued
by the Global Risk Management Institute.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDB936FB384C284A728B6AAD30DF8D5FD8"><enum>(V)</enum><text display-inline="yes-display-inline">Any other designation, certification, or
license determined by a State insurance commissioner or other State insurance
regulatory official or entity to demonstrate minimum competency in risk
management.</text>
</subclause></clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC44D4D29214F4B8BB50C9FD8EDF74CE6"><enum>(10)</enum><header display-inline="yes-display-inline">Premium tax</header><text display-inline="yes-display-inline">The term <term>premium tax</term> means,
with respect to surplus lines or independently procured insurance coverage, any
tax, fee, assessment, or other charge imposed by a State on an insured based on
any payment made as consideration for an insurance contract for such insurance,
including premium deposits, assessments, registration fees, and any other
compensation given in consideration for a contract of insurance.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0C3FA79803B740429CB937F2F5A408CA"><enum>(11)</enum><header display-inline="yes-display-inline">Surplus lines broker</header><text display-inline="yes-display-inline">The term <term>surplus lines broker</term>
means an individual, firm, or corporation which is licensed in a State to sell,
solicit, or negotiate insurance on properties, risks, or exposures located or
to be performed in a State with nonadmitted insurers.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID956FDBFE84734AD5AFBECB8557E8882B"><enum>(12)</enum><header display-inline="yes-display-inline">State</header><text display-inline="yes-display-inline">The term <term>State</term> includes any
State of the United States, the District of Columbia, the Commonwealth of
Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and
American Samoa.</text>
</paragraph></section><enum>II</enum><header display-inline="yes-display-inline">REINSURANCE</header>
<section commented="no" display-inline="no-display-inline" id="IDF83BBB313F4B489BB07204AFACC41D6E" section-type="subsequent-section"><enum>201.</enum><header display-inline="yes-display-inline">Regulation of credit for reinsurance and
reinsurance agreements</header>
<subsection commented="no" display-inline="no-display-inline" id="ID86667F1C895F4DFD93B66A1B87474C69"><enum>(a)</enum><header display-inline="yes-display-inline">Credit for Reinsurance</header><text display-inline="yes-display-inline">If the State of domicile of a ceding
insurer is an NAIC-accredited State, or has financial solvency requirements
substantially similar to the requirements necessary for NAIC accreditation, and
recognizes credit for reinsurance for the insurer’s ceded risk, then no other
State may deny such credit for reinsurance.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID66B36FD3987B44E19EE7E73D801567AA"><enum>(b)</enum><header display-inline="yes-display-inline">Additional Preemption of Extraterritorial
Application of State Law</header><text display-inline="yes-display-inline">In
addition to the application of subsection (a), all laws, regulations,
provisions, or other actions of a State other than those of the State of
domicile of the ceding insurer are preempted to the extent that they—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDE1661BABD17A48B5BFDF13CBD802EAEF"><enum>(1)</enum><text display-inline="yes-display-inline">restrict or eliminate the rights of the
ceding insurer or the assuming insurer to resolve disputes pursuant to
contractual arbitration to the extent such contractual provision is not
inconsistent with the provisions of title 9, United States Code;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1A0A43FCB22640A59FACD1791C0D9CC7"><enum>(2)</enum><text display-inline="yes-display-inline">require that a certain State’s law shall
govern the reinsurance contract, disputes arising from the reinsurance
contract, or requirements of the reinsurance contract;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID588CED2F1AC14755B22FED54082FA47C"><enum>(3)</enum><text display-inline="yes-display-inline">attempt to enforce a reinsurance contract
on terms different than those set forth in the reinsurance contract, to the
extent that the terms are not inconsistent with this title; or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDD90EF296B0C4F579002919D85A2276D"><enum>(4)</enum><text display-inline="yes-display-inline">otherwise apply the laws of the State to
reinsurance agreements of ceding insurers not domiciled in that State.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID56302C500F3F4BE481D00D10F995F81F" section-type="subsequent-section"><enum>202.</enum><header display-inline="yes-display-inline">Regulation of reinsurer solvency</header>
<subsection commented="no" display-inline="no-display-inline" id="IDC088C707D41B48E6912F28B002806B94"><enum>(a)</enum><header display-inline="yes-display-inline">Domiciliary State Regulation</header><text display-inline="yes-display-inline">If the State of domicile of a reinsurer is
an NAIC-accredited State or has financial solvency requirements substantially
similar to the requirements necessary for NAIC accreditation, such State shall
be solely responsible for regulating the financial solvency of the
reinsurer.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDE598A334A9454AD19292D0980A5B4564"><enum>(b)</enum><header display-inline="yes-display-inline">Nondomiciliary States</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID06BC6215A8B1430EA345C344E526F4CA"><enum>(1)</enum><header display-inline="yes-display-inline">Limitation on financial information
requirements</header><text display-inline="yes-display-inline">If the State of
domicile of a reinsurer is an NAIC-accredited State or has financial solvency
requirements substantially similar to the requirements necessary for NAIC
accreditation, no other State may require the reinsurer to provide any
additional financial information other than the information the reinsurer is
required to file with its domiciliary State.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID38D2F5CE72794CE385921EE4B4A1DFCE"><enum>(2)</enum><header display-inline="yes-display-inline">Receipt of information</header><text display-inline="yes-display-inline">No provision of this section shall be
construed as preventing or prohibiting a State that is not the State of
domicile of a reinsurer from receiving a copy of any financial statement filed
with its domiciliary State.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID29AC2808964040E39CA5F8958A3F30D2" section-type="subsequent-section"><enum>203.</enum><header display-inline="yes-display-inline">Definitions</header><text display-inline="no-display-inline">For purposes of this title, the following
definitions shall apply:</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID59E1A3B69C8B455BBA036A2DAEBACBDD"><enum>(1)</enum><header display-inline="yes-display-inline">Ceding
insurer</header><text display-inline="yes-display-inline">The term <term>ceding
insurer</term> means an insurer that purchases reinsurance.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6ACCDD26DD9D46F0AE6BF98B71BB23B3"><enum>(2)</enum><header display-inline="yes-display-inline">Domiciliary state</header><text display-inline="yes-display-inline">The terms <term>State of domicile</term>
and <term>domiciliary State</term> means, with respect to an insurer or
reinsurer, the State in which the insurer or reinsurer is incorporated or
entered through, and licensed.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1FF3A4806BE6417F962C606143C32D5B"><enum>(3)</enum><header display-inline="yes-display-inline">Reinsurance</header><text display-inline="yes-display-inline">The term <term>reinsurance</term> means the
assumption by an insurer of all or part of a risk undertaken originally by
another insurer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1A9FC6B0DC274D3FA48CD27D7F8FE265"><enum>(4)</enum><header display-inline="yes-display-inline">Reinsurer</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID200D2D5F73884D8B8F7299F9D63FF199"><enum>(A)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">The term <term>reinsurer</term> means an
insurer to the extent that the insurer—</text>
<clause commented="no" display-inline="no-display-inline" id="ID39FD22B68AD94E14AE60B68EEBF7427C"><enum>(i)</enum><text display-inline="yes-display-inline">is principally engaged in the business of
reinsurance;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID3284A9E13666450AADBF281A019080A0"><enum>(ii)</enum><text display-inline="yes-display-inline">does not conduct significant amounts of
direct insurance as a percentage of its net premiums; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID1EB89820DBD349939472DF1758D20836"><enum>(iii)</enum><text display-inline="yes-display-inline">is not engaged in an ongoing basis in the
business of soliciting direct insurance.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB84BE3EE47634439A54F6D8E6EEC4F58"><enum>(B)</enum><header display-inline="yes-display-inline">Determination</header><text display-inline="yes-display-inline">A determination of whether an insurer is a
reinsurer shall be made under the laws of the State of domicile in accordance
with this paragraph.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4BB88C16A0F5443F9166A2BD9EC15715"><enum>(5)</enum><header display-inline="yes-display-inline">State</header><text display-inline="yes-display-inline">The term <term>State</term> includes any
State of the United States, the District of Columbia, the Commonwealth of
Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and
American Samoa.</text>
</paragraph></section><enum>III</enum><header display-inline="yes-display-inline">RULE OF CONSTRUCTION</header>
<section commented="no" display-inline="no-display-inline" id="IDC7D5B26C7A0F4F83A1BA02862A6C1533" section-type="subsequent-section"><enum>301.</enum><header display-inline="yes-display-inline">Rule of Construction</header><text display-inline="no-display-inline">Nothing in this Act or the amendments to
this Act shall be construed to modify, impair, or supersede the application of
the antitrust laws. Any implied or actual conflict between this Act and any
amendments to this Act and the antitrust laws shall be resolved in favor of the
operation of the antitrust laws.</text>
</section>