HB 382 — DOI Omnibus.-AB

GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2017 H 21 HOUSE BILL 382* Committee Substitute Favorable 4/11/17 Short Title:

Representatives Setzer, Bumgardner, Henson, and Destin Hall (Primary Sponsors).

For a complete list of sponsors, refer to the North Carolina General Assembly web site.

Insurance March 16, 2017 A BILL TO BE ENTITLED AN ACT TO MAKE TECHNICAL AND OTHER CHANGES TO THE INSURANCE LAWS OF NORTH CAROLINA, AS RECOMMENDED BY THE DEPARTMENT OF INSURANCE.

7 REVISE LOAN TO VALUE REQUIREMENTS FOR INSURER MORTGAGE INVESTMENTS SECTION 1.1.(a) G.S.

G.S.

or (3) The percentage-of-value limit on the amount of the loan applicable under subdivision (1) of this subsection, plus the amount by which the excess of the loan over the percentage-of-value limit is insured or guaranteed by the United States or by any agency or instrumentality thereof." CAPTIVESECTION INSURANCE1.(b) CLARIFYINGThis CHANGESsection SECTIONbecomes 2.(a)effective G.S.January 1, 2018.

CAPTIVE INSURANCE TECHNICAL CHANGES SECTION 2.(a) G.S.

*H382-v-1* General Assembly Of North Carolina Session 2017 In addition to the processing of the application, an organizational investigation or audit may be performed before an applicant business entity is licensed.

Such investigation or audit shall consist of a general survey review of the applicant business entity's corporate records, including *H382-v-2* General Assembly Of North Carolina Session 2017 charters, bylaws, and minute books;

The change shall be deemed approved unless it is disapproved within 30 days from the completion of the Commissioner's review of the biographical affidavit." AMEND INSURANCE HOLDING COMPANY SYSTEMAFFILIATES REGULATORY ACT SECTION 3.

provided that after such investment the insurer's policyholders' surplus will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs." SURPLUS LINES ACT CLARIFYING AND TECHNICAL CHANGES SECTION 4.(a) G.S.

(a) A surplus lines The North Carolina Surplus Lines AssociationAssocation (NCSLA) shall serve as the regulatory support organization of surplus lines licensees shall be formed to and shall carry out the following functions:

Page 2 House Bill 382*-First Edition General Assembly Of North Carolina Session 2017 (2) Communicate with organizations of admitted insurers with respect to the proper use of the surplus lines market.

(3) Receive and disseminate to surplus lines licensees information about surplus lines insurance, including, without limitation, new electronic filing Page 2 House Bill 382*-Second Edition General Assembly Of North Carolina Session 2017 procedures approved by the Commissioner, changes in the list of eligible surplus lines insurers, and modifications in coverages, procedures, and requirements as may be requested by the Commissioner.

Each surplus lines licensee shall keep in his or her office in this State a full and true record of each surplus lines insurance contract placed by or through the licensee, including a copy of House Bill 382*-First Edition Page 3 General Assembly Of North Carolina Session 2017 the policy, certificate, cover note, or other evidence of insurance.

House Bill 382*-Second Edition Page 3 General Assembly Of North Carolina Session 2017 (3) Gross premium charged;

"(a)"§ Gross58-21-85. premiums charged, less any return premiums, for surplus lines insurance on insureds for whom North Carolina is the home state are subject to a premium receipts tax of five percent (5%), which shall be collected in a manner approved by the Commissioner, in addition to the full amount of the gross premium charged by the insurer for the insurance.

Surplus lines tax.

(a) Gross premiums charged, less any return premiums, for surplus lines insurance on insureds for whom North Carolina is the home state are subject to a premium receipts tax of five percent (5%), which shall be collected in a manner approved by the Commissioner, in addition to the full amount of the gross premium charged by the insurer for the insurance.

To the extent that other states in which portions of the properties, risks, or exposures reside have failed to enter into a compact or reciprocal allocation procedure with this State, the premium tax collected shall be retained by this State." CREDIT INSURANCE PRODUCERREGULATORY NOTICEAMENDMENTS REQUIREMENT CONFORMING CHANGE SECTION 5.5.(a) G.S.

58-57-90(a) reads as rewritten:

"(a) As used in this Article, the term "single interest credit property" insurance means insurance of the personal household property of the debtor against loss, with the creditor as sole beneficiary;

and the term "dual credit property" insurance means insurance of personal household property of the debtor, with the creditor as primary beneficiary and the debtor as beneficiary of proceeds not paid to the creditor.

For the purpose of this Article, "personal household property" means household furniture, furnishings and appliances designed for household use and other property of the debtor, exclusive of an automobile, not used by the debtor in a business trade or profession." SECTION 5.(b) G.S.

58-57-110(a) reads as rewritten:

"(a) Each year Beginning September 1, 2018, and every third year thereafter, the Commissioner shall prescribe a minimum incurred loss ratio standard requirement to develop a premium rate reasonable in relation to the benefits provided by credit unemployment insurance coverage.

This requirement shall be effective on January 1 of the year following the year the Commissioner prescribes it and shall remain in effect until the next minimum incurred loss ratio standard requirement prescribed by the Commissioner takes effect.

The following requirements must be met:

...." STATE MANUFACTURED HOUSING BOARD CONFORMING CHANGE SECTION 6.

58-33-56(d) reads as rewritten:

"(d) Within 15 days after making the notification required by subsections (a), (b), and (c) of this section, the insurer shall mail a copy of the notification to the producer at the producer's last known address.

notify the producer using a form prescribed by the Commissioner.

If the producer is terminated for cause for any of the reasons listed in G.S.

58-33-46(a), the insurer shall provide a copy of the notification to the producer at the producer's last known address by certified mail, return receipt requested, postage prepaid, or by overnight delivery using a nationally recognized carrier." AMEND CONTINUING EDUCATION FOR BAIL BONDSMEN AND RUNNERS SECTION 6.

G.S.

58-71-71(b) reads as rewritten:

"(b) Each year by June 30 every licensee shall complete at least three hours of continuing education as provided by an approved provider in subjects related to the duties and responsibilities of a runner or bail bondsman before renewal of the license.

bondsman.

This continuing education shall not include a written or oral examination.