National Association of Registered Agents and Brokers Reform Act of 2013 - Amends the Gramm-Leach-Bliley Act to repeal the contingent conditions under which the National Association of Registered Agents and Brokers (NARAB) shall not be established. Establishes the NARAB without contingent conditions as an independent nonprofit corporation to prescribe, on a multi-state basis, licensing and insurance producer qualification requirements and conditions.
Requires the NARAB, without affecting state regulatory authority, to provide a mechanism for the adoption and multi-state application of requirements and conditions pertaining to: (1) licensing, continuing education, and other qualifications of non-NARAB insurance producers; (2) resident or nonresident insurance producer appointments; (3) supervision and disciplining of such producers; and (4) the setting of licensing fees for insurance producers.
Makes any state-licensed insurance producer eligible to join the NARAB, except during a period of license suspension or revocation. Requires an individual insurance producer to undergo a criminal history record check by the Federal Bureau of Investigation (FBI). Requires the NARAB to submit to the FBI identification information obtained from the insurance producer, upon producer request, as well as a request of its own for the criminal history record check.
Authorizes the NARAB to: (1) establish membership criteria; and (2) deny membership to a state-licensed insurance producer on the basis of the criminal history information obtained, or where the producer has been subject to certain disciplinary action.
Prohibits the NARAB from establishing criteria that unfairly limit the ability of a small insurance producer to become a member of NARAB.
Authorizes the NARAB to establish separate classes of membership and membership criteria, and requires it to do so for business entities.
Authorizes the NARAB to deny membership to any state-licensed insurance producer for failure to meet membership criteria.
States that NARAB membership authorizes an insurance producer to engage in the business of insurance in any state for any lines of insurance specified in the producer's home state license, including claims adjustments and settlement, risk management, and specified insurance-related consulting activities.
Makes NARAB membership equivalent to a nonresident insurance producer license for specified purposes.
Retains state regulatory jurisdiction regarding consumer protection and market conduct.
Directs the NARAB to establish, as a condition of membership, continuing education requirements comparable to those under the licensing laws of a majority of the states.
Requires NARAB to receive and refer any consumer complaints to state insurance regulators.
Requires the NARAB to maintain a toll-free number and, as practicable, other alternative means of communication with consumers, such as an Internet webpage.
Authorizes the NARAB to establish: (1) a central clearinghouse through which NARAB members may disclose their intent to operate in one or more states and pay their licensing fees; and (2) a database for the collection of regulatory information concerning the activities of insurance producers.
Establishes the NARAB board of directors, whose membership shall include state insurance commissioners. Sets forth terms and procedures for appointment of members by the President. Authorizes reappointment to successive terms. Prohibits compensation on account of Board membership.
Declares that NARAB shall not be deemed to be an insurer or insurance producer within the meaning of any state law, rule, regulation, or order regulating or taxing insurers, insurance producers, or other entities engaged in the business of insurance.
Sets forth procedures for presidential oversight of NARAB, including removal of the entire existing Board.
Requires the NARAB to coordinate with the Financial Industry Regulatory Authority (FINRA) in order to ease any administrative burdens that fall on NARAB members subject to FINRA regulation.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1064 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 1064
To reform the National Association of Registered Agents and Brokers,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 12, 2013
Mr. Neugebauer (for himself, Mr. Huizenga of Michigan, Mr. Luetkemeyer,
Mr. Cotton, Mr. Stivers, Mr. Garrett, Mr. Lucas, Mr. Ross, Mr. Renacci,
Mr. Latta, Mr. Marchant, Mrs. Capito, Mrs. Wagner, Mr. Bachus, Mr.
Pittenger, Mr. Griffin of Arkansas, Mr. McHenry, Mrs. Bachmann, Mr.
Posey, Mr. Stutzman, Mr. Barr, Mr. Cramer, Mr. Duffy, Mr. Hultgren, Mr.
Mulvaney, Mr. Braley of Iowa, Mr. Peters of Michigan, Mr. Loebsack, Mr.
Sherman, Mr. Larson of Connecticut, Ms. Moore, Mrs. McCarthy of New
York, Mr. Perlmutter, Mr. Capuano, Mrs. Carolyn B. Maloney of New York,
Ms. Wasserman Schultz, Mr. Schrader, Mr. Matheson, Mr. Lance, Mr.
Kinzinger of Illinois, Mr. Al Green of Texas, and Mr. Gary G. Miller of
California) introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To reform the National Association of Registered Agents and Brokers,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Association of Registered
Agents and Brokers Reform Act of 2013''.
SEC. 2. REESTABLISHMENT OF THE NATIONAL ASSOCIATION OF REGISTERED
AGENTS AND BROKERS.
(a) In General.--Subtitle C of title III of the Gramm-Leach-Bliley
Act (15 U.S.C. 6751 et seq.) is amended to read as follows:
``Subtitle C--National Association of Registered Agents and Brokers
``SEC. 321. NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS.
``(a) Establishment.--There is established the National Association
of Registered Agents and Brokers (hereafter in this subtitle referred
to as the `Association').
``(b) Status.--The Association shall--
``(1) be a nonprofit corporation;
``(2) have succession until dissolved by an Act of
Congress;
``(3) not be an agent or instrumentality of the United
States Government; and
``(4) except as otherwise provided in this subtitle, be
subject to, and have all the powers conferred upon a nonprofit
corporation by the District of Columbia Nonprofit Corporation
Act (D.C. Code, sec. 29-301.01 et seq.).
``(c) Effective Date.--The provisions of this subtitle shall take
effect upon the expiration of the 24-month period beginning on the date
of enactment of the National Association of Registered Agents and
Brokers Reform Act of 2013. Notwithstanding such effective date, such
persons as are required to establish the Association shall take such
actions as are necessary to establish the operations of the Association
by the effective date.
``SEC. 322. PURPOSE.
``The purpose of the Association shall be to provide a mechanism
through which licensing, continuing education, and other nonresident
insurance producer qualification requirements and conditions may be
adopted and applied on a multi-state basis without affecting the laws,
rules, and regulations, and preserving the rights of a State,
pertaining to--
``(1) licensing, continuing education, and other
qualification requirements of producers who are not members of
the Association;
``(2) resident or nonresident producer appointment
requirements;
``(3) supervising and disciplining resident and nonresident
insurance producers;
``(4) establishing licensing fees for resident and
nonresident insurance producers so that there is no loss of
producer licensing revenue to the State; and
``(5) prescribing and enforcing laws and regulations
regulating the conduct of resident and nonresident insurance
producers.
``SEC. 323. MEMBERSHIP.
``(a) Eligibility.--
``(1) In general.--Any insurance producer licensed in its
home State shall, subject to paragraphs (2) and (4), be
eligible to become a member of the Association.
``(2) Ineligibility for suspension or revocation of
license.--Subject to paragraph (3), an insurance producer is
not eligible to become a member of the Association if a State
insurance regulator has suspended or revoked such producer's
insurance license in that State.
``(3) Resumption of eligibility.--Paragraph (2) shall cease
to apply to any insurance producer if--
``(A) the State insurance regulator reissues or
renews the license of such producer in the State in
which the license was suspended or revoked, or
otherwise terminates or vacates the suspension or
revocation; or
``(B) the suspension or revocation expires or is
subsequently overturned by a court of competent
jurisdiction.
``(4) Criminal background record check required.--
``(A) In general.--An insurance producer shall not
be eligible to become a member of the Association
unless the producer has undergone a national criminal
background record check of the producer's Federal
Bureau of Investigation identification record that
complies with regulations prescribed by the Attorney
General under subparagraph (L).
``(B) Criminal background record check requested by
home state.--An insurance producer who is licensed in a
State and who has undergone a national criminal
background record check of its Federal Bureau of
Investigation identification record during the 2-year
period preceding the date of submission of an
application to become a member of the Association, in
compliance with such requirements as a condition for
such licensure, shall be deemed to have undergone a
national criminal background record check for purposes
of subparagraph (A).
``(C) Criminal background record check requested by
association.--
``(i) In general.--The Association shall,
upon request by an insurance producer licensed
in a State, submit identification information
obtained from such producer, and a request for
a national criminal background record check of
such producer, to the Federal Bureau of
Investigation.
``(ii) Bylaws or rules.--The board of
directors of the Association shall prescribe
bylaws or rules for obtaining and utilizing
identification information and criminal history
record information, including the establishment
of reasonable fees required to perform a
criminal background record check and
appropriate safeguards for maintaining
confidentiality and security of the
information.
``(D) Form of request.--A submission under
subparagraph (C)(i) shall include such identification
information as required by the Attorney General
concerning the person about whom the record is
requested and a statement signed by the person
authorizing the Association to obtain the information.
``(E) Provision of information by attorney
general.--Upon receiving a submission under
subparagraph (C)(ii) from the Association, the Attorney
General shall search all records of the Criminal
Justice Information Services Division of the Federal
Bureau of Investigation that the Attorney General deems
appropriate for criminal history records corresponding
to the identification information provided under
subparagraph (D) and provide all information contained
in such records that pertains to the request to the
Association.
``(F) Limitation on permissible uses of
information.--The Association may use information
provided under subparagraph (E) only--
``(i) for purposes of determining
compliance with membership criteria established
by the Association; and/or
``(ii) to disclose to State insurance
regulators, or Federal or State law enforcement
agencies, in conformance with applicable law.
``(G) Applicant access to criminal history
records.--Notwithstanding subparagraph (F), a producer
shall have the right to obtain from the Association a
copy of any criminal history record information
concerning the producer that is provided to the
Association under subparagraph (E).
``(H) Penalty for improper use or disclosure.--
Whoever knowingly uses any information provided under
subparagraph (E) for a purpose not authorized in
subparagraph (F), or discloses any such information to
anyone not authorized to receive it, shall be fined
under title 18, United States Code, imprisoned for not
more than 2 years, or both.
``(I) Reliance on information.--Neither the
Association nor any of its directors, officers, or
employees shall be liable in any action for using
information provided under subparagraph (E) as
permitted under subparagraph (F) in good faith and in
reasonable reliance on its accuracy.
``(J) Fees.--The Attorney General may charge a
reasonable fee to defray the expense of conducting the
search and providing the information under subparagraph
(E), and any such fee shall be collected and remitted
by the Association.
``(K) Rule of construction.--Nothing in this
paragraph shall be construed as--
``(i) requiring a State insurance regulator
to perform criminal background checks under
this section; or
``(ii) limiting any other authority that
allows access to criminal background records.
``(L) Regulations.--The Attorney General shall
prescribe regulations to carry out this paragraph,
which shall include--
``(i) appropriate protections for ensuring
the confidentiality of information provided
under subparagraph (E); and
``(ii) procedures providing a reasonable
opportunity for a producer to contest the
accuracy of information regarding the producer
provided under subparagraph (E).
``(M) Ineligibility for membership.--
``(i) In general.--The Association may,
under reasonably consistently applied
standards, deny membership to an insurance
producer on the basis of criminal history
information provided under subparagraph (E), or
where the insurance producer has been subject
to disciplinary action, as described in
paragraph (2).
``(ii) Rights of applicants denied
membership.--The Association shall notify any
producer who is denied membership on the basis
of criminal history record information provided
under subparagraph (E) of the right of the
producer to--
``(I) obtain a copy of all criminal
history record information provided to
the Association under subparagraph (E)
with respect to the producer; and
``(II) challenge the accuracy and
completeness of the information.
``(b) Authority To Establish Membership Criteria.--The Association
may establish membership criteria that bear a reasonable relationship
to the purposes for which the Association was established.
``(c) Establishment of Classes and Categories of Membership.--
``(1) Classes of membership.--The Association may establish
separate classes of membership, with separate criteria, if the
Association reasonably determines that performance of different
duties requires different levels of education, training,
experience, or other qualifications.
``(2) Business entities.--The Association shall establish a
class of membership and membership criteria for business
entities. A business entity that applies for membership shall
be required to designate an individual Association member
responsible for the business entity's compliance with
Association rules and the insurance laws, rules, and
regulations of any State in which the business entity seeks to
do business on the basis of Association membership.
``(3) Categories.--
``(A) Separate categories for producers
permitted.--The Association may establish separate
categories of membership for producers and for other
persons within each class, based on the types of
licensing categories that exist under State laws.
``(B) Separate treatment for depository
institutions prohibited.--No special categories of
membership, and no distinct membership criteria, shall
be established for members which are depository
institutions or for employees, agents, or affiliates of
depository institutions.
``(d) Membership Criteria.--
``(1) In general.--The Association may establish criteria
for membership which shall include standards for personal
qualifications, education, training, and experience. The
Association shall not establish criteria that unfairly limit
the ability of a small insurance producer to become a member of
the Association, including imposing discriminatory membership
fees.
``(2) Qualifications.--In establishing criteria under
paragraph (1), the Association shall not adopt any
qualification less protective to the public than that contained
in the NAIC Producer Licensing Model Act in effect as of the
date of enactment of the National Association of Registered
Agents and Brokers Reform Act of 2013, and shall consider the
highest levels of insurance producer qualifications established
under the licensing laws of the States.
``(3) Assistance from states.--
``(A) In general.--The Association may request a
State to provide assistance in investigating and
evaluating a prospective member's eligibility for
membership in the Association.
``(B) Rule of construction.--Subparagraph (A) shall
not be construed as requiring or authorizing any State
to adopt new or additional requirements concerning the
licensing or evaluation of insurance producers.
``(4) Denial of membership.--The Association may, based on
reasonably consistently applied standards, deny membership to
any State-licensed insurance producer for failure to meet the
membership criteria established by the Association.
``(e) Effect of Membership.--
``(1) Authority of association members.--Membership in the
Association shall--
``(A) authorize an insurance producer to sell,
solicit, or negotiate insurance in any State for which
the member pays the licensing fee set by such State for
any line or lines of insurance specified in such
producer's home State license, and exercise all such
incidental powers, as shall be necessary to carry out
such activities, including claims adjustments and
settlement to the extent permissible under such State's
laws, risk management, employee benefits advice,
retirement planning, and any other insurance-related
consulting activities;
``(B) be the equivalent of a nonresident insurance
producer license for purposes of authorizing the
producer to engage in the activities described in
subparagraph (A) in any State where the member pays the
licensing fee; and
``(C) be the equivalent of a nonresident insurance
producer license for the purpose of subjecting an
insurance producer to all laws, regulations, provisions
or other action of any State concerning revocation,
suspension, or other enforcement action related to a
member's ability to engage in any activity within the
scope of authority granted under this subsection and to
all State laws, regulations, provisions and actions
preserved under paragraph (5).
``(2) Violent crime control and law enforcement act of
1994.--Nothing in this subtitle shall be construed to alter,
modify, or supercede any requirement established by section
1033 of title 18, United States Code.
``(3) Agent for remitting fees.--The Association shall act
as any member's agent for purposes of remitting licensing fees
to any State pursuant to paragraph (1).
``(4) Regulator notification.--
``(A) In general.--The Association shall notify the
States and the National Association of Insurance
Commissioners or its designee when a producer has
satisfied the membership criteria of this section. The
States and the National Association of Insurance
Commissioners or its designee shall have 10 business
days after such notification to provide the Association
with evidence that the producer does not satisfy the
criteria for membership for the Association's
consideration in its final membership determination.
``(B) Ongoing disclosures required.--On an ongoing
basis, the Association shall disclose to the States and
the National Association of Insurance Commissioners or
its designee the States in which each member is
authorized to operate. The Association shall
immediately notify the States and the National
Association of Insurance Commissioners or its designee
when a member is newly authorized to operate in one or
more States, or is no longer authorized to operate in
one or more States on the basis of Association
membership.
``(5) Preservation of state consumer protection and market
conduct regulation.--No provision of this section shall be
construed as altering or affecting the applicability or
continuing effectiveness of any law, regulation, provision, or
other action of any State, including any law, regulation,
provision, or other action that--
``(A) regulates market conduct, producer conduct,
or unfair trade practices;
``(B) establishes consumer protections; or
``(C) requires insurance producers to be appointed
by a licensed or authorized insurer,
to the extent that such law, regulation, provision, or other
action is not inconsistent with the provisions of this subtitle
related to market entry for nonresident insurance producers,
and then only to the extent of such inconsistency.
``(f) Biennial Renewal.--Membership in the Association shall be
renewed on a biennial basis.
``(g) Continuing Education.--
``(1) In general.--The Association shall establish, as a
condition of membership, continuing education requirements
which shall be comparable to the continuing education
requirements under the licensing laws of a majority of the
States.
``(2) State continuing education requirements.--A member
may not be required to satisfy continuing education
requirements imposed under the laws, regulations, provisions,
or actions of any State other than such member's home State.
``(3) Reciprocity.--The Association shall not require a
member to satisfy continuing education requirements that are
equivalent to any continuing education requirements of the
member's home State that have been satisfied by the member
during the applicable licensing period.
``(4) Limitation on association.--The Association shall not
directly or indirectly offer any continuing education courses
for insurance producers.
``(h) Probation, Suspension and Revocation.--
``(1) Disciplinary action.--The Association may place an
insurance producer that is a member of the Association on
probation or suspend or revoke such producer's membership in
the Association, or assess monetary fines or penalties, as the
Association determines to be appropriate, if--
``(A) the producer fails to meet the applicable
membership criteria or other rules of the Association;
``(B) the producer has been subject to disciplinary
action pursuant to a final adjudicatory proceeding
under the jurisdiction of a State insurance regulator;
``(C) an insurance license held by the producer has
been suspended or revoked by a State insurance
regulator; or
``(D) the producer has been convicted of a crime
that would have resulted in the denial of membership
pursuant to subsection (a)(4)(M)(i) at the time of
application and the Association has received a copy of
the final disposition from a court of competent
jurisdiction.
``(2) Violations of association rules.--The Association
shall have the power to investigate alleged violations of
Association rules.
``(3) Reporting.--The Association shall immediately notify
the NAIC or its designee when a producer's membership has been
placed on probation or has been suspended, revoked, or
otherwise terminated, or when the Association has assessed
monetary fines or penalties.
``(i) Consumer Complaints.--
``(1) In general.--The Association shall--
``(A) refer any complaint against a member of the
Association from a consumer relating to alleged
misconduct or violations of State insurance laws to the
State insurance regulator where the consumer resides
and, when appropriate, to any additional State
insurance regulator, as determined by rules adopted by
the Association; and
``(B) make any related records and information
available to the NAIC or its designee and to each State
insurance regulator to whom the complaint is forwarded.
``(2) Telephone and other access.--The Association shall
maintain a toll-free number for purposes of this subsection
and, as practicable, other alternative means of communication
with consumers, such as an Internet webpage.
``(3) Final disposition of investigation.--State insurance
regulators shall provide the Association with information
regarding the final disposition of a complaint referred
pursuant to paragraph (1)(A), but nothing shall be construed to
compel a State to release confidential investigation reports or
other information protected by State law to the Association.
``(j) Information Sharing.--The Association may share documents,
materials, or other information, including confidential and privileged
documents, with a State, Federal, or international regulatory agency or
enforcement authority, or with the NAIC or its designee, provided that
the recipient has the authority and agrees to maintain the
confidentiality or privileged status of the document, material, or
other information.
``SEC. 324. BOARD OF DIRECTORS.
``(a) Establishment.--There is established the board of directors
of the Association (hereafter in this subtitle referred to as the
`Board'), which shall have authority to govern and supervise all
activities of the Association.
``(b) Powers.--The Board shall have such of the Association's
powers and authority as may be specified in the bylaws of the
Association.
``(c) Composition.--
``(1) In general.--The Board shall consist of 13 members
who shall be appointed by the President, by and with the advice
and consent of the Senate, of whom--
``(A) 8 shall be State insurance commissioners
appointed in the manner provided in paragraph (2);
``(B) 2 shall be representatives of property and
casualty insurance producers;
``(C) 1 shall be a representative of life or health
insurance producers;
``(D) 1 shall be a representative of property and
casualty insurers; and
``(E) 1 shall be a representative of life or health
insurers.
``(2) State insurance regulator representatives.--
``(A) Before making any appointments pursuant to
subparagraph (A) of paragraph (1), the President shall
request a list of recommended candidates from the NAIC,
which shall not be binding on the President. If the
NAIC fails to submit a list of recommendations within
15 business days of the request, the President may make
the requisite appointments without considering the
views of the NAIC.
``(B) Not more than 4 members appointed to
membership on the Board pursuant to subparagraph (A) of
paragraph (1) shall belong to the same political party.
``(C) If fewer than 8 State insurance commissioners
accept appointment to the Board, the President may
appoint the remaining State insurance commissioner
members of the Board from among individuals who are
former State insurance commissioners, provided that any
former insurance commissioner so appointed shall not be
employed by or have a present direct or indirect
financial interest in any insurer, insurance producer,
or other entity in the insurance industry other than
direct or indirect ownership of, or beneficial interest
in, an insurance policy or annuity contract written or
sold by an insurer.
``(3) Private sector representatives.--In making any
appointments pursuant to subparagraphs (B) through (E) of
paragraph (1), the President may seek recommendations for
candidates from national trade associations representing the
category of individuals described, which shall not be binding
on the President.
``(4) State insurance commissioner defined.--For purposes
of this subsection, the term `State insurance commissioner'
means a person who serves in the position in State government,
or on the board, commission, or other body that is the
principal insurance regulatory authority for the State.
``(d) Terms.--
``(1) In general.--The term of each Board member shall be
for 2 years, except that--
``(A) the term of--
``(i) 4 of the State insurance commissioner
members of the Board initially appointed under
subparagraph (A) of paragraph (1);
``(ii) 1 of the property and casualty
insurance producer members of the Board
initially appointed under subparagraph (B) of
paragraph (1); and
``(iii) 1 of the insurer representative
members of the Board initially appointed under
subparagraphs (D) and (E) of paragraph (1),
shall be 1 year, as designated by the President at the
time of the nomination of such members;
``(B) a member of the Board may continue to serve
after the expiration of the term to which such member
was appointed until a successor is qualified; and
``(C) any member of the Board appointed to fill a
vacancy occurring before the expiration of the term for
which the member's predecessor was appointed shall be
appointed only for the remainder of that term.
``(2) Successive terms.--Board members may be reappointed
to successive terms.
``(e) Initial Appointments.--The appointment of initial Board
members shall be made no later than 90 days after the date of enactment
of the National Association of Registered Agents and Brokers Reform Act
of 2013.
``(f) Meetings.--
``(1) In general.--The Board shall meet at the call of the
chairperson, as requested in writing to the chairperson by at
least 5 members of the Board, or as otherwise provided by the
bylaws of the Association.
``(2) Quorum required.--A majority of directors shall
constitute a quorum.
``(3) Voting.--Decisions of the Board shall require the
approval of a majority of all directors present at a meeting, a
quorum being present.
``(4) Initial meeting.--The Board shall hold its first
meeting not later than 45 days after the date on which all
initial members of the Board have been appointed.
``(g) Restriction on Confidential Information.--Members of the
Board appointed pursuant to paragraph (3) of subsection (c) shall not
have access to confidential information received by the Association in
connection with complaints, investigations, or disciplinary proceedings
involving insurance producers.
``(h) Ethics and Conflicts of Interest.--The Board shall issue and
enforce an ethical conduct code to address permissible and prohibited
activities of Board members and Association officers, employees,
agents, or consultants. The code shall, at a minimum, include
provisions that prohibit any Board member or Association officer,
employee, agent or consultant from--
``(1) engaging in unethical conduct in the course of
performing Association duties;
``(2) participating in the making or influencing the making
of any Association decision, the outcome of which he or she
knows or had reason to know would have a reasonably foreseeable
material financial effect, distinguishable from its effect on
the publicly generally, on the person or a member of his or her
immediate family;
``(3) accepting any gift from any person or entity other
than the Association that is given because of the position held
by the person in the Association;
``(4) making political contributions to any person or
entity on behalf of the Association; and
``(5) lobbying or paying someone to lobby on behalf of the
Association.
``SEC. 325. OFFICERS.
``(a) Positions.--The officers of the Association shall consist of
a chairperson and a vice chairperson of the Board, an executive
director, secretary, and treasurer of the Association, and such other
officers and assistant officers as may be deemed necessary.
``(b) Manner of Selection.--Each officer of the Board and the
Association shall be elected or appointed at such time, in such manner,
and for such terms as may be prescribed in the bylaws of the
Association.
``SEC. 326. BYLAWS, RULES, AND DISCIPLINARY ACTION.
``(a) Adoption and Amendment of Bylaws and Rules.--
``(1) Copy required to be filed.--The board of directors of
the Association shall submit to the President and the NAIC any
proposed bylaw or rules of the Association or any proposed
amendment to the bylaws or rules, accompanied by a concise
general statement of the basis and purpose of such proposal.
Rules shall be promulgated in accordance with the Federal
Administrative Procedure Act.
``(2) Effective date.--Any proposed bylaw or rule or
proposed amendment to the bylaws or rules shall take effect,
after notice published in the Federal Register and opportunity
for comment, upon such date as the Association may designate,
unless suspended under subsection (c) of section 330.
``(b) Disciplinary Action by the Association.--
``(1) Specification of charges.--In any proceeding to
determine whether membership shall be denied, suspended,
revoked, or not renewed or to determine whether a member of the
Association should be placed on probation (in this section
referred to as a `disciplinary action') or whether to assess
fines or monetary penalties, the Association shall bring
specific charges, notify such member of such charges, give the
member an opportunity to defend against the charges, and keep a
record.
``(2) Supporting statement.--A determination to take
disciplinary action shall be supported by a statement setting
forth--
``(A) any act or practice in which such member has
been found to have been engaged;
``(B) the specific provision of this subtitle, the
rules or regulations under this subtitle, or the rules
of the Association which any such act or practice is
deemed to violate; and
``(C) the sanction imposed and the reason for such
sanction.
``(3) Ineligibility of private sector representatives.--
Members of the Board appointed pursuant to section 324(c)(3)
shall not participate in any disciplinary action, and shall not
have access to confidential information concerning such
actions.
``SEC. 327. POWERS.
``In addition to all the powers conferred upon a nonprofit
corporation by the District of Columbia Nonprofit Corporation Act, the
Association shall have the following powers:
``(1) To establish and collect such membership fees as the
Association finds necessary to impose to cover the costs of its
operations.
``(2) To adopt, amend, and repeal bylaws and rules
governing the conduct of Association business and performance
of its duties.
``(3) To establish procedures for providing notice and
opportunity for comment pursuant to section 326(a).
``(4) To enter into and perform such agreements as
necessary to carry out its duties.
``(5) 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 subtitle, and determine their
qualification; and to establish the Association's personnel
policies and programs relating to, among other things,
conflicts of interest, rates of compensation, and
qualifications of personnel.
``(6) To borrow money.
``(7) To secure funding for such amounts as the Association
determines to be necessary and appropriate to organize and
begin operations of the Association, which shall be treated as
loans to be repaid by the Association with interest at market
rate, except that the Board shall not secure funding from an
insurer, insurance producer, or insurance association, but may
secure funding from the NAIC.
``SEC. 328. REPORT BY ASSOCIATION.
``(a) In General.--As soon as practicable after the close of each
fiscal year, the Association shall submit to the President and the NAIC
a written report regarding the conduct of its business, and the
exercise of the other rights and powers granted by this subtitle,
during such fiscal year.
``(b) Financial Statements.--Each report submitted under subsection
(a) with respect to any fiscal year shall include financial statements
setting forth the financial position of the Association at the end of
such fiscal year and the results of its operations (including the
source and application of its funds) for such fiscal year.
``SEC. 329. LIABILITY OF THE ASSOCIATION AND THE DIRECTORS, OFFICERS,
AND EMPLOYEES OF THE ASSOCIATION.
``(a) In General.--The Association shall not be deemed to be an
insurer or insurance producer within the meaning of any State law,
rule, regulation, or order regulating or taxing insurers, insurance
producers, or other entities engaged in the business of insurance,
including provisions imposing premium taxes, regulating insurer
solvency or financial condition, establishing guaranty funds and
levying assessments, or requiring claims settlement practices.
``(b) Liability of Directors, Officers, and Employees.--No
director, officer, or employee of the Association shall be personally
liable to any person for any action taken or omitted in good faith in
any matter within the scope of their responsibilities in connection
with the Association.
``SEC. 330. PRESIDENTIAL OVERSIGHT.
``(a) Removal of Board.--If the President determines that the
Association is acting in a manner contrary to the interests of the
public or the purposes of this subtitle or has failed to perform its
duties under this subtitle, the President may remove the entire
existing Board for the remainder of the term to which the members of
the Board were appointed and appoint, in accordance with section 324
and with the advice and consent of the Senate, new members to fill the
vacancies on the Board for the remainder of such terms.
``(b) Removal of Board Member.--The President may remove a member
of the Board only for neglect of duty or malfeasance in office.
``(c) Suspension of Rules or Actions.--Following notice to the
Board, the President, or a person designated by the President for such
purpose, may suspend the effectiveness of any rule, or prohibit any
action, of the Association which the President or the designee
determines is contrary to the purposes of this subtitle.
``SEC. 331. RELATIONSHIP TO STATE LAW.
``(a) Preemption of State Laws.--State laws, regulations,
provisions, or other actions purporting to regulate insurance producers
shall be preempted to the extent provided in subsection (b).
``(b) Prohibited Actions.--
``(1) In general.--No State shall--
``(A) impede the activities of, take any action
against, or apply any provision of law or regulation
arbitrarily or discriminatorily to, any insurance
producer because that insurance producer or any
affiliate plans to become, has applied to become, or is
a member of the Association;
``(B) impose any requirement upon a member of the
Association that it pay fees different from those
required to be paid to that State were it not a member
of the Association; or
``(C) impose any continuing education requirements
on any nonresident insurance producer that is a member
of the Association.
``(2) States other than a home state.--No State, other than
a member's home State, shall--
``(A) impose any licensing, personal or corporate
qualifications, education, training, experience,
residency, continuing education, or bonding requirement
upon a member of the Association that is different from
the criteria for membership in the Association or
renewal of such membership;
``(B) impose any requirement upon a member of the
Association that it be licensed, registered, or
otherwise qualified to do business or remain in good
standing in such State, including any requirement that
such insurance producer register as a foreign company
with the secretary of state or equivalent State
official;
``(C) require that a member of the Association
submit to a criminal history record check as a
condition of doing business in such State; or
``(D) impose any licensing, registration, or
appointment requirements upon a member of the
Association, or require a member of the Association to
be authorized to operate as an insurance producer, in
order to sell, solicit, or negotiate insurance for
commercial property and casualty risks to an insured
with risks located in more than one State, if such
member is licensed or otherwise authorized to operate
in the State where the insured maintains its principal
place of business and the contract of insurance insures
risks located in that State.
``(3) Preservation of state disciplinary authority.--
Nothing in this section may be construed to prohibit a State
from investigating and taking appropriate disciplinary action,
including suspension or revocation of a producer's authority to
do business in a State, in accordance with such State's law and
that is not inconsistent with the provisions of this section,
against a member of the Association as a result of a complaint
or for any alleged activity, regardless of whether such
activity occurred before or after the producer commenced doing
business in that State pursuant to Association membership.
``SEC. 332. COORDINATION WITH OTHER REGULATORS.
``(a) Coordination With State Insurance Regulators.--The
Association may--
``(1) establish a central clearinghouse, or utilize the
NAIC or any other appropriate entity as a central
clearinghouse, through which members of the Association may
pursuant to section 323(e) disclose their intent to operate in
1 or more States and pay the licensing fees to the appropriate
States; and
``(2) establish a national database for the collection of
regulatory information concerning the activities of insurance
producers or contract with the NAIC or any other entity to
utilize such a database.
``(b) Coordination With the Financial Industry Regulatory
Authority.--The Association shall coordinate with the Financial
Industry Regulatory Authority in order to ease any administrative
burdens that fall on persons that are members of both associations,
consistent with the requirements of this subtitle and the Federal
securities laws.
``SEC. 333. RIGHT OF ACTION.
``(a) Right of Action.--Any person aggrieved by a decision or
action of the Association may, after reasonably exhausting available
avenues for resolution within the Association, commence a civil action
in an appropriate United States district court, and obtain all
appropriate relief.
``(b) Association Interpretations.--In any such action, the court
shall give appropriate weight to the Association's interpretation of
its bylaws and this subtitle.
``SEC. 334. DEFINITIONS.
``For purposes of this subtitle, the following definitions shall
apply:
``(1) Business entity.--The term `business entity' means a
corporation, association, partnership, limited liability
company, limited liability partnership, or other legal entity.
``(2) Home state.--The term `home State' means the State in
which the insurance producer maintains its principal place of
residence or business and is licensed to act as an insurance
producer.
``(3) Insurance.--The term `insurance' means any product,
other than title insurance or bail bonds, defined or regulated
as insurance by the appropriate State insurance regulatory
authority.
``(4) Insurance producer.--The term `insurance producer'
means any insurance agent or broker, excess or surplus lines
broker or agent, insurance consultant, limited insurance
representative, and any other individual or entity that sells,
solicits, or negotiates policies of insurance or offers advice,
counsel, opinions or services related to insurance.
``(5) Principal place of business.--The term `principal
place of business' means the State in which an insurance
producer maintains the headquarters of the producer and, in the
case of a business entity, where the entity's high-level
officers direct, control, and coordinate the business
activities of the entity.
``(6) Principal place of residence.--The term `principal
place of residence' means the State in which an insurance
producer resides for the greatest number of days during a
calendar year.
``(7) State.--The term `State' includes any State, the
District of Columbia, any territory of the United States, and
Puerto Rico, Guam, American Samoa, the Trust Territory of the
Pacific Islands, the Virgin Islands, and the Northern Mariana
Islands.
``(8) State law.--
``(A) In general.--The term `State law' includes
all laws, decisions, rules, regulations, or other State
action having the effect of law, of any State.
``(B) Laws applicable in the district of
columbia.--A law of the United States applicable only
to or within the District of Columbia shall be treated
as a State law rather than a law of the United
States.''.
(b) Clerical Amendment.--The table of contents for the Gramm-Leach-
Bliley Act is amended by striking the items relating to subtitle C of
title III and inserting the following new items:
``Subtitle C--National Association of Registered Agents and Brokers
``Sec. 321. National Association of Registered Agents and Brokers.
``Sec. 322. Purpose.
``Sec. 323. Membership.
``Sec. 324. Board of directors.
``Sec. 325. Officers.
``Sec. 326. Bylaws, rules, and disciplinary action.
``Sec. 327. Powers.
``Sec. 328. Report by Association.
``Sec. 329. Liability of the Association and the directors, officers,
and employees of the Association.
``Sec. 330. Presidential oversight.
``Sec. 331. Relationship to State law.
``Sec. 332. Coordination with other regulators.
``Sec. 333. Right of action.
``Sec. 334. Definitions.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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