§ 58-91-35. Rules and operating procedures: rule-making functions of the Commission and opting out of uniform standards.
§ 58‑91‑35. Rulesand operating procedures: rule‑making functions of the Commission andopting out of uniform standards.
(a) Rule‑MakingAuthority. The Commission shall promulgate reasonable rules, includinguniform standards, and operating procedures in order to effectively andefficiently achieve the purposes of this Compact. Notwithstanding theforegoing, in the event the Commission exercises its rule‑makingauthority in a manner that is beyond the scope of the purposes of this Article,or the powers granted in this Article, then that action by the Commission shallbe invalid and have no force and effect.
(b) Rule‑MakingProcedure. Rules and operating procedures shall be made pursuant to a rule‑makingprocess that conforms to the Model State Administrative Procedure Act of 1981as amended, as may be appropriate to the operations of the Commission. Beforethe Commission adopts a uniform standard, the Commission shall give writtennotice to the relevant state legislative committee in each compacting stateresponsible for insurance issues of its intention to adopt the uniformstandard. The Commission in adopting a uniform standard shall consider fullyall submitted materials and issue a concise explanation of its decision.
(c) Effective Date andOpt Out of a Uniform Standard. A uniform standard shall become effective 90days after its promulgation by the Commission or such later date as theCommission may determine except that a compacting state may opt out of auniform standard as provided in this Article. "Opt out" shall bedefined as any action by a compacting state to decline to adopt or participatein a promulgated uniform standard. All other rules and operating procedures,and amendments to the rules and operating procedures, shall become effective asof the date specified in each rule, operating procedure, or amendment.
(d) Opt Out Procedure. A compacting state may opt out of a uniform standard, either by legislationor regulation duly promulgated by the insurance department under the compactingstate's administrative procedure act. If a compacting state elects to opt outof a uniform standard by regulation, it must (i) give written notice to theCommission no later than 10 business days after the uniform standard ispromulgated, or at the time the state becomes a compacting state and (ii) findthat the uniform standard does not provide reasonable protections to thecitizens of the state, given the conditions in the state. The Commissionershall make specific findings of fact and conclusions of law, based on apreponderance of the evidence, detailing the conditions in the state thatwarrant a departure from the uniform standard and determining that the uniformstandard would not reasonably protect the citizens of the state. TheCommissioner must consider and balance the following factors and find that theconditions in the state and needs of the citizens of the state outweigh:
(1) The intent of thelegislature to participate in, and the benefits of, an interstate agreement toestablish national uniform consumer protections for the products subject tothis Article; and
(2) The presumption thata uniform standard adopted by the Commission provides reasonable protections toconsumers of the relevant product.
Notwithstanding the foregoing,a compacting state may, at the time of its enactment of this Compact,prospectively opt out of all uniform standards involving long‑term careinsurance products by expressly providing for the opt out in the enactedCompact, and the opt out shall not be treated as a material variance in theoffer or acceptance of any state to participate in this Compact. The opt outshall be effective at the time of enactment of this Compact by the compactingstate and shall apply to all existing uniform standards involving long‑termcare insurance products and those subsequently promulgated.
(e) Effect of Opt Out. If a compacting state elects to opt out of a uniform standard, the uniformstandard shall remain applicable in the compacting state electing to opt outuntil such time the opt out legislation is enacted into law or the regulationopting out becomes effective. Once the opt out of a uniform standard by acompacting state becomes effective as provided under the laws of that state,the uniform standard shall have no further force and effect in that stateunless and until the legislation or regulation implementing the opt out isrepealed or otherwise becomes ineffective under the laws of the state. If acompacting state opts out of a uniform standard after the uniform standard hasbeen made effective in that state, the opt out shall have the same prospectiveeffect as provided under G.S. 58‑91‑70 for withdrawals.
(f) Stay of UniformStandard. If a compacting state has formally initiated the process of optingout of a uniform standard by regulation, and while the regulatory opt out ispending, the compacting state may petition the Commission, at least 15 daysbefore the effective date of the uniform standard, to stay the effectiveness ofthe uniform standard in that state. The Commission may grant a stay if itdetermines the regulatory opt out is being pursued in a reasonable manner andthere is a likelihood of success. If a stay is granted or extended by theCommission, the stay or extension thereof may postpone the effective date by upto 90 days, unless affirmatively extended by the Commission. A stay shall notbe permitted to remain in effect for more than one year unless the compactingstate can show extraordinary circumstances that warrant a continuance of thestay, including the existence of a legal challenge that prevents the compactingstate from opting out. A stay may be terminated by the Commission upon noticethat the rule‑making process has been terminated.
(g) Not later than 30days after a rule or operating procedure is promulgated, any person may file apetition for judicial review of the rule or operating procedure. The filing ofa petition pursuant to this subsection shall not stay or otherwise prevent therule or operating procedure from becoming effective unless the court finds thatthe petitioner has a substantial likelihood of success. The court shall givedeference to the actions of the Commission consistent with applicable law andshall not find the rule or operating procedure to be unlawful if the rule oroperating procedure represents a reasonable exercise of the Commission'sauthority. (2005‑183,s. 1; 2009-382, s. 35.)