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SB 272

An Act amending the act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921, in casualty insurance, providing for infertility care coverage.

2025-2026 Regular Session Introduced by Amanda Cappelletti and 11 co-sponsors

Allows licensed insurance producers to exchange business and split commissions under defined safeguards, requiring disclosures to insurers and consumers.

Referred to Banking & Insurance
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Bill Summary · SB 272

SB 272 — Insurance Producers / Exchange of Business (North Carolina, 2025)

Status: Passed first reading (Mar 13, 2025). Sponsors: Senators Corbin and Johnson (primary). Referred to Rules and Operations of the Senate.

Purpose

To clarify and authorize the “exchange of business” between insurance producers (agents/brokers) and to spell out when commissions may be split or assigned in such exchanges. The bill codifies a definition of exchange of business and establishes conditions under which forwarding business and commission-sharing are permitted.

Key provisions

  • Definitions (amends G.S. 58‑33‑10)

    • Adds a definition of “exchange business” / “proper exchange of business”: forwarding insurance business from one duly licensed producer to another producer also duly licensed for the line, where both are appointed with an insurer able to write the risk under conditions favorable to the insured.
    • Adds/updates cross-references (e.g., FINRA).

  • Commission rules (amends G.S. 58‑33‑82)

    • Clarifies that commissions, fees, or other consideration may be assigned or directed to be paid in specified circumstances, including:
    • To an agency principal for business placed by a producer on behalf of that agency; and
    • In connection with an exchange of business where both producers are duly licensed, appropriately appointed, and comply with the new statutory requirements (see new section below).

  • New statutory section — Exchange of business (adds G.S. 58‑33‑82.1)

    • Permits producers to exchange business and split the commission if the producer forwarding the business and the receiving producer both:
    • Are licensed in all lines of insurance involved in the exchange;
    • Sign the insurer’s application or otherwise are disclosed to the insurer and the consumer; and
    • Have a good‑faith belief that the exchange complies with Article 33 requirements.
    • Carves out that this section does not limit exchanges among specialty lines, nonstandard/professional liability business placed through surplus lines producers, individually rated risks, or exchanges in connection with risk‑sharing plans.

Who is affected

  • Insurance producers/agents/brokers and agency principals (clarifies when commission splitting is permitted).
  • Insurers (will receive disclosures and signed applications when producers exchange business).
  • Consumers/insureds (greater disclosure requirement; protections depend on insurer/producer compliance).

Procedural / timeline notes

  • Effective date: the act is effective upon becoming law and applies to contracts entered into or renewed on or after that date.
  • Current legislative status: passed first reading (Mar 13, 2025); next steps depend on committee and floor action in the Senate.

Practical impact

  • Provides statutory clarity and an explicit legal basis for routine business‑for‑business referrals and commission splits when specified conditions are met.
  • Emphasizes licensing parity across lines and disclosure to insurers and consumers to promote transparency.
  • Preserves existing handling of specialty/surplus lines and risk‑sharing arrangements.

Compiled from official sources — confirm details with the bill’s official record.

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