Archives > 1976 South Carolina Code of Laws - Previous Versions > 2005 Session > Title 38

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Title 38 - Insurance

CHAPTER 91.

JOINT UNDERWRITING ASSOCIATION FOR PRIVATE PASSENGER AND COMMERCE AUTOMOBILE INSURANCE

SECTION 38-91-10. Omitted 063)by 1997 Act No. 154, Section 20(A) as amended by 2002 Act No. 359, Section 1.

SECTION 38-91-30. Definitions.

As used in this chapter:

(a) "association" means the joint underwriting association established pursuant to the provisions of this act.

(b) "automobile insurance" means direct insurance against injury or damage arising out of the ownership, operation, maintenance, or use of motor vehicles, or insurance against loss for damage to motor vehicles. Private passenger automobile insurance and commercial automobile insurance are two distinct kinds of automobile insurance.

(c) "director" means the director of the Department of Insurance.

(d) "plan of operation" means the plan of operation approved pursuant to the provisions of this act or ordered by the director.

(e) "qualified applicant" means (1) a resident of this State who owns a motor vehicle registered in this State or has a valid driver's license or is required to file proof of financial responsibility in order to register his motor vehicle or obtain a driver's license, or (2) a nonresident of this State who owns a vehicle registered or principally garaged in this State; provided, however, that no one shall be a qualified applicant if he has any unpaid premium due for prior automobile insurance or if any person who usually drives the motor vehicle to be insured does not hold or is not eligible to obtain a driver's license under suspension.

(f) "residual market mechanism" means a means of providing a market for insureds in South Carolina where the voluntary market is inadequate.

SECTION 38-91-110. Creation of Associated Auto Insurers Plan; membership; purpose; powers.

(a) A joint underwriting association, hereinafter referred to as the "Associated Auto Insurers Plan", is hereby created consisting of all insurers authorized to write and engaged in writing automobile insurance within this State. Each insurer shall be a member of the association and shall remain a member as a condition of its authority to continue to transact such insurance in this State.

(b) The purpose of the association shall be to guarantee that automobile insurance will be available to any qualified applicant who is unable to procure such insurance through ordinary methods while preserving to the public the benefits of competition among financially sound automobile insurers by encouraging maximum use of the normal private insurance system.

(c) Pursuant to the provisions of this act and its plan of operation, the association is empowered on behalf of its members:

(1) To issue automobile insurance policies to qualified applicants or to arrange for the issuance of such policies through members of the association;

(2) To establish procedures for the sharing among the members of profit or loss on association business and other costs, charges, expenses, liabilities, income, property and other assets of the association. The assessment of members for their appropriate shares may be based on the member's premium volume or exposure units for business other than association business or on a combination of such bases or on any other equitable basis with allowances for incentive programs for insurers to write in the voluntary market business written in the association. Allowances may be provided for existing debits and credits under any automobile insurance plans replaced or terminated as a result of this legislation;

(3) To reinsure association business;

(4) To establish the compensation to be paid to any licensed resident insurance agent or broker;

(5) To join, advise, assist, associate, cooperate and contract with its members and with such organizations, associations, insurers, governmental agencies, and others as may be necessary or proper to accomplish the purpose of the association;

(6) To sue and be sued in the name of the association. No judgment against the association shall create any direct liability in the individual participating members thereof;

(7) To do anything not specifically enumerated above or related thereto which is otherwise necessary or proper to accomplish the purpose of the association.

SECTION 38-91-130. Director to call organizational meeting; Advisory Board; membership; proposed plan of operation; revisions.

(a) Within ninety days after the effective date of this section, the director or his designee shall call the first or organizational meeting of the association and seat an advisory board (hereinafter referred to as the board).

The initial board shall consist of three individuals who are licensed agents or brokers and four consumer representatives to be appointed by the director or his designee, five association members, the Consumer Advocate or his designee, the director of Public Safety or his designee, and one member from the Department of Insurance. The representative from the Department of Insurance shall be a nonvoting board member. All board members, other than the director of the Department of Public Safety or his designee and the Consumer Advocate or his designee, must be appointed by the director or his designee.

The American Insurance Association, the Alliance of American Insurers, and the National Association of Independent Insurers and any individual, group, or insurance agent trade or professional association may nominate qualified individuals for consideration. Vacancies on the board must be published in newspapers of general, statewide circulation.

The terms of office for the initial and subsequent members of the board shall be as provided in the plan of operation. Members of the board must be appointed for the terms specified in the plan and shall serve until their successors are appointed and qualify. Any vacancy must be filled for the unexpired term only. Such plan shall provide for the appointment by the director of three individuals who are licensed as agents or brokers in this State. The board shall elect a chairperson who is not an insurer representative.

No more than one representative of a domestic insurer may serve on the board at any one time. No insurer may serve on the board if such insurer is a servicing carrier for the association or is a member of a group of insurers which has one insurer as a servicing carrier unless the carrier or group of carriers participates in the voluntary automobile market with a level at least twice the premium level for the Associated Auto Insurers Plan. If a servicing contract is awarded mid-term, then the affected representative must resign at the next board meeting.

(b) Within sixty days after the organizational meeting, the board shall file with the director or his designee for his approval, a proposed plan of operation, consistent with the provisions of this act, which shall provide for the prompt and efficient provision of automobile insurance to qualified applicants unable to procure such insurance through ordinary methods. Distinct and separate plans may be filed for private passenger automobile insurance and commercial automobile insurance. The plan(s) of operation shall provide for, among other matters, preliminary assessments of members for initial expenses to commence operations, establishment of necessary facilities, the operation of the association, assessments of members to defray losses and expenses, compensation to licensed agents or brokers, eligibility requirements, the coverages and amounts of insurance to be provided and premium payment plans. The plan(s) of operation must be approved by the department as evidenced by a returned copy stamped approved by the department. The plan(s) of operation must include a provision that all meetings of the board will be held in Columbia unless approval is given by the director. Approval must consist of request stamped approved by the department.

(c) If the director or his designee shall disapprove all or any part of the proposed plan of operation, he shall do so in writing, specifying in what respect the plan of operation fails to meet the requirements of this act. Unless the board takes other appropriate legal action to contest the disapproval, it shall within thirty days thereafter file for his review an appropriately revised plan of operation.

(d) If, after a hearing, the director or his designee finds that any activity or practice of insurers participating in the association or any other residual market mechanism is unfair, unreasonable, or otherwise inconsistent with the provisions of this title, the director or his designee must issue a written order specifying in what respects such activity or practice is unfair, unreasonable, or otherwise inconsistent with the provisions of this title and require the discontinuance of such activity or practice. The director or his designee may establish a residual market mechanism by written order if the director or his designee finds that the existing residual market mechanism is unfair, unreasonable, or inconsistent with the provisions of this chapter.

(e) Any revision of the proposed plan of operation or any subsequent amendments to an approved plan of operation shall be subject to the provisions in subsection (c) relating to the initial plan of operation.

(f) If no plan of operation is submitted to the director or his designee within sixty days after the organizational meeting, the director or his designee shall, after consulting with the representatives of the industry, prepare and promulgate a plan of operation in accordance with the requirements of this act which shall continue in force until superseded by a plan of operation effective in accordance with subsections (b) and (c).

SECTION 38-91-210. Omitted 063)by 1997 Act No. 154, Section 20(A).

SECTION 38-91-220. Omitted 063)by 1997 Act No. 154, Section 20(A).

SECTION 38-91-230. Omitted 063)by 1997 Act No. 154, Section 20(A).

SECTION 38-91-310. Power of board to direct operation of association.

The board shall have all power to direct the operation of the association, except as may be specifically delegated to others or reserved to the members in the plan of operation and may delegate ministerial duties, hire a manager, and contract for goods and services from others.

SECTION 38-91-320. Filing of statement containing information regarding transactions, condition, operations and affairs of association.

The association shall file in the office of the department annually, by March first, a statement which contains information with respect to its transactions, condition, operations, and affairs during the preceding year. The statement shall contain such matters and information as are prescribed by the director or his designee and must be in the form he directs. The director or his designee may, at any reasonable time, require the association to furnish additional information with respect to its transactions, condition, or any matter connected therewith considered to be material and of assistance in evaluating the scope, operation, and experience of the association.

SECTION 38-91-330. Examination into financial condition and affairs of association; report.

The director or his designee shall make an examination into the financial condition and affairs of the association at least annually and shall file a report thereon with the department, the Governor, and the General Assembly. The expenses of the examination must be paid by the association.

SECTION 38-91-340. Omitted 063)by 1997 Act No. 154, Section 20(A).

SECTION 38-91-410. Omitted 063)by 1997 Act No. 154, Section 20(A).

SECTION 38-91-420. Promulgation of regulations.

The director of the Department of Insurance shall promulgate regulations to implement the provisions of this chapter.