Join Multi-State Insurance Compact

Section 1. Legislative findings and intent. An interstate compact is an agreement between states that permits states to cooperate on multistate or national issues while retaining state control. There are over two hundred interstate compacts currently in existence and every state belongs to at least fourteen such compacts. The interstate insurance product regulation compact is designed to streamline state product regulation systems to allow insurers to more quickly market certain types of insurance products nationally and to reduce the number of variations of the same product that a company must produce to meet specific product standards. The compact would cover individual and group products for life insurance, annuities, disability income and long-term care insurance. The state of New York seeks to join with other states and establish the interstate insurance product regulation compact and become a member of the interstate insurance product regulation commission.

§ 2. The insurance law is amended by adding a new article 88 to read as follows:

ARTICLE 88

INTERSTATE INSURANCE PRODUCT REGULATION COMPACT

Section 8801. Short title.

8802. Purpose.

8803. Definitions.

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD02625-01-7

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8804. Establishment of the commission and venue.

8805. Powers of the commission.

8806. Organization of the commission.

8807. Meetings and acts of the commission.

8808. Rules and operating procedures; rule making functions of

the commission and opting out of uniform standards.

8809. Commission records and enforcement.

8810. Dispute resolution.

8811. Product filing and approval.

8812. Review of commission decisions regarding filings.

8813. Finance.

8814. Compacting states, effective date and amendment.

8815. Withdrawal, default and termination.

8816. Severability and construction.

8817. Binding effect of compact and other laws.

§ 8801. Short title. This article shall be known and may be cited as the "interstate insurance product regulation compact".

§ 8802. Purpose. The purposes of this compact are, through means of joint and cooperative action among the compacting states:

(a) to promote and protect the interest of consumers of individual and group annuity, life insurance, disability income and long-term care insurance products;

(b) to develop uniform standards for insurance products covered under the compact;

(c) to establish a central clearinghouse to receive and provide prompt review of insurance products covered under the compact and, in certain cases, advertisements related thereto, submitted by insurers authorized to do business in one or more compacting states;

(d) to give appropriate regulatory approval to those product filings and advertisements satisfying the applicable uniform standard;

(e) to improve coordination of regulatory resources and expertise between state insurance departments regarding the setting of uniform standards and review of insurance products covered under the compact;

(f) to create the interstate insurance product regulation commission; and

(g) to perform such other related functions as may be consistent with the state regulation of the business of insurance.

§ 8803. Definitions. As used in this article:

(a) "Advertisement" means any material designed to create public interest in a product, or induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain a policy, as more specifically defined in the rules and operating procedures of the commission.

(b) "By-laws" mean those by-laws established by the commission for its governance or for directing or controlling the commission's actions or conduct.

(c) "Compacting state" means any state which has enacted this compact legislation and which has not withdrawn or been terminated pursuant to section eight thousand eight hundred fifteen of this article.

(d) "Commission" means the "Interstate insurance product regulation commission" established by the compact.

(e) "Commissioner" means the chief insurance regulatory official of a state including, but not limited to commissioner, superintendent, director or administrator.

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(f) "Domiciliary state" means the state in which an insurer is incorporated or organized or, in the case of an alien insurer, its state of entry.

(g) "Insurer" means any entity licensed by a state to issue contracts of insurance for any of the lines of insurance covered by this article.

(h) "Member" means the person, or his or her designee, chosen by a compacting state for service on the commission.

(i) "Non-compacting state" means any state which is not at the time a compacting state.

(j) "Operating procedures" mean procedures promulgated by the commission implementing a rule, uniform standard or a provision of this compact.

(k) "Product" means the form of the contract, policy application, endorsements, certificate forms, evidence of coverage forms and related forms for an individual or group annuity, life insurance, disability income or long-term care insurance product, which an insurer is authorized to issue.

(l) "Rule" means a statement of general or particular applicability and future effect promulgated by the commission, including a uniform standard developed pursuant to section eight thousand eight hundred eight of this article, designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of the commission, which shall have the force and effect of law in the compacting states.

(m) "State" means any state, district or territory of the United States of America.

(n) "Third-party filer" means an entity that submits a product filing to the commission on behalf of an insurer.

(o) "Uniform standard" means a standard adopted by the commission for a product line, pursuant to section eight thousand eight hundred eight of this article 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 such product made available to the public shall not be unfair, inequitable or against public policy as determined by the commission.

§ 8804. Establishment of the commission and venue. (a) The compacting states hereby create and establish a joint public agency known as the "Interstate insurance product regulation commission". Pursuant to section eight thousand eight hundred eight of this article, the commission shall 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, however, that it is not intended for the commission to be the exclusive entity for receipt and review of insurance product filings. Nothing in this section shall prohibit any insurer from filing its product in any state wherein such insurer is licensed to conduct the business of insurance and such filing shall be subject to the laws of the state where filed.

(b) The commission is a body corporate and politic, and an instrumentality of the compacting states.

(c) The commission is a not-for-profit entity, separate and distinct from the individual compacting states.

(d) The commission is solely responsible for its liabilities unless otherwise specifically provided in this compact, except that, in no event shall the obligations of the commission be the debt of the state

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of New York nor shall any revenues or property of the state of New York be liable therefor.

(e) Venue in 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.

§ 8805. Powers of the commission. (a) The commission shall have the following powers:

(1) to promulgate rules, pursuant to section eight thousand eight hundred eight of this article, 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 article;

(2) to exercise its rule making authority and establish reasonable uniform standards for products covered under the compact, and advertisement related thereto, which shall have the force and effect of law and shall be binding in the compacting states, but only for such products filed with the commission; provided, however, that a compacting state shall have the right to opt out of such uniform standard pursuant to section eight thousand eight hundred eight of this article to the extent and in the manner provided in this article, and provided further that any uniform standard established by the commissioner 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' (hereinafter referred to as the "NAIC") Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, respectively, adopted as of 2001. The commission shall consider whether any subsequent amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care Insurance Model Regulation adopted by the NAIC require amending of the uniform standards established by the commission for long-term insurance products;

(3) to receive and review in an expeditious manner products filed with the commission, including rate filings for disability income and longterm care insurance products, and give approval of those products and rate filings that satisfy the applicable uniform standard, where such approval shall have the force and effect of law and be binding on the compacting states to the extent and in the manner provided in the compact;

(4) to receive and review in an expeditious manner advertisement relating to long-term care insurance products for which uniform standards have been adopted by the commission, and give approval of such advertisement that satisfies the applicable uniform standard. For any product covered under this article, 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;

(5) to exercise its rule making authority and designate products and advertisement that may be subject to a self-certification process without the need for prior approval by the commission;

(6) to promulgate operating procedures, pursuant to section eight thousand eight hundred eight of this article, which shall be binding in

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the compacting states to the extent and in the manner provided in the compact;

(7) to bring and prosecute legal proceedings or actions in its name as the commission; provided, that the standing of any state insurance department to sue or be sued under applicable law shall not be affected;

(8) to issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence;

(9) to establish and maintain offices;

(10) to purchase and maintain insurance and bonds;

(11) to borrow, accept or contract for services of personnel, including, but not limited to, employees of a compacting state;

(12) to hire employees, professionals or specialists, and elect or appoint officers, and to fix their compensation, define their duties and give them appropriate authority to carry out the purposes of the compact, and determine their qualifications; and to establish the commission's personnel policies and programs relating to, among other things, conflicts of interest, rates of compensation and qualifications of personnel;

(13) to accept any and all appropriate donations and grants of money, equipment, supplies, materials and services, and to receive, utilize and dispose of the same; provided that at all times the commission shall strive to avoid any appearance of impropriety;

(14) to lease, purchase, accept appropriate gifts or donations of, or otherwise to own, hold, improve or use, any property, real, personal or mixed; provided that at all times the commission shall strive to avoid any appearance of impropriety;

(15) to sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise dispose of any property, real, personal or mixed;

(16) to remit filing fees to compacting states as may be set forth in the by-laws, rules or operating procedures;

(17) to enforce compliance by compacting states with rules, uniform standards, operating procedures and by-laws;