AN ACT TO MAKE VARIOUS CHANGES TO THE INSURANCE LAWS OF NORTH CAROLINA, TO AMEND THE INSURANCE RATE-MAKING LAWS, AND TO REVISE HIGH SCHOOL INTERSCHOLASTIC ATHLETICS. SL 2023-133. Enacted October 3, 2023. Effective October 3, 2023, except as otherwise provided.
Bill Summaries: all (2023-2024 Session)
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Bill S 452 (2023-2024)Summary date: Oct 5 2023 - View summary
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Bill S 452Summary date: Sep 22 2023 - View summary
Conference report to the 5th edition makes the following changes.
Part XII.
Changes the effective date to the coverage changes set forth in GS 58-37-35(b)(1) from October 1, 2025, to January 1, 2025.
Part XIV.
Amends GS 58-50-130 by reducing those who may receive stop loss, catastrophic, or reinsurance coverage to small employers employing more than twelve (was, more than five) eligible employees. Changes the effective date from October 1, 2023 to October 1, 2024.
Part XV.
Changes the effective date to the coverage changes to GS 58-45-41(a) from July 1, 2023 to 30 days after the act becomes law.
Part XVI.
Amends GS 58-36-10 regarding the factors to consider in making and using insurance rates to require due consideration to be given to investment income from capital and surplus.
Amends GS 58-36-43 to provide that an insurance company cannot condition the acceptance or renewal of a policy, any underwriting criteria, or any rating criteria, upon the acceptance by the policyholder of any optional automobile or homeowners' enhancements authorized by the statute (previously phrased to combine underwriting rating criteria).
Repeals GS 58-36-43(b), which requires insurers to utilize statistical codes outlined by their statistical organization in reporting premiums and losses resulting from program enhancements filed with the Commissioner of Insurance (Commissioner) pursuant to the statute.
Amends GS 58-36-65 to set forth a new definition for conviction used in the statute regarding classifications of drivers and safe driving incentive plans, as the term was previously defined by statutory cross-reference that has since been repealed.
Amends GS 58-36-65 to require that for convictions for which four or more points under a Safe Driving Incentive Plan are assigned, other than convictions for speeding in excess of the posted speed limit, subclassification plan charges must be applied to a policy for a period of five policy years.
Amends subsection (k) of GS 58-36-65 to allow the subclassification plan to provide for premium surcharges for insureds having less than eight years' driving experience as licensed drivers for insureds receiving a drivers license for the first time on or after January 1, 2025. Makes conforming changes to restrict the same authority for insureds having less than three years' driving experience as licensed drivers for insureds receiving a driver's license for the first time on or before January 1, 2025.
Enacts subsection (k1) to GS 58-36-65 to provide for drivers subject to subsection (k) to be eligible for an inexperienced safe driver discount after three full years of driving experience. Details eligibility requirements, including having no at-fault accidents or convictions (including prayers for judgment continued) on the driver's driving record, which precludes the driver from discount eligibility. Eligibility terminates after eight years of licensure or upon an at-fault accident or conviction. Requires any discount to be filed by the Rate Bureau with the Commissioner. Effective October 1, 2023.
Amends GS 58-36-75(f) to expand the time period required for a clean driving record for a subclassification plan to assess no premium surcharge or points for specified traffic violations and convictions, from three to five years immediately preceding, as stated. Effective October 1, 2023.
Directs the Department of Insurance to conduct public outreach regarding the impact to policyholders and both experienced and inexperienced drivers, including publication on the Department's website. Permits coordination with the insurance industry and the Rate Bureau.
Effective January 1, 2025.
Part XVII.
Makes organizational changes to Article 29E of GS Chapter 115C by dividing it into multiple parts: definitions (Part 1), Oversight of Interscholastic Athletic Activities (Part 2), Memorandum of Understanding (Part 3).
Enacts new term, associated entity, which means a foundation, association, corporation, limited liability company, partnership, or other nonprofit entity that meets any of five listed criteria.
Amends GS 115C-407.55 (pertaining to the rules for High School Interscholastic Athletic Activities) as follows. Prevents the State Board of Education (Board) from delegating the adoption of the student participation rules (Rules), health and safety rules, appeals rules, fees rules, reporting rules, and administering organization rules to an administering organization. Prevents an administering organization from altering or expanding the Rules, the appeals rules, fees rules, reporting rules, administering organization rules, or the health and safety rules. Adds nine required provisions to the Rules, including academic standards, enrollment requirements, attendance requirement, medical eligibility requirements, biological participation requirements as required by GS 115C-407.59, recruiting limitations and hardship exceptions that may be granted by the appeals board established by the act (discussed below), and rules on student amateur status requirements, including rules related to use of a student's name, image and likeness.
Specifies that the penalty rules only apply to infractions for violation of student participation and gameplay rules. Specifies that violations cannot result in monetary penalties of any kind.
Specifies that the appeals rules have to provide due process to parents, students and participating schools for enforcement of the rules through hearings held before an independent appeals board. Directs the Superintendent of Public Instruction (SPI) to appoint an independent appeals board. Provides for notice. Provides that a student and that student's parent must be allowed to appeal a penalty resulting from the application of any rule that restricts an individual student from participating in a season, game, or series of games, and must be provided a written copy of the rule that is the basis for the penalty. Gives the independent appeals board the authority to grant hardship exceptions.
Amends the reporting rules to require a process for reporting intimidation or harassment of the participating school or its employees or students by an administering organization, in addition to other matters provided in the section.
Amends GS 115C-407.60 (administration and enforcement of high school interscholastic athletic activity rules), as follows. Substitutes the SPI as the person authorized to enter into MOU’s with nonprofits to enforce Article 29E. Specifies that all MOU’s have to include the requirements set forth in new GS 115C-407.61. Specifies that an administering organization is a public body for purposes of State public meetings law. Makes conforming GS 115C-407.50’s definition of administering organization to account for SPI’s new contracting power.
Enacts GS 115C-407.61 which specifies the required contents of the MOU’s discussed above. Requires contracting nonprofit administrator to publish and provide for notice and comment for any rules it drafts pursuant to any rulemaking authority delegated to it by the Board and sets forth a process for rule adoption. Requires the nonprofit to make certain materials available on its website at no cost. Sets forth requirements pertaining to board membership, adoption of an ethics policy, procedures relating to public records and student records, entering into certain contracts with participating schools, reduction of annual fees by certain amounts, retention of a certain amount of net tournament proceeds, refraining from certain listed activities, and annual reports on specified matters. Authorizes the Superintendent to terminate any MOU for noncompliance with Article 29E or the terms of the MOU. In the event of termination, the nonprofit organization must return to each participating school a pro rata share of the funds paid by that school for the year as provided in the participating school's contract with the organization. Requires the administering organization to agree to be audited annually by a reputable independent auditor that meets, at a minimum, the standards required by the Local Government Commission for certification to audit local government accounts as provided in GS 159-34. Allows the SPI to renew a memorandum of understanding with an administering organization for an additional term of four years. Provides for written notice in cases of nonrenewal.
Makes conforming changes to GS 115C-407.65 (pertaining to the conduct of high school interscholastic athletic activities by public school units). Enacts GS 115C-407.70 (pertaining to middle school interscholastic athletic activities) requiring the Board to adopt the same student participation, student health and safety rules, penalty rules, appeals rules, administrative rules, gameplay rules, fee rules, and reporting rules that apply to high school interscholastic activities. Requires administration of those rules by the SPI. Requires public school units that participate in middle school interscholastic athletics to abide by those rules. Organizes these two statutory provisions into Part 4 of the Article.
Enacts new Part 5, pertaining to public school unit reports. Sets forth annual reporting requirements to the Superintendent and Board by public school units with one or more participating schools in interscholastic activities. Requires the SPI to provide a summary of the reports and each individual school unit report to the specified NCGA committee by no later than October 15 annually. Amends GS 143-318.10 to include the nonprofit administering entities as entities whose meetings must be open to the public under the open meetings act, makes organizational changes.
Applies beginning with the 2024-2025 school year and thereafter.
Part XVIII.
Amends GS 115C-12(23) (pertaining to the power of the Board to adopt rules pertaining to interscholastic activities) to delete requirements relating to concussions, emergency action plans, sex designation on athletic teams, the right to bring an action for harm caused by those sex designations, and the Board’s duty to monitor schools for compliance in adopting emergency action plans. Recodifies those provisions into new GS 115C-407.57 (rules on concussions and head injuries); new GS 115C-407.58 (emergency action plans); new GS 11C-407.59 (athletic eligibility).
Makes conforming changes to GS 115C-548.1 (athletic teams-private religious schools); and GS 115C-556.1 (athletic teams-qualified nonpublic schools).
Part XIX
Requires the Board to review and adopt new or revised temporary rules on interscholastic athletics for use in the 2024-2025 school year in accordance with the requirements of the act, by no later than January 15, 2024. Specifies submission requirements of temporary rules to the specified NCGA Committee.
Requires the Board to adopt new or revised permanent rules for use beginning with the 2025-2026 school year and thereafter.
Requires the SPI, in consultation with any administering organization, to study and make findings to the specified NCGA committee by April 1, 2024 on (1) whether an administering organization should be responsible for overseeing the conduct of middle school interscholastic athletics for public school units and (2) factors that should be considered in (i) home school students' participation in interscholastic athletics, including how to address insurance and liability issues for those students while participating in interscholastic athletics, (ii) cooperative innovative high school students' participation in interscholastic athletics, and (iii) nonpublic schools. Requires the SPI to set up workgroups.
Requires all public school units to submit the first annual interscholastic athletic report to the SPI and the Board by no later than July 15, 2025, and must include data from the 2019-2020, 2020-2021, 2021-2022, 2022-2023, 2023-2024, and 2024-2025 school years.
Part XX.
Makes conforming changes to the definition of public body under GS 143-318.10(b) to include administrative organizations as defined in GS 115C-407.50(1). Effective July 1, 2024.
Makes conforming and organizational changes. Makes conforming changes to the act’s titles.
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Bill S 452 (2023-2024)Summary date: Jun 28 2023 - View summary
House committee substitute to the 4th edition makes the following changes.
Part XII.
Changes the effective date to the coverage changes set forth in GS 58-37-35(b)(1) from October 1, 2025 to October 1, 2023.
Part XIII.
Amends the compliance date for a response for medical records requested under GS 44-49(b) to establish a medical debt lien on personal injury settlements, from within 120 days after receipt of the attorney’s request to 60 days after the receipt of the request.
Deletes Part XIV, which would have (1) amended GS 58-70-90 to add and define the term itemized accounting as it is used in Part 3 (Prohibited Practices by Collection Agencies Engaged in the Collection of Debts from Consumers) of Article 70 of GS Chapter 58 and amended GS 58-70-115 (unfair debt collection practices) to add a definition of itemized accounting and (2) amended GS 58-70-155 to narrow what authenticated business records must include under that statute.
Part XV.
Amends GS 58-45-41(a) (coverage limits for beach area property) to raise coverage limits as follows: for a building on habitational property, from $750,000 to $1 million; commercial property, from $3 million to $4 million; and the aggregate insurance for any freestanding structure or any building unit within multiple firewall divisions, from $6 million to $10 million on all interest at one risk. Effective and applies to contracts issued, amended, or renewed on or after July 1, 2023.
Makes organizational changes to account for deleted part.
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Bill S 452 (2023-2024)Summary date: Jun 21 2023 - View summary
House committee substitute to the 3rd edition makes the following changes.
Amends GS 20-279.15 by amending the conditions under which judgments are deemed satisfied, to include when, subject to a limit of $5,000 (was, $30,000 in current law and $60,000 in previous edition) because of bodily injury to or death of one person, the sum of $100,000 has been credited upon any judgment rendered in excess of that amount because of bodily injury to or death of two or more persons as the result of any one accident.
Further amends GS 20-309 as follows. Amends the provision applicable to policies of motor vehicle bodily injury liability insurance that binds the insurer by a final judgment taken by the insured against an uninsured motorist if the insurer as been served with a copy of summons, complaint, or other process in the action against the uninsured motorist by registered or certified mail, return receipt requested, or in any manner provided by law by adding that the insurer may also be issued a summons, complaint, or other process as an unnamed party and served by registered or certified mail, return receipt requested, or in any manner provided by law. Specifies that service outside of the statute of limitations is valid if the summons has been properly issued, preserved, and served under NC Rule of Civil Procedure 4. Provides that an uninsured motor vehicle includes an underinsured highway vehicle, meaning a highway vehicle with respect to the ownership, maintenance, or use of which, the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the total damages sustained by an individual seeking payment of benefits under the underinsured motorist bodily injury coverage (was, less than the applicable limits of underinsured motorist coverage for the vehicle involved in the accident and insured under the owner's policy). Amends the condition under which a highway vehicle will also be an underinsured highway vehicle for purposes of an underinsured motorist claim asserted by a person injured in accident where more than one person is injured, to be when all bodily injury liability bonds and insurance policies applicable to the highway vehicle at the time of the accident are exhausted and the total amount actually paid to that person from the exhaustion of the bodily injury liability bonds and insurance policies applicable to such highway vehicle at the time of the accident is less than the total damages sustained by the person seeking payment of benefits. Amends the provision specifying that a highway vehicle is not an underinsured motor vehicle for purposes of an underinsured motorist claim under an owner's policy insuring that vehicle unless the owner's policy insuring that vehicle provides underinsured motorist coverage with limits that are greater than that policy's bodily injury liability limits, by adding that, in such events the available underinsured motorist coverage is that amount of underinsured motorist coverage under the owner's policy insuring that vehicle which exceeds the policy's bodily injury liability limits. Amends the conditions under which exhaustion of underinsured motorist coverage for the purpose of any single claim is deemed to have occurred to include when either (1) the limits of liability per claim have been paid or tendered (was, paid) upon the claim or (2) by reason of multiple claims, the aggregate per occurrence limit of liability has been paid or tendered (was, paid). Deems underinsured motorist coverage to apply to the first dollar of a claim beyond amounts paid to the claimant under the exhausted liability policy or policies applicable to the underinsured highway vehicle at the time of the accident. Adds that the amount of underinsured motorist coverage applicable to any claim for benefits must not be reduced by a setoff or credit against any coverage, including liability insurance, except for workers' compensation coverage to the extent provided for under the statute. Provides that if a claimant is an insured under the underinsured motorist coverage on separate or additional policies, the total amount of underinsured motorist coverage applicable to the claimant is the sum of the limits of the claimant's underinsured motorist coverages as determined by combining the highest limit available under each policy and must not be reduced by a setoff against any coverage, including liability insurance, except for workers' compensation coverage to the extent provided for under the statute. Deletes the provision setting the limit of underinsured motorist coverage applicable to any claim as the difference between the amount paid to the claimant under the exhausted liability policy or policies and the limit of underinsured motorist coverage applicable to the motor vehicle involved in the accident; also deletes the provision setting the limit when a claimant is an insured under the underinsured motorist coverage on separate or additional policies.
Adds the following new content.
Amends GS 44-49 to require that a physician, dentist, nurse, hospital, corporation, or other person entitled to a lien upon any sums recovered as damages for personal injury in any civil action to provide an itemized statement, hospital record, or medical report within 120 days of when it is requested (previously no time frame was specified).
Amends GS 58-70-90 by adding and defining the term itemized accounting as it is used in Part 3 (Prohibited Practices by Collection Agencies Engaged in the Collection of Debts from Consumers) of Article 70 of GS Chapter 58. Defines itemized accounting as an accounting of the amount claimed to be owed, which must include at least (1) if the debt has not been charged off--the amount of principal; each additional amount added for any interest, fees, or charges; and the identity of the person imposing each additional amount and (2) if the debt has been charged-off, the charge-off balance, any post-charge off interest and fees, and any post charge-off payments and credits. Makes additional technical changes. Amends GS 58-70-115, which prohibits collection agencies from collecting or attempting to collect any debt by using unfair practices, amending one of the listed types of unfair practices to include when the collection agency is a debt buyer or acting on behalf of one, bringing suit or initiating an arbitration proceeding against the debtor, or otherwise attempting to collect on the debt without access to (was, without) the specified types of documentation and verification of the amount of the debt owed. Amends GS 58-70-155 by amending the listed items to be considered authenticated business records sufficient to establish the amount and nature of the debt that must be filed before entry of a default judgment or summary judgment against a debtor in a complaint initiated by a debt buyer to include an itemized accounting instead of the amount of the original debt; also removes an itemization of charges and fees claimed to be owed, the original charge off balance (or an explanation of how the balance was calculated if the balance has not been charged off), an itemization of post charge off additions, the date of last payment, and the amount of interest claimed and the basis for the interest charged.
Amends GS 58-50-130 by expanding upon those who may receive stop loss, catastrophic, or reinsurance coverage to include small employers employing more than five (was, more than 20) eligible employees. Applies to contracts issued, renewed, or amended on or after October 1, 2023.
Makes additional technical changes throughout the bill. Changes the act's long title.
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Bill S 452 (2023-2024)Summary date: Apr 27 2023 - View summary
Senate committee substitute to the 2nd edition makes the following changes.
Further amends GS 20-279.21 by amending the required content of the notice that a motor vehicle insurer must provide when issuing and renewing a policy in specified conditions, to require notifying the insured that: (1) the insured is required to purchase uninsured motorist bodily injury coverage, uninsured motorist property damage coverage, and underinsured motorist bodily injury coverage (was, if applicable, underinsured motorist bodily injury coverage) and (2) the insured's underinsured motorist bodily injury coverage limits (was, if applicable) must be equal to the highest limits of bodily injury liability coverage for any one vehicle insured under the policy unless the insured elects to purchase greater or lesser limits for underinsured motorist bodily injury coverage. Makes technical changes.
Amends GS 20-279.25 to allow proof of financial responsibility to be evidenced by the certificate of the State Treasurer that the person has deposited with the Treasurer $150,000 (was, $85,000) in cash, or securities. Makes conforming changes.
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Bill S 452 (2023-2024)Summary date: Apr 26 2023 - View summary
Senate committee substitute to the 2nd edition will be summarized.
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Bill S 452 (2023-2024)Summary date: Apr 25 2023 - View summary
Senate committee substitute to the 1st edition makes the following changes. Deletes the entirety of Part II, proposed amendments to GS 58-3-179, which would have required health benefit plans to provide coverage for colorectal cancer exams and lab tests for cancer, for any non-symptomatic covered individual who is: (1) at least 45 (was, 50) years old or (2) less than 45 (was, 50) years old and at high risk for colorectal cancer.
Clarifies that both GS 58-48-20 (definitions) and GS 58-48-35 (powers and duties of the NC Insurance Guaranty Association), as amended by the act, are effective October 1, 2023.
Deletes proposed changes to GS 20-279.21(b)(4) that would have changed the definition of uninsured motor vehicle from when a motorist’s coverage is less than the applicable limits of underinsured motorist coverage for the vehicle involved in the accident and insured under the owner's policy (the “Coverage Standard”) to when coverage is less than the total damages sustained by an individual seeking payment of benefits and all related changes.
Deletes proposed changes to GS 20-279.25, which would have increased the amount of money or securities required as proof of financial responsibility under GS 20-279.25 from $85,000 to $125,000. Makes organizational changes.
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Bill S 452 (2023-2024)Summary date: Mar 30 2023 - View summary
Part I.
Amends GS 58-21-10, which sets out the definitions for terms as they are used in Article 21, Surplus Lines Act, as follows. Excludes from the definition of surplus lines insurance: (1) insurance of property and operations of railroads engaged in interstate or foreign commerce and (2) personal and commercial automobile liability insurance required to be written by licensed insurers under GS 58-37-5, excluding excess automobile liability insurance. Amends the definition of wet marine and transportation insurance by adding that it includes ocean marine insurance. Makes additional technical and clarifying changes.
Amends GS 58-21-40 by adding to the functions of the North Carolina Surplus Lines Association providing other services to its members that are identical or related to the association’s purpose.
Amends GS 58-21-85 by amending the due date of the premium receipts tax paid by a surplus lines licensee so that payment is now due: (1) for risk purchasing groups, at the same time the licensee files a quarterly report with the Commissioner of Insurance (Commissioner) or (2) for surplus lines insurers receiving invoices from the North Carolina Surplus Lines Stamping Office SLIP system, 30 days after the end of each quarter.
Part II.
Amends GS 58-3-179 to require health benefit plans to provide coverage for colorectal cancer exams and labs test for cancer, for any non-symptomatic covered individual who is: (1) at least 45 (was, 50) years old or (2) less than 45 (was, 50) years old and at high risk for colorectal cancer. Applies to insurance contracts issued, renewed, or amended on or after October 1, 2023.
Part III.
Amends the following statutes by changing the name of the ThomsonMicromedex DrugDex to the Micromedex DrugDex System: GS 58-51-59, GS 58-65-94, and GS 58-67-78.
Part IV.
Amends GS 58-48-20, which sets out the definitions for terms as they are used in Article 48, the Insurance Guaranty Association Act, by making clarifying and technical changes.
Amends GS 58-48-35 the North Carolina Insurance Guaranty Association’s (Association) obligation as follows. The Association is obligated, under current law, to the extent of the covered claims that exist before the determination of insolvency and arising within 30 days after the determination of insolvency, or before the policy expiration date if less than 30 days after the determination, or before the insured replaces the policy or causes its cancellation, if done within 30 days of the determination. Increases the upper limit, so that this obligation includes only the amount of each covered claim that exceeds $50 and is less than $500,000 (was, $300,000). Makes conforming changes. Specifies that the Association’s lack of obligation in an amount in excess of the obligation of the insolent insurer under the policy from which the claim arises include an applicable specific and aggregate limit. Applies to covered claims arising from orders of liquidation becoming final on or after October 1, 2023.
Part V.
Amends GS 58-19-30, as follows. Adds the following to the standards that apply to transactions within an insurance holding company system to which an insurer subject to registration is a party. (1) If the Commissioner determines that the continued operation of an insurer subject to Article 19 (Insurance Holding Company System Regulatory Act) is hazardous to the insurer's policyholders, creditors, or the general public, then the Commissioner may require the insurer to choose between securing and maintaining either a deposit held by the Commissioner or a bond with respect to any contract or agreement entered into by the insurer. Sets out additional requirements for the duration and amount of the bond or deposit. (2) Provides that all of the insurer’s records and data (as defined) held by an affiliate remain the property of the insurer and are subject to the insurer’s control. Require an affiliate holding an insurer’s records and data to: (a) ensure, at no additional cost to the insurer, that the records and data the insurer controls are identifiable and segregated, or readily capable of segregation, from all other persons' records and data; (b) provide to any receiver of the insurer, upon request: a complete set of all records and data of any type that pertain to the insurer's business, access to the operating systems on which the records and data are maintained, and the software that runs those systems; and (c) if the affiliate defaults under a lease or other agreement, secure a waiver of any landlord lien or other encumbrance to provide the insurer access to all records and data. (3) Makes the insurer’s premiums or other funds collected by or held by an affiliate the exclusive property of the insurer and subject to the insurer’s control. Makes any right of offset in the event an insurer is placed into receivership subject to Article 30 (Insurers Supervision, Rehabilitation, and Liquidation) of GS Chapter 58.
Amends GS 58-19-30(b), which sets out transactions involving a domestic insurer and any person in its holding company system that must give the specified notice to the Commissioner before entering into the transaction. Makes the following changes to the provisions in (b)(4) applicable to all management agreements, service contracts, tax allocation agreements, or cost-sharing arrangements.
Requires defining records and data (was, books and records) of the insurer to include all information developed or maintained under or related to the contract or agreement that are otherwise the insurer’s property (was, developed or maintained under or related to the agreement). Defines records and data.
Requires specifying that all of the insurer’s records and data (was, books and data) remain the insurer’s property and are subject to the insurer’s control; adds that the records and data must be held, at no additional cost to the insurer, in a manner that ensures that the records and data controlled by the insurer are identifiable and segregated, or readily capable of such, from all other persons’ records and data.
Requires including standards for termination of a contract with and without cause.
Adds the instances providing indemnification of the insurer, to also include when the affiliate violates the specified terms.
Amends the conditions that must be met if the insurer is placed in supervision, conservatorship, or receivership (was, in receivership), or seized by the Commissioner as follows. (1) Requires all of the insurer’s rights under the contract or agreement to extend to the receiver, conservator, or Commissioner. (2) Requires all of the insurer’s books and data to be, at no additional cost to the receiver or Commissioner, identifiable and segregated, or readily capable of such, from all other persons’ records and data. (3) Adds requirements for the insurer’s records and data that are being turned over to the receiver or Commissioner upon request. (4) Requires the affiliate, at the direction of the receiver or Commissioner, to make available all employees required to maintain the continued performance of operations or services of the insurer deemed essential by the receiver or Commissioner.
Requires specifying that the affiliate has no automatic right to terminate the agreement if the insurer is placed in supervision, conservatorship or receivership, or seized by the Commissioner (was, placed in receivership).
Requires specifying the following with respect to the performance of services after termination of the contract or agreement if the insurer is placed in supervision, conservatorship, receivership, or seized by the Commissioner: (1) that the affiliate must, at the direction of the conservator or Commissioner, provide services deemed essential after termination of the contract or agreement; (2) that the contract or agreement must specify the minimum period of time essential services must be performed after termination; and (3) that, until the insured is released by the receiver, Commissioner, or a court order, performance of essential services after the contract or agreement’s termination must be provided without regard to pre-receivership unpaid fees, if the affiliate continues to receive timely payment for post-receivership services rendered.
Requires specification that if the insurer is placed in supervision, conservatorship, receivership, or is seized by the Commissioner, the affiliate will: (1) maintain any infrastructure necessary to the performance of the contract or agreement and (2) until the insured is released, make any infrastructure necessary to the performance of the contract or agreement available to the receiver or Commissioner, if the affiliate continues to receive timely payment for post-receivership services rendered.
Requires specifying that if the insurer is placed into receivership and portions of the insurer's policies or contracts are eligible for coverage by one or more guaranty associations, then, subject to the receiver's authority over the insurer, the affiliate's specified commitments extend to the affected guaranty associations.
Further amends the statute by adding the following.
Subjects any affiliate party to an agreement or contract with a domestic insurer that is subject to (b)(4) (as discussed above) to the jurisdiction of any supervision, seizure, conservatorship, or receivership proceedings against the insurer and to the authority of the Commissioner or any supervisor, conservator, rehabilitator, or liquidator for the insurer appointed for the purpose of interpreting, enforcing, and overseeing the affiliate’s obligations under the agreement or contract to perform services for the insurer that (1) are an integral part of the insurer’s operations or (2) essential to the insurer’s ability to fulfill its obligations under insurance policies. Allows the Commissioner to require that an agreement or contract under (b)(4) for the provision of these services specify that the affiliate consents to the jurisdiction.
Applies to contracts issued, renewed, or amended on or after October 1, 2023.
Part VI.
Amends GS 58-30-1 by removing an outdated cross-reference.
Part VII.
Enacts new GS 58-30-262, providing as follows.
Defines large deductible policy as including: (1) A combination of one or more workers' compensation policies and endorsements issued to an insured and contracts or security agreements entered into between the insurer and the insured in which the insured has agreed with the insurer to do either of the following: (a) pay directly the initial portion of any claim under the policy up to a specified dollar amount, or the expenses related to any claim or (b) reimburse the insurer for its payment of any claim or related expenses under the policy up to the specified dollar amount of the deductible. (2) Any policy which contains an aggregate limit on the insured's liability for all deductible claims in addition to a per claim deductible limit. Provides that the primary purpose and distinguishing characteristic of a large deductible policy is the shifting of a portion of the ultimate financial responsibility under the large deductible policy to pay claims from the insurer to the insured, even though the obligation to initially pay claims may remain with the insurer. (3) Any policy with a deductible of $100,000 or greater. Sets out exclusions from the term.
Provides that the statute applies to workers’ compensation large deductible policies insuring workers’ compensation liabilities under the Workers’ Compensation Act issued by an insurer subject to an order of liquidation that has become final in the state of entry, whether the liquidation order is entered in this State or a reciprocal state. Applicability does not extend to claims funded by the Association or a foreign guaranty association net of the deductible unless (d) applies. Subsection (d) requires large deductible polices to be administered in accordance with their terms, except to the extent that those terms conflict with this statute. Requires all large deductible claims resulting from the handling or administration of one or more covered claims of a claimant to be turned over to the Association for handling and administration or be turned over to the foreign guaranty association in the state where the claim is pending for handling and administration. Provides that to the extent the insured funds or pays the deductible claim, the funding or payment of a deductible claim directly or to the Association or a foreign guaranty association by or on behalf of the insured extinguishes any obligations of the liquidator, the Association, or the foreign guaranty association to pay the claim. Prohibits making any charge or claim against the liquidator, the Association, or a foreign guaranty association on the basis of the funding or payment of a deductible claim by or on behalf of an insured.
Provides that to the extent the Association or a foreign guaranty association pays any deductible claim for which the insurer would have been entitled to reimbursement from the insured, the Association or foreign guaranty association is entitled to the full amount of the reimbursement and available collateral as provided for under this statute to the extent necessary to reimburse the Association or the foreign guaranty association. Provides that to the extent that the Association or a foreign guaranty association pays a deductible claim that is not reimbursed either from collateral or by payments by an insured, or incurred expenses in connection with large deductible policies that are not reimbursed under this statute, the Association or a foreign guaranty association is entitled to assert a claim for those amounts in the liquidation proceeding in this State or in the domiciliary state.
Requires the Association or a foreign guaranty association to collect reimbursements owed for deductible claims and take all commercially reasonable actions to collect those reimbursements, unless otherwise agreed to with the liquidator. Sets out additional billing requirements and process for collecting late payments.
Requires the liquidator of the insurer to use collateral, when available, to secure the insured’s obligation to fund or reimburse deductible claims or other secured obligations. Sets out the order to paying claims against the collateral. Requires liquidators of the insurer to draw down collateral to the extent necessary in the event that the insurer fails to: (1) perform its funding or payment obligations under any large deductible policy, (2) pay deductible claim reimbursements within the specified time frames, (3) pay amounts due the estate for pre-liquidation obligations, (4) timely fund any other secured obligation, or (5) timely pay expenses. Sets out when excess collateral may be returned to the insured.
Applies to insurance contracts issued, renewed, or amended on or after October 1, 2023.
Part VIII.
Amends GS 58-33-5 by making a technical correction.
Part IX.
Amends GS 58-56-26 (pertaining to responsibilities of an insurer using a third-party administrator) to allow for an insurer to conduct an audit of a third party administrator on site or virtually.
Part X.
Amends GS 58-2-161 (prohibiting false statements to procure or deny benefits of insurance policy or certificate) by changing the punishment from a Class H felony to the following: (1) if the amount of the claim for payment or other benefits is less than $100,000 a violation is punishable as a Class H felony and (2) if the amount of the claim for payment or other benefits is $100,000 or more, a violation is punishable as a Class C felony. Makes technical changes.
Enacts new GS 58-33A-93 specifying that any person who willfully and knowingly conducts business as a public adjuster in violation of Article 33A of GS Chapter 58 is guilty of a Class 1misdemeanor, unless the person’s conduct is authorized by other parts of the article.
Effective December 1, 2023, and applies to offenses committed on or after that date.
Part XI.
Amends GS 58-3-149 pertaining to unlawful conduct related to certificates of insurance to include a bar on knowingly preparing, issuing, requesting, or requiring a certificate of insurance that contains information not contained in the underlying insurance policy. Effective October 1, 2023.
Part XII.
Amends GS 58-3-145 (pertaining to solicitation, negotiation, or payment of insurance policy premiums) to broaden the definition of what types of payment an insurer may accept to include any form of electronic tender defined in GS 147-86.20. Deletes current requirement that the insure pay for any fees charged by the credit card/debit card company in connection with the transaction and instead adds that an insurer or insurance produce that accepts electronic payment by credit or debit card may charge a convenience fee not to exceed 4% of the electronic payment. Makes technical changes. Effective October 1, 2023.
Part XIII.
Amends the proof of financial responsibility definition to require proof of ability to respond to liability for motor vehicle policies in the State under GS 20-279.1 from $30,000 to $50,000 for personal injury/death for one person, from $60,000 to $100,000 for personal injury/death to two or more people in any accident, and from $25,000 to $50,000 for property damage. Makes conforming changes to GS 20-279.5 (security required unless evidence of insurance), GS 20-279.15 (payment sufficient to satisfy requirements), GS 20-279.21 (definition motor vehicle liability policy), GS 20-281 (liability insurance prerequisite to engaging in business), and GS 58-37-35 (pertaining to the functions and administration of the NC Motor Vehicle Reinsurance Facility) to reflect new minimum liability limits.
Amends GS 20-279.21 (definition of motor vehicle policy) to also change the definition of uninsured motor vehicle from when a motorist’s coverage is less than the applicable limits of underinsured motorist coverage for the vehicle involved in the accident and insured under the owner's policy (the “Coverage Standard”) to when coverage is less than the total damages sustained by an individual seeking payment of benefits. Removes the Coverage Standard throughout the section. In instances where an underinsured motorist claim is asserted by a person injured in an accident where more than one person is injured, replaces the Coverage Standard with language directing that a highway vehicle will be considered an underinsured highway vehicle in that instance if all bodily injury liability bonds and insurance policies applicable to such highway vehicle at the time of the accident are exhausted and the total amount paid to the claimant is less than the total damages sustained by the person seeking payment of benefits under the subdivision. Amends language clarifying that underinsured motorist coverage does not kick in unless that coverage is greater than bodily injury coverage to provide that the available underinsured motorist coverage is the amount of underinsured motorist coverage under the owner’s policy that exceeds the policy’s bodily injury limits. Expands the triggering events for when liability coverage has been exhausted for underinsured motorist coverage to when it has been paid or tendered. (Currently, just paid.) Specifies that the amount of underinsured motorist coverage applicable to any claim for benefits under the subdivision will not be reduced by a setoff or credit against any coverage, including liability insurance, except for workers' compensation coverage to the extent provided for in the statute. If a claimant is an insured under the underinsured motorist coverage on separate or additional policies, specifies that the total amount of underinsured motorist coverage applicable to the claimant is the sum of the limits of the claimant's underinsured motorist coverages as determined by combining the highest limit available under each policy and will not be reduced by a setoff against any coverage, including liability insurance, except for workers' compensation coverage to the extent provided for in the statute. Deletes language relating to the limits of underinsured motorist coverage. Makes conforming and technical changes.
Increases the amount of money or securities required as proof of financial responsibility under GS 20-279.25 from $85,000 to $125,000.
Amends GS 58-37-35 (pertaining to the functions and administration of the NC Motor Vehicle Reinsurance Facility) to increase uninsured motorist coverage from $30,000 to $50,000 per person and from $60,000 to $100,000 per accident for bodily injury and from $25,000 to $50,000 for property damage.
Effective October 1, 2025, and applies to policies issued, amended, or renewed on or after that date.