,,ib ,union ,calendar ,no4 #cia #aacth ,,congress #b;d ,session ,h4 ,r4 #dhga ,report ,no4 #aac-ebc ,,in ,,the ,,house ,,of ,,representatives ,june #ag1 #bjad ,mr4 ,neugebauer 7for himself and ,mr4 ,westmoreland7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,july #af1 #bjad ,additional sponsors3 ,mr4 ,royce1 ,mr4 ,bachus1 ,mr4 ,mulvaney1 ,mr4 ,mc,henry1 ,mr4 ,garrett1 ,mr4 ,stivers1 ,mr4 ,fincher1 ,mr4 ,huizenga of ,michigan1 ,mr4 ,ross1 ,ms4 ,granger1 ,mr4 ,olson1 ,mr4 ,carter1 ,mr4 ,smith of ,texas1 ,mr4 ,sam ,johnson of ,texas1 ,mr4 ,thornberry1 ,mr4 ,culberson1 ,mr4 ,sessions1 ,mr4 ,conaway1 ,mr4 ,weber of ,texas1 ,mr4 ,stockman1 ,mr4 ,hall1 ,mr4 ,marchant1 ,mr4 ,duffy1 ,mr4 ,luetkemeyer1 ,mr4 ,hurt1 ,mr4 ,rogers of ,alabama1 and ,mr4 ,jolly ,july #af1 #bjad ,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed ,strike out all after the enacting clause and insert the part printed in italic ,for text of introduced bill1 see copy of bill as introduced on ,june #ag1 #bjad ,a ,,bill ,to reauthorize the ,terrorism ,risk ,insurance ,act of #bjjb1 and for other purposes4 #a4 ,short title and table of contents 7a7 ,short title ,this ,act may be cited as the ,,tria ,reform ,act of #bjad4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title and table of contents4 ,title ,i--,,tria reform ,sec4 #aja4 ,references4 ,sec4 #ajb4 ,extension of program4 ,sec4 #ajc4 ,certification of acts of terrorism4 ,sec4 #ajd4 ,separate treatment of conventional terrorism from ,,nbcr terrorism4 ,sec4 #aje4 ,availability of coverage4 ,sec4 #ajf4 ,terrorism loss risk-spreading premiums amount4 ,sec4 #ajg4 ,increase of aggregate retention amount2 mandatory recoupment4 ,sec4 #ajh4 ,terrorism loss risk-spreading premium4 ,sec4 #aji4 ,risk-sharing mechanisms4 ,sec4 #aaj4 ,reporting of terrorism insurance data4 ,sec4 #aaa4 ,delivery of notices to policyholders4 ,sec4 #aab4 ,definition of control4 ,sec4 #aac4 ,annual study of small insurer market competitiveness4 ,sec4 #aad4 ,,cbo and ,,omb studies regarding budgeting for costs of ,federal insurance programs4 ,sec4 #aae4 ,,gao study on upfront premiums and capital reserve fund4 ,title ,,ii--,national ,association of ,registered ,agents and ,brokers ,reform ,sec4 #bja4 ,short title4 ,sec4 #bjb4 ,reestablishment of the ,national ,association of ,registered ,agents and ,brokers4 ,i ,,tria reform #aja4 ,references ,except as otherwise expressly provided1 wherever in this title an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,terrorism ,risk ,insurance ,act of #bjjb 7#ae ,u4,s4,c4 #fgja note74 #ajb4 ,extension of program 7a7 ,in general ,subsection 7a7 of section #ajh 7#ae ,u4,s4,c4 #fgja note7 is amended by striking ,december #ca1 #bjad and inserting ,december #ca1 #bjai4 7b7 ,program years ,subparagraph 7,g7 of section #ajb7aa7 7#ae ,u4,s4,c4 #fgja note7 is amended by striking #bjad and inserting #bjai4 #ajc4 ,certification of acts of terrorism 7a7 ,in general ,paragraph 7#a7 of section #ajb 7#ae ,u4,s4,c4 #fgja note7 is amended-- 7#a7 in subparagraph 7,a71 in the matter preceding clause 7i71 by striking concurrence with the ,secretary of ,state and inserting consultation with the ,secretary of ,homeland ,security2 7#b7 in subparagraph 7,b7-- 7,a7 in clause 7i71 by striking 2 or and inserting a period2 7,b7 by striking clause 7ii72 and 7,c7 by striking terrorism if-- and all that follows through 7i7 the act and inserting terrorism if the act2 7#c7 by redesignating subparagraphs 7,c7 and 7,d7 as subparagraphs 7,e7 and 7,g71 respectively2 7#d7 by inserting after subparagraph 7,b7 the following new subparagraph3 7,c7 ,timing of certification 7i7 ,preliminary certification notice ,the ,secretary shall issue a preliminary certification notice indicating whether an act is expected to be a certified act of terrorism not later than #ae days after-- 7,i7 the date of the occurrence of a potential act of terrorism2 or 7,,ii7 the receipt of a petition seeking a preliminary certification decision submitted by an insurer having an in-force policy or policies that could be affected by a certification decision4 7ii7 ,final certification notice ,not later than #ij days after the date of the occurrence of a potential act of terrorism or the receipt of a petition submitted to the ,secretary pursuant to clause 7i77,,ii71 the ,secretary shall issue a final certification notice indicating whether an act is a certified act of terrorism for purposes of this ,act4 7iii7 ,rule of construction ,failure to issue a preliminary certification notice under clause 7i7 shall not prevent the ,secretary from issuing a final certification notice under clause 7ii74 2 and 7#e7 by inserting before subparagraph 7,g71 as so redesignated by paragraph 7#c7 of this subsection1 the following new subparagraph3 7,f7 ,failure to make determination ,if the ,secretary does not certify1 or make a determination not to certify1 an act as an act of terrorism before the expiration of the #ij-;day period beginning on the occurrence of such act1 such act shall be treated for purposes of this ,act as having been determined by the ,secretary not to be an act of terrorism and such determination shall be final and shall not be subject to judicial review4 4 7b7 ,applicability ,the amendments made by subsection 7a7 shall apply to the ,program ,year for the ,terrorism ,insurance ,program established by title ,i of the ,terrorism ,risk ,insurance ,act of #bjjb 7#ae ,u4,s4,c4 #fgja note7 that begins on ,january #a1 #bjae1 and ,program ,years thereafter4 #ajd4 ,separate treatment of conventional terrorism from ,,nbcr terrorism 7a7 ,definition 7#a7 ,in general ,section #ajb 7#ae ,u4,s4,c4 #fgja note7 is amended-- 7,a7 in paragraph 7#a71 by inserting after subparagraph 7,c71 as added by section #ajc7;a77#d7 of this ,act1 the following new subparagraph3 7,d7 ,act of ,,nbcr terrorism ,each certification of an act of terrorism under subparagraph 7,a7 shall include a determination of whether such act involves ,,nbcr terrorism4 2 7,b7 by redesignating paragraphs 7#i7 through 7#af7 as paragraphs 7#aj7 through 7#ag71 respectively2 and 7,c7 by inserting after paragraph 7#h7 the following new paragraph3 7#i7 ,,nbcr terrorism ,notwithstanding paragraph 7#a71 the term ,,nbcr terrorism means an act of terrorism to the extent that the insured losses involve1 regardless of any other cause or event that contributes concurrently or in any sequence to such insurance loss-- 7,a7 an act of terrorism that is carried out by means of the dispersal or application of radioactive material1 or through the use of a nuclear weapon or device that involves or produces a nuclear reaction1 nuclear radiation1 or radioactive contamination2 7,b7 the release of radioactive material1 and it appears that one purpose of the act of terrorism was to release such material2 7,c7 an act of terrorism that is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical material2 or 7,d7 the release of pathogenic or poisonous biological or chemical material1 and it appears that one purpose of the act of terrorism was to release such material4 4 7#b7 ,applicability ,the amendments made by paragraph 7#a7 shall apply to the ,program ,year for the ,terrorism ,insurance ,program established by title ,i of the ,terrorism ,risk ,insurance ,act of #bjjb 7#ae ,u4,s4,c4 #fgja note7 that begins on ,january #a1 #bjaf1 and ,program ,years thereafter4 7b7 ,federal share of insured loss compensation ,subparagraph 7,a7 of section #ajc7;e77#a7 7#ae ,u4,s4,c4 #fgja note7 is amended-- 7#a7 by striking ,the ,federal share and inserting ,subject to subparagraphs 7,b7 and 7,c71 the ,federal share2 7#b7 by striking an insurer during the ,transition period and inserting the following3 an insurer-- 7i7 during the ,transition period1 2 7#c7 by inserting through the ,program ,year ending on ,december #ca1 #bjae1 after each ,program ,year thereafter2 7#d7 by striking the period at the end and inserting 2 and2 and 7#e7 by adding at the end the following new clause3 7ii7 shall be equal to-- 7,i7 except as provided in subclause 7,,ii7-- 7aa7 during the ,program ,year beginning on ,january #a1 #bjaf1 #hd percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such ,program ,year2 7bb7 during the ,program ,year beginning on ,january #a1 #bjag1 #hc percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such ,program ,year2 7cc7 during the ,program ,year beginning on ,january #a1 #bjah1 #hb percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such ,program ,year2 and 7dd7 during the ,program ,year beginning on ,january #a1 #bjai1 #hj percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such ,program ,year2 and 7,,ii7 in the case of insured losses resulting from acts of ,,nbcr terrorism1 during the ,program ,year beginning on ,january #a1 #bjaf1 and each ,program ,year thereafter1 #he percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such ,program ,year4 4 7c7 ,program trigger ,subparagraph 7,b7 of section #ajc7;e77#a7 7#ae ,u4,s4,c4 #fgja note7 is amended-- 7#a7 in the matter preceding clause 7i7-- 7,a7 by striking a certified act and inserting certified acts2 and 7,b7 by striking such certified act and inserting such certified acts2 7#b7 in clause 7i7 by striking or at the end2 7#c7 in clause 7ii71 by striking the period at the end and inserting the following through the ,program ,year ending on ,december #ca1 #bjae2 or2 7#d7 by adding at the end the following3 7iii7 7,i7 except as provided in subclause 7,,ii7-- 7aa7 #bjj1jjj1jjj1 with respect to such insured losses occurring in the ,program ,year beginning on ,january #a1 #bjaf2 7bb7 #cjj1jjj1jjj1 with respect to such insured losses occurring in the ,program ,year beginning on ,january #a1 #bjag2 7cc7 #djj1jjj1jjj1 with respect to such insured losses occurring in the ,program ,year beginning on ,january #a1 #bjah2 and 7dd7 #ejj1jjj1jjj1 with respect to such insured losses occurring in the ,program ,year beginning on ,january #a1 #bjai2 and 7,,ii7 in the case of an act of ,,nbcr terrorism1 #ajj1jjj1jjj1 with respect to such insured losses occurring in the ,program ,year beginning on ,january #a1 #bjaf1 or any ,program ,year thereafter4 2 and 7#e7 by adding after and below clause 7iii71 as added by paragraph 7#d7 of this subsection1 the following3 ,in determining the aggregate industry insured losses resulting from certified acts of terrorism for purposes of this subparagraph1 the ,secretary shall not consider any act of terrorism resulting1 in the aggregate1 in less than #ej1jjj1jjj in insured losses4 4 #aje4 ,availability of coverage ,subsection 7c7 of section #ajc 7#ae ,u4,s4,c4 #fgja note7 is amended to read as follows3 7c7 ,mandatory availability 7#a7 ,in general ,except as provided in paragraph 7#b71 during each ,program ,year1 each entity that meets the definition of an insurer under section #ajb shall make available-- 7,a7 in all of its property and casualty insurance policies1 coverage for insured losses2 and 7,b7 property and casualty insurance coverage for insured losses that does not differ materially from the terms1 amounts1 and other coverage limitations applicable to losses arising from events other than acts of terrorism4 7#b7 ,no mandatory availability for small insurers ,the ,secretary shall provide1 by regulation and in consultation with ,state insurance regulatory authorities1 that paragraph 7#a7 shall not apply for a ,program ,year with respect to any small insurer 7as such term is defined in such regulations by the ,secretary7 that1 at the option of the insurer1 makes a request for such inapplicability for such ,program ,year to the appropriate ,state insurance regulatory authority for the ,state in which such insurer is domiciled and is determined by such ,state insurance regulatory authority to meet such requirements for financial hardship or financial infeasibility of providing coverage for insured losses as the ,secretary shall establish in such regulations4 ,the insurer shall provide notice1 in a manner satisfactory to the ,state insurance regulatory authority1 informing affected prospective and current policyholders whether such coverage is not provided by the insurer4 ,this paragraph may not be construed to require any ,state insurance regulatory authority to undertake making determinations under this paragraph4 4 #ajf4 ,terrorism loss risk-spreading premiums amount 7a7 ,in general ,subparagraph 7,c7 of section #ajc7;e77#g7 7#ae ,u4,s4,c4 #fgja note7 is amended-- 7#a7 by striking subparagraphs 7,a7 through 7,e7 and inserting subparagraphs 7,a7 through 7,f72 and 7#b7 by striking #acc percent and inserting #aej percent4 7b7 ,applicability ,the amendment made by subsection 7a7 shall apply to the ,program ,year for the ,terrorism ,insurance ,program established by title ,i of the ,terrorism ,risk ,insurance ,act of #bjjb 7#ae ,u4,s4,c4 #fgja note7 that begins on ,january #a1 #bjaf1 and ,program ,years thereafter4 #ajg4 ,increase of aggregate retention amount2 mandatory recoupment 7a7 ,in ,general ,paragraph 7#f7 of section #ajc7;e7 7#ae ,u4,s4,c4 #fgja note7 is amended-- 7#a7 in subparagraph 7,d77ii71 by striking and at the end2 7#b7 in subparagraph 7,e7-- 7,a7 in the matter preceding clause 7i71 by inserting through the ,program ,year ending on ,december #ca1 #bjae before the comma2 and 7,b7 in clause 7ii71 by striking the period at the end and inserting 2 and2 and 7#c7 by adding at the end the following new subparagraph3 7,f7 for the ,program ,year beginning ,january #a1 #bjaf1 and each ,program ,year thereafter1 the lesser of-- 7i7 the amount that is equal to the sum of the insurer deductibles for the ,program ,year for all insurers participating in the ,program2 and 7ii7 the aggregate amount1 for all insurers1 of insured losses during such ,program ,year4 4 7b7 ,mandatory recoupment 7#a7 ,amount2 timing ,paragraph 7#g7 of section #ajc7;e7 7#ae ,u4,s4,c4 #fgja note7 is amended-- 7,a7 by striking subparagraphs 7,a7 and 7,b7 and inserting the following new subparagraph3 7,a7 ,mandatory recoupment amount ,for purposes of this paragraph1 the mandatory recoupment amount for each of the periods referred to in subparagraphs 7,a7 through 7,f7 of paragraph 7#f7 shall be equal to the lesser of-- 7i7 the aggregate amount1 for all insurers1 of insured losses during such period that are compensated by the ,federal ,government pursuant to paragraph 7#a72 or 7ii7 the insurance marketplace aggregate retention amount under paragraph 7#f7 for such period4 2 7,b7 in subparagraph 7,e77i77,,iii71 by striking after ,january #a1 #bjab and inserting before ,december #ca1 #bjad2 and 7,c7 by redesignating subparagraphs 7,c71 7,d71 7,e7 7as so amended71 and 7,f7 as subparagraphs 7,b71 7,c71 7,d71 and 7,e71 respectively4 7#b7 ,conforming amendments ,section #ajc7;e7 7#ae ,u4,s4,c4 #fgja note7 is amended in paragraph 7#g77;,d77i71 as so redesignated by paragraph 7#a77;,c7 of this subsection1 by striking subparagraph 7,c7 and inserting subparagraph 7,b74 #ajh4 ,terrorism loss risk-spreading premium 7a7 ,in general ,section #ajc7;e7 7#ae ,u4,s4,c4 #fgja note7 is amended by striking paragraph 7#h7 and inserting the following new paragraph3 7#h7 ,terrorism loss risk-spreading premiums 7,a7 ,establishment ,after an act of terrorism1 the ,secretary shall1 to the extent provided in paragraph 7#g77;,b71 and may1 to the extent provided in paragraph 7#g77;,c71 establish terrorism loss risk-spreading premiums1 which shall be imposed as a policyholder premium surcharge on property and casualty insurance policies for all participating insurers in force after the date of such establishment4 7,b7 ,collection ,the ,secretary shall provide for insurers to collect terrorism loss risk-spreading premiums and remit such amounts collected to the ,secretary4 7,c7 ,determination of premiums ,in determining the method and manner of imposing terrorism loss risk-spreading premiums1 including the amount of such premiums1 the ,secretary shall-- 7i7 impose such terrorism loss risk-spreading premiums beginning with such period of coverage during the year as the ,secretary determines appropriate1 but shall commence imposition of such premiums not later than #ah months after the occurrence of the act of terrorism for which such premiums are imposed2 7ii7 base any terrorism loss risk-spreading premium on a percentage of the premium amount charged for property and casualty insurance coverage under the policy2 and 7iii7 take into consideration-- 7,i7 the economic impact on commercial centers of urban areas1 including the effect on commercial rents and commercial insurance premiums1 particularly rents and premiums charged to small businesses1 and the availability of lease space and commercial insurance within urban areas2 7,,ii7 the risk factors related to rural areas and smaller commercial centers1 including the potential exposure to loss and the likely magnitude of such loss1 as well as any resulting cross-subsidization that might result2 and 7,,iii7 the various exposures to terrorism risk for different lines of insurance4 7,d7 ,percentage limitation ,a terrorism loss risk-spreading premium collected on a discretionary basis pursuant to paragraph 7#g77;,c7 shall not be less than1 on an annual basis1 the amount equal to #c percent of the premium charged for property and casualty insurance coverage under the policy4 7,e7 ,timing of premiums ,the ,secretary may adjust the timing of terrorism loss risk-spreading premiums to provide for equivalent application of the provisions of this title to policies that are not based on a calendar year1 or to apply such provisions on a daily1 monthly1 or quarterly basis1 as appropriate4 4 7b7 ,applicability ,the amendment made by subsection 7a7 shall apply to the ,program ,year for the ,terrorism ,insurance ,program established by title ,i of the ,terrorism ,risk ,insurance ,act of #bjjb 7#ae ,u4,s4,c4 #fgja note7 that begins on ,january #a1 #bjaf1 and ,program ,years thereafter4 #aji4 ,risk-sharing mechanisms 7a7 ,in ,general ,section #ajc7;e7 7#ae ,u4,s4,c4 #fgja note7 is amended by adding at the end the following new paragraph3 7#i7 ,risk-sharing mechanisms 7,a7 ,finding2 rule of construction ,the ,congress finds that it is desirable to encourage the growth of nongovernmental1 private market reinsurance capacity for protection against losses arising from acts of terrorism4 ,therefore1 nothing in this title shall prohibit insurers from developing risk-sharing mechanisms 7including mutual reinsurance facilities and agreements1 use of the capital markets1 and insurance-linked securities7 to voluntarily reinsure terrorism losses between and among themselves that are not subject to reimbursement under this section4 7,b7 ,establishment of advisory committee ,the ,secretary shall appoint an ,advisory ,committee to-- 7i7 encourage the creation and development of such risk-sharing mechanisms2 7ii7 assist the ,secretary and be available to administer such risk-sharing mechanisms2 and 7iii7 develop articles of incorporation1 bylaws1 and a plan of operation for any long-term reinsurance facility authorized or created in the future4 7,c7 ,membership ,the ,advisory ,committee shall be composed of nine members who are directors1 officers1 or other employees of insurers1 reinsurers1 or capital market participants that are participating or that desire to participate in such mechanisms1 and who are representative of the affected sectors of the insurance industry1 including commercial property insurance1 commercial casualty insurance1 reinsurance1 and alternative risk transfer industries4 4 7b7 ,applicability ,the amendment made by subsection 7a7 shall apply to the ,program ,year for the ,terrorism ,insurance ,program established by title ,i of the ,terrorism ,risk ,insurance ,act of #bjjb 7#ae ,u4,s4,c4 #fgja note7 that begins on ,january #a1 #bjae1 and ,program ,years thereafter4 #aaj4 ,reporting of terrorism insurance data ,section #ajd 7#ae ,u4,s4,c4 #fgja note7 is amended by adding at the end the following new subsection3 7h7 ,reporting of terrorism insurance data 7#a7 ,authority ,during the ,program ,year beginning on ,january #a1 #bjaf1 and in each ,program ,year thereafter1 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 ,program1 which shall include information regarding-- 7,a7 lines of insurance with exposure to such losses2 7,b7 premiums earned on such coverage2 7,c7 geographical location of exposures2 7,d7 pricing of such coverage2 7,e7 the take-up rate for such coverage2 7,f7 the amount of private reinsurance for acts of terrorism purchased2 and 7,g7 such other matters as the ,secretary considers appropriate4 7#b7 ,reports ,not later than #f months after the termination of the ,program ,year beginning on ,january #a1 #bjaf1 and not later than #f months after the termination of each ,program ,year thereafter1 the ,secretary shall submit a report to the ,committee on ,financial ,services of the ,house of ,representatives and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate that includes-- 7,a7 an analysis of the overall effectiveness of the ,program2 7,b7 an evaluation of any changes or trends in the data collected under paragraph 7#a72 7,c7 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 terrorism2 7,d7 an evaluation of the impact of the ,program on workers' compensation insurers2 7,e7 an evaluation of the impact on availability and affordability of terrorism insurance coverage and fiscal protection of the taxpayers of separate ,federal treatment under the ,program for nuclear1 biological1 chemical1 and radiological terrorism2 and 7,f7 in the case of the data reported in paragraph 7#a77;,b71 an updated estimate of the total amount earned since the commencement of ,program ,year #a4 7#c7 ,protection of data ,to the extent possible1 the ,secretary shall contract with an insurance statistical aggregator to collect the information described in paragraph 7#a71 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 information4 7#d7 ,advance coordination ,before collecting any data or information under paragraph 7#a7 from an insurer1 or affiliate of an insurer1 the ,secretary shall coordinate with the appropriate ,state insurance regulatory authorities or their representatives and any relevant government agency or publicly available sources to determine if the information to be collected is available from1 and may be obtained in a timely manner by1 individually or collectively1 such entities4 ,if the ,secretary determines that such data or information is available1 and may be obtained in a timely matter1 from such entities1 the ,secretary shall obtain the data or information from such entities4 ,if the ,secretary determines that such data or information is not so available1 the ,secretary may collect such data or information from an insurer and affiliates4 7#e7 ,confidentiality 7,a7 ,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 agencies1 the ,state insurance regulatory authorities and their collective agents1 or any other entities under this subsection shall not constitute a waiver of1 or otherwise affect1 any privilege arising under ,federal or ,state law 7including the rules of any ,federal or ,state court7 to which the data or information is otherwise subject4 7,b7 ,continued application of prior confidentiality agreements ,any requirement under ,federal or ,state law to the extent otherwise applicable1 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 ,secretary1 regarding the privacy or confidentiality of any data or information in the possession of the source to the ,secretary1 shall continue to apply to such data or information after the data or information has been provided pursuant to this subsection4 7,c7 ,information-sharing agreement ,any data or information obtained by the ,secretary under this subsection may be made available to ,state insurance regulatory authorities1 individually or collectively through an information-sharing agreement that-- 7i7 shall comply with applicable ,federal law2 and 7ii7 shall not constitute a waiver of1 or otherwise affect1 any privilege under ,federal or ,state law 7including any privilege referred to in subparagraph 7,a7 and the rules of any ,federal or ,state court7 to which the data or information is otherwise subject4 7,d7 ,agency disclosure requirements ,section #eeb of title #e1 ,united ,states ,code1 including any exceptions thereunder1 shall apply to any data or information submitted under this subsection to the ,secretary by an insurer or affiliate of an insurer4 4 #aaa4 ,delivery of notices to policyholders ,section #ajc7;b77#b7 7#ae ,u4,s4,c4 #fgja note7 is amended-- 7#a7 in subparagraph 7,b71 by striking 1 purchase12 and 7#b7 in subparagraph 7,c71 by striking 1 purchase14 #aab4 ,definition of control ,paragraph 7#c7 of section #ajb 7#ae ,u4,s4,c4 #fgja note7 is amended-- 7#a7 by redesignating subparagraphs 7,a71 7,b71 and 7,c7 as clauses 7i71 7ii71 and 7iii71 respectively and realigning such clauses1 as so redesignated1 so as to be indented six ems from the left margin2 7#b7 in the matter preceding clause 7i7 7as so redesignated71 by striking ,an entity has and inserting the following3 7,a7 ,in general ,an entity has 2 and 7#c7 by adding at the end the following new subparagraph3 7,b7 ,rule of construction ,an entity1 including any affiliate thereof1 does not have control over another entity if1 as of the date of the enactment of the ,,tria ,reform ,act of #bjad1 the entity is acting as an attorney-in-fact1 as defined by the ,secretary1 for the other entity and such other entity is a reciprocal insurer1 provided that the entity is not1 for reasons other than the attorney-in-fact relationship1 defined as having control under subparagraph 7,a74 4 #aac4 ,annual study of small insurer market competitiveness ,section #ajh 7#ae ,u4,s4,c4 #fgja note7 is amended by adding at the end the following new subsection3 7h7 ,study of small insurer market competitiveness 7#a7 ,in general ,the ,secretary shall conduct an annual study of small insurers participating in the ,program1 and identify any competitive challenges small insurers face in the terrorism risk insurance marketplace1 including-- 7,a7 changes to the market share1 premium volume1 and policyholder surplus of small insurers relative to large insurers2 7,b7 how the property and casualty insurance market for terrorism risk differs between small and large insurers1 and whether such a difference exists within other perils2 7,c7 the impact of the ,program's mandatory availability requirement under section #ajc7;c7 and the voluntary opt-out for small insurers2 7,d7 the effect of increasing the trigger amount for the ,program under section #ajc7;e77#a77;,b77iii77,i7 on small insurers2 7,e7 the availability and cost of private reinsurance for small insurers2 and 7,f7 the impact that ,state workers compensation laws have on small insurers1 particularly the impact of mandatory1 non-excludable participation and unlimited financial liability4 7#b7 ,timing and report ,the ,secretary shall complete the first study under paragraph 7#a7 and submit a report to the ,congress setting forth the findings and conclusions of the study not later than ,june #cj1 #bjaf1 and shall complete an annual study under paragraph 7#a7 and submit a report regarding such study to the ,congress by ,june #a annually thereafter4 4 #aad4 ,,cbo and ,,omb studies regarding budgeting for costs of ,federal insurance programs ,not later than the expiration of the #ab-month period beginning on the date of the enactment of this ,act1 the ,director of the ,congressional ,budget ,office and the ,director of the ,office of ,management and ,budget shall each-- 7#a7 conduct a study to determine the feasibility of applying accrual accounting concepts to budgeting for the costs of the ,terrorism ,risk ,insurance ,program and for the costs of the other ,federal insurance programs2 and 7#b7 submit a report regarding such study to the ,committees on the ,budget of the ,house of ,representatives and the ,senate1 which shall include a recommendation specifically addressing the feasibility of applying fair value concepts to budgeting for the costs of ,federal insurance programs1 including the ,terrorism ,risk ,insurance ,program4 #aae4 ,,gao study on upfront premiums and capital reserve fund 7a7 ,study ,not later than #b years after the date of the enactment of this ,act1 the ,comptroller ,general of the ,united ,states shall complete a study on the viability of the ,federal ,government-- 7#a7 assessing and collecting upfront premiums on insurers that participate in the ,terrorism ,risk ,insurance ,program established under the ,terrorism ,risk ,insurance ,act of #bjjb 7#ae ,u4,s4,c4 #fgja note7 7in this section referred to as the ,program71 which shall include a comparison of practices in international markets to assess and collect premiums either before or after terrorism losses are incurred2 and 7#b7 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 incurred1 which shall include a comparison of practices in international markets to establish reserve funds4 7b7 ,required content ,the study required under subsection 7a7 shall examine1 but shall not be limited to1 the following issues3 7#a7 ,upfront premiums ,with respect to upfront premiums described in subsection 7a77#a7-- 7,a7 how the ,federal ,government could determine the price of such upfront premiums on insurers that participate in the ,program2 7,b7 how the ,federal ,government could collect such upfront premiums2 7,c7 how the ,federal ,government could ensure that such upfront premiums are not spent for purposes other than satisfying claims through the ,program2 7,d7 how the assessment and collection of such upfront premiums could affect take-up rates for terrorism risk coverage in different regions and industries2 7,e7 the effect of collecting such upfront premiums on the private market for terrorism risk reinsurance2 and 7,f7 the size of the ,federal ,government subsidy insurers currently receive through their participation in the ,program4 7#b7 ,capital reserve fund ,with respect to the capital reserve fund described in subsection 7a77#b7-- 7,a7 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 purposes2 7,b7 how a capital reserve fund would impact insurers and reinsurers1 including liquidity1 insurance pricing1 and capacity to provide terrorism risk coverage2 7,c7 the feasibility of segregating funds attributable to terrorism risk from funds attributable to other insurance lines2 7,d7 how a capital reserve fund would be viewed and treated under current ,financial ,accounting ,standards ,board accounting rules and the tax laws2 and 7,e7 how a capital reserve fund would affect the ,states' ability to regulate insurers participating in the ,program4 7#c7 ,international practices ,with respect to international markets referred to in paragraphs 7#a7 and 7#b7 of subsection 7,a71 how other countries1 if any-- 7,a7 have established terrorism insurance structures2 7,b7 charge premiums or otherwise collect funds to pay for the costs of terrorism insurance structures1 including risk and administrative costs2 and 7,c7 have established capital reserve funds to pay for the costs of terrorism insurance structures4 7#d7 ,duration ,with respect to the capital reserve fund described in subsection 7a77#b71 how the duration of the ,program would affect the viability of such capital reserve fund4 7c7 ,report ,upon completion of the study required under subsection 7a71 the ,comptroller ,general shall submit a report on the results of such study to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives4 7d7 ,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 ,office4 ,,ii ,national ,association of ,registered ,agents and ,brokers ,reform #bja4 ,short title ,this title may be cited as the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjad4 #bjb4 ,reestablishment of the ,national ,association of ,registered ,agents and ,brokers 7a7 ,in general ,subtitle ,c of title ,,iii of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #fgea et seq47 is amended to read as follows3 ,c ,national ,association of ,registered ,agents and ,brokers #cba4 ,national ,association of ,registered ,agents and ,brokers 7a7 ,establishment ,there is established the ,national ,association of ,registered ,agents and ,brokers 7referred to in this subtitle as the ,association74 7b7 ,status ,the ,association shall-- 7#a7 be a nonprofit corporation2 7#b7 not be an agent or instrumentality of the ,federal ,government2 7#c7 be an independent organization that may not be merged with or into any other private or public entity2 and 7#d7 except as otherwise provided in this subtitle1 be subject to1 and have all the powers conferred upon1 a nonprofit corporation by the ,district of ,columbia ,nonprofit ,corporation ,act 7,d4,c4 ,code1 sec4 #bi-cja4ja et seq47 or any successor thereto4 #cbb4 ,purpose ,the purpose of the ,association shall be to provide a mechanism through which licensing1 continuing education1 and other nonresident insurance producer qualification requirements and conditions may be adopted and applied on a multi-state basis without affecting the laws1 rules1 and regulations1 and preserving the rights of a ,state1 pertaining to-- 7#a7 licensing1 continuing education1 and other qualification requirements of insurance producers that are not members of the ,association2 7#b7 resident or nonresident insurance producer appointment requirements2 7#c7 supervising and disciplining resident and nonresident insurance producers2 7#d7 establishing licensing fees for resident and nonresident insurance producers so that there is no loss of insurance producer licensing revenue to the ,state2 and 7#e7 prescribing and enforcing laws and regulations regulating the conduct of resident and nonresident insurance producers4 #cbc4 ,membership 7a7 ,eligibility 7#a7 ,in general ,any insurance producer licensed in its home ,state shall1 subject to paragraphs 7#b7 and 7#d71 be eligible to become a member of the ,association4 7#b7 ,ineligibility for suspension or revocation of license ,subject to paragraph 7#c71 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 ,state4 7#c7 ,resumption of eligibility ,paragraph 7#b7 shall cease to apply to any insurance producer if-- 7,a7 the ,state insurance regulator reissues or renews the license of the insurance producer in the ,state in which the license was suspended or revoked1 or otherwise terminates or vacates the suspension or revocation2 or 7,b7 the suspension or revocation expires or is subsequently overturned by a court of competent jurisdiction4 7#d7 ,criminal history record check required 7,a7 ,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 7,k74 7,b7 ,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 #b-year period preceding the date of submission of an application to become a member of the ,association1 in compliance with a requirement to undergo such criminal history record check as a condition for such licensure in the ,state1 shall be deemed to have undergone a criminal history record check for purposes of subparagraph 7,a74 7,c7 ,criminal history record check requested by ,association 7i7 ,in general ,the ,association shall1 upon request by an insurance producer licensed in a ,state1 submit fingerprints or other identification information obtained from the insurance producer1 and a request for a criminal history record check of the insurance producer1 to the ,federal ,bureau of ,investigation4 7ii7 ,procedures ,the board of directors of the ,association 7referred to in this subtitle as the ,board7 shall prescribe procedures for obtaining and utilizing fingerprints or other identification information and criminal history record information1 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 information4 ,any fees charged pursuant to this clause shall be separate and distinct from those charged by the ,attorney ,general pursuant to subparagraph 7,i74 7,d7 ,form of request ,a submission under subparagraph 7,c77i7 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 requested1 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 information4 7,e7 ,provision of information by ,attorney ,general ,upon receiving a submission under subparagraph 7,c77i7 from the ,association1 the ,attorney ,general shall search all criminal history records of the ,federal ,bureau of ,investigation1 including records of the ,criminal ,justice ,information ,services ,division of the ,federal ,bureau of ,investigation1 that the ,attorney ,general determines appropriate for criminal history records corresponding to the fingerprints or other identification information provided under subparagraph 7,d7 and provide all criminal history record information included in the request to the ,association4 7,f7 ,limitation on permissible uses of information ,any information provided to the ,association under subparagraph 7,e7 may only-- 7i7 be used for purposes of determining compliance with membership criteria established by the ,association2 7ii7 be disclosed to ,state insurance regulators1 or ,federal or ,state law enforcement agencies1 in conformance with applicable law2 or 7iii7 be disclosed1 upon request1 to the insurance producer to whom the criminal history record information relates4 7,g7 ,penalty for improper use or disclosure ,whoever knowingly uses any information provided under subparagraph 7,e7 for a purpose not authorized in subparagraph 7,f71 or discloses any such information to anyone not authorized to receive it1 shall be fined not more than #ej1jjj per violation as determined by a court of competent jurisdiction4 7,h7 ,reliance on information ,neither the ,association nor any of its ,board members1 officers1 or employees shall be liable in any action for using information provided under subparagraph 7,e7 as permitted under subparagraph 7,f7 in good faith and in reasonable reliance on its accuracy4 7,i7 ,fees ,the ,attorney ,general may charge a reasonable fee for conducting the search and providing the information under subparagraph 7,e71 and any such fee shall be collected and remitted by the ,association to the ,attorney ,general4 7,j7 ,rule of construction ,nothing in this paragraph shall be construed as-- 7i7 requiring a ,state insurance regulator to perform criminal history record checks under this section2 or 7ii7 limiting any other authority that allows access to criminal history records4 7,k7 ,regulations ,the ,attorney ,general shall prescribe regulations to carry out this paragraph1 which shall include-- 7i7 appropriate protections for ensuring the confidentiality of information provided under subparagraph 7,e72 and 7ii7 procedures providing a reasonable opportunity for an insurance producer to contest the accuracy of information regarding the insurance producer provided under subparagraph 7,e74 7,l7 ,ineligibility for membership 7i7 ,in general ,the ,association may1 under reasonably consistently applied standards1 deny membership to an insurance producer on the basis of criminal history record information provided under subparagraph 7,e71 or where the insurance producer has been subject to disciplinary action1 as described in paragraph 7#b74 7ii7 ,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 7,e7 of the right of the insurance producer to-- 7,i7 obtain a copy of all criminal history record information provided to the ,association under subparagraph 7,e7 with respect to the insurance producer2 and 7,,ii7 challenge the denial of membership based on the accuracy and completeness of the information4 7,m7 ,definition ,for purposes of this paragraph1 the term criminal history record check means a national background check of criminal history records of the ,federal ,bureau of ,investigation4 7b7 ,authority to establish membership criteria ,the ,association may establish membership criteria that bear a reasonable relationship to the purposes for which the ,association was established4 7c7 ,establishment of classes and categories of membership 7#a7 ,classes of membership ,the ,association may establish separate classes of membership1 with separate criteria1 if the ,association reasonably determines that performance of different duties requires different levels of education1 training1 experience1 or other qualifications4 7#b7 ,business entities ,the ,association shall establish a class of membership and membership criteria for business entities4 ,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 laws1 standards1 and regulations of any ,state in which the business entity seeks to do business on the basis of ,association membership4 7#c7 ,categories 7,a7 ,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 class1 based on the types of licensing categories that exist under ,state laws4 7,b7 ,separate treatment for depository institutions prohibited ,no special categories of membership1 and no distinct membership criteria1 shall be established for members that are depository institutions or for employees1 agents1 or affiliates of depository institutions4 7d7 ,membership criteria 7#a7 ,in general ,the ,association may establish criteria for membership which shall include standards for personal qualifications1 education1 training1 and experience4 ,the ,association shall not establish criteria that unfairly limit the ability of a small insurance producer to become a member of the ,association1 including imposing discriminatory membership fees4 7#b7 ,qualifications ,in establishing criteria under paragraph 7#a71 the ,association shall not adopt any qualification less protective to the public than that contained in the ,national ,association of ,insurance ,commissioners 7referred to in this subtitle as the ,,naic7 ,producer ,licensing ,model ,act in effect as of the date of enactment of the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjac1 and shall consider the highest levels of insurance producer qualifications established under the licensing laws of the ,states4 7#c7 ,assistance from ,states 7,a7 ,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 ,association4 7,b7 ,authorization of information sharing ,a submission under subsection 7a77#d77;,c77i7 made by an insurance producer licensed in a ,state shall include a statement signed by the person about whom the assistance is requested authorizing-- 7i7 the ,state to share information with the ,association2 and 7ii7 the ,association to receive the information4 7,c7 ,rule of construction ,subparagraph 7,a7 shall not be construed as requiring or authorizing any ,state to adopt new or additional requirements concerning the licensing or evaluation of insurance producers4 7#d7 ,denial of membership ,the ,association may1 based on reasonably consistently applied standards1 deny membership to any ,state-licensed insurance producer for failure to meet the membership criteria established by the ,association4 7e7 ,effect of membership 7#a7 ,authority of association members ,membership in the ,association shall-- 7,a7 authorize an insurance producer to sell1 solicit1 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 producer1 and exercise all such incidental powers as shall be necessary to carry out such activities1 including claims adjustments and settlement to the extent permissible under the laws of the ,state1 risk management1 employee benefits advice1 retirement planning1 and any other insurance-related consulting activities2 7,b7 be the equivalent of a nonresident insurance producer license for purposes of authorizing the insurance producer to engage in the activities described in subparagraph 7,a7 in any ,state where the member pays the licensing fee2 and 7,c7 be the equivalent of a nonresident insurance producer license for the purpose of subjecting an insurance producer to all laws1 regulations1 provisions or other action of any ,state concerning revocation1 suspension1 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 laws1 regulations1 provisions1 and actions preserved under paragraph 7#e74 7#b7 ,violent ,crime ,control and ,law ,enforcement ,act of #aiid ,nothing in this subtitle shall be construed to alter1 modify1 or supercede any requirement established by section #ajcc of title #ah1 ,united ,states ,code4 7#c7 ,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 7#a74 7#d7 ,notification of action 7,a7 ,in general ,the ,association shall notify the ,states 7including ,state insurance regulators7 and the ,,naic when an insurance producer has satisfied the membership criteria of this section4 ,the ,states 7including ,state insurance regulators7 shall have #aj 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 ,association4 7,b7 ,ongoing disclosures required ,on an ongoing basis1 the ,association shall disclose to the ,states 7including ,state insurance regulators7 and the ,,naic a list of the ,states in which each member is authorized to operate4 ,the ,association shall immediately notify the ,states 7including ,state insurance regulators7 and the ,,naic when a member is newly authorized to operate in one or more ,states1 or is no longer authorized to operate in one or more ,states on the basis of ,association membership4 7#e7 ,preservation of consumer protection and market conduct regulation 7,a7 ,in general ,no provision of this section shall be construed as altering or affecting the applicability or continuing effectiveness of any law1 regulation1 provision1 or other action of any ,state1 including those described in subparagraph 7,b71 to the extent that the ,state law1 regulation1 provision1 or other action is not inconsistent with the provisions of this subtitle related to market entry for nonresident insurance producers1 and then only to the extent of the inconsistency4 7,b7 ,preserved regulations ,the laws1 regulations1 provisions1 or other actions of any ,state referred to in subparagraph 7,a7 include laws1 regulations1 provisions1 or other actions that-- 7i7 regulate market conduct1 insurance producer conduct1 or unfair trade practices2 7ii7 establish consumer protections2 or 7iii7 require insurance producers to be appointed by a licensed or authorized insurer4 7f7 ,biennial renewal ,membership in the ,association shall be renewed on a biennial basis4 7g7 ,continuing education 7#a7 ,in general ,the ,association shall establish1 as a condition of membership1 continuing education requirements which shall be comparable to the continuing education requirements under the licensing laws of a majority of the ,states4 7#b7 ,state continuing education requirements ,a member may not be required to satisfy continuing education requirements imposed under the laws1 regulations1 provisions1 or actions of any ,state other than the home ,state of the member4 7#c7 ,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 period4 7#d7 ,limitation on the ,association ,the ,association shall not directly or indirectly offer any continuing education courses for insurance producers4 7h7 ,probation1 suspension and revocation 7#a7 ,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 ,association1 or assess monetary fines or penalties1 as the ,association determines to be appropriate1 if-- 7,a7 the insurance producer fails to meet the applicable membership criteria or other standards established by the ,association2 7,b7 the insurance producer has been subject to disciplinary action pursuant to a final adjudicatory proceeding under the jurisdiction of a ,state insurance regulator2 7,c7 an insurance license held by the insurance producer has been suspended or revoked by a ,state insurance regulator2 or 7,d7 the insurance producer has been convicted of a crime that would have resulted in the denial of membership pursuant to subsection 7a77#d77,l77i7 at the time of application1 and the ,association has received a copy of the final disposition from a court of competent jurisdiction4 7#b7 ,violations of ,association standards ,the ,association shall have the power to investigate alleged violations of ,association standards4 7#c7 ,reporting ,the ,association shall immediately notify the ,states 7including ,state insurance regulators7 and the ,,naic when the membership of an insurance producer has been placed on probation or has been suspended1 revoked1 or otherwise terminated1 or when the ,association has assessed monetary fines or penalties4 7i7 ,consumer complaints 7#a7 ,in general ,the ,association shall-- 7,a7 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 and1 when appropriate1 to any additional ,state insurance regulator1 as determined by standards adopted by the ,association2 and 7,b7 make any related records and information available to each ,state insurance regulator to whom the complaint is forwarded4 7#b7 ,telephone and other access ,the ,association shall maintain a toll-free number for purposes of this subsection and1 as practicable1 other alternative means of communication with consumers1 such as an ,internet webpage4 7#c7 ,final disposition of investigation ,state insurance regulators shall provide the ,association with information regarding the final disposition of a complaint referred pursuant to paragraph 7#a77;,a71 but nothing shall be construed to compel a ,state to release confidential investigation reports or other information protected by ,state law to the ,association4 7j7 ,information sharing ,the ,association may-- 7#a7 share documents1 materials1 or other information1 including confidential and privileged documents1 with a ,state1 ,federal1 or international governmental entity or with the ,,naic or other appropriate entity referred to paragraphs 7#c7 and 7#d71 provided that the recipient has the authority and agrees to maintain the confidentiality or privileged status of the document1 material1 or other information2 7#b7 limit the sharing of information as required under this subtitle with the ,,naic or any other non-governmental entity1 in circumstances under which the ,association determines that the sharing of such information is unnecessary to further the purposes of this subtitle2 7#c7 establish a central clearinghouse1 or utilize the ,,naic or another appropriate entity1 as determined by the ,association1 as a central clearinghouse1 for use by the ,association and the ,states 7including ,state insurance regulators71 through which members of the ,association may disclose their intent to operate in #a or more ,states and pay the licensing fees to the appropriate ,states2 and 7#d7 establish a database1 or utilize the ,,naic or another appropriate entity1 as determined by the ,association1 as a database1 for use by the ,association and the ,states 7including ,state insurance regulators7 for the collection of regulatory information concerning the activities of insurance producers4 7k7 ,effective ,date ,the provisions of this section shall take effect on the later of-- 7#a7 the expiration of the #b-year period beginning on the date of enactment of the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjac2 and 7#b7 the date of incorporation of the ,association4 #cbd4 ,board of directors 7a7 ,establishment ,there is established a board of directors of the ,association1 which shall have authority to govern and supervise all activities of the ,association4 7b7 ,powers ,the ,board shall have such of the powers and authority of the ,association as may be specified in the bylaws of the ,association4 7c7 ,composition 7#a7 ,in general ,the ,board shall consist of #ac members who shall be appointed by the ,president1 by and with the advice and consent of the ,senate1 in accordance with the procedures established under ,senate ,resolution #aaf of the #aabth ,congress1 of whom-- 7,a7 #h shall be ,state insurance commissioners appointed in the manner provided in paragraph 7#b71 #a 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 ,board2 7,b7 #c shall have demonstrated expertise and experience with property and casualty insurance producer licensing2 and 7,c7 #b shall have demonstrated expertise and experience with life or health insurance producer licensing4 7#b7 ,state insurance regulator representatives 7,a7 ,recommendations ,before making any appointments pursuant to paragraph 7#a77;,a71 the ,president shall request a list of recommended candidates from the ,states through the ,,naic1 which shall not be binding on the ,president4 ,if the ,,naic fails to submit a list of recommendations not later than #ae business days after the date of the request1 the ,president may make the requisite appointments without considering the views of the ,,naic4 7,b7 ,political affiliation ,not more than #d ,board members appointed under paragraph 7#a77;,a7 shall belong to the same political party4 7,c7 ,former ,state insurance commissioners 7i7 ,in general ,if1 after offering each currently serving ,state insurance commissioner an appointment to the ,board1 fewer than #h ,state insurance commissioners have accepted appointment to the ,board1 the ,president may appoint the remaining ,state insurance commissioner ,board members1 as required under paragraph 7#a77;,a71 of the appropriate political party as required under subparagraph 7,b71 from among individuals who are former ,state insurance commissioners4 7ii7 ,limitation ,a former ,state insurance commissioner appointed as described in clause 7i7 may not be employed by or have any present direct or indirect financial interest in any insurer1 insurance producer1 or other entity in the insurance industry1 other than direct or indirect ownership of1 or beneficial interest in1 an insurance policy or annuity contract written or sold by an insurer4 7,d7 ,service through term ,if a ,board member appointed under paragraph 7#a77;,a7 ceases to be a ,state insurance commissioner during the term of the ,board member1 the ,board member shall cease to be a ,board member4 7#c7 ,private sector representatives ,in making any appointment pursuant to subparagraph 7,b7 or 7,c7 of paragraph 7#a71 the ,president may seek recommendations for candidates from groups representing the category of individuals described1 which shall not be binding on the ,president4 7#d7 ,state insurance commissioner defined ,for purposes of this subsection1 the term ,state insurance commissioner means a person who serves in the position in ,state government1 or on the board1 commission1 or other body that is the primary insurance regulatory authority for the ,state4 7d7 ,terms 7#a7 ,in general ,except as provided under paragraph 7#b71 the term of service for each ,board member shall be #b years4 7#b7 ,exceptions 7,a7 #a-year terms ,the term of service shall be #a year1 as designated by the ,president at the time of the nomination of the subject ,board members for-- 7i7 #d of the ,state insurance commissioner ,board members initially appointed under paragraph 7#a77;,a71 of whom not more than #b shall belong to the same political party2 7ii7 #a of the ,board members initially appointed under paragraph 7#a77;,b72 and 7iii7 #a of the ,board members initially appointed under paragraph 7#a77;,c74 7,b7 ,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 #b years or until a successor is appointed4 7,c7 ,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 term4 7#c7 ,successive terms ,board members may be reappointed to successive terms4 7e7 ,initial appointments ,the appointment of initial ,board members shall be made no later than #ij days after the date of enactment of the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjad4 7f7 ,meetings 7#a7 ,in general ,the ,board shall meet-- 7,a7 at the call of the chairperson2 7,b7 as requested in writing to the chairperson by not fewer than #e ,board members2 or 7,c7 as otherwise provided by the bylaws of the ,association4 7#b7 ,quorum required ,a majority of all ,board members shall constitute a quorum4 7#c7 ,voting ,decisions of the ,board shall require the approval of a majority of all ,board members present at a meeting1 a quorum being present4 7#d7 ,initial meeting ,the ,board shall hold its first meeting not later than #de days after the date on which all initial ,board members have been appointed4 7g7 ,restriction on confidential information ,board members appointed pursuant to subparagraphs 7,b7 and 7,c7 of subsection 7c77#a7 shall not have access to confidential information received by the ,association in connection with complaints1 investigations1 or disciplinary proceedings involving insurance producers4 7h7 ,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 officers1 employees1 agents1 or consultants4 ,the code shall1 at a minimum1 include provisions that prohibit any ,board member or ,association officer1 employee1 agent or consultant from-- 7#a7 engaging in unethical conduct in the course of performing ,association duties2 7#b7 participating in the making or influencing the making of any ,association decision1 the outcome of which the ,board member1 officer1 employee1 agent1 or consultant knows or had reason to know would have a reasonably foreseeable material financial effect1 distinguishable from its effect on the public generally1 on the person or a member of the immediate family of the person2 7#c7 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 ,association2 7#d7 making political contributions to any person or entity on behalf of the ,association2 and 7#e7 lobbying or paying a person to lobby on behalf of the ,association4 7i7 ,compensation 7#a7 ,in general ,except as provided in paragraph 7#b71 no ,board member may receive any compensation from the ,association or any other person or entity on account of ,board membership4 7#b7 ,travel expenses and per diem ,board members may be reimbursed only by the ,association for travel expenses1 including per diem in lieu of subsistence1 at rates consistent with rates authorized for employees of ,federal agencies under subchapter ,i of chapter #eg of title #e1 ,united ,states ,code1 while away from home or regular places of business in performance of services for the ,association4 #cbe4 ,bylaws1 standards1 and disciplinary actions 7a7 ,adoption and amendment of bylaws and standards 7#a7 ,procedures ,the ,association shall adopt procedures for the adoption of bylaws and standards that are similar to procedures under subchapter ,,ii of chapter #e of title #e1 ,united ,states ,code 7commonly known as the ,administrative ,procedure ,act74 7#b7 ,copy required to be filed ,the ,board shall submit to the ,president1 through the ,department of the ,treasury1 and the ,states 7including ,state insurance regulators71 and shall publish on the website of the ,association1 all proposed bylaws and standards of the ,association1 or any proposed amendment to the bylaws or standards of the ,association1 accompanied by a concise general statement of the basis and purpose of such proposal4 7#c7 ,effective date ,any proposed bylaw or standard of the ,association1 and any proposed amendment to the bylaws or standards of the ,association1 shall take effect1 after notice under paragraph 7#b7 and opportunity for public comment1 on such date as the ,association may designate1 unless suspended under section #cbi7;c74 7#d7 ,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 #e of title #e1 ,united ,states ,code 7commonly known as the ,administrative ,procedure ,act74 7b7 ,disciplinary action by the ,association 7#a7 ,specification of charges ,in any proceeding to determine whether membership shall be denied1 suspended1 revoked1 or not renewed1 or to determine whether a member of the ,association should be placed on probation 7referred to in this section as a disciplinary action7 or whether to assess fines or monetary penalties1 the ,association shall bring specific charges1 notify the member of the charges1 give the member an opportunity to defend against the charges1 and keep a record4 7#b7 ,supporting statement ,a determination to take disciplinary action shall be supported by a statement setting forth-- 7,a7 any act or practice in which the member has been found to have been engaged2 7,b7 the specific provision of this subtitle or standard of the ,association that any such act or practice is deemed to violate2 and 7,c7 the sanction imposed and the reason for the sanction4 7#c7 ,ineligibility of private sector representatives ,board members appointed pursuant to section #cbd7;c77#c7 may not-- 7,a7 participate in any disciplinary action or be counted toward establishing a quorum during a disciplinary action2 and 7,b7 have access to confidential information concerning any disciplinary action4 #cbf4 ,powers ,in addition to all the powers conferred upon a nonprofit corporation by the ,district of ,columbia ,nonprofit ,corporation ,act1 the ,association shall have the power to-- 7#a7 establish and collect such membership fees as the ,association finds necessary to impose to cover the costs of its operations2 7#b7 adopt1 amend1 and repeal bylaws1 procedures1 or standards governing the conduct of ,association business and performance of its duties2 7#c7 establish procedures for providing notice and opportunity for comment pursuant to section #cbe7;a72 7#d7 enter into and perform such agreements as necessary to carry out the duties of the ,association2 7#e7 hire employees1 professionals1 or specialists1 and elect or appoint officers1 and to fix their compensation1 define their duties and give them appropriate authority to carry out the purposes of this subtitle1 and determine their qualification2 7#f7 establish personnel policies of the ,association and programs relating to1 among other things1 conflicts of interest1 rates of compensation1 where applicable1 and qualifications of personnel2 7#g7 borrow money2 and 7#h7 secure funding for such amounts as the ,association determines to be necessary and appropriate to organize and begin operations of the ,association1 which shall be treated as loans to be repaid by the ,association with interest at market rate4 #cbg4 ,report by the ,association 7a7 ,in general ,as soon as practicable after the close of each fiscal year1 the ,association shall submit to the ,president1 through the ,department of the ,treasury1 and the ,states 7including ,state insurance regulators71 and shall publish on the website of the ,association1 a written report regarding the conduct of its business1 and the exercise of the other rights and powers granted by this subtitle1 during such fiscal year4 7b7 ,financial statements ,each report submitted under subsection 7a7 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 7including the source and application of its funds7 for such fiscal year4 #cbh4 ,liability of the ,association and the ,board members1 officers1 and employees of the ,association 7a7 ,in general ,the ,association shall not be deemed to be an insurer or insurance producer within the meaning of any ,state law1 rule1 regulation1 or order regulating or taxing insurers1 insurance producers1 or other entities engaged in the business of insurance1 including provisions imposing premium taxes1 regulating insurer solvency or financial condition1 establishing guaranty funds and levying assessments1 or requiring claims settlement practices4 7b7 ,liability of ,board members1 officers1 and employees ,no ,board member1 officer1 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 ,association4 #cbi4 ,presidential oversight 7a7 ,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 subtitle1 the ,president may remove the entire existing ,board for the remainder of the term to which the ,board members were appointed and appoint1 in accordance with section #cbd and with the advice and consent of the ,senate1 in accordance with the procedures established under ,senate ,resolution #aaf of the #aabth ,congress1 new ,board members to fill the vacancies on the ,board for the remainder of the terms4 7b7 ,removal of ,board member ,the ,president may remove a ,board member only for neglect of duty or malfeasance in office4 7c7 ,suspension of bylaws and standards and prohibition of actions ,following notice to the ,board1 the ,president1 or a person designated by the ,president for such purpose1 may suspend the effectiveness of any bylaw or standard1 or prohibit any action1 of the ,association that the ,president or the designee determines is contrary to the purposes of this subtitle4 #ccj4 ,relationship to ,state law 7a7 ,preemption of ,state laws ,state laws1 regulations1 provisions1 or other actions purporting to regulate insurance producers shall be preempted to the extent provided in subsection 7b74 7b7 ,prohibited actions 7#a7 ,in general ,no ,state shall-- 7,a7 impede the activities of1 take any action against1 or apply any provision of law or regulation arbitrarily or discriminatorily to1 any insurance producer because that insurance producer or any affiliate plans to become1 has applied to become1 or is a member of the ,association2 7,b7 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 ,association2 or 7,c7 impose any continuing education requirements on any nonresident insurance producer that is a member of the ,association4 7#b7 ,states other than a home ,state ,no ,state1 other than the home ,state of a member of the ,association1 shall-- 7,a7 impose any licensing1 personal or corporate qualifications1 education1 training1 experience1 residency1 continuing education1 or bonding requirement upon a member of the ,association that is different from the criteria for membership in the ,association or renewal of such membership2 7,b7 impose any requirement upon a member of the ,association that it be licensed1 registered1 or otherwise qualified to do business or remain in good standing in the ,state1 including any requirement that the insurance producer register as a foreign company with the secretary of state or equivalent ,state official2 7,c7 require that a member of the ,association submit to a criminal history record check as a condition of doing business in the ,state2 or 7,d7 impose any licensing1 registration1 or appointment requirements upon a member of the ,association1 or require a member of the ,association to be authorized to operate as an insurance producer1 in order to sell1 solicit1 or negotiate insurance for commercial property and casualty risks to an insured with risks located in more than one ,state1 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 ,state4 7#c7 ,preservation of ,state disciplinary authority ,nothing in this section may be construed to prohibit a ,state from investigating and taking appropriate disciplinary action1 including suspension or revocation of authority of an insurance producer to do business in a ,state1 in accordance with ,state law and that is not inconsistent with the provisions of this section1 against a member of the ,association as a result of a complaint or for any alleged activity1 regardless of whether the activity occurred before or after the insurance producer commenced doing business in the ,state pursuant to ,association membership4 #cca4 ,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 ,authority1 consistent with the requirements of this subtitle and the ,federal securities laws4 #ccb4 ,right of action 7a7 ,right of action ,any person aggrieved by a decision or action of the ,association may1 after reasonably exhausting available avenues for resolution within the ,association1 commence a civil action in an appropriate ,united ,states district court1 and obtain all appropriate relief4 7b7 ,association interpretations ,in any action under subsection 7a71 the court shall give appropriate weight to the interpretation of the ,association of its bylaws and standards and this subtitle4 #ccc4 ,federal funding prohibited ,the ,association may not receive1 accept1 or borrow any amounts from the ,federal ,government to pay for1 or reimburse1 the ,association for1 the costs of establishing or operating the ,association4 #ccd4 ,definitions ,for purposes of this subtitle1 the following definitions shall apply3 7#a7 ,business entity ,the term business entity means a corporation1 association1 partnership1 limited liability company1 limited liability partnership1 or other legal entity4 7#b7 ,depository institution ,the term depository institution has the meaning as in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#c7 ,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 producer4 7#d7 ,insurance ,the term insurance means any product1 other than title insurance or bail bonds1 defined or regulated as insurance by the appropriate ,state insurance regulatory authority4 7#e7 ,insurance producer ,the term insurance producer means any insurance agent or broker1 excess or surplus lines broker or agent1 insurance consultant1 limited insurance representative1 and any other individual or entity that sells1 solicits1 or negotiates policies of insurance or offers advice1 counsel1 opinions or services related to insurance4 7#f7 ,insurer ,the term insurer has the meaning as in section #cac7;e77#b77;,b7 of title #ca1 ,united ,states ,code4 7#g7 ,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 and1 in the case of a business entity1 where high-level officers of the entity direct1 control1 and coordinate the business activities of the business entity4 7#h7 ,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 year4 7#i7 ,state ,the term ,state includes any ,state1 the ,district of ,columbia1 any territory of the ,united ,states1 and ,puerto ,rico1 ,guam1 ,american ,samoa1 the ,trust ,territory of the ,pacific ,islands1 the ,virgin ,islands1 and the ,northern ,mariana ,islands4 7#aj7 ,state law 7,a7 ,in general ,the term ,state law includes all laws1 decisions1 rules1 regulations1 or other ,state action having the effect of law1 of any ,state4 7,b7 ,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 ,states4 4 7b7 ,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 items3 ,subtitle ,c--,national ,association of ,registered ,agents and ,brokers ,sec4 #cba4 ,national ,association of ,registered ,agents and ,brokers4 ,sec4 #cbb4 ,purpose4 ,sec4 #cbc4 ,membership4 ,sec4 #cbd4 ,board of directors4 ,sec4 #cbe4 ,bylaws1 standards1 and disciplinary actions4 ,sec4 #cbf4 ,powers4 ,sec4 #cbg4 ,report by the ,association4 ,sec4 #cbh4 ,liability of the ,association and the ,board members1 officers1 and employees of the ,association4 ,sec4 #cbi4 ,presidential oversight4 ,sec4 #ccj4 ,relationship to ,state law4 ,sec4 #cca4 ,coordination with financial industry regulatory authority4 ,sec4 #ccb4 ,right of action4 ,sec4 #ccc4 ,federal funding prohibited4 ,sec4 #ccd4 ,definitions4 4 ,july #af1 #bjad ,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed