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.