A BILL TO BE ENTITLED
AN ACT to make various changes in the laws relating to licensing of insurance producers and bail bondsmen; to make changes in the fee structures for agents and adjusters; to authorize the outsourcing of certain functions relating to the administration of continuing education and administrative programs; to amend the law of return premiums under premium finance arrangements; and to make other substantive changes.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑33‑26(g) reads as rewritten:
"(g)	A limited representative may receive qualification for one or more licenses without examination for the following kinds of insurance:
(1)	Dental services.
(2)	Limited line credit insurance.
(3)	Limited lines insurance.
	
(5)	Prearrangement insurance, as defined in G.S. 58‑60‑35(a)(2), when offered or sold by a preneed sales licensee licensed under Article 13D of Chapter 90 of the General Statutes.
(6)	Travel accident and baggage.
(7)	Vehicle service agreements and mechanical breakdown insurance."
SECTION 2. G.S. 58‑33‑26 is amended by adding a new subsection to read:
"(p)  An individual shall not simultaneously hold an agent's and an adjuster's license in this State. An individual who holds a property and liability insurance license may apply for an adjuster license without having to take the adjuster examination in G.S. 58‑33‑30(e) if the individual applies for the adjuster license within 60 days after surrendering the property and liability insurance license. An individual who holds an adjuster license may apply for a property and liability insurance license without having to take the property and liability insurance agent examination in G.S. 58‑33‑30(e) if the individual applies for the property and liability insurance license within 60 days after surrendering the adjuster license."
SECTION 3.  G.S. 58‑33‑10(2) reads as rewritten:
"(2)	"Adjuster" means any individual who, for salary, fee, commission, or other compensation of any nature, investigates or reports to his principal relative to claims arising under insurance contracts other than life or annuity. An attorney at law who adjusts insurance losses from time to time incidental to the practice of his profession or an adjuster of marine losses is not deemed to be an adjuster for purposes of this Article. "
SECTION 4.  G.S. 58‑33‑32(k) reads as rewritten:
"(k)	A producer shall report to the Commissioner any administrative action taken against the producer in another state or by another governmental agency in this State within 30 days after the final disposition of the matter. As used in this subsection, "administrative action" includes enforcement action taken against the producer by the National Association of Securities Dealers. This report shall include a copy of the order or consent order and other information or documents filed in the proceeding necessary to describe the action."
SECTION 5.  G.S. 58‑33‑46(a)(2) reads as rewritten:
"(2)	Violating any insurance  law of this or any other state, violating any administrative rule, subpoena, or order of the Commissioner or of another state's insurance  regulator, or violating any rule of the National Association of Securities Dealers."
SECTION 6.  G.S. 58‑33‑46(a)(6) reads as rewritten:
"(6)	Having been convicted of a  felony, a misdemeanor involving  dishonesty, a breach of  trust, or a misdemeanor involving moral turpitude."
SECTION 7.  G.S. 58‑33‑125 reads as rewritten:
"§ 58‑33‑125.  Fees.
(a)	The following table indicates the annual fees that are required for the respective licenses issued, renewed, or cancelled under this Article and Article 21 of this Chapter: 
	Adjuster	$75.00
	Adjuster, crop hail only	20.00
	Agent appointment cancellation (paid by insurer)	10.00
	Agent appointment, individual	20.00
	Agent appointment, nonindividual	50.00
	Agent appointment, Medicare supplement and
long‑term care, individual	10.00
Agent appointment, Medicare supplement and
long‑term care, nonindividual	20.00
	Agent, overseas military	20.00
	Broker, nonresident	50.00
	Broker, resident	50.00
	Business entity	100.00
	Limited representative	20.00
	Limited representative cancellation (paid by insurer)	10.00
	Motor vehicle damage appraiser	75.00
	
	Surplus lines licensee, corporate	 100.00
	Surplus lines licensee, individual	50.00
These fees are in lieu of any other license fees. Fees paid by an insurer on behalf of a person who is licensed or appointed to represent the insurer shall be paid to the Commissioner on a quarterly or monthly basis, in the discretion of the Commissioner. 
(b)	Whenever a temporary license  is issued  under this Article, the fee shall be at the same rate as provided in subsection (a) of this section; and any amounts so paid for a temporary license may be credited against the fee required for an appointment by the sponsoring company.
(c)	Any person not registered who is required by law or administrative rule to secure a license shall, upon application for registration, pay to the Commissioner a fee of  fifty dollars ($50.00). If additional licensing for other kinds of insurance is requested, a fee of  fifty dollars ($50.00) shall be paid to the Commissioner upon application for registration for each additional kind of insurance.
In addition to the fees prescribed by this subsection, any person applying for a supplemental license to sell Medicare supplement and long‑term care insurance policies shall pay an additional fee of  fifty dollars ($50.00) upon application for registration for those kinds of insurance.
(d)	The requirement for an examination, prelicensing education, continuing education, or a registration fee does not apply to agents for domestic farmers' mutual assessment fire insurance companies or associations who solicit and sell only those kinds of insurance specified in G.S. 58‑7‑75(5)d for such companies or associations.
(e)	 A resident licensee may obtain a duplicate photo‑bearing license at times and places within this State that the Commissioner considers necessary and reasonable to serve the convenience of both the Commissioner and the licensee. The Commissioner may contract directly with persons for processing of duplicate photo‑bearing licenses, and the contract shall not be subject to Article 3 of Chapter 143 of the General Statutes. The Commissioner may charge a reasonable fee for duplicating a photo‑bearing license in an amount that offsets the costs to the Department of duplicating the license, including costs associated with any contract entered into pursuant to this subsection. 
	
(g)	All fees prescribed by this section are nonrefundable."
SECTION 8.  G.S. 58‑33‑130 reads as rewritten:
"§ 58‑33‑130.  Continuing education program for licensees.
(a)	The Commissioner may adopt rules to provide for a program of continuing education requirements for the purpose of enhancing the professional competence and professional responsibility of adjusters and motor vehicle damage appraisers. The rules may include criteria for:
(1)	The content of continuing education courses;
(2)	Accreditation of continuing education sponsors and programs;
(3)	Accreditation of videotape or other audiovisual programs;
(4)	Computation of credit;
(5)	Special cases and exemptions;
(6)	General compliance procedures; and
(7)	Sanctions for noncompliance.
The Commissioner may contract directly with persons for the administration of the program provided for by this section, and those contracts shall not be subject to Article 3 of Chapter 143 of the General Statutes. The Commissioner may charge a reasonable fee to course providers to offset the cost of the program, including costs associated with  contracts authorized by this subsection. The fee authorized by this subsection shall be in addition to the fees specified in G.S. 58‑33‑133. As used in this section and in G.S. 58‑33‑132, "administrator" means any person with whom the Commissioner has contracted under this subsection.
(b)	The Commissioner may adopt rules to provide for the continuing professional education of all agents and brokers, including fraternal field marketers, but excluding limited representatives. In adopting the rules, the Commissioner may use the same criteria as specified in subsection (a) of this section and shall provide that agents holding more than one license under G.S. 58‑33‑25(c) are required to complete no more than 18 credit hours per year.
(c)	The license of any person who fails to comply with the continuing education requirements under this section shall  lapse except that the Commissioner or administrator may either grant an extension of time for good cause shown or charge an administrative fee of seventy‑five dollars ($75.00), or both, in lieu of having the person's license lapse.
(d)	Annual continuing professional education hour requirements shall be determined by the Commissioner, but shall not be more than 12 credit hours.
(e)	No more than seventy‑five percent (75%) of the requirement relating to life or health insurance agents or brokers may be met by taking courses offered by licensed life or health insurance companies with which those agents or brokers have appointments.
(f)	Repealed by Session Laws 1993 (Reg. Sess., 1994), c. 678, s. 18, effective July 5, 1994.
(g)	The Commissioner or administrator shall permit any licensee to carry over to a subsequent calendar year up to seventy‑five percent (75%) of the required annual hours of continuing professional education.
(h)	Any licensee who, after obtaining an extension under subsection (c) of this section, offers evidence satisfactory to the Commissioner or administrator that the licensee has satisfactorily completed the required continuing professional education courses is in compliance with this section.
(i)	The Commissioner or administrator is authorized to approve continuing professional education courses.
(j)	Repealed by Session Laws 2002‑144, s. 3, as amended by Session Laws 2003‑284, s. 22.2, and as amended by Session Laws 2004‑124, s. 21.1, effective July 1, 2002.
(k)	Repealed by Session Laws 1993, c. 409, s. 4, effective July 1, 1993."
SECTION 9.  G.S. 58‑33‑132 reads as rewritten:
"§ 58‑33‑132.  Qualifications of instructors.
(a)	The Commissioner may adopt rules to establish requisite qualifications for and issuance, renewal, summary suspension, and termination of provider, presenter, and instructor authority for prelicensing and continuing insurance education courses. During any suspension, the instructor shall not engage in any instruction of prelicensing or continuing insurance education courses prior to an administrative review. No person shall provide, present, or instruct any course unless that person has been qualified and possesses a license from the  Commissioner or administrator.
(b)	The Commissioner or administrator may summarily suspend or terminate the authority of an instructor, course provider, or presenter if the course presentation:
(1)	Is determined to be inaccurate; or
(2)	Receives an evaluation of poor from any Department monitor and a majority of attendees responding to Department questionnaires about the presentation."
SECTION 10.  G.S. 58‑33‑133 reads as rewritten:
"§ 58‑33‑133.  Continuing education course provider fees.
(a)	Each course provider shall  pay to the Commissioner a fee of  two dollars ($2.00) per approved credit hour per individual who successfully completes a course under G.S. 58‑33‑130.
(b)	At the time a course provider submits an application to the Commissioner for approval of a course under G.S. 58‑33‑130, the provider shall pay to the Commissioner a filing fee of one hundred dollars ($100.00) per course up to a two thousand five hundred dollars ($2,500) per calendar year maximum.
(b1)	Licensees who are required to comply with G.S. 58‑33‑130 shall pay to the Commissioner a fee of two dollars ($2.00) per credit hour earned. These fees also apply to national designation courses and other courses approved by the Commissioner from other State or federal programs.
(c)	Fees collected by the Commissioner under this section and under G.S. 58‑33‑130 shall be credited to the Insurance Regulatory Fund created under  G.S. 58‑6‑25 for the purpose of offsetting the cost of administering the program authorized by G.S. 58‑33‑130."
SECTION 11.  G.S. 58‑71‑40(d) reads as rewritten:
"(d)	When a license is issued under this section, the Commissioner shall issue a picture identification card, of design, size, and content approved by the Commissioner, to the licensee. Each licensee must carry this card at all times when working in the scope of the licensee's employment. A licensee whose license terminates or is terminated shall surrender the identification card to the Commissioner within 10 working days after the termination. The Commissioner may contract directly with persons for the processing and issuance of picture identification cards required by this section and may charge a reasonable fee in addition to the license fee charged under G.S. 58‑71‑55 in an amount that offsets the cost of the service, including the costs associated with the contract authorized by this subsection. Contracts entered into pursuant to this subsection shall not be subject to Article 3 of Chapter 143 of the General Statutes."
SECTION 12.  G.S. 58‑71‑115 reads as rewritten:
"§ 58‑71‑115.  Insurers to annually report surety bondsmen; notices of appointments and terminations; information confidential.
(a)	Before July 1 of each year, every insurer shall furnish the Commissioner a list of all surety bondsmen appointed by the insurer to write bail bonds on the insurer's behalf. An insurer who appoints a surety bondsman in the State on or after July 1 of each year  shall notify the Commissioner of the appointment. All appointments are subject to the issuance of the proper license to the appointee under this Article.
(b)	An insurer terminating the appointment of a surety bondsman shall file a written notice of the termination with the Commissioner, together with a statement that the insurer has given or mailed notice of the termination to the surety  bondsman. The notice to the Commissioner shall state the reasons, if any, for the termination. Information furnished in the notice to the Commissioner shall be privileged and shall not be used as evidence in or basis for any action against the insurer or any of its representatives."
SECTION 13.  G.S. 58‑71‑141 reads as rewritten:
"§ 58‑71‑141.  Appointment of bail bondsmen; affidavit required.
(a)	 Before receiving an appointment, a surety bondsman shall submit to the Commissioner an affidavit, signed under oath, by the surety bondsman and by any former insurer, stating that the surety bondsman does not owe any premium or unsatisfied judgment to any insurer and that the bondsman agrees to discharge all outstanding forfeitures and judgments on bonds previously written. The affidavit shall be in a form prescribed by the  Commissioner and shall be submitted by the surety bondsman to the former insurer. If the surety bondsman does not satisfy or discharge all forfeitures or judgments, the former insurer shall submit a notice, with supporting documents, to the appointing insurer, the surety bondsman, and the Commissioner, which states, under oath, that the surety bondsman has failed to satisfy, in a timely manner, the forfeitures and judgments on bonds written by the surety bondsman and that the former insurer has satisfied the forfeiture or judgment from its own funds. The former insurer shall submit the notice and supporting documents to the appointing insurer, the surety bondsman, and the Commissioner within 30 days after the former insurer receives the affidavit from the surety bondsman. Upon receipt of the  notice and supporting documents, the appointing insurer shall immediately cancel the surety bondsman's appointment. The surety bondsman may be reappointed only upon certification by the former insurer that all forfeitures and judgments on bonds written by the surety bondsman have been discharged. The appointing insurer or surety bondsman may, within 10 days  after receiving the notice and supporting documents from the former insurer, appeal to the Commissioner.
(b)	The Commissioner shall adopt rules, including rules regarding the procedures for appeals and stays of the requirements of this section, to implement this section.
(c)	As used in this section, "former insurer" means the insurer with whom the surety bondsman had a prior appointment and who is responsible for any outstanding bonds written by the surety bondsman."
SECTION 14.  G.S. 58‑71‑165 reads as rewritten:
"§ 58‑71‑165.  Monthly report required.
(a)	Each professional bail bondsman  shall file with the Commissioner a written report in form prescribed by the Commissioner regarding all bail bonds on which the bondsman is liable as of the first day of each month showing (i) each individual bonded, (ii) the date the bond was given, (iii) the principal sum of the bond, (iv) the State or local official to whom given, and (v) the fee charged for the bonding service in each instance.
(b)	Each insurer that appoints surety bondsmen in this State shall file with the Commissioner a written report in a form adopted by the Commissioner regarding all bail bonds on which the insurer is liable as of the first day of each month showing the total dollar amount for which the insurer is liable.
(c)	The  reports required by subsections (a) and (b) of this section shall be filed on or before the fifteenth day of each month.
(d)	Any person who knowingly and willfully falsifies a report required by this section is guilty of a Class I felony."
SECTION 15.  G.S. 58‑2‑69 reads as rewritten:
"§ 58‑2‑69.  Notification of criminal convictions and changes of address; service of  notice; contracts for online services, administrative services, or regulatory data systems.
(a)	As used in this section:
(1)	"License" includes any license, certificate, registration, or permit issued under this Chapter.
(2)	"Licensee" means any person who holds a license.
(b)	Every applicant for a license shall inform the Commissioner of the applicant's residential address. Every licensee shall give written notification to the Commissioner of any change of the licensee's residential address within 10 business days after the licensee moves into the licensee's new residence. This requirement applies if the change of residential address is by governmental action and there has been no actual change of residence location; in which case the licensee  shall notify the Commissioner within 10 business days after the effective date of the change. A violation of this subsection is not a ground for revocation, suspension, or nonrenewal of the license or for the imposition of any other penalty by the  Commissioner though a licensee who violates this subsection shall pay an administrative fee of seventy‑five dollars ($75.00) to the Commissioner.
(c)	If a licensee is convicted in any court of competent jurisdiction for any crime or offense other than a motor vehicle infraction, the licensee shall notify the Commissioner in writing of the conviction within 10 days after the date of the conviction. As used in this subsection, "conviction" includes an adjudication of guilt, a plea of guilty, or a plea of nolo contendere.
(d)	Notwithstanding any other provision of law, whenever the Commissioner is authorized or required to give any notice under this Chapter to a licensee, the notice may be given personally or by sending the notice by first‑class mail to the licensee at the address that the licensee has provided to the Commissioner under subsection (b) of this section.
(e)	The giving of notice by mail under subsection (d) of this section is complete upon the expiration of four days after the deposit of the notice in the post office. Proof of the giving of notice by mail may be made by the certificate of any employee of the Department.
(f)	Notification by licensees under subsection (b) of this section may be accomplished by submitting written notification directly to the Commissioner or by using any online services approved by the Commissioner for this purpose.
(g)	The Commissioner may contract with the NAIC or other persons for the provision of online services to licensees, for the provision of administrative services to licensees, or for the provision of regulatory data systems to the Commissioner. The NAIC or other person with whom the Commissioner contracts may charge licensees a reasonable fee for the costs associated with the licensees' use of online services and administrative services. The fee shall be agreed to by the Commissioner and the other contracting party and shall be stated in the contract. Contracts for the provision of online services, contracts for the provision of administrative services, and contracts for the provision of regulatory data systems shall not be subject to Article 3, 3C, or 8 of Chapter 143 of the General Statutes or to Article 3D of Chapter 147 of the General Statutes."
SECTION 16.  G.S.  58‑35‑85(5) reads as rewritten:
"(5)	When an insurance contract is cancelled in accordance with this section, the insurer shall promptly return the gross unearned premiums that are due under the contract to the insurance premium finance company effecting the cancellation, for the benefit of the insured or insureds, no later than 30 days after the effective date of cancellation. When the return premium is more than the amount the insured owes the insurance premium finance company under the agreement, the excess shall be promptly remitted to the order of the insured, as provided in subdivision (8) of this section, subject to the minimum service charge provided for in this Article. If a premium is subject to an audit to determine the final premium amount, the amount to be refunded to the premium finance company shall be calculated upon the deposit premium, and the insurer shall return that amount to the premium finance company no later than 90 days after the effective date of cancellation. All return premiums shall be calculated on a pro rata basis. However, where the insurance contract to be cancelled is subject to minimum premium and the contractual amount is minimum premium, the minimum premium is determined to be earned when written, and there shall be no return premium upon early cancellation. Where the insurance contract to be cancelled is subject to minimum premium and the contractual amount is in excess of the minimum premium, the return premium shall be based only upon the portion of the contract amount in excess of minimum premium and shall be calculated on a pro rata basis. This subdivision does not limit any other remedies the insurer may have against the insured for additional premiums."
SECTION 17. Article 36 of Chapter 58 of the General Statutes is amended by adding a new section to read:
"§ 58‑36‑86. Policy cancellation by insured; premium refund.
When a policy subject to this Article is cancelled by the insured, all return premiums shall be calculated on a pro rata basis. However, where the insurance contract to be cancelled is subject to minimum premium and the contractual amount is minimum premium, the minimum premium is determined to be earned when written, and there shall be no return premium upon early cancellation. Where the insurance contract to be cancelled is subject to minimum premium and the contractual amount is in excess of the minimum premium, the return premium shall be based only upon the portion of the contract amount in excess of minimum premium and shall be calculated on a pro rata basis."
SECTION 18. Article 40 of Chapter 58 of the General Statutes is amended by adding a new section to read:
"§ 58‑40‑145. Policy cancellation by insured; premium refund.
When a policy subject to this Article is cancelled by the insured, all return premiums shall be calculated on a pro rata basis. However, where the insurance contract to be cancelled is subject to minimum premium and the contractual amount is minimum premium, the minimum premium is determined to be earned when written, and there shall be no return premium upon early cancellation. Where the insurance contract to be cancelled is subject to minimum premium and the contractual amount is in excess of the minimum premium, the return premium shall be based only upon the portion of the contract amount in excess of minimum premium and shall be calculated on a pro rata basis."
SECTION 19. Article 41 of Chapter 58 of the General Statutes is amended by adding a new section to read:
"§ 58‑41‑16. Policy cancellation by insured; premium refund.
When a policy subject to this Article is cancelled by the insured, all return premiums shall be calculated on a pro rata basis. However, where the insurance contract to be cancelled is subject to minimum premium and the contractual amount is minimum premium, the minimum premium is determined to be earned when written, and there shall be no return premium upon early cancellation. Where the insurance contract to be cancelled is subject to minimum premium and the contractual amount is in excess of the minimum premium, the return premium shall be based only upon the portion of the contract amount in excess of minimum premium and shall be calculated on a pro rata basis."
SECTION 20.  This act becomes effective January 1, 2008, and applies to fees or charges due, and actions occurring, on or after that date.