North Carolina 2025-2026 Regular Session

North Carolina Senate Bill S271 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	S 1
4		-	SENATE BILL 271
	3	+	S D
	4	+	SENATE BILL DRS35124-NE-99A
	5	+
5	6
6	7
7	8		Short Title: Permitted Trade Practices/Insurance Rebates.-AB (Public)
8	9		Sponsors: Senators Johnson, Britt, and Settle (Primary Sponsors).
9		-	Referred to: ~~Rules and Operations of the Senate~~
10		-	~~March 13, 2025~~
11		-	~~S271 -v-1~~
	10	+	Referred to:
	11	+
	12	+	DRS35124 -NE-99A
12	13		A BILL TO BE ENTITLED 1
13	14		AN ACT CLARIFYING PERMITTED TRADE PRACTICES WITH RESPECT TO 2
14	15		INSURANCE REBATES, AS RECOMMENDED BY THE DEPARTMENT OF 3
15	16		INSURANCE. 4
16	17		The General Assembly of North Carolina enacts: 5
17	18		SECTION 1. G.S. 58-63-15(8)b.4. and G.S. 58-63-16 are repealed. 6
18	19		SECTION 2. G.S. 58-63-15 reads as rewritten: 7
19	20		"§ 58-63-15. Unfair methods of competition and unfair or deceptive acts or practices 8
20	21		defined. 9
21	22		The following are hereby defined as unfair methods of competition and unfair and deceptive 10
22	23		acts or practices in the business of insurance: 11
23	24		… 12
24	25		(8) Rebates. – 13
25	26		… 14
26	27		b. Nothing in subdivision (7) or paragraph a of subdivision (8) of this 15
27	28		section shall be construed as including within the definition of 16
28	29		discrimination or rebates any of the following practices: 17
29	30		… 18
30	31		5. Engaging in an arrangement that would not violate section 106 19
31	32		of the Bank Holding Company Act Amendments of 1972 (12 20
32	33		U.S.C. § 1972), as interpreted by the Board of Governors of 21
33	34		the Federal Reserve System, or section 5(q) of the Home 22
34	35		Owners' Loan Act, 12 U.S.C. § 1464(q). 23
35	36		6. The offer or provision by insurers or producers, by or through 24
36	37		employees, affiliates, or third-party representatives, of 25
37	38		value-added products or services at no or reduced cost when 26
38	39		such products or services are not specified in the policy of 27
39	40		insurance if all of the following criteria are met: 28
40	41		I. Relates to the insurance coverage and is primarily 29
41	42		designed to satisfy one or more of the following: 30
42	43		A. Providing loss mitigation or loss control. 31
43	44		B. Reducing claim costs or claim settlement costs. 32
44	45		C. Providing education about liability risks or risk 33
45		-	of loss to persons or property. 34 General Assembly Of North Carolina Session 2025
46		-	Page 2 Senate Bill 271-First Edition
	46	+	of loss to persons or property. 34
	47	+	FILED SENATE
	48	+	Mar 12, 2025
	49	+	S.B. 271
	50	+	PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
	51	+	Page 2 DRS35124-NE-99A
47	52		D. Monitoring or assessing risk, identifying 1
48	53		sources of risk, or developing strategies for 2
49	54		eliminating or reducing risk. 3
50	55		E. Enhancing health. 4
51	56		F. Enhancing financial wellness through items 5
52	57		such as education or financial planning 6
53	58		services. 7
54	59		G. Providing post-loss services. 8
55	60		H. Incentivizing behavioral changes to improve 9
56	61		the health or reduce the risk of death or 10
57	62		disability of a customer. For purposes of this 11
58	63		sub-sub-sub-sub-subdivision, "customer" 12
59	64		means a policyholder, potential policyholder, 13
60	65		certificate holder, potential certificate holder, 14
61	66		insured, potential insured, or applicant. 15
62	67		I. Assisting in the administration of the employee 16
63	68		or retiree benefit insurance coverage. 17
64	69		II. The cost to the insurer or producer offering the product 18
65	70		or service to any given customer must be reasonable in 19
66	71		comparison to that customer's premiums or insurance 20
67	72		coverage for the policy class. 21
68	73		III. If the insurer or producer is providing the product or 22
69	74		service offered, the insurer or producer must ensure 23
70	75		that the customer is provided with contact information 24
71	76		to assist the customer with questions regarding the 25
72	77		product or service. 26
73	78		IV. The availability of the value-added product or service 27
74	79		must be based on documented objective criteria and 28
75	80		offered in a manner that is not unfairly discriminatory. 29
76	81		The documented criteria must be maintained by the 30
77	82		insurer or producer and produced upon request by the 31
78	83		Department. 32
79	84		7. The offer or provision of products or services that otherwise 33
80	85		meet the criteria of sub-sub-subdivision 6. of this 34
81	86		sub-subdivision, where the insurer or producer does not have 35
82	87		sufficient evidence to demonstrate but has a good-faith belief 36
83	88		that the products or service satisfies one or more of the 37
84	89		conditions listed in sub-sub-sub-sub-subdivisions A. through I. 38
85	90		of sub-sub-sub-subdivision I. of sub-sub-subdivision 6. of this 39
86	91		sub-subdivision. The products and services shall be offered or 40
87	92		provided in a manner that is not unfairly discriminatory as part 41
88	93		of a pilot or testing program for no more than one year. An 42
89	94		insurer or producer offering or providing products or services 43
90	95		pursuant to this sub-sub-subdivision must notify the 44
91	96		Department of the pilot or testing program prior to 45
92	97		implementation and may proceed with the program unless the 46
93	98		Department objects within 21 days of notice. 47
94	99		8. The offer or gifting by an insurer or producer of noncash gifts, 48
95	100		items, or services, including meals to or charitable donations 49
96	101		on behalf of a customer, if all of the following criteria are met: 50 General Assembly Of North Carolina Session 2025
97		-	~~Senate Bill 271-First Edition~~ Page 3
	102	+	DRS35124-NE-99A Page 3
98	103		I. The noncash gifts, items, or services are made to, or on 1
99	104		behalf of, customers, including commercial or 2
100	105		institutional customers, in connection with the 3
101	106		marketing, sale, purchase, or retention of contracts of 4
102	107		insurance. 5
103	108		II. The cost of the noncash gifts, items, or services does 6
104	109		not exceed two hundred fifty dollars ($250.00) per 7
105	110		policy term. 8
106	111		III. The offer or gift is made in a manner that is not unfairly 9
107	112		discriminatory. 10
108	113		IV. The customer is not required to purchase, continue to 11
109	114		purchase, or renew a policy in exchange for the offer or 12
110	115		gift. 13
111	116		9. The conducting of drawings or raffles by an insurer or 14
112	117		producer, to the extent they are otherwise permitted by law, if 15
113	118		all of the following criteria are met: 16
114	119		I. There is no financial cost to entrants to participate in 17
115	120		the drawing or raffle. 18
116	121		II. The drawing or raffle does not obligate participants to 19
117	122		purchase insurance. 20
118	123		III. The prizes of the drawing or raffle are not valued in 21
119	124		excess of two hundred fifty dollars ($250.00). 22
120	125		IV. The drawing or raffle is open to the public and 23
121	126		conducted in a manner that is not unfairly 24
122	127		discriminatory. 25
123	128		V. The customer is not required to purchase, continue to 26
124	129		purchase, or renew a policy in exchange for 27
125	130		participation in the drawing or raffle. 28
126	131		c. No insurer or employee thereof, and no insurance producer shall pay, 29
127	132		allow, or give, or offer to pay, allow, or give, directly or indirectly, as 30
128	133		an inducement to insurance, or after insurance has been effected, any 31
129	134		rebate, discount, abatement, credit or reduction of the premium named 32
130	135		in a policy of insurance, or any special favor or advantage in the 33
131	136		dividends or other benefits to accrue thereon, or any valuable 34
132	137		consideration or inducement whatever, not specified in the policy of 35
133	138		insurance. Nothing herein contained shall be construed as prohibiting 36
134	139		prohibiting: (i) the payment of commissions or other compensation to 37
135	140		regularly appointed and licensed insurance producers duly licensed by 38
136	141		this State; nor as prohibiting State, (ii) any participating insurer from 39
137	142		distributing to its policyholders dividends, savings or the unused or 40
138	143		unabsorbed portion of premiums and premium deposits.deposits, or 41
139	144		(iii) the trade practices permitted by sub-subdivision b. of this 42
140	145		subdivision. 43
141	146		d. An insurer, producer, or representative of either may not offer or 44
142	147		provide insurance as an inducement to the purchase of another policy 45
143	148		or otherwise use the words "free," "no cost," or words of similar 46
144	149		import, in an advertisement. 47
145	150		…." 48
146	151		SECTION 3. G.S. 58-33-85 reads as rewritten: 49
147	152		"§ 58-33-85. Rebates and charges in excess of premium prohibited; exceptions. 50 General Assembly Of North Carolina Session 2025
148		-	Page 4 ~~Senate Bill 271-First Edition~~
	153	+	Page 4 DRS35124-NE-99A
149	154		(a) No insurer, insurance producer, or limited representative shall knowingly charge, 1
150	155		demand or receive a premium for any policy of insurance except in accordance with the 2
151	156		applicable filing approved by the Commissioner. No insurer, insurance producer, or limited 3
152	157		representative shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as 4
153	158		an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement, 5
154	159		credit, or reduction of the premium named in a policy of insurance, or any special favor or 6
155	160		advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or 7
156	161		inducement whatever, not specified in the policy of insurance. No insured named in a policy of 8
157	162		insurance, nor any employee of such insured, shall knowingly receive or accept, directly or 9
158	163		indirectly, any such rebate, discount, abatement or reduction of premium, or any special favor or 10
159	164		advantage or valuable consideration or inducement. Nothing herein contained shall be construed 11
160	165		as prohibiting (i) the payment of commissions or other compensation to duly licensed insurance 12
161	166		producers and limited representatives, (ii) any participating insurer from distributing to its 13
162	167		policyholders dividends, savings or the unused or unabsorbed portion of premiums and premium 14
163	168		deposits, or (iii) the trade practices permitted by G.S. 58-63-16. sub-subdivision b. of subdivision 15
164	169		(8) of G.S. 58-63-15. As used in this section the word "insurance" includes suretyship and the 16
165	170		word "policy" includes bond. 17
166	171		…." 18
167	172		SECTION 4. This act is effective when it becomes law and applies to trade practices 19
168	173		related to insurance contracts issued, renewed, or amended on or after that date. 20