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NORTH CAROLINA STATUTES AND CODES

§ 58-62-86. Prohibited advertisement of Article in insurance sales; notice to policyholders.

§58‑62‑86.  Prohibited advertisement of Article in insurance sales;notice to policyholders.

(a)        No person shallmake, publish, disseminate, circulate, or place before the public, or causedirectly or indirectly to be made, published, disseminated, circulated, orplaced before the public, in any newspaper, magazine, or other publication, orin the form of a notice, circular, pamphlet, letter, or poster, or over anyradio station or television station, or in any other way, any oral or writtenadvertisement, announcement, or statement that uses the existence of theAssociation or this Article for the purpose of sale or solicitation of orinducement to purchase any kind of insurance covered by this Article.  However,this subsection does not apply to the Association or any other person who doesnot sell or solicit insurance.

(b)        Within 180 daysafter the effective date of this Article, the Association shall prepare asummary document that describes the general purposes and current limitations ofthis Article and that complies with subsection (c) of this section.  Thisdocument shall be submitted to the Commissioner for the Commissioner'sapproval.  Sixty days after receiving approval, no insurer may deliver a policydescribed in G.S. 58‑62‑21(b) to any person unless the document isdelivered to that person before or at the time of delivery of the policy,unless subsection (d) of this section applies.  The document shall also beavailable upon request by a policyholder.  The distribution, delivery,contents, or interpretation of this document does not mean that either thepolicy or the policyholder would be covered in the event of the delinquency ofa member insurer.  The document shall be revised by the Association asamendments to this Article require.  Failure to receive this document does notgive any person greater rights than those stated in this Article.

(c)        The documentprepared under subsection (b) of this section shall contain a clear andconspicuous disclaimer on its face.  The Commissioner shall prescribe the formand content of the disclaimer.  The disclaimer shall:

(1)        State the name andaddresses of the Association and Department;

(2)        Prominently warn thepolicyholder that the Association may not cover the policy or, if coverage isavailable, it will be subject to substantial limitations and exclusions andconditioned on continued residence in this State;

(3)        State that theinsurer and its agents are prohibited by law from using the existence of theAssociation for the purpose of sale or solicitation of or inducement topurchase any kind of insurance;

(4)        Emphasize that theapplicant or policyholder should not rely on coverage under the Associationwhen selecting an insurer; and

(5)        Provide otherinformation as directed by the Commissioner.

(d)        No insurer or agentmay deliver a policy described in G.S. 58‑62‑21(b) and excludedunder G.S. 58‑62‑21(c) from coverage under this Article unless theinsurer or agent, before or at the time of delivery, gives the policyholder aseparate written notice that clearly and conspicuously discloses that thepolicy is not covered by the Association.  The Commissioner shall prescribe theform and content of the notice. (1991, c. 681, s. 56.)

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