1 | A bill to be entitled |
2 | An act relating to the Interstate Insurance Product |
3 | Regulation Compact; providing legislative findings and |
4 | intent; providing purposes; providing definitions; |
5 | providing for establishment of an Interstate Insurance |
6 | Product Regulation Commission; providing responsibilities |
7 | of the commission; specifying the commission as an |
8 | instrumentality of the compacting states; providing for |
9 | venue; providing powers of the commission; providing for |
10 | organization of the commission; providing for membership, |
11 | voting, and bylaws; designating the Chief Financial |
12 | Officer as the representative of this state on the |
13 | commission; providing for a management committee, |
14 | officers, and personnel of the commission; providing |
15 | authority of the management committee; providing for |
16 | legislative and advisory committees; providing for |
17 | qualified immunity, defense, and indemnification of |
18 | members, officers, employees, and representatives of the |
19 | commission; providing for meetings and acts of the |
20 | commission; providing rules and operating procedures; |
21 | providing rulemaking functions of the commission; |
22 | providing for opting out of uniform standards; providing |
23 | procedures and requirements; providing for commission |
24 | records and enforcement; authorizing the commission to |
25 | adopt rules; providing for disclosure of certain |
26 | information; requiring the commission to monitor for |
27 | compliance; providing for dispute resolution; providing |
28 | for product filing and approval; requiring the commission |
29 | to establish filing and review processes and procedures; |
30 | providing for review of commission decisions regarding |
31 | filings; providing for finance of commission activities; |
32 | providing for payment of expenses; authorizing the |
33 | commission to collect filing fees for certain purposes; |
34 | providing for approval of a commission budget; exempting |
35 | the commission from all taxation; prohibiting the |
36 | commission from pledging the credit of any compacting |
37 | states without authority; requiring the commission to keep |
38 | complete accurate accounts, provide for audits, and make |
39 | annual reports to the Governors and Legislatures of |
40 | compacting states; providing for effective date and |
41 | amendment of the compact; providing for withdrawal from |
42 | the compact, default by compacting states, and dissolution |
43 | of the compact; providing severability and construction; |
44 | providing for binding effect of compact and other laws; |
45 | providing an effective date. |
46 |
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47 | Be It Enacted by the Legislature of the State of Florida: |
48 |
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49 | Section 1. Legislative findings; intent.-- |
50 | (1) The Legislature finds that the financial services |
51 | marketplace has changed significantly in recent years and that |
52 | asset-based insurance products, which include life insurance, |
53 | annuities, disability income insurance, and long-term care |
54 | insurance, now compete directly with other retirement and estate |
55 | planning instruments that are sold by banks and securities |
56 | firms. |
57 | (2) The Legislature further finds that the increased |
58 | mobility of the population and the risks borne by these asset- |
59 | based products are not local in nature. |
60 | (3) The Legislature further finds that the Interstate |
61 | Insurance Product Regulation Compact Model adopted by the |
62 | National Association of Insurance Commissioners and endorsed by |
63 | the National Conference of Insurance Legislators and the |
64 | National Conference of State Legislatures is designed to address |
65 | these market changes by providing a uniform set of product |
66 | standards and a single source for filing of new products. |
67 | (4) The Legislature further finds that the product |
68 | standards that have been developed provide a high level of |
69 | consumer protection. Further, it is noted that the Interstate |
70 | Insurance Product Regulation Compact Model includes a mechanism |
71 | for opting out of any product standard that the state determines |
72 | would not reasonably protect its citizens. With respect to long- |
73 | term care insurance, the Legislature understands that the |
74 | compact does not intend to develop a uniform standard for rate |
75 | increase filings, thereby leaving the authority over long-term |
76 | care rate increases with the state. The state relies on that |
77 | understanding in adopting this legislation. The state, pursuant |
78 | to the terms and conditions of this act, seeks to join with |
79 | other states and establish the Interstate Insurance Product |
80 | Regulation Compact, and thus become a member of the Interstate |
81 | Insurance Product Regulation Commission. The Commissioner of |
82 | Insurance Regulation is hereby designated to serve as the |
83 | representative of this state on the commission. |
84 | Section 2. Interstate Insurance Product Regulation |
85 | Compact.--The Interstate Insurance Product Regulation Compact is |
86 | hereby enacted into law and entered into by this state with all |
87 | states legally joining therein in the form substantially as |
88 | follows: |
89 |
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90 | Interstate Insurance Product Regulation Compact |
91 |
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92 | Preamble |
93 |
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94 | This compact is intended to help states join together to |
95 | establish an interstate compact to regulate designated insurance |
96 | products. Pursuant to terms and conditions of this compact, this |
97 | state seeks to join with other states and establish the |
98 | Interstate Insurance Product Regulation Compact and thus become |
99 | a member of the Interstate Insurance Product Regulation |
100 | Commission. |
101 |
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102 | Article I |
103 |
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104 | PURPOSES.--The purposes of this compact are, through means |
105 | of joint and cooperative action among the compacting states, to: |
106 | (1) Promote and protect the interest of consumers of |
107 | individual and group annuity, life insurance, disability income, |
108 | and long-term care insurance products. |
109 | (2) Develop uniform standards for insurance products |
110 | covered under the compact. |
111 | (3) Establish a central clearinghouse to receive and |
112 | provide prompt review of insurance products covered under the |
113 | compact and, in certain cases, advertisements related thereto, |
114 | submitted by insurers authorized to do business in one or more |
115 | compacting states. |
116 | (4) Give appropriate regulatory approval to those product |
117 | filings and advertisements satisfying the applicable uniform |
118 | standard. |
119 | (5) Improve coordination of regulatory resources and |
120 | expertise between state insurance departments regarding the |
121 | setting of uniform standards and review of insurance products |
122 | covered under the compact. |
123 | (6) Create the Interstate Insurance Product Regulation |
124 | Commission. |
125 | (7) Perform these and such other related functions as may |
126 | be consistent with the state regulation of the business of |
127 | insurance. |
128 |
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129 | Article II |
130 |
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131 | DEFINITIONS.--For purposes of this compact: |
132 | (1) "Advertisement" means any material designed to create |
133 | public interest in a product, or induce the public to purchase, |
134 | increase, modify, reinstate, borrow on, surrender, replace, or |
135 | retain a policy, as more specifically defined in the rules and |
136 | operating procedures of the commission. |
137 | (2) "Bylaws" mean those bylaws established by the |
138 | commission for its governance, or for directing or controlling |
139 | the commission's actions or conduct. |
140 | (3) "Compacting state" means any state which has enacted |
141 | this compact legislation and which has not withdrawn pursuant to |
142 | subsection (1) of Article XIV or been terminated pursuant to |
143 | subsection (2) of Article XIV. |
144 | (4) "Commission" means the "Interstate Insurance Product |
145 | Regulation Commission" established by this compact. |
146 | (5) "Commissioner" means the chief insurance regulatory |
147 | official of a state, including, but not limited to, |
148 | commissioner, superintendent, director, or administrator. For |
149 | purposes of this compact, the Chief Financial Officer is the |
150 | chief insurance regulatory official of this state. |
151 | (6) "Domiciliary state" means the state in which an |
152 | insurer is incorporated or organized or, in the case of an alien |
153 | insurer, its state of entry. |
154 | (7) "Insurer" means any entity licensed by a state to |
155 | issue contracts of insurance for any of the lines of insurance |
156 | covered by this compact. |
157 | (8) "Member" means the person chosen by a compacting state |
158 | as its representative to the commission, or his or her designee. |
159 | (9) "Noncompacting state" means any state which is not at |
160 | the time a compacting state. |
161 | (10) "Operating procedures" mean procedures adopted by the |
162 | commission implementing a rule, uniform standard, or provision |
163 | of this compact. |
164 | (11) "Product" means the form of a policy or contract, |
165 | including any application, endorsement, or related form which is |
166 | attached to and made a part of the policy or contract, and any |
167 | evidence of coverage or certificate, for an individual or group |
168 | annuity, life insurance, disability income, or long-term care |
169 | insurance product that an insurer is authorized to issue. |
170 | (12) "Rule" means a statement of general or particular |
171 | applicability and future effect adopted by the commission, |
172 | including a uniform standard developed pursuant to Article VII, |
173 | designed to implement, interpret, or prescribe law or policy or |
174 | describing the organization, procedure, or practice requirements |
175 | of the commission, which shall have the force and effect of law |
176 | in the compacting states. |
177 | (13) "State" means any state, district, or territory of |
178 | the United States. |
179 | (14) "Third-party filer" means an entity that submits a |
180 | product filing to the commission on behalf of an insurer. |
181 | (15) "Uniform standard" means a standard adopted by the |
182 | commission for a product line pursuant to Article VII and shall |
183 | include all of the product requirements in aggregate; provided, |
184 | each uniform standard shall be construed, whether express or |
185 | implied, to prohibit the use of any inconsistent, misleading, or |
186 | ambiguous provisions in a product and the form of the product |
187 | made available to the public shall not be unfair, inequitable, |
188 | or against public policy as determined by the commission. |
189 |
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190 | Article III |
191 |
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192 | COMMISSION; ESTABLISHMENT; VENUE.-- |
193 | (1) The compacting states hereby create and establish a |
194 | joint public agency known as the Interstate Insurance Product |
195 | Regulation Commission. Pursuant to Article IV, the commission |
196 | has the power to develop uniform standards for product lines, |
197 | receive and provide prompt review of products filed with the |
198 | commission, and give approval to those product filings |
199 | satisfying applicable uniform standards; provided, it is not |
200 | intended for the commission to be the exclusive entity for |
201 | receipt and review of insurance product filings. Nothing in this |
202 | article shall prohibit any insurer from filing its product in |
203 | any state in which the insurer is licensed to conduct the |
204 | business of insurance and any such filing shall be subject to |
205 | the laws of the state where filed. |
206 | (2) The commission is a body corporate and politic and an |
207 | instrumentality of the compacting states. |
208 | (3) The commission is solely responsible for its |
209 | liabilities, except as otherwise specifically provided in this |
210 | compact. |
211 | (4) Venue is proper and judicial proceedings by or against |
212 | the commission shall be brought solely and exclusively in a |
213 | court of competent jurisdiction where the principal office of |
214 | the commission is located. |
215 |
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216 | Article IV |
217 |
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218 | POWERS.--The commission shall have the following powers to: |
219 | (1) Adopt rules, pursuant to Article VII, which shall have |
220 | the force and effect of law and shall be binding in the |
221 | compacting states to the extent and in the manner provided in |
222 | this compact. |
223 | (2) Exercise its rulemaking authority and establish |
224 | reasonable uniform standards for products covered under the |
225 | compact, and advertisement related thereto, which shall have the |
226 | force and effect of law and shall be binding in the compacting |
227 | states, but only for those products filed with the commission; |
228 | provided a compacting state shall have the right to opt out of |
229 | such uniform standard pursuant to Article VII to the extent and |
230 | in the manner provided in this compact and any uniform standard |
231 | established by the commission for long-term care insurance |
232 | products may provide the same or greater protections for |
233 | consumers as, but shall not provide less than, those protections |
234 | set forth in the National Association of Insurance |
235 | Commissioners' Long-Term Care Insurance Model Act and Long-Term |
236 | Care Insurance Model Regulation, respectively, adopted as of |
237 | 2001. The commission shall consider whether any subsequent |
238 | amendments to the National Association of Insurance |
239 | Commissioners' Long-Term Care Insurance Model Act or Long-Term |
240 | Care Insurance Model Regulation adopted by the National |
241 | Association of Insurance Commissioners require amending of the |
242 | uniform standards established by the commission for long-term |
243 | care insurance products. |
244 | (3) Receive and review in an expeditious manner products |
245 | filed with the commission and rate filings for disability income |
246 | and long-term care insurance products and give approval of those |
247 | products and rate filings that satisfy the applicable uniform |
248 | standard, and such approval shall have the force and effect of |
249 | law and be binding on the compacting states to the extent and in |
250 | the manner provided in the compact. |
251 | (4) Receive and review in an expeditious manner |
252 | advertisement relating to long-term care insurance products for |
253 | which uniform standards have been adopted by the commission, and |
254 | give approval to all advertisement that satisfies the applicable |
255 | uniform standard. For any product covered under this compact, |
256 | other than long-term care insurance products, the commission |
257 | shall have the authority to require an insurer to submit all or |
258 | any part of its advertisement with respect to that product for |
259 | review or approval prior to use, if the commission determines |
260 | that the nature of the product is such that an advertisement of |
261 | the product could have the capacity or tendency to mislead the |
262 | public. The actions of the commission as provided in this |
263 | subsection shall have the force and effect of law and shall be |
264 | binding in the compacting states to the extent and in the manner |
265 | provided in the compact. |
266 | (5) Exercise its rulemaking authority and designate |
267 | products and advertisement that may be subject to a self- |
268 | certification process without the need for prior approval by the |
269 | commission. |
270 | (6) Adopt operating procedures, pursuant to Article VII, |
271 | which shall be binding in the compacting states to the extent |
272 | and in the manner provided in this compact. |
273 | (7) Bring and prosecute legal proceedings or actions in |
274 | its name as the commission; provided the standing of any state |
275 | insurance department to sue or be sued under applicable law |
276 | shall not be affected. |
277 | (8) Issue subpoenas requiring the attendance and testimony |
278 | of witnesses and the production of evidence. |
279 | (9) Establish and maintain offices. |
280 | (10) Purchase and maintain insurance and bonds. |
281 | (11) Borrow, accept, or contract for services of |
282 | personnel, including, but not limited to, employees of a |
283 | compacting state. |
284 | (12) Hire employees, professionals, or specialists; elect |
285 | or appoint officers and fix their compensation, define their |
286 | duties, give them appropriate authority to carry out the |
287 | purposes of the compact, and determine their qualifications; and |
288 | establish the commission's personnel policies and programs |
289 | relating to, among other things, conflicts of interest, rates of |
290 | compensation, and qualifications of personnel. |
291 | (13) Accept any and all appropriate donations and grants |
292 | of money, equipment, supplies, materials, and services and to |
293 | receive, use, and dispose of the same; provided at all times the |
294 | commission shall strive to avoid any appearance of impropriety. |
295 | (14) Lease, purchase, and accept appropriate gifts or |
296 | donations of, or otherwise to own, hold, improve, or use, any |
297 | property, real, personal, or mixed; provided at all times the |
298 | commission shall strive to avoid any appearance of impropriety. |
299 | (15) Sell, convey, mortgage, pledge, lease, exchange, |
300 | abandon, or otherwise dispose of any property, real, personal, |
301 | or mixed. |
302 | (16) Remit filing fees to compacting states as may be set |
303 | forth in the bylaws, rules, or operating procedures. |
304 | (17) Enforce compliance by compacting states with rules, |
305 | uniform standards, operating procedures, and bylaws. |
306 | (18) Provide for dispute resolution among compacting |
307 | states. |
308 | (19) Advise compacting states on issues relating to |
309 | insurers domiciled or doing business in noncompacting |
310 | jurisdictions, consistent with the purposes of this compact. |
311 | (20) Provide advice and training to those personnel in |
312 | state insurance departments responsible for product review and |
313 | to be a resource for state insurance departments. |
314 | (21) Establish a budget and make expenditures. |
315 | (22) Borrow money. |
316 | (23) Appoint committees, including advisory committees, |
317 | comprising members, state insurance regulators, state |
318 | legislators or their representatives, insurance industry and |
319 | consumer representatives, and such other interested persons as |
320 | may be designated in the bylaws. |
321 | (24) Provide and receive information from and to cooperate |
322 | with law enforcement agencies. |
323 | (25) Adopt and use a corporate seal. |
324 | (26) Perform such other functions as may be necessary or |
325 | appropriate to achieve the purposes of this compact consistent |
326 | with the state regulation of the business of insurance. |
327 |
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328 | Article V |
329 |
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330 | ORGANIZATION.-- |
331 | (1) Membership; voting; bylaws.-- |
332 | (a)1. Each compacting state shall have and be limited to |
333 | one member. Each member shall be qualified to serve in that |
334 | capacity pursuant to applicable law of the compacting state. Any |
335 | member may be removed or suspended from office as provided by |
336 | the law of the state from which he or she is appointed. Any |
337 | vacancy occurring in the commission shall be filled in |
338 | accordance with the laws of the compacting state in which the |
339 | vacancy exists. Nothing in this article shall be construed to |
340 | affect the manner in which a compacting state determines the |
341 | election or appointment and qualification of its own |
342 | commissioner. |
343 | 2. The Chief Financial Officer is hereby designated to |
344 | serve as the representative of this state on the commission. |
345 | (b) Each member shall be entitled to one vote and shall |
346 | have an opportunity to participate in the governance of the |
347 | commission in accordance with the bylaws. Notwithstanding any |
348 | other provision of this article, no action of the commission |
349 | with respect to the adoption of a uniform standard shall be |
350 | effective unless two-thirds of the members vote in favor of such |
351 | action. |
352 | (c) The commission shall, by a majority of the members, |
353 | prescribe bylaws to govern its conduct as may be necessary or |
354 | appropriate to carry out the purposes and exercise the powers of |
355 | the compact, including, but not limited to: |
356 | 1. Establishing the fiscal year of the commission. |
357 | 2. Providing reasonable procedures for appointing and |
358 | electing members, as well as holding meetings, of the management |
359 | committee. |
360 | 3. Providing reasonable standards and procedures: |
361 | a. For the establishment and meetings of other committees. |
362 | b. Governing any general or specific delegation of any |
363 | authority or function of the commission. |
364 | 4. Providing reasonable procedures for calling and |
365 | conducting meetings of the commission that consist of a majority |
366 | of commission members, ensuring reasonable advance notice of |
367 | each such meeting, and providing for the right of citizens to |
368 | attend each such meeting with enumerated exceptions designed to |
369 | protect the public's interest, the privacy of individuals, and |
370 | insurers' proprietary information, including, but not limited |
371 | to, trade secrets. The commission may meet in camera only after |
372 | a majority of the entire membership votes to close a meeting in |
373 | total or in part. As soon as practicable, the commission must |
374 | make public a copy of the vote to close the meeting revealing |
375 | the vote of each member with no proxy votes allowed, and votes |
376 | taken during such meeting. |
377 | 5. Establishing the titles, duties, and authority and |
378 | reasonable procedures for the election of the officers of the |
379 | commission. |
380 | 6. Providing reasonable standards and procedures for the |
381 | establishment of the personnel policies and programs of the |
382 | commission. Notwithstanding any civil service or other similar |
383 | laws of any compacting state, the bylaws shall exclusively |
384 | govern the personnel policies and programs of the commission. |
385 | 7. Adopting a code of ethics to address permissible and |
386 | prohibited activities of commission members and employees. |
387 | 8. Providing a mechanism for winding up the operations of |
388 | the commission and the equitable disposition of any surplus |
389 | funds that may exist after the termination of the compact after |
390 | the payment or reserving of all debts and obligations of the |
391 | commission. |
392 | (d) The commission shall publish its bylaws in a |
393 | convenient form and file a copy of such bylaws and a copy of any |
394 | amendment to such bylaws, with the appropriate agency or officer |
395 | in each of the compacting States. |
396 | (2) Management committee, officers, and personnel.-- |
397 | (a) A management committee comprising no more than 14 |
398 | members shall be established as follows: |
399 | 1. One member from each of the 6 compacting states with |
400 | the largest premium volume for individual and group annuities, |
401 | life, disability income, and long-term care insurance products, |
402 | determined from the records of the National Association of |
403 | Insurance Commissioners for the prior year. |
404 | 2. Four members from those compacting states with at least |
405 | 2 percent of the market based on the premium volume described |
406 | above, other than the 6 compacting states with the largest |
407 | premium volume, selected on a rotating basis as provided in the |
408 | bylaws. |
409 | 3. Four members from those compacting states with less |
410 | than 2 percent of the market, based on the premium volume |
411 | described above, with 1 selected from each of the 4 zone regions |
412 | of the National Association of Insurance Commissioners as |
413 | provided in the bylaws. |
414 | (b) The management committee shall have such authority and |
415 | duties as may be set forth in the bylaws, including, but not |
416 | limited to: |
417 | 1. Managing the affairs of the commission in a manner |
418 | consistent with the bylaws and purposes of the commission. |
419 | 2. Establishing and overseeing an organizational structure |
420 | within, and appropriate procedures for, the commission to |
421 | provide for the creation of uniform standards and other rules, |
422 | receipt and review of product filings, administrative and |
423 | technical support functions, review of decisions regarding the |
424 | disapproval of a product filing, and the review of elections |
425 | made by a compacting state to opt out of a uniform standard; |
426 | provided a uniform standard shall not be submitted to the |
427 | compacting states for adoption unless approved by two-thirds of |
428 | the members of the management committee. |
429 | 3. Overseeing the offices of the commission. |
430 | 4. Planning, implementing, and coordinating communications |
431 | and activities with other state, federal, and local government |
432 | organizations in order to advance the goals of the commission. |
433 | (c) The commission shall elect annually officers from the |
434 | management committee, with each having such authority and duties |
435 | as may be specified in the bylaws. |
436 | (d) The management committee may, subject to the approval |
437 | of the commission, appoint or retain an executive director for |
438 | such period, upon such terms and conditions, and for such |
439 | compensation as the commission may deem appropriate. The |
440 | executive director shall serve as secretary to the commission |
441 | but shall not be a member of the commission. The executive |
442 | director shall hire and supervise such other staff as may be |
443 | authorized by the commission. |
444 | (3) Legislative and advisory committees.-- |
445 | (a) A legislative committee comprised of state legislators |
446 | or their designees shall be established to monitor the |
447 | operations of and make recommendations to the commission, |
448 | including the management committee; provided the manner of |
449 | selection and term of any legislative committee member shall be |
450 | as set forth in the bylaws. Prior to the adoption by the |
451 | commission of any uniform standard, revision to the bylaws, |
452 | annual budget, or other significant matter as may be provided in |
453 | the bylaws, the management committee shall consult with and |
454 | report to the legislative committee. |
455 | (b) The commission shall establish two advisory |
456 | committees, one comprising consumer representatives independent |
457 | of the insurance industry and the other comprising insurance |
458 | industry representatives. |
459 | (c) The commission may establish additional advisory |
460 | committees as the bylaws may provide for the carrying out of |
461 | commission functions. |
462 | (4) Corporate records of the commission.--The commission |
463 | shall maintain its corporate books and records in accordance |
464 | with the bylaws. |
465 | (5) Qualified immunity, defense and indemnification.-- |
466 | (a) The members, officers, executive director, employees, |
467 | and representatives of the commission shall be immune from suit |
468 | and liability, either personally or in their official capacity, |
469 | for any claim for damage to or loss of property or personal |
470 | injury or other civil liability caused by or arising out of any |
471 | actual or alleged act, error, or omission that occurred, or that |
472 | the person against whom the claim is made had a reasonable basis |
473 | for believing occurred within the scope of commission |
474 | employment, duties, or responsibilities; provided nothing in |
475 | this paragraph shall be construed to protect any such person |
476 | from suit or liability for any damage, loss, injury, or |
477 | liability caused by the intentional or willful and wanton |
478 | misconduct of that person. |
479 | (b) The commission shall defend any member, officer, |
480 | executive director, employee, or representative of the |
481 | commission in any civil action seeking to impose liability |
482 | arising out of any actual or alleged act, error, or omission |
483 | that occurred within the scope of commission employment, duties, |
484 | or responsibilities, or that the person against whom the claim |
485 | is made had a reasonable basis for believing occurred within the |
486 | scope of commission employment, duties, or responsibilities; |
487 | provided nothing in this article shall be construed to prohibit |
488 | that person from retaining his or her own counsel and the actual |
489 | or alleged act, error, or omission did not result from that |
490 | person's intentional or willful and wanton misconduct. |
491 | (c) The commission shall indemnify and hold harmless any |
492 | member, officer, executive director, employee, or representative |
493 | of the commission for the amount of any settlement or judgment |
494 | obtained against that person arising out of any actual or |
495 | alleged act, error, or omission that occurred within the scope |
496 | of commission employment, duties, or responsibilities, or that |
497 | such person had a reasonable basis for believing occurred within |
498 | the scope of commission employment, duties, or responsibilities; |
499 | provided the actual or alleged act, error, or omission did not |
500 | result from the intentional or willful and wanton misconduct of |
501 | that person. |
502 |
|
503 | Article VI |
504 |
|
505 | MEETINGS; ACTS.-- |
506 | (1) The commission shall meet and take such actions as are |
507 | consistent with the provisions of this compact and the bylaws. |
508 | (2) Each member of the commission shall have the right and |
509 | power to cast a vote to which that compacting state is entitled |
510 | and to participate in the business and affairs of the |
511 | commission. A member shall vote in person or by such other means |
512 | as provided in the bylaws. The bylaws may provide for members' |
513 | participation in meetings by telephone or other means of |
514 | communication. |
515 | (3) The commission shall meet at least once during each |
516 | calendar year. Additional meetings shall be held as set forth in |
517 | the bylaws. |
518 |
|
519 | Article VII |
520 |
|
521 | RULES AND OPERATING PROCEDURES; RULEMAKING FUNCTIONS OF THE |
522 | COMMISSION; OPTING OUT OF UNIFORM STANDARDS.-- |
523 | (1) Rulemaking authority.--The commission shall adopt |
524 | reasonable rules, including uniform standards, and operating |
525 | procedures in order to effectively and efficiently achieve the |
526 | purposes of this compact. Notwithstanding such requirement, if |
527 | the commission exercises its rulemaking authority in a manner |
528 | that is beyond the scope of the purposes of this compact or the |
529 | powers granted under this compact, such action by the commission |
530 | shall be invalid and have no force and effect. |
531 | (2) Rulemaking procedure.--Rules and operating procedures |
532 | shall be made pursuant to a rulemaking process that conforms to |
533 | the Model State Administrative Procedure Act of 1981, as |
534 | amended, as may be appropriate to the operations of the |
535 | commission. Before the commission adopts a uniform standard, the |
536 | commission shall give written notice to the relevant state |
537 | legislative committees in each compacting state responsible for |
538 | insurance issues of its intention to adopt the uniform standard. |
539 | The commission in adopting a uniform standard shall consider |
540 | fully all submitted materials and issue a concise explanation of |
541 | its decision. |
542 | (3) Effective date and opt out of a uniform standard.--A |
543 | uniform standard shall become effective 90 days after its |
544 | adoption by the commission or such later date as the commission |
545 | may determine; provided a compacting state may opt out of a |
546 | uniform standard as provided in this article. The term "opt out" |
547 | means any action by a compacting state to decline to adopt or |
548 | participate in an adopted uniform standard. All other rules and |
549 | operating procedures, and amendments thereto, shall become |
550 | effective as of the date specified in each rule, operating |
551 | procedure, or amendment. |
552 | (4) Opt out procedure.-- |
553 | (a) A compacting state may opt out of a uniform standard |
554 | by legislation or regulation adopted by the Office of Insurance |
555 | Regulation of the Financial Services Commission under such |
556 | state's Administrative Procedure Act. For purposes of this |
557 | compact and this state, the Office of Insurance Regulation of |
558 | the Department of Financial Services constitutes this state's |
559 | agency for purposes of this subsection. If a compacting state |
560 | elects to opt out of a uniform standard by regulation, such |
561 | state must: |
562 | 1. Give written notice to the commission no later than 10 |
563 | business days after the uniform standard is adopted, or at the |
564 | time the state becomes a compacting state. |
565 | 2. Find that the uniform standard does not provide |
566 | reasonable protections to the citizens of the state, given the |
567 | conditions in the state. |
568 | (b) The commissioner shall make specific findings of fact |
569 | and conclusions of law, based on a preponderance of the |
570 | evidence, detailing the conditions in the state which warrant a |
571 | departure from the uniform standard and determining that the |
572 | uniform standard would not reasonably protect the citizens of |
573 | the state. The commissioner must consider and balance the |
574 | following factors and find that the conditions in the state and |
575 | needs of the citizens of the state outweigh: |
576 | 1. The intent of the Legislature to participate in, and |
577 | the benefits of, an interstate agreement to establish national |
578 | uniform consumer protections for the products subject to this |
579 | compact. |
580 | 2. The presumption that a uniform standard adopted by the |
581 | commission provides reasonable protections to consumers of the |
582 | relevant product. |
583 |
|
584 | Notwithstanding this subsection, a compacting state may, at the |
585 | time of its enactment of this compact, prospectively opt out of |
586 | all uniform standards involving long-term care insurance |
587 | products by expressly providing for such opt out in the enacted |
588 | compact, and such an opt out shall not be treated as a material |
589 | variance in the offer or acceptance of any state to participate |
590 | in this compact. Such an opt out shall be effective at the time |
591 | of enactment of this compact by the compacting state and shall |
592 | apply to all existing uniform standards involving long-term care |
593 | insurance products and those subsequently adopted. |
594 | (5) Effect of opting out.--If a compacting state elects to |
595 | opt out of a uniform standard, the uniform standard shall remain |
596 | applicable in the compacting state electing to opt out until |
597 | such time the opt out legislation is enacted into law or the |
598 | regulation opting out becomes effective. Once the opt out of a |
599 | uniform standard by a compacting state becomes effective as |
600 | provided under the laws of that state, the uniform standard |
601 | shall have no further force and effect in that state unless and |
602 | until the legislation or regulation implementing the opt out is |
603 | repealed or otherwise becomes ineffective under the laws of the |
604 | state. If a compacting state opts out of a uniform standard |
605 | after the uniform standard has been made effective in that |
606 | state, the opt out shall have the same prospective effect as |
607 | provided under Article XIV for withdrawals. |
608 | (6) Stay of uniform standard.--If a compacting state has |
609 | formally initiated the process of opting out of a uniform |
610 | standard by regulation, and while the regulatory opt out is |
611 | pending, the compacting state may petition the commission, at |
612 | least 15 days before the effective date of the uniform standard, |
613 | to stay the effectiveness of the uniform standard in that state. |
614 | The commission may grant a stay if the commission determines the |
615 | regulatory opt out is being pursued in a reasonable manner and |
616 | there is a likelihood of success. If a stay is granted or |
617 | extended by the commission, the stay or extension thereof may |
618 | postpone the effective date by up to 90 days, unless |
619 | affirmatively extended by the commission; provided a stay may |
620 | not be permitted to remain in effect for more than 1 year unless |
621 | the compacting state can show extraordinary circumstances which |
622 | warrant a continuance of the stay, including, but not limited |
623 | to, the existence of a legal challenge which prevents the |
624 | compacting state from opting out. A stay may be terminated by |
625 | the commission upon notice that the rulemaking process has been |
626 | terminated. |
627 | (7) Judicial review.--Not later than 30 days after a rule |
628 | or operating procedure is adopted, any person may file a |
629 | petition for judicial review of the rule or operating procedure; |
630 | provided the filing of such a petition shall not stay or |
631 | otherwise prevent the rule or operating procedure from becoming |
632 | effective unless the court finds that the petitioner has a |
633 | substantial likelihood of success. The court shall give |
634 | deference to the actions of the commission consistent with |
635 | applicable law and shall not find the rule or operating |
636 | procedure to be unlawful if the rule or operating procedure |
637 | represents a reasonable exercise of the commission's authority. |
638 |
|
639 | Article VIII |
640 |
|
641 | COMMISSION RECORDS AND ENFORCEMENT.-- |
642 | (1) The commission shall adopt rules establishing |
643 | conditions and procedures for public inspection and copying of |
644 | its information and official records, except such information |
645 | and records involving the privacy of individuals and insurers' |
646 | trade secrets. The commission may adopt additional rules under |
647 | which the commission may make available to federal and state |
648 | agencies, including law enforcement agencies, records and |
649 | information otherwise exempt from disclosure and may enter into |
650 | agreements with such agencies to receive or exchange information |
651 | or records subject to nondisclosure and confidentiality |
652 | provisions. |
653 | (2) Except as to privileged records, data, and |
654 | information, the laws of any compacting state pertaining to |
655 | confidentiality or nondisclosure shall not relieve any |
656 | compacting state commissioner of the duty to disclose any |
657 | relevant records, data, or information to the commission; |
658 | provided disclosure to the commission shall not be deemed to |
659 | waive or otherwise affect any confidentiality requirement; and |
660 | further provided, except as otherwise expressly provided in this |
661 | compact, the commission shall not be subject to the compacting |
662 | state's laws pertaining to confidentiality and nondisclosure |
663 | with respect to records, data, and information in its |
664 | possession. Confidential information of the commission shall |
665 | remain confidential after such information is provided to any |
666 | commissioner. |
667 | (3) The commission shall monitor compacting states for |
668 | compliance with duly adopted bylaws, rules, uniform standards, |
669 | and operating procedures. The commission shall notify any |
670 | noncomplying compacting state in writing of its noncompliance |
671 | with commission bylaws, rules, or operating procedures. If a |
672 | noncomplying compacting state fails to remedy its noncompliance |
673 | within the time specified in the notice of noncompliance, the |
674 | compacting state shall be deemed to be in default as set forth |
675 | in Article XIV. |
676 | (4) The commissioner of any state in which an insurer is |
677 | authorized to do business or is conducting the business of |
678 | insurance shall continue to exercise his or her authority to |
679 | oversee the market regulation of the activities of the insurer |
680 | in accordance with the provisions of the state's law. The |
681 | commissioner's enforcement of compliance with the compact is |
682 | governed by the following provisions: |
683 | (a) With respect to the commissioner's market regulation |
684 | of a product or advertisement that is approved or certified to |
685 | the commission, the content of the product or advertisement |
686 | shall not constitute a violation of the provisions, standards, |
687 | or requirements of the compact except upon a final order of the |
688 | commission, issued at the request of a commissioner after prior |
689 | notice to the insurer and an opportunity for hearing before the |
690 | commission. |
691 | (b) Before a commissioner may bring an action for |
692 | violation of any provision, standard, or requirement of the |
693 | compact relating to the content of an advertisement not approved |
694 | or certified to the commission, the commission, or an authorized |
695 | commission officer or employee, must authorize the action. |
696 | However, authorization pursuant to this paragraph does not |
697 | require notice to the insurer, opportunity for hearing, or |
698 | disclosure of requests for authorization or records of the |
699 | commission's action on such requests. |
700 |
|
701 | Article IX |
702 |
|
703 | DISPUTE RESOLUTION.--The commission shall attempt, upon the |
704 | request of a member, to resolve any disputes or other issues |
705 | that are subject to this compact and which may arise between two |
706 | or more compacting states, or between compacting states and |
707 | noncompacting states, and the commission shall adopt an |
708 | operating procedure providing for resolution of such disputes. |
709 |
|
710 | Article X |
711 |
|
712 | PRODUCT FILING AND APPROVAL.-- |
713 | (1) Insurers and third-party filers seeking to have a |
714 | product approved by the commission shall file the product with |
715 | and pay applicable filing fees to the commission. Nothing in |
716 | this compact shall be construed to restrict or otherwise prevent |
717 | an insurer from filing its product with the insurance department |
718 | in any state in which the insurer is licensed to conduct the |
719 | business of insurance and such filing shall be subject to the |
720 | laws of the states where filed. |
721 | (2) The commission shall establish appropriate filing and |
722 | review processes and procedures pursuant to commission rules and |
723 | operating procedures. Notwithstanding any provision of this |
724 | article, the commission shall adopt rules to establish |
725 | conditions and procedures under which the commission will |
726 | provide public access to product filing information. In |
727 | establishing such rules, the commission shall consider the |
728 | interests of the public in having access to such information, as |
729 | well as protection of personal medical and financial information |
730 | and trade secrets, that may be contained in a product filing or |
731 | supporting information. |
732 | (3) Any product approved by the commission may be sold or |
733 | otherwise issued in those compacting states for which the |
734 | insurer is legally authorized to do business. |
735 |
|
736 | Article XI |
737 |
|
738 | REVIEW OF COMMISSION DECISIONS REGARDING FILINGS.-- |
739 | (1) Not later than 30 days after the commission has given |
740 | notice of a disapproved product or advertisement filed with the |
741 | commission, the insurer or third-party filer whose filing was |
742 | disapproved may appeal the determination to a review panel |
743 | appointed by the commission. The commission shall adopt rules to |
744 | establish procedures for appointing such review panels and |
745 | provide for notice and hearing. An allegation that the |
746 | commission, in disapproving a product or advertisement filed |
747 | with the commission, acted arbitrarily, capriciously, or in a |
748 | manner that is an abuse of discretion or otherwise not in |
749 | accordance with the law, is subject to judicial review in |
750 | accordance with subsection (4) of Article III. |
751 | (2) The commission shall have authority to monitor, |
752 | review, and reconsider products and advertisement subsequent to |
753 | their filing or approval upon a finding that the product does |
754 | not meet the relevant uniform standard. Where appropriate, the |
755 | commission may withdraw or modify its approval after proper |
756 | notice and hearing, subject to the appeal process in subsection |
757 | (1). |
758 |
|
759 | Article XII |
760 |
|
761 | FINANCE.-- |
762 | (1) The commission shall pay or provide for the payment of |
763 | the reasonable expenses of the commission's establishment and |
764 | organization. To fund the cost of the commission's initial |
765 | operations, the commission may accept contributions and other |
766 | forms of funding from the National Association of Insurance |
767 | Commissioners, compacting states, and other sources. |
768 | Contributions and other forms of funding from other sources |
769 | shall be of such a nature that the independence of the |
770 | commission concerning the performance of commission duties shall |
771 | not be compromised. |
772 | (2) The commission shall collect a filing fee from each |
773 | insurer and third-party filer filing a product with the |
774 | commission to cover the cost of the operations and activities of |
775 | the commission and its staff in a total amount sufficient to |
776 | cover the commission's annual budget. |
777 | (3) The commission's budget for a fiscal year shall not be |
778 | approved until the budget has been subject to notice and comment |
779 | as set forth in Article VII. |
780 | (4) The commission shall be exempt from all taxation in |
781 | and by the compacting states. |
782 | (5) The commission shall not pledge the credit of any |
783 | compacting state, except by and with the appropriate legal |
784 | authority of that compacting state. |
785 | (6) The commission shall keep complete and accurate |
786 | accounts of all its internal receipts, including grants and |
787 | donations, and disbursements of all funds under its control. The |
788 | internal financial accounts of the commission shall be subject |
789 | to the accounting procedures established under its bylaws. The |
790 | financial accounts and reports including the system of internal |
791 | controls and procedures of the commission shall be audited |
792 | annually by an independent certified public accountant. Upon the |
793 | determination of the commission, but no less frequently than |
794 | every 3 years, the review of the independent auditor shall |
795 | include a management and performance audit of the commission. |
796 | The commission shall make an annual report to the Governor and |
797 | the presiding officers of the Legislature of the compacting |
798 | states, which shall include a report of the independent audit. |
799 | The commission's internal accounts shall not be confidential and |
800 | such materials may be shared with the commissioner of any |
801 | compacting state upon request; provided any work papers related |
802 | to any internal or independent audit and any information |
803 | regarding the privacy of individuals and insurers' proprietary |
804 | information, including trade secrets, shall remain confidential. |
805 | (7) No compacting state shall have any claim to or |
806 | ownership of any property held by or vested in the commission or |
807 | to any commission funds held pursuant to the provisions of this |
808 | compact. |
809 |
|
810 | Article XIII |
811 |
|
812 | COMPACTING STATES, EFFECTIVE DATE, AMENDMENT.-- |
813 | (1) Any state is eligible to become a compacting state. |
814 | (2) The compact shall become effective and binding upon |
815 | legislative enactment of the compact into law by two compacting |
816 | states; provided the commission shall become effective for |
817 | purposes of adopting uniform standards for, reviewing, and |
818 | giving approval or disapproval of, products filed with the |
819 | commission that satisfy applicable uniform standards only after |
820 | 26 states are compacting states or, alternatively, by states |
821 | representing greater than 40 percent of the premium volume for |
822 | life insurance, annuity, disability income, and long-term care |
823 | insurance products, based on records of the National Association |
824 | of Insurance Commissioners for the prior year. Thereafter, the |
825 | compact shall become effective and binding as to any other |
826 | compacting state upon enactment of the compact into law by that |
827 | state. |
828 | (3) Amendments to the compact may be proposed by the |
829 | commission for enactment by the compacting states. No amendment |
830 | shall become effective and binding upon the commission and the |
831 | compacting states unless and until all compacting states enact |
832 | the amendment into law. |
833 |
|
834 | Article XIV |
835 |
|
836 | WITHDRAWAL; DEFAULT; DISSOLUTION.-- |
837 | (1) Withdrawal.-- |
838 | (a) Once effective, the compact shall continue in force |
839 | and remain binding upon each and every compacting state; |
840 | provided a compacting state may withdraw from the compact by |
841 | enacting a law specifically repealing the law which enacted the |
842 | compact into law. |
843 | (b) The effective date of withdrawal is the effective date |
844 | of the repealing law. However, the withdrawal shall not apply to |
845 | any product filings approved or self-certified, or any |
846 | advertisement of such products, on the date the repealing law |
847 | becomes effective, except by mutual agreement of the commission |
848 | and the withdrawing state unless the approval is rescinded by |
849 | the withdrawing state as provided in paragraph (e). |
850 | (c) The commissioner of the withdrawing state shall |
851 | immediately notify the management committee in writing upon the |
852 | introduction of legislation repealing this compact in the |
853 | withdrawing state. |
854 | (d) The commission shall notify the other compacting |
855 | states of the introduction of such legislation within 10 days |
856 | after the commission's receipt of notice of such legislation. |
857 | (e) The withdrawing state is responsible for all |
858 | obligations, duties, and liabilities incurred through the |
859 | effective date of withdrawal, including any obligations, the |
860 | performance of which extend beyond the effective date of |
861 | withdrawal, except to the extent those obligations may have been |
862 | released or relinquished by mutual agreement of the commission |
863 | and the withdrawing state. The commission's approval of products |
864 | and advertisement prior to the effective date of withdrawal |
865 | shall continue to be effective and be given full force and |
866 | effect in the withdrawing state unless formally rescinded by the |
867 | withdrawing state in the same manner as provided by the laws of |
868 | the withdrawing state for the prospective disapproval of |
869 | products or advertisement previously approved under state law. |
870 | (f) Reinstatement following withdrawal of any compacting |
871 | state shall occur upon the effective date of the withdrawing |
872 | state reenacting the compact. |
873 | (2) Default.-- |
874 | (a) If the commission determines that any compacting state |
875 | has at any time defaulted in the performance of any of its |
876 | obligations or responsibilities under this compact, the bylaws, |
877 | or duly adopted rules or operating procedures, after notice and |
878 | hearing as set forth in the bylaws, all rights, privileges, and |
879 | benefits conferred by this compact on the defaulting state shall |
880 | be suspended from the effective date of default as fixed by the |
881 | commission. The grounds for default include, but are not limited |
882 | to, failure of a compacting state to perform its obligations or |
883 | responsibilities, and any other grounds designated in commission |
884 | rules. The commission shall immediately notify the defaulting |
885 | state in writing of the defaulting state's suspension pending a |
886 | cure of the default. The commission shall stipulate the |
887 | conditions and the time period within which the defaulting state |
888 | must cure its default. If the defaulting state fails to cure the |
889 | default within the time period specified by the commission, the |
890 | defaulting state shall be terminated from the compact and all |
891 | rights, privileges, and benefits conferred by this compact shall |
892 | be terminated from the effective date of termination. |
893 | (b) Product approvals by the commission or product self- |
894 | certifications, or any advertisement in connection with such |
895 | product that are in force on the effective date of termination |
896 | shall remain in force in the defaulting state in the same manner |
897 | as if the defaulting state had withdrawn voluntarily pursuant to |
898 | subsection (1). |
899 | (c) Reinstatement following termination of any compacting |
900 | state requires a reenactment of the compact. |
901 | (3) Dissolution of compact.-- |
902 | (a) The compact dissolves effective upon the date of the |
903 | withdrawal or default of the compacting state which reduces |
904 | membership in the compact to a single compacting state. |
905 | (b) Upon the dissolution of this compact, the compact |
906 | becomes null and void and shall be of no further force or effect |
907 | and the business and affairs of the commission shall be |
908 | concluded and any surplus funds shall be distributed in |
909 | accordance with the bylaws. |
910 | Article XV |
911 |
|
912 | SEVERABILITY; CONSTRUCTION.-- |
913 | (1) The provisions of this compact are severable and if |
914 | any phrase, clause, sentence, or provision is deemed |
915 | unenforceable, the remaining provisions of the compact shall be |
916 | enforceable. |
917 | (2) The provisions of this compact shall be liberally |
918 | construed to effectuate its purposes. |
919 |
|
920 | Article XVI |
921 |
|
922 | BINDING EFFECT OF COMPACT AND OTHER LAWS.-- |
923 | (1) Binding effect of this compact.-- |
924 | (a) All lawful actions of the commission, including all |
925 | rules and operating procedures adopted by the commission, are |
926 | binding upon the compacting states. |
927 | (b) All agreements between the commission and the |
928 | compacting states are binding in accordance with their terms. |
929 | (c) Upon the request of a party to a conflict over the |
930 | meaning or interpretation of commission actions, and upon a |
931 | majority vote of the compacting states, the commission may issue |
932 | advisory opinions regarding the meaning or interpretation in |
933 | dispute. |
934 | (d) If any provision of this compact exceeds the |
935 | constitutional limits imposed on the Legislature of any |
936 | compacting state, the obligations, duties, powers, or |
937 | jurisdiction sought to be conferred by that provision upon the |
938 | commission shall be ineffective as to that compacting state and |
939 | those obligations, duties, powers, or jurisdiction shall remain |
940 | in the compacting state and shall be exercised by the agency of |
941 | such state to which those obligations, duties, powers, or |
942 | jurisdiction are delegated by law in effect at the time this |
943 | compact becomes effective. |
944 | (2) Other laws.-- |
945 | (a) Nothing in this compact prevents the enforcement of |
946 | any other law of a compacting state, except as provided in |
947 | paragraph (b). |
948 | (b) For any product approved or certified to the |
949 | commission, the rules, uniform standards, and any other |
950 | requirements of the commission shall constitute the exclusive |
951 | provisions applicable to the content, approval, and |
952 | certification of such products. For advertisement that is |
953 | subject to the commission's authority, any rule, uniform |
954 | standard, or other requirement of the commission which governs |
955 | the content of the advertisement shall constitute the exclusive |
956 | provision that a commissioner may apply to the content of the |
957 | advertisement. Notwithstanding this paragraph, no action taken |
958 | by the commission shall abrogate or restrict: |
959 | 1. The access of any person to state courts; |
960 | 2. Remedies available under state law related to breach of |
961 | contract, tort, or other laws not specifically directed to the |
962 | content of the product; |
963 | 3. State law relating to the construction of insurance |
964 | contracts; or |
965 | 4. The authority of the attorney general of the state, |
966 | including, but not limited to, maintaining any actions or |
967 | proceedings, as authorized by law. |
968 | (c) All insurance products filed with individual states |
969 | shall be subject to the laws of those states. |
970 | Section 3. This act shall take effect July 1, 2005. |