[Congressional Record Volume 160, Number 18 (Thursday, January 30, 2014)]
[Senate]
[Pages S619-S627]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
HOMEOWNER FLOOD INSURANCE AFFORDABILITY ACT OF 2014--Continued
Mr. REID. I ask unanimous consent that we resume consideration of S.
1926.
The PRESIDING OFFICER. Without objection, it is so ordered.
Under the previous order, there will be 2 minutes of debate equally
divided prior to a vote on passage of S. 1926.
Who yields time?
The Senator from Georgia.
Mr. ISAKSON. Madam President, I will be brief in our 1 minute just to
express my thanks to Senator Menendez from New Jersey, as well as
Senator Landrieu and Senator Vitter and all of those who came together
to put together a great bill for the people of the United States of
America for Federal flood insurance. It was a team effort, a bipartisan
effort, an equally divided effort between Republicans and Democrats.
I urge everybody to vote for the bill, and I again thank the Senator
from New Jersey for his cooperation.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. MENENDEZ. Madam President, I urge all of our colleagues to cast a
``yes'' vote on the final passage of the homeowner flood insurance act.
I think this has been an excellent week for the Senate. We were able
to break through what sometimes is partisan gridlock and far too often
pervades this auspicious Chamber. We have had an honest and open debate
on this issue that is critical to the American people. We have had a
respectable debate on good-faith amendments that were germane to the
bill and lived up to the ideals of the Senate, and now we are poised to
pass a critical piece of legislation which I believe enjoys
overwhelming bipartisan support which will provide real relief to
millions of American families.
I thank all of our cosponsors and their staffs, including a very
large list of Republican colleagues who support the bill. I
particularly thank my lead Republican cosponsor, Senator Isakson, for
his efforts and the partnership on this issue and many others. I have
had the pleasure to work with Senator Isakson on a number of issues and
have come to respect his honesty and his desire to come together and
get things done, regardless of the issue. I think he is one of the most
well-respected Members of the Senate. Together, working with our
colleagues, I think we are poised to give some real relief to families
and to send a strong message to the House and hope they will follow
suit.
The PRESIDING OFFICER. All time has expired.
The bill was ordered to be engrossed for a third reading and was read
the third time.
Mr. MENENDEZ. Madam President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There appears to
be a sufficient second.
The bill having been read the third time, the question is, Shall the
bill, as amended, pass?
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from Ohio (Mr. Brown) is
necessarily absent.
The PRESIDING OFFICER (Ms. Heitkamp). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 67, nays 32, as follows:
[Rollcall Vote No. 19 Leg.]
YEAS--67
Baldwin
Baucus
Begich
Bennet
Blumenthal
Blunt
Booker
Boxer
Burr
Cantwell
Cardin
Casey
Chambliss
Cochran
Collins
Coons
Donnelly
Durbin
Feinstein
Franken
Gillibrand
Graham
Hagan
Harkin
Heinrich
Heitkamp
Hirono
Hoeven
Isakson
Johanns
Johnson (SD)
Kaine
King
Klobuchar
Landrieu
Leahy
Levin
Manchin
Markey
McCaskill
Menendez
Merkley
Mikulski
Murkowski
Murphy
Murray
Nelson
Pryor
Reed
Reid
Rockefeller
Rubio
Sanders
Schatz
Schumer
Scott
Shaheen
Stabenow
Tester
Udall (CO)
Udall (NM)
Vitter
Warner
Warren
Whitehouse
Wicker
Wyden
NAYS--32
Alexander
Ayotte
Barrasso
Boozman
Carper
Coats
Coburn
Corker
Cornyn
Crapo
Cruz
Enzi
Fischer
Flake
Grassley
Hatch
Heller
Inhofe
Johnson (WI)
Kirk
Lee
McCain
McConnell
Moran
Paul
Portman
Risch
Roberts
Sessions
Shelby
Thune
Toomey
NOT VOTING--1
Brown
The bill (S. 1926), as amended, was passed, as follows:
S. 1926
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
[[Page S620]]
SECTION 1. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Table of contents.
TITLE I--HOMEOWNER FLOOD INSURANCE AFFORDABILITY ACT
Sec. 101. Short title.
Sec. 102. Definitions.
Sec. 103. Delayed implementation of flood insurance rate increases;
draft affordability framework.
Sec. 104. Affordability study and report.
Sec. 105. Affordability study funding.
Sec. 106. Funds to reimburse homeowners for successful map appeals.
Sec. 107. Flood protection systems.
Sec. 108. Treatment of floodproofed residential basements.
Sec. 109. Designation of flood insurance advocate.
Sec. 110. Exceptions to escrow requirement for flood insurance
payments.
Sec. 111. Monthly installment payments for premiums.
Sec. 112. Accounting for flood mitigation activities in estimates of
premium rates.
Sec. 113. Home improvement fairness.
Sec. 114. Study of voluntary community-based flood insurance options.
Sec. 115. Exemption from fees for certain map change requests.
Sec. 116. Flood mitigation methods for urban buildings.
TITLE II--NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS
Sec. 201. Short Title.
Sec. 202. Reestablishment of the National Association of Registered
Agents and Brokers.
TITLE I--HOMEOWNER FLOOD INSURANCE AFFORDABILITY ACT
SEC. 101. SHORT TITLE.
This title may be cited as the ``Homeowner Flood Insurance
Affordability Act of 2014''.
SEC. 102. DEFINITIONS.
As used in this title, the following definitions shall
apply:
(1) Adjusted base flood elevation.--For purposes of rating
a floodproofed covered structure, the term ``adjusted base
flood elevation'' means the base flood elevation for a
covered structure on the applicable effective flood insurance
rate map, plus 1 foot.
(2) Administrator.--The term ``Administrator'' means the
Administrator of the Federal Emergency Management Agency.
(3) Affordability study.--The term ``affordability study''
means the study required under section 100236 of the Biggert-
Waters Flood Insurance Reform Act of 2012 (Public Law 112-
141; 126 Stat. 957).
(4) Applicable flood plain management measures.--The term
``applicable flood plain management measures'' means flood
plain management measures adopted by a community under
section 60.3(c) of title 44, Code of Federal Regulations.
(5) Covered structure.--The term ``covered structure''
means a residential structure--
(A) that is located in a community that has adopted flood
plain management measures that are approved by the Federal
Emergency Management Agency and that satisfy the requirements
for an exception for floodproofed residential basements under
section 60.6(c) of title 44, Code of Federal Regulations; and
(B) that was built in compliance with the applicable flood
plain management measures.
(6) Draft affordability framework.--The term ``draft
affordability framework'' means the draft programmatic and
regulatory framework required to be prepared by the
Administrator and submitted to Congress under section 103(d)
addressing the issues of affordability of flood insurance
sold under the National Flood Insurance Program, including
issues identified in the affordability study.
(7) Floodproofed elevation.--The term ``floodproofed
elevation'' means the height of floodproofing on a covered
structure, as identified on the Residential Basement
Floodproofing Certificate for the covered structure.
(8) National flood insurance program.--The term ``National
Flood Insurance Program'' means the program established under
the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et
seq.).
SEC. 103. DELAYED IMPLEMENTATION OF FLOOD INSURANCE RATE
INCREASES; DRAFT AFFORDABILITY FRAMEWORK.
(a) Delayed Implementation of Flood Insurance Rate
Increases.--
(1) Grandfathered properties.--Beginning on the date of
enactment of this Act, the Administrator may not implement
section 1308(h) of the National Flood Insurance Act of 1968
(42 U.S.C. 4015(h)).
(2) Pre-firm properties.--Beginning on the date of
enactment of this Act, the Administrator may not implement--
(A) section 1307(g)(1) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4014(g)(1)); or
(B) section 1307(g)(3) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4014(g)(3)) with respect to any policy
described in that section, provided that the decision of the
policy holder to permit a lapse in flood insurance coverage
was as a result of the property covered by the policy no
longer being required to retain such coverage.
(3) Expiration.--The prohibitions set forth under
paragraphs (1) and (2) shall expire 6 months after the later
of--
(A) the date on which the Administrator proposes the draft
affordability framework; or
(B) the date on which the Administrator certifies in
writing to Congress that the Federal Emergency Management
Agency has implemented a flood mapping approach that, when
applied, results in technically credible flood hazard data in
all areas where Flood Insurance Rate Maps are prepared or
updated.
(b) Property Sale Trigger.--
(1) In general.--Section 1307(g)(2) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4014(g)(2)) is amended to
read as follows:
``(2) any property purchased after the expiration of the 6-
month period set forth under section 103(a)(3) of the
Homeowner Flood Insurance Affordability Act of 2014;''.
(2) Protection of subsidy for properties purchased on or
before expiration date.--Notwithstanding paragraph (1) or (3)
of section 1307(g) of the National Flood Insurance Act of
1968 (42 U.S.C. 4014(g)(1) and (3)), the Administrator may
not reduce the risk premium rate subsidy for flood insurance
for a property purchased on or before the expiration of the
6-month period set forth under subsection (a)(3) of this
section based on the fact that--
(A) the property was not insured by the flood insurance
program as of the date of enactment of the Biggert-Waters
Flood Insurance Reform Act of 2012 (Public Law 112-141; 126
Stat. 916); or
(B) on or before the expiration of that 6-month period, the
policy for the property had lapsed in coverage as a result of
the deliberate choice of the policy holder, provided that the
decision of the policy holder to permit a lapse in coverage
was as a result of the property no longer being required to
retain such coverage.
(c) Treatment of Pre-FIRM Properties.--Beginning on the
date of enactment of this Act and ending upon the expiration
of the 6-month period set forth under subsection (a)(3), the
Administrator shall restore the risk premium rate subsidies
for flood insurance estimated under section 1307(a)(2) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4014(a)(2))
for any property--
(1) with respect to which the Administrator may not, under
subsection (a)(2)(A) of this section, implement section
1307(g)(1) of the National Flood Insurance Act of 1968;
(2) with respect to which the Administrator may not, under
subsection (a)(2)(B) of this section, implement section
1307(g)(3) of the National Flood Insurance Act of 1968; or
(3) described in section 1307(g)(2) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4014(g)(2)), as in effect on
the day before the date of enactment of this Act.
(d) Draft Affordability Framework.--
(1) In general.--The Administrator shall prepare a draft
affordability framework that proposes to address, via
programmatic and regulatory changes, the issues of
affordability of flood insurance sold under the National
Flood Insurance Program, including issues identified in the
affordability study.
(2) Criteria.--In carrying out the requirements under
paragraph (1), the Administrator shall consider the following
criteria:
(A) Accurate communication to consumers of the flood risk
associated with their property.
(B) Targeted assistance to flood insurance policy holders
based on their financial ability to continue to participate
in the National Flood Insurance Program.
(C) Individual or community actions to mitigate the risk of
flood or lower the cost of flood insurance.
(D) The impact of increases in risk premium rates on
participation in the National Flood Insurance Program.
(E) The impact flood insurance rate map updates have on the
affordability of flood insurance.
(3) Deadline for submission.--Not later than 18 months
after the date on which the Administrator submits the
affordability study, the Administrator shall submit to the
full Committee on Banking, Housing, and Urban Affairs and the
full Committee on Appropriations of the Senate and the full
Committee on Financial Services and the full Committee on
Appropriations of the House of Representatives the draft
affordability framework.
(e) Interagency Agreements.--The Administrator may enter
into an agreement with another Federal agency to--
(1) complete the affordability study; or
(2) prepare the draft affordability framework.
(f) Clear Communications.--The Administrator shall clearly
communicate full flood risk determinations to individual
property owners regardless of whether their premium rates are
full actuarial rates.
(g) Rule of Construction.--Nothing in this section shall be
construed to provide the Administrator with the authority to
provide assistance to homeowners based on affordability that
was not available prior to the enactment of the Biggert-
Waters Flood Insurance Reform Act of 2012 (Public Law 112-
141; 126 Stat. 916).
(h) Disclosure.--
(1) Change in rates under biggert-waters.--Not later than
the date that is 6 months before the date on which any change
in risk premium rates for flood insurance coverage under the
National Flood Insurance Program resulting from the amendment
made by section 100207 of the Biggert-Waters Flood Insurance
Reform Act of 2012 (Public
[[Page S621]]
Law 112-141; 126 Stat. 919) is implemented, the Administrator
shall make publicly available the rate tables and
underwriting guidelines that provide the basis for the
change.
(2) Change in rates under this act.--Not later than the
date that is 6 months before the date on which any change in
risk premium rates for flood insurance coverage under the
National Flood Insurance Program resulting from this Act or
any amendment made by this Act is implemented, the
Administrator shall make publicly available the rate tables
and underwriting guidelines that provide the basis for the
change.
(3) Report on policy and claims data.--
(A) In general.--Not later than 90 days after the date of
enactment of this Act, the Administrator shall submit to
Congress a report on the feasibility of--
(i) releasing property-level policy and claims data for
flood insurance coverage under the National Flood Insurance
Program; and
(ii) establishing guidelines for releasing property-level
policy and claims data for flood insurance coverage under the
National Flood Insurance Program in accordance with section
552a of title 5, United States Code (commonly known as the
``Privacy Act of 1974'').
(B) Contents.--The report submitted under subparagraph (A)
shall include--
(i) an analysis and assessment of how releasing property-
level policy and claims data for flood insurance coverage
under the National Flood Insurance Program will aid policy
holders and insurers to understand how the Administration
determines actuarial premium rates and assesses flood risks;
and
(ii) recommendations for protecting personal information in
accordance with section 552a of title 5, United States Code
(commonly known as the ``Privacy Act of 1974'').
SEC. 104. AFFORDABILITY STUDY AND REPORT.
Notwithstanding the deadline under section 100236(c) of the
Biggert-Waters Flood Insurance Reform Act of 2012 (Public Law
112-141; 126 Stat. 957), not later than 2 years after the
date of enactment of this Act, the Administrator shall submit
to the full Committee on Banking, Housing, and Urban Affairs
and the full Committee on Appropriations of the Senate and
the full Committee on Financial Services and the full
Committee on Appropriations of the House of Representatives
the affordability study and report required under such
section.
SEC. 105. AFFORDABILITY STUDY FUNDING.
Section 100236(d) of the Biggert-Waters Flood Insurance
Reform Act of 2012 (Public Law 112-141; 126 Stat. 957) is
amended by striking ``not more than $750,000'' and inserting
``such amounts as may be necessary''.
SEC. 106. FUNDS TO REIMBURSE HOMEOWNERS FOR SUCCESSFUL MAP
APPEALS.
(a) In General.--Section 1363(f) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4104(f)) is amended--
(1) in the first sentence, by inserting after ``as the case
may be,'' the following: ``or, in the case of an appeal that
is resolved by submission of conflicting data to the
Scientific Resolution Panel provided for in section 1363A,
the community,''; and
(2) by striking the second sentence and inserting the
following: ``The Administrator may use such amounts from the
National Flood Insurance Fund established under section 1310
as may be necessary to carry out this subsection.''.
(b) Conforming Amendment.--Section 1310(a) of the National
Flood Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended--
(1) in paragraph (6), by striking ``and'' at the end;
(2) in paragraph (7), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(8) for carrying out section 1363(f).''.
SEC. 107. FLOOD PROTECTION SYSTEMS.
(a) Adequate Progress on Construction of Flood Protection
Systems.--Section 1307(e) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4014(e)) is amended--
(1) in the first sentence, by inserting ``or
reconstruction'' after ``construction'';
(2) by striking the second sentence and inserting the
following: ``The Administrator shall find that adequate
progress on the construction or reconstruction of a flood
protection system, based on the present value of the
completed flood protection system, has been made only if (1)
100 percent of the cost of the system has been authorized,
(2) at least 60 percent of the cost of the system has been
appropriated, (3) at least 50 percent of the cost of the
system has been expended, and (4) the system is at least 50
percent completed.''; and
(3) by adding at the end the following: ``Notwithstanding
any other provision of law, in determining whether a
community has made adequate progress on the construction,
reconstruction, or improvement of a flood protection system,
the Administrator shall consider all sources of funding,
including Federal, State, and local funds.''.
(b) Communities Restoring Disaccredited Flood Protection
Systems.--Section 1307(f) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4014(f)) is amended by striking the first
sentence and inserting the following: ``Notwithstanding any
other provision of law, this subsection shall apply to
riverine and coastal levees that are located in a community
which has been determined by the Administrator of the Federal
Emergency Management Agency to be in the process of restoring
flood protection afforded by a flood protection system that
had been previously accredited on a Flood Insurance Rate Map
as providing 100-year frequency flood protection but no
longer does so, and shall apply without regard to the level
of Federal funding of or participation in the construction,
reconstruction, or improvement of the flood protection
system.''.
SEC. 108. TREATMENT OF FLOODPROOFED RESIDENTIAL BASEMENTS.
In implementing section 1308(h) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4015(h)), the Administrator
shall rate a covered structure using the elevation difference
between the floodproofed elevation of the covered structure
and the adjusted base flood elevation of the covered
structure.
SEC. 109. DESIGNATION OF FLOOD INSURANCE ADVOCATE.
(a) In General.--The Administrator shall designate a Flood
Insurance Advocate to advocate for the fair treatment of
policy holders under the National Flood Insurance Program and
property owners in the mapping of flood hazards, the
identification of risks from flood, and the implementation of
measures to minimize the risk of flood.
(b) Duties and Responsibilities.--The duties and
responsibilities of the Flood Insurance Advocate designated
under subsection (a) shall be to--
(1) educate property owners and policyholders under the
National Flood Insurance Program on--
(A) individual flood risks;
(B) flood mitigation;
(C) measures to reduce flood insurance rates through
effective mitigation; and
(D) the flood insurance rate map review and amendment
process;
(2) assist policy holders under the National Flood
Insurance Program and property owners to understand the
procedural requirements related to appealing preliminary
flood insurance rate maps and implementing measures to
mitigate evolving flood risks;
(3) assist in the development of regional capacity to
respond to individual constituent concerns about flood
insurance rate map amendments and revisions;
(4) coordinate outreach and education with local officials
and community leaders in areas impacted by proposed flood
insurance rate map amendments and revisions; and
(5) aid potential policy holders under the National Flood
Insurance Program in obtaining and verifying accurate and
reliable flood insurance rate information when purchasing or
renewing a flood insurance policy.
(c) Authorization of Appropriations.--There are authorized
to be appropriated for each fiscal year such sums as may be
necessary to carry out the duties and responsibilities of the
Flood Insurance Advocate.
SEC. 110. EXCEPTIONS TO ESCROW REQUIREMENT FOR FLOOD
INSURANCE PAYMENTS.
(a) In General.--Section 102(d)(1) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(d)(1)) is amended--
(1) in subparagraph (A), in the second sentence, by
striking ``subparagraph (C)'' and inserting ``subparagraph
(B)''; and
(2) in subparagraph (B)--
(A) in clause (ii), by redesignating subclauses (I) and
(II) as items (aa) and (bb), respectively, and adjusting the
margins accordingly;
(B) by redesignating clauses (i) and (ii) as subclauses (I)
and (II), respectively, and adjusting the margins
accordingly;
(C) in the matter preceding subclause (I), as redesignated
by subparagraph (B), by striking ``(A) or (B), if--'' and
inserting the following: ``(A)--
``(i) if--'';
(D) by striking the period at the end and inserting ``;
or''; and
(E) by adding at the end the following
``(ii) in the case of a loan that--
``(I) is in a junior or subordinate position to a senior
lien secured by the same residential improved real estate or
mobile home for which flood insurance is being provided at
the time of the origination of the loan;
``(II) is secured by residential improved real estate or a
mobile home that is part of a condominium, cooperative, or
other project development, if the residential improved real
estate or mobile home is covered by a flood insurance policy
that--
``(aa) meets the requirements that the regulated lending
institution is required to enforce under subsection (b)(1);
``(bb) is provided by the condominium association,
cooperative, homeowners association, or other applicable
group; and
``(cc) the premium for which is paid by the condominium
association, cooperative, homeowners association, or other
applicable group as a common expense;
``(III) is secured by residential improved real estate or a
mobile home that is used as collateral for a business
purpose;
``(IV) is a home equity line of credit;
``(V) is a nonperforming loan; or
``(VI) has a term of not longer than 12 months.''.
(b) Applicability.--
(1) In general.--
(A) Required application.--The amendments to section
102(d)(1) of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a(d)(1)) made by section 100209(a) of the Biggert-
Waters Flood Insurance Reform Act of 2012 (Public Law 112-
141; 126 Stat. 920) and by subsection (a) of this section
shall apply to any loan that is originated, refinanced,
increased, extended, or renewed on or after January 1, 2016.
(B) Optional application.--
(i) Definitions.--In this subparagraph--
[[Page S622]]
(I) the terms ``Federal entity for lending regulation'',
``improved real estate'', ``regulated lending institution'',
and ``servicer'' have the meanings given the terms in section
3 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4003);
(II) the term ``outstanding loan'' means a loan that--
(aa) is outstanding as of January 1, 2016;
(bb) is not subject to the requirement to escrow premiums
and fees for flood insurance under section 102(d)(1) of the
Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(d)(1))
as in effect on July 5, 2012; and
(cc) would, if the loan had been originated, refinanced,
increased, extended, or renewed on or after January 1, 2016,
be subject to the requirements under section 102(d)(1)(A) of
the Flood Disaster Protection Act of 1973, as amended; and
(III) the term ``section 102(d)(1)(A) of the Flood Disaster
Protection Act of 1973, as amended'' means section
102(d)(1)(A) of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a(d)(1)(A)), as amended by--
(aa) section 100209(a) of the Biggert-Waters Flood
Insurance Reform Act of 2012 (Public Law 112-141; 126 Stat.
920); and
(bb) subsection (a) of this section.
(ii) Option to escrow flood insurance payments.--Each
Federal entity for lending regulation (after consultation and
coordination with the Federal Financial Institutions
Examination Council) shall, by regulation, direct that each
regulated lending institution or servicer of an outstanding
loan shall offer and make available to a borrower the option
to have the borrower's payment of premiums and fees for flood
insurance under the National Flood Insurance Act of 1968 (42
U.S.C. 4001 et seq.), including the escrow of such payments,
be treated in the same manner provided under section
102(d)(1)(A) of the Flood Disaster Protection Act of 1973, as
amended.
(2) Repeal of 2-year delay on applicability.--Subsection
(b) of section 100209 of the Biggert-Waters Flood Insurance
Reform Act of 2012 (Public Law 112-141; 126 Stat. 920) is
repealed.
(3) Rule of construction.--Nothing in this section or the
amendments made by this section shall be construed to
supersede, during the period beginning on July 6, 2012 and
ending on December 31, 2015, the requirements under section
102(d)(1) of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a(d)(1)), as in effect on July 5, 2012.
SEC. 111. MONTHLY INSTALLMENT PAYMENTS FOR PREMIUMS.
Section 1308(g) of the National Flood Insurance Act of 1968
(42 U.S.C. 4015(g)) is amended by striking ``either annually
or in more frequent installments'' and inserting ``annually,
monthly, or in other installments that are more frequent than
annually''.
SEC. 112. ACCOUNTING FOR FLOOD MITIGATION ACTIVITIES IN
ESTIMATES OF PREMIUM RATES.
Section 1307(a)(1) of the National Flood Insurance Act of
1968 (42 U.S.C. 4014(a)(1)) is amended by amending
subparagraph (A) to read as follows:
``(A) based on consideration of--
``(i) the risk involved and accepted actuarial principles;
and
``(ii) the flood mitigation activities that an owner or
lessee has undertaken on a property, including differences in
the risk involved due to land use measures, floodproofing,
flood forecasting, and similar measures,''.
SEC. 113. HOME IMPROVEMENT FAIRNESS.
Section 1307(a)(2)(E)(ii) of the National Flood Insurance
Act of 1968 (42 U.S.C. 4014(a)(2)(E)(ii)) is amended by
striking ``30 percent'' and inserting ``50 percent''.
SEC. 114. STUDY OF VOLUNTARY COMMUNITY-BASED FLOOD INSURANCE
OPTIONS.
(a) Study.--
(1) Study required.--The Administrator shall conduct a
study to assess options, methods, and strategies for making
available voluntary community-based flood insurance policies
through the National Flood Insurance Program.
(2) Considerations.--The study conducted under paragraph
(1) shall--
(A) take into consideration and analyze how voluntary
community-based flood insurance policies--
(i) would affect communities having varying economic bases,
geographic locations, flood hazard characteristics or
classifications, and flood management approaches; and
(ii) could satisfy the applicable requirements under
section 102 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a); and
(B) evaluate the advisability of making available voluntary
community-based flood insurance policies to communities,
subdivisions of communities, and areas of residual risk.
(3) Consultation.--In conducting the study required under
paragraph (1), the Administrator may consult with the
Comptroller General of the United States, as the
Administrator determines is appropriate.
(b) Report by the Administrator.--
(1) Report required.--Not later than 18 months after the
date of enactment of this Act, the Administrator shall submit
to the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Financial Services of the
House of Representatives a report that contains the results
and conclusions of the study conducted under subsection (a).
(2) Contents.--The report submitted under paragraph (1)
shall include recommendations for--
(A) the best manner to incorporate voluntary community-
based flood insurance policies into the National Flood
Insurance Program; and
(B) a strategy to implement voluntary community-based flood
insurance policies that would encourage communities to
undertake flood mitigation activities, including the
construction, reconstruction, or improvement of levees, dams,
or other flood control structures.
(c) Report by Comptroller General.--Not later than 6 months
after the date on which the Administrator submits the report
required under subsection (b), the Comptroller General of the
United States shall--
(1) review the report submitted by the Administrator; and
(2) submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives a report that contains--
(A) an analysis of the report submitted by the
Administrator;
(B) any comments or recommendations of the Comptroller
General relating to the report submitted by the
Administrator; and
(C) any other recommendations of the Comptroller General
relating to community-based flood insurance policies.
SEC. 115. EXEMPTION FROM FEES FOR CERTAIN MAP CHANGE
REQUESTS.
Notwithstanding any other provision of law, a requester
shall be exempt from submitting a review or processing fee
for a request for a flood insurance rate map change based on
a habitat restoration project that is funded in whole or in
part with Federal or State funds, including dam removal,
culvert redesign or installation, or the installation of fish
passage.
SEC. 116. FLOOD MITIGATION METHODS FOR URBAN BUILDINGS.
(a) In General.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall issue
guidelines for property owners that--
(1) provide alternative methods of mitigation, other than
building elevation, to reduce flood risk to urban residential
buildings that cannot be elevated due to their structural
characteristics, including--
(A) types of building materials; and
(B) types of floodproofing; and
(2) inform property owners about how the implementation of
mitigation methods described in paragraph (1) may affect risk
premium rates for flood insurance coverage under the National
Flood Insurance Program.
(b) Calculation of Risk Premium Rates.--In calculating the
risk premium rate charged for flood insurance for a property
under section 1308 of the National Flood Insurance Act of
1968 (42 U.S.C. 4015), the Administrator shall take into
account the implementation of any mitigation method
identified by the Administrator in the guidance issued under
subsection (a) of this section.
TITLE II--NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS
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.
[[Page S623]]
``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
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
identification information and criminal history record
information, including the establishment of reasonable fees
required to perform a criminal history record check and
appropriate safeguards for maintaining confidentiality and
security of the information.
``(D) Form of request.--A submission under subparagraph
(C)(i) shall include such 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 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 under title 18, United States
Code, imprisoned for not more than 2 years, or both.
``(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, rules, 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 2014, 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--
[[Page S624]]
``(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 referenced in 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 2014; 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
[[Page S625]]
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 subparagraphs (B) and (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.
[[Page S626]]
``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.''.
[[Page S627]]
Mr. COCHRAN. Madam President, I move to reconsider the vote.
Mr. CARDIN. I move to lay that motion upon the table.
The motion to lay upon the table was agreed to.
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