Amend the bill, as and if amended, SECTION 1, by striking 38-29-70(8) and inserting:
/ (8) A deposit in this State held pursuant to Sections 38-9-80 and 38-9-90 or otherwise required by the director for the benefit of South Carolina creditors, including policy or contract owners, must be released to the domiciliary receiver upon the entry of a final order of liquidation or order approving a rehabilitation plan of a member insurer in accordance with Section 38-9-150. The Association is entitled to a portion of the deposit in an amount equal to the aggregate of policy or contract owners' claims for which the Association has provided statutory benefits on behalf of the insurer and associated administrative expenses. The amount must be promptly paid to the Association provided such payment does not prejudice the rights of a South Carolina policyholder or creditor of the insurer that is the subject of the liquidation or rehabilitation proceedings. Any amount so paid to the association and retained by it not used in fulfilling the association's obligations must be treated as a distribution of estate assets pursuant to applicable state receivership law dealing with early access disbursements. The director, the Association, and other necessary parties are authorized to enter into agreements to effectuate the intent of this section. /
Amend the bill further, SECTION 1, by striking Section 38-29-90(4) and inserting:
/ (4) The plan of operation may provide that any or all powers and duties of the association, except those under Section 38-29-70(11)(13)(c) and Section 38-29-80, are delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this association, or its equivalent, in two or more states. Such a corporation, association, or organization must be reimbursed for any payments made on behalf of the association and must be paid for its performance of any function of this association. A delegation under this subsection takes effect only with the approval of both the board of directors and the department director or his designee and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter. /
Amend the bill further, SECTION 1, by striking Section 38-29-100(4) and inserting:
/ (4) The liquidator, rehabilitator, or conservator of an impaired or insolvent insurer may notify all interested persons of the effect of this chapter. /
Amend the bill further, SECTION 1, by striking Section 38-29-130(6) and inserting:
/ (6) The recovery procedure shall provide that:
(a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under the order has a right to recover on behalf of the insurer, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the member insurer on its capital stock, made at any time during the five years preceding the petition for liquidation or rehabilitation subject to the limitations of items (b), (c), and (d) of this subsection (6).
(b) No such dividend distribution is recoverable if the insurer shows that when paid the distribution was lawful and reasonable and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.
(c) Any person who was an affiliate that controlled the insurer at the time the distributions were paid is liable up to the amount of distributions he received. Any person who was an affiliate that controlled the insurer at the time the distributions were declared is liable up to the amount of distributions he would have received if they had been paid immediately. If two or more persons are liable with respect to the same distributions, they are jointly and severally liable.
(d) The maximum amount recoverable under this section is the amount needed in excess of all other available assets of the impaired insurer to pay the contractual obligations of the impaired insurer.
(e) If any person liable under item (c) is insolvent, all its affiliates that controlled it at the time the dividend was paid are jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate. /
Amend the bill further, SECTION 1, by striking Section 38-29-200(3) and inserting:
/ (3) The document shall contain a clear and conspicuous disclaimer on its face. The director shall establish the form and content of the disclaimer. The disclaimer shall:
(a) state the name and address of the South Carolina Life and Health Insurance Guaranty Association and insurance department;
(b) prominently warn the policy owner, contract owner, certificate holder, or enrollee that the South Carolina Life and Health Insurance Guaranty Association may not cover the policy or contract or, if coverage is available, it will be subject to substantial limitations and exclusions and conditioned on continued residence in this State;
(c) state the types of policies or contracts for which guaranty funds will provide coverage;
(d) state the member insurer and its agents are prohibited by law from using the existence of the South Carolina Life and Health Insurance Guaranty Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance or health maintenance organization coverage;
(e) state that the policy owner, contract owner, certificate holder, or enrollee should not rely on coverage under the South Carolina Life and Health Insurance Guaranty Association when selecting an insurer or health maintenance organization;
(f) explain rights available and procedures for filing a complaint to allege a violation of any provisions of this chapter; and
(g) provide other information as directed by the director including, but not limited to, sources for information about the financial condition of insurers provided that the information is not proprietary and is subject to disclosure under that state's public records law. /
Renumber sections to conform.
Amend title to conform.