§ 58-33-17. Limited license for rental car companies. - North Carolina Statutes

§ 58‑33‑17. Limited license for rental car companies.

(a)        As used in thissection:

(1)        "Limitedlicensee" means a person authorized to sell certain coverages relating tothe rental of motor vehicles pursuant to the provisions of this section andArticle 28 of Chapter 66 of the General Statutes.

(2)        "Rentalagreement" means any written agreement setting forth the terms andconditions governing the use of a vehicle provided by the rental car company.

(3)        "Rental carcompany" means any person in the business of providing vehicles to thepublic.

(4)        "Renter"means any person obtaining the use of a vehicle from a rental car company underthe terms of a rental agreement.

(5)        "Vehicle"means a motor vehicle of the private passenger type including passenger vans andminivans that are primarily intended for the transport of persons.

(b)        The Commissionermay issue to a rental car company, or to a franchisee of a rental car company,that has complied with the requirements of this section, a limited licenseauthorizing the licensee, known as a "limited licensee" for thepurpose of this Article, to act as agent, with reference to the kinds ofinsurance specified in this section, of any insurer authorized to write suchkinds of insurance in this State.

(c)        The prerequisitesfor issuance of a limited license under this section are the filing with theCommissioner of the following:

(1)        A writtenapplication, signed by an officer of the applicant, for the limited license insuch form or forms, and supplements thereto, and containing such information,as the Commissioner may prescribe; and

(2)        A certificate by theinsurer that is to be named in such limited license, stating that it hassatisfied itself that the named applicant is trustworthy and competent to actas its insurance agent for this limited purpose and that the insurer willappoint such applicant to act as the agent in reference to the doing of suchkind or kinds of insurance as are permitted by this section, if the limitedlicense applied for is issued by the Commissioner. Such certificate shall besubscribed by an officer or managing agent of such insurer and affirmed as trueunder the penalties of perjury.

(d)        In the event thatany provision of this section is violated by a limited licensee, theCommissioner may:

(1)        Revoke or suspend alimited license issued under this section in accordance with the provisions ofG.S. 58‑33‑46; or

(2)        After notice andhearing, impose such other penalties, including suspending the transaction ofinsurance at specific rental locations where violations of this Article haveoccurred, as the Commissioner deems to be necessary or convenient to carry outthe purposes of this section.

(e)        The rental carcompany or franchisee licensed pursuant to subsection (b) of this section mayact as agent for an authorized insurer only in connection with the rental ofvehicles and only with respect to the following kinds of insurance:

(1)        Excess liabilityinsurance that provides coverage to the rental car company or franchisee andrenters and other authorized drivers of rental vehicles, in excess of thestandard liability limits provided by the rental car company in its rentalagreement, for liability arising from the negligent operation of the rentalvehicle;

(2)        Accident and healthinsurance that provides coverage to renters and other vehicle occupants foraccidental death or dismemberment and for medical expenses resulting from anaccident that occurs during the rental period;

(3)        Personal effectsinsurance that provides coverage to renters and other vehicle occupants for theloss of, or damage to, personal effects that occurs during the rental period;or

(4)        Any other coveragethat the Commissioner may approve as meaningful and appropriate in connectionwith the rental of vehicles.

(f)         No insurance maybe issued pursuant to this section unless:

(1)        The rental period ofthe rental agreement does not exceed 30 consecutive days; and

(2)        At every rental carlocation where rental car agreements are executed, brochures or other writtenmaterials are readily available to the prospective renter that:

a.         Summarize, clearlyand correctly, the material terms of insurance coverage, including the identityof the insurer, offered to renters;

b.         Disclose that thesepolicies offered by the rental car company may provide a duplication ofcoverage already provided by a renter's personal automobile insurance policy,homeowner's insurance policy, personal liability insurance policy, or othersource of coverage;

c.         State that thepurchase by the renter of the kinds of insurance specified in this section isnot required in order to rent a vehicle;

d.         Describe the processfor filing a claim in the event the renter elects to purchase coverage and inthe event of a claim; and

e.         Contain anyadditional information on the price, benefits, exclusions, conditions or otherlimitations of such policies as the Commissioner may by regulation prescribe;and

(3)        Evidence of coverageis provided to every renter who elects to purchase such coverage.

(g)        Any limited licenseissued under this section shall also authorize any salaried employee of thelicensee who, pursuant to subsection (h) of this section, is trained to actindividually on behalf, and under the supervision, of the licensee with respectto the kinds of insurance specified in this section.

(h)        Each rental carcompany or franchisee licensed pursuant to this section shall conduct atraining program which shall be submitted to the commissioner for approvalprior to use and which shall meet the following minimum standards:

(1)        Each trainee shallreceive basic instruction about the kinds of insurance specified in thissection offered for purchase by prospective renters of rental vehicles;

(2)        Each trainee shallbe instructed to acknowledge to a prospective renter of a rental vehicle thatpurchase of any such insurance specified in this section is not required inorder for the renter to rent a vehicle; and

(3)        Each trainee shallbe instructed to acknowledge to a prospective renter of a rental vehicle thatthe renter may have insurance policies that already provide the coverage beingoffered by the rental car company pursuant to this section.

(i)         Limited licenseesacting pursuant to and under the authority of this section shall comply withall applicable provisions of this Article, except that notwithstanding anyother provision of this Article, or any rule adopted by the Commissioner, alimited licensee pursuant to this section shall not be required to treatpremiums collected from renters purchasing such insurance when renting vehiclesas funds received in a fiduciary capacity, provided that:

(1)        The insurerrepresented by the limited licensee has consented in writing, signed by theinsurer's officer, that premiums need not be segregated from funds received bythe rental car company on account of vehicle rental; and

(2)        The charges forinsurance coverage are itemized but not billed to the renter separately fromthe charges for rental vehicles.

(j)         No limitedlicensee under this section shall advertise, represent, or otherwise holditself or any of its employees themselves out as licensed insurance agents orbrokers. (1991,c. 139, s. 1; 2001‑203, s. 4.)