1.Short title; table of
contents
(a)This Act may be cited as the National Insurance
Consumer Protection Act
.
(b)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.
2.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.
3.In this Act:
(1)The
term affiliate means any person that controls, is controlled by,
or is under common control with another person.
(2)The
term 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)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)The term business of insurance has the
meaning given such term in section 1033(f) of title 18, United States
Code.
(5)The
term Commissioner means the National Insurance Commissioner
appointed under section 101.
(6)The
term company means any corporation, partnership, business trust,
association, or similar organization.
(7)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)The
term Corporation
means the National Insurance Guaranty
Corporation established under section 601.
(9)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)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)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)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 formThe 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)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)The
term NAIC means the National Association of Insurance
Commissioners.
(16)National
insurance agencyThe term national insurance
agency
means a national insurance agency chartered under section
301.
(17)National
insurance holding companyThe term national insurance
holding company
means a company that controls a national insurer or
national insurance agency.
(18)National
insurance producerThe term national insurance
producer
means a national insurance agent or broker licensed under
section 401.
(19)The term national insurer
means a national
insurance company chartered under section 301.
(20)The term
national life insurer
means a national insurer that is chartered
under section 301 to sell, solicit, negotiate, and underwrite life
insurance.
(21)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)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)The
term Office means the Office of National Insurance established
under section 101.
(24)The
term person means any natural person, business entity,
governmental body or entity, voluntary organization, or similar
organization.
(25)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 insuranceThe 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)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)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)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 insuranceThe 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 insuranceThe 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)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)The term title insurer means a company
organized under the laws of a State for the purpose of conducting the business
of title insurance.
<enum>I</enum><header>Office of National
Insurance</header>
<subtitle id="H9BA09A4740454F22BD9F60B8A16E96B4"><enum>A</enum><header>Establishment of
office and appointment of National Insurance Commissioner</header>
<section id="HA1E71AE8DD434E358C05B133D8C915B2"><enum>101.</enum><header>Establishment
of office and appointment of National Insurance Commissioner</header>
<subsection id="HD6E8502D7228438D89FEA1AED2AA9A1E"><enum>(a)</enum><header>In
general</header><text>There is established in the Department of the Treasury
the Office of National Insurance.</text>
</subsection><subsection id="H83580CBE6DEA4CF08FD0C9561BF66A8B"><enum>(b)</enum><header>National
insurance commissioner</header>
<paragraph id="HABCB43AC743A469A8F0DF62059245CF6"><enum>(1)</enum><header>In
general</header><text>There is established the position of the National
Insurance Commissioner, who shall be the head of the Office.</text>
</paragraph><paragraph id="H4589F3A5A3784DCD8E745F3DA495FFF4"><enum>(2)</enum><header>Appointment</header><text>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.</text>
</paragraph><paragraph id="H965B6F2812EF47859B18026676E54E94"><enum>(3)</enum><header>Vacancy</header><text>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.</text>
</paragraph><paragraph id="HB83C5FEB27324CB2A37C8E58F42C1435"><enum>(4)</enum><header>Service after
term</header><text>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).</text>
</paragraph><paragraph id="H2F5E34C1C176479F8D13B510F94DA9FC"><enum>(5)</enum><header>Prohibition on
financial interests</header><text>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.</text>
</paragraph><paragraph id="H47F714824C094F1D99FFBA88FD6E939B"><enum>(6)</enum><header>General
oversight</header><text>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.</text>
</paragraph><paragraph id="H840A930E83E744D8BC69E4F652574924"><enum>(7)</enum><header>Executive
schedule</header><text>Section 5314 of title 5, United States Code, is amended
by adding at the end following new item:</text>
<quoted-block display-inline="no-display-inline" id="HC9C83638735144019CDE82B0B4503999" style="OLC"><list level="subsection">
<list-item>National Insurance
Commissioner.</list-item></list>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection></section><section id="H2D97C9823EFD4EC1A52B822B455DD8A6"><enum>102.</enum><header>Duties and
powers of the commissioner</header>
<subsection id="HF5B13003A13541FC9BAD1511A560031E"><enum>(a)</enum><header>Duties</header><text>The
Commissioner shall—</text>
<paragraph id="HD7B6732FD48E45859E11076FED1BA81A"><enum>(1)</enum><text>oversee the
organization, incorporation, operation, regulation, and supervision of national
insurers and national insurance agencies and shall issue charters therefore;
and</text>
</paragraph><paragraph id="H5ABD68105F874C719F6F1EDF3C8F097C"><enum>(2)</enum><text>license, regulate,
and supervise national insurance producers.</text>
</paragraph></subsection><subsection id="H9BEDBEBDFF7C4CE8B4AD93184FF9407D"><enum>(b)</enum><header>Incidental
powers</header><text>The Commissioner may exercise such incidental powers as
may be necessary to fulfill the duties specified in subsection (a).</text>
</subsection><subsection id="HD5B6E71E032043DB9F74935C26D7FFE9"><enum>(c)</enum><header>Rulemaking
powers</header><text>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.</text>
</subsection><subsection id="H5FD1D93990D94F5CA5BF341F69B87CC5"><enum>(d)</enum><header>Litigation
powers</header><text>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.</text>
</subsection><subsection id="H68D87BC5CAD8404D99310C101F522DDA"><enum>(e)</enum><header>Enforcement
powers</header><text>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.</text>
</subsection></section><section id="HEFF0C0E721A1486CA844D026715E82CF"><enum>103.</enum><header>Independence
and GAO audit</header>
<subsection id="H69B250D455004C94865877E0820D028E"><enum>(a)</enum><header>Independence of
congressional testimony and recommendations</header><text>Section 111 of Public
Law 93–495 (12 U.S.C. 250) is amended by inserting <quote>the National
Insurance Commissioner,</quote> after <quote>the Director of the Office of
Thrift Supervision,</quote>.</text>
</subsection><subsection id="H1E57033A39434001846AB81EC1CBD7CC"><enum>(b)</enum><header>GAO
Audit</header><text>The Commissioner shall make available to the Comptroller
General of the United States all books and records necessary to audit all of
the activities of the Office.</text>
</subsection></section><section id="HF9464EF9392A4201B578FF26E531D798"><enum>104.</enum><header>Office
personnel matters</header>
<subsection id="HC636A6D8A5AC44D1BEDD4866DC5D715B"><enum>(a)</enum><header>In
general</header><text>The Commissioner may employ such persons as are necessary
to carry out the provisions of this Act.</text>
</subsection><subsection id="H3DFA92799BFB4E5B8430036CEE7AD865"><enum>(b)</enum><header>Compensation</header><text>The
Commissioner shall fix the compensation and number of employees of the Office
without regard to chapter 51 or subchapter III of chapter 53 of title 5, United
States Code.</text>
</subsection><subsection id="H40D5376F0AAD43298D5E380045F9166F"><enum>(c)</enum><header>Additional
compensation</header><text>The Commissioner may provide additional compensation
and benefits to employees of the Office if the same type of compensation or
benefits are then being provided by any Federal banking agency or, if not then
being provided, could be provided by any such agency under applicable
provisions of law or regulation. In setting and adjusting the total amount of
compensation and benefits for employees of the Office, the Commissioner shall
consult, and seek to maintain comparability with, the Federal banking
agencies.</text>
</subsection><subsection id="H61AC05356605480DA6F9630494A0F56A"><enum>(d)</enum><header>Acting
commissioner</header><text>The Commissioner shall designate an employee of the
Office to serve as the Acting Commissioner during the absence or disability of
the Commissioner.</text>
</subsection><subsection id="H4BA0B6DADB024CF0A056EAEDB3CADD8E"><enum>(e)</enum><header>Delegation of
powers</header>
<paragraph id="HDD3FE414B5E84DCE983A682302FFE18D"><enum>(1)</enum><header>Employees and
others</header><text>Unless otherwise prohibited by this Act, the Commissioner
may delegate to any employee, representative, or agent any power of the
Commissioner.</text>
</paragraph><paragraph id="H26E64B5A103D4AD78A09E71957E92951"><enum>(2)</enum><header>Self-regulatory
organizations</header><text>Unless otherwise prohibited by this Act, the
Commissioner may, by regulation, delegate to any insurance self-regulatory
organization any power of the Commissioner.</text>
</paragraph></subsection></section><section id="H0036372241BD45A89A4AB8673E44DE79"><enum>105.</enum><header>Division of
Consumer Affairs</header>
<subsection id="H59D2C31F53AA46CD80BA160503ED2AF5"><enum>(a)</enum><header>Establishment</header><text>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.</text>
</subsection><subsection id="H4E7A2123DADC44389099CBC1FCE2EB02"><enum>(b)</enum><header>Function</header><text>The
Director of the Division of Consumer Affairs shall—</text>
<paragraph id="H5690DF90D1E741DBBE0F7FBAEC9C35E3"><enum>(1)</enum><text display-inline="yes-display-inline">act as a liaison between the Office and
consumers of insurance;</text>
</paragraph><paragraph id="HF31A2C91A0E74A8897495507460519D3"><enum>(2)</enum><text>receive questions
and complaints from consumer regarding acts or practices of national insurers,
national insurance agencies, and national insurance producers; and</text>
</paragraph><paragraph id="H7F83919AD9774FFD8249D3C884043FE0"><enum>(3)</enum><text>take actions to
resolve such questions and complaints.</text>
</paragraph></subsection><subsection id="H6374348961C2462BBFB749126D8F9F6F"><enum>(c)</enum><header>State offices;
call center</header><text>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.</text>
</subsection><subsection id="H927F20A1A9FD4B998F77071BFBC27A72"><enum>(d)</enum><header>Reports</header><text>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.</text>
</subsection></section><section id="HB57644C8BE5049A7B8C7FF00AFF80572"><enum>106.</enum><header>Division of
Insurance Fraud</header>
<subsection id="H3C05B3BFDBB845B292049D42E08FAECD"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">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.</text>
</subsection><subsection commented="no" id="H533EF96E845B48E0A6EBE9CD9C7D9703"><enum>(b)</enum><header>Duties</header><text>The
Director of the Division of Insurance Fraud shall carry out investigations of
insurance fraud in accordance with section 123.</text>
</subsection></section><section id="HF200212C3C354016B2253ECA3CE79B5A"><enum>107.</enum><header>Office of the
Ombudsman</header>
<subsection id="H2424F2AF5A28481BB308297D34544583"><enum>(a)</enum><header>Office of the
ombudsman</header><text>The Commissioner shall establish an Office of the
Ombudsman, and appoint an Ombudsman, who shall report to the
Commissioner.</text>
</subsection><subsection id="HF564A6C03A2C42208A054C878514813F"><enum>(b)</enum><header>Duty of the
ombudsman</header><text>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.</text>
</subsection><subsection id="HB054066B14C34A1399C408EE68EA44C5"><enum>(c)</enum><header>Powers of the
Ombudsman</header><text>The Ombudsman—</text>
<paragraph id="H3D5A37C4E55A4AF19B20F77CB9F3A750"><enum>(1)</enum><text>with the prior
consent of the Commissioner, may stay any appealable decision or action during
the resolution of an appealable matter; and</text>
</paragraph><paragraph id="H341D3FCED5964230B99C1D01C792F4EC"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="H0764C1B535254B0B96D12629BA20A8A7"><enum>(d)</enum><header>Appealable
matters</header><text>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—</text>
<paragraph id="H20E62DF85FF04357930A6132145E9A0D"><enum>(1)</enum><text>the appointment of
a receiver or conservator;</text>
</paragraph><paragraph id="H3A87E582266C4B77B8AA07D56549FBE6"><enum>(2)</enum><text>any preliminary
examination conclusions communicated to the regulated person before a final
examination report is issued;</text>
</paragraph><paragraph id="H80AC19AAC16046CFA4921362AA4F1876"><enum>(3)</enum><text>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;</text>
</paragraph><paragraph id="HE8F5239D7C6048DB82F93920CAF1E8CA"><enum>(4)</enum><text>any formal or
informal rulemaking pursuant to subchapter II of chapter 5 of title 5, United
States Code;</text>
</paragraph><paragraph id="HA58AC4D0CB5A4B4CADB56C60E3EB87FC"><enum>(5)</enum><text>any decision or
recommended decision following a formal adjudication conducted pursuant to
subchapter II of chapter 5 of title 5, United States Code; or</text>
</paragraph><paragraph id="H090B606CE0274569AC2205CA63FB98B3"><enum>(6)</enum><text>any request for
agency records pursuant to section 552 of title 5, United States Code (commonly
referred to as the Freedom of Information Act).</text>
</paragraph></subsection><subsection id="H1E774FDC6581426A9FA2DFB8EE4BF1C7"><enum>(e)</enum><header>Decisions of the
Ombudsman</header><text>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.</text>
</subsection><subsection id="HBF68526382934BCDBD993EC8B7377492"><enum>(f)</enum><header>Retaliation
prohibited</header><text>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.</text>
</subsection></section><section id="HE43002A3F18042D7B5BFBD059404AC8F"><enum>108.</enum><header>Insurance
self-regulatory organizations</header>
<subsection id="H2D79E887B2D348AA8A4B4092B9CD0DB4"><enum>(a)</enum><header>Authority of the
commissioner</header><text>The Commissioner may provide for the registration of
one or more insurance self-regulatory organizations, and supervise and regulate
any such organization.</text>
</subsection><subsection id="H33E0BED35C9B4D848DFCDCAEFDF09BED"><enum>(b)</enum><header>Authority of
registered insurance self-regulatory organization</header><text>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.</text>
</subsection></section><section id="H9448FAF9B5D74BFB9DB1932E640368B5"><enum>109.</enum><header>Relationship to
State law</header>
<subsection id="H1EACE309193F453B97E2F8E1D9CFE0E2"><enum>(a)</enum><header>In
general</header><text>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.</text>
</subsection><subsection id="H529DA93AEE074F879BBB1DDDB44F75C6"><enum>(b)</enum><header>Applicable State
laws</header><text>Notwithstanding subsection (a), a national insurers,
national insurance agencies, and national insurance producers shall be subject
to—</text>
<paragraph id="H289B165CB62A4BFCB2017056B1F619EA"><enum>(1)</enum><text>State unclaimed
property and escheat laws;</text>
</paragraph><paragraph id="H98EF43198B8E40E3806B6D0D68432C2C"><enum>(2)</enum><text>tax laws of a
State, in accordance with sections 321, 322, and 323;</text>
</paragraph><paragraph id="HA9FBF0ED4E0549DE9C0F016D571A3ECF"><enum>(3)</enum><text>State law relating
to participation in an assigned risk plan, mandatory joint underwriting
association, or any other mandatory residual market mechanism designed to make
insurance available to those unable to obtain insurance in the voluntary
market, except to the extent that such State law—</text>
<subparagraph id="H5F62F56C4107445CBD26FB82EF4F94C8"><enum>(A)</enum><text>relates to
participation in any voluntary joint underwriting association or similar
arrangement;</text>
</subparagraph><subparagraph id="HC210390CEB894E3393F36E88BAB9D588"><enum>(B)</enum><text>results in rates
in effect for an assigned risk plan, mandatory joint underwriting association,
or any other mandatory residual market mechanism that fail to cover the
expected value of all future costs associated with insurance policies written
by such residual market mechanism;</text>
</subparagraph><subparagraph id="H9D696899B637433DA86310C57A714105"><enum>(C)</enum><text>requires a
national insurer to use any particular rate, rating element, price, or form;
or</text>
</subparagraph><subparagraph id="H4D37FF72F246461DB62EDBD8CF2BA32F"><enum>(D)</enum><text>is inconsistent
with any provision of this Act;</text>
</subparagraph></paragraph><paragraph id="HECBF566A562A4B92B4EEAC6FAB1AE6A3"><enum>(4)</enum><text>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;</text>
</paragraph><paragraph id="HD2BDD7460EFA46008E332E8AA84EE1A9"><enum>(5)</enum><text>State insurance
law mandating the participation of insurers in an advisory or statistical
organization, except to the extent that such State law requires a national
insurer to use any particular rate, rating element, price, or form; and</text>
</paragraph><paragraph id="H0B8A81CFFD42453180600F6ACC8A447E"><enum>(6)</enum><text>State law relating
to participation in a workers’ compensation administration mechanism, except to
the extent that such State law is inconsistent with any provision of this
Act.</text>
</paragraph></subsection><subsection id="H93E14CDA623D478092AF26F555357188"><enum>(c)</enum><header>Definitions</header><text>In
this section:</text>
<paragraph id="H6F592230716C4570BD811D5F0C9CDE82"><enum>(1)</enum><header>Advisory or
statistical organization</header><text>The term <term>advisory or statistical
organization</term> does not include the National Association of Insurance
Commissioners.</text>
</paragraph><paragraph id="H4F96FC0FF7524E53957A29A5948AC075"><enum>(2)</enum><header>Compulsory
coverage</header><text>The term <term>compulsory coverage</term> does not
include any State statutory requirement other than those prescribing the
minimum extent of insurance protection afforded by a policy of
insurance.</text>
</paragraph><paragraph id="HD6581EDCAFF54BB7B1D036228D8BEE2C"><enum>(3)</enum><header>Mandatory
residual market</header><text>The term <term>mandatory residual market</term>
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.</text>
</paragraph></subsection></section></subtitle><subtitle id="H764CFC41634E4D249F750AE64C90401F"><enum>B</enum><header>Supervision of
national insurers and national insurance agencies</header>
<section commented="no" id="H22ACE1648FEC49C898661B7186ECE5F9"><enum>111.</enum><header>Prudential
supervision</header>
<subsection commented="no" id="H9AB72886881042AF82EB9EB7E3E8B5C8"><enum>(a)</enum><header>Sense of
Congress</header><text>It is the sense of Congress that the Commissioner
should—</text>
<paragraph commented="no" id="HCC5CED535C024D2998B23DF9DBD765AE"><enum>(1)</enum><text>promote an open
and continuous exchange of information between national insurers, national
insurance agencies, and national insurance producers and the Office; and</text>
</paragraph><paragraph commented="no" id="HEE26DE7F52F4454EA54FE97C5424FAF6"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection commented="no" id="H6983092CFB2F480AB92A91EB5E26C3E8"><enum>(b)</enum><header>Regulations</header><text>The
Commissioner shall issue regulations on prudential supervision to—</text>
<paragraph commented="no" id="H64C7927F9E3F47FF95CC6DB208EDB8EE"><enum>(1)</enum><text display-inline="yes-display-inline">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;</text>
</paragraph><paragraph commented="no" id="H088E7413AC934D36B60ACF53F0CF86B7"><enum>(2)</enum><text>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;</text>
</paragraph><paragraph commented="no" id="H39A8F35E362647D68F47035FE42DA36C"><enum>(3)</enum><text display-inline="yes-display-inline">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;</text>
</paragraph><paragraph commented="no" id="H17984FB5133E41DA9473549067B9B0D7"><enum>(4)</enum><text>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;</text>
</paragraph><paragraph commented="no" id="HF007BB40808D4A5397AC701B76A22E98"><enum>(5)</enum><text>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</text>
</paragraph><paragraph commented="no" id="H051E1C2D4CD14DBE98C2EDC4EA24B8C1"><enum>(6)</enum><text>specify the
Commissioner’s practices and procedures related to investigations, and provide
that the Commissioner shall—</text>
<subparagraph commented="no" id="H1A0F68E8F33C4E7D9489422A3DCBC034"><enum>(A)</enum><text>notify a national
insurer, national insurance agency, or national insurance producer within 10
days of completing an investigation; and</text>
</subparagraph><subparagraph commented="no" id="H4BF6941921DD4CD2A9A6A179986AEFA2"><enum>(B)</enum><text>review the status
of all open investigations on a semiannual basis and determine if such matter
should remain open or be closed.</text>
</subparagraph></paragraph></subsection></section><section id="H0CA8475AB61C4C9094FB32D5ACAB8F91"><enum>112.</enum><header>Examinations</header>
<subsection id="HD0BF03F8FA644B4D8A361DFE9693672B"><enum>(a)</enum><header>In
general</header><text>The Commissioner may conduct such examinations of a
national insurer or national insurance agency as the Commissioner considers
necessary.</text>
</subsection><subsection display-inline="no-display-inline" id="H88BF8E3DF2F945E99EE22BE610658AB0"><enum>(b)</enum><header>Frequency</header>
<paragraph id="H6F8F59437E90434AA3AA39DBBBA4DFDF"><enum>(1)</enum><header>National
insurers</header><text>The Commissioner shall conduct a full-scope, on-site
examination of each national insurer not less than once during any 24-month
period.</text>
</paragraph><paragraph id="HD68D4DF68E5F4FA1A2CFC3332F397F95"><enum>(2)</enum><header>National
insurance agencies</header><text>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—</text>
<subparagraph id="H6E64ED36B1B54323928B2D3E168D14F4"><enum>(A)</enum><text>a law, rule, or
regulation;</text>
</subparagraph><subparagraph id="H279EC3F00E194B8887C5D64D65DCEE76"><enum>(B)</enum><text>any condition
imposed in writing by the Commissioner in connection with issuing a license for
a Federally licensed insurance producer; or</text>
</subparagraph><subparagraph id="H679C8B0C73E042019E964EE11F42ABD6"><enum>(C)</enum><text>any written
agreement entered into with the Commissioner.</text>
</subparagraph></paragraph></subsection><subsection id="H4C0C435064E84E87BC9FD117DAE04660"><enum>(c)</enum><header>Access to people
and records</header>
<paragraph id="H6B97370C4E314CCBB0F3AED4112D7DF6"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="H181EC6FBD4B04106AA939BD86164A6F5"><enum>(2)</enum><header>Court
order</header><text>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.</text>
</paragraph><paragraph id="H6CA9D750547449689D8973E53B4A8324"><enum>(3)</enum><header>Subpoena
power</header><text>In connection with examination of a national insurer or
national insurance agency, the Commissioner may—</text>
<subparagraph id="H437D01CF8E7A4509833A9D6F7239BBA9"><enum>(A)</enum><text>administer oaths
and affirmations;</text>
</subparagraph><subparagraph id="H803FC3139C574D10AA4B1B0101904794"><enum>(B)</enum><text>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;</text>
</subparagraph><subparagraph id="HC74B97DCCD374BD5994FE36B372DD0B6"><enum>(C)</enum><text>issue subpoenas;
and</text>
</subparagraph><subparagraph id="H1B96A3743CD34AD28EFD927CDE1F26F4"><enum>(D)</enum><text>in order to
enforce a subpoena issued under subparagraph (C), apply to the United States
district court for the judicial district—</text>
<clause id="HB08F8106A5E84A0F8C64708ED3C77E01"><enum>(i)</enum><text>in
which the main office of the national insurer or national insurance agency is
located; or</text>
</clause><clause id="HA1AF5B7691D14F52BDCB0B305278DA80"><enum>(ii)</enum><text>in
which the witness resides or carries on business.</text>
</clause></subparagraph></paragraph></subsection></section><section id="HC26B21B1EBF241938C7D360B4EA029D1"><enum>113.</enum><header>Reports</header><text display-inline="no-display-inline">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.</text>
</section><section id="H5CA4DE3E32B440D58CB886AF382CEC25"><enum>114.</enum><header>Annual
assessments and other fees</header>
<subsection id="H312DBD2D3D0348DD88D0FF0E754DC2E5"><enum>(a)</enum><header>In
general</header><text>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.</text>
</subsection><subsection id="H33DE0CF5CF594D849F465773C60B5BE9"><enum>(b)</enum><header>Regulations</header><text>The
Commissioner shall, by regulation, establish a schedule for the annual
assessment and other fees authorized in this section.</text>
</subsection><subsection id="HA1FE037FAD9B441AAEB62AF5FBBE1A2F"><enum>(c)</enum><header>Treatment of
assessments and fees</header>
<paragraph commented="no" id="HAA805C36EA3C421598AAB47C8FDE7A93"><enum>(1)</enum><header>Deposits</header><text>The
Commissioner may deposit assessments and fees collected under this section into
any regular Government depository or any State or national bank.</text>
</paragraph><paragraph id="HAA02949535A34C4097EFA3A5DE5F526A"><enum>(2)</enum><header>Government funds
and apportionment</header><text>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.</text>
</paragraph></subsection><subsection id="HF243F329172448FDA7E4707E6E51F8C8"><enum>(d)</enum><header>Working capital
fund</header><text>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.</text>
</subsection><subsection id="H07620641B28D435E9BB39B1C049BEF08"><enum>(e)</enum><header>Use of
funds</header><text>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.</text>
</subsection></section><section id="HBBDC02DC95044392B8C6934FA6D69CFC"><enum>115.</enum><header>Appropriations
during start-up period</header><text display-inline="no-display-inline">The
Commissioner may borrow from the Secretary of the Treasury such funds as the
Commissioner determines to be necessary and appropriate to organize and begin
operations of the Office. 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.</text>
</section><section id="HE0B22C124B8B4692A436E5153E712FBF"><enum>116.</enum><header>Disclosure of
information</header>
<subsection id="HBB076904A66645BEB8BD57075C166E0A"><enum>(a)</enum><header>Regulations
required</header><text>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.</text>
</subsection><subsection id="HC73E53C4BDC44F8E8449B16312C019AC"><enum>(b)</enum><header>Supervisory
privilege</header><text>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.</text>
</subsection><subsection id="HFD6225D284984E5C9166ABB1917C1CDE"><enum>(c)</enum><header>Other
privileges</header><text>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.</text>
</subsection></section><section commented="no" id="H9387A68EDCC74BF4AA511FA4FACFF76E"><enum>117.</enum><header>Anti-money
laundering compliance</header>
<subsection commented="no" id="H4E4520C6240741B0949BF559672CC2FE"><enum>(a)</enum><header>Regulation
required</header><text>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.</text>
</subsection><subsection commented="no" id="H55DADBA6D72A46E197404C1A2DFA08B9"><enum>(b)</enum><header>Minimum
procedures</header><text>The regulations issued under subsection (a) shall
require—</text>
<paragraph commented="no" id="HB4598200D2064541AB8E944AACA83E46"><enum>(1)</enum><text>the establishment
of internal controls to monitor compliance with applicable requirements;</text>
</paragraph><paragraph commented="no" id="H44FC85710D7740669A521DD2C8E803D7"><enum>(2)</enum><text>testing for
compliance;</text>
</paragraph><paragraph commented="no" id="H667C4956183940438C0278CD7DB05347"><enum>(3)</enum><text>training of
personnel; and</text>
</paragraph><paragraph commented="no" id="HEF68B345B1BD4A4399BA852228BDC0E2"><enum>(4)</enum><text>the designation of
an individual or individuals responsible for coordinating and monitoring
compliance.</text>
</paragraph></subsection></section></subtitle><subtitle id="HB0D44DE3209545E49D4316343D819206"><enum>C</enum><header>Enforcement powers
of Commissioner</header>
<section id="HF98EBDCF4A4A4942B531A7BC2D8DA53C"><enum>121.</enum><header>Revocation or
suspension of charter or license</header>
<subsection id="HDA8232039CF049029AB280854150A9E5"><enum>(a)</enum><header>Charter
revocation</header><text>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—</text>
<paragraph id="H73E1CCD355144ABF8BB9BC637E1B037F"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="H99133F191EA64A8297DB763796CFDDD5"><enum>(2)</enum><text>is in a financial
or other condition that is not consistent with the continuation of existing
operations; or</text>
</paragraph><paragraph id="HC465C10626254468A23A61AA489ADF4F"><enum>(3)</enum><text>is violating or
has violated any—</text>
<subparagraph id="HF689C34BD2504716976924290657D3D5"><enum>(A)</enum><text>applicable law or
regulation;</text>
</subparagraph><subparagraph id="H24498522DFDF418198094C42BB48E52F"><enum>(B)</enum><text>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</text>
</subparagraph><subparagraph id="H4DF46331BF5947CCB109AB1FCA5BAB1B"><enum>(C)</enum><text>written agreement
entered into between the insurer or agency and the Commissioner.</text>
</subparagraph></paragraph></subsection><subsection id="H54A4851D7BA34B1EBB1BC97D0FB149E2"><enum>(b)</enum><header>License
revocation</header><text>The Commissioner may order the revocation of the
license of a national insurance producer if the Commissioner determines that
such producer—</text>
<paragraph id="HB3A41F2ED4A84288887C49262E4AB6AA"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="H0EBDA9913A584036A474FB13EC9A384E"><enum>(2)</enum><text>provided
incorrect, misleading, incomplete, or materially untrue information in an
application for a license;</text>
</paragraph><paragraph id="HCB851444F9164D93B21AE448E980D041"><enum>(3)</enum><text>used fraudulent,
coercive, or dishonest practices; or</text>
</paragraph><paragraph id="H27C47BBBEDE74D3196CED97083A3D434"><enum>(4)</enum><text>demonstrated
incompetence, untrustworthiness, or financial irresponsibility as an insurance
producer.</text>
</paragraph></subsection><subsection id="H558A3F6C4EDE4BF3801FAD1BD0BB1B07"><enum>(c)</enum><header>Suspension
order</header><text>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.</text>
</subsection><subsection id="H94BC61CDBEC0450DB9C136F9AD6433F6"><enum>(d)</enum><header>Notice</header><text>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—</text>
<paragraph id="H98B5CD450B484420A8387EFF302E7FF0"><enum>(1)</enum><text>a
statement of the reasons for such revocation, including any determination by
the Commissioner under subsection (a) or (b); and</text>
</paragraph><paragraph id="HBFB56958AE414DD88BC1C36AFF773679"><enum>(2)</enum><text>a
date and place for a hearing before the Commissioner with respect to such
revocation.</text>
</paragraph></subsection><subsection id="HAB2303E1E123431D95C6EAEB3C95D78C"><enum>(e)</enum><header>Hearing;
termination</header><text>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.</text>
</subsection><subsection display-inline="no-display-inline" id="H55918B6C5FC74619962D12D6A957CDEC"><enum>(f)</enum><header>Judicial
review</header>
<paragraph display-inline="no-display-inline" id="HEDF4E8EE127E4CE28EF470161A0C0F36"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph display-inline="no-display-inline" id="H141FAB02A7B54DD1993415E92DFF06C0"><enum>(2)</enum><header>Appeal</header><text>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.</text>
</paragraph></subsection></section><section id="H1217E5793D6A4E1899C7BE33D2529919"><enum>122.</enum><header>Other
enforcement powers</header>
<subsection id="H9A5671B8C96249EC8DA781648A606649"><enum>(a)</enum><header>In
general</header><text>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.</text>
</subsection><subsection commented="no" id="H4955B86A98EE4F3BB8F92439F3E44C26"><enum>(b)</enum><header>Holding
companies and other subsidiaries</header><text>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.</text>
</subsection></section><section id="HA498E1307335421ABE3EAA76C5B21CEB"><enum>123.</enum><header>Insurance
fraud</header>
<subsection id="HC42A27F843734AA490F7E53E769380F7"><enum>(a)</enum><header>Investigations</header><text>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.</text>
</subsection><subsection id="H72B8FF3BF0DD4A87BA61244598AA4F84"><enum>(b)</enum><header>Penalty</header>
<paragraph id="H325CBD7D6A9D48BB9A86B314839CB811"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="HAB9429BB738343C7B8C12B3F938D42C6"><enum>(2)</enum><header>National
insurers, agencies, insurance producers</header><text>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.</text>
</paragraph><paragraph commented="no" id="HAD4E87379056429EA21B0623BADDD7E0"><enum>(3)</enum><header>Low
amounts</header><text>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.</text>
</paragraph><paragraph id="H4B556FC1036940A9BC45C7FA0A94F503"><enum>(4)</enum><header>Additional
penalties</header><text>The penalties under this subsection shall be in
addition to any other penalties imposed under this Act.</text>
</paragraph><paragraph id="HBA45BECA5E7045FDB9202852026ABC60"><enum>(5)</enum><header>Restitution
required</header><text>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.</text>
</paragraph></subsection><subsection id="H5A158CBF95AD4D659E8B7B7FEE2DAAA1"><enum>(c)</enum><header>Immunity from
liability</header>
<paragraph commented="no" id="H0D227652A9BC4AF4954FB23383EF93B4"><enum>(1)</enum><header>In
general</header><text>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—</text>
<subparagraph commented="no" id="H68EE07A2BBCA42A4975E1063AD69F6EB"><enum>(A)</enum><text>the Commissioner
or any employee, agent, or representative of the Commissioner;</text>
</subparagraph><subparagraph commented="no" id="HE5F5B3A82CC145E9B0847B079EBDF01A"><enum>(B)</enum><text>a Federal, State,
or local enforcement or regulatory official or an employee, agent, or
representative of such official;</text>
</subparagraph><subparagraph commented="no" id="H2768BF0C63194CDBB2D7F2770C167CB8"><enum>(C)</enum><text>a self-regulatory
organization or an employee, agent, or representative of such
organization;</text>
</subparagraph><subparagraph commented="no" id="HB12E47A54961472DBC5FC75F9688BDA2"><enum>(D)</enum><text>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</text>
</subparagraph><subparagraph commented="no" id="H47F215D05B88413BA6E1D725D7840FBF"><enum>(E)</enum><text>the NAIC or an
employee, agent, or representative of the NAIC.</text>
</subparagraph></paragraph><paragraph id="HE39CC68E168B49FD9DD401F795ECF332"><enum>(2)</enum><header>Malice</header>
<subparagraph id="HDE1CAC461EE8427C9E6D4CBCAF0A66BD"><enum>(A)</enum><header>In
general</header><text>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).</text>
</subparagraph><subparagraph id="HBB27572DFA844A2B8D3411F1F1B4E6E5"><enum>(B)</enum><header>Contents of
complaint</header><text>In an action brought against a person for filing a
report or furnishing other information concerning a fraudulent insurance act,
the party bringing the action shall plead specifically any allegation that
paragraph (1) does not apply because the person filed the report or furnished
the information with actual malice.</text>
</subparagraph></paragraph></subsection><subsection id="HF15DF2FC7D624D3E89C44B9CD01505F2"><enum>(d)</enum><header>Fraudulent
insurance act defined</header><text>In this section, the term <term>fraudulent
insurance act</term> 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:</text>
<paragraph id="H16AD0A7D61074143BCB489987F18E948"><enum>(1)</enum><text>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:</text>
<subparagraph id="H1B194FA80F1E489182003A53E1B196B5"><enum>(A)</enum><text>An application for
a new or renewal of an insurance policy or reinsurance contract.</text>
</subparagraph><subparagraph id="HB9DC8F184F42457E900B4AD6D267F397"><enum>(B)</enum><text>The rating of a
national insurer or State insurer that writes an insurance policy or enters
into a reinsurance contract.</text>
</subparagraph><subparagraph id="H564F0D12C62345AFA078DDA374A81D0A"><enum>(C)</enum><text>A claim for
payment or benefit pursuant to an insurance policy or reinsurance
contract.</text>
</subparagraph><subparagraph id="HD1BD6DD82ABF47ACA765A9949CDECE9D"><enum>(D)</enum><text>Premiums paid on
an insurance policy or reinsurance contract.</text>
</subparagraph><subparagraph id="HAA1D94603A9D46D2B3641F4F7661C176"><enum>(E)</enum><text>Payments made in
accordance with the terms of an insurance policy or reinsurance
contract.</text>
</subparagraph><subparagraph id="H74D2FE9AC3184B3DBBD7ACB40B2AA821"><enum>(F)</enum><text>A document filed
with the Commissioner.</text>
</subparagraph><subparagraph id="H5C58920BAF7244938CD8B12BAF5F038F"><enum>(G)</enum><text>The financial
condition of a national insurer or State insurer.</text>
</subparagraph><subparagraph id="H08AFEFAA322B4F02BDD50E8A9EE67ACD"><enum>(H)</enum><text>The formation,
acquisition, merger, consolidation, or dissolution of a national insurer or
national insurance agency.</text>
</subparagraph><subparagraph id="H684580159089452FA3A740C4B45F02D6"><enum>(I)</enum><text>The issuance of
evidence of insurance.</text>
</subparagraph><subparagraph id="HE1C3C9D11DF94AC2AAE6839FC6DE265C"><enum>(J)</enum><text>The reinstatement
of an insurance policy.</text>
</subparagraph></paragraph><paragraph id="HDA2A7A7A6ECB4852A4B4A43F5F44D856"><enum>(2)</enum><text>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.</text>
</paragraph><paragraph id="H50ADFC331F5A468EA20FEEA1CA423A42"><enum>(3)</enum><text>Removal,
concealment, alteration, or destruction of the records of a national insurer,
national insurance agency, State insurer, State insurance agency, or insurance
producer.</text>
</paragraph><paragraph id="H4B400A9DA2A84508A59FB063507D073B"><enum>(4)</enum><text>Transaction of the
business of insurance in violation of laws requiring a charter or license under
this Act.</text>
</paragraph><paragraph id="H440CC5288BCA46359FB720288957620F"><enum>(5)</enum><text>Attempting to
commit, aiding or abetting in the commission of, or conspiracy to commit the
acts or omissions specified in this subsection.</text>
</paragraph></subsection></section><section id="HBE2249AB4901468E8B4290A150FF4254"><enum>124.</enum><header>Foreign
investigations</header>
<subsection id="H014DCAD46BBA49A4AF748FB7F8FF0153"><enum>(a)</enum><header>Requesting
assistance from foreign governments</header><text>In conducting any
investigation, examination, or enforcement action under this subtitle, the
Commissioner may request the assistance of any foreign government.</text>
</subsection><subsection id="H31E53EA12B2843D3A1254F70BB1536E1"><enum>(b)</enum><header>Providing
assistance to foreign governments</header><text>The Commissioner may assist any
foreign government that is conducting an investigation to determine whether any
person has violated, is violating, or is about to violate any law or regulation
relating to insurance matters or currency transactions administered or enforced
by such foreign government.</text>
</subsection></section><section id="HE855A191D25148C0B8D62D94FFBC7FA1"><enum>125.</enum><header>Prompt
corrective action</header>
<subsection id="H37F8510C1435457E9D2F41AE06BAD603"><enum>(a)</enum><header>Rulemaking</header>
<paragraph id="H2CC4673BBB944078904F74488FB075AF"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph commented="no" id="H0D61E153099E4878959296889DDB24DA"><enum>(2)</enum><header>Required
content</header><text>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.</text>
</paragraph></subsection><subsection id="H805D0EE86A8C40668CB7545F9D9C77E4"><enum>(b)</enum><header>GAO study and
report</header>
<paragraph id="H2D3586080D8749808E395EFEE8FE53FF"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="HFE481442D9A24986BF8ED662C2B51ACA"><enum>(2)</enum><header>Requirements</header><text>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—</text>
<subparagraph commented="no" id="H201F750ED1C44980AA0839D301D04C18"><enum>(A)</enum><text>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</text>
</subparagraph><subparagraph commented="no" id="H9AE6001416754ACFA6B2A7FD2CB8B052"><enum>(B)</enum><text>the <quote>Model
Regulation to Define Standards and Commissioner’s Authority for Companies
Deemed to be in Hazardous Financial Condition</quote> of the NAIC.</text>
</subparagraph></paragraph><paragraph id="H146B1DFFC478499C8F767BE628152077"><enum>(3)</enum><header>Report</header>
<subparagraph id="HB89950BDE8494C0D99E4FE313138849C"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph id="H69CBFF8A38D347619EA712BAFC7A1147"><enum>(B)</enum><header>Contents</header><text>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.</text>
</subparagraph></paragraph></subsection></section></subtitle><enum>II</enum><header>Systemic risk
regulation, coordinating council for financial regulators, international
agreements</header>
<section id="HB029D9B0959147A2B11EB2F2FCF820EB"><enum>201.</enum><header>Systemic risk
regulation</header>
<subsection commented="no" id="HC1A8F19648E24B16944D5A9B5AEDDBC2"><enum>(a)</enum><header>Delegation of
authority</header><text>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.</text>
</subsection><subsection id="H7821990308A5410EA64E4B2D3E6B2CC6"><enum>(b)</enum><header>Powers of
systemic risk regulator</header><text>Notwithstanding any other provision of
law, the agency designated pursuant to subsection (a) may—</text>
<paragraph id="H2409F1F26A1B4314A3CC06669B33C816"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="H901E8707A92044CF80AD4664F9E7870F"><enum>(2)</enum><text>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;</text>
</paragraph><paragraph id="HDA2C9C35308545659D29AFF312FC4DA4"><enum>(3)</enum><text>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—</text>
<subparagraph id="H09A855D80CCF49FA9634275C75DB6EDA"><enum>(A)</enum><text>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</text>
</subparagraph><subparagraph id="H33D3D29F1B164498BF60125C816F862A"><enum>(B)</enum><text>take any other
action that the agency deems appropriate to mitigate or avoid the adverse
effects of such activity, practice, product or service;</text>
</subparagraph></paragraph><paragraph id="H980BD2B988314340BBF023B5FAF3873D"><enum>(4)</enum><text>issue a rule or
order to address the activities that are the subject of a recommendation made
pursuant to paragraph (3), if—</text>
<subparagraph id="H1E66C2D921984DF89B62BBD678A5EBB6"><enum>(A)</enum><text>the Commissioner
or State insurance authority fail to implement corrective actions within a
reasonable period of time, as determined by such agency; and</text>
</subparagraph><subparagraph id="H3CAD6E11135E4532B049B508D665812D"><enum>(B)</enum><text>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</text>
</subparagraph></paragraph><paragraph id="H63377EE2C675464B9D46D1EAAEFA5099"><enum>(5)</enum><text>in consultation
with the Commissioner—</text>
<subparagraph id="H4F1A258797C8405FB6BBD66C7C65B017"><enum>(A)</enum><text>determine if a
covered institution is systemically important; and</text>
</subparagraph><subparagraph id="H32133484A1B64878B41323F038475FFD"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="H4E5E6A403A5A498B803A1F44565E7F71"><enum>(c)</enum><header>Access to
information and confidentiality</header>
<paragraph id="HCA0D8B85947540ECBA79DE80AE8F00B1"><enum>(1)</enum><header>Court
order</header><text>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.</text>
</paragraph><paragraph id="H78907430804041F69A33DAB7E2F94DED"><enum>(2)</enum><header>Confidentiality</header><text>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.</text>
</paragraph></subsection><subsection id="HF8FC3A791FF3475DB65238A9CD5477D3"><enum>(d)</enum><header>Judicial
review</header><text>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.</text>
</subsection><subsection id="HF727474FA5724497B3021CE714D3454D"><enum>(e)</enum><header>Costs</header><text>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—</text>
<paragraph id="H244DE78CF7F1478E81C5B99E8DAF20A8"><enum>(1)</enum><text>an assessment rate
established by the agency, by regulation; and</text>
</paragraph><paragraph id="H291073A0A44D487383E38AC8E311C744"><enum>(2)</enum><text>the amount of the
covered institution’s average total assets during the preceding year.</text>
</paragraph></subsection><subsection id="HFBF2A3BB8E5C4452B2239B160A43A7FC"><enum>(f)</enum><header>Report to
Congress and GAO review</header>
<paragraph id="H5327B08F2A614A86BAE154BAE9E487DB"><enum>(1)</enum><header>Report to
congress</header><text>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.</text>
</paragraph><paragraph id="HABF6DEE633A341FC9B54A551BEB382FD"><enum>(2)</enum><header>GAO
review</header><text>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.</text>
</paragraph></subsection><subsection id="HA903095F9B17474CA8F208817D6A117E"><enum>(g)</enum><header>Covered
institution defined</header><text>In this section, the term <term>covered
institution</term> means a national insurer and any insurance company organized
and supervised under State law.</text>
</subsection></section><section id="HE708D80D7E5E46EBA045D70598D8B958"><enum>202.</enum><header>Coordinating
council for financial regulators</header>
<subsection id="HDFB35340371D4C5A8A3A7B02C8EC40E8"><enum>(a)</enum><header>Establishment
and purpose</header><text>There is established the Coordinating National
Council for Financial Regulators (in this section referred to as the
<quote>Council</quote>) 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.</text>
</subsection><subsection id="H2FB7C0701B7641E8BAB4469893E15B42"><enum>(b)</enum><header>Functions of the
council</header>
<paragraph id="H9E48722B973D448786BF5F95574E81AA"><enum>(1)</enum><header>Duties</header><text>The
Council shall—</text>
<subparagraph id="H51A58C57F3E34760AB314831A363D2DA"><enum>(A)</enum><text>monitor and
measure the health and competitiveness of the financial services industry in
the United States, including its component segments;</text>
</subparagraph><subparagraph id="HED59240213034865B9496B91DA27C980"><enum>(B)</enum><text>develop early
warning systems to detect potential points of weakness or strains in financial
markets;</text>
</subparagraph><subparagraph id="HA3994C4D763D4B8A8CDB6E6CCC5E8C34"><enum>(C)</enum><text>recommend
coordinated actions for national and State financial regulators and financial
services firms, especially in times of market stress or financial
crisis;</text>
</subparagraph><subparagraph id="HFDD85E58B1414B4D92FCC60E4BE776B3"><enum>(D)</enum><text>develop model
supervisory policies for national and State financial regulators; and</text>
</subparagraph><subparagraph id="HE3A182CCDC05412BBBCFAA16F67E9EB2"><enum>(E)</enum><text>as necessary, make
determinations referred to in section 201(b)(4)(B).</text>
</subparagraph></paragraph><paragraph id="H4533D00A84514CA4BAC64B432AC1FCC2"><enum>(2)</enum><header>Limitation</header><text>Except
as provided in paragraph (1)(E), the Council shall not have any independent
supervisory or regulatory authority.</text>
</paragraph></subsection><subsection id="HA0CA4E332FD74567A7EAAA86D20032C6"><enum>(c)</enum><header>Composition</header><text>The
Council shall be composed of—</text>
<paragraph id="HB4ECD019947341F1B631BD44B3FDB832"><enum>(1)</enum><text>the Secretary of
the Treasury, who shall serve as the chair of the Council;</text>
</paragraph><paragraph id="HF65F40AE8EC44433B80CDA50CA731B5F"><enum>(2)</enum><text>the Chairman of
the Board of Governors of the Federal Reserve System;</text>
</paragraph><paragraph id="HCF59635B787542D496A36831EC057BC0"><enum>(3)</enum><text>the Chairman of
the Securities and Exchange Commission;</text>
</paragraph><paragraph id="HE759F2709D56429EAE5315096A53D07C"><enum>(4)</enum><text>the Chairman of
the Commodities Futures Trading Commission;</text>
</paragraph><paragraph id="HF773EAC9408D46208AB678566E07B32E"><enum>(5)</enum><text>the Comptroller of
the Currency;</text>
</paragraph><paragraph id="H61E347B04EDB4E1B9B5C01DA275D0686"><enum>(6)</enum><text>the Director of
the Office of Thrift Supervision;</text>
</paragraph><paragraph id="HDC95AE9B2A0741EE9597D5B0B0BA2CBB"><enum>(7)</enum><text>the Chairman of
the Federal Deposit Insurance Corporation;</text>
</paragraph><paragraph id="H979B8F0D0EDE405B8D22C8472F3EE09F"><enum>(8)</enum><text>the Commissioner
of National Insurance;</text>
</paragraph><paragraph id="HA8ADD0E19D694FD8AE480297F547FFFC"><enum>(9)</enum><text>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;</text>
</paragraph><paragraph id="HEA46E092737A431095F7FA711F46A475"><enum>(10)</enum><text>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</text>
</paragraph><paragraph id="HCEF7E79C4C4640FF89AD0CBF719144BB"><enum>(11)</enum><text>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.</text>
</paragraph></subsection><subsection id="H060A8ADA66244F1C9078FF7CBA40DAEE"><enum>(d)</enum><header>Conditions
applicable to appointed members of the council</header>
<paragraph id="H5B3450B3E8AB47E5ADB24E05FE630D14"><enum>(1)</enum><header>Consultation</header><text>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.</text>
</paragraph><paragraph id="HA23135F449584FEC89207BDB2785C3F5"><enum>(2)</enum><header>Term and
vacancy</header><text>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.</text>
</paragraph><paragraph commented="no" id="HA33A12359D5041ECA702AC2F1383252B"><enum>(3)</enum><header>Travel
expenses</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph id="H2F21BA6EA1584FBDA5ADCBFAEBAF46E2"><enum>(4)</enum><header>Prohibition on
financial interests</header><text display-inline="yes-display-inline">A member
appointed under paragraph (9), (10), or (11) of subsection (c) may not have a
direct financial interest in any financial services firm.</text>
</paragraph></subsection><subsection id="H2BFA68D9AE584DECB53EA346854CACEC"><enum>(e)</enum><header>Meetings</header><text>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.</text>
</subsection><subsection id="H1125B4CEEF114D1BB97258E484AC8570"><enum>(f)</enum><header>Consultation</header><text>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.</text>
</subsection><subsection id="H0FECBFA1298045ACB4A442A42F4100C0"><enum>(g)</enum><header>Information
sharing</header><text>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.</text>
</subsection><subsection id="H1D10E2FC0CBF42DD83AFEC94E39397EF"><enum>(h)</enum><header>Annual
report</header><text>The Council shall submit an annual report to the
President, Congress, and the governors and legislatures of each State on its
activities.</text>
</subsection><subsection id="H5B94007AE5D3445697BDCEFF733E799D"><enum>(i)</enum><header>Administrative
support</header><text>The Secretary of the Treasury shall provide the Council
with such administrative support services as may be necessary for the
performance of its functions.</text>
</subsection><subsection id="HF10512553F104E10AAE5C1775B2F147C"><enum>(j)</enum><header>Authorization</header><text>There
is authorized to be appropriated such funds as may be necessary to carry out
this section.</text>
</subsection></section><section id="HBFD37038C7A5437F93FC9F3D6106670F"><enum>203.</enum><header>International
agreements</header>
<subsection id="HACF7DF2662EE4A9FB95329EBF57407AE"><enum>(a)</enum><header>In
general</header><text>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—</text>
<paragraph id="HA560F96A6C9E47C0B41835075487DB2F"><enum>(1)</enum><text>promote the
stability and integrity of insurance markets;</text>
</paragraph><paragraph id="H3ED5064182214FD598E725922B633EF0"><enum>(2)</enum><text>encourage open and
fair competition in such markets; and</text>
</paragraph><paragraph id="H97A9B8FFC5CE4FB5B895AA79CCD8E66C"><enum>(3)</enum><text>improve the
quality and uniformity of insurance supervision and regulation internationally
and provide the regulation of cross-border provisions of insurance and
reinsurance services.</text>
</paragraph></subsection><subsection id="H98A06B7AA03C4457BC4CD17225A58C79"><enum>(b)</enum><header>Technical
assistance</header><text>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.</text>
</subsection><subsection id="HEDB18A9BD0D944868F647498D28F84DB"><enum>(c)</enum><header>Consultation</header><text>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.</text>
</subsection></section><enum>III</enum><header>National
insurance companies and national insurance agencies</header>
<subtitle id="H06937B1C7A1D4A069DB041219C4D3168"><enum>A</enum><header>Organization,
Chartering, and Powers</header>
<section id="H74A19E4EE4DE468795C4705AAE5134DA"><enum>301.</enum><header>Organization
and chartering</header>
<subsection id="H17F341865BFB41798672DDADD56C76DF"><enum>(a)</enum><header>Charters</header>
<paragraph id="H6A1567670CF6475D8691292D0E3169C4"><enum>(1)</enum><header>In
general</header><text>The Commissioner shall, under such regulations as the
Commissioner prescribes, issue charters to and provide for the organization
of—</text>
<subparagraph id="H1D9D65D4A03643EAB3818E2A6E700C8A"><enum>(A)</enum><text>national insurers
in stock, mutual, reciprocal, or fraternal form; and</text>
</subparagraph><subparagraph id="H990A1D44D3544645AC2CCBD21797ECF6"><enum>(B)</enum><text>national agencies
as corporations, partnerships, limited liability companies, or in other forms
recognized under State law.</text>
</subparagraph></paragraph><paragraph id="H83375B851FCD4DCFA8A2F470F63C27AF"><enum>(2)</enum><header>National
insurers</header><text>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.</text>
</paragraph><paragraph commented="no" id="H4C132B86F229416BAB2EB90D12CF9C84"><enum>(3)</enum><header>National
agencies</header><text display-inline="yes-display-inline">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.</text>
</paragraph></subsection><subsection id="H33B4107D39524CE6ABB42C87F01BBCB6"><enum>(b)</enum><header>Chartering
criteria</header><text>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.</text>
</subsection><subsection id="HC688502357FF445A91378D890AD70169"><enum>(c)</enum><header>Licensing of
non-United States insurers</header>
<paragraph id="HA0A74636001D4286908A34A20F212BE5"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="H0113D7034FB8413682303E89EAA53663"><enum>(2)</enum><header>Chartering
criteria</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph commented="no" id="H0645E2B639F042BEA054F1F7DD6C47BB"><enum>(3)</enum><header>Other applicable
laws</header><text>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.</text>
</paragraph><paragraph id="HE1B507B54F1F4FEB8CCD80EE91461D5B"><enum>(4)</enum><header>Nondiscrimination</header>
<subparagraph id="H8970AA291979475589FC8D8D6C882FA7"><enum>(A)</enum><header>In
general</header><text>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—</text>
<clause id="HB37A423DB5B0495C8E75BDE067D0A4E7"><enum>(i)</enum><text>a
subsidiary of a non-United States person;</text>
</clause><clause id="HDE6EA7E507564D67A59B3058FC217B08"><enum>(ii)</enum><text>partially owned
by a non-United States person; or</text>
</clause><clause id="H6ED90FB98EBF4567A5EE358B4C332062"><enum>(iii)</enum><text>a
United States branch of a non-United States insurer.</text>
</clause></subparagraph><subparagraph id="H14EB5AAB5D734F3F943E8B326111FC29"><enum>(B)</enum><header>Exception</header><text display-inline="yes-display-inline">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—</text>
<clause commented="no" id="H7341914B7700423FBF5ED3D157E62CCD"><enum>(i)</enum><text display-inline="yes-display-inline">the conditions attached are contained in
the charter under which the national insurer chooses to operate; and</text>
</clause><clause id="H83D6086A52654CD7A5926EF840A49BF8"><enum>(ii)</enum><text display-inline="yes-display-inline">the Commissioner makes a written finding
that the conditions are related to the protection of policyholders and are the
minimum conditions necessary to achieve the purposes of this Act.</text>
</clause></subparagraph></paragraph></subsection><subsection id="H5539D4285A7C42ABAEEF776F18165F96"><enum>(d)</enum><header>No delegation
permitted</header><text>The Commissioner may not delegate the authorities of
the Commissioner under this section to any insurance self-regulatory
organization.</text>
</subsection></section><section id="HB20EAE2BD7D047178F9CF9ED09F181C1"><enum>302.</enum><header>Corporate
governance</header>
<subsection id="H89D902E0F7584E09AD3ED93D1B37B117"><enum>(a)</enum><header>Main
office</header><text>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.</text>
</subsection><subsection id="H158B6701502944E396CE28E95CE76F59"><enum>(b)</enum><header>Applicable
law</header><text>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.</text>
</subsection><subsection id="H477A0E4B637548B697639C89278FE5D0"><enum>(c)</enum><header>Independent
audit committee for national insurers</header>
<paragraph id="H625D438C79F9449EA9F750116E47BE6A"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="H0E48335CF96046B394FDCE84F0FDB940"><enum>(2)</enum><header>Satisfaction</header><text>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.</text>
</paragraph></subsection><subsection id="H71E121206A4544ABAC7D9A788179D30D"><enum>(d)</enum><header>Participating
policy procedures</header>
<paragraph id="H45E12F9429C04B79B1F1CA5DBBF4D1C6"><enum>(1)</enum><header>In
general</header><text>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).</text>
</paragraph><paragraph commented="no" id="HCFDA1D3FD0EC48039B03D15E24450663"><enum>(2)</enum><header>Regulations</header><text>The
Commissioner shall, by regulation, establish participating policy procedures,
as the Commissioner determines to be appropriate to carry out paragraph
(1).</text>
</paragraph></subsection><subsection id="HF1F680FCB0C548ED80923386305ACD7F"><enum>(e)</enum><header>Consumer
liaison</header>
<paragraph id="H488D540D3A5E473CAE379DF55DC2EAB0"><enum>(1)</enum><header>In
general</header><text>Each national insurer and national insurance agency shall
appoint a liaison to serve consumers and address complaints or disputes.</text>
</paragraph><paragraph id="HF338265C3C11447484AEE65231073044"><enum>(2)</enum><header>Procedures</header><text>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.</text>
</paragraph><paragraph id="H39C87156F04047C08EBB02BF0DEDF099"><enum>(3)</enum><header>Regulations</header><text>The
Commissioner shall issue regulations governing the standards for the liaison
referred to in paragraph (1).</text>
</paragraph></subsection></section><section id="HE82A0CE9C6F942CD88C577E95D3CCD0E"><enum>303.</enum><header>Charter
conversions</header>
<subsection id="HF6495311B4724CC98C98DBA07AA427A1"><enum>(a)</enum><header>Conversion from
State to national charter</header>
<paragraph id="H69A57462C20B4E9FAEB23356584BB895"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="H080CB12292594405BBD939DD933131EB"><enum>(2)</enum><header>Effect of
conversion</header><text>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.</text>
</paragraph><paragraph id="HCE30D1B88DE841F0AD2EAE7BD4FBC093"><enum>(3)</enum><header>Special
authority</header><text>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.</text>
</paragraph></subsection><subsection id="HD5730A04FAFC4383B9E54A4EC8D05E6A"><enum>(b)</enum><header>Conversion from
national to State charter</header>
<paragraph id="H62B54CD299944B32AACF458B5612E4EF"><enum>(1)</enum><header>In
general</header><text>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—</text>
<subparagraph id="H8207334B8E3C434294656A3790C9CF97"><enum>(A)</enum><text>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</text>
</subparagraph><subparagraph commented="no" id="HA67DB4EFA560439ABA71C789A2305C21"><enum>(B)</enum><text>after conducting a
review of such national insurer or such national insurance agency, the
Commissioner approves the conversion.</text>
</subparagraph></paragraph><paragraph id="H9FE983A8BFC84E9BA7063AFE8EE7EF44"><enum>(2)</enum><header>Savings
provision</header><text>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.</text>
</paragraph></subsection><subsection id="H7C180C60D5D344DE852E79D5CCB86AAB"><enum>(c)</enum><header>No delegation
permitted</header><text>The Commissioner may not delegate any authority under
this section to any insurance self-regulatory organization.</text>
</subsection></section><section id="HC02FDE1ED285406199F231DBFB1A90B1"><enum>304.</enum><header>Powers</header>
<subsection id="HA0CD7A3DC69E43488320F9DEC05C1727"><enum>(a)</enum><header>In
general</header>
<paragraph id="H7223C17593F449A0A38A25301A4DAB97"><enum>(1)</enum><header>National
insurer</header><text>A national insurer may, pursuant to such regulations as
the Commissioner prescribes—</text>
<subparagraph id="H87F9315136CF4562BC9EE0FE6BEDDE95"><enum>(A)</enum><text>engage in the
sale, solicitation, negotiation, and underwriting of property and casualty
insurance (other than title insurance), life insurance, and reinsurance;</text>
</subparagraph><subparagraph id="H2A038C5D6C694336A71F7BD9FDA445AC"><enum>(B)</enum><text>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;</text>
</subparagraph><subparagraph id="HA96CCB6FA0194F938C85B5A6AEB0AEF0"><enum>(C)</enum><text>hold and
accumulate funds pursuant to funding agreements;</text>
</subparagraph><subparagraph id="HF45C1A43DD2742F08D579A2863D5F30D"><enum>(D)</enum><text>provide investment
advice and investment management services; and</text>
</subparagraph><subparagraph id="HCD2B5638ACD548258EFCA9CFD5CBDC2C"><enum>(E)</enum><text>engage in all
other insurance operations and exercise all such incidental powers as shall be
necessary to carry on insurance operations.</text>
</subparagraph></paragraph><paragraph id="H4D0A457072844B7599C0B3EE8AF25F3C"><enum>(2)</enum><header>National
insurance agency</header><text>A national insurance agency may, pursuant to
such regulations and the Commissioner prescribes—</text>
<subparagraph id="H3447C50FCF994EE3B01566BECA166410"><enum>(A)</enum><text>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</text>
</subparagraph><subparagraph id="HA012076234964BED8755F1D34A1A0399"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="H3F512DFDE52C46C8BE1C87322EDE38C7"><enum>(b)</enum><header>Other
powers</header><text>A national insurer or national insurance agency may,
subject to such regulations as the Commissioner prescribes—</text>
<paragraph id="H24A54ACC90B44F6CA976957EB6DC808E"><enum>(1)</enum><text>adopt and use a
corporate seal, or a facsimile of it;</text>
</paragraph><paragraph id="HC3C1694AFD89417B87D33B11C33FD8C2"><enum>(2)</enum><text>have perpetual
succession until such time as it is liquidated, dissolved, merged, or otherwise
wound up in accordance with applicable law;</text>
</paragraph><paragraph id="HF9A6309FC17D426C8E4CC981742621D7"><enum>(3)</enum><text>adopt, amend, and
repeal by-laws;</text>
</paragraph><paragraph id="HB7B4145345044C4FB2A15B8CFAF17B51"><enum>(4)</enum><text>sue or be sued,
complain and defend, and otherwise litigate in any court and participate, as a
party or otherwise, in any judicial, administrative, arbitral, or other
proceeding, in its corporate name;</text>
</paragraph><paragraph id="H4A6BAE2A551248F2B2D1CB471A9CD93F"><enum>(5)</enum><text>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;</text>
</paragraph><paragraph id="H2A5FFDD81A0D4779B11C17044646EB04"><enum>(6)</enum><text>purchase, receive,
subscribe for, or otherwise acquire, own, hold, vote, improve, employ, use, and
otherwise deal in and with real and personal property or other assets, or any
interest therein, and sell, convey, mortgage, lease, exchange, transfer, or
otherwise dispose of, or mortgage or pledge, all or any of its property and
assets, or any interest therein;</text>
</paragraph><paragraph id="H544D929DECE3422CADBDE5E3752759B3"><enum>(7)</enum><text>lend money,
invest, and reinvest its funds and receive and hold real and personal property
as security for repayment;</text>
</paragraph><paragraph id="H72C3F1A8767C4F298C992080A81EC492"><enum>(8)</enum><text>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;</text>
</paragraph><paragraph id="HFA6C626877BC4A0CB535A70FD83C3520"><enum>(9)</enum><text>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;</text>
</paragraph><paragraph id="HBF434EB7CDB24EAC9E45DC36FC7D375B"><enum>(10)</enum><text>make donations
and otherwise devote its resources for the public welfare or for charitable,
scientific, educational, humanitarian, philanthropic, or religious purposes;
and</text>
</paragraph><paragraph id="H545FC2151BA546079752688A4C8CC686"><enum>(11)</enum><text>engage in any
other lawful activity that is necessary or convenient to further its activities
and affairs.</text>
</paragraph></subsection><subsection id="H322E70CE0DBC4559B179BD5737450B5B"><enum>(c)</enum><header>Subsidiaries</header><text>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.</text>
</subsection><subsection id="HAAD7D98C6E1140BC953131D3103B6951"><enum>(d)</enum><header>Other corporate
transactions</header><text>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.</text>
</subsection><subsection id="HDE288F17D7654ECFB316A74E60CCC690"><enum>(e)</enum><header>Prohibited
activities</header><text>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.</text>
</subsection><subsection id="H6CE7795B1114485AA82E082D60425991"><enum>(f)</enum><header>Bulk
transfers</header>
<paragraph id="HE1EE7FFDEDAD4D5BBD8CB66CE53A24CF"><enum>(1)</enum><header>Bulk transfers
authorized</header><text>A national insurer may only effect the following bulk
transfers:</text>
<subparagraph id="H157C20B5820044F28392BC07C552BAD6"><enum>(A)</enum><text>A State insurer as
the transferring insurer and a permitted national insurer as the assuming
insurer.</text>
</subparagraph><subparagraph id="HBC473FF719AE46FBB1124260F1C7D374"><enum>(B)</enum><text>A permitted
national insurer as the transferring insurer and a State insurer as the
assuming insurer.</text>
</subparagraph><subparagraph id="HE098EF3F686D417B8B5CA9C0C2819BA5"><enum>(C)</enum><text>A national insurer
as the transferring insurer and a national insurer as the assuming
insurer.</text>
</subparagraph><subparagraph id="H17AB379CDFCC4405AC9A85EA082A4DC1"><enum>(D)</enum><text>A State insurer as
the transferring insurer and a national insurer that is not a permitted
national insurer as the assuming insurer.</text>
</subparagraph><subparagraph id="H5B82B6222AB74D2E9E23365775C25C6C"><enum>(E)</enum><text>A national insurer
that is not a permitted national insurer as the transferring insurer and a
State insurer as the assuming insurer.</text>
</subparagraph></paragraph><paragraph id="H15814E943A864A269ADB30699E424F4B"><enum>(2)</enum><header>Commissioner
Approval</header>
<subparagraph id="HA36935F9D07B46F1A7D1E68BE95469AC"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph id="H918E356C27DD4D9EA7325040A9C24B46"><enum>(B)</enum><header>Standard of
approval</header><text>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.</text>
</subparagraph></paragraph><paragraph id="HB2791C25E0914FE98E786936B7C3C3A2"><enum>(3)</enum><header>Policyholder
Consent</header>
<subparagraph commented="no" id="H1047BA42C4B84BA58E3F3ABE6A1A1ABB"><enum>(A)</enum><header>State insurer
and permitted national insurer</header><text>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).</text>
</subparagraph><subparagraph id="H1B57D2859C6D4297B40CFB38559D8563"><enum>(B)</enum><header>Between national
insurers or State insurer and other national
insurer</header><text>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.</text>
</subparagraph></paragraph><paragraph id="HA143BF26BE0244EF899D221B8BB1DF73"><enum>(4)</enum><header>Release from
liability</header><text>Upon the completion of a bulk transfer under this
section, the transferring insurer shall be released from its obligations under
the transferred insurance policies.</text>
</paragraph><paragraph id="HCAE3D39FB22E4163B896920E2D4F3E46"><enum>(5)</enum><header>State
Law</header>
<subparagraph id="H8652161D8CAB4533A53A0B6B09950BEA"><enum>(A)</enum><header>Prohibition</header><text>Except
as provided in subparagraph (B), a State may not—</text>
<clause id="H8E76F2A026AB40A68E936C3B175C0144"><enum>(i)</enum><text>require a national
insurer or a State insurer to—</text>
<subclause id="H4A0E215B4BB94E43A5C895AB54E8A315"><enum>(I)</enum><text>obtain
policyholder consent to a bulk transfer; or</text>
</subclause><subclause id="H0F17FAFD33FF43C0A507A541BC615BFB"><enum>(II)</enum><text>submit the bulk
transfer to State review or action (including approval and nondisapproval);
or</text>
</subclause></clause><clause id="H2EEDFFBC082448C097EB7FA7E7419F30"><enum>(ii)</enum><text>prevent or
significantly interfere with a bulk transfer effected pursuant to this
section.</text>
</clause></subparagraph><subparagraph id="H74ED1170E7764707B4B5ECA981F730C9"><enum>(B)</enum><header>Construction</header><text>Subparagraph
(A) shall not be construed to prohibit any State from—</text>
<clause id="H7D5FEE9EAACA485BA994D5F33C08FAA4"><enum>(i)</enum><text>collecting,
reviewing, and taking action (including approval or disapproval) on
applications and other documents or reports concerning a proposed bulk transfer
authorized under—</text>
<subclause id="H7932A07BDBB5442291AB925F9833675A"><enum>(I)</enum><text>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</text>
</subclause><subclause commented="no" id="H656C9E40FF5C461DB556DB5D0FF96E9F"><enum>(II)</enum><text>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</text>
</subclause></clause><clause id="H9230E9D093284A89AEBFAEAE4CB5FD26"><enum>(ii)</enum><text>requiring
policyholder consent of a proposed bulk transfer permitted under paragraph (4)
or (5) of subsection (b).</text>
</clause></subparagraph><subparagraph id="H5776ADFDADB64415A8C86D3EDAC815F2"><enum>(C)</enum><header>Standards</header><text>A
review or action meets the standards under this paragraph, if it—</text>
<clause id="H45126E33EB5D496AB00CB0D850D54648"><enum>(i)</enum><text>is
based on standards that are not more onerous than those imposed by the
Commissioner;</text>
</clause><clause id="H62BFDAFB5FD844F48C4D2B51A9C01D07"><enum>(ii)</enum><text>occurs within a
reasonable time frame that advances the purposes of this section;</text>
</clause><clause id="HAC20031142C9423BB327D8DE6A62C633"><enum>(iii)</enum><text>is
made in close consultation and cooperation with the Commissioner;</text>
</clause><clause id="HDADE09D37E8741E680145DC4824F1FA7"><enum>(iv)</enum><text>is
without bias or discrimination toward either the transferring insurer or the
assuming insurer;</text>
</clause><clause id="H28754A823A4E49E3B8AD81FC414A2B11"><enum>(v)</enum><text>serves a
legitimate State interest; and</text>
</clause><clause id="H6D40A18F10B94E40BC633096E5298DC7"><enum>(vi)</enum><text>does not
frustrate the proposed bulk transfer.</text>
</clause></subparagraph><subparagraph id="HC791474D77304E618D102ED10E31E3E7"><enum>(D)</enum><header>Notice of
failure</header><text>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.</text>
</subparagraph></paragraph><paragraph id="H392A4BC1BF0A49B2A97AE60BAF9DD1FC"><enum>(6)</enum><header>Differential
treatment prohibited</header><text>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.</text>
</paragraph><paragraph id="HA553EA83F7F246C7AF6C68FD6A09291E"><enum>(7)</enum><header>No delegation
permitted</header><text>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.</text>
</paragraph><paragraph id="H1B8E6B2BCC42417D98A4B8FB2A2B5139"><enum>(8)</enum><header>Definitions</header><text>In
this subsection:</text>
<subparagraph id="H9207B9B67B274659AF6980CEB59100BE"><enum>(A)</enum><header>Assuming
insurer</header><text>The term <quote>assuming insurer</quote> means the
insurer that purchases or otherwise acquires existing insurance policies from
another insurer by bulk transfer.</text>
</subparagraph><subparagraph id="H5D70930D0CA94D8D9818B40B3E0EED0E"><enum>(B)</enum><header>Block of
business</header><text>The term <quote>block of business</quote> means all
those insurance policies of an insurer under a particular policy form.</text>
</subparagraph><subparagraph id="HA94B091CB53B4E308B702FE4DA338E27"><enum>(C)</enum><header>Bulk
transfer</header><text>The term <quote>bulk transfer</quote>—</text>
<clause id="H5EC97038BB0A45C486127F3A654FFEED"><enum>(i)</enum><text>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</text>
</clause><clause id="H3F872805AFA4479DACE37A16CC549153"><enum>(ii)</enum><text>does not
include—</text>
<subclause id="H176FFE9654A24618AE978DD0227A610E"><enum>(I)</enum><text>any sale in which
the transferring insurer retains direct or indirect control of the assets
supporting the transferred insurance policies;</text>
</subclause><subclause id="H673B3279AD8C4D3C95FFD9DF307C1045"><enum>(II)</enum><text>any transaction
effected by an agreement under which the transferring insurer continues to
remain directly liable to the policyholders under the insurance
policies;</text>
</subclause><subclause id="H4666720911784792A1D1E9E8E3D38FD7"><enum>(III)</enum><text>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;</text>
</subclause><subclause id="HF96DDE9F7B104F79ACDDAED3ACA9935D"><enum>(IV)</enum><text>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;</text>
</subclause><subclause id="H0D01EFE88F2B40D69D0C037037816669"><enum>(V)</enum><text>any transaction
effected by an insurer subject to a judicial order of receivership,
liquidation, or rehabilitation; or</text>
</subclause><subclause id="H7D3180BF179F4B238FEC82BE607BE2AE"><enum>(VI)</enum><text>any transfer of
liabilities from one insurer to another under a single group insurance policy
upon the request of the group policyholder.</text>
</subclause></clause></subparagraph><subparagraph commented="no" id="H4ED7969FEDAE43C69CF52369E8B6084D"><enum>(D)</enum><header>Permitted
national insurer</header><text>The term <quote>permitted national
insurer</quote> means—</text>
<clause commented="no" id="HD69DF0ECAB354A448FAA2672EF00FA96"><enum>(i)</enum><text>a State insurer
that has recently converted to a national insurer under section 303, as
determined by the Commissioner; or</text>
</clause><clause commented="no" id="H773F0F57A82A46879AAD50991891BF99"><enum>(ii)</enum><text>a national
insurer that has been issued a charter under section 301 for a new line of
insurance, as determined by the Commissioner.</text>
</clause></subparagraph><subparagraph id="H095A9D81EFDA4C6C8962276D1F889674"><enum>(E)</enum><header>Transferred
insurance policies</header><text>The term <quote>transferred insurance
policies</quote> means the insurance policies that are subject to the bulk
transfer.</text>
</subparagraph><subparagraph id="H36873FC51C0341D387F77407A6E7E866"><enum>(F)</enum><header>Transferring
insurer</header><text>The term <quote>transferring insurer</quote> means the
insurer in privity of contract with the policyholders under the existing
insurance policies that are subject to the bulk transfer.</text>
</subparagraph></paragraph></subsection><subsection id="HA86CF0F7977241B9B9106360EE7AF7EC"><enum>(g)</enum><header>Effect of State
law</header><text>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.</text>
</subsection></section><section id="H70CA146C9E2F457387CDE7395F21BCE1"><enum>305.</enum><header>Chartering
commencement date</header><text display-inline="no-display-inline">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.</text>
</section></subtitle><subtitle id="HF7F57EBD515A450FA7E57649B5E3BD18"><enum>B</enum><header>Financial, Policy
and Market Conduct Standards</header>
<section id="H1908496E3B014435ADC234DD60120A10"><enum>311.</enum><header>Financial
standards</header><text display-inline="no-display-inline">The Commissioner
shall establish, by regulation, standards for national insurers and national
insurance agencies on—</text>
<paragraph id="H8DC63E52DB454F0C9B1AF0EB4CDF27E3"><enum>(1)</enum><text>accounting and
disclosure;</text>
</paragraph><paragraph id="H26DA8FECD75B451C893171D85E32E5DE"><enum>(2)</enum><text>auditing;</text>
</paragraph><paragraph id="H1109A181962F4754B5BBE27077146D8F"><enum>(3)</enum><text>risk
management;</text>
</paragraph><paragraph id="H122EFBDF342945718E98DE8C4AD86A56"><enum>(4)</enum><text>internal
controls;</text>
</paragraph><paragraph id="H1F8CEAF32F7041AAB4BC48B39B57C96E"><enum>(5)</enum><text>investments;</text>
</paragraph><paragraph id="H579CAB4EF62C49F5A47377B07FEFB947"><enum>(6)</enum><text>capital and
liquidity;</text>
</paragraph><paragraph id="H50D2B8D845234E9EB884E5A19B091FF0"><enum>(7)</enum><text>actuarial
opinions;</text>
</paragraph><paragraph id="H703F5E1F6BEF482AADCDE5593E01222B"><enum>(8)</enum><text>reinsurance;
and</text>
</paragraph><paragraph id="H1C727DEFE4C440A7B85874DA1503A8D5"><enum>(9)</enum><text>such other matters
as the Commissioner deems necessary to ensure the financial stability and
integrity of national insurers and national insurance agencies.</text>
</paragraph></section><section id="H8FD61B74004948C784988CAB2517C14B"><enum>312.</enum><header>Policy
standards</header>
<subsection id="HD8AECC79482F4286813B5B2889D0FE8B"><enum>(a)</enum><header>Policy
standards</header><text>The Commissioner shall establish, by regulation,
general policy requirements and requirements for different categories of
policies issued by national insurers.</text>
</subsection><subsection id="H51605287DE4B4773BFD7E66DA20C0767"><enum>(b)</enum><header>Filing
requirement</header><text>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).</text>
</subsection><subsection id="HDD644E66015D4B63A44847ADD54BF527"><enum>(c)</enum><header>Law
applicable</header>
<paragraph id="HB9233D12CE384952BC1222801C59E19A"><enum>(1)</enum><header>Law specified by
parties</header><text>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—</text>
<subparagraph id="H225B314F20CB464B881596351BE26F16"><enum>(A)</enum><text>the jurisdiction
in which the main office of the national life insurer is located;</text>
</subparagraph><subparagraph id="H4DDE03C790A848A2968267DC69C2BF4D"><enum>(B)</enum><text>the jurisdiction
in which the principal place of business of the national life insurer is
located; or</text>
</subparagraph><subparagraph id="H87FB40E35CEE4C56B93BA7E46997BE87"><enum>(C)</enum><text>the jurisdiction
in which the insurance policy or other product is delivered.</text>
</subparagraph></paragraph><paragraph id="H66EB290DFA8D4EC1B228DB8F751493E5"><enum>(2)</enum><header>Default
law</header><text>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.</text>
</paragraph><paragraph id="H4E1B1CF30B22497A86DBAEBAD6D0D155"><enum>(3)</enum><header>Rulemaking</header><text>The
Commissioner shall establish, by regulation, choice of law rules under this
subsection.</text>
</paragraph></subsection><subsection id="H2A345E33BBC24245B77B1854C26EF1EE"><enum>(d)</enum><header>Interpretive
rulings</header>
<paragraph id="H727BE640DB6D4DBFB1599C3EEEA60674"><enum>(1)</enum><header>Procedures</header><text>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.</text>
</paragraph><paragraph id="H4B7858A1822A487DA2EAF33BA78A47C3"><enum>(2)</enum><header>Public
availability</header><text>Except as provided under paragraph (3), requests by
national insurers for interpretive rulings from the Office and the complete
text of such interpretive rulings shall not be made available to the
public.</text>
</paragraph><paragraph id="H12730371A3A5462BB408E5BD28BA7BB9"><enum>(3)</enum><header>Publication of
summaries</header><text>Notwithstanding paragraph (2), the Commissioner shall
publish a summary of each interpretive opinion, excluding the name of the
national insurer and any other identifying information, either promptly after
the issuance of such opinion or, upon the request of the national insurer,
after such delay as the Commissioner determines appropriate.</text>
</paragraph></subsection><subsection id="H4602E5694F294F6A8D38D52D65AC7F15"><enum>(e)</enum><header>Rates, rating
elements, and price</header><text>The Commissioner may not require a national
insurer to use any particular rate, rating element, or price.</text>
</subsection></section><section id="HB3D10496EA794326BF5ED27FD9BF7FDD"><enum>313.</enum><header>Market conduct
standards</header>
<subsection id="H5C03559E2B5444D19E5B63BF6ECC53FC"><enum>(a)</enum><header>Standards</header><text display-inline="yes-display-inline">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 <quote>Unfair Trade Practices Act</quote> and <quote>Unfair
Claims Settlement Practices Act</quote>.</text>
</subsection><subsection id="H599B8B3205DC4DA492FB6C495432B699"><enum>(b)</enum><header>Disclosure</header>
<paragraph id="H24904478E19C4519B8121556967F9E61"><enum>(1)</enum><header>In
general</header><text>Subject to paragraph (2), the Commissioner shall require
each policy issued by a national insurer to include the following disclosure on
the cover page:</text>
<quoted-block display-inline="no-display-inline" id="H60EF7F0A04134311A34E176DAE5FBB0E" style="OLC">
<paragraph id="H7A2B7D56C7174837B686930AA487631A"><enum></enum><text>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,
____.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HB2F800BB89744098B62B144E58905E34"><enum>(2)</enum><header>Address</header><text display-inline="yes-display-inline">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.</text>
</paragraph></subsection></section><section id="HE00DC8BBD7AA4DAEB2DC7DB3AF28880C"><enum>314.</enum><header>General
principles</header>
<subsection id="H458282E1433B435C9598DE671972609F"><enum>(a)</enum><header>General
principles</header><text>The financial, policy, and market conduct standards
issued by the Commissioner pursuant to this subtitle shall—</text>
<paragraph id="HE65D180A71BA441B8738E72F02F95602"><enum>(1)</enum><text>promote the
stability and integrity of national insurers and national insurance
agencies;</text>
</paragraph><paragraph id="H28B5FC518BA04D95A4D753FD3231804D"><enum>(2)</enum><text>protect
policyholders and other consumers and investors; and</text>
</paragraph><paragraph id="H5E2EA7388BCE4BEE8F9CEF712D4423E6"><enum>(3)</enum><text>encourage
innovation and competition by national insurers and national insurance
agencies.</text>
</paragraph></subsection><subsection id="H7CFEDBC93C62499B8179788B2F8F281E"><enum>(b)</enum><header>NAIC
standards</header><text>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.</text>
</subsection></section></subtitle><subtitle id="H5DC01CBA4A434D82921E9F1A6BE43B01"><enum>C</enum><header>State
taxation</header>
<section id="HF90CABDFC6CE4513BBF209F9161A9AB4"><enum>321.</enum><header>State taxation
of national insurers</header>
<subsection id="H89E9552CBCFB4F1F8A7E107484ACEBC7"><enum>(a)</enum><header>State taxation
rule</header><text>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—</text>
<paragraph id="HA8D642676C0942D6841B16EBA1EA56E9"><enum>(1)</enum><text>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</text>
</paragraph><paragraph id="H94DEE81E0368491F8573CB09CA7C757E"><enum>(2)</enum><text>special
assessments and charges that fund services that the State does not provide with
respect to the national insurer.</text>
</paragraph></subsection><subsection id="H1A809240ABC44DB6B54FAFA803DFD3A8"><enum>(b)</enum><header>Exception</header><text>No
State shall have the power to impose an insurance retaliatory tax on any
national insurer, unless—</text>
<paragraph id="H56241B3B37694D8E83999DD31998409A"><enum>(1)</enum><text>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</text>
</paragraph><paragraph id="H76CF3BD7D60B4359A6B224ABA7735D3F"><enum>(2)</enum><text>the insurance
retaliatory tax is imposed by such State on every national insurer to the same
extent and in the same manner as it is imposed on every insurer chartered in
the State where the national insurer is considered domiciled under subsection
(c).</text>
</paragraph></subsection><subsection id="H5A23BA44BA764E48BE624532C3A3E3DE"><enum>(c)</enum><header>Designation of
domicile</header>
<paragraph id="H137B8690C6C344F7AE388C9AAED7C0B5"><enum>(1)</enum><header>In
general</header><text>A national insurer may designate as its State of
domicile, by filing such designation in writing with the Commissioner—</text>
<subparagraph id="HDA6AC323FD354777B9DE5C9B2BA9E519"><enum>(A)</enum><text>the State in which
the national insurer’s principal place of business in the United States is
located; or</text>
</subparagraph><subparagraph id="HD2182A46FC9441F99B65727F34F497AC"><enum>(B)</enum><text>in the case of an
insurer that has converted from a State insurer to a national insurer under
this Act, the State in which such insurer was domiciled immediately before such
conversion.</text>
</subparagraph></paragraph><paragraph id="HDE0FB90D7C1D4242A346E94192EACBEF"><enum>(2)</enum><header>No designation
by national insurer</header><text display-inline="yes-display-inline">If a
national insurer does not make a designation of a State of domicile under this
subsection, the national insurer shall be deemed to have designated as its
State of domicile the State in which its principal place of business in the
United States is located.</text>
</paragraph><paragraph id="H8DB52452EAAA4044A60D8CD41B360399"><enum>(3)</enum><header>Change in
domicile</header><text>A national insurer may change its State of domicile,
with the approval of the Commissioner, to any other State in accordance with
paragraph (1).</text>
</paragraph></subsection><subsection id="H03787824BF17464AAEB88E3D43316488"><enum>(d)</enum><header>Status of
national insurer</header><text>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.</text>
</subsection></section><section id="H357415888B59464DBC2F9462E5D2328A"><enum>322.</enum><header>State taxation
of national insurance agencies</header>
<subsection id="H459019D13C8D41B599D9CFA40B96EA21"><enum>(a)</enum><header>State taxation
rule</header><text>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).</text>
</subsection><subsection id="H3995E8CE4E344686AE93DF3F0E193FD4"><enum>(b)</enum><header>State of
domicile</header><text>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.</text>
</subsection><subsection id="H8E6D3FFF9BCA4FBCACA7DDA0ECC1CB68"><enum>(c)</enum><header>Status of
national insurance agency</header><text display-inline="yes-display-inline">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.</text>
</subsection></section><section id="H0D652126BEFE4FCE8C11973FDA7F374D"><enum>323.</enum><header>State taxation
of nonadmitted and surplus lines of insurance</header><text display-inline="no-display-inline">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.</text>
</section></subtitle><enum>IV</enum><header>National
insurance producers</header>
<section id="H0050108986354B49ABE3B8947F12A662"><enum>401.</enum><header>Licensing of
national insurance producers</header>
<subsection id="H4F3C0241123F4FFD8F65D69DF48AF35C"><enum>(a)</enum><header>Authority</header><text>The
Commissioner may license an individual person as a national insurance
producer.</text>
</subsection><subsection commented="no" id="H9C3F34DA48704D3FAE75FCE85F739173"><enum>(b)</enum><header>Requirements for
sale of national insurance</header><text>An individual may sell, solicit, or
negotiate insurance for a national insurer only if—</text>
<paragraph commented="no" id="HAB96DAB6C41D4E9A9B8E2484C1237920"><enum>(1)</enum><text display-inline="yes-display-inline">such individual—</text>
<subparagraph display-inline="no-display-inline" id="HCF9EC0B784DB4AADBBCC443C950D05E1"><enum>(A)</enum><text>is licensed by the
Commissioner under subsection (a); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H510A6E5349904DCFB9E480CD8E833B09"><enum>(B)</enum><text display-inline="yes-display-inline">is—</text>
<clause id="HBE7D06F7E25C443A8C8979DB44E2156E"><enum>(i)</enum><text>an
agent or employee of a national insurer or a national insurance agency;
or</text>
</clause><clause id="HEE69078E2D03440E93A7616A7775DE3D"><enum>(ii)</enum><text>self-employed and
not affiliated with another national insurance producer, as determined by the
Commissioner; or</text>
</clause></subparagraph></paragraph><paragraph id="H0FB5D34395A347ED9FCBED8EBF322612"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="H9C1A085DE7F348D5B28E4F5CF306735C"><enum>(c)</enum><header>Scope of
license</header>
<paragraph id="H175B2C600C5B4AFFA05B9212977C6CFA"><enum>(1)</enum><header>In
general</header><text>A national insurance producer may—</text>
<subparagraph id="H158BC0C4478E41629B2924AC1A195BE6"><enum>(A)</enum><text>sell, solicit, or
negotiate insurance in any State for a national insurer or a State
insurer;</text>
</subparagraph><subparagraph id="H124AEF0815344702A708F8BCBA1EE39B"><enum>(B)</enum><text>sell, solicit, or
negotiate surplus lines of insurance and nonadmitted insurance for a
non-admitted insurer; and</text>
</subparagraph><subparagraph id="HD1D97D46B8F441D18A2C2C54BF7ACAE1"><enum>(C)</enum><text>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.</text>
</subparagraph></paragraph><paragraph id="HC2121B3742D24DF9B073FDFE3D40B543"><enum>(2)</enum><header>Limitations</header><text>The
Commissioner may limit a license to one or more specified lines or types of
insurance.</text>
</paragraph></subsection><subsection id="HF605745455D84BA8A73DB73A78D32049"><enum>(d)</enum><header>Qualifications</header><text>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.</text>
</subsection></section><section id="H33BA50812DBF4FDFB169801C732F949E"><enum>402.</enum><header>Supervision and
examination</header>
<subsection id="H82ECA804A5204790A5858373749B8827"><enum>(a)</enum><header>Examinations</header>
<paragraph id="H2D74D6AC70DB425098D7C85ABDC96457"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="H516A974D22F349B9957FC27DB427E724"><enum>(2)</enum><header>Mandatory
examinations</header><text>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—</text>
<subparagraph id="H1473376879DF4809B8B32EDF39290C81"><enum>(A)</enum><text>a law, rule, or
regulation;</text>
</subparagraph><subparagraph id="HCC377FC839AE4E689235F07CE0815E3D"><enum>(B)</enum><text>any condition
imposed in writing by the Commissioner in connection with issuing a national
insurance producer license; or</text>
</subparagraph><subparagraph id="HE3F53E24A1364415BA10124D031D9077"><enum>(C)</enum><text>any written
agreement entered into with the Commissioner.</text>
</subparagraph></paragraph></subsection><subsection id="HC7885572FA334090819EE85A24B74A21"><enum>(b)</enum><header>Reports</header><text>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.</text>
</subsection><subsection id="H750F00FB609C473EA29452920ABB6671"><enum>(c)</enum><header>Powers</header><text>The
powers authorized the Commissioner in section 121 shall apply to reports by and
examinations of national insurance producers.</text>
</subsection><subsection commented="no" id="H071852D432DF4D9883844E8F32156F4B"><enum>(d)</enum><header>Limitation on
liability</header>
<paragraph id="HCE1D2BBCEDFE4F9A8FDC6285E739EA4D"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="H9BD480F6DA844953B5363063B3C2BDF7"><enum>(2)</enum><header>Exception</header><text>Paragraph
(1) shall not apply with respect to false statements made with actual
malice.</text>
</paragraph></subsection></section><section id="H7210DAB63B3344079F78ED0FF071FEE8"><enum>403.</enum><header>Producer
database</header>
<subsection id="HBBDE4FF3FAB94061A0A4911A4DAD4F9B"><enum>(a)</enum><header>In
general</header><text>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.</text>
</subsection><subsection id="HBF15D89F450444B1877BC808C94D43BE"><enum>(b)</enum><header>Maintenance</header><text>The
Commissioner may delegate authority over the maintenance of each database
described in subsection (a) to an insurance self-regulatory
organization.</text>
</subsection></section><section id="H942F08C3B2924413A4A3C89C7FCEFF64"><enum>404.</enum><header>Duty to
supervise</header>
<subsection id="H9BB71A29DCA448B4A9DA787C7EA69D74"><enum>(a)</enum><header>National
insurers</header><text>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—</text>
<paragraph id="HD56FE0D85786432F9A1749A862BDFB5C"><enum>(1)</enum><text>such producer is
an—</text>
<subparagraph id="H0A1CF671DEDA403D8CAA3FAA8C761A30"><enum>(A)</enum><text>employee of the
national insurer; or</text>
</subparagraph><subparagraph id="H386A55F38B9A442CA5991599BAA7D834"><enum>(B)</enum><text>agent of the
national insurer; and</text>
</subparagraph></paragraph><paragraph id="HACA5F9D9AE7C4B98BF9D3798871EB3E4"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection commented="no" id="HAA6ABEAAE1B642D987BD1CBD77FF4C26"><enum>(b)</enum><header>National
insurance agencies</header><text display-inline="yes-display-inline">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—</text>
<paragraph commented="no" id="H529D59F30CB04FA0AE441ED38B47F50D"><enum>(1)</enum><text>is an employee of
such agency and the sale, solicitation, and negotiation of insurance is within
the scope of employment of the producer; or</text>
</paragraph><paragraph commented="no" id="HAE525877ADD64E968A6BEB83D94FFCAB"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection commented="no" id="H29D7253DDFEB47E6851DB5BC59140C4E"><enum>(c)</enum><header>Standards for
supervision</header><text>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.</text>
</subsection><subsection id="H29AE1FCAEF3C496B8E5496E1F7BA2C33"><enum>(d)</enum><header>Exemption</header><text>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.</text>
</subsection><subsection commented="no" id="HF9E9CA2213194E02B0F77727E3891800"><enum>(e)</enum><header>No
duty</header><text>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).</text>
</subsection><subsection id="H92C2F9F6CE2646B6A8C97A0FE2769E0E"><enum>(f)</enum><header>Oversight of
independent national insurance producers</header>
<paragraph id="HFB3989917C564D4384E8BC170ED8C986"><enum>(1)</enum><header>In
general</header><text>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).</text>
</paragraph><paragraph id="H2458953216734CB1A4A1A08EA1EADC0E"><enum>(2)</enum><header>Standards and
procedures</header><text>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).</text>
</paragraph></subsection></section><section id="HFD5E5B3032F2429D8BA9D4C7DF722841"><enum>405.</enum><header>Relationship to
State law</header>
<subsection id="HCCB47EB5BEA2458E8F08FCC46AEEB212"><enum>(a)</enum><header>No State
restrictions</header><text>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.</text>
</subsection><subsection id="H75898423FC7D485A8E746E8A476E74F9"><enum>(b)</enum><header>Acts protected
from State restrictions</header><text>The acts referred to in subsection (a)
are the following:</text>
<paragraph id="H08B84732D298408F88362DAA18A290C8"><enum>(1)</enum><text>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.</text>
</paragraph><paragraph id="HC4A2248A909644269C846C92A8E97060"><enum>(2)</enum><text>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.</text>
</paragraph><paragraph id="H8D516872FDF647CFA4BD3600CB943FF7"><enum>(3)</enum><text>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.</text>
</paragraph><paragraph id="H799971494EF24D39BB8B63869EE08AC4"><enum>(4)</enum><text>Directly or
indirectly underwriting, collecting charges or premiums, or adjusting or
settling claim, in connection with policies of insurance written by a national
insurer.</text>
</paragraph></subsection><subsection id="H45E52B9CFD0B49C585DA87EBAAFB466D"><enum>(c)</enum><header>Activities of
national insurance producers</header><text>No State may—</text>
<paragraph id="HFA5E68ED0B4D4EB4A0EBAFAB96D9241C"><enum>(1)</enum><text>prevent or
restrict a national insurance producer from engaging in any activity authorized
by this title; or</text>
</paragraph><paragraph id="HF24BBD9105244D7D89027B32ACD75AE6"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="H3CB7C1540B07469F94E53413842E8FF0"><enum>(d)</enum><header>Activities of
State insurance producers</header><text>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.</text>
</subsection><subsection id="H2FF8A00578A0450DB2E89F1313A36663"><enum>(e)</enum><header>International
agreements</header><text>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—</text>
<paragraph id="HCA63AF8D3DC0491F8E2FC86B6BC3A24D"><enum>(1)</enum><text>prevent or
restrict such non-United States insurer from engaging in the activities
authorized under such agreement; or</text>
</paragraph><paragraph id="HF1094501082D436B94B60B8CD6E6DF85"><enum>(2)</enum><text>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.</text>
</paragraph></subsection></section><section id="HD9D09EE2C2654093A840FA629C2EEF6A"><enum>406.</enum><header>Licensing
commencement date</header><text display-inline="no-display-inline">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.</text>
</section><enum>V</enum><header>Change in control
and insurance holding companies</header>
<section id="HA4C22881D73049949269EDFE59ADC323"><enum>501.</enum><header>Change in
control</header>
<subsection id="H554680DD0E904D819DF87CB05EAFCD16"><enum>(a)</enum><header>In
general</header>
<paragraph id="HDDDF3ECB607E4FC09157FCE617B51020"><enum>(1)</enum><header>Limitation</header><text>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—</text>
<subparagraph id="HC153D9F3428748BD90BC831F9FB8F59A"><enum>(A)</enum><text>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</text>
</subparagraph><subparagraph id="H56608FD714FA46C7B2DBD0CA3179BE59"><enum>(B)</enum><text>the expiration of
the disapproval period and all extensions of such period referred to in
paragraph (2).</text>
</subparagraph></paragraph><paragraph id="H92C7D879BDDC44C99D0B9189835AAF14"><enum>(2)</enum><header>Disapproval
period</header>
<subparagraph id="HA7E96ED02FB34E039F6D04D2661DE698"><enum>(A)</enum><header>In
general</header><text>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).</text>
</subparagraph><subparagraph id="HB47B11AA43FF40D5988D08AC4432BE44"><enum>(B)</enum><header>Extension
authorized</header><text>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—</text>
<clause id="H73C267DA6FCE424F9AA63C787A387772"><enum>(i)</enum><text>the
Commissioner determines that an acquiring person has not furnished all the
information required under this section;</text>
</clause><clause id="H22F227E695F84D9DB94A27CB1EB951B2"><enum>(ii)</enum><text>in
the judgment of the Commissioner, any material information submitted is
substantially inaccurate;</text>
</clause><clause id="H48CDF2F9165E47DDBCB019DA4E82DBAA"><enum>(iii)</enum><text>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</text>
</clause><clause id="HB514BF0D7263454184A511358DA02096"><enum>(iv)</enum><text>the
Commissioner determines that additional time is needed—</text>
<subclause id="H4A1332E4AAAD48EFA33157BC6D9E07BA"><enum>(I)</enum><text>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</text>
</subclause><subclause id="H89CBB4ABDB404736AA526DD32680827A"><enum>(II)</enum><text>to analyze the
safety and soundness of any plans or proposals described in subsection (f)(6)
or the future prospects of the national insurer.</text>
</subclause></clause></subparagraph></paragraph></subsection><subsection id="H474562E3837C4D878DE5CFA0080E2532"><enum>(b)</enum><header>Investigation of
principals</header>
<paragraph id="H52FFEA4554D9414292D8CC17744507B9"><enum>(1)</enum><header>In
general</header><text>Upon receiving a notice under subsection (a)(1), the
Commissioner shall—</text>
<subparagraph id="H9B424B3A92C7467D875712F165BEC138"><enum>(A)</enum><text>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</text>
</subparagraph><subparagraph id="H216FB444424342B5B23EE6DCB716CBE0"><enum>(B)</enum><text>make an
independent determination of the accuracy and completeness of any information
described in subsection (f) with respect to such person.</text>
</subparagraph></paragraph><paragraph commented="no" id="HBCB8E0207FA145268502AC64B8461FA1"><enum>(2)</enum><header>Report</header><text>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.</text>
</paragraph></subsection><subsection id="H97017F10D82A4A6BB29D5C7D6D12AB79"><enum>(c)</enum><header>Public
comment</header><text>Upon receiving notice of a proposed acquisition, the
Commissioner shall, unless the Commissioner determines that an emergency
exists, within a reasonable period of time—</text>
<paragraph id="HBDCF781B6910418492B0CFC661B1BEC6"><enum>(1)</enum><text>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</text>
</paragraph><paragraph id="H84D52DE22B0546F59A7EF3FC8B307EFD"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="H802EF5739CFE4CECA18ADED18EFEC94D"><enum>(d)</enum><header>Grounds for
disapproval</header><text>The Commissioner may disapprove a proposed
acquisition, if—</text>
<paragraph id="HDAE262C104BB4A0986C7BA80EBDE3F50"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="H89F839D5652540EFA5A07E00561EDBB0"><enum>(2)</enum><text>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</text>
</paragraph><paragraph id="H1831F951EAE5481E93B49AAE565CF08D"><enum>(3)</enum><text>any acquiring
person neglects, fails, or refuses to furnish the Commissioner with all the
information required by the Commissioner.</text>
</paragraph></subsection><subsection id="H91FE9E2EAAA749FF8245FB1E4D694C18"><enum>(e)</enum><header>Notice of
disapproval, hearing</header>
<paragraph id="H65B12CD5E40C4E2986FABC29AB2D1534"><enum>(1)</enum><header>Notice of
disapproval</header><text>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.</text>
</paragraph><paragraph commented="no" id="H0E69699084684A7F86C66EE6A17D741E"><enum>(2)</enum><header>Hearing</header>
<subparagraph id="H5CD65A0A1DD148E3A4F134AEE8126748"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph id="HB89A23A475A9499B9A178EA4D16050B9"><enum>(B)</enum><header>Standard of
review</header><text>A judge reviewing a notice of disapproval under paragraph
(1) shall determine whether the decision of the Commissioner is
reasonable.</text>
</subparagraph></paragraph><paragraph commented="no" id="H5C5BBB4F65194EC1880A68ED68C72850"><enum>(3)</enum><header>Judicial
review</header><text>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.</text>
</paragraph></subsection><subsection id="HD65F93B38CDC44508472DFF557010391"><enum>(f)</enum><header>Information</header><text display-inline="yes-display-inline">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.</text>
</subsection></section><section commented="no" id="H5C5ADA90993A43EEA88EAE79B15B5AC8"><enum>502.</enum><header>Reports by and
examinations of insurance holding companies</header>
<subsection commented="no" id="H24765CEF723640CDB0328479F35DCC78"><enum>(a)</enum><header>Reports</header><text>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.</text>
</subsection><subsection commented="no" id="H92A6C0F7FC044BC3B150D29E91950784"><enum>(b)</enum><header>Examinations</header><text>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.</text>
</subsection><subsection id="H87354B57E331434BBCD0EE79EB7AE57A"><enum>(c)</enum><header>Applicability to
non-United States insurance holding companies and
subsidiaries</header><text>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.</text>
</subsection><subsection commented="no" id="H3E435DFB0A3F412FB990C4EDEEA891AA"><enum>(d)</enum><header>Reports and
examinations filed with other agencies</header><text>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.</text>
</subsection><subsection commented="no" id="HB3B5B86065BC450EAC91FB8A400F5A9E"><enum>(e)</enum><header>Powers</header><text>The
powers authorized for the Commissioner in section 121 shall apply to reports by
and examinations of insurance holding companies and their subsidiaries.</text>
</subsection></section><section id="H48C51F4607A14BE8847B55984E35500F"><enum>503.</enum><header>Activities of
insurance holding companies and subsidiaries</header>
<subsection id="HAFE9121B2A264030B8F89254C34503B6"><enum>(a)</enum><header>In
general</header><text>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.</text>
</subsection><subsection id="H9226B2AEDFBF43AF8C05961B2ECD3D41"><enum>(b)</enum><header>Determination
and notice for corrective action</header><text>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.</text>
</subsection><subsection commented="no" id="H9257D147B7C94F099B93EDDCA0E53D57"><enum>(c)</enum><header>Hearing</header>
<paragraph id="HA118D5C6B9D04DDCB0CC109EC46CF40D"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="H1DFD20BD8B514651B616C197D469851B"><enum>(2)</enum><header>Standard of
review</header><text>A judge reviewing a notice issued pursuant to subsection
(b) shall determine whether the decision of the Commissioner is
reasonable.</text>
</paragraph></subsection><subsection commented="no" id="H4A935697C6704BC89558935394CB4182"><enum>(d)</enum><header>Judicial
review</header><text>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.</text>
</subsection><subsection id="H6AFC36112A264AC89C6DB956E81A9687"><enum>(e)</enum><header>Applicability to
non-United States insurance holding companies and
subsidiaries</header><text>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.</text>
</subsection></section><section id="HC3947F589B5F4FB8919523AA937ED147"><enum>504.</enum><header>Capital,
liquidity, dividend, operational, and other standards</header><text display-inline="no-display-inline">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.</text>
</section><section id="HA93A69AD5A7E43909C4E756C4DC02564"><enum>505.</enum><header>Affiliate
transactions</header>
<subsection id="H11CBF37D271240AD9FFC599082FA8784"><enum>(a)</enum><header>In
general</header><text>Transactions between a national insurer and any affiliate
shall be subject to the following standards:</text>
<paragraph id="HD6B73A54B6B84379B3CBCB72DBB90D77"><enum>(1)</enum><text>The terms shall be
fair, reasonable, and at least as favorable to the national insurer as those
that would be offered to, or would apply to, a nonaffiliate.</text>
</paragraph><paragraph id="H242F6DF8A2AB4D409F533F29926AB64F"><enum>(2)</enum><text>Charges or fees
for services performed shall be reasonable and at least as favorable to the
national insurer as those that would be offered to, or would apply to, a
nonaffiliate.</text>
</paragraph><paragraph id="H39BF7341DBDB437EABBF14534C9F2149"><enum>(3)</enum><text>Expenses incurred
and payment received shall be allocated to the national insurer in conformity
with customary insurance accounting practices consistently applied.</text>
</paragraph><paragraph id="H4C80C21B61C143F3B3474A09725B0236"><enum>(4)</enum><text>The books,
accounts, and records of each party to all such transactions shall be so
maintained as to clearly and accurately disclose the nature and details of the
transactions including such accounting information as is necessary to support
the reasonableness of the charges or fees to the respective parties.</text>
</paragraph><paragraph id="HD28CE054FDCA45599AAC09199ED62A6C"><enum>(5)</enum><text>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.</text>
</paragraph></subsection><subsection id="H7372F4912A9D4C6B9CDBA82F7A3F8351"><enum>(b)</enum><header>Approval of
certain transactions</header><text>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.</text>
</subsection></section><section id="HB637FEDEB390468C8DC20CFF349B0E1C"><enum>506.</enum><header>Relationship to
other laws</header>
<subsection id="HB2D890A77A834C07BE878EB48ACBF552"><enum>(a)</enum><header>Permitted
affiliation</header><text>A national insurer may be affiliated with an insurer
or agency that is not chartered or licensed under this Act.</text>
</subsection><subsection id="H790267C1F13843B789F4F4297223E898"><enum>(b)</enum><header>Reinsurance
pooling agreements</header><text>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.</text>
</subsection><subsection commented="no" id="H4ABA8EE6861543F79A9BBDA8CFE8E6C7"><enum>(c)</enum><header>Conflict with
other Federal laws</header><text>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).</text>
</subsection></section><section id="HF05EBFE869BE4F61838784F1E576D468"><enum>507.</enum><header>No delegation
permitted</header><text display-inline="no-display-inline">The Commissioner may
not delegate to any insurance self-regulatory organization any authority
conferred under this title with respect to regulation of a national insurer
that is an affiliate of a national insurance holding company.</text>
</section><enum>VI</enum><header>Conservatorship,
receivership, the payment of benefits and claims to policyholders, and
assessments on national insurers</header>
<section id="H4F21B94D6E174F00A7DCECE6926E1CAF"><enum>601.</enum><header>Appointment of
conservator or receiver</header>
<subsection commented="no" id="H949911C1BE3F4B9BB62339661556CAF7"><enum>(a)</enum><header>In
general</header><text>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.</text>
</subsection><subsection id="HFA2772FBEABF411C888EEDCEE9E98FBB"><enum>(b)</enum><header>Grounds for
appointment</header><text>The grounds for establishing a conservatorship or
receivership are as follows:</text>
<paragraph id="H29CC1AE9A85A47EDA081798E933713C8"><enum>(1)</enum><header>Insolvency</header><text>The
national insurer is insolvent.</text>
</paragraph><paragraph id="HA1A4CC9F27B24086BC9A8FE5A3AC9B91"><enum>(2)</enum><header>Substantial
dissipation</header><text>The national insurer has substantial dissipation of
assets or earnings due to—</text>
<subparagraph id="HA38FA3C4BC004772BDB56F5B32BB6D04"><enum>(A)</enum><text>a violation of any
provision of Federal or State law; or</text>
</subparagraph><subparagraph id="H7E5EBD029FB341F09F8890B3D772F9D6"><enum>(B)</enum><text>a hazardous
practice.</text>
</subparagraph></paragraph><paragraph id="H7A5048A17B164747B564F0AF120D6F87"><enum>(3)</enum><header>Hazardous
condition</header><text>The national insurer is in such condition that the
further transaction of business would be hazardous, financially or otherwise,
to policyholders, creditors, or the public.</text>
</paragraph><paragraph id="HD923BAE99265483C88B41FA61EC5AC8F"><enum>(4)</enum><header>Cease-and-desist
order</header><text>The national insurer has willfully violated a
cease-and-desist order.</text>
</paragraph><paragraph id="HF455755A8E034FA8BB60F46DDF23366B"><enum>(5)</enum><header>Concealment</header><text>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.</text>
</paragraph><paragraph id="H005C3527EC084E889435343762E306D8"><enum>(6)</enum><header>Inability to
meet obligations</header><text>The national insurer is likely to be unable to
pay its obligations or meet the demands of its creditors in the normal course
of business.</text>
</paragraph><paragraph id="H037AA3B6E17442F498766F4F4AD1278C"><enum>(7)</enum><header>Violation of
law</header><text>The national insurer has willfully and continuously violated
any law or regulation, or committed any hazardous practice or condition, that
is likely to—</text>
<subparagraph id="H5618B0CAC70B48F19CDF8047748565D3"><enum>(A)</enum><text>cause insolvency
or substantial dissipation of assets or earnings; or</text>
</subparagraph><subparagraph id="HC6F4D92205444CDE85C7C78DB2D94FD2"><enum>(B)</enum><text>weaken the
condition of the national insurer.</text>
</subparagraph></paragraph><paragraph id="H901CE072529842B3A1A2CCFBBCED5BE5"><enum>(8)</enum><header>Consent</header><text>The
national insurer, by resolution of its board of directors or its shareholders
or members, consents to the appointment.</text>
</paragraph><paragraph id="H9EA30897DDCD4B9A8141CB53D007DDDF"><enum>(9)</enum><header>Money
laundering</header><text>The Attorney General notifies the Commissioner in
writing that the national insurer has been found guilty of a criminal offense
under section 1956 or 1957 of title 18, United States Code, or section 5322 or
5324 of title 31, United States Code.</text>
</paragraph></subsection></section><section id="HC64FE6107916489E881CF8F146F9CD81"><enum>602.</enum><header>Establishment
of the National Insurance Guaranty Corporation</header>
<subsection id="HF06035DC933944A5A5DAE563A27E14D7"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established the National Insurance
Guaranty Corporation.</text>
</subsection><subsection id="H119485CC76D84A65B56FFFD32E87F0BE"><enum>(b)</enum><header>Director</header><text>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.</text>
</subsection><subsection id="H27984C2F2BDF4FC6866C8FDB9B85BDFD"><enum>(c)</enum><header>Nonprofit and
succession</header><text>The Corporation shall be a nonprofit corporation and
shall have succession until dissolved by an Act of Congress.</text>
</subsection><subsection id="H3293D307068F416F8091DEAF870B3242"><enum>(d)</enum><header>Application of
district of columbia nonprofit corporation act</header><text>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).</text>
</subsection></section><section id="HB41140710C7F4FA89017261473B172FA"><enum>603.</enum><header>Payment of
claims to policyholders of national insurers</header>
<subsection id="H5564C7AA96C84842B21F7D780C2F0003"><enum>(a)</enum><header>Life insurance
policies</header><text>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 <quote>Life and Health Insurance
Guaranty Association Model Act</quote> of the NAIC.</text>
</subsection><subsection id="H4C191328953844FC9E928DA5D78CA809"><enum>(b)</enum><header>Property and
casualty policies</header><text>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
<quote>Post-Assessment Property and Liability Insurance Guaranty Association
Model Act</quote> of the NAIC.</text>
</subsection></section><section id="HC87BB3D914E74FA189E37DE688190870"><enum>604.</enum><header>Assessments of
national insurers</header>
<subsection commented="no" id="HAB8D413670B34DFE9233602256180E97"><enum>(a)</enum><header>Assessments
authorized</header><text>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.</text>
</subsection><subsection id="H6375A79B3F144713866BC4FA5B03A3E0"><enum>(b)</enum><header>Notice and
imposition of assessments</header>
<paragraph id="H70F81EE806F441158084DBE61B8145DF"><enum>(1)</enum><header>Assessments only
to insurers in same line of business</header>
<subparagraph id="H72D31CAA8CA147CAB2BC46E6F6F6E25A"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph id="H28B8D872FEE94E1895A4B9ED5FB1E979"><enum>(B)</enum><header>Lines of
insurance</header><text>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.</text>
</subparagraph></paragraph><paragraph id="H314B8A0B1BA448C4A778FA4FC69C1BBC"><enum>(2)</enum><header>Written notice
required</header><text>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.</text>
</paragraph><paragraph id="H0D50525E18124C6BA6EF4EA822742E40"><enum>(3)</enum><header>Late
payment</header><text>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.</text>
</paragraph><paragraph id="H5B6733A0476E4400A5FF580E1EFA1227"><enum>(4)</enum><header>Assessments not
imposed until needed</header><text>The Director of the Corporation shall not
impose an assessment upon a national insurer until such funds are
needed.</text>
</paragraph><paragraph id="HF328C6D33E3849DE98EBF22C05A30885"><enum>(5)</enum><header>Amount of
assessment</header><text>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—</text>
<subparagraph id="H3B24D025A3A34450B239B7A45E2F5419"><enum>(A)</enum><text>an assessment rate
established by the Director of the Corporation by regulation; and</text>
</subparagraph><subparagraph id="H5EAA105CB43946E38F3F8D6579296F94"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="HB7FB1B5936DB46ECADB6C1FE03C528AC"><enum>(c)</enum><header>Abated or
deferred assessments</header><text>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.</text>
</subsection></section><section id="H3F9DA3D7A2AC4635A8DEDE50687ABD3A"><enum>605.</enum><header>Participation
in State guaranty associations</header>
<subsection commented="no" id="HF2CD20CB5E1542AC926B42DAA52626DE"><enum>(a)</enum><header>In
general</header><text>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.</text>
</subsection><subsection id="H166638A553B54E9B9013543568F17AF8"><enum>(b)</enum><header>Taxation</header><text>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.</text>
</subsection></section><section id="H4FF7347C1EE240629CA4807A5DC3E430"><enum>606.</enum><header>Report to
Congress</header><text display-inline="no-display-inline">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—</text>
<paragraph id="HB5EA308217B847D687A9F98E37C10074"><enum>(1)</enum><text>whether national
insurers should continue to be members of State guaranty associations;</text>
</paragraph><paragraph id="H911B51C37F47458F94D4C68DE93D38A3"><enum>(2)</enum><text display-inline="yes-display-inline">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</text>
</paragraph><paragraph id="H47921BDFF7824A31A2F802534747CFD5"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text>
</paragraph></section><enum>VII</enum><header>Miscellaneous
provisions</header>
<section id="H9F2F8B797AEF40ACBAFEE220D74BF5B5"><enum>701.</enum><header>Applicable
law</header>
<subsection id="HD24AC8629DC14B07AFE6299C558919ED"><enum>(a)</enum><header>Inapplicability
of State law</header><text>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.</text>
</subsection><subsection id="H270812F50D79477C9402E0F2D820A2AD"><enum>(b)</enum><header>No
discrimination</header><text>No State may discriminate against—</text>
<paragraph id="HD8A0D139A6E2499D9305DC3CA3C7E307"><enum>(1)</enum><text>any State insurer
because such insurer or any affiliate has applied to become, or has declared
its intention to become, a national insurer chartered under this Act;</text>
</paragraph><paragraph id="H27660BC7079E4F3EA9B1847F81C12BC2"><enum>(2)</enum><text>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;</text>
</paragraph><paragraph id="HA01DF47AA13F4C3DB480E91C35E48A52"><enum>(3)</enum><text>any affiliate of a
national insurer, national insurance agency, or a national insurance producer
because the affiliate is so affiliated;</text>
</paragraph><paragraph id="HF517FE3A4F6C45C284E47EE94F326AA3"><enum>(4)</enum><text>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</text>
</paragraph><paragraph id="H399817D094704E24B49C557EAA57E336"><enum>(5)</enum><text>any State-licensed
insurance producer (including with respect to such producer’s sales,
solicitation, or negotiation of any insurance policy written or sold by a State
insurer) because it sells, solicits, or negotiates an insurance policy written
or sold by a national insurer.</text>
</paragraph></subsection></section><section id="H5925F13E052A4465B341C3A2B9FB576A"><enum>702.</enum><header>Application of
the Federal antitrust laws</header>
<subsection id="HE046A59F6E57464B8B8821D71888C7B6"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">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:</text>
<paragraph id="H679D908151F24C1B9C70533416D4D5B6"><enum>(1)</enum><text>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.</text>
</paragraph><paragraph id="H22AA33E6B19B409A8AF5E24E5271716B"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="H28AF24B5FF5C4D17BAA1A2716CDC86EA"><enum>(b)</enum><header>Exception</header><text display-inline="yes-display-inline">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.</text>
</subsection></section>