WeVote
Log In

Bill

Bill

SB 271

Relating to public safety standards.

2025 Regular Session

Expands NC insurance trade practices to permit value-added services, pilots, and noncash gifts/raffles up to $250, under objective criteria, while maintaining premium rebate bans.

In committee upon adjournment.
0
WeVote Research Nonpartisan
Bill Summary · SB 271

SB 271 — Permitted Trade Practices / Insurance Rebates (Introduced Feb 4, 2025)

Status: Passed 1st Reading (Mar 13, 2025)
Subject: Commerce; Insurance; Public

Purpose / Intent

The bill clarifies and expands the trade-practice exceptions to North Carolina’s general prohibition on insurance rebates. It updates statutory language to explicitly permit certain non‑premium incentives, value‑added services, pilot programs, gifts, and promotional raffles when provided by insurers or producers — subject to objective criteria — while preserving the general ban on premium rebates and other prohibited inducements.

Key provisions and changes

  • Repeals: G.S. 58‑63‑15(8)b.4 and G.S. 58‑63‑16 (removes older, narrower provisions referenced in the existing rebate/discrimination rules).
  • Amends G.S. 58‑63‑15 (unfair methods of competition / rebates) to add and define a set of permitted practices that will not be treated as unlawful rebates or discrimination when all applicable conditions are met:
    • Value‑added products or services: insurers or producers may offer or provide non‑policy products/services (or reduced‑cost services) not specified in the policy if they:
    • Relate to coverage and are primarily designed to achieve things like loss mitigation/loss control, reduced claim costs, risk education, risk monitoring/assessment, enhanced health, enhanced financial wellness, post‑loss services, behavioral incentives to reduce health/risk, or assistance administering employee/retiree benefit coverage.
    • Are reasonable in cost relative to the customer’s premiums or policy class.
    • Provide customer contact information for the product/service.
    • Are offered based on documented objective criteria and not unfairly discriminatory. Those criteria must be maintained and produced on request by the Department of Insurance.
    • Pilot/testing programs: insurers/producers may run pilot offers when they have a good‑faith belief the product meets the criteria above; pilot programs are limited to no more than one year and require notice to the Department; the program may proceed unless the Department objects within 21 days.
    • Noncash gifts / charitable donations: allowed if made in connection with marketing/sale/retention of insurance, cost does not exceed $250 per policy term, is not unfairly discriminatory, and is not conditioned on purchase/renewal.
    • Drawings/raffles: permitted if open to public, no cost to enter, do not obligate purchase of insurance, prize value does not exceed $250, and are not unfairly discriminatory.
  • Reaffirms continued prohibition on rebates, special premium reductions, or other valuable inducements not specified in a policy; preserves exceptions such as payment of commissions and insurer dividend distributions.
  • Advertising restriction: continues prohibition on using phrases such as “free” or “no cost” as an inducement to purchase insurance ( remains in the rewritten section).

Who is affected

  • Insurers and licensed insurance producers operating in North Carolina — marketing and product teams will be able to offer a broader set of non‑premium incentives and services under the specified limits.
  • Policyholders, applicants, and other “customers” who may receive value‑added services, gifts, or participate in promotional drawings.
  • NC Department of Insurance — will receive notices of pilot programs and may review documentation demonstrating objective criteria and reasonableness.

Procedural / timing notes

  • Introduced Feb 4, 2025; passed first reading Mar 13, 2025 (assigned to Rules and Operations of the Senate).
  • Statutory requirements include recordkeeping (documented objective criteria) and a 21‑day window for Department objection to pilot programs.

Practical impact / considerations

  • Allows insurers/producers to legally provide many customer‑facing value‑added services (e.g., risk‑management tools, health incentives, financial wellness services) and modest noncash promotional items while limiting the risk of unfair discrimination and preserving consumer protections against premium rebates.
  • $250 caps (per policy term / per prize) impose a clear quantitative limit on gifts and raffle prizes.
  • Introduces procedural oversight (pilot notices, documentation retention, Department review) that insurers must incorporate into compliance and marketing processes.
  • No immediate fiscal appropriation or explicit fiscal impact in the bill text; potential administrative workload increase for the Department to review pilot notifications and produce oversight.

If you’d like, I can:
- Pull the exact statutory language being repealed (G.S. 58‑63‑16) and summarize how its removal changes the legal framework; or
- Draft a one‑page compliance checklist insurers could use to implement these new allowances.

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

Sign in to ask a question.