Journal of the Senate
of the First Session of the 111th General Assembly
of the State of South Carolina
being the Regular Session Beginning Tuesday, January 10, 1995

Page Finder Index

| Printed Page 290, Jan. 18 | Printed Page 310, Jan. 20 |


Printed Page 300 . . . . . Wednesday, January 18, 1995

WASHINGTON, McKINLEY
Education
Finance
General
Medical Affairs
Rules

WILLIAMS, MARSHALL B.
Banking and Insurance
Ethics
Fish, Game and Forestry
Interstate Cooperation, Chairman
Judiciary, Chairman
Rules
Transportation

WILSON, JOE
Corrections and Penology
Education
Ethics
General
Invitations
Judiciary
Transportation

At the point at which Senator LAND's name was called during the committee selection process, the following occurred:

Senator LEVENTIS asked unanimous consent to make a motion that he be granted leave in Senator LAND's absence to make committee selections on Senator LAND's behalf consistent with the selections Senator LAND had made last week.

Parliamentary Inquiry

Senator PEELER made a Parliamentary Inquiry as to whether or not Senator LAND had provided written authorization for the Senator from Sumter to make Senator LAND's committee selections.


Printed Page 301 . . . . . Wednesday, January 18, 1995

Senators McCONNELL and STILWELL addressed the Parliamentary Inquiry.

Senator LEVENTIS restated his motion and asked unanimous consent to make a motion that he be granted leave in Senator LAND's absence to make committee selections on Senator LAND's behalf consistent with the selections Senator LAND had made last week.

There was no objection.

Point of Order

Senator RICHTER raised a Point of Order that the written authorization for a Senator to make written selections for an absent Senator under the provisions of Item 4, Rule 19, is a limitation as described in the last sentence of Item 4 and would, therefore, prohibit the selection of committees by Senator LAND inasmuch as he was absent and had not authorized another Senator in writing to make selections in his behalf.

Senators J. VERNE SMITH, McCONNELL, LEATHERMAN and RICHTER spoke on the Point of Order.

The PRESIDENT overruled the Point of Order.

Senator LEVENTIS proceeded to make committee selections for Senator LAND.

MOTION ADOPTED

On motion of Senator RICHTER, with unanimous consent, the Senate stood adjourned out of respect to the memory of Ms. Dorothy S. Jackson of John's Island, S.C.

ADJOURNMENT

At 1:06 P.M., on motion of Senator WILLIAMS, the Senate adjourned to meet tomorrow at 11:00 A.M. under the provisions of Rule 1 for the purpose of taking up local matters and uncontested matters which have previously received unanimous consent to be taken up and, when the Senate adjourns on Thursday, it will stand adjourned to reconvene at 11:00 A.M. on Friday, January 20, 1995, under the provisions of Rule 1 for the purpose of taking up local matters and uncontested matters which


Printed Page 302 . . . . . Wednesday, January 18, 1995

have previously received unanimous consent to be taken up; and that when the Senate adjourns on Friday, that it stand adjourned to reconvene at 12:00 Noon on Tuesday, January 24, 1995.

* * *


Printed Page 303 . . . . . Thursday, January 19, 1995

Thursday, January 19, 1995

(Local Session)

Indicates Matter Stricken
Indicates New Matter

The Senate assembled at 11:00 A.M., the hour to which it stood adjourned and was called to order by the ACTING PRESIDENT, Senator GIESE.

ORDERED ENROLLED FOR RATIFICATION

The following Bill was read the third time and having received three readings in both Houses, it was ordered that the title be changed to that of an Act and enrolled for Ratification:

H. 3218 -- Rep. Askins: A BILL TO AUTHORIZE THE FORMER BOARD OF DIRECTORS OF A DISSOLVED NONPROFIT CORPORATION OR ELEEMOSYNARY ORGANIZATION LOCATED IN FLORENCE COUNTY TO DISTRIBUTE THE REMAINING ASSETS OF THE ORGANIZATION; AND TO DELAY THE EFFECTIVE DATE BY TWO YEARS FOR CERTAIN PROVISIONS OF THIS ACT.

(By prior motion of Senator McGILL)

THIRD READING BILL

The following Bill was read the third time and ordered sent to the House of Representatives:

S. 381 -- Senators McConnell, Passailaigue, Richter, Reese, Washington, Ford and Rose: A BILL TO AMEND ACT 340 OF 1967, AS AMENDED, RELATING TO THE CHARLESTON COUNTY SCHOOL DISTRICT, SO AS TO REVISE THE MANNER IN WHICH CERTAIN VACANCIES ARE FILLED.

(By prior motion of Senator McCONNELL)

MOTION ADOPTED

On motion of Senator LANDER, with unanimous consent, the Senate stood adjourned out of respect to the memory of Mr. William R. "Brother" Lominick of Newberry, S.C.


Printed Page 304 . . . . . Thursday, January 19, 1995

ADJOURNMENT

At 11:15 A.M., on motion of Senator JACKSON, the Senate adjourned to meet tomorrow at 11:00 A.M., under the provisions of Rule 1 for the purpose of taking up local matters and uncontested matters which have previously received unanimous consent to be taken up.

* * *


Printed Page 305 . . . . . Friday, January 20, 1995

Friday, January 20, 1995

(Local Session)

Indicates Matter Stricken
Indicates New Matter

The Senate assembled at 11:00 A.M., the hour to which it stood adjourned and was called to order by the ACTING PRESIDENT, Senator JACKSON.

REPORT OF

THE JOINT INSURANCE STUDY COMMITTEE

JANUARY, 1995

TO THE HONORABLE DAVID M. BEASLEY

GOVERNOR OF SOUTH CAROLINA

THE HONORABLE PRESIDING OFFICERS

AND MEMBERS OF THE GENERAL ASSEMBLY

The Joint Insurance Study Committee, created in 1989 by Act 37, repealing Act 1143 of 1966 and Act 612 of 1971, submits herewith a report of its recent studies, recommendations and activities.

SENATE MEMBERS HOUSE MEMBERS
/s/Edward E. Saleeby, Chm./s/Joseph T. McElveen, Jr.
/s/John C. Land, III /s/Richard M. Quinn, Jr.
/s/Glenn F. McConnell /s/John L. Scott
/s/C. Tyrone Courtney
/s/Luke A. Rankin

GOVERNOR'S APPOINTEESEX-OFFICIO MEMBER
/s/Charles M. Potok /s/John G. Richards
/s/Dr. S. Travis Pritchett Chief Insurance Commissioner
/s/Ronald D. Scheetz
/s/Frank S. Smith, Jr. STAFF
/s/Roland C. Young Mary Lou Price

The Joint Insurance Study Committee was created by Act 37, 1989, which amended Act 612, 1971 and Act 1161, 1974, to make a continuous study and investigation of all facets of the insurance industry and related laws including, but not limited to, the study of revisions to this state's insurance laws, and to the review of medical, automobile and property insurance premium rates so as to recommend appropriate statutory or regulatory controls. This study committee combined the Joint Legislative Automobile Liability Insurance Study Committee and the Insurance Law


Printed Page 306 . . . . . Friday, January 20, 1995

Study Committee and provides for its members, powers, duties, staff and expenses to be similar to that of the aforementioned study committees.

1994 COMMITTEE LEGISLATION ENACTED
SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT, S.541, Act.339
In 1991, the general Assembly enacted a package of reforms designed to improve the small group health insurance marketplace in South Carolina. These reforms included (1) a requirement that, if health insurance coverage is issued to a small group (25 employees or less), all members of the group would be covered; (2) rating restrictions on the amount a small group's premium can increase each year; (3) restrictions on cancellation of renewal of a small group; and (4) portability requirements. At the time these reforms were considered, they were described as the first small step toward overall reform for the small group health insurance market, with the next step requiring that the small groups be guaranteed access to health insurance. The Small Employer Health Insurance Availability Act builds on these earlier reforms and provides that next step, by requiring that small group health insurers guarantee issue two health insurance plans to small employers.

The Senate passed version of the bill provides:

1. That all small group insurers offer a "basic" and "standard" health insurance plan to any small employer that desires to purchase it;

2. That any small employer, that is, an employer with 50 or less employees, is entitled to be issued a "basic" or "standard" plan;

3. That small employer insurers must elect to participate in this guarantee issue environment as either a risk-assuming insurer or as a reinsuring insurer;

4. That those small employer insurers which participate as reinsuring insurers may reinsure individual risks or entire small groups written on either the basic or the standard plan in a program known as the South Carolina Small Employer Insurer Reinsurance Program;

5. That the benefit levels for the basic and standard plans be developed and recommended by the Governor's Committee on Basic Health Services; and

6. That its effectiveness be reviewed and reported to the Commissioner at least every three years.

During the interim, Governor Campbell appointed an Ad Hoc Group, which was composed of representatives from most every interested organization to formulate amendments to S.541 which, in turn, would


Printed Page 307 . . . . . Friday, January 20, 1995

strengthen the original bill. The Ad Hoc Committee proposed three basic changes:

1. Health insurers in the small group market can no longer refuse to issue a standard policy to any small group. The basic policy will not be offered as the Committee discovered that no one was buying it in other states where two policies were offered. This guarantees availability of health insurance coverage to any small group wanting to purchase it, regardless of their health risk.

2. Small groups can join together in large pools to negotiate directly with health insurers. This will allow small groups to form large purchasing pools, and give them the flexibility to gain the competitive advantages of large groups.

3. Claim experience, health status, duration of coverage, and industry are eliminated as rating factors. Limits are placed on the remaining rating factors so that the range of the possible highest and lowest premiums for a given benefit plan in a class of business will be no more than 5.1. These rating reforms will spread losses due to high cost persons across a large number of insured persons, give small employers much more stability in annual premium changes, and encourage insurers to compete based on efficiency and ability to manage costs instead of refusing to insure people in need of health care.
This legislation passed the General Assembly in April of 1994 and was the most important health insurance legislation passed during the two year session.

RECOVERY OF PREMIUMS OWED, S.969, H.4491, Act 368

This legislation, requested by the Independent Insurance Agents of South Carolina, amends Section 38-27-520 (Recovery of Premiums Owed) in the company liquidation provisions so that agents would not be responsible for payment of unpaid, unearned, uncollected premium in the case of an insurance company liquidation. There is concern among the agents and their association that the NAIC Rehabilitation and Liquidation model made agents liable to liquidators for unearned, uncollected premium in the event of a company insolvency. The South Carolina General Assembly adopted the basic provisions of the NAIC model. In July of 1989, IIAA and the Independent Insurance Agents of Missouri won a Federal lawsuit on this issue; the Iowa National case. The court order declared that a liquidator cannot demand unearned, uncollected premiums from an agent because it violates the United States Constitution. Several states (Connecticut, Florida, Iowa and South Dakota) have amended the


Printed Page 308 . . . . . Friday, January 20, 1995

NAIC model as amended in this bill, without adversely impacting the NAIC insolvency certification process, according to IIAA.

SOUTH CAROLINA PROPERTY AND CASUALTY GUARANTY ASSN -PLACE OF VENUE FOR LAWSUITS - S.970, H.4496, Act 366

This legislation, proposed by the South Carolina Property and Casualty Insurance Guaranty Association, deals with legal expenses caused when suits against the Association are filed in states other than South Carolina. The Association recommended that the code be amended to provide that, with respect to the power to sue or be sued, any action brought directly against the Association must be brought against the Association in South Carolina as a condition precedent to recovery directly against the Association.

UNINCORPORATED MEMBER CREDIT, S.971, H.4495, Act 370

This legislation was specifically intended to amend Lloyd's of London's provision in South Carolina credit for reinsurance law. It will enable the Lloyd's market to continue to be fully available to South Carolina domestic insurers as the leading international market for reinsurance, including, but not limited to catastrophe reinsurance. It is important to the members of the South Carolina Coastal Insurance Pool as Lloyd's is the world's leading market for catastrophe reinsurance against such perils as windstorm and earthquake.

The legislation also amends the law to enable Lloyd's to admit corporate names. Lloyd's is not an insurance company, but a marketplace where approximately 20,000 natural persons called "Names" trade each for their own account and not one for another. In the past only natural persons have been permitted to become Names. Corporate Names will be admitted and trade alongside natural Names. This amendment will be a benefit to South Carolina preserving Lloyd's status in South Carolina as an accredited reinsurer. If not adopted Lloyd's status in South Carolina could be jeopardized. If Lloyd's loses its trading privileges as an accredited reinsurer, domestic insurers that seek to cede reinsurance to Lloyd's will be inhibited from doing so, and in turn there will likely be an additional cost to the more than thirty South Carolina domestic insurers to obtain reinsurance from the Lloyd's market. Domestics will suffer because most of their major competitors are licensed in South Carolina, but domiciled in other states. This law has been enacted thus far in California, Louisiana, Nevada, New Jersey, Pennsylvania, Texas and Washington, D.C.


Printed Page 309 . . . . . Friday, January 20, 1995

DEFINITION OF "OCEAN MARINE INSURANCE" - S.973, H.4498, Act 367

The amendment which defines "Ocean Marine Insurance", proposed by the South Carolina Property and Casualty Guaranty Association, would allow the Association to effectively handle ocean marine claims as they arise with any liquidation.

CUT-OFF DATE FOR FILING OF CLAIMS AGAINST ANY LIQUIDATION AFFECTING THE SOUTH CAROLINA PROPERTY AND CASUALTY GUARANTY ASSOCIATION - S.974, H.4494, Act 591

The legislation provides a definite cut-off of eighteen months after the declaration of insolvency for filing of all claims against any liquidation that affects the South Carolina Guaranty Fund and thereby will help streamline the claim handling for the Association.

MATERIAL TRANSACTIONS MODEL ACT - S.975, H.4492, Act 372

This Act, an Insurance Department recommendation, is part of compliance of the latest accreditation standards by the NAIC. The Act strengthens the Commissioner's regulatory authority by requiring domestic insurers to notify the Commissioner of material acquisitions or dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements. It strengthens the control over domestics as they deal with consumers.

CREDIT LIFE INSURANCE - S.976, H.4493, Act 363

This legislation, another recommendation of the South Carolina Insurance Department in conjunction with the South Carolina Department of Consumer Affairs, increases the minimum charge of $2.00 to $3.00, and decreases the rate charged for individual credit life from $.75 to $.65. South Carolina's current credit life insurance premium of $.75 is fourth highest in the nation. Our sister state, Georgia's premium is $.45, and our other sister state North Carolina lowers theirs $.05 every year. In 1993 their premium was $.65, and this will be lowered in 1994 to $.60.

NOT PASSED COMMITTEE LEGISLATION
WORKERS' COMPENSATION OMNIBUS BILL, S.540

This massive piece of legislation epitomized the efforts of a broad-based coalition including the Workers' Compensation Task Force, representing the State's leading employers, the AFL-CIO, the South Carolina Chamber of Commerce, the Carolina Alliance for Fair Employment, the National


Printed Page 310 . . . . . Friday, January 20, 1995

Federation of Independent Businesses, the South Carolina Trial Lawyers Association, the South Carolina Self-Insurers Association, the South Carolina Hospital Association, The Governor's Advisory Committee for Improvements of the Workers' Compensation Laws, the South Carolina Homebuilders Association, the Carolinas Branch Associated General Contractors, the South Carolina Merchants Self- Insurance Trust Fund, the South Carolina Automobile Dealers Self-Insurance Trust Fund, and the South Carolina Workers' Compensation Commission.

| Printed Page 290, Jan. 18 | Printed Page 310, Jan. 20 |

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