IIB 

110TH CONGRESS 

2D SESSION H. R. 5611 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 22 (legislative day, SEPTEMBER 17), 2008 

Received 

OCTOBER 2 (legislative day, SEPTEMBER 17), 2008 

Read twice and referred to the Committee on Banking, Housing, and Urban 

Affairs 

AN ACT 

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 2008’’. 

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 be eligible to become 

21 a member in the Association. 

22 ‘‘(2) INELIGIBILITY FOR SUSPENSION OR REV23 OCATION OF LICENSE.—Notwithstanding paragraph 

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

25 eligible to become a member if a State insurance 


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1 regulator has suspended or revoked such producer’s 

2 license in that State during the 3-year period pre3 ceding the date on which such producer applies for 

4 membership. 

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

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

7 if— 

8 ‘‘(A) the State insurance regulator renews 

9 the license of such producer in the State in 

10 which the license was suspended or revoked; or 

11 ‘‘(B) the suspension or revocation is subse12 quently overturned. 

13 ‘‘(4) CRIMINAL BACKGROUND CHECK RE14 QUIRED.— 

15 ‘‘(A) IN GENERAL.—A State-licensed in16 surance producer shall not be eligible to become 

17 a member unless the producer has submitted to 

18 a national criminal background record check. 

19 ‘‘(B) CRIMINAL BACKGROUND CHECK OR20 DERED BY HOME STATE.—Any insurance pro21 ducer licensed in a State that, as a condition 

22 for such licensure, requires the submission of 

23 identification information to the Federal Bu24 reau of Investigation for a national criminal 

25 background record check shall be deemed to 


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1 have submitted to a national criminal back2 ground record check for purposes of subpara3 graph (A). 

4 ‘‘(C) CRIMINAL HISTORY CHECK ORDERED

5 BY ASSOCIATION.— 

6 ‘‘(i) IN GENERAL.—The Association 

7 may submit identification information ob8 tained from any State-licensed insurance 

9 producer licensed in a State that has not 

10 submitted to a national criminal back11 ground record check, and a request for a 

12 national criminal background record check 

13 of such producer, to the Federal Bureau of 

14 Investigation. 

15 ‘‘(ii) BYLAWS OR RULES.—The board 

16 of directors of the Association shall pre17 scribe bylaws or rules for obtaining and 

18 utilizing identification information and 

19 criminal background record information, 

20 including the establishment of fees re21 quired to perform a criminal background 

22 record check. 

23 ‘‘(D) ATTORNEY GENERAL AUTHORIZA24 TION.—Upon receiving a request from the Asso25 ciation, the Attorney General shall— 


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1 ‘‘(i) search the records of the Criminal 

2 Justice Information Services Division of 

3 the Federal Bureau of Investigation, and 

4 any other similar database over which the 

5 Attorney General has authority and deems 

6 appropriate, for any criminal background 

7 records (including wanted persons informa8 tion) corresponding to the identification in9 formation provided under subparagraph 

10 (F); and 

11 ‘‘(ii) provide any relevant information 

12 contained in such records that pertain to 

13 the request directly to the Association. 

14 ‘‘(E) RELEVANT INFORMATION DE15 FINED.—For purposes of subparagraph (D)(ii), 

16 the term ‘relevant information’ means any of 

17 the following records: 

18 ‘‘(i) All felony convictions. 

19 ‘‘(ii) All misdemeanor convictions in20 volving— 

21 ‘‘(I) violation of a law involving 

22 financial activities; 

23 ‘‘(II) dishonesty or breach of 

24 trust, within the meaning of section 

25 1033 of title 18, United States Code, 


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1 including taking, withholding, mis2 appropriating, or converting money or 

3 property; 

4 ‘‘(III) failure to comply with 

5 child support obligations; 

6 ‘‘(IV) failure to pay taxes; and 

7 ‘‘(V) domestic violence, child 

8 abuse, burglary of a dwelling, or a 

9 criminal offense that has as an ele10 ment the use or attempted use of 

11 physical force, or threat of great bod12 ily harm, or the use, attempted use, 

13 or threatened use of a deadly weapon, 

14 against an individual, including com15 mitting or attempting to commit mur16 der, manslaughter, kidnapping, aggra17 vated assault, forcible sex offenses, 

18 robbery, arson, extortion, and extor19 tionate extension of credit. 

20 ‘‘(F) FORM OF REQUEST.—A request 

21 under subparagraph (C) shall include a copy of 

22 any necessary identification information re23 quired by the Attorney General concerning the 

24 person about whom the record is requested and 


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1 a statement signed by the person acknowledging 

2 that the Association may request the search. 

3 ‘‘(G) LIMITATION ON PERMISSIBLE USES

4 OF INFORMATION.—Information obtained under 

5 this section may— 

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

7 enforcement purposes or for purposes of 

8 determining compliance with membership 

9 criteria established by the Association; 

10 ‘‘(ii) be disclosed only to the Associa11 tion, State insurance regulators, or Federal 

12 or State law enforcement agencies; and 

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

14 agrees to— 

15 ‘‘(I) maintain the confidentiality 

16 of such information; and 

17 ‘‘(II) limit the use of such infor18 mation to the purposes described in 

19 clause (i). 

20 ‘‘(H) PENALTY FOR IMPROPER USE.— 

21 Whoever uses any information obtained under 

22 this section knowingly and willfully for an un23 authorized purpose shall be fined under title 18, 

24 United States Code, imprisoned for not more 

25 than 2 years, or both. 


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1 ‘‘(I) RELIANCE ON INFORMATION.—Nei2 ther the Association nor any of its directors, of3 ficers, or employees who reasonably rely on in4 formation provided under this section shall be 

5 liable in any action for using information as 

6 permitted under this section in good faith. 

7 ‘‘(J) CLARIFICATION OF SECTION 1033.— 

8 ‘‘(i) IN GENERAL.—With respect to 

9 any action brought under section 

10 1033(e)(1)(B) of title 18, United States 

11 Code, no person engaged in the business of 

12 conducting financial activities shall be sub13 ject to any penalty resulting from such sec14 tion if the individual whom the person per15 mitted to engage in the business of insur16 ance is a member of the Association or is 

17 licensed, or approved (as part of an appli18 cation or otherwise), by a State insurance 

19 regulator that performs criminal back20 ground checks under this section, unless 

21 such person knows that the individual is in 

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

23 title. 


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1 ‘‘(ii) FINANCIAL ACTIVITIES DE2 FINED.—For purposes of this subpara3 graph, the term ‘financial activities’— 

4 ‘‘(I) means banking activities (in5 cluding the ownership of a bank), se6 curities activities, insurance activities, 

7 or commodities activities; and 

8 ‘‘(II) includes all activities that 

9 are financial in nature or are inci10 dental to a financial activity (as de11 fined under section 4(k) of the Bank 

12 Holding Company Act of 1956). 

13 ‘‘(K) FEES.—The Attorney General may 

14 charge a reasonable fee for the provision of in15 formation under this paragraph. 

16 ‘‘(L) RULE OF CONSTRUCTION.—No provi17 sion of this paragraph shall be construed as— 

18 ‘‘(i) requiring a State insurance regu19 lator to perform criminal background 

20 checks under this section; or 

21 ‘‘(ii) superseding or otherwise limiting 

22 any other authority that allows access to 

23 criminal background records. 


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1 ‘‘(M) REGULATIONS.—The Attorney Gen2 eral may prescribe regulations to carry out this 

3 paragraph. 

4 ‘‘(N) INELIGIBILITY FOR MEMBERSHIP.— 

5 The Association may deny membership to any 

6 State-licensed insurance producer on the basis 

7 of criminal history information obtained pursu8 ant to subparagraph (D). 

9 ‘‘(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRI10 TERIA.—The Association may establish membership cri11 teria that— 

12 ‘‘(1) bear a reasonable relationship to the pur13 poses for which the Association was established; and 

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

15 agencies to the Association membership, including 

16 imposing discriminatory membership fees on smaller 

17 insurance producers. 

18 ‘‘(c) ESTABLISHMENT OF CLASSES AND CATEGORIES

19 OF MEMBERSHIP.— 

20 ‘‘(1) CLASSES OF MEMBERSHIP.—The Associa21 tion may establish separate classes of membership, 

22 with separate criteria, if the Association reasonably 

23 determines that performance of different duties re24 quires different levels of education, training, experi25 ence, or other qualifications. 


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1 ‘‘(2) CATEGORIES.— 

2 ‘‘(A) SEPARATE CATEGORIES FOR PRO3 DUCERS PERMITTED.—The Association may es4 tablish separate categories of membership for 

5 producers and for other persons within each 

6 class, based on the types of licensing categories 

7 that exist under State laws. 

8 ‘‘(B) SEPARATE TREATMENT FOR DEPOSI9 TORY INSTITUTIONS PROHIBITED.—No special 

10 categories of membership, and no distinct mem11 bership criteria, shall be established for mem12 bers which are depository institutions or for 

13 employees, agents, or affiliates of depository in14 stitutions. 

15 ‘‘(d) MEMBERSHIP CRITERIA.— 

16 ‘‘(1) IN GENERAL.—The Association may estab17 lish criteria for membership which shall include 

18 standards for personal qualifications, education, 

19 training, and experience. 

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

21 under paragraph (1), the Association shall consider 

22 the NAIC Producer Licensing Model Act and the 

23 highest levels of insurance producer qualifications 

24 established under the licensing laws of the States. 

25 ‘‘(3) ASSISTANCE FROM STATES.— 


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

2 request a State to provide assistance in inves3 tigating and evaluating a prospective member’s 

4 eligibility for membership in the Association. 

5 ‘‘(B) RULE OF CONSTRUCTION.—Subpara6 graph (A) shall not be construed as requiring or 

7 authorizing any State to adopt new or addi8 tional requirements concerning the licensing or 

9 evaluation of insurance producers. 

10 ‘‘(4) DENIAL OF MEMBERSHIP.—The Associa11 tion may deny membership to any State-licensed in12 surance producer for failure to meet the membership 

13 criteria established by the Association. 

14 ‘‘(e) EFFECT OF MEMBERSHIP.— 

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

16 Membership in the Association shall— 

17 ‘‘(A) authorize an insurance producer to 

18 sell, solicit, negotiate, effect, procure, deliver, 

19 renew, continue, or bind insurance in any State 

20 for which the member pays the licensing fee set 

21 by such State for any line or lines of insurance 

22 specified in such producer’s home State license, 

23 and exercise all such incidental powers, as shall 

24 be necessary to carry out such activities, includ25 ing claims adjustments and settlement, risk 


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1 management, employee benefits advice, retire2 ment planning, and any other insurance-related 

3 consulting activities; 

4 ‘‘(B) be the equivalent of a nonresident in5 surance producer license issued in any state 

6 where the member pays the licensing fee; and 

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

8 laws, regulations, provisions or other action of 

9 any State concerning revocation or suspension 

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

11 within the scope of authority granted under this 

12 subsection and to all state laws, regulations, 

13 provisions and actions preserved under para14 graph (4). 

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

16 than the member’s home State, may require an indi17 vidual member to obtain a business entity license or 

18 membership in order to engage in any activity within 

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

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

21 or affiliate of the member to receive compensation 

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

23 ‘‘(3) AGENT FOR REMITTING FEES.—The Asso24 ciation shall act as any member’s agent for purposes 


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1 of remitting licensing fees to any State pursuant to 

2 paragraph (1). 

3 ‘‘(4) 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 The Association may place an insurance producer that is 

14 a member of the Association on probation or suspend or 

15 revoke such producer’s membership in the Association, as 

16 the Association determines to be appropriate, if— 

17 ‘‘(1) the producer fails to meet the applicable 

18 membership criteria of the Association; or 

19 ‘‘(2) the producer has been subject to discipli20 nary action pursuant to a final adjudicatory pro21 ceeding under the jurisdiction of a State insurance 

22 regulator. 

23 ‘‘(i) OFFICE OF CONSUMER COMPLAINTS.— 

24 ‘‘(1) IN GENERAL.—The Association shall es25 tablish an office of consumer complaints that shall— 


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1 ‘‘(A) receive and, when appropriate, inves2 tigate complaints from both consumers and 

3 State insurance regulators related to members 

4 of the Association; 

5 ‘‘(B) maintain records of all complaints re6 ceived in accordance with subparagraph (A) and 

7 make such records available to the National As8 sociation of Insurance Commissioners (herein9 after in this subtitle referred to as the ‘NAIC’) 

10 and to each State insurance regulator for the 

11 State of residence of the consumer who filed the 

12 complaint; and 

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

14 complaint to any appropriate State insurance 

15 regulator. 

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

17 office of consumer complaints shall maintain a toll18 free telephone number for the purpose of this sub19 section and, as practicable, other alternative means 

20 of communication with consumers, such as an Inter21 net web page. 

22 ‘‘SEC. 324. BOARD OF DIRECTORS. 

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

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1 erning and supervising the activities of the Association 

2 and the members of the Association. 

3 ‘‘(b) POWERS.— 

4 ‘‘(1) IN GENERAL.—The Board shall have such 

5 powers and authority as may be specified in the by6 laws of the Association. 

7 ‘‘(2) QUORUM REQUIRED.—All decisions of the 

8 Board shall require an affirmative vote of a simple 

9 majority of Board members. 

10 ‘‘(c) COMPOSITION.— 

11 ‘‘(1) IN GENERAL.—The Board shall be com12 posed of 11 members, of whom— 

13 ‘‘(A) 6 shall be State insurance commis14 sioners appointed in the manner provided in 

15 paragraph (2), and 

16 ‘‘(B) 5 shall be insurance industry rep17 resentatives appointed in the manner provided 

18 in paragraph (3). 

19 ‘‘(2) MEMBERS APPOINTED BY THE NAIC.— 

20 ‘‘(A) IN GENERAL.—The NAIC shall ap21 point 1 member of the Board from among State 

22 insurance commissioners in each of the fol23 lowing 3 categories of States: 


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1 ‘‘(i) The 18 States with the smallest 

2 total direct written premiums from all in3 surance policies written in such States. 

4 ‘‘(ii) The 18 States with the largest 

5 total direct written premiums from all in6 surance policies written in such States. 

7 ‘‘(iii) The States that are not among 

8 the States described in clauses (i) and (ii). 

9 ‘‘(B) AT-LARGE MEMBERS.—The NAIC 

10 shall appoint 3 Board members pursuant to cri11 teria established by the NAIC’s membership. 

12 ‘‘(3) MEMBERS APPOINTED BY INSURANCE

13 TRADE ASSOCIATIONS.— 

14 ‘‘(A) INSURANCE PRODUCER REPRESENTA15 TIVES.—3 of the 5 members who are insurance 

16 industry representatives shall be appointed as 

17 follows by the following trade associations or 

18 their successor organizations: 

19 ‘‘(i) 1 member appointed by the Coun20 cil of Insurance Agents and Brokers from 

21 among representatives of such association. 

22 ‘‘(ii) 1 member appointed by the Inde23 pendent Insurance Agents and Brokers of 

24 America from among representatives of 

25 such association. 


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1 ‘‘(iii) 1 member appointed by the Na2 tional Association of Insurance and Finan3 cial Advisors from among representatives 

4 of such association. 

5 ‘‘(B) PROPERTY AND CASUALTY INSURER

6 REPRESENTATIVE.—1 of the 5 members who 

7 are insurance industry representatives shall be 

8 appointed by the American Insurance Associa9 tion, the National Association of Mutual Insur10 ance Companies, and the Property and Cas11 ualty Insurers Association of America from 

12 among representatives of each such association, 

13 on a rotating basis. 

14 ‘‘(C) LIFE AND HEALTH INSURER REP15 RESENTATIVE.—1 of the 5 members who are 

16 insurance industry representatives shall be ap17 pointed by the American Council of Life Insur18 ers and the Association of Health Insurance 

19 Plans from among representatives of each such 

20 association, on a rotating basis. 

21 ‘‘(4) ALTERNATE APPOINTMENT.— 

22 ‘‘(A) IN GENERAL.—If the NAIC or a 

23 nominating group of insurance trade associa24 tions fails to make appointments to the Board 

25 as required under paragraph (2) or (3), the 


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1 President shall appoint such members of the 

2 Association’s Board from lists of candidates 

3 provided by the NAIC, in the case of a member 

4 described in paragraph (2) or the nominating 

5 group of insurance trade associations pursuant 

6 to the relevant subparagraph of paragraph (3), 

7 in the case of a member described in any such 

8 subparagraph. 

9 ‘‘(B) PROCEDURES FOR OBTAINING NAIC

10 APPOINTMENT RECOMMENDATIONS.— 

11 ‘‘(i) PRESIDENTIAL APPOINTMENT

12 FROM LIST.—If the NAIC fails to appoint 

13 members of the Board as provided under 

14 subparagraph (A) or (B) of paragraph (2) 

15 within 60 days after the date of the enact16 ment of the National Association of Reg17 istered Agents and Brokers Reform Act of 

18 2008, the President shall, with the advice 

19 and consent of the Senate, appoint 6 mem20 bers to the Board who are current State 

21 insurance commissioners in accordance 

22 with the requirements of subparagraphs 

23 (A) and (B) of paragraph (2) from a list 

24 of candidates recommended to the Presi25 dent by the NAIC. 


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1 ‘‘(ii) PRESIDENTIAL APPOINTMENT

2 WITHOUT A LIST.—If the NAIC fails to 

3 provide a list within 90 days after the date 

4 of the enactment of the National Associa5 tion of Registered Agents and Brokers Re6 form Act of 2008, or if any list that is pro7 vided does not include at least 10 rec8 ommended candidates or comply with the 

9 requirements of paragraph (2), the Presi10 dent shall, with the advice and consent of 

11 the Senate, appoint 6 members to the 

12 Board without considering the views of the 

13 NAIC, in accordance with requirements of 

14 paragraph (2). 

15 ‘‘(C) PROCEDURES FOR OBTAINING INSUR16 ANCE TRADE ASSOCIATION GROUP APPOINT17 MENT RECOMMENDATIONS.— 

18 ‘‘(i) PRESIDENTIAL APPOINTMENT

19 FROM LIST.—If any group of nominating 

20 insurance trade associations identified 

21 under subparagraph (A), (B), or (C) of 

22 paragraph (3) fails to appoint members of 

23 the Board as provided under such subpara24 graph within 60 days after the date of the 

25 enactment of the National Association of 


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1 Registered Agents and Brokers Reform 

2 Act of 2008, the President shall, with the 

3 advice and consent of the Senate, make the 

4 requisite appointments pursuant to each 

5 such subparagraph from a list of can6 didates recommended to the President by 

7 such group. 

8 ‘‘(ii) PRESIDENTIAL APPOINTMENT

9 WITHOUT A LIST.—If the nominating 

10 group of insurance trade associations iden11 tified under subparagraph (A), (B), or (C) 

12 of paragraph (3) fails to provide a list 

13 within 90 days after date of the enactment 

14 of the National Association of Registered 

15 Agents and Brokers Reform Act of 2008, 

16 or if any list that is provided does not com17 ply with the requirements of the subpara18 graph, the President shall, with the advice 

19 and consent of the Senate, make the req20 uisite appointments without considering 

21 the views of such group. 

22 ‘‘(iii) LIST OF RECOMMENDATIONS.— 

23 Any list of recommended candidates pro24 vided to the President by a nominating 

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1 tified under subparagraph (A), (B), or (C) 

2 of paragraph (3) shall include— 

3 ‘‘(I) at least 2 recommended can4 didates from each association identi5 fied under paragraph (3)(A); 

6 ‘‘(II) at least 2 recommended 

7 candidates, in the case of associations 

8 identified under paragraph (3)(B); 

9 and 

10 ‘‘(III) at least 2 recommended 

11 candidates, in the case of associations 

12 identified under paragraph (3)(C). 

13 ‘‘(D) ALTERNATE APPOINTMENT OF STATE

14 INSURANCE COMMISSIONERS.—If fewer than 6 

15 State insurance commissioners accept appoint16 ment to the Board pursuant to subparagraph 

17 (B), the President, with the advice and consent 

18 of the Senate, may appoint the remaining State 

19 insurance commissioner members of the Board 

20 from among individuals who are current or 

21 former State insurance commissioners, to the 

22 extent that— 

23 ‘‘(i) any former insurance commis24 sioner appointed by the President shall not 

25 be employed by or have a present direct or 


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1 indirect financial interest in any insurer or 

2 other entity in the insurance industry 

3 other than direct or indirect ownership of, 

4 or beneficial interest in, any insurance pol5 icy or annuity contract written or sold by 

6 an insurer; and 

7 ‘‘(ii) not more than 3 members ap8 pointed to membership on the Board under 

9 this subparagraph belong to the same po10 litical party as the President. 

11 ‘‘(5) STATE INSURANCE COMMISSIONER DE12 FINED.—For purposes of this subsection, the term 

13 ‘State insurance commissioner’ means a person who 

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

15 board, commission, or other body that is the prin16 cipal insurance regulatory authority for the State. 

17 ‘‘(d) TERMS.— 

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

19 member shall, after the initial appointment of the 

members of the Board, be for 2 years, with 1 20 ⁄2 of the 

21 members to be appointed each year and divided as 

22 evenly as possible between members appointed under 

23 paragraphs (2) and (3) of subsection (c). 

24 ‘‘(2) LIMITATION ON SUCCESSIVE TERMS.— 

25 Only Board members appointed under subsections 


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1 (c)(2) and (c)(3)(A) may be re-appointed for an ad2 ditional term. 

3 ‘‘(e) BOARD VACANCIES.— 

4 ‘‘(1) IN GENERAL.—Any vacancy on the board 

5 of directors shall be filled as provided under sub6 paragraph (A) or (B) of paragraph (2), and any 

7 member appointed to fill a vacancy occurring before 

8 the expiration of the term for which the member’s 

9 predecessor was appointed shall be appointed only 

10 for the remainder of that term. 

11 ‘‘(2) ALTERNATE APPOINTMENT.—If the NAIC 

12 or a nominating group of trade associations fails to 

13 appoint a member to the Board to fill a vacancy 

14 within 60 days from the date that such vacancy oc15 curs, the President shall, with the advice and con16 sent of the Senate, make the requisite appointment 

17 pursuant to the procedures established under the ap18 plicable subparagraph of subsection (c)(4). 

19 ‘‘(f) MEETINGS.—The Board shall meet at the call 

20 of the chairperson, or as otherwise provided by the bylaws 

21 of the Association. 

22 ‘‘SEC. 325. OFFICERS. 

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

24 shall consist of a chairperson and a vice chairperson of 

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


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1 of the Association, and such other officers and assistant 

2 officers as may be deemed necessary. 

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

4 Board and the Association shall be elected or appointed 

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

6 be prescribed in the bylaws of the Association. 

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

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

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

10 board of directors of the Association shall submit to 

11 the President, the Congress, and the NAIC any pro12 posed bylaw or rules of the Association or any pro13 posed amendment to the bylaws or rules, accom14 panied by a concise general statement of the basis 

15 and purpose of such proposal. 

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

17 or rule or proposed amendment to the bylaws or 

18 rules shall take effect, after notice published in an 

19 insurance trade journal and opportunity for com20 ment, upon such date as the Association may des21 ignate. 

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

23 ‘‘(1) SPECIFICATION OF CHARGES.—In any pro24 ceeding to determine whether membership shall be 

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1 after in this section referred to as a ‘disciplinary ac2 tion’) or to determine whether a member of the As3 sociation should be placed on probation, the Associa4 tion shall bring specific charges, notify such member 

5 of such charges, give the member an opportunity to 

6 defend against the charges, and keep a record. 

7 ‘‘(2) SUPPORTING STATEMENT.—A determina8 tion to take disciplinary action shall be supported by 

9 a statement setting forth— 

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

11 member has been found to have been engaged; 

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

13 the rules or regulations under this subtitle, or 

14 the rules of the Association which any such act 

15 or practice is deemed to violate; and 

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

17 for such sanction. 

18 ‘‘SEC. 327. POWERS. 

19 ‘‘In addition to all the powers conferred upon a non20 profit corporation by the District of Columbia Nonprofit 

21 Corporation Act, the Association shall have the following 

22 powers: 

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

24 fees as the Association finds necessary to impose to 

25 cover the costs of its operations. 


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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 special10 ists, 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 assess board member organizations and 

20 associations fees for such amounts that the Associa21 tion determines to be necessary and appropriate to 

22 organize and begin operations of the Association, 

23 which shall be treated as loans to be repaid by the 

24 Association with interest at market rate. 


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1 ‘‘SEC. 328. REPORT BY ASSOCIATION. 

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

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

4 the President, the Congress, and the NAIC a written re5 port regarding the conduct of its business, and the exer6 cise of the other rights and powers granted by this sub7 title, during such fiscal year. 

8 ‘‘(b) FINANCIAL STATEMENTS.—Each report sub9 mitted under subsection (a) with respect to any fiscal year 

10 shall include financial statements setting forth the finan11 cial position of the Association at the end of such fiscal 

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

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

14 ‘‘SEC. 329. LIABILITY OF THE ASSOCIATION AND THE DI15 RECTORS, OFFICERS, AND EMPLOYEES OF 

16 THE ASSOCIATION. 

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

18 deemed to be an insurer or insurance producer within the 

19 meaning of any State law, rule, regulation, or order regu20 lating or taxing insurers, insurance producers, or other en21 tities engaged in the business of insurance, including pro22 visions imposing premium taxes, regulating insurer sol23 vency or financial condition, establishing guaranty funds 

24 and levying assessments, or requiring claims settlement 

25 practices. 


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1 ‘‘(b) LIABILITY OF THE ASSOCIATION, ITS DIREC2 TORS, OFFICERS, AND EMPLOYEES.—Neither the Associa3 tion nor any of its directors, officers, or employees shall 

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

5 omitted in good faith under or in connection with any mat6 ter subject to this subtitle. 

7 ‘‘SEC. 330. PRESIDENTIAL REVIEW. 

8 ‘‘(a) REMOVAL.—If the President determines and 

9 certifies to the Speaker of the House, the House Minority 

10 Leader, the Senate Majority Leader and the Senate Mi11 nority Leader that the Association is acting in a manner 

12 contrary to the purposes of this subtitle or has failed to 

13 perform its duties under this subtitle, the President may 

14 remove the entire existing Board for the remainder of the 

15 term to which the members of the Board were appointed 

16 and appoint, in accordance with section 324(c)(4) with the 

17 advice and consent of the Senate, new members to fill the 

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

19 ‘‘(b) SUSPENSION OF RULES OR ACTIONS.—The 

20 President, or a person designated by the President for 

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

22 or prohibit any action, of the Association which the Presi23 dent or the designee determines and certifies to the Speak24 er of the House, the House minority leader, the Senate 


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1 majority leader, and the Senate minority leader is contrary 

2 to the purposes of this subtitle. 

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

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

5 regulations, provisions, or other actions purporting to reg6 ulate insurance producers shall be preempted to the extent 

7 provided in subsection (b). 

8 ‘‘(b) PROHIBITED ACTIONS.— 

9 ‘‘(1) IN GENERAL.—No State shall— 

10 ‘‘(A) impede the activities of, take any ac11 tion against, or apply any provision of law or 

12 regulation to, any insurance producer because 

13 that insurance producer or any affiliate plans to 

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

15 of the Association; 

16 ‘‘(B) impose any requirement upon a mem17 ber of the Association that it pay fees different 

18 from those required to be paid to that State 

19 were it not a member of the Association; 

20 ‘‘(C) impose any continuing education re21 quirements on nonresident insurance producers; 

22 or 

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

24 appointment requirements upon any non25 resident insurance producer that sells, solicits, 


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1 negotiates, effects, procures, delivers, renews, 

2 continues, or binds insurance for commercial 

3 property and casualty risks to an insured with 

4 risks located in more than 1 State, provided 

5 that such nonresident insurance producer is 

6 otherwise licensed as an insurance producer in 

7 the State where the insured maintains its prin8 cipal place of business and the contract of in9 surance insures risks located in that State. 

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

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

12 shall— 

13 ‘‘(A) impose any licensing, integrity, per14 sonal or corporate qualifications, education, 

15 training, experience, residency, continuing edu16 cation, or bonding requirement upon a member 

17 of the Association that is different from the cri18 teria for membership in the Association or re19 newal of such membership; 

20 ‘‘(B) impose any requirement upon a mem21 ber of the Association that it be licensed, reg22 istered, or otherwise qualified to do business or 

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1 ducer register as a foreign company with the 

2 secretary of state or equivalent State official; or 

3 ‘‘(C) require that a member of the Associa4 tion submit to a criminal history record check 

5 as a condition of doing business in such State. 

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

7 ‘‘(a) COORDINATION WITH STATE INSURANCE REGU8 LATORS.—The Association may— 

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

10 the NAIC or any other entity as a central clearing11 house, through which members of the Association 

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

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

14 fees to the appropriate States; and 

15 ‘‘(2) establish a national database for the collec16 tion of regulatory information concerning the activi17 ties of insurance producers or contract with the 

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

19 ‘‘(b) COORDINATION WITH THE FINANCIAL INDUS20 TRY REGULATORY AUTHORITY.—The Association shall 

21 coordinate with the Financial Industry Regulatory Au22 thority in order to ease any administrative burdens that 

23 fall on persons that are members of both associations, con24 sistent with the purposes of this subtitle and the Federal 

25 securities laws. 


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

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

3 district court shall have exclusive jurisdiction over litiga4 tion to which the Association is a party or any matter aris5 ing under this subtitle, including disputes between the As6 sociation and its members that arise under this subtitle, 

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

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

9 person shall be required to exhaust all available adminis10 trative remedies before the Association before it may seek 

11 judicial review of an Association decision. 

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

13 other proceeding involving this subtitle, the court shall 

14 give at least equal weight and deference to the interpreta15 tions of the Association as would be given to any State 

16 or Federal agency with respect to any law, regulation, in17 terpretation, or order addressing the same issues. 

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. 

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

26 any product, other than title insurance, defined or 


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1 regulated as insurance by the appropriate State in2 surance regulatory authority. 

3 ‘‘(3) INSURANCE PRODUCER.—The term ‘insur4 ance producer’ means any insurance agent or 

5 broker, excess or surplus lines broker or agent, in6 surance consultant, limited insurance representative, 

7 and any other individual or entity that solicits, nego8 tiates, effects, procures, delivers, renews, continues 

9 or binds policies of insurance or offers advice, coun10 sel, opinions or services related to insurance. 

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

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

13 United States, and Puerto Rico, Guam, American 

14 Samoa, the Trust Territory of the Pacific Islands, 

15 the Virgin Islands, and the Northern Mariana Is16 lands. 

17 ‘‘(5) STATE LAW.— 

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

19 includes all laws, decisions, rules, regulations, 

20 or other State action having the effect of law, 

21 of any State. 

22 ‘‘(B) LAWS APPLICABLE IN THE DISTRICT

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1 bia shall be treated as a State law rather than 

2 a law of the United States.’’. 

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

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

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

6 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 review. 

‘‘Sec. 331. Relationship to state law. 

‘‘Sec. 332. Coordination with other regulators. 

‘‘Sec. 333. Judicial review and enforcement. 

‘‘Sec. 334. Definitions.’’. 

Passed the House of Representatives September 17, 

2008. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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