Bill Summary for S 615 (2013-2014)

Summary date: 

Apr 2 2013

Bill Information:

View NCGA Bill Details2013-2014 Session
Senate Bill 615 (Public) Filed Tuesday, April 2, 2013
A BILL TO BE ENTITLED AN ACT TO INCREASE THE FAIRNESS AND EQUITY OF PROPERTY INSURANCE RATE MAKING IN NORTH CAROLINA BY REQUIRING THAT CERTAIN PROPERTY INSURANCE DATA BE MADE AVAILABLE TO THE PUBLIC; BY PROVIDING THE COMMISSIONER WITH THE AUTHORITY TO ORDER A DECREASE IN RATES IN A PROPERTY INSURANCE RATE-MAKING PROCEEDING; BY LIMITING THE COMMISSION ON POLICIES ISSUED UNDER THE BEACH PLAN TO TEN PERCENT; BY INCREASING THE BEACH PLAN'S NONRECOUPABLE ASSESSMENT CAP; AND BY EXEMPTING PREMIUMS PAID FOR BEACH PLAN POLICIES FROM THE GROSS PREMIUM TAX.
Intro. by Brown.

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Bill summary

Amends GS Chapter 58 by creating new Part 9 (Property Insurance Rate Clarity). Provides that each insurer authorized to conduct property insurance business in NC must annually submit to the Department of Insurance (Department) computations of the total amount of direct incurred losses, the number of policies in force, and the direct earned premiums for the prior calendar year.  This information will be reported by rate territory. Provides that for this Part, property insurance also includes condo insurance, dwelling fire policies, renters or tenants insurance, and mobile home and manufactured housing property insurance.

Also requires each insurer authorized to conduct homeowners insurance in NC to annually submit to the Department the total amount of direct incurred losses and the number of policies in force, by rate territory, for the prior calendar year for perils including fire, wind and hail, and all other perils. Requires each insurer authorized to transact property insurance in NC to provide information required pursuant to GS 58-10-340(a) for calendar years 2007 through 2012.  Based on this information the Department will compile aggregate totals and post such totals to the Department website no later than December 1, 2014. The Commissioner of Insurance (Commissioner) can waive, modify, or extend for an additional time period, for good cause, the reporting requirements imposed by this act. Describes what constitutes good cause and how to demonstrate it.  Failing to timely comply with the reporting requirements triggers a notice by the Department and any delay in complying past the 90th day after notice and hearing will require an insurer to pay a civil penalty of $2,500 per month to the Commissioner, until the date of compliance. Establishes that information reported to the Department pursuant to this act is considered a trade secret, as found in GS 66-152, and will be treated as confidential information.

The above changes are effective when the act becomes law and applies to the 2013 calendar year.

Amends GS 58-36-20, establishing that in the event the Commissioner finds that the proposed rates are excessive, the Commissioner will issue an order disapproving the filing and will specify the appropriate rate level that may be used (was, will specify the overall rates that may be used by the members of the Bureau instead of the rates proposed by the Bureau filing).

Amends GS 58-45-35 by adding a new subsection GS 58-45-35(f), providing that the North Carolina Insurance Underwriting Association (Association) will provide in its plan of operation that commission rates paid to agents/brokers for policies issued under this section will not exceed 10% of the written premium. Plans of operation must be amended to meet this statute by October 1, 2013.

Amends GS 58-45-47, raising the nonrecoupable assessment cap to $1.2 billion (was, $1 billion).

Amends GS 58-45-1, excluding gross premium taxes from the stated intent of the General Assembly to exempt fire and lightning taxes from State and federal taxation to the fullest extent permitted by law. Amends GS 58-45-80, (Premium taxes to be paid through the Association), changing the title to Exemption from premium taxes. Reorganizes section to exempt insurance written under this Article from the gross premium tax levied in GS Chapter 105, Article 8B. Amends GS 105-228.5, making technical changes and providing that this section does not apply to insurance policies written under GS Chapter 58 Article 45. Changes noted in this paragraph are effective for taxable years beginning on or after July 1, 2013.

Includes a severability clause.

Section 1 of this act is effective when it becomes law and applies to the 2013 calendar year. Part V of this act is effective for taxable years beginning on or after July 1, 2013. The remainder of this act becomes effective July 1, 2013.

 

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