§ 58-10-35. Policyholder rights. - North Carolina Statutes

§ 58‑10‑35. Policyholder rights.

(a)        Policyholders mayreject the transfer and novation of their policies by indicating on theresponse card that the assumption is rejected and returning the card to thetransferring insurer.

(b)        Payment of anypremium to the assuming company during the 24‑month period after thenotice of transfer has been received indicates the policyholder's acceptance ofthe transfer to the assuming insurer; and a novation shall occur only if thepremium notice clearly states that payment of the premium to the assuminginsurer constitutes acceptance of the transfer. The premium notice shall alsoprovide a method for the policyholder to pay the premium while reserving theright to reject the transfer. With respect to any home service business or anyother business not using premium notices, the disclosures and proceduralrequirements of this subsection are to be set forth in the notice of transferrequired by G.S. 58‑10‑30 and in the assumption certificate.

(c)        After no fewer than24 months after the mailing of the initial notice of transfer required underG.S. 58‑10‑30, if positive consent to, or rejection of, thetransfer and assumption has not been received or consent has not been deemed tohave occurred under subsection (b) of this section, the transferring insurershall send to the policyholder a second and final notice of transfer asspecified in G.S. 58‑10‑30. If the policyholder does not accept orreject the transfer during the one‑month period immediately after thedate on which the transferring insurer mailed the second and final notice oftransfer, the policyholder's consent and novation of the contract will occur.With respect to the home service business, or any other business not usingpremium notices, the 24‑month and one‑month periods shall bemeasured from the date of delivery of the notice of transfer under G.S. 58‑10‑30.

(d)        The transferringinsurer shall be deemed to have received the response card on the date it ispostmarked. A policyholder may also send the response card by facsimile, otherelectronic transmission, registered mail, express delivery, or courier service;in which case the response card shall be deemed to have been received by thetransferring insurer on the date of actual receipt by the transferring insurer.(1995, c. 318,s. 1; 2007‑298, s. 7.3; 2007‑484, s. 43.5.)