Surety Companies Doing Business With the United States; Request for Information, 72138-72139 [2019-28193]
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72138
Federal Register / Vol. 84, No. 249 / Monday, December 30, 2019 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
Estimated Number of Respondents:
23,615.8
Estimated Total Annual Responses:
8,855,625.9
Estimated Recordkeeping Burden:
4,435,685 hours.10
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control
number assigned by OMB. Records
required to be retained under the BSA
must be retained for five years.
Generally, information collected
pursuant to the BSA is confidential but
may be shared as provided by law with
regulatory and law enforcement
authorities.
Request for Comments:
Comments submitted in response to
this notice will be summarized and/or
included in the request for OMB
approval. All comments will become a
matter of public record. Comments are
invited on: (a) Whether the collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information shall have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the collection of
information; (c) ways to enhance the
quality, utility, and clarity of the
8 The above Estimated Number of Respondents is
based on sum of the following numbers:
• 5,358 banks [Federal Deposit Insurance
Corporation, Key Statistics web page, April 25,
2019];
• 5,375 federally-insured credit unions [National
Credit Union Administration, Quarterly Credit
Union Data Summary, December 31, 2018];
• 125 privately-insured credit unions [General
Accountability Office, PRIVATE DEPOSIT
INUSRANCE: Credit Unions Largely Complied with
Disclosure Rules, but Rules Should Be Clarified,
March 2017];
• 1,130 introducing brokers [National Futures
Association website, March 31, 2019];
• 64 futures commission merchants [National
Futures Association website, March 31, 2019];
• 3,607 securities firms [Financial Industry
Regulatory Authority website, December 31, 2018];
and,
• 7,956 U.S. mutual funds [Investment Company
Institute, 2018 Factbook, 2018].
9 Based on research conducted to publish the
final rule in 2016, it is estimated that each covered
financial institution will open, on average, 1.5 new
legal entity accounts per business day. There are
250 business days per year. (23,615 financial
institutions × 1.5 accounts per day × 250 business
days per year = 8,855,625 new legal entity accounts
opened per year).
10 8,855,625 new legal entity accounts × 30
minutes per account established ÷ 60 minutes per
hour = 4,427,813 burden hours to identify and
verify beneficial owners of new legal entity
accounts per year. 20 minutes to update and
maintain beneficial ownership identification and
verification procedures within a financial
institution’s AML program multiplied by 23,615
covered financial institutions and divided by 60
minutes = 7,872 burden hours annually. The total
annual burden hours estimate for this information
collection is (4,427,813 + 7,872) 4,435,685.
VerDate Sep<11>2014
20:00 Dec 27, 2019
Jkt 250001
information to be collected; (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology; and (e) estimates of capital
or start-up costs and costs of operation,
maintenance and purchase of services to
provide information.
Jamal El Hindi,
Deputy Director, Financial Crimes
Enforcement Network.
[FR Doc. 2019–28037 Filed 12–27–19; 8:45 am]
BILLING CODE 4810–02–P
DEPARTMENT OF THE TREASURY
Fiscal Service
[FISCAL–2019–0002]
RIN 1530–AA20
Surety Companies Doing Business
With the United States; Request for
Information
Bureau of the Fiscal Service,
Treasury.
ACTION: Notice of request for
information; request for comment.
AGENCY:
The U.S. Department of the
Treasury, Bureau of the Fiscal Service
(Fiscal Service) administers the
corporate federal surety bond program
(‘‘the program’’), under which Fiscal
Service processes and evaluates
applications from companies seeking to
underwrite or reinsure federal surety
bonds. Fiscal Service is considering
modernizing and improving the
program. To support this effort, Fiscal
Service requests information from
stakeholders on these topics, including
views regarding the application process
for certificates of authority, the data that
Fiscal Service should consider, and the
analytical methods it should use when
evaluating an applicant’s financial
condition.
DATES: Submit written comments on or
before February 13, 2020.
ADDRESSES: You may submit comments,
identified by docket FISCAL–2019–
0002, using the following methods:
• Federal eRulemaking Portal: (https://
www.regulations.gov). Follow the
instructions on the website for
submitting comments.
• Email: surety.bonds@
fiscal.treasury.gov. Include docket
FISCAL–2019–0002 in the subject line
of the message.
• Mail: Surety Bond Branch, Bureau
of the Fiscal Service, 3201 Pennsy
Drive, Building E, Landover, MD 20785.
Instructions: All submissions received
must refer to Fiscal Service and docket
SUMMARY:
PO 00000
Frm 00249
Fmt 4703
Sfmt 4703
number FISCAL–2019–0002. In general,
comments received will be published on
www.regulations.gov without change,
including any business or personal
information provided. Do not disclose
any information in your comment or
supporting materials that you consider
confidential or inappropriate for public
disclosure. Comments will not be edited
to remove any identifying or contact
information.
FOR FURTHER INFORMATION CONTACT:
Melvin Saunders, at (202) 874–5283 or
melvin.saunders@fiscal.treasury.gov; or
Dwayne Boothe, at (304) 480–5244 or
dwayne.boothe@fiscal.treasury.gov.
SUPPLEMENTARY INFORMATION: Congress
authorized the Secretary of the Treasury
(the Secretary) in 31 U.S.C. 9304–9305
to certify a surety company to do
business with the United States if the
Secretary determines that the company
meets certain conditions and is able to
carry out its contracts. The Secretary has
delegated authority to Fiscal Service to
administer the program.
Fiscal Service evaluates the financial
condition of companies applying to be
certified as a surety or as a reinsurer of
federal surety bonds. Fiscal Service
issues a ‘‘certificate of authority’’ to
approved companies. Under the
program, Fiscal Service also evaluates
companies applying for recognition as
admitted reinsurers for excess risk that
does not run to the United States. Fiscal
Service has published its requirements
for companies applying to underwrite or
reinsure federal surety bonds and for
companies applying to be recognized as
admitted reinsurers at 31 CFR part 223,
and in annual letters posted to its
website at fiscal.treasury.gov/suretybonds. Fiscal Service publishes lists of
companies receiving certificates of
authority to underwrite or reinsure
federal surety bonds, and of those
companies recognized as admitted
reinsurers, on its website annually.
Once a company is certified to
underwrite or reinsure federal surety
bonds, it must submit quarterly
financial reports to Fiscal Service
demonstrating that the company
remains in good financial standing.
Fiscal Service is exploring ways to
modernize and improve how it
evaluates the financial condition of
companies seeking to underwrite and
reinsure federal surety bonds or to act
as admitted reinsurers, as well as its
requirements for the application or
renewal of certificates of authority. A
number of changes in the regulation of
the insurance industry that have an
indirect effect on the program and
companies applying for certification (or
to be recognized as an admitted
E:\FR\FM\30DEN1.SGM
30DEN1
khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 84, No. 249 / Monday, December 30, 2019 / Notices
reinsurer) have taken place in the years
since Fiscal Service last significantly
updated the program’s regulatory
requirements and its financial analysis
methodology. For instance, the passage
of the Nonadmitted and Reinsurance
Reform Act of 2010 and the adoption by
U.S. states of the 2011 amendments to
the National Association of Insurance
Commissioners’ Credit for Reinsurance
Model Law and Model Regulation have
impacted the form and extent of surety
companies’ reliance on reinsurers not
domiciled in the United States. In 2010,
Congress created the Federal Insurance
Office (‘‘FIO’’) in the Department of the
Treasury to, among other things,
monitor and report on the regulation of
the insurance industry. Additionally,
pursuant to the authorities set forth in
the Federal Insurance Office Act of
2010, the Department of the Treasury,
led by the FIO, and the Office of the
United States Trade Representative have
negotiated a covered agreement with the
European Union, providing for (among
other things) the elimination of
collateral requirements, under specified
conditions, for reinsurers from EU
member states assuming business from
U.S. ceding insurers. While these and
other developments are not the sole
impetus for Fiscal Service’s
consideration of modernizing and
improving program requirements, the
questions below should be viewed in
light of these changes that have
occurred in the regulation of the
insurance industry. Throughout this
process, Fiscal Service will consult and
coordinate with FIO.
You are invited to answer the
following questions and provide general
comments on any other aspect of the
program’s regulations and requirements.
Please include in your comments how
any recommended actions would
protect the financial interests of the
United States and otherwise improve
the program.
Request for Comment: While Fiscal
Service is particularly interested in
responses to the following questions,
commenters may supply other
information pertaining to Fiscal
Service’s requirements not explicitly
referenced below.
1. Should Fiscal Service consider
changing the approach or methodology
it uses to value the assets and liabilities
of a company applying to be certified as
an insurer or reinsurer, or to be
recognized as an admitted reinsurer? In
particular, please consider commenting
on the following items: (a) Admissible
versus non-admissible assets; (b) capital
requirements; (c) underwriting
limitation; and (d) comparison to
VerDate Sep<11>2014
20:00 Dec 27, 2019
Jkt 250001
requirements imposed by relevant
regulatory authorities.
2. What different methodologies, if
any, should Fiscal Service consider
using when evaluating applications
from companies that are part of an
insurance group’s pooling agreement?
Please provide your views on whether
Fiscal Service should analyze such
applicants’ financial condition at the
group level rather than, or in
conjunction with, analysis at the
individual company level. Please
address the benefits and risks to the
federal government of performing the
financial analysis at the group level.
3. Should Fiscal Service consider
changing the approach or methodology
it uses to determine the credit allowed
for reinsurance and, if so, what changes
should it consider? Please address both
reinsurance of federal surety bonds and
of non-federal risks, and provide the
rationale for any proposed changes.
4. Should Fiscal Service consider
changing any aspects of the approach or
methodology it uses to determine
recognition of a company as an admitted
reinsurer? In your response, please
address Fiscal Service’s treatment of
both domestic and alien reinsurers, and
discuss the benefits and risks to the
federal government of any proposed
changes.
5. Should Fiscal Service consider
changing the permissible methods, as
described in the program’s regulations
and annual letters published on its
website, for limiting risk in excess of a
surety company’s underwriting
limitation? In your response, please
address permissible methods for
limiting risk in excess of the
underwriting limitation relative to both
federal surety bonds and to non-federal
risks.
6. Should Fiscal Service consider
changing the schedule and the
documentation required for issuing and
renewing certificates of authority and, if
so, what changes should it consider? As
an example, but not a limitation on the
scope of the foregoing question, should
Fiscal Service consider issuing
certificates of authority that are valid for
more than one year based on a
company’s financial condition? Please
address the benefits and risks to the
federal government of implementing
such proposed changes, including
issuing certificates of authority that are
valid for more than one year.
7. Please recommend any other
revisions to the program regulations as
addressed in 31 CFR part 223 or the
annual letters published on Fiscal
Service’s website that are consistent
with protecting the federal government,
PO 00000
Frm 00250
Fmt 4703
Sfmt 4703
72139
and provide the rationale for those
revisions.
Timothy E. Gribben,
Commissioner, Bureau of the Fiscal Service.
[FR Doc. 2019–28193 Filed 12–27–19; 8:45 am]
BILLING CODE 4810–AS–P
DEPARTMENT OF THE TREASURY
Fiscal Service
Prompt Payment Interest Rate;
Contract Disputes Act
Bureau of the Fiscal Service,
Treasury.
ACTION: Notice of prompt payment
interest rate; Contract Disputes Act.
AGENCY:
For the period beginning
January 1, 2020, and ending on June 30,
2020, the prompt payment interest rate
is 21⁄8 per centum per annum.
DATES: Effective January 1, 2020, to June
30, 2020.
ADDRESSES: Comments or inquiries may
be mailed to: E-Commerce Division,
Bureau of the Fiscal Service, 401 14th
Street SW, Room 306F, Washington, DC
20227. Comments or inquiries may also
be emailed to PromptPayment@
fiscal.treasury.gov.
FOR FURTHER INFORMATION CONTACT:
Thomas M. Burnum, E-Commerce
Division, (202) 874–6430; or Thomas
Kearns, Attorney-Advisor, Office of the
Chief Counsel, (202) 874–7036.
SUPPLEMENTARY INFORMATION: An agency
that has acquired property or service
from a business concern and has failed
to pay for the complete delivery of
property or service by the required
payment date shall pay the business
concern an interest penalty. 31 U.S.C.
3902(a). The Contract Disputes Act of
1978, Sec. 12, Public Law 95–563, 92
Stat. 2389, and the Prompt Payment Act,
31 U.S.C. 3902(a), provide for the
calculation of interest due on claims at
the rate established by the Secretary of
the Treasury.
The Secretary of the Treasury has the
authority to specify the rate by which
the interest shall be computed for
interest payments under section 12 of
the Contract Disputes Act of 1978 and
under the Prompt Payment Act. Under
the Prompt Payment Act, if an interest
penalty is owed to a business concern,
the penalty shall be paid regardless of
whether the business concern requested
payment of such penalty. 31 U.S.C.
3902(c)(1). Agencies must pay the
interest penalty calculated with the
interest rate, which is in effect at the
time the agency accrues the obligation
to pay a late payment interest penalty.
SUMMARY:
E:\FR\FM\30DEN1.SGM
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]]>Agencies
[Federal Register Volume 84, Number 249 (Monday, December 30, 2019)]
[Notices]
[Pages 72138-72139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-28193]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Fiscal Service
[FISCAL-2019-0002]
RIN 1530-AA20
Surety Companies Doing Business With the United States; Request
for Information
AGENCY: Bureau of the Fiscal Service, Treasury.
ACTION: Notice of request for information; request for comment.
-----------------------------------------------------------------------
SUMMARY: The U.S. Department of the Treasury, Bureau of the Fiscal
Service (Fiscal Service) administers the corporate federal surety bond
program (``the program''), under which Fiscal Service processes and
evaluates applications from companies seeking to underwrite or reinsure
federal surety bonds. Fiscal Service is considering modernizing and
improving the program. To support this effort, Fiscal Service requests
information from stakeholders on these topics, including views
regarding the application process for certificates of authority, the
data that Fiscal Service should consider, and the analytical methods it
should use when evaluating an applicant's financial condition.
DATES: Submit written comments on or before February 13, 2020.
ADDRESSES: You may submit comments, identified by docket FISCAL-2019-
0002, using the following methods:
Federal eRulemaking Portal: (https://www.regulations.gov).
Follow the instructions on the website for submitting comments.
Email: [email protected]. Include docket
FISCAL-2019-0002 in the subject line of the message.
Mail: Surety Bond Branch, Bureau of the Fiscal Service,
3201 Pennsy Drive, Building E, Landover, MD 20785.
Instructions: All submissions received must refer to Fiscal Service
and docket number FISCAL-2019-0002. In general, comments received will
be published on www.regulations.gov without change, including any
business or personal information provided. Do not disclose any
information in your comment or supporting materials that you consider
confidential or inappropriate for public disclosure. Comments will not
be edited to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Melvin Saunders, at (202) 874-5283 or
[email protected]; or Dwayne Boothe, at (304) 480-
5244 or [email protected].
SUPPLEMENTARY INFORMATION: Congress authorized the Secretary of the
Treasury (the Secretary) in 31 U.S.C. 9304-9305 to certify a surety
company to do business with the United States if the Secretary
determines that the company meets certain conditions and is able to
carry out its contracts. The Secretary has delegated authority to
Fiscal Service to administer the program.
Fiscal Service evaluates the financial condition of companies
applying to be certified as a surety or as a reinsurer of federal
surety bonds. Fiscal Service issues a ``certificate of authority'' to
approved companies. Under the program, Fiscal Service also evaluates
companies applying for recognition as admitted reinsurers for excess
risk that does not run to the United States. Fiscal Service has
published its requirements for companies applying to underwrite or
reinsure federal surety bonds and for companies applying to be
recognized as admitted reinsurers at 31 CFR part 223, and in annual
letters posted to its website at fiscal.treasury.gov/surety-bonds.
Fiscal Service publishes lists of companies receiving certificates of
authority to underwrite or reinsure federal surety bonds, and of those
companies recognized as admitted reinsurers, on its website annually.
Once a company is certified to underwrite or reinsure federal surety
bonds, it must submit quarterly financial reports to Fiscal Service
demonstrating that the company remains in good financial standing.
Fiscal Service is exploring ways to modernize and improve how it
evaluates the financial condition of companies seeking to underwrite
and reinsure federal surety bonds or to act as admitted reinsurers, as
well as its requirements for the application or renewal of certificates
of authority. A number of changes in the regulation of the insurance
industry that have an indirect effect on the program and companies
applying for certification (or to be recognized as an admitted
[[Page 72139]]
reinsurer) have taken place in the years since Fiscal Service last
significantly updated the program's regulatory requirements and its
financial analysis methodology. For instance, the passage of the
Nonadmitted and Reinsurance Reform Act of 2010 and the adoption by U.S.
states of the 2011 amendments to the National Association of Insurance
Commissioners' Credit for Reinsurance Model Law and Model Regulation
have impacted the form and extent of surety companies' reliance on
reinsurers not domiciled in the United States. In 2010, Congress
created the Federal Insurance Office (``FIO'') in the Department of the
Treasury to, among other things, monitor and report on the regulation
of the insurance industry. Additionally, pursuant to the authorities
set forth in the Federal Insurance Office Act of 2010, the Department
of the Treasury, led by the FIO, and the Office of the United States
Trade Representative have negotiated a covered agreement with the
European Union, providing for (among other things) the elimination of
collateral requirements, under specified conditions, for reinsurers
from EU member states assuming business from U.S. ceding insurers.
While these and other developments are not the sole impetus for Fiscal
Service's consideration of modernizing and improving program
requirements, the questions below should be viewed in light of these
changes that have occurred in the regulation of the insurance industry.
Throughout this process, Fiscal Service will consult and coordinate
with FIO.
You are invited to answer the following questions and provide
general comments on any other aspect of the program's regulations and
requirements. Please include in your comments how any recommended
actions would protect the financial interests of the United States and
otherwise improve the program.
Request for Comment: While Fiscal Service is particularly
interested in responses to the following questions, commenters may
supply other information pertaining to Fiscal Service's requirements
not explicitly referenced below.
1. Should Fiscal Service consider changing the approach or
methodology it uses to value the assets and liabilities of a company
applying to be certified as an insurer or reinsurer, or to be
recognized as an admitted reinsurer? In particular, please consider
commenting on the following items: (a) Admissible versus non-admissible
assets; (b) capital requirements; (c) underwriting limitation; and (d)
comparison to requirements imposed by relevant regulatory authorities.
2. What different methodologies, if any, should Fiscal Service
consider using when evaluating applications from companies that are
part of an insurance group's pooling agreement? Please provide your
views on whether Fiscal Service should analyze such applicants'
financial condition at the group level rather than, or in conjunction
with, analysis at the individual company level. Please address the
benefits and risks to the federal government of performing the
financial analysis at the group level.
3. Should Fiscal Service consider changing the approach or
methodology it uses to determine the credit allowed for reinsurance
and, if so, what changes should it consider? Please address both
reinsurance of federal surety bonds and of non-federal risks, and
provide the rationale for any proposed changes.
4. Should Fiscal Service consider changing any aspects of the
approach or methodology it uses to determine recognition of a company
as an admitted reinsurer? In your response, please address Fiscal
Service's treatment of both domestic and alien reinsurers, and discuss
the benefits and risks to the federal government of any proposed
changes.
5. Should Fiscal Service consider changing the permissible methods,
as described in the program's regulations and annual letters published
on its website, for limiting risk in excess of a surety company's
underwriting limitation? In your response, please address permissible
methods for limiting risk in excess of the underwriting limitation
relative to both federal surety bonds and to non-federal risks.
6. Should Fiscal Service consider changing the schedule and the
documentation required for issuing and renewing certificates of
authority and, if so, what changes should it consider? As an example,
but not a limitation on the scope of the foregoing question, should
Fiscal Service consider issuing certificates of authority that are
valid for more than one year based on a company's financial condition?
Please address the benefits and risks to the federal government of
implementing such proposed changes, including issuing certificates of
authority that are valid for more than one year.
7. Please recommend any other revisions to the program regulations
as addressed in 31 CFR part 223 or the annual letters published on
Fiscal Service's website that are consistent with protecting the
federal government, and provide the rationale for those revisions.
Timothy E. Gribben,
Commissioner, Bureau of the Fiscal Service.
[FR Doc. 2019-28193 Filed 12-27-19; 8:45 am]
BILLING CODE 4810-AS-P
