GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 356
Short Title: Permitted Trade Practices/Insurance Rebates.-AB (Public)
Sponsors: Representative Humphrey.
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Insurance, if favorable, Finance, if favorable, Rules, Calendar, and Operations of
the House
March 12, 2025
*H356 -v-1*
A BILL TO BE ENTITLED 1
AN ACT CLARIFYING PE RMITTED TRADE PRACTI CES WITH RESPECT TO 2
INSURANCE REBATES, A S RECOMMENDED BY THE DEPARTMENT OF 3
INSURANCE. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. G.S. 58-63-15(8)b.4. and G.S. 58-63-16 are repealed. 6
SECTION 2. G.S. 58-63-15 reads as rewritten: 7
"§ 58-63-15. Unfair methods of competition and unfair or deceptive acts or practices 8
defined. 9
The following are hereby defined as unfair methods of competition and unfair and deceptive 10
acts or practices in the business of insurance: 11
… 12
(8) Rebates. – 13
… 14
b. Nothing in subdivision (7) or paragraph a of subdivision (8) of this 15
section shall be construed as including within the definition of 16
discrimination or rebates any of the following practices: 17
… 18
5. Engaging in an arrangement that would not violate section 106 19
of the Bank Holding Company Act Amendments of 1972 (12 20
U.S.C. § 1972), as interpreted by the Board of Governors of 21
the Federal Reserve System, or section 5(q) of the Home 22
Owners' Loan Act, 12 U.S.C. § 1464(q). 23
6. The offer or provision by insurers or producers, by or through 24
employees, affiliates, or third-party representatives, of 25
value-added products or services at no or reduced cost when 26
such products or services are not specified in the policy of 27
insurance if all of the following criteria are met: 28
I. Relates to the insurance coverage and is primarily 29
designed to satisfy one or more of the following: 30
A. Providing loss mitigation or loss control. 31
B. Reducing claim costs or claim settlement costs. 32
C. Providing education about liability risks or risk 33
of loss to persons or property. 34 General Assembly Of North Carolina Session 2025
Page 2 House Bill 356-First Edition
D. Monitoring or assessing risk, identifying 1
sources of risk, or developing strategies for 2
eliminating or reducing risk. 3
E. Enhancing health. 4
F. Enhancing financial wellness through items 5
such as education or financial planning 6
services. 7
G. Providing post-loss services. 8
H. Incentivizing behavioral changes to improve 9
the health or reduce the risk of death or 10
disability of a customer. For purposes of this 11
sub-sub-sub-sub-subdivision, "customer" 12
means a policyholder, potential policyholder, 13
certificate holder, potential certificate holder, 14
insured, potential insured, or applicant. 15
I. Assisting in the administration of the employee 16
or retiree benefit insurance coverage. 17
II. The cost to the insurer or producer offering the product 18
or service to any given customer must be reasonable in 19
comparison to that customer's premiums or insurance 20
coverage for the policy class. 21
III. If the insurer or producer is providing the product or 22
service offered, the insurer or producer must ensure 23
that the customer is provided with contact information 24
to assist the customer with questions regarding the 25
product or service. 26
IV. The availability of the value-added product or service 27
must be based on documented objective criteria and 28
offered in a manner that is not unfairly discriminatory. 29
The documented criteria must be maintained by the 30
insurer or producer and produced upon request by the 31
Department. 32
7. The offer or provision of products or services that otherwise 33
meet the criteria of sub-sub-subdivision 6. of this 34
sub-subdivision, where the insurer or producer does not have 35
sufficient evidence to demonstrate but has a good-faith belief 36
that the products or service satisfies one or more of the 37
conditions listed in sub-sub-sub-sub-subdivisions A. through I. 38
of sub-sub-sub-subdivision I. of sub-sub-subdivision 6. of this 39
sub-subdivision. The products and services shall be offered or 40
provided in a manner that is not unfairly discriminatory as part 41
of a pilot or testing program for no more than one year. An 42
insurer or producer offering or providing products or services 43
pursuant to this sub-sub-subdivision must notify the 44
Department of the pilot or testing program prior to 45
implementation and may proceed with the program unless the 46
Department objects within 21 days of notice. 47
8. The offer or gifting by an insurer or producer of noncash gifts, 48
items, or services, including meals to or charitable donations 49
on behalf of a customer, if all of the following criteria are met: 50 General Assembly Of North Carolina Session 2025
House Bill 356-First Edition Page 3
I. The noncash gifts, items, or services are made to, or on 1
behalf of, customers, including commercial or 2
institutional customers, in connection with the 3
marketing, sale, purchase, or retention of contracts of 4
insurance. 5
II. The cost of the noncash gifts, items, or services does 6
not exceed two hundred fifty dollars ($250.00) per 7
policy term. 8
III. The offer or gift is made in a manner that is not unfairly 9
discriminatory. 10
IV. The customer is not required to purchase, continue to 11
purchase, or renew a policy in exchange for the offer or 12
gift. 13
9. The conducting of drawings or raffles by an insurer or 14
producer, to the extent they are otherwise permitted by law, if 15
all of the following criteria are met: 16
I. There is no financial cost to entrants to participate in 17
the drawing or raffle. 18
II. The drawing or raffle does not obligate participants to 19
purchase insurance. 20
III. The prizes of the drawing or raffle are not valued in 21
excess of two hundred fifty dollars ($250.00). 22
IV. The drawing or raffle is open to the public and 23
conducted in a manner that is not unfairly 24
discriminatory. 25
V. The customer is not required to purchase, continue to 26
purchase, or renew a policy in exchange for 27
participation in the drawing or raffle. 28
c. No insurer or employee thereof, and no insurance producer shall pay, 29
allow, or give, or offer to pay, allow, or give, directly or indirectly, as 30
an inducement to insurance, or after insurance has been effected, any 31
rebate, discount, abatement, credit or reduction of the premium named 32
in a policy of insurance, or any special favor or advantage in the 33
dividends or other benefits to accrue thereon, or any valuable 34
consideration or inducement whatever, not specified in the policy of 35
insurance. Nothing herein contained shall be construed as prohibiting 36
prohibiting: (i) the payment of commissions or other compensation to 37
regularly appointed and licensed insurance producers duly licensed by 38
this State; nor as prohibiting State, (ii) any participating insurer from 39
distributing to its policyholders dividends, savings or the unused or 40
unabsorbed portion of premiums and premium deposits.deposits, or 41
(iii) the trade practices permitted by sub-subdivision b. of this 42
subdivision. 43
d. An insurer, producer, or representative of either may not offer or 44
provide insurance as an inducement to the purchase of another policy 45
or otherwise use the words "free," "no cost," or words of similar 46
import, in an advertisement. 47
…." 48
SECTION 3. G.S. 58-33-85 reads as rewritten: 49
"§ 58-33-85. Rebates and charges in excess of premium prohibited; exceptions. 50 General Assembly Of North Carolina Session 2025
Page 4 House Bill 356-First Edition
(a) No insurer, insurance producer, or limited representative shall knowingly charge, 1
demand or receive a premium for any policy of insurance except in accordance with the 2
applicable filing approved by the Commissioner. No insurer, insurance producer, or limited 3
representative shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as 4
an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement, 5
credit, or reduction of the premium named in a policy of insurance, or any special favor or 6
advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or 7
inducement whatever, not specified in the policy of insurance. No insured named in a policy of 8
insurance, nor any employee of such insured, shall knowingly receive or accept, directly or 9
indirectly, any such rebate, discount, abatement or reduction of premium, or any special favor or 10
advantage or valuable consideration or inducement. Nothing herein contained shall be construed 11
as prohibiting (i) the payment of commissions or other compensation to duly licensed insurance 12
producers and limited representatives, (ii) any participating insurer from distributing to its 13
policyholders dividends, savings or the unused or unabsorbed portion of premiums and premium 14
deposits, or (iii) the trade practices permitted by G.S. 58-63-16. sub-subdivision b. of subdivision 15
(8) of G.S. 58-63-15. As used in this section the word "insurance" includes suretyship and the 16
word "policy" includes bond. 17
…." 18
SECTION 4. This act is effective when it becomes law and applies to trade practices 19
related to insurance contracts issued, renewed, or amended on or after that date. 20