Florida Senate - 2012                                    SB 1386
       By Senator Smith
       29-01611-12                                           20121386__
    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
    7         responsibilities of the commission; specifying the
    8         commission as an instrumentality of the compacting
    9         states; providing for venue; specifying the commission
   10         as a separate, not-for-profit entity; providing powers
   11         of the commission; providing for organization of the
   12         commission; providing for membership, voting, and
   13         bylaws; designating the Commissioner of Insurance
   14         Regulation as the representative of this state on the
   15         commission; providing for a management committee,
   16         officers, and personnel of the commission; providing
   17         authority of the management committee; providing for
   18         legislative and advisory committees; providing for
   19         qualified immunity, defense, and indemnification of
   20         members, officers, employees, and representatives of
   21         the commission; providing for meetings and acts of the
   22         commission; providing rules and operating procedures;
   23         providing rulemaking functions of the commission;
   24         providing for opting out of uniform standards;
   25         providing procedures and requirements; providing for
   26         commission records and enforcement; authorizing the
   27         commission to adopt rules; providing for disclosure of
   28         certain information; specifying that certain records,
   29         data, or information of the commission in possession
   30         of the Office of Insurance Regulation is subject to
   31         ch. 119, F.S.; requiring the commission to monitor for
   32         compliance; providing for dispute resolution;
   33         providing for product filing and approval; requiring
   34         the commission to establish filing and review
   35         processes and procedures; providing for review of
   36         commission decisions regarding filings; providing for
   37         finance of commission activities; providing for
   38         payment of expenses; authorizing the commission to
   39         collect filing fees for certain purposes; providing
   40         for approval of a commission budget; exempting the
   41         commission from all taxation; prohibiting the
   42         commission from pledging the credit of any compacting
   43         states without authority; requiring the commission to
   44         keep complete accurate accounts, provide for audits,
   45         and make annual reports to the Governors and
   46         Legislatures of compacting states; providing for
   47         effective date and amendment of the compact; providing
   48         for withdrawal from the compact, default by compacting
   49         states, and dissolution of the compact; providing
   50         severability and construction; providing for binding
   51         effect of compact and other laws; exercising the
   52         state’s right in accordance with the compact to
   53         prospectively opt out of all uniform standards in the
   54         compact involving long-term care insurance products;
   55         providing application; providing an appropriation;
   56         providing an effective date.
   58  Be It Enacted by the Legislature of the State of Florida:
   60         Section 1. Legislative findings; intent.—
   61         (1) The Legislature finds that the financial services
   62  marketplace has changed significantly in recent years and that
   63  asset-based insurance products, which include life insurance,
   64  annuities, disability income insurance, and long-term care
   65  insurance, now compete directly with other retirement and estate
   66  planning instruments that are sold by banks and securities
   67  firms.
   68         (2) The Legislature further finds that the increased
   69  mobility of the population and the risks borne by these asset
   70  based products are not local in nature.
   71         (3) The Legislature further finds that the Interstate
   72  Insurance Product Regulation Compact Model adopted by the
   73  National Association of Insurance Commissioners and endorsed by
   74  the National Conference of Insurance Legislators and the
   75  National Conference of State Legislatures is designed to address
   76  these market changes by providing a uniform set of product
   77  standards and a single source for filing of new products.
   78         (4) The Legislature further finds that the product
   79  standards that have been developed provide a high level of
   80  consumer protection. Further, it is noted that the Interstate
   81  Insurance Product Regulation Compact Model includes a mechanism
   82  for opting out of any product standard that the state determines
   83  would not reasonably protect its citizens. With respect to long
   84  term care insurance, the Legislature understands that the
   85  compact does not intend to develop a uniform standard for rate
   86  increase filings, thereby leaving the authority over long-term
   87  care rate increases with the state. The state relies on that
   88  understanding in adopting this legislation. The state, pursuant
   89  to the terms and conditions of this act, seeks to join with
   90  other states and establish the Interstate Insurance Product
   91  Regulation Compact, and thus become a member of the Interstate
   92  Insurance Product Regulation Commission. The Commissioner of
   93  Insurance Regulation is hereby designated to serve as the
   94  representative of this state on the commission.
   95         Section 2. Interstate Insurance Product Regulation
   96  Compact.—The Interstate Insurance Product Regulation Compact is
   97  hereby enacted into law and entered into by this state with all
   98  states legally joining therein in the form substantially as
   99  follows:
  101           Interstate Insurance Product Regulation Compact         
  103                              Preamble                             
  105  This compact is intended to help states join together to
  106  establish an interstate compact to regulate designated insurance
  107  products. Pursuant to terms and conditions of this compact, this
  108  state seeks to join with other states and establish the
  109  Interstate Insurance Product Regulation Compact and thus become
  110  a member of the Interstate Insurance Product Regulation
  111  Commission.
  113                              Article I                            
  115         PURPOSES.—The purposes of this compact are, through means
  116  of joint and cooperative action among the compacting states, to:
  117         (1) Promote and protect the interest of consumers of
  118  individual and group annuity, life insurance, disability income,
  119  and long-term care insurance products.
  120         (2) Develop uniform standards for insurance products
  121  covered under the compact.
  122         (3) Establish a central clearinghouse to receive and
  123  provide prompt review of insurance products covered under the
  124  compact and, in certain cases, advertisements related thereto,
  125  submitted by insurers authorized to do business in one or more
  126  compacting states.
  127         (4) Give appropriate regulatory approval to those product
  128  filings and advertisements satisfying the applicable uniform
  129  standard.
  130         (5) Improve coordination of regulatory resources and
  131  expertise between state insurance departments regarding the
  132  setting of uniform standards and review of insurance products
  133  covered under the compact.
  134         (6) Create the Interstate Insurance Product Regulation
  135  Commission.
  136         (7) Perform these and such other related functions as may
  137  be consistent with the state regulation of the business of
  138  insurance.
  140                             Article II                            
  142         DEFINITIONS.—For purposes of this compact:
  143         (1) “Advertisement” means any material designed to create
  144  public interest in a product, or induce the public to purchase,
  145  increase, modify, reinstate, borrow on, surrender, replace, or
  146  retain a policy, as more specifically defined in the rules and
  147  operating procedures of the commission adopted as of December
  148  31, 2011, and subsequent amendments thereto if the methodology
  149  remains substantially consistent.
  150         (2) “Bylaws” means those bylaws adopted by the commission
  151  as of December 31, 2011, and subsequent amendments thereto if
  152  the methodology remains substantially consistent, for its
  153  governance or for directing or controlling the commission’s
  154  actions or conduct.
  155         (3) “Compacting state” means any state which has enacted
  156  this compact legislation and which has not withdrawn pursuant to
  157  subsection (1) of Article XIV or been terminated pursuant to
  158  subsection (2) of Article XIV.
  159         (4) “Commission” means the “Interstate Insurance Product
  160  Regulation Commission” established by this compact.
  161         (5) “Commissioner” means the chief insurance regulatory
  162  official of a state, including, but not limited to,
  163  commissioner, superintendent, director, or administrator. For
  164  purposes of this compact, the Commissioner of Insurance
  165  Regulation is the chief insurance regulatory official of this
  166  state.
  167         (6) “Domiciliary state” means the state in which an insurer
  168  is incorporated or organized or, in the case of an alien
  169  insurer, its state of entry.
  170         (7) “Insurer” means any entity licensed by a state to issue
  171  contracts of insurance for any of the lines of insurance covered
  172  by this compact.
  173         (8) “Member” means the person chosen by a compacting state
  174  as its representative to the commission, or his or her designee.
  175         (9) “Noncompacting state” means any state which is not at
  176  the time a compacting state.
  177         (10) “Operating procedures” means procedures adopted by the
  178  commission as of December 31, 2011, and subsequent amendments
  179  thereto if the methodology remains substantially consistent,
  180  implementing a rule, uniform standard, or provision of this
  181  compact.
  182         (11) “Product” means the form of a policy or contract,
  183  including any application, endorsement, or related form which is
  184  attached to and made a part of the policy or contract, and any
  185  evidence of coverage or certificate, for an individual or group
  186  annuity, life insurance, disability income, or long-term care
  187  insurance product that an insurer is authorized to issue.
  188         (12) “Rule” means a statement of general or particular
  189  applicability and future effect adopted by the commission as of
  190  December 31, 2011, and subsequent amendments thereto if the
  191  methodology remains substantially consistent, including a
  192  uniform standard developed pursuant to Article VII, designed to
  193  implement, interpret, or prescribe law or policy or describing
  194  the organization, procedure, or practice requirements of the
  195  commission, which shall have the force and effect of law in the
  196  compacting states.
  197         (13) “State” means any state, district, or territory of the
  198  United States.
  199         (14) “Third-party filer” means an entity that submits a
  200  product filing to the commission on behalf of an insurer.
  201         (15) “Uniform standard” means a standard adopted by the
  202  commission as of December 31, 2011, and subsequent amendments
  203  thereto if the methodology remains substantially consistent, for
  204  a product line pursuant to Article VII and shall include all of
  205  the product requirements in aggregate; provided, each uniform
  206  standard shall be construed, whether express or implied, to
  207  prohibit the use of any inconsistent, misleading, or ambiguous
  208  provisions in a product and the form of the product made
  209  available to the public shall not be unfair, inequitable, or
  210  against public policy as determined by the commission.
  212                             Article III                           
  215         (1) The compacting states hereby create and establish a
  216  joint public agency known as the Interstate Insurance Product
  217  Regulation Commission. Pursuant to Article IV, the commission
  218  has the power to develop uniform standards for product lines,
  219  receive and provide prompt review of products filed with the
  220  commission, and give approval to those product filings
  221  satisfying applicable uniform standards; provided, it is not
  222  intended for the commission to be the exclusive entity for
  223  receipt and review of insurance product filings. Nothing in this
  224  article shall prohibit any insurer from filing its product in
  225  any state in which the insurer is licensed to conduct the
  226  business of insurance and any such filing shall be subject to
  227  the laws of the state where filed.
  228         (2) The commission is a body corporate and politic and an
  229  instrumentality of the compacting states.
  230         (3) The commission is solely responsible for its
  231  liabilities, except as otherwise specifically provided in this
  232  compact.
  233         (4) Venue is proper and judicial proceedings by or against
  234  the commission shall be brought solely and exclusively in a
  235  court of competent jurisdiction where the principal office of
  236  the commission is located.
  237         (5) The commission is a not-for-profit entity, separate and
  238  distinct from the individual compacting states.
  240                             Article IV                            
  242         POWERS.—The commission shall have the following powers to:
  243         (1) Adopt rules, pursuant to Article VII, which shall have
  244  the force and effect of law and shall be binding in the
  245  compacting states to the extent and in the manner provided in
  246  this compact.
  247         (2) Exercise its rulemaking authority and establish
  248  reasonable uniform standards for products covered under the
  249  compact, and advertisement related thereto, which shall have the
  250  force and effect of law and shall be binding in the compacting
  251  states, but only for those products filed with the commission;
  252  provided a compacting state shall have the right to opt out of
  253  such uniform standard pursuant to Article VII to the extent and
  254  in the manner provided in this compact and any uniform standard
  255  established by the commission for long-term care insurance
  256  products may provide the same or greater protections for
  257  consumers as, but shall not provide less than, those protections
  258  set forth in the National Association of Insurance
  259  Commissioners’ Long-Term Care Insurance Model Act and Long-Term
  260  Care Insurance Model Regulation, respectively, adopted as of
  261  2001. The commission shall consider whether any subsequent
  262  amendments to the National Association of Insurance
  263  Commissioners’ Long-Term Care Insurance Model Act or Long-Term
  264  Care Insurance Model Regulation adopted by the National
  265  Association of Insurance Commissioners require amending of the
  266  uniform standards established by the commission for long-term
  267  care insurance products.
  268         (3) Receive and review in an expeditious manner products
  269  filed with the commission and rate filings for disability income
  270  and long-term care insurance products and give approval of those
  271  products and rate filings that satisfy the applicable uniform
  272  standard, and such approval shall have the force and effect of
  273  law and be binding on the compacting states to the extent and in
  274  the manner provided in the compact.
  275         (4) Receive and review in an expeditious manner
  276  advertisement relating to long-term care insurance products for
  277  which uniform standards have been adopted by the commission, and
  278  give approval to all advertisement that satisfies the applicable
  279  uniform standard. For any product covered under this compact,
  280  other than long-term care insurance products, the commission
  281  shall have the authority to require an insurer to submit all or
  282  any part of its advertisement with respect to that product for
  283  review or approval prior to use, if the commission determines
  284  that the nature of the product is such that an advertisement of
  285  the product could have the capacity or tendency to mislead the
  286  public. The actions of the commission as provided in this
  287  subsection shall have the force and effect of law and shall be
  288  binding in the compacting states to the extent and in the manner
  289  provided in the compact.
  290         (5) Exercise its rulemaking authority and designate
  291  products and advertisement that may be subject to a self
  292  certification process without the need for prior approval by the
  293  commission.
  294         (6) Adopt operating procedures, pursuant to Article VII,
  295  which shall be binding in the compacting states to the extent
  296  and in the manner provided in this compact.
  297         (7) Bring and prosecute legal proceedings or actions in its
  298  name as the commission; provided the standing of any state
  299  insurance department to sue or be sued under applicable law
  300  shall not be affected.
  301         (8) Issue subpoenas requiring the attendance and testimony
  302  of witnesses and the production of evidence.
  303         (9) Establish and maintain offices.
  304         (10) Purchase and maintain insurance and bonds.
  305         (11) Borrow, accept, or contract for services of personnel,
  306  including, but not limited to, employees of a compacting state.
  307         (12) Hire employees, professionals, or specialists; elect
  308  or appoint officers and fix their compensation, define their
  309  duties, give them appropriate authority to carry out the
  310  purposes of the compact, and determine their qualifications; and
  311  establish the commission’s personnel policies and programs
  312  relating to, among other things, conflicts of interest, rates of
  313  compensation, and qualifications of personnel.
  314         (13) Accept any and all appropriate donations and grants of
  315  money, equipment, supplies, materials, and services and to
  316  receive, use, and dispose of the same; provided at all times the
  317  commission shall strive to avoid any appearance of impropriety.
  318         (14) Lease, purchase, and accept appropriate gifts or
  319  donations of, or otherwise to own, hold, improve, or use, any
  320  property, real, personal, or mixed; provided at all times the
  321  commission shall strive to avoid any appearance of impropriety.
  322         (15) Sell, convey, mortgage, pledge, lease, exchange,
  323  abandon, or otherwise dispose of any property, real, personal,
  324  or mixed.
  325         (16) Remit filing fees to compacting states as may be set
  326  forth in the bylaws, rules, or operating procedures.
  327         (17) Enforce compliance by compacting states with rules,
  328  uniform standards, operating procedures, and bylaws.
  329         (18) Provide for dispute resolution among compacting
  330  states.
  331         (19) Advise compacting states on issues relating to
  332  insurers domiciled or doing business in noncompacting
  333  jurisdictions, consistent with the purposes of this compact.
  334         (20) Provide advice and training to those personnel in
  335  state insurance departments responsible for product review and
  336  to be a resource for state insurance departments.
  337         (21) Establish a budget and make expenditures.
  338         (22) Borrow money.
  339         (23) Appoint committees, including advisory committees,
  340  comprising members, state insurance regulators, state
  341  legislators or their representatives, insurance industry and
  342  consumer representatives, and such other interested persons as
  343  may be designated in the bylaws.
  344         (24) Provide and receive information from and to cooperate
  345  with law enforcement agencies.
  346         (25) Adopt and use a corporate seal.
  347         (26) Perform such other functions as may be necessary or
  348  appropriate to achieve the purposes of this compact consistent
  349  with the state regulation of the business of insurance.
  351                              Article V                            
  353         ORGANIZATION.—
  354         (1) Membership; voting; bylaws.—
  355         (a)1. Each compacting state shall have and be limited to
  356  one member. Each member shall be qualified to serve in that
  357  capacity pursuant to applicable law of the compacting state. Any
  358  member may be removed or suspended from office as provided by
  359  the law of the state from which he or she is appointed. Any
  360  vacancy occurring in the commission shall be filled in
  361  accordance with the laws of the compacting state in which the
  362  vacancy exists. Nothing in this article shall be construed to
  363  affect the manner in which a compacting state determines the
  364  election or appointment and qualification of its own
  365  commissioner.
  366         2. The Commissioner of Insurance Regulation is hereby
  367  designated to serve as the representative of this state on the
  368  commission.
  369         (b) Each member shall be entitled to one vote and shall
  370  have an opportunity to participate in the governance of the
  371  commission in accordance with the bylaws. Notwithstanding any
  372  other provision of this article, no action of the commission
  373  with respect to the adoption of a uniform standard shall be
  374  effective unless two-thirds of the members vote in favor of such
  375  action.
  376         (c) The commission shall, by a majority of the members,
  377  prescribe bylaws to govern its conduct as may be necessary or
  378  appropriate to carry out the purposes and exercise the powers of
  379  the compact, including, but not limited to:
  380         1. Establishing the fiscal year of the commission.
  381         2. Providing reasonable procedures for appointing and
  382  electing members, as well as holding meetings, of the management
  383  committee.
  384         3. Providing reasonable standards and procedures:
  385         a. For the establishment and meetings of other committees.
  386         b. Governing any general or specific delegation of any
  387  authority or function of the commission.
  388         4. Providing reasonable procedures for calling and
  389  conducting meetings of the commission that consist of a majority
  390  of commission members, ensuring reasonable advance notice of
  391  each such meeting, and providing for the right of citizens to
  392  attend each such meeting with enumerated exceptions designed to
  393  protect the public’s interest, the privacy of individuals, and
  394  insurers’ proprietary information, including, but not limited
  395  to, trade secrets. The commission may meet in camera only after
  396  a majority of the entire membership votes to close a meeting in
  397  total or in part. As soon as practicable, the commission must
  398  make public a copy of the vote to close the meeting revealing
  399  the vote of each member with no proxy votes allowed, and votes
  400  taken during such meeting.
  401         5. Establishing the titles, duties, and authority and
  402  reasonable procedures for the election of the officers of the
  403  commission.
  404         6. Providing reasonable standards and procedures for the
  405  establishment of the personnel policies and programs of the
  406  commission. Notwithstanding any civil service or other similar
  407  laws of any compacting state, the bylaws shall exclusively
  408  govern the personnel policies and programs of the commission.
  409         7. Adopting a code of ethics to address permissible and
  410  prohibited activities of commission members and employees.
  411         8. Providing a mechanism for winding up the operations of
  412  the commission and the equitable disposition of any surplus
  413  funds that may exist after the termination of the compact after
  414  the payment or reserving of all debts and obligations of the
  415  commission.
  416         (d) The commission shall publish its bylaws in a convenient
  417  form and file a copy of such bylaws and a copy of any amendment
  418  to such bylaws, with the appropriate agency or officer in each
  419  of the compacting states.
  420         (2) Management committee, officers, and personnel.—
  421         (a) A management committee comprising no more than 14
  422  members shall be established as follows:
  423         1. One member from each of the six compacting states with
  424  the largest premium volume for individual and group annuities,
  425  life, disability income, and long-term care insurance products,
  426  determined from the records of the National Association of
  427  Insurance Commissioners for the prior year.
  428         2. Four members from those compacting states with at least
  429  2 percent of the market based on the premium volume described
  430  above, other than the six compacting states with the largest
  431  premium volume, selected on a rotating basis as provided in the
  432  bylaws.
  433         3. Four members from those compacting states with less than
  434  2 percent of the market, based on the premium volume described
  435  above, with one selected from each of the four zone regions of
  436  the National Association of Insurance Commissioners as provided
  437  in the bylaws.
  438         (b) The management committee shall have such authority and
  439  duties as may be set forth in the bylaws, including, but not
  440  limited to:
  441         1. Managing the affairs of the commission in a manner
  442  consistent with the bylaws and purposes of the commission.
  443         2. Establishing and overseeing an organizational structure
  444  within, and appropriate procedures for, the commission to
  445  provide for the creation of uniform standards and other rules,
  446  receipt and review of product filings, administrative and
  447  technical support functions, review of decisions regarding the
  448  disapproval of a product filing, and the review of elections
  449  made by a compacting state to opt out of a uniform standard;
  450  provided a uniform standard shall not be submitted to the
  451  compacting states for adoption unless approved by two-thirds of
  452  the members of the management committee.
  453         3. Overseeing the offices of the commission.
  454         4. Planning, implementing, and coordinating communications
  455  and activities with other state, federal, and local government
  456  organizations in order to advance the goals of the commission.
  457         (c) The commission shall elect annually officers from the
  458  management committee, with each having such authority and duties
  459  as may be specified in the bylaws.
  460         (d) The management committee may, subject to the approval
  461  of the commission, appoint or retain an executive director for
  462  such period, upon such terms and conditions, and for such
  463  compensation as the commission may deem appropriate. The
  464  executive director shall serve as secretary to the commission
  465  but shall not be a member of the commission. The executive
  466  director shall hire and supervise such other staff as may be
  467  authorized by the commission.
  468         (3) Legislative and advisory committees.—
  469         (a) A legislative committee comprised of state legislators
  470  or their designees shall be established to monitor the
  471  operations of and make recommendations to the commission,
  472  including the management committee; provided the manner of
  473  selection and term of any legislative committee member shall be
  474  as set forth in the bylaws. Prior to the adoption by the
  475  commission of any uniform standard, revision to the bylaws,
  476  annual budget, or other significant matter as may be provided in
  477  the bylaws, the management committee shall consult with and
  478  report to the legislative committee.
  479         (b) The commission shall establish two advisory committees,
  480  one comprising consumer representatives independent of the
  481  insurance industry and the other comprising insurance industry
  482  representatives.
  483         (c) The commission may establish additional advisory
  484  committees as the bylaws may provide for the carrying out of
  485  commission functions.
  486         (4) Corporate records of the commission.—The commission
  487  shall maintain its corporate books and records in accordance
  488  with the bylaws.
  489         (5) Qualified immunity, defense and indemnification.—
  490         (a) The members, officers, executive director, employees,
  491  and representatives of the commission shall be immune from suit
  492  and liability, either personally or in their official capacity,
  493  for any claim for damage to or loss of property or personal
  494  injury or other civil liability caused by or arising out of any
  495  actual or alleged act, error, or omission that occurred, or that
  496  the person against whom the claim is made had a reasonable basis
  497  for believing occurred within the scope of commission
  498  employment, duties, or responsibilities; provided nothing in
  499  this paragraph shall be construed to protect any such person
  500  from suit or liability for any damage, loss, injury, or
  501  liability caused by the intentional or willful and wanton
  502  misconduct of that person.
  503         (b) The commission shall defend any member, officer,
  504  executive director, employee, or representative of the
  505  commission in any civil action seeking to impose liability
  506  arising out of any actual or alleged act, error, or omission
  507  that occurred within the scope of commission employment, duties,
  508  or responsibilities, or that the person against whom the claim
  509  is made had a reasonable basis for believing occurred within the
  510  scope of commission employment, duties, or responsibilities;
  511  provided nothing in this article shall be construed to prohibit
  512  that person from retaining his or her own counsel and the actual
  513  or alleged act, error, or omission did not result from that
  514  person’s intentional or willful and wanton misconduct.
  515         (c) The commission shall indemnify and hold harmless any
  516  member, officer, executive director, employee, or representative
  517  of the commission for the amount of any settlement or judgment
  518  obtained against that person arising out of any actual or
  519  alleged act, error, or omission that occurred within the scope
  520  of commission employment, duties, or responsibilities, or that
  521  such person had a reasonable basis for believing occurred within
  522  the scope of commission employment, duties, or responsibilities;
  523  provided the actual or alleged act, error, or omission did not
  524  result from the intentional or willful and wanton misconduct of
  525  that person.
  527                             Article VI                            
  529         MEETINGS; ACTS.—
  530         (1) The commission shall meet and take such actions as are
  531  consistent with the provisions of this compact and the bylaws.
  532         (2) Each member of the commission shall have the right and
  533  power to cast a vote to which that compacting state is entitled
  534  and to participate in the business and affairs of the
  535  commission. A member shall vote in person or by such other means
  536  as provided in the bylaws. The bylaws may provide for members’
  537  participation in meetings by telephone or other means of
  538  communication.
  539         (3) The commission shall meet at least once during each
  540  calendar year. Additional meetings shall be held as set forth in
  541  the bylaws.
  543                             Article VII                           
  547         (1) Rulemaking authority.—The commission shall adopt
  548  reasonable rules, including uniform standards, and operating
  549  procedures in order to effectively and efficiently achieve the
  550  purposes of this compact. Notwithstanding such requirement, if
  551  the commission exercises its rulemaking authority in a manner
  552  that is beyond the scope of the purposes of this compact or the
  553  powers granted under this compact, such action by the commission
  554  shall be invalid and have no force and effect.
  555         (2) Rulemaking procedure.—Rules and operating procedures
  556  shall be made pursuant to a rulemaking process that conforms to
  557  the Model State Administrative Procedure Act of 1981, as
  558  amended, as may be appropriate to the operations of the
  559  commission. Before the commission adopts a uniform standard, the
  560  commission shall give written notice to the relevant state
  561  legislative committees in each compacting state responsible for
  562  insurance issues of its intention to adopt the uniform standard.
  563  The commission in adopting a uniform standard shall consider
  564  fully all submitted materials and issue a concise explanation of
  565  its decision.
  566         (3) Effective date and opt out of a uniform standard.—A
  567  uniform standard shall become effective 90 days after its
  568  adoption by the commission or such later date as the commission
  569  may determine; provided a compacting state may opt out of a
  570  uniform standard as provided in this article. The term “opt out”
  571  means any action by a compacting state to decline to adopt or
  572  participate in an adopted uniform standard. All other rules and
  573  operating procedures, and amendments thereto, shall become
  574  effective as of the date specified in each rule, operating
  575  procedure, or amendment.
  576         (4) Opt out procedure.—
  577         (a) A compacting state may opt out of a uniform standard by
  578  legislation or regulation adopted by the Office of Insurance
  579  Regulation of the Financial Services Commission under such
  580  state’s Administrative Procedure Act. For purposes of this
  581  compact and this state, the Office of Insurance Regulation of
  582  the Department of Financial Services constitutes this state’s
  583  agency for purposes of this subsection. If a compacting state
  584  elects to opt out of a uniform standard by regulation, such
  585  state must:
  586         1. Give written notice to the commission no later than 10
  587  business days after the uniform standard is adopted, or at the
  588  time the state becomes a compacting state.
  589         2. Find that the uniform standard does not provide
  590  reasonable protections to the citizens of the state, given the
  591  conditions in the state.
  592         (b) The commissioner shall make specific findings of fact
  593  and conclusions of law, based on a preponderance of the
  594  evidence, detailing the conditions in the state which warrant a
  595  departure from the uniform standard and determining that the
  596  uniform standard would not reasonably protect the citizens of
  597  the state. The commissioner must consider and balance the
  598  following factors and find that the conditions in the state and
  599  needs of the citizens of the state outweigh:
  600         1. The intent of the Legislature to participate in, and the
  601  benefits of, an interstate agreement to establish national
  602  uniform consumer protections for the products subject to this
  603  compact.
  604         2. The presumption that a uniform standard adopted by the
  605  commission provides reasonable protections to consumers of the
  606  relevant product.
  608  Notwithstanding this subsection, a compacting state may, at the
  609  time of its enactment of this compact, prospectively opt out of
  610  all uniform standards involving long-term care insurance
  611  products by expressly providing for such opt out in the enacted
  612  compact, and such an opt out shall not be treated as a material
  613  variance in the offer or acceptance of any state to participate
  614  in this compact. Such an opt out shall be effective at the time
  615  of enactment of this compact by the compacting state and shall
  616  apply to all existing uniform standards involving long-term care
  617  insurance products and those subsequently adopted.
  618         (5) Effect of opting out.—If a compacting state elects to
  619  opt out of a uniform standard, the uniform standard shall remain
  620  applicable in the compacting state electing to opt out until
  621  such time the opt out legislation is enacted into law or the
  622  regulation opting out becomes effective. Once the opt out of a
  623  uniform standard by a compacting state becomes effective as
  624  provided under the laws of that state, the uniform standard
  625  shall have no further force and effect in that state unless and
  626  until the legislation or regulation implementing the opt out is
  627  repealed or otherwise becomes ineffective under the laws of the
  628  state. If a compacting state opts out of a uniform standard
  629  after the uniform standard has been made effective in that
  630  state, the opt out shall have the same prospective effect as
  631  provided under Article XIV for withdrawals.
  632         (6) Stay of uniform standard.—If a compacting state has
  633  formally initiated the process of opting out of a uniform
  634  standard by regulation, and while the regulatory opt out is
  635  pending, the compacting state may petition the commission, at
  636  least 15 days before the effective date of the uniform standard,
  637  to stay the effectiveness of the uniform standard in that state.
  638  The commission may grant a stay if the commission determines the
  639  regulatory opt out is being pursued in a reasonable manner and
  640  there is a likelihood of success. If a stay is granted or
  641  extended by the commission, the stay or extension thereof may
  642  postpone the effective date by up to 90 days, unless
  643  affirmatively extended by the commission; provided a stay may
  644  not be permitted to remain in effect for more than 1 year unless
  645  the compacting state can show extraordinary circumstances which
  646  warrant a continuance of the stay, including, but not limited
  647  to, the existence of a legal challenge which prevents the
  648  compacting state from opting out. A stay may be terminated by
  649  the commission upon notice that the rulemaking process has been
  650  terminated.
  651         (7) Judicial review.—Not later than 30 days after a rule or
  652  operating procedure is adopted, any person may file a petition
  653  for judicial review of the rule or operating procedure; provided
  654  the filing of such a petition shall not stay or otherwise
  655  prevent the rule or operating procedure from becoming effective
  656  unless the court finds that the petitioner has a substantial
  657  likelihood of success. The court shall give deference to the
  658  actions of the commission consistent with applicable law and
  659  shall not find the rule or operating procedure to be unlawful if
  660  the rule or operating procedure represents a reasonable exercise
  661  of the commission’s authority.
  663                            Article VIII                           
  666         (1) The commission shall adopt rules establishing
  667  conditions and procedures for public inspection and copying of
  668  its information and official records, except such information
  669  and records involving the privacy of individuals and insurers’
  670  trade secrets. The commission may adopt additional rules under
  671  which the commission may make available to federal and state
  672  agencies, including law enforcement agencies, records and
  673  information otherwise exempt from disclosure and may enter into
  674  agreements with such agencies to receive or exchange information
  675  or records subject to nondisclosure and confidentiality
  676  provisions.
  677         (2) Except as to privileged records, data, and information,
  678  the laws of any compacting state pertaining to confidentiality
  679  or nondisclosure shall not relieve any compacting state
  680  commissioner of the duty to disclose any relevant records, data,
  681  or information to the commission; provided disclosure to the
  682  commission shall not be deemed to waive or otherwise affect any
  683  confidentiality requirement; and further provided, except as
  684  otherwise expressly provided in this compact, the commission
  685  shall not be subject to the compacting state’s laws pertaining
  686  to confidentiality and nondisclosure with respect to records,
  687  data, and information in its possession. Confidential
  688  information of the commission shall remain confidential after
  689  such information is provided to any commissioner; however, all
  690  requests from the public to inspect or copy records, data, or
  691  information of the commission received by and in the possession
  692  of the Office of Insurance Regulation shall be subject to
  693  chapter 119, Florida Statutes.
  694         (3) The commission shall monitor compacting states for
  695  compliance with duly adopted bylaws, rules, uniform standards,
  696  and operating procedures. The commission shall notify any
  697  noncomplying compacting state in writing of its noncompliance
  698  with commission bylaws, rules, or operating procedures. If a
  699  noncomplying compacting state fails to remedy its noncompliance
  700  within the time specified in the notice of noncompliance, the
  701  compacting state shall be deemed to be in default as set forth
  702  in Article XIV.
  703         (4) The commissioner of any state in which an insurer is
  704  authorized to do business or is conducting the business of
  705  insurance shall continue to exercise his or her authority to
  706  oversee the market regulation of the activities of the insurer
  707  in accordance with the provisions of the state’s law. The
  708  commissioner’s enforcement of compliance with the compact is
  709  governed by the following provisions:
  710         (a) With respect to the commissioner’s market regulation of
  711  a product or advertisement that is approved or certified to the
  712  commission, the content of the product or advertisement shall
  713  not constitute a violation of the provisions, standards, or
  714  requirements of the compact except upon a final order of the
  715  commission, issued at the request of a commissioner after prior
  716  notice to the insurer and an opportunity for hearing before the
  717  commission.
  718         (b) Before a commissioner may bring an action for violation
  719  of any provision, standard, or requirement of the compact
  720  relating to the content of an advertisement not approved or
  721  certified to the commission, the commission, or an authorized
  722  commission officer or employee, must authorize the action.
  723  However, authorization pursuant to this paragraph does not
  724  require notice to the insurer, opportunity for hearing, or
  725  disclosure of requests for authorization or records of the
  726  commission’s action on such requests.
  728                             Article IX                            
  730         DISPUTE RESOLUTION.—The commission shall attempt, upon the
  731  request of a member, to resolve any disputes or other issues
  732  that are subject to this compact and which may arise between two
  733  or more compacting states, or between compacting states and
  734  noncompacting states, and the commission shall adopt an
  735  operating procedure providing for resolution of such disputes.
  737                              Article X                            
  740         (1) Insurers and third-party filers seeking to have a
  741  product approved by the commission shall file the product with
  742  and pay applicable filing fees to the commission. Nothing in
  743  this compact shall be construed to restrict or otherwise prevent
  744  an insurer from filing its product with the insurance department
  745  in any state in which the insurer is licensed to conduct the
  746  business of insurance and such filing shall be subject to the
  747  laws of the states where filed.
  748         (2) The commission shall establish appropriate filing and
  749  review processes and procedures pursuant to commission rules and
  750  operating procedures. Notwithstanding any provision of this
  751  article, the commission shall adopt rules to establish
  752  conditions and procedures under which the commission will
  753  provide public access to product filing information. In
  754  establishing such rules, the commission shall consider the
  755  interests of the public in having access to such information, as
  756  well as protection of personal medical and financial information
  757  and trade secrets, that may be contained in a product filing or
  758  supporting information.
  759         (3) Any product approved by the commission may be sold or
  760  otherwise issued in those compacting states for which the
  761  insurer is legally authorized to do business.
  763                             Article XI                            
  766         (1) Not later than 30 days after the commission has given
  767  notice of a disapproved product or advertisement filed with the
  768  commission, the insurer or third-party filer whose filing was
  769  disapproved may appeal the determination to a review panel
  770  appointed by the commission. The commission shall adopt rules to
  771  establish procedures for appointing such review panels and
  772  provide for notice and hearing. An allegation that the
  773  commission, in disapproving a product or advertisement filed
  774  with the commission, acted arbitrarily, capriciously, or in a
  775  manner that is an abuse of discretion or otherwise not in
  776  accordance with the law, is subject to judicial review in
  777  accordance with subsection (4) of Article III.
  778         (2) The commission shall have authority to monitor, review,
  779  and reconsider products and advertisement subsequent to their
  780  filing or approval upon a finding that the product does not meet
  781  the relevant uniform standard. Where appropriate, the commission
  782  may withdraw or modify its approval after proper notice and
  783  hearing, subject to the appeal process in subsection (1).
  785                             Article XII                           
  787         FINANCE.—
  788         (1) The commission shall pay or provide for the payment of
  789  the reasonable expenses of the commission’s establishment and
  790  organization. To fund the cost of the commission’s initial
  791  operations, the commission may accept contributions and other
  792  forms of funding from the National Association of Insurance
  793  Commissioners, compacting states, and other sources.
  794  Contributions and other forms of funding from other sources
  795  shall be of such a nature that the independence of the
  796  commission concerning the performance of commission duties shall
  797  not be compromised.
  798         (2) The commission shall collect a filing fee from each
  799  insurer and third-party filer filing a product with the
  800  commission to cover the cost of the operations and activities of
  801  the commission and its staff in a total amount sufficient to
  802  cover the commission’s annual budget.
  803         (3) The commission’s budget for a fiscal year shall not be
  804  approved until the budget has been subject to notice and comment
  805  as set forth in Article VII.
  806         (4) The commission shall be exempt from all taxation in and
  807  by the compacting states.
  808         (5) The commission shall not pledge the credit of any
  809  compacting state, except by and with the appropriate legal
  810  authority of that compacting state.
  811         (6) The commission shall keep complete and accurate
  812  accounts of all its internal receipts, including grants and
  813  donations, and disbursements of all funds under its control. The
  814  internal financial accounts of the commission shall be subject
  815  to the accounting procedures established under its bylaws. The
  816  financial accounts and reports including the system of internal
  817  controls and procedures of the commission shall be audited
  818  annually by an independent certified public accountant. Upon the
  819  determination of the commission, but no less frequently than
  820  every 3 years, the review of the independent auditor shall
  821  include a management and performance audit of the commission.
  822  The commission shall make an annual report to the Governor and
  823  the presiding officers of the Legislature of the compacting
  824  states, which shall include a report of the independent audit.
  825  The commission’s internal accounts shall not be confidential and
  826  such materials may be shared with the commissioner of any
  827  compacting state upon request; provided any work papers related
  828  to any internal or independent audit and any information
  829  regarding the privacy of individuals and insurers’ proprietary
  830  information, including trade secrets, shall remain confidential.
  831         (7) No compacting state shall have any claim to or
  832  ownership of any property held by or vested in the commission or
  833  to any commission funds held pursuant to the provisions of this
  834  compact.
  836                            Article XIII                           
  839         (1) Any state is eligible to become a compacting state.
  840         (2) The compact shall become effective and binding upon
  841  legislative enactment of the compact into law by two compacting
  842  states; provided the commission shall become effective for
  843  purposes of adopting uniform standards for, reviewing, and
  844  giving approval or disapproval of, products filed with the
  845  commission that satisfy applicable uniform standards only after
  846  26 states are compacting states or, alternatively, by states
  847  representing greater than 40 percent of the premium volume for
  848  life insurance, annuity, disability income, and long-term care
  849  insurance products, based on records of the National Association
  850  of Insurance Commissioners for the prior year. Thereafter, the
  851  compact shall become effective and binding as to any other
  852  compacting state upon enactment of the compact into law by that
  853  state.
  854         (3) Amendments to the compact may be proposed by the
  855  commission for enactment by the compacting states. No amendment
  856  shall become effective and binding upon the commission and the
  857  compacting states unless and until all compacting states enact
  858  the amendment into law.
  860                             Article XIV                           
  863         (1) Withdrawal.—
  864         (a) Once effective, the compact shall continue in force and
  865  remain binding upon each and every compacting state; provided a
  866  compacting state may withdraw from the compact by enacting a law
  867  specifically repealing the law which enacted the compact into
  868  law.
  869         (b) The effective date of withdrawal is the effective date
  870  of the repealing law. However, the withdrawal shall not apply to
  871  any product filings approved or self-certified, or any
  872  advertisement of such products, on the date the repealing law
  873  becomes effective, except by mutual agreement of the commission
  874  and the withdrawing state unless the approval is rescinded by
  875  the withdrawing state as provided in paragraph (e).
  876         (c) The commissioner of the withdrawing state shall
  877  immediately notify the management committee in writing upon the
  878  introduction of legislation repealing this compact in the
  879  withdrawing state.
  880         (d) The commission shall notify the other compacting states
  881  of the introduction of such legislation within 10 days after the
  882  commission’s receipt of notice of such legislation.
  883         (e) The withdrawing state is responsible for all
  884  obligations, duties, and liabilities incurred through the
  885  effective date of withdrawal, including any obligations, the
  886  performance of which extend beyond the effective date of
  887  withdrawal, except to the extent those obligations may have been
  888  released or relinquished by mutual agreement of the commission
  889  and the withdrawing state. The commission’s approval of products
  890  and advertisement prior to the effective date of withdrawal
  891  shall continue to be effective and be given full force and
  892  effect in the withdrawing state unless formally rescinded by the
  893  withdrawing state in the same manner as provided by the laws of
  894  the withdrawing state for the prospective disapproval of
  895  products or advertisement previously approved under state law.
  896         (f) Reinstatement following withdrawal of any compacting
  897  state shall occur upon the effective date of the withdrawing
  898  state reenacting the compact.
  899         (2) Default.—
  900         (a) If the commission determines that any compacting state
  901  has at any time defaulted in the performance of any of its
  902  obligations or responsibilities under this compact, the bylaws,
  903  or duly adopted rules or operating procedures, after notice and
  904  hearing as set forth in the bylaws, all rights, privileges, and
  905  benefits conferred by this compact on the defaulting state shall
  906  be suspended from the effective date of default as fixed by the
  907  commission. The grounds for default include, but are not limited
  908  to, failure of a compacting state to perform its obligations or
  909  responsibilities, and any other grounds designated in commission
  910  rules. The commission shall immediately notify the defaulting
  911  state in writing of the defaulting state’s suspension pending a
  912  cure of the default. The commission shall stipulate the
  913  conditions and the time period within which the defaulting state
  914  must cure its default. If the defaulting state fails to cure the
  915  default within the time period specified by the commission, the
  916  defaulting state shall be terminated from the compact and all
  917  rights, privileges, and benefits conferred by this compact shall
  918  be terminated from the effective date of termination.
  919         (b) Product approvals by the commission or product self
  920  certifications, or any advertisement in connection with such
  921  product that are in force on the effective date of termination
  922  shall remain in force in the defaulting state in the same manner
  923  as if the defaulting state had withdrawn voluntarily pursuant to
  924  subsection (1).
  925         (c) Reinstatement following termination of any compacting
  926  state requires a reenactment of the compact.
  927         (3) Dissolution of compact.—
  928         (a) The compact dissolves effective upon the date of the
  929  withdrawal or default of the compacting state which reduces
  930  membership in the compact to a single compacting state.
  931         (b) Upon the dissolution of this compact, the compact
  932  becomes null and void and shall be of no further force or effect
  933  and the business and affairs of the commission shall be
  934  concluded and any surplus funds shall be distributed in
  935  accordance with the bylaws.
  937                             Article XV                            
  940         (1) The provisions of this compact are severable and if any
  941  phrase, clause, sentence, or provision is deemed unenforceable,
  942  the remaining provisions of the compact shall be enforceable.
  943         (2) The provisions of this compact shall be liberally
  944  construed to effectuate its purposes.
  946                             Article XVI                           
  949         (1) Binding effect of this compact.—
  950         (a) All lawful actions of the commission, including all
  951  rules and operating procedures adopted by the commission, are
  952  binding upon the compacting states.
  953         (b) All agreements between the commission and the
  954  compacting states are binding in accordance with their terms.
  955         (c) Upon the request of a party to a conflict over the
  956  meaning or interpretation of commission actions, and upon a
  957  majority vote of the compacting states, the commission may issue
  958  advisory opinions regarding the meaning or interpretation in
  959  dispute.
  960         (d) If any provision of this compact exceeds the
  961  constitutional limits imposed on the Legislature of any
  962  compacting state, the obligations, duties, powers, or
  963  jurisdiction sought to be conferred by that provision upon the
  964  commission shall be ineffective as to that compacting state and
  965  those obligations, duties, powers, or jurisdiction shall remain
  966  in the compacting state and shall be exercised by the agency of
  967  such state to which those obligations, duties, powers, or
  968  jurisdiction are delegated by law in effect at the time this
  969  compact becomes effective.
  970         (2) Other laws.—
  971         (a) Nothing in this compact prevents the enforcement of any
  972  other law of a compacting state, except as provided in paragraph
  973  (b).
  974         (b) For any product approved or certified to the
  975  commission, the rules, uniform standards, and any other
  976  requirements of the commission shall constitute the exclusive
  977  provisions applicable to the content, approval, and
  978  certification of such products. For advertisement that is
  979  subject to the commission’s authority, any rule, uniform
  980  standard, or other requirement of the commission which governs
  981  the content of the advertisement shall constitute the exclusive
  982  provision that a commissioner may apply to the content of the
  983  advertisement. Notwithstanding this paragraph, no action taken
  984  by the commission shall abrogate or restrict:
  985         1. The access of any person to state courts;
  986         2. Remedies available under state law related to breach of
  987  contract, tort, or other laws not specifically directed to the
  988  content of the product;
  989         3. State law relating to the construction of insurance
  990  contracts; or
  991         4. The authority of the attorney general of the state,
  992  including, but not limited to, maintaining any actions or
  993  proceedings, as authorized by law.
  994         (c) All insurance products filed with individual states
  995  shall be subject to the laws of those states.
  996         Section 3. Pursuant to Article VII of the compact
  997  authorized in this act, the State of Florida elects to
  998  prospectively opt out of all uniform standards contained in the
  999  compact involving long-term care insurance products, and such an
 1000  opt out may not be treated as a material variance in the offer
 1001  or acceptance of this state to participate in the compact.
 1002         Section 4. The sum of $500,000 is appropriated to the
 1003  Office of Insurance Regulation from the Insurance Regulatory
 1004  Trust Fund to implement this act.
 1005         Section 5. This act shall take effect October 1, 2012.