(a) As used in thissection, "Commissioner" means the Commissioner of Insurance of theState of North Carolina.
(b) Owners andoperators of underground storage tanks may demonstrate financial responsibilityby establishing insurance pools which provide insurance coverage to poolmembers in at least the minimum amounts specified in G.S. 143‑215.94H.Each such pool shall be operated by a board of trustees consisting of at leastfive persons who are elected or appointed officials of pool members. The boardof trustees of each pool shall:
(1) Establish terms andconditions of coverage within the pool, including underwriting criteria,applicable deductible levels, the maximum level of claims that the pool willself‑insure, and exclusions of coverage;
(2) Ensure that allvalid claims are paid promptly;
(3) Take all necessaryprecautions to safeguard the assets of the pool;
(4) Maintain minutes ofits meetings and make those minutes available to the Commissioner;
(5) Designate anadministrator to carry out the policies established by the board of trusteesand to provide continual management of the pool, and delineate in writtenminutes of its meetings the areas of authority it delegates to the pool'sadministrator;
(6) Establish the amountof insurance to be purchased by the pool to provide coverage over and above theclaims that are not to be satisfied directly from the pool's resources;
(7) Establish theamount, if any, of aggregate excess insurance coverage to be purchased andmaintained in the event that the pool's resources are exhausted in a givenfiscal period; and
(8) Establish guidelinesfor membership in the pool, including the amount of money to be collected fromeach pool member to form and fund the pool.
(c) The board oftrustees may not:
(1) Extend credit toindividual members for payment of a premium, except pursuant to payment plansapproved by the Commissioner; or
(2) Borrow any moniesfrom the pool or in the name of the pool, except in the ordinary course ofbusiness, without first advising the Commissioner of the nature and purpose ofthe loan and obtaining prior approval from the Commissioner.
(d) A contract oragreement made pursuant to this section must contain provisions:
(1) For a system orprogram of loss control;
(2) For termination ofmembership including both:
a. Cancellation ofindividual membership in the pool by the pool; and
b. Election by anindividual member of the pool to terminate its participation;
(3) That a pool or aterminating member must provide at least 90 days' written notice ofcancellation or termination;
(4) Requiring the poolto pay all claims for which each member incurs liability during each member'speriod of membership, except:
a. Where a member hasindividually retained the risk;
b. Where the risk isnot covered; or
c. For amounts ofclaims above the coverage provided by the pool;
(5) For the maintenanceof claim reserves equal to known incurred losses and loss adjustment expensesand to an estimate of incurred but not reported losses;
(6) For compliance withany applicable federal requirements regarding financial responsibility forunderground storage tanks;
(7) For a finalaccounting and settlement of the obligations of or refunds to a terminatingmember to occur when all incurred claims are concluded, settled, or paid;
(8) That the pool mayestablish offices where necessary in this State and employ necessary staff tocarry out the purposes of the pool;
(9) That the pool mayretain legal counsel, actuaries, claims adjusters, auditors, engineers, privateconsultants, and advisors, and other persons as the board of trustees or theadministrator deems to be necessary;
(10) That the pool maymake and alter bylaws and rules pertaining to the exercise of its purpose and powers;
(11) That the pool maypurchase, lease, or rent real and personal property it deems to be necessary;and
(12) That the pool mayenter into financial services agreements with financial institutions and thatit may issue checks in its own name.
(e) In the event thateither the pool or an individual pool member gives notice of an intent tocancel or terminate participation in the pool as provided by subdivision (4) ofsubsection (d) of this section, the pool shall so notify both the Commissionerand the Secretary within five business days of the issuance or receipt of suchnotice by the pool. In addition, the pool shall notify both the Commissionerand the Secretary within five business days of the date such cancellation ortermination becomes effective, unless notice of cancellation or termination isrescinded.
(f) The formation andoperation of an insurance pool under this section shall be subject to approvalby the Commissioner who shall, after notice and hearing, establish reasonablerequirements and rules for the approval and monitoring of such pools, includingprior approval of pool administrators and provisions for periodic examinationsof financial condition. The Commissioner may disapprove an application for theformation of an insurance pool, and may suspend or withdraw such approvalwhenever he finds that such applicant or pool:
(1) Has refused tosubmit its books, papers, accounts, or affairs to the reasonable inspection ofthe Commissioner or his representative;
(2) Has refused, or itsofficers, agents, or administrators have refused, to furnish satisfactoryevidence of its financial and business standing or solvency;
(3) Is insolvent, or isin such condition that its further transaction of business in this State ishazardous to its members and creditors in this State and to the public;
(4) Has refused orneglected to pay a valid final judgment against it within 60 days after itsrendition;
(5) Has violated any lawof this State or has violated or exceeded the powers granted by its members;
(6) Has failed to payany taxes, fees, or charges imposed in this State within 60 days after they aredue and payable, or within 60 days after final disposition or any legal contestwith respect to liability therefor; or
(7) Has been foundinsolvent by a court of any other state, by the insurance regulator or otherproper officer or agency of any other state, and has been prohibited from doingbusiness in such state.
(g) Each pool shall beaudited annually at the expense of the pool by a certified public accountingfirm, with a copy of the report available to the governing body or chiefexecutive officer of each member of the pool and to the Commissioner. The boardof trustees of the pool shall obtain an appropriate actuarial evaluation of theloss and loss adjustment expense reserves of the pool, including an estimate oflosses and loss adjustment expenses incurred but not reported. The provisionsof G.S. 58‑2‑131, 58‑2‑132, 58‑2‑133, 58‑2‑134,58‑2‑150, 58‑2‑155, 58‑2‑165, 58‑2‑180,58‑2‑185, 58‑2‑190, 58‑2‑200, and 58‑6‑5apply to each pool and to persons that administer the pools. Annual financialstatements required by G.S. 58‑2‑165 shall be filed by each poolwithin 60 days after the end of the pool's fiscal year. All financialstatements required by this section shall be prepared in accordance withgenerally accepted statutory accounting principles.
(h) If, as a result ofthe annual audit or an examination by the Commissioner, it appears that theassets of a pool are insufficient to enable the pool to discharge its legalliabilities and other obligations, the Commissioner shall notify theadministrator and the board of trustees of the pool of the deficiency and hislist of recommendations to abate the deficiency, including a recommendation notto add any new members until the deficiency is abated. If the pool fails tocomply with the recommendations within 30 days after the date of the notice,the Commissioner may apply to the Superior Court of Wake County for an orderrequiring the pool to abate the deficiency and authorizing the Commissioner toappoint one or more special deputy commissioners, counsel, clerks, orassistants to oversee the implementation of the Court's order. The Commissionerhas all of the powers granted to him under Article 17A of General StatuteChapter 58 relating to rehabilitation and liquidation of insurers; and theprovisions of that Article apply to this section to the extent they are not inconflict with this section. The compensation and expenses of such persons shallbe fixed by the Commissioner, subject to the approval of the Court, and shallbe paid out of the funds or assets of the pool.
(i) Each pool contractshall provide that the members of the pool shall be assessed on a pro ratabasis as calculated by the amount of each member's average annual contributionin order to satisfy the amount of any deficiency where a pool is determined tobe insolvent, financially impaired, or is otherwise found to be unable todischarge its legal liabilities and other obligations.
(j) In the event thatthe Commissioner finds that a pool is insolvent, financially impaired, orotherwise, unable to discharge its legal liabilities or obligations, or if theCommissioner at any time has reason to believe that any owner or operator isunable to demonstrate financial responsibility as required by G.S. 143‑215.94Hand rules adopted by the Commission as a result of the financial condition ofthe pool or for any other reason, the Commissioner shall so notify theSecretary.
(k) The provisions ofArticle 48 of Chapter 58 do not apply to any risks retained by any pool.
(l) The Department ofInsurance, in consultation with the Petroleum Underground Storage Tank FundsCouncil and the Department of Environment and Natural Resources, shall provideguidance and technical assistance for the formation of an insurance poolpursuant to G.S. 143‑215.94I to any responsible entity that requestsassistance. (1987(Reg. Sess., 1988), c. 1035, s. 1; 1989, c. 652, s. 11; 1995, c. 193, s. 66;1999‑132, s. 11.11; 2008‑195, s. 10.)
(a) As used in thissection, "Commissioner" means the Commissioner of Insurance of theState of North Carolina.
(b) Owners andoperators of underground storage tanks may demonstrate financial responsibilityby establishing insurance pools which provide insurance coverage to poolmembers in at least the minimum amounts specified in G.S. 143‑215.94H.Each such pool shall be operated by a board of trustees consisting of at leastfive persons who are elected or appointed officials of pool members. The boardof trustees of each pool shall:
(1) Establish terms andconditions of coverage within the pool, including underwriting criteria,applicable deductible levels, the maximum level of claims that the pool willself‑insure, and exclusions of coverage;
(2) Ensure that allvalid claims are paid promptly;
(3) Take all necessaryprecautions to safeguard the assets of the pool;
(4) Maintain minutes ofits meetings and make those minutes available to the Commissioner;
(5) Designate anadministrator to carry out the policies established by the board of trusteesand to provide continual management of the pool, and delineate in writtenminutes of its meetings the areas of authority it delegates to the pool'sadministrator;
(6) Establish the amountof insurance to be purchased by the pool to provide coverage over and above theclaims that are not to be satisfied directly from the pool's resources;
(7) Establish theamount, if any, of aggregate excess insurance coverage to be purchased andmaintained in the event that the pool's resources are exhausted in a givenfiscal period; and
(8) Establish guidelinesfor membership in the pool, including the amount of money to be collected fromeach pool member to form and fund the pool.
(c) The board oftrustees may not:
(1) Extend credit toindividual members for payment of a premium, except pursuant to payment plansapproved by the Commissioner; or
(2) Borrow any moniesfrom the pool or in the name of the pool, except in the ordinary course ofbusiness, without first advising the Commissioner of the nature and purpose ofthe loan and obtaining prior approval from the Commissioner.
(d) A contract oragreement made pursuant to this section must contain provisions:
(1) For a system orprogram of loss control;
(2) For termination ofmembership including both:
a. Cancellation ofindividual membership in the pool by the pool; and
b. Election by anindividual member of the pool to terminate its participation;
(3) That a pool or aterminating member must provide at least 90 days' written notice ofcancellation or termination;
(4) Requiring the poolto pay all claims for which each member incurs liability during each member'speriod of membership, except:
a. Where a member hasindividually retained the risk;
b. Where the risk isnot covered; or
c. For amounts ofclaims above the coverage provided by the pool;
(5) For the maintenanceof claim reserves equal to known incurred losses and loss adjustment expensesand to an estimate of incurred but not reported losses;
(6) For compliance withany applicable federal requirements regarding financial responsibility forunderground storage tanks;
(7) For a finalaccounting and settlement of the obligations of or refunds to a terminatingmember to occur when all incurred claims are concluded, settled, or paid;
(8) That the pool mayestablish offices where necessary in this State and employ necessary staff tocarry out the purposes of the pool;
(9) That the pool mayretain legal counsel, actuaries, claims adjusters, auditors, engineers, privateconsultants, and advisors, and other persons as the board of trustees or theadministrator deems to be necessary;
(10) That the pool maymake and alter bylaws and rules pertaining to the exercise of its purpose and powers;
(11) That the pool maypurchase, lease, or rent real and personal property it deems to be necessary;and
(12) That the pool mayenter into financial services agreements with financial institutions and thatit may issue checks in its own name.
(e) In the event thateither the pool or an individual pool member gives notice of an intent tocancel or terminate participation in the pool as provided by subdivision (4) ofsubsection (d) of this section, the pool shall so notify both the Commissionerand the Secretary within five business days of the issuance or receipt of suchnotice by the pool. In addition, the pool shall notify both the Commissionerand the Secretary within five business days of the date such cancellation ortermination becomes effective, unless notice of cancellation or termination isrescinded.
(f) The formation andoperation of an insurance pool under this section shall be subject to approvalby the Commissioner who shall, after notice and hearing, establish reasonablerequirements and rules for the approval and monitoring of such pools, includingprior approval of pool administrators and provisions for periodic examinationsof financial condition. The Commissioner may disapprove an application for theformation of an insurance pool, and may suspend or withdraw such approvalwhenever he finds that such applicant or pool:
(1) Has refused tosubmit its books, papers, accounts, or affairs to the reasonable inspection ofthe Commissioner or his representative;
(2) Has refused, or itsofficers, agents, or administrators have refused, to furnish satisfactoryevidence of its financial and business standing or solvency;
(3) Is insolvent, or isin such condition that its further transaction of business in this State ishazardous to its members and creditors in this State and to the public;
(4) Has refused orneglected to pay a valid final judgment against it within 60 days after itsrendition;
(5) Has violated any lawof this State or has violated or exceeded the powers granted by its members;
(6) Has failed to payany taxes, fees, or charges imposed in this State within 60 days after they aredue and payable, or within 60 days after final disposition or any legal contestwith respect to liability therefor; or
(7) Has been foundinsolvent by a court of any other state, by the insurance regulator or otherproper officer or agency of any other state, and has been prohibited from doingbusiness in such state.
(g) Each pool shall beaudited annually at the expense of the pool by a certified public accountingfirm, with a copy of the report available to the governing body or chiefexecutive officer of each member of the pool and to the Commissioner. The boardof trustees of the pool shall obtain an appropriate actuarial evaluation of theloss and loss adjustment expense reserves of the pool, including an estimate oflosses and loss adjustment expenses incurred but not reported. The provisionsof G.S. 58‑2‑131, 58‑2‑132, 58‑2‑133, 58‑2‑134,58‑2‑150, 58‑2‑155, 58‑2‑165, 58‑2‑180,58‑2‑185, 58‑2‑190, 58‑2‑200, and 58‑6‑5apply to each pool and to persons that administer the pools. Annual financialstatements required by G.S. 58‑2‑165 shall be filed by each poolwithin 60 days after the end of the pool's fiscal year. All financialstatements required by this section shall be prepared in accordance withgenerally accepted statutory accounting principles.
(h) If, as a result ofthe annual audit or an examination by the Commissioner, it appears that theassets of a pool are insufficient to enable the pool to discharge its legalliabilities and other obligations, the Commissioner shall notify theadministrator and the board of trustees of the pool of the deficiency and hislist of recommendations to abate the deficiency, including a recommendation notto add any new members until the deficiency is abated. If the pool fails tocomply with the recommendations within 30 days after the date of the notice,the Commissioner may apply to the Superior Court of Wake County for an orderrequiring the pool to abate the deficiency and authorizing the Commissioner toappoint one or more special deputy commissioners, counsel, clerks, orassistants to oversee the implementation of the Court's order. The Commissionerhas all of the powers granted to him under Article 17A of General StatuteChapter 58 relating to rehabilitation and liquidation of insurers; and theprovisions of that Article apply to this section to the extent they are not inconflict with this section. The compensation and expenses of such persons shallbe fixed by the Commissioner, subject to the approval of the Court, and shallbe paid out of the funds or assets of the pool.
(i) Each pool contractshall provide that the members of the pool shall be assessed on a pro ratabasis as calculated by the amount of each member's average annual contributionin order to satisfy the amount of any deficiency where a pool is determined tobe insolvent, financially impaired, or is otherwise found to be unable todischarge its legal liabilities and other obligations.
(j) In the event thatthe Commissioner finds that a pool is insolvent, financially impaired, orotherwise, unable to discharge its legal liabilities or obligations, or if theCommissioner at any time has reason to believe that any owner or operator isunable to demonstrate financial responsibility as required by G.S. 143‑215.94Hand rules adopted by the Commission as a result of the financial condition ofthe pool or for any other reason, the Commissioner shall so notify theSecretary.
(k) The provisions ofArticle 48 of Chapter 58 do not apply to any risks retained by any pool.
(l) The Department ofInsurance, in consultation with the Petroleum Underground Storage Tank FundsCouncil and the Department of Environment and Natural Resources, shall provideguidance and technical assistance for the formation of an insurance poolpursuant to G.S. 143‑215.94I to any responsible entity that requestsassistance. (1987(Reg. Sess., 1988), c. 1035, s. 1; 1989, c. 652, s. 11; 1995, c. 193, s. 66;1999‑132, s. 11.11; 2008‑195, s. 10.)
(a) As used in thissection, "Commissioner" means the Commissioner of Insurance of theState of North Carolina.
(b) Owners andoperators of underground storage tanks may demonstrate financial responsibilityby establishing insurance pools which provide insurance coverage to poolmembers in at least the minimum amounts specified in G.S. 143‑215.94H.Each such pool shall be operated by a board of trustees consisting of at leastfive persons who are elected or appointed officials of pool members. The boardof trustees of each pool shall:
(1) Establish terms andconditions of coverage within the pool, including underwriting criteria,applicable deductible levels, the maximum level of claims that the pool willself‑insure, and exclusions of coverage;
(2) Ensure that allvalid claims are paid promptly;
(3) Take all necessaryprecautions to safeguard the assets of the pool;
(4) Maintain minutes ofits meetings and make those minutes available to the Commissioner;
(5) Designate anadministrator to carry out the policies established by the board of trusteesand to provide continual management of the pool, and delineate in writtenminutes of its meetings the areas of authority it delegates to the pool'sadministrator;
(6) Establish the amountof insurance to be purchased by the pool to provide coverage over and above theclaims that are not to be satisfied directly from the pool's resources;
(7) Establish theamount, if any, of aggregate excess insurance coverage to be purchased andmaintained in the event that the pool's resources are exhausted in a givenfiscal period; and
(8) Establish guidelinesfor membership in the pool, including the amount of money to be collected fromeach pool member to form and fund the pool.
(c) The board oftrustees may not:
(1) Extend credit toindividual members for payment of a premium, except pursuant to payment plansapproved by the Commissioner; or
(2) Borrow any moniesfrom the pool or in the name of the pool, except in the ordinary course ofbusiness, without first advising the Commissioner of the nature and purpose ofthe loan and obtaining prior approval from the Commissioner.
(d) A contract oragreement made pursuant to this section must contain provisions:
(1) For a system orprogram of loss control;
(2) For termination ofmembership including both:
a. Cancellation ofindividual membership in the pool by the pool; and
b. Election by anindividual member of the pool to terminate its participation;
(3) That a pool or aterminating member must provide at least 90 days' written notice ofcancellation or termination;
(4) Requiring the poolto pay all claims for which each member incurs liability during each member'speriod of membership, except:
a. Where a member hasindividually retained the risk;
b. Where the risk isnot covered; or
c. For amounts ofclaims above the coverage provided by the pool;
(5) For the maintenanceof claim reserves equal to known incurred losses and loss adjustment expensesand to an estimate of incurred but not reported losses;
(6) For compliance withany applicable federal requirements regarding financial responsibility forunderground storage tanks;
(7) For a finalaccounting and settlement of the obligations of or refunds to a terminatingmember to occur when all incurred claims are concluded, settled, or paid;
(8) That the pool mayestablish offices where necessary in this State and employ necessary staff tocarry out the purposes of the pool;
(9) That the pool mayretain legal counsel, actuaries, claims adjusters, auditors, engineers, privateconsultants, and advisors, and other persons as the board of trustees or theadministrator deems to be necessary;
(10) That the pool maymake and alter bylaws and rules pertaining to the exercise of its purpose and powers;
(11) That the pool maypurchase, lease, or rent real and personal property it deems to be necessary;and
(12) That the pool mayenter into financial services agreements with financial institutions and thatit may issue checks in its own name.
(e) In the event thateither the pool or an individual pool member gives notice of an intent tocancel or terminate participation in the pool as provided by subdivision (4) ofsubsection (d) of this section, the pool shall so notify both the Commissionerand the Secretary within five business days of the issuance or receipt of suchnotice by the pool. In addition, the pool shall notify both the Commissionerand the Secretary within five business days of the date such cancellation ortermination becomes effective, unless notice of cancellation or termination isrescinded.
(f) The formation andoperation of an insurance pool under this section shall be subject to approvalby the Commissioner who shall, after notice and hearing, establish reasonablerequirements and rules for the approval and monitoring of such pools, includingprior approval of pool administrators and provisions for periodic examinationsof financial condition. The Commissioner may disapprove an application for theformation of an insurance pool, and may suspend or withdraw such approvalwhenever he finds that such applicant or pool:
(1) Has refused tosubmit its books, papers, accounts, or affairs to the reasonable inspection ofthe Commissioner or his representative;
(2) Has refused, or itsofficers, agents, or administrators have refused, to furnish satisfactoryevidence of its financial and business standing or solvency;
(3) Is insolvent, or isin such condition that its further transaction of business in this State ishazardous to its members and creditors in this State and to the public;
(4) Has refused orneglected to pay a valid final judgment against it within 60 days after itsrendition;
(5) Has violated any lawof this State or has violated or exceeded the powers granted by its members;
(6) Has failed to payany taxes, fees, or charges imposed in this State within 60 days after they aredue and payable, or within 60 days after final disposition or any legal contestwith respect to liability therefor; or
(7) Has been foundinsolvent by a court of any other state, by the insurance regulator or otherproper officer or agency of any other state, and has been prohibited from doingbusiness in such state.
(g) Each pool shall beaudited annually at the expense of the pool by a certified public accountingfirm, with a copy of the report available to the governing body or chiefexecutive officer of each member of the pool and to the Commissioner. The boardof trustees of the pool shall obtain an appropriate actuarial evaluation of theloss and loss adjustment expense reserves of the pool, including an estimate oflosses and loss adjustment expenses incurred but not reported. The provisionsof G.S. 58‑2‑131, 58‑2‑132, 58‑2‑133, 58‑2‑134,58‑2‑150, 58‑2‑155, 58‑2‑165, 58‑2‑180,58‑2‑185, 58‑2‑190, 58‑2‑200, and 58‑6‑5apply to each pool and to persons that administer the pools. Annual financialstatements required by G.S. 58‑2‑165 shall be filed by each poolwithin 60 days after the end of the pool's fiscal year. All financialstatements required by this section shall be prepared in accordance withgenerally accepted statutory accounting principles.
(h) If, as a result ofthe annual audit or an examination by the Commissioner, it appears that theassets of a pool are insufficient to enable the pool to discharge its legalliabilities and other obligations, the Commissioner shall notify theadministrator and the board of trustees of the pool of the deficiency and hislist of recommendations to abate the deficiency, including a recommendation notto add any new members until the deficiency is abated. If the pool fails tocomply with the recommendations within 30 days after the date of the notice,the Commissioner may apply to the Superior Court of Wake County for an orderrequiring the pool to abate the deficiency and authorizing the Commissioner toappoint one or more special deputy commissioners, counsel, clerks, orassistants to oversee the implementation of the Court's order. The Commissionerhas all of the powers granted to him under Article 17A of General StatuteChapter 58 relating to rehabilitation and liquidation of insurers; and theprovisions of that Article apply to this section to the extent they are not inconflict with this section. The compensation and expenses of such persons shallbe fixed by the Commissioner, subject to the approval of the Court, and shallbe paid out of the funds or assets of the pool.
(i) Each pool contractshall provide that the members of the pool shall be assessed on a pro ratabasis as calculated by the amount of each member's average annual contributionin order to satisfy the amount of any deficiency where a pool is determined tobe insolvent, financially impaired, or is otherwise found to be unable todischarge its legal liabilities and other obligations.
(j) In the event thatthe Commissioner finds that a pool is insolvent, financially impaired, orotherwise, unable to discharge its legal liabilities or obligations, or if theCommissioner at any time has reason to believe that any owner or operator isunable to demonstrate financial responsibility as required by G.S. 143‑215.94Hand rules adopted by the Commission as a result of the financial condition ofthe pool or for any other reason, the Commissioner shall so notify theSecretary.
(k) The provisions ofArticle 48 of Chapter 58 do not apply to any risks retained by any pool.
(l) The Department ofInsurance, in consultation with the Petroleum Underground Storage Tank FundsCouncil and the Department of Environment and Natural Resources, shall provideguidance and technical assistance for the formation of an insurance poolpursuant to G.S. 143‑215.94I to any responsible entity that requestsassistance. (1987(Reg. Sess., 1988), c. 1035, s. 1; 1989, c. 652, s. 11; 1995, c. 193, s. 66;1999‑132, s. 11.11; 2008‑195, s. 10.)
