§ 58-41-30. Loss of reinsurance. - North Carolina Statutes

§58‑41‑30.  Loss of reinsurance.

An insurer may cancel orrefuse to renew a kind of insurance when the cancellation or nonrenewal isnecessary because of a loss of or substantial reduction in applicablereinsurance, by filing a plan with the Commissioner pursuant to therequirements of this section.  The insurer's plan must be filed with theCommissioner at least 15 business days prior to the issuance of any notice ofcancellation or nonrenewal.  The insurer may implement its plan upon theapproval of the Commissioner, which shall be granted or denied in writing, withthe reasons for his actions, within 15 business days of the Commissioner'sreceipt of the plan.  Any plan submitted for approval shall contain acertification by an elected officer of the company:

(1)        That the loss orsubstantial change in applicable reinsurance necessitates the cancellation ornonrenewal action;

(2)        That the insurer hasmade a good faith effort to obtain replacement reinsurance but was unable to doso because of the unavailability or unaffordability of replacement reinsurance;

(3)        Identifying thecategory of risks, the total number of risks written by the company in thatcategory, and the number of risks intended to be cancelled or not renewed;

(4)        Identifying thetotal amount of the insurer's net retention for the risks intended to becancelled or not renewed;

(5)        Identifying thetotal amount of risk ceded to each reinsurer and the portion of that total thatis no longer available;

(6)        Explaining how theloss of or reduction in reinsurance affects the insurer's risks throughout thekind of insurance proposed for cancellation or nonrenewal;

(7)        Explaining whycancellation or nonrenewal is necessary to cure the loss of or reduction inreinsurance; and

(8)        Explaining how thecancellations or nonrenewals, if approved, will be implemented and the stepsthat will be taken to ensure that the cancellation or nonrenewal decisions willnot be applied in an arbitrary, capricious, or unfairly discriminatory manner. (1985(Reg. Sess., 1986), c. 1027, s. 14.)