273
procedures set forth in subsection (b) be fol-
lowed with respect to such proposal, in the
same manner as if such proposed bylaw change
were a proposed rule change within the mean-
ing of such paragraph.
(b) ADOPTION AND AMENDMENT OF RULES.—
(1) FILING PROPOSED REGULATIONS WITH THE
NAIC.—
(A) IN GENERAL.—The board of directors
of the Association shall file with the NAIC a
copy of any proposed rule or any proposed
amendment to a rule of the Association which
shall be accompanied by a concise general state-
ment of the basis and purpose of such proposal.
(B) OTHER RULES AND AMENDMENTS IN-
EFFECTIVE.—No proposed rule or amendment
shall take effect unless approved by the NAIC
or otherwise permitted in accordance with this
paragraph.
(2) INITIAL CONSIDERATION BY THE NAIC.—
Within 35 days after the date of publication of no-
tice of filing of a proposal, or before the end of such
longer period not to exceed 90 days as the NAIC
may designate after such date if the NAIC finds
such longer period to be appropriate and sets forth
274
its reasons for so finding, or as to which the Asso-
ciation consents, the NAIC shall—
(A) by order approve such proposed rule or
amendment; or
(B)
institute
proceedings
to
determine
whether
such
proposed
rule
or
amendment
should be modified or disapproved.
(3) NAIC PROCEEDINGS.—
(A) IN GENERAL.—Proceedings instituted
by the NAIC with respect to a proposed rule or
amendment pursuant to paragraph (2) shall—
(i) include notice of the grounds for
disapproval under consideration;
(ii) provide opportunity for hearing;
and
(iii) be concluded within 180 days
after the date of the Association’s filing of
such proposed rule or amendment.
(B) DISPOSITION OF PROPOSAL.—At the
conclusion of any proceeding under subpara-
graph (A), the NAIC shall, by order, approve or
disapprove the proposed rule or amendment.
(C) EXTENSION OF TIME FOR CONSIDER-
ATION.—The NAIC may extend the time for
275
concluding any proceeding under subparagraph
(A) for—
(i) not more than 60 days if the
NAIC finds good cause for such extension
and sets forth its reasons for so finding; or
(ii) for such longer period as to which
the Association consents.
(4) STANDARDS FOR REVIEW.—
(A) GROUNDS FOR APPROVAL.—The NAIC
shall approve a proposed rule or amendment if
the NAIC finds that the rule or amendment is
in the public interest and is consistent with the
purposes of this Act.
(B) APPROVAL BEFORE END OF NOTICE
PERIOD.—The NAIC shall not approve any pro-
posed rule before the end of the 30-day period
beginning on the date the Association files pro-
posed rules or amendments in accordance with
paragraph (1) unless the NAIC finds good
cause for so doing and sets forth the reasons
for so finding.
(5) ALTERNATE PROCEDURE.—
(A) IN
GENERAL.—Notwithstanding any
provision of this subsection other than subpara-
graph (B), a proposed rule or amendment relat-
276
ing to the administration or organization of the
Association may take effect—
(i) upon the date of filing with the
NAIC, if such proposed rule or amendment
is designated by the Association as relating
solely to matters which the NAIC, consist-
ent with the public interest and the pur-
poses of this subsection, determines by rule
do not require the procedures set forth in
this paragraph; or
(ii) upon such date as the NAIC shall
for good cause determine.
(B) ABROGATION BY THE NAIC.—
(i) IN GENERAL.—At any time within
60 days after the date of filing of any pro-
posed rule or amendment under subpara-
graph (A)(i) or (B)(ii), the NAIC may re-
peal such rule or amendment and require
that the rule or amendment be refiled and
reviewed in accordance with this para-
graph, if the NAIC finds that such action
is necessary or appropriate in the public
interest, for the protection of insurance
producers or policyholders, or otherwise in
furtherance of the purposes of this subtitle.
277
(ii) EFFECT OF RECONSIDERATION BY
THE NAIC.—Any action of the NAIC pur-
suant to clause (i) shall—
(I) not affect the validity or force
of a rule change during the period
such rule or amendment was in effect;
and
(II) not be considered to be final
action.
(c) ACTION REQUIRED BY THE NAIC.—The NAIC
may, in accordance with such rules as the NAIC deter-
mines to be necessary or appropriate to the public interest
or to carry out the purposes of this subtitle, require the
Association to adopt, amend, or repeal any bylaw, rule or
amendment of the Association, whenever adopted.
(d) DISCIPLINARY ACTION BY THE ASSOCIATION.—
(1) SPECIFICATION OF CHARGES.—In any pro-
ceeding to determine whether membership shall be
denied, suspended, revoked, and not renewed (here-
after in this section referred to as a ‘‘disciplinary ac-
tion’’), the Association shall bring specific charges,
notify such member of such charges and give the
member
an
opportunity
to
defend
against
the
charges, and keep a record.
278
(2) SUPPORTING
STATEMENT.—A determina-
tion to take disciplinary action shall be supported by
a statement setting forth—
(A) any act or practice in which such
member has been found to have been engaged;
(B) the specific provision of this subtitle,
the rules or regulations under this subtitle, or
the rules of the Association which any such act
or practice is deemed to violate; and
(C) the sanction imposed and the reason
for such sanction.
(e) NAIC REVIEW OF DISCIPLINARY ACTION.—
(1) NOTICE TO THE NAIC.—If the Association
orders any disciplinary action, the Association shall
promptly notify the NAIC of such action.
(2) REVIEW BY THE NAIC.—Any disciplinary
action taken by the Association shall be subject to
review by the NAIC—
(A) on the NAIC’s own motion; or
(B) upon application by any person ag-
grieved by such action if such application is
filed with the NAIC not more than 30 days
after the later of—
(i) the date the notice was filed with
the NAIC pursuant to paragraph (1); or
279
(ii) the date the notice of the discipli-
nary action was received by such aggrieved
person.
(f) EFFECT OF REVIEW.—The filing of an applica-
tion to the NAIC for review of a disciplinary action, or
the institution of review by the NAIC on the NAIC’s own
motion, shall not operate as a stay of disciplinary action
unless the NAIC otherwise orders.
(g) SCOPE OF REVIEW.—
(A) IN GENERAL.—In any proceeding to
review such action, after notice and the oppor-
tunity for hearing, the NAIC shall—
(i)
determine
whether
the
action
should be taken;
(ii) affirm, modify, or rescind the dis-
ciplinary sanction; or
(iii) remand to the Association for
further proceedings.
(B) DISMISSAL
OF
REVIEW.—The NAIC
may dismiss a proceeding to review disciplinary
action if the NAIC finds that—
(i) the specific grounds on which the
action is based exist in fact;
(ii) the action is in accordance with
applicable rules and regulations; and