H 4143 Session 109 (1991-1992)
H 4143 General Bill, By J.J. Bailey, R.S. Corning, J.T. McElveen, Quinn and
Scott
A Bill to amend Section 38-5-120, as amended, Code of Laws of South Carolina,
1976, relating to revocation and suspension of certificates of authority
granted to insurers, so as to revise the conditions under which the
Commissioner may issue certain orders when an insurer is in an unsound or
hazardous condition.
01/14/92 House Introduced and read first time HJ-194
01/14/92 House Referred to Committee on Labor, Commerce and
Industry HJ-194
02/25/92 House Tabled in committee
A BILL
TO AMEND SECTION 38-5-120, AS AMENDED, CODE OF LAWS
OF SOUTH CAROLINA, 1976, RELATING TO REVOCATION AND
SUSPENSION OF CERTIFICATES OF AUTHORITY GRANTED TO
INSURERS, SO AS TO REVISE THE CONDITIONS UNDER WHICH
THE COMMISSIONER MAY ISSUE CERTAIN ORDERS WHEN AN
INSURER IS IN AN UNSOUND OR HAZARDOUS CONDITION.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 38-5-120(C) of the 1976 Code, as added by Act
13 of 1991, is amended to read:
"(C) Notwithstanding the provisions of subsection
(A)(6), if the commissioner determines that an insurer is in an
unsound condition or in a hazardous condition provided in subsection
(A)(1) and (3), he may issue an order requiring the insurer to:
(1) reduce the total amount of present and potential liability
for policy benefits by reinsurance;
(2) reduce, suspend, or limit the volume of business being
accepted or renewed;
(3) reduce general insurance and commission expenses by
specified methods;
(4) increase the insurer's capital and surplus;
(5) suspend or limit the declaration and payment of dividends
by an insurer to its stockholders or to its policyholders;
(6) file reports in a form acceptable to the commissioner
concerning the market value of an insurer's assets;
(7) limit or withdraw from certain investments or discontinue
certain investment practices to the extent the commissioner considers
necessary;
(8) document the adequacy of premium rates in relation to the
risks insured;
(9) file, in addition to regular annual statements, interim
financial reports on the form adopted by the National Association of
Insurance Commissioners or on a format approved by the commissioner;
(10) disregard credit or an amount receivable resulting from
transactions with a reinsurer which is insolvent, impaired, or otherwise
subject to a delinquency proceeding;
(11) make appropriate adjustments to asset values attributable
to investments in or transactions with parents, subsidiaries, or affiliates;
(12) refuse to recognize the stated value of accounts receivable
if the ability to collect receivables is highly speculative in view of the
age of the account or the financial condition of the debtor;
(13) increase the insurer's liability in an amount equal to a
contingent liability, pledge, or guarantee not otherwise included if there
is a substantial risk that the insurer will be called upon to meet the
obligation undertaken within the next twelve months; or
(14) take other action he considers appropriate."
SECTION 2. This act takes effect upon approval by the Governor.
-----XX----- |