§ 58‑42‑5. Purposes, contents, and operation of risk sharing plans.

(a) Each planpromulgated or prepared pursuant to G.S. 58‑42‑1 shall:

(1) Give considerationto:

a. The need foradequate and readily accessible coverage;

b. Optional methods ofimproving the market affected;

c. The inherentlimitations of the insurance mechanism;

d. The need forreasonable underwriting standards; and

e. The requirement ofreasonable loss prevention measures;

(2) Establish proceduresthat will create minimum interference with the voluntary market;

(3) Distribute theobligations imposed by the plan, and any profits or losses experienced by theplan, equitably and efficiently among the participating insurers; and

(4) Establish proceduresfor applicants and participants to have their grievances reviewed by animpartial body. The filing and processing of a grievance pursuant to thissubdivision does not stay the requirement for participation in a plan mandatedby G.S. 58‑42‑10.

(b) Each plan may, onbehalf of its participants:

(1) Issue policies ofinsurance to eligible applicants;

(2) Underwrite, adjust,and pay losses on insurance issued by the plan;

(3) Appoint a servicecompany or companies to perform the functions enumerated in this subsection;and

(4) Obtain reinsurancefor any part or all of its risks. (1986, Ex. Sess., c. 7, s. 1; 1999‑114, s. 1.)