[Congressional Record Volume 155, Number 126 (Wednesday, September 9, 2009)]
[House]
[Pages H9360-H9363]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             NONADMITTED AND REINSURANCE REFORM ACT OF 2009

  Mr. MOORE of Kansas. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 2571) to streamline the regulation of nonadmitted 
insurance and reinsurance, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2571

       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 
     ``Nonadmitted and Reinsurance Reform Act of 2009''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Effective date.

                     TITLE I--NONADMITTED INSURANCE

Sec. 101. Reporting, payment, and allocation of premium taxes.
Sec. 102. Regulation of nonadmitted insurance by insured's home State.
Sec. 103. Participation in national producer database.
Sec. 104. Uniform standards for surplus lines eligibility.
Sec. 105. Streamlined application for commercial purchasers.
Sec. 106. GAO study of nonadmitted insurance market.
Sec. 107. Definitions.

                         TITLE II--REINSURANCE

Sec. 201. Regulation of credit for reinsurance and reinsurance 
              agreements.
Sec. 202. Regulation of reinsurer solvency.
Sec. 203. Definitions.

                    TITLE III--RULE OF CONSTRUCTION

Sec. 301. Rule of construction.
Sec. 302. Severability.

     SEC. 2. EFFECTIVE DATE.

       Except as otherwise specifically provided in this Act, this 
     Act shall take effect upon the expiration of the 12-month 
     period beginning on the date of the enactment of this Act.

                     TITLE I--NONADMITTED INSURANCE

     SEC. 101. REPORTING, PAYMENT, AND ALLOCATION OF PREMIUM 
                   TAXES.

       (a) Home State's Exclusive Authority.--No State other than 
     the home State of an insured may require any premium tax 
     payment for nonadmitted insurance.
       (b) Allocation of Nonadmitted Premium Taxes.--
       (1) In general.--The States may enter into a compact or 
     otherwise establish procedures to allocate among the States 
     the premium taxes paid to an insured's home State described 
     in subsection (a).
       (2) Effective date.--Except as expressly otherwise provided 
     in such compact or other procedures, any such compact or 
     other procedures--
       (A) if adopted on or before the expiration of the 330-day 
     period that begins on the date of the enactment of this Act, 
     shall apply to any premium taxes that, on or after such date 
     of enactment, are required to be paid to any State that is 
     subject to such compact or procedures; and
       (B) if adopted after the expiration of such 330-day period, 
     shall apply to any premium taxes that, on or after January 1 
     of the first calendar year that begins after the expiration 
     of such 330-day period, are required to be paid to any State 
     that is subject to such compact or procedures.
       (3) Report.--Upon the expiration of the 330-day period 
     referred to in paragraph (2), the NAIC may submit a report to 
     the Committee on Financial Services and Committee on the 
     Judiciary of the House of Representatives and the Committee 
     on Banking, Housing, and Urban Affairs of the Senate 
     identifying and describing any compact or other procedures 
     for allocation among the States of premium taxes that have 
     been adopted during such period by any States.
       (4) Nationwide system.--The Congress intends that each 
     State adopt nationwide uniform requirements, forms, and 
     procedures, such as an interstate compact, that provides for 
     the reporting, payment, collection, and allocation of premium 
     taxes for nonadmitted insurance consistent with this section.
       (c) Allocation Based on Tax Allocation Report.--To 
     facilitate the payment of premium taxes among the States, an 
     insured's home State may require surplus lines brokers and 
     insureds who have independently procured insurance to 
     annually file tax allocation reports with the insured's home 
     State detailing the portion of the nonadmitted insurance 
     policy premium or premiums attributable to properties, risks 
     or exposures located in each State. The filing of a 
     nonadmitted insurance tax allocation report and the payment 
     of tax may be made by a person authorized by the insured to 
     act as its agent.

     SEC. 102. REGULATION OF NONADMITTED INSURANCE BY INSURED'S 
                   HOME STATE.

       (a) Home State Authority.--Except as otherwise provided in 
     this section, the placement of nonadmitted insurance shall be 
     subject to the statutory and regulatory requirements solely 
     of the insured's home State.
       (b) Broker Licensing.--No State other than an insured's 
     home State may require a surplus lines broker to be licensed 
     in order to sell, solicit, or negotiate nonadmitted insurance 
     with respect to such insured.
       (c) Enforcement Provision.--With respect to section 101 and 
     subsections (a) and (b) of this section, any law, regulation, 
     provision, or action of any State that applies or purports to 
     apply to nonadmitted insurance sold to, solicited by, or 
     negotiated with an insured whose home State is another State 
     shall be preempted with respect to such application.
       (d) Workers' Compensation Exception.--This section may not 
     be construed to preempt any State law, rule, or regulation 
     that restricts the placement of workers' compensation 
     insurance or excess insurance for self-funded workers' 
     compensation plans with a nonadmitted insurer.

     SEC. 103. PARTICIPATION IN NATIONAL PRODUCER DATABASE.

       After the expiration of the 2-year period beginning on the 
     date of the enactment of this Act, a State may not collect 
     any fees relating to licensing of an individual or entity as 
     a surplus lines broker in the State unless the State has in 
     effect at such time laws or regulations that provide for 
     participation by the State in the national insurance producer 
     database of the NAIC, or any other equivalent uniform 
     national database, for the licensure of surplus lines brokers 
     and the renewal of such licenses.

     SEC. 104. UNIFORM STANDARDS FOR SURPLUS LINES ELIGIBILITY.

       A State may not--
       (1) impose eligibility requirements on, or otherwise 
     establish eligibility criteria for, nonadmitted insurers 
     domiciled in a United States jurisdiction, except in 
     conformance with such requirements and criteria in sections 
     5A(2) and 5C(2)(a) of the Non-Admitted Insurance Model Act, 
     unless the State has adopted nationwide uniform requirements, 
     forms, and procedures developed in accordance with section 
     101(b) of this Act that include alternative nationwide 
     uniform eligibility requirements; and
       (2) prohibit a surplus lines broker from placing 
     nonadmitted insurance with, or procuring nonadmitted 
     insurance from, a nonadmitted insurer domiciled outside the 
     United States that is listed on the Quarterly Listing of 
     Alien Insurers maintained by the International Insurers 
     Department of the NAIC.

     SEC. 105. STREAMLINED APPLICATION FOR COMMERCIAL PURCHASERS.

       A surplus lines broker seeking to procure or place 
     nonadmitted insurance in a State for an exempt commercial 
     purchaser shall not be required to satisfy any State 
     requirement to make a due diligence search to determine 
     whether the full amount or type of insurance sought by such 
     exempt commercial purchaser can be obtained from admitted 
     insurers if--
       (1) the broker procuring or placing the surplus lines 
     insurance has disclosed to the exempt commercial purchaser 
     that such insurance may or may not be available from the 
     admitted market that may provide greater protection with more 
     regulatory oversight; and
       (2) the exempt commercial purchaser has subsequently 
     requested in writing the broker to procure or place such 
     insurance from a nonadmitted insurer.

     SEC. 106. GAO STUDY OF NONADMITTED INSURANCE MARKET.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study of the nonadmitted insurance 
     market to determine the effect of the enactment of this title 
     on the size and market share of the nonadmitted insurance 
     market for providing coverage typically provided by the 
     admitted insurance market.
       (b) Contents.--The study shall determine and analyze--
       (1) the change in the size and market share of the 
     nonadmitted insurance market and in the number of insurance 
     companies and insurance holding companies providing such 
     business in the 18-month period that begins upon the 
     effective date of this Act;
       (2) the extent to which insurance coverage typically 
     provided by the admitted insurance market has shifted to the 
     nonadmitted insurance market;
       (3) the consequences of any change in the size and market 
     share of the nonadmitted insurance market, including 
     differences in the price and availability of coverage 
     available in both the admitted and nonadmitted insurance 
     markets;
       (4) the extent to which insurance companies and insurance 
     holding companies that provide both admitted and nonadmitted 
     insurance have experienced shifts in the volume of business 
     between admitted and nonadmitted insurance; and
       (5) the extent to which there has been a change in the 
     number of individuals who have nonadmitted insurance 
     policies, the type of coverage provided under such policies, 
     and whether such coverage is available in the admitted 
     insurance market.

[[Page H9361]]

       (c) Consultation With NAIC.--In conducting the study under 
     this section, the Comptroller General shall consult with the 
     NAIC.
       (d) Report.--The Comptroller General shall complete the 
     study under this section and submit a report to the Committee 
     on Financial Services of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate regarding the findings of the study not later than 30 
     months after the effective date of this Act.

     SEC. 107. DEFINITIONS.

       For purposes of this title, the following definitions shall 
     apply:
       (1) Admitted insurer.--The term ``admitted insurer'' means, 
     with respect to a State, an insurer licensed to engage in the 
     business of insurance in such State.
       (2) Affiliate.--The term ``affiliate'' means, with respect 
     to an insured, any entity that controls, is controlled by, or 
     is under common control with the insured.
       (3) Affiliated group.--The term ``affiliated group'' means 
     any group of entities that are all affiliated.
       (4) Control.--An entity has ``control'' over another entity 
     if--
       (A) the entity directly or indirectly or acting through one 
     or more other persons owns, controls or has the power to vote 
     25 percent or more of any class of voting securities of the 
     other entity; or
       (B) the entity controls in any manner the election of a 
     majority of the directors or trustees of the other entity.
       (5) Exempt commercial purchaser.--The term ``exempt 
     commercial purchaser'' means any person purchasing commercial 
     insurance that, at the time of placement, meets the following 
     requirements:
       (A) The person employs or retains a qualified risk manager 
     to negotiate insurance coverage.
       (B) The person has paid aggregate nationwide commercial 
     property and casualty insurance premiums in excess of 
     $100,000 in the immediately preceding 12 months.
       (C)(i) The person meets at least one of the following 
     criteria:
       (I) The person possesses a net worth in excess of 
     $20,000,000, as such amount is adjusted pursuant to clause 
     (ii).
       (II) The person generates annual revenues in excess of 
     $50,000,000, as such amount is adjusted pursuant to clause 
     (ii).
       (III) The person employs more than 500 full time or full 
     time equivalent employees per individual insured or is a 
     member of an affiliated group employing more than 1,000 
     employees in the aggregate.
       (IV) The person is a not-for-profit organization or public 
     entity generating annual budgeted expenditures of at least 
     $30,000,000, as such amount is adjusted pursuant to clause 
     (ii).
       (V) The person is a municipality with a population in 
     excess of 50,000 persons.
       (ii) Effective on the fifth January 1 occurring after the 
     date of the enactment of this Act and each fifth January 1 
     occurring thereafter, the amounts in subclauses (I), (II), 
     and (IV) of clause (i) shall be adjusted to reflect the 
     percentage change for such five-year period in the Consumer 
     Price Index for All Urban Consumers published by the Bureau 
     of Labor Statistics of the Department of Labor.
       (6) Home state.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``home State'' means, with respect to an insured--
       (i) the State in which an insured maintains its principal 
     place of business or, in the case of an individual, the 
     individual's principal residence; or
       (ii) if 100 percent of the insured risk is located out of 
     the State referred to in subparagraph (A), the State to which 
     the greatest percentage of the insured's taxable premium for 
     that insurance contract is allocated.
       (B) Affiliated groups.--If more than one insured from an 
     affiliated group are named insureds on a single nonadmitted 
     insurance contract, the term ``home State'' means the home 
     State, as determined pursuant to subparagraph (A), of the 
     member of the affiliated group that has the largest 
     percentage of premium attributed to it under such insurance 
     contract.
       (7) Independently procured insurance.--The term 
     ``independently procured insurance'' means insurance procured 
     directly by an insured from a nonadmitted insurer.
       (8) NAIC.--The term ``NAIC'' means the National Association 
     of Insurance Commissioners or any successor entity.
       (9) Nonadmitted insurance.--The term ``nonadmitted 
     insurance'' means any property and casualty insurance 
     permitted to be placed directly or through a surplus lines 
     broker with a nonadmitted insurer eligible to accept such 
     insurance.
       (10) Non-admitted insurance model act.--The term ``Non-
     Admitted Insurance Model Act'' means the provisions of the 
     Non-Admitted Insurance Model Act, as adopted by the NAIC on 
     August 3, 1994, and amended on September 30, 1996, December 
     6, 1997, October 2, 1999, and June 8, 2002.
       (11) Nonadmitted insurer.--The term ``nonadmitted insurer'' 
     means, with respect to a State, an insurer not licensed to 
     engage in the business of insurance in such State.
       (12) Qualified risk manager.--The term ``qualified risk 
     manager'' means, with respect to a policyholder of commercial 
     insurance, a person who meets all of the following 
     requirements:
       (A) The person is an employee of, or third party consultant 
     retained by, the commercial policyholder.
       (B) The person provides skilled services in loss 
     prevention, loss reduction, or risk and insurance coverage 
     analysis, and purchase of insurance.
       (C) The person--
       (i)(I) has a bachelor's degree or higher from an accredited 
     college or university in risk management, business 
     administration, finance, economics, or any other field 
     determined by a State insurance commissioner or other State 
     regulatory official or entity to demonstrate minimum 
     competence in risk management; and
       (II)(aa) has three years of experience in risk financing, 
     claims administration, loss prevention, risk and insurance 
     analysis, or purchasing commercial lines of insurance; or
       (bb) has one of the following designations:

       (AA) a designation as a Chartered Property and Casualty 
     Underwriter (in this subparagraph referred to as ``CPCU'') 
     issued by the American Institute for CPCU/Insurance Institute 
     of America;
       (BB) a designation as an Associate in Risk Management (ARM) 
     issued by the American Institute for CPCU/Insurance Institute 
     of America;
       (CC) a designation as Certified Risk Manager (CRM) issued 
     by the National Alliance for Insurance Education & Research;
       (DD) a designation as a RIMS Fellow (RF) issued by the 
     Global Risk Management Institute; or
       (EE) any other designation, certification, or license 
     determined by a State insurance commissioner or other State 
     insurance regulatory official or entity to demonstrate 
     minimum competency in risk management;

       (ii)(I) has at least seven years of experience in risk 
     financing, claims administration, loss prevention, risk and 
     insurance coverage analysis, or purchasing commercial lines 
     of insurance; and
       (II) has any one of the designations specified in subitems 
     (AA) through (EE) of clause (i)(II)(bb);
       (iii) has at least 10 years of experience in risk 
     financing, claims administration, loss prevention, risk and 
     insurance coverage analysis, or purchasing commercial lines 
     of insurance; or
       (iv) has a graduate degree from an accredited college or 
     university in risk management, business administration, 
     finance, economics, or any other field determined by a State 
     insurance commissioner or other State regulatory official or 
     entity to demonstrate minimum competence in risk management.
       (13) Premium tax.--The term ``premium tax'' means, with 
     respect to surplus lines or independently procured insurance 
     coverage, any tax, fee, assessment, or other charge imposed 
     by a government entity directly or indirectly based on any 
     payment made as consideration for an insurance contract for 
     such insurance, including premium deposits, assessments, 
     registration fees, and any other compensation given in 
     consideration for a contract of insurance.
       (14) Surplus lines broker.--The term ``surplus lines 
     broker'' means an individual, firm, or corporation which is 
     licensed in a State to sell, solicit, or negotiate insurance 
     on properties, risks, or exposures located or to be performed 
     in a State with nonadmitted insurers.
       (15) State.--The term ``State'' includes any State of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, Guam, the Northern Mariana Islands, the Virgin 
     Islands, and American Samoa.

                         TITLE II--REINSURANCE

     SEC. 201. REGULATION OF CREDIT FOR REINSURANCE AND 
                   REINSURANCE AGREEMENTS.

       (a) Credit for Reinsurance.--If the State of domicile of a 
     ceding insurer is an NAIC-accredited State, or has financial 
     solvency requirements substantially similar to the 
     requirements necessary for NAIC accreditation, and recognizes 
     credit for reinsurance for the insurer's ceded risk, then no 
     other State may deny such credit for reinsurance.
       (b) Additional Preemption of Extraterritorial Application 
     of State Law.--In addition to the application of subsection 
     (a), all laws, regulations, provisions, or other actions of a 
     State that is not the domiciliary State of the ceding 
     insurer, except those with respect to taxes and assessments 
     on insurance companies or insurance income, are preempted to 
     the extent that they--
       (1) restrict or eliminate the rights of the ceding insurer 
     or the assuming insurer to resolve disputes pursuant to 
     contractual arbitration to the extent such contractual 
     provision is not inconsistent with the provisions of title 9, 
     United States Code;
       (2) require that a certain State's law shall govern the 
     reinsurance contract, disputes arising from the reinsurance 
     contract, or requirements of the reinsurance contract;
       (3) attempt to enforce a reinsurance contract on terms 
     different than those set forth in the reinsurance contract, 
     to the extent that the terms are not inconsistent with this 
     title; or
       (4) otherwise apply the laws of the State to reinsurance 
     agreements of ceding insurers not domiciled in that State.

     SEC. 202. REGULATION OF REINSURER SOLVENCY.

       (a) Domiciliary State Regulation.--If the State of domicile 
     of a reinsurer is an NAIC-accredited State or has financial 
     solvency requirements substantially similar to the 
     requirements necessary for NAIC accreditation, such State 
     shall be solely responsible

[[Page H9362]]

     for regulating the financial solvency of the reinsurer.
       (b) Nondomiciliary States.--
       (1) Limitation on financial information requirements.--If 
     the State of domicile of a reinsurer is an NAIC-accredited 
     State or has financial solvency requirements substantially 
     similar to the requirements necessary for NAIC accreditation, 
     no other State may require the reinsurer to provide any 
     additional financial information other than the information 
     the reinsurer is required to file with its domiciliary State.
       (2) Receipt of information.--No provision of this section 
     shall be construed as preventing or prohibiting a State that 
     is not the State of domicile of a reinsurer from receiving a 
     copy of any financial statement filed with its domiciliary 
     State.

     SEC. 203. DEFINITIONS.

       For purposes of this title, the following definitions shall 
     apply:
       (1) Ceding insurer.--The term ``ceding insurer'' means an 
     insurer that purchases reinsurance.
       (2) Domiciliary state.--The terms ``State of domicile'' and 
     ``domiciliary State'' means, with respect to an insurer or 
     reinsurer, the State in which the insurer or reinsurer is 
     incorporated or entered through, and licensed.
       (3) Reinsurance.--The term ``reinsurance'' means the 
     assumption by an insurer of all or part of a risk undertaken 
     originally by another insurer.
       (4) Reinsurer.--
       (A) In general.--The term ``reinsurer'' means an insurer to 
     the extent that the insurer--
       (i) is principally engaged in the business of reinsurance;
       (ii) does not conduct significant amounts of direct 
     insurance as a percentage of its net premiums; and
       (iii) is not engaged in an ongoing basis in the business of 
     soliciting direct insurance.
       (B) Determination.--A determination of whether an insurer 
     is a reinsurer shall be made under the laws of the State of 
     domicile in accordance with this paragraph.
       (5) State.--The term ``State'' includes any State of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, Guam, the Northern Mariana Islands, the Virgin 
     Islands, and American Samoa.

                    TITLE III--RULE OF CONSTRUCTION

     SEC. 301. RULE OF CONSTRUCTION.

       Nothing in this Act or amendments to this Act shall be 
     construed to modify, impair, or supersede the application of 
     the antitrust laws. Any implied or actual conflict between 
     this Act and any amendments to this Act and the antitrust 
     laws shall be resolved in favor of the operation of the 
     antitrust laws.

     SEC. 302. SEVERABILITY.

       If any section or subsection of this Act, or any 
     application of such provision to any person or circumstance, 
     is held to be unconstitutional, the remainder of this Act, 
     and the application of the provision to any other person or 
     circumstance, shall not be affected.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Kansas (Mr. Moore) and the gentleman from New Jersey (Mr. Garrett) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Kansas.


                             General Leave

  Mr. MOORE of Kansas. Mr. Speaker, I ask unanimous consent that all 
Members have 5 legislative days within which to revise and extend their 
remarks on this legislation and to insert extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Kansas?
  There was no objection.
  Mr. MOORE of Kansas. I yield myself as much time as I may consume.
  Mr. Speaker, I rise today in support of H.R. 2571, the Nonadmitted 
and Reinsurance Reform Act of 2009.
  I drafted this bipartisan legislation with Congressman Scott Garrett, 
Congressman Paul Kanjorski, Chairman Barney Frank, and Ranking Member 
Spencer Bachus. I appreciate their support and the support of the 
bill's 22 cosponsors.
  This bill will provide much-needed reform in the nonadmitted and 
reinsurance markets. In the 109th Congress, this House unanimously 
approved the bill by a vote of 417-0. In the 110th Congress, our bill 
was unanimously approved by voice vote. Unfortunately, the Senate has 
yet to act, but I believe the third time will be the charm.
  Before he retired, Senator Mel Martinez introduced the Senate version 
of the bill with Senators Evan Bayh, Mike Crapo, and Bill Nelson. I 
know the other three will pick up where Senator Martinez left off to 
help enact this legislation into law. Often called the ``safety net of 
the insurance market,'' surplus lines provides for coverage when the 
traditional market is not available.
  Under today's laws, the regulation of the surplus lines market is, 
unfortunately, fragmented and cumbersome. This situation reduces 
insurance availability, leaving policyholders uninsured and with little 
choice in providers. Similarly, regulation of the reinsurance market is 
outdated and needs to be improved.
  Accordingly, H.R. 2571 specifies that only the tax policies, 
licensing and other regulatory requirements of the home State of the 
policyholder govern a surplus lines transaction; it allows 
sophisticated commercial entities direct access to the surplus lines 
market; and it prohibits States from voiding established contractual 
arbitration agreements between reinsurers and primary companies.
  Policyholders in a number of States are facing skyrocketing rates. 
The Nonadmitted and Reinsurance Reform Act provides commonsense 
solutions to the nonadmitted and reinsurance market. I urge my 
colleagues to support this bill.
  I reserve the balance of my time.
  Mr. GARRETT of New Jersey. I yield myself such time as I may consume.
  Mr. Speaker, I would like to begin by thanking several people who 
played a significant role in getting us to where we are today, 
starting, of course, with the gentleman from Kansas (Mr. Moore), who is 
the sponsor of the bill. He has exhibited tremendous leadership and 
persistence as well, as he indicated, in moving this legislation to the 
floor today, and so he should be commended for his hard work.
  I would also like to congratulate the gentlewoman from Florida (Ms. 
Brown-Waite), for she was the Republican lead sponsor on this bill in 
the last two Congresses, and she has worked tirelessly on this very 
important issue. So I am pleased now to have the opportunity to take up 
the mantle from Ms. Brown-Waite and to move this legislation forward.
  Finally, I would like to thank the National Association of Insurance 
Commissioners and specifically Dr. Theresa Vaughan for their efforts in 
working closely with all of the interested parties.
  Now, I believe that the inclusive and deliberative process that this 
legislation has undergone should serve, really, as a model as we 
continue to work on revamping and modernizing other aspects of our 
financial regulatory framework. Mr. Speaker, H.R. 2571, the Nonadmitted 
and Reinsurance Reform Act of 2009, will reform and will streamline the 
regulation of the nonadmitted--that's surplus lines--insurance market 
as well as the reinsurance market.
  Title I, which addresses the surplus lines market, will reduce 
regulatory overlap, and will clarify where the appropriate taxing 
authority really should lie with each market transaction. It also will 
establish the NAIC's eligibility requirements as a standard for the 
participation in the surplus lines marketplace. These provisions will 
basically increase efficiency. They will work to reduce transaction 
costs, and they will work to improve access to the entire market for 
our consumers.

                              {time}  1145

  Now, if we go into Title II legislation, that section addresses 
several important areas within the reinsurance market. What the bill 
will do is create a procedure to establish a single solvency regulator 
for each reinsurer, eliminate the extraterritorial application of State 
law with regards to reinsurance, and it also will provide for a more 
meaningful and really a simplified process in determining the credit 
for reinsurance that the companies will receive. So both the surplus 
lines and the reinsurance titles are vital to promoting further 
harmonization for transactions occurring across State lines and 
eliminating unnecessary redtape, which basically will help to reduce 
costs for consumers.
  So in this increasingly complex world, it is essential that consumers 
and businesses be able to purchase insurance from risks outside of 
their traditional realm. And I believe this legislation will further 
increase efficiency and reduce costs for these very important 
transactions.
  Similar variations of this legislation, as Mr. Moore indicated, have 
passed the House in the last two Congresses by unanimous votes, and it 
is my hope that this bipartisan legislation will once again pass today 
unanimously. So I ask all of my colleagues on both sides of the aisle 
to support this legislation.

[[Page H9363]]

  I reserve the balance of my time.
  Mr. MOORE of Kansas. Mr. Speaker, I want to thank, again, my friend, 
the gentleman from New Jersey, Scott Garrett, for his work on the bill. 
The Nonadmitted and Reinsurance Reform Act provides bipartisan, 
commonsense solutions to improve the regulation of the nonadmitted and 
reinsurance markets. So I urge my colleagues to support this bill.
  Mr. BACHUS. Mr. Speaker, I want to express my support of H.R. 2571, 
the Nonadmitted and Reinsurance Reform Act of 2009, and urge my 
colleagues to vote for its passage under suspension of the rules today.
  While there are many complex regulatory programs pending before our 
committee, today we are seeking to advance a modest but long-overdue 
measure to streamline the current system for surplus lines insurance 
and for reinsurance.
  Surplus lines insurance, also known as ``nonadmitted'' insurance, is 
highly specialized property and casualty insurance for exceptional 
risks, such as hazardous materials or amusement parks.
  H.R. 2571 would adopt a ``home state'' approach to address 
inconsistencies in state regulation of the surplus lines insurance 
market, and the bill generally follows the model law on nonadmitted 
insurance adopted by the National Association of Insurance 
Commissioners.
  This legislation also addresses reinsurance in a similar way by 
designating the home state of the insurer purchasing reinsurance as the 
primary regulator of credit for reinsurance and the home state of the 
reinsurer as the primary regulator for the reinsurer's solvency.
  As an original cosponsor of H.R. 2571, I want to commend the bill's 
primary sponsors, Oversight and Investigations Subcommittee Chairman 
Moore and Capital Markets Subcommittee Ranking Member Garrett.
  They deserve credit for working together to move this bipartisan 
legislation through the House again this year and eventually we all 
hope into law.
  I also want to commend Congresswoman Brown-Waite, the original 
champion of this effort in the 109th Congress as well as a lead 
cosponsor in the 110th Congress and an original cosponsor again in this 
Congress.
  This will be the third time we are sending this important insurance 
reform proposal to the other body, and I hope our colleagues across the 
way will be able to see the value of enacting H.R. 2571 soon.
  Mr. MOORE of Kansas. Mr. Speaker, I submit the following exchange of 
letters regarding H.R. 2571.
                                         House of Representatives,


                                   Committee on the Judiciary,

                                Washington, DC, September 9, 2009.
     Hon. Barney Frank,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Frank: In recognition of the desire to 
     expedite consideration of H.R. 2571, the Nonadmitted and 
     Reinsurance Reform Act of 2009, the Committee on the 
     Judiciary agrees to waive formal consideration of the bill as 
     to provisions that fall within its rule X jurisdiction.
       The Committee takes this action with our mutual 
     understanding that by foregoing consideration of H.R. 2571 at 
     this time, it does not waive any jurisdiction over subject 
     matter contained in this or similar legislation, and that our 
     Committee will be appropriately consulted and involved as the 
     bill or similar legislation moves forward, so that we may 
     address any remaining issues in our jurisdiction. The 
     Committee also reserves the right to seek appointment of an 
     appropriate number of conferees to any House-Senate 
     conference involving this or similar legislation, and 
     requests your support for any such request.
       I would appreciate your including this letter in the 
     Congressional Record during consideration of the bill on the 
     House floor.
       Thank you for your attention to this matter, and for the 
     cooperative working relationship between our two committees.
           Sincerely,
                                                John Conyers, Jr.,
     Chairman.
                                  ____

                                         House of Representatives,


                              Committee on Financial Services,

                                Washington, DC, September 9, 2009.
     Hon. John Conyers,
     Chairman, Committee on the Judiciary, House of 
         Representatives, Washington, DC.
       Dear Chairman Conyers: Thank you for your letter concerning 
     H.R. 2571, the ``Nonadmitted and Reinsurance Reform Act of 
     2009.'' This bill will be considered by the House shortly.
       I want to confirm our mutual understanding with respect to 
     the consideration of this bill. I acknowledge that portions 
     of the bill fall within the jurisdiction of the Committee on 
     the Judiciary and I appreciate your cooperation in moving the 
     bill to the House floor expeditiously. I further agree that 
     your decision to not to proceed with a markup on this bill 
     will not prejudice the Committee on the Judiciary with 
     respect to its prerogatives on this or similar legislation. I 
     would support your request for conferees on those provisions 
     within your jurisdiction in the event of a House-Senate 
     conference.
       I will include your letter and this response in the 
     Congressional Record. Thank you again for your assistance.
                                                     Barney Frank,
                                                         Chairman.

  Mr. MOORE of Kansas. I yield back the balance of my time.
  Mr. GARRETT of New Jersey. I also yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Kansas (Mr. Moore) that the House suspend the rules and 
pass the bill, H.R. 2571.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________