§ 58-33-95. Agents personally liable; representing unlicensed company prohibited; penalty. - North Carolina Statutes

§ 58‑33‑95. Agents personally liable; representing unlicensed company prohibited; penalty.

(a)        Any person orentity who solicits, negotiates, or sells insurance or acts as a third‑partyadministrator in this State for an unauthorized insurer:

(1)        Is the representativeof that insurer and shall be strictly liable for any losses or unpaid claims ifan unauthorized insurer fails to pay in full or in part any claim or losswithin the provisions of any insurance contract sold, directly or indirectly,by or through that person or entity on behalf of the unauthorized insurer. Theliability imposed by this subsection shall be joint and several if more thanone person violates this section.

(2)        Shall be guilty of aClass 1 misdemeanor if the person or entity does not know that the insurer isan unauthorized insurer. Each solicitation, negotiation, or sale shallconstitute a separate offense.

(3)        Shall be guilty of aClass H felony if the person or entity knew or should have known that theinsurer is an unauthorized insurer. Each solicitation, negotiation, or saleshall constitute a separate offense.

(b)        A civil action maybe filed or a license revocation proceeding may be initiated under this sectionregardless of whether a criminal action is brought or a criminal conviction isobtained for the act alleged in the civil action or revocation proceeding.

(c)        For the purposes ofthis section, the status of an entity or person as an "unauthorizedinsurer" shall be determined in accordance with Article 28 of this Chapterand, if applicable, Article 49 of this Chapter.

(d)        As used in thissection, "third‑party administrator" means a person whoperforms administrative functions, including claims administration and payment,marketing, premium accounting, premium billing, coverage verification,underwriting authority, or certificate issuance in regard to any kind ofinsurance; but does not include the persons specified in G.S. 58‑56‑2(5)a.through (5)l. (1987,c. 629, s. 1; 1993, c. 539, s. 457; 1994, Ex. Sess., c. 24, s. 14(c); 2004‑166,s. 1; 2006‑105, s. 2.8; 2007‑305, s. 5.)