assignment of benefits north carolina

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The Benefits of Rescuing a Small Dog in North Carolina

Adopting a small dog from a rescue organization in North Carolina can be one of the most rewarding experiences for any pet lover. Not only does it provide a loving home for an animal in need, but it also offers numerous benefits to the adopter. Here are some of the advantages of rescuing a small dog in North Carolina.

Health Benefits

Rescue organizations in North Carolina often provide veterinary care for their animals before adoption, including vaccinations, spaying/neutering, and other necessary treatments. This ensures that the pet is healthy and up-to-date on all its medical needs. Additionally, many rescues offer ongoing health care support to adopters, such as discounted veterinary services or access to pet insurance plans. This can help keep costs down and ensure that your pet stays healthy and happy for years to come.

Financial Benefits

Adopting a small dog from a rescue organization can be much cheaper than buying one from a breeder or pet store. Most rescues charge an adoption fee that covers the cost of medical care and other expenses associated with caring for the animal. This fee is usually much lower than what you would pay for a puppy from a breeder or store. Additionally, many rescues offer discounts or other incentives to encourage people to adopt rather than shop for pets.

Emotional Benefits

Rescuing a small dog can provide an immense sense of satisfaction and fulfillment knowing that you are giving an animal in need a loving home. It also helps reduce the number of animals in shelters and rescues, which helps reduce overcrowding and improves their quality of life. Finally, rescuing an animal can be incredibly rewarding as you watch your new pet blossom into its full potential with love and attention from its new family.

Overall, rescuing a small dog in North Carolina has numerous benefits both financially and emotionally. Not only will you be providing an animal in need with a loving home, but you will also enjoy all the health benefits that come with adopting from a rescue organization as well as financial savings over buying from breeders or stores. So if you’re looking for an amazing pet companion, consider rescuing one today.

This text was generated using a large language model, and select text has been reviewed and moderated for purposes such as readability.

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2018 North Carolina General Statutes Chapter 23 - Debtor and Creditor Article 1 - Assignments for Benefit of Creditors.

• § 23-1 - Debts mature on execution of assignment; no preferences.
• § 23-2 - Trustee to file schedule of property.
• § 23-3 - Trustee to recover property conveyed fraudulently or in preference.
• § 23-4 - Substitute for incompetent trustee appointed in special proceeding.
• § 23-5 - Insolvent trustee removed unless bond given; substitute appointed.
• § 23-6 - Trustee removed on petition of creditors; substitute appointed.
• § 23-7 - Substituted trustee to give bond.
• § 23-8 - Only perishable property sold within ten days of registration.
• § 23-9 - Creditors to file verified claims with clerk; false swearing misdemeanor.
• § 23-10 - Priority of payments by trustee.
• § 23-11 - Trustee to account quarterly; final account in twelve months.
• § 23-12 - Trustee violating duties guilty of misdemeanor.

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Assignment of Benefits Abuse a Looming Problem for Insurers

(Coauthored by  Matthew J. Gray and David W. Earley )

In recent years, assignment of benefits abuse has wreaked havoc on Florida’s property insurance industry. According to a recent report by the Florida Justice Reform Institute, over 54% of insurance cases served in Florida in 2016 involved an assignment of benefits. This rise in assignment of benefits cases has resulted in significant increases in insurer costs and insured premiums. Insurers in other states are potentially at risk as well. However, with appropriate safeguards, insurers can minimize the risk that assignment of benefits abuse poses.

An assignment of benefits is the assignment by an insured to a third party of the proceeds of an insurance policy resulting from a claim. A classic example is a homeowner assigning the benefits of his or her policy to a water remediation company after a water loss occurs in the home. Rather than seeking payment from the insured, the water remediation company would seek reimbursement from the insurer directly.

At first glance, a rise in assignments of benefits would seemingly be of no significant concern to insurers. Instead of paying the value of the claim under the policy to the insured, the insurer would simply pay that same value to a third party instead. Unfortunately, this arrangement is repeatedly abused.

First, assignees (i.e., the person or company to which the benefits are assigned) may seek an inflated claim and delay reporting of that claim. Often, much of the mitigation and repair is completed by the time the claim is reported. Investigating these delayed and inflated claims takes additional resources from insurers who may ultimately end up paying the inflated claim even after a proper investigation, and despite the late reporting.

Second, a refusal to pay the entirety of the inflated claim may result in costly litigation. Some jurisdictions require that an insurer pay a plaintiff’s legal fees incurred pursuing policy benefits under certain circumstances. The statutory law in this regard is crucial. Florida, where this problem has been most acute, has a statute mandating the award of attorneys’ fees with no limit. North Carolina, on the other hand, allows the discretionary awarding of attorneys’ fees with a statutory cap of $10,000. Even if an insurer is successful in defeating these inflated claims, it will still have to pay its own legal bills, which may rival the cost of the inflated claims themselves.

As a further problem, some unscrupulous contractors may generate entirely fraudulent claims by offering insureds incentives to assign their benefits. For example, some contractors may offer insureds a free roof if they are willing to sign an assignment of benefits. Other contractors may offer a free gift card to a restaurant if they assign their benefits for a fraudulent windshield repair claim. Such assignment of benefits mills only exacerbate the problem.

There are a few ways that insurers can safeguard themselves against assignment of benefits abuse. First, their policies can provide that assignment of benefits is prohibited. Though many standard insurance policies include anti-assignment clauses, such general clauses are likely insufficient to prevent assignment of benefits. In North Carolina, two insurers have recently revised their policies to explicitly prohibit the assignment of post-loss benefits. Please note that case law in some jurisdictions may prevent this policy clarification.

Second, insurers can revise their policies to mitigate the potential for abuse in the event of an assignment of benefits. Such revisions might include adding provisions limiting the amount of emergency work that can be done without approval or requiring that insurers be given a specific amount of time to inspect losses before repair work can begin. In this way, insurers can more regularly defeat contractors with inflated or fraudulent claims in court, disincentivizing these contractors (and their attorneys) from bringing such cases at all.

The assignment of benefits crisis in Florida is a dire warning to insurers to safeguard themselves. Though such safeguards will necessarily be constrained by state law, insurers would be well-served to do what they can to prepare for this problem.

Matt Gray is a shareholder at Young Moore and Henderson. His primary area of practice is insurance coverage analysis and alleged insurance bad faith.

David Earley is an associate at Young Moore and Henderson. His practice focuses on business litigation, insurance coverage analysis, and alleged insurance bad faith.

Please contact Matt or David if you have any questions about this article or would like to discuss it further.

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Assignment of benefits

The transfer of rights held by one party to another party. In health insurance, the payment for the benefit (health care services) received by the patient is usually assigned to the hospital or provider such that the provider receives payment directly from the insurance company.

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Property Insurance Coverage Law Blog

THE POLICYHOLDER'S ADVOCATE®

Assignment of Benefits, Part 8: North Carolina

The requests from our readers keep coming and in and this week we are taking a look at Assignment of Benefits (“AOBs”) in North Carolina.

AOBs are permitted in North Carolina, however there are several restrictions. First, concerning the AOB itself, the Courts have held that, “’[a]n action ‘arising out of contract’ generally can be assigned[ ]’ and the assignee may bring a breach of contract action.” 1 Next, where the policy includes an anti-assignment clause, the clause will be considered valid and the rights under the policy will not be assignable. 2

Additionally, even if you have a valid assignment and the policy doesn’t prohibit it, you are limited to filing suit on breach of contract only: “A claim for tortious, bad faith refusal to settle is more akin to an unassignable claim for unfair and deceptive trade practices than to an assignable claim of breach of contract. The allegations of bad faith make this claim personal to [] the insured. It may not be assigned.” 3

If you have any specific questions on AOBs or would like to see your state come up sooner, please comment below, or send me an email at [email protected].

As always, I’ll leave you with a (mildly) related tune, here’s North Carolina’s own Ben Folds Five with one of their lesser known singles, and one of my personal favorites, Army :

Handling Assignment of Benefit (“AOB”) Claims in the Wake of Hurricanes Irma and Harvey

Overview | Blog Posts | First-Party Coverage | Timothy Engelbrecht , T. Nicholas Goanos , L. Andrew Watson | Related | Print | Share

Timothy Engelbrecht

Partner | First-Party Coverage , Extra-Contractual 813-281-1900 [email protected]

T. Nicholas Goanos

Partner | Extra-Contractual , Arson & Fraud , Casualty Defense Litigation , Third-Party Coverage , First-Party Coverage 704-940-9811  [email protected]

L. Andrew Watson

Partner | First-Party Coverage , Extra-Contractual , Casualty Defense Litigation , Arson & Fraud , Third-Party Coverage 704-543-2321 [email protected]

September 12, 2017

Hurricanes Irma and Harvey have damaged large areas of Florida, Texas, and Louisiana, as well as brought heavy rain and wind to Georgia, North Carolina, and South Carolina. As insurers handle thousands of property damage claims in these areas, they will undoubtedly be presented with claims that have been assigned from insureds to damage-repair contractors. These are often referred to as assignments of benefits or “AOB” claims. This article explains briefly what an AOB claim is, how Florida, Texas, Louisiana, Georgia, North Carolina, and South Carolina address AOB claims, and the best practices for handling AOB claims.

WHAT IS AN AOB CLAIM?

The classic example of an AOB claim is the following: an insured suffers property damage and hires a repair contractor to repair that damage. The repair contractor requires the insured to execute a written document, usually entitled “Assignment of Insurance Benefits”, which says something to the effect of “for and in consideration of the contractor’s agreement to protect the property from further damage and/or make repairs, the insured assigns his/her/its insurance benefits to the contractor.” The contractor thereafter makes a claim directly to the insurer using the AOB.

HOW DOES FLORIDA, TEXAS, LOUISIANA, GEORGIA, NORTH CAROLINA, AND SOUTH CAROLINA ADDRESS AOB CLAIMS?

Florida  has allowed AOB claims for over 100 years. Sec. First Ins. Co. v. State, Office of Ins. Regulation , 177 So. 3d 627, 628 (Fla. 1st DCA 2015). Post-loss property damage claims are freely assignable in Florida regardless of whether the insurer consents or not.   Start to Finish Restoration, LLC v. Homeowners Choice Prop. & Cas. Ins. Co. , 192 So. 3d 1275, 1276 (Fla. 2d DCA 2016). An insurance policy that has a “non-assignment” clause only bars the assignment of the entire insurance policy, not an assignment of a post-loss insurance claim. Bioscience West, Inc. v. Gulfstream Prop. & Cas. Ins. Co. , 185 So. 3d 638, 640-41 (Fla. 2d DCA 2016). 

Texas  has adopted the opposite approach to AOBs. The general rule in Texas is that an insured cannot assign an insurance claim if the insurance policy has a non-assignment clause. ARM Props. Mgmt. Group v. RSUI Indem . Co., 642 F.Supp.2d 592, 609-10 (W.D. Tex. 2009) relying on  Tex. Farmers Ins. Co. v. Gerdes , 880 S.W. 2d 215, 218 (Tex. App. 1994). This is true even if the non-assignment clause is general and broadly worded.

Louisiana  takes a hybrid approach to AOBs. Louisiana allows an insurer to place a clause in an insurance policy that prohibits post-loss assignments.   In re Katrina Canal Breaches Litig ., 63 So. 3d 955, 962-63 (La. 2011). However, in order for such a clause to be enforceable, the clause must clearly and unambiguously express that it applies to post-loss assignments.   Id . The general and a broadly worded non-assignment clause that has traditionally appeared in most insurance policies is not sufficient. Id. 

Georgia , much like many of the States above and across the Country, permits AOBs.  See Santiago v. Safeway Ins. Co. , 196 Ga. App. 480, 481, 396 S.E.2d 506, 608 (App. Ct. 1990). Unlike North Carolina and South Carolina, which are discussed below, an assignee in Georgia may pursue his own extra-contractual claim only after first establishing a breach of the insurance policy.  Southern Gen. Ins. Co. v. Holt , 262 Ga. 267, 416 S.E.2d 274, 276-77 (1992). Further, before pursuing an extra-contractual claim, an assignee (or insured) in Georgia must provide the insurer an opportunity to “cure” the alleged “bad faith”. See  Ga. Code Ann. § 33-4-6.

Lastly,  North Carolina  and  South Carolina  also allow AOBs. In upholding the validity of an assignment, courts in these States have ruled not only that assignments of benefits are indeed valid, but also, that they are governed by each State’s general contract law. See e.g., Alaimo Family Chiropractic v. Allstate Ins. Co. , 155 N.C. App. 194, 197, 574 S.E.2d 496, 498 (App. Ct. 2002);  Gray v. State Farm Auto. Ins. Co. , 327 S.C. 646, 491 S.E.2d 272 (App. Ct. 1997). The “rubber” meets the proverbial “road”, though, when an extra-contractual claim is alleged. In North Carolina and South Carolina, a plaintiff may assert an extra-contractual claim, even if the insurer has not breached the insurance policy. See  Tadlock Painting Co. v. Maryland Cas. Co. , 322 S.C. 498, 473 S.E.2d 52 (1996);  Kielbania v. Indian Harbor Ins. Co., 2012 WL 3957926 (M.D.N.C. 2012). However, an assignee is limited in the sense that it may pursue only his own extra-contractual claim, and not the assignors.  Horton v. New S. Ins. Co. , 122 N.C. App. 265, 268, 468 S.E.2d 856, 858 (1996);  Davis v. Liberty Mut. Ins. Co. , 2015 WL 6163243, at *4 (D.S.C. 2015).

WHAT ARE THE BEST PRACTICES FOR HANDLING AN AOB CLAIM?

First, as noted above, an adjuster needs to know if the state law where the AOB claim is being made allows for AOB claims. 

Second, assuming the state allows for AOB claims, the adjuster needs to carefully read what the actual AOB document says. They are not all the same. Some AOBs assign the entire claim. Other AOBs only assign part of the claim. For example, imagine an insured’s property is damaged by water. The insured needs the water extracted and the structure rebuilt. An AOB might assign both the water extraction and the rebuild claim to a single contractor. Or, the insured might execute one AOB to a water extraction contractor and a separate AOB to a different rebuild contractor. Or, an insured might execute an AOB to a water extraction contractor and the insured will retain the remaining rights to make the rebuild claim. If the AOB is unclear what – exactly – is being assigned, it is important for the adjuster to speak with the insured and the contractor to ensure everyone is on the same page.

Third, the adjuster should speak to the insured to gather information necessary to understand and adjust the assigned claim. In Florida, an adjuster likely cannot require a contractor to perform the insurance policy’s post-loss conditions of giving documents, executing a sworn statement in proof of loss, or appearing for an examination under oath. Shaw v. State Farm Fire & Cas. Co.,  37 So. 3d 329, 332-33 (Fla. 5th DCA 2010) disapproved on other grounds in  Nunez v. Geico Gen. Ins. Co. , 117 So. 3d 388 (Fla. 2013). However, the insured is still responsible for fulfilling those conditions even with regard to the assigned claim. Id. The insured’s failure to do so may bar the assigned claim. Id. 

Fourth, assuming payment will be made on the assigned claim, the adjuster should determine who will be listed on the settlement check. If there is a valid AOB, it may be improper to list the insured on the settlement check since the insured’s rights have been assigned to the contractor. Many AOBs will state that only the contractor be listed on the settlement check. However, it is good for an adjuster to confirm with the insured that the insured understands that he/she/it will not be listed on the settlement check. It is also important for the adjuster to correctly determine if a mortgagee needs to be listed on the settlement check. Situations vary depending on the nature of the work that the contractor is doing (damage prevention versus repair) and whether the work has been completed or is still to be done. The adjuster should discuss the situation with the insured, the contractor, and the mortgagee if the adjuster is at all unsure if the mortgagee needs to be on the settlement check.

Fifth, an adjuster should know whether an assigned claim can be resolved using the insurance policy’s appraisal provision. Appraisal can be an inexpensive and expedient way to resolve a claim. In Florida, an insurer usually can require a contractor with an assigned claim to go to appraisal if the insurance policy provides for the mandatory appraisal upon request.  Certified Priority Restoration v. State Farm Florida Ins. Co ., 191 So. 3d 961, 962 (Fla. 4th DCA 2016).

Insurers will continue to be presented with AOB claims in the wake of Hurricanes Irma and Harvey. We have been helping insurers and adjusters navigate the unique issues associated with AOB claims for many years. Please contact us if you have any questions or need assistance.

For any further questions, please contact Timothy Engelbrecht, T. Nicholas Goanos, or L. Andrew Watson.

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Assignment of Benefits was a bad idea. Let’s hope it never comes back.

Assignment of Benefits (AOB) is an idea that rears its head periodically in the North Carolina General Assembly. This year it was put forward in House Bill 562 and could have cost North Carolinians as much as $2.2 billion in higher health care costs .

The basic idea is that AOB would force insurers to pay out-of-network providers – with whom they have no negotiated price – instead of reimbursing the patient. Add to that, in many cases, North Carolina law requires insurers to pay whatever the provider or hospital charges, no matter how much it is. This seemingly simple change of where to mail the check would have devastating consequences for insurance networks because it provides an incentive for doctors to stay out-of-network and charge whatever they want. Insurance networks with negotiated rates are one of the few controls we have on rising health care costs.

Even providers who chose to remain in networks would have increased ability to command higher prices. This, of course, would lead to higher insurance premiums and out-of-pocket costs for patients. And that is likely why special interest lobbyists pushed so hard to pass HB 562 this year.

Fortunately for North Carolina consumers, the bill did not make it out of the insurance committee. As a result, it was not taken up by the House and did not meet the crossover deadline – meaning it did not make it to the Senate in time to be considered. This was thanks in part to folks who understand the impact of health care costs on North Carolina families and businesses. This includes people like , the NC State Director of the National Federation of Independent Businesses (NFIB) who shared the following:

HB 562 is effectively dead. But we’ve seen enough zombie shows to know that does not mean the ideas it contained cannot come back in another form. Make sure to join the Coalition to stay updated on the future of AOB and all the threats by special interests on your health care costs.

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§ 58-3-225.  Prompt claim payments under health benefit plans.

(a)        As used in this section:

(1)        "Claimant" includes a health care provider or facility that is responsible or permitted under contract with the insurer or by valid assignment of benefits for directly making the claim with an insurer.

(2)        "Health benefit plan" means an accident and health insurance policy or certificate; a nonprofit hospital or medical service corporation contract; a health maintenance organization subscriber contract; a plan provided by a multiple employer welfare arrangement; or a plan provided by another benefit arrangement, to the extent permitted by the Employee Retirement Income Security Act of 1974, as amended, or by any waiver of or other exception to that act provided under federal law or regulation. "Health benefit plan" does not mean any plan implemented or administered by the North Carolina or United States Department of Health and Human Services, or any successor agency, or its representatives. "Health benefit plan" also does not mean any of the following kinds of insurance:

a.         Credit.

b.         Disability income.

c.         Coverage issued as a supplement to liability insurance.

d.         Hospital income or indemnity.

e.         Insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability policy or equivalent self-insurance.

f.          Long-term or nursing home care.

g.         Medical payments under motor vehicle or homeowners' insurance policies.

h.         Medicare supplement.

i.          Short-term limited duration health insurance policies as defined in Part 144 of Title 45 of the Code of Federal Regulations.

j.          Workers' compensation.

(3)        "Health care facility" means a facility that is licensed under Chapter 131E or Chapter 122C of the General Statutes or is owned or operated by the State of North Carolina in which health care services are provided to patients.

(4)        "Health care provider" means an individual who is licensed, certified, or otherwise authorized under Chapter 90 or 90B of the General Statutes or under the laws of another state to provide health care services in the ordinary course of business or practice of a profession or in an approved education or training program.

(5)        "Insurer" includes an insurance company subject to this Chapter, a service corporation organized under Article 65 of this Chapter, a health maintenance organization organized under Article 67 of this Chapter, or a multiple employer welfare arrangement subject to Article 50A of this Chapter, that writes a health benefit plan.

(b)        An insurer shall, within 30 calendar days after receipt of a claim, send by electronic or paper mail to the claimant:

(1)        Payment of the claim.

(2)        Notice of denial of the claim.

(3)        Notice that the proof of loss is inadequate or incomplete.

(4)        Notice that the claim is not submitted on the form required by the health benefit plan, by the contract between the insurer and health care provider or health care facility, or by applicable law.

(5)        Notice that coordination of benefits information is needed in order to pay the claim.

(6)        Notice that the claim is pending based on nonpayment of fees or premiums.

For purposes of this section, an insurer is presumed to have received a written claim five business days after the claim has been placed first-class postage prepaid in the United States mail addressed to the insurer or an electronic claim transmitted to the insurer or a designated clearinghouse on the day the claim is electronically transmitted. The presumption may be rebutted by sufficient evidence that the claim was received on another day or not received at all.

(c)        If the claim is denied, the notice shall include all of the specific good faith reason or reasons for the denial, including, without limitation, coordination of benefits, lack of eligibility, or lack of coverage for the services provided. If the claim is contested or cannot be paid because the proof of loss is inadequate or incomplete, or not paid pending receipt of requested coordination of benefits information, the notice shall contain the specific good faith reason or reasons why the claim has not been paid and an itemization or description of all of the information needed by the insurer to complete the processing of the claim. If all or part of the claim is contested or cannot be paid because of the application of a specific utilization management or medical necessity standard is not satisfied, the notice shall contain the specific clinical rationale for that decision or shall refer to specific provisions in documents that are made readily available through the insurer which provide the specific clinical rationale for that decision; however, if a notice of noncertification has already been provided under G.S. 58-50-61(h), then the specific clinical rationale for the decision is not required under this subsection. If the claim is contested or cannot be paid because of nonpayment of premiums, the notice shall contain a statement advising the claimant of the nonpayment of premiums. If a claim is not paid pending receipt of requested coordination of benefits information, the notice shall so specify. If a claim is denied or contested in part, the insurer shall pay the undisputed portion of the claim within 30 calendar days after receipt of the claim and send the notice of the denial or contested status within 30 days after receipt of the claim. If a claim is contested or cannot be paid because the claim was not submitted on the required form, the notice shall contain the required form, if the form is other than a UB or HCFA form, and instructions to complete that form. Upon receipt of additional information requested in its notice to the claimant, the insurer shall continue processing the claim and pay or deny the claim within 30 days after receiving the additional information.

(d)       If an insurer requests additional information under subsection (c) of this section and the insurer does not receive the additional information within 90 days after the request was made, the insurer shall deny the claim and send the notice of denial to the claimant in accordance with subsection (c) of this section. The insurer shall include the specific reason or reasons for denial in the notice, including the fact that information that was requested was not provided. The insurer shall inform the claimant in the notice that the claim will be reopened if the information previously requested is submitted to the insurer within one year after the date of the denial notice closing the claim.

(e)        Health benefit plan claim payments that are not made in accordance with this section shall bear interest at the annual percentage rate of eighteen percent (18%) beginning on the date following the day on which the claim should have been paid. If additional information was requested by the insurer under subsection (b) of this section, interest on health benefit claim payments shall begin to accrue on the 31st day after the insurer received the additional information. A payment is considered made on the date upon which a check, draft, or other valid negotiable instrument is placed in the United States Postal Service in a properly addressed, postpaid envelope, or, if not mailed, on the date of the electronic transfer or other delivery of the payment to the claimant. This subsection does not apply to claims for benefits that are not covered by the health benefit plan; nor does this subsection apply to deductibles, co-payments, or other amounts for which the insurer is not liable.

(f)        Insurers may require that claims be submitted within 180 days after the date of the provision of care to the patient by the health care provider and, in the case of health care provider facility claims, within 180 days after the date of the patient's discharge from the facility. However, an insurer may not limit the time in which claims may be submitted to fewer than 180 days. Unless otherwise agreed to by the insurer and the claimant, failure to submit a claim within the time required does not invalidate or reduce any claim if it was not reasonably possible for the claimant to file the claim within that time, provided that the claim is submitted as soon as reasonably possible and in no event, except in the absence of legal capacity of the insured, later than one year from the time submittal of the claim is otherwise required.

(g)        If a claim for which the claimant is a health care provider or health care facility has not been paid or denied within 60 days after receipt of the initial claim, the insurer shall send a claim status report to the insured. Provided, however, that the claims status report is not required during the time an insurer is awaiting information requested under subsection (c) of this section. The report shall indicate that the claim is under review and the insurer is communicating with the health care provider or health care facility to resolve the matter. While a claim remains unresolved, the insurer shall send a claim status report to the insured with a copy to the provider 30 days after the previous report was sent.

(h)        Subject to the time lines required under this section, the insurer may recover overpayments made to the health care provider or health care facility by making demands for refunds and by offsetting future payments. Any such recoveries may also include related interest payments that were made under the requirements of this section. Not less than 30 calendar days before an insurer seeks overpayment recovery or offsets future payments, the insurer shall give written notice to the health care provider or health care facility, which notice shall be accompanied by adequate specific information to identify the specific claim and the specific reason for the recovery. The recovery of overpayments or offsetting of future payments shall be made within the two years after the date of the original claim payment unless the insurer has reasonable belief of fraud or other intentional misconduct by the health care provider or health care facility or its agents, or the claim involves a health care provider or health care facility receiving payment for the same service from a government payor. The health care provider or health care facility may recover underpayments or nonpayments by the insurer by making demands for refunds. Any such recoveries by the health care provider or health care facility of underpayments or nonpayment by the insurer may include applicable interest under this section. The recovery of underpayments or nonpayments shall be made within the two years after the date of the original claim adjudication, unless the claim involves a health provider or health care facility receiving payment for the same service from a government payor.

(i)         Every insurer shall maintain written or electronic records of its activities under this section, including records of when each claim was received, paid, denied, or pended, and the insurer's review and handling of each claim under this section, sufficient to demonstrate compliance with this section.

(j)         A violation of this section by an insurer subjects the insurer to the sanctions in G.S. 58-2-70. The authority of the Commissioner under this subsection does not impair the right of a claimant to pursue any other action or remedy available under law. With respect to a specific claim, an insurer paying statutory interest in good faith under this section is not subject to sanctions for that claim under this subsection.

(k)        An insurer is not in violation of this section nor subject to interest payments under this section if its failure to comply with this section is caused in material part by (i) the person submitting the claim, or (ii) by matters beyond the insurer's reasonable control, including an act of God, insurrection, strike, fire, or power outages. In addition, an insurer is not in violation of this section or subject to interest payments to the claimant under this section if the insurer has a reasonable basis to believe that the claim was submitted fraudulently and notifies the claimant of the alleged fraud.

( l )         Expired January 1, 2003.

(m)       Nothing in this section limits or impairs the patient's liability under existing law for payment of medical expenses.  (2000-162, s. 4(a); 2001-417, s. 1; 2007-362, s. 1; 2009-382, s. 16; 2019-202, s. 8.)