I 

112TH CONGRESS 

1ST SESSION H. R. 1112 

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

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 16, 2011 

Mr. NEUGEBAUER (for himself, Mr. DAVID SCOTT of Georgia, Mr. BACHUS, 

Mrs. BIGGERT, Mrs. CAPITO, Mr. GARRETT, Mr. DAVIS of Kentucky, Mr. 

AKIN, Mrs. BACHMANN, Mr. BOREN, Mr. BOSWELL, Mr. BRALEY of 

Iowa, Mr. CANSECO, Mr. CAPUANO, Mr. CARSON of Indiana, Mr. CHANDLER, Mr. CLAY, Mr. DOLD, Mr. DONNELLY of Indiana, Ms. FOXX, Mr. 

GERLACH, Mr. AL GREEN of Texas, Ms. HAYWORTH, Mr. HOLDEN, Mr. 

HUIZENGA of Michigan, Mr. JONES, Mr. KINZINGER of Illinois, Mr. 

LANCE, Mr. LARSON of Connecticut, Mr. LOEBSACK, Mr. LUETKEMEYER, 

Mrs. MALONEY, Mr. MANZULLO, Mr. MARCHANT, Mr. MCHENRY, Mr. 

MILLER of North Carolina, Ms. MOORE, Mr. MURPHY of Connecticut, 

Mrs. MYRICK, Mr. PERLMUTTER, Mr. POSEY, Mr. RENACCI, Mr. ROSS

of Arkansas, Mr. SCHRADER, Mr. STIVERS, Mr. TERRY, Mr. WALSH of 

Illinois, and Ms. WASSERMAN SCHULTZ) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To reform the National Association of Registered Agents 

and Brokers, and for other purposes. 

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


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1 SECTION 1. SHORT TITLE. 

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

3 of Registered Agents and Brokers Reform Act of 2011’’. 

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

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

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

9 amended to read as follows: 

10 ‘‘Subtitle C—National Association 

11 of Registered Agents and Brokers 

12 ‘‘SEC. 321. NATIONAL ASSOCIATION OF REGISTERED 

13 AGENTS AND BROKERS. 

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

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

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

18 ‘‘(1) be a nonprofit corporation; 

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

20 of Congress; 

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

22 United States Government; and 

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

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

2 29–301.01 et seq.). 

3 ‘‘SEC. 322. PURPOSE. 

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

5 a mechanism through which licensing, continuing edu6 cation, and other nonresident insurance producer quali7 fication requirements and conditions can be adopted and 

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

9 rules, and regulations pertaining to resident insurance 

10 producers or appointments or producing a net loss of pro11 ducer licensing revenues to States), while preserving the 

12 right of States to license, supervise, discipline, and estab13 lish licensing fees for insurance producers, and to pre14 scribe and enforce laws and regulations with regard to in15 surance-related consumer protection and unfair trade 

16 practices. 

17 ‘‘SEC. 323. MEMBERSHIP. 

18 ‘‘(a) ELIGIBILITY.— 

19 ‘‘(1) IN GENERAL.—Any insurance producer li20 censed in its home State shall, subject to paragraphs 

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

22 Association. 

23 ‘‘(2) INELIGIBILITY FOR SUSPENSION OR REV24 OCATION OF LICENSE.—Subject to paragraph (3), 

25 an insurance producer is not eligible to become a 


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1 member of the Association if a State insurance regu2 lator has suspended or revoked such producer’s li3 cense in that State during the 3-year period pre4 ceding the date on which such producer applies for 

5 membership. 

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

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

8 if— 

9 ‘‘(A) the State insurance regulator reissues 

10 or renews the license of such producer in the 

11 State in which the license was suspended or re12 voked; or 

13 ‘‘(B) the suspension or revocation is subse14 quently overturned. 

15 ‘‘(4) CRIMINAL BACKGROUND RECORD CHECK

16 REQUIRED.— 

17 ‘‘(A) IN GENERAL.—An insurance pro18 ducer shall not be eligible to become a member 

19 of the Association unless the producer has un20 dergone a national criminal background record 

21 check that complies with regulations prescribed 

22 by the Attorney General under subparagraph 

23 (L). 

24 ‘‘(B) CRIMINAL BACKGROUND RECORD

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1 surance producer who is licensed in a State and 

2 who has undergone a national criminal back3 ground record check in compliance with such 

4 requirements as a condition for such licensure 

5 shall be deemed to have undergone a national 

6 criminal background record check for purposes 

7 of subparagraph (A). 

8 ‘‘(C) CRIMINAL BACKGROUND RECORD

9 CHECK REQUESTED BY ASSOCIATION.— 

10 ‘‘(i) IN GENERAL.—The Association 

11 shall, upon request by an insurance pro12 ducer licensed in a State, submit identi13 fication information obtained from such 

14 producer, and a request for a national 

15 criminal background record check of such 

16 producer, to the Federal Bureau of Inves17 tigation. 

18 ‘‘(ii) BYLAWS OR RULES.—The board 

19 of directors of the Association shall pre20 scribe bylaws or rules for obtaining and 

21 utilizing identification information and 

22 criminal history record information, includ23 ing the establishment of reasonable fees re24 quired to perform a criminal background 

25 record check and appropriate safeguards 


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1 for maintaining confidentiality and security 

2 of the information. 

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

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

5 identification information as required by the At6 torney General concerning the person about 

7 whom the record is requested and a statement 

8 signed by the person authorizing the Associa9 tion to obtain the information. 

10 ‘‘(E) PROVISION OF INFORMATION BY AT11 TORNEY GENERAL.—Upon receiving a submis12 sion under subparagraph (C)(ii) from the Asso13 ciation, the Attorney General shall search all 

14 records of the Criminal Justice Information 

15 Services Division of the Federal Bureau of In16 vestigation that the Attorney General deems ap17 propriate for criminal history records cor18 responding to the identification information 

19 provided under subparagraph (D) and provide 

20 all information contained in such records that 

21 pertains to the request to the Association. 

22 ‘‘(F) LIMITATION ON PERMISSIBLE USES

23 OF INFORMATION.—The Association may use 

24 information provided under subparagraph (E) 

25 only— 


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1 ‘‘(i) for purposes of determining com2 pliance with membership criteria estab3 lished by the Association; and/or 

4 ‘‘(ii) to disclose to State insurance 

5 regulators, or Federal or State law en6 forcement agencies, in conformance with 

7 applicable law. 

8 ‘‘(G) APPLICANT ACCESS TO CRIMINAL

9 HISTORY RECORDS.—Notwithstanding subpara10 graph (F), a producer shall have the right to 

11 obtain from the Association a copy of any 

12 criminal history record information concerning 

13 the producer that is provided to the Association 

14 under subparagraph (E). 

15 ‘‘(H) PENALTY FOR IMPROPER USE OR

16 DISCLOSURE.—Whoever knowingly uses any in17 formation provided under subparagraph (E) for 

18 a purpose not authorized in subparagraph (F), 

19 or discloses any such information to anyone not 

20 authorized to receive it, shall be fined under 

21 title 18, United States Code, imprisoned for not 

22 more than 2 years, or both. 

23 ‘‘(I) RELIANCE ON INFORMATION.—Nei24 ther the Association nor any of its directors, of25 ficers, or employees shall be liable in any action 


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1 for using information provided under subpara2 graph (E) as permitted under subparagraph 

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

4 its accuracy. 

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

6 charge a reasonable fee to defray the expense of 

7 conducting the search and providing the infor8 mation under subparagraph (E), and any such 

9 fee shall be collected and remitted by the Asso10 ciation. 

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

12 in this paragraph shall be construed as— 

13 ‘‘(i) requiring a State insurance regu14 lator to perform criminal background 

15 checks under this section; or 

16 ‘‘(ii) limiting any other authority that 

17 allows access to criminal background 

18 records. 

19 ‘‘(L) REGULATIONS.—The Attorney Gen20 eral shall prescribe regulations to carry out this 

21 paragraph, which shall include— 

22 ‘‘(i) appropriate protections for ensur23 ing the confidentiality of information pro24 vided under subparagraph (E); and 


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1 ‘‘(ii) procedures providing a reason2 able opportunity for a producer to contest 

3 the accuracy of information regarding the 

4 producer provided under subparagraph 

5 (E). 

6 ‘‘(M) INELIGIBILITY FOR MEMBERSHIP.— 

7 ‘‘(i) IN GENERAL.—The Association 

8 may, under reasonably consistently applied 

9 standards, deny membership to an insur10 ance producer on the basis of criminal his11 tory information provided under subpara12 graph (E). 

13 ‘‘(ii) RIGHTS OF APPLICANTS DENIED

14 MEMBERSHIP.—The Association shall no15 tify any producer who is denied member16 ship on the basis of criminal history record 

17 information provided under subparagraph 

18 (E) of the right of the producer to— 

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

20 history record information provided to 

21 the Association under subparagraph 

22 (E) with respect to the producer; and 

23 ‘‘(II) challenge the accuracy and 

24 completeness of the information. 


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1 ‘‘(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRI2 TERIA.—The Association may establish membership cri3 teria that— 

4 ‘‘(1) bear a reasonable relationship to the pur5 poses for which the Association was established; and 

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

7 agencies to the Association membership, including 

8 imposing discriminatory membership fees on smaller 

9 insurance producers. 

10 ‘‘(c) ESTABLISHMENT OF CLASSES AND CATEGORIES

11 OF MEMBERSHIP.— 

12 ‘‘(1) CLASSES OF MEMBERSHIP.—The Associa13 tion may establish separate classes of membership, 

14 with separate criteria, if the Association reasonably 

15 determines that performance of different duties re16 quires different levels of education, training, experi17 ence, or other qualifications. 

18 ‘‘(2) CATEGORIES.— 

19 ‘‘(A) SEPARATE CATEGORIES FOR PRO20 DUCERS PERMITTED.—The Association may es21 tablish separate categories of membership for 

22 producers and for other persons within each 

23 class, based on the types of licensing categories 

24 that exist under State laws. 


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1 ‘‘(B) SEPARATE TREATMENT FOR DEPOSI2 TORY INSTITUTIONS PROHIBITED.—No special 

3 categories of membership, and no distinct mem4 bership criteria, shall be established for mem5 bers which are depository institutions or for 

6 employees, agents, or affiliates of depository in7 stitutions. 

8 ‘‘(d) MEMBERSHIP CRITERIA.— 

9 ‘‘(1) IN GENERAL.—The Association may estab10 lish criteria for membership which shall include 

11 standards for personal qualifications, education, 

12 training, and experience. 

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

14 under paragraph (1), the Association shall consider 

15 the NAIC Producer Licensing Model Act and the 

16 highest levels of insurance producer qualifications 

17 established under the licensing laws of the States. 

18 ‘‘(3) ASSISTANCE FROM STATES.— 

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

20 request a State to provide assistance in inves21 tigating and evaluating a prospective member’s 

22 eligibility for membership in the Association. 

23 ‘‘(B) RULE OF CONSTRUCTION.—Subpara24 graph (A) shall not be construed as requiring or 

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1 tional requirements concerning the licensing or 

2 evaluation of insurance producers. 

3 ‘‘(4) DENIAL OF MEMBERSHIP.—The Associa4 tion may, based on reasonably consistently applied 

5 standards, deny membership to any State-licensed 

6 insurance producer for failure to meet the member7 ship criteria established by the Association. 

8 ‘‘(e) EFFECT OF MEMBERSHIP.— 

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

10 Membership in the Association shall— 

11 ‘‘(A) authorize an insurance producer to 

12 sell, solicit, negotiate, effect, procure, deliver, 

13 renew, continue, or bind insurance in any State 

14 for which the member pays the licensing fee set 

15 by such State for any line or lines of insurance 

16 specified in such producer’s home State license, 

17 and exercise all such incidental powers, as shall 

18 be necessary to carry out such activities, includ19 ing claims adjustments and settlement, risk 

20 management, employee benefits advice, retire21 ment planning, and any other insurance-related 

22 consulting activities; 

23 ‘‘(B) be the equivalent of a nonresident in24 surance producer license issued in any State 

25 where the member pays the licensing fee; and 


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

2 laws, regulations, provisions or other action of 

3 any State concerning revocation or suspension 

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

5 within the scope of authority granted under this 

6 subsection and to all State laws, regulations, 

7 provisions and actions preserved under para8 graph (5). 

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

10 than the member’s home State, may require an indi11 vidual member to obtain a business entity license or 

12 membership in order to engage in any activity within 

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

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

15 or affiliate of the member to receive compensation 

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

17 ‘‘(3) AGENT FOR REMITTING FEES.—The Asso18 ciation shall act as any member’s agent for purposes 

19 of remitting licensing fees to any State pursuant to 

20 paragraph (1). 

21 ‘‘(4) REGULATOR NOTIFICATION.—The Associa22 tion shall notify the National Association of Insur23 ance Commissioners (hereinafter in this subtitle re24 ferred to as the ‘NAIC’) or its designee when a pro25 ducer becomes a member and identify, on an ongoVerDate Mar 15 2010 04:44 Mar 17, 2011 Jkt 099200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H1112.IH H1112

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1 ing basis, the States in which the member is author2 ized to operate. 

3 ‘‘(5) PRESERVATION OF STATE CONSUMER PRO4 TECTION AND MARKET CONDUCT REGULATION.—No 

5 provision of this section shall be construed as alter6 ing or affecting the continuing effectiveness of any 

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

8 State which purports to regulate market conduct or 

9 unfair trade practices or establish consumer protec10 tions to the extent that such law, regulation, provi11 sion, or other action is not inconsistent with the pro12 visions of this subtitle, and then only to the extent 

13 of such inconsistency. 

14 ‘‘(f) BIENNIAL RENEWAL.—Membership in the Asso15 ciation shall be renewed on a biennial basis. 

16 ‘‘(g) CONTINUING EDUCATION.— 

17 ‘‘(1) IN GENERAL.—The Association shall es18 tablish, as a condition of membership, continuing 

19 education requirements which shall be comparable to 

20 the continuing education requirements under the li21 censing laws of a majority of the States. 

22 ‘‘(2) STATE CONTINUING EDUCATION REQUIRE23 MENTS.—A member may not be required to satisfy 

24 continuing education requirements imposed under 


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

2 State other than such member’s home State. 

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

4 require a member to satisfy continuing education re5 quirements that are equivalent to any continuing 

6 education requirements of the member’s home State 

7 that have been satisfied by the member during the 

8 applicable licensing period. 

9 ‘‘(4) LIMITATION ON ASSOCIATION.—The Asso10 ciation shall not directly or indirectly offer any con11 tinuing education courses for insurance producers. 

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

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

14 may place an insurance producer that is a member 

15 of the Association on probation or suspend or revoke 

16 such producer’s membership in the Association, as 

17 the Association determines to be appropriate, if— 

18 ‘‘(A) the producer fails to meet the appli19 cable membership criteria of the Association; or 

20 ‘‘(B) the producer has been subject to dis21 ciplinary action pursuant to a final adjudicatory 

22 proceeding under the jurisdiction of a State in23 surance regulator. 

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

25 Association shall notify the NAIC or its designee 


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1 when a producer’s membership has been suspended, 

2 revoked, and otherwise terminated. 

3 ‘‘(i) CONSUMER COMPLAINTS.— 

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

5 ‘‘(A) receive and, when appropriate, inves6 tigate complaints from both consumers and 

7 State insurance regulators related to members 

8 of the Association; 

9 ‘‘(B) refer any proper complaint received 

10 in accordance with subparagraph (A) and make 

11 any related records and information available to 

12 the NAIC or its designee and to each State in13 surance regulator for the State of residence of 

14 the consumer who filed the complaint; and 

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

16 complaint to any additional appropriate State 

17 insurance regulator. 

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

19 Association shall maintain a toll-free telephone num20 ber for the purpose of this subsection and, as prac21 ticable, other alternative means of communication 

22 with consumers, such as an Internet web page. 

23 ‘‘SEC. 324. BOARD OF DIRECTORS. 

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

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1 title referred to as the ‘Board’), which shall have authority 

2 to govern and supervise all activities of the Association. 

3 ‘‘(b) POWERS.—The Board shall have such of the As4 sociation’s powers and authority as may be specified in 

5 the bylaws of the Association. 

6 ‘‘(c) COMPOSITION.— 

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

8 11 members who shall be appointed by the Presi9 dent, by and with the advice and consent of the Sen10 ate, of whom— 

11 ‘‘(A) 6 shall be State insurance commis12 sioners appointed in the manner provided in 

13 paragraph (2); 

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

15 and casualty insurance producers; 

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

17 health insurance producers; 

18 ‘‘(D) 1 shall be a representative of prop19 erty and casualty insurers; and 

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

21 health insurers. 

22 ‘‘(2) STATE INSURANCE REGULATOR REP23 RESENTATIVES.— 

24 ‘‘(A) Before making any appointments 

25 pursuant to subparagraph (A) of paragraph 


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1 (1), the President shall request a list of rec2 ommended candidates from the NAIC, which 

3 shall not be binding on the President. If the 

4 NAIC fails to submit a list of recommendations 

5 within 15 days of the request, the President 

6 may make the requisite appointments without 

7 considering the views of the NAIC. 

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

9 to membership on the Board pursuant to sub10 paragraph (A) of paragraph (1) shall belong to 

11 the same political party. 

12 ‘‘(C) If fewer than 6 State insurance com13 missioners accept appointment to the Board, 

14 the President may appoint the remaining State 

15 insurance commissioner members of the Board 

16 from among individuals who are former State 

17 insurance commissioners, provided that any 

18 former insurance commissioner so appointed 

19 shall not be employed by or have a present di20 rect or indirect financial interest in any insurer 

21 or other entity in the insurance industry other 

22 than direct or indirect ownership of, or bene23 ficial interest in, an insurance policy or annuity 

24 contract written or sold by an insurer. 


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

2 making any appointments pursuant to subpara3 graphs (B) through (E) of paragraph (1), the Presi4 dent may seek recommendations for candidates from 

5 national trade associations representing the category 

6 of individuals described, which shall not be binding 

7 on the President. 

8 ‘‘(4) STATE INSURANCE COMMISSIONER DE9 FINED.—For purposes of this subsection, the term 

10 ‘State insurance commissioner’ means a person who 

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

12 board, commission, or other body that is the prin13 cipal insurance regulatory authority for the State. 

14 ‘‘(d) TERMS.— 

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

16 member shall be for 2 years, except that— 

17 ‘‘(A) the term of— 

18 ‘‘(i) 3 of the State insurance commis19 sioner members of the Board initially ap20 pointed under subparagraph (A) of para21 graph (1); 

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

23 insurance producer members of the Board 

24 initially appointed under subparagraph (B) 

25 of paragraph (1); and 


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1 ‘‘(iii) 1 of the insurer representative 

2 members of the Board initially appointed 

3 under subparagraphs (D) and (E) of para4 graph (1), 

5 shall be 1 year, as designated by the President 

6 at the time of the nomination of such members; 

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

8 to serve after the expiration of the term to 

9 which such member was appointed until a suc10 cessor is qualified; and 

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

12 to fill a vacancy occurring before the expiration 

13 of the term for which the member’s predecessor 

14 was appointed shall be appointed only for the 

15 remainder of that term. 

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

17 may be reappointed to successive terms. 

18 ‘‘(e) 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 four 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. 


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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 ‘‘SEC. 325. OFFICERS. 

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

6 shall consist of a chairperson and a vice chairperson of 

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

8 of the Association, and such other officers and assistant 

9 officers as may be deemed necessary. 

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

11 Board and the Association shall be elected or appointed 

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

13 be prescribed in the bylaws of the Association. 

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

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

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

17 board of directors of the Association shall submit to 

18 the President and the NAIC any proposed bylaw or 

19 rules of the Association or any proposed amendment 

20 to the bylaws or rules, accompanied by a concise 

21 general statement of the basis and purpose of such 

22 proposal. 

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

24 or rule or proposed amendment to the bylaws or 

25 rules shall take effect, after notice published in the 


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1 Federal Register and opportunity for comment, upon 

2 such date as the Association may designate, unless 

3 suspended under subsection (c) of section 330. 

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

5 ‘‘(1) SPECIFICATION OF CHARGES.—In any pro6 ceeding to determine whether membership shall be 

7 denied, suspended, revoked, or not renewed (here8 after in this section referred to as a ‘disciplinary ac9 tion’) or to determine whether a member of the As10 sociation should be placed on probation, the Associa11 tion shall bring specific charges, notify such member 

12 of such charges, give the member an opportunity to 

13 defend against the charges, and keep a record. 

14 ‘‘(2) SUPPORTING STATEMENT.—A determina15 tion to take disciplinary action shall be supported by 

16 a statement setting forth— 

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

18 member has been found to have been engaged; 

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

20 the rules or regulations under this subtitle, or 

21 the rules of the Association which any such act 

22 or practice is deemed to violate; and 

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

24 for such sanction. 


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1 ‘‘SEC. 327. POWERS. 

2 ‘‘In addition to all the powers conferred upon a non3 profit corporation by the District of Columbia Nonprofit 

4 Corporation Act, the Association shall have the following 

5 powers: 

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

7 fees as the Association finds necessary to impose to 

8 cover the costs of its operations. 

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

10 rules governing the conduct of Association business 

11 and performance of its duties. 

12 ‘‘(3) To establish procedures for providing no13 tice and opportunity for comment pursuant to sec14 tion 326(a). 

15 ‘‘(4) To enter into and perform such agree16 ments as necessary to carry out its duties. 

17 ‘‘(5) To hire employees, professionals or special18 ists, and elect or appoint officers, and to fix their 

19 compensation, define their duties and give them ap20 propriate authority to carry out the purposes of this 

21 subtitle, and determine their qualification; and to es22 tablish the Association’s personnel policies and pro23 grams relating to, among other things, conflicts of 

24 interest, rates of compensation, and qualifications of 

25 personnel. 

26 ‘‘(6) To borrow money. 


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1 ‘‘(7) To secure funding from board member or2 ganizations and other industry associations for such 

3 amounts that the Association determines to be nec4 essary and appropriate to organize and begin oper5 ations of the Association, which shall be treated as 

6 loans to be repaid by the Association with interest 

7 at market rate. 

8 ‘‘SEC. 328. REPORT BY ASSOCIATION. 

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

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

11 the President and the NAIC a written report regarding 

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

13 rights and powers granted by this subtitle, during such 

14 fiscal year. 

15 ‘‘(b) FINANCIAL STATEMENTS.—Each report sub16 mitted under subsection (a) with respect to any fiscal year 

17 shall include financial statements setting forth the finan18 cial position of the Association at the end of such fiscal 

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

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

21 ‘‘SEC. 329. LIABILITY OF THE ASSOCIATION AND THE DI22 RECTORS, OFFICERS, AND EMPLOYEES OF 

23 THE ASSOCIATION. 

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

25 deemed to be an insurer or insurance producer within the 


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1 meaning of any State law, rule, regulation, or order regu2 lating or taxing insurers, insurance producers, or other en3 tities engaged in the business of insurance, including pro4 visions imposing premium taxes, regulating insurer sol5 vency or financial condition, establishing guaranty funds 

6 and levying assessments, or requiring claims settlement 

7 practices. 

8 ‘‘(b) LIABILITY OF DIRECTORS, OFFICERS, AND EM9 PLOYEES.—No director, officer, or employee of the Asso10 ciation shall be personally liable to any person for any ac11 tion taken or omitted in good faith in any matter within 

12 the scope of their responsibilities in connection with the 

13 Association. 

14 ‘‘SEC. 330. PRESIDENTIAL OVERSIGHT. 

15 ‘‘(a) REMOVAL OF BOARD.—If the President deter16 mines that the Association is acting in a manner contrary 

17 to the interests of the public or the purposes of this sub18 title or has failed to perform its duties under this subtitle, 

19 the President may remove the entire existing Board for 

20 the remainder of the term to which the members of the 

21 Board were appointed and appoint, in accordance with 

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

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

24 remainder of such terms. 


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

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

3 duty or malfeasance in office. 

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

5 President, or a person designated by the President for 

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

7 or prohibit any action, of the Association which the Presi8 dent or the designee determines is contrary to the pur9 poses of this subtitle. 

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

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

12 regulations, provisions, or other actions purporting to reg13 ulate insurance producers shall be preempted to the extent 

14 provided in subsection (b). 

15 ‘‘(b) PROHIBITED ACTIONS.— 

16 ‘‘(1) IN GENERAL.—No State shall— 

17 ‘‘(A) impede the activities of, take any ac18 tion against, or apply any provision of law or 

19 regulation arbitrarily or discriminatorily to, any 

20 insurance producer because that insurance pro21 ducer or any affiliate plans to become, has ap22 plied to become, or is a member of the Associa23 tion; 

24 ‘‘(B) impose any requirement upon a mem25 ber of the Association that it pay fees different 


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1 from those required to be paid to that State 

2 were it not a member of the Association; 

3 ‘‘(C) impose any continuing education re4 quirements on nonresident insurance producers; 

5 or 

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

7 appointment requirements upon any non8 resident insurance producer that sells, solicits, 

9 negotiates, effects, procures, delivers, renews, 

10 continues, or binds insurance for commercial 

11 property and casualty risks to an insured with 

12 risks located in more than 1 State, if such non13 resident insurance producer is otherwise li14 censed as an insurance producer in the State 

15 where the insured maintains its principal place 

16 of business and the contract of insurance in17 sures risks located in that State. 

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

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

20 shall— 

21 ‘‘(A) impose any licensing, integrity, per22 sonal or corporate qualifications, education, 

23 training, experience, residency, continuing edu24 cation, or bonding requirement upon a member 

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1 teria for membership in the Association or re2 newal of such membership; 

3 ‘‘(B) impose any requirement upon a mem4 ber of the Association that it be licensed, reg5 istered, or otherwise qualified to do business or 

6 remain in good standing in such State, includ7 ing any requirement that such insurance pro8 ducer register as a foreign company with the 

9 secretary of state or equivalent State official; or 

10 ‘‘(C) require that a member of the Associa11 tion submit to a criminal history record check 

12 as a condition of doing business in such State. 

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

14 ‘‘(a) COORDINATION WITH STATE INSURANCE REGU15 LATORS.—The Association may— 

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

17 the NAIC or any other appropriate entity as a cen18 tral clearinghouse, through which members of the 

19 Association may pursuant to section 323(e) disclose 

20 their intent to operate in 1 or more States and pay 

21 the licensing fees to the appropriate States; and 

22 ‘‘(2) establish a national database for the collec23 tion of regulatory information concerning the activi24 ties of insurance producers or contract with the 

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


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1 ‘‘(b) COORDINATION WITH THE FINANCIAL INDUS2 TRY REGULATORY AUTHORITY.—The Association shall 

3 coordinate with the Financial Industry Regulatory Au4 thority in order to ease any administrative burdens that 

5 fall on persons that are members of both associations, con6 sistent with the requirements of this subtitle and the Fed7 eral securities laws. 

8 ‘‘SEC. 333. RIGHT OF ACTION. 

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

10 a decision or action of the Association may, after reason11 ably exhausting available avenues for resolution within the 

12 Association, commence a civil action in an appropriate 

13 United States district court, and obtain all appropriate re14 lief. 

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

16 action, the court shall give appropriate weight to the Asso17 ciation’s interpretation of its bylaws and this subtitle. 

18 ‘‘SEC. 334. DEFINITIONS. 

19 ‘‘For purposes of this subtitle, the following defini20 tions shall apply: 

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

22 means the State in which the insurance producer 

23 maintains its principal place of residence or business 

24 and is licensed to act as an insurance producer. 


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

2 any product, other than title insurance, defined or 

3 regulated as insurance by the appropriate State in4 surance regulatory authority. 

5 ‘‘(3) INSURANCE PRODUCER.—The term ‘insur6 ance producer’ means any insurance agent or 

7 broker, excess or surplus lines broker or agent, in8 surance consultant, limited insurance representative, 

9 and any other individual or entity that solicits, nego10 tiates, effects, procures, delivers, renews, continues 

11 or binds policies of insurance or offers advice, coun12 sel, opinions or services related to insurance. 

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

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

15 United States, and Puerto Rico, Guam, American 

16 Samoa, the Trust Territory of the Pacific Islands, 

17 the Virgin Islands, and the Northern Mariana Is18 lands. 

19 ‘‘(5) STATE LAW.— 

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

21 includes all laws, decisions, rules, regulations, 

22 or other State action having the effect of law, 

23 of any State. 

24 ‘‘(B) LAWS APPLICABLE IN THE DISTRICT

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1 plicable only to or within the District of Colum2 bia shall be treated as a State law rather than 

3 a law of the United States.’’. 

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

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

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

7 the following new items: 

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

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

‘‘Sec. 322. Purpose. 

‘‘Sec. 323. Membership. 

‘‘Sec. 324. Board of directors. 

‘‘Sec. 325. Officers. 

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

‘‘Sec. 327. Powers. 

‘‘Sec. 328. Report by association. 

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

of the association. 

‘‘Sec. 330. Presidential oversight. 

‘‘Sec. 331. Relationship to State law. 

‘‘Sec. 332. Coordination with other regulators. 

‘‘Sec. 333. Judicial review and enforcement. 

‘‘Sec. 334. Definitions.’’. 

Æ 


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