Download Zipped Enrolled WordPerfect SB0162.ZIP
[Introduced][Amended][Status][Bill Documents][Fiscal Note][Bills Directory]
S.B. 162 Enrolled
LONG TITLE
General Description:
This bill amends the Insurance Title to enact the Interstate Insurance Product
Regulation Compact.
Highlighted Provisions:
This bill:
. provides a purpose statement;
. provides definitions;
. establishes the Interstate Insurance Product Regulation Commission and venue for
proceedings by or against the commission;
. establishes the powers of the commission;
. addresses the organization of the commission;
. addresses meetings and acts of the commission;
. provides for rulemaking by the commission including establishing uniform standards
from which a state can opt out;
. addresses commission records and enforcement;
. provides for dispute resolution;
. provides for product filing and approval;
. provides for the review of commission decisions regarding filings;
. addresses the finances of the commission;
. provides for compacting states, effective date, and amendment;
. provides for withdrawal, default, and termination;
. provides for severability and construction of the compact; and
. addresses binding effect of the compact and other laws.
Monies Appropriated in this Bill:
None
Other Special Clauses:
This bill takes effect on May 3, 2004, except that the compact provides that it takes effect
upon legislative enactment by two Compacting States and the Commission becomes
effective for certain purposes only after 26 states are Compacting States or states
representing greater than 40% of premium volume for life insurance, annuity, disability
income, and long-term care insurance products enact the compact.
Utah Code Sections Affected:
ENACTS:
31A-38-101, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 31A-38-101 is enacted to read:
31A-38-101. Interstate Insurance Product Regulation Compact.
Pursuant to the terms and conditions of this Act, the State of Utah seeks to join with other
States and establish the Interstate Insurance Product Regulation Compact, and thus become a
member of the Interstate Insurance Product Regulation Commission. Utah's insurance
commissioner is hereby designated to serve as the representative of this State to the Commission.
The purposes of this Compact are, through means of joint and cooperative action among the
Compacting States:
1. To promote and protect the interest of consumers of individual and group annuity, life
insurance, disability income and long-term care insurance products;
2. To develop uniform standards for insurance products covered under the Compact;
3. To establish a central clearinghouse to receive and provide prompt review of insurance
products covered under the Compact and in certain cases, advertisements related thereto,
submitted by insurers authorized to do business in one or more Compacting States;
4. To give appropriate regulatory approval to those product filings and advertisements
satisfying the applicable uniform standard;
5. To improve coordination of regulatory resources and expertise between state insurance
departments regarding the setting of uniform standards and review of insurance products covered
under the Compact;
6. To create the Interstate Insurance Product Regulation Commission; and
7. To perform these and such other related functions as may be consistent with the state
regulation of the business of insurance.
For purposes of this Compact:
1. "Advertisement" means any material designed to create public interest in a Product, or
induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain
a policy, as more specifically defined in the Rules and Operating Procedures of the Commission.
2. "Bylaws" mean those bylaws established by the Commission for its governance, or for
directing or controlling the Commission's actions or conduct.
3. "Compacting State" means any State which has enacted this Compact legislation and
which has not withdrawn pursuant to Article XIV, Section 1, or been terminated pursuant to
Article XIV, Section 2.
4. "Commission" means the "Interstate Insurance Product Regulation Commission"
established by this Compact.
5. "Commissioner" means the chief insurance regulatory official of a State including, but
not limited to commissioner, superintendent, director or administrator.
6. "Domiciliary State" means the state in which an Insurer is incorporated or organized;
or, in the case of an alien Insurer, its state of entry.
7. "Insurer" means any entity licensed by a State to issue contracts of insurance for any of
the lines of insurance covered by this Act.
8. "Member" means the person chosen by a Compacting State as its representative to the
Commission, or his or her designee.
9. "Non-compacting State" means any State which is not at the time a Compacting State.
10. "Operating Procedures" mean procedures promulgated by the Commission
implementing a Rule, Uniform Standard or a provision of this Compact.
11. "Product" means the form of a policy or contract, including any application,
endorsement, or related form which is attached to and made a part of the policy or contract, and
any evidence of coverage or certificate, for an individual or group annuity, life insurance, disability
income or long-term care insurance product that an Insurer is authorized to issue.
12. "Rule" means a statement of general or particular applicability and future effect
promulgated by the Commission, including a Uniform Standard developed pursuant to Article VII
of this Compact, designed to implement, interpret, or prescribe law or policy or describing the
organization, procedure, or practice requirements of the Commission, which shall have the force
and effect of law in the Compacting States.
13. "State" means any state, district or territory of the United States of America.
14. "Third-Party Filer" means an entity that submits a Product filing to the Commission
on behalf of an Insurer.
15. "Uniform Standard" means a standard adopted by the Commission for a Product line,
pursuant to Article VII of this Compact, and shall include all of the Product requirements in
aggregate; provided, that each Uniform Standard shall be construed, whether express or implied,
to prohibit the use of any inconsistent, misleading or ambiguous provisions in a Product and the
form of the Product made available to the public shall not be unfair, inequitable or against public
policy as determined by the Commission.
1. The Compacting States hereby create and establish a joint public agency known as the
"Interstate Insurance Product Regulation Commission." Pursuant to Article IV, the Commission
will have the power to develop Uniform Standards for Product lines, receive and provide prompt
review of Products filed therewith, and give approval to those Product filings satisfying applicable
Uniform Standards; provided, it is not intended for the Commission to be the exclusive entity for
receipt and review of insurance product filings. Nothing herein shall prohibit any Insurer from
filing its product in any State wherein the Insurer is licensed to conduct the business of insurance;
and any such filing shall be subject to the laws of the State where filed.
2. The Commission is a body corporate and politic, and an instrumentality of the
Compacting States.
3. The Commission is solely responsible for its liabilities except as otherwise specifically
provided in this Compact.
4. Venue is proper and judicial proceedings by or against the Commission shall be
brought solely and exclusively in a Court of competent jurisdiction where the principal office of
the Commission is located.
The Commission shall have the following powers:
1. To promulgate Rules, pursuant to Article VII of this Compact, which shall have the
force and effect of law and shall be binding in the Compacting States to the extent and in the
manner provided in this Compact;
2. To exercise its rulemaking authority and establish reasonable Uniform Standards for
Products covered under the Compact, and Advertisement related thereto, which shall have the
force and effect of law and shall be binding in the Compacting States, but only for those Products
filed with the Commission, provided, that a Compacting State shall have the right to opt out of
such Uniform Standard pursuant to Article VII, to the extent and in the manner provided in this
Compact, and, provided further, that any Uniform Standard established by the Commission for
long-term care insurance products may provide the same or greater protections for consumers as,
but shall not provide less than, those protections set forth in the National Association of Insurance
Commissioners' Long-Term Care Insurance Model Act and Long-Term Care Insurance Model
Regulation, respectively, adopted as of 2001. The Commission shall consider whether any
subsequent amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care
Insurance Model Regulation adopted by the NAIC require amending of the Uniform Standards
established by the Commission for long-term care insurance products;
3. To receive and review in an expeditious manner Products filed with the Commission,
and rate filings for disability income and long-term care insurance Products, and give approval of
those Products and rate filings that satisfy the applicable Uniform Standard, where such approval
shall have the force and effect of law and be binding on the Compacting States to the extent and
in the manner provided in the Compact;
4. To receive and review in an expeditious manner Advertisement relating to long-term
care insurance products for which Uniform Standards have been adopted by the Commission, and
give approval to all Advertisement that satisfies the applicable Uniform Standard. For any product
covered under this Compact, other than long-term care insurance products, the Commission shall
have the authority to require an insurer to submit all or any part of its Advertisement with respect
to that product for review or approval prior to use, if the Commission determines that the nature
of the product is such that an Advertisement of the product could have the capacity or tendency
to mislead the public . The actions of Commission as provided in this section shall have the force
and effect of law and shall be binding in the Compacting States to the extent and in the manner
provided in the Compact;
5. To exercise its rulemaking authority and designate Products and Advertisement that
may be subject to a self-certification process without the need for prior approval by the
Commission;
6. To promulgate Operating Procedures, pursuant to Article VII of this Compact, which
shall be binding in the Compacting States to the extent and in the manner provided in this
Compact;
7. To bring and prosecute legal proceedings or actions in its name as the Commission;
provided, that the standing of any state insurance department to sue or be sued under applicable
law shall not be affected;
8. To issue subpoenas requiring the attendance and testimony of witnesses and the
production of evidence;
9. To establish and maintain offices;
10. To purchase and maintain insurance and bonds;
11. To borrow, accept or contract for services of personnel, including, but not limited to,
employees of a Compacting State;
12. To hire employees, professionals or specialists, and elect or appoint officers, and to
fix their compensation, define their duties and give them appropriate authority to carry out the
purposes of the Compact, and determine their qualifications; and to establish the Commission's
personnel policies and programs relating to, among other things, conflicts of interest, rates of
compensation and qualifications of personnel;
13. To accept any and all appropriate donations and grants of money, equipment,
supplies, materials and services, and to receive, utilize and dispose of the same; provided that at
all times the Commission shall strive to avoid any appearance of impropriety;
14. To lease, purchase, accept appropriate gifts or donations of, or otherwise to own,
hold, improve or use, any property, real, personal or mixed; provided that at all times the
Commission shall strive to avoid any appearance of impropriety;
15. To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise dispose of
any property, real, personal or mixed;
16. To remit filing fees to Compacting States as may be set forth in the Bylaws, Rules or
Operating Procedures;
17. To enforce compliance by Compacting States with Rules, Uniform Standards,
Operating Procedures and Bylaws;
18. To provide for dispute resolution among Compacting States;
19. To advise Compacting States on issues relating to Insurers domiciled or doing
business in Non-compacting jurisdictions, consistent with the purposes of this Compact;
20. To provide advice and training to those personnel in state insurance departments
responsible for product review, and to be a resource for state insurance departments;
21. To establish a budget and make expenditures;
22. To borrow money;
23. To appoint committees, including advisory committees comprising Members, state
insurance regulators, state legislators or their representatives, insurance industry and consumer
representatives, and such other interested persons as may be designated in the Bylaws;
24. To provide and receive information from, and to cooperate with law enforcement
agencies;
25. To adopt and use a corporate seal; and
26. To perform such other functions as may be necessary or appropriate to achieve the
purposes of this Compact consistent with the state regulation of the business of insurance.
1. Membership, Voting and Bylaws
a. Each Compacting State shall have and be limited to one Member. Each Member shall
be qualified to serve in that capacity pursuant to applicable law of the Compacting State. Any
Member may be removed or suspended from office as provided by the law of the State from
which he or she shall be appointed. Any vacancy occurring in the Commission shall be filled in
accordance with the laws of the Compacting State wherein the vacancy exists. Nothing herein
shall be construed to affect the manner in which a Compacting State determines the election or
appointment and qualification of its own Commissioner.
b. Each Member shall be entitled to one vote and shall have an opportunity to participate
in the governance of the Commission in accordance with the Bylaws. Notwithstanding any
provision herein to the contrary, no action of the Commission with respect to the promulgation of
a Uniform Standard shall be effective unless two-thirds (2/3) of the Members vote in favor
thereof.
c. The Commission shall, by a majority of the Members, prescribe Bylaws to govern its
conduct as may be necessary or appropriate to carry out the purposes, and exercise the powers, of
the Compact, including, but not limited to:
i. establishing the fiscal year of the Commission;
ii. providing reasonable procedures for appointing and electing members, as well as
holding meetings, of the Management Committee;
iii. providing reasonable standards and procedures: (i) for the establishment and meetings
of other committees, and (ii) governing any general or specific delegation of any authority or
function of the Commission;
iv. providing reasonable procedures for calling and conducting meetings of the
Commission that consists of a majority of Commission members, ensuring reasonable advance
notice of each such meeting, and providing for the right of citizens to attend each such meeting
with enumerated exceptions designed to protect the public's interest, the privacy of individuals,
and insurers' proprietary information, including trade secrets. The Commission may meet in
camera only after a majority of the entire membership votes to close a meeting en toto or in part.
As soon as practicable, the Commission must make public (i) a copy of the vote to close the
meeting revealing the vote of each Member with no proxy votes allowed, and (ii) votes taken
during such meeting;
v. establishing the titles, duties and authority and reasonable procedures for the election
of the officers of the Commission;
vi. providing reasonable standards and procedures for the establishment of the personnel
policies and programs of the Commission. Notwithstanding any civil service or other similar laws
of any Compacting State, the Bylaws shall exclusively govern the personnel policies and programs
of the Commission;
vii. promulgating a code of ethics to address permissible and prohibited activities of
commission members and employees; and
viii. providing a mechanism for winding up the operations of the Commission and the
equitable disposition of any surplus funds that may exist after the termination of the Compact after
the payment and/or reserving of all of its debts and obligations.
d. The Commission shall publish its bylaws in a convenient form and file a copy thereof
and a copy of any amendment thereto, with the appropriate agency or officer in each of the
Compacting States.
2. Management Committee, Officers and Personnel
a. A Management Committee comprising no more than fourteen (14) members shall be
established as follows:
(i) One (1) member from each of the six (6) Compacting States with the largest premium
volume for individual and group annuities, life, disability income and long-term care insurance
products, determined from the records of the NAIC for the prior year;
(ii) Four (4) members from those Compacting States with at least two percent (2%) of
the market based on the premium volume described above, other than the six (6) Compacting
States with the largest premium volume, selected on a rotating basis as provided in the Bylaws,
and;
(iii) Four (4) members from those Compacting States with less than two percent (2%) of
the market, based on the premium volume described above, with one (1) selected from each of the
four (4) zone regions of the NAIC as provided in the Bylaws.
b. The Management Committee shall have such authority and duties as may be set forth in
the Bylaws, including but not limited to:
i. managing the affairs of the Commission in a manner consistent with the Bylaws and
purposes of the Commission;
ii. establishing and overseeing an organizational structure within, and appropriate
procedures for, the Commission to provide for the creation of Uniform Standards and other
Rules, receipt and review of product filings, administrative and technical support functions,
review of decisions regarding the disapproval of a product filing, and the review of elections made
by a Compacting State to opt out of a Uniform Standard; provided that a Uniform Standard shall
not be submitted to the Compacting States for adoption unless approved by two-thirds (2/3) of
the members of the Management Committee;
iii. overseeing the offices of the Commission; and
iv. planning, implementing, and coordinating communications and activities with other
state, federal and local government organizations in order to advance the goals of the
Commission.
c. The Commission shall elect annually officers from the Management Committee, with
each having such authority and duties, as may be specified in the Bylaws.
d. The Management Committee may, subject to the approval of the Commission, appoint
or retain an executive director for such period, upon such terms and conditions and for such
compensation as the Commission may deem appropriate. The executive director shall serve as
secretary to the Commission, but shall not be a Member of the Commission. The executive
director shall hire and supervise such other staff as may be authorized by the Commission.
3. Legislative and Advisory Committees
a. A legislative committee comprising state legislators or their designees shall be
established to monitor the operations of, and make recommendations to, the Commission,
including the Management Committee; provided that the manner of selection and term of any
legislative committee member shall be as set forth in the Bylaws. Prior to the adoption by the
Commission of any Uniform Standard, revision to the Bylaws, annual budget or other significant
matter as may be provided in the Bylaws, the Management Committee shall consult with and
report to the legislative committee.
b. The Commission shall establish two (2) advisory committees, one of which shall
comprise consumer representatives independent of the insurance industry, and the other
comprising insurance industry representatives.
c. The Commission may establish additional advisory committees as its Bylaws may
provide for the carrying out of its functions.
4. Corporate Records of the Commission
The Commission shall maintain its corporate books and records in accordance with the
Bylaws.
5. Qualified Immunity, Defense and Indemnification
a. The Members, officers, executive director, employees and representatives of the
Commission shall be immune from suit and liability, either personally or in their official capacity,
for any claim for damage to or loss of property or personal injury or other civil liability caused by
or arising out of any actual or alleged act, error or omission that occurred, or that the person
against whom the claim is made had a reasonable basis for believing occurred within the scope of
Commission employment, duties or responsibilities; provided, that nothing in this paragraph shall
be construed to protect any such person from suit and/or liability for any damage, loss, injury or
liability caused by the intentional or willful and wanton misconduct of that person.
b. The Commission shall defend any Member, officer, executive director, employee or
representative of the Commission in any civil action seeking to impose liability arising out of any
actual or alleged act, error or omission that occurred within the scope of Commission
employment, duties or responsibilities, or that the person against whom the claim is made had a
reasonable basis for believing occurred within the scope of Commission employment, duties or
responsibilities; provided, that nothing herein shall be construed to prohibit that person from
retaining his or her own counsel; and provided further, that the actual or alleged act, error or
omission did not result from that person's intentional or willful and wanton misconduct.
c. The Commission shall indemnify and hold harmless any Member, officer, executive
director, employee or representative of the Commission for the amount of any settlement or
judgment obtained against that person arising out of any actual or alleged act, error or omission
that occurred within the scope of Commission employment, duties or responsibilities, or that such
person had a reasonable basis for believing occurred within the scope of Commission
employment, duties or responsibilities, provided, that the actual or alleged act, error or omission
did not result from the intentional or willful and wanton misconduct of that person.
1. The Commission shall meet and take such actions as are consistent with the provisions
of this Compact and the Bylaws.
2. Each Member of the Commission shall have the right and power to cast a vote to
which that Compacting State is entitled and to participate in the business and affairs of the
Commission. A Member shall vote in person or by such other means as provided in the Bylaws.
The Bylaws may provide for Members' participation in meetings by telephone or other means of
communication.
3. The Commission shall meet at least once during each calendar year. Additional
meetings shall be held as set forth in the Bylaws.
1. Rulemaking Authority. The Commission shall promulgate reasonable Rules, including
Uniform Standards, and Operating Procedures in order to effectively and efficiently achieve the
purposes of this Compact. Notwithstanding the foregoing, in the event the Commission exercises
its rulemaking authority in a manner that is beyond the scope of the purposes of this Act, or the
powers granted hereunder, then such an action by the Commission shall be invalid and have no
force and effect.
2. Rulemaking Procedure. Rules and Operating Procedures shall be made pursuant to a
rulemaking process that conforms to the Model State Administrative Procedure Act of 1981 as
amended, as may be appropriate to the operations of the Commission. Before the Commission
adopts a Uniform Standard, the Commission shall give written notice to the relevant state
legislative committee(s) in each Compacting State responsible for insurance issues of its intention
to adopt the Uniform Standard. The Commission in adopting a Uniform Standard shall consider
fully all submitted materials and issue a concise explanation of its decision.
3. Effective Date and Opt Out of a Uniform Standard. A Uniform Standard shall become
effective ninety (90) days after its promulgation by the Commission or such later date as the
Commission may determine; provided, however, that a Compacting State may opt out of a
Uniform Standard as provided in this Article. "Opt out" shall be defined as any action by a
Compacting State to decline to adopt or participate in a promulgated Uniform Standard. All other
Rules and Operating Procedures, and amendments thereto, shall become effective as of the date
specified in each Rule, Operating Procedure or amendment.
4. Opt Out Procedure. A Compacting State may opt out of a Uniform Standard, either by
legislation or regulation duly promulgated by the Insurance Department under the Compacting
State's Administrative Procedure Act. If a Compacting State elects to opt out of a Uniform
Standard by regulation, it must (a) give written notice to the Commission no later than ten (10)
business days after the Uniform Standard is promulgated, or at the time the State becomes a
Compacting State and (b) find that the Uniform Standard does not provide reasonable protections
to the citizens of the State, given the conditions in the State. The Commissioner shall make
specific findings of fact and conclusions of law, based on a preponderance of the evidence,
detailing the conditions in the State which warrant a departure from the Uniform Standard and
determining that the Uniform Standard would not reasonably protect the citizens of the State. The
Commissioner must consider and balance the following factors and find that the conditions in the
State and needs of the citizens of the State outweigh: (i) the intent of the legislature to participate
in, and the benefits of, an interstate agreement to establish national uniform consumer protections
for the Products subject to this Act; and (ii) the presumption that a Uniform Standard adopted by
the Commission provides reasonable protections to consumers of the relevant Product.
Notwithstanding the foregoing, a Compacting State may, at the time of its enactment of
this Compact, prospectively opt out of all Uniform Standards involving long-term care insurance
products by expressly providing for such opt out in the enacted Compact, and such an opt out
shall not be treated as a material variance in the offer or acceptance of any State to participate in
this Compact. Such an opt out shall be effective at the time of enactment of this Compact by the
Compacting State and shall apply to all existing Uniform Standards involving long-term care
insurance products and those subsequently promulgated.
5. Effect of Opt Out. If a Compacting State elects to opt out of a Uniform Standard, the
Uniform Standard shall remain applicable in the Compacting State electing to opt out until such
time the opt out legislation is enacted into law or the regulation opting out becomes effective.
Once the opt out of a Uniform Standard by a Compacting State becomes effective as
provided under the laws of that State, the Uniform Standard shall have no further force and effect
in that State unless and until the legislation or regulation implementing the opt out is repealed or
otherwise becomes ineffective under the laws of the State. If a Compacting State opts out of a
Uniform Standard after the Uniform Standard has been made effective in that State, the opt out
shall have the same prospective effect as provided under Article XIV for withdrawals.
6. Stay of Uniform Standard. If a Compacting State has formally initiated the process of
opting out of a Uniform Standard by regulation, and while the regulatory opt out is pending, the
Compacting State may petition the Commission, at least fifteen (15) days before the effective date
of the Uniform Standard, to stay the effectiveness of the Uniform Standard in that State. The
Commission may grant a stay if it determines the regulatory opt out is being pursued in a
reasonable manner and there is a likelihood of success. If a stay is granted or extended by the
Commission, the stay or extension thereof may postpone the effective date by up to ninety (90)
days, unless affirmatively extended by the Commission; provided, a stay may not be permitted to
remain in effect for more than one (1) year unless the Compacting State can show extraordinary
circumstances which warrant a continuance of the stay, including, but not limited to, the existence
of a legal challenge which prevents the Compacting State from opting out. A stay may be
terminated by the Commission upon notice that the rulemaking process has been terminated.
7. Not later than thirty (30) days after a Rule or Operating Procedure is promulgated, any
person may file a petition for judicial review of the Rule or Operating Procedure; provided, that
the filing of such a petition shall not stay or otherwise prevent the Rule or Operating Procedure
from becoming effective unless the court finds that the petitioner has a substantial likelihood of
success. The court shall give deference to the actions of the Commission consistent with
applicable law and shall not find the Rule or Operating Procedure to be unlawful if the Rule or
Operating Procedure represents a reasonable exercise of the Commission's authority.
1. The Commission shall promulgate Rules establishing conditions and procedures for
public inspection and copying of its information and official records, except such information and
records involving the privacy of individuals and insurers' trade secrets. The Commission may
promulgate additional Rules under which it may make available to federal and state agencies,
including law enforcement agencies, records and information otherwise exempt from disclosure,
and may enter into agreements with such agencies to receive or exchange information or records
subject to nondisclosure and confidentiality provisions.
2. Except as to privileged records, data and information, the laws of any Compacting
State pertaining to confidentiality or nondisclosure shall not relieve any Compacting State
Commissioner of the duty to disclose any relevant records, data or information to the
Commission; provided, that disclosure to the Commission shall not be deemed to waive or
otherwise affect any confidentiality requirement; and further provided, that, except as otherwise
expressly provided in this Act, the Commission shall not be subject to the Compacting State's
laws pertaining to confidentiality and nondisclosure with respect to records, data and information
in its possession. Confidential information of the Commission shall remain confidential after such
information is provided to any Commissioner.
3. The Commission shall monitor Compacting States for compliance with duly adopted
Bylaws, Rules, including Uniform Standards, and Operating Procedures. The Commission shall
notify any non-complying Compacting State in writing of its noncompliance with Commission
Bylaws, Rules or Operating Procedures. If a non-complying Compacting State fails to remedy its
noncompliance within the time specified in the notice of noncompliance, the Compacting State
shall be deemed to be in default as set forth in Article XIV.
4. The Commissioner of any State in which an Insurer is authorized to do business, or is
conducting the business of insurance, shall continue to exercise his or her authority to oversee the
market regulation of the activities of the Insurer in accordance with the provisions of the State's
law. The Commissioner's enforcement of compliance with the Compact is governed by the
following provisions:
a. With respect to the Commissioner's market regulation of a Product or Advertisement
that is approved or certified to the Commission, the content of the Product or Advertisement shall
not constitute a violation of the provisions, standards or requirements of the Compact except
upon a final order of the Commission, issued at the request of a Commissioner after prior notice
to the Insurer and an opportunity for hearing before the Commission.
b. Before a Commissioner may bring an action for violation of any provision, standard or
requirement of the Compact relating to the content of an Advertisement not approved or certified
to the Commission, the Commission, or an authorized Commission officer or employee, must
authorize the action. However, authorization pursuant to this Paragraph does not require notice
to the Insurer, opportunity for hearing or disclosure of requests for authorization or records of the
Commission's action on such requests.
The Commission shall attempt, upon the request of a Member, to resolve any disputes or
other issues that are subject to this Compact and which may arise between two or more
Compacting States, or between Compacting States and Non-compacting States, and the
Commission shall promulgate an Operating Procedure providing for resolution of such disputes.
1. Insurers and Third-Party Filers seeking to have a Product approved by the Commission
shall file the Product with, and pay applicable filing fees to, the Commission. Nothing in this Act
shall be construed to restrict or otherwise prevent an insurer from filing its Product with the
insurance department in any State wherein the insurer is licensed to conduct the business of
insurance, and such filing shall be subject to the laws of the States where filed.
2. The Commission shall establish appropriate filing and review processes and procedures
pursuant to Commission Rules and Operating Procedures. Notwithstanding any provision herein
to the contrary, the Commission shall promulgate Rules to establish conditions and procedures
under which the Commission will provide public access to Product filing information. In
establishing such Rules, the Commission shall consider the interests of the public in having access
to such information, as well as protection of personal medical and financial information and trade
secrets, that may be contained in a Product filing or supporting information.
3. Any Product approved by the Commission may be sold or otherwise issued in those
Compacting States for which the Insurer is legally authorized to do business.
1. Not later than thirty (30) days after the Commission has given notice of a disapproved
Product or Advertisement filed with the Commission, the Insurer or Third-Party Filer whose filing
was disapproved may appeal the determination to a review panel appointed by the Commission.
The Commission shall promulgate Rules to establish procedures for appointing such review panels
and provide for notice and hearing. An allegation that the Commission, in disapproving a Product
or Advertisement filed with the Commission, acted arbitrarily, capriciously, or in a manner that is
an abuse of discretion or otherwise not in accordance with the law, is subject to judicial review in
accordance with Article III, Section 4.
2. The Commission shall have authority to monitor, review and reconsider Products and
Advertisement subsequent to their filing or approval upon a finding that the product does not
meet the relevant Uniform Standard. Where appropriate, the Commission may withdraw or
modify its approval after proper notice and hearing, subject to the appeal process in Section 1
above.
1. The Commission shall pay or provide for the payment of the reasonable expenses of its
establishment and organization. To fund the cost of its initial operations, the Commission may
accept contributions and other forms of funding from the National Association of Insurance
Commissioners, Compacting States and other sources. Contributions and other forms of funding
from other sources shall be of such a nature that the independence of the Commission concerning
the performance of its duties shall not be compromised.
2. The Commission shall collect a filing fee from each Insurer and Third-Party Filer filing
a product with the Commission to cover the cost of the operations and activities of the
Commission and its staff in a total amount sufficient to cover the Commission's annual budget.
3. The Commission's budget for a fiscal year shall not be approved until it has been
subject to notice and comment as set forth in Article VII of this Compact.
4. The Commission shall be exempt from all taxation in and by the Compacting States.
5. The Commission shall not pledge the credit of any Compacting State, except by and
with the appropriate legal authority of that Compacting State.
6. The Commission shall keep complete and accurate accounts of all its internal receipts,
including grants and donations, and disbursements of all funds under its control. The internal
financial accounts of the Commission shall be subject to the accounting procedures established
under its Bylaws. The financial accounts and reports including the system of internal controls and
procedures of the Commission shall be audited annually by an independent certified public
accountant. Upon the determination of the Commission, but no less frequently than every three
(3) years, the review of the independent auditor shall include a management and performance
audit of the Commission. The Commission shall make an Annual Report to the Governor and
legislature of the Compacting States, which shall include a report of the independent audit. The
Commission's internal accounts shall not be confidential and such materials may be shared with
the Commissioner of any Compacting State upon request, provided, however, that any work
papers related to any internal or independent audit and any information regarding the privacy of
individuals and insurers' proprietary information, including trade secrets, shall remain confidential.
7. No Compacting State shall have any claim to or ownership of any property held by or
vested in the Commission or to any Commission funds held pursuant to the provisions of this
Compact.
1. Any State is eligible to become a Compacting State.
2. The Compact shall become effective and binding upon legislative enactment of the
Compact into law by two Compacting States; provided, the Commission shall become effective
for purposes of adopting Uniform Standards for, reviewing, and giving approval or disapproval
of, Products filed with the Commission that satisfy applicable Uniform Standards only after
twenty-six (26) States are Compacting States or, alternatively, by States representing greater than
forty percent (40%) of the premium volume for life insurance, annuity, disability income and
long-term care insurance products, based on records of the NAIC for the prior year. Thereafter, it
shall become effective and binding as to any other Compacting State upon enactment of the
Compact into law by that State.
3. Amendments to the Compact may be proposed by the Commission for enactment by
the Compacting States. No amendment shall become effective and binding upon the Commission
and the Compacting States unless and until all Compacting States enact the amendment into law.
1. Withdrawal
a. Once effective, the Compact shall continue in force and remain binding upon each and
every Compacting State; provided, that a Compacting State may withdraw from the Compact
("Withdrawing State") by enacting a statute specifically repealing the statute which enacted the
Compact into law.
b. The effective date of withdrawal is the effective date of the repealing statute. However,
the withdrawal shall not apply to any product filings approved or self-certified, or any
Advertisement of such products, on the date the repealing statute becomes effective, except by
mutual agreement of the Commission and the Withdrawing State unless the approval is rescinded
by the Withdrawing State as provided in Paragraph e of this section.
c. The Commissioner of the Withdrawing State shall immediately notify the Management
Committee in writing upon the introduction of legislation repealing this Compact in the
Withdrawing State.
d. The Commission shall notify the other Compacting States of the introduction of such
legislation within ten (10) days after its receipt of notice thereof.
e. The Withdrawing State is responsible for all obligations, duties and liabilities incurred
through the effective date of withdrawal, including any obligations, the performance of which
extend beyond the effective date of withdrawal, except to the extent those obligations may have
been released or relinquished by mutual agreement of the Commission and the Withdrawing State.
The Commission's approval of Products and Advertisement prior to the effective date of
withdrawal shall continue to be effective and be given full force and effect in the Withdrawing
State, unless formally rescinded by the Withdrawing State in the same manner as provided by the
laws of the Withdrawing State for the prospective disapproval of products or advertisement
previously approved under state law.
f. Reinstatement following withdrawal of any Compacting State shall occur upon the
effective date of the Withdrawing State reenacting the Compact.
2. Default
a. If the Commission determines that any Compacting State has at any time defaulted
("Defaulting State") in the performance of any of its obligations or responsibilities under this
Compact, the Bylaws or duly promulgated Rules or Operating Procedures, then, after notice and
hearing as set forth in the Bylaws, all rights, privileges and benefits conferred by this Compact on
the Defaulting State shall be suspended from the effective date of default as fixed by the
Commission. The grounds for default include, but are not limited to, failure of a Compacting State
to perform its obligations or responsibilities, and any other grounds designated in Commission
Rules. The Commission shall immediately notify the Defaulting State in writing of the Defaulting
State's suspension pending a cure of the default. The Commission shall stipulate the conditions
and the time period within which the Defaulting State must cure its default. If the Defaulting State
fails to cure the default within the time period specified by the Commission, the Defaulting State
shall be terminated from the Compact and all rights, privileges and benefits conferred by this
Compact shall be terminated from the effective date of termination.
b. Product approvals by the Commission or product self-certifications, or any
Advertisement in connection with such product, that are in force on the effective date of
termination shall remain in force in the Defaulting State in the same manner as if the Defaulting
State had withdrawn voluntarily pursuant to Section 1 of this article.
c. Reinstatement following termination of any Compacting State requires a reenactment
of the Compact.
3. Dissolution of Compact
a. The Compact dissolves effective upon the date of the withdrawal or default of the
Compacting State which reduces membership in the Compact to one Compacting State.
b. Upon the dissolution of this Compact, the Compact becomes null and void and shall be
of no further force or effect, and the business and affairs of the Commission shall be wound up
and any surplus funds shall be distributed in accordance with the Bylaws.
1. The provisions of this Compact shall be severable; and if any phrase, clause, sentence
or provision is deemed unenforceable, the remaining provisions of the Compact shall be
enforceable.
2. The provisions of this Compact shall be liberally construed to effectuate its purposes.
1. Other Laws
a. Nothing herein prevents the enforcement of any other law of a Compacting State,
except as provided in Paragraph b of this section.
b. For any Product approved or certified to the Commission, the Rules, Uniform
Standards and any other requirements of the Commission shall constitute the exclusive provisions
applicable to the content, approval and certification of such Products. For Advertisement that is
subject to the Commission's authority, any Rule, Uniform Standard or other requirement of the
Commission which governs the content of the Advertisement shall constitute the exclusive
provision that a Commissioner may apply to the content of the Advertisement. Notwithstanding
the foregoing, no action taken by the Commission shall abrogate or restrict: (i) the access of any
person to state courts; (ii) remedies available under state law related to breach of contract, tort, or
other laws not specifically directed to the content of the Product; (iii) state law relating to the
construction of insurance contracts; or (iv) the authority of the attorney general of the state,
including but not limited to maintaining any actions or proceedings, as authorized by law.
c. All insurance products filed with individual States shall be subject to the laws of those
States.
2. Binding Effect of this Compact
a. All lawful actions of the Commission, including all Rules and Operating Procedures
promulgated by the Commission, are binding upon the Compacting States.
b. All agreements between the Commission and the Compacting States are binding in
accordance with their terms.
c. Upon the request of a party to a conflict over the meaning or interpretation of
Commission actions, and upon a majority vote of the Compacting States, the Commission may
issue advisory opinions regarding the meaning or interpretation in dispute.
d. In the event any provision of this Compact exceeds the constitutional limits imposed on
the legislature of any Compacting State, the obligations, duties, powers or jurisdiction sought to
be conferred by that provision upon the Commission shall be ineffective as to that Compacting
State, and those obligations, duties, powers or jurisdiction shall remain in the Compacting State
and shall be exercised by the agency thereof to which those obligations, duties, powers or
jurisdiction are delegated by law in effect at the time this Compact becomes effective.
[Bill Documents][Bills Directory]