GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	1 

SENATE BILL 973

Short Title:  Workers' Compensation Rating Law.	(Public)

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Sponsors: Senator Kincaid.

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Referred to:  Pensions and Retirement/Insurance/State Personnel

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May 3, 1995

A BILL TO BE ENTITLED
AN ACT TO CREATE THE NORTH CAROLINA WORKERS' COMPENSATION LOSS COSTS RATING LAW.
The General Assembly of North Carolina enacts:
Section 1.  Article 36 of Chapter 58 of the General Statutes reads as rewritten:
"ARTICLE 36.
"North Carolina Rate Bureau.
"Part 1. Rate Bureau Membership.
"§ 58-36-1.  North Carolina Rate Bureau created.
There is hereby created a Bureau to be known as the 'North Carolina Rate Bureau,' with the following objects and functions:
(1)	To assume the functions formerly performed by the North Carolina Fire Insurance Rating Bureau, the North Carolina Automobile Rate Administrative Office, and the Compensation Rating and Inspection Bureau of North Carolina, with regard to the promulgation of rates, for insurance against loss to residential real property with not more than four housing units located in this State and any contents thereof and valuable interest therein and other insurance coverages written in connection with the sale of such property insurance; for theft of and physical damage to private passenger (nonfleet) motor vehicles as the same are defined under Article 40 of this Chapter; for liability insurance for such motor vehicles, automobile medical payments insurance, uninsured motorists coverage and other insurance coverages written in connection with the sale of such liability insurance; and to perform the duties required under Part 3 of this Article.
(2)	The Bureau shall provide reasonable means to be approved by the Commissioner whereby any person affected by a rate made by it may be heard in person or by his authorized representative before the governing committee or other proper executive of the Bureau.
(3)	The Bureau shall have the duty and responsibility of promulgating and proposing rates for insurance against loss to residential real property with not more than four housing units located in this State and any contents thereof or valuable interest therein and other insurance coverages written in connection with the sale of such property insurance; for insurance against theft of or physical damage to private passenger (nonfleet) motor vehicles; and for liability insurance for such motor vehicles, automobile medical payments insurance, uninsured motorists coverage and other insurance coverages written in connection with the sale of such liability insurance. The provisions of this subdivision shall not apply to motor vehicles operated under certificates of authority from the Utilities Commission, the Interstate Commerce Commission, or their successor agencies, where insurance or other proof of financial responsibility is required by law or by regulations specifically applicable to such certificated vehicles. The Bureau shall have no jurisdiction over farm buildings, farm dwellings and their appurtenant structures, farm personal property or other coverages written in connection with farm real or personal property; travel or camper trailers designed to be pulled by private passenger motor vehicles, unless insured under policies covering nonfleet private passenger motor vehicles; residential real and personal property insured in multiple line insurance policies covering business activities as the primary insurable interest; and marine, general liability, burglary and theft, glass, and animal collision insurance, except when such coverages are written as an integral part of a multiple line insurance policy for which there is an indivisible premium.
(4)	Agreements may be made between or among members with respect to equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods. The members may agree between or among themselves on the use of reasonable rate modifications for such insurance, agreements, and rate modifications to be subject to the approval of the Commissioner.
		" 		  	(6)	The Bureau shall maintain and furnish to the Commissioner on an annual basis the statistics on earnings derived by member companies from the investment of unearned premium, loss, and loss expense reserves on nonfleet private passenger motor vehicle insurance policies written in this State. Whenever the Bureau proposes rates under this Article, it shall prepare a separate exhibit for the experience years in question showing the combined earnings realized from the investment of such reserves on policies written in this State. The amount of earnings may in an equitable manner be included in the ratemaking formula to arrive at a fair and equitable rate. The Commissioner may require further information as to such earnings and may require calculations of the Bureau bearing on such earnings.
(7)	Member companies shall furnish, upon request of any person carrying nonfleet private passenger motor vehicle insurance in the State upon whose risk a rate has been promulgated, information as to rating, including the method of calculation.
"§ 58-36-5.  Membership as a prerequisite for writing insurance; governing committee; rules and regulations; expenses.
(a)	Before the Commissioner shall grant permission to any stock, nonstock, or reciprocal insurance company or any other insurance organization to write in this State insurance against loss to residential real property with not more than four housing units located in this State or any contents thereof or valuable interest therein or other insurance coverages written in connection with the sale of such property insurance; or insurance against theft of or physical damage to private passenger (nonfleet) motor vehicles; or liability insurance for such motor vehicles, automobile medical payments insurance, uninsured motorists coverage or other insurance coverage written in connection with the sale of such liability insurance; or workers' compensation and employers' liability insurance written in connection therewith; except for insurance excluded under G.S. 58-36-100; it shall be a requisite that they shall subscribe to and become members of the Bureau.
(b)	Each member of the Bureau writing any one or more of the above lines of insurance in North Carolina shall, as a requisite thereto, be represented in the Bureau and shall be entitled to one representative and one vote in the administration of the affairs of the Bureau.  They shall, upon organization, elect a governing committee which governing committee shall be composed of equal representation by stock and nonstock members.  The governing committee of the Bureau shall also have as nonvoting members two persons who are not employed by or affiliated with any insurance company or the Department and who are appointed by the Governor to serve at his pleasure.
(c)	The Bureau, when created, shall adopt such rules and regulations for its orderly procedure as shall be necessary for its maintenance and operation.  No such rules and regulations shall discriminate against any type of insurer because of its plan of operation, nor shall any insurer be prevented from returning any unused or unabsorbed premium, deposit, savings or earnings to its policyholders or subscribers.  The expense of such Bureau shall be borne by its members by quarterly contributions to be made in advance, such contributions to be made in advance by prorating such expense among the members in accordance with the amount of gross premiums derived from the above lines of insurance in North Carolina during the preceding year and members entering the Bureau since that date to advance an amount to be fixed by the governing committee.  After the first fiscal year of operation of the Bureau the necessary expense of the Bureau shall be advanced by the members in accordance with rules and regulations to be established and adopted by the governing committee.  The Bureau shall be empowered to subscribe for or purchase any necessary service, and employ and fix the salaries of such personnel and assistants as are necessary.
(d)	The Commissioner is hereby authorized to compel the production of all books, data, papers and records and any other data necessary to compile statistics for the purpose of determining the underwriting experience of lines of insurance referred to in this Article, and this information shall be available and for the use of the Bureau for the capitulation and promulgation of rates on lines of insurance as are subject to the ratemaking authority of the Bureau.
"Part 2.  Rates and Classifications.
"§ 58-36-9.  Applicability.
This Part applies to insurance against loss to residential real property with not more than four housing units located in this State and any contents thereof and valuable interest therein and other insurance coverages written in connection with the sale of such property insurance; for theft of and physical damage to private passenger (nonfleet)	motor vehicles as the same are defined under Article 40 of this Chapter; for liability insurance for such motor vehicles, automobile medical payments insurance, uninsured motorists coverage, and other insurance coverages written in connection with the sale of such liability insurance.
"§ 58-36-10.  Method of rate making; factors considered.
The following standards shall apply to the making and use of rates:
(1)	Rates shall not be excessive, inadequate or unfairly discriminatory.
(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.
(3)	In the case of fire insurance rates, as are subject to the ratemaking authority of the Bureau, consideration may be given to the experience of such fire insurance business during the most recent five-year period for which such experience is available.  In the case of fire insurance rates that are subject to the ratemaking authority of the Bureau, consideration shall be given to the insurance public protection classifications of rural fire districts based upon standards established by the Commissioner.  To the extent credits are provided for proximity to fire hydrants, the Bureau may also provide appropriate credits in public protection classifications for optional water sources, such as ponds, lakes, or other bodies of water, in accordance with standards and procedures filed with and approved by the Commissioner.
(4)	Risks may be grouped by classifications and lines of insurance for establishment of rates and base premiums.  Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions or both.  Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.  The Bureau is directed to establish and implement a comprehensive classification rating plan for motor vehicle insurance under its jurisdiction within 90 days of September 1, 1977.  No such classification plans shall base any standard or rating plan for private passenger (nonfleet) motor vehicles, in whole or in part, directly or indirectly, upon the age or sex of the persons insured.  The Bureau shall at least once every three years make a complete review of the filed classification rates to determine whether they are proper and supported by statistical evidence, and shall at least once every 10 years make a complete review of the territories for nonfleet private passenger motor vehicle insurance to determine whether they are proper and reasonable.
	"§ 58-36-15.  Filing rates, plans with Commissioner; public inspection of filings.
(a)	The Bureau shall file with the Commissioner copies of the rates, classification plans, rating plans and rating systems used by its members.  Each rate filing shall become effective on the date specified in the filing, but not earlier than 105 days from the date the filing is received by the Commissioner: Provided any filing may become effective on a date earlier than that specified in this subsection upon agreement between the Commissioner and the Bureau.
(b)	A filing shall be open to public inspection immediately upon submission to the Commissioner.
(c)	The Bureau shall maintain reasonable records, of the type and kind reasonably adapted to its method of operation, of the experience of its members and of the data, statistics or information collected or used by it in connection with the rates, rating plans, rating systems, underwriting rules, policy or bond forms, surveys or inspections made or used by it.
(d)	With respect to the filing of rates for nonfleet private passenger motor vehicle insurance, the Bureau shall, on or before February 1 of each year, or later with the approval of the Commissioner, file with the Commissioner the experience, data, statistics, and information referred to in subsection (c) of this section and any proposed adjustments in the rates for all member companies of the Bureau.  The filing shall include, where deemed by the Commissioner to be necessary for proper review, the data specified in subsections (c), (e), (g) and (h) of this section.  Any filing that does not contain the data required by this subsection may be returned to the Bureau and not be deemed a proper filing.  Provided, however, that if the Commissioner concludes that a filing does not constitute a proper filing he shall promptly notify the Bureau in writing to that effect, which notification shall state in reasonable detail the basis of the Commissioner's conclusion.  The Bureau shall then have a reasonable time to remedy the defects so specified.  An otherwise defective filing thus remedied shall be deemed to be a proper and timely filing, except that all periods of time specified in this Article will run from the date the Commissioner receives additional or amended documents necessary to remedy all material defects in the original filing.
(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.
(f)	On or before September 1 of each calendar year the Bureau shall submit to the Commissioner the experience, data, statistics, and information referred to in subsection (c) of this section and a rate review based on such data for workers' compensation insurance and employers' liability insurance written in connection therewith.  Any rate increase for such insurance that is implemented pursuant to this Part shall become effective solely to such insurance as is written having an inception date on or after the effective date of the rate increase.
(g)	The following information must be included in policy form, rule, and rate filings under this Part and under Article 37 of this Chapter:
(1)	A detailed list of the rates, rules, and policy forms filed, accompanied by a list of those superseded; and
(2)	A detailed description, properly referenced, of all changes in policy forms, rules, and rates, including the effect of each change.
(h)	Except for filings made under G.S. 58-36-30, all policy form, rule, and rate filings under this Part and Article 37 of this Chapter that are based on statistical data must be accompanied by the following properly identified information:
(1)	North Carolina earned premiums at the actual and current rate level; losses and loss adjustment expenses, each on paid and incurred bases without trending or other modification for the experience period, including the loss ratio anticipated at the time the rates were promulgated for the experience period;
(2)	Credibility factor development and application;
(3)	Loss development factor derivation and application on both paid and incurred bases and in both numbers and dollars of claims;
(4)	Trending factor development and application;
(5)	Changes in premium base resulting from rating exposure trends;
(6)	Limiting factor development and application;
(7)	Overhead expense development and application of commission and brokerage, other acquisition expenses, general expenses, taxes, licenses, and fees;
(8)	Percent rate change;
(9)	Final proposed rates;
(10)	Investment earnings, consisting of investment income and realized plus unrealized capital gains, from loss, loss expense, and unearned premium reserves;
(11)	Identification of applicable statistical plans and programs and a certification of compliance with them;
(12)	Investment earnings on capital and surplus;
(13)	Level of capital and surplus needed to support premium writings without endangering the solvency of member companies; and
(14)	Such other information that may be required by any rule adopted by the Commissioner.
Provided, however, that no filing may be returned or disapproved on the grounds that such information has not been furnished if insurers have not been required to collect such information pursuant to statistical plans or programs or to report such information to the Bureau or to statistical agents, except where the Commissioner has given reasonable prior notice to the insurers to begin collecting and reporting such information, or except when the information is readily available to the insurers.
	(i)  The Bureau shall file with and at the time of any rate filing all testimony, exhibits, and other information on which the Bureau will rely at the hearing on the rate filing.  The Department shall file all testimony, exhibits, and other information on which the Department will rely at the hearing on the rate filing 20 days in advance of the convening date of the hearing.  Upon the issuance of a notice of hearing the Commissioner shall hold a meeting of the parties to provide for the scheduling of any additional testimony, including written testimony, exhibits or other information, in response to the notice of hearing and any potential rebuttal testimony, exhibits, or other information.  This subsection also applies to rate filings made by the North Carolina Motor Vehicle Reinsurance Facility under Article 37 of this Chapter.
"§ 58-36-20.  Disapproval; hearing, order; adjustment of premium, review of filing.
(a)	At any time within 50 days from and after the date of any filing, the Commissioner may give written notice to the Bureau specifying in what respect and to what extent he contends such filing fails to comply with the requirements of this Article and fixing a date for hearing not less than 30 days from the date of mailing of such notice.  At such hearing the factors specified in G.S. 58-36-10 shall be considered.  If the Commissioner after hearing finds that the filing does not comply with the provisions of this Article, he may issue his order determining wherein and to what extent such filing is deemed to be improper and fixing a date thereafter, within a reasonable time, after which such filing shall no longer be effective.  Any order of disapproval under this section must be entered within 105 days of the date the filing is received by the Commissioner.
(b)	In the event that no notice of hearing shall be issued within 50 days from the date of any such filing, the filing shall be deemed to be approved.  If the Commissioner disapproves such filing pursuant to subsection (a) as not being in compliance with G.S. 58-36-10, he may order an adjustment of the premium to 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.
	"§ 58-36-25.  Appeal of Commissioner's order.
(a)	Any order or decision of the Commissioner shall be subject to judicial review as provided in Article 2 of this Chapter.
(b)	Whenever a Bureau rate is held to be unfairly discriminatory or excessive and no longer effective by order of the Commissioner issued under G.S. 58-36-20, the members of the Bureau, in accordance with rules and regulations established and adopted by the governing committee, shall have the option to continue to use such rate for the interim period pending judicial review of such order, provided each such member shall place in escrow account the purportedly unfairly discriminatory or excessive portion of the premium collected during such interim period.  Upon a final determination by the Court, the Commissioner shall order the escrowed funds to be distributed appropriately, except that individual refunds that are five dollars ($5.00) or less shall not be required.  The court may also require that purportedly excess premiums resulting from an adjustment of premiums ordered pursuant to G.S. 58-36-20(b) be placed in such escrow account pending judicial review.  If refunds made to policyholders are ordered under this subsection, the amounts refunded shall bear interest at the rate determined under this subsection.  That rate shall be the average of the prime rates of the four largest banking institutions domiciled in this State, plus three percent (3%), as of the effective date of the filing, to be computed by the Commissioner.
"§ 58-36-30.  Deviations.
(a)	No insurer, officer, agent or representative thereof shall knowingly issue or deliver or knowingly permit the issuance or delivery of any policy of insurance in this State which does not conform to the rates, rating plans, classifications, schedules, rules and standards made and filed by the Bureau.  However, an insurer may deviate from the rates promulgated by the Bureau provided the insurer has filed the deviation to be applied both with the Bureau and the Commissioner, and provided the said deviation is uniform in its application to all risks in the State of the class to which such deviation is to apply; and provided such deviation is approved by the Commissioner.  The Commissioner shall approve proposed deviations if the same do not render the rates excessive, inadequate or unfairly discriminatory.  If approved, the deviation may thereafter be amended, subject to the provisions of this subsection.  The deviation may be terminated only if the deviation will have been in effect for a period of six months before the effective date of the termination and the insurer notifies the Commissioner of the termination no later than 15 days before the effective date of the termination.
(b)	A rate in excess of that promulgated by the Bureau may be charged on any specific risk provided such higher rate is charged with the approval of the Commissioner and with the knowledge and written consent of the insured.  All data filed with the Commissioner under this subsection are proprietary and confidential and are not public records under G.S. 132-1 or G.S. 58-2-100.
	(d)	Notwithstanding any other provision of law prohibiting insurance rate differentials based on age, with respect to nonfleet private passenger motor vehicle insurance under the jurisdiction of the Bureau, any member of the Bureau may apply for and use in this State, subject to the Commissioner's approval, a downward deviation in the rates for insureds who are 55 years of age or older.
"§ 58-36-35.  Appeal to Commissioner from decision of Bureau.
Any member of the Bureau may appeal to the Commissioner from any decision of the Bureau. After a hearing held on not less than 10 days' written notice to the appellant and to the Bureau, the Commissioner shall issue an order approving the decision or directing the Bureau to reconsider the decision.  In the event the Commissioner directs the Bureau to reconsider the decision and the Bureau fails to take action satisfactory to the Commissioner, the Commissioner shall make such order as he may see fit.
No later than 20 days before each hearing, the appellant shall file with the Commissioner or his designated hearing officer and shall serve on the appellee a written statement of his case and any evidence he intends to offer at the hearing.  No later than five days before such hearing, the appellee shall file with the Commissioner or his designated hearing officer and shall serve on the appellant a written statement of his case and any evidence he intends to offer at the hearing.  Each such hearing shall be recorded and transcribed.  The cost of such recording and transcribing shall be borne equally by the appellant and appellee; provided that upon any final adjudication the prevailing party shall be reimbursed for his share of such costs by the other party.  Each party shall, on a date determined by the Commissioner or his designated hearing officer, but not sooner than 15 days after delivery of the completed transcript to the party, submit to the Commissioner or his designated hearing officer and serve on the other party, a proposed order.  The Commissioner or his designated hearing officer shall then issue an order.
"§ 58-36-40.  Existing rates, rating systems, territories, classifications and policy forms.
Rates, rating systems, territories, classifications and policy forms lawfully in use on September 1, 1977, may continue to be used thereafter, notwithstanding any provision of this Part.
"§ 58-36-45.  Notice of coverage or rate change.
Whenever an insurer changes the coverage other than at the request of the insured or changes the premium rate, it shall give the insured written notice of such coverage change or premium rate change at least 15 days in advance of the effective date of such change or changes with a copy of such notice to the agent. 
"§ 58-36-50.  Limitation.
Nothing in this Part shall apply to any town or county farmers mutual fire insurance association restricting its operations to not more than six adjacent counties in this State, or to domestic insurance companies, associations, orders or fraternal benefit societies now doing business in this State on the assessment plan. 
"§ 58-36-55.  Policy forms.
No policy form applying to insurance on risks or operations covered by this Part 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.
"§ 58-36-60.  Payment of dividends not prohibited or regulated; plan for payment into rating system.
Nothing in this Part 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.
"§ 58-36-65.  Classifications and Safe Driver Incentive Plan for nonfleet private passenger motor vehicle insurance.
(a)	The Bureau shall file, subject to review, modification, and promulgation by the Commissioner, such rate classifications, schedules, or rules that the Commissioner deems to be desirable and equitable to classify drivers of nonfleet private passenger motor vehicles for insurance purposes. Subsequently, the Commissioner may require the Bureau to file modifications of the classifications, schedules, or rules. If the Bureau does not file the modifications within a reasonable time, the Commissioner may promulgate the modifications. In promulgating or modifying these classifications, schedules, or rules, the Commissioner may give consideration to the following:
(1)	Uses of vehicles, including without limitation to farm use, pleasure use, driving to and from work, and business use;
(2)	Principal and occasional operation of vehicles;
(3)	Years of driving experience of insureds as licensed drivers;
(4)	The characteristics of vehicles; or
(5)	Any other factors, not in conflict with any law, deemed by the Commissioner to be appropriate.
(b)	The Bureau shall file, subject to review, modification, and promulgation by the Commissioner, a Safe Driver Incentive Plan ('Plan') that adequately and factually distinguishes among various classes of drivers that have safe driving records and various classes of drivers that have a record of at-fault accidents; a record of convictions of major moving traffic violations; a record of convictions of minor moving traffic violations; or a combination thereof; and that provides for premium differentials among those classes of drivers. Subsequently, the Commissioner may require the Bureau to file modifications of the Plan. If the Bureau does not file the modifications within a reasonable time, the Commissioner may promulgate the modifications. The Commissioner is authorized to structure the Plan to provide for surcharges above and discounts below the rate otherwise charged.
(c)	The classifications and Plan filed by the Bureau shall be subject to the filing, hearing, modification, approval, disapproval, review, and appeal procedures provided by law; provided that the 105-day disapproval period in G.S. 58-36-20(a) and the 50-day deemer period in G.S. 58-36-20(b) do not apply to filings or modifications made under this section. The classifications or Plan filed by the Bureau and promulgated by the Commissioner shall of itself not be designed to bring about any increase or decrease in the overall rate level.
(d)	Whenever any policy loses any safe driver discount provided by the Plan or is surcharged due to an accumulation of points under the Plan, the insurer shall, pursuant to rules adopted by the Commissioner, prior to or simultaneously with the billing for additional premium, inform the named insured of the surcharge or loss of discount by mailing to such insured a notice that states the basis for the surcharge or loss of discount, and that advises that upon receipt of a written request from the named insured it will promptly mail to the named insured a statement of the amount of increased premium attributable to the surcharge or loss of discount. The statement of the basis of the surcharge or loss of discount is privileged, and does not constitute grounds for any cause of action for defamation or invasion of privacy against the insurer or its representatives, or against any person who furnishes to the insurer the information upon which the insurer's reasons are based, unless the statement or furnishing of information is made with malice or in bad faith.
(e)	Records of convictions for moving traffic violations to be considered under this section shall be obtained at least annually from the Division of Motor Vehicles and applied by the Bureau's member companies in accordance with rules to be established by the Bureau.
(f)	The Bureau is authorized to establish reasonable rules providing for the exchange of information among its member companies as to chargeable accidents and similar information involving persons to be insured under policies. Neither the Bureau, any employee of the Bureau, nor any company or individual serving on any committee of the Bureau has any liability for defamation or invasion of privacy to any person arising out of the adoption, implementation, or enforcement of any such rule. No insurer or individual requesting, furnishing, or otherwise using any information that such insurer or person reasonably believes to be for purposes authorized by this section has any liability for defamation or invasion of privacy to any person on account of any such requesting, furnishing, or use. The immunity provided by this subsection does not apply to any acts made with malice or in bad faith.
(g)	If an applicant for the issuance or renewal of a nonfleet private passenger motor vehicle insurance policy knowingly makes a material misrepresentation of the years of driving experience or the driving record of any named insured or of any other operator who resides in the same household and who customarily operates a motor vehicle to be insured under the policy, the insurer may:
(1)	Cancel or refuse to renew the policy;
(2)	Surcharge the policy in accordance with rules to be adopted by the Bureau and approved by the Commissioner; or
(3)	Recover from the applicant the appropriate amount of premium or surcharge that would have been collected by the insurer had the applicant furnished the correct information.
(h)	If an insured disputes his insurer's determination that the operator of an insured vehicle was at fault in an accident, such dispute shall be resolved pursuant to G.S. 58-36-1(2), unless there has been an adjudication or admission of negligence of such operator.
(i)	As used in this section, 'conviction' means a conviction as defined in G.S. 20-279.1 and means an infraction as defined in G.S. 14-3.1.
(j)	Subclassification plan surcharges shall be applied to a policy for a period of not less nor more than three policy years.
(k)	The subclassification plan may provide for premium surcharges for insureds having less than three years' driving experience as licensed drivers.
(l)	Except as provided in G.S. 58-36-30(d), no classification or subclassification plan for nonfleet private passenger motor vehicle insurance shall be based, in whole or in part, directly or indirectly, upon the age or gender of insureds.
(m)	Notwithstanding any other provision of law, with respect to motorcycle insurance under the jurisdiction of the Bureau, any member of the Bureau may apply for and use in this State, subject to the Commissioner's approval, a downward deviation in the rates of insureds who show proof of satisfactory completion of the Motorcycle Safety Instruction Program.
"§ 58-36-70.  Rate filings and hearings for motor vehicle insurance.
(a)	With respect to nonfleet private passenger motor vehicle insurance, except as provided in G.S. 58-36-25, a filing made by the Bureau under G.S. 58-36-15(d) is not effective until approved by the Commissioner or unless 60 days have elapsed since the making of a proper filing under that subsection and the Commissioner has not called for a hearing on the filing. If the Commissioner calls for a hearing, he must give written notice to the Bureau, specify in the notice in what respect the filing fails to comply with this Part, and fix a date for the hearing that is not less than 30 days from the date the notice is mailed.
(b)	At least 15 days before the date set for the convening of the hearing the respective staffs and consultants of the Bureau and Commissioner shall meet at a prehearing conference to review the filing and discuss any points of disagreement that are likely to be in issue at the hearing. At the prehearing conference, the parties shall list the names of potential witnesses and, where possible, stipulate to their qualifications as expert witnesses, stipulate to the sequence of appearances of witnesses, and stipulate to the relevance of proposed exhibits to be offered by the parties. Minutes of the prehearing conference shall be made and reduced to writing and become part of the hearing record. Any agreements reached as to preliminary matters shall be set forth in writing and consented to by the Bureau and the Commissioner. The purpose of this subsection is to avoid unnecessary delay in the rate hearings.
	(c)	Once begun, hearings must proceed without undue delay. At the hearing the burden of proving that the proposed rates are not excessive, inadequate, or unfairly discriminatory is on the Bureau. The Commissioner may disregard at the hearing any exhibits, judgments, or conclusions offered as evidence by the Bureau that were developed by or available to or could reasonably have been obtained or developed by the Bureau at or before the time the Bureau made its proper filing and which exhibits, judgments, or conclusions were not included and supported in the filing; unless the evidence is offered in response to inquiries made at the hearing by the Department, the notice of hearing, or as rebuttal to the Department's evidence. If relevant data becomes available after the filing has been properly made, the Commissioner may consider such data as evidence in the hearing. The order of presenting evidence shall be (1) by the Bureau; (2) by the Department; (3) any rebuttal evidence by the Bureau regarding the Department's evidence; and (4) any rebuttal evidence by the Department regarding the Bureau's rebuttal evidence. Neither the Bureau nor the Department shall present repetitious testimony or evidence relating to the same issues.
(d)	If the Commissioner finds that a filing complies with the provisions of this Part, either after the hearing or at any other time after the filing has been properly made, he may issue an order approving the filing. If the Commissioner after the hearing finds that the filing does not comply with the provisions of this Part, he may issue an order disapproving the filing, determining in what respect the filing is improper, and specifying the appropriate rate level or levels that may be used by the members of the Bureau instead of the rate level or levels proposed by the Bureau filing, unless there has not been data admitted into evidence in the hearing that is sufficiently credible for arriving at the appropriate rate level or levels. Any order issued after a hearing shall be issued within 45 days after the completion of the hearing. If no order is issued within 45 days after the completion of the hearing, the filing shall be deemed to be approved. 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.  The escrow provisions of G.S. 58-36-25(b) apply to any order of the Commissioner under this subsection.
(e)	No person shall willfully withhold information required by this Part from or knowingly furnish false or misleading information to the Commissioner, any statistical agency designated by the Commissioner, any rating or advisory organization, the Bureau, the North Carolina Motor Vehicle Reinsurance Facility, or any insurer, which information affects the rates, rating plans, classifications, or policy forms subject to this Part or Article 37 of this Chapter. 
"§ 58-36-75.  At-fault accidents and certain moving traffic violations under the Safe Driver Incentive Plan.
(a)	The subclassification plan promulgated pursuant to G.S. 58-36-65(b) may provide for separate surcharges for major, intermediate, and minor accidents.  A 'major accident' is an at-fault accident that results in either (i) bodily injury or death or (ii) only property damage of two thousand dollars ($2,000) or more.  An 'intermediate accident' is an at-fault accident that results in only property damage of more than one thousand dollars ($1,000) but less than two thousand dollars ($2,000).  A 'minor accident' is an at-fault accident that results in only property damage of one thousand dollars ($1,000) or less.  The subclassification plan may also exempt certain minor accidents from the Facility recoupment surcharge.
(a1)	The subclassification plan shall provide that there shall be no premium surcharge, increase in premium on account of cession to the Reinsurance Facility, or assessment of points against an insured where:  (i) the insured is involved and is at fault in a 'minor accident,' as defined in subsection (a) of this section; (ii) the insured is not convicted of a moving traffic violation in connection with the accident; (iii) neither the vehicle owner, principal operator, nor any licensed operator in the owner's household has a driving record consisting of one or more convictions for a moving traffic violation or one or more at-fault accidents during the three-year period immediately preceding the date of the application for a policy or the date of the preparation of the renewal of a policy; and (iv) the insured has been covered by liability insurance with the same company or company group continuously for at least the six months immediately preceding the accident.  Notwithstanding (iv) of this subsection, if the insured has been covered by liability insurance with the same company or company group for at least six continuous months, some or all of which were after the accident, the insurance company shall remove any premium surcharge or assessment of points against the insured if requirements (i), (ii), and (iii) of this subsection are met.  Also notwithstanding (iv) of this subsection, an insurance company may choose not to assess a premium surcharge or points against an insured who has been covered by liability insurance with that company or with the company's group for less than six months immediately preceding the accident, if requirements (i), (ii), and (iii) are met.
(a2)	The subclassification plan shall provide that there shall be no premium surcharge or assessment of points against an insured where (i) the insured's driver's license has been revoked under G.S. 20-16.5; and (ii) the insured is subsequently acquitted of the offense involving impaired driving, as defined in G.S. 20-4.01(24a), that is related to the revocation, or the charge for that offense is dismissed.  In addition, no insurer shall use, for rating, underwriting, or classification purposes, including ceding any risk to the Facility or writing any kind of coverage subject to this Part, any license revocation under G.S. 20-16.5 if the insured is acquitted or the charge is dismissed as described in this subsection.
(b)	The subclassification plan promulgated pursuant to G.S. 58-36-65(b) shall provide that with respect to a conviction for any moving traffic violation that is not listed in subsection (c) of this section, there shall be no Motor Vehicle Reinsurance Facility recoupment surcharge pursuant to G.S. 58-37-40(f) unless (i) the vehicle owner, principal operator, or any licensed operator in the owner's household has a driving record consisting of one or more convictions for a moving traffic violation, other than the conviction for the exempt violation, or one or more at-fault accidents during the three-year period immediately preceding the date of the application for a policy or the date of the preparation of the renewal of a policy, or (ii) the moving traffic violation for which the operator has been convicted occurred at the time of an accident for which he was at fault.  Nothing in this section affects any provisions in the subclassification plan for premium surcharges for moving traffic violations or at-fault accidents.
(c)	The subclassification plan promulgated pursuant to G.S. 58-36-65(b) shall provide for facility recoupment surcharges pursuant to G.S. 58-37-40(f) and G.S. 58-37-75, in addition to premium surcharges, for convictions for the following moving traffic violations:
<font=26>
General Statute	Description of Offense
20-12.1	Being impaired while accompanying a permittee who is learning to drive
20-28	Driving while license is suspended or revoked
20-138.1	Driving a vehicle while impaired
20-138.2	Driving a commercial vehicle while impaired
20-138.3	Driving by provisional licensee after consuming alcohol or drugs
20-140(a)	Driving carelessly and heedlessly in willful or wanton disregard of the rights of others
20-140(b)	Driving without due caution in a manner so as to endanger other people or property
20-141(a)	Only driving at least 11 miles per hour over the posted speed limit
20-141(j)	Driving in excess of 55 mph and at least 15 mph over legal limit, while fleeing or attempting to elude arrest by a law enforcement officer
20-141(j1)	Driving more than 15 mph over legal limit
20-141.1	Speeding in a school zone
20-141.3(a)	Engaging in prearranged speed competition with another motor vehicle
20-141.3(b)	Willfully engaging in speed competition with another motor vehicle (not prearranged)
20-141.3(c)	Allowing or authorizing others to use one's motor vehicle in prearranged speed competition or placing or receiving a bet or wager on a prearranged speed competition
20-141.4(a1)	Death by vehicle (unintentionally causing death of another while engaged in impaired driving)
20-141.4(a2)	Death by vehicle (unintentionally causing death of another as a result of a violation of motor vehicle law intended to regulate traffic or used to control operation of a vehicle)
20-166(a)	Failure to stop by driver who knew or should have known he was involved in accident and that accident caused death or injury to any person
20-166(c)	Failure of driver involved in accident causing property damage or personal injury or death (if driver did not know of injury or death) to stop at scene of accident
20-175.2	Failure to yield right-of-way to blind person at crossings, intersections, and traffic control signal points
20-217	Failure to stop and remain stopped when approaching a stopped school bus engaged in receiving or discharging passengers and while bus has mechanical stop signal displayed
14-18	Voluntary manslaughter
14-18	Involuntary manslaughter
<font=16>
(d)	There shall be no Facility recoupment surcharge under G.S. 58-37-40(f) or Safe Driver Incentive Plan surcharges under G.S. 58-36-65 for accidents occurring when only operating a firefighting, rescue squad, or law enforcement vehicle in response to an emergency if the operator of the vehicle at the time of the accident was a paid or volunteer member of any fire department, rescue squad, or any law enforcement agency.  This exception does not include an accident occurring after the vehicle ceases to be used in response to the emergency and the emergency ceases to exist.
(e)	There shall be no Facility recoupment surcharge under G.S. 58-37-40(f) for any accident involving only damage to the operator's vehicle or to the property of another for which full payment or compensation has been made by the operator at fault; and when the motor vehicle insurer of the operator has not made any payment under any kind of insurance policy for such property damage to or on behalf of such operator.  Notwithstanding the provision of this subsection, an insured still has a duty to report such accident to his insurer and to law enforcement authorities if such duty is required by the insurance contract or by law.
(f)	The subclassification plan shall provide that with respect to a conviction for a 'violation of speeding 10 miles per hour or less over the speed limit' there shall be no premium surcharge nor any assessment of points unless there is a driving record consisting of a conviction or convictions for a moving traffic violation or violations, except for a prayer for judgment continued for any moving traffic violation, during the three years immediately preceding the date of application or the preparation of the renewal.  The subclassification plan shall also provide that with respect to a prayer for judgment continued for any moving traffic violation, there shall be no premium surcharge nor any assessment of points unless the vehicle owner, principal operator, or any licensed operator in the owner's household has a driving record consisting of a prayer or prayers for judgment continued for any moving traffic violation or violations during the three years immediately preceding the date of application or the preparation of the renewal.  For the purpose of this subsection, a 'prayer for judgment continued' means a determination of guilt by a jury or a court though no sentence has been imposed.  For the purpose of this subsection, a 'violation of speeding 10 miles per hour or less over the speed limit' does not include the offense of speeding in a school zone in excess of the posted school zone speed limit.
(f1)	The subclassification plan shall provide that in the event an insured is at fault in an accident and is convicted of a moving traffic violation in connection with the accident, only the higher plan premium surcharge between the accident and the conviction shall be assessed on the policy.
(g)	As used in this section 'conviction' means a conviction as defined in G.S. 20-279.1 and means an infraction as defined in G.S. 14-3.1.
"§ 58-36-80.  Coverage for damage to rental vehicles authorized.
As used in this section, 'property damage' means damage or loss to a rented vehicle in excess of two hundred fifty dollars ($250.00), including loss of use and any costs or expenses incident to the damage or loss, for which the renter is legally obligated to pay; and 'rented' means rented on a daily rate basis for a period of 21 consecutive days or less.  The Bureau is authorized to promulgate rates and policy forms for insurance against property damage to rented private passenger motor vehicles.  Such coverage may be offered at the option of the individual member companies of the Bureau. 
"§ 58-36-85.  Termination of a nonfleet private passenger motor vehicle insurance policy.
(a)	Definitions. – The following definitions apply in this section:
(1)	Policy. – A nonfleet private passenger motor vehicle liability insurance policy, including a policy that provides medical payments, uninsured motorist, or underinsured motorist coverage, whose named insured is one individual or two or more individuals who reside in the same household.
(2)	Terminate. – To cancel or refuse to renew a policy.
(b)	Termination Restrictions. – An insurer shall not terminate a policy for a reason that is not specified in G.S. 58-37-50(1) through (5) or G.S. 58-36-65(g). A termination of a policy is not effective unless the insurer either has notified a named insured of the termination by sending a written termination notice by first class mail to the insured's last known address or is not required by this subsection to send a written termination notice. Proof of mailing of a written termination notice is proof that the notice was sent.
An insurer is not required to send a written termination notice if any of the following applies:
(1)	The insurer has manifested its willingness to renew the policy by issuing or offering to issue a renewal policy, a certificate, or other evidence of renewal.
(2)	The insurer has manifested its willingness to renew the policy by any means not described in subdivision (1) of this subsection, including mailing a premium notice or expiration notice by first class mail to the named insured and the failure of the insured to pay the required premium on or before the premium due date.
(3)	A named insured has given written notification to the insurer or its agent that the named insured wants the policy to be terminated.
(c)	Contents of Notice. – The form of a written termination notice used by an insurer must be approved by the Commissioner before it is used. A written termination notice must state the reason for the termination and the date the termination is effective. If the policy is terminated for nonpayment of the premium, the effective date may be 15 days from the date the notice is mailed. If the policy is terminated for any other reason, the effective date must be at least 60 days after the notice is mailed. A written termination notice must include or be accompanied by a statement that advises the insured of the penalty for driving a vehicle without complying with Article 13 of Chapter 20 of the General Statutes and that the insured has the right to request the Department to review the termination.
(d)	Request for Review. – An insured who receives from an insurer a written termination notice may obtain review of the termination by filing with the Department a written request for review within 10 days after receiving a termination notice that complies with subsection (c) of this section. An insured who does not file a request within the required time waives the right to a review.
(e)	Administrative Review. – When the Department receives a written request to review a termination, it must investigate and determine the reason for the termination. The Department shall enter an order for one of the following upon completing its review:
(1)	Approval of the termination, if it finds the termination complies with the law.
(2)	Renewal or reinstatement of the policy, if it finds the termination does not comply with the law.
(3)	Renewal or reinstatement of the policy and payment by the insurer of the costs of the Department's review, not to exceed one thousand dollars ($1,000), if it finds the termination does not comply with the law and the insurer willfully violated this section.
The Department shall mail a copy of the order to the insured and the insurer. An insured or an insurer who disagrees with the determination of the Department may file a petition for a contested case under Article 3A of Chapter 150B of the General Statutes and the rules adopted by the Commissioner to implement that Article. The petition must be filed within 30 days after receiving the copy of the order.
(f)	Delegation. – The Commissioner shall designate an employee or a deputy to conduct the departmental review of a termination. The Commissioner may designate a deputy to conduct a contested case hearing concerning a termination. The Commissioner may not designate a deputy who conducted the departmental review of a termination to conduct a contested case hearing concerning the same termination.
(g)	Effect of Review on Policy. – A policy shall remain in effect during administrative and judicial review of an insurer's action to terminate the policy.
(h)	Liability Limit. – There is no liability on the part of and no cause of action for defamation or invasion of privacy arises against an insurer, an insurer's authorized representatives, agents, or employees, or a licensed insurance agent or broker for a communication or statement made concerning a written notice of termination.
(i)	Records. – An insurer shall keep a record of a termination for three years. 
"Part 3.  Workers' Compensation Loss Costs and Rates.
"§ 58-36-100.  Applicability.
This Part applies to workers' compensation and related employer's liability insurance but does not apply to reinsurance or to self-insurance under G.S. 97-93, G.S. 97-7, or Article 23 of this Chapter.
"§ 58-36-105.  Definitions.
(a)	'Accepted actuarial standards' means the standards adopted by the Casualty Actuarial Society in its Statement of Principles Regarding Property and Casualty Insurance Ratemaking, and the Standards of Practice adopted by the Actuarial Standards Board.
(b)	'Classification system' means the plan, system, or arrangement for recognizing differences in exposure to hazards among industries, occupations, or operations of policyholders.
(c)	'Developed losses' means adjusted losses (including loss adjustment expenses), using accepted actuarial standards, to eliminate the effect of differences between current payment or reserve estimates and those needed to provide actual ultimate loss (including loss adjustment expense) payments.
(d)	'Expense' means expenses, other than loss expenses and loss adjustment expenses associated with writing workers' compensation and employer's liability insurance, as determined by the insurer.
(e)	'Experience rating' means a rating procedure that measures the policyholder's loss experience against the loss experience of policyholders in the same classification in order to produce a premium credit, debit, or unity modification that reflects expected future losses.
(f)	'Insurer' means any person writing coverage under this Part.
(g)	'Loss trending' means any procedure for projecting developed losses to the average date of loss for the period during which the policies are to be effective, including loss ratio trending.
(h)	'Market' means the interaction in this State between buyers and sellers of insurance under this Part.
(i)	'Prospective loss costs' means historical aggregate losses and loss adjustment expenses, including all assessments that are loss-based, projected through development to their ultimate value and through trending to a future point in time, ascertained by accepted actuarial standards.  Prospective loss costs do not include provisions for profit or expenses other than loss adjustment expenses and assessments that are loss-based.
(j)	'Pure premium rate' means that portion of the rate which represents the loss cost per unit of exposure including loss adjustment expense.
(k)	'Rate' or 'rates' shall mean rate of premium, policy and membership fee, or any other charge made by an insurer for or in connection with an insurance policy under this Part prior to application of individual risk variations based on loss or expense considerations.  'Rate' or 'rates' do not include minimum premiums.
(l)	'Statistical plan' means the plan, system, or arrangement used in collecting data.
(m)	'Supplementary rate information' means any manual or plan of rates, statistical plan, classification system, minimum premium, policy fee, rating rule, rate-related underwriting rule, and any other information needed to determine the applicable premium for an individual insured and not otherwise inconsistent with the purposes of this Part, as prescribed by rule of the Commissioner.
(n)	'Supporting information' means the experience and judgment of the filer and the experience or data of other insurers or advisory organizations relied on by the filer, the interpretation of any statistical data relied on by the filer, descriptions of methods used in making the rates and any other similar information required to be filed by the Commissioner.
(o)	'Party in interest' means an insurer, insured, the North Carolina Rate Bureau, and an advisory rating organization.
"§ 58-36-110.  Competitive market; hearing.
(a)	A competitive market is presumed to exist unless the Commissioner, after a hearing, issues an order stating that a reasonable degree of competition does not exist in the market.  The order shall expire no later than one year after issuance.
(b)	(1)	In determining whether a reasonable degree of competition exists, the Commissioner shall consider all of the following factors:
a.	The number of insurers actively engaged in providing coverage.
b.	Market shares and changes in market shares.
c.	Ease of entry.
d.	Market concentration as measured by the Herfindahl-Hirschman Index.
e.	Generally accepted and relevant tests relating to competitive market structure, market performance, and market conduct.
(2)	Notwithstanding subdivision (1) of this subsection, the market is competitive if the market concentration of the 50 largest insurers satisfies the United States Department of Justice's merger guidelines for an unconcentrated market.
(c)	All determinations by the Commissioner shall be supported by written findings of fact and conclusions of law.
"§ 58-36-115.  Rate-making standards.
(a)	Rates shall not be excessive, inadequate, or unfairly discriminatory.
(1)	A rate is not excessive in a competitive market. A rate is not excessive in a noncompetitive market unless it is likely to produce a long-run profit that is unreasonably high in relation to the benefits provided and services rendered.
(2)	A rate is not inadequate unless:
a.	It is unreasonably low, it is clearly insufficient to sustain project losses and expenses, and the use or continued use of the rate by the insurer has had or, if continued, will have the effect of creating a monopoly in the market; or
b.	Funds equal to the full, ultimate cost of anticipated losses and loss adjustment expenses are not produced when prospective loss costs are applied to anticipated payrolls.
(3)	A rate is not unfairly discriminatory unless, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses.  A rate is not unfairly discriminatory because different premiums result for policyholders with different loss exposure or expense levels.
(b)	In determining whether rates comply with subsection (a) of this section, due consideration shall be given to each of the following:
(1)	Past and prospective loss experience within and outside this State, in accordance with accepted actuarial principles.
(2)	Catastrophe hazards and contingencies.
(3)	Past and prospective expenses, within and outside North Carolina.
(4)	Loadings for leveling premium rates over time for dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers.
(5)	A reasonable margin for underwriting profit.
(6)	All other relevant facts within and outside North Carolina.
(c)	The systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of any other insurers or groups of insurers to reflect the requirements of the operating methods of the insurer or group of insurers.
(d)	The rate may contain provisions for contingencies and an allowance permitting a reasonable profit.  In determining the reasonableness of a profit, consideration shall be given to all investment income attributable to premiums and the reserves associated with those premiums.
"§ 58-36-120.  Review by Commissioner.
The Commissioner may investigate and determine whether rates in this State are excessive, inadequate, or unfairly discriminatory under G.S. 58-36-115.
"§ 58-36-125.  Rules not to affect dividends.
The North Carolina Rate Bureau shall not adopt any rule that prohibits or regulates 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 is not a rating plan or system.  It is an unfair trade practice to condition the payment of a dividend or any portion thereof upon renewal of a policy.
"§ 58-36-130. Classification, experience rating, and policy forms.
	(a)	The North Carolina Rate Bureau shall assist the Commissioner in gathering, compiling, and reporting relevant statistical information.  Every insurer shall report its loss and expense experience to the Bureau as set forth in the uniform statistical plan submitted by the Bureau to and approved by the Commissioner.
(b)	Subject to the approval of the Commissioner, the North Carolina Rate Bureau shall develop and file rules reasonably related to the recording and reporting of data pursuant to the uniform statistical plan, uniform experience rating plan, and the uniform classification system.
(c)	Each insurer shall adhere to the uniform classification system and uniform experience rating plan approved under subsection (b) of this section.  An insurer may adhere to the policy forms filed by the North Carolina Rate Bureau.
"§ 58-36-135.  Interchange of rating plan data; consultation; cooperative action in rate making.
(a)	The Commissioner may adopt reasonable rules and plans for the interchange of data necessary for the application of rating plans.
(b)	The provisions of G.S. 58-40-50, 58-40-55, 58-40-60, 58-40-65, 58-40-70, 58-40-80, and 58-40-90 apply to this Part.
"§ 58-36-140.  Filings.
(a)	The North Carolina Rate Bureau shall file all of the following with the Commissioner:
(1)	Workers' compensation rates and rating plans for the voluntary market that are limited to prospective loss costs and final workers' compensation rates and rating plans for the residual market.
(2)	Each workers' compensation policy form to be used by its members.
(3)	The uniform classification plan and rules.
(4)	The uniform experience rating plan and rules.
(5)	Any other information that the Commissioner requests and is otherwise entitled to receive under this Article.
(b)	Each authorized insurer shall file with the Commissioner all rates, supplementary rate information, and any changes and amendments made by it for use in this State as required in G.S. 58-36-145.  An insurer may establish rates and supplementary rate information based upon the facts in G.S. 58-36-115.  An insurer may adopt by reference, with or without deviation, the prospective loss costs filed by the North Carolina Rate Bureau or the rates and supplementary rate information filed by another insurer.
(c)	A policy of insurance issued by an insurer under this Part shall conform to the filing in effect for the insurer.
(d)	The North Carolina Rate Bureau shall not file rates, supplementary rate information, or supporting information on behalf of an insurer.
"§ 58-36-145.  Effective dates of rates.
(a)	Each insurance filing shall become effective on the date specified in the filing, provided that the effective date may not be earlier than 30 days after the date the filing is received by the Commissioner or the date of receipt of the supporting information required by the Commissioner.
(b)	Upon written application of the insurer or the North Carolina Rate Bureau, the Commissioner may authorize a filing, which the Commissioner has reviewed, to become effective before the expiration of the period described in subsection (a)of this section.
(c)	A filing meets the requirements of this Part unless disapproved by the Commissioner within the period provided for pursuant to this section.
(d)	When a filing is not accompanied by the information required under this section, the Commissioner shall inform the filer within 10 days of the initial filing that the filing is incomplete.  A filing is complete when the required information is furnished or when the filer certifies to the Commissioner that the additional information required by the Commissioner is not maintained or cannot be provided.
(e)	Notwithstanding the provisions of this Part, if each rate in a schedule of rates for specific classifications of risks filed by an insurer is not lower than the prospective loss costs contained in the schedule of rates for those classifications filed by the North Carolina Rate Bureau under this Part and approved by the Commissioner, then the schedule of rates filed by the insurer becomes effective upon filing for the purposes of G.S. 58-36-140.
"§ 58-36-150.  Improper rates; hearing.
(a)	If the Commissioner finds that a rate is not in compliance with G.S. 58-36-115, or that a rate has been set in violation of G.S. 58-36-180, the Commissioner shall order that its use be discontinued for any policy issued or renewed after the date of the order and the order may prospectively provide for premium adjustment of any such policy then in force.  The order shall be issued within 30 days after the close of hearing, if one is required by the insurer, or within a reasonable time as fixed by the Commissioner.  The order shall expire one year after its effective date unless rescinded earlier by the Commissioner.
(b)	An order of the Commissioner disapproving a rate under subsection (a) of this section shall take effect no less than 15 days after the order is issued, and the last previous rate in effect for the insurer shall be reimposed for a period of one year unless the Commissioner approves a rate under subsection (d) of this section.
(c)	All determinations made by the Commissioner under this section shall be in accordance with accepted actuarial standards and supported by written findings of fact and conclusions of law.
(d)	Whenever an insurer has no legally effective rates pursuant to subsection (a) of this section, the Commissioner shall, on the insurer's request, specify interim rates for the insurer that are adequate to protect the interests of all parties.  When new rates become legally effective, the Commissioner shall order the reserved funds or any overcharge in the interim rates to be distributed appropriately, except that minimal adjustments may not be required if the new approved rate is higher than the interim rate, and the insurer shall collect the difference from the policyholder.
"§ 58-36-155.  Delay of rates in noncompetitive market.
(a)	A 30-day waiting period may be implemented or extended under the following circumstances:
(1)	After finding that the market is not competitive, under G.S. 58-36-110, the Commissioner may adopt a rule requiring that any subsequent changes in rates or supplementary information be filed with the Commissioner at least 30 days before they become effective.
(2)	The Commissioner may extend the waiting period under this section for a period not exceeding 30 additional days by written notice to the filer before the first 30-day period expires.
(3)	Upon written application by an insurer or the North Carolina Rate Bureau, the Commissioner may authorize a filing, which the Commissioner has reviewed to become effective before the expiration of the period described in subdivision (1) or (2) of this subsection.
(4)	The filing shall be approved or disapproved during the waiting period and if not disapproved before the expiration of the waiting period shall be deemed to meet the requirements of this section.
(b)	If a rule is adopted under subsection (a) of this section, the Commissioner may require the filing of supporting data as to classes of risks or combinations thereof as the Commissioner deems necessary for the proper functioning of the rate monitoring and regulating process.  The supporting data shall include the following:
(1)	The experience and judgment of the filer and, to the extent the filer wishes or the Commissioner requires, the experience and judgment of other insurers of the North Carolina Rate Bureau.
(2)	The filer's interpretation of any statistical data relied upon.
(3)	A description of the actuarial and statistical methods employed in setting the rate.
(4)	Any other relevant matters required by the Commissioner.
(c)	A rule adopted under this section shall expire not more than one year after issuance.  The Commissioner may renew it after hearings and appropriate findings under this section.
(d)	Whenever a filing is not accompanied by the information required by the Commissioner under subsection (b) of this section, the Commissioner shall so inform the insurer within 10 days of the initial filing.  The filing is made when the required information is furnished.
"§ 58-36-160.  Challenge and review of application of rating system.
(a)	The North Carolina Rate Bureau and each insurer subject to this Part which makes its own rates shall provide within this State reasonable means whereby any person aggrieved by the application of a rating system may, upon written request, be heard in person or by the person's authorized representative to review the application of the rating system to the person's insurance.
(b)	Any party affected by the action of the North Carolina Rate Bureau or the insurer may, within 30 days after written notice of that action, make application, in writing, for an appeal to the Commissioner, setting forth the basis for the appeal and the grounds to be relied upon by the applicant.
(c)	The Commissioner shall review the application and, if the Commissioner finds that the application is made in good faith and that it sets forth on its face grounds which reasonably justify holding a hearing, the Commissioner shall conduct a hearing held not less than 10 days after written notice to the applicant and to the North Carolina Rate Bureau or insurer.  The Commissioner, after a hearing, shall affirm or reverse the action of the North Carolina Rate Bureau or insurer.
"§ 58-36-165.  Consent to rate.
Notwithstanding any other provision of this Part, upon the written consent of the insured, filed with the Commissioner, a rate in excess of that determined in accordance with the other provisions of this Part may be used on any specific risk.
"§ 58-36-170.  Acts reducing competition prohibited.
(a)	In this section, the word 'insurer' includes two or more affiliated insurers under (i) common management or (ii) common controlling ownership or under other common effective legal control and in fact engaged in joint or cooperative underwriting, investment management, marketing, servicing or administration of their business and affairs as insurers.
(b)	Neither the North Carolina Rate Bureau nor any insurer may:
(1)	Monopolize or attempt to monopolize, or combine or conspire with any other person or persons, or monopolize the business of insurance of any kind, subdivision or class thereof.
(2)	Agree with any other insurer or the North Carolina Rate Bureau to charge or adhere to any rate or rating plan other than the uniform experience rating plan or rating rule except as needed to comply with the requirements of G.S. 58-36-130.
(3)	Make an agreement with any other insurer, the North Carolina Rate Bureau, or other person to unreasonably restrain trade or substantially lessen competition in the business of insurance of any kind, subdivision, or class.
(4)	Make any agreement with any other insurer or the North Carolina Rate Bureau to refuse to deal with any person in connection with the sale of insurance.
(c)	The fact that two or more insurers, whether or not members or subscribers to the North Carolina Rate Bureau, use consistently or intermittently the same rules, rating plans, rating schedules, rating rules, policy forms, rate classifications, underwriting rules, surveys, inspections, or similar materials is not sufficient in itself to support a finding that an agreement exists.
(d)	The North Carolina Rate Bureau and any member or subscriber thereof may not interfere with the right of an insurer to make its rates independently of the North Carolina Rate Bureau.
(e)	Except as required by G.S. 58-36-130, the North Carolina Rate Bureau may not adopt any rule or exact any agreement or formulate or engage in any program (i) requiring any member, subscriber, or other insurer to utilize some or all of its services or adhere to its rates, rating plan, rating systems, or underwriting rules,  or (ii) prohibiting any member, subscriber, or other insurer from acting independently.
"§ 58-36-175.  Permitted activity.
(a)	The North Carolina Rate Bureau, in addition to other activities not prohibited, is authorized to:
(1)	Develop statistical plans including class definitions;
(2)	Collect statistical data from members, subscribers, or any other source;
(3)	Prepare and distribute pure premium rate data, adjusted for loss development and loss trending, in accordance with its statistical plan.  Such data and adjustments should be in sufficient detail so as to permit insurers to modify such pure premiums based upon their own rating methods or interpretations of underlying data;
(4)	Prepare and distribute manuals of rating rules and rating schedules that do not contain any rules or schedules including final rates without information outside the manuals;
(5)	Distribute information that is filed with the Commissioner and open to the public inspection;
(6)	Conduct research and collect statistics in order to discover, identify, and classify information relating to causes or prevention of losses;
(7)	Prepare and file policy forms and endorsements and consult with members, subscribers, and others relative to their use and application;
(8)	Collect, compile, and distribute past and current prices of individual insurers if such information is made available to the general public;
(9)	Conduct research and collect information to determine the impact of benefit level changes on pure premium rates;
(10)	Prepare and distribute rules and rating values for the uniform experience rating plan; and
(11)	Calculate and disseminate individual risk premium modification factors.
(b)	The Bureau shall provide to the Department of Labor information from the Bureau's records indicating each employer's experience rate modifier and the name and business address of each employer whose workers' compensation coverage is provided through a residual market mechanism established under G.S. 58-36-180.  Information provided to the Department of Labor with respect to experience rate modifiers shall include the name of the employer and the employer's most current intrastate or interstate experience rate modifier. The information provided to the Department under this section shall be confidential and not open for public inspection. The Bureau shall be immune from civil liability for erroneous information released by the Bureau pursuant to this section, provided that the Bureau acted in good faith and without malicious or willful intent to harm in releasing the erroneous information.
"§ 58-36-180.  Residual market mechanisms.
(a)	All insurers authorized to write insurance covered by this Part shall participate in a self-funded mechanism providing for the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods.  Rates for the residual market shall be filed by the North Carolina Rate Bureau and shall be set at levels to provide adequate premiums to pay loss and expenses and to establish appropriate reserves.
(b)	The Commissioner may adopt retrospective rating plans for any employers insured through residual market.
(c)	The Commissioner shall disapprove any filing that does not meet the requirements of G.S. 58-36-115.  A filing shall be deemed to meet such requirements unless disapproved by the Commissioner within 30 days after the filing is made.  In reviewing a filing made pursuant to this section, the Commissioner shall have the same authority and follow the same procedures described in  G.S. 58-36-150, 58-36-155, and 58-36-160.  The North Carolina Rate Bureau shall make and file the plan of operation, rates, rating plans, rules, and policy forms under this section.
"§ 58-36-185.  Appeals from Commissioner.
(a)	Any party in interest who is aggrieved by an order or decision of the Commissioner may, within 30 days after receiving the Commissioner's notice, make written request for a hearing.
(b)	Any order, decision, or act of the Commissioner under this Part is subject to judicial review upon petition of any person aggrieved.  The appeal shall be in accordance with the Administrative Procedures Act."
Sec. 2.  G.S. 58-2-52 reads as rewritten:
"§ 58-2-52.  Appeals and rate-making hearings before the Commissioner.
(a)	The Commissioner may adopt rules for the hearing of appeals by the Commissioner or the Commissioner's designated hearing officer under G.S. 58-36-35, 58-37-65, 58-45-50, 58-46-30, 58-48-40(c)(7), 58-48-42, 58-62-51(c), and G.S. 58-62-92.  These rules may provide for prefiled evidence and testimony of the parties, prehearing statements and conferences, settlement conferences, discovery, subpoenas, sanctions, motions, intervention, consolidation of cases, continuances, rights and responsibilities of parties, witnesses, and evidence.
(b)	Notwithstanding G.S. 150B-38(h), hearing procedures for rate filings made by the North Carolina Rate Bureau shall be governed by the provisions of Part 2 of Article 36 of this Chapter and G.S. 150B-39 through G.S. 150B-41.  The Commissioner may adopt rules for those hearings.
(c)	Appeals under the statutes cited in subsection (a) of this section are not contested cases within the meaning of G.S. 150B-2(2)."
Sec. 3.  G.S. 58-37-35(l) reads as rewritten:
"(l)	The classifications, rules, rates, rating plans and policy forms used on motor vehicle insurance policies reinsured by the Facility may be made by the Facility or by any licensed or statutory rating organization or bureau on its behalf and shall be filed with the Commissioner.  The Board of Governors shall establish a separate subclassification within the Facility for 'clean risks' as herein defined.  For the purpose of this Article, a 'clean risk' shall be any owner of a nonfleet private passenger motor vehicle as defined in G.S. 58-40-10, if the owner, principal operator, and each licensed operator in the owner's household have two years' driving experience as licensed drivers and if none of the persons has been assigned any Safe Driver Incentive Plan points under Part 2 of Article 36 of this Chapter during the three-year period immediately preceding either (i) the date of application for a motor vehicle insurance policy or (ii) the date of preparation of a renewal of a motor vehicle insurance policy.  Such filings may incorporate by reference any other material on file with the Commissioner.  Rates shall be neither excessive, inadequate nor unfairly discriminatory.  If the Commissioner finds, after a hearing, that a rate is either excessive, inadequate or unfairly discriminatory, he shall issue an order specifying in what respect it is deficient and stating when, within a reasonable period thereafter, such rate shall be deemed no longer effective.  Said order is subject to judicial review as set out in Article 2 of this Chapter.  Pending judicial review of said order, the filed classification plan and the filed rates may be used, charged and collected in the same manner as set out in G.S. 58-40-45 of this Chapter.  Said order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in the order.  All rates shall be on an actuarially sound basis and shall be calculated, insofar as is possible, to produce neither a profit nor a loss.  However, the rates made by or on behalf of the Facility with respect to 'clean risks', as defined above, shall not exceed the rates charged 'clean risks' who are not reinsured in the Facility.  The difference between the actual rate charged and the actuarially sound and self-supporting rates for 'clean risks' reinsured in the Facility may be recouped in similar manner as assessments pursuant to G.S. 58-37-40(f) or allocated pursuant to G.S. 58-37-75.  Rates shall not include any factor for underwriting profit on Facility business, but shall provide an allowance for contingencies.  There shall be a strong presumption that the rates and premiums for the business of the Facility are neither unreasonable nor excessive."
Sec. 4.  G.S. 58-38-35 reads as rewritten:
"§ 58-38-35.  Application to policies; dates; duties of the Commissioner.
(a)	The filing requirements of G.S. 58-38-30 apply as follows:
(1)	As described in Part 2 of Article 36 of this Chapter, to all policies of private passenger nonfleet motor vehicle insurance except as excluded by G.S. 58-38-10(b)(7), to all policies of insurance against loss to residential real property with not more than four housing units located in this State and any contents thereof and valuable interest therein, and other insurance coverages written in connection with the sale of such property insurance except as excluded in G.S. 58-38-10(b)(7), that are made, issued, amended, or renewed after March 1, 1981; and
(2)	To all policies of life insurance as described in Article 58 of this Chapter, to all benefit certificates issued by fraternal orders and societies as described in Articles 24 and 25 of this Chapter, to all policies of accident and health insurance as described in Articles 50 through 55 of this Chapter, to all subscribers' contracts of hospital, medical, and dental service corporations as described in Articles 65 and 66 of this Chapter, and to all health maintenance organization evidences of coverage as described in Article 67 of this Chapter, that are made, issued, amended, or renewed after July 1, 1983.
(b)	Repealed by Session Laws 1991, c. 720, s. 6, effective July 16, 1991."
Sec. 5.  G.S. 58-41-10(a) reads as rewritten:
"(a)	Except as otherwise provided, this Article applies to all kinds of insurance authorized by G.S. 58-7-15(4) through (14) and G.S. 58-7-15(18) through (22), and to all insurance companies licensed by the Commissioner to write those kinds of insurance. This Article does not apply to insurance written under Articles 21, 37, 45 or 46 of this Chapter; insurance written under Article 36 of this Chapter, except as provided in G.S. 58-36-100;  insurance written for residential risks in conjunction with insurance written under Article 36 of this Chapter; to marine insurance as defined in G.S. 58-40-15(3); to personal inland marine insurance; to aviation insurance; to policies issued in this State covering risks with multistate locations, except with respect to coverages applicable to locations within this State; to any town or county farmers mutual fire insurance association restricting its operations to not more than six adjacent counties in this State; nor to domestic insurance companies, associations, orders, or fraternal benefit societies doing business in this State on the assessment plan."
Sec. 6.  G.S. 58-44-25 reads as rewritten:
"§ 58-44-25. Optional provisions as to loss or damage from nuclear reaction, nuclear radiation or radioactive contamination.
Insurers issuing the standard fire insurance policy pursuant to G.S. 58-44-15, or any permissible variation thereof, and policies issued pursuant to G.S. 58-44-20 and Part 2 of Article 36 of this Chapter, are hereby authorized to affix thereto or include therein a written statement that the policy does not cover loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination, all whether directly or indirectly resulting from an insured peril under said policy; provided, however, that nothing herein contained shall be construed to prohibit the attachment to any such policy of an endorsement or endorsements specifically assuming coverage for loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination."
Sec. 7.  G.S. 58-45-30(d) reads as rewritten:
"(d)	The Commissioner may designate the kinds of property insurance policies on principal residences to be offered by the association, including insurance policies under Part 2 of Article 36 of this Chapter, and the commission rates to be paid to agents or brokers for these policies, if the Commissioner finds, after a hearing held in accordance with G.S. 58-2-50, that the public interest requires the designation. The provisions of Chapter 150B do not apply to any procedure under this paragraph, except that G.S. 150B-39 and G.S. 150B-41 shall apply to a hearing under this paragraph. Within 30 days after the receipt of notification from the Commissioner of a change in designation pursuant to this paragraph, the association shall submit a revised plan and articles of association for approval in accordance with this section."
Sec. 8.  G.S. 58-46-20(c) reads as rewritten:
"(c)	The Commissioner may designate the kinds of property insurance policies on principal residences to be offered by the association, including insurance policies under Part 2 of Article 36 of this Chapter, and the commission rates to be paid to agents or brokers for these policies, if he finds, after a hearing held in accordance with G.S. 58-2-50, that the public interest requires the designation. The provisions of Chapter 150B do not apply to any procedure under this subsection, except that G.S. 150B-39 and G.S. 150B-41 shall apply to a hearing under this subsection. Within 30 days after the receipt of notification from the Commissioner of a change in designation pursuant to this subsection, the association shall submit a revised plan and articles of association for approval in accordance with subsection (b) of this section."
Sec. 9.  G.S. 58-82-5(a) reads as rewritten:
"(a)	For the purpose of this section, a 'rural fire department' means a bona fide fire department incorporated as a nonprofit corporation which under schedules filed with or approved by the Commissioner of Insurance, is classified as not less than Class '9' in accordance with rating methods, schedules, classifications, underwriting rules, bylaws, or regulations effective or applied with respect to the establishment of rates or premiums used or charged pursuant to Part 2 of Article 36 or Article 40 of this Chapter and which operates fire apparatus of the value of five thousand dollars ($5,000) or more."
Sec. 10.  G.S. 160A-1(8) reads as rewritten:
"(8)	'Rural Fire Department' means, for the purpose of Articles 4A or 14 of this Chapter, a bona fide department which, as determined by the Commissioner of Insurance, is classified as not less than class '9' in accordance with rating methods, schedules, classifications, underwriting rules, bylaws or regulations effective or applied with respect to the establishment of rates or premiums used or charged pursuant to Part 2 of Article 36 or Article 40 of Chapter 58 of the General Statutes, and which operates fire apparatus and equipment of the value of five thousand dollars ($5,000) or more; but it does not include a municipal fire department."
Sec. 11.  G.S. 95-250 reads as rewritten:
"§ 95-250.  Definitions.
The following definitions shall apply in this Article:
(1)	'Experience rate modifier' means a modifier developed under an experience rating plan under G.S. 58-36-130.
(2)	'Worksite' means a single physical location where business is conducted or where operations are performed by employees of an employer.
The definitions of Article 16 of this Chapter shall also apply to this Article, except that 'employee' for the purposes of G.S. 95-252(a), 95-252(c)(1)b., 95-255, and 95-256 means an employee employed for some portion of a working day in each of 20 or more calendar weeks in the current or preceding calendar year."
Sec. 12.  There is appropriated from the Department of Insurance Fund under G.S. 58-6-25 the sum of one hundred thousand dollars ($100,000) for fiscal year 1995-96 and the sum of one hundred thousand dollars ($100,000) for fiscal year 1996-97 to defray the Department's costs in reviewing the filings under and otherwise implementing the provisions of this act.
Sec. 13.  This act becomes effective July 1, 1995, provided that an insurer may continue using approved rates filed by the North Carolina Rate Bureau and approved deviations until the insurer makes its own filing to change its rates, either by making an independent filing or by filing and adopting the Rate Bureau's approved prospective loss costs, or modification thereof.