§ 8500. Definitions
As used in this chapter:
(1) “Advertisement” means any material designed to create public interest in a product
or induce the public to purchase, increase, modify, reinstate, borrow on, surrender,
replace, or retain a policy as more specifically defined in the rules and operating
procedures of the Commission.
(2) “Bylaws” means those bylaws established by the Commission for its governance or for
directing or controlling the Commission’s actions or conduct.
(3) “Commission” means the “Interstate Insurance Product Regulation Commission” established
by this compact.
(4) “Commissioner” means the chief insurance regulatory official of a state, including
commissioner, superintendent, director, or administrator.
(5) “Compacting state” means any state that has enacted this compact legislation and that
has not withdrawn pursuant to subsection 8512(a) of this chapter or been terminated
pursuant to subsection 8512(b) of this chapter.
(6) “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.
(7) “Insurer” means any entity licensed by a state to issue contracts of insurance for
any of the lines of insurance covered by this chapter.
(8) “Member” means the person chosen by a compacting state as its representative to the
Commission, or his or her designee.
(9) “NAIC” means the National Association of Insurance Commissioners.
(10) “Noncompacting state” means any state that is not at the time a compacting state.
(11) “Operating procedures” means procedures adopted by the Commission implementing a rule,
uniform standard, or a provision of this compact.
(12) “Product” means the form of a policy or contract, including any application, endorsement,
or related form that is attached to and made a part of the policy or contract, and
any evidence of coverage or certificate, for an individual or group annuity, life
insurance, disability income, or long-term care insurance product that an insurer
is authorized to issue.
(13) “Rule” means a statement of general or particular applicability and future effect
adopted by the Commission, including a uniform standard developed pursuant to section
8505 of this chapter, designed to implement, interpret, or prescribe law or policy
or describing the organization, procedure, or practice requirements of the Commission,
that shall have the force and effect of law in the compacting states.
(14) “State” means any state, district, or territory of the United States of America.
(15) “Third-party filer” means an entity that submits a product filing to the Commission
on behalf of an insurer.
(16) “Uniform standard” means a standard adopted by the Commission for a product line,
pursuant to section 8505 of this chapter, 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. (Added 2005, No. 70, § 2.)
§ 8501. 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 section 8502 of
this chapter, the Commission will have the power to develop uniform standards for
product lines, receive and provide prompt review of products filed with the Commission,
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 in this chapter 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
states.
(c) The Commission is a nonprofit entity, separate and distinct from the individual compacting
states.
(d) The Commission is solely responsible for its liabilities except as otherwise specifically
provided in this compact.
(e) 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. (Added 2005, No. 70, § 2; amended 2021, No. 105 (Adj. Sess.), § 272, eff. July 1, 2022.)
§ 8502. Powers of the Commission
The Commission shall have the following powers:
(1) To adopt rules, pursuant to section 8505 of this chapter, which shall have the force
and effect of law and shall be binding in the compacting states to the extent and
in the manner provided in this compact.
(2) To exercise its rulemaking authority and establish reasonable uniform standards for
products covered under the compact, and advertisement related to the compact, 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 section
8505 of this chapter, 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 NAIC Long-Term Care Insurance Model
Act or Long-Term Care Insurance Model Regulation adopted by the NAIC require amending
of the uniform standards established by the Commission for long-term care insurance
products.
(3) To receive and review in an expeditious manner products filed with the Commission,
and rate filings for disability income and long-term care insurance products, and
give approval of those products and rate filings that satisfy the applicable uniform
standard, where such approval shall have the force and effect of law and be binding
on the compacting states to the extent and in the manner provided in the compact.
(4) To receive and review in an expeditious manner advertisement relating to long-term
care insurance products for which uniform standards have been adopted by the Commission,
and give approval to all advertisement that satisfies the applicable uniform standard.
For any product covered under this compact, other than long-term care insurance products,
the Commission shall have the authority to require an insurer to submit all or any
part of its advertisement with respect to that product for review or approval prior
to use if the Commission determines that the nature of the product is such that an
advertisement of the product could have the capacity or tendency to mislead the public.
The actions of Commission as provided in this section shall have the force and effect
of law and shall be binding in the compacting states to the extent and in the manner
provided in the compact.
(5) To exercise its rulemaking authority and designate products and advertisement that
may be subject to a self-certification process without the need for prior approval
by the Commission.
(6) To adopt operating procedures, pursuant to section 8505 of this chapter, which shall
be binding in the compacting states to the extent and in the manner provided in this
compact.
(7) To bring and prosecute legal proceedings or actions in its name as the Commission,
provided that the standing of any state insurance department to sue or be sued under
applicable law shall not be affected.
(8) To issue subpoenas requiring the attendance and testimony of witnesses and the production
of evidence.
(9) To establish and maintain offices.
(10) To purchase and maintain insurance and bonds.
(11) To borrow, accept, or contract for services of personnel, including employees of a
compacting state.
(12) To hire employees, professionals, or specialists, and elect or appoint officers, and
to fix their compensation, define their duties, and give them appropriate authority
to carry out the purposes of the compact, and determine their qualifications; and
to establish the Commission’s personnel policies and programs relating to, among other
things, conflicts of interest, rates of compensation, and qualifications of personnel.
(13) To accept any and all appropriate donations and grants of money, equipment, supplies,
materials, and services, and to receive, utilize, and dispose of the same, provided
that at all times the Commission shall strive to avoid any appearance of impropriety.
(14) To lease, purchase, accept appropriate gifts or donations of, or otherwise 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.
(15) To sell, convey, mortgage, pledge, lease, exchange, abandon, or otherwise dispose
of any property, real, personal, or mixed.
(16) To collect and remit filing fees to compacting states as may be set forth in the bylaws,
rules, or operating procedures.
(17) To enforce compliance by compacting states with rules, uniform standards, operating
procedures, and bylaws.
(18) To provide for dispute resolution among compacting states.
(19) To advise compacting states on issues relating to insurers domiciled or doing business
in noncompacting jurisdictions, consistent with the purposes of this compact.
(20) To provide advice and training to those personnel in state insurance departments responsible
for product review and to be a resource for state insurance departments.
(21) To establish a budget and make expenditures.
(22) To borrow money.
(23) To appoint committees, including advisory committees comprising members, state insurance
regulators, state legislators or their representatives, insurance industry and consumer
representatives, and such other interested persons as may be designated in the bylaws.
(24) To provide and receive information from and to cooperate with law enforcement agencies.
(25) To adopt and use a corporate seal.
(26) To perform such other functions as may be necessary or appropriate to achieve the
purposes of this compact consistent with the state regulation of the business of insurance. (Added 2005, No. 70, § 2; amended 2021, No. 105 (Adj. Sess.), § 273, eff. July 1, 2022.)
§ 8503. Organization of the Commission
(a) Membership. Each compacting state shall have and be limited to one member. Each member shall be
qualified to serve in that capacity pursuant to applicable law of the compacting state.
Any member may be removed or suspended from office as provided by the law of the state
from which the member shall be appointed. Any vacancy occurring in the Commission
shall be filled in accordance with the laws of the compacting state wherein the vacancy
exists. Nothing in this chapter shall be construed to affect the manner in which a
compacting state determines the election or appointment and qualification of its own
Commissioner. The Commissioner of the Vermont Department of Financial Regulation,
or the Commissioner’s designee, shall be the member appointed by Vermont to the Commission.
(b) Voting. 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 of this chapter to the contrary, no action of the Commission with respect
to the adoption of a uniform standard shall be effective unless two-thirds of the
members vote in favor thereof.
(c) Bylaws.
(1) 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:
(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; and
(ii) governing any general or specific delegation of any authority or function of the Commission;
(D) providing reasonable procedures for calling and conducting meetings of the Commission
that consist of a majority of Commission members, ensuring reasonable advance notice
of each such meeting, and providing for the right of 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 must
make public a copy of the vote to close the meeting, revealing the vote of each member
with no proxy votes allowed, and votes taken during such meeting;
(E) establishing the titles, duties, 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) adopting a code of ethics to address permissible and prohibited activities of Commission
members and employees; and
(H) providing a mechanism for winding up the operations of the Commission and the equitable
disposition of any surplus funds that may exist after the termination of the compact
after the payment and reserving of all of its debts and obligations.
(2) The Commission shall publish its bylaws in a convenient form and file a copy of its
bylaws and a copy of any amendment to its bylaws with the appropriate agency or officer
in each of the compacting states.
(d) Management committee.
(1) A Management Committee comprising no more than 14 members shall be established as
follows:
(A) one member from each of the six compacting states with the largest premium volume
for individual and group annuities, life, disability income, and long-term care insurance
products determined from the records of the NAIC 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 subdivision (1)(A) of this subsection, other
than the six compacting states with the largest premium volume, selected on a rotating
basis as provided in the bylaws; and
(C) four members from those compacting states with less than two percent of the market,
based on the premium volume described in subdivision (1)(A) of this subsection, with
one selected from each of the four zone regions of the NAIC as provided in the bylaws.
(2) The Management Committee shall have such authority and duties as may be set forth
in the bylaws, including:
(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; and
(D) planning, implementing, and coordinating communications and activities with other
state, federal, and local government organizations in order to advance the goals of
the Commission.
(3) The Commission annually shall elect 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.
(e) Legislative and advisory committees. 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.
(f) Advisory committees.
(1) The Commission shall establish two advisory committees, one of which shall comprise
consumer representatives independent of the insurance industry and the other shall
comprise insurance industry representatives.
(2) The Commission may establish additional advisory committees as its bylaws may provide
for the carrying out of its functions.
(g) Corporate records of the Commission. The Commission shall maintain its corporate books and records in accordance with the
bylaws.
(h) 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 or personal injury or other civil
liability caused by or arising out of any actual or alleged act, error, or omission
that occurred, or that the person against whom the claim is made had a reasonable
basis for believing occurred within the scope of Commission employment, duties, or
responsibilities, provided that nothing in this subdivision shall be construed to
protect any such person from suit and 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 in this
chapter 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. (Added 2005, No. 70, § 2; amended 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2021, No. 105 (Adj. Sess.), § 274, eff. July 1, 2022.)
§ 8504. 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. (Added 2005, No. 70, § 2.)
§ 8505. Rules and operating procedures; rulemaking functions of the Commission and opting
out of uniform standards
(a) Rulemaking authority. The Commission shall adopt 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 chapter, or
the powers granted under this chapter, 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
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 90 days after its adoption 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 section. “Opt out” means
any action by a compacting state to decline to adopt or participate in an adopted
uniform standard. All other rules and operating procedures, and amendments to such
rules and operating procedures, 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 rule
duly adopted by the insurance department under the compacting state’s Administrative
Procedure Act. The Vermont Department of Financial Regulation may adopt an emergency
rule for the purposes of this subsection. If a compacting state elects to opt out
of a uniform standard by rule, it must give written notice to the Commission not later
than 10 business days after the uniform standard is adopted, or at the time the state
becomes a compacting state and finds that the uniform standard does not provide reasonable
protections to the citizens of the state, given the conditions in the state. The Commissioner
shall make specific findings of fact and conclusions of law, based on a preponderance
of the evidence, detailing the conditions in the state that warrant a departure from
the uniform standard and determining that the uniform standard would not reasonably
protect the 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 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 chapter and the presumption that a uniform standard
adopted by the Commission provides reasonable protections to consumers of the relevant
product.
(2) 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
adopted.
(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
as the opt out legislation is enacted into law or the opt out rule 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 section 8512 of this chapter for withdrawals.
(f) Stay of uniform standard. If a compacting state has formally initiated the process of opting out of a uniform
standard by rule, and while the regulatory opt out is pending, the compacting state
may petition the Commission, at least 15 days before the effective date of the uniform
standard, to stay the effectiveness of the uniform standard in that state. The Commission
may grant a stay if it determines the regulatory opt out is being pursued in a reasonable
manner and there is a likelihood of success. If a stay is granted or extended by the
Commission, the stay or extension thereof may postpone the effective date by up to
90 days, unless affirmatively extended by the Commission, provided a stay may not
be permitted to remain in effect for more than one year unless the compacting state
can show extraordinary circumstances that warrant a continuance of the stay, including
the existence of a legal challenge that prevents the compacting state from opting
out. A stay may be terminated by the Commission upon notice that the rulemaking process
has been terminated.
(g) Not later than 30 days after a rule or operating procedure is adopted, any person
may file a petition for judicial review of the rule or operating procedure, 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. (Added 2005, No. 70, § 2; amended 2021, No. 105 (Adj. Sess.), § 275, eff. July 1, 2022.)
§ 8506. Commission records and enforcement
(a) The Commission shall adopt rules establishing conditions and procedures for public
inspection and copying of its information and official records, except such information
and records involving the privacy of individuals and insurers’ trade secrets. The
Commission may adopt additional rules under which it may make available to federal
and state agencies, including law enforcement agencies, records and information otherwise
exempt from disclosure, and may enter into agreements with such agencies to receive
or exchange information or records subject to nondisclosure and confidentiality provisions.
(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 chapter, 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 section 8513
of this chapter.
(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 his or her 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
the compact except upon a final order of the Commission, issued at the request of
a commissioner after prior notice to the insurer and an opportunity for hearing before
the Commission.
(2) Before a commissioner may bring an action for violation of any provision, standard,
or requirement of the compact relating to the content of an advertisement not approved
or certified to the Commission, the Commission, or an authorized Commission officer
or employee, must authorize the action. However, authorization pursuant to this subdivision
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. (Added 2005, No. 70, § 2.)
§ 8507. Dispute resolution
The Commission shall attempt, upon the request of a member, to resolve any disputes
or other issues that are subject to this compact and that may arise between two or
more compacting states, or between compacting states and noncompacting states, and
the Commission shall adopt an operating procedure providing for resolution of such
disputes. (Added 2005, No. 70, § 2.)
§ 8508. 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 chapter shall be construed to restrict or otherwise prevent an insurer from
filing its product with the insurance department in any state where 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
of this chapter to the contrary, the Commission shall adopt rules to establish conditions
and procedures under which the Commission will provide public access to product filing
information. In establishing such rules, the Commission shall consider the interests
of the public in having access to such information, as well as protection of personal
medical and financial information and trade secrets, that may be contained in a product
filing or supporting information.
(c) Any product approved by the Commission may be sold or otherwise issued in those compacting
states for which the insurer is legally authorized to do business. (Added 2005, No. 70, § 2; amended 2021, No. 105 (Adj. Sess.), § 276, eff. July 1, 2022.)
§ 8509. Review of Commission decisions regarding filings
(a) Not later than 30 days after the Commission has given notice of a disapproved product
or advertisement filed with the Commission, the insurer or third-party filer whose
filing was disapproved may appeal the determination to a review panel appointed by
the Commission. The Commission shall adopt rules to establish procedures for appointing
such review panels and provide for notice and hearing. An allegation that the Commission,
in disapproving a product or advertisement filed with the Commission, acted arbitrarily,
capriciously, or in a manner that is an abuse of discretion or otherwise not in accordance
with the law, is subject to judicial review in accordance with subsection 8501(e)
of this chapter.
(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 subsection (a) of this section. (Added 2005, No. 70, § 2.)
§ 8510. 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 section 8505 of this chapter.
(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 governors and legislatures 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
individuals and insurers’ proprietary information, including trade secrets, shall
remain confidential.
(g) No compacting state shall 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. (Added 2005, No. 70, § 2.)
§ 8511. Compacting states; effective date and amendment
(a) Any state is eligible to become a compacting state.
(b) The compact shall become effective and binding upon legislative enactment of the 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 26 states are compacting states or, alternatively, by states
representing greater than 40 percent of the premium volume for life insurance, annuity,
disability income, and long-term care insurance products, based on records of the
NAIC for the prior year. Thereafter, it shall become effective and binding as to any
other compacting state upon enactment of the compact into law by that state.
(c) Amendments to the compact may be proposed by the Commission for enactment by the compacting
states. No amendment shall become effective and binding upon the Commission and the
compacting states unless and until all compacting states enact the amendment into
law. (Added 2005, No. 70, § 2.)
§ 8512. Withdrawal
(a) Once effective, the compact shall continue in force and remain binding upon each and
every compacting state; provided, that a compacting state may withdraw from the compact
(“withdrawing state”) by enacting a statute specifically repealing the statute that
enacted the compact into law.
(b) The effective date of withdrawal is the effective date of the repealing statute. However,
the withdrawal shall not apply to any product filings approved or self-certified,
or any advertisement of such products, on the date the repealing statute becomes effective,
except by mutual agreement of the Commission and the withdrawing state, unless the
approval is rescinded by the withdrawing state as provided in subsection (e) of this
section.
(c) 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.
(d) The Commission shall notify the other compacting states of the introduction of such
legislation within 10 days after its receipt of notice thereof.
(e) The withdrawing state is responsible for all obligations, duties, and liabilities
incurred through the effective date of withdrawal, including any obligations the performance
of which extends beyond the effective date of withdrawal, except to the extent those
obligations may have been released or relinquished by mutual agreement of the Commission
and the withdrawing state. The Commission’s approval of products and advertisement
prior to the effective date of withdrawal shall continue to be effective and be given
full force and effect in the withdrawing state, unless formally rescinded by the withdrawing
state in the same manner as provided by the laws of the withdrawing state for the
prospective disapproval of products or advertisement previously approved under state
law.
(f) Reinstatement following withdrawal of any compacting state shall occur upon the effective
date of the withdrawing state reenacting the compact. (Added 2005, No. 70, § 2.)
§ 8513. Default
(a) If the Commission determines that any compacting state has at any time defaulted (“defaulting
state”) in the performance of any of its obligations or responsibilities under this
compact, the bylaws or duly adopted rules or operating procedures, 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 failure of
a compacting state to perform its obligations or responsibilities and any other grounds
designated in Commission rules. The Commission shall immediately notify the defaulting
state in writing of the defaulting state’s suspension pending a cure of the default.
The Commission shall stipulate the conditions and the time period within which the
defaulting state must cure its default. If the defaulting state fails to cure the
default within the time period specified by the Commission, the defaulting state shall
be terminated from the compact and all rights, privileges, and benefits conferred
by this compact shall be terminated from the effective date of termination.
(b) Product approvals by the Commission or product self-certifications, or any advertisement
in connection with such product that are in force on the effective date of termination
shall remain in force in the defaulting state in the same manner as if the defaulting
state had withdrawn voluntarily pursuant to section 8512 of this chapter.
(c) Reinstatement following termination of any compacting state requires a reenactment
of the compact. (Added 2005, No. 70, § 2.)
§ 8514. Dissolution of compact
(a) The compact dissolves effective upon the date of the withdrawal or default of the
compacting state that reduces membership in the compact to one compacting state.
(b) Upon the dissolution of this compact, the compact becomes null and void and shall
be of no further force or effect, and the business and affairs of the Commission shall
be wound up and any surplus funds shall be distributed in accordance with the bylaws. (Added 2005, No. 70, § 2.)
§ 8515. 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 the compact shall
be enforceable.
(b) The provisions of this compact shall be liberally construed to effectuate its purposes. (Added 2005, No. 70, § 2.)
§ 8516. Other laws
(a) Nothing in this chapter prevents the enforcement of any other law of a compacting
state, except as provided in subsection (b) of this section.
(b) For any product approved or certified to the Commission, the rules, uniform standards,
and any other requirements of the Commission shall constitute the exclusive provisions
applicable to the content, approval, and certification of such products. For advertisement
that is subject to the Commission’s authority, any rule, uniform standard, or other
requirement of the Commission that governs the content of the advertisement shall
constitute the exclusive provision that a Commissioner may apply to the content of
the advertisement. Notwithstanding the foregoing, no action taken by the Commission
shall abrogate or restrict:
(1) the access of any person to state courts;
(2) remedies available under state law related to breach of contract, tort, or other laws
not specifically directed to the content of the product;
(3) state law relating to the construction of insurance contracts; or
(4) the authority of the Attorney General of the state, including maintaining any actions
or proceedings, as authorized by law.
(c) All insurance products filed with individual states shall be subject to the laws of
those states. (Added 2005, No. 70, § 2; amended 2021, No. 105 (Adj. Sess.), § 277, eff. July 1, 2022.)
§ 8517. Binding effect of this compact
(a) All lawful actions of the Commission, including all rules and operating procedures
adopted by the Commission, are binding upon the compacting states.
(b) All agreements between the Commission and the compacting states are binding in accordance
with their terms.
(c) Upon the request of a party to a conflict over the meaning or interpretation of Commission
actions, and upon a majority vote of the compacting states, the Commission may issue
advisory opinions regarding the meaning or interpretation in dispute.
(d) In the event any provision of this compact exceeds the constitutional limits imposed
on the legislature of any compacting state, the obligations, duties, powers, or jurisdiction
sought to be conferred by that provision upon the Commission shall be ineffective
as to that compacting state, and those obligations, duties, powers, or jurisdiction
shall remain in the compacting state and shall be exercised by the agency thereof
to which those obligations, duties, powers, or jurisdiction is delegated by law in
effect at the time this compact becomes effective. (Added 2005, No. 70, § 2.)