The Text of the Dodd-Frank Act
International Association of
Risk and Compliance Professionals (IARCP)
Dodd Frank Act Section 502
SEC. 502. FEDERAL INSURANCE OFFICE.
(a) ESTABLISHMENT OF OFFICE.—Subchapter
I of chapter 3 of subtitle I of title 31, United States Code, is
(1) by redesignating section 312 as section 315;
(2) by redesignating section 313 as section 312; and
(3) by inserting after section 312 (as so redesignated) the
following new sections:
FEDERAL INSURANCE OFFICE.
ESTABLISHMENT.—There is established within the Department
of the Treasury the Federal Insurance Office.
LEADERSHIP.—The Office shall be headed by a Director, who
shall be appointed by the Secretary of the Treasury.
position of Director shall be a career reserved position in the
Senior Executive Service, as that position is defined under
section 3132 of title 5, United States Code.
AUTHORITY PURSUANT TO DIRECTION OF
The Office, pursuant to the direction
of the Secretary, shall have the authority—
monitor all aspects of the insurance industry, including
identifying issues or gaps in the regulation of insurers that
could contribute to a systemic crisis in the insurance industry or
the United States financial system;
‘‘(B) to monitor the
extent to which traditionally underserved communities and
consumers, minorities (as such term is defined in section 1204(c)
of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 1811 note)), and low- and moderate-income
persons have access to affordable insurance products regarding all
lines of insurance, except health insurance;
recommend to the Financial Stability Oversight Council that it
designate an insurer, including the affiliates of such insurer, as
an entity subject to regulation as a nonbank financial company
supervised by the Board of Governors pursuant to title I of the
Dodd-Frank Wall Street Reform and Consumer Protection Act;
‘‘(D) to assist the Secretary in administering the Terrorism
Insurance Program established in the Department of the Treasury
under the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701
‘‘(E) to coordinate Federal efforts and develop
Federal policy on prudential aspects of international insurance
matters, including representing the United States, as appropriate,
in the International Association of Insurance Supervisors (or a
successor entity) and assisting the Secretary in negotiating
covered agreements (as such term is defined in subsection (r));
‘‘(F) to determine, in accordance with subsection (f), whether
State insurance measures are preempted by covered agreements;
‘‘(G) to consult with the States (including State insurance
regulators) regarding insurance matters of national importance and
prudential insurance matters of international importance; and
‘‘(H) to perform such other related duties and authorities as
may be assigned to the Office by the Secretary.
ADVISORY FUNCTIONS.—The Office shall
advise the Secretary on major domestic and prudential
international insurance policy issues.
ADVISORY CAPACITY ON COUNCIL.—The
Director shall serve in an advisory capacity on the Financial
Stability Oversight Council established under the Financial
Stability Act of 2010.
‘‘(d) SCOPE.—The authority of the
Office shall extend to all lines of insurance except—
‘‘(1) health insurance, as determined by the Secretary in
coordination with the Secretary of Health and Human Services based
on section 2791 of the Public Health Service Act (42
‘‘(2) long-term care insurance, except long-term
care insurance that is included with life or annuity insurance
components, as determined by the Secretary in coordination with
the Secretary of Health and Human Services, and in the case of
long-term care insurance that is included with such components,
the Secretary shall coordinate with the Secretary of Health and
Human Services in performing the functions of the Office; and
‘‘(3) crop insurance, as established by the Federal Crop
Insurance Act (7 U.S.C. 1501 et seq.).
GATHERING OF INFORMATION.—
‘‘(1) IN GENERAL.—In carrying out the
functions required under subsection (c), the Office may—
‘‘(A) receive and collect data and information on and from the
insurance industry and insurers;
‘‘(B) enter into
‘‘(C) analyze and
disseminate data and information; and
‘‘(D) issue reports
regarding all lines of insurance except health insurance.
‘‘(2) COLLECTION OF INFORMATION FROM
INSURERS AND AFFILIATES.—
IN GENERAL.—Except as provided in paragraph (3), the Office
may require an insurer, or any affiliate of an insurer, to submit
such data or information as the Office may reasonably require in
carrying out the functions described under subsection (c).
‘‘(B) RULE OF CONSTRUCTION.—Notwithstanding
any other provision of this section, for purposes of subparagraph
(A), the term ‘insurer’ means any entity that writes insurance or
reinsures risks and issues contracts or policies in 1 or more
‘‘(3) EXCEPTION FOR SMALL
INSURERS.—Paragraph (2) shall not apply with respect to any
insurer or affiliate thereof that meets a minimum size threshold
that the Office may establish, whether by order or rule.
‘‘(4) ADVANCE COORDINATION.—Before
collecting any data or information under paragraph (2) from an
insurer, or affiliate of an insurer, the Office shall coordinate
with each relevant Federal agency and State insurance regulator
(or other relevant Federal or State regulatory agency, if any, in
the case of an affiliate of an insurer) and any publicly available
sources to determine if the information to be collected is
available from, and may be obtained in a timely manner by, such
Federal agency or State insurance regulator, individually or
collectively, other regulatory agency, or publicly available
If the Director determines that such data or
information is available, and may be obtained in a timely manner,
from such an agency, regulator, regulatory agency, or source, the
Director shall obtain the data or information from such agency,
regulator, regulatory agency, or source.
If the Director
determines that such data or information is not so available, the
Director may collect such data or information from an insurer (or
affiliate) only if the Director complies with the requirements of
subchapter I of chapter 35 of title 44, United States Code
(relating to Federal information policy; commonly known as the
Paperwork Reduction Act), in collecting such data or information.
Notwithstanding any other provision of law, each such
relevant Federal agency and State insurance regulator or other
Federal or State regulatory agency is authorized to provide to the
data or information.
RETENTION OF PRIVILEGE.—The
submission of any nonpublicly available data and information to
the Office under this subsection shall not constitute a waiver of,
or otherwise affect, any privilege arising under Federal or State
law (including the rules of any Federal or State court) to which
the data or information is otherwise subject.
CONTINUED APPLICATION OF PRIOR
CONFIDENTIALITY AGREEMENTS.—Any requirement under Federal
or State law to the extent otherwise applicable, or any
requirement pursuant to a written agreement in effect between the
original source of any nonpublicly available data or information
and the source of such data or information to the Office,
regarding the privacy or confidentiality of any data or
information in the possession of the source to the Office, shall
continue to apply to such data or information after the data or
information has been provided pursuant to this subsection to the
AGREEMENT.—Any data or information obtained by the Office
may be made available to State insurance regulators, individually
or collectively, through an information-sharing agreement that—
‘‘(i) shall comply with applicable Federal law; and
‘‘(ii) shall not constitute a waiver of, or otherwise affect, any
privilege under Federal or State law (including the rules of any
Federal or State court) to which the data or information is
DISCLOSURE REQUIREMENTS.—Section 552 of title 5, United
States Code, shall apply to any data or information submitted to
the Office by an insurer or an affiliate of an insurer.
‘‘(6) SUBPOENAS AND ENFORCEMENT.—The
Director shall have the power to require by subpoena the
production of the data or information requested under paragraph
(2), but only upon a written finding by the Director that such
data or information is required to carry out the functions
described under subsection (c) and that the Office has coordinated
with such regulator or agency as required under paragraph (4).
Subpoenas shall bear the signature of the Director and shall
be served by any person or class of persons designated by the
Director for that purpose. In the case of contumacy or failure to
obey a subpoena, the subpoena shall be enforceable by order of any
appropriate district court of the United States.
failure to obey the order of the court may be punished by the
court as a contempt of court.
PREEMPTION OF STATE INSURANCE MEASURES.—
STANDARD.—A State insurance measure
shall be preempted pursuant to this section or section 314 if, and
only to the extent that the Director determines, in accordance
with this subsection, that the measure—
‘‘(A) results in
less favorable treatment of a non-United States insurer domiciled
in a foreign jurisdiction that is subject to a covered agreement
than a United States insurer domiciled, licensed, or otherwise
admitted in that State; and
‘‘(B) is inconsistent with a
OF POTENTIAL INCONSISTENCY.—Before making any determination
under paragraph (1), the Director shall—
‘‘(i) notify and
consult with the appropriate State regarding any potential
inconsistency or preemption;
‘‘(ii) notify and consult with
the United States Trade Representative regarding any potential
inconsistency or preemption;
‘‘(iii) cause to be published
in the Federal Register notice of the issue regarding the
potential inconsistency or preemption, including a description of
each State insurance measure at issue and any applicable covered
‘‘(iv) provide interested parties a reasonable
opportunity to submit written comments to the Office; and
‘‘(v) consider any comments received.
SCOPE OF REVIEW.—For purposes of this
subsection, any determination of the Director regarding State
insurance measures, and any preemption under paragraph (1) as a
result of such determination, shall be limited to the subject
matter contained within the covered agreement involved and shall
achieve a level of protection for insurance or reinsurance
consumers that is substantially equivalent to the level of
protection achieved under State insurance or reinsurance
‘‘(C) NOTICE OF
DETERMINATION OF INCONSISTENCY.—
Upon making any
determination under paragraph (1), the Director shall—
‘‘(i) notify the appropriate State of the determination and the
extent of the inconsistency;
‘‘(ii) establish a reasonable
period of time, which shall not be less than 30 days, before the
determination shall become effective; and
the Committees on Financial Services and Ways and Means of the
House of Representatives and the Committees on Banking, Housing,
and Urban Affairs and Finance of the Senate.
NOTICE OF EFFECTIVENESS.—Upon the
conclusion of the period referred to in paragraph (2)(C)(ii), if
the basis for such determination still exists, the determination
shall become effective and the Director shall—
to be published a notice in the Federal Register that the
preemption has become effective, as well as the effective date;
‘‘(B) notify the appropriate State.
LIMITATION.—No State may enforce a
State insurance measure to the extent that such measure has been
preempted under this subsection.
APPLICABILITY OF ADMINISTRATIVE PROCEDURES
Determinations of inconsistency made pursuant
to subsection (f)(2) shall be subject to the applicable provisions
of subchapter II of chapter 5 of title 5, United States Code
(relating to administrative procedure), and chapter 7 of such
title (relating to judicial review), except that in any action for
judicial review of a determination of inconsistency, the court
shall determine the matter de novo.
REGULATIONS, POLICIES, AND PROCEDURES.
—The Secretary may issue orders, regulations, policies, and
procedures to implement this section.
CONSULTATION.—The Director shall
consult with State insurance regulators, individually or
collectively, to the extent the Director determines appropriate,
in carrying out the functions of the Office.
SAVINGS PROVISIONS.—Nothing in this
‘‘(A) any State
insurance measure that governs any insurer’s rates, premiums,
underwriting, or sales practices;
‘‘(B) any State coverage
requirements for insurance;
‘‘(C) the application of the
antitrust laws of any State to the business of insurance; or
‘‘(D) any State insurance measure governing the capital or
solvency of an insurer, except to the extent that such State
insurance measure results in less favorable treatment of a
non-United State insurer than a United States insurer;
‘‘(2) be construed to alter, amend, or limit any provision of the
Consumer Financial Protection Agency Act of 2010; or
affect the preemption of any State insurance measure otherwise
inconsistent with and preempted by Federal law.
RETENTION OF EXISTING STATE REGULATORY
Nothing in this section or section 314
shall be construed to establish or provide the Office or the
Department of the Treasury with general supervisory or regulatory
authority over the business of
RETENTION OF AUTHORITY OF FEDERAL FINANCIAL
—Nothing in this section or
section 314 shall be construed to limit the authority of any
Federal financial regulatory agency, including the authority to
develop and coordinate policy, negotiate, and enter into
agreements with foreign governments, authorities, regulators, and
multinational regulatory committees and to preempt State measures
to affect uniformity with international regulatory agreements.
‘‘(m) RETENTION OF AUTHORITY OF UNITED
STATES TRADE REPRESENTATIVE.—
Nothing in this
section or section 314 shall be construed to affect the authority
of the Office of the United States Trade Representative pursuant
to section 141 of the Trade Act of 1974 (19 U.S.C. 2171) or any
other provision of law, including authority over the development
and coordination of United States international trade policy and
the administration of the United States trade agreements program.
‘‘(n) ANNUAL REPORTS TO CONGRESS.—
‘‘(1) SECTION 313(f) REPORTS.—Beginning
September 30, 2011, the Director shall submit a report on or
before September 30 of each calendar year to the President and to
the Committees on Financial Services and Ways and Means of the
House of Representatives and the Committees on Banking, Housing,
and Urban Affairs and Finance of the Senate on any actions taken
by the Office pursuant to subsection (f) (regarding preemption of
inconsistent State insurance measures).
INSURANCE INDUSTRY.—Beginning September 30, 2011, the
Director shall submit a report on or before September 30 of each
calendar year to the President and to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate on the insurance
industry and any other information as deemed relevant by the
Director or requested by such Committees.
REPORTS ON U.S. AND GLOBAL REINSURANCE MARKET.—
Director shall submit to the Committee on Financial Services of
the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate—
‘‘(1) a report
received not later than September 30, 2012, describing the breadth
and scope of the global reinsurance market and the critical role
such market plays in supporting insurance in the United States;
‘‘(2) a report received not later than January 1, 2013,
an updated not later than January 1, 2015, describing the impact
of part II of the Nonadmitted and Reinsurance Reform Act of 2010
on the ability of State regulators to access reinsurance
information for regulated companies in their jurisdictions.
‘‘(p) STUDY AND REPORT ON REGULATION OF
‘‘(1) IN GENERAL.—Not
later than 18 months after the date of enactment of this section,
the Director shall conduct a study and submit a report to Congress
on how to modernize and
improve the system of insurance
regulation in the United States.
CONSIDERATIONS.—The study and report
required under paragraph (1) shall be based on and guided by the
‘‘(A) Systemic risk regulation
with respect to insurance.
‘‘(B) Capital standards and the
relationship between capital allocation and liabilities, including
standards relating to liquidity and duration risk.
Consumer protection for insurance products and practices,
including gaps in State regulation.
‘‘(D) The degree of
national uniformity of State insurance regulation.
The regulation of insurance companies and affiliates on a
‘‘(F) International coordination of
ADDITIONAL FACTORS.—The study and report required under
paragraph (1) shall also examine the following factors:
‘‘(A) The costs and benefits of potential Federal regulation of
insurance across various lines of insurance (except health
‘‘(B) The feasibility of regulating only
certain lines of insurance at the Federal level, while leaving
other lines of insurance to be regulated at the State level.
‘‘(C) The ability of any potential Federal regulation or
Federal regulators to eliminate or minimize regulatory arbitrage.
‘‘(D) The impact that developments in the regulation of
insurance in foreign jurisdictions might have on the potential
Federal regulation of insurance.
‘‘(E) The ability of any
potential Federal regulation or Federal regulator to provide
robust consumer protection for policyholders.
potential consequences of subjecting insurance companies to a
Federal resolution authority, including the effects of any Federal
‘‘(i) on the operation of State
insurance guaranty fund systems, including the loss of guaranty
fund coverage if an insurance company is subject to a Federal
‘‘(ii) on policyholder protection,
including the loss of the priority status of policyholder claims
over other unsecured general creditor claims;
the case of life insurance companies, on the loss of the special
status of separate account assets and separate account
‘‘(iv) on the international
competitiveness of insurance companies.
‘‘(G) Such other
factors as the Director determines necessary or appropriate,
consistent with the principles set forth in paragraph (2).
‘‘(4) REQUIRED RECOMMENDATIONS.—The
study and report required under paragraph (1) shall also contain
any legislative, administrative, or regulatory recommendations, as
the Director determines appropriate, to carry out or effectuate
the findings set forth in such report.
CONSULTATION.—With respect to the
study and report required under paragraph (1), the Director shall
consult with the State insurance regulators, consumer
organizations, representatives of the insurance industry and
policyholders, and other organizations and experts, as
‘‘(q) USE OF EXISTING
RESOURCES.—To carry out this section, the Office may employ
personnel, facilities, and any other resource of the Department of
the Treasury available to the Secretary and the Secretary shall
dedicate specific personnel to the Office.
DEFINITIONS.—In this section and section 314, the following
definitions shall apply:
AFFILIATE.—The term ‘affiliate’ means, with respect to an
insurer, any person who controls, is controlled by, or is under
common control with the insurer.
COVERED AGREEMENT.—The term ‘covered agreement’ means a
written bilateral or multilateral agreement regarding prudential
measures with respect to the business of insurance or reinsurance
‘‘(A) is entered into between the United States and
one or more foreign governments, authorities, or regulatory
‘‘(B) relates to the recognition of
prudential measures with respect to the business of insurance or
reinsurance that achieves a level of protection for insurance or
reinsurance consumers that is substantially equivalent to the
level of protection achieved under State insurance or reinsurance
term ‘insurer’ means any person engaged in the business of
insurance, including reinsurance.
FEDERAL FINANCIAL REGULATORY AGENCY.—The
term ‘Federal financial regulatory agency’ means the Department of
the Treasury, the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, the Office
of Thrift Supervision, the Securities and Exchange Commission, the
Commodity Futures Trading Commission, the Federal Deposit
Insurance Corporation, the Federal Housing Finance Agency, or the
National Credit Union Administration.
NON-UNITED STATES INSURER.—The term ‘non-United States
insurer’ means an insurer that is organized under the laws of a
jurisdiction other than a State, but does not include any United
States branch of such an insurer.
OFFICE.—The term ‘Office’ means the
Federal Insurance Office established by this section.
STATE INSURANCE MEASURE.—The term
‘State insurance measure’ means any State law, regulation,
administrative ruling, bulletin, guideline, or practice relating
to or affecting prudential measures applicable to insurance or
‘‘(8) STATE INSURANCE
REGULATOR.—The term ‘State insurance regulator’ means any
State regulatory authority responsible for the supervision of
EQUIVALENT TO THE LEVEL OF PROTECTION ACHIEVED.
term ‘substantially equivalent to the level of protection
achieved’ means the prudential measures of a foreign government,
authority, or regulatory entity achieve a similar outcome in
consumer protection as the outcome achieved under State insurance
or reinsurance regulation.
UNITED STATES INSURER.—The term ‘United States insurer’
‘‘(A) an insurer that is organized under the laws of
a State; or
‘‘(B) a United States branch of a non-United
OF APPROPRIATIONS.—There are authorized to be appropriated
for the Office for each fiscal year such sums as may be necessary.
‘‘SEC. 314. COVERED AGREEMENTS.
‘‘(a) AUTHORITY.—The Secretary and the United States Trade
Representative are authorized, jointly, to negotiate and enter
into covered agreements on behalf of the United States.
‘‘(b) REQUIREMENTS FOR CONSULTATION WITH
‘‘(1) IN GENERAL.—Before initiating
negotiations to enter into a covered agreement under subsection
(a), during such negotiations, and before entering into any such
agreement, the Secretary and the United States Trade
Representative shall jointly consult with the Committee on
Financial Services and the Committee on Ways and Means of the
House of Representatives and the Committee on Banking, Housing,
and Urban Affairs and the Committee on Finance of the Senate.
‘‘(2) SCOPE.—The consultation
described in paragraph (1) shall include consultation with respect
‘‘(A) the nature of the agreement;
‘‘(B) how and
to what extent the agreement will achieve the applicable purposes,
policies, priorities, and objectives of section 313 and this
‘‘(C) the implementation of the agreement,
including the general effect of the agreement on existing State
‘‘(c) SUBMISSION AND LAYOVER
—A covered agreement under subsection
(a) may enter into force with respect to the United States only
‘‘(1) the Secretary and the United States Trade
Representative jointly submit to the congressional committees
specified in subsection (b)(1), on a day on which both Houses of
Congress are in session, a copy of the final legal text of the
‘‘(2) a period of 90 calendar days beginning
on the date on which the copy of the final legal text of the
agreement is submitted to the congressional committees under
(1) has expired.’’.
DUTIES OF SECRETARY.—Section 321(a)
of title 31, United States Code, is amended—
paragraph (7), by striking ‘‘; and’’ and inserting a semicolon;
(2) in paragraph (8)(C), by striking the period at the end and
inserting ‘‘; and’’; and
(3) by adding at the end the
following new paragraph:
‘‘(9) advise the President on
major domestic and international prudential policy issues in
connection with all lines of insurance except health insurance.’’.
(c) CLERICAL AMENDMENT.—The table
of sections for subchapter I of chapter 3 of title 31, United
States Code, is amended by striking the item relating to section
312 and inserting the following new items:
Terrorism and financial intelligence.
‘‘Sec. 313. Federal
‘‘Sec. 314. Covered agreements.
315. Continuing in office.’’.
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