[House Report 113-654]
[From the U.S. Government Publishing Office]
113th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 113-654
======================================================================
PROVIDING FOR CONSIDERATION OF THE BILL (S. 2244) TO EXTEND THE
TERMINATION DATE OF THE TERRORISM INSURANCE PROGRAM ESTABLISHED UNDER
THE TERRORISM RISK INSURANCE ACT OF 2002, AND FOR OTHER PURPOSES;
PROVIDING FOR CONSIDERATION OF MOTIONS TO SUSPEND THE RULES; AND
PROVIDING FOR PROCEEDINGS DURING THE PERIOD FROM DECEMBER 12, 2014,
THROUGH JANUARY 3, 2015
_______
December 9, 2014.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Sessions, from the Committee on Rules,
submitted the following
R E P O R T
[To accompany H. Res. 775]
The Committee on Rules, having had under consideration
House Resolution 775, by a nonrecord vote, report the same to
the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for consideration of S. 2244, the
Terrorism Risk Insurance Program Reauthorization Act of 2014,
under a closed rule. The resolution provides one hour of debate
equally divided and controlled by the chair and ranking
minority member of the Committee on Financial Services. The
resolution waives all points of order against consideration of
the bill. The resolution provides that the amendment in the
nature of a substitute printed in this report shall be
considered as adopted and the bill, as amended, shall be
considered as read. The resolution waives all points of order
against provisions in the bill, as amended. The resolution
provides one motion to commit with or without instructions.
Section 2 of the resolution provides that it shall be in
order at any time on the legislative day of December 11, 2014,
for the Speaker to entertain motions that the House suspend the
rules as though under clause 1 of rule XV and that the Speaker
or his designee shall consult with the Minority Leader or her
designee on the designation of any matter for consideration
pursuant to this section.
Section 3 of the resolution provides that on any
legislative day of the second session of the One Hundred
Thirteenth Congress after December 11, 2014: the Journal of the
proceedings of the previous day shall be considered as
approved; and the Chair may at any time declare the House
adjourned to meet at a date and time, within the limits of
clause 4, section 5, article I of the Constitution, to be
announced by the Chair in declaring the adjournment.
Section 4 of the resolution provides that the Speaker may
appoint Members to perform the duties of the Chair for the
duration of the period addressed by section 3 of the resolution
as though under clause 8(a) of rule I.
Section 5 provides that each day during the period
addressed by section 3 shall not constitute a calendar day for
purposes of section 7 of the War Powers Resolution (50 U.S.C.
1546).
Section 6 of the resolution provides that each day during
the period addressed by section 3 of the resolution shall not
constitute a legislative day for purposes of clause 7 of rule
XIII (resolutions of inquiry).
EXPLANATION OF WAIVERS
The waiver of all points of order against consideration of
the bill includes a waiver of the following:
Section 302(f) of the Congressional Budget Act, which
prohibits consideration of amendments providing new budget
authority in excess of a 302(a) allocation of such authority.
Clause 10 of rule XXI, prohibiting the consideration of a
bill if it has the net effect of increasing mandatory spending
over the five-year or ten-year period. However, it is important
to note the bill reduces the deficit by $147 million over 5
years and $457 million over 10 years.
Although the resolution waives all points of order against
provisions in the bill, as amended, the Committee is not aware
of any points of order. The waiver is prophylactic in nature.
SUMMARY OF THE AMENDMENT CONSIDERED AS ADOPTED
1. Neugebauer (TX): Substitute Amendment
TEXT OF AMENDMENT CONSIDERED AS ADOPTED
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 2014''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
Sec. 1. Short title and table of contents.
TITLE I--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.
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 III--BUSINESS RISK MITIGATION AND PRICE STABILIZATION
Sec. 301. Short title.
Sec. 302. Margin requirements.
Sec. 303. Implementation.
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 that follows the date of
enactment of the Terrorism Risk
Insurance Program Reauthorization Act
of 2014, 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
2014, 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.
(a) In General.--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''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2015.
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 2014,
the entity is acting as an attorney-in-fact, as
defined by the Secretary, for the other entity
and such other entity is a reciprocal insurer,
provided that the entity is not, for reasons
other than the attorney-in-fact relationship,
defined as having `control' under subparagraph
(A).'';
(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 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 2014 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.
(c) Effective Date.--The provisions of this section shall
take effect on January 1, 2015.
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 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 2014''.
SEC. 202. REESTABLISHMENT OF THE NATIONAL ASSOCIATION OF REGISTERED
AGENTS AND BROKERS.
(a) In General.--Subtitle C of title III of the Gramm-Leach-
Bliley Act (15 U.S.C. 6751 et seq.) is amended to read as
follows:
``Subtitle C--National Association of Registered Agents and Brokers
``SEC. 321. NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS.
``(a) Establishment.--There is established the National
Association of Registered Agents and Brokers (referred to in
this subtitle as the `Association').
``(b) Status.--The Association shall--
``(1) be a nonprofit corporation;
``(2) not be an agent or instrumentality of the
Federal Government;
``(3) be an independent organization that may not be
merged with or into any other private or public entity;
and
``(4) except as otherwise provided in this subtitle,
be subject to, and have all the powers conferred upon,
a nonprofit corporation by the District of Columbia
Nonprofit Corporation Act (D.C. Code, sec. 29-301.01 et
seq.) or any successor thereto.
``SEC. 322. PURPOSE.
``The purpose of the Association shall be to provide a
mechanism through which licensing, continuing education, and
other nonresident insurance producer qualification requirements
and conditions may be adopted and applied on a multi-state
basis without affecting the laws, rules, and regulations, and
preserving the rights of a State, pertaining to--
``(1) licensing, continuing education, and other
qualification requirements of insurance producers that
are not members of the Association;
``(2) resident or nonresident insurance producer
appointment requirements;
``(3) supervising and disciplining resident and
nonresident insurance producers;
``(4) establishing licensing fees for resident and
nonresident insurance producers so that there is no
loss of insurance producer licensing revenue to the
State; and
``(5) prescribing and enforcing laws and regulations
regulating the conduct of resident and nonresident
insurance producers.
``SEC. 323. MEMBERSHIP.
``(a) Eligibility.--
``(1) In general.--Any insurance producer licensed in
its home State shall, subject to paragraphs (2) and
(4), be eligible to become a member of the Association.
``(2) Ineligibility for suspension or revocation of
license.--Subject to paragraph (3), an insurance
producer is not eligible to become a member of the
Association if a State insurance regulator has
suspended or revoked the insurance license of the
insurance producer in that State.
``(3) Resumption of eligibility.--Paragraph (2) shall
cease to apply to any insurance producer if--
``(A) the State insurance regulator reissues
or renews the license of the insurance producer
in the State in which the license was suspended
or revoked, or otherwise terminates or vacates
the suspension or revocation; or
``(B) the suspension or revocation expires or
is subsequently overturned by a court of
competent jurisdiction.
``(4) Criminal history record check required.--
``(A) In general.--An insurance producer who
is an individual shall not be eligible to
become a member of the Association unless the
insurance producer has undergone a criminal
history record check that complies with
regulations prescribed by the Attorney General
of the United States under subparagraph (K).
``(B) Criminal history record check requested
by home state.--An insurance producer who is
licensed in a State and who has undergone a
criminal history record check during the 2-year
period preceding the date of submission of an
application to become a member of the
Association, in compliance with a requirement
to undergo such criminal history record check
as a condition for such licensure in the State,
shall be deemed to have undergone a criminal
history record check for purposes of
subparagraph (A).
``(C) Criminal history record check requested
by association.--
``(i) In general.--The Association
shall, upon request by an insurance
producer licensed in a State, submit
fingerprints or other identification
information obtained from the insurance
producer, and a request for a criminal
history record check of the insurance
producer, to the Federal Bureau of
Investigation.
``(ii) Procedures.--The board of
directors of the Association (referred
to in this subtitle as the `Board')
shall prescribe procedures for
obtaining and utilizing fingerprints or
other identification information and
criminal history record information,
including the establishment of
reasonable fees to defray the expenses
of the Association in connection with
the performance of a criminal history
record check and appropriate safeguards
for maintaining confidentiality and
security of the information. Any fees
charged pursuant to this clause shall
be separate and distinct from those
charged by the Attorney General
pursuant to subparagraph (I).
``(D) Form of request.--A submission under
subparagraph (C)(i) shall include such
fingerprints or other identification
information as is required by the Attorney
General concerning the person about whom the
criminal history record check is requested, and
a statement signed by the person authorizing
the Attorney General to provide the information
to the Association and for the Association to
receive the information.
``(E) Provision of information by attorney
general.--Upon receiving a submission under
subparagraph (C)(i) from the Association, the
Attorney General shall search all criminal
history records of the Federal Bureau of
Investigation, including records of the
Criminal Justice Information Services Division
of the Federal Bureau of Investigation, that
the Attorney General determines appropriate for
criminal history records corresponding to the
fingerprints or other identification
information provided under subparagraph (D) and
provide all criminal history record information
included in the request to the Association.
``(F) Limitation on permissible uses of
information.--Any information provided to the
Association under subparagraph (E) may only--
``(i) be used for purposes of
determining compliance with membership
criteria established by the
Association;
``(ii) be disclosed to State
insurance regulators, or Federal or
State law enforcement agencies, in
conformance with applicable law; or
``(iii) be disclosed, upon request,
to the insurance producer to whom the
criminal history record information
relates.
``(G) Penalty for improper use or
disclosure.--Whoever knowingly uses any
information provided under subparagraph (E) for
a purpose not authorized in subparagraph (F),
or discloses any such information to anyone not
authorized to receive it, shall be fined not
more than $50,000 per violation as determined
by a court of competent jurisdiction.
``(H) Reliance on information.--Neither the
Association nor any of its Board members,
officers, or employees shall be liable in any
action for using information provided under
subparagraph (E) as permitted under
subparagraph (F) in good faith and in
reasonable reliance on its accuracy.
``(I) Fees.--The Attorney General may charge
a reasonable fee for conducting the search and
providing the information under subparagraph
(E), and any such fee shall be collected and
remitted by the Association to the Attorney
General.
``(J) Rule of construction.--Nothing in this
paragraph shall be construed as--
``(i) requiring a State insurance
regulator to perform criminal history
record checks under this section; or
``(ii) limiting any other authority
that allows access to criminal history
records.
``(K) Regulations.--The Attorney General
shall prescribe regulations to carry out this
paragraph, which shall include--
``(i) appropriate protections for
ensuring the confidentiality of
information provided under subparagraph
(E); and
``(ii) procedures providing a
reasonable opportunity for an insurance
producer to contest the accuracy of
information regarding the insurance
producer provided under subparagraph
(E).
``(L) Ineligibility for membership.--
``(i) In general.--The Association
may, under reasonably consistently
applied standards, deny membership to
an insurance producer on the basis of
criminal history record information
provided under subparagraph (E), or
where the insurance producer has been
subject to disciplinary action, as
described in paragraph (2).
``(ii) Rights of applicants denied
membership.--The Association shall
notify any insurance producer who is
denied membership on the basis of
criminal history record information
provided under subparagraph (E) of the
right of the insurance producer to--
``(I) obtain a copy of all
criminal history record
information provided to the
Association under subparagraph
(E) with respect to the
insurance producer; and
``(II) challenge the denial
of membership based on the
accuracy and completeness of
the information.
``(M) Definition.--For purposes of this
paragraph, the term `criminal history record
check' means a national background check of
criminal history records of the Federal Bureau
of Investigation.
``(b) Authority to Establish Membership Criteria.--The
Association may establish membership criteria that bear a
reasonable relationship to the purposes for which the
Association was established.
``(c) Establishment of Classes and Categories of
Membership.--
``(1) Classes of membership.--The Association may
establish separate classes of membership, with separate
criteria, if the Association reasonably determines that
performance of different duties requires different
levels of education, training, experience, or other
qualifications.
``(2) Business entities.--The Association shall
establish a class of membership and membership criteria
for business entities. A business entity that applies
for membership shall be required to designate an
individual Association member responsible for the
compliance of the business entity with Association
standards and the insurance laws, standards, and
regulations of any State in which the business entity
seeks to do business on the basis of Association
membership.
``(3) Categories.--
``(A) Separate categories for insurance
producers permitted.--The Association may
establish separate categories of membership for
insurance producers and for other persons or
entities within each class, based on the types
of licensing categories that exist under State
laws.
``(B) Separate treatment for depository
institutions prohibited.--No special categories
of membership, and no distinct membership
criteria, shall be established for members that
are depository institutions or for employees,
agents, or affiliates of depository
institutions.
``(d) Membership Criteria.--
``(1) In general.--The Association may establish
criteria for membership which shall include standards
for personal qualifications, education, training, and
experience. The Association shall not establish
criteria that unfairly limit the ability of a small
insurance producer to become a member of the
Association, including imposing discriminatory
membership fees.
``(2) Qualifications.--In establishing criteria under
paragraph (1), the Association shall not adopt any
qualification less protective to the public than that
contained in the National Association of Insurance
Commissioners (referred to in this subtitle as the
`NAIC') Producer Licensing Model Act in effect as of
the date of enactment of the National Association of
Registered Agents and Brokers Reform Act of 2014, and
shall consider the highest levels of insurance producer
qualifications established under the licensing laws of
the States.
``(3) Assistance from states.--
``(A) In general.--The Association may
request a State to provide assistance in
investigating and evaluating the eligibility of
a prospective member for membership in the
Association.
``(B) Authorization of information sharing.--
A submission under subsection (a)(4)(C)(i) made
by an insurance producer licensed in a State
shall include a statement signed by the person
about whom the assistance is requested
authorizing--
``(i) the State to share information
with the Association; and
``(ii) the Association to receive the
information.
``(C) Rule of construction.--Subparagraph (A)
shall not be construed as requiring or
authorizing any State to adopt new or
additional requirements concerning the
licensing or evaluation of insurance producers.
``(4) Denial of membership.--The Association may,
based on reasonably consistently applied standards,
deny membership to any State-licensed insurance
producer for failure to meet the membership criteria
established by the Association.
``(e) Effect of Membership.--
``(1) Authority of association members.--Membership
in the Association shall--
``(A) authorize an insurance producer to
sell, solicit, or negotiate insurance in any
State for which the member pays the licensing
fee set by the State for any line or lines of
insurance specified in the home State license
of the insurance producer, and exercise all
such incidental powers as shall be necessary to
carry out such activities, including claims
adjustments and settlement to the extent
permissible under the laws of the State, risk
management, employee benefits advice,
retirement planning, and any other insurance-
related consulting activities;
``(B) be the equivalent of a nonresident
insurance producer license for purposes of
authorizing the insurance producer to engage in
the activities described in subparagraph (A) in
any State where the member pays the licensing
fee; and
``(C) be the equivalent of a nonresident
insurance producer license for the purpose of
subjecting an insurance producer to all laws,
regulations, provisions or other action of any
State concerning revocation, suspension, or
other enforcement action related to the ability
of a member to engage in any activity within
the scope of authority granted under this
subsection and to all State laws, regulations,
provisions, and actions preserved under
paragraph (5).
``(2) Violent crime control and law enforcement act
of 1994.--Nothing in this subtitle shall be construed
to alter, modify, or supercede any requirement
established by section 1033 of title 18, United States
Code.
``(3) Agent for remitting fees.--The Association
shall act as an agent for any member for purposes of
remitting licensing fees to any State pursuant to
paragraph (1).
``(4) Notification of action.--
``(A) In general.--The Association shall
notify the States (including State insurance
regulators) and the NAIC when an insurance
producer has satisfied the membership criteria
of this section. The States (including State
insurance regulators) shall have 10 business
days after the date of the notification in
order to provide the Association with evidence
that the insurance producer does not satisfy
the criteria for membership in the Association.
``(B) Ongoing disclosures required.--On an
ongoing basis, the Association shall disclose
to the States (including State insurance
regulators) and the NAIC a list of the States
in which each member is authorized to operate.
The Association shall immediately notify the
States (including State insurance regulators)
and the NAIC when a member is newly authorized
to operate in one or more States, or is no
longer authorized to operate in one or more
States on the basis of Association membership.
``(5) Preservation of consumer protection and market
conduct regulation.--
``(A) In general.--No provision of this
section shall be construed as altering or
affecting the applicability or continuing
effectiveness of any law, regulation,
provision, or other action of any State,
including those described in subparagraph (B),
to the extent that the State law, regulation,
provision, or other action is not inconsistent
with the provisions of this subtitle related to
market entry for nonresident insurance
producers, and then only to the extent of the
inconsistency.
``(B) Preserved regulations.--The laws,
regulations, provisions, or other actions of
any State referred to in subparagraph (A)
include laws, regulations, provisions, or other
actions that--
``(i) regulate market conduct,
insurance producer conduct, or unfair
trade practices;
``(ii) establish consumer
protections; or
``(iii) require insurance producers
to be appointed by a licensed or
authorized insurer.
``(f) Biennial Renewal.--Membership in the Association shall
be renewed on a biennial basis.
``(g) Continuing Education.--
``(1) In general.--The Association shall establish,
as a condition of membership, continuing education
requirements which shall be comparable to the
continuing education requirements under the licensing
laws of a majority of the States.
``(2) State continuing education requirements.--A
member may not be required to satisfy continuing
education requirements imposed under the laws,
regulations, provisions, or actions of any State other
than the home State of the member.
``(3) Reciprocity.--The Association shall not require
a member to satisfy continuing education requirements
that are equivalent to any continuing education
requirements of the home State of the member that have
been satisfied by the member during the applicable
licensing period.
``(4) Limitation on the association.--The Association
shall not directly or indirectly offer any continuing
education courses for insurance producers.
``(h) Probation, Suspension and Revocation.--
``(1) Disciplinary action.--The Association may place
an insurance producer that is a member of the
Association on probation or suspend or revoke the
membership of the insurance producer in the
Association, or assess monetary fines or penalties, as
the Association determines to be appropriate, if--
``(A) the insurance producer fails to meet
the applicable membership criteria or other
standards established by the Association;
``(B) the insurance producer has been subject
to disciplinary action pursuant to a final
adjudicatory proceeding under the jurisdiction
of a State insurance regulator;
``(C) an insurance license held by the
insurance producer has been suspended or
revoked by a State insurance regulator; or
``(D) the insurance producer has been
convicted of a crime that would have resulted
in the denial of membership pursuant to
subsection (a)(4)(L)(i) at the time of
application, and the Association has received a
copy of the final disposition from a court of
competent jurisdiction.
``(2) Violations of association standards.--The
Association shall have the power to investigate alleged
violations of Association standards.
``(3) Reporting.--The Association shall immediately
notify the States (including State insurance
regulators) and the NAIC when the membership of an
insurance producer has been placed on probation or has
been suspended, revoked, or otherwise terminated, or
when the Association has assessed monetary fines or
penalties.
``(i) Consumer Complaints.--
``(1) In general.--The Association shall--
``(A) refer any complaint against a member of
the Association from a consumer relating to
alleged misconduct or violations of State
insurance laws to the State insurance regulator
where the consumer resides and, when
appropriate, to any additional State insurance
regulator, as determined by standards adopted
by the Association; and
``(B) make any related records and
information available to each State insurance
regulator to whom the complaint is forwarded.
``(2) Telephone and other access.--The Association
shall maintain a toll-free number for purposes of this
subsection and, as practicable, other alternative means
of communication with consumers, such as an Internet
webpage.
``(3) Final disposition of investigation.--State
insurance regulators shall provide the Association with
information regarding the final disposition of a
complaint referred pursuant to paragraph (1)(A), but
nothing shall be construed to compel a State to release
confidential investigation reports or other information
protected by State law to the Association.
``(j) Information Sharing.--The Association may--
``(1) share documents, materials, or other
information, including confidential and privileged
documents, with a State, Federal, or international
governmental entity or with the NAIC or other
appropriate entity referred to paragraphs (3) and (4),
provided that the recipient has the authority and
agrees to maintain the confidentiality or privileged
status of the document, material, or other information;
``(2) limit the sharing of information as required
under this subtitle with the NAIC or any other non-
governmental entity, in circumstances under which the
Association determines that the sharing of such
information is unnecessary to further the purposes of
this subtitle;
``(3) establish a central clearinghouse, or utilize
the NAIC or another appropriate entity, as determined
by the Association, as a central clearinghouse, for use
by the Association and the States (including State
insurance regulators), through which members of the
Association may disclose their intent to operate in 1
or more States and pay the licensing fees to the
appropriate States; and
``(4) establish a database, or utilize the NAIC or
another appropriate entity, as determined by the
Association, as a database, for use by the Association
and the States (including State insurance regulators)
for the collection of regulatory information concerning
the activities of insurance producers.
``(k) Effective Date.--The provisions of this section shall
take effect on the later of--
``(1) the expiration of the 2-year period beginning
on the date of enactment of the National Association of
Registered Agents and Brokers Reform Act of 2014; and
``(2) the date of incorporation of the Association.
``SEC. 324. BOARD OF DIRECTORS.
``(a) Establishment.--There is established a board of
directors of the Association, which shall have authority to
govern and supervise all activities of the Association.
``(b) Powers.--The Board shall have such of the powers and
authority of the Association as may be specified in the bylaws
of the Association.
``(c) Composition.--
``(1) In general.--The Board shall consist of 13
members who shall be appointed by the President, by and
with the advice and consent of the Senate, in
accordance with the procedures established under Senate
Resolution 116 of the 112\th\ Congress, of whom--
``(A) 8 shall be State insurance
commissioners appointed in the manner provided
in paragraph (2), 1 of whom shall be designated
by the President to serve as the chairperson of
the Board until the Board elects one such State
insurance commissioner Board member to serve as
the chairperson of the Board;
``(B) 3 shall have demonstrated expertise and
experience with property and casualty insurance
producer licensing; and
``(C) 2 shall have demonstrated expertise and
experience with life or health insurance
producer licensing.
``(2) State insurance regulator representatives.--
``(A) Recommendations.--Before making any
appointments pursuant to paragraph (1)(A), the
President shall request a list of recommended
candidates from the States through the NAIC,
which shall not be binding on the President. If
the NAIC fails to submit a list of
recommendations not later than 15 business days
after the date of the request, the President
may make the requisite appointments without
considering the views of the NAIC.
``(B) Political affiliation.--Not more than 4
Board members appointed under paragraph (1)(A)
shall belong to the same political party.
``(C) Former state insurance commissioners.--
``(i) In general.--If, after offering
each currently serving State insurance
commissioner an appointment to the
Board, fewer than 8 State insurance
commissioners have accepted appointment
to the Board, the President may appoint
the remaining State insurance
commissioner Board members, as required
under paragraph (1)(A), of the
appropriate political party as required
under subparagraph (B), from among
individuals who are former State
insurance commissioners.
``(ii) Limitation.--A former State
insurance commissioner appointed as
described in clause (i) may not be
employed by or have any present direct
or indirect financial interest in any
insurer, insurance producer, or other
entity in the insurance industry, other
than direct or indirect ownership of,
or beneficial interest in, an insurance
policy or annuity contract written or
sold by an insurer.
``(D) Service through term.--If a Board
member appointed under paragraph (1)(A) ceases
to be a State insurance commissioner during the
term of the Board member, the Board member
shall cease to be a Board member.
``(3) Private sector representatives.--In making any
appointment pursuant to subparagraph (B) or (C) of
paragraph (1), the President may seek recommendations
for candidates from groups representing the category of
individuals described, which shall not be binding on
the President.
``(4) State insurance commissioner defined.--For
purposes of this subsection, the term `State insurance
commissioner' means a person who serves in the position
in State government, or on the board, commission, or
other body that is the primary insurance regulatory
authority for the State.
``(d) Terms.--
``(1) In general.--Except as provided under paragraph
(2), the term of service for each Board member shall be
2 years.
``(2) Exceptions.--
``(A) 1-year terms.--The term of service
shall be 1 year, as designated by the President
at the time of the nomination of the subject
Board members for--
``(i) 4 of the State insurance
commissioner Board members initially
appointed under paragraph (1)(A), of
whom not more than 2 shall belong to
the same political party;
``(ii) 1 of the Board members
initially appointed under paragraph
(1)(B); and
``(iii) 1 of the Board members
initially appointed under paragraph
(1)(C).
``(B) Expiration of term.--A Board member may
continue to serve after the expiration of the
term to which the Board member was appointed
for the earlier of 2 years or until a successor
is appointed.
``(C) Mid-term appointments.--A Board member
appointed to fill a vacancy occurring before
the expiration of the term for which the
predecessor of the Board member was appointed
shall be appointed only for the remainder of
that term.
``(3) Successive terms.--Board members may be
reappointed to successive terms.
``(e) Initial Appointments.--The appointment of initial Board
members shall be made no later than 90 days after the date of
enactment of the National Association of Registered Agents and
Brokers Reform Act of 2014.
``(f) Meetings.--
``(1) In general.--The Board shall meet--
``(A) at the call of the chairperson;
``(B) as requested in writing to the
chairperson by not fewer than 5 Board members;
or
``(C) as otherwise provided by the bylaws of
the Association.
``(2) Quorum required.--A majority of all Board
members shall constitute a quorum.
``(3) Voting.--Decisions of the Board shall require
the approval of a majority of all Board members present
at a meeting, a quorum being present.
``(4) Initial meeting.--The Board shall hold its
first meeting not later than 45 days after the date on
which all initial Board members have been appointed.
``(g) Restriction on Confidential Information.--Board members
appointed pursuant to subparagraphs (B) and (C) of subsection
(c)(1) shall not have access to confidential information
received by the Association in connection with complaints,
investigations, or disciplinary proceedings involving insurance
producers.
``(h) Ethics and Conflicts of Interest.--The Board shall
issue and enforce an ethical conduct code to address
permissible and prohibited activities of Board members and
Association officers, employees, agents, or consultants. The
code shall, at a minimum, include provisions that prohibit any
Board member or Association officer, employee, agent or
consultant from--
``(1) engaging in unethical conduct in the course of
performing Association duties;
``(2) participating in the making or influencing the
making of any Association decision, the outcome of
which the Board member, officer, employee, agent, or
consultant knows or had reason to know would have a
reasonably foreseeable material financial effect,
distinguishable from its effect on the public
generally, on the person or a member of the immediate
family of the person;
``(3) accepting any gift from any person or entity
other than the Association that is given because of the
position held by the person in the Association;
``(4) making political contributions to any person or
entity on behalf of the Association; and
``(5) lobbying or paying a person to lobby on behalf
of the Association.
``(i) Compensation.--
``(1) In general.--Except as provided in paragraph
(2), no Board member may receive any compensation from
the Association or any other person or entity on
account of Board membership.
``(2) Travel expenses and per diem.--Board members
may be reimbursed only by the Association for travel
expenses, including per diem in lieu of subsistence, at
rates consistent with rates authorized for employees of
Federal agencies under subchapter I of chapter 57 of
title 5, United States Code, while away from home or
regular places of business in performance of services
for the Association.
``SEC. 325. BYLAWS, STANDARDS, AND DISCIPLINARY ACTIONS.
``(a) Adoption and Amendment of Bylaws and Standards.--
``(1) Procedures.--The Association shall adopt
procedures for the adoption of bylaws and standards
that are similar to procedures under subchapter II of
chapter 5 of title 5, United States Code (commonly
known as the `Administrative Procedure Act').
``(2) Copy required to be filed.--The Board shall
submit to the President, through the Department of the
Treasury, and the States (including State insurance
regulators), and shall publish on the website of the
Association, all proposed bylaws and standards of the
Association, or any proposed amendment to the bylaws or
standards of the Association, accompanied by a concise
general statement of the basis and purpose of such
proposal.
``(3) Effective date.--Any proposed bylaw or standard
of the Association, and any proposed amendment to the
bylaws or standards of the Association, shall take
effect, after notice under paragraph (2) and
opportunity for public comment, on such date as the
Association may designate, unless suspended under
section 329(c).
``(4) Rule of construction.--Nothing in this section
shall be construed to subject the Board or the
Association to the requirements of subchapter II of
chapter 5 of title 5, United States Code (commonly
known as the `Administrative Procedure Act').
``(b) Disciplinary Action by the Association.--
``(1) Specification of charges.--In any proceeding to
determine whether membership shall be denied,
suspended, revoked, or not renewed, or to determine
whether a member of the Association should be placed on
probation (referred to in this section as a
`disciplinary action') or whether to assess fines or
monetary penalties, the Association shall bring
specific charges, notify the member of the charges,
give the member an opportunity to defend against the
charges, and keep a record.
``(2) Supporting statement.--A determination to take
disciplinary action shall be supported by a statement
setting forth--
``(A) any act or practice in which the member
has been found to have been engaged;
``(B) the specific provision of this subtitle
or standard of the Association that any such
act or practice is deemed to violate; and
``(C) the sanction imposed and the reason for
the sanction.
``(3) Ineligibility of private sector
representatives.--Board members appointed pursuant to
section 324(c)(3) may not--
``(A) participate in any disciplinary action
or be counted toward establishing a quorum
during a disciplinary action; and
``(B) have access to confidential information
concerning any disciplinary action.
``SEC. 326. POWERS.
``In addition to all the powers conferred upon a nonprofit
corporation by the District of Columbia Nonprofit Corporation
Act, the Association shall have the power to--
``(1) establish and collect such membership fees as
the Association finds necessary to impose to cover the
costs of its operations;
``(2) adopt, amend, and repeal bylaws, procedures, or
standards governing the conduct of Association business
and performance of its duties;
``(3) establish procedures for providing notice and
opportunity for comment pursuant to section 325(a);
``(4) enter into and perform such agreements as
necessary to carry out the duties of the Association;
``(5) hire employees, professionals, or specialists,
and elect or appoint officers, and to fix their
compensation, define their duties and give them
appropriate authority to carry out the purposes of this
subtitle, and determine their qualification;
``(6) establish personnel policies of the Association
and programs relating to, among other things, conflicts
of interest, rates of compensation, where applicable,
and qualifications of personnel;
``(7) borrow money; and
``(8) secure funding for such amounts as the
Association determines to be necessary and appropriate
to organize and begin operations of the Association,
which shall be treated as loans to be repaid by the
Association with interest at market rate.
``SEC. 327. REPORT BY THE ASSOCIATION.
``(a) In General.--As soon as practicable after the close of
each fiscal year, the Association shall submit to the
President, through the Department of the Treasury, and the
States (including State insurance regulators), and shall
publish on the website of the Association, a written report
regarding the conduct of its business, and the exercise of the
other rights and powers granted by this subtitle, during such
fiscal year.
``(b) Financial Statements.--Each report submitted under
subsection (a) with respect to any fiscal year shall include
audited financial statements setting forth the financial
position of the Association at the end of such fiscal year and
the results of its operations (including the source and
application of its funds) for such fiscal year.
``SEC. 328. LIABILITY OF THE ASSOCIATION AND THE BOARD MEMBERS,
OFFICERS, AND EMPLOYEES OF THE ASSOCIATION.
``(a) In General.--The Association shall not be deemed to be
an insurer or insurance producer within the meaning of any
State law, rule, regulation, or order regulating or taxing
insurers, insurance producers, or other entities engaged in the
business of insurance, including provisions imposing premium
taxes, regulating insurer solvency or financial condition,
establishing guaranty funds and levying assessments, or
requiring claims settlement practices.
``(b) Liability of Board Members, Officers, and Employees.--
No Board member, officer, or employee of the Association shall
be personally liable to any person for any action taken or
omitted in good faith in any matter within the scope of their
responsibilities in connection with the Association.
``SEC. 329. PRESIDENTIAL OVERSIGHT.
``(a) Removal of Board.--If the President determines that the
Association is acting in a manner contrary to the interests of
the public or the purposes of this subtitle or has failed to
perform its duties under this subtitle, the President may
remove the entire existing Board for the remainder of the term
to which the Board members were appointed and appoint, in
accordance with section 324 and with the advice and consent of
the Senate, in accordance with the procedures established under
Senate Resolution 116 of the 112\th\ Congress, new Board
members to fill the vacancies on the Board for the remainder of
the terms.
``(b) Removal of Board Member.--The President may remove a
Board member only for neglect of duty or malfeasance in office.
``(c) Suspension of Bylaws and Standards and Prohibition of
Actions.--Following notice to the Board, the President, or a
person designated by the President for such purpose, may
suspend the effectiveness of any bylaw or standard, or prohibit
any action, of the Association that the President or the
designee determines is contrary to the purposes of this
subtitle.
``SEC. 330. RELATIONSHIP TO STATE LAW.
``(a) Preemption of State Laws.--State laws, regulations,
provisions, or other actions purporting to regulate insurance
producers shall be preempted to the extent provided in
subsection (b).
``(b) Prohibited Actions.--
``(1) In general.--No State shall--
``(A) impede the activities of, take any
action against, or apply any provision of law
or regulation arbitrarily or discriminatorily
to, any insurance producer because that
insurance producer or any affiliate plans to
become, has applied to become, or is a member
of the Association;
``(B) impose any requirement upon a member of
the Association that it pay fees different from
those required to be paid to that State were it
not a member of the Association; or
``(C) impose any continuing education
requirements on any nonresident insurance
producer that is a member of the Association.
``(2) States other than a home state.--No State,
other than the home State of a member of the
Association, shall--
``(A) impose any licensing, personal or
corporate qualifications, education, training,
experience, residency, continuing education, or
bonding requirement upon a member of the
Association that is different from the criteria
for membership in the Association or renewal of
such membership;
``(B) impose any requirement upon a member of
the Association that it be licensed,
registered, or otherwise qualified to do
business or remain in good standing in the
State, including any requirement that the
insurance producer register as a foreign
company with the secretary of state or
equivalent State official;
``(C) require that a member of the
Association submit to a criminal history record
check as a condition of doing business in the
State; or
``(D) impose any licensing, registration, or
appointment requirements upon a member of the
Association, or require a member of the
Association to be authorized to operate as an
insurance producer, in order to sell, solicit,
or negotiate insurance for commercial property
and casualty risks to an insured with risks
located in more than one State, if the member
is licensed or otherwise authorized to operate
in the State where the insured maintains its
principal place of business and the contract of
insurance insures risks located in that State.
``(3) Preservation of state disciplinary authority.--
Nothing in this section may be construed to prohibit a
State from investigating and taking appropriate
disciplinary action, including suspension or revocation
of authority of an insurance producer to do business in
a State, in accordance with State law and that is not
inconsistent with the provisions of this section,
against a member of the Association as a result of a
complaint or for any alleged activity, regardless of
whether the activity occurred before or after the
insurance producer commenced doing business in the
State pursuant to Association membership.
``SEC. 331. COORDINATION WITH FINANCIAL INDUSTRY REGULATORY AUTHORITY.
``The Association shall coordinate with the Financial
Industry Regulatory Authority in order to ease any
administrative burdens that fall on members of the Association
that are subject to regulation by the Financial Industry
Regulatory Authority, consistent with the requirements of this
subtitle and the Federal securities laws.
``SEC. 332. RIGHT OF ACTION.
``(a) Right of Action.--Any person aggrieved by a decision or
action of the Association may, after reasonably exhausting
available avenues for resolution within the Association,
commence a civil action in an appropriate United States
district court, and obtain all appropriate relief.
``(b) Association Interpretations.--In any action under
subsection (a), the court shall give appropriate weight to the
interpretation of the Association of its bylaws and standards
and this subtitle.
``SEC. 333. FEDERAL FUNDING PROHIBITED.
``The Association may not receive, accept, or borrow any
amounts from the Federal Government to pay for, or reimburse,
the Association for, the costs of establishing or operating the
Association.
``SEC. 334. DEFINITIONS.
``For purposes of this subtitle, the following definitions
shall apply:
``(1) Business entity.--The term `business entity'
means a corporation, association, partnership, limited
liability company, limited liability partnership, or
other legal entity.
``(2) Depository institution.--The term `depository
institution' has the meaning as in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813).
``(3) Home state.--The term `home State' means the
State in which the insurance producer maintains its
principal place of residence or business and is
licensed to act as an insurance producer.
``(4) Insurance.--The term `insurance' means any
product, other than title insurance or bail bonds,
defined or regulated as insurance by the appropriate
State insurance regulatory authority.
``(5) Insurance producer.--The term `insurance
producer' means any insurance agent or broker, excess
or surplus lines broker or agent, insurance consultant,
limited insurance representative, and any other
individual or entity that sells, solicits, or
negotiates policies of insurance or offers advice,
counsel, opinions or services related to insurance.
``(6) Insurer.--The term `insurer' has the meaning as
in section 313(e)(2)(B) of title 31, United States
Code.
``(7) Principal place of business.--The term
`principal place of business' means the State in which
an insurance producer maintains the headquarters of the
insurance producer and, in the case of a business
entity, where high-level officers of the entity direct,
control, and coordinate the business activities of the
business entity.
``(8) Principal place of residence.--The term
`principal place of residence' means the State in which
an insurance producer resides for the greatest number
of days during a calendar year.
``(9) State.--The term `State' includes any State,
the District of Columbia, any territory of the United
States, and Puerto Rico, Guam, American Samoa, the
Trust Territory of the Pacific Islands, the Virgin
Islands, and the Northern Mariana Islands.
``(10) State law.--
``(A) In general.--The term `State law'
includes all laws, decisions, rules,
regulations, or other State action having the
effect of law, of any State.
``(B) Laws applicable in the district of
columbia.--A law of the United States
applicable only to or within the District of
Columbia shall be treated as a State law rather
than a law of the United States.''.
(b) Technical Amendment.--The table of contents for the
Gramm-Leach-Bliley Act is amended by striking the items
relating to subtitle C of title III and inserting the following
new items:
``Subtitle C--National Association of Registered Agents and Brokers
``Sec. 321. National Association of Registered Agents and Brokers.
``Sec. 322. Purpose.
``Sec. 323. Membership.
``Sec. 324. Board of directors.
``Sec. 325. Bylaws, standards, and disciplinary actions.
``Sec. 326. Powers.
``Sec. 327. Report by the Association.
``Sec. 328. Liability of the Association and the Board members,
officers, and employees of the Association.
``Sec. 329. Presidential oversight.
``Sec. 330. Relationship to State law.
``Sec. 331. Coordination with financial industry regulatory authority.
``Sec. 332. Right of action.
``Sec. 333. Federal funding prohibited.
``Sec. 334. Definitions.''.
TITLE III--BUSINESS RISK MITIGATION AND PRICE STABILIZATION
SEC. 301. SHORT TITLE.
This title may be cited as the ``Business Risk Mitigation and
Price Stabilization Act of 2014''.
SEC. 302. MARGIN REQUIREMENTS.
(a) Commodity Exchange Act Amendment.--Section 4s(e) of the
Commodity Exchange Act (7 U.S.C. 6s(e)), as added by section
731 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, is amended by adding at the end the following
new paragraph:
``(4) Applicability with respect to counterparties.--
The requirements of paragraphs (2)(A)(ii) and
(2)(B)(ii), including the initial and variation margin
requirements imposed by rules adopted pursuant to
paragraphs (2)(A)(ii) and (2)(B)(ii), shall not apply
to a swap in which a counterparty qualifies for an
exception under section 2(h)(7)(A), or an exemption
issued under section 4(c)(1) from the requirements of
section 2(h)(1)(A) for cooperative entities as defined
in such exemption, or satisfies the criteria in section
2(h)(7)(D).''.
(b) Securities Exchange Act Amendment.--Section 15F(e) of the
Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)), as added
by section 764(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, is amended by adding at the end the
following new paragraph:
``(4) Applicability with respect to counterparties.--
The requirements of paragraphs (2)(A)(ii) and
(2)(B)(ii) shall not apply to a security-based swap in
which a counterparty qualifies for an exception under
section 3C(g)(1) or satisfies the criteria in section
3C(g)(4).''.
SEC. 303. IMPLEMENTATION.
The amendments made by this title to the Commodity Exchange
Act shall be implemented--
(1) without regard to--
(A) chapter 35 of title 44, United States
Code; and
(B) the notice and comment provisions of
section 553 of title 5, United States Code;
(2) through the promulgation of an interim final
rule, pursuant to which public comment will be sought
before a final rule is issued; and
(3) such that paragraph (1) shall apply solely to
changes to rules and regulations, or proposed rules and
regulations, that are limited to and directly a
consequence of such amendments.