AUTO INSURANCE/PROTECT LIENHOLDERS.

Printer-friendly: Click to view
View NCGA Bill Details2017-2018 Session
Senate Bill 116 (Public) Filed Tuesday, February 21, 2017
AN ACT TO ENSURE THE RIGHTS AND INTERESTS OF LIENHOLDERS ARE ADEQUATELY PROTECTED UNDER CURRENT STATE LAW GOVERNING THE ISSUANCE OF MOTOR VEHICLE LIABILITY POLICIES AND PAYMENTS OF CLAIMS.
Intro. by Britt, Brown.

Status: Ref To Com On Rules and Operations of the Senate (Senate Action) (Feb 22 2017)

Bill History:

S 116

Bill Summaries:

  • Summary date: Feb 21 2017 - View Summary

    Identical to H 104, filed on 2/14/17.

    Enacts GS 58-41-32 to require an insurer, prior to making payment on a nonfleet private passenger motor vehicle insurance policy claim, to verify with any lienholders of record or loss payee whether the lienholder or loss payee holds a perfected security interest in the motor vehicle covered by the policy. Mandates that, if the insurer determines a lienholder or loss payee does hold perfected security interest in the motor vehicle covered by the policy, the lienholder or loss payee be named as a co-payee on the insurer's payment of the claim, and directs the insurer to mail the payment of the claim to the lienholder or loss payee. Effective October 1, 2017, and applies to claims filed on or after that date.

    Amends GS 58-39-75 to allow an insurer to disclose personal or privileged information about an individual collected or received in connection with an insurance transaction to a lienholder of record with a perfected security interest in a motor vehicle covered by a nonfleet passenger motor vehicle insurance policy, provided that three requirements are met. Sets forth those three requirements to be (1) the lienholder submits the request in writing or electronically, (2) the personal or privileged information disclosed is limited as specified, and (3) the lienholder agrees not to disclose the information unless permitted or required to do so by State or federal law.

    Directs the Department of Insurance (Department), in consultation with the Division of Motor Vehicles, to study ways to better ensure the rights and interests of any lienholder of record of a motor vehicle are protected when an insurer issues a motor vehicle liability policy or makes a claim of payment. Requires the study to include examining necessary rule or legislative changes to better protect a lienholder of record from losses incurred due to a denial of claim based on the covered vehicle being driven at the time of the accident by a person not covered by the liability policy or the insured making fraudulent or false representations in the claim. Directs the Department to report its findings and recommendations to the Joint Legislative Oversight Committee on General Government and the Joint Legislative Transportation Oversight Committee no later than December 1, 2017.

    Authorizes the Department to adopt temporary rules to implement the provisions of the act. Provides that these temporary rules will remain in effect until permanent rules replacing them become effective.