[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1880 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 1880

   To establish a system of regulation and supervision for insurers, 
insurance agencies, and insurance producers chartered or licensed under 
Federal law that ensures the stability and financial integrity of those 
 insurers, agencies, and producers and that protects policyholders and 
    other consumers served by such insurers, agencies, or producers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 2, 2009

  Ms. Bean (for herself and Mr. Royce) introduced the following bill; 
   which was referred to the Committee on Financial Services, and in 
 addition to the Committees on the Judiciary and Energy and Commerce, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To establish a system of regulation and supervision for insurers, 
insurance agencies, and insurance producers chartered or licensed under 
Federal law that ensures the stability and financial integrity of those 
 insurers, agencies, and producers and that protects policyholders and 
    other consumers served by such insurers, agencies, or producers.

    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 
Consumer Protection Act''.
    (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 and Appointment of National 
                         Insurance Commissioner

Sec. 101. Establishment of office and appointment of National Insurance 
                            Commissioner.
Sec. 102. Duties and powers of the commissioner.
Sec. 103. Independence and GAO audit.
Sec. 104. Office personnel matters.
Sec. 105. Division of Consumer Affairs.
Sec. 106. Division of Insurance Fraud.
Sec. 107. Office of the Ombudsman.
Sec. 108. Insurance self-regulatory organizations.
Sec. 109. Relationship to State law.
  Subtitle B--Supervision of National Insurers and National Insurance 
                                Agencies

Sec. 111. Prudential supervision.
Sec. 112. Examinations.
Sec. 113. Reports.
Sec. 114. Annual assessments and other fees.
Sec. 115. Appropriations during start-up period.
Sec. 116. Disclosure of information.
Sec. 117. Anti-money laundering compliance.
             Subtitle C--Enforcement Powers of Commissioner

Sec. 121. Revocation or suspension of charter or license.
Sec. 122. Other enforcement powers.
Sec. 123. Insurance fraud.
Sec. 124. Foreign investigations.
Sec. 125. Prompt corrective action.
TITLE II--SYSTEMIC RISK REGULATION, COORDINATING COUNCIL FOR FINANCIAL 
                  REGULATORS, INTERNATIONAL AGREEMENTS

Sec. 201. Systemic risk regulation.
Sec. 202. Coordinating council for financial regulators.
Sec. 203. International agreements.
TITLE III--NATIONAL INSURANCE COMPANIES AND NATIONAL INSURANCE AGENCIES

            Subtitle A--Organization, Chartering, and Powers

Sec. 301. Organization and chartering.
Sec. 302. Corporate governance.
Sec. 303. Charter conversions.
Sec. 304. Powers.
Sec. 305. Chartering commencement date.
       Subtitle B--Financial, Policy and Market Conduct Standards

Sec. 311. Financial standards.
Sec. 312. Policy standards.
Sec. 313. Market conduct standards.
Sec. 314. General principles.
                       Subtitle C--State Taxation

Sec. 321. State taxation of national insurers.
Sec. 322. State taxation of national insurance agencies.
Sec. 323. State taxation of nonadmitted and surplus lines of insurance.
                 TITLE IV--NATIONAL INSURANCE PRODUCERS

Sec. 401. Licensing of national insurance producers.
Sec. 402. Supervision and examination.
Sec. 403. Producer database.
Sec. 404. Duty to supervise.
Sec. 405. Relationship to State law.
Sec. 406. Licensing commencement date.
       TITLE V--CHANGE IN CONTROL AND INSURANCE HOLDING COMPANIES

Sec. 501. Change in control.
Sec. 502. Reports by and examinations of insurance holding companies.
Sec. 503. Activities of insurance holding companies and subsidiaries.
Sec. 504. Capital, liquidity, dividend, operational, and other 
                            standards.
Sec. 505. Affiliate transactions.
Sec. 506. Relationship to other laws.
Sec. 507. No delegation permitted.
 TITLE VI--CONSERVATORSHIP, RECEIVERSHIP, THE PAYMENT OF BENEFITS AND 
     CLAIMS TO POLICYHOLDERS, AND ASSESSMENTS ON NATIONAL INSURERS

Sec. 601. Appointment of conservator or receiver.
Sec. 602. Establishment of the National Insurance Guaranty Corporation.
Sec. 603. Payment of claims to policyholders of national insurers.
Sec. 604. Assessments of national insurers.
Sec. 605. Participation in State guaranty associations.
Sec. 606. Report to Congress.
                  TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 701. Applicable law.
Sec. 702. Application of the Federal antitrust laws.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to ensure the financial stability and integrity of 
        national insurers, national insurance agencies, and national 
        insurance producers through a comprehensive system of national 
        supervision and regulation; and
            (2) to ensure the fair and equitable treatment of 
        policyholders, claimants, and other consumers served by 
        national insurers, national insurance agencies, and national 
        insurance producers.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Affiliate.--The term ``affiliate'' means any person 
        that controls, is controlled by, or is under common control 
        with another person.
            (2) Annuity.--The term ``annuity'' means all agreements to 
        make periodical payments for a period certain or where the 
        making or continuance of all or some of a series of such 
        payments, or the amount of any such payment, depends upon the 
        continuance of human life.
            (3) Anti-fraud organization.--The term ``anti-fraud 
        organization'' means an organization--
                    (A) whose purposes include investigation, 
                prevention, and detection of insurance-related crime 
                and fraud, including assistance to and cooperation with 
                State and national public officials and law enforcement 
                officers in their anti-fraud activities; and
                    (B) described in section 501(c)(3) of the Internal 
                Revenue Code of 1986 and exempt from tax under section 
                501(a) of such Code.
            (4) Business of insurance.--The term ``business of 
        insurance'' has the meaning given such term in section 1033(f) 
        of title 18, United States Code.
            (5) Commissioner.--The term ``Commissioner'' means the 
        National Insurance Commissioner appointed under section 101.
            (6) Company.--The term ``company'' means any corporation, 
        partnership, business trust, association, or similar 
        organization.
            (7) Control.--The term ``control''--
                    (A) means the power of a person--
                            (i) with an ownership interest in a 
                        national insurer or national insurance agency 
                        (whether direct or indirect) to direct the 
                        management or policies of such national insurer 
                        or national insurance agency; or
                            (ii) to vote 25 percent or more of any 
                        class of voting securities of a national 
                        insurer or national insurance agency; and
                    (B) does not include a person that possesses power 
                referred to in subparagraph (A) as a result of an 
                official position, corporate office, or fiduciary 
                relationship held by such person.
            (8) Corporation.--The term ``Corporation'' means the 
        National Insurance Guaranty Corporation established under 
        section 601.
            (9) 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.
            (10) 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.
            (11) Insurance producer.--The term ``insurance producer'' 
        means any person that sells, solicits, or negotiates policies 
        of insurance, nonadmitted insurance, and surplus lines of 
        insurance, but does not include a person that provides 
        administrative services to an insurer.
            (12) 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 insurance agency;
                    (B) any shareholder, consultant, joint venture 
                partner, and any other person as determined by the 
                Commissioner who participates in the conduct of the 
                affairs of a national insurer or a national insurance 
                agency; and
                    (C) any independent contractor (including any 
                attorney, actuary, or accountant) of a national insurer 
                or a national insurance 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, and which 
                violation, breach, or conduct caused or is likely to 
                cause more than a minimal financial loss to, or a 
                significant adverse effect on, a national insurer or 
                the policyholders of a national insurer.
            (13) Insurer in fraternal form.--The term ``insurer in 
        fraternal form'' means an incorporated society, order, or 
        supreme lodge without capital stock 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 one 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.
            (14) Life insurance.--The term ``life insurance'' means 
        every insurance upon the lives of human beings, and every 
        insurance appertaining thereto, including disability income 
        insurance, long-term care insurance, and supplemental health 
        insurance.
            (15) NAIC.--The term ``NAIC'' means the National 
        Association of Insurance Commissioners.
            (16) National insurance agency.--The term ``national 
        insurance agency'' means a national insurance agency chartered 
        under section 301.
            (17) National insurance holding company.--The term 
        ``national insurance holding company'' means a company that 
        controls a national insurer or national insurance agency.
            (18) National insurance producer.--The term ``national 
        insurance producer'' means a national insurance agent or broker 
        licensed under section 401.
            (19) National insurer.--The term ``national insurer'' means 
        a national insurance company chartered under section 301.
            (20) National life insurer.--The term ``national life 
        insurer'' means a national insurer that is chartered under 
        section 301 to sell, solicit, negotiate, and underwrite life 
        insurance.
            (21) Nonadmitted insurance.--The term ``nonadmitted 
        insurance'' means property and casualty insurance permitted by 
        the Commissioner to be placed directly or through an insurance 
        producer with a nonadmitted insurer eligible to accept such 
        insurance.
            (22) Nonadmitted insurer.--The term ``nonadmitted 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.
            (23) Office.--The term ``Office'' means the Office of 
        National Insurance established under section 101.
            (24) Person.--The term ``person'' means any natural person, 
        business entity, governmental body or entity, voluntary 
        organization, or similar organization.
            (25) Policy.--The term ``policy'' means a policy, contract, 
        certificate, or other evidence of insurance, or an annuity 
        contract or a rider or endorsement thereto, but does not 
        include a funding agreement, a reinsurance contract, or 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.
            (26) Property and casualty insurance.--The term ``property 
        and casualty insurance'' means a policy 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.
            (27) 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.
            (28) 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.
            (29) State insurer.--The term ``State insurer'' means an 
        insurer incorporated in or organized under the laws of a State 
        that is not chartered as a national insurer under this Act.
            (30) Supplemental health insurance.--The term 
        ``supplemental health insurance'' means a group or individual 
        policy that provides coverage for hospital, medical or surgical 
        benefits and is sold separately and not dependent upon 
        comprehensive health or medical insurance, including a policy 
        for accidents, accidental death and dismemberment, credit 
        disability, dread disease, dental, hospital accident, hospital 
        indemnity, hospital confinement indemnity, limited benefit 
        medical, medical/surgical policies, Medicare supplement, 
        retiree medical, specific treatment policies, travel, and 
        vision.
            (31) 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 
        nonadmitted insurer that is sold, solicited, or negotiated by a 
        national insurance agency, national insurance producer, or 
        other insurance producer.
            (32) 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 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.
            (33) 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.

                 TITLE I--OFFICE OF NATIONAL INSURANCE

    Subtitle A--Establishment of Office and Appointment of National 
                         Insurance Commissioner

SEC. 101. ESTABLISHMENT OF OFFICE AND APPOINTMENT OF NATIONAL INSURANCE 
              COMMISSIONER.

    (a) In General.--There is established in the Department of the 
Treasury the Office of National Insurance.
    (b) National Insurance Commissioner.--
            (1) In general.--There is established the position of the 
        National Insurance Commissioner, who shall be the head of the 
        Office.
            (2) Appointment.--The Commissioner 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, for a term of 5 years, unless removed before the end of 
        such term for cause by the President.
            (3) Vacancy.--A vacancy in the position of the Commissioner 
        shall be filled in the manner established under paragraph (2). 
        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 such time as a successor has been appointed in 
        accordance with paragraph (2).
            (5) Prohibition on financial interests.--The Commissioner 
        may not have a direct or indirect financial interest in any 
        national insurer or national insurance agency, except that the 
        Commissioner may own, directly or indirectly, or may have a 
        direct or indirect beneficial interest in an insurance policy 
        written or sold by a national insurer, national insurance 
        agency, or national insurance producer.
            (6) General oversight.--The Commissioner shall be subject 
        to the general oversight of the Secretary of the Treasury, but 
        the Secretary may not intervene in any matter or proceeding 
        before the Commissioner unless otherwise specifically provided 
        by law.
            (7) Executive schedule.--Section 5314 of title 5, United 
        States Code, is amended by adding at the end following new 
        item:
    ``National Insurance Commissioner.''.

SEC. 102. DUTIES AND POWERS OF THE COMMISSIONER.

    (a) Duties.--The Commissioner shall--
            (1) oversee the organization, incorporation, operation, 
        regulation, and supervision of national insurers and national 
        insurance agencies and shall issue charters therefore; and
            (2) license, regulate, and supervise national insurance 
        producers.
    (b) Incidental Powers.--The Commissioner may exercise such 
incidental powers as may be necessary to fulfill the duties specified 
in subsection (a).
    (c) Rulemaking Powers.--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. The Secretary of 
the Treasury may not delay or prevent the issuance of any rule, 
regulation, order, or interpretation by the Commissioner.
    (d) Litigation Powers.--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.
    (e) Enforcement Powers.--The Commissioner may apply to the United 
States district court for the jurisdiction in which the main office of 
a national insurer or national insurance agency is located, or in which 
an insurer-affiliated party, national insurance producer, or other 
person is located, for the enforcement of any rule, regulation, order, 
or interpretation issued pursuant to this Act.

SEC. 103. INDEPENDENCE AND GAO AUDIT.

    (a) Independence of Congressional Testimony and Recommendations.--
Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by 
inserting ``the National Insurance Commissioner,'' after ``the Director 
of the Office of Thrift Supervision,''.
    (b) 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. 104. OFFICE PERSONNEL MATTERS.

    (a) In General.--The Commissioner may employ such persons 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.

SEC. 105. DIVISION OF CONSUMER AFFAIRS.

    (a) Establishment.--The Commissioner shall establish a Division of 
Consumer Affairs within the Office, and shall appoint a Director of the 
Division of Consumer Affairs, who shall report to the Commissioner.
    (b) Function.--The Director of the Division of Consumer Affairs 
shall--
            (1) act as a liaison between the Office and consumers of 
        insurance;
            (2) receive questions and complaints from consumer 
        regarding acts or practices of national insurers, national 
        insurance agencies, and national insurance producers; and
            (3) take actions to resolve such questions and complaints.
    (c) State Offices; Call Center.--The Commissioner shall establish 
an office of the Division of Consumer Affairs in each State and a 
centralized call center, toll-free telephone number, and Internet 
address order to receive and act upon questions and complaints from 
consumers regarding acts or practices of national insurers, national 
insurance agencies, and national insurance producers.
    (d) Reports.--The Commissioner shall annually submit to the 
Committee on Financial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate a report 
on the volume of consumer complaints received by the Division of 
Consumer Affairs and the ability of the Office to address such 
complaints in a timely manner.

SEC. 106. DIVISION OF INSURANCE FRAUD.

    (a) Establishment.--The Commissioner shall establish a Division of 
Insurance Fraud within the Office, and shall appoint a Director of the 
Division of Insurance Fraud, who shall report to the Commissioner.
    (b) Duties.--The Director of the Division of Insurance Fraud shall 
carry out investigations of insurance fraud in accordance with section 
123.

SEC. 107. OFFICE OF THE OMBUDSMAN.

    (a) Office of the Ombudsman.--The Commissioner shall establish an 
Office of the Ombudsman, and appoint an Ombudsman, who shall report to 
the Commissioner.
    (b) Duty of the Ombudsman.--The Ombudsman shall act as a liaison 
between the Office and any national insurer, national insurance agency, 
national insurance producer, or insurer-affiliated party 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.
    (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.--Subject to such procedures as the 
Commissioner may establish by regulation, any national insurer, 
national insurance agency, national insurance producer, or insurer-
affiliated party 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) Decisions of the Ombudsman.--The Ombudsman shall investigate 
each matter for which review is sought under subsection (d) and, after 
consideration of all relevant information provided to the Ombudsman by 
the person seeking such review and the Commissioner, 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.
    (f) Retaliation Prohibited.--An employee of the Office of National 
Insurance may not take any adverse action against a complainant for 
appealing any decision or action to the Ombudsman.

SEC. 108. INSURANCE SELF-REGULATORY ORGANIZATIONS.

    (a) Authority of the Commissioner.--The Commissioner may provide 
for the registration of one or more insurance self-regulatory 
organizations, and supervise and regulate any such organization.
    (b) Authority of Registered Insurance Self-Regulatory 
Organization.--Except as otherwise provided in this Act, the 
Commissioner may authorize an insurance self-regulatory organization 
registered by the Commissioner to carry out the purposes of this Act, 
and enforce compliance by its members with the provisions of this Act, 
applicable regulations issued by the Commissioner, and the rules of the 
organization.

SEC. 109. RELATIONSHIP TO STATE LAW.

    (a) In General.--Except as authorized by this Act or otherwise 
authorized under Federal law, no national insurer, national insurance 
agency, or national insurance producer shall be subject to any form of 
licensing, examination, reporting, regulation, or supervision by a 
State relating to the insurance operations of such insurer, such 
agency, or such producer.
    (b) Applicable State Laws.--Notwithstanding subsection (a), a 
national insurers, national insurance agencies, and national insurance 
producers shall be subject to--
            (1) State unclaimed property and escheat laws;
            (2) tax laws of a State, in accordance with sections 321, 
        322, and 323;
            (3) 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) 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) 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) 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) Definitions.--In this section:
            (1) Advisory or statistical organization.--The term 
        ``advisory or statistical organization'' does not include the 
        National Association of Insurance Commissioners.
            (2) Compulsory coverage.--The term ``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.
            (3) Mandatory residual market.--The term ``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.

  Subtitle B--Supervision of National Insurers and National Insurance 
                                Agencies

SEC. 111. PRUDENTIAL SUPERVISION.

    (a) Sense of Congress.--It is the sense of Congress that the 
Commissioner should--
            (1) promote an open and continuous exchange of information 
        between national insurers, national insurance agencies, and 
        national insurance producers and the Office; and
            (2) encourage such insurers, agencies, and producers to 
        self-identify and self-correct actual or potential violations 
        of law, regulation, or any other supervisory requirements that 
        the Commissioner considers necessary before such actions harm 
        policyholders or other consumers.
    (b) Regulations.--The Commissioner shall issue regulations on 
prudential supervision to--
            (1) require national insurers, national insurance agencies, 
        and national insurance producers to establish and implement 
        internal risk control practices and procedures that are 
        designed to detect and prevent violations of laws, regulations, 
        and any other supervisory requirements that the Commissioner 
        considers necessary;
            (2) require national insurers, national insurance agencies, 
        and national insurance producers to self-report violations of 
        applicable laws, regulations, or such other supervisory 
        requirements and to correct such violations;
            (3) provide that if the Commissioner determines a violation 
        of a law, regulation, or other supervisory requirement upon 
        which an enforcement action may be based is correctable, the 
        Commissioner shall provide warning to a national insurer, 
        national insurance agency, or national insurance producer 
        regarding such violation before taking such action;
            (4) identify the range of enforcement actions the 
        Commissioner may bring in response to a violation of law, 
        regulation, or other supervisory requirement, and provide that, 
        subject to subsection (c), the Commissioner shall pursue a 
        continuum of enforcement actions that begins with the least 
        severe sanction or penalty and gradually escalates to the most 
        severe sanction or penalty;
            (5) identify the factors the Commissioner will consider in 
        determining whether to bring an enforcement action and in 
        determining the type of action to be brought; and
            (6) specify the Commissioner's practices and procedures 
        related to investigations, and provide that the Commissioner 
        shall--
                    (A) notify a national insurer, national insurance 
                agency, or national insurance producer within 10 days 
                of completing an investigation; and
                    (B) review the status of all open investigations on 
                a semiannual basis and determine if such matter should 
                remain open or be closed.

SEC. 112. EXAMINATIONS.

    (a) In General.--The Commissioner may conduct such examinations of 
a national insurer or national insurance agency as the Commissioner 
considers necessary.
    (b) Frequency.--
            (1) National insurers.--The Commissioner shall conduct a 
        full-scope, on-site examination of each national insurer not 
        less than once during any 24-month period.
            (2) National insurance agencies.--The Commissioner shall 
        conduct an examination of a national insurance agency in 
        response to a complaint or evidence that such national 
        insurance 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.
    (c) Access to People and Records.--
            (1) In general.--In the course of examining a national 
        insurer or national insurance agency, the Commissioner, upon 
        request, shall be given prompt and reasonable access to 
        officers, employees, agents, books, records, and documents of 
        such insurer or agency.
            (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 insurance agency is located for an order requiring 
        that such information be promptly provided.
            (3) Subpoena power.--In connection with examination of a 
        national insurer or national insurance agency, 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 or national 
                insurance agency;
                    (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 or national insurance agency 
                        is located; or
                            (ii) in which the witness resides or 
                        carries on business.

SEC. 113. REPORTS.

    Each national insurer and national insurance agency shall submit to 
the Commissioner such reports, containing such information and in such 
form, as the Commissioner may prescribe by regulation.

SEC. 114. ANNUAL ASSESSMENTS AND OTHER FEES.

    (a) In General.--The Commissioner may impose on national insurers, 
national insurance agencies, and national insurance producers an annual 
assessment and such other fees, including examination fees, as the 
Commissioner determines to be necessary and appropriate to fund the 
expenses of the Office, and to repay and loan to the Office provided 
under section 115.
    (b) Regulations.--The Commissioner shall, by regulation, establish 
a schedule for the annual assessment and other fees authorized in this 
section.
    (c) Treatment of Assessments and Fees.--
            (1) Deposits.--The Commissioner may deposit assessments and 
        fees collected under this section into any regular Government 
        depository or any State or national bank.
            (2) Government funds and apportionment.--Notwithstanding 
        any other provision of law, assessments and fees imposed under 
        this section shall not be considered government or public funds 
        or appropriated money, and shall not be subject to 
        apportionment for purposes of chapter 15 of title 31, United 
        States Code, or under any other authority.
    (d) Working Capital Fund.--The Commissioner may impose assessments 
and fees in excess of actual expenses for any given year, to maintain 
an appropriate working capital fund, provided that the Commissioner 
remits to the payers of such assessments and fees any funds collected 
in excess of what the Commissioner determines to be necessary to 
maintain such working capital fund.
    (e) Use of Funds.--The Commissioner may use the fees and 
assessments collected pursuant to this section to pay all operating 
costs of the Office, including the salary and administrative expenses 
of the Office.

SEC. 115. APPROPRIATIONS DURING START-UP PERIOD.

    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. Any such loan shall be 
repaid, in full (with interest at a rate set by the Secretary of the 
Treasury), from assessments imposed under the terms of section 114 not 
later than the date that is 30 years after the date of the 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.

SEC. 116. DISCLOSURE OF INFORMATION.

    (a) Regulations Required.--The Commissioner shall issue regulations 
for the disclosure of reports, applications, filings, correspondence, 
records, and other information prepared by, reported to, obtained by, 
or submitted to the Commissioner.
    (b) Supervisory Privilege.--The regulations 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. 117. ANTI-MONEY LAUNDERING COMPLIANCE.

    (a) Regulation Required.--The Commissioner shall, by regulation, 
require national insurers and national insurance agencies to establish 
and maintain procedures reasonably designed to assure and monitor 
compliance with the recordkeeping and reporting requirements of 
subchapter II of chapter 53 of title 31, United States Code, and 
implementing regulations issued by the Department of the Treasury, to 
the extent that those requirements apply to a national insurer or 
national insurance agency.
    (b) Minimum Procedures.--The regulations issued under subsection 
(a) shall require--
            (1) the establishment of internal controls to monitor 
        compliance with applicable requirements;
            (2) testing for compliance;
            (3) training of personnel; and
            (4) the designation of an individual or individuals 
        responsible for coordinating and monitoring compliance.

             Subtitle C--Enforcement Powers of Commissioner

SEC. 121. REVOCATION OR SUSPENSION OF CHARTER OR LICENSE.

    (a) Charter Revocation.--The Commissioner may order the revocation 
of the charter of a national insurer or national insurance agency if 
the Commissioner determines that such insurer or agency--
            (1) is engaged or has engaged in conduct that is hazardous 
        to the insurer or agency and an undue risk of loss to the 
        policyholders of such insurer;
            (2) is in a financial or other condition that is not 
        consistent with the continuation of existing operations; or
            (3) is violating or 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 insurer or agency; or
                    (C) written agreement entered into between the 
                insurer or agency and the Commissioner.
    (b) License Revocation.--The Commissioner may order the revocation 
of the license of a national insurance producer if the Commissioner 
determines that such producer--
            (1) is violating or has 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 license;
            (3) used fraudulent, coercive, or dishonest practices; or
            (4) demonstrated incompetence, untrustworthiness, or 
        financial irresponsibility as an insurance producer.
    (c) Suspension Order.--If the Commissioner, in the course of a 
charter or license revocation proceeding under this section, finds that 
a national insurer, national insurance agency, or national insurance 
producer poses an undue risk of loss to the policyholders of a national 
insurer as a whole, the Commissioner may order the suspension of the 
charter or license of such insurer, agency or producer, as applicable.
    (d) Notice.--If the Commissioner orders the revocation of a charter 
or a license under subsection (a) or (b), the Commissioner shall 
provide the national insurer, national insurance agency, or national 
insurance producer that is the subject of such revocation notice of 
such revocation. Such notice shall include--
            (1) a statement of the reasons for such revocation, 
        including any determination by the Commissioner under 
        subsection (a) or (b); and
            (2) a date and place for a hearing before the Commissioner 
        with respect to such revocation.
    (e) Hearing; Termination.--If, on the basis of the evidence 
presented at a hearing before the Commissioner (or any person 
designated by the Commissioner for such purpose), in which all issues 
shall be determined on the record pursuant to section 554 of title 5, 
United States Code, and the written findings of the Commissioner (or 
such person) with respect to such evidence (which shall be conclusive), 
the Commissioner finds an undue risk of loss to the policyholders of a 
national insurer as a whole or a violation specified in the notice 
given under subsection (d) has been established, the Commissioner may 
issue an order terminating the charter or license of the national 
insurer, national insurance agency, or national insurance producer 
effective as of a date subsequent to that finding.
    (f) Judicial Review.--
            (1) In general.--Any hearing provided for in this section 
        (other than the hearing provided for in subsection (e)) shall 
        be held in the Federal judicial district or in the territory in 
        which the home office of the national insurer, national 
        insurance agency, or national insurance producer is located 
        unless the party afforded the hearing consents to another 
        place, and shall be conducted in accordance with the provisions 
        of chapter 5 of title 5 of the United States Code. After such 
        hearing, and within 90 days after the Commissioner has notified 
        the parties that the case has been submitted to it for final 
        decision, it shall render its decision (which shall include 
        findings of fact upon which its decision is predicated) and 
        shall issue and serve upon each party to the proceeding an 
        order consistent with the provisions of this section. Judicial 
        review of any such order shall be exclusively as provided in 
        this subsection.
            (2) Appeal.--Any party to a proceeding under paragraph (1) 
        may obtain a review of any order issued pursuant to paragraph 
        (1) (other than an order issued with the consent of the 
        national insurer, national insurance agency, or national 
        insurance producer concerned) by the filing in the court of 
        appeals of the United States for the circuit in which the home 
        office of the national insurer, national insurance agency, or 
        national insurance producer is located, or in the United States 
        Court of Appeals for the District of Columbia Circuit, within 
        30 days after the date of service of such order, a written 
        petition for the order to be modified, terminated, or set 
        aside. The party filing such a petition shall transmit to the 
        Commissioner a copy of the petition and the Commissioner shall 
        file in the court the record in the proceeding, as provided in 
        section 2112 of title 28 of the United States Code. Review of 
        such proceedings shall be had as provided in chapter 7 of title 
        5 of the 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 of the United States Code.

SEC. 122. OTHER ENFORCEMENT POWERS.

    (a) In General.--The Commissioner may issue cease and desist 
orders, prohibition, suspension, removal orders, and impose civil money 
penalties upon a national insurer, national insurance agency, national 
insurance producer, and any insurer-affiliated party on the same 
grounds and the same terms and conditions applicable to the issuance of 
such orders by a Federal banking agency under section 8 of the Federal 
Deposit Insurance Act, as if a national insurer, national insurance 
agency, or national insurance producer was an insured depository 
institution, an insurer-affiliated party was an institution-affiliated 
party, the Commissioner was a Federal banking agency, and a 
policyholder was a depositor.
    (b) Holding Companies and Other Subsidiaries.--This section shall 
apply to a national insurance holding company and to any subsidiary of 
a national insurance holding company in the same manner as such section 
applies to a national insurer.

SEC. 123. INSURANCE FRAUD.

    (a) Investigations.--Director of the Division of Insurance Fraud 
may investigate suspected fraudulent insurance acts by national 
insurers, national insurance agencies, national insurance producers, 
and other persons.
    (b) Penalty.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), whoever commits a fraudulent insurance act or whoever 
        knowingly and intentionally interferes with the investigations 
        of a suspected fraudulent insurance act shall be subject to a 
        fine of not more than $500,000, imprisonment for not more than 
        5 years or both.
            (2) National insurers, agencies, insurance producers.--If 
        the person committing an offense referred to in paragraph (1) 
        is a national insurer, national insurance agency, national 
        insurance producer, or insurer-affiliated party, such person 
        shall be subject to a fine of not more than $1,000,000 per 
        violation per day, or imprisonment for not more than 10 years, 
        or both.
            (3) Low amounts.--If the person committing an offense 
        referred to in paragraph (1) is not a national insurer, 
        national insurance agency, national insurance producer, or 
        insurer-affiliated party and the offense is a fraudulent 
        insurance act involving an amount or value not exceeding 
        $5,000, such person shall be subject to a fine of not more than 
        $100,000, imprisonment for not more than one year, or both.
            (4) Additional penalties.--The penalties under this 
        subsection shall be in addition to any other penalties imposed 
        under this Act.
            (5) Restitution required.--Any person convicted of an 
        offense referred to in paragraph (1) shall 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.
    (c) Immunity From Liability.--
            (1) In general.--Except as provided under paragraph (2), 
        any person who shares, furnishes, discloses, receives, 
        collects, or uses information concerning a suspected, 
        anticipated, or completed fraudulent insurance act shall not be 
        liable to any person under any provision of law of the United 
        States or of any State or political subdivision of any State, 
        or under any contract or other legally enforceable 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) a Federal, State, or local enforcement or 
                regulatory official or an employee, agent, or 
                representative of such official;
                    (C) a self-regulatory organization or an employee, 
                agent, or representative of such organization;
                    (D) a person involved in the investigation 
                (including cooperation or participation in an 
                investigation), prevention, and detection of fraudulent 
                insurance acts or an employee, agent, or representative 
                of such person; or
                    (E) the NAIC or an employee, agent, or 
                representative of the NAIC.
            (2) Malice.--
                    (A) In general.--Paragraph (1) shall not apply with 
                respect to false statements made with actual malice by 
                a person to a person referred to in subparagraphs (A) 
                through (E) of paragraph (1).
                    (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.
    (d) Fraudulent Insurance Act Defined.--In this section, 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, one or more of the following:
            (1) Presenting, causing to be presented, or preparing with 
        knowledge or belief that it will be presented to or by a 
        national insurer, national insurance agency, State insurer, 
        State insurance agency, or insurance producer acting with 
        respect to a policy of insurance written by a national insurer 
        or State insurer, false information as part of, in support of, 
        or concerning a fact material to one or more of the following:
                    (A) An application for a new or renewal of an 
                insurance policy or reinsurance contract.
                    (B) The rating of a national insurer or State 
                insurer that writes an insurance policy or enters into 
                a reinsurance contract.
                    (C) A claim for payment or benefit pursuant to an 
                insurance policy or reinsurance contract.
                    (D) Premiums paid on an insurance policy or 
                reinsurance contract.
                    (E) Payments made in accordance with the terms of 
                an insurance policy or reinsurance contract.
                    (F) A document filed with the Commissioner.
                    (G) The financial condition of a national insurer 
                or State insurer.
                    (H) The formation, acquisition, merger, 
                consolidation, or dissolution of a national insurer or 
                national insurance agency.
                    (I) The issuance of evidence of insurance.
                    (J) The reinstatement of an insurance policy.
            (2) Solicitation or acceptance of new or renewal insurance 
        risks on behalf of a national insurer, national insurance 
        agency, State insurer, State insurance agency, or insurance 
        producer, or other persons engaged in the business of insurance 
        by a person who knows or should know that the national insurer 
        or State insurer is insolvent at the time of the transaction.
            (3) Removal, concealment, alteration, or destruction of the 
        records of a national insurer, national insurance agency, State 
        insurer, State insurance agency, or insurance producer.
            (4) Transaction of the business of insurance in violation 
        of laws requiring a charter or license under this Act.
            (5) Attempting to commit, aiding or abetting in the 
        commission of, or conspiracy to commit the acts or omissions 
        specified in this subsection.

SEC. 124. 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.--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.

SEC. 125. 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) Required content.--Rules required by this subsection 
        shall 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 standards established 
        pursuant to section 312 of this Act.
    (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.
            (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.

TITLE II--SYSTEMIC RISK REGULATION, COORDINATING COUNCIL FOR FINANCIAL 
                  REGULATORS, INTERNATIONAL AGREEMENTS

SEC. 201. SYSTEMIC RISK REGULATION.

    (a) Delegation of Authority.--Not later than 90 days after the date 
of enactment of this Act, the President shall designate a systemic risk 
regulator for covered institutions. In making this designation the 
President shall consult with the Chairman of the Senate Committee on 
Banking, Housing and Urban Affairs, and the House Committee on 
Financial Services, and shall designate a Federal agency, other than 
the Office of National Insurance, that has experience in financial 
regulation and supervision as the systemic risk regulator for covered 
institutions.
    (b) Powers of Systemic Risk Regulator.--Notwithstanding any other 
provision of law, the agency designated pursuant to subsection (a) 
may--
            (1) request information on the activities and operations of 
        a covered institution, or any affiliate of a covered 
        institution, from such institution or such affiliate, and from 
        the Office or a State insurance authority responsible for 
        supervising such covered institution, as applicable;
            (2) participate with the Office or a State insurance 
        authority, as applicable, in an examination of a covered 
        institution and any affiliate of such covered institution;
            (3) if such agency determines that the activities of a 
        covered institution, any affiliate of a covered institution, 
        any category of covered institutions, or any product or service 
        offered by a covered institution is having, or would have, 
        serious adverse effects on economic conditions or financial 
        stability, recommend corrective action to the Commissioner or a 
        State insurance authority, including recommendations to--
                    (A) restrict or prohibit the covered institution, 
                any affiliate of the covered institution, or any 
                category of covered institutions from engaging in such 
                activity or practice or offering such product or 
                service; or
                    (B) take any other action that the agency deems 
                appropriate to mitigate or avoid the adverse effects of 
                such activity, practice, product or service;
            (4) issue a rule or order to address the activities that 
        are the subject of a recommendation made pursuant to paragraph 
        (3), if--
                    (A) the Commissioner or State insurance authority 
                fail to implement corrective actions within a 
                reasonable period of time, as determined by such 
                agency; and
                    (B) the Coordinating Council for Financial 
                Regulators established in section 202 determines, by a 
                two-thirds vote of its membership, that such corrective 
                action is necessary to mitigate or avoid an impending 
                serious adverse effect on economic conditions or 
                financial stability in the United States; and
            (5) in consultation with the Commissioner--
                    (A) determine if a covered institution is 
                systemically important; and
                    (B) if such covered institution is determined to be 
                systemically important, determine if such covered 
                institution should be required to be chartered under 
                title III of this Act.
    (c) Access to Information and Confidentiality.--
            (1) Court order.--If the agency designated pursuant to 
        subsection (a) is not given prompt and reasonable access to 
        officers, employees, agents, books, records and documents of a 
        covered institution, or any affiliate of a covered institution, 
        such agency may apply to the United States district court for 
        the judicial district in which the main office of the covered 
        institution is located for an order requiring that such access 
        be promptly provided.
            (2) Confidentiality.--Information provided or obtained 
        under the terms of paragraph (2) or (3) of subsection (b) shall 
        be treated as confidential supervisory information and exempt 
        from the requirements of section 552 of title 5, United States 
        Code.
    (d) Judicial Review.--Any covered institution or affiliate of a 
covered institution that is the subject of an order issued pursuant to 
this section may obtain review of such order in the United States Court 
of Appeals within any circuit where such institution or such affiliate 
has its principal place of business, or in the Court of Appeals in the 
District of Columbia, by filing in the court, within 30 days of after 
issuance of such order, a petition praying that the order be set aside. 
Such covered institution or affiliate shall transmit to the agency 
designated pursuant to subsection (a) a copy of such petition and the 
agency shall file in the court the record made before the agency, 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, or modify the order and to require the agency to take such 
action with regard to the matter under review as the court deems 
proper. The findings of the agency as to the facts, if supported by 
substantial evidence, shall be conclusive.
    (e) Costs.--The agency designated pursuant to subsection (a) shall 
recover all direct and indirect costs associated with the exercise of 
its authority under this section through the imposition of an 
assessment on each covered institution that is equal to the product 
of--
            (1) an assessment rate established by the agency, by 
        regulation; and
            (2) the amount of the covered institution's average total 
        assets during the preceding year.
    (f) Report to Congress and GAO Review.--
            (1) Report to congress.--The agency designated pursuant to 
        subsection (a) shall provide a written report to Congress of 
        any action or determination made under paragraph (3), (4), or 
        (5) of subsection (b), and an explanation of the basis for such 
        determination.
            (2) GAO review.--The Comptroller General of the United 
        States shall review and report to Congress on any determination 
        under paragraph (3), (4), or (5) of subsection (b), including 
        the basis for the determination and the purpose for which any 
        action was taken.
    (g) Covered Institution Defined.--In this section, the term 
``covered institution'' means a national insurer and any insurance 
company organized and supervised under State law.

SEC. 202. COORDINATING COUNCIL FOR FINANCIAL REGULATORS.

    (a) Establishment and Purpose.--There is established the 
Coordinating National Council for Financial Regulators (in this section 
referred to as the ``Council'') to serve as a forum for financial 
regulators to collectively identify and consider issues related to the 
regulation and supervision of financial services firms, including the 
stability and integrity of financial markets, investor and consumer 
protection, the efficiency and effectiveness of regulation and 
supervision, and other matters of mutual concern.
    (b) Functions of the Council.--
            (1) Duties.--The Council shall--
                    (A) monitor and measure the health and 
                competitiveness of the financial services industry in 
                the United States, including its component segments;
                    (B) develop early warning systems to detect 
                potential points of weakness or strains in financial 
                markets;
                    (C) recommend coordinated actions for national and 
                State financial regulators and financial services 
                firms, especially in times of market stress or 
                financial crisis;
                    (D) develop model supervisory policies for national 
                and State financial regulators; and
                    (E) as necessary, make determinations referred to 
                in section 201(b)(4)(B).
            (2) Limitation.--Except as provided in paragraph (1)(E), 
        the Council shall not have any independent supervisory or 
        regulatory authority.
    (c) Composition.--The Council shall be composed of--
            (1) the Secretary of the Treasury, who shall serve as the 
        chair of the Council;
            (2) the Chairman of the Board of Governors of the Federal 
        Reserve System;
            (3) the Chairman of the Securities and Exchange Commission;
            (4) the Chairman of the Commodities Futures Trading 
        Commission;
            (5) the Comptroller of the Currency;
            (6) the Director of the Office of Thrift Supervision;
            (7) the Chairman of the Federal Deposit Insurance 
        Corporation;
            (8) the Commissioner of National Insurance;
            (9) an individual appointed by the President, by and with 
        the advice and consent of the Senate, who is knowledgeable in 
        State regulation of depository institutions and other State 
        licensed lenders;
            (10) an individual appointed by the President, by and with 
        the advice and consent of the Senate, who is knowledgeable in 
        State regulation of the business of insurance; and
            (11) an individual appointed by the President, by and with 
        the advice and consent of the Senate, who is knowledgeable in 
        State regulation of securities activities.
    (d) Conditions Applicable to Appointed Members of the Council.--
            (1) Consultation.--In making the appointments under 
        paragraphs (9), (10), and (11) of subsection (c), the President 
        shall consult with the Conference of State Bank Supervisors, 
        the National Association of Insurance Commissioners, and the 
        North American Securities Administrators Association, or any 
        successor organizations formed to represent the interests of 
        State banking, insurance, and securities regulators.
            (2) Term and vacancy.--Members appointed under paragraphs 
        (9), (10), and (11) of subsection (c) shall serve for a term of 
        5 years. A vacancy in the Council of a member appointed under 
        one of such paragraphs shall be filled in the same manner in 
        which the original appointment was made. The member appointed 
        to fill the vacancy shall be appointed only for the remainder 
        of the term of the preceding member.
            (3) Travel expenses.--Members appointed under paragraphs 
        (9), (10), and (11) of subsection (c) shall receive travel 
        expenses, including per diem in lieu of subsistence, in 
        accordance with applicable provisions under subchapter I of 
        chapter 57 of title 5, United States Code.
            (4) Prohibition on financial interests.--A member appointed 
        under paragraph (9), (10), or (11) of subsection (c) may not 
        have a direct financial interest in any financial services 
        firm.
    (e) Meetings.--The Council shall meet at least every 90 days upon 
the call of the Chair. Each member of the Council (other than the 
members appointed under paragraphs (9), (10), and (11) of subsection 
(c)) may designate a senior policymaking official to represent such 
member at a meeting of the Council, as necessary and appropriate.
    (f) Consultation.--The Council shall consult, as appropriate, with 
major market participants, the various exchanges, clearinghouses, self-
regulatory bodies, trade associations and others, and may seek private 
sector solutions to issues whenever possible.
    (g) Information Sharing.--The members of the Council shall, to the 
extent permitted by law, share information as may be necessary to 
fulfill the functions of the Council.
    (h) Annual Report.--The Council shall submit an annual report to 
the President, Congress, and the governors and legislatures of each 
State on its activities.
    (i) Administrative Support.--The Secretary of the Treasury shall 
provide the Council with such administrative support services as may be 
necessary for the performance of its functions.
    (j) Authorization.--There is authorized to be appropriated such 
funds as may be necessary to carry out this section.

SEC. 203. INTERNATIONAL AGREEMENTS.

    (a) In General.--The Commissioner may engage in international 
efforts to secure bilateral and multilateral agreements with foreign 
insurance regulators and regional and global regulatory organizations 
in order to--
            (1) promote the stability and integrity of insurance 
        markets;
            (2) encourage open and fair competition in such markets; 
        and
            (3) improve the quality and uniformity of insurance 
        supervision and regulation internationally and provide the 
        regulation of cross-border provisions of insurance and 
        reinsurance services.
    (b) Technical Assistance.--The Commissioner may provide technical 
assistance to, and cooperation with, foreign insurance regulators and 
regional and global regulatory organizations, including the development 
and implementation of international regulatory standards for insurance, 
and the development and implementation of bilateral and multilateral 
mutual recognition agreements on the licensing of insurers and 
insurance producers.
    (c) Consultation.--In exercising the authority granted under this 
section, the Commissioner shall consult and cooperate with the 
Executive Office of the President and the United States Trade 
Representative.

TITLE III--NATIONAL INSURANCE COMPANIES AND NATIONAL INSURANCE AGENCIES

            Subtitle A--Organization, Chartering, and Powers

SEC. 301. ORGANIZATION AND CHARTERING.

    (a) Charters.--
            (1) In general.--The Commissioner shall, under such 
        regulations as the Commissioner prescribes, issue charters to 
        and provide for the organization of--
                    (A) national insurers in stock, mutual, reciprocal, 
                or fraternal form; and
                    (B) national agencies as corporations, 
                partnerships, limited liability companies, or in other 
                forms recognized under State law.
            (2) National insurers.--A charter for a national insurer 
        issued under paragraph (1) may limit such national insurer to a 
        specified line of insurance and shall only be issued for 
        property and casualty insurance, life insurance, or the 
        reinsurance of property and casualty insurance and life 
        insurance. A national insurer may only provide insurance for 
        the lines of insurance for which such insurer has been issued a 
        charter under such paragraph.
            (3) National agencies.--A charter may be issued under 
        paragraph (1) to a national insurance agency that sells, 
        solicits, or negotiates property and casualty insurance, life 
        insurance, or the reinsurance of property and casualty 
        insurance and life insurance. A national insurance agency may 
        sell, solicit, or negotiate lines of insurance other than those 
        for which such national insurance agency has been issued a 
        charter under paragraph (1) in accordance with applicable State 
        laws.
    (b) Chartering Criteria.--In determining whether to issue a charter 
for a national insurer or national insurance agency, the Commissioner 
shall consider the character and competency of the parties seeking the 
charter, and the financial resources and future prospects of the 
proposed national insurer or proposed national insurance agency.
    (c) Licensing of Non-United States Insurers.--
            (1) In general.--A non-United States insurer may transact 
        insurance in the United States through a United States branch 
        by chartering the United States branch to do business as a 
        national insurer under this Act, under such regulations as the 
        Commissioner may prescribe.
            (2) Chartering criteria.--In carrying out subsection (b) 
        with respect to a non-United States insurer, the Commissioner 
        may take into account the nature of the insurance or 
        reinsurance business that the non-United States insurer 
        proposes to conduct through a United States branch and may give 
        appropriate recognition to the capital and other assets 
        maintained by the non-United States insurer in a jurisdiction 
        other than the United States.
            (3) Other applicable laws.--Nothing in this section shall 
        be construed to prohibit a non-United States insurer from doing 
        business as an insurer without a charter under this Act on any 
        basis permitted under applicable State laws or an international 
        agreement.
            (4) Nondiscrimination.--
                    (A) In general.--Except as provided in this 
                section, the Commissioner may not impose any condition 
                for the issuance of a charter under this section to a 
                national insurer solely because the national insurer 
                is--
                            (i) a subsidiary of a non-United States 
                        person;
                            (ii) partially owned by a non-United States 
                        person; or
                            (iii) a United States branch of a non-
                        United States insurer.
                    (B) Exception.--Notwithstanding subparagraph (A), 
                the Commissioner may impose conditions for the issuance 
                of a charter under this section that are different from 
                those imposed on other national insurers if--
                            (i) the conditions attached are contained 
                        in the charter under which the national insurer 
                        chooses to operate; and
                            (ii) 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.
    (d) No Delegation Permitted.--The Commissioner may not delegate the 
authorities of the Commissioner under this section to any insurance 
self-regulatory organization.

SEC. 302. CORPORATE GOVERNANCE.

    (a) Main Office.--A national insurer or national insurance agency 
may designate any office at which it conducts insurance operations as 
its main office, and for purposes of jurisdiction, a national insurer 
or national insurance 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.
    (b) Applicable Law.--A national insurer or national insurance 
agency may elect to follow the corporate governance procedures of the 
law of the State in which the main office of the such insurer or agency 
is located, the law of the State in which a company that controls the 
insurer or agency is incorporated, title 8 of the Delaware Code 
(Delaware General Corporation Law), r the Model Business Corporation 
Act of the American Bar Association. A national insurer or national 
insurance agency shall designate in its bylaws the body of law 
selected.
    (c) Independent Audit Committee for National Insurers.--
            (1) In general.--Each national insurer and national 
        insurance agency shall establish an audit committee of the 
        board of directors of such insurer or such agency, which shall 
        be composed entirely of outside directors who are independent 
        of management of such insurer or such agency.
            (2) Satisfaction.--The requirement described in paragraph 
        (1) shall be satisfied if a company that controls a national 
        insurer or national insurance agency 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 such committee reviews the financial 
        statements of the national insurer or national insurance 
        agency.
    (d) Participating Policy Procedures.--
            (1) In general.--A national insurer in mutual form shall 
        elect to either adhere to participating policy procedures of 
        the relevant law of the State in which its main office is 
        located, or adhere to the participating policy procedures 
        established by the Commissioner under paragraph (2).
            (2) Regulations.--The Commissioner shall, by regulation, 
        establish participating policy procedures, as the Commissioner 
        determines to be appropriate to carry out paragraph (1).
    (e) Consumer Liaison.--
            (1) In general.--Each national insurer and national 
        insurance agency shall appoint a liaison to serve consumers and 
        address complaints or disputes.
            (2) Procedures.--Each national insurer and national 
        insurance agency shall establish policies and procedures 
        designed to reasonably ensure fair and expeditious handling of 
        consumer complaints and disputes.
            (3) Regulations.--The Commissioner shall issue regulations 
        governing the standards for the liaison referred to in 
        paragraph (1).

SEC. 303. CHARTER CONVERSIONS.

    (a) Conversion From State to National Charter.--
            (1) In general.--Notwithstanding any other provision of 
        law, the Commissioner may, pursuant to regulations issued by 
        the Commissioner, allow a State insurer to convert to a 
        national insurer and a State insurance agency to convert to a 
        national insurance agency.
            (2) Effect of conversion.--A State insurer or State 
        insurance agency that converts under this section 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.
            (3) Special authority.--The Commissioner may, subject to 
        such conditions as the Commissioner may prescribe by 
        regulation, permit a national insurer or national insurance 
        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 insurance agencies to the extent 
        the Commissioner determines is appropriate.
    (b) Conversion From National to State Charter.--
            (1) In general.--A national insurer may convert to a State 
        insurer and a national insurance agency may convert to a State 
        insurance agency in accordance with applicable State law if--
                    (A) such national insurer or such national 
                insurance agency notifies the Commissioner of the 
                intention to convert in accordance with such procedures 
                as the Commissioner may prescribe by regulation; and
                    (B) after conducting a review of such national 
                insurer or such national insurance agency, the 
                Commissioner approves the conversion.
            (2) Savings provision.--Nothing in this section or in the 
        conversion of a national insurer to a State insurer or a 
        national insurance agency to 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 insurance agency held or was 
        subject to immediately before the conversion.
    (c) No Delegation Permitted.--The Commissioner may not delegate any 
authority under this section to any insurance self-regulatory 
organization.

SEC. 304. POWERS.

    (a) In General.--
            (1) National insurer.--A national insurer may, pursuant to 
        such regulations as the Commissioner prescribes--
                    (A) engage in the sale, solicitation, negotiation, 
                and underwriting of property and casualty insurance 
                (other than title insurance), life insurance, and 
                reinsurance;
                    (B) establish and maintain one or more separate 
                accounts and allocate amounts to such accounts, and 
                establish and maintain one 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;
                    (C) hold and accumulate funds pursuant to funding 
                agreements;
                    (D) provide investment advice and investment 
                management services; and
                    (E) engage in all other insurance operations and 
                exercise all such incidental powers as shall be 
                necessary to carry on insurance operations.
            (2) National insurance agency.--A national insurance agency 
        may, pursuant to such regulations and the Commissioner 
        prescribes--
                    (A) engage in the sale, solicitation, and 
                negotiation of policies of insurance issued by any 
                national insurer or State insurer, and the sale, 
                solicitation and negotiation of surplus lines of 
                insurance and nonadmitted insurance for a nonadmitted 
                insurer; and
                    (B) 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.
    (b) Other Powers.--A national insurer or national insurance agency 
may, subject to such regulations as the Commissioner prescribes--
            (1) adopt and use a corporate seal, or a facsimile of it;
            (2) have perpetual succession until such time as it is 
        liquidated, dissolved, merged, or otherwise wound up in 
        accordance with applicable law;
            (3) adopt, amend, and repeal by-laws;
            (4) 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) 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 insurance 
        agency), and secure any of its obligations by mortgage or 
        pledge of any of its property, franchises, or income;
            (6) 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) lend money, invest, and reinvest its funds and receive 
        and hold real and personal property as security for repayment;
            (8) 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 insurance 
        agency would have power to conduct by itself, whether or not 
        such participation involves sharing or delegating control with 
        or to others;
            (9) elect or appoint directors, officers, employees, and 
        agents of the national insurer or national insurance agency, 
        define their duties, fix their compensation, and lend them 
        money and credit;
            (10) make donations and otherwise devote its resources for 
        the public welfare or for charitable, scientific, educational, 
        humanitarian, philanthropic, or religious purposes; and
            (11) engage in any other lawful activity that is necessary 
        or convenient to further its activities and affairs.
    (c) Subsidiaries.--No national insurer or national insurance agency 
may establish or acquire a subsidiary without prior notice to the 
Commissioner, and shall conduct the activities in accordance with 
regulations and orders of the Commissioner.
    (d) Other Corporate Transactions.--No national insurer or national 
insurance agency shall engage in mutual to stock conversions, stock to 
mutual conversions, mergers, acquisitions, asset transfers, and other 
similar corporate transactions without the prior approval of the 
Commissioner, and subject to regulations and orders of the 
Commissioner.
    (e) Prohibited Activities.--No national insurer or national 
insurance agency may engage in any activity that the Commissioner 
determines, by regulation or order, poses a serious risk to the 
solvency of a national insurer or national insurance agency, 
jeopardizes the interests of policyholders of a national insurer or 
national insurance agency, or otherwise is incompatible with the public 
interest.
    (f) Bulk Transfers.--
            (1) Bulk transfers authorized.--A national insurer may only 
        effect the following bulk transfers:
                    (A) A State insurer as the transferring insurer and 
                a permitted national insurer as the assuming insurer.
                    (B) A permitted national insurer as the 
                transferring insurer and a State insurer as the 
                assuming insurer.
                    (C) A national insurer as the transferring insurer 
                and a national insurer as the assuming insurer.
                    (D) A State insurer as the transferring insurer and 
                a national insurer that is not a permitted national 
                insurer as the assuming insurer.
                    (E) A national insurer that is not a permitted 
                national insurer as the transferring insurer and a 
                State insurer as the assuming insurer.
            (2) Commissioner approval.--
                    (A) In general.--A national insurer shall not 
                effect a bulk transfer as authorized under subparagraph 
                (A), (B), (C), or (E) of paragraph (1) without the 
                prior approval of the Commissioner, in accordance with 
                such regulations as the Commissioner shall prescribe.
                    (B) Standard of approval.--The Commissioner shall 
                approve a bulk transfer under subparagraph (B), 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.
            (3) Policyholder consent.--
                    (A) State insurer and permitted national insurer.--
                Notwithstanding any other provision of law, a national 
                insurer is not required to obtain the consent of 
                policyholders to effect a bulk transfer authorized 
                under subparagraph (A) or (B) of paragraph (1).
                    (B) Between national insurers or state insurer and 
                other national insurer.--Notwithstanding any other 
                provision of law, the Commissioner shall determine 
                whether a national insurer wishing to effect a bulk 
                transfer authorized under subparagraph (C) or (E) of 
                paragraph (1) is required to obtain the consent of 
                policyholders to effect such transfer and the form in 
                which such consent must be obtained.
            (4) 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.
            (5) State law.--
                    (A) Prohibition.--Except as provided in 
                subparagraph (B), a State may not--
                            (i) require a 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
                            (ii) prevent or significantly interfere 
                        with a bulk transfer effected pursuant to this 
                        section.
                    (B) Construction.--Subparagraph (A) shall not be 
                construed to prohibit any State from--
                            (i) collecting, reviewing, and taking 
                        action (including approval or disapproval) on 
                        applications and other documents or reports 
                        concerning a proposed bulk transfer authorized 
                        under--
                                    (I) subparagraph (B), (D), or (E) 
                                of paragraph (1) to which a State 
                                insurer (other than a permitted 
                                national insurer) domiciled in that 
                                State is a party; or
                                    (II) subparagraph (D) or (E) of 
                                paragraph (1) to which a State insurer 
                                (other than a permitted national 
                                insurer) doing business in that State, 
                                other than a State insurer domiciled in 
                                that State, is a party, if the review 
                                or action meets the standards set forth 
                                in subparagraph (C); or
                            (ii) requiring policyholder consent of a 
                        proposed bulk transfer permitted under 
                        paragraph (4) or (5) of subsection (b).
                    (C) Standards.--A review or action meets the 
                standards under this paragraph, if it--
                            (i) is based on standards that are not more 
                        onerous than those imposed by the Commissioner;
                            (ii) occurs within a reasonable time frame 
                        that advances the purposes of this section;
                            (iii) is made in close consultation and 
                        cooperation with the Commissioner;
                            (iv) is without bias or discrimination 
                        toward either the transferring insurer or the 
                        assuming insurer;
                            (v) serves a legitimate State interest; and
                            (vi) does not frustrate the proposed bulk 
                        transfer.
                    (D) Notice of failure.--If the Commissioner finds 
                that any State review or action under subparagraph 
                (B)(i) fails to meet any of the standards set forth in 
                subparagraph (C), the Commissioner may provide the 
                applicable State with notice of such failure and the 
                reasons for such failure.
            (6) Differential treatment prohibited.--A State may not 
        treat a national insurer or a State insurer entering into a 
        bulk transfer agreement with a national insurer or a State 
        insurer, or any affiliate or subsidiary of such insurer, 
        differently than any other insurer operating in that State.
            (7) No delegation permitted.--The Commissioner may not 
        delegate to any insurance self-regulatory organization any 
        authority conferred under this subsection with respect to any 
        bulk transfer involving a national insurer.
            (8) Definitions.--In this subsection:
                    (A) Assuming insurer.--The term ``assuming 
                insurer'' means the insurer that purchases or otherwise 
                acquires existing insurance policies from another 
                insurer by bulk transfer.
                    (B) Block of business.--The term ``block of 
                business'' means all those insurance policies of an 
                insurer under a particular policy form.
                    (C) Bulk transfer.--The term ``bulk transfer''--
                            (i) means the transfer by an insurer to 
                        another insurer of existing insurance policies 
                        constituting all or substantially all of one or 
                        more of its lines of business or blocks of 
                        business; and
                            (ii) 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 one 
                                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 two 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 one insurer to another under a 
                                single group insurance policy upon the 
                                request of the group policyholder.
                    (D) Permitted national insurer.--The term 
                ``permitted national insurer'' means--
                            (i) a State insurer that has recently 
                        converted to a national insurer under section 
                        303, as determined by the Commissioner; or
                            (ii) a national insurer that has been 
                        issued a charter under section 301 for a new 
                        line of insurance, as determined by the 
                        Commissioner.
                    (E) Transferred insurance policies.--The term 
                ``transferred insurance policies'' means the insurance 
                policies that are subject to the bulk transfer.
                    (F) 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.
    (g) Effect of State Law.--No State may prevent or restrict a 
national insurer or national insurance agency from exercising any power 
conferred by this section or by any regulation authorized by this 
section.

SEC. 305. CHARTERING COMMENCEMENT DATE.

    The Commissioner may not charter a national insurer or national 
insurance agency until the Commissioner notifies Congress that the 
Office is operational and that all regulations necessary to govern the 
organization, formation, operations, and supervision of such insurers 
and agencies have been issued in final or interim final form. The 
Commissioner shall provide a notification to Congress not later than 2 
years after the date of the enactment of this Act.

       Subtitle B--Financial, Policy and Market Conduct Standards

SEC. 311. FINANCIAL STANDARDS.

    The Commissioner shall establish, by regulation, standards for 
national insurers and national insurance agencies on--
            (1) accounting and disclosure;
            (2) auditing;
            (3) risk management;
            (4) internal controls;
            (5) investments;
            (6) capital and liquidity;
            (7) actuarial opinions;
            (8) reinsurance; and
            (9) such other matters as the Commissioner deems necessary 
        to ensure the financial stability and integrity of national 
        insurers and national insurance agencies.

SEC. 312. POLICY STANDARDS.

    (a) Policy Standards.--The Commissioner shall establish, by 
regulation, general policy requirements and requirements for different 
categories of policies issued by national insurers.
    (b) Filing Requirement.--No national insurer may issue a policy 
until the form of the policy has been filed with the Commissioner. The 
form shall be accompanied by written certification by an officer of the 
national insurer that the policy complies with requirements established 
under subsection (a).
    (c) Law Applicable.--
            (1) Law specified by parties.--The provisions of any 
        insurance policy or other product of a national life 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 life insurer is located;
                    (B) the jurisdiction in which the principal place 
                of business of the national life 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 life 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 under this subsection.
    (d) 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 requirements 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.
    (e) Rates, Rating Elements, and Price.--The Commissioner may not 
require a national insurer to use any particular rate, rating element, 
or price.

SEC. 313. MARKET CONDUCT STANDARDS.

    (a) Standards.--The Commissioner shall establish, by regulation, 
market conduct standards for national insurers, national insurance 
agencies, and national insurance producers that implement the model 
laws of the NAIC entitled ``Unfair Trade Practices Act'' and ``Unfair 
Claims Settlement Practices Act''.
    (b) Disclosure.--
            (1) In general.--Subject to paragraph (2), the Commissioner 
        shall require each policy issued by a national insurer to 
        include the following disclosure on the cover page:
            ``This policy has been issued by a national insurer, which 
        is supervised by the Office of National Insurance. If you have 
        any questions or complaints about this policy, you may contact 
        the Division of Consumer Affairs, Office of National Insurance, 
        ____.''.
            (2) Address.--The disclosure required under paragraph (1) 
        shall, in place of the blank at the end, include the 
        appropriate address, toll-free number, and Internet address of 
        the Division of Consumer Affairs for the office of the Division 
        located in the State in which the policyholder resides.

SEC. 314. GENERAL PRINCIPLES.

    (a) General Principles.--The financial, policy, and market conduct 
standards issued by the Commissioner pursuant to this subtitle shall--
            (1) promote the stability and integrity of national 
        insurers and national insurance agencies;
            (2) protect policyholders and other consumers and 
        investors; and
            (3) encourage innovation and competition by national 
        insurers and national insurance agencies.
    (b) NAIC Standards.--In establishing the financial, policy, and 
market conduct standards required by this subtitle, the Commissioner 
shall take into consideration standards, models, practices, and 
instructions established by the NAIC.

                       Subtitle C--State Taxation

SEC. 321. STATE TAXATION OF NATIONAL INSURERS.

    (a) State Taxation Rule.--Except as provided in subsection (b) and 
section 605(b), 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 the power to impose an 
insurance retaliatory tax on any national insurer, unless--
            (1) for any tax purpose for which the 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.
            (3) Change in domicile.--A national insurer may change its 
        State of domicile, with the approval of the Commissioner, to 
        any other State in accordance with paragraph (1).
    (d) Status of National Insurer.--For purposes of State taxation, 
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. 322. STATE TAXATION OF NATIONAL INSURANCE AGENCIES.

    (a) State Taxation Rule.--A national insurance 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 insurance agency is considered 
domiciled pursuant to subsection (b).
    (b) State of Domicile.--For purposes of this section, the State of 
domicile of a national insurance agency shall be deemed to be the State 
in which the principal place of business of the national insurance 
agency in the United States is located.
    (c) Status of National Insurance Agency.--For purposes of State 
taxation, except as provided in this section, a national insurance 
agency 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 
insurance agency under this Act.

SEC. 323. STATE TAXATION OF NONADMITTED AND SURPLUS LINES OF INSURANCE.

    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 a tax, fee, assessment, or other 
charge imposed on an insured, either directly or through a producer, 
that is based upon any payment made as consideration for nonadmitted 
insurance or surplus lines insurance, and any other compensation given 
in consideration for a contract of insurance.

                 TITLE IV--NATIONAL INSURANCE PRODUCERS

SEC. 401. LICENSING OF NATIONAL INSURANCE PRODUCERS.

    (a) Authority.--The Commissioner may license an individual person 
as a national insurance producer.
    (b) Requirements for Sale of National Insurance.--An individual may 
sell, solicit, or negotiate insurance for a national insurer only if--
            (1) such individual--
                    (A) is licensed by the Commissioner under 
                subsection (a); and
                    (B) is--
                            (i) an agent or employee of a national 
                        insurer or a national insurance agency; or
                            (ii) self-employed and not affiliated with 
                        another national insurance producer, as 
                        determined by the Commissioner; or
            (2) such individual is licensed as an insurance producer 
        under the laws of a State and sells, solicits, or negotiates 
        such insurance to persons in such State.
    (c) Scope of License.--
            (1) In general.--A national insurance producer may--
                    (A) sell, solicit, or negotiate insurance in any 
                State for a national insurer or a State insurer;
                    (B) sell, solicit, or negotiate surplus lines of 
                insurance and nonadmitted insurance for a non-admitted 
                insurer; and
                    (C) exercise all such incidental powers as shall be 
                necessary to carry out the activities referred to in 
                subparagraphs (A) and (B), including claims adjustments 
                and settlement, risk management, employee benefits 
                advice, retirement planning, and any other insurance-
                related consulting activities.
            (2) Limitations.--The Commissioner may limit a license to 
        one or more specified lines or types of insurance.
    (d) Qualifications.--The Commissioner shall, by regulation, specify 
educational and examination requirements for obtaining a national 
insurance producer license, and may impose different requirements for 
different lines or types of insurance.

SEC. 402. SUPERVISION AND EXAMINATION.

    (a) Examinations.--
            (1) In general.--The Commissioner may examine a national 
        insurance producer to assess the producer's compliance with 
        this Act and the regulations issued pursuant to this Act.
            (2) Mandatory examinations.--The Commissioner shall provide 
        for the examination of a national insurance producer in 
        response to a complaint or any evidence that such 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 national 
                insurance producer license; or
                    (C) any written agreement entered into with the 
                Commissioner.
    (b) Reports.--The Commissioner may require a national insurance 
producer to make such reports, containing such information and in such 
form, as the Commissioner may prescribe by regulation.
    (c) Powers.--The powers authorized the Commissioner in section 121 
shall apply to reports by and examinations of national insurance 
producers.
    (d) Limitation on Liability.--
            (1) In general.--Subject to paragraph (2), no civil 
        liability shall be imposed on and no cause of action shall 
        arise from a national insurer or national insurance agency, an 
        insurer-affiliated party, or a national insurance producer 
        submitting a statement or information required under this Act, 
        or any regulation thereunder, or requested in writing by the 
        Commissioner relating to the conduct of a national insurance 
        producer.
            (2) Exception.--Paragraph (1) shall not apply with respect 
        to false statements made with actual malice.

SEC. 403. PRODUCER DATABASE.

    (a) In General.--The Commissioner shall develop and implement an 
electronic database consisting of information relating to national 
insurance producers and an electronic communication network that links 
the Commissioner with State insurance regulators and national insurers, 
national insurance agencies, and State insurers for an electronic 
exchange of such information.
    (b) Maintenance.--The Commissioner may delegate authority over the 
maintenance of each database described in subsection (a) to an 
insurance self-regulatory organization.

SEC. 404. DUTY TO SUPERVISE.

    (a) National Insurers.--Unless a national insurance producer is 
subject to the supervision of a national insurance agency under 
subsection (b), a national insurer shall supervise the sales and 
marketing practices of a national insurance producer with respect to 
the sale, solicitation, or negotiation of insurance policies of such 
national insurer, if--
            (1) such producer is an--
                    (A) employee of the national insurer; or
                    (B) agent of the national insurer; and
            (2) the 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.
    (b) National Insurance Agencies.--A national insurance agency shall 
supervise the sales and marketing practices of a national insurance 
producer with respect to the sale, solicitation, or negotiation of 
insurance policies, if such producer--
            (1) is an employee of such agency and the sale, 
        solicitation, and negotiation of insurance is within the scope 
        of employment of the producer; or
            (2) is an agent of such agency and the sale, solicitation, 
        and negotiation of insurance is pursuant to the terms of an 
        agreement between the agent and such agency.
    (c) Standards for Supervision.--The Commissioner shall, by 
regulation, establish standards for the duties under subsections (a) 
and (b). 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.
    (d) Exemption.--The Commissioner may, by regulation, exempt any 
class of persons from the duties under subsections (a) and (b), if the 
Commissioner determines that, given the nature of the business 
relationship with the national insurance producer, it would be 
unreasonable or inappropriate to require the class member to supervise 
such producer.
    (e) No Duty.--A national insurer or national insurance agency is 
not required to supervise the sales and marketing practices of persons 
other than those referred to in subsections (a) or (b).
    (f) Oversight of Independent National Insurance Producers.--
            (1) In general.--The Commissioner shall oversee the sales 
        and marketing practices of a national insurance producer with 
        respect to the sale, solicitation, or negotiation of insurance 
        policies if such producer is not a person subject to 
        supervision under subsection (a) or (b).
            (2) Standards and procedures.--The Commissioner shall, by 
        regulation, establish standards and procedures for the 
        oversight of the sales and marketing practices of national 
        insurance producers described in paragraph (1).

SEC. 405. RELATIONSHIP TO STATE LAW.

    (a) No State Restrictions.--No State may prevent or restrict a 
national insurer or national insurance agency from engaging in the acts 
described in subsection (b) or from engaging the services of a person 
who engages in such acts for the national insurer or national insurance 
agency, nor shall any State require that a person be licensed by reason 
of engaging in such acts for a national insurer or national insurance 
agency.
    (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.
            (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.
            (3) Binding or managing 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.
            (4) Directly or indirectly underwriting, collecting charges 
        or premiums, or adjusting or settling claim, in connection with 
        policies of insurance written by a national insurer.
    (c) Activities of National Insurance Producers.--No State may--
            (1) prevent or restrict a national insurance producer from 
        engaging in any activity authorized by this title; or
            (2) require such producer to be licensed by reason of 
        engaging in such activity on behalf of a national insurer, 
        national insurance agency, State insurer, or a United States 
        branch of a non-United States insurer.
    (d) Activities of State Insurance Producers.--No State may 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 or being employed by a national insurance agency.
    (e) International Agreements.--To the extent that a non-United 
States insurer is eligible to conduct a cross-border business pursuant 
to an international agreement, no State may--
            (1) prevent or restrict such non-United States insurer from 
        engaging in the activities authorized under such agreement; or
            (2) prevent or restrict a national insurance agency or 
        national insurance producer from engaging in any activity 
        authorized by this Act on behalf of such non-United States 
        insurer or require the agency or producer to be licensed by 
        reason of engaging in such activity for such non-United States 
        insurer.

SEC. 406. LICENSING COMMENCEMENT DATE.

    The Commissioner shall not license a national insurance producer 
until the Commissioner notifies Congress that the Office is operational 
and that all regulations necessary to govern the licensing, operations, 
and supervision of such producer have been issued in final or interim 
final form. The Commissioner shall provide a notification to Congress 
not later than 2 years after the date of the enactment of this Act.

       TITLE V--CHANGE IN CONTROL AND INSURANCE HOLDING COMPANIES

SEC. 501. CHANGE IN CONTROL.

    (a) In General.--
            (1) Limitation.--A person shall not, directly or indirectly 
        or through or in concert with one or more other persons, 
        acquire control of a national insurer until--
                    (A) such person has submitted a written notice as 
                described in subsection (f) to the Commissioner of the 
                intention of such person to acquire control of such 
                national insurer; and
                    (B) the expiration of the disapproval period and 
                all extensions of such period referred to in paragraph 
                (2).
            (2) Disapproval period.--
                    (A) In general.--The Commissioner may disapprove 
                the acquisition of effective control of a national 
                insurer by issuing notice to the person wishing to 
                acquire such effective control within 60 days of 
                receiving a notice referred to in paragraph (1)(A).
                    (B) Extension authorized.--The period for 
                disapproval under subparagraph (A) may be extended not 
                more than twice for a period of not more than 45 days 
                each time, if--
                            (i) the Commissioner determines that an 
                        acquiring person has not furnished all the 
                        information required under this section;
                            (ii) in the judgment of the Commissioner, 
                        any material information submitted is 
                        substantially inaccurate;
                            (iii) the Commissioner has been unable to 
                        complete the investigation of an acquiring 
                        person required under this section because of 
                        any delay caused by, or the inadequate 
                        cooperation of, such acquiring person; or
                            (iv) the Commissioner determines that 
                        additional time is needed--
                                    (I) to investigate and determine 
                                that no acquiring person has a record 
                                of failing to comply with the 
                                requirements of subchapter II of 
                                chapter 53 of title 31, United States 
                                Code; or
                                    (II) to analyze the safety and 
                                soundness of any plans or proposals 
                                described in subsection (f)(6) or the 
                                future prospects of the national 
                                insurer.
    (b) Investigation of Principals.--
            (1) In general.--Upon receiving a notice under subsection 
        (a)(1), the Commissioner shall--
                    (A) conduct an investigation of the competence, 
                experience, integrity, and financial ability of each 
                person named in a notice of a proposed acquisition as a 
                person by whom or for whom such acquisition is to be 
                made; and
                    (B) make an independent determination of the 
                accuracy and completeness of any information described 
                in subsection (f) with respect to such person.
            (2) Report.--The Commissioner shall prepare a written 
        report of any investigation under paragraph (1) that includes a 
        summary of the results of such investigation and shall make 
        such report publicly available in accordance with regulations 
        issued by the Commissioner for the publication of reports under 
        this paragraph.
    (c) Public Comment.--Upon receiving notice of a proposed 
acquisition, the Commissioner shall, unless the Commissioner determines 
that an emergency exists, within a reasonable period of time--
            (1) publish the name of the national insurer to be acquired 
        and the name of each person identified in such notice as a 
        person by whom or for whom such acquisition is to be made; and
            (2) solicit public comment on such proposed acquisition, 
        particularly from persons in the geographic area where the 
        national insurer is located, before final consideration of such 
        notice by the Commissioner.
    (d) Grounds for Disapproval.--The Commissioner may disapprove a 
proposed acquisition, if--
            (1) either the financial condition of any acquiring person 
        or the future prospects of the institution is such as might 
        jeopardize the financial stability of the national insurer or 
        prejudice the interests of the customers of such insurer;
            (2) the competence, experience, or integrity of any 
        acquiring person or of any of the proposed management personnel 
        indicates that it would not be in the interest of the customers 
        of the national insurer, or in the interest of the public to 
        permit such person to control the national insurer; or
            (3) any acquiring person neglects, fails, or refuses to 
        furnish the Commissioner with all the information required by 
        the Commissioner.
    (e) Notice of Disapproval, Hearing.--
            (1) Notice of disapproval.--Not later than 3 days after a 
        decision to disapprove a proposed acquisition under this 
        section, the Commissioner shall notify the acquiring person in 
        writing of the disapproval. Such notice shall provide a 
        statement of the basis for the disapproval.
            (2) Hearing.--
                    (A) In general.--Not later than 10 days after the 
                receipt of a notice of disapproval under paragraph (1), 
                a person may request a hearing before a United States 
                district court with jurisdiction on the proposed 
                acquisition.
                    (B) Standard of review.--A judge reviewing a notice 
                of disapproval under paragraph (1) shall determine 
                whether the decision of the Commissioner is reasonable.
            (3) Judicial review.--A person whose proposed acquisition 
        is disapproved after a hearing under paragraph (2) may obtain 
        review by the United States court of appeals for the circuit in 
        which the main office of the national insurer is to be acquired 
        is located, or the United States Court of Appeals for the 
        District of Columbia Circuit, by filing a notice of appeal in 
        such court within 10 days from the date of such order, and 
        simultaneously sending a copy of such notice by registered or 
        certified mail to the Commissioner. The Commissioner shall 
        promptly certify and file in such court the record upon which 
        the disapproval was based. The findings of the Commissioner 
        shall be set aside if found to be arbitrary or capricious or if 
        found to violate procedures established by this section.
    (f) Information.--A notice described in this subsection is a notice 
that includes such relevant information in such form as the 
Commissioner may require by regulation or by specific request in 
connection with a particular notice.

SEC. 502. REPORTS BY AND EXAMINATIONS OF INSURANCE HOLDING COMPANIES.

    (a) Reports.--Each national insurance holding company and each 
subsidiary of such company, other than a national insurer, shall file 
with the Commissioner such reports as may be required by the 
Commissioner. Such reports shall be made under oath, and shall be in 
such form and for such periods as the Commissioner may prescribe. Each 
report shall contain such information concerning the operations of such 
national insurance holding company and its subsidiaries as the 
Commissioner may require.
    (b) Examinations.--Each national insurance holding company and each 
subsidiary thereof shall be subject to such examinations as the 
Commissioner may prescribe. The cost of such examinations shall be 
assessed against and paid by such national insurance holding company.
    (c) Applicability to Non-United States Insurance Holding Companies 
and Subsidiaries.--Each non-United States insurance holding company and 
each non-United States subsidiary thereof shall be subject to the 
report and examination authority of this section only to the extent 
authorized by an applicable international agreement.
    (d) Reports and Examinations Filed With Other Agencies.--The 
Commissioner shall, to the fullest extent deemed feasible, use for the 
purposes of this section reports filed with and examinations made by 
other Federal agencies.
    (e) Powers.--The powers authorized for the Commissioner in section 
121 shall apply to reports by and examinations of insurance holding 
companies and their subsidiaries.

SEC. 503. ACTIVITIES OF INSURANCE HOLDING COMPANIES AND SUBSIDIARIES.

    (a) In General.--No national insurance holding company and no 
subsidiary of a national insurance holding company shall engage in any 
activity that the Commissioner determines poses a significant risk to 
the solvency of a national insurer, jeopardizes the interests of the 
policyholders of such insurer, or is incompatible with the public 
interest.
    (b) Determination and Notice for Corrective Action.--If the 
Commissioner determines that a national insurance holding company or 
subsidiary of a national insurance holding company is engaged, or has 
engaged, or the Commissioner has reasonable cause to believe is about 
to engage in an activity in violation of the terms of subsection (a), 
the Commissioner shall provide a written notice to such company or 
subsidiary, which shall specify the action or actions the company or 
subsidiary must take to correct the violation and a time period for 
taking such corrective action or actions. The issuance of a notice 
under this section does not prevent the Commissioner from taking any 
other enforcement action against the company or subsidiary.
    (c) Hearing.--
            (1) In general.--Not later than 10 days after the date of 
        receipt of a notice issued pursuant to subsection (b), a 
        national insurance holding company or subsidiary of such 
        company may request a hearing before a United States district 
        court with jurisdiction on the corrective action or actions 
        specified in the notice and the time period for taking such 
        action or actions.
            (2) Standard of review.--A judge reviewing a notice issued 
        pursuant to subsection (b) shall determine whether the decision 
        of the Commissioner is reasonable.
    (d) Judicial Review.--A national insurance holding company or 
subsidiary of a national insurance holding company that remains subject 
to a notice for corrective action following a hearing under subsection 
(c) may obtain review of the notice by the United States court of 
appeals for the circuit in which the main office of the national 
insurer to be acquired is located, or the United States Court of 
Appeals for the District of Columbia Circuit, by filing an appeal in 
such court not later than 10 days after the date on which the 
Commissioner has affirmed or modified the notice, and simultaneously 
sending a copy of such appeal by registered or certified mail to the 
Commissioner. The Commissioner shall promptly certify and file in such 
court the record upon which the notice was based. The determination of 
the Commissioner shall be set aside if found to be arbitrary or 
capricious.
    (e) Applicability to Non-United States Insurance Holding Companies 
and Subsidiaries.--Each non-United States insurance holding company and 
each non-United States subsidiary thereof shall be subject to the 
report and examination authority of this section only to the extent 
authorized by an applicable international agreement.

SEC. 504. CAPITAL, LIQUIDITY, DIVIDEND, OPERATIONAL, AND OTHER 
              STANDARDS.

    The Commissioner shall establish, by rule or order, capital, 
liquidity, dividend, operational, and any other standards for a 
national insurance holding company that the Commissioner deems 
appropriate to ensure the solvency and sound operation of each national 
insurance holding company.

SEC. 505. AFFILIATE TRANSACTIONS.

    (a) In General.--Transactions between a national insurer and any 
affiliate shall be subject to the following standards:
            (1) 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.
            (2) 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.
            (3) Expenses incurred and payment received shall be 
        allocated to the national insurer in conformity with customary 
        insurance accounting practices consistently applied.
            (4) 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.
            (5) 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.
    (b) Approval of Certain Transactions.--The Commissioner may, by 
regulation, specify certain transactions involving a national insurer 
and any affiliate 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 has 
either approved or failed to approve the transaction within a specified 
time period.

SEC. 506. RELATIONSHIP TO OTHER LAWS.

    (a) Permitted Affiliation.--A national insurer 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 one 
or more national insurers and affiliated State insurers are parties 
under which policies of insurance sold, solicited, negotiated, and 
underwritten by, and reinsurance assumed by, affiliated national 
insurers and State insurers are pooled.
    (c) Conflict With Other Federal Laws.--This title shall not be 
construed 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 savings 
and loan holding companies, as defined in section 10 of the Home 
Owners' Loan Act (12 U.S.C. 1467a).

SEC. 507. 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 an affiliate of a national 
insurance holding company.

 TITLE VI--CONSERVATORSHIP, RECEIVERSHIP, THE PAYMENT OF BENEFITS AND 
     CLAIMS TO POLICYHOLDERS, AND ASSESSMENTS ON NATIONAL INSURERS

SEC. 601. APPOINTMENT OF CONSERVATOR OR RECEIVER.

    (a) In General.--Notwithstanding any other provision of law, if any 
of the grounds under subsection (b) exist, the Commissioner may appoint 
a person as a conservator or receiver for a national insurer.
    (b) Grounds for Appointment.--The grounds for establishing a 
conservatorship or receivership 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) a violation of any provision of Federal or 
                State law; or
                    (B) a 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 order.--The national insurer has 
        willfully violated a cease-and-desist order.
            (5) Concealment.--The national insurer has concealed the 
        books, papers, records, or assets of the insurer, or has 
        refused to submit the books, papers, records, or affairs of the 
        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) Violation 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.

SEC. 602. ESTABLISHMENT OF THE NATIONAL INSURANCE GUARANTY CORPORATION.

    (a) Establishment.--There is established the National Insurance 
Guaranty Corporation.
    (b) Director.--The head of the National Insurance Guaranty 
Corporation shall be the Director of the National Insurance Guaranty 
Corporation, who shall be appointed by the Commissioner.
    (c) Nonprofit and Succession.--The Corporation shall be a nonprofit 
corporation and shall have succession until dissolved by an Act of 
Congress.
    (d) 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).

SEC. 603. PAYMENT OF CLAIMS TO POLICYHOLDERS OF NATIONAL INSURERS.

    (a) Life Insurance Policies.--If a national insurer is placed into 
receivership for purposes of liquidation, the Director of the 
Corporation shall pay the claims on life insurance policies issued by 
such insurer in a manner that is consistent with the terms and limits 
of the ``Life and Health Insurance Guaranty Association Model Act'' of 
the NAIC.
    (b) Property and Casualty Policies.--If a national insurer is 
placed into receivership for purposes of liquidation, the Director of 
the Corporation shall pay the claims of property and casualty insurance 
policies issued by such insurer in a manner that is consistent with the 
terms and limits of the ``Post-Assessment Property and Liability 
Insurance Guaranty Association Model Act'' of the NAIC.

SEC. 604. ASSESSMENTS OF NATIONAL INSURERS.

    (a) Assessments Authorized.--For the purpose of paying the claims 
of policyholders and other claims against a national insurer that is 
placed into receivership, the Director of the Corporation shall impose 
an assessment against all other national insurers in accordance with 
this section.
    (b) Notice and Imposition of Assessments.--
            (1) Assessments only to insurers in same line of 
        business.--
                    (A) In general.--The Director of the Corporation 
                shall only impose an assessment against a national 
                insurer if such national insurer is in the business of 
                providing the same type of insurance as the national 
                insurer that is placed into receivership.
                    (B) Lines of insurance.--In determining whether a 
                national insurer is in the business of providing the 
                same type of insurance as the national insurer that is 
                placed into receivership under subparagraph (A), the 
                Director may consider subsets of property and casualty 
                insurance or life insurance as different types of 
                insurance.
            (2) Written notice required.--The Director of the 
        Corporation shall provide each national insurer a written 
        notice of an assessment, and assessments shall be payable not 
        later than 30 days after the date of receipt of such notice.
            (3) Late payment.--A national insurer that fails to pay an 
        assessment when due shall be subject to an interest charge on 
        the assessment, as set by the Director of the Corporation.
            (4) Assessments not imposed until needed.--The Director of 
        the Corporation shall not impose an assessment upon a national 
        insurer until such funds are needed.
            (5) Amount of assessment.--Each national insurer shall be 
        assessed its share of all claims incurred by the receivership, 
        including administrative costs of the Director of the 
        Corporation, in an amount equal to the product of--
                    (A) an assessment rate established by the Director 
                of the Corporation by regulation; and
                    (B) the proportion that the net direct written 
                premiums of the insurer for the calendar year preceding 
                the assessment bears to the net direct written premiums 
                of all national insurers determined by the Commissioner 
                to be in the business of providing the same type of 
                insurance as the national insurer that is placed into 
                receivership under paragraph (1)(A) for the calendar 
                year preceding the assessment.
    (c) Abated or Deferred Assessments.--The Director of the 
Corporation may abate or defer, in whole or in part, an assessment 
imposed on a national insurer if payment of the assessment would 
endanger the ability of the insurer to fulfill its contractual 
obligations. In the event an assessment against a national insurer is 
abated or deferred, in whole or in part, the amount by which the 
assessment is abated or deferred may be assessed against all other 
national insurers, 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 
insurer shall pay all assessments that were deferred pursuant to a 
repayment plan approved by the Director of the Corporation.

SEC. 605. PARTICIPATION IN STATE GUARANTY ASSOCIATIONS.

    (a) In General.--A national insurer shall participate in the State 
guaranty association for a line of insurance in each State in which 
such insurer is doing business in such line of insurance, provided that 
no State may charge an assessment rate or otherwise treat a national 
insurer in a manner differently than such State treats a State insurer 
doing business in such State.
    (b) Taxation.--No State shall impose a 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 assessments allocable to such State in 
the same manner and to the same extent that a State insurer is allowed 
to recoup such assessments.

SEC. 606. REPORT TO CONGRESS.

    Not later than two years after the date of the enactment of this 
Act, the Director of the Corporation shall submit to Congress a 
recommendation on--
            (1) whether national insurers should continue to be members 
        of State guaranty associations;
            (2) whether State insurance commissioners should be given 
        the opportunity to require State insurers to be covered by the 
        National Insurance Guaranty Corporation instead of State 
        guaranty associations; and
            (3) whether policyholders of national insurers would be 
        better protected if assessments under section 604 were imposed 
        before such funds are necessary to make payments on claims 
        against a national insurer that is placed into receivership.

                  TITLE VII--MISCELLANEOUS PROVISIONS

SEC. 701. APPLICABLE LAW.

    (a) Inapplicability of State Law.--Except to the extent expressly 
provided in this Act, national insurers, national insurance agencies, 
and national 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.
    (b) No Discrimination.--No State may discriminate 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 insurance 
        agency chartered under this Act or a national insurance 
        producer licensed under this Act;
            (3) any affiliate of a national insurer, national insurance 
        agency, or a national 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 405(b) because of any dealing with a national 
        insurer, national insurance agency, a national insurance 
        producer, or an affiliate of a national insurer, national 
        insurance agency, or a national 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. 702. APPLICATION OF THE FEDERAL ANTITRUST LAWS.

    (a) In General.--Subject to 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 insurance agencies, and national 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 insurance agencies, and national 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 
        insurance agencies, and national insurance producers to the 
        extent that such insurers and producers are subject to State 
        law.
    (b) Exception.--Notwithstanding any other provision of law, section 
5 of the Federal Trade Commission Act (15 U.S.C. 45) shall not apply 
with respect to a national insurer, national insurance agency, or 
national insurance producer.
                                 <all>