A BILL TO BE ENTITLED
AN ACT revising the verification obligations of an insurer and its agent with respect to rate evasion fraud; recodifying certificate of insurance provisions; and establishing a civil penalty for the fraudulent preparation, ISSUANCE, REQUESTING, or REQUIREMENT of a certificate of Insurance.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑2‑164(c) reads as rewritten:
"(c)	The insurer and its agent shall also take reasonable steps to verify that the information provided by an applicant regarding the applicant's address and the place the motor vehicle is garaged is correct. The insurer may take its own reasonable steps to verify residency or eligible risk status or may rely upon the agent verification of residency or eligible risk status to meet the insurer's verification obligations under this section. The agent shall retain copies of any items obtained under this section as required under the record retention rules adopted by the Commissioner and in accordance with G.S. 58‑2‑185. The insurer and its agent may satisfy the requirements of this section by, within 30 days of coverage binding, obtaining from the applicant reliable proof of North Carolina residency and the applicant's status as an eligible risk.
(c1)	To the extent relevant to a particular criterion for eligible risk status and for the purpose of obtaining nonfleet private passenger motor vehicle insurance, reliable proof of North Carolina residency or eligible risk status includes one or more of the following:
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(2)	A utility bill in the name of the applicant showing the applicant's current North Carolina address, including, but not limited to, a utility bill accessed electronically by the applicant in the presence of the insurer or its agent.
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(c2)	To the extent relevant to a particular criterion for eligible risk status and for the purpose of obtaining other than nonfleet private passenger motor vehicle insurance, reliable proof of North Carolina residency or eligible risk status includes two or more of the following:
(1)	A utility bill in the name of the applicant showing a North Carolina address for the principal place of business of the applicant, including, but not limited to, a utility bill accessed electronically by the applicant in the presence of the insurer or its agent.
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SECTION 2.  Subsections (d), (e), (f), and (g) of G.S. 58‑3‑150 (Forms to be approved by Commissioner) are recodified as subsections (a), (b), (c), and (e) respectively, of G.S. 58‑3‑149. G.S. 58‑3‑149, as created by this section, reads as rewritten: 
"§ 58‑3‑149.  Certificates of insurance.
(a)	For the purposes of this section, the following definitions apply:
(1)	Certificate of insurance. – A document prepared or issued by an insurance company or producer that is used to verify or evidence the existence of property or casualty insurance coverage, including a document submitted or created electronically. Certificate of Insurance shall not include a document prepared or issued by an insurance company or producer that is used to verify or evidence the existence of property insurance provided to a lender covering real or personal property which serves as the lender's security for commercial mortgages.
(2)	Commercial mortgages. – Mortgages or other instruments given for the purpose of creating a lien encumbering office, multiunit residential, apartments, commercial, or industrial properties. Commercial mortgages shall not include a lien encumbering one‑ to four‑family residential properties.
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(c)	It is unlawful for any person to knowingly prepare, issue, request, or require a certificate of insurance that meets any of the following criteria:
(1)	Has not been filed with and approved by the Commissioner.
(2)	Contains any false or misleading information concerning the policy of insurance to which the certificate of insurance makes reference.
(3)	Purports to alter, amend, or extend the coverage provided by the policy of insurance to which the certificate of insurance makes reference.
(d)	Any person who prepares, issues, requests, or requires a certificate of insurance that meets the criteria of subdivision (2) or (3) of subsection (c) of this section is subject to a civil penalty of up to five thousand dollars ($5,000). The clear proceeds of the penalty shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2. Payment of the civil penalty under this section shall be in addition to payment of any other penalty for a violation of the criminal laws of this State."
SECTION 3.  This act becomes effective October 1, 2021.