National Insurance Act of 2007

In general

The Commissioner of National Insurance shall be appointed by the President, by and with the advice and consent of the Senate, from among individuals who are citizens of the United States.

Term

The Commissioner shall be appointed for a term of 5 years.

Vacancy

A vacancy in the position of the Commissioner, which occurs before the expiration of the term for which the Commissioner was appointed shall be filled in the manner established under paragraph (1). The Commissioner appointed to fill the vacancy shall be appointed only for the remainder of the term of the preceding Commissioner.

Service after term

An individual may serve as the Commissioner after the expiration of the term for which appointed until the earlier of—

Prohibition on financial interests

The Commissioner may not have a direct or indirect financial interest in any national insurer, national agency, or other federally licensed insurance producer, except that the Commissioner may own, directly or indirectly, or may have a direct or indirect beneficial interest in any insurance policy written or sold by a national insurer or national agency.

Oversight

The Commissioner shall be subject to the general oversight of the Secretary of the Treasury, who may not intervene in any matter or proceeding before the Commissioner unless otherwise specifically provided by law.

Executive schedule

In general

Rulemaking

Litigation authority

Consultation with state insurance regulators

The Commissioner may, as appropriate, consult with State insurance regulators responsible for the supervision of States insurers, State insurance agencies, and State licensed insurance producers regarding regulatory and supervisory matters of common interest.

International coordination and cooperation

Independence in congressional testimony and recommendations

Section 111 of Public Law 93–495 (12 U.S.C. 250) is amended by inserting the Commissioner of National Insurance, after the Director of the Office of Thrift Supervision,.

Employees and others

Unless otherwise prohibited by this Act, the Commissioner may delegate to any employee, representative, or agent any power of the Commissioner.

Self-regulatory organizations

Unless otherwise prohibited by this Act, the Commissioner may, by regulation, delegate to any insurance self-regulatory organization any power of the Commissioner in accordance with the terms of section 1106.

provide for the registration of an insurance self-regulatory organization; and

supervise and regulate any registered insurance self-regulatory organization, which shall include the authority to—

carry out the purpose of this Act; and

enforce compliance by its members with the provisions of this Act, applicable regulations issued by the Commissioner, and the rules of the organization.

national insurers;

national agencies;

federally licensed insurance producers; or

any combination of national insurers, national agencies, and federally licensed insurance producers.

the procedures insurance self-regulatory organizations must follow to be registered by the Commissioner, which shall provide for public notice and an opportunity for public comment on the proposed registration;

the standards that the Commissioner shall apply in reviewing a proposed registration, which shall require an insurance self-regulatory organization to demonstrate that—

the procedures and standards the Commissioner shall follow in reviewing, approving, abrogating, or modifying any new operating rule or any amendment to an existing operating rule that is proposed by an insurance self-regulatory organization, which shall include procedures for public notice and comment on such rule or amendment;

the procedures and standards the Commissioner shall follow in abrogating, modifying, or adding to the operating rules of an insurance self-regulatory organization;

the procedures and standards the Commissioner shall follow in reviewing, approving, abrogating, or modifying any disciplinary action by an insurance self-regulatory organization;

the procedures and standards the Commissioner shall follow in removing, suspending, or baring any individual from serving as an officer or director of an insurance self-regulatory organization;

the procedures and standards the Commissioner shall follow in suspending or revoking the registration of an insurance self-regulatory organization; and

such other matters as the Commissioner determines appropriate to ensure and protect the public interest and the interests of policyholders.

In general

The Ombudsman shall act as a liaison between the Office and any regulated person adversely affected by the supervisory or regulatory activities of the Office, including the failure of the Office to take a requested action. The Ombudsman shall assure that safeguards exist to encourage complainants to come forward and preserve confidentiality.

Definition

For purposes of this section the term, a regulated person means a national insurer, a national agency, a federally licensed insurance producer, or an insurer-affiliated party.

with the prior consent of the Commissioner, may stay any appealable decision or action during the resolution of an appealable matter; and

shall review and report any weakness in policy or procedures to the Commissioner, and make recommendations to the Commissioner regarding changes in such policies or procedures.

the appointment of a receiver or conservator;

any preliminary examination conclusions communicated to the regulated person before a final examination report is issued;

any formal enforcement-related action or decision, including the issuance of a cease-and-desist order, assessment of a civil money penalty, or commencement of a formal investigation;

any formal or informal rulemaking pursuant to subchapter II of chapter 5 of title 5, United States Code;

any decision or recommended decision following a formal adjudication conducted pursuant to subchapter II of chapter 5 of title 5, United States Code; or

any request for agency records pursuant to section 552 of title 5, United States Code (commonly referred to as the Freedom of Information Act).

Examination

The Commissioner shall provide for examinations of national insurers and national agencies.

Regular and special examinations of national insurers

Not less than once during each 36-month period, the Commissioner shall conduct an on-site examination of each national insurer, and may conduct a special examination of a national insurer whenever the Commissioner determines that a special examination is necessary.

Examination of national agencies

The Commissioner may examine a national agency in response to a complaint or any other evidence that the national agency has violated or is about to violate—

Affiliates

In general

In the course of examining a national insurer, national agency, or affiliate of a national insurer or national agency, the Commissioner, upon request, shall be given prompt and reasonable access to officers, employees, agents, books, records, and documents of such insurer, agency, or affiliate.

Court order

If prompt and reasonable access is not given as required under paragraph (1), the Commissioner may apply to the United States district court for the judicial district in which the main office of the national insurer or the national agency is located, or in which the affiliate or person denying such access resides or conducts business, for an order requiring that such information be promptly provided.

Subpoena power

In connection with examinations of national insurers, national agencies, or affiliates under this section and the examination of federally licensed insurance producers under section 1301, the Commissioner may—

national insurers, national agencies, and federally licensed insurance producers

The Commissioner shall assess the cost of conducting examinations of national insurers, national agencies, and federally licensed insurance producers against each such insurer, agency, or producer, as the Commissioner determines to be appropriate.

Affiliates

The Commissioner shall assess the cost of conducting examinations of affiliates against each such affiliate, as the Commissioner determines to be appropriate.

Refusal to pay

the initial fees and assessments imposed under this section; and

any change in fees and assessments.

Deposits

Amounts received by the Commissioner from fees and assessments imposed under this section shall be deposited in the manner provided for in section 5234 of the Revised Statutes of the United States (12 U.S.C. 192) with respect to assessments by the Comptroller of the Currency.

Government funds; apportionment

Notwithstanding any other provision of law, amounts received by the Commissioner from any fee or assessment imposed under this section—

In general

The Commissioner may impose fees and assessments pursuant to subsections (a), (b), and (c), in excess of actual expenses for any given year, to maintain an appropriate working capital fund.

Refunds

The Commissioner shall remit to the payers of such fees and assessments any funds collected in excess of what the Commissioner determines to be necessary to maintain such working capital fund.

Authorization

The Commissioner may borrow from the Secretary of the Treasury such funds as the Commissioner determines to be necessary and appropriate to organize and begin operations of the Office.

Payment

Any loan extended pursuant to paragraph (1) shall be repaid, in full (with interest at a rate set by the Secretary of the Treasury), within 30 years following the date of enactment of this Act, with individual payments on any loan to be made in such amounts and at such times as the Commissioner determines to be appropriate.

specify the information that shall be disclosed in the financial statements required under subsection (b); and

specify any additional financial schedules that national insurers shall make available for examination by the Commissioner upon request.

the sale, solicitation, or negotiation of insurance;

the underwriting of insurance; or

any other insurance operations.

applicable State unclaimed property and escheat laws;

applicable tax laws of a State, in accordance with sections 1251, 1252, and 1253;

applicable State law relating to participation in an assigned risk plan, mandatory joint underwriting association, or any other mandatory residual market mechanism designed to make insurance available to those unable to obtain insurance in the voluntary market, except to the extent that such State law—

applicable State insurance law that prescribes the compulsory coverage requirements for workers’ compensation or motor vehicle insurance, or both, that every insurer must provide if the insurer issues insurance policies in such State, except to the extent that such State law requires a national insurer to use any particular rate, rating element, price, or form;

applicable State insurance law mandating the participation of insurers in an advisory or statistical organization, except to the extent that such State law requires a national insurer to use any particular rate, rating element, price, or form; and

applicable State law relating to participation in a workers’ compensation administration mechanism, except to the extent that such State law is inconsistent with any provision of this Act.

advisory or statistical organization does not include the National Association of Insurance Commissioners;

compulsory coverage does not include any State statutory requirement other than those prescribing the minimum extent of insurance protection afforded by a policy of insurance; and

mandatory residual market means a facility, entity, or plan required by and established pursuant to State law to provide coverage for persons that cannot obtain insurance in the private market.

photographed or microphotographed or otherwise reproduced upon film; or

preserved in any electronic medium or format which is capable of—

has failed to establish and maintain the procedures described in subsection (a); or

has failed to correct any problem with the procedures maintained by such national life insurer which was previously reported to such insurer by the Commissioner.

has engaged in conduct that is hazardous to the national insurer and that involves an undue risk to the policyholders of the national insurer, as a whole;

is in a financial or other condition that is not consistent with the continuation of existing operations; or

has violated any—

In general

If the Commissioner determines under subsection (a) that the Federal license of a national insurer should be revoked or restricted, the Commissioner shall—

Notice of service

Any service required or authorized to be made by the Commissioner under this section may be made by registered mail, or in such other manner reasonably calculated to give actual notice as the Commissioner may by regulation or otherwise provide.

In general

Before revoking or restricting a Federal license, the Commissioner shall conduct a hearing in accordance with section 554 of title 5, United States Code, to determine if the conditions described in subsection (a) exist.

Authority to revoke or restrict federal license

If, on the basis of the evidence presented at the hearing under paragraph (1) and the written findings of the Commissioner with respect to such evidence, the Commissioner establishes the existence of any conduct, condition, or violation specified in the notice sent to a national insurer under subsection (b), the Commissioner may issue an order revoking or restricting the Federal license of the national insurer, which shall be effective as of a date subsequent to such finding.

Consent to revocation or restriction

If a duly authorized representative of the national insurer fails to appear at the hearing under this subsection, the national insurer shall be deemed to have consented to the revocation or restriction of its Federal license, and the Commissioner may immediately revoke or restrict such Federal license.

Notice by national insurer

Notice by commissioner

In general

If the Commissioner, in the course of a revocation proceeding under this section, finds that the national insurer poses an immediate threat to the interests of its policyholders as a whole or to the public, the Commissioner may issue an order temporarily suspending or restricting the Federal license of the national insurer.

Notice of temporary order

A national insurer whose Federal license is temporarily suspended or restricted under this subsection shall give notice of an order issued under this paragraph to each affected policyholder in such manner and at such times as the Commissioner may find to be necessary and may order for the protection of policyholders and the public.

Effective period of temporary order

A temporary order issued under paragraph (1) shall—

Judicial review

In general

Except as provided under paragraph (2), any decision by the Commissioner to suspend, restrict, or revoke a Federal license under this section shall be made by the Commissioner and may not be delegated.

Exception

The Commissioner may, by order, designate an employee of the Office who may make a decision described in paragraph (1), if the Commissioner is not able to act by reason of recusal or is otherwise disqualified from acting.

violated any applicable law, regulation, order, condition imposed in writing by the Commissioner in connection with the approval of an application, filing, statement, notice or other request by the producer, or written agreement entered into between the producer and the Commissioner;

provided incorrect, misleading, incomplete, or materially untrue information in an application for a Federal charter or a Federal producer license;

used fraudulent, coercive, or dishonest practices; or

demonstrated incompetence, un­trust­wor­thi­ness, or financial irresponsibility as an insurance producer.

serve written notice on the national agency or other federally licensed insurance producer of the Commissioner’s intention to revoke or restrict the Federal producer license;

provide the national agency or other federally licensed insurance producer with a statement of the basis for the determination to revoke or restrict the Federal producer license; and

notify the national agency or other federally licensed insurance producer, not less than 30 days before a hearing under subsection (c), of the date and place of the hearing.

In general

Before revoking or restricting a Federal producer license, the Commissioner shall conduct a hearing in accordance with section 554 of title 5, United States Code, to determine if the conditions described in subsection (a) exist.

Authority to revoke or restrict federal license

If, on the basis of the evidence presented at the hearing under paragraph (1) and the written findings of the Commissioner with respect to such evidence, the Commissioner finds any conduct, condition, or violation specified in the notice sent to a national agency or other federally licensed insurance producer under subsection (b), the Commissioner may issue an order revoking or restricting the Federal producer license of the national agency or other federally licensed insurance producer, which shall be effective as of a date subsequent to such finding.

Consent to revocation or restriction

If a duly authorized representative of the national agency or other federally licensed insurance producer fails to appear at the hearing under this subsection, the national agency or other federally licensed insurance producer shall be deemed to have consented to the revocation or restriction of its Federal producer license, and the Commissioner may immediately revoke or restrict such Federal producer license.

Notice by federally licensed insurance producer

Each national agency or other federally licensed insurance producer shall give written notice of revocation or restriction under this section to each national insurer or State insurer for which such agency or producer acts as an insurance producer.

Notice by commissioner

In general

If the Commissioner, in the course of a revocation or restriction proceeding under this section, finds that the national agency or other federally licensed insurance producer poses an immediate threat to the interests of the policyholders of a national insurer or a State insurer as a whole, or to the public, the Commissioner may issue a temporary order suspending or restricting the Federal producer license of the agency or other producer.

Notice of temporary order

The national agency or other federally licensed insurance producer shall give notice of a temporary order issued under this paragraph in such manner and at such times as the Commissioner may find to be necessary and may order for the protection of policyholders and the public.

Effective period of temporary order

Any temporary order issued under paragraph (1) shall—

Judicial review

Issuance

The Commissioner may issue and serve upon a national insurer, national agency, federally licensed insurance producer, or insurer-affiliated party a notice of charges if the Commissioner determines that such insurer, agency, producer, or party—

Contents

The notice issued under paragraph (1) shall—

Timing

A hearing under this section shall be scheduled for a date which is not earlier than 30 days nor later than 60 days after the service of notice under subsection (a) unless another date is set by the Commissioner at the request of any party so served.

Consent

If a duly authorized representative of a party served notice under subsection (a) fails to appear at a hearing under this section, the party shall be deemed to have consented to the issuance of the cease-and-desist order.

In general

If the Commissioner finds, upon the record made at a hearing under this section, that any violation or conduct specified in the notice of charges has been established, or if the party consents, the Commissioner may issue and serve upon the national insurer, national agency, federally licensed insurance producer, or insurer-affiliated party, an order to cease and desist from any such violation or conduct.

Contents

A cease-and-desist order issued under this subsection may—

Effective date

A cease-and-desist order issued under this subsection shall—

Authority to limit activities

The authority to issue an order under this section includes the authority to place limitations on the activities or functions of a national insurer, national agency, a federally licensed insurance producer, or an insurer-affiliated party.

Standard for certain orders

No authority under this section to prohibit any insurer-affiliated party from withdrawing, transferring, removing, dissipating, or disposing of any funds, assets, or other property may be exercised, unless the Commissioner meets the standards of Rule 65 of the Federal Rules of Civil Procedure, without regard to the requirement of such rule that the applicant show that the injury, loss, or damage is irreparable and immediate.

In general

If the Commissioner determines that the violation, threatened violation, or conduct specified in the notice of charges served under subsection (c)(1) is likely to cause insolvency or significant dissipation of assets or earnings of a national insurer or a State insurer, or is likely to weaken the condition of a national insurer or a State insurer or otherwise prejudice the interests of the policyholders, as a whole, of a national insurer or a State insurer before the completion of the proceedings conducted under subsection (c)(1), the Commissioner may issue a temporary order requiring the national insurer, national agency, producer, or party to—

Contents of order; effective date

A temporary cease-and-desist order issued under paragraph (1)—

Injunction

Incomplete or inaccurate records

an insurer-affiliated party has—

through any violation, conduct, practice, or breach described in paragraph (1)—

the violation, conduct, practice, or breach—

Suspension or prohibition authorized

If the Commissioner serves written notice under subsection (a) on any insurer-affiliated party of the Commissioner’s intention to issue an order under such subsection, the Commissioner may issue a temporary order suspending such party from office or prohibiting such party from further participation in any manner in the conduct of the affairs of the national insurer or national agency, if the Commissioner—

Effective period

Any temporary order issued under paragraph (1)—

Copy of order

If the Commissioner issues a temporary order under paragraph (1) to any insurer-affiliated party, the Commissioner shall serve a copy of such order on any national insurer or national agency with which such party is affiliated at the time such order is issued.

Contents of notice

A notice served under subsection (a) shall include—

Hearing

The hearing referred to in paragraph (1)(B) shall take place not earlier than 30 days nor later than 60 days after the date of service of notice under subsection (a), unless another date is set by the Commissioner at the request of such party.

Suspension or removal

In general

Except as provided under paragraph (2), any person who, pursuant to any order issued under this section or section 1146, has been removed or suspended from office in a national insurer or national agency or prohibited from participating in the conduct of the affairs of a national insurer or national agency may not, while such order is in effect—

Exception

If, on or after the date on which an order is issued under this subsection that removes or suspends from office any insurer-affiliated party or prohibits such party from participating in the conduct of the affairs of a national insurer or national agency, such party receives the written consent of the Commissioner, paragraph (1) shall, to the extent of such consent, cease to apply to such party with respect to the national insurer or national agency described in each written consent.

Violation of order

Any violation of paragraph (1) by any person who is subject to an order described in such subparagraph shall be treated as a violation of the order.

In general

The Commissioner may suspend an insurer-affiliated party from office or prohibit such party from further participation in any manner in the conduct of the affairs of a national insurer or national agency, by written notice served upon such party and the national insurer or national agency, if—

Effective period

A suspension or prohibition under paragraph (1) shall remain in effect until the information, indictment, or complaint referred to in paragraph (1)(B) is resolved or otherwise terminated by the Commissioner.

In general

If a judgment of conviction or an agreement to enter a pretrial diversion or other similar program is entered against an insurer-affiliated party in connection with a crime described in subsection (a)(1)(B)(i), the Commissioner may issue and serve upon such party and the national insurer or national agency an order removing such party from office or prohibiting such party from further participation in any manner in the conduct of the affairs of the national insurer or national agency without the prior written consent of the Commissioner if—

Required for certain offenses

In the case of a judgment of conviction or agreement against an insurer-affiliated party in connection with a violation described in subsection (a)(1)(B)(ii), the Commissioner shall issue and serve upon such party and the national insurer or national agency an order removing such party from office or prohibiting such party from further participation in any manner in the conduct of the affairs of the national insurer or national agency without the prior written consent of the Commissioner.

Effect on director or officer

An insurer-affiliated party who is a director or officer and who is subject to an order under this subsection, shall cease to be a director or officer of such national insurer or national agency.

Effect of acquittal

A finding of not guilty or other disposition of the charge shall not preclude the Commissioner from instituting proceedings after such finding or disposition to remove such party from office or to prohibit further participation in national insurer or national agency affairs under subsection (a) or (b) of section 1145.

Effective period

A notice of suspension or order of removal issued under this subsection shall remain effective and outstanding until the completion of any hearing or appeal under subsection (c) or unless the suspension or order of removal is otherwise terminated by the Commissioner.

Request

Not later than 30 days after the date on which a notice of suspension or order of removal is received by an insurer-affiliated party under this subsection, such party may submit a written request to the Commissioner for an opportunity to appear before the Commissioner to show that the continued service to, or participation in, the conduct of the affairs of the national insurer or national agency by such party will not pose a threat to the national insurer or to the interests of its policyholders or to a national agency or the policyholders serviced by such Agency.

Time and place

Upon receipt of a request under paragraph (1), the Commissioner shall set a time and place at which the requesting party may appear, personally or through counsel, before 1 or more designated employees of the Commissioner to submit written materials or, at the discretion of the Commissioner, oral testimony, and oral argument. A hearing under this subsection shall take place not later than 30 days after the receipt of a request under paragraph (1), unless extended at the request of the party.

Notification of decision

Not later than 60 days after a hearing under this subsection, the Commissioner shall provide written notification to the insurer-affiliated party that indicates—

administer oaths and affirmations;

take depositions or cause depositions to be taken; and

issue, revoke, quash, or modify subpoenas and subpoenas duces tecum.

In general

The Commissioner, or designee of the Commissioner, may require the attendance of witnesses and the production of documents provided for in this section from any place in any State or other place subject to the jurisdiction of the United States at any designated place where such proceeding or other action is being conducted.

Enforcement

The Commissioner or any party to proceedings under this section may apply for the enforcement of any subpoena or subpoena duces tecum issued under this section to—

Jurisdiction

The courts described under paragraph (2) shall have jurisdiction and power to order and require compliance with any subpoena or subpoena duces tecum issued under this section.

Fees and mileage

Any witness subpoenaed under this subsection shall be paid the same fees and mileage that are paid witnesses in the district courts of the United States.

Penalty for noncompliance

Any person who willfully fails or refuses to attend and testify or to answer any lawful inquiry or to produce books, papers, correspondence, memoranda, contracts, agreements, or other records, if in such person’s power so to do, in obedience to the subpoena of the Commissioner, shall be guilty of a misdemeanor and, upon conviction, shall be subject to a fine of not more than $1,000 or to imprisonment for a term of not more than 1 year or both.

In general

Any court having jurisdiction of any proceeding or other action instituted under this section by a national insurer or national agency, a federally licensed insurance producer, or an insurer-affiliated party may allow any such insurer, agency, producer, or party to receive such reasonable expenses and attorney fees, as it determines to be just and proper.

Payment of expenses and fees

Expenses and fees awarded under paragraph (1) shall be paid by the national insurer or national agency, the federally licensed insurance producer, or the insurer-affiliated party from the assets of such insurer, agency, producer, or party.

Lack of quorum

If the suspension of 1 or more directors under this subtitle reduces the board of directors of a national insurer or national agency below a quorum, all powers and functions vested in or exercisable by such board shall vest in, and be exercisable by, the director or directors on the board not so suspended, until a quorum is reestablished.

Temporary appointments

If all of the directors of a national insurer or national agency are suspended under this subtitle, the Commissioner shall appoint persons to serve temporarily as directors in their place until the earlier of the date on which—

In general

A hearing under this subtitle (except for a hearing under section 1146(c))—

Judgment

After a hearing under this subsection and not later than 90 days after the Commissioner has notified the parties that the case has been submitted to the Commissioner for final decision, the Commissioner shall—

In general

Judicial review of any order under this subtitle shall be limited to the provisions under this section.

Modification or termination of order by commissioner

Filing of petition

Filing of record

The clerk of the court shall transmit a copy of the petition filed under paragraph (3) to the Commissioner, who shall file in the court the record in the proceeding, in accordance with section 2112 of title 28, United States Code.

Effect of review proceedings

The commencement of proceedings for judicial review under this subsection shall not, unless specifically ordered by the court, operate as a stay of any order issued by the Commissioner.

Final judgment

Judicial review under this section shall be subject to chapter 7 of title 5, United States Code. The judgment and decree of the court shall be final, except that the same shall be subject to review by the Supreme Court upon certiorari, as provided in section 1254 of title 28, United States Code.

Application

The Commissioner may submit an application, to enforce any effective and outstanding notice or order issued under this section, to the United States district court for the judicial district in which—

Jurisdiction

The courts described in paragraph (1)—

First tier

A national insurer or national agency, federally licensed insurance producer, or insurer-affiliated party shall pay a civil penalty of not more than $5,000 for each day during which such person—

Second tier

Notwithstanding paragraph (1), a national insurer, national agency, federally licensed insurance producer, or insurer-affiliated party shall pay a civil penalty of not more than $25,000 for each day—

Third tier

Notwithstanding paragraphs (1) and (2), a national insurer, national agency, federally licensed insurance producer, or any insurer-affiliated party shall pay a civil penalty in an amount not to exceed the applicable maximum amount determined under paragraph (4) for each day during which such person—

Maximum amounts of penalties for any violation described in paragraph (3)

The maximum daily amount of any civil penalty which may be assessed under paragraph (3) for any violation, practice, or breach described in such paragraph is $1,000,000.

Assessment

Authority to modify or remit penalty

The Commissioner may compromise, modify, or remit any penalty which the Commissioner may assess or had already assessed under paragraph (1), (2), or (3).

Mitigating factors

In determining the amount of any penalty imposed under paragraph (1), (2), or (3), the Commissioner shall take into account the appropriateness of the penalty in relation to—

Hearing

The national insurer, national agency, or other person against whom any penalty is assessed under this paragraph shall be afforded a hearing by the Commissioner if such national insurer, national agency, or person submits a request for such hearing within 20 days after the issuance of the notice of assessment.

Collection

Disbursement and use

All penalties collected under authority of this paragraph shall be deposited into the Treasury, and shall not be used to fund the compensation of the Commissioner or employees of the Office or the expenses of the Office.

In general

In any action brought by the Commissioner under this section, or in actions brought in aid of, or to enforce an order in, any administrative or other civil action for money damages, restitution, or civil money penalties brought by the Commissioner, the court may, upon application of the Commissioner, issue a restraining order that—

Standard

In general

Chapter 21 of title 18, United States Code, is amended by adding at the end the following:

Clerical amendment

The table of sections at the beginning of chapter 21 of title 18, United States Code, is amended by adding at the end the following:

any written agreement or other written statement for which a violation may be enforced by the Commissioner;

any final order issued with respect to any administrative enforcement proceeding initiated by the Commissioner under this section or any other law; and

any modification to or termination of any order or agreement made public pursuant to this paragraph.

In general

The Commissioner may file any document or part of a document under seal in any administrative hearing commenced by the Commissioner if the Commissioner determines that disclosure of all or part of the document would be contrary to the public interest.

Written report

A written report shall be made part of any determination to withhold any part of a document from the transcript of the hearing required under subsection (b).

all the documents described in subsection (a); and

all informal enforcement agreements and other supervisory actions and supporting documents issued in connection with any administrative enforcement proceeding initiated by the Commissioner.

In general

The Commissioner may assist any foreign government that is conducting an investigation to determine whether any person has violated, is violating, or is about to violate any law or regulation relating to insurance matters or currency transactions administered or enforced by such foreign government.

Investigation by commissioner

The Commissioner may investigate and collect information and evidence pertinent to a request for assistance under paragraph (1). Any such investigation shall comply with the laws of the United States and the policies and procedures of the Commissioner.

Factors to consider

In deciding whether to provide assistance under this section, the Commissioner shall consider—

In general

Except as provided under paragraph (2), if the venue of any judicial or administrative proceeding under this section is to be determined by reference to the location of the main office of a national insurer, the venue of such a proceeding shall be within the judicial district or other relevant jurisdiction in which the non-United States insurer has 1 or more offices.

Multiple jurisdictions

If a national insurer has offices in more than 1 jurisdiction, the venue of a proceeding under this section—

In general

Any service required or authorized to be made on a non-United States insurer may be made on any office located within any State.

Exception

If any service of process under paragraph (1) is in connection with an action or proceeding involving 1 or more offices located in any State, service shall be made on at least 1 office so involved.

Revocation, suspension, or restriction of the authority of the national insurer or national agency to transact insurance.

The entry of a formal order that the national insurer restrict its premium writing, obtain additional contributions to surplus, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policyholders or creditors.

The placement of a national insurer into receivership.

In general

Except as provided under paragraphs (2) and (3), any person who furnishes, discloses, receives, or uses information concerning a suspected, anticipated, or completed fraudulent insurance act shall not be liable to any person under any law or regulation of the United States, any constitution, law, or regulation of any State or political subdivision of any State, or under any contract or other legally enforceable agreement (including any arbitration agreement), for such act, if the information is provided to or received from—

Malice

Preservation of privilege and immunities

This subsection does not abrogate or modify any common law or statutory privileges or immunities enjoyed by a person described in paragraph (1).

return of any profit, benefit, compensation, or payment received by the person committing the act;

reasonable attorney fees, related legal expenses, including internal legal expenses and court costs; and

all other economic damages directly resulting from the act.

may be certified as a class action or made part of a class action; and

may be maintained under this section if a court has ordered restitution to the injured national insurer, national agency, or federally licensed insurance producer upon criminal conviction of the person committing the fraudulent insurance act.

In general

The Commissioner may, in accordance with the provisions of this Act, and under regulations prescribed by the Commissioner pursuant to paragraph (2)—

Rulemaking

The Commissioner shall issue regulations that permit the organization of national insurers in stock, mutual, reciprocal, or fraternal form, and address such other matters related to the chartering and licensing of national insurers and national agencies, as the Commissioner determines appropriate.

Organization

The Commissioner shall require each national agency to be organized as a corporation, partnership, limited liability company, or in such other form as is recognized under State law.

Factors

In determining whether to issue a charter for a national insurer or national agency, the Commissioner shall consider—

Information

The Commissioner shall request such information from the applicant as the Commissioner determines necessary to make the evaluation required under paragraph (1).

Corporate name

Determination

Not later than 60 days after the receipt of the articles of incorporation or other organization document from a proposed national insurer or national agency, and such other information required under subsection (b)(2), the Commissioner shall—

Federal producer license

If the Commissioner issues a charter certificate to a national agency, the Commissioner shall concurrently issue a Federal producer license to the applicant pursuant to section 1301. A national agency may not sell, solicit, or negotiate any line of insurance for which it does not hold a Federal producer license.

Grounds for denial

The Commissioner shall not grant a charter to an applicant if—

the organization, incorporation, and powers of national insurers or national agencies; or

the issuance and amendment of charters to a national insurer or national agency.

Designation

Subject to the approval of the Commissioner, a national insurer or national agency may designate any office at which it conducts insurance operations as its main office.

Charter to specify main office

The charter of a national insurer or national agency shall specify the State in which its main office is located.

Change in main office

With the approval of the Commissioner, a national insurer or national agency may change the designation of its main office, including to another existing office of the national insurer or national agency.

Citizenship

For purposes of jurisdiction, a national insurer or national agency shall be deemed a citizen of the State in which its main office is located and of the State in which it has its principal place of business.

In general

The Commissioner shall not license a United States branch until the non-United States insurer establishes a trust account, pursuant to a deed of trust that meets the requirements of this subsection.

Assets

The trusteed assets of a United States branch shall be held pursuant to a deed of trust with a United States bank that meets such requirements as the Commissioner may prescribe, in trust for the exclusive benefit, security, and protection of the policyholders, or policyholders and creditors, of the United States branch in the United States maintained as long as there is outstanding any liability of the United States branch arising out of its insurance transactions in the United States.

Surplus

The trusteed surplus of a United States branch shall be subject to the same solvency standards required of national insurers, including the risk-based capital standards described in section 1212(a)(4).

Filing

The Commissioner may require a United States branch to file a statement, in such form as the Commissioner may prescribe, that has been certified by the trustee.

shall be subject to all laws applicable to a national insurer; and

shall be treated as a national insurer for all purposes of this Act.

In general

The Commissioner shall, under such regulations as the Commissioner shall prescribe, issue Federal licenses that—

Rulemaking

The regulations prescribed by the Commissioner pursuant to paragraph (1) shall provide that—

Authority to limit scope of insurance

Subject to paragraph (2), the regulations prescribed by the Commissioner pursuant to paragraph (1) may provide that a national insurer that holds a license to sell, solicit, negotiate, and underwrite specified lines of insurance may not hold a license to sell, solicit, negotiate, and underwrite other specified lines of insurance.

title insurance

The Commissioner shall not license any person to engage in the business of title insurance, except that nothing in this Act shall prevent a provider of title insurance from being affiliated with a national insurer or national agency.

Duration

A Federal license issued by the Commissioner pursuant to this subsection shall remain in effect until the license is—

only reinsure the lines of insurance that the national insurer is—

confine its business to reinsurance.

In general

Except as provided in paragraph (2) and section 1202, the Commissioner may not impose any condition for the granting of a Federal license to a national insurer under this section solely because the national insurer is—

Exception

Notwithstanding paragraph (1), the Commissioner may impose conditions for the granting of a Federal license that are different from those imposed on other national insurers—

In general

Except as provided under paragraph (3), and to the extent not inconsistent with the provisions of this Act or regulations issued by the Commissioner under this Act, each national insurer and national agency shall adhere to corporate governance procedures of the relevant State law of the State in which its main office is located or the State in which 1 of its United States holding companies is organized or incorporated.

Designation

Each national insurer and national agency shall designate in its bylaws the body of relevant State law selected for its corporate governance procedures.

Discriminatory provision

If the Commissioner determines that any provision of a State corporate governance law is discriminatory as applied to national insurers or national agencies, such insurer or agency—

Establishment

Each national insurer shall establish an audit committee of its board of directors, which shall be composed entirely of outside directors who are independent of management of the national insurer.

Satisfaction

The requirement described in paragraph (1) will be satisfied if—

adhere to participating policy procedures of the relevant law of the State in which its main office is located; or

adhere to the participating policy procedures established by regulation of the Commissioner under subsection (b).

In general

Notwithstanding any other provision of law and subject to the approval of the Commissioner, a State insurer may convert to a national insurer and a State insurance agency may convert to a national agency.

Organizational form

A State insurer that converts to a national insurer under paragraph (1) may—

In general

The Commissioner may, under such regulations as the Commissioner may prescribe, provide for—

Rulemaking

Regulations issued by the Commissioner under this section shall be consistent with—

In general

Except as provided under paragraph (2), a State insurer or State insurance agency that converts under this section—

Exceptions

Notwithstanding paragraph (1), a State insurer or State insurance agency that converts under this section—

In general

If a State insurer converting under this section is an insurer in stock form that is controlled by a mutual holding company as a result of a previous conversion under State law from an insurer in mutual form to an insurer in stock form, and, after the conversion under this section, the mutual holding company would not control any other State insurers having policies in force that give rise to membership in the mutual holding company, then, notwithstanding any other provision of law, in accordance with this section and regulations issued by the Commissioner—

Conversion to a corporation in stock form

Notwithstanding any other provision of law and in accordance with this subsection and regulations issued by the Commissioner, a mutual holding company described in paragraph (1) may convert to a corporation in stock form in a manner that—

to have, alter, use, and reproduce a corporate seal, or a facsimile of it;

to have perpetual succession until such time as it is liquidated, dissolved, merged, or otherwise wound up in accordance with applicable law;

to adopt, amend, and repeal by-laws;

to sue or be sued, complain and defend, and otherwise litigate in any court and participate, as a party or otherwise, in any judicial, administrative, arbitral, or other proceeding, in its corporate name;

to make contracts and guarantees, incur liabilities, borrow money, issue notes, bonds, and other obligations (which may be convertible into or include the option to purchase other securities of the national insurer or national agency), and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income;

to purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, improve, employ, use, and otherwise deal in and with real and personal property or other assets, or any interest therein, and sell, convey, mortgage, lease, exchange, transfer, or otherwise dispose of, or mortgage or pledge, all or any of its property and assets, or any interest therein;

to lend money, invest, and reinvest its funds and receive and hold real and personal property as security for repayment;

to participate with others in any corporation, partnership, limited partnership, joint venture, or other association, or in any transaction, undertaking, or arrangement, which the national insurer or national agency would have power to conduct by itself, whether or not such participation involves sharing or delegating control with or to others;

to elect or appoint directors, officers, employees, and agents of the national insurer or national agency, define their duties, fix their compensation, and lend them money and credit;

to pay pensions and establish pension plans, pension trusts, profit-sharing plans, share bonus plans, share option plans, and other benefit or incentive plans for any or all current or former directors, officers, employees, and agents of the national insurer or national agency, its subsidiaries or its affiliates;

to provide insurance for its benefit on the life of any of its directors, officers, or employees, or on the life of any shareholder for the purpose of acquiring, at the death of such shareholder, shares of its stock owned by such shareholder;

in the case of a national life insurer—

in the case of a national insurer—

in the case of a national agency—

to provide benefits or payments to its directors, officers, and employees, subsidiaries or affiliates, and to their estates, families, dependents, or beneficiaries, in recognition of the past services of the directors, officers, and employees to the national insurer or national agency or its subsidiaries or affiliates;

to make donations and otherwise devote its resources for the public welfare or for charitable, scientific, educational, humanitarian, philanthropic, or religious purposes;

to serve as a promoter, partner, member, associate, or manager of any business entity;

to provide loss control, advice, exposure identification, and reduction strategies, and recommend and expedite risk financing alternatives;

to engage in any other lawful activity that is necessary or convenient to further its activities and affairs; and

to exercise the powers granted by this Act in any State and in any foreign jurisdiction.

national insurers

National agencies

Shareholder dividends and distributions permitted

A national insurer may declare and pay dividends or make other distributions in cash, bonds, or property on its outstanding shares, unless—

Source of shareholder dividends and distributions

A national insurer may only declare and pay dividends or make other distributions out of surplus if the assets of the national insurer after such declaration, payment, or distribution is not less than the amount of its capital.

Other provisions

Shareholder dividends and distributions made pursuant to this subsection shall be subject to—

Ownership

All amounts attributed to a protected cell established under this section, including assets transferred to a protected cell account, shall be owned by the national insurer.

Trustee

The national insurer may not be, nor hold itself out to be, a trustee with respect to the protected cell assets of the protected cell account described in paragraph (1).

Liabilities

The assets of a protected cell established under this section shall not be chargeable with liabilities arising out of any other business of the national insurer.

Availability

Protected cell assets shall only be available to the creditors of a national insurer that are creditors in respect to that protected cell.

Recourse

Creditors with respect to a protected cell shall have no recourse against the protected cell assets of other protected cells or the general account assets of the national insurer.

Fraud

The establishment of a protected cell shall not, in and of itself, constitute a fraudulent conveyance, an intent by a national insurer to defraud creditors, or the carrying out of business by a national insurer for any other fraudulent purpose.

an investor in an insurance securitization, solely by reason of its investment, as an insurer, reinsurer, or other person transacting insurance; or

an underwriter or selling agent (or its partners, directors, officers, members, managers, employees, agents, representatives, or advisors) in an insurance securitization as an insurance or reinsurance agent, broker, producer, intermediary, advisor, consultant, or similar insurance professional by virtue of its activities in connection with the insurance securitization.

The fee and assessment regulations required by section 1122.

The reporting regulations required by section 1124.

The organizational regulations required by section 1201.

The licensing regulations required by section 1203.

The participating policy procedures regulations required by section 1205.

The charter conversion regulations required by section 1206.

The transitional financial regulations required by section 1212.

The product regulations required by section 1214.

The market conduct regulations required by section 1216.

The control regulations required by section 1231.

The merger, consolidation, and acquisition regulations required by section 1232.

The bulk transfer regulations required by section 1233.

The conversion regulations required by sections 1242 and 1243.

The holding company regulations required by sections 1402 and 1403.

The receivership regulations required by section 1504.

The insolvency protection regulations required by section 1609.

The fee and assessment regulations required by section 1122.

The reporting regulations required by section 1124.

The organizational regulations required by section 1201.

The charter conversion regulations required by section 1206.

The market conduct regulations required by section 1216.

The merger, consolidation, and acquisition regulations required by section 1232.

The producer licensing regulations required by section 1301.

The holding company regulations required by sections 1402 and 1403.

Timing

The regulations described in subsections (a) and (b) shall be published in final form or interim final form, not later than 2 years after the date of the initial appointment and confirmation of the Commissioner.

Notice

At such time as the regulations described in subsections (a) or (b) have been issued in final form or interim final form, the Commissioner shall publish a notice in the Federal Register announcing that the Office is prepared to act on chartering and licensing applications.

Considering and acting upon applications

Notwithstanding any challenge to the regulations described in subsections (a) and (b), the Commissioner shall have the authority to consider, and act upon, chartering and licensing applications immediately upon publication of the notice described in paragraph (2).

Accounting principles for a national insurer, which are consistent with the statutory accounting practices promulgated by the NAIC in its Accounting Practices and Procedures Manual.

Auditing standards for a national insurer, which are consistent with the guidance prescribed by the NAIC in its Model Regulation Requiring Annual Audited Financial Reports.

Investment standards for a national insurer, which are consistent with the Investment of Insurers Model Act (Defined Standards Version) of the NAIC, except that such investment standards shall not be bound by the provisions of the Model Act related to authorized classes of investments, class or individual investment limitations, or prohibited investments.

Risk-based capital standards for a national insurer, which are consistent with the Risk-Based Capital (RBC) for Insurers Model Act and the related RBC Instructions of the NAIC and nondisclosure rules and remedies for failing to meet such standards.

Valuation standards for the obligations and liabilities of a national life insurer, which are consistent with the statutory valuation practices promulgated by the NAIC in its Accounting Practices and Procedures Manual.

Continuing and alternative (nonforfeiture) benefits standards applicable to national life insurers, which are consistent with the Standard Nonforfeiture Law for Life Insurance, Variable Life Insurance Model Regulation, Standard Nonforfeiture Law for Individual Deferred Annuities, Long-Term Care Insurance Model Act, and Long-Term Care Insurance Model Regulation of the NAIC.

Standards for the preparation and filing of an annual actuarial opinion on the adequacy of the assets of a national life insurer to meet its reasonably expected obligations and liabilities, which are consistent with the Actuarial Opinion and Memorandum Regulation of the NAIC.

Standards for the preparation and filing of an annual actuarial opinion on the loss and loss adjustment expense reserves of a national property/casualty insurer, which are consistent with the NAIC’s Property and Casualty Actuarial Opinion Model Law and applicable NAIC Property and Casualty Annual Statement Instructions.

In general

Subject to paragraph (2), after an initial financial regulation specified in subsection (a) has been in effect for 5 years, the Commissioner may, by regulation, revise or modify the regulation.

Special circumstance

The Commissioner may, by regulation, revise or modify an initial financial regulation at any time if the Commissioner determines that any such revision or modification is necessary to protect policyholders or prevent hazardous conduct by a national insurer.

based on sound actuarial principles; or

related to actual or reasonably anticipated experience.

Law specified by parties

Subject to any applicable Federal law, the provisions of any insurance policy or other product of a national insurer shall be interpreted in accordance with the law of the jurisdiction specified by the parties to the insurance policy or other product if the parties have specified the law of—

Default law

If the parties to an insurance policy or other product of a national insurer have not specified the jurisdiction whose law shall govern the provisions of the insurance policy or other product, such provisions shall be interpreted in accordance with the law of the jurisdiction in which the insurance policy or other product is delivered.

Rulemaking

The Commissioner shall establish, by regulation, choice of law rules and standards under this subsection.

Policy

In this subsection, the term policy—

Rulemaking

The Commissioner shall establish, by regulation, standards for policies issued by a national insurer.

Types of policy requirements

The standards established under paragraph (2) may include general policy requirements and requirements regarding particular classes of policies.

Form filing

A national insurer shall not issue a policy until the form of the policy has been received by the Commissioner.

Exemptions

The Commissioner may, by regulation, exempt particular categories of policies from the filing requirement.

Compliance certificate

In accordance with regulations promulgated by the Commissioner, any filing of a policy form shall be accompanied by written certification by an officer of the national insurer that the policy form complies with the standards applicable to such form.

Procedures

The Commissioner shall establish procedures by which national insurers may obtain interpretive rulings from the Office regarding the interpretation and application of the standards established under this section.

Public availability

Except as provided under paragraph (3), requests by national insurers for interpretive rulings from the Office and the complete text of such interpretive rulings shall not be made available to the public.

Publication of summaries

Notwithstanding paragraph (2), the Commissioner shall publish a summary of each interpretive opinion, excluding the name of the national insurer and any other identifying information, either promptly after the issuance of such opinion or, upon the request of the national insurer, after such delay as the Commissioner determines appropriate.

Authorization

A national insurer may—

Rulemaking

The Commissioner shall, by regulation, establish standards for kinds and qualifications of permissible groups for group, blanket, and franchise insurance policies.

Regulations required

The Commissioner shall, by regulation—

Limitation on applicability

The regulations required by paragraph (1) shall not apply to an annuity contract or a funding agreement.

In general

Not later than the expiration of the 6-month period beginning upon the date of submission of the report under subsection (b)(3) to the Commissioner, the Commissioner shall promulgate such regulations, applicable to national insurers, as the Commissioner determines appropriate and consistent with the recommendation in that report to ensure that prompt corrective action is taken to resolve any hazardous financial condition of a national insurer.

Authorized content

Rules required by this subsection may include such capital measures and categories, capital standards, supervisory criteria, restrictions on permissible actions of such insurers, requirements for such insurers, procedures, provisions regarding conservatorship and receivership of such insurers, and other provisions as the Commissioner considers are appropriate and consistent with any recommendations in the report and the regulations issued pursuant to section 1212(a)(4).

In general

The Comptroller General of the United States shall conduct a study to identify an appropriate structure of procedures and requirements for taking prompt corrective actions with respect to national insurers, to ensure that any hazardous financial condition of such a national insurer is resolved effectively and efficiently, with the fewest possible losses.

Requirements

In conducting the study required by this subsection, the Comptroller General shall analyze and evaluate various proposals, structures, methods, and systems for taking prompt corrective actions with respect to various financial entities and institutions, including—

Report

In general

The Commissioner may—

Criteria

The standards prescribed under paragraph (1)(B) shall give due consideration to—

Examination and investigation

Upon the receipt of an application for a license under this section, the Commissioner shall examine the information submitted by the applicant and may conduct further examinations and investigations, as necessary, to determine whether the applicant satisfies the standards for a license under this section.

Publication of findings

The Commissioner shall publish the Commissioner’s findings and determination under paragraph (1).

Issuance of Federal license

report its financial statements to the Commissioner on a basis that the Commissioner determines to be—

submit to the jurisdiction of Federal courts in the United States; and

demonstrate that all judgments of all United States courts would be enforceable and collectible by—

In general

The Commissioner may revoke, suspend, or restrict a Federal reinsurer’s license in accordance with subtitle C of title I.

Status of Federally licensed reinsurer

For purposes of this subsection, a federally licensed reinsurer shall be deemed to be a National Insurer under subtitle C of title I.

that is ceded to—

if such insurance is ceded consistent with the standards established by the Commissioner pursuant to subsection (c).

deny a State insurer or a United States branch entered through a State all or part of any asset, or require any increase in liability for insurance ceded to any national insurer or federally licensed reinsurer because its reinsurance contract contains, or does not contain, 1 or more specific contract terms; or

otherwise require specific language or terms in any reinsurance contract.

it is closely based on standards established by the Commissioner pursuant to section 1222(c);

it is made in consultation with the Commissioner;

it serves a legitimate State interest; and

it does not frustrate the subject reinsurance contract.

the term national insurer includes any person controlling a national insurer; and

the term person does not include any securities broker holding, in the usual and customary functions of the broker, less than 20 percent of the voting securities of a national insurer or of any person who controls a national insurer.

In general

No person, other than the issuer, shall make a tender offer for, make a request or invitation for tenders of, or enter into any agreement to exchange securities for, or acquire, in the open market or otherwise, any voting security of a national insurer if, after the consummation of such transaction, such person would, directly or indirectly (or by conversion or by exercise of any right to acquire) be in control of the national insurer. No person shall enter into an agreement to merge with or otherwise acquire control of a national insurer or any person controlling a national insurer unless, at the time the offer, request, or invitation is made or the agreement is entered into, or before the acquisition of the securities if no offer or agreement is involved—

Savings provision

Nothing in this subsection shall be construed to prohibit a person from making an offer, request, or invitation or entering into an agreement to acquire control of a national insurer, if such transaction is conditioned upon obtaining the approval of the Commissioner in accordance with paragraph (1).

Form and content of statement

The Commissioner shall, by regulation, prescribe the form and content of the statement to be filed under paragraph (1)(A).

Approval by commissioner

The Commissioner shall approve any merger or other acquisition of control referred to in this subsection unless the Commissioner finds that—

In general

The Commissioner may, in his sole discretion, hold a hearing on a merger or other acquisition of control that is subject to this section and for which a statement has been filed under subsection (b)(1)(A).

Procedures

A hearing under this subsection shall be subject to the procedures under section 1148, except that the Commissioner may determine the location of such hearing.

any offer, request, invitation, agreement, or acquisition exempted by the Commissioner for not having been made or entered into for the purpose, and not having the effect, of changing or influencing the control of a national insurer, or as otherwise not comprehended within the purposes of this section; or

a merger, consolidation, or acquisition subject to section 1232.

Prohibition

No security which is the subject of any agreement or arrangement regarding acquisition, or which is acquired or to be acquired, in contravention of the provisions of this section may be voted at any shareholder meeting, or may be counted for quorum purposes.

Effect on shares

Any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though the securities described under paragraph (1) were not issued and outstanding.

Invalidation of action

No action taken at any meeting described under paragraph (1) shall be invalidated by the voting of the securities, unless—

Acquisition in contravention of this act

If a national insurer or the Commissioner has reason to believe that any security of the national insurer has been or is about to be acquired in contravention of the provisions of this section, the national insurer or the Commissioner may apply to the United States district court for the judicial district in which the main office of the national insurer is located or the United States District Court for the District of Columbia—

In general

If a person has acquired or is proposing to acquire any voting securities in violation of this section, the national insurer or the Commissioner may request the United States district court for the judicial district in which the main office of the national insurer is located or the United States District Court for the District of Columbia to—

Situs of ownership

Notwithstanding any other provision of law, for the purposes of this section, the situs of ownership of the securities of a national insurer shall be deemed to be the State in which the main office of the national insurer is located.

In general

Notwithstanding any other provision of law, except as provided under subsection (e), a national insurer may, with the approval of the Commissioner, merge, consolidate with, acquire all or substantially all the assets of, or assume all or substantially all the liabilities of, another national insurer or a State insurer in a transaction in which a national insurer is the resulting insurer, the acquiring insurer, or the assuming insurer, regardless of whether the insurers involved in the transaction are in stock form, mutual form, or fraternal form.

Merger, consolidation, and acquisition procedures

The Commissioner shall establish, by regulation, procedures for—

Effect of merger or consolidation

Upon the merger or consolidation of a national insurer with another national insurer or a State insurer under this section—

Special authority

The Commissioner may, subject to such conditions as the Commissioner shall prescribe, permit a national insurer resulting from a merger or consolidation under this section to retain, hold, or exercise such assets, liabilities, powers, and authorities that do not conform to the legal requirements applicable to national insurers, as the Commissioner determines appropriate.

In general

Subject to applicable State law and such notification procedures as the Commissioner shall prescribe by regulation, a State insurer may merge with, consolidate with, acquire assets of, or assume liabilities of, a national insurer in a transaction in which a State insurer is the resulting insurer.

Savings provision

Nothing in this subsection or in a transaction under this subsection shall abrogate any rights, privileges, liabilities, property interests, or other interests or obligations that the national insurer held or was subject to immediately before the transaction.

Assuming insurer

The term assuming insurer means the insurer that purchases or otherwise acquires existing insurance policies from another insurer by bulk transfer.

Block of business

The term block of business means all those insurance policies of an insurer under a particular policy form.

Bulk transfer

The term bulk transfer—

Permitted national insurer

The term permitted national insurer means—

Transferred insurance policies

The term transferred insurance policies means the insurance policies that are subject to the bulk transfer.

Transferring insurer

The term transferring insurer means the insurer in privity of contract with the policyholders under the existing insurance policies that are subject to the bulk transfer.

A State insurer as the transferring insurer and a permitted national insurer as the assuming insurer.

A permitted national insurer as the transferring insurer and a State insurer as the assuming insurer.

A national insurer as the transferring insurer and a national insurer as the assuming insurer.

A State insurer as the transferring insurer and a national insurer that is not a permitted national insurer as the assuming insurer.

A national insurer that is not a permitted national insurer as the transferring insurer and a State insurer as the assuming insurer.

In general

A national insurer shall not effect a bulk transfer as either the transferring insurer or the assuming insurer as authorized under paragraph (1), (2), (3), or (5) of subsection (b) without the prior approval of the Commissioner, in accordance with such regulations as the Commissioner shall prescribe.

Standard of approval

The Commissioner shall approve a bulk transfer under paragraph (1), after notice and a hearing, unless the Commissioner determines that the bulk transfer is likely to be hazardous to policyholders of transferred insurance policies, policyholders of the transferring insurer, or policyholders of the assuming insurer.

No consent required

Notwithstanding any other provision of law, a national insurer may, upon the approval of the Commissioner, effect a bulk transfer under paragraph (1) or (2) of subsection (b), as either the transferring insurer or the assuming insurer, without obtaining policyholder consent.

Between national insurers

Notwithstanding any other provision of law, a national insurer may, upon the approval of the Commissioner, effect a bulk transfer under subsection (b)(3) as either the transferring insurer or the assuming insurer, in accordance with the requirements prescribed by the Commissioner. Such requirements shall specify whether policyholder consent to such a bulk transfer is required and, if policyholder consent is required, the form in which such consent is required to be given.

Additional provisions

In addition to any policyholder consent required by any other applicable provision of law, the Commissioner may prescribe, by regulation, whether policyholder consent is required for a bulk transfer authorized under subsection (b)(5) and, if policyholder consent is required, the form in which such consent is required to be given.

Prohibition

Except as provided in paragraph (2), a State may not, by statute, regulation, order, interpretation, or otherwise—

Construction

Paragraph (1) shall not be construed to prohibit any State from—

Standards

A review or action meets the standards under this paragraph, if it—

Notice of failure

If the Commissioner finds that any State review or action under paragraph (2)(A) fails to meet any of the standards set forth in paragraph (3), the Commissioner may provide the applicable State with notice of such failure and the reasons for such failure.

In general

The domestication of the United States branch shall be effective on the date on which a certified copy of the instrument of transfer and assumption is filed with the Commissioner.

Effect of domestication

On the date described in paragraph (1)—

transfer to the account of the acquiring national insurer the securities deposited by such United States branch in compliance with the provisions of this Act; and

consent that the trustee of the trusteed assets deposited by such United States branch in compliance with the provisions of this Act shall withdraw from the trust and transfer and deliver to the acquiring national insurer all assets held by such trustee.

In general

At the time of the domestication of a United States branch established under State law, the trustee of any trusteed assets deposited by such United States branch in compliance with applicable State law shall, with the consent of the Commissioner—

Limitation

No State may, by statute, regulation, order, interpretation, or otherwise, prevent, significantly interfere with, review, approve, or disapprove the withdrawal of trusteed assets or other deposits of a United States branch established under State law that is domesticated pursuant to this section, if such withdrawal is made contemporaneously with or subsequent to the consummation of a domestication of the United States branch under this section.

In general

Notwithstanding any other provision of law, a national agency may, with the approval of the Commissioner, merge, consolidate with, acquire all or substantially all the assets of, or assume all or substantially all the liabilities of, another national agency or a State insurance agency in a transaction in which a national agency is the resulting agency, the acquiring agency, or the assuming agency.

Merger, consolidation, and acquisition procedures

The Commissioner is authorized, under such regulations as the Commissioner may prescribe, to provide for—

Effect of merger or consolidation

Upon the merger or consolidation of a national agency with another national agency or a State insurance agency under this section—

Limitation

Upon a merger or consolidation under this subsection, the resulting agency—

Special authority

The Commissioner may, subject to such regulations as the Commissioner may prescribe, permit a national agency resulting from a merger or consolidation under this subsection to retain, hold, or exercise such assets, liabilities, powers, and authorities that do not conform to the legal requirements applicable to national agencies as the Commissioner determines to be appropriate.

In general

Subject to such notification procedures as the Commissioner may prescribe by regulation, a State insurance agency may merge, consolidate with, acquire assets of, or assume liabilities of, a national agency in a transaction in which a State insurance agency is the resulting agency, in accordance with applicable State law.

Savings provision

Nothing in this subsection or in a transaction pursuant to this subsection shall abrogate any rights, privileges, liabilities, property interests, other interests, or obligations that the national agency had immediately before the transaction.

In general

The plan of conversion required by this section—

Issuance of stock after adoption date

No additional shares of capital stock shall be issued after the adoption date, except that—

Contents

The plan of conversion shall provide for—

the plan is fair and equitable to the policyholders, shareholders, and holders of options to acquire capital stock of the converting stock insurer;

the plan does not violate the law; and

the converted mutual insurer will, after the conversion, satisfy the requirements for the issuance of a license to write the lines of insurance for which it is licensed.

Stockholders

The plan of conversion shall be submitted to the holders of record on the adoption date of the converting stock insurer’s shares entitled to vote thereon and shall be subject to approval of the holders of a majority of such shares.

Policyholders

In general

On the effective date of the plan of conversion, the stock insurer shall become a national life insurer in mutual form and shareholders eligible to receive consideration under the plan of conversion are entitled to receive the consideration specified in the plan in exchange for their shares of capital stock of the converting stock insurer.

No effect on existing rights and liabilities

The converted mutual insurer is a continuation of the original stock life insurer, and the conversion shall not annul, modify, or change any of the original stock life insurer’s existing suits, rights, contracts, or liabilities, except as provided in the plan of conversion.

Rights after conversion

After conversion, the converted mutual insurer shall—

In general

Notwithstanding any other provision of law, actions concerning any plan of conversion or proposed plan of conversion under this section or any acts taken or proposed to be taken under this section shall be commenced not later than 30 days after the date on which the plan of conversion is approved by the Commissioner under subsection (c).

Plan withdrawn

If the plan of conversion is withdrawn, the actions described in paragraph (1) shall be commenced not later than 30 days after the date on which the board of directors approves a resolution to withdraw the plan.

In general

The plan of conversion—

Contents

The plan of conversion shall provide that—

the plan is fair and equitable to the insurer and its policyholders;

the plan does not violate the law; and

the converted stock insurer will, after the conversion, satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is licensed.

In general

On the effective date of the plan of conversion—

No effect on existing rights and liabilities

The converted stock insurer is a continuation of the original mutual insurer, and the conversion shall not annul, modify, or change any of the original mutual insurer’s existing suits, rights, contracts, or liabilities, except as provided in the plan of conversion.

Rights after conversion

After conversion, the converted stock insurer shall—

In general

During the 5-year period beginning on the effective date of the plan of conversion, no person or group of persons acting in concert shall directly or indirectly offer to acquire, or acquire in any manner, the beneficial ownership of 5 percent or more of any class of voting securities of a converted insurer or of a person that controls the converted insurer, without the prior consent of the Commissioner.

Effect of violation

Upon the violation of paragraph (1), or any action that, if consummated, would constitute such a violation, all voting securities of the converted insurer or of the person acquired by any person in excess of the maximum amount permitted to be acquired by the person under paragraph (1) shall be deemed to be nonvoting securities of the converted stock insurer or of that person.

Enforcement

In general

Notwithstanding any other provision of law, actions concerning any plan of conversion or proposed plan of conversion under this section or any acts taken or proposed to be taken under this section shall be commenced not later than 30 days after the date on which the plan of conversion is approved by the Commissioner under subsection (c).

Plan withdrawn

If the plan of conversion is withdrawn, the actions shall be commenced not later than 30 days after the date on which the board of directors approves a resolution to withdraw the plan.

any additional taxes, assessments, and charges imposed by such State (or local government) by reason of the failure of the national insurer to be licensed or otherwise authorized to conduct business or write or sell insurance policies, by such State; or

special assessments and charges that fund services that the State does not provide with respect to the national insurer.

for any tax purpose for which State of domicile is relevant, every national insurer is treated by such State as domiciled in the State designated by each national insurer under subsection (c); and

the insurance retaliatory tax is imposed by such State on every national insurer to the same extent and in the same manner as it is imposed on every insurer chartered in the State where the national insurer is considered domiciled under subsection (c).

In general

A national insurer may designate, as its State of domicile, by filing such designation in writing with the Commissioner—

No Designation by national insurer

If a national insurer does not make a designation of a State of domicile under this subsection, the national insurer shall be deemed to have designated as its State of domicile the State in which its principal place of business in the United States is located.

shall not be considered a department, agency, or instrumentality of the Federal Government; and

except as provided in this section, a national insurer shall not be exempt from any State tax or subject to a lesser burden of any State tax, solely by reason of its status as a national insurer under this Act.

be considered to be a department, agency, or instrumentality of the Federal Government; and

except as provided in this section, be exempt from any State tax or subject to a lesser burden of any State tax, solely by reason of its status as a national agency under this Act.