15 U.S.C. § 6753 — Membership

Page 2279 TITLE 15—COMMERCE AND TRADE § 6753 insurer from one State to another State pursu- ant to this subchapter. (12) State insurance regulator The term ‘‘State insurance regulator’’ means the principal insurance regulatory au- thority of a State, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Ter- ritory of the Pacific Islands, the Virgin Is- lands, and the Northern Mariana Islands. (13) State law The term ‘‘State law’’ means the statutes of any State, the District of Columbia, any terri- tory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands and any regulation, order, or requirement prescribed pursuant to any such statute. (14) Transferee domicile The term ‘‘transferee domicile’’ means the State to which a mutual insurer is redomes- ticating pursuant to this subchapter. (15) Transferor domicile The term ‘‘transferor domicile’’ means the State from which a mutual insurer is redomes- ticating pursuant to this subchapter. (Pub. L. 106–102, title III, § 315, Nov. 12, 1999, 113 Stat. 1420.) Executive Documents TERMINATION OF TRUST TERRITORY OF THE PACIFIC ISLANDS For termination of Trust Territory of the Pacific Is- lands, see note set out preceding section 1681 of Title 48, Territories and Insular Possessions. SUBCHAPTER III—NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS Editorial Notes CODIFICATION Subtitle C of title III of the Gramm-Leach-Bliley Act, comprising this subchapter, was originally enacted by Pub. L. 106–102, title III, Nov. 12, 1999, 113 Stat. 1422. Such subtitle is shown herein, however, as having been added by Pub. L. 114–1, title II, § 202(a), Jan. 12, 2015, 129 Stat. 12, because of the extensive revision of subtitle C by Pub. L. 114–1. § 6751. National Association of Registered Agents and Brokers (a) Establishment There is established the National Association of Registered Agents and Brokers (referred to in this subchapter as the ‘‘Association’’). (b) Status The Association shall— (1) be a nonprofit corporation; (2) not be an agent or instrumentality of the Federal Government; (3) be an independent organization that may not be merged with or into any other private or public entity; and (4) except as otherwise provided in this sub- chapter, be subject to, and have all the powers conferred upon, a nonprofit corporation by the District of Columbia Nonprofit Corporation Act (D.C. Code, sec. 29–301.01 et seq.) or any successor thereto. (Pub. L. 106–102, title III, § 321, as added Pub. L. 114–1, title II, § 202(a), Jan. 12, 2015, 129 Stat. 13.) Editorial Notes REFERENCES IN TEXT The District of Columbia Nonprofit Corporation Act, referred to in subsec. (b)(4), is Pub. L. 87–569, Aug. 6, 1962, 76 Stat. 265, which is not classified to the Code. PRIOR PROVISIONS Provisions similar to this section were contained in section 6752 of this title, prior to the general amend- ment of this subchapter by Pub. L. 114–1. A prior section 6751, Pub. L. 106–102, title III, § 321, Nov. 12, 1999, 113 Stat. 1422, related to State flexibility in multistate licensing reforms, prior to the general amendment of this subchapter by Pub. L. 114–1. § 6752. Purpose The purpose of the Association shall be to pro- vide a mechanism through which licensing, con- tinuing education, and other nonresident insur- ance producer qualification requirements and conditions may be adopted and applied on a multi-state basis without affecting the laws, rules, and regulations, and preserving the rights of a State, pertaining to— (1) licensing, continuing education, and other qualification requirements of insurance producers that are not members of the Asso- ciation; (2) resident or nonresident insurance pro- ducer appointment requirements; (3) supervising and disciplining resident and nonresident insurance producers; (4) establishing licensing fees for resident and nonresident insurance producers so that there is no loss of insurance producer licensing revenue to the State; and (5) prescribing and enforcing laws and regu- lations regulating the conduct of resident and nonresident insurance producers. (Pub. L. 106–102, title III, § 322, as added Pub. L. 114–1, title II, § 202(a), Jan. 12, 2015, 129 Stat. 13.) Editorial Notes PRIOR PROVISIONS Provisions similar to this section were contained in section 6753 of this title, prior to the general amend- ment of this subchapter by Pub. L. 114–1. A prior section 6752, Pub. L. 106–102, title III, § 322, Nov. 12, 1999, 113 Stat. 1424, related to National Associa- tion of Registered Agents and Brokers, prior to the general amendment of this subchapter by Pub. L. 114–1. See section 6751 of this title. § 6753. Membership (a) Eligibility (1) In general Any insurance producer licensed in its home State shall, subject to paragraphs (2) and (4), be eligible to become a member of the Associa- tion. (2) Ineligibility for suspension or revocation of license Subject to paragraph (3), an insurance pro- ducer is not eligible to become a member of Page 2280 TITLE 15—COMMERCE AND TRADE § 6753 the Association if a State insurance regulator has suspended or revoked the insurance li- cense of the insurance producer in that State. (3) Resumption of eligibility Paragraph (2) shall cease to apply to any in- surance producer if— (A) the State insurance regulator reissues or renews the license of the insurance pro- ducer in the State in which the license was suspended or revoked, or otherwise termi- nates or vacates the suspension or revoca- tion; or (B) the suspension or revocation expires or is subsequently overturned by a court of competent jurisdiction. (4) Criminal history record check required (A) In general An insurance producer who is an indi- vidual shall not be eligible to become a member of the Association unless the insur- ance producer has undergone a criminal his- tory record check that complies with regula- tions prescribed by the Attorney General of the United States under subparagraph (K). (B) Criminal history record check requested by home State An insurance producer who is licensed in a State and who has undergone a criminal his- tory record check during the 2-year period preceding the date of submission of an appli- cation to become a member of the Associa- tion, in compliance with a requirement to undergo such criminal history record check as a condition for such licensure in the State, shall be deemed to have undergone a criminal history record check for purposes of subparagraph (A). (C) Criminal history record check requested by Association (i) In general The Association shall, upon request by an insurance producer licensed in a State, submit fingerprints or other identification information obtained from the insurance producer, and a request for a criminal his- tory record check of the insurance pro- ducer, to the Federal Bureau of Investiga- tion. (ii) Procedures The board of directors of the Association (referred to in this subchapter as the ‘‘Board’’) shall prescribe procedures for ob- taining and utilizing fingerprints or other identification information and criminal history record information, including the establishment of reasonable fees to defray the expenses of the Association in connec- tion with the performance of a criminal history record check and appropriate safe- guards for maintaining confidentiality and security of the information. Any fees charged pursuant to this clause shall be separate and distinct from those charged by the Attorney General pursuant to sub- paragraph (I). (D) Form of request A submission under subparagraph (C)(i) shall include such fingerprints or other iden- tification information as is required by the Attorney General concerning the person about whom the criminal history record check is requested, and a statement signed by the person authorizing the Attorney Gen- eral to provide the information to the Asso- ciation and for the Association to receive the information. (E) Provision of information by Attorney General Upon receiving a submission under sub- paragraph (C)(i) from the Association, the Attorney General shall search all criminal history records of the Federal Bureau of In- vestigation, including records of the Crimi- nal Justice Information Services Division of the Federal Bureau of Investigation, that the Attorney General determines appro- priate for criminal history records cor- responding to the fingerprints or other iden- tification information provided under sub- paragraph (D) and provide all criminal his- tory record information included in the re- quest to the Association. (F) Limitation on permissible uses of infor- mation Any information provided to the Associa- tion under subparagraph (E) may only— (i) be used for purposes of determining compliance with membership criteria es- tablished by the Association; (ii) be disclosed to State insurance regu- lators, or Federal or State law enforce- ment agencies, in conformance with appli- cable law; or (iii) be disclosed, upon request, to the in- surance producer to whom the criminal history record information relates. (G) Penalty for improper use or disclosure Whoever knowingly uses any information provided under subparagraph (E) for a pur- pose not authorized in subparagraph (F), or discloses any such information to anyone not authorized to receive it, shall be fined not more than $50,000 per violation as deter- mined by a court of competent jurisdiction. (H) Reliance on information Neither the Association nor any of its Board members, officers, or employees shall be liable in any action for using information provided under subparagraph (E) as per- mitted under subparagraph (F) in good faith and in reasonable reliance on its accuracy. (I) Fees The Attorney General may charge a rea- sonable fee for conducting the search and providing the information under subpara- graph (E), and any such fee shall be collected and remitted by the Association to the At- torney General. (J) Rule of construction Nothing in this paragraph shall be con- strued as— (i) requiring a State insurance regulator to perform criminal history record checks under this section; or (ii) limiting any other authority that al- lows access to criminal history records. Page 2281 TITLE 15—COMMERCE AND TRADE § 6753 (K) Regulations The Attorney General shall prescribe regu- lations to carry out this paragraph, which shall include— (i) appropriate protections for ensuring the confidentiality of information pro- vided under subparagraph (E); and (ii) procedures providing a reasonable op- portunity for an insurance producer to contest the accuracy of information re- garding the insurance producer provided under subparagraph (E). (L) Ineligibility for membership (i) In general The Association may, under reasonably consistently applied standards, deny mem- bership to an insurance producer on the basis of criminal history record informa- tion provided under subparagraph (E), or where the insurance producer has been subject to disciplinary action, as described in paragraph (2). (ii) Rights of applicants denied member- ship The Association shall notify any insur- ance producer who is denied membership on the basis of criminal history record in- formation provided under subparagraph (E) of the right of the insurance producer to— (I) obtain a copy of all criminal history record information provided to the Asso- ciation under subparagraph (E) with re- spect to the insurance producer; and (II) challenge the denial of membership based on the accuracy and completeness of the information. (M) Definition For purposes of this paragraph, the term ‘‘criminal history record check’’ means a na- tional background check of criminal history records of the Federal Bureau of Investiga- tion. (b) Authority to establish membership criteria The Association may establish membership criteria that bear a reasonable relationship to the purposes for which the Association was es- tablished. (c) Establishment of classes and categories of membership (1) Classes of membership The Association may establish separate classes of membership, with separate criteria, if the Association reasonably determines that performance of different duties requires dif- ferent levels of education, training, experi- ence, or other qualifications. (2) Business entities The Association shall establish a class of membership and membership criteria for busi- ness entities. A business entity that applies for membership shall be required to designate an individual Association member responsible for the compliance of the business entity with Association standards and the insurance laws, standards, and regulations of any State in which the business entity seeks to do business on the basis of Association membership. (3) Categories (A) Separate categories for insurance pro- ducers permitted The Association may establish separate categories of membership for insurance pro- ducers and for other persons or entities within each class, based on the types of li- censing categories that exist under State laws. (B) Separate treatment for depository insti- tutions prohibited No special categories of membership, and no distinct membership criteria, shall be es- tablished for members that are depository institutions or for employees, agents, or af- filiates of depository institutions. (d) Membership criteria (1) In general The Association may establish criteria for membership which shall include standards for personal qualifications, education, training, and experience. The Association shall not es- tablish criteria that unfairly limit the ability of a small insurance producer to become a member of the Association, including impos- ing discriminatory membership fees. (2) Qualifications In establishing criteria under paragraph (1), the Association shall not adopt any qualifica- tion less protective to the public than that contained in the National Association of In- surance Commissioners (referred to in this subchapter as the ‘‘NAIC’’) Producer Licensing Model Act in effect as of January 12, 2015, and shall consider the highest levels of insurance producer qualifications established under the licensing laws of the States. (3) Assistance from States (A) In general The Association may request a State to provide assistance in investigating and eval- uating the eligibility of a prospective mem- ber for membership in the Association. (B) Authorization of information sharing A submission under subsection (a)(4)(C)(i) made by an insurance producer licensed in a State shall include a statement signed by the person about whom the assistance is re- quested authorizing— (i) the State to share information with the Association; and (ii) the Association to receive the infor- mation. (C) Rule of construction Subparagraph (A) shall not be construed as requiring or authorizing any State to adopt new or additional requirements concerning the licensing or evaluation of insurance pro- ducers. (4) Denial of membership The Association may, based on reasonably consistently applied standards, deny member- ship to any State-licensed insurance producer Page 2282 TITLE 15—COMMERCE AND TRADE § 6753 for failure to meet the membership criteria es- tablished by the Association. (e) Effect of membership (1) Authority of Association members Membership in the Association shall— (A) authorize an insurance producer to sell, solicit, or negotiate insurance in any State for which the member pays the licens- ing fee set by the State for any line or lines of insurance specified in the home State li- cense of the insurance producer, and exercise all such incidental powers as shall be nec- essary to carry out such activities, including claims adjustments and settlement to the extent permissible under the laws of the State, risk management, employee benefits advice, retirement planning, and any other insurance-related consulting activities; (B) be the equivalent of a nonresident in- surance producer license for purposes of au- thorizing the insurance producer to engage in the activities described in subparagraph (A) in any State where the member pays the licensing fee; and (C) be the equivalent of a nonresident in- surance producer license for the purpose of subjecting an insurance producer to all laws, regulations, provisions or other action of any State concerning revocation, suspen- sion, or other enforcement action related to the ability of a member to engage in any ac- tivity within the scope of authority granted under this subsection and to all State laws, regulations, provisions, and actions pre- served under paragraph (5). (2) Violent Crime Control and Law Enforce- ment Act of 1994 Nothing in this subchapter shall be con- strued to alter, modify, or supercede any re- quirement established by section 1033 of title 18. (3) Agent for remitting fees The Association shall act as an agent for any member for purposes of remitting licens- ing fees to any State pursuant to paragraph (1). (4) Notification of action (A) In general The Association shall notify the States (including State insurance regulators) and the NAIC when an insurance producer has satisfied the membership criteria of this sec- tion. The States (including State insurance regulators) shall have 10 business days after the date of the notification in order to pro- vide the Association with evidence that the insurance producer does not satisfy the cri- teria for membership in the Association. (B) Ongoing disclosures required On an ongoing basis, the Association shall disclose to the States (including State insur- ance regulators) and the NAIC a list of the States in which each member is authorized to operate. The Association shall imme- diately notify the States (including State in- surance regulators) and the NAIC when a member is newly authorized to operate in one or more States, or is no longer author- ized to operate in one or more States on the basis of Association membership. (5) Preservation of consumer protection and market conduct regulation (A) In general No provision of this section shall be con- strued as altering or affecting the applica- bility or continuing effectiveness of any law, regulation, provision, or other action of any State, including those described in subpara- graph (B), to the extent that the State law, regulation, provision, or other action is not inconsistent with the provisions of this sub- chapter related to market entry for non- resident insurance producers, and then only to the extent of the inconsistency. (B) Preserved regulations The laws, regulations, provisions, or other actions of any State referred to in subpara- graph (A) include laws, regulations, provi- sions, or other actions that— (i) regulate market conduct, insurance producer conduct, or unfair trade prac- tices; (ii) establish consumer protections; or (iii) require insurance producers to be appointed by a licensed or authorized in- surer. (f) Biennial renewal Membership in the Association shall be re- newed on a biennial basis. (g) Continuing education (1) In general The Association shall establish, as a condi- tion of membership, continuing education re- quirements which shall be comparable to the continuing education requirements under the licensing laws of a majority of the States. (2) State continuing education requirements A member may not be required to satisfy continuing education requirements imposed under the laws, regulations, provisions, or ac- tions of any State other than the home State of the member. (3) Reciprocity The Association shall not require a member to satisfy continuing education requirements that are equivalent to any continuing edu- cation requirements of the home State of the member that have been satisfied by the mem- ber during the applicable licensing period. (4) Limitation on the Association The Association shall not directly or indi- rectly offer any continuing education courses for insurance producers. (h) Probation, suspension and revocation (1) Disciplinary action The Association may place an insurance pro- ducer that is a member of the Association on probation or suspend or revoke the member- ship of the insurance producer in the Associa- tion, or assess monetary fines or penalties, as the Association determines to be appropriate, if— 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