A06191 Summary:

BILL NOA06191
 
SAME ASNo same as
 
SPONSORTitus (MS)
 
COSPNSRRobinson, Weisenberg, Latimer
 
MLTSPNSR
 
Add Art 88 SS8801 - 8817, Ins L
 
Establishes the "Interstate insurance product regulation compact" to regulate certain insurance products among member states and to promote and protect the interest of consumers of individual and group annuity, life insurance, disability income and long term care insurance products.
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A06191 Actions:

BILL NOA06191
 
02/26/2009referred to insurance
01/06/2010referred to insurance
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A06191 Floor Votes:

There are no votes for this bill in this legislative session.
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A06191 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6191
 
                               2009-2010 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 26, 2009
                                       ___________
 
        Introduced  by  M.  of  A.  TITUS, ROBINSON, WEISENBERG -- read once and
          referred to the Committee on Insurance
 
        AN ACT to amend the insurance  law,  in  relation  to  establishing  the
          interstate  insurance  product  regulation compact to regulate certain
          insurance products
 

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Legislative findings and intent. An interstate compact is
     2  an agreement between states that permits states to cooperate  on  multi-
     3  state  or  national issues while retaining state control. There are over
     4  two hundred interstate compacts currently in existence and  every  state
     5  belongs  to  at  least  fourteen such compacts. The interstate insurance
     6  product regulation compact is designed to streamline state product regu-
     7  lation systems to allow insurers to more quickly market certain types of
     8  insurance products nationally and to reduce the number of variations  of
     9  the  same  product  that a company must produce to meet specific product
    10  standards. The compact would cover individual  and  group  products  for

    11  life  insurance,  annuities, disability income and long-term care insur-
    12  ance. The state of New York seeks to join with other states  and  estab-
    13  lish  the  interstate  insurance product regulation compact and become a
    14  member of the interstate insurance product regulation commission.
    15    § 2. The insurance law is amended by adding a new article 88  to  read
    16  as follows:
 
    17                                 ARTICLE 88
    18               INTERSTATE INSURANCE PRODUCT REGULATION COMPACT
 
    19  Section 8801. Short title.
    20          8802. Purpose.
    21          8803. Definitions.
    22          8804. Establishment of the commission and venue.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

                                                                   LBD07717-01-9

        A. 6191                             2
 
     1          8805. Powers of the commission.
     2          8806. Organization of the commission.
     3          8807. Meetings and acts of the commission.
     4          8808.  Rules  and operating procedures; rule making functions of
     5                  the commission and opting out of uniform standards.
     6          8809. Commission records and enforcement.
     7          8810. Dispute resolution.
     8          8811. Product filing and approval.
     9          8812. Review of commission decisions regarding filings.
    10          8813. Finance.
    11          8814. Compacting states, effective date and amendment.

    12          8815. Withdrawal, default and termination.
    13          8816. Severability and construction.
    14          8817. Binding effect of compact and other laws.
    15    § 8801. Short title. This article shall be known and may be  cited  as
    16  the "interstate insurance product regulation compact".
    17    §  8802.  Purpose.  The purposes of this compact are, through means of
    18  joint and cooperative action among the compacting states:
    19    (a) to promote and protect the interest of consumers of individual and
    20  group annuity, life insurance,  disability  income  and  long-term  care
    21  insurance products;
    22    (b)  to develop uniform standards for insurance products covered under
    23  the compact;

    24    (c) to establish a central clearinghouse to receive and provide prompt
    25  review of insurance products covered under the compact and,  in  certain
    26  cases,  advertisements related thereto, submitted by insurers authorized
    27  to do business in one or more compacting states;
    28    (d) to give appropriate regulatory approval to those  product  filings
    29  and advertisements satisfying the applicable uniform standard;
    30    (e)  to  improve  coordination  of  regulatory resources and expertise
    31  between state insurance departments regarding  the  setting  of  uniform
    32  standards and review of insurance products covered under the compact;
    33    (f)  to create the interstate insurance product regulation commission;
    34  and

    35    (g) to perform such other related functions as may be consistent  with
    36  the state regulation of the business of insurance.
    37    § 8803. Definitions. As used in this article:
    38    (a)  "Advertisement"  means  any  material  designed  to create public
    39  interest in a product, or induce the public to purchase, increase, modi-
    40  fy, reinstate, borrow on, surrender, replace or retain a policy, as more
    41  specifically defined in  the  rules  and  operating  procedures  of  the
    42  commission.
    43    (b) "By-laws" mean those by-laws established by the commission for its
    44  governance  or  for directing or controlling the commission's actions or
    45  conduct.
    46    (c) "Compacting state" means any state which has enacted this  compact

    47  legislation  and  which has not withdrawn or been terminated pursuant to
    48  section eight thousand eight hundred fifteen of this article.
    49    (d) "Commission" means the "Interstate  insurance  product  regulation
    50  commission" established by the compact.
    51    (e)  "Commissioner" means the chief insurance regulatory official of a
    52  state including, but not limited to commissioner, superintendent, direc-
    53  tor or administrator.
    54    (f) "Domiciliary state" means the state in which an insurer is  incor-
    55  porated  or  organized or, in the case of an alien insurer, its state of
    56  entry.

        A. 6191                             3
 
     1    (g) "Insurer" means any entity licensed by a state to issue  contracts

     2  of insurance for any of the lines of insurance covered by this article.
     3    (h)  "Member"  means  the  person, or his or her designee, chosen by a
     4  compacting state for service on the commission.
     5    (i) "Non-compacting state" means any state which is not at the time  a
     6  compacting state.
     7    (j)  "Operating procedures" mean procedures promulgated by the commis-
     8  sion implementing a rule,  uniform  standard  or  a  provision  of  this
     9  compact.
    10    (k)  "Product"  means  the  form  of the contract, policy application,
    11  endorsements, certificate forms, evidence of coverage forms and  related
    12  forms  for  an  individual  or group annuity, life insurance, disability
    13  income or long-term care insurance product, which an insurer is  author-

    14  ized to issue.
    15    (l)  "Rule"  means  a statement of general or particular applicability
    16  and future effect promulgated by the  commission,  including  a  uniform
    17  standard  developed  pursuant  to  section  eight thousand eight hundred
    18  eight of this article, designed to implement,  interpret,  or  prescribe
    19  law  or  policy  or  describing the organization, procedure, or practice
    20  requirements of the commission, which shall have the force and effect of
    21  law in the compacting states.
    22    (m) "State" means any state,  district  or  territory  of  the  United
    23  States of America.
    24    (n)  "Third-party filer" means an entity that submits a product filing
    25  to the commission on behalf of an insurer.

    26    (o) "Uniform standard" means a standard adopted by the commission  for
    27  a  product  line, pursuant to section eight thousand eight hundred eight
    28  of this article and shall include all of  the  product  requirements  in
    29  aggregate;  provided,  that  each  uniform  standard shall be construed,
    30  whether express or implied, to prohibit the  use  of  any  inconsistent,
    31  misleading  or  ambiguous  provisions  in a product and the form of such
    32  product made available to the public shall not be unfair, inequitable or
    33  against public policy as determined by the commission.
    34    § 8804. Establishment of the commission and venue. (a) The  compacting
    35  states  hereby  create  and establish a joint public agency known as the

    36  "Interstate  insurance  product  regulation  commission".  Pursuant   to
    37  section  eight thousand eight hundred eight of this article, the commis-
    38  sion shall have the power  to  develop  uniform  standards  for  product
    39  lines,  receive  and  provide prompt review of products filed therewith,
    40  and give approval to those product filings satisfying applicable uniform
    41  standards; provided, however, that it is not intended for the commission
    42  to be the exclusive entity for receipt and review of  insurance  product
    43  filings.  Nothing in this section shall prohibit any insurer from filing
    44  its product in any state wherein such insurer is licensed to conduct the
    45  business of insurance and such filing shall be subject to  the  laws  of
    46  the state where filed.

    47    (b)  The commission is a body corporate and politic, and an instrumen-
    48  tality of the compacting states.
    49    (c) The commission is a not-for-profit entity, separate  and  distinct
    50  from the individual compacting states.
    51    (d) The commission is solely responsible for its liabilities except as
    52  otherwise specifically provided in this compact.
    53    (e) Venue in proper and judicial proceedings by or against the commis-
    54  sion  shall  be  brought  solely and exclusively in a court of competent
    55  jurisdiction where the principal office of the commission is located.

        A. 6191                             4
 
     1    § 8805. Powers of  the  commission.  The  commission  shall  have  the
     2  following powers:

     3    (a)  to  promulgate  rules,  pursuant  to section eight thousand eight
     4  hundred eight of this article, which shall have the force and effect  of
     5  law  and  shall be binding in the compacting states to the extent and in
     6  the manner provided in this article;
     7    (b) to exercise its rule making  authority  and  establish  reasonable
     8  uniform standards for products covered under the compact, and advertise-
     9  ment  related  thereto, which shall have the force and effect of law and
    10  shall be binding in the compacting states, but only  for  such  products
    11  filed  with  the  commission; provided, however, that a compacting state
    12  shall have the right to opt out of such  uniform  standard  pursuant  to

    13  section eight thousand eight hundred eight of this article to the extent
    14  and  in  the  manner provided in this article, and provided further that
    15  any uniform standard established by the commissioner for long-term  care
    16  insurance  products  may  provide  the  same  or greater protections for
    17  consumers as, but shall not provide less  than,  those  protections  set
    18  forth  in  the National Association of Insurance Commissioners' (herein-
    19  after referred to as the "NAIC") Long-Term Care Insurance Model Act  and
    20  Long-Term  Care  Insurance Model Regulation, respectively, adopted as of
    21  2001. The commission shall consider whether any subsequent amendments to
    22  the NAIC Long-Term Care Insurance Model Act or Long-Term Care  Insurance

    23  Model  Regulation  adopted  by  the NAIC require amending of the uniform
    24  standards  established  by  the  commission  for   long-term   insurance
    25  products;
    26    (c) to receive and review in an expeditious manner products filed with
    27  the  commission,  including rate filings for disability income and long-
    28  term care insurance products, and give approval of  those  products  and
    29  rate  filings  that  satisfy the applicable uniform standard, where such
    30  approval shall have the force and effect of law and be  binding  on  the
    31  compacting  states  to  the  extent  and  in  the manner provided in the
    32  compact;
    33    (d) to receive and  review  in  an  expeditious  manner  advertisement

    34  relating  to  long-term care insurance products for which uniform stand-
    35  ards have been adopted by the commission,  and  give  approval  of  such
    36  advertisement  that  satisfies  the applicable uniform standard. For any
    37  product covered under this article, other than long-term care  insurance
    38  products,  the commission shall have the authority to require an insurer
    39  to submit all or any part of its  advertisement  with  respect  to  that
    40  product for review or approval prior to use if the commission determines
    41  that  the  nature  of  the  product is such that an advertisement of the
    42  product could have the capacity or tendency to mislead the  public.  The
    43  actions  of  the  commission  as provided in this section shall have the

    44  force and effect of law and shall be binding in the compacting states to
    45  the extent and in the manner provided in the compact;
    46    (e) to exercise its rule making authority and designate  products  and
    47  advertisement  that may be subject to a self-certification process with-
    48  out the need for prior approval by the commission;
    49    (f) to promulgate operating  procedures,  pursuant  to  section  eight
    50  thousand  eight hundred eight of this article, which shall be binding in
    51  the compacting states to the extent and in the manner  provided  in  the
    52  compact;
    53    (g) to bring and prosecute legal proceedings or actions in its name as
    54  the  commission;  provided,  that  the  standing  of any state insurance

    55  department to sue or be sued under applicable law shall not be affected;

        A. 6191                             5
 
     1    (h) to issue subpoenas  requiring  the  attendance  and  testimony  of
     2  witnesses and the production of evidence;
     3    (i) to establish and maintain offices;
     4    (j) to purchase and maintain insurance and bonds;
     5    (k)  to  borrow, accept or contract for services of personnel, includ-
     6  ing, but not limited to, employees of a compacting state;
     7    (l) to hire employees, professionals  or  specialists,  and  elect  or
     8  appoint officers, and to fix their compensation, define their duties and
     9  give  them  appropriate  authority  to  carry  out  the  purposes of the

    10  compact, and  determine  their  qualifications;  and  to  establish  the
    11  commission's  personnel  policies  and programs relating to, among other
    12  things, conflicts of interest, rates of compensation and  qualifications
    13  of personnel;
    14    (m)  to  accept any and all appropriate donations and grants of money,
    15  equipment, supplies, materials and services, and to receive, utilize and
    16  dispose of the same; provided that at all  times  the  commission  shall
    17  strive to avoid any appearance of impropriety;
    18    (n)  to  lease, purchase, accept appropriate gifts or donations of, or
    19  otherwise to own, hold, improve or use, any property, real, personal  or
    20  mixed;  provided  that at all times the commission shall strive to avoid

    21  any appearance of impropriety;
    22    (o) to sell, convey, mortgage, pledge,  lease,  exchange,  abandon  or
    23  otherwise dispose of any property, real, personal or mixed;
    24    (p)  to  remit filing fees to compacting states as may be set forth in
    25  the by-laws, rules or operating procedures;
    26    (q) to enforce compliance by compacting  states  with  rules,  uniform
    27  standards, operating procedures and by-laws;
    28    (r) to provide for dispute resolution among compacting states;
    29    (s)  to  advise compacting states on issues relating to insurers domi-
    30  ciled or doing business in non-compacting jurisdictions, consistent with
    31  the purposes of the compact;
    32    (t) to provide advice and training to those personnel in state  insur-

    33  ance  departments  responsible  for product review, and to be a resource
    34  for state insurance departments;
    35    (u) to establish a budget and make expenditures;
    36    (v) to borrow money;
    37    (w) to appoint committees, including  advisory  committees  comprising
    38  members,  state  insurance regulators, state legislators or their repre-
    39  sentatives, insurance industry and consumer  representatives,  and  such
    40  other interested persons as may be designated in the by-laws;
    41    (x) to provide and receive information from, and to cooperate with law
    42  enforcement agencies;
    43    (y) to adopt and use a corporate seal; and
    44    (z) to perform such other functions as may be necessary or appropriate

    45  to  achieve the purposes of this compact consistent with the state regu-
    46  lation of the business of insurance.
    47    § 8806. Organization of the  commission.  (a)  Each  compacting  state
    48  shall  have  and be limited to one member. The superintendent, or his or
    49  her designated representative,  shall  be  New  York's  member  of  such
    50  commission.  Each  member  shall  be qualified to serve in such capacity
    51  pursuant to applicable law of the compacting state. Any  member  may  be
    52  removed  or  suspended  from  office as provided by the law of the state
    53  from which he or she shall be appointed. Any vacancy  occurring  in  the
    54  commission shall be filled in accordance with the laws of the compacting

    55  state  wherein such vacancy exists. Nothing herein shall be construed to

        A. 6191                             6
 
     1  affect the manner in which a compacting state determines the election or
     2  appointment and qualification of its own commissioner.
     3    (b) Each member shall be entitled to one vote and shall have an oppor-
     4  tunity  to participate in the governance of the commission in accordance
     5  with the by-laws. Notwithstanding any provision of this article  to  the
     6  contrary,  no  action of the commission with respect to the promulgation
     7  of a uniform standard  shall  be  effective  unless  two-thirds  of  the
     8  members vote in favor thereof.
     9    (c)  The  commission  shall,  by  a majority of the members, prescribe

    10  by-laws to govern its conduct as may  be  necessary  or  appropriate  to
    11  carry out the purposes, and exercise the powers, of the compact, includ-
    12  ing, but not limited to:
    13    (1) establishing the fiscal year of the commission;
    14    (2)  providing  reasonable  procedures  for  holding  meetings  of the
    15  management committee;
    16    (3) providing reasonable standards and procedures for  the  establish-
    17  ment  of  other committees, and governing any general or specific deleg-
    18  ation of any authority or function of the commission;
    19    (4) providing reasonable procedures for calling and  conducting  meet-
    20  ings of the commission that consist of a majority of commission members,

    21  ensuring  reasonable  advance notice of each such meeting, and providing
    22  for the right of citizens to attend each such  meeting  with  enumerated
    23  exceptions  designed  to  protect  the public's interest, the privacy of
    24  individuals  and  insurers'  proprietary  information,  including  trade
    25  secrets.  The commission may meet in camera only after a majority of the
    26  entire membership votes to close a meeting in toto or in part.  As  soon
    27  as  practicable,  the  commission must make public a copy of the vote to
    28  close the meeting revealing the vote of each member with no proxy  votes
    29  allowed, and votes taken during such meeting;
    30    (5)  establishing  the  titles,  duties  and  authority and reasonable

    31  procedures for the election of the officers of the commission;
    32    (6) providing reasonable standards and procedures for  the  establish-
    33  ment of the personnel policies and programs of the commission.  Notwith-
    34  standing  any  civil  service  or  other  similar laws of any compacting
    35  state, the by-laws shall exclusively govern the personnel  policies  and
    36  programs of the commission;
    37    (7) promulgating a code of ethics to address permissible and prohibit-
    38  ed activities of commission members and employees; and
    39    (8) providing a mechanism for winding up the operations of the commis-
    40  sion  and  the equitable disposition of any surplus funds that may exist
    41  after the termination of the compact after the payment and/or  reserving

    42  of all of its debts and obligations.
    43    (d)  The commission shall publish its by-laws in a convenient form and
    44  file a copy thereof and a copy of any amendment thereto, with the appro-
    45  priate agency or officer in each of the compacting states.
    46    (e) A management committee comprising no more  than  fourteen  members
    47  shall be established as follows:
    48    (1) one member from each of the six compacting states with the largest
    49  premium  volume  for  individual  and  group annuities, life, disability
    50  income and  long-term  care  insurance  products,  determined  from  the
    51  records of the NAIC as of December thirty-first of the prior year;
    52    (2)  four  members  from  those  compacting  states  with at least two

    53  percent of the market based on the premium volume described in paragraph
    54  one of this subsection, other than six compacting states with the  larg-
    55  est  premium  volume,  selected  on  a rotating basis as provided in the
    56  by-laws; and

        A. 6191                             7
 
     1    (3) four members from those  compacting  states  with  less  than  two
     2  percent  of  the  market, based on the premium volume described in para-
     3  graph one of this subsection, with one selected from each  of  the  four
     4  zone regions of the NAIC as provided in the by-laws.
     5    (f)  The  management committee shall have such authority and duties as
     6  may be set forth in the by-laws, including but not limited to:

     7    (1) managing the affairs of the commission in a manner consistent with
     8  the by-laws and purposes of the commission;
     9    (2) establishing and overseeing an  organizational  structure  within,
    10  and  appropriate  procedures  for,  the  commission  to  provide for the
    11  creation of uniform standards and other rules,  receipt  and  review  of
    12  product  filings, administrative and technical support functions, review
    13  of decisions regarding the disapproval of  a  product  filing,  and  the
    14  review  of  elections made by a compacting state to opt out of a uniform
    15  standard; provided that a uniform standard shall not be submitted to the
    16  compacting states for adoption unless  approved  by  two-thirds  of  the
    17  members of the management committee;

    18    (3) overseeing the offices of the commission; and
    19    (4) planning, implementing, and coordinating communications and activ-
    20  ities  with  other  state, federal and local government organizations in
    21  order to advance the goals of the commission.
    22    (g) The commission shall elect annually officers from  the  management
    23  committee,  with each having such authority and duties, as may be speci-
    24  fied in the by-laws.
    25    (h) The management committee may,  subject  to  the  approval  of  the
    26  commission,  appoint  or  retain  an executive director for such period,
    27  upon such terms and conditions and for such compensation as the  commis-
    28  sion  may deem appropriate. The executive director shall serve as secre-

    29  tary to the commission, but shall not be a member of the commission. The
    30  executive director shall hire and supervise such other staff as  may  be
    31  authorized by the commission.
    32    (i)  A  legislative  committee  comprising  state legislators or their
    33  designees shall be established to monitor the operations  of,  and  make
    34  recommendations   to,  the  commission;  provided  that  the  manner  of
    35  selection and term of any legislative committee member shall be  as  set
    36  forth  in  the  by-laws.  Prior to the adoption by the commission of any
    37  uniform standard, revision  to  the  by-laws,  annual  budget  or  other
    38  significant  matter  as  may  be provided in the by-laws, the management
    39  committee shall consult with and report to the legislative committee.

    40    (j) The commission shall establish two  advisory  committees,  one  of
    41  which  shall comprise consumer representatives independent of the insur-
    42  ance industry and the  other  comprising  insurance  industry  represen-
    43  tatives.
    44    (k) The commission may establish additional advisory committees as its
    45  by-laws may provide for the carrying out of its functions.
    46    (l)  The  commission shall maintain its corporate books and records in
    47  accordance with the by-laws.
    48    (m) The members, officers, executive director, employees and represen-
    49  tatives of the commission shall  be  immune  from  suit  and  liability,
    50  either  personally  or  in  their  official  capacity, for any claim for

    51  damage to or loss of property or personal injury or other civil  liabil-
    52  ity  caused  by  or  arising  out of any actual or alleged act, error or
    53  omission that occurred, or that such person had a reasonable  basis  for
    54  believing  occurred within the scope of commission employment, duties or
    55  responsibilities; provided,  that  nothing  in  this  section  shall  be
    56  construed  to protect any such person from suit and/or liability for any

        A. 6191                             8
 
     1  damage, loss, injury or liability caused by the intentional  or  willful
     2  and wanton misconduct of that person.
     3    (n)  The commission shall defend any member, officer, executive direc-

     4  tor, employee or representative of the commission in  any  civil  action
     5  seeking  to  impose  liability arising out of any actual or alleged act,
     6  error or omission that occurred within the scope of  commission  employ-
     7  ment, duties or responsibilities, or that the defendant had a reasonable
     8  basis  for believing occurred within the scope of commission employment,
     9  duties or responsibilities; provided, that nothing in this section shall
    10  be construed to prohibit that person from retaining his or her own coun-
    11  sel; and provided further, that the actual  or  alleged  act,  error  or
    12  omission  did  not  result from that person's intentional or willful and
    13  wanton misconduct.
    14    (o) The commission shall indemnify and hold harmless any member, offi-

    15  cer, executive director, employee or representative  of  the  commission
    16  for  the  amount  of  any  settlement  or judgment obtained against such
    17  persons arising out of any actual or alleged act, error or omission that
    18  occurred within the scope of commission employment, duties or  responsi-
    19  bilities,  or  that  such  person  had  a reasonable basis for believing
    20  occurred within the scope of commission employment, duties or  responsi-
    21  bilities,  provided,  that  the actual or alleged act, error or omission
    22  did not result from the intentional or willful and wanton misconduct  of
    23  any such person.
    24    §  8807. Meetings and acts of the commission. (a) The commission shall
    25  meet and take such actions as are consistent with the provisions of this

    26  compact and the by-laws.
    27    (b) Each member of the commission shall have the right  and  power  to
    28  cast  a  vote  to which that compacting state is entitled and to partic-
    29  ipate in the business and affairs of the commission. A member shall vote
    30  in person or by such other means as provided in the by-laws. The by-laws
    31  may provide for members' participation in meetings by telephone or other
    32  means of communication.
    33    (c) The commission shall meet at least once during each calendar year.
    34  Additional meetings shall be held as set forth in the by-laws.
    35    § 8808. Rules and operating procedures; rule making functions  of  the
    36  commission and opting out of uniform standards. (a) The commission shall

    37  promulgate  reasonable  rules, including uniform standards and operating
    38  procedures, in order to effectively and efficiently achieve the purposes
    39  of the compact. Notwithstanding the foregoing, in the event the  commis-
    40  sion  exercises its rule making authority in a manner that is beyond the
    41  scope of the purposes of this article, or the  powers  granted  in  this
    42  section, then such action by the commission shall be invalid and have no
    43  force and effect.
    44    (b)  Rules  and  operating procedures shall be made pursuant to a rule
    45  making process that conforms to the model state administrative procedure
    46  act of 1981 as amended, as may be appropriate to the operations  of  the
    47  commission. Before the commission adopts a uniform standard, the commis-

    48  sion shall give written notice to the relevant state legislative commit-
    49  tee  in  each  compacting  state responsible for insurance issues of its
    50  intention to adopt such uniform standard. The commission in  adopting  a
    51  uniform  standard shall consider fully all submitted materials and issue
    52  a concise explanation of its decision.
    53    (c) A uniform standard shall become effective ninety  days  after  its
    54  promulgation  by the commission or such later date as the commission may
    55  determine; provided, however, that a compacting state may opt out  of  a
    56  uniform standard as provided in this article. "Opt out" shall be defined

        A. 6191                             9
 

     1  as  any  action by a compacting state to decline to adopt or participate
     2  in a promulgated uniform standard. All other rules and operating  proce-
     3  dures,  and  amendments  thereto,  shall become effective as of the date
     4  specified in each rule, operating procedure or amendment.
     5    (d)  A  compacting  state may opt out of a uniform standard, either by
     6  legislation or regulation duly promulgated by the  insurance  department
     7  under the compacting state's administrative procedure act. If a compact-
     8  ing state elects to opt out of a uniform standard by regulation, it must
     9  give  written  notice  to the commission no later than ten business days
    10  after the later of the uniform standard is promulgated or  at  the  time

    11  the state becomes a compacting state, and find that the uniform standard
    12  does  not  provide  reasonable  protections to the citizens of the state
    13  given the conditions in the state. The commissioner shall make  specific
    14  findings of fact and conclusions of law, based on a preponderance of the
    15  evidence,  detailing  the conditions in the state which warrant a depar-
    16  ture from the uniform standard and determining that the uniform standard
    17  would not reasonably protect the citizens of the state. The commissioner
    18  must consider and balance the following factors and find that the condi-
    19  tions in the state and needs of the citizens of the state outweigh:
    20    (1) the intent of the legislature to participate in, and the  benefits

    21  of,  an  interstate  agreement  to  establish  national uniform consumer
    22  protections for the products subject to this article; and
    23    (2) the presumption that a uniform standard adopted by the  commission
    24  provides reasonable protections to consumers of the relevant product.
    25    Notwithstanding  the foregoing, a compacting state may, at the time of
    26  its enactment of the compact, prospectively opt out of all uniform stan-
    27  dards involving the  long-term  care  insurance  products  by  expressly
    28  providing  for  such  opt  out  in the enacted compact, and such opt out
    29  shall not be treated as a material variance in the offer  or  acceptance
    30  of  any  state  to  participate in the compact. Such an opt out shall be

    31  effective at the time of enactment of  the  compact  by  the  compacting
    32  state  and shall apply to all existing uniform standards involving long-
    33  term care insurance products and those subsequently promulgated.
    34    (e) If a compacting state elects to opt out of a uniform standard, the
    35  uniform standard shall remain applicable in the compacting state  elect-
    36  ing  to  opt out until such time the opt out legislation is enacted into
    37  law or the regulation opting out becomes effective.
    38    (f) Once the opt out of a  uniform  standard  by  a  compacting  state
    39  becomes  effective as provided under the laws of that state, the uniform
    40  standard shall have no further force and effect in that state unless and

    41  until the legislation or regulation implementing the opt out is repealed
    42  or otherwise becomes ineffective under the  laws  of  the  state.  If  a
    43  compacting state opts out of a uniform standard after the uniform stand-
    44  ard  has  been  made effective in that state, the opt out shall have the
    45  same prospective effect as provided under section eight  thousand  eight
    46  hundred fifteen of this article for withdrawals.
    47    (g) If a compacting state has formally initiated the process of opting
    48  out  of  a  uniform standard by regulation, and while the regulatory opt
    49  out is pending, the compacting state may  petition  the  commission,  at
    50  least fifteen days before the effective date of the uniform standard, to

    51  stay  the  effectiveness  of  the  uniform  standard  in that state. The
    52  commission may grant a stay if it determines the regulatory opt  out  is
    53  being  pursued  in  a  reasonable  manner  and  there is a likelihood of
    54  success. If a stay is granted or extended by the commission, the stay or
    55  extension thereof may postpone the effective date by up to ninety  days,
    56  unless  affirmatively  extended  by  the commission; provided however, a

        A. 6191                            10
 
     1  stay may not be permitted to remain in effect for  more  than  one  year
     2  unless  the  compacting state can show extraordinary circumstances which
     3  warrant a continuance of the stay including, but  not  limited  to,  the

     4  existence  of a legal challenge which prevents the compacting state from
     5  opting out. A stay may be terminated by the commission upon notice  that
     6  the rule making process has been terminated.
     7    (h)  Not later than thirty days after a rule or operating procedure is
     8  promulgated, any person may file a petition for judicial review  of  the
     9  rule  or operating procedure; provided, however, that the filing of such
    10  a petition shall not stay or otherwise prevent  the  rule  or  operating
    11  procedure  from becoming effective unless the court finds that the peti-
    12  tioner has a substantial likelihood of success.  The  court  shall  give
    13  deference  to  the  actions of the commission consistent with applicable

    14  law and shall not find the rule or operating procedure to be unlawful if
    15  the rule or operating procedure represents a reasonable exercise of  the
    16  commission's authority.
    17    §  8809.  Commission records and enforcement. (a) The commission shall
    18  promulgate rules  establishing  conditions  and  procedures  for  public
    19  inspection  and  copying of its information and official records, except
    20  such information and records involving the privacy  of  individuals  and
    21  insurers'  trade secrets. The commission may promulgate additional rules
    22  under which it may make available to federal and state agencies, includ-
    23  ing law enforcement agencies, records and information  otherwise  exempt

    24  from  disclosure,  and  may  enter into agreements with such agencies to
    25  receive or exchange information or records subject to nondisclosure  and
    26  confidentiality provisions.
    27    (b) Except as to privileged records, data and information, the laws of
    28  any  compacting  state  pertaining  to  confidentiality or nondisclosure
    29  shall not relieve any compacting  state  commissioner  of  the  duty  to
    30  disclose  any  relevant  records, data or information to the commission;
    31  provided however, that disclosure to the commission shall not be  deemed
    32  to  waive  or  otherwise  affect  any  confidentiality  requirement; and
    33  provided further that, except as otherwise expressly  provided  in  this
    34  article, the commission shall not be subject to the laws of any compact-

    35  ing  state  pertaining to confidentiality and nondisclosure with respect
    36  to records, data and information in its possession. Confidential  infor-
    37  mation  of  the commission shall remain confidential after such informa-
    38  tion is provided to any commissioner.
    39    (c) The commission shall monitor compacting states for compliance with
    40  duly adopted by-laws, rules, including uniform standards, and  operating
    41  procedures.  The  commission  shall  notify such noncomplying compacting
    42  state in writing of its noncompliance with commission by-laws, rules  or
    43  operating  procedures.  If  the  noncomplying  compacting state fails to
    44  remedy such noncompliance within the time specified  in  the  notice  of

    45  noncompliance,  the compacting state shall be deemed to be in default as
    46  set forth in section eight thousand eight hundred fifteen of this  arti-
    47  cle.
    48    (d) The commissioner of any state in which an insurer is authorized to
    49  do  business, or is conducting the business of insurance, shall continue
    50  to exercise his or her authority to oversee the market regulation of the
    51  activities of the insurer in  accordance  with  the  provisions  of  the
    52  state's  law.  The  commissioner's  enforcement  of  compliance with the
    53  compact is governed by the following provisions:
    54    (1) with respect to the commissioner's market regulation of a  product
    55  or  advertisement  that  is approved or certified to the commission, the

    56  content of the product or advertisement shall not constitute a violation

        A. 6191                            11
 
     1  of the provisions, standards or requirements of the compact except  upon
     2  a final order of the commission, issued at the request of a commissioner
     3  after  prior notice to the insurer and an opportunity for hearing before
     4  the commission.
     5    (2)  before  a  commissioner  may bring an action for violation of any
     6  provision, standard or  requirement  of  the  compact  relating  to  the
     7  content of an advertisement not approved or certified to the commission,
     8  the  commission  or  an  authorized commission officer or employee, must
     9  authorize the action. However, authorization pursuant to this  paragraph

    10  does  not  require  notice  to  the  insurer, opportunity for hearing or
    11  disclosure of requests for authorization or records of the  commission's
    12  action on such requests.
    13    §  8810.  Dispute  resolution.  The commission shall attempt, upon the
    14  request of a member, to resolve any disputes or other  issues  that  are
    15  subject to this compact and which may arise between two or more compact-
    16  ing  states, or between compacting states and non-compacting states, and
    17  the commission shall promulgate an  operating  procedure  providing  for
    18  resolution of such disputes.
    19    §  8811.  Product  filing  and  approval. (a) Insurers and third-party
    20  filers seeking to have a product approved by the commission  shall  file

    21  such  product  with,  and pay applicable filing fees to, the commission.
    22  Nothing in this article shall be  construed  to  restrict  or  otherwise
    23  prevent an insurer from filing its product with the insurance department
    24  in any state wherein such insurer is licensed to conduct the business of
    25  insurance,  and  such  filing shall be subject to the laws of the states
    26  where filed.
    27    (b) The commission shall establish appropriate filing and review proc-
    28  esses and procedures pursuant to commission rules and  operating  proce-
    29  dures.  Notwithstanding  any  provision in this section to the contrary,
    30  the commission shall promulgate rules to establish conditions and proce-
    31  dures under which the commission will provide public access  to  product

    32  filing  information.  In  establishing  such rules, the commission shall
    33  consider the interests of the public in having access to  such  informa-
    34  tion,  as  well as protection of personal medical and financial informa-
    35  tion and trade secrets, that may be contained in  a  product  filing  or
    36  supporting information.
    37    (c)  Any  product  approved by the commission may be sold or otherwise
    38  issued in those compacting  states  in  which  the  insurer  is  legally
    39  authorized to do business.
    40    §  8812.  Review  of  commission  decisions regarding filings. (a) Not
    41  later than thirty days after the commission has given notice of a disap-
    42  proved product or advertisement filed with the commission,  the  insurer

    43  or  third party filer whose filing was disapproved may appeal the deter-
    44  mination to a review panel appointed by the commission.  The  commission
    45  shall  promulgate  rules  to  establish  procedures  for appointing such
    46  review panel and provide for notice and hearing. An allegation that  the
    47  commission,  in  disapproving  a product or advertisement filed with the
    48  commission, acted arbitrarily, capriciously or in a manner  that  is  an
    49  abuse  of discretion or otherwise not in accordance with law, is subject
    50  to judicial review in accordance with subsection (e)  of  section  eight
    51  thousand eight hundred four of this article.
    52    (b)  The commission shall have authority to monitor, review and recon-

    53  sider products and advertisement subsequent to their filing or  approval
    54  upon a finding that the product does not meet the relevant uniform stan-
    55  dard.  Where  appropriate,  the  commission  may  withdraw or modify its

        A. 6191                            12
 
     1  approval after proper notice and hearing, subject to the appeal  process
     2  set forth in subsection (a) of this section.
     3    §  8813.  Finance.  (a)  The  commission  shall pay or provide for the
     4  payment of the reasonable expenses of its  establishment  and  organiza-
     5  tion.  To  fund  the  cost of its initial operations, the commission may
     6  accept contributions and other forms of funding from the NAIC,  compact-

     7  ing  states  and other sources. Contributions and other forms of funding
     8  from other sources shall be of such a nature that  the  independence  of
     9  the  commission  concerning  the  performance of its duties shall not be
    10  compromised.
    11    (b) The commission shall collect a filing fee from  each  insurer  and
    12  third party filer filing a product with the commission to cover the cost
    13  of  the  operations  and activities of the commission and its staff in a
    14  total amount sufficient to cover the commission's annual budget.
    15    (c) The commission's budget for a fiscal year shall  not  be  approved
    16  until  it has been subject to notice and comment as set forth in section
    17  eight thousand eight hundred eight of this article.

    18    (d) The commission shall be exempt from all taxation  in  and  by  the
    19  compacting states.
    20    (e)  The  commission  shall  not  pledge  the credit of any compacting
    21  state, except by and  with  the  appropriate  legal  authority  of  that
    22  compacting state.
    23    (f)  The  commission  shall keep complete and accurate accounts of all
    24  its internal receipts, including grants and donations and  disbursements
    25  of  all  funds under its control. The internal financial accounts of the
    26  commission shall be subject to  the  accounting  procedures  established
    27  under  its  by-laws.  The  financial  accounts and reports including the
    28  system of internal controls and procedures of the  commission  shall  be

    29  audited annually by an independent certified public accountant. Upon the
    30  determination of the commission, but no less frequently than every three
    31  years, the review of such independent auditor shall include a management
    32  and  performance  audit  of the commission. The commission shall make an
    33  annual report to the governor and legislature of the compacting  states,
    34  which shall include a report of such independent audit. The commission's
    35  internal  accounts  shall  not be confidential and such materials may be
    36  shared with the commissioner  of  any  compacting  state  upon  request,
    37  provided, however, that any work papers related to any internal or inde-
    38  pendent  audit  and any information regarding the privacy of individuals

    39  and insurers' proprietary information, including  trade  secrets,  shall
    40  remain confidential.
    41    (g)  No  compacting  state shall have any claim to or ownership of any
    42  property held by or vested in the commission or to any commission  funds
    43  held pursuant to the provisions of this compact.
    44    § 8814. Compacting states, effective date and amendment. (a) Any state
    45  is eligible to become a compacting state.
    46    (b)  The  compact  shall become effective and binding upon legislative
    47  enactment of the compact into law by  two  compacting  states;  provided
    48  however,  that  the  commission  shall  become effective for purposes of
    49  adopting uniform standards for reviewing, and giving approval or  disap-

    50  proval  of,  products  filed with the commission that satisfy applicable
    51  uniform standards only after twenty-six states are compacting states or,
    52  alternatively, by states representing greater than forty percent of  the
    53  premium  volume for life insurance, annuity, disability income and long-
    54  term care insurance products, based on records of the NAIC for the prior
    55  year. Thereafter, it shall become effective and binding as to any  other
    56  compacting state upon enactment of the compact into law by that state.

        A. 6191                            13
 
     1    (c)  Amendments  to  the compact may be proposed by the commission for
     2  enactment by the compacting states. No amendment shall become  effective

     3  and  binding  upon  the  commission and the compacting states unless and
     4  until all compacting states enact the amendment into law.
     5    §  8815.  Withdrawal,  default and termination. (a)(1) Once effective,
     6  the compact shall continue in force and remain  binding  upon  each  and
     7  every  compacting  state;  provided that a compacting state may withdraw
     8  from the compact ("withdrawing state") by  enacting  a  statute  specif-
     9  ically repealing the statute which enacted the compact into law.
    10    (2)  The  effective  date  of  withdrawal is the effective date of the
    11  repealing statute.  However, the withdrawal shall not apply to any prod-
    12  uct filings approved or self-certified, or  any  advertisement  of  such

    13  products, on the date the repealing statute becomes effective, except by
    14  mutual  agreement of the commission and the withdrawing state unless the
    15  approval is rescinded by the withdrawing state as provided in  paragraph
    16  five of this subsection.
    17    (3) The commissioner of the withdrawing state shall immediately notify
    18  the management committee in writing upon the introduction of legislation
    19  repealing this compact in the withdrawing state.
    20    (4)  The  commission  shall  notify the other compacting states of the
    21  introduction of such legislation within ten days after  its  receipt  of
    22  notice thereof.
    23    (5)  The  withdrawing state is responsible for all obligations, duties

    24  and liabilities incurred  through  the  effective  date  of  withdrawal,
    25  including  any  obligations,  the performance of which extend beyond the
    26  effective date of withdrawal, except to the extent those obligations may
    27  have been released or relinquished by mutual agreement of the commission
    28  and the withdrawing state. The commission's  approval  of  products  and
    29  advertisement  prior  to the effective date of withdrawal shall continue
    30  to be effective and be given full force and effect  in  the  withdrawing
    31  state,  unless  formally  rescinded by the withdrawing state in the same
    32  manner as provided by the laws of the withdrawing state for the prospec-
    33  tive disapproval of products or advertisement previously approved  under
    34  state law.

    35    (6)  Reinstatement  following withdrawal of any compacting state shall
    36  occur upon the effective date of  the  withdrawing  state's  legislation
    37  reenacting the compact.
    38    (b)  (1) If the commission determines that any compacting state has at
    39  any time defaulted ("defaulting state") in the performance of any of its
    40  obligations or responsibilities under this compact, the by-laws or  duly
    41  promulgated  rules or operating procedures, then, after notice and hear-
    42  ing as set forth in the by-laws, all  rights,  privileges  and  benefits
    43  conferred by the compact on the defaulting state shall be suspended from
    44  the  effective  date  of default as fixed by the commission. The grounds
    45  for default include, but are not limited to,  failure  of  a  compacting

    46  state  to  perform  its  obligations  or responsibilities, and any other
    47  grounds designated in commission rules. The commission shall immediately
    48  notify the defaulting state in writing of the defaulting state's suspen-
    49  sion pending a cure of the default. The commission shall  stipulate  the
    50  conditions  and  the  time period within which the defaulting state must
    51  cure its default. If the defaulting state  fails  to  cure  the  default
    52  within the time period specified by the commission, the defaulting state
    53  shall  be  terminated  from  the  compact and all rights, privileges and
    54  benefits conferred by the compact shall be terminated from the effective
    55  date of termination.

        A. 6191                            14
 

     1    (2) Product approvals by the  commission  or  product  self-certifica-
     2  tions, or any advertisement in connection with such product, that are in
     3  force  on the effective date of termination shall remain in force in the
     4  defaulting state in the same manner as if the defaulting state had with-
     5  drawn voluntarily under this section.
     6    (3)  Reinstatement  following  termination  of  any  compacting  state
     7  requires a reenactment of the compact by that state.
     8    (c)(1) The compact dissolves effective upon the date of the withdrawal
     9  or default of the compacting  state  which  reduces  membership  in  the
    10  compact to one compacting state.
    11    (2)  Upon the dissolution of the compact, the compact becomes null and

    12  void and shall be of no further force or effect, and  the  business  and
    13  affairs  of the commission shall be wound up and any surplus funds shall
    14  be distributed in accordance with the by-laws.
    15    § 8816. Severability and  construction.  (a)  The  provisions  of  the
    16  compact  shall  be  severable;  and  if  any phrase, clause, sentence or
    17  provision is deemed  unenforceable,  the  remaining  provisions  of  the
    18  compact shall be enforceable.
    19    (b)  The  provisions  of  the  compact shall be liberally construed to
    20  effectuate its purposes.
    21    § 8817. Binding effect of compact and other laws. (a) Nothing in  this
    22  section prevents the enforcement of any other law of a compacting state,

    23  except as provided in subsection (b) of this section.
    24    (b)  For  any  product  approved  or  certified to the commission, the
    25  rules, uniform standards and any other requirements  of  the  commission
    26  shall  constitute  the  exclusive  provisions applicable to the content,
    27  approval and certification of such products. For advertisement  that  is
    28  subject  to  the  commission's  authority, any rule, uniform standard or
    29  other requirement of the commission which governs  the  content  of  the
    30  advertisement  shall  constitute  the exclusive provision that a commis-
    31  sioner may apply to the content of  the  advertisement.  Notwithstanding
    32  the  foregoing,  no  action  taken  by  the commission shall abrogate or
    33  restrict:

    34    (1) the access of any person to state courts;
    35    (2) remedies available under state law related to breach of  contract,
    36  tort or other laws not specifically directed to the content of the prod-
    37  uct;
    38    (3) state law relating to the construction of insurance contracts; or
    39    (4)  the authority of the attorney general of the state including, but
    40  not limited to, maintaining any actions or proceedings as authorized  by
    41  law.
    42    (c)  All  insurance  products  filed  with  individual states shall be
    43  subject to the laws of those states.
    44    (d) All lawful actions of the  commission,  including  all  rules  and
    45  operating procedures promulgated by the commission, are binding upon the
    46  compacting states.

    47    (e)  All  agreements  between the commission and the compacting states
    48  are binding in accordance with their terms.
    49    (f) Upon the request of a party to a  conflict  over  the  meaning  or
    50  interpretation  of  commission  actions, and upon a majority vote of the
    51  compacting states, the commission may issue advisory opinions  regarding
    52  the disputed meaning or interpretation.
    53    (g)  In  the event any provision of this article exceeds the constitu-
    54  tional limits imposed on the legislature of any  compacting  state,  the
    55  obligations,  duties,  powers  or jurisdiction sought to be conferred by
    56  that provision upon the commission  shall  be  ineffective  as  to  such

        A. 6191                            15
 

     1  compacting  state,  and such obligations, duties, powers or jurisdiction
     2  shall remain in the compacting state and shall be exercised by the agen-
     3  cy thereof to which such obligations, duties, powers or jurisdiction are
     4  delegated by law in effect at the time the compact becomes effective.
     5    §  3.  This  act  shall take effect upon the enactment into law by two
     6  compacting states of legislation having an identical  effect  with  this
     7  act, but if the compacting states shall have already enacted such legis-
     8  lation, this act shall take effect immediately; provided that the super-
     9  intendent  of  insurance  shall  notify  the  legislative  bill drafting
    10  commission upon the occurrence  of  the  enactment  of  the  legislation
    11  provided for in section two of this act in order that the commission may

    12  maintain an accurate and timely effective data base of the official text
    13  of  the laws of the state of New York in furtherance of effectuating the
    14  provisions of section 44 of the legislative law and section 70-b of  the
    15  public officers law.
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