January 18, 2021
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       Florida Senate - 2010                                    SB 2456
       By Senator Ring
       32-01876-10                                           20102456__
    1                        A bill to be entitled                      
    2         An act relating to the Interstate Insurance Product
    3         Regulation Compact; providing legislative findings and
    4         intent; providing purposes; defining terms; creating
    5         the Interstate Insurance Product Regulation
    6         Commission; providing responsibilities of the
    7         commission; specifying the commission as an
    8         instrumentality of the compact states; providing for
    9         venue; specifying the powers of the commission;
   10         providing for organization of the commission;
   11         providing for membership, voting, and bylaws;
   12         designating the Commissioner of the Office of
   13         Insurance Regulation as the representative of Florida
   14         on the commission; requiring the commission to draft
   15         bylaws; specifying matters to be addressed in the
   16         bylaws; requiring the commissioners to adopt a code of
   17         ethics; providing for a management committee,
   18         officers, and personnel of the commission; providing
   19         authority of the management committee; providing for
   20         legislative and advisory committees; providing for
   21         qualified immunity, defense, and indemnification of
   22         members, officers, employees, and representatives of
   23         the commission; providing for meetings and acts of the
   24         commission; providing rules and operating procedures;
   25         providing rulemaking functions of the commission;
   26         providing for opting out of the uniform standards;
   27         providing procedures and requirements for opting out;
   28         providing for commission records and enforcement;
   29         authorizing the commission to adopt rules; providing
   30         for disclosure of certain information; requiring the
   31         commission to monitor compact states for compliance;
   32         providing for dispute resolution; providing for
   33         product filing and approval; requiring the commission
   34         to establish filing and review processes and
   35         procedures; providing for review of commission
   36         decisions regarding filings; providing for the
   37         financing of commission activities; providing for
   38         payment of expenses; authorizing the commission to
   39         collect filing fees for certain purposes; providing
   40         for approval of a commission budget; exempting the
   41         commission from all taxation; prohibiting the
   42         commission from pledging the credit of any compact
   43         states without authority; requiring that the
   44         commission keep complete accurate accounts, provide
   45         for audits, and make annual reports to the Governors
   46         and Legislatures of compact states; providing for
   47         effective date and amendment of the compact; providing
   48         for withdrawal from the compact, default by compact
   49         states, and dissolution of the compact; providing for
   50         severability and construction; providing for the
   51         binding effect of the compact and other laws;
   52         providing a contingent effective date.
   54  Be It Enacted by the Legislature of the State of Florida:
   56         Section 1. Legislative findings; intent.—
   57         (1)The Legislature finds that the financial services
   58  marketplace has changed significantly in recent years and that
   59  asset-based insurance products, which include life insurance,
   60  annuities, disability income insurance, and long-term care
   61  insurance, now compete directly with other retirement and estate
   62  planning instruments that are sold by banks and securities
   63  firms.
   64         (2)The Legislature further finds that the increased
   65  mobility of the population and the risks borne by these asset
   66  based products are no longer local in nature.
   67         (3)The Legislature also finds that the Interstate
   68  Insurance Product Regulation Compact Model adopted by the
   69  National Association of Insurance Commissioners and endorsed by
   70  the National Conference of Insurance Legislators and the
   71  National Conference of State Legislatures is designed to address
   72  these market changes by providing a uniform set of product
   73  standards and a single source for the filing of new products.
   74         (4)The Legislature further finds that the product
   75  standards that have been developed provide a high level of
   76  consumer protection.
   77         (5)(a)The Legislature further finds that the Interstate
   78  Insurance Product Regulation Compact includes a mechanism for
   79  opting out of all uniform standards involving long-term care
   80  insurance products. The Legislature hereby purposefully opts out
   81  and excludes long-term care insurance products from this state’s
   82  agreement to abide by the decisions of the compact, thereby
   83  leaving the authority over long-term care insurance products
   84  with the state. The state relies on that understanding in
   85  adopting this legislation.
   86         (b)The state, pursuant to the terms and conditions of this
   87  compact, intends to join with other states to establish the
   88  Interstate Insurance Product Regulation Compact, and thus become
   89  a member of the Interstate Insurance Product Regulation
   90  Commission. The Commissioner of Insurance Regulation is hereby
   91  designated to serve as the representative of this state on the
   92  commission.
   93         Section 2. Interstate Insurance Product Regulation
   94  Compact.—The Interstate Insurance Product Regulation Compact is
   95  hereby enacted into law and entered into by this state with all
   96  states legally joining therein in the form substantially as
   97  follows:
  100                              PREAMBLE                             
  102         This compact is intended to help states join together to
  103  establish an interstate compact to regulate designated insurance
  104  products. Pursuant to the terms and conditions of this compact,
  105  this state intends to join with other states to establish the
  106  Interstate Insurance Product Regulation Compact and thus become
  107  a member of the Interstate Insurance Product Regulation
  108  Commission.
  109                              ARTICLE I                            
  110                               PURPOSE                             
  112         The purposes of this compact are, through means of joint
  113  and cooperative action among the compact states, to:
  114         (1)Promote and protect the interest of consumers of
  115  individual and group annuity, life insurance, disability income,
  116  and long-term care insurance products.
  117         (2)Develop uniform standards for insurance products
  118  covered under the compact.
  119         (3)Establish a central clearinghouse to receive and
  120  provide prompt review of insurance products covered under the
  121  compact and, in certain cases, advertisements related thereto,
  122  submitted by insurers authorized to do business in one or more
  123  of the compact states.
  124         (4)Give appropriate regulatory approval to those product
  125  filings and advertisements satisfying the applicable uniform
  126  standard.
  127         (5)Improve coordination of regulatory resources and
  128  expertise between state insurance departments regarding the
  129  setting of uniform standards and review of insurance products
  130  covered under the compact.
  131         (6)Create the Interstate Insurance Product Regulation
  132  Commission.
  133         (7)Perform these and such other related functions as may
  134  be consistent with the state regulation of the business of
  135  insurance.
  136                             ARTICLE II                            
  137                             DEFINITIONS                           
  139         As used in this compact, the term:
  140         (1)“Advertisement” or “advertising” means any material
  141  designed to create public interest in a product, or induce the
  142  public to purchase, increase, modify, reinstate, borrow on,
  143  surrender, replace, or retain a policy, as more specifically
  144  defined in the rules and operating procedures of the commission.
  145         (2)“Bylaws” mean those bylaws established by the
  146  commission for its governance, or for directing or controlling
  147  the commission’s actions or conduct.
  148         (3)“Compact state” means any state that has enacted this
  149  compact legislation and has not withdrawn from the compact
  150  pursuant to subsection (1) of Article XIV or been terminated
  151  from the compact pursuant to subsection (2) of Article XIV of
  152  this compact.
  153         (4)“Commission” means the “Interstate Insurance Product
  154  Regulation Commission” established by this compact.
  155         (5)“Commissioner” means the chief insurance regulatory
  156  official of a state, including, but not limited to,
  157  commissioner, superintendent, director, or administrator. For
  158  purposes of this compact, the Commissioner of the Office of
  159  Insurance Regulation is the chief insurance regulatory official
  160  of this state.
  161         (6)“Domiciliary state” means the state in which an insurer
  162  is incorporated or organized or, in the case of an alien
  163  insurer, its state of entry.
  164         (7)“Insurer” means any entity licensed by a state to issue
  165  contracts of insurance for any of the lines of insurance covered
  166  by this compact.
  167         (8)“Member” means the person chosen by a compact state as
  168  its representative to the commission, or his or her designee.
  169         (9)“Noncompact state” means a state that is not at the
  170  time a compact state.
  171         (10)“Operating procedures” mean procedures adopted by the
  172  commission implementing a rule, uniform standard, or provision
  173  of this compact.
  174         (11)Opt out” means any action by a compact state to
  175  decline to adopt or participate in an adopted uniform standard.
  176         (12)“Product” means the form of a policy or contract,
  177  including any application, endorsement, or related form, which
  178  is attached to and made a part of the policy or contract, and
  179  any evidence of coverage or certificate, for an individual or
  180  group annuity, life insurance, disability income, or long-term
  181  care insurance product that an insurer is authorized to issue.
  182         (13)“Rule” means a statement of general or particular
  183  applicability and future effect adopted by the commission,
  184  including a uniform standard developed pursuant to Article VII
  185  of this compact, designed to implement, interpret, or prescribe
  186  law or policy or describing the organization, procedure, or
  187  practice requirements of the commission, which shall have the
  188  force and effect of law in the compact states.
  189         (14)“State” means any state, district, or territory of the
  190  United States.
  191         (15)“Third-party filer” means an entity that submits a
  192  product filing to the commission on behalf of an insurer.
  193         (16)“Uniform standard” means a standard adopted by the
  194  commission for a product line pursuant to Article VII of this
  195  compact and includes all of the product requirements in
  196  aggregate; provided, each uniform standard shall be construed,
  197  whether express or implied, to prohibit the use of any
  198  inconsistent, misleading, or ambiguous provisions in a product
  199  and the form of the product made available to the public shall
  200  not be unfair, inequitable, or against public policy as
  201  determined by the commission.
  203                             ARTICLE III                           
  204               COMMISSION, ESTABLISHMENT, AND VENUE.—              
  206         (1)The compact states hereby create and establish a joint
  207  public agency known as the Interstate Insurance Product
  208  Regulation Commission. Pursuant to Article IV of this compact,
  209  the commission has the power to develop uniform standards for
  210  product lines, receive and provide prompt review of products
  211  filed with the commission, and give approval to those product
  212  filings satisfying applicable uniform standards; provided it is
  213  not intended for the commission to be the exclusive entity for
  214  receipt and review of insurance product filings. This article
  215  does not prohibit any insurer from filing its product in any
  216  state in which the insurer is licensed to conduct the business
  217  of insurance and any such filing is subject to the laws of the
  218  state where filed.
  219         (2)The commission is a body corporate and politic and an
  220  instrumentality of the compact states.
  221         (3)The commission is solely responsible for its
  222  liabilities, except as otherwise specifically provided in this
  223  compact.
  224         (4)Venue is proper and judicial proceedings by or against
  225  the commission shall be brought solely and exclusively in a
  226  court of competent jurisdiction where the principal office of
  227  the commission is located.
  229                             ARTICLE IV                            
  230                               POWERS                              
  232         The commission has the power to:
  233         (1)Adopt rules, pursuant to Article VII of this compact,
  234  which have the force and effect of law and are binding in the
  235  compact states to the extent and in the manner provided in this
  236  compact.
  237         (2)Exercise its rulemaking authority and establish
  238  reasonable uniform standards for products covered under the
  239  compact, and advertising related to it, which have the force and
  240  effect of law and are binding in the compact states, but only
  241  for those products filed with the commission; provided a compact
  242  state has the right to opt out of such uniform standard pursuant
  243  to Article VII of this compact to the extent and in the manner
  244  provided in this compact and any uniform standard established by
  245  the commission for long-term care insurance products may provide
  246  the same or greater protections for consumers as, but shall not
  247  provide less than, those protections set forth in the National
  248  Association of Insurance Commissioners’ Long-Term Care Insurance
  249  Model Act and Long-Term Care Insurance Model Regulation,
  250  respectively, adopted as of 2001. The commission shall consider
  251  whether any subsequent amendments to the National Association of
  252  Insurance Commissioners’ Long-Term Care Insurance Model Act or
  253  Long-Term Care Insurance Model Regulation adopted by the
  254  National Association of Insurance Commissioners require amending
  255  of the uniform standards established by the commission for long
  256  term care insurance products.
  257         (3)Receive and review in an expeditious manner products
  258  filed with the commission and rate filings for disability income
  259  and long-term care insurance products and give approval of those
  260  products and rate filings that satisfy the applicable uniform
  261  standard, and such approval has the force and effect of law and
  262  is binding on the compact states to the extent and in the manner
  263  provided in the compact.
  264         (4)Receive and review in an expeditious manner advertising
  265  relating to long-term care insurance products for which uniform
  266  standards have been adopted by the commission, and give approval
  267  to all advertisement that satisfies the applicable uniform
  268  standard. For any product covered under this compact, other than
  269  long-term care insurance products, the commission has the
  270  authority to require an insurer to submit all or any part of its
  271  advertising with respect to that product for review or approval
  272  before its use, if the commission determines that the nature of
  273  the product is such that an advertisement of the product could
  274  have the capacity or tendency to mislead the public. The actions
  275  of the commission as provided in this subsection have the force
  276  and effect of law and are binding in the compact states to the
  277  extent and in the manner provided in the compact.
  278         (5)Exercise its rulemaking authority and designate
  279  products and advertisement that may be subject to a self
  280  certification process without the need for prior approval by the
  281  commission.
  282         (6)Adopt operating procedures, pursuant to Article VII of
  283  this compact, which are binding in the compact states to the
  284  extent and in the manner provided in this compact.
  285         (7)Bring and prosecute legal proceedings or actions in its
  286  name as the commission; provided the standing of any state
  287  insurance department to sue or be sued under applicable law
  288  shall not be affected.
  289         (8)Issue subpoenas requiring the attendance and testimony
  290  of witnesses and the production of evidence.
  291         (9)Establish and maintain offices.
  292         (10)Purchase and maintain insurance and bonds.
  293         (11)Borrow, accept, or contract for services of personnel,
  294  including, but not limited to, employees of a compact state.
  295         (12)Hire employees, professionals, or specialists; elect
  296  or appoint officers and fix their compensation, define their
  297  duties, give them appropriate authority to carry out the
  298  purposes of the compact, and determine their qualifications; and
  299  establish the commission’s personnel policies and programs
  300  relating to, among other things, conflicts of interest, rates of
  301  compensation, and qualifications of personnel.
  302         (13)Accept any and all appropriate donations and grants of
  303  money, equipment, supplies, materials, and services and to
  304  receive, use, and dispose of the same; provided at all times the
  305  commission shall strive to avoid any appearance of impropriety.
  306         (14)Lease, purchase, and accept appropriate gifts or
  307  donations of, or otherwise to own, hold, improve, or use, any
  308  property, real, personal, or mixed; provided at all times the
  309  commission shall strive to avoid any appearance of impropriety.
  310         (15)Sell, convey, mortgage, pledge, lease, exchange,
  311  abandon, or otherwise dispose of any property whether real,
  312  personal, or mixed.
  313         (16)Remit filing fees to compact states as may be set
  314  forth in the bylaws, rules, or operating procedures.
  315         (17)Enforce compliance by compact states with rules,
  316  uniform standards, operating procedures, and bylaws.
  317         (18)Provide for dispute resolution among compact states.
  318         (19)Advise compact states on issues relating to insurers
  319  domiciled or doing business in noncompact jurisdictions,
  320  consistent with the purposes of this compact.
  321         (20)Provide advice and training to those personnel in
  322  state insurance departments responsible for product review and
  323  be a resource for state insurance departments.
  324         (21)Establish a budget and make expenditures.
  325         (22)Borrow money.
  326         (23)Appoint committees, including advisory committees,
  327  comprising members, state insurance regulators, state
  328  legislators or their representatives, insurance industry and
  329  consumer representatives, and such other interested persons as
  330  may be designated in the bylaws.
  331         (24)Provide and receive information from and to cooperate
  332  with law enforcement agencies.
  333         (25)Adopt and use a corporate seal.
  334         (26)Perform such other functions as may be necessary or
  335  appropriate to achieve the purposes of this compact consistent
  336  with the state regulation of the business of insurance.
  338                              ARTICLE V                            
  339                            ORGANIZATION                           
  342         (a)1.Each compact state shall have and be limited to one
  343  member. Each member must be qualified to serve in that capacity
  344  pursuant to applicable law of the compact state. Any member may
  345  be removed or suspended from office as provided by the law of
  346  the state from which he or she is appointed. Any vacancy
  347  occurring in the commission shall be filled in accordance with
  348  the laws of the compact state in which the vacancy exists. This
  349  article does not affect the manner in which a compact state
  350  determines the election or appointment and qualification of its
  351  own commissioner.
  352         2.The Commissioner of the Office of Insurance Regulation
  353  is hereby designated to serve as the representative of this
  354  state on the commission.
  355         (b)Each member is entitled to one vote and shall have an
  356  opportunity to participate in the governance of the commission
  357  in accordance with the bylaws. Notwithstanding any other
  358  provision of this article, the commission shall take no action
  359  with respect to the adoption of a uniform standard unless two
  360  thirds of the members vote in favor of such action.
  361         (c)The commission shall, by a majority of the members,
  362  prescribe the bylaws to govern its conduct as may be necessary
  363  or appropriate to carry out the purposes and exercise the powers
  364  of the compact, including, but not limited to:
  365         1.Establishing the fiscal year of the commission.
  366         2.Providing reasonable procedures for appointing and
  367  electing members, as well as holding meetings, of the management
  368  committee.
  369         3.Providing reasonable standards and procedures:
  370         a.For the establishment and meetings of other committees.
  371         b.Governing any general or specific delegation of any
  372  authority or function of the commission.
  373         4.Providing reasonable procedures for calling and
  374  conducting meetings of the commission which consist of a
  375  majority of commission members, ensuring reasonable advance
  376  notice of each such meeting, and providing for the right of
  377  citizens to attend each such meeting with enumerated exceptions
  378  designed to protect the public’s interest, the privacy of
  379  individuals, and insurers’ proprietary information, including,
  380  but not limited to, trade secrets. The commission may meet in
  381  camera only after a majority of the entire membership votes to
  382  close a meeting in total or in part. As soon as practicable, the
  383  commission must make public a copy of the vote to close the
  384  meeting revealing the vote of each member, with no proxy votes
  385  allowed, and votes taken during such meeting.
  386         5.Establishing the titles, duties, and authority and
  387  reasonable procedures for the election of the officers of the
  388  commission.
  389         6.Providing reasonable standards and procedures for the
  390  establishment of the personnel policies and programs of the
  391  commission. Notwithstanding any civil service or other similar
  392  law of any compact state, the bylaws of the commission shall
  393  exclusively govern the personnel policies and programs of the
  394  commission.
  395         7.Adopting a code of ethics to address permissible and
  396  prohibited activities of commission members and employees.
  397         8.Providing a mechanism for winding up the operations of
  398  the commission and the equitable disposition of any surplus
  399  funds that may exist after the termination of the compact after
  400  the payment or reserving of all debts and obligations of the
  401  commission.
  402         (d)The commission shall publish its bylaws in a convenient
  403  form and file a copy of such bylaws, and a copy of any amendment
  404  to such bylaws, with the appropriate agency or officer in each
  405  of the compact States.
  407         (a)A management committee comprising no more than 14
  408  members shall be established as follows:
  409         1.One member from each of the six compact states having
  410  the largest premium volume for individual and group annuities,
  411  life, disability income, and long-term care insurance products,
  412  determined from the records of the National Association of
  413  Insurance Commissioners for the prior year.
  414         2.Four members from those compact states having at least 2
  415  percent of the market, based on the premium volume described
  416  above, other than the six compact states having the largest
  417  premium volume, selected on a rotating basis as provided in the
  418  bylaws.
  419         3.Four members from those compact states having less than
  420  2 percent of the market, based on the premium volume described
  421  above, with one member selected from each of the four zone
  422  regions of the National Association of Insurance Commissioners
  423  as provided in the bylaws.
  424         (b)The management committee shall have such authority and
  425  duties as may be set forth in the bylaws, including, but not
  426  limited to:
  427         1.Managing the affairs of the commission in a manner
  428  consistent with the bylaws and purposes of the commission.
  429         2.Establishing and overseeing an organizational structure
  430  within, and appropriate procedures for, the commission to
  431  provide for the creation of uniform standards and other rules,
  432  receipt and review of product filings, administrative and
  433  technical support functions, review of decisions regarding the
  434  disapproval of a product filing, and the review of elections
  435  made by a compact state to opt out of a uniform standard;
  436  provided a uniform standard shall not be submitted to the
  437  compact states for adoption unless approved by two-thirds of the
  438  members of the management committee.
  439         3.Overseeing the offices of the commission.
  440         4.Planning, implementing, and coordinating communications
  441  and activities with other state, federal, and local government
  442  organizations in order to advance the goals of the commission.
  443         (c)The commission shall elect annually officers from the
  444  management committee, with each having such authority and duties
  445  as may be specified in the bylaws.
  446         (d)The management committee may, subject to the approval
  447  of the commission, appoint or retain an executive director for
  448  such period, upon such terms and conditions, and for such
  449  compensation as the commission may deem appropriate. The
  450  executive director shall serve as secretary to the commission
  451  but is not a member of the commission. The executive director
  452  shall hire and supervise such other staff as may be authorized
  453  by the commission.
  455         (a)A legislative committee comprised of state legislators
  456  or their designees shall be established to monitor the
  457  operations of and make recommendations to the commission,
  458  including the management committee; provided the manner of
  459  selection and term of any legislative committee member shall be
  460  as set forth in the bylaws. Prior to the adoption by the
  461  commission of any uniform standard, revision to the bylaws,
  462  annual budget, or other significant matter as may be provided in
  463  the bylaws, the management committee shall consult with and
  464  report to the legislative committee.
  465         (b)The commission shall establish two advisory committees,
  466  one comprising consumer representatives independent of the
  467  insurance industry and the other comprising insurance industry
  468  representatives.
  469         (c)The commission may establish additional advisory
  470  committees as the bylaws may provide for the carrying out of
  471  commission functions.
  472         (4)CORPORATE RECORDS OF THE COMMISSION.The commission
  473  shall maintain its corporate books and records in accordance
  474  with the bylaws.
  476         (a)The members, officers, executive director, employees,
  477  and representatives of the commission shall be immune from suit
  478  and liability, either personally or in their official capacity,
  479  for any claim for damage to or loss of property or personal
  480  injury or other civil liability caused by or arising out of any
  481  actual or alleged act, error, or omission that occurred, or that
  482  the person against whom the claim is made had a reasonable basis
  483  for believing occurred within the scope of commission
  484  employment, duties, or responsibilities; provided nothing in
  485  this paragraph shall be construed to protect any such person
  486  from suit or liability for any damage, loss, injury, or
  487  liability caused by the intentional or willful and wanton
  488  misconduct of that person.
  489         (b)The commission shall defend any member, officer,
  490  executive director, employee, or representative of the
  491  commission in any civil action seeking to impose liability
  492  arising out of any actual or alleged act, error, or omission
  493  that occurred within the scope of commission employment, duties,
  494  or responsibilities, or that the person against whom the claim
  495  is made had a reasonable basis for believing occurred within the
  496  scope of commission employment, duties, or responsibilities;
  497  provided nothing in this article shall be construed to prohibit
  498  that person from retaining his or her own counsel and the actual
  499  or alleged act, error, or omission did not result from that
  500  person’s intentional or willful and wanton misconduct.
  501         (c)The commission shall indemnify and hold harmless any
  502  member, officer, executive director, employee, or representative
  503  of the commission for the amount of any settlement or judgment
  504  obtained against that person arising out of any actual or
  505  alleged act, error, or omission that occurred within the scope
  506  of commission employment, duties, or responsibilities, or that
  507  such person had a reasonable basis for believing occurred within
  508  the scope of commission employment, duties, or responsibilities;
  509  provided the actual or alleged act, error, or omission did not
  510  result from the intentional or willful and wanton misconduct of
  511  that person.
  513                             ARTICLE VI                            
  514                          MEETINGS AND ACTS                        
  516         (1)The commission shall meet and take such actions as are
  517  consistent with the provisions of this compact and the bylaws.
  518         (2)Each member of the commission shall have the right and
  519  power to cast a vote to which that compact state is entitled and
  520  to participate in the business and affairs of the commission. A
  521  member shall vote in person or by such other means as provided
  522  in the bylaws. The bylaws may provide for members’ participation
  523  in meetings by telephone or other means of communication.
  524         (3)The commission shall meet at least once during each
  525  calendar year. Additional meetings shall be held as set forth in
  526  the bylaws.
  528                             ARTICLE VII                           
  532         (1)RULEMAKING AUTHORITY.—The commission shall adopt
  533  reasonable rules, including uniform standards, and operating
  534  procedures in order to effectively and efficiently achieve the
  535  purposes of this compact. Notwithstanding such requirement, if
  536  the commission exercises its rulemaking authority in a manner
  537  that is beyond the scope of the purposes of this compact or the
  538  powers granted under this compact, such action by the commission
  539  shall be invalid and have no force and effect.
  540         (2)RULEMAKING PROCEDURE.—Rules and operating procedures
  541  shall be made pursuant to a rulemaking process that conforms to
  542  the Model State Administrative Procedure Act of 1981, as
  543  amended, as may be appropriate to the operations of the
  544  commission. Before the commission adopts a uniform standard, the
  545  commission shall give written notice to the relevant state
  546  legislative committees in each compact state responsible for
  547  insurance issues of its intention to adopt the uniform standard.
  548  The commission, in adopting a uniform standard, shall consider
  549  fully all submitted materials and issue a concise explanation of
  550  its decision.
  552  uniform standard shall become effective 90 days after its
  553  adoption by the commission or such later date as the commission
  554  may determine; provided a compact state may opt out of a uniform
  555  standard as provided in this article. All other rules and
  556  operating procedures, and amendments thereto, shall become
  557  effective as of the date specified in each rule, operating
  558  procedure, or amendment.
  559         (4)OPT-OUT PROCEDURE.—
  560         (a)A compact state may opt out of a uniform standard by
  561  legislation or regulation adopted by the Office of Insurance
  562  Regulation under such state’s Administrative Procedure Act. For
  563  purposes of this compact and this state, the Office of Insurance
  564  Regulation constitutes this state’s agency for purposes of this
  565  subsection. If a compact state elects to opt out of a uniform
  566  standard by regulation, the state must:
  567         1.Give written notice to the commission no later than 10
  568  business days after the uniform standard is adopted, or at the
  569  time the state becomes a compact state.
  570         2.Find that the uniform standard does not provide
  571  reasonable protections to the residents of the state, given the
  572  conditions in the state.
  573         (b)The commissioner shall make specific findings of fact
  574  and conclusions of law, based on a preponderance of the
  575  evidence, detailing the conditions in the state which warrant a
  576  departure from the uniform standard and determining that the
  577  uniform standard would not reasonably protect the residents of
  578  the state. The commissioner must consider and balance the
  579  following factors and find that the conditions in the state and
  580  needs of the residents of the state outweigh:
  581         1.The intent of the Legislature to participate in, and the
  582  benefits of, an interstate agreement to establish national
  583  uniform consumer protections for the products subject to this
  584  compact.
  585         2.The presumption that a uniform standard adopted by the
  586  commission provides reasonable protections to consumers of the
  587  relevant product.
  589  Notwithstanding this subsection, a compact state may, at the
  590  time of its enactment of this compact, prospectively opt out of
  591  all uniform standards involving long-term care insurance
  592  products by expressly providing for such opt out in the enacted
  593  compact, and such an opt out shall not be treated as a material
  594  variance in the offer or acceptance of any state to participate
  595  in this compact. Such an opt out shall be effective at the time
  596  of enactment of this compact by the compact state and shall
  597  apply to all existing uniform standards involving long-term care
  598  insurance products and those subsequently adopted.
  599         (5)EFFECT OF OPTING OUT.—If a compact state elects to opt
  600  out of a uniform standard, the uniform standard shall remain
  601  applicable in the compact state electing to opt out until such
  602  time the opt-out legislation is enacted into law or the
  603  regulation opting out becomes effective. Once the opt out of a
  604  uniform standard by a compact state becomes effective as
  605  provided under the laws of that state, the uniform standard
  606  shall have no further force and effect in that state unless and
  607  until the legislation or regulation implementing the opt out is
  608  repealed or otherwise becomes ineffective under the laws of the
  609  state. If a compact state opts out of a uniform standard after
  610  the uniform standard has been made effective in that state, the
  611  opt out shall have the same prospective effect as provided under
  612  Article XIV of this compact for withdrawals.
  613         (6)STAY OF UNIFORM STANDARD.If a compact state has
  614  formally initiated the process of opting out of a uniform
  615  standard by regulation, and while the regulatory opt out is
  616  pending, the compact state may petition the commission, at least
  617  15 days before the effective date of the uniform standard, to
  618  stay the effectiveness of the uniform standard in that state.
  619  The commission may grant a stay if the commission determines the
  620  regulatory opt out is being pursued in a reasonable manner and
  621  there is a likelihood of success. If a stay is granted or
  622  extended by the commission, the stay or extension thereof may
  623  postpone the effective date by up to 90 days, unless
  624  affirmatively extended by the commission; provided a stay may
  625  not be permitted to remain in effect for more than 1 year unless
  626  the compact state can show extraordinary circumstances that
  627  warrant a continuance of the stay, including, but not limited
  628  to, the existence of a legal challenge that prevents the compact
  629  state from opting out. A stay may be terminated by the
  630  commission upon notice that the rulemaking process has been
  631  terminated.
  632         (7)JUDICIAL REVIEW.—Not later than 30 days after a rule or
  633  operating procedure is adopted, any person may file a petition
  634  for judicial review of the rule or operating procedure; provided
  635  the filing of such a petition shall not stay or otherwise
  636  prevent the rule or operating procedure from becoming effective
  637  unless the court finds that the petitioner has a substantial
  638  likelihood of success. The court shall give deference to the
  639  actions of the commission consistent with applicable law and
  640  shall not find the rule or operating procedure to be unlawful if
  641  the rule or operating procedure represents a reasonable exercise
  642  of the commission’s authority.
  644                            ARTICLE VIII                           
  645                COMMISSION RECORDS AND ENFORCEMENT.—               
  647         (1)The commission shall adopt rules establishing
  648  conditions and procedures for public inspection and copying of
  649  its information and official records, except such information
  650  and records involving the privacy of individuals and insurers’
  651  trade secrets. The commission may adopt additional rules under
  652  which the commission may make available to federal and state
  653  agencies, including law enforcement agencies, records and
  654  information otherwise exempt from disclosure and may enter into
  655  agreements with such agencies to receive or exchange information
  656  or records subject to nondisclosure and confidentiality
  657  provisions.
  658         (2)Except as to privileged records, data, and information,
  659  the laws of any compact state pertaining to confidentiality or
  660  nondisclosure shall not relieve any compact state commissioner
  661  of the duty to disclose any relevant records, data, or
  662  information to the commission; provided disclosure to the
  663  commission shall not be deemed to waive or otherwise affect any
  664  confidentiality requirement; and further provided, except as
  665  otherwise expressly provided in this compact, the commission
  666  shall not be subject to the compact state’s laws pertaining to
  667  confidentiality and nondisclosure with respect to records, data,
  668  and information in its possession. Confidential information of
  669  the commission shall remain confidential after such information
  670  is provided to any commissioner.
  671         (3)The commission shall monitor compact states for
  672  compliance with duly adopted bylaws, rules, uniform standards,
  673  and operating procedures. The commission shall notify any
  674  noncomplying compact state in writing of its noncompliance with
  675  commission bylaws, rules, or operating procedures. If a
  676  noncomplying compact state fails to remedy its noncompliance
  677  within the time specified in the notice of noncompliance, the
  678  compact state shall be deemed to be in default as set forth in
  679  Article XIV of this compact.
  680         (4)The commissioner of any state in which an insurer is
  681  authorized to do business or is conducting the business of
  682  insurance shall continue to exercise his or her authority to
  683  oversee the market regulation of the activities of the insurer
  684  in accordance with the provisions of the state’s law. The
  685  commissioner’s enforcement of compliance with the compact is
  686  governed by the following provisions:
  687         (a)With respect to the commissioner’s market regulation of
  688  a product or advertisement that is approved or certified to the
  689  commission, the content of the product or advertisement shall
  690  not constitute a violation of the provisions, standards, or
  691  requirements of the compact except upon a final order of the
  692  commission, issued at the request of a commissioner after prior
  693  notice to the insurer and an opportunity for hearing before the
  694  commission.
  695         (b)Before a commissioner may bring an action for violation
  696  of any provision, standard, or requirement of the compact
  697  relating to the content of an advertisement not approved or
  698  certified to the commission, the commission, or an authorized
  699  commission officer or employee, must authorize the action.
  700  However, authorization pursuant to this paragraph does not
  701  require notice to the insurer, opportunity for hearing, or
  702  disclosure of requests for authorization or records of the
  703  commission’s action on such requests.
  705                             ARTICLE IX                            
  706                         DISPUTE RESOLUTION                        
  708         The commission shall attempt, upon the request of a member,
  709  to resolve any disputes or other issues that are subject to this
  710  compact and that may arise between two or more compact states,
  711  or between compact states and noncompact states, and the
  712  commission shall adopt an operating procedure providing for
  713  resolution of such disputes.
  715                              ARTICLE X                            
  716                     PRODUCT FILING AND APPROVAL                   
  718         (1)Insurers and third-party filers seeking to have a
  719  product approved by the commission shall file the product with
  720  and pay applicable filing fees to the commission. This compact
  721  does not restrict or otherwise prevent an insurer from filing
  722  its product with the insurance department in any state in which
  723  the insurer is licensed to conduct the business of insurance and
  724  such filing shall be subject to the laws of the states where
  725  filed.
  726         (2)The commission shall establish appropriate filing and
  727  review processes and procedures pursuant to commission rules and
  728  operating procedures. Notwithstanding any provision of this
  729  article, the commission shall adopt rules to establish
  730  conditions and procedures under which the commission will
  731  provide public access to product filing information. In
  732  establishing such rules, the commission shall consider the
  733  interests of the public in having access to such information, as
  734  well as protection of personal medical and financial information
  735  and trade secrets, which may be contained in a product filing or
  736  supporting information.
  737         (3)Any product approved by the commission may be sold or
  738  otherwise issued in those compact states for which the insurer
  739  is legally authorized to do business.
  741                             ARTICLE XI                            
  744         (1)No later than 30 days after the commission has given
  745  notice of a disapproved product or advertisement filed with the
  746  commission, the insurer or third-party filer whose filing was
  747  disapproved may appeal the determination to a review panel
  748  appointed by the commission. The commission shall adopt rules to
  749  establish procedures for appointing such review panels and
  750  provide for notice and hearing. An allegation that the
  751  commission, in disapproving a product or advertisement filed
  752  with the commission, acted arbitrarily, capriciously, or in a
  753  manner that is an abuse of discretion or otherwise not in
  754  accordance with the bylaw, is subject to judicial review in
  755  accordance with subsection (4) of Article III of this compact.
  756         (2)The commission may monitor, review, and reconsider
  757  products and advertisement subsequent to their filing or
  758  approval upon a finding that the product does not meet the
  759  relevant uniform standard. Where appropriate, the commission may
  760  withdraw or modify its approval after proper notice and hearing,
  761  subject to the appeal process in subsection (1).
  763                             ARTICLE XII                           
  764                               FINANCE                             
  766         (1)The commission shall pay or provide for the payment of
  767  the reasonable expenses of the commission’s establishment and
  768  organization. To fund the cost of the commission’s initial
  769  operations, the commission may accept contributions and other
  770  forms of funding from the National Association of Insurance
  771  Commissioners, compact states, and other sources. Contributions
  772  and other forms of funding from other sources shall be of such a
  773  nature that the independence of the commission concerning the
  774  performance of commission duties shall not be compromised.
  775         (2)The commission shall collect a filing fee from each
  776  insurer and third-party filer filing a product with the
  777  commission to cover the cost of the operations and activities of
  778  the commission and its staff in a total amount sufficient to
  779  cover the commission’s annual budget.
  780         (3)The commission’s budget for a fiscal year shall not be
  781  approved until the budget has been subject to notice and comment
  782  as set forth in Article VII of this compact.
  783         (4)The commission shall be exempt from all taxation in and
  784  by the compact states.
  785         (5)The commission shall not pledge the credit of any
  786  compact state, except by and with the appropriate legal
  787  authority of that compact state.
  788         (6)The commission shall keep complete and accurate
  789  accounts of all its internal receipts, including grants and
  790  donations, and disbursements of all funds under its control. The
  791  internal financial accounts of the commission shall be subject
  792  to the accounting procedures established under its bylaws. The
  793  financial accounts and reports, including the system of internal
  794  controls and procedures of the commission, shall be audited
  795  annually by an independent certified public accountant. Upon the
  796  determination of the commission, but no less frequently than
  797  every 3 years, the review of the independent auditor shall
  798  include a management and performance audit of the commission.
  799  The commission shall make an annual report to the Governor and
  800  the presiding officers of the Legislature of the compact states,
  801  which shall include a report of the independent audit. The
  802  commission’s internal accounts shall not be confidential and
  803  such materials may be shared with the commissioner of any
  804  compact state upon request; provided insurers’ trade secrets
  805  shall remain confidential.
  806         (7)A compact state does not have any claim to or ownership
  807  of any property held by or vested in the commission or to any
  808  commission funds held pursuant to the provisions of this
  809  compact.
  811                            ARTICLE XIII                           
  814         (1)Any state is eligible to become a compact state.
  815         (2)The compact shall become effective and binding upon
  816  legislative enactment of the compact into law by at least two
  817  compact states; provided the commission shall become effective
  818  for purposes of adopting uniform standards for, reviewing, and
  819  giving approval or disapproval of, products filed with the
  820  commission which satisfy applicable uniform standards only after
  821  26 states are compact states or, alternatively, by states
  822  representing greater than 40 percent of the premium volume for
  823  life insurance, annuity, disability income, and long-term care
  824  insurance products, based on records of the National Association
  825  of Insurance Commissioners for the previous year. Thereafter,
  826  the compact shall become effective and binding as to any other
  827  compact state upon enactment of the compact into law by that
  828  state.
  829         (3)Amendments to the compact may be proposed by the
  830  commission for enactment by the compact states. No amendment
  831  shall become effective and binding upon the commission and the
  832  compact states unless and until all compact states enact the
  833  amendment into law.
  835                             ARTICLE XIV                           
  836                WITHDRAWAL, DEFAULT, AND DISSOLUTION               
  838         (1)WITHDRAWAL.—
  839         (a)Once effective, the compact shall continue in force and
  840  remain binding upon each and every compact state; provided a
  841  compact state may withdraw from the compact by enacting a law
  842  specifically repealing the law that enacted the compact into
  843  law.
  844         (b)The effective date of withdrawal is the effective date
  845  of the repealing law. However, the withdrawal shall not apply to
  846  any product filings approved or self-certified, or any
  847  advertisement of such products, on the date the repealing law
  848  becomes effective, except by mutual agreement of the commission
  849  and the withdrawing state unless the approval is rescinded by
  850  the withdrawing state as provided in paragraph (e).
  851         (c)The commissioner of the withdrawing state shall
  852  immediately notify the management committee in writing upon the
  853  introduction of legislation repealing this compact in the
  854  withdrawing state.
  855         (d)The commission shall notify the other compact states of
  856  the introduction of such legislation within 10 days after the
  857  commission’s receipt of notice of such legislation.
  858         (e)The withdrawing state is responsible for all
  859  obligations, duties, and liabilities incurred through the
  860  effective date of withdrawal, including any obligations, the
  861  performance of which extend beyond the effective date of
  862  withdrawal, except to the extent those obligations may have been
  863  released or relinquished by mutual agreement of the commission
  864  and the withdrawing state. The commission’s approval of products
  865  and advertisement prior to the effective date of withdrawal
  866  shall continue to be effective and be given full force and
  867  effect in the withdrawing state unless formally rescinded by the
  868  withdrawing state in the same manner as provided by the laws of
  869  the withdrawing state for the prospective disapproval of
  870  products or advertisement previously approved under state law.
  871         (f)Reinstatement following withdrawal of any compact state
  872  shall occur upon the effective date of the withdrawing state
  873  reenacting the compact.
  874         (2)DEFAULT.—
  875         (a)If the commission determines that any compact state has
  876  at any time defaulted in the performance of any of its
  877  obligations or responsibilities under this compact, the bylaws,
  878  or duly adopted rules or operating procedures, after notice and
  879  hearing as set forth in the bylaws, all rights, privileges, and
  880  benefits conferred by this compact on the defaulting state shall
  881  be suspended from the effective date of default as fixed by the
  882  commission. The grounds for default include, but are not limited
  883  to, failure of a compact state to perform its obligations or
  884  responsibilities, and any other grounds designated in commission
  885  rules. The commission shall immediately notify the defaulting
  886  state in writing of the defaulting state’s suspension pending a
  887  cure of the default. The commission shall stipulate the
  888  conditions and the time period within which the defaulting state
  889  must cure its default. If the defaulting state fails to cure the
  890  default within the time period specified by the commission, the
  891  defaulting state shall be terminated from the compact and all
  892  rights, privileges, and benefits conferred by this compact shall
  893  be terminated from the effective date of termination.
  894         (b)Product approvals by the commission or product self
  895  certifications, or any advertisement in connection with such
  896  product, which are in force on the effective date of termination
  897  shall remain in force in the defaulting state in the same manner
  898  as if the defaulting state had withdrawn voluntarily pursuant to
  899  subsection (1).
  900         (c)Reinstatement following termination of any compact
  901  state requires a reenactment of the compact.
  903         (a)The compact dissolves effective upon the date of the
  904  withdrawal or default of the compact state that reduces
  905  membership in the compact to a single compact state.
  906         (b)Upon the dissolution of this compact, the compact
  907  becomes null and void and shall be of no further force or effect
  908  and the business and affairs of the commission shall be
  909  concluded and any surplus funds shall be distributed in
  910  accordance with the bylaws.
  912                             ARTICLE XV                            
  913                    SEVERABILITY AND CONSTRUCTION                  
  915         (1)If any provision of this act or its application to any
  916  person or circumstance is held invalid, the invalidity does not
  917  affect other provisions or applications of this act which can be
  918  given effect without the invalid provision or application, and
  919  to this end the provisions of this act are severable.
  920         (2)The provisions of this compact shall be liberally
  921  construed to effectuate its purposes.
  923                             Article XVI                           
  924              BINDING EFFECT OF COMPACT AND OTHER LAWS             
  927         (a)All lawful actions of the commission, including all
  928  rules and operating procedures adopted by the commission, are
  929  binding upon the compact states.
  930         (b)All agreements between the commission and the compact
  931  states are binding in accordance with their terms.
  932         (c)Upon the request of a party to a conflict over the
  933  meaning or interpretation of commission actions, and upon a
  934  majority vote of the compact states, the commission may issue
  935  advisory opinions regarding the meaning or interpretation in
  936  dispute.
  937         (d)If any provision of this compact exceeds the
  938  constitutional limits imposed on the Legislature of any compact
  939  state, the obligations, duties, powers, or jurisdiction sought
  940  to be conferred by that provision upon the commission shall be
  941  ineffective as to that compact state and those obligations,
  942  duties, powers, or jurisdiction shall remain in the compact
  943  state and shall be exercised by the agency of such state to
  944  which those obligations, duties, powers, or jurisdiction are
  945  delegated by law in effect at the time this compact becomes
  946  effective.
  947         (2)OTHER LAWS.—
  948         (a)This compact does not prevent the enforcement of any
  949  other law of a compact state, except as provided in paragraph
  950  (b).
  951         (b)For any product approved or certified to the
  952  commission, the rules, uniform standards, and any other
  953  requirements of the commission shall constitute the exclusive
  954  provisions applicable to the content, approval, and
  955  certification of such products. For advertising that is subject
  956  to the commission’s authority, any rule, uniform standard, or
  957  other requirement of the commission which governs the content of
  958  the advertisement shall constitute the exclusive provision that
  959  a commissioner may apply to the content of the advertisement.
  960  Notwithstanding this paragraph, an action taken by the
  961  commission does not abrogate or restrict:
  962         1.The access of any person to a court of this state;
  963         2.Remedies available under the laws of this state related
  964  to breach of contract, tort, or other laws not specifically
  965  directed to the content of the product;
  966         3.State law relating to the construction of insurance
  967  contracts; or
  968         4.The authority of the Attorney General, including, but
  969  not limited to, maintaining any action or proceeding, as
  970  authorized by law.
  971         (c)All insurance products filed with individual states
  972  shall be subject to the laws of those states.
  973         Section 3. (1) This act shall take effect on the date upon
  974  which the operational procedures and adopted rules of the
  975  Interstate Insurance Product Regulation Commission comply with
  976  the public-records laws of this state.
  977         (2) If this act takes effect pursuant to subsection (1),
  978  this act becomes void on the date upon which the operational
  979  procedures and adopted rules of the Interstate Insurance Product
  980  Regulation Commission no longer comply with the provisions of
  981  the public-records laws of this state.

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