GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

S	2 

SENATE BILL 498
Judiciary I Committee Substitute Adopted 5/9/89

Short Title:  Insurance Crimes.	(Public)
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Sponsors:
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Referred to:  
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March 20, 1989

A BILL TO BE ENTITLED
AN ACT TO IMPROVE THE LAWS RELATING TO THE REPORTING AND INVESTIGATION OF INSURANCE FRAUD AND THE FINANCIAL CONDITION OF INSURANCE LICENSEES; THE LAWS RELATING TO EMBEZZLEMENT BY AGENTS AND BROKERS AND THE REPORTING THEREOF; AND THE LAWS RELATING TO FALSE STATEMENTS BY PERSONS IN THE BUSINESS OF INSURANCE.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 58-18.1 reads as rewritten:
"§ 58-18.1.  Reporting and investigation of insurance and reinsurance fraud and the financial condition of licensees; immunity from liability.
(a)	As used in this section, ‘Commissioner' includes an employee, agent, or designee of the Commissioner.  A person, or an employee or agent of that person, acting without actual malice, is not subject to civil liability for libel, slander, or any other cause of action by virtue of furnishing to the Commissioner under the requirements of law or at the direction of the Commissioner reports or other information relating to:  (i) any known or suspected fraudulent insurance or reinsurance claim, transaction, or act or (ii) the financial condition of any licensee.  In the absence of actual malice, members of the NAIC, their duly authorized committees, subcommittees, task forces, delegates and employees, and all other persons charged with the responsibility for collecting, reviewing, analyzing, or disseminating the information developed from filings of financial statements or examinations of licensees are not subject to civil liability for libel, slander, or any other cause of action by virtue of their collection, review, analysis, or dissemination of the data and information collected from these filings or examinations”.
(b)	The Commissioner acting without actual malice, is not subject to civil liability for libel, slander, or any other cause of action by virtue of an investigation of:  (i) any known or suspected fraudulent insurance or reinsurance claim, transaction, or act or (ii) the financial condition of any licensee; or by virtue of publication or dissemination of any official report related to any investigation.  The Commissioner is not subject to civil liability in relation to collecting, reviewing, analyzing, or dissemination of information that is developed by the NAIC from the filing of financial statements with the NAIC or from the examination of insurers by the NAIC and that is communicated to the Commissioner, including any investigation or publication or dissemination of any report or other information in relation thereto.
(c)	During the course of an investigation of: (i) a known or suspected fraudulent insurance or reinsurance claim, transaction, or act or (ii) the financial condition of any licensee, the Commissioner may request any person to furnish copies of any information relative to the (i) known or suspected fraudulent insurance or reinsurance claim, transaction, or act or (ii) the financial condition of the licensee.  The person shall release the information requested and cooperate with  the Commissioner pursuant to this section. 
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Sec. 2.  Article 2 of Chapter 58 of the General Statutes is amended by adding the following new sections:
"§ 58-18.2.  Insurance fraud; claims forms.
	(a)	Any person who, with the intent to defraud, or deceive any insurance company does any of the following is guilty of a Class I felony:
(1)	Presents or causes to be presented to any insurer, any written or oral statement, including computer-generated documents, as part of or in support of a claim for payment or other benefit pursuant to an insurance policy, knowing that the statement contains any false, incomplete, or misleading information concerning any fact or thing material to the claim;
(2)	Assists, abets, solicits, or conspires with another to prepare or make any written or oral statement that is intended to be presented to any insurance company in connection with or in support of any claim for payment or other benefit pursuant to an insurance policy, knowing that the statement contains any false, incomplete, or misleading information concerning any fact or thing material to the claim;
(3)	Conceals information concerning any fact or thing material to a claim for payment or other benefit pursuant to an insurance policy;
(4)	Prepares or causes to be presented to any insurer any written or oral statement that contains true and complete information as part of or in support of a fraudulent claim for payment or other benefit pursuant to an insurance policy; or
	(5)	Prepares any statement referred to in subdivision (1) of this subsection with knowledge or belief that it will be presented to or by an insurer.
(b)	For the purposes of this section:
(1)	‘Insurer' includes an entity under Chapter 57 or 57B of the General Statutes and includes the Teachers' and State Employees' Comprehensive Major Medical Plan.
(2)	‘Statement' includes any notice, statement, proof of loss, bill of lading, receipt for payment, invoice, account, estimate of property damages, bill for services, diagnosis, prescription, hospital or doctor records, X rays, test result, or other evidence of loss, injury, or expense.
"§ 58-18.3.  Embezzlement by insurance agents and brokers.
	If any insurance agent or broker embezzles or fraudulently converts to his own use, or, with intent to use or embezzle, takes, secretes or otherwise disposes of, or fraudulently withholds, appropriates, lends, invests or otherwise uses or applies any money, negotiable instrument, or other consideration received by him in his performance as an agent or broker, he shall be punished as a Class F felon.
"§ 58-18.4.  Report to Commissioner.
	Whenever any insurance company or employee or representative of any insurance company knows or has reasonable cause to believe that any person has violated G.S. 58-18.3, 58-92, or 58-340.37(e), it is the duty of that company or person, within 30 days after acquiring the knowledge, to file with the Commissioner a complete statement of all of the relevant facts and circumstances.  These reports shall be privileged communications, and when filed without malice, shall not subject the company or individuals making the reports to any liability.  The Commissioner may suspend or revoke the license of any insurance company or person who willfully fails to comply with this section."
Sec. 3.  G.S. 58-340.37 is amended by adding a new subsection to read:
"( e)	Any person who willfully makes a false statement in a verified report or declaration under oath that is required by law from fraternal benefit societies, is guilty of perjury under G.S. 14-209."
Sec. 4.  G.S. 58-92 reads as rewritten:
"§ 58-92. Mutual insurance companies organized; requisites for doing business. 
No policy may be issued by a mutual company until the president and the secretary of the company have certified under oath that every subscription for insurance in the list presented to the Commissioner for approval is genuine, and made with an agreement with every subscriber for insurance that he will take the policies subscribed for by him within 30 days after the granting of a license to the company by the Commissioner to issue policies.
Any person taking a false oath in respect to the certificate required by this section is guilty of perjury under G.S. 14-209."
Sec. 5.  G.S. 58-22 reads as rewritten:
"§ 58-22.  Punishment for making false statement.
If any person in any financial or other statement required by law willfully misstates information, that person making oath to or subscribing the statement shall be guilty of perjury under G.S. 14-209 and the entity on whose behalf the person made the oath or subscribed the statement shall be subject to a fine imposed by the court of not less than two thousand dollars ($2,000) nor more than five thousand dollars ($5,000)."
Sec. 6.  G.S. 14-96, 14-96.1, 14-213, 14-214, 14-215, and 14-216 are repealed.
Sec. 7.  In the event any provision of this act is held to be invalid by any court of competent jurisdiction, the court's holding as to that provision shall not affect the validity or operation of other provisions of this act; and to that end the provisions of this act are severable.
Sec. 8.  This act is effective upon ratification except for Sections 3 through 6 of this act which shall become effective October 1, 1989.  Prosecutions for offenses occurring before the effective date of this act are not abated or affected by this act, and the statutes that would be applicable but for this act remain applicable to those prosecutions.