HR 6213
110th CONGRESS
2d Session
H. R. 6213
To establish the Reinsurance International Solvency Standards Evaluation
Board.
IN THE HOUSE OF REPRESENTATIVES
June 9, 2008
Mr. FEENEY introduced the following bill; which was referred to the Committee
on Financial Services
A BILL
To establish the Reinsurance International Solvency Standards Evaluation
Board.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Reinsurance International Solvency Standards
Evaluation Board Act of 2008'.
SEC. 2. ESTABLISHMENT.
There is established the Reinsurance International Solvency Standards Evaluation
Board, to evaluate the reinsurance supervisory systems of the States of the
United States and jurisdictions outside the United States to determine, on
a uniform basis, whether such systems provide adequate capital and risk management
standards and an acceptable level of prudential supervision over their domiciled
reinsurers.
SEC. 3. CORPORATE STATUS.
(a) In General- The Board shall--
(1) be a nonprofit corporation;
(2) have succession until dissolved by an Act of Congress;
(3) not be an agency or establishment of the United States Government; and
(4) except as otherwise provided in this Act, be subject to, and have all
the powers conferred upon a nonprofit corporation by, the District of Columbia
Nonprofit Corporation Act.
(b) Nongovernmental Employees- No member or person employed by, or who is
an agent for, the Board shall be considered to be an officer or employee of
or agent for the Federal Government by reason of such service.
SEC. 4. MEMBERSHIP AND OVERSIGHT.
(a) Appointment- The Board shall have seven members as follows:
(1) All members shall be appointed by the President from among individuals
who have demonstrated expertise in reinsurance matters and shall serve at
the pleasure of the President.
(2) A majority of the members of the Board shall be selected from among
the lists of individuals having reinsurance regulatory expertise that may
be submitted to the President by any State insurance regulatory authority
or any association representing such authorities, subject only to the submission
of multiple such lists and the inclusion in each list submitted of a reasonable
number of names of individuals.
(1) IN GENERAL- Except as provided in paragraph (2), each member of the
Board shall be appointed for a term of seven years.
(2) TERMS OF INITIAL APPOINTEES- As designated by the President at the time
of appointment, of the members of the Board first appointed, one each shall
be appointed for a term of one year, for a term of two years, for a term
of three years, for a term of four years, for a term of five years, and
for a term of six years.
(c) Oversight- The President, or the President's designee, may prohibit or
suspend the effectiveness of any action of the Board that the President or
such designee determines, after advance public notice and comment where appropriate,
is significantly contrary to the public interest.
SEC. 5. DUTIES.
The duties of the Board shall be--
(1) to establish standards and procedures to evaluate the reinsurance supervisory
systems of the States and foreign jurisdictions in accordance with section
6;
(2) to conduct such evaluations;
(3) to certify, pursuant to section 6(c), reinsurance supervisory systems
that comply with such standards;
(4) to facilitate the development of uniform standards for regulation of
reinsurance;
(5) to perform such other duties or functions as the Board determines are
necessary or appropriate to carry out this Act; and
(6) to establish the budget and manage the operations of the Board and the
staff of the Board.
SEC. 6. EVALUATION AND CERTIFICATION OF REINSURANCE SUPERVISORY SYSTEMS.
(a) Standards- The Board shall establish uniform standards for reinsurance
supervisory systems of States and foreign jurisdictions that ensure that any
such system that complies with such standards provides adequate capital and
risk management standards and an acceptable level of prudential supervision
over reinsurers domiciled in such State or jurisdiction.
(b) Procedures- The Board shall establish procedures for any entity to make
a request for evaluation of the reinsurance supervisory system of a State
or foreign jurisdiction to determine compliance of such system with the standards
established by the Board pursuant to subsection (a). Such procedures shall
provide that an evaluation shall be conducted only upon payment to the Board
of a fee in the amount established pursuant to subsection (c).
(c) Fees- The Board shall establish a fee for conducting evaluations under
this section in the amount such that the aggregate of fees collected covers
all costs of conducting evaluations under this section and all other costs
of the establishment and operation of the Board.
(d) Certification- If, upon conducting of an evaluation under this section
with respect to the reinsurance supervisory system of any State or foreign
jurisdiction, the Board determines that the system complies with the standards
established pursuant to subsection (a), the Board shall certify such compliance
and publish notice and evidence of such certification in an appropriate manner.
Such certification shall be effective for a term of 12 months from the date
of initial certification.
(e) Public Notice and Comment- In developing standards, procedures, and fee
levels pursuant to subsections (a) through (c) and making determinations pursuant
to subsection (d), the Board shall provide appropriate advance public notice
and opportunity for public comment.
SEC. 7. TREATMENT OF CERTIFIED REINSURANCE SUPERVISORY SYSTEMS.
(a) Credit for Reinsurance- The domiciliary State of a ceding insurer may
not treat a reinsurer domiciled in any other domestic or foreign jurisdiction
differently from reinsurers domiciled and in good standing in such domiciliary
State for the purpose of determining credit for reinsurance for that ceding
insurer, if--
(1) the domestic or foreign jurisdiction is certified pursuant to section
6(d); and
(2) the reinsurer is in good standing in such other jurisdiction.
(b) Preemption of Inconsistent State Laws- All laws, regulations, provisions,
or other actions of a State are preempted to the extent that they are inconsistent
with subsection (a).
SEC. 8. FACILITATION OF UNIFORM REINSURANCE STANDARDS.
(a) Development of Proposed Standards- The Board shall periodically develop
proposed uniform standards to improve various aspects of reinsurance regulation,
particularly where a domestic or international consensus standard or conflict
of law has emerged.
(b) Reporting of Proposed Standards- The Board shall report any standards
proposed under subsection (a) to the appropriate State and Federal entities,
including proposed enacting or implementing language, as appropriate.
SEC. 9. POWERS OF BOARD.
In addition to any other authority granted to the Board in this Act, the Board
shall have the power--
(1) to sue and be sued, complain and defend, in its corporate name and through
its own counsel, with the approval of the President, in any Federal, State,
or other court;
(2) to conduct its operations and maintain offices, and to exercise all
other rights and powers authorized by this Act, in any State, without regard
to any qualification, licensing, or other provision of law in effect in
such State (or a political subdivision thereof);
(3) to lease, purchase, accept gifts or donations of or otherwise acquire,
improve, use, sell, exchange, or convey, all of or an interest in any property,
wherever situated;
(4) to hire employees, professionals, and specialists, and elect or appoint
officers, and to fix their compensation, define their duties, determine
their qualification, and give them appropriate authority to carry out the
purposes of the Act; and to establish the personnel policies and programs
for the Board relating to conflicts of interest, rates of compensation,
and such other matters as the Board considers appropriate;
(5) to allocate, assess, and collect fees established pursuant to section
6(c); and
(6) to enter into agreements, incur liabilities, and do any and all other
acts and things necessary, appropriate, or incidental to the conduct of
its operations and the exercise of its obligations, rights, and powers imposed
or granted by this Act.
SEC. 10. RULES AND BYLAWS.
The Board shall establish such rules and bylaws as the Board determines necessary--
(1) to provide for the operation and administration of the Board, the exercise
of its authority, and the performance of its responsibilities under this
Act;
(2) to permit, as the Board determines necessary or appropriate, delegation
by the Board of any of its functions to an individual member or employee
of the Board, or to a division of the Board, including functions with respect
to hearing, determining, ordering, certifying, reporting, or otherwise acting
as to any matter; and
(3) to otherwise carry out this Act.
SEC. 11. CONSULTATION WITH FEDERAL AGENCIES.
The Board shall coordinate with other Federal and State agencies as necessary
to assist and advise the Board in performing its duties under this Act.
SEC. 12. DEFINITIONS.
For purposes of this Act, the following definitions shall apply:
(1) BOARD- The term `Board' means the Reinsurance International Solvency
Standards Evaluation Board established by section 2.
(2) CEDING INSURER- The term `ceding insurer' means an insurer that purchases
reinsurance.
(3) DOMICILED- The term `domiciled' means, with respect to an insurer or
reinsurer, to be incorporated or entered through, and licensed.
(4) DOMICILIARY STATE- The term `domiciliary State' means, with respect
to an insurer or reinsurer, the State in which the insurer or reinsurer
is domiciled.
(5) INSURANCE- The term `insurance' means any product, other than title
insurance, defined or regulated as insurance by the appropriate State insurance
regulatory authority.
(6) REINSURANCE- The term `reinsurance' means the assumption by an insurer
of all or part of a risk undertaken by another insurer.
(7) REINSURANCE SUPERVISORY SYSTEM- The term `reinsurance supervisory system'
means, with respect to a State or foreign jurisdiction, the agency, board,
commission, or other entity that has primary regulatory authority over the
business of reinsurance for the State or jurisdiction.
(8) STATE- The term `State' means the States of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern
Mariana Islands, Guam, the Virgin Islands, American Samoa, any other territory
or possession of the United States.
(9) STATE INSURANCE REGULATORY AUTHORITY- The term `State insurance regulatory
authority' means, with respect to a State, the officer, agency, board, commission,
or other entity of a State that has primary regulatory authority over the
business of insurance for the State.
SEC. 13. LOAN FOR INITIAL FUNDING.
(a) In General- Upon the initial appointment of all of the members of the
Board, the Secretary of the Treasury shall make a direct loan to the Board
of $10,000,000, which shall be available only for use for operational and
administrative costs of the Board in carrying out its duties under this Act.
(b) Terms- The loan under this section shall--
(1) be repaid not later than the expiration of the 5-year period beginning
upon the making of the loan; and
(2) bear interest at the annual rate of interest paid under marketable obligations
of the United States having comparable maturities and most recently issued
by the Secretary of the Treasury before the making of the loan under this
section.
(c) Authorization of Appropriations for Costs- There is authorized to be appropriated
such sums as may be necessary for the costs (as such term is defined in section
502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of the loan
under this section.
END
