A BILL TO BE ENTITLED
AN ACT TO AMEND ARTICLE 65 OF CHAPTER 58 OF THE GENERAL STATUTES TO CLARIFY THAT CORPORATIONS SUBJECT TO THIS ARTICLE ARE ALSO SUBJECT TO RISK‑BASED CAPITAL LAWS; TO CLARIFY RATE‑MAKING FACTORS THAT THE COMMISSIONER MAY CONSIDER; AND TO REPEAL PROVISIONS REQUIRING SUCH CORPORATIONS TO ESTABLISH AND MAINTAIN CONTINGENCY RESERVES.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑65‑2 reads as rewritten:
"§ 58‑65‑2.  Other laws applicable to service corporations.
The following sections and Articles of this Chapter are applicable to service corporations that are subject to this Article:
G.S. 58‑2‑125.	Authority over all insurance companies; no exemptions from license.
G.S. 58‑2‑155.	Investigation of charges.
G.S. 58‑2‑160.	Reporting and investigation of insurance and reinsurance fraud and the financial condition of licensees; immunity from liability.
G.S. 58‑2‑162.	Embezzlement by insurance agents, brokers, or administrators.
G.S. 58‑2‑185.	Record of business kept by companies and agents; Commissioner may inspect.
G.S. 58‑2‑190.	Commissioner may require special reports.
G.S. 58‑2‑195.	Commissioner may require records, reports, etc., for agencies, agents, and others.
G.S. 58‑2‑200.	Books and papers required to be exhibited.
G.S. 58‑3‑50.	Companies must do business in own name; emblems, insignias, etc.
G.S. 58‑3‑115.	Twisting with respect to insurance policies; penalties.
G.S. 58‑50‑35.	Notice of nonpayment of premium required before forfeiture.
G.S. 58‑51‑25.	Policy coverage to continue as to mentally retarded or physically handicapped children.
Article 12 of this Chapter."
SECTION 2.  G.S. 58‑65‑95 reads as rewritten:
"§ 58‑65‑95.  Investments and reserves.
(a)	Corporations subject to this Article shall invest in or hold only those assets permitted by Article 7 of this Chapter for life and health insurance companies.
(b)	Every such corporation shall accumulate and maintain, in addition to proper reserves for current administrative liabilities and whatever reserves are deemed to be adequate and proper by the Commissioner for unpaid hospital, medical, or dental bills, and unearned membership dues. 								"
SECTION 3.  G.S. 58‑65‑40 reads as rewritten:
"§ 58‑65‑40.  Supervision of Commissioner of Insurance; form of contract with subscribers; schedule of rates.
No hospital service corporation shall enter into any contract with subscribers unless and until it shall have filed with the Commissioner of Insurance a specimen copy of the contract or certificate and of all applications, riders, and endorsements for use in connection with the issuance or renewal thereof to be formally approved by him as conforming to the section of this Article entitled  "Subscribers' contracts," and conforms to all rules and regulations promulgated by the Commissioner of Insurance under the provisions of this Article and Article 66 of this Chapter. The Commissioner of Insurance shall, within a reasonable time after the filing of any such form, notify the corporation filing the same either of his approval or of his disapproval of such form.
No corporation subject to the provisions of this Article and Article 66 of this Chapter shall enter into any contract with a subscriber after the enactment hereof unless and until it shall have filed with the Commissioner of Insurance a full schedule of rates to be paid by the subscribers to such contracts and shall have obtained the Commissioner's approval thereof. The Commissioner may refuse approval if he finds that such rates are excessive, inadequate, or unfairly discriminatory; or do not exhibit a reasonable relationship to the benefits provided by such contracts. In determining whether or not such rates for a corporation are excessive, inadequate, or unfairly discriminatory, the Commissioner shall consider current and projected surplus levels, underwriting margins, expenses, investment income, and such other supporting data as the Commissioner deems appropriate. At all times such rates and form of subscribers' contracts shall be subject to modification and approval of the Commissioner of Insurance under rules and regulations adopted by the Commissioner, in conformity to this Article and Article 66 of this Chapter."
SECTION 4.  This act is effective when it becomes law.