40-5301. Interstate insurance product regulation compact.
40-5301
40-5301. Interstate insurance product regulationcompact.This act may be cited as the Interstate Insurance ProductRegulation Compact.
The purposes of this Compact are, through means of joint and cooperative actionamongthe Compacting States:
1. To promote and protect the interest of consumers of individual and groupannuity, lifeinsurance, disability income and long-term care insurance products;
2. To develop uniform standards for insurance products covered under theCompact;
3. To establish a central clearinghouse to receive and provide prompt reviewofinsuranceproducts covered under the Compact and in certain cases, advertisements relatedthereto,submitted by insurers authorized to do business in one or more CompactingStates;
4. To give appropriate regulatory approval to those product filings andadvertisementssatisfying the applicable uniform standard;
5. To improve coordination of regulatory resources and expertise betweenstateinsurancedepartments regarding the setting of uniform standards and review of insuranceproducts coveredunder the Compact;
6. To create the Interstate Insurance Product Regulation Commission; and
7. To perform these and such other related functions as may be consistentwiththe stateregulation of the business of insurance.
For purposes of this Compact:
1. "Advertisement" means any material designed to create public interest in aProduct, orinduce the public to purchase, increase, modify, reinstate, borrow on,surrender, replace or retaina policy, as more specifically defined in the Rules and Operating Procedures ofthe Commission.
2. "Bylaws" mean those bylaws established by the Commission for itsgovernance,or fordirecting or controlling the Commission's actions or conduct.
3. "Compacting State" means any State which has enacted this Compactlegislation andwhich has not withdrawn pursuant to Article XIV, Section 1, or been terminatedpursuant toArticle XIV, Section 2.
4. "Commission" means the "Interstate Insurance Product RegulationCommission"established by this Compact.
5. "Commissioner" means the chief insurance regulatory official of a Stateincluding, butnot limited to commissioner, superintendent, director or administrator.
6. "Domiciliary State" means the state in which an Insurer is incorporated ororganized;or, in the case of an alien Insurer, its state of entry.
7. "Insurer" means any entity licensed by a State to issue contracts ofinsurance for any ofthe lines of insurance covered by this Act.
8. "Member" means the person chosen by a Compacting State as itsrepresentativeto theCommission, or his or her designee.
9. "Non-compacting State" means any State which is not at the time aCompactingState.
10. "Operating Procedures" mean procedures promulgated by the Commissionimplementing a Rule, Uniform Standard or a provision of this Compact.
11. "Product" means the form of a policy or contract, including anyapplication,endorsement, or related form which is attached to and made a part of the policyor contract, andany evidence of coverage or certificate, for an individual or group annuity,life insurance,disability income or long-term care insurance product that an Insurer isauthorized to issue.
12. "Rule" means a statement of general or particular applicability andfutureeffectpromulgated by the Commission, including a Uniform Standard developed pursuantto ArticleVII of this Compact, designed to implement, interpret, or prescribe law orpolicy or describingthe organization, procedure, or practice requirements of the Commission, whichshall have theforce and effect of law in the Compacting States.
13. "State" means any state, district or territory of the United States ofAmerica.
14. "Third-Party Filer" means an entity that submits a Product filing to theCommissionon behalf of an Insurer.
15. "Uniform Standard" means a standard adopted by the Commission for aProductline,pursuant to Article VII of this Compact, and shall include all of the Productrequirements inaggregate; provided, that each Uniform Standard shall be construed, whetherexpress or implied,to prohibit the use of any inconsistent, misleading or ambiguous provisions ina Product and theform of the Product made available to the public shall not be unfair,inequitable or against publicpolicy as determined by the Commission.
1. The Compacting States hereby create and establish a joint public agencyknown as the"Interstate Insurance Product Regulation Commission." Pursuant to Article IV,the Commissionwill have the power to develop Uniform Standards for Product lines, receive andprovide promptreview of Products filed therewith, and give approval to those Product filingssatisfyingapplicable Uniform Standards; provided, it is not intended for the Commissionto be theexclusive entity for receipt and review of insurance product filings. Nothingherein shall prohibitany Insurer from filing its product in any State wherein the Insurer islicensed to conduct thebusiness of insurance; and any such filing shall be subject to the laws of theState where filed.
2. The Commission is a body corporate and politic, and an instrumentality oftheCompacting States.
3. The Commission is solely responsible for its liabilities except asotherwisespecificallyprovided in this Compact.
4. Venue is proper and judicial proceedings by or against the Commissionshallbebrought solely and exclusively in a Court of competent jurisdiction where theprincipal office ofthe Commission is located.
The Commission shall have the following powers:
1. To promulgate Rules, pursuant to Article VII of this Compact, which shallhave theforce and effect of law and shall be binding in the Compacting States to theextent and in themanner provided in this Compact;
2. To exercise its rulemaking authority and establish reasonable UniformStandards for Products covered under the Compact, and Advertisement relatedthereto, which shall have theforce and effect of law and shall be binding in the Compacting States, but onlyfor those Productsfiled with the Commission, provided, that a Compacting State shall have theright to opt out ofsuch Uniform Standard pursuant to Article VII, to the extent and in the mannerprovided in thisCompact, and, provided further, that any Uniform Standard established by theCommission forlong-term care insurance products may provide the same or greater protectionsfor consumers as,but shall not provide less than, those protections set forth in the NationalAssociation ofInsurance Commissioners, Long-Term Care Insurance Model Act and Long-Term CareInsuranceModel Regulation, respectively, adopted as of 2001. The Commission shallconsider whetherany subsequent amendments to the NAIC Long-Term Care Insurance Model Act orLong-TermCare Insurance Model Regulation adopted by the NAIC require amending of theUniformStandards established by the Commission for long-term care insurance products;
3. To receive and review in an expeditious manner Products filed with theCommission,and rate filings for disability income and long-term care insurance Products,and give approval ofthose Products and rate filings that satisfy the applicable Uniform Standard,where such approvalshall have the force and effect of law and be binding on the Compacting Statesto the extent andin the manner provided in the Compact;
4. To receive and review in an expeditious manner Advertisement relating tolong-termcare insurance products for which Uniform Standards have been adopted by theCommission,and give approval to all Advertisement that satisfies the applicable UniformStandard. For anyproduct covered under this Compact, other than long-term care insuranceproducts, theCommission shall have the authority to require an insurer to submit all or anypart of itsAdvertisement with respect to that product for review or approval prior to use,if the Commissiondetermines that the nature of the product is such that an Advertisement of theproduct could havethe capacity or tendency to mislead the public. The actions of Commission asprovided in thissection shall have the force and effect of law and shall be binding in theCompacting States to theextent and in the manner provided in the Compact;
5. To exercise its rulemaking authority and designate Products andAdvertisement thatmay be subject to a self-certification process without the need for priorapproval by theCommission;
6. To promulgate Operating Procedures, pursuant to Article VII of thisCompact,whichshall be binding in the Compacting States to the extent and in the mannerprovided in thisCompact;
7. To bring and prosecute legal proceedings or actions in its name as theCommission;provided, that the standing of any state insurance department to sue or be suedunder applicablelaw shall not be affected;
8. To issue subpoenas requiring the attendance and testimony of witnesses andtheproduction of evidence;
9. To establish and maintain offices;
10. To purchase and maintain insurance and bonds;
11. To borrow, accept or contract for services of personnel, including, butnotlimited to,employees of a Compacting State;
12. To hire employees, professionals or specialists, and elect or appointofficers, and tofix their compensation, define their duties and give them appropriate authorityto carry out thepurposes of the Compact, and determine their qualifications; and to establishthe Commission's personnel policies and programs relating to, among otherthings, conflicts of interest, rates ofcompensation and qualifications of personnel;
13. To accept any and all appropriate donations and grants of money,equipment,supplies, materials and services, and to receive, utilize and dispose of thesame; provided that atall times the Commission shall strive to avoid any appearance of impropriety;
14. To lease, purchase, accept appropriate gifts or donations of, orotherwiseto own,hold, improve or use, any property, real, personal or mixed; provided that atall times theCommission shall strive to avoid any appearance of impropriety;
15. To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwisedispose ofany property, real, personal or mixed;
16. To remit filing fees to Compacting States as may be set forth in theBylaws, Rules orOperating Procedures;
17. To enforce compliance by Compacting States with Rules, Uniform Standards,Operating Procedures and Bylaws;
18. To provide for dispute resolution among Compacting States;
19. To advise Compacting States on issues relating to Insurers domiciled ordoingbusiness in Non-compacting jurisdictions, consistent with the purposes of thisCompact;
20. To provide advice and training to those personnel in state insurancedepartmentsresponsible for product review, and to be a resource for state insurancedepartments;
21. To establish a budget and make expenditures;
22. To borrow money;
23. To appoint committees, including advisory committees comprising Members,stateinsurance regulators, state legislators or their representatives, insuranceindustry and consumerrepresentatives, and such other interested persons as may be designated in theBylaws;
24. To provide and receive information from, and to cooperate with lawenforcementagencies;
25. To adopt and use a corporate seal; and
26. To perform such other functions as may be necessary or appropriate toachieve thepurposes of this Compact consistent with the state regulation of the businessof insurance.
1. Membership, Voting and Bylaws
a. Each Compacting State shall have and be limited to one Member. EachMembershallbe qualified to serve in that capacity pursuant to applicable law of theCompacting State. AnyMember may be removed or suspended from office as provided by the law of theState fromwhich he or she shall be appointed. Any vacancy occurring in the Commissionshall be filled inaccordance with the laws of the Compacting State wherein the vacancy exists. Nothing hereinshall be construed to affect the manner in which a Compacting State determinesthe election orappointment and qualification of its own Commissioner.
b. Each Member shall be entitled to one vote and shall have an opportunity toparticipatein the governance of the Commission in accordance with the Bylaws.Notwithstanding anyprovision herein to the contrary, no action of the Commission with respect tothe promulgation ofa Uniform Standard shall be effective unless two-thirds (2/3) of the Membersvote in favorthereof.
c. The Commission shall, by a majority of the Members, prescribe Bylaws togovern itsconduct as may be necessary or appropriate to carry out the purposes, andexercise the powers, ofthe Compact, including, but not limited to:
i. establishing the fiscal year of the Commission;
ii. providing reasonable procedures for appointing and electing members,aswellas holding meetings, of the Management Committee;
iii. providing reasonable standards and procedures: (i) for theestablishment andmeetings of other committees, and (ii) governing any general or specificdelegation of anyauthority or function of the Commission;
iv. providing reasonable procedures for calling and conducting meetings oftheCommission that consists of a majority of Commission members, ensuringreasonable advancenotice of each such meeting, and providing for the right of citizens to attendeach such meetingwith enumerated exceptions designed to protect the public's interest, theprivacy of individuals,and insurers, proprietary information, including trade secrets. The Commissionmay meet incamera only after a majority of the entire membership votes to close a meetingen toto or in part.As soon as practicable, the Commission must make public (i) a copy of the voteto close themeeting revealing the vote of each Member with no proxy votes allowed, and (ii)votes takenduring such meeting;
v. establishing the titles, duties and authority and reasonable proceduresfor theelection of the officers of the Commission;
vi. providing reasonable standards and procedures for the establishment ofthepersonnel policies and programs of the Commission. Notwithstanding any civilservice or othersimilar laws of any Compacting State, the Bylaws shall exclusively govern thepersonnel policiesand programs of the Commission;
vii. promulgating a code of ethics to address permissible and prohibitedactivitiesof commission members and employees; and
viii. providing a mechanism for winding up the operations of theCommissionandthe equitable disposition of any surplus funds that may exist after thetermination of the Compactafter the payment and/or reserving of all of its debts and obligations.
d. The Commission shall publish its bylaws in a convenient form and file acopythereofand a copy of any amendment thereto, with the appropriate agency or officer ineach of theCompacting States.
2. Management Committee, Officers and Personnel
a. A Management Committee comprising no more than fourteen (14) members shallbeestablished as follows:
(i) One (1) member from each of the six (6) Compacting States with thelargestpremium volume for individual and group annuities, life, disability income andlong-term careinsurance products, determined from the records of the NAIC for the prior year;
(ii) Four (4) members from those Compacting States with at least two percent(2%) of the market based on the premium volume described above, other thanthe six (6)Compacting States with the largest premium volume, selected on a rotating basisas provided inthe Bylaws, and;
(iii) Four (4) members from those Compacting States with less than twopercent (2%) of the market, based on the premium volume described above, withone (1) selected fromeach of the four (4) zone regions of the NAIC as provided in the Bylaws.
b. The Management Committee shall have such authority and duties as may beset forth in the Bylaws, including but not limited to:
i. managing the affairs of the Commission in a manner consistent with theBylawsand purposes of the Commission;
ii. establishing and overseeing an organizational structure within, andappropriateprocedures for, the Commission to provide for the creation of Uniform Standardsand otherRules, receipt and review of product filings, administrative and technicalsupport functions,review of decisions regarding the disapproval of a product filing, and thereview of electionsmade by a Compacting State to opt out of a Uniform Standard; provided that aUniformStandard shall not be submitted to the Compacting States for adoption unlessapproved by two-thirds (2/3) of the members of the Management Committee;
iii. overseeing the offices of the Commission; and
iv. planning, implementing, and coordinating communications and activitieswithother state, federal and local government organizations in order to advance thegoals of theCommission.
c. The Commission shall elect annually officers from the ManagementCommittee,witheach having such authority and duties, as may be specified in the Bylaws.
d. The Management Committee may, subject to the approval of the Commission,appointor retain an executive director for such period, upon such terms and conditionsand for suchcompensation as the Commission may deem appropriate. The executive directorshall serve assecretary to the Commission, but shall not be a Member of the Commission. Theexecutivedirector shall hire and supervise such other staff as may be authorized by theCommission.
3. Legislative and Advisory Committees
a. A legislative committee comprising state legislators or their designeesshall beestablished to monitor the operations of, and make recommendations to, theCommission,including the Management Committee; provided that the manner of selection andterm of anylegislative committee member shall be as set forth in the Bylaws. Prior to theadoption by theCommission of any Uniform Standard, revision to the Bylaws, annual budget orother significantmatter as may be provided in the Bylaws, the Management Committee shall consultwith andreport to the legislative committee.
b. The Commission shall establish two (2) advisory committees, one of whichshallcomprise consumer representatives independent of the insurance industry, andthe othercomprising insurance industry representatives.
c. The Commission may establish additional advisory committees as its Bylawsmayprovide for the carrying out of its functions.
4. Corporate Records of the Commission
The Commission shall maintain its corporate books and records in accordancewith theBylaws.
5. Qualified Immunity, Defense and Indemnification
a. The Members, officers, executive director, employees and representativesoftheCommission shall be immune from suit and liability, either personally or intheir officialcapacity, for any claim for damage to or loss of property or personal injury orother civil liabilitycaused by or arising out of any actual or alleged act, error or omission thatoccurred, or that theperson against whom the claim is made had a reasonable basis for believingoccurred within thescope of Commission employment, duties or responsibilities; provided, thatnothing in thisparagraph shall be construed to protect any such person from suit and/orliability for any damage,loss, injury or liability caused by the intentional or willful and wantonmisconduct of that person.
b. The Commission shall defend any Member, officer, executive director,employee orrepresentative of the Commission in any civil action seeking to imposeliability arising out of anyactual or alleged act, error or omission that occurred within the scope ofCommissionemployment, duties or responsibilities, or that the person against whom theclaim is made had areasonable basis for believing occurred within the scope of Commissionemployment, duties orresponsibilities; provided, that nothing herein shall be construed to prohibitthat person fromretaining his or her own counsel; and provided further, that the actual oralleged act, error oromission did not result from that person's intentional or willful and wantonmisconduct.
c. The Commission shall indemnify and hold harmless any Member, officer,executivedirector, employee or representative of the Commission for the amount of anysettlement orjudgment obtained against that person arising out of any actual or alleged act,error or omissionthat occurred within the scope of Commission employment, duties orresponsibilities, or thatsuch person had a reasonable basis for believing occurred within the scope ofCommissionemployment, duties or responsibilities, provided, that the actual or allegedact, error or omissiondid not result from the intentional or willful and wanton misconduct of thatperson.
1. The Commission shall meet and take such actions as are consistent with theprovisionsof this Compact and the Bylaws.
2. Each Member of the Commission shall have the right and power to cast avoteto whichthat Compacting State is entitled and to participate in the business andaffairs of the Commission.A Member shall vote in person or by such other means as provided in the Bylaws.The Bylawsmay provide for Members' participation in meetings by telephone or other meansofcommunication.
3. The Commission shall meet at least once during each calendar year. Additionalmeetings shall be held as set forth in the Bylaws.
1. Rulemaking Authority. The Commission shall promulgate reasonable Rules,includingUniform Standards, and Operating Procedures in order to effectively andefficiently achieve thepurposes of this Compact. Notwithstanding the foregoing, in the event theCommission exercises its rulemaking authority in a manner that is beyond thescope of the purposes of thisAct, or the powers granted hereunder, then such an action by the Commissionshall be invalidand have no force and effect.
2. Rulemaking Procedure. Rules and Operating Procedures shall be madepursuantto arulemaking process that conforms to the Model State Administrative ProcedureAct of 1981 asamended, as may be appropriate to the operations of the Commission. Before theCommissionadopts a Uniform Standard, the Commission shall give written notice to therelevant statelegislative committee(s) in each Compacting State responsible for insuranceissues of itsintention to adopt the Uniform Standard. The Commission in adopting a UniformStandard shallconsider fully all submitted materials and issue a concise explanation of itsdecision.
3. Effective Date and Opt Out of a Uniform Standard. A Uniform Standardshallbecomeeffective ninety (90) days after its promulgation by the Commission or suchlater date as theCommission may determine; provided, however, that a Compacting State may optout of aUniform Standard as provided in this Article. "Opt out" shall be defined as anyaction by aCompacting State to decline to adopt or participate in a promulgated UniformStandard. Allother Rules and Operating Procedures, and amendments thereto, shall becomeeffective as of thedate specified in each Rule, Operating Procedure or amendment.
4. Opt Out Procedure. A Compacting State may opt out of a Uniform Standard,either bylegislation or regulation duly promulgated by the Insurance Department underthe CompactingState's Administrative Procedure Act. If a Compacting State elects to opt outof a UniformStandard by regulation, it must (a) give written notice to the Commission nolater than ten (10)business days after the Uniform Standard is promulgated, or at the time theState becomes aCompacting State and (b) find that the Uniform Standard does not providereasonable protectionsto the citizens of the State, given the conditions in the State. TheCommissioner shall makespecific findings of fact and conclusions of law, based on a preponderance ofthe evidence,detailing the conditions in the State which warrant a departure from theUniform Standard anddetermining that the Uniform Standard would not reasonably protect the citizens of the State.The Commissioner must consider and balance the following factors and find that the conditionsin the State and needs of the citizens of the State outweigh: (i) the intent of the legislature toparticipate in, and the benefits of, an interstate agreement to establish national uniform consumerprotections for the Products subject to this Act; and (ii) the presumption that a Uniform Standardadopted by the Commission provides reasonable protections to consumers of the relevantProduct.
Notwithstanding the foregoing, a Compacting State may, at the time of its enactment ofthis Compact, prospectively opt out of all Uniform Standards involving long-term care insuranceproducts by expressly providing for such opt out in the enacted Compact, and such an opt outshall not be treated as a material variance in the offer or acceptance of any State to participate inthis Compact. Such an opt out shall be effective at the time of enactment of this Compact by theCompacting State and shall apply to all existing Uniform Standards involving long-term careinsurance products and those subsequently promulgated.
5. Effect of Opt Out. If a Compacting State elects to opt out of a UniformStandard, theUniform Standard shall remain applicable in the Compacting State electing toopt out until suchtime the opt out legislation is enacted into law or the regulation opting outbecomes effective.
Once the opt out of a Uniform Standard by a Compacting State becomes effectiveasprovided under the laws of that State, the Uniform Standard shall have nofurther force and effect in that State unless and until the legislation orregulation implementing the opt out is repealed orotherwise becomes ineffective under the laws of the State. If a CompactingState opts out of aUniform Standard after the Uniform Standard has been made effective in thatState, the opt outshall have the same prospective effect as provided under Article XIV forwithdrawals.
6. Stay of Uniform Standard. If a Compacting State has formally initiatedthe process ofopting out of a Uniform Standard by regulation, and while the regulatory optout is pending, theCompacting State may petition the Commission, at least fifteen (15) days beforethe effectivedate of the Uniform Standard, to stay the effectiveness of the Uniform Standardin that State.The Commission may grant a stay if it determines the regulatory opt out isbeing pursued in areasonable manner and there is a likelihood of success. If a stay is grantedor extended by theCommission, the stay or extension thereof may postpone the effective date by upto ninety (90)days, unless affirmatively extended by the Commission; provided, a stay maynot be permitted toremain in effect for more than one (1) year unless the Compacting State canshow extraordinarycircumstances which warrant a continuance of the stay, including, but notlimited to, theexistence of a legal challenge which prevents the Compacting State from optingout. A stay maybe terminated by the Commission upon notice that the rulemaking process hasbeen terminated.
7. Not later than thirty (30) days after a Rule or Operating Procedure ispromulgated, anyperson may file a petition for judicial review of the Rule or OperatingProcedure; provided, thatthe filing of such a petition shall not stay or otherwise prevent the Rule orOperating Procedurefrom becoming effective unless the court finds that the petitioner has asubstantial likelihood ofsuccess. The court shall give deference to the actions of the Commissionconsistent withapplicable law and shall not find the Rule or Operating Procedure to beunlawful if the Rule orOperating Procedure represents a reasonable exercise of the Commission'sauthority.
1. The Commission shall promulgate Rules establishing conditions andproceduresforpublic inspection and copying of its information and official records, exceptsuch informationand records involving the privacy of individuals and insurers' trade secrets. The Commissionmay promulgate additional Rules under which it may make available to federaland stateagencies, including law enforcement agencies, records and information otherwiseexempt fromdisclosure, and may enter into agreements with such agencies to receive orexchange informationor records subject to nondisclosure and confidentiality provisions.
2. Except as to privileged records, data and information, the laws of anyCompactingState pertaining to confidentiality or nondisclosure shall not relieve anyCompacting StateCommissioner of the duty to disclose any relevant records, data or informationto theCommission; provided, that disclosure to the Commission shall not be deemed towaive orotherwise affect any confidentiality requirement; and further provided, that,except as otherwiseexpressly provided in this Act, the Commission shall not be subject to theCompacting State'slaws pertaining to confidentiality and nondisclosure with respect to records,data and informationin its possession. Confidential information of the Commission shall remainconfidential aftersuch information is provided to any Commissioner.
3. The Commission shall monitor Compacting States for compliance with dulyadoptedBylaws, Rules, including Uniform Standards, and Operating Procedures. TheCommission shallnotify any non-complying Compacting State in writing of its noncompliance withCommission Bylaws, Rules or Operating Procedures. If a non-complyingCompacting State fails to remedy itsnoncompliance within the time specified in the notice of noncompliance, theCompacting Stateshall be deemed to be in default as set forth in Article XIV.
4. The Commissioner of any State in which an Insurer is authorized to dobusiness, or isconducting the business of insurance, shall continue to exercise his or herauthority to oversee themarket regulation of the activities of the Insurer in accordance with theprovisions of the State'slaw. The Commissioner's enforcement of compliance with the Compact is governedby thefollowing provisions:
a. With respect to the Commissioner's market regulation of a Product orAdvertisementthat is approved or certified to the Commission, the content of the Product orAdvertisementshall not constitute a violation of the provisions, standards or requirementsof the Compactexcept upon a final order of the Commission, issued at the request of aCommissioner after priornotice to the Insurer and an opportunity for hearing before the Commission.
b. Before a Commissioner may bring an action for violation of any provision,standard orrequirement of the Compact relating to the content of an Advertisement notapproved or certifiedto the Commission, the Commission, or an authorized Commission officer oremployee, mustauthorize the action. However, authorization pursuant to this Paragraph doesnot require notice tothe Insurer, opportunity for hearing or disclosure of requests forauthorization or records of theCommission's action on such requests.
The Commission shall attempt, upon the request of a Member, to resolve anydisputes orother issues that are subject to this Compact and which may arise between twoor moreCompacting States, or between Compacting States and Non-compacting States, andtheCommission shall promulgate an Operating Procedure providing for resolution of such disputes.
1. Insurers and Third-Party Filers seeking to have a Product approved by theCommissionshall file the Product with, and pay applicable filing fees to, the Commission.Nothing in thisAct shall be construed to restrict or otherwise prevent an insurer from filingits Product with theinsurance department in any State wherein the insurer is licensed to conductthe business ofinsurance, and such filing shall be subject to the laws of the States wherefiled.
2. The Commission shall establish appropriate filing and review processes andprocedurespursuant to Commission Rules and Operating Procedures. Notwithstanding anyprovision hereinto the contrary, the Commission shall promulgate Rules to establish conditionsand proceduresunder which the Commission will provide public access to Product filinginformation. Inestablishing such Rules, the Commission shall consider the interests of thepublic in havingaccess to such information, as well as protection of personal medical andfinancial informationand trade secrets, that may be contained in a Product filing or supportinginformation.
3. Any Product approved by the Commission may be sold or otherwise issued inthoseCompacting States for which the Insurer is legally authorized to do business.
1. Not later than thirty (30) days after the Commission has given notice of adisapprovedProduct or Advertisement filed with the Commission, the Insurer or Third-PartyFiler whosefiling was disapproved may appeal the determination to a review panel appointedby theCommission. The Commission shall promulgate Rules to establish procedures forappointingsuch review panels and provide for notice and hearing. An allegation that theCommission, indisapproving a Product or Advertisement filed with the Commission, actedarbitrarily,capriciously, or in a manner that is an abuse of discretion or otherwise not inaccordance with thelaw, is subject to judicial review in accordance with Article III, Section 4.
2. The Commission shall have authority to monitor, review and reconsiderProducts andAdvertisement subsequent to their filing or approval upon a finding that theproduct does notmeet the relevant Uniform Standard. Where appropriate, the Commission maywithdraw ormodify its approval after proper notice and hearing, subject to the appealprocess in Section 1above.
1. The Commission shall pay or provide for the payment of the reasonableexpenses of itsestablishment and organization. To fund the cost of its initial operations,the Commission mayaccept contributions and other forms of funding from the National Associationof InsuranceCommissioners, Compacting States and other sources. Contributions and otherforms of fundingfrom other sources shall be of such a nature that the independence of theCommission concerningthe performance of its duties shall not be compromised.
2. The Commission shall collect a filing fee from each Insurer andThird-PartyFiler filinga product with the Commission to cover the cost of the operations andactivities of theCommission and its staff in a total amount sufficient to cover the Commission'sannual budget.
3. The Commission's budget for a fiscal year shall not be approved until ithasbeensubject to notice and comment as set forth in Article VII of this Compact.
4. The Commission shall be exempt from all taxation in and by the CompactingStates.
5. The Commission shall not pledge the credit of any Compacting State, exceptby andwith the appropriate legal authority of that Compacting State.
6. The Commission shall keep complete and accurate accounts of all itsinternalreceipts,including grants and donations, and disbursements of all funds under itscontrol. The internalfinancial accounts of the Commission shall be subject to the accountingprocedures establishedunder its Bylaws. The financial accounts and reports including the system ofinternal controlsand procedures of the Commission shall be audited annually by an independentcertified publicaccountant. Upon the determination of the Commission, but no less frequentlythan every three(3) years, the review of the independent auditor shall include a management andperformanceaudit of the Commission. The Commission shall make an Annual Report to theGovernor andlegislature of the Compacting States, which shall include a report of theindependent audit. TheCommission's internal accounts shall not be confidential and such materials maybe shared withthe Commissioner of any Compacting State upon request, provided, however, thatany work papers related to any internal or independent audit and anyinformation regarding the privacy ofindividuals and insurers' proprietary information, including trade secrets,shall remainconfidential.
7. No Compacting State shall have any claim to or ownership of any propertyheld by orvested in the Commission or to any Commission funds held pursuant to theprovisions of thisCompact.
1. Any State is eligible to become a Compacting State.
2. The Compact shall become effective and binding upon legislative enactmentoftheCompact into law by two Compacting States; provided, the Commission shallbecome effectivefor purposes of adopting Uniform Standards for, reviewing, and giving approvalor disapprovalof, Products filed with the Commission that satisfy applicable UniformStandards only aftertwenty-six (26) States are Compacting States or, alternatively, by Statesrepresenting greater thanforty percent (40%) of the premium volume for life insurance, annuity,disability income andlong-term care insurance products, based on records of the NAIC for the prioryear. Thereafter, itshall become effective and binding as to any other Compacting State uponenactment of theCompact into law by that State.
3. Amendments to the Compact may be proposed by the Commission for enactmentbythe Compacting States. No amendment shall become effective and binding upontheCommission and the Compacting States unless and until all Compacting Statesenact theamendment into law.
1. Withdrawal
a. Once effective, the Compact shall continue in force and remain bindinguponeach andevery Compacting State; provided, that a Compacting State may withdraw fromthe Compact("Withdrawing State") by enacting a statute specifically repealing the statutewhich enacted theCompact into law.
b. The effective date of withdrawal is the effective date of the repealingstatute.However, the withdrawal shall not apply to any product filings approved orself-certified, or anyAdvertisement of such products, on the date the repealing statute becomeseffective, except bymutual agreement of the Commission and the Withdrawing State unless theapproval is rescindedby the Withdrawing State as provided in Paragraph e of this section.
c. The Commissioner of the Withdrawing State shall immediately notify theManagementCommittee in writing upon the introduction of legislation repealing thisCompact in theWithdrawing State.
d. The Commission shall notify the other Compacting States of theintroductionof suchlegislation within ten (10) days after its receipt of notice thereof.
e. The Withdrawing State is responsible for all obligations, duties andliabilities incurredthrough the effective date of withdrawal, including any obligations, theperformance of whichextend beyond the effective date of withdrawal, except to the extent thoseobligations may have been released or relinquished by mutual agreement of theCommission and the WithdrawingState. The Commission's approval of Products and Advertisement prior to theeffective date ofwithdrawal shall continue to be effective and be given full force and effect inthe WithdrawingState, unless formally rescinded by the Withdrawing State in the same manner asprovided by thelaws of the Withdrawing State for the prospective disapproval of products oradvertisementpreviously approved under state law.
f. Reinstatement following withdrawal of any Compacting State shall occurupontheeffective date of the Withdrawing State reenacting the Compact.
2. Default
a. If the Commission determines that any Compacting State has at any timedefaulted("Defaulting State") in the performance of any of its obligations orresponsibilities under thisCompact, the Bylaws or duly promulgated Rules or Operating Procedures, then,after notice andhearing as set forth in the Bylaws, all rights, privileges and benefitsconferred by this Compact onthe Defaulting State shall be suspended from the effective date of default asfixed by theCommission. The grounds for default include, but are not limited to, failureof a CompactingState to perform its obligations or responsibilities, and any other groundsdesignated inCommission Rules. The Commission shall immediately notify the Defaulting Statein writing ofthe Defaulting State's suspension pending a cure of the default. TheCommission shall stipulatethe conditions and the time period within which the Defaulting State must cureits default. If theDefaulting State fails to cure the default within the time period specified bythe Commission, theDefaulting State shall be terminated from the Compact and all rights,privileges and benefitsconferred by this Compact shall be terminated from the effective date oftermination.
b. Product approvals by the Commission or product self-certifications, or anyAdvertisement in connection with such product, that are in force on theeffective date oftermination shall remain in force in the Defaulting State in the same manner asif the DefaultingState had withdrawn voluntarily pursuant to Section 1 of this article.
c. Reinstatement following termination of any Compacting State requires areenactmentof the Compact.
3. Dissolution of Compact
a. The Compact dissolves effective upon the date of the withdrawal or defaultof theCompacting State which reduces membership in the Compact to one CompactingState.
b. Upon the dissolution of this Compact, the Compact becomes null and voidandshall beof no further force or effect, and the business and affairs of the Commissionshall be wound upand any surplus funds shall be distributed in accordance with the Bylaws.
1. The provisions of this Compact shall be severable; and if any phrase,clause, sentenceor provision is deemed unenforceable, the remaining provisions of the Compactshall beenforceable.
2. The provisions of this Compact shall be liberally construed to effectuateits purposes.
1. Other Laws
a. Nothing herein prevents the enforcement of any other law of a CompactingState,except as provided in Paragraph b of this section.
b. For any Product approved or certified to the Commission, the Rules,UniformStandards and any other requirements of the Commission shall constitute theexclusiveprovisions applicable to the content, approval and certification of suchProducts. ForAdvertisement that is subject to the Commission's authority, any Rule, UniformStandard orother requirement of the Commission which governs the content of theAdvertisement shallconstitute the exclusive provision that a Commissioner may apply to the contentof theAdvertisement. Notwithstanding the foregoing, no action taken by the Commissionshallabrogate or restrict: (i) the access of any person to state courts; (ii)remedies available understate law related to breach of contract, tort, or other laws not specificallydirected to the contentof the Product; (iii) state law relating to the construction of insurancecontracts; or (iv) theauthority of the attorney general of the state, including but not limited to maintaining any actionsor proceedings, as authorized by law.
c. All insurance products filed with individual States shall be subject tothe laws of thoseStates.
2. Binding Effect of this Compact
a. All lawful actions of the Commission, including all Rules and OperatingProcedurespromulgated by the Commission, are binding upon the Compacting States.
b. All agreements between the Commission and the Compacting States arebindinginaccordance with their terms.
c. Upon the request of a party to a conflict over the meaning orinterpretationofCommission actions, and upon a majority vote of the Compacting States, theCommission mayissue advisory opinions regarding the meaning or interpretation in dispute.
d. In the event any provision of this Compact exceeds the constitutionallimitsimposedon the legislature of any Compacting State, the obligations, duties, powers orjurisdiction soughtto be conferred by that provision upon the Commission shall be ineffective asto that CompactingState, and those obligations, duties, powers or jurisdiction shall remain inthe Compacting Stateand shall be exercised by the agency thereof to which those obligations,duties, powers orjurisdiction are delegated by law in effect at the time this Compact becomeseffective.
History: L. 2005, ch. 102, § 1; July 1.