[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4871 Reported in House (RH)]

                                                 Union Calendar No. 391
113th CONGRESS
  2d Session
                                H. R. 4871

                          [Report No. 113-523]

To reauthorize the Terrorism Risk Insurance Act of 2002, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 17, 2014

   Mr. Neugebauer (for himself and Mr. Westmoreland) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

                             July 16, 2014

Additional sponsors: Mr. Royce, Mr. Bachus, Mr. Mulvaney, Mr. McHenry, 
 Mr. Garrett, Mr. Stivers, Mr. Fincher, Mr. Huizenga of Michigan, Mr. 
 Ross, Ms. Granger, Mr. Olson, Mr. Carter, Mr. Smith of Texas, Mr. Sam 
  Johnson of Texas, Mr. Thornberry, Mr. Culberson, Mr. Sessions, Mr. 
Conaway, Mr. Weber of Texas, Mr. Stockman, Mr. Hall, Mr. Marchant, Mr. 
 Duffy, Mr. Luetkemeyer, Mr. Hurt, Mr. Rogers of Alabama, and Mr. Jolly

                             July 16, 2014

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on June 
                               17, 2014]


_______________________________________________________________________

                                 A BILL


 
To reauthorize the Terrorism Risk Insurance Act of 2002, and for other 
                               purposes.


 


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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``TRIA Reform Act of 
2014''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.

                          TITLE I--TRIA REFORM

Sec. 101. References.
Sec. 102. Extension of program.
Sec. 103. Certification of acts of terrorism.
Sec. 104. Separate treatment of conventional terrorism from NBCR 
                            terrorism.
Sec. 105. Availability of coverage.
Sec. 106. Terrorism loss risk-spreading premiums amount.
Sec. 107. Increase of aggregate retention amount; mandatory recoupment.
Sec. 108. Terrorism loss risk-spreading premium.
Sec. 109. Risk-sharing mechanisms.
Sec. 110. Reporting of terrorism insurance data.
Sec. 111. Delivery of notices to policyholders.
Sec. 112. Definition of control.
Sec. 113. Annual study of small insurer market competitiveness.
Sec. 114. CBO and OMB studies regarding budgeting for costs of Federal 
                            insurance programs.
Sec. 115. GAO study on upfront premiums and capital reserve fund.

 TITLE II--NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS REFORM

Sec. 201. Short title.
Sec. 202. Reestablishment of the National Association of Registered 
                            Agents and Brokers.

                          TITLE I--TRIA REFORM

SEC. 101. REFERENCES.

    Except as otherwise expressly provided, wherever in this title an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Terrorism Risk Insurance 
Act of 2002 (15 U.S.C. 6701 note).

SEC. 102. EXTENSION OF PROGRAM.

    (a) In General.--Subsection (a) of section 108 (15 U.S.C. 6701 
note) is amended by striking ``December 31, 2014'' and inserting 
``December 31, 2019''.
    (b) Program Years.--Subparagraph (G) of section 102(11) (15 U.S.C. 
6701 note) is amended by striking ``2014'' and inserting ``2019''.

SEC. 103. CERTIFICATION OF ACTS OF TERRORISM.

    (a) In General.--Paragraph (1) of section 102 (15 U.S.C. 6701 note) 
is amended--
            (1) in subparagraph (A), in the matter preceding clause 
        (i), by striking ``concurrence with the Secretary of State'' 
        and inserting ``consultation with the Secretary of Homeland 
        Security'';
            (2) in subparagraph (B)--
                    (A) in clause (i), by striking ``; or'' and 
                inserting a period;
                    (B) by striking clause (ii); and
                    (C) by striking ``terrorism if--'' and all that 
                follows through ``(i) the act'' and inserting 
                ``terrorism if the act'';
            (3) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (E) and (G), respectively;
            (4) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) Timing of certification.--
                            ``(i) Preliminary certification notice.--
                        The Secretary shall issue a preliminary 
                        certification notice indicating whether an act 
                        is expected to be a certified act of terrorism 
                        not later than 15 days after--
                                    ``(I) the date of the occurrence of 
                                a potential act of terrorism; or
                                    ``(II) the receipt of a petition 
                                seeking a preliminary certification 
                                decision submitted by an insurer having 
                                an in-force policy or policies that 
                                could be affected by a certification 
                                decision.
                            ``(ii) Final certification notice.--Not 
                        later than 90 days after the date of the 
                        occurrence of a potential act of terrorism or 
                        the receipt of a petition submitted to the 
                        Secretary pursuant to clause (i)(II), the 
                        Secretary shall issue a final certification 
                        notice indicating whether an act is a certified 
                        act of terrorism for purposes of this Act.
                            ``(iii) Rule of construction.--Failure to 
                        issue a preliminary certification notice under 
                        clause (i) shall not prevent the Secretary from 
                        issuing a final certification notice under 
                        clause (ii).''; and
            (5) by inserting before subparagraph (G), as so 
        redesignated by paragraph (3) of this subsection, the following 
        new subparagraph:
                    ``(F) Failure to make determination.--If the 
                Secretary does not certify, or make a determination not 
                to certify, an act as an act of terrorism before the 
                expiration of the 90-day period beginning on the 
                occurrence of such act, such act shall be treated for 
                purposes of this Act as having been determined by the 
                Secretary not to be an act of terrorism and such 
                determination shall be final and shall not be subject 
                to judicial review.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply to the Program Year for the Terrorism Insurance Program 
established by title I of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note) that begins on January 1, 2015, and Program Years 
thereafter.

SEC. 104. SEPARATE TREATMENT OF CONVENTIONAL TERRORISM FROM NBCR 
              TERRORISM.

    (a) Definition.--
            (1) In general.--Section 102 (15 U.S.C. 6701 note) is 
        amended--
                    (A) in paragraph (1), by inserting after 
                subparagraph (C), as added by section 103(a)(4) of this 
                Act, the following new subparagraph:
                    ``(D) Act of nbcr terrorism.--Each certification of 
                an act of terrorism under subparagraph (A) shall 
                include a determination of whether such act involves 
                NBCR terrorism.'';
                    (B) by redesignating paragraphs (9) through (16) as 
                paragraphs (10) through (17), respectively; and
                    (C) by inserting after paragraph (8) the following 
                new paragraph:
            ``(9) NBCR terrorism.--Notwithstanding paragraph (1), the 
        term `NBCR terrorism' means an act of terrorism to the extent 
        that the insured losses involve, regardless of any other cause 
        or event that contributes concurrently or in any sequence to 
        such insurance loss--
                    ``(A) an act of terrorism that is carried out by 
                means of the dispersal or application of radioactive 
                material, or through the use of a nuclear weapon or 
                device that involves or produces a nuclear reaction, 
                nuclear radiation, or radioactive contamination;
                    ``(B) the release of radioactive material, and it 
                appears that one purpose of the act of terrorism was to 
                release such material;
                    ``(C) an act of terrorism that is carried out by 
                means of the dispersal or application of pathogenic or 
                poisonous biological or chemical material; or
                    ``(D) the release of pathogenic or poisonous 
                biological or chemical material, and it appears that 
                one purpose of the act of terrorism was to release such 
                material.''.
            (2) Applicability.--The amendments made by paragraph (1) 
        shall apply to the Program Year for the Terrorism Insurance 
        Program established by title I of the Terrorism Risk Insurance 
        Act of 2002 (15 U.S.C. 6701 note) that begins on January 1, 
        2016, and Program Years thereafter.
    (b) Federal Share of Insured Loss Compensation.--Subparagraph (A) 
of section 103(e)(1) (15 U.S.C. 6701 note) is amended--
            (1) by striking ``The Federal share'' and inserting 
        ``Subject to subparagraphs (B) and (C), the Federal share'';
            (2) by striking ``an insurer during the Transition period'' 
        and inserting the following: ``an insurer--
                            ``(i) during the Transition period,'';
            (3) by inserting ``through the Program Year ending on 
        December 31, 2015,'' after ``each Program Year thereafter'';
            (4) by striking the period at the end and inserting ``; 
        and''; and
            (5) by adding at the end the following new clause:
                            ``(ii) shall be equal to--
                                    ``(I) except as provided in 
                                subclause (II)--
                                            ``(aa) during the Program 
                                        Year beginning on January 1, 
                                        2016, 84 percent of that 
                                        portion of the amount of such 
                                        insured losses that exceeds the 
                                        applicable insurer deductible 
                                        required to be paid during such 
                                        Program Year;
                                            ``(bb) during the Program 
                                        Year beginning on January 1, 
                                        2017, 83 percent of that 
                                        portion of the amount of such 
                                        insured losses that exceeds the 
                                        applicable insurer deductible 
                                        required to be paid during such 
                                        Program Year;
                                            ``(cc) during the Program 
                                        Year beginning on January 1, 
                                        2018, 82 percent of that 
                                        portion of the amount of such 
                                        insured losses that exceeds the 
                                        applicable insurer deductible 
                                        required to be paid during such 
                                        Program Year; and
                                            ``(dd) during the Program 
                                        Year beginning on January 1, 
                                        2019, 80 percent of that 
                                        portion of the amount of such 
                                        insured losses that exceeds the 
                                        applicable insurer deductible 
                                        required to be paid during such 
                                        Program Year; and
                                    ``(II) in the case of insured 
                                losses resulting from acts of NBCR 
                                terrorism, during the Program Year 
                                beginning on January 1, 2016, and each 
                                Program Year thereafter, 85 percent of 
                                that portion of the amount of such 
                                insured losses that exceeds the 
                                applicable insurer deductible required 
                                to be paid during such Program Year.''.
    (c) Program Trigger.--Subparagraph (B) of section 103(e)(1) (15 
U.S.C. 6701 note) is amended--
            (1) in the matter preceding clause (i)--
                    (A) by striking ``a certified act'' and inserting 
                ``certified acts''; and
                    (B) by striking ``such certified act'' and 
                inserting ``such certified acts'';
            (2) in clause (i) by striking ``or'' at the end;
            (3) in clause (ii), by striking the period at the end and 
        inserting the following ``through the Program Year ending on 
        December 31, 2015; or'';
            (4) by adding at the end the following:
                            ``(iii)(I) except as provided in subclause 
                        (II)--
                                    ``(aa) $200,000,000, with respect 
                                to such insured losses occurring in the 
                                Program Year beginning on January 1, 
                                2016;
                                    ``(bb) $300,000,000, with respect 
                                to such insured losses occurring in the 
                                Program Year beginning on January 1, 
                                2017;
                                    ``(cc) $400,000,000, with respect 
                                to such insured losses occurring in the 
                                Program Year beginning on January 1, 
                                2018; and
                                    ``(dd) $500,000,000, with respect 
                                to such insured losses occurring in the 
                                Program Year beginning on January 1, 
                                2019; and
                            ``(II) in the case of an act of NBCR 
                        terrorism, $100,000,000, with respect to such 
                        insured losses occurring in the Program Year 
                        beginning on January 1, 2016, or any Program 
                        Year thereafter.''; and
            (5) by adding after and below clause (iii), as added by 
        paragraph (4) of this subsection, the following:
                ``In determining the aggregate industry insured losses 
                resulting from certified acts of terrorism for purposes 
                of this subparagraph, the Secretary shall not consider 
                any act of terrorism resulting, in the aggregate, in 
                less than $50,000,000 in insured losses.''.

SEC. 105. AVAILABILITY OF COVERAGE.

    Subsection (c) of section 103 (15 U.S.C. 6701 note) is amended to 
read as follows:
    ``(c) Mandatory Availability.--
            ``(1) In general.--Except as provided in paragraph (2), 
        during each Program Year, each entity that meets the definition 
        of an insurer under section 102 shall make available--
                    ``(A) in all of its property and casualty insurance 
                policies, coverage for insured losses; and
                    ``(B) property and casualty insurance coverage for 
                insured losses that does not differ materially from the 
                terms, amounts, and other coverage limitations 
                applicable to losses arising from events other than 
                acts of terrorism.
            ``(2) No mandatory availability for small insurers.--The 
        Secretary shall provide, by regulation and in consultation with 
        State insurance regulatory authorities, that paragraph (1) 
        shall not apply for a Program Year with respect to any small 
        insurer (as such term is defined in such regulations by the 
        Secretary) that, at the option of the insurer, makes a request 
        for such inapplicability for such Program Year to the 
        appropriate State insurance regulatory authority for the State 
        in which such insurer is domiciled and is determined by such 
        State insurance regulatory authority to meet such requirements 
        for financial hardship or financial infeasibility of providing 
        coverage for insured losses as the Secretary shall establish in 
        such regulations. The insurer shall provide notice, in a manner 
        satisfactory to the State insurance regulatory authority, 
        informing affected prospective and current policyholders 
        whether such coverage is not provided by the insurer. This 
        paragraph may not be construed to require any State insurance 
        regulatory authority to undertake making determinations under 
        this paragraph.''.

SEC. 106. TERRORISM LOSS RISK-SPREADING PREMIUMS AMOUNT.

    (a) In General.--Subparagraph (C) of section 103(e)(7) (15 U.S.C. 
6701 note) is amended--
            (1) by striking ``subparagraphs (A) through (E)'' and 
        inserting ``subparagraphs (A) through (F)''; and
            (2) by striking ``133 percent'' and inserting ``150 
        percent''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply to the Program Year for the Terrorism Insurance Program 
established by title I of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note) that begins on January 1, 2016, and Program Years 
thereafter.

SEC. 107. INCREASE OF AGGREGATE RETENTION AMOUNT; MANDATORY RECOUPMENT.

    (a) In General.--Paragraph (6) of section 103(e) (15 U.S.C. 6701 
note) is amended--
            (1) in subparagraph (D)(ii), by striking ``and'' at the 
        end;
            (2) in subparagraph (E)--
                    (A) in the matter preceding clause (i), by 
                inserting ``through the Program Year ending on December 
                31, 2015'' before the comma; and
                    (B) in clause (ii), by striking the period at the 
                end and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(F) for the Program Year beginning January 1, 
                2016, and each Program Year thereafter, the lesser of--
                            ``(i) the amount that is equal to the sum 
                        of the insurer deductibles for the Program Year 
                        for all insurers participating in the Program; 
                        and
                            ``(ii) the aggregate amount, for all 
                        insurers, of insured losses during such Program 
                        Year.''.
    (b) Mandatory Recoupment.--
            (1) Amount; timing.--Paragraph (7) of section 103(e) (15 
        U.S.C. 6701 note) is amended--
                    (A) by striking subparagraphs (A) and (B) and 
                inserting the following new subparagraph:
                    ``(A) Mandatory recoupment amount.--For purposes of 
                this paragraph, the mandatory recoupment amount for 
                each of the periods referred to in subparagraphs (A) 
                through (F) of paragraph (6) shall be equal to the 
                lesser of--
                            ``(i) the aggregate amount, for all 
                        insurers, of insured losses during such period 
                        that are compensated by the Federal Government 
                        pursuant to paragraph (1); or
                            ``(ii) the insurance marketplace aggregate 
                        retention amount under paragraph (6) for such 
                        period.'';
                    (B) in subparagraph (E)(i)(III), by striking 
                ``after January 1, 2012'' and inserting ``before 
                December 31, 2014''; and
                    (C) by redesignating subparagraphs (C), (D), (E) 
                (as so amended), and (F) as subparagraphs (B), (C), 
                (D), and (E), respectively.
            (2) Conforming amendments.--Section 103(e) (15 U.S.C. 6701 
        note) is amended in paragraph (7)(D)(i), as so redesignated by 
        paragraph (1)(C) of this subsection, by striking ``subparagraph 
        (C)'' and inserting ``subparagraph (B)''.

SEC. 108. TERRORISM LOSS RISK-SPREADING PREMIUM.

    (a) In General.--Section 103(e) (15 U.S.C. 6701 note) is amended by 
striking paragraph (8) and inserting the following new paragraph:
            ``(8) Terrorism loss risk-spreading premiums.--
                    ``(A) Establishment.--After an act of terrorism, 
                the Secretary shall, to the extent provided in 
                paragraph (7)(B), and may, to the extent provided in 
                paragraph (7)(C), establish terrorism loss risk-
                spreading premiums, which shall be imposed as a 
                policyholder premium surcharge on property and casualty 
                insurance policies for all participating insurers in 
                force after the date of such establishment.
                    ``(B) Collection.--The Secretary shall provide for 
                insurers to collect terrorism loss risk-spreading 
                premiums and remit such amounts collected to the 
                Secretary.
                    ``(C) Determination of premiums.--In determining 
                the method and manner of imposing terrorism loss risk-
                spreading premiums, including the amount of such 
                premiums, the Secretary shall--
                            ``(i) impose such terrorism loss risk-
                        spreading premiums beginning with such period 
                        of coverage during the year as the Secretary 
                        determines appropriate, but shall commence 
                        imposition of such premiums not later than 18 
                        months after the occurrence of the act of 
                        terrorism for which such premiums are imposed;
                            ``(ii) base any terrorism loss risk-
                        spreading premium on a percentage of the 
                        premium amount charged for property and 
                        casualty insurance coverage under the policy; 
                        and
                            ``(iii) take into consideration--
                                    ``(I) the economic impact on 
                                commercial centers of urban areas, 
                                including the effect on commercial 
                                rents and commercial insurance 
                                premiums, particularly rents and 
                                premiums charged to small businesses, 
                                and the availability of lease space and 
                                commercial insurance within urban 
                                areas;
                                    ``(II) the risk factors related to 
                                rural areas and smaller commercial 
                                centers, including the potential 
                                exposure to loss and the likely 
                                magnitude of such loss, as well as any 
                                resulting cross-subsidization that 
                                might result; and
                                    ``(III) the various exposures to 
                                terrorism risk for different lines of 
                                insurance.
                    ``(D) Percentage limitation.--A terrorism loss 
                risk-spreading premium collected on a discretionary 
                basis pursuant to paragraph (7)(C) shall not be less 
                than, on an annual basis, the amount equal to 3 percent 
                of the premium charged for property and casualty 
                insurance coverage under the policy.
                    ``(E) Timing of premiums.--The Secretary may adjust 
                the timing of terrorism loss risk-spreading premiums to 
                provide for equivalent application of the provisions of 
                this title to policies that are not based on a calendar 
                year, or to apply such provisions on a daily, monthly, 
                or quarterly basis, as appropriate.''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply to the Program Year for the Terrorism Insurance Program 
established by title I of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note) that begins on January 1, 2016, and Program Years 
thereafter.

SEC. 109. RISK-SHARING MECHANISMS.

    (a) In General.--Section 103(e) (15 U.S.C. 6701 note) is amended by 
adding at the end the following new paragraph:
            ``(9) Risk-sharing mechanisms.--
                    ``(A) Finding; rule of construction.--The Congress 
                finds that it is desirable to encourage the growth of 
                nongovernmental, private market reinsurance capacity 
                for protection against losses arising from acts of 
                terrorism. Therefore, nothing in this title shall 
                prohibit insurers from developing risk-sharing 
                mechanisms (including mutual reinsurance facilities and 
                agreements, use of the capital markets, and insurance-
                linked securities) to voluntarily reinsure terrorism 
                losses between and among themselves that are not 
                subject to reimbursement under this section.
                    ``(B) Establishment of advisory committee.--The 
                Secretary shall appoint an Advisory Committee to--
                            ``(i) encourage the creation and 
                        development of such risk-sharing mechanisms;
                            ``(ii) assist the Secretary and be 
                        available to administer such risk-sharing 
                        mechanisms; and
                            ``(iii) develop articles of incorporation, 
                        bylaws, and a plan of operation for any long-
                        term reinsurance facility authorized or created 
                        in the future.
                    ``(C) Membership.--The Advisory Committee shall be 
                composed of nine members who are directors, officers, 
                or other employees of insurers, reinsurers, or capital 
                market participants that are participating or that 
                desire to participate in such mechanisms, and who are 
                representative of the affected sectors of the insurance 
                industry, including commercial property insurance, 
                commercial casualty insurance, reinsurance, and 
                alternative risk transfer industries.''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply to the Program Year for the Terrorism Insurance Program 
established by title I of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note) that begins on January 1, 2015, and Program Years 
thereafter.

SEC. 110. REPORTING OF TERRORISM INSURANCE DATA.

    Section 104 (15 U.S.C. 6701 note) is amended by adding at the end 
the following new subsection:
    ``(h) Reporting of Terrorism Insurance Data.--
            ``(1) Authority.--During the Program Year beginning on 
        January 1, 2016, and in each Program Year thereafter, the 
        Secretary shall require insurers participating in the Program 
        to submit to the Secretary such information regarding insurance 
        coverage for terrorism losses of such insurers as the Secretary 
        considers appropriate to analyze the effectiveness of the 
        Program, which shall include information regarding--
                    ``(A) lines of insurance with exposure to such 
                losses;
                    ``(B) premiums earned on such coverage;
                    ``(C) geographical location of exposures;
                    ``(D) pricing of such coverage;
                    ``(E) the take-up rate for such coverage;
                    ``(F) the amount of private reinsurance for acts of 
                terrorism purchased; and
                    ``(G) such other matters as the Secretary considers 
                appropriate.
            ``(2) Reports.--Not later than 6 months after the 
        termination of the Program Year beginning on January 1, 2016, 
        and not later than 6 months after the termination of each 
        Program Year thereafter, the Secretary shall 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 that includes--
                    ``(A) an analysis of the overall effectiveness of 
                the Program;
                    ``(B) an evaluation of any changes or trends in the 
                data collected under paragraph (1);
                    ``(C) an evaluation of whether any aspects of the 
                Program have the effect of discouraging or impeding 
                insurers from providing commercial property casualty 
                insurance coverage or coverage for acts of terrorism;
                    ``(D) an evaluation of the impact of the Program on 
                workers' compensation insurers;
                    ``(E) an evaluation of the impact on availability 
                and affordability of terrorism insurance coverage and 
                fiscal protection of the taxpayers of separate Federal 
                treatment under the Program for nuclear, biological, 
                chemical, and radiological terrorism; and
                    ``(F) in the case of the data reported in paragraph 
                (1)(B), an updated estimate of the total amount earned 
                since the commencement of Program Year 1.
            ``(3) Protection of data.--To the extent possible, the 
        Secretary shall contract with an insurance statistical 
        aggregator to collect the information described in paragraph 
        (1), which shall keep any nonpublic information confidential 
        and provide it to the Secretary in an aggregate form or in such 
        other form or manner that does not permit identification of the 
        insurer submitting such information.
            ``(4) Advance coordination.--Before collecting any data or 
        information under paragraph (1) from an insurer, or affiliate 
        of an insurer, the Secretary shall coordinate with the 
        appropriate State insurance regulatory authorities or their 
        representatives and any relevant government agency or publicly 
        available sources to determine if the information to be 
        collected is available from, and may be obtained in a timely 
        manner by, individually or collectively, such entities. If the 
        Secretary determines that such data or information is 
        available, and may be obtained in a timely matter, from such 
        entities, the Secretary shall obtain the data or information 
        from such entities. If the Secretary determines that such data 
        or information is not so available, the Secretary may collect 
        such data or information from an insurer and affiliates.
            ``(5) Confidentiality.--
                    ``(A) Retention of privilege.--The submission of 
                any non-publicly available data and information to the 
                Secretary and the sharing of any non-publicly available 
                data with or by the Secretary among other Federal 
                agencies, the State insurance regulatory authorities 
                and their collective agents, or any other entities 
                under this subsection shall not constitute a waiver of, 
                or otherwise affect, any privilege arising under 
                Federal or State law (including the rules of any 
                Federal or State court) to which the data or 
                information is otherwise subject.
                    ``(B) Continued application of prior 
                confidentiality agreements.--Any requirement under 
                Federal or State law to the extent otherwise 
                applicable, or any requirement pursuant to a written 
                agreement in effect between the original source of any 
                non-publicly available data or information and the 
                source of such data or information to the Secretary, 
                regarding the privacy or confidentiality of any data or 
                information in the possession of the source to the 
                Secretary, shall continue to apply to such data or 
                information after the data or information has been 
                provided pursuant to this subsection.
                    ``(C) Information-sharing agreement.--Any data or 
                information obtained by the Secretary under this 
                subsection may be made available to State insurance 
                regulatory authorities, individually or collectively 
                through an information-sharing agreement that--
                            ``(i) shall comply with applicable Federal 
                        law; and
                            ``(ii) shall not constitute a waiver of, or 
                        otherwise affect, any privilege under Federal 
                        or State law (including any privilege referred 
                        to in subparagraph (A) and the rules of any 
                        Federal or State court) to which the data or 
                        information is otherwise subject.
                    ``(D) Agency disclosure requirements.--Section 552 
                of title 5, United States Code, including any 
                exceptions thereunder, shall apply to any data or 
                information submitted under this subsection to the 
                Secretary by an insurer or affiliate of an insurer.''.

SEC. 111. DELIVERY OF NOTICES TO POLICYHOLDERS.

    Section 103(b)(2) (15 U.S.C. 6701 note) is amended--
            (1) in subparagraph (B), by striking ``, purchase,''; and
            (2) in subparagraph (C), by striking ``, purchase,''.

SEC. 112. DEFINITION OF CONTROL.

    Paragraph (3) of section 102 (15 U.S.C. 6701 note) is amended--
            (1) by redesignating subparagraphs (A), (B), and (C) as 
        clauses (i), (ii), and (iii), respectively and realigning such 
        clauses, as so redesignated, so as to be indented six ems from 
        the left margin;
            (2) in the matter preceding clause (i) (as so 
        redesignated), by striking ``An entity has'' and inserting the 
        following:
                    ``(A) In general.--An entity has''; and
            (3) by adding at the end the following new subparagraph:
                    ``(B) Rule of construction.--An entity, including 
                any affiliate thereof, does not have control over 
                another entity if, as of the date of the enactment of 
                the TRIA Reform Act of 2014, the entity is acting as an 
                attorney-in-fact, as defined by the Secretary, for the 
                other entity and such other entity is a reciprocal 
                insurer, provided that the entity is not, for reasons 
                other than the attorney-in-fact relationship, defined 
                as having control under subparagraph (A).''.

SEC. 113. ANNUAL STUDY OF SMALL INSURER MARKET COMPETITIVENESS.

    Section 108 (15 U.S.C. 6701 note) is amended by adding at the end 
the following new subsection:
    ``(h) Study of Small Insurer Market Competitiveness.--
            ``(1) In general.--The Secretary shall conduct an annual 
        study of small insurers participating in the Program, and 
        identify any competitive challenges small insurers face in the 
        terrorism risk insurance marketplace, including--
                    ``(A) changes to the market share, premium volume, 
                and policyholder surplus of small insurers relative to 
                large insurers;
                    ``(B) how the property and casualty insurance 
                market for terrorism risk differs between small and 
                large insurers, and whether such a difference exists 
                within other perils;
                    ``(C) the impact of the Program's mandatory 
                availability requirement under section 103(c) and the 
                voluntary opt-out for small insurers;
                    ``(D) the effect of increasing the trigger amount 
                for the Program under section 103(e)(1)(B)(iii)(I) on 
                small insurers;
                    ``(E) the availability and cost of private 
                reinsurance for small insurers; and
                    ``(F) the impact that State workers compensation 
                laws have on small insurers, particularly the impact of 
                mandatory, non-excludable participation and unlimited 
                financial liability.
            ``(2) Timing and report.--The Secretary shall complete the 
        first study under paragraph (1) and submit a report to the 
        Congress setting forth the findings and conclusions of the 
        study not later than June 30, 2016, and shall complete an 
        annual study under paragraph (1) and submit a report regarding 
        such study to the Congress by June 1 annually thereafter.''.

SEC. 114. CBO AND OMB STUDIES REGARDING BUDGETING FOR COSTS OF FEDERAL 
              INSURANCE PROGRAMS.

    Not later than the expiration of the 12-month period beginning on 
the date of the enactment of this Act, the Director of the 
Congressional Budget Office and the Director of the Office of 
Management and Budget shall each--
            (1) conduct a study to determine the feasibility of 
        applying accrual accounting concepts to budgeting for the costs 
        of the Terrorism Risk Insurance Program and for the costs of 
        the other Federal insurance programs; and
            (2) submit a report regarding such study to the Committees 
        on the Budget of the House of Representatives and the Senate, 
        which shall include a recommendation specifically addressing 
        the feasibility of applying fair value concepts to budgeting 
        for the costs of Federal insurance programs, including the 
        Terrorism Risk Insurance Program.

SEC. 115. GAO STUDY ON UPFRONT PREMIUMS AND CAPITAL RESERVE FUND.

    (a) Study.--Not later than 2 years after the date of the enactment 
of this Act, the Comptroller General of the United States shall 
complete a study on the viability of the Federal Government--
            (1) assessing and collecting upfront premiums on insurers 
        that participate in the Terrorism Risk Insurance Program 
        established under the Terrorism Risk Insurance Act of 2002 (15 
        U.S.C. 6701 note) (in this section referred to as the 
        ``Program''), which shall include a comparison of practices in 
        international markets to assess and collect premiums either 
        before or after terrorism losses are incurred; and
            (2) creating a capital reserve fund under the Program and 
        requiring insurers participating in the Program to dedicate 
        capital specifically for terrorism losses before such losses 
        are incurred, which shall include a comparison of practices in 
        international markets to establish reserve funds.
    (b) Required Content.--The study required under subsection (a) 
shall examine, but shall not be limited to, the following issues:
            (1) Upfront premiums.--With respect to upfront premiums 
        described in subsection (a)(1)--
                    (A) how the Federal Government could determine the 
                price of such upfront premiums on insurers that 
                participate in the Program;
                    (B) how the Federal Government could collect such 
                upfront premiums;
                    (C) how the Federal Government could ensure that 
                such upfront premiums are not spent for purposes other 
                than satisfying claims through the Program;
                    (D) how the assessment and collection of such 
                upfront premiums could affect take-up rates for 
                terrorism risk coverage in different regions and 
                industries;
                    (E) the effect of collecting such upfront premiums 
                on the private market for terrorism risk reinsurance; 
                and
                    (F) the size of the Federal Government subsidy 
                insurers currently receive through their participation 
                in the Program.
            (2) Capital reserve fund.--With respect to the capital 
        reserve fund described in subsection (a)(2)--
                    (A) how the creation of a capital reserve fund 
                would affect the Federal Government's fiscal exposure 
                under the Terrorism Risk Insurance Program and the 
                ability of the Program to meet its statutory purposes;
                    (B) how a capital reserve fund would impact 
                insurers and reinsurers, including liquidity, insurance 
                pricing, and capacity to provide terrorism risk 
                coverage;
                    (C) the feasibility of segregating funds 
                attributable to terrorism risk from funds attributable 
                to other insurance lines;
                    (D) how a capital reserve fund would be viewed and 
                treated under current Financial Accounting Standards 
                Board accounting rules and the tax laws; and
                    (E) how a capital reserve fund would affect the 
                States' ability to regulate insurers participating in 
                the Program.
            (3) International practices.--With respect to international 
        markets referred to in paragraphs (1) and (2) of subsection 
        (A), how other countries, if any--
                    (A) have established terrorism insurance 
                structures;
                    (B) charge premiums or otherwise collect funds to 
                pay for the costs of terrorism insurance structures, 
                including risk and administrative costs; and
                    (C) have established capital reserve funds to pay 
                for the costs of terrorism insurance structures.
            (4) Duration.--With respect to the capital reserve fund 
        described in subsection (a)(2), how the duration of the Program 
        would affect the viability of such capital reserve fund.
    (c) Report.--Upon completion of the study required under subsection 
(a), the Comptroller General shall submit a report on the results of 
such study to the Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial Services of the House of 
Representatives.
    (d) Public Availability.--The study and report required under this 
section shall be made available to the public in electronic form and 
shall be published on the website of the Government Accountability 
Office.

 TITLE II--NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS REFORM

SEC. 201. SHORT TITLE.

    This title may be cited as the ``National Association of Registered 
Agents and Brokers Reform Act of 2014''.

SEC. 202. REESTABLISHMENT OF THE NATIONAL ASSOCIATION OF REGISTERED 
              AGENTS AND BROKERS.

    (a) In General.--Subtitle C of title III of the Gramm-Leach-Bliley 
Act (15 U.S.C. 6751 et seq.) is amended to read as follows:

  ``Subtitle C--National Association of Registered Agents and Brokers

``SEC. 321. NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS.

    ``(a) Establishment.--There is established the National Association 
of Registered Agents and Brokers (referred to in this subtitle as the 
`Association').
    ``(b) Status.--The Association shall--
            ``(1) be a nonprofit corporation;
            ``(2) not be an agent or instrumentality of the Federal 
        Government;
            ``(3) be an independent organization that may not be merged 
        with or into any other private or public entity; and
            ``(4) except as otherwise provided in this subtitle, be 
        subject to, and have all the powers conferred upon, a nonprofit 
        corporation by the District of Columbia Nonprofit Corporation 
        Act (D.C. Code, sec. 29-301.01 et seq.) or any successor 
        thereto.

``SEC. 322. PURPOSE.

    ``The purpose of the Association shall be to provide a mechanism 
through which licensing, continuing education, and other nonresident 
insurance producer qualification requirements and conditions may be 
adopted and applied on a multi-state basis without affecting the laws, 
rules, and regulations, and preserving the rights of a State, 
pertaining to--
            ``(1) licensing, continuing education, and other 
        qualification requirements of insurance producers that are not 
        members of the Association;
            ``(2) resident or nonresident insurance producer 
        appointment requirements;
            ``(3) supervising and disciplining resident and nonresident 
        insurance producers;
            ``(4) establishing licensing fees for resident and 
        nonresident insurance producers so that there is no loss of 
        insurance producer licensing revenue to the State; and
            ``(5) prescribing and enforcing laws and regulations 
        regulating the conduct of resident and nonresident insurance 
        producers.

``SEC. 323. MEMBERSHIP.

    ``(a) Eligibility.--
            ``(1) In general.--Any insurance producer licensed in its 
        home State shall, subject to paragraphs (2) and (4), be 
        eligible to become a member of the Association.
            ``(2) Ineligibility for suspension or revocation of 
        license.--Subject to paragraph (3), an insurance producer is 
        not eligible to become a member of the Association if a State 
        insurance regulator has suspended or revoked the insurance 
        license of the insurance producer in that State.
            ``(3) Resumption of eligibility.--Paragraph (2) shall cease 
        to apply to any insurance producer if--
                    ``(A) the State insurance regulator reissues or 
                renews the license of the insurance producer in the 
                State in which the license was suspended or revoked, or 
                otherwise terminates or vacates the suspension or 
                revocation; or
                    ``(B) the suspension or revocation expires or is 
                subsequently overturned by a court of competent 
                jurisdiction.
            ``(4) Criminal history record check required.--
                    ``(A) In general.--An insurance producer who is an 
                individual shall not be eligible to become a member of 
                the Association unless the insurance producer has 
                undergone a criminal history record check that complies 
                with regulations prescribed by the Attorney General of 
                the United States under subparagraph (K).
                    ``(B) Criminal history record check requested by 
                home state.--An insurance producer who is licensed in a 
                State and who has undergone a criminal history record 
                check during the 2-year period preceding the date of 
                submission of an application to become a member of the 
                Association, in compliance with a requirement to 
                undergo such criminal history record check as a 
                condition for such licensure in the State, shall be 
                deemed to have undergone a criminal history record 
                check for purposes of subparagraph (A).
                    ``(C) Criminal history record check requested by 
                association.--
                            ``(i) In general.--The Association shall, 
                        upon request by an insurance producer licensed 
                        in a State, submit fingerprints or other 
                        identification information obtained from the 
                        insurance producer, and a request for a 
                        criminal history record check of the insurance 
                        producer, to the Federal Bureau of 
                        Investigation.
                            ``(ii) Procedures.--The board of directors 
                        of the Association (referred to in this 
                        subtitle as the `Board') shall prescribe 
                        procedures for obtaining and utilizing 
                        fingerprints or other identification 
                        information and criminal history record 
                        information, including the establishment of 
                        reasonable fees to defray the expenses of the 
                        Association in connection with the performance 
                        of a criminal history record check and 
                        appropriate safeguards for maintaining 
                        confidentiality and security of the 
                        information. Any fees charged pursuant to this 
                        clause shall be separate and distinct from 
                        those charged by the Attorney General pursuant 
                        to subparagraph (I).
                    ``(D) Form of request.--A submission under 
                subparagraph (C)(i) shall include such fingerprints or 
                other identification information as is required by the 
                Attorney General concerning the person about whom the 
                criminal history record check is requested, and a 
                statement signed by the person authorizing the Attorney 
                General to provide the information to the Association 
                and for the Association to receive the information.
                    ``(E) Provision of information by attorney 
                general.--Upon receiving a submission under 
                subparagraph (C)(i) from the Association, the Attorney 
                General shall search all criminal history records of 
                the Federal Bureau of Investigation, including records 
                of the Criminal Justice Information Services Division 
                of the Federal Bureau of Investigation, that the 
                Attorney General determines appropriate for criminal 
                history records corresponding to the fingerprints or 
                other identification information provided under 
                subparagraph (D) and provide all criminal history 
                record information included in the request to the 
                Association.
                    ``(F) Limitation on permissible uses of 
                information.--Any information provided to the 
                Association under subparagraph (E) may only--
                            ``(i) be used for purposes of determining 
                        compliance with membership criteria established 
                        by the Association;
                            ``(ii) be disclosed to State insurance 
                        regulators, or Federal or State law enforcement 
                        agencies, in conformance with applicable law; 
                        or
                            ``(iii) be disclosed, upon request, to the 
                        insurance producer to whom the criminal history 
                        record information relates.
                    ``(G) Penalty for improper use or disclosure.--
                Whoever knowingly uses any information provided under 
                subparagraph (E) for a purpose not authorized in 
                subparagraph (F), or discloses any such information to 
                anyone not authorized to receive it, shall be fined not 
                more than $50,000 per violation as determined by a 
                court of competent jurisdiction.
                    ``(H) Reliance on information.--Neither the 
                Association nor any of its Board members, officers, or 
                employees shall be liable in any action for using 
                information provided under subparagraph (E) as 
                permitted under subparagraph (F) in good faith and in 
                reasonable reliance on its accuracy.
                    ``(I) Fees.--The Attorney General may charge a 
                reasonable fee for conducting the search and providing 
                the information under subparagraph (E), and any such 
                fee shall be collected and remitted by the Association 
                to the Attorney General.
                    ``(J) Rule of construction.--Nothing in this 
                paragraph shall be construed as--
                            ``(i) requiring a State insurance regulator 
                        to perform criminal history record checks under 
                        this section; or
                            ``(ii) limiting any other authority that 
                        allows access to criminal history records.
                    ``(K) Regulations.--The Attorney General shall 
                prescribe regulations to carry out this paragraph, 
                which shall include--
                            ``(i) appropriate protections for ensuring 
                        the confidentiality of information provided 
                        under subparagraph (E); and
                            ``(ii) procedures providing a reasonable 
                        opportunity for an insurance producer to 
                        contest the accuracy of information regarding 
                        the insurance producer provided under 
                        subparagraph (E).
                    ``(L) Ineligibility for membership.--
                            ``(i) In general.--The Association may, 
                        under reasonably consistently applied 
                        standards, deny membership to an insurance 
                        producer on the basis of criminal history 
                        record information provided under subparagraph 
                        (E), or where the insurance producer has been 
                        subject to disciplinary action, as described in 
                        paragraph (2).
                            ``(ii) Rights of applicants denied 
                        membership.--The Association shall notify any 
                        insurance producer who is denied membership on 
                        the basis of criminal history record 
                        information provided under subparagraph (E) of 
                        the right of the insurance producer to--
                                    ``(I) obtain a copy of all criminal 
                                history record information provided to 
                                the Association under subparagraph (E) 
                                with respect to the insurance producer; 
                                and
                                    ``(II) challenge the denial of 
                                membership based on the accuracy and 
                                completeness of the information.
                    ``(M) Definition.--For purposes of this paragraph, 
                the term `criminal history record check' means a 
                national background check of criminal history records 
                of the Federal Bureau of Investigation.
    ``(b) Authority to Establish Membership Criteria.--The Association 
may establish membership criteria that bear a reasonable relationship 
to the purposes for which the Association was established.
    ``(c) Establishment of Classes and Categories of Membership.--
            ``(1) Classes of membership.--The Association may establish 
        separate classes of membership, with separate criteria, if the 
        Association reasonably determines that performance of different 
        duties requires different levels of education, training, 
        experience, or other qualifications.
            ``(2) Business entities.--The Association shall establish a 
        class of membership and membership criteria for business 
        entities. A business entity that applies for membership shall 
        be required to designate an individual Association member 
        responsible for the compliance of the business entity with 
        Association standards and the insurance laws, standards, and 
        regulations of any State in which the business entity seeks to 
        do business on the basis of Association membership.
            ``(3) Categories.--
                    ``(A) Separate categories for insurance producers 
                permitted.--The Association may establish separate 
                categories of membership for insurance producers and 
                for other persons or entities within each class, based 
                on the types of licensing categories that exist under 
                State laws.
                    ``(B) Separate treatment for depository 
                institutions prohibited.--No special categories of 
                membership, and no distinct membership criteria, shall 
                be established for members that are depository 
                institutions or for employees, agents, or affiliates of 
                depository institutions.
    ``(d) Membership Criteria.--
            ``(1) In general.--The Association may establish criteria 
        for membership which shall include standards for personal 
        qualifications, education, training, and experience. The 
        Association shall not establish criteria that unfairly limit 
        the ability of a small insurance producer to become a member of 
        the Association, including imposing discriminatory membership 
        fees.
            ``(2) Qualifications.--In establishing criteria under 
        paragraph (1), the Association shall not adopt any 
        qualification less protective to the public than that contained 
        in the National Association of Insurance Commissioners 
        (referred to in this subtitle as the `NAIC') Producer Licensing 
        Model Act in effect as of the date of enactment of the National 
        Association of Registered Agents and Brokers Reform Act of 
        2013, and shall consider the highest levels of insurance 
        producer qualifications established under the licensing laws of 
        the States.
            ``(3) Assistance from states.--
                    ``(A) In general.--The Association may request a 
                State to provide assistance in investigating and 
                evaluating the eligibility of a prospective member for 
                membership in the Association.
                    ``(B) Authorization of information sharing.--A 
                submission under subsection (a)(4)(C)(i) made by an 
                insurance producer licensed in a State shall include a 
                statement signed by the person about whom the 
                assistance is requested authorizing--
                            ``(i) the State to share information with 
                        the Association; and
                            ``(ii) the Association to receive the 
                        information.
                    ``(C) Rule of construction.--Subparagraph (A) shall 
                not be construed as requiring or authorizing any State 
                to adopt new or additional requirements concerning the 
                licensing or evaluation of insurance producers.
            ``(4) Denial of membership.--The Association may, based on 
        reasonably consistently applied standards, deny membership to 
        any State-licensed insurance producer for failure to meet the 
        membership criteria established by the Association.
    ``(e) Effect of Membership.--
            ``(1) Authority of association members.--Membership in the 
        Association shall--
                    ``(A) authorize an insurance producer to sell, 
                solicit, or negotiate insurance in any State for which 
                the member pays the licensing fee set by the State for 
                any line or lines of insurance specified in the home 
                State license of the insurance producer, and exercise 
                all such incidental powers as shall be necessary to 
                carry out such activities, including claims adjustments 
                and settlement to the extent permissible under the laws 
                of the State, risk management, employee benefits 
                advice, retirement planning, and any other insurance-
                related consulting activities;
                    ``(B) be the equivalent of a nonresident insurance 
                producer license for purposes of authorizing the 
                insurance producer to engage in the activities 
                described in subparagraph (A) in any State where the 
                member pays the licensing fee; and
                    ``(C) be the equivalent of a nonresident insurance 
                producer license for the purpose of subjecting an 
                insurance producer to all laws, regulations, provisions 
                or other action of any State concerning revocation, 
                suspension, or other enforcement action related to the 
                ability of a member to engage in any activity within 
                the scope of authority granted under this subsection 
                and to all State laws, regulations, provisions, and 
                actions preserved under paragraph (5).
            ``(2) Violent crime control and law enforcement act of 
        1994.--Nothing in this subtitle shall be construed to alter, 
        modify, or supercede any requirement established by section 
        1033 of title 18, United States Code.
            ``(3) Agent for remitting fees.--The Association shall act 
        as an agent for any member for purposes of remitting licensing 
        fees to any State pursuant to paragraph (1).
            ``(4) Notification of action.--
                    ``(A) In general.--The Association shall notify the 
                States (including State insurance regulators) and the 
                NAIC when an insurance producer has satisfied the 
                membership criteria of this section. The States 
                (including State insurance regulators) shall have 10 
                business days after the date of the notification in 
                order to provide the Association with evidence that the 
                insurance producer does not satisfy the criteria for 
                membership in the Association.
                    ``(B) Ongoing disclosures required.--On an ongoing 
                basis, the Association shall disclose to the States 
                (including State insurance regulators) and the NAIC a 
                list of the States in which each member is authorized 
                to operate. The Association shall immediately notify 
                the States (including State insurance regulators) and 
                the NAIC when a member is newly authorized to operate 
                in one or more States, or is no longer authorized to 
                operate in one or more States on the basis of 
                Association membership.
            ``(5) Preservation of consumer protection and market 
        conduct regulation.--
                    ``(A) In general.--No provision of this section 
                shall be construed as altering or affecting the 
                applicability or continuing effectiveness of any law, 
                regulation, provision, or other action of any State, 
                including those described in subparagraph (B), to the 
                extent that the State law, regulation, provision, or 
                other action is not inconsistent with the provisions of 
                this subtitle related to market entry for nonresident 
                insurance producers, and then only to the extent of the 
                inconsistency.
                    ``(B) Preserved regulations.--The laws, 
                regulations, provisions, or other actions of any State 
                referred to in subparagraph (A) include laws, 
                regulations, provisions, or other actions that--
                            ``(i) regulate market conduct, insurance 
                        producer conduct, or unfair trade practices;
                            ``(ii) establish consumer protections; or
                            ``(iii) require insurance producers to be 
                        appointed by a licensed or authorized insurer.
    ``(f) Biennial Renewal.--Membership in the Association shall be 
renewed on a biennial basis.
    ``(g) Continuing Education.--
            ``(1) In general.--The Association shall establish, as a 
        condition of membership, continuing education requirements 
        which shall be comparable to the continuing education 
        requirements under the licensing laws of a majority of the 
        States.
            ``(2) State continuing education requirements.--A member 
        may not be required to satisfy continuing education 
        requirements imposed under the laws, regulations, provisions, 
        or actions of any State other than the home State of the 
        member.
            ``(3) Reciprocity.--The Association shall not require a 
        member to satisfy continuing education requirements that are 
        equivalent to any continuing education requirements of the home 
        State of the member that have been satisfied by the member 
        during the applicable licensing period.
            ``(4) Limitation on the association.--The Association shall 
        not directly or indirectly offer any continuing education 
        courses for insurance producers.
    ``(h) Probation, Suspension and Revocation.--
            ``(1) Disciplinary action.--The Association may place an 
        insurance producer that is a member of the Association on 
        probation or suspend or revoke the membership of the insurance 
        producer in the Association, or assess monetary fines or 
        penalties, as the Association determines to be appropriate, 
        if--
                    ``(A) the insurance producer fails to meet the 
                applicable membership criteria or other standards 
                established by the Association;
                    ``(B) the insurance producer has been subject to 
                disciplinary action pursuant to a final adjudicatory 
                proceeding under the jurisdiction of a State insurance 
                regulator;
                    ``(C) an insurance license held by the insurance 
                producer has been suspended or revoked by a State 
                insurance regulator; or
                    ``(D) the insurance producer has been convicted of 
                a crime that would have resulted in the denial of 
                membership pursuant to subsection (a)(4)(L)(i) at the 
                time of application, and the Association has received a 
                copy of the final disposition from a court of competent 
                jurisdiction.
            ``(2) Violations of association standards.--The Association 
        shall have the power to investigate alleged violations of 
        Association standards.
            ``(3) Reporting.--The Association shall immediately notify 
        the States (including State insurance regulators) and the NAIC 
        when the membership of an insurance producer has been placed on 
        probation or has been suspended, revoked, or otherwise 
        terminated, or when the Association has assessed monetary fines 
        or penalties.
    ``(i) Consumer Complaints.--
            ``(1) In general.--The Association shall--
                    ``(A) refer any complaint against a member of the 
                Association from a consumer relating to alleged 
                misconduct or violations of State insurance laws to the 
                State insurance regulator where the consumer resides 
                and, when appropriate, to any additional State 
                insurance regulator, as determined by standards adopted 
                by the Association; and
                    ``(B) make any related records and information 
                available to each State insurance regulator to whom the 
                complaint is forwarded.
            ``(2) Telephone and other access.--The Association shall 
        maintain a toll-free number for purposes of this subsection 
        and, as practicable, other alternative means of communication 
        with consumers, such as an Internet webpage.
            ``(3) Final disposition of investigation.--State insurance 
        regulators shall provide the Association with information 
        regarding the final disposition of a complaint referred 
        pursuant to paragraph (1)(A), but nothing shall be construed to 
        compel a State to release confidential investigation reports or 
        other information protected by State law to the Association.
    ``(j) Information Sharing.--The Association may--
            ``(1) share documents, materials, or other information, 
        including confidential and privileged documents, with a State, 
        Federal, or international governmental entity or with the NAIC 
        or other appropriate entity referred to paragraphs (3) and (4), 
        provided that the recipient has the authority and agrees to 
        maintain the confidentiality or privileged status of the 
        document, material, or other information;
            ``(2) limit the sharing of information as required under 
        this subtitle with the NAIC or any other non-governmental 
        entity, in circumstances under which the Association determines 
        that the sharing of such information is unnecessary to further 
        the purposes of this subtitle;
            ``(3) establish a central clearinghouse, or utilize the 
        NAIC or another appropriate entity, as determined by the 
        Association, as a central clearinghouse, for use by the 
        Association and the States (including State insurance 
        regulators), through which members of the Association may 
        disclose their intent to operate in 1 or more States and pay 
        the licensing fees to the appropriate States; and
            ``(4) establish a database, or utilize the NAIC or another 
        appropriate entity, as determined by the Association, as a 
        database, for use by the Association and the States (including 
        State insurance regulators) for the collection of regulatory 
        information concerning the activities of insurance producers.
    ``(k) Effective Date.--The provisions of this section shall take 
effect on the later of--
            ``(1) the expiration of the 2-year period beginning on the 
        date of enactment of the National Association of Registered 
        Agents and Brokers Reform Act of 2013; and
            ``(2) the date of incorporation of the Association.

``SEC. 324. BOARD OF DIRECTORS.

    ``(a) Establishment.--There is established a board of directors of 
the Association, which shall have authority to govern and supervise all 
activities of the Association.
    ``(b) Powers.--The Board shall have such of the powers and 
authority of the Association as may be specified in the bylaws of the 
Association.
    ``(c) Composition.--
            ``(1) In general.--The Board shall consist of 13 members 
        who shall be appointed by the President, by and with the advice 
        and consent of the Senate, in accordance with the procedures 
        established under Senate Resolution 116 of the 112th Congress, 
        of whom--
                    ``(A) 8 shall be State insurance commissioners 
                appointed in the manner provided in paragraph (2), 1 of 
                whom shall be designated by the President to serve as 
                the chairperson of the Board until the Board elects one 
                such State insurance commissioner Board member to serve 
                as the chairperson of the Board;
                    ``(B) 3 shall have demonstrated expertise and 
                experience with property and casualty insurance 
                producer licensing; and
                    ``(C) 2 shall have demonstrated expertise and 
                experience with life or health insurance producer 
                licensing.
            ``(2) State insurance regulator representatives.--
                    ``(A) Recommendations.--Before making any 
                appointments pursuant to paragraph (1)(A), the 
                President shall request a list of recommended 
                candidates from the States through the NAIC, which 
                shall not be binding on the President. If the NAIC 
                fails to submit a list of recommendations not later 
                than 15 business days after the date of the request, 
                the President may make the requisite appointments 
                without considering the views of the NAIC.
                    ``(B) Political affiliation.--Not more than 4 Board 
                members appointed under paragraph (1)(A) shall belong 
                to the same political party.
                    ``(C) Former state insurance commissioners.--
                            ``(i) In general.--If, after offering each 
                        currently serving State insurance commissioner 
                        an appointment to the Board, fewer than 8 State 
                        insurance commissioners have accepted 
                        appointment to the Board, the President may 
                        appoint the remaining State insurance 
                        commissioner Board members, as required under 
                        paragraph (1)(A), of the appropriate political 
                        party as required under subparagraph (B), from 
                        among individuals who are former State 
                        insurance commissioners.
                            ``(ii) Limitation.--A former State 
                        insurance commissioner appointed as described 
                        in clause (i) may not be employed by or have 
                        any present direct or indirect financial 
                        interest in any insurer, insurance producer, or 
                        other entity in the insurance industry, other 
                        than direct or indirect ownership of, or 
                        beneficial interest in, an insurance policy or 
                        annuity contract written or sold by an insurer.
                    ``(D) Service through term.--If a Board member 
                appointed under paragraph (1)(A) ceases to be a State 
                insurance commissioner during the term of the Board 
                member, the Board member shall cease to be a Board 
                member.
            ``(3) Private sector representatives.--In making any 
        appointment pursuant to subparagraph (B) or (C) of paragraph 
        (1), the President may seek recommendations for candidates from 
        groups representing the category of individuals described, 
        which shall not be binding on the President.
            ``(4) State insurance commissioner defined.--For purposes 
        of this subsection, the term `State insurance commissioner' 
        means a person who serves in the position in State government, 
        or on the board, commission, or other body that is the primary 
        insurance regulatory authority for the State.
    ``(d) Terms.--
            ``(1) In general.--Except as provided under paragraph (2), 
        the term of service for each Board member shall be 2 years.
            ``(2) Exceptions.--
                    ``(A) 1-year terms.--The term of service shall be 1 
                year, as designated by the President at the time of the 
                nomination of the subject Board members for--
                            ``(i) 4 of the State insurance commissioner 
                        Board members initially appointed under 
                        paragraph (1)(A), of whom not more than 2 shall 
                        belong to the same political party;
                            ``(ii) 1 of the Board members initially 
                        appointed under paragraph (1)(B); and
                            ``(iii) 1 of the Board members initially 
                        appointed under paragraph (1)(C).
                    ``(B) Expiration of term.--A Board member may 
                continue to serve after the expiration of the term to 
                which the Board member was appointed for the earlier of 
                2 years or until a successor is appointed.
                    ``(C) Mid-term appointments.--A Board member 
                appointed to fill a vacancy occurring before the 
                expiration of the term for which the predecessor of the 
                Board member was appointed shall be appointed only for 
                the remainder of that term.
            ``(3) Successive terms.--Board members may be reappointed 
        to successive terms.
    ``(e) Initial Appointments.--The appointment of initial Board 
members shall be made no later than 90 days after the date of enactment 
of the National Association of Registered Agents and Brokers Reform Act 
of 2014.
    ``(f) Meetings.--
            ``(1) In general.--The Board shall meet--
                    ``(A) at the call of the chairperson;
                    ``(B) as requested in writing to the chairperson by 
                not fewer than 5 Board members; or
                    ``(C) as otherwise provided by the bylaws of the 
                Association.
            ``(2) Quorum required.--A majority of all Board members 
        shall constitute a quorum.
            ``(3) Voting.--Decisions of the Board shall require the 
        approval of a majority of all Board members present at a 
        meeting, a quorum being present.
            ``(4) Initial meeting.--The Board shall hold its first 
        meeting not later than 45 days after the date on which all 
        initial Board members have been appointed.
    ``(g) Restriction on Confidential Information.--Board members 
appointed pursuant to subparagraphs (B) and (C) of subsection (c)(1) 
shall not have access to confidential information received by the 
Association in connection with complaints, investigations, or 
disciplinary proceedings involving insurance producers.
    ``(h) Ethics and Conflicts of Interest.--The Board shall issue and 
enforce an ethical conduct code to address permissible and prohibited 
activities of Board members and Association officers, employees, 
agents, or consultants. The code shall, at a minimum, include 
provisions that prohibit any Board member or Association officer, 
employee, agent or consultant from--
            ``(1) engaging in unethical conduct in the course of 
        performing Association duties;
            ``(2) participating in the making or influencing the making 
        of any Association decision, the outcome of which the Board 
        member, officer, employee, agent, or consultant knows or had 
        reason to know would have a reasonably foreseeable material 
        financial effect, distinguishable from its effect on the public 
        generally, on the person or a member of the immediate family of 
        the person;
            ``(3) accepting any gift from any person or entity other 
        than the Association that is given because of the position held 
        by the person in the Association;
            ``(4) making political contributions to any person or 
        entity on behalf of the Association; and
            ``(5) lobbying or paying a person to lobby on behalf of the 
        Association.
    ``(i) Compensation.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        Board member may receive any compensation from the Association 
        or any other person or entity on account of Board membership.
            ``(2) Travel expenses and per diem.--Board members may be 
        reimbursed only by the Association for travel expenses, 
        including per diem in lieu of subsistence, at rates consistent 
        with rates authorized for employees of Federal agencies under 
        subchapter I of chapter 57 of title 5, United States Code, 
        while away from home or regular places of business in 
        performance of services for the Association.

``SEC. 325. BYLAWS, STANDARDS, AND DISCIPLINARY ACTIONS.

    ``(a) Adoption and Amendment of Bylaws and Standards.--
            ``(1) Procedures.--The Association shall adopt procedures 
        for the adoption of bylaws and standards that are similar to 
        procedures under subchapter II of chapter 5 of title 5, United 
        States Code (commonly known as the `Administrative Procedure 
        Act').
            ``(2) Copy required to be filed.--The Board shall submit to 
        the President, through the Department of the Treasury, and the 
        States (including State insurance regulators), and shall 
        publish on the website of the Association, all proposed bylaws 
        and standards of the Association, or any proposed amendment to 
        the bylaws or standards of the Association, accompanied by a 
        concise general statement of the basis and purpose of such 
        proposal.
            ``(3) Effective date.--Any proposed bylaw or standard of 
        the Association, and any proposed amendment to the bylaws or 
        standards of the Association, shall take effect, after notice 
        under paragraph (2) and opportunity for public comment, on such 
        date as the Association may designate, unless suspended under 
        section 329(c).
            ``(4) Rule of construction.--Nothing in this section shall 
        be construed to subject the Board or the Association to the 
        requirements of subchapter II of chapter 5 of title 5, United 
        States Code (commonly known as the `Administrative Procedure 
        Act').
    ``(b) Disciplinary Action by the Association.--
            ``(1) Specification of charges.--In any proceeding to 
        determine whether membership shall be denied, suspended, 
        revoked, or not renewed, or to determine whether a member of 
        the Association should be placed on probation (referred to in 
        this section as a `disciplinary action') or whether to assess 
        fines or monetary penalties, the Association shall bring 
        specific charges, notify the member of the charges, give the 
        member an opportunity to defend against the charges, and keep a 
        record.
            ``(2) Supporting statement.--A determination to take 
        disciplinary action shall be supported by a statement setting 
        forth--
                    ``(A) any act or practice in which the member has 
                been found to have been engaged;
                    ``(B) the specific provision of this subtitle or 
                standard of the Association that any such act or 
                practice is deemed to violate; and
                    ``(C) the sanction imposed and the reason for the 
                sanction.
            ``(3) Ineligibility of private sector representatives.--
        Board members appointed pursuant to section 324(c)(3) may not--
                    ``(A) participate in any disciplinary action or be 
                counted toward establishing a quorum during a 
                disciplinary action; and
                    ``(B) have access to confidential information 
                concerning any disciplinary action.

``SEC. 326. POWERS.

    ``In addition to all the powers conferred upon a nonprofit 
corporation by the District of Columbia Nonprofit Corporation Act, the 
Association shall have the power to--
            ``(1) establish and collect such membership fees as the 
        Association finds necessary to impose to cover the costs of its 
        operations;
            ``(2) adopt, amend, and repeal bylaws, procedures, or 
        standards governing the conduct of Association business and 
        performance of its duties;
            ``(3) establish procedures for providing notice and 
        opportunity for comment pursuant to section 325(a);
            ``(4) enter into and perform such agreements as necessary 
        to carry out the duties of the Association;
            ``(5) hire employees, professionals, or specialists, and 
        elect or appoint officers, and to fix their compensation, 
        define their duties and give them appropriate authority to 
        carry out the purposes of this subtitle, and determine their 
        qualification;
            ``(6) establish personnel policies of the Association and 
        programs relating to, among other things, conflicts of 
        interest, rates of compensation, where applicable, and 
        qualifications of personnel;
            ``(7) borrow money; and
            ``(8) secure funding for such amounts as the Association 
        determines to be necessary and appropriate to organize and 
        begin operations of the Association, which shall be treated as 
        loans to be repaid by the Association with interest at market 
        rate.

``SEC. 327. REPORT BY THE ASSOCIATION.

    ``(a) In General.--As soon as practicable after the close of each 
fiscal year, the Association shall submit to the President, through the 
Department of the Treasury, and the States (including State insurance 
regulators), and shall publish on the website of the Association, a 
written report regarding the conduct of its business, and the exercise 
of the other rights and powers granted by this subtitle, during such 
fiscal year.
    ``(b) Financial Statements.--Each report submitted under subsection 
(a) with respect to any fiscal year shall include audited financial 
statements setting forth the financial position of the Association at 
the end of such fiscal year and the results of its operations 
(including the source and application of its funds) for such fiscal 
year.

``SEC. 328. LIABILITY OF THE ASSOCIATION AND THE BOARD MEMBERS, 
              OFFICERS, AND EMPLOYEES OF THE ASSOCIATION.

    ``(a) In General.--The Association shall not be deemed to be an 
insurer or insurance producer within the meaning of any State law, 
rule, regulation, or order regulating or taxing insurers, insurance 
producers, or other entities engaged in the business of insurance, 
including provisions imposing premium taxes, regulating insurer 
solvency or financial condition, establishing guaranty funds and 
levying assessments, or requiring claims settlement practices.
    ``(b) Liability of Board Members, Officers, and Employees.--No 
Board member, officer, or employee of the Association shall be 
personally liable to any person for any action taken or omitted in good 
faith in any matter within the scope of their responsibilities in 
connection with the Association.

``SEC. 329. PRESIDENTIAL OVERSIGHT.

    ``(a) Removal of Board.--If the President determines that the 
Association is acting in a manner contrary to the interests of the 
public or the purposes of this subtitle or has failed to perform its 
duties under this subtitle, the President may remove the entire 
existing Board for the remainder of the term to which the Board members 
were appointed and appoint, in accordance with section 324 and with the 
advice and consent of the Senate, in accordance with the procedures 
established under Senate Resolution 116 of the 112th Congress, new 
Board members to fill the vacancies on the Board for the remainder of 
the terms.
    ``(b) Removal of Board Member.--The President may remove a Board 
member only for neglect of duty or malfeasance in office.
    ``(c) Suspension of Bylaws and Standards and Prohibition of 
Actions.--Following notice to the Board, the President, or a person 
designated by the President for such purpose, may suspend the 
effectiveness of any bylaw or standard, or prohibit any action, of the 
Association that the President or the designee determines is contrary 
to the purposes of this subtitle.

``SEC. 330. RELATIONSHIP TO STATE LAW.

    ``(a) Preemption of State Laws.--State laws, regulations, 
provisions, or other actions purporting to regulate insurance producers 
shall be preempted to the extent provided in subsection (b).
    ``(b) Prohibited Actions.--
            ``(1) In general.--No State shall--
                    ``(A) impede the activities of, take any action 
                against, or apply any provision of law or regulation 
                arbitrarily or discriminatorily to, any insurance 
                producer because that insurance producer or any 
                affiliate plans to become, has applied to become, or is 
                a member of the Association;
                    ``(B) impose any requirement upon a member of the 
                Association that it pay fees different from those 
                required to be paid to that State were it not a member 
                of the Association; or
                    ``(C) impose any continuing education requirements 
                on any nonresident insurance producer that is a member 
                of the Association.
            ``(2) States other than a home state.--No State, other than 
        the home State of a member of the Association, shall--
                    ``(A) impose any licensing, personal or corporate 
                qualifications, education, training, experience, 
                residency, continuing education, or bonding requirement 
                upon a member of the Association that is different from 
                the criteria for membership in the Association or 
                renewal of such membership;
                    ``(B) impose any requirement upon a member of the 
                Association that it be licensed, registered, or 
                otherwise qualified to do business or remain in good 
                standing in the State, including any requirement that 
                the insurance producer register as a foreign company 
                with the secretary of state or equivalent State 
                official;
                    ``(C) require that a member of the Association 
                submit to a criminal history record check as a 
                condition of doing business in the State; or
                    ``(D) impose any licensing, registration, or 
                appointment requirements upon a member of the 
                Association, or require a member of the Association to 
                be authorized to operate as an insurance producer, in 
                order to sell, solicit, or negotiate insurance for 
                commercial property and casualty risks to an insured 
                with risks located in more than one State, if the 
                member is licensed or otherwise authorized to operate 
                in the State where the insured maintains its principal 
                place of business and the contract of insurance insures 
                risks located in that State.
            ``(3) Preservation of state disciplinary authority.--
        Nothing in this section may be construed to prohibit a State 
        from investigating and taking appropriate disciplinary action, 
        including suspension or revocation of authority of an insurance 
        producer to do business in a State, in accordance with State 
        law and that is not inconsistent with the provisions of this 
        section, against a member of the Association as a result of a 
        complaint or for any alleged activity, regardless of whether 
        the activity occurred before or after the insurance producer 
        commenced doing business in the State pursuant to Association 
        membership.

``SEC. 331. COORDINATION WITH FINANCIAL INDUSTRY REGULATORY AUTHORITY.

    ``The Association shall coordinate with the Financial Industry 
Regulatory Authority in order to ease any administrative burdens that 
fall on members of the Association that are subject to regulation by 
the Financial Industry Regulatory Authority, consistent with the 
requirements of this subtitle and the Federal securities laws.

``SEC. 332. RIGHT OF ACTION.

    ``(a) Right of Action.--Any person aggrieved by a decision or 
action of the Association may, after reasonably exhausting available 
avenues for resolution within the Association, commence a civil action 
in an appropriate United States district court, and obtain all 
appropriate relief.
    ``(b) Association Interpretations.--In any action under subsection 
(a), the court shall give appropriate weight to the interpretation of 
the Association of its bylaws and standards and this subtitle.

``SEC. 333. FEDERAL FUNDING PROHIBITED.

    ``The Association may not receive, accept, or borrow any amounts 
from the Federal Government to pay for, or reimburse, the Association 
for, the costs of establishing or operating the Association.

``SEC. 334. DEFINITIONS.

    ``For purposes of this subtitle, the following definitions shall 
apply:
            ``(1) Business entity.--The term `business entity' means a 
        corporation, association, partnership, limited liability 
        company, limited liability partnership, or other legal entity.
            ``(2) Depository institution.--The term `depository 
        institution' has the meaning as in section 3 of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813).
            ``(3) Home state.--The term `home State' means the State in 
        which the insurance producer maintains its principal place of 
        residence or business and is licensed to act as an insurance 
        producer.
            ``(4) Insurance.--The term `insurance' means any product, 
        other than title insurance or bail bonds, defined or regulated 
        as insurance by the appropriate State insurance regulatory 
        authority.
            ``(5) Insurance producer.--The term `insurance producer' 
        means any insurance agent or broker, excess or surplus lines 
        broker or agent, insurance consultant, limited insurance 
        representative, and any other individual or entity that sells, 
        solicits, or negotiates policies of insurance or offers advice, 
        counsel, opinions or services related to insurance.
            ``(6) Insurer.--The term `insurer' has the meaning as in 
        section 313(e)(2)(B) of title 31, United States Code.
            ``(7) Principal place of business.--The term `principal 
        place of business' means the State in which an insurance 
        producer maintains the headquarters of the insurance producer 
        and, in the case of a business entity, where high-level 
        officers of the entity direct, control, and coordinate the 
        business activities of the business entity.
            ``(8) Principal place of residence.--The term `principal 
        place of residence' means the State in which an insurance 
        producer resides for the greatest number of days during a 
        calendar year.
            ``(9) State.--The term `State' includes any State, the 
        District of Columbia, any territory of the United States, and 
        Puerto Rico, Guam, American Samoa, the Trust Territory of the 
        Pacific Islands, the Virgin Islands, and the Northern Mariana 
        Islands.
            ``(10) State law.--
                    ``(A) In general.--The term `State law' includes 
                all laws, decisions, rules, regulations, or other State 
                action having the effect of law, of any State.
                    ``(B) Laws applicable in the district of 
                columbia.--A law of the United States applicable only 
                to or within the District of Columbia shall be treated 
                as a State law rather than a law of the United 
                States.''.
    (b) Technical Amendment.--The table of contents for the Gramm-
Leach-Bliley Act is amended by striking the items relating to subtitle 
C of title III and inserting the following new items:

  ``Subtitle C--National Association of Registered Agents and Brokers

``Sec. 321. National Association of Registered Agents and Brokers.
``Sec. 322. Purpose.
``Sec. 323. Membership.
``Sec. 324. Board of directors.
``Sec. 325. Bylaws, standards, and disciplinary actions.
``Sec. 326. Powers.
``Sec. 327. Report by the Association.
``Sec. 328. Liability of the Association and the Board members, 
                            officers, and employees of the Association.
``Sec. 329. Presidential oversight.
``Sec. 330. Relationship to State law.
``Sec. 331. Coordination with financial industry regulatory authority.
``Sec. 332. Right of action.
``Sec. 333. Federal funding prohibited.
``Sec. 334. Definitions.''.
                                                 Union Calendar No. 391

113th CONGRESS

  2d Session

                               H. R. 4871

                          [Report No. 113-523]

_______________________________________________________________________

                                 A BILL

To reauthorize the Terrorism Risk Insurance Act of 2002, and for other 
                               purposes.

_______________________________________________________________________

                             July 16, 2014

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed