и
UNC
SCHOOL OF GOVERNMENT
The Daily Bulletin: 2018-06-11
PUBLIC/HOUSE BILLS
H 382 (20 1 7-2018) DOl OMN1BUS-AB (NEW). Filed Mar 1 5 201 7, AN ACT TO INCORPORATE NAIC MODEL LANGUAGE INTO
NORTH CAROLINA 'S LIFE AND HEALTH INSURANCE GUARANTY ASSOCIA TION ACT; TO AMEND AND MAKE CLARIFYING
CHANGES TO THE SURPLUS LINES ACT; TO AMEND CONSENT TO RATE AND CAPTIVE INSURANCE LAWS; AND TO ML END
AND MAKE TECHNICAL CHANGES TO OTHER INSURANCE LAWS. AS RECOMMENDED BY THE DEPARTMENT OF
INSURANCE.
Senate committee substitute makes the following changes to the 2nl1 edition.
Changes the act’s long and short titles. Modifies and adds to the previous provisions.
Parti
Amends GS 58-62-6. providing that the purpose of the North Carolina Life Insurance Guaranty Association Act (Article 62) is
to protect covered persons against failure in the performance of contractual obligations under specified life, health, and annuity
policies, plans, or contracts due to delinquency of the member insurer that issued the policies, plans, or contracts. Specifies that
the North Carolina Life and Health Insurance Guaranty Association (Association) created by the Article is an association of
member insurers, as defined by GS 58-62-16, amended below.
Modifies and adds to the defined terms applicable to the Article set forth in GS 58-62-16. Modifies the term member insurer to
now include health maintenance organizations governed by Article 67 (Health Maintenance Organization Act) that are licensed
to transact any health maintenance organization business in the state for which coverage is provided under GS 58-62-21.
including any health maintenance organization whose license has been suspended, revoked, not renewed, or voluntarily
withdrawn. Modifies the term covered policy to covered contract or covered policy, and defines the term to mean any policy,
contract, or portion of a policy or contract for which coverage is provided under GS 58-62-21, as amended below. Modifies the
term person to include an individual, corporation, limited liability company, partnership, association, governmental body or
entity, or voluntary organization. Modifies the term premium to exclude premiums in excess of $5 million for certain
retirement and life insurance policies, as specified. Additionally, modifies the following existing terms: contractual obligation ,
health insurance, and resident. Makes conforming changes throughout the Article to reflect and incorporate the modifications
to existing terms. Adds the following terms: authorized assessment, benefit plan, called assessment, extra-contractual claims,
health benefit plan, owner, plan sponsor, principal place of business, receivership court, state, subaccount, and supplemental
contract. Eliminates the term policy.
Amends GS 58-62-2 1(a), specifying persons covered under the Article for the policies and contracts specified in subsection (b)
of the statute. Modifies the existing provisions of subsection (a) to include: (1) nonresidents who are otherwise ineligible for
coverage in any other state because the member insurer was not licensed in the state at the time specified in that state’s
guaranty association law; (2) the beneficiaries, assignees, or payees of the persons covered under subdivision (a)(2) of health
care providers rendering sendees covered under health insurance policies or certificates; and (3) persons who are owners of
unallocated annuity contracts that are issued to or in connection with a specific benefit plan as specified.
Adds new subsection (al) to GS 58-62-21. prohibiting coverage under the Article for: (1) any payee or beneficiary afforded
any coverage by the association in another state, (2) any owner of qualified unallocated annuity contracts under the Article
provided coverage by the association of another state, and (3) any person who acquires rights to receive payments through a
structured settlement factoring transaction. Adds new subsection (a2), explicitly excluding from coverage persons who are
provided coverage under the laws of any other state. Directs the Article be construed in conjunction with other state laws to
provide coverage to an eligible owner, payee, enrollee, beneficiary, or assignee by only one association.
Modifies and adds to the exclusions from coverage set out in subsection (c). Specifies that the exclusion set out in subdivision
(c)(2) for any policy or contract of reinsurance applies unless assumption of certificates have been issued pursuant to the
