I 

110TH CONGRESS 

2D SESSION H. R. 5611 

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

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 13, 2008 

Mr. SCOTT of Georgia (for himself, Mr. DAVIS of Kentucky, Mr. GERLACH, 

Mr. MANZULLO, Mr. BARRETT of South Carolina, Mr. NEUGEBAUER, 

Mr. JONES of North Carolina, Mr. WILSON of Ohio, Mr. CLAY, Mr. 

ROSS, Mr. MEEKS of New York, Ms. MOORE of Wisconsin, Mr. DONNELLY, Ms. GINNY BROWN-WAITE of Florida, and Mr. LINCOLN DAVIS

of Tennessee) 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, 

3 SECTION 1. SHORT TITLE. 

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

5 of Registered Agents and Brokers Reform Act of 2008’’. 


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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.). 


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1 ‘‘SEC. 322. PURPOSE. 

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

3 a mechanism through which licensing, continuing edu4 cation, and other insurance producer qualification require5 ments and conditions can be adopted and applied on a 

6 multi-state basis, while preserving the right of States to 

7 license, supervise, and discipline insurance producers, and 

8 to prescribe and enforce laws and regulations with regard 

9 to insurance-related consumer protection and unfair trade 

10 practices. 

11 ‘‘SEC. 323. MEMBERSHIP. 

12 ‘‘(a) ELIGIBILITY.— 

13 ‘‘(1) IN GENERAL.—Any insurance producer li14 censed in its home State shall be eligible to become 

15 a member in the Association. 

16 ‘‘(2) INELIGIBILITY FOR SUSPENSION OR REV17 OCATION OF LICENSE.—Notwithstanding paragraph 

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

19 eligible to become a member if a State insurance 

20 regulator has suspended or revoked such producer’s 

21 license in that State during the 3-year period pre22 ceding the date on which such producer applies for 

23 membership. 

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

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

26 if— 


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1 ‘‘(A) the State insurance regulator renews 

2 the license of such producer in the State in 

3 which the license was suspended or revoked; or 

4 ‘‘(B) the suspension or revocation is subse5 quently overturned. 

6 ‘‘(4) CRIMINAL BACKGROUND CHECK RE7 QUIRED.— 

8 ‘‘(A) IN GENERAL.—A State-licensed in9 surance producer shall not be eligible to become 

10 a member unless the producer has submitted to 

11 a national criminal background record check. 

12 ‘‘(B) CRIMINAL BACKGROUND CHECK OR13 DERED BY HOME STATE.—Any insurance pro14 ducer licensed in a State that, as a condition 

15 for such licensure, requires the submission of 

16 identification information to the Federal Bu17 reau of Investigation for a national criminal 

18 background record check shall be deemed to 

19 have submitted to a national criminal back20 ground record check for purposes of subpara21 graph (A). 

22 ‘‘(C) CRIMINAL HISTORY CHECK ORDERED

23 BY ASSOCIATION.— 

24 ‘‘(i) IN GENERAL.—The Association 

25 may submit identification information obVerDate Aug 31 2005 04:06 Mar 14, 2008 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5611.IH H5611

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1 tained from any State-licensed insurance 

2 producer licensed in a State that has not 

3 submitted to a national criminal back4 ground record check, and a request for a 

5 national criminal background record check 

6 of such producer, to the Federal Bureau of 

7 Investigation. 

8 ‘‘(ii) REGULATIONS.—The board of 

9 directors of the Association shall prescribe 

10 regulations for obtaining identification in11 formation and criminal background record 

12 information, including the establishment of 

13 fees required to perform a criminal back14 ground record check. 

15 ‘‘(D) ATTORNEY GENERAL AUTHORIZA16 TION.—Upon receiving a request from the Asso17 ciation, the Attorney General shall— 

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

19 Justice Information Services Division of 

20 the Federal Bureau of Investigation, and 

21 any other similar database over which the 

22 Attorney General has authority and deems 

23 appropriate, for any criminal background 

24 records (including wanted persons informa25 tion) corresponding to the identification inVerDate Aug 31 2005 04:06 Mar 14, 2008 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5611.IH H5611

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1 formation provided under subparagraph 

2 (F); and 

3 ‘‘(ii) provide any relevant information 

4 contained in such records that pertain to 

5 the request directly to the Association. 

6 ‘‘(E) RELEVANT INFORMATION DE7 FINED.—For purposes of subparagraph (D)(ii), 

8 the term ‘relevant information’ means any of 

9 the following records: 

10 ‘‘(i) All felony convictions. 

11 ‘‘(ii) All misdemeanor convictions in12 volving— 

13 ‘‘(I) violation of a law involving 

14 financial activities; 

15 ‘‘(II) dishonesty or breach of 

16 trust, within the meaning of section 

17 1033 of title 18, United States Code, 

18 including taking, withholding, mis19 appropriating, or converting money or 

20 property; 

21 ‘‘(III) failure to comply with 

22 child support obligations; 

23 ‘‘(IV) failure to pay taxes; and 

24 ‘‘(V) domestic violence, child 

25 abuse, burglary of a dwelling, or a 


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1 criminal offense that has as an ele2 ment the use or attempted use of 

3 physical force, or threat of great bod4 ily harm, or the use, attempted use, 

5 or threatened use of a deadly weapon, 

6 against an individual, including com7 mitting or attempting to commit mur8 der, manslaughter, kidnapping, aggra9 vated assault, forcible sex offenses, 

10 robbery, arson, extortion, and extor11 tionate extension of credit. 

12 ‘‘(F) FORM OF REQUEST.—A request 

13 under subparagraph (C) shall include a copy of 

14 any necessary identification information re15 quired by the Attorney General concerning the 

16 person about whom the record is requested and 

17 a statement signed by the person acknowledging 

18 that the Association may request the search. 

19 ‘‘(G) LIMITATION ON PERMISSIBLE USES

20 OF INFORMATION.—Information obtained under 

21 this section may— 

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

23 enforcement purposes or for purposes of 

24 determining compliance with membership 

25 criteria established by the Association; 


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1 ‘‘(ii) be disclosed only to the Associa2 tion, State insurance regulators, or Federal 

3 or State law enforcement agencies; and 

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

5 agrees to— 

6 ‘‘(I) maintain the confidentiality 

7 of such information; and 

8 ‘‘(II) limit the use of such infor9 mation to the purposes described in 

10 clause (i). 

11 ‘‘(H) PENALTY FOR IMPROPER USE.— 

12 Whoever uses any information obtained under 

13 this section knowingly and willfully for an un14 authorized purpose shall be fined under title 18, 

15 United States Code, imprisoned for not more 

16 than 2 years, or both. 

17 ‘‘(I) RELIANCE ON INFORMATION.—Nei18 ther the Association nor any of its directors, of19 ficers, or employees who reasonably rely on in20 formation provided under this section shall be 

21 liable in any action for using information as 

22 permitted under this section in good faith. 

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

24 ‘‘(i) IN GENERAL.—With respect to 

25 any action brought under section 


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

2 Code, no person engaged in the business of 

3 conducting financial activities shall be sub4 ject to any penalty resulting from such sec5 tion if the individual whom the person per6 mitted to engage in the business of insur7 ance is a member of the Association or is 

8 licensed, or approved (as part of an appli9 cation or otherwise), by a State insurance 

10 regulator that performs criminal back11 ground checks under this section, unless 

12 such person knows that the individual is in 

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

14 title. 

15 ‘‘(ii) FINANCIAL ACTIVITIES DE16 FINED.—For purposes of this subpara17 graph, the term ‘financial activities’— 

18 ‘‘(I) means banking activities (in19 cluding the ownership of a bank), se20 curities activities, insurance activities, 

21 or commodities activities; and 

22 ‘‘(II) includes all activities that 

23 are financial in nature or are inci24 dental to a financial activity (as deVerDate Aug 31 2005 04:06 Mar 14, 2008 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5611.IH H5611

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1 fined under section 4(k) of the Bank 

2 Holding Company Act of 1956). 

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

4 charge a reasonable fee for the provision of in5 formation under this paragraph. 

6 ‘‘(L) RULE OF CONSTRUCTION.—No provi7 sion of this paragraph shall be construed as— 

8 ‘‘(i) requiring a State insurance regu9 lator to perform criminal background 

10 checks under this section; or 

11 ‘‘(ii) superseding or otherwise limiting 

12 any other authority that allows access to 

13 criminal background records. 

14 ‘‘(M) REGULATIONS.—The Attorney Gen15 eral may prescribe regulations to carry out this 

16 paragraph. 

17 ‘‘(N) INELIGIBILITY FOR MEMBERSHIP.— 

18 The Association may deny membership to any 

19 State-licensed insurance producer on the basis 

20 of criminal history information obtained pursu21 ant to subparagraph (D). 

22 ‘‘(b) AUTHORITY TO ESTABLISH MEMBERSHIP CRI23 TERIA.—The Association may establish membership cri24 teria that— 


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1 ‘‘(1) bear a reasonable relationship to the pur2 poses for which the Association was established; and 

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

4 agencies to the Association membership, including 

5 imposing discriminatory membership fees on smaller 

6 insurance producers. 

7 ‘‘(c) ESTABLISHMENT OF CLASSES AND CATEGORIES

8 OF MEMBERSHIP.— 

9 ‘‘(1) CLASSES OF MEMBERSHIP.—The Associa10 tion may establish separate classes of membership, 

11 with separate criteria, if the Association reasonably 

12 determines that performance of different duties re13 quires different levels of education, training, experi14 ence, or other qualifications. 

15 ‘‘(2) CATEGORIES.— 

16 ‘‘(A) SEPARATE CATEGORIES FOR INDIVID17 UALS PERMITTED.—The Association may estab18 lish separate categories of membership for indi19 viduals and for other persons within each class, 

20 based on the types of licensing categories that 

21 exist under State laws. 

22 ‘‘(B) SEPARATE TREATMENT FOR DEPOSI23 TORY INSTITUTIONS PROHIBITED.—No special 

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1 bers which are depository institutions or for 

2 employees, agents, or affiliates of depository in3 stitutions. 

4 ‘‘(d) MEMBERSHIP CRITERIA.— 

5 ‘‘(1) IN GENERAL.—The Association may estab6 lish criteria for membership which shall include 

7 standards for personal qualifications, education, 

8 training, and experience. 

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

10 under paragraph (1), the Association shall consider 

11 the highest levels of insurance producer qualifica12 tions established under the licensing laws of the 

13 States. 

14 ‘‘(3) ASSISTANCE FROM STATES.— 

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

16 request a State to provide assistance in inves17 tigating and evaluating a prospective member’s 

18 eligibility for membership in the Association. 

19 ‘‘(B) RULE OF CONSTRUCTION.—Subpara20 graph (A) shall not be construed as requiring or 

21 authorizing any State to adopt new or addi22 tional requirements concerning the licensing or 

23 evaluation of insurance producers. 

24 ‘‘(e) EFFECT OF MEMBERSHIP.— 


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

2 Membership in the Association shall authorize an in3 surance producer to sell, solicit, negotiate, effect, 

4 procure, deliver, renew, continue, or bind insurance 

5 in any State for any line or lines of insurance speci6 fied in such producer’s home State license, and exer7 cise all such incidental powers, as shall be necessary 

8 to carry out such activities, including claims adjust9 ments and settlement, risk management, employee 

10 benefits advice, retirement planning, and any other 

11 insurance-related consulting activities. 

12 ‘‘(2) ACTIVITIES OF MEMBERS OF THE ASSO13 CIATION.—No State, other than a member’s home 

14 State, may, by statute, regulation, order, interpreta15 tion, or otherwise, deny a license to a member of the 

16 Association which has paid the requisite licensing fee 

17 for such State to engage in any activity within the 

18 scope of authority granted under paragraph (1). 

19 ‘‘(3) DUPLICATIVE LICENSES.—Neither the As20 sociation nor any State, other than the member’s 

21 home State, may require an individual member to 

22 obtain a business entity license or membership in 

23 order to engage in any activity within the scope of 

24 authority granted in paragraph (1) or in order for 

25 the member or any employer, employee, or affiliate 


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1 of the member to receive compensation for the mem2 ber’s performance of any such activity. 

3 ‘‘(4) AGENT FOR REMITTING FEES.—The Asso4 ciation shall act as any member’s agent for purposes 

5 of remitting licensing fees to any State pursuant to 

6 subparagraph (2). 

7 ‘‘(5) PRESERVATION OF STATE CONSUMER PRO8 TECTION AND MARKET CONDUCT REGULATION.—No 

9 provision of this section shall be construed as alter10 ing or affecting the continuing effectiveness of any 

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

12 State which purports to regulate market conduct or 

13 unfair trade practices or establish consumer protec14 tions to the extent that such law, regulation, provi15 sion, or other action is not inconsistent with the pro16 visions of this subtitle. 

17 ‘‘(f) BIENNIAL RENEWAL.—Membership in the Asso18 ciation shall be renewed on a biennial basis. 

19 ‘‘(g) CONTINUING EDUCATION.— 

20 ‘‘(1) IN GENERAL.—The Association shall es21 tablish, as a condition of membership, continuing 

22 education requirements which shall be comparable to 

23 the continuing education requirements under the li24 censing laws of a majority of the States. 


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1 ‘‘(2) STATE CONTINUING EDUCATION REQUIRE2 MENTS.—A member may not be required to satisfy 

3 continuing education requirements imposed under 

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

5 State other than such member’s home State. 

6 ‘‘(3) RECIPROCITY.— 

7 ‘‘(A) LIMITATION ON HOME STATE.—No 

8 home State of a member of the Association 

9 shall require such member to satisfy any con10 tinuing education requirements that are equiva11 lent to any continuing education requirements 

12 of the Association that have been satisfied by 

13 the member during the applicable licensing pe14 riod. 

15 ‘‘(B) LIMITATION ON ASSOCIATION.—The 

16 Association shall not require a member to sat17 isfy continuing education requirements that are 

18 equivalent to any continuing education require19 ments of the member’s home State that have 

20 been satisfied by the member during the appli21 cable licensing period. 

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


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

2 The Association may place an insurance producer that is 

3 a member of the Association on probation or suspend or 

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

5 the Association determines to be appropriate, if— 

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

7 membership criteria of the Association; or 

8 ‘‘(2) the producer has been subject to discipli9 nary action pursuant to a final adjudicatory pro10 ceeding under the jurisdiction of a State insurance 

11 regulator. 

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

13 ‘‘(1) IN GENERAL.—The Association shall es14 tablish an office of consumer complaints that shall— 

15 ‘‘(A) receive and, when appropriate, inves16 tigate complaints from both consumers and 

17 State insurance regulators related to members 

18 of the Association; 

19 ‘‘(B) maintain records of all complaints re20 ceived in accordance with subparagraph (A) and 

21 make such records available to the National As22 sociation of Insurance Commissioners (herein23 after in this subtitle referred to as the ‘NAIC’) 

24 and to each State insurance regulator for the 


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1 State of residence of the consumer who filed the 

2 complaint; and 

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

4 complaint to any appropriate State insurance 

5 regulator. 

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

7 office of consumer complaints shall maintain a toll8 free telephone number for the purpose of this sub9 section and, as practicable, other alternative means 

10 of communication with consumers, such as an Inter11 net web page. 

12 ‘‘SEC. 324. BOARD OF DIRECTORS. 

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

14 board of directors of the Association (hereafter in this sub15 title referred to as the ‘Board’) for the purpose of gov16 erning and supervising the activities of the Association 

17 and the members of the Association. 

18 ‘‘(b) POWERS.—The Board shall have such powers 

19 and authority as may be specified in the bylaws of the 

20 Association. 

21 ‘‘(c) COMPOSITION.— 

22 ‘‘(1) IN GENERAL.—The Board shall be com23 posed of 9 members, of whom— 


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1 ‘‘(A) 4 shall be State insurance commis2 sioners appointed in the manner provided in 

3 paragraph (2), and 

4 ‘‘(B) 5 shall be insurance industry rep5 resentatives appointed in the manner provided 

6 in paragraph (3). 

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

8 ‘‘(A) IN GENERAL.—The NAIC shall ap9 point 1 member of the Board from among State 

10 insurance commissioners in each of the fol11 lowing 3 categories of States: 

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

13 total direct written premiums from all in14 surance policies written in such States. 

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

16 total direct written premiums from all in17 surance policies written in such States. 

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

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

20 ‘‘(B) AT-LARGE MEMBER.—The Board 

21 members appointed pursuant to paragraph (A) 

22 shall, by majority vote, elect a 4th State insur23 ance commissioner to serve as an at-large mem24 ber of the Board. 


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1 ‘‘(3) MEMBERS APPOINTED BY INSURANCE

2 TRADE ASSOCIATIONS.— 

3 ‘‘(A) INSURANCE PRODUCER REPRESENTA4 TIVES.—3 of the 5 members who are insurance 

5 industry representatives shall be appointed as 

6 follows by the following trade associations or 

7 their successor organizations: 

8 ‘‘(i) 1 member appointed by the Coun9 cil of Insurance Agents and Brokers from 

10 among representatives of such association. 

11 ‘‘(ii) 1 member appointed by the Inde12 pendent Insurance Agents and Brokers of 

13 America from among representatives of 

14 such association. 

15 ‘‘(iii) 1 member appointed by the Na16 tional Association of Insurance and Finan17 cial Advisors from among representatives 

18 of such association. 

19 ‘‘(B) PROPERTY AND CASUALTY INSURER

20 REPRESENTATIVE.—1 of the 5 members who 

21 are insurance industry representatives shall be 

22 appointed by the American Insurance Associa23 tion, the National Association of Mutual Insur24 ance Companies, and the Property and Cas25 ualty Insurers Association of America from 


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1 among representatives of each such association, 

2 on a rotating basis. 

3 ‘‘(C) LIFE AND HEALTH INSURER REP4 RESENTATIVE.—1 of the 5 members who are 

5 insurance industry representatives shall be ap6 pointed by the American Council of Life Insur7 ers and the Association of Health Insurance 

8 Plans from among representatives of each such 

9 association, on a rotating basis. 

10 ‘‘(4) ALTERNATE APPOINTMENT.— 

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

12 nominating group of insurance trade associa13 tions fails to make appointments to the Board 

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

15 President shall appoint such members of the 

16 Association’s Board from lists of candidates 

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

18 described in paragraph (2) or the nominating 

19 group of insurance trade associations pursuant 

20 to the relevant subparagraph of paragraph (3), 

21 in the case of a member described in any such 

22 subparagraph. 

23 ‘‘(B) PROCEDURES FOR OBTAINING NAIC

24 APPOINTMENT RECOMMENDATIONS.— 


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1 ‘‘(i) PRESIDENTIAL APPOINTMENT

2 FROM LIST.—If the NAIC fails to appoint 

3 members of the Board as provided under 

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

5 within 60 days after the date of the enact6 ment of the National Association of Reg7 istered Agents and Brokers Reform Act of 

8 2008, the President shall, with the advice 

9 and consent of the Senate, appoint 4 mem10 bers to the Board who are current State 

11 insurance commissioners in accordance 

12 with the requirements of subparagraphs 

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

14 of candidates recommended to the Presi15 dent by the NAIC. 

16 ‘‘(ii) PRESIDENTIAL APPOINTMENT

17 WITHOUT A LIST.—If the NAIC fails to 

18 provide a list within 90 days after the date 

19 of the enactment of the National Associa20 tion of Registered Agents and Brokers Re21 form Act of 2008, or if any list that is pro22 vided does not include at least 8 rec23 ommended candidates or comply with the 

24 requirements of paragraph (2), the Presi25 dent shall, with the advice and consent of 


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1 the Senate, appoint 4 members to the 

2 Board without considering the views of the 

3 NAIC, 3 of whom shall meet the selection 

4 requirements of paragraph (2)(A) and 1 of 

5 whom shall meet the selection require6 ments of paragraph (3)(B). 

7 ‘‘(C) PROCEDURES FOR OBTAINING INSUR8 ANCE TRADE ASSOCIATION GROUP APPOINT9 MENT RECOMMENDATIONS.— 

10 ‘‘(i) PRESIDENTIAL APPOINTMENT

11 FROM LIST.—If any group of nominating 

12 insurance trade associations identified 

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

14 paragraph (3) fails to appoint members of 

15 the Board as provided under such subpara16 graph within 60 days after the date of the 

17 enactment of the National Association of 

18 Registered Agents and Brokers Reform 

19 Act of 2008, the President shall, with the 

20 advice and consent of the Senate, make the 

21 requisite appointments pursuant to each 

22 such subparagraph from a list of can23 didates recommended to the President by 

24 such group. 


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1 ‘‘(ii) PRESIDENTIAL APPOINTMENT

2 WITHOUT A LIST.—If the nominating 

3 group of insurance trade associations iden4 tified under subparagraph (A), (B), or (C) 

5 of paragraph (3) fails to provide a list 

6 within 90 days after date of the enactment 

7 of the National Association of Registered 

8 Agents and Brokers Reform Act of 2008, 

9 or if any list that is provided does not com10 ply with the requirements of the subpara11 graph, the President shall, with the advice 

12 and consent of the Senate, make the req13 uisite appointments without considering 

14 the views of such group. 

15 ‘‘(iii) LIST OF RECOMMENDATIONS.— 

16 Any list of recommended candidates pro17 vided to the President by a nominating 

18 group of insurance trade associations iden19 tified under subparagraph (A), (B), or (C) 

20 of paragraph (3) shall include— 

21 ‘‘(I) at least 2 recommended can22 didates from each association identi23 fied under paragraph (3)(A); 

24 ‘‘(II) at least 2 recommended 

25 candidates, in the case of associations 


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1 identified under paragraph (3)(B); 

2 and 

3 ‘‘(III) at least 2 recommended 

4 candidates, in the case of associations 

5 identified under paragraph (3)(C). 

6 ‘‘(D) ALTERNATE APPOINTMENT OF STATE

7 INSURANCE COMMISSIONERS.—If fewer than 4 

8 State insurance commissioners accept appoint9 ment to the Board pursuant to subparagraph 

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

11 of the Senate, may appoint the remaining State 

12 insurance commissioner members of the Board 

13 from among individuals who are current or 

14 former State insurance commissioners, to the 

15 extent that— 

16 ‘‘(i) any former insurance commis17 sioner appointed by the President shall not 

18 be employed by or have a present direct or 

19 indirect financial interest in any insurer or 

20 other entity in the insurance industry 

21 other than direct or indirect ownership of, 

22 or beneficial interest in, any insurance pol23 icy or annuity contract written or sold by 

24 an insurer; and 


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1 ‘‘(ii) not more than 2 members ap2 pointed to membership on the Board under 

3 this subparagraph belong to the same po4 litical party as the President. 

5 ‘‘(5) STATE INSURANCE COMMISSIONER DE6 FINED.—For purposes of this subsection, the term 

7 ‘State insurance commissioner’ means a person who 

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

9 board, commission, or other body that is the prin10 cipal insurance regulatory authority for the State. 

11 ‘‘(d) TERMS.— 

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

13 member shall, after the initial appointment of the 

members of the Board, be for 2 years, with 1 14 ⁄2 of the 

15 members to be appointed each year and divided as 

16 evenly as possible between members appointed under 

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

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

19 Only directors appointed under subsection (c)(3)(A) 

20 from among representatives of insurance producers 

21 may be re-appointed for an additional term. 

22 ‘‘(e) BOARD VACANCIES.— 

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

24 of directors shall be filled as provided under sub25 paragraph (A) or (B) of paragraph (2), and any 


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1 member appointed to fill a vacancy occurring before 

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

3 predecessor was appointed shall be appointed only 

4 for the remainder of that term. 

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

6 or a nominating group of trade associations fails to 

7 appoint a member to the Board to fill a vacancy 

8 within 60 days from the date that such vacancy oc9 curs, the President shall, with the advice and con10 sent of the Senate, make the requisite appointment 

11 pursuant to the procedures established under the ap12 plicable subparagraph of subsection (c)(4). 

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

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

15 of the Association. 

16 ‘‘SEC. 325. OFFICERS. 

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

18 shall consist of a chairperson and a vice chairperson of 

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

20 of the Association, and such other officers and assistant 

21 officers as may be deemed necessary. 

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

23 Board and the Association shall be elected or appointed 

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

25 be prescribed in the bylaws of the Association. 


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

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

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

4 board of directors of the Association shall submit to 

5 the President and the Congress any proposed bylaw 

6 or rules of the Association or any proposed amend7 ment to the bylaws or rules, accompanied by a con8 cise general statement of the basis and purpose of 

9 such proposal. 

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

11 or rule or proposed amendment to the bylaws or 

12 rules shall take effect, after notice published in an 

13 insurance trade journal and opportunity for com14 ment, upon such date as the Association may des15 ignate. 

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

17 ‘‘(1) SPECIFICATION OF CHARGES.—In any pro18 ceeding to determine whether membership shall be 

19 denied, suspended, revoked, or not renewed (here20 after in this section referred to as a ‘disciplinary ac21 tion’) or to determine whether a member of the As22 sociation should be placed on probation, the Associa23 tion shall bring specific charges, notify such member 

24 of such charges, give the member an opportunity to 

25 defend against the charges, and keep a record. 


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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 such 

5 member 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 such sanction. 

12 ‘‘SEC. 327. POWERS. 

13 ‘‘In addition to all the powers conferred upon a non14 profit corporation by the District of Columbia Nonprofit 

15 Corporation Act, the Association shall have the following 

16 powers: 

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

18 fees as the Association finds necessary to impose to 

19 cover the costs of its operations. 

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

21 rules governing the conduct of Association business 

22 and performance of its duties. 

23 ‘‘(3) To establish procedures for providing no24 tice and opportunity for comment pursuant to sec25 tion 326(a). 


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1 ‘‘(4) To enter into and perform such agree2 ments as necessary to carry out its duties. 

3 ‘‘(5) To hire employees, professionals or special4 ists, and elect or appoint officers, and to fix their 

5 compensation, define their duties and give them ap6 propriate authority to carry out the purposes of this 

7 subtitle, and determine their qualification; and to es8 tablish the Association’s personnel policies and pro9 grams relating to, among other things, conflicts of 

10 interest, rates of compensation. and qualifications of 

11 personnel. 

12 ‘‘(6) To borrow money. 

13 ‘‘(7) To assess board member organizations and 

14 associations fees for such amounts that the Associa15 tion determines to be necessary and appropriate to 

16 organize and begin operations of the Association, 

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

18 Association with interest at market rate. 

19 ‘‘SEC. 328. REPORT BY ASSOCIATION. 

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

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

22 the President and to the Congress a written report regard23 ing the conduct of its business, and the exercise of the 

24 other rights and powers granted by this subtitle, during 

25 such fiscal year. 


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1 ‘‘(b) FINANCIAL STATEMENTS.—Each report sub2 mitted under subsection (a) with respect to any fiscal year 

3 shall include financial statements setting forth the finan4 cial position of the Association at the end of such fiscal 

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

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

7 ‘‘SEC. 329. LIABILITY OF THE ASSOCIATION AND THE DI8 RECTORS, OFFICERS, AND EMPLOYEES OF 

9 THE ASSOCIATION. 

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

11 deemed to be an insurer or insurance producer within the 

12 meaning of any State law, rule, regulation, or order regu13 lating or taxing insurers, insurance producers, or other en14 tities engaged in the business of insurance, including pro15 visions imposing premium taxes, regulating insurer sol16 vency or financial condition, establishing guaranty funds 

17 and levying assessments, or requiring claims settlement 

18 practices. 

19 ‘‘(b) LIABILITY OF THE ASSOCIATION, ITS DIREC20 TORS, OFFICERS, AND EMPLOYEES.—Neither the Associa21 tion nor any of its directors, officers, or employees shall 

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

23 omitted in good faith under or in connection with any mat24 ter subject to this subtitle. 


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1 ‘‘SEC. 330. PRESIDENTIAL REVIEW. 

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

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

4 Leader, the Senate Majority Leader and the Senate Mi5 nority Leader that the Association is acting in a manner 

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

7 perform its duties under this subtitle, the President may 

8 remove the entire existing Board for the remainder of the 

9 term to which the members of the Board were appointed 

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

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

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

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

14 President, or a person designated by the President for 

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

16 or prohibit any action, of the Association which the Presi17 dent or the designee determines and certifies to the Speak18 er of the House, the House minority leader, the Senate 

19 majority leader, and the Senate minority leader is contrary 

20 to the purposes of this subtitle. 

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

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

23 regulations, provisions, or other actions purporting to reg24 ulate insurance producers shall be preempted to the extent 

25 provided in subsection (b). 

26 ‘‘(b) PROHIBITED ACTIONS.— 


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1 ‘‘(1) IN GENERAL.—No State shall— 

2 ‘‘(A) impede the activities of, take any ac3 tion against, or apply any provision of law or 

4 regulation to, any insurance producer because 

5 that insurance producer or any affiliate plans to 

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

7 of the Association; 

8 ‘‘(B) impose any requirement upon a mem9 ber of the Association that it pay different fees 

10 to be licensed or otherwise qualified to do busi11 ness in that State based on its residency; 

12 ‘‘(C) impose any continuing education re13 quirements on non-resident insurance pro14 ducers; or 

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

16 appointment requirements upon or impede the 

17 activities of any non-resident insurance pro18 ducer that sells, solicits, negotiates, effects, pro19 cures, delivers, renews, continues, or binds in20 surance for commercial property and casualty 

21 risks to an insured with risks located in more 

22 than one State, provided that such non-resident 

23 insurance producer is otherwise licensed as an 

24 insurance producer in the State where the in25 sured maintains its principal place of business 


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1 and the contract of insurance insures risks lo2 cated in that State. 

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

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

5 shall— 

6 ‘‘(A) impose any licensing, appointment, 

7 integrity, personal or corporate qualifications, 

8 education, training, experience, residency, con9 tinuing education or bonding requirement upon 

10 a member of the Association that is different 

11 from the criteria for membership in the Asso12 ciation or renewal of such membership; 

13 ‘‘(B) implement the procedures of such 

14 State’s system of licensing or renewing the li15 censes of insurance producers in a manner dif16 ferent from the authority of the Association 

17 under section 323; 

18 ‘‘(C) impose any requirement upon a mem19 ber of the Association that it be licensed, reg20 istered or otherwise qualified to do business or 

21 remain in good standing in such State, includ22 ing any requirement that such insurance pro23 ducer register as a foreign company with the 

24 secretary of state or equivalent State official; or 


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1 ‘‘(D) require that a member of the Asso2 ciation submit to a criminal history record 

3 check as a condition of doing business in such 

4 State. 

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

6 ‘‘(a) COORDINATION WITH STATE INSURANCE REGU7 LATORS.—The Association may— 

8 ‘‘(1) issue uniform insurance producer applica9 tions and renewal applications that may be used to 

10 apply for the issuance or removal of State licenses; 

11 ‘‘(2) establish or utilize a central clearinghouse 

12 through which members of the Association may 

13 apply for the issuance or renewal of licenses in mul14 tiple States; and 

15 ‘‘(3) establish or utilize a national database for 

16 the collection of regulatory information concerning 

17 the activities of insurance producers. 

18 ‘‘(b) COORDINATION WITH THE FINANCIAL INDUS19 TRY REGULATORY AUTHORITY.—The Association shall 

20 coordinate with the Financial Industry Regulatory Au21 thority in order to ease any administrative burdens that 

22 fall on persons that are members of both associations, con23 sistent with the purposes of this subtitle and the Federal 

24 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 involving the Association, including disputes between 

5 the Association and its members that arise under this sub6 title. Suits brought in State court involving the Associa7 tion shall be deemed to have arisen under Federal law and 

8 therefore be subject to jurisdiction in the appropriate 

9 United States district court. 

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

11 person shall be required to exhaust all available adminis12 trative remedies before the Association before it may seek 

13 judicial review of an Association decision. 

14 ‘‘(c) ENFORCEMENT.—In the case of any violation of 

15 section 323(e) or 331(b), the Association may seek injunc16 tive relief in the United States District Court for the Dis17 trict of Columbia. 

18 ‘‘(d) STANDARDS OF REVIEW.— 

19 ‘‘(1) JUDICIAL REVIEW OF RULES AND BY20 LAWS.—The standards set forth in section 553 of 

21 title 5, United States Code, shall be applied when22 ever a regulation or bylaw of the Association is 

23 under judicial review. 

24 ‘‘(2) JUDICIAL REVIEW OF DISCIPLINARY AC25 TIONS.—The standards set forth in section 554 of 

26 title 5, United States Code, shall be applied whenVerDate Aug 31 2005 04:06 Mar 14, 2008 Jkt 069200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\H5611.IH H5611

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1 ever a disciplinary action of the Association is judi2 cially reviewed. 

3 ‘‘(3) EQUAL WEIGHT AND DEFERENCE.—In any 

4 other proceeding involving this subtitle, the court 

5 shall give at least equal weight and deference to the 

6 interpretations of the Association as would be given 

7 to any State or Federal agency with respect to any 

8 law, regulation, interpretation, or order addressing 

9 the same issues. 

10 ‘‘SEC. 334. DEFINITIONS. 

11 ‘‘For purposes of this subtitle, the following defini12 tions shall apply: 

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

14 means the State in which the insurance producer 

15 maintains its principal place of residence or business 

16 and is licensed to act as an insurance producer. 

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

18 any product, other than title insurance, defined or 

19 regulated as insurance by the appropriate State in20 surance regulatory authority. 

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

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

25 and any other individual or entity that solicits, negoVerDate Aug 31 2005 04:06 Mar 14, 2008 Jkt 069200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\H5611.IH H5611

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1 tiates, effects, procures, delivers, renews, continues 

2 or binds policies of insurance or offers advice, coun3 sel, opinions or services related to insurance. 

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

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

6 United States, and Puerto Rico, Guam, American 

7 Samoa, the Trust Territory of the Pacific Islands, 

8 the Virgin Islands, and the Northern Mariana Is9 lands. 

10 ‘‘(5) STATE LAW.— 

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

12 includes all laws, decisions, rules, regulations, 

13 or other State action having the effect of law, 

14 of any State. 

15 ‘‘(B) LAWS APPLICABLE IN THE DISTRICT

16 OF COLUMBIA.—A law of the United States ap17 plicable only to or within the District of Colum18 bia shall be treated as a State law rather than 

19 a law of the United States.’’. 

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

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

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

23 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. 


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‘‘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.’’. 

Æ 


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