AN ACT TO CONFORM PROVISIONS OF NORTH CAROLINA SURPLUS LINES INSURANCE LAWS TO THE FEDERAL NONADMITTED AND REINSURANCE REFORM ACT OF 2010, TO STREAMLINE APPLICATIONS FOR COMMERCIAL PURCHASERS, TO PREVENT ANY LOSS OF PREMIUM TAX REVENUE TO THE STATE, AND TO CONFORM THE DEFINITION OF RISK RETENTION GROUP TO FEDERAL LAW. Summarized in Daily Bulletin 3/10/11, 4/14/11, 5/3/11, 5/18/11, and 6/2/11. Enacted June 13, 2011. Effective July 21, 2011.
Summary date: Jun 13 2011 - View summary
Summary date: Jun 2 2011 - View summary
House committee substitute makes the following changes to 4th edition. Changes the effective date to July 21, 2011 (was, June 1, 2011).
Summary date: May 18 2011 - View summary
House committee substitute makes the following changes to 3rd edition. Deletes proposed GS 58-21-3, which authorized the Commissioner of Insurance (Commissioner) to enter into a cooperative agreement or interstate agreement or compact for specified purposes. Amends GS 58-21-10 to delete the definition for the term reciprocal state.
Provides that the provisions of Article 21 of GS Chapter 58 apply to transactions in which North Carolina is the home state of the insured. Deletes the provision in subsection (f) of GS 58-21-65 that provides criteria to be met to allow a person licensed as a surplus lines licensee in a state bordering North Carolina to be licensed as a surplus licensee under Article 21 of GS Chapter 58; states only that a nonresident surplus lines licensee will be licensed in accordance with Article 33 of GS Chapter 58.
Amends GS 58-21-85 (Surplus lines tax) to clarify that gross premiums charged, minus any return premiums, for surplus lines insurance on an insured whose home state is North Carolina are subject to a premium receipts tax of 5%. Provides that any premium tax collected is to be retained by this state when portions of the properties, risks, or exposures reside in other states that have not entered into a compact or reciprocal allocation procedure with North Carolina.
Summary date: May 3 2011 - View summary
Senate committee substitute makes the following changes to 2nd edition.
Amends proposed GS 58-21-4 to include the collection of the premium tax under GS 58-21-85 among the ministerial functions for which the Commissioner of Insurance may contract with nongovernmental entities. Permits the NAIC or other entity with whom the Commissioner contracts to charge a reasonable fee to the insurer, insured, or other appropriate person for the functions performed. Directs the Revenue Laws Study Committee to study the potential impact of a state compact in a nonadmitted insurance multistate agreement, as detailed, and requires reporting to the 2012 General Assembly.
Summary date: Apr 14 2011 - View summary
Senate committee substitute makes the following changes to 1st edition.
Amends proposed GS 58-21-3 to add that the Commissioner of Insurance (Commissioner) is also authorized to enter into a cooperative agreement or interstate agreement or compact to facilitate the collection, allocation, and disbursement of premium taxes attributable to nonadmitted insurance, provide for uniform methods of allocation and reporting among nonadmitted insurance risk classifications, and share information relating to nonadmitted insurance premium taxes among states. Also authorizes the Commissioner to enter the NAIC Nonadmitted Insurance and Multi-State Agreement or other interstate agreement to carry out the Nonadmitted and Reinsurance Reform Act of 2010. Makes organizational changes.
Deletes sections amending GS 58-21-85, which required licensed persons to collect and pay the Commissioner 5% of the gross premiums charged for surplus lines insurance, and GS 58-28-5(b), which concerned multistate risks and premium taxes. Adds a section to amend the definition of risk retention group in GS 58-22-10(10) as follows: the term means any corporation or other limited liability association that, among other things, (1) is only owned by persons comprising the membership of the risk retention group and who receive insurance from the group or (2) is solely owned by an organization whose (a) only members comprise the risk retention group and (b) whose only owners comprise the risk retention group and receive insurance by the group (clarifies current language). Makes other clarifying changes.
Makes a conforming change to the bill title to reflect bill content.
Summary date: Mar 10 2011 - View summary
Identical to H 299, filed 3/9/11.
Enacts new GS 58-21-3 to authorize the Commissioner of Insurance (Commissioner) to enter into cooperative or interstate agreements to establish additional and alternative nationwide uniform eligibility requirements to be applied to nonadmitted insurers (an insurer not licensed to do business as an insurer in North Carolina) domiciled in another state or United States territory.
Enacts new GS 58-21-4 to authorize the Commissioner to utilize databases and contract with nonagricultural entities to carry out the provisions of the federal Nonadmitted and Reinsurance Reform Act of 2010 (NRRA) and assist in performing the Commissioner's duties.
Amends GS 58-21-10 to add definitions for the following terms as used in Article 21 of GS Chapter 58: (1) affiliate, (2) affiliated group, (3) control, and (4) reciprocal state. Modifies the definition for nonadmitted insurer to provide that it does not include a risk retention group, as defined in GS 58-22-10(10).
Enacts new GS 58-21-11 to provide that with respect to an insured, home state means either (1) the state where an insured has its principal place of business, or if an insured is an individual, the individual's principal residence or (2) if 100% of the risk is located outside of the state that is the principal place of business or residence, then home state means the state to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated. Provides that when two or more insureds from an affiliated group are named as insureds on a single nonadmitted insurance contract, then home state means the home state of the member of the affiliated group that has the largest percentage of premium attributed to it under the insurance contract.
Amends GS 58-21-15 to add as a required condition for the placement of surplus lines by a surplus lines licensee that each insurer be authorized to write the kind of insurance in its domiciliary jurisdiction.
Enacts GS 58-21-16 to provide a streamlined application process for a surplus lines licensee trying to procure or place nonadmitted insurance in this state for an exempt commercial purchaser, providing the specified conditions are met. Adds definitions for the following terms as used in this section: (1) exempt commercial purchaser and (2) qualified risk manager. Makes dollar amount adjustments to these provisions effective on the fifth January 1 that occurs after the date this statute is enacted and each fifth January 1 occurring thereafter. Also provides that dollar amounts addressed in this statute are to be adjusted to reflect the percentage change for each five-year period in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the U.S. Department of Labor.
Enacts GS 58-21-17 to provide that nothing in Article 21 of GS Chapter 58 prohibits a surplus lines licensee from placing surplus lines insurance with alien insurers listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the National Association of Insurance Commissioners (NAIC).
Amends GS 58-21-20(a) regarding a surplus lines licensee's placement of coverage with a nonadmitted insurer to prohibit the Commissioner from making an affirmative finding of acceptability of the placement with a nonadmitted insurer when the nonadmitted insurer's capital and surplus is less than $4.5 million.
Amends GS 58-21-85 to require that every person licensed under Article 21 collect and pay to the Commissioner 5% of the gross premiums charged in addition to the full amount of gross premiums charged by the insurer for insurance. Specifies guidelines governing the computation of the tax. Prohibits the surplus lines licensee from rebating any part of the tax for any reason. Provides additional details covering the collection and allocation of the tax. Authorizes the Commissioner to enter the NAIC Nonadmitted Insurance Multi-State Agreement for the purpose of carrying out the NRRA.
Amends GS 58-28-5(b) to provide that all of the provisions in Article 21 of GS Chapter 58, which relate to apportionment of premium taxes when there are multistate risks, apply to the payment of the premium tax in this subsection.
Makes conforming changes to GS 58-21-35 and GS 58-21-65(a).
Effective June 1, 2011.