A BILL TO BE ENTITLED
AN ACT to modernize the Surplus Lines Act by including alien insurers in the definition of an eligible surplus lines insurer, by repealing countersigning requirements, and by providing greater flexibility for the manner of collection and refund of the Surplus Lines tax.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑21‑10(3) reads as rewritten:
"(3)	"Eligible surplus lines insurer" means an alien insurer as defined in G.S. 58‑21‑17 or a nonadmitted insurer with which a surplus lines licensee may place surplus lines insurance under G.S. 58‑21‑20."
SECTION 2.  G.S. 58‑21‑40 reads as rewritten:
"§ 58‑21‑40.  Surplus lines regulatory support organization.
(a)	A surplus lines regulatory support organization of surplus lines licensees shall be formed to:
(1)	Facilitate and encourage compliance by resident and nonresident surplus lines licensees with the laws of this State and the rules and regulations of the Commissioner relative to surplus lines insurance;
(2)	Communicate with organizations of admitted insurers with respect to the proper use of the surplus lines market;
(3)	Receive and disseminate to surplus lines licensees information about surplus lines insurance, including, without limitation, new electronic filing procedures approved by the Commissioner, changes in the list of eligible surplus lines insurers, and modifications in coverages, procedures, and requirements as may be requested by the Commissioner; and
(4)	Establish a stamping office to process all surplus lines insurance and remit premium taxes for those coverages under G.S. 58‑21‑85 by means satisfactory to the Commissioner, and charge surplus lines licensees a fee for such processing.
(b)	The regulatory support organization shall file with the Commissioner:
(1)	A copy of its constitution, articles of agreement or association, or certificate of incorporation;
(2)	A copy of its bylaws and rules governing its activities;
(3)	An annually updated list of resident and nonresident licensees;
(4)	The name and address of a resident of this State upon whom notices or orders of the Commissioner or processes issued at his direction may be served; and
(5)	An agreement that the Commissioner may examine the regulatory support organization in accordance with subsection (c) of this section.
(c)	The Commissioner may, at times deemed appropriate, make or cause to be made an examination of each regulatory support organization; in which case the provisions of G.S. 58‑2‑131, 58‑2‑132, 58‑2‑133, 58‑2‑134, 58‑2‑150, 58‑2‑155, 58‑2‑180, 58‑2‑185, 58‑2‑190, 58‑2‑195, and 58‑2‑200 shall apply. If the Commissioner finds the regulatory support organization or any surplus lines licensee, whether resident or nonresident, to be in violation of this Article, the Commissioner may issue an order requiring the discontinuance of the violation.
(d)	Each resident surplus lines licensee shall maintain active membership in a regulatory support organization as a condition of continued licensure under this Article."
SECTION 3.  G.S. 58‑21‑70 reads as rewritten:
"§ 58‑21‑70.  Surplus lines licensees may accept business from other agents or brokers; countersignatures required; remittance of premium tax.
(a)	A surplus lines licensee may originate surplus lines insurance or accept such insurance from any other duly licensed agent or broker, and the surplus lines licensee may compensate such agent or broker therefor.
	
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SECTION 4.  G.S. 58‑21‑85 reads as rewritten:
"§ 58‑21‑85.  Surplus lines tax.
(a)	Gross premiums charged, less any return premiums, for surplus lines insurance on insureds for whom North Carolina is the home state are subject to a premium receipts tax of five percent (5%), which shall be collected in a manner approved by the Commissioner, in addition to the full amount of the gross premium charged by the insurer for the insurance. The tax on any portion of the premium unearned at termination of insurance having been credited by the State to the licensee shall be returned to the policyholder directly. The surplus lines licensee is prohibited from absorbing such tax and from rebating for any reason, any part of such tax. To the extent that other states in which portions of the properties, risks, or exposures reside have failed to enter into a compact or reciprocal allocation procedure with this State, the premium tax collected shall be retained by this State.
	
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SECTION 5.  This act is effective when it becomes law.