NORTH CAROLINA GENERAL ASSEMBLY

1979 SESSION

 

 

CHAPTER 824

SENATE BILL 280

 

 

AN ACT TO MODIFY AND EXTEND THE INSURANCE RATE REGULATION PROVISIONS IN CHAPTER 828 OF THE 1977 SESSION LAWS.

 

The General Assembly of North Carolina enacts:

 

Section 1.  G.S. 58-124.19(2), as found in the 1977 Cumulative Supplement to Volume 2B, is rewritten to read:

"(2)      Due consideration shall be given to actual loss and expense experience within this State for the most recent three-year period for which such information is available; to prospective loss and expense experience within this State; to the hazards of conflagration and catastrophe; to a reasonable margin for underwriting profit and to contingencies; to dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers; to investment income earned or realized by insurers from their unearned premium, loss, and loss expense reserve funds generated from business within this State; to past and prospective expenses specially applicable to this State; and to all other relevant factors within this State: Provided, however, that countrywide expense and loss experience and other countrywide data may be considered only where credible North Carolina experience or data is not available."

Sec. 2.  G.S. 58-124.20, as found in the 1977 Cumulative Supplement to Volume 2B, is amended by adding a new subsection to read:

"(e)       The Commissioner may require the filing of supporting data including:

(1)        the Bureau's interpretation of any statistical data relied upon;

(2)        descriptions of the methods employed in setting the rates;

(3)        analysis of the incurred losses submitted on an accident year or policy year basis into their component parts; to wit, paid losses, reserves for losses and loss expenses, and reserves for losses incurred but not reported;

(4)        the total number and dollar amount of paid claims;

(5)        the total number and dollar amount of case basis reserve claims;

(6)        earned and written premiums at current rates by rating territory;

(7)        earned premiums and incurred losses according to classification plan categories; and

(8)        income from investment of unearned premiums and loss and loss expense reserves generated by business within this State.

Provided, however, that with respect to business written prior to January 1, 1980, the Commissioner shall not require the filing of such supporting data which has not been required to be recorded under statistical plans approved by the Commissioner."

Sec. 3.  G.S. 58-1 24.21(b), as found in the 1977 Cumulative Supplement to Volume 2B, is amended by rewriting lines 5 through 8 to read:

"be made with the policyholder either by collection of an additional premium or by refund, if the amount exceeds five dollars ($5.00). The Commissioner may thereafter review any filing in the manner provided; but if so reviewed, no adjustment of any premium on any policy then in force may be ordered."

Sec. 4.  G.S. 58-124.22(b), as found in the 1977 Cumulative Supplement to Volume 2B, is amended as follows:

(a)  on line 3 by inserting between the words "Bureau" and "shall" the following: ", in accordance with rules and regulations established and adopted by the governing committee,";

(b)  by rewriting line 8 to read: "to be distributed appropriately, except that individual refunds that are five dollars ($5.00) or less shall not be required."; and

(c)  by rewriting lines 13 and 14 to read: "were put into effect.".

Sec. 5.  G.S. 58‑124.26 is rewritten to read:

"§ 58-124.26.  Cap on insurance rate increases. — Notwithstanding any other provision of this Article or Chapter, and with respect to the lines of insurance subject to this Article, neither the Rate Bureau nor any member thereof nor the Motor Vehicle Reinsurance Facility shall increase the general rate level for any such line by more than six percent (6%) per annum from the general rate level existing on the effective date of this section: Provided, that the provisions of this section with respect to workers' compensation insurance and employers' liability insurance written in connection therewith shall expire on July 1, 1980; provided further, that the provisions of this section with respect to the remaining lines of insurance subject to this Article shall expire on July 1, 1981."

Sec. 6.  Article 12B of the General Statutes Chapter 58 is amended by adding two new sections to read:

"§ 58-124.29.  Policy forms. — No policy form applying to insurance on risks or operations covered by this Article may be delivered or issued for delivery unless it has been filed with the Commissioner by the Bureau and either he has approved it, or 90 days have elapsed and he has not disapproved it.

"§ 58-124.30.  Payment of dividends not prohibited or regulated; plan for payment into rating system. — Nothing in this Article will be construed to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers. A plan for the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers will not be deemed a rating plan or system."

Sec. 7.  G.S. 58-30.4, as found in the 1977 Cumulative Supplement to Volume 2B, is amended as follows:

(a)  by rewriting lines 17 through 20 to read: "traffic violation or violations, or any combination thereof. The classification plans and"; and

(b)  by rewriting line 24 to read: "G.S. 58-124.20, G.S. 58-124.21, and G.S. 58‑124.22."

Sec. 8.  Section 25 of Chapter 828 of the 1977 Session Laws is rewritten to read:

"Sec. 25.  This act shall become effective on September 1, 1977, and shall not affect any existing policy during the existing term of said policy."

Sec. 9.  If any provision of this act or its application to any person or circumstances is held invalid by any court of competent jurisdiction, the invalidity will not affect other provisions or applications that can be given effect without the invalid provision or application; and to this end the provisions of this act are severable.

Sec. 10.  This act will not affect any policy in existence on the effective date of this act.

Sec. 11.  This act will not affect pending litigation.

Sec. 12.  This act will become effective on June 30, 1979.

In the General Assembly read three times and ratified, this the 7th day of June, 1979.