Senate amendment to the 4th edition makes the following changes.

Replaces the entirety of Section 7 (amending GS 143-138) with the following.

Authorizes the owners of a lawfully established building or structure damaged by the Helene flood event (historic flood event meeting or exceeding a 200-year flood) to replace or reconstruct the building or structure within the base floodplain to the same or lesser extent or volume as existed immediately before the flood event so long as the land is in the counties of Western NC designated in FEMA’s disaster declaration and there is a memorandum of agreement (MOA) in place between the State and FEMA. Requires the reconstruction to comply with the MOA and not preclude compliance with FEMA’s minimum floodplain management standards in all other parts of the State.  Only takes effect upon the execution of the MOA. Describes required terms in MOA. Expires three years from the effective date of the MOA, unless extended by mutual agreement or terminated earlier in accordance with the MOA.

Makes a local government’s ability to adopt ordinances regulating uses in flood hazard areas and to grant use permits in those areas under GS 143-215.54 subject to the conditions set forth in GS 160D-108 (permit choice and vested rights).

Requires all communities in the State to continue to enforce FEMA’s minimum floodplain management standards for all substantially improved structures, including those damaged by a historic flood event, to maintain eligibility for the National Flood Insurance Program, except as provided above and subject to the terms of the MOA.

Clarifies that no provision of the act should be construed to waive or modify any State or local regulations necessary to comply with FEMA’s minimum floodplain management requirements.

House committee substitute to the 2nd edition makes organizational changes and adds the following.

Amends GS 143-214.7 to allow a local government that has a NCPDES MS4 permit, in addition to requiring stormwater controls for the amount of impervious surface being created that exceeds the amount of impervious surfaces that existed before the redevelopment, to also implement one or more of the following: (1) requirement that owners redeveloping a property install new stormwater controls for preexisting development to capture up to 50% of the final stormwater runoff for the preexisting development; and (2) incentives that waive building, zoning, connection, or other fees, provide additional tax and financial benefits, or use other incentives for redevelopment that captures additional stormwater over the local program’s mandatory amount. Specifies that these enhanced stormwater control requirements do not apply to redevelopment activities for small-scale residential development, meaning single-family homes as well as townhomes and multifamily residential developments with four or fewer units, disturbing less than 1 ace and that are not part of a common plan of development or sale.  Adds the same definition of small-scale residential development to GS 143-214.7. Removes provisions that would have enacted GS 143-215.77B, setting limitations on products containing polycyclic aromatic hydrocarbons. 

Makes conforming changes to the act’s long title.

House committee substitute to the 2nd edition makes the following changes.

Section 2.

Reduces the cap on the renewal fee under GS 89C-17 from $100 per calendar year of the renewal period to $75 per calendar year of the renewal period. Lowers the reinstatement fee from a charged capped at $200 to a charge capped at $100.  

Prevents an unlicensed person from representing themselves as a professional land surveyor or holding out to the public any land surveying expertise with the intent to practice land surveying in GS 89C-23.

Section 3.

Repeals GS 89C-19.2 (limited right of entry by professional land surveyors) but now recodifies the language of GS 89C-19.2 as GS 14-159.15 with the following changes. Removes provisions requiring a professional land surveyor to make reasonable efforts to notify adjoining landowners upon whose land its necessary to enter. Removes lessee liability to a professional land surveyor or a person under their supervision for damages and injury to them that was willfully or deliberately caused by the lessee. Removes defined term critical infrastructure facilities and adds practice of land surveying. Clarifies that new GS 14-157.15 does not give a professional land surveyor the authority to either (1) enter lands traversed by an operating railroad or properties owned, held, used, or operated by the railroad or its subsidiaries or (2) enter lands containing critical infrastructure. Makes technical, conforming, and organizational changes. Applies to acts occurring on or after the act’s effective date.

Senate committee substitute to the 1st edition makes the following changes. Makes conforming changes to act’s long and short titles. Makes organizational changes.

Part I.

Requires each applicant for licensure under GS 58-33-30 (insurance producers, limited representatives, adjusters or motor vehicle damage appraiser) to comply with all education, training or experience requirements of GS Chapter 58 (currently, each applicant must have the special education, training, or experience of sufficient duration and extent reasonably to satisfy the Commissioner that the applicant possesses the competence necessary to fulfill the responsibilities of licensure).  Removes requirement that any producer training course developed for the licensure examinations required by GS 58-33-30(e) be approved by the Insurance Commissioner (Commissioner).

Adds the following content.

Part II.

Amends the persons subject to the $50 referral fee cap under GS 58-33-82(f) (pertaining to insurance commissions) so that the fee cap applies to referrals of insurance business by an unlicensed individual to a producer licensed under GS 58-33-26(c1)(6) (currently, fee cap applies to referrals by unlicensed individuals to licensed insurance agents or brokers). Removes exception for title insurance.  Applies to any referral of personal lines of insurance business made on or after October 1, 2025. 

Part III.

Enacts new GS 58-19-26 to require the ultimate controlling person of every insurer who is subject to registration to also file an annual group capital calculation report with the registration. Requires the report to be filed with the lead state commissioner. Sets out four categories of insurance holding company systems that are exempt from the filing requirement, including those that provide information to the lead state commissioner that meets the requirements for accreditation under the NAIC financial standards and accreditation program and whose non-US group-wide supervisor is not in a reciprocal jurisdiction but recognizes the group capital calculation as the worldwide group capital assessment for US insurance groups who operate in that jurisdiction. Sets out criteria that must be met for a non-US jurisdiction to recognize the group capital calculation and sets out criteria to use when determining whether the exemption applies. Despite the exemptions, requires the lead state commissioner to require filing of the group capital calculation for US operations of any non-US based insurance holding company system if the lead state commissioner determines that the filing is required for prudent oversight and solvency monitoring or for ensuring the competitiveness of the insurance marketplace. Allows the lead state commissioner to either (1) exempt the ultimate controlling person of an insurance holding company system from the filing requirement or (2) authorize the ultimate controlling person of an insurance holding company to file a limited group capital filing in lieu of the filing requirement if all of the following apply: (a) the insurance holding company system has annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than $1 billion; (b) the insurance holding company system does not include insurers within its holding company structure that are domiciled outside of the US or one of its territories; (c) the insurance holding company system does not include banking, depository, or other financial entity that is subject to an identified regulatory capital framework within its holding company structure; (d) the insurance holding company system attests that there are no material changes in transactions between insurers and non-insurers in the group that have occurred since the last filing of an annual group calculation report, if any; and (e) the non-insurers within the insurance holding company system do not pose a material financial risk to the insurer's ability to honor policyholder obligations. Sets out requirements for resuming filings when an exemption no longer applies.

Enacts new GS 58-19-27, which requires the ultimate controlling person of every insurer subject to registration to be included in the NAIC liquidity stress test framework and file a report with the lead state commissioner detailing the results of a specific year's liquidity stress test if: (1) the insurer meets the scope criteria of that data year's NAIC liquidity stress test framework or (2) the insurer did not meet the scope criteria of that data year's liquidity stress test framework, but the lead state commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, nonetheless determines the insurer should be included in the NAIC liquidity stress test framework for that data year. Requires the commissioner, in making this determination, to attempt to avoid the frequent inclusion or exclusion of insurers. Sets out requirements for the performance and reporting of results of the stress test. Allows the lead state commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, to exempt an ultimate controlling person from these reporting requirements; sets out what must be considered in making such an exemption. 

Enacts new GS 58-19-28 prohibiting, unless otherwise provided by law, the making, publishing, disseminating, circulating, or placing before the public, or causing it be done so directly or indirectly, in a publication, notice, electronic communication, or other specified communications available to the public, or in any other way as an advertisement, announcement, or statement containing a representation or statement with regard to the group capital calculation, group capital ratio, the liquidity stress test results, or supporting disclosures for the liquidity stress test of any insurer or any insurer group, or of any component derived in the calculation by any insurer, broker, or other person engaged in any manner in the insurance business. Sets out when announcements may be published in order to rebut a materially false or inappropriate statement.

Amends GS 58-19-5, setting out terms used in the Insurance Holding Company System Regulatory Act to add and define the terms group capital calculation, lead state commissioner, limited group capital filing, liquidity stress test, NAIC, NAIC liquidity stress test framework, reciprocal jurisdiction, and scope criteria.

Amends GS 59-19-25 to specify that the statute's exemption on disclosing information on the registration statement if the information is not material for the purposes of the statute does not apply to the new statutes above. Makes additional conforming changes. Makes conforming changes to GS 58-19-15.

Amends GS 58-19-40 by setting out confidentiality requirements for information provided to the Department of Insurance under the new statutes. Specifies that documents, materials, or other information in the possession or control of the Department of Insurance that are obtained by or disclosed to the Commissioner or any other person in the course of an examination or investigation made under GS 58-19-35, and all information reported or provided to the Department pursuant to subdivisions (11a) and (11b) of GS 58-19-15(b), GS 58-19-25, GS 58-19-30, and GS 58-19-38 are recognized by this State as being proprietary and to contain trade secrets. Allows the Commissioner to share proprietary and trade secret documents with state, federal, and internal regulatory agencies, and the NAIC. Also allows those documents and others already listed to be shared with any third-party consultants designated by the Commissioner. Allows entering into written agreements with any third-party consultant designated by the Commissioner governing sharing and use of information provided under the Article and amends the conditions that must be met in those circumstances, including issues around confidentiality, ownership of information, prohibitions on storage of information, notice requirements, consent to intervention in judicial or administrative actions, and notification when sharing documents with a third-party consultant. Makes conforming changes.

Effective January 1, 2026.

Part IV.

Adds terms tangible net worth and working capital to the definitions provisions of the NC Professional Employer Organization Act (Act) under GS 58-89A-5. Modifies the term audited GAAP financial statement so it is just referred to as an audited financial statement.

Broadens the entities that may be licensed as professional employer organization groups under GS 58-89A-35 to include persons (currently, limited to professional employer organizations) that are controlled by the same parent, entity or persons. Allows such groups to satisfy their reporting and financial requirements on a consolidated or combined basis (currently, just consolidated). Clarifies that the conditions pertaining to financial obligations must be met before the group is considered a professional employer organization group. Makes technical changes.

Expands persons required to file an additional surety bond under the described conditions set forth in GS 58-89A-50 to include licensees. Makes clarifying and conforming changes.

Repeals GS 58-89A-60(g) (listing certain conditions pertaining to the controlling person upon which the Insurance Commissioner [Commissioner] may deny licensure to an applicant under the Act).

Amends GS 58-89A-60 (licensure applications), as amended by the act, as follows. Expands required information pertaining to applicant managers to be submitted to the Commissioner to now include listing of directors, the educational background of all listed persons and their management and business experience. Removes requirement that Commissioner engage in rulemaking to require additional information beyond the statute, but specifies that any additional information required must be reasonable. Extends the date for completion of the applicant's audited financial statement to be submitted to the Commissioner to one that has been prepared no more than 120 days before the date of the application (currently, 90 days before the date of the application). Requires an applicant to have a tangible net worth of at least $50,000. Makes technical, conforming, and clarifying changes. Removes requirement that the audited financial statement be prepared in accordance with generally accepted accounting principles and then audited by an independent CPA as described. Now, just requires preparation of the audited financial statement by an independent CPA as described. Provides for additional documentation that must be submitted with an applicant’s combined or consolidated audited financial statement.

Allows applicants that do not have at least 12 months of operating history to meet the financial requirements by filing with the Commissioner financial statements that have been reviewed by an independent CPA and prepared not later than 90 days before the date of the application (currently, not requirement for such applicants to use an independent CPA or 90-day timeframe). Authorizes the Commissioner to accept the audited financial statement of the applicant’s parent company if the submitted information allows the Commissioner to determine the financial condition and financial responsibility of the applicant. Authorizes the Commissioner to accept the audited financial statement of an applicant's parent company and consider the financial condition and financial responsibility of the parent in lieu of the applicant if three listed conditions are met, including that the information in the audited financial statement and other documents meet the statutory requirements and enable the Commissioner to determine the financial condition and financial responsibility of the parent and the applicant. Expands persons required to submit to fingerprinting and a criminal background check to include changes in officers, directors, and other controlling persons of professional employer organization groups licensed under the Act (currently, change to a controlling party of a professional employer organization).

Lists six circumstances under which the Commissioner may deny licensure, including that a controlling person of the applicant has been convicted of a felony, that the applicant has not provided evidence satisfactory to the Commissioner of financial responsibility, and that the applicant is not current with respect to all of its obligations for payroll, payroll-related taxes, workers' compensation insurance, and employee benefits and the applicant has failed to satisfy the Commissioner as to the reasons why. Removes provision authorizing denial of an application for any reason for which a license may be suspended or terminated under GS 58-89A-155. Makes conforming and technical changes.

Expands persons required to annually certify compliance with the licensure requirements of the Act in GS 58-89A-70 to include officers and directors of the licensee. Modifies the evidence of financial responsibility that must be included with each licensee’s annual filing with the Commissioner so that it now means an audited financial statement of the licensee or its parent company if allowed by the Commissioner on a form as described. Adds requirement for annual submission of an attestation, executed by the chief financial officer and the chief executive officer of the licensee, that the licensee is current with respect to all of its obligations for payroll, payroll-related taxes, workers' compensation insurance, and employee benefits, as described. Limits other information required by the Commission to reasonable information. Extends the filing period for the quarterly financial statement and attestation that a licensee may be required to file with the Insurance Commissioner under GS 58-89A-70 from 45 days after the end of each quarter to 60 days after the end of each quarter.  Makes technical changes.

Now also requires that an applicant for de minimis registration as a limited professional employer under GS 58-89A-75 not be domiciled in the State. Clarifies the ways an applicant can advertise other than through any media outlet physically located in the State. No longer accepts persons only registered as professional employer organization in another State as eligible for de minimis registration. Makes organizational changes.

Applies to applications for licensure issuance or renewal submitted on or after the act becomes law.

Part V.

Makes the following changes to Article 48 (concerning the Post-assessment Insurance Guaranty Association [Association]) of GS Chapter 58.

Clarifies, in GS 58-48-10 (scope of Article), that coverages like warranties or service contracts that are set forth in a cybersecurity insurance policy are covered by the Article. Clarifies that the defined term covered claim includes claim obligations that arose through the issuance of an insurance policy by a member insurer, which are later allocated, transferred, merged into, novated, assumed by, or otherwise made the sole responsibility of a member or nonmember insurer if the four described conditions are met. Adds defined term cybersecurity insurance.

Modifies the Association’s powers/duties under GS 58-48-35 as follows. Limits the Association’s obligations to $500,000 in paying all first and third-party claims under a policy or endorsement providing cybersecurity insurance coverage arising out of a single insured event, as described. Removes Association’s right to review settlements and other described documents to determine the extent to which those documents may be properly contested as part of its authority to pay and deny covered claims. Authorizes the Association to: (1) appoint, substitute, and direct legal counsel for the defense of covered claims and appoint and direct other service providers for covered services and (2) establish priority of payment. Grants the Association the right to review and contest settlements, releases, compromises, waivers, and judgments to which the insolvent insurer or its insureds were parties prior to the entry of the order of liquidation, subject to the four described conditions.

Modifies the net worth requirement under GS 58-48-50 (effect of paid claims) so that the Association can only recover the described covered claim against an insured whose net worth exceeds $50 million in the year before the insured becomes insolvent so long as the insured’s net worth on that date is deemed to include the aggregate net worth of the insured and all of its subsidiaries and affiliates as calculated on a consolidated  basis.

Removes provisions pertaining to reopening of default provisions under GS 58-48-65, and makes conforming changes to statute's title.

Part VI.

Repeals GS 58-63-16 (listing permitted trade practices under the unfair trade practices act pertaining to the business of insurance) and makes conforming change by repealing GS 58-63-15(8)b.4.

Increases the exemptions from GS 58-63-15(7) (unfair discrimination in the business of insurance) and GS 58-63-15(8) (certain rebates that constitute unfair trade practices in the business of insurance) to include:

• Engaging in an arrangement that would violate section 106 of the federal Bank Holding Company as interpreted by the board of the Federal Reserve or Section 5(g) of the federal Home Owners’ Loan Act;
• The offer or provision by insurers or producers, by or through employees, affiliates, or third-party representatives, of value-added products or services at no or reduced cost when such products or services are not specified in the policy of insurance if all of the three described conditions are met, including that the product relates to insurance coverage and is primarily designed to satisfy one of nine listed needs (hereinafter, the insurance coverage product) and that the insurance coverage product is not offered in a manner that is unfairly discriminatory.
• The offer or provision of the insurance coverage products where the insurer or producer does not have sufficient evidence to demonstrate but has a good-faith belief that the products or service satisfies one or more of the nine listed needs referenced above, will be offered or provided in a manner that is not unfairly discriminatory as part of a pilot or testing program for no more than one year. Requires the insurance provider to notify the Department of Insurance (DOI) of such testing programs and may proceed unless DOI objects within 21days of such notice.
• The offer or giving by an insurer or producer of noncash gifts, items, or services, including meals to or charitable donations on behalf of a customer, if all of the four described criteria are met.
• The conducting of drawings or raffles by an insurer or producer to the extent permitted by law so long as the five listed criteria are met.

Prevents an insurer, producer, or representative of either from offering or providing insurance as an inducement to the purchase of another policy or otherwise use the words "free," "no cost," or words of similar import, in an advertisement making it an unfair method of competition and unfair and deceptive act or practice in the business of insurance. Specifies that the above does not apply to: (1) the described value-added products, gifted noncash items, gifts, and services, drawings, and raffles listed in GS 58-63-15(8)(b)(6) through (9) and (2) the listed products or services in GS 58-63-16(a)(permitted trade practices). Clarifies that GS 58-63-15 does not preclude the trade practices allowed under the section. Applies to trade practices related to insurance contracts issued, renewed, or amended on or after January 1, 2027.

Makes conforming changes to GS 58-33-85 (rebates and charges in excess of premium prohibited and exceptions).  Applies to trade practices related to insurance contracts issued, renewed, or amended on or after January 1, 2027.

Requires, in new GS 97-144, a workers’ compensation claim to be filed against the North Carolina Self-Insurance Security Association (Association) within five years after the claims bar date established by a court of competent jurisdiction in the insolvency proceeding of a former member self-insurer. Instructs that any claim not filed within the five-year period is forever barred as a claim against the Association.

Authorizes the Association under GS 97-133 to require collateral as a condition of participation based on the member’s financial condition. 

Makes technical and conforming changes to GS 97-165 (definitions pertaining to individual employers). Adds the Association, collateral, and member self-insurer or member as a defined term. Makes conforming changes to GS 97-185 (pertaining to the System).

Part VII.

Amends GS 58-33-10 to define exchange business, exchange of business, or proper exchange of business as the forwarding of insurance business from one producer duly licensed for the line of insurance being forwarded to another producer duly licensed for that line of insurance where both producers are appointed with an insurer that can accommodate the risk under conditions favorable to the insured.

Amends GS 58-33-82 by expanding upon the circumstances under which commissions, fees, or other valuable consideration for the sale, solicitation, or negotiation of insurance may be assigned or directed to be paid, to also include: (1) to an agency principal who is an owner, shareholder, member, partner, director, employee, or agent of that agency for business placed by a producer on behalf of that agency who is duly licensed and appointed and (2) in connection with the exchange of business where both producers are duly licensed with appropriate company appointments and have complied with all of the requirements of new GS 58-33-82.1.

Enacts new GS 58-33-82.1 allowing producers to exchange business, and split the commission, if the producer forwarding the business and the producer receiving the business both: (1) are licensed in all lines of insurance involved in the exchange, (2) sign the insurer's insurance application or are otherwise disclosed to the insurer and the consumer, and (3) have a good-faith belief that the exchange of business complies with this Article's requirements. Specifies that this does not limit: (1) the exchange of business among specialty lines, nonstandard and professional liability business placed through a surplus lines producer or written on an excess rate or other individually rated risk basis and (2) the exchange of business in connection with risk-sharing plans.

Part VIII.  

Prevents, in GS 20-309, a person subject to an inexperienced operator premium surcharge from operating a motor vehicle unless the liability insurance policy benefiting that person includes any required premium surcharge. Exempts persons who demonstrate financial responsibility in an authorized manner other than a liability insurance policy. Makes conforming change to GS 20-16 (authority of Division of Motor Vehicles to suspend license). Requires an insurer to notify the DMV in GS 20-309.2 (required notice to the Division of Motor Vehicles by insurers) if a person a subject to an inexperienced operator premium surcharge is added or removed from a policy’s coverage or if a policy to which a person subject to the inexperienced operator surcharge was added has been cancelled. Effective January 1, 2026. 

Part IX. 

Makes the following changes to Article 10B, “Peer-to-Peer (PTP) Vehicle Sharing,” of GS Chapter 20. Removes term vehicle sharing provider and adds six new terms to GS 20-280.15 (definitions provision of Article 10B).  

Requires a PTP vehicle sharing program (Program) to assume liability of a shared vehicle owner during the vehicle sharing period for bodily injury or property damage to third parties or uninsured and underinsured motorist or personal injury protection losses, to the extent personal injury protection is required by law, in an amount stated in the Program agreement for the minimum amounts described. Specifies that the assumption of liability does not apply if (1) a shared vehicle owner makes an intentions or fraudulent material misrepresentation or omission to the Program before the vehicle sharing period in which the loss occurred or (2) a shared vehicle owner, acting in concert with a shared vehicle driver, fails to return the vehicle pursuant to the vehicle sharing agreement. 

Requires the Program to ensure that the parties are insured under a motor vehicle policy, as described. Designates such insurance the primary insurance during each vehicle sharing period. Requires the insurance to be maintained by at least one of the following or any combination thereof: (1) the shared vehicle owner; (2) the shared vehicle driver; or (3) the Program. Provides for lapses in coverage, assumption of primary liability, and coverage in the event of a dispute.

Requires, in new GS 20-280.21, the Program to notify the shared vehicle owner if the shared vehicle has a lien against it, as described. Authorizes, in new GS 20-280.23, a motor vehicle insurer to exclude any coverage and duty to defend or indemnify for any claim arising out of PTP vehicle sharing that is covered under a shared vehicle owner’s motor vehicle liability insurance policy, including the six described coverages. Specifies that Article 10B should not be interpreted as invalidating or limiting a motor vehicle insurance policy exclusion or an insurer’s ability to underwrite a motor vehicle insurance policy or cancel or non-renew policies, including for participation in a Program. Provides for Program record keeping in new GS 20-280.25, as described.  

Exempts Programs and a shared vehicle owner from vicarious liability based on vehicle ownership. Provides for a right of contribution and insurable interests, driver’s license verification, as specified. Requires each Program agreement to provide seven disclosures in its agreement, including: (1) the Program’s right to seek indemnification from the shared driver; (2) that a motor vehicle insurance policy issued to the shared vehicle owner for the shared vehicle or to the driver does not provide a defense or indemnification for any claim asserted by the Program; and (3) daily rates, fees, and if applicable, any insurance or protection package costs.  Designates the Program as having sole responsibility for equipment that is put in or on the vehicle to monitor or facilitate the vehicle sharing transaction under GS 30-280.37. Requires the Program in GS 20-280.39, at the time the owner registers the shared vehicle with a Program, to verify that the shared vehicle does not have any safety recalls. Requires a shared owner receiving actual notice of a safety recall on a shared vehicle to make the vehicle unavailable in any Program as described until the safety recall repair has been made and to notify the Program if the vehicle is being used when the safety recall notice has been received so the owner may address the repair.

Effective October 1, 2025, and applies to all transactions after that date.

Part X.

Prevents a landlord from requiring a tenant to obtain rental insurance coverage from a designated carrier or agent in GS 42-46. Authorizes the landlord to charge a tenant for the actual cost incurred to obtain insurance coverage only if the tenant fails to provide proof upon request by the landlord that the tenant has obtain the required rental insurance.

Part XI.

Removes language in Section 16(j) of SL 2023-133 (amending insurance rate making laws) that would have applied its changes to GS 58-36-75 to prior convictions. Instead has those changes apply to convictions for a violation of speeding 10 miles per hour or less over the speed limit and prayers for judgment occurring on or after July 1, 2025. Specifies that for purposes of determining whether there should be a premium surcharge or assessment for such convictions or prayers for judgment occurring before July 1, 2025, they must occur within the three years immediately preceding the date of application or preparation of renewal.

Part XII.

Allows for a salesperson to be registered with more than one dealer under GS 78A-36 so long as each of the dealers that employs or associates with the salesman is under common ownership or control, or the registration is otherwise by a rule or order of the Secretary of State.