H*4180(Rat #0412, Act #0313 of 2002)  General Bill, By Sandifer and Cato
 A BILL TO AMEND SECTION 38-55-330, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO FUNERAL DIRECTORS ACTING AS AGENTS FOR LIFE INSURERS FOR FUNDING
 PRENEED FUNERAL CONTRACTS, SO AS TO DELETE THE PROVISION REQUIRING THE SOUTH
 CAROLINA STATE BOARD OF FUNERAL SERVICE TO VERIFY THAT SUCH AN INSURANCE
 POLICY IS CONSISTENT WITH STATUTORY REQUIREMENTS FOR PRENEED FUNERAL
 CONTRACTS; AND TO PROVIDE TEMPORARY PROVISIONS RELATING TO MINIMUM VALUES OF
 ANY PAID UP ANNUITY, CASH SURRENDER, OR DEATH BENEFITS AVAILABLE UNDER CERTAIN
 ANNUITIES.-amended title

   05/23/01  House  Introduced and read first time
   05/23/01  House  Referred to Committee on Labor, Commerce and Industry
   04/10/02  House  Committee report: Favorable Labor, Commerce and
                     Industry HJ-5
   04/16/02  House  Read second time HJ-7
   04/17/02  House  Read third time and sent to Senate HJ-25
   04/17/02  Senate Introduced and read first time SJ-10
   04/17/02  Senate Referred to Committee on Banking and Insurance SJ-10
   05/08/02  Senate Committee report: Favorable Banking and Insurance SJ-9
   05/09/02  Senate Read second time SJ-30
   05/09/02  Senate Ordered to third reading with notice of
                     amendments SJ-30
   05/22/02  Senate Amended SJ-34
   05/22/02  Senate Read third time and returned to House with
                     amendments SJ-34
   05/28/02  House  Concurred in Senate amendment and enrolled HJ-135
   05/30/02         Ratified R 412
   06/06/02         Became law without Governor's signature
   06/18/02         Act No. 313
   06/19/02         Effective date 06/06/02
   06/19/02         Copies available

AN ACT TO AMEND SECTION 38-55-330, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FUNERAL DIRECTORS ACTING AS AGENTS FOR LIFE INSURERS FOR FUNDING PRENEED FUNERAL CONTRACTS, SO AS TO DELETE THE PROVISION REQUIRING THE SOUTH CAROLINA STATE BOARD OF FUNERAL SERVICE TO VERIFY THAT SUCH AN INSURANCE POLICY IS CONSISTENT WITH STATUTORY REQUIREMENTS FOR PRENEED FUNERAL CONTRACTS; AND TO PROVIDE TEMPORARY PROVISIONS RELATING TO MINIMUM VALUES OF ANY PAID UP ANNUITY, CASH SURRENDER, OR DEATH BENEFITS AVAILABLE UNDER CERTAIN ANNUITIES.

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

Funding of preneed funeral contracts with life insurance policies

SECTION 1. Section 38-55-330 of the 1976 Code, is amended to read:

"Section 38-55-330. A licensed funeral director employed by a licensed funeral home in South Carolina may be licensed as an agent for a life insurer doing business in this State. However, a funeral director licensed under this section may act only as an agent for a life insurer in connection with the funding of a preneed funeral contract under Chapter 7 of Title 32. The amount of an insurance policy sold by a licensed funeral director licensed under this section may not exceed the amount of the preneed funeral contract as defined in Section 32-7-10(3). In addition to the filing and approval requirements of Section 38-61-20, a life insurer must file a sample policy to fund a preneed funeral contract with the South Carolina Board of Funeral Service. The board also shall maintain a list of all funeral directors licensed as insurance agents, the insurer each director represents, and the type of policy each director is licensed to sell. Except for a funeral director licensed under this title, no insurance agent, as defined in Section 38-1-20, or person, as defined in Section 38-1-20, shall sell any policy, as defined in Section 38-1-20, which has for its purposes the funding of any funeral services, or the furnishing or delivery of personal property, merchandise, services of any nature in connection with the final disposition of a dead human body, to be furnished or delivered at a time determinable by the death of a person whose body is to be disposed of, but does not mean the furnishing of a cemetery lot, crypt, niche, mausoleum, grave marker, or monument."

Temporary provisions for minimum values on certain annuities

SECTION 2. Notwithstanding the interest rate provisions of Section 38-69-240(a) of the 1976 Code, for prospective sales of contracts entered into pursuant to Section 38-69-240 from this act's effective date through January 1, 2004, the following applies:

The minimum values as specified in Sections 38-69-250, 38-69-260, 38-69-270, 38-69-280, and 38-69-300 of the 1976 Code of any paid up annuity, cash surrender, or death benefits available under an annuity contract providing for flexible considerations, the minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments is equal to an accumulation up to that time at a rate of interest one and one-half percent per annum of percentages of the net considerations (as hereinafter defined) paid prior to that time, decreased by the sum of:

(i) any prior withdrawals from or partial surrenders of the contract accumulated at a rate of interest of one and one-half percent per annum; and

(ii) the amount of any indebtedness to the insurer on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the insurer to the contract.

The net considerations for a given contract year used to define the minimum nonforfeiture amount are an amount not less than zero and are equal to the corresponding gross considerations credited to the contract during that contract year less an annual contract charge of thirty dollars and less a collection charge of one dollar and twenty-five cents per consideration credited to the contract during that contract year. The percentages of net considerations are sixty-five percent of the net consideration for the first contract year and eighty-seven and one-half percent of the net considerations for the second and later contract years. Notwithstanding the provisions of the preceding sentence, the percentage is sixty-five percent of the portion of the total net consideration for any renewal contract year which exceeds by not more than two times the sum of those portions of the net considerations in all prior contract years for which the percentage was sixty-five percent.

Time effective

SECTION 3. This act takes effect upon approval by the Governor.

Ratified the 30th day of May, 2002.

Became law without the signature of the Governor -- 6/6/02.