South Carolina General Assembly
116th Session, 2005-2006

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S. 639

STATUS INFORMATION

General Bill
Sponsors: Senator Thomas
Document Path: l:\council\bills\ms\7349ahb05.doc

Introduced in the Senate on March 22, 2005
Currently residing in the Senate

Summary: Insurance Department

HISTORY OF LEGISLATIVE ACTIONS

     Date      Body   Action Description with journal page number
-------------------------------------------------------------------------------
   3/22/2005  Senate  Introduced and read first time SJ-2
   3/22/2005  Senate  Referred to Committee on Banking and Insurance SJ-2
    2/8/2006  Senate  Committee report: Favorable with amendment Banking and 
                        Insurance SJ-10
    2/9/2006          Scrivener's error corrected

View the latest legislative information at the LPITS web site

VERSIONS OF THIS BILL

3/22/2005
2/8/2006
2/9/2006

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

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COMMITTEE REPORT

February 8, 2006

S. 639

Introduced by Senator Thomas

S. Printed 2/8/06--S.    [SEC 2/9/06 4:02 PM]

Read the first time March 22, 2005.

            

THE COMMITTEE ON BANKING AND INSURANCE

To whom was referred a Bill (S. 639) to amend Section 38-1-20, as amended, Code of Laws of South Carolina, 1976, relating to definitions for insurance purposes, so as to define the terms, etc., respectfully

REPORT:

That they have duly and carefully considered the same and recommend that the same do pass with amendment:

Amend the bill, as and if amended, by striking on page 3, lines 8-13 and inserting:

/        (C)    The penalties in items (1) and (2) may be assessed only after a contested case hearing or if the violator does not request a contested case hearing, the penalties in items (1) and (2) may be assessed following the execution of a consent order by the parties involved after thirty days following notice by the director or his designee of the intent to assess a penalty pursuant to this section."    /.

Amend the bill further, as and if amended, by striking on page 3, lines 21 and 22 that read / or by one or more of his duly authorized assistants or agents. All Notwithstanding another provision of law, all contested case/

and inserting:

/    or by one or more of his duly authorized assistants or agents. All contested case        /.

Amend the bill further, as and if amended, by striking on page 4, lines 4 and 5 that read / "Section 38-3-210.    Any Notwithstanding another provision of law, a final order or decision made, issued, or executed by the    /

and inserting:

/    "Section 38-3-210.    Any A final order or decision made, issued, or executed by the    /.

Renumber sections to conform.

Amend title to conform.

DAVID L. THOMAS for Committee.

            

STATEMENT OF ESTIMATED FISCAL IMPACT

ESTIMATED FISCAL IMPACT ON GENERAL FUND EXPENDITURES:

$0 (No additional expenditures or savings are expected)

ESTIMATED FISCAL IMPACT ON FEDERAL & OTHER FUND EXPENDITURES:

$0 (No additional expenditures or savings are expected)

EXPLANATION OF IMPACT:

The Department of Insurance and the Administrative Law Judge Division reports this bill will have no impact on the General Fund of the State, or on federal and/or other funds.

Approved By:

Don Addy

Office of State Budget

A BILL

TO AMEND SECTION 38-1-20, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS FOR INSURANCE PURPOSES, SO AS TO DEFINE THE TERMS "APPEAL", "HEARING", "PUBLIC HEARING", "PROCEEDING", "NOTICE", AND "REGULATION HEARING"; TO AMEND SECTION 38-2-10, RELATING TO ADMINISTRATIVE PENALTIES, SO AS TO PROVIDE THAT THE PENALTIES MAY BE ASSESSED ONLY AFTER A CONTESTED CASE HEARING AND TO REQUIRE NOTICE TO A VIOLATOR WHEN A CONTESTED CASE HEARING IS NOT REQUESTED BEFORE A PENALTY IS ASSESSED; TO AMEND SECTION 38-3-150, RELATING TO HEARINGS CONDUCTED BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE OR HIS AUTHORIZED AGENTS, SO AS TO CLARIFY THAT THE HEARINGS ARE CONTESTED CASE HEARINGS; TO AMEND SECTION 38-3-170, RELATING TO NOTICE OF THE HEARINGS, SO AS TO CLARIFY THAT THE HEARINGS ARE CONTESTED CASE HEARINGS AND TO PROVIDE THAT THEY ARE TO BE CONDUCTED BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE OR HIS DESIGNEE IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER 23, TITLE 1; TO AMEND SECTION 38-3-210, RELATING TO APPEALS ORDERS OF THE DIRECTOR OF THE DEPARTMENT OF INSURANCE, SO AS TO PROVIDE THAT APPEALS ARE TO THE ADMINISTRATIVE LAW COURT IN ACCORDANCE WITH ITS RULES OF PROCEDURE; TO AMEND SECTION 38-5-160, RELATING TO THE PROCEDURE FOR THE DIRECTOR OF THE DEPARTMENT OF INSURANCE TO APPLY FOR AN INJUNCTION, SO AS TO PROVIDE THAT THE DIRECTOR MAY APPLY TO THE ADMINISTRATIVE LAW COURT RATHER THAN THE CIRCUIT COURT FOR AN INJUNCTION; AND TO REPEAL SECTION 38-3-180, RELATING TO THE DIRECTOR OF THE DEPARTMENT OF INSURANCE'S ABILITY TO SUMMON WITNESSES AND PUNISH FOR CONTEMPT.

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

SECTION    1.    Section 38-1-20 of the 1976 Code, as last amended by Act 290 of 2004, is further amended by adding appropriately numbered items to read:

"(    )    'Appeal' means an appeal from a final decision of the director or his designee after a contested case hearing that must be made in accordance with the rules of procedure of the Administrative Law Court.

(    )    'Hearing', 'public hearing', or 'proceeding' means a contested case hearing as defined in Section 1-23-310(3).

(    )    'Notice' means notice of a hearing as defined in Section 1-23-320.

(    )    'Regulation hearing' means a hearing in accordance with Section 1-23-110.

SECTION    2.    Section 38-2-10 of the 1976 Code is amended to read:

"Section 38-2-10.    (A)    Unless otherwise specifically provided by law, the following administrative penalties apply for each violation of the insurance laws of this State:

(1)    If the violator is an insurer or a health maintenance organization licensed in this State, the director or his designee shall (a) fine the violator in an amount not to exceed fifteen thousand dollars, or (b) suspend or revoke the violator's authority to do business in this State, or both. If the violation is wilful, the director or his designee shall (a) fine the violator in an amount not to exceed thirty thousand dollars, or (b) suspend or revoke the violator's authority to do business in this State, or both.

(2)    If the violator is a person, other than an insurer or a health maintenance organization, licensed by the director or his designee in this State, the director or his designee shall (a) fine the person in an amount not to exceed two thousand five hundred dollars, or (b) suspend or revoke the license of the person, or both. If the violation is wilful, the director or his designee shall (a) fine the person in an amount not to exceed five thousand dollars, or (b) suspend or revoke the license of the person, or both.

(B)    The penalties in items (1) and (2) are in addition to any criminal penalties provided by law or any other remedies provided by law. The administrative proceedings in items (1) and (2) do not preclude civil or criminal proceedings from taking place before, during, or after the administrative proceeding.

(C)    The penalties in items (1) and (2) may be assessed only after a contested case hearing or if the violator does not request a contested case hearing, the penalties in items (1) and (2) may be assessed only after thirty days following notice by the director or his designee of the intent to assess a penalty pursuant to this section."

SECTION    3.    Section 38-3-150 of the 1976 Code is amended to read:

"Section 38-3-150.    All examinations or investigations provided by this title, unless otherwise provided by any other another insurance laws law of this State, may be conducted by the director or by one or more of his duly authorized assistants or agents. All Notwithstanding another provision of law, all contested case hearings provided by this title must be held by the director or by one of his duly authorized assistants or agents when authorized to do so in writing by the director. However, in any a contested case hearing concerning the adjustment of insurance rates, the director or his designee may conduct the hearing."

SECTION    4.    Section 38-3-170 of the 1976 Code is amended to read:

"Section 38-3-170.    All contested case hearings, unless otherwise specifically provided, must be held at the time and place designated in a written notice given by the director or his designee to the person cited to appear at least thirty days before the designated date. The notice shall state the subject of the inquiry and specific charges, if any. It is sufficient to give notice either by delivering it to the person or by depositing it in the United States mail, postage prepaid, addressed to the last known address of the person and registered with return receipt requested by the director or his designee in accordance with the provisions of Chapter 23, Title 1."

SECTION    5.    Section 38-3-210 of the 1976 Code is amended to read:

"Section 38-3-210.    Any Notwithstanding another provision of law, a final order or decision made, issued, or executed by the director or his designee after a contested case hearing is subject to judicial review by the Administrative Law Court in accordance with the its appellate procedures of the South Carolina Administrative Law Judge Division, as provided by law rules of procedure. An appeal from an order or decision under this section must be heard in the Administrative Law Judge Division, as provided by law. The administrative law judge or judges may not, under any terms, order a stay of enforcement of any an order of the director or his designee to make good an impairment of capital or surplus or a deficiency in the amount of admitted assets."

SECTION    6.    Section 38-5-160 of the 1976 Code is amended to read:

"Section 38-5-160.    If he considers it necessary, the director or his designee may apply to a judge of the circuit court the Administrative Law Court to issue an injunction restraining a domestic insurer whose certificate of authority has been suspended, in whole or in part, from proceeding further with its business. The administrative law judge may immediately issue the injunction and, upon notice and after a full hearing of the matter, may:

(a) (1)    dissolve or modify the injunction or make it permanent, ;

(b) (2)    make all orders and judgments necessary in the matter, ; and

(c) (3)    appoint agents or a receiver to take possession of the property and effects of the insurer and to settle its affairs, subject to any rules and orders the court prescribes."

SECTION 7.    Section 38-3-180 of the 1976 Code is repealed.

SECTION 8.    The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.

SECTION 9.    If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

SECTION    10.    This act takes effect upon approval by the Governor.

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