Bill > H720

This bill proposes several revisions to North Carolina's Insurance Guaranty Association Act, expanding the scope and clarifying provisions related to insurance claims when an insurer becomes insolvent. The bill introduces a new definition for "cybersecurity insurance," explicitly including this type of coverage within the guaranty association's protections, and adds specific provisions for first and third-party cyber insurance claims with a maximum payout of $500,000 for a single insured event. The legislation enhances the association's powers by allowing it to appoint legal counsel, investigate and settle claims in any order deemed reasonable, and provides more detailed rights to review and contest settlements, releases, and judgments made by insolvent insurers. The bill also modifies provisions about who can be pursued for recovery of paid claims, specifically clarifying that an insured's net worth calculation should include the aggregate net worth of subsidiaries and affiliates on a consolidated basis. Additionally, the bill streamlines the process for staying legal proceedings when an insurer becomes insolvent, removing previously complicated language about vacating default judgments while maintaining the association's ability to defend claims. The changes aim to provide more clarity and flexibility for the Insurance Guaranty Association in handling claims when insurance companies become insolvent.

Budget and Finance, Business and Industry, Government Affairs

https://www.ncleg.gov/BillLookUp/2025/H720