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H.R. 5059: State Insurance Regulation Preservation Act

The text of the bill below is as of Sep 17, 2018 (Referred to Senate Committee).


IIB

115th CONGRESS

2d Session

H. R. 5059

IN THE SENATE OF THE UNITED STATES

September 17, 2018

Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs

AN ACT

To amend the Home Owners’ Loan Act with respect to the registration and supervision of insurance savings and loan holding companies, and for other purposes.

1.

Short title

This Act may be cited as the State Insurance Regulation Preservation Act.

2.

Supervision of insurance savings and loan holding companies

(a)

Definitions

Section 10(a)(1) of the Home Owners’ Loan Act (12 U.S.C. 1467a(a)(1)) is amended by inserting at the end the following:

(K)

Domicile

The term domicile means the State in which an insurance underwriting company or the holding company for such company is incorporated, chartered, or organized.

(L)

Business of insurance

The term business of insurance means any activity that is regulated in accordance with the relevant State insurance laws and regulations, including the writing of insurance and the reinsuring of risks.

(M)

Insurance savings and loan holding company

The term insurance savings and loan holding company means—

(i)

a savings and loan holding company with 75 percent or more of its total consolidated assets in an insurance underwriting company (or insurance underwriting companies), other than assets associated with insurance for credit risk, during the 4 most recent consecutive quarters, as calculated in accordance with Generally Accepted Accounting Principles or the Statutory Accounting Principles in accordance with State law;

(ii)

a company that—

(I)

was a savings and loan holding company as of July 21, 2010, and through date of enactment of this clause; and

(II)

was not subject to the Basel III capital regulation promulgated by the Board of Governors of the Federal Reserve System and the Comptroller of the Currency on October 11, 2013 (78 Fed. Reg. 62018), because the savings and loan holding company held 25 percent or more of its total consolidated assets in subsidiaries that are insurance underwriting companies (other than assets associated with insurance for credit risk); or

(iii)

a top-tier savings and loan holding company that—

(I)

was registered as a savings and loan holding company before July 21, 2010; and

(II)

is a New York not-for-profit corporation formed for the purpose of holding the stock of a New York insurance company.

(N)

Insurance underwriting company

The term insurance underwriting company means an insurer that is subject to regulation by a State insurance authority of the insurer’s domicile.

(O)

State insurance authority

The term State insurance authority means the State insurance authority of the State in which an insurance underwriting company or holding company for such company is domiciled.

(P)

Top-tier savings and loan holding company

The term top-tier savings and loan holding company means the ultimate parent company in a savings and loan holding company structure.

.

(b)

Registration

Section 10(b)(1) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)(1)) is amended by inserting at the end the following new sentence:

A savings and loan holding company that is an insurance savings and loan holding company shall register as an insurance savings and loan holding company.

.

(c)

Reports

Section 10(b)(2) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)(2)) is amended by adding at the end the following new subparagraph:

(D)

Insurance savings and loan holding companies

The Board, to the fullest extent possible, shall request reports and other information filed by insurance savings and loan holding companies and any insurance underwriting company that is a subsidiary of such company with other Federal authorities and the State insurance authority for such company before requesting such reports or information from the insurance savings and loan holding company or any insurance underwriting company that is a subsidiary of such company.

(E)

Rule of construction

Nothing in this section may be construed as prohibiting the Board from requesting reports and other information that is not otherwise collected and shared with other Federal or State authorities.

.

(d)

Books and records

Section 10(b)(3) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)(3)) is amended—

(1)

by striking Each and inserting the following:

(A)

In general

Each

; and

(2)

by inserting at the end the following new subparagraph:

(B)

Insurance savings and loan holding companies

The Board, to the fullest extent possible, shall align any prescribed recordkeeping requirements for an insurance savings and loan holding company with the recordkeeping requirements imposed by the State insurance authority of such company and any insurance underwriting company that is a subsidiary of such company.

.

(e)

Examinations

Section 10(b)(4)(C) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)(4)(C)) is amended—

(1)

in clause (i), by striking the word and at the end;

(2)

in clause (ii), by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following new clause:

(iii)

Insurance savings and loan holding companies

(I)

Coordination

The Board, to the fullest extent possible, shall coordinate examinations of an insurance savings and loan holding company in conjunction with the State insurance authority of such company and any insurance underwriting company that is a subsidiary of such company and other State and Federal authorities in order to minimize the potential for duplication and conflict between the examinations conducted by the Board and the examinations conducted by other State and Federal authorities.

(II)

Scope and frequency

Following public notice and comment, the Board shall establish a schedule for the frequency and the scope of examinations of insurance savings and loan holding companies that is consistent with the supervisory framework required by paragraph (7).

.

(f)

Supervision

Section 10(b) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)) is amended by inserting at the end the following new paragraph:

(7)

Insurance savings and loan holding companies

(A)

Tailored supervision

The Board, by rule, shall establish a supervisory framework for insurance savings and loan holding companies that—

(i)

is tailored to the unique risks, operations, and activities of insurance savings and loan holding companies; and

(ii)

to the fullest extent possible, and consistent with the safe and sound operation of insurance savings and loan holding companies, does not unnecessarily duplicate the supervision of insurance underwriting companies by the State insurance authorities for such companies or insurance underwriting companies that are subsidiaries of such companies.

(B)

Review of supervisory guidance

Following public notice and comment, the Board shall review and revise supervisory policy letters and guidance applicable to insurance savings and loan holding companies to ensure that such letters and guidance are not inconsistent with the supervisory framework required by this paragraph.

.

3.

Assessments and fees for insurance savings and loan holding companies

Section 11(s) of the Federal Reserve Act (12 U.S.C. 248(s)), which relates to assessments and fees, is amended by inserting at the end the following new paragraph:

(4)

Excluded assets

For purposes of paragraph (2)(B), the total consolidated assets of an insurance savings and loan holding company, as defined in section 10(a)(1)(L) of the Home Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(L)), shall not include assets attributable to the business of insurance conducted by such company or any affiliate of such company, other than assets associated with insurance for credit risk.

.

4.

Implementation

(a)

Implementation of supervisory framework

The Board shall establish the supervisory framework required by section 10(b)(7) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)(7)), as added by this Act, within 24 months of the date of enactment of this Act.

(b)

Review of supervisory guidance

The Board shall complete the review of supervisory policy letters and policy guidance required by section 10(b)(7) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)(7)), as added by this Act, within 30 months of the date of enactment of this Act.

(c)

Report to congress

The Board, no later than 36 months after the date of enactment of this Act, shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the implementation of this Act.

(d)

Board defined

As used in this section, the term Board means the Board of Governors of the Federal Reserve System.

5.

Relationship to other laws

This Act and the amendments made by this Act shall not limit any authority over insurance savings and loan holding companies (as defined under section 10(a)(1) of the Home Owners’ Loan Act) that is provided by a Federal law other than the Home Owners’ Loan Act.

6.

Rulemaking Authority

The Board may issue regulations and orders as may be necessary to—

(1)

administer and carry out this Act and the amendments made by this Act; and

(2)

prevent evasions of this Act and the amendments made by this Act.

7.

Rule of construction

Nothing in this Act or the amendments made by this Act may be construed to affect the authority of the Board of Governors of the Federal Reserve System over any subsidiary of an insurance savings and loan holding company that is not an insurance underwriting company (as such terms are defined, respectively, under section 10(a)(1) of the Home Owners’ Loan Act).

Passed the House of Representatives September 12, 2018.

Karen L. Haas,

Clerk