North Carolina insurers could offer more low-cost perks

In North Carolina, insurers and insurance producers would get more room to hand out low- or no-cost extras that travel with a policy, but only when the add-ons are tied to the coverage itself.

The bill, recommended by the Department of Insurance, is meant to clean up the state’s rebate rules. It would let companies offer certain value-added products or services at no charge or a reduced cost, including through employees, affiliates or third-party representatives, if the extra is aimed at cutting losses, claims or settlement costs, or at improving risk education, risk monitoring, risk-reduction strategies or health benefits.

Perks with guardrails

The rewrite is not a blank check for sales gimmicks. The value-added offer has to relate to the insurance coverage, and it has to fit within the bill’s conditions. That means the perk cannot be unfairly discriminatory, and it has to be reasonable in relation to the customer’s premiums or coverage.

The measure also keeps insurers from turning coverage itself into bait for another purchase, or from marketing a policy as “free” or “no cost” when the sale really depends on something else. It also keeps room for arrangements that would not violate the federal banking-law provisions the bill cites as safe harbors.

What disappears from the code

The practical change is as much about subtraction as it is about permission. The bill would repeal G.S. 58-63-15(8)b.4. and G.S. 58-63-16, the older rebate language the rewrite is replacing.

Recorded votes show the bill cleared a floor vote 110-1 on May 7.