GENERAL ASSEMBLY OF NORTH CAROLINA
1991 SESSION
CHAPTER 709
AN ACT TO AMEND THE "CLEAN RISK"DEFINITION IN THE NORTH CAROLINA MOTOR VEHICLE REINSURANCE FACILITY.
The General Assembly of North Carolina enacts:
Section 1. G.S. 58-37-35(l) reads as rewritten:
"(l) The
classifications, rules, rates, rating plans and policy forms used on motor
vehicle insurance policies reinsured by the Facility may be made by the
Facility or by any licensed or statutory rating organization or bureau on its
behalf and shall be filed with the Commissioner. The Board of Governors
shall establish a separate subclassification within the Facility for 'clean
risks' as herein defined. For the purpose of this Article, a 'clean
risk' shall be any owner of a motor vehicle classified as a private passenger
non-fleet motor vehicle as defined under Article 40 of this Chapter if the
owner and the principal operator and each licensed operator in the owner's
household have two years' driving experience and if neither the owner nor any
member of his household nor the principal operator had had any chargeable
accident or any conviction for a moving traffic violation pursuant to the
subclassification plan established by the provisions of G.S. 58-36-65, during
the three-year period immediately preceding the date of application for motor
vehicle insurance or the date of preparation for a renewal motor vehicle
insurance policy. For the purpose of this Article, a 'clean risk' shall
be any owner of a nonfleet private passenger motor vehicle as defined in G.S.
58-40-10, if the owner, principal operator, and each licensed operator in the
owner's household have two years' driving experience as licensed drivers and if
none of the persons has been assigned any Safe Driver Incentive Plan points
under Article 36 of this Chapter during the three-year period immediately
preceding either (i) the date of application for a motor vehicle insurance
policy or (ii) the date of preparation of a renewal of a motor vehicle
insurance policy. Such filings may incorporate by reference any other
material on file with the Commissioner. Rates shall be neither excessive,
inadequate nor unfairly discriminatory. If the Commissioner finds, after a
hearing, that a rate is either excessive, inadequate or unfairly
discriminatory, he shall issue an order specifying in what respect it is
deficient and stating when, within a reasonable period thereafter, such rate
shall be deemed no longer effective. Said order is subject to judicial review
as set out in Article 2 of this Chapter. Pending judicial review of said order,
the filed classification plan and the filed rates may be used, charged and
collected in the same manner as set out in G.S. 58-40-45 of this Chapter. Said
order shall not affect any contract or policy made or issued prior to the
expiration of the period set forth in the order. All rates shall be on an
actuarially sound basis and shall be calculated, insofar as is possible, to
produce neither a profit nor a loss. However, the rates made by or on behalf of
the Facility with respect to 'clean risks', as defined above, shall not exceed
the rates charged 'clean risks' who are not reinsured in the Facility. The
difference between the actual rate charged and the actuarially sound and
self-supporting rates for 'clean risks' reinsured in the Facility may be
recouped in similar manner as assessments pursuant to G.S. 58-37-40(f) or
allocated pursuant to G.S. 58-37-75. Rates shall not include any factor
for underwriting profit on Facility business, but shall provide an allowance
for contingencies. There shall be a strong presumption that the rates and
premiums for the business of the Facility are neither unreasonable nor
excessive."
Sec. 2. This act becomes effective October 1, 1991.
In the General Assembly read three times and ratified this the 16th day of July, 1991.
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James C. Gardner
President of the Senate
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Daniel Blue, Jr.
Speaker of the House of Representatives