§ 58-36-85. Termination of a nonfleet private passenger motor vehicle insurance policy.
§ 58‑36‑85. Termination of a nonfleet private passenger motor vehicle insurance policy.
(a) Definitions. Thefollowing definitions apply in this section:
(1) Policy. A nonfleetprivate passenger motor vehicle liability insurance policy, including a policythat provides medical payments, uninsured motorist, or underinsured motoristcoverage, whose named insured is one individual or two or more individuals whoreside in the same household.
(2) Terminate. Tocancel or refuse to renew a policy.
(b) TerminationRestrictions. An insurer shall not terminate a policy for a reason that isnot specified in G.S. 58‑2‑164(g), 58‑36‑65(g), or 58‑37‑50.A termination of a policy is not effective unless the insurer either hasnotified a named insured of the termination by sending a written terminationnotice by first class mail to the insured's last known address or is notrequired by this subsection to send a written termination notice. Proof ofmailing of a written termination notice is proof that the notice was sent.
An insurer is not required tosend a written termination notice if any of the following applies:
(1) The insurer hasmanifested its willingness to renew the policy by issuing or offering to issuea renewal policy, a certificate, or other evidence of renewal.
(2) The insurer hasmanifested its willingness to renew the policy by any means not described insubdivision (1) of this subsection, including mailing a premium notice orexpiration notice by first class mail to the named insured and the failure ofthe insured to pay the required premium on or before the premium due date.
(3) A named insured hasgiven written notification to the insurer or its agent that the named insuredwants the policy to be terminated.
(c) Contents of Notice. The form of a written termination notice used by an insurer must be approvedby the Commissioner before it is used. A written termination notice must statethe reason for the termination and the date the termination is effective. Ifthe policy is terminated for nonpayment of the premium, the effective date maybe 15 days from the date the notice is mailed. If the policy is terminated forany other reason, the effective date must be at least 60 days after the noticeis mailed. A written termination notice must include or be accompanied by astatement that advises the insured of the penalty for driving a vehicle withoutcomplying with Article 13 of Chapter 20 of the General Statutes and that theinsured has the right to request the Department to review the termination.
(d) Request for Review. An insured who receives from an insurer a written termination notice mayobtain review of the termination by filing with the Department a writtenrequest for review within 10 days after receiving a termination notice thatcomplies with subsection (c) of this section. An insured who does not file arequest within the required time waives the right to a review.
(e) AdministrativeReview. When the Department receives a written request to review atermination, it must investigate and determine the reason for the termination.The Department shall issue a letter requiring one of the following uponcompleting its review:
(1) Approval of thetermination, if it finds the termination complies with the law.
(2) Renewal orreinstatement of the policy, if it finds the termination does not comply withthe law.
(3) Renewal orreinstatement of the policy and payment by the insurer of the costs of theDepartment's review, not to exceed one thousand dollars ($1,000), if it findsthe termination does not comply with the law and the insurer willfully violatedthis section.
The Department shall mail theletter to the insured and the insurer. An insured or an insurer who disagreeswith the determination of the Department in the letter may file a petition fora contested case under Article 3A of Chapter 150B of the General Statutes andthe rules adopted by the Commissioner to implement that Article. The petitionmust be filed within 30 days after receiving the copy of the letter.
(f) Delegation. TheCommissioner shall designate an employee or a deputy to conduct thedepartmental review of a termination. The Commissioner may designate a deputyto conduct a contested case hearing concerning a termination. The Commissionermay not designate a deputy who conducted the departmental review of atermination to conduct a contested case hearing concerning the sametermination.
(g) Effect of Review onPolicy. A policy shall remain in effect during administrative and judicialreview of an insurer's action to terminate the policy.
(h) Liability Limit. Thereis no liability on the part of and no cause of action for defamation orinvasion of privacy arises against an insurer, an insurer's authorizedrepresentatives, agents, or employees, or a licensed insurance agent or brokerfor a communication or statement made concerning a written notice oftermination.
(i) Records. Aninsurer shall keep a record of a termination for three years. (1993 (Reg. Sess., 1994), c.761, s. 30; 1995, c. 517, s. 22; 2008‑124, s. 4.2.)