No member may terminate insurance to the extent that cession of a particular type of coverage and limits is available under the provisions of this Article except for the following reasons:

(1)        Nonpayment of premium when due to the insurer or producing agent.

(2)        The named insured has become a nonresident of this State and would not otherwise be entitled to insurance on submission of new application under this Article.

(3)        A member company has terminated an agency contract for reasons other than the quality of the agent’s insureds or the agent has terminated the contract and such agent represented the company in taking the original application for insurance.

(4)        When the insurance contract has been cancelled pursuant to a power of attorney given a company licensed pursuant to the provisions of N.C. Gen. Stat. § 58-35-5.

(5)        The named insured, at the time of renewal, fails to meet the requirements contained in the corporate charter, articles of incorporation, and/or bylaws of the insurer, when the insurer is a company organized for the sole purpose of providing members of an organization with insurance policies in North Carolina.

(6)        The named insured is no longer an eligible risk under N.C. Gen. Stat. § 58-37-1. (1973, c. 818, s. 1; 1979, c. 497; 2007-443, s. 2.)

Terms Used In North Carolina General Statutes 58-37-50

  • cession: means the act of transferring the risk of loss from the individual insurer to all insurers through the operation of the facility. See North Carolina General Statutes 58-37-1
  • Company: means each member of the Facility. See North Carolina General Statutes 58-37-1
  • Contract: A legal written agreement that becomes binding when signed.
  • following: when used by way of reference to any section of a statute, shall be construed to mean the section next preceding or next following that in which such reference is made; unless when some other section is expressly designated in such reference. See North Carolina General Statutes 12-3
  • Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
  • state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories, so called; and the words "United States" shall be construed to include the said district and territories and all dependencies. See North Carolina General Statutes 12-3
  Previous section
Next section  
 Article 37 Contents