S*740 Session 105 (1983-1984)
S*0740(Rat #0465, Act #0400 of 1984) General Bill, By J.C. Lindsay
Similar(H 2975)
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Chapter 50
to Title 38, so as to regulate motor club services and to provide penalties
for violations.
01/31/84 Senate Introduced and read first time SJ-514
01/31/84 Senate Referred to Committee on Banking and Insurance SJ-51
03/01/84 Senate Committee report: Favorable Banking and Insurance
SJ-858
03/13/84 Senate Amended SJ-984
03/13/84 Senate Read second time SJ-986
03/13/84 Senate Ordered to third reading with notice of
amendments SJ-986
03/22/84 Senate Read third time and sent to House SJ-1140
03/23/84 House Introduced and read first time HJ-1842
03/23/84 House Referred to Committee on Judiciary HJ-1842
05/02/84 House Recalled from Committee on Judiciary HJ-2830
05/09/84 House Read second time HJ-2965
05/10/84 House Read third time and enrolled HJ-3024
05/22/84 Ratified R 465
05/23/84 Signed By Governor
05/23/84 Effective date 09/20/84
05/23/84 Act No. 400
05/23/84 Act takes effect 120 days after approval by Governor
06/14/84 Copies available
(A400, R465, S740)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 50
TO TITLE 38, SO AS TO REGULATE MOTOR CLUB SERVICES AND TO PROVIDE PENALTIES FOR
VIOLATIONS.
Be it enacted by the General Assembly of the State of South Carolina:
Motor Club Services Act
SECTION 1. The 1976 Code is amended by adding to Title 38:
"CHAPTER 50
Motor Club Services Act
Section 38-50-10. This chapter may be cited as the 'Motor Club Services Act'.
Section 38-50-20. As used in this chapter:
(a) 'Club' means any person presently or hereafter engaged in selling,
furnishing, or making available to members, either as principal or agent, motor
club services.
(b) 'Club representative' means any individual in this State designated by the
club who acts or aids in any manner in the solicitation, negotiation, or renewal
of service contracts. This definition does not include any individual performing
only work of a clerical nature in the office of a club or providing an
application to a potential club member.
(c) 'Commissioner' means the Administrator of the Department of Consumer
Affairs.
(d) 'Insurance service' means any act by a club to sell or furnish to a member
insurance benefits including, but not limited to, accidental injury and death
benefits when such insurance is issued only by an insurance company duly
authorized to do business in this State.
(e) 'Motor club service' means the rendering, furnishing or procuring of, or
reimbursement for any of the following: towing service, bail and arrest bond
service, emergency road service, claim adjustment service, legal service, theft
service, map service, emergency travel expense service, community traffic safety
service, license service, merchandise and discount service, travel, touring, and
travel information service, guaranteed hotel/motel rates service, new car pricing
service, financial service, check cashing service, personal property registration
service, credit card service, insurance service as defined herein, and buying and
selling service to any member of the club.
(f) 'Service contract' means any written agreement whereby any club, for a
consideration, promises to render, furnish, or procure for any member a motor
club service.
Section 38-50-30. A club may not render or agree to render a motor club service
without first depositing and thereafter continuously maintaining the amount of
fifty thousand dollars in cash or securities approved by the Commissioner, or in
lieu thereof, a bond in the amount of fifty thousand dollars executed by a surety
company authorized by the laws of this State to transact business within this
State. The bond must be executed to the State of South Carolina and must be for
the use of the State and for any members who may have a cause of action against
the club.
Section 38-50-40. Such security must:
(a) Be for the protection, use, and benefit of all persons whose applications
for membership in a motor club have been accepted by the clubs or its
representatives.
(b) Assure that the club shall faithfully furnish and render to members any and
all of the motor club services furnished, sold, or offered for sale by it.
(c) Assure that the club shall comply with and abide by all the provisions of
this chapter and all the regulations of the Commissioner prescribed, published,
adopted, and promulgated under authority of this chapter.
(d) Assure that the club shall pay all fines and penalties that may become due
to the State from the club and by virtue of the provisions of this chapter.
Section 38-50-50. If any member is defrauded or aggrieved by any misconduct,
wrongful act, misrepresentation, failure of the club to render its services or
fulfill its contractual obligations, the member may bring suit on such security
in his or her own name, but the aggregate liability of the surety for all suits
may, in no event, exceed the amount of the bond.
Section 38-50-60. The name of the club must be submitted to the Commissioner
with its application for a certificate of authority and the Commissioner must
approve any names so submitted unless the proposed name is deceptively similar
to that of any other club licensed or qualified to do business in this State or
unless the name is likely to confuse or mislead the public.
Section 38-50-70. (a) No club may offer, issue, or renew a motor club service
contract in this State without first obtaining from the Commissioner a
certificate of authority so to act. A certificate of authority must be issued
by the Commissioner to the club upon submission of items (1) through (6) of this
section in a form satisfactory to the Commissioner. The applicant must submit:
(1) A formal application for the certificate in such form and detail as the
Commissioner requires, executed under oath by its president and secretary or two
other principal officers of the club or other persons as the Commissioner may
require.
(2) A certified copy of its charter or articles of incorporation and its
by-laws, if any.
(3) If a corporation, a certified copy of the certificate of authority or good
standing certificate from the Secretary of State.
(4) A copy of its most recent financial statement prepared in accordance with
generally accepted accounting principles and certified by two principal officers
of the applicant or in the event the applicant is not a corporation, other
persons as the Commissioner may require.
(5) An explanation of its plan of doing business and copies of the following:
(i) Its application for membership;
(ii) The proposed membership certificate or identification card and any
proposed addendum thereto;
(iii) Any individual insurance policy or group certificate to be offered; and
(iv) Any service contract to be issued.
(6) Any other relevant information requested by the Commissioner.
(b) No certificate of authority may be issued by the Commissioner until the
club has paid an initial certificate of authority fee of five hundred dollars.
Section 38-50-80. Certificates of authority issued hereunder are permanent
unless revoked or suspended as provided in this chapter. No certificate of
authority may be renewed by the Commissioner until the club has:
(a) Paid an annual certificate of authority renewal fee of five hundred dollars
on or before October thirty-first.
(b) Filed a copy of its most recent financial statement prepared in accordance
with generally accepted accounting principles and certified by two principal
officers of the club or in the event the applicant is not a corporation, other
persons as the Commissioner may require.
Section 38-50-90. (a) Serving of process in any action, rule, order, or legal
proceeding may be made on any club not domiciled in this State having a
certificate of authority to transact business in this State by mailing two copies
of the process to the Commissioner by registered or certified mail. One copy,
certified by the Commissioner or his deputy as having been served upon him, is
considered sufficient evidence, and service upon the Commissioner or his deputy
as attorney is considered valid service upon the club.
(b) When legal process is served upon the Commissioner as attorney for a club
not domiciled in this State, he must forthwith forward one of the duplicate
copies of the process served on him to the club. The Commissioner must give
immediate notice of process to the club by telephone. As a condition of valid
and effective service and of the duty of the Commissioner in the premises, the
plaintiff in each process must pay to the Commissioner, at the time of service,
the sum of ten dollars, which the plaintiff may recover as taxable costs in the
case if he prevails in the suit. The Commissioner must keep a record of all
processes, which must show the day and hour of service and where and by whom
served.
Section 38-50-100. The Commissioner may order the club to cease and desist, or
may revoke, suspend, or refuse to continue the certificate of authority of a
club, whenever after a hearing and for cause shown, he determines that the club:
(a) Has violated or failed to comply with any provisions of this chapter or
regulations promulgated under authority of this chapter.
(b) Has obtained a certificate of authority through wilful misrepresentation
or fraud.
(c) Has engaged in fraudulent or deceptive practices.
(d) Has wilfully, orally or in writing, misrepresented the terms, benefits,
privileges, and provisions of any service contract issued or to be issued by it
or any other club.
(e) Is unable to meet its obligations as determined by generally accepted
accounting principles.
(f) Has, after notice to the club of an alleged occurrence of any of items (a)
through (e), of this section, refused without just cause to submit relevant
information to the Commissioner with respect to the motor club services within
this State.
Section 38-50-110. No service contract may be issued or delivered in this State
unless it contains the following:
(a) The exact corporation or other name of the club.
(b) The exact location of its home office or any business office to which
inquiries may be made.
(c) The motor club services contracted for.
(d) The territory wherein motor club services contracted for are to be
rendered.
(e) The duration of such service contract.
Section 38-50-120. (a) No individual may act as a club representative in this
State without the club having registered the individual with the Commissioner
within thirty days of the date of designation as a club representative.
Registration as a club representative must be made to the Commissioner upon forms
prescribed and furnished by him. The registration must be permanent, subject to
revocation or suspension as provided in this chapter.
(b) The club representative shall furnish information concerning his identity,
business address, personal history, business experience, and other information
that the Commissioner deems pertinent and germane. A club representative must:
(1) Be at least eighteen years of age.
(2) Be trustworthy persons of good repute.
(3) Have received training from the club or have otherwise qualified by
experience in the business of clubs rendering motor club services.
(c) Any wilful misrepresentation of any information required to be disclosed
in any registration is subject to the sanctions provided for in this chapter.
(d) Upon termination of any club representative's authority to act on behalf
of the club, the club must notify the Commissioner in writing within thirty days
of termination.
(e) The fee to be paid to the Commissioner at the time registration is made and
annually on or before April thirtieth for the renewal, must be ten dollars.
Section 38-50-130. Upon satisfactory evidence that a club representative has
violated or failed to comply with any provision of this chapter or regulation
promulgated under authority of this chapter, the Commissioner may issue an order
requiring the club representative to cease and desist from engaging in such
violation, or may revoke or suspend the club representative's authority.
Section 38-50-140. No club may make reference to its certificate of authority
or approval from the Commissioner or the State in advertising, circular,
contract, or a membership card; nor may it advertise or describe its services in
a manner as would lead the public to believe that it is an insurance company,
association, or exchange.
Section 38-50-150. The offering of motor club services is subject solely and
exclusively to the provisions of this chapter and the offering of services by any
authorized club is not considered transacting business as an insurance company,
association, or exchange, except as otherwise provided herein.
Section 38-50-160. The Commissioner shall administer this chapter and may
promulgate regulations, subject to the Administrative Procedures Act, necessary
to carry out its provisions.
Section 38-50-170. Any person who violates the provisions of this chapter is
guilty of a misdemeanor, and upon conviction, must be punished by a fine of not
more than five hundred dollars, or by imprisonment for not more than three
months, or by both.
Section 38-50-180. A club representative is not required to be a licensed
insurance agent in connection with the sale of accidental injury and death
benefits or other insurance covering a motor club service, which are issued in
conjunction with and as a part of a motor club service contract but must be
licensed to sell any other type of insurance.
Section 38-50-190. Nothing contained in this chapter prohibits a club from
offering services which augment or are incidental to any service offered by the
club or any other services which are of assistance and are beneficial to members
and are feasible for the club to render.
Section 38-50-200. Any person who brings a civil suit for damages suffered
because of any violation of any provision of this chapter, or any regulation
promulgated by its authority, and who prevails in such suit, may be awarded
reasonable attorneys fees."
Time effective
SECTION 2. This act shall take effect one hundred twenty days after approval by
the Governor. |