North Carolina Assigned Risk Insurance
In North Carolina, insurance companies will frequently refer out insurance policies for high risk clients to the North Carolina Reinsurance Facility. Click here for a direct link to the Reinsurance Facility website.
Here is an excerpt from a North Carolina case discussing the origins of the Reinsurance Facility: In 1973, the General Assembly created the Facility to replace the outmoded and largely unworkable Assigned Risk Plan. Essentially, the Facility is a pool of insurers which insures drivers who the insurers determine they do not want to individually insure. The Facility is a creation of North Carolina’s Compulsory Automobile Liability Insurance Law. The pertinent provisions are codified in Article 25A, Chapter 58, of the General Statutes. G.S. ss 58-248.26 to . 40 (1975 Cum.Supp.1979) (hereinafter referred to as “Facility Act”). Under the Facility Act, all insurance companies which write motor vehicle insurance in North Carolina are required to be members of the Facility. They are required to issue motor vehicle insurance to any “eligible risk” as defined in G.S. s 58-248.26(4) who applies for that coverage, if the coverage can be ceded to the Facility. G.S. s 58-248.32(a) provides in part that no licensed agent of an insurer may refuse to accept any application from an eligible risk for such insurance and that the agent must immediately bind the coverage applied for if cession of the particular coverage and limits are permitted in the Facility. After writing such coverage, the company has the option of either retaining it as a part of its voluntary business or ceding it to the Facility. If the policy is ceded, the writing company pays to the Facility the net premium, less certain ceding and claims expense allowances, and the Facility is then liable on the particular **403 policy. Should there be a loss under the policy, the ceding company settles the claim and is reimbursed by the Facility. State ex rel. Hunt v. North Carolina Reinsurance Facility, 302 N.C. 274, 283, 275 S.E.2d 399, 402 – 403 (N.C., 1981).
Here is a link to the statutes that created the Reinsurance Facility.
