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

S. 1045 -- Senators Courson, Hayes, Martin, Gregory, Passailaigue and Rose: A BILL TO AMEND SECTION 23-6-100, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE HIGHWAY PATROL DIVISION AND THE STATE POLICE DIVISION WITHIN THE DEPARTMENT OF PUBLIC SAFETY AND THE REQUIREMENT FOR FILING, AMONG OTHER THINGS, A DESCRIPTION AND ILLUSTRATION OF THE OFFICIAL HIGHWAY PATROL UNIFORM, SO AS TO DELETE THE REQUIREMENT THAT THESE FILINGS BE MADE WITH THE SECRETARY OF STATE.

The following Bill was taken up.

S. 511 -- Senators Greg Smith and Williams: A BILL TO AMEND SECTION 50-13-1750, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO GAME FISH BREEDER'S LICENSES, SO AS TO PROVIDE THAT LICENSED INDIVIDUALS MAY SELL, OFFER FOR SALE, AND TRANSPORT CULTURED GAME FISH TO STOCK OR RESTOCK PRIVATE PONDS; TO PROVIDE THAT CULTURED GAME FISH FOUR INCHES OR LARGER MUST BE PRODUCED FROM SOUTH CAROLINA RAISED BROOD STOCK; AND TO PROVIDE A DEFINITION FOR CULTURED GAME FISH.

Rep. TUCKER moved to recommit the Bill to the Committee on Agriculture, Natural Resources and Environmental Affairs, which was agreed to.

The following Bill was taken up, read the second time, and ordered to a third reading:

H. 4552 -- Reps. Barber, Wright, McKay, Rudnick, Baxley and Neilson: A BILL TO AMEND SECTION 40-29-85, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ENERGY EFFICIENCY LABELING ON MANUFACTURED HOMES, SO AS TO PROVIDE FOR A PERMANENT LABEL AND A CONSUMER NOTICE; AND TO AMEND SECTION 12-36-2110, AS AMENDED,

Rep. BARBER explained the Bill.

On motion of Rep. BARBER, with unanimous consent, it was ordered that H. 4552 be read the third time tomorrow.

The following Bill was taken up.

S. 687 -- Senator Bryan: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 29 TO TITLE 6 SO AS TO PROVIDE FOR CONSOLIDATION OF EXISTING PLANNING ENABLING LEGISLATION; TO UPDATE EXISTING LEGISLATIVE ACTS; TO REPEAL CHAPTER 27 OF TITLE 4 RELATING TO THE COUNTY PLANNING ACT; TO REPEAL CHAPTER 23 OF TITLE 5 RELATING TO ZONING AND PLANNING BY MUNICIPALITIES; TO REPEAL SECTIONS 6-7-310 THROUGH 6-7-1110 RELATING TO PLANNING BY LOCAL GOVERNMENTS; AND TO REPEAL ACT 129 OF 1963 RELATING TO THE GREENVILLE COUNTY PLANNING COMMISSION.

Rep. WILKINS proposed the following Amendment No. 1 (Doc Name L:\council\legis\amend\PT\1147DW.94), which was adopted.

Amend the bill, as and if amended, Page 8, beginning on Line 2, by striking /and political subdivisions/.

Amend title to conform.

Rep. WILKINS explained the amendment.

The amendment was then adopted.

The following Bill was taken up.

S. 541 -- Senators Saleeby, Land, McConnell, Courtney, Rankin and Rose: A BILL TO ENACT THE "SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT", INCLUDING AMENDING SECTIONS 38-71-920, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS FOR SMALL GROUP HEALTH INSURANCE PURPOSES, SO AS TO MAKE CERTAIN CHANGES TO THE DEFINITIONS OF "SMALL EMPLOYER" AND "HEALTH INSURANCE PLAN" OR "PLAN", AND TO PROVIDE A DEFINITION FOR "LATE ENROLLEE"; 38-71-730, AS AMENDED, RELATING TO REQUIREMENTS FOR GROUP ACCIDENT, GROUP HEALTH, AND GROUP ACCIDENT AND HEALTH INSURANCE POLICIES, SO AS TO DELETE CERTAIN LANGUAGE AND PROVISIONS, INCLUDING THE PROVISION THAT, FOR GROUPS OF TEN OR LESS PERSONS, EVIDENCE OF INDIVIDUAL INSURABILITY MAY BE REQUIRED FOR PERSONS FIRST BECOMING ELIGIBLE FOR INSURANCE AFTER THE EFFECTIVE DATE OF THE POLICY, AND ADD CERTAIN PROVISIONS; 38-70-10, RELATING TO DEFINITIONS FOR THE PROVISIONS OF LAW ON UTILIZATION REVIEWS AND PRIVATE REVIEW AGENTS IN CONNECTION WITH THE ALLOCATION OF HEALTH CARE RESOURCES AND SERVICES FOR A PATIENT OR GROUP OF PATIENTS, SO AS TO DELETE CERTAIN LANGUAGE AND PROVISIONS FROM THE DEFINITION OF "PRIVATE REVIEW AGENT"; 38-70-15, RELATING TO THE APPLICABILITY OF CHAPTER 70 OF TITLE 38 (UTILIZATION REVIEWS AND PRIVATE REVIEW AGENTS), SO AS TO PROVIDE THAT THE CHAPTER APPLIES TO INSURANCE COMPANIES, ADMINISTRATORS OF INSURANCE BENEFIT PLANS, AND HEALTH MAINTENANCE ORGANIZATIONS LICENSED AND REGULATED BY THE DEPARTMENT OF INSURANCE, AND PROVIDE THAT SUCH INSURANCE COMPANIES, ADMINISTRATORS, AND HEALTH MAINTENANCE ORGANIZATIONS ARE EXEMPT FROM CERTAIN PROVISIONS OF LAW; AND 38-71-940, RELATING TO SMALL GROUP HEALTH INSURANCE AND PREMIUM RATES, RATING FACTORS, AND THE PROHIBITION ON THE INVOLUNTARY

The Labor, Commerce, and Industry Committee proposed the following Amendment No. 1 (Doc Name L:\council\legis\amend\BBM\10954JM.94), which was adopted.

Amend the bill, as and if amended, by striking SECTION 2 in its entirety, beginning at line 25 on page 2 and ending at line 34 on page 2, and inserting:

/SECTION 2. The purpose and intent of this act is to promote the availability of health insurance coverage to small employers, excluding individual health insurance plans, regardless of their health status or claims experience, to provide for development of "basic" and "standard" health insurance plans to be offered to all small employers, to provide for establishment of a reinsurance program, and to improve the overall fairness and efficiency of the small group health insurance market./

Amend further, by striking SECTION 3 in its entirety, beginning at line 36 on page 2 and ending at line 20 on page 5, and inserting:

/SECTION 3. As used in this act:

(A) "Basic health insurance plan" means a lower cost health insurance plan developed pursuant to Section 12.

(B) "Board" means the board of directors of the program established pursuant to Section 11.

(C) "Commissioner" means the Chief Insurance Commissioner of this State.

(D) "Committee" means the advisory committee to the commissioner referred to in Section 12.

(E) "Dependent" means a spouse, an unmarried child under the age of nineteen years, an unmarried child who is a full-time student between the

(F) "Eligible employee" means an employee as defined in Section 38-71-710(1) of the 1976 Code who works on a full-time basis and has a normal work week of thirty or more hours.

(G) "Health insurance plan" means any hospital or medical policy or certificate, major medical expense insurance, or health maintenance organization subscriber contract. It includes the entire contract between the insurer and the insured, including the policy, riders, endorsements, and the application, if attached. Health insurance plan does not include accident-only, blanket accident and sickness, specified disease, credit, dental, vision, Medicare supplement, long-term care, or disability income insurance, coverage issued as a supplement to liability or other insurance, coverage designed solely to provide payments on a per diem, fixed indemnity, or nonexpense incurred basis, coverage for Medicare or Medicaid services pursuant to a contract with state or federal government, workers' compensation or similar insurance, or automobile medical payment insurance.

(H) "Insurer" means any entity that provides health insurance in this State. For the purposes of this act, insurer includes an insurance company, a health maintenance organization, and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation, including multiple employer self-insured health plans licensed pursuant to Section 38-41-10, et seq.

(I) "Late enrollee" means an eligible employee or dependent who requests enrollment in a health insurance plan of a small employer following the initial enrollment period during which the individual is entitled to enroll under the terms of the health insurance plan, provided that the initial enrollment period is a period of at least thirty days. However, an eligible employee or dependent shall not be considered a late enrollee if the individual:

(1) meets each of the following:

(a) was covered under qualifying previous coverage at the time of the initial enrollment;

(b) lost coverage under qualifying previous coverage as a result of termination of employment or eligibility, the involuntary termination of the qualifying previous coverage, death of a spouse, or divorce; and

(c) requests enrollment within thirty days after termination of the qualifying previous coverage; or

(3) a court has ordered that coverage be provided for a spouse or minor or dependent child under a covered employee's health insurance plan and request for enrollment is made within thirty days after issuance of the court order.

(J) "Plan of operation" means the plan of operation of the program established pursuant to Section11.

(K) "Program" means the South Carolina Small Employer Insurer Reinsurance Program created by Section 11.

(L) "Qualifying previous coverage" means benefits or coverage provided under:

(1) Medicare or Medicaid;

(2) an employer-based health insurance or health benefit arrangement that provides benefits similar to or exceeding benefits provided under the basic health insurance plan; or

(3) an individual health insurance policy, including coverage issued by a health maintenance organization, that provides benefits similar to or exceeding the benefits provided under the basic health insurance plan, provided that such policy has been in effect for at least one year.

(M) "Reinsuring insurer" means a small employer insurer participating in the reinsurance program pursuant to Section 11.

(N) "Risk-assuming insurer" means a small employer insurer whose application is approved by the commissioner pursuant to Section 9.

(0) "Small employer" means any person, firm, corporation, partnership, or association that is actively engaged in business that, on at least fifty percent of its working days during the preceding calendar year, employed no more than fifty eligible employees. In determining the number of eligible employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of state taxation, shall be considered one employer.

(P) "Small employer insurer" means an insurer that offers health insurance plans covering eligible employees of one or more small employers in this State.

(Q) "Standard health insurance plan" means a health insurance plan developed pursuant to Section 12./

Amend further, as and if amended, by striking SECTION 4 in its entirety, beginning at line 22 on page 5 and ending at line 30 on page 5, and inserting:

(B) The provisions of this act do not apply to individual health insurance policies which are subject to policy form and premium rate approval as may be provided in Title 38 of the 1976 Code./

Amend further, as and if amended, by striking SECTION 5 in its entirety, beginning at line 32 on page 5 and ending at line 23 on page 6, and inserting:

/SECTION 5. Premium rates for health insurance plans subject to this act are governed by the rating restrictions contained in Section 38-71-910, et seq., of the 1976 Code as amended by this act.

Premium rates for health insurance plans shall comply with the requirements of this section notwithstanding any reinsurance premiums or assessments paid or payable by small employer insurers pursuant to Section 11./

Amend further, as and if amended, by striking SECTION 11 in its entirety, beginning at line 17 on page 11 and ending at line 2 on page 20, and inserting:

/SECTION 11. (A) There is hereby created a nonprofit entity to be known as the South Carolina Small Employer Insurer Reinsurance Program, which shall become operational on July 1, 1995.

(B) (1) The program shall operate subject to the supervision and control of the board. Subject to the provisions of paragraph (2), the board shall consist of eight members appointed by the commissioner plus the commissioner or his designated representative, who shall serve as an ex officio member of the board.

(2) In selecting the members of the board, the commissioner shall include representatives of small employers and small employer insurers and such other individuals determined to be qualified by the commissioner. At least five members of the board shall be representatives of insurers, one of whom shall be a licensed independent insurance agent who represents multiple health and accident insurance carriers, and shall be selected from individuals nominated in this State pursuant to procedures and guidelines developed by the commissioner.

(3) The initial board members shall be appointed as follows: two of the members to serve a term of two years; three of the members to serve a term of four years; and three of the members to serve a term of six years. Subsequent board members shall serve for a term of three years. A board member's term shall continue until his successor is appointed.

(C) Not later than September 1, 1994, each small employer insurer shall make a filing with the commissioner containing the insurer's net health insurance premium derived from health insurance plans delivered or issued for delivery to small employers in this State in the previous calendar year.

(D) Within one hundred eighty days after the appointment of the initial board, the board shall submit to the commissioner a plan of operation and thereafter any amendments thereto necessary or suitable to assure the fair, reasonable, and equitable administration of the program. The commissioner may, after notice and hearing, approve the plan of operation if the commissioner determines it to be suitable to assure the fair, reasonable, and equitable administration of the program, and to provide for the sharing of program gains or losses on an equitable and proportionate basis in accordance with the provisions of this section. The plan of operation shall become effective upon written approval by the commissioner.

(E) If the board fails to submit a suitable plan of operation within one hundred eighty days after its appointment, the commissioner shall, after notice and hearing, adopt and promulgate a temporary plan of operation. The commissioner shall amend or rescind any plan adopted under this subsection at the time a plan of operation is submitted by the board and approved by the commissioner.

(F) The plan of operation shall:

(1) establish procedures for handling and accounting of program assets and monies and for an annual fiscal reporting to the commissioner;

(2) establish procedures for selecting an administering insurer and setting forth the powers and duties of the administering insurer;

(3) establish procedures for reinsuring risks in accordance with the provisions of this section;

(4) establish procedures for collecting assessments from reinsuring insurers to fund claims and administrative expenses incurred or estimated to be incurred by the program;

(5) establish a methodology for applying the dollar thresholds contained in this section in the case of insurers that pay or reimburse health care providers though capitation or salary; and

(6) provide for any additional matters necessary for the implementation and administration of the program.

(G) The program shall have the general powers and authority granted under the laws of this State to insurance companies and health maintenance

(1) enter into contracts as are necessary or proper to carry out the provisions and purposes of this act, including the authority, with the approval of the commissioner, to enter into contracts with similar programs of other states for the joint performance of common functions or with persons or other organizations for the performance of administrative functions;

(2) sue or be sued, including taking any legal actions necessary or proper to recover any assessments and penalties for, on behalf of, or against the program or any reinsuring insurers;

(3) take any legal action necessary to avoid the payment of improper claims against the program;

(4) define the health insurance plans for which reinsurance will be provided, and to issue reinsurance policies, in accordance with the requirements of this act;

(5) establish rules, conditions, and procedures for reinsuring risks under the program;

(6) establish actuarial functions as appropriate for the operation of the program;

(7) assess reinsuring insurers in accordance with the provisions of subsection (K), and make advance interim assessments as may be reasonable and necessary for organizational and interim operating expenses. Any interim assessments shall be credited as offsets against any regular assessments due following the close of the fiscal year;

(8) appoint appropriate legal, actuarial, and other committees as necessary to provide technical assistance in the operation of the program, policy and other contract design, and any other function within the authority of the program;

(9) borrow money to effect the purposes of the program. Any notes or other evidence of indebtedness of the program not in default shall be legal investments for insurers and may be carried as admitted assets;

(H) A reinsuring insurer may reinsure with the program as provided for in this subsection:

(1) With respect to a basic health insurance plan or a standard health insurance plan, the program shall reinsure the level of coverage provided.

(2) A small employer insurer may reinsure an entire employer group within sixty days of the commencement of the group's coverage under a health insurance plan.

(4) (a) The program shall not reimburse a reinsuring insurer with respect to the claims of a reinsured employee or dependent until the insurer has incurred an initial level of claims for such employee or dependent of five thousand dollars in a calendar year for benefits covered by the program. In addition, the reinsuring insurer shall be responsible for ten percent of the next fifty thousand dollars of benefit payments during a calendar year and the program shall reinsure the remainder. A reinsuring insurers' liability under this subparagraph shall not exceed a maximum limit of ten thousand dollars in any one calendar year with respect to any reinsured individual.

(b) The board annually shall adjust the initial level of claims and the maximum limit to be retained by the insurer to reflect increases in costs and utilization within the standard market for health insurance plans within the State. The adjustment shall not be less than the annual change in the medical component of the "Consumer Price Index for All Urban Consumers" of the Department of Labor, Bureau of Labor Statistics, unless the board proposeds and the commissioner approves a lower adjustment factor.

(5) A small employer insurer may terminate reinsurance with the program for one or more of the reinsured employees or dependents of a small employer on any anniversary of the health insurance plan.

(6) A reinsuring insurer shall apply all managed care and claims handling techniques, including utilization review, individual case management, preferred provider provisions, and other managed care provisions or methods of operation consistently with respect to reinsured and nonreinsured business.

(I) (1) The board, as part of the plan of operation, shall establish a methodology for determining premium rates to be charged by the program for reinsuring small employers and individuals pursuant to this section. The methodology must contain a provision surcharging the reinsurance premium rate of a small employer insurer which does not employ effective cost containment and managed care arrangements, including, but not limited to:

(a) preferred provider organizations;

(b) utilization review;

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