Bill 3714

                    Current Status

Bill Number:               3714
Ratification Number:       423
Act Number                 379
Introducing Body:          House
Subject:                   Bond requirements reduced

(A379, R423, H3714)

AN ACT TO AMEND SECTION 38-45-20, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE REQUIREMENTS FOR A RESIDENT TO BE LICENSED AS AN INSURANCE BROKER; AND TO AMEND SECTION 38-45-30, AS AMENDED, RELATING TO THE REQUIREMENTS FOR A NONRESIDENT TO BE LICENSED AS AN INSURANCE BROKER, SO AS TO REDUCE THE BOND REQUIREMENTS FROM FIFTY TO TEN THOUSAND DOLLARS.

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

Bond requirements reduced

SECTION 1. Section 38-45-20 of the 1976 Code, as amended by Act 52 of 1989, is further amended to read:

"Section 38-45-20. A resident may be licensed as an insurance broker by the commissioner if the following requirements are met:

(1) the resident has been a licensed insurance agent for the same lines of insurance for which he proposes to apply as a broker of this State for at least two years;

(2) the payment of an annual license fee of one hundred dollars which is fully earned when received, not refundable;

(3) the filing of a bond with the commissioner in form approved by the Attorney General in favor of the State of South Carolina in the sum of ten thousand dollars which has been executed by a corporate surety licensed to transact surety insurance in this State and personally countersigned by a licensed resident agent of the surety. The bond must be conditioned to pay a person insured or seeking insurance through the broker who sustains loss as a result of:

(a) the broker's violation of or failure to comply with any insurance law or regulation of this State;

(b) the broker's failure to transmit properly a payment received by him, cash or credit, for transmission to an insurer or an insured; or

(c) an act of fraud committed by the broker in connection with an insurance transaction. In lieu of a bond, the broker may file with the commissioner certificates of deposit in the sum of ten thousand dollars of building and loan associations or federal savings and loan associations located within the State in which deposits are guaranteed by the Federal Savings and Loan Insurance Corporation, not to exceed the amount of insurance, or of banks located within the State in which deposits are guaranteed by the Federal Deposit Insurance Corporation, not to exceed the amount of insurance. An aggrieved person may institute an action in the county of his residence against the broker or his surety or both to recover on the bond or against the broker to recover from the certificates of deposit and a copy of the summons and complaint in the action must be served on the commissioner, who is not required to be made a party to the action;

(4) the payment to the commissioner, within thirty days after March thirty-first, June thirtieth, September thirtieth, and December thirty-first of each year, of a broker's premium tax of four percent upon the premiums approved for policies of insurers not licensed in this State. Credit may be given for tax on policies canceled flat within forty-five days of the date of approval as long as the broker certifies to the commissioner that the business was placed in good faith and the policy was canceled at the request of the insured."

Bond requirements reduced

SECTION 2. Section 38-45-30 of the 1976 Code, as amended by Act 52 of 1989, is further amended to read:

"Section 38-45-30. A nonresident may be licensed as an insurance broker by the commissioner if the following requirements are met:

(1) filing an application on a form prescribed by the commissioner;

(2) filing an affidavit stating that he will not during the period of the license place, directly or indirectly, insurance on a risk located in this State except through licensed agents of insurers licensed to do business in this State;

(3) filing an affidavit stating that he is a licensed broker in another state;

(4) the payment of an annual license fee of one hundred dollars which is fully earned when received, not refundable;

(5) the filing of a bond with the commissioner in form approved by the Attorney General in favor of the State of South Carolina in the sum of ten thousand dollars which has been executed by a corporate surety licensed to transact surety insurance in this State and personally countersigned by a licensed resident agent of the surety. The bond must be conditioned to pay any person insured or seeking insurance through the broker who sustains loss as a result of:

(a) the broker's violation of or failure to comply with any insurance law or regulation of this State;

(b) the broker's failure to transmit properly a payment received by him, cash or credit, for transmission to an insurer or an insured; or

(c) an act of fraud committed by the broker in connection with an insurance transaction.

In lieu of a bond, the broker may file with the commissioner certificates of deposit in the sum of ten thousand dollars of building and loan associations or federal savings and loan associations located within the State in which deposits are guaranteed by the Federal Savings and Loan Insurance Corporation, not to exceed the amount of insurance, or of banks located within the State in which deposits are guaranteed by the Federal Deposit Insurance Corporation, not to exceed the amount of insurance. An aggrieved person may institute an action in the county of his residence against the broker or his surety or both to recover on the bond or against the broker to recover from the certificates of deposit and a copy of the summons and complaint in the action must be served on the commissioner, who is not required to be made a party to the action;

(6) the payment to the commissioner, within thirty days after March thirty-first, June thirtieth, September thirtieth, and December thirty-first of each year, of a broker's premium tax of four percent upon the premiums approved for policies of insurers not licensed in this State. Credit may be given for tax on policies canceled flat within forty-five days of the date of approval as long as the broker certifies to the commissioner that the business was placed in good faith and the policy was canceled at the request of the insured."

Time effective

SECTION 3. This act takes effect upon approval by the Governor.

Approved the 19th day of March, 1990.