{"data":{"id":"us-ky/krs-304.51-010","jurisdiction":"us-ky","citation":"KRS 304.51-010","heading":"Interstate Insurance Product Regulation Compact.","body":"Interstate Insurance Product Regulation Compact\nPursuant to terms and conditions of this compact, the Commonwealth of Kentucky seeks\nto join with other states and establish the Interstate Insurance Product Regulation\nCompact, and thus become a member of th e Interstate Insurance Product Regulation\nCommission. The commissioner of insurance, or his or her designee, is hereby designated\nto serve as the representative of this state to the commission.\nARTICLE I\nThe purposes of this compact are, through means of j oint and cooperative action among\nthe compacting states:\n(1) To promote and protect the interest of consumers of individual and group annuity,\nlife insurance, disability income, and long-term care insurance products;\n(2) To develop uniform standards for insurance products covered under the compact;\n(3) To establish a central clearinghouse to receive and provide prompt review of\ninsurance products covered under the compact and, in certain cases, advertisements\nrelated thereto, submitted by insurers authorize d to do business in one (1) or more\ncompacting states;\n(4) To give appropriate regulatory approval to those product filings and advertisements\nsatisfying the applicable uniform standard;\n(5) To improve coordination of regulatory resources and expertise bet ween state\ninsurance departments regarding the setting of uniform standards and review of\ninsurance products covered under the compact;\n(6) To create the Interstate Insurance Product Regulation Commission; and\n(7) To perform these and such other related fu nctions as may be consistent with the\nstate regulation of the business of insurance.\nARTICLE II\nFor purposes of this compact:\n(1) \"Advertisement\" means any material designed to create public interest in a product,\nor induce the public to purchase, increase, modify, reinstate, borrow on, surrender,\nreplace, or retain a policy, as more specifically defined in the rules and operating\nprocedures of the commission;\n(2) \"Bylaws\" mean those bylaws established by the commission for its governance, or\nfor directing or controlling the commission's actions or conduct;\n(3) \"Compacting state\" means any state which has enacted this compact legislat ion and\nwhich has not withdrawn pursuant to Article XIV, Section (1), or been terminated\npursuant to Article XIV, Section (2);\n(4) \"Commission\" means the Interstate Insurance Product Regulation Commission\nestablished by this compact;\n(5) \"Commissioner\" means the chief insurance regulatory official of a state including\nbut not limited to commissioner, superintendent, director, or administrator;\n(6) \"Domiciliary state\" means the state in which an insurer is incorporated or organized;\nor, in the case of an alien insurer, its state of entry;\n(7) \"Insurer\" means any entity licensed by a state to issue contracts of insurance for any\nof the lines of insurance covered by this compact;\n(8) \"Member\" means the person chosen by a compacting state as its representative t o\nthe commission, or his or her designee;\n(9) \"Noncompacting state\" means any state which is not at the time a compacting state;\n(10) \"Operating procedures\" mean procedures promulgated by the commission\nimplementing a rule, uniform standard or a provision of this compact;\n(11) \"Product\" means the form of a policy or contract, including any application,\nendorsement, or related form which is attached to and made a part of the policy or\ncontract, and any evidence of coverage or certificate, for an individual o r group\nannuity, life insurance, disability income, or long -term care insurance product that\nan insurer is authorized to issue;\n(12) \"Rule\" means a statement of general or particular applicability and future effect\npromulgated by the commission, including a uniform standard developed pursuant\nto Article VII of this compact, designed to implement, interpret, or prescribe law or\npolicy or describing the organization, procedure, or practice requirements of the\ncommission, which shall have the force and effect of law in the compacting states;\n(13) \"State\" means any state, district, or territory of the United States of America;\n(14) \"Third-party filer\" means an entity that submits a product filing to the commission\non behalf of an insurer; and\n(15) \"Uniform standard\" means a standard adopted by the commission for a product line,\npursuant to Article VII of this compact, and shall include all of the product\nrequirements in aggregate; provided, that each uniform standard shall be construed,\nwhether express or implied , to prohibit the use of any inconsistent, misleading or\nambiguous provisions in a product and the form of the product made available to\nthe public shall not be unfair, inequitable, or against public policy as determined by\nthe commission.\nARTICLE III\n(1) The compacting states hereby create and establish a joint public agency known as\nthe Interstate Insurance Product Regulation Commission. Pursuant to Article IV, the\ncommission will have the power to develop uniform standards for product lines,\nreceive and provide prompt review of products filed therewith, and give approval to\nthose product filings satisfying applicable uniform standards; provided, it is not\nintended for the commission to be the exclusive entity for receipt and review of\ninsurance product fi lings. Nothing herein shall prohibit any insurer from filing its\nproduct in any state wherein the insurer is licensed to conduct the business of\ninsurance; and any such filing shall be subject to the laws of the state where filed.\n(2) The commission is a b ody corporate and politic, and an instrumentality of the\ncompacting states.\n(3) The commission is solely responsible for its liabilities except as otherwise\nspecifically provided in this compact.\n(4) Venue is proper and judicial proceedings by or against t he commission shall be\nbrought solely and exclusively in a court of competent jurisdiction where the\nprincipal office of the commission is located.\nARTICLE IV\nThe commission shall have the following powers:\n(1) To promulgate rules, pursuant to Article VII of this compact, which shall have the\nforce and effect of law and shall be binding in the compacting states to the extent\nand in the manner provided in this compact;\n(2) To exercise its rule-making authority and establish reasonable uniform standards for\nproducts covered under the compact, and advertisement related thereto, which shall\nhave the force and effect of law and shall be binding in the compacting states, but\nonly for those products filed with the commission, provided, that a compacting state\nshall have the right to opt out of such uniform standard pursuant to Article VII, to\nthe extent and in the manner provided in this compact, and, provided further, that\nany uniform standard established by the commission for long -term care insurance\nproducts may provide the same or greater protections for consumers as, but shall not\nprovide less than, those protections set forth in the National Association of\nInsurance Commissioners' (NAIC) Long -Term Care Insurance Model Act and\nLong-Term Care Insurance Model Regulation, respectively, adopted as of 2001. The\ncommission shall consider whether any subsequent amendments to the National\nAssociation of Insurance Commissioners' Long -Term Care Insurance Model Act or\nLong-Term Care Insurance Model Regulation adopted by the  National Association\nof Insurance Commissioners require amending of the uniform standards established\nby the commission for long-term care insurance products;\n(3) To receive and review in an expeditious manner products filed with the\ncommission, and rate filings for disability income and long -term care insurance\nproducts, and give approval of those products and rate filings that satisfy the\napplicable uniform standard, where such approval shall have the force and effect of\nlaw and be binding on the compacting states to the extent and in the manner\nprovided in the compact;\n(4) To receive and review in an expeditious manner advertisement relating to long-term\ncare insu rance products for which uniform standards have been adopted by the\ncommission, and give approval to all advertisement that satisfies the applicable\nuniform standard. For any product covered under this compact, other than long-term\ncare insurance products,  the commission shall have the authority to require an\ninsurer to submit all or any part of its advertisement with respect to that product for\nreview or approval prior to use, if the commission determines that the nature of the\nproduct is such that an adve rtisement of the product could have the capacity or\ntendency to mislead the public. The actions of commission as provided in this\nsection shall have the force and effect of law and shall be binding in the compacting\nstates to the extent and in the manner provided in the compact;\n(5) To exercise its rule-making authority and designate products and advertisement that\nmay be subject to a self -certification process without the need for prior approval by\nthe commission;\n(6) To promulgate operating procedures, pursuant to Article VII of this compact, which\nshall be binding in the compacting states to the extent and in the manner provided in\nthis compact;\n(7) To bring and prosecute legal proceedings or actions in its name as the commission;\nprovided, that the stand ing of any state insurance department to sue or be sued\nunder applicable law shall not be affected;\n(8) To issue subpoenas requiring the attendance and testimony of witnesses and the\nproduction of evidence;\n(9) To establish and maintain offices;\n(10) To purchase and maintain insurance and bonds;\n(11) To borrow, accept or contract for services of personnel, including but not limited to\nemployees of a compacting state;\n(12) To hire employees, professionals, or specialists, and elect or appoint officers, and to\nfix their compensation, define their duties, and give them appropriate authority to\ncarry out the purposes of the compact, and determine their qualifications; and to\nestablish the commission's personnel policies and programs relating to, among other\nthings, conflicts of interest, rates of compensation, and qualifications of personnel;\n(13) To accept any and all appropriate donations, and grants of money, equipment,\nsupplies, materials, and services, and to receive, utilize, and dispose of the same;\nprovided that at all times the commission shall strive to avoid any appearance of\nimpropriety;\n(14) To lease, purchase, accept appropriate gifts or donations of, or otherwise to own,\nhold, improve or use, any property, real, personal or mixed; provided that at a ll\ntimes the commission shall strive to avoid any appearance of impropriety;\n(15) To sell, convey, mortgage, pledge, lease, exchange, abandon, or otherwise dispose\nof any property, real, personal, or mixed;\n(16) To remit filing fees to compacting states as  may be set forth in the bylaws, rules, or\noperating procedures;\n(17) To enforce compliance by compacting states with rules, uniform standards,\noperating procedures, and bylaws;\n(18) To provide for dispute resolution among compacting states;\n(19) To advise  compacting states on issues relating to insurers domiciled or doing\nbusiness in noncompacting jurisdictions, consistent with the purposes of this\ncompact;\n(20) To provide advice and training to those personnel in state insurance departments\nresponsible for product review, and to be a resource for state insurance departments;\n(21) To establish a budget and make expenditures;\n(22) To borrow money;\n(23) To appoint committees, including advisory committees comprising members, state\ninsurance regulators, state legislators or their representatives, insurance industry and\nconsumer representatives, and such other interested persons as may be designated in\nthe bylaws;\n(24) To provide and receive information from, and to cooperate with, law enforcement\nagencies;\n(25) To adopt and use a corporate seal; and\n(26) To perform such other functions as may be necessary or appropriate to achieve the\npurposes of this compact consistent with the state regulation of the business of\ninsurance.\nARTICLE V\n(1) Membership, Voting, and Bylaws.\n(a) Each compacting state shall have and be limited to one (1) member. Each\nmember shall be qualified to serve in that capa city pursuant to applicable law\nof the compacting state. Any member may be removed or suspended from\noffice as provided by the law of the state from which he or she shall be\nappointed. Any vacancy occurring in the commission shall be filled in\naccordance with the laws of the compacting state wherein the vacancy exists.\nNothing herein shall be construed to affect the manner in which a compacting\nstate determines the election or appointment and qualification of its own\ncommissioner.\n(b) Each member shall be entitled to one (1) vote and shall have an opportunity to\nparticipate in the governance of the commission in accordance with the\nbylaws. Notwithstanding any provision herein to the contrary, no action of the\ncommission with respect to the promulgation of a uniform standard shall be\neffective unless two-thirds (2/3) of the members vote in favor thereof.\n(c) The commission shall, by a majority of the members, prescribe bylaws to\ngovern its conduct as may be necessary or appropriate to carry out the\npurposes, and exercise the powers, of the compact, including but not limited\nto:\n1. Establishing the fiscal year of the commission;\n2. Providing reasonable procedures for appointing and electing members,\nas well as holding meetings, of the management committee;\n3. Providing reasonable standards and procedures:\na. For the establishment and meetings of other committees; and\nb. Governing any general or specific delegation of any authority or\nfunction of the commission;\n4. Providing reasonable procedures for calling and c onducting meetings of\nthe commission that consists of a majority of commission members,\nensuring reasonable advance notice of each such meeting and providing\nfor the right of citizens to attend each such meeting with enumerated\nexceptions designed to prote ct the public's interest, the privacy of\nindividuals, and insurers' proprietary information, including trade\nsecrets. The commission may meet in camera only after a majority of the\nentire membership votes to close a meeting in total or in part. As soon as\npracticable, the commission must make public:\na. A copy of the vote to close the meeting revealing the vote of each\nmember with no proxy votes allowed; and\nb. Votes taken during such meeting;\n5. Establishing the titles, duties, and authority and reasonable  procedures\nfor the election of the officers of the commission;\n6. Providing reasonable standards and procedures for the establishment of\nthe personnel policies and programs of the commission.\nNotwithstanding any civil service or other similar laws of any\ncompacting state, the bylaws shall exclusively govern the personnel\npolicies and programs of the commission;\n7. Promulgating a code of ethics to address permissible and prohibited\nactivities of commission members and employees; and\n8. Providing a mechanism for winding up the operations of the commission\nand the equitable disposition of any surplus funds that may exist after\nthe termination of the compact after the payment and/or reserving of all\nof its debts and obligations.\n(d) The commission shall publish  its bylaws in a convenient form and file a copy\nthereof and a copy of any amendment thereto, with the appropriate agency or\nofficer in each of the compacting states.\n(2) Management Committee, Officers, and Personnel.\n(a) A management committee comprising no more than fourteen (14) members\nshall be established as follows:\n1. One (1) member from each of the six (6) compacting states with the\nlargest premium volume for individual and group annuities, life,\ndisability income, and long -term care insurance produ cts, determined\nfrom the records of the National Association of Insurance\nCommissioners for the prior year;\n2. Four (4) members from those compacting states with at least two percent\n(2%) of the market based on the premium volume described above, other\nthan the six (6) compacting states with the largest premium volume,\nselected on a rotating basis as provided in the bylaws; and\n3. Four (4) members from those compacting states with less than two\npercent (2%) of the market, based on the premium volume describ ed\nabove, with one (1) selected from each of the four (4) zone regions of\nthe National Association of Insurance Commissioners as provided in the\nbylaws.\n(b) The management committee shall have such authority and duties as may be set\nforth in the bylaws, including but not limited to:\n1. Managing the affairs of the commission in a manner consistent with the\nbylaws and purposes of the commission;\n2. Establishing and overseeing an organizational structure within, and\nappropriate procedures for, the commission to provide for the creation of\nuniform standards and other rules, receipt and review of product filings,\nadministrative and technical support functions, review of decisions\nregarding the disapproval of a product filing, and the review of elections\nmade by a  compacting state to opt out of a uniform standard; provided\nthat a uniform standard shall not be submitted to the compacting states\nfor adoption unless approved by two -thirds (2/3) of the members of the\nmanagement committee;\n3. Overseeing the offices of the commission; and\n4. Planning, implementing, and coordinating communications and\nactivities with other state, federal, and local government organizations in\norder to advance the goals of the commission.\n(c) The commission shall elect annually officers from the management\ncommittee, with each having such authority and duties, as may be specified in\nthe bylaws.\n(d) The management committee may, subject to the approval of the commission,\nappoint or retain an exe cutive director for such period, upon such terms and\nconditions and for such compensation as the commission may deem\nappropriate. The executive director shall serve as secretary to the commission,\nbut shall not be a member of the commission. The executive director shall hire\nand supervise such other staff as may be authorized by the commission.\n(3) Legislative and Advisory Committees.\n(a) A legislative committee comprising state legislators or their designees shall be\nestablished to monitor the operations o f, and make recommendations to, the\ncommission, including the management committee; provided that the manner\nof selection and term of any legislative committee member shall be as set forth\nin the bylaws. Prior to the adoption by the commission of any unifo rm\nstandard, revision to the bylaws, annual budget, or other significant matter as\nmay be provided in the bylaws, the management committee shall consult with\nand report to the legislative committee.\n(b) The commission shall establish two (2) advisory committees, one (1) of which\nshall comprise consumer representatives independent of the insurance\nindustry, and the other comprising insurance industry representatives.\n(c) The commission may establish additional advisory committees as its bylaws\nmay provide for the carrying out of its functions.\n(4) Corporate Records of the Commission. The commission shall maintain its corporate\nbooks and records in accordance with the bylaws.\n(5) Qualified Immunity, Defense, and Indemnification.\n(a) The members, officers, exec utive director, employees, and representatives of\nthe commission shall be immune from suit and liability, either personally or in\ntheir official capacity, for any claim for damage to or loss of property or\npersonal injury or other civil liability caused by  or arising out of any actual or\nalleged act, error, or omission that occurred, or that the person against whom\nthe claim is made had a reasonable basis for believing occurred within the\nscope of commission employment, duties, or responsibilities; provided , that\nnothing in this paragraph shall be construed to protect any such person from\nsuit or liability for any damage, loss, injury, or liability caused by the\nintentional or willful and wanton misconduct of that person.\n(b) The commission shall defend any member, officer, executive director,\nemployee, or representative of the commission in any civil action seeking to\nimpose liability arising out of any actual or alleged act, error, or omission that\noccurred within the scope of commission employment, duties,  or\nresponsibilities, or that the person against whom the claim is made had a\nreasonable basis for believing occurred within the scope of commission\nemployment, duties, or responsibilities; provided, that nothing herein shall be\nconstrued to prohibit that person from retaining his or her own counsel; and\nprovided further, that the actual or alleged act, error, or omission did not result\nfrom that person's intentional or willful and wanton misconduct.\n(c) The commission shall indemnify and hold harmless any member, officer,\nexecutive director, employee, or representative of the commission for the\namount of any settlement or judgment obtained against that person arising out\nof any actual or alleged act, error, or omission that occurred within the scope\nof commission employment, duties, or responsibilities, or that such person had\na reasonable basis for believing occurred within the scope of commission\nemployment, duties, or responsibilities; provided, that the actual or alleged\nact, error, or omission did not result from the intentional or willful and wanton\nmisconduct of that person.\nARTICLE VI\n(1) The commission shall meet and take such actions as are consistent with the\nprovisions of this compact and the bylaws.\n(2) Each member of the commission shall have th e right and power to cast a vote to\nwhich that compacting state is entitled and to participate in the business and affairs\nof the commission. A member shall vote in person or by such other means as\nprovided in the bylaws. The bylaws may provide for members ' participation in\nmeetings by telephone or other means of communication.\n(3) The commission shall meet at least once during each calendar year. Additional\nmeetings shall be held as set forth in the bylaws.\nARTICLE VII\n(1) Rulemaking Authority. The commiss ion shall promulgate reasonable rules,\nincluding uniform standards, and operating procedures in order to effectively and\nefficiently achieve the purposes of this compact. Notwithstanding the foregoing, in\nthe event the commission exercises its rulemaking a uthority in a manner that is\nbeyond the scope of the purposes of this compact, or the powers granted hereunder,\nthen such an action by the commission shall be invalid and have no force and effect.\n(2) Rulemaking Procedure, Rules, and Operating Procedures. Rulemaking procedure.\nrules, and operating procedures shall be made pursuant to a rulemaking process that\nconforms to the Model State Administrative Procedure Act of 1981 as amended, as\nmay be appropriate to the operations of the commission. Before the com mission\nadopts a uniform standard, the commission shall give written notice to the relevant\nstate legislative committee in each compacting state responsible for insurance issues\nof its intention to adopt the uniform standard. The commission in adopting a\nuniform standard shall consider fully all submitted materials and issue a concise\nexplanation of its decision.\n(3) Effective Date and Opt Out of a Uniform Standard. A uniform standard shall\nbecome effective ninety (90) days after its promulgation by the com mission or such\nlater date as the commission may determine; provided, however, that a compacting\nstate may opt out of a uniform standard as provided in this article. \"Opt out\" shall be\ndefined as any action by a compacting state to decline to adopt or part icipate in a\npromulgated uniform standard. All other rules and operating procedures, and\namendments thereto, shall become effective as of the date specified in each rule,\noperating procedure, or amendment.\n(4) Opt Out Procedure. A compacting state may opt out of a uniform standard, either by\nlegislation or regulation duly promulgated by the insurance department under the\ncompacting state's administrative procedure act. If a compacting state elects to opt\nout of a uniform standard by regulation, it must give  written notice to the\ncommission no later than ten (10) business days after the uniform standard is\npromulgated, or at the time the state becomes a compacting state, and find that the\nuniform standard does not provide reasonable protections to the citizens of the state,\ngiven the conditions in the state. The commissioner shall make specific findings of\nfact and conclusions of law, based on a preponderance of the evidence, detailing the\nconditions in the state which warrant a departure from the uniform stan dard and\ndetermining that the uniform standard would not reasonably protect the citizens of\nthe state. The commissioner must consider and balance the following factors and\nfind that the conditions in the state and needs of the citizens of the state outweigh:\n(a) The intent of the legislature to participate in, and the benefits of, an interstate\nagreement to establish national uniform consumer protections for the products\nsubject to this compact; and\n(b) The presumption that a uniform standard adopted by the  commission provides\nreasonable protections to consumers of the relevant product.\nNotwithstanding the foregoing, a compacting state may, at the time of its enactment\nof this compact, prospectively opt out of all uniform standards involving long -term\ncare insurance products by expressly providing for such opt out in the enacted\ncompact, and such an opt out shall not be treated as a material variance in the offer\nor acceptance of any state to participate in this compact. Such an opt out shall be\neffective at the time of enactment of this compact by the compacting state and shall\napply to all existing uniform standards involving long -term care insurance products\nand those subsequently promulgated.\n(5) Effect of Opt Out. If a compacting state elects to opt out of a uniform standard, the\nuniform standard shall remain applicable in the compacting state electing to opt out\nuntil such time the opt out legislation is enacted into law or the regulation opting\nout becomes effective. Once the opt out of a uniform standard by a compacting state\nbecomes effective as provided under the laws of that state, the uniform standard\nshall have no further force and effect in that state unless and until the legislation or\nregulation implementing the opt out is repealed or otherwise becomes ineffective\nunder the laws of the state. If a compacting state opts out of a uniform standard after\nthe uniform standard has been made effective in that state, the opt out shall have the\nsame prospective effect as provided under Article XIV for withdrawals.\n(6) Stay of Uniform Standard. If a compacting state has formally initiated the process of\nopting out of a uniform standard by regulation, and while the regulatory opt out is\npending, the compacting state may petition the commission, at least fifteen (15)\ndays before the effective date of the uniform standard, to stay the  effectiveness of\nthe uniform standard in that state. The commission may grant a stay if it determines\nthe regulatory opt out is being pursued in a reasonable manner and there is a\nlikelihood of success. If a stay is granted or extended by the commission, the stay or\nextension thereof may postpone the effective date by up to ninety (90) days, unless\naffirmatively extended by the commission; provided, a stay may not be permitted to\nremain in effect for more than one (1) year unless the compacting state can s how\nextraordinary circumstances which warrant a continuance of the stay, including but\nnot limited to the existence of a legal challenge which prevents the compacting state\nfrom opting out. A stay may be terminated by the commission upon notice that the\nrule-making process has been terminated.\n(7) Not later than thirty (30) days after a rule or operating procedure is promulgated,\nany person may file a petition for judicial review of the rule or operating procedure;\nprovided, that the filing of such a petiti on shall not stay or otherwise prevent the\nrule or operating procedure from becoming effective unless the court finds that the\npetitioner has a substantial likelihood of success. The court shall give deference to\nthe actions of the commission consistent wi th applicable law and shall not find the\nrule or operating procedure to be unlawful if the rule or operating procedure\nrepresents a reasonable exercise of the commission's authority.\nARTICLE VIII\n(1) The commission shall promulgate rules establishing condi tions and procedures for\npublic inspection and copying of its information and official records, except such\ninformation and records involving the privacy of individuals and insurers' trade\nsecrets. The commission may promulgate additional rules under which  it may make\navailable to federal and state agencies, including law enforcement agencies, records,\nand information otherwise exempt from disclosure, and may enter into agreements\nwith such agencies to receive or exchange information or records subject to\nnondisclosure and confidentiality provisions.\n(2) Except as to privileged records, data, and information, the laws of any compacting\nstate pertaining to confidentiality or nondisclosure shall not relieve any compacting\nstate commissioner of the duty to disclose any relevant records, data, or information\nto the commission; provided, that disclosure to the commission shall not be deemed\nto waive or otherwise affect any confidentiality requirement; and further provided,\nthat, except as otherwise expressly provi ded in this compact, the commission shall\nnot be subject to the compacting state's laws pertaining to confidentiality and\nnondisclosure with respect to records, data, and information in its possession.\nConfidential information of the commission shall remai n confidential after such\ninformation is provided to any commissioner.\n(3) The commission shall monitor compacting states for compliance with duly adopted\nbylaws, rules, including uniform standards, and operating procedures. The\ncommission shall notify any  noncomplying compacting state in writing of its\nnoncompliance with commission bylaws, rules, or operating procedures. If a\nnoncomplying compacting state fails to remedy its noncompliance within the time\nspecified in the notice of noncompliance, the compac ting state shall be deemed to\nbe in default as set forth in Article XIV.\n(4) The commissioner of any state in which an insurer is authorized to do business, or is\nconducting the business of insurance, shall continue to exercise his or her authority\nto oversee the market regulation of the activities of the insurer in accordance with\nthe provisions of the state's law. The commissioner's enforcement of compliance\nwith the compact is governed by the following provisions:\n(a) With respect to the commissioner's m arket regulation of a product or\nadvertisement that is approved or certified to the commission, the content of\nthe product or advertisement shall not constitute a violation of the provisions,\nstandards, or requirements of the compact except upon a final or der of the\ncommission, issued at the request of a commissioner after prior notice to the\ninsurer and an opportunity for hearing before the commission;\n(b) Before a commissioner may bring an action for violation of any provision,\nstandard, or requirement of  the compact relating to the content of an\nadvertisement not approved or certified to the commission, the commission,\nor an authorized commission officer or employee, must authorize the action.\nHowever, authorization pursuant to this paragraph does not req uire notice to\nthe insurer, opportunity for hearing, or disclosure of requests for authorization\nor records of the commission's action on such requests.\nARTICLE IX\nThe commission shall attempt, upon the request of a member, to resolve any disputes or\nother issues that are subject to this compact and which may arise between two (2) or more\ncompacting states, or between compacting states and noncompacting states, and the\ncommission shall promulgate an operating procedure providing for resolution of such\ndisputes.\nARTICLE X\n(1) Insurers and third -party filers seeking to have a product approved by the\ncommission shall file the product with, and pay applicable filing fees to, the\ncommission. Nothing in this compact shall be construed to restrict or otherwise\nprevent an insurer from filing its product with the insurance department in any state\nwherein the insurer is licensed to conduct the business of insurance, and such filing\nshall be subject to the laws of the states where filed.\n(2) The commission shall establi sh appropriate filing and review processes and\nprocedures pursuant to commission rules and operating procedures.\nNotwithstanding any provision herein to the contrary, the commission shall\npromulgate rules to establish conditions and procedures under which the\ncommission will provide public access to product filing information. In establishing\nsuch rules, the commission shall consider the interests of the public in having\naccess to such information, as well as protection of personal medical and financial\ninformation and trade secrets, that may be contained in a product filing or\nsupporting information.\n(3) Any product approved by the commission may be sold or otherwise issued in those\ncompacting states for which the insurer is legally authorized to do business.\nARTICLE XI\n(1) Not later than thirty (30) days after the commission has given notice of a\ndisapproved product or advertisement filed with the commission, the insurer or\nthird-party filer whose filing was disapproved may appeal the determination to a\nreview panel appointed by the commission. The commission shall promulgate rules\nto establish procedures for appointing such review panels and provide for notice and\nhearing. An allegation that the commission, in disapproving a product or\nadvertisement filed w ith the commission, acted arbitrarily, capriciously, or in a\nmanner that is an abuse of discretion or otherwise not in accordance with the law, is\nsubject to judicial review in accordance with Article III, Section (4).\n(2) The commission shall have authori ty to monitor, review, and reconsider products\nand advertisement subsequent to their filing or approval upon a finding that the\nproduct does not meet the relevant uniform standard. Where appropriate, the\ncommission may withdraw or modify its approval after  proper notice and hearing,\nsubject to the appeal process in Section (1) above.\nARTICLE XII\n(1) The commission shall pay or provide for the payment of the reasonable expenses of\nits establishment and organization. To fund the cost of its initial operations , the\ncommission may accept contributions and other forms of funding from the National\nAssociation of Insurance Commissioners, compacting states, and other sources.\nContributions and other forms of funding from other sources shall be of such a\nnature that the independence of the commission concerning the performance of its\nduties shall not be compromised.\n(2) The commission shall collect a filing fee from each insurer and third -party filer\nfiling a product with the commission to cover the cost of the operat ions and\nactivities of the commission and its staff in a total amount sufficient to cover the\ncommission's annual budget.\n(3) The commission's budget for a fiscal year shall not be approved until it has been\nsubject to notice and comment as set forth in Article VII of this compact.\n(4) The commission shall be exempt from all taxation in and by the compacting states.\n(5) The commission shall not pledge the credit of any compacting state, except by and\nwith the appropriate legal authority of that compacting state.\n(6) The commission shall keep complete and accurate accounts of all its internal\nreceipts, including grants and donations, and disbursements of all funds under its\ncontrol. The internal financial accounts of the commission shall be subject to the\naccounting procedures established under its bylaws. The financial accounts and\nreports including the system of internal controls and procedures of the commission\nshall be audited annually by an independent certified public accountant. Upon the\ndetermination of the commission, but no less frequently than every three (3) years,\nthe review of the independent auditor shall include a management and performance\naudit of the commission. The commission shall make an annual report to the\nGovernor and legislature of the  compacting states, which shall include a report of\nthe independent audit. The commission's internal accounts shall not be confidential\nand such materials may be shared with the commissioner of any compacting state\nupon request; provided, however, that any  work papers related to any internal or\nindependent audit and any information regarding the privacy of individuals and\ninsurers' proprietary information, including trade secrets, shall remain confidential.\n(7) No compacting state shall have any claim to or ownership of any property held by\nor vested in the commission or to any commission funds held pursuant to the\nprovisions of this compact.\nARTICLE XIII\n(1) Any state is eligible to become a compacting state.\n(2) The compact shall become effective and binding upon legislative enactment of the\ncompact into law by two (2) compacting states; provided, the commission shall\nbecome effective for purposes of adopting uniform standards for, reviewing, and\ngiving approval or disapproval of, products filed with the commission that satisfy\napplicable uniform standards only after twenty-six (26) states are compacting states\nor, alternatively, by states representing greater than forty percent (40%) of the\npremium volume for li fe insurance, annuity, disability income, and long -term care\ninsurance products, based on records of the National Association of Insurance\nCommissioners for the prior year. Thereafter, it shall become effective and binding\nas to any other compacting state upon enactment of the compact into law by that\nstate.\n(3) Amendments to the compact may be proposed by the commission for enactment by\nthe compacting states. No amendment shall become effective and binding upon the\ncommission and the compacting states unle ss and until all compacting states enact\nthe amendment into law.\nARTICLE XIV\n(1) Withdrawal.\n(a) Once effective, the compact shall continue in force and remain binding upon\neach and every compacting state; provided, that a compacting state may\nwithdraw fro m the compact (\"withdrawing state\") by enacting a statute\nspecifically repealing the statute which enacted the compact into law.\n(b) The effective date of withdrawal is the effective date of the repealing statute.\nHowever, the withdrawal shall not apply to  any product filings approved or\nself-certified, or any advertisement of such products, on the date the repealing\nstatute becomes effective, except by mutual agreement of the commission and\nthe withdrawing state, unless the approval is rescinded by the wit hdrawing\nstate as provided in paragraph (e) of this section.\n(c) The commissioner of the withdrawing state shall immediately notify the\nmanagement committee in writing upon the introduction of legislation\nrepealing this compact in the withdrawing state.\n(d) The commission shall notify the other compacting states of the introduction of\nsuch legislation within ten (10) days after its receipt of notice thereof.\n(e) The withdrawing state is responsible for all obligations, duties, and liabilities\nincurred through the effective date of withdrawal, including any obligations,\nthe performance of which extend beyond the effective date of withdrawal,\nexcept to the extent those obligations may have been released or relinquished\nby mutual agreement of the commission and  the withdrawing state. The\ncommission's approval of products and advertisement prior to the effective\ndate of withdrawal shall continue to be effective and be given full force and\neffect in the withdrawing state, unless formally rescinded by the withdrawi ng\nstate in the same manner as provided by the laws of the withdrawing state for\nthe prospective disapproval of products or advertisement previously approved\nunder state law.\n(f) Reinstatement following withdrawal of any compacting state shall occur upon\nthe effective date of the withdrawing state reenacting the compact.\n(2) Default.\n(a) If the commission determines that any compacting state has at any time\ndefaulted (\"defaulting state\") in the performance of any of its obligations or\nresponsibilities under this compact, the bylaws, or duly promulgated rules or\noperating procedures, then, after notice and hearing as set forth in the bylaws,\nall rights, privileges, and benefits conferred by this compact on the defaulting\nstate shall be suspended from the effe ctive date of default as fixed by the\ncommission. The grounds for default include but are not limited to failure of a\ncompacting state to perform its obligations or responsibilities, and any other\ngrounds designated in commission rules. The commission shal l immediately\nnotify the defaulting state in writing of the defaulting state's suspension\npending a cure of the default. The commission shall stipulate the conditions\nand the time period within which the defaulting state must cure its default. If\nthe defaulting state fails to cure the default within the time period specified by\nthe commission, the defaulting state shall be terminated from the compact and\nall rights, privileges, and benefits conferred by this compact shall be\nterminated from the effective date of termination.\n(b) Product approvals by the commission or product self -certifications, or any\nadvertisement in connection with such product, that are in force on the\neffective date of termination shall remain in force in the defaulting state in the\nsame manner as if the defaulting state had withdrawn voluntarily pursuant to\nSection (1) of this article.\n(c) Reinstatement following termination of any compacting state requires a\nreenactment of the compact.\n(3) Dissolution of Compact.\n(a) The compact dissolves effective upon the date of the withdrawal or default of\nthe compacting state which reduces membership in the compact to one (1)\ncompacting state.\n(b) Upon the dissolution of this compact, the compact becomes null and void and\nshall be of no further for ce or effect, and the business and affairs of the\ncommission shall be wound up and any surplus funds shall be distributed in\naccordance with the bylaws.\nARTICLE XV\n(1) The provisions of this compact shall be severable; and if any phrase, clause,\nsentence, or provision is deemed unenforceable, the remaining provisions of the\ncompact shall be enforceable.\n(2) The provisions of this compact shall be liberally construed to effectuate its\npurposes.\nARTICLE XVI\n(1) Other Laws.\n(a) Nothing herein prevents the enfo rcement of any other law of a compacting\nstate, except as provided in paragraph (b) of this section.\n(b) For any product approved or certified to the commission, the rules, uniform\nstandards, and any other requirements of the commission shall constitute the\nexclusive provisions applicable to the content, approval, and certification of\nsuch products. For advertisement that is subject to the commission's authority,\nany rule, uniform standard, or other requirement of the commission which\ngoverns the content of the advertisement shall constitute the exclusive\nprovision that a commissioner may apply to the content of the advertisement.\nNotwithstanding the foregoing, no action taken by the commission shall\nabrogate or restrict:\n1. The access of any person to state courts;\n2. Remedies available under state law related to breach of contract, tort, or\nother laws not specifically directed to the content of the product;\n3. State law relating to the construction of insurance contracts; or\n4. The authority of the Attorney General of the state, including but not\nlimited to maintaining any actions or proceedings, as authorized by law.\n(c) All insurance products filed with individual states shall be subject to the laws\nof those states.\n(2) Binding Effect of This Compact.\n(a) All lawful actions of the commission, including all rules and operating\nprocedures promulgated by the commission, are binding upon the compacting\nstates.\n(b) All agreements between the commission and the compacting states are\nbinding in accordance with their terms.\n(c) Upon the request of a party to a conflict over the meaning or interpretation of\ncommission actions, and upon a majority vote of the compacting states, the\ncommission may issue advisory opinions regarding the meaning or\ninterpretation in dispute.\n(d) In the event any provision of this compact exceeds the constitutional limits\nimposed on the legis lature of any compacting state, the obligations, duties,\npowers, or jurisdiction sought to be conferred by that provision upon the\ncommission shall be ineffective as to that compacting state, and those\nobligations, duties, powers, or jurisdiction shall rem ain in the compacting\nstate and shall be exercised by the agency thereof to which those obligations,\nduties, powers, or jurisdiction are delegated by law in effect at the time this\ncompact becomes effective.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=30277","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:00Z","sha256":"49e8f269dc440c666ff5ae36081805f4845b5a117bd25b8f469eefbafb0ff4c2","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.504","next":"us-ky/krs-304.510"},"notice":"GroundRules: Original legal text. Not legal advice."}