[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.