HB 943

1	A bill to be entitled
2	An act relating to interstate insurance product
3	regulation; creating s. 626.712, F.S.; enacting the
4	Interstate Insurance Product Regulation Compact; providing
5	purposes; providing definitions; providing for
6	establishment of a commission and venue; providing powers
7	of the commission; providing for organization of the
8	commission; providing for meetings and acts of the
9	commission; providing for rules and operating procedures
10	of the commission; providing for rulemaking functions of
11	the commission and opting out of uniform standards;
12	providing for commission records and enforcement;
13	providing for dispute resolution; providing for product
14	filing and approval; providing for review of commission
15	filing decisions; providing for commission finances;
16	providing for eligibility of compacting states and
17	effective date and amendments to the compact; providing
18	for withdrawal, default, and termination of compacting
19	states from the compact; providing severability and
20	construction; providing for a binding effect of compact
21	and other laws; providing an effective date.
22
23	Be It Enacted by the Legislature of the State of Florida:
24
25	Section 1.  Section 626.712, Florida Statutes, is created
26	to read:
27	626.712  Interstate Insurance Product Regulation
28	Compact.--The Interstate Insurance Product Regulation Compact is
29	enacted into law and entered into by this state with any other
30	states legally joining therein in the form substantially as
31	follows:
32
33	INTERSTATE INSURANCE PRODUCT REGULATION COMPACT
34
35	ARTICLE I
36
37	PURPOSES.--The purposes of this compact are, through means of
38	joint and cooperative action among the compacting states:
39	(1)  To promote and protect the interest of consumers of
40	individual and group annuity, life insurance, disability income,
41	and long-term care insurance products.
42	(2)  To develop uniform standards for insurance products
43	covered under the compact.
44	(3)  To establish a central clearinghouse to receive and
45	provide prompt review of insurance products covered under the
46	compact and, in certain cases, advertisements related thereto,
47	submitted by insurers authorized to do business in one or more
48	compacting states.
49	(4)  To give appropriate regulatory approval to those
50	product filings and advertisements satisfying the applicable
51	uniform standard.
52	(5)  To improve coordination of regulatory resources and
53	expertise between state insurance departments regarding the
54	setting of uniform standards and review of insurance products
55	covered under the compact.
56	(6)  To create the Interstate Insurance Product Regulation
57	Commission.
58	(7)  To perform these and such other related functions as
59	may be consistent with the state regulation of the business of
60	insurance.
61
62	ARTICLE II
63
64	DEFINITIONS.--For purposes of this compact:
65	(1)  "Advertisement" means any material designed to create
66	public interest in a product or induce the public to purchase,
67	increase, modify, reinstate, borrow on, surrender, replace, or
68	retain a policy, as more specifically defined in the rules and
69	operating procedures of the commission.
70	(2)  "Bylaws" mean those bylaws established by the
71	commission for its governance or for directing or controlling
72	the commission's actions or conduct.
73	(3)  "Commission" means the "Interstate Insurance Product
74	Regulation Commission" established by this compact.
75	(4)  "Commissioner" means the chief insurance regulatory
76	official of a state, including, but not limited to,
77	commissioner, superintendent, director, or administrator. For
78	this state, commissioner means the Commissioner of Insurance
79	Regulation of the Financial Services Commission.
80	(5)  "Compacting state" means any state that has enacted
81	this compact and that has not withdrawn pursuant to Article XIV,
82	Section 1, or terminated pursuant to Article XIV, Section 2.
83	(6)  "Domiciliary state" means the state in which an
84	insurer is incorporated or organized or, in the case of an alien
85	insurer, its state of entry.
86	(7)  "Insurer" means any entity licensed by a state to
87	issue contracts of insurance for any of the lines of insurance
88	covered by this compact.
89	(8)  "Member" means the person chosen by a compacting state
90	as its representative to the commission, or his or her designee.
91	(9)  "Noncompacting state" means any state that is not at
92	the time a compacting state.
93	(10)  "Operating procedures" mean procedures adopted by the
94	commission implementing a rule or uniform standard or a
95	provision of this compact.
96	(11)  "Product" means the form of a policy or contract,
97	including any application, endorsement, or related form attached
98	to and made part of the policy or contract, and any evidence of
99	coverage or certificate, for an individual or group annuity,
100	life insurance, disability income, or long-term care insurance
101	product that an insurer is authorized to issue.
102	(12)  "Rule" means a statement of general or particular
103	applicability and future effect adopted by the commission,
104	including a uniform standard developed pursuant to Article VII
105	designed to implement, interpret, or prescribe law or policy or
106	describing the organization, procedure, or practice requirements
107	of the commission, which shall have the force and effect of law
108	in the compacting states.
109	(13)  "State" means any state, district or territory of the
110	United States of America.
111	(14)  "Third-party filer" means an entity that submits a
112	product filing to the commission on behalf of an insurer.
113	(15)  "Uniform standard" means a standard adopted by the
114	commission for a product line, pursuant to Article VII, and
115	shall include all of the product requirements in aggregate;
116	provided that each uniform standard shall be construed, whether
117	express or implied, to prohibit the use of any inconsistent,
118	misleading, or ambiguous provisions in a product, and the form
119	of the product made available to the public shall not be unfair,
120	inequitable, or against public policy as determined by the
121	commission.
122
123	ARTICLE III
124
125	ESTABLISHMENT OF THE COMMISSION AND VENUE.--
126	(1)  The compacting states hereby create and establish a
127	joint public agency known as the Interstate Insurance Product
128	Regulation Commission. Pursuant to Article IV, the commission
129	shall have the power to develop uniform standards for product
130	lines, receive and provide prompt review of products filed
131	therewith, and give approval to those product filings satisfying
132	applicable uniform standards; provided it is not intended for
133	the commission to be the exclusive entity for receipt and review
134	of insurance product filings. Nothing in this compact shall
135	prohibit any insurer from filing its product in any state in
136	which the insurer is licensed to conduct the business of
137	insurance, and any such filing shall be subject to the laws of
138	the state where filed.
139	(2)  The commission is a body corporate and politic and an
140	instrumentality of the compacting states.
141	(3)  The commission is a not-for-profit entity, separate
142	and distinct from the individual compacting states.
143	(4)  The commission is solely responsible for its
144	liabilities except as otherwise specifically provided in this
145	compact.
146	(5)  Venue is proper and judicial proceedings by or against
147	the commission shall be brought solely and exclusively in a
148	court of competent jurisdiction where the principal office of
149	the commission is located.
150
151	ARTICLE IV
152
153	POWERS OF THE COMMISSION.--The commission may:
154	(1)  Adopt rules, pursuant to Article VII, that shall have
155	the force and effect of law and shall be binding in the
156	compacting states to the extent and in the manner provided in
157	this compact.
158	(2)  Exercise its rulemaking authority and establish
159	reasonable uniform standards for products covered under the
160	compact and advertisements related to such products, which shall
161	have the force and effect of law and shall be binding in the
162	compacting states, but only for those products filed with the
163	commission; provided, that a compacting state shall have the
164	right to opt out of such uniform standard pursuant to Article
165	VII to the extent and in the manner provided in this compact;
166	and, provided further, that any uniform standard established by
167	the commission for long-term care insurance products may provide
168	the same or greater protections for consumers as, but shall not
169	provide less than, those protections set forth in the National
170	Association of Insurance Commissioners' Long-Term Care Insurance
171	Model Act and Long-Term Care Insurance Model Regulation,
172	respectively, adopted as of 2001. The commission shall consider
173	whether any subsequent amendments to the National Association of
174	Insurance Commissioners' Long-Term Care Insurance Model Act or
175	Long-Term Care Insurance Model Regulation adopted by the
176	National Association of Insurance Commissioners require amending
177	of the uniform standards established by the commission for long-
178	term care insurance products.
179	(3)  Receive and review in an expeditious manner products
180	filed with the commission and rate filings for disability income
181	and long-term care insurance products and give approval of those
182	products and rate filings that satisfy the applicable uniform
183	standard, where such approval shall have the force and effect of
184	law and be binding on the compacting states to the extent and in
185	the manner provided in this compact.
186	(4)  Receive and review in an expeditious manner
187	advertisements relating to long-term care insurance products for
188	which uniform standards have been adopted by the commission and
189	give approval to all advertisements that satisfy the applicable
190	uniform standard. For any product covered under this compact,
191	other than long-term care insurance products, the commission may
192	require an insurer to submit all or any part of its
193	advertisement with respect to that product for review or
194	approval prior to use if the commission determines that the
195	nature of the product is such that an advertisement of the
196	product could have the capacity or tendency to mislead the
197	public. The actions of commission as provided in this section
198	shall have the force and effect of law and shall be binding in
199	the compacting states to the extent and in the manner provided
200	in the compact.
201	(5)  Exercise its rulemaking authority and designate
202	products and advertisements that may be subject to a self-
203	certification process without the need for prior approval by the
204	commission.
205	(6)  Adopt operating procedures, pursuant to Article VII,
206	which shall be binding in the compacting states to the extent
207	and in the manner provided in this compact.
208	(7)  Bring and prosecute legal proceedings or actions in
209	its name as the commission; provided, that the standing of any
210	state insurance department to sue or be sued under applicable
211	law shall not be affected.
212	(8)  Issue subpoenas requiring the attendance and testimony
213	of witnesses and the production of evidence.
214	(9)  Establish and maintain offices.
215	(10)  Purchase and maintain insurance and bonds.
216	(11)  Borrow, accept, or contract for services of
217	personnel, including, but not limited to, employees of a
218	compacting state.
219	(12)  Hire employees, professionals, or specialists; elect
220	or appoint officers, fix their compensation, define their
221	duties, give them appropriate authority to carry out the
222	purposes of the compact, and determine their qualifications; and
223	establish the commission's personnel policies and programs
224	relating to, among other things, conflicts of interest, rates of
225	compensation, and qualifications of personnel.
226	(13)  Accept any and all appropriate donations and grants
227	of money, equipment, supplies, materials and services and to
228	receive, use, and dispose of the same; provided that at all
229	times the commission shall strive to avoid any appearance of
230	impropriety.
231	(14)  Lease, purchase, or accept appropriate gifts or
232	donations of, or otherwise to own, hold, improve, or use, any
233	property, real, personal, or mixed; provided that at all times
234	the commission shall strive to avoid any appearance of
235	impropriety.
236	(15)  Sell, convey, mortgage, pledge, lease, exchange,
237	abandon, or otherwise dispose of any property, real, personal,
238	or mixed.
239	(16)  Remit filing fees to compacting states as may be set
240	forth in the bylaws, rules, or operating procedures.
241	(17)  Enforce compliance by compacting states with rules,
242	uniform standards, operating procedures, and bylaws.
243	(18)  Provide for dispute resolution among compacting
244	states.
245	(19)  Advise compacting states on issues relating to
246	insurers domiciled or doing business in noncompacting
247	jurisdictions, consistent with the purposes of this compact.
248	(20)  Provide advice and training to those personnel in
249	state insurance departments responsible for product review and
250	to be a resource for state insurance departments.
251	(21)  Establish a budget and make expenditures.
252	(22)  Borrow money.
253	(23)  Appoint committees, including advisory committees
254	comprising members, state insurance regulators, state
255	legislators, or their representatives, insurance industry and
256	consumer representatives, and such other interested persons as
257	may be designated in the bylaws.
258	(24)  Provide and receive information from, and cooperate
259	with, law enforcement agencies.
260	(25)  Adopt and use a corporate seal.
261	(26)  Perform such other functions as may be necessary or
262	appropriate to achieve the purposes of this compact, consistent
263	with the state regulation of the business of insurance.
264
265	ARTICLE V
266
267	ORGANIZATION OF THE COMMISSION.--
268	(1)  Membership, voting, and bylaws.--
269	(a)  Each compacting state shall have and be limited to one
270	member. Each member shall be qualified to serve in that capacity
271	pursuant to applicable law of the compacting state. Any member
272	may be removed or suspended from office as provided by the law
273	of the state from which he or she shall be appointed. Any
274	vacancy occurring in the commission shall be filled in
275	accordance with the laws of the compacting state in which the
276	vacancy exists. Nothing in this article shall be construed to
277	affect the manner in which a compacting state determines the
278	election or appointment and qualification of its own
279	commissioner.
280	(b)  Each member shall be entitled to one vote and shall
281	have an opportunity to participate in the governance of the
282	commission in accordance with the bylaws. Notwithstanding any
283	provision in this article to the contrary, no action of the
284	commission with respect to the adoption of a uniform standard
285	shall be effective unless two-thirds of the members vote in
286	favor of the action.
287	(c)  The commission shall, by a vote of the majority of the
288	members, prescribe bylaws to govern its conduct as may be
289	necessary or appropriate to carry out the purposes and exercise
290	the powers of the compact, including, but not limited to:
291	1.  Establishing the fiscal year of the commission.
292	2.  Providing reasonable procedures for appointing and
293	electing members and holding meetings of the management
294	committee.
295	3.  Providing reasonable standards and procedures for the
296	establishment and meetings of other committees and governing any
297	general or specific delegation of any authority or function of
298	the commission.
299	4.  Providing reasonable procedures for calling and
300	conducting meetings of the commission that consists of a
301	majority of commission members, ensuring reasonable advance
302	notice of each such meeting, and providing for the right of
303	citizens to attend each such meeting with enumerated exceptions
304	designed to protect the public's interest, the privacy of
305	individuals, and insurers' proprietary information, including
306	trade secrets. The commission may meet in camera only after a
307	majority of the entire membership votes to close a meeting en
308	toto or in part. As soon as practicable, the commission must
309	make public a copy of the vote to close the meeting, revealing
310	the vote of each member with no proxy votes allowed, and votes
311	taken during such meeting.
312	5.  Establishing the titles, duties and authority, and
313	reasonable procedures for the election of the officers of the
314	commission.
315	6.  Providing reasonable standards and procedures for the
316	establishment of the personnel policies and programs of the
317	commission. Notwithstanding any civil service or other similar
318	laws of any compacting state, the bylaws shall exclusively
319	govern the personnel policies and programs of the commission.
320	7.  Adopting a code of ethics to address permissible and
321	prohibited activities of commission members and employees.
322	8.  Providing a mechanism for winding up the operations of
323	the commission and the equitable disposition of any surplus
324	funds that may exist after the termination of the compact after
325	the payment or reserving of all of its debts and obligations.
326	(d)  The commission shall publish its bylaws in a
327	convenient form and file a copy thereof and a copy of any
328	amendment thereto with the appropriate agency or officer in each
329	of the compacting states.
330	(2)  Management committee, officers, and personnel.--
331	(a)  A management committee comprising no more than 14
332	members shall be established as follows:
333	1.  One member from each of the six compacting states with
334	the largest premium volume for individual and group annuities,
335	life, disability income, and long-term care insurance products,
336	determined from the records of the National Association of
337	Insurance Commissioners for the prior year.
338	2.  Four members from those compacting states with at least
339	2 percent of the market based on the premium volume described in
340	subparagraph 1., other than the six compacting states with the
341	largest premium volume, selected on a rotating basis as provided
342	in the bylaws.
343	3.  Four members from those compacting states with less
344	than 2 percent of the market, based on the premium volume
345	described in subparagraph 1., with one selected from each of the
346	four zone regions of the National Association of Insurance
347	Commissioners as provided in the bylaws.
348	(b)  The management committee shall have such authority and
349	duties as may be set forth in the bylaws, including but not
350	limited to:
351	1.  Managing the affairs of the commission in a manner
352	consistent with the bylaws and purposes of the commission.
353	2.  Establishing and overseeing an organizational structure
354	within, and appropriate procedures for, the commission to
355	provide for the creation of uniform standards and other rules,
356	receipt and review of product filings, administrative and
357	technical support functions, review of decisions regarding the
358	disapproval of a product filing, and the review of elections
359	made by a compacting state to opt out of a uniform standard;
360	provided that a uniform standard shall not be submitted to the
361	compacting states for adoption unless approved by two-thirds of
362	the members of the management committee.
363	3.  Overseeing the offices of the commission.
364	4.  Planning, implementing, and coordinating communications
365	and activities with other federal, state, and local government
366	organizations in order to advance the goals of the commission.
367	(c)  The commission shall elect annually officers from the
368	management committee, with each having such authority and duties
369	as may be specified in the bylaws.
370	(d)  The management committee may, subject to the approval
371	of the commission, appoint or retain an executive director for
372	such period, upon such terms and conditions and for such
373	compensation as the commission may deem appropriate. The
374	executive director shall serve as secretary of the commission
375	but shall not be a member of the commission. The executive
376	director shall hire and supervise such other staff as may be
377	authorized by the commission.
378	(3)  Legislative and advisory committees.--
379	(a)  A legislative committee comprising state legislators
380	or their designees shall be established to monitor the
381	operations of, and make recommendations to, the commission,
382	including the management committee; provided that the manner of
383	selection and term of any legislative committee member shall be
384	as set forth in the bylaws. Prior to the adoption by the
385	commission of any uniform standard, revision to the bylaws,
386	annual budget, or other significant matter as may be provided in
387	the bylaws, the management committee shall consult with and
388	report to the legislative committee.
389	(b)  The commission shall establish two advisory
390	committees, one of which shall comprise consumer representatives
391	independent of the insurance industry and the other comprising
392	insurance industry representatives.
393	(c)  The commission may establish additional advisory
394	committees as its bylaws may provide for the carrying out of its
395	functions.
396	(4)  Corporate records of the commission.--The commission
397	shall maintain its corporate books and records in accordance
398	with the bylaws.
399	(5)  Qualified immunity, defense, and indemnification.--
400	(a)  The members, officers, executive director, employees,
401	and representatives of the commission shall be immune from suit
402	and liability, either personally or in their official capacity,
403	for any claim for damage to or loss of property or personal
404	injury or other civil liability caused by or arising out of any
405	actual or alleged act, error, or omission that occurred or that
406	the person against whom the claim is made had a reasonable basis
407	for believing occurred within the scope of commission
408	employment, duties, or responsibilities; provided, that nothing
409	in this paragraph shall be construed to protect any such person
410	from suit or liability for any damage, loss, injury, or
411	liability caused by the intentional or willful and wanton
412	misconduct of that person.
413	(b)  The commission shall defend any member, officer,
414	executive director, employee, or representative of the
415	commission in any civil action seeking to impose liability
416	arising out of any actual or alleged act, error, or omission
417	that occurred within the scope of commission employment, duties,
418	or responsibilities, or that the person against whom the claim
419	is made had a reasonable basis for believing occurred within the
420	scope of commission employment, duties, or responsibilities;
421	provided, that nothing in this paragraph shall be construed to
422	prohibit that person from retaining his or her own counsel; and
423	provided further, that the actual or alleged act, error, or
424	omission did not result from that person's intentional or
425	willful and wanton misconduct.
426	(c)  The commission shall indemnify and hold harmless any
427	member, officer, executive director, employee, or representative
428	of the commission for the amount of any settlement or judgment
429	obtained against that person arising out of any actual or
430	alleged act, error, or omission that occurred within the scope
431	of commission employment, duties, or responsibilities, or that
432	such person had a reasonable basis for believing occurred within
433	the scope of commission employment, duties, or responsibilities;
434	provided, that the actual or alleged act, error, or omission did
435	not result from the intentional or willful and wanton misconduct
436	of that person.
437
438	ARTICLE VI
439
440	MEETINGS AND ACTS OF THE COMMISSION.--
441	(1)  The commission shall meet and take such actions as are
442	consistent with the provisions of this compact and the bylaws.
443	(2)  Each member of the commission shall have the right and
444	power to cast a vote to which that compacting state is entitled
445	and to participate in the business and affairs of the
446	commission. A member shall vote in person or by such other means
447	as provided in the bylaws. The bylaws may provide for members'
448	participation in meetings by telephone or other means of
449	communication.
450	(3)  The commission shall meet at least once during each
451	calendar year. Additional meetings shall be held as set forth in
452	the bylaws.
453
454	ARTICLE VII
455
456	RULES & OPERATING PROCEDURES: RULEMAKING FUNCTIONS OF THE
457	COMMISSION AND OPTING OUT OF UNIFORM STANDARDS.--
458	(1)  Rulemaking authority.--The commission shall adopt
459	reasonable rules, including uniform standards and operating
460	procedures, in order to effectively and efficiently achieve the
461	purposes of this compact. Notwithstanding such requirement, if
462	the commission exercises its rulemaking authority in a manner
463	that is beyond the scope of the purposes of this compact or the
464	powers granted under this compact, such an action by the
465	commission shall be invalid and have no force and effect.
466	(2)  Rulemaking procedure.--Rules and operating procedures
467	shall be made pursuant to a rulemaking process that conforms to
468	the Model State Administrative Procedures Act of 1981, as
469	amended, as may be appropriate to the operations of the
470	commission. Before the commission adopts a uniform standard, the
471	commission shall give written notice to the relevant state
472	legislative committees in each compacting state responsible for
473	insurance issues of its intention to adopt the uniform standard.
474	The commission, in adopting a uniform standard, shall consider
475	fully all submitted materials and issue a concise explanation of
476	its decision.
477	(3)  Effective date and opt out of a uniform standard.--A
478	uniform standard shall become effective 90 days after its
479	adoption by the commission or such later date as the commission
480	may determine; provided, that a compacting state may opt out of
481	a uniform standard as provided in this article. The term "opt
482	out" means any action by a compacting state to decline to adopt
483	or participate in an adopted uniform standard. All other rules
484	and operating procedures, and amendments thereto, shall become
485	effective as of the date specified in each rule, operating
486	procedure, or amendment.
487	(4)  Opt out procedure.--
488	(a)  A compacting state may opt out of a uniform standard
489	by legislation or regulation duly adopted by the insurance
490	department under the compacting state's Administrative Procedure
491	Act. If a compacting state elects to opt out of a uniform
492	standard by regulation, the state must give written notice to
493	the commission no later than 10 business days after the uniform
494	standard is adopted or at the time the state becomes a
495	compacting state and find that the uniform standard does not
496	provide reasonable protections to the citizens of the state
497	given the conditions in the state. The commissioner shall make
498	specific findings of fact and conclusions of law, based upon a
499	preponderance of the evidence, detailing the conditions in the
500	state that warrant a departure from the uniform standard and
501	determining that the uniform standard would not reasonably
502	protect the citizens of the state. The commissioner must
503	consider and balance the following factors and find that the
504	conditions in the state and needs of the citizens of the state
505	outweigh the intent of the Legislature to participate in, and
506	the benefits of, an interstate agreement to establish national
507	uniform consumer protections for the products subject to this
508	compact and the presumption that a uniform standard adopted by
509	the commission provides reasonable protections to consumers of
510	the relevant product.
511	(b)  Notwithstanding paragraph (a), a compacting state may,
512	at the time of its enactment of this compact, prospectively opt
513	out of all uniform standards involving long-term care insurance
514	products by expressly providing for such opt out in the enacted
515	compact, and such an opt out shall not be treated as a material
516	variance in the offer or acceptance of any state to participate
517	in this compact. Such an opt out shall be effective at the time
518	of enactment of this compact by the compacting state and shall
519	apply to all existing uniform standards involving long-term care
520	insurance products and those subsequently adopted.
521	(5)  Effect of opt out.--
522	(a)  If a compacting state elects to opt out of a uniform
523	standard, the uniform standard shall remain applicable in the
524	compacting state electing to opt out until such time the opt out
525	legislation is enacted into law or the regulation opting out
526	becomes effective.
527	(b)  Once the opt out of a uniform standard by a compacting
528	state becomes effective as provided under the laws of that
529	state, the uniform standard shall have no further force and
530	effect in that state unless and until the legislation or
531	regulation implementing the opt out is repealed or otherwise
532	becomes ineffective under the laws of the state. If a compacting
533	state opts out of a uniform standard after the uniform standard
534	has been made effective in that state, the opt out shall have
535	the same prospective effect as provided under Article XIV for
536	withdrawals.
537	(6)  Stay of uniform standard.--If a compacting state has
538	formally initiated the process of opting out of a uniform
539	standard by regulation, and while the regulatory opt out is
540	pending, the compacting state may petition the commission, at
541	least 15 days before the effective date of the uniform standard,
542	to stay the effectiveness of the uniform standard in that state.
543	The commission may grant a stay if the commission determines the
544	regulatory opt out is being pursued in a reasonable manner and
545	that there is a likelihood of success. If a stay is granted or
546	extended by the commission, the stay or extension thereof may
547	postpone the effective date by up to 90 days unless
548	affirmatively extended by the commission; provided, a stay may
549	not be permitted to remain in effect for more than 1 year unless
550	the compacting state can show extraordinary circumstances that
551	warrant a continuance of the stay, including, but not limited
552	to, the existence of a legal challenge that prevents the
553	compacting state from opting out. A stay may be terminated by
554	the commission upon notice that the rulemaking process has been
555	terminated.
556	(7)  Not later than 30 days after a rule or operating
557	procedure is adopted, any person may file a petition for
558	judicial review of the rule or operating procedure; provided,
559	that the filing of such a petition shall not stay or otherwise
560	prevent the rule or operating procedure from becoming effective
561	unless the court finds that the petitioner has a substantial
562	likelihood of success. The court shall give deference to the
563	actions of the commission consistent with applicable law and
564	shall not find the rule or operating procedure to be unlawful if
565	the rule or operating procedure represents a reasonable exercise
566	of the commission's authority.
567
568	ARTICLE VIII
569
570	COMMISSION RECORDS AND ENFORCEMENT.--
571	(1)  The commission shall monitor compacting states for
572	compliance with duly adopted bylaws, rules, including uniform
573	standards, and operating procedures. The commission shall notify
574	any noncomplying compacting state in writing of its
575	noncompliance with commission bylaws, rules, or operating
576	procedures. If a noncomplying compacting state fails to remedy
577	its noncompliance within the time specified in the notice of
578	noncompliance, the compacting state shall be deemed to be in
579	default as set forth in Article XIV.
580	(2)  The commissioner of any state in which an insurer is
581	authorized to do business, or is conducting the business of
582	insurance, shall continue to exercise his or her authority to
583	oversee the market regulation of the activities of the insurer
584	in accordance with the provisions of the state's law. The
585	commissioner's enforcement of compliance with the compact is
586	governed by the following provisions:
587	(a)  With respect to the commissioner's market regulation
588	of a product or advertisement that is approved or certified to
589	the commission, the content of the product or advertisement
590	shall not constitute a violation of the provisions, standards,
591	or requirements of the compact except upon a final order of the
592	commission issued at the request of a commissioner after prior
593	notice to the insurer and an opportunity for hearing before the
594	commission.
595	(b)  Before a commissioner may bring an action for
596	violation of any provision, standard, or requirement of the
597	compact relating to the content of an advertisement not approved
598	or certified to the commission, the commission, or an authorized
599	commission officer or employee, must authorize the action.
600	However, authorization pursuant to this paragraph does not
601	require notice to the insurer, opportunity for hearing or
602	disclosure of requests for authorization or records of the
603	commission's action on such requests.
604
605	ARTICLE IX
606
607	DISPUTE RESOLUTION.--The commission shall attempt, upon the
608	request of a member, to resolve any disputes or other issues
609	that are subject to this compact and that may arise between two
610	or among more compacting states, or between compacting states
611	and noncompacting states, and the commission shall adopt an
612	operating procedure providing for resolution of such disputes.
613
614	ARTICLE X
615
616	PRODUCT FILING AND APPROVAL.--
617	(1)  Insurers and third-party filers seeking to have a
618	product approved by the commission shall file the product with,
619	and pay applicable filing fees to, the commission. Nothing in
620	this compact shall be construed to restrict or otherwise prevent
621	an insurer from filing its product with the insurance department
622	in any state in which the insurer is licensed to conduct the
623	business of insurance, and such filing shall be subject to the
624	laws of the states where filed.
625	(2)  The commission shall establish appropriate filing and
626	review processes and procedures pursuant to commission rules and
627	operating procedures. Notwithstanding any provision in this
628	article, the commission shall adopt rules to establish
629	conditions and procedures under which the commission will
630	provide public access to product filing information. In
631	establishing such rules, the commission shall consider the
632	interests of the public in having access to such information as
633	well as protection of personal medical and financial information
634	and trade secrets that may be contained in a product filing or
635	supporting information.
636	(3)  Any product approved by the commission may be sold or
637	otherwise issued in those compacting states for which the
638	insurer is legally authorized to do business.
639
640	ARTICLE XI
641
642	REVIEW OF COMMISSION DECISIONS REGARDING FILINGS.--
643	(1)  Not later than 30 days after the commission has given
644	notice of a disapproved product or advertisement filed with the
645	commission, the insurer or third-party filer whose filing was
646	disapproved may appeal the determination to a review panel
647	appointed by the commission. The commission shall adopt rules to
648	establish procedures for appointing such review panels and
649	provide for notice and hearing. An allegation that the
650	commission, in disapproving a product or advertisement filed
651	with the commission, acted arbitrarily, capriciously, or in a
652	manner that is an abuse of discretion or otherwise not in
653	accordance with the law, is subject to judicial review in
654	accordance with Article III, section 5.
655	(2)  The commission may monitor, review, and reconsider
656	products and advertisements subsequent to their filing or
657	approval upon a finding that the product does not meet the
658	relevant uniform standard. Where appropriate, the commission may
659	withdraw or modify its approval after proper notice and hearing,
660	subject to the appeal process in subsection (1).
661
662	ARTICLE XII
663
664	FINANCE.--
665	(1)  The commission shall pay or provide for the payment of
666	the reasonable expenses of its establishment and organization.
667	To fund the cost of its initial operations, the commission may
668	accept contributions and other forms of funding from the
669	National Association of Insurance Commissioners, compacting
670	states, and other sources. Contributions and other forms of
671	funding from other sources shall be of such a nature that the
672	independence of the commission concerning the performance of its
673	duties shall not be compromised.
674	(2)  The commission shall collect a filing fee from each
675	insurer and third-party filer filing a product with the
676	commission to cover the cost of the operations and activities of
677	the commission and its staff in a total amount sufficient to
678	cover the commission's annual budget.
679	(3)  The commission's budget for a fiscal year shall not be
680	approved until it has been subject to notice and comment as set
681	forth in Article VII.
682	(4)  The commission shall be exempt from all taxation in
683	and by the compacting states.
684	(5)  The commission shall not pledge the credit of any
685	compacting state except by and with the appropriate legal
686	authority of that compacting state.
687	(6)  The commission shall keep complete and accurate
688	accounts of all its internal receipts, including grants and
689	donations, and disbursements of all funds under its control. The
690	internal financial accounts of the commission shall be subject
691	to the accounting procedures established under its bylaws. The
692	financial accounts and reports including the system of internal
693	controls and procedures of the commission shall be audited
694	annually by an independent certified public accountant. Upon the
695	determination of the commission, but no less frequently than
696	every 3 years, the review of the independent auditor shall
697	include a management and performance audit of the commission.
698	The commission shall make an annual report to the Governor and
699	the Legislature of the compacting states, which shall include a
700	report of the independent audit. The commission's internal
701	accounts shall not be confidential, and such materials may be
702	shared with the commissioner of any compacting state upon
703	request, provided, however, that any work papers related to any
704	internal or independent audit and any information regarding the
705	privacy of individuals and insurers' proprietary information,
706	including trade secrets, shall remain confidential.
707	(7)  No compacting state shall have any claim to or
708	ownership of any property held by or vested in the commission or
709	to any commission funds held pursuant to the provisions of this
710	compact.
711
712	ARTICLE XIII
713
714	COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT.--
715	(1)  Any state is eligible to become a compacting state.
716	(2)  The compact shall become effective and binding upon
717	legislative enactment of the compact into law by two compacting
718	states; provided, the commission shall become effective for
719	purposes of adopting uniform standards for, reviewing, and
720	giving approval or disapproval of products filed with the
721	commission that satisfy applicable uniform standards only after
722	26 states become compacting states or, alternatively, by states
723	representing greater than 40 percent of the premium volume for
724	life insurance, annuity, disability income, and long-term care
725	insurance products, based on records of the National Association
726	of Insurance Commissioners for the prior year. Thereafter, it
727	shall become effective and binding as to any other compacting
728	state upon enactment of the compact into law by that state.
729	(3)  Amendments to the compact may be proposed by the
730	commission for enactment by the compacting states. No amendment
731	shall become effective and binding upon the commission and the
732	compacting states unless and until all compacting states enact
733	the amendment into law.
734
735	ARTICLE XIV
736
737	WITHDRAWAL, DEFAULT, AND TERMINATION.--
738	(1)  Withdrawal.--
739	(a)  Once effective, the compact shall continue in force
740	and remain binding upon each and every compacting state;
741	provided, that a compacting state may withdraw from the compact
742	as a withdrawing state by enacting a law specifically repealing
743	the law which enacted the compact into law.
744	(b)  The effective date of withdrawal is the effective date
745	of the repealing law. However, the withdrawal shall not apply to
746	any product filings approved or self-certified, or any
747	advertisement of such products, on the date the repealing law
748	becomes effective, except by mutual agreement of the commission
749	and the withdrawing state unless the approval is rescinded by
750	the withdrawing state as provided in paragraph (e).
751	(c)  The commissioner of the withdrawing state shall
752	immediately notify the management committee in writing upon the
753	introduction of legislation repealing this compact in the
754	withdrawing state.
755	(d)  The commission shall notify the other compacting
756	states of the introduction of such legislation within 10 days
757	after its receipt of notice of such legislation.
758	(e)  The withdrawing state is responsible for all
759	obligations, duties, and liabilities incurred through the
760	effective date of withdrawal, including any obligations the
761	performance of which extend beyond the effective date of
762	withdrawal, except to the extent those obligations may have been
763	released or relinquished by mutual agreement of the commission
764	and the withdrawing state. The commission's approval of products
765	and advertisements prior to the effective date of withdrawal
766	shall continue to be effective and be given full force and
767	effect in the withdrawing state, unless formally rescinded by
768	the withdrawing state in the same manner as provided by the laws
769	of the withdrawing state for the prospective disapproval of
770	products or advertisement previously approved under state law.
771	(f)  Reinstatement following withdrawal of any compacting
772	state shall occur upon the effective date of the withdrawing
773	state reenacting the compact.
774	(2)  Default.--
775	(a)  If the commission determines that any compacting state
776	has at any time defaulted as a defaulting state in the
777	performance of any of its obligations or responsibilities under
778	this compact, the bylaws or duly adopted rules or operating
779	procedures, after notice and hearing as set forth in the bylaws,
780	all rights, privileges, and benefits conferred by this compact
781	on the defaulting state shall be suspended from the effective
782	date of default as fixed by the commission. The grounds for
783	default include, but are not limited to, failure of a compacting
784	state to perform its obligations or responsibilities and any
785	other grounds designated in commission rules. The commission
786	shall immediately notify the defaulting state in writing of the
787	defaulting state's suspension pending a cure of the default. The
788	commission shall stipulate the conditions and the time period
789	within which the defaulting state must cure its default. If the
790	defaulting state fails to cure the default within the time
791	period specified by the commission, the defaulting state shall
792	be terminated from the compact, and all rights, privileges, and
793	benefits conferred by this compact shall be terminated from the
794	effective date of termination.
795	(b)  Product approvals by the commission or product self-
796	certifications, or any advertisement in connection with such
797	product, that are in force on the effective date of termination
798	shall remain in force in the defaulting state in the same manner
799	as if the defaulting state had withdrawn voluntarily pursuant to
800	subsection (1).
801	(c)  Reinstatement following termination of any compacting
802	state requires a reenactment of the compact.
803	(3)  Dissolution of compact.--
804	(a)  The compact dissolves effective upon the date of the
805	withdrawal or default of the compacting state, which reduces
806	membership in the compact to one compacting state.
807	(b)  Upon the dissolution of this compact, the compact
808	becomes null and void and shall be of no further force or
809	effect, and the business and affairs of the commission shall be
810	wound up and any surplus funds shall be distributed in
811	accordance with the bylaws.
812
813	ARTICLE XV
814
815	SEVERABILITY AND CONSTRUCTION.--
816	(1)  The provisions of this compact are severable, and if
817	any phrase, clause, sentence, or provision is deemed
818	unenforceable, the remaining provisions of the compact shall be
819	enforceable.
820	(2)  The provisions of this compact shall be liberally
821	construed to effectuate its purposes.
822
823	ARTICLE XVI
824
825	BINDING EFFECT OF COMPACT AND OTHER LAWS.--
826	(1)  Other laws.--
827	(a)  Nothing in this compact prevents the enforcement of
828	any other law of a compacting state, except as provided in
829	paragraph (b).
830	(b)  For any product approved or certified to the
831	commission, the rules, uniform standards, and any other
832	requirements of the commission shall constitute the exclusive
833	provisions applicable to the content, approval, and
834	certification of such products. For an advertisement that is
835	subject to the commission's authority, any rule, uniform
836	standard, or other requirement of the commission that governs
837	the content of the advertisement shall constitute the exclusive
838	provision that a commissioner may apply to the content of the
839	advertisement. Notwithstanding this paragraph, no action taken
840	by the commission shall abrogate or restrict:
841	1.  The access of any person to state courts;
842	2.  Remedies available under state law related to breach of
843	contract, tort, or other laws not specifically directed to the
844	content of the product;
845	3.  State law relating to the construction of insurance
846	contracts; or
847	4.  The authority of the Attorney General of the state,
848	including, but not limited to, maintaining any actions or
849	proceedings, as authorized by law.
850	(c)  All insurance products filed with individual states
851	shall be subject to the laws of those states.
852	(2)  Binding effect of this compact.--
853	(a)  All lawful actions of the commission, including all
854	rules and operating procedures adopted by the commission, are
855	binding upon the compacting states.
856	(b)  All agreements between the commission and the
857	compacting states are binding in accordance with their terms.
858	(c)  Upon the request of a party to a conflict over the
859	meaning or interpretation of commission actions, and upon a
860	majority vote of the compacting states, the commission may issue
861	advisory opinions regarding the meaning or interpretation in
862	dispute.
863	(d)  If any provision of this compact exceeds the
864	constitutional limits imposed on the Legislature of any
865	compacting state, the obligations, duties, powers, or
866	jurisdiction sought to be conferred by that provision upon the
867	commission shall be ineffective as to that compacting state, and
868	those obligations, duties, powers, or jurisdiction shall remain
869	in the compacting state and shall be exercised by the agency of
870	that state to which those obligations, duties, powers, or
871	jurisdiction are delegated by law in effect at the time this
872	compact becomes effective.
873	Section 2.  This act shall take effect July 1, 2007.

CODING: Words stricken are deletions; words underlined are additions.