Transparent Insurance Standards Act of 2016
(Sec. 3) This bill specifies U.S. objectives regarding international insurance standards.
(Sec. 4) The United States may not agree to, accept, establish, enter into, or consent to the adoption of a final international insurance standard with an international standard-setting organization or a foreign government, authority, or regulatory entity unless certain public notice-and-comment requirements and capital standards are met.
In the case of an international insurance standard setting forth a capital standard for insurers: (1) the international standard must be consistent with state-based capital requirements; (2) the Board of Governors of the Federal Reserve System must have issued capital requirements for insurance companies it supervises through a rulemaking with a period for public notice and comment, and (3) the international standard must be consistent with the Federal Reserve Board's capital requirements.
The Department of the Treasury and the Federal Reserve Board may not agree to an international standard unless: (1) the proposed standard will not change state law, and (2) any proposed international capital standard for insurers is designed solely to help ensure that sufficient funds are available to pay claims to an insurer's policyholders in the event of the liquidation of that entity.
Before U.S. adoption of any such international insurance standard, Treasury and the Federal Reserve Board, in consultation with the state insurance commissioners, shall analyze and report to Congress on the impact of the standard on U.S. consumers and markets and whether any changes in state law will result from such final standard. The report must be available for public comment and be reviewed by the Government Accountability Office (GAO).
Congress shall have 90 days to approve or reject the final standard.
(Sec. 5) Treasury and the Federal Reserve Board must report annually on, and provide testimony to Congress every six months regarding, insurance standard-setting issues under discussion at international standard-setting bodies, the effects that international insurance standards could have on U.S. consumers and insurance markets, any positions taken by Treasury or the Federal Reserve Board and whether they are meeting U.S. objectives, and efforts to increase transparency at the Financial Stability Board (FSB). State insurance commissioners may also provide testimony or reports to Congress.
The Federal Reserve Board and Treasury must report and provide testimony on their efforts to increase transparency at meetings of the International Association of Insurance Supervisors.
The GAO must report and provide testimony on the transparency and accountability of any organization acting as a designee of, or at the direction of, the head of a state insurance department on issues related to international insurance standards, which is not employed directly by the state. The GAO's report must describe any such organization's: (1) participation in policy deliberations related to international insurance standards, (2) financial support to state insurance department personnel, (3) budgeting process for international insurance discussions on issues involving an international forum of financial regulators or supervisors, and (4) effect on the establishment of any self-executing national standards.
(Sec. 7) The bill expands the procedures that Treasury and the U.S. Trade Representative (USTR) must follow before entering bilateral or multilateral agreements regarding prudential measures with respect to the business of insurance or reinsurance that: (1) are entered into between the United States and foreign governments, authorities, or regulatory entities; and (2) relate to the recognition of prudential measures that achieve a level of protection for insurance or reinsurance consumers that is substantially equivalent to the protection achieved under state regulation. Treasury and the USTR must: (1) provide for public notice and comment on proposed agreements, and (2) include state insurance commissioners in any negotiations regarding such contemplated agreements.
These agreements shall not be: (1) used to provide the Federal Insurance Office or Treasury with any general supervisory or regulatory authority over the business of insurance or with the authority to participate in a supervisory college, or (2) considered an international insurance standard for purposes of this bill.
(Sec. 8) The Dodd-Frank Wall Street Reform and Consumer Protection Act is amended to authorize the independent member of the Financial Stability Oversight Council to:
- perform specified consultant duties with international insurance supervisors, international financial stability counterparts, as well as Treasury;
- attend the FSB, and arrange for the attendance and participation at the FSB of state insurance commissioners on matters related to insurance and financial stability; and
- attend, with the U.S. delegation, the Organization for Economic Cooperation and Development (OECD) and observe and participate at the OECD Insurance and Private Pensions Committee on those same matters.
(Sec. 9) Parties representing the United States at the FSB on matters, and in meetings, related to insurance and financial stability shall consult with the state insurance commissioners and seek to include them in those meetings.
(Sec. 11) The Securities Exchange Act of 1934 is amended to reduce for FY2017 the amount that the Securities and Exchange Commission (SEC) may deposit in the Securities and Exchange Commission Reserve Fund from registration fee collections. Excess amounts shall be deposited in the Treasury and shall not be available for obligation by the SEC.