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Current Status Bill Number:View additional legislative information at the LPITS web site.3296 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19990119 Primary Sponsor:Kirsh All Sponsors:Kirsh Drafted Document Number:l:\council\bills\dka\3141mm99.doc Residing Body:House Current Committee:Labor, Commerce and Industry Committee 26 HLCI Subject:Reinsurance Facility, Motor vehicle insurance, made subcommittee of new advisory board of joint underwriters group History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ House 19990119 Introduced, read first time, 26 HLCI referred to Committee Versions of This Bill
TO AMEND SECTION 38-77-580, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE GOVERNING BOARD OF THE REINSURANCE FACILITY, SO AS TO DELETE PROVISIONS FOR APPOINTMENT TO AND OPERATION BY THE BOARD AND TO PROVIDE FOR THE FACILITY'S GOVERNMENT BY A SEPARATE AND DISTINCT SUBCOMMITTEE OF THE ADVISORY BOARD TO A JOINT UNDERWRITING ASSOCIATION KNOWN AS THE "ASSOCIATED AUTO INSURERS PLAN", ESTABLISHED IN CHAPTER 91 OF TITLE 38; TO AMEND SECTION 38-91-130, RELATING TO ORGANIZATION AND OPERATION OF THE ADVISORY BOARD TO THE JOINT UNDERWRITING ASSOCIATION, SO AS TO DELETE LIMITATIONS ON APPOINTMENTS OF INSURERS TO THE BOARD AND TO PROVIDE FOR A SEPARATE AND DISTINCT SUBCOMMITTEE OF THE BOARD TO DIRECT AND CONTROL THE OPERATIONS AND AFFAIRS OF THE REINSURANCE FACILITY; TO AMEND SECTION 38-91-310, RELATING TO THE POWERS OF THE ADVISORY BOARD, SO AS TO INCLUDE THE POWER TO DIRECT THE OPERATION OF THE REINSURANCE FACILITY; AND TO REPEAL SECTION 38-77-585 RELATING TO ADDITIONAL BOARD MEMBERS OF THE REINSURANCE FACILITY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. A. Section 38-77-580 of the 1976 Code, as last amended by Act 154 of 1997, is further amended to read:
"Section 38-77-580. The operations and affairs of the facility are under the direction and control of a governing board of nineteen persons of whom four must be residents of South Carolina appointed by the Governor of South Carolina to represent consumers. The director shall appoint eight persons to represent the insurance industry; in appointing these persons, the director shall select two from a list of not less than five nominated by the American Insurance Association from the officers or employees of insurers licensed in South Carolina and which are members or subscribers of that organization; he shall select two from a list of not less than five persons nominated by the American Mutual Insurance Alliance from the officers or employees of insurers licensed in South Carolina and which are members or subscribers of that organization; he shall select two from a list of not less than five persons nominated by the National Association of Independent Insurers from the officers or employees of insurers licensed in South Carolina and which are members or subscribers of that organization; he shall select two persons, one of whom must be an officer or employee of a stock insurer licensed in South Carolina and not a member or subscriber of any of these organizations, and one of whom must be an officer or employee of a nonstock insurer licensed in South Carolina and not a member or subscriber of any of these organizations; however, of the eight persons appointed to represent the insurance industry, not less than five must be residents of South Carolina and those who are not residents of South Carolina must have job responsibilities that include the supervision over South Carolina operations; not less than two must be officers or employees of insurers licensed to transact automobile insurance in South Carolina and domiciled therein. The director shall appoint four persons to represent producers, all of whom must be residents of South Carolina; he shall select two such persons from a list of not less than five nominated by the stock agents' association and two from a list of not less than five persons nominated by the mutual agents' association. The director shall appoint two persons to represent the designated agents, one of whom must be an officer of a premium service finance company and the other of whom must be a designated agent and both of whom must be residents of South Carolina. In addition the Consumer Advocate is an ex-officio member of the governing board of the Reinsurance Facility. No person who is associated with any business within the meaning of Section 8-13-20, which is either subject to regulation by the Department of Insurance or which provides goods or services to the facility for compensation, is eligible for appointment to the board to represent consumers, except that any person serving on the board representing consumers on the effective date of this provision who would otherwise be disqualified from serving based on this provision may continue to serve for the remainder of his current term.
The director is chairman of the board, ex officio, but has no vote except in the case of a tie. The director, or his designated representative, shall preside over all meetings which must be held not less than quarterly in South Carolina at the times and places the director designates. However, upon the filing with the director of a request for a meeting signed by not fewer than five members of the board and specifying the subjects to be discussed at the proposed meeting, the director shall call a special meeting of the board to be held not less than fifteen nor more than thirty days after receipt of the request. Notice, in writing, of the special meeting must be provided members of the board.
Members of the board shall serve one year or until their successors are appointed and have qualified.
Amendment of the plan of operation may be made only at the annual meeting of the board or at a special meeting called by the director for that purpose and so specified in the notice of meeting. Amendments of the plan require the affirmative vote of two-thirds of all the board members and are subject to the approval of the director or his designee. The director or his designee may approve amendments only if they are consistent with the purposes of this chapter. If the consumer-representative members of the board unanimously dissent from a proposed amendment and specify their reasons for dissent in writing, the director or his designee may not approve the amendment until after a public hearing addressed to the reasons for the dissent.
The director may make provision for voting by proxy at meetings.
The director or his designee, through the department, may propose to the board any amendment to or modification of the plan that the director or his designee considers to be necessary to render the plan reasonable or consistent with the purposes of this chapter, specifying in writing the reasons for any proposed amendment or modification. In the event that the board fails to adopt his proposed amendment or modification, the director or his designee may, after notice and public hearing addressed to the reasons for the proposed amendment or modification, promulgate the amendment or modification considered necessary to render the plan reasonable or consistent with the purposes of this chapter. separate and distinct subcommittee of the advisory board of a joint underwriting association, known as the 'Associated Auto Insurers Plan', as provided in Section 38-91-130, and all references to the governing board of the facility are to the subcommittee of the advisory board described in that section."
B. This section takes effect upon approval by the Governor and remains in effect until January 1, 2006, as provided by Section 30, Act 154 of 1997, which repeals this section effective January 1, 2006.
SECTION 2. A. Section 38-91-130 of the 1976 Code, as added by Act 154 of 1997, is amended to read:
"Section 38-91-130. (a) Within ninety days after the effective date of this act chapter, the director or his designee shall call the first, or organizational meeting, of the association and seat an advisory board, (hereinafter referred to as the board).
The initial board shall consist consists of three individuals who are licensed agents or brokers and four consumer representatives to be appointed by the director or his designee, five association members, the Consumer Advocate or his designee, the director of Public Safety or his designee, and one member from the Department of Insurance. The representative from the Department of Insurance will be is a nonvoting board member. Association members will be chosen as follows:
One insurer which is a member of and selected by the American Insurance Association;
One insurer which is a member of and selected by the Alliance of American Insurers;
One insurer which is a member of and selected by the National Association of Independent Insurers;
One insurer which is not affiliated with the forgoing organizations and which is elected by such nonaffiliated insurers voting in person or by proxy;
One insurer which is a domestic appointed by the director regardless of affiliation.
The terms of office for the initial and subsequent members of the board shall must be as provided in the plan of operation. Such The plan shall must provide for the appointment by the director of three individuals who are licensed as agents or brokers in this State. The board shall elect a chairperson who is not an insurer representative.
No more than one representative of a domestic insurer may serve on the board at any one time. No An insurer may not serve on the board if such the insurer is a servicing carrier for the association or is a member of a group of insurers which has one insurer as a servicing carrier, unless the carrier or group of carriers participates in the voluntary automobile market with a level at least twice the premium level for the Associated Auto Insurers Plan. If a servicing contract is awarded mid-term, then the affected representative must resign at the next board meeting.
(b) Within sixty days after the organizational meeting, the board shall file with the director or his designee for his approval, a proposed plan of operation, consistent with the provisions of this act chapter, which shall provide for requires the prompt and efficient provision of automobile insurance to qualified applicants unable to procure such insurance through ordinary methods. Distinct and separate plans may be filed for private passenger automobile insurance and commercial automobile insurance. The plan(s) plan or plans of operation shall must provide for, among other matters, preliminary assessments of members for initial expenses to commence operations, establishment of necessary facilities, the operation of the association, assessments of members to defray losses and expenses, compensation to licensed agents or brokers, eligibility requirements, the coverages and amounts of insurance to be provided and premium payment plans. The plan(s) plan or plans of operation must be approved by the department as evidenced by a returned copy stamped approved 'APPROVED' by the department. The plan(s) plan or plans of operation must include a provision that all meetings of the board will be held in Columbia unless approval is given by the director. Approval must consist of request stamped approved 'APPROVED' by the department.
(c) If the director or his designee shall disapprove disapproves all or any part of the proposed plan of operation, he shall do so in writing, specifying in what respect the plan of operation fails to meet the requirements of this act chapter. Unless the board takes other appropriate legal action to contest the disapproval, it shall within thirty days thereafter file within thirty days of the disapproval for his the director's review an appropriately revised plan of operation.
(d) If, after a hearing, the director or his designee finds that any activity or practice of insurers participating in the association or any other 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 the activity or practice is unfair, unreasonable, or otherwise inconsistent with the provisions of this title and require the discontinuance of such the activity or practice. The director or his designee may establish a residual market mechanism by written order if the director or his designee he finds that the existing residual market mechanism is unfair, unreasonable, or inconsistent with the provisions of this chapter.
(e) Any A revision of the proposed plan of operation or any a subsequent amendments amendment to an approved plan of operation shall be is subject to the provisions in subsection (c) relating to the initial plan of operation.
(f) If no a plan of operation is not submitted to the director or his designee within sixty days after the organizational meeting, the director or his designee shall, after consulting with the representatives of the industry, shall prepare and promulgate a plan of operation in accordance with the requirements of this act chapter, which shall continue in force until superseded by a plan of operation effective in accordance with subsections (b) and (c).
(g) The board, through a separate and distinct subcommittee, also must direct and control the operations and affairs of the Reinsurance Facility as described in Article 5, Chapter 77, Title 38, in the same manner and using the same procedures as provided in this section. All references to the governing board of the Reinsurance Facility are to the separate and distinct subcommittee of the board as described in this section."
B. This section takes effect upon approval by the Governor after March 1, 1999, and remains in effect through February 28, 2003, as provided by Act 154 of 1997.
SECTION 3. A. Section 38-91-310 of the 1976 Code, as added by Act 154 of 1997, is amended to read:
"Section 38-91-310. The board shall have has all power necessary to direct the operation of the association and the Reinsurance Facility, except as specifically may be specifically delegated to others, or reserved to the members in the plan of operation, and may delegate ministerial duties, hire a manager, and contract for goods and services from others."
B. This section takes effect upon approval by the Governor after March 1, 1999, and remains in effect through February 28, 2003, as provided by Act 154 of 1997.
SECTION 4. Section 38-77-585 of the 1976 Code is repealed.
SECTION 5. This act takes effect upon approval by the Governor.
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