Pennsylvania Act 2005-78 — INTERSTATE INSURANCE PRODUCT REGULATION COMPACT ESTABLISHMENT ACT

Act text

INTERSTATE INSURANCE PRODUCT REGULATION COMPACT ESTABLISHMENT ACT
                  Act of Nov. 23, 2005, P.L. 416, No. 78              Cl. 40
                                  AN ACT

     Joining with other states in an effort to establish an
        interstate compact to regulate designated insurance products.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

     Section 1.  Short title.
        This act shall be known and may be cited as the Interstate
     Insurance Product Regulation Compact Establishment Act.
     Section 2.  Declaration of policy.
        The General Assembly finds and declares that, pursuant to the
     terms and conditions of this act, the Commonwealth of
     Pennsylvania seeks to join with other states to establish the
     Interstate Insurance Product Regulation Compact and become a
     member of the Interstate Insurance Product Regulation
     Commission. The Insurance Commissioner shall serve as the
     representative of the Commonwealth to the commission.
     Section 3.  Compact.
        The Interstate Insurance Product Regulation Compact is
     enacted and entered into with all other jurisdictions legally
     joining in it in the form substantially as follows:
     Article I.  Purposes
     The purposes of this Compact are, through means of joint and
     cooperative action among the Compacting States:
     1.  To promote and protect the interest of consumers of
     individual and group annuity, life insurance, disability income
     and long-term care insurance products;
     2.  To develop uniform standards for insurance products covered
     under the Compact;
     3.  To establish a central clearinghouse to receive and provide
     prompt review of insurance products covered under the Compact
     and, in certain cases, advertisements related thereto, submitted
     by insurers authorized to do business in one or more Compacting
     States;
     4.  To give appropriate regulatory approval to those product
     filings and advertisements satisfying the applicable uniform
     standard;
     5.  To improve coordination of regulatory resources and
     expertise between state insurance departments regarding the
     setting of uniform standards and review of insurance products
     covered under the Compact;
     6.  To create the Interstate Insurance Product Regulation
     Commission; and
     7.  To perform these and such other related functions as may be
     consistent with the state regulation of the business of
     insurance.
     Article II.  Definitions
     For purposes of this Compact:
     1.  "Advertisement" means any material designed to create public
     interest in a Product, or induce the public to purchase,
     increase, modify, reinstate, borrow on, surrender, replace or
     retain a policy, as more specifically defined in the Rules and
     Operating Procedures of the Commission.
     2.  "Bylaws" mean those bylaws established by the Commission for
     its governance, or for directing or controlling the Commission's
     actions or conduct.
     3.  "Compacting State" means any State which has enacted this
     Compact legislation and which has not withdrawn pursuant to
     Article XIV, Section 1, or been terminated pursuant to Article
     XIV, Section 2.
     4.  "Commission" means the "Interstate Insurance Product
     Regulation Commission" established by this Compact.
     5.  "Commissioner" means the chief insurance regulatory official
     of a State including, but not limited to commissioner,
     superintendent, director or administrator.
     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 Act.
     8.  "Member" means the person chosen by a Compacting State as
     its representative to the Commission, or his or her designee.
     9.  "Non-Compacting State" means any State which is not at the
     time a Compacting State.
     10.  "Operating Procedures" mean procedures promulgated by the
     Commission implementing a Rule, Uniform Standard or a provision
     of this Compact.
     11.  "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.
     12.  "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
     of this Compact, designed to implement, interpret, or prescribe
     law or policy or describing the organization, procedure, or
     practice requirements of the Commission, which shall have the
     force and effect of law in the Compacting States.
     13.  "State" means any state, district or territory of the
     United States of America.
     14.  "Third-Party Filer" means an entity that submits a Product
     filing to the Commission on behalf of an Insurer.
     15.  "Uniform Standard" means a standard adopted by the
     Commission for a Product line, pursuant to Article VII of this
     Compact, and shall include all of the Product requirements in
     aggregate; 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.
     Article III.  Establishment of the Commission and Venue
     1.  The Compacting States hereby create and establish a joint
     public agency known as the "Interstate Insurance Product
     Regulation Commission." Pursuant to Article IV, the Commission
     will have the power to develop Uniform Standards for Product
     lines, receive and provide prompt review of Products filed
     therewith, and give approval to those Product filings satisfying
     applicable Uniform Standards; 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.
     2.  The Commission is a body corporate and politic, and an
     instrumentality of the Compacting States.
     3.  The Commission is solely responsible for its liabilities
     except as otherwise specifically provided in this Compact.
     4.  Venue is proper and judicial proceedings by or against the
     Commission shall be brought solely and exclusively in a Court of
     competent jurisdiction where the principal office of the
     Commission is located.
     Article IV.  Powers of the Commission
     The Commission shall have the following powers:
     1.  To promulgate Rules, pursuant to Article VII of this
     Compact, which shall have the force and effect of law and shall
     be binding in the Compacting States to the extent and in the
     manner provided in this Compact;
     2.  To exercise its rule-making authority and establish
     reasonable Uniform Standards for Products covered under the
     Compact, and Advertisement related thereto, which shall have the
     force and effect of law and shall be binding in the Compacting
     States, but only for those Products filed with the Commission,
     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 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 rule-making 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 promulgate Operating Procedures, pursuant to Article VII
     of this Compact, 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, but not limited to, employees of a Compacting State;
     12.  To hire employees, professionals or specialists, and elect
     or appoint officers, and to fix their compensation, define their
     duties and give them appropriate authority to carry out the
     purposes of the Compact, and determine their qualifications; and
     to establish the Commission's personnel policies and programs
     relating to, among other things, conflicts of interest, rates of
     compensation and qualifications of personnel;
     13.  To accept any and all appropriate donations and grants of
     money, equipment, supplies, materials and services, and to
     receive, utilize and dispose of the same; 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 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 Non-compacting 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; and
     26.  To perform such other functions as may be necessary or
     appropriate to achieve the purposes of this Compact consistent
     with the state regulation of the business of insurance.
     Article V.  Organization of the Commission
     1.  Membership, Voting and Bylaws
     a.  Each Compacting State shall have and be limited to one
     Member. Each Member shall be qualified to serve in that capacity
     pursuant to applicable law of the Compacting State. Any Member
     may be removed or suspended from office as provided by the law
     of the State from which he or she shall be appointed. Any
     vacancy occurring in the Commission shall be filled in
     accordance with the laws of the Compacting State wherein the
     vacancy exists. Nothing herein shall be construed to affect the
     manner in which a Compacting State determines the election or
     appointment and qualification of its own Commissioner.
     b.  Each Member shall be entitled to one vote and shall have an
     opportunity to participate in the governance of the Commission
     in accordance with the Bylaws. Notwithstanding any provision
     herein to the contrary, no action of the Commission with respect
     to the promulgation of a Uniform Standard shall be effective
     unless two-thirds (2/3) of the Members vote in favor thereof.
     c.  The Commission shall, by a majority of the Members,
     prescribe Bylaws to govern its conduct as may be necessary or
     appropriate to carry out the purposes, and exercise the powers,
     of the Compact, including, but not limited to:
     i.  Establishing the fiscal year of the Commission;
     ii.  Providing reasonable procedures for appointing and electing
     members, as well as holding meetings, of the Management
     Committee;
     iii.  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;
     iv.  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 must make public (i) a copy of
     the vote to close the meeting revealing the vote of each Member
     with no proxy votes allowed, and (ii) votes taken during such
     meeting;
     v.  Establishing the titles, duties and authority and reasonable
     procedures for the election of the officers of the Commission;
     vi.  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;
     vii.  Promulgating a code of ethics to address permissible and
     prohibited activities of commission members and employees; and
     viii.  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/or reserving of all of its debts and
     obligations.
     d.  The Commission shall publish its bylaws in a convenient form
     and file a copy thereof and a copy of any amendment thereto,
     with the appropriate agency or officer in each of the Compacting
     States.
     2.  Management Committee, Officers and Personnel
     a.  A Management Committee comprising no more than fourteen (14)
     members shall be established as follows:
     i.  One (1) member from each of the six (6) 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;
     ii.  Four (4) members from those Compacting States with at least
     two percent (2%) of the market based on the premium volume
     described above, other than the six (6) Compacting States with
     the largest premium volume, selected on a rotating basis as
     provided in the Bylaws; and
     (iii).  Four (4) members from those Compacting States with less
     than two percent (2%) of the market, based on the premium volume
     described above, with one (1) selected from each of the four (4)
     zone regions of the NAIC as provided in the Bylaws.
     b.  The Management Committee shall have such authority and
     duties as may be set forth in the Bylaws, including but not
     limited to:
     i.  Managing the affairs of the Commission in a manner
     consistent with the Bylaws and purposes of the Commission;
     ii.  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
     (2/3) of the members of the Management Committee;
     iii.  Overseeing the offices of the Commission; and
     iv.  Planning, implementing, and coordinating communications and
     activities with other state, federal and local government
     organizations in order to advance the goals of the Commission.
     c.  The Commission shall elect annually officers from the
     Management Committee, with each having such authority and
     duties, as may be specified in the Bylaws.
     d.  The Management Committee may, subject to the approval of the
     Commission, appoint or retain an executive director for 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.
     3.  Legislative and Advisory Committees
     a.  A legislative committee comprising state legislators or
     their designees shall be established to monitor the operations
     of, and make recommendations to, the Commission, including the
     Management Committee; 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.
     b.  The Commission shall establish two (2) advisory committees,
     one of which shall comprise consumer representatives independent
     of the insurance industry, and the other comprising insurance
     industry representatives.
     c.  The Commission may establish additional advisory committees
     as its Bylaws may provide for the carrying out of its functions.
     4.  Corporate Records of the Commission
     The Commission shall maintain its corporate books and records in
     accordance with the Bylaws.
     5.  Qualified Immunity, Defense and Indemnification
     a.  The Members, officers, executive director, employees and
     representatives of the Commission shall be immune from suit and
     liability, either personally or in their official capacity, for
     any claim for damage to or loss of property or personal injury
     or other civil liability caused by or arising out of any actual
     or alleged act, error or omission that occurred, or that the
     person against whom the claim is made had a reasonable basis for
     believing occurred within the scope of Commission employment,
     duties or responsibilities; provided, that nothing in this
     paragraph shall be construed to protect any such person from
     suit and/or liability for any damage, loss, injury or liability
     caused by the intentional or willful and wanton misconduct of
     that person.
     b.  The Commission shall defend any Member, officer, executive
     director, employee or representative of the Commission in any
     civil action seeking to impose liability arising out of any
     actual or alleged act, error or omission that occurred within
     the scope of Commission employment, duties or responsibilities,
     or that the person against whom the claim is made had a
     reasonable basis for believing occurred within the scope of
     Commission employment, duties or responsibilities; provided,
     that nothing herein shall be construed to prohibit that person
     from retaining his or her 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.
     c.  The Commission shall indemnify and hold harmless any Member,
     officer, executive director, employee or representative of the
     Commission for the amount of any settlement or judgment obtained
     against that person arising out of any actual or alleged act,
     error or omission that occurred within the scope of Commission
     employment, duties or responsibilities, or that such person had
     a reasonable basis for believing occurred within the scope of
     Commission employment, duties or responsibilities, provided,
     that the actual or alleged act, error or omission did not result
     from the intentional or willful and wanton misconduct of that
     person.
     Article VI.  Meetings and Acts of the Commission
     1.  The Commission shall meet and take such actions as are
     consistent with the provisions of this Compact and the Bylaws.
     2.  Each Member of the Commission shall have the right and power
     to cast a vote to which that Compacting State is entitled and to
     participate in the business and affairs of the Commission. A
     Member shall vote in person or by such other means as provided
     in the Bylaws. The Bylaws may provide for Members' participation
     in meetings by telephone or other means of communication.
     3.  The Commission shall meet at least once during each calendar
     year. Additional meetings shall be held as set forth in the
     Bylaws.
     Article VII.  Rules and Operating Procedures: Rulemaking
     Functions of the Commission and Opting Out of Uniform Standards
     1.  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 Act, or
     the powers granted hereunder, then such an action by the
     Commission shall be invalid and have no force and effect.
     2.  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(s) in each Compacting State responsible for insurance
     issues of its intention to adopt the Uniform Standard. The
     Commission in adopting a Uniform Standard shall consider fully
     all submitted materials and issue a concise explanation of its
     decision.
     3.  Effective Date and Opt Out of a Uniform Standard. A Uniform
     Standard shall become effective ninety (90) 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" shall be defined as 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.
     4.  Opt Out Procedure. 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
     (a) give written notice to the Commission no later than ten (10)
     business days after the Uniform Standard is promulgated, or at
     the time the State becomes a Compacting State and (b) find 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 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: (i)  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 Act; and (ii)  the
     presumption that a Uniform Standard adopted by the Commission
     provides reasonable protections to consumers of the relevant
     Product.
     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.
     5.  Effect of Opt Out. If a Compacting State elects to opt out
     of a Uniform Standard, the Uniform Standard shall remain
     applicable in the Compacting State electing to opt out until
     such time the opt out legislation is enacted into law or the
     regulation opting out becomes effective.
     Once the opt out of a Uniform Standard by a Compacting State
     becomes effective as provided under the laws of that State, the
     Uniform Standard shall have no further force and effect in that
     State unless and until the legislation or regulation
     implementing the opt out is repealed or otherwise becomes
     ineffective under the laws of the State. If a Compacting State
     opts out of a Uniform Standard after the Uniform Standard has
     been made effective in that State, the opt out shall have the
     same prospective effect as provided under Article XIV for
     withdrawals.
     6.  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
     (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 ninety (90) days, unless affirmatively
     extended by the Commission; provided, a stay may not be
     permitted to remain in effect for more than one (1) 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.
     7.  Not later than thirty (30) days after a Rule or Operating
     Procedure is promulgated, 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.
     Article VIII.  Commission Records and Enforcement
     1.  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.
     2.  Except as to privileged records, data and information, the
     laws of any Compacting State pertaining to confidentiality or
     nondisclosure shall not relieve any Compacting State
     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 Act, the
     Commission shall not be subject to the Compacting State's laws
     pertaining to confidentiality and nondisclosure with respect to
     records, data and information in its possession. Confidential
     information of the Commission shall remain confidential after
     such information is provided to any Commissioner.
     3.  The Commission shall monitor Compacting States for
     compliance with duly adopted Bylaws, Rules, including Uniform
     Standards, and Operating Procedures. The Commission shall notify
     any non-complying Compacting State in writing of its
     noncompliance with Commission Bylaws, Rules or Operating
     Procedures. If a non-complying 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.
     4.  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:
     a.  With respect to the Commissioner's market regulation of a
     Product or Advertisement that is approved or certified to the
     Commission, the content of the Product or Advertisement shall
     not constitute a violation of the provisions, standards or
     requirements of the Compact except upon a final order of the
     Commission, issued at the request of a Commissioner after prior
     notice to the Insurer and an opportunity for hearing before the
     Commission.
     b.  Before a Commissioner may bring an action for violation of
     any provision, standard or requirement of the Compact relating
     to the content of an Advertisement not approved or certified to
     the Commission, the Commission, or an authorized Commission
     officer or employee, must authorize the action. However,
     authorization pursuant to this paragraph does not require notice
     to the Insurer, opportunity for hearing or disclosure of
     requests for authorization or records of the Commission's action
     on such requests.
     Article IX.  Dispute Resolution
     The Commission shall attempt, upon the request of a Member, to
     resolve any disputes or other issues that are subject to this
     Compact and which may arise between two or more Compacting
     States, or between Compacting States and Non-compacting States,
     and the Commission shall promulgate an Operating Procedure
     providing for resolution of such disputes.
     Article X.  Product Filing and Approval
     1.  Insurers and Third-Party Filers seeking to have a Product
     approved by the Commission shall file the Product with, and pay
     applicable filing fees to, the Commission. Nothing in this Act
     shall be construed to restrict or otherwise prevent an insurer
     from filing its Product with the insurance department in any
     State wherein the insurer is licensed to conduct the business of
     insurance, and such filing shall be subject to the laws of the
     States where filed.
     2.  The Commission shall establish appropriate filing and review
     processes and procedures pursuant to Commission Rules and
     Operating Procedures. 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.
     3.  Any Product approved by the Commission may be sold or
     otherwise issued in those Compacting States for which the
     Insurer is legally authorized to do business.
     Article XI.  Review of Commission Decisions Regarding Filings
     1.  Not later than thirty (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
     promulgate 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, Section 4.
     2.  The Commission shall have authority to monitor, review and
     reconsider Products and Advertisement subsequent to their filing
     or approval upon a finding that the product does not meet the
     relevant Uniform Standard. Where appropriate, the Commission may
     withdraw or modify its approval after proper notice and hearing,
     subject to the appeal process in Section 1 above.
     Article XII.  Finance
     1.  The Commission shall pay or provide for the payment of the
     reasonable expenses of its establishment and organization. To
     fund the cost of its initial operations, the Commission may
     accept contributions and other forms of funding from the
     National Association of Insurance Commissioners, Compacting
     States and other sources. Contributions and other forms of
     funding from other sources shall be of such a nature that the
     independence of the Commission concerning the performance of its
     duties shall not be compromised.
     2.  The Commission shall collect a filing fee from each Insurer
     and Third Party Filer filing a product with the Commission to
     cover the cost of the operations and activities of the
     Commission and its staff in a total amount sufficient to cover
     the Commission's annual budget.
     3.  The Commission's budget for a fiscal year shall not be
     approved until it has been subject to notice and comment as set
     forth in Article VII of this Compact.
     4.  The Commission shall be exempt from all taxation in and by
     the Compacting States.
     5.  The Commission shall not pledge the credit of any Compacting
     State, except by and with the appropriate legal authority of
     that Compacting State.
     6.  The Commission shall keep complete and accurate accounts of
     all its internal receipts, including grants and donations, and
     disbursements of all funds under its control. The internal
     financial accounts of the Commission shall be subject to the
     accounting procedures established under its Bylaws. The
     financial accounts and reports including the system of internal
     controls and procedures of the Commission shall be audited
     annually by an independent certified public accountant. Upon the
     determination of the Commission, but no less frequently than
     every three (3) 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 individuals and insurers' proprietary information,
     including trade secrets, shall remain confidential.
     7.  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.
     Article XIII.  Compacting States, Effective Date and Amendment
     1.  Any State is eligible to become a Compacting State.
     2.  The Compact shall become effective and binding upon
     legislative enactment of the Compact into law by two Compacting
     States; 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 (26) States are Compacting States or, alternatively,
     by States representing greater than forty percent (40%) 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.
     3.  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.
     Article XIV.  Withdrawal, Default and Termination
     1.  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 which enacted the Compact into law.
     b.  The effective date of withdrawal is the effective date of
     the repealing statute. However, the withdrawal shall not apply
     to any product filings approved or self-certified, or any
     Advertisement of such products, on the date the repealing
     statute becomes effective, except by mutual agreement of the
     Commission and the Withdrawing State unless the approval is
     rescinded by the Withdrawing State as provided in Paragraph e of
     this 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 ten (10) days after
     its receipt of notice thereof.
     e.  The Withdrawing State is responsible for all obligations,
     duties and liabilities incurred through the effective date of
     withdrawal, including any obligations, the performance of which
     extend beyond the effective date of withdrawal, except to the
     extent those obligations may have been released or relinquished
     by mutual agreement of the Commission and the Withdrawing State.
     The Commission's approval of Products and Advertisement prior to
     the effective date of withdrawal shall continue to be effective
     and be given full force and effect in the Withdrawing State,
     unless formally rescinded by the Interstate Insurance Product
     Regulation Compact Withdrawing State in the same manner as
     provided by the laws of the Withdrawing State for the
     prospective disapproval of products or advertisement previously
     approved under state law.
     f.  Reinstatement following withdrawal of any Compacting State
     shall occur upon the effective date of the Withdrawing State
     reenacting the Compact.
     2.  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 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 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 1 of this article.
     c.  Reinstatement following termination of any Compacting State
     requires a reenactment of the Compact.
     3.  Dissolution of Compact
     a.  The Compact dissolves effective upon the date of the
     withdrawal or default of the Compacting State which reduces
     membership in the Compact to one Compacting State.
     b.  Upon the dissolution of this Compact, the Compact becomes
     null and void and shall be of no further force or effect, and
     the business and affairs of the Commission shall be wound up and
     any surplus funds shall be distributed in accordance with the
     Bylaws.
     Article XV.  Severability and Construction
     1.  The provisions of this Compact shall be severable; and if
     any phrase, clause, sentence or provision is deemed
     unenforceable, the remaining provisions of the Compact shall be
     enforceable.
     2.  The provisions of this Compact shall be liberally construed
     to effectuate its purposes.
     Article XVI.  Binding Effect of Compact and Other Laws
     1.  Other Laws
     a.  Nothing herein prevents the enforcement of any other law of
     a Compacting State, except as provided in Paragraph 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
     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, no
     action taken by the Commission shall abrogate or restrict: (i)
     the access of any person to state courts; (ii)  remedies
     available under state law related to breach of contract, tort,
     or other laws not specifically directed to the content of the
     Product; (iii)  state law relating to the construction of
     insurance contracts; or (iv)  the authority of the attorney
     general of the state, including but not limited to maintaining
     any actions or proceedings, as authorized by law.
     c.  All insurance products filed with individual States shall be
     subject to the laws of those States.
     2.  Binding Effect of this Compact
     a.  All lawful actions of the Commission, including all Rules
     and Operating Procedures promulgated by the Commission, are
     binding upon the Compacting States.
     b.  All agreements between the Commission and the Compacting
     States are binding in accordance with their terms.
     c.  Upon the request of a party to a conflict over the meaning
     or interpretation of Commission actions, and upon a majority
     vote of the Compacting States, the Commission may issue advisory
     opinions regarding the meaning or interpretation in dispute.
     d.  In the event any provision of this Compact exceeds the
     constitutional limits imposed on the legislature of any
     Compacting State, the obligations, duties, powers or
     jurisdiction sought to be conferred by that provision upon the
     Commission shall be ineffective as to that Compacting State, and
     those obligations, duties, powers or jurisdiction shall remain
     in the Compacting State and shall be exercised by the agency
     thereof to which those obligations, duties, powers or
     jurisdiction are delegated by law in effect at the time this
     Compact becomes effective.
     Section 4.  Effective date.
        This act shall take effect in 60 days.