II 

Calendar No. 151 

113TH CONGRESS 

1ST SESSION S. 534 

[Report No. 113–82] 

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

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 12, 2013 

Mr. TESTER (for himself, Mr. JOHANNS, Mr. BENNET, Mr. CRAPO, Mr. MURPHY, Mr. CHAMBLISS, Mr. WARNER, Ms. HEITKAMP, Mr. WICKER, Mr. 

CARPER, Mr. MORAN, Mr. MENENDEZ, Mr. NELSON, Mr. HELLER, Mr. 

BLUNT, Mr. UDALL of Colorado, Mr. BAUCUS, Mrs. SHAHEEN, Mr. HARKIN, Mr. THUNE, Mr. BROWN, Mr. COONS, Ms. AYOTTE, and Ms. KLOBUCHAR) introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

JULY 29, 2013 

Reported by Mr. JOHNSON of South Dakota, 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 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, 


tkelley on DSK3SPTVN1PROD with BILLS
2 

•S 534 RS

1 SECTION 1. SHORT TITLE. 

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

3 of Registered Agents and Brokers Reform Act of 2013’’. 

4 SEC. 2. REESTABLISHMENT OF THE NATIONAL ASSOCIA5 TION OF REGISTERED AGENTS AND BRO6 KERS. 

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

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

9 amended to read as follows: 

10 ‘‘Subtitle C—National Association 

11 of Registered Agents and Brokers 

12 ‘‘SEC. 321. NATIONAL ASSOCIATION OF REGISTERED 

13 AGENTS AND BROKERS. 

14 ‘‘(a) ESTABLISHMENT.—There is established the Na15 tional Association of Registered Agents and Brokers 

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

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

18 ‘‘(1) be a nonprofit corporation; 

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

20 of Congress; 

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

22 United States Government; and 

23 ‘‘(4) except as otherwise provided in this sub24 title, be subject to, and have all the powers conferred 

25 upon, a nonprofit corporation by the District of CoVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6401 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
3 

•S 534 RS

1 lumbia Nonprofit Corporation Act (D.C. Code, sec. 

2 29–301.01 et seq.). 

3 ‘‘(c) EFFECTIVE DATE.—The provisions of this sub4 title shall take effect upon the expiration of the 24-month 

5 period beginning on the date of enactment of the National 

6 Association of Registered Agents and Brokers Reform Act 

7 of 2013. Notwithstanding the effective date, such persons 

8 as are required to establish the Association shall take such 

9 actions as are necessary to establish the operations of the 

10 Association by the effective date. 

11 ‘‘SEC. 322. PURPOSE. 

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

13 a mechanism through which licensing, continuing edu14 cation, and other nonresident insurance producer quali15 fication requirements and conditions may be adopted and 

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

17 rules, and regulations, and preserving the rights of a 

18 State, pertaining to— 

19 ‘‘(1) licensing, continuing education, and other 

20 qualification requirements of insurance producers 

21 who are not members of the Association; 

22 ‘‘(2) resident or nonresident insurance producer 

23 appointment requirements; 

24 ‘‘(3) supervising and disciplining resident and 

25 nonresident insurance producers; 


tkelley on DSK3SPTVN1PROD with BILLS
4 

•S 534 RS

1 ‘‘(4) establishing licensing fees for resident and 

2 nonresident insurance producers so that there is no 

3 loss of insurance producer licensing revenue to the 

4 State; and 

5 ‘‘(5) prescribing and enforcing laws and regula6 tions regulating the conduct of resident and non7 resident insurance producers. 

8 ‘‘SEC. 323. MEMBERSHIP. 

9 ‘‘(a) ELIGIBILITY.— 

10 ‘‘(1) IN GENERAL.—Any insurance producer li11 censed in its home State shall, subject to paragraphs 

12 (2) and (4), be eligible to become a member of the 

13 Association. 

14 ‘‘(2) INELIGIBILITY FOR SUSPENSION OR REV15 OCATION OF LICENSE.—Subject to paragraph (3), 

16 an insurance producer is not eligible to become a 

17 member of the Association if a State insurance regu18 lator has suspended or revoked the insurance license 

19 of the insurance producer in that State. 

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

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

22 if— 

23 ‘‘(A) the State insurance regulator reissues 

24 or renews the license of the insurance producer 

25 in the State in which the license was suspended 


tkelley on DSK3SPTVN1PROD with BILLS
5 

•S 534 RS

1 or revoked, or otherwise terminates or vacates 

2 the suspension or revocation; or 

3 ‘‘(B) the suspension or revocation expires 

4 or is subsequently overturned by a court of 

5 competent jurisdiction. 

6 ‘‘(4) CRIMINAL BACKGROUND RECORD CHECK

7 REQUIRED.— 

8 ‘‘(A) IN GENERAL.—An insurance pro9 ducer shall not be eligible to become a member 

10 of the Association unless the insurance pro11 ducer has undergone a national criminal back12 ground record check of its Federal Bureau of 

13 Investigation identification record that complies 

14 with regulations prescribed by the Attorney 

15 General under subparagraph (L). 

16 ‘‘(B) CRIMINAL BACKGROUND RECORD

17 CHECK REQUESTED BY HOME STATE.—An in18 surance producer who is licensed in a State and 

19 who has undergone a national criminal back20 ground record check of its Federal Bureau of 

21 Investigation identification record during the 2- 

22 year period preceding the date of submission of 

23 an application to become a member of the Asso24 ciation, in compliance with such requirements 

25 as a condition for such licensure, shall be 


tkelley on DSK3SPTVN1PROD with BILLS
6 

•S 534 RS

1 deemed to have undergone a national criminal 

2 background record check for purposes of sub3 paragraph (A). 

4 ‘‘(C) CRIMINAL BACKGROUND RECORD

5 CHECK REQUESTED BY ASSOCIATION.— 

6 ‘‘(i) IN GENERAL.—The Association 

7 shall, upon request by an insurance pro8 ducer licensed in a State, submit identi9 fication information obtained from the in10 surance producer, and a request for a na11 tional criminal background record check of 

12 the insurance producer, to the Federal Bu13 reau of 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 reasonable fees re20 quired to perform a criminal background 

21 record check and appropriate safeguards 

22 for maintaining confidentiality and security 

23 of the information. 

24 ‘‘(D) FORM OF REQUEST.—A submission 

25 under subparagraph (C)(i) shall include such 


tkelley on DSK3SPTVN1PROD with BILLS
7 

•S 534 RS

1 identification information as required by the At2 torney General concerning the person about 

3 whom the record is requested and a statement 

4 signed by the person authorizing the Associa5 tion to obtain the information. 

6 ‘‘(E) PROVISION OF INFORMATION BY AT7 TORNEY GENERAL.—Upon receiving a submis8 sion under subparagraph (C)(ii) from the Asso9 ciation, the Attorney General shall search all 

10 records of the Criminal Justice Information 

11 Services Division of the Federal Bureau of In12 vestigation that the Attorney General deems ap13 propriate for criminal history records cor14 responding to the identification information 

15 provided under subparagraph (D) and provide 

16 all information contained in the records that 

17 pertains to the request to the Association. 

18 ‘‘(F) LIMITATION ON PERMISSIBLE USES

19 OF INFORMATION.—The Association may use 

20 information provided under subparagraph (E) 

21 only— 

22 ‘‘(i) for purposes of determining com23 pliance with membership criteria estab24 lished by the Association; or 


tkelley on DSK3SPTVN1PROD with BILLS
8 

•S 534 RS

1 ‘‘(ii) to disclose to State insurance 

2 regulators, or Federal or State law en3 forcement agencies, in conformance with 

4 applicable law. 

5 ‘‘(G) APPLICANT ACCESS TO CRIMINAL

6 HISTORY RECORDS.—Notwithstanding subpara7 graph (F), an insurance producer shall have the 

8 right to obtain from the Association a copy of 

9 any criminal history record information con10 cerning the insurance producer that is provided 

11 to the Association under subparagraph (E). 

12 ‘‘(H) PENALTY FOR IMPROPER USE OR

13 DISCLOSURE.—Whoever knowingly uses any in14 formation provided under subparagraph (E) for 

15 a purpose not authorized in subparagraph (F), 

16 or discloses any such information to anyone not 

17 authorized to receive it, shall be fined under 

18 title 18, United States Code, imprisoned for not 

19 more than 2 years, or both. 

20 ‘‘(I) RELIANCE ON INFORMATION.—Nei21 ther the Association nor any of its directors, of22 ficers, or employees shall be liable in any action 

23 for using information provided under subpara24 graph (E) as permitted under subparagraph 


tkelley on DSK3SPTVN1PROD with BILLS
9 

•S 534 RS

1 (F) in good faith and in reasonable reliance on 

2 its accuracy. 

3 ‘‘(J) FEES.—The Attorney General may 

4 charge a reasonable fee to defray the expense of 

5 conducting the search and providing the infor6 mation under subparagraph (E), and any such 

7 fee shall be collected and remitted by the Asso8 ciation. 

9 ‘‘(K) RULE OF CONSTRUCTION.—Nothing 

10 in this paragraph shall be construed as— 

11 ‘‘(i) requiring a State insurance regu12 lator to perform criminal background 

13 checks under this section; or 

14 ‘‘(ii) limiting any other authority that 

15 allows access to criminal background 

16 records. 

17 ‘‘(L) REGULATIONS.—The Attorney Gen18 eral shall prescribe regulations to carry out this 

19 paragraph, which shall include— 

20 ‘‘(i) appropriate protections for ensur21 ing the confidentiality of information pro22 vided under subparagraph (E); and 

23 ‘‘(ii) procedures providing a reason24 able opportunity for an insurance producer 

25 to contest the accuracy of information reVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6401 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
10 

•S 534 RS

1 garding the insurance producer provided 

2 under subparagraph (E). 

3 ‘‘(M) INELIGIBILITY FOR MEMBERSHIP.— 

4 ‘‘(i) IN GENERAL.—The Association 

5 may, under reasonably consistently applied 

6 standards, deny membership to an insur7 ance producer on the basis of criminal his8 tory information provided under subpara9 graph (E), or where the insurance pro10 ducer has been subject to disciplinary ac11 tion, as described in paragraph (2). 

12 ‘‘(ii) RIGHTS OF APPLICANTS DENIED

13 MEMBERSHIP.—The Association shall no14 tify any insurance producer who is denied 

15 membership on the basis of criminal his16 tory record information provided under 

17 subparagraph (E) of the right of the insur18 ance producer to— 

19 ‘‘(I) obtain a copy of all criminal 

20 history record information provided to 

21 the Association under subparagraph 

22 (E) with respect to the insurance pro23 ducer; and 

24 ‘‘(II) challenge the accuracy and 

25 completeness of the information. 


tkelley on DSK3SPTVN1PROD with BILLS
11 

•S 534 RS

1 ‘‘(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRI2 TERIA.—The Association may establish membership cri3 teria that bear a reasonable relationship to the purposes 

4 for which the Association was established. 

5 ‘‘(c) ESTABLISHMENT OF CLASSES AND CATEGORIES

6 OF MEMBERSHIP.— 

7 ‘‘(1) CLASSES OF MEMBERSHIP.—The Associa8 tion may establish separate classes of membership, 

9 with separate criteria, if the Association reasonably 

10 determines that performance of different duties re11 quires different levels of education, training, experi12 ence, or other qualifications. 

13 ‘‘(2) BUSINESS ENTITIES.—The Association 

14 shall establish a class of membership and member15 ship criteria for business entities. A business entity 

16 that applies for membership shall be required to des17 ignate an individual Association member responsible 

18 for the compliance of the business entity with Asso19 ciation rules and the insurance laws, rules, and reg20 ulations of any State in which the business entity 

21 seeks to do business on the basis of Association 

22 membership. 

23 ‘‘(3) CATEGORIES.— 

24 ‘‘(A) SEPARATE CATEGORIES FOR INSUR25 ANCE PRODUCERS PERMITTED.—The AssociaVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6401 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
12 

•S 534 RS

1 tion may establish separate categories of mem2 bership for insurance producers and for other 

3 persons within each class, based on the types of 

4 licensing categories 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. The Association shall not 

17 establish criteria that unfairly limit the ability of a 

18 small insurance producer to become a member of the 

19 Association, including imposing discriminatory mem20 bership fees. 

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

22 under paragraph (1), the Association shall not adopt 

23 any qualification less protective to the public than 

24 that contained in the NAIC Producer Licensing 

25 Model Act in effect as of the date of enactment of 


tkelley on DSK3SPTVN1PROD with BILLS
13 

•S 534 RS

1 the National Association of Registered Agents and 

2 Brokers Reform Act of 2013, and shall consider the 

3 highest levels of insurance producer qualifications 

4 established under the licensing laws of the States. 

5 ‘‘(3) ASSISTANCE FROM STATES.— 

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

7 request a State to provide assistance in inves8 tigating and evaluating the eligibility of a pro9 spective member for membership in the Associa10 tion. 

11 ‘‘(B) RULE OF CONSTRUCTION.—Subpara12 graph (A) shall not be construed as requiring or 

13 authorizing any State to adopt new or addi14 tional requirements concerning the licensing or 

15 evaluation of insurance producers. 

16 ‘‘(4) DENIAL OF MEMBERSHIP.—The Associa17 tion may, based on reasonably consistently applied 

18 standards, deny membership to any State-licensed 

19 insurance producer for failure to meet the member20 ship criteria established by the Association. 

21 ‘‘(e) EFFECT OF MEMBERSHIP.— 

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

23 Membership in the Association shall— 

24 ‘‘(A) authorize an insurance producer to 

25 sell, solicit, or negotiate insurance in any State 


tkelley on DSK3SPTVN1PROD with BILLS
14 

•S 534 RS

1 for which the member pays the licensing fee set 

2 by the State for any line or lines of insurance 

3 specified in the home State license of the insur4 ance producer, and exercise all such incidental 

5 powers as shall be necessary to carry out such 

6 activities, including claims adjustments and set7 tlement to the extent permissible under the laws 

8 of the State, risk management, employee bene9 fits advice, retirement planning, and any other 

10 insurance-related consulting activities; 

11 ‘‘(B) be the equivalent of a nonresident in12 surance producer license for purposes of author13 izing the insurance producer to engage in the 

14 activities described in subparagraph (A) in any 

15 State where the member pays the licensing fee; 

16 and 

17 ‘‘(C) be the equivalent of a nonresident in18 surance producer license for the purpose of sub19 jecting an insurance producer to all laws, regu20 lations, provisions or other action of any State 

21 concerning revocation, suspension, or other en22 forcement action related to the ability of a 

23 member to engage in any activity within the 

24 scope of authority granted under this subsection 


tkelley on DSK3SPTVN1PROD with BILLS
15 

•S 534 RS

1 and to all State laws, regulations, provisions, 

2 and actions preserved under paragraph (5). 

3 ‘‘(2) VIOLENT CRIME CONTROL AND LAW EN4 FORCEMENT ACT OF 1994.—Nothing in this subtitle 

5 shall be construed to alter, modify, or supercede any 

6 requirement established by section 1033 of title 18, 

7 United States Code. 

8 ‘‘(3) AGENT FOR REMITTING FEES.—The Asso9 ciation shall act as an agent for any member for 

10 purposes of remitting licensing fees to any State 

11 pursuant to paragraph (1). 

12 ‘‘(4) REGULATOR NOTIFICATION.— 

13 ‘‘(A) IN GENERAL.—The Association shall 

14 notify the States and National Association of 

15 Insurance Commissioners (hereinafter referred 

16 to in this subtitle as ‘NAIC’) or its designee 

17 when an insurance producer has satisfied the 

18 membership criteria of this section. The States 

19 and NAIC or its designee shall have10 business 

20 days after the notification to provide the Asso21 ciation with evidence that the insurance pro22 ducer does not satisfy the criteria for member23 ship for consideration by the Association in its 

24 final membership determination. 


tkelley on DSK3SPTVN1PROD with BILLS
16 

•S 534 RS

1 ‘‘(B) ONGOING DISCLOSURES REQUIRED.— 

2 On an ongoing basis, the Association shall dis3 close to the States and NAIC or its designee 

4 the States in which each member is authorized 

5 to operate. The Association shall immediately 

6 notify the States and NAIC or its designee 

7 when a member is newly authorized to operate 

8 in one or more States, or is no longer author9 ized to operate in one or more States on the 

10 basis of Association membership. 

11 ‘‘(5) PRESERVATION OF STATE CONSUMER PRO12 TECTION AND MARKET CONDUCT REGULATION.—No 

13 provision of this section shall be construed as alter14 ing or affecting the applicability or continuing effec15 tiveness of any law, regulation, provision, or other 

16 action of any State, including any law, regulation, 

17 provision, or other action that— 

18 ‘‘(A) regulates market conduct, insurance 

19 producer conduct, or unfair trade practices; 

20 ‘‘(B) establishes consumer protections; or 

21 ‘‘(C) requires insurance producers to be 

22 appointed by a licensed or authorized insurer, 

23 to the extent that the law, regulation, provision, or 

24 other action is not inconsistent with the provisions 

25 of this subtitle related to market entry for nonVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6401 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
17 

•S 534 RS

1 resident insurance producers, and then only to the 

2 extent of the inconsistency. 

3 ‘‘(f) BIENNIAL RENEWAL.—Membership in the Asso4 ciation shall be renewed on a biennial basis. 

5 ‘‘(g) CONTINUING EDUCATION.— 

6 ‘‘(1) IN GENERAL.—The Association shall es7 tablish, as a condition of membership, continuing 

8 education requirements which shall be comparable to 

9 the continuing education requirements under the li10 censing laws of a majority of the States. 

11 ‘‘(2) STATE CONTINUING EDUCATION REQUIRE12 MENTS.—A member may not be required to satisfy 

13 continuing education requirements imposed under 

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

15 State other than the home State of the member. 

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

17 require a member to satisfy continuing education re18 quirements that are equivalent to any continuing 

19 education requirements of the home State of the 

20 member that have been satisfied by the member dur21 ing the applicable licensing period. 

22 ‘‘(4) LIMITATION ON ASSOCIATION.—The Asso23 ciation shall not directly or indirectly offer any con24 tinuing education courses for insurance producers. 

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


tkelley on DSK3SPTVN1PROD with BILLS
18 

•S 534 RS

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

2 may place an insurance producer that is a member 

3 of the Association on probation or suspend or revoke 

4 the membership of the insurance producer in the As5 sociation, or assess monetary fines or penalties, as 

6 the Association determines to be appropriate, if— 

7 ‘‘(A) the insurance producer fails to meet 

8 the applicable membership criteria or other 

9 rules of the Association; 

10 ‘‘(B) the insurance producer has been sub11 ject to disciplinary action pursuant to a final 

12 adjudicatory proceeding under the jurisdiction 

13 of a State insurance regulator; 

14 ‘‘(C) an insurance license held by the in15 surance producer has been suspended or re16 voked by a State insurance regulator; or 

17 ‘‘(D) the insurance producer has been con18 victed of a crime that would have resulted in 

19 the denial of membership pursuant to sub20 section (a)(4)(M)(i) at the time of application 

21 and the Association has received a copy of the 

22 final disposition from a court of competent ju23 risdiction. 


tkelley on DSK3SPTVN1PROD with BILLS
19 

•S 534 RS

1 ‘‘(2) VIOLATIONS OF ASSOCIATION RULES.— 

2 The Association shall have the power to investigate 

3 alleged violations of Association rules. 

4 ‘‘(3) REPORTING.—The Association shall imme5 diately notify NAIC or its designee when the mem6 bership of an insurance producer has been placed on 

7 probation or has been suspended, revoked, or other8 wise terminated, or when the Association has as9 sessed monetary fines or penalties. 

10 ‘‘(i) CONSUMER COMPLAINTS.— 

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

12 ‘‘(A) refer any complaint against a mem13 ber of the Association from a consumer relating 

14 to alleged misconduct or violations of State in15 surance laws to the State insurance regulator 

16 where the consumer resides and, when appro17 priate, to any additional State insurance regu18 lator, as determined by rules adopted by the 

19 Association; and 

20 ‘‘(B) make any related records and infor21 mation available to NAIC or its designee and to 

22 each State insurance regulator to whom the 

23 complaint is forwarded. 

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

25 Association shall maintain a toll-free number for 


tkelley on DSK3SPTVN1PROD with BILLS
20 

•S 534 RS

1 purposes of this subsection and, as practicable, other 

2 alternative means of communication with consumers, 

3 such as an Internet webpage. 

4 ‘‘(3) FINAL DISPOSITION OF INVESTIGATION.— 

5 State insurance regulators shall provide the Associa6 tion with information regarding the final disposition 

7 of a complaint referred pursuant to paragraph 

8 (1)(A), but nothing shall be construed to compel a 

9 State to release confidential investigation reports or 

10 other information protected by State law to the As11 sociation. 

12 ‘‘(j) INFORMATION SHARING.—The Association may 

13 share documents, materials, or other information, includ14 ing confidential and privileged documents, with a State, 

15 Federal, or international regulatory agency or enforce16 ment authority, or with NAIC or its designee, provided 

17 that the recipient has the authority and agrees to maintain 

18 the confidentiality or privileged status of the document, 

19 material, or other information. 

20 ‘‘SEC. 324. BOARD OF DIRECTORS. 

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

22 board of directors of the Association (hereafter in this sub23 title referred to as the ‘Board’), which shall have authority 

24 to govern and supervise all activities of the Association. 


tkelley on DSK3SPTVN1PROD with BILLS
21 

•S 534 RS

1 ‘‘(b) POWERS.—The Board shall have such of the 

2 powers and authority of the Association as may be speci3 fied in the bylaws of the Association. 

4 ‘‘(c) COMPOSITION.— 

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

6 13 members who shall be appointed by the Presi7 dent, by and with the advice and consent of the Sen8 ate, of whom— 

9 ‘‘(A) 8 shall be State insurance commis10 sioners appointed in the manner provided in 

11 paragraph (2); 

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

13 and casualty insurance producers; 

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

15 health insurance producers; 

16 ‘‘(D) 1 shall be a representative of prop17 erty and casualty insurers; and 

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

19 health insurers. 

20 ‘‘(2) STATE INSURANCE REGULATOR REP21 RESENTATIVES.— 

22 ‘‘(A) Before making any appointments 

23 pursuant to subparagraph (A) of paragraph 

24 (1), the President shall request a list of rec25 ommended candidates from NAIC, which shall 


tkelley on DSK3SPTVN1PROD with BILLS
22 

•S 534 RS

1 not be binding on the President. If NAIC fails 

2 to submit a list of recommendations within 15 

3 business days of the request, the President may 

4 make the requisite appointments without con5 sidering the views of NAIC. 

6 ‘‘(B) Not more than 4 members appointed 

7 to membership on the Board pursuant to sub8 paragraph (A) of paragraph (1) shall belong to 

9 the same political party. 

10 ‘‘(C) If fewer than 8 State insurance com11 missioners accept appointment to the Board, 

12 the President may appoint the remaining State 

13 insurance commissioner members of the Board 

14 from among individuals who are former State 

15 insurance commissioners, provided that any 

16 former insurance commissioner so appointed 

17 shall not be employed by or have a present di18 rect or indirect financial interest in any insurer, 

19 insurance producer, or other entity in the insur20 ance industry other than direct or indirect own21 ership of, or beneficial interest in, an insurance 

22 policy or annuity contract written or sold by an 

23 insurer. 

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

25 making any appointments pursuant to subparaVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6401 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
23 

•S 534 RS

1 graphs (B) through (E) of paragraph (1), the Presi2 dent may seek recommendations for candidates from 

3 national trade associations representing the category 

4 of individuals described, which shall not be binding 

5 on the President. 

6 ‘‘(4) STATE INSURANCE COMMISSIONER DE7 FINED.—For purposes of this subsection, the term 

8 ‘State insurance commissioner’ means a person who 

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

10 board, commission, or other body that is the prin11 cipal insurance regulatory authority for the State. 

12 ‘‘(d) TERMS.— 

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

14 member shall be for 2 years, except that— 

15 ‘‘(A) the term of— 

16 ‘‘(i) 4 of the State insurance commis17 sioner members of the Board initially ap18 pointed under subparagraph (A) of para19 graph (1); 

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

21 insurance producer members of the Board 

22 initially appointed under subparagraph (B) 

23 of paragraph (1); and 

24 ‘‘(iii) 1 of the insurer representative 

25 members of the Board initially appointed 


tkelley on DSK3SPTVN1PROD with BILLS
24 

•S 534 RS

1 under subparagraphs (D) and (E) of para2 graph (1), 

3 shall be 1 year, as designated by the President 

4 at the time of the nomination of the members; 

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

6 to serve after the expiration of the term to 

7 which the member was appointed until a suc8 cessor is qualified; and 

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

10 to fill a vacancy occurring before the expiration 

11 of the term for which the predecessor of the 

12 member was appointed shall be appointed only 

13 for the remainder of that term. 

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

15 may be reappointed to successive terms. 

16 ‘‘(e) INITIAL APPOINTMENTS.—The appointment of 

17 initial Board members shall be made no later than 90 days 

18 after the date of enactment of the National Association 

19 of Registered Agents and Brokers Reform Act of 2013. 

20 ‘‘(f) MEETINGS.— 

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

22 the call of the chairperson, as requested in writing 

23 to the chairperson by at least 5 members of the 

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

25 Association. 


tkelley on DSK3SPTVN1PROD with BILLS
25 

•S 534 RS

1 ‘‘(2) QUORUM REQUIRED.—A majority of direc2 tors shall constitute a quorum. 

3 ‘‘(3) VOTING.—Decisions of the Board shall re4 quire the approval of a majority of all directors 

5 present at a meeting, a quorum being present. 

6 ‘‘(4) INITIAL MEETING.—The Board shall hold 

7 its first meeting not later than 45 days after the 

8 date on which all initial members of the Board have 

9 been appointed. 

10 ‘‘(g) RESTRICTION ON CONFIDENTIAL INFORMA11 TION.—Members of the Board appointed pursuant to 

12 paragraph (3) of subsection (c) shall not have access to 

13 confidential information received by the Association in 

14 connection with complaints, investigations, or disciplinary 

15 proceedings involving insurance producers. 

16 ‘‘(h) ETHICS AND CONFLICTS OF INTEREST.—The 

17 Board shall issue and enforce an ethical conduct code to 

18 address permissible and prohibited activities of Board 

19 members and Association officers, employees, agents, or 

20 consultants. The code shall, at a minimum, include provi21 sions that prohibit any Board member or Association offi22 cer, employee, agent or consultant from— 

23 ‘‘(1) engaging in unethical conduct in the 

24 course of performing Association duties; 


tkelley on DSK3SPTVN1PROD with BILLS
26 

•S 534 RS

1 ‘‘(2) participating in the making or influencing 

2 the making of any Association decision, the outcome 

3 of which he or she knows or had reason to know 

4 would have a reasonably foreseeable material finan5 cial effect, distinguishable from its effect on the pub6 licly generally, on the person or a member of his or 

7 her immediate family; 

8 ‘‘(3) accepting any gift from any person or enti9 ty other than the Association that is given because 

10 of the position held by the person in the Association; 

11 ‘‘(4) making political contributions to any per12 son or entity on behalf of the Association; and 

13 ‘‘(5) lobbying or paying someone to lobby on be14 half of the Association. 

15 ‘‘SEC. 325. OFFICERS. 

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

17 shall consist of a chairperson and a vice chairperson of 

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

19 of the Association, and such other officers and assistant 

20 officers as may be deemed necessary. 

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

22 Board and the Association shall be elected or appointed 

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

24 be prescribed in the bylaws of the Association. 


tkelley on DSK3SPTVN1PROD with BILLS
27 

•S 534 RS

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

2 ‘‘(a) ADOPTION AND AMENDMENT OF BYLAWS AND

3 RULES.— 

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

5 Board shall submit to the President and NAIC any 

6 proposed bylaw or rules of the Association or any 

7 proposed amendment to the bylaws or rules, accom8 panied by a concise general statement of the basis 

9 and purpose of such proposal. Rules shall be promul10 gated in accordance with the Federal Administrative 

11 Procedure Act. 

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

13 or rule or proposed amendment to the bylaws or 

14 rules shall take effect, after notice published in the 

15 Federal Register and opportunity for comment, upon 

16 such date as the Association may designate, unless 

17 suspended under subsection (c) of section 330. 

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

19 ‘‘(1) SPECIFICATION OF CHARGES.—In any pro20 ceeding to determine whether membership shall be 

21 denied, suspended, revoked, or not renewed or to de22 termine whether a member of the Association should 

23 be placed on probation (in this section referred to as 

24 a ‘disciplinary action’) or whether to assess fines or 

25 monetary penalties, the Association shall bring spe26 cific charges, notify the member of the charges, give 


tkelley on DSK3SPTVN1PROD with BILLS
28 

•S 534 RS

1 the member an opportunity to defend against the 

2 charges, and keep a record. 

3 ‘‘(2) SUPPORTING STATEMENT.—A determina4 tion to take disciplinary action shall be supported by 

5 a statement setting forth— 

6 ‘‘(A) any act or practice in which the mem7 ber has been found to have been engaged; 

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

9 the rules or regulations under this subtitle, or 

10 the rules of the Association which any such act 

11 or practice is deemed to violate; and 

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

13 for the sanction. 

14 ‘‘(3) INELIGIBILITY OF PRIVATE SECTOR REP15 RESENTATIVES.—Members of the Board appointed 

16 pursuant to section 324(c)(3) shall not participate in 

17 any disciplinary action, and shall not have access to 

18 confidential information concerning the actions. 

19 ‘‘SEC. 327. POWERS. 

20 ‘‘In addition to all the powers conferred upon a non21 profit corporation by the District of Columbia Nonprofit 

22 Corporation Act, the Association shall have the following 

23 powers: 


tkelley on DSK3SPTVN1PROD with BILLS
29 

•S 534 RS

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

2 fees as the Association finds necessary to impose to 

3 cover the costs of its operations. 

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

5 rules governing the conduct of Association business 

6 and performance of its duties. 

7 ‘‘(3) To establish procedures for providing no8 tice and opportunity for comment pursuant to sec9 tion 326(a). 

10 ‘‘(4) To enter into and perform such agree11 ments as necessary to carry out its duties. 

12 ‘‘(5) To hire employees, professionals, or spe13 cialists, and elect or appoint officers, and to fix their 

14 compensation, define their duties and give them ap15 propriate authority to carry out the purposes of this 

16 subtitle, and determine their qualification; and to es17 tablish the Association’s personnel policies and pro18 grams relating to, among other things, conflicts of 

19 interest, rates of compensation, and qualifications of 

20 personnel. 

21 ‘‘(6) To borrow money. 

22 ‘‘(7) To secure funding for such amounts as the 

23 Association determines to be necessary and appro24 priate to organize and begin operations of the Asso25 ciation, which shall be treated as loans to be repaid 


tkelley on DSK3SPTVN1PROD with BILLS
30 

•S 534 RS

1 by the Association with interest at market rate, ex2 cept that the Board shall not secure funding from 

3 an insurer, insurance producer, or insurance associa4 tion, but may secure funding from NAIC. 

5 ‘‘SEC. 328. REPORT BY ASSOCIATION. 

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

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

8 the President and NAIC a written report regarding the 

9 conduct of its business, and the exercise of the other rights 

10 and powers granted by this subtitle, during such fiscal 

11 year. 

12 ‘‘(b) FINANCIAL STATEMENTS.—Each report sub13 mitted under subsection (a) with respect to any fiscal year 

14 shall include financial statements setting forth the finan15 cial position of the Association at the end of such fiscal 

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

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

18 ‘‘SEC. 329. LIABILITY OF THE ASSOCIATION AND THE DI19 RECTORS, OFFICERS, AND EMPLOYEES OF 

20 THE ASSOCIATION. 

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

22 deemed to be an insurer or insurance producer within the 

23 meaning of any State law, rule, regulation, or order regu24 lating or taxing insurers, insurance producers, or other en25 tities engaged in the business of insurance, including proVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6401 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
31 

•S 534 RS

1 visions imposing premium taxes, regulating insurer sol2 vency or financial condition, establishing guaranty funds 

3 and levying assessments, or requiring claims settlement 

4 practices. 

5 ‘‘(b) LIABILITY OF DIRECTORS, OFFICERS, AND EM6 PLOYEES.—No director, officer, or employee of the Asso7 ciation shall be personally liable to any person for any ac8 tion taken or omitted in good faith in any matter within 

9 the scope of their responsibilities in connection with the 

10 Association. 

11 ‘‘SEC. 330. PRESIDENTIAL OVERSIGHT. 

12 ‘‘(a) REMOVAL OF BOARD.—If the President deter13 mines that the Association is acting in a manner contrary 

14 to the interests of the public or the purposes of this sub15 title or has failed to perform its duties under this subtitle, 

16 the President may remove the entire existing Board for 

17 the remainder of the term to which the members of the 

18 Board were appointed and appoint, in accordance with 

19 section 324 and with the advice and consent of the Senate, 

20 new members to fill the vacancies on the Board for the 

21 remainder of the terms. 

22 ‘‘(b) REMOVAL OF BOARD MEMBER.—The President 

23 may remove a member of the Board only for neglect of 

24 duty or malfeasance in office. 


tkelley on DSK3SPTVN1PROD with BILLS
32 

•S 534 RS

1 ‘‘(c) SUSPENSION OF RULES OR ACTIONS.—Fol2 lowing notice to the Board, the President, or a person des3 ignated by the President for such purpose, may suspend 

4 the effectiveness of any rule, or prohibit any action, of the 

5 Association which the President or the designee deter6 mines is contrary to the purposes of this subtitle. 

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

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

9 regulations, provisions, or other actions purporting to reg10 ulate insurance producers shall be preempted to the extent 

11 provided in subsection (b). 

12 ‘‘(b) PROHIBITED ACTIONS.— 

13 ‘‘(1) IN GENERAL.—No State shall— 

14 ‘‘(A) impede the activities of, take any ac15 tion against, or apply any provision of law or 

16 regulation arbitrarily or discriminatorily to, any 

17 insurance producer because that insurance pro18 ducer or any affiliate plans to become, has ap19 plied to become, or is a member of the Associa20 tion; 

21 ‘‘(B) impose any requirement upon a mem22 ber of the Association that it pay fees different 

23 from those required to be paid to that State 

24 were it not a member of the Association; or 


tkelley on DSK3SPTVN1PROD with BILLS
33 

•S 534 RS

1 ‘‘(C) impose any continuing education re2 quirements on any nonresident insurance pro3 ducer that is a member of the Association. 

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

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

6 shall— 

7 ‘‘(A) impose any licensing, personal or cor8 porate qualifications, education, training, expe9 rience, residency, continuing education, or 

10 bonding requirement upon a member of the As11 sociation that is different from the criteria for 

12 membership in the Association or renewal of 

13 such membership; 

14 ‘‘(B) impose any requirement upon a mem15 ber of the Association that it be licensed, reg16 istered, or otherwise qualified to do business or 

17 remain in good standing in the State, including 

18 any requirement that the insurance producer 

19 register as a foreign company with the sec20 retary of state or equivalent State official; 

21 ‘‘(C) require that a member of the Associa22 tion submit to a criminal history record check 

23 as a condition of doing business in the State; or 

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

25 appointment requirements upon a member of 


tkelley on DSK3SPTVN1PROD with BILLS
34 

•S 534 RS

1 the Association, or require a member of the As2 sociation to be authorized to operate as an in3 surance producer, in order to sell, solicit, or ne4 gotiate insurance for commercial property and 

5 casualty risks to an insured with risks located 

6 in more than one State, if the member is li7 censed or otherwise authorized to operate in the 

8 State where the insured maintains its principal 

9 place of business and the contract of insurance 

10 insures risks located in that State. 

11 ‘‘(3) PRESERVATION OF STATE DISCIPLINARY

12 AUTHORITY.—Nothing in this section may be con13 strued to prohibit a State from investigating and 

14 taking appropriate disciplinary action, including sus15 pension or revocation of authority of an insurance 

16 producer to do business in a State, in accordance 

17 with State law and that is not inconsistent with the 

18 provisions of this section, against a member of the 

19 Association as a result of a complaint or for any al20 leged activity, regardless of whether the activity oc21 curred before or after the insurance producer com22 menced doing business in the State pursuant to As23 sociation membership. 


tkelley on DSK3SPTVN1PROD with BILLS
35 

•S 534 RS

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

2 ‘‘(a) COORDINATION WITH STATE INSURANCE REGU3 LATORS.—The Association may— 

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

5 NAIC or any other appropriate entity as a central 

6 clearinghouse, through which members of the Asso7 ciation may pursuant to section 323(e) disclose their 

8 intent to operate in 1 or more States and pay the 

9 licensing fees to the appropriate States; and 

10 ‘‘(2) establish a national database for the collec11 tion of regulatory information concerning the activi12 ties of insurance producers or contract with NAIC 

13 or any other entity to utilize such a database. 

14 ‘‘(b) COORDINATION WITH THE FINANCIAL INDUS15 TRY REGULATORY AUTHORITY.—The Association shall 

16 coordinate with the Financial Industry Regulatory Au17 thority in order to ease any administrative burdens that 

18 fall on persons that are members of both associations, con19 sistent with the requirements of this subtitle and the Fed20 eral securities laws. 

21 ‘‘SEC. 333. RIGHT OF ACTION. 

22 ‘‘(a) RIGHT OF ACTION.—Any person aggrieved by 

23 a decision or action of the Association may, after reason24 ably exhausting available avenues for resolution within the 

25 Association, commence a civil action in an appropriate 


tkelley on DSK3SPTVN1PROD with BILLS
36 

•S 534 RS

1 United States district court, and obtain all appropriate re2 lief. 

3 ‘‘(b) ASSOCIATION INTERPRETATIONS.—In any such 

4 action, the court shall give appropriate weight to the Asso5 ciation’s interpretation of its bylaws and this subtitle. 

6 ‘‘SEC. 334. DEFINITIONS. 

7 ‘‘For purposes of this subtitle, the following defini8 tions shall apply: 

9 ‘‘(1) BUSINESS ENTITY.—The term ‘business 

10 entity’ means a corporation, association, partnership, 

11 limited liability company, limited liability partner12 ship, or other legal entity. 

13 ‘‘(2) HOME STATE.—The term ‘home State’ 

14 means the State in which the insurance producer 

15 maintains its principal place of residence or business 

16 and is licensed to act as an insurance producer. 

17 ‘‘(3) INSURANCE.—The term ‘insurance’ means 

18 any product, other than title insurance or bail 

19 bonds, defined or regulated as insurance by the ap20 propriate State insurance regulatory authority. 

21 ‘‘(4) INSURANCE PRODUCER.—The term ‘insur22 ance producer’ means any insurance agent or 

23 broker, excess or surplus lines broker or agent, in24 surance consultant, limited insurance representative, 

25 and any other individual or entity that sells, solicits, 


tkelley on DSK3SPTVN1PROD with BILLS
37 

•S 534 RS

1 or negotiates policies of insurance or offers advice, 

2 counsel, opinions or services related to insurance. 

3 ‘‘(5) PRINCIPAL PLACE OF BUSINESS.—The 

4 term ‘principal place of business’ means the State in 

5 which an insurance producer maintains the head6 quarters of the insurance producer and, in the case 

7 of a business entity, where high-level officers of the 

8 entity direct, control, and coordinate the business 

9 activities of the business entity. 

10 ‘‘(6) PRINCIPAL PLACE OF RESIDENCE.—The 

11 term ‘principal place of residence’ means the State 

12 in which an insurance producer resides for the great13 est number of days during a calendar year. 

14 ‘‘(7) STATE.—The term ‘State’ includes any 

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

16 United States, and Puerto Rico, Guam, American 

17 Samoa, the Trust Territory of the Pacific Islands, 

18 the Virgin Islands, and the Northern Mariana Is19 lands. 

20 ‘‘(8) STATE LAW.— 

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

22 includes all laws, decisions, rules, regulations, 

23 or other State action having the effect of law, 

24 of any State. 


tkelley on DSK3SPTVN1PROD with BILLS
38 

•S 534 RS

1 ‘‘(B) LAWS APPLICABLE IN THE DISTRICT

2 OF COLUMBIA.—A law of the United States ap3 plicable only to or within the District of Colum4 bia shall be treated as a State law rather than 

5 a law of the United States.’’. 

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

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

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

9 the following new items: 

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

‘‘Sec. 321. National Association of Registered Agents and Brokers. 

‘‘Sec. 322. Purpose. 

‘‘Sec. 323. Membership. 

‘‘Sec. 324. Board of directors. 

‘‘Sec. 325. Officers. 

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

‘‘Sec. 327. Powers. 

‘‘Sec. 328. Report by Association. 

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

‘‘Sec. 330. Presidential oversight. 

‘‘Sec. 331. Relationship to State law. 

‘‘Sec. 332. Coordination with other regulators. 

‘‘Sec. 333. Right of action. 

‘‘Sec. 334. Definitions.’’. 

10 SECTION 1. SHORT TITLE. 

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

12 of Registered Agents and Brokers Reform Act of 2013’’. 


tkelley on DSK3SPTVN1PROD with BILLS
39 

•S 534 RS

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 amend6 ed 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 (re13 ferred to in this subtitle as the ‘Association’). 

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

15 ‘‘(1) be a nonprofit corporation; 

16 ‘‘(2) not be an agent or instrumentality of the 

17 Federal Government; 

18 ‘‘(3) be an independent organization that may 

19 not be merged with or into any other private or pub20 lic entity; and 

21 ‘‘(4) except as otherwise provided in this subtitle, 

22 be subject to, and have all the powers conferred upon, 

23 a nonprofit corporation by the District of Columbia 

24 Nonprofit Corporation Act (D.C. Code, sec. 29–301.01 

25 et seq.) or any successor thereto. 


tkelley on DSK3SPTVN1PROD with BILLS
40 

•S 534 RS

1 ‘‘SEC. 322. PURPOSE. 

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

3 mechanism through which licensing, continuing education, 

4 and other nonresident insurance producer qualification re5 quirements and conditions may be adopted and applied on 

6 a multi-state basis without affecting the laws, rules, and 

7 regulations, and preserving the rights of a State, pertaining 

8 to— 

9 ‘‘(1) licensing, continuing education, and other 

10 qualification requirements of insurance producers 

11 that are not members of the Association; 

12 ‘‘(2) resident or nonresident insurance producer 

13 appointment requirements; 

14 ‘‘(3) supervising and disciplining resident and 

15 nonresident insurance producers; 

16 ‘‘(4) establishing licensing fees for resident and 

17 nonresident insurance producers so that there is no 

18 loss of insurance producer licensing revenue to the 

19 State; and 

20 ‘‘(5) prescribing and enforcing laws and regula21 tions regulating the conduct of resident and non22 resident insurance producers. 

23 ‘‘SEC. 323. MEMBERSHIP. 

24 ‘‘(a) ELIGIBILITY.— 

25 ‘‘(1) IN GENERAL.—Any insurance producer li26 censed in its home State shall, subject to paragraphs 


tkelley on DSK3SPTVN1PROD with BILLS
41 

•S 534 RS

1 (2) and (4), be eligible to become a member of the As2 sociation. 

3 ‘‘(2) INELIGIBILITY FOR SUSPENSION OR REV4 OCATION OF LICENSE.—Subject to paragraph (3), an 

5 insurance producer is not eligible to become a member 

6 of the Association if a State insurance regulator has 

7 suspended or revoked the insurance license of the in8 surance producer in that State. 

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

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

11 if— 

12 ‘‘(A) the State insurance regulator reissues 

13 or renews the license of the insurance producer 

14 in the State in which the license was suspended 

15 or revoked, or otherwise terminates or vacates the 

16 suspension or revocation; or 

17 ‘‘(B) the suspension or revocation expires or 

18 is subsequently overturned by a court of com19 petent jurisdiction. 

20 ‘‘(4) CRIMINAL HISTORY RECORD CHECK RE21 QUIRED.— 

22 ‘‘(A) IN GENERAL.—An insurance producer 

23 who is an individual shall not be eligible to be24 come a member of the Association unless the in25 surance producer has undergone a criminal hisVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6203 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
42 

•S 534 RS

1 tory record check that complies with regulations 

2 prescribed by the Attorney General of the United 

3 States under subparagraph (K). 

4 ‘‘(B) CRIMINAL HISTORY RECORD CHECK

5 REQUESTED BY HOME STATE.—An insurance 

6 producer who is licensed in a State and who has 

7 undergone a criminal history record check dur8 ing the 2-year period preceding the date of sub9 mission of an application to become a member of 

10 the Association, in compliance with a require11 ment to undergo such criminal history record 

12 check as a condition for such licensure in the 

13 State, shall be deemed to have undergone a 

14 criminal history record check for purposes of 

15 subparagraph (A). 

16 ‘‘(C) CRIMINAL HISTORY RECORD CHECK

17 REQUESTED BY ASSOCIATION.— 

18 ‘‘(i) IN GENERAL.—The Association 

19 shall, upon request by an insurance pro20 ducer licensed in a State, submit identifica21 tion information obtained from the insur22 ance producer, and a request for a criminal 

23 history record check of the insurance pro24 ducer, to the Federal Bureau of Investiga25 tion. 


tkelley on DSK3SPTVN1PROD with BILLS
43 

•S 534 RS

1 ‘‘(ii) PROCEDURES.—The board of di2 rectors of the Association (referred to in this 

3 subtitle as the ‘Board’) shall prescribe pro4 cedures for obtaining and utilizing identi5 fication information and criminal history 

6 record information, including the establish7 ment of reasonable fees required to perform 

8 a criminal history record check and appro9 priate safeguards for maintaining confiden10 tiality and security of the information. 

11 ‘‘(D) FORM OF REQUEST.—A submission 

12 under subparagraph (C)(i) shall include such 

13 identification information as is required by the 

14 Attorney General concerning the person about 

15 whom the criminal history record check is re16 quested, and a statement signed by the person 

17 authorizing the Attorney General to provide the 

18 information to the Association and for the Asso19 ciation to receive the information. 

20 ‘‘(E) PROVISION OF INFORMATION BY AT21 TORNEY GENERAL.—Upon receiving a submis22 sion under subparagraph (C)(i) from the Asso23 ciation, the Attorney General shall search all 

24 criminal history records of the Federal Bureau of 

25 Investigation, including records of the Criminal 


tkelley on DSK3SPTVN1PROD with BILLS
44 

•S 534 RS

1 Justice Information Services Division of the Fed2 eral Bureau of Investigation, that the Attorney 

3 General determines appropriate for criminal his4 tory records corresponding to the identification 

5 information provided under subparagraph (D) 

6 and provide all criminal history record informa7 tion included in the request to the Association. 

8 ‘‘(F) LIMITATION ON PERMISSIBLE USES OF

9 INFORMATION.—Any information provided to the 

10 Association under subparagraph (E) may only— 

11 ‘‘(i) be used for purposes of deter12 mining compliance with membership cri13 teria established by the Association; 

14 ‘‘(ii) be disclosed to State insurance 

15 regulators, or Federal or State law enforce16 ment agencies, in conformance with appli17 cable law; or 

18 ‘‘(iii) be disclosed, upon request, to the 

19 insurance producer to whom the criminal 

20 history record information relates. 

21 ‘‘(G) PENALTY FOR IMPROPER USE OR DIS22 CLOSURE.—Whoever knowingly uses any infor23 mation provided under subparagraph (E) for a 

24 purpose not authorized in subparagraph (F), or 

25 discloses any such information to anyone not auVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6203 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
45 

•S 534 RS

1 thorized to receive it, shall be fined under title 

2 18, United States Code, imprisoned for not more 

3 than 2 years, or both. 

4 ‘‘(H) RELIANCE ON INFORMATION.—Neither 

5 the Association nor any of its Board members, 

6 officers, or employees shall be liable in any ac7 tion for using information provided under sub8 paragraph (E) as permitted under subparagraph 

9 (F) in good faith and in reasonable reliance on 

10 its accuracy. 

11 ‘‘(I) FEES.—The Attorney General may 

12 charge a reasonable fee for conducting the search 

13 and providing the information under subpara14 graph (E), and any such fee shall be collected 

15 and remitted by the Association to the Attorney 

16 General. 

17 ‘‘(J) RULE OF CONSTRUCTION.—Nothing in 

18 this paragraph shall be construed as— 

19 ‘‘(i) requiring a State insurance regu20 lator to perform criminal history record 

21 checks under this section; or 

22 ‘‘(ii) limiting any other authority that 

23 allows access to criminal history records. 


tkelley on DSK3SPTVN1PROD with BILLS
46 

•S 534 RS

1 ‘‘(K) REGULATIONS.—The Attorney General 

2 shall prescribe regulations to carry out this 

3 paragraph, which shall include— 

4 ‘‘(i) appropriate protections for ensur5 ing the confidentiality of information pro6 vided under subparagraph (E); and 

7 ‘‘(ii) procedures providing a reasonable 

8 opportunity for an insurance producer to 

9 contest the accuracy of information regard10 ing the insurance producer provided under 

11 subparagraph (E). 

12 ‘‘(L) INELIGIBILITY FOR MEMBERSHIP.— 

13 ‘‘(i) IN GENERAL.—The Association 

14 may, under reasonably consistently applied 

15 standards, deny membership to an insur16 ance producer on the basis of criminal his17 tory record information provided under sub18 paragraph (E), or where the insurance pro19 ducer has been subject to disciplinary ac20 tion, as described in paragraph (2). 

21 ‘‘(ii) RIGHTS OF APPLICANTS DENIED

22 MEMBERSHIP.—The Association shall notify 

23 any insurance producer who is denied mem24 bership on the basis of criminal history 

25 record information provided under subparaVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6203 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
47 

•S 534 RS

1 graph (E) of the right of the insurance pro2 ducer to— 

3 ‘‘(I) obtain a copy of all criminal 

4 history record information provided to 

5 the Association under subparagraph 

6 (E) with respect to the insurance pro7 ducer; and 

8 ‘‘(II) challenge the denial of mem9 bership based on the accuracy and 

10 completeness of the information. 

11 ‘‘(M) DEFINITION.—For purposes of this 

12 paragraph, the term ‘criminal history record 

13 check’ means a national background check of 

14 criminal history records of the Federal Bureau of 

15 Investigation. 

16 ‘‘(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRI17 TERIA.—The Association may establish membership criteria 

18 that bear a reasonable relationship to the purposes for 

19 which the Association was established. 

20 ‘‘(c) ESTABLISHMENT OF CLASSES AND CATEGORIES

21 OF MEMBERSHIP.— 

22 ‘‘(1) CLASSES OF MEMBERSHIP.—The Associa23 tion may establish separate classes of membership, 

24 with separate criteria, if the Association reasonably 

25 determines that performance of different duties reVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6203 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
48 

•S 534 RS

1 quires different levels of education, training, experi2 ence, or other qualifications. 

3 ‘‘(2) BUSINESS ENTITIES.—The Association shall 

4 establish a class of membership and membership cri5 teria for business entities. A business entity that ap6 plies for membership shall be required to designate an 

7 individual Association member responsible for the 

8 compliance of the business entity with Association 

9 standards and the insurance laws, rules, and regula10 tions of any State in which the business entity seeks 

11 to do business on the basis of Association membership. 

12 ‘‘(3) CATEGORIES.— 

13 ‘‘(A) SEPARATE CATEGORIES FOR INSUR14 ANCE PRODUCERS PERMITTED.—The Association 

15 may establish separate categories of membership 

16 for insurance producers and for other persons or 

17 entities within each class, based on the types of 

18 licensing categories that exist under State laws. 

19 ‘‘(B) SEPARATE TREATMENT FOR DEPOSI20 TORY INSTITUTIONS PROHIBITED.—No special 

21 categories of membership, and no distinct mem22 bership criteria, shall be established for members 

23 that are depository institutions or for employees, 

24 agents, or affiliates of depository institutions. 

25 ‘‘(d) MEMBERSHIP CRITERIA.— 


tkelley on DSK3SPTVN1PROD with BILLS
49 

•S 534 RS

1 ‘‘(1) IN GENERAL.—The Association may estab2 lish criteria for membership which shall include 

3 standards for personal qualifications, education, 

4 training, and experience. The Association shall not es5 tablish criteria that unfairly limit the ability of a 

6 small insurance producer to become a member of the 

7 Association, including imposing discriminatory mem8 bership fees. 

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

10 under paragraph (1), the Association shall not adopt 

11 any qualification less protective to the public than 

12 that contained in the National Association of Insur13 ance Commissioners (referred to in this subtitle as the 

14 ‘NAIC’) Producer Licensing Model Act in effect as of 

15 the date of enactment of the National Association of 

16 Registered Agents and Brokers Reform Act of 2013, 

17 and shall consider the highest levels of insurance pro18 ducer qualifications established under the licensing 

19 laws of the States. 

20 ‘‘(3) ASSISTANCE FROM STATES.— 

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

22 request a State to provide assistance in inves23 tigating and evaluating the eligibility of a pro24 spective member for membership in the Associa25 tion. 


tkelley on DSK3SPTVN1PROD with BILLS
50 

•S 534 RS

1 ‘‘(B) AUTHORIZATION OF INFORMATION

2 SHARING.—A submission under subsection 

3 (a)(4)(C)(i) made by an insurance producer li4 censed in a State shall include a statement 

5 signed by the person about whom the assistance 

6 is requested authorizing— 

7 ‘‘(i) the State to share information 

8 with the Association; and 

9 ‘‘(ii) the Association to receive the in10 formation. 

11 ‘‘(C) RULE OF CONSTRUCTION.—Subpara12 graph (A) shall not be construed as requiring or 

13 authorizing any State to adopt new or addi14 tional requirements concerning the licensing or 

15 evaluation of insurance producers. 

16 ‘‘(4) DENIAL OF MEMBERSHIP.—The Association 

17 may, based on reasonably consistently applied stand18 ards, deny membership to any State-licensed insur19 ance producer for failure to meet the membership cri20 teria established by the Association. 

21 ‘‘(e) EFFECT OF MEMBERSHIP.— 

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

23 Membership in the Association shall— 

24 ‘‘(A) authorize an insurance producer to 

25 sell, solicit, or negotiate insurance in any State 


tkelley on DSK3SPTVN1PROD with BILLS
51 

•S 534 RS

1 for which the member pays the licensing fee set 

2 by the State for any line or lines of insurance 

3 specified in the home State license of the insur4 ance producer, and exercise all such incidental 

5 powers as shall be necessary to carry out such 

6 activities, including claims adjustments and set7 tlement to the extent permissible under the laws 

8 of the State, risk management, employee benefits 

9 advice, retirement planning, and any other in10 surance-related consulting activities; 

11 ‘‘(B) be the equivalent of a nonresident in12 surance producer license for purposes of author13 izing the insurance producer to engage in the ac14 tivities described in subparagraph (A) in any 

15 State where the member pays the licensing fee; 

16 and 

17 ‘‘(C) be the equivalent of a nonresident in18 surance producer license for the purpose of sub19 jecting an insurance producer to all laws, regu20 lations, provisions or other action of any State 

21 concerning revocation, suspension, or other en22 forcement action related to the ability of a mem23 ber to engage in any activity within the scope of 

24 authority granted under this subsection and to 


tkelley on DSK3SPTVN1PROD with BILLS
52 

•S 534 RS

1 all State laws, regulations, provisions, and ac2 tions preserved under paragraph (5). 

3 ‘‘(2) VIOLENT CRIME CONTROL AND LAW EN4 FORCEMENT ACT OF 1994.—Nothing in this subtitle 

5 shall be construed to alter, modify, or supercede any 

6 requirement established by section 1033 of title 18, 

7 United States Code. 

8 ‘‘(3) AGENT FOR REMITTING FEES.—The Asso9 ciation shall act as an agent for any member for pur10 poses of remitting licensing fees to any State pursu11 ant to paragraph (1). 

12 ‘‘(4) NOTIFICATION OF ACTION.— 

13 ‘‘(A) IN GENERAL.—The Association shall 

14 notify the States (including State insurance reg15 ulators) and the NAIC when an insurance pro16 ducer has satisfied the membership criteria of 

17 this section. The States (including State insur18 ance regulators) shall have 10 business days after 

19 the date of the notification in order to provide 

20 the Association with evidence that the insurance 

21 producer does not satisfy the criteria for mem22 bership in the Association. 

23 ‘‘(B) ONGOING DISCLOSURES REQUIRED.— 

24 On an ongoing basis, the Association shall dis25 close to the States (including State insurance 


tkelley on DSK3SPTVN1PROD with BILLS
53 

•S 534 RS

1 regulators) and the NAIC a list of the States in 

2 which each member is authorized to operate. The 

3 Association shall immediately notify the States 

4 (including State insurance regulators) and the 

5 NAIC when a member is newly authorized to op6 erate in one or more States, or is no longer au7 thorized to operate in one or more States on the 

8 basis of Association membership. 

9 ‘‘(5) PRESERVATION OF CONSUMER PROTECTION

10 AND MARKET CONDUCT REGULATION.— 

11 ‘‘(A) IN GENERAL.—No provision of this 

12 section shall be construed as altering or affecting 

13 the applicability or continuing effectiveness of 

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

15 any State, including those described in subpara16 graph (B), to the extent that the State law, regu17 lation, provision, or other action is not incon18 sistent with the provisions of this subtitle related 

19 to market entry for nonresident insurance pro20 ducers, and then only to the extent of the incon21 sistency. 

22 ‘‘(B) PRESERVED REGULATIONS.—The laws, 

23 regulations, provisions, or other actions of any 

24 State referred to in subparagraph (A) include 


tkelley on DSK3SPTVN1PROD with BILLS
54 

•S 534 RS

1 laws, regulations, provisions, or other actions 

2 that— 

3 ‘‘(i) regulate market conduct, insur4 ance producer conduct, or unfair trade 

5 practices; 

6 ‘‘(ii) establish consumer protections; or 

7 ‘‘(iii) require insurance producers to be 

8 appointed by a licensed or authorized in9 surer. 

10 ‘‘(f) BIENNIAL RENEWAL.—Membership in the Asso11 ciation shall be renewed on a biennial basis. 

12 ‘‘(g) CONTINUING EDUCATION.— 

13 ‘‘(1) IN GENERAL.—The Association shall estab14 lish, as a condition of membership, continuing edu15 cation requirements which shall be comparable to the 

16 continuing education requirements under the licens17 ing laws of a majority of the States. 

18 ‘‘(2) STATE CONTINUING EDUCATION REQUIRE19 MENTS.—A member may not be required to satisfy 

20 continuing education requirements imposed under the 

21 laws, regulations, provisions, or actions of any State 

22 other than the home State of the member. 

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

24 require a member to satisfy continuing education re25 quirements that are equivalent to any continuing 


tkelley on DSK3SPTVN1PROD with BILLS
55 

•S 534 RS

1 education requirements of the home State of the mem2 ber that have been satisfied by the member during the 

3 applicable licensing period. 

4 ‘‘(4) LIMITATION ON THE ASSOCIATION.—The As5 sociation shall not directly or indirectly offer any 

6 continuing education courses for insurance producers. 

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

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

9 may place an insurance producer that is a member 

10 of the Association on probation or suspend or revoke 

11 the membership of the insurance producer in the Asso12 ciation, or assess monetary fines or penalties, as the 

13 Association determines to be appropriate, if— 

14 ‘‘(A) the insurance producer fails to meet 

15 the applicable membership criteria or other 

16 standards established by the Association; 

17 ‘‘(B) the insurance producer has been sub18 ject to disciplinary action pursuant to a final 

19 adjudicatory proceeding under the jurisdiction of 

20 a State insurance regulator; 

21 ‘‘(C) an insurance license held by the insur22 ance producer has been suspended or revoked by 

23 a State insurance regulator; or 

24 ‘‘(D) the insurance producer has been con25 victed of a crime that would have resulted in the 


tkelley on DSK3SPTVN1PROD with BILLS
56 

•S 534 RS

1 denial of membership pursuant to subsection 

2 (a)(4)(L)(i) at the time of application, and the 

3 Association has received a copy of the final dis4 position from a court of competent jurisdiction. 

5 ‘‘(2) VIOLATIONS OF ASSOCIATION STANDARDS.— 

6 The Association shall have the power to investigate al7 leged violations of Association standards. 

8 ‘‘(3) REPORTING.—The Association shall imme9 diately notify the States (including State insurance 

10 regulators) and the NAIC when the membership of an 

11 insurance producer has been placed on probation or 

12 has been suspended, revoked, or otherwise terminated, 

13 or when the Association has assessed monetary fines 

14 or penalties. 

15 ‘‘(i) CONSUMER COMPLAINTS.— 

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

17 ‘‘(A) refer any complaint against a member 

18 of the Association from a consumer relating to 

19 alleged misconduct or violations of State insur20 ance laws to the State insurance regulator where 

21 the consumer resides and, when appropriate, to 

22 any additional State insurance regulator, as de23 termined by standards adopted by the Associa24 tion; and 


tkelley on DSK3SPTVN1PROD with BILLS
57 

•S 534 RS

1 ‘‘(B) make any related records and infor2 mation available to each State insurance regu3 lator to whom the complaint is forwarded. 

4 ‘‘(2) TELEPHONE AND OTHER ACCESS.—The As5 sociation shall maintain a toll-free number for pur6 poses of this subsection and, as practicable, other al7 ternative means of communication with consumers, 

8 such as an Internet webpage. 

9 ‘‘(3) FINAL DISPOSITION OF INVESTIGATION.— 

10 State insurance regulators shall provide the Associa11 tion with information regarding the final disposition 

12 of a complaint referred pursuant to paragraph 

13 (1)(A), but nothing shall be construed to compel a 

14 State to release confidential investigation reports or 

15 other information protected by State law to the Asso16 ciation. 

17 ‘‘(j) INFORMATION SHARING.—The Association may— 

18 ‘‘(1) share documents, materials, or other infor19 mation, including confidential and privileged docu20 ments, with a State, Federal, or international govern21 mental entity or with the NAIC or other appropriate 

22 entity referenced in paragraphs (3) and (4), provided 

23 that the recipient has the authority and agrees to 

24 maintain the confidentiality or privileged status of 

25 the document, material, or other information; 


tkelley on DSK3SPTVN1PROD with BILLS
58 

•S 534 RS

1 ‘‘(2) limit the sharing of information as required 

2 under this subtitle with the NAIC or any other non3 governmental entity, in circumstances under which 

4 the Association determines that the sharing of such 

5 information is unnecessary to further the purposes of 

6 this subtitle; 

7 ‘‘(3) establish a central clearinghouse, or utilize 

8 the NAIC or another appropriate entity, as deter9 mined by the Association, as a central clearinghouse, 

10 for use by the Association and the States (including 

11 State insurance regulators), through which members 

12 of the Association may disclose their intent to operate 

13 in 1 or more States and pay the licensing fees to the 

14 appropriate States; and 

15 ‘‘(4) establish a database, or utilize the NAIC or 

16 another appropriate entity, as determined by the As17 sociation, as a database, for use by the Association 

18 and the States (including State insurance regulators) 

19 for the collection of regulatory information concerning 

20 the activities of insurance producers. 

21 ‘‘(k) EFFECTIVE DATE.—The provisions of this section 

22 shall take effect on the later of— 

23 ‘‘(1) the expiration of the 2-year period begin24 ning on the date of enactment of the National AssoVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00058 Fmt 6652 Sfmt 6203 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
59 

•S 534 RS

1 ciation of Registered Agents and Brokers Reform Act 

2 of 2013; and 

3 ‘‘(2) the date of incorporation of the Association. 

4 ‘‘SEC. 324. BOARD OF DIRECTORS. 

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

6 of directors of the Association, which shall have authority 

7 to govern and supervise all activities of the Association. 

8 ‘‘(b) POWERS.—The Board shall have such of the pow9 ers and authority of the Association as may be specified 

10 in the bylaws of the Association. 

11 ‘‘(c) COMPOSITION.— 

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

13 members who shall be appointed by the President, by 

14 and with the advice and consent of the Senate, in ac15 cordance with the procedures established under Senate 

Resolution 116 of the 112 16 th Congress, of whom— 

17 ‘‘(A) 8 shall be State insurance commis18 sioners appointed in the manner provided in 

19 paragraph (2), 1 of whom shall be designated by 

20 the President to serve as the chairperson of the 

21 Board until the Board elects one such State in22 surance commissioner Board member to serve as 

23 the chairperson of the Board; 


tkelley on DSK3SPTVN1PROD with BILLS
60 

•S 534 RS

1 ‘‘(B) 3 shall have demonstrated expertise 

2 and experience with property and casualty in3 surance producer licensing; and 

4 ‘‘(C) 2 shall have demonstrated expertise 

5 and experience with life or health insurance pro6 ducer licensing. 

7 ‘‘(2) STATE INSURANCE REGULATOR REPRESENT8 ATIVES.— 

9 ‘‘(A) RECOMMENDATIONS.—Before making 

10 any appointments pursuant to paragraph 

11 (1)(A), the President shall request a list of rec12 ommended candidates from the States through 

13 the NAIC, which shall not be binding on the 

14 President. If the NAIC fails to submit a list of 

15 recommendations not later than 15 business days 

16 after the date of the request, the President may 

17 make the requisite appointments without consid18 ering the views of the NAIC. 

19 ‘‘(B) POLITICAL AFFILIATION.—Not more 

20 than 4 Board members appointed under para21 graph (1)(A) shall belong to the same political 

22 party. 

23 ‘‘(C) FORMER STATE INSURANCE COMMIS24 SIONERS.— 


tkelley on DSK3SPTVN1PROD with BILLS
61 

•S 534 RS

1 ‘‘(i) IN GENERAL.—If, after offering 

2 each currently serving State insurance com3 missioner an appointment to the Board, 

4 fewer than 8 State insurance commissioners 

5 have accepted appointment to the Board, 

6 the President may appoint the remaining 

7 State insurance commissioner Board mem8 bers, as required under paragraph (1)(A), of 

9 the appropriate political party as required 

10 under subparagraph (B), from among indi11 viduals who are former State insurance 

12 commissioners. 

13 ‘‘(ii) LIMITATION.—A former State in14 surance commissioner appointed as de15 scribed in clause (i) may not be employed 

16 by or have any present direct or indirect fi17 nancial interest in any insurer, insurance 

18 producer, or other entity in the insurance 

19 industry, other than direct or indirect own20 ership of, or beneficial interest in, an insur21 ance policy or annuity contract written or 

22 sold by an insurer. 

23 ‘‘(D) SERVICE THROUGH TERM.—If a 

24 Board member appointed under paragraph 

25 (1)(A) ceases to be a State insurance commisVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6203 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
62 

•S 534 RS

1 sioner during the term of the Board member, the 

2 Board member shall cease to be a Board member. 

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

4 making any appointment pursuant to subparagraphs 

5 (B) and (C) of paragraph (1), the President may seek 

6 recommendations for candidates from groups rep7 resenting the category of individuals described, which 

8 shall not be binding on the President. 

9 ‘‘(4) STATE INSURANCE COMMISSIONER DE10 FINED.—For purposes of this subsection, the term 

11 ‘State insurance commissioner’ means a person who 

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

13 board, commission, or other body that is the primary 

14 insurance regulatory authority for the State. 

15 ‘‘(d) TERMS.— 

16 ‘‘(1) IN GENERAL.—Except as provided under 

17 paragraph (2), the term of service for each Board 

18 member shall be 2 years. 

19 ‘‘(2) EXCEPTIONS.— 

20 ‘‘(A) 1-YEAR TERMS.—The term of service 

21 shall be 1 year, as designated by the President 

22 at the time of the nomination of the subject 

23 Board members for— 

24 ‘‘(i) 4 of the State insurance commis25 sioner Board members initially appointed 


tkelley on DSK3SPTVN1PROD with BILLS
63 

•S 534 RS

1 under paragraph (1)(A), of whom not more 

2 than 2 shall belong to the same political 

3 party; 

4 ‘‘(ii) 1 of the Board members initially 

5 appointed under paragraph (1)(B); and 

6 ‘‘(iii) 1 of the Board members initially 

7 appointed under paragraph (1)(C). 

8 ‘‘(B) EXPIRATION OF TERM.—A Board 

9 member may continue to serve after the expira10 tion of the term to which the Board member was 

11 appointed for the earlier of 2 years or until a 

12 successor is appointed. 

13 ‘‘(C) MID-TERM APPOINTMENTS.—A Board 

14 member appointed to fill a vacancy occurring be15 fore the expiration of the term for which the 

16 predecessor of the Board member was appointed 

17 shall be appointed only for the remainder of that 

18 term. 

19 ‘‘(3) SUCCESSIVE TERMS.—Board members may 

20 be reappointed to successive terms. 

21 ‘‘(e) INITIAL APPOINTMENTS.—The appointment of 

22 initial Board members shall be made no later than 90 days 

23 after the date of enactment of the National Association of 

24 Registered Agents and Brokers Reform Act of 2013. 

25 ‘‘(f) MEETINGS.— 


tkelley on DSK3SPTVN1PROD with BILLS
64 

•S 534 RS

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

2 ‘‘(A) at the call of the chairperson; 

3 ‘‘(B) as requested in writing to the chair4 person by not fewer than 5 Board members; or 

5 ‘‘(C) as otherwise provided by the bylaws of 

6 the Association. 

7 ‘‘(2) QUORUM REQUIRED.—A majority of all 

8 Board members shall constitute a quorum. 

9 ‘‘(3) VOTING.—Decisions of the Board shall re10 quire the approval of a majority of all Board mem11 bers present at a meeting, a quorum being present. 

12 ‘‘(4) INITIAL MEETING.—The Board shall hold 

13 its first meeting not later than 45 days after the date 

14 on which all initial Board members have been ap15 pointed. 

16 ‘‘(g) RESTRICTION ON CONFIDENTIAL INFORMATION.— 

17 Board members appointed pursuant to subparagraphs (B) 

18 and (C) of subsection (c)(1) shall not have access to con19 fidential information received by the Association in connec20 tion with complaints, investigations, or disciplinary pro21 ceedings involving insurance producers. 

22 ‘‘(h) ETHICS AND CONFLICTS OF INTEREST.—The 

23 Board shall issue and enforce an ethical conduct code to 

24 address permissible and prohibited activities of Board 

25 members and Association officers, employees, agents, or conVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00064 Fmt 6652 Sfmt 6203 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
65 

•S 534 RS

1 sultants. The code shall, at a minimum, include provisions 

2 that prohibit any Board member or Association officer, em3 ployee, agent or consultant from— 

4 ‘‘(1) engaging in unethical conduct in the course 

5 of performing Association duties; 

6 ‘‘(2) participating in the making or influencing 

7 the making of any Association decision, the outcome 

8 of which the Board member, officer, employee, agent, 

9 or consultant knows or had reason to know would 

10 have a reasonably foreseeable material financial effect, 

11 distinguishable from its effect on the public generally, 

12 on the person or a member of the immediate family 

13 of the person; 

14 ‘‘(3) accepting any gift from any person or enti15 ty other than the Association that is given because of 

16 the position held by the person in the Association; 

17 ‘‘(4) making political contributions to any per18 son or entity on behalf of the Association; and 

19 ‘‘(5) lobbying or paying a person to lobby on be20 half of the Association. 

21 ‘‘(i) COMPENSATION.— 

22 ‘‘(1) IN GENERAL.—Except as provided in para23 graph (2), no Board member may receive any com24 pensation from the Association or any other person or 

25 entity on account of Board membership. 


tkelley on DSK3SPTVN1PROD with BILLS
66 

•S 534 RS

1 ‘‘(2) TRAVEL EXPENSES AND PER DIEM.—Board 

2 members may be reimbursed only by the Association 

3 for travel expenses, including per diem in lieu of sub4 sistence, at rates consistent with rates authorized for 

5 employees of Federal agencies under subchapter I of 

6 chapter 57 of title 5, United States Code, while away 

7 from home or regular places of business in perform8 ance of services for the Association. 

9 ‘‘SEC. 325. BYLAWS, STANDARDS, AND DISCIPLINARY AC10 TIONS. 

11 ‘‘(a) ADOPTION AND AMENDMENT OF BYLAWS AND

12 STANDARDS.— 

13 ‘‘(1) PROCEDURES.—The Association shall adopt 

14 procedures for the adoption of bylaws and standards 

15 that are similar to procedures under subchapter II of 

16 chapter 5 of title 5, United States Code (commonly 

17 known as the ‘Administrative Procedure Act’). 

18 ‘‘(2) COPY REQUIRED TO BE FILED.—The Board 

19 shall submit to the President, through the Department 

20 of the Treasury, and the States (including State in21 surance regulators), and shall publish on the website 

22 of the Association, all proposed bylaws and standards 

23 of the Association, or any proposed amendment to the 

24 bylaws or standards of the Association, accompanied 


tkelley on DSK3SPTVN1PROD with BILLS
67 

•S 534 RS

1 by a concise general statement of the basis and pur2 pose of such proposal. 

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

4 standard of the Association, and any proposed 

5 amendment to the bylaws or standards of the Associa6 tion, shall take effect, after notice under paragraph 

7 (2) and opportunity for public comment, on such date 

8 as the Association may designate, unless suspended 

9 under section 329(c). 

10 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in this 

11 section shall be construed to subject the Board or the 

12 Association to the requirements of subchapter II of 

13 chapter 5 of title 5, United States Code (commonly 

14 known as the ‘Administrative Procedure Act’). 

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

16 ‘‘(1) SPECIFICATION OF CHARGES.—In any pro17 ceeding to determine whether membership shall be de18 nied, suspended, revoked, or not renewed, or to deter19 mine whether a member of the Association should be 

20 placed on probation (referred to in this section as a 

21 ‘disciplinary action’) or whether to assess fines or 

22 monetary penalties, the Association shall bring spe23 cific charges, notify the member of the charges, give 

24 the member an opportunity to defend against the 

25 charges, and keep a record. 


tkelley on DSK3SPTVN1PROD with BILLS
68 

•S 534 RS

1 ‘‘(2) SUPPORTING STATEMENT.—A determina2 tion to take disciplinary action shall be supported by 

3 a statement setting forth— 

4 ‘‘(A) any act or practice in which the mem5 ber has been found to have been engaged; 

6 ‘‘(B) the specific provision of this subtitle or 

7 standard of the Association that any such act or 

8 practice is deemed to violate; and 

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

10 for the sanction. 

11 ‘‘(3) INELIGIBILITY OF PRIVATE SECTOR REP12 RESENTATIVES.—Board members appointed pursuant 

13 to section 324(c)(3) may not— 

14 ‘‘(A) participate in any disciplinary action 

15 or be counted toward establishing a quorum dur16 ing a disciplinary action; and 

17 ‘‘(B) have access to confidential information 

18 concerning any disciplinary action. 

19 ‘‘SEC. 326. POWERS. 

20 ‘‘In addition to all the powers conferred upon a non21 profit corporation by the District of Columbia Nonprofit 

22 Corporation Act, the Association shall have the power to— 

23 ‘‘(1) establish and collect such membership fees 

24 as the Association finds necessary to impose to cover 

25 the costs of its operations; 


tkelley on DSK3SPTVN1PROD with BILLS
69 

•S 534 RS

1 ‘‘(2) adopt, amend, and repeal bylaws, proce2 dures, or standards governing the conduct of Associa3 tion business and performance of its duties; 

4 ‘‘(3) establish procedures for providing notice 

5 and opportunity for comment pursuant to section 

6 325(a); 

7 ‘‘(4) enter into and perform such agreements as 

8 necessary to carry out the duties of the Association; 

9 ‘‘(5) hire employees, professionals, or specialists, 

10 and elect or appoint officers, and to fix their com11 pensation, define their duties and give them appro12 priate authority to carry out the purposes of this sub13 title, and determine their qualification; 

14 ‘‘(6) establish personnel policies of the Associa15 tion and programs relating to, among other things, 

16 conflicts of interest, rates of compensation, where ap17 plicable, and qualifications of personnel; 

18 ‘‘(7) borrow money; and 

19 ‘‘(8) secure funding for such amounts as the As20 sociation determines to be necessary and appropriate 

21 to organize and begin operations of the Association, 

22 which shall be treated as loans to be repaid by the As23 sociation with interest at market rate. 


tkelley on DSK3SPTVN1PROD with BILLS
70 

•S 534 RS

1 ‘‘SEC. 327. REPORT BY THE ASSOCIATION. 

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

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

4 President, through the Department of the Treasury, and the 

5 States (including State insurance regulators), and shall 

6 publish on the website of the Association, a written report 

7 regarding the conduct of its business, and the exercise of 

8 the other rights and powers granted by this subtitle, during 

9 such fiscal year. 

10 ‘‘(b) FINANCIAL STATEMENTS.—Each report submitted 

11 under subsection (a) with respect to any fiscal year shall 

12 include audited financial statements setting forth the finan13 cial position of the Association at the end of such fiscal year 

14 and the results of its operations (including the source and 

15 application of its funds) for such fiscal year. 

16 ‘‘SEC. 328. LIABILITY OF THE ASSOCIATION AND THE 

17 BOARD MEMBERS, OFFICERS, AND EMPLOY18 EES OF THE ASSOCIATION. 

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

20 deemed to be an insurer or insurance producer within the 

21 meaning of any State law, rule, regulation, or order regu22 lating or taxing insurers, insurance producers, or other en23 tities engaged in the business of insurance, including provi24 sions imposing premium taxes, regulating insurer solvency 

25 or financial condition, establishing guaranty funds and lev26 ying assessments, or requiring claims settlement practices. 


tkelley on DSK3SPTVN1PROD with BILLS
71 

•S 534 RS

1 ‘‘(b) LIABILITY OF BOARD MEMBERS, OFFICERS, AND

2 EMPLOYEES.—No Board member, officer, or employee of the 

3 Association shall be personally liable to any person for any 

4 action taken or omitted in good faith in any matter within 

5 the scope of their responsibilities in connection with the As6 sociation. 

7 ‘‘SEC. 329. PRESIDENTIAL OVERSIGHT. 

8 ‘‘(a) REMOVAL OF BOARD.—If the President deter9 mines that the Association is acting in a manner contrary 

10 to the interests of the public or the purposes of this subtitle 

11 or has failed to perform its duties under this subtitle, the 

12 President may remove the entire existing Board for the re13 mainder of the term to which the Board members were ap14 pointed and appoint, in accordance with section 324 and 

15 with the advice and consent of the Senate, in accordance 

16 with the procedures established under Senate Resolution 

116 of the 112 17 th Congress, new Board members to fill the 

18 vacancies on the Board for the remainder of the terms. 

19 ‘‘(b) REMOVAL OF BOARD MEMBER.—The President 

20 may remove a Board member only for neglect of duty or 

21 malfeasance in office. 

22 ‘‘(c) SUSPENSION OF BYLAWS AND STANDARDS AND

23 PROHIBITION OF ACTIONS.—Following notice to the Board, 

24 the President, or a person designated by the President for 

25 such purpose, may suspend the effectiveness of any bylaw 


tkelley on DSK3SPTVN1PROD with BILLS
72 

•S 534 RS

1 or standard, or prohibit any action, of the Association that 

2 the President or the designee determines is contrary to the 

3 purposes of this subtitle. 

4 ‘‘SEC. 330. RELATIONSHIP TO STATE LAW. 

5 ‘‘(a) PREEMPTION OF STATE LAWS.—State laws, regu6 lations, provisions, or other actions purporting to regulate 

7 insurance producers shall be preempted to the extent pro8 vided in subsection (b). 

9 ‘‘(b) PROHIBITED ACTIONS.— 

10 ‘‘(1) IN GENERAL.—No State shall— 

11 ‘‘(A) impede the activities of, take any ac12 tion against, or apply any provision of law or 

13 regulation arbitrarily or discriminatorily to, 

14 any insurance producer because that insurance 

15 producer or any affiliate plans to become, has 

16 applied to become, or is a member of the Associa17 tion; 

18 ‘‘(B) impose any requirement upon a mem19 ber of the Association that it pay fees different 

20 from those required to be paid to that State were 

21 it not a member of the Association; or 

22 ‘‘(C) impose any continuing education re23 quirements on any nonresident insurance pro24 ducer that is a member of the Association. 


tkelley on DSK3SPTVN1PROD with BILLS
73 

•S 534 RS

1 ‘‘(2) STATES OTHER THAN A HOME STATE.—No 

2 State, other than the home State of a member of the 

3 Association, shall— 

4 ‘‘(A) impose any licensing, personal or cor5 porate qualifications, education, training, expe6 rience, residency, continuing education, or bond7 ing requirement upon a member of the Associa8 tion that is different from the criteria for mem9 bership in the Association or renewal of such 

10 membership; 

11 ‘‘(B) impose any requirement upon a mem12 ber of the Association that it be licensed, reg13 istered, or otherwise qualified to do business or 

14 remain in good standing in the State, including 

15 any requirement that the insurance producer 

16 register as a foreign company with the secretary 

17 of state or equivalent State official; 

18 ‘‘(C) require that a member of the Associa19 tion submit to a criminal history record check as 

20 a condition of doing business in the State; or 

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

22 appointment requirements upon a member of the 

23 Association, or require a member of the Associa24 tion to be authorized to operate as an insurance 

25 producer, in order to sell, solicit, or negotiate inVerDate Mar 15 2010 22:18 Jul 29, 2013 Jkt 029200 PO 00000 Frm 00073 Fmt 6652 Sfmt 6203 E:\BILLS\S534.RS S534

tkelley on DSK3SPTVN1PROD with BILLS
74 

•S 534 RS

1 surance for commercial property and casualty 

2 risks to an insured with risks located in more 

3 than one State, if the member is licensed or oth4 erwise authorized to operate in the State where 

5 the insured maintains its principal place of 

6 business and the contract of insurance insures 

7 risks located in that State. 

8 ‘‘(3) PRESERVATION OF STATE DISCIPLINARY AU9 THORITY.—Nothing in this section may be construed 

10 to prohibit a State from investigating and taking ap11 propriate disciplinary action, including suspension 

12 or revocation of authority of an insurance producer 

13 to do business in a State, in accordance with State 

14 law and that is not inconsistent with the provisions 

15 of this section, against a member of the Association 

16 as a result of a complaint or for any alleged activity, 

17 regardless of whether the activity occurred before or 

18 after the insurance producer commenced doing busi19 ness in the State pursuant to Association member20 ship. 

21 ‘‘SEC. 331. COORDINATION WITH FINANCIAL INDUSTRY 

22 REGULATORY AUTHORITY. 

23 ‘‘The Association shall coordinate with the Financial 

24 Industry Regulatory Authority in order to ease any admin25 istrative burdens that fall on members of the Association 


tkelley on DSK3SPTVN1PROD with BILLS
75 

•S 534 RS

1 that are subject to regulation by the Financial Industry 

2 Regulatory Authority, consistent with the requirements of 

3 this subtitle and the Federal securities laws . 

4 ‘‘SEC. 332. RIGHT OF ACTION. 

5 ‘‘(a) RIGHT OF ACTION.—Any person aggrieved by a 

6 decision or action of the Association may, after reasonably 

7 exhausting available avenues for resolution within the Asso8 ciation, commence a civil action in an appropriate United 

9 States district court, and obtain all appropriate relief. 

10 ‘‘(b) ASSOCIATION INTERPRETATIONS.—In any action 

11 under subsection (a), the court shall give appropriate 

12 weight to the interpretation of the Association of its bylaws 

13 and standards and this subtitle. 

14 ‘‘SEC. 333. FEDERAL FUNDING PROHIBITED. 

15 ‘‘The Association may not receive, accept, or borrow 

16 any amounts from the Federal Government to pay for, or 

17 reimburse the Association for, the costs of establishing or 

18 operating the Association. 

19 ‘‘SEC. 334. DEFINITIONS. 

20 ‘‘For purposes of this subtitle, the following definitions 

21 shall apply: 

22 ‘‘(1) BUSINESS ENTITY.—The term ‘business en23 tity’ means a corporation, association, partnership, 

24 limited liability company, limited liability partner25 ship, or other legal entity. 


tkelley on DSK3SPTVN1PROD with BILLS
76 

•S 534 RS

1 ‘‘(2) DEPOSITORY INSTITUTION.—The term ‘de2 pository institution’ has the meaning as in section 3 

3 of the Federal Deposit Insurance Act (12 U.S.C. 

4 1813). 

5 ‘‘(3) HOME STATE.—The term ‘home State’ 

6 means the State in which the insurance producer 

7 maintains its principal place of residence or business 

8 and is licensed to act as an insurance producer. 

9 ‘‘(4) INSURANCE.—The term ‘insurance’ means 

10 any product, other than title insurance or bail bonds, 

11 defined or regulated as insurance by the appropriate 

12 State insurance regulatory authority. 

13 ‘‘(5) INSURANCE PRODUCER.—The term ‘insur14 ance producer’ means any insurance agent or broker, 

15 excess or surplus lines broker or agent, insurance con16 sultant, limited insurance representative, and any 

17 other individual or entity that sells, solicits, or nego18 tiates policies of insurance or offers advice, counsel, 

19 opinions or services related to insurance. 

20 ‘‘(6) INSURER.—The term ‘insurer’ has the 

21 meaning as in section 313(e)(2)(B) of title 31, United 

22 States Code . 

23 ‘‘(7) PRINCIPAL PLACE OF BUSINESS.—The term 

24 ‘principal place of business’ means the State in which 

25 an insurance producer maintains the headquarters of 


tkelley on DSK3SPTVN1PROD with BILLS
77 

•S 534 RS

1 the insurance producer and, in the case of a business 

2 entity, where high-level officers of the entity direct, 

3 control, and coordinate the business activities of the 

4 business entity. 

5 ‘‘(8) PRINCIPAL PLACE OF RESIDENCE.—The 

6 term ‘principal place of residence’ means the State in 

7 which an insurance producer resides for the greatest 

8 number of days during a calendar year. 

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

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

11 United States, and Puerto Rico, Guam, American 

12 Samoa, the Trust Territory of the Pacific Islands, the 

13 Virgin Islands, and the Northern Mariana Islands. 

14 ‘‘(10) STATE LAW.— 

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

16 includes all laws, decisions, rules, regulations, or 

17 other State action having the effect of law, of 

18 any State. 

19 ‘‘(B) LAWS APPLICABLE IN THE DISTRICT

20 OF COLUMBIA.—A law of the United States ap21 plicable only to or within the District of Colum22 bia shall be treated as a State law rather than 

23 a law of the United States.’’. 

24 (b) TECHNICAL AMENDMENT.—The table of contents 

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


tkelley on DSK3SPTVN1PROD with BILLS
78 

•S 534 RS

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

2 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. Bylaws, standards, and disciplinary actions. 

‘‘Sec. 326. Powers. 

‘‘Sec. 327. Report by the Association. 

‘‘Sec. 328. Liability of the Association and the Board members, officers, and employees of the Association. 

‘‘Sec. 329. Presidential oversight. 

‘‘Sec. 330. Relationship to State law. 

‘‘Sec. 331. Coordination with Financial Industry Regulatory Authority. 

‘‘Sec. 332. Right of action. 

‘‘Sec. 333. Federal funding prohibited. 

‘‘Sec. 334. Definitions.’’. 


tkelley on DSK3SPTVN1PROD with BILLS

tkelley on DSK3SPTVN1PROD with BILLS
Calendar No. 151 

113TH CONGRESS 

1ST SESSION S. 534 

[Report No. 113–82] 

A BILL 

To reform the National Association of Registered 

Agents and Brokers, and for other purposes. 

JULY 29, 2013 

Reported with an amendment 


tkelley on DSK3SPTVN1PROD with BILLS