Connecticut 2016 Regular Session

Connecticut House Bill HB05343 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	General Assembly Raised Bill No. 5343
2	2	February Session, 2016 LCO No. 1165
3	3	01165_______INS
4	4	Referred to Committee on INSURANCE AND REAL ESTATE
5	5	Introduced by:
6	6	(INS)
7	7
8	8	General Assembly
9	9
10	10	Raised Bill No. 5343
11	11
12	12	February Session, 2016
13	13
14	14	LCO No. 1165
15	15
16	16	01165_______INS
17	17
18	18	Referred to Committee on INSURANCE AND REAL ESTATE
19	19
20	20	Introduced by:
21	21
22	22	(INS)
23	23
24	24	AN ACT ADOPTING THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS' INTERSTATE INSURANCE PRODUCT REGULATION COMPACT.
25	25
26	26	Be it enacted by the Senate and House of Representatives in General Assembly convened:
27	27
28	28	Section 1. (NEW) (Effective July 1, 2016)
29	29
30	30	Pursuant to terms and conditions of this compact, the state of Connecticut seeks to join with other states and establish the Interstate Insurance Product Regulation Compact, and thus become a member of the Interstate Insurance Product Regulation Commission. The Insurance Commissioner is hereby designated to serve as the representative of this state to the commission.
31	31
32	32	ARTICLE I
33	33
34	34	PURPOSES
35	35
36	36	The purposes of this compact are, through means of joint and cooperative action among the compacting states:
37	37
38	38	1. To promote and protect the interest of consumers of individual and group annuity, life insurance, disability income and long-term care insurance products;
39	39
40	40	2. To develop uniform standards for insurance products covered under the compact;
41	41
42	42	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;
43	43
44	44	4. To give appropriate regulatory approval to those product filings and advertisements satisfying the applicable uniform standard;
45	45
46	46	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;
47	47
48	48	6. To create the Interstate Insurance Product Regulation Commission; and
49	49
50	50	7. To perform these and such other related functions as may be consistent with the state regulation of the business of insurance.
51	51
52	52	ARTICLE II
53	53
54	54	DEFINITIONS
55	55
56	56	For purposes of this compact:
57	57
58	58	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.
59	59
60	60	2. "Bylaws" mean those bylaws established by the commission for its governance, or for directing or controlling the commission's actions or conduct.
61	61
62	62	3. "Compacting state" means any state which has enacted this compact legislation and which has not withdrawn pursuant to Article XIV, section 1 of this compact, or been terminated pursuant to Article XIV, section 2 of this compact.
63	63
64	64	4. "Commission" means the Interstate Insurance Product Regulation Commission established by this compact.
65	65
66	66	5. "Commissioner" means the chief insurance regulatory official of a state including, but not limited to, commissioner, superintendent, director or administrator.
67	67
68	68	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.
69	69
70	70	7. "Insurer" means any entity licensed by a state to issue contracts of insurance for any of the lines of insurance covered by this compact.
71	71
72	72	8. "Member" means the person chosen by a compacting state as its representative to the commission, or the member's designee.
73	73
74	74	9. "Non-compacting state" means any state which is not at the time a compacting state.
75	75
76	76	10. "Operating procedures" mean procedures promulgated by the commission implementing a rule, uniform standard or a provision of this compact.
77	77
78	78	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.
79	79
80	80	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.
81	81
82	82	13. "State" means any state, district or territory of the United States of America.
83	83
84	84	14. "Third-party filer" means an entity that submits a product filing to the commission on behalf of an Insurer.
85	85
86	86	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.
87	87
88	88	ARTICLE III
89	89
90	90	ESTABLISHMENT OF THE COMMISSION AND VENUE
91	91
92	92	1. The compacting states hereby create and establish a joint public agency known as the Interstate Insurance Product Regulation Commission. Pursuant to Article IV of this compact, 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.
93	93
94	94	2. The Interstate Insurance Product Regulation Commission is a body corporate and politic, and an instrumentality of the compacting states.
95	95
96	96	3. The commission is solely responsible for its liabilities except as otherwise specifically provided in this compact.
97	97
98	98	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.
99	99
100	100	ARTICLE IV
101	101
102	102	POWERS OF THE COMMISSION
103	103
104	104	The commission shall have the following powers:
105	105
106	106	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;
107	107
108	108	2. To exercise its rulemaking 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 of this compact, 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 National Association of Insurance Commissioners' Long-Term Care Insurance Model Act or Long-Term Care Insurance Model Regulation adopted by the National Association of Insurance Commissioners require amending of the uniform standards established by the commission for long-term care insurance products;
109	109
110	110	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;
111	111
112	112	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 the 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;
113	113
114	114	5. To exercise its rulemaking authority and designate products and advertisement that may be subject to a self-certification process without the need for prior approval by the commission;
115	115
116	116	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;
117	117
118	118	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;
119	119
120	120	8. To issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence;
121	121
122	122	9. To establish and maintain offices;
123	123
124	124	10. To purchase and maintain insurance and bonds;
125	125
126	126	11. To borrow, accept or contract for services of personnel, including, but not limited to, employees of a compacting state;
127	127
128	128	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;
129	129
130	130	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;
131	131
132	132	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;
133	133
134	134	15. To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise dispose of any property, real, personal or mixed;
135	135
136	136	16. To remit filing fees to compacting states as may be set forth in the bylaws, rules or operating procedures;
137	137
138	138	17. To enforce compliance by compacting states with rules, uniform standards, operating procedures and bylaws;
139	139
140	140	18. To provide for dispute resolution among compacting states;
141	141
142	142	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;
143	143
144	144	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;
145	145
146	146	21. To establish a budget and make expenditures;
147	147
148	148	22. To borrow money;
149	149
150	150	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;
151	151
152	152	24. To provide and receive information from, and to cooperate with law enforcement agencies;
153	153
154	154	25. To adopt and use a corporate seal; and
155	155
156	156	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.
157	157
158	158	ARTICLE V
159	159
160	160	ORGANIZATION OF THE COMMISSION
161	161
162	162	Section 1. Membership, Voting and Bylaws
163	163
164	164	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.
165	165
166	166	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 of the members vote in favor thereof.
167	167
168	168	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:
169	169
170	170	(i) Establishing the fiscal year of the commission;
171	171
172	172	(ii) Providing reasonable procedures for appointing and electing members, as well as holding meetings, of the management committee;
173	173
174	174	(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;
175	175
176	176	(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 in 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;
177	177
178	178	(v) Establishing the titles, duties and authority and reasonable procedures for the election of the officers of the commission;
179	179
180	180	(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;
181	181
182	182	(vii) Promulgating a code of ethics to address permissible and prohibited activities of commission members and employees; and
183	183
184	184	(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.
185	185
186	186	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.
187	187
188	188	Section 2. Management Committee, Officers and Personnel
189	189
190	190	a. A management committee comprising no more than fourteen members shall be established as follows:
191	191
192	192	(i) One member from each of the six compacting states with the largest premium volume for individual and group annuities, life, disability income and long-term care insurance products, determined from the records of the National Association of Insurance Commissioners for the prior year;
193	193
194	194	(ii) Four members from those compacting states with at least two per cent of the market based on the premium volume described above, other than the six compacting states with the largest premium volume, selected on a rotating basis as provided in the bylaws; and
195	195
196	196	(iii) Four members from those compacting states with less than two per cent of the market, based on the premium volume described above, with one selected from each of the four zone regions of the National Association of Insurance Commissioners as provided in the bylaws.
197	197
198	198	b. The management committee shall have such authority and duties as may be set forth in the bylaws, including, but not limited to:
199	199
200	200	(i) Managing the affairs of the commission in a manner consistent with the bylaws and purposes of the commission;
201	201
202	202	(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 of the members of the management committee;
203	203
204	204	(iii) Overseeing the offices of the commission; and
205	205
206	206	(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.
207	207
208	208	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.
209	209
210	210	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.
211	211
212	212	Section 3. Legislative and Advisory Committees
213	213
214	214	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.
215	215
216	216	b. The commission shall establish two advisory committees, one of which shall comprise consumer representatives independent of the insurance industry, and the other comprising insurance industry representatives.
217	217
218	218	c. The commission may establish additional advisory committees as its bylaws may provide for the carrying out of its functions.
219	219
220	220	Section 4. Corporate Records of the Commission
221	221
222	222	The commission shall maintain its corporate books and records in accordance with the bylaws.
223	223
224	224	Section 5. Qualified Immunity, Defense and Indemnification
225	225
226	226	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 wilful and wanton misconduct of that person.
227	227
228	228	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 counsel; and provided further, that the actual or alleged act, error or omission did not result from that person's intentional or wilful and wanton misconduct.
229	229
230	230	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 wilful and wanton misconduct of that person.
231	231
232	232	ARTICLE VI
233	233
234	234	MEETINGS AND ACTS OF THE COMMISSION
235	235
236	236	1. The commission shall meet and take such actions as are consistent with the provisions of this compact and the bylaws.
237	237
238	238	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.
239	239
240	240	3. The commission shall meet at least once during each calendar year. Additional meetings shall be held as set forth in the bylaws.
241	241
242	242	ARTICLE VII
243	243
244	244	RULES AND OPERATING PROCEDURES: RULEMAKING FUNCTIONS OF THE COMMISSION AND OPTING OUT OF UNIFORM STANDARDS
245	245
246	246	1. The commission shall promulgate reasonable rules, including uniform standards, and operating procedures in order to effectively and efficiently achieve the purposes of this compact. Notwithstanding the foregoing, in the event the commission exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this compact, or the powers granted hereunder, then such an action by the commission shall be invalid and have no force and effect.
247	247
248	248	2. Rules and operating procedures shall be made pursuant to a rulemaking process that conforms to the Model State Administrative Procedure Act of 1981 as amended, as may be appropriate to the operations of the commission. Before the commission adopts a uniform standard, the commission shall give written notice to the relevant state legislative committees in each compacting state responsible for insurance issues of its intention to adopt the uniform standard. The commission in adopting a uniform standard shall consider fully all submitted materials and issue a concise explanation of its decision.
249	249
250	250	3. A uniform standard shall become effective ninety days after its promulgation by the commission or such later date as the commission may determine; provided, however, that a compacting state may opt out of a uniform standard as provided in this article. "Opt out" 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.
251	251
252	252	4. 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:
253	253
254	254	a. Give written notice to the commission no later than ten business days after the uniform standard is promulgated, or at the time the state becomes a compacting state; and
255	255
256	256	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 compact; 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.
257	257
258	258	5. 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 of this compact for withdrawals.
259	259
260	260	6. If a compacting state has formally initiated the process of opting out of a uniform standard by regulation, and while the regulatory opt out is pending, the compacting state may petition the commission, at least fifteen days before the effective date of the uniform standard, to stay the effectiveness of the uniform standard in that state. The commission may grant a stay if it determines the regulatory opt out is being pursued in a reasonable manner and there is a likelihood of success. If a stay is granted or extended by the commission, the stay or extension thereof may postpone the effective date by up to ninety days, unless affirmatively extended by the commission; provided, a stay may not be permitted to remain in effect for more than one year unless the compacting state can show extraordinary circumstances which warrant a continuance of the stay, including, but not limited to, the existence of a legal challenge which prevents the compacting state from opting out. A stay may be terminated by the commission upon notice that the rulemaking process has been terminated.
261	261
262	262	7. Not later than thirty 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.
263	263
264	264	ARTICLE VIII
265	265
266	266	COMMISSION RECORDS AND ENFORCEMENT
267	267
268	268	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.
269	269
270	270	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 compact, the commission shall not be subject to the compacting state's laws pertaining to confidentiality and nondisclosure with respect to records, data and information in its possession. Confidential information of the commission shall remain confidential after such information is provided to any commissioner.
271	271
272	272	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 of this compact.
273	273
274	274	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 the commissioner's authority to oversee the market regulation of the activities of the insurer in accordance with the provisions of the state's law. The commissioner's enforcement of compliance with the compact is governed by the following provisions:
275	275
276	276	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.
277	277
278	278	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.
279	279
280	280	ARTICLE IX
281	281
282	282	DISPUTE RESOLUTION
283	283
284	284	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.
285	285
286	286	ARTICLE X
287	287
288	288	PRODUCT FILING AND APPROVAL
289	289
290	290	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 compact shall be construed to restrict or otherwise prevent an insurer from filing its product with the insurance department in any state wherein the insurer is licensed to conduct the business of insurance, and such filing shall be subject to the laws of the states where filed.
291	291
292	292	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.
293	293
294	294	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.
295	295
296	296	ARTICLE XI
297	297
298	298	REVIEW OF COMMISSION DECISIONS REGARDING FILINGS
299	299
300	300	1. Not later than thirty days after the commission has given notice of a disapproved product or advertisement filed with the commission, the insurer or third-party filer whose filing was disapproved may appeal the determination to a review panel appointed by the commission. The commission shall 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 of this compact.
301	301
302	302	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 of this article.
303	303
304	304	ARTICLE XII
305	305
306	306	FINANCE
307	307
308	308	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.
309	309
310	310	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.
311	311
312	312	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.
313	313
314	314	4. The commission shall be exempt from all taxation in and by the compacting states.
315	315
316	316	5. The commission shall not pledge the credit of any compacting state, except by and with the appropriate legal authority of that compacting state.
317	317
318	318	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 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.
319	319
320	320	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.
321	321
322	322	ARTICLE XIII
323	323
324	324	COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT
325	325
326	326	1. Any state is eligible to become a compacting state.
327	327
328	328	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 states are compacting states or, alternatively, by states representing greater than forty per cent of the premium volume for life insurance, annuity, disability income and long-term care insurance products, based on records of the National Association of Insurance Commissioners for the prior year. Thereafter, it shall become effective and binding as to any other compacting state upon enactment of the compact into law by that state.
329	329
330	330	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.
331	331
332	332	ARTICLE XIV
333	333
334	334	WITHDRAWAL, DEFAULT AND TERMINATION
335	335
336	336	Section 1. Withdrawal
337	337
338	338	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.
339	339
340	340	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.
341	341
342	342	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.
343	343
344	344	d. The commission shall notify the other compacting states of the introduction of such legislation within ten days after its receipt of notice thereof.
345	345
346	346	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 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.
347	347
348	348	f. Reinstatement following withdrawal of any compacting state shall occur upon the effective date of the withdrawing state reenacting the compact.
349	349
350	350	Section 2. Default
351	351
352	352	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.
353	353
354	354	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.
355	355
356	356	c. Reinstatement following termination of any compacting state requires a reenactment of the compact.
357	357
358	358	Section 3. Dissolution of Compact
359	359
360	360	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.
361	361
362	362	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.
363	363
364	364	ARTICLE XV
365	365
366	366	SEVERABILITY AND CONSTRUCTION
367	367
368	368	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.
369	369
370	370	2. The provisions of this compact shall be liberally construed to effectuate its purposes.
371	371
372	372	ARTICLE XVI
373	373
374	374	BINDING EFFECT OF COMPACT AND OTHER LAWS
375	375
376	376	Section 1. Other Laws
377	377
378	378	a. Nothing herein prevents the enforcement of any other law of a compacting state, except as provided in paragraph b. of this section.
379	379
380	380	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:
381	381
382	382	(i) The access of any person to state courts;
383	383
384	384	(ii) Remedies available under state law related to breach of contract, tort, or other laws not specifically directed to the content of the product;
385	385
386	386	(iii) State law relating to the construction of insurance contracts; or
387	387
388	388	(iv) The authority of the attorney general of the state, including, but not limited to, maintaining any actions or proceedings, as authorized by law.
389	389
390	390	c. All insurance products filed with individual states shall be subject to the laws of those states.
391	391
392	392	Section 2. Binding Effect of this Compact
393	393
394	394	a. All lawful actions of the commission, including all rules and operating procedures promulgated by the commission, are binding upon the compacting states.
395	395
396	396	b. All agreements between the commission and the compacting states are binding in accordance with their terms.
397	397
398	398	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.
399	399
400	400	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.
401	401
402	402	ARTICLE XVII
403	403
404	404	STATE OF CONNECTICUT OPT OUT
405	405
406	406	In accordance with the provisions of Article VII, section 4 of this compact, the state of Connecticut opts out of all existing and prospective uniform standards involving long-term care insurance products, all existing uniform standards involving disability income insurance products and all existing uniform standards involving life insurance products that conflict with subsection (b) of section 38a-430 of the Connecticut general statutes, in order to preserve the state's statutory requirements governing these insurance products.
407	407
408	408
409	409
410	410
411	411	This act shall take effect as follows and shall amend the following sections:
412	412	Section 1 July 1, 2016 New section
413	413
414	414	This act shall take effect as follows and shall amend the following sections:
415	415
416	416	Section 1
417	417
418	418	July 1, 2016
419	419
420	420	New section
421	421
422	422	Statement of Purpose:
423	423
424	424	To adopt the National Association of Insurance Commissioners' Interstate Insurance Product Regulation Compact.
425	425
426	426	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]