Insurance Protection Act of 1991

Summary

Insurance Protection Act of 1991 - Title I: Insurance Regulatory Commission - Establishes the Insurance Regulatory Commission. Authorizes the Commission to conduct investigations, assess insurers and reinsurers to pay Commission expenses, certify State insurance departments, and examine interstate insurers. Requires the Commission to: (1) collect insurance data, including periodic statements by interstate insurers and information on State and Federal regulatory and legal actions involving any person engaged in the business of insurance; (2) refer to the Department of Justice matters warranting possible civil or criminal enforcement; (3) establish a Securities Valuation Office; (4) set mandatory reserves for life insurers and fraternal benefits societies; and (5) establish minimum standards for banks that issue letters of credit for reinsurance. Title II: Federal Minimum Standards - Mandates that the Commission: (1) establish minimum standards which must be implemented by State insurance departments; (2) establish minimum capital and surplus requirements; (3) create and maintain uniform annual insurer statement forms and accounting procedures; (4) establish standards for identifying insurers in hazardous condition; (5) ensure effective and comprehensive regulation of the financial condition of an insurer in a holding company system; (6) prescribe the amount of risk which may be retained by a property and liability company for an individual risk; (7) regulate insurer investments; (8) prescribe assets which may be admitted, authorized, or allowed as assets in the insurer's financial statement; (9) prescribe liabilities and reserves resulting from contracts issued; (10) require annual audits; (11) require an annual actuarial analysis; (12) prescribe requirements for the transfer of policies from one insurer to another; (13) restrict ownership and transfer of ownership of an insurer; (14) prescribe consumer disclosure prior to policy purchase, allow cancellation by the consumer, establish simplification and standardization requirements, and require seller good faith and fair dealing; (15) require State insurance departments to provide information that will assist consumers in making informed insurance purchase decisions; (16) require real estate holdings held as assets to be valued at market value; (17) regulate reinsurance; (18) restrict the use of surplus notes and other financial devices in certain circumstances; and (19) prescribe standards for the adequacy of State insurance department resources. Title III: Reinsurance - Requires the Commission to establish requirements as necessary for the effective regulation of reinsurance. Establishes in the Commission the Office of Reinsurance Regulation. Requires the Reinsurance Office to promulgate rules and regulations on specified matters. Prohibits transacting the business of reinsurance without complying with this Act. Preempts conflicting State laws. Provides for supervision, conservation, and rehabilitation of a reinsurer, with the Director of the Reinsurance Office acting as receiver when appointed under this title. Grants U.S. district courts exclusive jurisdiction to appoint the Director and supervise the reinsurer's rehabilitation. Requires the Director to examine reinsurers as often as necessary to assure solidity and proper functioning. Title IV: The National Insurance Guaranty Corporation - Establishes the National Insurance Guaranty Corporation, as a nonprofit instrumentality of the United States, to: (1) provide for the payment of covered claims; (2) assess the cost of doing so; and (3) provide a uniform national system of administration for the liquidation of insolvent member insurers. Prohibits direct or indirect Federal financial assistance, except as provided in specified provisions. Requires the Corporation's Board to: (1) establish guarantee fund accounts for specified principal lines of insurance; and (2) determine to what extent, if any, reinsurance is covered under this title. Establishes the National Guaranty Fund to carry out this title. Declares that member insurers shall be all insurers with an interstate insurance license. Subjects all members to assessments to cover any expense under this title and title V. Relieves members of liability under any State law or State guaranty fund regarding an insurance insolvency not commenced before enactment of this Act. Exempts the Corporation from all Federal, State, and local taxes, except for State, Territorial, or local real property taxes. Provides for taxation when the Corporation is acting as a liquidator. Prohibits any State from assessing an insurer with an interstate insurance license for any insurer insolvency occurring two years after enactment of this Act. Title V: Liquidation of Member Insurers - Requires that the Corporation act as receiver of a member insurer for liquidation. Grants U.S. district courts exclusive jurisdiction over a proceeding to appoint the Corporation as liquidator and to supervise the liquidation. Sets forth liquidation procedures and policies. Requires evidence of wrongdoing to be referred to the Commission and the appropriate State regulator. Makes the Corporation the exclusive liquidator of insolvent members. Title VI: Criminal Penalties - Amends the Federal criminal code to impose civil and criminal penalties for certain actions, including false statements, misappropriation of money, false records, corrupt influence or obstruction, conducting interstate insurance or reinsurance without authorization, and participation or permitting participation in the business of insurance after a previous conviction. Requires charges to be filed within ten years after the offense. Imposes civil and criminal penalties for disclosure of the existence, contents, or information gained from a subpoena for records regarding such offenses. Provides for criminal forfeiture of property gained as a result of such offenses. Includes proceedings before any Federal or State insurance regulatory official or examiner in the definition of "official proceeding" for provisions relating to tampering with or retaliating against a witness, victim, or informant.

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2 official files

• Introduced in Senate (text)

  Introduced in Senate · EN

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• Introduced in Senate

  summary · EN · 2 August 1991

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