GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 51
Short Title: Maintain NAIC Accreditation of DOI.-AB (Public)
Sponsors: Senators Johnson, Britt, and Settle (Primary Sponsors).
Referred to: Rules and Operations of the Senate
February 5, 2025
*S51-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO MAINTAIN N AIC ACCREDITATION OF THE DEPARTMENT OF 2
INSURANCE BY IMPLEME NTING GROUP CAPITAL CALCULATION AND 3
LIQUIDITY STRESS TES T REQUIREMENTS AND T O MAKE VARIOUS 4
CONFORMING CHANGES, AS RECOMMENDED BY TH E DEPARTMENT OF 5
INSURANCE. 6
The General Assembly of North Carolina enacts: 7
8
PART I. IMPLEMENT GROUP CAPITAL CALCULAT ION AND LIQUIDITY STRESS 9
TEST REQUIREMENTS FO R INSURANCE HOLDING COMPANY SYSTEMS 10
SECTION 1. Article 19 of Chapter 58 of the General Statutes is amended by adding 11
the following new sections to read: 12
"§ 58-19-26. Group capital calculation. 13
(a) Reporting Requirement. – The ultimate controlling person of every insurer subject to 14
registration pursuant to G.S. 58-19-25 shall concurrently file with the registration an annual 15
group capital calculation report. The report shall be filed with the lead state commissioner. 16
(b) Exemptions. – The ultimate controlling person of any of the following is exempt from 17
the filing requirement of subsection (a) of this section: 18
(1) An insurance holding company system that (i) has only one insurer within its 19
holding company structure, (ii) only writes insurance business, (iii) is only 20
licensed in its state of domicile, and (iv) assumes no business from any other 21
insurer. 22
(2) An insurance holding company system that is required to perform a group 23
capital calculation specified by the United States Federal Reserve Board. 24
When this exemption applies, the lead state commissioner shall request the 25
calculation from the United States Federal Reserve Board. If the United States 26
Federal Reserve Board cannot share the calculation with the lead state 27
commissioner under the terms of any information sharing agreements in 28
effect, then the insurance holding company system is not exempt from the 29
group capital calculation filing. 30
(3) An insurance holding company system whose non-United States group-wide 31
supervisor is located within a reciprocal jurisdiction that recognizes the United 32
States state regulatory approach to group supervision and group capital. 33
(4) An insurance holding company system that meets both of the following 34
requirements: 35 General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 51-First Edition
a. The insurance holding company system provides information to the 1
lead state commissioner that meets the requirements for accreditation 2
under the NAIC financial standards and accreditation program. The 3
insurance holding company may provide this information either 4
directly or indirectly through its group-wide supervisor. If provided 5
indirectly through a group-wide supervisor, the supervisor is 6
responsible for determining whether the information provided is 7
sufficient to permit the lead state commissioner to comply with the 8
NAIC group supervision approach, as detailed in the NAIC Financial 9
Analysis Handbook. 10
b. The insurance holding company system's non-United States 11
group-wide supervisor is not in a reciprocal jurisdiction but 12
nonetheless recognizes the group capital calculation as the worldwide 13
group capital assessment for United States insurance groups who 14
operate in that jurisdiction. 15
(c) Recognition of Group Capital Calculation. – For purposes of subdivision (b)(4) of 16
this section, a non-United States jurisdiction recognizes the group capital calculation if it satisfies 17
any of the following criteria: 18
(1) A competent regulatory authority in the jurisdiction affirms that insurers and 19
insurance groups whose lead state is accredited by the NAIC under the NAIC 20
accreditation program shall be subject only to worldwide prudential insurance 21
group supervision, including worldwide group governance, solvency and 22
capital, and reporting, as applicable, by that jurisdiction's lead state 23
commissioner and will not be subject to group supervision, including 24
worldwide group governance, solvency and capital, and reporting, at the level 25
of the worldwide parent undertaking of the insurance or reinsurance group by 26
the non-United States jurisdiction. 27
(2) A competent regulatory authority in the jurisdiction affirms that information 28
regarding insurers and their parent, subsidiary, or affiliated entities, if 29
applicable, shall be provided to the lead state commissioner in accordance 30
with an information sharing agreement in the form of a memorandum of 31
understanding or similar document. Acceptable information sharing 32
agreements include the International Association of Insurance Supervisors 33
Multilateral Memorandum of Understanding or other multilateral memoranda 34
of understanding coordinated by the NAIC. The jurisdiction does not satisfy 35
this criteria if the lead state commissioner determines, in consultation with the 36
NAIC, that the requirements of the information sharing agreements are no 37
longer in force. 38
(3) If no United States insurance groups operate in the non-United States 39
jurisdiction, that non-United States jurisdiction notifies the lead state 40
commissioner and the International Association of Insurance Supervisors in 41
writing that the jurisdiction considers the group capital calculation an 42
acceptable international capital standard. 43
(d) Limitation of Exemptions. – Notwithstanding subsection (b) of this section, the lead 44
state commissioner shall require filing of the group capital calculation for United States 45
operations of any non-United States based insurance holding company system if the lead state 46
commissioner determines that the filing is required for (i) prudential oversight and solvency 47
monitoring purposes or (ii) ensuring the competitiveness of the insurance marketplace. 48
(e) Consideration and Correction of NAIC Materials. – The lead state commissioner shall 49
consider any relevant lists, reports, and recommendations published by the NAIC in determining 50
whether the exceptions of subdivision (b)(4) of this section apply to an insurer. If the lead state 51 General Assembly Of North Carolina Session 2025
Senate Bill 51-First Edition Page 3
commissioner's determination differs from relevant materials published by the NAIC, the lead 1
state commissioner shall provide the NAIC with written justification for the difference supported 2
by documentation. If published NAIC materials indicate that a non-United States jurisdiction 3
recognizes the group capital calculation and the lead state commissioner determines that the 4
jurisdiction no longer meets the requirements of subsection (c) of this section, the lead state 5
commissioner may recommend a correction of the materials to the NAIC. 6
(f) Discretionary Exemptions. – The lead state commissioner may either (i) exempt the 7
ultimate controlling person of an insurance holding company system from the filing requirement 8
of subsection (a) of this section or (ii) authorize the ultimate controlling person of an insurance 9
holding company to file a limited group capital filing in lieu of the filing requirement of 10
subsection (a) of this section if all of the following apply: 11
(1) The insurance holding company system has annual direct written and 12
unaffiliated assumed premium, including international direct and assumed 13
premium, but excluding premiums reinsured with the Federal Crop Insurance 14
Corporation and Federal Flood Program, of less than one billion dollars 15
($1,000,000,000). 16
(2) The insurance holding company system does not include insurers within its 17
holding company structure that are domiciled outside of the United States or 18
one of its territories. 19
(3) The insurance holding company system does not include banking, depository, 20
or other financial entity that is subject to an identified regulatory capital 21
framework within its holding company structure. 22
(4) The insurance holding company system attests that there are no material 23
changes in transactions between insurers and non-insurers in the group that 24
have occurred since the last filing of an annual group calculation report, if any. 25
(5) The non-insurers within the insurance holding company system do not pose a 26
material financial risk to the insurer's ability to honor policyholder 27
obligations. 28
(g) Resumption of Filings. – If the lead state commissioner determines that an insurance 29
holding company system exempted from the filing requirements of subsection (a) of this section 30
no longer meets the requirements for an exemption, the insurance holding company system shall 31
file the group capital calculation at the next annual filing date unless given an extension by the 32
lead state commissioner based on reasonable grounds shown. If the lead state commissioner, 33
pursuant to subsection (f) of this section, either grants a discretionary exemption or authorizes a 34
limited group capital filing, the lead state commissioner may require the ultimate controlling 35
person of that insurance holding company system to file an annual group calculation at any time 36
if all of the following apply: 37
(1) Any insurer within the insurance holding company system is in a risk-based 38
capital action level event as set forth in Article 12 of this Chapter or a similar 39
standard for a non-United States insurer. 40
(2) Any insurer within the insurance holding company system meets one or more 41
of the standards of an insurer deemed to be in hazardous financial condition 42
pursuant to the criteria provided in G.S. 58-30-60. 43
(3) Any insurer within the insurance holding company system otherwise exhibits 44
qualities of a troubled insurer as determined by the lead state commissioner 45
based on unique circumstances, including the type and volume of business 46
written, ownership and organizational structure, federal agency requests, and 47
international supervisor requests. 48
"§ 58-19-27. Liquidity stress test. 49
(a) Participation and Reporting Requirement. – The ultimate controlling person of every 50
insurer subject to registration pursuant to G.S. 58-19-25 shall be included in the NAIC liquidity 51 General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 51-First Edition
stress test framework and file a report with the lead state commissioner detailing the results of a 1
specific year's liquidity stress test if either of the following applies: 2
(1) The insurer meets the scope criteria of that data year's NAIC liquidity stress 3
test framework. 4
(2) The insurer did not meet the scope criteria of that data year's liquidity stress 5
test framework, but the lead state commissioner, in consultation with the 6
NAIC Financial Stability Task Force or its successor, nonetheless determines 7
the insurer should be included in the NAIC liquidity stress test framework for 8
that data year. In making this determination, the lead state commissioner shall 9
attempt to avoid the frequent inclusion or exclusion of insurers. 10
(b) The performance of, and filing of the results from, a specific year's liquidity stress 11
test shall comply with (i) the NAIC liquidity stress test framework's instructions and reporting 12
templates for that year and (ii) all lead state commissioners' directives issued in consultation with 13
the NAIC Financial Stability Task Force or its successor. 14
(c) Exemptions. – The lead state commissioner may, in consultation with the NAIC 15
Financial Stability Task Force or its successor, exempt an ultimate controlling person from the 16
reporting requirements of subsection (a) of this section. The lead state commissioner shall 17
consider the intent of regulators to avoid having insurers scoped in and out of the NAIC liquidity 18
stress test framework on a frequent basis when making this determination. 19
"§ 58-19-28. Dissemination prohibited. 20
(a) Unless otherwise provided by law, the making, publishing, disseminating, circulating, 21
or placing before the public, or causing directly or indirectly to be made, published, disseminated, 22
circulated, or placed before the public in a newspaper, magazine, or other publication, or in the 23
form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station or 24
any electronic means of communication available to the public, or in any other way as an 25
advertisement, announcement, or statement containing a representation or statement with regard 26
to the group capital calculation, group capital ratio, the liquidity stress test results, or supporting 27
disclosures for the liquidity stress test of any insurer or any insurer group, or of any component 28
derived in the calculation by any insurer, broker, or other person engaged in any manner in the 29
insurance business is prohibited. 30
(b) Notwithstanding subsection (a) of this section, if any materially false statement with 31
respect to the group capital calculation, resulting group capital ratio, an inappropriate comparison 32
of any amount to an insurer's or insurance group's group capital calculation or resulting group 33
capital ratio, liquidity stress test result, supporting disclosures for the liquidity stress test, or an 34
inappropriate comparison of any amount to an insurer's or insurance group's liquidity stress test 35
result, or supporting disclosures is published in any written publication and the insurer is able to 36
demonstrate to the Commissioner with substantial proof the falsity or inappropriateness of the 37
statement, then the insurer may publish announcements in a written publication if the sole 38
purpose of the announcement is to rebut the materially false or inappropriate statement." 39
40
PART II. CONFORMING CHANGES 41
SECTION 2.(a) G.S. 58-19-5 reads as rewritten: 42
"§ 58-19-5. Definitions. 43
As used in this Article, unless the context requires otherwise, the following terms have the 44
following meanings: 45
… 46
(10a) Group capital calculation. – A report, completed in accordance with the group 47
capital calculation instructions as adopted and amended by the NAIC, used to 48
evaluate the capital adequacy of insurance holding company systems that 49
includes information on the sources of capital within the system, where that 50
capital is located, and sources of risk. 51 General Assembly Of North Carolina Session 2025
Senate Bill 51-First Edition Page 5
(10a)(10b) Group-wide supervisor. – The regulatory official authorized to engage in 1
conducting and coordinating group-wide supervision activities who is 2
determined or acknowledged by the Commissioner under G.S. 58-19-38 to 3
have sufficient significant contacts with the internationally active insurance 4
group. 5
… 6
(12b) Lead state commissioner. – The person responsible for regulating the 7
insurance holding company system as determined by the Commissioner in 8
accordance with the procedures within the Financial Analysis Handbook 9
adopted by the NAIC. 10
(12c) Limited group capital filing. – A simplified version of the group capital 11
calculation, completed in accordance with procedures adopted by the NAIC, 12
where an insurance holding company system only provides a limited amount 13
of data, allowing them to avoid the filing of a full group capital calculation. 14
(12d) Liquidity stress test. – A process simulating extreme market conditions to 15
assess an entity's ability to maintain sufficient liquidity in response to adverse 16
events. 17
(12e) NAIC. – The National Association of Insurance Commissioners. 18
(12f) NAIC liquidity stress test framework. – A publication, adopted and amended 19
by the NAIC in accordance with procedures adopted by the NAIC, which 20
includes a history of the NAIC's development of regulatory liquidity stress 21
testing, the scope criteria applicable for a specific data year, and the liquidity 22
stress test instructions and reporting templates for a specific data year. 23
… 24
(13a) Reciprocal jurisdiction. – As defined in G.S. 58-7-21(b)(4b). 25
(13b) Scope criteria. – Designated exposure bases, detailed in the NAIC liquidity 26
stress test framework along with minimum magnitudes thereof for the 27
specified data year, used to establish a preliminary list of insurers included in 28
the NAIC liquidity stress test framework for that data year. 29
…." 30
SECTION 2.(b) G.S. 58-19-15 reads as rewritten: 31
"§ 58-19-15. Acquisition of control of or merger with domestic insurer. 32
… 33
(b) The statement to be filed with the Commissioner under subsection (a) of this section 34
shall be furnished on a Form A as prescribed by the Commissioner, made under oath or 35
affirmation, and shall contain the following information: 36
… 37
(11a) An agreement by the person required to file the statement referred to in 38
subsection (a) of this section that it will provide the annual report, as specified 39
in G.S. 58-19-25, G.S. 58-19-25(l), for so long as control exists. 40
…." 41
SECTION 2.(c) G.S. 58-19-25 reads as rewritten: 42
"§ 58-19-25. Registration of insurers.insurers; disclaimer of affiliation; enterprise risk 43
filings. 44
… 45
(c) No information need be disclosed on the registration statement filed pursuant to 46
subsection (b) of this section if such information is not material for the purposes of this section. 47
Unless the Commissioner by rule or order provides otherwise, all material. For purposes of this 48
section, all sales, purchases, exchanges, loans or extensions of credit, investments, or guarantees 49
involving one-half of one percent ( 1//s2%) (0.5%) or less of an insurer's admitted assets as of 50
the preceding December 31 are not material for the purposes of this section.material, unless the 51 General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 51-First Edition
Commissioner by rule or order provides otherwise. This subsection does not apply to the 1
reporting requirements of G.S. 58-19-26 and G.S. 58-19-27. 2
… 3
(l) Effective January 1, 2016, the ultimate controlling person of every insurer subject to 4
registration shall also file an annual enterprise risk report on Form F as prescribed by the 5
Commissioner. The report shall, to the best of the ultimate controlling person's knowledge and 6
belief, identify the material risks within the insurance holding company system that could pose 7
enterprise risk to the insurer. The report shall be filed with the lead state commissioner of the 8
insurance holding company system as determined by the procedures within the Financial 9
Analysis Handbook adopted by the NAIC.commissioner." 10
SECTION 2.(d) G.S. 58-19-40 reads as rewritten: 11
"§ 58-19-40. Confidential treatment. 12
(a) Documents, materials, or other information in the possession or control of the 13
Department that are obtained by or disclosed to the Commissioner or any other person in the 14
course of an examination or investigation made pursuant to G.S. 58-19-35, and all information 15
reported or provided to the Department pursuant to subdivisions (11a) and (11b) of 16
G.S. 58-19-15(b), G.S. 58-19-25, G.S. 58-19-30 and G.S. 58-19-38 are recognized by this State 17
as being proprietary and to contain trade secrets, and shall be confidential by law and privileged, 18
shall not be considered a public record under either G.S. 58-2-100 or Chapter 132 of the General 19
Statutes, shall not be subject to subpoena, and shall not be subject to discovery or admissible in 20
evidence in any private civil action. However, the Commissioner is authorized to use the 21
documents, materials, or other information in the furtherance of any regulatory or legal action 22
brought as a part of the Commissioner's official duties. The Commissioner shall not otherwise 23
make the documents, materials, or other information public without the prior written consent of 24
the insurer to which it pertains unless the Commissioner, after giving the insurer and its affiliates 25
who would be affected thereby notice and opportunity to be heard, determines that the interest of 26
policyholders, shareholders, or the public will be served by the publication thereof, in which 27
event the Commissioner may publish all or any part of the information in such manner as may 28
be deemed appropriate. 29
(a1) With respect to information provided to the Department pursuant to G.S. 58-19-26 30
and G.S. 58-19-27, the Commissioner shall: 31
(1) Maintain the confidentiality of the group capital calculation and group capital 32
ratio produced within the calculation and any group capital information 33
received from an insurance holding company system supervised by the 34
Federal Reserve Board or any United States group-wide supervisor. 35
(2) Maintain the confidentiality of the liquidity stress test results and supporting 36
disclosures and any liquidity stress test information received from an 37
insurance holding company system supervised by the Federal Reserve Board 38
and non-United States group-wide supervisors. 39
… 40
(c) In order to assist in the performance of the duties imposed by this Article, the 41
Commissioner: 42
(1) May share documents, materials, or other information, including the 43
confidential and privileged documents, materials, or information subject to 44
subsection (a) of this section, including proprietary and trade secret documents 45
and materials, with other all of the following: 46
a. Other state, federal, and international regulatory agencies, with the 47
NAIC and its affiliates and subsidiaries, and with state, agencies. 48
b. The NAIC. 49
c. Any third-party consultants designated by the Commissioner. 50 General Assembly Of North Carolina Session 2025
Senate Bill 51-First Edition Page 7
d. State, federal, and international law enforcement authorities, including 1
members of any supervisory college described in G.S. 58-19-37, 2
provided that the recipient agrees in writing to maintain the 3
confidentiality and privileged status of the document, material, or 4
other information and has verified in writing the legal authority to 5
maintain confidentiality. 6
(2) Notwithstanding subdivision (1) of this subsection, may only share 7
confidential and privileged documents, material, or information reported 8
pursuant to G.S. 58-19-25 G.S. 58-19-25(l) with Commissioners of states 9
having statutes or regulations substantially similar to subsection (a) of this 10
section and who have agreed in writing not to disclose such information. 11
(3) May receive documents, materials, or information, including otherwise 12
confidential and privileged documents, materials, or information information, 13
including proprietary and trade-secret information, from the NAIC and its 14
affiliates and subsidiaries and from regulatory and law enforcement officials 15
of other foreign or domestic jurisdictions, and shall maintain as confidential 16
or privileged any document, material, or information received with notice or 17
the understanding that it is confidential or privileged under the laws of the 18
jurisdiction that is the source of the document, material, or information. 19
(4) Shall enter into written agreements with the NAIC and any third-party 20
consultant designated by the Commissioner governing sharing and use of 21
information provided pursuant to this Article consistent with this subsection 22
that shall:shall do all of the following: 23
a. Require a recipient to maintain the confidentiality and privileged 24
status of any documents, materials, or information. Specify procedures 25
and protocols regarding the confidentiality and security of information 26
shared with the NAIC and its affiliates and subsidiaries or a third-party 27
consultant designated by the Commissioner pursuant to this Article, 28
including procedures and protocols for sharing by the NAIC with other 29
state, federal, or international regulators;regulators. The agreement 30
shall require a recipient to verify in writing that the recipient has 31
reviewed the legal authority supporting any confidentiality or 32
privilege. 33
b. Specify that ownership of information shared with the NAIC and its 34
affiliates and subsidiaries or a third-party consultant pursuant to this 35
Article remains with the Commissioner, and the NAIC's use of the 36
information by the NAIC or third-party consultant designated by the 37
Commissioner is subject to the direction of the 38
Commissioner;Commissioner. 39
c. Prohibit the NAIC or third-party consultant designated by the 40
Commissioner from storing the information shared pursuant to this 41
section in a permanent database after the underlying analysis is 42
completed. This sub-subdivision does not apply to documents, 43
material, or information reported pursuant to G.S. 58-19-27. 44
c.d. Require prompt notice to be given to an insurer whose confidential 45
information in the possession of the NAIC or a third-party consultant 46
designated by the Commissioner pursuant to this Article is subject to 47
a request or subpoena to the NAIC for disclosure or production; 48
andproduction. 49
d.e. Require the NAIC and its affiliates and subsidiaries or a third-party 50
consultant designated by the Commissioner to consent to intervention 51 General Assembly Of North Carolina Session 2025
Page 8 Senate Bill 51-First Edition
by an insurer in any judicial or administrative action in which the 1
NAIC and its affiliates and subsidiaries or a third-party consultant 2
designated by the Commissioner may be required to disclose 3
confidential information about the insurer shared with the NAIC and 4
its affiliates and subsidiaries or a third-party consultant designated by 5
the Commissioner pursuant to Article 19 of this Chapter. 6
f. Require the Commissioner to notify an insurer when documents, 7
materials, or information confidential or privileged to that insurer are 8
shared with a third-party consultant. The notification shall include the 9
identity of the third-party consultant. This sub-subdivision only 10
applies to documents, materials, or information shared pursuant to 11
G.S. 58-19-27. 12
… 13
(f) Documents, materials, or other information in the possession or control of the NAIC 14
or a third-party consultant designated by the Commissioner pursuant to a requirement of this 15
Article shall be confidential by law and privileged, shall not be considered a public record under 16
G.S. 58-2-100 or Chapter 132 of the General Statutes, shall not be subject to subpoena, and shall 17
not be subject to discovery or admissible in evidence in any private civil action." 18
19
PART III. EFFECTIVE DATE 20
SECTION 3. This act becomes effective January 1, 2026. 21