AB542: Bill Text

AB542,22,19 (b) Except as to privileged records, data, and information, the laws of any compacting state pertaining to confidentiality or nondisclosure may not relieve any compacting state commissioner of the duty to disclose any relevant records, data, or information to the commission; provided, that disclosure to the commission shall not be deemed to waive or otherwise affect any confidentiality requirement; and provided further, that, except as otherwise expressly provided in this section, the commission shall not be subject to the compacting state's laws pertaining to confidentiality and nondisclosure with respect to records, data, and information in its possession. Confidential information of the commission shall remain confidential after such information is provided to any commissioner.

AB542,23,2 (c) The commission shall monitor compacting states for compliance with duly adopted bylaws, rules, including uniform standards, and operating procedures. The commission shall notify any noncomplying compacting state in writing of its noncompliance with commission bylaws, rules, or operating procedures. If a noncomplying compacting state fails to remedy its noncompliance within the time specified in the notice of noncompliance, the compacting state shall be deemed to be in default under sub. (14).

AB542,23,7 (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:

AB542,23,13 1. With respect to the commissioner's market regulation of a product or advertisement that is approved by or certified to the commission, the content of the product or advertisement shall not constitute a violation of the provisions, standards, or requirements of the compact except upon a final order of the commission, issued at the request of a commissioner after prior notice to the insurer and an opportunity for hearing before the commission.

AB542,23,20 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 by or certified to the commission, the commission, or an authorized commission officer or employee, must authorize the action. However, authorization pursuant to this subdivision does not require notice to the insurer, opportunity for hearing, or disclosure of requests for authorization or records of the commission's action on such requests.

AB542,23,25 (9) Article IX - Dispute Resolution. The commission shall attempt, upon the request of a member, to resolve any disputes or other issues that are subject to this compact and that may arise between 2 or more compacting states, or between compacting states and noncompacting states, and the commission shall promulgate an operating procedure providing for resolution of such disputes.

AB542,24,7 (10) Article X - Product Filing and Approval. (a) Insurers and 3rd-party filers seeking to have a product approved by the commission shall file the product with, and pay applicable filing fees to, the commission. Nothing in this section shall be construed to restrict or otherwise prevent an insurer from filing its product with the insurance department in any state wherein the insurer is licensed to conduct the business of insurance, and such filing shall be subject to the laws of the states where filed.

AB542,24,16 (b) The commission shall establish appropriate filing and review processes and procedures pursuant to commission rules and operating procedures. Notwithstanding any provision herein to the contrary, the commission shall promulgate rules to establish conditions and procedures under which the commission will provide public access to product filing information. In establishing such rules, the commission shall consider the interests of the public in having access to such information, as well as protection of personal medical and financial information and trade secrets, that may be contained in a product filing or supporting information.

AB542,24,18 (c) Any product approved by the commission may be sold or otherwise issued in those compacting states for which the insurer is legally authorized to do business.

AB542,25,3 (11) Article XI - Review of Commission Decisions Regarding Filings. (a) Not later than 30 days after the commission has given notice of a disapproved product or advertisement filed with the commission, the insurer or 3rd-party filer whose filing was disapproved may appeal the determination to a review panel appointed by the commission. The commission shall promulgate rules to establish procedures for appointing such review panels and provide for notice and hearing. An allegation that the commission, in disapproving a product or advertisement filed with the commission, acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise not in accordance with the law, is subject to judicial review in accordance with sub. (3).

AB542,25,8 (b) The commission shall have authority to monitor, review, and reconsider products and advertisement subsequent to their filing or approval upon a finding that the product does not meet the relevant uniform standard. Where appropriate, the commission may withdraw or modify its approval after proper notice and hearing, subject to the appeal process in par. (a).

AB542,25,15 (12) Article XII - Finance. (a) The commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations, the commission may accept contributions and other forms of funding from the National Association of Insurance Commissioners, compacting states, and other sources. Contributions and other forms of funding from other sources shall be of such a nature that the independence of the commission concerning the performance of its duties shall not be compromised.

AB542,25,19 (b) The commission shall collect a filing fee from each insurer and 3rd-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.

AB542,25,21 (c) The commission's budget for a fiscal year may not be approved until it has been subject to notice and comment as set forth in sub. (7).

AB542,25,23 (d) The commission shall be exempt from all taxation in and by the compacting states.

AB542,25,25 (e) The commission may not pledge the credit of any compacting state, except by and with the appropriate legal authority of that compacting state.

AB542,26,16 (f) The commission shall keep complete and accurate accounts of all its internal receipts, including grants and donations, and disbursements of all funds under its control. The internal financial accounts of the commission shall be subject to the accounting procedures established under its bylaws. The financial accounts and reports including the system of internal controls and procedures of the commission shall be audited annually by an independent certified public accountant. Upon the determination of the commission, but no less frequently than every 3 years, the review of the independent auditor shall include a management and performance audit of the commission. The commission shall make an annual report to the governor and legislature of each of the compacting states, which shall include a report of the independent audit. The commission's internal accounts shall not be confidential and such materials may be shared with the commissioner of any compacting state upon request; provided, that any work papers related to any internal or independent audit and any information regarding the privacy of individuals and insurers' proprietary information, including trade secrets, shall remain confidential.

AB542,26,19 (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.

AB542,26,21 (13) Article XIII - Compacting States, Effective Date, and Amendment. (a) Any state is eligible to become a compacting state.

AB542,27,7 (b) The compact shall become effective and binding upon legislative enactment of the compact into law by 2 compacting states; provided, that the commission shall become effective for purposes of adopting uniform standards for, reviewing, and giving approval or disapproval of, products filed with the commission that satisfy applicable uniform standards only after 26 states are compacting states or, alternatively, only after states representing greater than 40 percent of the premium volume for life insurance, annuity, disability income, and long-term care insurance products, based on records of the National Association of Insurance Commissioners for the prior year, are compacting states. Thereafter, it shall become effective and binding as to any other compacting state upon enactment of the compact into law by that state.

AB542,27,11 (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.

AB542,27,16 (14) Article XIV - Withdrawal, Default, and Termination. (a) Once effective, the compact shall continue in force and remain binding upon each and every compacting state; provided, that a compacting state may withdraw from the compact ("withdrawing state") by enacting a statute specifically repealing the statute that enacted the compact into law.

AB542,27,21 (b) The effective date of withdrawal is the effective date of the repealing statute. The withdrawal shall not apply to any product filings approved or self-certified, or any advertisement of such products, on the date the repealing statute becomes effective, except by mutual agreement of the commission and the withdrawing state, unless the approval is rescinded by the withdrawing state as provided in par. (e).

AB542,27,24 (c) The commissioner of the withdrawing state shall immediately notify the management committee in writing upon the introduction of legislation repealing this compact in the withdrawing state.

AB542,28,2 (d) The commission shall notify the other compacting states of the introduction of such legislation within 10 days after its receipt of notice thereof.

AB542,28,12 (e) The withdrawing state is responsible for all obligations, duties, and liabilities incurred through the effective date of withdrawal, including any obligations, the performance of which extend beyond the effective date of withdrawal, except to the extent those obligations may have been released or relinquished by mutual agreement of the commission and the withdrawing state. The commission's approval of products and advertisement prior to the effective date of withdrawal shall continue to be effective and be given full force and effect in the withdrawing state, unless formally rescinded by the withdrawing state in the same manner as provided by the laws of the withdrawing state for the prospective disapproval of products or advertisement previously approved under state law.

AB542,28,14 (f) Reinstatement following withdrawal of any compacting state shall occur upon the effective date of the withdrawing state reenacting the compact.

AB542,29,4 (g) If the commission determines that any compacting state has at any time defaulted ("defaulting state") in the performance of any of its obligations or responsibilities under this compact, the bylaws, or duly promulgated rules or operating procedures, then, after notice and hearing as set forth in the bylaws, all rights, privileges, and benefits conferred by this compact on the defaulting state shall be suspended from the effective date of default as fixed by the commission. The grounds for default include, but are not limited to, failure of a compacting state to perform its obligations or responsibilities and any other grounds designated in commission rules. The commission shall immediately notify the defaulting state in writing of the defaulting state's suspension pending a cure of the default. The commission shall stipulate the conditions and the time period within which the defaulting state must cure its default. If the defaulting state fails to cure the default within the time period specified by the commission, the defaulting state shall be terminated from the compact and all rights, privileges, and benefits conferred by this compact shall be terminated from the effective date of termination.

AB542,29,8 (h) Product approvals by the commission or product self-certifications, or any advertisement in connection with such product, that are in force on the effective date of termination shall remain in force in the defaulting state in the same manner as if the defaulting state had withdrawn voluntarily under par. (a).

AB542,29,10 (i) Reinstatement following termination of any compacting state requires a reenactment of the compact.

AB542,29,13 (j) The compact dissolves effective upon the date of the withdrawal or default of the compacting state that reduces membership in the compact to one compacting state.

AB542,29,17 (k) Upon the dissolution of this compact, the compact becomes null and void and shall be of no further force or effect, and the business and affairs of the commission shall be wound up and any surplus funds shall be distributed in accordance with the bylaws.

AB542,29,20 (15) Article XV - Severability and Construction. (a) The provisions of this compact shall be severable; and if any phrase, clause, sentence, or provision is deemed unenforceable, the remaining provisions of the compact shall be enforceable.

AB542,29,22 (b) The provisions of this compact shall be liberally construed to effectuate its purposes.

AB542,29,25 (16) Article XVI - Binding Effect of Compact and Other Laws. (a) Nothing herein prevents the enforcement of any other law of a compacting state, except as provided in par. (b).

AB542,30,8 (b) For any product approved by 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 that governs the content of the advertisement shall constitute the exclusive provision that a commissioner may apply to the content of the advertisement. Notwithstanding the foregoing, no action taken by the commission shall abrogate or restrict any of the following:

AB542,30,9 1. The access of any person to state courts.

AB542,30,11 2. Remedies available under state law related to breach of contract, tort, or other laws not specifically directed to the content of the product.

AB542,30,12 3. State law relating to the construction of insurance contracts.

AB542,30,15 4. The authority of the secretary of agriculture, trade and consumer protection or the attorney general of the state, including, but not limited to, maintaining any actions or proceedings, as authorized by law.

AB542,30,17 (c) All insurance products filed with individual states shall be subject to the laws of those states.

AB542,30,24 (d) All lawful actions of the commission, including all rules and operating procedures promulgated by the commission, are binding upon the compacting states. All agreements between the commission and the compacting states are binding in accordance with their terms. Upon the request of a party to a conflict over the meaning or interpretation of commission actions, and upon a majority vote of the compacting states, the commission may issue advisory opinions regarding the meaning or interpretation in dispute.

AB542,31,7 (e) In the event any provision of this compact exceeds the constitutional limits imposed on the legislature of any compacting state, the obligations, duties, powers, or jurisdiction sought to be conferred by that provision upon the commission shall be ineffective as to that compacting state, and such obligations, duties, powers, or jurisdiction shall remain in the compacting state and shall be exercised by the agency thereof to which such obligations, duties, powers, or jurisdiction are delegated by law in effect at the time this compact becomes effective.

AB542, s. 5 Section 5. 605.03 (1) (a) of the statutes is amended to read:

AB542,31,12 605.03 (1) (a) Mandatory coverage. The property fund shall provide protection against fire and extended coverage perils. The coverage shall be at least as favorable as that customarily provided by policies approved by filed with the commissioner for the use of private insurers in insuring comparable property.

AB542, s. 6 Section 6. 607.02 (1) of the statutes is amended to read:

AB542,31,19 607.02 (1) Types of policies permitted. Subject to sub. (2), the life fund may issue to any resident of the state any kind of life insurance with any riders or endorsements thereto that would be filed with the commissioner would approve for issuance by private insurers authorized to do a life insurance business in this state. Coverages may be combined and granted in the same policy by the life fund to the same extent as by a private life insurer.

AB542, s. 7 Section 7. 612.51 (1) of the statutes is repealed.

AB542, s. 8 Section 8. 628.347 (title) of the statutes is amended to read:

AB542,31,22 628.347 (title) Suitability of annuity sales to senior consumers.

AB542, s. 9 Section 9. 628.347 (1) (b) of the statutes is amended to read:

AB542,32,2 628.347 (1) (b) "Recommendation" means advice provided by an insurance intermediary, or an insurer if no intermediary is involved, to an individual senior consumer that results in the purchase or exchange of an annuity in accordance with that advice.

AB542, s. 10 Section 10. 628.347 (1) (c) of the statutes is repealed.

AB542, s. 11 Section 11. 628.347 (2) (a) of the statutes is amended to read:

AB542,32,11 628.347 (2) (a) Except as provided in par. (c), an insurance intermediary, or insurer if no intermediary is involved, may not recommend to a senior consumer the purchase or exchange of an annuity if the recommendation results in an insurance transaction or series of insurance transactions unless the intermediary or insurer has reasonable grounds to believe that the recommendation is suitable for the senior consumer on the basis of facts disclosed by the senior consumer as to his or her investments, other insurance products, and financial situation and needs.

AB542, s. 12 Section 12. 628.347 (2) (b) 1. of the statutes is amended to read:

AB542,32,13 628.347 (2) (b) 1. The senior consumer's financial status.

AB542, s. 13 Section 13. 628.347 (2) (b) 2. of the statutes is amended to read:

AB542,32,15 628.347 (2) (b) 2. The senior consumer's tax status.

AB542, s. 14 Section 14. 628.347 (2) (b) 3. of the statutes is amended to read:

AB542,32,17 628.347 (2) (b) 3. The senior consumer's investment objectives.

AB542, s. 15 Section 15. 628.347 (2) (b) 4. of the statutes is amended to read:

AB542,32,20 628.347 (2) (b) 4. Any other information that is reasonably appropriate for determining the suitability of a recommendation to the senior consumer.

AB542, s. 16 Section 16. 628.347 (2) (c) (intro.) of the statutes is amended to read:

AB542,32,24 628.347 (2) (c) (intro.) An insurance intermediary, or insurer if no intermediary is involved, has no obligation under par. (a) to a senior consumer related to a recommendation if the senior consumer does any of the following:

AB542, s. 17 Section 17. 628.347 (3) (f) 2. of the statutes is amended to read:

AB542,33,3 628.347 (3) (f) 2. Include in its system of supervision an insurance intermediary's recommendations made to senior consumers of products other than annuities offered by the insurer, general agent, or independent agency.

AB542, s. 18 Section 18. 628.347 (5) (a) of the statutes is amended to read:

AB542,33,7 628.347 (5) (a) Order an insurer to take reasonably appropriate corrective action for any senior consumer harmed by a violation of this section by the insurer or the insurer's insurance intermediary.

AB542, s. 19 Section 19. 628.347 (5) (b) of the statutes is amended to read:

AB542,33,11 628.347 (5) (b) Order an insurance intermediary to take reasonably appropriate corrective action for any senior consumer harmed by a violation of this section by the insurance intermediary.

AB542, s. 20 Section 20. 628.347 (5) (c) of the statutes is amended to read:

AB542,33,16 628.347 (5) (c) Order a general agent or independent agency that employs or contracts with an insurance intermediary to sell, or solicit the sale of, annuities to senior consumers to take reasonably appropriate corrective action for any senior consumer harmed by a violation of this section by the insurance intermediary.

AB542, s. 21 Section 21. 628.347 (6) (b) of the statutes is amended to read:

AB542,33,21 628.347 (6) (b) A penalty under par. (a) for a violation of sub. (2) (a), (b), or (d), including a forfeiture, may be reduced or eliminated to the extent provided by rule of the commissioner if corrective action is taken for the senior consumer promptly after the violation is discovered.

AB542, s. 22 Section 22. 628.347 (6) (c) of the statutes is amended to read:

AB542,34,2 628.347 (6) (c) The commissioner may promulgate rules related to the reduction or elimination of penalties for violations of this section on the basis of prompt action taken to correct any harm caused to senior consumers by the violations.

AB542, s. 23 Section 23. 628.347 (7) of the statutes is amended to read:

AB542,34,11 628.347 (7) Record keeping. An insurer and an insurance intermediary, including a general agent and an independent agency, shall maintain, or be able to make available to the commissioner, records of the information collected from a senior consumer and other information used in making a recommendation that was the basis for an insurance transaction for 6 years after the insurance transaction is completed by the insurer, except as otherwise permitted by the commissioner by rule. An insurer may, but is not required to, maintain records on behalf of an insurance intermediary, including a general agent and an independent agency.

AB542, s. 24 Section 24. 628.347 (8) (a) of the statutes is amended to read:

AB542,34,14 628.347 (8) (a) Direct response solicitations in which no recommendation is made based on information collected from the senior consumer.

AB542, s. 25 Section 25. 631.01 (4m) of the statutes is amended to read:

AB542,34,19 631.01 (4m) Rustproofing warranties insurance. An insurer issuing a policy of insurance to cover a warranty, as defined in s. 100.205 (1) (g), shall comply with s. 632.18 and the policy shall be on a form approved by the commissioner under s. 631.20.

AB542, s. 26 Section 26. 631.20 (1) (a) of the statutes is amended to read:

AB542,35,2 631.20 (1) (a) No form subject to s. 631.01 (1), except as exempted under par. (c), sub. (1g), or s. 631.01 (2) to (5) or by rule under par. (b), may be used unless it has been filed with and approved by the commissioner and unless the insurer certifies that the form complies with chs. 600 to 655 and rules promulgated under chs. 600 to 655. It is deemed approved if it is not disapproved within 30 days after filing, or within a 30-day extension of that period ordered by the commissioner prior to the expiration of the first 30 days.

AB542, s. 27 Section 27. 631.20 (1) (c) of the statutes is created to read:

AB542,35,6 631.20 (1) (c) Subject to sub. (1m), a form first used and not already filed under par. (a) on or after the effective date of this paragraph .... [revisor inserts date], is exempt from par. (a) except for any of the following:

AB542,35,7 1. A form subject to s. 655.24 (1).

AB542,35,8 2. A form for a worker's compensation policy.