Module 8 - NC General Statutes & Regulations Questions with Complete Answers, A+

Purpose of Regulating the Insurance Industry - The purpose of the North Carolina's regulation of the insurance industry is to promote the welfare of the general public and protect its interests in the ability to purchase coverage for insurable risks. The North Carolina Department of Insurance (NCDOI) was created by the state legislature to administer and carry out the laws and statutes regarding insurance. Alien company - A company incorporated or organized under the laws of any jurisdiction outside of the United States. Commissioner - The Commissioner of Insurance of North Carolina or an authorized designee of the Commissioner. Company or insurance company or insurer - Includes any corporation, association, partnership, society, order, individual or aggregation of individuals engaging or proposing or attempting to engage as principals in any kind of insurance business, including the exchanging of reciprocal contracts between individuals, partnerships and corporations. Department - Means the Department of Insurance of North Carolina. Domestic company - A company incorporated or organized under the laws of this State. Foreign company - A company incorporated or organized under the laws of the United States or of any jurisdiction within the United States other than this State. NAIC - The National Association of Insurance Commissioners. Person - An individual, partnership, firm, association, corporation, joint-stock company, trust, any similar entity or any combination of the foregoing acting in concert. The singular form includes the plural and the masculine form includes the feminine wherever appropriate. 58-1-10 Contract of Insurance - An insurance contract is a legal agreement in which the insurer is obligated to pay money, its equivalent or perform some act of value for the insured as indemnity or reimbursement for either the destruction or loss of property or the injury or death of a person in whom the insured has an insurable interest. 58-2-5 Election of Commissioner - The North Carolina Commissioner of Insurance, referred to in the text as the Commissioner, is elected to a 4 year term during each general election. There is no limit on the number of terms the Commissioner may seek office. If the Commissioner cannot fulfill the duties of the office, the North Carolina governor will appoint a replacement until the next election. 58-2-40 Powers & Duties of the Commissioner - The Commissioner has broad duties as the chief executive officer of the insurance department. These duties include acting as chief administrator of the NCDOI, reporting to the governor and legislature on the activities of the NCDOI, and performing any functions as described by law. The Commissioner is empowered to investigate and conduct hearings on any insurance matter in the state including conducting an oral examination and investigation of persons suspected to be involved in unfair competition or deceptive practices. If violations are suspected, the Commissioner will provide a time and place to hold hearings, administer oaths, examine records and provide such information to the person suspected of a violation. After conducting a hearing and deciding that a violation has occurred, the Commissioner may issue a Cease and Desist order to the person who committed the violation. The Commissioner may also order the arrest of persons in criminal violation of insurance laws of North Carolina and will seek prosecution through the state Attorney General. **NOTE** - The NCDOI must examine the records of each Domestic Insurer at least once every 5 years. 58-2-50 Examinations, hearings, and investigations - All examinations, hearings, and investigations may be conducted by the Commissioner personally or by one or more deputies, investigators, actuaries, examiners or employees designated for the purpose. If the Commissioner or any investigator appointed to conduct the investigations is of the opinion that there is evidence to charge any person or persons with a criminal violation of any provision of the Insurance Code, the Commissioner may arrest with warrant or cause the person or persons to be arrested.