[Congressional Record Volume 161, Number 3 (Thursday, January 8, 2015)]
[Senate]
[Pages S110-S117]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 1. Ms. WARREN (for herself and Mr. Schumer) proposed an amendment
to the bill H.R. 26, to extend the termination date of the Terrorism
Insurance Program established under the Terrorism Risk Insurance Act of
2002, and for other purposes; as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Terrorism
Risk Insurance Program Reauthorization Act of 2015''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title and table of contents.
TITLE I--EXTENSION OF TERRORISM INSURANCE PROGRAM
Sec. 101. Extension of Terrorism Insurance Program.
Sec. 102. Federal share.
Sec. 103. Program trigger.
Sec. 104. Recoupment of Federal share of compensation under the
program.
Sec. 105. Certification of acts of terrorism; consultation with
Secretary of Homeland Security.
Sec. 106. Technical amendments.
Sec. 107. Improving the certification process.
Sec. 108. GAO study.
Sec. 109. Membership of Board of Governors of the Federal Reserve
System.
Sec. 110. Advisory Committee on Risk-Sharing Mechanisms.
Sec. 111. Reporting of terrorism insurance data.
[[Page S111]]
Sec. 112. Annual study of small insurer market competitiveness.
TITLE II--NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS REFORM
Sec. 201. Short title.
Sec. 202. Reestablishment of the National Association of Registered
Agents and Brokers.
TITLE I--EXTENSION OF TERRORISM INSURANCE PROGRAM
SEC. 101. EXTENSION OF TERRORISM INSURANCE PROGRAM.
Section 108(a) of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note) is amended by striking ``December 31,
2014'' and inserting ``December 31, 2020''.
SEC. 102. FEDERAL SHARE.
Section 103(e)(1)(A) of the Terrorism Risk Insurance Act of
2002 (15 U.S.C. 6701 note) is amended by inserting ``and
beginning on January 1, 2016, shall decrease by 1 percentage
point per calendar year until equal to 80 percent'' after
``85 percent''.
SEC. 103. PROGRAM TRIGGER.
Subparagraph (B) of section 103(e)(1) (15 U.S.C. 6701 note)
is amended in the matter preceding clause (i)--
(1) by striking ``a certified act'' and inserting
``certified acts'';
(2) by striking ``such certified act'' and inserting ``such
certified acts''; and
(3) by striking ``exceed'' and all that follows through
clause (ii) and inserting the following: ``exceed--
``(i) $100,000,000, with respect to such insured losses
occurring in calendar year 2015;
``(ii) $120,000,000, with respect to such insured losses
occurring in calendar year 2016;
``(iii) $140,000,000, with respect to such insured losses
occurring in calendar year 2017;
``(iv) $160,000,000, with respect to such insured losses
occurring in calendar year 2018;
``(v) $180,000,000, with respect to such insured losses
occurring in calendar year 2019; and
``(vi) $200,000,000, with respect to such insured losses
occurring in calendar year 2020 and any calendar year
thereafter.''.
SEC. 104. RECOUPMENT OF FEDERAL SHARE OF COMPENSATION UNDER
THE PROGRAM.
Section 103(e) of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note) is amended--
(1) by amending paragraph (6) to read as follows:
``(6) Insurance marketplace aggregate retention amount.--
``(A) In general.--For purposes of paragraph (7), the
insurance marketplace aggregate retention amount shall be the
lesser of--
``(i) $27,500,000,000, as such amount is revised pursuant
to this paragraph; and
``(ii) the aggregate amount, for all insurers, of insured
losses during such calendar year.
``(B) Revision of insurance marketplace aggregate retention
amount.--
``(i) Phase-in.--Beginning in the calendar year of
enactment of the Terrorism Risk Insurance Program
Reauthorization Act of 2015, the amount set forth under
subparagraph (A)(i) shall increase by $2,000,000,000 per
calendar year until equal to $37,500,000,000.
``(ii) Further revision.--Beginning in the calendar year
that follows the calendar year in which the amount set forth
under subparagraph (A)(i) is equal to $37,500,000,000, the
amount under subparagraph (A)(i) shall be revised to be the
amount equal to the annual average of the sum of insurer
deductibles for all insurers participating in the Program for
the prior 3 calendar years, as such sum is determined by the
Secretary under subparagraph (C).
``(C) Rulemaking.--Not later than 3 years after the date of
enactment of the Terrorism Risk Insurance Program
Reauthorization Act of 2015, the Secretary shall--
``(i) issue final rules for determining the amount of the
sum described under subparagraph (B)(ii); and
``(ii) provide a timeline for public notification of such
determination.''; and
(2) in paragraph (7)--
(A) in subparagraph (A)--
(i) in the matter preceding clause (i), by striking ``for
each of the periods referred to in subparagraphs (A) through
(E) of paragraph (6)''; and
(ii) in clause (i), by striking ``for such period'';
(B) by striking subparagraph (B) and inserting the
following:
``(B) [Reserved.]'';
(C) in subparagraph (C)--
(i) by striking ``occurring during any of the periods
referred to in any of subparagraphs (A) through (E) of
paragraph (6), terrorism loss risk-spreading premiums in an
amount equal to 133 percent'' and inserting ``, terrorism
loss risk-spreading premiums in an amount equal to 140
percent''; and
(ii) by inserting ``as calculated under subparagraph (A)''
after ``mandatory recoupment amount''; and
(D) in subparagraph (E)(i)--
(i) in subclause (I)--
(I) by striking ``2010'' and inserting ``2017''; and
(II) by striking ``2012'' and inserting ``2019'';
(ii) in subclause (II)--
(I) by striking ``2011'' and inserting ``2018'';
(II) by striking ``2012'' and inserting ``2019''; and
(III) by striking ``2017'' and inserting ``2024''; and
(iii) in subclause (III)--
(I) by striking ``2012'' and inserting ``2019''; and
(II) by striking ``2017'' and inserting ``2024''.
SEC. 105. CERTIFICATION OF ACTS OF TERRORISM; CONSULTATION
WITH SECRETARY OF HOMELAND SECURITY.
Paragraph (1)(A) of section 102 (15 U.S.C. 6701 note) is
amended in the matter preceding clause (i), by striking
``concurrence with the Secretary of State'' and inserting
``consultation with the Secretary of Homeland Security''.
SEC. 106. TECHNICAL AMENDMENTS.
The Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701
note) is amended--
(1) in section 102--
(A) in paragraph (3)--
(i) by redesignating subparagraphs (A), (B), and (C) as
clauses (i), (ii), and (iii), respectively;
(ii) in the matter preceding clause (i) (as so
redesignated), by striking ``An entity has'' and inserting
the following:
``(A) In general.--An entity has''; and
(iii) by adding at the end the following new subparagraph:
``(B) Rule of construction.--An entity, including any
affiliate thereof, does not have `control' over another
entity, if, as of the date of enactment of the Terrorism Risk
Insurance Program Reauthorization Act of 2015, the entity is
acting as an attorney-in-fact, as defined by the Secretary,
for the other entity and such other entity is a reciprocal
insurer, provided that the entity is not, for reasons other
than the attorney-in-fact relationship, defined as having
`control' under subparagraph (A).'';
(B) in paragraph (7)--
(i) by striking subparagraphs (A) through (F) and inserting
the following:
``(A) the value of an insurer's direct earned premiums
during the immediately preceding calendar year, multiplied by
20 percent; and'';
(ii) by redesignating subparagraph (G) as subparagraph (B);
and
(iii) in subparagraph (B), as so redesignated by clause
(ii)--
(I) by striking ``notwithstanding subparagraphs (A) through
(F), for the Transition Period or any Program Year'' and
inserting ``notwithstanding subparagraph (A), for any
calendar year''; and
(II) by striking ``Period or Program Year'' and inserting
``calendar year'';
(C) by striking paragraph (11); and
(D) by redesignating paragraphs (12) through (16) as
paragraphs (11) through (15), respectively; and
(2) in section 103--
(A) in subsection (b)(2)--
(i) in subparagraph (B), by striking ``, purchase,''; and
(ii) in subparagraph (C), by striking ``, purchase,'';
(B) in subsection (c), by striking ``Program Year'' and
inserting ``calendar year'';
(C) in subsection (e)--
(i) in paragraph (1)(A), as previously amended by section
102--
(I) by striking ``the Transition Period and each Program
Year through Program Year 4 shall be equal to 90 percent, and
during Program Year 5 and each Program Year thereafter'' and
inserting ``each calendar year'';
(II) by striking the comma after ``80 percent''; and
(III) by striking ``such Transition Period or such Program
Year'' and inserting ``such calendar year''; and
(ii) in paragraph (2)(A), by striking ``the period
beginning on the first day of the Transition Period and
ending on the last day of Program Year 1, or during any
Program Year thereafter'' and inserting ``a calendar year'';
and
(iii) in paragraph (3), by striking ``the period beginning
on the first day of the Transition Period and ending on the
last day of Program Year 1, or during any other Program
Year'' and inserting ``any calendar year''; and
(D) in subsection (g)(2)--
(i) by striking ``the Transition Period or a Program Year''
each place that term appears and inserting ``the calendar
year'';
(ii) by striking ``such period'' and inserting ``the
calendar year''; and
(iii) by striking ``that period'' and inserting ``the
calendar year''.
SEC. 107. IMPROVING THE CERTIFICATION PROCESS.
(a) Definitions.--As used in this section--
(1) the term ``act of terrorism'' has the same meaning as
in section 102(1) of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note);
(2) the term ``certification process'' means the process by
which the Secretary determines whether to certify an act as
an act of terrorism under section 102(1) of the Terrorism
Risk Insurance Act of 2002 (15 U.S.C. 6701 note); and
(3) the term ``Secretary'' means the Secretary of the
Treasury.
(b) Study.--Not later than 9 months after the date of
enactment of this Act, the Secretary shall conduct and
complete a study on the certification process.
(c) Required Content.--The study required under subsection
(a) shall include an examination and analysis of--
(1) the establishment of a reasonable timeline by which the
Secretary must make an accurate determination on whether to
certify an act as an act of terrorism;
(2) the impact that the length of any timeline proposed to
be established under
[[Page S112]]
paragraph (1) may have on the insurance industry,
policyholders, consumers, and taxpayers as a whole;
(3) the factors the Secretary would evaluate and monitor
during the certification process, including the ability of
the Secretary to obtain the required information regarding
the amount of projected and incurred losses resulting from an
act which the Secretary would need in determining whether to
certify the act as an act of terrorism;
(4) the appropriateness, efficiency, and effectiveness of
the consultation process required under section 102(1)(A) of
the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701
note) and any recommendations on changes to the consultation
process; and
(5) the ability of the Secretary to provide guidance and
updates to the public regarding any act that may reasonably
be certified as an act of terrorism.
(d) Report.--Upon completion of the study required under
subsection (a), the Secretary shall submit a report on the
results of such study to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
(e) Rulemaking.--Section 102(1) of the Terrorism Risk
Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
(1) by redesignating subparagraph (D) as subparagraph (E);
and
(2) by inserting after subparagraph (C) the following:
``(D) Timing of certification.--Not later than 9 months
after the report required under section 107 of the Terrorism
Risk Insurance Program Reauthorization Act of 2015 is
submitted to the appropriate committees of Congress, the
Secretary shall issue final rules governing the certification
process, including establishing a timeline for which an act
is eligible for certification by the Secretary on whether an
act is an act of terrorism under this paragraph.''.
SEC. 108. GAO STUDY.
(a) Study.--Not later than 2 years after the date of
enactment of this Act, the Comptroller General of the United
States shall complete a study on the viability and effects of
the Federal Government--
(1) assessing and collecting upfront premiums on insurers
that participate in the Terrorism Insurance Program
established under the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note) (hereafter in this section referred to
as the ``Program''), which shall include a comparison of
practices in international markets to assess and collect
premiums either before or after terrorism losses are
incurred; and
(2) creating a capital reserve fund under the Program and
requiring insurers participating in the Program to dedicate
capital specifically for terrorism losses before such losses
are incurred, which shall include a comparison of practices
in international markets to establish reserve funds.
(b) Required Content.--The study required under subsection
(a) shall examine, but shall not be limited to, the following
issues:
(1) Upfront premiums.--With respect to upfront premiums
described in subsection (a)(1)--
(A) how the Federal Government could determine the price of
such upfront premiums on insurers that participate in the
Program;
(B) how the Federal Government could collect and manage
such upfront premiums;
(C) how the Federal Government could ensure that such
upfront premiums are not spent for purposes other than claims
through the Program;
(D) how the assessment and collection of such upfront
premiums could affect take-up rates for terrorism risk
coverage in different regions and industries and how it could
impact small businesses and consumers in both metropolitan
and non-metropolitan areas;
(E) the effect of collecting such upfront premiums on
insurers both large and small;
(F) the effect of collecting such upfront premiums on the
private market for terrorism risk reinsurance; and
(G) the size of any Federal Government subsidy insurers may
receive through their participation in the Program, taking
into account the Program's current post-event recoupment
structure.
(2) Capital reserve fund.--With respect to the capital
reserve fund described in subsection (a)(2)--
(A) how the creation of a capital reserve fund would affect
the Federal Government's fiscal exposure under the Terrorism
Risk Insurance Program and the ability of the Program to meet
its statutory purposes;
(B) how a capital reserve fund would impact insurers and
reinsurers, including liquidity, insurance pricing, and
capacity to provide terrorism risk coverage;
(C) the feasibility of segregating funds attributable to
terrorism risk from funds attributable to other insurance
lines;
(D) how a capital reserve fund would be viewed and treated
under current Financial Accounting Standards Board accounting
rules and the tax laws; and
(E) how a capital reserve fund would affect the States'
ability to regulate insurers participating in the Program.
(3) International practices.--With respect to international
markets referred to in paragraphs (1) and (2) of subsection
(a), how other countries, if any--
(A) have established terrorism insurance structures;
(B) charge premiums or otherwise collect funds to pay for
the costs of terrorism insurance structures, including risk
and administrative costs; and
(C) have established capital reserve funds to pay for the
costs of terrorism insurance structures.
(c) Report.--Upon completion of the study required under
subsection (a), the Comptroller General shall submit a report
on the results of such study to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
(d) Public Availability.--The study and report required
under this section shall be made available to the public in
electronic form and shall be published on the website of the
Government Accountability Office.
SEC. 109. MEMBERSHIP OF BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM.
(a) In General.--The first undesignated paragraph of
section 10 of the Federal Reserve Act (12 U.S.C. 241) is
amended by inserting after the second sentence the following:
``In selecting members of the Board, the President shall
appoint at least 1 member with demonstrated primary
experience working in or supervising community banks having
less than $10,000,000,000 in total assets.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of enactment of this Act and
apply to appointments made on and after that effective date,
excluding any nomination pending in the Senate on that date.
SEC. 110. ADVISORY COMMITTEE ON RISK-SHARING MECHANISMS.
(a) Finding; Rule of Construction.--
(1) Finding.--Congress finds that it is desirable to
encourage the growth of nongovernmental, private market
reinsurance capacity for protection against losses arising
from acts of terrorism.
(2) Rule of construction.--Nothing in this Act, any
amendment made by this Act, or the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note) shall prohibit insurers
from developing risk-sharing mechanisms to voluntarily
reinsure terrorism losses between and among themselves.
(b) Advisory Committee on Risk-Sharing Mechanisms.--
(1) Establishment.--The Secretary of the Treasury shall
establish and appoint an advisory committee to be known as
the ``Advisory Committee on Risk-Sharing Mechanisms''
(referred to in this subsection as the ``Advisory
Committee'').
(2) Duties.--The Advisory Committee shall provide advice,
recommendations, and encouragement with respect to the
creation and development of the nongovernmental risk-sharing
mechanisms described under subsection (a).
(3) Membership.--The Advisory Committee shall be composed
of 9 members who are directors, officers, or other employees
of insurers, reinsurers, or capital market participants that
are participating or that desire to participate in the
nongovernmental risk-sharing mechanisms described under
subsection (a), and who are representative of the affected
sectors of the insurance industry, including commercial
property insurance, commercial casualty insurance,
reinsurance, and alternative risk transfer industries.
SEC. 111. REPORTING OF TERRORISM INSURANCE DATA.
Section 104 (15 U.S.C. 6701 note) is amended by adding at
the end the following new subsection:
``(h) Reporting of Terrorism Insurance Data.--
``(1) Authority.--During the calendar year beginning on
January 1, 2016, and in each calendar year thereafter, the
Secretary shall require insurers participating in the Program
to submit to the Secretary such information regarding
insurance coverage for terrorism losses of such insurers as
the Secretary considers appropriate to analyze the
effectiveness of the Program, which shall include information
regarding--
``(A) lines of insurance with exposure to such losses;
``(B) premiums earned on such coverage;
``(C) geographical location of exposures;
``(D) pricing of such coverage;
``(E) the take-up rate for such coverage;
``(F) the amount of private reinsurance for acts of
terrorism purchased; and
``(G) such other matters as the Secretary considers
appropriate.
``(2) Reports.--Not later than June 30, 2016, and every
other June 30 thereafter, the Secretary shall submit a report
to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate that includes--
``(A) an analysis of the overall effectiveness of the
Program;
``(B) an evaluation of any changes or trends in the data
collected under paragraph (1);
``(C) an evaluation of whether any aspects of the Program
have the effect of discouraging or impeding insurers from
providing commercial property casualty insurance coverage or
coverage for acts of terrorism;
``(D) an evaluation of the impact of the Program on
workers' compensation insurers; and
``(E) in the case of the data reported in paragraph (1)(B),
an updated estimate of the total amount earned since January
1, 2003.
``(3) Protection of data.--To the extent possible, the
Secretary shall contract with an insurance statistical
aggregator to collect the information described in paragraph
(1), which shall keep any nonpublic information
[[Page S113]]
confidential and provide it to the Secretary in an aggregate
form or in such other form or manner that does not permit
identification of the insurer submitting such information.
``(4) Advance coordination.--Before collecting any data or
information under paragraph (1) from an insurer, or affiliate
of an insurer, the Secretary shall coordinate with the
appropriate State insurance regulatory authorities and any
relevant government agency or publicly available sources to
determine if the information to be collected is available
from, and may be obtained in a timely manner by, individually
or collectively, such entities. If the Secretary determines
that such data or information is available, and may be
obtained in a timely matter, from such entities, the
Secretary shall obtain the data or information from such
entities. If the Secretary determines that such data or
information is not so available, the Secretary may collect
such data or information from an insurer and affiliates.
``(5) Confidentiality.--
``(A) Retention of privilege.--The submission of any non-
publicly available data and information to the Secretary and
the sharing of any non-publicly available data with or by the
Secretary among other Federal agencies, the State insurance
regulatory authorities, or any other entities under this
subsection shall not constitute a waiver of, or otherwise
affect, any privilege arising under Federal or State law
(including the rules of any Federal or State court) to which
the data or information is otherwise subject.
``(B) Continued application of prior confidentiality
agreements.--Any requirement under Federal or State law to
the extent otherwise applicable, or any requirement pursuant
to a written agreement in effect between the original source
of any non-publicly available data or information and the
source of such data or information to the Secretary,
regarding the privacy or confidentiality of any data or
information in the possession of the source to the Secretary,
shall continue to apply to such data or information after the
data or information has been provided pursuant to this
subsection.
``(C) Information-sharing agreement.--Any data or
information obtained by the Secretary under this subsection
may be made available to State insurance regulatory
authorities, individually or collectively through an
information-sharing agreement that--
``(i) shall comply with applicable Federal law; and
``(ii) shall not constitute a waiver of, or otherwise
affect, any privilege under Federal or State law (including
any privilege referred to in subparagraph (A) and the rules
of any Federal or State court) to which the data or
information is otherwise subject.
``(D) Agency disclosure requirements.--Section 552 of title
5, United States Code, including any exceptions thereunder,
shall apply to any data or information submitted under this
subsection to the Secretary by an insurer or affiliate of an
insurer.''.
SEC. 112. ANNUAL STUDY OF SMALL INSURER MARKET
COMPETITIVENESS.
Section 108 (15 U.S.C. 6701 note) is amended by adding at
the end the following new subsection:
``(h) Study of Small Insurer Market Competitiveness.--
``(1) In general.--Not later than June 30, 2017, and every
other June 30 thereafter, the Secretary shall conduct a study
of small insurers (as such term is defined by regulation by
the Secretary) participating in the Program, and identify any
competitive challenges small insurers face in the terrorism
risk insurance marketplace, including--
``(A) changes to the market share, premium volume, and
policyholder surplus of small insurers relative to large
insurers;
``(B) how the property and casualty insurance market for
terrorism risk differs between small and large insurers, and
whether such a difference exists within other perils;
``(C) the impact of the Program's mandatory availability
requirement under section 103(c) on small insurers;
``(D) the effect of increasing the trigger amount for the
Program under section 103(e)(1)(B) on small insurers;
``(E) the availability and cost of private reinsurance for
small insurers; and
``(F) the impact that State workers compensation laws have
on small insurers and workers compensation carriers in the
terrorism risk insurance marketplace.
``(2) Report.--The Secretary shall submit a report to the
Congress setting forth the findings and conclusions of each
study required under paragraph (1).''.
TITLE II--NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS REFORM
SEC. 201. SHORT TITLE.
This title may be cited as the ``National Association of
Registered Agents and Brokers Reform Act of 2015''.
SEC. 202. REESTABLISHMENT OF THE NATIONAL ASSOCIATION OF
REGISTERED AGENTS AND BROKERS.
(a) In General.--Subtitle C of title III of the Gramm-
Leach-Bliley Act (15 U.S.C. 6751 et seq.) is amended to read
as follows:
``Subtitle C--National Association of Registered Agents and Brokers
``SEC. 321. NATIONAL ASSOCIATION OF REGISTERED AGENTS AND
BROKERS.
``(a) Establishment.--There is established the National
Association of Registered Agents and Brokers (referred to in
this subtitle as the `Association').
``(b) Status.--The Association shall--
``(1) be a nonprofit corporation;
``(2) not be an agent or instrumentality of the Federal
Government;
``(3) be an independent organization that may not be merged
with or into any other private or public entity; and
``(4) except as otherwise provided in this subtitle, be
subject to, and have all the powers conferred upon, a
nonprofit corporation by the District of Columbia Nonprofit
Corporation Act (D.C. Code, sec. 29-301.01 et seq.) or any
successor thereto.
``SEC. 322. PURPOSE.
``The purpose of the Association shall be to provide a
mechanism through which licensing, continuing education, and
other nonresident insurance producer qualification
requirements and conditions may be adopted and applied on a
multi-state basis without affecting the laws, rules, and
regulations, and preserving the rights of a State, pertaining
to--
``(1) licensing, continuing education, and other
qualification requirements of insurance producers that are
not members of the Association;
``(2) resident or nonresident insurance producer
appointment requirements;
``(3) supervising and disciplining resident and nonresident
insurance producers;
``(4) establishing licensing fees for resident and
nonresident insurance producers so that there is no loss of
insurance producer licensing revenue to the State; and
``(5) prescribing and enforcing laws and regulations
regulating the conduct of resident and nonresident insurance
producers.
``SEC. 323. MEMBERSHIP.
``(a) Eligibility.--
``(1) In general.--Any insurance producer licensed in its
home State shall, subject to paragraphs (2) and (4), be
eligible to become a member of the Association.
``(2) Ineligibility for suspension or revocation of
license.--Subject to paragraph (3), an insurance producer is
not eligible to become a member of the Association if a State
insurance regulator has suspended or revoked the insurance
license of the insurance producer in that State.
``(3) Resumption of eligibility.--Paragraph (2) shall cease
to apply to any insurance producer if--
``(A) the State insurance regulator reissues or renews the
license of the insurance producer in the State in which the
license was suspended or revoked, or otherwise terminates or
vacates the suspension or revocation; or
``(B) the suspension or revocation expires or is
subsequently overturned by a court of competent jurisdiction.
``(4) Criminal history record check required.--
``(A) In general.--An insurance producer who is an
individual shall not be eligible to become a member of the
Association unless the insurance producer has undergone a
criminal history record check that complies with regulations
prescribed by the Attorney General of the United States under
subparagraph (K).
``(B) Criminal history record check requested by home
state.--An insurance producer who is licensed in a State and
who has undergone a criminal history record check during the
2-year period preceding the date of submission of an
application to become a member of the Association, in
compliance with a requirement to undergo such criminal
history record check as a condition for such licensure in the
State, shall be deemed to have undergone a criminal history
record check for purposes of subparagraph (A).
``(C) Criminal history record check requested by
association.--
``(i) In general.--The Association shall, upon request by
an insurance producer licensed in a State, submit
fingerprints or other identification information obtained
from the insurance producer, and a request for a criminal
history record check of the insurance producer, to the
Federal Bureau of Investigation.
``(ii) Procedures.--The board of directors of the
Association (referred to in this subtitle as the `Board')
shall prescribe procedures for obtaining and utilizing
fingerprints or other identification information and criminal
history record information, including the establishment of
reasonable fees to defray the expenses of the Association in
connection with the performance of a criminal history record
check and appropriate safeguards for maintaining
confidentiality and security of the information. Any fees
charged pursuant to this clause shall be separate and
distinct from those charged by the Attorney General pursuant
to subparagraph (I).
``(D) Form of request.--A submission under subparagraph
(C)(i) shall include such fingerprints or other
identification information as is required by the Attorney
General concerning the person about whom the criminal history
record check is requested, and a statement signed by the
person authorizing the Attorney General to provide the
information to the Association and for the Association to
receive the information.
``(E) Provision of information by attorney general.--Upon
receiving a submission under subparagraph (C)(i) from the
Association, the Attorney General shall search all criminal
history records of the Federal Bureau of Investigation,
including records of the Criminal Justice Information
Services Division of the Federal Bureau of Investigation,
that the Attorney General determines
[[Page S114]]
appropriate for criminal history records corresponding to the
fingerprints or other identification information provided
under subparagraph (D) and provide all criminal history
record information included in the request to the
Association.
``(F) Limitation on permissible uses of information.--Any
information provided to the Association under subparagraph
(E) may only--
``(i) be used for purposes of determining compliance with
membership criteria established by the Association;
``(ii) be disclosed to State insurance regulators, or
Federal or State law enforcement agencies, in conformance
with applicable law; or
``(iii) be disclosed, upon request, to the insurance
producer to whom the criminal history record information
relates.
``(G) Penalty for improper use or disclosure.--Whoever
knowingly uses any information provided under subparagraph
(E) for a purpose not authorized in subparagraph (F), or
discloses any such information to anyone not authorized to
receive it, shall be fined not more than $50,000 per
violation as determined by a court of competent jurisdiction.
``(H) Reliance on information.--Neither the Association nor
any of its Board members, officers, or employees shall be
liable in any action for using information provided under
subparagraph (E) as permitted under subparagraph (F) in good
faith and in reasonable reliance on its accuracy.
``(I) Fees.--The Attorney General may charge a reasonable
fee for conducting the search and providing the information
under subparagraph (E), and any such fee shall be collected
and remitted by the Association to the Attorney General.
``(J) Rule of construction.--Nothing in this paragraph
shall be construed as--
``(i) requiring a State insurance regulator to perform
criminal history record checks under this section; or
``(ii) limiting any other authority that allows access to
criminal history records.
``(K) Regulations.--The Attorney General shall prescribe
regulations to carry out this paragraph, which shall
include--
``(i) appropriate protections for ensuring the
confidentiality of information provided under subparagraph
(E); and
``(ii) procedures providing a reasonable opportunity for an
insurance producer to contest the accuracy of information
regarding the insurance producer provided under subparagraph
(E).
``(L) Ineligibility for membership.--
``(i) In general.--The Association may, under reasonably
consistently applied standards, deny membership to an
insurance producer on the basis of criminal history record
information provided under subparagraph (E), or where the
insurance producer has been subject to disciplinary action,
as described in paragraph (2).
``(ii) Rights of applicants denied membership.--The
Association shall notify any insurance producer who is denied
membership on the basis of criminal history record
information provided under subparagraph (E) of the right of
the insurance producer to--
``(I) obtain a copy of all criminal history record
information provided to the Association under subparagraph
(E) with respect to the insurance producer; and
``(II) challenge the denial of membership based on the
accuracy and completeness of the information.
``(M) Definition.--For purposes of this paragraph, the term
`criminal history record check' means a national background
check of criminal history records of the Federal Bureau of
Investigation.
``(b) Authority to Establish Membership Criteria.--The
Association may establish membership criteria that bear a
reasonable relationship to the purposes for which the
Association was established.
``(c) Establishment of Classes and Categories of
Membership.--
``(1) Classes of membership.--The Association may establish
separate classes of membership, with separate criteria, if
the Association reasonably determines that performance of
different duties requires different levels of education,
training, experience, or other qualifications.
``(2) Business entities.--The Association shall establish a
class of membership and membership criteria for business
entities. A business entity that applies for membership shall
be required to designate an individual Association member
responsible for the compliance of the business entity with
Association standards and the insurance laws, standards, and
regulations of any State in which the business entity seeks
to do business on the basis of Association membership.
``(3) Categories.--
``(A) Separate categories for insurance producers
permitted.--The Association may establish separate categories
of membership for insurance producers and for other persons
or entities within each class, based on the types of
licensing categories that exist under State laws.
``(B) Separate treatment for depository institutions
prohibited.--No special categories of membership, and no
distinct membership criteria, shall be established for
members that are depository institutions or for employees,
agents, or affiliates of depository institutions.
``(d) Membership Criteria.--
``(1) In general.--The Association may establish criteria
for membership which shall include standards for personal
qualifications, education, training, and experience. The
Association shall not establish criteria that unfairly limit
the ability of a small insurance producer to become a member
of the Association, including imposing discriminatory
membership fees.
``(2) Qualifications.--In establishing criteria under
paragraph (1), the Association shall not adopt any
qualification less protective to the public than that
contained in the National Association of Insurance
Commissioners (referred to in this subtitle as the `NAIC')
Producer Licensing Model Act in effect as of the date of
enactment of the National Association of Registered Agents
and Brokers Reform Act of 2015, and shall consider the
highest levels of insurance producer qualifications
established under the licensing laws of the States.
``(3) Assistance from states.--
``(A) In general.--The Association may request a State to
provide assistance in investigating and evaluating the
eligibility of a prospective member for membership in the
Association.
``(B) Authorization of information sharing.--A submission
under subsection (a)(4)(C)(i) made by an insurance producer
licensed in a State shall include a statement signed by the
person about whom the assistance is requested authorizing--
``(i) the State to share information with the Association;
and
``(ii) the Association to receive the information.
``(C) Rule of construction.--Subparagraph (A) shall not be
construed as requiring or authorizing any State to adopt new
or additional requirements concerning the licensing or
evaluation of insurance producers.
``(4) Denial of membership.--The Association may, based on
reasonably consistently applied standards, deny membership to
any State-licensed insurance producer for failure to meet the
membership criteria established by the Association.
``(e) Effect of Membership.--
``(1) Authority of association members.--Membership in the
Association shall--
``(A) authorize an insurance producer to sell, solicit, or
negotiate insurance in any State for which the member pays
the licensing fee set by the State for any line or lines of
insurance specified in the home State license of the
insurance producer, and exercise all such incidental powers
as shall be necessary to carry out such activities, including
claims adjustments and settlement to the extent permissible
under the laws of the State, risk management, employee
benefits advice, retirement planning, and any other
insurance-related consulting activities;
``(B) be the equivalent of a nonresident insurance producer
license for purposes of authorizing the insurance producer to
engage in the activities described in subparagraph (A) in any
State where the member pays the licensing fee; and
``(C) be the equivalent of a nonresident insurance producer
license for the purpose of subjecting an insurance producer
to all laws, regulations, provisions or other action of any
State concerning revocation, suspension, or other enforcement
action related to the ability of a member to engage in any
activity within the scope of authority granted under this
subsection and to all State laws, regulations, provisions,
and actions preserved under paragraph (5).
``(2) Violent crime control and law enforcement act of
1994.--Nothing in this subtitle shall be construed to alter,
modify, or supercede any requirement established by section
1033 of title 18, United States Code.
``(3) Agent for remitting fees.--The Association shall act
as an agent for any member for purposes of remitting
licensing fees to any State pursuant to paragraph (1).
``(4) Notification of action.--
``(A) In general.--The Association shall notify the States
(including State insurance regulators) and the NAIC when an
insurance producer has satisfied the membership criteria of
this section. The States (including State insurance
regulators) shall have 10 business days after the date of the
notification in order to provide the Association with
evidence that the insurance producer does not satisfy the
criteria for membership in the Association.
``(B) Ongoing disclosures required.--On an ongoing basis,
the Association shall disclose to the States (including State
insurance regulators) and the NAIC a list of the States in
which each member is authorized to operate. The Association
shall immediately notify the States (including State
insurance regulators) and the NAIC when a member is newly
authorized to operate in one or more States, or is no longer
authorized to operate in one or more States on the basis of
Association membership.
``(5) Preservation of consumer protection and market
conduct regulation.--
``(A) In general.--No provision of this section shall be
construed as altering or affecting the applicability or
continuing effectiveness of any law, regulation, provision,
or other action of any State, including those described in
subparagraph (B), to the extent that the State law,
regulation, provision, or other action is not inconsistent
with the provisions of this subtitle related to market entry
for nonresident insurance producers, and then only to the
extent of the inconsistency.
``(B) Preserved regulations.--The laws, regulations,
provisions, or other actions of any State referred to in
subparagraph (A) include laws, regulations, provisions, or
other actions that--
[[Page S115]]
``(i) regulate market conduct, insurance producer conduct,
or unfair trade practices;
``(ii) establish consumer protections; or
``(iii) require insurance producers to be appointed by a
licensed or authorized insurer.
``(f) Biennial Renewal.--Membership in the Association
shall be renewed on a biennial basis.
``(g) Continuing Education.--
``(1) In general.--The Association shall establish, as a
condition of membership, continuing education requirements
which shall be comparable to the continuing education
requirements under the licensing laws of a majority of the
States.
``(2) State continuing education requirements.--A member
may not be required to satisfy continuing education
requirements imposed under the laws, regulations, provisions,
or actions of any State other than the home State of the
member.
``(3) Reciprocity.--The Association shall not require a
member to satisfy continuing education requirements that are
equivalent to any continuing education requirements of the
home State of the member that have been satisfied by the
member during the applicable licensing period.
``(4) Limitation on the association.--The Association shall
not directly or indirectly offer any continuing education
courses for insurance producers.
``(h) Probation, Suspension and Revocation.--
``(1) Disciplinary action.--The Association may place an
insurance producer that is a member of the Association on
probation or suspend or revoke the membership of the
insurance producer in the Association, or assess monetary
fines or penalties, as the Association determines to be
appropriate, if--
``(A) the insurance producer fails to meet the applicable
membership criteria or other standards established by the
Association;
``(B) the insurance producer has been subject to
disciplinary action pursuant to a final adjudicatory
proceeding under the jurisdiction of a State insurance
regulator;
``(C) an insurance license held by the insurance producer
has been suspended or revoked by a State insurance regulator;
or
``(D) the insurance producer has been convicted of a crime
that would have resulted in the denial of membership pursuant
to subsection (a)(4)(L)(i) at the time of application, and
the Association has received a copy of the final disposition
from a court of competent jurisdiction.
``(2) Violations of association standards.--The Association
shall have the power to investigate alleged violations of
Association standards.
``(3) Reporting.--The Association shall immediately notify
the States (including State insurance regulators) and the
NAIC when the membership of an insurance producer has been
placed on probation or has been suspended, revoked, or
otherwise terminated, or when the Association has assessed
monetary fines or penalties.
``(i) Consumer Complaints.--
``(1) In general.--The Association shall--
``(A) refer any complaint against a member of the
Association from a consumer relating to alleged misconduct or
violations of State insurance laws to the State insurance
regulator where the consumer resides and, when appropriate,
to any additional State insurance regulator, as determined by
standards adopted by the Association; and
``(B) make any related records and information available to
each State insurance regulator to whom the complaint is
forwarded.
``(2) Telephone and other access.--The Association shall
maintain a toll-free number for purposes of this subsection
and, as practicable, other alternative means of communication
with consumers, such as an Internet webpage.
``(3) Final disposition of investigation.--State insurance
regulators shall provide the Association with information
regarding the final disposition of a complaint referred
pursuant to paragraph (1)(A), but nothing shall be construed
to compel a State to release confidential investigation
reports or other information protected by State law to the
Association.
``(j) Information Sharing.--The Association may--
``(1) share documents, materials, or other information,
including confidential and privileged documents, with a
State, Federal, or international governmental entity or with
the NAIC or other appropriate entity referred to paragraphs
(3) and (4), provided that the recipient has the authority
and agrees to maintain the confidentiality or privileged
status of the document, material, or other information;
``(2) limit the sharing of information as required under
this subtitle with the NAIC or any other non-governmental
entity, in circumstances under which the Association
determines that the sharing of such information is
unnecessary to further the purposes of this subtitle;
``(3) establish a central clearinghouse, or utilize the
NAIC or another appropriate entity, as determined by the
Association, as a central clearinghouse, for use by the
Association and the States (including State insurance
regulators), through which members of the Association may
disclose their intent to operate in 1 or more States and pay
the licensing fees to the appropriate States; and
``(4) establish a database, or utilize the NAIC or another
appropriate entity, as determined by the Association, as a
database, for use by the Association and the States
(including State insurance regulators) for the collection of
regulatory information concerning the activities of insurance
producers.
``(k) Effective Date.--The provisions of this section shall
take effect on the later of--
``(1) the expiration of the 2-year period beginning on the
date of enactment of the National Association of Registered
Agents and Brokers Reform Act of 2015; and
``(2) the date of incorporation of the Association.
``SEC. 324. BOARD OF DIRECTORS.
``(a) Establishment.--There is established a board of
directors of the Association, which shall have authority to
govern and supervise all activities of the Association.
``(b) Powers.--The Board shall have such of the powers and
authority of the Association as may be specified in the
bylaws of the Association.
``(c) Composition.--
``(1) In general.--The Board shall consist of 13 members
who shall be appointed by the President, by and with the
advice and consent of the Senate, in accordance with the
procedures established under Senate Resolution 116 of the
112th Congress, of whom--
``(A) 8 shall be State insurance commissioners appointed in
the manner provided in paragraph (2), 1 of whom shall be
designated by the President to serve as the chairperson of
the Board until the Board elects one such State insurance
commissioner Board member to serve as the chairperson of the
Board;
``(B) 3 shall have demonstrated expertise and experience
with property and casualty insurance producer licensing; and
``(C) 2 shall have demonstrated expertise and experience
with life or health insurance producer licensing.
``(2) State insurance regulator representatives.--
``(A) Recommendations.--Before making any appointments
pursuant to paragraph (1)(A), the President shall request a
list of recommended candidates from the States through the
NAIC, which shall not be binding on the President. If the
NAIC fails to submit a list of recommendations not later than
15 business days after the date of the request, the President
may make the requisite appointments without considering the
views of the NAIC.
``(B) Political affiliation.--Not more than 4 Board members
appointed under paragraph (1)(A) shall belong to the same
political party.
``(C) Former state insurance commissioners.--
``(i) In general.--If, after offering each currently
serving State insurance commissioner an appointment to the
Board, fewer than 8 State insurance commissioners have
accepted appointment to the Board, the President may appoint
the remaining State insurance commissioner Board members, as
required under paragraph (1)(A), of the appropriate political
party as required under subparagraph (B), from among
individuals who are former State insurance commissioners.
``(ii) Limitation.--A former State insurance commissioner
appointed as described in clause (i) may not be employed by
or have any present direct or indirect financial interest in
any insurer, insurance producer, or other entity in the
insurance industry, other than direct or indirect ownership
of, or beneficial interest in, an insurance policy or annuity
contract written or sold by an insurer.
``(D) Service through term.--If a Board member appointed
under paragraph (1)(A) ceases to be a State insurance
commissioner during the term of the Board member, the Board
member shall cease to be a Board member.
``(3) Private sector representatives.--In making any
appointment pursuant to subparagraph (B) or (C) of paragraph
(1), the President may seek recommendations for candidates
from groups representing the category of individuals
described, which shall not be binding on the President.
``(4) State insurance commissioner defined.--For purposes
of this subsection, the term `State insurance commissioner'
means a person who serves in the position in State
government, or on the board, commission, or other body that
is the primary insurance regulatory authority for the State.
``(d) Terms.--
``(1) In general.--Except as provided under paragraph (2),
the term of service for each Board member shall be 2 years.
``(2) Exceptions.--
``(A) 1-year terms.--The term of service shall be 1 year,
as designated by the President at the time of the nomination
of the subject Board members for--
``(i) 4 of the State insurance commissioner Board members
initially appointed under paragraph (1)(A), of whom not more
than 2 shall belong to the same political party;
``(ii) 1 of the Board members initially appointed under
paragraph (1)(B); and
``(iii) 1 of the Board members initially appointed under
paragraph (1)(C).
``(B) Expiration of term.--A Board member may continue to
serve after the expiration of the term to which the Board
member was appointed for the earlier of 2 years or until a
successor is appointed.
``(C) Mid-term appointments.--A Board member appointed to
fill a vacancy occurring before the expiration of the term
for which the predecessor of the Board member was appointed
shall be appointed only for the remainder of that term.
``(3) Successive terms.--Board members may be reappointed
to successive terms.
``(e) Initial Appointments.--The appointment of initial
Board members shall be made
[[Page S116]]
no later than 90 days after the date of enactment of the
National Association of Registered Agents and Brokers Reform
Act of 2015.
``(f) Meetings.--
``(1) In general.--The Board shall meet--
``(A) at the call of the chairperson;
``(B) as requested in writing to the chairperson by not
fewer than 5 Board members; or
``(C) as otherwise provided by the bylaws of the
Association.
``(2) Quorum required.--A majority of all Board members
shall constitute a quorum.
``(3) Voting.--Decisions of the Board shall require the
approval of a majority of all Board members present at a
meeting, a quorum being present.
``(4) Initial meeting.--The Board shall hold its first
meeting not later than 45 days after the date on which all
initial Board members have been appointed.
``(g) Restriction on Confidential Information.--Board
members appointed pursuant to subparagraphs (B) and (C) of
subsection (c)(1) shall not have access to confidential
information received by the Association in connection with
complaints, investigations, or disciplinary proceedings
involving insurance producers.
``(h) Ethics and Conflicts of Interest.--The Board shall
issue and enforce an ethical conduct code to address
permissible and prohibited activities of Board members and
Association officers, employees, agents, or consultants. The
code shall, at a minimum, include provisions that prohibit
any Board member or Association officer, employee, agent or
consultant from--
``(1) engaging in unethical conduct in the course of
performing Association duties;
``(2) participating in the making or influencing the making
of any Association decision, the outcome of which the Board
member, officer, employee, agent, or consultant knows or had
reason to know would have a reasonably foreseeable material
financial effect, distinguishable from its effect on the
public generally, on the person or a member of the immediate
family of the person;
``(3) accepting any gift from any person or entity other
than the Association that is given because of the position
held by the person in the Association;
``(4) making political contributions to any person or
entity on behalf of the Association; and
``(5) lobbying or paying a person to lobby on behalf of the
Association.
``(i) Compensation.--
``(1) In general.--Except as provided in paragraph (2), no
Board member may receive any compensation from the
Association or any other person or entity on account of Board
membership.
``(2) Travel expenses and per diem.--Board members may be
reimbursed only by the Association for travel expenses,
including per diem in lieu of subsistence, at rates
consistent with rates authorized for employees of Federal
agencies under subchapter I of chapter 57 of title 5, United
States Code, while away from home or regular places of
business in performance of services for the Association.
``SEC. 325. BYLAWS, STANDARDS, AND DISCIPLINARY ACTIONS.
``(a) Adoption and Amendment of Bylaws and Standards.--
``(1) Procedures.--The Association shall adopt procedures
for the adoption of bylaws and standards that are similar to
procedures under subchapter II of chapter 5 of title 5,
United States Code (commonly known as the `Administrative
Procedure Act').
``(2) Copy required to be filed.--The Board shall submit to
the President, through the Department of the Treasury, and
the States (including State insurance regulators), and shall
publish on the website of the Association, all proposed
bylaws and standards of the Association, or any proposed
amendment to the bylaws or standards of the Association,
accompanied by a concise general statement of the basis and
purpose of such proposal.
``(3) Effective date.--Any proposed bylaw or standard of
the Association, and any proposed amendment to the bylaws or
standards of the Association, shall take effect, after notice
under paragraph (2) and opportunity for public comment, on
such date as the Association may designate, unless suspended
under section 329(c).
``(4) Rule of construction.--Nothing in this section shall
be construed to subject the Board or the Association to the
requirements of subchapter II of chapter 5 of title 5, United
States Code (commonly known as the `Administrative Procedure
Act').
``(b) Disciplinary Action by the Association.--
``(1) Specification of charges.--In any proceeding to
determine whether membership shall be denied, suspended,
revoked, or not renewed, or to determine whether a member of
the Association should be placed on probation (referred to in
this section as a `disciplinary action') or whether to assess
fines or monetary penalties, the Association shall bring
specific charges, notify the member of the charges, give the
member an opportunity to defend against the charges, and keep
a record.
``(2) Supporting statement.--A determination to take
disciplinary action shall be supported by a statement setting
forth--
``(A) any act or practice in which the member has been
found to have been engaged;
``(B) the specific provision of this subtitle or standard
of the Association that any such act or practice is deemed to
violate; and
``(C) the sanction imposed and the reason for the sanction.
``(3) Ineligibility of private sector representatives.--
Board members appointed pursuant to section 324(c)(3) may
not--
``(A) participate in any disciplinary action or be counted
toward establishing a quorum during a disciplinary action;
and
``(B) have access to confidential information concerning
any disciplinary action.
``SEC. 326. POWERS.
``In addition to all the powers conferred upon a nonprofit
corporation by the District of Columbia Nonprofit Corporation
Act, the Association shall have the power to--
``(1) establish and collect such membership fees as the
Association finds necessary to impose to cover the costs of
its operations;
``(2) adopt, amend, and repeal bylaws, procedures, or
standards governing the conduct of Association business and
performance of its duties;
``(3) establish procedures for providing notice and
opportunity for comment pursuant to section 325(a);
``(4) enter into and perform such agreements as necessary
to carry out the duties of the Association;
``(5) hire employees, professionals, or specialists, and
elect or appoint officers, and to fix their compensation,
define their duties and give them appropriate authority to
carry out the purposes of this subtitle, and determine their
qualification;
``(6) establish personnel policies of the Association and
programs relating to, among other things, conflicts of
interest, rates of compensation, where applicable, and
qualifications of personnel;
``(7) borrow money; and
``(8) secure funding for such amounts as the Association
determines to be necessary and appropriate to organize and
begin operations of the Association, which shall be treated
as loans to be repaid by the Association with interest at
market rate.
``SEC. 327. REPORT BY THE ASSOCIATION.
``(a) In General.--As soon as practicable after the close
of each fiscal year, the Association shall submit to the
President, through the Department of the Treasury, and the
States (including State insurance regulators), and shall
publish on the website of the Association, a written report
regarding the conduct of its business, and the exercise of
the other rights and powers granted by this subtitle, during
such fiscal year.
``(b) Financial Statements.--Each report submitted under
subsection (a) with respect to any fiscal year shall include
audited financial statements setting forth the financial
position of the Association at the end of such fiscal year
and the results of its operations (including the source and
application of its funds) for such fiscal year.
``SEC. 328. LIABILITY OF THE ASSOCIATION AND THE BOARD
MEMBERS, OFFICERS, AND EMPLOYEES OF THE
ASSOCIATION.
``(a) In General.--The Association shall not be deemed to
be an insurer or insurance producer within the meaning of any
State law, rule, regulation, or order regulating or taxing
insurers, insurance producers, or other entities engaged in
the business of insurance, including provisions imposing
premium taxes, regulating insurer solvency or financial
condition, establishing guaranty funds and levying
assessments, or requiring claims settlement practices.
``(b) Liability of Board Members, Officers, and
Employees.--No Board member, officer, or employee of the
Association shall be personally liable to any person for any
action taken or omitted in good faith in any matter within
the scope of their responsibilities in connection with the
Association.
``SEC. 329. PRESIDENTIAL OVERSIGHT.
``(a) Removal of Board.--If the President determines that
the Association is acting in a manner contrary to the
interests of the public or the purposes of this subtitle or
has failed to perform its duties under this subtitle, the
President may remove the entire existing Board for the
remainder of the term to which the Board members were
appointed and appoint, in accordance with section 324 and
with the advice and consent of the Senate, in accordance with
the procedures established under Senate Resolution 116 of the
112th Congress, new Board members to fill the vacancies on
the Board for the remainder of the terms.
``(b) Removal of Board Member.--The President may remove a
Board member only for neglect of duty or malfeasance in
office.
``(c) Suspension of Bylaws and Standards and Prohibition of
Actions.--Following notice to the Board, the President, or a
person designated by the President for such purpose, may
suspend the effectiveness of any bylaw or standard, or
prohibit any action, of the Association that the President or
the designee determines is contrary to the purposes of this
subtitle.
``SEC. 330. RELATIONSHIP TO STATE LAW.
``(a) Preemption of State Laws.--State laws, regulations,
provisions, or other actions purporting to regulate insurance
producers shall be preempted to the extent provided in
subsection (b).
``(b) Prohibited Actions.--
``(1) In general.--No State shall--
``(A) impede the activities of, take any action against, or
apply any provision of law or regulation arbitrarily or
discriminatorily to, any insurance producer because that
insurance producer or any affiliate plans to become, has
applied to become, or is a member of the Association;
[[Page S117]]
``(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.''.
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