Vermont § 8505 - Rules and operating procedures; rulemaking functions of the Commission and opting out of uniform standards

§ 8505. Rules and operating procedures; rulemaking functions of the Commission and opting out of uniform standards

• (a) Rulemaking authority. The Commission shall adopt reasonable rules, including uniform standards, and operating
  procedures in order to effectively and efficiently achieve the purposes of this compact.
  Notwithstanding the foregoing, in the event the Commission exercises its rulemaking
  authority in a manner that is beyond the scope of the purposes of this chapter, or
  the powers granted under this chapter, such an action by the Commission shall be invalid
  and have no force and effect. (b) Rulemaking procedure. Rules and operating procedures shall be made pursuant to a rulemaking process that
  conforms to the Model State Administrative Procedure Act of 1981 as amended, as may
  be appropriate to the operations of the Commission. Before the Commission adopts a
  uniform standard, the Commission shall give written notice to the relevant state legislative
  committees in each compacting state responsible for insurance issues of its intention
  to adopt the uniform standard. The Commission in adopting a uniform standard shall
  consider fully all submitted materials and issue a concise explanation of its decision. (c) Effective date and opt out of a uniform standard. A uniform standard shall become effective 90 days after its adoption by the Commission
  or such later date as the Commission may determine; provided, however, that a compacting
  state may opt out of a uniform standard as provided in this section. “Opt out” means
  any action by a compacting state to decline to adopt or participate in an adopted
  uniform standard. All other rules and operating procedures, and amendments to such
  rules and operating procedures, shall become effective as of the date specified in
  each rule, operating procedure, or amendment. (d) Opt out procedure. (1) A compacting state may opt out of a uniform standard, either by legislation or rule
  duly adopted by the insurance department under the compacting state’s Administrative
  Procedure Act. The Vermont Department of Financial Regulation may adopt an emergency
  rule for the purposes of this subsection. If a compacting state elects to opt out
  of a uniform standard by rule, it must give written notice to the Commission not later
  than 10 business days after the uniform standard is adopted, or at the time the state
  becomes a compacting state and finds that the uniform standard does not provide reasonable
  protections to the citizens of the state, given the conditions in the state. The Commissioner
  shall make specific findings of fact and conclusions of law, based on a preponderance
  of the evidence, detailing the conditions in the state that warrant a departure from
  the uniform standard and determining that the uniform standard would not reasonably
  protect the citizens of the state. The Commissioner must consider and balance the
  following factors and find that the conditions in the state and needs of the citizens
  of the state outweigh both the intent of the legislature to participate in, and the
  benefits of, an interstate agreement to establish national uniform consumer protections
  for the products subject to this chapter and the presumption that a uniform standard
  adopted by the Commission provides reasonable protections to consumers of the relevant
  product. (2) 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
  care insurance products by expressly providing for such opt out in the enacted compact,
  and such an opt out shall not be treated as a material variance in the offer or acceptance
  of any state to participate in this compact. Such an opt out shall be effective at
  the time of enactment of this compact by the compacting state and shall apply to all
  existing uniform standards involving long-term care insurance products and those subsequently
  adopted. (e) Effect of opt out. (1) If a compacting state elects to opt out of a uniform standard, the uniform standard
  shall remain applicable in the compacting state electing to opt out until such time
  as the opt out legislation is enacted into law or the opt out rule becomes effective. (2) Once the opt out of a uniform standard by a compacting state becomes effective as
  provided under the laws of that state, the uniform standard shall have no further
  force and effect in that state unless and until the legislation or regulation implementing
  the opt out is repealed or otherwise becomes ineffective under the laws of the state.
  If a compacting state opts out of a uniform standard after the uniform standard has
  been made effective in that state, the opt out shall have the same prospective effect
  as provided under section 8512 of this chapter for withdrawals. (f) Stay of uniform standard. If a compacting state has formally initiated the process of opting out of a uniform
  standard by rule, and while the regulatory opt out is pending, the compacting state
  may petition the Commission, at least 15 days before the effective date of the uniform
  standard, to stay the effectiveness of the uniform standard in that state. The Commission
  may grant a stay if it determines the regulatory opt out is being pursued in a reasonable
  manner and there is a likelihood of success. If a stay is granted or extended by the
  Commission, the stay or extension thereof may postpone the effective date by up to
  90 days, unless affirmatively extended by the Commission, provided a stay may not
  be permitted to remain in effect for more than one year unless the compacting state
  can show extraordinary circumstances that warrant a continuance of the stay, including
  the existence of a legal challenge that prevents the compacting state from opting
  out. A stay may be terminated by the Commission upon notice that the rulemaking process
  has been terminated. (g) Not later than 30 days after a rule or operating procedure is adopted, any person
  may file a petition for judicial review of the rule or operating procedure, provided
  that the filing of such a petition shall not stay or otherwise prevent the rule or
  operating procedure from becoming effective unless the court finds that the petitioner
  has a substantial likelihood of success. The court shall give deference to the actions
  of the Commission consistent with applicable law and shall not find the rule or operating
  procedure to be unlawful if the rule or operating procedure represents a reasonable
  exercise of the Commission’s authority. (Added 2005, No. 70, § 2; amended 2021, No. 105 (Adj. Sess.), § 275, eff. July 1, 2022.)