Bill Summary for H 308 (2021-2022)

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Summary date: 

Mar 15 2021

Bill Information:

View NCGA Bill Details2021
House Bill 308 (Public) Filed Monday, March 15, 2021
AN ACT TO LIMIT CESSION OF INSURANCE PREMIUMS TO THE REINSURANCE FACILITY OVER A FIVE-YEAR PERIOD.
Intro. by Warren, Howard, Moffitt.

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Bill summary

Amends GS 58-37-40 to require the North Carolina Motor Vehicle Reinsurance Facility's (Facility) plan of operation to provide that for insurers that cede more than 75% of their direct written motor vehicle insurance premiums in North Carolina to the Facility, the ceding expense allowance paid to that member must not exceed 20% of the total North Carolina motor vehicle insurance premiums the member writes on ceded business. Effective January 1, 2026.

Amends GS 58-37-45, which requires when a company receives a risk which it does not elect to retain, that the company must follow the procedures for ceding the risk that was established by the plan of operation. Adds that the plan of operation must limit cession to the Facility to no more than 95% of any company's direct written motor vehicle insurance premiums in the state unless the company has the specific approval of the Commissioner of Insurance. Effective January 1, 2022. Amends the statute again, effective January 1, 2023, to decrease that percentage to 90%; amends the statute again in 2024 to decrease the percentage to 85%; amends the statute again in 2025 to reduce the percentage to 80%; amends the statute again in 2026 to reduce the percentage to 75%.

Appropriates $5,000 for 2021-22 from the General Fund to the North Carolina Rate Bureau to support costs associated with notifying insurers in this State who will be affected by this act. Effective July 1, 2021.