§ 505A.1 — Interstate insurance product regulation compact

Iowa § 505A.1

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 505A: INTERSTATE INSURANCE PRODUCT REGULATION COMPACT

Text

The interstate insurance product regulation compact is hereby entered into and enacted
into law with all jurisdictions legally joining therein, in the form substantially as follows:
1. Article I — Purposes. The purposes of this compact are, through means of joint and
cooperative action among the compacting states:
a. To promote and protect the interest of consumers of individual and group annuity, life
insurance, disability income and long-term care insurance products.
b. To develop uniform standards for insurance products covered under this compact.
c. To establish a central clearinghouse to receive and provide prompt review of insurance
products covered under the compact and, in certain cases, advertisements related thereto,
submitted by insurers authorized to do business in one or more compacting states.
d. To give appropriate regulatory approval to those product filings and advertisements
satisfying the applicable uniform standard.
e. To improve coordination of regulatory resources and expertise between state insurance
departments regarding the setting of uniform standards and review of insurance products
covered under this compact.
f. To create the interstate insurance product regulation commission.
g. To perform these and such other related functions as may be consistent with the state
regulation of the business of insurance.
2. Article II — Definitions. For purposes of this compact, unless the context otherwise
requires:
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” means those bylaws established by the commission for its governance, or for
directing or controlling the commission’s actions or conduct.
c. “Commission” means the interstate insurance product regulation commission
established by this compact.
d. “Commissioner” means the chief insurance regulatory official of a state including, but
not limited to, commissioner, superintendent, director, or administrator.
e. “Compacting state” means any state that has enacted this compact legislation and that
has not withdrawn pursuant to article XIV, paragraph “a”, or been terminated pursuant to
article XIV, paragraph “b”.
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 compact.
h. “Member” means the person chosen by a compacting state as its representative to
the commission, or the person’s designee. The commissioner of insurance shall be the
representative member of the compact for the state of Iowa.
i. “Noncompacting state” means any state which is not at the time a compacting state.
j. “Operating procedures” means 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,
§505A.1, INTERSTATE INSURANCE PRODUCT REGULATION COMPACT 2
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
article VII, 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 article VII, 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.
3. Article III — 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 article IV, the commission
has 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.
b. The commission is a body corporate and politic, and an instrumentality of the
compacting state.
c. The commission is solely responsible for its liabilities except as otherwise specifically
provided in this compact.
d. 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.
4. Article IV — Powers of the commission. The commission shall have the following
powers:
a. To promulgate rules, pursuant to article VII, 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.
b. To exercise its rulemaking authority and establish reasonable uniform standards
for products covered under this 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 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. Toreceiveandreviewinanexpeditiousmannerproductsfiledwiththecommission,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
3 INTERSTATE INSURANCE PRODUCT REGULATION COMPACT, §505A.1
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 article 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.
e. 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.
f. To promulgate operating procedures, pursuant to article VII, which shall be binding in
the compacting states to the extent and in the manner provided in this compact.
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 this 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. Toacceptanyandallappropriatedonationsandgrantsofmoney, 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 such other interested persons as may be designated in the
bylaws.
x. To provide and receive information from, and to cooperate with, law enforcement
agencies.
§505A.1, INTERSTATE INSURANCE PRODUCT REGULATION COMPACT 4
y. To adopt and use a corporate seal.
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.
5. Article V — Organization of the commission.
a. Membership, voting, and bylaws.
(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 the member 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
shall 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
provisionhereintothecontrary,noactionofthecommissionwithrespecttothepromulgation
ofauniformstandardshallbeeffectiveunlesstwo-thirdsofthemembersvoteinfavorthereof.
(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:
(i) For the establishment and meetings of other committees.
(ii) 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 consists of a majority of commission members ensuring reasonable advance
notice of each such meeting, and providing for the right of citizens to attend each such
meeting with enumerated exceptions designed to protect the public’s interest, the privacy of
individuals, and insurers’ proprietary information, including trade secrets. The commission
may meet in camera only after a majority of the entire membership votes to close a meeting
en toto or in part. As soon as practicable, the commission shall make public:
(i) A copy of the vote to close the meeting, revealing the vote of each member, with no
proxy votes allowed.
(ii) 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) Providing a mechanism for winding up the operations of the commission and the
equitabledispositionofanysurplusfundsthatmayexistaftertheterminationofthiscompact
after the payment or reserving of all of its debts and obligations.
(h) Promulgating a code of ethics to address permissible and prohibited activities of
commission members and employees.
(4) The commission shall publish its bylaws in a convenient form and file a copy of the
bylaws, along with any amendments, 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 members shall be
established as follows:
(a) 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
5 INTERSTATE INSURANCE PRODUCT REGULATION COMPACT, §505A.1
insurance products, determined from the records of the national association of insurance
commissioners for the prior year.
(b) Four members from those compacting states with at least two percent of the market
based on the premium volume described in subparagraph division (a), other than the six
compacting states with the largest premium volume, selected on a rotating basis as provided
in the bylaws.
(c) Four members from those compacting states with less than two percent of the market,
based on the premium volume described in subparagraph division (a), with one selected
from each of the four zone regions of the national association of insurance commissioners 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 of the members of the management committee.
(c) Overseeing the offices of the commission.
(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 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, 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 subparagraph shall be construed to protect any such person from suit
§505A.1, INTERSTATE INSURANCE PRODUCT REGULATION COMPACT 6
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 the person’s 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.
(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.
6. Article VI — 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.
7. ArticleVII—Rulesandoperatingprocedures—rulemakingfunctionsofthecommission
and opting out of uniform standards.
a. 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 compact, or the powers granted hereunder, such an action by the commission shall be
invalid and have no force and effect.
b. 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 or committees in each compacting state responsible
for insurance issues of its intention to adopt the uniform standard. The commission, in
adopting a uniform standard, shall consider fully all submitted materials and issue a concise
explanation of its decision.
c. Effective date and opt out of a uniform standard. A uniform standard shall become
effective ninety days after its promulgation by the commission or such later date as the
commission may determine, provided, however, that a compacting state may opt out of a
uniform standard as provided in this article. “Opt out” means 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.
(1) 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
7 INTERSTATE INSURANCE PRODUCT REGULATION COMPACT, §505A.1
administrative procedure act. If a compacting state elects to opt out of a uniform standard
by regulation, it must do all of the following:
(a) Givewrittennoticetothecommissionnolaterthantenbusinessdaysaftertheuniform
standard is promulgated, or at the time the state becomes a compacting state.
(b) Find that the uniform standard does not provide reasonable protections to the citizens
of the state, given the conditions in the state.
(2) 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 both of the following:
(a) The intent of the legislature to participate in, and the benefits of, an interstate
agreement to establish national uniform consumer protections for the products subject to
this compact.
(b) The presumption that a uniform standard adopted by the commission provides
reasonable protections to consumers of the relevant product.
(3) 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.
(1) 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.
(2) 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.
8. Article VIII — 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, and further provided that, except as
otherwise expressly provided in this compact, the commission shall not be subject to the
compacting state’s laws pertaining to confidentiality and nondisclosure with respect to
records, data, and information in its possession. Confidential information of the commission
shall remain confidential after such information is provided to any commissioner.
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
§505A.1, INTERSTATE INSURANCE PRODUCT REGULATION COMPACT 8
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.
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 the commissioner’s
authority to oversee the market regulation of the activities of the insurer in accordance with
the provisions of the state’s law. The commissioner’s enforcement of compliance with the
compact is governed by the following provisions:
(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 this 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 this 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 subparagraph
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.
e. 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 days before the effective
date of the uniform standard, to stay the effectiveness of the uniform standard in that state.
The commission may grant a stay if it determines the regulatory opt out is being pursued in
a reasonable manner and there is a likelihood of success. If a stay is granted or extended by
the commission, the stay or extension thereof may postpone the effective date by up to ninety
days, unless affirmatively extended by the commission, provided a stay may not be permitted
toremainineffectformorethanoneyearunlessthecompactingstatecanshowextraordinary
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.
f. Not later than thirty days after a rule or operating procedure is adopted, 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.
9. Article IX — Dispute resolution. The commission shall attempt, upon the request of
a member, to resolve any disputes or other issues which 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.
10. Article X — 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
compact shall be construed to restrict or otherwise prevent an insurer from filing its product
with the insurance department in any state wherein the insurer is licensed to conduct the
business of insurance, and such filing shall be subject to the laws of the states where filed.
b. Thecommissionshallestablishappropriatefilingandreviewprocessesandprocedures
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
9 INTERSTATE INSURANCE PRODUCT REGULATION COMPACT, §505A.1
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 in which the insurer is legally authorized to do business.
11. Article XI — Review of commission decisions regarding filings.
a. Not later than thirty days after the commission has given notice of a disapproved
product or advertisement filed with the commission, the insurer or third-party filer whose
filing was disapproved may appeal the determination to a review panel appointed by the
commission. The commission shall adopt 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, paragraph “d”.
b. 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
paragraph “a”.
12. Article XII — 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 article VII.
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 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 the individuals and insurers’ proprietary
information, including trade secrets, shall remain confidential.
g. A compacting state shall not 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.
13. Article XIII — Compacting states, effective date, and amendment.
a. Any state is eligible to become a compacting state.
b. This compact shall become effective and binding upon legislative enactment of
this 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
§505A.1, INTERSTATE INSURANCE PRODUCT REGULATION COMPACT 10
disapproval of, products filed with the commission that satisfy applicable uniform standards
only after twenty-six states are compacting states or, alternatively, by states representing
greater than forty percent 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 this compact into law by that
state.
c. Amendments to this compact may be proposed by the commission for enactment by
the compacting states. An amendment shall not become effective and binding upon the
commission and the compacting states unless and until all compacting states enact the
amendment into law.
14. Article XIV — Withdrawal, default, and termination.
a. Withdrawal.
(1) Onceeffective, thiscompactshallcontinueinforceandremainbindinguponeachand
every compacting state, provided that a compacting state may withdraw from this compact
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 subparagraph (5).
(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 days after its receipt of notice.
(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 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 this 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 paragraph “a”.
11 INTERSTATE INSURANCE PRODUCT REGULATION COMPACT, §505A.1
(3) Reinstatement following termination of any compacting state requires a reenactment
of this compact.
c. Dissolution of compact.
(1) This compact dissolves effective upon the date of the withdrawal or default of the
compacting state which reduces membership in this compact to one compacting state.
(2) Upon the dissolution of this compact, this 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.
15. Article XV — 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 this compact shall be
enforceable.
b. The provisions of this compact shall be liberally construed to effectuate its purposes.
16. Article XVI — 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 subparagraph (2).
(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
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, action taken by the commission shall not
abrogate or restrict:
(a) The access of any person to state courts.
(b) Remedies available under state law related to breach of contract, tort, general
consumer protection laws, or general consumer protection regulations that apply to the sale
or advertisement of the product or other laws not specifically directed to the content of the
product.
(c) State law relating to the construction of insurance contracts.
(d) 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
adopted 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.