§ 58-45-35. Persons eligible to apply to Association for coverage; contents of application. - North Carolina Statutes

§ 58‑45‑35. Persons eligible to apply to Association for coverage; contents of application.

(a)        Any person havingan insurable interest in insurable property, may, on or after the effectivedate of the plan of operation, be entitled to apply to the Association for suchcoverage and for an inspection of the property. A broker or agent authorized bythe applicant may apply on the applicant's behalf. Each application shallcontain a statement as to whether or not there are any unpaid premiums due fromthe applicant for essential property insurance on the property.

The term "insurableinterest" as used in this subsection shall include any lawful andsubstantial economic interest in the safety or preservation of property fromloss, destruction or pecuniary damage.

(b)        If the Associationdetermines that the property is insurable and that there is no unpaid premiumdue from the applicant for prior insurance on the property, the Association,upon receipt of the premium, or part of the premium, as is prescribed in theplan of operation, shall cause to be issued a policy of essential propertyinsurance and shall offer additional extended coverage, optional perilsendorsements, business income and extra expense coverage, crime insurance,separate policies of windstorm and hail insurance, or their successor forms ofcoverage, for a term of one year or three years. Short term policies may alsobe issued. Any policy issued under this section shall be renewed, uponapplication, as long as the property is insurable property.

(b1)      If the Associationdetermines that the property, for which application for a homeowners' policy ismade, is insurable, that there is no unpaid premium due from the applicant forprior insurance on the property, and that the underwriting guidelines establishedby the Association and approved by the Commissioner are met, the Association,upon receipt of the premium, or part of the premium, as is prescribed in theplan of operation, shall cause to be issued a homeowners' insurance policy.

(c)        If the Association,for any reason, denies an application and refuses to cause to be issued aninsurance policy on insurable property to any applicant or takes no action onan application within the time prescribed in the plan of operation, theapplicant may appeal to the Commissioner and the Commissioner, or theCommissioner's designee from the Commissioner's staff, after reviewing thefacts, may direct the Association to issue or cause to be issued an insurancepolicy to the applicant. In carrying out the Commissioner's duties under thissection, the Commissioner may request, and the Association shall provide, anyinformation the Commissioner deems necessary to a determination concerning thereason for the denial or delay of the application.

(d)        An agent who islicensed under Article 33 of this Chapter as an agent of a company which is amember of the Association established under this Article shall not be deemed anagent of the Association. The foregoing notwithstanding, an agent of a companywhich is a member of the Association shall have the authority, subject to theunderwriting guidelines established by the Association, to temporarily bindcoverage with the Association. The Association shall establish rules andprocedures, including any limitations for binding authority, in the plan ofoperation.

Any unearned premium on thetemporary binder shall be returned to the policyholder if the Associationrefuses to issue a policy. Nothing in this section shall prevent theAssociation from suspending binding authority in accordance with its plan ofoperation.

(e)        Policies ofwindstorm and hail insurance provided for in subsection (b) of this section areavailable only for risks in the beach and coastal areas for which essentialproperty insurance has been written by licensed insurers. Whenever such otheressential property insurance written by licensed insurers includes replacementcost coverage, the Association shall also offer replacement cost coverage. Inorder to be eligible for a policy of windstorm and hail insurance, theapplicant shall provide the Association, along with the premium payment for thewindstorm and hail insurance, a certificate that the essential propertyinsurance is in force. The policy forms for windstorm and hail insurance shallbe filed by the Association with the Commissioner for the Commissioner'sapproval before they may be used. Catastrophic losses, as determined by theAssociation and approved by the Commissioner, that are covered under thewindstorm and hail coverage in the beach and coastal areas shall be adjusted bythe licensed insurer that issued the essential property insurance and not bythe Association. The Association shall reimburse the insurer for reasonableexpenses incurred by the insurer in adjusting windstorm and hail losses. (1967, c. 1111, s. 1; 1969,c. 249; 1985, c. 516, s. 2; 1985 (Reg. Sess., 1986), c. 1027, s. 22; 1987, c.421, ss. 1, 2; c. 629, s. 11; c. 864, s. 24; 1987 (Reg. Sess., 1988), c. 975,ss. 21‑23; 1989, c. 376; c. 485, s. 26; 1991, c. 720, s. 25; 1991 (Reg.Sess., 1992), c. 784, s. 1; 1995, c. 517, s. 28; 1995 (Reg. Sess., 1996), c.740, s. 1; 1997‑498, ss. 5, 6; 2001‑421, s. 4.1; 2002‑185, s.4.1; 2003‑158, s. 2.)