15 U.S.C. § 6754 — Board of directors

Page 2283 TITLE 15—COMMERCE AND TRADE § 6754 1 So in original. Probably should be followed by ‘‘in’’. 1 So in original. Probably should be ‘‘such powers and author- ity as may be specified in the bylaws of the Association.’’ (A) the insurance producer fails to meet the applicable membership criteria or other standards established by the Association; (B) the insurance producer has been sub- ject to disciplinary action pursuant to a final adjudicatory proceeding under the ju- risdiction of a State insurance regulator; (C) an insurance license held by the insur- ance producer has been suspended or revoked by a State insurance regulator; or (D) the insurance producer has been con- victed of a crime that would have resulted in the denial of membership pursuant to sub- section (a)(4)(L)(i) at the time of applica- tion, and the Association has received a copy of the final disposition from a court of competent jurisdiction. (2) Violations of Association standards The Association shall have the power to in- vestigate alleged violations of Association standards. (3) Reporting The Association shall immediately notify the States (including State insurance regu- lators) and the NAIC when the membership of an insurance producer has been placed on pro- bation or has been suspended, revoked, or oth- erwise terminated, or when the Association has assessed monetary fines or penalties. (i) Consumer complaints (1) In general The Association shall— (A) refer any complaint against a member of the Association from a consumer relating to alleged misconduct or violations of State insurance laws to the State insurance regu- lator where the consumer resides and, when appropriate, to any additional State insur- ance regulator, as determined by standards adopted by the Association; and (B) make any related records and informa- tion available to each State insurance regu- lator to whom the complaint is forwarded. (2) Telephone and other access The Association shall maintain a toll-free number for purposes of this subsection and, as practicable, other alternative means of com- munication with consumers, such as an Inter- net webpage. (3) Final disposition of investigation State insurance regulators shall provide the Association with information regarding the final disposition of a complaint referred pursu- ant to paragraph (1)(A), but nothing shall be construed to compel a State to release con- fidential investigation reports or other infor- mation protected by State law to the Associa- tion. (j) Information sharing The Association may— (1) share documents, materials, or other in- formation, including confidential and privi- leged documents, with a State, Federal, or international governmental entity or with the NAIC or other appropriate entity referred to 1 paragraphs (3) and (4), provided that the re- cipient has the authority and agrees to main- tain the confidentiality or privileged status of the document, material, or other information; (2) limit the sharing of information as re- quired under this subchapter with the NAIC or any other non-governmental entity, in cir- cumstances under which the Association de- termines that the sharing of such information is unnecessary to further the purposes of this subchapter; (3) establish a central clearinghouse, or uti- lize the NAIC or another appropriate entity, as determined by the Association, as a central clearinghouse, for use by the Association and the States (including State insurance regu- lators), through which members of the Asso- ciation may disclose their intent to operate in 1 or more States and pay the licensing fees to the appropriate States; and (4) establish a database, or utilize the NAIC or another appropriate entity, as determined by the Association, as a database, for use by the Association and the States (including State insurance regulators) for the collection of regulatory information concerning the ac- tivities of insurance producers. (k) Effective date The provisions of this section shall take effect on the later of— (1) the expiration of the 2-year period begin- ning on January 12, 2015; and (2) the date of incorporation of the Associa- tion. (Pub. L. 106–102, title III, § 323, as added Pub. L. 114–1, title II, § 202(a), Jan. 12, 2015, 129 Stat. 13.) Editorial Notes REFERENCES IN TEXT The Violent Crime Control and Law Enforcement Act of 1994, referred to in subsec. (e)(2), is Pub. L. 103–322, Sept. 13, 1994, 108 Stat. 1796. For complete classification of this Act to the Code, see Short Title of 1994 Act note set out under section 10101 of Title 34, Crime Control and Law Enforcement, and Tables. PRIOR PROVISIONS Provisions similar to this section were contained in section 6755 of this title, prior to the general amend- ment of this subchapter by Pub. L. 114–1. A prior section 6753, Pub. L. 106–102, title III, § 323, Nov. 12, 1999, 113 Stat. 1424, related to purpose of the Association, prior to the general amendment of this subchapter by Pub. L. 114–1. See section 6752 of this title. § 6754. Board of directors (a) Establishment There is established a board of directors of the Association, which shall have authority to gov- ern and supervise all activities of the Associa- tion. (b) Powers The Board shall have such of the powers and authority of the Association as may be specified in the bylaws of the Association.1 Page 2284 TITLE 15—COMMERCE AND TRADE § 6754 2 So in original. Probably should be ‘‘paragraph (1)(A) of sub- section (c),’’. 3 So in original. Probably should be ‘‘paragraph (1)(B) of sub- section (c);’’. 4 So in original. Probably should be ‘‘paragraph (1)(C) of sub- section (c).’’ (c) Composition (1) In general The Board shall consist of 13 members who shall be appointed by the President, by and with the advice and consent of the Senate, in accordance with the procedures established under Senate Resolution 116 of the 112th Con- gress, of whom— (A) 8 shall be State insurance commis- sioners appointed in the manner provided in paragraph (2), 1 of whom shall be designated by the President to serve as the chairperson of the Board until the Board elects one such State insurance commissioner Board mem- ber to serve as the chairperson of the Board; (B) 3 shall have demonstrated expertise and experience with property and casualty insurance producer licensing; and (C) 2 shall have demonstrated expertise and experience with life or health insurance producer licensing. (2) State insurance regulator representatives (A) Recommendations Before making any appointments pursuant to paragraph (1)(A), the President shall re- quest a list of recommended candidates from the States through the NAIC, which shall not be binding on the President. If the NAIC fails to submit a list of recommendations not later than 15 business days after the date of the request, the President may make the requisite appointments without considering the views of the NAIC. (B) Political affiliation Not more than 4 Board members appointed under paragraph (1)(A) shall belong to the same political party. (C) Former State insurance commissioners (i) In general If, after offering each currently serving State insurance commissioner an appoint- ment to the Board, fewer than 8 State in- surance commissioners have accepted ap- pointment to the Board, the President may appoint the remaining State insur- ance commissioner Board members, as re- quired under paragraph (1)(A), of the ap- propriate political party as required under subparagraph (B), from among individuals who are former State insurance commis- sioners. (ii) Limitation A former State insurance commissioner appointed as described in clause (i) may not be employed by or have any present di- rect or indirect financial interest in any insurer, insurance producer, or other enti- ty in the insurance industry, other than direct or indirect ownership of, or bene- ficial interest in, an insurance policy or annuity contract written or sold by an in- surer. (D) Service through term If a Board member appointed under para- graph (1)(A) ceases to be a State insurance commissioner during the term of the Board member, the Board member shall cease to be a Board member. (3) Private sector representatives In making any appointment pursuant to sub- paragraph (B) or (C) of paragraph (1), the President may seek recommendations for can- didates from groups representing the category of individuals described, which shall not be binding on the President. (4) State insurance commissioner defined For purposes of this subsection, the term ‘‘State insurance commissioner’’ means a per- son who serves in the position in State govern- ment, or on the board, commission, or other body that is the primary insurance regulatory authority for the State. (d) Terms (1) In general Except as provided under paragraph (2), the term of service for each Board member shall be 2 years. (2) Exceptions (A) 1-year terms The term of service shall be 1 year, as des- ignated by the President at the time of the nomination of the subject Board members for— (i) 4 of the State insurance commissioner Board members initially appointed under paragraph (1)(A),2 of whom not more than 2 shall belong to the same political party; (ii) 1 of the Board members initially ap- pointed under paragraph (1)(B); 3 and (iii) 1 of the Board members initially ap- pointed under paragraph (1)(C).4 (B) Expiration of term A Board member may continue to serve after the expiration of the term to which the Board member was appointed for the earlier of 2 years or until a successor is appointed. (C) Mid-term appointments A Board member appointed to fill a va- cancy occurring before the expiration of the term for which the predecessor of the Board member was appointed shall be appointed only for the remainder of that term. (3) Successive terms Board members may be reappointed to suc- cessive terms. (e) Initial appointments The appointment of initial Board members shall be made no later than 90 days after Janu- ary 12, 2015. (f) Meetings (1) In general The Board shall meet— (A) at the call of the chairperson; (B) as requested in writing to the chair- person by not fewer than 5 Board members; or Page 2285 TITLE 15—COMMERCE AND TRADE § 6755 (C) as otherwise provided by the bylaws of the Association. (2) Quorum required A majority of all Board members shall con- stitute a quorum. (3) Voting Decisions of the Board shall require the ap- proval of a majority of all Board members present at a meeting, a quorum being present. (4) Initial meeting The Board shall hold its first meeting not later than 45 days after the date on which all initial Board members have been appointed. (g) Restriction on confidential information Board members appointed pursuant to sub- paragraphs (B) and (C) of subsection (c)(1) shall not have access to confidential information re- ceived by the Association in connection with complaints, investigations, or disciplinary pro- ceedings involving insurance producers. (h) Ethics and conflicts of interest The Board shall issue and enforce an ethical conduct code to address permissible and prohib- ited activities of Board members and Associa- tion officers, employees, agents, or consultants. The code shall, at a minimum, include provi- sions that prohibit any Board member or Asso- ciation officer, employee, agent or consultant from— (1) engaging in unethical conduct in the course of performing Association duties; (2) participating in the making or influ- encing the making of any Association deci- sion, the outcome of which the Board member, officer, employee, agent, or consultant knows or had reason to know would have a reason- ably foreseeable material financial effect, dis- tinguishable from its effect on the public gen- erally, on the person or a member of the im- mediate family of the person; (3) accepting any gift from any person or en- tity other than the Association that is given because of the position held by the person in the Association; (4) making political contributions to any person or entity on behalf of the Association; and (5) lobbying or paying a person to lobby on behalf of the Association. (i) Compensation (1) In general Except as provided in paragraph (2), no Board member may receive any compensation from the Association or any other person or entity on account of Board membership. (2) Travel expenses and per diem Board members may be reimbursed only by the Association for travel expenses, including per diem in lieu of subsistence, at rates con- sistent with rates authorized for employees of Federal agencies under subchapter I of chapter 57 of title 5, while away from home or regular places of business in performance of services for the Association. (Pub. L. 106–102, title III, § 324, as added Pub. L. 114–1, title II, § 202(a), Jan. 12, 2015, 129 Stat. 20.) Editorial Notes REFERENCES IN TEXT Senate Resolution 116 of the 112th Congress, referred to in subsec. (c)(1), which was agreed to June 29, 2011, provided for expedited Senate consideration of certain nominations subject to advice and consent. PRIOR PROVISIONS Provisions similar to this section were contained in section 6756 of this title, prior to the general amend- ment of this subchapter by Pub. L. 114–1. A prior section 6754, Pub. L. 106–102, title III, § 324, Nov. 12, 1999, 113 Stat. 1424, related to relationship to the Federal Government, prior to the general amend- ment of this subchapter by Pub. L. 114–1. § 6755. 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 subchapter II of chapter 5 of title 5 (commonly known as the ‘‘Administrative Procedure Act’’). (2) Copy required to be filed The Board shall submit to the President, through the Department of the Treasury, and the States (including State insurance regu- lators), and shall publish on the website of the Association, all proposed bylaws and standards of the Association, or any proposed amend- ment 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 Asso- ciation, and any proposed amendment to the bylaws or standards of the Association, shall take effect, after notice under paragraph (2) and opportunity for public comment, on such date as the Association may designate, unless suspended under section 6759(c) of this title. (4) Rule of construction Nothing in this section shall be construed to subject the Board or the Association to the re- quirements of subchapter II of chapter 5 of title 5 (commonly known as the ‘‘Administra- tive Procedure Act’’). (b) Disciplinary action by the Association (1) Specification of charges In any proceeding to determine whether membership shall be denied, suspended, re- voked, or not renewed, or to determine wheth- er 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 Associa- tion shall bring specific charges, notify the member of the charges, give the member an opportunity to defend against the charges, and keep a record. (2) Supporting statement A determination to take disciplinary action shall be supported by a statement setting forth—