S*1282(Rat #0332, Act #0313 of 2000)  General Bill, By 
Senate Banking and Insurance
 A BILL TO AMEND SECTIONS 38-79-130, AS AMENDED, AND 38-79-480, CODE OF LAWS OF
 SOUTH CAROLINA, 1976, RELATING RESPECTIVELY TO THE POWERS OF THE SOUTH
 CAROLINA MEDICAL MALPRACTICE LIABILITY JOINT UNDERWRITING ASSOCIATION AND
 ASSOCIATION RESPONSIBILITY FOR CLAIMS MADE AGAINST A PERSON OR ENTITY INSURED
 BY THE ASSOCIATION SO AS TO INCREASE THE AMOUNTS TRIGGERING CERTAIN AUTHORITY
 AND RESPONSIBILITIES OF THE BOARD FROM ONE HUNDRED THOUSAND DOLLARS TO TWO
 HUNDRED THOUSAND DOLLARS FOR EACH CLAIM AND FROM THREE HUNDRED THOUSAND
 DOLLARS TO SIX HUNDRED THOUSAND DOLLARS FOR ALL CLAIMANTS UNDER ONE POLICY IN
 ANY ONE YEAR; TO AMEND SECTION 38-79-250, AS AMENDED, RELATING TO OBLIGATIONS
 OF MEMBERS TERMINATED FROM THE ASSOCIATION, SO AS TO PROVIDE THAT THE STATE IS
 NOT RESPONSIBLE FOR ANY COSTS, EXPENSES, LIABILITIES, JUDGMENTS, OR OTHER
 OBLIGATIONS OF THE ASSOCIATION; TO AMEND SECTION 38-79-260, AS AMENDED,
 RELATING TO THE GOVERNING BOARD OF THE ASSOCIATION, SO AS TO REDUCE THE NUMBER
 OF MEMBERS ON THIS BOARD FROM TWENTY-ONE TO THIRTEEN, ALL OF WHOM MUST BE
 APPOINTED BY THE GOVERNOR, TO MAKE REVISIONS IN THE COMPOSITION OF THE BOARD,
 AND TO REQUIRE THE BOARD TO DEVELOP A PLAN OF OPERATION SUBJECT TO APPROVAL BY
 THE DIRECTOR OF THE DEPARTMENT OF INSURANCE; TO AMEND SECTION 38-79-430, AS
 AMENDED, RELATING TO CREATION OF THE BOARD OF GOVERNORS TO MANAGE AND OPERATE
 THE SOUTH CAROLINA PATIENT'S COMPENSATION FUND, SO AS TO REQUIRE THE BOARD TO
 DEVELOP A PLAN OF OPERATION SUBJECT TO THE APPROVAL OF THE DIRECTOR OF THE
 DEPARTMENT OF INSURANCE; AND TO AMEND SECTION 38-79-450, RELATING TO FEES FOR
 MEMBERSHIP IN THE SOUTH CAROLINA PATIENT'S COMPENSATION FUND, SO AS TO REQUIRE
 MEMBERS TO PAY ANY DEFICIT OF THE FUND AND TO PROVIDE THAT THE STATE IS NOT
 RESPONSIBLE FOR ANY COSTS, EXPENSES, LIABILITIES, JUDGMENTS, OR OTHER
 OBLIGATIONS OF THE FUND.-AMENDED TITLE

   03/28/00  Senate Introduced, read first time, placed on calendar
                     without reference SJ-227
   04/06/00  Senate Amended SJ-68
   04/06/00  Senate Read second time SJ-68
   04/06/00  Senate Unanimous consent for third reading on next
                     legislative day SJ-68
   04/07/00  Senate Read third time and sent to House SJ-13
   04/11/00  House  Introduced and read first time HJ-13
   04/11/00  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-13
   05/03/00  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-4
   05/04/00  House  Amended HJ-24
   05/04/00  House  Read second time HJ-24
   05/04/00  House  Unanimous consent for third reading on next
                     legislative day HJ-24
   05/05/00  House  Read third time and returned to Senate with
                     amendments HJ-3
   05/11/00  Senate Concurred in House amendment and enrolled SJ-12
   05/23/00         Ratified R 332
   05/26/00         Signed By Governor
   06/14/00         Effective date 11/22/00; 180 days after approval
                     by the Governor
   06/14/00         Copies available
   06/14/00         Act No. 313

AN ACT TO AMEND SECTIONS 38-79-130, AS AMENDED, AND 38-79-480, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING RESPECTIVELY TO THE POWERS OF THE SOUTH CAROLINA MEDICAL MALPRACTICE LIABILITY JOINT UNDERWRITING ASSOCIATION AND ASSOCIATION RESPONSIBILITY FOR CLAIMS MADE AGAINST A PERSON OR ENTITY INSURED BY THE ASSOCIATION SO AS TO INCREASE THE AMOUNTS TRIGGERING CERTAIN AUTHORITY AND RESPONSIBILITIES OF THE BOARD FROM ONE HUNDRED THOUSAND DOLLARS TO TWO HUNDRED THOUSAND DOLLARS FOR EACH CLAIM AND FROM THREE HUNDRED THOUSAND DOLLARS TO SIX HUNDRED THOUSAND DOLLARS FOR ALL CLAIMANTS UNDER ONE POLICY IN ANY ONE YEAR; TO AMEND SECTION 38-79-250, AS AMENDED, RELATING TO OBLIGATIONS OF MEMBERS TERMINATED FROM THE ASSOCIATION, SO AS TO PROVIDE THAT THE STATE IS NOT RESPONSIBLE FOR ANY COSTS, EXPENSES, LIABILITIES, JUDGMENTS, OR OTHER OBLIGATIONS OF THE ASSOCIATION; TO AMEND SECTION 38-79-260, AS AMENDED, RELATING TO THE GOVERNING BOARD OF THE ASSOCIATION, SO AS TO REDUCE THE NUMBER OF MEMBERS ON THIS BOARD FROM TWENTY-ONE TO THIRTEEN, ALL OF WHOM MUST BE APPOINTED BY THE GOVERNOR, TO MAKE REVISIONS IN THE COMPOSITION OF THE BOARD, AND TO REQUIRE THE BOARD TO DEVELOP A PLAN OF OPERATION SUBJECT TO APPROVAL BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE; TO AMEND SECTION 38-79-430, AS AMENDED, RELATING TO CREATION OF THE BOARD OF GOVERNORS TO MANAGE AND OPERATE THE SOUTH CAROLINA PATIENT'S COMPENSATION FUND, SO AS TO REQUIRE THE BOARD TO DEVELOP A PLAN OF OPERATION SUBJECT TO THE APPROVAL OF THE DIRECTOR OF THE DEPARTMENT OF INSURANCE; AND TO AMEND SECTION 38-79-450, RELATING TO FEES FOR MEMBERSHIP IN THE SOUTH CAROLINA PATIENT'S COMPENSATION FUND, SO AS TO REQUIRE MEMBERS TO PAY ANY DEFICIT OF THE FUND AND TO PROVIDE THAT THE STATE IS NOT RESPONSIBLE FOR ANY COSTS, EXPENSES, LIABILITIES, JUDGMENTS, OR OTHER OBLIGATIONS OF THE FUND.

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

Powers of the association

SECTION 1. Section 38-79-130 of the 1976 Code, as amended by Act 181 of 1993, is further amended to read:

"Section 38-79-130. The association, pursuant to the provisions of this article and the approved plan of operation in respect to medical malpractice insurance, has the power on behalf of its members to:

(1) issue, or cause to be issued, policies of insurance to applicants including incidental coverages including, but not limited to, premises or operations liability coverage on the premises where services are rendered, all subject to limits of liability as specified in the plan of operation but not to exceed two hundred thousand dollars for each claimant under one policy and six hundred thousand dollars for all claimants under one policy in any one year;

(2) underwrite medical malpractice insurance and to adjust and pay losses with respect thereto or to appoint service companies to perform those functions;

(3) cede and assume reinsurance."

Actions for damages

SECTION 2. Section 38-79-480 of the 1976 Code is amended to read:

"Section 38-79-480. (1) In an action for damages arising out of the rendering of medical services against a licensed health care provider covered under the fund, the provider shall within five days of receipt of summons and complaint, excluding the first day and holidays, give notice to the board of the action. If after reviewing the facts upon which the action is based it appears that the claim will exceed two hundred thousand dollars, the board may appear and actively defend the fund. In so defending, the board may retain counsel and pay out of the fund attorney's fees and expenses including court costs incurred in defending the fund. Any judgment affecting the fund may be appealed.

(2) It is the responsibility of the insurer providing insurance for a licensed health care provider who is also covered by the fund or for the self-insured provider covered by the fund to provide an adequate defense on any claim filed that potentially affects the fund with respect to these insurance contracts or a self-insured's liability. The insurers or self-insured providers must act in a fiduciary relationship with respect to any claim affecting the fund. No settlement exceeding two hundred thousand dollars per incident, or six hundred thousand dollars in the aggregate for one year, may be agreed to unless approved by the board.

(3) A person who has recovered a final judgment or a settlement approved by the board against a provider covered by the fund may file a claim with the board to recover that portion of the judgment or settlement which is in excess of two hundred thousand dollars or six hundred thousand dollars in the aggregate for one year. If the fund incurs liability exceeding two hundred thousand dollars to any person under a single occurrence, the fund may not pay more than two hundred thousand dollars per year until the claim has been paid in full. However, the board may pay an amount in excess of two hundred thousand dollars so as to avoid the payment of interest.

(4) Claims filed against the fund must be paid in the order received within ninety days after filing unless the judgment is appealed. If the fund does not have enough money to pay all of the claims, claims received after the funds are exhausted are immediately payable the following year in the order in which they were received."

Obligations of terminated members

SECTION 3. Section 38-79-250 of the 1976 Code, as last amended by Act 181 of 1993, is further amended by adding at the end:

"(4) The State is not responsible for any costs, expenses, liabilities, judgments, or other obligations of the association."

Board of directors

SECTION 4. Section 38-79-260 of the 1976 Code, as last amended by Act 19 of 1997, is further amended to read:

"Section 38-79-260. The association is governed by a board of thirteen directors, all of whom must be appointed by the Governor. The Governor shall appoint five health care providers after consultation with the South Carolina Medical Association, the South Carolina Dental Association, and the South Carolina Health Alliance; four insurance representatives after consultation with the insurance industry; one consumer representative who is unaffiliated with the insurance or health care industries or the medical or legal professions; and two licensed insurance agents or brokers. The professional associations listed and the insurance industry may nominate qualified individuals to the Governor for his consideration. The Governor may also receive nominations for appointments to the board from any other individual, group, or association. Notices of vacancies on the board must be published in newspapers of general statewide circulation. The director or his designee shall serve as an ex officio member of the board. The board shall develop a plan of operation which is subject to the approval of the director or his designee as provided in this article. The plan of operation shall provide for staggered terms of the members of the board. The approved plan of operation of the association may make provision for combining insurers under common ownership or management into groups for voting, assessment, and all other purposes and may provide that not more than one of the officers or employees of a group may serve as a director at any one time. The board shall elect a chairman and other necessary officers for two-year terms. No member of the board is eligible for reappointment for a period of four years following the completion of his term. A vacancy must be filled for the unexpired portion of the term only. The Governor may receive recommendations from any individual, group, or association for any vacancy on the board. The board must meet at the call of the chairman or a majority of the members of the board but in any event it must meet at least once a year."

Board of Governors

SECTION 5. Section 38-79-430 of the 1976 Code, as last amended by Act 19 of 1997, is further amended by adding at the end:

"The board shall develop a plan of operation for the efficient administration of the fund consistent with the provisions of this article. The fund must operate pursuant to a plan of operation which shall provide for the economic, fair, and nondiscriminatory administration and for the prompt and efficient provision of excess medical malpractice insurance and which may contain other provisions including, but not limited to, assessment of all members for expenses, deficits, losses, commissions arrangements, reasonable underwriting standards, acceptance and cession of reinsurance appointment of servicing carriers, and procedures for determining the amounts of insurance to be provided by the association. The fund may not grant retroactive coverage to members. The plan of operation and any amendments to the plan are subject to the approval of the director or his designee. If the board fails to develop a plan of operation within the time frame established by the Governor or his designee, the director or his designee shall develop the plan of operation for the fund."

Deficit assessments; immunity of State

SECTION 6. Section 38-79-450 of the 1976 Code is amended by adding at the end:

"Any deficit must be paid by the members of the fund. The State is not responsible for any costs, expenses, liabilities, judgements, or other obligations of the fund."

Time effective

SECTION 7. This act takes effect one hundred eighty days after approval by the Governor.

Ratified the 23rd day of May, 2000.

Approved the 26th day of May, 2000.