North Carolina SB 271: Permitted Trade Practices/Insurance Rebates.-AB

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 271

Short Title: Permitted Trade Practices/Insurance Rebates.-AB (Public)
Sponsors: Senators Johnson, Britt, and Settle (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 13, 2025
*S271-v-1*
A BILL TO BE ENTITLED 1
AN ACT CLARIFYING PERMITTED TRADE PRACTICES WITH RESPECT TO 2
INSURANCE REBATES, AS 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 and G.S. 58-63-16 are repealed. 6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 Senate Bill 271-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
Senate Bill 271-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