AN ACT TO INCORPORATE PORTIONS OF THE NAIC'S INSURANCE FRAUD PREVENTION MODEL ACT LANGUAGE INTO NORTH CAROLINA'S INSURANCE LAWS AND TO MODIFY CRIMINAL PENALTIES ASSOCIATED WITH CERTAIN INSURANCE FRAUD STATUTES, AS RECOMMENDED BY THE DEPARTMENT OF INSURANCE.
Part I. Captive Insurance
Amends GS 58-10-395, concerning changes to a captive insurance company’s plan of operation, to make GS 58-10-345(f), making information confidential, applicable to information filed under this statute.
Amends GS 58-10-415(c) to allow the Commissioner of Insurance (Commissioner) to grant an exemption from the statute (concerning annual audits and statement of actuarial opinion) if compliance would constitute a financial or organizational hardship upon the insurer.
Amends GS 58-10-430 by allowing the Commissioner to conduct a financial analysis of information submitted to or obtained by the Commissioner and provides that the captive insurance company does not have to pay the expense of the analysis. Makes conforming changes.
Amends GS 58-10-340 by adding and defining governing board as it applies to captive insurance companies, as the board of directors or officials possessing similar authority. Amends various statutes to reflect this change.
Amends GS 58-10-380 by requiring at least one member of the governing board be a state resident; removes requirements that were dependent on how the company was formed.
Amends GS 58-10-380 to allow a captive insurance company’s organizational documents (was, articles of incorporation or bylaws) to authorize a quorum of its governing board to consist of no fewer than one-third of the fixed or prescribed number.
Amends GS 105-228.4A to exclude two or more protected cell captive insurance companies or special purpose captive insurance companies with a cell or series structure that are under common ownership from those that are taxed as single captive insurance companies. Amends GS 105-228.4A further to provide that the aggregate amount of tax payable under the statute by a special purpose captive insurance company with a cell or series structure with 10 or more cells or series may not be less than $10,000 and may not exceed the lesser of (1) $100,000 plus $5,000 multiplied by the number of cells or series over 10 and (2) $200,000. Effective for premium taxes imposed for taxable years beginning on or after January 1, 2020.
Amends GS 105-228.4A by adding an exemption from prorated premium taxes for the year in which the redomestication occurs and the premium taxes imposed for the calendar year following the redomestication if the specified conditions are met. Effective for premium taxes imposed for taxable years beginning on or after January 1, 2019, and expires for taxable years beginning on or after January 1, 2022.
Part II. Holding Company Act
Amends GS 58-19-10 to amend the investments that a domestic insurer may make to include investments in securities of affiliates as well as subsidiaries.
Part III. Surplus Lines
Repeals GS 58-21-40(b)(3), which required the North Carolina Surplus Lines Association (NCSLA) to file with the Commissioner an annually updated list of surplus lines licensees.
Amends GS 58-21-75 by amending the records that are to be kept by surplus lines licensees to require records to include a copy of the compliance agreement. Removes reference to the licensee’s office being in the state.
Repeals GS 58-21-80, which required surplus lines licensees to file quarterly reports on specified information. Makes conforming changes to GS 58-21-35.
Amends GS 58-21-95 to allow the Commissioner to take specified disciplinary actions upon failure to pay the stamping fee; removes the authority to act upon removal of the surplus lines licensee’s office from the state.
Part IV. Align State law to the NAIC Model Law
Amends GS 58-30-71 (immunity and indemnification of the receiver and employees) as follows. Clarifies who is entitled to protection under the statute. Provides that a receiver’s contractors have official immunity. Extends immunity for all listed individuals so that it applies to any matters that have been subject to review by the court after notice and opportunity to be heard if the act error, or omission was not disapproved or disallowed by the court. Makes conforming changes.
Part V. Consent to Rate
Amends GS 58-36-30 by adding that a rate exceeding the rate promulgated by the Bureau may be charged on any specific risk if the higher rate is charged in accordance with rules adopted by the Commissioner. Makes additional clarifying and technical changes.
Part VI. Fast Act
Amends GS 58-39-26 by adding that an insurance institution or agent is not required to provide the privacy notice annually if: (1) the insurance institution or agent provides nonpublic personal information only in accordance with the specified provisions and (2) the insurance institution or agent has not changed its policies and practices with regard to disclosing nonpublic personal information from those that were disclosed in the most recent disclosure sent to consumers.
Part VII. Expedited External Review
Amends GS 58-50-82 by amending the four options available when a request is eligible for external review and the covered person’s treating provider requesting the service that is the subject of the external review has certified the request. Effective October 1, 2019, and applies to requests for expedited review submitted on or after that date.
Amends GS 58-50-89 by removing the hold harmless provision for medical professionals rendering advice to the Commissioner.
Part VIII. Exclusive Provider Benefit Plans
Amends GS 58-50-56 by removing the provision allowing a person enrolled in a preferred provider benefit plan to obtain covered health care services from a provider who does not participate in the plan. Makes the preferred provider benefit plan coverage limitations subject to GS 58-3-190 (coverage required for emergency care).
Enacts new GS 58-50-56.1 providing that if (1) a contract between an insurer and a health care provider offering an exclusive provider benefit plan is terminated by the provider or by the insurer, or benefits or coverage provided by the insurer are terminated because of a change in the terms of provider participation in an insurer's exclusive provider benefit plan and (2) an insured is undergoing treatment from the provider for an ongoing special condition on the date of termination, then: (1) upon termination of the contract by the insurer or receipt by the insurer of written notification of termination by the provider, the insurer must notify the insured of the termination and of the right to continuation of coverage of treatment by the provider and (2) the insurer must allow an insured to elect to continue to be covered with respect to the treatment by the terminated provider for the ongoing special condition during a transitional period. Sets out transitional periods in general, for scheduled surgery, organ transplantation, or inpatient care; for pregnancy; and for terminal illness.
Requires each exclusive provider benefit plan offered by an insurer to provide transition coverage to individuals who (1) are newly covered under an exclusive provider benefit plan because the individual's employer has changed benefit plans and (2) are undergoing treatment from a provider for an ongoing special condition.
Allows an insurer to condition coverage of continued treatment on six specified terms and conditions. Requires insurers to include a description of an insured’s rights in its evidence of coverage and summary plan description.
Allows the Department of Insurance to adopt temporary rules to implement the statute.
Part IX. Bail Bondsman
Amends GS 58-71-1 which defines terms for use in Article 71, Bail Bondsmen and Runners, by adding and defining premium.
Amends GS 58-71-45 to provide that a license to a bail bondsman or a runner authorizes the licensee to act until the license is lapsed (in addition to when it is suspended or revoked). Requires that a license be returned to the Commissioner within 10 working days of the lapse, suspension, or revocation.
Amends GS 58-71-165 by amending and adding to the items that must be included in the bail bondman’s monthly report.
Amends GS 58-71-167 to require that a copy of the specified agreement and memorandum between the principal and surety for deferral of premium payments be provided to the principal (was, provided only upon request).
Part X. State and Fire Rescue Commission
Amends GS 58-78-5 to allow the State and Fire Rescue Commission to adopt, modify, or repeal any rules and regulations necessary to carry out Article 78 (State and Fire Rescue Commission).
Part XI. Prepaid Health Plan
Amends GS 58-93-20 to make a clarifying change.
Amends GS 58-93-30 to set the specified fees at the listed amounts instead of capping the allowable fee at that amount.
Amends GS 58-93-60 by requiring the Commissioner to notify DHHS before examining a PHP and requires providing DHHS with the results of the examination.
Amends GS 58-93-90 by requiring the Commissioner to provide DHHS with notice before applying for an order to rehabilitate or liquidate a PHP; allows for notice as soon as possible after seeking the order if prior notice is not possible.
Amends GS 58-93-95 to require that a copy of a notice that there are grounds to deny, suspend, or revoke a license for a PHP be given to DHHS.
Amends a statutory cross-reference in GS 58-90-120.
Part XII. Application to NC Self-Insurance Security Association
Amends GS 97-170 to require that a copy of an application for licensure as a self-insurer be filed with the NC Self-Insurance Security Association at the same time as the application is filed.
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