,,ii ,calendar ,no4 #aea #aacth ,,congress #ast ,session ,s4 #ecd ,report ,no4 #aac-hb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #ab1 #bjac ,mr4 ,tester 7for himself1 ,mr4 ,johanns1 ,mr4 ,bennet1 ,mr4 ,crapo1 ,mr4 ,murphy1 ,mr4 ,chambliss1 ,mr4 ,warner1 ,ms4 ,heitkamp1 ,mr4 ,wicker1 ,mr4 ,carper1 ,mr4 ,moran1 ,mr4 ,menendez1 ,mr4 ,nelson1 ,mr4 ,heller1 ,mr4 ,blunt1 ,mr4 ,udall of ,colorado1 ,mr4 ,baucus1 ,mrs4 ,shaheen1 ,mr4 ,harkin1 ,mr4 ,thune1 ,mr4 ,brown1 ,mr4 ,coons1 ,ms4 ,ayotte1 and ,ms4 ,klobuchar7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,july #bi1 #bjac ,reported by ,mr4 ,johnson of ,south ,dakota1 with an amendment ,strike out all after the enacting clause and insert the part printed in italic ,a ,,bill ,to reform the ,national ,association of ,registered ,agents and ,brokers1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjac4 #b4 ,reestablishment of the ,national ,association of ,registered ,agents and ,brokers 7a7 ,in general ,subtitle ,c of title ,,iii of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #fgea et seq47 is amended to read as follows3 ,c ,national ,association of ,registered ,agents and ,brokers #cba4 ,national ,association of ,registered ,agents and ,brokers 7a7 ,establishment ,there is established the ,national ,association of ,registered ,agents and ,brokers 7hereafter in this subtitle referred to as the ,association74 7b7 ,status ,the ,association shall-- 7#a7 be a nonprofit corporation2 7#b7 have succession until dissolved by an ,act of ,congress2 7#c7 not be an agent or instrumentality of the ,united ,states ,government2 and 7#d7 except as otherwise provided in this subtitle1 be subject to1 and have all the powers conferred upon1 a nonprofit corporation by the ,district of ,columbia ,nonprofit ,corporation ,act 7,d4,c4 ,code1 sec4 #bi-cja4ja et seq474 7c7 ,effective date ,the provisions of this subtitle shall take effect upon the expiration of the #bd-month period beginning on the date of enactment of the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjac4 ,notwithstanding the effective date1 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 date4 #cbb4 ,purpose ,the purpose of the ,association shall be to provide a mechanism through which licensing1 continuing education1 and other nonresident insurance producer qualification requirements and conditions may be adopted and applied on a multi-state basis without affecting the laws1 rules1 and regulations1 and preserving the rights of a ,state1 pertaining to-- 7#a7 licensing1 continuing education1 and other qualification requirements of insurance producers who are not members of the ,association2 7#b7 resident or nonresident insurance producer appointment requirements2 7#c7 supervising and disciplining resident and nonresident insurance producers2 7#d7 establishing licensing fees for resident and nonresident insurance producers so that there is no loss of insurance producer licensing revenue to the ,state2 and 7#e7 prescribing and enforcing laws and regulations regulating the conduct of resident and nonresident insurance producers4 #cbc4 ,membership 7a7 ,eligibility 7#a7 ,in general ,any insurance producer licensed in its home ,state shall1 subject to paragraphs 7#b7 and 7#d71 be eligible to become a member of the ,association4 7#b7 ,ineligibility for suspension or revocation of license ,subject to paragraph 7#c71 an insurance producer is not eligible to become a member of the ,association if a ,state insurance regulator has suspended or revoked the insurance license of the insurance producer in that ,state4 7#c7 ,resumption of eligibility ,paragraph 7#b7 shall cease to apply to any insurance producer if-- 7,a7 the ,state insurance regulator reissues or renews the license of the insurance producer in the ,state in which the license was suspended or revoked1 or otherwise terminates or vacates the suspension or revocation2 or 7,b7 the suspension or revocation expires or is subsequently overturned by a court of competent jurisdiction4 7#d7 ,criminal background record check required 7,a7 ,in general ,an insurance producer shall not be eligible to become a member of the ,association unless the insurance producer has undergone a national criminal background record check of its ,federal ,bureau of ,investigation identification record that complies with regulations prescribed by the ,attorney ,general under subparagraph 7,l74 7,b7 ,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 #b-year period preceding the date of submission of an application to become a member of the ,association1 in compliance with such requirements as a condition for such licensure1 shall be deemed to have undergone a national criminal background record check for purposes of subparagraph 7,a74 7,c7 ,criminal background record check requested by ,association 7i7 ,in general ,the ,association shall1 upon request by an insurance producer licensed in a ,state1 submit identification information obtained from the insurance producer1 and a request for a national criminal background record check of the insurance producer1 to the ,federal ,bureau of ,investigation4 7ii7 ,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 information1 including the establishment of reasonable fees required to perform a criminal background record check and appropriate safeguards for maintaining confidentiality and security of the information4 7,d7 ,form of request ,a submission under subparagraph 7,c77i7 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 information4 7,e7 ,provision of information by ,attorney ,general ,upon receiving a submission under subparagraph 7,c77ii7 from the ,association1 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 7,d7 and provide all information contained in the records that pertains to the request to the ,association4 7,f7 ,limitation on permissible uses of information ,the ,association may use information provided under subparagraph 7,e7 only-- 7i7 for purposes of determining compliance with membership criteria established by the ,association2 or 7ii7 to disclose to ,state insurance regulators1 or ,federal or ,state law enforcement agencies1 in conformance with applicable law4 7,g7 ,applicant access to criminal history records ,notwithstanding subparagraph 7,f71 an insurance producer shall have the right to obtain from the ,association a copy of any criminal history record information concerning the insurance producer that is provided to the ,association under subparagraph 7,e74 7,h7 ,penalty for improper use or disclosure ,whoever knowingly uses any information provided under subparagraph 7,e7 for a purpose not authorized in subparagraph 7,f71 or discloses any such information to anyone not authorized to receive it1 shall be fined under title #ah1 ,united ,states ,code1 imprisoned for not more than #b years1 or both4 7,i7 ,reliance on information ,neither the ,association nor any of its directors1 officers1 or employees shall be liable in any action for using information provided under subparagraph 7,e7 as permitted under subparagraph 7,f7 in good faith and in reasonable reliance on its accuracy4 7,j7 ,fees ,the ,attorney ,general may charge a reasonable fee to defray the expense of conducting the search and providing the information under subparagraph 7,e71 and any such fee shall be collected and remitted by the ,association4 7,k7 ,rule of construction ,nothing in this paragraph shall be construed as-- 7i7 requiring a ,state insurance regulator to perform criminal background checks under this section2 or 7ii7 limiting any other authority that allows access to criminal background records4 7,l7 ,regulations ,the ,attorney ,general shall prescribe regulations to carry out this paragraph1 which shall include-- 7i7 appropriate protections for ensuring the confidentiality of information provided under subparagraph 7,e72 and 7ii7 procedures providing a reasonable opportunity for an insurance producer to contest the accuracy of information regarding the insurance producer provided under subparagraph 7,e74 7,m7 ,ineligibility for membership 7i7 ,in general ,the ,association may1 under reasonably consistently applied standards1 deny membership to an insurance producer on the basis of criminal history information provided under subparagraph 7,e71 or where the insurance producer has been subject to disciplinary action1 as described in paragraph 7#b74 7ii7 ,rights of applicants denied membership ,the ,association shall notify any insurance producer who is denied membership on the basis of criminal history record information provided under subparagraph 7,e7 of the right of the insurance producer to-- 7,i7 obtain a copy of all criminal history record information provided to the ,association under subparagraph 7,e7 with respect to the insurance producer2 and 7,,ii7 challenge the accuracy and completeness of the information4 7b7 ,authority ,to establish membership criteria ,the ,association may establish membership criteria that bear a reasonable relationship to the purposes for which the ,association was established4 7c7 ,establishment of classes and categories of membership 7#a7 ,classes of membership ,the ,association may establish separate classes of membership1 with separate criteria1 if the ,association reasonably determines that performance of different duties requires different levels of education1 training1 experience1 or other qualifications4 7#b7 ,business entities ,the ,association shall establish a class of membership and membership criteria for business entities4 ,a business entity that applies for membership shall be required to designate an individual ,association member responsible for the compliance of the business entity with ,association rules and the insurance laws1 rules1 and regulations of any ,state in which the business entity seeks to do business on the basis of ,association membership4 7#c7 ,categories 7,a7 ,separate categories for insurance producers permitted ,the ,association may establish separate categories of membership for insurance producers and for other persons within each class1 based on the types of licensing categories that exist under ,state laws4 7,b7 ,separate treatment for depository institutions prohibited ,no special categories of membership1 and no distinct membership criteria1 shall be established for members which are depository institutions or for employees1 agents1 or affiliates of depository institutions4 7d7 ,membership criteria 7#a7 ,in general ,the ,association may establish criteria for membership which shall include standards for personal qualifications1 education1 training1 and experience4 ,the ,association shall not establish criteria that unfairly limit the ability of a small insurance producer to become a member of the ,association1 including imposing discriminatory membership fees4 7#b7 ,qualifications ,in establishing criteria under paragraph 7#a71 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 #bjac1 and shall consider the highest levels of insurance producer qualifications established under the licensing laws of the ,states4 7#c7 ,assistance from ,states 7,a7 ,in general ,the ,association may request a ,state to provide assistance in investigating and evaluating the eligibility of a prospective member for membership in the ,association4 7,b7 ,rule of construction ,subparagraph 7,a7 shall not be construed as requiring or authorizing any ,state to adopt new or additional requirements concerning the licensing or evaluation of insurance producers4 7#d7 ,denial of membership ,the ,association may1 based on reasonably consistently applied standards1 deny membership to any ,state-licensed insurance producer for failure to meet the membership criteria established by the ,association4 7e7 ,effect of membership 7#a7 ,authority of association members ,membership in the ,association shall-- 7,a7 authorize an insurance producer to sell1 solicit1 or negotiate insurance in any ,state for which the member pays the licensing fee set by the ,state for any line or lines of insurance specified in the home ,state license of the insurance producer1 and exercise all such incidental powers as shall be necessary to carry out such activities1 including claims adjustments and settlement to the extent permissible under the laws of the ,state1 risk management1 employee benefits advice1 retirement planning1 and any other insurance-related consulting activities2 7,b7 be the equivalent of a nonresident insurance producer license for purposes of authorizing the insurance producer to engage in the activities described in subparagraph 7,a7 in any ,state where the member pays the licensing fee2 and 7,c7 be the equivalent of a nonresident insurance producer license for the purpose of subjecting an insurance producer to all laws1 regulations1 provisions or other action of any ,state concerning revocation1 suspension1 or other enforcement action related to the ability of a member to engage in any activity within the scope of authority granted under this subsection and to all ,state laws1 regulations1 provisions1 and actions preserved under paragraph 7#e74 7#b7 ,violent ,crime ,control and ,law ,enforcement ,act of #aiid ,nothing in this subtitle shall be construed to alter1 modify1 or supercede any requirement established by section #ajcc of title #ah1 ,united ,states ,code4 7#c7 ,agent for remitting fees ,the ,association shall act as an agent for any member for purposes of remitting licensing fees to any ,state pursuant to paragraph 7#a74 7#d7 ,regulator notification 7,a7 ,in general ,the ,association shall notify the ,states and ,national ,association of ,insurance ,commissioners 7hereinafter referred to in this subtitle as ,,naic7 or its designee when an insurance producer has satisfied the membership criteria of this section4 ,the ,states and ,,naic or its designee shall have#aj business days after the notification to provide the ,association with evidence that the insurance producer does not satisfy the criteria for membership for consideration by the ,association in its final membership determination4 7,b7 ,ongoing disclosures required ,on an ongoing basis1 the ,association shall disclose to the ,states and ,,naic or its designee the ,states in which each member is authorized to operate4 ,the ,association shall immediately notify the ,states and ,,naic or its designee when a member is newly authorized to operate in one or more ,states1 or is no longer authorized to operate in one or more ,states on the basis of ,association membership4 7#e7 ,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 law1 regulation1 provision1 or other action of any ,state1 including any law1 regulation1 provision1 or other action that-- 7,a7 regulates market conduct1 insurance producer conduct1 or unfair trade practices2 7,b7 establishes consumer protections2 or 7,c7 requires insurance producers to be appointed by a licensed or authorized insurer1 to the extent that the law1 regulation1 provision1 or other action is not inconsistent with the provisions of this subtitle related to market entry for nonresident insurance producers1 and then only to the extent of the inconsistency4 7f7 ,biennial renewal ,membership in the ,association shall be renewed on a biennial basis4 7g7 ,continuing education 7#a7 ,in general ,the ,association shall establish1 as a condition of membership1 continuing education requirements which shall be comparable to the continuing education requirements under the licensing laws of a majority of the ,states4 7#b7 ,state continuing education requirements ,a member may not be required to satisfy continuing education requirements imposed under the laws1 regulations1 provisions1 or actions of any ,state other than the home ,state of the member4 7#c7 ,reciprocity ,the ,association shall not require a member to satisfy continuing education requirements that are equivalent to any continuing education requirements of the home ,state of the member that have been satisfied by the member during the applicable licensing period4 7#d7 ,limitation on ,association ,the ,association shall not directly or indirectly offer any continuing education courses for insurance producers4 7h7 ,probation1 suspension and revocation 7#a7 ,disciplinary action ,the ,association may place an insurance producer that is a member of the ,association on probation or suspend or revoke the membership of the insurance producer in the ,association1 or assess monetary fines or penalties1 as the ,association determines to be appropriate1 if-- 7,a7 the insurance producer fails to meet the applicable membership criteria or other rules of the ,association2 7,b7 the insurance producer has been subject to disciplinary action pursuant to a final adjudicatory proceeding under the jurisdiction of a ,state insurance regulator2 7,c7 an insurance license held by the insurance producer has been suspended or revoked by a ,state insurance regulator2 or 7,d7 the insurance producer has been convicted of a crime that would have resulted in the denial of membership pursuant to subsection 7a77#d77,m77i7 at the time of application and the ,association has received a copy of the final disposition from a court of competent jurisdiction4 7#b7 ,violations of ,association rules ,the ,association shall have the power to investigate alleged violations of ,association rules4 7#c7 ,reporting ,the ,association shall immediately notify ,,naic or its designee when the membership of an insurance producer has been placed on probation or has been suspended1 revoked1 or otherwise terminated1 or when the ,association has assessed monetary fines or penalties4 7i7 ,consumer complaints 7#a7 ,in general ,the ,association shall-- 7,a7 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 and1 when appropriate1 to any additional ,state insurance regulator1 as determined by rules adopted by the ,association2 and 7,b7 make any related records and information available to ,,naic or its designee and to each ,state insurance regulator to whom the complaint is forwarded4 7#b7 ,telephone and other access ,the ,association shall maintain a toll-free number for purposes of this subsection and1 as practicable1 other alternative means of communication with consumers1 such as an ,internet webpage4 7#c7 ,final disposition of investigation ,state insurance regulators shall provide the ,association with information regarding the final disposition of a complaint referred pursuant to paragraph 7#a77;,a71 but nothing shall be construed to compel a ,state to release confidential investigation reports or other information protected by ,state law to the ,association4 7j7 ,information sharing ,the ,association may share documents1 materials1 or other information1 including confidential and privileged documents1 with a ,state1 ,federal1 or international regulatory agency or enforcement authority1 or with ,,naic or its designee1 provided that the recipient has the authority and agrees to maintain the confidentiality or privileged status of the document1 material1 or other information4 #cbd4 ,board of directors 7a7 ,establishment ,there is established the board of directors of the ,association 7hereafter in this subtitle referred to as the ,board71 which shall have authority to govern and supervise all activities of the ,association4 7b7 ,powers ,the ,board shall have such of the powers and authority of the ,association as may be specified in the bylaws of the ,association4 7c7 ,composition 7#a7 ,in general ,the ,board shall consist of #ac members who shall be appointed by the ,president1 by and with the advice and consent of the ,senate1 of whom-- 7,a7 #h shall be ,state insurance commissioners appointed in the manner provided in paragraph 7#b72 7,b7 #b shall be representatives of property and casualty insurance producers2 7,c7 #a shall be a representative of life or health insurance producers2 7,d7 #a shall be a representative of property and casualty insurers2 and 7,e7 #a shall be a representative of life or health insurers4 7#b7 ,state insurance regulator representatives 7,a7 ,before making any appointments pursuant to subparagraph 7,a7 of paragraph 7#a71 the ,president shall request a list of recommended candidates from ,,naic1 which shall not be binding on the ,president4 ,if ,,naic fails to submit a list of recommendations within #ae business days of the request1 the ,president may make the requisite appointments without considering the views of ,,naic4 7,b7 ,not more than #d members appointed to membership on the ,board pursuant to subparagraph 7,a7 of paragraph 7#a7 shall belong to the same political party4 7,c7 ,if fewer than #h ,state insurance commissioners accept appointment to the ,board1 the ,president may appoint the remaining ,state insurance commissioner members of the ,board from among individuals who are former ,state insurance commissioners1 provided that any former insurance commissioner so appointed shall not be employed by or have a present direct or indirect financial interest in any insurer1 insurance producer1 or other entity in the insurance industry other than direct or indirect ownership of1 or beneficial interest in1 an insurance policy or annuity contract written or sold by an insurer4 7#c7 ,private sector representatives ,in making any appointments pursuant to subparagraphs 7,b7 through 7,e7 of paragraph 7#a71 the ,president may seek recommendations for candidates from national trade associations representing the category of individuals described1 which shall not be binding on the ,president4 7#d7 ,state insurance commissioner defined ,for purposes of this subsection1 the term ,state insurance commissioner means a person who serves in the position in ,state government1 or on the board1 commission1 or other body that is the principal insurance regulatory authority for the ,state4 7d7 ,terms 7#a7 ,in general ,the term of each ,board member shall be for #b years1 except that-- 7,a7 the term of-- 7i7 #d of the ,state insurance commissioner members of the ,board initially appointed under subparagraph 7,a7 of paragraph 7#a72 7ii7 #a of the property and casualty insurance producer members of the ,board initially appointed under subparagraph 7,b7 of paragraph 7#a72 and 7iii7 #a of the insurer representative members of the ,board initially appointed under subparagraphs 7,d7 and 7,e7 of paragraph 7#a71 shall be #a year1 as designated by the ,president at the time of the nomination of the members2 7,b7 a member of the ,board may continue to serve after the expiration of the term to which the member was appointed until a successor is qualified2 and 7,c7 any member of the ,board appointed to fill a vacancy occurring before the expiration of the term for which the predecessor of the member was appointed shall be appointed only for the remainder of that term4 7#b7 ,successive terms ,board members may be reappointed to successive terms4 7e7 ,initial appointments ,the appointment of initial ,board members shall be made no later than #ij days after the date of enactment of the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjac4 7f7 ,meetings 7#a7 ,in general ,the ,board shall meet at the call of the chairperson1 as requested in writing to the chairperson by at least #e members of the ,board1 or as otherwise provided by the bylaws of the ,association4 7#b7 ,quorum required ,a majority of directors shall constitute a quorum4 7#c7 ,voting ,decisions of the ,board shall require the approval of a majority of all directors present at a meeting1 a quorum being present4 7#d7 ,initial meeting ,the ,board shall hold its first meeting not later than #de days after the date on which all initial members of the ,board have been appointed4 7g7 ,restriction on confidential information ,members of the ,board appointed pursuant to paragraph 7#c7 of subsection 7c7 shall not have access to confidential information received by the ,association in connection with complaints1 investigations1 or disciplinary proceedings involving insurance producers4 7h7 ,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 officers1 employees1 agents1 or consultants4 ,the code shall1 at a minimum1 include provisions that prohibit any ,board member or ,association officer1 employee1 agent or consultant from-- 7#a7 engaging in unethical conduct in the course of performing ,association duties2 7#b7 participating in the making or influencing the making of any ,association decision1 the outcome of which he or she knows or had reason to know would have a reasonably foreseeable material financial effect1 distinguishable from its effect on the publicly generally1 on the person or a member of his or her immediate family2 7#c7 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 ,association2 7#d7 making political contributions to any person or entity on behalf of the ,association2 and 7#e7 lobbying or paying someone to lobby on behalf of the ,association4 #cbe4 ,officers 7a7 ,positions ,the officers of the ,association shall consist of a chairperson and a vice chairperson of the ,board1 an executive director1 secretary1 and treasurer of the ,association1 and such other officers and assistant officers as may be deemed necessary4 7b7 ,manner of selection ,each officer of the ,board and the ,association shall be elected or appointed at such time1 in such manner1 and for such terms as may be prescribed in the bylaws of the ,association4 #cbf4 ,bylaws1 rules1 and disciplinary action 7a7 ,adoption and amendment of bylaws and rules 7#a7 ,copy required to be filed ,the ,board shall submit to the ,president and ,,naic any proposed bylaw or rules of the ,association or any proposed amendment to the bylaws or rules1 accompanied by a concise general statement of the basis and purpose of such proposal4 ,rules shall be promulgated in accordance with the ,federal ,administrative ,procedure ,act4 7#b7 ,effective date ,any proposed bylaw or rule or proposed amendment to the bylaws or rules shall take effect1 after notice published in the ,federal ,register and opportunity for comment1 upon such date as the ,association may designate1 unless suspended under subsection 7c7 of section #ccj4 7b7 ,disciplinary action by the ,association 7#a7 ,specification of charges ,in any proceeding to determine whether membership shall be denied1 suspended1 revoked1 or not renewed or to determine whether a member of the ,association should be placed on probation 7in this section referred to as a disciplinary action7 or whether to assess fines or monetary penalties1 the ,association shall bring specific charges1 notify the member of the charges1 give the member an opportunity to defend against the charges1 and keep a record4 7#b7 ,supporting statement ,a determination to take disciplinary action shall be supported by a statement setting forth-- 7,a7 any act or practice in which the member has been found to have been engaged2 7,b7 the specific provision of this subtitle1 the rules or regulations under this subtitle1 or the rules of the ,association which any such act or practice is deemed to violate2 and 7,c7 the sanction imposed and the reason for the sanction4 7#c7 ,ineligibility of private sector representatives ,members of the ,board appointed pursuant to section #cbd7;c77#c7 shall not participate in any disciplinary action1 and shall not have access to confidential information concerning the actions4 #cbg4 ,powers ,in addition to all the powers conferred upon a nonprofit corporation by the ,district of ,columbia ,nonprofit ,corporation ,act1 the ,association shall have the following powers3 7#a7 ,to establish and collect such membership fees as the ,association finds necessary to impose to cover the costs of its operations4 7#b7 ,to adopt1 amend1 and repeal bylaws and rules governing the conduct of ,association business and performance of its duties4 7#c7 ,to establish procedures for providing notice and opportunity for comment pursuant to section #cbf7;a74 7#d7 ,to enter into and perform such agreements as necessary to carry out its duties4 7#e7 ,to hire employees1 professionals1 or specialists1 and elect or appoint officers1 and to fix their compensation1 define their duties and give them appropriate authority to carry out the purposes of this subtitle1 and determine their qualification2 and to establish the ,association's personnel policies and programs relating to1 among other things1 conflicts of interest1 rates of compensation1 and qualifications of personnel4 7#f7 ,to borrow money4 7#g7 ,to secure funding for such amounts as the ,association determines to be necessary and appropriate to organize and begin operations of the ,association1 which shall be treated as loans to be repaid by the ,association with interest at market rate1 except that the ,board shall not secure funding from an insurer1 insurance producer1 or insurance association1 but may secure funding from ,,naic4 #cbh4 ,report by ,association 7a7 ,in general ,as soon as practicable after the close of each fiscal year1 the ,association shall submit to the ,president and ,,naic a written report regarding the conduct of its business1 and the exercise of the other rights and powers granted by this subtitle1 during such fiscal year4 7b7 ,financial statements ,each report submitted under subsection 7a7 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 7including the source and application of its funds7 for such fiscal year4 #cbi4 ,liability of the ,association and the directors1 officers1 and employees of the ,association 7a7 ,in general ,the ,association shall not be deemed to be an insurer or insurance producer within the meaning of any ,state law1 rule1 regulation1 or order regulating or taxing insurers1 insurance producers1 or other entities engaged in the business of insurance1 including provisions imposing premium taxes1 regulating insurer solvency or financial condition1 establishing guaranty funds and levying assessments1 or requiring claims settlement practices4 7b7 ,liability of directors1 officers1 and employees ,no director1 officer1 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 ,association4 #ccj4 ,presidential oversight 7a7 ,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 subtitle1 the ,president may remove the entire existing ,board for the remainder of the term to which the members of the ,board were appointed and appoint1 in accordance with section #cbd and with the advice and consent of the ,senate1 new members to fill the vacancies on the ,board for the remainder of the terms4 7b7 ,removal of ,board member ,the ,president may remove a member of the ,board only for neglect of duty or malfeasance in office4 7c7 ,suspension of rules or actions ,following notice to the ,board1 the ,president1 or a person designated by the ,president for such purpose1 may suspend the effectiveness of any rule1 or prohibit any action1 of the ,association which the ,president or the designee determines is contrary to the purposes of this subtitle4 #cca4 ,relationship to ,state law 7a7 ,preemption of ,state laws ,state laws1 regulations1 provisions1 or other actions purporting to regulate insurance producers shall be preempted to the extent provided in subsection 7b74 7b7 ,prohibited actions 7#a7 ,in general ,no ,state shall-- 7,a7 impede the activities of1 take any action against1 or apply any provision of law or regulation arbitrarily or discriminatorily to1 any insurance producer because that insurance producer or any affiliate plans to become1 has applied to become1 or is a member of the ,association2 7,b7 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 ,association2 or 7,c7 impose any continuing education requirements on any nonresident insurance producer that is a member of the ,association4 7#b7 ,states other than a home ,state ,no ,state1 other than a member's home ,state1 shall-- 7,a7 impose any licensing1 personal or corporate qualifications1 education1 training1 experience1 residency1 continuing education1 or bonding requirement upon a member of the ,association that is different from the criteria for membership in the ,association or renewal of such membership2 7,b7 impose any requirement upon a member of the ,association that it be licensed1 registered1 or otherwise qualified to do business or remain in good standing in the ,state1 including any requirement that the insurance producer register as a foreign company with the secretary of state or equivalent ,state official2 7,c7 require that a member of the ,association submit to a criminal history record check as a condition of doing business in the ,state2 or 7,d7 impose any licensing1 registration1 or appointment requirements upon a member of the ,association1 or require a member of the ,association to be authorized to operate as an insurance producer1 in order to sell1 solicit1 or negotiate insurance for commercial property and casualty risks to an insured with risks located in more than one ,state1 if the 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 ,state4 7#c7 ,preservation of ,state disciplinary authority ,nothing in this section may be construed to prohibit a ,state from investigating and taking appropriate disciplinary action1 including suspension or revocation of authority of an insurance producer to do business in a ,state1 in accordance with ,state law and that is not inconsistent with the provisions of this section1 against a member of the ,association as a result of a complaint or for any alleged activity1 regardless of whether the activity occurred before or after the insurance producer commenced doing business in the ,state pursuant to ,association membership4 #ccb4 ,coordination with other regulators 7a7 ,coordination with ,state insurance regulators ,the ,association may-- 7#a7 establish a central clearinghouse1 or utilize ,,naic or any other appropriate entity as a central clearinghouse1 through which members of the ,association may pursuant to section #cbc7;e7 disclose their intent to operate in #a or more ,states and pay the licensing fees to the appropriate ,states2 and 7#b7 establish a national database for the collection of regulatory information concerning the activities of insurance producers or contract with ,,naic or any other entity to utilize such a database4 7b7 ,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 associations1 consistent with the requirements of this subtitle and the ,federal securities laws4 #ccc4 ,right of action 7a7 ,right of action ,any person aggrieved by a decision or action of the ,association may1 after reasonably exhausting available avenues for resolution within the ,association1 commence a civil action in an appropriate ,united ,states district court1 and obtain all appropriate relief4 7b7 ,association interpretations ,in any such action1 the court shall give appropriate weight to the ,association's interpretation of its bylaws and this subtitle4 #ccd4 ,definitions ,for purposes of this subtitle1 the following definitions shall apply3 7#a7 ,business entity ,the term business entity means a corporation1 association1 partnership1 limited liability company1 limited liability partnership1 or other legal entity4 7#b7 ,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 producer4 7#c7 ,insurance ,the term insurance means any product1 other than title insurance or bail bonds1 defined or regulated as insurance by the appropriate ,state insurance regulatory authority4 7#d7 ,insurance producer ,the term insurance producer means any insurance agent or broker1 excess or surplus lines broker or agent1 insurance consultant1 limited insurance representative1 and any other individual or entity that sells1 solicits1 or negotiates policies of insurance or offers advice1 counsel1 opinions or services related to insurance4 7#e7 ,principal place of business ,the term principal place of business means the ,state in which an insurance producer maintains the headquarters of the insurance producer and1 in the case of a business entity1 where high-level officers of the entity direct1 control1 and coordinate the business activities of the business entity4 7#f7 ,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 year4 7#g7 ,state ,the term ,state includes any ,state1 the ,district of ,columbia1 any territory of the ,united ,states1 and ,puerto ,rico1 ,guam1 ,american ,samoa1 the ,trust ,territory of the ,pacific ,islands1 the ,virgin ,islands1 and the ,northern ,mariana ,islands4 7#h7 ,state law 7,a7 ,in general ,the term ,state law includes all laws1 decisions1 rules1 regulations1 or other ,state action having the effect of law1 of any ,state4 7,b7 ,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 ,states4 4 7b7 ,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 items3 ,subtitle ,c--,national ,association of ,registered ,agents and ,brokers ,sec4 #cba4 ,national ,association of ,registered ,agents and ,brokers4 ,sec4 #cbb4 ,purpose4 ,sec4 #cbc4 ,membership4 ,sec4 #cbd4 ,board of directors4 ,sec4 #cbe4 ,officers4 ,sec4 #cbf4 ,bylaws1 rules1 and disciplinary action4 ,sec4 #cbg4 ,powers4 ,sec4 #cbh4 ,report by ,association4 ,sec4 #cbi4 ,liability of the ,association and the directors1 officers1 and employees of the ,association4 ,sec4 #ccj4 ,presidential oversight4 ,sec4 #cca4 ,relationship to ,state law4 ,sec4 #ccb4 ,coordination with other regulators4 ,sec4 #ccc4 ,right of action4 ,sec4 #ccd4 ,definitions4 4 #a4 ,short title ,this ,act may be cited as the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjac4 #b4 ,reestablishment of the ,national ,association of ,registered ,agents and ,brokers 7a7 ,in general ,subtitle ,c of title ,,iii of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #fgea et seq47 is amended to read as follows3 ,c ,national ,association of ,registered ,agents and ,brokers #cba4 ,national ,association of ,registered ,agents and ,brokers 7a7 ,establishment ,there is established the ,national ,association of ,registered ,agents and ,brokers 7referred to in this subtitle as the ,association74 7b7 ,status ,the ,association shall-- 7#a7 be a nonprofit corporation2 7#b7 not be an agent or instrumentality of the ,federal ,government2 7#c7 be an independent organization that may not be merged with or into any other private or public entity2 and 7#d7 except as otherwise provided in this subtitle1 be subject to1 and have all the powers conferred upon1 a nonprofit corporation by the ,district of ,columbia ,nonprofit ,corporation ,act 7,d4,c4 ,code1 sec4 #bi-cja4ja et seq47 or any successor thereto4 #cbb4 ,purpose ,the purpose of the ,association shall be to provide a mechanism through which licensing1 continuing education1 and other nonresident insurance producer qualification requirements and conditions may be adopted and applied on a multi-state basis without affecting the laws1 rules1 and regulations1 and preserving the rights of a ,state1 pertaining to-- 7#a7 licensing1 continuing education1 and other qualification requirements of insurance producers that are not members of the ,association2 7#b7 resident or nonresident insurance producer appointment requirements2 7#c7 supervising and disciplining resident and nonresident insurance producers2 7#d7 establishing licensing fees for resident and nonresident insurance producers so that there is no loss of insurance producer licensing revenue to the ,state2 and 7#e7 prescribing and enforcing laws and regulations regulating the conduct of resident and nonresident insurance producers4 #cbc4 ,membership 7a7 ,eligibility 7#a7 ,in general ,any insurance producer licensed in its home ,state shall1 subject to paragraphs 7#b7 and 7#d71 be eligible to become a member of the ,association4 7#b7 ,ineligibility for suspension or revocation of license ,subject to paragraph 7#c71 an insurance producer is not eligible to become a member of the ,association if a ,state insurance regulator has suspended or revoked the insurance license of the insurance producer in that ,state4 7#c7 ,resumption of eligibility ,paragraph 7#b7 shall cease to apply to any insurance producer if-- 7,a7 the ,state insurance regulator reissues or renews the license of the insurance producer in the ,state in which the license was suspended or revoked1 or otherwise terminates or vacates the suspension or revocation2 or 7,b7 the suspension or revocation expires or is subsequently overturned by a court of competent jurisdiction4 7#d7 ,criminal history record check required 7,a7 ,in general ,an insurance producer who is an individual shall not be eligible to become a member of the ,association unless the insurance producer has undergone a criminal history record check that complies with regulations prescribed by the ,attorney ,general of the ,united ,states under subparagraph 7,k74 7,b7 ,criminal history record check requested by home ,state ,an insurance producer who is licensed in a ,state and who has undergone a criminal history record check during the #b-year period preceding the date of submission of an application to become a member of the ,association1 in compliance with a requirement to undergo such criminal history record check as a condition for such licensure in the ,state1 shall be deemed to have undergone a criminal history record check for purposes of subparagraph 7,a74 7,c7 ,criminal history record check requested by ,association 7i7 ,in general ,the ,association shall1 upon request by an insurance producer licensed in a ,state1 submit identification information obtained from the insurance producer1 and a request for a criminal history record check of the insurance producer1 to the ,federal ,bureau of ,investigation4 7ii7 ,procedures ,the board of directors of the ,association 7referred to in this subtitle as the ,board7 shall prescribe procedures for obtaining and utilizing identification information and criminal history record information1 including the establishment of reasonable fees required to perform a criminal history record check and appropriate safeguards for maintaining confidentiality and security of the information4 7,d7 ,form of request ,a submission under subparagraph 7,c77i7 shall include such identification information as is required by the ,attorney ,general concerning the person about whom the criminal history record check is requested1 and a statement signed by the person authorizing the ,attorney ,general to provide the information to the ,association and for the ,association to receive the information4 7,e7 ,provision of information by ,attorney ,general ,upon receiving a submission under subparagraph 7,c77i7 from the ,association1 the ,attorney ,general shall search all criminal history records of the ,federal ,bureau of ,investigation1 including records of the ,criminal ,justice ,information ,services ,division of the ,federal ,bureau of ,investigation1 that the ,attorney ,general determines appropriate for criminal history records corresponding to the identification information provided under subparagraph 7,d7 and provide all criminal history record information included in the request to the ,association4 7,f7 ,limitation on permissible uses of information ,any information provided to the ,association under subparagraph 7,e7 may only-- 7i7 be used for purposes of determining compliance with membership criteria established by the ,association2 7ii7 be disclosed to ,state insurance regulators1 or ,federal or ,state law enforcement agencies1 in conformance with applicable law2 or 7iii7 be disclosed1 upon request1 to the insurance producer to whom the criminal history record information relates4 7,g7 ,penalty for improper use or disclosure ,whoever knowingly uses any information provided under subparagraph 7,e7 for a purpose not authorized in subparagraph 7,f71 or discloses any such information to anyone not authorized to receive it1 shall be fined under title #ah1 ,united ,states ,code1 imprisoned for not more than #b years1 or both4 7,h7 ,reliance on information ,neither the ,association nor any of its ,board members1 officers1 or employees shall be liable in any action for using information provided under subparagraph 7,e7 as permitted under subparagraph 7,f7 in good faith and in reasonable reliance on its accuracy4 7,i7 ,fees ,the ,attorney ,general may charge a reasonable fee for conducting the search and providing the information under subparagraph 7,e71 and any such fee shall be collected and remitted by the ,association to the ,attorney ,general4 7,j7 ,rule of construction ,nothing in this paragraph shall be construed as-- 7i7 requiring a ,state insurance regulator to perform criminal history record checks under this section2 or 7ii7 limiting any other authority that allows access to criminal history records4 7,k7 ,regulations ,the ,attorney ,general shall prescribe regulations to carry out this paragraph1 which shall include-- 7i7 appropriate protections for ensuring the confidentiality of information provided under subparagraph 7,e72 and 7ii7 procedures providing a reasonable opportunity for an insurance producer to contest the accuracy of information regarding the insurance producer provided under subparagraph 7,e74 7,l7 ,ineligibility for membership 7i7 ,in general ,the ,association may1 under reasonably consistently applied standards1 deny membership to an insurance producer on the basis of criminal history record information provided under subparagraph 7,e71 or where the insurance producer has been subject to disciplinary action1 as described in paragraph 7#b74 7ii7 ,rights of applicants denied membership ,the ,association shall notify any insurance producer who is denied membership on the basis of criminal history record information provided under subparagraph 7,e7 of the right of the insurance producer to-- 7,i7 obtain a copy of all criminal history record information provided to the ,association under subparagraph 7,e7 with respect to the insurance producer2 and 7,,ii7 challenge the denial of membership based on the accuracy and completeness of the information4 7,m7 ,definition ,for purposes of this paragraph1 the term criminal history record check means a national background check of criminal history records of the ,federal ,bureau of ,investigation4 7b7 ,authority to establish membership criteria ,the ,association may establish membership criteria that bear a reasonable relationship to the purposes for which the ,association was established4 7c7 ,establishment of classes and categories of membership 7#a7 ,classes of membership ,the ,association may establish separate classes of membership1 with separate criteria1 if the ,association reasonably determines that performance of different duties requires different levels of education1 training1 experience1 or other qualifications4 7#b7 ,business entities ,the ,association shall establish a class of membership and membership criteria for business entities4 ,a business entity that applies for membership shall be required to designate an individual ,association member responsible for the compliance of the business entity with ,association standards and the insurance laws1 rules1 and regulations of any ,state in which the business entity seeks to do business on the basis of ,association membership4 7#c7 ,categories 7,a7 ,separate categories for insurance producers permitted ,the ,association may establish separate categories of membership for insurance producers and for other persons or entities within each class1 based on the types of licensing categories that exist under ,state laws4 7,b7 ,separate treatment for depository institutions prohibited ,no special categories of membership1 and no distinct membership criteria1 shall be established for members that are depository institutions or for employees1 agents1 or affiliates of depository institutions4 7d7 ,membership criteria 7#a7 ,in general ,the ,association may establish criteria for membership which shall include standards for personal qualifications1 education1 training1 and experience4 ,the ,association shall not establish criteria that unfairly limit the ability of a small insurance producer to become a member of the ,association1 including imposing discriminatory membership fees4 7#b7 ,qualifications ,in establishing criteria under paragraph 7#a71 the ,association shall not adopt any qualification less protective to the public than that contained in the ,national ,association of ,insurance ,commissioners 7referred to in this subtitle as the ,,naic7 ,producer ,licensing ,model ,act in effect as of the date of enactment of the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjac1 and shall consider the highest levels of insurance producer qualifications established under the licensing laws of the ,states4 7#c7 ,assistance from ,states 7,a7 ,in general ,the ,association may request a ,state to provide assistance in investigating and evaluating the eligibility of a prospective member for membership in the ,association4 7,b7 ,authorization of information sharing ,a submission under subsection 7a77#d77;,c77i7 made by an insurance producer licensed in a ,state shall include a statement signed by the person about whom the assistance is requested authorizing-- 7i7 the ,state to share information with the ,association2 and 7ii7 the ,association to receive the information4 7,c7 ,rule of construction ,subparagraph 7,a7 shall not be construed as requiring or authorizing any ,state to adopt new or additional requirements concerning the licensing or evaluation of insurance producers4 7#d7 ,denial of membership ,the ,association may1 based on reasonably consistently applied standards1 deny membership to any ,state-licensed insurance producer for failure to meet the membership criteria established by the ,association4 7e7 ,effect of membership 7#a7 ,authority of association members ,membership in the ,association shall-- 7,a7 authorize an insurance producer to sell1 solicit1 or negotiate insurance in any ,state for which the member pays the licensing fee set by the ,state for any line or lines of insurance specified in the home ,state license of the insurance producer1 and exercise all such incidental powers as shall be necessary to carry out such activities1 including claims adjustments and settlement to the extent permissible under the laws of the ,state1 risk management1 employee benefits advice1 retirement planning1 and any other insurance-related consulting activities2 7,b7 be the equivalent of a nonresident insurance producer license for purposes of authorizing the insurance producer to engage in the activities described in subparagraph 7,a7 in any ,state where the member pays the licensing fee2 and 7,c7 be the equivalent of a nonresident insurance producer license for the purpose of subjecting an insurance producer to all laws1 regulations1 provisions or other action of any ,state concerning revocation1 suspension1 or other enforcement action related to the ability of a member to engage in any activity within the scope of authority granted under this subsection and to all ,state laws1 regulations1 provisions1 and actions preserved under paragraph 7#e74 7#b7 ,violent ,crime ,control and ,law ,enforcement ,act of #aiid ,nothing in this subtitle shall be construed to alter1 modify1 or supercede any requirement established by section #ajcc of title #ah1 ,united ,states ,code4 7#c7 ,agent for remitting fees ,the ,association shall act as an agent for any member for purposes of remitting licensing fees to any ,state pursuant to paragraph 7#a74 7#d7 ,notification of action 7,a7 ,in general ,the ,association shall notify the ,states 7including ,state insurance regulators7 and the ,,naic when an insurance producer has satisfied the membership criteria of this section4 ,the ,states 7including ,state insurance regulators7 shall have #aj business days after the date of the notification in order to provide the ,association with evidence that the insurance producer does not satisfy the criteria for membership in the ,association4 7,b7 ,ongoing disclosures required ,on an ongoing basis1 the ,association shall disclose to the ,states 7including ,state insurance regulators7 and the ,,naic a list of the ,states in which each member is authorized to operate4 ,the ,association shall immediately notify the ,states 7including ,state insurance regulators7 and the ,,naic when a member is newly authorized to operate in one or more ,states1 or is no longer authorized to operate in one or more ,states on the basis of ,association membership4 7#e7 ,preservation of consumer protection and market conduct regulation 7,a7 ,in general ,no provision of this section shall be construed as altering or affecting the applicability or continuing effectiveness of any law1 regulation1 provision1 or other action of any ,state1 including those described in subparagraph 7,b71 to the extent that the ,state law1 regulation1 provision1 or other action is not inconsistent with the provisions of this subtitle related to market entry for nonresident insurance producers1 and then only to the extent of the inconsistency4 7,b7 ,preserved regulations ,the laws1 regulations1 provisions1 or other actions of any ,state referred to in subparagraph 7,a7 include laws1 regulations1 provisions1 or other actions that-- 7i7 regulate market conduct1 insurance producer conduct1 or unfair trade practices2 7ii7 establish consumer protections2 or 7iii7 require insurance producers to be appointed by a licensed or authorized insurer4 7f7 ,biennial renewal ,membership in the ,association shall be renewed on a biennial basis4 7g7 ,continuing education 7#a7 ,in general ,the ,association shall establish1 as a condition of membership1 continuing education requirements which shall be comparable to the continuing education requirements under the licensing laws of a majority of the ,states4 7#b7 ,state continuing education requirements ,a member may not be required to satisfy continuing education requirements imposed under the laws1 regulations1 provisions1 or actions of any ,state other than the home ,state of the member4 7#c7 ,reciprocity ,the ,association shall not require a member to satisfy continuing education requirements that are equivalent to any continuing education requirements of the home ,state of the member that have been satisfied by the member during the applicable licensing period4 7#d7 ,limitation on the ,association ,the ,association shall not directly or indirectly offer any continuing education courses for insurance producers4 7h7 ,probation1 suspension and revocation 7#a7 ,disciplinary action ,the ,association may place an insurance producer that is a member of the ,association on probation or suspend or revoke the membership of the insurance producer in the ,association1 or assess monetary fines or penalties1 as the ,association determines to be appropriate1 if-- 7,a7 the insurance producer fails to meet the applicable membership criteria or other standards established by the ,association2 7,b7 the insurance producer has been subject to disciplinary action pursuant to a final adjudicatory proceeding under the jurisdiction of a ,state insurance regulator2 7,c7 an insurance license held by the insurance producer has been suspended or revoked by a ,state insurance regulator2 or 7,d7 the insurance producer has been convicted of a crime that would have resulted in the denial of membership pursuant to subsection 7a77#d77,l77i7 at the time of application1 and the ,association has received a copy of the final disposition from a court of competent jurisdiction4 7#b7 ,violations of ,association standards ,the ,association shall have the power to investigate alleged violations of ,association standards4 7#c7 ,reporting ,the ,association shall immediately notify the ,states 7including ,state insurance regulators7 and the ,,naic when the membership of an insurance producer has been placed on probation or has been suspended1 revoked1 or otherwise terminated1 or when the ,association has assessed monetary fines or penalties4 7i7 ,consumer complaints 7#a7 ,in general ,the ,association shall-- 7,a7 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 and1 when appropriate1 to any additional ,state insurance regulator1 as determined by standards adopted by the ,association2 and 7,b7 make any related records and information available to each ,state insurance regulator to whom the complaint is forwarded4 7#b7 ,telephone and other access ,the ,association shall maintain a toll-free number for purposes of this subsection and1 as practicable1 other alternative means of communication with consumers1 such as an ,internet webpage4 7#c7 ,final disposition of investigation ,state insurance regulators shall provide the ,association with information regarding the final disposition of a complaint referred pursuant to paragraph 7#a77;,a71 but nothing shall be construed to compel a ,state to release confidential investigation reports or other information protected by ,state law to the ,association4 7j7 ,information sharing ,the ,association may-- 7#a7 share documents1 materials1 or other information1 including confidential and privileged documents1 with a ,state1 ,federal1 or international governmental entity or with the ,,naic or other appropriate entity referenced in paragraphs 7#c7 and 7#d71 provided that the recipient has the authority and agrees to maintain the confidentiality or privileged status of the document1 material1 or other information2 7#b7 limit the sharing of information as required under this subtitle with the ,,naic or any other non-governmental entity1 in circumstances under which the ,association determines that the sharing of such information is unnecessary to further the purposes of this subtitle2 7#c7 establish a central clearinghouse1 or utilize the ,,naic or another appropriate entity1 as determined by the ,association1 as a central clearinghouse1 for use by the ,association and the ,states 7including ,state insurance regulators71 through which members of the ,association may disclose their intent to operate in #a or more ,states and pay the licensing fees to the appropriate ,states2 and 7#d7 establish a database1 or utilize the ,,naic or another appropriate entity1 as determined by the ,association1 as a database1 for use by the ,association and the ,states 7including ,state insurance regulators7 for the collection of regulatory information concerning the activities of insurance producers4 7k7 ,effective ,date ,the provisions of this section shall take effect on the later of-- 7#a7 the expiration of the #b-year period beginning on the date of enactment of the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjac2 and 7#b7 the date of incorporation of the ,association4 #cbd4 ,board of directors 7a7 ,establishment ,there is established a board of directors of the ,association1 which shall have authority to govern and supervise all activities of the ,association4 7b7 ,powers ,the ,board shall have such of the powers and authority of the ,association as may be specified in the bylaws of the ,association4 7c7 ,composition 7#a7 ,in general ,the ,board shall consist of #ac members who shall be appointed by the ,president1 by and with the advice and consent of the ,senate1 in accordance with the procedures established under ,senate ,resolution #aaf of the #aabth ,congress1 of whom-- 7,a7 #h shall be ,state insurance commissioners appointed in the manner provided in paragraph 7#b71 #a of whom shall be designated by the ,president to serve as the chairperson of the ,board until the ,board elects one such ,state insurance commissioner ,board member to serve as the chairperson of the ,board2 7,b7 #c shall have demonstrated expertise and experience with property and casualty insurance producer licensing2 and 7,c7 #b shall have demonstrated expertise and experience with life or health insurance producer licensing4 7#b7 ,state insurance regulator representatives 7,a7 ,recommendations ,before making any appointments pursuant to paragraph 7#a77;,a71 the ,president shall request a list of recommended candidates from the ,states through the ,,naic1 which shall not be binding on the ,president4 ,if the ,,naic fails to submit a list of recommendations not later than #ae business days after the date of the request1 the ,president may make the requisite appointments without considering the views of the ,,naic4 7,b7 ,political affiliation ,not more than #d ,board members appointed under paragraph 7#a77;,a7 shall belong to the same political party4 7,c7 ,former ,state insurance commissioners 7i7 ,in general ,if1 after offering each currently serving ,state insurance commissioner an appointment to the ,board1 fewer than #h ,state insurance commissioners have accepted appointment to the ,board1 the ,president may appoint the remaining ,state insurance commissioner ,board members1 as required under paragraph 7#a77;,a71 of the appropriate political party as required under subparagraph 7,b71 from among individuals who are former ,state insurance commissioners4 7ii7 ,limitation ,a former ,state insurance commissioner appointed as described in clause 7i7 may not be employed by or have any present direct or indirect financial interest in any insurer1 insurance producer1 or other entity in the insurance industry1 other than direct or indirect ownership of1 or beneficial interest in1 an insurance policy or annuity contract written or sold by an insurer4 7,d7 ,service through term ,if a ,board member appointed under paragraph 7#a77;,a7 ceases to be a ,state insurance commissioner during the term of the ,board member1 the ,board member shall cease to be a ,board member4 7#c7 ,private sector representatives ,in making any appointment pursuant to subparagraphs 7,b7 and 7,c7 of paragraph 7#a71 the ,president may seek recommendations for candidates from groups representing the category of individuals described1 which shall not be binding on the ,president4 7#d7 ,state insurance commissioner defined ,for purposes of this subsection1 the term ,state insurance commissioner means a person who serves in the position in ,state government1 or on the board1 commission1 or other body that is the primary insurance regulatory authority for the ,state4 7d7 ,terms 7#a7 ,in general ,except as provided under paragraph 7#b71 the term of service for each ,board member shall be #b years4 7#b7 ,exceptions 7,a7 #a-year terms ,the term of service shall be #a year1 as designated by the ,president at the time of the nomination of the subject ,board members for-- 7i7 #d of the ,state insurance commissioner ,board members initially appointed under paragraph 7#a77;,a71 of whom not more than #b shall belong to the same political party2 7ii7 #a of the ,board members initially appointed under paragraph 7#a77;,b72 and 7iii7 #a of the ,board members initially appointed under paragraph 7#a77;,c74 7,b7 ,expiration of ,term ,a ,board member may continue to serve after the expiration of the term to which the ,board member was appointed for the earlier of #b years or until a successor is appointed4 7,c7 ,mid-term appointments ,a ,board member appointed to fill a vacancy occurring before the expiration of the term for which the predecessor of the ,board member was appointed shall be appointed only for the remainder of that term4 7#c7 ,successive terms ,board members may be reappointed to successive terms4 7e7 ,initial appointments ,the appointment of initial ,board members shall be made no later than #ij days after the date of enactment of the ,national ,association of ,registered ,agents and ,brokers ,reform ,act of #bjac4 7f7 ,meetings 7#a7 ,in general ,the ,board shall meet-- 7,a7 at the call of the chairperson2 7,b7 as requested in writing to the chairperson by not fewer than #e ,board members2 or 7,c7 as otherwise provided by the bylaws of the ,association4 7#b7 ,quorum required ,a majority of all ,board members shall constitute a quorum4 7#c7 ,voting ,decisions of the ,board shall require the approval of a majority of all ,board members present at a meeting1 a quorum being present4 7#d7 ,initial meeting ,the ,board shall hold its first meeting not later than #de days after the date on which all initial ,board members have been appointed4 7g7 ,restriction on confidential information ,board members appointed pursuant to subparagraphs 7,b7 and 7,c7 of subsection 7c77#a7 shall not have access to confidential information received by the ,association in connection with complaints1 investigations1 or disciplinary proceedings involving insurance producers4 7h7 ,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 officers1 employees1 agents1 or consultants4 ,the code shall1 at a minimum1 include provisions that prohibit any ,board member or ,association officer1 employee1 agent or consultant from-- 7#a7 engaging in unethical conduct in the course of performing ,association duties2 7#b7 participating in the making or influencing the making of any ,association decision1 the outcome of which the ,board member1 officer1 employee1 agent1 or consultant knows or had reason to know would have a reasonably foreseeable material financial effect1 distinguishable from its effect on the public generally1 on the person or a member of the immediate family of the person2 7#c7 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 ,association2 7#d7 making political contributions to any person or entity on behalf of the ,association2 and 7#e7 lobbying or paying a person to lobby on behalf of the ,association4 7i7 ,compensation 7#a7 ,in general ,except as provided in paragraph 7#b71 no ,board member may receive any compensation from the ,association or any other person or entity on account of ,board membership4 7#b7 ,travel expenses and per diem ,board members may be reimbursed only by the ,association for travel expenses1 including per diem in lieu of subsistence1 at rates consistent with rates authorized for employees of ,federal agencies under subchapter ,i of chapter #eg of title #e1 ,united ,states ,code1 while away from home or regular places of business in performance of services for the ,association4 #cbe4 ,bylaws1 standards1 and disciplinary actions 7a7 ,adoption and amendment of bylaws and standards 7#a7 ,procedures ,the ,association shall adopt procedures for the adoption of bylaws and standards that are similar to procedures under subchapter ,,ii of chapter #e of title #e1 ,united ,states ,code 7commonly known as the ,administrative ,procedure ,act74 7#b7 ,copy required to be filed ,the ,board shall submit to the ,president1 through the ,department of the ,treasury1 and the ,states 7including ,state insurance regulators71 and shall publish on the website of the ,association1 all proposed bylaws and standards of the ,association1 or any proposed amendment to the bylaws or standards of the ,association1 accompanied by a concise general statement of the basis and purpose of such proposal4 7#c7 ,effective date ,any proposed bylaw or standard of the ,association1 and any proposed amendment to the bylaws or standards of the ,association1 shall take effect1 after notice under paragraph 7#b7 and opportunity for public comment1 on such date as the ,association may designate1 unless suspended under section #cbi7;c74 7#d7 ,rule of construction ,nothing in this section shall be construed to subject the ,board or the ,association to the requirements of subchapter ,,ii of chapter #e of title #e1 ,united ,states ,code 7commonly known as the ,administrative ,procedure ,act74 7b7 ,disciplinary action by the ,association 7#a7 ,specification of charges ,in any proceeding to determine whether membership shall be denied1 suspended1 revoked1 or not renewed1 or to determine whether a member of the ,association should be placed on probation 7referred to in this section as a disciplinary action7 or whether to assess fines or monetary penalties1 the ,association shall bring specific charges1 notify the member of the charges1 give the member an opportunity to defend against the charges1 and keep a record4 7#b7 ,supporting statement ,a determination to take disciplinary action shall be supported by a statement setting forth-- 7,a7 any act or practice in which the member has been found to have been engaged2 7,b7 the specific provision of this subtitle or standard of the ,association that any such act or practice is deemed to violate2 and 7,c7 the sanction imposed and the reason for the sanction4 7#c7 ,ineligibility of private sector representatives ,board members appointed pursuant to section #cbd7;c77#c7 may not-- 7,a7 participate in any disciplinary action or be counted toward establishing a quorum during a disciplinary action2 and 7,b7 have access to confidential information concerning any disciplinary action4 #cbf4 ,powers ,in addition to all the powers conferred upon a nonprofit corporation by the ,district of ,columbia ,nonprofit ,corporation ,act1 the ,association shall have the power to-- 7#a7 establish and collect such membership fees as the ,association finds necessary to impose to cover the costs of its operations2 7#b7 adopt1 amend1 and repeal bylaws1 procedures1 or standards governing the conduct of ,association business and performance of its duties2 7#c7 establish procedures for providing notice and opportunity for comment pursuant to section #cbe7;a72 7#d7 enter into and perform such agreements as necessary to carry out the duties of the ,association2 7#e7 hire employees1 professionals1 or specialists1 and elect or appoint officers1 and to fix their compensation1 define their duties and give them appropriate authority to carry out the purposes of this subtitle1 and determine their qualification2 7#f7 establish personnel policies of the ,association and programs relating to1 among other things1 conflicts of interest1 rates of compensation1 where applicable1 and qualifications of personnel2 7#g7 borrow money2 and 7#h7 secure funding for such amounts as the ,association determines to be necessary and appropriate to organize and begin operations of the ,association1 which shall be treated as loans to be repaid by the ,association with interest at market rate4 #cbg4 ,report by the ,association 7a7 ,in general ,as soon as practicable after the close of each fiscal year1 the ,association shall submit to the ,president1 through the ,department of the ,treasury1 and the ,states 7including ,state insurance regulators71 and shall publish on the website of the ,association1 a written report regarding the conduct of its business1 and the exercise of the other rights and powers granted by this subtitle1 during such fiscal year4 7b7 ,financial statements ,each report submitted under subsection 7a7 with respect to any fiscal year shall include audited financial statements setting forth the financial position of the ,association at the end of such fiscal year and the results of its operations 7including the source and application of its funds7 for such fiscal year4 #cbh4 ,liability of the ,association and the ,board members1 officers1 and employees of the ,association 7a7 ,in general ,the ,association shall not be deemed to be an insurer or insurance producer within the meaning of any ,state law1 rule1 regulation1 or order regulating or taxing insurers1 insurance producers1 or other entities engaged in the business of insurance1 including provisions imposing premium taxes1 regulating insurer solvency or financial condition1 establishing guaranty funds and levying assessments1 or requiring claims settlement practices4 7b7 ,liability of ,board members1 officers1 and employees ,no ,board member1 officer1 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 ,association4 #cbi4 ,presidential oversight 7a7 ,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 subtitle1 the ,president may remove the entire existing ,board for the remainder of the term to which the ,board members were appointed and appoint1 in accordance with section #cbd and with the advice and consent of the ,senate1 in accordance with the procedures established under ,senate ,resolution #aaf of the #aabth ,congress1 new ,board members to fill the vacancies on the ,board for the remainder of the terms4 7b7 ,removal of ,board member ,the ,president may remove a ,board member only for neglect of duty or malfeasance in office4 7c7 ,suspension of bylaws and standards and prohibition of actions ,following notice to the ,board1 the ,president1 or a person designated by the ,president for such purpose1 may suspend the effectiveness of any bylaw or standard1 or prohibit any action1 of the ,association that the ,president or the designee determines is contrary to the purposes of this subtitle4 #ccj4 ,relationship to ,state law 7a7 ,preemption of ,state laws ,state laws1 regulations1 provisions1 or other actions purporting to regulate insurance producers shall be preempted to the extent provided in subsection 7b74 7b7 ,prohibited actions 7#a7 ,in general ,no ,state shall-- 7,a7 impede the activities of1 take any action against1 or apply any provision of law or regulation arbitrarily or discriminatorily to1 any insurance producer because that insurance producer or any affiliate plans to become1 has applied to become1 or is a member of the ,association2 7,b7 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 ,association2 or 7,c7 impose any continuing education requirements on any nonresident insurance producer that is a member of the ,association4 7#b7 ,states other than a home ,state ,no ,state1 other than the home ,state of a member of the ,association1 shall-- 7,a7 impose any licensing1 personal or corporate qualifications1 education1 training1 experience1 residency1 continuing education1 or bonding requirement upon a member of the ,association that is different from the criteria for membership in the ,association or renewal of such membership2 7,b7 impose any requirement upon a member of the ,association that it be licensed1 registered1 or otherwise qualified to do business or remain in good standing in the ,state1 including any requirement that the insurance producer register as a foreign company with the secretary of state or equivalent ,state official2 7,c7 require that a member of the ,association submit to a criminal history record check as a condition of doing business in the ,state2 or 7,d7 impose any licensing1 registration1 or appointment requirements upon a member of the ,association1 or require a member of the ,association to be authorized to operate as an insurance producer1 in order to sell1 solicit1 or negotiate insurance for commercial property and casualty risks to an insured with risks located in more than one ,state1 if the 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 ,state4 7#c7 ,preservation of ,state disciplinary authority ,nothing in this section may be construed to prohibit a ,state from investigating and taking appropriate disciplinary action1 including suspension or revocation of authority of an insurance producer to do business in a ,state1 in accordance with ,state law and that is not inconsistent with the provisions of this section1 against a member of the ,association as a result of a complaint or for any alleged activity1 regardless of whether the activity occurred before or after the insurance producer commenced doing business in the ,state pursuant to ,association membership4 #cca4 ,coordination with ,financial ,industry ,regulatory ,authority ,the ,association shall coordinate with the ,financial ,industry ,regulatory ,authority in order to ease any administrative burdens that fall on members of the ,association that are subject to regulation by the ,financial ,industry ,regulatory ,authority1 consistent with the requirements of this subtitle and the ,federal securities laws 4 #ccb4 ,right of action 7a7 ,right of action ,any person aggrieved by a decision or action of the ,association may1 after reasonably exhausting available avenues for resolution within the ,association1 commence a civil action in an appropriate ,united ,states district court1 and obtain all appropriate relief4 7b7 ,association interpretations ,in any action under subsection 7a71 the court shall give appropriate weight to the interpretation of the ,association of its bylaws and standards and this subtitle4 #ccc4 ,federal ,funding ,prohibited ,the ,association may not receive1 accept1 or borrow any amounts from the ,federal ,government to pay for1 or reimburse the ,association for1 the costs of establishing or operating the ,association4 #ccd4 ,definitions ,for purposes of this subtitle1 the following definitions shall apply3 7#a7 ,business entity ,the term business entity means a corporation1 association1 partnership1 limited liability company1 limited liability partnership1 or other legal entity4 7#b7 ,depository institution ,the term depository institution has the meaning as in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#c7 ,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 producer4 7#d7 ,insurance ,the term insurance means any product1 other than title insurance or bail bonds1 defined or regulated as insurance by the appropriate ,state insurance regulatory authority4 7#e7 ,insurance producer ,the term insurance producer means any insurance agent or broker1 excess or surplus lines broker or agent1 insurance consultant1 limited insurance representative1 and any other individual or entity that sells1 solicits1 or negotiates policies of insurance or offers advice1 counsel1 opinions or services related to insurance4 7#f7 ,insurer ,the term insurer has the meaning as in section #cac7;e77#b77;,b7 of title #ca1 ,united ,states ,code 4 7#g7 ,principal place of business ,the term principal place of business means the ,state in which an insurance producer maintains the headquarters of the insurance producer and1 in the case of a business entity1 where high-level officers of the entity direct1 control1 and coordinate the business activities of the business entity4 7#h7 ,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 year4 7#i7 ,state ,the term ,state includes any ,state1 the ,district of ,columbia1 any territory of the ,united ,states1 and ,puerto ,rico1 ,guam1 ,american ,samoa1 the ,trust ,territory of the ,pacific ,islands1 the ,virgin ,islands1 and the ,northern ,mariana ,islands4 7#aj7 ,state law 7,a7 ,in general ,the term ,state law includes all laws1 decisions1 rules1 regulations1 or other ,state action having the effect of law1 of any ,state4 7,b7 ,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 ,states4 4 7b7 ,technical 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 items3 ,subtitle ,c--,national ,association of ,registered ,agents and ,brokers ,sec4 #cba4 ,national ,association of ,registered ,agents and ,brokers4 ,sec4 #cbb4 ,purpose4 ,sec4 #cbc4 ,membership4 ,sec4 #cbd4 ,board of directors4 ,sec4 #cbe4 ,bylaws1 standards1 and disciplinary actions4 ,sec4 #cbf4 ,powers4 ,sec4 #cbg4 ,report by the ,association4 ,sec4 #cbh4 ,liability of the ,association and the ,board members1 officers1 and employees of the ,association4 ,sec4 #cbi4 ,presidential oversight4 ,sec4 #ccj4 ,relationship to ,state law4 ,sec4 #cca4 ,coordination with ,financial ,industry ,regulatory ,authority4 ,sec4 #ccb4 ,right of action4 ,sec4 #ccc4 ,federal funding prohibited4 ,sec4 #ccd4 ,definitions4 4 ,july #bi1 #bjac ,reported with an amendment