Minnesota Legislature
Office of the Revisor of Statutes
2006 Minnesota Statutes
This is an historical version of this statute chapter. Also view the most recent published version.
60A.99 INTERSTATE INSURANCE PRODUCT REGULATION COMPACT.
Subdivision 1. Enactment and form. The Interstate Insurance Product Regulation Compact
is enacted into law and entered into with all other states legally joining in it in substantially
the following form:
Compacting States:
1. To promote and protect the interest of consumers of individual and group annuity, life
insurance, disability income and long-term care insurance products;
2. To develop uniform standards for insurance products covered under the Compact;
3. To establish a central clearinghouse to receive and provide prompt review of insurance
products covered under the Compact and, in certain cases, advertisements related thereto,
submitted by insurers authorized to do business in one or more Compacting States;
4. To give appropriate regulatory approval to those product filings and advertisements
satisfying the applicable uniform standard;
5. To improve coordination of regulatory resources and expertise between state insurance
departments regarding the setting of uniform standards and review of insurance products covered
under the Compact;
6. To create the Interstate Insurance Product Regulation Commission; and
7. To perform these and such other related functions as may be consistent with the state
regulation of the business of insurance.
1. "Advertisement" means any material designed to create public interest in a Product, or
induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain a
policy, as more specifically defined in the Rules and Operating Procedures of the Commission.
2. "Bylaws" mean those bylaws established by the Commission for its governance, or for
directing or controlling the Commission's actions or conduct.
3. "Compacting State" means any State which has enacted this Compact legislation and
which has not withdrawn pursuant to Article XIV, Section 1, or been terminated pursuant to
Article XIV, Section 2.
4. "Commission" means the "Interstate Insurance Product Regulation Commission"
established by this Compact.
5. "Commissioner" means the chief insurance regulatory official of a State including, but not
limited to commissioner, superintendent, director or administrator.
6. "Domiciliary State" means the state in which an Insurer is incorporated or organized; or, in
the case of an alien Insurer, its state of entry.
7. "Insurer" means any entity licensed by a State to issue contracts of insurance for any
of the lines of insurance covered by this Act.
8. "Member" means the person chosen by a Compacting State as its representative to the
Commission, or his or her designee.
9. "Noncompacting State" means any State which is not at the time a Compacting State.
10. "Operating Procedures" mean procedures promulgated by the Commission implementing
a Rule, Uniform Standard, or a provision of this Compact.
11. "Product" means the form of a policy or contract, including any application, endorsement,
or related form which is attached to and made a part of the policy or contract, and any evidence of
coverage or certificate, for an individual or group annuity, life insurance, disability income or
long-term care insurance product that an Insurer is authorized to issue.
12. "Rule" means a statement of general or particular applicability and future effect
promulgated by the Commission, including a Uniform Standard developed pursuant to Article VII
of this Compact, designed to implement, interpret, or prescribe law or policy or describing the
organization, procedure, or practice requirements of the Commission, which shall have the force
and effect of law in the Compacting States.
13. "State" means any state, district, or territory of the United States of America.
14. "Third Party Filer" means an entity that submits a Product filing to the Commission on
behalf of an Insurer.
15. "Uniform Standard" means a standard adopted by the Commission for a Product line,
pursuant to Article VII of this Compact, and shall include all of the Product requirements in
aggregate; provided, that each Uniform Standard shall be construed, whether express or implied,
to prohibit the use of any inconsistent, misleading or ambiguous provisions in a Product and
the form of the Product made available to the public shall not be unfair, inequitable or against
public policy as determined by the Commission.
"Interstate Insurance Product Regulation Commission." Pursuant to Article IV, the Commission
will have the power to develop Uniform Standards for Product lines, receive and provide prompt
review of Products filed therewith, and give approval to those Product filings satisfying applicable
Uniform Standards; provided, it is not intended for the Commission to be the exclusive entity for
receipt and review of insurance product filings. Nothing herein shall prohibit any Insurer from
filing its product in any State wherein the Insurer is licensed to conduct the business of insurance;
and any such filing shall be subject to the laws of the State where filed.
2. The Commission is a body corporate and politic, and an instrumentality of the Compacting
States.
3. The Commission is solely responsible for its liabilities except as otherwise specifically
provided in this Compact.
4. Venue is proper and judicial proceedings by or against the Commission shall be brought
solely and exclusively in a Court of competent jurisdiction where the principal office of the
Commission is located.
1. To promulgate Rules, pursuant to Article VII of this Compact, which shall have the force
and effect of law and shall be binding in the Compacting States to the extent and in the manner
provided in this Compact;
2. To exercise its 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, to the extent and in the manner provided in this
Compact, and, provided further, that any Uniform Standard established by the Commission for
long-term care insurance products may provide the same or greater protections for consumers
as, but shall not provide less than, those protections set forth in the National Association of
Insurance Commissioners' Long-Term Care Insurance Model Act and Long-Term Care Insurance
Model Regulation, respectively, adopted as of 2001. The Commission shall consider whether any
subsequent amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care
Insurance Model Regulation adopted by the NAIC require amending of the Uniform Standards
established by the Commission for long-term care insurance products;
3. To receive and review in an expeditious manner Products filed with the Commission, and
rate filings for disability income and long-term care insurance Products, and give approval of
those Products and rate filings that satisfy the applicable Uniform Standard, where such approval
shall have the force and effect of law and be binding on the Compacting States to the extent
and in the manner provided in the Compact;
4. To receive and review in an expeditious manner Advertisement relating to long-term care
insurance products for which Uniform Standards have been adopted by the Commission, and give
approval to all Advertisement that satisfies the applicable Uniform Standard. For any product
covered under this Compact, other than long-term care insurance products, the Commission
shall have the authority to require an insurer to submit all or any part of its Advertisement with
respect to that product for review or approval prior to use, if the Commission determines that
the nature of the product is such that an Advertisement of the product could have the capacity or
tendency to mislead the public. The actions of 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 rulemaking authority and designate Products and Advertisement that may
be subject to a self-certification process without the need for prior approval by the Commission;
6. To promulgate Operating Procedures, pursuant to Article VII of this Compact, which shall
be binding in the Compacting States to the extent and in the manner provided in this compact;
7. To bring and prosecute legal proceedings or actions in its name as the Commission;
provided, that the standing of any state insurance department to sue or be sued under applicable
law shall not be affected;
8. To issue subpoenas requiring the attendance and testimony of witnesses and the production
of evidence;
9. To establish and maintain offices;
10. To purchase and maintain insurance and bonds;
11. To borrow, accept or contract for services of personnel, including, but not limited to,
employees of a Compacting State;
12. To hire employees, professionals or specialists, and elect or appoint officers, and to
fix their compensation, define their duties and give them appropriate authority to carry out the
purposes of the Compact, and determine their qualifications; and to establish the Commission's
personnel policies and programs relating to, among other things, conflicts of interest, rates of
compensation and qualifications of personnel;
13. To accept any and all appropriate donations and grants of money, equipment, supplies,
materials and services, and to receive, utilize and dispose of the same; provided that at all times
the Commission shall strive to avoid any appearance of impropriety;
14. To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, hold,
improve or use, any property, real, personal or mixed; provided that at all times the Commission
shall strive to avoid any appearance of impropriety;
15. To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise dispose of any
property, real, personal or mixed;
16. To remit filing fees to Compacting States as may be set forth in the Bylaws, Rules
or Operating Procedures;
17. To enforce compliance by Compacting States with Rules, Uniform Standards, Operating
Procedures and Bylaws;
18. To provide for dispute resolution among Compacting States;
19. To advise Compacting States on issues relating to Insurers domiciled or doing business in
Noncompacting jurisdictions, consistent with the purposes of this Compact;
20. To provide advice and training to those personnel in state insurance departments
responsible for product review, and to be a resource for state insurance departments;
21. To establish a budget and make expenditures;
22. To borrow money;
23. To appoint committees, including advisory committees comprising Members, state
insurance regulators, state legislators or their representatives, insurance industry and consumer
representatives, and such other interested persons as may be designated in the Bylaws;
24. To provide and receive information from, and to cooperate with law enforcement
agencies;
25. To adopt and use a corporate seal; and
26. To perform such other functions as may be necessary or appropriate to achieve the
purposes of this Compact consistent with the state regulation of the business of insurance.
a. Each Compacting State shall have and be limited to one Member. Each Member shall
be qualified to serve in that capacity pursuant to applicable law of the Compacting State. Any
Member may be removed or suspended from office as provided by the law of the State from
which he or she shall be appointed. Any vacancy occurring in the Commission shall be filled in
accordance with the laws of the Compacting State wherein the vacancy exists. Nothing herein
shall be construed to affect the manner in which a Compacting State determines the election or
appointment and qualification of its own Commissioner.
b. Each Member shall be entitled to one vote and shall have an opportunity to participate in
the governance of the Commission in accordance with the Bylaws. Notwithstanding any provision
herein to the contrary, no action of the Commission with respect to the promulgation of a Uniform
Standard shall be effective unless two-thirds of the Members vote in favor thereof.
c. The Commission shall, by a majority of the Members, prescribe Bylaws to govern its
conduct as may be necessary or appropriate to carry out the purposes, and exercise the powers, of
the Compact, including, but not limited to:
i. Establishing the fiscal year of the Commission;
ii. Providing reasonable procedures for appointing and electing members, as well as holding
meetings, of the Management Committee;
iii. Providing reasonable standards and procedures: (i) for the establishment and meetings
of other committees, and (ii) governing any general or specific delegation of any authority or
function of the Commission;
iv. Providing reasonable procedures for calling and conducting meetings of the Commission
that consist of a majority of Commission members, ensuring reasonable advance notice of each
such meeting and providing for the right of citizens to attend each such meeting with enumerated
exceptions designed to protect the public's interest, the privacy of individuals, and insurers'
proprietary information, including trade secrets. The Commission may meet in camera only
after a majority of the entire membership votes to close a meeting en toto or in part. As soon as
practicable, the Commission must make public (i) a copy of the vote to close the meeting revealing
the vote of each Member with no proxy votes allowed, and (ii) votes taken during such meeting;
v. Establishing the titles, duties and authority and reasonable procedures for the election
of the officers of the Commission;
vi. Providing reasonable standards and procedures for the establishment of the personnel
policies and programs of the Commission. Notwithstanding any civil service or other similar
laws of any Compacting State, the Bylaws shall exclusively govern the personnel policies and
programs of the Commission;
vii. Promulgating a code of ethics to address permissible and prohibited activities of
commission members and employees; and
viii. Providing a mechanism for winding up the operations of the Commission and the
equitable disposition of any surplus funds that may exist after the termination of the Compact
after the payment and/or reserving of all of its debts and obligations.
d. The Commission shall publish its bylaws in a convenient form and file a copy thereof
and a copy of any amendment thereto, with the appropriate agency or officer in each of the
Compacting States.
2. Management Committee, Officers and Personnel
a. A Management Committee comprising no more than 14 members shall be established
as follows:
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 NAIC for the prior year;
ii. Four members from those Compacting States with at least two percent 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
iii. Four members from those Compacting States with less than two percent of the market,
based on the premium volume described above, with one selected from each of the four zone
regions of the NAIC as provided in the Bylaws.
b. The Management Committee shall have such authority and duties as may be set forth
in the Bylaws, including but not limited to:
i. Managing the affairs of the Commission in a manner consistent with the Bylaws and
purposes of the Commission;
ii. Establishing and overseeing an organizational structure within, and appropriate procedures
for, the Commission to provide for the creation of Uniform Standards and other Rules, receipt
and review of product filings, administrative and technical support functions, review of decisions
regarding the disapproval of a product filing, and the review of elections made by a Compacting
State to opt out of a Uniform Standard; provided that a Uniform Standard shall not be submitted
to the Compacting States for adoption unless approved by two-thirds of the members of the
Management Committee;
iii. Overseeing the offices of the Commission; and
iv. Planning, implementing, and coordinating communications and activities with other state,
federal and local government organizations in order to advance the goals of the Commission.
c. The Commission shall elect annually officers from the Management Committee, with each
having such authority and duties, as may be specified in the Bylaws.
d. The Management Committee may, subject to the approval of the Commission, appoint
or retain an executive director for such period, upon such terms and conditions and for such
compensation as the Commission may deem appropriate. The executive director shall serve as
secretary to the Commission, but shall not be a Member of the Commission. The executive
director shall hire and supervise such other staff as may be authorized by the Commission.
3. Legislative and Advisory Committees
a. A legislative committee comprising state legislators or their designees shall be established
to monitor the operations of, and make recommendations to, the Commission, including the
Management Committee; provided that the manner of selection and term of any legislative
committee member shall be as set forth in the Bylaws. Prior to the adoption by the Commission
of any Uniform Standard, revision to the Bylaws, annual budget or other significant matter as
may be provided in the Bylaws, the Management Committee shall consult with and report to
the legislative committee.
b. The Commission shall establish two advisory committees, one of which shall comprise
consumer representatives independent of the insurance industry, and the other comprising
insurance industry representatives.
c. The Commission may establish additional advisory committees as its Bylaws may provide
for the carrying out of its functions.
4. Corporate Records of the Commission
The Commission shall maintain its corporate books and records in accordance with the
Bylaws.
5. Qualified Immunity, Defense, and Indemnification
a. The Members, officers, executive director, employees, and representatives of the
Commission shall be immune from suit and liability, either personally or in their official capacity,
for any claim for damage to or loss of property or personal injury or other civil liability caused
by or arising out of any actual or alleged act, error or omission that occurred, or that the person
against whom the claim is made had a reasonable basis for believing occurred within the scope of
Commission employment, duties or responsibilities; provided, that nothing in this paragraph shall
be construed to protect any such person from suit and/or liability for any damage, loss, injury or
liability caused by the intentional or willful and wanton misconduct of that person.
b. The Commission shall defend any Member, officer, executive director, employee, or
representative of the Commission in any civil action seeking to impose liability arising out of
any actual or alleged act, error, or omission that occurred within the scope of Commission
employment, duties, or responsibilities, or that the person against whom the claim is made had a
reasonable basis for believing occurred within the scope of Commission employment, duties,
or responsibilities; provided, that nothing herein shall be construed to prohibit that person from
retaining his or her own counsel; and provided further, that the actual or alleged act, error, or
omission did not result from that person's intentional or willful and wanton misconduct.
c. The Commission shall indemnify and hold harmless any Member, officer, executive
director, employee, or representative of the Commission for the amount of any settlement or
judgment obtained against that person arising out of any actual or alleged act, error, or omission
that occurred within the scope of Commission employment, duties, or responsibilities, or that
such person had a reasonable basis for believing occurred within the scope of Commission
employment, duties, or responsibilities, provided, that the actual or alleged act, error, or omission
did not result from the intentional or willful and wanton misconduct of that person.
this Compact and the Bylaws.
2. Each Member of the Commission shall have the right and power to cast a vote to which that
Compacting State is entitled and to participate in the business and affairs of the Commission. A
Member shall vote in person or by such other means as provided in the Bylaws. The Bylaws may
provide for Members' participation in meetings by telephone or other means of communication.
3. The Commission shall meet at least once during each calendar year. Additional meeting
shall be held as set forth in the Bylaws.
Uniform Standards, and Operating Procedures in order to effectively and efficiently achieve
the purposes of this Compact. Notwithstanding the foregoing, in the event the Commission
exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this
Act, or the powers granted hereunder, then such an action by the Commission shall be invalid
and have no force and effect.
2. Rulemaking Procedure. Rules and Operating Procedures shall be made pursuant to a
rulemaking process that conforms to the Model State Administrative Procedure Act of 1981 as
amended, as may be appropriate to the operations of the Commission. Before the Commission
adopts a Uniform Standard, the Commission shall give written notice to the relevant state
legislative committee(s) in each Compacting State responsible for insurance issues of its intention
to adopt the Uniform Standard. The Commission in adopting a Uniform Standard shall consider
fully all submitted materials and issue a concise explanation of its decision.
3. Effective Date and Opt Out of a Uniform Standard. A Uniform Standard shall become
effective 90 days after its promulgation by the Commission or such later date as the Commission
may determine; provided, however, that a Compacting State may opt out of a Uniform Standard
as provided in this Article. "Opt out" shall be defined as any action by a Compacting State to
decline to adopt or participate in a promulgated Uniform Standard. All other Rules and Operating
Procedures, and amendments thereto, shall become effective as of the date specified in each
Rule, Operating Procedure, or amendment.
4. Opt Out Procedure. A Compacting State may opt out of a Uniform Standard, either by
legislation or regulation duly promulgated by the Insurance Department under the Compacting
State's Administrative Procedure Act. If a Compacting State elects to opt out of a Uniform
Standard by regulation, it must (a) give written notice to the Commission no later than ten
business days after the Uniform Standard is promulgated, or at the time the State becomes a
Compacting State and (b) find that the Uniform Standard does not provide reasonable protections
to the citizens of the State, given the conditions in the State. The Commissioner shall make
specific findings of fact and conclusions of law, based on a preponderance of the evidence,
detailing the conditions in the State which warrant a departure from the Uniform Standard and
determining that the Uniform Standard would not reasonably protect the citizens of the State. The
Commissioner must consider and balance the following factors and find that the conditions in the
State and needs of the citizens of the State outweigh: (i) the intent of the legislature to participate
in, and the benefits of, an interstate agreement to establish national uniform consumer protections
for the Products subject to this Act; and (ii) the presumption that a Uniform Standard adopted by
the Commission provides reasonable protections to consumers of the relevant Product.
Notwithstanding the foregoing, a Compacting State may, at the time of its enactment of this
Compact, prospectively opt out of all Uniform Standards involving long-term care insurance
products by expressly providing for such opt out in the enacted Compact, and such an opt out
shall not be treated as a material variance in the offer or acceptance of any State to participate in
this Compact. Such an opt out shall be effective at the time of enactment of this Compact by the
Compacting State and shall apply to all existing Uniform Standards involving long-term care
insurance products and those subsequently promulgated.
5. Effect of Opt Out. If a Compacting State elects to opt out of a Uniform Standard, the
Uniform Standard shall remain applicable in the Compacting State electing to opt out until such
time the opt out legislation is enacted into law or the regulation opting out becomes effective.
Once the opt out of a Uniform Standard by a Compacting State becomes effective as
provided under the laws of that State, the Uniform Standard shall have no further force and effect
in that State unless and until the legislation or regulation implementing the opt out is repealed or
otherwise becomes ineffective under the laws of the State. If a Compacting State opts out of a
Uniform Standard after the Uniform Standard has been made effective in that State, the opt out
shall have the same prospective effect as provided under Article XIV for withdrawals.
6. Stay of Uniform Standard. If a Compacting State has formally initiated the process of
opting out of a Uniform Standard by regulation, and while the regulatory opt out is pending,
the Compacting State may petition the Commission, at least 15 days before the effective date
of the Uniform Standard, to stay the effectiveness of the Uniform Standard in that State. The
Commission may grant a stay if it determines the regulatory opt out is being pursued in a
reasonable manner and there is a likelihood of success. If a stay is granted or extended by the
Commission, the stay or extension thereof may postpone the effective date by up to 90 days,
unless affirmatively extended by the Commission; provided, a stay may not be permitted to
remain in effect for more than one year unless the Compacting State can show extraordinary
circumstances which warrant a continuance of the stay, including, but not limited to, the existence
of a legal challenge which prevents the Compacting State from opting out. A stay may be
terminated by the Commission upon notice that the rulemaking process has been terminated.
7. Not later than 30 days after a Rule or Operating Procedure is promulgated, any person
may file a petition for judicial review of the Rule or Operating Procedure; provided, that the
filing of such a petition shall not stay or otherwise prevent the Rule or Operating Procedure
from becoming effective unless the court finds that the petitioner has a substantial likelihood
of success. The court shall give deference to the actions of the Commission consistent with
applicable law and shall not find the Rule or Operating Procedure to be unlawful if the Rule or
Operating Procedure represents a reasonable exercise of the Commission's authority.
inspection and copying of its information and official records, except such information and
records involving the privacy of individuals and insurers' trade secrets. The Commission may
promulgate additional Rules under which it may make available to federal and state agencies,
including law enforcement agencies, records and information otherwise exempt from disclosure,
and may enter into agreements with such agencies to receive or exchange information or records
subject to nondisclosure and confidentiality provisions.
2. Except as to privileged records, data and information, the laws of any Compacting
State pertaining to confidentiality or nondisclosure shall not relieve any Compacting State
Commissioner of the duty to disclose any relevant records, data or information to the Commission;
provided, that disclosure to the Commission shall not be deemed to waive or otherwise affect any
confidentiality requirement; and further provided, that, except as otherwise expressly provided
in this Act, the Commission shall not be subject to the Compacting State's laws pertaining to
confidentiality and nondisclosure with respect to records, data and information in its possession.
Confidential information of the Commission shall remain confidential after such information
is provided to any Commissioner.
3. The Commission shall monitor Compacting States for compliance with duly adopted
Bylaws, Rules, including Uniform Standards, and Operating Procedures. The Commission shall
notify any noncomplying Compacting State in writing of its noncompliance with Commission
Bylaws, Rules or Operating Procedures. If a noncomplying Compacting State fails to remedy its
noncompliance within the time specified in the notice of noncompliance, the Compacting State
shall be deemed to be in default as set forth in Article XIV.
4. The Commissioner of any State in which an Insurer is authorized to do business, or is
conducting the business of insurance, shall continue to exercise his or her authority to oversee
the market regulation of the activities of the Insurer in accordance with the provisions of the
State's law. The Commissioner's enforcement of compliance with the Compact is governed by
the following provisions:
a. With respect to the Commissioner's market regulation of a Product or Advertisement that
is approved or certified to the Commission, the content of the Product or Advertisement shall not
constitute a violation of the provisions, standards or requirements of the Compact except upon a
final order of the Commission, issued at the request of a Commissioner after prior notice to the
Insurer and an opportunity for hearing before the Commission.
b. Before a Commissioner may bring an action for violation of any provision, standard or
requirement of the Compact relating to the content of an Advertisement not approved or certified
to the Commission, the Commission, or an authorized Commission officer or employee, must
authorize the action. However, authorization pursuant to this paragraph does not require notice
to the Insurer, opportunity for hearing or disclosure of requests for authorization or records
of the Commission's action on such requests.
or other issues that are subject to this Compact and which may arise between two or more
Compacting States, or between Compacting States and Noncompacting States, and the
Commission shall promulgate an Operating Procedure providing for resolution of such disputes.
shall file the Product with, and pay applicable filing fees to, the Commission. Nothing in this Act
shall be construed to restrict or otherwise prevent an insurer from filing its Product with the
insurance department in any State wherein the insurer is licensed to conduct the business of
insurance, and such filing shall be subject to the laws of the States where filed.
2. The Commission shall establish appropriate filing and review processes and procedures
pursuant to Commission Rules and Operating Procedures. Notwithstanding any provision herein
to the contrary, the Commission shall promulgate Rules to establish conditions and procedures
under which the Commission will provide public access to Product filing information. In
establishing such Rules, the Commission shall consider the interests of the public in having access
to such information, as well as protection of personal medical and financial information and trade
secrets, that may be contained in a Product filing or supporting information.
3. Any Product approved by the Commission may be sold or otherwise issued in those
Compacting States for which the Insurer is legally authorized to do business.
or Advertisement filed with the Commission, the Insurer or Third Party Filer whose filing was
disapproved may appeal the determination to a review panel appointed by the Commission. The
Commission shall promulgate Rules to establish procedures for appointing such review panels
and provide for notice and hearing. An allegation that the Commission, in disapproving a Product
or Advertisement filed with the Commission, acted arbitrarily, capriciously, or in a manner that is
an abuse of discretion or otherwise not in accordance with the law, is subject to judicial review in
accordance with Article III, Section 4.
2. The Commission shall have authority to monitor, review and reconsider Products and
Advertisement subsequent to their filing or approval upon a finding that the product does not meet
the relevant Uniform Standard. Where appropriate, the Commission may withdraw or modify its
approval after proper notice and hearing, subject to the appeal process in Section 1 above.
establishment and organization. To fund the cost of its initial operations, the Commission may
accept contributions and other forms of funding from the National Association of Insurance
Commissioners, Compacting States, and other sources. Contributions and other forms of funding
from other sources shall be of such a nature that the independence of the Commission concerning
the performance of its duties shall not be compromised.
2. The Commission shall collect a filing fee from each Insurer and Third Party Filer filing a
product with the Commission to cover the cost of the operations and activities of the Commission
and its staff in a total amount sufficient to cover the Commission's annual budget.
3. The Commission's budget for a fiscal year shall not be approved until it has been subject
to notice and comment as set forth in Article VII of this Compact.
4. The Commission shall be exempt from all taxation in and by the Compacting states.
5. The Commission shall not pledge the credit of any Compacting State, except by and with
the appropriate legal authority of that Compacting State.
6. The Commission shall keep complete and accurate accounts of all its internal receipts,
including grants and donations, and disbursements of all funds under its control. The internal
financial accounts of the Commission shall be subject to the accounting procedures established
under its Bylaws. The financial accounts and reports including the system of internal controls
and procedures of the Commission shall be audited annually by an independent certified public
accountant. Upon the determination of the Commission, but no less frequently than every three
years, the review of the independent auditor shall include a management and performance
audit of the Commission. The Commission shall make an Annual Report to the Governor and
legislature of the Compacting States, which shall include a report of the independent audit. The
Commission's internal accounts shall not be confidential and such materials may be shared with
the Commissioner of any Compacting State upon request provided, however, that any work
papers related to any internal or independent audit and any information regarding the privacy of
individuals and insurers' proprietary information, including trade secrets, shall remain confidential.
7. No Compacting State shall have any claim to or ownership of any property held by or
vested in the Commission or to any Commission funds held pursuant to the provisions of this
Compact.
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 26
States are Compacting States or, alternatively, by States representing greater than 40 percent of
the premium volume for life insurance, annuity, disability income and long-term care insurance
products, based on records of the NAIC for the prior year. Thereafter, it shall become effective and
binding as to any other Compacting State upon enactment of the Compact into law by that State.
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.
a. Once effective, the Compact shall continue in force and remain binding upon each and
every Compacting State; provided, that a Compacting State may withdraw from the Compact
("Withdrawing State") by enacting a statute specifically repealing the statute which enacted
the Compact into law.
b. The effective date of withdrawal is the effective date of the repealing statute. However, the
withdrawal shall not apply to any product filings approved or self-certified, or any Advertisement
of such products, on the date the repealing statute becomes effective, except by mutual
agreement of the Commission and the Withdrawing State unless the approval is rescinded by the
Withdrawing State as provided in Paragraph e of this section.
c. The Commissioner of the Withdrawing State shall immediately notify the Management
Committee in writing upon the introduction of legislation repealing this Compact in the
Withdrawing State.
d. The Commission shall notify the other Compacting States of the introduction of such
legislation within ten days after its receipt of notice thereof.
e. The Withdrawing State is responsible for all obligations, duties and liabilities incurred
through the effective date of withdrawal, including any obligations, the performance of which
extend beyond the effective date of withdrawal, except to the extent those obligations may have
been released or relinquished by mutual agreement of the Commission and the Withdrawing
State. The Commission's approval of Products and Advertisement prior to the effective date of
withdrawal shall continue to be effective and be given full force and effect in the Withdrawing
State, unless formally rescinded by the Withdrawing State in the same manner as provided by
the laws of the Withdrawing State for the prospective disapproval of products or advertisement
previously approved under state law.
f. Reinstatement following withdrawal of any Compacting State shall occur upon the
effective date of the Withdrawing State reenacting the Compact.
2. Default
a. If the Commission determines that any Compacting State has at any time defaulted
("Defaulting State") in the performance of any of its obligations or responsibilities under this
Compact, the Bylaws or duly promulgated Rules or Operating Procedures, then, after notice and
hearing as set forth in the Bylaws, all rights, privileges and benefits conferred by this Compact
on the Defaulting State shall be suspended from the effective date of default as fixed by the
Commission. The grounds for default include, but are not limited to, failure of a Compacting State
to perform its obligations or responsibilities, and any other grounds designated in Commission
Rules. The Commission shall immediately notify the Defaulting State in writing of the Defaulting
State's suspension pending a cure of the default. The Commission shall stipulate the conditions
and the time period within which the Defaulting State must cure its default. If the Defaulting State
fails to cure the default within the time period specified by the Commission, the Defaulting State
shall be terminated from the Compact and all rights, privileges and benefits conferred by this
Compact shall be terminated from the effective date of termination.
b. Product approvals by the Commission or product self-certifications, or any Advertisement
in connection with such product, that are in force on the effective date of termination shall remain
in force in the Defaulting State in the same manner as if the Defaulting State had withdrawn
voluntarily pursuant to Section 1 of this article.
c. Reinstatement following termination of any Compacting State requires a reenactment
of the Compact.
3. Dissolution of Compact
a. The Compact dissolves effective upon the date of the withdrawal or default of the
Compacting State which reduces membership in the Compact to one Compacting State.
b. Upon the dissolution of this Compact, the Compact becomes null and void and shall be of
no further force or effect, and the business and affairs of the Commission shall be wound up and
any surplus funds shall be distributed in accordance with the Bylaws.
provision is deemed unenforceable, the remaining provisions of the Compact shall be enforceable.
2. The provisions of this Compact shall be liberally construed to effectuate its purposes.
a. Nothing herein prevents the enforcement of any other law of a Compacting State, except
as provided in Paragraph b of this section.
b. For any Product approved or certified to the Commission, the Rules, Uniform Standards,
and any other requirements of the Commission shall constitute the exclusive provisions applicable
to the content, approval, and certification of such Products. For Advertisement that is subject to
the Commission's authority, any Rule, Uniform Standard, or other requirement of the Commission
which governs the content of the Advertisement shall constitute the exclusive provision that a
Commissioner may apply to the content of the Advertisement. Notwithstanding the foregoing, no
action taken by the Commission shall abrogate or restrict: (i) the access of any person to state
courts; (ii) remedies available under state law related to breach of contract, tort, or other laws not
specifically directed to the content of the Product; (iii) state law relating to the construction of
insurance contracts; or (iv) the authority of the attorney general of the state, including but not
limited to maintaining any actions or proceedings, as authorized by law.
c. All insurance products filed with individual States shall be subject to the laws of those
States.
2. Binding Effect of this Compact
a. All lawful actions of the Commission, including all Rules and Operating Procedures
promulgated by the Commission, are binding upon the Compacting States.
b. All agreements between the Commission and the Compacting States are binding in
accordance with their terms.
c. Upon the request of a party to a conflict over the meaning or interpretation of Commission
actions, and upon a majority vote of the Compacting States, the Commission may issue advisory
opinions regarding the meaning or interpretation in dispute.
d. In the event any provision of this Compact exceeds the constitutional limits imposed on
the legislature of any Compacting State, the obligations, duties, powers or jurisdiction sought to
be conferred by that provision upon the Commission shall be ineffective as to that Compacting
State, and those obligations, duties, powers, or jurisdiction shall remain in the Compacting State
and shall be exercised by the agency thereof to which those obligations, duties, powers, or
jurisdiction are delegated by law in effect at the time this Compact becomes effective.
Subd. 2. Commission representative. The commissioner of commerce is the representative
of this state to the commission.
History: 2006 c 255 s 3
Subdivision 1. Enactment and form. The Interstate Insurance Product Regulation Compact
is enacted into law and entered into with all other states legally joining in it in substantially
the following form:
Article I. Purposes
The purposes of this Compact are, through means of joint and cooperative action among the Compacting States:
1. To promote and protect the interest of consumers of individual and group annuity, life
insurance, disability income and long-term care insurance products;
2. To develop uniform standards for insurance products covered under the Compact;
3. To establish a central clearinghouse to receive and provide prompt review of insurance
products covered under the Compact and, in certain cases, advertisements related thereto,
submitted by insurers authorized to do business in one or more Compacting States;
4. To give appropriate regulatory approval to those product filings and advertisements
satisfying the applicable uniform standard;
5. To improve coordination of regulatory resources and expertise between state insurance
departments regarding the setting of uniform standards and review of insurance products covered
under the Compact;
6. To create the Interstate Insurance Product Regulation Commission; and
7. To perform these and such other related functions as may be consistent with the state
regulation of the business of insurance.
Article II. Definitions
For purposes of this Compact:1. "Advertisement" means any material designed to create public interest in a Product, or
induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain a
policy, as more specifically defined in the Rules and Operating Procedures of the Commission.
2. "Bylaws" mean those bylaws established by the Commission for its governance, or for
directing or controlling the Commission's actions or conduct.
3. "Compacting State" means any State which has enacted this Compact legislation and
which has not withdrawn pursuant to Article XIV, Section 1, or been terminated pursuant to
Article XIV, Section 2.
4. "Commission" means the "Interstate Insurance Product Regulation Commission"
established by this Compact.
5. "Commissioner" means the chief insurance regulatory official of a State including, but not
limited to commissioner, superintendent, director or administrator.
6. "Domiciliary State" means the state in which an Insurer is incorporated or organized; or, in
the case of an alien Insurer, its state of entry.
7. "Insurer" means any entity licensed by a State to issue contracts of insurance for any
of the lines of insurance covered by this Act.
8. "Member" means the person chosen by a Compacting State as its representative to the
Commission, or his or her designee.
9. "Noncompacting State" means any State which is not at the time a Compacting State.
10. "Operating Procedures" mean procedures promulgated by the Commission implementing
a Rule, Uniform Standard, or a provision of this Compact.
11. "Product" means the form of a policy or contract, including any application, endorsement,
or related form which is attached to and made a part of the policy or contract, and any evidence of
coverage or certificate, for an individual or group annuity, life insurance, disability income or
long-term care insurance product that an Insurer is authorized to issue.
12. "Rule" means a statement of general or particular applicability and future effect
promulgated by the Commission, including a Uniform Standard developed pursuant to Article VII
of this Compact, designed to implement, interpret, or prescribe law or policy or describing the
organization, procedure, or practice requirements of the Commission, which shall have the force
and effect of law in the Compacting States.
13. "State" means any state, district, or territory of the United States of America.
14. "Third Party Filer" means an entity that submits a Product filing to the Commission on
behalf of an Insurer.
15. "Uniform Standard" means a standard adopted by the Commission for a Product line,
pursuant to Article VII of this Compact, and shall include all of the Product requirements in
aggregate; provided, that each Uniform Standard shall be construed, whether express or implied,
to prohibit the use of any inconsistent, misleading or ambiguous provisions in a Product and
the form of the Product made available to the public shall not be unfair, inequitable or against
public policy as determined by the Commission.
Article III. Establishment of the Commission and Venue
1. The Compacting States hereby create and establish a joint public agency known as the "Interstate Insurance Product Regulation Commission." Pursuant to Article IV, the Commission
will have the power to develop Uniform Standards for Product lines, receive and provide prompt
review of Products filed therewith, and give approval to those Product filings satisfying applicable
Uniform Standards; provided, it is not intended for the Commission to be the exclusive entity for
receipt and review of insurance product filings. Nothing herein shall prohibit any Insurer from
filing its product in any State wherein the Insurer is licensed to conduct the business of insurance;
and any such filing shall be subject to the laws of the State where filed.
2. The Commission is a body corporate and politic, and an instrumentality of the Compacting
States.
3. The Commission is solely responsible for its liabilities except as otherwise specifically
provided in this Compact.
4. Venue is proper and judicial proceedings by or against the Commission shall be brought
solely and exclusively in a Court of competent jurisdiction where the principal office of the
Commission is located.
Article IV. Powers of the Commission
The Commission shall have the following powers:1. To promulgate Rules, pursuant to Article VII of this Compact, which shall have the force
and effect of law and shall be binding in the Compacting States to the extent and in the manner
provided in this Compact;
2. To exercise its 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, to the extent and in the manner provided in this
Compact, and, provided further, that any Uniform Standard established by the Commission for
long-term care insurance products may provide the same or greater protections for consumers
as, but shall not provide less than, those protections set forth in the National Association of
Insurance Commissioners' Long-Term Care Insurance Model Act and Long-Term Care Insurance
Model Regulation, respectively, adopted as of 2001. The Commission shall consider whether any
subsequent amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care
Insurance Model Regulation adopted by the NAIC require amending of the Uniform Standards
established by the Commission for long-term care insurance products;
3. To receive and review in an expeditious manner Products filed with the Commission, and
rate filings for disability income and long-term care insurance Products, and give approval of
those Products and rate filings that satisfy the applicable Uniform Standard, where such approval
shall have the force and effect of law and be binding on the Compacting States to the extent
and in the manner provided in the Compact;
4. To receive and review in an expeditious manner Advertisement relating to long-term care
insurance products for which Uniform Standards have been adopted by the Commission, and give
approval to all Advertisement that satisfies the applicable Uniform Standard. For any product
covered under this Compact, other than long-term care insurance products, the Commission
shall have the authority to require an insurer to submit all or any part of its Advertisement with
respect to that product for review or approval prior to use, if the Commission determines that
the nature of the product is such that an Advertisement of the product could have the capacity or
tendency to mislead the public. The actions of 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 rulemaking authority and designate Products and Advertisement that may
be subject to a self-certification process without the need for prior approval by the Commission;
6. To promulgate Operating Procedures, pursuant to Article VII of this Compact, which shall
be binding in the Compacting States to the extent and in the manner provided in this compact;
7. To bring and prosecute legal proceedings or actions in its name as the Commission;
provided, that the standing of any state insurance department to sue or be sued under applicable
law shall not be affected;
8. To issue subpoenas requiring the attendance and testimony of witnesses and the production
of evidence;
9. To establish and maintain offices;
10. To purchase and maintain insurance and bonds;
11. To borrow, accept or contract for services of personnel, including, but not limited to,
employees of a Compacting State;
12. To hire employees, professionals or specialists, and elect or appoint officers, and to
fix their compensation, define their duties and give them appropriate authority to carry out the
purposes of the Compact, and determine their qualifications; and to establish the Commission's
personnel policies and programs relating to, among other things, conflicts of interest, rates of
compensation and qualifications of personnel;
13. To accept any and all appropriate donations and grants of money, equipment, supplies,
materials and services, and to receive, utilize and dispose of the same; provided that at all times
the Commission shall strive to avoid any appearance of impropriety;
14. To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, hold,
improve or use, any property, real, personal or mixed; provided that at all times the Commission
shall strive to avoid any appearance of impropriety;
15. To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise dispose of any
property, real, personal or mixed;
16. To remit filing fees to Compacting States as may be set forth in the Bylaws, Rules
or Operating Procedures;
17. To enforce compliance by Compacting States with Rules, Uniform Standards, Operating
Procedures and Bylaws;
18. To provide for dispute resolution among Compacting States;
19. To advise Compacting States on issues relating to Insurers domiciled or doing business in
Noncompacting jurisdictions, consistent with the purposes of this Compact;
20. To provide advice and training to those personnel in state insurance departments
responsible for product review, and to be a resource for state insurance departments;
21. To establish a budget and make expenditures;
22. To borrow money;
23. To appoint committees, including advisory committees comprising Members, state
insurance regulators, state legislators or their representatives, insurance industry and consumer
representatives, and such other interested persons as may be designated in the Bylaws;
24. To provide and receive information from, and to cooperate with law enforcement
agencies;
25. To adopt and use a corporate seal; and
26. To perform such other functions as may be necessary or appropriate to achieve the
purposes of this Compact consistent with the state regulation of the business of insurance.
Article V. Organization of the Commission
1. Membership, Voting and Bylawsa. Each Compacting State shall have and be limited to one Member. Each Member shall
be qualified to serve in that capacity pursuant to applicable law of the Compacting State. Any
Member may be removed or suspended from office as provided by the law of the State from
which he or she shall be appointed. Any vacancy occurring in the Commission shall be filled in
accordance with the laws of the Compacting State wherein the vacancy exists. Nothing herein
shall be construed to affect the manner in which a Compacting State determines the election or
appointment and qualification of its own Commissioner.
b. Each Member shall be entitled to one vote and shall have an opportunity to participate in
the governance of the Commission in accordance with the Bylaws. Notwithstanding any provision
herein to the contrary, no action of the Commission with respect to the promulgation of a Uniform
Standard shall be effective unless two-thirds of the Members vote in favor thereof.
c. The Commission shall, by a majority of the Members, prescribe Bylaws to govern its
conduct as may be necessary or appropriate to carry out the purposes, and exercise the powers, of
the Compact, including, but not limited to:
i. Establishing the fiscal year of the Commission;
ii. Providing reasonable procedures for appointing and electing members, as well as holding
meetings, of the Management Committee;
iii. Providing reasonable standards and procedures: (i) for the establishment and meetings
of other committees, and (ii) governing any general or specific delegation of any authority or
function of the Commission;
iv. Providing reasonable procedures for calling and conducting meetings of the Commission
that consist of a majority of Commission members, ensuring reasonable advance notice of each
such meeting and providing for the right of citizens to attend each such meeting with enumerated
exceptions designed to protect the public's interest, the privacy of individuals, and insurers'
proprietary information, including trade secrets. The Commission may meet in camera only
after a majority of the entire membership votes to close a meeting en toto or in part. As soon as
practicable, the Commission must make public (i) a copy of the vote to close the meeting revealing
the vote of each Member with no proxy votes allowed, and (ii) votes taken during such meeting;
v. Establishing the titles, duties and authority and reasonable procedures for the election
of the officers of the Commission;
vi. Providing reasonable standards and procedures for the establishment of the personnel
policies and programs of the Commission. Notwithstanding any civil service or other similar
laws of any Compacting State, the Bylaws shall exclusively govern the personnel policies and
programs of the Commission;
vii. Promulgating a code of ethics to address permissible and prohibited activities of
commission members and employees; and
viii. Providing a mechanism for winding up the operations of the Commission and the
equitable disposition of any surplus funds that may exist after the termination of the Compact
after the payment and/or reserving of all of its debts and obligations.
d. The Commission shall publish its bylaws in a convenient form and file a copy thereof
and a copy of any amendment thereto, with the appropriate agency or officer in each of the
Compacting States.
2. Management Committee, Officers and Personnel
a. A Management Committee comprising no more than 14 members shall be established
as follows:
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 NAIC for the prior year;
ii. Four members from those Compacting States with at least two percent 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
iii. Four members from those Compacting States with less than two percent of the market,
based on the premium volume described above, with one selected from each of the four zone
regions of the NAIC as provided in the Bylaws.
b. The Management Committee shall have such authority and duties as may be set forth
in the Bylaws, including but not limited to:
i. Managing the affairs of the Commission in a manner consistent with the Bylaws and
purposes of the Commission;
ii. Establishing and overseeing an organizational structure within, and appropriate procedures
for, the Commission to provide for the creation of Uniform Standards and other Rules, receipt
and review of product filings, administrative and technical support functions, review of decisions
regarding the disapproval of a product filing, and the review of elections made by a Compacting
State to opt out of a Uniform Standard; provided that a Uniform Standard shall not be submitted
to the Compacting States for adoption unless approved by two-thirds of the members of the
Management Committee;
iii. Overseeing the offices of the Commission; and
iv. Planning, implementing, and coordinating communications and activities with other state,
federal and local government organizations in order to advance the goals of the Commission.
c. The Commission shall elect annually officers from the Management Committee, with each
having such authority and duties, as may be specified in the Bylaws.
d. The Management Committee may, subject to the approval of the Commission, appoint
or retain an executive director for such period, upon such terms and conditions and for such
compensation as the Commission may deem appropriate. The executive director shall serve as
secretary to the Commission, but shall not be a Member of the Commission. The executive
director shall hire and supervise such other staff as may be authorized by the Commission.
3. Legislative and Advisory Committees
a. A legislative committee comprising state legislators or their designees shall be established
to monitor the operations of, and make recommendations to, the Commission, including the
Management Committee; provided that the manner of selection and term of any legislative
committee member shall be as set forth in the Bylaws. Prior to the adoption by the Commission
of any Uniform Standard, revision to the Bylaws, annual budget or other significant matter as
may be provided in the Bylaws, the Management Committee shall consult with and report to
the legislative committee.
b. The Commission shall establish two advisory committees, one of which shall comprise
consumer representatives independent of the insurance industry, and the other comprising
insurance industry representatives.
c. The Commission may establish additional advisory committees as its Bylaws may provide
for the carrying out of its functions.
4. Corporate Records of the Commission
The Commission shall maintain its corporate books and records in accordance with the
Bylaws.
5. Qualified Immunity, Defense, and Indemnification
a. The Members, officers, executive director, employees, and representatives of the
Commission shall be immune from suit and liability, either personally or in their official capacity,
for any claim for damage to or loss of property or personal injury or other civil liability caused
by or arising out of any actual or alleged act, error or omission that occurred, or that the person
against whom the claim is made had a reasonable basis for believing occurred within the scope of
Commission employment, duties or responsibilities; provided, that nothing in this paragraph shall
be construed to protect any such person from suit and/or liability for any damage, loss, injury or
liability caused by the intentional or willful and wanton misconduct of that person.
b. The Commission shall defend any Member, officer, executive director, employee, or
representative of the Commission in any civil action seeking to impose liability arising out of
any actual or alleged act, error, or omission that occurred within the scope of Commission
employment, duties, or responsibilities, or that the person against whom the claim is made had a
reasonable basis for believing occurred within the scope of Commission employment, duties,
or responsibilities; provided, that nothing herein shall be construed to prohibit that person from
retaining his or her own counsel; and provided further, that the actual or alleged act, error, or
omission did not result from that person's intentional or willful and wanton misconduct.
c. The Commission shall indemnify and hold harmless any Member, officer, executive
director, employee, or representative of the Commission for the amount of any settlement or
judgment obtained against that person arising out of any actual or alleged act, error, or omission
that occurred within the scope of Commission employment, duties, or responsibilities, or that
such person had a reasonable basis for believing occurred within the scope of Commission
employment, duties, or responsibilities, provided, that the actual or alleged act, error, or omission
did not result from the intentional or willful and wanton misconduct of that person.
Article VI. Meetings and Acts of the Commission
1. The Commission shall meet and take such actions as are consistent with the provisions of this Compact and the Bylaws.
2. Each Member of the Commission shall have the right and power to cast a vote to which that
Compacting State is entitled and to participate in the business and affairs of the Commission. A
Member shall vote in person or by such other means as provided in the Bylaws. The Bylaws may
provide for Members' participation in meetings by telephone or other means of communication.
3. The Commission shall meet at least once during each calendar year. Additional meeting
shall be held as set forth in the Bylaws.
Article VII. Rules and Operating Procedures: Rulemaking Functions
of the Commission and Opting Out of Uniform Standards
1. Rulemaking Authority. The Commission shall promulgate reasonable Rules, including Uniform Standards, and Operating Procedures in order to effectively and efficiently achieve
the purposes of this Compact. Notwithstanding the foregoing, in the event the Commission
exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this
Act, or the powers granted hereunder, then such an action by the Commission shall be invalid
and have no force and effect.
2. Rulemaking Procedure. Rules and Operating Procedures shall be made pursuant to a
rulemaking process that conforms to the Model State Administrative Procedure Act of 1981 as
amended, as may be appropriate to the operations of the Commission. Before the Commission
adopts a Uniform Standard, the Commission shall give written notice to the relevant state
legislative committee(s) in each Compacting State responsible for insurance issues of its intention
to adopt the Uniform Standard. The Commission in adopting a Uniform Standard shall consider
fully all submitted materials and issue a concise explanation of its decision.
3. Effective Date and Opt Out of a Uniform Standard. A Uniform Standard shall become
effective 90 days after its promulgation by the Commission or such later date as the Commission
may determine; provided, however, that a Compacting State may opt out of a Uniform Standard
as provided in this Article. "Opt out" shall be defined as any action by a Compacting State to
decline to adopt or participate in a promulgated Uniform Standard. All other Rules and Operating
Procedures, and amendments thereto, shall become effective as of the date specified in each
Rule, Operating Procedure, or amendment.
4. Opt Out Procedure. A Compacting State may opt out of a Uniform Standard, either by
legislation or regulation duly promulgated by the Insurance Department under the Compacting
State's Administrative Procedure Act. If a Compacting State elects to opt out of a Uniform
Standard by regulation, it must (a) give written notice to the Commission no later than ten
business days after the Uniform Standard is promulgated, or at the time the State becomes a
Compacting State and (b) find that the Uniform Standard does not provide reasonable protections
to the citizens of the State, given the conditions in the State. The Commissioner shall make
specific findings of fact and conclusions of law, based on a preponderance of the evidence,
detailing the conditions in the State which warrant a departure from the Uniform Standard and
determining that the Uniform Standard would not reasonably protect the citizens of the State. The
Commissioner must consider and balance the following factors and find that the conditions in the
State and needs of the citizens of the State outweigh: (i) the intent of the legislature to participate
in, and the benefits of, an interstate agreement to establish national uniform consumer protections
for the Products subject to this Act; and (ii) the presumption that a Uniform Standard adopted by
the Commission provides reasonable protections to consumers of the relevant Product.
Notwithstanding the foregoing, a Compacting State may, at the time of its enactment of this
Compact, prospectively opt out of all Uniform Standards involving long-term care insurance
products by expressly providing for such opt out in the enacted Compact, and such an opt out
shall not be treated as a material variance in the offer or acceptance of any State to participate in
this Compact. Such an opt out shall be effective at the time of enactment of this Compact by the
Compacting State and shall apply to all existing Uniform Standards involving long-term care
insurance products and those subsequently promulgated.
5. Effect of Opt Out. If a Compacting State elects to opt out of a Uniform Standard, the
Uniform Standard shall remain applicable in the Compacting State electing to opt out until such
time the opt out legislation is enacted into law or the regulation opting out becomes effective.
Once the opt out of a Uniform Standard by a Compacting State becomes effective as
provided under the laws of that State, the Uniform Standard shall have no further force and effect
in that State unless and until the legislation or regulation implementing the opt out is repealed or
otherwise becomes ineffective under the laws of the State. If a Compacting State opts out of a
Uniform Standard after the Uniform Standard has been made effective in that State, the opt out
shall have the same prospective effect as provided under Article XIV for withdrawals.
6. Stay of Uniform Standard. If a Compacting State has formally initiated the process of
opting out of a Uniform Standard by regulation, and while the regulatory opt out is pending,
the Compacting State may petition the Commission, at least 15 days before the effective date
of the Uniform Standard, to stay the effectiveness of the Uniform Standard in that State. The
Commission may grant a stay if it determines the regulatory opt out is being pursued in a
reasonable manner and there is a likelihood of success. If a stay is granted or extended by the
Commission, the stay or extension thereof may postpone the effective date by up to 90 days,
unless affirmatively extended by the Commission; provided, a stay may not be permitted to
remain in effect for more than one year unless the Compacting State can show extraordinary
circumstances which warrant a continuance of the stay, including, but not limited to, the existence
of a legal challenge which prevents the Compacting State from opting out. A stay may be
terminated by the Commission upon notice that the rulemaking process has been terminated.
7. Not later than 30 days after a Rule or Operating Procedure is promulgated, any person
may file a petition for judicial review of the Rule or Operating Procedure; provided, that the
filing of such a petition shall not stay or otherwise prevent the Rule or Operating Procedure
from becoming effective unless the court finds that the petitioner has a substantial likelihood
of success. The court shall give deference to the actions of the Commission consistent with
applicable law and shall not find the Rule or Operating Procedure to be unlawful if the Rule or
Operating Procedure represents a reasonable exercise of the Commission's authority.
Article VIII. Commission Records and Enforcement
1. The Commission shall promulgate Rules establishing conditions and procedures for public inspection and copying of its information and official records, except such information and
records involving the privacy of individuals and insurers' trade secrets. The Commission may
promulgate additional Rules under which it may make available to federal and state agencies,
including law enforcement agencies, records and information otherwise exempt from disclosure,
and may enter into agreements with such agencies to receive or exchange information or records
subject to nondisclosure and confidentiality provisions.
2. Except as to privileged records, data and information, the laws of any Compacting
State pertaining to confidentiality or nondisclosure shall not relieve any Compacting State
Commissioner of the duty to disclose any relevant records, data or information to the Commission;
provided, that disclosure to the Commission shall not be deemed to waive or otherwise affect any
confidentiality requirement; and further provided, that, except as otherwise expressly provided
in this Act, the Commission shall not be subject to the Compacting State's laws pertaining to
confidentiality and nondisclosure with respect to records, data and information in its possession.
Confidential information of the Commission shall remain confidential after such information
is provided to any Commissioner.
3. The Commission shall monitor Compacting States for compliance with duly adopted
Bylaws, Rules, including Uniform Standards, and Operating Procedures. The Commission shall
notify any noncomplying Compacting State in writing of its noncompliance with Commission
Bylaws, Rules or Operating Procedures. If a noncomplying Compacting State fails to remedy its
noncompliance within the time specified in the notice of noncompliance, the Compacting State
shall be deemed to be in default as set forth in Article XIV.
4. The Commissioner of any State in which an Insurer is authorized to do business, or is
conducting the business of insurance, shall continue to exercise his or her authority to oversee
the market regulation of the activities of the Insurer in accordance with the provisions of the
State's law. The Commissioner's enforcement of compliance with the Compact is governed by
the following provisions:
a. With respect to the Commissioner's market regulation of a Product or Advertisement that
is approved or certified to the Commission, the content of the Product or Advertisement shall not
constitute a violation of the provisions, standards or requirements of the Compact except upon a
final order of the Commission, issued at the request of a Commissioner after prior notice to the
Insurer and an opportunity for hearing before the Commission.
b. Before a Commissioner may bring an action for violation of any provision, standard or
requirement of the Compact relating to the content of an Advertisement not approved or certified
to the Commission, the Commission, or an authorized Commission officer or employee, must
authorize the action. However, authorization pursuant to this paragraph does not require notice
to the Insurer, opportunity for hearing or disclosure of requests for authorization or records
of the Commission's action on such requests.
Article IX. Dispute Resolution
The Commission shall attempt, upon the request of a Member, to resolve any disputes or other issues that are subject to this Compact and which may arise between two or more
Compacting States, or between Compacting States and Noncompacting States, and the
Commission shall promulgate an Operating Procedure providing for resolution of such disputes.
Article X. Product Filing and Approval
1. Insurers and Third Party Filers seeking to have a Product approved by the Commission shall file the Product with, and pay applicable filing fees to, the Commission. Nothing in this Act
shall be construed to restrict or otherwise prevent an insurer from filing its Product with the
insurance department in any State wherein the insurer is licensed to conduct the business of
insurance, and such filing shall be subject to the laws of the States where filed.
2. The Commission shall establish appropriate filing and review processes and procedures
pursuant to Commission Rules and Operating Procedures. Notwithstanding any provision herein
to the contrary, the Commission shall promulgate Rules to establish conditions and procedures
under which the Commission will provide public access to Product filing information. In
establishing such Rules, the Commission shall consider the interests of the public in having access
to such information, as well as protection of personal medical and financial information and trade
secrets, that may be contained in a Product filing or supporting information.
3. Any Product approved by the Commission may be sold or otherwise issued in those
Compacting States for which the Insurer is legally authorized to do business.
Article XI. Review of Commission Decisions Regarding Filings
1. Not later than 30 days after the Commission has given notice of a disapproved Product or Advertisement filed with the Commission, the Insurer or Third Party Filer whose filing was
disapproved may appeal the determination to a review panel appointed by the Commission. The
Commission shall promulgate Rules to establish procedures for appointing such review panels
and provide for notice and hearing. An allegation that the Commission, in disapproving a Product
or Advertisement filed with the Commission, acted arbitrarily, capriciously, or in a manner that is
an abuse of discretion or otherwise not in accordance with the law, is subject to judicial review in
accordance with Article III, Section 4.
2. The Commission shall have authority to monitor, review and reconsider Products and
Advertisement subsequent to their filing or approval upon a finding that the product does not meet
the relevant Uniform Standard. Where appropriate, the Commission may withdraw or modify its
approval after proper notice and hearing, subject to the appeal process in Section 1 above.
Article XII. Finance
1. The Commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations, the Commission may
accept contributions and other forms of funding from the National Association of Insurance
Commissioners, Compacting States, and other sources. Contributions and other forms of funding
from other sources shall be of such a nature that the independence of the Commission concerning
the performance of its duties shall not be compromised.
2. The Commission shall collect a filing fee from each Insurer and Third Party Filer filing a
product with the Commission to cover the cost of the operations and activities of the Commission
and its staff in a total amount sufficient to cover the Commission's annual budget.
3. The Commission's budget for a fiscal year shall not be approved until it has been subject
to notice and comment as set forth in Article VII of this Compact.
4. The Commission shall be exempt from all taxation in and by the Compacting states.
5. The Commission shall not pledge the credit of any Compacting State, except by and with
the appropriate legal authority of that Compacting State.
6. The Commission shall keep complete and accurate accounts of all its internal receipts,
including grants and donations, and disbursements of all funds under its control. The internal
financial accounts of the Commission shall be subject to the accounting procedures established
under its Bylaws. The financial accounts and reports including the system of internal controls
and procedures of the Commission shall be audited annually by an independent certified public
accountant. Upon the determination of the Commission, but no less frequently than every three
years, the review of the independent auditor shall include a management and performance
audit of the Commission. The Commission shall make an Annual Report to the Governor and
legislature of the Compacting States, which shall include a report of the independent audit. The
Commission's internal accounts shall not be confidential and such materials may be shared with
the Commissioner of any Compacting State upon request provided, however, that any work
papers related to any internal or independent audit and any information regarding the privacy of
individuals and insurers' proprietary information, including trade secrets, shall remain confidential.
7. No Compacting State shall have any claim to or ownership of any property held by or
vested in the Commission or to any Commission funds held pursuant to the provisions of this
Compact.
Article XIII. Compacting States, Effective Date and Amendment
1. Any State is eligible to become a Compacting State.2. The Compact shall become effective and binding upon legislative enactment of the
Compact into law by two Compacting States; provided, the Commission shall become effective
for purposes of adopting Uniform Standards for, reviewing, and giving approval or disapproval
of, Products filed with the Commission that satisfy applicable Uniform Standards only after 26
States are Compacting States or, alternatively, by States representing greater than 40 percent of
the premium volume for life insurance, annuity, disability income and long-term care insurance
products, based on records of the NAIC for the prior year. Thereafter, it shall become effective and
binding as to any other Compacting State upon enactment of the Compact into law by that State.
3. Amendments to the Compact may be proposed by the Commission for enactment by the
Compacting States. No amendment shall become effective and binding upon the Commission and
the Compacting States unless and until all Compacting States enact the amendment into law.
Article XIV. Withdrawal, Default and Termination
1. Withdrawala. Once effective, the Compact shall continue in force and remain binding upon each and
every Compacting State; provided, that a Compacting State may withdraw from the Compact
("Withdrawing State") by enacting a statute specifically repealing the statute which enacted
the Compact into law.
b. The effective date of withdrawal is the effective date of the repealing statute. However, the
withdrawal shall not apply to any product filings approved or self-certified, or any Advertisement
of such products, on the date the repealing statute becomes effective, except by mutual
agreement of the Commission and the Withdrawing State unless the approval is rescinded by the
Withdrawing State as provided in Paragraph e of this section.
c. The Commissioner of the Withdrawing State shall immediately notify the Management
Committee in writing upon the introduction of legislation repealing this Compact in the
Withdrawing State.
d. The Commission shall notify the other Compacting States of the introduction of such
legislation within ten days after its receipt of notice thereof.
e. The Withdrawing State is responsible for all obligations, duties and liabilities incurred
through the effective date of withdrawal, including any obligations, the performance of which
extend beyond the effective date of withdrawal, except to the extent those obligations may have
been released or relinquished by mutual agreement of the Commission and the Withdrawing
State. The Commission's approval of Products and Advertisement prior to the effective date of
withdrawal shall continue to be effective and be given full force and effect in the Withdrawing
State, unless formally rescinded by the Withdrawing State in the same manner as provided by
the laws of the Withdrawing State for the prospective disapproval of products or advertisement
previously approved under state law.
f. Reinstatement following withdrawal of any Compacting State shall occur upon the
effective date of the Withdrawing State reenacting the Compact.
2. Default
a. If the Commission determines that any Compacting State has at any time defaulted
("Defaulting State") in the performance of any of its obligations or responsibilities under this
Compact, the Bylaws or duly promulgated Rules or Operating Procedures, then, after notice and
hearing as set forth in the Bylaws, all rights, privileges and benefits conferred by this Compact
on the Defaulting State shall be suspended from the effective date of default as fixed by the
Commission. The grounds for default include, but are not limited to, failure of a Compacting State
to perform its obligations or responsibilities, and any other grounds designated in Commission
Rules. The Commission shall immediately notify the Defaulting State in writing of the Defaulting
State's suspension pending a cure of the default. The Commission shall stipulate the conditions
and the time period within which the Defaulting State must cure its default. If the Defaulting State
fails to cure the default within the time period specified by the Commission, the Defaulting State
shall be terminated from the Compact and all rights, privileges and benefits conferred by this
Compact shall be terminated from the effective date of termination.
b. Product approvals by the Commission or product self-certifications, or any Advertisement
in connection with such product, that are in force on the effective date of termination shall remain
in force in the Defaulting State in the same manner as if the Defaulting State had withdrawn
voluntarily pursuant to Section 1 of this article.
c. Reinstatement following termination of any Compacting State requires a reenactment
of the Compact.
3. Dissolution of Compact
a. The Compact dissolves effective upon the date of the withdrawal or default of the
Compacting State which reduces membership in the Compact to one Compacting State.
b. Upon the dissolution of this Compact, the Compact becomes null and void and shall be of
no further force or effect, and the business and affairs of the Commission shall be wound up and
any surplus funds shall be distributed in accordance with the Bylaws.
Article XV. Severability and Construction
1. The provisions of this Compact shall be severable; and if any phrase, clause, sentence, or provision is deemed unenforceable, the remaining provisions of the Compact shall be enforceable.
2. The provisions of this Compact shall be liberally construed to effectuate its purposes.
Article XVI. Binding Effect of Compact and Other Laws
1. Other Lawsa. Nothing herein prevents the enforcement of any other law of a Compacting State, except
as provided in Paragraph b of this section.
b. For any Product approved or certified to the Commission, the Rules, Uniform Standards,
and any other requirements of the Commission shall constitute the exclusive provisions applicable
to the content, approval, and certification of such Products. For Advertisement that is subject to
the Commission's authority, any Rule, Uniform Standard, or other requirement of the Commission
which governs the content of the Advertisement shall constitute the exclusive provision that a
Commissioner may apply to the content of the Advertisement. Notwithstanding the foregoing, no
action taken by the Commission shall abrogate or restrict: (i) the access of any person to state
courts; (ii) remedies available under state law related to breach of contract, tort, or other laws not
specifically directed to the content of the Product; (iii) state law relating to the construction of
insurance contracts; or (iv) the authority of the attorney general of the state, including but not
limited to maintaining any actions or proceedings, as authorized by law.
c. All insurance products filed with individual States shall be subject to the laws of those
States.
2. Binding Effect of this Compact
a. All lawful actions of the Commission, including all Rules and Operating Procedures
promulgated by the Commission, are binding upon the Compacting States.
b. All agreements between the Commission and the Compacting States are binding in
accordance with their terms.
c. Upon the request of a party to a conflict over the meaning or interpretation of Commission
actions, and upon a majority vote of the Compacting States, the Commission may issue advisory
opinions regarding the meaning or interpretation in dispute.
d. In the event any provision of this Compact exceeds the constitutional limits imposed on
the legislature of any Compacting State, the obligations, duties, powers or jurisdiction sought to
be conferred by that provision upon the Commission shall be ineffective as to that Compacting
State, and those obligations, duties, powers, or jurisdiction shall remain in the Compacting State
and shall be exercised by the agency thereof to which those obligations, duties, powers, or
jurisdiction are delegated by law in effect at the time this Compact becomes effective.
Subd. 2. Commission representative. The commissioner of commerce is the representative
of this state to the commission.
History: 2006 c 255 s 3
Official Publication of the State of Minnesota
Revisor of Statutes