S 1335 General Bill, By Senate Banking and Insurance
 A Bill to amend Section 37-4-203, as amended, Code of Laws of South Carolina,
 1976, relating to consumer credit insurance, filing, and approval of rates and
 forms, and credit life insurance premiums, so as to require the Chief
 Insurance Commissioner to determine a benchmark loss ratio of approximately
 fifty percent to determine the premium rate charged for credit life insurance.

   04/12/94  Senate Introduced, read first time, placed on calendar
                     without reference SJ-10
   04/13/94  Senate Read second time SJ-29

INTRODUCED

April 12, 1994

S. 1335

S. Printed 4/12/94--S.

Read the first time April 12, 1994.

A BILL

TO AMEND SECTION 37-4-203, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CONSUMER CREDIT INSURANCE, FILING, AND APPROVAL OF RATES AND FORMS, AND CREDIT LIFE INSURANCE PREMIUMS, SO AS TO REQUIRE THE CHIEF INSURANCE COMMISSIONER TO DETERMINE A BENCHMARK LOSS RATIO OF APPROXIMATELY FIFTY PERCENT TO DETERMINE THE PREMIUM RATE CHARGED FOR CREDIT LIFE INSURANCE.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 37-4-203 of the 1976 Code is amended to read:

"Section 37-4-203. (1) A creditor may not use a form or a schedule of premium rates or charges, the filing of which is required by this section, if the Insurance Commissioner has disapproved the form or schedule and has notified the insurer of his disapproval. A creditor may not use a form or schedule unless (a) The form or schedule has been on file with the Insurance Commissioner for ninety days, or has earlier been approved by him; and (b) The insurer has complied with this section with respect to the insurance.

(2) Except as provided in subsection (3), all policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders relating to consumer credit insurance, other than life insurance, delivered or issued for delivery in this State, and the schedule of premium rates or charges pertaining thereto, shall be filed by the insurer with the Insurance Commissioner. Within ninety days after the filing of any form or schedule, he shall disapprove it if the premium rates or charges are unreasonable in relation to the benefits provided under the form, or if the form contains provisions which are unjust, unfair, inequitable or deceptive, or encourage misrepresentation of the coverage, or are contrary to any provision of the Insurance Code or of any rule or regulation promulgated thereunder.

(3) If a group policy has been delivered in another state, the forms to be filed by the insurer with the Insurance Commissioner are the group certificates and notices of proposed insurance. He shall approve them if (a) They provide the information that would be required if the group policy were delivered in this State; and (b) The applicable premium rates or charges do not exceed those established by his rules or regulations.

(4) Premium rates and rate levels shall be calculated to produce and maintain a ratio of losses incurred, or reasonably expected to be incurred, to premiums earned, or reasonably expected to be earned, of approximately fifty percent.

(5) Credit life insurance premiums for each one hundred dollars of indebtedness must be based on premium rates and rate levels calculated to produce and maintain a ratio of losses incurred, or reasonably expected to be incurred, to premiums earned, or reasonably expected to be earned, of approximately fifty percent, as determined by the Chief Insurance Commissioner. are considered reasonable and may be charged if they are not greater than the amounts given in the following table times the number of years, or fraction of a year, that the indebtedness is scheduled to continue, subject to a minimum charge of two dollars:

Decreasing Level

Balance Balance

Individual $ .75 $1.50

Joint Insurance $1.25 $2.50"

SECTION 2. This act takes effect upon approval by the Governor.