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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 534 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                 S. 534

 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, and Mr. Heller) introduced 
the following bill; which was read twice and referred to the Committee 
                 on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
 To reform the National Association of Registered Agents and Brokers, 
                        and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Association of Registered 
Agents and Brokers Reform Act of 2013''.

SEC. 2. REESTABLISHMENT OF THE NATIONAL ASSOCIATION OF REGISTERED 
              AGENTS AND BROKERS.

    (a) In General.--Subtitle C of title III of the Gramm-Leach-Bliley 
Act (15 U.S.C. 6751 et seq.) is amended to read as follows:

  ``Subtitle C--National Association of Registered Agents and Brokers

``SEC. 321. NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS.

    ``(a) Establishment.--There is established the National Association 
of Registered Agents and Brokers (hereafter in this subtitle referred 
to as the `Association').
    ``(b) Status.--The Association shall--
            ``(1) be a nonprofit corporation;
            ``(2) have succession until dissolved by an Act of 
        Congress;
            ``(3) not be an agent or instrumentality of the United 
        States Government; and
            ``(4) except as otherwise provided in this subtitle, be 
        subject to, and have all the powers conferred upon, a nonprofit 
        corporation by the District of Columbia Nonprofit Corporation 
        Act (D.C. Code, sec. 29-301.01 et seq.).
    ``(c) Effective Date.--The provisions of this subtitle shall take 
effect upon the expiration of the 24-month period beginning on the date 
of enactment of the National Association of Registered Agents and 
Brokers Reform Act of 2013. Notwithstanding the effective date, such 
persons as are required to establish the Association shall take such 
actions as are necessary to establish the operations of the Association 
by the effective date.

``SEC. 322. PURPOSE.

    ``The purpose of the Association shall be to provide a mechanism 
through which licensing, continuing education, and other nonresident 
insurance producer qualification requirements and conditions may be 
adopted and applied on a multi-state basis without affecting the laws, 
rules, and regulations, and preserving the rights of a State, 
pertaining to--
            ``(1) licensing, continuing education, and other 
        qualification requirements of insurance producers who are not 
        members of the Association;
            ``(2) resident or nonresident insurance producer 
        appointment requirements;
            ``(3) supervising and disciplining resident and nonresident 
        insurance producers;
            ``(4) establishing licensing fees for resident and 
        nonresident insurance producers so that there is no loss of 
        insurance producer licensing revenue to the State; and
            ``(5) prescribing and enforcing laws and regulations 
        regulating the conduct of resident and nonresident insurance 
        producers.

``SEC. 323. MEMBERSHIP.

    ``(a) Eligibility.--
            ``(1) In general.--Any insurance producer licensed in its 
        home State shall, subject to paragraphs (2) and (4), be 
        eligible to become a member of the Association.
            ``(2) Ineligibility for suspension or revocation of 
        license.--Subject to paragraph (3), an insurance producer is 
        not eligible to become a member of the Association if a State 
        insurance regulator has suspended or revoked the insurance 
        license of the insurance producer in that State.
            ``(3) Resumption of eligibility.--Paragraph (2) shall cease 
        to apply to any insurance producer if--
                    ``(A) the State insurance regulator reissues or 
                renews the license of the insurance producer in the 
                State in which the license was suspended or revoked, or 
                otherwise terminates or vacates the suspension or 
                revocation; or
                    ``(B) the suspension or revocation expires or is 
                subsequently overturned by a court of competent 
                jurisdiction.
            ``(4) Criminal background record check required.--
                    ``(A) In general.--An insurance producer shall not 
                be eligible to become a member of the Association 
                unless the insurance producer has undergone a national 
                criminal background record check of its Federal Bureau 
                of Investigation identification record that complies 
                with regulations prescribed by the Attorney General 
                under subparagraph (L).
                    ``(B) Criminal background record check requested by 
                home state.--An insurance producer who is licensed in a 
                State and who has undergone a national criminal 
                background record check of its Federal Bureau of 
                Investigation identification record during the 2-year 
                period preceding the date of submission of an 
                application to become a member of the Association, in 
                compliance with such requirements as a condition for 
                such licensure, shall be deemed to have undergone a 
                national criminal background record check for purposes 
                of subparagraph (A).
                    ``(C) Criminal background record check requested by 
                association.--
                            ``(i) In general.--The Association shall, 
                        upon request by an insurance producer licensed 
                        in a State, submit identification information 
                        obtained from the insurance producer, and a 
                        request for a national criminal background 
                        record check of the insurance producer, to the 
                        Federal Bureau of Investigation.
                            ``(ii) Bylaws or rules.--The board of 
                        directors of the Association shall prescribe 
                        bylaws or rules for obtaining and utilizing 
                        identification information and criminal history 
                        record information, including the establishment 
                        of reasonable fees required to perform a 
                        criminal background record check and 
                        appropriate safeguards for maintaining 
                        confidentiality and security of the 
                        information.
                    ``(D) Form of request.--A submission under 
                subparagraph (C)(i) shall include such identification 
                information as required by the Attorney General 
                concerning the person about whom the record is 
                requested and a statement signed by the person 
                authorizing the Association to obtain the information.
                    ``(E) Provision of information by attorney 
                general.--Upon receiving a submission under 
                subparagraph (C)(ii) from the Association, the Attorney 
                General shall search all records of the Criminal 
                Justice Information Services Division of the Federal 
                Bureau of Investigation that the Attorney General deems 
                appropriate for criminal history records corresponding 
                to the identification information provided under 
                subparagraph (D) and provide all information contained 
                in the records that pertains to the request to the 
                Association.
                    ``(F) Limitation on permissible uses of 
                information.--The Association may use information 
                provided under subparagraph (E) only--
                            ``(i) for purposes of determining 
                        compliance with membership criteria established 
                        by the Association; or
                            ``(ii) to disclose to State insurance 
                        regulators, or Federal or State law enforcement 
                        agencies, in conformance with applicable law.
                    ``(G) Applicant access to criminal history 
                records.--Notwithstanding subparagraph (F), an 
                insurance producer shall have the right to obtain from 
                the Association a copy of any criminal history record 
                information concerning the insurance producer that is 
                provided to the Association under subparagraph (E).
                    ``(H) Penalty for improper use or disclosure.--
                Whoever knowingly uses any information provided under 
                subparagraph (E) for a purpose not authorized in 
                subparagraph (F), or discloses any such information to 
                anyone not authorized to receive it, shall be fined 
                under title 18, United States Code, imprisoned for not 
                more than 2 years, or both.
                    ``(I) Reliance on information.--Neither the 
                Association nor any of its directors, officers, or 
                employees shall be liable in any action for using 
                information provided under subparagraph (E) as 
                permitted under subparagraph (F) in good faith and in 
                reasonable reliance on its accuracy.
                    ``(J) Fees.--The Attorney General may charge a 
                reasonable fee to defray the expense of conducting the 
                search and providing the information under subparagraph 
                (E), and any such fee shall be collected and remitted 
                by the Association.
                    ``(K) Rule of construction.--Nothing in this 
                paragraph shall be construed as--
                            ``(i) requiring a State insurance regulator 
                        to perform criminal background checks under 
                        this section; or
                            ``(ii) limiting any other authority that 
                        allows access to criminal background records.
                    ``(L) Regulations.--The Attorney General shall 
                prescribe regulations to carry out this paragraph, 
                which shall include--
                            ``(i) appropriate protections for ensuring 
                        the confidentiality of information provided 
                        under subparagraph (E); and
                            ``(ii) procedures providing a reasonable 
                        opportunity for an insurance producer to 
                        contest the accuracy of information regarding 
                        the insurance producer provided under 
                        subparagraph (E).
                    ``(M) Ineligibility for membership.--
                            ``(i) In general.--The Association may, 
                        under reasonably consistently applied 
                        standards, deny membership to an insurance 
                        producer on the basis of criminal history 
                        information provided under subparagraph (E), or 
                        where the insurance producer has been subject 
                        to disciplinary action, as described in 
                        paragraph (2).
                            ``(ii) Rights of applicants denied 
                        membership.--The Association shall notify any 
                        insurance producer who is denied membership on 
                        the basis of criminal history record 
                        information provided under subparagraph (E) of 
                        the right of the insurance producer to--
                                    ``(I) obtain a copy of all criminal 
                                history record information provided to 
                                the Association under subparagraph (E) 
                                with respect to the insurance producer; 
                                and
                                    ``(II) challenge the accuracy and 
                                completeness of the information.
    ``(b) Authority To Establish Membership Criteria.--The Association 
may establish membership criteria that bear a reasonable relationship 
to the purposes for which the Association was established.
    ``(c) Establishment of Classes and Categories of Membership.--
            ``(1) Classes of membership.--The Association may establish 
        separate classes of membership, with separate criteria, if the 
        Association reasonably determines that performance of different 
        duties requires different levels of education, training, 
        experience, or other qualifications.
            ``(2) Business entities.--The Association shall establish a 
        class of membership and membership criteria for business 
        entities. A business entity that applies for membership shall 
        be required to designate an individual Association member 
        responsible for the compliance of the business entity with 
        Association rules and the insurance laws, rules, and 
        regulations of any State in which the business entity seeks to 
        do business on the basis of Association membership.
            ``(3) Categories.--
                    ``(A) Separate categories for insurance producers 
                permitted.--The Association may establish separate 
                categories of membership for insurance producers and 
                for other persons within each class, based on the types 
                of licensing categories that exist under State laws.
                    ``(B) Separate treatment for depository 
                institutions prohibited.--No special categories of 
                membership, and no distinct membership criteria, shall 
                be established for members which are depository 
                institutions or for employees, agents, or affiliates of 
                depository institutions.
    ``(d) Membership Criteria.--
            ``(1) In general.--The Association may establish criteria 
        for membership which shall include standards for personal 
        qualifications, education, training, and experience. The 
        Association shall not establish criteria that unfairly limit 
        the ability of a small insurance producer to become a member of 
        the Association, including imposing discriminatory membership 
        fees.
            ``(2) Qualifications.--In establishing criteria under 
        paragraph (1), the Association shall not adopt any 
        qualification less protective to the public than that contained 
        in the NAIC Producer Licensing Model Act in effect as of the 
        date of enactment of the National Association of Registered 
        Agents and Brokers Reform Act of 2013, and shall consider the 
        highest levels of insurance producer qualifications established 
        under the licensing laws of the States.
            ``(3) Assistance from states.--
                    ``(A) In general.--The Association may request a 
                State to provide assistance in investigating and 
                evaluating the eligibility of a prospective member for 
                membership in the Association.
                    ``(B) Rule of construction.--Subparagraph (A) shall 
                not be construed as requiring or authorizing any State 
                to adopt new or additional requirements concerning the 
                licensing or evaluation of insurance producers.
            ``(4) Denial of membership.--The Association may, based on 
        reasonably consistently applied standards, deny membership to 
        any State-licensed insurance producer for failure to meet the 
        membership criteria established by the Association.
    ``(e) Effect of Membership.--
            ``(1) Authority of association members.--Membership in the 
        Association shall--
                    ``(A) authorize an insurance producer to sell, 
                solicit, or negotiate insurance in any State for which 
                the member pays the licensing fee set by the State for 
                any line or lines of insurance specified in the home 
                State license of the insurance producer, and exercise 
                all such incidental powers as shall be necessary to 
                carry out such activities, including claims adjustments 
                and settlement to the extent permissible under the laws 
                of the State, risk management, employee benefits 
                advice, retirement planning, and any other insurance-
                related consulting activities;
                    ``(B) be the equivalent of a nonresident insurance 
                producer license for purposes of authorizing the 
                insurance producer to engage in the activities 
                described in subparagraph (A) in any State where the 
                member pays the licensing fee; and
                    ``(C) be the equivalent of a nonresident insurance 
                producer license for the purpose of subjecting an 
                insurance producer to all laws, regulations, provisions 
                or other action of any State concerning revocation, 
                suspension, or other enforcement action related to the 
                ability of a member to engage in any activity within 
                the scope of authority granted under this subsection 
                and to all State laws, regulations, provisions, and 
                actions preserved under paragraph (5).
            ``(2) Violent crime control and law enforcement act of 
        1994.--Nothing in this subtitle shall be construed to alter, 
        modify, or supercede any requirement established by section 
        1033 of title 18, United States Code.
            ``(3) Agent for remitting fees.--The Association shall act 
        as an agent for any member for purposes of remitting licensing 
        fees to any State pursuant to paragraph (1).
            ``(4) Regulator notification.--
                    ``(A) In general.--The Association shall notify the 
                States and National Association of Insurance 
                Commissioners (hereinafter referred to in this subtitle 
                as `NAIC') or its designee when an insurance producer 
                has satisfied the membership criteria of this section. 
                The States and NAIC or its designee shall have10 
                business days after the notification to provide the 
                Association with evidence that the insurance producer 
                does not satisfy the criteria for membership for 
                consideration by the Association in its final 
                membership determination.
                    ``(B) Ongoing disclosures required.--On an ongoing 
                basis, the Association shall disclose to the States and 
                NAIC or its designee the States in which each member is 
                authorized to operate. The Association shall 
                immediately notify the States and NAIC or its designee 
                when a member is newly authorized to operate in one or 
                more States, or is no longer authorized to operate in 
                one or more States on the basis of Association 
                membership.
            ``(5) Preservation of state consumer protection and market 
        conduct regulation.--No provision of this section shall be 
        construed as altering or affecting the applicability or 
        continuing effectiveness of any law, regulation, provision, or 
        other action of any State, including any law, regulation, 
        provision, or other action that--
                    ``(A) regulates market conduct, insurance producer 
                conduct, or unfair trade practices;
                    ``(B) establishes consumer protections; or
                    ``(C) requires insurance producers to be appointed 
                by a licensed or authorized insurer,
        to the extent that the law, regulation, provision, or other 
        action is not inconsistent with the provisions of this subtitle 
        related to market entry for nonresident insurance producers, 
        and then only to the extent of the inconsistency.
    ``(f) Biennial Renewal.--Membership in the Association shall be 
renewed on a biennial basis.
    ``(g) Continuing Education.--
            ``(1) In general.--The Association shall establish, as a 
        condition of membership, continuing education requirements 
        which shall be comparable to the continuing education 
        requirements under the licensing laws of a majority of the 
        States.
            ``(2) State continuing education requirements.--A member 
        may not be required to satisfy continuing education 
        requirements imposed under the laws, regulations, provisions, 
        or actions of any State other than the home State of the 
        member.
            ``(3) Reciprocity.--The Association shall not require a 
        member to satisfy continuing education requirements that are 
        equivalent to any continuing education requirements of the home 
        State of the member that have been satisfied by the member 
        during the applicable licensing period.
            ``(4) Limitation on association.--The Association shall not 
        directly or indirectly offer any continuing education courses 
        for insurance producers.
    ``(h) Probation, Suspension and Revocation.--
            ``(1) Disciplinary action.--The Association may place an 
        insurance producer that is a member of the Association on 
        probation or suspend or revoke the membership of the insurance 
        producer in the Association, or assess monetary fines or 
        penalties, as the Association determines to be appropriate, 
        if--
                    ``(A) the insurance producer fails to meet the 
                applicable membership criteria or other rules of the 
                Association;
                    ``(B) the insurance producer has been subject to 
                disciplinary action pursuant to a final adjudicatory 
                proceeding under the jurisdiction of a State insurance 
                regulator;
                    ``(C) an insurance license held by the insurance 
                producer has been suspended or revoked by a State 
                insurance regulator; or
                    ``(D) the insurance producer has been convicted of 
                a crime that would have resulted in the denial of 
                membership pursuant to subsection (a)(4)(M)(i) at the 
                time of application and the Association has received a 
                copy of the final disposition from a court of competent 
                jurisdiction.
            ``(2) Violations of association rules.--The Association 
        shall have the power to investigate alleged violations of 
        Association rules.
            ``(3) Reporting.--The Association shall immediately notify 
        NAIC or its designee when the membership of an insurance 
        producer has been placed on probation or has been suspended, 
        revoked, or otherwise terminated, or when the Association has 
        assessed monetary fines or penalties.
    ``(i) Consumer Complaints.--
            ``(1) In general.--The Association shall--
                    ``(A) refer any complaint against a member of the 
                Association from a consumer relating to alleged 
                misconduct or violations of State insurance laws to the 
                State insurance regulator where the consumer resides 
                and, when appropriate, to any additional State 
                insurance regulator, as determined by rules adopted by 
                the Association; and
                    ``(B) make any related records and information 
                available to NAIC or its designee and to each State 
                insurance regulator to whom the complaint is forwarded.
            ``(2) Telephone and other access.--The Association shall 
        maintain a toll-free number for purposes of this subsection 
        and, as practicable, other alternative means of communication 
        with consumers, such as an Internet webpage.
            ``(3) Final disposition of investigation.--State insurance 
        regulators shall provide the Association with information 
        regarding the final disposition of a complaint referred 
        pursuant to paragraph (1)(A), but nothing shall be construed to 
        compel a State to release confidential investigation reports or 
        other information protected by State law to the Association.
    ``(j) Information Sharing.--The Association may share documents, 
materials, or other information, including confidential and privileged 
documents, with a State, Federal, or international regulatory agency or 
enforcement authority, or with NAIC or its designee, provided that the 
recipient has the authority and agrees to maintain the confidentiality 
or privileged status of the document, material, or other information.

``SEC. 324. BOARD OF DIRECTORS.

    ``(a) Establishment.--There is established the board of directors 
of the Association (hereafter in this subtitle referred to as the 
`Board'), which shall have authority to govern and supervise all 
activities of the Association.
    ``(b) Powers.--The Board shall have such of the powers and 
authority of the Association as may be specified in the bylaws of the 
Association.
    ``(c) Composition.--
            ``(1) In general.--The Board shall consist of 13 members 
        who shall be appointed by the President, by and with the advice 
        and consent of the Senate, of whom--
                    ``(A) 8 shall be State insurance commissioners 
                appointed in the manner provided in paragraph (2);
                    ``(B) 2 shall be representatives of property and 
                casualty insurance producers;
                    ``(C) 1 shall be a representative of life or health 
                insurance producers;
                    ``(D) 1 shall be a representative of property and 
                casualty insurers; and
                    ``(E) 1 shall be a representative of life or health 
                insurers.
            ``(2) State insurance regulator representatives.--
                    ``(A) Before making any appointments pursuant to 
                subparagraph (A) of paragraph (1), the President shall 
                request a list of recommended candidates from NAIC, 
                which shall not be binding on the President. If NAIC 
                fails to submit a list of recommendations within 15 
                business days of the request, the President may make 
                the requisite appointments without considering the 
                views of NAIC.
                    ``(B) Not more than 4 members appointed to 
                membership on the Board pursuant to subparagraph (A) of 
                paragraph (1) shall belong to the same political party.
                    ``(C) If fewer than 8 State insurance commissioners 
                accept appointment to the Board, the President may 
                appoint the remaining State insurance commissioner 
                members of the Board from among individuals who are 
                former State insurance commissioners, provided that any 
                former insurance commissioner so appointed shall not be 
                employed by or have a present direct or indirect 
                financial interest in any insurer, insurance producer, 
                or other entity in the insurance industry other than 
                direct or indirect ownership of, or beneficial interest 
                in, an insurance policy or annuity contract written or 
                sold by an insurer.
            ``(3) Private sector representatives.--In making any 
        appointments pursuant to subparagraphs (B) through (E) of 
        paragraph (1), the President may seek recommendations for 
        candidates from national trade associations representing the 
        category of individuals described, which shall not be binding 
        on the President.
            ``(4) State insurance commissioner defined.--For purposes 
        of this subsection, the term `State insurance commissioner' 
        means a person who serves in the position in State government, 
        or on the board, commission, or other body that is the 
        principal insurance regulatory authority for the State.
    ``(d) Terms.--
            ``(1) In general.--The term of each Board member shall be 
        for 2 years, except that--
                    ``(A) the term of--
                            ``(i) 4 of the State insurance commissioner 
                        members of the Board initially appointed under 
                        subparagraph (A) of paragraph (1);
                            ``(ii) 1 of the property and casualty 
                        insurance producer members of the Board 
                        initially appointed under subparagraph (B) of 
                        paragraph (1); and
                            ``(iii) 1 of the insurer representative 
                        members of the Board initially appointed under 
                        subparagraphs (D) and (E) of paragraph (1),
                shall be 1 year, as designated by the President at the 
                time of the nomination of the members;
                    ``(B) a member of the Board may continue to serve 
                after the expiration of the term to which the member 
                was appointed until a successor is qualified; and
                    ``(C) any member of the Board appointed to fill a 
                vacancy occurring before the expiration of the term for 
                which the predecessor of the member was appointed shall 
                be appointed only for the remainder of that term.
            ``(2) Successive terms.--Board members may be reappointed 
        to successive terms.
    ``(e) Initial Appointments.--The appointment of initial Board 
members shall be made no later than 90 days after the date of enactment 
of the National Association of Registered Agents and Brokers Reform Act 
of 2013.
    ``(f) Meetings.--
            ``(1) In general.--The Board shall meet at the call of the 
        chairperson, as requested in writing to the chairperson by at 
        least 5 members of the Board, or as otherwise provided by the 
        bylaws of the Association.
            ``(2) Quorum required.--A majority of directors shall 
        constitute a quorum.
            ``(3) Voting.--Decisions of the Board shall require the 
        approval of a majority of all directors present at a meeting, a 
        quorum being present.
            ``(4) Initial meeting.--The Board shall hold its first 
        meeting not later than 45 days after the date on which all 
        initial members of the Board have been appointed.
    ``(g) Restriction on Confidential Information.--Members of the 
Board appointed pursuant to paragraph (3) of subsection (c) shall not 
have access to confidential information received by the Association in 
connection with complaints, investigations, or disciplinary proceedings 
involving insurance producers.
    ``(h) Ethics and Conflicts of Interest.--The Board shall issue and 
enforce an ethical conduct code to address permissible and prohibited 
activities of Board members and Association officers, employees, 
agents, or consultants. The code shall, at a minimum, include 
provisions that prohibit any Board member or Association officer, 
employee, agent or consultant from--
            ``(1) engaging in unethical conduct in the course of 
        performing Association duties;
            ``(2) participating in the making or influencing the making 
        of any Association decision, the outcome of which he or she 
        knows or had reason to know would have a reasonably foreseeable 
        material financial effect, distinguishable from its effect on 
        the publicly generally, on the person or a member of his or her 
        immediate family;
            ``(3) accepting any gift from any person or entity other 
        than the Association that is given because of the position held 
        by the person in the Association;
            ``(4) making political contributions to any person or 
        entity on behalf of the Association; and
            ``(5) lobbying or paying someone to lobby on behalf of the 
        Association.

``SEC. 325. OFFICERS.

    ``(a) Positions.--The officers of the Association shall consist of 
a chairperson and a vice chairperson of the Board, an executive 
director, secretary, and treasurer of the Association, and such other 
officers and assistant officers as may be deemed necessary.
    ``(b) Manner of Selection.--Each officer of the Board and the 
Association shall be elected or appointed at such time, in such manner, 
and for such terms as may be prescribed in the bylaws of the 
Association.

``SEC. 326. BYLAWS, RULES, AND DISCIPLINARY ACTION.

    ``(a) Adoption and Amendment of Bylaws and Rules.--
            ``(1) Copy required to be filed.--The Board shall submit to 
        the President and NAIC any proposed bylaw or rules of the 
        Association or any proposed amendment to the bylaws or rules, 
        accompanied by a concise general statement of the basis and 
        purpose of such proposal. Rules shall be promulgated in 
        accordance with the Federal Administrative Procedure Act.
            ``(2) Effective date.--Any proposed bylaw or rule or 
        proposed amendment to the bylaws or rules shall take effect, 
        after notice published in the Federal Register and opportunity 
        for comment, upon such date as the Association may designate, 
        unless suspended under subsection (c) of section 330.
    ``(b) Disciplinary Action by the Association.--
            ``(1) Specification of charges.--In any proceeding to 
        determine whether membership shall be denied, suspended, 
        revoked, or not renewed or to determine whether a member of the 
        Association should be placed on probation (in this section 
        referred to as a `disciplinary action') or whether to assess 
        fines or monetary penalties, the Association shall bring 
        specific charges, notify the member of the charges, give the 
        member an opportunity to defend against the charges, and keep a 
        record.
            ``(2) Supporting statement.--A determination to take 
        disciplinary action shall be supported by a statement setting 
        forth--
                    ``(A) any act or practice in which the member has 
                been found to have been engaged;
                    ``(B) the specific provision of this subtitle, the 
                rules or regulations under this subtitle, or the rules 
                of the Association which any such act or practice is 
                deemed to violate; and
                    ``(C) the sanction imposed and the reason for the 
                sanction.
            ``(3) Ineligibility of private sector representatives.--
        Members of the Board appointed pursuant to section 324(c)(3) 
        shall not participate in any disciplinary action, and shall not 
        have access to confidential information concerning the actions.

``SEC. 327. POWERS.

    ``In addition to all the powers conferred upon a nonprofit 
corporation by the District of Columbia Nonprofit Corporation Act, the 
Association shall have the following powers:
            ``(1) To establish and collect such membership fees as the 
        Association finds necessary to impose to cover the costs of its 
        operations.
            ``(2) To adopt, amend, and repeal bylaws and rules 
        governing the conduct of Association business and performance 
        of its duties.
            ``(3) To establish procedures for providing notice and 
        opportunity for comment pursuant to section 326(a).
            ``(4) To enter into and perform such agreements as 
        necessary to carry out its duties.
            ``(5) To hire employees, professionals, or specialists, and 
        elect or appoint officers, and to fix their compensation, 
        define their duties and give them appropriate authority to 
        carry out the purposes of this subtitle, and determine their 
        qualification; and to establish the Association's personnel 
        policies and programs relating to, among other things, 
        conflicts of interest, rates of compensation, and 
        qualifications of personnel.
            ``(6) To borrow money.
            ``(7) To secure funding for such amounts as the Association 
        determines to be necessary and appropriate to organize and 
        begin operations of the Association, which shall be treated as 
        loans to be repaid by the Association with interest at market 
        rate, except that the Board shall not secure funding from an 
        insurer, insurance producer, or insurance association, but may 
        secure funding from NAIC.

``SEC. 328. REPORT BY ASSOCIATION.

    ``(a) In General.--As soon as practicable after the close of each 
fiscal year, the Association shall submit to the President and NAIC a 
written report regarding the conduct of its business, and the exercise 
of the other rights and powers granted by this subtitle, during such 
fiscal year.
    ``(b) Financial Statements.--Each report submitted under subsection 
(a) with respect to any fiscal year shall include financial statements 
setting forth the financial position of the Association at the end of 
such fiscal year and the results of its operations (including the 
source and application of its funds) for such fiscal year.

``SEC. 329. LIABILITY OF THE ASSOCIATION AND THE DIRECTORS, OFFICERS, 
              AND EMPLOYEES OF THE ASSOCIATION.

    ``(a) In General.--The Association shall not be deemed to be an 
insurer or insurance producer within the meaning of any State law, 
rule, regulation, or order regulating or taxing insurers, insurance 
producers, or other entities engaged in the business of insurance, 
including provisions imposing premium taxes, regulating insurer 
solvency or financial condition, establishing guaranty funds and 
levying assessments, or requiring claims settlement practices.
    ``(b) Liability of Directors, Officers, and Employees.--No 
director, officer, or employee of the Association shall be personally 
liable to any person for any action taken or omitted in good faith in 
any matter within the scope of their responsibilities in connection 
with the Association.

``SEC. 330. PRESIDENTIAL OVERSIGHT.

    ``(a) Removal of Board.--If the President determines that the 
Association is acting in a manner contrary to the interests of the 
public or the purposes of this subtitle or has failed to perform its 
duties under this subtitle, the President may remove the entire 
existing Board for the remainder of the term to which the members of 
the Board were appointed and appoint, in accordance with section 324 
and with the advice and consent of the Senate, new members to fill the 
vacancies on the Board for the remainder of the terms.
    ``(b) Removal of Board Member.--The President may remove a member 
of the Board only for neglect of duty or malfeasance in office.
    ``(c) Suspension of Rules or Actions.--Following notice to the 
Board, the President, or a person designated by the President for such 
purpose, may suspend the effectiveness of any rule, or prohibit any 
action, of the Association which the President or the designee 
determines is contrary to the purposes of this subtitle.

``SEC. 331. RELATIONSHIP TO STATE LAW.

    ``(a) Preemption of State Laws.--State laws, regulations, 
provisions, or other actions purporting to regulate insurance producers 
shall be preempted to the extent provided in subsection (b).
    ``(b) Prohibited Actions.--
            ``(1) In general.--No State shall--
                    ``(A) impede the activities of, take any action 
                against, or apply any provision of law or regulation 
                arbitrarily or discriminatorily to, any insurance 
                producer because that insurance producer or any 
                affiliate plans to become, has applied to become, or is 
                a member of the Association;
                    ``(B) impose any requirement upon a member of the 
                Association that it pay fees different from those 
                required to be paid to that State were it not a member 
                of the Association; or
                    ``(C) impose any continuing education requirements 
                on any nonresident insurance producer that is a member 
                of the Association.
            ``(2) States other than a home state.--No State, other than 
        a member's home State, shall--
                    ``(A) impose any licensing, personal or corporate 
                qualifications, education, training, experience, 
                residency, continuing education, or bonding requirement 
                upon a member of the Association that is different from 
                the criteria for membership in the Association or 
                renewal of such membership;
                    ``(B) impose any requirement upon a member of the 
                Association that it be licensed, registered, or 
                otherwise qualified to do business or remain in good 
                standing in the State, including any requirement that 
                the insurance producer register as a foreign company 
                with the secretary of state or equivalent State 
                official;
                    ``(C) require that a member of the Association 
                submit to a criminal history record check as a 
                condition of doing business in the State; or
                    ``(D) impose any licensing, registration, or 
                appointment requirements upon a member of the 
                Association, or require a member of the Association to 
                be authorized to operate as an insurance producer, in 
                order to sell, solicit, or negotiate insurance for 
                commercial property and casualty risks to an insured 
                with risks located in more than one State, if the 
                member is licensed or otherwise authorized to operate 
                in the State where the insured maintains its principal 
                place of business and the contract of insurance insures 
                risks located in that State.
            ``(3) Preservation of state disciplinary authority.--
        Nothing in this section may be construed to prohibit a State 
        from investigating and taking appropriate disciplinary action, 
        including suspension or revocation of authority of an insurance 
        producer to do business in a State, in accordance with State 
        law and that is not inconsistent with the provisions of this 
        section, against a member of the Association as a result of a 
        complaint or for any alleged activity, regardless of whether 
        the activity occurred before or after the insurance producer 
        commenced doing business in the State pursuant to Association 
        membership.

``SEC. 332. COORDINATION WITH OTHER REGULATORS.

    ``(a) Coordination With State Insurance Regulators.--The 
Association may--
            ``(1) establish a central clearinghouse, or utilize NAIC or 
        any other appropriate entity as a central clearinghouse, 
        through which members of the Association may pursuant to 
        section 323(e) disclose their intent to operate in 1 or more 
        States and pay the licensing fees to the appropriate States; 
        and
            ``(2) establish a national database for the collection of 
        regulatory information concerning the activities of insurance 
        producers or contract with NAIC or any other entity to utilize 
        such a database.
    ``(b) Coordination With the Financial Industry Regulatory 
Authority.--The Association shall coordinate with the Financial 
Industry Regulatory Authority in order to ease any administrative 
burdens that fall on persons that are members of both associations, 
consistent with the requirements of this subtitle and the Federal 
securities laws.

``SEC. 333. RIGHT OF ACTION.

    ``(a) Right of Action.--Any person aggrieved by a decision or 
action of the Association may, after reasonably exhausting available 
avenues for resolution within the Association, commence a civil action 
in an appropriate United States district court, and obtain all 
appropriate relief.
    ``(b) Association Interpretations.--In any such action, the court 
shall give appropriate weight to the Association's interpretation of 
its bylaws and this subtitle.

``SEC. 334. DEFINITIONS.

    ``For purposes of this subtitle, the following definitions shall 
apply:
            ``(1) Business entity.--The term `business entity' means a 
        corporation, association, partnership, limited liability 
        company, limited liability partnership, or other legal entity.
            ``(2) Home state.--The term `home State' means the State in 
        which the insurance producer maintains its principal place of 
        residence or business and is licensed to act as an insurance 
        producer.
            ``(3) Insurance.--The term `insurance' means any product, 
        other than title insurance or bail bonds, defined or regulated 
        as insurance by the appropriate State insurance regulatory 
        authority.
            ``(4) Insurance producer.--The term `insurance producer' 
        means any insurance agent or broker, excess or surplus lines 
        broker or agent, insurance consultant, limited insurance 
        representative, and any other individual or entity that sells, 
        solicits, or negotiates policies of insurance or offers advice, 
        counsel, opinions or services related to insurance.
            ``(5) Principal place of business.--The term `principal 
        place of business' means the State in which an insurance 
        producer maintains the headquarters of the insurance producer 
        and, in the case of a business entity, where high-level 
        officers of the entity direct, control, and coordinate the 
        business activities of the business entity.
            ``(6) Principal place of residence.--The term `principal 
        place of residence' means the State in which an insurance 
        producer resides for the greatest number of days during a 
        calendar year.
            ``(7) State.--The term `State' includes any State, the 
        District of Columbia, any territory of the United States, and 
        Puerto Rico, Guam, American Samoa, the Trust Territory of the 
        Pacific Islands, the Virgin Islands, and the Northern Mariana 
        Islands.
            ``(8) State law.--
                    ``(A) In general.--The term `State law' includes 
                all laws, decisions, rules, regulations, or other State 
                action having the effect of law, of any State.
                    ``(B) Laws applicable in the district of 
                columbia.--A law of the United States applicable only 
                to or within the District of Columbia shall be treated 
                as a State law rather than a law of the United 
                States.''.
    (b) Clerical Amendment.--The table of contents for the Gramm-Leach-
Bliley Act is amended by striking the items relating to subtitle C of 
title III and inserting the following new 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.''.
                                 <all>
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