1.Short title and table of
contents
(a)This Act may be cited
as the Nonadmitted and Reinsurance
Reform Act of 2009
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Effective date.
Title I—Nonadmitted insurance
Sec. 101. Reporting, payment, and allocation of premium
taxes.
Sec. 102. Regulation of nonadmitted insurance by insured’s home
State.
Sec. 103. Participation in national producer
database.
Sec. 104. Uniform standards for surplus lines
eligibility.
Sec. 105. Streamlined application for commercial
purchasers.
Sec. 106. GAO study of nonadmitted insurance
market.
Sec. 107. Definitions.
Title II—Reinsurance
Sec. 201. Regulation of credit for reinsurance and reinsurance
agreements.
Sec. 202. Regulation of reinsurer solvency.
Sec. 203. Definitions.
Title III—Rule of construction
Sec. 301. Rule of construction.
Sec. 302. Severability.
2.Except as otherwise
specifically provided in this Act, this Act shall take effect upon the
expiration of the 12-month period beginning on the date of the enactment of
this Act.
<enum>I</enum><header>Nonadmitted
insurance</header>
<section id="H544FACBFA0454217006068F1A29578EB"><enum>101.</enum><header>Reporting,
payment, and allocation of premium taxes</header>
<subsection id="HF75F7056D921411988D507BB90E99C93"><enum>(a)</enum><header>Home State’s
exclusive authority</header><text>No State other than the home State of an
insured may require any premium tax payment for nonadmitted insurance.</text>
</subsection><subsection id="HC33631E6C7BA4BAC98A17DD6D172F75D"><enum>(b)</enum><header>Allocation of
nonadmitted premium taxes</header>
<paragraph id="H7F152306AFCE487C84286EF853F4114"><enum>(1)</enum><header>In
general</header><text>The States may enter into a compact or otherwise
establish procedures to allocate among the States the premium taxes paid to an
insured’s home State described in subsection (a).</text>
</paragraph><paragraph display-inline="no-display-inline" id="H4AFA5BF27C624470A7B958C6CA494589"><enum>(2)</enum><header>Effective
date</header><text display-inline="yes-display-inline">Except as expressly
otherwise provided in such compact or other procedures, any such compact or
other procedures—</text>
<subparagraph id="H399BEF58712B4BBE9FF600F59398606D"><enum>(A)</enum><text display-inline="yes-display-inline">if adopted on or before the expiration of
the 330-day period that begins on the date of the enactment of this Act, shall
apply to any premium taxes that, on or after such date of enactment, are
required to be paid to any State that is subject to such compact or procedures;
and</text>
</subparagraph><subparagraph id="H1DB6C1365E57410B8BDBB41C424F7DA1"><enum>(B)</enum><text display-inline="yes-display-inline">if adopted after the expiration of such
330-day period, shall apply to any premium taxes that, on or after January 1 of
the first calendar year that begins after the expiration of such 330-day
period, are required to be paid to any State that is subject to such compact or
procedures.</text>
</subparagraph></paragraph><paragraph id="HD958124944244E18AB00FBB8D3BAE2B4"><enum>(3)</enum><header>Report</header><text display-inline="yes-display-inline">Upon the expiration of the 330-day period
referred to in paragraph (2), the NAIC may submit a report to the Committee on
Financial Services and Committee on the Judiciary of the House of
Representatives and the Committee on Banking, Housing, and Urban Affairs of the
Senate identifying and describing any compact or other procedures for
allocation among the States of premium taxes that have been adopted during such
period by any States.</text>
</paragraph><paragraph id="HA66CAD1655DD469D9F0046624D639113"><enum>(4)</enum><header>Nationwide
system</header><text>The Congress intends that each State adopt nationwide
uniform requirements, forms, and procedures, such as an interstate compact,
that provides for the reporting, payment, collection, and allocation of premium
taxes for nonadmitted insurance consistent with this section.</text>
</paragraph></subsection><subsection id="H048DC5D23BC14DF4A1457E748D470003"><enum>(c)</enum><header>Allocation based
on tax allocation report</header><text>To facilitate the payment of premium
taxes among the States, an insured’s home State may require surplus lines
brokers and insureds who have independently procured insurance to annually file
tax allocation reports with the insured’s home State detailing the portion of
the nonadmitted insurance policy premium or premiums attributable to
properties, risks or exposures located in each State. The filing of a
nonadmitted insurance tax allocation report and the payment of tax may be made
by a person authorized by the insured to act as its agent.</text>
</subsection></section><section id="HC357845F013642FCA84496E1F39CF027"><enum>102.</enum><header>Regulation of
nonadmitted insurance by insured’s home State</header>
<subsection id="H065C8FEEB1FE46C4AC15FD20F43BD082"><enum>(a)</enum><header>Home State
authority</header><text display-inline="yes-display-inline">Except as otherwise
provided in this section, the placement of nonadmitted insurance shall be
subject to the statutory and regulatory requirements solely of the insured’s
home State.</text>
</subsection><subsection id="HCA40CC47AC3F41F38CE1F4173C9949DE"><enum>(b)</enum><header>Broker
licensing</header><text>No State other than an insured’s home State may require
a surplus lines broker to be licensed in order to sell, solicit, or negotiate
nonadmitted insurance with respect to such insured.</text>
</subsection><subsection id="H7BB8ED67ADBE49FAAB6B4798CC2FA31"><enum>(c)</enum><header>Enforcement
provision</header><text>With respect to section 101 and subsections (a) and (b)
of this section, any law, regulation, provision, or action of any State that
applies or purports to apply to nonadmitted insurance sold to, solicited by, or
negotiated with an insured whose home State is another State shall be preempted
with respect to such application.</text>
</subsection><subsection id="H30432579BDC0408FA905003706243700"><enum>(d)</enum><header>Workers’
compensation exception</header><text display-inline="yes-display-inline">This
section may not be construed to preempt any State law, rule, or regulation that
restricts the placement of workers’ compensation insurance or excess insurance
for self-funded workers’ compensation plans with a nonadmitted insurer.</text>
</subsection></section><section id="HCC4B0AD7E1994B6BB9ACAAFEEC6581"><enum>103.</enum><header>Participation in
national producer database</header><text display-inline="no-display-inline">After the expiration of the 2-year period
beginning on the date of the enactment of this Act, a State may not collect any
fees relating to licensing of an individual or entity as a surplus lines broker
in the State unless the State has in effect at such time laws or regulations
that provide for participation by the State in the national insurance producer
database of the NAIC, or any other equivalent uniform national database, for
the licensure of surplus lines brokers and the renewal of such licenses.</text>
</section><section id="H237CFA1325BA4BA1A7A93F75A4144F7D"><enum>104.</enum><header>Uniform
standards for surplus lines eligibility</header><text display-inline="no-display-inline">A State may not—</text>
<paragraph id="HCB52519D194948AB8186C66FC6D91F28"><enum>(1)</enum><text display-inline="yes-display-inline">impose eligibility requirements on, or
otherwise establish eligibility criteria for, nonadmitted insurers domiciled in
a United States jurisdiction, except in conformance with such requirements and
criteria in sections 5A(2) and 5C(2)(a) of the Non-Admitted Insurance Model
Act, unless the State has adopted nationwide uniform requirements, forms, and
procedures developed in accordance with section 101(b) of this Act that include
alternative nationwide uniform eligibility requirements; and</text>
</paragraph><paragraph id="HB37085102BF5447E87E1EA92191EF814"><enum>(2)</enum><text display-inline="yes-display-inline">prohibit a surplus lines broker from
placing nonadmitted insurance with, or procuring nonadmitted insurance from, a
nonadmitted insurer domiciled outside the United States that is listed on the
Quarterly Listing of Alien Insurers maintained by the International Insurers
Department of the NAIC.</text>
</paragraph></section><section id="HA6A99371C424427C945E3F8B35FDF0DC"><enum>105.</enum><header>Streamlined
application for commercial purchasers</header><text display-inline="no-display-inline">A surplus lines broker seeking to procure or
place nonadmitted insurance in a State for an exempt commercial purchaser shall
not be required to satisfy any State requirement to make a due diligence search
to determine whether the full amount or type of insurance sought by such exempt
commercial purchaser can be obtained from admitted insurers if—</text>
<paragraph id="HC3CF49EAC35E4651A3D5F6F286C0351"><enum>(1)</enum><text>the broker
procuring or placing the surplus lines insurance has disclosed to the exempt
commercial purchaser that such insurance may or may not be available from the
admitted market that may provide greater protection with more regulatory
oversight; and</text>
</paragraph><paragraph id="H0EC635461757411BA39BEA1DCFCB888D"><enum>(2)</enum><text>the exempt
commercial purchaser has subsequently requested in writing the broker to
procure or place such insurance from a nonadmitted insurer.</text>
</paragraph></section><section display-inline="no-display-inline" id="H7EE1B1BDB3FE4A50A9B152063F939C4" section-type="subsequent-section"><enum>106.</enum><header>GAO study of
nonadmitted insurance market</header>
<subsection id="HA6DC9D48B27E4512A1E4C0A9FAFA1831"><enum>(a)</enum><header>In
general</header><text>The Comptroller General of the United States shall
conduct a study of the nonadmitted insurance market to determine the effect of
the enactment of this title on the size and market share of the nonadmitted
insurance market for providing coverage typically provided by the admitted
insurance market.</text>
</subsection><subsection id="HFC031601AB424C8BA3BEF1B780B01298"><enum>(b)</enum><header>Contents</header><text>The
study shall determine and analyze—</text>
<paragraph id="HF1ECF38BF3FD4809976CEDC63200CC5D"><enum>(1)</enum><text>the change in the
size and market share of the nonadmitted insurance market and in the number of
insurance companies and insurance holding companies providing such business in
the 18-month period that begins upon the effective date of this Act;</text>
</paragraph><paragraph id="H5AD3029C184E42BBB12000E1C21772A"><enum>(2)</enum><text>the extent to which
insurance coverage typically provided by the admitted insurance market has
shifted to the nonadmitted insurance market;</text>
</paragraph><paragraph id="H3A50D4D5AB444B74ADC305A881D98D93"><enum>(3)</enum><text>the consequences
of any change in the size and market share of the nonadmitted insurance market,
including differences in the price and availability of coverage available in
both the admitted and nonadmitted insurance markets;</text>
</paragraph><paragraph id="H1A21B0EEF6414CD3ABCE32DA25D7349F"><enum>(4)</enum><text>the extent to
which insurance companies and insurance holding companies that provide both
admitted and nonadmitted insurance have experienced shifts in the volume of
business between admitted and nonadmitted insurance; and</text>
</paragraph><paragraph id="H8EFE4BF414C242C39B6F715579C77627"><enum>(5)</enum><text>the extent to
which there has been a change in the number of individuals who have nonadmitted
insurance policies, the type of coverage provided under such policies, and
whether such coverage is available in the admitted insurance market.</text>
</paragraph></subsection><subsection id="H628F232198394606BA296CCD00655646"><enum>(c)</enum><header>Consultation
with NAIC</header><text>In conducting the study under this section, the
Comptroller General shall consult with the NAIC.</text>
</subsection><subsection id="HF001F4FA33DA481AB6647CE540AE51AE"><enum>(d)</enum><header>Report</header><text>The
Comptroller General shall complete the study under this section and submit a
report to the Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the Senate
regarding the findings of the study not later than 30 months after the
effective date of this Act.</text>
</subsection></section><section id="HCC42C17E3E6A4D04A000C8B8B5B878BA"><enum>107.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title, the following
definitions shall apply:</text>
<paragraph id="H80B981919F6D4D509279811D9322DB69"><enum>(1)</enum><header>Admitted
insurer</header><text>The term <term>admitted insurer</term> means, with
respect to a State, an insurer licensed to engage in the business of insurance
in such State.</text>
</paragraph><paragraph id="HCD0565D3FA0545318F3886D1A06D8DFB"><enum>(2)</enum><header>Affiliate</header><text display-inline="yes-display-inline">The term <term>affiliate</term> means, with
respect to an insured, any entity that controls, is controlled by, or is under
common control with the insured.</text>
</paragraph><paragraph id="HC1FDCA572C2043EEAE50F2AA69546CCB"><enum>(3)</enum><header>Affiliated
group</header><text>The term <term>affiliated group</term> means any group of
entities that are all affiliated.</text>
</paragraph><paragraph id="HA9908D9F01B04D04B9D444E4038BD408"><enum>(4)</enum><header>Control</header><text>An
entity has <term>control</term> over another entity if—</text>
<subparagraph id="HF1B8352A5A10429D8558B839609AF93C"><enum>(A)</enum><text>the entity
directly or indirectly or acting through one or more other persons owns,
controls or has the power to vote 25 percent or more of any class of voting
securities of the other entity; or</text>
</subparagraph><subparagraph id="HEC78D376024E463CA6D8EC33D5DD7947"><enum>(B)</enum><text>the entity
controls in any manner the election of a majority of the directors or trustees
of the other entity.</text>
</subparagraph></paragraph><paragraph id="H7C8B84067F7049899426D127EE00DA12"><enum>(5)</enum><header>Exempt
commercial purchaser</header><text display-inline="yes-display-inline">The term
<term>exempt commercial purchaser</term> means any person purchasing commercial
insurance that, at the time of placement, meets the following
requirements:</text>
<subparagraph id="H00B4883F663F4504BD8011FEDC9134BB"><enum>(A)</enum><text>The person employs
or retains a qualified risk manager to negotiate insurance coverage.</text>
</subparagraph><subparagraph display-inline="no-display-inline" id="H462312FB725343D58FBE97F3BC582AA"><enum>(B)</enum><text>The person has paid
aggregate nationwide commercial property and casualty insurance premiums in
excess of $100,000 in the immediately preceding 12 months.</text>
</subparagraph><subparagraph id="HB9F92952184144699F7C72E9CCAA093C"><enum>(C)</enum><clause commented="no" display-inline="yes-display-inline" id="HAEE0BC3279B34845B9939E00D2AA3E77"><enum>(i)</enum><text>The person meets at
least one of the following criteria:</text>
<subclause id="HDA6D0394104B41A49D96AE76EBFC7322" indent="up1"><enum>(I)</enum><text>The person possesses a net worth in
excess of $20,000,000, as such amount is adjusted pursuant to clause
(ii).</text>
</subclause><subclause id="H0531FB2D20934B779E4F6F52C831FA34" indent="up1"><enum>(II)</enum><text>The person generates annual revenues in
excess of $50,000,000, as such amount is adjusted pursuant to clause
(ii).</text>
</subclause><subclause id="H1FD2FB4B85F147E38227D1D500C5BD16" indent="up1"><enum>(III)</enum><text>The person employs more than 500
full-time or full-time equivalent employees per individual insured or is a
member of an affiliated group employing more than 1,000 employees in the
aggregate.</text>
</subclause><subclause id="H98CACB32F93F46BDBB54135D7FA183B7" indent="up1"><enum>(IV)</enum><text>The person is a not-for-profit
organization or public entity generating annual budgeted expenditures of at
least $30,000,000, as such amount is adjusted pursuant to clause (ii).</text>
</subclause><subclause id="HB017F3AB598D48E49F3DAFBFAC78B400" indent="up1"><enum>(V)</enum><text>The person is a municipality with a
population in excess of 50,000 persons.</text>
</subclause></clause><clause id="HF4C85A857E0746840054BFA9FD6B2751" indent="up1"><enum>(ii)</enum><text>Effective on the fifth January 1
occurring after the date of the enactment of this Act and each fifth January 1
occurring thereafter, the amounts in subclauses (I), (II), and (IV) of clause
(i) shall be adjusted to reflect the percentage change for such five-year
period in the Consumer Price Index for All Urban Consumers published by the
Bureau of Labor Statistics of the Department of Labor.</text>
</clause></subparagraph></paragraph><paragraph commented="no" id="H9F995421EA1546C4AC8B05E9B9BA3E03"><enum>(6)</enum><header>Home
State</header>
<subparagraph id="H9E337BE99BE44B3CB98F29725C628513"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided in
subparagraph (B), the term <term>home State</term> means, with respect to an
insured—</text>
<clause id="H7499ABD85D31419B8B565FEFABCD7C3E"><enum>(i)</enum><text>the
State in which an insured maintains its principal place of business or, in the
case of an individual, the individual’s principal residence; or</text>
</clause><clause id="H023EC5C6B3184204A1D509194EDFBA4C"><enum>(ii)</enum><text display-inline="yes-display-inline">if 100 percent of the insured risk is
located out of the State referred to in subparagraph (A), the State to which
the greatest percentage of the insured’s taxable premium for that insurance
contract is allocated.</text>
</clause></subparagraph><subparagraph id="H0369195A41414049A12865C2245D844A"><enum>(B)</enum><header>Affiliated
groups</header><text>If more than one insured from an affiliated group are
named insureds on a single nonadmitted insurance contract, the term <term>home
State</term> means the home State, as determined pursuant to subparagraph (A),
of the member of the affiliated group that has the largest percentage of
premium attributed to it under such insurance contract.</text>
</subparagraph></paragraph><paragraph id="H5C937E0E495D412D001BADECFAAD3667"><enum>(7)</enum><header>Independently
procured insurance</header><text>The term <term>independently procured
insurance</term> means insurance procured directly by an insured from a
nonadmitted insurer.</text>
</paragraph><paragraph display-inline="no-display-inline" id="H9F85DB1EDCC645688C55CF954704028E"><enum>(8)</enum><header>NAIC</header><text>The
term <term>NAIC</term> means the National Association of Insurance
Commissioners or any successor entity.</text>
</paragraph><paragraph id="HBBB308DE8AF1456DB0FDF175324952D4"><enum>(9)</enum><header>Nonadmitted
insurance</header><text>The term <term>nonadmitted insurance</term> means any
property and casualty insurance permitted to be placed directly or through a
surplus lines broker with a nonadmitted insurer eligible to accept such
insurance.</text>
</paragraph><paragraph id="H1520AC690D5F4C5DA08502853E5E3485"><enum>(10)</enum><header>Non-admitted
insurance model act</header><text>The term <term>Non-Admitted Insurance Model
Act</term> means the provisions of the Non-Admitted Insurance Model Act, as
adopted by the NAIC on August 3, 1994, and amended on September 30, 1996,
December 6, 1997, October 2, 1999, and June 8, 2002.</text>
</paragraph><paragraph id="H3C059FC047A047369256C98BA212A3F1"><enum>(11)</enum><header>Nonadmitted
insurer</header><text>The term <term>nonadmitted insurer</term> means, with
respect to a State, an insurer not licensed to engage in the business of
insurance in such State.</text>
</paragraph><paragraph id="H19098761C7B04964A93733878FFA10C9"><enum>(12)</enum><header>Qualified risk
manager</header><text display-inline="yes-display-inline">The term
<term>qualified risk manager</term> means, with respect to a policyholder of
commercial insurance, a person who meets all of the following
requirements:</text>
<subparagraph id="H416009772CEA4EE3B693E5A767B66F18"><enum>(A)</enum><text>The person is an
employee of, or third party consultant retained by, the commercial
policyholder.</text>
</subparagraph><subparagraph id="HF3167E278C254EDEB7AA9F94155C6F"><enum>(B)</enum><text>The person provides
skilled services in loss prevention, loss reduction, or risk and insurance
coverage analysis, and purchase of insurance.</text>
</subparagraph><subparagraph id="H55F6C04CBB9446F782C04127FBDD0D8"><enum>(C)</enum><text display-inline="yes-display-inline">The person—</text>
<clause id="H18585334351B4B79919111A170F3EC9C"><enum>(i)</enum><subclause commented="no" display-inline="yes-display-inline" id="H86D41D66ADC74459006DCCCBC507DDD9"><enum>(I)</enum><text>has a bachelor’s degree
or higher from an accredited college or university in risk management, business
administration, finance, economics, or any other field determined by a State
insurance commissioner or other State regulatory official or entity to
demonstrate minimum competence in risk management; and</text>
</subclause><subclause id="HFF0AC53DBF1C40E2921118CCEDB2EB27" indent="up1"><enum>(II)</enum><item commented="no" display-inline="yes-display-inline" id="H62FFDE9314DE4E4E83AFC327D2CB781C"><enum>(aa)</enum><text display-inline="yes-display-inline">has three years of experience in risk
financing, claims administration, loss prevention, risk and insurance analysis,
or purchasing commercial lines of insurance; or</text>
</item><item id="H6971D83F101F4FEC95BA4C141801C58D" indent="up1"><enum>(bb)</enum><text>has one of the following
designations:</text>
<subitem id="HCCCC40FBA3F64494AB37D05698790412"><enum>(AA)</enum><text>a designation as a Chartered Property
and Casualty Underwriter (in this subparagraph referred to as
<quote>CPCU</quote>) issued by the American Institute for CPCU/Insurance
Institute of America;</text>
</subitem><subitem id="H3DEAD5FBDAFB4B3089F62B95D09D1659"><enum>(BB)</enum><text>a designation as an Associate in Risk
Management (ARM) issued by the American Institute for CPCU/Insurance Institute
of America;</text>
</subitem><subitem id="HCD124C1B47FC4E5DA6CF86E24D8AD2D"><enum>(CC)</enum><text>a designation as Certified Risk
Manager (CRM) issued by the National Alliance for Insurance Education &
Research;</text>
</subitem><subitem id="H8C1552AB92554F00A1589814B084A6FA"><enum>(DD)</enum><text>a designation as a RIMS Fellow (RF)
issued by the Global Risk Management Institute; or</text>
</subitem><subitem id="H5A89B572288946F1B4AE13FCC3796704"><enum>(EE)</enum><text>any other designation, certification,
or license determined by a State insurance commissioner or other State
insurance regulatory official or entity to demonstrate minimum competency in
risk management;</text>
</subitem></item></subclause></clause><clause id="H525A8EA3C1CA47F693704D5F4CD5EB5E"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="H67007C6A50B149BCB900F3E6DF7E700"><enum>(I)</enum><text>has at least seven years
of experience in risk financing, claims administration, loss prevention, risk
and insurance coverage analysis, or purchasing commercial lines of insurance;
and</text>
</subclause><subclause id="H2055FC0AC039415E87000000BACCA22B" indent="up1"><enum>(II)</enum><text>has any one of the designations
specified in subitems (AA) through (EE) of clause (i)(II)(bb);</text>
</subclause></clause><clause id="HAEB5E0C053FD4B8580C17B6760F35B83"><enum>(iii)</enum><text>has at least 10
years of experience in risk financing, claims administration, loss prevention,
risk and insurance coverage analysis, or purchasing commercial lines of
insurance; or</text>
</clause><clause id="HC216C648AA8249EFB0685C1CD670BBFE"><enum>(iv)</enum><text display-inline="yes-display-inline">has a graduate degree from an accredited
college or university in risk management, business administration, finance,
economics, or any other field determined by a State insurance commissioner or
other State regulatory official or entity to demonstrate minimum competence in
risk management.</text>
</clause></subparagraph></paragraph><paragraph id="HC078466FD3D24B7FBD26DAD7A7D1B3C"><enum>(13)</enum><header>Premium
tax</header><text>The term <term>premium tax</term> means, with respect to
surplus lines or independently procured insurance coverage, any tax, fee,
assessment, or other charge imposed by a government entity directly or
indirectly based on any payment made as consideration for an insurance contract
for such insurance, including premium deposits, assessments, registration fees,
and any other compensation given in consideration for a contract of
insurance.</text>
</paragraph><paragraph id="H2BDC33EAE5A34125B68208BB4BF2E64"><enum>(14)</enum><header>Surplus lines
broker</header><text>The term <term>surplus lines broker</term> means an
individual, firm, or corporation which is licensed in a State to sell, solicit,
or negotiate insurance on properties, risks, or exposures located or to be
performed in a State with nonadmitted insurers.</text>
</paragraph><paragraph display-inline="no-display-inline" id="H4F2DE2E73022467E8E7C4FE6428582B5"><enum>(15)</enum><header>State</header><text>The
term <term>State</term> includes any State of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana
Islands, the Virgin Islands, and American Samoa.</text>
</paragraph></section><enum>II</enum><header>Reinsurance</header>
<section id="HC6107BB5A4694190987727A9CE044D66" section-type="subsequent-section"><enum>201.</enum><header>Regulation of credit
for reinsurance and reinsurance agreements</header>
<subsection id="H11ADC702A222436698AE61B6FDBA8E83"><enum>(a)</enum><header>Credit for
reinsurance</header><text>If the State of domicile of a ceding insurer is an
NAIC-accredited State, or has financial solvency requirements substantially
similar to the requirements necessary for NAIC accreditation, and recognizes
credit for reinsurance for the insurer’s ceded risk, then no other State may
deny such credit for reinsurance.</text>
</subsection><subsection display-inline="no-display-inline" id="HED111F8F6CF7481A935EE6F3845BF2C"><enum>(b)</enum><header>Additional
preemption of extraterritorial application of State law</header><text display-inline="yes-display-inline">In addition to the application of
subsection (a), all laws, regulations, provisions, or other actions of a State
that is not the domiciliary State of the ceding insurer, except those with
respect to taxes and assessments on insurance companies or insurance income,
are preempted to the extent that they—</text>
<paragraph id="H10744FD3FECC4CCCA6FD79EAC9E2008B"><enum>(1)</enum><text display-inline="yes-display-inline">restrict or eliminate the rights of the
ceding insurer or the assuming insurer to resolve disputes pursuant to
contractual arbitration to the extent such contractual provision is not
inconsistent with the provisions of title 9, United States Code;</text>
</paragraph><paragraph id="H1F71FB57710045D79C8FEC665ED02297"><enum>(2)</enum><text>require that a
certain State’s law shall govern the reinsurance contract, disputes arising
from the reinsurance contract, or requirements of the reinsurance
contract;</text>
</paragraph><paragraph id="H7121B62DF406477AA57F4B771CF16009"><enum>(3)</enum><text>attempt to enforce
a reinsurance contract on terms different than those set forth in the
reinsurance contract, to the extent that the terms are not inconsistent with
this title; or</text>
</paragraph><paragraph id="HDC678C492E9C4A2EBA49C3D1EF8951"><enum>(4)</enum><text>otherwise apply the
laws of the State to reinsurance agreements of ceding insurers not domiciled in
that State.</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="H2FCC20AABC1148FEB2EEF97CD9F6639" section-type="subsequent-section"><enum>202.</enum><header>Regulation of
reinsurer solvency</header>
<subsection id="HBAF204F837B84C24842156C2002EB536"><enum>(a)</enum><header>Domiciliary
state regulation</header><text display-inline="yes-display-inline">If the State
of domicile of a reinsurer is an NAIC-accredited State or has financial
solvency requirements substantially similar to the requirements necessary for
NAIC accreditation, such State shall be solely responsible for regulating the
financial solvency of the reinsurer.</text>
</subsection><subsection display-inline="no-display-inline" id="HB9ACA73758054E9CB29B58B93B605700"><enum>(b)</enum><header>Nondomiciliary
states</header>
<paragraph id="H7B8EB0C9A146423291D1D449E648855F"><enum>(1)</enum><header>Limitation on
financial information requirements</header><text display-inline="yes-display-inline">If the State of domicile of a reinsurer is
an NAIC-accredited State or has financial solvency requirements substantially
similar to the requirements necessary for NAIC accreditation, no other State
may require the reinsurer to provide any additional financial information other
than the information the reinsurer is required to file with its domiciliary
State.</text>
</paragraph><paragraph id="H841D2D82104041ABB80177D60714BFB4"><enum>(2)</enum><header>Receipt of
information</header><text display-inline="yes-display-inline">No provision of
this section shall be construed as preventing or prohibiting a State that is
not the State of domicile of a reinsurer from receiving a copy of any financial
statement filed with its domiciliary State.</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="H81BF9E7426E54C3AB9E26006FC29D304" section-type="subsequent-section"><enum>203.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title, the following
definitions shall apply:</text>
<paragraph id="H0AE0570ADC804571A326AFFD56FFC4C5"><enum>(1)</enum><header>Ceding
insurer</header><text>The term <term>ceding insurer</term> means an insurer
that purchases reinsurance.</text>
</paragraph><paragraph id="H6C3B3A441C0D4B88ABCB734CAAC93DF8"><enum>(2)</enum><header>Domiciliary
State</header><text>The terms <term>State of domicile</term> and
<term>domiciliary State</term> means, with respect to an insurer or reinsurer,
the State in which the insurer or reinsurer is incorporated or entered through,
and licensed.</text>
</paragraph><paragraph id="H625D76CB94BA459F9F5D64D431C51310"><enum>(3)</enum><header>Reinsurance</header><text>The
term <term>reinsurance</term> means the assumption by an insurer of all or part
of a risk undertaken originally by another insurer.</text>
</paragraph><paragraph id="H98367A9FF1CB4DB98ED95FF7E82CE8E1"><enum>(4)</enum><header>Reinsurer</header>
<subparagraph id="H5A5FAF13486944A4A676A600A8EA91AE"><enum>(A)</enum><header>In
general</header><text>The term <term>reinsurer</term> means an insurer to the
extent that the insurer—</text>
<clause id="H758534DC90DE4CF7962378E1CDC8E1C"><enum>(i)</enum><text>is
principally engaged in the business of reinsurance;</text>
</clause><clause id="H2C2ED325F9944EF789C5F127C8EB6C6B"><enum>(ii)</enum><text>does not conduct
significant amounts of direct insurance as a percentage of its net premiums;
and</text>
</clause><clause id="H3D6F3E3CA2E346E4B671BEC1F4FF167B"><enum>(iii)</enum><text>is
not engaged in an ongoing basis in the business of soliciting direct
insurance.</text>
</clause></subparagraph><subparagraph id="H3B591A27087F4B50A8A8EC16A0124E18"><enum>(B)</enum><header>Determination</header><text>A
determination of whether an insurer is a reinsurer shall be made under the laws
of the State of domicile in accordance with this paragraph.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H9E7224F5B8984762BA1DFF77C42F4D5D"><enum>(5)</enum><header>State</header><text>The
term <term>State</term> includes any State of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana
Islands, the Virgin Islands, and American Samoa.</text>
</paragraph></section><enum>III</enum><header>Rule of
construction</header>
<section id="H4C29A6153F16475CA6FF8DFB00F7D0BA"><enum>301.</enum><header>Rule of
construction</header><text display-inline="no-display-inline">Nothing in this
Act or amendments to this Act shall be construed to modify, impair, or
supersede the application of the antitrust laws. Any implied or actual conflict
between this Act and any amendments to this Act and the antitrust laws shall be
resolved in favor of the operation of the antitrust laws.</text>
</section><section id="H3622A237E17548839A4523659B19827E"><enum>302.</enum><header>Severability</header><text display-inline="no-display-inline">If any section or subsection of this Act, or
any application of such provision to any person or circumstance, is held to be
unconstitutional, the remainder of this Act, and the application of the
provision to any other person or circumstance, shall not be affected.</text>
</section>