H*3792 Session 112 (1997-1998)
H*3792(Rat #0329, Act #0291 of 1998) General Bill, By Cato and Walker
Similar(S 755)
A BILL TO AMEND SECTION 38-73-540, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA,
1976, RELATING TO CASUALTY AND SURETY INSURANCE RATES AND ASSIGNED RISK, SO AS
TO PROVIDE, AMONG OTHER THINGS, THAT INSURERS PARTICIPATING IN THE VOLUNTARY
MARKET SHALL PARTICIPATE IN CERTAIN MECHANISMS AND SHALL PAY THEIR ASSESSMENTS
AND THAT THE ASSIGNED RISK PLAN ADMINISTRATOR SHALL MAINTAIN NECESSARY
RATE-MAKING DATA IN ORDER TO PERMIT THE ACTUARIAL DETERMINATION OF RATES AND
RATING PLANS APPROPRIATE FOR THE BUSINESS INSURED THROUGH THE PLAN; TO AMEND
SECTION 38-73-1210, AS AMENDED, RELATING TO PROPERTY, CASUALTY, INLAND MARINE,
AND SURETY INSURANCE RATES, RATING ORGANIZATIONS, AND THE PROVISION THAT
MEMBERS OF A RATING ORGANIZATION ARE NOT REQUIRED TO FILE INDIVIDUALLY, SO AS
TO AUTHORIZE A RATING ORGANIZATION TO COLLECT, COMPILE, AND DISSEMINATE TO
INSURERS COMPILATIONS OF PAST AND CURRENT PREMIUMS OF INSURERS; AND TO PROVIDE
THAT NOTHING CONTAINED IN THIS ACT APPLIES TO SELF-INSURERS.-AMENDED TITLE
04/01/97 House Introduced and read first time HJ-85
04/01/97 House Referred to Committee on Labor, Commerce and
Industry HJ-85
05/15/97 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-6
05/21/97 House Requests for debate-Rep(s). Spearman, Koon,
Carnell, Moody-Lawrence, Kennedy, Stuart,
Rodgers, Kelley, Loftis & Stoddard HJ-26
05/28/97 House Debate adjourned until Tuesday, June 3, 1997 HJ-79
01/14/98 House Debate interrupted HJ-38
01/15/98 House Recommitted to Committee on Labor, Commerce and
Industry HJ-14
02/18/98 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-7
02/19/98 House Requests for debate removed-Rep(s). Kelley,
Kennedy, Moody-Lawrence, Stuart, Carnell,
Stoddard, Rodgers, Koon & Loftis HJ-29
02/19/98 House Amended HJ-28
02/19/98 House Read second time HJ-30
02/19/98 House Unanimous consent for third reading on next
legislative day HJ-30
02/20/98 House Read third time and sent to Senate HJ-3
02/24/98 Senate Introduced and read first time SJ-8
02/24/98 Senate Referred to Committee on Banking and Insurance SJ-8
03/19/98 Senate Committee report: Favorable with amendment
Banking and Insurance SJ-15
03/24/98 Senate Amended SJ-24
03/24/98 Senate Read second time SJ-24
03/24/98 Senate Ordered to third reading with notice of
amendments SJ-24
03/31/98 Senate Read third time and returned to House with
amendments SJ-18
04/02/98 House Concurred in Senate amendment and enrolled HJ-25
04/14/98 Ratified R 329
04/20/98 Signed By Governor
04/20/98 See act for exception to or explanation of
effective date
05/06/98 Copies available
05/06/98 Act No. 291
(A291, R329, H3792)
AN ACT TO AMEND SECTION 38-73-540, AS AMENDED,
CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO
CASUALTY AND SURETY INSURANCE RATES AND ASSIGNED
RISK, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT
INSURERS PARTICIPATING IN THE VOLUNTARY MARKET
SHALL PARTICIPATE IN CERTAIN MECHANISMS AND SHALL
PAY THEIR ASSESSMENTS AND THAT THE ASSIGNED RISK
PLAN ADMINISTRATOR SHALL MAINTAIN NECESSARY
RATE-MAKING DATA IN ORDER TO PERMIT THE ACTUARIAL
DETERMINATION OF RATES AND RATING PLANS
APPROPRIATE FOR THE BUSINESS INSURED THROUGH THE
PLAN; TO AMEND SECTION 38-73-1210, AS AMENDED,
RELATING TO PROPERTY, CASUALTY, INLAND MARINE, AND
SURETY INSURANCE RATES, RATING ORGANIZATIONS, AND
THE PROVISION THAT MEMBERS OF A RATING
ORGANIZATION ARE NOT REQUIRED TO FILE INDIVIDUALLY,
SO AS TO AUTHORIZE A RATING ORGANIZATION TO COLLECT,
COMPILE, AND DISSEMINATE TO INSURERS COMPILATIONS OF
PAST AND CURRENT PREMIUMS OF INSURERS; AND TO
PROVIDE THAT NOTHING CONTAINED IN THIS ACT APPLIES
TO SELF-INSURERS.
Be it enacted by the General Assembly of the State of South Carolina:
Participation in voluntary market; payment offers; etc.
SECTION 1. Section 38-73-540 of the 1976 Code, as last amended by
Act 451 of 1996, is further amended to read:
Section 38-73-540. (A)(1) Assigned risk agreements may be made
among insurers with respect to the equitable apportionment among them
of insurance which may be afforded applicants who are in good faith
entitled to, but who are unable to procure, insurance through ordinary
methods, and the insurers may agree among themselves on the use of
reasonable rate modifications for this insurance. Such residual market
agreement and any mechanism designed to implement such agreement,
and any amendments thereto, must be submitted in writing to the director
or his designee for approval prior to use, together with such additional
information as the director or his designee may reasonably require.
Insurers that participate in the voluntary market shall participate in these
mechanisms and shall pay their assessments, if any.
(2) If, after a hearing, the director or his designee finds that any
activity or practice of insurers participating in the residual market
mechanism is unfair, unreasonable, or otherwise inconsistent with the
provisions of this title, the director or his designee must issue a written
order specifying in what respects such activity or practice is unfair,
unreasonable, or otherwise inconsistent with the provisions of this title
and require the discontinuance of such activity or practice. The director
or his designee may establish, by written order, an assigned risk plan or
mechanism if he finds that insurers have failed to agree pursuant to
subsection (A)(1), or to implement assigned risk agreements if the director
or his designee finds that the existing residual market mechanism is
unfair, unreasonable, or inconsistent with the provisions of this chapter.
(3) The servicing carriers for the workers' compensation assigned
risk pool may be competitively bid as provided for in this subsection. If
the workers' compensation assigned risk pool is competitively bid, then
the director or his designee must appoint a committee or committees of
individuals as he considers qualified to establish standards and procedures
for the consideration and evaluation of bids. Insurers, or other vendors in
conjunction with a licensed workers' compensation insurer, may submit
bids. The committee or committees must evaluate and award contracts
pursuant to the bidding process established by the committee or
committees, subject to the final approval of the director or his designee.
The director may require a bid fee to cover the expenses of implementing
this section.
(4) Notwithstanding any other provision of this section or of this
article, assigned risk pools must accept a policy of workers' compensation
insurance on the basis that it provides coverage to a vendor who provides
logging services to a named insured or on the basis that the policy
provides coverage to an association of these vendors.
(B) Notwithstanding the provisions of subsection (A), no insurer may
act as a servicing carrier for any assigned risk pool for workers'
compensation insurance authorized pursuant to subsection (A) unless such
insurer participates in the voluntary market for workers' compensation
insurance in this State.
(C) It is essential for maintaining the viability of the assigned risk plan
to establish and maintain rates at a level which permits the plan to operate
as a self-funded mechanism. The plan administrator shall maintain
necessary rate making data in order to permit the actuarial determination
of rates and rating plans appropriate for the business insured through the
plan. All assigned carriers shall report their experience on business
written under the plan to the plan administrator in a format prescribed by
the plan administrator. The plan administrator shall monitor rate
adequacy and plan results and shall notify the director of the Department
of Insurance in the event that excessive losses are indicated so as to enable
the director to take corrective action.
Dissemination of past, current premiums
SECTION 2. Section 38-73-1210 of the 1976 Code, as last amended
by Section 783 of Act 181 of 1993, is further amended to read:
"Section 38-73-1210. (A) An insurer may satisfy its obligation to
make required filings by becoming a member of, or a subscriber to, a
licensed rating organization which makes filings and by authorizing the
director or his designee to accept the filings on its behalf. However,
notwithstanding any other provisions of this article, no member or
subscriber may, within twelve months after its membership or
subscribership, adopt any rate approved for use for the rating organization
if the rate is more than the rate in use by the member or subscriber prior
to its membership or subscribership in the rating organization. Further,
notwithstanding the provisions of Sections 38-73-1300, 38-73-1310, and
38-73-1320, no member or subscriber within twelve months after its
membership or subscribership may be granted an upward deviation from
its rate in use when becoming a member or subscriber. However, if a rate
increase for the rating organization is approved within twelve months
after an insurer becomes a member or subscriber, the member or
subscriber may increase its rates by the same percentage of increase
granted the rating organization. Nothing contained in this chapter may be
construed as requiring any insurer to become a member of or a subscriber
to any rating organization.
(B) In addition to other activities not prohibited by this chapter, a
rating organization may collect, compile, and disseminate to insurers
compilations of past and current premiums of insurers."
Act does not apply to self-insurers
SECTION 3. Nothing contained in this act applies to self-insurers.
Time effective
SECTION 4. The provisions of Section 38-73-540(A)(1) and (2), as
amended by and contained in SECTION 1 of this act, take effect for
insurance policies written or renewed on or after January 1, 2000. Section
38-73-540(C), as added by SECTION 1 of this act, and SECTION 2 of
this act take effect no later than December 31, 1999.
Approved the 20th day of April, 1998. |