GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
H	1
HOUSE BILL 1105
     

 
Short Title:	Insurance Technical Corrections.	()	
Sponsors:	Representative Hurley.	
Referred to:	Insurance.	
April 11, 2001

A BILL TO BE ENTITLED
AN ACT to make technical corrections to the insurance laws.

The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑1‑1 reads as rewritten:
"§ 58‑1‑1.  Title of the Chapter.
This Chapter may be cited and shall be known as the Insurance Law."
SECTION 2.  G.S. 58‑1‑15(b) reads as rewritten:
"(b)	Any warranty made solely by a manufacturer, distributor, or seller of goods or services without charge, or an extended warranty offered as an option and made solely by a manufacturer, distributor, or seller of goods or services for charge, that guarantees indemnity for defective parts, mechanical or electrical breakdown, labor, or any other remedial measure, including replacement of goods or repetition of services, shall not be a contract of insurance under  this Chapter; however, service agreements on motor vehicles are governed by G.S. 58‑1‑25, 58‑1‑35, and 58‑1‑36. Service agreements on home appliances are governed by G.S. 58‑1‑30, 58‑1‑35, and 58‑1‑36."
SECTION 3.  G.S. 58‑2‑40(3) reads as rewritten:
"(3)	Prescribe to the companies, associations, orders, or bureaus required by  this Chapter to report to the Commissioner, the necessary forms for the statements required. The Commissioner may change those forms from time to time when necessary to secure full information as to the standing, condition, and such other information desired of companies, associations, orders, or bureaus under the jurisdiction of the Department."
SECTION 4.  G.S. 58‑2‑40(4) reads as rewritten:
"(4)	Receive and thoroughly examine each financial statement required by  this Chapter."
SECTION 5.  G.S. 58‑2‑40(5) reads as rewritten:
"(5)	Report in detail to the Attorney General any violations of the laws relative to insurance companies, associations, orders and bureaus or the business of insurance; and the Commissioner may institute civil actions or criminal prosecutions either by the Attorney General or another attorney whom the Attorney General may select, for any violation of the provisions of  this Chapter."
SECTION 6.  G.S. 58‑2‑60(a) reads as rewritten:
"(a)	Whenever it appears to the Commissioner that any person has violated, is violating, or threatens to violate any provision of  this Chapter, or Article 9A of Chapter 143 of the General Statutes, he may apply to the superior court of any county in which the violation has occurred, is occurring, or may occur for a restraining order and injunction to restrain such violation. If upon application the court finds that any provision of  those statutes has been violated, is being violated, or a violation thereof is threatened, the court shall issue an order restraining and enjoining the violations; and that relief may be granted regardless of whether criminal prosecution is instituted under any provision of law."
SECTION 7.  G.S. 58‑2‑65 reads as rewritten:
"§ 58‑2‑65.  License surrenders.
This section applies to persons or entities licensed under  this Chapter, or Article 9A of Chapter 143 of the General Statutes. When a licensee is accused of any act, omission, or misconduct that would subject the license to suspension or revocation, the licensee, with the consent and approval of the Commissioner, may surrender the license for a period of time established by the Commissioner. A person or entity who surrenders a license shall not thereafter be eligible for or submit any application for licensure during the period of license surrender."
SECTION 8.  G.S. 58‑2‑90(e) reads as rewritten:
"(e)	Upon any appeal, the rates fixed or any rule, regulation, finding, determination, or order made by the Commissioner under the provisions of  this Chapter shall be prima facie correct."
SECTION 9.  G.S. 58‑2‑150 reads as rewritten:
"§ 58‑2‑150.  Oath required for compliance with law.
Before issuing license to any insurance company to transact the business of insurance in this State, the Commissioner shall require, in every case, in addition to the other requirements provided for by law, that the company file with him the affidavit of its president or other chief officer that it has not violated any of the provisions of  of this Chapter for the space of 12 months last past, and that it accepts the terms and obligations of  this Chapter as a part of the consideration of the license."
SECTION 10.  G.S. 58‑2‑155 reads as rewritten:
"§ 58‑2‑155.  Investigation of charges.
Upon  the Commissioner's own motion or upon complaint being filed by a citizen of this State that a company authorized to do business in the State has violated any of the provisions of Articles 1 through 64 of this Chapter, the Commissioner shall investigate the matter, and, if necessary, examine, under oath, by himself or his accredited representatives the president and  any other officer or agents of  the companies as may be deemed proper; also all books, records, and papers of the same. In case the Commissioner shall find upon substantial evidence that any complaint against a company is justified, said company, in addition to such penalties as are imposed for violation of any of the provisions of  this Chapter, shall be liable for the expenses of the investigation, and the Commissioner shall promptly present  the company with a statement of  the expenses. If the company refuses or neglects to pay, the Commissioner  may bring a civil action for the collection of these expenses."
SECTION 11.  G.S. 58‑3‑5 reads as rewritten:
"§ 58‑3‑5.  No insurance contracts except under Articles 1 through 64 of this Chapter.
Except as provided in G.S. 58‑3‑6, it is unlawful for any company to make any contract of insurance upon or concerning any property or interest or lives in this State, or with any resident of this State, or for any person as insurance agent or insurance broker to make, negotiate, solicit, or in any manner aid in the transaction of such insurance, unless and except as authorized under the provisions of  this Chapter."
SECTION 12.  G.S. 58‑3‑30(a) reads as rewritten:
"(a)	This section applies to the provisions of all group life, group accident, group health, and group accident and health insurance policies and group annuities under  this Chapter that are issued on or after October 1, 1989, and preferred provider arrangements under  this Chapter that are entered into on or after October 1, 1989."
SECTION 13.  G.S. 58‑3‑130 reads as rewritten:
"§ 58‑3‑130.  Agent, adjuster, etc., acting without a license or violating insurance law.
If any person shall assume to act either as principal, agent, broker, limited representative, adjuster or motor vehicle damage appraiser without license as is required by law or, pretending to be a principal, agent, broker, limited representative, adjuster or licensed motor vehicle damage appraiser, shall solicit, examine or inspect any risk, or shall examine into, adjust, or aid in adjusting any loss, investigate or advise relative to the nature and amount of damages to motor vehicles or the amount necessary to effect repairs thereto, or shall receive, collect, or transmit any premium of insurance, or shall do any other act in the soliciting, making or executing any contract of insurance of any kind otherwise than the law permits, or as principal or agent shall violate any provision of law contained in  this Chapter, the punishment for which is not elsewhere provided for,  that person shall be deemed guilty of a Class 1 misdemeanor."
SECTION 14.  G.S. 58‑7‑1 reads as rewritten:
"§ 58‑7‑1.  Application of  this Chapter and general laws.
The general provisions of law relative to the powers, duties, and liabilities of corporations apply to all incorporated domestic insurance companies where pertinent and not in conflict with other provisions of law relative to  those companies or with their charters. All insurance companies of this State shall be governed by  this Chapter, notwithstanding anything in their special charters to the contrary, provided notice of the acceptance of  this Chapter is filed with the Commissioner."
SECTION 15.  G.S. 58‑15‑15(a) reads as rewritten:
"(a)	Except for Article 11 of this Chapter and as otherwise specifically provided, all the provisions of  this Chapter relating to insurers generally, and those relating to insurers writing the same kinds of insurance that reciprocals are permitted to write, are applicable to reciprocals."
SECTION 16.  G.S. 58‑16‑1 reads as rewritten:
"§ 58‑16‑1.  Admitted to do business.
Foreign or alien insurance companies, upon complying with the conditions of  this Chapter applicable to them, may be admitted to transact in this State any class of insurance authorized by the laws in force relative to the duties, obligations, prohibitions, and penalties of insurance companies, and subject to all laws applicable to the transaction of such business by foreign or alien insurance companies and their agents."
SECTION 17.  G.S. 58‑16‑15 reads as rewritten:
"§ 58‑16‑15.  Foreign companies; requirements for admission. 
A company organized under the laws of any other of these United States for the transaction of life insurance may be admitted to do business in this State if it complies with the other provisions of  this Chapter regulating the terms and conditions upon which foreign life insurance companies may be admitted and authorized to do business in this State, and, in the opinion of the Commissioner, is in sound financial condition and has policies in force upon not less than 500 lives for an aggregate amount of not less than five hundred thousand dollars ($500,000). Any life company organized under the laws of any other country than the United States, in addition to the above requirements, must make and maintain the deposit required of  those companies by Article 5 of this Chapter."
SECTION 18.  G.S. 58‑16‑50 reads as rewritten:
"§ 58‑16‑50.  Action to enforce compliance with this Chapter.
Compliance with the provisions of  this Chapter as to deposits, obligations, and prohibitions, and the payment of taxes, fines, fees, and penalties by foreign or alien insurance companies, may be enforced in the ordinary course of legal procedure by action brought in the Superior Court of Wake County by the Attorney General in the name of the State upon the relation of the Commissioner of Insurance."
SECTION 19.  G.S. 58‑22‑30 reads as rewritten:
"§ 58‑22‑30.  Countersignature not required.
A policy of insurance issued to a risk retention group or any member of that group is not required to be countersigned as otherwise provided in  this Chapter."
SECTION 20.  G.S. 58‑22‑50 reads as rewritten:
"§ 58‑22‑50.  Administrative and procedural authority regarding risk retention groups and purchasing groups.
The Commissioner may make use of any of the powers established under this Chapter to enforce the laws of this State as long as those powers are not specifically preempted by the Product Liability Risk Retention Act of 1981, as amended by the Risk Retention Act of 1986. This includes, but is not limited to, the Commissioner's administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders, and seek or impose penalties. With regard to any investigation, administrative proceeding, or litigation, the Commissioner  may rely on the procedural law and regulations of the State. The injunctive authority of the Commissioner in regard to risk retention groups is restricted by the requirement that any injunction be issued by a court of competent jurisdiction."
SECTION 21.  G.S. 58‑33‑120 reads as rewritten:
"§ 58‑33‑120.  Agent, adjuster, etc., acting without a license or violating insurance law.
If any person shall assume to act either as principal, agent, broker, limited representative, adjuster or motor vehicle damage appraiser without license as is required by law or pretending to be a principal, agent, broker, limited representative, adjuster or licensed motor vehicle damage appraiser, shall solicit, examine or inspect any risk, or shall examine into, adjust, or aid in adjusting any loss, investigate or advise relative to the nature and amount of damages to motor vehicles or the amount necessary to effect repairs thereto, or shall receive, collect, or transmit any premium of insurance, or shall do any other act in the soliciting, making or executing any contract of insurance of any kind otherwise than the law permits, or as principal or agent shall violate any provision of law contained in  this Chapter, the punishment for which is not elsewhere provided for, he shall be deemed guilty of a Class 1 misdemeanor."
SECTION 22.  G.S. 58‑34‑5(a) reads as rewritten:
"(a)	Retrospective compensation agreements for business written under  this Chapter must be filed with the Commissioner for the Commissioner's approval."
SECTION 23.  G.S. 58‑50‑25(a) reads as rewritten:
"(a)	No agency, institution or physician providing a service for which payment or reimbursement is required to be made under a policy governed by Articles 1 through 64 or 68 of this Chapter shall be denied such payment or reimbursement on account of the fact that such services were rendered through a registered nurse acting under authority of rules and regulations adopted by the North Carolina Medical Board and the Board of Nursing pursuant to G.S. 90‑6 and G.S. 90‑171.23."
SECTION 24.  G.S. 58‑50‑26 reads as rewritten:
"§ 58‑50‑26.  Physician services provided by physician assistants.
No agency, institution, or physician providing a service for which payment or reimbursement is required to be made under a policy governed by Articles 1 through 64 or 68 of this Chapter shall be denied the payment or reimbursement on account of the fact that the services were rendered through a physician assistant acting under the authority of rules adopted by the North Carolina Medical Board pursuant to G.S. 90‑18.1."
SECTION 25.  G.S. 58‑50‑30(a) reads as rewritten:
"(a)	Discrimination between individuals of the same class in the amount of premiums or rates charged for any policy of insurance covered by Articles 50 through 55 or 68 of this Chapter, or in the benefits payable thereon, or in any of the terms or conditions of such policy, or in any other manner whatsoever, is prohibited.
Whenever any policy of insurance governed by Articles 1 through 64 or 68 of this Chapter provides for payment of or reimbursement for any service rendered in connection with a condition or complaint that is within the scope of practice of a duly licensed optometrist, a duly licensed podiatrist, a duly licensed dentist, a duly licensed chiropractor, a duly certified clinical social worker, a duly certified substance abuse professional, a duly licensed psychologist, a duly licensed pharmacist, a duly certified fee‑based practicing pastoral counselor, a duly licensed physician assistant, or an advanced practice registered nurse, the insured or other persons entitled to benefits under the policy shall be entitled to payment of or reimbursement for the services, whether the services be performed by a duly licensed physician, a duly licensed physician assistant, a duly licensed optometrist, a duly licensed podiatrist, a duly licensed dentist, a duly licensed chiropractor, a duly certified clinical social worker, a duly certified substance abuse professional, a duly licensed psychologist, a duly licensed pharmacist, a duly certified fee‑based practicing pastoral counselor, or an advanced practice registered nurse, notwithstanding any provision contained in the policy. Whenever any policy of insurance governed by Articles 1 through 64 or 68 of this Chapter provides for certification of disability that is within the scope of practice of a duly licensed physician, a duly licensed physician assistant, a duly licensed optometrist, a duly licensed podiatrist, a duly licensed dentist, a duly licensed chiropractor, a duly certified clinical social worker, a duly certified substance abuse professional, a duly licensed psychologist, a duly certified fee‑based practicing pastoral counselor, or an advanced practice registered nurse, the insured or other persons entitled to benefits under the policy shall be entitled to payment of or reimbursement for the disability whether the disability be certified by a duly licensed physician, a duly licensed physician assistant, a duly licensed optometrist, a duly licensed podiatrist, a duly licensed dentist, a duly licensed chiropractor, a duly certified clinical social worker, a duly certified substance abuse professional, a duly licensed psychologist, a duly certified fee‑based practicing pastoral counselor, or an advanced practice registered nurse, notwithstanding any provisions contained in the policy. The policyholder, insured, or beneficiary shall have the right to choose the provider of the services notwithstanding any provision to the contrary in any other statute.
Whenever any policy of insurance provides coverage for medically necessary treatment, the insurer shall not impose any limitation on treatment or levels of coverage if performed by a duly licensed chiropractor acting within the scope of the chiropractor's practice as defined in G.S. 90‑151 unless a comparable limitation is imposed on the medically necessary treatment if performed or authorized by any other duly licensed physician."
SECTION 26.  G.S. 58‑51‑40(a) reads as rewritten:
"(a)	Whenever any policy of insurance governed by Articles 1 through 64 or 68 of this Chapter provides for benefits for charges of hospitals or physicians, the policy shall provide for payments of benefits for charges made for medical care rendered in or by duly licensed State tax‑supported institutions, including charges for medical care of cerebral palsy, other orthopedic and crippling disabilities, mental and nervous diseases or disorders, mental retardation, alcoholism and drug or chemical dependency, and respiratory illness, on a basis no less favorable than the basis which would apply had the medical care been rendered in or by any other public or private institution or provider. The term "State tax‑supported institutions" shall include community mental health centers and other health clinics which are certified as Medicaid providers."
SECTION 27.  G.S. 58‑19‑5(4) reads as rewritten:
"(4)	"Insurer" includes a person subject to  Article 65  or 67 of this Chapter. "Insurer" does not include (1) an agency, authority, or instrumentality of the United States; any of its possessions and territories; the Commonwealth of Puerto Rico; the District of Columbia; nor a state or political subdivision of a state; nor (2) fraternal benefit societies or fraternal orders."
SECTION 28.  G.S. 58‑38‑35(a)(2) reads as rewritten:
"(2)	To all policies of life insurance as described in Article 58 of this Chapter, to all benefit certificates issued by fraternal orders and societies as described in Articles 24 and 25 of this Chapter, to all policies of accident and health insurance as described in Articles 50 through 55 and 68 of this Chapter, to all subscribers' contracts of hospital, medical, and dental service corporations as described in Article 65 of this Chapter, and to all health maintenance organization evidences of coverage as described in Article 67 of this Chapter, that are made, issued, amended, or renewed after July 1, 1983."
SECTION 29.  G.S. 58‑51‑35(c) reads as rewritten:
"(c)	The provisions of this section shall apply to corporations governed by the provisions of Article 65 of this Chapter."
SECTION 30.  G.S. 58‑54‑1(5) reads as rewritten:
"(5)	"Policy" means a Medicare supplement policy, which is a group or individual policy of accident and health insurance under  this Chapter, a subscriber contract under A Article 65 of this Chapter, or an evidence of coverage under Article 67 of this Chapter, other than a policy issued pursuant to a contract under section 1876 or section 1833 of the federal Social Security Act (42 U.S.C. § 1395 et seq.), or an issued policy under a demonstration project authorized pursuant to amendments to the federal Social Security Act, that is advertised, marketed, or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical, or surgical expenses of persons eligible for Medicare."
SECTION 31.  G.S. 58‑48‑35(a)(3) reads as rewritten:
"(3)	Allocate claims paid and expenses incurred among the three accounts separately, and assess member insurers separately for each account amounts necessary to pay the obligation of the Association under subsection (a) above subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, the cost of examinations under G.S. 58‑48‑60 and other expenses authorized by this Article. The assessments of each member insurer shall be in the proportion that the net direct written premiums of the member insurer for the preceding calendar year on the kinds of insurance in the account bears to the net direct written premiums of all member insurers for the preceding calendar year on the kinds of insurance in the account; provided, for purposes of assessment only, premiums otherwise reportable by a servicing insurer under any plan of operation approved by the Commissioner of Insurance under Articles 45 or 46 of this Chapter shall not be deemed to be the net direct written premiums of such servicing insurer or association, but shall be deemed to be the net direct written premiums of the individual insurers to the extent provided for in any such plan of operation. Each member insurer shall be notified of the assessment not later than 30 days before it is due. No member insurer may be assessed in any year on any account an amount greater than two percent (2%) of that member insurer's net direct written premiums for the preceding calendar year on the kinds of insurance in the account. If the maximum assessment, together with the other assets of the Association in any account, does not provide in any one year in any account an amount sufficient to make all necessary payments from that account, the funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as funds become available. The Association may exempt or defer, in whole or in part, the assessment of any member insurer, if the assessment would cause the member insurer's financial statement to reflect amounts of capital or surplus less than the minimum amounts required for a license by any jurisdiction in which the member insurer is authorized to transact insurance. Each member insurer may set off against any assessment, authorized payments made on covered claims and expenses incurred in the payment of such claims by the member insurer if they are chargeable to the account for which the assessment is made."
SECTION 32.  G.S. 58‑31‑40(b) reads as rewritten:
"(b)	No agency or other person authorized or directed by law to select a plan and erect a building for the use of the State or any State institution shall receive and approve of the plan until it is submitted to and approved by the Commissioner as to the safety of the proposed building from fire, including the property's occupants or contents. No agency or person authorized or directed by law to select a plan or erect a building comprising 10,000 square feet or  more for the use of any county, city, or school district shall receive and approve of the plan until it is submitted to and approved by the Commissioner as to the safety of the proposed building from fire, including the property's occupants or contents."
SECTION 33.  G.S. 58‑21‑65(b) reads as rewritten:
"(b)	The Commissioner shall issue a surplus lines license to any qualified holder of a current property and liability broker's or agent's license, but only when the broker or agent has:
(1)	Remitted the fifty dollars ($50.00) annual fee to the Commissioner;
(2)	Submitted a completed license application on a form supplied by the Commissioner, and the application has been approved by the Commissioner;
(3)	Passed a qualifying examination approved by the Commissioner; except that all holders of a license before July 11, 1985 shall be deemed to have passed such an examination; and
(4)	Filed with the Commissioner, and maintains during the term of the license, in force and unimpaired a bond in favor of this State in the sum of ten thousand dollars ($10,000), aggregate liability, with corporate sureties approved by the Commissioner. The bond shall be conditioned that the surplus lines licensee will conduct business in accordance with the provisions of this Article and will promptly remit the taxes as provided by law. No bond shall be terminated unless at least 30 days prior written notice is given to the licensee and Commissioner. A person required by this subdivision to maintain a bond may, in lieu of that bond, deposit with the Commissioner the equivalent amount in cash, in certificates of deposit issued by banks organized under the laws of the State of North Carolina, or any national bank having its principal office in North Carolina, or securities, which shall be held in accordance with Article 5 of this Chapter. Securities may only be obligations of the United States or of federal agencies listed in G.S. 147‑69.1(c)(2) guaranteed by the United States, obligations of the State of North Carolina, or obligations of a city or county of this State. Any proposed deposit of an obligation of a city or county of this State is subject to the prior approval of the Commissioner."
SECTION 34.  G.S. 58‑33‑135(a) reads as rewritten:
"(a)	The Commissioner shall appoint, in accordance with G.S. 58‑2‑30, one advisory committee for property and liability insurance licensees and one advisory committee for life and health insurance licensees. The advisory committees shall recommend reasonable rules to the Commissioner for adoption under G.S. 58‑33‑130. The Commissioner may adopt, reject, or modify the recommendations. After the adoption of rules under G.S. 58‑33‑130, the committees may from time to time make further recommendations to the Commissioner for additional rules or changes in existing rules."
SECTION 35.  G.S. 58‑35‑10(c) reads as rewritten:
"(c)	A property and liability insurance agent or an insurance broker duly licensed in this State who extends credit to and only to  the agent's or broker's own policyholders may charge and collect finance charges or other fees at a periodic (monthly) rate as provided in G.S. 24‑11(a), after that amount has been outstanding for 30 days, and is  exempt from the provisions of this Article. Notwithstanding the exceptions set forth in subsections (a), (b) and (c) of this section, when any person exercises a power of attorney taken in connection with the financing of an insurance premium, that person shall comply with G.S. 58‑35‑85, as if that person were an insurance premium financing company."
SECTION 36. G.S. 58‑36‑1(5)a. reads as rewritten:
"(5)	a.	It is the duty of every insurer that writes workers' compensation insurance in this State and is a member of the Bureau, as defined in this section and G.S. 58‑36‑5 to insure and accept any workers' compensation insurance risk that has been certified to be "difficult to place" by any property and liability insurance agent who is licensed in this State. When any such risk is called to the attention of the Bureau by receipt of an application with an estimated or deposit premium payment and it appears that the risk is in good faith entitled to such coverage, the Bureau will bind coverage for 30 days and will designate a member who must issue a standard workers' compensation policy of insurance that contains the usual and customary provisions found in those policies. Multiple coordinated policies, as defined by the Bureau and approved by the Commissioner, may be used for the issuance of coverage under this subdivision for risks involved in employee leasing arrangements. Coverage will be bound at 12:01 A.M. on the first day following the postmark time and date on the envelope in which the application is mailed including the estimated annual or deposit premium, or the expiration of existing coverage, whichever is later. If there should be no postmark, coverage will be effective 12:01 A.M. on the date of receipt by the Bureau unless a later date is requested. Those applications hand delivered to the Bureau will be effective as of 12:01 A.M. of the date following receipt by the Bureau unless a later date is requested. The Bureau will make and adopt such rules as are necessary to carry this section into effect, subject to final approval of the Commissioner. As a prerequisite to the transaction of workers' compensation insurance in this State, every member of the Bureau that writes workers' compensation insurance  shall file with the Bureau written authority permitting the Bureau to act in its behalf, as provided in this section, and an agreement to accept risks that are assigned to the member by the Bureau, as provided in this section."
SECTION 37.  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  enumerated in this subsection 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 property and liability insurance agents licensed in this State and actively engaged in writing motor vehicle insurance in this State. The Commissioner shall select two agents from among a list of four nominees submitted by the Independent Insurance Agents of North Carolina, 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 the Governor's pleasure."
SECTION 38.  G.S. 58‑37‑35(g)(6) reads as rewritten:
"(6)	Upon the request of any licensed property and liability agent meeting any two of the standards set forth below as determined by the Commissioner within 10 days of the receipt of the application, the Facility shall contract with one or more members within 20 days of receipt of the determination to appoint  the licensed property and liability agent as designated agents in accordance with reasonable rules as are established by the plan of operation. The standards shall be:
a.	Whether the agent's evidence establishes that he has been conducting his business in a community for a period of at least one year;
b.	Whether the agent's evidence establishes that he had a gross premium volume during the 13 months next preceding the date of his application of at least twenty thousand dollars ($20,000) from motor vehicle insurance;
c.	Whether the agent's evidence establishes that the number of eligible risks served by him during the 13 months next preceding the date of application was 200 or more;
d.	Whether the agent's evidence establishes a growth in eligible risks served and premium volume during his years of service as an agent;
e.	Whether the agent's evidence establishes that he made available to eligible risks premium financing or any other plan for deferred payment of premiums.
With respect to business produced by designated agents, adequate provision shall be made by the Facility to assure that such business is rated using Facility rates. All business produced by designated agents may be ceded to the Facility, except designated agents appointed before September 1, 1987, may place liability insurance policies with a voluntary carrier, provided that all policies written by the voluntary carrier are retained by the voluntary carrier unless ceded to the Facility using Facility rates. Designated agents must provide the Facility with a list of such policies written by the voluntary carrier at least annually, or as requested by the Facility, on a form approved by the Facility. If no insurer is willing to contract with any such agent on terms acceptable to the Board, the Facility shall license such agent to write directly on behalf of the Facility. However, for this purpose the Facility does not act as an insurer, but acts only as the statutory agent of all of the members of the Facility, which shall be bound on risks written by the Facility's appointed agent. The Facility may contract with one or more servicing carriers and shall promulgate fair and reasonable underwriting procedures to require that business produced by Facility agents and written through those servicing carriers shall be rated using Facility rates. All business produced by Facility agents may be ceded to the Facility. Any designated agent who is disabled or retiring or the estate of any deceased designated agent may transfer the designation and the book of business to some other licensed fire and casualty agent meeting the requirements of this section and under rules established by the Facility, and a transfer from a designated agent appointed before September 1, 1987, shall entitle the transferee designated agent to place liability insurance policies with a voluntary carrier.
The Commissioner shall require, as a condition precedent to the issuance, renewal, or continuation of a resident agent's license to any designated agent to act for the company appointing such designated agent under contract with the Facility, that the designated agent file and thereafter maintain in force while so licensed a bond in favor of the State of North Carolina executed by an authorized corporate surety approved by the Commissioner, cash, mortgage on real property, or other securities approved by the Commissioner, in the amount of ten thousand dollars ($10,000) for the use of aggrieved persons. Such bond, cash, mortgage, or other securities shall be conditioned on the accounting by the designated agent (i) to any person requesting the designated agent to obtain motor vehicle insurance for moneys or premiums collected in connection therewith, and (ii) to the company providing coverage with respect to any such moneys or premiums under contract with the Facility. Any such bond shall remain in force until the surety is released from liability by the Commissioner, or until the bond is cancelled by the surety. Without prejudice to any liability accrued prior to such cancellation, the surety may cancel the bond upon 30 days' advance notice in writing filed with the Commissioner.
No agent may be designated under this subdivision to any insurer that does not actively write voluntary market business."
SECTION 39.  G.S. 58‑48‑30(a) reads as rewritten:
"(a)	The board of directors of the Association shall consist of not less than five nor more than nine persons serving terms as established in the plan of operation. One non‑voting member of the board shall be a property and liability insurance agent authorized to write insurance for a member insurer, and appointed by the Commissioner; and the remaining members shall be selected by member insurers subject to the approval of the Commissioner. Vacancies of the board shall be filled for the remaining period of the term in the same manner as initial appointments. If no members are selected within 60 days after June 25, 1971, the Commissioner may appoint the initial members of the board of directors."
SECTION 40.  G.S. 58‑36‑15(e) reads as rewritten:
"(e)	The Commissioner may require the filing of supporting data including:
(1)	The Bureau's interpretation of any statistical data relied upon;
(2)	Descriptions of the methods employed in setting the rates;
(3)	Analysis of the incurred losses submitted on an accident year or policy year basis into their component parts; to wit, paid losses, reserves for losses and loss expenses, and reserves for losses incurred but not reported;
(4)	The total number and dollar amount of paid claims;
(5)	The total number and dollar amount of case basis reserve claims;
(6)	Earned and written premiums at current rates by rating territory;
(7)	Earned premiums and incurred losses according to classification plan categories; and
(8)	Income from investment of unearned premiums and loss and loss expense reserves generated by business within this State.
"
SECTION 41.  G.S. 153A‑435(a) reads as rewritten:
"(a)	A county may contract to insure itself and any of its officers, agents, or employees against liability for wrongful death or negligent or intentional damage to person or property or against absolute liability for damage to person or property caused by an act or omission of the county or of any of its officers, agents, or employees when acting within the scope of their authority and the course of their employment. The board of commissioners shall determine what liabilities and what officers, agents, and employees shall be covered by any insurance purchased pursuant to this subsection.
Purchase of insurance pursuant to this subsection waives the county's governmental immunity, to the extent of insurance coverage, for an act or omission occurring in the exercise of a governmental function. Participation in a local government risk pool pursuant to Article  23 of Chapter 58 of the General Statutes shall be deemed to be the purchase of insurance for the purposes of this section. By entering into an insurance contract with the county, an insurer waives any defense based upon the governmental immunity of the county.
SECTION 42.  This act is effective when it becomes law.