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2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-95 - Excess insurance and reinsurance.

§ 58-47-95. Excess insurance and reinsurance.
(a) Each group, on or before its effective date of operation and on a continuing basis thereafter, shall maintain specific and aggregate excess loss coverage through an insurance policy or reinsurance contract. Groups shall maintain limits and retentions commensurate with their exposures. A group's retention shall be the lowest retention suitable for groups with similar exposures and annual premium. The Commissioner may require different levels, or waive the requirement, of specific and aggregate excess loss coverage consistent with the market availability of excess loss coverage, the group's claims experience, and the group's financial condition.
(b) Any excess insurance policy or reinsurance contract under this section shall be issued by a licensed insurance company, a licensed captive insurance company, an approved surplus lines insurance company, or an accredited reinsurer, and shall:
(1) Provide for at least 30 days' written notice of cancellation by certified mail, return receipt requested, to the group and to the Commissioner.
(2) Be renewable automatically at its expiration, except upon 30 days' written notice of nonrenewal by certified mail, return receipt requested, to the group and to the Commissioner.
(c) Every group shall provide to the Commissioner evidence of its excess insurance or reinsurance coverage, and any amendments, within 30 days after their effective dates. Every group shall, at the request of the Commissioner, furnish copies of any excess insurance policies or reinsurance contracts and any amendments. (1997-362, s. 3; 2013-116, s. 4.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-100 - Examinations.

§ 58-47-100. Examinations.
G.S. 58-2-131 through G.S. 58-2-134 apply to groups. (1997-362, s. 3; 1999-132, s. 11.7.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-105 - Dividends and other distributions.

§ 58-47-105. Dividends and other distributions.
(a) Group dividends and other distributions shall be made in accordance with G.S. 58-7-130, 58-8-25(b), and 58-19-30. A group shall be in compliance with this Part before payment of dividends or other distributions to its members. No group shall pay dividends or other distributions to its members until two years after the group's licensing date.
(b) Payment of dividends to the members of any group shall not be contingent upon the maintenance or continuance of membership in the group. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-115 - Premium payment requirements.

§ 58-47-115. Premium payment requirements.
Groups shall collect members' premiums for each policy period in a manner so that at no time the sum of a member's premium payments is less than the total estimated earned premium for that member. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-125 - Admission and termination of group members.

§ 58-47-125. Admission and termination of group members.
(a) Prospective group members shall submit applications for membership to the board. The board, a designated employee of the group, or TPA shall approve an application for membership under the bylaws of the group. Members shall have bona fide offices in this State and members' employees shall be primarily engaged in business activities within this State. Members shall receive certificates of coverage from the board on a form acceptable to the Commissioner.
(b) The group shall make available to the Commissioner properly executed applications and indemnity agreements for all members, on forms prescribed by the Commissioner. If the applications and indemnity agreements are not executed properly and maintained, the Commissioner may order the group to cease writing all new business until all of the agreements are executed properly and obtained.
(c) Members may elect to terminate their participation in a group and may be terminated by the group under subsection (d) of this section and the bylaws of the group.
(d) A group may terminate a member's participation in the group on 30 days' written notice to the member. A group may terminate a member's participation in the group for nonpayment of premium on 10 days' written notice to the member. A member may terminate its participation in the group on 10 days' written notice to the group. Notices under this subsection shall be given by certified mail, return receipt requested. No termination by the group is effective until the notice is received by the member. (1997-362, s. 3; 2001-451, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-130 - Disclosure.

§ 58-47-130. Disclosure.
Every group through its board, TPA, service company, agents, or other representatives shall require, before accepting an application, each applicant for membership to acknowledge in writing that the applicant has received the following:
(1) A document disclosing that the members are jointly and severally liable for the obligations of the group.
(2) A copy of the group's plan of assessment.
(3) The amount of specific and aggregate stop loss or excess insurance or reinsurance carried by the group, the amount and kind of risk retained by the group, and the name and rating of the insurer providing stop loss, excess insurance, or reinsurance. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-135 - Assessment plan and indemnity agreement.

§ 58-47-135. Assessment plan and indemnity agreement.
(a) Each group shall establish an assessment plan that provides for a reasonable and equitable mechanism for assessing its members. The plan and any amendments shall be approved by the Commissioner. The plan shall include descriptions of the circumstances that initiate an assessment, basis, and allocation to members of the amount being assessed, and collection of the assessment.
(b) The board shall notify the Commissioner of an assessment no fewer than 60 days before an assessment.
(c) The Commissioner shall impose an assessment on members if the board or third-party administrator fails to take action to correct a hazardous financial condition.
(d) Every group shall file an indemnity agreement on a form prescribed by the Commissioner, which jointly and severally binds the members of the group to comply with the provisions of the act and pay obligations imposed by the Act. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-140 - Other provisions of this Chapter.

§ 58-47-140. Other provisions of this Chapter.
The following provisions of this Chapter apply to workers' compensation self-insurance groups that are subject to this Article:
G.S. 58-1-10, 58-2-45, 58-2-50, 58-2-70, 58-2-100, 58-2-105, 58-2-155, 58-2-161, 58-2-180, 58-2-185, 58-2-190, 58-2-200, 58-3-71, 58-3-81, 58-3-100, 58-3-120, 58-6-25, 58-7-21, 58-7-26, 58-7-30, 58-7-33, 58-7-73, and Articles 13, 19, 30, 33, 34, and 63 of this Chapter. (1997-362, s. 3; 2005-215, s. 15; 2006-226, s. 17.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-150 - Definitions.

§ 58-47-150. Definitions.
As used in this Part:
(1) "Books and records" means all files, documents, and databases in a paper form, electronic medium, or both.
(2) "Self-insurer" means a group of employers licensed by the Commissioner under Part 1 of this Article or a single employer licensed by the Commissioner under Article 5 of Chapter 97 of the General Statutes to retain its liability under the Workers' Compensation Act and to pay directly the compensation in the amount and manner and when due as provided for in the Act.
(3) "Service company" means an entity that has contracted with a self-insurer for the purpose of providing any services related to claims adjustment, loss control, or both.
(4) "Third-party administrator" or "TPA" means a person engaged by a self-insurer to execute the policies established by the self-insurer and to provide day-to-day management of the self-insurer. "Third-Party Administrator" and "TPA" does not mean:
a. A self-insurer acting on behalf of its employees or the employees of one or more of its affiliates.
b. An insurer that is licensed under this Chapter or that is acting as an insurer with respect to a policy lawfully issued and delivered by it and under the laws of a state in which the insurer is licensed to write insurance.
c. An insurance producer who is licensed by the Commissioner under Article 33 of this Chapter whose activities are limited exclusively to the sale of insurance.
d. An adjuster licensed by the Commissioner under Article 33 of this Chapter whose activities are limited to adjustment of claims.
e. An individual who is an officer, a member, or an employee of a board.
(5) "Underwriting" means the process of selecting risks and classifying them according to their degrees of insurability so that the appropriate rates may be assigned. The process also includes rejection of those risks that do not qualify. (1997-362, s. 3; 2022-46, s. 14(qqq).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-155 - TPAs and service companies; authority; qualifications.

§ 58-47-155. TPAs and service companies; authority; qualifications.
(a) No person shall act as, offer to act as, or hold himself or herself out as a TPA or a service company with respect to risks located in this State for a self-insurer unless that person complies with this Article.
(b) A TPA or service company shall post with the self-insurer a fidelity bond or other appropriate coverage, issued by an authorized insurer, in a form acceptable to the Commissioner, in an amount commensurate with the risk, and with the governing board of the self-insurer as obligee or beneficiary.
(c) A TPA or service company shall maintain errors and omissions coverage or other appropriate liability insurance in a form acceptable to the Commissioner and in an amount commensurate with the risk. The governing body of the self-insurer shall be obligee or beneficiary of the coverage or insurance.
(d) If the Commissioner determines that a TPA or service company or any other person has not materially complied with this Article or with any rule adopted or order issued under this Article, after notice and opportunity to be heard, the Commissioner may order for each separate violation a civil penalty under G.S. 58-2-70(d).
(e) If the Commissioner finds that because of a material noncompliance that a self-insurer has suffered any loss or damage, the Commissioner may maintain a civil action brought by or on behalf of the self-insurer and its covered members or persons and creditors for recovery of compensatory damages for the benefit of the self-insurer and its covered members or persons and creditors, or for other appropriate relief.
(f) Nothing in this Article affects the Commissioner's right to impose any other penalties provided for in this Chapter or limits or restricts the rights of covered members or persons, claimants, and creditors.
(g) If an order of rehabilitation or liquidation of the self-insurer has been entered under Article 30 of this Chapter, and the receiver appointed under that order determines that the TPA or service company or any other person has not materially complied with this Article or any rule adopted or order issued under this Article, and the self-insurer suffered any loss or damage from the noncompliance, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the self-insurer. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-160 - Written agreement; composition; restrictions.

§ 58-47-160. Written agreement; composition; restrictions.
(a) No person may act as a TPA or service company without a written agreement between the TPA or service company and the self-insurer. The written agreement shall be retained by the self-insurer and the TPA or service company for the duration of the agreement and for five years thereafter. The agreement shall contain all provisions required by this Article, to the extent those requirements apply to the functions performed by the TPA or service company.
(b) Groups shall file with the Commissioner the written agreement, and any amendments to the agreement, within 30 days after execution. Single employers shall furnish the Commissioner, upon request, the written agreement and any amendments to the agreement. The information required by this section, including any trade secrets, shall be kept confidential; provided that the Commissioner may use that information in any judicial or administrative proceeding instituted against the TPA or service company.
(c) The written agreement shall set forth the duties and powers of the TPA or service company and the self-insurer. The Commissioner shall disapprove any such written agreement that:
(1) Subjects the self-insurer to excessive charges for expenses or commission.
(2) Vests in the TPA or service company any control over the management of the affairs of the self-insurer to the exclusion of the governing board of the self-insurer.
(3) Is entered into with any TPA or service company if the person acting as the TPA or service company, or any of the officers or directors of the TPA or service company, is of known bad character or has been affiliated directly or indirectly through ownership, control, management, reinsurance transactions, or other insurance or business relationships with any person known to have been involved in the improper manipulation of assets, accounts, or reinsurance.
(4) Is determined by the Commissioner to contain provisions that are not fair and reasonable to the self-insurer.
(d) The self-insurer, TPA, or service company may, by written notice, terminate the agreement as provided in the agreement. The self-insurer may suspend the underwriting authority of the TPA during the pendency of any dispute regarding the cause for termination of the agreement. The self-insurer shall fulfill any lawful obligations with respect to policies affected by the agreement, regardless of any dispute between the self-insurer and the TPA or service company.
(e) The contract may not be assigned in whole or part by the TPA or service company without prior approval by the governing board of the self-insurer and the Commissioner. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-165 - Books and records.

§ 58-47-165. Books and records.
(a) Every TPA or service company shall maintain and make available to the self-insurer complete books and records of all transactions performed on behalf of the self-insurer. The books and records shall be maintained by the self-insurer, TPA, or service company in accordance with G.S. 58-47-180.
(b) The Commissioner shall have access to books and records maintained by a TPA or service company for the purposes of examination, audit, or inspection. The Commissioner shall keep confidential any trade secrets contained in those books and records, including the identity and addresses of the covered members of a self-insurer, except that the Commissioner may use the information in any judicial or administrative proceeding instituted against the TPA or service company.
(c) The Commissioner may use the TPA or service company as an intermediary in the Commissioner's dealings with the self-insurer if the Commissioner determines that this will result in a more rapid and accurate flow of information from the self-insurer and will aid in the self-insurer's compliance with this Article and the Workers' Compensation Act.
(d) The self-insurer shall own the books and records generated by the TPA or service company pertaining to the self-insurer's business.
(e) The self-insurer shall have access to and rights to duplicate all books and records related to its business.
(f) If the self-insurer and the TPA or service company cancel their agreement, notwithstanding the provisions of subsection (a) of this section, the TPA or service company, shall transfer all books and records to the new TPA, service company, or the self-insurer in a form acceptable to the Commissioner. The new TPA or service company shall acknowledge, in writing, that it is responsible for retaining the books and records of the previous TPA, service company, or the self-insurer as required in subsection (a) of this section. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-170 - Payments to TPA or service company.

§ 58-47-170. Payments to TPA or service company.
If a self-insurer uses the services of a TPA, the payment to the TPA of any premiums or charges for insurance by or on behalf of the insured party is considered payment to the self-insurer. The payment of return premiums or claim payments forwarded by the self-insurer to the TPA or service company is not considered payment to the insured party or claimant until the payments are received by the insured party or claimant. This section does not limit any right of the self-insurer against the TPA or service company resulting from the failure of the TPA or service company to make payments to the self-insurer, insured parties, or claimants. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-175 - Approval of advertising.

§ 58-47-175. Approval of advertising.
A TPA or service company may use only the advertising pertaining to or affecting the business underwritten by a self-insurer that has been approved in writing by the self-insurer before its use. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-180 - Premium collection and payment of claims.

§ 58-47-180. Premium collection and payment of claims.
(a) The TPA or service company, at a minimum, shall:
(1) Periodically render an accounting to the self-insurer detailing all transactions performed by the TPA or service company pertaining to the business underwritten, premium or other charges collected, and claims paid by the self-insurer, when applicable.
(2) Deposit all receipts directly into an account maintained in the name of the self-insurer.
(3) Pay claims on drafts or checks of and authorized by the self-insurer.
(4) Not withdraw from the self-insurer's account except for authority limited to pay claims and refund premiums.
(5) Remit return premium, directly from the self-insurer's account, to the person entitled to the return premium.
(b) Any check disbursement authority granted to the TPA or service company may be terminated upon the self-insurer's written notice to the TPA or service company or upon termination of the agreement. The self-insurer may suspend the check disbursement authority during the pendency of any dispute regarding the cause for termination. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-185 - Notices; disclosure.

§ 58-47-185. Notices; disclosure.
(a) When the services of a TPA are used, the TPA shall provide a written notice approved by the self-insurer to covered members advising them of the identity of, and relationship among, the TPA, the member, and the self-insurer.
(b) When a TPA collects funds, the reason for collection of each item shall be identified to the member and each item shall be shown separately from any premium. Additional charges may not be made for services to the extent the services have been paid for by the self-insurer.
(c) The TPA shall disclose to the self-insurer all charges, fees, and commissions received from all services in connection with the provision of administrative services for the self-insurer, including any fees or commissions paid by self-insurers for obtaining reinsurance.
(d) The TPA or service company shall disclose to the self-insurer the nature of other business in which it is involved. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-190 - Compensation.

§ 58-47-190. Compensation.
A TPA or service company shall not enter into any agreement or understanding with a self-insurer that makes the amount of the TPA's or service company's commissions, fees, or charges contingent upon savings affected in the adjustment, settlement, and payment of losses covered by the self-insurer's obligations. This section does not prohibit a TPA or service company from receiving performance-based compensation for providing medical services through a physician-based network or auditing services and does not prevent the compensation of a TPA or service company from being based on premiums or charges collected or the number of claims paid or processed. (1997-362, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-195 - Examinations.

§ 58-47-195. Examinations.
TPAs and service companies may be examined under G.S. 58-2-131 through G.S. 58-2-134. (1997-362, s. 3; 1999-132, s. 11.8.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 47 - Workers' Compensation Self-Insurance. › § 58-47-205 - Other requirements.

§ 58-47-205. Other requirements.
(a) A TPA or service company, or any owner, officer, employee, or agent of a TPA or service company, or any other person affiliated with or related to the TPA or service company shall not:
(1) Serve as a trustee of a self-insurer.
(2) Make a contribution to the surplus of a self-insurer.
(b) Each TPA or service company shall make available for inspection by the Commissioner copies of all contracts with persons using the services of the TPA. (1997-362, s. 3; 2009-172, s. 4.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-5 - Purpose of Article.

§ 58-48-5. Purpose of Article.
The purpose of this Article is to provide a mechanism for the payment of covered claims under certain insurance policies, to avoid excessive delay in payment, and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detection and prevention of insurer insolvencies, and to provide an association to assess the cost of such protection among insurers. (1971, c. 670, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-10 - Scope.

§ 58-48-10. Scope.
This Article shall apply to all kinds of direct insurance, but shall not be applicable to:
(1) Life, annuity, accident and health or disability insurance;
(2) Mortgage guaranty, financial guaranty or other forms of insurance offering protection against investment risks;
(3) Fidelity or surety bonds, or any other bonding obligations;
(4) Credit insurance, vendors' single interest insurance, collateral protection insurance, or any similar insurance protecting the interests of a creditor arising out of a creditor-debtor transaction;
(5) Insurance of warranties or service contracts;
(6) Title insurance;
(7) Ocean marine insurance;
(8) Repealed by Session Laws 1991 (Regular Session, 1992), c. 802, s. 1.
(9) Any transaction or combination of transactions between a person (including affiliates of such person) and an insurer (including affiliates of such insurer) which involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk;
(10) Insurance written on a retroactive basis to cover known or unknown losses which have resulted from an event with respect to which a claim has already been made, and the claim is known to the insurer at the time the insurance is bound. (1971, c. 670, s. 1; 1989, c. 206, s. 1; 1991 (Reg. Sess., 1992), c. 802, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-15 - Construction.

§ 58-48-15. Construction.
This Article shall be liberally construed to effect the purpose under G.S. 58-48-5 which shall constitute an aid and guide to interpretation. (1971, c. 670, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-25 - Creation of the Association.

§ 58-48-25. Creation of the Association.
There is created a nonprofit, unincorporated legal entity to be known as the North Carolina Insurance Guaranty Association. All insurers defined as member insurers in G.S. 58-48-20(6) shall be and remain members of the Association as a condition of their authority to transact insurance in this State. The Association shall perform its functions under a plan of operation established and approved under G.S. 58-48-40 and shall exercise its powers through a board of directors established under G.S. 58-48-30. For purposes of administration and assessment, the Association shall be divided into three separate accounts: (i) the automobile insurance account; (ii) the workers' compensation account; and (iii) the account for all other insurance to which the Article applies. Each person becoming a member insurer after October 1, 1985, shall pay to the Association upon demand a nonrefundable initial membership fee of fifty dollars ($50.00). (1971, c. 670, s. 1; 1985, c. 613, s. 4; 1991 (Reg. Sess., 1992), c. 802, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-30 - Board of directors.

§ 58-48-30. Board of directors.
(a) The board of directors of the Association shall consist of not less than five nor more than nine persons serving terms as established in the plan of operation. One non-voting member of the board shall be a property and casualty insurance producer authorized to write insurance for a member insurer, and appointed by the Commissioner; and the remaining members shall be selected by member insurers subject to the approval of the Commissioner. Vacancies of the board shall be filled for the remaining period of the term in the same manner as initial appointments. If no members are selected within 60 days after June 25, 1971, the Commissioner may appoint the initial members of the board of directors.
(b) In approving selections to the board, the Commissioner shall consider among other things whether all member insurers are fairly represented.
(c) Members of the board may be reimbursed from the assets of the Association for expenses incurred by them as members of the board of directors. (1971, c. 670, s. 1; 1987, c. 864, s. 60; 2022-46, s. 14(rrr).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-42 - Procedure for appeal to Commissioner from decision of Association.

§ 58-48-42. Procedure for appeal to Commissioner from decision of Association.
In any hearing called by the Commissioner for an appeal made pursuant to G.S. 58-48-40(c)(7), no later than 20 days before the hearing the appellant shall file with the Commissioner or the Commissioner's designated hearing officer and shall serve on the appellee a written statement of the appellant's case and any evidence the appellant intends to offer at the hearing. No later than five days before the hearing, the appellee shall file with the Commissioner or the Commissioner's designated hearing officer and shall serve on the appellant a written statement of the appellee's case and any evidence the appellee intends to offer at the hearing. Each hearing shall be recorded and transcribed. The cost of the recording and transcribing shall be borne equally by the appellant and the appellee. However, upon any final adjudication the prevailing party shall be reimbursed for that party's share of the costs by the other party. Each party shall, on a date determined by the Commissioner or the Commissioner's designated hearing officer, but not sooner than 15 days after delivery of the completed transcript to the party, submit to the Commissioner or the Commissioner's designated hearing officer and serve on the other party, a proposed order. The Commissioner or the Commissioner's designated hearing officer shall then issue an order. (1991, c. 644, s. 31; 1993, c. 504, s. 42.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-45 - Duties and powers of the Commissioner.

§ 58-48-45. Duties and powers of the Commissioner.
(a) The Commissioner shall:
(1) Notify the Association of the existence of an insolvent insurer not later than three days after he receives notice of the determination of the insolvency.
(2) Upon request of the board of directors, provide the Association with a statement of the net direct written premiums of each member insurer.
(b) The Commissioner may:
(1) Require that the Association notify the insureds of the insolvent insurer and any other interested parties of the determination of insolvency and of their rights under this Article. Such notification shall be by mail at their last known address, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation shall be sufficient.
(2) Suspend or revoke, after notice and hearing, the license to transact insurance in this State of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the Commissioner may levy a fine on any member insurer which fails to pay an assessment when due. Such fine shall not exceed five percent (5%) of the unpaid assessment per month, except that no fine shall be less than one hundred dollars ($100.00) per month.
(3) Revoke the designation of any servicing facility if he finds claims are being handled unsatisfactorily.
(c) Any final action or order of the Commissioner under this Article shall be subject to judicial review in accordance with the provisions of G.S. 58-2-75. (1971, c. 670, s. 1; 1999-132, s. 9.1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-50 - Effect of paid claims.

§ 58-48-50. Effect of paid claims.
(a) Any person recovering under this Article shall be deemed to have assigned his rights under the policy or at law to the Association to the extent of his recovery from the Association. Every insured or claimant seeking the protection of this Article shall cooperate with the Association to the same extent as such person would have been required to cooperate with the insolvent insurer. The Association shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except such causes of action as the insolvent insurer would have had if such sums had been paid by the insolvent insurer. In the case of an insolvent insurer operating on a plan with assessment liability, payments of claims of the Association shall not operate to reduce the liability of insureds to the receiver, liquidator, or statutory successor for unpaid assessments.
(a1) The Association shall have the right to recover from the following persons the amount of any "covered claim" paid and any and all expenses incurred, including attorneys' fees and costs of defense, in connection with any claim against the person or the person's affiliate pursuant to this Article:
(1) Any insured whose net worth on December 31 of the year next preceding the date the insurer becomes insolvent exceeds fifty million dollars ($50,000,000) and whose liability obligations to other persons are satisfied in whole or in part by payments under this Article; or
(2) Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this Article.
(b) The receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by settlements of covered claims by the Association or a similar organization in another state. The court having jurisdiction shall grant such claims priority equal to that to which the claimant would have been entitled in the absence of this Article against the assets of the insolvent insurer. The expenses of the Association or similar organization in handling claims shall be accorded the same priority as the liquidator's expenses.
(c) The Association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the Association and estimates of anticipated claims on the Association which shall preserve the rights of the Association against the assets of the insolvent insurer. (1971, c. 670, s. 1; 1989, c. 206, ss. 4, 5; 2003-167, s. 2.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-60 - Prevention of insolvencies.

§ 58-48-60. Prevention of insolvencies.
(a) Repealed by Session Laws 1989, c. 206, s. 7.
(b) To aid in the detection and prevention of insurer insolvencies, the board of directors may, upon majority vote, request that the Commissioner order an examination of any member insurer which the board in good faith believes may be in a financial condition hazardous to the policyholders or the public. Within 30 days of the receipt of such request, the Commissioner shall begin such examination. The examination may be conducted as an NAIC examination or may be conducted by such persons as the Commissioner designates. The examination report shall be treated as are other examination reports. In no event shall such examination report be released to the board of directors prior to its release to the public, but this shall not preclude the Commissioner from complying with subsection (c) below. The Commissioner shall notify the board of directors when the examination is completed. The request for an examination shall be kept on file by the Commissioner but it shall not be open to public inspection prior to the release of the examination report to the public.
(c) It shall be the duty of the Commissioner to report to the board of directors when he has reasonable cause to believe that any member insurer examined or being examined at the request of the board of directors may be insolvent or in a financial condition hazardous to the policyholders or the public.
(d) The board of directors may, upon majority vote, make reports and recommendations to the Commissioner upon any matter germane to the solvency, liquidation, rehabilitation or conservation of any member insurer. Such reports and recommendations shall not be considered public documents.
(e) The board of directors may, upon majority vote, make recommendations to the Commissioner for the detection and prevention of insurer insolvencies.
(f) The board of directors may, at the conclusion of any domestic insurer insolvency in which the Association was obligated to pay covered claims, prepare a report on the history and causes of such insolvency, based on the information available to the Association, and submit such report to the Commissioner. (1971, c. 670, s. 1; 1989, c. 206, s. 7; 1991, c. 720, s. 27; 1995, c. 360, s. 2(j).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-65 - Examination of the Association.

§ 58-48-65. Examination of the Association.
The Association shall be subject to examination and regulation by the Commissioner. The board of directors shall submit, not later than March 30 of each year, a financial report for the preceding calendar year in a form approved by the Commissioner. (1971, c. 670, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-70 - Tax exemption.

§ 58-48-70. Tax exemption.
The Association shall be exempt from payment of all fees and all taxes levied by this State or any of its subdivisions except taxes levied by its subdivisions on real or personal property. (1971, c. 670, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-80 - Immunity.

§ 58-48-80. Immunity.
There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the Association or its agents or employees, the board of directors, or the Commissioner or his representatives for any action taken by them in the performance of their powers and duties under this Article. (1971, c. 670, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-85 - Stay of proceedings; reopening of default judgments.

§ 58-48-85. Stay of proceedings; reopening of default judgments.
All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court or before any administrative agency or the North Carolina Industrial Commission shall be stayed automatically for 120 days and such additional time thereafter as may be determined by the court from the date the insolvency is determined or any ancillary proceedings are initiated in this State, whichever is later, to permit proper defense by the Association of all pending causes of action. Any party to any proceeding which is stayed pursuant to this section shall have the right, upon application and notice, to seek a vacation or modification of such stay. Any covered claims arising from any judgment under any decision, verdict or finding based on the default of the insolvent insurer or its failure to defend an insured, shall, upon application and notice by the Association be vacated and set aside by the same court in which such judgment, order, decision, verdict, or finding is entered and the Association either on its own behalf or on behalf of any insured or an insolvent insurer, shall be permitted to defend against such claim on the merits. Any party who has obtained any such judgment or order shall have the right, upon application and notice, to have the judgment or order restored if within 90 days following the entry of the judgment or order the Association has not notified such party and the court that it intends to defend the matter on the merits. (1971, c. 670, s. 1; 1989, c. 206, s. 8; 2003-167, s. 4.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-90 - Termination; distribution of funds.

§ 58-48-90. Termination; distribution of funds.
(a) The Commissioner shall by order terminate the operation of the North Carolina Insurance Guaranty Association as to any kind of insurance covered by this Article with respect to which he has found, after hearing, that there is in effect a statutory or voluntary plan which:
(1) Is a permanent plan which is adequately funded or for which adequate funding is provided; and
(2) Extends, or will extend to the North Carolina policyholders and residents protection and benefits with respect to insolvent insurers not substantially less favorable and effective to such policyholders and residents than the protection and benefits provided with respect to such kinds of insurance under this Article.
(b) The Commissioner shall by the same such order authorize discontinuance of future payments by insurers to the North Carolina Insurance Guaranty Association with respect to the same kinds of insurance; provided, the assessments and payments shall continue, as necessary, to liquidate covered claims of insurers adjudged insolvent prior to said order and the related expenses not covered by such other plan.
(c) In the event the operation of the North Carolina Insurance Guaranty Association shall be so terminated as to all kinds of insurance otherwise within its scope, the Association as soon as possible thereafter shall distribute the balance of moneys and assets remaining (after discharge of the functions of the Association with respect to prior insurer insolvencies not covered by such other plan, together with related expenses) to the insurers which are then writing in this State policies of the kinds of insurance covered by this Article and which had made payments to the Association, pro rata upon the basis of the aggregate of such payments made by the respective insurers during the period of five years next preceding the date of such order. Upon completion of such distribution with respect to all of the kinds of insurance covered by this Article, this Article shall be deemed to have expired. (1971, c. 670, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-95 - Use of deposits made by insolvent insurer.

§ 58-48-95. Use of deposits made by insolvent insurer.
(a) Notwithstanding any other provision of this Chapter pertaining to the use of deposits made by insurance companies for the protection of policyholders, the Association shall receive, upon its request, from the Commissioner and may expend, any deposit or deposits made, whether or not required by statute, by an insolvent insurer to the extent those deposits are needed by the Association first to pay the covered claims as required by this Article and then to the extent those deposits are needed to pay all expenses of the Association relating to the insurer: Provided that the Commissioner may retain and use an amount of the deposit up to ten thousand dollars ($10,000) to defray administrative costs to be incurred by the Commissioner in carrying out his powers and duties with respect to the insolvent insurer, notwithstanding G.S. 58-5-70.
(b) In, however the case of a deposit made by an insolvent domestic insurer, the Association shall receive, upon its request, from the Commissioner, the portions of the deposit made for the protection of policyholders having covered claims. As for the general deposit, those portions shall be in the proportions that the insolvent domestic insurer's domestic net direct written premiums for the preceding calendar year on the kinds of insurance in the account bears to its total net direct written premiums for the preceding calendar year on the kinds of insurance in the account.
(c) The Association shall account to the Commissioner and the insolvent insurer for all deposits received from the Commissioner under this section. After the deposits of the insolvent insurer received by the Association under this section have been expended by the Association for the purposes set out in this section, the member insurers shall be assessed as provided by this Article to pay any remaining liabilities of the Association arising under this Article. (1979, c. 628; 1985, c. 613, s. 10; c. 666, s. 41; 1987, c. 864, s. 6; 1989, c. 206, s. 9; c. 452, s. 5; 1993 (Reg. Sess., 1994), c. 678, s. 23; 2001-223, s. 24.4; 2001-487, s. 103(a).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-100 - Statute of repose; guardians ad litem; notice.

§ 58-48-100. Statute of repose; guardians ad litem; notice.
(a) Notwithstanding any other provision of law, a covered claim with respect to which settlement is not effected with the Association, or suit is not instituted against the insured of an insolvent insurer or the Association, within five years after the date of entry of the order by a court of competent jurisdiction determining the insurer to be insolvent, shall thenceforth be barred forever as a claim against the Association.
(b) As to any person under a disability described in G.S. 1-17, the Association may not invoke the bar of the period of repose provided in subsection (a) of this section unless the Association has petitioned for the appointment of a guardian ad litem for such person and the disposition of that petition has become final. If a guardian ad litem is appointed pursuant to this subsection more than four years after the date of entry of the order by a court of competent jurisdiction determining the insurer to be insolvent, the period of repose under subsection (a) of this section shall be extended for such person one year after the date of the appointment.
(c) Within six months after the Association has been activated as to an insolvent insurer, the Commissioner may request that the Association submit an amendment to the plan of operation in accordance with G.S. 58-48-40, which amendment shall be applicable only to that insolvent insurer and shall prescribe a fair, reasonable, and equitable procedure for notice to insureds and to the public. (1985, c. 613, s. 9.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-105 - Transfer of balance of security funds.

§ 58-48-105. Transfer of balance of security funds.
(a) All moneys received and paid into the Stock Workers' Compensation Security Fund under former G.S. 97-107, together with all property and securities acquired by and through the use of moneys belonging to this Fund, including interest earned upon moneys in this Fund, shall be transferred and deposited into a new account with the Association created pursuant to G.S. 58-48-115. This account shall be separate and apart from any other accounts similarly created and from all other Association funds. The Association shall be the custodian of the account, and shall administer the account in accordance with the provisions of this Article.
(b) All moneys received and paid into the Mutual Workers' Compensation Security Fund under former G.S. 97-114, together with all property and securities acquired by and through the use of moneys belonging to this Fund, including interest earned upon moneys in this Fund, shall be transferred and deposited into a new account with the Association created pursuant to G.S. 58-48-120. This account shall be separate and apart from any other accounts similarly created and from all other Association accounts. The Association shall be the custodian of the account, and shall administer the account in accordance with the provisions of this Article. (1991 (Reg. Sess., 1992), c. 802, s. 6.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 48 - Postassessment Insurance Guaranty Association. › § 58-48-110 - Purpose of the accounts.

§ 58-48-110. Purpose of the accounts.
The purpose of the accounts created in the Association pursuant to G.S. 58-48-115 and G.S. 58-48-120 of this Article shall be solely to:
(1) Receive the balance from the accounts created under former G.S. 97-107 and G.S. 97-114;
(2) Receive assessment moneys from member companies as provided in G.S. 58-48-115(a)(3), 58-48-120(b), and 58-48-120(c);
(3) Receive interest on moneys in the accounts;
(4) Pay stock or mutual carrier claims made against the security funds established under G.S. 97-107 and G.S. 97-114, but only for claims existing before January 1, 1993; and
(5) Refund to the contributing stock companies in accordance with G.S. 58-48-115 the excess moneys in the stock fund account as set forth in G.S. 58-48-115(a)(2). (1991 (Reg. Sess., 1992), c. 802, s. 7.)