| Printed Page 7270, May 25 | Printed Page 7290, May 25 |

Rep. MATTOS asked unanimous consent to recall H. 4273 from the Committee on Judiciary.

Rep. HODGES objected.

Rep. KEEGAN asked unanimous consent to recall H. 3340 from the Committee on Judiciary.

Rep. HODGES objected.

Rep. ELLIOTT asked unanimous consent to recall H. 4374 from the Committee on Labor, Commerce and Industry.

Rep. CATO objected.

On motion of Rep. HODGES, with unanimous consent, the following Bill was ordered recalled from the Committee on Judiciary.

S. 1227 -- Senator McConnell: A BILL TO AMEND SECTION 7-5-30, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DUTIES AND TERMS OF OFFICE OF BOARDS OF VOTER REGISTRATION, SO AS TO PROVIDE THAT THE BOARD'S OFFICE MAY BE LOCATED AT A PLACE OTHER THAN THE COUNTY SEAT WHEN IT IS NOT POSSIBLE OR PRACTICABLE TO DO SO.

Rep. WALKER asked unanimous consent to recall S. 1315 from the Committee on Agriculture, Natural Resources and Environmental Affairs.

The Senate amendments to the following Bill were taken up for consideration.

H. 4811 -- Rep. G. Bailey: A BILL TO AMEND SECTION 61-3-1020, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE PROHIBITION ON THE CONDUCT OF OTHER BUSINESS IN RETAIL ALCOHOLIC LIQUOR STORES, SO AS TO AUTHORIZE THE SALE OF NONALCOHOLIC ITEMS INSTEAD OF NONALCOHOLIC BEVERAGES PACKAGED TOGETHER WITH ALCOHOLIC LIQUORS AND TO REQUIRE THE PACKAGING AT THE ALCOHOLIC LIQUOR PRODUCER'S PLACE OF BUSINESS.

Rep. G. BAILEY proposed the following Amendment No. 3 (Doc Name L:\council\legis\amend\GJK\20950SD.94), which was adopted.

Amend the bill, as and if amended, by striking SECTIONS 2, 3, and 4 and inserting:

/SECTION 2. This act takes effect upon approval by the Governor./ Renumber sections to conform.

Amend totals and title to conform.

Rep. G. BAILEY explained the amendment.

The amendment was then adopted.

The Senate amendments, as amended, were then agreed to and the Bill ordered returned to the Senate.

The Senate amendments to the following Bill were taken up for consideration.

H. 4494 -- Reps. J. Bailey, Corning, McElveen, Quinn and Scott: A BILL TO AMEND SECTION 38-31-60, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE POWERS AND DUTIES OF THE SOUTH CAROLINA PROPERTY AND

Rep. J. BAILEY explained the Senate amendments.

The Senate amendments were agreed to, and the Bill 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.

The Senate amendments to the following Bill were taken up for consideration.

H. 4497 -- Reps. J. Bailey, Corning, McElveen, Quinn and Scott: A BILL TO AMEND SECTION 38-77-30, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DEFINITION OF "AUTOMOBILE INSURANCE", SO AS TO DELETE CERTAIN LANGUAGE AND PROVIDE THAT AN AUTOMOBILE INSURANCE POLICY INCLUDES A MOTOR VEHICLE LIABILITY POLICY DEFINED IN SECTION 56-9-20 AND ANY NAMED NONOWNER AUTOMOBILE INSURANCE POLICY.

Reps. RHOAD, SNOW, STODDARD, FELDER, G. BROWN and TROTTER proposed the following Amendment No. 1, which was adopted.

Amend the bill, as and if amended, by:

Striking SECTION 3 in its entirety.

Amend title to conform.

Rep. RHOAD explained the amendment.

Reps. J. BAILEY and FELDER spoke in favor of the amendment.

The question then recurred to the adoption of the amendment.

Those who voted in the affirmative are:

Alexander, M.O.  Alexander, T.C.  Allison
Anderson         Askins           Bailey, G.
Bailey, J.       Baker            Barber
Baxley           Beatty           Boan
Brown, G.        Brown, H.        Carnell
Cato             Chamblee         Cobb-Hunter
Cooper           Davenport        Delleney
Elliott          Fair             Farr
Felder           Gamble           Gonzales
Govan            Graham           Hallman
Harrell          Harrelson        Harris, J.
Harris, P.       Harrison         Harwell
Haskins          Hines            Hodges
Houck            Huff             Inabinett
Jaskwhich        Jennings         Keegan
Kelley           Keyserling       Kinon
Kirsh            Klauber          Koon
Lanford          Law              Littlejohn
Marchbanks       Martin           Mattos
McAbee           McCraw           McLeod
McMahand         Meacham          Moody-Lawrence
Neal             Neilson          Phillips
Rhoad            Richardson       Riser
Robinson         Rudnick          Scott
Sheheen          Shissias         Simrill
Smith, D.        Smith, R.        Snow
Spearman         Stille           Stoddard
Stone            Stuart           Sturkie
Thomas           Townsend         Trotter
Tucker           Vaughn           Walker
Wells            Whipper          White
Wilder, D.       Wilder, J.       Wilkes
Wilkins          Williams         Witherspoon

Wofford          Worley           Young, A.
Young, R.

Those who voted in the negative are:

So, the amendment was adopted.

Reps. RICHARDSON, R. SMITH, FELDER, G. BROWN, McLEOD, WALKER and WALDROP proposed the following Amendment No. 2 (Doc Name L:\council\legis\amend\BBM\9264JM.94), which was ruled out of order.

Amend the bill, as and if amended, by striking all after the enacting words and inserting:

/SECTION 1. The title of Article 5, Chapter 77, Title 38 of the 1976 Code is amended to read:

SECTION 2. The title of Section 38-77-590 of the 1976 Code is amended to read:

SECTION 3. Section 38-77-590 of the 1976 Code, as last amended by Act 524 of 1990, is further amended to read:

"Section 38-77-590. (a) Not more than six months after July 9, 1974, or at an earlier time as the Commissioner considers necessary by reason of complaints regarding want of access to automobile insurance in particular areas or want of outlets for producers, the Commissioner shall survey the various areas of the State to ascertain if sufficient marketing outlets exist in all areas or are available to all producers. Upon a finding by the Commissioner that insufficient marketing outlets exist in particular areas or that certain producers have been deprived of a market for risks previously serviced by them, the Commissioner may, after consultation with the Facility, designate one or more insurers to service the areas through agents appointed by them or may designate the producers as the agents of any insurer. The arrangements shall include provision for one hundred percent quota share reinsurance through the Facility of any automobile insurance policy marketed through the arrangements, at the option of the insurer, and the reinsurance is not subject to the statutory

(b) After the effective date of this section, those producers previously designated by the Commissioner may continue to serve in that capacity under the jurisdiction and control of the governing board of the Facility, except that After October 1, 1994, producers previously designated by the commissioner or the governing board may continue to serve in the capacity of a servicing agent for the Reinsurance Facility and shall not be required to requalify or reapply for assignment under the provisions of subsection (c). Producers assigned to a servicing carrier in accordance with this section and producers previously designated to a servicing carrier by the commissioner or the governing board of the Reinsurance Facility must remain assigned to that servicing carrier until and unless, after October 1, 1995, the producer's written request to change the assignment is received by the governing board of the Reinsurance Facility or until the assignment is transferred to another carrier by the governing board upon nonrenewal or termination of that servicing carrier's contract. Any change in the rate of commissions allowed designated the producers is subject to the commissioner's approval.

(c) A producer may apply to the governing board for assignment to a servicing carrier and is eligible for assignment be designated by the governing board of the Facility upon application for designation and is eligible for designation upon a finding by the governing board that the applicant meets the following qualifications:

(1) The applicant has been, for ten five continuous years, a licensed resident property and casualty insurance agent and is at the time of application an agency owner or principal associated with an agency in

(2) At the time of application the applicant is servicing and owns the renewals on South Carolina private passenger and commercial automobile insurance business, the net premiums on which exceeded seventy-five one hundred thousand dollars of potential cedeable automobile insurance during any one of the previous five calendar years preceding the application; and

(3) Neither the applicant, nor any employee of the applicant or the applicant's corporate agency, nor any partner or shareholder in any related insurance agency, related premium service company, or related other business, has any direct or indirect connection with any voluntary market outlet for the purpose of writing any type of automobile insurance in this State except for motorcycle insurance and types not cedeable to the facility;

(4) The applicant has not contributed to his termination as agent by any insurer because of any illegal breach of agency agreement or other related, improper, or unethical conduct; and

(5)(4) The books, records, and accounts of the insurance business of the applicant have been audited at the expense of the applicant and found by the governing board to be indicative of a financially sound operation.

(d) Prior to Before designation the assignment as a producer, the applicant shall furnish at his expense a bond in an amount of not less than fifty thousand dollars for the faithful performance of the duties as a producer, executed by the applicant as principal and a corporate surety licensed to do business in this State as surety, and shall also have effective errors and omissions insurance by an insurer licensed to do business in this State, with the bond and errors and omissions insurance being subject to approval by the governing board.

(e) The governing board shall assign a specific location to each producer designated. The governing board shall determine from the commissioner the locations assigned by him to those producers whom the commissioner has designated. Designated producers may not open or maintain any other locations without the written authorization of the governing board; provided, however, that an applicant maintaining multiple offices on June 4, 1987, is entitled to maintain two locations as a designated agent which he owned and operated at that time and through which premiums in at least the amount of seventy-five thousand dollars

(f) The designation of a producer by the Commissioner or the governing board is transferable to a spouse, child, parent, brother, or sister of the producer upon the designated producer's retirement, incapacity, or death. The duties of a designated producer may be performed by one or more qualified employees of the producer or the producer's corporate agency. The assignment of a producer to a servicing carrier by the governing board is transferable to a spouse, child, parent, brother, or sister of the producer upon the producer's retirement, incapacity, or death. The assignment at any time may, at the election of the producer by written notice thereof to the governing board, be irrevocably transferred to a corporation authorized to transact business in South Carolina by the Secretary of State and licensed by the insurance commissioner as an insurance agency. The duties of an individual or corporate producer may be performed by one or more qualified employees of the producer.

(g) Neither a designated producer, nor any employee of a designated producer or the producer's corporate agency, nor any partner or shareholder in any related insurance agency, related premium service company, or related other business, may have any direct or indirect connection with any voluntary market outlet for the purpose of writing any type of automobile insurance in this State except for motorcycle insurance and types not cedable to the Facility. The governing board shall terminate the designation of any producer, and the Commissioner shall revoke all licenses of the producer and of any other insurance agent and premium service company knowingly involved in this connection. Upon

(h) A designated servicing carrier who fails a claims audit shall have no new designated producer servicing agent assignments until the time it passes a re-audit within a reasonable time prescribed by the governing board. If this carrier fails two claims audits, including a re-audit, within any three-year period that carrier is disqualified for renewal of its contract with the facility upon expiration of its existing contract.

(h) The governing board of the Reinsurance Facility shall not contract with an insurer to act as a servicing carrier solely for the insurer's own authorized and voluntarily contracted agents. Servicing carriers shall accept assignments of servicing agents on an equitable, nondiscriminatory basis promulgated by the governing board. An insurer shall not at any time nor in any manner require, coerce, or provide incentive for a servicing agent to make a new offer of coverage and application for insurance through the servicing carrier to which the servicing agent is assigned pursuant to this section in order to replace or supersede an existing policy or renewal offering of the insurer.

(i) Upon the change of assignment of a producer to another servicing carrier, the producer's former servicing carrier shall not be subject to the requirements of Sections 38-75-740 and 38-77-120 for the existing policies of that producer which policies shall expire at the policy renewal dates beginning one hundred twenty days from the receipt of the notice of the change of assignment by the former carrier from the governing board of the Reinsurance Facility. The former servicing carrier shall give written notice to each such policyholder not less than thirty days before the policy expiration date stating:

(1) that the policy will expire on the policy expiration date and that coverage will not be continued by the former servicing carrier after that date; and

(2) that a renewal policy will be offered to the policyholder by the new servicing carrier effective at the expiration date and time of the existing policy; and

(3) the name, address, and phone number of the producer. The former servicing carrier shall provide in a timely manner current individual policy information sufficient to allow the new servicing carrier to issue renewal policies replacing the expiring policies of the producer's transferred business with like coverages and premiums. However, the original application for insurance and endorsements on expiring policies of the producer's transferred business shall be applicable to the renewal policy issued by the new servicing carrier and may take precedence over

SECTION 4. Section 38-73-455(C) of the 1976 Code, as last amended by Act 113 of 1991, is further amended to read:

"(C) Member companies of an affiliated group of automobile insurers may not utilize different filed rates for automobile insurance coverages which they are mandated by law to write. For the purpose of this section, an affiliated group of automobile insurers includes a group of automobile insurers under common ownership, management, or control. Those automobile insurers designated contracted pursuant to Section 38-77-590(a), for automobile insurance risks written by them through producers designated assigned by the facility governing board pursuant to that section and, subject to the provisions of Section 38-73-1425, all insurers on all risks ceded to the facility, shall utilize the rates or premium charges developed under Section 38-73-1420 by coverage filed and authorized for use by the rating organization licensed by the commissioner pursuant to Article 11, Chapter 73 of this title, which has the largest number of members or subscribers for automobile insurance rates. However, those automobile insurers designated contracted pursuant to Section 38-77-590(a) are not required to use those same rates or premium charges described in the preceding sentence for risks written by them through their authorized agents not appointed pursuant to Section 38-77-590 on risks not ceded to the facility."

SECTION 5. Section 38-73-1420 of the 1976 Code, as added by Act 148 of 1989, is amended to read:

"Section 38-73-1420. After June 30, 1989, The Board of Governors of the South Carolina Reinsurance Facility shall file an expense component, as defined under Section 38-73-1400(2), for private passenger and commercial automobile insurance rate or premium charges which shall accurately reflect the actual expenses of the South Carolina Reinsurance Facility without profit or contingencies and for use with after the rating organization with the largest number of members or subscribers has filed

| Printed Page 7270, May 25 | Printed Page 7290, May 25 |