S*1264 Session 109 (1991-1992)
S*1264(Rat #0293, Act #0277 of 1992) General Bill, By
Senate Banking and Insurance
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.
02/04/92 Senate Introduced, read first time, placed on calendar
without reference SJ-11
02/05/92 Senate Read second time SJ-16
02/05/92 Senate Unanimous consent for third reading on next
legislative day SJ-16
02/06/92 Senate Read third time and sent to House SJ-26
02/11/92 House Introduced and read first time HJ-7
02/11/92 House Referred to Committee on Labor, Commerce and
Industry HJ-7
02/26/92 House Committee report: Favorable Labor, Commerce and
Industry HJ-17
02/27/92 House Read second time HJ-21
02/27/92 House Unanimous consent for third reading on next
legislative day HJ-21
02/28/92 House Read third time and enrolled HJ-3
03/04/92 Ratified R 293
03/10/92 Signed By Governor
03/10/92 Effective date 03/10/92
03/10/92 Act No. 277
04/07/92 Copies available
(A277, R293, S1264)
AN ACT 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:
Conditions under which the Insurance Commissioner may
issue orders
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),
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."
Time effective
SECTION 2. This act takes effect upon approval by the
Governor.
Approved the 10th day of March, 1992. |