S 1024 Session 112 (1997-1998)
S 1024 General Bill, By Reese
Similar(H 5128)
A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION
38-77-400 SO AS TO ESTABLISH A PROCEDURE TO BE FOLLOWED IN HAVING REPAIRS MADE
TO A DAMAGED MOTOR VEHICLE UNDER AN AUTOMOBILE INSURANCE POLICY DELIVERED,
ISSUED FOR DELIVERY, OR RENEWED IN THIS STATE WITH RESPECT TO THE USE OF PARTS
OR PRODUCTS FOR MAKING THE REPAIRS AND THE UTILIZATION OF REPAIR PERSONS OR
FACILITIES, INCLUDING PROHIBITING CERTAIN ACTS, PROMULGATING REGULATIONS, AND
ESTABLISHING A CRIMINAL OFFENSE AND A PENALTY.
02/12/98 Senate Introduced and read first time SJ-2
02/12/98 Senate Referred to Committee on Banking and Insurance SJ-2
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING SECTION 38-77-400 SO AS TO ESTABLISH
A PROCEDURE TO BE FOLLOWED IN HAVING REPAIRS
MADE TO A DAMAGED MOTOR VEHICLE UNDER AN
AUTOMOBILE INSURANCE POLICY DELIVERED, ISSUED
FOR DELIVERY, OR RENEWED IN THIS STATE WITH
RESPECT TO THE USE OF PARTS OR PRODUCTS FOR
MAKING THE REPAIRS AND THE UTILIZATION OF REPAIR
PERSONS OR FACILITIES, INCLUDING PROHIBITING
CERTAIN ACTS, PROMULGATING REGULATIONS, AND
ESTABLISHING A CRIMINAL OFFENSE AND A PENALTY.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 38-77-400. (A) Notwithstanding any other provision of
law:
(1) Under an automobile insurance policy delivered, issued for
delivery, or renewed in this State an insurer may not, directly or
indirectly, limit its coverage under a policy covering damage to a
motor vehicle by specifying the brand, type, kind, age, vendor,
supplier, or condition of parts or products that may be used to repair
the vehicle, or limit the beneficiary of the policy or a third-party
claimant from selecting a repair person or facility to repair damage
to the motor vehicle covered under the policy.
(2) In connection with the repair of damage to a motor vehicle,
as set forth in (A)(1) of this section, an insurer or its officer,
employee, agent, solicitor, or representative or an insurance broker
or adjuster may not:
(a) solicit or accept a referral fee or gratuity in exchange for
referring a beneficiary of the policy or a third-party claimant to a
repair person or facility to repair damage to the motor vehicle;
(b) state or suggest, either orally or in writing, to a
beneficiary or third-party claimant that a specific repair person or
facility identified on a preferred list compiled by an insurer must be
utilized by the beneficiary or third-party claimant in order for the
damage, repair, or parts replacement to be covered by the policy;
(c) restrict a beneficiary's or a third-party claimant's right to
choose a repair person or facility by requiring the beneficiary or
third-party claimant to travel an unreasonable distance to repair the
damage to the vehicle.
(3) A contract between an insurer and a repair person or facility,
including an agreement under which the repair person or facility
agrees to extend discounts for parts or labor to the insurer in
exchange for referrals by the insurer, may not result in a reduction of
coverage under the policy of insurance.
(4) An insurer may not prohibit a repair person or facility from
providing a beneficiary or third-party claimant with information that
states the description, manufacturer, or source of the parts used and
the amounts charged to the insurer for the parts and related labor.
(5) At the time the vehicle is presented to an insurer or its
officer, employee, agent, solicitor, or representative or an insurance
broker or adjuster in connection with a claim for damage repair, the
insurer or its officer, employee, agent, solicitor, or representative or
the insurance broker or adjuster shall provide the beneficiary of the
policy or the third-party claimant written notice of the provisions of
this section, and the Department of Insurance shall promulgate
regulations establishing the method to be used to comply with the
notice provisions of this section.
(6) A beneficiary of the policy, third-party claimant, or repair
person or facility may submit a written, documented complaint to the
Department of Insurance with respect to an alleged violation of this
section.
(7) In settling liability claims by a third party against an insured
for property damage claimed by the third party, an insurer may not
require the third-party claimant to have any or all repairs made by a
specific repair person or facility or to use a specific brand, type,
condition, kind, or age of parts or products or a specific vendor or
supplier of parts or products.
(8) The Department of Insurance may exercise the
regulation-promulgating authority with respect to fraudulent activity
of a party to an agreement described in (A)(3) of this section.
(9) Billing by an insurer under this section to a specific repair
person or facility on a preferred list of repair persons or facilities is
prohibited. An insurer may not, in any manner whatever, require that
billing be processed by a specific person, place, business, or facility
as a condition for payment of a claim under this section; nor may an
insurer, in any manner whatever, condition payment of a claim under
this section by requiring that repairs be made by a specific repair
person or facility.
(B) A person who violates the provisions of this section, including
any regulation promulgated under the authority of this section, is
guilty of a misdemeanor and, upon conviction, must be fined one
thousand dollars for each violation which occurs."
SECTION 2. This act takes effect January 1, 1999 and applies to
policies of insurance delivered, issued for delivery, or renewed in this
State on and after that date.
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