AUTOMOBILE INSURANCE REGULATORY MODERNIZATION.

View NCGA Bill Details2013-2014 Session
House Bill 265 (Public) Filed Thursday, March 7, 2013
A BILL TO BE ENTITLED AN ACT TO ALLOW NORTH CAROLINA CONSUMERS TO ENJOY THE BENEFITS OF ENHANCED COMPETITION IN THE AUTOMOBILE AND MOTORCYCLE INSURANCE MARKET AND TO RESTORE FAIRNESS BY ENDING SUBSIDIES FOR HIGHER RISK DRIVERS.
Intro. by Collins, Murry, Burr, Warren.

Status: Serial Referral To Commerce and Job Development Added (House Action) (Apr 8 2013)
H 265

Bill Summaries:

  • Summary date: Mar 7 2013 - More information

    Identical to S 154, filed 2/28/13.

    Adds a new Article 37A in GS Chapter 58 to allow certain types of motor vehicle insurance filings to take effect on or after the date they are filed. Applies to filings for nonfleet private passenger motor vehicle insurance rates made by an insurer that provides for an overall statewide rate increase or decrease of no more than 12% when aggregated for all policyholders and all coverages subject to the filing. Insurers may only make one rate change during any 12-month period using this expedited process unless the combination of all rate changes during the 12-month period do not result in an overall increase or decrease of more than 12%. If the rate filing provides for an overall statewide rate increase or decrease greater than 12%, the filing may not be expedited under Article 37A but rather remains subject to Articles 40 and 41.

    A filing under the expedited procedure in Article 37A is deemed approved by the Commissioner of Insurance upon filing. The Commissioner may subsequently disapprove of the filing after conducting a hearing and issuing a written determination that the filing is excessive, inadequate, or unfairly discriminatory. If the Commissioner disapproves of the filing, the decision is not retroactive and does not affect any insurance contracts issued or made before the effective date of the order. Makes conforming changes to GS 58-40-30 and GS 58-41-50.

    Adds a new Article 36A in GS Chapter 58 to provide that by January 1, 2015, insurers writing nonfleet private passenger motor vehicle insurance (as defined in new GS 58-36A-1) may choose to develop rates and forms subject to either Article 36 or Article 40 and new Article 37A. Makes conforming changes to GS 58-40-15.

    Amends GS 58-3-25, which prohibits certain types of insurance discrimination. Removes the prohibition on basing any standard or rating plan for private passenger automobiles or motorcycles, in whole or in part, directly or indirectly, upon the age or sex of the persons insured.

    Adds new GS 58-40-17 to allow insurers to adopt rules allowing an insured with more than four private passenger motor vehicles to be covered under a nonfleet private passenger motor vehicle policy that is subject to Article 40.

    Adds new GS 58-40-150 to allow an insurer to take action if an applicant for a nonfleet private passenger motor vehicle policy knowingly makes a material misrepresentation related to the the experience or driving record of insureds or other operators.

    Adds new GS 58-40-145 to provide that Article 40 does not apply to certain types of insurers, specifically to any town or county farmers mutual fire insurance association with limited operations and certain insurers doing business in the state on the assessment plan. Adds new GS 58-37A-15(a) exempting the same categories of insurers from new Article 37A.

    Adds new GS 58-37A-15(b) to provide that GS 58-36-90 (related to prohibitions on using credit scoring in rating) and GS 58-36-95 (related to estimates based upon the use of nonoriginal crash repair parts) apply to insurers that elect to develop private passenger auto and motorcycle rates and forms pursuant to new Article 37A.

    Amends GS 58-37-35, which relates to the North Carolina Motor Vehicle Reinsurance Facility (Facility). Under current law, Facility reinsurance rates must be calculated on an actuarially sound basis except that "clean risks" must not exceed rates charged to "clean risks" who are not reinsured in the Facility. The changes to the section would phase out the differential in rates for "clean risks" over five years. The change would be effective January 1, 2014.  Another change would amend the same statute again effective January 1, 2019, to remove all of the provisions related to clean risks in the statute.

    Directs the Facility to report to the Joint Legislative Commission on Governmental Operations on or before October 1, 2016 (and again by October 1, 2018) on the impact of the legislation on the Facility's market share.

    Effective January 1, 2015, unless otherwise indicated.

     


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