GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 1999
SESSION LAW 1999-132
The General Assembly of North Carolina enacts:
PART I. REPEALS OF OBSOLETE OR UNNECESSARY PROVISIONS.
Section 1.1. G.S. 58-3-125, 58-6-10, and 58-71-90 are repealed.
Section 1.2. G.S. 58-87-10(e) reads as rewritten:
"(e) Revenue Source. - Revenue is credited to the Workers' Compensation Fund from appropriations made to the Department of Insurance for this purpose. In addition, every eligible unit that elects to participate shall pay into the Fund an amount set annually by the State Fire and Rescue Commission to ensure that the Fund will be able to meet its payment obligations under this section. The amount shall be set as a per capita fixed dollar amount for each member of the roster of the eligible unit.
The payment shall be made to the State Fire and Rescue
Commission on or before July 1 of each year. The Commission shall remit the
payments it receives to the State Treasurer, who shall credit the payments to
the Fund. If the Commission does not receive an annual payment from an
eligible unit by July 1, then that unit shall not receive workers' compensation
coverage from the Fund for the fiscal year that begins that July 1."
Section 1.3. G.S. 58-3-115 reads as rewritten:
"§ 58-3-115. Twisting with respect to insurance policies; penalties.
No insurer shall make or issue, or cause to be issued, any
written or oral statement that willfully misrepresents or willfully makes an
incomplete comparison as to the terms, conditions, or benefits contained in any
policy of insurance for the purpose of inducing or attempting to induce a
policyholder in any way to terminate or surrender, exchange, or convert any
insurance policy. Any person who violates this section is subject to the
provisions of G.S. 58-2-70, 58-3-90 through 58-3-100, and 58-3-125. G.S.
58-2-70 or G.S. 58-3-100."
Section 1.4. G.S. 58-33-45(d) reads as rewritten:
"(d) For the purposes of
investigation under this section, the Commissioner shall have all the power
conferred upon him by G.S. 58-3-125. 58-2-50."
PART II. CONTINUING CARE RETIREMENT COMMUNITY NAME CORRECTION.
Section 2.1. G.S. 58-30-10(14) reads as rewritten:
"(14) 'Insurer' means any entity licensed
under Articles 7, 16, 26, 49, 65, or 67 of this Chapter and any employer that
has furnished to the Commissioner satisfactory proof of its financial
responsibility under G.S. 97-93(a)(2). For purposes of this Article, 'insurer'
also includes continuing care retirement centers communities licensed
under Article 64 of this Chapter."
Section 2.2. The title of Article 64 of Chapter 58 of the General Statutes reads as rewritten:
"ARTICLE 64.
"Registration,
Disclosure, Contract, and Financial Monitoring Requirements for
Continuing Care Facilities.
Retirement Communities."
Section 2.3. G.S. 58-64-1 reads as rewritten:
"§ 58-64-1. Definitions.
As used in this Article, unless otherwise specified:
(1) 'Continuing care'
means the furnishing to an individual other than an individual related by
blood, marriage, or adoption to the person furnishing the care, of lodging
together with nursing services, medical services, or other health related
services, pursuant to under an agreement effective for the life
of the individual or for a period in excess of longer than one
year.
(2) 'Entrance fee' means a payment that assures a resident a place in a facility for a term of years or for life.
(3) 'Facility' means the place
or places retirement community or communities in which a provider
undertakes to provide continuing care to an individual.
(4) 'Health related services' means, at a minimum, nursing home admission or assistance in the activities of daily living, exclusive of the provision of meals or cleaning services.
(5) 'Living unit' means a room, apartment, cottage, or other area within a facility set aside for the exclusive use or control of one or more identified residents.
(6) 'Provider' means the
promoter, developer, or owner of a continuing care facility, whether a
natural person, partnership, or other unincorporated association, however
organized, trust, or corporation, of an institution, building, residence, or
other place, whether operated for profit or not, or any other person, that
solicits or undertakes to provide continuing care under a continuing care
facility contract, or that represents himself himself, herself, or
itself as providing continuing care or 'life care.'
(7) 'Resident' means a purchaser of, a nominee of, or a subscriber to, a continuing care contract.
(8) 'Hazardous financial condition' means a provider is insolvent or in eminent danger of becoming insolvent."
Section 2.4. G.S. 58-64-40(b) reads as rewritten:
"(b) The board of
directors or other governing body of a continuing care facility or its
designated representative shall hold annual meetings with the residents of the continuing
care facility for free discussions of subjects including, but not limited
to, income, expenditures, and financial trends and problems as they apply to
the facility and discussions of proposed changes in policies, programs, and
services. Residents shall be entitled to at least seven days advance
notice of each meeting. An agenda and any materials that will be
distributed by the governing body at the meetings shall remain available upon
request to residents."
Section 2.5. G.S. 58-64-80 reads as rewritten:
"§ 58-64-80. Advisory Committee.
There shall be a nine member Continuing Care Advisory
Committee appointed by the Commissioner. The Committee shall consist of
at least two residents of continuing care communities, facilities, two
representatives of the North Carolina Association of Nonprofit Homes for the
Aging, one individual who is a certified public accountant and is licensed to
practice in this State, one individual skilled in the field of architecture or
engineering, and one individual who is a health care professional."
PART III. WORKERS' COMPENSATION LOSS COSTS CONFORMING CHANGES.
Section 3.1. G.S. 58-36-1(2) reads as rewritten:
"(2) The Bureau shall
provide reasonable means to be approved by the Commissioner whereby any person
affected by a rate or loss costs made by it may be heard in person or by
his the person's authorized representative before the governing
committee or other proper executive of the Bureau."
Section 3.2. G.S. 58-36-1(5)c. reads as rewritten:
"c. Failure or
refusal by any assigned employer risk to make full disclosure to the Bureau,
servicing carrier, or insurer writing a policy of information regarding the
employer's true ownership, change of ownership, operations, or payroll, or any
other failure to disclose fully any records pertaining to workers' compensation
insurance shall be sufficient grounds for the Bureau to authorize the
termination of the policy of that employer."
Section 3.3. G.S. 58-36-10 reads as rewritten:
"§ 58-36-10. Method of rate making; factors considered.
The following standards shall apply to the making and use of rates:
(1) Rates or loss costs shall not be excessive, inadequate or unfairly discriminatory.
(2) Due consideration
shall be given to actual loss and expense experience within this State for the
most recent three-year period for which such that information is
available; to prospective loss and expense experience within this State; to the
hazards of conflagration and catastrophe; to a reasonable margin for
underwriting profit and to contingencies; to dividends, savings, or unabsorbed
premium deposits allowed or returned by insurers to their policyholders,
members, or subscribers; to investment income earned or realized by insurers
from their unearned premium, loss, and loss expense reserve funds generated
from business within this State; to past and prospective expenses specially
applicable to this State; and to all other relevant factors within this State:
Provided, however, that countrywide expense and loss experience and other
countrywide data may be considered only where credible North Carolina
experience or data is not available.
(3) In the case of fire
insurance rates, as are subject to the ratemaking authority of the Bureau,
consideration may be given to the experience of such fire insurance business
during the most recent five-year period for which such that experience
is available. In the case of fire insurance rates that are subject to the
ratemaking authority of the Bureau, consideration shall be given to the
insurance public protection classifications of rural fire districts based upon
standards established by the Commissioner. To the extent credits are
provided for proximity to fire hydrants, the Bureau may also provide
appropriate credits in public protection classifications for optional water
sources, such as ponds, lakes, or other bodies of water, in accordance with
standards and procedures filed with and approved by the Commissioner.
(4) Risks may be grouped
by classifications and lines of insurance for establishment of rates rates,
loss costs, and base premiums. Classification rates may be modified
to produce rates for individual risks in accordance with rating plans which that
establish standards for measuring variations in hazards or expense
provisions or both. Such Those standards may measure any
differences among risks that can be demonstrated to have a probable effect upon
losses or expenses. The Bureau is directed to shall establish
and implement a comprehensive classification rating plan for motor vehicle
insurance under its jurisdiction within 90 days of September 1, 1977. jurisdiction.
No such classification plans shall base any standard or rating plan for private
passenger (nonfleet) motor vehicles, in whole or in part, directly or
indirectly, upon the age or sex gender of the persons
insured. The Bureau shall at least once every three years make a complete
review of the filed classification rates to determine whether they are proper
and supported by statistical evidence, and shall at least once every 10 years
make a complete review of the territories for nonfleet private passenger motor
vehicle insurance to determine whether they are proper and reasonable.
(5) In the case of workers' compensation insurance and employers' liability insurance written in connection therewith, due consideration shall be given to the past and prospective effects of changes in compensation benefits and in legal and medical fees that are provided for in General Statutes Chapter 97."
Section 3.4. G.S. 58-36-15(a) reads as rewritten:
"(a) The Bureau shall file
with the Commissioner copies of the rates, loss costs, classification plans,
rating plans and rating systems used by its members. Each rate or loss costs
filing shall become effective on the date specified in the filing, but not
earlier than 105 days from the date the filing is received by the Commissioner:
Provided that (1) rate or loss costs filings for workers' compensation
insurance and employers' liability insurance written in connection therewith
shall not become effective earlier than 120 days from the date the filing is
received by the Commissioner or on the date as provided under in G.S.
58-36-100, whichever is earlier; and (2) any filing may become effective on a
date earlier than that specified in this subsection upon agreement between the
Commissioner and the Bureau."
Section 3.5. G.S. 58-36-15(f) reads as rewritten:
"(f) On or before
September 1 of each calendar year year, or later with the approval of
the Commissioner, the Bureau shall submit to the Commissioner the
experience, data, statistics, and information referred to in subsection (c) of
this section and required under G.S. 58-36-100 and a residual market rate or
prospective loss costs review based on such those data for
workers' compensation insurance and employers' liability insurance written in
connection therewith. Any rate or loss costs increase for such that
insurance that is implemented pursuant to under this Article
shall become effective solely to such insurance as is written having insurance
with an inception date on or after the effective date of the rate or
loss costs increase."
Section 3.6. G.S. 58-36-15(g) reads as rewritten:
"(g) The following information must be included in policy form, rule, and rate or loss costs filings under this Article and under Article 37 of this Chapter:
(1) A detailed list of the rates, loss costs, rules, and policy forms filed, accompanied by a list of those superseded; and
(2) A detailed description, properly referenced, of all changes in policy forms, rules, prospective loss costs, and rates, including the effect of each change."
Section 3.7. G.S. 58-36-30(a) reads as rewritten:
"(a) No insurer,
officer, agent or representative thereof Except as permitted by G.S.
58-36-100 for workers' compensation loss costs filings, no insurer and no
officer, agent, or representative of an insurer shall knowingly issue or
deliver or knowingly permit the issuance or delivery of any policy of insurance
in this State which that does not conform to the rates, rating
plans, classifications, schedules, rules and standards made and filed by the
Bureau. However, an An insurer may deviate from the rates promulgated
by the Bureau provided if the insurer has filed the proposed deviation
to be applied both with the Bureau and the Commissioner, and provided
the deviation is uniform in its application to all risks in the State of the
class to which the deviation is to apply; and provided such deviation is
approved by the Commissioner. if the proposed deviation is based on
sound actuarial principles, and if the proposed deviation is approved by the
Commissioner. The Commissioner shall approve proposed deviations if they
do not render the rates excessive, inadequate or unfairly discriminatory. If
approved, the deviation may thereafter be amended, subject to the provisions of
this subsection. Amendments to deviations are subject to the same
requirements as initial filings. The deviation may be terminated An
insurer may terminate a deviation only if the deviation has been in effect
for a period of six months before the effective date of the termination and the
insurer notifies the Commissioner of the termination no later than 15 days
before the effective date of the termination."
Section 3.8. G.S. 58-36-30(c) reads as rewritten:
"(c) Any deviation with
respect to workers' compensation and employers' liability insurance written in
connection therewith as filed under subsection (a) of this section shall apply
uniformly to all classifications. Any approved rate under subsection (b) of
this section with respect to workers' compensation and employers' liability
insurance written in connection therewith shall be furnished to the
Bureau."
Section 3.9. G.S. 58-36-100(a) reads as rewritten:
"(a) Nothing in this
section requires the Bureau or its member insurers to refile rates previously
implemented before two years after the effective date of this section. Any
member insurer of the Bureau may continue to use all rates and deviations filed
and approved for its use until disapproved, or the insurer makes its own filing
to change its rates, either by making an independent filing or by filing a
reference filing adoption form adopting the Bureau's prospective loss costs, or
modification thereof. Except as provided in subsection subsections
(k) and (m) of this section, with the initial prospective loss costs
reference filing, the Bureau shall no longer develop or file any minimum
premiums, minimum premium formulas, or expense constants. If an insurer wishes
to amend minimum premium formulas, formulas or expense constants, it
must file the minimum premium rules, formulas, or amounts it proposes to
use. A copy of each filing submitted to the Commissioner under
subsections (e) and (g) of this section shall also be sent to the Bureau."
Section 3.10. G.S. 58-36-100(b)(1) reads as rewritten:
"(1) 'Expenses'. - That portion of a rate attributable to acquisition, field supervision, collection expenses, any tax levied by the State or by any political subdivision of the State, licensing costs, fees, and general expenses, as determined by the insurer."
Section 3.11. G.S. 58-36-100(c) reads as rewritten:
"(c) Except as provided in
subsection (m) of this section, for workers' compensation and employers'
liability insurance written in connection with workers' compensation insurance,
the Bureau shall no longer develop or file advisory final rates that contain
provisions for expenses (other than loss adjustment expenses) and profit. The
Bureau shall instead develop and file for approval with the Commissioner, in
accordance with this section, reference filings containing advisory prospective
loss costs and the underlying loss data and other supporting statistical and
actuarial information for any calculations or assumptions underlying these loss
costs. Loss-based assessments, any tax levied by the State or any political
subdivision of the State, licensing costs, and fees assessments will
be included in prospective loss costs."
Section 3.12. G.S. 58-36-100(k) reads as rewritten:
"(k) The Bureau shall file
with the Commissioner, for approval, filings containing a revision of rules and
supplementary rating information. This includes policy-writing rules, rating
plans, classification codes and descriptions, and rules that include factors or
relativities, such as employers' liability increased limits factors, factors
and related minimum premiums classification relativities, or similar factors,
but excludes minimum premiums. factors. The Bureau may print and
distribute manuals of rules and supplementary rating information, excluding
minimum premiums. information."
PART IV. HEALTH INSURANCE CLARIFYING CHANGES.
Section 4.1. G.S. 58-50-130(a) is amended by adding a new subdivision to read:
"(4b) Late enrollees may only be excluded from coverage for the greater of 18 months or an 18-month preexisting-condition exclusion; however, if both a period of exclusion from coverage and a preexisting-condition exclusion are applicable to a late enrollee, the combined period shall not exceed 18 months. If a period of exclusion from coverage is applied, a late enrollee shall be enrolled at the end of that period in the health benefit plan held at the time by the small employer."
Section 4.2. G.S. 58-51-55(d) reads as rewritten:
"(d) Applicability. -
Subsection (b1) of this section applies only to group health insurance contracts
contracts, other than excepted benefits as defined in G.S. 58-68-25, covering
more than 50 employees. The remainder of this section applies only to group
health insurance contracts covering 20 or more employees. For purposes of this
section, 'group health insurance contracts' include MEWAs, as defined in G.S.
58-49-30(a)."
Section 4.3. G.S. 58-65-90(d) reads as rewritten:
"(d) Applicability. -
Subsection (b1) of this section applies only to subscriber contracts contracts,
other than excepted benefits as defined in G.S. 58-68-25, covering more
than 50 employees. The remainder of this section applies only to group
contracts covering 20 or more employees."
Section 4.4. G.S. 58-67-75(d) reads as rewritten:
"(d) Applicability. -
Subsection (b1) of this section applies only to group contracts contracts,
other than excepted benefits as defined in G.S. 58-68-25, covering more
than 50 employees. The remainder of this section applies only to group
contracts covering 20 or more employees."
Section 4.5. Reserved.
Section 4.6. G.S. 58-68-40(e) reads as rewritten:
"(e) Exception for Coverage
Offered Only to Bona Fide Association Members.Coverage. - Subsection
(a) of this section does not apply to:
(1) Health insurance coverage offered by a health insurer if the coverage is made available in the small group market only through one or more bona fide associations.
(2) A self-employed
individual as defined in G.S. 58-50-110(21a). G.S. 58-50-110(21a),
except as otherwise provided for the basic and standard health care plans under
the North Carolina Small Employer Group Health Coverage Reform Act."
Section 4.7. G.S. 58-68-60(b)(2) reads as rewritten:
"(2) Who is not eligible
for coverage under (i) an ERISA a group health plan, (ii) part A
or part B of title XVIII of the Social Security Act, or (iii) a State plan
under title XIX of the Act (or any successor program), and does not have other
health insurance coverage;".
Section 4.8. Section 3.19 of Session Law 1997-519 reads as rewritten:
"Section 3.19. Except as modified by G.S. 58-50-56(i),
as enacted in this Part, any administrative rules that were adopted by the
Commissioner under the authority of G.S. 58-50-50 or G.S. 58-50-55 G.S.
58-65-140, 58-50-50, or 58-50-55 and that were effective before January 1,
1998, are not affected by the repeals in Section 3.16 or Section 3.17 of
this act."
PART V. BAIL BONDS.
Section 5. G.S. 58-71-82 reads as rewritten:
"§ 58-71-82. Dual license holding.
If an individual holds a professional bondsman's license or a
runner's license and a surety bondsman's license simultaneously, they are
considered one license for the purpose of disciplinary actions involving suspension,
revocation, or renewal nonrenewal under this Article. Separate
renewal fees must be paid for each license, however."
PART VI. AGENT ASSOCIATIONS MERGER.
Section 6.1. G.S. 58-32-1 reads as rewritten:
"§ 58-32-1. Commission created; membership.
There is hereby created within the Department a Public
Officers and Employees Liability Insurance Commission. The Commission shall
consist of 11 members who shall be appointed as follows: the Commissioner shall
appoint six members as follows: two members who are members of the insurance
industry who may be chosen from a list of three six nominees
submitted to the Commissioner by the Independent Insurance Agents of North
Carolina, Inc., and a list of three nominees submitted by the Carolinas
Association of Professional Insurance Agents, North Carolina Division; Inc.;
one member who is employed by a police department who may be chosen from a
list of three nominees submitted to the Commissioner jointly by the North
Carolina Police Chiefs Association and North Carolina Police Executives
Association, and one member who is employed by a sheriff's department who may
be chosen from a list of three nominees submitted to the Commissioner by the
North Carolina Sheriff's Association; one member representing city government
who may be chosen from a list of three nominees submitted to the Commissioner
by the North Carolina League of Municipalities; and one member representing
county government who may be chosen from a list of three nominees submitted to
the Commissioner by the North Carolina Association of County Commissioners; and
the General Assembly shall appoint two persons, one upon the recommendation of
the Speaker of the House of Representatives, and one upon the recommendation of
the President Pro Tempore of the Senate. The Commissioner or his the
Commissioner's designate shall be an ex officio member. Appointments by the
General Assembly shall be made in accordance with G.S. 120-121, and vacancies
in those appointments shall be filled in accordance with G.S. 120-122. The
terms of the initial appointees by the General Assembly shall expire on June
30, 1983. The Secretary of the Department of Crime Control and Public Safety or
his the Secretary's designate shall be an ex officio member. The
Attorney General or his the Attorney General's designate shall be
an ex officio member. One insurance industry member appointed by the
Commissioner shall be appointed to a term of two years and one insurance
industry member shall be appointed to a term of four years. The police
department member shall be appointed to a term of two years and the sheriff's
department member shall be appointed to a term of four years. The
representative of county government shall be appointed to a term of two years
and the representative of city government to a term of four years. Beginning
July 1, 1983, the appointment made by the General Assembly upon the
recommendation of the Speaker shall be for two years, and the appointment made
by the General Assembly upon the recommendation of the President Pro Tempore of
the Senate shall be for four years. Except as provided in this section, if any
vacancy occurs in the membership of the Commission, the appointing authority
shall appoint another person to fill the unexpired term of the vacating member.
After the initial terms established herein have expired, all appointees to the
Commission shall be appointed to terms of four years.
The Commission members shall elect the chairman and
vice-chairman chair and vice-chair of the Commission. The Commission
may, by majority vote, remove any member of the Commission for chronic
absenteeism, misfeasance, malfeasance or other good cause."
Section 6.2. G.S. 58-37-35(d) reads as rewritten:
"(d) The Facility shall be
administered by a Board of Governors. The Board of Governors shall
consist of 12 members having one vote each from the classifications hereinafter
enumerated plus the Commissioner who shall serve ex officio without vote.
Each Facility insurance company member serving on the Board shall be
represented by a senior officer of the company. Not more than one company
in a group under the same ownership or management shall be represented on the
Board at the same time. Five members of the Board shall be selected by
the member insurers, which members shall be fairly representative of the
industry. To insure representative member insurers, one each shall be
selected from the following groups: the American Insurance Association (or its
successors), the Alliance of American Insurers (or its successors), the
National Association of Independent Insurers (or its successors), all other
stock insurers not affiliated with the above groups, and all other nonstock
insurers not affiliated with the above groups. The Commissioner shall
appoint two members of the Board who shall be Facility insurance company
members domiciled in this State. The Commissioner shall appoint one
member of the Board who shall be selected from a list of two nominees submitted
by the Auto Insurance Agents of North Carolina, Inc. The Commissioner
shall appoint four members of the Board who shall be fire and casualty
insurance agents licensed in this State and actively engaged in writing motor
vehicle insurance in this State. The Commissioner shall select one
agent two agents from among a list of two four nominees
submitted by the Independent Insurance Agents of North Carolina, Inc., and
one agent from among a list of two nominees submitted by the Carolinas
Association of Professional Insurance Agents. Inc., (or its
successors). The initial term of office of said Board members shall
be two years. Following completion of initial terms, successors to the
members of the original Board of Governors shall be selected to serve three
years. All members of the Board of Governors shall serve until their
successors are selected and qualified and the Commissioner may fill any vacancy
on the Board from any of the aforementioned classifications until such
vacancies are filled in accordance with the provisions of this Article.
The Board of Governors of the Facility shall also have as nonvoting members two
persons who are not employed by or affiliated with any insurance company or the
Department and who are appointed by the Governor to serve at his the
Governor's pleasure."
Section 6.3. G.S. 58-33-135(b) reads as rewritten:
"(b) The fire and
casualty property and liability advisory committee shall comprise:
(1) Two employees of the Department of Insurance;
(2) One representative Two
representatives from a list of two four nominees submitted by
the Independent Insurance Agents of North Carolina;
(3) One
representative from a list of two nominees submitted by the Carolinas
Association of Professional Insurance Agents (North Carolina Division);
(4) One representative of
a licensed property and casualty liability insurance company
writing business in this State that operates through an exclusive agency force;
(5) One representative from a list of two nominees submitted by the North Carolina Adjusters Association;
(6) One representative of fire property and casualty liability insurers from a list of two nominees submitted by the Association of North Carolina Property and Casualty Insurance Companies; and
(7) One representative from a list of two nominees submitted by the Department of Community Colleges."
PART VII. MISCELLANEOUS CORRECTIONS.
Section 7.1. G.S. 58-3-15 reads as rewritten:
"§ 58-3-15. Additional or coinsurance clause.
No insurance company or agent licensed to do business in this
State may issue any policy or contract of insurance covering property in this
State which shall contain that contains any clause or provision
requiring the insured to take or maintain a larger amount of insurance than
that expressed in such the policy, nor in any way provide that
the insured shall be liable as a coinsurer with the company issuing the policy
for any part of the loss or damage to the property described in such the
policy, and any such clause or provision shall be null and void, and of no
effect: Provided, the coinsurance clause or provision may be written in
or attached to a policy or policies issued when there is printed or stamped on
the filing face declarations page of such the policy
or on the form containing such the clause the words 'coinsurance
contract,' and the Commissioner may, in his the Commissioner's discretion,
determine the location of the words 'coinsurance contract' and the size of the
type to be used. If there be is a difference in the rate
for the insurance with and without the coinsurance clause, the rates for each
shall be furnished the insured upon request."
Section 7.2. G.S. 58-30-5 reads as rewritten:
"§ 58-30-5. Persons covered.
The proceedings authorized by this Article may be applied to:
(1) All insurers who that
are doing, or have done, an insurance business in this State, and against
whom claims arising from that business may exist now or in the future.
(2) All insurers who that
purport to do an insurance business in this State.
(3) All insurers who that
have insureds resident in this State.
(4) All persons organized or in the process of organizing with the intent to do an insurance business in this State.
(5) All persons subject to Articles 64, 65 and 66, or 67 of this Chapter; except to the extent there is a conflict between the provisions of this Article and the provisions of those Articles, in which case those Articles will govern.
(6) Self-insured group
workers' compensation funds organized under G.S. 97-93(a)(2). subject
to Article 47 of this Chapter."
Section 7.3. G.S. 58-30-10(14) reads as rewritten:
"(14) 'Insurer' means any entity that is
or should be licensed under Articles 7, 16, 26, 47, 49, 65, or 67 of
this Chapter and any employer that has furnished to the Commissioner
satisfactory proof of its financial responsibility under G.S. 97-93(a)(2). or
under Article 5 of Chapter 97 of the General Statutes. For the purposes
of this Article, 'insurer' also includes continuing care retirement centers that
are or should be licensed under Article 64 of this Chapter."
PART VIII. AUTOMOBILE INSURANCE.
Section 8.1. G.S. 58-36-75(c) is repealed.
Section 8.2. G.S. 58-37-1(7) reads as rewritten:
"(7) 'Motor vehicle insurance' means direct insurance against liability arising out of the ownership, operation, maintenance or use of a motor vehicle for bodily injury including death and property damage and includes medical payments and uninsured and underinsured motorist coverages.
With respect to motor carriers who are subject to the financial responsibility requirements established under the Motor Carrier Act of 1980, the term, 'motor vehicle insurance' includes coverage with respect to environmental restoration. As used in this subsection the term, 'environmental restoration' means restitution for the loss, damage, or destruction of natural resources arising out of the accidental discharge, dispersal, release, or escape into or upon the land, atmosphere, water course, or body of water of any commodity transported by a motor carrier. Environmental restoration includes the cost of removal and the cost of necessary measures taken to minimize or mitigate damage to human health, the natural environment, fish, shellfish, and wildlife."
Section 8.3. G.S. 58-37-35(b)(2) reads as rewritten:
"(2) Additional ceding privileges for motor vehicle insurance shall be provided by the Board of Governors if there is a substantial public demand for a coverage or coverage limit of any component of motor vehicle insurance up to the following:
Bodily injury liability: one hundred thousand dollars ($100,000) each person, three hundred thousand dollars ($300,000) each accident;
Property damage liability: fifty thousand dollars ($50,000) each accident;
Medical payments: two thousand dollars ($2,000) each person;
Underinsured motorist: one hundred thousand dollars ($100,000) one
million dollars ($1,000,000) each person and three hundred thousand
dollars ($300,000) each accident for bodily injury liability;
Uninsured motorist: one hundred thousand dollars ($100,000) one
million dollars ($1,000,000) each person and each accident for bodily
injury and fifteen thousand dollars ($15,000) fifty thousand dollars
($50,000) for property damage (one hundred dollars ($100.00)
deductible)."
Section 8.4. G.S. 58-37-35(e) reads as rewritten:
"(e) The Commissioner and
member companies shall provide for a Board of Governors within 30 days after
May 24, 1973. If any member seat on the initial Board of Governors is not
filled in accordance with this Article within such time, then, in that event
the Commissioner shall appoint natural persons from any of the classifications
specified in subsection (d) of this section to serve the initial term on the
Board of Governors. As soon as possible after its selection, the
Commissioner shall call for the initial meeting of the Board. Governors.
After the The Board of Governors have been selected it shall
then elect from its membership a chairman chair and shall then
meet thereafter as often as at the call of the chairman
shall require chair or at the request of three four members
of the Board of Governors. The chairman chair shall retain
the right to vote on all issues. Five Seven members of the
Board of Governors shall constitute a quorum. The same member may not
serve as chairman chair for more than two consecutive years. years;
provided, however, that a member may continue to serve as chair until a
successor chair is elected and qualified."
Section 8.5. G.S. 58-37-40(e) reads as rewritten:
"(e) Upon approval of the Commissioner of the plan so submitted or promulgation of a plan deemed approved by the Commissioner, all insurance companies licensed to write motor vehicle insurance in this State or any component thereof as a prerequisite to further engaging in writing the insurance shall formally subscribe to and participate in the plan so approved.
The plan of operation shall provide for, among other matters,
(i) the establishment of necessary facilities; (ii) the management of the
Facility; (iii) the preliminary assessment of all members for initial expenses
necessary to commence operations; (iv) the assessment of members if necessary
to defray losses and expenses; (v) the distribution of gains to defray losses
incurred since September 1, 1977; (vi) the distribution of gains by credit or
reduction of recoupment or allocation surcharges to policies subject to
recoupment or allocation surcharges pursuant to this Article (the
Facility may apportion the distribution of gains among the coverages eligible
for cession pursuant to this Article); (vii) the recoupment or allocation of
losses sustained by the Facility since September 1, 1977, pursuant to this
Article, which losses may be recouped by equitable pro rata assessment of member
companies; companies or by way of a surcharge on motor vehicle policies
issued by member companies or through the Facility; (viii) the standard
amount (one hundred percent (100%) or any equitable lesser amount) of coverage
afforded on eligible risks which a member company may cede to the Facility; and
(ix) the procedure by which reinsurance shall be accepted by the Facility. The
plan shall further provide that:
(1) Members of the Board of Governors shall receive reimbursement from the Facility for their actual and necessary expenses incurred on Facility business, en route to perform Facility business, and while returning from Facility business plus a per diem allowance of twenty-five dollars ($25.00) a day which may be waived.
(2) In order to obtain a transfer of business to the Facility effective when the binder or policy or renewal thereof first becomes effective, the company must within 30 days of the binding or policy effective date notify the Facility of the identification of the insured, the coverage and limits afforded, classification data, and premium. The Facility shall accept risks at other times on receipt of necessary information, but acceptance shall not be retroactive. The Facility shall accept renewal business after the member on underwriting review elects to again cede the business."
Section 8.6. G.S. 58-37-40(f) reads as rewritten:
"(f) The plan of operation
shall provide that every member shall, following payment of any pro rata
assessment, commence begin recoupment of that assessment by way
of a surcharge on motor vehicle insurance policies issued by the member or
through the Facility until the assessment has been recouped. Such Any
surcharge under this subsection or under subsection (e) of this section shall
be a percentage of premium adopted by the Board of Governors of the Facility;
and the charges determined on the basis of the surcharge shall be combined with
and displayed as a part of the applicable premium charges. Provided,
however, that recoupment Recoupment of losses sustained by the
Facility since September 1, 1977, with respect to nonfleet private passenger
motor vehicles may be recouped made only by surcharging nonfleet
private passenger motor vehicle insurance policies. policies (i) that
are subject to the classification plan promulgated pursuant to G.S. 58-36-65
and (ii) to which one or more driving record points have been assigned pursuant
to said plan, subject to the provisions of G.S. 58-36-75. If the
amount collected during the period of surcharge exceeds assessments paid by the
member to the Facility, the member shall pay over the excess to the Facility on
a date specified by the Board of Governors. If the amount collected during the
period of surcharge is less than the assessments paid by the member to the
Facility, the Facility shall pay the difference to the member. Except as hereinafter
provided, otherwise provided in this Article, the amount of
recoupment shall not be considered or treated as a rate or premium for any
purpose. The Board of Governors shall adopt and implement a plan for
compensation of agents of Facility members when recoupment surcharges are imposed;
such that compensation shall not exceed the compensation or
commission rate normally paid to the agent for the issuance or renewal of the
automobile liability policy issued through the North Carolina Reinsurance
Facility affected by such surcharge; provided, however, that the
surcharge. However, the surcharge provided for in this section shall
include an amount necessary to recover the amount of the assessment to member
companies and the compensation paid by each member, pursuant to under
this section, to agents."
Section 8.7. G.S. 58-37-35(g)(8) reads as rewritten:
"(8) To establish fair and
reasonable procedures for the sharing among members of any loss on Facility
business which that cannot be recouped pursuant to under
G.S. 58-37-40(f) G.S. 58-37-40(e) or which cannot be
recouped or allocated under G.S. 58-37-75, and other costs, charges,
expenses, liabilities, income, property and other assets of the Facility and
for assessing or distributing to members their appropriate shares. Such The
shares may be based on the member's premiums for voluntary business for the
appropriate category of motor vehicle insurance or by any other fair and
reasonable method."
Section 8.8. G.S. 58-37-35(l) reads as rewritten:
"(l) The
classifications, rules, rates, rating plans and policy forms used on motor
vehicle insurance policies reinsured by the Facility may be made by the
Facility or by any licensed or statutory rating organization or bureau on its
behalf and shall be filed with the Commissioner. The Board of Governors
shall establish a separate subclassification within the Facility for 'clean risks'
as herein defined. risks'. For the purpose of this Article, a
'clean risk' shall be is any owner of a nonfleet private
passenger motor vehicle as defined in G.S. 58-40-10, if the owner, principal
operator, and each licensed operator in the owner's household have two years'
driving experience as licensed drivers and if none of the persons has been
assigned any Safe Driver Incentive Plan points under Article 36 of this Chapter
during the three-year period immediately preceding either (i) the date of
application for a motor vehicle insurance policy or (ii) the date of
preparation of a renewal of a motor vehicle insurance policy. Such The
filings may incorporate by reference any other material on file with the
Commissioner. Rates shall be neither excessive, inadequate nor unfairly
discriminatory. If the Commissioner finds, after a hearing, that a rate
is either excessive, inadequate or unfairly discriminatory, he the
Commissioner shall issue an order specifying in what respect it is
deficient and stating when, within a reasonable period thereafter, such rate
shall be deemed the rate is no longer effective. Said The
order is subject to judicial review as set out in Article 2 of this
Chapter. Pending judicial review of said order, the filed classification
plan and the filed rates may be used, charged and collected in the same manner
as set out in G.S. 58-40-45 of this Chapter. Said The order
shall not affect any contract or policy made or issued prior to before
the expiration of the period set forth in the order. All rates shall
be on an actuarially sound basis and shall be calculated, insofar as is
possible, to produce neither a profit nor a loss. However, the rates made
by or on behalf of the Facility with respect to 'clean risks', as defined
above, risks' shall not exceed the rates charged 'clean risks' who
are not reinsured in the Facility. The difference between the actual rate
charged and the actuarially sound and self-supporting rates for 'clean risks'
reinsured in the Facility may be recouped in similar manner as assessments pursuant
to G.S. 58-37-40(f) or allocated pursuant to G.S. 58-37-75. under G.S.
58-37-40(f). Rates shall not include any factor for underwriting
profit on Facility business, but shall provide an allowance for
contingencies. There shall be a strong presumption that the rates and
premiums for the business of the Facility are neither unreasonable nor
excessive."
Section 8.9. G.S. 58-37-75 is repealed.
PART IX. CERTIFICATE OF AUTHORITY CONFORMING NAME CHANGE.
Section 9.1. The phrase "certificate of authority" is deleted and replaced by the word "license" wherever it occurs in each of the following sections of the General Statutes:
G.S. 58-4-15. Revocation of certificate of authority.
G.S. 58-7-55. Exceptions to requirements of G.S. 58-7-50.
G.S. 58-7-70. Effects of redomestication.
G.S. 58-15-5. Definitions.
G.S. 58-16-35. Unauthorized Insurers Process Act.
G.S. 58-24-45. Organization.
G.S. 58-24-145. Injunction - Liquidation - Receivership of domestic society.
G.S. 58-28-15. Validity of acts or contracts of unauthorized company shall not impair obligation of contract as to the company; maintenance of suits; right to defend.
G.S. 58-28-45. Uniform Unauthorized Insurers Act.
G.S. 58-30-10. Definitions.
G.S. 58-30-55. Condition on release from delinquency proceedings.
G.S. 58-30-260. Conservation of property of foreign or alien insurers found in this State.
G.S. 58-33-132. Qualifications of instructors.
G.S. 58-41-55. Penalties; restitution.
G.S. 58-48-35. Powers and duties of the Association.
G.S. 58-48-45. Duties and powers of the Commissioner.
Section 9.2. G.S. 58-43-35 reads as rewritten:
"§ 58-43-35. Punishment for issuing fire policies contrary to law.
Any insurance company or agent who makes, issues, or delivers
a policy of fire insurance in willful violation of the provisions of Articles 1
through 64 of this Chapter which that prohibit a domestic
insurance company from issuing policies before obtaining certificate and
authority a license from the Commissioner of Insurance; Commissioner;
or which that prohibit the issuing of a fire insurance policy
for more than the fair value of the property or for a longer term than seven
years; or which that prohibit stipulations in insurance contracts
restricting the jurisdiction of courts, or limiting the time within which an
action may be brought to less than one year after the cause of action accrues
or to less than six months after a nonsuit by the plaintiff, shall be guilty of
a Class 3 misdemeanor and shall, upon conviction, be punished only by a fine of
not less than one thousand dollars ($1,000) nor more than five thousand dollars
($5,000); but the policy shall be binding upon the company issuing it."
Section 9.3. G.S. 58-57-80 reads as rewritten:
"§ 58-57-80. Penalties.
In addition to any other penalty provided by law, any person,
firm or corporation which willfully violates an order of the Commissioner after
it has become final, and while such order is in effect, shall, upon proof
thereof to the satisfaction of the court, forfeit and pay to the State of North
Carolina a sum not to exceed one thousand dollars ($1,000) which may be
recovered in a civil action, except that if such violation is found to be
willful, the amount of such penalty shall be a sum not to exceed five thousand
dollars ($5,000). The Commissioner, in his discretion, may revoke or
suspend the license or certificate of authority of the person, firm or
corporation guilty of such willful violation. Such order for suspension
or revocation shall be upon notice and hearing, and shall be subject to
judicial review as provided in G.S. 58-57-75. Any creditor who requires
credit life insurance or credit accident and health insurance, or both, in
excess of the amounts set forth in G.S. 58-57-15 or who violates the provisions
of G.S. 58-57-65 shall be guilty of a Class 3 misdemeanor, the penalty for
which shall only be a fine of two thousand dollars ($2,000) for each such
occurrence or violation."
PART X. RESERVED.
PART XI. EXAMINATION LAW - CROSS REFERENCE CORRECTIONS.
Section 11.1. G.S. 58-3-155(c) reads as rewritten:
"(c) No licensed property
or casualty insurer that has control of a broker may accept insurance from the
broker in any transaction in which the broker, when the insurance is placed, is
acting as such on behalf of the insured for any compensation, commission, or
thing of value unless the broker, before the effective date of the coverage,
delivers written notice to the prospective insured disclosing the relationship
between the insurer and broker. The disclosure must be signed by the
insured and must be retained in the insurer's underwriting file until the
completion and release of the examination report under G.S. 58-2-131,
58-2-132, and 58-2-133 G.S. 58-2-131 through G.S. 58-2-134 for the
period in which the coverage is in effect. If the insurance is placed
through a subbroker that is not a controlled broker, the controlling insurer
shall retain in its records a signed commitment from the subbroker that the
subbroker is aware of the relationship between the insurer and the broker and
that the subbroker has notified or will notify the insured."
Section 11.2. G.S. 58-20-30 reads as rewritten:
"§ 58-20-30. Financial monitoring and evaluation of clubs.
Each club shall be audited annually, at the Club's expense,
by a certified public accounting firm. A copy of the audit report shall be
furnished to each member, and to the Commissioner. The trustees shall
obtain an appropriate actuarial evaluation of the loss and loss adjustment
expenses reserves of the Club, including estimate of losses and loss adjustment
expenses incurred but not reported. The provisions of G.S. 58-2-131
through G.S. 58-2-133, G.S. 58-2-134, G.S. 58-2-150, 58-2-160,
58-2-165, 58-2-180, 58-2-185, 58-2-190, 58-2-200, and G.S. 58-6-5 apply to each
Club and to persons that administer the Clubs."
Section 11.3. G.S. 58-21-40(c) reads as rewritten:
"(c) The Commissioner may, at times deemed appropriate, make or cause to be made an examination of each advisory organization; in which case the provisions of G.S. 58-2-131, 58-2-132, 58-2-133, 58-2-134, 58-2-150, 58-2-155, 58-2-180, 58-2-185, 58-2-190, 58-2-195, and 58-2-200 shall apply. If the Commissioner finds the advisory organization or any member thereof to be in violation of this Article, the Commissioner may issue an order requiring the discontinuance of the violation."
Section 11.4. G.S. 58-23-26(c) reads as rewritten:
"(c) Each pool is subject to G.S. 58-2-131, 58-2-132, 58-2-133, 58-2-134, 58-2-150, 58-2-155, 58-2-165, 58-2-180, 58-2-185, 58-2-190, 58-2-200, 58-3-71, 58-3-75, 58-3-81, 58-3-105, 58-6-5, 58-7-21, 58-7-26, 58-7-30, 58-7-31, 58-7-50, 58-7-55, 58-7-140, 58-7-160, 58-7-162, 58-7-163, 58-7-165, 58-7-167, 58-7-168, 58-7-170, 58-7-172, 58-7-173, 58-7-175, 58-7-177, 58-7-179, 58-7-180, 58-7-183, 58-7-185, 58-7-187, 58-7-188, 58-7-192, 58-7-193, 58-7-195, 58-7-197, 58-7-200, and Articles 13, 19, and 34 of this Chapter. Annual financial statements required by G.S. 58-2-165 shall be filed by each pool within 60 days after the end of the pool's fiscal year, subject to extension by the Commissioner."
Section 11.5. G.S. 58-26-10 reads as rewritten:
"§ 58-26-10. Financial statements and licenses required.
Title insurance companies are subject to G.S. 58-2-131, 58-2-132, 58-2-133, 58-2-134, 58-2-165, 58-2-180, and 58-6-5. The Commissioner may require title insurance companies to separately report their experience in insuring titles and in insuring closing services. The Commissioner shall annually license such companies and their agents."
Section 11.6. G.S. 58-34-2(m) reads as rewritten:
"(m) The acts of an MGA are
considered to be the acts of the insurer on whose behalf it is acting. An MGA
may be examined by the Commissioner under G.S. 58-2-131, 58-2-132, or
58-2-133 G.S. 58-2-131 through G.S. 58-2-134 as if it were an
insurer."
Section 11.7. G.S. 58-47-100 reads as rewritten:
"§ 58-47-100. Examinations.
G.S. 58-2-131, 58-2-132, and 58-2-133 G.S. 58-2-131
through G.S. 58-2-134 apply to groups."
Section 11.8. G.S. 58-47-195 reads as rewritten:
"§ 58-47-195. Examinations.
TPAs and service companies may be examined under G.S.
58-2-131, 58-2-132, and 58-2-133. G.S. 58-2-131 through G.S. 58-2-134."
Section 11.9. G.S. 58-64-55 reads as rewritten:
"§ 58-64-55. Examinations; financial statements.
The Commissioner or the Commissioner's designee may, in the Commissioner's discretion, visit a facility offering continuing care in this State to examine its books and records. Expenses incurred by the Commissioner in conducting examinations under this section shall be paid by the facility examined. The provisions of G.S. 58-2-131, 58-2-132, 58-2-133, 58-2-134, 58-2-155, 58-2-165, 58-2-180, 58-2-185, 58-2-190, and 58-6-5 apply to this Article and are hereby incorporated by reference."
Section 11.10. G.S. 58-67-100(a) reads as rewritten:
"(a) The Commissioner may
make an examination of the affairs of any health maintenance organization and
the contracts, agreements or other arrangements pursuant to its health care
plan as often as the Commissioner deems it necessary for the protection of the
interests of the people of this State but not less frequently than once every
three years. Examinations shall otherwise be conducted under G.S.
58-2-131, 58-2-132, and 58-2-133. G.S. 58-2-131 through G.S. 58-2-134."
Section 11.11. G.S. 143-215.94I(g) reads as rewritten:
"(g) Each pool shall be audited annually at the expense of the pool by a certified public accounting firm, with a copy of the report available to the governing body or chief executive officer of each member of the pool and to the Commissioner. The board of trustees of the pool shall obtain an appropriate actuarial evaluation of the loss and loss adjustment expense reserves of the pool, including an estimate of losses and loss adjustment expenses incurred but not reported. The provisions of G.S. 58-2-131, 58-2-132, 58-2-133, 58-2-134, 58-2-150, 58-2-155, 58-2-165, 58-2-180, 58-2-185, 58-2-190, 58-2-200, and 58-6-5 apply to each pool and to persons that administer the pools. Annual financial statements required by G.S. 58-2-165 shall be filed by each pool within 60 days after the end of the pool's fiscal year. All financial statements required by this section shall be prepared in accordance with generally accepted statutory accounting principles."
PART XII. MOTOR CLUBS.
Section 12.1. G.S. 58-69-1, 58-77-1, and 58-77-5 are repealed.
Section 12.2. Article 69 of Chapter 58 of the General Statutes is amended by adding a new section to read:
"§ 58-69-2. Definitions.
As used in this Article:
(1) 'Branch or district office' means any physical location, other than a motor club's home office, where the motor club or its representatives conduct any type of business authorized under this Article.
(2) 'Motor club' means any person, whether or not residing, domiciled, or chartered in this State, that, in consideration of dues, assessments, or periodic payments of money, promises its members to assist them in matters relating to the ownership, operation, use, or maintenance of motor vehicles by rendering three or more of the following services:
a. Automobile theft reward service. - A reward payable to any person, law enforcement agency, or officer for information leading to the recovery of a member's stolen vehicle and to the apprehension and conviction of the person or persons unlawfully taking the vehicle.
b. Bail or cash appearance bond service. - The furnishing of cash or a surety bond for a member accused of a violation of the motor vehicle law, or of any law of this State by reason of an automobile accident to secure the member's release and subsequent appearance in court.
c. Emergency road service. - Roadside adjustment of a motor vehicle so that the vehicle may be operated under its own power.
d. Legal service. - Providing for reimbursement to a member for attorneys' fees if criminal proceedings are instituted against the member as a result of the operation of a motor vehicle.
e. Map service. - The furnishing of road maps to members without cost.
f. Personal travel and accident insurance service. - Making available to members a personal travel and accident insurance policy issued by a duly licensed insurance company in this State.
g. Touring service. - The furnishing of touring information to members without cost.
h. Towing service. - Furnishing means to move a motor vehicle from one place to another under power other than its own.
(3) 'Licensee' means a motor club to which a license has been issued under this Article."
Section 12.3. Article 69 of Chapter 58 of the General Statutes is amended by adding a new section to read:
"§ 58-69-50. Authority for qualified surety companies to guarantee certain arrest bond certificates.
(a) Any domestic or foreign surety company that is authorized to do business in this State may become a surety, by filing with the Department an undertaking to become a surety, in an amount not to exceed one thousand five hundred dollars ($1,500) with respect to each guaranteed arrest bond certificate issued by a motor club.
(b) The undertaking shall be in a form to be prescribed by the Department and shall state:
(1) The name and address of the motor club or clubs with respect to which the surety company undertakes to guarantee the arrest bond certificates.
(2) The unqualified obligation of the surety company to pay the fine or forfeiture, in an amount not to exceed one thousand five hundred dollars ($1,500) of any person who, after posting a guaranteed arrest bond certificate which the surety has undertaken to guarantee, fails to make the appearance for which the guaranteed arrest bond certificate was posted."
Section 12.4. Article 69 of Chapter 58 of the General Statutes is amended by adding a new section to read:
"§ 58-69-55. Guaranteed arrest bond certificates accepted.
(a) Any guaranteed arrest bond certificate guaranteed by a surety company under G.S. 58-69-50 shall be accepted in lieu of cash bail or other bond in an amount not to exceed one thousand five hundred dollars ($1,500) as a bail bond, when signed by the person whose signature appears on the certificate, to guarantee the appearance of that person in any court in this State at the time set by the court when the person is arrested for the violation of any motor vehicle law of this State or any motor vehicle ordinance of any municipality of this State. The guaranteed arrest bond certificate shall not apply to, and shall not be accepted in lieu of, cash bail or bond when the person has been arrested for any impaired driving offense or for any felony.
(b) A guaranteed arrest bond certificate that is posted as a bail bond in any court shall be subject to the forfeiture and enforcement provisions with respect to bail bonds in criminal cases as provided by law."
PART XIII. WORKERS' COMPENSATION SELF-INSURANCE.
Section 13.1. G.S. 58-47-65(f)(3) reads as rewritten:
"(3) An individual
application, under G.S. 58-47-125, of each member applying for coverage in the
proposed group on the inception date of the proposed group, with a current GAAP
financial statement of the each member. The financial
statements are confidential, but the Commissioner may use them in any judicial
or administrative proceeding."
Section 13.2. G.S. 58-47-85(2)c. reads as rewritten:
"c. Adopt a policy whereby every member:
1. Pays a deposit to the group of twenty-five percent (25%) of the member's estimated annual earned premium, or another amount that the Commissioner prescribes based on, but not limited to, the financial condition of the group and the risk retained by the group; or
2. Once every year files with the group the member's most recent year-end balance sheet, which, at a minimum, is compiled by an independent certified public accountant. The balance sheet shall demonstrate that the member's financial position does not show a deficit equity and is appropriate for membership in the group. At the request of the Commissioner, the group shall make these filings available for review. These filings shall be kept confidential; provided that the Commissioner may use that information in any judicial or administrative proceeding."
Section 13.3. G.S. 58-47-120(f)(11) reads as rewritten:
"(11) Qualifications for group membership,
including underwriting guidelines and procedures to identify members any
member that are is in a hazardous financial conditions.
condition."
Section 13.4. Reserved.
Section 13.5. G.S. 97-165(2) reads as rewritten:
"(2) 'Certified audit'
means an audit on which a certified public accountant expresses his or her
professional opinion that the accompanying statements fairly present the
financial position of the self-insurer, in conformity with generally accepted
accounting principles as considered necessary by the auditor under the
circumstances. principles."
Section 13.6. G.S. 97-170(c) reads as rewritten:
"(c) Only an applicant whose
employee base is actuarially sufficient in numbers and provides an actuarially
appropriate spreading of risk and whose total fixed assets amount to five
hundred thousand dollars ($500,000) or more may apply for a license. In judging
the applicant's financial strength and liquidity relative to its ability to
comply with the Act, the Commissioner shall consider the applicant's:
(1) Organizational structure and management;
(2) Financial strength;
(3) Source and reliability of financial information;
(4) Risks to be retained;
(5) Workers' compensation loss history;
(6) Number of employees;
(7) Claims administration;
(8) Excess insurance; and
(9) Access to excess insurance
or reinsurance. insurance."
Section 13.7. G.S. 97-170(d)(4) is repealed.
Section 13.8. G.S. 97-180(b) reads as rewritten:
"(b) Every self-insurer
shall submit within 120 days after the end of its fiscal year a certification
from a qualified actuary setting forth the actuary's opinion relating to loss
and loss adjustment expense reserves for workers' compensation obligations for each
state in which the self-insurer does business. North Carolina. The
certification shall show liabilities, excess insurance carrier and other
qualifying credits, if any, and net retained workers' compensation liabilities.
The qualified actuary shall present an annual report to the self-insurer on the
items within the scope of and supporting the certification, within 90 days
after the close of the self-insurer's fiscal year. Upon request, the report
shall be submitted to the Commissioner."
Section 13.9. G.S. 97-180(d) reads as rewritten:
"(d) Every Upon
the request of the Commissioner, every self-insurer shall submit within
120 days after the end of its fiscal year a report of its annual
payroll information. The report shall summarize payroll, by annual amount paid,
and the number of employees, by classification, using the rules,
classifications, and rates in the most recently approved Workers' Compensation
and Employers' Liability Insurance Manual governing the audits of payrolls and
the adjustments of premiums. Every self-insurer shall maintain true and
accurate payroll records. These payroll records shall be maintained to allow
for verification of the completeness and accuracy of the annual payroll
report."
PART XIV. EFFECT OF HEADINGS.
Section 14. The headings to the parts of this act are a convenience to the reader and are for reference only. The headings do not expand, limit, or define the text of this act.
PART XV. EFFECTIVE DATE.
Section 15. This act is effective when it becomes law, except for Part III of this act, which becomes effective September 1, 1999.
In the General Assembly read three times and ratified this the 24th day of May, 1999.
s/ Dennis A. Wicker
President of the Senate
s/ James B. Black
Speaker of the House of Representatives
s/ James B. Hunt, Jr.
Governor
Approved 4:03 p.m. this 4th day of June, 1999