661
•HR 10 RH2
(B) DISPOSITION OF PROPOSAL.—At
the conclusion of any proceeding
under subparagraph (A), the NAIC
shall, 
by 
order, 
approve 
or 
dis-
approve the proposed rule or amend-
ment.
(C) EXTENSION OF TIME FOR CONSID-
ERATION.—The NAIC may extend the
time for 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 con-
sents.
(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 pub-
lic interest and is consistent with the
purposes of this Act.
662
•HR 10 RH2
(B) APPROVAL BEFORE END OF NO-
TICE PERIOD.—The NAIC shall not ap-
prove any proposed rule before the
end of the 30-day period beginning on
the date the Association files pro-
posed rules or amendments in accord-
ance with paragraph (1) unless the
NAIC finds good cause for so doing
and sets forth the reasons for so find-
ing.
(5) ALTERNATE PROCEDURE.—
(A) IN GENERAL.—Notwithstanding
any provision of this subsection other
than subparagraph (B), a proposed
rule or amendment relating to the ad-
ministration 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, con-
sistent with the public interest
and the purposes of this sub-
section, determines by rule do not
663
•HR 10 RH2
require the procedures set forth
in this paragraph; or
(ii) upon such date as the
NAIC shall for good cause deter-
mine.
(B) ABROGATION BY THE NAIC.—
(i) IN
GENERAL.—At any time
within 60 days after the date of
filing of any proposed rule or
amendment under subparagraph
(A)(i) or (B)(ii), the NAIC may re-
peal such rule or amendment and
require that the rule or amend-
ment be refiled and reviewed in
accordance with this paragraph,
if the NAIC finds that such action
is necessary or appropriate in the
public interest, for the protection
of insurance producers or policy-
holders, or otherwise in further-
ance of the purposes of this sub-
title.
(ii) EFFECT
OF
RECONSIDER-
ATION BY THE NAIC.—Any action of
664
•HR 10 RH2
the NAIC pursuant to clause (i)
shall—
(I) not affect the validity
or force of a rule change dur-
ing 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 determines to be necessary or ap-
propriate to the public interest or to carry out
the purposes of this subtitle, require the Asso-
ciation to adopt, amend, or repeal any bylaw,
rule or amendment of the Association, when-
ever adopted.
(d) DISCIPLINARY ACTION BY THE ASSOCIA-
TION.—
(1) SPECIFICATION OF CHARGES.—In any
proceeding to determine whether mem-
bership shall be denied, suspended, re-
voked, and not renewed (hereafter in this
section referred to as a ‘‘disciplinary ac-
tion’’), the Association shall bring specific
charges, notify such member of such
665
•HR 10 RH2
charges and give the member an oppor-
tunity to defend against the charges, and
keep a record.
(2) SUPPORTING STATEMENT.—A deter-
mination 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
AC-
TION.—
(1) NOTICE TO THE NAIC.—If the Asso-
ciation orders any disciplinary action,
the Association shall promptly notify the
NAIC of such action.
666
•HR 10 RH2
(2) REVIEW BY THE NAIC.—Any discipli-
nary 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 per-
son aggrieved 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
(ii) the date the notice of the
disciplinary action was received
by such aggrieved person.
(f) EFFECT OF REVIEW.—The filing of an ap-
plication to the NAIC for review of a discipli-
nary 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 proceed-
ing to review such action, after notice
and the opportunity for hearing, the
NAIC shall—
667
•HR 10 RH2
(i) determine whether the ac-
tion should be taken;
(ii) affirm, modify, or rescind
the disciplinary sanction; or
(iii) remand to the Association
for further proceedings.
(B) DISMISSAL
OF
REVIEW.—The
NAIC may dismiss a proceeding to re-
view 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 regula-
tions; and
(iii) such rules and regula-
tions are, and were, applied in a
manner consistent with the pur-
poses of this Act.
SEC. 329. ASSESSMENTS.
(a) INSURANCE PRODUCERS SUBJECT TO AS-
SESSMENT.—The Association may establish
such application and membership fees as the
Association finds necessary to cover the costs
668
•HR 10 RH2
of its operations, including fees made reim-
bursable to the NAIC under subsection (b), ex-
cept that, in setting such fees, the Association
may not discriminate against smaller insur-
ance producers.
(b) NAIC ASSESSMENTS.—The NAIC may as-
sess the Association for any costs it incurs
under this subtitle.
SEC. 330. FUNCTIONS OF THE NAIC.
(a) ADMINISTRATIVE
PROCEDURE.—Deter-
minations of the NAIC, for purposes of mak-
ing rules pursuant to section 328, shall be
made after appropriate notice and oppor-
tunity for a hearing and for submission of
views of interested persons.
(b) EXAMINATIONS AND REPORTS.—
(1) The NAIC may make such exami-
nations and inspections of the Associa-
tion and require the Association to fur-
nish it with such reports and records or
copies thereof as the NAIC may consider
necessary or appropriate in the public in-
terest or to effectuate the purposes of
this subtitle.
669
•HR 10 RH2
(2) As soon as practicable after the
close of each fiscal year, the Association
shall submit to the NAIC a written report
regarding the conduct of its business,
and the exercise of the other rights and
powers granted by this subtitle, during
such fiscal year. Such report shall in-
clude financial statements setting forth
the financial position of the Association
at the end of such fiscal year and the re-
sults of its operations (including the
source and application of its funds) for
such fiscal year. The NAIC shall transmit
such report to the President and the Con-
gress with such comment thereon as the
NAIC determines to be appropriate.
SEC. 331. LIABILITY OF THE ASSOCIATION AND THE DIREC-
TORS, OFFICERS, AND EMPLOYEES OF THE
ASSOCIATION.
(a) IN GENERAL.—The Association shall not
be deemed to be an insurer or insurance pro-
ducer within the meaning of any State law,
rule, regulation, or order regulating or taxing
insurers, insurance producers, or other enti-
ties engaged in the business of insurance, in-
670
•HR 10 RH2
cluding provisions imposing premium taxes,
regulating insurer solvency or financial con-
dition, establishing guaranty funds and levy-
ing assessments, or requiring claims settle-
ment practices.
(b) LIABILITY OF THE ASSOCIATION, ITS DI-
RECTORS, OFFICERS, AND EMPLOYEES.—Neither
the Association nor any of its directors, offi-
cers, or employees shall have any liability to
any person for any action taken or omitted in
good faith under or in connection with any
matter subject to this subtitle.
SEC. 332. ELIMINATION OF NAIC OVERSIGHT.
(a) IN GENERAL.—The Association shall be
established without NAIC oversight and the
provisions set forth in section 324, sub-
sections (a), (b), (c), and (e) of section 328, and
sections 329(b) and 330 of this subtitle shall
cease to be effective if, at the end of the 2-year
period after the date on which the provisions
of this subtitle take effect pursuant to section
321—
(1) at least a majority of the States
representing at least 50 percent of the
total United States commercial-lines in-