§ 58-3-155. Business transacted with insurer-controlled brokers.
§58‑3‑155. Business transacted with insurer‑controlledbrokers.
(a) As used in thissection:
(1) "Broker"means a person who, being a licensed agent, obtains insurance for another partythrough a duly authorized agent of an insurer that is licensed to do businessin this State but for which the broker is not authorized to act as agent.
(2) "Control"or "controlled" means the direct or indirect possession of the powerto direct or cause the direction of the management and policies of a person,whether through the ownership of voting securities, by contract other than acommercial contract for goods or nonmanagement services, or otherwise, unlessthe power is the result of an official position with or a corporate office heldby the person. Control is presumed to exist if any person directly orindirectly owns, controls, holds with the power to vote, or holds proxiesrepresenting ten percent (10%) or more of the voting securities of any otherperson.
(b) The Commissionermay determine, after furnishing all persons in interest notice and opportunityto be heard and making specific findings of fact to support that determination,that control exists in fact, notwithstanding the absence of a presumption tothat effect. The Commissioner may determine upon application that any persondoes not or will not upon the taking of some proposed action control anotherperson. The Commissioner may prospectively revoke or modify that determination,after notice and opportunity to be heard whenever in the Commissioner's judgmentrevocation or modification is consistent with this section.
(c) No licensedproperty or casualty insurer that has control of a broker may accept insurancefrom the broker in any transaction in which the broker, when the insurance isplaced, is acting as such on behalf of the insured for any compensation,commission, or thing of value unless the broker, before the effective date ofthe coverage, delivers written notice to the prospective insured disclosing therelationship between the insurer and broker. The disclosure must be signed bythe insured and must be retained in the insurer's underwriting file until thecompletion and release of the examination report under G.S. 58‑2‑131through G.S. 58‑2‑134 for the period in which the coverage is ineffect. If the insurance is placed through a subbroker that is not a controlledbroker, the controlling insurer shall retain in its records a signed commitmentfrom the subbroker that the subbroker is aware of the relationship between theinsurer and the broker and that the subbroker has notified or will notify theinsured.
(d) This section doesnot affect the rights of policyholders, claimants, creditors, or other thirdparties. (1991, c. 681, s. 9; 1999‑132, s. 11.1.)