North Carolina register, April 1986 - June 1998

              £3R/kf>J/'74-34- /-AZ- /rt&7/
The
NORTH CAROLINA
REGISTER
IN THIS ISSUE
PROPOSED RULES
Dietetics/Nutrition
Environment, Health, and Natural Resources
Human Resources
Insurance
Justice
Labor
Medical Examiners
Mortuary Science
Secretary of State
Transportation
Rl IVED
m
1AW LIBRARY
mmt-
RRC OBJECTIONS
CONTESTED CASE DECISIONS
ISSUE DATE: October 14, 1994
Volume 9 • Issue 14 • Pages 1063 - 1151
INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMINISTRATIVE CODE
NORTH CAROLINA REGISTER
The North Carolina Register is published twice a month and
contains information relating to agency, executive, legislative and
judicial actions required by or affecting Chapter 150B of the General
Statutes. All proposed administrative rules and notices of public
hearings filed under G.S. 1 50B-21 .2 must be published in the Register.
The Register will typically comprise approximately fifty pages per
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State law requires that a copy of each issue be provided free of
charge to each county in the state and to various state officials and
institutions.
The North Carolina Registers available by yearly subscription at
a cost of one hundred and five dollars ($105.00) for 24 issues.
Individual issues may be purchased for eight dollars ($8.00).
Requests for subscription to the North Carolina Register should be
directed to the Office ofAdministrative Hearings, P. O. Drawer 27447,
Raleigh, N.C. 27611-7447.
ADOPTION, AMENDMENT, AND REPEAL OF
RULES
The following is a generalized statement of the procedures to be
followed for an agency to adopt, amend, or repeal a rule. For the
specific statutory authority, please consult Article 2A ofChapter 1 50B
of the General Statutes.
Any agency intending to adopt, amend, or repeal a rule must first
publish notice of the proposed action in the North Carolina Register.
The notice must include the time and place of the public hearing (or
instructions on how a member of the public may request a hearing); a
statement of procedure for public comments; the text of the proposed
rule or the statement of subject matter; the reason for the proposed
action; a reference to the statutory authority for the action and the
proposed effective date.
Unless a specific statute provides otherwise, at least 1 5 days must
elapse following publication of the notice in the North Carolina
RegisterbefoK the agency may conduct the public hearing and at least
30 days must elapse before the agency can take action on the proposed
rule. An agency may not adopt a rule that differs substantially from the
proposed form published as part of the public notice, until the adopted
version has been published in the North Carolina Register for an
additional 30 day comment period.
When final action is taken, the promulgating agency must file the
rule with the Rules Review Commission (RRC). After approval by
RRC, the adopted rule is filed with the Office of Administrative
Hearings (OAH).
A rule or amended rule generally becomes effective 5 business
days after the rule is filed with the Office of Administrative Hearings
for publication in the North Carolina Administrative Code (NCAC).
Proposed action on rules may be withdrawn by the promulgating
agency at any time before final action is taken by the agency or before
filing with OAH for publication in the NCAC.
TEMPORARY RULES
Under certain emergency conditions, agencies may issue tempo-rary
rules. Within 24 hours of submission to OAH, the Codifier of
Rules must review the agency's written statement of findings of need
for the temporary rule pursuant to the provisions in G.S. 150B-2 1 . 1 . If
the Codifier determines that the findings meet the criteria in G.S
150B-21.1, the rule is entered into the NCAC. If the Codifier
determines that the findings do not meet the criteria, the rule is returned
to the agency. The agency may supplement its findings and resubmit
the temporary rule for an additional review or the agency may respond
that it will remain with its initial position. The Codifier, thereafter, will
enter the rule into the NCAC. A temporary rule becomes effective
either when the Codifier of Rules enters the rule in the Code or on the
sixth business day after the agency resubmits the rule without change
The temporary rule is in effect for the period specified in the rule or 1 80
days, whichever is less. An agency adopting a temporary rule must
begin rule-making procedures on the permanent rule at the same time
the temporary rule is filed with the Codifier.
NORTH CAROLINA ADMINISTRATIVE CODE
The North Carolina Administrative Code (NCAC) is a compilation
and index of the administrative rules of 25 state agencies and 38
occupational licensing boards. The NCAC comprises approximately
15,000 letter size, single spaced pages of material of which approxi-mately
35% is changed annually. Compilation and publication of the
NCAC is mandated by G.S. 150B-21.18.
The Code is divided into Titles and Chapters. Each state agency i;
assigned a separate title which is further broken down by chapters
Title 21 is designated for occupational licensing boards.
The NCAC is available in two formats.
(1) Single pages may be obtained at a minimum cost of two
dollars and 50 cents ($2.50) for 10 pages or less, plus fifteer
cents ($0.15) per each additional page.
(2) The full publication consists of 53 volumes, totaling ir
excess of 15,000 pages. It is supplemented monthly witl
replacement pages. A one year subscription to the ful
publication including supplements can be purchased foi
seven hundred and fifty dollars ($750.00). Individual vol
umes may also be purchased with supplement service. Re
newal subscriptions for supplements to the initial publicatioi
are available.
Requests for pages of rules or volumes of the NCAC should be
directed to the Office of Administrative Hearings.
CITATION TO THE NORTH CAROLINA
REGISTER
The North Carolina Register is cited by volume, issue, pagi
number and date. 1:1 NCR 101-201, April 1, 1986 refers to Volumi
1, Issue 1, pages 101 through 201 ofthcNorthCarolinaRegisterissuei
on April 1, 1986.
FOR INFORMATION CONTACT: Office of Administra-tive
Hearings, ATTN: Rules Division, P.O. Drawer 27447,
Raleigh, North Carolina 2761 1-7447, (919) 733-2678.
NORTH
CAROLINA
REGISTER
Office of Administrative Hearings
P. O. Drawer 27447
Raleigh, North Carolina 27611-7447
(919) 733-2678
Julian Mann III,
Director
James R. Scarcella Sr.,
Deputy Director
Molly Masich,
Director ofAPA Services
Staff:
Ruby Creech,
Publications Coordinator
Teresa Kilpatrick,
Editorial Assistant
Jean Shirley,
Editorial Assistant
This publication is printed on permanent,
acid-free paper in compliance with
G.S. 125-11.13.
ISSUE CONTENTS
I. PROPOSED RULES
Environment, Health, and
Natural Resources
Health Services 1112
Marine Fisheries Commission ... 1109
Human Resources
Mental Health, Developmental
Disabilities and Substance Abuse
Services 1063
Insurance
Actuarial Services Division .... 1072
Agent Services Division 1065
Life and Health Division 1071
Justice
N.C. Sheriffs' Education & Training
Standards Commission 1075
Labor
Boiler and Pressure Vessel 1076
Licensing Boards
Dietetics/Nutrition 1115
Medical Examiners 1119
Mortuary Science 1120
Secretary of State
Notary Public Division 1112
Transportation
Highways, Division of 1114
II. RRC OBJECTIONS 1122
III. CONTESTED CASE DECISIONS
Index to ALJ Decisions 1124
Text of Selected Decisions
93 OSP 1001 . 1136
93 OSP 1505 1141
IV. CUMULATIVE INDEX 1149
NORTH CAROLINA REGISTER
Publication Schedule
(April 1994 - January 1995)
Volume
and
Issue
Number
Issue
Date
Last Day
for
Filing
Last Day
for Elec-tronic
Filing
Earliest
Date for
Public
Hearing
15 days
from
notice
* End of
Required
Comment
Period
30 days
from
notice
Last Day
to Submit
to RRC
** Earliest
Effective
Date
9:1 04/04/94 03/11/94 03/18/94 04/19/94 05/04/94 05/20/94 07/01/94
9:2 04/15/94 03/24/94 03/31/94 05/02/94 05/16/94 05/20/94 07/01/94
9:3 05/02/94 04/11/94 04/18/94 05/17/94 06/01/94 06/20/94 08/01/94
9:4 05/16/94 04/25/94 05/02/94 05/31/94 06/15/94 06/20/94 08/01/94
9:5 06/01/94 05/10/94 05/17/94 06/16/94 07/01/94 07/20/94 09/01/94
9:6 06/15/94 05/24/94 06/01/94 06/30/94 07/15/94 07/20/94 09/01/94
9:7 07/01/94 06/10/94 06/17/94 07/18/94 08/01/94 08/22/94 10/01/94
9:8 07/15/94 06/23/94 06/30/94 08/01/94 08/15/94 08/22/94 10/01/94
9:9 08/01/94 07/11/94 07/18/94 08/16/94 08/31/94 09/20/94 11/01/94
9:10 08/15/94 07/25/94 08/01/94 08/30/94 09/14/94 09/20/94 11/01/94
9:11 09/01/94 08/11/94 08/18/94 09/16/94 10/03/94 10/20/94 12/01/94
9:12 09/15/94 08/24/94 08/31/94 09/30/94 10/17/94 10/20/94 12/01/94
9:13 10/03/94 09/12/94 09/19/94 10/18/94 11/02/94 11/21/94 01/01/95
9:14 10/14/94 09/23/94 09/30/94 10/31/94 11/14/94 11/21/94 01/01/95
9:15 11/01/94 10/11/94 10/18/94 11/16/94 12/01/94 12/20/94 02/01/95
9:16 11/15/94 10/24/94 10/31/94 11/30/94 12/15/94 12/20/94 02/01/95
9:17 12/01/94 11/07/94 11/15/94 12/16/94 01/03/95 01/20/95 03/01/95
9:18 12/15/94 11/22/94 12/01/94 12/30/94 01/17/95 01/20/95 03/01/95
9:19 01/03/95 12/08/94 12/15/94 01/18/95 02/02/95 02/20/95 04/01/95
9:20 01/17/95 12/21/94 12/30/94 02/01/95 02/16/95 02/20/95 04/01/95
This table is published as a public service, and the computation of time periods are not to be deemed binding
or controlling. Tune is computed according to 26 NCAC 2B .0103 and the Rules of Civil Procedure, Rule
6.
* An agency must accept comments for at least 30 days after the proposed text is published or until the date
of any public hearing, whichever is longer. See G.S. 150B-21. 2(f) for adoption procedures.
** The "Earliest Effective Date " is computed assuming that the agency follows the publication schedule above,
that the Rules Review Commission approves the rule at the next calendar month meeting after submission, and
that RRC delivers the rule to the Codifier of Rules five (5) business days before the 1st business day of the next
calendar month.
Raised 03/94
PROPOSED RULES
TITLE 10 - DEPARTMENT OF
HUMAN RESOURCES
Notice is hereby given in accordance with G.S.
150B-21.2 that the Commission for Mental Health,
Developmental Disabilities and Substance Abuse
Services intends to amend rules cited as 10 NCAC
18F .0313 and .0319.
1 he proposed effective date of this action is
January 1, 1995.
Instructions on How to Demand a Public Hearing
(must be requested in writing within 15 days of
notice):
A demand for a public hearing must be made in
writing and mailed to Charlotte Tucker,
Rulemaking Coordinator, Division of Mental
Health, Developmental Disabilities and Substance
Abuse Services, Albemarle Building, 325 N.
Salisbury Street, Raleigh, NC 27603. Tfiis demand
must be made within 15 days of this notice.
MXeason for Proposed Action: Amend for further
clarification in the provision ofDWl assessments.
(comment Procedures: Anyone who wishes to
submit written comments should address them to
Charlotte Tucker, Division of Mental Health,
Developmental Disabilities and Substance Abuse
Services, 325 N. Salisbury Street, Albemarle
Bldg., Raleigh, NC 27603. Comments will be
accepted from October 14, 1994 through
November 14, 1994.
CHAPTER 18 - MENTAL HEALTH:
OTHER PROGRAMS
SUBCHAPTER 18F - PROGRAM
SUPPORT STANDARDS
SECTION .0300 - SUBSTANCE ABUSE
ASSESSMENTS FOR
INDIVIDUALS CHARGED WITH
OR CONVICTED OF DRIVING
WHILE IMPAIRED (DWI)
.0313 DEFINITIONS
For the purpose of the rules in this Section, the
following terms shall have the meanings indicated:
(1) "American Society of Addiction Medicine
(ASAM) Placement Criteria" means the
(2)
(3)
(4)
(a)
Patient Placement Criteria for the Treat-ment
of Psychoactive Substance Abuse
Disorders, copyright 1991 by the Nation-al
Association of Addiction Treatment
Providers and the American Society of
Addiction Medicine. For these Rules,
the ASAM Level I, Outpatient Treat-ment,
has been divided into LA., Short-term
and LB., Longer-term Outpatient
Treatment.
"Certified ADETS Instructor" means an
individual who is certified by the Divi-sion
in accordance with 10 NCAC 18M
.0906 Instructor Certification, contained
in Division publication, Standards for
Area Programs and Their Contract Agen-cies,
APSM 35-1, and available at the
current printing cost.
"Clinical Interview" means the face-to-face
interview with a substance abuse
professional intended to gather informa-tion
on the client, including, but not
limited to the following: demographics,
medical history, past and present driving
offense record, alcohol concentration of
current offense, social and family history,
substance abuse history, vocational back-ground
and mental status.
"Continuing Care" means an outpatient
service designed to maximize the recov-ery
experience begun in more intensive
inpatient or outpatient treatment. As a
continuation of the treatment experience
this service is expected to begin immedi-ately
upon the client's discharge from
intensive treatment:
When the continuing care follows an
inpatient treatment experience , it shall :
fh)
—
include, at a minimum, a total number
of 20 contact hours of service during
a 30 day period.—Each week of the
30 day period shall have scheduled
hours of service; and
(it)
continue for a minimum period of 90
days.
a total of 90 days, including the inten-sive
inpatient treatment period, shall
be provided;
a minimum of 20 contact hours of
0)
mi
m
service during a 30-day period shall
be provided. Each week of the 30-
day period shall have scheduled hours
of service; and
for any of the remaining 90 days of
continuing care, a specific schedule
9:14 NORTH CAROLINA REGISTER October 14, 1994 1063
PROPOSED RULES
for contact hours of service ]s not
required.
(b) The services shall be provided accord-ing
to a written continuing care plan
which shall:
(i) address the needs of the client; and
(ii) utilize individual, family and group
counseling as required to meet the
needs of the client.
(5) "Division" means the same as defined in
G.S. 122C-3; and is hereafter referred to
as DMH/DD/SAS.
(6) "DMH Form 508 (DWI Services Certifi-cate
of Completion)" means the four-part
form which is used in documenting the
offenders completion of the DWI sub-stance
abuse assessment and treatment or
ADETS.
(7) "Driving record" means a person's North
Carolina driving history, as maintained
by the North Carolina Driver's License
Division's history file.
(8) "DSM" means the current edition of the
Diagnostic and Statistical Manual of
Mental Disorders of the American Psy-chiatric
Association.
(9) "DWI" means impaired driving as de-scribed
in G.S. 20-138.1.
(10) "DWI categories of service" mean:
(a) "Alcohol and Drug Education Traffic
School (ADETS)" means an approved
curriculum which shall:
(i) include 10 to 13 contact hours in a
classroom setting;
(ii) be provided by area programs or their
designated agencies with certified
ADETS instructors; and
(iii) be designed for persons:
(A) who have only one DWI convic-tion
(lifetime);
(B) whose assessment did not identify
a "Substance Abuse Handicap";
and
(C) whose alcohol concentration was
. 14 or less.
(b) "Day treatment" means a structured,
outpatient service. It may also be
called intensive outpatient treatment, as
defined in 10 NCAC 14N .0900 and
applicable portions of 10 NCAC 14K
.0300, which include ASAM Level II
treatment criteria.
(c) "Inpatient residential treatment servic-es"
means an array of services which
may include detoxification and rehabili-tation
in a structured environment, as
set forth in 10 NCAC +4© 14N .0300,
and contained in Licensure Rules as
defined in Item (13) of this Rule. Such
services will correspond with ASAM
Level III and Level IV treatment crite-ria.
(d) "Longer-term outpatient treatment"
means a structured program meeting the
ASAM definition of Level I, Outpatient
Treatment, and requiring a minimum of
40 contact hours scheduled to maintain
the client in active treatment for a
minimum period of 60 days, providing
counseling and learning experiences
which include the "Minimal Subject
Content," as defined in Item (14) of this
Rule. The facility must operate in
compliance with Licensure Rules, 10
NCAC 14N .0700 and applicable por-tions
of 10 NCAC 14K .0300.
(e) "Short-term outpatient treatment" means
a structured program meeting the broad
definition of "ASAM Level I, Outpa-tient
Treatment," and requiring a mini-mum
of 20 contact hours over a period
of at least 30 days, including counseling
and didactic experiences which include
the minimal subject content. Facilities
which are approved to provide this shall
operate in compliance with Licensure
Rules contained in 10 NCAC 14N
.0700 and applicable portions of 10
NCAC 14K .0300.
(11) "DWI Substance Abuse Assessment"
means a service provided to persons
charged with or convicted of DWI to
determine the presence or absence of a
substance abuse handicap. The assess-ment
involves a clinical interview as well
as the use of a standardized test.
(12) "Facility" means the term as defined in
G.S. 122C-3(14).
(13) "Licensure rules" mean the rules con-tained
in 10 NCAC 14K through 140 of
the North Carolina Administrative Code
and published in Division publication,
Licensure Rules for MH/DD/SA Facili-ties,
APSM 40-2.
(14) "Minimal subject content" means the
following list of subjects which shall be
addressed in the educational portion of
any treatment program serving DWI
offenders:
(a) Effects of Alcohol and Drugs on the
1064 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
Body/Brain;
(b) The Nature of Denial;
(c) Disease Concept of Chemical Depen-dency;
(d) Progression of Disease and Recovery
(Jellinek Chart);
(e) Chemical Dependency and the Family;
(f) Introduction to Self-Help Groups/ 12
Step Recovery Programs;
(g) Relapse Prevention and Strategies for
Recovery; and
(h) Safe Roads Act Penalties.
(15) "Special service plan" means a plan for
persons who exhibit unusual circumstanc-es,
such as severe hearing impairment;
other physical disabilities; concurrent
psychiatric illness; language and commu-nication
problems; intractable problems
of distance, transportation and schedul-ing;
and chronic offenders with multiple
unsuccessful treatment experiences.
(16) "Standardized Test" means an instrument
approved by the Department of Human
Resources, with documented reliability
and validity, which serves to assist the
assessment agency or individual in deter-mining
if the client has a substance abuse
handicap. A current listing of the ap-proved
standardized tests may be
obtained by writing the DWI/Criminal
Justice Branch, Division of
MH/DD/SAS, 325 N. Salisbury Street,
Raleigh, NC 27603.
(17) "Substance Abuse Handicap" means a
degree of dysfunction directly related to
the recurring use/abuse of an impairing
substance.
the expiration date.
(c) The facility providing the recommended
treatment or education shall have the client sign
the appropriate release of information, and
progress reports shall be filed with the court or the
Department of Correction at intervals not to
exceed six months.
(d) Upon completion of the recommended
treatment or ADETS service, the agency shall:
(1) forward the top page of the completed
DMH Form 508 to the DWI/Criminal
Justice Branch, DMH/DD/SAS; and
(2) retain, for a period of at least five
years, the appropriate page of the form,
and distribute the remaining pages to
the offender and the court as specified
on the bottom of the form.
(e) In the event that an assessment or treatment
agency ceases to provide DWI-related services, the
agency shall notify, in writing, the DWI Criminal
Justice Branch to assure that all DMH Form 508s
and other related documents specified in G.S. 20-
179(m) are properly processed.
(f) By February 15 of each year, all assessing
agencies shall forward, in writing, to the
DWI/Criminal Justice Branch of the Division the
following information on the previous year's
activities, which shall include but need not be
limited to the number of:
(1) pre-trial assessments conducted;
(2) post trial assessments conducted;
(3) individuals referred to ADETS; and
(4) substance abuse handicaps identified
and the recommended levels of
treatment.
Statutory Authority G. S. 20-1 79(m).
Statutory Authority G.S. 20-138.1; 20-179;
122C-3.
TITLE 11 - DEPARTMENT OF
INSURANCE
.0319 REPORTING REQUIREMENTS
(a) The assessment portion of the DMH Form
508 shall be completed for each client who
receives a DWI substance abuse assessment. An
initial supply of this form may be obtained from
the DWI/Criminal Justice Branch of the
DMH/DD/SAS, 325 N. Salisbury Street, Raleigh,
N.C. 27603.
(b) The assessment portion of DMH Form 508
shall be signed by a certified alcoholism, drug
abuse, or substance abuse counselor. The date of
expiration of that professional's certification shall
be indicated on the client's Certificate of
Completion and no assessment shall be signed after
Notice is hereby given in accordance with G.S.
150B-21.2 that the N.C. Department of Insurance
intends to amend rules cited as 11 NCAC 6A .0801
- .0806, .0808 - .0809 and .0811.
1 he proposed effective date of this action is
January 1, 1995.
1 he public hearing will be conducted at 10:00
a.m. on November 8, 1994 at the Dobbs Building,
3rd Floor Hearing Room, 430 N. Salisbury Street,
Raleigh, NC 27611.
9:14 NORTH CAROLINA REGISTER October 14, 1994 1065
PROPOSED RULES
lYeason for Proposed Action: Pursuant to recom-mendations
made by continuing education advisory
committee in compliance with G.S. 58-33-135, the
amendments clarify problems identified during the
first three years of the program.
(comment Procedures: Written comments may be
sent to George Brown at 430 N. Salisbury Street,
Raleigh, N.C. 27611. Oral presentations may be
made at the public hearing. Anyone having ques-tions
should call George Brown at (919) 733-7487
or Ellen Sprenkel at (919) 733-4529.
CHAPTER 6 - AGENT SERVICES
DIVISION
SUBCHAPTER 6A - AGENT SERVICES
DIVISION
SECTION .0800 - CONTINUING
EDUCATION
.0801 DEFINITIONS
As used in this Section:
(1) "Cluster of courses" means a number of
courses, each of which is less than +30
100 minutes in length, but altogether +30
100 minutes or more in length, that are
offered within one state or national pro-gram
or convention.
(2) "Course" means a continuing education
course directly related to insurance prin-ciples
and practices or a course designed
and approved specifically for licensees;
but does not mean a business course of a
general nature or an insurance marketing
or sales course.
(3) "Disinterested third party" means a per-son
not concerned, with respect to possi-ble
gain or loss, in the result of a pend-ing
course final examination.
(4) "Distance learning" means an educational
program in which the licensee and the
instructor are in different physical loca-tions
and interact with each other through
various methods of telecommunication.
(5) "Dual credit course" means a continuing
education course that contains material
that qualifies for both life and health
insurance ICECs and property and liabili-ty_
insurance ICECs.
{$) "Insurance continuing education credit
or "ICEC"" means a value assigned to a
<JU
course by the Commissioner after review
and approval of a course information.
This term means the same as "credit
hour" as used in G.S. 58-33-130.
(7) $€r) "Instructor" means an individual who
teaches, lectures, leads, or otherwise
instructs a course.
(8) f?) "Licensee" means a duly licensed §*e
and casualty property and liability insur-ancet
or life, accident, and health insur-ance^—
eF—aeeideat—aad—beaHb-4as«faftee
agent or broker who is required to com-ply
with this Section.
(9) {&) "Supervised examination" means a
timed, closed book examination that is
monitored by a disinterested third party
and graded by a nationally recognized
insurance education program.
(10) {9) "Supervised individual study" means
audio tapes, video tapes, computer pro-grams,
programmed learning courses,
and similar types of learning experiences
that are completed in the presence of an
approved instructor.
Statutory Authority G.S. 58-2-40; 58-33-130.
.0802 LICENSEE REQUIREMENTS
(a) Life and health licensees shall obtain 12
ICECs during each calendar year in approved life
and health courses.
(b) Property and liability licensees shall obtain
12 ICECs during each calendar year in approved
property and liability courses.
(c) Any person holding more than one license to
which this Section applies shall obtain 18 ICECs
during each calendar year, including a minimum of
six ICECs for each kind of license.
(d) An instructor shall receive the maximum
ICECs awarded to a student for the course.
(e) Licensees shall not receive ICECs for the
same course more often than one time in any three
calendar year period except when there are major
revisions within the course. The Commissioner
shall determine whether the revisions are substan-tial
enough to qualify for additional ICECs within
a three calendar year period.
(f) Licensees do not have to obtain ICECs for
the calendar year in which they are initially li-censed.
(g) Licensees shall receive ICECs for a course
only for the calendar year in which the course is
completed. Any course requiring an examination
shall not be considered completed until the licensee
passes the examination.
1066 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
(h) Licensees shall maintain records of all
ICECs for three years following the obtaining of
such ICECs, which records shall be available for
inspection upon the Commissioner's request.
(i) Nonresident licensees who meet continuing
education requirements in their home states meet
the continuing education requirements of this
Section. Nonresident licensees whose home states
have no continuing education requirements shall
meet the requirements of this Section.
(j) Licensees are exempt from the requirements
of this Section if they:
(1) are age 65 or older; and
(2) have been continuously licensed in the
line of insurance for at least 25 years;
and either
(3) hold a nationally recognized profession-al
designation for the line of insurance.
Acceptable designations include those
listed in 11 NCAC 6A .0803 (a) and
(b);or
(4) meet the requirements of Subparagraphs
(1) and (2) of this Paragraph and certify
to the Department of Insurance annually
they are inactive agency owners who
neither solicit applications for insurance
nor take part in the day to day opera-tion
of the agency.
(TO Any licensee holding: more than one license
to which this Section applies and qualifies for
exemption under Paragraph £j] of this Rule for one
license type must obtain a minimum of six ICECs
in each calendar year for the license type not
exempted
.
£1} {k) Courses completed prior to the issue date
of a new license do not meet the requirements of
this Section for that new license.
(m) ft) No credit will be given for courses taken
before they have been approved by the Depart-ment.
£n] (m) Persons who hold adjuster licenses shall
obtain 12 ICECs during each calendar year in
approved property and liability courses. As used
in this Section, "licensee" includes a person who
holds an adjuster license and who is required to
comply with this Section.
(o) {ft) Each agent holding an active surplus
lines license with an effective date before January
1 , 1994, must take a surplus lines course as part of
the agent's 1994 property and liability continuing
education requirement. Each agent issued a
surplus lines license in 1994 must take a surplus
lines course as part of the agent's 1995 property
and liability continuing education requirement.
Statutory Authority G. S. 58-2-40; 58-33-130.
.0803 COURSES SPECIFICALLY
APPROVED
(a) Courses that are necessary to obtain the
following nationally recognized designations are
approved as they exist on the effective date of this
Section for 18 ICECs upon successful completion
of the national examination for each part:
(1) Accredited Advisor in Insurance (AAI);
(2) Associate in Claims (AIC);
(3) Associate in Loss Control Management
(ALCM);
(4) Associate in Risk Management (ARM);
(5) Associate in Underwriting (AU);
(6) Certified Employees Benefit Specialist
(CEBS);
(7) Chartered Financial Consultant (ChFC);
(8) Chartered Life Underwriter (CLU);
(9) Chartered Property and Casualty Un-derwriter
(CPCU);
(10) Fellow Life Management Institute
(FLMI);
(11) General Insurance (INS);
(12) Life Underwriter Training Council
Fellow, 26 week (LUTCF).
(b) Courses that are necessary to obtain the
following nationally recognized designations are
approved as they exist on the effective date of this
Section for an amount of ICECs to be determined
by the Commissioner's evaluation process:
(1) Agency Management Training Course
Graduate;
(2) Certified Insurance Counselor (CIC);
(3) Certified Insurance Service Representa-tive
(CISR);
(4) Certified Professional Service Repre-sentative
(CPSR);
(5) Fraternal Insurance Counselor (FIC);
(6) Health Insurance Associate (HI A);
(7) Life Underwriter Training Council
Fellow, 13 weeks (LUTCF);
(8) Registered Health Underwriter (RHU).
(c) Courses that are taught by a college or
university that is accredited by the Southern
Association of Colleges and Schools are approved
as they exist on the effective date of this Section
for a number of ICECs to be determined by the
Commissioner's evaluation process.
(d) Each course provider or designee shall
submit a fee of one dollar ($1.00) per approved
ICEC per individual that successfully completes
the course.
(e) The statute and rule update Any course
prepared by the Commissioner is approved as a
9:14 NORTH CAROLINA REGISTER October 14, 1994 1067
PROPOSED RULES
mandator)!
1 component of each resident licensee's
continuing education requirement for a number of
ICECs to be determined annually by the
Commissioner's evaluation process.
Statutory Authority G.S. 58-2-40; 58-33-130.
.0804 CARRYOVER CREDIT
(a) No more than 75 percent of the ICECs
required shall be carried forward from the
previous year. Licensees holding one license shall
carry over no more than nine ICECs. Licensees
holding more than one license shall carry over no
more than six ICECs for any one license. Ne
carry—over credit—wtH
—
be given—for Medicare
supplement/long term—eafe
—
courses—et—fef—the
mandatory statute and rule update course,
(b) Only whole ICECs can be carried over.
(c) No carryover shall apply to a dual license
holder if the licensee qualifies for an exemption
under Rule .0802(i) of this Section.
Statutory Authority G. S. 58-2-40; 58-33-130.
.0805 CALCULATION OF ICECs
The following standards shall be used to evaluate
courses submitted for continuing education
approval
:
(1) Programs requiring meeting or classroom
attendance:
(a) Courses or clusters of courses of less
than +20 100 minutes will not be
evaluated for continuing education
ICECs.
(b) Courses will not be approved for less
than one ICEC.
(c) One ICEC shall be awarded for each 69
50 minutes of instruction unless the
Commissioner assigns fewer ICECs
based upon the evaluation of the
submitted course materials. Courses
will only be approved for whole
ICECs.
(d) Course providers must properly monitor
participants for attendance and
attention.
(2) Independent study programs:
(a) Independent study programs qualify for
continuing education only when there is
a supervised examination. No
examination administered or graded by
insurance company personnel for its
own employees will be considered to be
administered by a disinterested third
party.
(b) Each course shall be assigned ICECs,
which shall be awarded upon the
successful passing of the supervised
examination.
(3) Distance Learning Programs:
(a) Distance learning qualifies only when
an approved instructor is available to
respond to questions and to maintain
attendance records.
(b) Any organization sponsoring a
teleconference shall have a person
approved to be an on-site instructor.
Statutory Authority G.S. 58-2-40; 58-33-130.
.0806 ATTENDANCE
(a) If six ICECs or less are assigned to a course,
the licensee must attend 100 percent of the course
to receive any ICECs.
(b) If more than six ICECs are assigned to a
course, and the licensee passes the exam and
attends at least 80 percent of the course, the
licensee shall receive 100 percent of the ICECs
assigned to the course.
(c) If more than six ICECs are assigned to a
course, and the licensee does not pass the exam
but attends at least 80 percent of the course, the
licensee shall receive 80 percent of the ICECs
assigned to the course.
(d) An instructor may conduct a class with up to
30 students with no additional assistance. For
classes with attendance exceeding 30 students, one
monitor is required for each additional 50 students
or any portion thereof.
(e) Providers conducting classes outside of the
State where at least 25% of the students are
requesting North Carolina ICECs shall make
arrangements and pay all expenses for one or more
Department continuing education monitors to
attend.
Statutory Authority G.S. 58-2-40; 58-33-130.
.0808 INSTRUCTOR QUALIFICATION
(a) Instructor qualification requirements shall be
the same as those for instructors as provided in 1
1
NCAC 6A .0705(c), except that the Commissioner
may approve instructors possessing specific areas
of expertise to instruct courses comprising those
areas of expertise.
(b) Insurance company trainers as instructors
must be full time salaried employees of the
insurance company sponsoring the course and must
have as part of their full time responsibilities the
duty to provide insurance company training.
1068 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
(c) College and university instructors may be
full time or adjunct faculty of the accredited
college or university, must be teaching a
curriculum course in his or her field of expertise,
and must meet the requirements of the association
that accredits the college or university.
(d) The Commissioner may require applicants
and current instructors to submit to a personal
interview, provide a video or audio type, a written
history of courses taught or any other
documentation that will verify the applicant's
qualifications to instruct approved insurance
courses.
Statutory Authority G.S. 58-33-130.
.0809 APPROVAL OF COURSES
(a) Providers of all courses specifically approved
under 11 NCAC 6A .0803 must file copies of
program catalogs, course outlines, copies of
advertising literature, a filing fee of one hundred
dollars ($100.00) per course up to a two thousand
five hundred dollar ($2,500) per calendar year
maximum, and any other documents or related
materials that the Commissioner requests, prior to
January 1, 1991, and within 30 days of any
changes to such programs in the future.
(b) All providers of courses not specifically
approved under 1 1 NCAC 6A .0803 must do the
following:
(1) Any individual, school, insurance
company, insurance industry
association, or other organization
intending to provide classes, seminars,
or other forms of instruction as
approved courses shall apply on forms
provided by the Commissioner; pay a
filing fee of one hundred dollars
($100.00) per course up to a two
thousand five hundred dollar ($2,500)
per calendar year maximum and
provide the requested number of copies
of detailed outlines of the subject matter
to be covered, copies of handouts to be
given, the qualifications of each
instructor, and other information
requested by the Commissioner to
support the request for approval.
(2) Providers of supervised individual study
programs must file the requested
number of copies of the study
programs. Extra copies will be
returned to a provider after course
approval if a return fee is paid in
advance.
(3) Such applications and accompanying
information must be received by the
Commissioner at least 30 days prior to
the intended beginning date of the
course.
(4) The Commissioner shall approve or
deny the application; and shall indicate
the number of ICECs that have been
assigned to the course if approved. If
a course is not approved or disapproved
within 60 days after receipt of all
required information, the course is
deemed to be approved at the end of
the 60-day period.
(5) If a course approval application is
denied, a written explanation of the
reason for such action shall be
furnished with the denial.
(c) Course approval applications must include all
of the following forms and attached information in
exactly the following order:
(1) A cover letter with payment of a filing
fee of one hundred dollars ($100.00)
per course attached with separate
paragraphs for the following:
(A) a request that the course be evaluated;
(B) for whom the course is designed;
(C) the course objectives;
(D) the names and duties of all persons
who will be affiliated in an official
capacity with the course;
(E) the course provider's tuition and fee
refund policy; and
(F) an outline that shall include a
statement of the method used to
determine whether there will be
meaningful attainments of education
by licensees to be certified upon their
satisfactory completion of the course.
Such method may be a written
examination, a written report,
certification of attendance only, or
other methods approved by the
Commissioner. The outline shall
describe the method of presentation;
(2) The course content outline with
instruction hours assigned to the major
topics;
(3) Instructor qualification form and
instructor resume if not previously
approved;
(4) Schedule of dates, beginning and
ending times and places the course will
be offered, along with the names of
instructors for each course session.
9:14 NORTH CAROLINA REGISTER October 14, 1994 1069
PROPOSED RULES
Schedules shall be submitted at least 30
days in advance of any subsequent
course offerings but it will not be
necessary that courses be resubmitted
unless there are substantial changes in
content; and
(5) A copy of the course completion
certificater; and
(6) A package of the course materials that
each student shall be given before the
start of class. At a minimum this
package shall include the course content
outline with instruction times assigned
to all major topics, the instructor's
resume, and a course and instructor
assessment form.
(d) The Commissioner may waive any part of
this Section for programs offered by the University
of North Carolina system schools or the North
Carolina Department of Community Colleges.
(e) A provider may request that its materials be
kept confidential if they are of a proprietary
nature. The Commissioner will review and
promptly return such extra copies of materials if a
return fee is paid in advance.
(f) A provider must indicate the requested
primary line of authority on the course approval
form for dual credit courses.
(g) ff) Courses awarded more than six ICECs
must have an Insurance Department approved
exam for the student to get full credit; otherwise,
the limitations of 11 NCAC 6A .0806(c) will
apply.
(h) {g) Cancelled course schedules must be
submitted five days before the scheduled course
offering. All students scheduled to attend the
cancelled course must be informed of the
cancellation.
(i) Dual credit courses that are submitted shall
be awarded no more than six ICECs for one of the
lines of insurance plus no more than three ICECs
for the other line of insurance.
Statutory Authority G. S. 58-2-40; 58-33-130.
.0811 SANCTIONS FORNONCOMPLIANCE
(a) This Rule establishes sanctions for licensees
who fail to complete their annual continuing
education requirements and for licensees, course
providers, course provider personnel, course
presenters, course presenter personnel, and course
instructors who falsify any records or documents
in connection with the continuing education
program or who do not comply with G.S.
58-33-125 or this Section.
(b) The failure of a licensee to meet the annual
continuing education requirement shall result in the
cancellation of his or her license for the
subsequent calendar year. The license will be
reinstated upon proof that the licensee has
completed the continuing education requirements
and subsequently passed the agent's licensing
examination by July 1 of each year of cancellation.
If requirements for reinstatement are not completed
by July 1 , the licensee will be required to complete
the full pre-licensing education requirement and
pass the agent's licensing examination before the
license will be reinstated.
(c) The Commissioner may suspend, revoke, or
refuse to renew a license for any of the following
causes:
(1) Failure to timely respond to insurance
department inquiries, including
continuing education audit requests.
(2) Requesting an extension or waiver
under false pretenses.
(3) Refusing to cooperate with insurance
department employees in an
investigation or inquiry.
(d) The Commissioner may suspend, revoke, or
refuse to renew a course provider's, presenter's or
instructor's authority to offer courses for any of
the following causes:
(1) Advertising that a course is approved
before the Commissioner has granted
such approval in writing.
(2) Submitting a course outline with
material inaccuracies, either in length,
presentation time, or topic content.
(3) Presenting or using unapproved
material in providing an approved
course.
(4) Failing to conduct a course for the full
time specified in the approval request
submitted to the Commissioner.
(5) Preparing and distributing certificates of
attendance or completion before the
course has been approved.
(6) Issuing certificates of attendance or
completion prior to the completion of
the course.
(7) Failing to issue certificates of
attendance or completion to any
licensee who satisfactorily completes a
course.
(8) Failing to promptly notify the
Commissioner of suspected or known
improper activities including attendance
and attention irregularities in writing.
(9) Any violation of the North Carolina
1070 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
General Statutes or Administrative
Code.
(10) Failing to diligently monitor attendance
and attention of attendees.
(11) Conducting classes in facilities not in
compliance with the federal Americans
with Disabilities Act or any similar
State law or any applicable State or
federal laws pertaining to safety.
(12) Presentation of course material in a
manner that is factually inaccurate,
communicatively faulty. or
grammatically inaccurate, as based
upon multiple evaluations by
Department continuing education
monitors. education coordinator.
Deputy Commissioner of the Agent
Services Division, or the Senior Deputy
Commissioner of the Public Services
Group.
(e) Course providers and presenters are
responsible for the activities of persons
conducting, supervising, instructing, proctoring,
monitoring, moderating, facilitating, or in any way
responsible for the conduct of any of the activities
associated with the course.
(f) In addition, the Commissioner may require
any one of the following upon a finding of a
violation of this Section:
(1) Refunding all course tuition and fees to
licensees.
(2) Providing licensees with a suitable
course to replace the course that was
found in violation.
(3) Withdrawal of approval of courses
offered by such provider, presenter, or
instructor for a period determined by
the Commissioner.
Statutory Authority G.S. 58-2-40; 58-33-130.
******************
l\ otice is hereby given in accordance with G.S.
150B-21.2 that the N.C. Department of Insurance
intends to adopt rule cited as 1 1 NCAC 12 .0561.
1 he proposed effective date of this action is
January 1, 1995.
1 he public hearing will be conducted at 10:00
a.m. on November 8, 1994 at the Dobbs Building,
3rd Floor Hearing Room, 430 N. Salisbury Street,
Raleigh, NC 27611.
MXeason for Proposed Action: To require fair
computation of health insurance deductibles and
co-payments when health care services are provid-ed
at discounted fees negotiated by insurers and
health care providers.
Comment Procedures: Written comments may be
sent to Randy Madry at 112 Cox Avenue, Raleigh,
N. C. 27605. Oral presentations may be made at
the public hearing. Anyone having questions
should call Randy Madry at (919) 715-0194 or
Ellen Sprenkel at (919) 733-4529.
CHAPTER 12 - LIFE AND
HEALTH DIVISION
SECTION .0500 - ACCIDENT
HEALTH: GENERAL NATURE
.0561 DEDUCTIBLES AND COPAYMENTS
BASED ON REAL COST
(a) As used in this Rule:
(1) "Health benefit plan" means any acci-dent
and health insurance policy or
certificate; a nonprofit hospital or medi-cal
service corporation contract: a
health maintenance organization sub-scriber
contract; a plan provided by a
multiple employer welfare arrangement;
or a plan provided by another benefit
arrangement.
(2) "Health care provider" includes any
person who, under Chapter 90 of the
General Statutes is licensed, registered,
or certified to engage jn the practice of
or performs duties associated with any
of the following: medicine, surgery,
dentistry, pharmacy, optometry, mid-wifery,
osteopathy, podiatry, chiroprac-tic,
radiology, nursing, physiotherapy,
pathology, anesthesiology, anesthesia,
laboratory analysis, rendering assistance
to a physician, dental hygiene, psychia-try,
psychology; or a hospital as de-fined
by G.S. 131E-76Q); or a nursing
home as defined by G.S. 131E-10U6).
(3) "Health insurer" means any health
insurance company subject to Articles I
through 63 of this Chapter, including a
multiple employer welfare arrangement;
any preferred provider plan; and any
9:14 NORTH CAROLINA REGISTER October 14, 1994 1071
PROPOSED RULES
corporation subject to Articles 65 and
67 of this Chapter; that provides a
health benefit plan.
(b) If health insurers enter into contracts with
health care providers for the provision of health
care services at discounted rates of payment, and
applicable deductibles or copavments paid by
insureds are to be based upon a percentage of the
fees for services rendered, the amounts of deduct-ibles
and copavments shall be computed only on
the negotiated discounted rates for the services
rendered.
(c) The following are deemed to be unfair and
deceptive acts and practices in the business of
insurance:
(1) Attempting to settle a claim or attempt-ing
to charge or to collect or charging
or collecting copavments in amounts
greater than those calculated in accor-dance
with this Rule.
(2) Attempting to pay or settle or paying or
settling a claim based upon the calcula-tion
of a deductible that is not calculat-ed
in accordance with this Rule.
(3) Attempting to calculate or calculating
an annual, calendar, or lifetime maxi-mum
amount payable on any amounts
other than as set forth in this Rule.
(4) Attempting to settle a claim involved in
coordination of benefits in any manner
not in accordance with this Rule.
(5) Attempting to collect a claim against a
stop-loss or excess health insurer in any
manner inconsistent with this Rule.
(d) Negotiating discounts with health care
providers based upon the total volume of services
and that is settled on a retrospective basis in which
the discounts are not attributed to individual
claimants. |s not deemed to be an unfair and
deceptive act or practice in the business of insur-ance.
Statutory Authority G.S. 58-2-40; 58-50-55; 58-63-
65; 58-65-1; 58-65-40; 58-65-140; 58-67-150.
Notice is hereby given in accordance with G.S.
150B-21.2 that the N. C. Department of Insurance
intends to adopt rules cited as 11 NCAC 16 .0601
- .0607.
1 he proposed effective date of this action is
January 1, 1995.
1 he public hearing will be conducted at 10:00
a.m. on November 8, 1994 at the Dobbs Building,
3rd Floor Hearing Room, 430 N. Salisbury Street,
Raleigh, NC 27611.
Keason for Proposed Action: Establish standards
and guidelinesfor health maintenance organization
premium and rate filings with the Department of
Insurance.
Ksomment Procedures: Written comments may be
sent to Walter James at 430 N. Salisbury Street,
Raleigh, N.C. 27611. Oral presentations may be
made at the public hearing. Anyone having ques-tions
should call Walter James at (919) 733-3284
or Ellen Sprenkel at (919) 733-4529.
CHAPTER 16 - ACTUARIAL
SERVICES DIVISION
SECTION .0600 - HEALTH
MAINTENANCE ORGANIZATION
FILINGS AND STANDARDS
.0601 DEFINITIONS
(a) The definitions contained in G.S. 58-67-5 are
incorporated in this Section by reference.
(b) As used in this Section:
(1) "Adjusted community rating" means a
rating method that allows an HMO to
prospectively establish premium rates
based upon the expected revenue re-quirements
for individual groups and to
take into account a group's historical
utilization, intensity, or cost experience.
(2) "Capitated" means covered health care
services are provided by an HMO,
medical group, or institution based on
a prepaid fixed amount per enrollee
regardless of the actual value of those
services.
(3) "Community rating" means a general
method of establishing premiums for
financing health care in which an
individual's rate is based on the actual
or anticipated average cost of health
services used by all HMO members in
a specific service area.
(4) "Community rating by class" means a
modification of community rating
whereby individual groups can have
1072 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
15)
16]
m
181
m
(10)
1LQ
(12)
(13)
(14)
(15)
different rates depending on the
composition by age, gender, number of
family members covered, geographic
area, or industry.
"Contingency reserve" means the
unassigned funds held over and above
any known or estimated liabilities of an
HMO for the protection of its enrollecs
against the insolvency of the HMO,
"Contract type" means a classification
of members into categories usually
based on enrolled dependent status.
such as subscriber only, subscriber with
one dependent, and subscriber with two
or more dependents.
"Credibility rating" means a rating
method that establishes premium rates
based upon the assignment of a level of
credibility to an HMO group's
historical utilization, intensity, or cost
experience.
"Fee-for-service" means payment for
health care services is made on a
retrospective basis based on the actual
value of those services.
"Full-service HMO" means an HMO
that provides a comprehensive range of
medical services, including hospital and
physician services.
"HMO expansion request" means all
materials submitted for the purpose of
obtaining authority to operate an HMO
in a new or expanded geographic area
in this State.
"HMO model type" means
classification that describes the manner
in which physicians are affiliated with
the HMO and the contractual and
payment arrangements with hospitals;
and includes types such as group,
network, staff, independent practice
association, and point-of-service.
"HMO rate filing" means an initial
HMO rate filing, and HMO expansion
request or an HMO rate revision filing.
"HMO rate revision filing" means all
materials submitted for the purpose of
making a revision to an existing
schedule of premiums.
"Incurred loss ratio" means the ratio of
total medical expenses including the
change in claim reserves to total earned
premium revenues.
"Initial HMO rate filing" means all
materials submitted for the purpose of
obtaining a certificate of authority to
operate an HMO in this State.
(16) "Qualified actuary" means an individual
who is an Associate or Fellow of the
Society of Actuaries or a Member of
the American Academy of Actuaries
and has at least five years of substantive
experience in the managed care field.
(17) "Single-service HMO" means an HMO
that provides one specific type of
medical service, such as vision or
dental care.
Statutory Authority G.S. 58-67-50(b); 58-67-150.
.0602 HMO GENERAL FILING
REQUIREMENTS
(a) All schedules of premiums for enrollee
coverage for health care services and amendments
to schedules of premiums that are filed with the
Department shall indicate whether the filing is an
original or amended filing. All data requirements
prescribed by this Section must be submitted
within 30 days after the date that the filing is
stamped received, or the filing will be deemed to
be disapproved.
(b) All filings shall be accompanied by:
(1) A certification by a qualified actuary
that the premiums applicable to an
enrollee are not individually determined
based on the status of his health and
that such premiums are established in
accordance with actuarial principles for
various categories of enrollees and are
not excessive, inadequate, or unfairly
discriminatory.
(2) Actuarial data supporting the schedule
of premiums as prescribed by 11
NCAC 16 .0603. 11 NCAC 16 .0604.
U NCAC 16 .0605 and U NCAC 16
.0606.
(c) All data and schedules that are required to be
filed by this Section shall be filed in duplicate.
Statutory Authority G.S. 58-67-50(b); 58-67-150.
.0603 HMO RATE FILING DATA
REQUIREMENTS
All HMO rate filings shall include the following
data:
(1) Identification and a brief description of
the HMO model type.
(2) Identification of the enrollee issue basis,
whether individual or group.
(3) Identification and a description of the
9:14 NORTH CAROLINA REGISTER October 14, 1994 1073
PROPOSED RULES
type of rating methodology, such as
community rating, community rating by
class, adjusted community rating,
credibility rating, or other.
(4) Identification and listing of al] rate
classification factors, such as age,
gender, geographic area, industry, group
size, or effective date.
(5) A description and numerical
demonstration of the development of the
capitated rate, including a listing of
sources used.
(6) A description and numerical
demonstration of the development of any
portion of the premium rate developed
for fee-for-service claims, including a
listing of sources used.
(7) A brief description of the claim reserving
methodology and the incorporation of
claim reserves into the premium rate.
(8) A description of the procedure and
identification of the assumptions used to
convert the total per member per month
cost to the proposed premium rates;
including assumptions for the distribution
of contracts by contract type, the ratios
of two-person and family rates to the
single rate, and the average number of
members in each contract type.
(9) The projected monthly incurred loss
ratios for the period of time equal to the
number of months for which the rates
will be in effect, plus the number of
months the rates will be guaranteed.
(10) The percentage of the p_er member per
month premium for each loading factor,
such as administration or overhead
expenses. marketing, broker
commissions, surplus or capital,
contingency reserve, reinsurance, and
profit margin.
Statutory Authority G S. 58-67-50(b); 58-67-150.
.0604 INITIAL HMO RATE FILING
DATA REQUIREMENTS
All initial HMO rate filings shall include, in
addition to the data required by 1 1 NCAC 16
.0603, the following data:
(1) A comparison of the rates to other HMO
rates with the same effective date in
North Carolina for similar benefit plans.
(2) A completed diskette, provided by the
Actuarial Services Division of the
Department, containing a three-year
financial projection that details total
membership, revenues and expenses, and
that includes a statement of cash flow, a
balance sheet, and a statement of working
capital and net worth.
Statutory Authority G.S. 58-67-10(d)(l); 58-67-
50(b); 58-67-150.
.0605 HMO EXPANSION REQUEST
DATA REQUIREMENTS
All HMO expansion requests shall include, in
addition to the data required by 11 NCAC 16
.0603, the following data:
(I) A comparison of the actual financial
results, including total membership,
revenues, and expenses, to the projected
financial results for at least the most
recent 12-month period preceding the
effective date of the proposed expansion.
£2} A completed diskette, provided by the
Actuarial Services Division of the
Department, containing a three-year
financial projection that details total
membership, revenues, and expenses, and
that includes a statement of cash flow, a
balance sheet, and a statement of working
capital and net worth for both the
existing service area and the proposed
area of expansion.
Statutory Authority G.S. 58-67-10(d)(l); 58-67-
50(b); 58-67-150.
.0606 HMO RATE REVISION FILING
DATA REQUIREMENTS
All HMO rate revision filings shall include, in
addition to the data required by 11 NCAC 16
.0603. the following data:
(1) The scope and reason for any rate
revision including a brief description of
the methodology employed to determine
the revised rates, such as budgetary or
cost method, fee-for-service method, or
other.
(2) The number of months the rates will be
in effect and the number of months the
rates will be guaranteed.
(3) The dates and percentage amounts of all
prior and requested rate revisions in
North Carolina; and quarterly rate
increases shall be shown in comparison to
both the immediately preceding quarter
and the corresponding quarter of the
previous 12-month period.
1074 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
£4} The North Carolina average annual per
member per month premium revenue
before and after the rate revision.
(5) Identification of any actual versus
expected utilization rates or medical costs
that may be used to justify a premium
rate revision.
(6) Identification, justification, and derivation
of any trend factor used to project
medical expenses.
(7) A comparison of the actual financial
results, including total membership,
revenues, and expenses, to the projected
financial results for at least the most
recent 12-month period preceding the
effective date of the revised rates.
(8) A completed diskette, provided by the
Actuarial Services Division of the
Department, that contains a financial
projection for the period of time equal to
the number of months the rates will be in
effect plus the number of months the
rates will be guaranteed, that details total
membership, revenues, and expenses, and
that includes a statement of cash flow, a
balance sheet, and a statement of working
capital and net worth.
Statutory Authority G.S. 58-67-50(b); 58-67-150.
.0607 HMO INCURRED LOSS RATIO
STANDARDS
(a) The following apply to all HMO rate
revision filings:
ID Premium rates are deemed to be
inadequate if any of the monthly
incurred loss ratios projected for North
Carolina over the period required by 1
1
NCAC 16 .0606(8) are greater than:
(A) 85.0% for a full-service HMO issued
on a group basis.
(B) 75.0% for a single-service HMO
issued on a group basis.
(C) 75.0% for a full-service HMO issued
on an individual basis.
(D) 65.0% for a single-service HMO
issued on an individual basis.
121 Premium rates are deemed to be exces-
(A)
im
sive if any of the monthly incurred loss
ratios projected for North Carolina over
the period required by 11 NCAC 16
.0606(8) are less than:
80.0% for a full-service HMO issued
on a group basis.
70.0% for a single-service HMO
issued on a group basis.
(C) 70.0% for a full-service HMO issued
on an individual basis.
(D) 60.0% for a single-service HMO
issued on an individual basis.
(b) The following apply to all initial HMO rate
filings and HMO expansion requests
:
(1) Premium rates are deemed to be inade-quate
if any of the monthly incurred
loss ratios projected for North Carolina
over the last 12 months of the three
year financial projection are greater
than:
(A) 85.0% for a full-service HMO issued
on a group basis.
(B) 75.0% for a single-service HMO
issued on a group basis.
(C) 75.0% for a full-service HMO issued
on an individual basis.
(D) 65.0% for a single-service HMO
issued on an individual basis.
(2) Premium rates are deemed to be exces-sive
if any of the monthly incurred loss
ratios projected for North Carolina over
the last 12 months of the three year
financial projection are less than:
(A) 80.0% for a full-service HMO issued
on a group basis.
(B) 70.0% for a single-service HMO
issued on a group basis.
(C) 70.0% for a full-service HMO issued
on an individual basis.
(D) 60.0% for a single-service HMO
issued on an individual basis.
Statutory Authority G.S. 58-67-50(b); 58-67-150.
TITLE 12 - DEPARTMENT OF JUSTICE
Notice is hereby given in accordance with G.S.
150B-21.2 that the North Carolina Sheriffs ' Educa-tion
and Training Standards Commission intends to
amend rule cited as 12 NCAC 10B .2105.
L he proposed effective date of this action is
January 1. 1995.
Instructions on How to Demand a Public Hearing
(must be requested in writing within 15 days of
notice): Any person interested in this proposed rule
amendment may demand a Public Rule-Making
Hearing by submitting a written request for such
hearing to the Commission within 15 days of
9:14 NORTH CAROLINA REGISTER October 14, 1994 1075
PROPOSED RULES
publication of this notice. This request should be
directed to Joan Neuner, Director, at the address
listed below.
MXeason for Proposed Action: The Commission
has previously filed this rule, making modifications
to .2105(a). The staff noted after the rule-making
hearing that an oversight was made in that we
failed to modify .2105(b) to be consistent with the
changes in .2105(a). We are therefore filing to
make this minor technical change to remove the
"30 day" requirement from .2105(b).
Comment Procedures: Any person interested in
this proposed rule amendment may present written
comments relevant to the proposed action to the
Commission by November 14, 1994. Written
comments should be directed to Joan Neuner,
Director, at the address listed below. This
proposed rule amendment is available for public
inspection and copies may be obtained at the
following address: Sheriffs' Standards Division,
N.C Dept. of Justice, P.O. Drawer 629, Raleigh,
NC 27602.
CHAPTER 10 - N.C SHERIFFS'
EDUCATION AND TRAINING
STANDARDS COMMISSION
officer has complied with the require-ments
of 12 NCAC 10B .2103 and
.2104; and
(2) the justice officer and the sheriff re-ceive
from the Commission documenta-tion
that the Commission has terminated
the suspension and reinstated the certifi-cation
to the justice officer.
(d) Any justice officer previously unauthorized
to carry a weapon but whose status changed to
"authorized to carry a weapon," must comply with
the provisions set out in 12 NCAC 10B .2103 and
.2104; and may not carry a firearm until:
(1) the sheriff forwards to the Commission
documentary evidence verifying that the
officer has complied with the require-ments
of 12 NCAC 10B .2103 and
.2104; and
(2) the justice officer and the sheriff re-ceive
from the Commission documenta-tion
that the Commission has amended
the officer's status to "authorized to
carry a weapon" and all certification
files reflect the same.
Statutory Authority G.S. 17E-4; 17E-7.
TITLE 13 - DEPARTMENT
OF LABOR
SUBCHAPTER 10B - NC SHERD7FS'
EDUCATION AND TRAINING
STANDARDS COMMISSION
SECTION .2100 - JUSTICE OFFICERS'
FIREARMS IN-SERVICE TRAINING
REQUALIFICATION PROGRAM
.2105 FAILURE TO QUALIFY
(a) Justice officers who fail to qualify pursuant
to Rule .2104 shall immediately surrender their
weapons to the sheriff, upon his request, and shall
have 30 days in which to obtain the qualification
score required in 12 NCAC 10B .2104.
(b) Failure to qualify within the 30 day time
period allowed in 12 NCAC 10B .2105(a) will
result in the summary suspension of the justice
officer's certification by the Commission.
(c) No justice officer summarily suspended
under Paragraph (b) of this Rule and in compliance
with 12 NCAC 10B .0206(a)(3) may work as a
certified justice officer until:
(1) the sheriff forwards to the Commission
documentary evidence verifying that the
iSotice is hereby given in accordance with G.S.
150B-21.2 that the North Carolina Department of
Labor intends to amend rules cited as 13 NCAC 13
.0101, .0201 - .021 3, .0301 - .0304, .0306, .0401
- .0403, .0405 - .0406, .0409 - .0410, .0413 -
.0416, .0421, .0501, .0504, .0801, .0803 - .0805,
. 0807 - . 0809, . 0812 - . 0813, . 0815; adopt . 0103,
.0305, .0404, .0407 -.0408, .0411, .0420; repeal
.0502 - .0503, .0601 - .0609, .0810, .0814 and
.0816.
1 he proposed effective date of this action is
January 1, 1995.
1 he public hearing will be conducted at 9:30
a.m. on November 3, 1994 at the NC Department
of Agriculture Bldg. , Room 359, 1 W. Edenton
Street, Raleigh, NC 27601.
Reason for Proposed Action: To update the
Uniform Boiler and Pressure Vessel Regulations.
The N. C Department of Labor is submitting
1076 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
proposed rules regarding the Uniform Boiler and
Pressure Vessel Act. As part of the process of
revising these rules, the Department proposes a
rearrangement of the numbers in certain sections.
This proposal is made for purposes of clarifying
the rules. The proposed changes are mainly
reflected in Section . 0400 with one such change in
Section .0300.
(comment Procedures: Please submit your com-ments
to Mr. Scott Templeton, APA Coordinator,
NC Dept of Labor, 4 W. Edenton Street, Raleigh,
NC 27601, FAX (919) 733-6197; Telephone (919)
733-0368 by November 14, 1994. You may pres-ent
written or oral comments at the hearing;
however, time limits may be imposed by the Chair.
CHAPTER 13 - BOILER AND
PRESSURE VESSEL
SECTION .0100 - DEFINITIONS
.0101 DEFINITIONS
The following definitions are applicable through-out
this Chapter:
(1) (3) "Appurtenance" means any control,
fitting, appliance or device attached to or
working in conjunction with the boiler or
pressure vessel proper. NOTE: The
term "appurtenance " is used in Section
III of the ASME Code (Nuclear) in a
manner—different—from—the
—
definition
herein.—Section III i s incorporated into
these
—
Rules—by
—
reference—(see—R-u4e
.0401).—When construing the provisions
of Section HI, apply the special use of
the term therein.
121 f»"ASME Code" means all sections of
the Boiler and Pressure Vessel Code of
the American Society of Mechanical
Engineers that have been adopted by the
Boiler and Pressure Vessel Division.
(3) "Audit" means activities performed by
the Director, his designee, or a deputy
inspector other than those identified as
inspections, including:
(a) reviews and surveys for ASME and
National Board stamp issuance and
renewal:
fb) audits performed on an inspector at the
location of a manufacturer or repair
organization as may be required by the
ASME Code, National Board Inspection
Code, or National Board Rules and
Regulations; and
(c) audits pursuant to evaluation for the
issuance of North Carolina Specials.
(4) "Automatically fired boiler" means a
boiler which does not require a constant
attendant for the purpose of introducing
fuel into the combustion chamber.
(5) {^"Authorized inspection agency" means
ene—©f an organization employing
inspectors holding valid North Carolina
Commissions and National Board
Commissions, including the following:
(a) a department or division established by
a state, commonwealth, or municipality
of the United States, or a province of
Canada, which has adopted one or more
sections of the ASME Code (of which
one
—
shall—be
—
Section—V)—and
—
whose
inspectors hold valid commissions with
the
—
National—Board—ef-
—
Boiler—a«d
Pressure Vessel Inspectors; the
Department of Labor;
(b) an inspection agency of an insurance
company licensed to write boiler and
pressure vessel insurance and whose
inspectors hold valid North Carolina
commissions ; or
(c) an owner-user inspection agency that
meets the requirements of G.S.
95-69.15.
(6) "Board" means the North Carolina Board
of Boiler and Pressure Vessel Rules.
£71 <4)"Boiler," as defined in G.S.
95-69. 9(b), includes the following types
of boilers:
(a) "Power boiler" means a boiler in which
steam or other vapor is generated at a
pressure of more than 15 psig and
includes a high—pres s ure,
high-temperature water boiler and an
unfircd steam boiler;
fb) "High pressure, high temperature water
boiler" means a water boiler operating
at pressures exceeding 160 psig or
temperatures exceeding 250 °F or both
at or near the boiler outlet;
fe) "Unfircd—
s
team—boiler"—means—an
unfired pressure vessel in which steam
pressure is generated by the application
of heat from an indirect source;
(b) fd)"Heating boiler" means^
£il a steam boiler operated at pressures
not exceeding 15 psig^j or
(ii) a hot water heating boiler operated at
pressures not exceeding 160 psig and
9:14 NORTH CAROLINA REGISTER October 14, 1994 1077
PROPOSED RULES
temperatures not exceeding 250°F, at
or near the boiler outlet; and outlet,
and supplying heated water, normally
used for building heat applications
(hydremic boiler), in which water is
returned to the boiler from the piping
system;
fe) a " Hot hot water supply or storage
vessel boiler- means—a
—
boiler—ef
indirectly fired pressure vessel
completely—filled—with
—
water that
furnishes hot water to be used
externally to itself (domestic water
boiler) at pressures not exceeding 160
psig or temperatures not exceeding
250 °F at or near the hot water outlet.
outlet; and
(iv) a potable hot water heater operating at
pressures not exceeding 160 psig and
temperatures not exceeding 210°F. at
or near the boiler outlet, and
supplying water intended for potable
use only,
(c) "Steam boiler" means a power boiler or
heating boiler which generates steam or
other vapor within the internal
mechanism or at the boiler outlet during
operation;
(d) "Water boiler" means a power boiler or
heating boiler which does not produce
steam or other vapor during operation.
The term water boiler also applies to
boilers heating liquids other than water
which do not create a vapor during
operation.
m 'Boiler blowoff" means that system
associated with the rapid draining of
boiler water to remove concentrated
solids which have accumulated as a
natural result of steam generation. This
term also applies to the blowoff for other
boiler appurtenances, such as the low-water
fuel cutoff.
(9) (§}"Boiler or pressure vessel proper"
means the internal mechanism, shell, and
heads of a boiler or pressure vessel
terminating at:
(a) the first circumferential joint for welded
end connections;
(b) the face of the first flange in bolted
flange connections; or
(c) the first threaded joint in threaded
connections.
Note: Superheaters, economizers and
other pressure parts connected directly to
the boiler or pressure vessel without inter-vening
valves are part of the boiler or
pressure vessel proper.
(10) {^"Certificate inspection" means an
inspection, the report of which is used by
the Director as justification for issuing,
withholding or revoking the inspection
certificate, and may consist of an internal
or a general inspection . The term certifi-cate
inspection also applies to the exter-nal
inspection performed in accordance
with these Rules whether or not a certifi-cate
is intended to be issued as a result of
the inspection.
(1 1) (6) "Certificate of competency" means the
certificate issued to a person who has
passed the inspector's examination given
by the Board of Boiler and Pressure
Vessel Rules and who is employed by an
Authorized Inspection Agency.
(12) "Commissioner" means the Commission-er
of the North Carolina Department of
Labor.
(13) (40) "Condemned boiler or pressure ves-sel"
means a boiler or pressure vessel:
(a) that has been found not to comply with
G.S. Chapter 95, Article 7A, and/or
these Rules;
(b) that constitutes a menace to public
safety; and
(c) that cannot be repaired or altered so as
to comply with G.S. Chapter 95, Arti-cle
7A, and these Rules.
(14) "Coil type water tube boiler" means a
boiler having no steam space, such as a
steam drum, whereby the heat transfer
portion of the water containing space
consists only of a coil of pipe or tubing.
(15) "Deputy inspector" means a boiler and
pressure vessel inspector employed by the
Division.
(16) (44)"Design criteria" means ASME and
divisional Divisional requirements relat-ing
to the mode of design and construc-tion
of a boiler or pressure vessel.
"Factor of safety" means the ratio of
allowable stress to strength.
(4-3)"Division" means the Boiler and
Pressure Vessel Division of the North
Carolina Department of Labor.
fl-£)" External inspection" means an in-spection
of the external surfaces and
appurtenances of a power boiler or pres-sure
vessel while it is in operation . An
external inspection may entail the "shut-
07}
18)
1078 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
am
(20)
(21)
(22)
(23)
(24)
(25)
(26)
fa)
fbl
£d)
(27)
ting down" of a boiler or pressure vessel
while it is in operation, including inspec-tion
of internal surfaces. If the inspector
determines this action is warranted.
"Hydropneumatic storage tank" means a
pressure vessel used for storage of water
at ambient temperature and where a
cushion of air is contained within the
vessel.
"Imminent danger" means any condition
or practice in any location that a boiler or
pressure vessel is being operated which is
such that a danger exists, and which
could reasonably be expected to cause
death or serious physical harm immedi-ately
or before the imminence of such
danger can be eliminated through the
enforcement procedures otherwise pro-vided
by these Rules.
"Inspector" means an inspector in posses-sion
of a valid North Carolina Commis-sion
and a National Board Commission
including a deputy inspector, an insur-ance
inspector, or an owner/user inspec-tor.
"Insurance inspector" means the special
inspector employed by an Insurance
Company, and holding a valid North
Carolina Commission and National Board
Commission.
(15)" Internal inspection" means as com-plete
an examination as can reasonably be
made of the internal and external surfaces
and appurtenances of a power boiler
while it is shut down.
"Maximum allowable working pressure"
means the lesser of the maximum allow-able
working pressure as determined by
the manufacturer in accordance with the
requirements of the ASME code, or as
determined by the Director in accordance
with these Rules.
{+8)" Menace to public safety" means a
boiler or pressure vessel that cannot be
operated without a substantial risk of
injury to persons and property.
"Miniature boiler" means a boiler which
does not exceed any of the following:
16 inch inside shell diameter;
20 square feet of heating surface (does
not apply to electrically fired boilers);
5 cubic feet volume; and
100 psi maximum allowable working
pressure.
{+9)"National Board" means The Nation-al
Board of Boiler and Pressure Vessel
Inspectors, 1055 Crupper Avenue, Co-lumbus,
Ohio 43229, whose membership
is composed of the chief inspectors of
government jurisdictions who are charged
with the enforcement of the provisions of
the ASME Code.
(28) (8) "Commiss ion, National—Board "Na-tional
Board Commission" means the
commission issued by the National Board
to a holder of a certificate of competency
who desires to make shop inspections or
field inspections in accordance with the
National Board bylaws and whose cm 1
ploycr submits the in spector's application
to the national board for such commis
sieft has fulfilled the requirements of the
National Board and who is in the full
time employ of an Authorized Inspection
Agency.
(29) {39)"National Board Inspection Code"
means the inspection handbook published
by the National Board, as adopted by the
division Division .
(30) £4-6)" Nonstandard boiler or pressure
vessel" means:
(a) power boilers contracted for or installed
before December 7, 1935;
(b) heating boilers contracted for or in-stalled
before January 1, 1951;
(c) pressure vessels contracted for or in-stalled
before January 1, 1976;
(d) non ASME Code constructed hydro
-
pneumatic storage tanks containing
water under pressure at ambient tem-peratures
contracted for or installed
before January 1, 1986; ftftd
(e) unfircd—pressure—vessels—used—in air
conditioning/refrigeration system s
operated entirely full of water or other
liquid which—is not materially—more
hazardous water contracted for or in
stalled before July 1
,
—1985, provided
the owner or user has registered the
ves sel with the divi sion prior February
28 , 1987, and the manufacturer of such
vessel provides an extended warranty or
similar protection when the Commis
sioncr determines that such vessel may
be operated without serious threat to
life or property.—At the time the own
cr or user registers the vessel he shall
provide full documentation regarding
the date the vessel was contracted for,
the date the vessel was installed, the
9:14 NORTH CAROLINA REGISTER October 14, 1994 1079
PROPOSED RULES
Hi
(31
(32)
(33)
(34)
age of the ves sel, the date the owner or
user accepted the vessel, a oopy of any
in surance policy covering the vessel and
a full explanation of the location of the
vessel including its proximity to electric
wiring or conduits and an analysis of
any possible damage or injury to per
sens—ef
—
property—that
—
would—occur
should the vessel rupture.—Following
such registration and application, the
Commissioner shall make hi s decision
concerning—the—type
—
of warranty—or
similar protection that will be required
within 30 days immediately following
the receipt of the registration and appli
cation, boilers or pressure vessels for
which the ASME Code is not intended
to apply, other than those boilers and
pressure vessels to which the term
North Carolina Special applies; and
NOTE: T-h4s
—
classification—includes
ASME Code constructed boiler and pres
sure ves sels installed or contracted for
prior to the enactment of applicable legi s
lation regulating its use.
hydropneumatic storage tanks installed
at a distance of not less than 250 feet
from a building of public assembly,
apartment house, or residence, and
provided with overpressure protection.
"Normal working hours" means between
(35)
the hours of 6^00 AN1 and 8^0 PM.
Monday through Friday, except for state
recognized holidays.
(9)"Commission, North Carolina "North
Carolina Commission " means the com-mission
card issued by the Board, to
holders of certificates of competency a
National Board Commission, authorizing
them to conduct shop and field inspec-tions
in this State.
"NPS" means nominal pipe size.
(24)"Nuclear energy system" means and
refers to any closed vessel in which water
is heated, steam is generated, steam is
superheated, or any combination thereof
under pressure or vacuum for use exter-nally
to itself by the direct application of
heat from nuclear energy and associated
components, vessels, piping systems,
pumps, valves, storage tanks, and appur
tenances , as "appurtenances" is used in
Section HI of ASME Code, appurtenanc-es.
"Operating pressure" means the pressure
of the lowest set safety valve installed on
the boiler or pressure vessel.
(36) (33)"Owner or user" means any person
or legal entity responsible for the safe
operation of any boiler or pressure vessel
installed in this State. This term shall
also apply to a contractor, installer, or
agent of the owner or user, as applicable.
(33)"Pressure piping" means piping
including welded piping, external to
power boilers from the boiler proper to
the required stop valve(s).
{24)"Pressure vessel proper"; see boiler
or pressure vessel proper.
(24)"PSIG" means pounds per square
inch gauge.
(37)
(38)
(39)
(40> (1 4)"Gencral in spection"—means as com
plctc an examination as can reasonably be
made of the internal and external surfaces
and appurtenances of a heating boiler or
pressure vessel preferably while it i s in
operation. A general—inspection may
entail the "shutting down" of a heating
boiler or pressure vessel—for a closer
examination if an authorized inspector
feels this action is warranted. "Reinspec-tion"
means as complete an examination
as is necessary to verify that any repair
or corrective action required as a result
of a certificate inspection is completed.
(41) "Safety valve" means any safety valve,
safety relief valve, pressure relief valve,
or non-reclosing device intended to pre-vent
overpressurization of a boiler or
pressure vessel.
(42) {36)"Shop inspection" means an inspec-tion
performed by a state an inspector
pursuant to an inspection service agree-ment
whereby the fabrication process tor
a boiler or pressure vessel is inspected.
or the repair or alteration of a boiler or
pressure vessel is observed to ensure
compliance with ASME and the National
Board.
(43) {33)"Special inspection" means any in-spection
performed by the state a deputy
inspector other than a regularly scheduled
inspection and includes instances where
the original inspection was rescheduled
due to the owner's or user's failure to
prepare the boiler or pressure ves sel after
notification . Special inspection also
includes the performance of an inspection
by a deputy inspector which requires that
the inspector make a special trip to meet
1080 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
the needs of the individual or organiza-tion
requesting the inspection, including
performing certificate inspections during
hours other than normal working hours,
and inspection of field repairs and alter-ations.
Statutory Authority G.S. 95-69.11; 95-69.14.
.0103 INCORPORATED STANDARDS
The following standards are incorporated by
reference elsewhere in these Rules. These stan-dards
are available for public inspection at the
office of the Director and may be purchased at the
address in this Rule. The prices listed in this Rule
reflect the price as of the date of adoption of this
Rule. For current prices, the organization listed in
this Rule should be contacted.
(1) National Board Inspection Code (NBIC)
National Board of Boiler and Pressure
Vessel Inspectors,
1055 Crupper Avenue, Columbus, Ohio
43229
phone number: (614) 888-8320
cost: fifty dollars ($50.00).
(2) American Society of Mechanical Engi-neers
(ASME) Boiler and Pressure Vessel
Code
American Society of Mechanical Engi-neers,
United Engineering Center, PO
Box 3199, Grand Central Station. New
York. New York 10163
phone number: 1-800-THE-ASME.
cost: four thousand seven hundred and
fifty three dollars ($4,753.00).
(3) North Carolina State Building Code
North Carolina Department of Insurance.
Code Council Section. PO Box 26387,
Raleigh. NC 27611
phone number: (919) 733-3901
cost: two hundred and fifty dollars
($250.00).
Statutory Authority G.S. 95-69. 11; 95-69. 14.
SECTION .0200 - ADMINISTRATION
.0201 NAME: ADDRESS
(a) The Boiler and Pressure Vessel Division,
which administers the provisions of Article 7A of
G.S. Chapter 95, is located in the Raleigh office of
the department on the corner of Edenton and
Salisbury Streets.
(b) Address correspondence to:
Boiler and Pressure Vessel Division
North Carolina Department of Labor
4 West Edenton Street
Raleigh, North Carolina 27601
Telephone (919) 733-2383
Fax (919) 733 6197 733-0917.
Statutory Authority G.S. 95-4; 95-69.12.
.0202 INSPECTOR QUALIFICATION
(a) Applicants for a certificate of competency
shall sati sfy the requirement of G.S. 95 69.15(c).
Inspectors performing certificate inspections shall
be in possession of a valid North Carolina
Commission and National Board Commission.
Inspectors performing nuclear inservice inspection
shall be in possession of a valid North Carolina
Commission and shall meet the additional
requirements of the ASME Code and the National
Board, including possession of the applicable
endorsements to the National Board Commission.
(b) A Certificate of Competency shall be issued
to an inspector who satisfactorily passes an
examination written and graded by the National
Board and administered by the Board. The
Certificate of Competency authorizes an individual
to apply to the National Board for a National
Board Commission. In order to take the North
Carolina—Board of Boiler and—Pressure Vessel
Rules
' examination [see G.S. 95-69. 15(c)(1)], an
applicant shall meet one of the following
qualifications:
(1) a degree in mechanical engineering plus
one year of experience in design,
construction, operation, or inspection of
high-pressure boilers and pressure
vessels;
(2) a degree in a branch of engineering,
other than mechanical engineering plus
two years of experience in construction,
operation, or inspection of
high-pressure boilers and pressure
vessels; or
(3) the equivalent of a high school
education plus three years experience:
(A) in high-pressure boiler and pressure
vessel construction or repair;
(B) as an operating engineer in charge of
high-pressure boiler operations; or
(C) as an inspector of high-pressure
boilers and pressure vessels.
(c) Applications for the examination are
available from the director—and Director-
Completed applications shall contain an accurate
educational and employment history.
(d) The Board of Boiler and Pressure Vessel
9:14 NORTH CAROLINA REGISTER October 14, 1994 1081
PROPOSED RULES
Rules' examination is prepared and graded by the
National Board and :
(1) covers the construction, installation,
operation, maintenance and repair of
boilers and pressure vessels and their
appurtenances;
(2) is given on the first Wednesday and
one-half day Thursday in March, June,
September, and December at a site
selected by the director; and Director,
provided that a minimum of four
applicants are registered; and
(3) is administered upon payment to the
Department of Labor of a fee of
thirty five dollars ($35.00) fifty dollars
($50.00) which is also required when
the examination is retaken by an
unsuccessful applicant.
(e) Success ful—applicants—w4H—be
—
issued
certificates of competency by the board, s igned by
the chairperson of the board and the director,
when—employed—by
—
&h—authorized—inspection
agency. A grade of 70 percent or greater must be
attained to achieve a passing grade on the
examination.
(f) When requested by the employing Authorized
Inspection Agency, a North Carolina Commission,
bearing the signature of the chairperson of the
Board, shall be issued to persons holding a valid
National Board Commission, upon payment of the
applicable fee.
Commission shall be returned by the inspector to
the division Division upon termination of
employment.
(e) A North Carolina commission Commission
may be suspended or revoked by the board, in
accordance with G.S. 95-69.17 for incompetence,
untrustworthiness or willful falsification of any
statement in an application or inspection report.
The Board shall give notice of the commencement
of proceedings for suspension or revocation of a
commission pursuant to G.S. 150B-23. A North
Carolina Commission may be suspended prior to
the hearing if the Board determines that the public
health, safety or welfare requires this action. In
this case, the proceedings will be promptly
commenced and determined. The Board's decision
regarding the competency of an inspector shall be
determined after consideration of the knowledge,
skill, and care ordinarily possessed and employed
by boiler and pressure vessel inspection personnel
in good standing. Industry custom and practice
shall be considered but are not determinative.
Failure to perform the inspections in accordance
with these rules shall constitute incompetence.
The inspector will be given the opportunity to
show that he is_ performing his duties in a
competent manner and that suspension or
revocation is unwarranted. If the inspector
believes that the decision of the Board is not
warranted, he shall file for a judicial hearing
pursuant to Article 4 of G.S. 150B.
Statutory Authority G.S. 95-69.11; 95-69.15. Statutory Authority G.S. 95-69.11; 95-69.15.
.0203 NORTH CAROLINA COMMISSION
(a) When requested by the employer, a North
Carolina commission card Commission , bearing
the signatures signature of the chairperson of the
board and director , will be issued by the board
Board to persons meeting the qualifications in G.S.
95 69.15(a) and G.S. 95 69.15(c) holding a valid
National Board Commission.
(b) Requests for a North Carolina commission
eafd Commission are processed upon proof of a
certificate ef-
—
competency National Board
Commission issued by the National Board and
payment of a ten dollar ($10.00) fee fifteen dollar
($15.00) fee to the Department of Labor.
(c) North Carolina commission—cards
Commissions are valid through December 31, at
which time each inspector the inspector's employer
shall submit a renewal application and a ten dollar
($10.00) fee fifteen dollar ($15.00) fee to the
Department of Labor .
(d) The North Carolina commission—eafd
.0204 CONFLICT OF INTEREST
An inspector shall not engage in any
profit-making enterprise relating to boilers,
pressure vessels, nuclear energy systems, or their
appurtenances, aside from his or her regular
employment as an inspector nor engage in ef any
conduct that would otherwise constitute a conflict
of interest.
Statutory Authority G.S. 95-69.11; 95-69.14.
.0205 OWNER-USER INSPECTION
AGENCY
(a) A company seeking to institute—a*
owner user inspection agency perform inspections
of its own boilers and pressure vessels shall file an
application with the director Director and obtain
approval from the Board of Boiler and Pressure
Vessel Rules .
(b) The company shall, in its application,
designate an experienced technician or a supervisor
1082 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
who shall be a registered professional engineer
within its employ as its inspector supervisor , who,
upon approval of the application, shall:
(1) ascertain that the company's inspectors,
pursuant to Rules .0202 and .0203 are
issued certificates of competency and
owner-user commission cards;
(2) supervise inspections of boilers and
pressure vessels and see that an
inspection report, signed by the
owner-user inspector, is filed at the
equipment site;
(3) promptly notify the director Director of
any unsafe boiler or pressure vessel
which presents a condition of imminent
danger;
(4) maintain a master file of inspection
records which shall be made available
for examination by the Director or his
representative during business hours :
(A) identifying each boiler and pressure
vessel by serial number and
abbreviated description; and
(B) showing the date of the last and next
scheduled inspection; and
{€)
—
made available for examination by the
director or his representative during
business hours; and
(5) fi4e7 on a date mutually agreed upon
with the director Director, file an
annual statement signed by the
supervising inspector supervisor ,
showing the number of pressure vessels
and certifying that each inspection was
performed pursuant to these Rules,
accompanied by a filing fee of fifteen
dollars ($15.00) per vessel.
(c) Inspection certificates are not required for
boilers and pressure vessels inspected under an
owner-user program.
Statutory Authority G.S. 95-69.11; 95-69.15.
.0206 OWNER OR USER TO NOTIFY
DIRECTOR OF ACCIDENT
(a) When an accident renders a boiler, pressure
vessel, or nuclear energy system inoperative, or
causes damage to property, personal injury, or
death, the owner or user shall immediately notify
the director Director in writing by the most
expedient means available. This notification shall
be followed by a detailed written description and
describe the accident in detail .
{&)
—
In ease of a serious accident involving
personal injury or explosion, the owner or user
shall immediately notify the—director by telephone
or telegraph.
{e)£b) No person shall remove or disturb the
boiler, pressure vessel, or nuclear energy system,
or any of its parts, before an authorized inspection
investigation by the Director has been made,
except for the purpose of conserving life or
limiting consequential damages.
(c) Insurance inspectors who elect to investigate
an accident may do so after the Director has
concluded his investigation. Any insurance
inspector who elects to investigate an accident
shall submit an accident report to the Director
within 10 days of the completion of the
investigation.
Statutory Authority G.S. 95-69.11; 95-69.14.
.0207 INSPECTION REPORTS
Special Inspectors shall file:
(1) inspection reports with the director
Director within 30 K) days after each
certificate inspection; and
(2) inspection reports with the director
Director regarding all hazardous
conditions of imminent danger, or any
condition that would result in the
insurance company's refusal to issue or
continue an insurance policy on the
boiler, pressure vessel, or nuclear energy
system, immediately.
Statutory Authority G.S. 95-69.11; 95-69. 14.
.0208 INSURANCE COMPANIES TO
NOTIFY DIRECTOR
(a) All insurance companies shall notify the
director Director by reference to the applicable
North Carolina serial number and owner/user's
name and address within 30 K) days regarding
actions taken on all boiler, pressure vessel, or
nuclear installation risks, including but not limited
to:
(1) the issuance of a policy;
(2) the cancellation of a policy; ef
(3) the non-renewal or suspension of a
policy because of unsafe conditions; or
(4) removal of a boiler or pressure vessel
from service.
(b) Should the inspector, during the course of
making an inspection, find a condition of imminent
danger, he shall immediately notify the Director by
telephone or fax in order that steps might be taken
to remove the vessel from service.
(c) The inspector shall notify the Director
9:14 NORTH CAROLINA REGISTER October 14, 1994 1083
PROPOSED RULES
immediately upon becoming aware of an accident
which renders a boiler, pressure vessel, or nuclear
energy system inoperative or causes damage to
property, personal injury, or death.
Statutory Authority G.S. 95-69.11; 95-69.14.
.0209 CONTRACTORS TO NOTIFY
DIRECTOR
All contractors installing boilers or pressure
vessels in any public building or in an apartment
house of s ix families or more subject to inspection
in accordance with these Rules shall report the
installation within 30 days to the director, notify
the Director and request a certificate inspection not
less than 30 days prior to placing equipment in
operation. Equipment shall not be operated prior
to the owner or user obtaining an inspection
certificate. Payment of the initial inspection fee
shall be the responsibility of the requesting
contractor.
Statutory Authority G.S. 95-69.11; 95-69. 14.
. 02 1 SHOP INSPECTION AND NATIONAL
BOARD R STAMP QUALIFICATION
AUDITS
(a) Manufacturers seeking to employ state
deputy inspectors to inspect their fabrication
process for boilers, pressure vessels, and nuclear
energy system components, pursuant to the ASME
Code Code, shall enter into a written agreement
with the North Carolina Department of Labor for
this purpose.
fb) The Department of Labor shall perform the
qualification audit for issuance of the National
Board R symbol stamp pursuant to the National
Board Inspection Code as adopted, except as
modified herein.
(c) The Department of Labor shall not perform
the qualification audit for those individuals or
organizations for which the Department of Labor
provides inspection services, for those individuals
and organizations in possession of or concurrently
applying for an ASME Code symbol stamp, or for
those individuals or organizations which
specifically request the audit be performed by the
National Board.
(d) An audit to be performed by the Department
will be scheduled upon receipt of request by the
National Board. Payment of the fee as required in
Rule .0213 of this Section shall be the
responsibility of the individual or organization
being audited. Should an applicant not be
successful in obtaining accreditation, the applicable
fee shall be paid before a new audit is performed.
Statutory Authority G.S. 95-69.11; 95-69.14.
.0211 CERTD7ICATE INSPECTIONS
(a) An authorized inspector shall inspect all
boilers and pressure vessels at the time of
installation and at regular intervals thereafter, as
provided in this Rule.
(b) Subject to the exceptions in Paragraphs (c)
and (d) of this Rule, and after seven days notice is
given to the owner or user, an authorized inspector
shall conduct an internal inspection for a power
boiler at the time of installation and annually
thereafter. S« Three to nine months after the
interna] inspection, an external inspection shall be
performed. Issuance of the inspection certificate
shall be based on the results of the internal
inspection.
(c) In place of the first internal inspection for a
new power boiler being placed into service for the
first time , an inspector may conduct a general an
external inspection if the inspector feel s determines
that data sufficient to determine compliance with
the rules of this Chapter these Rules can be
gathered from a general an external inspection.
(d) Miniature boilers- and boilers, coil-type
watertube boilers boilers, and boilers heating a
fluid other than water which do not produce steam
or vapor operating as power boilers shall undergo
a
—
general an external inspection annually.
Miniature boilers and boilers, coil-type watertube
boilers and boilers heating a fluid other than water
operating as heating boilers shall undergo a
general an external inspection biennially.
(e) Heating boilers and pressure vessels.! except
hydropneumatic storage tanks, shall undergo a
general an external inspection biennially.
(f) Owner-user inspectors shall conduct
inspections for boilers and pressure vessels as
prescribed in this Rule.
fg}
—
Boiler and pressure vessel components of
nuclear energy systems shall be inspected pursuant
to Section XI of the ASME Code.
{h-Hg) Authorized inspectors Inspectors may
order coverings removed, internal inspections,
external inspections, control and safety device
testing or calibration , or pressure tests whenever
conditions warrant further evaluation of a boiler,
pressure vessel, or nuclear energy system.
(h) Hydropneumatic storage tanks shall undergo
an external inspection every five years, except that
hydropneumatic storage tanks installed at a
distance of not less than 250 feet from a building
of public assembly or apartment house need not be
1084 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
inspected, nor receive an inspection certificate.
(j) When the inspector or Director determines
that a certificate can not be issued as a result of an
inspection, the boiler or pressure vessel shall be
reinspected after the necessary repairs are made.
(j) Inspections shall be performed in accordance
with the National Board Inspection Code, Chapter
H, Inspection of Boilers and Pressure Vessels,
1992 edition, including subsequent amendments
and editions, which is hereby incorporated by
reference. The inspector may require controls and
safety devices to be disassembled, tested, checked
or calibrated as necessary to ensure their proper
operation.
(TO The Director may consider extending an
existing inspection certificate for a power boiler
for a period not exceeding 60 days beyond the
certificate expiration date, should an inspection at
the specified period result in undue hardship for
the owner or user. The owner or user shall submit
a written request to extend an existing inspection
certificate, providing justification for an extension.
The request shall include a report from a
commissioned inspector of an external inspection
which shall have been performed no earlier than
60 days before the certificate expiration date, and
the inspection report shall include a
recommendation from the inspector for an
extension to the inspection certificate.
(1) The inspection frequency established by this
Rule may be modified by the Director for
individual boilers and pressure vessels if the
Director determines that due to unique conditions,
the frequency established herein is not appropriate,
and that the safety attained by the normal
inspection frequency will be otherwise obtained.
Statutory Authority G.S. 95-69.11; 95-69.14.
.0212 PREPARATION FOR INSPECTION
(a) The owner or user shall prepare a power
boiler for internal inspection by:
(1) cooling the boiler, furnace, and setting
so as to prevent damage to any part;
(2) draining and washing thoroughly
internal parts to be inspected; inspected,
including disassembly and cleaning of
float bowl type low-water fuel cutoff
devices and associated piping plugs or
caps;
(3) removing wash-out, drain, and
inspection plugs;
(4) removing enough of the grates in an
internally fired boiler to permit
inspection;
(5) removing enough brickwork,
refractory, and insulation to permit
inspection;
(6) removing manhole and handhole plates;
(7) preparing the controls and safety
devices for inspection and testing; and
(8) preventing leakage of water, steam, or
vapors into boiler interiors that would
endanger personnel, personnel;
(9) providing adequate ventilation to
prevent the accumulation of hazardous
gasses; and
(10) providing, when required, a competent
person, as defined under the North
Carolina Occupational Safety & Health
standard for confined spaces, to assist
the inspector in the performance of his
inspection.
(b) In addition to the requirements in Paragraph
(a) of this Rule, the owner or user shall prepare a
power boiler that has a manhole and which is
connected to a common header with another boiler
for internal inspection by:
(1) closing and tagging, or padlocking, the
nonreturn and steam stop valves and
opening all drain valves or cocks
located between the nonreturn and
steam stop valves;
(2) closing and tagging, or padlocking, the
feed and check valves and opening all
drain valves or cocks located between
the feed and check valves;
(3) draining boiler and then closing and
padlocking the blowoff valves;
(4) disconnecting, at the request of the
inspector, blowoff lines between
pressure parts and valves;
(5) opening all drains and vent lines; and
(6) after complying with all other
provisions of Rule .0212, open opening
the manhole covers.
(c) The owner or user shall prepare a heating
boiler,—water tube coiled type boiler,—miniature
boiler, or pressure vessel which is required by the
inspector to be inspected internally by:
{4} removing manhole and handhole plates,
as—weH—as
—
cleaning—and
—
inspection
plugs;
{3) cleaning internal surface s and
adequately ventilating—aH interior
spaces;
{$) i solating the unit to the extent that
internal—temperature,—pressure,—and
environment—afe—net
—
injurious—te
personnel and arc under strict control;
9:14 NORTH CAROLINA REGISTER October 14, 1994 1085
PROPOSED RULES
(4) removing—l i nings—&r—coverings—as
directed by the inspector upon hi s or
her arrival; and
{§) preparing pressure gauges fef
in spection or testing. The owner or
user need not make any special
preparation for an external inspection of
a boiler or pressure vessel, except that
if the inspector requires the boiler or
pressure vessel to be shut down for a
closer inspection, the boiler or pressure
vessel shall be prepared as is required
for the internal inspection of a power
boiler.
Statutory Authority G.S. 95-69.11.
.0213 FEES
(a) An eighteen dollar ($1 8 .00) A twenty dollar
($20.00) certificate and processing fee for each
boiler or pressure vessel inspected by a Special an
Insurance Inspector and found to be in compliance
with these Rules shall be paid to the North
Carolina Department of Labor.
(b) An inspection and certificate fee shall be
paid to the North Carolina Department of Labor
for each boiler or pressure vessel inspected by the
State, a deputy inspector as follows:
(1) General External Inspection [.0101(1 4)]
(A) vessel—entry—aet
—
required pressure
vessels - $25.00;
(B) vessel entry required boilers - $35.00.
(3) External Inspection [.0101(13)]
$25.00;
(21 0)lnternal Inspection [.0101(15)]
(A) vessel entry not required - $35.00
$50.00;
(B) vessel entry required - $100.00.
ft) if heating—surface—is—less—then
3.000 sq. ft $ 80.00;
fit) if heating surface is 3,000 sq. ft.
or more—$100.00;
(3) Inspections performed outside of
normal working hours shall be
considered special inspections and the
applicable fees shall apply, including
the fee for working outside of normal
working hours.
(c) A fee of fifty dollars ($50.00) sixty dollars
($60.00) per hour, including travel time, plus
expenses including travel, hotel and meals shall be
paid to the North Carolina Department of Labor
for each special inspection [.0101(27)]. The fee
for special in spections performed outside of normal
working hours i s computed at the shop rate.
(d) A fee of one hundred eighty five dollars
($1 85.00) two hundred forty dollars ($240.00) per
one-half day (four hours) or any part of one-half
day or three—hundred—dollars—($300.00) four
hundred dollars ($400.00) for one day (four to
eight hours) or one thousand four hundred dollars
($1 400.00) per week (36 to 4 hours), plus, in
either case, all expenses including travel hotel, and
meals shall be paid to the North Carolina
Department of Labor for each shop inspection
[.0101(26)]. This fee docs not include the regular
fee for inspection when the boiler or pressure
vessel i s installed. Shop inspections performed
outside—e#
—
normal—working—hours
—
shall—be
computed at one and one half times the normal
rate plus expenses .—Normal working hours shall
be between the hours of 6:00 AM and 8 :00 PM,
Monday—through Friday, except—fer—state
recognized holidays .
(e) A fee of two hundred dollars ($200.00) two
hundred eighty dollars ($280.00) per one-half day
(four hours) or any part of one-half day or three
hundred fifty dollars ($350.00) four hundred sixty
dollars ($460.00) for one day (four to eight hours)
or one thousand six hundred dollars ($1,600) per
week (36 to 4 hours) , plus, in either case, all
expenses including travel hotel, and meals shall be
paid to the North Carolina Department of Labor
for each nuclear inspection. This fee docs not
include the regular fee for inspection when the
boiler or pressure vessel is installed. Nuclear
in spections performed outside of normal working
hours shall be computed at one and one half times
the normal rate plus expenses.—Normal working
hours shall be between the hours of 6:00 AM and
8 :00 PM, Monday through Friday, except for state
recognized holidays.
(f) A foe of four hundred dollars ($400.00) per
day (up to eight hours) plus all expenses, including
travel, hotel and meals shall be paid to the North
Carolina Department of Labor for each—audit-
Audits performed outside of normal working hours
s hall be computed at seventy five dollars ($75.00)
per hour. Normal working hours s hall be between
the hours of 6:00 AM and 8:00 PM, Monday
through—Friday,—except—fef—state
—
recognized
holidays . Audits include activities other than those
identified as inspections, including:
W- reviews—and surveys- for ASME and
National Board stamp
renewal, and
audi
issuance and
f2-) audits pursuant to evaluation for the
issuance of North Carolina Special s . A
fee of three hundred twenty dollars
($320.00) per one-half day (four hours)
1086 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
or any part of one-half day or five
hundred thirty dollars ($530.00) for one
day (four to eight hours), plus, in either
case, all expenses including travel
hotel, and meals shall be paid to the
North Carolina Department of Labor
for audits.
(g) Fees for inspections and audits performed by
the Director, his designee, or a deputy inspector
outside of normal working hours or in excess of
eight hours per inspection visit shall include an
additional thirty dollar ($30.00) fee per hour in
addition to the normal inspection or audit fee.
(h) Fees shall be negotiable for annual contracts
for shop inspections whereby the organization
requesting inspection services requires the use of
the inspector on a full time basis (thirty six to
forty hours per week for a period of fifty two
weeks). Payment of the fees shall be made in
monthly installments.
(i) Printed information derived from the
database for boilers and pressure vessels
maintained by the Division is available for public
scrutiny. Charges for providing this service shall
be payable upon receipt of invoice to the North
Carolina Department of Labor. Charges for this
service are as follows:
.0301 INSPECTION DOCUMENTATION
(a)
Upon receipt of the inspection report and
fee, the director shall determine whether or not a
boiler or pressure—vessel—complies—with—GrSr
Chapter 95, Article 7A, and these Rules.
fb)
If the director determines that the boiler or
pressure vessel is in compliance with Chapter 95,
Article 7A, and these Rules, he shall immediately
issue an inspection certificate authorizing use of
the boiler or pressure vessel.
{e)—If the director determines that the boiler or
pressure vessel i s not in compliance with G.S.
Chapter 95, Article 7A, or these Rules, but can be
repaired or altered so as to comply with G.S.
Chapter 95, Article 7A, and these Rules, he shall
so notify the owner or user by letter within 10
working—days—and—
s
pecify—what—repairs
—
of
alteration s are required.
fd)
The owner or user shall return the letter to
the director within 15 days of its receipt:
{4-) certifying that the required repairs or
alterations have been completed; or
{2} explaining any—delay and requesting
additional time to complete the repairs
or alterations; or
(3) certifying that use of the boiler or
pressure vessel has been di scontinued.
The director may grant a grace period of up to 60
days from the certificate expiration date.
{e)
Upon completion of the required repairs or
alterations, the director shall issue an inspection
(1) Requests for database information for
which the Division has created the
information selection criteria and
printout format for its own use, and
which can be furnished without the certificate for the boiler or pressure vessel.
need for special programming will be
furnished for a charge of twenty dollars
($20.00) plus twenty-five cents ($0.25)
Egl Page-
(2) Requests for database information
which requires special selection criteria
or printout format, and which requires
the need for special programming
services to derive the requested
information or format, will be furnished
for a charge of seventy-five dollars
($75.00) plus twenty-five cents ($0.25)
per page.
(j) Copies of inspection reports or other
inspection records may be provided upon written
request. Copies of these records are available for
a charge of fifteen dollars ($15.00) per request and
twenty-five cents ($0.25) per page.
Statutory Authority G.S. 95-69.11.
SECTION .0300 - ENFORCEMENT
OF STANDARDS
(f)
—
If the director determines that the boiler or
pressure vessel is not in compliance with G.S.
Chapter 95, Article 7A, or these Rules and cannot
be repaired or altered so as to comply with G.S.
Chapter 95, Article 7A, and these Rules, he shall
so notify the owner or user by letter, within 10
working days, that the boiler or pressure vessel is
condemned and that its operation i s thereafter
unauthorized.
fg)
—
Upon receipt of the letter notifying the
owner or user that repairs or alteration s arc
required, or that the boiler or pressure vessel is
condemned, the owner or user shall have 30 days
in which to appeal that determination to the
commis sioner.
{¥)
—
The deci sion of the director shall not be
stayed pending review by the commissioner.
(t)
Upon appeal, a hearing s hall be conducted
pursuant to Article 3 of G.S. Chapter 150B.
^j) The deci sion of the commissioner shall
constitute a final agency decision subject to judicial
review pursuant to Article 4 of G.S.—Chapter
+50B,
9:14 NORTH CAROLINA REGISTER October 14, 1994 1087
PROPOSED RULES
(a) The inspector shall document the results of
the inspection on an inspection report.
(b) If the inspector finds that the boiler or
pressure vessel is in compliance with these Rules,
he shall indicate on the inspection report that the
boiler or pressure vessel is satisfactory.
(c) If the inspector finds the boiler or pressure
vessel is not in compliance with these Rules, he
shall specify in detail on the inspection report the
deficiencies and the required repairs or corrective
action.
(d) The inspector shall determine if the
deficiency is such that operation of the boiler or
pressure vessel creates a condition of imminent
danger. If a condition of imminent danger exists,
the inspector shall state on the inspection report
that operation of the boiler or pressure vessel
should cease immediately until completion of the
necessary repairs or corrective action. The
inspector shall immediately notify the Director of
any condition of imminent danger.
(e) If the condition of the boiler or pressure
vessel is such that repairs or corrective action can
not bring the boiler or pressure vessel into
compliance, he shall indicate on the inspection
report that the boiler or pressure vessel should be
condemned from further use.
(f) For inspections revealing deficiencies, the
inspector shall request the owner/user to sign the
inspection report acknowledging receipt of a copy
and confirming that the inspector explained the
necessary repairs or corrective action.
(g) The inspector shall leave a copy of the
inspection report with the owner/user, and submit
the original to the Director.
(h) The inspector or the Division, at the
Director's discretion, shall issue an invoice to the
owner or user for the inspections made and for
issuance of the inspection certificate. The owner
or user shall remit payment as indicated on the
invoice within 15 days to the North Carolina
Department of Labor.
Statutory Authority G.S. 95-69.11; 95-69.16.
.0302 CERTIFICATE ISSUANCE
fa) If, during the period for which a valid
inspection—ccrtificato—is
—
h*—effect,—the director
determines that a boiler or pressure vessel:
fB docs not comply with G.S. Chapter 95,
Article 7A, or these Rule;
{3) constitutes a menace to public safety in
its present condition, or will constitute
a menace to public safety if not altered
or repaired; and
(3) can be repaired or altered to comply
with G.S. Chapter 95, Article 7A and
these Rules ;—then the director shall
notify the owner or user by letter;
(A)—
s
pecifying what repairs or alterations
arc required;
{B)
—
that continued operation of the boiler
of—pressure—vessel—constitutes—
a
menace to public safety; and
{€-)
that, to avoid injury to persons and
property, the owner or user should
immediately discontinue the use of the
boiler or pressure vessel, with the
understanding—that—the
—
inspection
certificate will be suspended until the
specified repairs or alterations have
been completed, thereby voluntarily
waiving—any
—
rights—to
—
operate—the
boiler—ef
—
pressure—ves sel—granted
under Article 7A, Chapter 95 of the
General Statutes.
{b)
The owner or user shall return the letter to
the director within 15 days of its receipt:
{+) certifying that the boiler or pressure
vessel—has
—
been—repaired—altered—m
compliance with the director's
specifications ;
{3) indicating his intention to comply with
the standards of safety for boilers and
pressure ves sels, with the understanding
that the inspection certificate will be
suspended until the boiler or pressure
vessel has been repaired or altered in
compliance with the director's
specifications ; thereby voluntarily
waiving any rights to operate the boiler
or pressure vessel granted under Article
7A, Chapter 95 of General Statutes; or
(3) indicating hi s intention to continue the
operation—of the—boiler—©f
—
pressure
vessel and recognizing that the director
has
—
declared—the boiler—er—pressure
vessel a public menace and that the
director has advised that the operation
of the boiler or pressure vessel should
be immediately suspended in order to
avoid injury to persons and property.
{e)
—
Where the owner or user acts pursuant to
(b)(2) of thi s Rule, the director shall cause the
inspection certificate to—be suspended,—thereby
suspending operation of the boiler or pressure
vessel, until the specified repairs or alterations arc
completed.
{&)—Where the owner or user acts pursuant to
(b)(3)—of this—Rule,—ef
—
fmte—te
—
return—letter
1088 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
declaring the boiler or pressure vessel a menace to
public safety within—15 days of its receipt, the
director, or hio designee, shall post, in the manner
prescribed by (c) of thi s Rule, a notice as follows
:
The Director of the Boiler and Pressure
Vessel Division of the North Carolina
Department of Labor has declared the
(boiler/pressure vessel) e« these
premises,—bearing the serial—number
N€ , to be a MENACE
TO PUBLIC SAFETY, in that its
continued operation poses subs tantial
risk of injury to persons and property.
The director has advised the owner or
U3er of this (boiler/pressure vessel) of
repairs or alterations that must be made
fef—th+s
—
(boiler/pressure—vessel)—te
comply with the standards of safety
established by—the Commissioner of
Labor.
The owner or user, pursuant to G.S.
96 69.17, has acted to continue the
operation—ef-
—
(boiler/pressure—vessel)
without these—repairs
—
or alterations,
pending a hearing to determine if the
inspection certificate fef tfrts
(boiler/pressure vessel) w+H be
suspended,
(c) The notice described in (d) of this Rule shall
be posted by the director:
{+) in a prominent place on the boiler or
pressure—vessel—needing—repairs—ef
alterations;
m- -Ht- -a prominent place -+R- -the
establishment—where—th«
—
boiler—ef
pressure vessel is being used so that it
may be easily read by members of the
public and employees.
(f)
—
Where the owner or user acts pursuant to
(b)(3) of thi s Rule, or fails to return the letter
declaring the boiler or pressure vessel to be a
menace to public safety within—15 days of its
receipt, the director shall, in addition to, and along
with, action taken under (d) of thi s Rule:
£4-) afford the -an
—
aggrieved—party
opportunity fof a hearing, m
accordance with G.S. Chapter 150B, to
determine if the inspection certificate
will be suspended as of the date of the
hearing;
{S) obtain injunctive relief, on behalf of the
commissioner, pursuant te GrSr
95 69.11(6); or
ify initiate proceedings under both (f)(1)
and (f)(2) of this Rule.
fg4
—
The owner or user shall notify the director
by letter, within 15 days after he receives notice
pursuant to (f)(1) of this Rule, requesting a hearing
te
—
determine—if the inspection certificate—witt
suspended as of the date of the hearing.
{&)
If the owner or user fails to notify the
director by letter, within 15 days after he receives
notice pursuant to (f)(1) of this Rule, the director
shall immediately suspend the inspection
certificate.
(a) The Director or his designee shall review the
inspection report and if he finds the boiler or
pressure vessel to be in compliance with these
Rules, issue an inspection certificate to the
owner/user, pending receipt of payment.
(b) The owner shall post the inspection
certificate in a prominent place visible to the
operator while reading the pressure. The
certificate shall be placed under glass, or otherwise
protected from the environment.
Statutory Authority G.S. 95-69.11.
,0303 INSPECTIONS REVEALING
DEFICIENCIES
fa)
—
If, during the period for which a valid
inspection
mng-ccrtificatc
4s
—
in effect,—the-a-director
determines that a boiler or pressure ves sel:
{¥) docs not comply with G.S. Chapter 95,
Article 7A, or these Rules;
(3) constitutes a menace to public safety;
ano
m- cannot be repaired or altered to cojrmply
with G.S. Chapter 95, Article 7A, and
these Rules.—Then, the director shall
notify the owner or user by letter that
continued operation of the boiler or
pressure vessel constitutes a menace to
public safety and that, to avoid injury
to persons and property, the owner or
user should immediately discontinue the
use the boiler or pressure vessel, with
the understanding that the inspection
certificate—wtH—be
—
revoked—and—the
boiler—ef
—
pressure—vessel—w+H—be
condemned, thereby voluntarily waiving
any
—
rights—to operate the boiler or
pressure vessel granted under Article
7A, Chapter 95 of General Statutes.
fb)
The owner or user shall return the letter to
the director within 15 days of its receipt:
ft) indicating his intention to comply with
the standards of safety for boilers and
pressure vessels, with the understanding
that the inspection certificate will be
9:14 NORTH CAROLINA REGISTER October 14, 1994 1089
PROPOSED RULES
revoked—and—the
—
boiler—er—pressure
vessel—w+H—be
—
condemned;—thereby
voluntarily—waiving—ftfly
—
rights—te
operate the boiler or pres sure vessel
granted under Article 7A, Chapter 95
of the General Statutes; or
(3) indicating his intention to continue the
operation—of the—boiler—or pressure
ve s sel and recognizing that the director
has declared—the boiler or pressure
vessel a public menace and that the
director has advised that the operation
of the boiler or pressure vessel should
be immediately discontinued in order to
avoid injury to persons and property.
fe)
Where the owner or user act s pursuant to
(b)(1) of this Rule, the director shall cause the
boiler or pressure vessel to be condemned and the
inspection certificate revoked.
fd}
Where the owner or user acts pursuant to
(b)(2) of this Rule, or fails to return the letter
declaring the boiler or pressure vessel a menace to
public safety within 15 days of its receipt, the
director, or his designee, shall post, in the manner
prescribed by (e) of this Rule, a notice as follows:
The Director of the Boiler and Pressure
Vessel Division of the North Carolina
Department of Labor has declared the
(boiler/pressure vessel) en these
premi ses,—bearing the serial—number
N€- to be a MENACE
TO PUBLIC SAFETY, -m—-that- tfrat—its
continued operation po ses a s ubs tantial
risk of injury to persons and property.
The director has advi sed the owner or
user of this (boiler/pressure vessel) that
thi s (boiler/pressure vessel) cannot be
repaired or altered so as to comply with
the standards of safety established by
the Commissioner of Labor.
The owner or user, pursuant to G.S.
95 69.17, has elected to continue the
operation—ef-—this (boiler/pressure
vess el), pending a hearing to determine
if the—inspection—certificate—fef—this
(boiler/press ure vessel) will be revoked
and the (boiler/pressure vessel)
condemned.
te)
—
The notice described in (d) of thi s Rule,
shall be posted by the director:
<4-) in a prominent place on the boiler or
pressure vessel; and
f2-) a prominent place in the establishment
where the boiler or pressure vessel is
being u sed so that it may be easily read
by members of the public and employees.
(f)
—
Where the owner or user acts pursuant to
(b)(2) of this Rule, or fails to return the letter
declaring the boiler or pressure vessel to be a
menace to public safety within—15 days of its
receipt, the director shall, in addition to and along
with action taken under (d) of thi s Rule:
w- afford -ftft —the aggrieved—party
opportunity fef a hearing, m
accordance with G.S. Chapter 150B, to
determine if the inspection certificate
wiH—be
—
revoked—and
—
the—boiler—&r
pressure vessel condemned as of the
date of the hearing;
(3j obtain injunctive relief, on behalf of the
commissioner, pursuant te GrSr
Chapter 95 69.11(6); or
m-
1) case the
initiate proceedings under both (f)(1)
and (f)(2) of this Rule.
(g) The owner or user shall notify the director
by letter, within 15 days after he receives notice
pursuant to (f)(1) of this Rule, requesting a hearing
to determine if the inspection certificate will be
revoked—and
—
the—boiler—ef
—
pressure—vessel
condemned as the date the hearing.
{h)
—
If the owner or user fails to notify the
director by letter, within 15 days after he receives
notice pursuant to (f)(1) thi s Rule, the director
shall immediately revoke the inspection certificate
and condemn the boiler or pressure vessel.
(a) The owner or user shall complete any
required repairs or corrective action and request an
additional inspection within 30 days of the
inspection, except in cases where the boiler or
pressure vessel is removed from service, in which
owner or user shall send in written
confirmation, signed by the owner or user, that use
of the boiler or pressure vessel has been
discontinued and that the boiler or pressure vessel
has been removed from the source of energy.
(b) Upon notification by the inspector of a boiler
or pressure vessel for which continued operation
creates a condition of imminent danger, the
Director shall determine if the recommendations of
the inspector are valid, and if sOj he shall
immediately notify the owner or user by the most
expedient means possible, followed by written
notification within 15 days stating that the use of
the boiler or pressure vessel shall be discontinued
immediately.
(c) The owner or user may continue operation of
the boiler or pressure vessel, including those
boilers or pressure vessels which are condemned,
during the 30 day period, except that this provision
shall not apply to boilers and pressure vessels after
1090 9:14 NORTH CAROLINA REGISTER October 14, 1994
PROPOSED RULES
verbal notification by the Director to the owner or
user that a condition of imminent danger exists.
(d) After completion of any required repairs or
corrective action, the boiler or pressure vessel
shall be reinspected to the extent necessary to
verify satisfactory completion of the required
repairs or corrective action. For reinspections
performed by deputy inspectors, an external
inspection fee shall apply.
Statutory Aut