HB 219 — NAIC Accreditation Amendments.-AB
Last action — Signed by Gov. 6/26/2019
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✓Introduced
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✓In Committee
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✓Passed House
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✓Passed Senate
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✓To Executive
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6Enacted
This bill has been enacted into law. Introduced February 27, 2019. Enacted.
Prognosis
Where this bill stands today.
Odds of enactment
HighHow often bills like it became law.
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Enacted
Current position in the legislative process.
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4 sponsors
2 primary, 2 co-sponsors signed on.
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Single-party support
Sponsorship is currently within one party (2 R).
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Cleared a recorded vote
Passed 2 recorded votes so far.
Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.
Bill Text
What changed in the latest version
621 added · 624 removedPlain-language change summary
The changes made to House Bill 219 include updating the bill's title and reference from an earlier draft. While the content seems to largely remain the same, these revisions help clarify the bill's identity and ensure it's aligned with formal legislative procedures. This matters because precise titles and references improve the bill's tracking and understanding throughout the legislative process.
GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2019 H 21 HOUSE BILL 219* Committee Substitute Favorable 4/11/19 Short Title:
Representatives Setzer, Bumgardner, and Corbin (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
FebruaryInsurance, 28,if 2019favorable, ARules, BILLCalendar, TOand BEOperations ENTITLEDof the House February 28, 2019 AN ACT TO REVISE VARIOUS INSURANCE LAWS IN ORDER TO MAINTAIN NAIC ACCREDITATION, AS RECOMMENDED BY THE DEPARTMENT OF INSURANCE.
6 PART I.
*H219-v-2* General Assembly Of North Carolina Session 2019 (1) It does not have substantial insurance operations in the United States.
*H219-v-1* General Assembly Of North Carolina Session 2019 (2) It has substantial insurance operations in the United States, but not in this State.
Page 2 House Bill 219*-Second Edition General Assembly Of North Carolina Session 2019 (2) This State being the place of domicile of the top-tiered insurers in the insurance holding company system of the internationally active insurance group.
Page 2 House Bill 219*-First Edition General Assembly Of North Carolina Session 2019 (d) PursuanttoG.S.
(5) EnterRequest documents or enter into agreements withproviding the basis for or obtainotherwise documentationclarifying fromthe anyCommissioner's insurerrole as group-wide supervisor with anyinsurer registered under G.S.
58-19-25, anyanymember member of the internationally active insurance group, and any other state, federal, and international regulatory agencies forwith jurisdiction over members of the internationally active insurance group,group. providing the basis for or otherwise clarifying the Commissioner's role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials.
SuchThese agreements ordocumentationshallnotmay serveasinclude evidenceinprovisions anyfor proceedingresolving thatdisputes anywith insurerother orregulatory personofficials. within an insurance holding company system not domiciled or incorporated in this State is doing business in this State or is otherwise subject to jurisdiction in this State.
HouseThese Billagreements 219*-Secondor Editiondocumentation Pageshall 3not Generalserve Assemblyas Ofevidence Northin Carolinaany Sessionproceeding 2019that (6)insurers Otheror group-wideother supervisionpersons activities,within consistentan withinsurance theholding authoritiescompany andsystem, purposesnot enumerateddomiciled above,or asincorporated consideredin necessarythis byState, theare Commissioner.doing business in this State or are otherwise subject to jurisdiction in this State.
(f)(6) IfOther the Commissioner acknowledges that another regulatoryofficial from a jurisdiction that is not accredited by the NAIC is the group-wide supervisor,supervision theactivities, Commissionerconsistent is authorized to reasonablycooperate, through supervisorycolleges or otherwise, with group-widethe supervisionauthorities undertakenand bythepurposes group-wideenumerated supervisor,above, providedas thatconsidered bothnecessary ofby the followingCommissioner. conditions are met:
House Bill 219*-First Edition Page 3 General Assembly Of North Carolina Session 2019 (f) If the Commissioner acknowledges that another regulatoryofficial from a jurisdiction that is not accredited by the NAIC is the group-wide supervisor, the Commissioner is authorized to reasonablycooperate, through supervisorycolleges or otherwise, with group-wide supervision undertaken bythe group-wide supervisor, provided that both of the following conditions are met:
(i) A registered insurer subject to this section shall be liable for and shall pay the reasonable expenses of the Commissioner's participation in the administration of this section, including the engagement of attorneys, actuaries, and any other professionals and reasonable travel expenses." SECTION 1.(d) G.S.
If an audit Page 4 House Bill 219*-Second Edition General Assembly Of North Carolina Session 2019 committee is not designated by the insurer, the insurer's entire board of directors shall constitute the audit committee." SECTION 2.(b) G.S.
Page 4 House Bill 219*-First Edition General Assembly Of North Carolina Session 2019 "(6a) "Internal audit function" means a person or persons that provide independent, objective, and reasonable assurance designed to add value and improve an organization's operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes." SECTION 2.(c) G.S.
58-10-246 that no longer meets the threshold for exemption House Bill 219*-Second Edition Page 5 General Assembly Of North Carolina Session 2019 shall have one calendar year after the year the threshold is exceeded to comply with the requirements of that section." 4 PART III.
CORPORATE GOVERNANCE ANNUAL DISCLOSURE House Bill 219*-First Edition Page 5 General Assembly Of North Carolina Session 2019 SECTION 3.(a) Article 10 of Chapter 58 of the General Statues is amended by adding a new Part to read:
(3) Provide for the confidential treatment of the corporate governance annual disclosure and related information that will contain confidential and sensitive information related to an insurer or insurance group's internal operations and proprietary and trade-secrettrade secret information which, if made public, could potentially cause the insurer or insurance group competitive harm or disadvantage.
(c) The requirements of this Part shall apply to all insurers domiciled in this State.state.
Notwithstanding any request from the Commissioner Page 6 House Bill 219*-Second Edition General Assembly Of North Carolina Session 2019 made pursuant to subsection (c) of this section, if the insurer is a member of an insurance group, the insurer shall submit the report required by this section to the Commissioner of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the NAIC.
In Page 6 House Bill 219*-First Edition General Assembly Of North Carolina Session 2019 these instances, a copy of the CGAD must also be provided, upon request, to the chief regulatory official of any state in which the insurance group has a domestic insurer.
(d) The insurer or insurance group shall have discretion regarding the appropriate format for providing the required information and may customize the CGAD to provide the most relevant information necessary to permit the Commissioner to gain an understanding of the corporate governance structure, policies, and practices utilized bybythe the insurer or insurance group.
(a) The insurer or insurance group shall have discretion over the responses to the CGAD inquiries, provided the CGAD shall contain the material information necessary to permit the Commissioner to gain an understanding of the insurer's or insurance group's corporate House Bill 219*-Second Edition Page 7 General Assembly Of North Carolina Session 2019 governance structure, policies, and practices.
House Bill 219*-First Edition Page 7 General Assembly Of North Carolina Session 2019 (b) Notwithstandingsubsection(a)ofthis section,theCGADshall beprepared consistent with this Part.
(1) Anyprocessesorpractices, suchas suitabilitystandards,to determinewhether officersandkeypersonsincontrolfunctionshavetheappropriatebackground, Page 8 House Bill 219*-Second Edition General Assembly Of North Carolina Session 2019 experience, and integrity to fulfill their prospective roles, including both of the following:
Page 8 House Bill 219*-First Edition General Assembly Of North Carolina Session 2019 b.
The description should allow the Commissioner to understand the frequency at which information on each critical risk area is reported to and reviewed by House Bill 219*-Second Edition Page 9 General Assembly Of North Carolina Session 2019 senior management and the board of directors.
House Bill 219*-First Edition Page 9 General Assembly Of North Carolina Session 2019 d.
58-19-37, and from the NAIC, and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that it is confidential or privileged under the Page 10 House Bill 219*-Second Edition General Assembly Of North Carolina Session 2019 laws of the jurisdiction that is the source of the document, material, or information.
(d) The sharing of information and documents by the Commissioner pursuant to this Part shall not constitute a delegation of regulatory authority or rulerulemaking, making, and the Commissioner is Page 10 House Bill 219*-First Edition General Assembly Of North Carolina Session 2019 solely responsible for the administration, execution, and enforcement of the provisions of this Part.
(e) No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secrettrade secret materials or other CGAD-related information shall occur as a result of disclosure of CGAD-related information or documents to the Commissioner under this section or as a result of sharing as authorized in this Part.
(6) A requirement that the NAIC or a third-party consultant to consent to intervention byan insurer in anyjudicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential House Bill 219*-Second Edition Page 11 General Assembly Of North Carolina Session 2019 information about the insurershared with the NAICora third-partyconsultant pursuant to this Part.
House Bill 219*-First Edition Page 11 General Assembly Of North Carolina Session 2019 (a) Civil Penalties.
– The Commissioner may reduce the penalty if the insurer demonstrates to the Commissioner that the imposition of the penalty would constitute a financial hardship to the insurer."insurer. SECTION 3.(b) If any provision of Section 3 other than G.S.
58-10-780,"§ or58-10-795. the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this section which can be given effect without the invalid provision or application, and to that end the provisions of this section, with the exception of G.S.
Severability clause.
If any provision of this Part other than G.S.
Show all 50 changed lines (10 more)
58-10-780, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this Part which can be given effect without the invalid provision or application, and to that end the provisions of this Part, with the exception of G.S.
SECTION3.(c)"§ Section58-10-800. 3shall become effective onJanuary1, 2020.
TheEffective firstdate. filling of the CGAD shall be made on or before June 1, 2020.
PARTThe IV.requirements of this Part shall become effective on January 1, 2020.
The first filing of the CGAD shall be made on or before June 1, 2020." PART IV.
– An entity entity, including a fraternal benefit society as defined in Article 2424, of this Chapter, which has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, annuity contracts, pure endowment contracts, or deposit-type contracts (i) in this State and has at least one such policy in force or on claim or (ii) in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, annuity contract, pure endowment, or deposit-type contracts in this State." SECTION 5.
The Commissioner shall use the lowest financial strength rating Page 12 House Bill 219*-Second Edition General Assembly Of North Carolina Session 2019 received from an approved rating agency in establishing the maximum rating of a certified reinsurer.
A failure to obtain or Page 12 House Bill 219*-First Edition General Assembly Of North Carolina Session 2019 maintain at least two financial strength ratings from acceptable rating agencies will result in loss of eligibility for certification;
Section 3 of this act becomes effective January 1, 2020.
House Bill 219*-Second219*-First Edition Page 13
Show all 50 changed rows (10 more)
Action History
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Signed by Gov. 6/26/2019
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Ch. SL 2019-57
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Pres. To Gov. 6/24/2019
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Ratified
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Passed 2nd Reading
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Passed 3rd Reading
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Ordered Enrolled
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Withdrawn From Cal
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Placed On Cal For 06/20/2019
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Reptd Fav
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Reptd Fav
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Re-ref Com On Rules and Operations of the Senate
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Withdrawn From Com
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Re-ref to Commerce and Insurance. If fav, re-ref to Rules and Operations of the Senate
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Regular Message Received From House
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Passed 1st Reading
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Ref To Com On Rules and Operations of the Senate
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Regular Message Sent To Senate
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Amend Adopted A1
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Passed 2nd Reading
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Passed 3rd Reading
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Ordered Engrossed
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Reptd Fav
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Cal Pursuant Rule 36(b)
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Placed On Cal For 04/25/2019
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Reptd Fav Com Substitute
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Re-ref Com On Rules, Calendar, and Operations of the House
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Passed 1st Reading
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Ref to the Com on Insurance, if favorable, Rules, Calendar, and Operations of the House
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Filed
Sponsors
- Mitchell S. Setzer · Primary
- Bumgardner · Primary
- Kevin Corbin · Cosponsor
- Lucas · Cosponsor
Sponsorship breakdown
Export CSV (upgrade) →2 sponsors · 2 co-sponsors · 175 not signed on
Sponsors (2)
- Mitchell S. Setzer Republican
- Bumgardner
Co-sponsors (2)
- Kevin Corbin Republican
- Lucas
Not signed on (175)
175 members have not signed on to this bill.
Show all 175 →"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.
Votes
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Democratic | 7 | 0 | 0 | 1 |
| Unaffiliated | 25 | 0 | 0 | 4 |
| Republican | 10 | 0 | 0 | 3 |
| Total | 42 | 0 | 0 | 8 |
| % of votes cast | 84% | 0% | 0% | 16% |
How each member voted (50)
| Member | Party | Vote |
|---|---|---|
| deViere | — | Yea |
| Fitch | — | Yea |
| Foushee | — | Yea |
| Marcus | — | Yea |
| McKissick | — | Yea |
| Nickel | — | Yea |
| Peterson | — | Yea |
| Searcy | — | Yea |
| Woodard | — | Yea |
| Brown | — | Yea |
| J. Davis | — | Yea |
| Edwards | — | Yea |
| Gallimore | — | Yea |
| Gunn | — | Yea |
| Harrington | — | Yea |
| Horner | — | Yea |
| Johnson | — | Yea |
| Krawiec | — | Yea |
| Newton | — | Yea |
| Perry | — | Yea |
| Steinburg | — | Yea |
| Tillman | — | Yea |
| Wells | — | Yea |
| Smith | — | Not Voting |
| VanDuyn | — | Not Voting |
| Ballard | — | Not Voting |
| Bishop | — | Not Voting |
| D. Davis | — | Yea |
| J. Jackson | — | Yea |
| Dan Blue | Democratic | Yea |
| Gladys A. Robinson | Democratic | Yea |
| Jay J. Chaudhuri | Democratic | Yea |
| Joyce Waddell | Democratic | Yea |
| Michael Garrett | Democratic | Yea |
| Mujtaba A. Mohammed | Democratic | Yea |
| Paul A. Lowe, Jr. | Democratic | Yea |
| Tracy Clark | Democratic | Not Voting |
| Bill Rabon | Republican | Yea |
| Brent Jackson | Republican | Yea |
| Carl Ford | Republican | Yea |
| Danny Earl Britt, Jr. | Republican | Not Voting |
| Jim Burgin | Republican | Yea |
| Norman W. Sanderson | Republican | Yea |
| Phil Berger | Republican | Yea |
| Ralph Hise | Republican | Not Voting |
| Tom McInnis | Republican | Yea |
| Vickie Sawyer | Republican | Yea |
| W. Ted Alexander | Republican | Yea |
| W. Ted Alexander | Republican | Not Voting |
| Warren Daniel | Republican | Yea |
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 51 | 0 | 0 | 8 |
| Democratic | 25 | 0 | 0 | 0 |
| Republican | 30 | 0 | 0 | 3 |
| U | 1 | 0 | 0 | 1 |
| Total | 107 | 0 | 0 | 12 |
| % of votes cast | 90% | 0% | 0% | 10% |
How each member voted (119)
| Member | Party | Vote |
|---|---|---|
| Martin | — | Yea |
| Autry | — | Yea |
| Beasley | — | Yea |
| Black | — | Yea |
| Clemmons | — | Yea |
| Farmer-Butterfield | — | Yea |
| Fisher | — | Yea |
| Floyd | — | Yea |
| Gailliard | — | Yea |
| Garrison | — | Yea |
| Gill | — | Yea |
| Graham | — | Yea |
| Harris | — | Yea |
| Holley | — | Yea |
| Insko | — | Yea |
| Lucas | — | Yea |
| Montgomery | — | Yea |
| Queen | — | Yea |
| Richardson | — | Yea |
| Russell | — | Yea |
| Terry | — | Yea |
| vonHaefen | — | Yea |
| Wray | — | Yea |
| Boles | — | Yea |
| Bumgardner | — | Yea |
| Carter | — | Yea |
| Cleveland | — | Yea |
| Conrad | — | Yea |
| Davis | — | Yea |
| Dobson | — | Yea |
| Elmore | — | Yea |
| Faircloth | — | Yea |
| Fraley | — | Yea |
| Grange | — | Yea |
| Hardister | — | Yea |
| Horn | — | Yea |
| Hurley | — | Yea |
| Lewis | — | Yea |
| McElraft | — | Yea |
| McGrady | — | Yea |
| McNeill | — | Yea |
| Murphy | — | Yea |
| Presnell | — | Yea |
| Rogers | — | Yea |
| Saine | — | Yea |
| Sasser | — | Yea |
| Speciale | — | Yea |
| Szoka | — | Yea |
| Jackson | — | Not Voting |
| Moore | — | Not Voting |
| Hunt | — | Not Voting |
| Hunter | — | Not Voting |
| Henson | — | Not Voting |
| L. Johnson | — | Not Voting |
| Yarborough | — | Not Voting |
| Zachary | — | Not Voting |
| C. Smith | — | Yea |
| K. Smith | — | Yea |
| R. Smith | — | Yea |
| Allison A. Dahle | Democratic | Yea |
| Amos L. Quick, III | Democratic | Yea |
| Becky Carney | Democratic | Yea |
| Brandon Lofton | Democratic | Yea |
| Brian Turner | Democratic | Yea |
| Brian Turner | Democratic | Yea |
| Carolyn G. Logan | Democratic | Yea |
| Cecil Brockman | Democratic | Yea |
| Cynthia Ball | Democratic | Yea |
| Dante Pittman | Democratic | Yea |
| Deb Butler | Democratic | Yea |
| Eric Ager | Democratic | Yea |
| Gale Adcock | Democratic | Yea |
| Garland E. Pierce | Democratic | Yea |
| Graig Meyer | Democratic | Yea |
| Joe John | Democratic | Yea |
| Marcia Morey | Democratic | Yea |
| Mary Belk | Democratic | Yea |
| Pricey Harrison | Democratic | Yea |
| Robert T. Reives, II | Democratic | Yea |
| Shelly Willingham | Democratic | Yea |
| Sydney Batch | Democratic | Yea |
| Terence Everitt | Democratic | Yea |
| Tracy Clark | Democratic | Yea |
| Zack Hawkins | Democratic | Yea |
| Bobby Hanig | Republican | Yea |
| Brenden H. Jones | Republican | Not Voting |
| Chris Humphrey | Republican | Yea |
| Dean Arp | Republican | Yea |
| Dennis Riddell | Republican | Yea |
| Destin Hall | Republican | Yea |
| Donna McDowell White | Republican | Yea |
| Donny Lambeth | Republican | Yea |
| Edward C. Goodwin | Republican | Yea |
| Frank Iler | Republican | Yea |
| Harry Warren | Republican | Yea |
| Hugh Blackwell | Republican | Yea |
| Jay Adams | Republican | Yea |
| Jimmy Dixon | Republican | Yea |
| John A. Torbett | Republican | Yea |
| John R. Bell, IV | Republican | Yea |
| John Sauls | Republican | Yea |
| Julia C. Howard | Republican | Yea |
| Keith Kidwell | Republican | Yea |
| Kelly E. Hastings | Republican | Yea |
| Kevin Corbin | Republican | Yea |
| Kyle Hall | Republican | Yea |
| Larry C. Strickland | Republican | Yea |
| Larry W. Potts | Republican | Yea |
| Lisa S. Barnes | Republican | Yea |
| Mark Brody | Republican | Yea |
| Mitchell S. Setzer | Republican | Yea |
| Phil Shepard | Republican | Yea |
| Sarah Stevens | Republican | Yea |
| Stephen M. Ross | Republican | Not Voting |
| Steve Jarvis | Republican | Not Voting |
| W. Ted Alexander | Republican | Yea |
| William D. Brisson | Republican | Yea |
| Carla D. Cunningham | U | Not Voting |
| Nasif Majeed | U | Yea |
Subjects
Frequently asked questions
- Who sponsors HB 219?
- HB 219 is sponsored by Mitchell S. Setzer (Republican), Bumgardner, Kevin Corbin (Republican), and Lucas.
- What is the current status of HB 219?
- This bill has been enacted into law. Introduced February 27, 2019. Enacted.
- Where can I track HB 219?
- Track HB 219 free on One Click Politics — get push/email alerts when it moves.
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