II 

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. 

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

3 SECTION 1. SHORT TITLE. 

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

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


srobinson on DSK4SPTVN1PROD with BILLS
2 

•S 534 IS

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

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

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

6 amended to read as follows: 

7 ‘‘Subtitle C—National Association 

8 of Registered Agents and Brokers 

9 ‘‘SEC. 321. NATIONAL ASSOCIATION OF REGISTERED 

10 AGENTS AND BROKERS. 

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

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

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

15 ‘‘(1) be a nonprofit corporation; 

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

17 of Congress; 

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

19 United States Government; and 

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

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

24 29–301.01 et seq.). 

25 ‘‘(c) EFFECTIVE DATE.—The provisions of this sub26 title shall take effect upon the expiration of the 24-month 


srobinson on DSK4SPTVN1PROD with BILLS
3 

•S 534 IS

1 period beginning on the date of enactment of the National 

2 Association of Registered Agents and Brokers Reform Act 

3 of 2013. Notwithstanding the effective date, such persons 

4 as are required to establish the Association shall take such 

5 actions as are necessary to establish the operations of the 

6 Association by the effective date. 

7 ‘‘SEC. 322. PURPOSE. 

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

9 a mechanism through which licensing, continuing edu10 cation, and other nonresident insurance producer quali11 fication requirements and conditions may be adopted and 

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

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

14 State, pertaining to— 

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

16 qualification requirements of insurance producers 

17 who are not members of the Association; 

18 ‘‘(2) resident or nonresident insurance producer 

19 appointment requirements; 

20 ‘‘(3) supervising and disciplining resident and 

21 nonresident insurance producers; 

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

23 nonresident insurance producers so that there is no 

24 loss of insurance producer licensing revenue to the 

25 State; and 


srobinson on DSK4SPTVN1PROD with BILLS
4 

•S 534 IS

1 ‘‘(5) prescribing and enforcing laws and regula2 tions regulating the conduct of resident and non3 resident insurance producers. 

4 ‘‘SEC. 323. MEMBERSHIP. 

5 ‘‘(a) ELIGIBILITY.— 

6 ‘‘(1) IN GENERAL.—Any insurance producer li7 censed in its home State shall, subject to paragraphs 

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

9 Association. 

10 ‘‘(2) INELIGIBILITY FOR SUSPENSION OR REV11 OCATION OF LICENSE.—Subject to paragraph (3), 

12 an insurance producer is not eligible to become a 

13 member of the Association if a State insurance regu14 lator has suspended or revoked the insurance license 

15 of the insurance producer in that State. 

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

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

18 if— 

19 ‘‘(A) the State insurance regulator reissues 

20 or renews the license of the insurance producer 

21 in the State in which the license was suspended 

22 or revoked, or otherwise terminates or vacates 

23 the suspension or revocation; or 


srobinson on DSK4SPTVN1PROD with BILLS
5 

•S 534 IS

1 ‘‘(B) the suspension or revocation expires 

2 or is subsequently overturned by a court of 

3 competent jurisdiction. 

4 ‘‘(4) CRIMINAL BACKGROUND RECORD CHECK

5 REQUIRED.— 

6 ‘‘(A) IN GENERAL.—An insurance pro7 ducer shall not be eligible to become a member 

8 of the Association unless the insurance pro9 ducer has undergone a national criminal back10 ground record check of its Federal Bureau of 

11 Investigation identification record that complies 

12 with regulations prescribed by the Attorney 

13 General under subparagraph (L). 

14 ‘‘(B) CRIMINAL BACKGROUND RECORD

15 CHECK REQUESTED BY HOME STATE.—An in16 surance producer who is licensed in a State and 

17 who has undergone a national criminal back18 ground record check of its Federal Bureau of 

19 Investigation identification record during the 2- 

20 year period preceding the date of submission of 

21 an application to become a member of the Asso22 ciation, in compliance with such requirements 

23 as a condition for such licensure, shall be 

24 deemed to have undergone a national criminal 


srobinson on DSK4SPTVN1PROD with BILLS
6 

•S 534 IS

1 background record check for purposes of sub2 paragraph (A). 

3 ‘‘(C) CRIMINAL BACKGROUND RECORD

4 CHECK REQUESTED BY ASSOCIATION.— 

5 ‘‘(i) IN GENERAL.—The Association 

6 shall, upon request by an insurance pro7 ducer licensed in a State, submit identi8 fication information obtained from the in9 surance producer, and a request for a na10 tional criminal background record check of 

11 the insurance producer, to the Federal Bu12 reau of Investigation. 

13 ‘‘(ii) BYLAWS OR RULES.—The board 

14 of directors of the Association shall pre15 scribe bylaws or rules for obtaining and 

16 utilizing identification information and 

17 criminal history record information, includ18 ing the establishment of reasonable fees re19 quired to perform a criminal background 

20 record check and appropriate safeguards 

21 for maintaining confidentiality and security 

22 of the information. 

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

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

25 identification information as required by the AtVerDate Mar 15 2010 22:59 Mar 13, 2013 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S534.IS S534

srobinson on DSK4SPTVN1PROD with BILLS
7 

•S 534 IS

1 torney General concerning the person about 

2 whom the record is requested and a statement 

3 signed by the person authorizing the Associa4 tion to obtain the information. 

5 ‘‘(E) PROVISION OF INFORMATION BY AT6 TORNEY GENERAL.—Upon receiving a submis7 sion under subparagraph (C)(ii) from the Asso8 ciation, the Attorney General shall search all 

9 records of the Criminal Justice Information 

10 Services Division of the Federal Bureau of In11 vestigation that the Attorney General deems ap12 propriate for criminal history records cor13 responding to the identification information 

14 provided under subparagraph (D) and provide 

15 all information contained in the records that 

16 pertains to the request to the Association. 

17 ‘‘(F) LIMITATION ON PERMISSIBLE USES

18 OF INFORMATION.—The Association may use 

19 information provided under subparagraph (E) 

20 only— 

21 ‘‘(i) for purposes of determining com22 pliance with membership criteria estab23 lished by the Association; or 

24 ‘‘(ii) to disclose to State insurance 

25 regulators, or Federal or State law enVerDate Mar 15 2010 22:59 Mar 13, 2013 Jkt 029200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S534.IS S534

srobinson on DSK4SPTVN1PROD with BILLS
8 

•S 534 IS

1 forcement agencies, in conformance with 

2 applicable law. 

3 ‘‘(G) APPLICANT ACCESS TO CRIMINAL

4 HISTORY RECORDS.—Notwithstanding subpara5 graph (F), an insurance producer shall have the 

6 right to obtain from the Association a copy of 

7 any criminal history record information con8 cerning the insurance producer that is provided 

9 to the Association under subparagraph (E). 

10 ‘‘(H) PENALTY FOR IMPROPER USE OR

11 DISCLOSURE.—Whoever knowingly uses any in12 formation provided under subparagraph (E) for 

13 a purpose not authorized in subparagraph (F), 

14 or discloses any such information to anyone not 

15 authorized to receive it, shall be fined under 

16 title 18, United States Code, imprisoned for not 

17 more than 2 years, or both. 

18 ‘‘(I) RELIANCE ON INFORMATION.—Nei19 ther the Association nor any of its directors, of20 ficers, or employees shall be liable in any action 

21 for using information provided under subpara22 graph (E) as permitted under subparagraph 

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

24 its accuracy. 


srobinson on DSK4SPTVN1PROD with BILLS
9 

•S 534 IS

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

2 charge a reasonable fee to defray the expense of 

3 conducting the search and providing the infor4 mation under subparagraph (E), and any such 

5 fee shall be collected and remitted by the Asso6 ciation. 

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

8 in this paragraph shall be construed as— 

9 ‘‘(i) requiring a State insurance regu10 lator to perform criminal background 

11 checks under this section; or 

12 ‘‘(ii) limiting any other authority that 

13 allows access to criminal background 

14 records. 

15 ‘‘(L) REGULATIONS.—The Attorney Gen16 eral shall prescribe regulations to carry out this 

17 paragraph, which shall include— 

18 ‘‘(i) appropriate protections for ensur19 ing the confidentiality of information pro20 vided under subparagraph (E); and 

21 ‘‘(ii) procedures providing a reason22 able opportunity for an insurance producer 

23 to contest the accuracy of information re24 garding the insurance producer provided 

25 under subparagraph (E). 


srobinson on DSK4SPTVN1PROD with BILLS
10 

•S 534 IS

1 ‘‘(M) INELIGIBILITY FOR MEMBERSHIP.— 

2 ‘‘(i) IN GENERAL.—The Association 

3 may, under reasonably consistently applied 

4 standards, deny membership to an insur5 ance producer on the basis of criminal his6 tory information provided under subpara7 graph (E), or where the insurance pro8 ducer has been subject to disciplinary ac9 tion, as described in paragraph (2). 

10 ‘‘(ii) RIGHTS OF APPLICANTS DENIED

11 MEMBERSHIP.—The Association shall no12 tify any insurance producer who is denied 

13 membership on the basis of criminal his14 tory record information provided under 

15 subparagraph (E) of the right of the insur16 ance producer to— 

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

18 history record information provided to 

19 the Association under subparagraph 

20 (E) with respect to the insurance pro21 ducer; and 

22 ‘‘(II) challenge the accuracy and 

23 completeness of the information. 

24 ‘‘(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRI25 TERIA.—The Association may establish membership criVerDate Mar 15 2010 22:59 Mar 13, 2013 Jkt 029200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S534.IS S534

srobinson on DSK4SPTVN1PROD with BILLS
11 

•S 534 IS

1 teria that bear a reasonable relationship to the purposes 

2 for which the Association was established. 

3 ‘‘(c) ESTABLISHMENT OF CLASSES AND CATEGORIES

4 OF MEMBERSHIP.— 

5 ‘‘(1) CLASSES OF MEMBERSHIP.—The Associa6 tion may establish separate classes of membership, 

7 with separate criteria, if the Association reasonably 

8 determines that performance of different duties re9 quires different levels of education, training, experi10 ence, or other qualifications. 

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

12 shall establish a class of membership and member13 ship criteria for business entities. A business entity 

14 that applies for membership shall be required to des15 ignate an individual Association member responsible 

16 for the compliance of the business entity with Asso17 ciation rules and the insurance laws, rules, and reg18 ulations of any State in which the business entity 

19 seeks to do business on the basis of Association 

20 membership. 

21 ‘‘(3) CATEGORIES.— 

22 ‘‘(A) SEPARATE CATEGORIES FOR INSUR23 ANCE PRODUCERS PERMITTED.—The Associa24 tion may establish separate categories of mem25 bership for insurance producers and for other 


srobinson on DSK4SPTVN1PROD with BILLS
12 

•S 534 IS

1 persons within each class, based on the types of 

2 licensing categories that exist under State laws. 

3 ‘‘(B) SEPARATE TREATMENT FOR DEPOSI4 TORY INSTITUTIONS PROHIBITED.—No special 

5 categories of membership, and no distinct mem6 bership criteria, shall be established for mem7 bers which are depository institutions or for 

8 employees, agents, or affiliates of depository in9 stitutions. 

10 ‘‘(d) MEMBERSHIP CRITERIA.— 

11 ‘‘(1) IN GENERAL.—The Association may estab12 lish criteria for membership which shall include 

13 standards for personal qualifications, education, 

14 training, and experience. The Association shall not 

15 establish criteria that unfairly limit the ability of a 

16 small insurance producer to become a member of the 

17 Association, including imposing discriminatory mem18 bership fees. 

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

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

21 any qualification less protective to the public than 

22 that contained in the NAIC Producer Licensing 

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

24 the National Association of Registered Agents and 

25 Brokers Reform Act of 2013, and shall consider the 


srobinson on DSK4SPTVN1PROD with BILLS
13 

•S 534 IS

1 highest levels of insurance producer qualifications 

2 established under the licensing laws of the States. 

3 ‘‘(3) ASSISTANCE FROM STATES.— 

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

5 request a State to provide assistance in inves6 tigating and evaluating the eligibility of a pro7 spective member for membership in the Associa8 tion. 

9 ‘‘(B) RULE OF CONSTRUCTION.—Subpara10 graph (A) shall not be construed as requiring or 

11 authorizing any State to adopt new or addi12 tional requirements concerning the licensing or 

13 evaluation of insurance producers. 

14 ‘‘(4) DENIAL OF MEMBERSHIP.—The Associa15 tion may, based on reasonably consistently applied 

16 standards, deny membership to any State-licensed 

17 insurance producer for failure to meet the member18 ship criteria established by the Association. 

19 ‘‘(e) EFFECT OF MEMBERSHIP.— 

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

21 Membership in the Association shall— 

22 ‘‘(A) authorize an insurance producer to 

23 sell, solicit, or negotiate insurance in any State 

24 for which the member pays the licensing fee set 

25 by the State for any line or lines of insurance 


srobinson on DSK4SPTVN1PROD with BILLS
14 

•S 534 IS

1 specified in the home State license of the insur2 ance producer, and exercise all such incidental 

3 powers as shall be necessary to carry out such 

4 activities, including claims adjustments and set5 tlement to the extent permissible under the laws 

6 of the State, risk management, employee bene7 fits advice, retirement planning, and any other 

8 insurance-related consulting activities; 

9 ‘‘(B) be the equivalent of a nonresident in10 surance producer license for purposes of author11 izing the insurance producer to engage in the 

12 activities described in subparagraph (A) in any 

13 State where the member pays the licensing fee; 

14 and 

15 ‘‘(C) be the equivalent of a nonresident in16 surance producer license for the purpose of sub17 jecting an insurance producer to all laws, regu18 lations, provisions or other action of any State 

19 concerning revocation, suspension, or other en20 forcement action related to the ability of a 

21 member to engage in any activity within the 

22 scope of authority granted under this subsection 

23 and to all State laws, regulations, provisions, 

24 and actions preserved under paragraph (5). 


srobinson on DSK4SPTVN1PROD with BILLS
15 

•S 534 IS

1 ‘‘(2) VIOLENT CRIME CONTROL AND LAW EN2 FORCEMENT ACT OF 1994.—Nothing in this subtitle 

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

4 requirement established by section 1033 of title 18, 

5 United States Code. 

6 ‘‘(3) AGENT FOR REMITTING FEES.—The Asso7 ciation shall act as an agent for any member for 

8 purposes of remitting licensing fees to any State 

9 pursuant to paragraph (1). 

10 ‘‘(4) REGULATOR NOTIFICATION.— 

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

12 notify the States and National Association of 

13 Insurance Commissioners (hereinafter referred 

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

15 when an insurance producer has satisfied the 

16 membership criteria of this section. The States 

17 and NAIC or its designee shall have10 business 

18 days after the notification to provide the Asso19 ciation with evidence that the insurance pro20 ducer does not satisfy the criteria for member21 ship for consideration by the Association in its 

22 final membership determination. 

23 ‘‘(B) ONGOING DISCLOSURES REQUIRED.— 

24 On an ongoing basis, the Association shall dis25 close to the States and NAIC or its designee 


srobinson on DSK4SPTVN1PROD with BILLS
16 

•S 534 IS

1 the States in which each member is authorized 

2 to operate. The Association shall immediately 

3 notify the States and NAIC or its designee 

4 when a member is newly authorized to operate 

5 in one or more States, or is no longer author6 ized to operate in one or more States on the 

7 basis of Association membership. 

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

10 provision of this section shall be construed as alter11 ing or affecting the applicability or continuing effec12 tiveness of any law, regulation, provision, or other 

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

14 provision, or other action that— 

15 ‘‘(A) regulates market conduct, insurance 

16 producer conduct, or unfair trade practices; 

17 ‘‘(B) establishes consumer protections; or 

18 ‘‘(C) requires insurance producers to be 

19 appointed by a licensed or authorized insurer, 

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

21 other action is not inconsistent with the provisions 

22 of this subtitle related to market entry for non23 resident insurance producers, and then only to the 

24 extent of the inconsistency. 


srobinson on DSK4SPTVN1PROD with BILLS
17 

•S 534 IS

1 ‘‘(f) BIENNIAL RENEWAL.—Membership in the Asso2 ciation shall be renewed on a biennial basis. 

3 ‘‘(g) CONTINUING EDUCATION.— 

4 ‘‘(1) IN GENERAL.—The Association shall es5 tablish, as a condition of membership, continuing 

6 education requirements which shall be comparable to 

7 the continuing education requirements under the li8 censing laws of a majority of the States. 

9 ‘‘(2) STATE CONTINUING EDUCATION REQUIRE10 MENTS.—A member may not be required to satisfy 

11 continuing education requirements imposed under 

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

13 State other than the home State of the member. 

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

15 require a member to satisfy continuing education re16 quirements that are equivalent to any continuing 

17 education requirements of the home State of the 

18 member that have been satisfied by the member dur19 ing the applicable licensing period. 

20 ‘‘(4) LIMITATION ON ASSOCIATION.—The Asso21 ciation shall not directly or indirectly offer any con22 tinuing education courses for insurance producers. 

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

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

25 may place an insurance producer that is a member 


srobinson on DSK4SPTVN1PROD with BILLS
18 

•S 534 IS

1 of the Association on probation or suspend or revoke 

2 the membership of the insurance producer in the As3 sociation, or assess monetary fines or penalties, as 

4 the Association determines to be appropriate, if— 

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

6 the applicable membership criteria or other 

7 rules of the Association; 

8 ‘‘(B) the insurance producer has been sub9 ject to disciplinary action pursuant to a final 

10 adjudicatory proceeding under the jurisdiction 

11 of a State insurance regulator; 

12 ‘‘(C) an insurance license held by the in13 surance producer has been suspended or re14 voked by a State insurance regulator; or 

15 ‘‘(D) the insurance producer has been con16 victed of a crime that would have resulted in 

17 the denial of membership pursuant to sub18 section (a)(4)(M)(i) at the time of application 

19 and the Association has received a copy of the 

20 final disposition from a court of competent ju21 risdiction. 

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

23 The Association shall have the power to investigate 

24 alleged violations of Association rules. 


srobinson on DSK4SPTVN1PROD with BILLS
19 

•S 534 IS

1 ‘‘(3) REPORTING.—The Association shall imme2 diately notify NAIC or its designee when the mem3 bership of an insurance producer has been placed on 

4 probation or has been suspended, revoked, or other5 wise terminated, or when the Association has as6 sessed monetary fines or penalties. 

7 ‘‘(i) CONSUMER COMPLAINTS.— 

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

9 ‘‘(A) refer any complaint against a mem10 ber of the Association from a consumer relating 

11 to alleged misconduct or violations of State in12 surance laws to the State insurance regulator 

13 where the consumer resides and, when appro14 priate, to any additional State insurance regu15 lator, as determined by rules adopted by the 

16 Association; and 

17 ‘‘(B) make any related records and infor18 mation available to NAIC or its designee and to 

19 each State insurance regulator to whom the 

20 complaint is forwarded. 

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

22 Association shall maintain a toll-free number for 

23 purposes of this subsection and, as practicable, other 

24 alternative means of communication with consumers, 

25 such as an Internet webpage. 


srobinson on DSK4SPTVN1PROD with BILLS
20 

•S 534 IS

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

2 State insurance regulators shall provide the Associa3 tion with information regarding the final disposition 

4 of a complaint referred pursuant to paragraph 

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

6 State to release confidential investigation reports or 

7 other information protected by State law to the As8 sociation. 

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

10 share documents, materials, or other information, includ11 ing confidential and privileged documents, with a State, 

12 Federal, or international regulatory agency or enforce13 ment authority, or with NAIC or its designee, provided 

14 that the recipient has the authority and agrees to maintain 

15 the confidentiality or privileged status of the document, 

16 material, or other information. 

17 ‘‘SEC. 324. BOARD OF DIRECTORS. 

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

19 board of directors of the Association (hereafter in this sub20 title referred to as the ‘Board’), which shall have authority 

21 to govern and supervise all activities of the Association. 

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

23 powers and authority of the Association as may be speci24 fied in the bylaws of the Association. 

25 ‘‘(c) COMPOSITION.— 


srobinson on DSK4SPTVN1PROD with BILLS
21 

•S 534 IS

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

2 13 members who shall be appointed by the Presi3 dent, by and with the advice and consent of the Sen4 ate, of whom— 

5 ‘‘(A) 8 shall be State insurance commis6 sioners appointed in the manner provided in 

7 paragraph (2); 

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

9 and casualty insurance producers; 

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

11 health insurance producers; 

12 ‘‘(D) 1 shall be a representative of prop13 erty and casualty insurers; and 

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

15 health insurers. 

16 ‘‘(2) STATE INSURANCE REGULATOR REP17 RESENTATIVES.— 

18 ‘‘(A) Before making any appointments 

19 pursuant to subparagraph (A) of paragraph 

20 (1), the President shall request a list of rec21 ommended candidates from NAIC, which shall 

22 not be binding on the President. If NAIC fails 

23 to submit a list of recommendations within 15 

24 business days of the request, the President may 


srobinson on DSK4SPTVN1PROD with BILLS
22 

•S 534 IS

1 make the requisite appointments without con2 sidering the views of NAIC. 

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

4 to membership on the Board pursuant to sub5 paragraph (A) of paragraph (1) shall belong to 

6 the same political party. 

7 ‘‘(C) If fewer than 8 State insurance com8 missioners accept appointment to the Board, 

9 the President may appoint the remaining State 

10 insurance commissioner members of the Board 

11 from among individuals who are former State 

12 insurance commissioners, provided that any 

13 former insurance commissioner so appointed 

14 shall not be employed by or have a present di15 rect or indirect financial interest in any insurer, 

16 insurance producer, or other entity in the insur17 ance industry other than direct or indirect own18 ership of, or beneficial interest in, an insurance 

19 policy or annuity contract written or sold by an 

20 insurer. 

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

22 making any appointments pursuant to subpara23 graphs (B) through (E) of paragraph (1), the Presi24 dent may seek recommendations for candidates from 

25 national trade associations representing the category 


srobinson on DSK4SPTVN1PROD with BILLS
23 

•S 534 IS

1 of individuals described, which shall not be binding 

2 on the President. 

3 ‘‘(4) STATE INSURANCE COMMISSIONER DE4 FINED.—For purposes of this subsection, the term 

5 ‘State insurance commissioner’ means a person who 

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

7 board, commission, or other body that is the prin8 cipal insurance regulatory authority for the State. 

9 ‘‘(d) TERMS.— 

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

11 member shall be for 2 years, except that— 

12 ‘‘(A) the term of— 

13 ‘‘(i) 4 of the State insurance commis14 sioner members of the Board initially ap15 pointed under subparagraph (A) of para16 graph (1); 

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

18 insurance producer members of the Board 

19 initially appointed under subparagraph (B) 

20 of paragraph (1); and 

21 ‘‘(iii) 1 of the insurer representative 

22 members of the Board initially appointed 

23 under subparagraphs (D) and (E) of para24 graph (1), 


srobinson on DSK4SPTVN1PROD with BILLS
24 

•S 534 IS

1 shall be 1 year, as designated by the President 

2 at the time of the nomination of the members; 

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

4 to serve after the expiration of the term to 

5 which the member was appointed until a suc6 cessor is qualified; and 

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

8 to fill a vacancy occurring before the expiration 

9 of the term for which the predecessor of the 

10 member was appointed shall be appointed only 

11 for the remainder of that term. 

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

13 may be reappointed to successive terms. 

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

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

16 after the date of enactment of the National Association 

17 of Registered Agents and Brokers Reform Act of 2013. 

18 ‘‘(f) MEETINGS.— 

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

20 the call of the chairperson, as requested in writing 

21 to the chairperson by at least 5 members of the 

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

23 Association. 

24 ‘‘(2) QUORUM REQUIRED.—A majority of direc25 tors shall constitute a quorum. 


srobinson on DSK4SPTVN1PROD with BILLS
25 

•S 534 IS

1 ‘‘(3) VOTING.—Decisions of the Board shall re2 quire the approval of a majority of all directors 

3 present at a meeting, a quorum being present. 

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

5 its first meeting not later than 45 days after the 

6 date on which all initial members of the Board have 

7 been appointed. 

8 ‘‘(g) RESTRICTION ON CONFIDENTIAL INFORMA9 TION.—Members of the Board appointed pursuant to 

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

11 confidential information received by the Association in 

12 connection with complaints, investigations, or disciplinary 

13 proceedings involving insurance producers. 

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

15 Board shall issue and enforce an ethical conduct code to 

16 address permissible and prohibited activities of Board 

17 members and Association officers, employees, agents, or 

18 consultants. The code shall, at a minimum, include provi19 sions that prohibit any Board member or Association offi20 cer, employee, agent or consultant from— 

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

22 course of performing Association duties; 

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

24 the making of any Association decision, the outcome 

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


srobinson on DSK4SPTVN1PROD with BILLS
26 

•S 534 IS

1 would have a reasonably foreseeable material finan2 cial effect, distinguishable from its effect on the pub3 licly generally, on the person or a member of his or 

4 her immediate family; 

5 ‘‘(3) accepting any gift from any person or enti6 ty other than the Association that is given because 

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

8 ‘‘(4) making political contributions to any per9 son or entity on behalf of the Association; and 

10 ‘‘(5) lobbying or paying someone to lobby on be11 half of the Association. 

12 ‘‘SEC. 325. OFFICERS. 

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

14 shall consist of a chairperson and a vice chairperson of 

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

16 of the Association, and such other officers and assistant 

17 officers as may be deemed necessary. 

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

19 Board and the Association shall be elected or appointed 

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

21 be prescribed in the bylaws of the Association. 

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

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

24 RULES.— 


srobinson on DSK4SPTVN1PROD with BILLS
27 

•S 534 IS

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

2 Board shall submit to the President and NAIC any 

3 proposed bylaw or rules of the Association or any 

4 proposed amendment to the bylaws or rules, accom5 panied by a concise general statement of the basis 

6 and purpose of such proposal. Rules shall be promul7 gated in accordance with the Federal Administrative 

8 Procedure Act. 

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

10 or rule or proposed amendment to the bylaws or 

11 rules shall take effect, after notice published in the 

12 Federal Register and opportunity for comment, upon 

13 such date as the Association may designate, unless 

14 suspended under subsection (c) of section 330. 

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

16 ‘‘(1) SPECIFICATION OF CHARGES.—In any pro17 ceeding to determine whether membership shall be 

18 denied, suspended, revoked, or not renewed or to de19 termine whether a member of the Association should 

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

21 a ‘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. 


srobinson on DSK4SPTVN1PROD with BILLS
28 

•S 534 IS

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, 

7 the rules or regulations under this subtitle, or 

8 the rules of the Association which any such act 

9 or practice is deemed to violate; and 

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

11 for the sanction. 

12 ‘‘(3) INELIGIBILITY OF PRIVATE SECTOR REP13 RESENTATIVES.—Members of the Board appointed 

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

15 any disciplinary action, and shall not have access to 

16 confidential information concerning the actions. 

17 ‘‘SEC. 327. POWERS. 

18 ‘‘In addition to all the powers conferred upon a non19 profit corporation by the District of Columbia Nonprofit 

20 Corporation Act, the Association shall have the following 

21 powers: 

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

23 fees as the Association finds necessary to impose to 

24 cover the costs of its operations. 


srobinson on DSK4SPTVN1PROD with BILLS
29 

•S 534 IS

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

2 rules governing the conduct of Association business 

3 and performance of its duties. 

4 ‘‘(3) To establish procedures for providing no5 tice and opportunity for comment pursuant to sec6 tion 326(a). 

7 ‘‘(4) To enter into and perform such agree8 ments as necessary to carry out its duties. 

9 ‘‘(5) To hire employees, professionals, or spe10 cialists, and elect or appoint officers, and to fix their 

11 compensation, define their duties and give them ap12 propriate authority to carry out the purposes of this 

13 subtitle, and determine their qualification; and to es14 tablish the Association’s personnel policies and pro15 grams relating to, among other things, conflicts of 

16 interest, rates of compensation, and qualifications of 

17 personnel. 

18 ‘‘(6) To borrow money. 

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

20 Association determines to be necessary and appro21 priate to organize and begin operations of the Asso22 ciation, which shall be treated as loans to be repaid 

23 by the Association with interest at market rate, ex24 cept that the Board shall not secure funding from 


srobinson on DSK4SPTVN1PROD with BILLS
30 

•S 534 IS

1 an insurer, insurance producer, or insurance associa2 tion, but may secure funding from NAIC. 

3 ‘‘SEC. 328. REPORT BY ASSOCIATION. 

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

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

6 the President and NAIC a written report regarding the 

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

8 and powers granted by this subtitle, during such fiscal 

9 year. 

10 ‘‘(b) FINANCIAL STATEMENTS.—Each report sub11 mitted under subsection (a) with respect to any fiscal year 

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

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

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

16 ‘‘SEC. 329. LIABILITY OF THE ASSOCIATION AND THE DI17 RECTORS, OFFICERS, AND EMPLOYEES OF 

18 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 pro24 visions imposing premium taxes, regulating insurer sol25 vency or financial condition, establishing guaranty funds 


srobinson on DSK4SPTVN1PROD with BILLS
31 

•S 534 IS

1 and levying assessments, or requiring claims settlement 

2 practices. 

3 ‘‘(b) LIABILITY OF DIRECTORS, OFFICERS, AND EM4 PLOYEES.—No director, officer, or employee of the Asso5 ciation shall be personally liable to any person for any ac6 tion taken or omitted in good faith in any matter within 

7 the scope of their responsibilities in connection with the 

8 Association. 

9 ‘‘SEC. 330. PRESIDENTIAL OVERSIGHT. 

10 ‘‘(a) REMOVAL OF BOARD.—If the President deter11 mines that the Association is acting in a manner contrary 

12 to the interests of the public or the purposes of this sub13 title or has failed to perform its duties under this subtitle, 

14 the President may remove the entire existing Board for 

15 the remainder of the term to which the members of the 

16 Board were appointed and appoint, in accordance with 

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

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

19 remainder of the terms. 

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

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

22 duty or malfeasance in office. 

23 ‘‘(c) SUSPENSION OF RULES OR ACTIONS.—Fol24 lowing notice to the Board, the President, or a person des25 ignated by the President for such purpose, may suspend 


srobinson on DSK4SPTVN1PROD with BILLS
32 

•S 534 IS

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

2 Association which the President or the designee deter3 mines is contrary to the purposes of this subtitle. 

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

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

6 regulations, provisions, or other actions purporting to reg7 ulate insurance producers shall be preempted to the extent 

8 provided 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, any 

14 insurance producer because that insurance pro15 ducer or any affiliate plans to become, has ap16 plied 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 

21 were 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. 


srobinson on DSK4SPTVN1PROD with BILLS
33 

•S 534 IS

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

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

3 shall— 

4 ‘‘(A) impose any licensing, personal or cor5 porate qualifications, education, training, expe6 rience, residency, continuing education, or 

7 bonding requirement upon a member of the As8 sociation that is different from the criteria for 

9 membership in the Association or renewal of 

10 such 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 sec17 retary of state or equivalent State official; 

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

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

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

22 appointment requirements upon a member of 

23 the Association, or require a member of the As24 sociation to be authorized to operate as an in25 surance producer, in order to sell, solicit, or neVerDate Mar 15 2010 22:59 Mar 13, 2013 Jkt 029200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S534.IS S534

srobinson on DSK4SPTVN1PROD with BILLS
34 

•S 534 IS

1 gotiate insurance for commercial property and 

2 casualty risks to an insured with risks located 

3 in more than one State, if the member is li4 censed or otherwise authorized to operate in the 

5 State where the insured maintains its principal 

6 place of business and the contract of insurance 

7 insures risks located in that State. 

8 ‘‘(3) PRESERVATION OF STATE DISCIPLINARY

9 AUTHORITY.—Nothing in this section may be con10 strued to prohibit a State from investigating and 

11 taking appropriate disciplinary action, including sus12 pension or revocation of authority of an insurance 

13 producer to do business in a State, in accordance 

14 with State law and that is not inconsistent with the 

15 provisions of this section, against a member of the 

16 Association as a result of a complaint or for any al17 leged activity, regardless of whether the activity oc18 curred before or after the insurance producer com19 menced doing business in the State pursuant to As20 sociation membership. 

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

22 ‘‘(a) COORDINATION WITH STATE INSURANCE REGU23 LATORS.—The Association may— 

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

25 NAIC or any other appropriate entity as a central 


srobinson on DSK4SPTVN1PROD with BILLS
35 

•S 534 IS

1 clearinghouse, through which members of the Asso2 ciation may pursuant to section 323(e) disclose their 

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

4 licensing fees to the appropriate States; and 

5 ‘‘(2) establish a national database for the collec6 tion of regulatory information concerning the activi7 ties of insurance producers or contract with NAIC 

8 or any other entity to utilize such a database. 

9 ‘‘(b) COORDINATION WITH THE FINANCIAL INDUS10 TRY REGULATORY AUTHORITY.—The Association shall 

11 coordinate with the Financial Industry Regulatory Au12 thority in order to ease any administrative burdens that 

13 fall on persons that are members of both associations, con14 sistent with the requirements of this subtitle and the Fed15 eral securities laws. 

16 ‘‘SEC. 333. RIGHT OF ACTION. 

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

18 a decision or action of the Association may, after reason19 ably exhausting available avenues for resolution within the 

20 Association, commence a civil action in an appropriate 

21 United States district court, and obtain all appropriate re22 lief. 

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

24 action, the court shall give appropriate weight to the Asso25 ciation’s interpretation of its bylaws and this subtitle. 


srobinson on DSK4SPTVN1PROD with BILLS
36 

•S 534 IS

1 ‘‘SEC. 334. DEFINITIONS. 

2 ‘‘For purposes of this subtitle, the following defini3 tions shall apply: 

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

5 entity’ means a corporation, association, partnership, 

6 limited liability company, limited liability partner7 ship, or other legal entity. 

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

9 means the State in which the insurance producer 

10 maintains its principal place of residence or business 

11 and is licensed to act as an insurance producer. 

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

13 any product, other than title insurance or bail 

14 bonds, defined or regulated as insurance by the ap15 propriate State insurance regulatory authority. 

16 ‘‘(4) INSURANCE PRODUCER.—The term ‘insur17 ance producer’ means any insurance agent or 

18 broker, excess or surplus lines broker or agent, in19 surance consultant, limited insurance representative, 

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

21 or negotiates policies of insurance or offers advice, 

22 counsel, opinions or services related to insurance. 

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

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

25 which an insurance producer maintains the head26 quarters of the insurance producer and, in the case 


srobinson on DSK4SPTVN1PROD with BILLS
37 

•S 534 IS

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

2 entity direct, control, and coordinate the business 

3 activities of the business entity. 

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

5 term ‘principal place of residence’ means the State 

6 in which an insurance producer resides for the great7 est number of days during a calendar year. 

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

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

10 United States, and Puerto Rico, Guam, American 

11 Samoa, the Trust Territory of the Pacific Islands, 

12 the Virgin Islands, and the Northern Mariana Is13 lands. 

14 ‘‘(8) STATE LAW.— 

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

16 includes all laws, decisions, rules, regulations, 

17 or other State action having the effect of law, 

18 of 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) CLERICAL AMENDMENT.—The table of contents 

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


srobinson on DSK4SPTVN1PROD with BILLS
38 

•S 534 IS

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

2 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.’’. 

Æ 


srobinson on DSK4SPTVN1PROD with BILLS