§ 58-34-10. Management contracts.
§ 58‑34‑10. Management contracts.
(a) Subject to G.S. 58‑19‑30(b)(4),any domestic insurer that enters into a management contract or custodialagreement must file that contract or agreement with the Commissioner on orbefore its effective date.
(b) Any domesticinsurer that has a management contract or custodial agreement shall file astatement with the initial filing of that contract that discloses (i) criteriaon which charges to the insurer are based for that contract; (ii) whethermanagement personnel or other employees of the insurer are to be performingmanagement functions and receiving any remuneration therefor through thatcontract in addition to the compensation by way of salary received directlyfrom the insurer for their services; (iii) whether the contract transferssubstantial control of the insurer or any of the powers vested in the board ofdirectors, by statute, articles of incorporation, or bylaws, or substantiallyall of the basic functions of the insurer's management; (iv) biographical informationfor each officer and director of the management firm; and (v) other informationconcerning the contract or the management or custodian firm as may be includedfrom time to time in any registration forms adopted or approved by theCommissioner. The statement shall be filed on a form prescribed by theCommissioner.
(c) Any domesticinsurer that amends or cancels a management contract or custodial agreementfiled under subsection (a) of this section shall notify the Commissioner within15 business days after the amendment or cancellation. If the contract isamended, the notice shall provide a copy of the amended contract and shalldisclose if the amendment affects any of the items in subsection (b) of thissection. The Commissioner may prescribe a form to be used to provide noticeunder this subsection.
(d) Any domesticinsurer that has a management contract or custodial agreement shall file astatement on or before March 1 of each year, for the preceding calendar year,disclosing (i) total charges incurred by the insurer under the contract; (ii)any salaries, commissions, or other valuable consideration paid by the insurerdirectly to any officer, director, or shareholder of the management orcustodian firm; and (iii) other information concerning the contract or themanagement or custodian firm as may be included from time to time in anyregistration forms adopted or approved by the Commissioner. The Commissionermay prescribe a form to be used to provide the information required by thissubsection.
(e) Any domesticinsurer that has a management contract may request an exemption from the filingrequirements of this section if the contract is for a group of affiliatedinsurers on a pooled funds basis or service company management basis, wherecosts to the individual member insurers are charged on an actually incurred orclosely estimated basis. The request for an exemption must be in writing, mustexplain the basis for the exemption, and must be received by the Commissioneron or before the effective date of the contract. As used in this subsection,"affiliated" has the same meaning as in G.S. 58‑19‑5(1).Management contracts exempted under this subsection must still be reduced towritten form. (1987,c. 752, s. 8; 1989, c. 485, s. 61; 1991, c. 681, s. 53; 1993, c. 452, s. 49;2001‑223, s. 20.3.)