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SB 306

RELATING TO THE LANDLORD-TENANT CODE.

2025 Regular Session Introduced by Stanley Chang and 2 co-sponsors

The bill creates an optional Association Aggregate Security System funded by various instruments, may require collateral from participants, and imposes a five-year limit to file cl

Carried over to 2026 Regular Session.
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Bill Summary · SB 306

SB 306 — WC / Self‑Insurance Association Amendments (North Carolina)

Status
- Bill number: SB 306
- Introduced: Feb 10, 2025
- Status: Passed first reading (March 18, 2025); pending further legislative action

Purpose / Intent
SB 306 makes targeted reforms to the law governing the North Carolina Self‑Insurance Security Association and related workers’ compensation self‑insurance requirements. The bill clarifies program definitions, updates how the Association may structure an aggregate security system for individual self‑insurers, establishes conditions for participation and collateral, and creates a statutory limit on the time to bring claims against the Association following a member insolvency.

Key provisions and changes
- Definitions (amends G.S. 97‑130 / 97‑165)
- Clarifies/expands defined terms used throughout the Article (e.g., “Association,” “Association Aggregate Security System,” “collateral,” “covered claim,” “member self‑insurer,” “group self‑insurer,” etc.).
- “Collateral” explicitly includes cash, certificates of deposit, surety bonds, or irrevocable letters of credit.

  • Association Aggregate Security System (amends G.S. 97‑133(a)(2a))

    • Authorizes the Association to annually operate an “Association Aggregate Security System” funded by a mix of cash on deposit, securities, surety bonds, irrevocable letters of credit, insurance, reinsurance, or other financial instruments.
    • The Association may assess participating individual self‑insurers for this system (assessments pursuant to statutory procedure).
    • The Association may require participating self‑insurers to post collateral with the Association as a precondition to continued participation, with the collateral requirement based on the participant’s financial condition.
    • If the Association determines operation of the aggregate security system is not feasible in a given year, it may suspend or terminate the system after notifying the Commissioner at least 90 days in advance. During any suspension or termination period, self‑insurers must deposit the amounts required by G.S. 97‑185(b3) with the Commissioner as prescribed by G.S. 97‑185(c).
    • Explicitly provides that group self‑insurers shall not participate in the Association Aggregate Security System.

  • Statute of repose for claims against the Association (adds new G.S. 97‑144)

    • Establishes that a workers’ compensation claim against the Association must be filed within five years after the claims‑bar date set by the insolvency court in the former member self‑insurer’s insolvency proceeding. Claims not filed within that five‑year window are forever barred as claims against the Association.

Who is affected
- Individual self‑insurers: may be assessed for the Association’s aggregate security system and could be required to post collateral based on financial condition; must follow deposit rules if system is suspended.
- Group self‑insurers: explicitly excluded from participation in the Association Aggregate Security System.
- The North Carolina Self‑Insurance Security Association and its Board: will have expanded authority to structure and require collateral for an aggregate security system, and new administrative obligations (e.g., assessments, notifications to the Commissioner).
- North Carolina Commissioner of Insurance: role in receiving mandated deposits when the Association suspends the system; may be involved in oversight related to collateral and participation.
- Claimants / injured workers: the new five‑year filing limit after an insolvency court’s claims‑bar date affects the window in which they can present claims against the Association.

Potential fiscal and practical impacts
- Financial exposure and cash‑flow: individual self‑insurers may face increased liquidity needs (assessments, collateral) and administrative compliance burdens.
- System stability: the bill gives the Association tools to pool and secure aggregate liabilities (via multiple instruments) but also a path to suspend the aggregate system—triggering statutory deposits with the Commissioner—potentially shifting administrative/financial burdens.
- Claim timing: five‑year repose for Association claims increases predictability but may shorten remedies for some creditors/claimants following member insolvency.
- Administrative workload: additional responsibilities for the Association and Commissioner (assessments, collateral administration, notices).

Procedural/timeline notes
- The bill amends multiple statutes in Chapter 97 (Workers’ Compensation), notably G.S. 97‑130, G.S. 97‑133(a)(2a), and G.S. 97‑165, and adds a new § 97‑144 (statute of repose).
- As of first reading, SB 306 remains subject to committee review, floor votes, and concurrence steps before final enactment. (No effective date is specified in the bill text excerpts; effective date would be set in the final enacted language.)

For readers wanting further detail
- Key statutory references in the bill: G.S. 97‑130, G.S. 97‑133, new G.S. 97‑144, and G.S. 97‑165.
- Parties likely to be most directly interested: self‑insured employers, insurance regulators, workers’ compensation claimants, and the Association’s Board.

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

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