Indicates Matter Stricken
Indicates New Matter
Current Status Bill Number:4380 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19980113 Primary Sponsor:Cobb-Hunter All Sponsors:Cobb-Hunter, Canty, Jennings, Moody-Lawrence and Meacham Drafted Document Number:psd\7451jm.98 Residing Body:House Current Committee:Labor, Commerce and Industry Committee 26 HLCI Subject:Home-service insurance, method of regulating system of distribution of policies; Insurance
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
House 19980113 Introduced, read first time, 26 HLCI
referred to Committee
House 19971217 Prefiled, referred to Committee 26 HLCI
View additional legislative information at the LPITS web site.
TO AMEND TITLE 38, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO INSURANCE, BY ADDING CHAPTER 93 SO AS TO PROVIDE A METHOD FOR REGULATING THE HOME-SERVICE SYSTEM OF DISTRIBUTION OF INSURANCE POLICIES IN SOUTH CAROLINA, INCLUDING PROVISIONS, AMONG OTHER THINGS, FOR DEFINING DECEPTIVE ACTS AND FOR THE PROMULGATION OF REGULATIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 38 of the 1976 Code is amended by adding:
Section 38-93-10. As used in this chapter, unless the context requires otherwise:
(1) A 'blind' is the collection of a premium from a policy owner or premium payor who is intentionally not made aware of the correct paid-to-status of the policy for which the premium is to be applied because a premium intentionally was not properly recorded.
(2) 'Director' means the Director of the Department of Insurance of this State.
(3) 'Home-service system of distribution' is a manner of selling insurance policies which are customarily marketed, issued, or delivered by an agent in person at a payor's home or business, or is a manner of collecting premiums in which premiums are customarily collected in person at a payor's home or business by an agent. This does not include the sale of commercial policies, crop or hail policies, or term policies covering crops whether harvested or unharvested, or policies covering grain, hay, chemicals, or fertilizer.
(4) 'Customarily collected' means that, in his ordinary course of business, the agent collects premiums for the policy on-site at a payor's home or business.
(5) 'Customarily marketed, issued, or delivered' means that, in his ordinary course of business, the agent markets, issues, or delivers the policy on-site at a payor's home or business. 'Customarily marketed, issued, or delivered' does not include any solicitation or sale made at the home or workplace of a person if it will not thereafter be the ordinary course of business of the agent to either collect premiums from the person on-site at his home or workplace or regularly service the premium payor or policy owner on-site at his home or workplace.
Section 38-93-20. Each insurer engaged in the home-service system of distribution of insurance policies in this State shall:
(1)(a) establish written procedures, subject to the approval of the director or his designee, to audit agencies engaged in the home-service system of distribution of policies in this State;
(b) file at the Department of Insurance the audit procedures in effect each year with the annual statement or provide a certification with each annual statement that the procedures have been adopted;
(c) conduct audits periodically, or in the manner as prescribed by regulations promulgated by the director or his designee, at the field level or premium payor level which reasonably insure that the premium payor's premium recording item or records accurately reflect the premium due date and premium paid-to-status of the policy or policies purchased;
(d) provide a receipt or record to the premium payor reflecting the amount of the premium paid, the date of payment, and the policy number, or other identifying characteristics, toward which the premium is paid if the premium receipt book or other premium recording record is unavailable for marking the premium payments of the payor;
(e) provide to a policy owner or premium payor upon request the current paid-to-status of any and all policies owned within forty-five days and, in the event the records of the policy owner or premium payor differ, adjust the company records to credit the policy any previously uncredited payments for which a receipt or other reasonable evidence of payment is submitted by the policy owner.
(2) With the delivery of the policy, provide notice in bold print, with at least ten point font or size, which states:
(a) that a premium savings may be realized by a different or less frequent method of payment;
(b) that premiums are still due and payable by the person responsible for premium payments even when an agent does not collect the premiums; and
(c) the mailing address for payment of premiums to the company.
Section 38-93-30. For every premium collected on a policy of property, casualty, life, or disability insurance in this State, the agent collecting or receiving the premium shall:
(1) furnish the payor with written evidence of payment at the time the premium is collected which shall include the amount paid, the date paid, the date paid-to-status of the policy, the policy number, or the identifying characteristics, for which the payment must be credited, the signature or signed initials of the agent, and the office address and phone number of the insurer;
(2) remit to the insurer's home office or applicable district office the premium collected within ten days of receipt from the premium payor or policy owner.
Section 38-93-40. The following activities, if committed intentionally, are deceptive acts under Chapter 57 of this title for companies or agents engaged in the home-service system of distribution:
(1) the commission of a blind as defined by Section 38-93-10(1);
(2) the collection of a premium which is not due from a premium payor or policy owner, and, without the knowledge of the premium payor or policy owner, the crediting of that premium to future coverage for a policy owner;
(3) the collection of a premium which is not due from a premium payor or policy owner, and, without the knowledge of the premium payor or policy owner, the crediting of that premium for a different policy owner;
(4) the use or transfer of any excess or unused funds remaining in the account of the premium payor or policy owner to procure or revive an insurance policy for a policy owner, without the knowledge or authorization of the payor;
(5) the collection of a premium by an agent who retains the premium for his own personal use.
Section 38-93-50. The director has the authority he considers reasonably necessary to regulate the home-service system of distribution and, to that end, to promulgate regulations necessary to regulate the home-service system of distribution."
SECTION 2. This act takes effect upon approval by the Governor.