GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
S	2
SENATE BILL 729
House Committee Substitute Favorable 7/10/01 

Short Title:	Motorcycle Insurance Rates.	()	
Sponsors:	     	
Referred to:	     	
March 29, 2001

A BILL TO BE ENTITLED
AN ACT TO PROVIDE THAT MOTORCYCLE INSURANCE RATES ARE SET IN ACCORDANCE WITH THE LAW REGULATING INSURANCE RATES RATHER THAN ESTABLISHED BY THE NORTH CAROLINA RATE BUREAU. 

The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑36‑1(3) reads as rewritten:
"(3)	The Bureau shall promulgate and propose rates for insurance against loss to residential real property with not more than four housing units located in this State and any contents thereof or valuable interest therein and other insurance coverages written in connection with the sale of such property insurance; for insurance against theft of or physical damage to nonfleet private passenger motor vehicles; for liability insurance for such motor vehicles, automobile medical payments insurance, uninsured and underinsured motorists coverage and other insurance coverages written in connection with the sale of such liability insurance; and, as provided in G.S. 58‑36‑100, for loss costs and residual market rate filings for workers' compensation and employers' liability insurance written in connection therewith. This subdivision does not apply to motor vehicles operated under certificates of authority from the Utilities Commission, the Interstate Commerce Commission, or their successor agencies, where insurance or other proof of financial responsibility is required by law or by regulations specifically applicable to such certificated vehicles. The Bureau shall have no jurisdiction over excess workers' compensation insurance for employers qualifying as self‑insurers as provided in Article 47 of this Chapter or Article 5 of Chapter 97 of the General Statutes; nor shall the Bureau's jurisdiction include farm buildings, farm dwellings and their appurtenant structures, farm personal property or other coverages written in connection with farm real or personal property; travel or camper trailers designed to be pulled by private passenger motor vehicles, unless insured under policies covering nonfleet private passenger motor vehicles; motorcycles, as defined in G.S. 20-4.01(27)d.; mechanical breakdown insurance covering nonfleet private passenger motor vehicles and other incidental coverages written in connection with this insurance, including emergency road service assistance, trip interruption reimbursement, rental car reimbursement, and tire coverage; residential real and personal property insured in multiple line insurance policies covering business activities as the primary insurable interest; and marine, general liability, burglary and theft, glass, and animal collision insurance, except when such coverages are written as an integral part of a multiple line insurance policy for which there is an indivisible premium."
SECTION 1.1.  Article 36 of Chapter 58 of the General Statutes is amended by adding a new section to read:  
"§ 58-36-3.  Limitation of scope.
Except as provided in G.S. 58-36-85, the term "nonfleet private passenger motor vehicle", as used in this Article, does not mean a motorcycle, as defined in G.S. 20-4.01(27)d."
SECTION 2.  G.S. 58‑36‑65(m) is repealed.
SECTION 2.1.  G.S. 58‑37‑1(6) reads as rewritten:
"(6)	"Motor vehicle" means every self‑propelled vehicle that is designed for use upon a highway, including trailers and semitrailers designed for use with such vehicles (except traction engines, road rollers, farm tractors, tractor cranes, power shovels, and well drillers). "Motor vehicle" also means a motorcycle, as defined in G.S. 20-4.01(27)d."
SECTION 2.2.  G.S. 58‑37‑30(b) reads as rewritten:
"(b)	It shall be the responsibility of the agent to write the coverage applied for at what he believes to be the appropriate rate level. If coverage is written at the Facility rate level and the company elects not to cede, the policy shall be rated at a rate under Article 36 or Article 40 of this Chapter, whichever is appropriate. Coverage written at a rate under Article 36 or Article 40 of this Chapter that is not acceptable to the company must either be placed with another company or rated at the Facility rate level by the agent."
SECTION 2.3.  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". For the purpose of this Article, a "clean risk" 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. 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, the Commissioner shall issue an order specifying in what respect it is deficient and stating when, within a reasonable period thereafter, the rate is no longer effective. 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. The order shall not affect any contract or policy made or issued 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" 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 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. As used in this subsection, "nonfleet private passenger motor vehicle" does not mean a motorcycle, as defined in G.S. 20-4.01(27)d."
SECTION 3.  G.S. 58‑40‑15 reads as rewritten:
"§ 58‑40‑15.  Scope of application.
The provisions of this Article shall apply to all insurance on risks or on operations in this State, except:
(1)	Reinsurance, other than joint reinsurance to the extent stated in G.S. 58‑40‑60;
(2)	Any policy of insurance against loss or damage to or legal liability in connection with property located outside this State, or any motor vehicle or aircraft principally garaged and used outside of this State, or any activity wholly carried on outside this State;
(3)	Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine, insurance policies;
(4)	Accident, health, or life insurance;
(5)	Annuities;
(6)	Repealed by Session Laws 1985, c. 666, s. 43.
(7)	Mortgage guaranty insurance;
(8)	Workers' compensation and employers' liability insurance written in connection therewith;
(9)	For private passenger (nonfleet) motor vehicle liability insurance, automobile medical payments insurance, uninsured motorists' coverage and other insurance coverages written in connection with the sale of such liability insurance; except this Article applies to liability insurance on motorcycles, as defined in G.S. 20-4.01(27)d.;
(10)	Theft of or physical damage to private passenger (nonfleet) motor vehicles; except this Article applies to theft of or physical damage to motorcycles, as defined in G.S. 20-4.01(27)d.; and
(11)	Insurance against loss to residential real property with not more than four housing units located in this State or any contents thereof or valuable interest therein and other insurance coverages written in connection with the sale of such property insurance. Provided, however, that this Article shall apply to insurance against loss to farm dwellings, farm buildings and their appurtenant structures, farm personal property and other coverages written in connection with farm real or personal property; travel or camper trailers designed to be pulled by private passenger motor vehicles unless insured under policies covering nonfleet private passenger motor vehicles; residential real and personal property insured in multiple line insurance policies covering business activities as the primary insurable interest; and marine, general liability, burglary and theft, glass, and animal collision insurance except when such coverages are written as an integral part of a multiple line insurance policy for which there is an indivisible premium.
The provisions of this Article shall not apply to hospital service or medical service corporations, investment companies, mutual benefit associations, or fraternal beneficiary associations."
SECTION 4.  This act becomes effective January 1, 2002.  Rates, rating systems, territories, classifications, and policy forms lawfully in use on January 1, 2002, may continue to be used thereafter.