GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

H	1 

HOUSE BILL 402

Short Title:  Financial Responsibility Referendum.	(Public)
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Sponsors: Representative Beall.
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Referred to:  Commerce.
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February 28, 1989

A BILL TO BE ENTITLED
AN ACT TO ALLOW THE PEOPLE OF NORTH CAROLINA TO DECIDE WHETHER OR NOT TO REPEAL THE VEHICLE FINANCIAL RESPONSIBILITY ACT OF 1957 AND TO MAKE CORRESPONDING AMENDMENTS TO THE REINSURANCE FACILITY AND POLICY LAWS.
The General Assembly of North Carolina enacts:
Section 1.  Article 13 of Chapter 20 of the General Statutes is repealed.
Sec. 2.  G.S. 58-248.26 reads as rewritten:
"§ 58-248.26. Definitions.
As used in this Article:
(1)	‘Cede' or ‘cession' means the act of transferring the risk of loss from the individual insurer to all insurers through the operation of the facility.
(2)	‘Commissioner' means the Commissioner of Insurance.
(3)	‘Company' means each member of the Facility.
(4)	‘Eligible risk' means a person who is a resident of this State who owns a motor vehicle registered or principally garaged in this State or who has a valid driver's license in this State or who is required to file proof of financial responsibility pursuant to Article 9A of Chapter 20 of the General Statutes in order to register his motor vehicle or obtain a driver's license in this State; or a nonresident of this State who owns a motor vehicle registered or principally garaged in this State, or the State and its agencies and cities, counties, towns and municipal corporations in this State and their agencies, provided, however, that no person shall be deemed an eligible risk if timely payment of premium is not tendered or if there is a valid unsatisfied judgment of record against such person for recovery of amounts due for motor vehicle insurance premiums and such person has not been discharged from paying said judgment, or if such person does not furnish the information necessary to effect insurance.
(5)	‘Facility' means the North Carolina Motor Vehicle Reinsurance Facility established pursuant to the provisions of this Article.
(6)	‘Motor vehicle' means every self-propelled vehicle that is designed for use upon a highway, including trailers and semitrailers designed for use with such vehicles (except traction engines, road rollers, farm tractors, tractor cranes, power shovels, and well drillers).
(7)	‘Motor vehicle insurance' means direct insurance against liability arising out of the ownership, operation, maintenance or use of a motor vehicle for bodily injury including death and property damage and includes medical payments and uninsured motorist coverages.
		With respect to motor carriers who are subject to the  financial responsibility requirements established under the Motor Carrier Act of 1980, the term, ‘motor vehicle insurance' includes coverage with respect to environmental restoration. As used in this subsection the term, ‘environmental restoration' means restitution for the loss, damage, or destruction of natural resources arising out of the accidental discharge, dispersal, release, or escape into or upon the land, atmosphere, water course, or body of water of any commodity transported by a motor carrier. Environmental restoration includes the cost of removal and the cost of necessary measures taken to minimize or mitigate damage or potential for damage to human health, the natural environment, fish, shellfish, and wildlife.
(8)	‘Person' means every natural person, firm, partnership, association, corporation or government or agency thereof.
(9)	‘Plan of operation' means the plan of operation approved pursuant to the provisions of this Article."
Sec. 3.  Article 3 of Chapter 58 of the General Statutes is amended by adding two new sections to read:
"§ 58-30.6.  Grounds and procedure for cancellation or nonrenewal of motor vehicle liability insurance.
(a)	As used in this section, the following definitions apply:
(1)	‘Policy' means an insurance policy or contract delivered or issued for delivery in this State covering liability arising from the ownership, maintenance, or use of any motor vehicle, insuring as the named insured one individual or husband and wife residents of the same household, and under which the insured vehicle therein designated is of the following type only:
a.	A four-wheeled automobile or station wagon that is not used as a public or livery conveyance (which terms shall not be construed to include car pools) nor rented to others;
b.	Any other four-wheeled motor vehicle with a load capacity of 1,500 pounds or less which is not used in the occupation, profession or business of the insured, nor is used as a public or livery conveyance nor rented to others.
‘Policy of automobile insurance' or ‘policy' does not apply to any policy insuring more than four motor vehicles; to any policy covering the operation of a garage, sales agency, repair shop, service station, or public parking place; to any policy providing insurance only on an excess basis; nor to any other contract providing insurance to such named insured even though such contract may incidentally provide insurance with respect to such motor vehicles.
(2)	‘Renewal' or ‘to renew' means the issuance and delivery by an insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer through the agent who originally placed the policy or his successors or assigns, such renewal policy to provide types and limits of coverage at least equal to those contained in the policy being superseded, or the issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term with types and limits of coverage at least equal to those contained in the policy being extended:  Provided, however, that any policy with a policy period or term of less than 12 months or any period with no fixed expiration date shall for the purpose of this section be considered as if written for successive policy periods or terms of six months.
	(b)	No insurer shall cancel or refuse to renew a policy solely or primarily because of the age, sex, residence, race, color, creed, national origin, ancestry, marital status, or lawful occupation (including the military service) of anyone who is insured, or solely because another insurer canceled a policy or refused to write or renew such policy, or solely because of any combination of the factors mentioned in this subsection.
	(c)	No insurer shall cancel a policy except for the following reasons:
(1)	The named insured fails to discharge when due any of his obligations in connection with the payment of premium for the policy or any installment thereof, whether payable to the company or its agent either directly or indirectly under any premium finance plan or extension of credit.
(2)	The named insured or any other operator who resides in the same household and customarily operates an automobile insured under such policy has had his driver's license suspended or revoked for more than 31 days after the effective date of the policy if the policy had been in effect less than one year or after the last anniversary of the effective date if the policy had been in effect longer than one year.
(3)	The named insured or any other operator who resides in the same household and customarily operates an automobile insured under the policy during the policy period is finally convicted of driving while impaired.
	(d)	No insurer shall refuse to renew a policy except for one or more of the following reasons:
(1)	The insured has violated any of the material terms or conditions of the policy.
(2)	The named insured or any other operator who resides in the same household and customarily operates an automobile insured under the policy has had his driver's license suspended or revoked for more than 31 days after the effective date of the policy if the policy had been in effect less than one year or after the last anniversary of the effective date if the policy had been in effect longer than one year; or is or becomes subject to any physical or mental condition that impairs his ability to operate a motor vehicle.
(3)	The named insured or any other operator who resides in the same household and customarily operates an automobile insured under the policy is finally convicted of, pleads nolo contendere, or forfeits bail during the policy period for any of the following:
a.	Any felony involving the use of a motor vehicle.
b.	Homicide, arising out of the operation of a motor vehicle.
c.	Driving while impaired.
d.	Leaving the scene of a motor vehicle accident in which the insured is involved without identifying himself and furnishing his address as required by law.
e.	Theft of a motor vehicle or the unlawful taking of a motor vehicle.
f.	A second moving traffic violation by any one person who customarily operates the insured vehicle or an aggregate of four moving traffic violations by all persons customarily operating the insured vehicle within a 12-month period any part of which falls within the policy period, whether or not the violations were repetitions of the same offense or were different offenses.
(4)	The named insured fails to discharge when due any of his obligations in connection with the payment of premium for the policy or any installment thereof, whether payable to the company or its agent either directly or indirectly under any premium finance plan or extension of credit.
(5)	The named insured, or any other operator who resides in his household and who customarily operates an automobile insured under the policy within a 24-month period any part of which falls within the policy period, has been involved as an operator of an automobile in four or more automobile accidents where there is evidence to indicate fault on the part of such operator.
	(e)  No cancellation of refusal to renew by an insurer of a policy is effective unless the insurer has given the policyholder, and any loss payee designated in the policy, notice at his last known post office address by certificate of mailing a written notice of the cancellation or refusal to renew.  Such notice shall:
(1)	Be approved as to form by the Commissioner prior to use;
(2)	State the date, not less than 60 days after mailing to the insured of notice of cancellation or notice of intention not to renew, on which such cancellation or refusal to renew shall become effective, except that such effective date may be 15 days from the date of mailing or delivery when it is being canceled or not renewed for the reasons set forth in subdivision (1) of subsection (d) and in subdivision (4) of subsection (e) of this section;
(3)	State the specific reason or reasons of the insurer for cancellation or refusal to renew;
	(f)  Nothing in this section applies:
(1)	If the insurer has manifested its willingness to renew by issuing or offering to issue a renewal policy, certificate, or other evidence of renewal, or has manifested such intention by any other means, including the mailing by first class mail of a premium notice or expiration notice, and the insured has failed to pay the required premium prior to the premium due date;
(2)	If the named insured has notified in writing the insurer or its agent that he wishes the policy to be canceled or that he does not wish the policy to be renewed;
(3) 	To any policy that has been in effect less than 60 days, unless it is a renewal policy, nor to any policy that has been written or written and renewed for a consecutive period of 48 months or longer.
	(g)  There is no liability on the part of and no cause of action of any nature arises against any insurer, its authorized representative, its agents, its employees, or any person furnishing to the insurer information as to reasons for cancellation or refusal to renew for any statement made by any of them in complying with this section or for the providing of information pertaining thereto except as provided by this section and any applicable federal law.
	(h)  This section does not apply to any insurer that limits the issuance of policies to one class or group of persons engaged in any one particular profession, trade, occupation, or business; nor shall any insurer be required to  renew should the insured become a nonresident of North Carolina.
"§ 58-30.7.  Motor vehicle liability insurance; companies may not fail to renew solely by reason of age; penalties provided.
(a)	No insurance company licensed in this State to do a business of insurance, which is engaged in the writing of motor vehicle liability insurance, as the same is defined in G.S. 20-279.21, shall fail to renew any such existing policy of insurance solely because the insured has attained the age of 65 years or older.
	(b)	Whenever the Commissioner has reason to believe that any insurance company that is licensed to do a business of insurance in this State and is engaged in writing motor vehicle liability insurance has refused to renew policies of motor vehicle liability insurance solely because the applicant has reached the age of 65 years or older, he shall notify such company that it may be in violation of this section, and, in his discretion he may require a hearing to determine whether or not such company has actually been engaged in the practice as aforesaid.  Any hearing held under this section shall in all respects comply with the hearing procedure provided in G.S. 58-54.6.
	(c)	If after such hearing the Commissioner shall determine that the company has engaged in the practice of systematically failing to renew policies of motor vehicle liability insurance because of the advanced age of the insureds, he shall reduce his findings to writing and shall issue and cause to be served upon the company charged with the violation an order requiring the company to cease and desist from engaging in such practices.  After the issuance of such cease and desist order, if the Commissioner finds that the company has continued to engage in such practices, he shall impose upon such company a fine not to exceed the amount of one thousand dollars ($1,000) for each separate violation.
	(d)	Any company aggrieved by any order or decision of the Commissioner may appeal such order and decision to the Superior Court of Wake County in the same manner and under the same rules and provisions set forth in G.S. 58-9.3."
Sec. 4.  Sections 1 through 3 of this act shall become effective only if approved by the qualified voters of the State of North Carolina, and if so approved, Sections 1 through 3 of this act shall become effective on January 1, 1990.  The question of the approval of Sections 1 through 3 of this act shall be submitted to the qualified voters of the State of North Carolina at a statewide election to be held November 7, 1989.
The referendum shall be held in accordance with the provisions of Chapter 163 of the General Statutes, and the form of the ballot shall be:
"[]	FOR approval of an act abolishing compulsory automobile liability insurance.
[]	AGAINST approval of an act abolishing compulsory automobile liability insurance."
If less than a majority of the votes are cast in favor of the approval of Sections 1 through 3 of this act, they shall have no force or effect.
Sec. 5.  This act is effective upon ratification.