HR 26 RDS
business in performance of services for the Associa-
tion. 
‘‘SEC. 325. BYLAWS, STANDARDS, AND DISCIPLINARY AC-
TIONS. 
‘‘(a) ADOPTION AND AMENDMENT OF BYLAWS AND 
STANDARDS.— 
‘‘(1) 
PROCEDURES.—The 
Association 
shall 
adopt procedures for the adoption of bylaws and 
standards that are similar to procedures under sub-
chapter II of chapter 5 of title 5, United States 
Code (commonly known as the ‘Administrative Pro-
cedure Act’). 
‘‘(2) COPY
REQUIRED
TO
BE
FILED.—The 
Board shall submit to the President, through the 
Department of the Treasury, and the States (includ-
ing State insurance regulators), and shall publish on 
the website of the Association, all proposed bylaws 
and standards of the Association, or any proposed 
amendment to the bylaws or standards of the Asso-
ciation, accompanied by a concise general statement 
of the basis and purpose of such proposal. 
‘‘(3) EFFECTIVE DATE.—Any proposed bylaw 
or standard of the Association, and any proposed 
amendment to the bylaws or standards of the Asso-
ciation, shall take effect, after notice under para-
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graph (2) and opportunity for public comment, on 
such date as the Association may designate, unless 
suspended under section 329(c). 
‘‘(4) RULE
OF
CONSTRUCTION.—Nothing in 
this section shall be construed to subject the Board 
or the Association to the requirements of subchapter 
II of chapter 5 of title 5, United States Code (com-
monly known as the ‘Administrative Procedure 
Act’). 
‘‘(b) DISCIPLINARY ACTION BY THE ASSOCIATION.— 
‘‘(1) SPECIFICATION OF CHARGES.—In any pro-
ceeding to determine whether membership shall be 
denied, suspended, revoked, or not renewed, or to 
determine whether a member of the Association 
should be placed on probation (referred to in this 
section as a ‘disciplinary action’) or whether to as-
sess fines or monetary penalties, the Association 
shall bring specific charges, notify the member of 
the charges, give the member an opportunity to de-
fend against the charges, and keep a record. 
‘‘(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 the mem-
ber has been found to have been engaged; 
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‘‘(B) the specific provision of this subtitle 
or standard of the Association that any such 
act or practice is deemed to violate; and 
‘‘(C) the sanction imposed and the reason 
for the sanction. 
‘‘(3) INELIGIBILITY OF PRIVATE SECTOR REP-
RESENTATIVES.—Board members appointed pursu-
ant to section 324(c)(3) may not— 
‘‘(A) participate in any disciplinary action 
or be counted toward establishing a quorum 
during a disciplinary action; and 
‘‘(B) have access to confidential informa-
tion concerning any disciplinary action. 
‘‘SEC. 326. POWERS. 
‘‘In addition to all the powers conferred upon a non-
profit corporation by the District of Columbia Nonprofit 
Corporation Act, the Association shall have the power to— 
‘‘(1) establish and collect such membership fees 
as the Association finds necessary to impose to cover 
the costs of its operations; 
‘‘(2) adopt, amend, and repeal bylaws, proce-
dures, or standards governing the conduct of Asso-
ciation business and performance of its duties; 
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‘‘(3) establish procedures for providing notice 
and opportunity for comment pursuant to section 
325(a); 
‘‘(4) enter into and perform such agreements as 
necessary to carry out the duties of the Association; 
‘‘(5) hire employees, professionals, or special-
ists, and elect or appoint officers, and to fix their 
compensation, define their duties and give them ap-
propriate authority to carry out the purposes of this 
subtitle, and determine their qualification; 
‘‘(6) establish personnel policies of the Associa-
tion and programs relating to, among other things, 
conflicts of interest, rates of compensation, where 
applicable, and qualifications of personnel; 
‘‘(7) borrow money; and 
‘‘(8) secure funding for such amounts as the 
Association determines to be necessary and appro-
priate to organize and begin operations of the Asso-
ciation, which shall be treated as loans to be repaid 
by the Association with interest at market rate. 
‘‘SEC. 327. REPORT BY THE ASSOCIATION. 
‘‘(a) IN GENERAL.—As soon as practicable after the 
close of each fiscal year, the Association shall submit to 
the President, through the Department of the Treasury, 
and the States (including State insurance regulators), and 
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shall publish on the website of the Association, a written 
report regarding the conduct of its business, and the exer-
cise of the other rights and powers granted by this sub-
title, during such fiscal year. 
‘‘(b) FINANCIAL STATEMENTS.—Each report sub-
mitted under subsection (a) with respect to any fiscal year 
shall include audited financial statements setting forth the 
financial position of the Association at the end of such 
fiscal year and the results of its operations (including the 
source and application of its funds) for such fiscal year. 
‘‘SEC. 328. LIABILITY OF THE ASSOCIATION AND THE 
BOARD MEMBERS, OFFICERS, AND EMPLOY-
EES OF THE ASSOCIATION. 
‘‘(a) IN GENERAL.—The Association shall not be 
deemed to be an insurer or insurance producer within the 
meaning of any State law, rule, regulation, or order regu-
lating or taxing insurers, insurance producers, or other en-
tities engaged in the business of insurance, including pro-
visions imposing premium taxes, regulating insurer sol-
vency or financial condition, establishing guaranty funds 
and levying assessments, or requiring claims settlement 
practices. 
‘‘(b) LIABILITY
OF BOARD MEMBERS, OFFICERS, 
AND EMPLOYEES.—No Board member, officer, or em-
ployee of the Association shall be personally liable to any 
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person for any action taken or omitted in good faith in 
any matter within the scope of their responsibilities in con-
nection with the Association. 
‘‘SEC. 329. PRESIDENTIAL OVERSIGHT. 
‘‘(a) REMOVAL OF BOARD.—If the President deter-
mines that the Association is acting in a manner contrary 
to the interests of the public or the purposes of this sub-
title or has failed to perform its duties under this subtitle, 
the President may remove the entire existing Board for 
the remainder of the term to which the Board members 
were appointed and appoint, in accordance with section 
324 and with the advice and consent of the Senate, in 
accordance with the procedures established under Senate 
Resolution 116 of the 112th Congress, new Board mem-
bers to fill the vacancies on the Board for the remainder 
of the terms. 
‘‘(b) REMOVAL OF BOARD MEMBER.—The President 
may remove a Board member only for neglect of duty or 
malfeasance in office. 
‘‘(c) SUSPENSION OF BYLAWS AND STANDARDS AND 
PROHIBITION
OF ACTIONS.—Following notice to the 
Board, the President, or a person designated by the Presi-
dent for such purpose, may suspend the effectiveness of 
any bylaw or standard, or prohibit any action, of the Asso-
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ciation that the President or the designee determines is 
contrary to the purposes of this subtitle. 
‘‘SEC. 330. RELATIONSHIP TO STATE LAW. 
‘‘(a) PREEMPTION
OF STATE LAWS.—State laws, 
regulations, provisions, or other actions purporting to reg-
ulate insurance producers shall be preempted to the extent 
provided in subsection (b). 
‘‘(b) PROHIBITED ACTIONS.— 
‘‘(1) IN GENERAL.—No State shall— 
‘‘(A) impede the activities of, take any ac-
tion against, or apply any provision of law or 
regulation arbitrarily or discriminatorily to, any 
insurance producer because that insurance pro-
ducer or any affiliate plans to become, has ap-
plied to become, or is a member of the Associa-
tion; 
‘‘(B) impose any requirement upon a mem-
ber of the Association that it pay fees different 
from those required to be paid to that State 
were it not a member of the Association; or 
‘‘(C) impose any continuing education re-
quirements on any nonresident insurance pro-
ducer that is a member of the Association. 
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‘‘(2) STATES OTHER THAN A HOME STATE.— 
No State, other than the home State of a member 
of the Association, shall— 
‘‘(A) impose any licensing, personal or cor-
porate qualifications, education, training, expe-
rience, residency, continuing education, or 
bonding requirement upon a member of the As-
sociation that is different from the criteria for 
membership in the Association or renewal of 
such membership; 
‘‘(B) impose any requirement upon a mem-
ber of the Association that it be licensed, reg-
istered, or otherwise qualified to do business or 
remain in good standing in the State, including 
any requirement that the insurance producer 
register as a foreign company with the sec-
retary of state or equivalent State official; 
‘‘(C) require that a member of the Associa-
tion submit to a criminal history record check 
as a condition of doing business in the State; or 
‘‘(D) impose any licensing, registration, or 
appointment requirements upon a member of 
the Association, or require a member of the As-
sociation to be authorized to operate as an in-
surance producer, in order to sell, solicit, or ne-
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gotiate insurance for commercial property and 
casualty risks to an insured with risks located 
in more than one State, if the member is li-
censed or otherwise authorized to operate in the 
State where the insured maintains its principal 
place of business and the contract of insurance 
insures risks located in that State. 
‘‘(3) PRESERVATION OF STATE DISCIPLINARY 
AUTHORITY.—Nothing in this section may be con-
strued to prohibit a State from investigating and 
taking appropriate disciplinary action, including sus-
pension or revocation of authority of an insurance 
producer to do business in a State, in accordance 
with State law and that is not inconsistent with the 
provisions of this section, against a member of the 
Association as a result of a complaint or for any al-
leged activity, regardless of whether the activity oc-
curred before or after the insurance producer com-
menced doing business in the State pursuant to As-
sociation membership. 
‘‘SEC. 331. COORDINATION WITH FINANCIAL INDUSTRY 
REGULATORY AUTHORITY. 
‘‘The Association shall coordinate with the Financial 
Industry Regulatory Authority in order to ease any admin-
istrative burdens that fall on members of the Association 
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that are subject to regulation by the Financial Industry 
Regulatory Authority, consistent with the requirements of 
this subtitle and the Federal securities laws. 
‘‘SEC. 332. RIGHT OF ACTION. 
‘‘(a) RIGHT OF ACTION.—Any person aggrieved by 
a decision or action of the Association may, after reason-
ably exhausting available avenues for resolution within the 
Association, commence a civil action in an appropriate 
United States district court, and obtain all appropriate re-
lief. 
‘‘(b) ASSOCIATION INTERPRETATIONS.—In any ac-
tion under subsection (a), the court shall give appropriate 
weight to the interpretation of the Association of its by-
laws and standards and this subtitle. 
‘‘SEC. 333. FEDERAL FUNDING PROHIBITED. 
‘‘The Association may not receive, accept, or borrow 
any amounts from the Federal Government to pay for, or 
reimburse, the Association for, the costs of establishing 
or operating the Association. 
‘‘SEC. 334. DEFINITIONS. 
‘‘For purposes of this subtitle, the following defini-
tions shall apply: 
‘‘(1) BUSINESS
ENTITY.—The term ‘business 
entity’ means a corporation, association, partnership, 
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