South Carolina Law > Code of Laws > Title 38

SECTION 38-29-10. Short title.

This chapter is known and may be cited as the "South Carolina Life and Accident and Health Insurance Guaranty Association Act".

HISTORY: Former 1976 Code Section 38-29-10 [1962 Code Section 37-1400; 1971 (57) 351; 1986 Act No. 426, Section 1] recodified as Section 38-21-10 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-10 [1962 Code Section 37-561; 1972 (57) 2776] recodified as Section 38-29-10 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, reenacted the section with no apparent changes.

SECTION 38-29-20. Definitions.

As used in this chapter:

(1) "Account" means any of the three accounts created under Section 38-29-50.

(2) "Association" means the South Carolina Life and Accident and Health Insurance Guaranty Association created under Section 38-29-50.

(3) "Authorized assessment" or "authorized" when used in the context of assessments means the board of directors has passed a resolution whereby an assessment will be called immediately or in the future from member insurers for a specified amount. An assessment is authorized when the resolution is passed.

(4) "Benefit plan" means a specific employee, union, or association of natural persons benefit plan.

(5) "Called assessment" or "called" when used in the context of assessments means that notice has been issued by the association to the member insurers requiring that an authorized assessment be paid within the time frame set forth within the notice. An authorized assessment becomes a called assessment when notice is mailed by the association to member insurers.

(6) "Contractual obligation" means any obligation under covered policies, contracts, or certificates under a group policy or contract, or portion thereof for which coverage is provided pursuant to Section 38-29-40.

(7) "Covered policy" or "covered contract" means any policy or contract or portion of a policy or contract within the scope of Section 38-29-40.

(8) "Director" means the Director of the Department of Insurance.

(9) "Extra-contractual claims" includes claims relating to bad faith in the payment of claims, punitive or exemplary damages, or attorney's fees and costs.

(10) "Health benefit plan" means any hospital or medical expense policy or certificate, or health maintenance organization subscriber contract or any other similar health contract. "Health benefit plan" does not include:

(a) accident only insurance;

(b) credit insurance;

(c) dental only insurance;

(d) vision only insurance;

(e) Medicare supplement insurance;

(f) benefits for long-term care, home health care, community-based care, or any combination thereof;

(g) disability income insurance;

(h) coverage for on-site medical clinics; or

(i) specified disease, hospital confinement indemnity, or limited benefit health insurance if the types of coverage do not provide coordination of benefits and are provided under separate policies or certificates.

(11) "Impaired insurer" means a member insurer which, after the effective date of this chapter, is not an insolvent insurer but has been placed under an order of rehabilitation or conservation by a court of competent jurisdiction.

(12) "Insolvent insurer" means a member insurer which, after the effective date of this chapter, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency.

(13) "Member insurer" means an insurer or health maintenance organization authorized to transact in this State any kind of insurance to which this chapter applies under Section 38-29-40. This includes an insurer or health maintenance organization whose authority to transact business in this State may have been suspended, revoked, not renewed, or voluntarily withdrawn but does not include:

(a) a hospital or medical service organization, whether profit or nonprofit;

(b) a fraternal benefit society;

(c) a mandatory state pooling plan;

(d) a mutual assessment company or other person that operates on an assessment basis;

(e) an insurance exchange;

(f) an organization that has a certificate or license limited to the issuance of charitable gift annuities under Section 38-5-20; or

(g) an entity similar to any of the above.

(14) "Moody's Corporate Bond Yield Average" means the Monthly Average Corporates as published by Moody's Investors Service, Inc., or any successor thereto.

(15) "Owner" of a policy or contract and "policy holder", "policy owner", and "contract owner" means the person who is identified as the legal owner under the terms of the policy or contract or who is otherwise vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and properly recorded as the owner on the books of the member insurer. The terms owner, contract owner, policyholder and policy owner do not include persons with a mere beneficial interest in a policy or contract.

(16) "Person" means an individual, corporation, limited liability company, partnership, association, governmental body, or entity or voluntary organization.

(17) "Premiums" means amounts or considerations received on covered policies or contracts less returned premiums, considerations and deposits and less dividends and experience credits. "Premiums" does not include amounts or considerations received for policies or contracts or for the portions of policies or contracts for which coverage is not provided pursuant to Section 38-29-40 except that assessable premiums may not be reduced on account of the provisions of Section 38-29-40 relating to interest limitations and limitations with respect to one individual, one participant, and one policy or contract owner. "Premiums" does not include premiums on an unallocated annuity contract or, with respect to multiple nongroup policies of life insurance owned by one owner, whether the policy or contract owner is an individual, firm, corporation or other person, and whether the persons insured are officers, managers, employees or other persons, premiums in excess of $5,000,000 with respect to these policies or contracts, regardless of the number of policies or contracts held by the owner.

(18) "Principal place of business" means the state in which a natural person who establishes policies or contracts for the direction, control, and coordination of the operations of the entity as a whole primarily exercises that function, determined by the association after consideration of the state in which the:

(a) primary executive and administrative headquarters of the entity is located;

(b) principal office of the chief executive officer of the entity is located;

(c) board of directors conducts the majority of its meetings;

(d) executive or management committee of the board of directors of the entity conducts the majority of its meetings;

(e) management of the overall operations of the entity is directed; and

(f) holding company or controlling affiliate has its principal place of business in the case of a benefit plan by affiliated companies comprising a consolidated corporation.

However, in the case of a plan sponsor, if more than fifty percent of the participants in the benefit plan are employed in a single state, that state is deemed to be the principal place of business of the plan sponsor.

The principal place of business of a plan sponsor of a benefit plan is deemed to be the principal place of business of the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan that, in lieu of a specific or clear designation of a principal place of business, shall be deemed to be the principal place of business of the employer or employee organization that has the largest investment in the benefit plan in question.

(19) "Receivership court" means the court in the insolvent or impaired insurer's state with jurisdiction over the conservation, rehabilitation, or liquidation of the member insurer.

(20) "Resident" means a person who resides in this State at the time the impairment as determined by a court of appropriate jurisdiction and to whom contractual obligations are owed. A person may be a resident of only one state, which in the case of a person other than a natural person shall be its principal place of business. Citizens of the United States that are either residents of foreign countries, or residents of United States' possessions, territories, or protectorates that do not have an association similar to the association created by this chapter, are deemed residents of the state of domicile of the member insurer that issued the policies or contracts.

(21) "State" means a state, the District of Columbia, Puerto Rico, and a United States' possession, territory, or protectorate.

(22) "Structured settlement annuity" means an annuity purchased in order to fund periodic payments for a plaintiff or other claimant in payment for or with respect to personal injury suffered by the plaintiff or other claimant.

(23) "Supplemental contract" means a written agreement entered into for the distribution of proceeds under a life, health, or annuity policy or contract.

(24) "Unallocated annuity contract" means an annuity contract or group annuity certificate that is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under the contract or certificate.

HISTORY: Former 1976 Code Section 38-29-20 [1962 Code Section 37-1401; 1971 (57) 351] recodified as Section 38-21-20 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-20 [1962 Code Section 37-565; 1972 (57) 2776; 1977 Act No. 69 Section 1] recodified as Section 38-29-20 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, rewrote the section.

SECTION 38-29-30. Declaration of purpose.

(1) The purpose of this chapter is to protect, subject to certain limitations, the persons specified in Section 38-29-40(1) against failure in the performance of contractual obligations of certain life, health, and annuity policies, plans, or contracts due to the impairment or insolvency of the member insurer issuing these policies, plans, or contracts.

(2) To provide this protection, an association of member insurers is created to pay benefits and continue coverage in the manner provided for in this chapter and the member insurers are subject to an assessment to provide funds to carry out this purpose.

HISTORY: Former 1976 Code Section 38-29-30 [1962 Code Section 37-1402; 1971 (57) 351; 1986 Act No. 426, Section 2] recodified as Section 38-21-30 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-30 [1962 Code Section 37-562; 1972 (57) 2776] recodified as Section 38-29-30 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, rewrote the section.

SECTION 38-29-40. Application of chapter; limitations.

(1)(a) The provisions of this chapter shall provide coverage to a person, regardless of where they reside, excluding nonresident certificate holders under group policies or contracts, who is the beneficiary, assignee, or payee, including health care providers rendering services covered under health insurance policies or certificates, of the persons covered under this section.

(b) The provisions of this chapter shall provide coverage to a person who is the owner of, certificate holder, or enrollee under a policy or contract, other than a structured settlement annuity, and is:

(i) a resident; or

(ii) not a resident, but under all of the following conditions:

(A) the member insurer that issued the policies or contracts is domiciled in this State;

(B) the states in which the person resides have associations similar to the association created by this chapter;

(C) the person is not eligible for coverage by an association in any other state due to the fact that the insurer or health maintenance organization was not licensed in the state at the time specified in the state's guaranty association law.

(c) The provisions of this chapter shall provide coverage to a person who is a payee or a beneficiary if the payee is deceased under a structured settlement annuity if the payee:

(i) is a resident, regardless of where the contract owner resides;

(ii) is not a resident but the contract owner is a resident; or

(iii) is not a resident but:

(A) the insurer that issued the structured settlement annuity is domiciled in this State; and

(B) the state in which the contract owner resides has an association similar to the association created pursuant to this chapter but the payee and contract owner are not eligible for coverage by the association of the state in which they reside.

(d) The provisions of this chapter shall not provide coverage to a person who:

(i) is a payee of a contract owner resident of this State, if the payee is afforded any coverage by the association of another state; or

(ii) acquires rights to receive payments through a structured settlement factoring transaction as defined in 26 U.S.C. Section 55891(c)(3)(A), regardless of when the transaction occurred.

(e) This chapter is intended to provide coverage to a person who is a resident of this State and, in special circumstances, to a nonresident. In order to avoid duplicate coverage, if a person who would otherwise receive coverage under this chapter is provided coverage under the laws of any other state, the person may not be provided coverage under this chapter. In determining the application of the provisions of this subsection in situations where a person could be covered by the association of more than one state, whether as an owner, payee, enrollee, beneficiary, or assignee, this chapter may be construed in conjunction with other state laws to result in coverage by only one association.

(2)(a) This chapter shall provide coverage for policies or contracts of direct, nongroup life insurance, health insurance including health maintenance organization subscriber contracts and certificates, or annuities, for certificates under direct group policies and contracts, and for supplemental contracts to any of these, in each case issued by member insurers, except as limited by this chapter. Annuity contracts and certificates under group annuity contracts include, but are not limited to, allocated funding agreements, structured settlement annuities, and any immediate or deferred annuity contracts.

(b) Except as otherwise provided, this chapter does not provide coverage for:

(i) a portion of a policy or contract or part thereof not guaranteed by the member insurer, or under which the risk is borne by the policy or contract owner;

(ii) a policy or contract of reinsurance, unless assumption certificates have been issued pursuant to the reinsurance policy or contract;

(iii) a portion of a policy or contract, other than a portion, including a rider, that provides long-term care or any other health insurance benefits, to the extent the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value:

(A) averaged over the period of four years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier, exceeds the rate of interest determined by subtracting two percentage points from Moody's Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four years before the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier; and

(B) on and after the date on which the member insurer becomes an impaired or insolvent insurer, whichever is earlier, exceeds the rate of interest determined by subtracting three percentage points from Moody's Corporate Bond Yield Average as most recently available;

(iv) any policy or contract issued by assessment mutuals, fraternals, and nonprofit hospital and medical service plans;

(v) a portion of a policy or contract issued to a plan or program of an employer, association, or other person to provide life, health, or annuity benefits to its employees, members, or others, to the extent that the plan or program is self-funded or uninsured including, but not limited to, benefits payable by an employer, association, or other person under:

(A) a multiple employer welfare arrangement as defined in 29 U.S.C. Section 1002(40);

(B) a minimum premium group insurance plan;

(C) a stop-loss group insurance plan; or

(D) an administrative services-only contract;

(vi) a portion of a policy or contract to the extent that it provides for:

(A) dividends or experience rating credits;

(B) voting rights; or

(C) payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract;

(vii) a portion of a policy or contract to the extent that the assessments required by Section 38-29-80 with respect to the policy or contract are preempted by federal or state law;

(viii) an obligation that does not arise under the express written terms of the policy or contract issued by the member insurer to the enrollee, certificate holder, contract owner, or policy owner, including without limitation:

(A) claims based on marketing materials;

(B) claims based on side letters, riders, or other documents that were issued by the member insurer without meeting applicable policy or contract form filing or approval requirements;

(C) misrepresentations of or regarding policy or contract benefits;

(D) extra-contractual claims; or

(E) a claim for penalties or consequential or incidental damages;

(ix) a contractual agreement that establishes the member insurer's obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer;

(x) an unallocated annuity contract;

(xi) a portion of a policy or contract to the extent it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owner's rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier. If a policy's or contract's interest or changes in value are credited less frequently than annually, then for purposes of determining the values that have been credited and are not subject to forfeiture, the interest or change in value determined by using the procedures defined in the policy or contract will be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture;

(xii) a policy or contract providing any hospital, medical, prescription drug, or other health care benefits pursuant to 42 U.S.C. Chapter 7, Subchapter XVIII, Part C or Part D; 42 U.S.C. Chapter 7, Subchapter XIX; or 42 U.S.C. Chapter 7; or any regulations issued pursuant thereto; or

(xiii) structured settlement annuity benefits to which a payee or beneficiary has transferred his rights in a structured settlement factoring transaction as defined in 26 U.S.C. Section 5891(c)(3)(A), regardless of when the transaction occurred before or after such section became effective.

(c) The exclusion from coverage referenced in subitem (iii) does not apply to any portion of a policy or contract, including a rider that provides long-term care or any other health insurance benefits.

(3) The benefits that the association may become obligated to cover may not exceed the lesser of:

(a) the contractual obligations for which the member insurer is liable or would have been liable if it were not an impaired or insolvent insurer; or

(b)(i) with respect to one life, regardless of the number of policies or contracts:

(A) $300,000 in life insurance death benefits, but not more than $300,000 in net cash surrender and net cash withdrawal values for life insurance;

(B) for health insurance benefits:

(1) $300,000 for coverages not defined as disability income insurance or health benefit plans or long-term care insurance, including any net cash surrender and net cash withdrawal values;

(2) $300,000 for disability income insurance and $300,000 for long-term care insurance;

(3) $500,000 for health benefit plans;

(C) $300,000 in the present value of annuity benefits, including net cash surrender and net cash withdrawal values;

(ii) with respect to each payee of a structured settlement annuity or beneficiary if the payee is deceased, $300,000 in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any;

(iii) the association is not obligated to cover more than an aggregate of $300,000 in benefits with respect to any one life except with respect to benefits for health benefit plans, in which case the aggregate liability of the association shall not exceed $500,000 with respect to any one individual or with respect to one owner of multiple nongroup policies of life insurance, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, more than $5,000,000 in benefits, regardless of the number of policies and contracts held by the owner;

(iv) the limitations on the benefits for which the association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired or insolvent insurer attributable to covered policies. The costs of the association's obligations may be met by the use of assets attributable to covered policies or reimbursed to the association pursuant to its subrogation and assignment rights;

(v) for purposes of this chapter, benefits provided by a long-term care rider to a life insurance policy or annuity contract are considered the same type of benefits as the base life insurance policy or annuity contract to which it relates.

(4) In performing its obligations to provide coverage, the association may not be required to guarantee, assume, reinsure, reissue, or perform, or cause to be guaranteed, assumed, reinsured, or reissued, or performed, the contractual obligations of the insolvent or impaired insurer under a covered policy or contract that does not materially affect the economic values or economic benefits of the covered policy or contract.

HISTORY: Former 1976 Code Section 38-29-40 [1962 Code Section 37-1403; 1971 (57) 351] recodified as Section 38-21-40 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-40 [1962 Code Section 37-563; 1972 (57) 2776] recodified as Section 38-29-40 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2008 Act No. 348, Section 11, eff June 16, 2008; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, rewrote the section.

SECTION 38-29-50. Association created; membership as a condition of authority to transact insurance; accounts; supervision.

(1) There is created a nonprofit legal entity to be known as the South Carolina Life and Accident and Health Insurance Guaranty Association. All member insurers are and must remain members of the association as a condition of their authority to transact insurance in this State. The association shall perform its functions under the plan of operation established and approved under Section 38-29-90 and shall exercise its powers through a board of directors established under Section 38-29-60. For purposes of administration and assessment, the association shall maintain three accounts:

(a) the accident and health insurance account;

(b) the life insurance account; and

(c) the annuity account.

(2) The association is under the immediate supervision of the department and is subject to the applicable insurance laws of this State.

HISTORY: Former 1976 Code Section 38-29-50 [1962 Code Section 37-1404; 1971 (57) 351; 1986 Act No. 426, Section 3] recodified as Section 38-21-50 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-50 [1962 Code Section 37-566; 1972 (57) 2776] recodified as Section 38-29-50 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, reenacted the section with no apparent changes.

SECTION 38-29-60. Board of directors.

(1) The board of directors of the association shall consist of not less than five nor more than eleven members serving terms as established in the plan of operation. Member insurers shall select the members of the board subject to the director's approval. Any vacancies on the board must be filled for the remaining period of the term by a person elected by a majority vote of the remaining board members and subject to approval by the director.

(2) In approving selections or in appointing members to the board, the director shall consider, among other things, whether all member insurers are fairly represented.

(3) Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors, but members of the board may not otherwise be compensated by the association for their services.

HISTORY: Former 1976 Code Section 38-29-60 [1962 Code Section 37-1405; 1971 (57) 351; 1986 Act No. 426, Section 4] recodified as Section 38-21-60 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-60 [1962 Code Section 37-567; 1972 (57) 2776] recodified as Section 38-29-60 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, in (1), in the first sentence, substituted "eleven members" for "nine members", and in the third sentence, substituted "by a person elected by a majority vote of the remaining board members and subject to approval by the director" for "in the manner described in the plan of operation".

SECTION 38-29-70. Powers and duties of Association.

In addition to the powers and duties enumerated in other sections of this chapter:

(1) If a member insurer is an impaired insurer, the association may, in its discretion, and subject to any conditions imposed by the association that do not impair the contractual obligations of the impaired insurer and that are approved by the director:

(a) guarantee, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, any or all of the covered policies or contracts of the impaired insurer; and

(b) provide such monies, pledges, loans, notes, guarantees, or other means as are proper and assure payment of the impaired insurer's pending contractual obligations.

(2) If a member insurer is an insolvent insurer, the association shall, in its discretion, either:

(a)(i)(A) guarantee, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, the policies or contracts of the insolvent insurer; or

(B) assure payment of the contractual obligations of the insolvent insurer; and

(ii) provide monies, pledges, loans, notes, guarantees, or other means reasonably necessary to discharge the association's duties; or

(b) provide benefits and coverages in accordance with the following provisions:

(i) with respect to policies and contracts, assure payment of benefits that would have been payable under the policies or contracts of the insolvent insurer, for claims incurred:

(A) with respect to group policies and contracts, no later than the earlier of the next renewal date under those policies or contracts or forty-five days, but in no event less than thirty days, after the date on which the association becomes obligated with respect to the policies and contracts;

(B) with respect to nongroup policies, contracts, and annuities no later than the earlier of the next renewal date, if applicable, under the policies or contracts or one year, but in no event less than thirty days, from the date on which the association becomes obligated with respect to the policies or contracts;

(ii) make diligent efforts to provide all known insureds, enrollees, or annuitants for nongroup policies and contracts, or group policy or contract owners with respect to group policies and contracts, thirty days' notice of the termination of the benefits provided;

(iii) with respect to nongroup policies and contracts covered by the association, make available to each known insured, enrollee, or annuitant, or owner if other than the insured or annuitant, and with respect to an individual formerly an insured, enrollee, or annuitant under a group policy or contract who is not eligible for replacement group coverage, make available substitute coverage on an individual basis in accordance with the provisions of this section, if the insureds, enrollees, or annuitants had a right under law or the terminated policy, contract, or annuity to convert coverage to individual coverage or to continue an individual policy, contract, or annuity in force until a specified age or for a specified time, during which the insurer or health maintenance organization had no right unilaterally to make changes in any provision of the policy, contract, or annuity or had a right only to make changes in premium by class;

(iv)(A) in providing the substitute coverage, the association may offer either to reissue the terminated coverage or to issue an alternative policy or contract at actuarially justified rates;

(B) alternative or reissued policies or contracts must be offered without requiring evidence of insurability and may not provide for any waiting period or exclusion that would not have applied under the terminated policy or contract;

(C) the association may reinsure any alternative or reissued policy or contract;

(v)(A) alternative policies or contracts adopted by the association are subject to the approval of the director. The association may adopt alternative policies or contracts of various types for future issuance without regard to any particular impairment or insolvency;

(B) alternative policies or contracts must contain at least the minimum statutory provisions required in this State and provide benefits that shall not be unreasonable in relation to the premium charged. The association must set the premium in accordance with a table of rates that it adopts. The premium shall reflect the amount of insurance to be provided and the age and class of risk of each insured, but may not reflect any changes in the health of the insured after the original policy or contract was last underwritten;

(C) any alternative policy or contract issued by the association shall provide coverage of a type similar to that of the policy or contract issued by the impaired or insolvent insurer, as determined by the association;

(vi) if the association elects to reissue terminated coverage at a premium rate different from that charged under the terminated policy or contract, the premium must be actuarially justified and set by the association in accordance with the amount of insurance or coverage provided and the age and class of risk;

(vii) the association's obligations with respect to coverage under any policy or contract of the impaired or insolvent insurer or under any reissued or alternative policy or contract shall cease on the date the coverage or policy or contract is replaced by another similar policy or contract by the policy or contract owner, the insured, the enrollee, or the association;

(viii) when proceeding with respect to a policy or contract carrying guaranteed minimum interest rates, the association shall assure the payment or crediting of a rate of interest consistent with Section 38-29-40.

(3) Nonpayment of premiums within thirty-one days after the date required under the terms of any guaranteed, assumed, alternative, or reissued policy or contract or substitute coverage shall terminate the association's obligations under the policy, contract, or coverage under this chapter with respect to the policy, contract, or coverage, except with respect to any claims incurred or any net cash surrender value which may be due in accordance with the provisions of this chapter.

(4) Premiums due for coverage after entry of an order of liquidation of an insolvent insurer shall belong to and be payable at the direction of the association. If the liquidator of an insolvent insurer requests, the association must provide a report to the liquidator regarding such premium collected by the association. The association is liable for unearned premiums due to policy or contract owners arising after the entry of the order.

(5) The protection provided by this chapter does not apply where any guaranty protection is provided to residents of this State by the laws of the domiciliary state or jurisdiction of the impaired or insolvent insurer other than this State.

(6) In carrying out its duties, the association may, subject to approval by a court in this State, impose:

(a) permanent policy or contract liens in connection with a guarantee, assumption or reinsurance agreement, if the association finds that the amounts which can be assessed under this chapter are less than the amounts needed to assure full and prompt performance of the association's duties, or that the economic or financial conditions as they affect member insurers are sufficiently averse to render the imposition of such permanent policy or contract liens, to be in the public interest;

(b) temporary moratoriums or liens on payments of cash values and policy loans, or any other right to withdraw funds held in conjunction with policies or contracts, in addition to any contractual provisions for deferral of cash or policy loan value. In addition, in the event of a temporary moratorium or moratorium charge imposed by the receivership court on payment of cash values or policy loans, or on any other right to withdraw funds held in conjunction with policies or contracts, out of the assets of the impaired or insolvent insurer, the association may defer the payment of cash values, policy loans, or other rights by the association for the period of the moratorium or moratorium charge imposed by the receivership court, except for claims covered by the association to be paid in accordance with a hardship procedure established by the liquidator or rehabilitator and approved by the receivership court.

(7) The association has no liability for any covered policy of a foreign or alien insurer whose domiciliary jurisdiction or state of entry provides by statute or regulation for residents of this State protection substantially similar to that provided by this chapter for residents of other states. In addition, the association has no liability under this chapter for covered policies of a domestic insurer for residents of another state unless the other state has a guaranty association that provides protection to South Carolina residents substantially similar to that provided by this chapter for residents of other states.

(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.

(9) If the association fails to act within a reasonable period of time with respect to an insolvent insurer, the director shall have the powers and duties of the association under this chapter with respect to the insolvent insurer.

(10) The association may render assistance and advice to the director, upon the director's request, concerning rehabilitation, payment of claims, continuance of coverage, or the performance of other contractual obligations of an impaired or insolvent insurer.

(11) The association shall have standing to appear or intervene before a court or agency in this State with jurisdiction over an impaired or insolvent insurer concerning that which the association is or may become obligated to cover under this chapter or with jurisdiction over any person or property against that which the association may have rights through subrogation or otherwise. Standing shall extend to all matters germane to the powers and duties of the association including, but not limited to, proposals for reinsuring, reissuing, modifying, or guaranteeing the covered policies or contracts of the impaired or insolvent insurer and the determination of the policies or contracts and contractual obligations. The association also shall have the right to appear or intervene before a court or agency in another state with jurisdiction over an impaired or insolvent insurer for which the association is or may become obligated or with jurisdiction over any person or property against whom the association may have rights through subrogation or otherwise.

(12)(a) A person receiving benefits under this chapter is deemed to have assigned the rights under, and any causes of action against any person for losses arising under, resulting from or otherwise relating to, the covered policy or contract to the association to the extent of the benefits received because of this chapter, whether the benefits are payments of or on account of contractual obligations continuation of coverage or provision of substitute or alternative policies, contracts, or coverages. The association may require an assignment to it of such rights and cause of action by any enrollee, payee, policy or contract owner, beneficiary, insured, or annuitant as a condition precedent to the receipt of any rights or benefits conferred by this chapter upon that person.

(b) The subrogation rights of the association under this subsection shall have the same priority against the assets as that possessed by the person entitled to receive benefits under this chapter.

(c) The association has all common law rights of subrogation and any other equitable or legal remedy that would have been available to the impaired or insolvent insurer or owner, beneficiary, enrollee, or payee of a policy or contract with respect to the policy or contracts.

(d) If the preceding provisions are invalid or ineffective with respect to any person or claim for any reason, the amount payable by the association with respect to the related covered obligations must be reduced by the amount realized by any other person with respect to the person or claim that is attributable to the policies or contracts, or portion thereof, covered by the association.

(e) If the association has provided benefits with respect to a covered obligation and a person recovers amounts as to which the association has rights to, the person must pay to the association the portion of the recovery attributable to the policies or contracts covered by the association.

(13) In addition to the rights and powers elsewhere in this chapter, the association may:

(a) enter into such contracts as are necessary or proper to carry out the provisions and purposes of this chapter;

(b) sue or be sued, including taking any legal actions necessary or proper for recovery of any unpaid assessments under Section 38-29-80 and to settle claims or potential claims against it;

(c) borrow money to effect the purposes of this chapter. Any notes or other evidence of indebtedness of the association not in default shall be legal investments for domestic member insurers and may be carried as admitted assets;

(d) employ or retain such persons necessary or appropriate to handle the financial transactions of the association, and to perform such other functions as become necessary or proper under this chapter;

(e) take such legal action as may be necessary or appropriate to avoid or recover payment of improper claims;

(f) exercise, for the purposes of this chapter and to the extent approved by the director, the powers of a domestic life insurer, health insurer, or health maintenance organization, but in no case may the association issue policies or contracts other than those issued to perform its obligations under this chapter;

(g) organize itself as a corporation or in other legal form permitted by the laws of the State;

(h) request information from a person seeking coverage from the association in order to aid the association in determining its obligations under this chapter with respect to the person, and the person shall promptly comply with the request;

(i) unless prohibited by law, in accordance with the terms and conditions of the policy or contract, file for actuarially justified rates or premium increases for any policy or contract for which it provides coverage under this chapter; and

(j) take other necessary or appropriate action to discharge its duties and obligations under this chapter or to exercise its powers under this chapter.

(14) The association may join an organization of one or more other state associations of similar purposes to further the purposes and administer the powers and duties of the association.

(15)(a)(i) At any time within one hundred eighty days of the date of the order of liquidation, the association may elect to succeed to the rights and obligations of the ceding member insurer that relate to policies, contracts, or annuities covered, in whole or in part, by the association, in each case under any one or more reinsurance contracts entered into by the insolvent insurer and its reinsurers and selected by the association. Any such assumption shall be effective as of the date of the order of liquidation. The election shall be effected by the association or the National Organization of Life and Health Insurance Guaranty Association (NOLHGA) on its behalf sending written notice, return receipt requested, to the affected reinsurers.

(ii) To facilitate the earliest practicable decision about whether to assume any of the contracts of reinsurance, and to protect the financial position of the estate, the receiver and each reinsurer of the ceding member insurer must make available upon request to the association or to NOLHGA on its behalf as soon as possible after commencement of formal delinquency proceedings copies of in-force contracts of reinsurance and all related files and records relevant to the determination of whether such contracts should be assumed, and notices of any defaults under the reinsurance contacts or any known event or condition which with the passage of time could become a default under the reinsurance contracts.

(iii) The following applies to reinsurance contracts assumed by the association:

(A) The association is responsible for all unpaid premiums due under the reinsurance contracts for periods both before and after the date of the order of liquidation, and is responsible for the performance of all other obligations to be performed after the date of the order of liquidation, in each case which relate to policies, contracts, or annuities covered, in whole or in part, by the association. The association may charge policies, contracts, or annuities covered in part by the association, through reasonable allocation methods, the costs for reinsurance in excess of the obligations of the association and must provide notice and an accounting of these charges to the liquidator.

(B) The association is entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods after the date of the order of liquidation and that relate to policies, contracts, or annuities covered, in whole or in part, by the association, provided that, upon receipt of any such amounts, the association is obliged to pay to the beneficiary under the policy, contract, or annuity on account of which the amounts were paid a portion of the amount equal to the lesser of:

(1) the amount received by the association; and

(2) the excess of the amount received by the association over the amount equal to the benefits paid by the association on account of the policy, contract, or annuity less the retention of the insurer applicable to the loss or event.

(C) Within thirty days following the association's election, the association and each reinsurer under contracts assumed by the association must calculate the net balance due to or from the association under each reinsurance contract as of the election date with respect to policies, contracts, or annuities covered, in whole or in part, by the association, which calculation shall give full credit to all items paid by either the member insurer or its receiver or the reinsurer prior to the election date. The reinsurer shall pay the receiver any amounts due for losses or events prior to the date of the order of liquidation, subject to any set-off for premiums unpaid for periods prior to the date, and the association or reinsurer shall pay any remaining balance due the other, in each case within five days of the completion of the aforementioned calculation. Any disputes over the amounts due to either the association or the reinsurer shall be resolved by arbitration pursuant to the terms of the affected reinsurance contracts or, if the contract contains no arbitration clause, as otherwise provided by law. If the receiver has received any amounts due to the association, the receiver must remit the same to the association as promptly as practicable.

(D) If the association or receiver on the association's behalf, within sixty days of the election date, pays the unpaid premiums due for periods both before and after the election date that relate to policies, contracts, or annuities covered, in whole or in part, by the association, the reinsurer is not entitled to terminate the reinsurance contracts for failure to pay premiums insofar as the reinsurance contracts relate to policies, contracts, or annuities covered, in whole or in part, by the association, and is not entitled to set-off any unpaid amounts due under other contracts, or unpaid amounts due from parties other than the association, against amounts due the association.

(b) During the period from the date of the order of liquidation until the election date or until one hundred eighty days after the date of the order of liquidation if the election date does not occur:

(i)(A) the association or the reinsurer does not have any rights or obligations under reinsurance contracts that the association has the right to assume whether for periods prior to or after the date of the order of liquidation; and

(B) the reinsurer, the receiver, and the association shall, to the extent practicable, provide each other data and records reasonably requested;

(ii) provided that once the association has elected to assume a reinsurance contract, the parties' rights and obligations must be governed pursuant to this section.

(c) If the association does not elect to assume a reinsurance contract by the election date, the association has no rights or obligations, in each case for periods both before and after the date of the order of liquidation, with respect to the reinsurance contract.

(d) When policies, contracts, or annuities, or covered obligations with respect thereto, are transferred to an assuming insurer, reinsurance on the policies, contracts, or annuities also may be transferred by the association, in the case of contracts assumed, subject to the following:

(i) unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred shall not cover any new policies of insurance, contracts, or annuities in addition to those transferred;

(ii) the obligations described in this section no longer apply with respect to matters arising after the effective date of the transfer; and

(iii) notice must be given in writing, return receipt requested, by the transferring party to the affected reinsurer no less than thirty days prior to the effective date of the transfer.

(e) The provisions of this section supersede the provisions of any state law or of any affected reinsurance contract that provides for or requires any payment of reinsurance proceeds, on account of losses or events that occur in periods after the date of the order of liquidation, to the receiver of the insolvent insurer or any other person. The receiver remains entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods prior to the date of the order of liquidation, subject to applicable set-off provisions.

(f) Except as otherwise provided in this section, nothing in this section alters or modifies the terms and conditions of any reinsurance contract. Nothing in this section abrogates or limits any rights of any reinsurer to claim that it is entitled to rescind a reinsurance contract. Nothing in this section gives a policyholder, contract owner, enrollee, certificate holder, or beneficiary an independent cause of action against a reinsurer that is not otherwise set forth in the reinsurance contract. Nothing in this section limits or affects the association's rights as a creditor of the estate against the assets of the estate. Nothing in this section applies to reinsurance agreements covering property or casualty risks.

(16) The board of directors of the association shall have discretion and may exercise reasonable business judgment to determine the means by which the association is to provide the benefits of this chapter in an economical and efficient manner.

(17) Where the association has arranged or offered to provide the benefits of this chapter to a covered person under a plan or arrangement that fulfills the association's obligations under this chapter, the person is not entitled to benefits from the association in addition to or other than those provided under the plan or arrangement.

(18) Venue in a suit against the association arising under the chapter is in Richland County. The association may not be required to give an appeal bond in an appeal that relates to a cause of action arising under this chapter.

(19) In carrying out its duties in connection with guaranteeing, assuming, reissuing, or reinsuring policies or contracts, the association may issue substitute coverage for a policy or contract that provides an interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value by issuing an alternative policy or contract in accordance with the following provisions:

(a) in lieu of the index or other external reference provided for in the original policy or contract, the alternative policy or contract provides for a fixed interest rate, a payment of dividends with minimum guarantees, or a different method for calculating interest or changes in value;

(b) there is no requirement for evidence of insurability, waiting period, or other exclusion that would not have applied under the replaced policy or contract; and

(c) the alternative policy or contract is substantially similar to the replaced policy or contract in all other material terms.

HISTORY: Former 1976 Code Section 38-29-70 [1962 Code Section 37-1406; 1971 (57) 351; 1986 Act No. 426, Section 5] recodified as Section 38-21-70 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-70 [1962 Code Section 37-568; 1972 (57) 2776; 1977 Act No. 69 Section 2] recodified as Section 38-29-70 by 1987 Act No. 155, Section 1; 1988 Act No. 326, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, rewrote the section.

SECTION 38-29-80. Assessments.

(1) For the purpose of providing the funds necessary to carry out the powers and duties of the association, the board of directors shall assess the member insurers, separately for each account, at times and for amounts as the board finds necessary. Payment is due thirty days after written notice to the member insurers and shall accrue interest as set forth in the plan of operation.

(2) There are two classes of assessments, as follows:

(a) Class A assessments are made for the purpose of meeting administrative costs and other general expenses not related to a particular impaired insurer.

(b) Class B assessments are made to the extent necessary to carry out the powers and duties of the association under Section 38-29-70 with regard to an insolvent or impaired insurer.

(3)(a) The amount of any Class A assessment for each account must be determined by the board and may be authorized and called on a pro rata or non pro rata basis. If called on a pro rata basis, the board may provide that the assessment must be credited against future Class B assessments.

(b) The amount of a Class B assessment, except for assessments related to long-term care insurance, must be allocated for assessment purposes between the accounts pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer or any other standard deemed by the board in its sole discretion as being fair and reasonable under the circumstances.

(c) The amount of the Class B assessment for long-term care insurance written by the impaired or insolvent insurer must be allocated according to a methodology included in the plan of operation and approved by the director. The methodology must provide for fifty percent of the assessment to be allocated to accident and health member insurers and fifty percent to be allocated to life and annuity member insurers.

(d) Class B assessments against member insurers for each account must be in proportion to the premiums received on business in this State by each assessed member insurer on policies or contracts covered by each account for the three most recent calendar years for which information is available preceding the year in which the member insurer became insolvent. In the case of an assessment of an impaired insurer, the assessment must be in proportion to the premiums received on business in this State for those calendar years by all assessed member insurers.

(e) Assessments for funds to meet the requirements of the association with respect to an impaired or insolvent insurer may not be authorized or called until necessary to implement the purposes of this chapter. Classification and computation of assessments under this subsection must be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. The association shall notify each member insurer of its anticipated pro rata share of an authorized assessment not yet called within one hundred eighty days after the assessment is authorized.

(4) The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. In the event an assessment against a member insurer is abated or deferred, in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section. Once the conditions that caused a deferral have been removed or rectified, the member insurer must pay all assessments that were deferred pursuant to a repayment plan approved by the association.

(5)(a)(i) The total of all assessments authorized by the association with respect to a member insurer for each account shall not in one calendar year exceed four percent of that member insurer's average annual premiums received in this State on the policies and contracts covered by the account during the three calendar years preceding the year in which the member insurer became an impaired or insolvent insurer.

(ii) If two or more assessments are authorized in one calendar year with respect to member insurers that become impaired or insolvent in different calendar years, the average annual premiums for purposes of the aggregate assessment percentage limitation must be equal and limited to the higher of the three-year average annual premiums for the applicable account as calculated pursuant to this section.

(iii) If the maximum assessment, together with the other assets of the association in any account, does not provide in any one year in any account an amount sufficient to carry out the responsibilities of the association, the necessary additional funds must be assessed as soon as permitted by this chapter.

(b) The board may provide in the plan of operation a method of allocating funds among claims, whether relating to one or more impaired or insolvent insurers, when the maximum assessment will be insufficient to cover anticipated claims.

(c) If the maximum assessment for the life or annuity account in one year does not provide an amount sufficient to carry out the responsibilities of the association, then the board shall assess the other accounts for the necessary additional amount, subject to the maximum provided in this section.

(6) The board may, by an equitable method established in the plan of operation, refund to member insurers in proportion to the contribution of each member insurer to that account, the amount by which the assets of the account exceed the amount the board finds is necessary to carry out during the coming year the obligations of the association with regard to that account, including assets accruing from assignment, subrogation, net realized gains, and income from investments. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the association and for future claims.

(7) It is proper for any member insurer, in determining its premium rates and policy owner dividends as to any kind of insurance or health maintenance organization business within the scope of this chapter, to consider the amount reasonably necessary to meet its assessment obligations under this chapter.

(8) The association must issue to each member insurer paying an assessment under this chapter, other than a Class A assessment, a certificate of contribution, in a form prescribed by the director, for the amount of the assessments so paid. All outstanding certificates must be of equal dignity and priority without reference to amounts or dates of issue. A certificate of contribution may be shown by the member insurer in its financial statement as an asset in the form and for the amount and for a period of five years.

(9)(a) A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment as set forth in the notice provided by the association. The payment must be available to meet association obligations during the pendency of the protest or any subsequent appeal. Payment shall be accompanied by a statement in writing that the payment is made under protest and setting forth a brief statement of the grounds for the protest.

(b) Within sixty days following the payment of an assessment under protest by a member insurer, the association shall notify the member insurer in writing of its determination with respect to the protest unless the association notifies the member insurer that additional time is required to resolve the issues raised by the protest.

(c) Within thirty days after a final decision has been made, the association shall notify the protesting member insurer in writing of that final decision. Within sixty days of receipt of notice of the final decision, the protesting member insurer may appeal that final action to the director.

(d) In the alternative to rendering a final decision with respect to a protest based on a question regarding the assessment base, the association may refer protests to the director for a final decision, with or without a recommendation from the association.

(e) If the protest or appeal on the assessment is upheld, the amount paid in error or excess must be returned to the member insurer. Interest on a refund due a protesting member insurer shall be paid at the rate actually earned by the association.

(10) The association may request information of member insurers in order to aid in the exercise of its power under this section and member insurers shall promptly comply with a request.

HISTORY: Former 1976 Code Section 38-29-80 [1962 Code Section 37-1407; 1971 (57) 351; 1986 Act No. 426, Section 5A] recodified as Section 38-21-80 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-80 [1962 Code Section 37-569; 1972 (57) 2776; 1977 Act No. 69 Section 3; 1980 Act No. 345, Section 2] recodified as Section 38-29-80 by 1987 Act No. 155, Section 1; 1988 Act No. 326, Section 2; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, rewrote the section.

SECTION 38-29-90. Plan of operation.

(1) The association shall submit to the department a plan of operation and any amendments necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments become effective upon the written approval of the director or his designee or thirty days after submission if the plan of operation and any amendments have not been rejected by the director. If the association fails to submit suitable amendments to the plan, the director or his designee shall, after notice and hearing, adopt and promulgate reasonable amendments necessary or advisable to effectuate the provisions of this chapter. These amendments must continue in force until modified by the director or his designee or superseded by amendments submitted by the association and approved by the director or his designee.

(2) All member insurers shall comply with the plan of operation.

(3) The plan of operation shall, in addition to requirements enumerated elsewhere in this chapter:

(a) establish procedures for handling the assets of the association;

(b) establish the amount and method of reimbursing members of the board of directors under Section 38-29-60;

(c) establish regular places and times for meetings of the board of directors;

(d) establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors;

(e) establish the procedure whereby selections for the board of directors must be made and submitted to the department director;

(f) establish any additional procedures for assessments under Section 38-29-80;

(g) contain additional provisions necessary or proper for the execution of the powers and duties of the association;

(h) establish procedures whereby a member of the board of directors may be removed for cause including a case where a member insurer director becomes an impaired or insolvent insurer;

(i) require the board of directors to establish a policy and procedures for addressing conflicts of interest.

(4) The plan of operation may provide that any or all powers and duties of the association, except those under Section 38-29-70(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.

HISTORY: Former 1976 Code Section 38-29-90 [1962 Code Section 37-1408; 1971 (57) 351; 1986 Act No. 426, Section 6] recodified as Section 38-21-90 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-90 [1962 Code Section 37-570; 1972 (57) 2776] recodified as Section 38-29-90 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, in (1), in the second sentence, inserted "or thirty days after submission if the plan of operation and any amendments have not been rejected by the director"; in (3), added (h) and (i) and made nonsubstantive changes; and in (4), in the first sentence, substituted "Section 38-29-70(13)(c)" for "Section 38-29-70(11)(c)".

SECTION 38-29-100. Duties and powers of director; suspension or revocation of certificate of authority; appeals from board of directors; notice to interested persons of effect of chapter.

In addition to the duties and powers enumerated elsewhere in this chapter:

(1) The director or his designee:

(a) shall notify the board of directors of the existence of an impaired insurer no later than three days after a determination of impairment is made or he receives notice of impairment;

(b) shall, upon request of the board of directors, provide the association with a statement of the premiums written in this State and any other appropriate state for each member insurer;

(c) shall, when an impairment is declared and the amount of the impairment is determined, serve a demand upon the impaired insurer to make good the impairment within a reasonable time. Notice to the impaired insurer constitutes notice to its shareholders, if any. The failure of the insurer to comply promptly with the demand does not excuse the association from the performance of its powers and duties under this chapter.

(2) The director or his designee may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this State of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the director or his designee may levy a forfeiture on a member insurer that fails to pay an assessment when due. The forfeiture may not exceed five percent of the unpaid assessment per month but may not be less than one hundred dollars a month.

(3) A final action of the board of directors or the association may be appealed to the director as provided by law by any member insurer if the appeal is taken within sixty days of receipt of notice of the final action being appealed. A final action or order of the director is subject to judicial review in a court of competent jurisdiction in accordance with the laws of this State.

(4) The liquidator, rehabilitator, or conservator of an impaired or insolvent insurer may notify all interested persons of the effect of this chapter.

HISTORY: Former 1976 Code Section 38-29-100 [1962 Code Section 37-1408.1; 1971 (57) 351] repealed by 1986 Act No. 426, Section 23; Former 1976 Code Section 38-17-100 [1962 Code Section 37-571; 1972 (57) 2776] recodified as Section 38-29-100 by 1987 Act No. 155, Section 1; 1988 Act No. 374, Section 11; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, rewrote the section.

SECTION 38-29-110. Detection and prevention of insurer impairments.

To aid in the detection and prevention of insurer impairments and insolvencies:

(1) It is the duty of the director:

(a) to notify the commissioners of all the other states and territories of the United States and the District of Columbia within thirty days following an action taken or the date the action occurs, when the director takes any of the following actions against a member insurer:

(i) revocation of license;

(ii) suspension of license; or

(iii) makes a formal order that the member insurer restrict its premium writing, obtain additional contributions to surplus, withdraw from the State, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policy owners, contract owners, certificate holders, or creditors;

(b) to report to the board of directors when the director has taken any of the actions set forth in subitem (a) or has received a report from any other director indicating that any such action has been taken in another state. The report to the board of directors shall contain all significant details of the action taken or the report received from another commissioner;

(c) to report to the board of directors when the director has reasonable cause to believe from an examination, whether completed or in process, of any member insurer that the insurer may be an impaired or insolvent insurer;

(d) to furnish to the board of directors the National Association of Insurance Commissioners' (NAIC) Insurance Regulatory Information System (IRIS) ratios and listings of companies not included in the ratios developed by the NAIC, and the board may use the information contained therein in carrying out its duties and responsibilities under this section. The report and the information contained therein must be kept confidential by the board of directors until such time as made public by the director or other lawful authority.

(2) The director may seek the advice and recommendations of the board of directors concerning any matter affecting the duties and responsibilities of the director regarding the financial condition of member insurers, insurers, or health maintenance organizations seeking admission to transact business in this State.

(3) The board of directors may, upon majority vote, make reports and recommendations to the director upon any matter germane to the solvency, liquidation, rehabilitation, or conservation of a member insurer or germane to the solvency of any insurer or health maintenance organization seeking to do business in this State. These reports and recommendations may not be considered public documents.

(4) The board of directors may, upon majority vote, notify the director of any information indicating a member insurer may be an impaired or insolvent insurer.

(5) The board of directors may, upon majority vote, make recommendations to the director for the detection and prevention of member insurer insolvencies.

HISTORY: Former 1976 Code Section 38-29-110 [1962 Code Section 37-1409; 1971 (57) 351; 1986 Act No. 426, Section 7] recodified as Section 38-21-100 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-110 [1962 Code Section 37-572; 1972 (57) 2776] recodified as Section 38-29-110 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, rewrote the section.

SECTION 38-29-120. Appointment of special deputy for director.

The association may recommend the appointment of a person to serve as a special deputy to act for the director or his designee and under his supervision in the liquidation, rehabilitation, or conservation of a member insurer.

HISTORY: Former 1976 Code Section 38-29-120 [1962 Code Section 37-1410; 1971 (57) 351] recodified as Section 38-21-110 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-120 [1962 Code Section 37-573; 1972 (57) 2776] recodified as Section 38-29-120 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, reenacted the section with no apparent changes.

SECTION 38-29-130. Assessment liability of insureds not reduced; records of Association; Association considered creditor of impaired insurer; distribution of assets of impaired insurer; unfair trade practice; recovery procedure.

(1) Nothing in this chapter may be construed to reduce the liability for unpaid assessments of the insureds of an impaired or insolvent insurer operating under a plan with assessment liability.

(2) Records must be kept of all negotiations and meetings of the board of directors to discuss the activities of the association in carrying out its powers and duties under Section 38-29-70. Records of these meetings must be made public only upon the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent insurer, upon the termination of the impairment or insolvency of the insurer, or upon the order of a court of competent jurisdiction. Nothing in this subsection limits the duty of the association to render a report of its activities under Section 38-29-140.

(3) For the purpose of carrying out its obligations under this chapter, the association is considered to be a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies reduced by any amounts to which the association is entitled as subrogee pursuant to Section 38-29-70(12). All assets of the impaired or insolvent insurer attributable to covered policies must be used to continue all covered policies and pay all contractual obligations of the impaired or insolvent insurer as required by this chapter. Assets attributable to covered policies, as used in this subsection, are that proportion of the assets which the reserves that should have been established for those policies bear to the reserve that should have been established for all policies of insurance written by the impaired or insolvent insurer.

(4) As a creditor of the impaired or insolvent insurer as established in this section and consistent with Section 38-27-530, the association and other similar associations are entitled to receive a disbursement of assets out of the marshaled assets, from time to time as the assets become available to reimburse it, as a credit against contractual obligations under this chapter. If the liquidator has not, within one hundred twenty days of a final determination of insolvency of a member insurer by the receivership court, made an application to the court for the approval of a proposal to disburse assets out of marshaled assets to guaranty associations having obligations because of the insolvency, then the association is entitled to make application to the receivership court for approval of its own proposal to disburse these assets.

(5)(a) Prior to the termination of any liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the association, the shareholders, policy and contract owners, certificate holders, and enrollees of the impaired or insolvent insurer, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of the impaired or insolvent insurer. In this determination, consideration must be given to the welfare of the policy and contract owners, certificate holders, and enrollees of the continuing or successor insurer.

(b) No distribution to stockholders, if any, of an impaired or insolvent insurer may be made until and unless the total amount of assessments levied by the association with respect to the insurer plus interest has been fully recovered by the association.

(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.

(b) No such 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.

HISTORY: Former 1976 Code Section 38-29-130 [1962 Code Section 37-1411; 1971 (57) 351] recodified as Section 38-21-120 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-130 [1962 Code Section 37-574; 1972 (57) 2776] recodified as Section 38-29-130 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, rewrote the section.

SECTION 38-29-140. Examination and regulation of Association; annual reports.

The association is subject to examination and regulation by the department. The board of directors shall annually submit to the department, by May first, a financial report for the preceding calendar year in a form approved by the director or his designee and a report of its activities during the preceding calendar year.

HISTORY: Former 1976 Code Section 38-29-140 [1962 Code Section 37-1412; 1971 (57) 351; 1986 Act No. 426, Section 8] recodified as Section 38-21-130 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-140 [1962 Code Section 37-575; 1972 (57) 2776] recodified as Section 38-29-140 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, reenacted the section with no apparent changes.

SECTION 38-29-150. Exemption of Association from fees and taxes.

The association is exempt from payment of all fees and all state, county, and municipal taxes.

HISTORY: Former 1976 Code Section 38-29-150 [1962 Code Section 37-1413; 1971 (57) 351; 1986 Act No. 426, Section 9] recodified as Section 38-21-140 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-150 [1962 Code Section 37-576; 1972 (57) 2776] recodified as Section 38-29-150 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, reenacted the section with no apparent changes.

SECTION 38-29-160. Showing certificate of contribution as asset; offset of write-off against tax liability; payment of certain refunds to State.

(1) Unless a longer period has been allowed by the director or his designee, a member insurer, at its option, has the right to show a certificate of contribution as an asset in the form approved by the director or his designee pursuant to Section 38-29-80(8) at percentages of the original face amount approved by the director or his designee, for calendar years as follows:

(a) one hundred percent for the calendar year of issuance;

(b) eighty percent for the first calendar year after the year of issuance;

(c) sixty percent for the second calendar year after the year of issuance;

(d) forty percent for the third calendar year after the year of issuance;

(e) twenty percent for the fourth calendar year after the year of issuance; and

(f) zero percent for the fifth calendar year after the year of issuance and thereafter.

(2) The insurer may offset the amount written off by it in a calendar year under subsection (1) against its premium, or income, tax liability to this State accrued with respect to business transacted in that year.

(3) Any sums acquired by refund, pursuant to Section 38-29-80(6), from the association which have previously been written off by contributing insurers and offset against premium (or income) taxes as provided in subsection (2) of this section and are not then needed for purposes of this chapter must be paid by the association to the department and by him deposited with the State Treasurer for credit to the general fund of this State.

HISTORY: Former 1976 Code Section 38-29-160 derived from 1962 Code Section 37-1414; 1971 (57) 351 recodified as Section 38-21-160 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-160 [1962 Code Section 37-577; 1972 (57) 2776] recodified as Section 38-29-160 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, in (1), inserted the (a) to (f) designators, and made nonsubstantive changes.

SECTION 38-29-170. Immunity from liability for action taken under chapter.

There is no liability on the part of, and no cause of action of any nature may arise against, any member insurer or its agents or employees, the association's agents or employees, members of the board of directors, or the director or his representatives for any action taken or omission by them in the authorized performance of their powers and duties under this chapter. This section does not relieve the association of any of its statutory obligations. The immunity extends to the participation in an organization of one or more state associations of similar purposes and to such organization, its agents, and employees.

HISTORY: Former 1976 Code Section 38-29-170 [1962 Code Section 37-1415; 1971 (57) 351; 1986 Act No. 426, Section 12] recodified as Section 38-21-180 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-170 [1962 Code Section 37-578; 1972 (57) 2776] recodified as Section 38-29-170 by 1987 Act No. 155, Section 1; 1988 Act No. 379, Section 3; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, in the first sentence, inserted "or omission" following "any action taken", in the second sentence, substituted "statutory obligations" for "liability", and added the third sentence.

SECTION 38-29-180. Stay of proceedings involving impaired insurer; setting aside default judgment.

All proceedings in which the impaired or insolvent insurer is a party in any court in this State must be stayed one hundred eighty days from the date an order of liquidation, rehabilitation, or conservation is final to permit proper legal action by the association on any matters germane to its powers or duties. As to a judgment under any decision, order, verdict, or finding based on default the association may apply to have the judgment set aside by the same court that made the judgment and must be permitted to defend against the suit on the merits.

HISTORY: Former 1976 Code Section 38-29-180 [1962 Code Section 37-1416; 1971 (57) 351] recodified as Section 38-21-190 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-180 [1962 Code Section 37-579; 1972 (57) 2776] recodified as Section 38-29-180 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, in the first sentence, inserted "or insolvent" following "impaired" and substituted "one hundred eighty days" for "sixty days".

SECTION 38-29-190. Final date for filing claims.

For domestic insolvencies, the court shall fix a date, no less than four months from the date of the order, as the last day for the filing of claims, together with proper proofs thereof, with the association and shall prescribe the notice that must be given to insureds and claimants of the date. Prior to the date fixed the court may extend the time for the filing of claims.

HISTORY: Former 1976 Code Section 38-29-190 [1962 Code Section 37-1417; 1971 (57) 351; 1986 Act No. 426, Section 13] recodified as Section 38-21-200 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-185 [1977 Act No. 69 Section 4] recodified as Section 38-29-190 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

Effect of Amendment

2020 Act No. 121, Section 1.A, In the first sentence, substituted "For domestic insolvencies, the court shall fix a date, no less than" for "The court shall fix a date, not less than".

SECTION 38-29-200. Prohibition against using existence of Association for the purpose of insurance sales; preparation of summary document describing general purposes and limitations of this chapter.

(1) No person, including a member insurer, agent, or affiliate of a member insurer shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or social media, or in any other way, an advertisement, announcement, or statement, written or oral, which uses the existence of the South Carolina Life and Accident and Health Insurance Guaranty Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance or other coverage covered by this chapter. However, this section shall not apply to the South Carolina Life and Accident and Health Insurance Guaranty Association or any other entity which does not sell or solicit insurance or coverage by a health maintenance organization.

(2) Within one hundred eighty days of July 1, 2020, the association shall prepare a summary document describing the general purposes and current limitations of the chapter and complying with this section. This document must be submitted to the director for approval. At the expiration of the sixtieth day after the date on which the director approves the document, a member insurer may not deliver a policy or contract to a policy owner, contract owner, certificate holder, or enrollee unless the summary document is delivered to the policy owner, contract owner, certificate holder, or enrollee at the time of delivery of the policy or contract. The document must be made available upon request by a policy owner, contract owner, certificate holder, or enrollee. The distribution, delivery, or contents or interpretation of this document does not guarantee that either the policy or the contract or the policy owner, contract owner, certificate holder, or enrollee is covered in the event of the impairment or insolvency of a member insurer. The description document must be revised by the association as amendments to the chapter may require. Failure to receive this document does not give the policy owner, contract owner, certificate holder, enrollee, or insured any greater rights than those stated in this chapter.

(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 Accident 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 Accident 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 Accident 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 Accident 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.

(4) A member insurer shall retain evidence of compliance for so long as the policy or contract for which the notice is given remains in effect.

HISTORY: 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.

Editor's Note

Prior Laws: Former Section 38-29-200 was titled Construction, and had the following history: Former 1976 Code Section 38-29-200 [1962 Code Section 37-1418; 1971 (57) 351] recodified as Section 38-21-210 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-190 [1962 Code Section 37-564; 1972 (57) 2776] recodified as Section 38-29-200 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631. See now, Code 1976 Section 38-29-210.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."

SECTION 38-29-210. Construction.

This chapter must be liberally construed to effect the purpose under Section 38-29-30 which constitutes an aid and guide to interpretation.

HISTORY: Former 1976 Code Section 38-29-200 [1962 Code Section 37-1418; 1971 (57) 351] recodified as Section 38-21-210 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-190 [1962 Code Section 37-564; 1972 (57) 2776] recodified as Section 38-29-200 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631. Formerly Code 1976 Section 38-29-200, renumbered by 2020 Act No. 121, Section 1.A, eff March 24, 2020.

Editor's Note

2020 Act No. 121, Section 1.B, provides as follows:

"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."