[Congressional Record (Bound Edition), Volume 156 (2010), Part 2]
[House]
[Pages 2369-2374]
[From the U.S. Government Publishing Office, www.gpo.gov]




  NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS REFORM ACT OF 
                                  2010

  Mr. SCOTT of Georgia. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 2554) to reform the National Association of 
Registered Agents and Brokers, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2554

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``National Association of 
     Registered Agents and Brokers Reform Act of 2010''.

     SEC. 2. 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

[[Page 2370]]

     Agents and Brokers (hereafter in this subtitle referred to as 
     the `Association').
       ``(b) Status.--The Association shall--
       ``(1) be a nonprofit corporation;
       ``(2) have succession until dissolved by an Act of 
     Congress;
       ``(3) not be an agent or instrumentality of the United 
     States Government; 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.).

     ``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 can be adopted and applied on a 
     multi-state basis (without affecting the laws, rules, and 
     regulations pertaining to resident insurance producers or 
     appointments or producing a net loss of producer licensing 
     revenues to States), while preserving the right of States to 
     license, supervise, discipline, and establish licensing fees 
     for insurance producers, and to prescribe and enforce laws 
     and regulations with regard to insurance-related consumer 
     protection and unfair trade practices.

     ``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 such producer's 
     license in that State during the 3-year period preceding the 
     date on which such producer applies for membership.
       ``(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 such producer in the State in which the license 
     was suspended or revoked; or
       ``(B) the suspension or revocation is subsequently 
     overturned.
       ``(4) Criminal background record check required.--
       ``(A) In general.--An insurance producer shall not be 
     eligible to become a member of the Association unless the 
     producer has undergone a national criminal background record 
     check that complies with regulations prescribed by the 
     Attorney General under subparagraph (L).
       ``(B) Criminal background record check requested by home 
     state.--An insurance producer who is licensed in a State and 
     who has undergone a national criminal background record check 
     in compliance with such requirements as a condition for such 
     licensure shall be deemed to have undergone a national 
     criminal background record check for purposes of subparagraph 
     (A).
       ``(C) Criminal background 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 such producer, and a 
     request for a national criminal background record check of 
     such producer, to the Federal Bureau of Investigation.
       ``(ii) Bylaws or rules.--The board of directors of the 
     Association shall prescribe bylaws or rules for obtaining and 
     utilizing identification information and criminal history 
     record information, including the establishment of reasonable 
     fees required to perform a criminal background 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 
     required by the Attorney General concerning the person about 
     whom the record is requested and a statement signed by the 
     person authorizing the Association to obtain the information.
       ``(E) Provision of information by attorney general.--Upon 
     receiving a submission under subparagraph (C)(ii) from the 
     Association, the Attorney General shall search all records of 
     the Criminal Justice Information Services Division of the 
     Federal Bureau of Investigation that the Attorney General 
     deems appropriate for criminal history records corresponding 
     to the identification information provided under subparagraph 
     (D) and provide all information contained in such records 
     that pertains to the request to the Association.
       ``(F) Limitation on permissible uses of information.--The 
     Association may use information provided under subparagraph 
     (E) only--
       ``(i) for purposes of determining compliance with 
     membership criteria established by the Association;
       ``(ii) to disclose to State insurance regulators, or 
     Federal or State law enforcement agencies, in conformance 
     with applicable law.
       ``(G) Applicant access to criminal history records.--
     Notwithstanding subparagraph (F), a producer shall have the 
     right to obtain from the Association a copy of any criminal 
     history record information concerning the producer that is 
     provided to the Association under subparagraph (E).
       ``(H) 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.
       ``(I) Reliance on information.--Neither the Association nor 
     any of its directors, 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.
       ``(J) Fees.--The Attorney General may charge a reasonable 
     fee to defray the expense of conducting the search and 
     providing the information under subparagraph (E), and any 
     such fee shall be collected and remitted by the Association.
       ``(K) Rule of construction.--Nothing in this paragraph 
     shall be construed as--
       ``(i) requiring a State insurance regulator to perform 
     criminal background checks under this section; or
       ``(ii) limiting any other authority that allows access to 
     criminal background records.
       ``(L) 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 a 
     producer to contest the accuracy of information regarding the 
     producer provided under subparagraph (E).
       ``(M) 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 
     information provided under subparagraph (E).
       ``(ii) Rights of applicants denied membership.--The 
     Association shall notify any producer who is denied 
     membership on the basis of criminal history record 
     information provided under subparagraph (E) of the right of 
     the producer to--

       ``(I) obtain a copy of all criminal history record 
     information provided to the Association under subparagraph 
     (E) with respect to the producer; and
       ``(II) challenge the accuracy and completeness of the 
     information.

       ``(b) Authority To Establish Membership Criteria.--The 
     Association may establish membership criteria that--
       ``(1) bear a reasonable relationship to the purposes for 
     which the Association was established; and
       ``(2) do not unfairly limit the access of smaller agencies 
     to the Association membership, including imposing 
     discriminatory membership fees on smaller insurance 
     producers.
       ``(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) Categories.--
       ``(A) Separate categories for producers permitted.--The 
     Association may establish separate categories of membership 
     for producers and for other persons 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 which 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.
       ``(2) Qualifications.--In establishing criteria under 
     paragraph (1), the Association shall consider the NAIC 
     Producer Licensing Model Act and 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 a 
     prospective member's eligibility for membership in the 
     Association.
       ``(B) 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 2371]]

       ``(A) authorize an insurance producer to sell, solicit, 
     negotiate, effect, procure, deliver, renew, continue, or bind 
     insurance in any State for which the member pays the 
     licensing fee set by such State for any line or lines of 
     insurance specified in such producer's home State license, 
     and exercise all such incidental powers, as shall be 
     necessary to carry out such activities, including claims 
     adjustments and settlement, risk management, employee 
     benefits advice, retirement planning, and any other 
     insurance-related consulting activities;
       ``(B) be the equivalent of a nonresident insurance producer 
     license issued in any State where the member pays the 
     licensing fee; and
       ``(C) subject an insurance producer to all laws, 
     regulations, provisions or other action of any State 
     concerning revocation or suspension of a member's ability 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) Duplicative licenses.--No State, other than the 
     member's home State, may require an individual member to 
     obtain a business entity license or membership in order to 
     engage in any activity within the scope of authority granted 
     in paragraph (1) or in order for the member or any employer, 
     employee, or affiliate of the member to receive compensation 
     for the member's performance of any such activity.
       ``(3) Agent for remitting fees.--The Association shall act 
     as any member's agent for purposes of remitting licensing 
     fees to any State pursuant to paragraph (1).
       ``(4) Regulator notification.--The Association shall notify 
     the National Association of Insurance Commissioners 
     (hereinafter in this subtitle referred to as the `NAIC') or 
     its designee when a producer becomes a member and identify, 
     on an ongoing basis, the States in which the member is 
     authorized to operate.
       ``(5) Preservation of state consumer protection and market 
     conduct regulation.--No provision of this section shall be 
     construed as altering or affecting the continuing 
     effectiveness of any law, regulation, provision, or other 
     action of any State which purports to regulate market conduct 
     or unfair trade practices or establish consumer protections 
     to the extent that such law, regulation, provision, or other 
     action is not inconsistent with the provisions of this 
     subtitle, and then only to the extent of such inconsistency.
       ``(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 such member's home State.
       ``(3) Reciprocity.--The Association shall not require a 
     member to satisfy continuing education requirements that are 
     equivalent to any continuing education requirements of the 
     member's home State that have been satisfied by the member 
     during the applicable licensing period.
       ``(4) Limitation on 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 such producer's membership in 
     the Association, as the Association determines to be 
     appropriate, if--
       ``(A) the producer fails to meet the applicable membership 
     criteria of the Association; or
       ``(B) the producer has been subject to disciplinary action 
     pursuant to a final adjudicatory proceeding under the 
     jurisdiction of a State insurance regulator.
       ``(2) Reporting to state regulators.--The Association shall 
     notify the NAIC or its designee when a producer's membership 
     has been suspended, revoked, and otherwise terminated.
       ``(i) Consumer Complaints.--
       ``(1) In general.--The Association shall--
       ``(A) receive and, when appropriate, investigate complaints 
     from both consumers and State insurance regulators related to 
     members of the Association;
       ``(B) refer any proper complaint received in accordance 
     with subparagraph (A) and make any related records and 
     information available to the NAIC or its designee and to each 
     State insurance regulator for the State of residence of the 
     consumer who filed the complaint; and
       ``(C) refer, when appropriate, any such complaint to any 
     additional appropriate State insurance regulator.
       ``(2) Telephone and other access.--The Association shall 
     maintain a toll-free telephone number for the purpose of this 
     subsection and, as practicable, other alternative means of 
     communication with consumers, such as an Internet web page.

     ``SEC. 324. BOARD OF DIRECTORS.

       ``(a) Establishment.--There is established the board of 
     directors of the Association (hereafter in this subtitle 
     referred to as the `Board'), which shall have authority to 
     govern and supervise all activities of the Association.
       ``(b) Powers.--The Board shall have such of the 
     Association's powers and authority as may be specified in the 
     bylaws of the Association.
       ``(c) Composition.--
       ``(1) In general.--The Board shall consist of 11 members 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate, of whom--
       ``(A) 6 shall be State insurance commissioners appointed in 
     the manner provided in paragraph (2),
       ``(B) 2 shall be representatives of property and casualty 
     insurance producers,
       ``(C) 1 shall be a representative of life or health 
     insurance producers,
       ``(D) 1 shall be a representative of property and casualty 
     insurers, and
       ``(E) 1 shall be a representative of life or health 
     insurers.
       ``(2) State insurance regulator representatives.--
       ``(A) Before making any appointments pursuant to 
     subparagraph (A) of paragraph (1), the President shall 
     request a list of recommended candidates from the NAIC, which 
     shall not be binding on the President. If the NAIC fails to 
     submit list of recommendations within 15 days of the request, 
     the President may make the requisite appointments without 
     considering the views of the NAIC.
       ``(B) Not more than 3 members appointed to membership on 
     the Board pursuant to subparagraph (A) of paragraph (1) shall 
     belong to the same political party.
       ``(C) If fewer than 6 State insurance commissioners accept 
     appointment to the Board, the President may appoint the 
     remaining State insurance commissioner members of the Board 
     from among individuals who are former State insurance 
     commissioners, provided that any former insurance 
     commissioner so appointed shall not be employed by or have a 
     present direct or indirect financial interest in any insurer 
     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.
       ``(3) Private sector representatives.--In making any 
     appointments pursuant to subparagraphs (B) through (E) of 
     paragraph (1), the President may seek recommendations for 
     candidates from national trade associations 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 principal insurance regulatory authority for the 
     State.
       ``(d) Terms.--
       ``(1) In general.--The term of each Board member shall be 
     for 2 years, except that--
       ``(A) the term of--
       ``(i) 3 of the State insurance commissioner members of the 
     Board initially appointed under subparagraph (A) of paragraph 
     (1),
       ``(ii) 1 of the property and casualty insurance producer 
     members of the Board initially appointed under subparagraph 
     (B) of paragraph (1), and
       ``(iii) 1 of the insurer representative members of the 
     Board initially appointed under subparagraphs (D) and (E) of 
     paragraph (1),

     shall be 1 year, as designated by the President at the time 
     of the nomination of such members;
       ``(B) a member of the Board may continue to serve after the 
     expiration of the term to which such member was appointed 
     until a successor is qualified; and
       ``(C) any member of the Board appointed to fill a vacancy 
     occurring before the expiration of the term for which the 
     member's predecessor was appointed shall be appointed only 
     for the remainder of that term.
       ``(2) Successive terms.--Board members may be reappointed 
     to successive terms.
       ``(e) Meetings.--
       ``(1) In general.--The Board shall meet at the call of the 
     chairperson, as requested in writing to the chairperson by at 
     least four members of the Board, or as otherwise provided by 
     the bylaws of the Association.
       ``(2) Quorum required.--A majority of directors shall 
     constitute a quorum.
       ``(3) Voting.--Decisions of the Board shall require the 
     approval of a majority of all directors present at a meeting, 
     a quorum being present.

     ``SEC. 325. OFFICERS.

       ``(a) Positions.--The officers of the Association shall 
     consist of a chairperson and a vice chairperson of the Board, 
     an executive director, secretary, and treasurer of the 
     Association, and such other officers and assistant officers 
     as may be deemed necessary.
       ``(b) Manner of Selection.--Each officer of the Board and 
     the Association shall be elected or appointed at such time, 
     in such manner, and for such terms as may be prescribed in 
     the bylaws of the Association.

[[Page 2372]]



     ``SEC. 326. BYLAWS, RULES, AND DISCIPLINARY ACTION.

       ``(a) Adoption and Amendment of Bylaws.--
       ``(1) Copy required to be filed.--The board of directors of 
     the Association shall submit to the President and the NAIC 
     any proposed bylaw or rules of the Association or any 
     proposed amendment to the bylaws or rules, accompanied by a 
     concise general statement of the basis and purpose of such 
     proposal.
       ``(2) Effective date.--Any proposed bylaw or rule or 
     proposed amendment to the bylaws or rules shall take effect, 
     after notice published in the Federal Register and 
     opportunity for comment, upon such date as the Association 
     may designate, unless suspended under subsection (c) of 
     section 330.
       ``(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 (hereafter in this section referred 
     to as a `disciplinary action') or to determine whether a 
     member of the Association should be placed on probation, the 
     Association shall bring specific charges, notify such member 
     of such 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 such member has been 
     found to have been engaged;
       ``(B) the specific provision of this subtitle, the rules or 
     regulations under this subtitle, or the rules of the 
     Association which any such act or practice is deemed to 
     violate; and
       ``(C) the sanction imposed and the reason for such 
     sanction.

     ``SEC. 327. 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 following powers:
       ``(1) To establish and collect such membership fees as the 
     Association finds necessary to impose to cover the costs of 
     its operations.
       ``(2) To adopt, amend, and repeal bylaws and rules 
     governing the conduct of Association business and performance 
     of its duties.
       ``(3) To establish procedures for providing notice and 
     opportunity for comment pursuant to section 326(a).
       ``(4) To enter into and perform such agreements as 
     necessary to carry out its duties.
       ``(5) To 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; and to establish the Association's personnel 
     policies and programs relating to, among other things, 
     conflicts of interest, rates of compensation. and 
     qualifications of personnel.
       ``(6) To borrow money.
       ``(7) To secure funding from board member organizations and 
     other industry associations for such amounts that 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. 328. REPORT BY ASSOCIATION.

       ``(a) In General.--As soon as practicable after the close 
     of each fiscal year, the Association shall submit to the 
     President and the NAIC 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 
     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. 329. LIABILITY OF THE ASSOCIATION AND THE DIRECTORS, 
                   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 Directors, Officers, and Employees.--No 
     director, 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. 330. 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 members of the Board were 
     appointed and appoint, in accordance with section 324 and 
     with the advice and consent of the Senate, new members to 
     fill the vacancies on the Board for the remainder of such 
     terms.
       ``(b) Removal of Board Member.--The President may remove a 
     member of the Board only for neglect of duty or malfeasance 
     in office.
       ``(c) Suspension of Rules or Actions.--The President, or a 
     person designated by the President for such purpose, may 
     suspend the effectiveness of any rule, or prohibit any 
     action, of the Association which the President or the 
     designee determines is contrary to the purposes of this 
     subtitle.

     ``SEC. 331. 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;
       ``(C) impose any continuing education requirements on 
     nonresident insurance producers; or
       ``(D) impose any licensing, registration, or appointment 
     requirements upon any nonresident insurance producer that 
     sells, solicits, negotiates, effects, procures, delivers, 
     renews, continues, or binds insurance for commercial property 
     and casualty risks to an insured with risks located in more 
     than 1 State, if such nonresident insurance producer is 
     otherwise licensed as an insurance producer in the State 
     where the insured maintains its principal place of business 
     and the contract of insurance insures risks located in that 
     State.
       ``(2) States other than a home state.--No State, other than 
     a member's home State, shall--
       ``(A) impose any licensing, integrity, 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 such 
     State, including any requirement that such insurance producer 
     register as a foreign company with the secretary of state or 
     equivalent State official; or
       ``(C) require that a member of the Association submit to a 
     criminal history record check as a condition of doing 
     business in such State.

     ``SEC. 332. COORDINATION WITH OTHER REGULATORS.

       ``(a) Coordination With State Insurance Regulators.--The 
     Association may--
       ``(1) establish a central clearinghouse, or utilize the 
     NAIC or any other appropriate entity as a central 
     clearinghouse, through which members of the Association may 
     pursuant to section 323(e) disclose their intent to operate 
     in 1 or more States and pay the licensing fees to the 
     appropriate States; and
       ``(2) establish a national database for the collection of 
     regulatory information concerning the activities of insurance 
     producers or contract with the NAIC or any other entity to 
     utilize such a database.
       ``(b) Coordination With the Financial Industry Regulatory 
     Authority.--The Association shall coordinate with the 
     Financial Industry Regulatory Authority in order to ease any 
     administrative burdens that fall on persons that are members 
     of both associations, consistent with the requirements of 
     this subtitle and the Federal securities laws.

     ``SEC. 333. 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 such action, the 
     court shall give appropriate weight to the Association's 
     interpretation of its bylaws and this subtitle.

     ``SEC. 334. DEFINITIONS.

       ``For purposes of this subtitle, the following definitions 
     shall apply:
       ``(1) 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.
       ``(2) Insurance.--The term `insurance' means any product, 
     other than title insurance, defined or regulated as insurance 
     by the appropriate State insurance regulatory authority.
       ``(3) Insurance producer.--The term `insurance producer' 
     means any insurance agent or broker, excess or surplus lines

[[Page 2373]]

     broker or agent, insurance consultant, limited insurance 
     representative, and any other individual or entity that 
     solicits, negotiates, effects, procures, delivers, renews, 
     continues or binds policies of insurance or offers advice, 
     counsel, opinions or services related to insurance.
       ``(4) 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.
       ``(5) 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) Clerical 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. Officers.
``Sec. 326. Bylaws, rules, and disciplinary action.
``Sec. 327. Powers.
``Sec. 328. Report by association.
``Sec. 329. Liability of the association and the directors, officers, 
              and employees of the association.
``Sec. 330. Presidential oversight.
``Sec. 331. Relationship to State law.
``Sec. 332. Coordination with other regulators.
``Sec. 333. Judicial review and enforcement.
``Sec. 334. Definitions.''.

     SEC. 3. COMPLIANCE PROVISION.

       The budgetary effects of this Act, for the purpose of 
     complying with the Statutory Pay-As-You-Go-Act of 2010, shall 
     be determined by reference to the latest statement titled 
     ``Budgetary Effects of PAYGO Legislation'' for this Act, 
     submitted for printing in the Congressional Record by the 
     Chairman of the Committee on the Budget of the House of 
     Representatives, provided that such statement has been 
     submitted prior to the vote on passage.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Georgia (Mr. Scott) and the gentleman from Texas (Mr. Neugebauer) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Georgia.


                             General Leave

  Mr. SCOTT of Georgia. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks on this legislation and to insert extraneous material 
thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Georgia?
  There was no objection.
  Mr. SCOTT of Georgia. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I am pleased to join with my fellow colleagues in 
bringing this important legislation to the floor for a vote today. This 
legislation is timely since the issue of insurance regulatory reform 
has remained crucial for some time now.
  I am pleased to introduce H.R. 2554, the National Association of 
Registered Agents and Brokers Reform Act, with Congressman Neugebauer 
to help guarantee adequate agent broker licensing as well as ensure 
increased competition. That is the important word in this, Mr. Speaker, 
``increased competition.''
  Insurance regulatory reform is an issue many involved agree requires 
action, and this bill is a good starting point for leveling the playing 
field for insurance agents and brokers. H.R. 2554 would simply 
establish the National Association of Registered Agents and Brokers to 
provide for nonresident insurance agent and broker licensing while 
preserving the rights of States to supervise and discipline insurance 
agents and brokers.
  This legislation will benefit consumers through increased competition 
among agents and brokers, leading to greater consumer choice. This 
legislation is straightforward. Insurance agents and brokers who are 
licensed in good standing in their home States can apply for membership 
to the National Association of Registered Agents and Brokers, which we 
call NARAB. This will allow them to operate in multiple States. 
Membership will be voluntary and will not affect the rights of a 
nonmember producer under any State license.
  This legislation will benefit policyholders by increasing marketplace 
competition and consumer choice by enabling insurance producers to more 
quickly and responsibly serve the needs of consumers. A private 
nonprofit NARAB entity consisting of State insurance regulators and 
marketplace representatives will serve as a portal for agents and 
brokers to obtain nonresident licenses in additional States. This is 
provided that they pay the required State nonresident licensing fees 
and that they meet the NARAB standard for membership.
  This bill also would establish membership criteria which would 
include standards for personal qualifications, education, training, and 
experience. And further, member applicants would be required to undergo 
a national criminal background check.
  This very important bill clarifies current State consumer protection, 
and market conduct regulation would be preserved. NARAB board members 
would include a narrow majority of State insurance regulators. All 
bylaws and reports of the association will be filed with the National 
Association of Insurance Commissioners. This legislation directs the 
NARAB board to consider utilizing the NAIC as the entity that the 
association will collaborate with on a central clearinghouse and a 
national database for regulatory information. NARAB would not be a part 
of nor would be required to report to any Federal agency, nor would it 
have any Federal regulatory power.
  Congress endorsed this concept through its passage of the Gramm-
Leach-Bliley Act in 1999, which would have created NARAB if a number of 
States did not reach a certain level of licensing reciprocity. At that 
time, enough reciprocity was provided to avoid the creation of NARAB, 
but it has become clear that follow-up legislation is necessary.
  So my bill addresses market entry procedures only, and it would not 
impact the daily regulation of insurance. Insurance agents would still 
be subject to the consumer protection laws of each of the States. This 
legislation passed in the 110th Congress by a voice vote, but this 
version has some important improvements. Among these improvements, 
sections have been added to ensure that State regulators are notified 
when a producer becomes a NARAB member, becomes authorized to operate 
in new States, or a membership is suspended or revoked. Also, this 
version makes revisions concerning NARAB's board of directors to 
clarify certain provisions, namely, that the President would formally 
make the appointments, and references to private-sector trade 
associations are eliminated.
  Again, I want to thank my Republican colleague, Congressman 
Neugebauer, for his work on this legislation. He has done an excellent 
job, and I have enjoyed working with him. I urge its passage in the 
House once again.

                                    Congress of the United States,


                                   Committee on the Judiciary,

                                    Washington, DC, March 2, 2010.
     Hon. Barney Frank,
     Chairman, Committee on Financial Services, House of 
         Representatives,
     Washington, DC.
       Dear Chairman Frank: This is to advise you that, as a 
     result of your having consulted with us on provisions in H.R. 
     2554, the National Association of Registered Agents and 
     Brokers Reform Act of 2009, that fall within the rule X 
     jurisdiction of the Committee on the Judiciary, we are able 
     to agree to discharging our committee from further 
     consideration of the bill in order that it may proceed 
     without delay to the House floor for consideration.
       The Judiciary Committee takes this action with our mutual 
     understanding that by foregoing consideration of H.R. 2554 at 
     this time, we do not waive any jurisdiction over subject 
     matter contained in this or similar legislation, and that our 
     Committee will be appropriately consulted and involved as the 
     bill or similar legislation moves forward, so that we may 
     address any remaining issues in our jurisdiction. Our 
     Committee also reserves the right to seek appointment of an 
     appropriate number of conferees to any House-Senate 
     conference involving this or similar legislation, and 
     requests your support for any such request.

[[Page 2374]]

       I would appreciate your including this letter in the 
     Congressional Record during consideration of the bill on the 
     House floor. Thank you for your attention to this request, 
     and for the cooperative relationship between our two 
     committees.
           Sincerely,
                                                John Conyers, Jr.,
     Chairman.
                                  ____



                              Committee on Financial Services,

                                    Washington, DC, March 2, 2010.
     Hon. John Conyers,
     Chairman, Committee on the Judiciary,
     House of Representatives, Washington, DC.
       Dear Chairman Conyers: Thank you for your letter concerning 
     H.R. 2554, the ``National Association of Registered Agents 
     and Brokers Reform Act of 2009.'' This bill will be 
     considered by the House shortly.
       I want to confirm our mutual understanding with respect to 
     the consideration of this bill. I acknowledge that portions 
     of the bill fall within the jurisdiction of the Committee on 
     the Judiciary and I appreciate your cooperation in moving the 
     bill to the House floor expeditiously. I further agree that 
     your decision to not to proceed with a markup on this bill 
     will not prejudice the Committee on the Judiciary with 
     respect to its prerogatives on this or similar legislation. I 
     would support your request for an appropriate number of 
     conferees in the event of a House-Senate conference.
       I will include a copy of this letter and your response in 
     the Congressional Record. Thank you again for your 
     cooperation.
                                                     Barney Frank,
                                                         Chairman.

  Mr. Speaker, I reserve the balance of my time.
  Mr. NEUGEBAUER. Mr. Speaker, I rise today in support of H.R. 2554, 
and I also want to thank my colleague from Georgia (Mr. Scott) for his 
leadership on this legislation.
  We introduced this legislation almost 1 year ago with strong 
bipartisan support. Mr. Scott has worked with the House leadership to 
help get this bill to the floor today, and I certainly appreciate his 
efforts.
  This bill sets up a private nonprofit insurance system that will help 
insurance agents and brokers do business across State lines more 
efficiently. Not only does this help reduce regulatory burden for 
agents, but it also helps consumers by giving them more choices.
  At its core, this is really a small business bill. Most insurance 
agents and brokers are independent small businesses; they don't have a 
lot of employees. So when they have to file paperwork for multiple 
States in order to do business across State lines, that only adds more 
cost for their compliance. Under this bill, they can register with the 
new National Association of Registered Agents and Brokers, NARAB, and 
that will serve as a portal for them to be licensed more easily in 
other States.
  In today's economy, this bill makes sense for small businesses. If a 
customer moves to another State but wants to keep his insurance agent 
that has worked for him for years, this bill will streamline the 
process for that agent to be licensed in other States. If a customer 
wants that agent's trust to help them with policies for an elderly 
parent that they are caring for who lives in another State, this bill 
also makes that feasible.
  H.R. 2554 provides a way to streamline insurance agent licensing 
across State lines without creating a new government bureaucracy, with 
no cost to the taxpayers, with consistent consumer protections, and 
without new mandates on States. This bill empowers insurance agents and 
their customers without making the government bigger or more expensive.
  The option for NARAB was first included in the 1999 Gramm-Leach-
Bliley Act, but the bar was not set high enough. Congress realized that 
in 2008 when the House passed this legislation by voice vote. While the 
Senate did not take up the bill last time, my hope is that broad 
bipartisan support in the House again will move this much-needed bill 
forward.
  We've had a lot of debate and discussion in the Financial Services 
Committee about the big picture for insurance regulation. There are a 
lot of perspectives on that issue. The good news about this bill, 
however, is that this is one insurance reform that we can all agree on.
  I urge my colleagues to support this bill. It's good for small 
businesses, it's good for our community agents, and it's good for the 
customers that they serve.
  I also again want to thank Mr. Scott for his cooperation and this 
bipartisan bill, and I urge my colleagues to support H.R. 2554.
  I yield back the balance of my time.
  Mr. SCOTT of Georgia. In closing, Mr. Speaker, let me again thank my 
colleague, Congressman Neugebauer, for his distinguished work on this. 
It has been a pleasure.
  Again, as he articulated eloquently a few minutes ago, the two things 
that this bill really does is it helps American consumers by increasing 
competition in the marketplace--that is really what we need as we deal 
with the very topical issue of insurance. And it provides the American 
people, the American consumer, with choice. So competition and choice 
are certainly the great beneficiaries of this legislation.
  I might add that our act has garnered support from both sides of the 
aisle. We have both Democrats and Republicans working together on this. 
Forty-eight of us are sponsors to this bill, and 27 of us belong to the 
Financial Services Committee, where we have done work on it.

                              {time}  1745

  This bill has the support of NAIC, as I said earlier. It shows that 
the State insurance regulators, themselves, believe that this type of 
legislation has needed reform. In addition, the Independent Insurance 
Agents and Brokers of America supports this bill. The National 
Association of Insurance and Financial Advisors supports the bill. The 
National Association of Mutual Insurance Companies, the Property 
Casualty Insurance Association of America, the Council of Insurance 
Agents and Brokers, as well as a number of individual insurance 
companies, all are in support of this bill.
  I am proud to have had an opportunity to work with and to have 
brought this bill before the House. I ask, certainly, for favorable 
support.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Georgia (Mr. Scott) that the House suspend the rules and 
pass the bill, H.R. 2554, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________