§ 58-37-25. General obligations of insurers. - North Carolina Statutes

§58‑37‑25.  General obligations of insurers.

(a)        Except as otherwiseprovided in this Article all insurers as a prerequisite to the further engagingin this State in the writing of motor vehicle insurance or any componentthereof shall accept and insure any otherwise unacceptable applicant thereforwho is an eligible risk if cession of the particular coverage and coveragelimits applied for are permitted in the Facility. All such insurers shallequitably share the results of such otherwise unacceptable business through theFacility and shall be bound by the acts of their agents in accordance with theprovisions of this Article. No insurer shall impose upon any of its agents,solely on account of ceded business received from such agents, any quota ormatching requirement for any other insurance as a condition for furtheracceptance of ceded business from such agents.

(b)        Each insurer willprovide the same type of service to ceded business that it provides for itsvoluntary market. Records provided to agents and brokers will include anindication that the business is ceded. When an insurer cedes a policy orrenewal thereof to the Facility and the Facility premium for such policy ishigher than the premium that the insurer would normally charge for such policyif retained by the insurer, the policyholder will be informed that (i) hispolicy is ceded, (ii) the coverages are written at the Facility rate, whichrate differential must be specified, (iii) the reason or reasons for thecession to the Facility, (iv) the specific reason or reasons for the cession tothe Facility will be provided upon the written request of the policyholder tothe insurer, and (v) the policyholder may seek insurance through other insurerswho may elect not to cede his policy. If such policyholder obtains motorvehicle liability insurance through another insurer who elects not to cede hispolicy to the Facility and the policyholder cancels his ceded policy within 45days of the effective date of such ceded policy, the earned premium for suchceded policy shall be calculated on the pro rata basis, except that the prorata calculation shall not apply to a cancellation by any insurance premiumfinance company as provided in G.S. 58‑35‑85.

(c)        Upon the writtenrequest of any eligible risk who has been notified pursuant to subsection (b)of this section that his motor vehicle insurance policy has been ceded to theFacility, the insurer ceding the insurance policy must provide in writing tothat eligible risk the specific reason or reasons for the decision to cede thatpolicy to the Facility. Proof of mailing of the written reason or reasons issufficient proof of compliance with this obligation. With regard to any noticeof cession or any written or oral communications specifying the reason or reasonsfor cession, there will be no liability on the part of, and no cause of actionof any nature will arise against, (i) any insurer or its authorizedrepresentatives, agents, or employees, or (ii) any licensed agent, broker, orpersons who furnish to the insurer information as to the reason or reasons forthe cession, for any communications or statements made by them, unless thecommunications or statements are shown to have been made in bad faith withmalice in fact. (1973, c. 818, s. 1; 1979, c. 732.)