UNC
SCHOOL OF GOVERNMENT
The Daily Bulletin: 2016-06-20
PUBLIC/HOUSE BILLS
H 287 (2015-2016) AMEND INSURANCE LAWS.-AB Filed Mar 18 2015, AN ACT TO ENHANCE AND IMPROVE CONSUMER
PROTECTIONS AND TRANSPARENCY RELATED TO MOTOR VEHICLE MAINTENANCE AND REPAIRS. LONG-TERM CARE
INSURANCE, AND CONSENT TO RATE; TO STUDY VOLUNTEER FIREFIGHTER RECRUITMENT AND RETENTION EFFORTS;
TO INCREASE THE CRIMINAL PENALTY FOR LARGE-SCALE FRAUD COMMITTED BY AN INSURANCE FIDUCIARY AND
STRENGTHEN COMMERCIAL AUTO RATE EVASION REFORM; TO MAKE VARIOUS TECHNICAL AND POLICY CHANGES TO
NORTH CAROLINA 'S CAPTIVE INSURANCE LAW PRO VISIONS; TO ENABLE THE ESTABLISHMENT OF A STATE-BASED PRIVATE
FLOOD INSURANCE MARKET; TO ENABLE INSURERS TO RECEIVE RESTITUTION FROM CONVICTED DEFENDANTS; TO
EXEMPT CERTAIN ACCOUNTABLE CARE ORGANIZATIONS FROM DEPARTMENT REGULATION; AND TO MAKE OTHER
AMENDMENTS TO INSURANCE LAWS, AS RECOMMENDED BY THE DEPARTMENT.
Senate committee substitute makes the following changes to the 3rd edition.
Changes the long title.
Deletes and replaces all of the provisions of the previous edition, except the following proposed statutory revision.
Moves the proposed revisions to GS 58-50-40(c) from previous Section 5 to Section 3. 1 of the act. which makes an insurance
fiduciary who violates his or her fiduciary duty and causes the cancellation or non-renewal of a group health or group life
insurance plan guilty of a Class F felony if the total value of the losses suffered is SI 00.000 or more, or a Class H felony if the
losses suffered is less than $100,000.
The remainder of the act now provides the following.
Part 1.
Current GS 58-36-75(a) provides that the subclassification plan promulgated pursuant to GS 58-36-65(b), which requires the
Bureau to create a Safe Driver Incentive Plan to distinguish among classes of drivers and their driving records, may provide for
separate surcharges for major, intermediate, and minor at-fault accidents. Increases the property damage amounts that constitute
each subclassification as defined by subsection (a). Effective October 1. 2017. and applies to accidents that occur on or after that
date.
Amends GS 58-51-95. concerning approval by the Commissioner of Insurance (Commissioner) of forms, classification, and
rates, by adding new subsection (fl ) to establish that, for long-term care policy forms, the maximum rate increase that may be
implemented in any calendar year for any policyholder is an increase of 1 5% of the current policy premium rale in effect prior to
tire increase.
Amends GS 58-36-30, concerning deviations from the rates, rate plans, classifications, schedules, rules, and standards made by
tire North Carolina Rate Bureau (Rate Bureau), by adding a new subsection (b 1 ). Provides that, for insurance against loss to
residential real property with no more than four housing units, a rate in excess of that promulgated by tire Rate Bureau may be
charged by an insurer on any specific risk if the higher rate is charged in accordance with rules adopted by the Commissioner and
is charged with tire knowledge and written consent of the insured. Requires the insurer to disclose and give reasonable notice of
tire rate information to the insured by including language, as specified, on the insured's written consent to rate form in at least 14-
point type, bolded and underlined.
Requires the disclosure statement to be included on any renewal of or endorsement to the policy for any subsequent increase
above the manual rate following the initial written consent of an insured. Establishes that once an initial written consent to rate is
received, the insurer is not required to obtain the written consent of the insured on any renewal of or endorsement to the policy.
Requires the insurer to give at least 30 days' notice to the insured for all written consents to rate and notices required under
subsection (b 1 ) on all policy renewals and endorsements. Requires the insurer to retain the singed consent form and other policy
