A BILL TO BE ENTITLED
AN ACT to eliminate the cesSion of clean risks to the reinsurance facility.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑37‑1 reads as rewritten:
"§ 58‑37‑1.  Definitions.
As used in this Article:
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(2a)	"Clean Risk" means any owner of a nonfleet, private passenger motor vehicle, as defined in G.S. 58‑40‑10, if the owner, principal operator, and each licensed operator in the owner's household have two years' driving experience as licensed drivers and if none of the persons has been assigned any Safe Driver Incentive Plan points under Article 36 of this Chapter during the three‑year period immediately preceding either (i) the date of application for a motor vehicle insurance policy or (ii) the date of preparation of a renewal of a motor vehicle insurance policy.
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SECTION 2.  Article 37 of Chapter 58 of the General Statutes is amended by adding a new section to read:
"§ 58‑37‑33.  Cession of clean risks prohibited
An insurer may not cede any policy or renewal thereof held by a clean risk to the Facility."
SECTION 3.  G.S. 58‑37‑35 reads as rewritten:
"§ 58‑37‑35.  The Facility; functions; administration.
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(l)	The classifications, rules, rates, rating plans and policy forms used on motor vehicle insurance policies reinsured by the Facility may be made by the Facility or by any licensed or statutory statistical organization or bureau on its behalf and shall be filed with the Commissioner. The filings may incorporate by reference any other material on file with the Commissioner. Rates shall be neither excessive, inadequate nor unfairly discriminatory. If the Commissioner finds, after a hearing, that a rate is either excessive, inadequate or unfairly discriminatory, the Commissioner shall issue an order specifying in what respect it is deficient and stating when, within a reasonable period thereafter, the rate is no longer effective. The order is subject to judicial review as set out in Article 2 of this Chapter. Pending judicial review of said order, the filed classification plan and the filed rates may be used, charged and collected in the same manner as set out in G.S. 58‑40‑45 of this Chapter. The order shall not affect any contract or policy made or issued before the expiration of the period set forth in the order. All rates shall be on an actuarially sound basis and shall be calculated, insofar as is possible, to produce neither a profit nor a loss. Rates shall not include any factor for underwriting profit on Facility business, but shall provide an allowance for contingencies. There shall be a strong presumption that the rates and premiums for the business of the Facility are neither unreasonable nor excessive.
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SECTION 4.  This act becomes effective October 1, 2021, and applies to policies issued or renewed after that date.