A BILL TO BE ENTITLED
AN ACT to provide for competitive selection of certain supplemental insurance products for retired state employees.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 31 of Chapter 58 of the General Statutes is amended by adding a new section to read:
"§ 58-31-61. Competitive selection of retirement benefit payment deduction supplemental insurance products paid for by retired State employees.
(a)	Duties of the Board of Trustees. – The Board of Trustees of the Teachers' and State Employees' Retirement System shall:
(1)	Review insurance products currently offered through retirement benefit payment deduction to retired State employees to determine if those products meet the needs and desires of the retired employees.
(2)	Select the types of insurance products that reflect the needs and desires of retired State employees.
(3)	Competitively select the best insurance products of the types determined by the Department of State Treasurer and the Board of Trustees to reflect the needs and desires of the retired employees.
As used in this section, "insurance product" includes a prepaid legal services plan registered under G.S. 84-23.1.
(b)	Conflicts of Interest. – The Board of Trustees shall be autonomous in its selection of insurance products and insurance companies and no member of the Board of Trustees having a conflict of interest in the selection of insurance products or insurance companies shall participate in the discussion or selection of the insurance products or insurance companies. Any decision rendered pursuant to this section by the Board of Trustees where the autonomy of the Board of Trustees or a conflict of interest is questioned shall be subject to appeal to the State Treasurer's Office pursuant to the Administrative Procedure Act.
(c)	Retirement Benefit Payment Deduction Slots. – The company or companies selected by the Board of Trustees shall be permitted to sell through retirement benefit payment deduction only the products specifically approved by the  Board of Trustees. The assignment by the Board of Trustees of a retirement benefit payment deduction slot shall be for a period of not less than two years unless the insurance company shall be in violation of the terms of the written agreement specified in this subsection. The insurance company awarded a retirement benefit payment deduction slot shall, pursuant to a written agreement setting out the rights and duties of the insurance company, be afforded an adequate opportunity to solicit retired State employees by making such retired employees aware that a representative of the company will be available at a specified time and at a location convenient to the retired employees.
Notwithstanding any other provision of the General Statutes, once a retired employee has selected an insurance product for retirement benefit payment deduction, that product may not be removed from retirement benefit payment deduction for that employee without his or her specific written consent.
When retirement benefit payment deduction is no longer available, the insurance company may not terminate life insurance products purchased under the retirement benefit payment deduction plan without the retiree's specific written consent solely because the premium is no longer deducted from retirement benefit payments.
(d)	Procedure for Selection of Insurance Product Proposals. – All insurance product proposals shall be sealed. The Board of Trustees shall open all proposals in public and record them in the minutes of the Board of Trustees, at which time the proposals become public records open to public inspection.
After the public opening, the Board of Trustees shall review the proposals, examining the cost and quality of the products, the reputation and capabilities of the insurance companies submitting the proposals, and other appropriate criteria. The Board of Trustees shall determine which proposal, if any, would meet the needs and desires of the retired employees and shall award a retirement benefit payment deduction slot to the company submitting the proposal that meets those needs and desires. The Board of Trustees may reject any or all proposals.
A company may seek to modify or withdraw a proposal only after the public opening and only on the basis that the proposal contains an unintentional clerical error as opposed to an error in judgment. A company seeking to modify or withdraw a proposal shall submit to the Board of Trustees a written request, with facts and evidence in support of its position, prior to the award of the retirement benefit payment deduction slot, but not later than two days after the public opening of the proposals. The Board of Trustees shall promptly review the request, examine the nature of the error, and determine whether to permit or deny the request.
(e)	Committee of the Board. – The Board may designate a committee consisting of not less than five members of the Board to carry out the duties of the full Board set forth in this section. If a committee is designated to carry out the full Board's duties, it shall comply with all the provisions of this section and its determination on the award of retirement benefit payment deduction slots to companies submitting proposals shall constitute a recommendation to the full Board rather than a final decision on the award. The full Board shall either adopt or reject each of the recommendations offered by the committee. Board adoption of a recommendation of the committee constitutes an award of a retirement benefit payment deduction slot for purposes of this section.
(f)	Criminal Penalty. – It shall be a Class 3 misdemeanor for any member of the  Board of Trustees having a conflict of interest in the selection of insurance products or insurance companies to attempt to influence the Board of Trustees in the selection of insurance products or insurance companies knowing or having reason to know that the member has a conflict of interest in the selection of insurance products or insurance companies, or for anyone to open a sealed insurance product proposal or disclose or exhibit the contents of a sealed insurance product proposal, prior to the public opening of the proposal. The Commissioner of Insurance shall have the authority to investigate complaints alleging acts subject to the criminal penalty and shall report the Commissioner's findings to the Attorney General of North Carolina.
(g)	The Department of State Treasurer may employ clerical and professional staff and such other assistance as may be necessary to assist the Department of State Treasurer in carrying out its duties and responsibilities under this section. The administrative costs to the Department of State Treasurer of carrying out its duties and responsibilities under this section may be charged to participants or deducted from participants' accounts in accordance with nondiscriminatory procedures established by the Department of State Treasurer."
SECTION 2.  This act becomes effective January 1, 2004.