I 

111TH CONGRESS 

1ST SESSION H. R. 2554 

To reform the National Association of Registered Agents and Brokers, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 21, 2009 

Mr. SCOTT of Georgia (for himself, Mr. NEUGEBAUER, Mr. AKIN, Mr. MEEKS

of New York, Mr. WILSON of Ohio, Mr. DAVIS of Kentucky, Mr. KIND, 

Ms. MOORE of Wisconsin, Mrs. MYRICK, Mr. HOLDEN, Mr. JONES, Ms. 

FOXX, Mr. DONNELLY of Indiana, Mr. POMEROY, Ms. ROS-LEHTINEN, 

Ms. GINNY BROWN-WAITE of Florida, Mr. BARRETT of South Carolina, 

Mr. ROSS, Mr. CLAY, Mr. CHILDERS, Ms. KOSMAS, Mr. MILLER of North 

Carolina, Mr. MORAN of Kansas, Mr. MCHENRY, Mr. LEE of New York, 

Mr. MOORE of Kansas, Mr. PUTNAM, Mr. MELANCON, Ms. JENKINS, Mr. 

GERLACH, Mr. KANJORSKI, Mr. CAPUANO, Mr. ADLER of New Jersey, 

Mr. GARRETT of New Jersey, and Mr. BACHUS) introduced the following 

bill; which was referred to the Committee on Financial Services 

A BILL 

To reform the National Association of Registered Agents 

and Brokers, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘National Association 

5 of Registered Agents and Brokers Reform Act of 2009’’. 


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1 SEC. 2. REESTABLISHMENT OF THE NATIONAL ASSOCIA2 TION OF REGISTERED AGENTS AND BRO3 KERS. 

4 (a) IN GENERAL.—Subtitle C of title III of the 

5 Gramm-Leach-Bliley Act (15 U.S.C. 6751 et seq.) is 

6 amended to read as follows: 

7 ‘‘Subtitle C—National Association 

8 of Registered Agents and Brokers 

9 ‘‘SEC. 321. NATIONAL ASSOCIATION OF REGISTERED 

10 AGENTS AND BROKERS. 

11 ‘‘(a) ESTABLISHMENT.—There is established the Na12 tional Association of Registered Agents and Brokers 

13 (hereafter in this subtitle referred to as the ‘Association’). 

14 ‘‘(b) STATUS.—The Association shall— 

15 ‘‘(1) be a nonprofit corporation; 

16 ‘‘(2) have succession until dissolved by an Act 

17 of Congress; 

18 ‘‘(3) not be an agent or instrumentality of the 

19 United States Government; and 

20 ‘‘(4) except as otherwise provided in this sub21 title, be subject to, and have all the powers conferred 

22 upon a nonprofit corporation by the District of Co23 lumbia Nonprofit Corporation Act (D.C. Code, sec. 

24 29–301.01 et seq.). 


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1 ‘‘SEC. 322. PURPOSE. 

2 ‘‘The purpose of the Association shall be to provide 

3 a mechanism through which licensing, continuing edu4 cation, and other nonresident insurance producer quali5 fication requirements and conditions can be adopted and 

6 applied on a multi-state basis (without affecting the laws, 

7 rules, and regulations pertaining to resident insurance 

8 producers or appointments or producing a net loss of pro9 ducer licensing revenues to States), while preserving the 

10 right of States to license, supervise, discipline, and estab11 lish licensing fees for insurance producers, and to pre12 scribe and enforce laws and regulations with regard to in13 surance-related consumer protection and unfair trade 

14 practices. 

15 ‘‘SEC. 323. MEMBERSHIP. 

16 ‘‘(a) ELIGIBILITY.— 

17 ‘‘(1) IN GENERAL.—Any insurance producer li18 censed in its home State shall be eligible to become 

19 a member of the Association. 

20 ‘‘(2) INELIGIBILITY FOR SUSPENSION OR REV21 OCATION OF LICENSE.—Notwithstanding paragraph 

22 (1), a State-licensed insurance producer shall not be 

23 eligible to become a member if a State insurance 

24 regulator has suspended or revoked such producer’s 

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1 ceding the date on which such producer applies for 

2 membership. 

3 ‘‘(3) RESUMPTION OF ELIGIBILITY.—Paragraph 

4 (2) shall cease to apply to any insurance producer 

5 if— 

6 ‘‘(A) the State insurance regulator reissues 

7 or renews the license of such producer in the 

8 State in which the license was suspended or re9 voked; or 

10 ‘‘(B) the suspension or revocation is subse11 quently overturned. 

12 ‘‘(4) CRIMINAL BACKGROUND CHECK RE13 QUIRED.— 

14 ‘‘(A) IN GENERAL.—A State-licensed in15 surance producer shall not be eligible to become 

16 a member unless the producer has submitted to 

17 a national criminal background record check. 

18 ‘‘(B) CRIMINAL BACKGROUND CHECK OR19 DERED BY HOME STATE.—Any insurance pro20 ducer licensed in a State that, as a condition 

21 for such licensure, requires the submission of 

22 identification information to the Federal Bu23 reau of Investigation for a national criminal 

24 background record check shall be deemed to 

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1 ground record check for purposes of subpara2 graph (A). 

3 ‘‘(C) CRIMINAL HISTORY CHECK ORDERED

4 BY ASSOCIATION.— 

5 ‘‘(i) IN GENERAL.—The Association 

6 may submit identification information ob7 tained from any State-licensed insurance 

8 producer licensed in a State that has not 

9 submitted to a national criminal back10 ground record check, and a request for a 

11 national criminal background record check 

12 of such producer, to the Federal Bureau of 

13 Investigation. 

14 ‘‘(ii) BYLAWS OR RULES.—The board 

15 of directors of the Association shall pre16 scribe bylaws or rules for obtaining and 

17 utilizing identification information and 

18 criminal history record information, includ19 ing the establishment of fees required to 

20 perform a criminal background record 

21 check. 

22 ‘‘(D) ATTORNEY GENERAL AUTHORIZA23 TION.—Upon receiving a request from the Asso24 ciation, the Attorney General shall— 


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1 ‘‘(i) search any records of the Crimi2 nal Justice Information Services Division 

3 of the Federal Bureau of Investigation 

4 that the Attorney General deems appro5 priate for criminal history records cor6 responding to the identification informa7 tion provided under subparagraph (F); 

8 ‘‘(ii) provide any relevant information 

9 contained in such records that pertain to 

10 the request directly to the Association; and 

11 ‘‘(iii) destroy any fingerprints, finger12 print cards, or other copies or images of 

13 fingerprints obtained pursuant to this sec14 tion upon completion of the criminal his15 tory record check. 

16 ‘‘(E) RELEVANT INFORMATION DE17 FINED.—For purposes of subparagraph (D)(ii), 

18 the term ‘relevant information’ means any of 

19 the following records: 

20 ‘‘(i) All felony convictions. 

21 ‘‘(ii) All misdemeanor convictions in22 volving— 

23 ‘‘(I) violation of a law involving 

24 financial activities; 


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1 ‘‘(II) dishonesty or breach of 

2 trust, within the meaning of section 

3 1033 of title 18, United States Code, 

4 including taking, withholding, mis5 appropriating, or converting money or 

6 property; 

7 ‘‘(III) failure to comply with 

8 child support obligations; 

9 ‘‘(IV) failure to pay taxes; and 

10 ‘‘(V) domestic violence, child 

11 abuse, burglary of a dwelling, or a 

12 criminal offense that has as an ele13 ment the use or attempted use of 

14 physical force, or threat of great bod15 ily harm, or the use, attempted use, 

16 or threatened use of a deadly weapon, 

17 against an individual, including com18 mitting or attempting to commit mur19 der, manslaughter, kidnapping, aggra20 vated assault, forcible sex offenses, 

21 robbery, arson, extortion, and extor22 tionate extension of credit. 

23 ‘‘(F) FORM OF REQUEST.—A request 

24 under subparagraph (C) shall include a copy of 

25 any necessary identification information reVerDate Nov 24 2008 00:09 May 27, 2009 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2554.IH H2554

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1 quired by the Attorney General concerning the 

2 person about whom the record is requested and 

3 a statement signed by the person acknowledging 

4 that the Association may request the search. 

5 ‘‘(G) LIMITATION ON PERMISSIBLE USES

6 OF INFORMATION.—Information obtained under 

7 this section may— 

8 ‘‘(i) be used only for regulatory or law 

9 enforcement purposes or for purposes of 

10 determining compliance with membership 

11 criteria established by the Association; 

12 ‘‘(ii) be disclosed only to the Associa13 tion, State insurance regulators, or Federal 

14 or State law enforcement agencies; and 

15 ‘‘(iii) be disclosed only if the recipient 

16 agrees to— 

17 ‘‘(I) maintain the confidentiality 

18 of such information; and 

19 ‘‘(II) limit the use of such infor20 mation to the purposes described in 

21 clause (i). 

22 ‘‘(H) APPLICANT ACCESS TO CRIMINAL

23 HISTORY RECORDS.—Notwithstanding subpara24 graph (G), an applicant shall have the right to 

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1 formation concerning the applicant that is pro2 vided to the Association pursuant to this sec3 tion. 

4 ‘‘(I) PENALTY FOR IMPROPER USE.—Who5 ever uses any information obtained under this 

6 section knowingly and willfully for an unauthor7 ized purpose shall be fined under title 18, 

8 United States Code, imprisoned for not more 

9 than 2 years, or both. 

10 ‘‘(J) RELIANCE ON INFORMATION.—Nei11 ther the Association nor any of its directors, of12 ficers, or employees who reasonably rely on in13 formation provided under this section shall be 

14 liable in any action for using information as 

15 permitted under this section in good faith. 

16 ‘‘(K) CLARIFICATION OF SECTION 1033.— 

17 ‘‘(i) IN GENERAL.—With respect to 

18 any action brought under section 

19 1033(e)(1)(B) of title 18, United States 

20 Code, no person engaged in the business of 

21 conducting financial activities shall be sub22 ject to any penalty resulting from such sec23 tion if the individual whom the person per24 mitted to engage in the business of insur25 ance is a member of the Association or is 


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1 licensed, or approved (as part of an appli2 cation or otherwise), by a State insurance 

3 regulator that performs criminal back4 ground checks, unless such person has ac5 tual knowledge that the individual is in 

6 violation of section 1033(e)(1)(A) of such 

7 title. 

8 ‘‘(ii) FINANCIAL ACTIVITIES DE9 FINED.—For purposes of this subpara10 graph, the term ‘financial activities’— 

11 ‘‘(I) means banking activities (in12 cluding the ownership of a bank), se13 curities activities, insurance activities, 

14 or commodities activities; and 

15 ‘‘(II) includes all activities that 

16 are financial in nature or are inci17 dental to a financial activity (as de18 fined under section 4(k) of the Bank 

19 Holding Company Act of 1956). 

20 ‘‘(L) FEES.—The Attorney General may 

21 charge a reasonable fee for the provision of in22 formation under this paragraph, and any such 

23 fee shall be collected and remitted by the Asso24 ciation. 


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1 ‘‘(M) RULE OF CONSTRUCTION.—No provi2 sion of this paragraph shall be construed as— 

3 ‘‘(i) requiring a State insurance regu4 lator to perform criminal background 

5 checks under this section; or 

6 ‘‘(ii) superseding or otherwise limiting 

7 any other authority that allows access to 

8 criminal background records. 

9 ‘‘(N) REGULATIONS.—The Attorney Gen10 eral may prescribe regulations to carry out this 

11 paragraph. 

12 ‘‘(O) INELIGIBILITY FOR MEMBERSHIP.— 

13 ‘‘(i) IN GENERAL.—The Association 

14 may deny membership to any State-li15 censed insurance producer on the basis of 

16 criminal history information obtained pur17 suant to subparagraph (D). 

18 ‘‘(ii) RIGHTS OF APPLICANTS DENIED

19 MEMBERSHIP.—The Association shall no20 tify any applicant who is denied member21 ship on the basis of criminal history record 

22 information obtained pursuant to subpara23 graph (D) of the right of the applicant 

24 to— 


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1 ‘‘(I) obtain a copy of any such 

2 criminal history record information 

3 provided to the Association; and 

4 ‘‘(II) challenge the accuracy and 

5 completeness of the information. 

6 ‘‘(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRI7 TERIA.—The Association may establish membership cri8 teria that— 

9 ‘‘(1) bear a reasonable relationship to the pur10 poses for which the Association was established; and 

11 ‘‘(2) do not unfairly limit the access of smaller 

12 agencies to the Association membership, including 

13 imposing discriminatory membership fees on smaller 

14 insurance producers. 

15 ‘‘(c) ESTABLISHMENT OF CLASSES AND CATEGORIES

16 OF MEMBERSHIP.— 

17 ‘‘(1) CLASSES OF MEMBERSHIP.—The Associa18 tion may establish separate classes of membership, 

19 with separate criteria, if the Association reasonably 

20 determines that performance of different duties re21 quires different levels of education, training, experi22 ence, or other qualifications. 

23 ‘‘(2) CATEGORIES.— 

24 ‘‘(A) SEPARATE CATEGORIES FOR PRO25 DUCERS PERMITTED.—The Association may esVerDate Nov 24 2008 00:09 May 27, 2009 Jkt 079200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2554.IH H2554

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1 tablish separate categories of membership for 

2 producers and for other persons within each 

3 class, based on the types of licensing categories 

4 that exist under State laws. 

5 ‘‘(B) SEPARATE TREATMENT FOR DEPOSI6 TORY INSTITUTIONS PROHIBITED.—No special 

7 categories of membership, and no distinct mem8 bership criteria, shall be established for mem9 bers which are depository institutions or for 

10 employees, agents, or affiliates of depository in11 stitutions. 

12 ‘‘(d) MEMBERSHIP CRITERIA.— 

13 ‘‘(1) IN GENERAL.—The Association may estab14 lish criteria for membership which shall include 

15 standards for personal qualifications, education, 

16 training, and experience. 

17 ‘‘(2) QUALIFICATIONS.—In establishing criteria 

18 under paragraph (1), the Association shall consider 

19 the NAIC Producer Licensing Model Act and the 

20 highest levels of insurance producer qualifications 

21 established under the licensing laws of the States. 

22 ‘‘(3) ASSISTANCE FROM STATES.— 

23 ‘‘(A) IN GENERAL.—The Association may 

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1 tigating and evaluating a prospective member’s 

2 eligibility for membership in the Association. 

3 ‘‘(B) RULE OF CONSTRUCTION.—Subpara4 graph (A) shall not be construed as requiring or 

5 authorizing any State to adopt new or addi6 tional requirements concerning the licensing or 

7 evaluation of insurance producers. 

8 ‘‘(4) DENIAL OF MEMBERSHIP.—The Associa9 tion may deny membership to any State-licensed in10 surance producer for failure to meet the membership 

11 criteria established by the Association. 

12 ‘‘(e) EFFECT OF MEMBERSHIP.— 

13 ‘‘(1) AUTHORITY OF ASSOCIATION MEMBERS.— 

14 Membership in the Association shall— 

15 ‘‘(A) authorize an insurance producer to 

16 sell, solicit, negotiate, effect, procure, deliver, 

17 renew, continue, or bind insurance in any State 

18 for which the member pays the licensing fee set 

19 by such State for any line or lines of insurance 

20 specified in such producer’s home State license, 

21 and exercise all such incidental powers, as shall 

22 be necessary to carry out such activities, includ23 ing claims adjustments and settlement, risk 

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1 ment planning, and any other insurance-related 

2 consulting activities; 

3 ‘‘(B) be the equivalent of a nonresident in4 surance producer license issued in any State 

5 where the member pays the licensing fee; and 

6 ‘‘(C) subject an insurance producer to all 

7 laws, regulations, provisions or other action of 

8 any State concerning revocation or suspension 

9 of a member’s ability to engage in any activity 

10 within the scope of authority granted under this 

11 subsection and to all State laws, regulations, 

12 provisions and actions preserved under para13 graph (5). 

14 ‘‘(2) DUPLICATIVE LICENSES.—No State, other 

15 than the member’s home State, may require an indi16 vidual member to obtain a business entity license or 

17 membership in order to engage in any activity within 

18 the scope of authority granted in paragraph (1) or 

19 in order for the member or any employer, employee, 

20 or affiliate of the member to receive compensation 

21 for the member’s performance of any such activity. 

22 ‘‘(3) AGENT FOR REMITTING FEES.—The Asso23 ciation shall act as any member’s agent for purposes 

24 of remitting licensing fees to any State pursuant to 

25 paragraph (1). 


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1 ‘‘(4) REGULATOR NOTIFICATION.—The Associa2 tion shall notify the National Association of Insur3 ance Commissioners (hereinafter in this subtitle re4 ferred to as the ‘NAIC’) or its designee when a pro5 ducer becomes a member and identify, on an ongo6 ing basis, the States in which the member is author7 ized to operate. 

8 ‘‘(5) PRESERVATION OF STATE CONSUMER PRO9 TECTION AND MARKET CONDUCT REGULATION.—No 

10 provision of this section shall be construed as alter11 ing or affecting the continuing effectiveness of any 

12 law, regulation, provision, or other action of any 

13 State which purports to regulate market conduct or 

14 unfair trade practices or establish consumer protec15 tions to the extent that such law, regulation, provi16 sion, or other action is not inconsistent with the pro17 visions of this subtitle, and then only to the extent 

18 of such inconsistency. 

19 ‘‘(f) BIENNIAL RENEWAL.—Membership in the Asso20 ciation shall be renewed on a biennial basis. 

21 ‘‘(g) CONTINUING EDUCATION.— 

22 ‘‘(1) IN GENERAL.—The Association shall es23 tablish, as a condition of membership, continuing 

24 education requirements which shall be comparable to 


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1 the continuing education requirements under the li2 censing laws of a majority of the States. 

3 ‘‘(2) STATE CONTINUING EDUCATION REQUIRE4 MENTS.—A member may not be required to satisfy 

5 continuing education requirements imposed under 

6 the laws, regulations, provisions, or actions of any 

7 State other than such member’s home State. 

8 ‘‘(3) RECIPROCITY.—The Association shall not 

9 require a member to satisfy continuing education re10 quirements that are equivalent to any continuing 

11 education requirements of the member’s home State 

12 that have been satisfied by the member during the 

13 applicable licensing period. 

14 ‘‘(4) LIMITATION ON ASSOCIATION.—The Asso15 ciation shall not directly or indirectly offer any con16 tinuing education courses for insurance producers. 

17 ‘‘(h) PROBATION, SUSPENSION AND REVOCATION.— 

18 ‘‘(1) DISCIPLINARY ACTION.—The Association 

19 may place an insurance producer that is a member 

20 of the Association on probation or suspend or revoke 

21 such producer’s membership in the Association, as 

22 the Association determines to be appropriate, if— 

23 ‘‘(A) the producer fails to meet the appli24 cable membership criteria of the Association; or 


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1 ‘‘(B) the producer has been subject to dis2 ciplinary action pursuant to a final adjudicatory 

3 proceeding under the jurisdiction of a State in4 surance regulator. 

5 ‘‘(2) REPORTING TO STATE REGULATORS.—The 

6 Association shall notify the NAIC or its designee 

7 when a producer’s membership has been suspended, 

8 revoked, and otherwise terminated. 

9 ‘‘(i) CONSUMER COMPLAINTS.— 

10 ‘‘(1) IN GENERAL.—The Association shall— 

11 ‘‘(A) receive and, when appropriate, inves12 tigate complaints from both consumers and 

13 State insurance regulators related to members 

14 of the Association; 

15 ‘‘(B) refer any proper complaint received 

16 in accordance with subparagraph (A) and make 

17 any related records and information available to 

18 the NAIC or its designee and to each State in19 surance regulator for the State of residence of 

20 the consumer who filed the complaint; and 

21 ‘‘(C) refer, when appropriate, any such 

22 complaint to any additional appropriate State 

23 insurance regulator. 

24 ‘‘(2) TELEPHONE AND OTHER ACCESS.—The 

25 Association shall maintain a toll-free telephone numVerDate Nov 24 2008 00:09 May 27, 2009 Jkt 079200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\H2554.IH H2554

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1 ber for the purpose of this subsection and, as prac2 ticable, other alternative means of communication 

3 with consumers, such as an Internet web page. 

4 ‘‘SEC. 324. BOARD OF DIRECTORS. 

5 ‘‘(a) ESTABLISHMENT.—There is established the 

6 board of directors of the Association (hereafter in this sub7 title referred to as the ‘Board’) for the purpose of gov8 erning and supervising the activities of the Association. 

9 ‘‘(b) POWERS.—The Board shall have such powers 

10 and authority as may be specified in the bylaws of the 

11 Association. 

12 ‘‘(c) COMPOSITION.— 

13 ‘‘(1) IN GENERAL.—The Board shall consist of 

14 11 members who shall be appointed by the Presi15 dent, by and with the advice and consent of the Sen16 ate, of whom— 

17 ‘‘(A) 6 shall be State insurance commis18 sioners appointed in the manner provided in 

19 paragraph (2), 

20 ‘‘(B) 2 shall be representatives of property 

21 and casualty insurance producers, 

22 ‘‘(C) 1 shall be a representative of life or 

23 health insurance producers, 

24 ‘‘(D) 1 shall be a representative of prop25 erty and casualty insurers, and 


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1 ‘‘(E) 1 shall be a representative of life or 

2 health insurers. 

3 ‘‘(2) STATE INSURANCE REGULATOR REP4 RESENTATIVES.— 

5 ‘‘(A) In making any appointments pursu6 ant to subparagraph (A) of paragraph (1), the 

7 President shall solicit a list of recommended 

8 candidates from the NAIC. If the NAIC fails to 

9 submit list of recommendations within 15 days 

10 of the request, the President shall make the 

11 requisite appointments without considering the 

12 views of the NAIC. 

13 ‘‘(B) Not more than 3 members appointed 

14 to membership on the Board pursuant to sub15 paragraph (A) of paragraph (1) shall belong to 

16 the same political party. 

17 ‘‘(C) If fewer than 6 State insurance com18 missioners accept appointment to the Board, 

19 the President may appoint the remaining State 

20 insurance commissioner members of the Board 

21 from among individuals who are former State 

22 insurance commissioners, provided that any 

23 former insurance commissioner appointed by 

24 the President shall not be employed by or have 

25 a present direct or indirect financial interest in 


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1 any insurer or other entity in the insurance in2 dustry other than direct or indirect ownership 

3 of, or beneficial interest in, any insurance policy 

4 or annuity contract written or sold by an in5 surer. 

6 ‘‘(3) PRIVATE SECTOR REPRESENTATIVES.—In 

7 making any appointments pursuant to subpara8 graphs (B) through (E) of paragraph (1), the Presi9 dent may seek recommended candidates from na10 tional trade associations representing the category of 

11 individuals described. 

12 ‘‘(4) STATE INSURANCE COMMISSIONER DE13 FINED.—For purposes of this subsection, the term 

14 ‘State insurance commissioner’ means a person who 

15 serves in the position in State government, or on the 

16 board, commission, or other body that is the prin17 cipal insurance regulatory authority for the State. 

18 ‘‘(d) TERMS.— 

19 ‘‘(1) IN GENERAL.—The term of each Board 

20 member shall be for 2 years, except that— 

21 ‘‘(A) the term of— 

22 ‘‘(i) 3 of the State insurance commis23 sioner members of the Board initially ap24 pointed under subparagraph (A) of para25 graph (1), 


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1 ‘‘(ii) 1 of the property and casualty 

2 insurance producer members of the Board 

3 initially appointed under subparagraph (B) 

4 of paragraph (1), and 

5 ‘‘(iii) 1 of the insurer representative 

6 members of the Board initially appointed 

7 under subparagraphs (D) and (E) of para8 graph (1), 

9 shall be 1 year, as designated by the President 

10 at the time of the nomination of such members; 

11 ‘‘(B) a member of the Board may continue 

12 to serve after the expiration of the term to 

13 which such member was appointed until a suc14 cessor is qualified; and 

15 ‘‘(C) any member of the Board appointed 

16 to fill a vacancy occurring before the expiration 

17 of the term for which the member’s predecessor 

18 was appointed shall be appointed only for the 

19 remainder of that term. 

20 ‘‘(2) SUCCESSIVE TERMS.—Board members 

21 may be reappointed to successive terms. 

22 ‘‘(e) MEETINGS.— 

23 ‘‘(1) IN GENERAL.—The Board shall meet at 

24 the call of the chairperson, as requested in writing 

25 to the chairperson by at least four members of the 


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1 Board, or as otherwise provided by the bylaws of the 

2 Association. 

3 ‘‘(2) QUORUM REQUIRED.—A majority of direc4 tors shall constitute a quorum. 

5 ‘‘(3) VOTING.—Decisions of the Board shall re6 quire the approval of a majority of all directors 

7 present at a meeting. 

8 ‘‘SEC. 325. OFFICERS. 

9 ‘‘(a) POSITIONS.—The officers of the Association 

10 shall consist of a chairperson and a vice chairperson of 

11 the Board, an executive director, secretary, and treasurer 

12 of the Association, and such other officers and assistant 

13 officers as may be deemed necessary. 

14 ‘‘(b) MANNER OF SELECTION.—Each officer of the 

15 Board and the Association shall be elected or appointed 

16 at such time, in such manner, and for such terms as may 

17 be prescribed in the bylaws of the Association. 

18 ‘‘SEC. 326. BYLAWS, RULES, AND DISCIPLINARY ACTION. 

19 ‘‘(a) ADOPTION AND AMENDMENT OF BYLAWS.— 

20 ‘‘(1) COPY REQUIRED TO BE FILED.—The 

21 board of directors of the Association shall submit to 

22 the President and the NAIC any proposed bylaw or 

23 rules of the Association or any proposed amendment 

24 to the bylaws or rules, accompanied by a concise 


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1 general statement of the basis and purpose of such 

2 proposal. 

3 ‘‘(2) EFFECTIVE DATE.—Any proposed bylaw 

4 or rule or proposed amendment to the bylaws or 

5 rules shall take effect, after notice published in the 

6 Federal Register and opportunity for comment, upon 

7 such date as the Association may designate. 

8 ‘‘(b) DISCIPLINARY ACTION BY THE ASSOCIATION.— 

9 ‘‘(1) SPECIFICATION OF CHARGES.—In any pro10 ceeding to determine whether membership shall be 

11 denied, suspended, revoked, or not renewed (here12 after in this section referred to as a ‘disciplinary ac13 tion’) or to determine whether a member of the As14 sociation should be placed on probation, the Associa15 tion shall bring specific charges, notify such member 

16 of such charges, give the member an opportunity to 

17 defend against the charges, and keep a record. 

18 ‘‘(2) SUPPORTING STATEMENT.—A determina19 tion to take disciplinary action shall be supported by 

20 a statement setting forth— 

21 ‘‘(A) any act or practice in which such 

22 member has been found to have been engaged; 

23 ‘‘(B) the specific provision of this subtitle, 

24 the rules or regulations under this subtitle, or 


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1 the rules of the Association which any such act 

2 or practice is deemed to violate; and 

3 ‘‘(C) the sanction imposed and the reason 

4 for such sanction. 

5 ‘‘SEC. 327. POWERS. 

6 ‘‘In addition to all the powers conferred upon a non7 profit corporation by the District of Columbia Nonprofit 

8 Corporation Act, the Association shall have the following 

9 powers: 

10 ‘‘(1) To establish and collect such membership 

11 fees as the Association finds necessary to impose to 

12 cover the costs of its operations. 

13 ‘‘(2) To adopt, amend, and repeal bylaws and 

14 rules governing the conduct of Association business 

15 and performance of its duties. 

16 ‘‘(3) To establish procedures for providing no17 tice and opportunity for comment pursuant to sec18 tion 326(a). 

19 ‘‘(4) To enter into and perform such agree20 ments as necessary to carry out its duties. 

21 ‘‘(5) To hire employees, professionals or special22 ists, and elect or appoint officers, and to fix their 

23 compensation, define their duties and give them ap24 propriate authority to carry out the purposes of this 

25 subtitle, and determine their qualification; and to esVerDate Nov 24 2008 00:09 May 27, 2009 Jkt 079200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\H2554.IH H2554

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1 tablish the Association’s personnel policies and pro2 grams relating to, among other things, conflicts of 

3 interest, rates of compensation. and qualifications of 

4 personnel. 

5 ‘‘(6) To borrow money. 

6 ‘‘(7) To secure funding from board member or7 ganizations and other industry associations for such 

8 amounts that the Association determines to be nec9 essary and appropriate to organize and begin oper10 ations of the Association, which shall be treated as 

11 loans to be repaid by the Association with interest 

12 at market rate. 

13 ‘‘SEC. 328. REPORT BY ASSOCIATION. 

14 ‘‘(a) IN GENERAL.—As soon as practicable after the 

15 close of each fiscal year, the Association shall submit to 

16 the President and the NAIC a written report regarding 

17 the conduct of its business, and the exercise of the other 

18 rights and powers granted by this subtitle, during such 

19 fiscal year. 

20 ‘‘(b) FINANCIAL STATEMENTS.—Each report sub21 mitted under subsection (a) with respect to any fiscal year 

22 shall include financial statements setting forth the finan23 cial position of the Association at the end of such fiscal 

24 year and the results of its operations (including the source 

25 and application of its funds) for such fiscal year. 


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1 ‘‘SEC. 329. LIABILITY OF THE ASSOCIATION AND THE DI2 RECTORS, OFFICERS, AND EMPLOYEES OF 

3 THE ASSOCIATION. 

4 ‘‘(a) IN GENERAL.—The Association shall not be 

5 deemed to be an insurer or insurance producer within the 

6 meaning of any State law, rule, regulation, or order regu7 lating or taxing insurers, insurance producers, or other en8 tities engaged in the business of insurance, including pro9 visions imposing premium taxes, regulating insurer sol10 vency or financial condition, establishing guaranty funds 

11 and levying assessments, or requiring claims settlement 

12 practices. 

13 ‘‘(b) LIABILITY OF THE ASSOCIATION, ITS DIREC14 TORS, OFFICERS, AND EMPLOYEES.—Neither the Associa15 tion nor any of its directors, officers, or employees shall 

16 have any liability to any person for any action taken or 

17 omitted in good faith under or in connection with any mat18 ter subject to this subtitle. 

19 ‘‘SEC. 330. PRESIDENTIAL OVERSIGHT. 

20 ‘‘(a) REMOVAL.—If the President determines that the 

21 Association is acting in a manner contrary to the interests 

22 of the public or the purposes of this subtitle or has failed 

23 to perform its duties under this subtitle, the President 

24 may remove the entire existing Board for the remainder 

25 of the term to which the members of the Board were ap26 pointed and appoint, in accordance with section 324 and 


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1 with the advice and consent of the Senate, new members 

2 to fill the vacancies on the Board for the remainder of 

3 such terms. 

4 ‘‘(b) REMOVAL OF BOARD MEMBERS.—The Presi5 dent may remove a member of the Board only for neglect 

6 of duty or malfeasance in office. 

7 ‘‘(c) SUSPENSION OF RULES OR ACTIONS.—The 

8 President, or a person designated by the President for 

9 such purpose, may suspend the effectiveness of any rule, 

10 or prohibit any action, of the Association which the Presi11 dent or the designee determines is contrary to the pur12 poses of this subtitle. 

13 ‘‘SEC. 331. RELATIONSHIP TO STATE LAW. 

14 ‘‘(a) PREEMPTION OF STATE LAWS.—State laws, 

15 regulations, provisions, or other actions purporting to reg16 ulate insurance producers shall be preempted to the extent 

17 provided in subsection (b). 

18 ‘‘(b) PROHIBITED ACTIONS.— 

19 ‘‘(1) IN GENERAL.—No State shall— 

20 ‘‘(A) impede the activities of, take any ac21 tion against, or apply any provision of law or 

22 regulation to, any insurance producer because 

23 that insurance producer or any affiliate plans to 

24 become, has applied to become, or is a member 

25 of the Association; 


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1 ‘‘(B) impose any requirement upon a mem2 ber of the Association that it pay fees different 

3 from those required to be paid to that State 

4 were it not a member of the Association; 

5 ‘‘(C) impose any continuing education re6 quirements on nonresident insurance producers; 

7 or 

8 ‘‘(D) impose any licensing, registration, or 

9 appointment requirements upon any non10 resident insurance producer that sells, solicits, 

11 negotiates, effects, procures, delivers, renews, 

12 continues, or binds insurance for commercial 

13 property and casualty risks to an insured with 

14 risks located in more than 1 State, provided 

15 that such nonresident insurance producer is 

16 otherwise licensed as an insurance producer in 

17 the State where the insured maintains its prin18 cipal place of business and the contract of in19 surance insures risks located in that State. 

20 ‘‘(2) STATES OTHER THAN A HOME STATE.— 

21 No State, other than a member’s home State, 

22 shall— 

23 ‘‘(A) impose any licensing, integrity, per24 sonal or corporate qualifications, education, 

25 training, experience, residency, continuing eduVerDate Nov 24 2008 00:09 May 27, 2009 Jkt 079200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\H2554.IH H2554

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1 cation, or bonding requirement upon a member 

2 of the Association that is different from the cri3 teria for membership in the Association or re4 newal of such membership; 

5 ‘‘(B) impose any requirement upon a mem6 ber of the Association that it be licensed, reg7 istered, or otherwise qualified to do business or 

8 remain in good standing in such State, includ9 ing any requirement that such insurance pro10 ducer register as a foreign company with the 

11 secretary of state or equivalent State official; or 

12 ‘‘(C) require that a member of the Associa13 tion submit to a criminal history record check 

14 as a condition of doing business in such State. 

15 ‘‘SEC. 332. COORDINATION WITH OTHER REGULATORS. 

16 ‘‘(a) COORDINATION WITH STATE INSURANCE REGU17 LATORS.—The Association may— 

18 ‘‘(1) establish a central clearinghouse, or utilize 

19 the NAIC or any other entity as a central clearing20 house, through which members of the Association 

21 may pursuant to section 323(e) disclose their intent 

22 to operate in 1 or more States and pay the licensing 

23 fees to the appropriate States; and 

24 ‘‘(2) establish a national database for the collec25 tion of regulatory information concerning the activiVerDate Nov 24 2008 00:09 May 27, 2009 Jkt 079200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H2554.IH H2554

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1 ties of insurance producers or contract with the 

2 NAIC or any other entity to utilize such a database. 

3 ‘‘(b) COORDINATION WITH THE FINANCIAL INDUS4 TRY REGULATORY AUTHORITY.—The Association shall 

5 coordinate with the Financial Industry Regulatory Au6 thority in order to ease any administrative burdens that 

7 fall on persons that are members of both associations, con8 sistent with the purposes of this subtitle and the Federal 

9 securities laws. 

10 ‘‘SEC. 333. JUDICIAL REVIEW AND ENFORCEMENT. 

11 ‘‘(a) JURISDICTION.—The appropriate United States 

12 district court shall have exclusive jurisdiction over litiga13 tion to which the Association is a party or any matter aris14 ing under this subtitle, including disputes between the As15 sociation and its members that arise under this subtitle, 

16 subject to chapter 7 of title 5, United States Code. 

17 ‘‘(b) EXHAUSTION OF REMEDIES.—An aggrieved 

18 person shall be required to exhaust all available adminis19 trative remedies before the Association before it may seek 

20 judicial review of an Association decision. 

21 ‘‘(c) EQUAL WEIGHT AND DEFERENCE.—In any 

22 other proceeding involving this subtitle, the court shall 

23 give at least equal weight and deference to the interpreta24 tions of the Association as would be given to any State 


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1 or Federal agency with respect to any law, regulation, in2 terpretation, or order addressing the same issues. 

3 ‘‘SEC. 334. DEFINITIONS. 

4 ‘‘For purposes of this subtitle, the following defini5 tions shall apply: 

6 ‘‘(1) HOME STATE.—The term ‘home State’ 

7 means the State in which the insurance producer 

8 maintains its principal place of residence or business 

9 and is licensed to act as an insurance producer. 

10 ‘‘(2) INSURANCE.—The term ‘insurance’ means 

11 any product, other than title insurance, defined or 

12 regulated as insurance by the appropriate State in13 surance regulatory authority. 

14 ‘‘(3) INSURANCE PRODUCER.—The term ‘insur15 ance producer’ means any insurance agent or 

16 broker, excess or surplus lines broker or agent, in17 surance consultant, limited insurance representative, 

18 and any other individual or entity that solicits, nego19 tiates, effects, procures, delivers, renews, continues 

20 or binds policies of insurance or offers advice, coun21 sel, opinions or services related to insurance. 

22 ‘‘(4) STATE.—The term ‘State’ includes any 

23 State, the District of Columbia, any territory of the 

24 United States, and Puerto Rico, Guam, American 

25 Samoa, the Trust Territory of the Pacific Islands, 


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1 the Virgin Islands, and the Northern Mariana Is2 lands. 

3 ‘‘(5) STATE LAW.— 

4 ‘‘(A) IN GENERAL.—The term ‘State law’ 

5 includes all laws, decisions, rules, regulations, 

6 or other State action having the effect of law, 

7 of any State. 

8 ‘‘(B) LAWS APPLICABLE IN THE DISTRICT

9 OF COLUMBIA.—A law of the United States ap10 plicable only to or within the District of Colum11 bia shall be treated as a State law rather than 

12 a law of the United States.’’. 

13 (b) CLERICAL AMENDMENT.—The table of contents 

14 for the Gramm-Leach-Bliley Act is amended by striking 

15 the items relating to subtitle C of title III and inserting 

16 the following new items: 

‘‘Subtitle C—National Association of Registered Agents and Brokers 

‘‘Sec. 321. National association of registered agents and brokers. 

‘‘Sec. 322. Purpose. 

‘‘Sec. 323. Membership. 

‘‘Sec. 324. Board of directors. 

‘‘Sec. 325. Officers. 

‘‘Sec. 326. Bylaws, rules, and disciplinary action. 

‘‘Sec. 327. Powers. 

‘‘Sec. 328. Report by association. 

‘‘Sec. 329. Liability of the association and the directors, officers, and employees 

of the association. 

‘‘Sec. 330. Presidential oversight. 

‘‘Sec. 331. Relationship to State law. 

‘‘Sec. 332. Coordination with other regulators. 

‘‘Sec. 333. Judicial review and enforcement. 

‘‘Sec. 334. Definitions.’’. 

Æ 


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