§ 58-36-4. Statistical organizations; licensing; recording and reporting; examination; suspension of license; financial disclosure.
§ 58‑36‑4. Statistical organizations; licensing; recording and reporting; examination;suspension of license; financial disclosure.
(a) For purposes ofthis Article:
(1) "Statisticalorganization" means every person, other than an admitted insurer, whetherlocated within or outside this State, who performs one or more of the followingfunctions:
a. Prepares policyforms or makes underwriting rules incident to, but not including, the making ofrates, rating plans, or rating systems.
b. Collects andfurnishes to admitted insurers or statistical organizations loss or expensestatistics or other statistical information and data and acts in an advisoryrather than a rate‑making capacity. No duly authorized attorney‑at‑lawacting in the usual course of that person's profession shall be deemed to be astatistical organization.
c. Makes rates, ratingplans or rating systems, or develops loss costs. Two or more insurers that actin concert for the purpose of making rates, rating plans or rating systems, ordeveloping loss costs and that do not operate within the specificauthorizations contained in this Article shall be deemed to be a statisticalorganization.
d. Collects data andstatistics from insurers and provides reports from these statistics to theCommissioner for the purpose of fulfilling the statistical reportingobligations of those insurers.
"Statisticalorganization" shall not mean the North Carolina Rate Bureau, the NorthCarolina Motor Vehicle Reinsurance Facility, the North Carolina InsuranceUnderwriting Association, or the North Carolina Joint Underwriting Association.
(2) "Statisticalplan" means the document used by a statistical organization to set forthwhich data elements are to be reported to the statistical organization and todescribe the format in which the data must be reported.
(b) No statisticalorganization shall conduct its operations in this State, and no insurer shallutilize the service of that organization for any purpose enumerated in thisArticle unless the organization has obtained a license from the Commissioner.No statistical organization shall refuse to supply any services for which it islicensed in this State to any insurer admitted to do business in this State andoffering to pay the fair and usual compensation for the services. A statisticalorganization applying for a license shall include with its application:
(1) A copy of itsconstitution, charter, articles of organization, agreement, association, orincorporation, and a copy of its bylaws, plan of operation, and any other rulesor regulations governing the conduct of its business, all duly certified by thecustodian of the originals thereof;
(2) A list of itsmembers and subscribers;
(3) The name and addressof one or more residents of this State upon whom notices, process affecting it,or orders of the Commissioner may be served;
(4) A statement showingits technical qualifications for acting in the capacity for which it seeks alicense; and
(5) Any other relevantinformation and documents that the Commissioner may require.
If the Commissioner determinesthat the applicant and the natural persons through whom it acts are qualifiedto provide the services proposed and that all requirements of law are met, theCommissioner shall issue a license specifying the authorized activity of theapplicant. The Commissioner shall not issue a license if the proposed activitywould tend to create a monopoly or to lessen or to destroy price competition.Licenses issued pursuant to this section shall remain in effect until thelicensee withdraws from the State or until the license is suspended or revoked.Any change in or amendment to any document required to be filed under thissection shall be promptly filed with the Commissioner. Every statisticalorganization shall file a statistical plan with the Commissioner for approvalfor each line of insurance for which the organization requests to be licensed.The Commissioner may, in the Commissioner's discretion, modify the plan tocollect additional types of data. No statistical organization shall engage inany unfair or unreasonable practice with respect to its activities.
(c) Statisticalorganizations licensed pursuant to subsection (b) of this section and admittedinsurers are authorized to exchange information and experience data between andamong themselves in this State and with statistical organizations and insurersin other states and may consult with them with respect to rate making and theapplication of rating systems.
(d) The Commissionershall adopt or approve reasonable rules, including rules providing statisticalplans, for use thereafter by all insurers in the recording and reporting ofloss and expense experience, in order that the experience of those insurers maybe made available to the Commissioner. The Commissioner may designate one ormore statistical organizations to assist him or her in gathering and makingcompilations of the experience. All insurers, for lines of insurance thatrequire data to be reported, shall report their data to one of the designatedstatistical organizations.
(e) The Commissionershall, at least once every three years, make or cause to be made an examinationof each statistical organization licensed pursuant to subsection (b) of thissection. This examination shall relate only to the activities conducted pursuantto this Article and to the organizations licensed under this Article. Theofficers, manager, agents, and employees of any statistical organization may beexamined at any time under oath and shall exhibit all books, records, accounts,documents, or agreements governing its method of operation. In lieu of anyexamination, the Commissioner may accept the report of an examination made bythe insurance advisory official of another state, pursuant to the laws of thatstate.
(f) Subject to therequirements of this Article and of G.S. 58‑2‑70, the Commissionermay suspend or revoke the license of any statistical organization or impose amonetary penalty against any statistical organization where (i) theCommissioner has reason to believe that any statistical organization hasviolated any provision of this Chapter, or (ii) the statistical organizationfails to comply with an order of the Commissioner within the time limited bythe order, or within any extension thereof that the Commissioner may grant. TheCommissioner shall not suspend the license of any statistical organization forfailure to comply with an order until the time prescribed for an appeal fromthe order has expired or, if an appeal has been taken, until the order has beenaffirmed. The Commissioner may determine when a suspension of a license shallbecome effective, and the suspension shall remain in effect for the periodfixed by the Commissioner unless the Commissioner modifies or rescinds thesuspension, or until the order upon which the suspension is based is modified,rescinded, or reversed. No license shall be suspended or revoked, and nomonetary penalty shall be imposed except upon a written order of theCommissioner stating the Commissioner's findings, made after a hearing heldupon not less than 10 days' written notice to the person or organization, andspecifying the alleged violation.
(g) A statisticalorganization is considered an insurance company for purposes of theapplicability of G.S. 58‑6‑7. (2005‑210, s. 18; 2006‑264, s. 45(b).)