Full Text of SB2544 96th General Assembly
SB2544enr 96TH GENERAL ASSEMBLY
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| AN ACT concerning insurance.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 1. Short title. This Act may be cited as the | 5 |
| Interstate Insurance Product Regulation Compact. | 6 |
| Section 5. Agreement. Pursuant to terms and conditions of | 7 |
| this Act, the State of Illinois seeks to join with other States | 8 |
| and establish the Interstate Insurance Product Regulation | 9 |
| Compact, and thus become a member of the Interstate Insurance | 10 |
| Product Regulation Commission. The representative of this | 11 |
| State to the Commission shall be the Director of Insurance. | 12 |
| Section 10. Ratification. The State of Illinois ratifies, | 13 |
| approves, and adopts the following interstate compact: | 14 |
| Article I. PURPOSES | 15 |
| The purposes of this Compact are, through means of joint | 16 |
| and cooperative action among the Compacting States: | 17 |
| 1. To promote and protect the interest of consumers of | 18 |
| individual and group annuity, life insurance, disability | 19 |
| income and long-term care insurance products; | 20 |
| 2. To develop uniform standards for insurance products | 21 |
| covered under the Compact; |
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| 3. To establish a central clearinghouse to receive and | 2 |
| provide prompt review of insurance products covered under | 3 |
| the Compact and, in certain cases, advertisements related | 4 |
| thereto, submitted by insurers authorized to do business in | 5 |
| one or more Compacting States; | 6 |
| 4. To give appropriate regulatory approval to those | 7 |
| product filings and advertisements satisfying the | 8 |
| applicable uniform standard; | 9 |
| 5. To improve coordination of regulatory resources and | 10 |
| expertise between state insurance departments regarding | 11 |
| the setting of uniform standards and review of insurance | 12 |
| products covered under the Compact; | 13 |
| 6. To create the Interstate Insurance Product | 14 |
| Regulation Commission; and | 15 |
| 7. To perform these and such other related functions as | 16 |
| may be consistent with the state regulation of the business | 17 |
| of insurance. | 18 |
| Article II. DEFINITIONS | 19 |
| For purposes of this Compact: | 20 |
| 1. "Advertisement" means any material designed to | 21 |
| create public interest in a Product, or induce the public | 22 |
| to purchase, increase, modify, reinstate, borrow on, | 23 |
| surrender, replace or retain a policy, as more specifically | 24 |
| defined in the Rules and Operating Procedures of the | 25 |
| Commission. |
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| 2. "Bylaws" mean those bylaws established by the | 2 |
| Commission for its governance, or for directing or | 3 |
| controlling the Commission's actions or conduct. | 4 |
| 3. "Compacting State" means any State which has enacted | 5 |
| this Compact legislation and which has not withdrawn | 6 |
| pursuant to Article XIV, Section 1, or been terminated | 7 |
| pursuant to Article XIV, Section 2. | 8 |
| 4. "Commission" means the "Interstate Insurance | 9 |
| Product Regulation Commission" established by this | 10 |
| Compact. | 11 |
| 5. "Commissioner" means the chief insurance regulatory | 12 |
| official of a State including, but not limited to | 13 |
| commissioner, superintendent, director or administrator. | 14 |
| 6. "Domiciliary State" means the state in which an | 15 |
| Insurer is incorporated or organized; or, in the case of an | 16 |
| alien Insurer, its state of entry. | 17 |
| 7. "Insurer" means any entity licensed by a State to | 18 |
| issue contracts of insurance for any of the lines of | 19 |
| insurance covered by this Act. | 20 |
| 8. "Member" means the person chosen by a Compacting | 21 |
| State as its representative to the Commission, or his or | 22 |
| her designee. | 23 |
| 9. "Non-compacting State" means any State which is not | 24 |
| at the time a Compacting State. | 25 |
| 10. "Operating Procedures" mean procedures promulgated | 26 |
| by the Commission implementing a Rule, Uniform Standard or |
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| a provision of this Compact. | 2 |
| 11. "Product" means the form of a policy or contract, | 3 |
| including any application, endorsement, or related form | 4 |
| which is attached to and made a part of the policy or | 5 |
| contract, and any evidence of coverage or certificate, for | 6 |
| an individual or group annuity, life insurance, disability | 7 |
| income or long-term care insurance product that an Insurer | 8 |
| is authorized to issue. | 9 |
| 12. "Rule" means a statement of general or particular | 10 |
| applicability and future effect promulgated by the | 11 |
| Commission, including a Uniform Standard developed | 12 |
| pursuant to Article VII of this Compact, designed to | 13 |
| implement, interpret, or prescribe law or policy or | 14 |
| describing the organization, procedure, or practice | 15 |
| requirements of the Commission, which shall have the force | 16 |
| and effect of law in the Compacting States. | 17 |
| 13. "State" means any state, district or territory of | 18 |
| the United States of America. | 19 |
| 14. "Third-Party Filer" means an entity that submits a | 20 |
| Product filing to the Commission on behalf of an Insurer. | 21 |
| 15. "Uniform Standard" means a standard adopted by the | 22 |
| Commission for a Product line, pursuant to Article VII of | 23 |
| this Compact, and shall include all of the Product | 24 |
| requirements in aggregate; provided, that each Uniform | 25 |
| Standard shall be construed, whether express or implied, to | 26 |
| prohibit the use of any inconsistent, misleading or |
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| ambiguous provisions in a Product and the form of the | 2 |
| Product made available to the public shall not be unfair, | 3 |
| inequitable or against public policy as determined by the | 4 |
| Commission. | 5 |
| Article III. ESTABLISHMENT OF THE COMMISSION AND VENUE | 6 |
| 1. The Compacting States hereby create and establish a | 7 |
| joint public agency known as the "Interstate Insurance Product | 8 |
| Regulation Commission." Pursuant to Article IV, the Commission | 9 |
| will have the power to develop Uniform Standards for Product | 10 |
| lines, receive and provide prompt review of Products filed | 11 |
| therewith, and give approval to those Product filings | 12 |
| satisfying applicable Uniform Standards; provided, it is not | 13 |
| intended for the Commission to be the exclusive entity for | 14 |
| receipt and review of insurance product filings. Nothing herein | 15 |
| shall prohibit any Insurer from filing its product in any State | 16 |
| wherein the Insurer is licensed to conduct the business of | 17 |
| insurance; and any such filing shall be subject to the laws of | 18 |
| the State where filed. | 19 |
| 2. The Commission is a body corporate and politic, and an | 20 |
| instrumentality of the Compacting States. | 21 |
| 3. The Commission is solely responsible for its liabilities | 22 |
| except as otherwise specifically provided in this Compact. | 23 |
| 4. Venue is proper and judicial proceedings by or against | 24 |
| the Commission shall be brought solely and exclusively in a | 25 |
| Court of competent jurisdiction where the principal office of |
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| the Commission is located.
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| Article IV. POWERS OF THE COMMISSION | 3 |
| The Commission shall have the following powers: | 4 |
| 1. To promulgate Rules, pursuant to Article VII of this | 5 |
| Compact, which shall have the force and effect of law and | 6 |
| shall be binding in the Compacting States to the extent and | 7 |
| in the manner provided in this Compact; | 8 |
| 2. To exercise its rule-making authority and establish | 9 |
| reasonable Uniform Standards for Products covered under | 10 |
| the Compact, and Advertisement related thereto, which | 11 |
| shall have the force and effect of law and shall be binding | 12 |
| in the Compacting States, but only for those Products filed | 13 |
| with the Commission, provided, that a Compacting State | 14 |
| shall have the right to opt out of such Uniform Standard | 15 |
| pursuant to Article VII, to the extent and in the manner | 16 |
| provided in this Compact, and, provided further, that any | 17 |
| Uniform Standard established by the Commission for | 18 |
| long-term care insurance products may provide the same or | 19 |
| greater protections for consumers as, but shall not provide | 20 |
| less than, those protections set forth in the National | 21 |
| Association of Insurance Commissioners' Long-Term Care | 22 |
| Insurance Model Act and Long-Term Care Insurance Model | 23 |
| Regulation, respectively, adopted as of 2001. The | 24 |
| Commission shall consider whether any subsequent | 25 |
| amendments to the NAIC Long-Term Care Insurance Model Act |
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| or Long-Term Care Insurance Model Regulation adopted by the | 2 |
| NAIC require amending of the Uniform Standards established | 3 |
| by the Commission for long-term care insurance products; | 4 |
| 3. To receive and review in an expeditious manner | 5 |
| Products filed with the Commission, and rate filings for | 6 |
| disability income and long-term care insurance Products, | 7 |
| and give approval of those Products and rate filings that | 8 |
| satisfy the applicable Uniform Standard, where such | 9 |
| approval shall have the force and effect of law and be | 10 |
| binding on the Compacting States to the extent and in the | 11 |
| manner provided in the Compact; | 12 |
| 4. To receive and review in an expeditious manner | 13 |
| Advertisement relating to long-term care insurance | 14 |
| products for which Uniform Standards have been adopted by | 15 |
| the Commission, and give approval to all Advertisement that | 16 |
| satisfies the applicable Uniform Standard. For any product | 17 |
| covered under this Compact, other than long-term care | 18 |
| insurance products, the Commission shall have the | 19 |
| authority to require an insurer to submit all or any part | 20 |
| of its Advertisement with respect to that product for | 21 |
| review or approval prior to use, if the Commission | 22 |
| determines that the nature of the product is such that an | 23 |
| Advertisement of the product could have the capacity or | 24 |
| tendency to mislead the public. The actions of Commission | 25 |
| as provided in this section shall have the force and effect | 26 |
| of law and shall be binding in the Compacting States to the |
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| extent and in the manner provided in the Compact; | 2 |
| 5. To exercise its rule-making authority and designate | 3 |
| Products and Advertisement that may be subject to a | 4 |
| self-certification process without the need for prior | 5 |
| approval by the Commission. | 6 |
| 6. To promulgate Operating Procedures, pursuant to | 7 |
| Article VII of this Compact, which shall be binding in the | 8 |
| Compacting States to the extent and in the manner provided | 9 |
| in this Compact;
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| 7. To bring and prosecute legal proceedings or actions | 11 |
| in its name as the Commission; provided, that the standing | 12 |
| of any state insurance department to sue or be sued under | 13 |
| applicable law shall not be affected; | 14 |
| 8. To issue subpoenas requiring the attendance and | 15 |
| testimony of witnesses and the production of evidence; | 16 |
| 9. To establish and maintain offices;
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| 10. To purchase and maintain insurance and bonds; | 18 |
| 11. To borrow, accept or contract for services of | 19 |
| personnel, including, but not limited to, employees of a | 20 |
| Compacting State; | 21 |
| 12. To hire employees, professionals or specialists, | 22 |
| and elect or appoint officers, and to fix their | 23 |
| compensation, define their duties and give them | 24 |
| appropriate authority to carry out the purposes of the | 25 |
| Compact, and determine their qualifications; and to | 26 |
| establish the Commission's personnel policies and programs |
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| relating to, among other things, conflicts of interest, | 2 |
| rates of compensation and qualifications of personnel; | 3 |
| 13. To accept any and all appropriate donations and | 4 |
| grants of money, equipment, supplies, materials and | 5 |
| services, and to receive, utilize and dispose of the same; | 6 |
| provided that at all times the Commission shall strive to | 7 |
| avoid any appearance of impropriety; | 8 |
| 14. To lease, purchase, accept appropriate gifts or | 9 |
| donations of, or otherwise to own, hold, improve or use, | 10 |
| any property, real, personal or mixed; provided that at all | 11 |
| times the Commission shall strive to avoid any appearance | 12 |
| of impropriety; | 13 |
| 15. To sell, convey, mortgage, pledge, lease, | 14 |
| exchange, abandon or otherwise dispose of any property, | 15 |
| real, personal or mixed; | 16 |
| 16. To remit filing fees to Compacting States as may be | 17 |
| set forth in the Bylaws, Rules or Operating Procedures; | 18 |
| 17. To enforce compliance by Compacting States with | 19 |
| Rules, Uniform Standards, Operating Procedures and Bylaws; | 20 |
| 18. To provide for dispute resolution among Compacting | 21 |
| States; | 22 |
| 19. To advise Compacting States on issues relating to | 23 |
| Insurers domiciled or doing business in Non-compacting | 24 |
| jurisdictions, consistent with the purposes of this | 25 |
| Compact; | 26 |
| 20. To provide advice and training to those personnel |
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| in state insurance departments responsible for product | 2 |
| review, and to be a resource for state insurance | 3 |
| departments; | 4 |
| 21. To establish a budget and make expenditures; | 5 |
| 22. To borrow money; | 6 |
| 23. To appoint committees, including advisory | 7 |
| committees comprising Members, state insurance regulators, | 8 |
| state legislators or their representatives, insurance | 9 |
| industry and consumer representatives, and such other | 10 |
| interested persons as may be designated in the Bylaws; | 11 |
| 24. To provide and receive information from, and to | 12 |
| cooperate with law enforcement agencies; | 13 |
| 25. To adopt and use a corporate seal; and | 14 |
| 26. To perform such other functions as may be necessary | 15 |
| or appropriate to achieve the purposes of this Compact | 16 |
| consistent with the state regulation of the business of | 17 |
| insurance. | 18 |
| Article V. ORGANIZATION OF THE COMMISSION | 19 |
| 1. Membership, Voting and Bylaws. | 20 |
| a. Each Compacting State shall have and be limited to one | 21 |
| Member. Each Member shall be qualified to serve in that | 22 |
| capacity pursuant to applicable law of the Compacting State. | 23 |
| Any Member may be removed or suspended from office as provided | 24 |
| by the law of the State from which he or she shall be | 25 |
| appointed. Any vacancy occurring in the Commission shall be |
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| filled in accordance with the laws of the Compacting State | 2 |
| wherein the vacancy exists. Nothing herein shall be construed | 3 |
| to affect the manner in which a Compacting State determines the | 4 |
| election or appointment and qualification of its own | 5 |
| Commissioner. | 6 |
| b. Each Member shall be entitled to one vote and shall have | 7 |
| an opportunity to participate in the governance of the | 8 |
| Commission in accordance with the Bylaws. Notwithstanding any | 9 |
| provision herein to the contrary, no action of the Commission | 10 |
| with respect to the promulgation of a Uniform Standard shall be | 11 |
| effective unless two-thirds (2/3) of the Members vote in favor | 12 |
| thereof. | 13 |
| c. The Commission shall, by a majority of the Members, | 14 |
| prescribe Bylaws to govern its conduct as may be necessary or | 15 |
| appropriate to carry out the purposes, and exercise the powers, | 16 |
| of the Compact, including, but not limited to: | 17 |
| i. establishing the fiscal year of the Commission; | 18 |
| ii. providing reasonable procedures for appointing | 19 |
| and electing members, as well as holding meetings, of | 20 |
| the Management Committee; | 21 |
| iii. providing reasonable standards and | 22 |
| procedures: (i) for the establishment and meetings of | 23 |
| other committees, and (ii) governing any general or | 24 |
| specific delegation of any authority or function of the | 25 |
| Commission; | 26 |
| iv. providing reasonable procedures for calling |
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| and conducting meetings of the Commission that | 2 |
| consists of a majority of Commission members, ensuring | 3 |
| reasonable advance notice of each such meeting, and | 4 |
| providing for the right of citizens to attend each such | 5 |
| meeting with enumerated exceptions designed to protect | 6 |
| the public's interest, the privacy of individuals, and | 7 |
| insurers' proprietary information, including trade | 8 |
| secrets. The Commission may meet in camera only after a | 9 |
| majority of the entire membership votes to close a | 10 |
| meeting en toto or in part. As soon as practicable, the | 11 |
| Commission must make public (i) a copy of the vote to | 12 |
| close the meeting revealing the vote of each Member | 13 |
| with no proxy votes allowed, and (ii) votes taken | 14 |
| during such meeting; | 15 |
| v. establishing the titles, duties and authority | 16 |
| and reasonable procedures for the election of the | 17 |
| officers of the Commission; | 18 |
| vi. providing reasonable standards and procedures | 19 |
| for the establishment of the personnel policies and | 20 |
| programs of the Commission. Notwithstanding any civil | 21 |
| service or other similar laws of any Compacting State, | 22 |
| the Bylaws shall exclusively govern the personnel | 23 |
| policies and programs of the Commission; | 24 |
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vii. promulgating a code of ethics to address | 25 |
| permissible and prohibited activities of commission | 26 |
| members and employees; and
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| viii. providing a mechanism for winding up the | 2 |
| operations of the Commission and the equitable | 3 |
| disposition of any surplus funds that may exist after | 4 |
| the termination of the Compact after the payment and/or | 5 |
| reserving of all of its debts and obligations. | 6 |
| d. The Commission shall publish its bylaws in a convenient | 7 |
| form and file a copy thereof and a copy of any amendment | 8 |
| thereto, with the appropriate agency or officer in each of the | 9 |
| Compacting States. | 10 |
| 2. Management Committee, Officers and Personnel. | 11 |
| a. A Management Committee comprising no more than fourteen | 12 |
| (14) members shall be established as follows: | 13 |
| (i) One (1) member from each of the six (6) | 14 |
| Compacting States with the largest premium volume for | 15 |
| individual and group annuities, life, disability | 16 |
| income and long-term care insurance products, | 17 |
| determined from the records of the NAIC for the prior | 18 |
| year; | 19 |
| (ii) Four (4) members from those Compacting States | 20 |
| with at least two percent (2%) of the market based on | 21 |
| the premium volume described above, other than the six | 22 |
| (6) Compacting States with the largest premium volume, | 23 |
| selected on a rotating basis as provided in the Bylaws, | 24 |
| and; | 25 |
| (iii) Four (4) members from those Compacting | 26 |
| States with less than two percent (2%) of the market, |
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| based on the premium volume described above, with one | 2 |
| (1) selected from each of the four (4) zone regions of | 3 |
| the NAIC as provided in the Bylaws. | 4 |
| b. The Management Committee shall have such authority and | 5 |
| duties as may be set forth in the Bylaws, including but not | 6 |
| limited to:
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| i. managing the affairs of the Commission in a | 8 |
| manner consistent with the Bylaws and purposes of the | 9 |
| Commission; | 10 |
| ii. establishing and overseeing an organizational | 11 |
| structure within, and appropriate procedures for, the | 12 |
| Commission to provide for the creation of Uniform | 13 |
| Standards and other Rules, receipt and review of | 14 |
| product filings, administrative and technical support | 15 |
| functions, review of decisions regarding the | 16 |
| disapproval of a product filing, and the review of | 17 |
| elections made by a Compacting State to opt out of a | 18 |
| Uniform Standard; provided that a Uniform Standard | 19 |
| shall not be submitted to the Compacting States for | 20 |
| adoption unless approved by two-thirds (2/3) of the | 21 |
| members of the Management Committee; | 22 |
| iii. overseeing the offices of the Commission; and | 23 |
| iv. planning, implementing, and coordinating | 24 |
| communications and activities with other state, | 25 |
| federal and local government organizations in order to | 26 |
| advance the goals of the Commission. |
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| c. The Commission shall elect annually officers from the | 2 |
| Management Committee, with each having such authority and | 3 |
| duties, as may be specified in the Bylaws. | 4 |
| d. The Management Committee may, subject to the approval of | 5 |
| the Commission, appoint or retain an executive director for | 6 |
| such period, upon such terms and conditions and for such | 7 |
| compensation as the Commission may deem appropriate. The | 8 |
| executive director shall serve as secretary to the Commission, | 9 |
| but shall not be a Member of the Commission. The executive | 10 |
| director shall hire and supervise such other staff as may be | 11 |
| authorized by the Commission. | 12 |
| 3. Legislative and Advisory Committees. | 13 |
| a. A legislative committee comprising state legislators or | 14 |
| their designees shall be established to monitor the operations | 15 |
| of, and make recommendations to, the Commission, including the | 16 |
| Management Committee; provided that the manner of selection and | 17 |
| term of any legislative committee member shall be as set forth | 18 |
| in the Bylaws. Prior to the adoption by the Commission of any | 19 |
| Uniform Standard, revision to the Bylaws, annual budget or | 20 |
| other significant matter as may be provided in the Bylaws, the | 21 |
| Management Committee shall consult with and report to the | 22 |
| legislative committee.
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| b. The Commission shall establish two (2) advisory | 24 |
| committees, one of which shall comprise consumer | 25 |
| representatives independent of the insurance industry, and the | 26 |
| other comprising insurance industry representatives. |
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| c. The Commission may establish additional advisory | 2 |
| committees as its Bylaws may provide for the carrying out of | 3 |
| its functions. | 4 |
| 4. Corporate Records of the Commission.
The Commission | 5 |
| shall maintain its corporate books and records in accordance | 6 |
| with the Bylaws. | 7 |
| 5. Qualified Immunity, Defense and Indemnification. | 8 |
| a. The Members, officers, executive director, employees | 9 |
| and representatives of the Commission shall be immune from suit | 10 |
| and liability, either personally or in their official capacity, | 11 |
| for any claim for damage to or loss of property or personal | 12 |
| injury or other civil liability caused by or arising out of any | 13 |
| actual or alleged act, error or omission that occurred, or that | 14 |
| the person against whom the claim is made had a reasonable | 15 |
| basis for believing occurred within the scope of Commission | 16 |
| employment, duties or responsibilities; provided, that nothing | 17 |
| in this paragraph shall be construed to protect any such person | 18 |
| from suit and/or liability for any damage, loss, injury or | 19 |
| liability caused by the intentional or willful and wanton | 20 |
| misconduct of that person. | 21 |
| b. The Commission shall defend any Member, officer, | 22 |
| executive director, employee or representative of the | 23 |
| Commission in any civil action seeking to impose liability | 24 |
| arising out of any actual or alleged act, error or omission | 25 |
| that occurred within the scope of Commission employment, duties | 26 |
| or responsibilities, or that the person against whom the claim |
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| is made had a reasonable basis for believing occurred within | 2 |
| the scope of Commission employment, duties or | 3 |
| responsibilities; provided, that nothing herein shall be | 4 |
| construed to prohibit that person from retaining his or her own | 5 |
| counsel; and provided further, that the actual or alleged act, | 6 |
| error or omission did not result from that person's intentional | 7 |
| or willful and wanton misconduct. | 8 |
| c. The Commission shall indemnify and hold harmless any | 9 |
| Member, officer, executive director, employee or | 10 |
| representative of the Commission for the amount of any | 11 |
| settlement or judgment obtained against that person arising out | 12 |
| of any actual or alleged act, error or omission that occurred | 13 |
| within the scope of Commission employment, duties or | 14 |
| responsibilities, or that such person had a reasonable basis | 15 |
| for believing occurred within the scope of Commission | 16 |
| employment, duties or responsibilities, provided, that the | 17 |
| actual or alleged act, error or omission did not result from | 18 |
| the intentional or willful and wanton misconduct of that | 19 |
| person.
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| Article VI. MEETINGS AND ACTS OF THE COMMISSION | 21 |
| 1. The Commission shall meet and take such actions as are | 22 |
| consistent with the provisions of this Compact and the Bylaws. | 23 |
| 2. Each Member of the Commission shall have the right and | 24 |
| power to cast a vote to which that Compacting State is entitled | 25 |
| and to participate in the business and affairs of the |
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| Commission. A Member shall vote in person or by such other | 2 |
| means as provided in the Bylaws. The Bylaws may provide for | 3 |
| Members' participation in meetings by telephone or other means | 4 |
| of communication. | 5 |
| 3. The Commission shall meet at least once during each | 6 |
| calendar year. Additional meetings shall be held as set forth | 7 |
| in the Bylaws.
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| Article VII. RULES & OPERATING PROCEDURES: RULEMAKING | 9 |
| FUNCTIONS OF THE COMMISSION AND OPTING OUT OF UNIFORM STANDARDS | 10 |
| 1. Rulemaking Authority. The Commission shall promulgate | 11 |
| reasonable Rules, including Uniform Standards, and Operating | 12 |
| Procedures in order to effectively and efficiently achieve the | 13 |
| purposes of this Compact. Notwithstanding the foregoing, in the | 14 |
| event the Commission exercises its rulemaking authority in a | 15 |
| manner that is beyond the scope of the purposes of this Act, or | 16 |
| the powers granted hereunder, then such an action by the | 17 |
| Commission shall be invalid and have no force and effect. | 18 |
| 2. Rulemaking Procedure. Rules and Operating Procedures | 19 |
| shall be made pursuant to a rulemaking process that conforms to | 20 |
| the Model State Administrative Procedure Act of 1981 as | 21 |
| amended, as may be appropriate to the operations of the | 22 |
| Commission. Before the Commission adopts a Uniform Standard, | 23 |
| the Commission shall give written notice to the relevant state | 24 |
| legislative committee(s) in each Compacting State responsible | 25 |
| for insurance issues of its intention to adopt the Uniform |
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| Standard. The Commission in adopting a Uniform Standard shall | 2 |
| consider fully all submitted materials and issue a concise | 3 |
| explanation of its decision. | 4 |
| 3. Effective Date and Opt Out of a Uniform Standard. A | 5 |
| Uniform Standard shall become effective ninety (90) days after | 6 |
| its promulgation by the Commission or such later date as the | 7 |
| Commission may determine; provided, however, that a Compacting | 8 |
| State may opt out of a Uniform Standard as provided in this | 9 |
| Article. "Opt out" shall be defined as any action by a | 10 |
| Compacting State to decline to adopt or participate in a | 11 |
| promulgated Uniform Standard. All other Rules and Operating | 12 |
| Procedures, and amendments thereto, shall become effective as | 13 |
| of the date specified in each Rule, Operating Procedure or | 14 |
| amendment. | 15 |
| 4. Opt Out Procedure. A Compacting State may opt out of a | 16 |
| Uniform Standard, either by legislation or regulation duly | 17 |
| promulgated by the Insurance Department under the Compacting | 18 |
| State's Administrative Procedure Act. If a Compacting State | 19 |
| elects to opt out of a Uniform Standard by regulation, it must | 20 |
| (a) give written notice to the Commission no later than ten | 21 |
| (10) business days after the Uniform Standard is promulgated, | 22 |
| or at the time the State becomes a Compacting State and (b) | 23 |
| find that the Uniform Standard does not provide reasonable | 24 |
| protections to the citizens of the State, given the conditions | 25 |
| in the State. The Commissioner shall make specific findings of | 26 |
| fact and conclusions of law, based on a preponderance of the |
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|
SB2544 Enrolled |
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LRB096 17045 RPM 32363 b |
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| 1 |
| evidence, detailing the conditions in the State which warrant a | 2 |
| departure from the Uniform Standard and determining that the | 3 |
| Uniform Standard would not reasonably protect the citizens of | 4 |
| the State. The Commissioner must consider and balance the | 5 |
| following factors and find that the conditions in the State and | 6 |
| needs of the citizens of the State outweigh: (i) the intent of | 7 |
| the legislature to participate in, and the benefits of, an | 8 |
| interstate agreement to establish national uniform consumer | 9 |
| protections for the Products subject to this Act; and (ii) the | 10 |
| presumption that a Uniform Standard adopted by the Commission | 11 |
| provides reasonable protections to consumers of the relevant | 12 |
| Product.
| 13 |
| Notwithstanding the foregoing, a Compacting State may, at | 14 |
| the time of its enactment of this Compact, prospectively opt | 15 |
| out of all Uniform Standards involving long-term care insurance | 16 |
| products by expressly providing for such opt out in the enacted | 17 |
| Compact, and such an opt out shall not be treated as a material | 18 |
| variance in the offer or acceptance of any State to participate | 19 |
| in this Compact. Such an opt out shall be effective at the time | 20 |
| of enactment of this Compact by the Compacting State and shall | 21 |
| apply to all existing Uniform Standards involving long-term | 22 |
| care insurance products and those subsequently promulgated. | 23 |
| 5. Effect of Opt Out. If a Compacting State elects to opt | 24 |
| out of a Uniform Standard, the Uniform Standard shall remain | 25 |
| applicable in the Compacting State electing to opt out until | 26 |
| such time the opt out legislation is enacted into law or the |
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SB2544 Enrolled |
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LRB096 17045 RPM 32363 b |
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| 1 |
| regulation opting out becomes effective. | 2 |
| Once the opt out of a Uniform Standard by a Compacting | 3 |
| State becomes effective as provided under the laws of that | 4 |
| State, the Uniform Standard shall have no further force and | 5 |
| effect in that State unless and until the legislation or | 6 |
| regulation implementing the opt out is repealed or otherwise | 7 |
| becomes ineffective under the laws of the State. If a | 8 |
| Compacting State opts out of a Uniform Standard after the | 9 |
| Uniform Standard has been made effective in that State, the opt | 10 |
| out shall have the same prospective effect as provided under | 11 |
| Article XIV for withdrawals. | 12 |
| 6. Stay of Uniform Standard. If a Compacting State has | 13 |
| formally initiated the process of opting out of a Uniform | 14 |
| Standard by regulation, and while the regulatory opt out is | 15 |
| pending, the Compacting State may petition the Commission, at | 16 |
| least fifteen (15) days before the effective date of the | 17 |
| Uniform Standard, to stay the effectiveness of the Uniform | 18 |
| Standard in that State. The Commission may grant a stay if it | 19 |
| determines the regulatory opt out is being pursued in a | 20 |
| reasonable manner and there is a likelihood of success. If a | 21 |
| stay is granted or extended by the Commission, the stay or | 22 |
| extension thereof may postpone the effective date by up to | 23 |
| ninety (90) days, unless affirmatively extended by the | 24 |
| Commission; provided, a stay may not be permitted to remain in | 25 |
| effect for more than one (1) year unless the Compacting State | 26 |
| can show extraordinary circumstances which warrant a |
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SB2544 Enrolled |
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LRB096 17045 RPM 32363 b |
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| 1 |
| continuance of the stay, including, but not limited to, the | 2 |
| existence of a legal challenge which prevents the Compacting | 3 |
| State from opting out. A stay may be terminated by the | 4 |
| Commission upon notice that the rulemaking process has been | 5 |
| terminated. | 6 |
| 7. Not later than thirty (30) days after a Rule or | 7 |
| Operating Procedure is promulgated, any person may file a | 8 |
| petition for judicial review of the Rule or Operating | 9 |
| Procedure; provided, that the filing of such a petition shall | 10 |
| not stay or otherwise prevent the Rule or Operating Procedure | 11 |
| from becoming effective unless the court finds that the | 12 |
| petitioner has a substantial likelihood of success. The court | 13 |
| shall give deference to the actions of the Commission | 14 |
| consistent with applicable law and shall not find the Rule or | 15 |
| Operating Procedure to be unlawful if the Rule or Operating | 16 |
| Procedure represents a reasonable exercise of the Commission's | 17 |
| authority. | 18 |
| Article VIII. COMMISSION RECORDS AND ENFORCEMENT | 19 |
| 1. The Commission shall promulgate Rules establishing | 20 |
| conditions and procedures for public inspection and copying of | 21 |
| its information and official records, except such information | 22 |
| and records involving the privacy of individuals and insurers' | 23 |
| trade secrets. The Commission may promulgate additional Rules | 24 |
| under which it may make available to federal and state | 25 |
| agencies, including law enforcement agencies, records and |
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SB2544 Enrolled |
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LRB096 17045 RPM 32363 b |
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| 1 |
| information otherwise exempt from disclosure, and may enter | 2 |
| into agreements with such agencies to receive or exchange | 3 |
| information or records subject to nondisclosure and | 4 |
| confidentiality provisions. | 5 |
| 2. Except as to privileged records, data and information, | 6 |
| the laws of any Compacting State pertaining to confidentiality | 7 |
| or nondisclosure shall not relieve any Compacting State | 8 |
| Commissioner of the duty to disclose any relevant records, data | 9 |
| or information to the Commission; provided, that disclosure to | 10 |
| the Commission shall not be deemed to waive or otherwise affect | 11 |
| any confidentiality requirement; and further provided, that, | 12 |
| except as otherwise expressly provided in this Act, the | 13 |
| Commission shall not be subject to the Compacting State's laws | 14 |
| pertaining to confidentiality and nondisclosure with respect | 15 |
| to records, data and information in its possession. | 16 |
| Confidential information of the Commission shall remain | 17 |
| confidential after such information is provided to any | 18 |
| Commissioner. | 19 |
| 3. The Commission shall monitor Compacting States for | 20 |
| compliance with duly adopted Bylaws, Rules, including Uniform | 21 |
| Standards, and Operating Procedures. The Commission shall | 22 |
| notify any non-complying Compacting State in writing of its | 23 |
| noncompliance with Commission Bylaws, Rules or Operating | 24 |
| Procedures. If a non-complying Compacting State fails to remedy | 25 |
| its noncompliance within the time specified in the notice of | 26 |
| noncompliance, the Compacting State shall be deemed to be in |
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SB2544 Enrolled |
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LRB096 17045 RPM 32363 b |
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| 1 |
| default as set forth in Article XIV. | 2 |
| 4. The Commissioner of any State in which an Insurer is | 3 |
| authorized to do business, or is conducting the business of | 4 |
| insurance, shall continue to exercise his or her authority to | 5 |
| oversee the market regulation of the activities of the Insurer | 6 |
| in accordance with the provisions of the State's law. The | 7 |
| Commissioner's enforcement of compliance with the Compact is | 8 |
| governed by the following provisions: | 9 |
| a. With respect to the Commissioner's market regulation of | 10 |
| a Product or Advertisement that is approved or certified to the | 11 |
| Commission, the content of the Product or Advertisement shall | 12 |
| not constitute a violation of the provisions, standards or | 13 |
| requirements of the Compact except upon a final order of the | 14 |
| Commission, issued at the request of a Commissioner after prior | 15 |
| notice to the Insurer and an opportunity for hearing before the | 16 |
| Commission. | 17 |
| b. Before a Commissioner may bring an action for violation | 18 |
| of any provision, standard or requirement of the Compact | 19 |
| relating to the content of an Advertisement not approved or | 20 |
| certified to the Commission, the Commission, or an authorized | 21 |
| Commission officer or employee, must authorize the action. | 22 |
| However, authorization pursuant to this Paragraph does not | 23 |
| require notice to the Insurer, opportunity for hearing or | 24 |
| disclosure of requests for authorization or records of the | 25 |
| Commission's action on such requests. |
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SB2544 Enrolled |
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| 1 |
| Article IX. DISPUTE RESOLUTION | 2 |
| The Commission shall attempt, upon the request of a Member, | 3 |
| to resolve any disputes or other issues that are subject to | 4 |
| this Compact and which may arise between two or more Compacting | 5 |
| States, or between Compacting States and Non-compacting | 6 |
| States, and the Commission shall promulgate an Operating | 7 |
| Procedure providing for resolution of such disputes. | 8 |
| Article X. PRODUCT FILING AND APPROVAL | 9 |
| 1. Insurers and Third-Party Filers seeking to have a | 10 |
| Product approved by the Commission shall file the Product with, | 11 |
| and pay applicable filing fees to, the Commission. Nothing in | 12 |
| this Act shall be construed to restrict or otherwise prevent an | 13 |
| insurer from filing its Product with the insurance department | 14 |
| in any State wherein the insurer is licensed to conduct the | 15 |
| business of insurance, and such filing shall be subject to the | 16 |
| laws of the States where filed. | 17 |
| 2. The Commission shall establish appropriate filing and | 18 |
| review processes and procedures pursuant to Commission Rules | 19 |
| and Operating Procedures. Notwithstanding any provision herein | 20 |
| to the contrary, the Commission shall promulgate Rules to | 21 |
| establish conditions and procedures under which the Commission | 22 |
| will provide public access to Product filing information. In | 23 |
| establishing such Rules, the Commission shall consider the | 24 |
| interests of the public in having access to such information, | 25 |
| as well as protection of personal medical and financial |
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SB2544 Enrolled |
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| 1 |
| information and trade secrets, that may be contained in a | 2 |
| Product filing or supporting information. | 3 |
| 3. Any Product approved by the Commission may be sold or | 4 |
| otherwise issued in those Compacting States for which the | 5 |
| Insurer is legally authorized to do business. | 6 |
| Article XI. REVIEW OF COMMISSION DECISIONS REGARDING FILINGS | 7 |
| 1. Not later than thirty (30) days after the Commission has | 8 |
| given notice of a disapproved Product or Advertisement filed | 9 |
| with the Commission, the Insurer or Third Party Filer whose | 10 |
| filing was disapproved may appeal the determination to a review | 11 |
| panel appointed by the Commission. The Commission shall | 12 |
| promulgate Rules to establish procedures for appointing such | 13 |
| review panels and provide for notice and hearing. An allegation | 14 |
| that the Commission, in disapproving a Product or Advertisement | 15 |
| filed with the Commission, acted arbitrarily, capriciously, or | 16 |
| in a manner that is an abuse of discretion or otherwise not in | 17 |
| accordance with the law, is subject to judicial review in | 18 |
| accordance with Article III, section 5. | 19 |
| 2. The Commission shall have authority to monitor, review | 20 |
| and reconsider Products and Advertisement subsequent to their | 21 |
| filing or approval upon a finding that the product does not | 22 |
| meet the relevant Uniform Standard. Where appropriate, the | 23 |
| Commission may withdraw or modify its approval after proper | 24 |
| notice and hearing, subject to the appeal process in section 1 | 25 |
| above. |
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SB2544 Enrolled |
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| 1 |
| Article XII. FINANCE | 2 |
| 1. The Commission shall pay or provide for the payment of | 3 |
| the reasonable expenses of its establishment and organization. | 4 |
| To fund the cost of its initial operations, the Commission may | 5 |
| accept contributions and other forms of funding from the | 6 |
| National Association of Insurance Commissioners, Compacting | 7 |
| States and other sources. Contributions and other forms of | 8 |
| funding from other sources shall be of such a nature that the | 9 |
| independence of the Commission concerning the performance of | 10 |
| its duties shall not be compromised. | 11 |
| 2. The Commission shall collect a filing fee from each | 12 |
| Insurer and Third Party Filer filing a product with the | 13 |
| Commission to cover the cost of the operations and activities | 14 |
| of the Commission and its staff in a total amount sufficient to | 15 |
| cover the Commission's annual budget. | 16 |
| 3. The Commission's budget for a fiscal year shall not be | 17 |
| approved until it has been subject to notice and comment as set | 18 |
| forth in Article VII of this Compact. | 19 |
| 4. The Commission shall be exempt from all taxation in and | 20 |
| by the Compacting States. | 21 |
| 5. The Commission shall not pledge the credit of any | 22 |
| Compacting State, except by and with the appropriate legal | 23 |
| authority of that Compacting State. | 24 |
| 6. The Commission shall keep complete and accurate accounts | 25 |
| of all its internal receipts, including grants and donations, |
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SB2544 Enrolled |
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| and disbursements of all funds under its control. The internal | 2 |
| financial accounts of the Commission shall be subject to the | 3 |
| accounting procedures established under its Bylaws. The | 4 |
| financial accounts and reports including the system of internal | 5 |
| controls and procedures of the Commission shall be audited | 6 |
| annually by an independent certified public accountant. Upon | 7 |
| the determination of the Commission, but no less frequently | 8 |
| than every three (3) years, the review of the independent | 9 |
| auditor shall include a management and performance audit of the | 10 |
| Commission. The Commission shall make an Annual Report to the | 11 |
| Governor and legislature of the Compacting States, which shall | 12 |
| include a report of the independent audit. The Commission's | 13 |
| internal accounts shall not be confidential and such materials | 14 |
| may be shared with the Commissioner of any Compacting State | 15 |
| upon request, provided, however, that any work papers related | 16 |
| to any internal or independent audit and any information | 17 |
| regarding the privacy of individuals and insurers' proprietary | 18 |
| information, including trade secrets, shall remain | 19 |
| confidential. | 20 |
| 7. No Compacting State shall have any claim to or ownership | 21 |
| of any property held by or vested in the Commission or to any | 22 |
| Commission funds held pursuant to the provisions of this | 23 |
| Compact. | 24 |
| Article XIII. COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT | 25 |
| 1. Any State is eligible to become a Compacting State. |
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SB2544 Enrolled |
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| 1 |
| 2. The Compact shall become effective and binding upon | 2 |
| legislative enactment of the Compact into law by two Compacting | 3 |
| States; provided, the Commission shall become effective for | 4 |
| purposes of adopting Uniform Standards for, reviewing, and | 5 |
| giving approval or disapproval of, Products filed with the | 6 |
| Commission that satisfy applicable Uniform Standards only | 7 |
| after twenty-six (26) States are Compacting States or, | 8 |
| alternatively, by States representing greater than forty | 9 |
| percent (40%) of the premium volume for life insurance, | 10 |
| annuity, disability income and long-term care insurance | 11 |
| products, based on records of the NAIC for the prior year. | 12 |
| Thereafter, it shall become effective and binding as to any | 13 |
| other Compacting State upon enactment of the Compact into law | 14 |
| by that State.
| 15 |
| 3. Amendments to the Compact may be proposed by the | 16 |
| Commission for enactment by the Compacting States. No amendment | 17 |
| shall become effective and binding upon the Commission and the | 18 |
| Compacting States unless and until all Compacting States enact | 19 |
| the amendment into law. | 20 |
| Article XIV. WITHDRAWAL, DEFAULT AND TERMINATION | 21 |
| 1. Withdrawal. | 22 |
| a. Once effective, the Compact shall continue in force and | 23 |
| remain binding upon each and every Compacting State; provided, | 24 |
| that a Compacting State may withdraw from the Compact | 25 |
| ("Withdrawing State") by enacting a statute specifically |
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SB2544 Enrolled |
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| 1 |
| repealing the statute which enacted the Compact into law. | 2 |
| b. The effective date of withdrawal is the effective date | 3 |
| of the repealing statute. However, the withdrawal shall not | 4 |
| apply to any product filings approved or self-certified, or any | 5 |
| Advertisement of such products, on the date the repealing | 6 |
| statute becomes effective, except by mutual agreement of the | 7 |
| Commission and the Withdrawing State unless the approval is | 8 |
| rescinded by the Withdrawing State as provided in subsection e. | 9 |
| of this section. | 10 |
| c. The Commissioner of the Withdrawing State shall | 11 |
| immediately notify the Management Committee in writing upon the | 12 |
| introduction of legislation repealing this Compact in the | 13 |
| Withdrawing State. | 14 |
| d. The Commission shall notify the other Compacting States | 15 |
| of the introduction of such legislation within ten (10) days | 16 |
| after its receipt of notice thereof. | 17 |
| e. The Withdrawing State is responsible for all | 18 |
| obligations, duties and liabilities incurred through the | 19 |
| effective date of withdrawal, including any obligations, the | 20 |
| performance of which extend beyond the effective date of | 21 |
| withdrawal, except to the extent those obligations may have | 22 |
| been released or relinquished by mutual agreement of the | 23 |
| Commission and the Withdrawing State. The Commission's | 24 |
| approval of Products and Advertisement prior to the effective | 25 |
| date of withdrawal shall continue to be effective and be given | 26 |
| full force and effect in the Withdrawing State, unless formally |
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SB2544 Enrolled |
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| 1 |
| rescinded by the Withdrawing State in the same manner as | 2 |
| provided by the laws of the Withdrawing State for the | 3 |
| prospective disapproval of products or advertisement | 4 |
| previously approved under state law. | 5 |
| f. Reinstatement following withdrawal of any Compacting | 6 |
| State shall occur upon the effective date of the Withdrawing | 7 |
| State reenacting the Compact. | 8 |
| 2. Default. | 9 |
| a. If the Commission determines that any Compacting State | 10 |
| has at any time defaulted ("Defaulting State") in the | 11 |
| performance of any of its obligations or responsibilities under | 12 |
| this Compact, the Bylaws or duly promulgated Rules or Operating | 13 |
| Procedures, then, after notice and hearing as set forth in the | 14 |
| Bylaws, all rights, privileges and benefits conferred by this | 15 |
| Compact on the Defaulting State shall be suspended from the | 16 |
| effective date of default as fixed by the Commission. The | 17 |
| grounds for default include, but are not limited to, failure of | 18 |
| a Compacting State to perform its obligations or | 19 |
| responsibilities, and any other grounds designated in | 20 |
| Commission Rules. The Commission shall immediately notify the | 21 |
| Defaulting State in writing of the Defaulting State's | 22 |
| suspension pending a cure of the default. The Commission shall | 23 |
| stipulate the conditions and the time period within which the | 24 |
| Defaulting State must cure its default. If the Defaulting State | 25 |
| fails to cure the default within the time period specified by | 26 |
| the Commission, the Defaulting State shall be terminated from |
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|
SB2544 Enrolled |
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LRB096 17045 RPM 32363 b |
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| 1 |
| the Compact and all rights, privileges and benefits conferred | 2 |
| by this Compact shall be terminated from the effective date of | 3 |
| termination. | 4 |
| b. Product approvals by the Commission or product | 5 |
| self-certifications, or any Advertisement in connection with | 6 |
| such product, that are in force on the effective date of | 7 |
| termination shall remain in force in the Defaulting State in | 8 |
| the same manner as if the Defaulting State had withdrawn | 9 |
| voluntarily pursuant to paragraph 1 of this Article. | 10 |
| c. Reinstatement following termination of any Compacting | 11 |
| State requires a reenactment of the Compact. | 12 |
| 3. Dissolution of Compact. | 13 |
| a. The Compact dissolves effective upon the date of the | 14 |
| withdrawal or default of the Compacting State which reduces | 15 |
| membership in the Compact to one Compacting State. | 16 |
| b. Upon the dissolution of this Compact, the Compact | 17 |
| becomes null and void and shall be of no further force or | 18 |
| effect, and the business and affairs of the Commission shall be | 19 |
| wound up and any surplus funds shall be distributed in | 20 |
| accordance with the Bylaws. | 21 |
| Article XV. SEVERABILITY AND CONSTRUCTION | 22 |
| 1. The provisions of this Compact shall be severable; and | 23 |
| if any phrase, clause, sentence or provision is deemed | 24 |
| unenforceable, the remaining provisions of the Compact shall be | 25 |
| enforceable. |
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SB2544 Enrolled |
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LRB096 17045 RPM 32363 b |
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| 1 |
| 2. The provisions of this Compact shall be liberally | 2 |
| construed to effectuate its purposes. | 3 |
| Article XVI. BINDING EFFECT OF COMPACT AND OTHER LAWS | 4 |
| 1. Other Laws. | 5 |
| a. Nothing herein prevents the enforcement of any other law | 6 |
| of a Compacting State, except as provided in paragraph b of | 7 |
| this Article. | 8 |
| b. For any Product approved or certified to the Commission, | 9 |
| the Rules, Uniform Standards and any other requirements of the | 10 |
| Commission shall constitute the exclusive provisions | 11 |
| applicable to the content, approval and certification of such | 12 |
| Products. For Advertisement that is subject to the Commission's | 13 |
| authority, any Rule, Uniform Standard or other requirement of | 14 |
| the Commission which governs the content of the Advertisement | 15 |
| shall constitute the exclusive provision that a Commissioner | 16 |
| may apply to the content of the Advertisement. Notwithstanding | 17 |
| the foregoing, no action taken by the Commission shall abrogate | 18 |
| or restrict: (i) the access of any person to state courts; (ii) | 19 |
| remedies available under state law related to breach of | 20 |
| contract, tort, or other laws not specifically directed to the | 21 |
| content of the Product; (iii) state law relating to the | 22 |
| construction of insurance contracts; or (iv) the authority of | 23 |
| the attorney general of the state, including but not limited to | 24 |
| maintaining any actions or proceedings, as authorized by law. | 25 |
| c. All insurance products filed with individual States |
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|
SB2544 Enrolled |
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LRB096 17045 RPM 32363 b |
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| 1 |
| shall be subject to the laws of those States. | 2 |
| 2. Binding Effect of this Compact. | 3 |
| a. All lawful actions of the Commission, including all | 4 |
| Rules and Operating Procedures promulgated by the Commission, | 5 |
| are binding upon the Compacting States. | 6 |
| b. All agreements between the Commission and the Compacting | 7 |
| States are binding in accordance with their terms. | 8 |
| c. Upon the request of a party to a conflict over the | 9 |
| meaning or interpretation of Commission actions, and upon a | 10 |
| majority vote of the Compacting States, the Commission may | 11 |
| issue advisory opinions regarding the meaning or | 12 |
| interpretation in dispute. | 13 |
| d. In the event any provision of this Compact exceeds the | 14 |
| constitutional limits imposed on the legislature of any | 15 |
| Compacting State, the obligations, duties, powers or | 16 |
| jurisdiction sought to be conferred by that provision upon the | 17 |
| Commission shall be ineffective as to that Compacting State, | 18 |
| and those obligations, duties, powers or jurisdiction shall | 19 |
| remain in the Compacting State and shall be exercised by the | 20 |
| agency thereof to which those obligations, duties, powers or | 21 |
| jurisdiction are delegated by law in effect at the time this | 22 |
| Compact becomes effective.
| 23 |
| Section 99. Effective date. This Act takes effect upon | 24 |
| becoming law.
|
|