§ 58-62-56. Prevention of delinquencies. - North Carolina Statutes

§58‑62‑56.  Prevention of delinquencies.

(a)        To aid in thedetection and prevention of insurer delinquencies, it is the Commissioner'sduty to:

(1)        Notify insuranceregulators when revoking or suspending the license of a member insurer, ormaking any formal order that the insurer restrict its premium writing, obtainadditional contributions to surplus, withdraw from this State, reinsure all orany part of its business, or increase capital, surplus, or any other accountfor the security of policyholders or creditors. That notice shall be sentelectronically through the NAIC headquarters and mailed to all insuranceregulators within 30 days following the action taken or the date on which theaction occurs.

(2)        Report to the Boardwhen the Commissioner has taken any of the actions in subdivision (1) of thissubsection or has received a report from another insurance regulator indicatingthat any such action has been taken in another state. The report to the Boardshall contain all significant details of the action taken or the reportreceived from another insurance regulator.

(3)        Report to the Boardwhen the Commissioner has reasonable cause to believe from any examination,whether completed or in process, of any member insurer that the insurer may bedelinquent.

(4)        Furnish the Boardwith the NAIC Insurance Regulatory Information System financial test ratios anda listing of companies that are not included in the ratios developed by theNAIC; and the Board may use that data in carrying out its duties and responsibilitiesunder this section. The data shall be kept confidential by the Board until itis made public by the Commissioner or another lawful authority.

(b)        The Commissionermay seek the advice and recommendations of the Board concerning any matteraffecting the Commissioner's duties and responsibilities regarding thefinancial condition of member insurers and other entities seeking admission totransact insurance business in this State.

(c)        The Board may, uponmajority vote, make reports and recommendations to the Commissioner upon anymatter germane to the solvency, liquidation, rehabilitation, or conservation ofany member insurer or germane to the solvency of any company seeking to do aninsurance business in this State. The reports and recommendations are notpublic records.

(d)        The Board shall,upon majority vote, notify the Commissioner of any information indicating thatany member insurer may be delinquent.

(e)        The Board may, uponmajority vote, request that the Commissioner order an examination of any memberinsurer that the Board in good faith believes may be delinquent. Within 30 daysof the receipt of the request, the Commissioner shall begin the examination.The examination may be conducted as an NAIC examination or may be conducted bypersons the Commissioner designates. The examination report shall be treated asare other examination reports. In no event shall the examination report bereleased to the Board before its release to the public; but this does notpreclude the Commissioner from complying with subsection (a) of this section. The Commissioner shall notify the Board when the examination is completed.  Therequest for an examination shall be kept on file by the Commissioner, but shallnot be open to public inspection before the release of the examination reportto the public.

(f)         The Board may,upon majority vote, make recommendations to the Commissioner for the detectionand prevention of insurer delinquencies.

(g)        The Board shall, atthe conclusion of any insurer insolvency in which the Association was obligatedto pay covered claims, prepare a report to the Commissioner containing anyinformation that it has in its possession bearing on the history and causes ofthe insolvency.  The Board shall cooperate with the boards of directors of guarantyassociations in other states in preparing a report on the history and causes ofinsolvency of a particular insurer, and the Board may adopt by reference anyreport prepared by such other associations. (1991, c. 681, s. 56; 1995, c. 360, s. 2(k).)