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HB 737

DOI Omnibus Bill.

2025-2026 Session Introduced by Jennifer Balkcom and 2 co-sponsors

HB 737 modernizes NC insurer licensing and mandates group capital and liquidity tests to preserve NAIC accreditation.

Signed by Gov. 7/1/2025
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Bill Summary · HB 737

Summary — HB 737 (DOI Omnibus Bill) — North Carolina (SL 2025-45)

Status: Enacted (Session Law 2025‑45). Ratified June 25, 2025; Signed by Governor July 1, 2025.
Introduced: April 2, 2025 (multiple prior drafts).

Main purpose and intent

HB 737 is an omnibus insurance bill enacted to (1) modernize and streamline producer licensure requirements, (2) clarify and tighten several insurance market practices, and (3) preserve the North Carolina Department of Insurance’s (DOI) National Association of Insurance Commissioners (NAIC) accreditation by adopting group capital and liquidity reporting requirements. The act contains numerous additional targeted changes affecting insurance companies, producers, guaranty associations, peer‑to‑peer vehicle sharing, renters insurance clauses, and related regulatory processes.

Key provisions (organized by major topic)

  • Licensing and education for producers

    • Removes statutory requirements for specific prelicensing training courses; replaces with a competence standard allowing the Commissioner to accept evidence of adequate education/training.
    • Retains a 20‑hour instruction requirement for certain producer license lines and a 10‑hour requirement for Medicare supplement/long‑term care applicants (as applicable).
    • Preserves interstate reciprocity: applicants previously licensed in another state for the same lines may be exempt from prelicensing education/exam under defined conditions.
    • Effective date for licensing-related provisions: October 1, 2025 (applies to applications filed on/after that date).

  • Referral fee cap

    • Clarifies that commissions/fees paid to unlicensed persons for referring personal lines business to licensed producers are capped at $50. Violations subject to fines (up to $2,000 per violation).
    • Effective October 1, 2025 for personal lines referrals made on/after that date.

  • NAIC accreditation / solvency oversight

    • Adds group capital calculation and liquidity stress test requirements for insurance holding company systems to maintain NAIC accreditation.
    • Requires annual group capital calculation filings with the lead state commissioner; specifies exemptions (e.g., single‑insurer holding systems or where the Federal Reserve Board performs the calculation).
    • Establishes liquidity stress testing and related reporting obligations (details in new statutory sections and implementing rules).

  • Market conduct, consumer protection, and other changes

    • Revisions to the Insurance Guaranty Association Act and Professional Employer Organization law.
    • Clarifies permitted rebate/trade practices and rules for exchange of business between producers.
    • Requires drivers subject to the inexperienced‑driver premium surcharge to maintain continuous liability coverage to benefit from or be eligible for that surcharge status.
    • Places limits on residential lease provisions that require renters insurance.
    • Modifies timing/effective dates for prior changes to underinsured motorist calculations and insurance ratemaking in prior session laws.
    • Allows brokers/salesmen to register with multiple dealers under common ownership or control.
    • Authorizes insurers to cancel policies when a premium payment is reversed via credit‑card chargeback (subject to statutory procedures).

Who is affected

  • Insurance producers (licensing, training, reciprocity, exchange of business rules).
  • Insurers and insurance holding company systems (capital calculation, liquidity stress tests, reporting).
  • Consumers/drivers (coverage requirements for surcharge eligibility; renters facing lease insurance clauses).
  • Destination groups such as guaranty associations, PEOs, brokers/dealers, and DOI (administration and enforcement).

Procedural/timeline notes

  • The act is Chapter SL 2025‑45, signed July 1, 2025. Specific sections (notably producer licensure and referral cap changes) include an explicit effective date of October 1, 2025. Other provisions are effective as provided in the session law or upon adoption of implementing regulations by the Commissioner/DOI.

Potential impacts (high level)

  • Administrative and compliance: Insurers and holding companies may incur additional compliance costs to prepare and file group capital calculations and perform liquidity stress testing; DOI will develop implementing rules.
  • Licensing market: Removing rigid course requirements may lower barriers and change training market dynamics; competency standards and some minimum hours remain.
  • Consumer protection: Clarifications to referral fee limits, renters insurance restrictions, and policy cancellation on chargebacks aim to protect consumers and clarify market practices.
  • NAIC accreditation: Adoption of solvency/reporting measures is intended to preserve the DOI’s accreditation status, which affects insurer licensure and market access.

For specific statutory text, implementing rules, or applicability to a particular business line, consult the enacted Session Law (SL 2025‑45) and the North Carolina DOI rulemaking materials.

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

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