SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Trade in Insurance Services Act 
of 1994''.

SEC. 2. EFFECTUATING THE PRINCIPLE OF NATIONAL TREATMENT FOR INSURANCE 
              ORGANIZATIONS.

    (a) Purpose.--The purpose of this section is to encourage foreign 
countries to accord national treatment to United States insurance 
organizations that operate or seek to operate in those countries.
    (b) Identifying Countries that Deny National Treatment to United 
States Insurance Organizations.--The President shall identify the 
extent to which foreign countries deny national treatment to United 
States insurance organizations--
            (1) according to the most recent report under section 3602 
        of the Omnibus Trade and Competitiveness Act of 1988 (or the 
        most recent update of any such report); or
            (2) based on more recent information that the President 
        considers to be appropriate.
    (c) Determining Whether Denial of National Treatment has a 
Significant Adverse Effect.--
            (1) In general.--The President shall determine whether the 
        denial of national treatment to United States insurance 
        organizations by a foreign country identified under subsection 
        (b) has a significant adverse effect on such organizations.
            (2) Factors to be considered.--In determining whether and 
        to what extent a foreign country denies national treatment to 
        United States insurance organizations, and in determining the 
        effect of any such denial on such insurance organizations, the 
        President shall consider appropriate factors, including--
                    (A) the extent of United States trade with and 
                investment in the foreign country, the size of the 
                foreign country's markets for the insurance services 
                involved, and the ability and the extent to which 
                United States insurance organizations operate or seek 
                to operate in those markets;
                    (B) the importance of operations by United States 
                insurance organizations in the foreign country to the 
                export of goods and services by United States firms to 
                such country;
                    (C) the extent to which the foreign country 
                provides in advance to United States insurance 
                organizations any measure of general application that 
                the country proposes to adopt, such as regulations, 
                guidelines or other policies regarding new products, 
                services, and markets in order to allow an opportunity 
                for such insurance organizations to comment on the 
                measure and for such comments to be taken into account 
                by the foreign country;
                    (D) the extent to which the foreign country--
                            (i) makes available, in writing, to United 
                        States insurance organizations the foreign 
                        country's requirements for completing 
                        applications relating to the provision of 
                        insurance services;
                            (ii) applies published, objective, 
                        standards and criteria in evaluating any such 
                        applications from United States insurance 
                        organizations; and
                            (iii) renders administrative decisions with 
                        respect to any such application within a 
                        reasonable period of time;
                    (E) the extent to which United States insurance 
                organizations may conduct activities or provide 
                services in the foreign country that insurance 
                organizations organized under the laws of the foreign 
                country may not conduct or provide in the foreign 
                country; and
                    (F) the extent to which United States insurance 
                organizations are affected in their operations and 
                ability to compete on an equal basis by--
                            (i) the licensing policies of the insurance 
                        regulator of that country;
                            (ii) capital requirements applicable in 
                        that country with respect to insurance 
                        activities;
                            (iii) restrictions on acquisitions or joint 
                        ventures, and operations of such acquisitions 
                        and joint ventures, by insurance organizations 
                        in that country;
                            (iv) restrictions on the operation and 
                        establishment of branches in that country; and
                            (v) requirements for seeking approval of 
                        rates, rules, and policy forms when introducing 
                        new products, services, and pricing techniques.
    (d) Publication of Determination.--
            (1) Publication.--If the President determines that the 
        denial of national treatment to United States insurance 
        organizations by a foreign country has a significant adverse 
        effect on such organizations, the President--
                    (A) may, after the Trade Representative has 
                initiated negotiations in accordance with subsection 
                (g) publish that determination in the Federal Register;
                    (B) shall, not less frequently than annually, in 
                consultation with any department or agency that the 
                President considers to be appropriate, review each such 
                determination to determine whether the determination 
                should be rescinded; and
                    (C) shall inform State insurance commissioners or 
                regulatory agencies of the publication of such 
                determination.
            (2) Exception for countries with national treatment 
        commitments.--Paragraph (1) shall not apply to a foreign 
        country that the President determines has provided the United 
        States with a binding and substantially full market access and 
        national treatment commitment in insurance services, and 
        adheres to that commitment in practice.
    (e) Discretionary Sanctions.--
            (1) Action by the president.--
                    (A) In general.--Subject to subparagraph (B), the 
                President may recommend to the Secretary of the 
                Treasury that the Secretary suspend the acceptance of, 
                or not accept, a registration statement that is filed 
                pursuant to section 3 after the date of publication of 
                a determination under subsection (d)(1) by a person of 
                a foreign country listed in such publication if the 
                President determines that--
                            (i) such action would assist the United 
                        States in negotiations to eliminate denials of 
                        national treatment against United States 
                        insurance organizations;
                            (ii) negotiations undertaken pursuant to 
                        subsection (g) are not likely to result in an 
                        agreement that eliminates the denial of 
                        national treatment; or
                            (iii) the country has not adequately 
                        adhered to an agreement reached as a result of 
                        negotiations undertaken pursuant to subsection 
                        (g).
                    (B) Consistency with bilateral and multilateral 
                agreements.--The authority of the President under 
                subparagraph (A) may not be used to take actions which 
                are inconsistent with any bilateral or multilateral 
                agreement that governs insurance services that has been 
                entered into by the President and approved by the 
                Senate and House of Representatives.
                    (C) Suspensions of filings of registrations.--
                            (i) In general.--Notwithstanding any other 
                        provision of law, if the President recommends, 
                        pursuant to subparagraph (A), that the 
                        Secretary suspend the acceptance of any 
                        registration of an alien insurance company 
                        under section 3, the Secretary shall--
                                    (I) suspend the Secretary's 
                                acceptance of such registration for a 
                                period of 180 days; and
                                    (II) at the recommendation of the 
                                President, extend such suspension for 
                                an additional period of 180 days.
                            (ii) Termination of suspension.--The 
                        Secretary shall, on the recommendation of the 
                        President, terminate any suspension in effect 
                        under clause (i).
                    (D) Alternative action.--If the President 
                determines that the procedure outlined in subparagraph 
                (A) is either inappropriate or impractical to achieve 
                the purpose of this section, the President may take 
                such action under other provisions of law as the 
                President considers necessary and appropriate to 
                encourage foreign countries to accord national 
                treatment to United States insurance organizations that 
                operate or seek to operate in those countries.
    (f) Existing Alien Insurance Organization Activity.--The authority 
of subsection (e) may not be exercised with the respect to any 
registration filed by an alien insurance organization which is engaged 
in insurance activities within the United States as of March 8, 1994.
    (g) Negotiations.--
            (1) In general.--The Trade Representative--
                    (A) shall initiate negotiations with any foreign 
                country with respect to which a determination made 
                under subsection (c)(1) is in effect to ensure that 
                such country accords national treatment to United 
                States insurance organizations; and
                    (B) may initiate negotiations with any foreign 
                country that denies national treatment to United States 
                insurance organizations to ensure that the foreign 
                country accords national treatment to such 
                organizations.
            (2) Exceptions.--Paragraph (1) shall not apply with respect 
        to any foreign country if the President--
                    (A) determines that the negotiations--
                            (i) would be unlikely to result in progress 
                        toward according national treatment to United 
                        States insurance organizations; or
                            (ii) would impair the economic interests of 
                        the United States; and
                    (B) submits a written notice of that determination 
                to the Congress.
    (h) Report.--
            (1) Contents of report.--Not later than December 1, 1994, 
        and biennially thereafter, the President shall transmit to the 
        Congress a report that--
                    (A) specifies the foreign countries identified 
                under subsection (b);
                    (B) if a determination has been published under 
                subsection (d)(1) with respect to the foreign country, 
                provides the reasons for such determination;
                    (C) if the President has not made or has rescinded 
                such a determination with respect to the foreign 
                country, provides the reasons for the failure to make 
                the determination or for the rescission;
                    (D) describes the results of any negotiations 
                conducted under subsection (g)(1) with the foreign 
                country; and
                    (E) discusses the effectiveness of this section in 
                achieving the purposes of the section.
            (2) Submission of report.--The report required by paragraph 
        (1) may be submitted as part of a report or update submitted 
        under section 3602 of the Omnibus Trade and Competitiveness Act 
        of 1988.
    (i) Delegation.--
            (1) In general.--The President may delegate any authority 
        of the President under this section.
            (2) Exercise of authority.--If the President delegates any 
        authority of the President under this section, the designee's 
        authority shall be exercised according to the specific 
        direction (if any) of the President.
    (j) Consultation.--In carrying out the duties under this Act, the 
President, or the President's designee, may consult with the 
appropriate State insurance commissioners or regulatory agencies and 
other entities the President or designee may consider appropriate.
    (k) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Alien insurance organization.--The term ``alien 
        insurance organization'' means an insurance organization which 
        is a person of a foreign country.
            (2) Insurance organization.--The term ``insurance 
        organization'' means any insurer and any reinsurer.
            (3) Insurer.--The term ``insurer'' means a party to a 
        contract of insurance who assumes the risk and undertakes to 
        indemnify the insured, or to pay a certain sum on the 
        occurrence of a specified contingency.
            (4) National treatment.--The term ``national treatment'' 
        means, with respect to any foreign country, treatment that 
        offers United States insurance organizations the same 
        competitive opportunities (including effective market access 
        and market penetration) in such country as are available to the 
        country's domestic insurance organizations in like 
        circumstances.
            (5) Person of a foreign country.--The term ``person of a 
        foreign country'' means--
                    (A) an entity that--
                            (i) is organized under the laws of the 
                        foreign country, or
                            (ii) has its principal place of business in 
                        the foreign country;
                    (B) an individual who--
                            (i) is a citizen of the foreign country, or
                            (ii) is domiciled in the foreign country; 
                        or
                    (C) any person that is directly or indirectly 
                controlled by any entity or individual described in 
                subparagraph (A) or (B).
            (6) Reinsurer.--The term ``reinsurer'' means an insurer 
        which contracts to indemnify a ceding insurer for all or part 
        of a risk originally undertaken by the ceding insurer.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (8) Trade Representative.--The term ``Trade 
        Representative'' means the United States Trade Representative.

SEC. 3. REGISTRATION OF ALIEN INSURANCE ORGANIZATIONS WITH THE 
              SECRETARY OF THE TREASURY.

    (a) In General.--No alien insurance organization (as defined in 
section 2(i)(1)) may engage in insurance activities within the United 
States after the date of the enactment of this Act unless--
            (1) a registration statement has been filed by the company 
        with the Secretary of the Treasury indicating the 
        organization's intention to engage in insurance activities 
        within the United States; and
            (2) applicable State insurance requirements have been 
        satisfied.
    (b) Annual Report.--The Secretary of the Treasury shall submit an 
annual report to the Congress on the level of alien insurance 
organization activity within the United States.

SEC. 4. CONFORMING AMENDMENT.

    (a) Report on Denial of National Treatment for Insurance 
Organizations.--Section 3602(3) of the Omnibus Trade and 
Competitiveness Act of 1988 (22 U.S.C. 5352(3)) is amended by inserting 
``, insurance organizations,'' after ``banking organizations''.
    (b) Reports on Foreign Treatment of United States Financial 
Institutions.--Section 3602 of the Omnibus Trade and Competitiveness 
Act of 1988 (22 U.S.C. 5352) is amended--
            (1) in the 1st sentence, by inserting ``with updates on 
        significant developments every 2 years following the study 
        conducted in 1994,'' before ``the Secretary of the Treasury''; 
        and
            (2) by adding at the end the following: ``For purposes of 
        this section, a foreign country denies national treatment to 
        United States entities unless the foreign country offers such 
        entities the same competitive opportunities (including 
        effective market access) as are available to the domestic 
        entities of the foreign country.''.
    (c) Negotiations To Promote Fair Trade in Financial Services.--
Section 3603(a)(1) of the Omnibus Trade and Competitiveness Act of 1988 
(22 U.S.C. 5353(a)(1)) is amended by inserting ``effective'' before 
``access''.
Fair Trade in Insurance Services Act of 1994 - Directs the President to:  (1) identify foreign countries that deny national treatment to U.S.  insurance organizations; and (2) determine whether such denial has a significant adverse effect on them.  Requires the President, when making such determinations, to consider specified factors, including: (1) the ability and extent to which U.S. insurance organizations can operate or seek to operate in the foreign country's market; (2) the importance of operations by such organizations in the foreign country to the export of goods and services by U.S. firms to such country; (3) the extent to which such organizations may conduct activities or provide services in the foreign country that insurance organizations organized under such foreign country's laws may not conduct or provide there; and (4) the extent to which such U.S. organizations are affected in their operations and ability to compete on an equal basis in such foreign country's market. 
Authorizes the President to recommend to the Secretary of the Treasury (Secretary) that the Secretary suspend the acceptance of, or not accept, a certain registration statement filed by a person of an identified foreign country if the President determines that:  (1) such action would assist the United States in negotiations to eliminate denials of national treatment against U.S. insurance organizations; (2) such negotiations are not likely to result in an agreement to eliminate such denial; or (3) the country has not adhered to such an agreement.  Prohibits such sanctions with respect to any registration filed by an alien insurance organization which does business in the United States as of March 8, 1994. 
Requires the President to report biennially to the Congress on: (1) foreign countries that deny national treatment to U.S.  insurance companies; and (2) the results of any negotiations with respect to the elimination of such treatment denials. 
(Sec. 3) Prohibits alien insurance organizations from engaging in insurance activities within the United States unless certain registration and related requirements are met.
Fair Trade in Insurance Services Act of 1994