1976 South Carolina Code of Laws
Unannotated
Updated through the end of the 2001 Session

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Title 38 - Insurance

CHAPTER 61.

INSURANCE CONTRACTS GENERALLY

SECTION 38-61-10. Contracts which are considered made in State.

All contracts of insurance on property, lives, or interests in this State are considered to be made in the State and all contracts of insurance the applications for which are taken within the State are considered to have been made within this State and are subject to the laws of this State.

SECTION 38-61-10 is not unconstitutional in providing that contracts of insurance on interests which are located in South Carolina are considered to be made in South Carolina and are subject to the laws of South Carolina, even where the contracts are executed outside of the state and between parties who are not citizens of the state, since insuring property, lives and interest in South Carolina constitutes a significant contact with the state. Sangamo Weston, Inc. v. National Sur. Corp. (S.C. 1992) 307 S.C. 143, 414 S.E.2d 127.

2. In general

Parties cannot contract contrary to the public policy of the state due to former Code 1962 Section 37-141, thus any part of a liability policy from an insurance company to an automobile dealer inconsistent with former Code 1962 Section 46-150.16 is void and the pertinent provisions of the statute prevail as much as if expressly incorporated in the policy (decided under former law). Security General Ins. Co. v. Bill Vernon Chevrolet, Inc. (D.C.S.C. 1967) 263 F.Supp. 74, affirmed 384 F.2d 1000.

South Carolina substantive law determined whether plaintiff is entitled to collect uninsured motorist benefits from insurer for accident occurring in Georgia but involving van licensed in South Carolina. Sanders v. Doe, 1993, 831 F.Supp. 886.

Former Code 1952 Section 37-141 was cited in Schafer v. Maryland Cas. Co., 1954, 123 F.Supp. 873.

Law of Virginia, where the automobile insurance policy was issued and the insured resided, rather than the law of South Carolina, where the accident occurred, applied to question whether the policy was in effect at the time of death. Gordon v. Colonial Ins. Co. of California (S.C.App. 2000) 342 S.C. 152, 536 S.E.2d 376, certiorari denied.

A contractual dispute between a car rental company and a renter resulting from an accident was governed by New York law even though the accident took place in another state where the agreement was executed in New York, by a resident of New York, with a corporation doing business in New York, the car was registered in New York, and the car rental company delivered the car to the renter in New York. Unisun Ins. Co. v. Hertz Rental Corp. (S.C.App. 1993) 312 S.C. 549, 436 S.E.2d 182, rehearing denied.

SECTION 38-61-10 was applicable to insurance contracts which were at issue in certain litigation, even though all of the contracts were executed outside of the state and between parties who were not citizens of the state, where the property which was the subject of the litigation was located within South Carolina; thus, under South Carolina conflict law, South Carolina substantive law governed the dispute. Sangamo Weston, Inc. v. National Sur. Corp. (S.C. 1992) 307 S.C. 143, 414 S.E.2d 127.

Public policy is clearly to effect that all contracts of insurance on subjects in Code 1962 Section 37-141 shall be deemed made in, and subject to insurance laws of this State (decided under former law). Johnston v. Commercial Travelers Mut. Acc. Ass'n of America (S.C. 1963) 242 S.C. 387, 131 S.E.2d 91.

Former Code 1962 Section 37-141 made all insurance contracts on property, lives and interest located in this State subject to Insurance Code of this State and was clearly attempt on part of legislature to regulate accident insurance (decided under former law). Johnston v. Commercial Travelers Mut. Acc. Ass'n of America (S.C. 1963) 242 S.C. 387, 131 S.E.2d 91.

3. Choice of law

North Carolina law applicable, under laws of both North Carolina and South Carolina [former Section 38-9-20], as to validity of insurance policy of insured who lived in North Carolina and made application for policy of life insurance in North Carolina with North Carolina insurance company (decided under former law). Ratliff v. Coastal Plain Life Ins. Co. (S.C. 1978) 270 S.C. 373, 242 S.E.2d 424.

SECTION 38-61-20. Approval of forms by director or designee; notification; withdrawal of approval; exemptions; optional accident or health riders.

(A) It is unlawful for an insurer doing business in this State to issue or sell in this State a 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 provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory; or

(3) is 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.

(B) Within thirty days after the filing of a form requiring approval, the director or his designee shall notify the organization filing the form of the approval or disapproval of the form, and the reason if the form is disapproved. The director or his designee, in his discretion, may extend for up to an additional sixty days the period within which he shall approve or disapprove the form. A form received, but neither approved nor disapproved by the director or his designee, is deemed approved at the expiration of the thirty days if the period is not extended, or at the expiration of the extended period, if any. An organization may not use a form deemed approved pursuant to the default provision of this section until the organization has filed with the director or his designee a written notice of its intent to use the form. The notice must be filed in the office of the director at least ten days before the organization uses the form.

(C) At any time after having given written approval, and after an opportunity for a hearing for which at least thirty days' written notice has been given, the director or his designee may withdraw approval if he finds that the form:

(1) does not meet the requirements of law;

(2) contains provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory; or

(3) is solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading.

(D) The director or his designee may exempt from the requirements of subsection (A) as long as he considers proper any type of insurance policy, contract, or certificate to which in his opinion subsection (A) practically must not be applied, or the filing and approval of which, in his opinion, is not necessary for the protection of the public. However, each insurer at least annually shall list the types and form numbers of all policies it issues or sells in this State which the director or his designee has exempted from being filed and approved, and an officer of the insurer shall certify that all of these policies comply fully with the laws of this State. If a policy, contract, or certificate is certified to be in compliance with the laws of this State and the director or his designee finds it violates a law of this State, he may disqualify that insurer from certifying policies, contracts, or certificates allowed under this subsection.

(E) Nothing in this chapter precludes the issuance of a life insurance contract that includes an optional accident, health, or accident and health insurance rider. However, the optional accident, health, or accident and health insurance rider must be filed with and approved by the director or his designee pursuant to Section 38-71-310, 38-71-720, or 38-71-740, as appropriate, and comply with all applicable sections of Chapter 71 of this title and, in addition, in the case of long term care insurance, Chapter 72 of this title.

SECTION 38-61-25. Approval procedures to issue or sell exempt commercial policies.

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 38-61-30. Promulgation of standards for readability of certain contracts and policies.

The department shall promulgate regulations which establish minimum standards for the readability of each homeowners, dwelling fire, automobile, accident and health, life, and all other forms of personal insurance, excluding commercial, fleet vehicle, and group insurance, which must be complied with by all insurers authorized to do business in this State. The standards shall include, but are not limited to, standards on an index of policy provisions, general organization of text, text readability, type size, type style, type spacing, and general appearance of the insurance contract.

SECTION 38-61-40. Compliance with standards for readability of certain contracts and policies; withdrawal of approval or certification on noncomplying documents.

All insurers licensed to transact insurance business in this State shall comply with the standards prescribed by regulation of the department. The director or his designee is empowered to withdraw approval or certification on all existing policies of commonly purchased insurance that do not comply with Section 38-61-30.

SECTION 38-61-50. Standards for readability of certain contracts and policies; advice of other agencies concerning standards.

The director or his designee shall consult with and call upon the expertise of other state agencies, as may be necessary, to determine the standards to be promulgated and, after promulgation, the effectiveness of these standards. This consultation shall include, but is not limited to, the State Department of Education or its successor entity.





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