AN ACT TO MAKE CHANGES IN THE INSURANCE LAWS TO PRIVATIZE ONLINE AND ADMINISTRATIVE PROCESSES FOR LICENSE APPLICANTS, CODIFY THE EXISTING SENIORS' HEALTH INSURANCE INFORMATION PROGRAM, ENSURE ACCURACY IN CERTIFICATES OF INSURANCE, REQUIRE PRIOR APPROVAL OF SMALL GROUP HEALTH INSURANCE RATES AND ENCOURAGE THE SALE OF CHILD-ONLY HEALTH INSURANCE POLICIES, AMEND THE RISK-BASED CAPITAL LAW TO MAINTAIN NAIC ACCREDITATION, PROVIDE AN EXEMPTION FOR LICENSING OF CLAIMS INPUT EMPLOYEES FOR PORTABLE ELECTRONIC DEVICES, PROHIBIT FEDERAL PREEMPTION OF CROP ADJUSTERS' REGULATION, AND EASE THE REGULATORY BURDEN ON THE NORTH CAROLINA SELF-INSURANCE SECURITY ASSOCIATION AND THE ASSOCIATION AGGREGATE SECURITY SYSTEM. Summarized in Daily Bulletin 3/9/11, 4/27/11, and 5/19/11. Enacted June 23, 2011. Sections 1, 4, 10, and 11 are effective July 1, 2011. Sections 3, 5, 6, and 7 are effective October 1, 2011. Section 8 is effective July 1, 2012. The remainder is effective June 23, 2011.
Bill Summaries: H298 (2011-2012 Session)
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Bill H 298 (2011-2012)Summary date: Jun 30 2011 - View summary
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Bill H 298 (2011-2012)Summary date: May 19 2011 - View summary
House committee substitute makes the following changes to 2nd edition. Amends proposed GS 58-3-150(d) to provide that certificate or certificate of insurance does not include a document prepared or issued by an insurance company or producer that is used to verify or show evidence of the existence of property insurance provided to a lender to cover real or personal property which serves as the lender's security for commercial mortgages. Defines commercial mortgages as mortgages or other instruments that create a lien encumbering office, multiunit residential, apartments, commercial, or industrial properties. Provides that the commercial mortgage does not include a lien that encumbers one to four family residential properties. Makes a technical change.
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Bill H 298 (2011-2012)Summary date: Apr 27 2011 - View summary
House committee substitute makes the following changes to 1st edition. Adds a new section GS 58-3-31, establishing the Seniors' Health Insurance Information Program within the Department of Insurance (Department) as a statewide health benefits counseling program to provide the state's Medicare beneficiaries with counseling in Medicare, Medicare supplement insurance, long-term care insurance, and related health care coverage plans.
Eliminates language in new GS 58-50-131(b), which allowed for the request of a hearing in the event the Commissioner of Insurance (Commissioner) disapproves a filing. Eliminates language in new GS 58-50-131(c), which directed the Commissioner to use incurred claims experience and earned premium as basis to establish minimum standards for loss ratios of policies subject to the statute. Replaces the term 'licensed producer' with 'licensed agent' in new GS 58-33-27. Clarifies that nothing in proposed GS 58-3-285(b) requires an insurer to offer nondependent child coverage or maternity coverage within an offer of nondependent child coverage. Creates a new subsection (c) to new GS 58-33-27, stating that if other property losses occur in conjunction with the loss associated with the portable consumer electronic device, the individual who performs duties as described in GS 58-33-10(2) on the total loss, including the loss associated with the portable consumer device, must hold an adjuster's license. Makes clarifying changes to proposed GS 58-33-27(b).
Adds new section to rewrite GS 97-130 to remove the approval of the Commissioner as necessary in the definition of 'Servicing Facility.' Adds new section to rewrite GS 97-131 to remove the approval of the Commissioner as necessary for the Association to perform functions under a Plan of Operation established or amended, or both, by the Board.
Clarifies that the Association must annually operate and provide an Association Aggregate Security System through a combination of cash on deposit in the Fund, securities, surety bonds, irrevocable letters of credit, insurance, reinsurance, or other financial instruments or guarantees owned or entered into by the Association. Makes a conforming change.
Adds new GS 58-8-36, clarifying that statewide multiline limited assessable mutual insurance companies are not subject to GS 58-33-85(b). Adds new subsection (b) to GS 58-64-85 providing that licensed facilities and
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providers that are also subject to the provisions of the North Carolina Condominium Act under GS Chapter 47C are not subject to the provisions of GS Chapter 39A if the facility's declaration of condominium does not require the payment of any fee or charge not otherwise provided for in a resident's contract for continuing care, or other separate contract for the provisions of membership or services.
Makes other technical, organizational, and clarifying changes. Makes conforming changes to the bill title.
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Bill H 298 (2011-2012)Summary date: Mar 9 2011 - View summary
Amends GS 58-2-69(g) to authorize the Commissioner of Insurance (Commissioner) to contract with the National Association of Insurance Commissioners (NAIC) or other parties to provide online services to applicants and licensees, for administrative services, license processing and support services, and regulatory data systems. Allows the NAIC or other contracted party to charge applicants and licensees a reasonable fee for these services, in addition to any applicable license application and renewal fees. Current law exempts contracts for these services from the provisions of Articles 3, 3C, and 8 of GS Chapter 143 (contracting requirements) and Article 3D of GS Chapter 147 (State Information Technology Services). Effective July 1, 2011.
Enacts new subsections (d), (e), (f), and (g) to GS 58-3-150 (forms to be approved by the Commissioner) to define a certificate of insurance as a document prepared or issued by an insurance company or producer used to verify or evidence the existence of property or casualty insurance coverage, but does not include a policy of insurance or insurance binder. States that a certificate of insurance does not amend, extend, or alter the coverage of the policy to which the certificate of insurance refers, and does not confer to a certificate holder new or additional rights beyond those expressly provided in the referenced policy. Makes it unlawful to knowingly prepare, issue, request, or require a certificate of insurance that (1) has not been filed with and approved by the Commissioner; (2) contains any false or misleading information; or (3) purports to alter, amend, or extend the coverage provided by the applicable insurance policy. Provides that a certificate holder will only have a legal right to notice of cancellation, nonrenewal, or any material change if the holder is named in the policy or endorsement, which requires notice. Effective October 1, 2011.
Enacts new GS 58-50-131 to prohibit any schedule of premiums for health benefit plan coverage or amendment from being used with the health benefit plan until a copy of the premium schedule or amendment has been filed with and approved by the Commissioner. Lists requirements for schedules or amendments so filed. Directs the Commissioner to approve or disapprove a schedule of premium rates within 60 days of a complete filing. Provides for notice and a hearing if the Commissioner disapproves the schedule. Requires the Commissioner to adopt rules (1) to prevent the federal preemption of health insurance regulation in North Carolina; (2) to implement the statute's provisions; and (3) to establish minimum standards for loss ratios of policies, as detailed. Effective July 1, 2011.
Enacts new GS 58-3-285 to direct an insurer who offers nondependent child coverage to offer open enrollment either continuously throughout the year or during January and July of each year. Requires this coverage to be issued without any riders based on the child's health status. Clarifies that an insurer may adjust the initial premium to the extent that the adjustment is in compliance with the applicable product's current approved rate filing. Defines terms used in the statute, and directs the Commissioner to adopt rules as necessary and proper to implement the statute. Effective October 1, 2011.
Amends GS 58-12-2 (definitions applicable to Risk-Based Capital Requirements) to add that a health organization is any insurer required by the Commissioner to use the NAIC Health Annual Statement Blank when filing the annual statement under GS 58-2-165. Clarifies that a life or health insurer, a property or casualty insurer, and a domestic insurer do not include any insurer that is required by the Commissioner to use the NAIC Health Annual Statement Blank when it files the annual statement. Makes a conforming change. Effective October 1, 2011.
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Amends GS 58-12-11(a) to add that a company action level event also occurs with the filing of a risk-based capital report that indicates the insurer has total adjusted capital that is greater than or equal to its company action level risk-based capital, as specified, in the case of a property or casualty insurer or health organization. Makes conforming and clarifying changes. Effective October 1, 2011.
Enacts new GS 58-33-27 to provide that no adjuster license is required for an individual who, in connection with insurance on portable consumer electronic devices, collects claim information from or furnishes claim information to insured parties or claimants, conducts data entry as detailed, and does not exercise discretion in the claim disposition, provided the individual is an employee of a licensee under GS Chapter 58 (Insurance Law). States that a producer acting as a supervisor is not required to be licensed as an adjuster. Defines automated claims adjudication system and portable consumer electronic devices. Applies to licenses issued on or after July 1, 2012.
Amends GS 58-33-30(e) by adding new subsection (2a) requiring adjusters who adjust federal crop insurance claims to pass a proficiency examination approved by the federal Risk Management Agency, or another approved exam, as a condition of obtaining an adjuster's license. Amends GS 58-33-30(e)(1) to exempt adjusters who adjust only federal crop insurance claims from the subsection's examination requirements, provided the adjuster is certified under proposed subsection (2a).
Amends GS 97-132 to remove language requiring approval by the Commissioner for appointments to the North Carolina Self-Insurance Security Association (Association) Board of Directors (Board). Amends GS 97-133(a)(1a) (concerning the North Carolina Self-Insurance Security Fund) to delete language providing for Fund segregation in the Board's discretion. Amends GS 97-133(a)(2a) (establishing the Association Aggregate Security System (System)) to remove provisions requiring and explaining a written plan and language referencing the Commissioner, and instead requires the System to notify the Commissioner at least 90 days before termination if the Association determines it is no longer feasible or practical to continue the System. Also directs the Association to require each member to determine annually its total undiscounted claims liability and inform the Association. Amends GS 97-134 (plan of operation) to direct the Board (instead of the Association) to adopt a Plan of Operation. Removes language and provisions requiring approval by the Commissioner. Makes additional conforming and technical changes, and makes a conforming change to GS 97-136. Amends GS 97-137 to require the Board to submit a financial report for the preceding calendar year, before June 1 (rather than March 30) of each year. Amends GS 97-185(a1)(2) to exclude individual self-insurers with a debt rating below the minimum Standard & Poor's or Moody's rating if a minimum debt rating has been established by the Board from the System. Makes these amendments effective July 1, 2011.