House Bill 220 – NC Surplus Lines Statute Revisions

§ 58-21-35. Duty to file and retain reports.

(b) The licensee shall complete and retain a copy of the report in paper or electronic form as required by the Commissioner. The report required by this section and the quarterly report required by G.S. 58-21-80 shall be completed on a standardized form or forms prescribed by the Commissioner are not public records under G.S. 132-1 or G.S. 58-2-100.

Policy reports are no longer required from North Carolina Resident Surplus Lines Licensees on policies that are effective after 01/01/2017. The information required in section (a) of this statute is now entered in the Stamping Office SLIP program.

This does not apply to Independent Procurement or Risk Purchasing Groups

§ 58-21-75. Records of surplus lines licensee.

Each surplus lines licensee shall keep in his or her office in this State a full and true record of each surplus lines insurance contract placed by or through the licensee, including a copy of the policy, certificate, cover note, or other evidence of insurance. The record shall include the following items:

The reference that all files must be retained in an office in North Carolina has been eliminated.

11. Copy of the compliance agreement

A copy of the compliance agreement that is issued through the SLIP program for each filing must be kept in the licensee’s office for a period of 5 years. This copy can be kept in the insured’s policy file or a copy assessed through the SLIP system at any time. 

§ 58-21-80.
Quarterly reports; summary of exported business.

On or before the end of January, April, July, and October of each year, each surplus lines licensee shall file with the Commissioner, on a form prescribed by the Commissioner, a verified report of all surplus lines insurance transacted during the preceding three months showing:
(1) Aggregate gross premiums written;
(2) Aggregate return premiums; and 
(3) Amount of aggregate tax to be remitted. 

This statute was eliminated as it only applied to North Carolina Resident Surplus Lines Licensees that were required to submit quarterly reports on policies that were filed in the state system with an effective date prior to 01/01/2017. This does not apply to Risk Purchasing Groups.

§ 58-21-95. Suspension, revocation or nonrenewal of surplus lines licensee’s license. The Commissioner may suspend, revoke, or refuse to renew the license of a surplus lines licensee after notice and hearing as provided under G.S. 58-2-70 upon any one or more of the following grounds:

(1) Removal of the surplus lines licensee’s office from this State;
(2) Removal of the surplus lines licensee’s office accounts and records from this State during the period during which such accounts and records are required to be maintained under G.S. 58-21-75;
(3) Closing of the surplus lines licensee’s office for a period of more than 30 business days, unless permission is granted by the Commissioner;
(4) Failure to make and file required reports;
(5) Failure to transmit the required tax on surplus lines premiums
(6) Failure to maintain the required bond;
(6) Failure to pay the stamping fee to the stamping office;
(7) Violation of any provision of this Article; or
(8) For any other cause for which an insurance license could be denied, revoked, suspended, or renewal refused under the Insurance Law. (1985, c. 688, s. 1.)

The reference that all files must be retained in an office in North Carolina has been eliminated.

Failure to main a surplus lines bond has been eliminated (no bond is currently required for a surplus lines license in North Carolina)

Failure to pay the NCSLA stamping fee has been added.