S T A T E   O F   N E W   Y O R K
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                                 5208--A

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            February 13, 2015
                               ___________

Introduced  by  M. of A. SIMOTAS, SKOUFIS, STIRPE, MOYA, LAVINE, RIVERA,
  STECK -- read once and referred  to  the  Committee  on  Insurance  --
  recommitted  to the Committee on Insurance in accordance with Assembly
  Rule  3,  sec.  2  --  committee  discharged,  bill  amended,  ordered
  reprinted as amended and recommitted to said committee

AN  ACT  to  amend  the  insurance  law, in relation to establishing the
  interstate insurance product regulation compact  to  regulate  certain
  insurance products

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative findings and intent.  An interstate compact  is
a  contract  between  the states that allows them to cooperate on multi-
state or national issues while still retaining state control. Interstate
compacts are specifically mentioned in the U.S.  Constitution  and  have
been  historically used to address border disputes and water rights. The
use of interstate compacts has expanded significantly in recent  decades
to  cover tax, motor vehicle licensing, environmental, emergency manage-
ment and other issues. Over 200 interstate compacts currently exist, and
on average every state belongs to at least 25 compacts.  The  Interstate
Insurance  Product Regulation Compact, which to date has been adopted by
44 member states, representing approximately two-thirds of  the  premium
volume  in  the  nation,  created the Interstate Insurance Product Regu-
lation Commission (IIPRC). The IIPRC provides the States with a  vehicle
to  (1)  develop  uniform  national product standards that will afford a
high level of protection to  consumers  of  life  insurance,  annuities,
disability income and long-term care insurance products; (2) establish a
central point of filing for these insurance products; and (3) thoroughly
review  product  filings  and make regulatory decisions according to the
uniform product standards.  The  IIPRC  is  an  important  modernization
initiative  that benefits state insurance regulators, consumers, and the
insurance industry. The Compact enhances the efficiency  and  effective-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06596-04-6
              

A. 5208--A                          2

ness  of  the  way  insurance products are filed, reviewed, and approved
allowing insurance customers to have faster access to competitive insur-
ance products  in  an  ever-changing  global  marketplace.  The  Compact
promotes  uniformity  through  application  of uniform product standards
embedded with strong consumer protections.  The state of New York  seeks
to  join with other states as a member of the Interstate Insurance Prod-
uct Regulation Compact and Commission.
  S 2. The insurance law is amended by adding a new article 82  to  read
as follows:

                               ARTICLE 82
             INTERSTATE INSURANCE PRODUCT REGULATION COMPACT

SECTION 8201. SHORT TITLE.
        8202. PURPOSE.
        8203. DEFINITIONS.
        8204. ESTABLISHMENT OF THE COMMISSION AND VENUE.
        8205. POWERS OF THE COMMISSION.
        8206. ORGANIZATION OF THE COMMISSION.
        8207. MEETINGS AND ACTS OF THE COMMISSION.
        8208. RULES  AND  OPERATING PROCEDURES; RULE MAKING FUNCTIONS OF
                THE COMMISSION AND OPTING OUT OF UNIFORM STANDARDS.
        8209. COMMISSION RECORDS AND ENFORCEMENT.
        8210. DISPUTE RESOLUTION.
        8211. PRODUCT FILING AND APPROVAL.
        8212. REVIEW OF COMMISSION DECISIONS REGARDING FILINGS.
        8213. FINANCE.
        8214. COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT.
        8215. WITHDRAWAL, DEFAULT AND TERMINATION.
        8216. SEVERABILITY AND CONSTRUCTION.
        8217. BINDING EFFECT OF COMPACT AND OTHER LAWS.
        8218. EXEMPT PRODUCTS.
  S 8201. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE  CITED  AS
THE "INTERSTATE INSURANCE PRODUCT REGULATION COMPACT".
  S  8202.  PURPOSE.  THE PURPOSES OF THIS COMPACT ARE, THROUGH MEANS OF
JOINT AND COOPERATIVE ACTION AMONG THE COMPACTING STATES:
  (A) TO PROMOTE AND PROTECT THE INTEREST OF CONSUMERS OF INDIVIDUAL AND
GROUP ANNUITY, LIFE INSURANCE,  DISABILITY  INCOME  AND  LONG-TERM  CARE
INSURANCE PRODUCTS;
  (B)  TO  DEVELOP  UNIFORM  STANDARDS  FOR  PRODUCTS  COVERED UNDER THE
COMPACT;
  (C) TO ESTABLISH A CENTRAL CLEARINGHOUSE TO RECEIVE AND PROVIDE PROMPT
REVIEW OF PRODUCTS COVERED UNDER THE  COMPACT  AND,  IN  CERTAIN  CASES,
ADVERTISEMENTS  RELATED  THERETO, SUBMITTED BY INSURERS AUTHORIZED TO DO
BUSINESS IN ONE OR MORE COMPACTING STATES;
  (D) TO GIVE APPROPRIATE REGULATORY APPROVAL TO THOSE  PRODUCT  FILINGS
AND ADVERTISEMENTS SATISFYING THE APPLICABLE UNIFORM STANDARD;
  (E)  TO  IMPROVE  COORDINATION  OF  REGULATORY RESOURCES AND EXPERTISE
BETWEEN STATE INSURANCE DEPARTMENTS REGARDING  THE  SETTING  OF  UNIFORM
STANDARDS AND REVIEW OF INSURANCE PRODUCTS COVERED UNDER THE COMPACT;
  (F)  TO CREATE THE INTERSTATE INSURANCE PRODUCT REGULATION COMMISSION;
AND
  (G) TO PERFORM SUCH OTHER RELATED FUNCTIONS AS MAY BE CONSISTENT  WITH
THE STATE REGULATION OF THE BUSINESS OF INSURANCE.
  S 8203. DEFINITIONS. AS USED IN THIS ARTICLE:

A. 5208--A                          3

  (A)  "ADVERTISEMENT"  MEANS  ANY  MATERIAL  DESIGNED  TO CREATE PUBLIC
INTEREST IN A PRODUCT, OR INDUCE THE PUBLIC TO PURCHASE, INCREASE, MODI-
FY, REINSTATE, BORROW ON, SURRENDER, REPLACE OR RETAIN A POLICY, AS MORE
SPECIFICALLY DEFINED IN  THE  RULES  AND  OPERATING  PROCEDURES  OF  THE
COMMISSION.
  (B) "BY-LAWS" MEAN THOSE BY-LAWS ESTABLISHED BY THE COMMISSION FOR ITS
GOVERNANCE  OR  FOR DIRECTING OR CONTROLLING THE COMMISSION'S ACTIONS OR
CONDUCT.
  (C) "COMPACTING STATE" MEANS ANY STATE WHICH HAS ENACTED THIS  COMPACT
LEGISLATION  AND  WHICH HAS NOT WITHDRAWN OR BEEN TERMINATED PURSUANT TO
SECTION EIGHT THOUSAND TWO HUNDRED FIFTEEN OF THIS ARTICLE.
  (D) "COMMISSION" MEANS THE "INTERSTATE  INSURANCE  PRODUCT  REGULATION
COMMISSION" ESTABLISHED BY THE COMPACT.
  (E)  "COMMISSIONER" MEANS THE CHIEF INSURANCE REGULATORY OFFICIAL OF A
STATE INCLUDING, BUT NOT LIMITED TO COMMISSIONER, SUPERINTENDENT, DIREC-
TOR OR ADMINISTRATOR.
  (F) "DOMICILIARY STATE" MEANS THE STATE IN WHICH AN INSURER IS  INCOR-
PORATED  OR  ORGANIZED OR, IN THE CASE OF AN ALIEN INSURER, ITS STATE OF
ENTRY.
  (G) "INSURER" MEANS ANY ENTITY LICENSED BY A STATE TO ISSUE  CONTRACTS
OF INSURANCE FOR ANY OF THE LINES OF INSURANCE COVERED BY THIS ARTICLE.
  (H)  "MEMBER"  MEANS  THE  PERSON, OR HIS OR HER DESIGNEE, CHOSEN BY A
COMPACTING STATE FOR SERVICE ON THE COMMISSION.
  (I) "NON-COMPACTING STATE" MEANS ANY STATE WHICH IS NOT AT THE TIME  A
COMPACTING STATE.
  (J)  "OPERATING PROCEDURES" MEAN PROCEDURES PROMULGATED BY THE COMMIS-
SION IMPLEMENTING A RULE,  UNIFORM  STANDARD  OR  A  PROVISION  OF  THIS
COMPACT.
  (K)  "PRODUCT"  MEANS  THE  FORM  OF THE CONTRACT, POLICY APPLICATION,
ENDORSEMENTS, CERTIFICATE FORMS, EVIDENCE OF COVERAGE FORMS AND  RELATED
FORMS  FOR  AN  INDIVIDUAL  OR GROUP ANNUITY, LIFE INSURANCE, DISABILITY
INCOME OR LONG-TERM CARE INSURANCE PRODUCT, WHICH AN INSURER IS  AUTHOR-
IZED TO ISSUE.
  (L)  "RULE"  MEANS  A STATEMENT OF GENERAL OR PARTICULAR APPLICABILITY
AND FUTURE EFFECT PROMULGATED BY THE  COMMISSION,  INCLUDING  A  UNIFORM
STANDARD  DEVELOPED PURSUANT TO SECTION EIGHT THOUSAND TWO HUNDRED EIGHT
OF THIS ARTICLE, DESIGNED TO IMPLEMENT, INTERPRET, OR PRESCRIBE  LAW  OR
POLICY  OR  DESCRIBING THE ORGANIZATION, PROCEDURE, OR PRACTICE REQUIRE-
MENTS OF THE COMMISSION, WHICH SHALL HAVE THE FORCE AND EFFECT OF LAW IN
THE COMPACTING STATES.
  (M) "STATE" MEANS ANY STATE,  DISTRICT  OR  TERRITORY  OF  THE  UNITED
STATES OF AMERICA.
  (N)  "THIRD-PARTY FILER" MEANS AN ENTITY THAT SUBMITS A PRODUCT FILING
TO THE COMMISSION ON BEHALF OF AN INSURER.
  (O) "UNIFORM STANDARD" MEANS A STANDARD ADOPTED BY THE COMMISSION  FOR
A  PRODUCT LINE, PURSUANT TO SECTION EIGHT THOUSAND TWO HUNDRED EIGHT OF
THIS ARTICLE AND SHALL INCLUDE ALL OF THE PRODUCT REQUIREMENTS IN AGGRE-
GATE; PROVIDED, THAT EACH UNIFORM STANDARD SHALL BE  CONSTRUED,  WHETHER
EXPRESS  OR IMPLIED, TO PROHIBIT THE USE OF ANY INCONSISTENT, MISLEADING
OR AMBIGUOUS PROVISIONS IN A PRODUCT AND THE FORM OF SUCH  PRODUCT  MADE
AVAILABLE  TO  THE  PUBLIC  SHALL  NOT BE UNFAIR, INEQUITABLE OR AGAINST
PUBLIC POLICY AS DETERMINED BY THE COMMISSION.
  S 8204. ESTABLISHMENT OF THE COMMISSION AND VENUE. (A) THE  COMPACTING
STATES  HEREBY  ESTABLISH A JOINT PUBLIC AGENCY KNOWN AS THE "INTERSTATE
INSURANCE PRODUCT REGULATION  COMMISSION".  PURSUANT  TO  SECTION  EIGHT
THOUSAND  TWO  HUNDRED  EIGHT OF THIS ARTICLE, THE COMMISSION SHALL HAVE

A. 5208--A                          4

THE POWER TO DEVELOP UNIFORM STANDARDS FOR PRODUCT  LINES,  RECEIVE  AND
PROVIDE  PROMPT REVIEW OF PRODUCTS FILED THEREWITH, AND GIVE APPROVAL TO
THOSE PRODUCT FILINGS SATISFYING APPLICABLE UNIFORM STANDARDS; PROVIDED,
HOWEVER,  THAT IT IS NOT INTENDED FOR THE COMMISSION TO BE THE EXCLUSIVE
ENTITY FOR RECEIPT AND REVIEW OF INSURANCE PRODUCT FILINGS.  NOTHING  IN
THIS  SECTION  SHALL PROHIBIT ANY INSURER FROM FILING ITS PRODUCT IN ANY
STATE WHEREIN SUCH INSURER IS LICENSED TO CONDUCT THE BUSINESS OF INSUR-
ANCE AND SUCH FILING SHALL BE SUBJECT TO THE LAWS  OF  THE  STATE  WHERE
FILED.
  (B)  THE COMMISSION IS A BODY CORPORATE AND POLITIC, AND AN INSTRUMEN-
TALITY OF THE COMPACTING STATES.
  (C) THE COMMISSION IS A NOT-FOR-PROFIT ENTITY, SEPARATE  AND  DISTINCT
FROM THE INDIVIDUAL COMPACTING STATES.
  (D)  THE  COMMISSION  IS SOLELY RESPONSIBLE FOR ITS LIABILITIES UNLESS
OTHERWISE SPECIFICALLY PROVIDED IN THIS  COMPACT,  EXCEPT  THAT,  IN  NO
EVENT  SHALL  THE OBLIGATIONS OF THE COMMISSION BE THE DEBT OF THE STATE
OF NEW YORK NOR SHALL ANY REVENUES OR PROPERTY OF THE STATE OF NEW  YORK
BE LIABLE THEREFOR.
  (E) VENUE IN PROPER AND JUDICIAL PROCEEDINGS BY OR AGAINST THE COMMIS-
SION  SHALL  BE  BROUGHT  SOLELY AND EXCLUSIVELY IN A COURT OF COMPETENT
JURISDICTION WHERE THE PRINCIPAL OFFICE OF THE COMMISSION IS LOCATED.
  S 8205. POWERS OF THE COMMISSION. (A) THE COMMISSION  SHALL  HAVE  THE
FOLLOWING POWERS:
  (1)  TO  PROMULGATE  RULES,  PURSUANT  TO  SECTION  EIGHT THOUSAND TWO
HUNDRED EIGHT OF THIS ARTICLE, WHICH SHALL HAVE THE FORCE AND EFFECT  OF
LAW  AND  SHALL BE BINDING IN THE COMPACTING STATES TO THE EXTENT AND IN
THE MANNER PROVIDED IN THIS ARTICLE;
  (2) TO EXERCISE ITS RULE MAKING  AUTHORITY  AND  ESTABLISH  REASONABLE
UNIFORM STANDARDS FOR PRODUCTS COVERED UNDER THE COMPACT, AND ADVERTISE-
MENT  RELATED  THERETO, WHICH SHALL HAVE THE FORCE AND EFFECT OF LAW AND
SHALL BE BINDING IN THE COMPACTING STATES, BUT ONLY  FOR  SUCH  PRODUCTS
FILED  WITH  THE  COMMISSION; PROVIDED, HOWEVER, THAT A COMPACTING STATE
SHALL HAVE THE RIGHT TO OPT OUT OF SUCH  UNIFORM  STANDARD  PURSUANT  TO
SECTION  EIGHT  THOUSAND TWO HUNDRED EIGHT OF THIS ARTICLE TO THE EXTENT
AND IN THE MANNER PROVIDED IN THIS ARTICLE, AND  PROVIDED  FURTHER  THAT
ANY  UNIFORM STANDARD ESTABLISHED BY THE COMMISSIONER FOR LONG-TERM CARE
INSURANCE PRODUCTS MAY PROVIDE  THE  SAME  OR  GREATER  PROTECTIONS  FOR
CONSUMERS  AS,  BUT  SHALL  NOT PROVIDE LESS THAN, THOSE PROTECTIONS SET
FORTH IN THE NATIONAL ASSOCIATION OF INSURANCE  COMMISSIONERS'  (HEREIN-
AFTER  REFERRED TO AS THE "NAIC") LONG-TERM CARE INSURANCE MODEL ACT AND
LONG-TERM CARE INSURANCE MODEL REGULATION, RESPECTIVELY, ADOPTED  AS  OF
2001. THE COMMISSION SHALL CONSIDER WHETHER ANY SUBSEQUENT AMENDMENTS TO
THE  NAIC LONG-TERM CARE INSURANCE MODEL ACT OR LONG-TERM CARE INSURANCE
MODEL REGULATION ADOPTED BY THE NAIC REQUIRE  AMENDING  OF  THE  UNIFORM
STANDARDS   ESTABLISHED   BY  THE  COMMISSION  FOR  LONG-TERM  INSURANCE
PRODUCTS;
  (3) TO RECEIVE AND REVIEW IN AN EXPEDITIOUS MANNER PRODUCTS FILED WITH
THE  COMMISSION,  INCLUDING  RATE  FILINGS  FOR  DISABILITY  INCOME  AND
LONG-TERM  CARE  INSURANCE PRODUCTS, AND GIVE APPROVAL OF THOSE PRODUCTS
AND RATE FILINGS THAT SATISFY THE  APPLICABLE  UNIFORM  STANDARD,  WHERE
SUCH  APPROVAL  SHALL HAVE THE FORCE AND EFFECT OF LAW AND BE BINDING ON
THE COMPACTING STATES TO THE EXTENT AND IN THE MANNER  PROVIDED  IN  THE
COMPACT;
  (4)  TO  RECEIVE  AND  REVIEW  IN  AN EXPEDITIOUS MANNER ADVERTISEMENT
RELATING TO LONG-TERM CARE INSURANCE PRODUCTS FOR WHICH  UNIFORM  STAND-
ARDS  HAVE  BEEN  ADOPTED  BY  THE COMMISSION, AND GIVE APPROVAL OF SUCH

A. 5208--A                          5

ADVERTISEMENT THAT SATISFIES THE APPLICABLE UNIFORM  STANDARD.  FOR  ANY
PRODUCT  COVERED UNDER THIS ARTICLE, OTHER THAN LONG-TERM CARE INSURANCE
PRODUCTS, THE COMMISSION SHALL HAVE THE AUTHORITY TO REQUIRE AN  INSURER
TO  SUBMIT  ALL  OR  ANY  PART OF ITS ADVERTISEMENT WITH RESPECT TO THAT
PRODUCT FOR REVIEW OR APPROVAL PRIOR TO USE IF THE COMMISSION DETERMINES
THAT THE NATURE OF THE PRODUCT IS SUCH  THAT  AN  ADVERTISEMENT  OF  THE
PRODUCT  COULD  HAVE THE CAPACITY OR TENDENCY TO MISLEAD THE PUBLIC. THE
ACTIONS OF THE COMMISSION AS PROVIDED IN THIS  SECTION  SHALL  HAVE  THE
FORCE AND EFFECT OF LAW AND SHALL BE BINDING IN THE COMPACTING STATES TO
THE EXTENT AND IN THE MANNER PROVIDED IN THE COMPACT;
  (5)  TO  EXERCISE  RULE  MAKING  AUTHORITY  AND DESIGNATE PRODUCTS AND
ADVERTISEMENT THAT MAY BE SUBJECT TO A SELF-CERTIFICATION PROCESS  WITH-
OUT THE NEED FOR PRIOR APPROVAL BY THE COMMISSION;
  (6)  TO  PROMULGATE  OPERATING  PROCEDURES,  PURSUANT TO SECTION EIGHT
THOUSAND TWO HUNDRED EIGHT OF THIS ARTICLE, WHICH SHALL  BE  BINDING  IN
THE  COMPACTING  STATES  TO THE EXTENT AND IN THE MANNER PROVIDED IN THE
COMPACT;
  (7) TO BRING AND PROSECUTE LEGAL PROCEEDINGS OR ACTIONS IN ITS NAME AS
THE COMMISSION; PROVIDED, THAT  THE  STANDING  OF  ANY  STATE  INSURANCE
DEPARTMENT TO SUE OR BE SUED UNDER APPLICABLE LAW SHALL NOT BE AFFECTED;
  (8)  TO  ISSUE  SUBPOENAS  REQUIRING  THE  ATTENDANCE AND TESTIMONY OF
WITNESSES AND THE PRODUCTION OF EVIDENCE;
  (9) TO ESTABLISH AND MAINTAIN OFFICES;
  (10) TO PURCHASE AND MAINTAIN INSURANCE AND BONDS;
  (11) TO BORROW, ACCEPT OR CONTRACT FOR SERVICES OF PERSONNEL,  INCLUD-
ING, BUT NOT LIMITED TO, EMPLOYEES OF A COMPACTING STATE;
  (12) TO HIRE EMPLOYEES 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 QUALIFICA-
TIONS; AND TO ESTABLISH THE COMMISSION'S PERSONNEL POLICIES AND PROGRAMS
RELATING TO, AMONG OTHER THINGS, CONFLICTS OF INTEREST, RATES OF COMPEN-
SATION AND QUALIFICATIONS OF PERSONNEL;
  (13) TO ACCEPT ANY AND ALL APPROPRIATE DONATIONS AND GRANTS OF  MONEY,
EQUIPMENT, SUPPLIES, MATERIALS AND SERVICES, AND TO RECEIVE, UTILIZE AND
DISPOSE  OF  THE  SAME;  PROVIDED THAT AT ALL TIMES THE COMMISSION SHALL
STRIVE TO AVOID ANY APPEARANCE OF IMPROPRIETY;
  (14) TO LEASE, PURCHASE, ACCEPT APPROPRIATE GIFTS OR DONATIONS OF,  OR
OTHERWISE  TO OWN, HOLD, IMPROVE OR USE, ANY PROPERTY, REAL, PERSONAL OR
MIXED; PROVIDED THAT AT ALL TIMES THE COMMISSION SHALL STRIVE  TO  AVOID
ANY APPEARANCE OF IMPROPRIETY;
  (15)  TO  SELL,  CONVEY, MORTGAGE, PLEDGE, LEASE, EXCHANGE, ABANDON OR
OTHERWISE DISPOSE OF ANY PROPERTY, REAL, PERSONAL OR MIXED;
  (16) TO REMIT FILING FEES TO COMPACTING STATES AS MAY BE SET FORTH  IN
THE BY-LAWS, RULES OR OPERATING PROCEDURES;
  (17)  TO  ENFORCE  COMPLIANCE BY COMPACTING STATES WITH RULES, UNIFORM
STANDARDS, OPERATING PROCEDURES AND BY-LAWS;
  (18) TO PROVIDE FOR DISPUTE RESOLUTION AMONG COMPACTING STATES;
  (19) TO ADVISE COMPACTING STATES ON ISSUES RELATING TO INSURERS  DOMI-
CILED OR DOING BUSINESS IN NON-COMPACTING JURISDICTIONS, CONSISTENT WITH
THE PURPOSES OF THE COMPACT;
  (20) TO PROVIDE ADVICE AND TRAINING TO THOSE PERSONNEL IN STATE INSUR-
ANCE  DEPARTMENTS  RESPONSIBLE  FOR PRODUCT REVIEW, AND TO BE A RESOURCE
FOR STATE INSURANCE DEPARTMENTS;
  (21) TO ESTABLISH A BUDGET AND MAKE EXPENDITURES;
  (22) TO BORROW MONEY;

A. 5208--A                          6

  (23) TO APPOINT COMMITTEES, INCLUDING ADVISORY  COMMITTEES  COMPRISING
MEMBERS,  STATE  INSURANCE REGULATORS, STATE LEGISLATORS OR THEIR REPRE-
SENTATIVES, INSURANCE INDUSTRY AND CONSUMER  REPRESENTATIVES,  AND  SUCH
OTHER INTERESTED PERSONS AS MAY BE DESIGNATED IN THE BY-LAWS;
  (24)  TO  PROVIDE  AND RECEIVE INFORMATION FROM, AND TO COOPERATE WITH
LAW ENFORCEMENT AGENCIES;
  (25) TO ADOPT AND USE A CORPORATE SEAL; AND
  (26) TO PERFORM SUCH OTHER FUNCTIONS AS MAY BE NECESSARY OR  APPROPRI-
ATE  TO  ACHIEVE  THE PURPOSES OF THIS COMPACT CONSISTENT WITH THE STATE
REGULATION OF THE BUSINESS OF INSURANCE.
  (B) ALL DONATIONS, GRANTS OF MONEY, EQUIPMENT, SUPPLIES, MATERIALS  OR
SERVICES,  PURCHASES, GIFTS, DONATIONS, CONVEYANCES, MORTGAGES, PLEDGES,
LEASES AND EXCHANGES, AS AUTHORIZED BY SUBSECTION (A) OF  THIS  SECTION,
RECEIVED  BY  OR  ON  BEHALF  OF  THE COMMISSION SHALL BE LIMITED TO THE
DIRECT FUNDING OF THE LAWFUL AND AUTHORIZED OPERATIONS  OF  THE  COMMIS-
SION.
  S  8206.  ORGANIZATION  OF  THE  COMMISSION. (A) EACH COMPACTING STATE
SHALL HAVE AND BE LIMITED TO ONE MEMBER. THE SUPERINTENDENT, OR  HIS  OR
HER  DESIGNATED  REPRESENTATIVE,  SHALL  BE  NEW  YORK'S  MEMBER OF SUCH
COMMISSION. EACH MEMBER SHALL BE QUALIFIED TO  SERVE  IN  SUCH  CAPACITY
PURSUANT  TO  APPLICABLE  LAW OF THE COMPACTING STATE. ANY MEMBER MAY BE
REMOVED OR SUSPENDED FROM OFFICE AS PROVIDED BY THE  LAW  OF  THE  STATE
FROM  WHICH  HE  OR SHE SHALL BE APPOINTED. ANY VACANCY OCCURRING IN THE
COMMISSION SHALL BE FILLED IN ACCORDANCE WITH THE LAWS OF THE COMPACTING
STATE WHEREIN SUCH 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 SUPERINTENDENT.
  (B) EACH MEMBER SHALL BE ENTITLED TO ONE VOTE AND SHALL HAVE AN OPPOR-
TUNITY  TO PARTICIPATE IN THE GOVERNANCE OF THE COMMISSION IN ACCORDANCE
WITH THE BY-LAWS. NOTWITHSTANDING ANY PROVISION OF THIS ARTICLE  TO  THE
CONTRARY,  NO  ACTION OF THE COMMISSION WITH RESPECT TO THE PROMULGATION
OF A UNIFORM STANDARD  SHALL  BE  EFFECTIVE  UNLESS  TWO-THIRDS  OF  THE
MEMBERS VOTE IN FAVOR THEREOF.
  (C)  THE  COMMISSION  SHALL,  BY  A MAJORITY OF THE MEMBERS, PRESCRIBE
BY-LAWS TO GOVERN ITS CONDUCT AS MAY  BE  NECESSARY  OR  APPROPRIATE  TO
CARRY OUT THE PURPOSES, AND EXERCISE THE POWERS, OF THE COMPACT, INCLUD-
ING, BUT NOT LIMITED TO:
  (1) ESTABLISHING THE FISCAL YEAR OF THE COMMISSION;
  (2)  PROVIDING  REASONABLE  PROCEDURES  FOR  HOLDING  MEETINGS  OF THE
MANAGEMENT COMMITTEE;
  (3) PROVIDING REASONABLE STANDARDS AND PROCEDURES FOR  THE  ESTABLISH-
MENT  OF  OTHER COMMITTEES, AND GOVERNING ANY GENERAL OR SPECIFIC DELEG-
ATION OF ANY AUTHORITY OR FUNCTION OF THE COMMISSION;
  (4) PROVIDING REASONABLE PROCEDURES FOR CALLING AND  CONDUCTING  MEET-
INGS 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 IN 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 VOTES TAKEN DURING SUCH MEETING;
  (5)  ESTABLISHING  THE  TITLES,  DUTIES  AND  AUTHORITY AND REASONABLE
PROCEDURES FOR THE ELECTION OF THE OFFICERS OF THE COMMISSION;

A. 5208--A                          7

  (6) PROVIDING REASONABLE STANDARDS AND PROCEDURES FOR  THE  ESTABLISH-
MENT OF THE PERSONNEL POLICIES AND PROGRAMS OF THE COMMISSION.  NOTWITH-
STANDING  ANY  CIVIL  SERVICE  OR  OTHER  SIMILAR LAWS OF ANY COMPACTING
STATE, THE BY-LAWS SHALL EXCLUSIVELY GOVERN THE PERSONNEL  POLICIES  AND
PROGRAMS OF THE COMMISSION;
  (7) PROMULGATING A CODE OF ETHICS TO ADDRESS PERMISSIBLE AND PROHIBIT-
ED ACTIVITIES OF COMMISSION MEMBERS AND EMPLOYEES; AND
  (8) PROVIDING A MECHANISM FOR WINDING UP THE OPERATIONS OF THE COMMIS-
SION  AND  THE EQUITABLE DISPOSITION OF ANY SURPLUS FUNDS THAT MAY EXIST
AFTER THE TERMINATION OF THE COMPACT AFTER THE PAYMENT AND/OR  RESERVING
OF ALL OF ITS DEBTS AND OBLIGATIONS.
  (D)  THE COMMISSION SHALL PUBLISH ITS BY-LAWS IN A CONVENIENT FORM AND
FILE A COPY THEREOF AND A COPY OF ANY AMENDMENT THERETO, WITH THE APPRO-
PRIATE AGENCY OR OFFICER IN EACH OF THE COMPACTING STATES.
  (E) A MANAGEMENT COMMITTEE COMPRISING NO MORE  THAN  FOURTEEN  MEMBERS
SHALL BE ESTABLISHED AS FOLLOWS:
  (1) ONE MEMBER FROM EACH OF THE SIX COMPACTING STATES WITH THE LARGEST
PREMIUM  VOLUME  FOR  INDIVIDUAL  AND  GROUP ANNUITIES, LIFE, DISABILITY
INCOME AND  LONG-TERM  CARE  INSURANCE  PRODUCTS,  DETERMINED  FROM  THE
RECORDS OF THE NAIC AS OF DECEMBER THIRTY-FIRST OF THE PRIOR YEAR;
  (2)  FOUR  MEMBERS  FROM  THOSE  COMPACTING  STATES  WITH AT LEAST TWO
PERCENT OF THE MARKET BASED ON THE PREMIUM VOLUME DESCRIBED IN PARAGRAPH
ONE OF THIS SUBSECTION, OTHER THAN SIX COMPACTING STATES WITH THE  LARG-
EST  PREMIUM  VOLUME,  SELECTED  ON  A ROTATING BASIS AS PROVIDED IN THE
BY-LAWS; AND
  (3) FOUR MEMBERS FROM THOSE  COMPACTING  STATES  WITH  LESS  THAN  TWO
PERCENT  OF  THE  MARKET, BASED ON THE PREMIUM VOLUME DESCRIBED IN PARA-
GRAPH ONE OF THIS SUBSECTION, WITH ONE SELECTED FROM EACH  OF  THE  FOUR
ZONE REGIONS OF THE NAIC AS PROVIDED IN THE BY-LAWS.
  (F)  THE  MANAGEMENT COMMITTEE SHALL HAVE SUCH AUTHORITY AND DUTIES AS
MAY BE SET FORTH IN THE BY-LAWS, INCLUDING BUT NOT LIMITED TO:
  (1) MANAGING THE AFFAIRS OF THE COMMISSION IN A MANNER CONSISTENT WITH
THE BY-LAWS AND PURPOSES OF THE COMMISSION;
  (2) 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;
  (3) OVERSEEING THE OFFICES OF THE COMMISSION; AND
  (4) PLANNING, IMPLEMENTING, AND COORDINATING COMMUNICATIONS AND ACTIV-
ITIES  WITH  OTHER  STATE, FEDERAL AND LOCAL GOVERNMENT ORGANIZATIONS IN
ORDER TO ADVANCE THE GOALS OF THE COMMISSION.
  (G) THE COMMISSION SHALL ELECT ANNUALLY OFFICERS FROM  THE  MANAGEMENT
COMMITTEE,  WITH EACH HAVING SUCH AUTHORITY AND DUTIES, AS MAY BE SPECI-
FIED IN THE BY-LAWS.
  (H) 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  COMMIS-
SION  MAY DEEM APPROPRIATE. THE EXECUTIVE DIRECTOR SHALL SERVE AS SECRE-
TARY 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.

A. 5208--A                          8

  (I)  A  LEGISLATIVE  COMMITTEE  COMPRISING  STATE LEGISLATORS OR THEIR
DESIGNEES SHALL BE ESTABLISHED TO MONITOR THE OPERATIONS  OF,  AND  MAKE
RECOMMENDATIONS   TO,  THE  COMMISSION;  PROVIDED  THAT  THE  MANNER  OF
SELECTION AND TERM OF ANY LEGISLATIVE COMMITTEE MEMBER SHALL BE  AS  SET
FORTH  IN  THE  BY-LAWS.  PRIOR TO THE ADOPTION BY THE COMMISSION OF ANY
UNIFORM STANDARD, REVISION  TO  THE  BY-LAWS,  ANNUAL  BUDGET  OR  OTHER
SIGNIFICANT  MATTER  AS  MAY  BE PROVIDED IN THE BY-LAWS, THE MANAGEMENT
COMMITTEE SHALL CONSULT WITH AND REPORT TO THE LEGISLATIVE COMMITTEE.
  (J) THE COMMISSION SHALL ESTABLISH TWO  ADVISORY  COMMITTEES,  ONE  OF
WHICH  SHALL COMPRISE CONSUMER REPRESENTATIVES INDEPENDENT OF THE INSUR-
ANCE INDUSTRY AND THE  OTHER  COMPRISING  INSURANCE  INDUSTRY  REPRESEN-
TATIVES.
  (K) THE COMMISSION MAY ESTABLISH ADDITIONAL ADVISORY COMMITTEES AS ITS
BY-LAWS MAY PROVIDE FOR THE CARRYING OUT OF ITS FUNCTIONS.
  (L)  THE  COMMISSION SHALL MAINTAIN ITS CORPORATE BOOKS AND RECORDS IN
ACCORDANCE WITH THE BY-LAWS.
  (M) THE MEMBERS, OFFICERS, EXECUTIVE DIRECTOR, EMPLOYEES AND REPRESEN-
TATIVES OF THE COMMISSION SHALL  BE  IMMUNE  FROM  SUIT  AND  LIABILITY,
EITHER  PERSONALLY  OR  IN THEIR OFFICIAL CAPACITY, FOR ANY ACTION TAKEN
REASONABLY AND IN GOOD FAITH WHICH RESULTS IN A 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  SUCH  PERSON  HAD  A REASONABLE BASIS FOR BELIEVING
OCCURRED WITHIN THE SCOPE OF COMMISSION EMPLOYMENT, DUTIES OR  RESPONSI-
BILITIES;  PROVIDED,  THAT NOTHING IN THIS SECTION 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.
  (N)  THE COMMISSION SHALL DEFEND ANY MEMBER, OFFICER, EXECUTIVE DIREC-
TOR, 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  EMPLOY-
MENT, DUTIES OR RESPONSIBILITIES, OR THAT THE DEFENDANT HAD A REASONABLE
BASIS  FOR BELIEVING OCCURRED WITHIN THE SCOPE OF COMMISSION EMPLOYMENT,
DUTIES OR RESPONSIBILITIES; PROVIDED, THAT NOTHING IN THIS SECTION SHALL
BE CONSTRUED TO PROHIBIT THAT PERSON FROM RETAINING HIS OR HER OWN COUN-
SEL; 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.
  (O) THE COMMISSION SHALL INDEMNIFY AND HOLD HARMLESS ANY MEMBER, OFFI-
CER, EXECUTIVE DIRECTOR, EMPLOYEE OR REPRESENTATIVE  OF  THE  COMMISSION
FOR  THE  AMOUNT  OF  ANY  SETTLEMENT  OR JUDGMENT OBTAINED AGAINST SUCH
PERSONS ARISING OUT OF ANY ACTUAL OR ALLEGED ACT, ERROR OR OMISSION THAT
OCCURRED WITHIN THE SCOPE OF COMMISSION EMPLOYMENT, DUTIES OR  RESPONSI-
BILITIES,  OR  THAT  SUCH  PERSON  HAD  A REASONABLE BASIS FOR BELIEVING
OCCURRED WITHIN THE SCOPE OF COMMISSION EMPLOYMENT, DUTIES OR  RESPONSI-
BILITIES,  PROVIDED,  THAT  THE ACTUAL OR ALLEGED ACT, ERROR OR OMISSION
DID NOT RESULT FROM THE INTENTIONAL OR WILLFUL AND WANTON MISCONDUCT  OF
ANY SUCH PERSON.
  S  8207. 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 BY-LAWS.
  (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 PARTIC-
IPATE IN THE BUSINESS AND AFFAIRS OF THE COMMISSION. A MEMBER SHALL VOTE
IN PERSON OR BY SUCH OTHER MEANS AS PROVIDED IN THE BY-LAWS. THE BY-LAWS

A. 5208--A                          9

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 BY-LAWS.
  S  8208.  RULES AND OPERATING PROCEDURES; RULE MAKING FUNCTIONS OF THE
COMMISSION AND OPTING OUT OF UNIFORM STANDARDS. (A) THE COMMISSION SHALL
PROMULGATE REASONABLE RULES, INCLUDING UNIFORM STANDARDS  AND  OPERATING
PROCEDURES, IN ORDER TO EFFECTIVELY AND EFFICIENTLY ACHIEVE THE PURPOSES
OF  THE COMPACT. NOTWITHSTANDING THE FOREGOING, IN THE EVENT THE COMMIS-
SION EXERCISES ITS RULE MAKING AUTHORITY IN A MANNER THAT IS BEYOND  THE
SCOPE  OF  THE  PURPOSES  OF THIS ARTICLE, OR THE POWERS GRANTED IN THIS
SECTION, THEN SUCH ACTION BY THE COMMISSION SHALL BE INVALID AND HAVE NO
FORCE AND EFFECT.
  (B) RULES AND OPERATING PROCEDURES SHALL BE MADE PURSUANT  TO  A  RULE
MAKING  PROCESS  THAT CONFORMS TO THE 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 COMMIS-
SION SHALL GIVE WRITTEN NOTICE TO THE RELEVANT STATE LEGISLATIVE COMMIT-
TEE  IN  EACH  COMPACTING  STATE RESPONSIBLE FOR INSURANCE ISSUES OF ITS
INTENTION TO ADOPT SUCH UNIFORM STANDARD. THE COMMISSION IN  ADOPTING  A
UNIFORM  STANDARD SHALL CONSIDER FULLY ALL SUBMITTED MATERIALS AND ISSUE
A CONCISE EXPLANATION OF ITS DECISION.
  (C) 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" 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  PROCE-
DURES,  AND  AMENDMENTS  THERETO,  SHALL BECOME EFFECTIVE AS OF THE DATE
SPECIFIED IN EACH RULE, OPERATING PROCEDURE OR AMENDMENT.
  (D) A COMPACTING STATE MAY OPT OUT OF A UNIFORM  STANDARD,  EITHER  BY
LEGISLATION  OR  REGULATION DULY PROMULGATED BY THE SUPERINTENDENT UNDER
THE STATE ADMINISTRATIVE PROCEDURE ACT. IF A COMPACTING STATE ELECTS  TO
OPT OUT OF A UNIFORM STANDARD BY REGULATION, IT MUST GIVE WRITTEN NOTICE
TO  THE  COMMISSION  NO  LATER  THAN TEN BUSINESS DAYS AFTER THE UNIFORM
STANDARD IS PROMULGATED OR AT THE TIME THE STATE  BECOMES  A  COMPACTING
STATE,  AND  FIND  THAT THE UNIFORM STANDARD DOES NOT PROVIDE REASONABLE
PROTECTIONS TO THE CITIZENS OF THE STATE GIVEN  THE  CONDITIONS  IN  THE
STATE.  THE  SUPERINTENDENT  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 SUPERINTENDENT MUST CONSIDER AND
BALANCE THE FOLLOWING FACTORS AND FIND THAT THE CONDITIONS IN THE  STATE
AND NEEDS OF THE CITIZENS OF THE STATE OUTWEIGH:
  (1)  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
  (2)  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 THE COMPACT, PROSPECTIVELY OPT OUT OF ALL UNIFORM STAN-
DARDS  INVOLVING  THE  LONG-TERM  CARE  INSURANCE  PRODUCTS BY EXPRESSLY
PROVIDING FOR SUCH OPT OUT IN THE ENACTED  COMPACT,  AND  SUCH  OPT  OUT
SHALL  NOT  BE TREATED AS A MATERIAL VARIANCE IN THE OFFER OR ACCEPTANCE
OF ANY STATE TO PARTICIPATE IN THE COMPACT. SUCH AN  OPT  OUT  SHALL  BE

A. 5208--A                         10

EFFECTIVE  AT  THE  TIME  OF  ENACTMENT OF THE COMPACT BY THE COMPACTING
STATE AND SHALL APPLY TO ALL EXISTING UNIFORM STANDARDS INVOLVING  LONG-
TERM CARE INSURANCE PRODUCTS AND THOSE SUBSEQUENTLY PROMULGATED.
  (E) IF A COMPACTING STATE ELECTS TO OPT OUT OF A UNIFORM STANDARD, THE
UNIFORM  STANDARD SHALL REMAIN APPLICABLE IN THE COMPACTING STATE ELECT-
ING TO OPT OUT UNTIL SUCH TIME THE OPT OUT LEGISLATION IS  ENACTED  INTO
LAW OR THE REGULATION IS PROMULGATED.
  (F)  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 STAND-
ARD HAS BEEN MADE EFFECTIVE IN THAT STATE, THE OPT OUT  SHALL  HAVE  THE
SAME  PROSPECTIVE  EFFECT  AS  PROVIDED UNDER SECTION EIGHT THOUSAND TWO
HUNDRED FIFTEEN OF THIS ARTICLE FOR WITHDRAWALS.
  (G) 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  HOWEVER,  A
STAY  MAY  NOT  BE  PERMITTED TO REMAIN IN EFFECT FOR MORE THAN ONE YEAR
UNLESS THE COMPACTING STATE CAN SHOW EXTRAORDINARY  CIRCUMSTANCES  WHICH
WARRANT  A  CONTINUANCE  OF  THE STAY INCLUDING, BUT NOT LIMITED TO, THE
EXISTENCE OF A LEGAL CHALLENGE WHICH PREVENTS THE COMPACTING STATE  FROM
OPTING  OUT. A STAY MAY BE TERMINATED BY THE COMMISSION UPON NOTICE THAT
THE RULE MAKING PROCESS HAS BEEN TERMINATED.
  (H) NOT LATER THAN THIRTY 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, HOWEVER, 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  PETI-
TIONER  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.
  S 8209. 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, INCLUD-
ING  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;

A. 5208--A                         11

PROVIDED  HOWEVER, THAT DISCLOSURE TO THE COMMISSION SHALL NOT BE DEEMED
TO WAIVE  OR  OTHERWISE  AFFECT  ANY  CONFIDENTIALITY  REQUIREMENT;  AND
PROVIDED  FURTHER  THAT,  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
ARTICLE, THE COMMISSION SHALL NOT BE SUBJECT TO THE LAWS OF ANY COMPACT-
ING  STATE  PERTAINING TO CONFIDENTIALITY AND NONDISCLOSURE WITH RESPECT
TO RECORDS, DATA AND INFORMATION IN ITS POSSESSION. CONFIDENTIAL  INFOR-
MATION  OF  THE COMMISSION SHALL REMAIN CONFIDENTIAL AFTER SUCH INFORMA-
TION IS PROVIDED TO ANY COMMISSIONER.
  (C) THE COMMISSION SHALL MONITOR COMPACTING STATES FOR COMPLIANCE WITH
DULY ADOPTED BY-LAWS, RULES, INCLUDING UNIFORM STANDARDS, AND  OPERATING
PROCEDURES.  THE  COMMISSION  SHALL  NOTIFY SUCH NONCOMPLYING COMPACTING
STATE IN WRITING OF ITS NONCOMPLIANCE WITH COMMISSION BY-LAWS, RULES  OR
OPERATING  PROCEDURES.  IF  THE  NONCOMPLYING  COMPACTING STATE FAILS TO
REMEDY SUCH 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 EIGHT THOUSAND TWO HUNDRED FIFTEEN 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 BY  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 BY THE COMMISSION,
THE  COMMISSION  OR  AN  AUTHORIZED COMMISSION OFFICER OR EMPLOYEE, MUST
AUTHORIZE THE ACTION. HOWEVER, AUTHORIZATION PURSUANT TO THIS  PARAGRAPH
DOES  NOT  REQUIRE  NOTICE  TO  THE  INSURER, OPPORTUNITY FOR HEARING OR
DISCLOSURE OF REQUESTS FOR AUTHORIZATION OR RECORDS OF THE  COMMISSION'S
ACTION ON SUCH REQUESTS.
  S  8210.  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 COMPACT-
ING  STATES, OR BETWEEN COMPACTING STATES AND NON-COMPACTING STATES, AND
THE COMMISSION SHALL PROMULGATE AN  OPERATING  PROCEDURE  PROVIDING  FOR
RESOLUTION OF SUCH DISPUTES.
  S  8211.  PRODUCT  FILING  AND  APPROVAL. (A) INSURERS AND THIRD-PARTY
FILERS SEEKING TO HAVE A PRODUCT APPROVED BY THE COMMISSION  SHALL  FILE
SUCH  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 SUCH 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 PROC-
ESSES AND PROCEDURES PURSUANT TO COMMISSION RULES AND  OPERATING  PROCE-
DURES.  NOTWITHSTANDING  ANY  PROVISION IN THIS SECTION TO THE CONTRARY,
THE COMMISSION SHALL PROMULGATE RULES TO ESTABLISH CONDITIONS AND PROCE-
DURES UNDER WHICH THE COMMISSION WILL PROVIDE PUBLIC ACCESS  TO  PRODUCT

A. 5208--A                         12

FILING  INFORMATION.  IN  ESTABLISHING  SUCH RULES, THE COMMISSION SHALL
CONSIDER THE INTERESTS OF THE PUBLIC IN HAVING ACCESS TO  SUCH  INFORMA-
TION,  AS  WELL AS PROTECTION OF PERSONAL MEDICAL AND FINANCIAL INFORMA-
TION  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.
  S 8212. REVIEW OF COMMISSION  DECISIONS  REGARDING  FILINGS.  (A)  NOT
LATER THAN THIRTY DAYS AFTER THE COMMISSION HAS GIVEN NOTICE OF A DISAP-
PROVED  PRODUCT  OR ADVERTISEMENT FILED WITH THE COMMISSION, THE INSURER
OR THIRD PARTY FILER WHOSE FILING WAS DISAPPROVED MAY APPEAL THE  DETER-
MINATION  TO  A REVIEW PANEL APPOINTED BY THE COMMISSION. THE COMMISSION
SHALL PROMULGATE RULES  TO  ESTABLISH  PROCEDURES  FOR  APPOINTING  SUCH
REVIEW  PANEL 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 LAW, IS  SUBJECT
TO  JUDICIAL  REVIEW  IN ACCORDANCE WITH SUBSECTION (E) OF SECTION EIGHT
THOUSAND TWO HUNDRED FOUR OF THIS ARTICLE.
  (B) THE COMMISSION SHALL HAVE AUTHORITY TO MONITOR, REVIEW AND  RECON-
SIDER  PRODUCTS AND ADVERTISEMENT SUBSEQUENT TO THEIR FILING OR APPROVAL
UPON A FINDING THAT THE PRODUCT DOES NOT MEET THE RELEVANT UNIFORM STAN-
DARD. WHERE APPROPRIATE, THE  COMMISSION  MAY  WITHDRAW  OR  MODIFY  ITS
APPROVAL  AFTER PROPER NOTICE AND HEARING, SUBJECT TO THE APPEAL PROCESS
SET FORTH IN SUBSECTION (A) OF THIS SECTION.
  S 8213. FINANCE. (A) THE COMMISSION  SHALL  PAY  OR  PROVIDE  FOR  THE
PAYMENT  OF  THE  REASONABLE EXPENSES OF ITS ESTABLISHMENT AND ORGANIZA-
TION. TO FUND THE COST OF ITS INITIAL  OPERATIONS,  THE  COMMISSION  MAY
ACCEPT  CONTRIBUTIONS AND OTHER FORMS OF FUNDING FROM THE NAIC, COMPACT-
ING 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
EIGHT THOUSAND TWO HUNDRED EIGHT 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 BY-LAWS. 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 SUCH INDEPENDENT AUDITOR SHALL INCLUDE A MANAGEMENT
AND PERFORMANCE AUDIT OF THE COMMISSION. THE COMMISSION  SHALL  MAKE  AN

A. 5208--A                         13

ANNUAL  REPORT TO THE GOVERNOR AND LEGISLATURE OF THE COMPACTING STATES,
WHICH SHALL INCLUDE A REPORT OF SUCH 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 INDE-
PENDENT 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.
  S 8214. 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
HOWEVER, THAT THE COMMISSION SHALL  BECOME  EFFECTIVE  FOR  PURPOSES  OF
ADOPTING  UNIFORM STANDARDS FOR REVIEWING, AND GIVING APPROVAL OR DISAP-
PROVAL 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 NAIC FOR THE PRIOR
YEAR.  THEREAFTER, IT SHALL BECOME EFFECTIVE AND BINDING AS TO ANY OTHER
COMPACTING STATE UPON ENACTMENT OF THE COMPACT INTO LAW BY THAT STATE.
  (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.
  S  8215.  WITHDRAWAL,  DEFAULT AND TERMINATION. (A)(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  SPECIF-
ICALLY 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 PROD-
UCT FILINGS APPROVED OR SELF-CERTIFIED, OR  ANY  ADVERTISEMENT  OF  SUCH
PRODUCTS, ON THE DATE THE REPEALING STATUTE BECOMES EFFECTIVE, EXCEPT BY
MUTUAL  AGREEMENT OF THE COMMISSION AND THE WITHDRAWING STATE UNLESS THE
APPROVAL IS RESCINDED BY THE WITHDRAWING STATE AS PROVIDED IN  PARAGRAPH
FIVE 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 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 PROSPEC-

A. 5208--A                         14

TIVE 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'S  LEGISLATION
REENACTING THE COMPACT.
  (B)  (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 BY-LAWS OR  DULY
PROMULGATED  RULES OR OPERATING PROCEDURES, THEN, AFTER NOTICE AND HEAR-
ING AS SET FORTH IN THE BY-LAWS, ALL  RIGHTS,  PRIVILEGES  AND  BENEFITS
CONFERRED BY THE 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 SUSPEN-
SION 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 THE COMPACT SHALL BE TERMINATED FROM THE EFFECTIVE
DATE OF TERMINATION.
  (2) PRODUCT APPROVALS BY THE  COMMISSION  OR  PRODUCT  SELF-CERTIFICA-
TIONS, 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 WITH-
DRAWN VOLUNTARILY UNDER THIS SECTION.
  (3)  REINSTATEMENT  FOLLOWING  TERMINATION  OF  ANY  COMPACTING  STATE
REQUIRES A REENACTMENT OF THE COMPACT BY THAT STATE.
  (C)(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 THE 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 BY-LAWS.
  S  8216.  SEVERABILITY  AND  CONSTRUCTION.  (A)  THE PROVISIONS OF THE
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 THE COMPACT  SHALL  BE  LIBERALLY  CONSTRUED  TO
EFFECTUATE ITS PURPOSES.
  S  8217. BINDING EFFECT OF COMPACT AND OTHER LAWS. (A) NOTHING IN THIS
SECTION PREVENTS THE ENFORCEMENT OF ANY OTHER LAW OF A COMPACTING STATE,
EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION.
  (B) FOR ANY PRODUCT APPROVED  OR  CERTIFIED  TO  THE  COMMISSION,  THE
RULES,  UNIFORM  STANDARDS  AND ANY OTHER REQUIREMENTS OF THE COMMISSION
SHALL CONSTITUTE THE EXCLUSIVE PROVISIONS  APPLICABLE  TO  THE  CONTENT,
APPROVAL  AND  CERTIFICATION OF SUCH PRODUCTS. FOR ADVERTISEMENT THAT IS
SUBJECT TO THE COMMISSION'S AUTHORITY, ANY  RULE,  UNIFORM  STANDARD  OR
OTHER  REQUIREMENT  OF  THE  COMMISSION WHICH GOVERNS THE CONTENT OF THE
ADVERTISEMENT SHALL CONSTITUTE THE EXCLUSIVE PROVISION  THAT  A  COMMIS-
SIONER  MAY  APPLY  TO THE CONTENT OF THE ADVERTISEMENT. NOTWITHSTANDING
THE FOREGOING, NO ACTION TAKEN  BY  THE  COMMISSION  SHALL  ABROGATE  OR
RESTRICT:

A. 5208--A                         15

  (1) THE ACCESS OF ANY PERSON TO STATE COURTS;
  (2)  REMEDIES AVAILABLE UNDER STATE LAW RELATED TO BREACH OF CONTRACT,
TORT OR OTHER LAWS NOT SPECIFICALLY DIRECTED TO THE CONTENT OF THE PROD-
UCT;
  (3) STATE LAW RELATING TO THE CONSTRUCTION OF INSURANCE CONTRACTS; OR
  (4) THE AUTHORITY OF THE ATTORNEY GENERAL OF THE STATE INCLUDING,  BUT
NOT  LIMITED TO, MAINTAINING ANY ACTIONS OR PROCEEDINGS AS AUTHORIZED BY
LAW.
  (C) ALL INSURANCE PRODUCTS  FILED  WITH  INDIVIDUAL  STATES  SHALL  BE
SUBJECT TO THE LAWS OF THOSE STATES.
  (D)  ALL  LAWFUL  ACTIONS  OF  THE COMMISSION, INCLUDING ALL RULES AND
OPERATING PROCEDURES PROMULGATED BY THE COMMISSION, ARE BINDING UPON THE
COMPACTING STATES.
  (E) ALL AGREEMENTS BETWEEN THE COMMISSION AND  THE  COMPACTING  STATES
ARE BINDING IN ACCORDANCE WITH THEIR TERMS.
  (F)  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 DISPUTED MEANING OR INTERPRETATION.
  (G) IN THE EVENT ANY PROVISION OF THIS ARTICLE EXCEEDS  THE  CONSTITU-
TIONAL  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 SUCH
COMPACTING STATE, AND SUCH OBLIGATIONS, DUTIES, POWERS  OR  JURISDICTION
SHALL REMAIN IN THE COMPACTING STATE AND SHALL BE EXERCISED BY THE AGEN-
CY THEREOF TO WHICH SUCH OBLIGATIONS, DUTIES, POWERS OR JURISDICTION ARE
DELEGATED BY LAW IN EFFECT AT THE TIME THE COMPACT BECOMES EFFECTIVE.
  S  8218. EXEMPT PRODUCTS. IN ACCORDANCE WITH THE PROVISIONS OF SECTION
EIGHTY-TWO HUNDRED FOUR OF THE INTERSTATE INSURANCE  PRODUCT  REGULATION
COMPACT,  THE STATE OF NEW YORK OPTS OUT OF ALL EXISTING AND PROSPECTIVE
UNIFORM STANDARDS INVOLVING LONG-TERM CARE INSURANCE  PRODUCTS  AND  ALL
EXISTING  UNIFORM STANDARDS, INCLUDING ANY AMENDMENTS THERETO, INVOLVING
ANNUITY PRODUCTS OR DISABILITY INCOME INSURANCE  PRODUCTS  IN  ORDER  TO
PRESERVE  THE  STATE'S  STATUTORY REQUIREMENTS GOVERNING THESE INSURANCE
PRODUCTS. THE DEPARTMENT OF FINANCIAL SERVICES IS AUTHORIZED  AND  SHALL
BY  AUTHORITY HEREIN PROMULGATE REGULATIONS TO OPT OUT OF FUTURE UNIFORM
STANDARDS INVOLVING ANNUITY  PRODUCTS  OR  DISABILITY  INCOME  INSURANCE
PRODUCTS.
  S 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law.