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TO AMEND SECTION 38-1-20, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS USED IN TITLE 38 PERTAINING TO INSURANCE, SO AS TO ADD THE DEFINITIONS FOR "EXEMPT COMMERCIAL POLICIES"; TO AMEND SECTION 38-31-100, AS AMENDED, RELATING TO THE ORDER IN WHICH CLAIMANTS MUST EXHAUST THEIR RIGHTS UNDER INSURANCE POLICIES WHEN A CLAIMANT HAS COVERAGE UNDER MORE THAN ONE POLICY, SO AS TO ESTABLISH LIMITS ON THE AMOUNT A CLAIMANT MAY COLLECT FROM THE SOUTH CAROLINA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION IF THE CLAIM IS AGAINST AN INSOLVENT INSURER; TO AMEND SECTION 38-61-20, AS AMENDED, RELATING TO REQUIRING AN INSURER TO HAVE ALL POLICIES, CONTRACTS, AND CERTIFICATES APPROVED BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE, SO AS TO PROVIDE THAT THIS PARTICULAR REQUIREMENT DOES NOT APPLY TO EXEMPT COMMERCIAL POLICIES; BY ADDING SECTION 38-61-25 SO AS TO PROVIDE CERTAIN FILING REQUIREMENTS FOR EXEMPT COMMERCIAL POLICIES, CONTRACTS, AND CERTIFICATES; TO AMEND SECTION 38-73-10, AS AMENDED, RELATING TO THE PURPOSE OF THE CHAPTER REGULATING PROPERTY, CASUALTY, INLAND MARINE, AND SURETY RATES AND RATE-MAKING ORGANIZATIONS, SO AS TO INCLUDE IN THESE PURPOSES PROVIDING FOR REASONABLE COMPETITION AMONG COMMERCIAL PROPERTY AND CASUALTY INSURERS OF INSUREDS MAKING LARGE INSURANCE PURCHASES; TO AMEND SECTIONS 38-73-340 AND 38-73-520, BOTH AS AMENDED, AND BOTH RELATING TO REQUIRING INSURERS TO FILE RATES AND RATING SCHEDULES AND PLANS, SO AS TO EXEMPT LARGE COMMERCIAL POLICIES FROM THIS REQUIREMENT; TO AMEND SECTION 38-73-910, AS AMENDED, RELATING TO PROCEDURES FOR OBTAINING A RATE INCREASE, SO AS TO EXEMPT COMMERCIAL POLICIES FROM THESE PROCEDURES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 38-1-20 of the 1976 Code is amended by adding at the end:
"(40) 'Exempt commercial policies' means policies for large commercial insureds where the total combined premiums to be paid for these policies for one insured is greater than fifty thousand dollars annually and as may be further provided for in regulation or in bulletins issued by the director. Exempt commercial policies include all property and casualty coverages except for commercial property and insurance related to credit transactions written through financial institutions."
SECTION 2. Section 38-31-100 of the 1976 Code is amended by adding at the end:
"(6) A person having a claim against an insolvent insurer under any provision in an insurance policy is limited to ten million dollars aggregate payout from the association.
(7) A person having a net worth of greater than twenty-five million dollars and having a claim against an insolvent insurer under any provision in an insurance policy may not make a claim against the association."
SECTION 3. Section 38-61-20(A) of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:
"(A) It is unlawful for an insurer doing business in this State to issue or sell in this State any policy, contract, or certificate until it has been filed with and approved by the director or his designee. The director or his designee may disapprove the form if it (1) does not meet the requirements of law, (2) contains any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. However, this subsection does not apply to surety contracts or fidelity bonds, except as required in Section 38-15-10, or to insurance contracts, riders, or endorsements prepared to meet special, unusual, peculiar, or extraordinary conditions applying to an individual risk or exempt commercial policies."
SECTION 4. The 1976 Code is amended by adding:
"Section 38-61-25. It is unlawful for an insurer doing business in this State to issue or sell in this State any exempt commercial policy, contract, or certificate until it has been filed with and approved by the director or his designee. A filing that is filed with the department is deemed to have met the requirements of this chapter unless it: (1) does not meet the requirements of law, (2) contains any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. If a filing is not in compliance with this chapter, the director or his designee shall issue an order specifying in detail the provisions with which the insurer has not complied and stating the time within which the insurer has to comply with the order before the filing is no longer valid. An order issued by the director pursuant to this section must be on a prospective basis only and may not affect a contract issued or made before the effective date of the order. However, this section does not apply to surety contracts or fidelity bonds, except as required in Section 38-15-10, or to insurance contracts, riders, or endorsements prepared to meet special, unusual, peculiar, or extraordinary conditions applying to an individual risk."
SECTION 5. Section 38-73-10(a) of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:
"(a) The purposes of this chapter are to:
(1) promote the public welfare by regulating insurance rates to the end that they may not be excessive, inadequate, or unfairly discriminatory and to authorize and regulate cooperative action among insurers in rate making and in other matters within the scope of this chapter;
(2) empower the director or his designee to fix, establish, and promulgate any uniform statistical plan necessary or appropriate to obtain all automobile insurance loss and loss adjustment expense experience, other expense experience, and all other appropriate statistical and financial data from insurers, rating organizations, and advisory organizations engaged in an automobile insurance business in this State to the end that the department shall promulgate the risk classification and territorial plans to be used by all insurers of automobile insurance in this State and in order that the director or his designee may test the risk and territorial differentials previously established against the most recently available loss experience;
(3) provide that investment income accruing to automobile insurers is taken into consideration in the approval of rates or premium charges and in the determination of any net loss incurred by the South Carolina Reinsurance Facility and to make provision for the securing by the department of all necessary or appropriate financial data for purposes of ascertaining and determining the investment income and the profits from realized and unrealized capital gains of each automobile insurer doing business in this State.;
(4) provide for reasonable competition for commercial property and casualty insurers of insureds who make large purchases of insurance.
Nothing in this chapter is intended to prohibit or discourage reasonable competition."
SECTION 6. Section 38-73-340 of the 1976 Code, as amended by Act 181 of 1993, is further amended to read:
"Section 38-73-340. Every insurer shall file with the department, except as to inland marine risks which by general custom of the business are not written according to manual rates or rating plans and except as to large commercial policies, every manual, minimum, or class rate, rating schedule, or rating plan, and every other rating rule and every modification of any of the foregoing these which it proposes to use. Every filing shall state the proposed effective date thereof and shall indicate the character and extent of coverage contemplated. Specific inland marine rates on risks specially rated, made by a rating organization, must be filed with the department."
SECTION 7. Section 38-73-520 of the 1976 Code, as amended by Act 181 of 1993, is further amended to read:
"Section 38-73-520. Every insurer shall file with the department, except so as to exempt large commercial policies, every manual of classifications, rules, and rates, every rating plan, and every modification of any of the foregoing these which it proposes to use. Every filing shall state the proposed effective date thereof and shall indicate the character and extent of the coverage contemplated."
SECTION 8. Section 38-73-910 of the 1976 Code, as last amended by Act 4 of 1999, is further amended by adding at the end:
"(G) This section does not apply to insurers who write only exempt commercial policies. Exempt commercial policies are not subject to prior approval of the department."
SECTION 9. This act takes effect upon approval by the Governor.
This web page was last updated on Friday, June 26, 2009 at 3:05 P.M.