76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3046
Senate Bill 295
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Senate Interim Committee on
Consumer Protection and Public Affairs)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Enacts Interstate Insurance Product Regulation Compact.
Obligates state to use uniform standards adopted by Interstate
Insurance Product Regulation Commission unless state opts out of
specific standards.
A BILL FOR AN ACT
Relating to the Interstate Insurance Product Regulation Compact.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 4 of this 2011 Act are added to
and made a part of the Insurance Code. + }
SECTION 2. { + The Interstate Insurance Product Regulation
Compact is enacted into law and entered into on behalf of this
state with all other jurisdictions legally joining therein in the
form substantially as follows: + }
________________________________________________________________
{ +
ARTICLE I + }
{ +
PURPOSE + }
{ + The purposes of this compact are, through means of joint
and cooperative action among the compacting states:
(1) To promote and protect the interest of consumers of
individual and group annuity, life insurance, disability income
and long-term care insurance products;
(2) To develop uniform standards for insurance products covered
under the compact;
(3) To establish a central clearinghouse to receive and provide
prompt review of insurance products covered under the compact
and, in certain cases, advertisements related to these products,
submitted by insurers authorized to do business in one or more
compacting states;
(4) To give appropriate regulatory approval to those product
filings and advertisements satisfying the applicable uniform
standard;
(5) To improve coordination of regulatory resources and
expertise between state insurance departments regarding the
setting of uniform standards and review of insurance products
covered under the compact;
(6) To create the Interstate Insurance Product Regulation
Commission; and
(7) To perform these and such other related functions as may be
consistent with the state regulation of the business of
insurance. + }
{ +
ARTICLE II + }
{ +
DEFINITIONS + }
{ + As used in this compact:
(1) 'Advertisement' means any material designed to create
public interest in a product, or induce the public to purchase,
increase, modify, reinstate, borrow on, surrender, replace or
retain a policy, as more specifically defined in the rules and
operating procedures of the commission.
(2) 'Bylaws' means those bylaws established by the commission
for its governance, or for directing or controlling the
commission's actions or conduct.
(3) 'Commission' means the Interstate Insurance Product
Regulation Commission established by this compact.
(4) 'Commissioner' means the chief insurance regulatory
official of a state, including, but not limited to, a
commissioner, superintendent, director or administrator.
(5) 'Compacting state' means any state that has enacted this
compact legislation and that has not withdrawn pursuant to
subsection (1), Article XIV, of this compact, or been terminated
pursuant to subsection (2), Article XIV, of this compact.
(6) 'Insurer' means any entity licensed by a state to issue
contracts of insurance for any of the lines of insurance covered
by this compact.
(7) 'Member' means the person chosen by a compacting state as
its representative to the commission, or the person's designee.
(8) 'Noncompacting state' means any state that is not at the
time a compacting state.
(9) 'Operating procedures' means procedures adopted by the
commission implementing a rule, uniform standard or a provision
of this compact.
(10) 'Product' means the form of a policy or contract,
including any application, endorsement or related form that is
attached to and made a part of the policy or contract, and any
evidence of coverage or certificate, for an individual or group
annuity, life insurance, disability income or long-term care
insurance product that an insurer is authorized to issue.
(11) 'Rule' means a statement of general or particular
applicability and future effect adopted by the commission,
including a uniform standard developed pursuant to Article VII of
this compact, designed to implement, interpret or prescribe law
or policy or describing the organization, procedure or practice
requirements of the commission, which shall have the force and
effect of law in the compacting states.
(12) 'State' means any state, district or territory of the
United States of America.
(13) 'Third-party filer' means an entity that submits a product
filing to the commission on behalf of an insurer.
(14) 'Uniform standard' means a standard adopted by the
commission for a product line, pursuant to Article VII of this
compact, and shall include all of the product requirements in
aggregate. However, each uniform standard shall be construed,
whether express or implied, to prohibit the use of any
inconsistent, misleading or ambiguous provisions in a product and
the form of the product made available to the public shall not be
unfair, inequitable or against public policy as determined by the
commission. + }
{ +
ARTICLE III + }
{ +
ESTABLISHMENT OF THE COMMISSION AND VENUE + }
{ + (1) The compacting states hereby create and establish a
joint public agency known as the Interstate Insurance Product
Regulation Commission. Pursuant to Article IV of this compact,
the commission shall have the power to develop uniform standards
for product lines, receive and provide prompt review of products
filed therewith and give approval to those product filings
satisfying applicable uniform standards. However, it is not
intended for the commission to be the exclusive entity for
receipt and review of insurance product filings. This subsection
does not prohibit any insurer from filing its product in any
state wherein the insurer is licensed to conduct the business of
insurance, and any such filing shall be subject to the laws of
the state where filed.
(2) The commission is a body corporate and politic, and an
instrumentality of the compacting states.
(3) The commission is solely responsible for its liabilities
except as otherwise specifically provided in this compact.
(4) Venue is proper and judicial proceedings by or against the
commission shall be brought solely and exclusively in a court of
competent jurisdiction where the principal office of the
commission is located. + }
{ +
ARTICLE IV + }
{ +
POWERS OF THE COMMISSION + }
{ + The commission shall have all of the following powers:
(1) To adopt rules under Article VII of this compact, which
shall have the force and effect of law and shall be binding in
the compacting states to the extent and in the manner provided in
this compact.
(2) To exercise its rulemaking authority and establish
reasonable uniform standards for products covered under the
compact, and advertisement related thereto, which shall have the
force and effect of law and shall be binding in the compacting
states, but only for those products filed with the commission.
However, a compacting state shall have the right to opt out of
such uniform standard pursuant to Article VII of this compact, to
the extent and in the manner provided in this compact. Any
uniform standard established by the commission for long-term care
insurance products may provide the same or greater protections
for consumers as, but shall not provide less than, those
protections set forth in the National Association of Insurance
Commissioners' Long-Term Care Insurance Model Act and Long-Term
Care Insurance Model Regulation, respectively, adopted as of
2001. The commission shall consider whether any subsequent
amendments to the National Association of Insurance
Commissioners' Long-Term Care Insurance Model Act or Long-Term
Care Insurance Model Regulation adopted by the National
Association of Insurance Commissioners require amending of the
uniform standards established by the commission for long-term
care insurance products.
(3) To receive and review in an expeditious manner products
filed with the commission, and rate filings for disability income
and long-term care insurance products, and give approval of those
products and rate filings that satisfy the applicable uniform
standard, where such approval shall have the force and effect of
law and be binding on the compacting states to the extent and in
the manner provided in the compact.
(4) To receive and review in an expeditious manner
advertisement relating to long-term care insurance products for
which uniform standards have been adopted by the commission, and
give approval to all advertisement that satisfies the applicable
uniform standard. For any product covered under this compact,
other than long-term care insurance products, the commission
shall have the authority to require an insurer to submit all or
any part of its advertisement with respect to that product for
review or approval prior to use, if the commission determines
that the nature of the product is such that an advertisement of
the product could have the capacity or tendency to mislead the
public. The actions of the commission as provided in this section
shall have the force and effect of law and shall be binding in
the compacting states to the extent and in the manner provided in
the compact.
(5) To exercise its rulemaking authority and designate products
and advertisement that may be subject to a self-certification
process without the need for prior approval by the commission.
(6) To adopt operating procedures, pursuant to Article VII of
this compact, that shall be binding in the compacting states to
the extent and in the manner provided in this compact.
(7) To bring and prosecute legal proceedings or actions in its
name as the commission. However, the standing of any state
insurance department to sue or be sued under applicable law shall
not be affected.
(8) To issue subpoenas requiring the attendance and testimony
of witnesses and the production of evidence.
(9) To establish and maintain offices.
(10) To purchase and maintain insurance and bonds.
(11) To borrow, accept or contract for services of personnel,
including, but not limited to, employees of a compacting state.
(12) To hire employees, professionals or specialists, and elect
or appoint officers, and to fix their compensation, define their
duties and give them appropriate authority to carry out the
purposes of the compact, and determine their qualifications, and
to establish the commission's personnel policies and programs
relating to, among other things, conflicts of interest, rates of
compensation and qualifications of personnel.
(13) To accept any and all appropriate donations and grants of
money, equipment, supplies, materials and services, and to
receive, utilize and dispose of the same. However, at all times
the commission shall strive to avoid any appearance of
impropriety.
(14) To lease, purchase, accept appropriate gifts or donations
of or otherwise own, hold, improve or use any property, real,
personal or mixed. However, at all times the commission shall
strive to avoid any appearance of impropriety.
(15) To sell, convey, mortgage, pledge, lease, exchange,
abandon or otherwise dispose of any property, real, personal or
mixed.
(16) To remit filing fees to compacting states as may be set
forth in the bylaws, rules or operating procedures.
(17) To enforce compliance by compacting states with rules,
uniform standards, operating procedures and bylaws.
(18) To provide for dispute resolution among compacting states.
(19) To advise compacting states on issues relating to insurers
domiciled or doing business in noncompacting states, consistent
with the purposes of this compact.
(20) To provide advice and training to those personnel in state
insurance departments responsible for product review, and to be a
resource for state insurance departments.
(21) To establish a budget and make expenditures.
(22) To borrow money.
(23) To appoint committees, including advisory committees
comprising members, state insurance regulators, state legislators
or their representatives, insurance industry and consumer
representatives, and such other interested persons as may be
designated in the bylaws.
(24) To provide and receive information from, and to cooperate
with, law enforcement agencies.
(25) To adopt and use a corporate seal.
(26) To perform such other functions as may be necessary or
appropriate to achieve the purposes of this compact consistent
with the state regulation of the business of insurance. + }
{ +
ARTICLE V + }
{ +
ORGANIZATION OF THE COMMISSION + }
{ + (1)(a) Each compacting state shall have and be limited to
one member. Each member shall be qualified to serve in that
capacity pursuant to applicable law of the compacting state. Any
member may be removed or suspended from office as provided by the
law of the state from which the member shall be appointed. Any
vacancy occurring in the commission shall be filled in accordance
with the laws of the compacting state wherein the vacancy exists.
Nothing herein shall be construed to affect the manner in which a
compacting state determines the election or appointment and
qualification of its own commissioner.
(b) Each member shall be entitled to one vote and shall have an
opportunity to participate in the governance of the commission in
accordance with the bylaws. Notwithstanding any provision in this
compact to the contrary, no action of the commission with respect
to the adoption of a uniform standard shall be effective unless
two-thirds of the members vote in favor thereof.
(c) The commission shall, by a majority of the members,
prescribe bylaws to govern its conduct as may be necessary or
appropriate to carry out the purposes and exercise the powers of
the compact, including but not limited to:
(A) Establishing the fiscal year of the commission.
(B) Providing reasonable procedures for appointing and electing
members, as well as holding meetings, of the management
committee.
(C) Providing reasonable standards and procedures for:
(i) The establishment and meetings of other committees; and
(ii) Governing any general or specific delegation of any
authority or function of the commission.
(D) Providing reasonable procedures for calling and conducting
meetings of the commission that consist of a majority of
commission members, ensuring reasonable advance notice of each
such meeting and providing for the right of residents to attend
each such meeting with enumerated exceptions designed to protect
the public's interest, the privacy of individuals and insurers'
proprietary information, including trade secrets. The commission
may meet in camera only after a majority of the entire membership
votes to close a meeting. As soon as practicable, the commission
must make public:
(i) A copy of the vote to close the meeting revealing the vote
of each member with no proxy votes allowed; and
(ii) Votes taken during the meeting.
(E) Establishing the titles, duties and authority and
reasonable procedures for the election of the officers of the
commission.
(F) Providing reasonable standards and procedures for the
establishment of the personnel policies and programs of the
commission. Notwithstanding any civil service or other similar
laws of any compacting state, the bylaws shall exclusively govern
the personnel policies and programs of the commission.
(G) Promulgating a code of ethics to address permissible and
prohibited activities of commission members and employees.
(H) Providing a mechanism for winding up the operations of the
commission and the equitable disposition of any surplus funds
that may exist after the termination of the compact after the
payment or reserving of all of its debts and obligations.
(d) The commission shall publish its bylaws in a convenient
form and file a copy thereof and a copy of any amendment thereto,
with the appropriate agency or officer in each of the compacting
states.
(2)(a) A management committee comprising no more than 14
members shall be established as follows:
(A) One member from each of the six compacting states with the
largest premium volume for individual and group annuities, life,
disability income and long-term care insurance products,
determined from the records of the National Association of
Insurance Commissioners for the prior year;
(B) Four members from those compacting states with at least two
percent of the market based on the premium volume described
above, other than the six compacting states with the largest
premium volume, selected on a rotating basis as provided in the
bylaws; and
(C) Four members from those compacting states with less than
two percent of the market based on the premium volume described
above, with one selected from each of the four zone regions of
the National Association of Insurance Commissioners as provided
in the bylaws.
(b) The management committee shall have authority and duties as
may be set forth in the bylaws, including but not limited to:
(A) Managing the affairs of the commission in a manner
consistent with the bylaws and purposes of the commission;
(B) Establishing and overseeing an organizational structure
within, and appropriate procedures for, the commission to provide
for the creation of uniform standards and other rules, receipt
and review of product filings, administrative and technical
support functions, review of decisions regarding the disapproval
of a product filing, and the review of elections made by a
compacting state to opt out of a uniform standard. However, a
uniform standard shall not be submitted to the compacting states
for adoption unless approved by two-thirds of the members of the
management committee;
(C) Overseeing the offices of the commission; and
(D) Planning, implementing and coordinating communications and
activities with other state, federal and local government
organizations in order to advance the goals of the commission.
(c) The commission shall elect annually officers from the
management committee, with each having such authority and duties
as may be specified in the bylaws.
(d) The management committee may, subject to the approval of
the commission, appoint or retain an executive director for any
period, upon such terms and conditions and for such compensation
as the commission may deem appropriate. The executive director
shall serve as secretary to the commission, but shall not be a
member of the commission. The executive director shall hire and
supervise such other staff as may be authorized by the
commission.
(3)(a) A legislative committee comprising state legislators or
their designees shall be established to monitor the operations
of, and make recommendations to, the commission, including the
management committee. However, the manner of selection and term
of any legislative committee member shall be as set forth in the
bylaws. Prior to the adoption by the commission of any uniform
standard, revision to the bylaws, annual budget or other
significant matter as may be provided in the bylaws, the
management committee shall consult with and report to the
legislative committee.
(b) The commission shall establish two advisory committees, one
of which shall comprise consumer representatives independent of
the insurance industry, and the other comprising insurance
industry representatives.
(c) The commission may establish additional advisory committees
as its bylaws may provide for the carrying out of its functions.
(4) The commission shall maintain its corporate books and
records in accordance with the bylaws.
(5)(a) The members, officers, executive director, employees and
representatives of the commission shall be immune from suit and
liability, either personally or in their official capacity, for
any claim for damage to or loss of property or personal injury or
other civil liability caused by or arising out of any actual or
alleged act, error or omission that occurred, or that the person
against whom the claim is made had a reasonable basis for
believing occurred within the scope of commission employment,
duties or responsibilities. However, this paragraph does not
protect any such person from suit or liability for any damage,
loss, injury or liability caused by the intentional or willful
and wanton misconduct of that person.
(b) The commission shall defend any member, officer, executive
director, employee or representative of the commission in any
civil action seeking to impose liability arising out of any
actual or alleged act, error or omission that occurred within the
scope of commission employment, duties or responsibilities, or
that the person against whom the claim is made had a reasonable
basis for believing occurred within the scope of commission
employment, duties or responsibilities. However, this paragraph
does not prohibit that person from retaining the person's own
counsel. Also, the actual or alleged act, error or omission must
not have resulted from that person's intentional or willful and
wanton misconduct.
(c) The commission shall indemnify and hold harmless any
member, officer, executive director, employee or representative
of the commission for the amount of any settlement or judgment
obtained against that person arising out of any actual or alleged
act, error or omission that occurred within the scope of
commission employment, duties or responsibilities, or that such
person had a reasonable basis for believing occurred within the
scope of commission employment, duties or responsibilities.
However, the actual or alleged act, error or omission must not
have resulted from the intentional or willful and wanton
misconduct of that person. + }
{ +
ARTICLE VI + }
{ +
MEETINGS AND ACTS OF THE COMMISSION + }
{ + (1) The commission shall meet and take such actions as
are consistent with the provisions of this compact and the
bylaws.
(2) Each member of the commission shall have the right and
power to cast a vote to which that compacting state is entitled
and to participate in the business and affairs of the commission.
A member shall vote in person or by such other means as provided
in the bylaws. The bylaws may provide for members' participation
in meetings by telephone or other means of communication.
(3) The commission shall meet at least once during each
calendar year. Additional meetings shall be held as set forth in
the bylaws. + }
{ +
ARTICLE VII + }
{ +
RULES AND OPERATING PROCEDURES: + }
{ +
RULEMAKING FUNCTIONS OF THE COMMISSION + }
{ +
AND OPTING OUT OF UNIFORM STANDARDS + }
{ + (1) The commission shall adopt reasonable rules,
including uniform standards, and operating procedures in order to
effectively and efficiently achieve the purposes of this compact.
In the event the commission exercises its rulemaking authority in
a manner that is beyond the scope of the purposes of this
compact, then such an action by the commission shall be invalid
and have no force and effect.
(2) Rules and operating procedures shall be made pursuant to a
rulemaking process that conforms to the Model State
Administrative Procedure Act of 1981 as amended, as may be
appropriate to the operations of the commission. Before the
commission adopts a uniform standard, the commission shall give
written notice to the relevant state legislative committee in
each compacting state responsible for insurance issues of its
intention to adopt the uniform standard. The commission in
adopting a uniform standard shall consider fully all submitted
materials and issue a concise explanation of its decision.
(3) A uniform standard shall become effective 90 days after its
adoption by the commission or on such later date as the
commission may determine. However, a compacting state may opt out
of a uniform standard as provided in this Article. All other
rules and operating procedures, and amendments thereto, shall
become effective as of the date specified in each rule, operating
procedure or amendment.
(4)(a) A compacting state may opt out of a uniform standard
either by legislation or regulation adopted by the insurance
department under the compacting state's Administrative Procedure
Act. If a compacting state elects to opt out of a uniform
standard by regulation, the compacting state must:
(A) Give written notice to the commission no later than 10
business days after the uniform standard is adopted, or at the
time the state becomes a compacting state; and
(B) Find that the uniform standard does not provide reasonable
protections to the residents of the state, given the conditions
in the state.
(b) The commissioner shall make specific findings of fact and
conclusions of law, based on a preponderance of the evidence,
detailing the conditions in the state that warrant a departure
from the uniform standard and determining that the uniform
standard would not reasonably protect the residents of the state.
The commissioner must consider and balance the following factors
and find that the conditions in the state and needs of the
residents of the state outweigh:
(A) The intent of the legislature to participate in, and the
benefits of, an interstate agreement to establish national
uniform consumer protections for the products subject to this
compact; and
(B) The presumption that a uniform standard adopted by the
commission provides reasonable protections to consumers of the
relevant product.
(c) A compacting state may, at the time of its enactment of
this compact, prospectively opt out of all uniform standards
involving long-term care insurance products by expressly
providing for such opt out in the enacted compact, and such an
opt out shall not be treated as a material variance in the offer
or acceptance of any state to participate in this compact. Such
opt out shall be effective at the time of enactment of this
compact by the compacting state and shall apply to all existing
uniform standards involving long-term care insurance products and
those subsequently adopted.
(5) If a compacting state elects to opt out of a uniform
standard, the uniform standard shall remain applicable in the
compacting state electing to opt out until such time the opt out
legislation is enacted into law or the regulation opting out
becomes effective. Once the opt out of a uniform standard by a
compacting state becomes effective as provided under the laws of
that state, the uniform standard shall have no further force and
effect in that state unless and until the legislation or
regulation implementing the opt out is repealed or otherwise
becomes ineffective under the laws of the state. If a compacting
state opts out of a uniform standard after the uniform standard
has been made effective in that state, the opt out shall have the
same prospective effect as provided under Article XIV of this
compact for withdrawals.
(6) If a compacting state has formally initiated the process of
opting out of a uniform standard by regulation, and while the
regulatory opt out is pending, the compacting state may petition
the commission, at least 15 days before the effective date of the
uniform standard, to stay the effectiveness of the uniform
standard in that state. The commission may grant a stay if it
determines the regulatory opt out is being pursued in a
reasonable manner and there is a likelihood of success. If a stay
is granted or extended by the commission, the stay or extension
thereof may postpone the effective date by up to 90 days, unless
affirmatively extended by the commission. However, a stay may not
be permitted to remain in effect for more than one year unless
the compacting state can show extraordinary circumstances that
warrant a continuance of the stay, including, but not limited to,
the existence of a legal challenge that prevents the compacting
state from opting out. A stay may be terminated by the commission
upon notice that the rulemaking process has been terminated.
(7) Not later than 30 days after a rule or operating procedure
is adopted, any person may file a petition for judicial review of
the rule or operating procedure. However, the filing of such a
petition shall not stay or otherwise prevent the rule or
operating procedure from becoming effective unless the court
finds that the petitioner has a substantial likelihood of
success. The court shall give deference to the actions of the
commission consistent with applicable law and shall not find the
rule or operating procedure to be unlawful if the rule or
operating procedure represents a reasonable exercise of the
commission's authority.
(8) As used in this article, 'opt out' means any action by a
compacting state to decline to adopt or participate in an adopted
uniform standard. + }
{ +
ARTICLE VIII + }
{ +
COMMISSION RECORDS AND ENFORCEMENT + }
{ + (1) The commission shall adopt rules establishing
conditions and procedures for public inspection and copying of
its information and official records, except such information and
records involving the privacy of individuals and insurers' trade
secrets. The commission may adopt additional rules under which it
may make available to federal and state agencies, including law
enforcement agencies, records and information otherwise exempt
from disclosure, and may enter into agreements with such agencies
to receive or exchange information or records subject to
nondisclosure and confidentiality provisions.
(2) Except as to privileged records, data and information, the
laws of any compacting state pertaining to confidentiality or
nondisclosure shall not relieve any compacting state of the duty
to disclose any relevant records, data or information to the
commission. However, disclosure to the commission shall not be
deemed to waive or otherwise affect any confidentiality
requirement. Except as otherwise expressly provided in this
compact, the commission shall not be subject to the compacting
state's laws pertaining to confidentiality and nondisclosure with
respect to records, data and information in its possession.
Confidential information of the commission shall remain
confidential after such information is provided to any
commissioner.
(3) The commission shall monitor compacting states for
compliance with duly adopted bylaws, rules, including uniform
standards, and operating procedures. The commission shall notify
any noncomplying compacting state in writing of its noncompliance
with commission bylaws, rules or operating procedures. If a
noncomplying compacting state fails to remedy its noncompliance
within the time specified in the notice of noncompliance, the
compacting state shall be deemed to be in default as set forth in
Article XIV of this compact.
(4) Any commissioner of a compacting state in which an insurer
is authorized to do business, or is conducting the business of
insurance, shall continue to exercise the state's authority to
oversee the market regulation of the activities of the insurer in
accordance with the provisions of the state's law. The
commissioner's enforcement of compliance with the compact is
governed by the following provisions:
(a) With respect to the commissioner's market regulation of a
product or advertisement that is approved or certified to the
commission, the content of the product or advertisement shall not
constitute a violation of the provisions, standards or
requirements of the compact except upon a final order of the
commission, issued at the request of a commissioner after prior
notice to the insurer and an opportunity for hearing before the
commission.
(b) Before a commissioner may bring an action for violation of
any provision, standard or requirement of the compact relating to
the content of an advertisement not approved or certified to the
commission, the commission, or an authorized commission officer
or employee, must authorize the action. However, authorization
under this paragraph does not require notice to the insurer,
opportunity for hearing or disclosure of requests for
authorization or records of the commission's action on such
requests. + }
{ +
ARTICLE IX + }
{ +
DISPUTE RESOLUTION + }
{ + The commission shall attempt, upon the request of a
member, to resolve any disputes or other issues that are subject
to this compact and that may arise among two or more compacting
states, or between compacting states and noncompacting states.
The commission shall adopt an operating procedure providing for
resolution of such disputes. + }
{ +
ARTICLE X + }
{ +
PRODUCT FILING AND APPROVAL + }
{ + (1) Insurers and third-party filers seeking to have a
product approved by the commission shall file the product with,
and pay applicable filing fees to, the commission. Nothing in
this compact shall be construed to restrict or otherwise prevent
an insurer from filing its product with the insurance department
in any state wherein the insurer is licensed to conduct the
business of insurance, and such filing shall be subject to the
laws of the states where filed.
(2) The commission shall establish appropriate filing and
review processes and procedures pursuant to commission rules and
operating procedures. The commission shall adopt rules to
establish conditions and procedures under which the commission
will provide public access to product filing information. In
establishing such rules, the commission shall consider the
interests of the public in having access to such information, as
well as protection of personal medical and financial information
and trade secrets, that may be contained in a product filing or
supporting information.
(3) Any product approved by the commission may be sold or
otherwise issued in those compacting states for which the insurer
is legally authorized to do business. + }
{ +
ARTICLE XI + }
{ +
REVIEW OF COMMISSION DECISIONS REGARDING FILINGS + }
{ + (1) Not later than 30 days after the commission has given
notice of a disapproved product or advertisement filed with the
commission, the insurer or third-party filer whose filing was
disapproved may appeal the determination to a review panel
appointed by the commission. The commission shall adopt rules to
establish procedures for appointing such review panels and
provide for notice and hearing. An allegation that the
commission, in disapproving a product or advertisement filed with
the commission, acted arbitrarily, capriciously or in a manner
that is an abuse of discretion or otherwise not in accordance
with the law is subject to judicial review in accordance with
subsection (4) of Article III of this compact.
(2) The commission shall have authority to monitor, review and
reconsider products and advertisement subsequent to their filing
or approval upon a finding that the product does not meet the
relevant uniform standard. Where appropriate, the commission may
withdraw or modify its approval after proper notice and hearing,
subject to the appeal process in subsection (1) of this
Article. + }
{ +
ARTICLE XII + }
{ +
FINANCE + }
{ + (1) The commission shall pay or provide for the payment
of the reasonable expenses of its establishment and organization.
To fund the cost of its initial operations, the commission may
accept contributions and other forms of funding from the National
Association of Insurance Commissioners, compacting states and
other sources. Contributions and other forms of funding from
other sources shall be of such a nature that the independence of
the commission concerning the performance of its duties is not
compromised.
(2) The commission shall collect a filing fee from each insurer
and third-party filer filing a product with the commission to
cover the cost of the operations and activities of the commission
and its staff in a total amount sufficient to cover the
commission's annual budget.
(3) The commission's budget for a fiscal year may not be
approved until it has been subject to notice and comment as set
forth in Article VII of this compact.
(4) The commission shall be exempt from all taxation in and by
the compacting states.
(5) The commission may not pledge the credit of any compacting
state, except by and with the appropriate legal authority of that
compacting state.
(6) The commission shall keep complete and accurate accounts of
all its internal receipts, including grants and donations, and
disbursements of all funds under its control. The internal
financial accounts of the commission shall be subject to the
accounting procedures established under its bylaws. The financial
accounts and reports including the system of internal controls
and procedures of the commission shall be audited annually by an
independent certified public accountant. Upon the determination
of the commission, but no less frequently than every three years,
the review of the independent auditor shall include a management
and performance audit of the commission. The commission shall
make an annual report to the governor and legislature of the
compacting states, which shall include a report of the
independent audit. The commission's internal accounts shall not
be confidential and such materials may be shared with the
commissioner of any compacting state upon request. However, any
work papers related to any internal or independent audit and any
information regarding the privacy of individuals and insurers'
proprietary information, including trade secrets, shall remain
confidential.
(7) A compacting state does not have any claim to or ownership
of any property held by or vested in the commission or to any
commission funds held under the provisions of this compact. + }
{ +
ARTICLE XIII + }
{ +
COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT + }
{ + (1) Any state is eligible to become a compacting state.
(2) The compact shall become effective and binding upon
legislative enactment of the compact into law by two compacting
states. However, the commission shall become effective for
purposes of adopting uniform standards for, reviewing and giving
approval or disapproval of products filed with the commission
that satisfy applicable uniform standards only after 26 states
are compacting states or, alternatively, states representing
greater than 40 percent of the premium volume for life insurance,
annuity, disability income and long-term care insurance products,
based on records of the National Association of Insurance
Commissioners for the prior year, are compacting states.
Thereafter, the compact becomes effective and binding as to any
other compacting state upon enactment of the compact into law by
that state.
(3) Amendments to the compact may be proposed by the commission
for enactment by the compacting states. An amendment does not
become effective and binding upon the commission and the
compacting states unless and until all compacting states enact
the amendment into law. + }
{ +
ARTICLE XIV + }
{ +
WITHDRAWAL, DEFAULT AND TERMINATION + }
{ + (1)(a) Once effective, the compact shall continue in
force and remain binding upon each and every compacting state.
However, a compacting state may withdraw from the compact by
enacting a statute specifically repealing the statute that
enacted the compact into law.
(b) The effective date of withdrawal is the effective date of
the repealing statute. However, the withdrawal shall not apply to
any product filings approved or self-certified, or any
advertisement of such products, on the date the repealing statute
becomes effective, except by mutual agreement of the commission
and the withdrawing state unless the approval is rescinded by the
withdrawing state as provided in paragraph (e) of this
subsection.
(c) The commissioner of a withdrawing state shall immediately
notify the management committee in writing upon the introduction
of legislation repealing this compact in the withdrawing state.
(d) The commission shall notify the other compacting states of
the introduction of such legislation within 10 days after its
receipt of notice thereof.
(e) The withdrawing state is responsible for all obligations,
duties and liabilities incurred through the effective date of
withdrawal, including any obligations, the performance of which
extend beyond the effective date of withdrawal, except to the
extent those obligations may have been released or relinquished
by mutual agreement of the commission and the withdrawing state.
The commission's approval of products and advertisement prior to
the effective date of withdrawal shall continue to be effective
and be given full force and effect in the withdrawing state,
unless formally rescinded by the withdrawing state in the same
manner as provided by the laws of the withdrawing state for the
prospective disapproval of products or advertisement previously
approved under state law.
(f) Reinstatement following withdrawal of any compacting state
shall occur upon the effective date of the withdrawing state
reenacting the compact.
(2)(a) If the commission determines that any compacting state
has at any time defaulted in the performance of any of its
obligations or responsibilities under this compact, the bylaws or
adopted rules or operating procedures, then the commission may
suspend, after notice and hearing as set forth in the bylaws, all
rights, privileges and benefits conferred by this compact on the
defaulting state from the effective date of default as fixed by
the commission. The grounds for default include, but are not
limited to, failure of a compacting state to perform its
obligations or responsibilities, and any other grounds designated
in commission rules. The commission shall immediately notify the
defaulting state in writing of the defaulting state's suspension
pending a cure of the default. The commission shall stipulate the
conditions and the time period within which the defaulting state
must cure its default. If the defaulting state fails to cure the
default within the time period specified by the commission, the
defaulting state shall be terminated from the compact and all
rights, privileges and benefits conferred by this compact shall
be terminated from the effective date of termination.
(b) Product approvals by the commission or product
self-certifications, or any advertisement in connection with such
product, that are in force on the effective date of termination
shall remain in force in the defaulting state in the same manner
as if the defaulting state had withdrawn voluntarily pursuant to
subsection (1) of this Article.
(c) Reinstatement following termination of any compacting state
requires a reenactment of the compact.
(3)(a) Dissolution of the compact is effective upon the date of
the withdrawal or default of the compacting state that reduces
membership in the compact to one compacting state.
(b) Upon the dissolution of this compact, the compact becomes
null and void and shall be of no further force or effect, and the
business and affairs of the commission shall be wound up and any
surplus funds shall be distributed in accordance with the
bylaws. + }
{ +
ARTICLE XV + }
{ +
SEVERABILITY AND CONSTRUCTION + }
{ + (1) The provisions of this compact shall be severable,
and if any phrase, clause, sentence or provision is deemed
unenforceable, the remaining provisions of the compact shall be
enforceable.
(2) The provisions of this compact shall be liberally
construed. + }
{ +
ARTICLE XVI + }
{ +
BINDING EFFECT OF COMPACT AND OTHER LAWS + }
{ + (1)(a) This compact does not prevent the enforcement of
any other law of a compacting state, except as provided in
paragraph (b) of this subsection.
(b) For any product approved or certified to the commission,
the rules, uniform standards and any other requirements of the
commission shall constitute the exclusive provisions applicable
to the content, approval and certification of such products. For
advertisement that is subject to the commission's authority, any
rule, uniform standard or other requirement of the commission
that governs the content of the advertisement shall constitute
the exclusive provision that a commissioner may apply to the
content of the advertisement. However, no action taken by the
commission shall abrogate or restrict:
(A) The access of any person to state courts;
(B) Remedies available under state law related to breach of
contract, tort or other laws not specifically directed to the
content of the product;
(C) State law relating to the construction of insurance
contracts; or
(D) The authority of the attorney general of the state,
including but not limited to maintaining any actions or
proceedings, as authorized by law.
(c) All insurance products filed with individual states shall
be subject to the laws of those states.
(2)(a) All lawful actions of the commission, including all
rules and operating procedures adopted by the commission, are
binding upon the compacting states.
(b) All agreements between the commission and the compacting
states are binding in accordance with their terms.
(c) Upon the request of a party to a conflict over the meaning
or interpretation of commission actions, and upon a majority vote
of the compacting states, the commission may issue advisory
opinions regarding the meaning or interpretation in dispute.
(d) In the event any provision of this compact exceeds the
constitutional limits imposed on the legislature of any
compacting state, the obligations, duties, powers or jurisdiction
sought to be conferred by that provision upon the commission
shall be ineffective as to that compacting state, and those
obligations, duties, powers or jurisdiction shall remain in the
compacting state and shall be exercised by the agency thereof to
which those obligations, duties, powers or jurisdiction are
delegated by law in effect at the time this compact becomes
effective. + }
________________________________________________________________
SECTION 3. { + The Director of the Department of Consumer and
Business Services or a designee of the director shall serve as
this state's member of the Interstate Insurance Product
Regulation Commission established under the Interstate Insurance
Product Regulation Compact set forth in section 2 of this 2011
Act. + }
SECTION 4. { + The provisions of section 2 of this 2011 Act
apply to product forms filed with the Department of Consumer and
Business Services on or after the effective date of this 2011
Act. + }
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