SUBCHAPTER 11C ‑ ANALYSIS AND EXAMINATIONS
SECTION .0100 ‑ GENERAL PROVISIONS
11 NCAC 11C .0101 GENERAL PROVISIONS
History Note: Authority G.S. 58‑9;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. July 1, 1988.
11 NCAC 11C .0102 FORM OF REPORT
ON EXAMINATION
The reports on examination prepared by the department as a
result of a triennial examination, special examination or any other type
examination of an insurance company licensed to do business in North Carolina
will be in the form adopted and prescribed by the National Association of
Insurance Commissioners to the extent possible, but subject to the discretion
of the Commissioner of Insurance as deemed appropriate under the circumstances
of an examination.
History Note: Authority G.S. 58-2-40; 58-2-131;
58-2-140; 58-65-105;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978.
11 NCAC 11C .0103 REPRODUCTION OF REPORTS ON EXAMINATION
Reports on examination shall be reproduced by the company in
sufficient quantity to accommodate the Department's needs, as well as the needs
of the company. The report shall be reproduced within 45 days from the date
the report on examination becomes a public document; such report to be void of
any type of advertisements.
History Note: Authority G.S. 58‑2‑40; 58‑2‑131;
58‑65‑105;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Amended Eff. April 1, 1993.
11 NCAC 11C .0104 RECORD OF BUSINESS TO BE KEPT BY
COMPANY
Every insurance company licensed to transact business in the
State of North Carolina must make and keep a full and correct record of the
business done by it including, the policy number, date of issue, term, amount
insured, premiums, full name and complete address of policyholder and other
pertinent information as may be required by the Commissioner of Insurance.
History Note: Authority G.S. 58-2-40; 58-2-185;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978.
11 NCAC 11C .0105 RETENTION OF RECORDS OF DOMESTIC
INSURANCE COMPANIES
(a) All records of domestic insurance companies shall be
maintained by the company for the years for which a statutory examination has
not yet been completed. All books of original entry and corporate records
shall be retained by the company or its successor for a period of 25 years
after the company ceases to exist.
(b) Any claim file wherein a minor is involved shall be
maintained until that minor has attained the age of majority for third‑party
liability coverage. All tax and tax related questions or litigation shall be
resolved or finally adjudicated before the destruction of any records related
thereto.
(c) All records that are required to be maintained by this
Rule shall be either original or duplicate records, as defined in this Rule.
(d) For the purpose of this Rule, an "original
record" is the writing or recording itself or any counterpart intended to
have the same effect by a person executing or issuing it. An
"original" of a photograph includes the negative or any print
therefrom. If data are, in the normal and ordinary course of business, stored
in a computer or similar device, any printout or other output readable by
sight, shown to reflect the data accurately, is an "original record".
(e) For the purpose of this Rule, a "duplicate
record" is a counterpart produced by the same impression as the original
record, or from the same matrix, or by mechanical or electronic re‑recording
or by chemical reproduction, or by equivalent techniques, such as imaging or
image processing, that accurately reproduce the original record.
(f) If only duplicate records are maintained, the following
requirements must be met:
(1) The data must be easily accessible to the
Department in readable form; and readable, reproduced copies must be
obtainable;
(2) Before the destruction of any original
records, the company in possession of the original records shall:
(A) Verify that the records stored consist of all
information contained in the original records and that the original records can
be reconstructed therefrom in a form acceptable to the Department; and
(B) Implement disaster preparedness or disaster recovery
procedures that include provisions for the maintenance of duplicate records at
another location; and
(3) Adequate controls must be established with
respect to the transfer and maintenance of data.
(g) Every foreign insurer licensed in North Carolina shall
be in substantial compliance with this Rule.
History Note: Authority G.S. 58‑2‑40(1); 58‑2‑50;
58‑2‑131; 58‑2‑132; 58‑2‑133; 58‑2‑145;
58‑2‑155; 58‑19‑35;
58‑20‑30; 58‑22‑20(6); 58‑23‑25;
58‑24‑135; 58‑27‑10; 58‑39‑70; 58‑48‑65;
58‑49‑55; 58‑62‑66;
58‑63‑20; 58‑64‑55; 58‑65‑105;
58‑67‑100;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Amended Eff. September 1, 1993; March 1, 1993.
11 NCAC 11C .0106 UNEARNED PREMIUM RESERVE: IN FORCE
PREMIUMS
History Note: Authority G.S. 58‑35;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. March 1, 1993.
11 NCAC 11C .0107 REINSURANCE: WHEN PERMITTED
History Note: Authority G.S. 58‑59.3;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. April 1, 1993.
11 NCAC 11C .0108 DIVIDENDS TO POLICYHOLDERS: DEPARTMENT
INTERPRETATION
11 NCAC 11C .0109 DIVIDENDS TO STOCKHOLDERS: DEPARTMENT
INTERPRETATION
History Note: Authority G.S. 58‑2‑40; 58‑7‑130;
58‑8‑25;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Amended Eff. April 1, 1993;
Repealed Eff. August 1, 1998.
11 NCAC 11C .0110 INVESTMENT IN GOLD OR GOLD FUTURES BY
INSURANCE COMPANIES
History Note: Authority G.S. 58-9(I); 58-79; 58-79.1;
Eff. February 1, 1976;
Repealed Eff. March 1, 2004.
11 NCAC 11C .0111 INVESTMENT IN THE INTERNATIONAL BANK
FOR RECONST AND DEV
History Note: Authority G.S. 58‑9(1); 58‑79;
58‑79.1;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. April 1, 1993.
11 NCAC 11C .0112 MODEL CUSTODIAL AGREEMENT
History Note: Authority G.S. 58‑79; 58‑79.1;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. April 1, 1996.
11 NCAC 11C .0113 MODEL CUSTODIAL AND FISCAL AGENCY
AGREEMENT
History Note: Authority G.S. 58‑79; 58‑79.1;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. February 1, 1996.
11 NCAC 11C .0114 CERTIFICATES OF CONTRIBUTION
Every domestic insurance company may, upon petition to the
Commissioner and upon receipt of his approval thereof, issue certificates of
contribution of surplus for the reasons and purposes set forth in the petition
to the Commissioner.
Approval of the issuance of certificates of contributions
may be granted only upon the following conditions and will be effective only as
to transactions performed in conformity therewith:
(1) No certificate evidencing the contribution under
authorization hereof shall be issued except substantially in the form and text
as may be approved by the Commissioner.
(2) No commission, selling or other expense is to be
paid or incurred in respect to any transaction authorized, except that regular
salaried employees of the petitioner may perform any and all acts necessary,
convenient or advisable in connection with the transactions authorized, fees
may be paid for legal counsel, accounting and related services, and petitioner
may incur and pay other normal expense incurred in connection with the issuance
of the certificates of contribution.
(3) No advertisement, prospectus, or other writing
relating to the certificates of contribution, except regular business
correspondence relating to specific problems peculiar to the parties thereto,
shall be issued, circulated or published until after the same has been filed
with and authorized in writing by the Commissioner.
(4) At any time upon the request of the Commissioner
and in any event within 30 days from and after the issuance of any certificate
of contribution and after the completion of the transactions authorized,
petitioner shall make and file with said commissioner its verified report
setting forth the transactions accomplished pursuant to the authority granted,
and setting forth the date of issuance of the certificate of contribution, the
proceeds derived therefrom and the disposition of such proceeds, and petitioner
shall attach to such report a conformed copy of the contribution certificates
issued pursuant to said authorization.
(5) In any financial statement required by law to be
filed by petitioner with the Commissioner, or which may be published or
distributed by petitioner, the principal sum of and accrued interest of these
and any other outstanding certificates of contribution, which has not become a
liability in accordance with the terms thereof and is not reported in such
financial statement as a liability, shall be reported according to the
instructions for completing the appropriate NAIC financial statement blank.
Such amount shall be reported on the appropriate line on page 3 of the
financial statement as "certificates of contribution". Other
descriptions, such as "debentures", "surplus notes", "guaranty
fund", or "guaranteed certificates", are deemed misleading and
are not permitted.
(6) The Commissioner may, from time to time, for cause
amend, continue or alter his approval or temporarily suspend the rights of the
petitioner hereunder or may revoke this authority.
(7) Unless revoked, suspended, or amended or continued
upon due petition therefor filed before the expiration date hereof the
authority granted hereunder is valid for a period of five years and such
authority shall automatically terminate on the close of business on the last
day of the month in which this authority was originally granted.
Certificates of contribution issued hereunder are not to be
construed as guaranty fund certificates as specifically provided for under G.S.
58‑12‑1 and 58‑8‑20.
History Note: Authority G.S. 58‑2‑40; 58‑7‑163;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Amended Eff. April 1, 1993.
11 NCAC 11C .0115 VALUATION OF BONDS AND OTHER EVIDENCES
OF DEBT
11 NCAC 11C .0116 AMORTIZED VALUES OF BONDS OR OTHER
EVIDENCES OF DEBT
History Note: Authority G.S. 58‑80;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. April 1, 1993.
11 NCAC 11C .0117 CONFLICT OF INTEREST STATEMENTS MUST
BE EXECUTED ANNUALLY
Conflict of interest statements shall be executed annually
by the officers, directors, trustees, attorneys‑in‑fact, and
administrative personnel of every domestic insurer subject to G.S. 58, Articles
1 through 67.
Any conflicts of interest disclosed thereon shall be
presented to the board of directors or trustees of the company for a
determination of its acceptability or the remedial disposition thereof.
History Note: Authority G.S. 58‑2‑40;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Amended Eff. April 1, 1993.
11 NCAC 11C .0118 COLLECTION PROCEDURES FOR EXAMINATION
EXPENSE
History Note: Authority G.S. 58‑2‑40; 58‑2‑133(c);
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Amended Eff. April 1, 1993; January 14, 1980;
Repealed Eff. February 1, 1996.
11 NCAC 11C .0119 MORTGAGE LOANS TO BE SOLD WITHOUT
RECOURSE
First mortgage loans on unencumbered fee simple real estate,
whether permanent term loans or construction loans, may not be sold to a third
party unless the evidence of debt and the mortgage or deed of trust is
physically endorsed to reflect that said mortgage loan is being sold without
recourse to the insurer.
History Note: Authority G.S. 58-2-40(1); 58-7-85;
58-7-90;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978.
11 NCAC 11C .0120 VALUATION OF INVESTMENTS: VALUATIONS
OF SECURITIES MANUAL
History Note: Authority G.S. 58‑9; 58‑79;
58‑79.1;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. April 1, 1994.
11 NCAC 11C .0121 STOCK OPTIONS: GENERAL
History Note: Authority G.S. 58‑79; 58‑79.1;
Eff. February 28, 1978;
Repealed Eff. April 1, 1993.
11 NCAC 11C .0122 SALE OF EXCHANGE: TRADED CALL OPTIONS
History Note: Authority G.S. 58-79; 58-79.1;
Eff. February 28, 1978;
Repealed Eff. March 1, 2004.
11 NCAC 11C .0123 PURCHASE OF EXCHANGE: TRADED CALL
OPTIONS
History Note: Authority G.S. 58‑79; 58‑79.1;
Eff. February 28, 1978;
Repealed Eff. April 1, 1993.
11 NCAC 11C .0124 ACCOUNTING PROCEDURES
11 NCAC 11C .0125 VALUATION
11 NCAC 11C .0126 PROHIBITION AGAINST SPECULATING IN
OPTIONS
History Note: Authority G.S. 58-79; 58-79.1;
Eff. February 28, 1978;
Repealed Eff. March 1, 2004.
11 NCAC 11C .0127 SEVERABILITY
11 NCAC 11C .0128 DEFINITIONS
History Note: Authority G.S. 58‑79; 58‑79.1;
Eff. February 28, 1978;
Repealed Eff. April 1, 1993.
11 NCAC 11C .0129 FORM OF REPORTS OF EXAMINATION:
FOREIGN COMPANIES
The reports on examination prepared by the domiciliary
insurance department of a foreign company as a result of a triennial
examination, special examination or any other type of examination of a foreign
insurance company licensed to do business in North Carolina shall be certified.
History Note: Authority G.S. 58‑2‑40; 58‑2‑132;
Eff. February 28, 1978;
Amended Eff. April 1, 1993.
11 NCAC 11C .0130 CREDIT FOR REINSURANCE
History Note: Filed as a Temporary Adoption Eff.
September 12, 1991, for a period of 180 days to expire on
March 10, 1992;
Authority G.S. 58‑2‑40(1); 58‑7‑1;
Expired March 10, 1992.
11 NCAC 11C .0131 VALUATION OF DEBT SECURITIES
History Note: Authority G.S. 58‑2‑40; 58‑7‑190;
Temporary Adoption Eff. January 1, 1992 for a period of 180 days to expire on
June 29, 1992;
Eff. May 1, 1992;
Repealed Eff. March 1, 2004.
11 NCAC 11C .0132 ACCOUNTING FOR SALVAGE AND SUBROGATION
Whenever any insurance company is operating in a manner that
is hazardous to its policyholders, creditors, or the general public considering
the standards set out in G.S. 58-30-60(b), or whenever any insurance company is
"impaired", as defined in G.S. 58-30-12(a)(2), or
"insolvent", as defined in G.S. 58-30-10(13), the Commissioner shall
disregard any credit taken by the company in any annual or interim financial
statement filed with the Department for salvage or subrogation recoveries until
the recoveries have been reduced to cash or its equivalent. Salvage or
subrogation recoveries reduced to cash or its equivalent shall be accounted for
as an offset to losses paid. This Rule does not apply to title or mortgage
guaranty insurers.
History Note: Authority G.S. 58‑2‑40; 58‑7‑162;
Eff. April 1, 1993;
Amended Eff. February 1, 1996.
11 NCAC 11C .0133 ACCOUNTING FOR LIFE AND HEALTH
REINSURANCE AGREEMENTS
When an insurer cedes business applicable to G.S. 58‑7‑31(d)(1),
the insurer must account for the transaction in accordance with G.S. 58‑7‑31(d)(2).
For the purpose of this Rule, any increase in surplus shall be accounted for as
illustrated in the following examples:
(1) on the last day of calendar year N, company XYZ
pays a twenty million dollar ($20,000,000) initial commission and expense
allowance to company ABC for reinsuring an existing block of business.
Assuming a 34 percent tax rate, the next increase in surplus at inception is
thirteen million two hundred thousand dollars ($13,200,000) [twenty million
minus six million eight hundred thousand dollars ($20 million ‑ $6.8
million)] which is reported on the "Aggregate write‑ins for gains
and losses in surplus" line in the Capital and Surplus account. Six
million eight hundred thousand dollars ($6,800,000) [34 percent of twenty
million dollars ($20,000,000)] is reported as income on the "Commissions
and expense allowances on reinsurance ceded" line of the Summary of
Operations.
(2) At the end of year N+l the business has earned four
million dollars ($4,000,000), ABC has paid five hundred thousand dollars
($500,000) in profit and risk charges in arrears for the year and has received
a one million dollar ($1,000,000) experience refund. Company ABC's annual
statement would report one million six hundred and fifty thousand dollars
($1,650,000) [(66% of four million dollars ($4,000,000) ‑ one million
dollars ($1,000,000) ‑ five hundred thousand dollars ($500,000) up to a
maximum of thirteen million two hundred thousand dollars ($13,200,000)] on the
"Commissions and expense allowance on reinsurance ceded" line of the
Summary of Operations, and ‑ one million six hundred and fifty thousand
dollars ($1,650,000) on the "Aggregate write‑ins for gains and
losses in surplus" line of the Capital and Surplus account. The
experience refund would be reported separately as a miscellaneous income item
in the Summary of Operations.
History Note: Filed as a Temporary Adoption Eff.
January 21, 1994 for a period of 180 days or until the
permanent rule becomes effective, whichever is sooner;
Authority G.S. 58‑2‑40; 58‑7‑31;
Eff. April 1, 1994.
SECTION .0200 ‑ INVESTMENTS
11 NCAC 11C .0201 GENERAL NATURE
History Note: Authority G.S. 58‑9;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. July 1, 1988.
11 NCAC 11C .0202 INVENTORY OF CAPITAL SURPLUS AND
RESERVE INVESTMENTS
11 NCAC 11C .0203 FOREIGN FIRE: CASUALTY AND MISC
COMPANIES: COMPLIANCE
11 NCAC 11C .0204 INVESTMENTS IN ELECTRONIC DATA
PROCESSING EQUIPMENT
History Note: Authority G.S. 58‑9(1); 58‑79.1;
58‑79(d)(1);
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. April 1, 1993.
11 NCAC 11C .0205 ACCOUNTING FOR SALVAGE AND SUBROGATION
History Note: Authority G.S. 58‑16; 58‑9;
Eff. February 28, 1978;
Repealed Eff. April 1, 1993.
11 NCAC 11C .0206 ACCOUNTING FOR PREMIUM OVER 90 DAYS
PAST DUE
History Note: Authority G.S. 58‑2‑40; 58‑7‑162(5);
Eff. April 1, 1993;
Repealed Eff. March 1, 2004.
SECTION .0300 ‑ HEALTH MAINTENANCE ORGANIZATIONS
11 NCAC 11C .0301 GENERAL NATURE
History Note: Authority G.S. 58‑9;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. July 1, 1988.
11 NCAC 11C .0302 INVENTORY OF RESERVE: CAPITAL AND
SURPLUS INVESTMENTS
11 NCAC 11C .0303 EXPLANATION OF BASKET CLAUSE N.C.G.S.
58‑79(A)(14)
11 NCAC 11C .0304 INVENTORY OF BASKET CLAUSE INVESTMENT
11 NCAC 11C .0305 CALCULATION OF LIMITATIONS ON BASKET CLAUSE
INVESTMENTS
11 NCAC 11C .0306 LIMITATIONS UNDER BASKET CLAUSE TO
PREVIOUS INVESTMENTS
History Note: Authority G.S. 58‑79; 58‑79(a)(14);
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. April 1, 1993.
11 NCAC 11C .0307 FINANCIAL CERTIFICATION: HMO
After the
applicant has performed, or caused to be performed, a feasibility study on the
proposed operations of the HMO and has developed a specific plan of operation,
this information shall be submitted to the applicant's staff actuary, a
recognized actuarial consultant, or a recognized health care consultant for
completion of an actuarial projection of the anticipated operational results
for a three‑year period based on the initial working capital of the applicant,
any additional sources of funds to be provided, the proposed rate schedules,
the expected number of enrollees during the period, and the applicant's plan of
operation. This projection shall include the following:
(1) Certification
that the amount of money actually available for working capital is sufficient
to carry all acquisition costs and operating expenses for at least the three‑year
period and that the applicant is financially responsible and may reasonably be
expected to meet its obligations to enrollees and prospective enrollees on a
continuing basis;
(2) Certification
that the rates to be charged by the applicant for prepaid health services are
neither excessive, inadequate nor unfairly discriminatory;
(3) Determination
of an adequate reinsurance program to amply protect the applicant against large
claims arising in cases of major health care needs of enrollees, if the
financial condition of the applicant requires such a program; and
(4) Consideration
be given in the three year projection to the possible effects of adverse
selection and over‑utilization of services by enrollees of the applicant.
History Note: Authority G.S. 58‑2‑40; 58‑67‑10;
Eff. April 1, 1993.
11 NCAC 11C .0308 FOREIGN HMO: SUCCESSFUL OPERATION
History Note: Authority G.S. 58-2-40; 58-67-10;
Eff. April 1, 1993;
Amended Eff. April 1, 1994;
Repealed Eff. February 1, 2010.
11 NCAC 11C .0309 ADMITTED ASSETS: HMO
History Note: Authority G.S. 58‑2‑40; 58‑2‑40(1);
58‑67‑20; 58‑67‑110(b);
Eff. April 1, 1993;
Repealed Eff. March 1, 2004.
11 NCAC 11C .0310 REINSURANCE AGREEMENTS: HMO
Reinsurance
Agreements entered into in accordance with G.S. 58‑67‑110(e) shall
be issued by insurance carriers licensed to do business in North Carolina.
History Note: Authority G.S. 58‑2‑40; 58‑67‑110(e);
Eff. April 1, 1993.
11 NCAC 11C .0311 EXPANSION OF SERVICE AREA: HMO
(a)
Applications for expansion of service area shall provide current data stated in
G.S. 58‑67‑10(c)(1) along with a feasibility study and market
survey of the proposed area as stated in 11 NCAC 11C .0307.
(b)
Applications for expansion of service area must demonstrate at least a minimum
of one year of net operational gains by the applicant in the current approved
service area.
(c) The
requirement of Paragraph (b) may be waived by the Commissioner if additional
capital as determined by the Commissioner is placed in the HMO, or if a
guaranty agreement approved in writing by the Commissioner, to pay for any loss
to enrollees claiming reimbursement due to the insolvency of the HMO is made.
In order to qualify, the guaranteeing organization shall:
(1) submit
to the jurisdiction of this State for actions arising under the guarantee;
(2) submit
certified, audited annual financial statements to the Commissioner; and
(3) appoint
the Commissioner to receive service of process in this State.
History Note: Authority G.S. 58‑2‑40; 58‑67‑10;
Eff. April 1, 1993;
Amended Eff. April 1, 1994.
11 NCAC 11C .0312 FINANCIAL STATEMENTS: HMO
The annual and
quarterly financial reports to be filed by HMOs shall be on the HMO Blank as
adopted by the National Association of Insurance Commissioners and shall use
such instructions for the HMO Blank as may be adopted by the National
Association of Insurance Commissioners.
History Note: Authority G.S. 58‑2‑40; 58‑67‑55;
Eff. April 1, 1993.
11 NCAC 11C .0313 NET EARNED INCOME DEFINITION: HMO
As used in G.S.
58-67-5(i), "net earned income" means the sum of net income or loss
and interest on surplus notes for the calendar year.
History Note: Authority G.S. 58-2-40; 58-67-5(i);
Eff. February 1, 1996.
SECTION .0400 ‑ MORTGAGE GUARANTY INSURANCE
11 NCAC 11C .0401 GENERAL NATURE
11 NCAC 11C .0402 MORTGAGE GUARANTY INSURANCE: PURPOSE
History Note: Authority G.S. 58‑9; 58‑9(1);
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. July 1, 1988.
11 NCAC 11C .0403 ACCOUNTING FOR MORTGAGE GUARANTY
INSURANCE
History Note: Authority G.S. 58‑2‑40; 58‑2‑165;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Amended Eff. April 1, 1993;
Repealed Eff. June 1, 2007.
11 NCAC 11C .0404 CONTINGENCY RESERVE: MORTGAGE GUARANTY
INSURANCE
History Note: Authority G.S. 58-2-40(1);
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Repealed Eff. June 1, 2007.
11 NCAC 11C .0405 POLICY FORMS: MORTGAGE GUARANTY
INSURANCE
All policy forms and endorsements of mortgage guaranty
insurance companies shall be filed with and be subject to approval of the
Commissioner of Insurance.
History Note: Authority G.S. 58-2-40(1);
Eff. February 1, 1976;
Readopted Eff. February 28, 1978.
11 NCAC 11C .0406 APPRAISAL REVIEW FEES ARE PART OF
PREMIUM CHARGE
Appraisal review fees, as charged by mortgage guaranty
insurance companies, are considered to be a part of the premium charge for all
purposes, including unearned premium reserve, and are to be included as part of
the gross premiums as defined in North Carolina General Statute 105‑228.5.
History Note: Authority G.S. 58-2-40(1);
Eff. February 1, 1976;
Readopted Eff. February 28, 1978.
11 NCAC 11C .0407 REPORT OF POLICYHOLDERS POSITION –
MORTGAGE GUARANTY INSURERS
Each mortgage guaranty insurance company doing business in
this State shall file with the Commissioner a Mortgage Guaranty Insurers Report
of Policyholders Position form, which is available at www.ncdoi.com.
History Note: Authority G.S. 58-2-40; 58-10-120;
58-10-125;
Eff. July 1, 2004;
Amended Eff. June 1, 2007.
SECTION .0500 ‑ REINSURANCE
11 NCAC 11C .0501 ACCREDITED REINSURER ‑
APPLICATION
(a) Each
insurance company desiring a status of accredited reinsurer in this
jurisdiction must file an Application for Accredited Reinsurer in the form as
prescribed by the Commissioner, or Form AR‑1, Certificate of Assuming
Insurer, as adopted by the NAIC, and must satisfy the requirements of G.S. 58‑7‑21(b)(2).
(b) Each
applicant must reflect verifiable policyholders' surplus of at least twenty
million dollars ($20,000,000) in its most recent annual financial statement
that presents the applicant's assets, liabilities, policyholders' surplus,
income, and expenses in substantial compliance with appropriate NAIC Annual
Statement Instructions, G.S. 58, and this Title. However, an insurance company
may be considered for accredited reinsurer status with policyholders' surplus
of less than twenty million dollars ($20,000,000) if the application includes
proper support that adequate protection to ceding insurers will be provided by
the lesser amount of policyholders' surplus.
History Note: Authority G.S. 58‑2‑40; 58‑7‑21(b)(2);
Eff. April 1, 1993.
11 NCAC 11C .0502 ACCREDITED REINSURER ‑ FILING
REQUIREMENTS
(a) Each
initial application for accredited reinsurer shall be accompanied by the
following financial and general information so that verification of the
applicant's qualifications may be accomplished:
(1) Annual
statements for the preceding two years in the form required under G.S. 58‑2‑165;
(2) A
certified copy of the applicant's latest Report on Examination;
(3) A
copy of the applicant's CPA report for the most recent year;
(4) Actuarial
certification of the applicant's loss reserves and loss adjustment expense
reserves for the most recent year; and
(5) A
certificate of compliance from the home state verifying that the applicant is
licensed in at least one state.
(b) Each
insurance company accepted as an accredited reinsurer must file on or before
March 1 of each year the following information for review and determination of
continued acceptability for such status:
(1) An
Application for Accredited Reinsurer for the next fiscal year beginning July 1;
(2) The
applicant's annual statement for the preceding year ended December 31 in the
form required under G.S. 58‑2‑165;
(3) The
applicant's CPA report for the preceding year ended December 31;
(4) Certification
of the applicant's loss reserves and loss adjustment expense reserves in such
form as required by the NAIC Annual Statement Instructions except as amended by
the Commissioner by rule or directive for the preceding year ended December 31;
and
(5) A
current certificate of compliance.
History Note: Authority G.S. 58‑2‑40; 58‑7‑21(b)(2);
Eff. April 1, 1993.
11 NCAC 11C .0503 ACCREDITED REINSURER ‑
REVOCATION OF ACCREDITATION
The
Commissioner may revoke the accreditation of a reinsurer if its policyholders'
surplus falls below twenty million dollars ($20,000,000) or its continued
status as an accredited reinsurer is deemed to present a condition that is
hazardous to the insurance public of North Carolina.
History Note: Authority G.S. 58‑2‑40; 58‑7‑21(b)(2);
Eff. April 1, 1993.
11 NCAC 11C .0504 TRUST AGREEMENTS QUALIFIED UNDER G.S.
58-7-26
(a) As used in
this Rule:
(1) "Beneficiary"
means the entity for whose sole benefit the trust has been established and any
successor of the beneficiary by operation of law. If a court of law appoints a
receiver as successor in interest to the named beneficiary, then the named
beneficiary is the court -appointed domiciliary conservator, rehabilitator,
or liquidator.
(2) "Financial
institution" means a qualified United States financial institution as
defined in G.S. 58-7-26(c).
(3) "Grantor"
means the entity that has established a trust for the sole benefit of the
beneficiary. When established in conjunction with a reinsurance agreement, the
grantor is the unlicensed, unaccredited assuming insurer.
(4) "Obligations"
means:
(A) Reinsured
losses and allocated loss expenses paid by the ceding company, but not
recovered from the assuming insurer;
(B) Reserves
for reinsured losses reported and outstanding;
(C) Reserves
for reinsured losses incurred but not reported; and
(D) Reserves
for allocated reinsured loss expenses and unearned premiums.
(b) Required
conditions for trust agreements pursuant to G.S. 58-7-26.
(1) The
trust agreement shall be entered into between the beneficiary, the grantor, and
a trustee, which trustee shall be a qualified financial institution.
(2) The
trust agreement shall create a trust account into which assets shall be
deposited.
(3) All
assets in the trust account shall be held by the trustee at the trustee's
office in the United States.
(4) The
trust agreement shall provide that:
(A) The
beneficiary may withdraw assets from the trust account at any time, without
notice to the grantor, subject only to written notice from the beneficiary to
the trustee;
(B) No other
statement or document is required to be presented in order to withdraw assets,
except that the beneficiary may be required to acknowledge receipt of withdrawn
assets;
(C) It is not
subject to any conditions or qualifications outside of the trust agreement; and
(D) It shall
not contain references to any other agreements or documents except as provided
for under Subparagraph (11) of this Paragraph.
(5) The
trust agreement shall be established for the sole benefit of the beneficiary.
(6) The
trust agreement shall require the trustee to:
(A) Receive
assets and hold all assets in a safe place;
(B) Determine
that all assets are in such form that the beneficiary, or the trustee upon
direction by the beneficiary, may whenever necessary negotiate any such assets,
without consent or signature from the grantor or any other person;
(C) Furnish
to the grantor and the beneficiary a statement of all assets in the trust
account upon its inception and at intervals no less frequent than the end of
each calendar quarter;
(D) Notify
the grantor and the beneficiary within 10 days after the making of any deposits
to or withdrawals from the trust account;
(E) Upon
written demand of the beneficiary, immediately take all steps to transfer all
right, title, and interest in the assets held in the trust account to the
beneficiary and deliver physical custody of the assets to the beneficiary; and
(F) Allow no
substitutions or withdrawals of assets from the trust account, except on
written instructions from the beneficiary; except that the trustee may, without
the consent of, but with notice to, the beneficiary and upon the call or
maturity of any trust asset, withdraw the asset upon the condition that the
proceeds are paid into the trust account.
(7) The
trust agreement shall provide that at least 30 days, but not more 45 days,
before termination of the trust account, that written notification of
termination shall be delivered by the trustee to the beneficiary.
(8) The
trust agreement shall be made subject to and governed by the laws of the state
in which the trust is established.
(9) The
trust agreement shall prohibit invasion of the trust corpus for the purpose of
paying compensation to, or reimbursing the expense of, the trustee.
(10) The
trust agreement shall provide that the trustee shall be liable for its own
negligence, willful misconduct or lack of good faith.
(11) When
a trust agreement is established in conjunction with a reinsurance agreement
covering risks other than life, annuities, or accident and health, where it is
customary practice to provide a trust agreement for a specific purpose, such a
trust agreement may provide that the ceding insurer shall undertake to use and
apply amounts drawn upon the trust account, without diminution because of the
insolvency of the ceding insurer or the assuming insurer, for the following
purposes:
(A) To pay or
reimburse the ceding insurer for the assuming insurer=s share under the
specific reinsurance agreement regarding any losses and allocated loss expenses
paid by the ceding insurer, but not recovered from the assuming insurer, or for
unearned premiums due to the ceding insurer if not otherwise paid by the
assuming insurer;
(B) To make
payment to the assuming insurer of any amounts held in the trust account that
exceed 102 percent of the actual amount required to fund the assuming insurer=s
obligations under the specific reinsurance agreement; or
(C) Where the
ceding insurer has received notification of termination of the trust account
and where the assuming insurer=s entire obligations under the specific
reinsurance agreement remain unliquidated and undischarged 10 days before
termination date, to withdraw amounts equal to the obligations and deposit
those amounts in a separate account, in the name of the ceding insurer in any
qualified United States financial institution as defined in G.S. 58-7-26(c)
apart from its general assets, in trust for such uses and purposes specified in
Parts (b)(11)(A) and (B) of this Rule as may remain executory after such
withdrawal and for any period after the termination date.
(12) The
reinsurance agreement entered into in conjunction with the trust agreement may,
but need not, contain the provisions required by Part (d)(1)(B) of this Rule,
as long as these required conditions are included in the trust agreement.
(c) Permitted
conditions for trust agreements.
(1) The
trust agreement may provide that the trustee may resign upon delivery of a
written notice of resignation, effective not less than 90 days after receipt by
the beneficiary and grantor of the notice; and that the trustee may be removed
by the grantor by delivery to the trustee and the beneficiary of a written
notice of removal, effective not less than 90 days after receipt by the trustee
and the beneficiary of the notice; provided that no such resignation or
removal shall be effective until a successor trustee has been duly appointed
and approved by the beneficiary and the grantor and all assets in the trust
have been duly transferred to the new trustee.
(2) The
grantor may have the unqualified right to vote any shares of stock in the trust
account and to receive from time to time payments of any dividends or interest
upon any shares of stock or obligations included in the trust account. Any
such interest or dividends shall be either forwarded promptly upon receipt to
the grantor or deposited in a separate account established in the grantor's
name.
(3) The
trustee may be given authority to invest, and accept substitutions of, any
funds in the account; provided that no investment or substitution shall be made
without prior approval of the beneficiary, unless the trust agreement specifies
categories of investments acceptable to the beneficiary and authorizes the
trustee to invest funds and to accept substitutions which the trustee
determines are at least equal in market value to the assets withdrawn and that
are consistent with the restrictions in Part (d)(1)(B) of this Rule.
(4) The
trust agreement may provide that the beneficiary may at any time designate a
party to which all or part of the trust assets are to be transferred. Such
transfer may be conditioned upon the trustee receiving, prior to or
simultaneously, other specified assets.
(5) The
trust agreement may provide that, upon termination of the trust account, all
assets not previously withdrawn by the beneficiary shall, with written approval
by the beneficiary, be delivered over to the grantor.
(d) Additional
conditions applicable to reinsurance agreements.
(1) A
reinsurance agreement that is entered into in conjunction with a trust
agreement and the establishment of a trust account, may contain provisions
that:
(A) Require
the assuming insurer to enter into a trust agreement and to establish a trust
account for the benefit of the ceding insurer, and specifying what the
agreement is to cover;
(B) Stipulate
that assets deposited in the trust account shall be valued according to their
current fair market value and shall consist only of cash (United States legal
tender), certificates of deposit (issued by a United States bank and payable in
United States legal tender), or investments of the types permitted by G.S. 58,
Article 7 or any combination of the above; provided that such investments are
issued by an entity that is not the parent, subsidiary, or affiliate of either
the grantor or the beneficiary. The reinsurance agreement may further specify
the types of investments to be deposited. Where a trust agreement is entered
into in conjunction with a reinsurance agreement covering risks other than
life, annuities, and accident and health, the trust agreement may contain the
provisions required by this paragraph in lieu of including such provisions in
the reinsurance agreement;
(C) Require
the assuming insurer, prior to depositing assets with the trustee, to execute
assignments or endorsements in blank; or to transfer legal title to the trustee
of all shares, obligations, or any other assets requiring assignments, in order
that the ceding insurer, or the trustee upon the direction of the ceding
insurer, may whenever necessary negotiate these assets without consent or
signature from the assuming insurer or any other entity;
(D) Require
that all settlements of account between the ceding insurer and the assuming
insurer be made in cash or its equivalent; and
(E) Stipulate
that the assuming insurer and the ceding insurer agree that the assets in the
trust account, established pursuant to the provisions of the reinsurance
agreement, may be withdrawn by the ceding insurer at any time, notwithstanding
any other provisions in the reinsurance agreement; and shall be utilized and
applied by the ceding insurer or its successors in interest by operation of
law, including any liquidator, rehabilitator, receiver, or conservator of such
company, without diminution because of insolvency on the part of the ceding
insurer or the assuming insurer, only for the following purposes:
(i) To
reimburse the ceding insurer for the assuming insurer=s share of premiums
returned to the owners of policies reinsured under the reinsurance agreement
because of cancellations of such policies;
(ii) To
reimburse the ceding insurer for the assuming insurer's share of surrenders and
benefits or losses paid by the ceding insurer pursuant to the provisions of the
policies reinsured under the reinsurance agreement;
(iii) To
fund an account with the ceding insurer in an amount at least equal to the
deduction, for reinsurance ceded, from the ceding insurer liabilities for
policies ceded under the agreement. The account shall include, but not be
limited to, amounts for policy reserves, claims and losses incurred (including
losses incurred but not reported), loss adjustment expenses, and unearned
premium reserves; and
(iv) To
pay any other amounts the ceding insurer claims are due under the reinsurance
agreement.
(2) The
reinsurance agreement may also contain provisions that:
(A) Give the
assuming insurer the right to seek approval from the ceding insurer to
withdraw from the trust account all or any part of the trust assets and
transfer those assets to the assuming insurer, provided:
(i) The
assuming insurer shall, at the time of withdrawal, replace the withdrawn assets
with other qualified assets having a market value equal to the market value of
the assets withdrawn so as to maintain at all times the deposit in the required
amount, or
(ii) After
withdrawal and transfer, the market value of the trust account is no less than
102 percent of the required amount.
The ceding
insurer shall not unreasonably or arbitrarily withhold its approval.
(B) Provide
for:
(i) The
return of any amount withdrawn in excess of the actual amounts required for
Subparts (d)(1)(E)(i), (ii) and (iii), or in the case of Subpart (d)(1)(E)(iv)
of this Rule, any amounts that are subsequently determined not to be due; and
(ii) Interest
payments, at a rate not in excess of the prime rate of interest, on the amounts
held pursuant to Subpart (d)(1)(E)(iii) of this Rule.
(C) Permit
the award by any arbitration panel or court of competent jurisdiction of:
(i) Interest
at a rate different from that provided in Subpart (d)(2)(B)(ii) of this Rule,
(ii) Court
of arbitration costs,
(iii) Attorney's
fees, and
(iv) Any
other reasonable expenses.
(3) Financial
reporting. A trust agreement may be used to reduce any liability for
reinsurance ceded to an unauthorized assuming insurer in financial statements
required to be filed with the Department in compliance with the provisions of
this Rule when established on or before the date of filing of the financial
statement of the ceding insurer. Further, the reduction for the existence of
an acceptable trust account may be up to the current fair market value of
acceptable assets available to be withdrawn from the trust account at that
time, but such reduction shall be no greater than the specific obligations
under the reinsurance agreement that the trust account was established to
secure.
(4) Existing
agreements. Notwithstanding the effective date of this Rule, any trust
agreement in existence before January 1, 1996, will continue to be acceptable
until June 30, 1996, at which time the agreements will have to be in full
compliance with this Rule for the trust agreement to be acceptable.
(5) The
failure of any trust agreement to specifically identify the beneficiary as
defined in Paragraph (a) of this Rule shall not be construed to affect any
actions or rights that the Commissioner may take or possess pursuant to the
provisions of the laws of this State.
History Note: Authority G.S. 58-2-40; 58-7-21; 58-7-26;
Eff. February 1, 1996.
11 NCAC 11C .0505 LETTERS OF CREDIT
(a) As used in
this Rule:
(1) "Beneficiary"
means the entity for whose benefit the letter of credit has been established
and any successor of the beneficiary by operation of law. If a court of law
appoints a receiver as successor in interest to the named beneficiary, then the
named beneficiary is the court-appointed domiciliary conservator,
rehabilitator, or liquidator.
(2) "Financial
Institution" means a qualified United States financial institution as
defined in G.S. 58-7-26(b).
(b) In order
to qualify under G.S. 58-7-26(a)(3), a letter of credit must be clean,
irrevocable, unconditional and issued or confirmed by a qualified United States
financial institution as defined in G.S. 58-7-26(b). The letter of credit shall
contain an issue date and date of expiration and shall stipulate that the
beneficiary need only draw a sight draft under the letter of credit and present
it to obtain funds and that no other document need be presented. The letter of
credit shall indicate that it is not subject to any condition or qualifications
outside of the letter of credit. The letter of credit itself shall not contain
reference to any other agreements, documents, or entities, except as provided
in Subparagraph (i)(1) of this Rule.
(c) The
heading of the letter of credit may include a boxed section that contains the
name of the applicant and other appropriate notations to provide a reference
for the letter of credit. The boxed section shall be clearly marked to
indicate that such information is for internal identification purposes only.
(d) The letter
of credit shall contain a statement to the effect that the obligation of the
qualified United States financial institution under the letter of credit is in
no way contingent upon reimbursement with respect thereto.
(e) The term
of the letter of credit shall be for at least one year and shall contain an
"evergreen clause" which prevents the expiration of the letter of
credit without due notice from the issuer. The "evergreen clause" shall
provide for a period of not less than thirty 30 days' notice before the
expiration or non-renewal date.
(f) The letter
of credit shall state whether it is subject to and governed by the laws of this
State or the Uniform Customs and Practice for Documentary Credits of the
International Chamber of Commerce (Publication 400), and all drafts drawn
thereunder shall be presentable at an office in the United States of a
qualified United States financial institution.
(g) If the
letter of credit is made subject to the Uniform Customs and Practice for
Documentary Credits of the International Chamber of Commerce (Publication 400);
then the letter of credit shall specifically address and make provision for an
extension of time to draw against the letter of credit in the event that one or
more of the occurrences specified in Article 19 of Publication 400 occur.
(h) The letter
of credit shall be issued or confirmed by a qualified United States financial
institution authorized to issue letters of credit, pursuant to G.S. 58-7-26(b).
(i) Reinsurance
agreement provisions:
(1) The
reinsurance agreement in conjunction with which the letter of credit is
obtained may contain provisions that:
(A) Require
the assuming insurer to provide letters of credit to the ceding insurer and
specify what they are to cover.
(B) Stipulate
that the assuming insurer and ceding insurer agree that the letter of credit
provided by the assuming insurer pursuant to the provisions of the reinsurance
agreement may be drawn upon at any time, notwithstanding any other provisions
in the agreement, and shall be utilized by the ceding insurer or its successors
in interest only for one or more of the following reasons:
(i) To
reimburse the ceding insurer for the assuming insurer's share of premiums
returned to the owners of policies reinsured under the reinsurance agreement on
account of cancellations of such policies;
(ii) To
reimburse the ceding insurer for the assuming insurer's share of surrenders and
benefits or losses paid by the ceding insurer under the terms and provisions of
the policies reinsured under the reinsurance agreement;
(iii) To
fund an account with the ceding insurer in an amount at least equal to the
deduction, for reinsurance ceded, from the ceding insurer's liabilities for
policies ceded under the agreement (such amount shall include, but not be
limited to, amounts for policy reserves, claims and losses incurred and
unearned premium reserves); and
(iv) To
pay any other amounts the ceding insurer claims are due under the reinsurance
agreement.
(C) All of
the provisions of Subparagraph (1) of this Paragraph shall be applied without
diminution because of insolvency on the part of the ceding insurer or assuming
insurer.
(2) Nothing
contained in Subparagraph (1) of this Paragraph shall preclude the ceding
insurer and assuming insurer from providing for:
(A) An
interest payment, at a rate not in excess of the prime rate of interest, on the
amounts held pursuant to Subaragraph (1)(B)(iii) of this Paragraph; or
(B) The
return of any amounts drawn down on the letters of credit in excess of the
actual amounts required for the above or, in the case of Subpart (1)(B)(iv) of
this Paragraph, any amounts that are subsequently determined not to be due.
(3) When
a letter of credit is obtained in conjunction with a reinsurance agreement
covering risks other than life, annuities, and accident and health, where it is
customary practice to provide a letter of credit for a specific purpose, then
the reinsurance agreement may, in lieu of Part (1)(B) of this Paragraph,
require that the parties enter into a "Trust Agreement", which may be
incorporated into the reinsurance agreement or be a separate document.
(j) A letter
of credit may not be used to reduce any liability for reinsurance ceded to an
unauthorized assuming insurer in financial statements filed with the Department
unless an acceptable letter of credit with the filing ceding insurer as
beneficiary has been issued on or before the date of filing of the financial
statement. The reduction for the letter of credit may be up to the amount
available under the letter of credit but no greater than the specified
obligation under the reinsurance agreement that the letter of credit was
intended to secure.
History Note: Authority G.S. 58-2-40; 58-7-26;
Eff. February 1, 1996.
SECTION .0600 ‑ PREMIUMS IN THE COURSE OF COLLECTION
11 NCAC 11C .0601 DEFINITIONS
The definitions contained in G.S. 58‑19‑5 are
incorporated into this Section by reference.
History Note: Authority G.S. 58‑2‑40; 58‑7‑162;
Eff. April 1, 1993.
11 NCAC 11C .0602 APPLICABILITY
G.S. 58‑7‑162(6) applies when a person solely or
in combination with the person's affiliates owes, in any two of three
consecutive months, an insurer an amount that exceeds five percent of the
insurer's total premiums in course of collection.
History Note: Authority G.S. 58‑2‑40; 58‑7‑162;
Eff. April 1, 1993.
11 NCAC 11C .0603 COMPLIANCE‑TRUST ACCOUNT
(a) When G.S. 58‑7‑162(6) applies under 11 NCAC
11C .0602, the premiums collected by the person or the person and its
affiliates and not remitted to the insurer may be held in a trust account with
a bank so that those premiums will qualify as allowable or admitted assets.
(b) The trust account shall be an account held in the trust
department of a bank and evidenced by a written trust agreement that is in
substantial compliance with the Department's Model Trust Agreement.
(c) The trustee bank shall be a national bank or a state
chartered bank that is a member of the Federal Deposit Insurance Corporation
and be independent from control of either the person, the person's affiliates,
or the insurer.
(d) The trust account must be established within 60 days
after the end of the month in which the insurer becomes subject to G.S. 58‑7‑162(6)
under 11 NCAC 11C .0602. The trust agreement must be submitted to and approved
by the Commissioner before becoming effective, and within that 60‑day
period.
(e) The person and its affiliates must maintain separate
trust accounts, evidenced by written trust agreements, for each insurer subject
to G.S. 58‑7‑162(6).
(f) Once a trust account is established, it shall be
maintained:
(1) for as long as the person or its affiliates
produce business for the insurer, regardless of whether the person or its
affiliates continue to owe the insurer at least five percent of the insurer's
total premiums in course of collection; or
(2) until the insurer requests and receives
authority from the Commissioner to cease using the trust account for the person
or its affiliates. Such request shall not be made before 12 months after
establishing the trust account.
History Note: Authority G.S. 58‑2‑40; 58‑7‑162;
Eff. April 1, 1993.
11 NCAC 11C .0604 COMPLIANCE: LETTER OF CREDIT
(a) When G.S. 58‑7‑162(6) applies under 11 NCAC
11C .0602, the premiums collected by the person or the person and its
affiliates and not remitted to the insurer may be secured by an unexpired,
clean, irrevocable letter of credit, payable to the insurer, so that those
premiums will qualify as allowable or admitted assets.
(b) The amount of the letter of credit shall at all times
equal or exceed 125 percent of the liability of the person or the person and
its affiliates to the insurer for the premiums collected.
(c) The letter of credit must be issued within 30 days
after the end of the month in which the insurer becomes subject to G.S. 58‑7‑162(6)
under 11 NCAC 11C .0602. A certified copy of the executed letter of credit
shall be provided to the Commissioner.
(d) The letter of credit shall be issued by a banking
institution whose financial condition has been determined by either the
Commissioner or the Securities Valuation Office of the NAIC to be acceptable to
issue such a letter of credit.
History Note: Authority G.S. 58‑2‑40; 58‑7‑162;
Eff. April 1, 1993.
11 NCAC 11C .0605 COMPLIANCE: FINANCIAL GUARANTY BOND
(a) When G.S. 58‑7‑162(6) applies under 11 NCAC
11C .0602, the premiums collected by the person or the person and its
affiliates and not remitted to the insurer may be secured by a financial
guaranty bond acceptable to the Department, payable to the insurer, so that
those premiums will qualify as allowable or admitted assets.
(b) The amount of the financial guaranty bond shall at all
times equal or exceed 125 percent of the liability of the person or the person
and its affiliates to the insurer for the premiums collected.
(c) The financial guaranty bond must be issued within 30
days after the end of the month in which the insurer becomes subject to G.S. 58‑7‑162(6)
under 11 NCAC 11C .0602. A certified copy of the executed financial guaranty
bond shall be provided to the Commissioner.
History Note: Authority G.S. 58‑2‑40; 58‑7‑162;
Eff. April 1, 1993.