§ 58-58-255. Prohibited practices.
§ 58‑58‑255. Prohibited practices.
(a) It is a violationof this Part for any person to enter into a contract within a two‑yearperiod commencing with the date of issuance of the policy unless the viatorcertifies to the provider that one or more of the following conditions havebeen met within the two‑year period:
(1) The policy wasissued upon the viator's exercise of conversion rights arising out of a policy,provided the total time covered under the conversion policy plus the timecovered under the prior policy is at least 24 months, or the contestability andsuicide time periods have been waived by the insurer. The time covered under agroup policy shall be calculated without regard to any change in insurancecarriers, provided the coverage has been continuous and under the same groupsponsorship.
(2) The viator is acharitable organization exempt from taxation under 26 U.S.C. § 501(c)(3).
(3) The viator is not anatural person (e.g., the owner is a corporation, limited liability company,partnership, etc.).
(4) The viator submitsindependent evidence to the provider that one or more of the followingconditions have been met within the two‑year period:
a. The viator orinsured is terminally or chronically ill.
b. The viator's spousedies.
c. The viator divorceshis or her spouse.
d. The viator retiresfrom full‑time employment.
e. The viator becomesphysically or mentally disabled and a physician determines that the disabilityprevents the viator from maintaining full‑time employment.
f. The viator was theinsured's employer at the time the policy was issued and the employmentrelationship terminated.
g. A final order,judgment, or decree is entered by a court of competent jurisdiction, on theapplication of a creditor of the viator, adjudicating the viator bankrupt orinsolvent, or approving a petition seeking reorganization of the viator orappointing a receiver, trustee, or liquidator to all or a substantial part ofthe viator's assets.
h. The viatorexperiences a significant decrease in income that is unexpected and thatimpairs the viator's reasonable ability to pay the policy premium.
i. The viator orinsured disposes of his or her ownership interests in a closely heldcorporation.
(b) Copies of theindependent evidence described in subdivision (a)(4) of this section anddocuments required by G.S. 58‑58‑250(a) shall be submitted to theinsurer when the provider submits a request to the insurer for verification ofcoverage. The copies shall be accompanied by a letter of attestation from theprovider that the copies are true and correct copies of the documents receivedby the provider.
(c) If the providersubmits to the insurer a copy of the owner or insured's certification describedin subdivision (a)(4) and subsection (b) of this section when the providersubmits a request to the insurer to effect the transfer of the policy to theprovider, the copy shall be deemed to conclusively establish that the contractsatisfies the requirements of this section, and the insurer shall timelyrespond to the request. (2001‑436, s. 3.)