Press Release July 12, 2000 Key District Insurance Economic Development Legislation Approved Washington, DC -- Mayor Anthony A. Williams' package of insurance legislation aimed at positioning the District as a national and international gateway for financial services, cleared the DC City Council yesterday. "This package of legislation sends a message to the insurance industry and the international financial services market that the District of Columbia welcomes and supports these kinds of business activities," said DC Insurance and Securities Commissioner Lawrence H. Mirel. " This legislation will enhance the District's ability to attract insurance companies by providing for greater flexibility in the structuring of commercial business transactions and greater ease for foreign insurance companies seeking a U.S. base for operations," said Mirel. The DC Council approved the eleven bills on first reading, June 27 and ten were passed on second reading yesterday. The eleventh bill, to amend the District's demutualization law, was pulled back to clarify some language. Once the Mayor signs the package, the DC Control Board will have an opportunity to review the measures. If approved by the Control Board, the legislation will be sent to Congress for a 30-day review period before becoming law. Summary of legislation: Bill 13-593, "Unfair Trade Practices Act of 2000", fills a significant void in the District's current insurance laws by prohibiting "unfair trade Practices" by an insurance company. In addition, the bill includes prohibitions against (1) unfair discrimination, (2) misrepresentations and false advertising of insurance policies, (3) rebates, (4) unfair financial planning practices, and (5) unfair claims settlement practices. Bill 13-595, "Reinsurance Credit and Recovery Amendment Act of 2000, is a technical bill that clarifies that in the event of the insolvency of a primary insurer, the obligation of the reinsurer is to pay valid claims to the liquidator of the primary insurer and not to the claimant directly. Bill 13-655, "Insurer Agents and Brokers Licensing Revision Amendment Act of 2000", will allow the District to participate in a uniform national or reciprocal structure for agent licensing. Bill 13-667, "Surplus Notes Amendment Act of 2000", will allow stock insurance companies to use surplus notes to meet capital and surplus requirements. Bill 13-678, "Securities Act of 2000", will give DISR the authority to require the registration of stock offerings made in the District. Bill 13-706,"Insurer Confidentiality and Information Sharing Amendment Act of 2000", will allow the District to share information with state and federal regulators in the financial services sector to ensure compliance with the mandates of the congressionally enacted Gramm-Leach-Bliley law. Bill 13-707,"Captive Insurance Company Act of 2000", will permit captive insurance companies to be organized and regulated in the District of Columbia. This will allow corporations and associations to set up their own insurance companies to insure their needs, a process which will provide those organizations with greater flexibility and substantial cost savings. Bill 13-722,"District of Columbia Insurer and Health Maintenance Organization Self-Certification Act of 2000", offers an alternative way for a company to become licensed to sell insurance in the District. The bill would allow an applicant to submit to the Commissioner a statement, signed under oath by an independent organization acceptable to the Commissioner, stating that the applicant meets all of the requirements of DC law for offering the kinds of insurance products for which it seeks a license, and that statement will be accepted as prima facie evidence that the applicant is qualified. Bill 13-723, "United States Branch Domestication Act of 2000", will allow the non-US insurer with a US branch located in the District to be licensed as a District of Columbia domestic insurer if it meets certain requirements and is approved by the DC Commissioner. Bill 13-724, "Insurance Economic Development Act of 2000", will allow those commercial and non-profit organizations that wish to do so, the ability to design their own insurance policies without prior approval of the Department. The DC Department of Insurance and Securities Regulation (DISR) has two missions, (1) to provide fair, efficient and fast regulatory supervision of the insurance and securities businesses for the protection of the people of the District of Columbia, and (2) to create conditions that will retain and attract national and international insurance and other financial businesses to the District.