DOI Omnibus Bill.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025

SESSION LAW 2025-45
HOUSE BILL 737

*H737-v-5*
AN ACT TO ELIMINATE THE TRAINING COURSE REQUIREMENTS FOR INSURANCE
PRODUCER LICENSURE, TO CLARIFY THE APPLI CABILITY OF THE CAP ON
INSURANCE REFERRAL FEES PAID TO NONLICENSED PERSONS, TO MAINTAIN
NAIC ACCREDITATION O F THE DEPARTMENT OF INSURANCE BY
IMPLEMENTING GROUP CAPITAL CALCULATION AND LIQUIDITY STRESS TEST
REQUIREMENTS, TO AME ND THE NORTH CAROLIN A PROFESSIONAL
EMPLOYER ORGANIZATIO N ACT, TO REVISE THE INSURANCE GUARANTY
ASSOCIATION ACT, TO CLARIFY INSURANCE RE BATE PERMITTED TRADE
PRACTICES, TO CLARIF Y T HE LAWS RELATING TO THE EXCHANGE OF
BUSINESS BETWEEN INSURANCE PRODUCERS, TO REQUIRE DRIVERS SUBJECT
TO THE INEXPERIENCED DRIVER PREMIUM SURC HARGE TO MAINTAIN OR
BENEFIT FROM CONTINU OUS LIABILITY COVERA GE, TO PLACE
RESTRICTIONS ON RESI DENTIAL LEASES REQUI RING RENTERS INSURAN CE,
TO MAKE CHANGES TO T HE EFFECTIVE DATE OF CERTAIN PROVISIONS
CONCERNING THE CALCULATION OF UNDERINSURED MOTORIST COVERAGE
AND INSURANCE RATEMAKING LAWS IN S.L. 2023-133, AS AMENDED BY S.L.
2024-29, TO AUTHORIZ E SALESMEN TO REGIST ER WITH MULTIPLE DEA LERS
UNDER COMMON OWNERSH IP OR CONTROL, AND T O AUTHORIZE POLICY
CANCELLATION UPON CH ARGEBACK OF A CREDIT CARD PREMIUM
PAYMENT.

The General Assembly of North Carolina enacts:

PART I. ELIMINATE TR AINING COURSE REQUIR EMENTS FOR INSURANCE
PRODUCER LICENSURE
SECTION 1.(a) G.S. 58-33-30 reads as rewritten:
"§ 58-33-30. License requirements.
The Commissioner shall not issue or continue any license of an insurance producer, limited
representative, adjuster, or motor vehicle damage appraiser except as follows:
…
(d) Education and Training. –
(1) Each applicant must have had special education, training, or
experience of sufficient duration and extent reason ably to satisfy the
Commissioner that the applicant possesses the competence necessary
to fulfill the responsibilities of comply with all education, training, or
experience requirements of this Chapter to be licensed as an insurance
producer, limited repre sentative, adjuster, or motor vehicle damage
appraiser. The Commissioner shall not require an individual who
applies for an insurance producer license in this State to complete any
specific amount of instruction or any specific course of instruction.
(2) All individual applicants for licensing as insurance producers under
G.S. 58-33-26(c1)(1), (2), (4), (6), or (7) shall furnish evidence

Page 2 Session Law 2025-45 House Bill 737
satisfactory to the Commissioner of successful completion of at least
20 hours of instruction for each license, which shall in all cases include
the general principles of insurance and any other topics relevant to the
license that the Commissioner establishes by administrative rules. Any
applicant who submits satisfactory evidence of having successfully
completed a producer training course that has been approved by the
Commissioner and that is offered by or under the auspices of a
property, casualty, life or accident and health or sickness insurance
company admitted to do business in this State or a professional
insurance association shall be deemed to have satisfied the educational
requirements of this subdivision.
(3) Each resident applicant for a Medicare supplement and long-term care
insurance license shall furnish evidence satisfactory to the
Commissioner of successful completion of 10 hours of instruction,
which shall in all cases include the principles of Medicare supplement
and long -term care insurance and federal and North Carolina law
relating to such insurance. A resident applicant who submits
satisfactory evidence of having successfully completed a producer
training course that has been approved by the Commissioner and that
is offered by or under the auspices of a licensed life or health insurer
or a professional insurance association satisfies the educational
requirements of this subdivision.
(e) Examination. –
…
(5) The Commissioner shall collect in advance the examination and
registration fees provided in G.S. 58-33-125 and in subsection
subdivision (4) of this section. subsection. The Commissioner shall
make or cause to be made available to all applicants, for a reasonable
fee to offset the costs of production, materials that he considers
necessary for the applicants' proper preparation for examinations. The
Commissioner may contract directly with publishers and other
suppliers for the production of the preparatory materials, and contracts
so let by the Commissioner shall not be subject to Article 3 of Chapter
143 of the General Statutes. However, the Commissioner shall: (i)
submit all proposed contracts for suppl ies, materials, printing,
equipment, and contractual services that exceed one million dollars
($1,000,000) authorized by this subdivision to the Attorney General or
the Attorney General's designee for review as provided in
G.S. 114-8.3; and (ii) include in all contracts to be awarded by the
Commissioner under this subdivision a standard clause which provides
that the State Auditor and internal auditors of the Commissioner may
audit the records of the contractor during and after the term of the
contract to v erify accounts and data affecting fees and performance.
The Commissioner shall not award a cost plus percentage of cost
contract for any purpose.
…."
SECTION 1.(b) G.S. 58-33-32 reads as rewritten:
"§ 58-33-32. Interstate reciprocity in producer licensing.
…
(g) An individual who applies for an insurance producer license in this State who was
previously licensed for the same lines of authority in that individual's home state shall not be

House Bill 737 Session Law 2025-45 Page 3
required to complete any prelicensing education or examination. This exemption is available only
if:
…."
SECTION 1.(c) This section becomes effective October 1, 2025, and applies to
licensure applications submitted on or after that date.

PART II. CLARIFY INSURANCE FEE REFERRAL CAP
SECTION 2.(a) G.S. 58-33-82(f) reads as rewritten:
"(f) No commission, fee, or other valuable consideration authorized under subsection (e)
of this section for the referral of insurance business by an unlicensed individual to a licensed
insurance agent or broker producer licensed under G.S. 58-33-26(c1)(6) shall exceed fifty dollars
($50.00) in value. A violation of this subsection may be punished by a fine not to exceed two
thousand dollars ($2,000) for each violation. This subsection shall not apply to title insurance."
SECTION 2.(b) This section becomes effective October 1, 2025, and applies to any
referral of personal lines insurance business made on or after that date.

PART III. MAINTAIN NAIC ACCREDITATION OF DOI
SECTION 3.(a) Article 19 of Chapter 58 of the General Statutes is amended by
adding the following new sections to read:
"§ 58-19-26. Group capital calculation.
(a) Reporting Requirement. – The ultimate controlling person of every insurer subject to
registration pursuant to G.S. 58-19-25 shall concurrently file with the registration an annual
group capital calculation report. The report shall be filed with the lead state commissioner.
(b) Exemptions. – The ultimate controlling person of any of the following is exempt from
the filing requirement of subsection (a) of this section:
(1) An insurance holding company system that (i) has only one insurer within its
holding company structure, (ii) only writes insurance business, (iii) is only
licensed in its state of domicile, and (iv) assumes no business from any other
insurer.
(2) An insurance holding company system that is required to perform a group
capital calculation specified by the United States Federal Reserve Board.
When this exemption applies, t he lead state commissioner shall request the
calculation from the United States Federal Reserve Board. If the United States
Federal Reserve Board cannot share the calculation with the lead state
commissioner under the terms of any information sharing agreements in
effect, then the insurance holding company system is not exempt from the
group capital calculation filing.
(3) An insurance holding company system whose non -United States group-wide
supervisor is located within a reciprocal jurisdiction that recognizes the United
States state regulatory approach to group supervision and group capital.
(4) An insurance holding company system that meets both of the following
requirements:
a. The insurance holding company system provides information to the
lead state commissioner that meets the requirements for accreditation
under the NAIC financial standards and accreditation program . The
insurance holding company may provide this information either
directly or indirectly throug h its group-wide supervisor. If provid ed
indirectly through a group -wide supervisor, the supervisor is
responsible for determining whether the information provided is
sufficient to permit the lead state commissioner to comply with the

Page 4 Session Law 2025-45 House Bill 737
NAIC group supervision approach, as detailed in the NAIC Financial
Analysis Handbook.
b. The insurance holding company system 's non-United States
group-wide supervisor is not in a reciprocal jurisdiction but
nonetheless recognizes the group capital calculation as the worldwide
group capital assessment for United States insurance groups who
operate in that jurisdiction.
(c) Recognition of Group Capital Calculation. – For purposes of subdivision (b)(4) of
this section, a non-United States jurisdiction recognizes the group capital calculation if it satisfies
any of the following criteria:
(1) A competent regulatory authority in the jurisdiction affirms that insurers and
insurance groups whose lead state is accredited by the NAIC under the NAIC
accreditation program shall be subject only to worldwide prudential insurance
group supervision , including worldwide group governance, solvency and
capital, and r eporting, as applicable, by th at jurisdiction 's lead state
commissioner and will not be subject to group supervision, including
worldwide group governance, solvency and capital, and reporting, at the level
of the worldwide parent undertaking of the insurance or reinsurance group by
the non-United States jurisdiction.
(2) A competent regulatory authority in the jurisdiction affirms that information
regarding insurers and their parent, subsidiary, or affiliated entities, if
applicable, shall be provided to the lead state commissioner in accordance
with a n information sharing agreement in the form of a memoran dum of
understanding or s imilar document . Acceptable information sharing
agreements include the International Association of Insurance Supervisors
Multilateral Memorandum of Understanding or other multilateral memoranda
of understanding coordinated by the NAIC. The jurisdiction does not satisfy
this criteria if the lead state commissioner determines, in consultation with the
NAIC, that the requirements of the information sharing agreements are no
longer in force.
(3) If no United States insurance groups operate in the non -United States
jurisdiction, that non -United States jurisdiction notifies the lead state
commissioner and the International Association of Insurance Supervisors in
writing that the jurisdiction considers the group capital calculation an
acceptable international capital standard.
(d) Limitation of Exemptions. – Notwithstanding subsection (b) of this section, the lead
state commissioner shall require filing of the group capital calculation for United States
operations of any non -United States based insurance holding company system if the lead state
commissioner determines that the filing is required for (i) prudential oversight and solvency
monitoring purposes or (ii) ensuring the competitiveness of the insurance marketplace.
(e) Consideration and Correction of NAIC Materials. – The lead state commissioner shall
consider any relevant lists, reports, and recommendations published by the NAIC in determining
whether the exceptions of subdivision (b)(4) of this section apply to an insurer. If the lead state
commissioner's determination differs from relevant materials published by the NAIC , the lead
state commissioner shall provide the NAIC with written justification for the difference supported
by documentation. If published NAIC materials indicate that a non -United States jurisdiction
recognizes the group capital calculation and the lead state commissioner determines that the
jurisdiction no longer meets the requirements of subsection (c) of this section , the lead state
commissioner may recommend a correction of the materials to the NAIC.
(f) Discretionary Exemptions. – The lead state commissioner may either (i) exempt the
ultimate controlling person of an insurance holding company system from the filing requirement

House Bill 737 Session Law 2025-45 Page 5
of subsection (a) of this section or (ii) authorize the ultimate controlling person of an insurance
holding company to file a limited group capital filing in lieu of the filing requirement of
subsection (a) of this section if all of the following apply:
(1) The insurance holding company system has annual direct written and
unaffiliated assumed premium, including international direct and assumed
premium, but excluding premiums reinsured with the Federal Crop Insurance
Corporation and Federal Flood Program, of l ess than one billion dollars
($1,000,000,000).
(2) The insurance holding company system does not include insurers within its
holding company structure that are domiciled outside of the United States or
one of its territories.
(3) The insurance holding company system does not include a banking,
depository, or other financial entity that is subject to an identified regulatory
capital framework within its holding company structure.
(4) The insurance holding company system attests that there are no material
changes in transactions between insurers and non -insurers in the group that
have occurred since the last filing of an annual group calculation report, if any.
(5) The non-insurers within the insurance holding company system do not pose a
material financial risk to the insurer 's ability to honor policyholder
obligations.
(g) Resumption of Filings. – If the lead state commissioner determines that an insurance
holding company system exempted from the filing requirements of subsection (a) of this section
no longer meets the requirements for an exemption, the insurance holding company system shall
file the group capital calculation at the next annual filing date unless given an extensio n by the
lead state commissioner based on reasonable grounds shown. If the lead state commissioner ,
pursuant to subsection (f) of this section, either grants a discretionary exemption or authorizes a
limited group capital filing , the lead state commissioner may require the ultimate controlling
person of that insurance holding company system to file an annual group calculation at any time
if any of the following apply:
(1) Any insurer within the insurance holding company system is in a risk-based
capital action level event as set forth in Article 12 of this Chapter or a similar
standard for a non-United States insurer.
(2) Any insurer within the insurance holding company system meets one or more
of the standards of an insurer deeme d to be in hazardous financial condition
pursuant to the criteria provided in G.S. 58-30-60.
(3) Any insurer within the insurance holding company system otherwise exhibits
qualities of a troubled insurer as determined by the lead state commissioner
based on unique circumstances , including the type and volume of business
written, ownership and organizational structure, federal agency requests, and
international supervisor requests.
"§ 58-19-27. Liquidity stress test.
(a) Participation and Reporting Requirement. – The ultimate controlling person of every
insurer subject to registration pursuant to G.S. 58-19-25 shall be included in the NAIC liquidity
stress test framework and file a report with the lead state commissioner detailing the results of a
specific year's liquidity stress test if either of the following applies:
(1) The insurer meets the scope criteria of that data year 's NAIC liquidity stress
test framework.
(2) The insurer did not meet the scope criteria of that data year 's liquidity stress
test framework, but the lead state commissioner , in consultation with t he
NAIC Financial Stability Task Force or its successor, nonetheless determines
the insurer should be included in the NAIC liquidity stress test framework for

Page 6 Session Law 2025-45 House Bill 737
that data year. In making this determination, the lead state commissioner shall
attempt to avoid the frequent inclusion or exclusion of insurers.
(b) The performance of, and filing of the results from, a specific year 's liquidity stress
test shall comply with (i) the NAIC liquidity stress test framework 's instructions and reporting
templates for that year and (ii) all lead state commissioners' directives issued in consultation with
the NAIC Financial Stability Task Force or its successor.
(c) Exemptions. – The lead state commissioner may, in consultation with the NAIC
Financial Stability Task Force or its successor, exempt an ultimate controlling person from the
reporting requirements of subsection (a) of this section. The lead state commissioner shall
consider the intent of regulators to avoid having insurers scoped in and out of the NAIC liquidity
stress test framework on a frequent basis when making this determination.
"§ 58-19-28. Dissemination prohibited.
(a) Unless otherwise provided by law, the making, publishing, disseminating, circulating,
or placing before the public, or causing directly or indirectly to be made, published, disseminated,
circulated, or placed before the public in a newspaper, magazine , or other publication, or in the
form of a notice, circular, pamphlet, letter , or poster, or over any radio or television station or
any electronic means of communication available to the public, or in any other way as an
advertisement, announcement, or statement containing a representation or statement with regard
to the group capital calculation, group capital ratio, the liquidity stress test results, or supporting
disclosures for the liquidity stress test of any insurer or any insurer group, or of any component
derived in the calculation by any insurer, broker, or other person engaged in any manner in the
insurance business is prohibited.
(b) Notwithstanding subsection (a) of this section, if any materially false statement with
respect to the group capital calculation, resulting group capital ratio, an inappropriate comparison
of any amount to an insurer 's or insurance group 's group capital calculation or resulting group
capital ratio, liquidity stress test result, supporting disclosures for the liquidity stress test, or an
inappropriate comparison of any amount to an insurer 's or insurance group's liquidity stress test
result, or supporting disclosures is published in any written publication and the insurer is able to
demonstrate to the Commissioner with substantial proof the falsity or inappropriateness of the
statement, then the insurer may publish announcements in a written publication if the sole
purpose of the announcement is to rebut the materially false or inappropriate statement."
SECTION 3.(b) G.S. 58-19-5 reads as rewritten:
"§ 58-19-5. Definitions.
As used in this Article, unless the context requires otherwise, the following terms have the
following meanings:
…
(10a) Group capital calculation. – A report, completed in accordance with the group
capital calculation instructions as adopted and amended by the NAIC, used to
evaluate the capital adequacy of insurance holding company systems that
includes information on the sources of capital within the system, where that
capital is located, and sources of risk.
(10a)(10b) Group-wide supervisor. – The regulatory official authorized to engage in
conducting and coordinating group -wide supervision activities who is
determined or acknowledged by the Commissioner under G.S. 58-19-38 to
have sufficient significant contacts with the internationa lly active insurance
group.
…
(12b) Lead state commissioner. – The person responsible for regulating the
insurance holding company system as determined by the Commissioner in
accordance with the procedures within the Financial Analysis Handbook
adopted by the NAIC.

House Bill 737 Session Law 2025-45 Page 7
(12c) Limited group capital filing. – A simplified version of the group capital
calculation, completed in accordance with procedures adopted by the NAIC,
where an insurance holding company system only provides a limited amount
of data, allowing them to avoid the filing of a full group capital calculation.
(12d) Liquidity stress test. – A process simulating extreme market conditions to
assess an entity's ability to maintain sufficient liquidity in response to adverse
events.
(12e) NAIC. – The National Association of Insurance Commissioners.
(12f) NAIC liquidity stress test framework. – A publication, adopted and amended
by the NAIC in accordance with procedures adopted by the NAIC, which
includes a history of the NAIC 's development of regulatory liquidity stress
testing, the scope criteria applicable for a specific data year, and the liquidity
stress test instructions and reporting templates for a specific data year.
…
(13a) Reciprocal jurisdiction. – As defined in G.S. 58-7-21(b)(4b).
(13b) Scope criteria. – Designated exposure bases , detailed in the NAIC liquidity
stress test framework along with minimum magnitudes thereof for the
specified data year, used to establish a preliminary list of insurers included in
the NAIC liquidity stress test framework for that data year.
…."
SECTION 3.(c) G.S. 58-19-15 reads as rewritten:
"§ 58-19-15. Acquisition of control of or merger with domestic insurer.
…
(b) The statement to be filed with the Commissioner under subsection (a) of this secti on
shall be furnished on a Form A as prescribed by the Commissioner, made under oath or
affirmation, and shall contain the following information:
…
(11a) An agreement by the person required to file the statement referred to in
subsection (a) of this section that it will provide the annual report, as specified
in G.S. 58-19-25, G.S. 58-19-25(l), for so long as control exists.
…."
SECTION 3.(d) G.S. 58-19-25 reads as rewritten:
"§ 58 -19-25. Registration of insurers.insurers; disclaimer of affiliation; enterprise risk
filings.
…
(c) No information need be disclosed on the registration statement filed pursuant to
subsection (b) of this section if such information is not material for the purposes of this section.
Unless the Commissioner by rule or order pr ovides otherwise, all material. For purposes of this
section, all sales, purchases, exchanges, loans or extensions of credit, investments, or guarantees
involving one-half of one percent ( 1//s2%) (0.5%) or less of an insurer's admitted assets as of
the preceding December 31 are not material for the purposes of this section.material, unless the
Commissioner by rule or order provides otherwise . This subsection does not apply to the
reporting requirements of G.S. 58-19-26 and G.S. 58-19-27.
…
(l) Effective January 1, 2016, the ultimate controlling person of every insurer subject to
registration shall also file an annual enterprise risk report on Form F as prescribed by the
Commissioner. The report shall, to the best of the ultimate controlling pers on's knowledge and
belief, identify the material risks within the insurance holding company system that could pose
enterprise risk to the insurer. The report shall be filed with the lead state commissioner of the
insurance holding company system as determi ned by the procedures within the Financial
Analysis Handbook adopted by the NAIC.commissioner."

Page 8 Session Law 2025-45 House Bill 737
SECTION 3.(e) G.S. 58-19-40 reads as rewritten:
"§ 58-19-40. Confidential treatment.
(a) Documents, materials, or other information in the possession or control of the
Department that are obtained by or disclosed to the Commissioner or any other person in the
course of an examination or investigation made pursuant to G.S. 58-19-35, and all information
reported or provided to the Department pursuant to subd ivisions (11a) and (11b) of
G.S. 58-19-15(b), G.S. 58-19-25, G.S. 58-19-30 and G.S. 58-19-38 are recognized by this State
as being proprietary and to contain trade secrets, and shall be confidential by law and privileged,
shall not be considered a public record under either G.S. 58-2-100 or Chapter 132 of the General
Statutes, shall not be subject to subpoena, and shall not be subject to discovery or admissible in
evidence in any private civil action. However, the Commissioner is authorized to use the
documents, materials, or other information in the furtherance of any regulatory or legal action
brought as a part of the Commissioner's official duties. The Commissioner shall not otherwise
make the documents, materials, or other information public without the prior written consent of
the insurer to which it pertains unless the Commissioner, after giving the insurer and its affiliates
who would be affected thereby notice and opportunity to be heard, determines that the interest of
policyholders, shareholders, or the public will be served by the publication thereof, in which
event the Commissioner may publish all or any part of the information in such manner as may
be deemed appropriate.
(a1) With respect to information provided to the Department pursuant to G.S. 58-19-26
and G.S. 58-19-27, the Commissioner shall:
(1) Maintain the confidentiality of the group capital calculation and group capital
ratio produced within the calculation and any group capital information
received from an insurance holding company system supervised by the
Federal Reserve Board or any United States group-wide supervisor.
(2) Maintain the confidentiality of the liquidity stress test results and supporting
disclosures and any liquidity stress test information received from an
insurance holding company system supervised by the Federal Reserve Board
and non-United States group-wide supervisors.
…
(c) In order to assist in the performance of the duties imposed by this Article, the
Commissioner:
(1) May share documents, materials, or other information, including the
confidential and privileged documents, materials, or information subj ect to
subsection (a) of this section, including proprietary and trade secret documents
and materials, with other all of the following:
a. Other state, federal, and international regulatory agencies, with the
NAIC and its affiliates and subsidiaries, and with state, agencies.
b. The NAIC.
c. Any third-party consultants designated by the Commissioner.
d. State, federal, and international law enforcement authorities, including
members of any supervisory college described in G.S. 58-19-37,
provided that the recipient agrees in writing to maintain the
confidentiality and privileged status of the document, material, or
other information and has verified in writing the legal authority to
maintain confidentiality.
(2) Notwithstanding subdivision (1) of this subse ction, may only share
confidential and privileged documents, material, or information reported
pursuant to G.S. 58-19-25 G.S. 58-19-25(l) with Commissioners of states
having statutes or regulations substantially similar to subsection (a) of this
section and who have agreed in writing not to disclose such information.

House Bill 737 Session Law 2025-45 Page 9
(3) May receive documents, materials, or information, including otherwise
confidential and privileged documents, materials, or information information,
including proprietary and trade -secret information, from the NAIC and its
affiliates and subsidiaries and from regulatory and law enforcement officials
of other foreign or domestic jurisdictions, and shall maintain as confidential
or privileged any document, material, or information rece ived with notice or
the understanding that it is confidential or privileged under the laws of the
jurisdiction that is the source of the document, material, or information.
(4) Shall enter into written agreements with the NAIC and any third -party
consultant designated by the Commissioner governing sharing and use of
information provided pursuant to this Article consistent with this subsection
that shall:shall do all of the following:
a. Require a recipient to maintain the confidentiality and privileged
status of any documents, materials, or information. Specify procedures
and protocols regarding the confidentiality and security of information
shared with the NAIC and its affiliates and subsidiaries or a third-party
consultant designated by the Commissioner pursuant to this Article,
including procedures and protocols for sharing by the NAIC with other
state, federal, or international regulators;regulators. The agreement
shall require a recipient to verify in writing that the recipient has
reviewed the legal authority supporting any confidentiality or
privilege.
b. Specify that ownership of information shared with the NAIC and its
affiliates and subsidiaries or a third -party consultant pursuant to this
Article remains with the Commissioner, and the NAIC's use of the
information by the NAIC or third -party consultant designated by the
Commissioner is subject to the direction of the
Commissioner;Commissioner.
c. Prohibit the NAIC or third -party consultant designated by the
Commissioner from storing the information shared pursuant to this
section in a permanent database after the underlying analysis is
completed. This sub -subdivision does not apply to documents,
material, or information reported pursuant to G.S. 58-19-27.
c.d. Require prompt notice to be given to an insurer whose confidential
information in the possession of the NAIC or a third-party consultant
designated by the Commissioner pursuant to this Article is subject to
a request or subpoena to the NAIC for disclosure or production;
andproduction.
d.e. Require the NAIC and its affiliates and subsidiaries or a third -party
consultant designated by the Commissioner to consent to intervention
by an insurer in any judicial or administrative action in which the
NAIC and its affiliates and subsidiaries or a third -party consultant
designated by the Commissioner may be required to disclose
confidential information about the insurer shared with the NAIC and
its affiliates and subsidiaries or a third-party consultant designated by
the Commissioner pursuant to Article 19 of this Chapter.
f. Require the Commissioner to notify an insurer when documents,
materials, or information confidential or privileged to that insurer are
shared with a third-party consultant. The notification shall include the
identity of the third -party consultant. This sub -subdivision only

Page 10 Session Law 2025-45 House Bill 737
applies to documents, materials, or information shared pursuant to
G.S. 58-19-27.
…
(f) Documents, materials, or other information in the possession or control of the NAIC
or a third -party consultant designated by the Commissioner pursuant to a requirement of this
Article shall be confidential by law and privileged, shall not be considered a public record under
G.S. 58-2-100 or Chapter 132 of the General Statutes, shall not be subject to subpoena, and shall
not be subject to discovery or admissible in evidence in any private civil action."
SECTION 3.(f) This section becomes effective January 1, 2026.

PART IV. CHANGES TO THE NORTH CAROLINA P ROFESSIONAL EMPLOYER
ORGANIZATION ACT
SECTION 4.(a) G.S. 58-89A-5 reads as rewritten:
"§ 58-89A-5. Definitions.
In this Article:
…
(3) "Audited GAAP financial statement" means a financ ial statement that is
audited by an independent certified public accountant and presented in
accordance with generally accepted accounting principles.
…
(17) "Tangible net worth" means the difference between total tangible assets and
total liabilities. For purposes of this definition, tangible assets are physical
assets and do not include goodwill, patents, copyrights, intellectual property,
trademarks, and any other non-physical asset.
(17)(18) "Temporary employees" means persons employed under an arrangement
by which an organization hires its own employees and assigns them to a client
company to support or supplement the client's workforce in a special work
situation, including:
…
(19) "Working capital" means the difference between current assets and current
liabilities."
SECTION 4.(b) G.S. 58-89A-35 reads as rewritten:
"§ 58-89A-35. License required; professional employer organization groups.
…
(b) Two or more professional employer organizations persons that are controlled by the
same ultimate parent, entity, or persons may be licensed as a professional employer organization
group. A professional employer organization group may satisfy the reporting and financia l
requirements of this Article on a consolidated or combined basis. As a condition of licensure as
a professional employer organization group, each professional employer organization person that
is proposes to be a member of the a professional employer organization group shall guarantee
payment of all financial obligations of every other member. Notwithstanding the definition of
"person" in this Article, whenever two or more entities combine to seek issuance of a single
license under this Article, the requirements for group licensure under this subsection shall be met
before issuance of a license and any license issued will be a professional employer organization
group license issued pursuant to this subsection."
SECTION 4.(c) G.S. 58-89A-50 reads as rewritten:
"§ 58-89A-50. Surety bond; letter of credit; other deposits.
(a) An applicant for licensure shall file with the Commissioner a surety bond, or other
items as set forth in subsection (f) of this section, in the amount of one hundred thousand dollars
($100,000) for the benefit of the Commissioner. An applicant whose current assets do not exceed
current liabilities or licensee who does not have positive working capital pursuant to

House Bill 737 Session Law 2025-45 Page 11
G.S. 58-89A-60(b) shall file an additional surety bond or oth er items set forth in subsection (f)
of this section equal to or in excess of current liabilities less current assets. the applicant's or
licensee's negative working capital.
…."
SECTION 4.(d) G.S. 58-89A-60(g) is repealed.
SECTION 4.(e) G.S. 58-89A-60, as amended by Section 4(d) of this act, reads as
rewritten:
"§ 58-89A-60. License application.
(a) Every applicant for licensure shall file with the Commissioner, on a form prescribed
by the Commissioner, the following information:
…
(3) A list of all officers officers, directors, and other controlling persons of the
applicant, their biographical information, including their education,
management background, and business experience, and an affidavit from each
attesting to his or her good moral character and management competence.
…
(6) Any other reasonable information the Commissioner deems necessary and
requires by rule to establish that the applicant and the officers and controlling
persons are of good moral character, have business integrity, have applicable
educational and business experience, and have financial responsibility.
(b) Every applicant shall file with the Commissioner an audited GAAP financial
statement, prepared as of a date not more than 90 120 days before the date of application that
demonstrates that the applicant or licensee's current assets exceed current liabilities and attached
has a tangible net worth of not less than fif ty thousand dollars ($50,000) and positive working
capital. The applicant shall attach to which is the audited financial statement a separate document
signed by the applicant's chief executive and the chief financial officer certifying that (i) each
has reviewed the audited financial statement; (ii) based on each signatory's knowledge, the
audited financial statement does not contain any untrue or misleading statement of material fact
or omit a fact with respect to the period covered by the audited financial statement; and (iii) based
on each signatory's knowledge, the audited financial statement fairly presents in all material
respects the financial condition of the licensee applicant as of, and for, the period presented in
the audited financial statement.
Notwithstanding the requirements of this subsection, the Commissioner may, in the
Commissioner's discretion, accept an audited GAAP financial statement that has been prepared
more than 90 120 days before submission to the Commissioner if the Commissioner deems such
acceptance appropriate. The Commissioner may, in the Commissioner's discretion, impose
conditions upon such acceptance of audited financial statements prepared more than 90 120 days
prior to submission.
The audited GAAP financial statement shall be prepared in accordance with generally
accepted accounting principles and audited by an independent certified public accountant
licensed to practice in the jurisdiction in which such accountant is located and shall be without
qualification as to the going concern status of the PEO. A PEO group applicant. Persons applying
for a professional employer organization group license may submit combined or consolidated
audited financial statements to meet the requirements of this section, except that a PEO provided
that the c ombined or consolidated audited financial statement include a combining or
consolidating balance sheet and statement of operations of each proposed member as
supplemental information to the combined or consolidated audited financial statement. An
applicant that has not had sufficient operating history to have audited financial statements based
upon does not have at least 12 months of operating history must may meet the financial capacity
requirements of this subsection and present by filing with the Commissioner financial statements

Page 12 Session Law 2025-45 House Bill 737
that have been reviewed by a an independent certified public accountant.accountant and that have
been prepared as of a date not more than 90 days before the date of application.
(b1) The Commissioner may accept the audited financial statement of an applicant's parent
company, if the audited financial statement includes either a combining or consolidating balance
sheet, income statement, statement of changes in equity, and statement of cash flows as
supplemental information to the audited financial statement, the contents of which will allow the
Commissioner to determine the financial condition and financial responsibility of the applicant.
(b2) The Commissioner may accept the audited financial statement of an applicant's parent
company and consider the financial condition and financial responsibility of the parent company
in lieu of the applicant, if all of the following requirements are satisfied:
(1) The parent executes a guaranty agreement, in a form pre scribed by the
Commissioner, for the guaranty of all obligations related to the applicant 's
current and future client companies, including its obligations for payroll,
payroll-related taxes, workers ' compensation insurance, and employee
benefits.
(2) The applicant files with the Commissioner documentation acceptable to the
Commissioner evidencing the parent's control.
(3) The applicant submits an audited financial statement that meet s the
requirements of subsection (b1) of this section that allows the Commissioner
to determine the financial condition and financial responsibility of the parent
and the applicant.
…
(d) Every applicant shall furnish the Commissioner a complete set of fingerprints of each
officer, director, and controlling person in a form prescribed by the Commissioner. Each set of
fingerprints shall be certified by an authorized law enforcement officer.
Upon request by the Department, the State Bureau of Investigation sha ll provide to the
Department from the State and National Repositories of Criminal Histories the criminal history
of any applicant and the officer, director, and controlling person of any applicant. Along with the
request, the Department shall provide to the State Bureau of Investigation the fingerprints of the
person that is the subject of the request, a form signed by the person that is the subject of the
request consenting to the criminal record check and use of fingerprints and other identifying
information required by the State and National Repositories, and any additional information
required by the State Bureau of Investigation. The person's fingerprints shall be used by the State
Bureau of Investigation for a search of the State's criminal history rec ord file, and the State
Bureau of Investigation may forward a set of fingerprints to the Federal Bureau of Investigation
for a national criminal history record check. The Department shall keep all information obtained
pursuant to this subsection confidenti al. The State Bureau of Investigation may charge a fee to
offset the cost incurred by it to conduct a criminal record check under this section. The fee shall
not exceed the actual cost of locating, editing, researching, and retrieving the information.
In the event that an applicant has secured a professional employer organization license in
another state in which the professional employer organization's controlling persons have
completed a criminal background investigation within 12 months of this applicati on, a certified
copy of the report from the appropriate authority of that state may satisfy the requirement of this
subsection. This subsection also applies to a change in a the officers, directors, and other
controlling party persons of a professional employer organization. organizations and professional
employer organization groups licensed under this Article. For purposes of investigation under
this subsection, the Commissioner shall have all the power conferred by G.S. 58-2-50 and other
applicable provisions of this Chapter.
…
(g1) The Commissioner may deny the license of an applicant under this Article if the
Commissioner finds any of the following:

House Bill 737 Session Law 2025-45 Page 13
(1) That an officer, director, or other controlling person has:
a. Not met the requirements of G.S. 58-89A-40.
b. Made any untrue material statement or omitted any material
information regarding their background or experience.
c. Violated, or failed to comply with, any professional employer services
law or any rule or order of the Commissioner or of any oth er State
official responsible for the regulation of any aspect of the applicant 's
business.
d. Obtained or attempted to obtain the license through misrepresentation
or fraud.
e. Been convicted of a felony.
f. Been found in a final judgment or administrativ e proceeding to have
committed fraud or an unfair trade practice.
g. Been an officer, director, or other controlling person in another
professional employer organization that has had its license or
registration suspended, terminated, or revoked by any state.
(2) That the applicant is not current with respect to all of its obligations for
payroll, payroll -related taxes, workers ' compensation insurance, and
employee benefits and the applicant has failed to satisfy the Commissioner as
to the reasons why.
(3) That the applicant does not possess:
a. A tangible net worth of not less than fifty thousand dollars ($50,000).
b. Positive working capital, or in lieu of positive working capital,
substitute security as provided under G.S. 58-89A-50(a).
(4) That the applicant has not provided evidence satisfactory to the Commissioner
of financial responsibility.
(5) That the applicant has failed to satisfy the requirements of G.S. 58-89A-50.
(6) That a ground upon which the Commissioner could take disciplinary action
against a licensee or other person subject to licensure requirements pursuant
to G.S. 58-89A-155 applies to the applicant.
(h) If the Commissioner finds that the applicant has not fully met the requirements for
licensure, the Commissioner shall refuse to issue the license and shall notify the applicant in
writing of the denial, stating the grounds for the denial. The application may also be denied for
any reason for which a license may be suspended or terminated under G.S. 58-89A-155. To
obtain a review to determine the reasonableness of the Commissioner's denial, the applicant shall
make written demand upon the Commissioner within 30 days after notice is given under
G.S. 150B-38(c). The review shall be completed without undue delay, and the applicant shall be
notified promptly in writing as to the outcome of the review. If the applicant disagrees with the
outcome of the review and seeks a hearing, under Article 3A of Chapter 150B of the General
Statutes, on the outcome of the review, the applicant shall make a written demand upon the
Commissioner for the hearing within 30 days after notice of the outcome of the review is given
under G.S. 150B-38(c).
(i) Removal, demotion, or discharge of a an officer, director, or other controlling person
in response to an order of the Commissioner of the alleged unsuitability of that person is an
affirmative defense to any claim by that individual based on the removal, demotion, or discharge.
…."
SECTION 4.(f) G.S. 58-89A-70 reads as rewritten:
"§ 58-89A-70. License issuance and maintenance.
…

Page 14 Session Law 2025-45 House Bill 737
(c) By obtaining licensure under this Article, the officers, directors, and other controlling
persons of a licensee certify, under penalty of law, their compliance with the requirements of
licensure and of operation as a professional employer organization pursuant to this Article.
(d) Within 120 days after the end of each fiscal year, each licensee shall file with the
Commissioner all of the following information:
(1) Evidence of "financial responsibility" as set forth in G.S. 58 -89A-60(b).An
audited financial statement of the licensee or, if allowed by the Commissioner,
an audited financial statement of the licensee's parent. The audited financial
statement shall be in the form required by G.S. 58-89A-60(b), (b1), or (b2), as
appropriate.
…
(4) An attestation, executed by the chief financial officer and the chief executive
officer of the licensee, that the licensee is current with respect to all of its
obligations for payroll, payroll -related taxes, workers ' compensation
insurance, and employee benefits. If any of the obligations listed in this
subdivision are in dispute with a client and the disputed amount is material
when considered in the context of the licensee's most recent audited financial
statement, then the licensee shall disclose the nature of the dispute causing the
obligations to be unpaid and the amount of money in controversy.
(4)(5) Any other reasonable information the Commissioner determines is needed for
the review of a licensee.
(e) In order to maintain licensure, each licensee may be required to file with the
Commissioner no later than 45 60 days after the end of each quarter of the fiscal year:
(1) A financial statement for the preceding quarter that is not audited but is set
forth in a format similar to the annual audited GAAP financial statement; and
(2) An attestation, executed by the chief financial officer and the chief executive
officer of the licensee, that the licensee is current with respect to all of its
obligations for payroll, payroll -related taxes, workers' compensation
insurance, and employee benefits. If any of the obligations listed in this
subdivision are in dispute with a c lient and the disputed amount is material
when considered in the context of the licensee's most recent audited financial
statement, then the licensee shall disclose the nature of the dispute causing the
obligations to be unpaid and the amount of money in c ontroversy.attestation
in the form required by subdivision (4) of subsection (d) of this section."
SECTION 4.(g) G.S. 58-89A-75 reads as rewritten:
"§ 58-89A-75. De minimis registration.
(a) A person who seeks to offer limited professional employer services in this State shall
be eligible for de minimis registration status upon compliance with this section and may operate
as a de minimis registrant in this State upon notification pursuant to this section. A person shall
satisfy the requirements for a de m inimis registration only if the professional employer
organization:
(1) Does not maintain a physical professional employer organization office
located in this State;
(2) Is not domiciled in this State;
(2)(3) Does not employ salespersons who reside or direct their sales activities in this
State;
(3)(4) Does not employ directly or in common control with another person, as
defined in G.S. 58-89A-5(12), more than 50 assigned employees in this State;
(4)(5) Does not advertise through any media outlet physic ally located in this
State;State, provided, however, that this subdivision shall not prohibit a person
from advertising through publications, trade journals, directories, radio,

House Bill 737 Session Law 2025-45 Page 15
television, or the internet if such advertising is not expressly directed towa rd
employers in this State.
(5)(6) Is a licensed or registered professional employer organization in at least one
other state of the United States; and
(6)(7) Is operated by and under the control of persons of good moral character.
A professional employer organization operating under a de minimis registration shall be subject
to all of the responsibilities and authority of a licensee under this Article except for
G.S. 58-89A-50, 58-89A-60 and 58-89A-70(c), (d), and (e).
…."
SECTION 4.(h) This section is ef fective when it becomes law and applies to
applications for license issuance or renewal submitted on or after that date.

PART V. INSURANCE GUARANTY ASSOCIATION ACT REVISIONS
SECTION 5.(a) G.S. 58-48-10 reads as rewritten:
"§ 58-48-10. Scope.
This Article shall apply to all kinds of direct insurance, but shall not be applicable to:
…
(5) Insurance Other than coverages that may be set forth in a cybersecurity
insurance policy, insurance of warranties or service contracts;
…."
SECTION 5.(b) G.S. 58-48-20 reads as rewritten:
"§ 58-48-20. Definitions.
As used in this Article:
…
(4) Covered claim. – An unpaid claim, including one of unearned premiums,
which is in excess of fifty dollars ($50.00) and arises out of and is within the
coverage and not in ex cess of the applicable limits of an insurance policy to
which this Article applies as issued by an insurer, if that insurer if the policy
was issued by an insurer that becomes an insolvent insurer after the effective
date of this Article and (i) the claimant or insured is a resident of this State at
the time of the insured event; or (ii) the property from which the claim arises
is permanently located in this State. "Covered claim " includes claim
obligations that arose through the issuance of an insurance policy by a member
insurer, which are later allocated, transferred, merged into, novated, assumed
by, or otherwise made the sole responsibility of a member or nonmember
insurer if (i) the original member insurer has no remaining obligations on the
policy aft er the transfer, (ii) a final order of liquidation with a finding of
insolvency has been entered against the insurer that assumed the member 's
coverage obligations by a court of competent jurisdiction in the insurer's state
of domicile, (iii) the claim would have been a covered claim, as defined in this
subdivision, if the claim had remained the responsibility of the original
member insurer and the order of liquidation had been entered against the
original member insurer, with the same claim submission date and liquidation
date, and (iv) in cases where the member's coverage obligations were assumed
by a nonmember insurer, the transaction received prior regulatory or judicial
approval. "Covered claim" shall not include any amount awarded (i) as
punitive or exemplary damages; (ii) sought as a return of premium under any
retrospective rating plan; or (iii) due any reinsurer, insurer, insurance pool, or
underwriting association, as subrogation or contribution recoveries or
otherwise. "Covered claim" also shall not include fines or penalties, including
attorneys' fees, imposed against an insolvent insurer or its insured or claims

Page 16 Session Law 2025-45 House Bill 737
of any claimant whose net worth exceeds fifty million dollars ($50,000,000)
on December 31 of the year preceding the date the insurer becomes insolvent.
(4a) Cybersecurity insurance. – Includes first and third-party coverage, in a policy
or endorsement, written on a direct, admitted basis by a member insurer for
losses and loss mitigation arising out of or relating to data privacy breach es,
unauthorized information network security intrusions, computer viruses,
ransomware, cyber extortion, identity theft, and similar exposures.
…."
SECTION 5.(c) G.S. 58-48-35 reads as rewritten:
"§ 58-48-35. Powers and duties of the Association.
(a) The Association shall:
(1) Be obligated to the extent of the covered claims existing prior to the
determination of insolvency and arising within 30 days after the determination
of insolvency, or before the policy expiration date if less than 30 days after
the determination, or before the insured replaces the policy or causes its
cancellation, if he does so within 30 days of the determination. This obligation
includes only the amount of each covered claim that is in excess of fifty dollars
($50.00) and is less than five hundred thousand dollars ($500,000). However,
the Association shall pay the full amount of a covered claim for benefits under
a workers' compensation insurance coverage, and shall pay an amount not
exceeding ten thousand dollars ($10,000) per pol icy for a covered claim for
the return of unearned premium. In no event shall the Association be obligated
to pay an amount in excess of five hundred thousand dollars ($500,000) for
all first and third -party claims under a policy or endorsement providing, or
that is found to provide, cybersecurity insurance coverage and arising out of
or related to a single insured event, regardless of the number of claims made
or the number of claimants . The Association has no obligation to pay a
claimant's covered claim, except a claimant's workers' compensation claim, if:
…
(4) Investigate claims brought against the Association and adjust, compromise,
settle, and pay covered claims to the extent of the Association's obligation and
deny all other claims and may review settlements, releases and judgments to
which the insolvent insurer or its insureds were parties to determine the extent
to which such settlements, releases and judgments may be properly
contested.claims. This requirement is subject to the following provisions:
a. When investigating, adjusting, compromising, or settling claims, the
Association may appoint, substitute, and direct legal counsel for the
defense of covered claims and appoint and direct other service
providers for covered services.
b. The Association may pay in any order that it deems reasonable,
including the payment of claims as they are received from the
claimants or in groups or categories of claims.
…
(8) Have the right to r eview and contest settlements, releases, compromises,
waivers, and judgments to which the insolvent insurer or its insureds were
parties prior to the entry of the order of liquidation. This right is subject to the
following provisions:
a. In addition to any defenses available to the insurer, t he Association
may assert any statutory defenses or rights of offset against any
settlement, release, compromise, or waiver executed by an insured or
the insurer or any judgment taken against the insured or the insurer.

House Bill 737 Session Law 2025-45 Page 17
b. The Association is not bound by a settlement, release, compromise, or
waiver executed by an insured or the insurer or any judgment entered
against an insured or the insurer by consent or through a failure to
exhaust all appeals if the settlement, release, compromise, waiver , or
judgment was:
1. Executed or entered within 120 days prior to the entry of an
order of liquidation, and the insured or the insurer did not use
reasonable care in entering into the settlement, release,
compromise, waiver , or judgment, or did not pursue all
reasonable appeals of an adverse judgment; or
2. Executed by or taken against an insured or the insurer based on
default, fraud, collusion, or the insurer's failure to defend.
c. If a court of competent jurisdiction finds that the Association is not
bound by a settlement, release, compromise, waiver, or judgment for
any of the reasons described in sub-subdivision b. of this subdivision,
the settlement, release, compromise, waiver , or judgment shall be set
aside, and the Association shall be permitted to defend any covered
claim on the merits. The settlement, release, compromise, waiver , or
judgment may not be considered as evidence of liability or damages in
connection with any claim brought against the Association or any
other party under this Article.
d. Any covered claims arising from any judgment under any decision,
verdict, or finding based on the default of the insolvent insurer or its
failure to defend an insured shall, upon application and notice by the
Association, be vacated and set aside by the same court in which such
judgment, order, decision, verdict, or finding is entered , and the
Association either on its own behalf or on behalf of any insured or an
insolvent insurer shall be permitted to defend against such claim on
the merits. Any party who has obtained any such judgm ent or order
shall have the right, upon application and notice, to have the judgment
or order restored if within 90 days following the entry of the judgment
or order the Association has not notified such party and the court that
it intends to defend the matter on the merits.
…."
SECTION 5.(d) G.S. 58-48-50 reads as rewritten:
"§ 58-48-50. Effect of paid claims.
…
(a1) The Association shall have the right to recover from the following persons the amount
of any "covered claim" paid and any and all expenses incurred, including attorneys' fees and costs
of defense, in connection with any claim against the person or the person's affiliate pursuant to
this Article:
(1) Any insured whose net worth on December 31 of the year next preceding the
date the insurer becomes insolvent exceeds fifty million dollars ($50,000,000)
and whose liability obligations to other persons are satisfied in whole or in
part by payments under this Article; Article, provided that an insured 's net
worth on that date shall be deemed to include the aggregate net worth of the
insured and all of its subsidiaries and affiliates as calculated on a consolidated
basis; or
…."
SECTION 5.(e) G.S. 58-48-85 reads as rewritten:
"§ 58-48-85. Stay of proceedings; reopening of default judgments.proceedings.

Page 18 Session Law 2025-45 House Bill 737
All proceedings in which the insolvent insurer is a party or is obligated to defend a party in
any court or before any administrative agency or the North Carolina Industrial Commission shall
be stayed automatically for 120 days and such additional time thereafter as may be determined
by the court from the date the insolvency is determined or any ancillary proceedings are initiated
in this State, whichever is later, to permit proper defense by the Association of all pending causes
of action. Any party to any proceeding which is stayed pursuant to this section shall have the
right, upon application and notice, to seek a vacation or modification of such stay. Any covered
claims arising from any judgment under any decision, verdict or finding based on the default of
the insolvent insurer or its failure to defend an insured, shall, upon application and notice by the
Association be vacated and set aside by the same court in which such judgment, order, decision,
verdict, or finding is entered and the Association either on its own behalf or on behalf of any
insured or an insolvent insurer, shall be permitted to defend against such claim on the merits.
Any party who has obtained any such judgment or order shall have t he right, upon application
and notice, to have the judgment or order restored if within 90 days following the entry of the
judgment or order the Association has not notified such party and the court that it intends to
defend the matter on the merits."
SECTION 5.(f) This section is effective when it becomes law.

PART VI. CLARIFY PER MITTED TRADE PRACTIC ES WITH RESPECT TO
INSURANCE REBATES
SECTION 6.(a) G.S. 58-63-15(8)b.4. and G.S. 58-63-16 are repealed.
SECTION 6.(b) G.S. 58-63-15 reads as rewritten:
"§ 58-63-15. Unfair methods of competition and unfair or deceptive acts or practices
defined.
The following are hereby defined as unfair methods of competition and unfair and deceptive
acts or practices in the business of insurance:
…
(8) Rebates. –
…
b. Nothing in subdivision (7) or paragraph a sub-subdivision a. of
subdivision (8) of this section shall be construed as including within
the definition of discrimination or rebates any of the following
practices:
…
5. Engaging in an arrangement that would not violate section 106
of the Bank Holding Company Act Amendments of 1972 (12
U.S.C. § 1972), as interpreted by the Board of Governors of
the Federal Reserve System , or section 5(q) of the Home
Owners' Loan Act, 12 U.S.C. § 1464(q).
6. The offer or provision by insurers or producers, by or through
employees, affiliates , or third -party representatives, of
value-added products or services at no or reduced cost when
such products or services are not specif ied in the policy of
insurance if all of the following criteria are met:
I. Relates to the insurance coverag e and is primarily
designed to satisfy one or more of the following:
A. Providing loss mitigation or loss control.
B. Reducing claim costs or claim settlement costs.
C. Providing education about liability risks or risk
of loss to persons or property.

House Bill 737 Session Law 2025-45 Page 19
D. Monitoring or assess ing risk, identify ing
sources of risk, or develop ing strategies for
eliminating or reducing risk.
E. Enhancing health.
F. Enhancing financial wellness through items
such as education or financial planning
services.
G. Providing post-loss services.
H. Incentivizing behavioral changes to improve
the health or reduce the risk of death or
disability of a customer. For purposes of this
sub-sub-sub-sub-subdivision, "customer"
means a policyholder, potential policyholder,
certificate holder, potential certificate holder,
insured, potential insured, or applicant.
I. Assisting in the administration of the employee
or retiree benefit insurance coverage.
II. If the insurer or producer is providing the product or
service offered, the insurer or producer must ensure
that the customer is provided with contact information
to assist t he customer with questions regarding the
product or service.
III. The availability of the value -added product or service
must be based on documented objective criteria and
offered in a manner that is not unfairly discriminatory.
The documented criteria must be maintained by the
insurer or producer and produced upon request by the
Department.
7. The offer or provision of products or services that otherwise
meet the criteria of sub-sub-subdivision 6 . of this
sub-subdivision, where the insurer or producer does not have
sufficient evidence to demonstrate but has a good -faith belief
that the pr oducts or service satisfies one or more of the
conditions listed in sub-sub-sub-sub-subdivisions A. through I.
of sub-sub-sub-subdivision I. of sub-sub-subdivision 6. of this
sub-subdivision. The products and services shall be offered or
provided in a manner that is not unfairly discriminatory as part
of a pilot or testing program for no more than one year. An
insurer or producer offering or providing products or services
pursuant to this sub-sub-subdivision must notify the
Department of the pilot or testing program prior to
implementation and may proceed with the program unless the
Department objects within 21 days of notice.
8. The offer or gifting by an insurer or producer of noncash gifts,
items, or services, including meals to or charitable donations
on behalf of a customer, if all of the following criteria are met:
I. The noncash gifts, items, or services are made to, or on
behalf of, customers, including commercial or
institutional customers, in connection with the
marketing, sale, purchase, or retention of contracts of
insurance.

Page 20 Session Law 2025-45 House Bill 737
II. The cost of the noncash gifts, items, or services does
not exceed two hundred fifty dollars ($250.00) per
policy term.
III. The offer or gift is made in a manner that is not unfairly
discriminatory.
IV. The customer is not re quired to purchase, continue to
purchase, or renew a policy in exchange for the offer or
gift.
9. The conducting of drawings or raffles by an insurer or
producer, to the extent they are otherwise permitted by law, if
all of the following criteria are met:
I. There is no financial cost to entrants to participate in
the drawing or raffle.
II. The drawing or raffle does not obligate participants to
purchase insurance.
III. The prizes of the drawing or raffle are not valued in
excess of two hundred fifty dollars ($250.00).
IV. The drawing or raffle is open to the public and
conducted in a manner that is not unfairly
discriminatory.
V. The customer is not required to purchase, continue to
purchase, or renew a policy in exchange for
participation in the drawing or raffle.
c. No insurer or employee thereof, and no insurance producer shal l pay,
allow, or give, or offer to pay, allow, or give, directly or indirectly, as
an inducement to insurance, or after insurance has been effected, any
rebate, discount, abatement, credit or reduction of the premium named
in a policy of insurance, or any special favor or advantage in the
dividends or other benefits to accrue thereon, or any valuable
consideration or inducement whatever, not specified in the policy of
insurance. Nothing herein contained shall be construed as prohibiting
prohibiting: (i) the payment of commissions or other compensation to
regularly appointed and licensed insurance producers duly licensed by
this State; nor as prohibiting State, (ii) any participating insurer from
distributing to its policyholders dividends, savings or the unused or
unabsorbed portion of premiums and premium deposits.deposits, or
(iii) the trade practices permitted by sub-subdivision b. of this
subdivision.
d. An insurer, producer , or representative of either may not offer or
provide insurance as an inducement to the purchase of another policy
or otherwise use the words "free," "no cost," or words of similar import
about the policy sale or purchase, in an advertisement. The prohibition
on the use of the words "free" and "no cost" in this sub -subdivision
does not apply to products or services described in
sub-sub-subdivision 6., 7., 8., or 9. of sub-subdivision b. of subdivision
(8) of this section or in G.S. 58-63-16(a).
…."
SECTION 6.(c) G.S. 58-33-85 reads as rewritten:
"§ 58-33-85. Rebates and charges in excess of premium prohibited; exceptions.
(a) No insurer, insurance producer, or limited representative shall knowingly charge,
demand or receive a pre mium for any policy of insurance except in accordance with the

House Bill 737 Session Law 2025-45 Page 21
applicable filing approved by the Commissioner. No insurer, insurance producer, or limited
representative shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as
an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement,
credit, or reduction of the premium named in a policy of insurance, or any special favor or
advantage in the dividends or other benefits to accrue thereon, o r any valuable consideration or
inducement whatever, not specified in the policy of insurance. No insured named in a policy of
insurance, nor any employee of such insured, shall knowingly receive or accept, directly or
indirectly, any such rebate, discount, abatement or reduction of premium, or any special favor or
advantage or valuable consideration or inducement. Nothing herein contained shall be construed
as prohibiting (i) the payment of commissions or other compensation to duly licensed insurance
producers and limited representatives, (ii) any participating insurer from distributing to its
policyholders dividends, savings or the unused or unabsorbed portion of premiums and premium
deposits, or (iii) the trade practices permitted by G.S. 58-63-16. sub-subdivision b. of subdivision
(8) of G.S. 58-63-15. As used in this section the word "insurance" includes suretyship and the
word "policy" includes bond.
…."
SECTION 6.(d) Section 6(b) of this act is effective January 1, 2027, and applies to
trade practices related to insurance contracts issued, renewed, or amended on or after that date.
The remainder of this section is effective when it becomes law and applies to trade practices
related to insurance contracts issued, renewed, or amended on or after that date.

PART VII. CLARIFY LA WS RELATING TO THE E XCHANGE OF BUSINESS
BETWEEN INSURANCE PRODUCERS
SECTION 7.(a) G.S. 58-33-10 reads as rewritten:
"§ 58-33-10. Definitions.
As used in this Article, the following definitions apply:
…
(4a) "Exchange business," "exchange of business," or "proper exchange of
business" means the forwarding of insurance business from one producer duly
licensed for the line of insurance being forwarded to another producer duly
licensed for that line of insurance where both producers are duly appointed as
required by this Article.
(4a)(4b) "FINRA" means the Financial Industry Regulatory Authority or any
successor entity.
…."
SECTION 7.(b) G.S. 58-33-82 reads as rewritten:
"§ 58-33-82. Commissions.
…
(e) Commissions, fees, or other valuable consideration for the sale, solicitation, or
negotiation of insurance may be assigned or directed to be paid in the following circumstances:
…
(4) To an agency principal who is an owner, shareholder, member, partner,
director, employee, or agent of that agency for business placed by a producer
on behalf of that agency who is duly licensed and appointed as required by
this Article.
(5) In connection with the exchange of business where both producers are duly
licensed and appointed as required by this Article and have complied with all
of the requirements of G.S. 58-33-82.1.
…."
SECTION 7.(c) Article 33 of Chapter 58 of the General Statutes is amended by
adding a new section to read:

Page 22 Session Law 2025-45 House Bill 737
"§ 58-33-82.1. Exchange of business.
(a) Producers may exchange business, and split the commission involved with that
business, if the producer forwarding the business and the producer receiving the business both:
(1) Are licensed in all lines of insurance involved in the exchange and appointed
as required by this Article.
(2) Sign or include their National Producer Numbers on the insurer's insurance
application and provide written or electronic notice to the insurer and
consumer of the business exchange.
(3) Have a good -faith belief that the exchange of business complies with the
requirements of this Article.
(b) This section does not limit:
(1) The exchange of business in connection with specialty lines or nonstandard
and professional liability business that is either:
a. Placed through a surplus lines producer; or
b. Written at an excess rate or on an individually rated and risked basis.
(2) The exchange of business in connection with risk sharing plans."
SECTION 7.(d) This section is effective when it becomes law and applies to
contracts entered into or renewed on or after that date.

PART VIII. INEXPERIENCED OPERATOR CONTINUOUS COVERAGE
SECTION 8.(a) G.S. 20-16 reads as rewritten:
"§ 20-16. Authority of Division to suspend license.
(a) The Division shall have authority to suspend the license of any operator with or
without a preliminary hearing upon a showing by its records or other satisfactory evidence that
the licensee:
…
(6a) Has violated G.S. 20-309(a3);
…."
SECTION 8.(b) G.S. 20-309 reads as rewritten:
"§ 20 -309. Financial responsibility prerequisite to registration; must be maintained
throughout registration period.
…
(a3) No person subject to an inexperienced operator premium surcharge pursuant to
G.S. 58-36-65(k) shall operate a motor vehicle unless the liability insurance policy benefiting
that person includes any required premium surcharge. This subsection shall not apply to persons
who demonstrate financial responsibility in an authorized manner other than a liability insurance
policy.
…."
SECTION 8.(c) G.S. 20-309.2 reads as rewritten:
"§ 20-309.2. Insurer shall notify Division of actions on insurance policies.
(a) Notice Required. – An insurer shall notify the Division upon any of the following
with regard to a motor vehicle liability policy:
…
(4) A person subject to an inexperienced operator premium surcharge pursuant to
G.S. 58-36-65(k) is added to or removed from the policy 's coverage, or if a
policy to which a person subject to the inexperienced operator surcharge
pursuant to G.S. 58-36-65(k) was added has been canceled.
(a1) Division Records. – The Division shall ensure that its records accurately reflect the
insurance coverage statu s of of: (i) each owner of a motor vehicle registered or required to be
registered in this State and (ii) persons subject to an inexperienced operator premium surcharge
pursuant to G.S. 58-36-65 by reconciling all notices received under this section pertaining to that

House Bill 737 Session Law 2025-45 Page 23
individual or motor vehicle owner. A termination notice received under subdivision (2) of
subsection (a) of this section shall not be recorded as a lapse in financial responsibility or initiate
action by the Division under G.S. 20-311 if an earlier notice received by the Division under this
section establishes that the owner of the motor vehicle has met the duty to have continuous
financial responsibility for the vehicle, as required under G.S. 20-309, through a motor vehicle
liability policy that is not the subject of the later termination notice.
…."
SECTION 8.(d) This section becomes effective July 1, 2026.

PART X. RESTRICTIONS ON RESIDENTIAL LEAS ES REQUIRING RENTERS
INSURANCE
SECTION 10. G.S. 42-46 reads as rewritten:
"§ 42-46. Authorized fees, costs, and expenses.
…
(l) The followin g provisions apply to any lease that requires a tenant to maintain
insurance coverage for the leased premises:
(1) The tenant shall not be required to obtain the required insurance coverage
from a designated carrier or through a designated agent.
(2) The landlord may charge the tenant for the actual cost incurred by the landlord
to obtain the required insurance coverage and an administrative fee not to
exceed fifty dollars ($50.00) per year, only if the tenant fails to provide, within
three business days after the request of the landlord, proof that the tenant has
obtained the required insurance coverage."

PART XI. TECHNICAL C HANGE TO EFFECTIVE D ATE PROVISION IN S.L .
2023-133, AS AMENDED BY S.L. 2024-29
SECTION 11. Section 16(j) of S.L. 2023 -133, as amended by Section 9(b) of S.L.
2024-29, reads as rewritten:
"SECTION 16.(j) This section becomes effective July 1, 2025. Section 16(e) of this act
becomes effective July 1, 2025, and applies to convictions occurring on or after that date. Section
16(h) of this act becomes effective July 1, 2025, and applies to prior convictions for a "violation
of speeding 10 miles per hour or less over the speed limit " and prayers for judgment continued
occurring on or after that date.date; provided, however, that, for the purpose of determining
whether there shall be a premium surcharge or assignment of points under the subclassification
plan, convictions for a "violation of speeding 10 miles per hour or less over the speed limit " or
prayers for judgment continued occurring before July 1, 2025, must occur within the three years
immediately preceding the date of application or the preparation of the renewal."

PART XII. AUTHORIZE SALESMEN TO REGISTER WITH MULTIPLE DEALE RS
UNDER COMMON OWNERSHIP OR CONTROL
SECTION 12.(a) G.S. 78A-36(b) reads as rewritten:
"(b) It is unlawful for any dealer to employ a salesman unless the salesma n is registered.
The registration of a salesman is not effective during any period when he is not associated with
a particular dealer registered under this Chapter. When a salesman begins or terminates those
activities which make him a salesman, the salesm an as well as the dealer shall promptly notify
the Administrator.
The Administrator may by rule or order require the return of a salesman's license upon the
termination of those activities which make him a salesman or, if such return is impossible, require
a bond or evidence satisfactory to the Administrator of such impossibility. No salesman may be
registered with more than one dealer.dealer unless each of the dealers that employs or associates

Page 24 Session Law 2025-45 House Bill 737
with the salesman is under common ownership or control, or the registration is otherwise allowed
by a rule or order of the Administrator."
SECTION 12.(b) This section becomes effective October 1, 2025.

PART XIII. CANCELLATION OF POLICY UPON CHARGEBACK OF CREDIT CARD
PREMIUM PAYMENT
SECTION 13. G.S. 58-41-15(a) reads as rewritten:
"§ 58-41-15. Certain policy cancellations prohibited.
(a) No insurance policy or renewal thereof may be cancelled by the insurer prior to the
expiration of the term or anniversary date stated in the policy and without the prior written
consent of the insured, except for any one of the following reasons:
(1) Nonpayment of premium in accordance with the policy terms;
…
(b) Any Except as otherwise provided in subsection (b1) of this section, cancellation
permitted by subsection (a) of this section is not effective unless written notice of cancellation
has been delivered or mailed to the insured, not less than 15 days before the proposed effective
date of cancellation. The notice must be given or mailed to the insured, and any designated
mortgagee or loss payee at their addresses shown in the policy or, if n ot indicated in the policy,
at their last known addresses. The notice must state the precise reason for cancellation. Failure
to send this notice to any designated mortgagee or loss payee invalidates the cancellation only as
to the mortgagee's or loss payee's interest.
(b1) The chargeback of a premium payment made by credit card shall be deemed to be a
nonpayment of premium for purposes of this section. In the event of a chargeback of a premium
payment made by credit card, any cancellation permitted by sub section (a) shall be effective
retroactively to the date the premium payment was made by credit card.
…."

House Bill 737 Session Law 2025-45 Page 25
PART XIV. EFFECTIVE DATE
SECTION 14. Except as otherwise provided, this act is effective when it becomes
law.
In the General Assembly read three times and ratified this the 25th day of June, 2025.

s/ Rachel Hunt
President of the Senate

s/ Destin Hall
Speaker of the House of Representatives

s/ Josh Stein
Governor

Approved 10:19 a.m. this 1st day of July, 2025