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 March 10, 2017
After what could only be described as a slow start to the 2017 legislative session, several bills of interest to the insurance industry have now been introduced, with another several expected to drop within the next couple of weeks. Here's a summary of the insurance-related bills that should be of most interest to IIANC's members.
H287 (fix from 2016) Commercial Auto Rate Evasion:
IIANC is actively working to resolve an issue that was brought to our attention by multiple members that was a result of H287 from the 2016 legislative session. Beginning December 1, 2016, agencies writing commercial auto policies were required to review and retain copies of two or more of the following documents as reliable proof of North Carolina residency or eligible risk status:
  • A receipt for real property taxes paid by the applicant to a North Carolina locality within the preceding 12-month period, and showing the applicant's current North Carolina address
  • A valid North Carolina vehicle registration issued to the applicant and showing the applicant's current North Carolina address
  • A federal Income Tax Return filed by the applicant for the most recent prior filing period showing the applicant's name and current North Carolina address
For many start-up operations, this requirement is proving to be nearly impossible. IIANC is currently seeking a solution.
S137 - Surcharge Transparency:
This bill will require the auto insurance surcharges imposed to subsidize the losses of the North Carolina Automobile Reinsurance Facility (NCRF) be clearly communicated to policyholders. The proponents of modernizing North Carolina's rate making system see this transparency as an important step in the process. Most consumers do not currently realize that a portion of their premiums are being used to subsidize the inadequate rates being charged to those insured in the reinsurance facility. This bill is being supported by the NCDOI, and was introduced by Co-Chairs of the Senate Insurance Committee. IIANC does have some concerns that breaking out the surcharge on the policies will initially create some confusion with policyholders, but is supportive of the legislation.
*On a side note, the NCRF is the largest writer of auto insurance in NC, with 28% of the state's market share, over 1.3 million policies, 90% of which is private passenger auto.
H43 - Automobile Insurance Regulatory Modernization:
As previously reported, this bill would have allowed companies to opt-out of using the SDIP system. With no visible supporters, this legislation does not appear to have any legs, and is not expected to advance.
H104 - Lienholder protection:
This bill would provide for greater protections for lienholders in regards to the issuance of proceeds to pay for automobile claims. Lenders and the insurance carriers are working out the details of this legislation, and the expected impact on agents is minimal.
The next few items are not yet active bills, but are expected to be introduced soon:
Property Insurance Fairness (Draft Bill):
While this bill has not been introduced, there are a couple of versions of drafts being circulated that would provide for the issuance of catastrophe bonds to assist in the funding of a catastrophic loss in the Beach/FAIR plan, as well as other provisions. IIANC will reserve further commentary until a bill is actually filed.
Workers' Compensation simplification:
IIANC is exploring options for making further efforts to simplify the rules around workers' compensation, including consistent treatment between officers of corporations and members of LLCs. The current inconsistent treatment between the two groups continues to cause confusion among consumers, which can lead to lack of compliance, fines and uncovered claims. North Carolina continues to have a disproportionate percentage of agents' E&O claims that are driven by workers' compensation policies.
Distracted driving:
IIANC is engaged in conversations with industry groups and other stakeholders over the possibility of pursuing additional legislative remedies to the epidemic of distracted driving, particularly as it relates to cell phone use and texting. As most people know, automobile claims' frequency has recently been on the uptick, because of increased instances of auto claims due to distracted driving. The North Carolina Rate Bureau has recently filed for a 13.8% rate increase in order to accommodate for increased losses. In addition to this being a strong insurance issue, IIANC feels strongly that working to reduce this problem is good public policy and the right thing to do.
In case you missed it:
House Introduces Legislation to Repeal and Replace ACA
Click here to read an article from Wyatt Stewart, Big "I" Senior Director of Federal Government Affairs. Fun fact: Wyatt will be joining our panel at this year's InsurEXPO17 on Friday morning all about hot legislative issues! Click here to register.

IIABA Legislative Conference
The IIABA Legislative Conference will be held May 3-4 in Washington, D.C. Join the IIANC delegation! Click here for more information.
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