15 U.S.C. § 6754: Board of directors

Summary

Creates a 13-member board that will run and watch over the Association. The President appoints all members with the Senate’s OK and follows the steps in Senate Resolution 116 of the 112th Congress. The board includes 8 State insurance commissioners, 3 people with property-and-casualty producer licensing experience, and 2 people with life-or-health producer licensing experience. The President names one of the commissioners as chair at first until the board picks a chair from among the commissioners. Before picking commissioners, the President asks the States, through the NAIC, for recommended names; the NAIC has 15 business days to reply but the President can appoint anyway if it does not. No more than 4 commissioner appointees may be in the same political party. If fewer than 8 current commissioners accept, the President may pick former commissioners who must not work for or have financial ties to the insurance industry (except owning policies or annuities). If a commissioner stops being a commissioner, they leave the board. "State insurance commissioner" means the person who is the main insurance regulator for a State. Board members usually serve 2-year terms. The President sets some initial terms to 1 year: four of the first commissioners (no more than two from one party), one of the property-and-casualty members, and one of the life-or-health members. Members can be reappointed. Initial appointments had to be made no later than 90 days after January 12, 2015. The board meets when the chair calls it, when 5 members ask in writing, or as the bylaws say. A majority of all members is a quorum, and votes need a majority of those present. Private-sector appointees may not see confidential complaint, investigation, or discipline records about producers. The board must set and enforce an ethics code that bans unethical acts, conflicts where a decision would have a clear financial effect on someone or their family, taking gifts tied to position, making political donations for the Association, or hiring lobbyists for the Association. Board members get no pay for serving, but the Association may pay travel and per diem at federal employee rates.

Title 15, §6754

Commerce and Trade, Source: USLM XML via OLRC

(a)Establishment

There is established a board of directors of the Association, which shall have authority to govern and supervise all activities of the Association.

(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.

(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 Congress, of whom—

(A)8 shall be State insurance commissioners 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 member to serve as the chairperson of the Board;

(B)3 shall have demonstrated expertise and experience with property and casualty insurance producer licensing; and

(2)State insurance regulator representatives

(A)Recommendations

Before making any appointments pursuant to paragraph (1)(A), the President shall request 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 appointment to the Board, fewer than 8 State insurance commissioners have accepted appointment to the Board, the President may appoint the remaining State insurance commissioner Board members, as required under paragraph (1)(A), of the appropriate political party as required under subparagraph (B), from among individuals who are former State insurance commissioners.

(ii)Limitation

A former State insurance commissioner appointed as described in clause (i) may not be employed by or have any present direct or indirect financial interest in any insurer, insurance producer, or other entity in the insurance industry, other than direct or indirect ownership of, or beneficial interest in, an insurance policy or annuity contract written or sold by an insurer.

(D)Service through term

If a Board member appointed under paragraph (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 subparagraph (B) or (C) of paragraph (1), the President may seek recommendations for candidates 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 person who serves in the position in State government, 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 designated by the President at the time of the nomination of the subject Board members for— (i)

(ii)1 of the Board members initially appointed under paragraph (1)(B); and

(iii)1 of the Board members initially appointed under paragraph (1)(C).

(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 vacancy 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 successive terms.

(e)Initial appointments

The appointment of initial Board members shall be made no later than 90 days after January 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 chairperson by not fewer than 5 Board members; or

(C)as otherwise provided by the bylaws of the Association.

(2)Quorum required

A majority of all Board members shall constitute a quorum.

(3)Voting

Decisions of the Board shall require the approval 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 subparagraphs (B) and (C) of subsection (c)(1) shall not have access to confidential information received by the Association in connection with complaints, investigations, or disciplinary proceedings involving insurance producers.

(h)Ethics and conflicts of interest

The Board shall issue and enforce an ethical conduct code to address permissible and prohibited activities of Board members and Association officers, employees, agents, or consultants. The code shall, at a minimum, include provisions that prohibit any Board member or Association officer, employee, agent or consultant from—

(1)engaging in unethical conduct in the course of performing Association duties;

(2)participating in the making or influencing the making of any Association decision, the outcome of which the Board member, officer, employee, agent, or consultant knows or had reason to know would have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on the person or a member of the immediate family of the person;

(3)accepting any gift from any person or entity 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 consistent 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.

Notes & Related Subsidiaries

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 amendment 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 amendment of this subchapter by Pub. L. 114–1.

§6754 Board of Directors

Summary

Title 15, §6754

Notes & Related Subsidiaries

Editorial Notes

References in Text

Prior Provisions

Citations & Metadata