§ 58-10-30. Notice requirements. - North Carolina Statutes

§58‑10‑30.  Notice requirements.

(a)        The transferringinsurer shall provide or cause to be provided to each policyholder a notice oftransfer by first‑class mail, addressed to the policyholder's last knownaddress or to the address to which premium notices or other policy documentsare sent; or with respect to home service business, by personal delivery withacknowledged receipt. A notice of transfer shall also be sent to thetransferring insurer's agents or brokers of record on the affected policies.

(b)        The notice oftransfer shall be in a form identical or substantially similar to Appendix A ofthe NAIC Assumption Reinsurance Model Act, as amended by the NAIC and shallstate or provide:

(1)        The date on whichthe transfer and novation of the policyholder's policy is proposed to takeplace.

(2)        The names,addresses, and telephone numbers of the assuming and transferring insurers.

(3)        That thepolicyholder has the right to either consent to or reject the transfer andnovation.

(4)        The procedures andtime limit for consenting to or rejecting the transfer and novation.

(5)        A summary of anyeffect that consenting to or rejecting the transfer and novation will have onthe policyholder's rights.

(6)        A statement that theassuming insurer is licensed to write the type of business being assumed in thestate where the policyholder resides, or is otherwise authorized, as providedin this Part, to assume that business.

(7)        The name and addressof the person at the transferring insurer to whom the policyholder should sendthe policyholder's written statement of acceptance or rejection of the transferand novation.

(8)        The address andtelephone number of the insurance department where the policyholder resides sothat the policyholder may write or call that insurance department for furtherinformation about the financial condition of the assuming insurer.

(9)        The followingfinancial data for both insurers:

a.         Ratings for the lastfive years, if available, or for any shorter period that is available, from twonationally recognized insurance rating services acceptable to the Commissioner,including the rating services' explanations of the meanings of their ratings.If ratings are unavailable for any year of the five‑year period, thisshall also be disclosed.

b.         A balance sheet asof December 31 for the previous three years, if available, or for any shorterperiod that is available, and as of the date of the most recent quarterlystatement.

c.         A copy of theManagement's Discussion and Analysis that was filed as a supplement to theprevious year's annual statement.

d.         An explanation ofthe reason for the transfer.

(c)        The notice oftransfer shall include a preaddressed, postage‑paid response card thatthe policyholder may return as the policyholder's written statement ofacceptance or rejection of the transfer and novation.

(d)        The notice oftransfer shall be filed as part of the prior approval requirement set forth insubsection (e) of this section.

(e)        Prior approval bythe Commissioner is required for any transaction in which a domestic insurerassumes or transfers obligations or risks on policies under an assumptionreinsurance agreement. No insurer licensed in this State shall transferobligations or risks on policies issued to or owned by residents of this Stateto any insurer that is not licensed in this State. A domestic insurer shall notassume obligations or risks on policies issued to or owned by policyholdersresiding in any other state unless it is licensed in the other state, or theinsurance regulator of that state has approved the assumption.

(f)         Any licensedforeign insurer that enters into an assumption reinsurance agreement thattransfers the obligations or risks on policies issued to or owned by residentsof this State shall file with the Commissioner the assumption certificate, acopy of the notice of transfer, and an affidavit that the transaction issubject to substantially similar requirements in the states of domicile of boththe transferring and assuming insurers. If those requirements do not exist inthe state of domicile of either the transferring or assuming insurer, therequirements of subsection (g) of this section apply.

(g)        Any licensedforeign insurer that enters into an assumption reinsurance agreement thattransfers the obligations or risks on policies issued to or owned by residentsof this State shall obtain prior approval of the Commissioner and be subject toall other requirements of this Part with respect to residents of this State,unless the transferring and assuming insurers are subject to assumptionreinsurance requirements adopted by statute or administrative rule in thestates of their domicile that are substantially similar to those contained inthis Part and in any administrative rules adopted under this Part.

(h)        The followingfactors, along with any other factors the Commissioner deems to be appropriateunder the circumstances, shall be considered by the Commissioner in reviewing arequest for approval:

(1)        The financialcondition of the transferring and assuming insurers and the effect the transactionwill have on the financial condition of each company.

(2)        The competence,experience, and integrity of those persons who control the operation of theassuming insurer.

(3)        The plans orproposals the assuming insurer has with respect to the administration of thepolicies subject to the proposed transfer.

(4)        Whether the transferis fair and reasonable to the policyholders of both insurers.

(5)        Whether the noticeof transfer to be provided by the insurer is fair, adequate, and notmisleading. (1995, c. 318, s. 1.)