H 3554 Session 109 (1991-1992)
H 3554 General Bill, By J.J. Bailey, R.S. Corning, J.T. McElveen, Quinn and
Scott
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
38-73-1425 so as to provide for the final rate or premium charge for a private
passenger automobile insurance risk ceded to the Reinsurance Facility; to
amend Section 38-73-455, relating to automobile insurance rates, so as to
limit the prohibition on member companies of an affiliated group of automobile
insurers in utilizing different filed rates; to amend Section 38-77-280, as
amended, relating to automobile collision and comprehensive coverage, so as to
authorize the refusal to write certain coverage; and to amend Section
38-77-950, as amended, relating to use of the Reinsurance Facility by an
insurer, so as to require notice to policy holders of certain risks ceded to
the Facility.
02/20/91 House Introduced and read first time HJ-14
02/20/91 House Referred to Committee on Labor, Commerce and
Industry HJ-14
02/18/92 House Tabled in committee
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING SECTION 38-73-1425 SO AS TO PROVIDE FOR THE
FINAL RATE OR PREMIUM CHARGE FOR A PRIVATE
PASSENGER AUTOMOBILE INSURANCE RISK CEDED TO THE
REINSURANCE FACILITY; TO AMEND SECTION 38-73-455,
RELATING TO AUTOMOBILE INSURANCE RATES, SO AS TO
LIMIT THE PROHIBITION ON MEMBER COMPANIES OF AN
AFFILIATED GROUP OF AUTOMOBILE INSURERS IN
UTILIZING DIFFERENT FILED RATES; TO AMEND SECTION
38-77-280, AS AMENDED, RELATING TO AUTOMOBILE
COLLISION AND COMPREHENSIVE COVERAGE, SO AS TO
AUTHORIZE THE REFUSAL TO WRITE CERTAIN COVERAGE;
AND TO AMEND SECTION 38-77-950, AS AMENDED, RELATING
TO USE OF THE REINSURANCE FACILITY BY AN INSURER, SO
AS TO REQUIRE NOTICE TO POLICYHOLDERS OF CERTAIN
RISKS CEDED TO THE FACILITY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 38-73-1425. The final rate or premium charge for
a private passenger automobile insurance risk ceded to the facility which
does not qualify for the safe driver discount in Section 38-73-760(e) is
the final rate or premium charge required by Section 38-73-1420 or the
final rate or premium charge approved for use by the insurer, whichever
is greater."
SECTION 2. Section 38-73-455(C) of the 1976 Code is amended to
read:
"(C) Member companies of an affiliated group of
automobile insurers may not utilize different filed rates for automobile
insurance coverages which they are mandated by law to write.
For the purpose of this section, an affiliated group of automobile
insurers includes any a group of automobile insurers
under common ownership, management, or control. Those automobile
insurers designated pursuant to Section 38-77-590(a), for automobile
insurance risks written by them through producers designated by the
facility governing board pursuant to that same section, shall
utilize the rates or premium charges by coverage filed and authorized for
use by the rating organization licensed by the commissioner pursuant to
Article 11, Chapter 73 of this title, which has the largest number of
members or subscribers for automobile insurance rates. However, those
automobile insurers designated pursuant to Section 38-77-590(a) are not
required to use those same rates or premium charges described in the
preceding sentence for risks written by them through their duly
authorized agents not appointed pursuant to Section 38-77-590."
SECTION 3. Section 38-77-280(B) of the 1976 Code, as last
amended by Act 148 of 1989, is further amended to read:
"(B) Notwithstanding subsection (A) and Sections
38-77-110 and 38-77-920, automobile insurers may refuse to write
automobile physical damage insurance coverage, including automobile
comprehensive physical damage, collision, fire, theft, and combined
additional coverage, for any an applicant or existing
policyholder, on renewal, for a motor vehicle customarily operated by
an individual, either the named insured or any other
another operator not excluded in accordance with Section
38-77-340 and who resides in the same household, where one or more
of the conditions or factors prescribed in Section 38-73-455 exist. In
addition, automobile insurers may refuse to write physical damage
insurance coverage to any an applicant or existing
policyholder, on renewal, who has collected benefits provided under
any automobile insurance physical damage coverage during the
thirty-six months immediately preceding the effective date of coverage,
for two or more total fire losses or two or more total theft losses.
Automobile insurers may refuse to write for private passenger
automobiles physical damage insurance coverage, including automobile
comprehensive physical damage, collision, fire, theft, and combined
additional coverage, for an applicant or existing policyholder, on
renewal, for a motor vehicle customarily operated by an individual,
either the named insured or another operator not excluded in accordance
with Section 38-77-340 and who resides in the same household, which
does not qualify for the safe driver discount in Section
38-73-760(e)."
SECTION 4. Section 38-77-950 of the 1976 Code, as last amended
by Act 148 of 1989, is further amended to read:
"Section 38-77-950. It is the intent of this chapter that the
facility may must not be excessively nor unreasonably
utilized by automobile insurers for unfairly competitive purposes or for
purposes of unfairly discriminating against certain classes or types of
automobile insurance risks having the same or similar objective risk
characteristics as other risks in the same class under the rating plan for
the classification of risks promulgated by the department, nor for the
purpose of discriminating against such the risks or
any risks in certain rating territories. The commissioner shall
prohibit unreasonable or excessive utilization of the facility.
A prima facie case of excessive or unreasonable utilization is
established upon a showing that an automobile insurance insurer or a
group of such insurers under the same management has ceded or
is about to cede more than thirty-five percent of total direct cedeable
written premiums on South Carolina automobile insurance as reported
in the most recently filed annual statement(s) of such
the insurer or group.
Upon the written request of the policyholder, all insurance
companies doing business in this State shall give written notice to the
policyholder informing him whether or not he and any a
driver under the policy is in the facility. Insurers shall give written
notice to the policyholder of a risk ceded to the facility which does not
qualify for the safe driver discount in Section 38-73-760(e)."
SECTION 5. Total direct cedeable written premiums as used in
Section 38-77-950 of the 1976 Code, amended in this act, do not include
premiums attributable to risks ceded to the facility that do not qualify for
the safe driver discount in Section 38-73-760(e) for twenty-four months
following the effective date of this act.
SECTION 6. Upon approval by the Governor, this act takes effect on
October 1, 1991. However, insurers may file rates with the Chief
Insurance Commissioner before October 1, 1991, as necessary to
conform to the provisions of this act.
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