§ 58-57-71. Enforcement and penalties. - North Carolina Statutes

§ 58‑57‑71. Enforcement and penalties.

(a)        The Commissionermay, after notice and opportunity for a hearing, impose civil penalties orpetition for restitution under G.S. 58‑2‑70, revoke, suspend, orrestrict the license of any insurer if:

(1)        The insurer fails orrefuses to comply with any law, order, or rule applicable to the insurer.

(2)        The insurer'sfinancial condition is unsound, or its assets above its liabilities, exclusiveof capital, are less than the amount of its capital or required minimum surplus.

(3)        The insurer haspublished or made to the Department or to the public any false statement orreport.

(4)        The insurer or anyof the insurer's officers, directors, employees, or other representativesrefuse to submit to any examination authorized by law or refuse to perform anylegal obligation in relation to an examination.

(5)        The insurer is foundto make a practice of unduly engaging in litigation or of delaying theinvestigation of claims or the adjustment or payment of valid claims.

(b)        Any suspension,revocation, or refusal to renew an insurer's license under this section mayalso be made applicable to the license or registration of any individualregulated under this Chapter who is a party to any of the causes for licensingsanctions listed in subsection (a) of this section.

(c)        The Commissionermay impose a civil penalty under G.S. 58‑2‑70 if an insurer failsto acknowledge a claim within 30 days after receiving written or electronicnotice of the claim, but only if the notice contains sufficient information forthe insurer to identify the specific coverage involved. Acknowledgment of theclaim shall be one of the following:

(1)        A statement made tothe claimant or to the claimant's legal representative advising that the claimis being investigated.

(2)        Payment of theclaim.

(3)        A bona fide writtenoffer of settlement.

(4)        A written denial ofthe claim. With respect to a claim under an accident, health, or disabilitypolicy, if the acknowledgment sent to the claimant indicates that the claimremains under investigation, within 45 days after receipt by the insurer of theinitial claim, the insurer shall send a claim status report to the insured andevery 45 days thereafter until the claim is paid or denied. The report shallgive details sufficient for the insured to understand why processing of theclaim has not been completed and whether the insurer needs additionalinformation to process the claim. If the claim acknowledgment includesinformation about why processing of the claim has not been completed andindicates whether additional information is needed, it may satisfy therequirement for the initial claim status report.

(d)        If a foreigninsurance company's license is suspended or revoked, the Commissioner shallcause written notification of the suspension or revocation to be given to allof the company's agents in this State. Until the Commissioner restores thecompany's license, the company shall not write any new business in this State.

(e)        The Commissionermay, after considering the standards under G.S. 58‑30‑60(b),restrict an insurer's license by prohibiting or limiting the kind or amount ofinsurance written by that insurer. For a foreign insurer, this restrictionrelates to the insurer's business conducted in this State. The Commissioner shallremove any restriction under this subsection once the Commissioner determinesthat the operations of the insurer are no longer hazardous to the public or theinsurer's policyholders or creditors. (2005‑181, s. 6.)