Journal of the Senate
of the First Session of the 111th General Assembly
of the State of South Carolina
being the Regular Session Beginning Tuesday, January 10, 1995

Page Finder Index

| Printed Page 300, Jan. 18 | Printed Page 320, Jan. 24 |

Printed Page 310 . . . . . Friday, January 20, 1995

Through compromise and consensus-building, the proposed legislation intended to bring about needed change and improvement to workers' compensation programs in South Carolina. If enacted, the legislation would assure a greater equity within the system by closing the "opt out" loophole and providing for consistent and comprehensive fraud investigation and prosecution, better cost-effectiveness by reducing overhead costs associated with claims reporting and administration, and a more user-friendly system by establishing standards for prompt payment and responsible action.

The Senate version of the bill encompassed thirteen proposals. These included the computation of average weekly wages. Current law uses the "previous 52 weeks" as the basis, while the bill uses the "previous four quarters" as reported on the Employer Contribution Reports. Its clarifies work-related stress by adding a clarifying provision which states that such stress unaccompanied by physical injury is not compensable if it occurs during ordinarily personnel actions (such as demotions or terminations), unless the action is taken in an extraordinary or unusual manner. It requires all employers engaged in construction to have proof of coverage. It repeals the right to reject workers' compensation coverage. Currently, there are only three states which allow employers to opt-out of the system; Texas, New Jersey (where all employees must agree to opt-out), and South Carolina. Up until 1992 this provision was hardly utilized in this state. Entrepreneurs from Texas who have been marketing the product, entered South Carolina and have attempted to provide coverage for employers at a lower rate, but not comparable to the benefits presently received under the current workers's compensation system. Before 1992, approximately 80 employers had opted-out of the system. In the fiscal 1992-93, 106 employers opted out, and as of December of 1993, a total of 496 employers in South Carolina had dropped out of the workers' compensation system. The legislation also increases the fine for failure to provide coverage, provides for exhaustion of all remedies prior to paying an Uninsured Employer's Fund claim, clarifies payments to be made by check, prohibits dunning letters and provides for timely payment of


Printed Page 311 . . . . . Friday, January 20, 1995

medical services, stipulates liability for structured settlements, establishes an Insurance Fraud Division of the Attorney General's Office as part of the Omnibus Insurance Fraud Act, amends the reporting requirements for accidents to allow for summary reporting and electronic data interchange, and allows the Commission to review previously award claims at the request of the employer when fraud is suspected.

The House amended eight sections of S.540.

Section 2 - Work-Related Stress: The House version requires that work-related stress be supported by clear and convincing psychiatric evidence that the predominant cause of injury was the extraordinary and unusual conditions of employment, excluding normal personnel actions (for example, disciplinary actions, work evaluations, job transfers, etc.)

Section 3 - "Opt Out": The House version requires that upon notice to the Commission indicating which option it will operate under outside the system, an employer may "opt out" of the system by purchasing insurance coverage meeting certain statutory requirements or by posting $500,000 surety bond or security with the Chief Insurance Commissioner.

Section 8 - Certain Notices Require Conspicuous Posting: The amendment to this section is technical to adjust for maintaining the "opt out" option and its notice requirements.

Section 9 - Prohibits Use of Certain Common Law Defenses: This amendment makes technical changes to the code provision previously amended by the Senate reflecting that the "opt out" option has not been repealed. The addition of comparative negligence to the list of common law defenses such employer cannot utilize is maintained.

Section 17 - "Start Payment" Provision - The House amendment incorporates a "start payment " provision that would only apply to those operating within the Workers' Compensation System and not those who decide to opt out. An employer may start temporary total disability payments immediately when an employee is out of work eight consecutive days and may continue for up to 120 days without waiver of any grounds the employer may have for denying the claim discovered in a good faith investigation, provides when payments may be terminated or suspended immediately by an employer and that an employee can request a hearing to have temporary compensation reinstituted, and provides a penalty for noncompliance of carriers or employers.

Section 19 - Omnibus Insurance Fraud and Reporting Immunity Act - The House version creates an 'Insurance Fraud Division" within the Attorney General's Office to prosecute insurance fraud, to refer matters for investigation to SLED; and to collect fines. The division and the investigative functions of SLED of alleged violations are funded annually


Printed Page 312 . . . . . Friday, January 20, 1995

by no less than $200,000 from general revenues derived from insurance premium taxes and other fines assessed pursuant to this fraud act., replaces the definition of "insurance fraud" by the definition for "false statement and misrepresentation", provides both a criminal and civil penalty for any person who makes a false statement or misrepresentation in connection with an insurance transaction, or any person knowingly aiding and abetting such action. The civil fining provision is modeled after that of the New Jersey Insurance Fraud Bureau, which has had great success in this area and such ability is considered one of its strengths. It also requires annual reports by the Insurance Fraud Division Director to the General Assembly regarding the status of allegations or reports received, including actions taken.

Section 21 - Repealed Provisions for Consistency within Bill - The House version amends the original bill to adjust for maintaining the "opt out" option so as to only repeal the section allowing an employer to waive his exemption to the workers' compensation act upon the filing of written notice of his desire to be subject to the provision of Title 42.

Section 22 - Effective Date - The bill continues to take effect upon approval of the Governor; however, the House version adds that employers who have opted out prior to this act have six months to comply to its provisions, including those rejecters who have procured another form of insurance.

The House added sections to S.540.

Section 41-1-80 - The Anti-Retaliation Statute extends existing protection to employees who have filed claims under an alternative insurance plan maintained by the employer, and to employees bringing action against the employer opting out with security filed with the Chief Insurance Commission. It also changes "intoxication" which is an existing retaliatory discharge defense available to an employer, to "under the influence of intoxicating alcohol or drugs".

Section 38-55-170 -Corresponding Penalty Changes in Existing False Claim Statute - The House version amends current law which prohibits the filing of a false insurance claim so that the penalties of that statute are the same as those provided by the act in Section 19.

The House version also adds a section which allows an employer applying to self- insure to submit the sworn statement or affidavit of an independent auditor (CPA) verifying his financial condition according to the financial ratios or guidelines established by the Commissioner regulation in lieu of submitting audited financial statements.

Because positions changed as the session progressed, the coalition,which had been responsible for the cohesiveness of the legislation, fell apart.


Printed Page 313 . . . . . Friday, January 20, 1995

One of the most important sections of the bill, the establishment of an insurance fraud bureau, was lifted from the bill, attached to the budget bill as a proviso, and was passed in that legislation.

It was most disappointing to the many people who had worked so hard for three years on this legislation, to see it go down hill because of lack of consensus on behalf of various parties.

DEFINITION OF "AUTOMOBILE INSURANCE" - S.972, H.4497

This amendment to the code codifies the interpretation placed on the current Statute by the South Carolina Department of Insurance. This codification is needed to remove any remaining ambiguity and to give general notice to the public of this Statute's meaning. The practical impact of the Insurance Department's interpretation, which would be codified in this legislation, is that commercial businesses are not legally required to purchase basic limits uninsured motorist coverage fore their "employers nonownership liability" (ENOL) policies or for their "hired car" policies and that the mandatory offer of underinsured motorist coverage and "excess" uninsured coverage is not applicable to ENOL and hired car policies. If this legislation is enact, "named" nonowner policies" will continue to be subject to the requirement to carry basic uninsured motorist coverage and continue to be subject to the required offer of underinsured and "excess uninsured" coverage.

This legislation unfortunately became the vehicle for any automobile insurance reform which was on the calendar and thus became so controversial that the original bill could not even pass.

COMMITTEE AND STAFF ACTIVITIES:

Over the years, South Carolina has played an active part in the National Conference of Insurance Legislators (NCOIL). South Carolina has two legislators who have served as President of NCOIL. Currently, two committee members, Senator Ed Saleeby and Senator Glenn McConnell, serve on the Executive Committee of this organization.

NCOIL is a national organization of state legislators, working toward a better understanding of insurance, state insurance regulation and legislation, and against federal intervention in to the rights of the states to regulate and legislate insurance matters. It provides its members with education and informational services to stay abreast of trends and to anticipate new developments. NCOIL also helps legislators in understanding the insurance industry, its impact on constituents, and consumer pressures. The importance of NCOIL to its members is underscored by the fact that insurance is one of the largest private


Printed Page 314 . . . . . Friday, January 20, 1995

industries regulated by the states, and in any typical legislative year some 25,000 insurance-related bills will be introduced in state legislatures.

OTHER ACTIVITIES:

Besides the activities stated above, the Committee's staff continues to work closely with the Department of Insurance, attending the monthly Insurance Commissions' meetings. The staff also attends the quarterly meetings of the South Carolina Health Insurance Pool, serving as a conduit between the Pool's Board and the Legislature. Staff has made numerous speeches to various organizations and associations on committee and legislative activities. Attendance at the National Association of Insurance Commissioners' meetings has been invaluable because of the opportunity it presents to the staff in order to follow the progress of insurance related legislation on the federal level and in other states, and to pass on to committee members and other legislators, information on the progress of model acts which the NAIC generates, and on which many of South Carolina's insurance laws are based.

Staff is also available and called upon throughout the session and interim to answer any constituent concerns for members of the General Assembly on all insurance related matters.

Respectfully submitted,
Mary Lou Price

On motion of Senator SALEEBY, with unanimous consent, ordered printed in the Journal of Friday, January 20, 1995.

ADJOURNMENT

At 11:l0 A.M., on motion of Senator LANDER, the Senate adjourned to meet next Tuesday, January 24, 1995, at 12:00 Noon.

* * *


Printed Page 315 . . . . . Tuesday, January 24, 1995

Tuesday, January 24, 1995

(Statewide Session)

Indicates Matter Stricken
Indicates New Matter

The Senate assembled at 11:00 A.M., the hour to which it stood adjourned and was called to order by the PRESIDENT.

A quorum being present the proceedings were opened with a devotion by the Chaplain as follows:

Beloved, today we commemorate the birthdays of Robert E. Lee (born January 19, 1807) and "Stonewall" Jackson (born January, 1824). Hear words from the First Psalm (v. 3):

"And he shall be like a tree planted by

the streams of water,

That bringeth forth its fruit in its season,

Whose leaf also doth not wither... "
Let us pray.

Almighty God of our fathers, before Your face, the nations rise and fall. Generations are born, serve a short time... and die.

We give You thanks that the memory of men like Robert E. Lee and "Stonewall" Jackson lingers on. They served their generation.

They left a legacy of character to generations unborn as sun-crowned men.

Inspire us, in our day, so to live:

"That we may tell our sons who see

The light high in the heavens,

Their heritage to take...

I saw the powers of darkness put to flight,

I saw the morning break." (On a Confederate monument)

Help us to strive for a better world!

Amen.

The PRESIDENT called for Petitions, Memorials, Presentments of Grand Juries and such like papers.


Printed Page 316 . . . . . Tuesday, January 24, 1995

MESSAGE FROM THE GOVERNOR

STATE OF SOUTH CAROLINA

OFFICE OF THE GOVERNOR

October 12, 1994
Mr. President and Members of the Senate:

At the request of the nominee, I respectfully request withdrawal from your consideration the appointment below.

Respectfully,
Carroll A. Campbell, Jr.

Withdrawal of Statewide Appointment

Initial Appointment, Member, South Carolina Commission for the Blind, with term to commence May 19, 1994, and to expire May 19, 1998:

1st Congressional District:

Mr. William J. Fogle, III, M.D., 48 Courtnay Drive, Charleston, S.C. 29403 VICE Clay W. Evatt, Jr.

Referred to the General Committee.

MESSAGE FROM THE GOVERNOR

STATE OF SOUTH CAROLINA

OFFICE OF THE GOVERNOR

October 12, 1994
Mr. President and Members of the Senate:

I respectfully request withdrawal from your consideration the appointment below.

Respectfully,
Carroll A. Campbell, Jr.


Printed Page 317 . . . . . Tuesday, January 24, 1995

Withdrawal of Statewide Appointment

Initial Appointment, Member, Juvenile Parole Board, with term to commence June 30, 1992, and to expire June 30, 1996:

1st Congressional District:

Mr. William J. Capers, 3244 Starlette Avenue, North Charleston, S.C. 29420-8847 VICE Robert Capers/Herbert J. Walton

Referred to the Committee on Corrections and Penology.

MESSAGE FROM THE GOVERNOR

STATE OF SOUTH CAROLINA

OFFICE OF THE GOVERNOR

December 19, 1994
Mr. President and Members of the Senate:

At the direction of the nominee, I respectfully request withdrawal of this appointment from your consideration.

Respectfully,
Carroll A. Campbell, Jr.

Withdrawal of Statewide Appointment

Reappointment, Member, South Carolina Foster Care Review Board, with term to commence June 30, 1993, and to expire June 30, 1997:

2nd Congressional District:

Ms. Cecilia Aversa, 1108 Baywater Drive, West Columbia, S.C. 29170

Referred to the General Committee.

MESSAGE FROM THE GOVERNOR

STATE OF SOUTH CAROLINA

OFFICE OF THE GOVERNOR

January 6, 1995
Mr. President and Members of the Senate:

At the request of the nominee, I respectfully withdraw from your consideration the nomination below.

Respectfully,
Carroll A. Campbell, Jr.


Printed Page 318 . . . . . Tuesday, January 24, 1995

Statewide Appointment

Initial Appointment, Member, South Carolina Board of Probation, Parole and Pardon Services, with term to commence March 15, 1993, and to expire March 15, 1999:

2nd Congressional District:

Mr. Charles L. A. Terreni, 3604 Coleman Street, Columbia, S.C. 29205 VICE J. Rhett Jackson

Referred to the Committee on Corrections and Penology.

MESSAGE FROM THE GOVERNOR

STATE OF SOUTH CAROLINA

OFFICE OF THE GOVERNOR

January 16, 1995
Mr. President and Members of the Senate:

Due to the resignation of the appointee, I respectfully withdraw from your consideration the appointment below.

Respectfully,
David M. Beasley

Withdrawal of Statewide Appointment

Reappointment, Member, Residential Builders Commission, with term to commence June 30, 1994, and to expire June 30, 1998:
5th Congressional District - Builder:

Mr. Michael G. Williams, Post Office Box 1146, Lancaster, S.C. 29721

Referred to the Committee on Labor, Commerce and Industry.

Message from the House

Columbia, S.C., January 17, 1995

Mr. President and Senators:

The House respectfully informs your Honorable Body that it has sustained the veto by the Governor on R. 568, H. 3385 by a vote of 44 to 67:
(R568) H. 3385 -- Rep. Cromer: AN ACT TO AMEND SECTION 7-11-15, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ELECTIONS, METHODS OF NOMINATION,


Printed Page 319 . . . . . Tuesday, January 24, 1995

AND QUALIFICATIONS TO RUN AS A CANDIDATE IN GENERAL ELECTIONS, SO AS TO DELETE THE PROVISIONS RELATING TO CANDIDATES SEEKING NOMINATION BY PETITION; TO AMEND SECTION 7-13-190, AS AMENDED, RELATING TO SPECIAL ELECTIONS TO FILL VACANCIES IN OFFICE, SO AS TO PROVIDE FOR A SEPARATE FILING PERIOD FOR CANDIDATES SEEKING NOMINATION BY PETITION IN PARTISAN ELECTIONS, AND CHANGE A CODE REFERENCE;

(Abbreviated Title)
Very respectfully,
Speaker of the House

Received as information.

Message from the House

Columbia, S.C., January 17, 1995

Mr. President and Senators:

The House respectfully informs your Honorable Body that it has sustained the veto by the Governor on R. 582, H. 4142 by a vote of 1 to 92:
(R582) H. 4142 -- Reps. Quinn, Wright and Riser: AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 15 TO CHAPTER 25, TITLE 50, SO AS TO PROVIDE FOR RESTRICTIONS, NO WAKE ZONES, PENALTIES, AND FINE DISBURSEMENTS FOR WATERCRAFT ON LAKE MURRAY.
Very respectfully,
Speaker of the House

Received as information.

Message from the House

Columbia, S.C., January 17, 1995

Mr. President and Senators:

The House respectfully informs your Honorable Body that it has sustained the veto by the Governor on R. 597, H. 4631 by a vote of 64 to 49:
(R597) H. 4631 -- Reps. Kirsh, G. Bailey, Boan, J. Brown, Harwell and Waldrop: AN ACT TO AMEND SECTION 40-51-80, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO EXAMINATIONS TO PRACTICE PODIATRIC MEDICINE, SO AS


Printed Page 320 . . . . . Tuesday, January 24, 1995

TO REQUIRE THE BOARD TO OFFER THEM TWICE ANNUALLY; TO AMEND SECTION 40-51-110, RELATING TO RECIPROCITY, SO AS TO PROVIDE FOR LICENSURE RECIPROCITY; TO AMEND SECTION 40-51-130, RELATING TO RECORDING OF LICENSE WITH COUNTY CLERK OF COURT, SO AS TO DELETE THIS REQUIREMENT; TO AMEND SECTION 40-51-160, RELATING TO DISCIPLINARY ACTION BY THE BOARD, SO AS TO AUTHORIZE THE BOARD TO REQUIRE MENTAL OR PHYSICAL EXAMINATIONS AND ACCESS TO RECORDS AND TO USE THEM IN PROCEEDINGS AND TO PROVIDE PENALTIES FOR REFUSAL TO CONSENT TO THESE EXAMINATIONS AND ACCESS TO RECORDS; TO AMEND SECTION 44-7-70, RELATING TO REPORTS BY THE STATE BOARD OF MEDICAL EXAMINERS CONCERNING DISCIPLINARY ACTION AGAINST PHYSICIANS, SO AS TO REQUIRE SUCH REPORTS ON PODIATRISTS; TO REAUTHORIZE THE BOARD OF PODIATRY EXAMINERS FOR SIX YEARS; TO AMEND SECTION 40-51-30, AS AMENDED, RELATING TO THE BOARD OF PODIATRY, ITS MEMBERS, TERMS, AND REMOVAL, SO AS TO REVISE THE PROCEDURES FOR NOMINATING MEMBERS AND FOR REMOVAL FROM OFFICE AND TO DELETE THE PROVISIONS PERTAINING TO A MEDICAL CONSULTANT AND A LEGAL ADVISOR TO THE BOARD; TO PROVIDE FOR THE EXPIRATION OF CURRENT BOARD TERMS, INTERIM GOVERNANCE OF THE BOARD; AND STAGGERED TERMS FOR NEW APPOINTEES; AND TO REAUTHORIZE THE SOUTH CAROLINA STATE BOARD OF DENTISTRY, AND THE SOUTH CAROLINA BOARD OF EXAMINERS IN OPTICIANRY FOR SIX YEARS.


| Printed Page 300, Jan. 18 | Printed Page 320, Jan. 24 |

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