| Printed Page 2040, Apr. 26 | Printed Page 2060, Apr. 26 |

(C) (B) Member companies of an affiliated group of automobile insurers may not utilize different filed rates for automobile insurance coverages which they are mandated by law to write in accordance with rating plans filed with and approved by the director or his designee. These rating plans may provide for different rates and rating plans among affiliated companies. The director shall approve the rating plans if the rates are not excessive, inadequate, or unfairly discriminatory. For the purpose of this section, an affiliated group of automobile insurers includes a group of automobile insurers under common ownership, management, or control. Each member of a group of affiliated insurers shall not be considered a separate insurer for purposes of compliance with the laws governing the writing, cancellation, or renewal of an automobile insurance policy. Therefore, if one company which is a member of a group of affiliated companies refuses to write, cancels, or refuses to renew a policy but, at the same time, offers to arrange insurance for the applicant or insured with another member of the same group, there has not been a refusal to write, a cancellation, or a refusal to renew by the first company. However, no insurer shall take such action unless it does so on the basis of underwriting guidelines filed with the director. These guidelines shall be treated by the director or his designee as proprietary trade secrets and subject to disclosure only to the director or his designee and the consumer advocate, who shall protect and preserve their confidentiality. The movement of a policy from one company to another within a group of affiliated companies resulting in a different rate for the insured may only occur on the renewal date of the policy. Those automobile insurers designated contracted pursuant to Section 38-77-590(a), for automobile insurance risks written by them through producers designated assigned by the facility governing board pursuant to that section, shall utilize the rates or premium charges by coverage filed and authorized for use by the rating organization licensed by the director or his designee pursuant to Article 11, Chapter 73 of this title, which has the largest number of members or subscribers for automobile insurance rates applicable for policies ceded to the facility. However, those automobile insurers designated contracted pursuant to Section 38-77-590(a) are not required to use those same rates

(D)(C) An automobile insurance policy may be endorsed at any time during the policy period to reflect the correct rate or premium applicable by reason of the factors or conditions described in subsection (A) which existed prior to the commencement of the policy period in which the endorsement is made, regardless of whether the factors or conditions were known or disclosed to the insurer at the commencement of the policy period. However, No policy may be endorsed during a policy period to reflect factors or conditions occurring during that policy period. A policy may be endorsed during a policy period to recognize the addition or deletion of an operator or vehicle.

(E)(D) For purposes of determining the applicable rates rate to be charged an insured, an automobile insurer shall obtain and review an applicant's motor vehicle record."

SECTION 2. Section 38-73-457 of the 1976 Code, as last amended by Act 181 of 1993 is further amended to read:

"Section 38-73-457. Notwithstanding Sections 38-73-920 and 38-73-1210, every automobile insurer and rating organization shall, prior to October 1, 1987, file with the department a base rate one or more rates, which rates are is defined as a rate by coverage calculated solely upon the experience generated by the risk for each class and territory retained by the insurer in its voluntary book of business and which must not include experience generated by risks ceded or assumed from the Reinsurance Facility. established under Section 38-73-1030. An objective standards rate by coverage must also be filed which is twenty-five percent above the base rate previously described for each class and territory. The base rate must be calculated by removing from the rate or premium charge, then in effect for the automobile insurer, that portion of the rate or premium charge attributable to the net gain or loss of the insurer as a result of participation in the operating results of the facility as required by Section 38-77-760. In determining the base rate and objective standards rate, by coverage, the director or his designee, in order that no extra premium revenue is generated by this section, shall require that the insurer's average rate, by coverage, on October 1, 1987, (computed as a weighted average of the base rate and objective standards rate, by coverage, as determined by the Commissioner), not exceed the insurer's average rate, by coverage, prior to October 1, 1987, as determined by the director or his designee. The provisions of the Administrative Procedures Act apply to any appeal of a base rate or objective standards rate brought thereunder

After July 1, 1988, No rate or premium charge, exclusive of the facility recoupment charge approved or established pursuant to Section 38-77-610 may be approved for an insurer of automobile insurance unless that rate or premium charge is calculated in accordance with this section and meets the other applicable requirements of this title pertaining to the approval of rates or premium charges.

The consumer advocate, upon request to the director or his designee, must be provided by him with a copy of any base rate rates filed with the director or his designee along with any supporting materials, documents, or studies utilized to support the filed base rate. In addition, every automobile insurer and rating organization shall promptly respond to requests for information and data requested by the consumer advocate relating to the filed base rate. The consumer advocate must be afforded an opportunity for a hearing before the director or his designee on any filed base rate before it takes effect that he believes does not meet the requirements of this section. After January 1, 1996, but not before that date, final decisions of the director or his designee regarding this hearing are subject to the provisions of the State Administrative Procedures Act and may be appealed to the Administrative Law Judge Division as provided by law.

Effective January 1, 1996, the director or his designee shall disallow the further use of the objective standards rate previously filed in accordance

Upon the effective date of this section, nothing herein shall be construed to require a rating organization, its members or subscribers, or an individual insurer to refile final rates or premium charges previously approved by the director or his designee. Members or subscribers of a rating organization or individual insurers are authorized to continue to use rates approved before the effective date of this section. Such continued use shall not require review or other action pursuant to the Administrative Procedures Act."

SECTION 3. Section 38-73-735 of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"Section 38-73-735. In addition to risk and territorial classification plans promulgated or approved under Section 38-73-730, the department may promulgate plans to afford credits or discounts to automobile insureds, or he may approve the credit or discount plans filed with him by insurers of automobile insurance. No automobile insurance credit or discount plan may be promulgated or approved by the director or his designee unless:

(1) the criteria for determining eligibility for credits or discounts under the plan are objective, clear, and unequivocal;

(2) the criteria are based upon factually or statistically supported data; and

(3) the credits or discounts provided under the plan will be afforded by the insurer on a nondiscriminatory basis to all insureds who are eligible therefor and not ceded to the facility. If an insurance credit or discount plan is given to an insured pursuant to this section, the policy may be ceded to the Reinsurance Facility in accordance with the facility's plan of operation."

SECTION 4. The 1976 Code is amended by adding:

"Section 38-73-780. (A) The South Carolina Reinsurance Facility Board of Governors annually shall develop and file a liability loss component as defined in Section 38-73-1400(1) for private passenger automobile insurance coverages based on the total experience of all insurers in this State including risks ceded to the facility. The Facility Board of Governors shall contract with independent actuarial services to

The South Carolina Reinsurance Facility Board of Governors annually shall develop and file a physical damage loss component for private passenger automobile insurance coverages based on the total experience of all insurers in this State including risks ceded to the facility. The Facility Board of Governors shall contract with independent actuarial services to develop the loss component. To expedite the implementation of this section, before January 1, 1997, the filing shall not be subject to the Administrative Procedures Act. Due consideration must be given to actual loss experience within this State for the most recent three-year period for which such information is available; to prospective loss experience within this State; and to all other relevant factors within this State; provided, however, that countrywide loss experience and other countrywide data may be considered only where credible South Carolina experience or data is not available.

(B) The loss component developed under this section is applicable to the risk and territorial classification plan promulgated and approved by the director or his designee.

(C) The state rate and statistical division shall annually review the loss components to determine if it is proper and supported by statistical evidence and make appropriate filings for approval of rates as required under this chapter."

SECTION 5. Section 38-73-1420 of the 1976 Code, as added by Act 148 of 1989 and as last amended by Section 783 of Act 181 of 1993, is further amended to read:

"Section 38-73-1420. After June 30, 1989, the Board of Governors of the South Carolina Reinsurance Facility shall file an expense component as defined under Section 38-73-1400(2) for private passenger automobile insurance rate or premium charges which must accurately reflect the actual expenses of the South Carolina Reinsurance Facility and a zero percent profit and contingency provision for use with after the rating organization with the largest number of members or subscribers has filed a the pure loss component for private passenger automobile insurance coverage

SECTION 6. Section 38-73-1425 of the 1976 Code, as added by Act 113 of 1991, and as last amended by Act 181 of 1993 is further amended to read:

"Section 38-73-1425. Except as provided for in subsections (A), (B), and (C), the final rate or premium charge for a private passenger automobile insurance risk ceded to the facility which does not qualify for the safe driver discount in Section 38-73-760(e) is the final rate or premium charge required by Section 38-73-1420 38-77-540 or the final rate or premium charge approved for use by the insurer, whichever is greater.

(A) Insurers having company filed rates which are less than the uniform rate shall implement the following transition program for ceded risks insured by that insurer on January 1, 1996, and having no merit rating points.

Twenty percent of the current differential of the lower company filed rate shall be added on renewals effective on or after January 1, 1996, and forty percent of the current differential of the lower company filed rate and the projected state uniform rate shall be added on renewals effective on or after January 1, 1997, and sixty percent of the current differential of the lower company filed rate and the projected state uniform rate shall be added on renewals effective on or after January 1, 1998, and eighty percent of the current differential of the lower company filed rate and the projected state uniform rate shall be added on renewals effective on or after January 1, 1999, and on renewals effective on or after January 1, 2000, such risks shall be ceded at the final rate or premium charge required by Section 38-77-540. However, effective January 1, 1997, physical damage coverages on renewals shall be ceded at the facility physical damage rate as defined in Chapter 77, for insurers using

(C) For the one-year period beginning January 1, 1996, the rate for private passenger automobile physical damage coverages ceded to the facility on new and renewal risks having one or more merit rating plan points shall be the facility physical damage rate, as defined in Section 38-77-30(16).

SECTION 7. Section 38-77-10 of the 1976 Code, as amended by Act 181 of 1993, is further amended to read:

"Section 38-77-10. In order to effect a complete reform of automobile insurance and insurance practices in South Carolina, the purposes of this chapter are:

(1) to provide that every automobile insurance risk which is insurable on the basis of the criteria established in this chapter is entitled to automobile insurance from the automobile insurer of the applicant's choice on the basis of the same rates, policy forms, claims service, and other services provided by the insurer to all other applicants or insureds falling within the same classification of risk and territory under the applicable risk and territorial classification plan promulgated by the department so long as all these applicants or insureds have satisfied the same objective standards as established in Sections 38-77-280 and 38-73-455;

(2) to provide a Reinsurance Facility reinsurance facility for automobile insurers in which all automobile insurers must participate to the end that the operating expenses and net profit or loss of the facility may be shared equitably by all the insurers transacting automobile insurance business in this State giving appropriate consideration to degrees of utilization of the facility by the several insurers of automobile insurance and to provide prohibitions or penalties in respect to excessive utilization of the facility.; and

(4) To provide medical, surgical, funeral, and disability insurance benefits without regard to fault to be offered under automobile insurance policies that provide bodily injury and property damage liability insurance, or other security, for motor vehicles registered in this State."

SECTION 8. Section 38-77-280 of the 1976 Code, as last amended by Section 810 of Act 181 of 1993, is further amended to read:

"Section 38-77-280. (A) Notwithstanding Sections 38-77-110 and 38-77-920, and except as provided in subsection (B), all automobile insurers, including those insurance companies writing private passenger physical damage coverages only, shall may make collision coverage and either comprehensive or fire, theft, and combined additional coverage available to an insured or qualified applicant who requests the coverage. Automobile insurers contracted pursuant to Section 38-77-590 for risks written by them through producers assigned by the facility governing board pursuant to that section shall offer and make available collision coverage and comprehensive or fire, theft, and combined additional coverage to an insured or qualified applicant who requests the coverage.

If collision coverage is offered or provided, it must have a mandatory deductible of two hundred fifty dollars, but an insured or qualified applicant, at his option, may select an additional deductible in appropriate increments up to one thousand dollars.

If comprehensive coverage or fire, theft, and combined additional coverages are offered or provided, it must have a mandatory deductible of two hundred fifty dollars, but an insured, at his option, may select an additional deductible in appropriate increments up to one thousand dollars. This deductible does not apply to auto safety glass. It is an unfair trade practice, as described in Sections 38-57-30 and 38-57-40, for an insurer or an agent to sell collision insurance, comprehensive coverage, or fire, theft, and combined additional coverages unless the insured is notified at the time of application of the savings which may be realized if the applicant or the insured selects a higher deductible. This notice is required only at the time of the initial sale and must be in a form approved by the director or his designee. An insurer may offer insureds lower deductibles at the insurer's option.

(B) Notwithstanding subsection (A) and Sections 38-77-110 and 38-77-920, automobile insurers may refuse to write automobile physical

All insurers subject to the provisions of this section writing single interest collision coverage shall provide an applicant for the insurance at the time of his application a notice separate and apart from any other form used in the application. The notice must be signed by the applicant evidencing his acknowledgement of having read the notice. The notice must contain the following language printed in bold face type:

`NOTICE: THE INSURANCE COVERAGE YOU ARE HEREBY PURCHASING IS SINGLE INTEREST COLLISION COVERAGE. THE AMOUNT OF INSURANCE DECREASES AS YOU PAY OFF THE AMOUNT OF YOUR INDEBTEDNESS. YOU MAY NOT RECEIVE ANY INSURANCE PROCEEDS OVER AND ABOVE THE AMOUNT OF THE OUTSTANDING BALANCE ON YOUR LOAN.'
(C) Notwithstanding Section 38-77-110, automobile physical damage coverage in an automobile insurance policy may be canceled at any time during the policy period by reason of the factors or conditions described in Section 38-73-455(A) or Section 38-77-280(B) the uniform merit rating plan which existed before the commencement of the policy period and which were not disclosed to the insurer at the commencement of the policy period.

(D) No policy of insurance which provides automobile physical damage coverage only may be ceded to the facility.

| Printed Page 2040, Apr. 26 | Printed Page 2060, Apr. 26 |

This web page was last updated on Monday, June 29, 2009 at 2:10 P.M.