reglab/statecodes huggingface dataset:
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-167 - Authority to indemnify.

§ 58-65-167. Authority to indemnify.
(a) Except as provided in subsection (d), a corporation may indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if:
(1) He conducted himself in good faith; and
(2) He reasonably believed (i) in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests; and (ii) in all other cases, that his conduct was at least not opposed to its best interests; and
(3) In the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsection (a)(2)(ii).
(c) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of no contest or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section.
(d) A corporation may not indemnify a director under this section:
(1) In connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or
(2) In connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him.
(e) Indemnification permitted under this section in connection with a proceeding by or in the right of the corporation that is concluded without a final adjudication on the issue of liability is limited to reasonable expenses incurred in connection with the proceeding.
(f) The authorization, approval or favorable recommendation by the board of directors of a corporation of indemnification, as permitted by this section, shall not be deemed an act or corporate transaction in which a director has a conflict of interest, and no such indemnification shall be void or voidable on such ground. (1989 (Reg. Sess., 1990), c. 1071, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-168 - Mandatory indemnification.

§ 58-65-168. Mandatory indemnification.
Unless limited by its articles of incorporation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding. (1989 (Reg. Sess., 1990), c. 1071, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-169 - Advance for expenses.

§ 58-65-169. Advance for expenses.
Expenses incurred by a director in defending a proceeding may be paid by the corporation in advance of the final disposition of such proceeding as authorized by the board of directors in the specific case or as authorized or required under any provision in the articles of incorporation or bylaws or by any applicable resolution or contract upon receipt of an undertaking by or on behalf of the director to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation against such expenses. (1989 (Reg. Sess., 1990), c. 1071, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-170 - Court-ordered indemnification.

§ 58-65-170. Court-ordered indemnification.
Unless a corporation's articles of incorporation provide otherwise, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice the court considers necessary may order indemnification if it determines:
(1) The director is entitled to mandatory indemnification under G.S. 58-65-168, in which case the court shall also order the corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnification; or
(2) The director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standard of conduct set forth in G.S. 58-65-167 or was adjudged liable as described in G.S. 58-65-167(d), but if he was adjudged so liable his indemnification is limited to reasonable expenses incurred. (1989 (Reg. Sess., 1990), c. 1071, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-171 - Determination and authorization of indemnification.

§ 58-65-171. Determination and authorization of indemnification.
(a) A corporation may not indemnify a director under G.S. 58-65-167 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he has met the standard of conduct set forth in G.S. 58-65-167.
(b) The determination shall be made:
(1) By the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding;
(2) If a quorum cannot be obtained under subdivision (1), by majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding;
(3) By special legal counsel (i) selected by the board of directors or its committee in the manner prescribed in subdivision (1) or (2); or (ii) if a quorum of the board of directors cannot be obtained under subdivision (1) and a committee cannot be designated under subdivision (2), selected by majority vote of the full board of directors (in which selection directors who are parties may participate); or
(4) By the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding may not be voted on the determination.
(c) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subsection (b)(3) to select counsel. (1989 (Reg. Sess., 1990), c. 1071, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-172 - Indemnification of officers, employees, and agents.

§ 58-65-172. Indemnification of officers, employees, and agents.
Unless a corporation's articles of incorporation provide otherwise:
(1) An officer of the corporation is entitled to mandatory indemnification under G.S. 58-65-168 and is entitled to apply for court-ordered indemnification under G.S. 58-65-170, in each case to the same extent as a director;
(2) The corporation may indemnify and advance expenses under this Part to an officer, employee, or agent of the corporation to the same extent as to a director; and
(3) A corporation may also indemnify and advance expenses to an officer, employee, or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, general or specific action of its board of directors, or contract. (1989 (Reg. Sess., 1990), c. 1071, s. 1; 1995, c. 193, s. 56.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-174 - Application of Part.

§ 58-65-174. Application of Part.
(a) If articles of incorporation limit indemnification or advance for expenses, indemnification and advance for expenses are valid only to the extent consistent with the articles.
(b) This Part does not limit a corporation's power to pay or reimburse expenses incurred by a director in connection with his appearance as a witness in a proceeding at a time when he has not been made a named defendant or respondent to the proceeding.
(c) This Part shall not affect rights or liabilities arising out of acts or omissions occurring before October 1, 1990. (1989 (Reg. Sess., 1990), c. 1071, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-175 - Definitions.

§ 58-65-175. Definitions.
The following definitions apply in this Part:
(1) Affiliate. – As defined in G.S. 58-19-5.
(2) Control. – As defined in G.S. 58-19-5.
(3) Executive officer. – As defined in G.S. 58-19-5.
(4) Nonprofit holding corporation. – A domestic corporation formed in connection with a reorganization and operating under Chapter 55A of the General Statutes that directly or indirectly through another domestic corporation operating under Chapter 55A of the General Statutes holds all the membership interests in a hospital service corporation and is the ultimate controlling person of the hospital service corporation. A nonprofit holding corporation is not (i) a "company," "insurance company," or "insurer," as those terms are defined in G.S. 58-1-5, or (ii) a "hospital service corporation," as defined in G.S. 58-65-1.1.
(5) Reorganization. – A transaction or series of transactions in which a nonprofit holding corporation is created by or on behalf of a hospital service corporation to hold, directly or indirectly through another domestic corporation operating under Chapter 55A of the General Statutes, membership interests in the hospital service corporation and becomes the ultimate controlling person of the hospital service corporation.
(6) Subsidiary. – As defined in G.S. 58-19-5.
(7) Ultimate controlling person. – As defined in G.S. 58-19-5. (2023-33, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-177 - Reorganization.

§ 58-65-177. Reorganization.
(a) Hospital Service Corporation to Be Held by Nonprofit Holding Corporation. – Notwithstanding any other provision of this Article, a hospital service corporation may have a nonprofit holding corporation as its ultimate controlling person.
(b) Reorganization Not a Change of Control. – A reorganization shall be considered an internal restructuring that does not have the effect of changing or influencing the control of the hospital service corporation. A reorganization shall not be considered a change of control of the hospital service corporation and shall not be subject to the provisions of G.S. 58-19-15.
(c) Transfers in Connection with Reorganization. – Notwithstanding any other provision of this Article, as part of a reorganization, a hospital service corporation may transfer cash, investments, or equity ownership interests in affiliates or subsidiaries to the nonprofit holding corporation and its subsidiaries by dividend, distribution, or otherwise. The total statutory value of cash, investments, and ownership interests in affiliates or subsidiaries, net of liabilities, transferred as part of a reorganization shall not exceed twenty-five percent (25%) of the hospital service corporation's admitted assets as of its most current annual statement filed with the Commissioner. Any affiliate or subsidiary of the hospital service corporation transferred as part of a reorganization shall not be an insurer engaged in the issuance of health insurance policies.
(d) Compensation. – A director, officer, or employee of the hospital service corporation shall not receive any fee, commission, additional compensation, or other valuable consideration for aiding, promoting, or assisting in a reorganization. This subsection does not apply to compensation paid in the ordinary course of business. (2023-33, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-178 - Approval by Commissioner.

§ 58-65-178. Approval by Commissioner.
Compliance with G.S. 58-19-30 and this Part shall be the exclusive means of approval to permit a reorganization, and the provisions of G.S. 58-19-10(b), 58-65-131, 58-65-132, and 58-65-133 shall not apply to a reorganization. (2023-33, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-179 - Charter amendments.

§ 58-65-179. Charter amendments.
(a) Notwithstanding (i) any law of this State to the contrary or (ii) anything to the contrary in the bylaws or charter of the hospital service corporation, a hospital service corporation may, by action of its governing board, authorize a reorganization and propose corresponding amendments to its charter. Proposed amendments shall be submitted to the Commissioner for approval, and the Commissioner shall approve the proposed amendments no later than 30 days after receiving the application unless the proposed amendments do not comply with Chapter 55A of the General Statutes.
(b) Any provision of this Article relating to the procedure for amending a charter, other than the provisions of this Part, is inapplicable. (2023-33, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-180 - Information to be provided by a hospital service corporation.

§ 58-65-180. Information to be provided by a hospital service corporation.
(a) A hospital service corporation reorganizing pursuant to this Part shall file the following information with the Commissioner:
(1) A description of the transactions that effectuate the reorganization.
(2) A copy of any proposed amendments to the hospital service corporation's charter.
(3) A copy of the nonprofit holding corporation's articles of incorporation.
(4) If applicable, any information required by G.S. 58-19-30.
(5) A pro forma balance sheet and income statement for the hospital service corporation prepared in accordance with statutory accounting principles, demonstrating the hospital service corporation's financial position at the effective time of the reorganization.
(6) A pro forma balance sheet and income statement for the nonprofit holding corporation prepared in accordance with generally accepted accounting principles, demonstrating the nonprofit holding corporation's financial position at the effective time of the reorganization.
(7) A certification by an executive officer of the hospital service corporation that at the time of the reorganization the subscribers' contracts and certificates issued by the hospital service corporation shall remain in full force and effect.
(8) A certification by an executive officer of the hospital service corporation that at the time of the reorganization the governing board of the nonprofit holding corporation will be comprised solely of individuals on the governing board of the hospital service corporation.
(b) The Commissioner may contract, at the expense of the hospital service corporation, with professional advisors not otherwise a part of the Commissioner's staff to assist the Commissioner in reviewing the materials submitted pursuant to this section. These contracts are personal professional service contracts exempt from Articles 3 and 3C of Chapter 143 of the General Statutes.
(c) Upon completion of a reorganization, the hospital service corporation shall provide a notice of completion of the reorganization to the Commissioner.
(d) Information submitted as part of a reorganization that constitutes trade secrets or personal information, including addresses, shall be confidential by law and privileged, shall not be considered a public record under either G.S. 58-2-100 or Chapter 132 of the General Statutes, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. (2023-33, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 65 - Hospital Service Corporations. › § 58-65-183 - Operation of hospital service corporation.

§ 58-65-183. Operation of hospital service corporation.
(a) A reorganization does not change (i) the legal form of the hospital service corporation or (ii) the hospital service corporation's license to do business in North Carolina. Any subscribers' contracts and certificates issued by the hospital service corporation shall remain in full force and effect.
(b) The hospital service corporation shall continue to be subject to this Article and Article 66 of this Chapter, except for the following:
(1) Neither a reorganization nor any other transaction permitted by this Part shall constitute or require a conversion of the hospital service corporation pursuant to G.S. 58-65-131, 58-65-132, 58-65-133, or any other law of this State.
(2) Neither a reorganization nor any other transaction permitted by this Part shall require the nonprofit holding corporation, hospital service corporation, or any affiliate of either to make any distribution or payment to any person or entity. This subdivision shall not apply to distributions or payments between a nonprofit holding corporation or hospital service corporation and any of its affiliates.
(3) The hospital service corporation may make and pay direct or indirect dividends or distributions to the nonprofit holding corporation, and G.S. 58-19-10(b), 58-65-131, 58-65-132, and 58-65-133 shall not apply to such dividends or distributions, provided that such dividends or distributions satisfy the applicable standards for payment of a dividend or distribution set forth in G.S. 55A-13-02, 58-7-130, 58-19-25(d), and 58-19-30.
(4) If the hospital service corporation undertakes a conversion pursuant to G.S. 58-65-131, 58-65-132, and 58-65-133 at any time following a reorganization, then, for the purposes of that conversion, the references in G.S. 58-65-131, 58-65-132, and 58-65-133 to "fair market value of the corporation" or "value of the corporation" shall mean the fair market value of the nonprofit holding corporation and its consolidated subsidiaries. (2023-33, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 66 - Hospital Service Corporation Readable Insurance Certificates Act. › § 58-66-1 - Title.

§ 58-66-1. Title.
This Article is known and may be cited as the "Hospital Service Corporation Readable Insurance Certificates Act." (1979, 2nd Sess., c. 1161, s. 1; 2021-169, s. 3(b).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 66 - Hospital Service Corporation Readable Insurance Certificates Act. › § 58-66-5 - Purpose.

§ 58-66-5. Purpose.
The purpose of this Article is to provide that insurance certificates and subscriber contracts under this Article and Article 65 of this Chapter be readable by a person of average intelligence, experience, and education. All insurers are required by this Article to use certificate and contract forms and, where applicable, benefit booklets that are written in simple and commonly used language, that are logically and clearly arranged, and that are printed in a legible format. (1979, 2nd Sess., c. 1161, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 66 - Hospital Service Corporation Readable Insurance Certificates Act. › § 58-66-10 - Scope of application.

§ 58-66-10. Scope of application.
(a) Except as provided in subsection (b) of this section, the provisions of this Article apply to the certificates and contracts of direct insurance and health care coverage that are described in G.S. 58-65-60(a) and (b).
(b) Nothing in this Article applies to:
(1) Any group contract or certificate, nor any group certificate delivered or issued for delivery outside of this State;
(2) Insurers who issue benefit booklets on group and nongroup bases explaining the certificates or contracts issued under G.S. 58-65-60. In such cases, the provisions of this Article apply only to the benefit booklets furnished to the persons insured, and not to the certificates.
(c) No other provision of the General Statutes setting language simplification standards shall apply to any certificate forms covered by this Article.
(d) Any non-English language certificate delivered or issued for delivery in this State shall be deemed to be in compliance with this Article if the insurer certifies that such certificate is translated from an English language certificate which does comply with this Article. (1979, 2nd Sess., c. 1161, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 66 - Hospital Service Corporation Readable Insurance Certificates Act. › § 58-66-15 - Definitions.

§ 58-66-15. Definitions.
As used in this Article, unless the context clearly indicates otherwise:
(1) "Benefit booklet" means any written explanation of insurance coverages or benefits issued by an insurer and which is supplemental to and not a part of an insurance certificate or subscriber contract.
(2) "Commissioner" means the Commissioner of Insurance.
(3) "Flesch scale analysis readability score" means a measurement of the case of readability of an insurance certificate or contract made pursuant to the procedures described in G.S. 58-66-25.
(4) "Insurance certificate or contract" or "policy" or "certificate" means an agreement as defined by G.S. 58-65-60.
(5) "Insurer" means every corporation providing contracts or certificates of coverage of insurance as described in G.S. 58-65-1. (1979, 2nd Sess., c. 1161, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 66 - Hospital Service Corporation Readable Insurance Certificates Act. › § 58-66-20 - Format requirements.

§ 58-66-20. Format requirements.
(a) All certificates and contracts covered by G.S. 58-66-35 must be printed in a type face at least as large as 10 point modern type, one point leaded, be written in a logical and clear order and form, and contain the following items:
(1) On the cover, first, or insert page of the certificate a statement that the certificate is a legal contract between the certificate owner and the insurer, and the statement, printed in larger or other contrasting type or color, "Read your certificate carefully";
(2) An index of the major provisions of the certificate, which may include the following items:
a. The person or persons insured by the certificate;
b. The applicable events, occurrences, conditions, losses, or damages covered by the certificate;
c. The limitations or conditions on the coverage of the certificate;
d. Definitional sections of the certificate;
e. Provisions governing the procedure for filing a claim under the certificate;
f. Provisions governing cancellation, renewal, or amendment of the certificate by either the insurer or the subscriber;
g. Any options under the certificate; and
h. Provisions governing the insurer's duties and powers in the event that suit is filed against the subscriber.
(b) In determining whether or not a certificate is written in a logical and clear order and form the Commissioner must consider the following factors:
(1) The extent to which sections or provisions are set off and clearly identified by titles, headings, or margin notations;
(2) The use of a more readable format, such as narrative or outline forms;
(3) Margin size and the amount and use of space to separate sections of the policy; and
(4) Contrast and legibility of the colors of the ink and paper, and the use of contrasting titles or headings for sections. (1979, 2nd Sess., c. 1161, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 66 - Hospital Service Corporation Readable Insurance Certificates Act. › § 58-66-25 - Flesch scale analysis readability score; procedures.

§ 58-66-25. Flesch scale analysis readability score; procedures.
(a) A Flesch scale analysis readability score will be measured as provided in this section.
(b) For certificates containing 10,000 words or less of text, the entire certificate must be analyzed. For certificates containing more than 10,000 words, the readability of two 200-word samples per page may be analyzed in lieu of the entire certificate. The samples must be separated by at least 20 printed lines. For the purposes of this subsection a word will be counted as five printed characters or spaces between characters.
(c) The number of words and sentences in the text must be counted and the total number of words divided by the total number of sentences. The figure obtained must be multiplied by a factor of 1.015. The total number of syllables must be counted and divided by the total number of words. The figure obtained must be multiplied by a factor of 84.6. The sum of the figures computed under this subsection subtracted from 206.835 equals the Flesch scale analysis readability score for the certificate.
(d) For the purposes of subsection (c) of this section the following procedures must be used:
(1) A contraction, hyphenated word, or numbers and letters, when separated by spaces, will be counted as one word;
(2) A unit of words ending with a period, semicolon, or colon, but excluding headings, and captions will be counted as a sentence; and
(3) A syllable means a unit of spoken language consisting of one or more letters of a word as divided by an accepted dictionary. Where the dictionary shows two or more equally acceptable pronunciations of a word, the pronunciation containing fewer syllables may be used.
(e) The term "text" as used in this section includes all printed matter except the following:
(1) The name and address of the insurer; the name, number or title of the certificate; the table of contents or index; captions and subcaptions; specification pages, schedules or tables; and
(2) Any certificate language that is drafted to conform to the requirements of any law, regulation, or agency interpretation of any state or the federal government; any certificate language required by any collectively bargained agreement; any medical terminology; and any words that are defined in the certificate: Provided, however, that the insurer submits with his filing under G.S. 58-66-30 a certified document identifying the language or terminology that is entitled to be excepted by this subdivision. (1979, 2nd Sess., c. 1161, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 66 - Hospital Service Corporation Readable Insurance Certificates Act. › § 58-66-30 - Filing requirements; duties of the Commissioner.

§ 58-66-30. Filing requirements; duties of the Commissioner.
(a) No insurer may make, issue, amend or renew any certificate or contract after the dates specified in G.S. 58-66-35 for the applicable type of insurance unless the certificate is in compliance with the provisions of G.S. 58-66-20 and 58-66-25, and unless the certificate is filed with the Commissioner for this approval. The policy will be deemed approved 90 days after filing unless disapproved within the 90-day period. The Commissioner may not unreasonably withhold this approval. Any disapproval must be delivered to the insurer in writing and must state the grounds for disapproval. Any certificate filed with the Commissioner must be accompanied by a certified Flesch scale readability analysis and test score and by the insurer's certification that the policy is, in the insurer's judgment, readable based on the factors specified in G.S. 58-66-20 and 58-66-25.
(b) The Commissioner must disapprove any certificate covered by subsection (a) of this section if he finds that:
(1) It is not accompanied by a certified Flesch scale analysis readability score of 50 or more;
(2) It is not accompanied by the insurer's certification that the certificate is, in the judgment of the insurer, readable under the standards of this Article; or
(3) It does not comply with the format requirements of G.S. 58-66-20. (1979, 2nd Sess., c. 1161, s. 1; 1995, c. 193, s. 57.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 66 - Hospital Service Corporation Readable Insurance Certificates Act. › § 58-66-35 - Application to policies; dates.

§ 58-66-35. Application to policies; dates.
(a) The filing requirements of G.S. 58-66-30 apply to all subscribers' contracts of hospital service corporations as described in G.S. 58-65-60(a) and (b) that are made, issued, amended or renewed after July 1, 1983.
(b) Repealed by Session Laws 1995, c. 193, s. 58, effective June 7, 1995. (1979, 2nd Sess., c. 1161, s. 1; 1995, c. 193, s. 58; 1995 (Reg. Sess., 1996), c. 742, s. 28; 2021-169, s. 3(c).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 66 - Hospital Service Corporation Readable Insurance Certificates Act. › § 58-66-40 - Construction.

§ 58-66-40. Construction.
(a) The provisions of this Article will not operate to relieve any insurer from any provision of law regulating the contents or provisions of insurance certificates or contracts nor operate to reduce an insured's, beneficiary's or subscriber's rights or protection granted under any statute or provision of the law.
(b) The provisions of this Article shall not be construed to mandate, require, or allow alteration of the legal effect of any provision of any insurance certificate or contract.
(c) In any action brought by a subscriber or claimant arising out of a certificate approved pursuant to this Article, the subscriber or claimant may base such an action on either or both (i) the substantive language prescribed by such other statute or provision of law, or (ii) the wording of the approved certificate. (1979, 2nd Sess., c. 1161, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-11 - Additional HMO application information.

§ 58-67-11. Additional HMO application information.
(a) In addition to the information filed under G.S. 58-67-10(c), each application shall include a description of the following:
(1) The program to be used to evaluate whether the applicant's provider network is sufficient, in numbers and types of providers, to assure that all health care services will be accessible without unreasonable delay.
(2) The program to be used for verifying provider credentials.
(3) The quality management program to assure quality of care and health care services managed and provided through the health care plan.
(4) The utilization review program for the review and control of health care services provided or paid for.
(5) The applicant's provider network and evidence of the ability of that network to provide all health care services to the applicant's prospective enrollees.
(b) G.S. 58-67-10(d) applies to the information specified in this section. (1997-519, s. 1.2.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-12 - Commissioner use of consultants and other professionals.

§ 58-67-12. Commissioner use of consultants and other professionals.
(a) The Commissioner may contract with consultants and other professionals to expedite and complete the application process, examinations, and other regulatory activities required under this Article. Costs of contracts entered into under this section shall be reimbursed by the applicant or licensee.
(b) Contracts under this section for financial, legal, examination, and other services shall not be subject to any of the following:
(1) G.S. 114-2.3.
(2) G.S. 147-17.
(3) Articles 3, 3C, and 8 of Chapter 143 of the General Statutes and any rules and procedures adopted under those Articles concerning procurement, contracting, and contract review. (2018-49, s. 2(c).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-15 - Health maintenance organization of bordering states may be admitted to do business; reciprocity.

§ 58-67-15. Health maintenance organization of bordering states may be admitted to do business; reciprocity.
A federally qualified health maintenance organization approved and regulated under the laws of a state bordering this State may be admitted to do business in this State by satisfying the Commissioner that it is fully and legally organized under the laws of that state, and that it complies with all requirements for health maintenance organizations organized within this State; provided that the bordering state has a law or regulation substantially similar to this section. (1985, c. 666, s. 69.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-20 - Issuance and continuation of license.

§ 58-67-20. Issuance and continuation of license.
(a) Before issuing or continuing any such license, the Commissioner of Insurance may make such an examination or investigation as he deems expedient. The Commissioner of Insurance shall issue a license upon the payment of the application fee prescribed in G.S. 58-67-160 and upon being satisfied on the following points:
(1) The applicant is established as a bona fide health maintenance organization as defined by this Article;
(2) The rates charged and benefits to be provided are fair and reasonable;
(3) The amounts provided as working capital are repayable only out of earned income in excess of amounts paid and payable for operating expenses and expenses of providing services and such reserve as the Department of Insurance deems adequate, as provided hereinafter;
(4) That the amount of money actually available for working capital be sufficient to carry all acquisition costs and operating expenses for a reasonable period of time from the date of the issuance of the license and that the health maintenance organization is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees. Such working capital shall initially be a minimum of one million five hundred thousand dollars ($1,500,000) for any full service medical health maintenance organization. Initial working capital for a single service health maintenance organization shall be a minimum of one hundred thousand dollars ($100,000) or such higher amount as the Commissioner shall determine to be adequate.
(b) In making the determinations required under this section, the Commissioner shall consider:
(1) The financial soundness of the health care plan's arrangements for health care services and the schedule of premiums used in connection therewith;
(2) The adequacy of working capital;
(3) Any agreement with an insurer, a hospital or medical service corporation, a government, or any other organization for insuring the payment of the cost of health care services or the provision for automatic applicability of alternative coverage in the event of discontinuance of the plan;
(4) Any agreement with providers for the provision of health care services; and
(5) Any firm commitment of federal funds to the health maintenance organization in the form of a grant, even though such funds have not been paid to the health maintenance organization, provided that the health maintenance organization certifies to the Commissioner that such funds have been committed, that such funds are to be paid to the health maintenance organization with a current fiscal year and that such funds may be used directly for operating purposes and for the benefit of enrollees of the health maintenance organization.
(c) A license shall be denied only after compliance with the requirements of G.S. 58-67-155. (1977, c. 580, s. 1; 1979, c. 876, s. 1; 1983, c. 386, s. 2; 1987, c. 631, ss. 2, 4, 8; 1987 (Reg. Sess., 1988), c. 975, s. 1; 2003-212, s. 26(n).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-25 - Deposits.

§ 58-67-25. Deposits.
(a) The Commissioner shall require a minimum deposit of five hundred thousand dollars ($500,000) for all full service medical health maintenance organizations or such higher amount as he deems necessary for the protection of enrollees.
(b) The Commissioner shall require a minimum deposit of twenty-five thousand dollars ($25,000) for all single service health maintenance organizations or such higher amount as he deems necessary for the protection of enrollees.
(c) All deposits required by this section shall be administered in accordance with the provisions of Article 5 of this Chapter. (1987, c. 631, s. 3; 2005-215, s. 18.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-30 - Management and exclusive agreements; custodial agreements.

§ 58-67-30. Management and exclusive agreements; custodial agreements.
(a) No health maintenance organization shall enter into an exclusive agency, management, or custodial agreement unless the agreement is first filed with the Commissioner and approved under this section within 45 days after filing or such reasonable extended period as the Commissioner shall specify by notice that is given within the 45 day period.
(b) The Commissioner shall disapprove an agreement submitted under subsection (a) of this section if the Commissioner determines that the agreement:
(1) Subjects the health maintenance organization to excessive charges;
(2) Extends for an unreasonable period of time;
(3) Does not contain fair and adequate standards of performance;
(4) Enables persons under the contract to manage the health maintenance organization who are not sufficiently trustworthy, competent, experienced, and free from conflict of interest to manage the health maintenance organization with due regard for the interests of its enrollees, creditors, or the public; or
(5) Contains provisions that impair the interests of the organization's enrollees, creditors, or the public. (1987, c. 631, s. 10; 2001-223, s. 20.5.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-45 - Fiduciary responsibilities.

§ 58-67-45. Fiduciary responsibilities.
Any director, officer or partner of a health maintenance organization who receives, collects, disburses, or invests funds in connection with the activities of such organization shall be responsible for such funds in a fiduciary relationship to the enrollees. (1977, c. 580, s. 1; 1979, c. 876, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-55 - Statements filed with Commissioner.

§ 58-67-55. Statements filed with Commissioner.
Every HMO subject to this Article is subject to G.S. 58-2-165. (1977, c. 580, s. 1; 1979, c. 876, s. 1; 1999-244, s. 12.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-60 - Investments.

§ 58-67-60. Investments.
With the exception of investments made in accordance with G.S. 58-67-35(a)(1) and (2) and G.S. 58-67-35(b), the funds of a health maintenance organization shall be invested or maintained only in securities, other investments, or other assets permitted by the laws of this State for the investment of assets constituting the legal reserves of life insurance companies or such other securities or investments as the Commissioner may permit. (1977, c. 580, s. 1; 1979, c. 876, s. 1; 2001-223, s. 8.18.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-65 - Prohibited practices.

§ 58-67-65. Prohibited practices.
(a) No health maintenance organization, or representative thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. For purposes of this Article:
(1) A statement or item of information shall be deemed to be untrue if it does not conform to fact in any respect which is or may be significant to an enrollee of, or person considering enrollment in, a health care plan.
(2) A statement or item of information shall be deemed to be misleading, whether or not it may be literally untrue, if, in the total context in which such statement is made or such item of information is communicated, such statement or item of information may be reasonably understood by a reasonable person, not possessing special knowledge regarding health care coverage, as indicating any benefit or advantage or the absence of any exclusion, limitation, or disadvantage of possible significance to an enrollee of, or person considering enrollment in a health care plan, if such benefit or advantage or absence of limitation, exclusion or disadvantage does not in fact exist.
(3) An evidence of coverage shall be deemed to be deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, shall be such as to cause a reasonable person, not possessing special knowledge regarding health care plans and evidences of coverage therefor, to expect benefits, services, premiums, or other advantages which the evidence of coverage does not provide or which the health care plan issuing such evidence of coverage does not regularly make available for enrollees covered under such evidence of coverage.
(b) Article 63 of this Chapter applies to health maintenance organizations and their agents and representatives.
(c) An enrollee may not be cancelled or not renewed because of any deterioration in the health of the enrollee.
(d) No health maintenance organization, unless licensed as an insurer, may use in its name, contracts, or literature any of the words "insurance", "casualty", "surety", "mutual", or any other words descriptive of the insurance, casualty, or surety business or deceptively similar to the name or description of any insurance or surety corporation doing business in this State.
(e) The HMO shall not refuse to enroll employees except when they can demonstrate they are unable to arrange adequate services.
(f) No health maintenance organization shall refuse to enroll an individual or refuse to continue enrollment of an individual in a health care plan; limit the amount, extent, or kinds of health care plans available to an individual; or charge an individual a different rate for the same health plan, because of the race, color, or national or ethnic origin of that individual. (1977, c. 580, s. 1; 1979, c. 876, s. 1; 1989, c. 485, s. 24; 1999-244, s. 14.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-66 - Collaboration with local health departments.

§ 58-67-66. Collaboration with local health departments.
A health maintenance organization and a local health department shall collaborate and cooperate within available resources regarding health promotion and disease prevention efforts that are necessary to protect the public health. (1997-474, s. 4.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-74 - Coverage for certain treatment of diabetes.

§ 58-67-74. Coverage for certain treatment of diabetes.
(a) Every health care plan written by a health maintenance organization and in force, issued, renewed, or amended on or after October 1, 1997, that is subject to this Article, shall provide coverage for medically appropriate and necessary services, including diabetes outpatient self-management training and educational services, and equipment, supplies, medications, and laboratory procedures used to treat diabetes. Diabetes outpatient self-management training and educational services shall be provided by a physician or a health care professional designated by the physician. The health maintenance organization shall determine who shall provide and be reimbursed for the diabetes outpatient self-management training and educational services. The same deductibles, coinsurance, and other limitations as apply to similar services covered under the policy, contract, or plan shall apply to the diabetes coverage required under this section.
(b) For the purposes of this section, "physician" is a person licensed to practice in this State under Article 1 or Article 7 of Chapter 90 of the General Statutes. (1997-225, s. 3.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-75 - No discrimination against mentally ill or chemically dependent individuals.

§ 58-67-75. No discrimination against mentally ill or chemically dependent individuals.
(a) Definitions. – As used in this section, the term:
(1) "Mental illness" has the same meaning as defined in G.S. 122C-3(21), with a mental disorder defined in the Diagnostic and Statistical Manual of Mental Disorders, DSM-5, or subsequent editions published by the American Psychiatric Association, except those mental disorders coded in the DSM-5 or subsequent editions as autism spectrum disorder (299.00), substance-related disorders (291.0 through 292.9 and 303.0 through 305.9), those coded as sexual dysfunctions not due to organic disease (302.70 through 302.79), and those coded as "V" codes.
(2) "Chemical dependency" has the same meaning as defined in G.S. 58-67-70, with a mental disorder defined in the Diagnostic and Statistical Manual of Mental Disorders, DSM-5 or subsequent editions published by the American Psychiatric Association.
(b) Coverage of Physical Illness. – No health maintenance organization governed by this Chapter shall, solely because an individual has or had a mental illness or chemical dependency:
(1) Refuse to enroll that individual in any health care plan covering physical illness or injury;
(2) Have a higher premium rate or charge for physical illness or injury coverages or benefits for that individual; or
(3) Reduce physical illness or injury coverages or benefits for that individual.
(b1) [Expired October 1, 2001.]
(c) Chemical Dependency Coverage Not Required. – Nothing in this section requires an HMO to offer coverage for chemical dependency, except as provided in G.S. 58-67-70.
(d) Applicability. – This section applies only to group contracts, other than excepted benefits as defined in G.S. 58-68-25. For purposes of this section, "group health insurance contracts" include MEWAs, as defined in G.S. 58-50A-1.
(e) Nothing in this section requires an insurer to cover treatment or studies leading to or in connection with sex changes or modifications and related care. (1989, c. 369, s. 2; 1991, c. 720, s. 83; 1997-259, s. 23; 1999-132, s. 4.4; 2007-268, s. 4; 2015-271, s. 4; 2019-202, s. 8; 2020-69, s. 3(h).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 67 - Health Maintenance Organization Act. › § 58-67-77 - Coverage for prostate-specific antigen (PSA) tests.

§ 58-67-77. Coverage for prostate-specific antigen (PSA) tests.
(a) Every health care plan written by a health maintenance organization and in force, issued, renewed, or amended on or after January 1, 1994, that is subject to this Article, shall provide coverage for prostate-specific antigen (PSA) tests or equivalent tests for the presence of prostate cancer. The same deductibles, coinsurance, and other limitations as apply to similar services covered under the plan shall apply to coverage for prostate-specific antigen (PSA) tests or equivalent tests for the presence of prostate cancer.
(b) As used in this section, "prostate-specific antigen (PSA) tests or equivalent tests for the presence of prostate cancer" means serological tests for determining the presence of prostate cytoplasmic protein (PSA) and the generation of antibodies to it, as a novel marker for prostatic disease.
(c) Coverage for prostate-specific antigen (PSA) tests or equivalent tests for the presence of prostate cancer shall be provided when recommended by a physician. (1993, c. 269, s. 3.)