Federal Insurance Solvency Act of 1992

Federal Insurance Solvency Act of 1992 - Title I: Establishment of Federal Insurance Solvency Commission - Establishes the Federal Insurance Solvency Commission (the Commission) as an independent regulatory agency, whose members shall be appointed by the President with the advice and consent of the Senate, to oversee the financial soundness and solvency of the insurance industry.

Sets forth the Commission's powers. Directs the Commission to investigate each insolvent insurer or reinsurer which holds a Federal certificate of solvency to determine the causes of the insolvency. Authorizes the Commission to investigate the insolvencies of other insurers relevant to the financial condition of the national insurance industry. Authorizes the Commission to refer to State and Federal enforcement authorities any matters warranting investigation for possible civil or criminal enforcement action.

Requires the Commission to establish and regularly update an information data base regarding persons who have been convicted of a crime or administratively disciplined for insurance related activity, or who have been senior officers or directors of insolvent insurers or reinsurers. Requires that such information be shared with appropriate State and Federal regulators and law enforcement officials. Requires all certified insurers and reinsurers to cooperate with the Commission's implementation of the data base as a condition of their continued certification.

Requires the Commission to submit annual reports to the President and the Congress.

Establishes the Federal Insurance Regulation Advisory Committee (whose members shall be appointed by the Commission) to confer with the Commission, and request information and make recommendations regarding the insurance and reinsurance industry. Requires it to report annually to the Commission and certain congressional committees.

Sets forth a fee schedule to be assessed and collected annually by the Commission from applicants for certificates and certificate holders in order to recover certification costs. Provides for late fee payment penalties. Authorizes the Commission to revoke certificates for failure to make fee or penalty payments.

Authorizes appropriations, including appropriations for rehabilitation and liquidation expenses incurred by the Commission in its capacity as receiver.

Title II: Federal Certificates of Solvency for Insurers - Authorizes the Commission to issue Federal certificates of solvency to insurers. Directs the Commission to establish minimum financial standards for domestic insurers, including U.S. branches of foreign insurers, according to prescribed procedural and capitalization guidelines. Sets forth additional criteria for Federal solvency certificates for domestic and foreign insurers to write surplus line insurance.

Requires each federally certified insurer to be a member of the National Insurance Protection Corporation (NIPC) established by this Act. Declares that federally certified insurers which are approved surplus lines insurers shall not participate in the NIPC for the purpose of business written as a nonadmitted insurer under the surplus lines law of any State.

Authorizes the Commission to suspend or revoke a certificate of solvency for non-compliance with Commission standards. States that as a result of such action an insurer will lose NIPC membership status and will be prohibited from selling insurance unless the insurer complies with the solvency standards applicable in the States in which the insurer does business. Declares that policies written during suspension or after revocation shall not be covered by NIPC.

Subjects federally certified insurers to State regulatory schemes and oversight within certain permissible parameters. Delineates those State regulations and actions preempted by the Federal regulatory scheme for federally certified insurers. Grants the Commission authority to: (1) define those State regulatory schemes that have been preempted by this Act; and (2) issue orders to stay the effect of certain State laws or regulations, including those that subject federally certified insurers to discriminatory State action. Exempts from State regulations federally certified insurers designated as highly capitalized by the Commission, and permitted to provide commercial insurance coverage to a large insurance buyer. Vests the Commission with: (1) responsibility to establish standards for such insurers; and (2) exclusive Federal jurisdiction over complaints regarding the business conduct of such insurers with respect to large insurance buyers.

Title III: Federal Certificates for Providers of Reinsurance - Authorizes the Commission to establish standards and procedures for granting certificates: (1) for professional reinsurers; and (2) to provide reinsurance for certain other reinsurers and insurers.

Directs the Commission to: (1) require each certificate holder to submit an annual financial status report; (2) establish criteria for becoming a qualified financial institution for the purpose of establishing certain trust funds (thus permitting foreign banks with a United States presence to apply for such acceptance); and (3) establish procedures for consensual dispute resolution arising between reinsurance parties.

Grants the Commission exclusive regulatory jurisdiction over professional reinsurers doing business in the United States. Requires the Commission to establish standards and procedures for the certification and regulation of professional reinsurers. Outlines the certification standards.

Authorizes the Commission to issue reinsurance certificates to insurers and to certain reinsurers that do not seek professional reinsurer certification. Directs the Commission to establish certification standards and procedures for: (1) reinsurance; (2) trust funds; and (3) foreign applicants. Empowers the Commission to suspend or revoke a reinsurance certificate, or the certificate of a professional reinsurer, for noncompliance with such standards. Sets forth credit guidelines under which reinsurance may be counted as either an asset or a deduction from liabilities.

Exempts certain professional reinsurers certified under this Act from a State licensing or regulatory scheme regarding reinsurers or reinsurance transactions. Subjects to State insurance regulation insurers and reinsurers with reinsurance certificates issued to those that do not seek certification as professionals. Prohibits State law from discriminating against reinsurers based upon their Federal certification.

Title IV: Regulatory Enforcement - Directs the Commission to establish: (1) a schedule for examinations of federally certified insurers and reinsurers, including special examinations whenever the Commission determines that such persons may be in a financially hazardous or impaired condition; and (2) accounting standards for the accurate reporting of such persons' financial status.

Requires certified insurers and reinsurers to retain a qualified actuary to certify their reserves. Requires federally certified insurers to reinsurers who are incorporated and part of a holding company system to register with the Commission, furnishing information as to its structure and members.

Grants the Commission review and approval authority over mergers and acquisitions with a federally certified insurer or reinsurer. Requires the Commission to disapprove such transactions if they threaten the financial stability, soundness, or solvency of such entities, or substantially lessen competition in any line of insurance. Cites factors which the Commission shall consider when making a disapproval determination. Enumerates the criteria for transactions within a holding company system which includes a federally certified insurer or reinsurer. Requires the Commission's prior approval for transactions between a certified insurer or reinsurer and any affiliate within a holding company system if such transactions involve five percent or more of the assets at the last year-end.

Permits federally certified insurers or reinsurers that are part of a holding company system to affiliate with their counterparts that are not federally certified.

Grants the Commission exclusive jurisdiction over mergers, acquisitions, and transactions within a holding company system that has only federally certified insurers or reinsurers. Provides for shared jurisdiction between the Commission and State insurance regulators over a holding company system which includes both federally certified and non-federally certified insurers and reinsurers. Provides that if either regulator disapproves of a holding company system transaction within its respective jurisdiction, the transaction shall not proceed.

Grants the Commission civil penalty and enforcement powers, including a prohibition against voting of securities, and their seizure and sequestration for non-compliance with the requirements of this Act. Provides whistleblower protection and remedies to employees of federally certified insurers and reinsurers.

Title V: National Insurance Protection Corporation - Establishes the National Insurance Protection Corporation as a non-governmental, nonprofit corporation to provide: (1) timely payment and protection against losses; and (2) continuation of coverage in the event of financial impairment or insolvency of federally certificated insurers.

Grants the Commission oversight and supervisory powers over the NIPC. Declares that: (1) NIPC obligations are not covered by the full faith and credit of the United States; (2) it shall receive no financial assistance from or have any authority to borrow from the United States; and (3) funds due to or held by the NIPC shall not be included in the budget of the United States, nor may the United States borrow or pledge such funds.

Sets forth NIPC membership and corporate power structure. Requires the Commission to consult with the NIPC regarding the financial regulation of its member insurers, and to assure that the Commission implements this Act in a manner that does not impair the financial integrity of NIPC guaranty funds.

Establishes the NIPC Fund (the Fund) to pay NIPC administrative expenses and covered claims. Precludes the use of the Fund for any other purpose.

Specifies the scope of insurance contracts guaranteed under this Act, including property, life, health, and annuity coverage. Excludes specified forms of insurance from coverage under this Act.

Sets forth guidelines for assessments on NIPC member insurers. Grants the NIPC borrowing authority (subject to the prior approval of the Board of Directors).

Authorizes the Commission to: (1) apply to Federal district court in the event of NIPC refusal to comply with this Act; and (2) make examinations of the NIPC, and require it to furnish reports and records upon request. Requires the NIPC to submit an end-of-fiscal-year status report to the Commission for subsequent transmittal to the President and the Congress.

Requires the NIPC to give written notice to the Commission whenever it concludes that there have been changes in the insurance marketplace which may have a negative impact on the financial condition or solvency of federally certified insurers and reinsurers.

Limits the liability of member insurers under this Act exclusively to claims covered by NIPC assessments under this Act. Sets forth liability and assessment parameters for member insurers with respect to State law or a State guaranty fund.

Declares the NIPC shall not be deemed to be an insurer within the meaning of a State regulatory or tax scheme for the insurance industry. Exempts the NIPC from all taxes or levies imposed by any State or local governmental entity. Shields the NIPC and its personnel from liability for good faith actions or omissions in connection with this Act.

Shields licensed insurance producers from liability for damages resulting from the financial impairment or insolvency of a member insurer unless the producer intentionally placed or maintained coverage knowing of such insurer's impairment.

Requires the NIPC to: (1) prescribe the manner of advertising NIPC membership and consumer protection afforded by this Act; and (2) assist the Commission in developing improved standards for insolvency prevention and detection.

Sets forth the parameters of: (1) the obligation of the NIPC as guarantor of covered benefits for claims following the Commission's declaration that a member insurer is financially impaired or insolvent; and (2) the effect of claims paid by the NIPC.

Requires the NIPC to file with the Commission an annual statement of claims paid and estimates of claims anticipated. Provides for a stay of judicial proceedings regarding an insolvent member insurer in order to permit a proper defense by the NIPC of all pending causes of action.

Grants Federal district courts exclusive jurisdiction over litigation involving the NIPC.

Title VI: National Association of Registered Agents and Brokers - Establishes the National Association of Registered Agents and Brokers (NARAB) as a nonprofit, nongovernmental corporation to provide a mechanism by which the multi-State services of State-licensed insurance producers may be more efficiently provided to policyholders, while preserving the rights of States to regulate insurance producers. Subjects NARAB to the supervision and oversight of the Commission. States that funds held or due to NARAB shall not be included in the United States budget, nor may the United States borrow or pledge such funds.

Makes NARAB membership available to all State-licensed insurance agents, brokers, surplus lines brokers, insurance consultants, and limited insurance representatives. Outlines membership structure. Sets forth NARAB corporate powers and corporate structure. Requires the Commission to consult with NARAB concerning the regulation and activities of insurance producers. Grants NARAB borrowing authority, upon prior approval of the Board of Directors. Subjects all NARAB members that are insurance producers to assessments to cover administrative costs.

Authorizes the Commission to make examinations of NARAB and require it to furnish reports and records upon request. Requires NARAB to submit an end-of-fiscal-year status report to the Commission for subsequent transmittal to the President and the Congress.

Declares that NARAB shall not be deemed to be an insurer within the meaning of a State regulatory or tax scheme for the insurance industry. Exempts the NIPC from all taxes or levies imposed by any State or local governmental entity. Shields NARAB and its personnel from liability for good faith actions or omissions in connection with this Act.

Retains the States regulatory mechanisms regarding insurance producers. Preempts State regulatory mechanisms purporting to restrict NARAB members, or impose discriminatory conditions upon them.

Grants NARAB, subject to Commission review, authority to: (1) define by regulation State laws and regulations that have been preempted by this Act, if the issue of preemption is unclear; and (2) coordinate with State insurance regulators and the National Association of Securities Dealers.

Title VII: Rehabilitation and Liquidation - Grants Federal district courts exclusive jurisdiction over litigation involving NARAB. Requires the Commission: (1) to act as receiver of any federally certified insurer or reinsurer for rehabilitation or liquidation purposes; and (2) to be appointed as receiver in proceedings instituted pursuant to this Act. States that the appropriate State insurance regulator shall act as receiver of any insurer or reinsurer which does not have a Federal certificate. Directs the Commission and the appropriate State insurance regulator to administratively seize an insurer or reinsurer whose financial condition is substantially and imminently threatened. Grants Federal district courts exclusive jurisdiction to appoint a receiver of an insurer or reinsurer, and to supervise a rehabilitation or liquidation under this Act.

Prescribes the administrative and procedural guidelines for both foreign and domestic insurers and reinsurers placed under Commission or State receivership, rehabilitation, or liquidation. Authorizes the Commission to contract with any State insurance regulator to assume the responsibility of administering receivership in existence before the effective date of this Act.

Title VIII: Definitions - Defines terms used in this Act.

Title IX: Technical and Conforming Amendments - Makes technical and conforming amendments to the United States Code.