S*333 Session 108 (1989-1990)
S*0333(Rat #0144, Act #0090 of 1989) General Bill, By
Senate Banking and Insurance
A Bill to amend Section 38-71-310, as amended, Code of Laws of South Carolina,
1976, relating to approval of accident, health, or accident and health
insurance policies issued or delivered in this State, so as to revise the
manner in which policy and premium rates for certain accident and health
insurance policies are approved, and to provide that the benefits of major
medical individual accident and health insurance policies are deemed
reasonable under certain conditions, and to amend the 1976 Code by adding
Section 38-71-315 so as to provide for procedures to be followed when an
insurer of individual accident and health insurance voluntarily decreases its
premium charges.-amended title
02/07/89 Senate Introduced, read first time, placed on calendar
without reference SJ-13
02/08/89 Senate Read second time SJ-18
02/15/89 Senate Read third time and sent to House SJ-19
02/16/89 House Introduced and read first time HJ-24
02/16/89 House Referred to Committee on Labor, Commerce and
Industry HJ-24
03/08/89 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-4
03/09/89 House Debate adjourned until Tuesday, March 21, 1989 HJ-3
03/21/89 House Debate adjourned HJ-20
03/23/89 House Amended HJ-16
03/23/89 House Read second time HJ-18
03/28/89 House Read third time and returned to Senate with
amendments HJ-6
03/29/89 Senate Non-concurrence in House amendment SJ-5
04/04/89 House House insists upon amendment and conference
committee appointed Reps. Neilson, R. Brown &
Rudnick HJ-5
04/04/89 Senate Conference committee appointed Sens. Saleeby,
Fielding, and Lindsay SJ-11
05/04/89 Senate Conference report received and adopted SJ-6
05/04/89 House Conference report received HJ-56
05/10/89 House Conference report adopted HJ-60
05/11/89 Senate Ordered enrolled for ratification SJ-5
05/16/89 Ratified R 144
05/22/89 Signed By Governor
05/22/89 Effective date 05/22/89
05/22/89 Act No. 90
05/26/89 Copies available
(A90, R144, S333)
AN ACT TO AMEND SECTION 38-71-310, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA,
1976, RELATING TO APPROVAL OF ACCIDENT, HEALTH, OR ACCIDENT AND HEALTH INSURANCE
POLICIES ISSUED OR DELIVERED IN THIS STATE, SO AS TO REVISE THE MANNER IN WHICH
POLICIES AND PREMIUM RATES FOR CERTAIN ACCIDENT AND HEALTH INSURANCE POLICIES ARE
APPROVED, AND TO PROVIDE THAT THE BENEFITS OF MAJOR MEDICAL INDIVIDUAL ACCIDENT
AND HEALTH INSURANCE POLICIES ARE DEEMED REASONABLE UNDER CERTAIN CONDITIONS, AND
TO AMEND THE 1976 CODE BY ADDING SECTION 38-71-315 SO AS TO PROVIDE FOR
PROCEDURES TO BE FOLLOWED WHEN AN INSURER OF INDIVIDUAL ACCIDENT AND HEALTH
INSURANCE VOLUNTARILY DECREASES ITS PREMIUM CHARGES.
Be it enacted by the General Assembly of the State of South Carolina:
Approval of policies and rates, and reasonableness of benefits
SECTION 1. Section 38-71-310 of the 1976 Code, as amended by an act of 1989
bearing Ratification Number 38, is further amended to read:
"Section 38-71-310. (A) No policy or certificate of accident, health,
or accident and health insurance may be issued or delivered in this State, nor
may any application, endorsement, or rider which becomes a part of the policy be
used, until a copy of its form has been filed with and approved by the
commissioner except as exempted by regulation as permitted by Section 38-61-20.
The commissioner may disapprove the form if the form (1) does not meet the
requirements of law, (2) contains any provisions which are unfair, deceptive,
ambiguous, misleading, or unfairly discriminatory, or (3) is going to be
solicited by means of advertising, communication, or dissemination of information
which is deceptive or misleading. The commissioner shall notify in writing, as
soon as is practicable, the insurer which has filed the form of his approval or
disapproval. In the event of disapproval, the notice must contain the reasons for
disapproval, and the insurer is entitled to a public hearing thereon. If no
action has been taken to approve or disapprove a policy or certificate,
application, endorsement, or rider after the documents have been filed for ninety
days, they are deemed to be approved.
(B) No premium rates applicable to accident policies, health policies, or
combined accident and health policies or certificates for individual or family
protection may be used unless they have been filed with and approved by the
commissioner. The commissioner may disapprove premium rates if he determines
that the benefits provided in the policies or certificates are unreasonable in
relation to the premiums charged. The commissioner shall notify in writing the
insurer, as soon as is practicable, which has filed the premium rates of his
approval or disapproval. In the event of disapproval, the notice must contain
the reasons for disapproval, and the insurer is entitled to a public hearing on
the disapproval. If no action has been taken to approve or disapprove the
premium rates after they have been filed for ninety days, they are deemed to be
approved.
(C) At any time the commissioner, after a public hearing of which at least
thirty days' written notice has been given, may withdraw approval of forms or
rates previously approved under subsections (A) and (B) if he determines that the
forms or rates no longer meet the standards for approval specified in subsections
(A) and (B).
(D) The provisions of this section do not apply to policies issued in
connection with loans made under the Small Loan Act of 1966.
(E) For major medical expense coverage individual accident and health
insurance policies, as defined by regulation of the commissioner, the benefits
are deemed reasonable in relation to the premium charged if the insurer has filed
a loss ratio guarantee with the commissioner. This guaranteed loss ratio must
be equivalent to, or greater than, the most recent loss ratios detailed within
the National Association of Insurance Commissioners' 'Guidelines for Filing of
Rates for Individual Health Insurance Forms.' This loss ratio guarantee must be
in writing and must contain at least the following:
(1) A recitation of the anticipated (target) loss ratio standards contained
in the original actuarial memorandum filed with the policy form when it was
originally approved.
(2) A guarantee that the actual South Carolina loss ratios for the calendar
year in which the new rates take effect, and for each year thereafter until new
rates are filed will meet or exceed the loss ratio standards referred to in item
(1) above.
(3) A guarantee that the actual South Carolina loss ratio results for the
year at issue will be independently audited at the insurer's expense. This audit
must be done in the second quarter of the next year and the audited results must
be reported to the commissioner not later than the date for filing the applicable
Accident and Health Policy Experience Exhibit.
(4) A guarantee that affected South Carolina policyholders will be issued
a proportional refund (based on premium paid) of the amount necessary to bring
the actual aggregate loss ratio up to the anticipated loss ratio standards
referred to in item (1) above. The refund must be made to all South Carolina
policyholders insured under the applicable policy form as of the last day of the
year at issue if the refund would equal five dollars or more. The refund must
include statutory interest from the end of the year at issue until the date of
payment. Payments must be made during the third quarter of the next year.
(5) As used herein, the term 'loss ratio' means the ratio of incurred losses
to earned premium by number of years of policy duration, for all combined
durations.
(6) The reference in item (1) of this subsection to the 'anticipated
(target) loss ratio standards contained in the original actuarial memorandum
filed with the policy form when it was originally approved' may not be considered
or construed as evidence of legislative intent that the use of, or adherence to,
such 'anticipated (target) loss ratio standards' is approved or disapproved in
any application for a rate increase for any policy form approved prior to the
effective date of these amendments to Section 38-71-310."
Decrease of premium charges
SECTION 2. The 1976 Code is amended by adding:
"Section 38-71-315. Any insurer of individual accident and health
insurance may at any time, except when required by law or order of the
commissioner, voluntarily decrease its premium charge for any approved policy
form without the prior approval of the commissioner. However, the insurer must
notify the commissioner and the consumer advocate for information thirty days
prior to the use of the revised premium charge. Notwithstanding any other
provision of law, any time within one year after using such revised premium
charge, the insurer may return its premium charge back to the previously approved
level by informing the commissioner and the consumer advocate of the revision
thirty days prior to the effective date. The commissioner may not disapprove
such revision."
Time effective
SECTION 3. This act takes effect upon approval by the Governor. |