SB 51 — Maintain NAIC Accreditation of DOI.-AB

FILED SENATE GENERAL ASSEMBLY OF NORTH CAROLINA FebSESSION 4, 2025 S.B.S 1 SENATE BILL 51 Short Title:

51 SESSION 2025 PRINCIPAL CLERK S D SENATE BILL DRS35027-NE-8 Short Title:

Rules and Operations of the Senate February 5, 2025 A BILL TO BE ENTITLED AN ACT TO MAINTAIN NAIC ACCREDITATION OF THE DEPARTMENT OF INSURANCE BY IMPLEMENTING GROUP CAPITAL CALCULATION AND LIQUIDITY STRESS TEST REQUIREMENTS AND TO MAKE VARIOUS CONFORMING CHANGES, AS RECOMMENDED BY THE DEPARTMENT OF INSURANCE.

– The ultimate controlling person of anyanyof of the following is exempt from the filing requirement of subsection (a) of this section:

*DRS35027-NE-8**S51-v-1* General Assembly Of North Carolina Session 2025 a.

– For purposes of subdivision (b)(4) of this section, a non-United States jurisdiction recognizes the group capital calculationcalculationifit ifit satisfies any of the following criteria:

(1) A competent regulatory authority in the jurisdiction affirms that insurers and insurance groups whose lead state is accredited by the NAIC under the NAIC accreditation program shall be subject onlyonlyto to worldwide prudential insurance group supervision, including worldwide group governance, solvency and capital, and reporting, as applicable, by that jurisdiction's lead state commissioner and will not be subject to group supervision, including worldwide group governance, solvency and capital, and reporting, at the level of the worldwide parent undertaking of the insurance or reinsurance group by the non-United States jurisdiction.

If the lead state Page 2 DRS35027-NE-8Senate Bill 51-First Edition General Assembly Of North Carolina Session 2025 commissioner's determination differs from relevant materials published by the NAIC, the lead state commissioner shall provide the NAIC with written justification for the difference supported by documentation.

(4) The insurance holding company system attests that there are no material changes in transactions between insurers and non-insurers in the group that haveoccurred sincethelast filingfilingof of anannual groupcalculation report,ifany.

58-19-25 shall be included in the NAIC liquidity DRS35027-NE-8Senate Bill 51-First Edition Page 3 General Assembly Of North Carolina Session 2025 stress test framework and file a report with the lead state commissioner detailing the results of a specific year's liquidity stress test if either of the following applies:

(a) Unless otherwiseprovidedbylaw,the making,publishing,disseminating, circulating, orplacingorplacingbeforethepublic, beforethepublic,orcausingdirectlyorindirectlyto orcausingbemade, directlyorindirectlytopublished,disseminated, bemade,published,disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station or any electronic means of communication available to the public, or in any other way as an advertisement, announcement, or statement containing a representation or statement with regard to the group capital calculation, group capital ratio, the liquidity stress test results, or supporting disclosures for the liquidity stress test of any insurer or any insurer group, or of any component derived in the calculation by any insurer, broker, or other person engaged in any manner in the insurance business is prohibited.

(b) Notwithstanding subsection (a) of this section, if any materially false statement with respect to thegroupcapitalthe groupcapital calculation,resulting groupcapital ratio,aninappropriatecomparisonratio, an inappropriatecomparison of any amount to an insurer's or insurance group's group capital calculation or resulting group capital ratio, liquidity stress test result, supporting disclosures for the liquidity stress test, or an inappropriate comparison of any amount to an insurer's or insurance group's liquidity stress test result, or supporting disclosures is published in any written publication and the insurer is able to demonstrate to the Commissioner with substantial proof the falsity or inappropriateness of the statement, then the insurer may publish announcements in a written publication if the sole purpose of the announcement is to rebut the materially false or inappropriate statement." PART II.

Page 4 DRS35027-NE-8Senate Bill 51-First Edition General Assembly Of North Carolina Session 2025 (10a)(10b) Group-wide supervisor.

For purposes of this section, all sales, purchases, exchanges, loans or extensions of credit, investments, or guarantees involving one-half of one percent ( 1//s2%) (0.5%) or less of an insurer's admitted assets as of the preceding December 31 are not material for the purposes of this section.material, unless the DRS35027-NE-8Senate Bill 51-First Edition Page 5 General Assembly Of North Carolina Session 2025 Commissioner by rule or order provides otherwise.

Page 6 DRS35027-NE-8Senate Bill 51-First Edition General Assembly Of North Carolina Session 2025 d.

Require a recipient to maintain the confidentiality and privileged status ofanydocuments, materials,orinformation.materials, orinformation.

Specifyprocedures and protocols regardingregardingthe theconfidentialityand confidentialitysecurityof and security of information shared with theNAIC andits affiliates andsubsidiaries or a third-party consultant designated by the Commissioner pursuant to this Article, includingincludingprocedures procedures and protocols forsharingbytheNAIC with other state, federal, or international regulators;regulators.

Require the NAIC and its affiliates and subsidiaries or a third-party consultant designated by the Commissioner to consent to intervention DRS35027-NE-8Senate Bill 51-First Edition Page 7 General Assembly Of North Carolina Session 2025 by an insurer in any judicial or administrative action in which the NAIC and its affiliates and subsidiaries or a third-party consultant designated by the Commissioner may be required to disclose confidential information about the insurer shared with the NAIC and its affiliates and subsidiaries or a third-party consultant designated by the Commissioner pursuant to Article 19 of this Chapter.

Page 8 DRS35027-NE-8Senate Bill 51-First Edition