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Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 431
(By Senator Minard)
____________
[Introduced February 4, 2004; referred to the Committee on
Banking and Insurance; and then to the Committee on the
Judiciary.]
____________
A BILL
to amend the code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §33-47-1
, §33-47-2,
§33-47-3, §33
-47-4, §33
-47-5, §33
-47-6, §33
-47-7, §33
-47-8,
§33
-47-9, §33
-47-10, §33
-47-1
1, §33
-47-1
2, §33
-47-1
3,
§33-47-
1
4, §33
-47-1
5 and §33
-47-1
6
, all relating to
the
establishment and operation of an interstate compact for the
review and approval of certain lines of insurance products;
setting forth the purposes for establishing the compact,
protecting the interests of consumers and promoting uniform
standards for insurance products; setting forth definitions;
establishing the interstate insurance product regulation
commission, which has the power to develop uniform standards
for product lines, to receive and approve those product
filings and to be an instrumentality of the compacting states; setting forth the powers of the interstate insurance product
regulation commission to promulgate rules, establish
reasonable uniform standards for product filings, review
products filed with the commission, review advertisement
relating to long-term care insurance, exercise its rule-making
authority, bring legal actions, issue subpoenas, undertake
activities relating to the administration of the commission
and to appoint committees; setting forth provisions relating
to organization of the commission; memberships and voting
rights of states and participation in the governance of the
commission; creation and content of bylaws of the commission;
setting forth provisions relating to meetings and acts of the
commission; establishing rule-making authority of the
commission; exempting rules promulgated by the commission from
the provisions of chapter twenty-nine-a of this code; allowing
states to opt out of rules promulgated by the commission;
setting forth provisions relating to the maintenance and
disclosure of commission records; commission's power to
monitor states' compliance with the compact, but preserving to
states the ability to regulate the market conduct of insurers;
setting forth provisions relating to resolution of disputes
between compacting states and noncompacting states; setting
forth requirements for filing products with the commission;
setting forth appeal rights of insurers following disapproval of filings; setting forth provisions relating to the mechanism
for funding the operations of the commission, including the
collection of filing fees; setting forth the circumstances
under which the compact will become effective and requiring
twenty-six states or states representing forty percent of
premium volume for the effected insurance lines to adopt the
compact before the commission may adopt uniform standards and
approve filings; setting forth the procedures for states to
withdraw from the compact and circumstances under which a
state will be determined to be in default of the compact;
provisions relating to severability; and provisions relating
to the binding effect of the compact.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §33
-47-1
, §33
-47-2,
§33
-47-3, §33
-47-4, §33
-47-5, §33
-47-6, §33
-47-7, §33
-47-8,
§33-47-
9, §33
-47-10, §33
-47-1
1, §33
-47-1
2, §33
-47-1
3, §33
-47-1
4,
§33
-47-1
5 and §33
-47-1
6
,
all to read as follows:
ARTICLE 47. INTERSTATE INSURANCE PRODUCT REGULATION COMPACT.
§33-47-1. Purposes.
(a)
Pursuant to terms and conditions of this article, the
state of West Virginia seeks to join with other states and
establish the Interstate Insurance Product Regulation Compact, and
thus become a member of the Interstate Insurance Product Regulation Commission. The insurance commissioner is hereby designated to
serve as the representative of this state to the commission.
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.
§33-47-2. Definitions.
For purposes of this compact:
(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) "Bylaws" mean those bylaws 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 pursuant to
subsection (a), section fourteen of this article, or been
terminated pursuant to subsection (b), section fourteen of this
article.
(d) "Commission" means the "interstate insurance product
regulation commission" established by this compact.
(e) "Commissioner" means the insurance commissioner of the
state of West Virginia.
(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 chosen by a compacting state as
its representative to the commission, or his or her designee.
(i) "Noncompacting 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 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.
(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 seven 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 seven 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 the product made available to the public shall not be
unfair, inequitable or against public policy as determined by the
commission.
§33-47-3. 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 four of this article, 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, That 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.
(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
except as otherwise specifically provided in this article.
(e) 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.
§33-47-4. Powers of the commission.
The commission shall have the following powers:
(a) To promulgate rules, pursuant to section seven 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;
(b) To exercise its rule-making authority and establish
reasonable uniform standards for products covered under the
compact, and advertisement related thereto, which shall have the
force and effect of law and shall be binding in the compacting
states, but only for those products filed with the commission:
Provided, That a compacting state shall have the right to opt out
of any uniform standard pursuant to section seven of this article, to the extent and in the manner provided in this article:
Provided, however, That any uniform standard established by the
commission for long-term care insurance products may provide the
same or greater protections for consumers as, but shall not provide
less than, those protections set forth in the national association
of insurance commissioners' long-term care insurance model act and
long-term care insurance model regulation, respectively, adopted as
of 2001. The commission shall consider whether any subsequent
amendments to the national association of insurance commissioners'
long-term care insurance model act or long-term care insurance
model regulation adopted by the national association of insurance
commissioners require amending of the uniform standards established
by the commission for long-term care insurance products;
(c) 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;
(d) 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 subsection 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;
(e) 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;
(f) To promulgate operating procedures, pursuant to section
seven of this article, which shall be binding in the compacting
states to the extent and in the manner provided in this article;
(g) 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;
(h) To issue subpoenas requiring the attendance and testimony
of witnesses and the production of evidence;
(i) To establish and maintain offices;
(j) To purchase and maintain insurance and bonds;
(k) To borrow, accept or contract for services of personnel,
including, but not limited to, employees of a compacting state;
(l) 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;
(m) 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;
(n) 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;
(o) To sell, convey, mortgage, pledge, lease, exchange,
abandon or otherwise dispose of any property, real, personal or
mixed;
(p) To remit filing fees to compacting states as may be set
forth in the bylaws, rules or operating procedures;
(q) To enforce compliance by compacting states with rules, uniform standards, operating procedures and bylaws;
(r) To provide for dispute resolution among compacting states;
(s) To advise compacting states on issues relating to insurers
domiciled or doing business in noncompacting jurisdictions,
consistent with the purposes of this compact;
(t) 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;
(u) To establish a budget and make expenditures;
(v) To borrow money;
(w) To appoint committees, including advisory committees
comprising members, state insurance regulators, state legislators
or their representatives, insurance industry and consumer
representatives, and any other interested persons as may be
designated in the bylaws;
(x) To provide and receive information from, and to cooperate
with law-enforcement agencies;
(y) To adopt and use a corporate seal; and
(z) 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.
§33-47-5. Organization of the commission.
(a) Membership, voting and bylaws of the commission shall be
as follows:
(1) 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 is 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 may be
construed to affect the manner in which a compacting state
determines the election or appointment and qualification of its own
commissioner.
(2) 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.
(3) 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:
(A) Establishing the fiscal year of the commission;
(B) Providing reasonable procedures for appointing and
electing members, as well as holding meetings, of the management
committee;
(C) Providing reasonable standards and procedures
for the
establishment and meetings of other committees, and providing
standards and procedures governing any general or specific
delegation of any authority or function of the commission;
(D) 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 a copy of the vote to close the meeting
revealing the vote of each member with no proxy votes allowed, and
the votes taken during such meeting;
(E) Establishing the titles, duties and authority and
reasonable procedures for the election of the officers of the
commission;
(F) 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;
(G) Promulgating a code of ethics to address permissible and
prohibited activities of commission members and employees; and
(H) 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.
(4) 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.
(b) Management committee, officers and personnel.
(1) A Management committee comprising no more than fourteen
(14) members shall be established as follows:
(A) One (1) member from each of the six (6) compacting states
with the largest premium volume for individual and group annuities,
life, disability income and long-term care insurance products,
determined from the records of the NAIC for the prior year;
(B) Four (4) members from those compacting states with at
least two percent (2%) of the market based on the premium volume
described above, other than the six (6) compacting states with the
largest premium volume, selected on a rotating basis as provided in
the bylaws; and
(C) Four (4) members from those compacting states with less
than two percent (2%) of the market, based on the premium volume described above, with one (1) selected from each of the four (4)
zone regions of the NAIC as provided in the bylaws.
(2) The management committee shall have such authority and
duties as may be set forth in the bylaws, including, but not
limited to:
(A) Managing the affairs of the commission in a manner
consistent with the bylaws and purposes of the commission;
(B) Establishing and overseeing an organizational structure
within, and appropriate procedures for, the commission to provide
for the creation of uniform standards and other rules, receipt and
review of product filings, administrative and technical support
functions, review of decisions regarding the disapproval of a
product filing, and the review of elections made by a compacting
state to opt out of a uniform standard: Provided, That a uniform
standard shall not be submitted to the compacting states for
adoption unless approved by two thirds (2/3) of the members of the
management committee;
(C) Overseeing the offices of the commission; and
(D) Planning, implementing, and coordinating communications
and activities with other state, federal and local government
organizations in order to advance the goals of the commission.
(3) The commission shall elect annually officers from the
management committee, with each having such authority and duties,
as may be specified in the bylaws.
(4) 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.
(c) Legislative and advisory committees.
(1) 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.
(2) The commission shall establish two (2) advisory
committees, one of which shall comprise consumer representatives
independent of the insurance industry, and the other comprising
insurance industry representatives.
(3) The commission may establish additional advisory
committees as its bylaws may provide for the carrying out of its functions.
(d) Corporate records of the commission.
The commission shall maintain its corporate books and records
in accordance with the bylaws.
(e) Qualified immunity, defense and indemnification.
(1) 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 subdivision 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.
(2) 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: Provided, however, That the actual or alleged act, error
or omission did not result from that person's intentional or
willful and wanton misconduct.
(3) 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.
§33-47-6.
Meetings and acts of the commission.
(a) The commission shall meet and take such actions as are
consistent with the provisions of this compact and the bylaws.
(b) 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.
(c) The commission shall meet at least once during each
calendar year. Additional meetings shall be held as set forth in
the bylaws.
§33-47-7.
Rules and operating procedures: rule-making functions of
the commission and opting out of uniform standards.
(a) Rule-making 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 rule-making authority in a
manner that is beyond the scope of the purposes of this article, or
the powers granted hereunder, then such an action by the commission
shall be invalid and have no force and effect.
(b) Rule-making procedure. Rules and operating procedures
shall be made pursuant to a rule-making 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.
Notwithstanding any provision of this code to the contrary, the commission is authorized to promulgate rules in the manner set
forth in this section. Rules promulgated by the commission
pursuant to this section are not subject to the provisions of
article three, chapter twenty-nine-a of this code and will become
effective pursuant to the procedures set forth in this section
notwithstanding any other provision of this code to the contrary.
(c) Effective date and opt out of a uniform standard. A
uniform standard shall become effective ninety (90) days after its
promulgation by the commission or such later date as the commission
may determine: Provided, That a compacting state may opt out of a
uniform standard as provided in this section. "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.
(d) Opt out procedure. A compacting state may opt out of a
uniform standard, either by legislation or regulation duly
promulgated by the insurance department under the compacting
state's administrative procedure act. If a compacting state elects
to opt out of a uniform standard by regulation, it must: (a) Give
written notice to the commission no later than ten (10) business
days after the uniform standard is promulgated, or at the time the
state becomes a compacting state; and (b) find that the uniform standard does not provide reasonable protections to the citizens of
the state, given the conditions in the state. The commissioner
shall make specific findings of fact and conclusions of law, based
on a preponderance of the evidence, detailing the conditions in the
state which warrant a departure from the uniform standard and
determining that the uniform standard would not reasonably protect
the citizens of the state. The commissioner must consider and
balance the following factors and find that the conditions in the
state and needs of the citizens of the state outweigh: (i) The
intent of the Legislature to participate in, and the benefits of,
an interstate agreement to establish national uniform consumer
protections for the products subject to this article; 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.
(e) 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 section fourteen of this article for withdrawals.
(f) Stay of uniform standard. If a compacting state has
formally initiated the process of opting out of a uniform standard
by regulation, and while the regulatory opt out is pending, the
compacting state may petition the commission, at least fifteen (15)
days before the effective date of the uniform standard, to stay the
effectiveness of the uniform standard in that state. The
commission may grant a stay if it determines the regulatory opt out
is being pursued in a reasonable manner and there is a likelihood
of success. If a stay is granted or extended by the commission, the stay or extension thereof may postpone the effective date by up
to ninety (90) days, unless affirmatively extended by the
commission: Provided, That a stay may not be permitted to remain
in effect for more than one (1) year unless the compacting state
can show extraordinary circumstances which warrant a continuance of
the stay, including, but not limited to, the existence of a legal
challenge which prevents the compacting state from opting out. A
stay may be terminated by the commission upon notice that the
rule-making process has been terminated.
(g) Not later than thirty (30) days after a rule or operating
procedure is promulgated, any person may file a petition for
judicial review of the rule or operating procedure: Provided, That
the filing of such a petition shall not stay or otherwise prevent
the rule or operating procedure from becoming effective unless the
court finds that the petitioner has a
substantial likelihood of
success. The court shall give deference to the actions of the
commission consistent with applicable law and shall not find the
rule or operating procedure to be unlawful if the rule or operating
procedure represents a reasonable exercise of the commission's
authority.
§33-47-8.
Commission records and enforcement.
(a) 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.
(b) 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: Provided, however, That, except as
otherwise expressly provided in this article, 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.
(c) 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
section fourteen of this article.
(d) 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:
(1) 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.
(2) 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 subdivision 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.
§33-47-9.
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.
§33-47-10.
Product filing and approval.
(a) 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 article
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.
(b) 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.
(c) 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.
§33-47-11.
Review of commission decisions regarding filings.
(a) Not later than thirty (30) days after the commission has
given notice of a disapproved product or advertisement filed with
the commission, the insurer or third party filer whose filing was
disapproved may appeal the determination to a review panel
appointed by the commission. The commission shall promulgate rules
to establish procedures for appointing such review panels and
provide for notice and hearing. An allegation that the commission,
in disapproving a product or advertisement filed with the
commission, acted arbitrarily, capriciously, or in a manner that is
an abuse of discretion or otherwise not in accordance with the law,
is subject to judicial review in accordance with subsection (e),
section three of this article.
(b) The commission shall have authority to monitor, review and
reconsider products and advertisements 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 subsection (a) of this section.
§33-47-12.
Finance.
(a) 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.
(b) 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.
(c) 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 section seven of this article.
(d) The commission shall be exempt from all taxation in and by
the compacting states.
(e) The commission shall not pledge the credit of any
compacting state, except by and with the appropriate legal
authority of that compacting state.
(f) The commission shall keep complete and accurate accounts
of all its internal receipts, including grants and donations, and
disbursements of all funds under its control. The internal
financial accounts of the commission shall be subject to the
accounting procedures established under its bylaws. The financial
accounts and reports including the system of internal controls and
procedures of the commission shall be audited annually by an
independent certified public accountant. Upon the determination of
the commission, but no less frequently than every three (3) years,
the review of the independent auditor shall include a management
and performance audit of the commission. The commission shall make
an annual report to the governor and legislature of the compacting
states, which shall include a report of the independent audit. The
commission's internal accounts shall not be confidential and such
materials may be shared with the commissioner of any compacting
state upon request: Provided, 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.
(g) 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.
§33-47-13.
Compacting states, effective date and amendment.
(a) Any state is eligible to become a compacting state.
(b) The compact shall become effective and binding upon
legislative enactment of the compact into law by two compacting
states: Provided, That the commission shall become effective for
purposes of adopting uniform standards for, reviewing, and giving
approval or disapproval of, products filed with the commission that
satisfy applicable uniform standards only after twenty-six (26)
states are compacting states or, alternatively, by states
representing greater than forty percent (40%) of the premium volume
for life insurance, annuity, disability income and long-term care
insurance products, based on records of the national association of
insurance commissioners for the prior year. Thereafter, it shall
become effective and binding as to any other compacting state upon
enactment of the compact into law by that state.
(c) 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.
§33-47-14.
Withdrawal, default and termination.
(a) Withdrawal.
(1) 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.
(2) 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 subdivision (5) of this
subsection.
(3) 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.
(4) The commission shall notify the other compacting states of
the introduction of such legislation within ten (10) days after its
receipt of notice thereof.
(5) 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.
(6) Reinstatement following withdrawal of any compacting state
shall occur upon the effective date of the withdrawing state
reenacting the compact.
(b) Default.
(1) 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.
(2) 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
subsection (a) of this section.
(3) Reinstatement following termination of any compacting
state requires a reenactment of the compact.
(c) Dissolution of compact.
(1) 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.
(2) 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.
§33-47-15.
Severability and construction.
(a) 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.
(b) The provisions of this compact shall be liberally
construed to effectuate its purposes.
§33-47-16.
Binding effect of compact and other laws.
(a) Other laws.
(1) Nothing herein prevents the enforcement of any other law
of a compacting state, except as provided in subdivision (2) of
this subsection.
(2) 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
advertisements that are subject to the commission's authority, any
rule, uniform standard or other requirement of the commission which
governs the content of the advertisements 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, including the attorney general, 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.
(3) All insurance products filed with individual states shall
be subject to the laws of those states.
(b) Binding effect of this compact.
(1) All lawful actions of the commission, including all rules
and operating procedures promulgated by the commission, are binding
upon the compacting states.
(2) All agreements between the commission and the compacting
states are binding in accordance with their terms.
(3) 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.
(4) 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.
NOTE: The purpose of this bill is to authorize the state of
West Virginia to become a member of the Interstate Insurance
Product Regulation Compact, to designate uniform standards for
filing and approval of certain insurance products, and a central
point of review for those products.
This article is new; therefore, underlining and
strike-throughs have been omitted.