H 4434 General Bill, By Fleming, Barrett, Beck, Cooper, Easterday, Edge, 
Hawkins, Inabinett, B.L. Jordan, Knotts, Law, Leach, Loftis, J.D. McMaster, 
Riser, Sandifer, Seithel, Stille, Tripp and Whatley
 A BILL TO AMEND SECTION 38-43-240, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA,
 1976, RELATING TO CERTAIN OFFENSES BY INSURANCE AGENTS, SO AS TO PROVIDE FOR A
 DIFFERENT MISDEMEANOR VIOLATION AND PROVIDE A DIFFERENT PENALTY, AND ESTABLISH
 FELONY VIOLATIONS AND PENALTIES; TO AMEND SECTION 38-43-245, RELATING TO
 INSURANCE AGENTS AND FRAUDULENT INSURANCE APPLICATIONS, SO AS TO, AMONG OTHER
 THINGS, CHANGE THE FELONY FOR CERTAIN ACTIVITY TO A "FELONY FOR A FIRST
 OFFENSE" AND CHANGE THE PENALTY, AND ESTABLISH A "FELONY FOR A SECOND OR
 SUBSEQUENT OFFENSE" FOR THE SAME ACTIVITY AND PROVIDE A PENALTY; TO AMEND
 SECTION 38-55-170, AS AMENDED, RELATING TO CONDUCT OF INSURANCE BUSINESS AND
 PRESENTING FALSE CLAIMS FOR PAYMENT, SO AS TO, AMONG OTHER THINGS, CHANGE THE
 NATURE OF EXISTING FELONY OFFENSES AND CHANGE THE PENALTIES, AND PROVIDE THAT,
 FOR THE PURPOSE OF DETERMINING THE DOLLAR AMOUNT OF "CLAIM OR CLAIMS" UNDER
 THIS SECTION, IF A PERSON HAS MULTIPLE VIOLATIONS OF THIS SECTION AGAINST THE
 SAME VICTIM, THOSE VIOLATIONS MAY BE TREATED AS AN AGGREGATE AMOUNT OR AS
 INDIVIDUAL OFFENSES; TO AMEND SECTION 38-55-540, RELATING TO INSURANCE FRAUD
 AND REPORTING IMMUNITY, CRIMINAL PENALTI

   01/20/98  House  Introduced and read first time HJ-10
   01/20/98  House  Referred to Committee on Judiciary HJ-10

A BILL

TO AMEND SECTION 38-43-240, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CERTAIN OFFENSES BY INSURANCE AGENTS, SO AS TO PROVIDE FOR A DIFFERENT MISDEMEANOR VIOLATION AND PROVIDE A DIFFERENT PENALTY, AND ESTABLISH FELONY VIOLATIONS AND PENALTIES; TO AMEND SECTION 38-43-245, RELATING TO INSURANCE AGENTS AND FRAUDULENT INSURANCE APPLICATIONS, SO AS TO, AMONG OTHER THINGS, CHANGE THE FELONY FOR CERTAIN ACTIVITY TO A "FELONY FOR A FIRST OFFENSE" AND CHANGE THE PENALTY, AND ESTABLISH A "FELONY FOR A SECOND OR SUBSEQUENT OFFENSE" FOR THE SAME ACTIVITY AND PROVIDE A PENALTY; TO AMEND SECTION 38-55-170, AS AMENDED, RELATING TO CONDUCT OF INSURANCE BUSINESS AND PRESENTING FALSE CLAIMS FOR PAYMENT, SO AS TO, AMONG OTHER THINGS, CHANGE THE NATURE OF EXISTING FELONY OFFENSES AND CHANGE THE PENALTIES, AND PROVIDE THAT, FOR THE PURPOSE OF DETERMINING THE DOLLAR AMOUNT OF "CLAIM OR CLAIMS" UNDER THIS SECTION, IF A PERSON HAS MULTIPLE VIOLATIONS OF THIS SECTION AGAINST THE SAME VICTIM, THOSE VIOLATIONS MAY BE TREATED AS AN AGGREGATE AMOUNT OR AS INDIVIDUAL OFFENSES; TO AMEND SECTION 38-55-540, RELATING TO INSURANCE FRAUD AND REPORTING IMMUNITY, CRIMINAL PENALTIES FOR MAKING FALSE STATEMENT OR MISREPRESENTATION OR ASSISTING, ABETTING, SOLICITING, OR CONSPIRING TO DO SO, AND RESTITUTION TO VICTIMS, SO AS TO, AMONG OTHER THINGS, CHANGE CERTAIN PENALTIES, CHANGE AN EXISTING MISDEMEANOR TO A FELONY AND CHANGE THE PENALTIES, CHANGE THE NATURE OF AN EXISTING FELONY AND THE PENALTY, AND PROVIDE THAT, FOR THE PURPOSE OF DETERMINING THE DOLLAR AMOUNT OF THE ECONOMIC ADVANTAGE OR BENEFIT UNDER THIS SECTION, IF A PERSON HAS MULTIPLE VIOLATIONS OF THIS SECTION AGAINST THE SAME VICTIM, THOSE VIOLATIONS MAY BE TREATED AS AN AGGREGATE AMOUNT OR AS INDIVIDUAL OFFENSES; TO AMEND SECTION 38-55-550, RELATING TO INSURANCE FRAUD AND REPORTING IMMUNITY AND CIVIL PENALTIES, SO AS TO CHANGE THESE PENALTIES; TO AMEND THE 1976 CODE BY ADDING SECTION 38-55-555 SO AS TO PROVIDE THAT A CONVICTION FOR VIOLATING ANY SECTION OF TITLE 38 MAY BE USED TO ENHANCE ANY SUBSEQUENT CONVICTION FOR VIOLATING TITLE 38 AS A SECOND OR SUBSEQUENT OFFENSE; AND TO AMEND SECTION 38-55-570, AS AMENDED, RELATING TO INSURANCE FRAUD AND REPORTING IMMUNITY, NOTIFICATION OF THE INSURANCE FRAUD DIVISION OF KNOWLEDGE OR BELIEF OF FALSE STATEMENTS OR MISREPRESENTATIONS, AND INFORMATION WHICH MUST BE RELEASED BY AN INSURER, AUTHORIZED AGENCY, OR OTHERS, SO AS TO PROVIDE THAT A PERSON, INSURER, OR AUTHORIZED AGENCY WHO VIOLATES THE RELEASE-OF-INFORMATION PROVISIONS OF THIS SECTION IS GUILTY OF A MISDEMEANOR, AND PROVIDE FOR A PENALTY.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 38-43-240(B) of the 1976 Code, as amended by Section 215 of Act 184 of 1993, is amended to read:

"(B) A person who violates the provisions of this section is guilty of a: misdemeanor and, upon conviction, must be fined in the discretion of the court or imprisoned not more than two years.

(1) misdemeanor for a first offense if the aggregate amount is less than one thousand dollars. Upon conviction, the person must be imprisoned for a term not to exceed two years, or fined not more than five thousand dollars, or both;

(2) felony for a first offense if the aggregate amount is one thousand dollars or more but less than five thousand dollars. Upon conviction, the person must be imprisoned for a term not to exceed five years, or fined not more than ten thousand dollars, or both;

(3) felony for a first offense if the aggregate amount is five thousand dollars or more, or a felony for a second or subsequent offense regardless of the aggregate amount. Upon conviction, the person must be imprisoned for a term not to exceed ten years and may be fined an amount not to exceed twenty-five thousand dollars."

SECTION 2. Section 38-43-245 of the 1976 Code is amended to read:

"Section 38-43-245. Any A licensed insurance agent who, with the intent to injure, defraud, or deceive any an insurance company or applicant for insurance:

(1) presents or causes to be presented to any an insurance company an application for insurance, knowing that the application contains any false or misleading information or omissions concerning any fact or thing material to the underwriting of the insurance for which the application is submitted, or

(2) assists, abets, solicits, or conspires with another to prepare or make an application for insurance, knowing that the application contains any false or misleading information or omissions concerning any fact or thing material to the underwriting of the insurance for which the applicant application is submitted, is guilty of a (a) felony for a first offense and, upon conviction, must be punished by imprisonment for not more than five years or a fine not to exceed five ten thousand dollars, or both, or (b) a felony for a second or subsequent offense and, upon conviction, must be punished by imprisonment for not more than ten years and may be fined not more than twenty-five thousand dollars."

SECTION 3. Section 38-55-170 of the 1976 Code, as last amended by Section 121 of Act 184 of 1993, is further amended to read:

"Section 38-55-170. A person who knowingly causes to be presented a false claim for payment to an insurer transacting business in this State, to a health maintenance organization transacting business in this State, or to any person, including the State of South Carolina, providing benefits for health care in this State, whether these benefits are administered directly or through a third person, or who knowingly assists, solicits, or conspires with another to present a false claim for payment as described above, is guilty of a:

(1) felony for a first offense if the amount of the claim or claims is five thousand dollars or more, or a felony for a second or subsequent offense regardless of the dollar amount of the claim or claims. Upon conviction, the person must be imprisoned not more than ten years or fined not more than five fifty thousand dollars, or both;

(2) felony for a first offense if the amount of the claim or claims is more than one thousand dollars but less than five thousand dollars. Upon conviction, the person must be fined in the discretion of the court or imprisoned not more than five years or fined not more than twenty-five thousand dollars, or both;

(3) misdemeanor triable in magistrate's court if the amount of the claim is one thousand dollars or less. Upon conviction, the person must be fined or imprisoned not more than is permitted by law without presentment or indictment by the grand jury.

For the purpose of determining the dollar amount of 'claim or claims', if a person has multiple violations of this section against the same victim, those violations may be treated as an aggregate amount or as individual offenses."

SECTION 4. Section 38-55-540 of the 1976 Code, as added by Section 31A, Part II of Act 497 of 1994, is amended to read:

"Section 38-55-540. Any person or insurer who makes a false statement or misrepresentation, and any other person knowingly, with an intent to injure, defraud, or deceive, who assists, abets, solicits, or conspires with such person or insurer to make a false statement or misrepresentation, is guilty of a:

(1) misdemeanor, for a first offense violation, if the amount of the economic advantage or benefit received, or attempted to be received, is less than one thousand dollars. Upon conviction, the person must be punished by a fine not to exceed five hundred thousand dollars, or by imprisonment not to exceed thirty days two years, or by both such fine and imprisonment;

(2) misdemeanor, felony for a first offense violation, if the amount of the economic advantage or benefit received, or attempted to be received, is one thousand dollars or more but less than five thousand dollars. Upon conviction, the person must be punished by a fine not to exceed fifty twenty-five thousand dollars or by imprisonment for a term not to exceed three five years, or by both such fine and imprisonment;

(3) felony, for a first offense violation if the amount of the economic advantage or benefit received, or attempted to be received, is five thousand dollars or more, or a felony for a second or subsequent violation, regardless of the amount of the economic advantage or benefit received, or attempted to be received. Upon conviction, the person must be punished by a fine not to exceed fifty thousand dollars or by imprisonment for a term not to exceed ten years, or by both such fine and imprisonment and may be fined an amount not to exceed fifty thousand dollars.

For the purpose of determining the dollar amount of the economic advantage or benefit, if a person has multiple violations of this section against the same victim, those violations may be treated as an aggregate amount or as individual offenses.

Any person or insurer convicted under this section must be ordered to make full restitution to the victim or victims for any economic advantage or benefit which has been obtained by the person or insurer as a result of that violation."

SECTION 5. Section 38-55-550(A) of the 1976 Code, as added by Section 31A, Part II of Act 497 of 1994, is amended to read:

"(A) In addition to any criminal liability, any person who is found by a court of competent jurisdiction to have violated any provision of this article, including Section 38-55-170, is subject to a civil penalty for each violation as follows:

(1) for a first offense, a fine not to exceed five ten thousand dollars;

(2) for a second offense, a fine of not less than five thousand dollars but not to exceed ten twenty-five thousand dollars;

(3) for a third and subsequent offense, a fine of not less than ten thousand dollars but not to exceed fifteen fifty thousand dollars."

SECTION 6. The 1976 Code is amended by adding:

"Section 38-55-555. A conviction for violating any section of Title 38 may be used to enhance any subsequent conviction for violating Title 38 as a second or subsequent offense."

SECTION 7. Section 38-55-570(B) of the 1976 Code, as added by Section 31A, Part II of Act 497 of 1994, is amended to read:

"(B)(1) Upon request by the Insurance Fraud Division, any person, insurer, or authorized agency shall release to the Insurance Fraud Division any or all information relating to any suspected false statement or misrepresentation including, but not limited to:

(1)(a) insurance policy information relevant to the investigation, including any application for such a polity policy;

(2)(b) policy premium payment records, audits, or other documents which are available;

(3)(c) history of previous claims, payments, fees, commission, service bills, or other documents which are available; and

(4)(d) other information relating to the investigation of the suspected false statement or misrepresentation.

(2) Any person, insurer, or authorized agency who violates the provisions of (B)(1) of this section is guilty of a misdemeanor and, upon conviction, must be punished by a fine not to exceed five hundred dollars or by imprisonment not to exceed thirty days."

SECTION 8. All proceedings pending and all rights and liabilities existing, acquired, or incurred at the time this act takes effect are saved. Except as otherwise provided, the provisions of this act apply prospectively to crimes and offenses committed on or after the effective date of this act.

SECTION 9. This act takes effect upon approval by the Governor.