NORTH CAROLINA GENERAL ASSEMBLY
1967 SESSION
CHAPTER 1246
HOUSE BILL 1189
AN ACT TO AMEND G.S. 20-279.21, RELATING TO MOTOR VEHICLE LIABILITY POLICIES SO AS TO PROVIDE THAT DEFAULT JUDGMENTS TAKEN AGAINST INSUREDS HOLDING POLICIES UNDER THE ASSIGNED RISK PLAN SHALL NOT BE USED AS A BASIS FOR JUDGMENT AGAINST AN ASSIGNED RISK INSURER, UNLESS SUCH INSURER HAS HAD REASONABLE NOTICE OF THE PENDENCY OF SUIT AGAINST ITS INSURED AND AN OPPORTUNITY TO DEFEND.
The General Assembly of North Carolina do enact:
Section 1. G.S. 20-279.21(f)(1) is hereby rewritten to read as follows:
"Except as hereinafter provided, and with respect to policies of motor vehicle liability insurance written under the North Carolina Assigned Risk Plan, the liability of the insurance carrier with respect to the insurance required by this Article shall become absolute whenever injury or damage covered by said motor vehicle liability policy occurs; said policy may not be cancelled or annulled as to such liability by any agreement between the insurance carrier and the insured after the occurrence of the injury or damage; no statement made by the insured or on his behalf and no violation of said policy shall defeat or void said policy. As to policies issued to insureds in this State under the assigned risk plan, a default judgment taken against an assigned risk insured shall not be used as a basis for obtaining judgment against the insurer unless counsel for the plaintiff has forwarded to the insurer, or to one of its agents, by registered mail with return receipt requested, a copy of summons, complaint, or other pleading, filed in the action. The return receipt shall, upon its return to plaintiff's counsel, be filed with the clerk of court wherein the action is pending against the insured and shall be admissible in evidence as proof of notice to the insurer. The refusal of insurer or its agent to accept delivery of the registered mail, as provided in this Section, shall not affect the validity of such notice and any insurer or agent of an insurer refusing to accept such registered mail shall be charged with the knowledge of the contents of such notice. When notice has been sent to an agent of the insurer such notice shall be notice to the insurer. The word 'agent' as used in this subsection shall include, but shall not be limited to, any person designated by the insurer as its agent for the service of process, any person duly licensed by the insurer in the State as insurance agent, any general agent of the company in the State of North Carolina, and any employee of the company in a managerial or other responsible position, or the North Carolina Commissioner of Insurance; Provided, where the return receipt is signed by an employee of the insurer or an employee of an agent for the insurer, shall be deemed for the purposes of this subsection to have been received. The term 'agent' as used in this subsection shall not include a producer of record or broker, who forwards an application for insurance to the Assigned Risk Bureau. The Commissioner of Motor Vehicles and the North Carolina Assigned Risk Bureau, shall, upon request made, furnish to the plaintiff or his counsel the identity and address of the insurance carrier as shown upon the records of the Department or the Bureau, and whether the policy is an assigned risk policy. Neither the Department of Motor Vehicles nor the Assigned Risk Bureau shall be subject to suit by reason of a mistake made as to the identity of the carrier and its address in response to a request made for such information.
The insurer upon receipt of summons, complaint or other process, shall be entitled, upon its motion, to intervene in the suit against its insured as a party defendant and to defend the same in the name of its insured. In the event of such intervention by an insurer it shall become a named party defendant. The insurer shall have 30 days from the signing of the return receipt acknowledging receipt of the summons, complaint or other pleading, in which to file a motion to intervene, along with any responsive pleading, whether verified or not, which it may deem necessary to protect its interest: Provided, the court having jurisdiction over the matter may, upon motion duly made, extend the time for the filing of responsive pleading or continue the trial of the matter for the purpose of affording the insurer a reasonable time in which to file responsive pleading or defend the action. If, after receiving copy of the summons, complaint or other pleading, the insurer elects not to defend the action, if coverage is in fact provided by the policy, the insurer shall be bound to the extent of its policy limits to the judgment taken by default against the insured, and non-cooperation of the insured shall not be a defense.
If the plaintiff initiating an action against the insured has complied with the provisions of this subsection, then, in such event, the insurer may not cancel or annul the policy as to such liability and the defense of non-cooperation shall not be available to the insurer: Provided, however, nothing in this Section shall be construed as depriving an insurer of its defenses that the policy was not in force at the time in question, that the operator was not an 'insured' under policy provisions, or that the policy had been lawfully cancelled at the time of the accident giving rise to the cause of action.
Provided further that the provisions of this Act shall not apply when the assigned risk insured has delivered a copy of the summons, complaint or other pleadings served on him to his insurance carrier within the time provided by law for filing answer, demurrer or other pleadings."
Sec. 2. All laws and clauses of laws in conflict with this Act are hereby repealed.
Sec. 3. This Act shall become effective on and after July 1, 1967 and shall apply to any action or actions initiated thereafter.
In the General Assembly read three times and ratified, this the 6th day of July, 1967.