There is a newer version of the Iowa Code
2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 505A - INTERSTATE INSURANCE PRODUCT REGULATION COMPACT
505A.1 - INTERSTATE INSURANCE PRODUCT REGULATION COMPACT.
505A.1 INTERSTATE INSURANCE PRODUCT REGULATION
COMPACT.
The interstate insurance product regulation compact is hereby
entered into and enacted into law with all jurisdictions legally
joining therein, in the form substantially as follows:
1. Article I -- Purposes. The purposes of this compact are,
through means of joint and cooperative action among the compacting
states:
a. To promote and protect the interest of consumers of
individual and group annuity, life insurance, disability income and
long-term care insurance products.
b. To develop uniform standards for insurance products
covered under this compact.
c. To establish a central clearinghouse to receive and
provide prompt review of insurance products covered under the compact
and, in certain cases, advertisements related thereto, submitted by
insurers authorized to do business in one or more compacting states.
d. To give appropriate regulatory approval to those product
filings and advertisements satisfying the applicable uniform
standard.
e. To improve coordination of regulatory resources and
expertise between state insurance departments regarding the setting
of uniform standards and review of insurance products covered under
this compact.
f. To create the interstate insurance product regulation
commission.
g. To perform these and such other related functions as may
be consistent with the state regulation of the business of insurance.
2. Article II -- Definitions. For purposes of this compact,
unless the context otherwise requires:
a. "Advertisement" means any material designed to create
public interest in a product, or induce the public to purchase,
increase, modify, reinstate, borrow on, surrender, replace or retain
a policy, as more specifically defined in the rules and operating
procedures of the commission.
b. "Bylaws" means those bylaws established by the commission
for its governance, or for directing or controlling the commission's
actions or conduct.
c. "Commission" means the interstate insurance product
regulation commission established by this compact.
d. "Commissioner" means the chief insurance regulatory
official of a state including, but not limited to, commissioner,
superintendent, director, or administrator.
e. "Compacting state" means any state that has enacted this
compact legislation and that has not withdrawn pursuant to article
XIV, paragraph "a", or been terminated pursuant to article XIV,
paragraph "b".
f. "Domiciliary state" means the state in which an insurer is
incorporated or organized, or, in the case of an alien insurer, its
state of entry.
g. "Insurer" means any entity licensed by a state to issue
contracts of insurance for any of the lines of insurance covered by
this compact.
h. "Member" means the person chosen by a compacting state as
its representative to the commission, or the person's designee. The
commissioner of insurance shall be the representative member of the
compact for the state of Iowa.
i. "Noncompacting state" means any state which is not at the
time a compacting state.
j. "Operating procedures" means procedures promulgated by the
commission implementing a rule, uniform standard, or a provision of
this compact.
k. "Product" means the form of a policy or contract,
including any application, endorsement, or related form which is
attached to and made a part of the policy or contract, and any
evidence of coverage or certificate, for an individual or group
annuity, life insurance, disability income, or long-term care
insurance product that an insurer is authorized to issue.
l. "Rule" means a statement of general or particular
applicability and future effect promulgated by the commission,
including a uniform standard developed pursuant to article VII,
designed to implement, interpret, or prescribe law or policy, or
describing the organization, procedure, or practice requirements of
the commission, which shall have the force and effect of law in the
compacting states.
m. "State" means any state, district, or territory of the
United States of America.
n. "Third-party filer" means an entity that submits a product
filing to the commission on behalf of an insurer.
o. "Uniform standard" means a standard adopted by the
commission for a product line, pursuant to article VII, and shall
include all of the product requirements in aggregate, provided that
each uniform standard shall be construed, whether express or implied,
to prohibit the use of any inconsistent, misleading, or ambiguous
provisions in a product, and the form of the product made available
to the public shall not be unfair, inequitable, or against public
policy as determined by the commission.
3. Article III -- Establishment of the commission and venue.
a. The compacting states hereby create and establish a joint
public agency known as the interstate insurance product regulation
commission. Pursuant to article IV, the commission has the power to
develop uniform standards for product lines, receive and provide
prompt review of products filed therewith, and give approval to those
product filings satisfying applicable uniform standards, provided it
is not intended for the commission to be the exclusive entity for
receipt and review of insurance product filings. Nothing herein
shall prohibit any insurer from filing its product in any state
wherein the insurer is licensed to conduct the business of insurance,
and any such filing shall be subject to the laws of the state where
filed.
b. The commission is a body corporate and politic, and an
instrumentality of the compacting state.
c. The commission is solely responsible for its liabilities
except as otherwise specifically provided in this compact.
d. Venue is proper and judicial proceedings by or against the
commission shall be brought solely and exclusively in a court of
competent jurisdiction where the principal office of the commission
is located.
4. Article IV -- Powers of the commission. The commission
shall have the following powers:
a. To promulgate rules, pursuant to article VII, which shall
have the force and effect of law and shall be binding in the
compacting states to the extent and in the manner provided in this
compact.
b. To exercise its rulemaking authority and establish
reasonable uniform standards for products covered under this compact,
and advertisement related thereto, which shall have the force and
effect of law and shall be binding in the compacting states, but only
for those products filed with the commission, provided that a
compacting state shall have the right to opt out of such uniform
standard pursuant to article VII, to the extent and in the manner
provided in this compact, and, provided further, that any uniform
standard established by the commission for long-term care insurance
products may provide the same or greater protections for consumers
as, but shall not provide less than, those protections set forth in
the national association of insurance commissioners' long-term care
insurance model act and long-term care insurance model regulation,
respectively, adopted as of 2001. The commission shall consider
whether any subsequent amendments to the long-term care insurance
model act or long-term care insurance model regulation adopted by the
national association of insurance commissioners require amending of
the uniform standards established by the commission for long-term
care insurance products.
c. To receive and review in an expeditious manner products
filed with the commission, and rate filings for disability income and
long-term care insurance products, and give approval of those
products and rate filings that satisfy the applicable uniform
standard, where such approval shall have the force and effect of law,
and be binding on the compacting states to the extent and in the
manner provided in the compact.
d. To receive and review in an expeditious manner
advertisement relating to long-term care insurance products for which
uniform standards have been adopted by the commission, and give
approval to all advertisement that satisfies the applicable uniform
standard. For any product covered under this compact, other than
long-term care insurance products, the commission shall have the
authority to require an insurer to submit all or any part of its
advertisement with respect to that product for review or approval
prior to use, if the commission determines that the nature of the
product is such that an advertisement of the product could have the
capacity or tendency to mislead the public. The actions of the
commission as provided in this article shall have the force and
effect of law and shall be binding in the compacting states to the
extent and in the manner provided in this compact.
e. To exercise its rulemaking authority and designate
products and advertisement that may be subject to a
self-certification process without the need for prior approval by the
commission.
f. To promulgate operating procedures, pursuant to article
VII, which shall be binding in the compacting states to the extent
and in the manner provided in this compact.
g. To bring and prosecute legal proceedings or actions in its
name as the commission, provided that the standing of any state
insurance department to sue or be sued under applicable law shall not
be affected.
h. To issue subpoenas requiring the attendance and testimony
of witnesses and the production of evidence.
i. To establish and maintain offices.
j. To purchase and maintain insurance and bonds.
k. To borrow, accept, or contract for services of personnel,
including, but not limited to, employees of a compacting state.
l. To hire employees, professionals, or specialists, and
elect or appoint officers, and to fix their compensation, define
their duties, and give them appropriate authority to carry out the
purposes of this compact, and determine their qualifications, and to
establish the commission's personnel policies and programs relating
to, among other things, conflicts of interest, rates of compensation,
and qualifications of personnel.
m. To accept any and all appropriate donations and grants of
money, equipment, supplies, materials, and services, and to receive,
utilize, and dispose of the same, provided that at all times the
commission shall strive to avoid any appearance of impropriety.
n. To lease, purchase, accept appropriate gifts or donations
of, or otherwise to own, hold, improve, or use, any property, real,
personal, or mixed, provided that at all times the commission shall
strive to avoid any appearance of impropriety.
o. To sell, convey, mortgage, pledge, lease, exchange,
abandon, or otherwise dispose of any property, real, personal, or
mixed.
p. To remit filing fees to compacting states as may be set
forth in the bylaws, rules, or operating procedures.
q. To enforce compliance by compacting states with rules,
uniform standards, operating procedures, and bylaws.
r. To provide for dispute resolution among compacting states.
s. To advise compacting states on issues relating to insurers
domiciled or doing business in noncompacting jurisdictions,
consistent with the purposes of this compact.
t. To provide advice and training to those personnel in state
insurance departments responsible for product review, and to be a
resource for state insurance departments.
u. To establish a budget and make expenditures.
v. To borrow money.
w. To appoint committees, including advisory committees
comprising members, state insurance regulators, state legislators or
their representatives, insurance industry and consumer
representatives, and such other interested persons as may be
designated in the bylaws.
x. To provide and receive information from, and to cooperate
with, law enforcement agencies.
y. To adopt and use a corporate seal.
z. To perform such other functions as may be necessary or
appropriate to achieve the purposes of this compact consistent with
the state regulation of the business of insurance.
5. Article V -- Organization of the commission.
a. Membership, voting, and bylaws.
(1) Each compacting state shall have and be limited to one
member. Each member shall be qualified to serve in that capacity
pursuant to applicable law of the compacting state. Any member may
be removed or suspended from office as provided by the law of the
state from which the member is appointed. Any vacancy occurring in
the commission shall be filled in accordance with the laws of the
compacting state wherein the vacancy exists. Nothing herein shall be
construed to affect the manner in which a compacting state determines
the election or appointment and qualification of its own
commissioner.
(2) Each member shall be entitled to one vote and shall have an
opportunity to participate in the governance of the commission in
accordance with the bylaws. Notwithstanding any provision herein to
the contrary, no action of the commission with respect to the
promulgation of a uniform standard shall be effective unless
two-thirds of the members vote in favor thereof.
(3) The commission shall, by a majority of the members, prescribe
bylaws to govern its conduct as may be necessary or appropriate to
carry out the purposes, and exercise the powers, of the compact,
including, but not limited to:
(a) Establishing the fiscal year of the commission.
(b) Providing reasonable procedures for appointing and electing
members, as well as holding meetings, of the management committee.
(c) Providing reasonable standards and procedures:
(i) For the establishment and meetings of other committees.
(ii) Governing any general or specific delegation of any
authority or function of the commission.
(d) Providing reasonable procedures for calling and conducting
meetings of the commission that consists of a majority of commission
members ensuring reasonable advance notice of each such meeting, and
providing for the right of citizens to attend each such meeting with
enumerated exceptions designed to protect the public's interest, the
privacy of individuals, and insurers' proprietary information,
including trade secrets. The commission may meet in camera only
after a majority of the entire membership votes to close a meeting en
toto or in part. As soon as practicable, the commission shall make
public:
(i) A copy of the vote to close the meeting, revealing the vote
of each member, with no proxy votes allowed.
(ii) Votes taken during such meeting.
(e) Establishing the titles, duties, and authority, and
reasonable procedures for the election of the officers of the
commission.
(f) Providing reasonable standards and procedures for the
establishment of the personnel policies and programs of the
commission. Notwithstanding any civil service or other similar laws
of any compacting state, the bylaws shall exclusively govern the
personnel policies and programs of the commission.
(g) Providing a mechanism for winding up the operations of the
commission and the equitable disposition of any surplus funds that
may exist after the termination of this compact after the payment or
reserving of all of its debts and obligations.
(h) Promulgating a code of ethics to address permissible and
prohibited activities of commission members and employees.
(4) The commission shall publish its bylaws in a convenient form
and file a copy of the bylaws, along with any amendments, with the
appropriate agency or officer in each of the compacting states.
b. Management committee, officers, and personnel.
(1) A management committee comprising no more than fourteen
members shall be established as follows:
(a) One member from each of the six compacting states with the
largest premium volume for individual and group annuities, life,
disability income, and long-term care insurance products, determined
from the records of the national association of insurance
commissioners for the prior year.
(b) Four members from those compacting states with at least two
percent of the market based on the premium volume described in
subparagraph division (a), other than the six compacting states with
the largest premium volume, selected on a rotating basis as provided
in the bylaws.
(c) Four members from those compacting states with less than two
percent of the market, based on the premium volume described in
subparagraph division (a), with one selected from each of the four
zone regions of the national association of insurance commissioners
as provided in the bylaws.
(2) The management committee shall have such authority and duties
as may be set forth in the bylaws, including but not limited to:
(a) Managing the affairs of the commission in a manner consistent
with the bylaws and purposes of the commission.
(b) Establishing and overseeing an organizational structure
within, and appropriate procedures for, the commission to provide for
the creation of uniform standards and other rules, receipt and review
of product filings, administrative and technical support functions,
review of decisions regarding the disapproval of a product filing,
and the review of elections made by a compacting state to opt out of
a uniform standard, provided that a uniform standard shall not be
submitted to the compacting states for adoption unless approved by
two-thirds of the members of the management committee.
(c) Overseeing the offices of the commission.
(d) Planning, implementing, and coordinating communications and
activities with other state, federal, and local government
organizations in order to advance the goals of the commission.
(3) The commission shall elect annually officers from the
management committee, with each having such authority and duties, as
may be specified in the bylaws.
(4) The management committee may, subject to the approval of the
commission, appoint or retain an executive director for such period,
upon such terms and conditions and for such compensation as the
commission may deem appropriate. The executive director shall serve
as secretary to the commission, but shall not be a member of the
commission. The executive director shall hire and supervise such
other staff as may be authorized by the commission.
c. Legislative and advisory committees.
(1) A legislative committee comprising state legislators or their
designees shall be established to monitor the operations of, and make
recommendations to, the commission, including the management
committee, provided that the manner of selection and term of any
legislative committee member shall be as set forth in the bylaws.
Prior to the adoption by the commission of any uniform standard,
revision to the bylaws, annual budget, or other significant matter as
may be provided in the bylaws, the management committee shall consult
with and report to the legislative committee.
(2) The commission shall establish two advisory committees, one
of which shall comprise consumer representatives independent of the
insurance industry, and the other comprising insurance industry
representatives.
(3) The commission may establish additional advisory committees
as its bylaws may provide for the carrying out of its functions.
d. Corporate records of the commission. The commission shall
maintain its corporate books and records in accordance with the
bylaws.
e. Qualified immunity, defense, and indemnification.
(1) The members, officers, executive director, employees, and
representatives of the commission shall be immune from suit and
liability, either personally or in their official capacity, for any
claim for damage to, or loss of, property, personal injury, or other
civil liability caused by or arising out of any actual or alleged
act, error, or omission that occurred, or that the person against
whom the claim is made had a reasonable basis for believing occurred,
within the scope of commission employment, duties, or
responsibilities, provided that nothing in this subparagraph shall be
construed to protect any such person from suit or liability for any
damage, loss, injury, or liability caused by the intentional or
willful and wanton misconduct of that person.
(2) The commission shall defend any member, officer, executive
director, employee, or representative of the commission in any civil
action seeking to impose liability arising out of any actual or
alleged act, error, or omission that occurred within the scope of
commission employment, duties, or responsibilities, or that the
person against whom the claim is made had a reasonable basis for
believing occurred within the scope of commission employment, duties,
or responsibilities, provided that nothing herein shall be construed
to prohibit that person from retaining the person's own counsel; and,
provided further, that the actual or alleged act, error, or omission
did not result from that person's intentional or willful and wanton
misconduct.
(3) The commission shall indemnify and hold harmless any member,
officer, executive director, employee, or representative of the
commission for the amount of any settlement or judgment obtained
against that person arising out of any actual or alleged act, error,
or omission that occurred within the scope of commission employment,
duties, or responsibilities, or that such person had a reasonable
basis for believing occurred within the scope of commission
employment, duties, or responsibilities, provided that the actual or
alleged act, error, or omission did not result from the intentional
or willful and wanton misconduct of that person.
6. Article VI -- Meetings and acts of the commission.
a. The commission shall meet and take such actions as are
consistent with the provisions of this compact and the bylaws.
b. Each member of the commission shall have the right and
power to cast a vote to which that compacting state is entitled and
to participate in the business and affairs of the commission. A
member shall vote in person or by such other means as provided in the
bylaws. The bylaws may provide for members' participation in
meetings by telephone or other means of communication.
c. The commission shall meet at least once during each
calendar year. Additional meetings shall be held as set forth in the
bylaws.
7. Article VII -- Rules and operating procedures -- rulemaking
functions of the commission and opting out of uniform standards.
a. Rulemaking authority. The commission shall promulgate
reasonable rules, including uniform standards and operating
procedures, in order to effectively and efficiently achieve the
purposes of this compact. Notwithstanding the foregoing, in the
event the commission exercises its rulemaking authority in a manner
that is beyond the scope of the purposes of this compact, or the
powers granted hereunder, such an action by the commission shall be
invalid and have no force and effect.
b. Rulemaking procedure. Rules and operating procedures
shall be made pursuant to a rulemaking process that conforms to the
model state administrative procedure act of 1981 as amended, as may
be appropriate to the operations of the commission. Before the
commission adopts a uniform standard, the commission shall give
written notice to the relevant state legislative committee or
committees in each compacting state responsible for insurance issues
of its intention to adopt the uniform standard. The commission, in
adopting a uniform standard, shall consider fully all submitted
materials and issue a concise explanation of its decision.
c. Effective date and opt out of a uniform standard. A
uniform standard shall become effective ninety days after its
promulgation by the commission or such later date as the commission
may determine, provided, however, that a compacting state may opt out
of a uniform standard as provided in this article. "Opt out"
means any action by a compacting state to decline to adopt or
participate in a promulgated uniform standard. All other rules and
operating procedures, and amendments thereto, shall become effective
as of the date specified in each rule, operating procedure, or
amendment.
d. Opt-out procedure.
(1) A compacting state may opt out of a uniform standard, either
by legislation or regulation duly promulgated by the insurance
department under the compacting state's administrative procedure act.
If a compacting state elects to opt out of a uniform standard by
regulation, it must do all of the following:
(a) Give written notice to the commission no later than ten
business days after the uniform standard is promulgated, or at the
time the state becomes a compacting state.
(b) Find that the uniform standard does not provide reasonable
protections to the citizens of the state, given the conditions in the
state.
(2) The commissioner shall make specific findings of fact and
conclusions of law, based on a preponderance of the evidence,
detailing the conditions in the state which warrant a departure from
the uniform standard and determining that the uniform standard would
not reasonably protect the citizens of the state. The commissioner
must consider and balance the following factors and find that the
conditions in the state and needs of the citizens of the state
outweigh both of the following:
(a) The intent of the legislature to participate in, and the
benefits of, an interstate agreement to establish national uniform
consumer protections for the products subject to this compact.
(b) The presumption that a uniform standard adopted by the
commission provides reasonable protections to consumers of the
relevant product.
(3) Notwithstanding the foregoing, a compacting state may, at the
time of its enactment of this compact, prospectively opt out of all
uniform standards involving long-term care insurance products by
expressly providing for such opt out in the enacted compact, and such
an opt out shall not be treated as a material variance in the offer
or acceptance of any state to participate in this compact. Such an
opt out shall be effective at the time of enactment of this compact
by the compacting state and shall apply to all existing uniform
standards involving long-term care insurance products and those
subsequently promulgated.
e. Effect of opt out.
(1) If a compacting state elects to opt out of a uniform
standard, the uniform standard shall remain applicable in the
compacting state electing to opt out until such time the opt-out
legislation is enacted into law or the regulation opting out becomes
effective.
(2) Once the opt out of a uniform standard by a compacting state
becomes effective, as provided under the laws of that state, the
uniform standard shall have no further force and effect in that state
unless and until the legislation or regulation implementing the opt
out is repealed or otherwise becomes ineffective under the laws of
the state. If a compacting state opts out of a uniform standard
after the uniform standard has been made effective in that state, the
opt out shall have the same prospective effect as provided under
article XIV for withdrawals.
8. Article VIII -- Commission records and enforcement.
a. The commission shall promulgate rules establishing
conditions and procedures for public inspection and copying of its
information and official records, except such information and records
involving the privacy of individuals and insurers' trade secrets.
The commission may promulgate additional rules under which it may
make available to federal and state agencies, including law
enforcement agencies, records, and information otherwise exempt from
disclosure, and may enter into agreements with such agencies to
receive or exchange information or records subject to nondisclosure
and confidentiality provisions.
b. Except as to privileged records, data, and information,
the laws of any compacting state pertaining to confidentiality or
nondisclosure shall not relieve any compacting state commissioner of
the duty to disclose any relevant records, data, or information to
the commission, provided that disclosure to the commission shall not
be deemed to waive or otherwise affect any confidentiality
requirement, and further provided that, except as otherwise expressly
provided in this compact, the commission shall not be subject to the
compacting state's laws pertaining to confidentiality and
nondisclosure with respect to records, data, and information in its
possession. Confidential information of the commission shall remain
confidential after such information is provided to any commissioner.
c. The commission shall monitor compacting states for
compliance with duly adopted bylaws, rules, including uniform
standards, and operating procedures. The commission shall notify any
noncomplying compacting state in writing of its noncompliance with
commission bylaws, rules, or operating procedures. If a noncomplying
compacting state fails to remedy its noncompliance within the time
specified in the notice of noncompliance, the compacting state shall
be deemed to be in default as set forth in article XIV.
d. The commissioner of any state in which an insurer is
authorized to do business, or is conducting the business of
insurance, shall continue to exercise the commissioner's authority to
oversee the market regulation of the activities of the insurer in
accordance with the provisions of the state's law. The
commissioner's enforcement of compliance with the compact is governed
by the following provisions:
(1) With respect to the commissioner's market regulation of a
product or advertisement that is approved or certified to the
commission, the content of the product or advertisement shall not
constitute a violation of the provisions, standards, or requirements
of this compact except upon a final order of the commission, issued
at the request of a commissioner after prior notice to the insurer
and an opportunity for hearing before the commission.
(2) Before a commissioner may bring an action for violation of
any provision, standard, or requirement of this compact relating to
the content of an advertisement not approved or certified to the
commission, the commission, or an authorized commission officer or
employee, must authorize the action. However, authorization pursuant
to this subparagraph does not require notice to the insurer,
opportunity for hearing, or disclosure of requests for authorization
or records of the commission's action on such requests.
e. Stay of uniform standard. If a compacting state has
formally initiated the process of opting out of a uniform standard by
regulation, and while the regulatory opt out is pending, the
compacting state may petition the commission, at least fifteen days
before the effective date of the uniform standard, to stay the
effectiveness of the uniform standard in that state. The commission
may grant a stay if it determines the regulatory opt out is being
pursued in a reasonable manner and there is a likelihood of success.
If a stay is granted or extended by the commission, the stay or
extension thereof may postpone the effective date by up to ninety
days, unless affirmatively extended by the commission, provided a
stay may not be permitted to remain in effect for more than one year
unless the compacting state can show extraordinary circumstances
which warrant a continuance of the stay, including, but not limited
to, the existence of a legal challenge which prevents the compacting
state from opting out. A stay may be terminated by the commission
upon notice that the rulemaking process has been terminated.
f. Not later than thirty days after a rule or operating
procedure is adopted, any person may file a petition for judicial
review of the rule or operating procedure, provided that the filing
of such a petition shall not stay or otherwise prevent the rule or
operating procedure from becoming effective unless the court finds
that the petitioner has a substantial likelihood of success. The
court shall give deference to the actions of the commission
consistent with applicable law and shall not find the rule or
operating procedure to be unlawful if the rule or operating procedure
represents a reasonable exercise of the commission's authority.
9. Article IX -- Dispute resolution. The commission shall
attempt, upon the request of a member, to resolve any disputes or
other issues which are subject to this compact and which may arise
between two or more compacting states, or between compacting states
and noncompacting states, and the commission shall promulgate an
operating procedure providing for resolution of such disputes.
10. Article X -- Product filing and approval.
a. Insurers and third-party filers seeking to have a product
approved by the commission shall file the product with, and pay
applicable filing fees to, the commission. Nothing in this compact
shall be construed to restrict or otherwise prevent an insurer from
filing its product with the insurance department in any state wherein
the insurer is licensed to conduct the business of insurance, and
such filing shall be subject to the laws of the states where filed.
b. The commission shall establish appropriate filing and
review processes and procedures pursuant to commission rules and
operating procedures. Notwithstanding any provision herein to the
contrary, the commission shall promulgate rules to establish
conditions and procedures under which the commission will provide
public access to product filing information. In establishing such
rules, the commission shall consider the interests of the public in
having access to such information, as well as protection of personal
medical and financial information and trade secrets, that may be
contained in a product filing or supporting information.
c. Any product approved by the commission may be sold or
otherwise issued in those compacting states in which the insurer is
legally authorized to do business.
11. Article XI -- Review of commission decisions regarding
filings.
a. Not later than thirty days after the commission has given
notice of a disapproved product or advertisement filed with the
commission, the insurer or third-party filer whose filing was
disapproved may appeal the determination to a review panel appointed
by the commission. The commission shall adopt rules to establish
procedures for appointing such review panels and provide for notice
and hearing. An allegation that the commission, in disapproving a
product or advertisement filed with the commission, acted
arbitrarily, capriciously, or in a manner that is an abuse of
discretion or otherwise not in accordance with the law, is subject to
judicial review in accordance with article III, paragraph "d".
b. The commission shall have authority to monitor, review,
and reconsider products and advertisement subsequent to their filing
or approval upon a finding that the product does not meet the
relevant uniform standard. Where appropriate, the commission may
withdraw or modify its approval after proper notice and hearing,
subject to the appeal process in paragraph "a".
12. Article XII -- Finance.
a. The commission shall pay or provide for the payment of the
reasonable expenses of its establishment and organization. To fund
the cost of its initial operations, the commission may accept
contributions and other forms of funding from the national
association of insurance commissioners, compacting states, and other
sources. Contributions and other forms of funding from other sources
shall be of such a nature that the independence of the commission
concerning the performance of its duties shall not be compromised.
b. The commission shall collect a filing fee from each
insurer and third-party filer filing a product with the commission to
cover the cost of the operations and activities of the commission and
its staff in a total amount sufficient to cover the commission's
annual budget.
c. The commission's budget for a fiscal year shall not be
approved until it has been subject to notice and comment as set forth
in article VII.
d. The commission shall be exempt from all taxation in and by
the compacting states.
e. The commission shall not pledge the credit of any
compacting state, except by and with the appropriate legal authority
of that compacting state.
f. The commission shall keep complete and accurate accounts
of all its internal receipts, including grants and donations, and
disbursements of all funds under its control. The internal financial
accounts of the commission shall be subject to the accounting
procedures established under its bylaws. The financial accounts and
reports, including the system of internal controls and procedures of
the commission, shall be audited annually by an independent certified
public accountant. Upon the determination of the commission, but no
less frequently than every three years, the review of the independent
auditor shall include a management and performance audit of the
commission. The commission shall make an annual report to the
governor and legislature of the compacting states, which shall
include a report of the independent audit. The commission's internal
accounts shall not be confidential and such materials may be shared
with the commissioner of any compacting state upon request; provided,
however, that any work papers related to any internal or independent
audit and any information regarding the privacy of the individuals
and insurers' proprietary information, including trade secrets, shall
remain confidential.
g. A compacting state shall not have any claim to or
ownership of any property held by or vested in the commission or to
any commission funds held pursuant to the provisions of this compact.
13. Article XIII -- Compacting states, effective date, and
amendment.
a. Any state is eligible to become a compacting state.
b. This compact shall become effective and binding upon
legislative enactment of this compact into law by two compacting
states, provided the commission shall become effective for purposes
of adopting uniform standards for reviewing, and giving approval or
disapproval of, products filed with the commission that satisfy
applicable uniform standards only after twenty-six states are
compacting states or, alternatively, by states representing greater
than forty percent of the premium volume for life insurance, annuity,
disability income, and long-term care insurance products, based on
records of the national association of insurance commissioners for
the prior year. Thereafter, it shall become effective and binding as
to any other compacting state upon enactment of this compact into law
by that state.
c. Amendments to this compact may be proposed by the
commission for enactment by the compacting states. An amendment
shall not become effective and binding upon the commission and the
compacting states unless and until all compacting states enact the
amendment into law.
14. Article XIV -- Withdrawal, default, and termination.
a. Withdrawal.
(1) Once effective, this compact shall continue in force and
remain binding upon each and every compacting state, provided that a
compacting state may withdraw from this compact by enacting a statute
specifically repealing the statute which enacted the compact into
law.
(2) The effective date of withdrawal is the effective date of the
repealing statute. However, the withdrawal shall not apply to any
product filings approved or self-certified, or any advertisement of
such products, on the date the repealing statute becomes effective,
except by mutual agreement of the commission and the withdrawing
state unless the approval is rescinded by the withdrawing state as
provided in subparagraph (5).
(3) The commissioner of the withdrawing state shall immediately
notify the management committee in writing upon the introduction of
legislation repealing this compact in the withdrawing state.
(4) The commission shall notify the other compacting states of
the introduction of such legislation within ten days after its
receipt of notice.
(5) The withdrawing state is responsible for all obligations,
duties, and liabilities incurred through the effective date of
withdrawal, including any obligations, the performance of which
extend beyond the effective date of withdrawal, except to the extent
those obligations may have been released or relinquished by mutual
agreement of the commission and the withdrawing state. The
commission's approval of products and advertisement prior to the
effective date of withdrawal shall continue to be effective and be
given full force and effect in the withdrawing state, unless formally
rescinded by the withdrawing state in the same manner as provided by
the laws of the withdrawing state for the prospective disapproval of
products or advertisement previously approved under state law.
(6) Reinstatement following withdrawal of any compacting state
shall occur upon the effective date of the withdrawing state
reenacting the compact.
b. Default.
(1) If the commission determines that any compacting state has at
any time defaulted in the performance of any of its obligations or
responsibilities under this compact, the bylaws or duly promulgated
rules or operating procedures, then, after notice and hearing as set
forth in the bylaws, all rights, privileges, and benefits conferred
by this compact on the defaulting state shall be suspended from the
effective date of default as fixed by the commission. The grounds
for default include, but are not limited to, failure of a compacting
state to perform its obligations or responsibilities, and any other
grounds designated in commission rules. The commission shall
immediately notify the defaulting state in writing of the defaulting
state's suspension, pending a cure of the default. The commission
shall stipulate the conditions and the time period within which the
defaulting state must cure its default. If the defaulting state
fails to cure the default within the time period specified by the
commission, the defaulting state shall be terminated from this
compact and all rights, privileges, and benefits conferred by this
compact shall be terminated from the effective date of termination.
(2) Product approvals by the commission or product
self-certifications, or any advertisement in connection with such
product, that are in force on the effective date of termination shall
remain in force in the defaulting state in the same manner as if the
defaulting state had withdrawn voluntarily pursuant to paragraph
"a".
(3) Reinstatement following termination of any compacting state
requires a reenactment of this compact.
c. Dissolution of compact.
(1) This compact dissolves effective upon the date of the
withdrawal or default of the compacting state which reduces
membership in this compact to one compacting state.
(2) Upon the dissolution of this compact, this compact becomes
null and void and shall be of no further force or effect, and the
business and affairs of the commission shall be wound up and any
surplus funds shall be distributed in accordance with the bylaws.
15. Article XV -- Severability and construction.
a. The provisions of this compact shall be severable, and if
any phrase, clause, sentence, or provision is deemed unenforceable,
the remaining provisions of this compact shall be enforceable.
b. The provisions of this compact shall be liberally
construed to effectuate its purposes.
16. Article XVI -- Binding effect of compact and other laws.
a. Other laws.
(1) Nothing herein prevents the enforcement of any other law of a
compacting state, except as provided in subparagraph (2).
(2) For any product approved or certified to the commission, the
rules, uniform standards, and any other requirements of the
commission shall constitute the exclusive provisions applicable to
the content, approval, and certification of such products. For
advertisement that is subject to the commission's authority, any
rule, uniform standard, or other requirement of the commission which
governs the content of the advertisement shall constitute the
exclusive provision that a commissioner may apply to the content of
the advertisement. Notwithstanding the foregoing, action taken by
the commission shall not abrogate or restrict:
(a) The access of any person to state courts.
(b) Remedies available under state law related to breach of
contract, tort, general consumer protection laws, or general consumer
protection regulations that apply to the sale or advertisement of the
product or other laws not specifically directed to the content of the
product.
(c) State law relating to the construction of insurance
contracts.
(d) The authority of the attorney general of the state, including
but not limited to maintaining any actions or proceedings, as
authorized by law.
(3) All insurance products filed with individual states shall be
subject to the laws of those states.
b. Binding effect of this compact.
(1) All lawful actions of the commission, including all rules and
operating procedures adopted by the commission, are binding upon the
compacting states.
(2) All agreements between the commission and the compacting
states are binding in accordance with their terms.
(3) Upon the request of a party to a conflict over the meaning or
interpretation of commission actions, and upon a majority vote of the
compacting states, the commission may issue advisory opinions
regarding the meaning or interpretation in dispute.
(4) In the event any provision of this compact exceeds the
constitutional limits imposed on the legislature of any compacting
state, the obligations, duties, powers, or jurisdiction sought to be
conferred by that provision upon the commission shall be ineffective
as to that compacting state, and those obligations, duties, powers,
or jurisdiction shall remain in the compacting state and shall be
exercised by the agency thereof to which those obligations, duties,
powers, or jurisdiction are delegated by law in effect at the time
this compact becomes effective. Section History: Recent Form
2003 Acts, ch 91, §54; 2003 Acts, ch 179, §74; 2004 Acts, ch 1110,
§6--16; 2005 Acts, ch 70, §3; 2008 Acts, ch 1032, §201; 2009 Acts, ch
41, §263
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