S 628 Session 111 (1995-1996)
S 0628 General Bill, By Senate Banking and Insurance
Similar(H 3827)
A Bill to amend Section 38-73-1420, Code of Laws of South Carolina, 1976,
relating to the Board of Governors of the South Carolina Reinsurance Facility,
so as to delete certain language, and provide among other things, that the
cost reductions realized in operating results of the Facility shall be applied
exclusively to reduce the recoupment charges on all policies of private
passenger automobile insurance written in South Carolina.
03/09/95 Senate Introduced, read first time, placed on calendar
without reference SJ-8
03/28/95 Senate Special order SJ-23
03/29/95 Senate Debate interrupted SJ-25
03/30/95 Senate Debate interrupted SJ-171
04/04/95 Senate Debate interrupted SJ-18
04/05/95 Senate Debate interrupted SJ-22
04/11/95 Senate Debate interrupted SJ-35
04/12/95 Senate Debate interrupted SJ-15
04/26/95 Senate Amended SJ-80
04/26/95 Senate Read second time SJ-89
04/26/95 Senate Ordered to third reading with notice of
amendments SJ-89
04/27/95 Senate Amended SJ-44
04/27/95 Senate Read third time and sent to House SJ-47
05/02/95 House Introduced and read first time HJ-4
05/02/95 House Referred to Committee on Labor, Commerce and
Industry HJ-6
Indicates Matter Stricken
Indicates New Matter
AS PASSED BY THE SENATE
April 27, 1995
S. 628
Introduced by Banking and Insurance Committee
S. Printed 4/27/95--S.
Read the first time March 9, 1995.
A BILL
TO AMEND SECTION 38-73-1420, CODE OF LAWS OF
SOUTH CAROLINA, 1976, RELATING TO THE BOARD OF
GOVERNORS OF THE SOUTH CAROLINA REINSURANCE
FACILITY, SO AS TO DELETE CERTAIN LANGUAGE, AND
PROVIDE AMONG OTHER THINGS, THAT THE COST
REDUCTIONS REALIZED IN OPERATING RESULTS OF THE
FACILITY SHALL BE APPLIED EXCLUSIVELY TO REDUCE
THE RECOUPMENT CHARGES ON ALL POLICIES OF
PRIVATE PASSENGER AUTOMOBILE INSURANCE WRITTEN
IN SOUTH CAROLINA; TO AMEND SECTION 38-73-1425, AS
AMENDED, RELATING TO THE FINAL RATE ON PREMIUM
CHARGE FOR PRIVATE PASSENGER AUTOMOBILE
INSURANCE RISK CEDED TO THE REINSURANCE
FACILITY, SO AS TO DELETE CERTAIN PROVISIONS, AND
PROVIDE, AMONG OTHER THINGS, THAT IN
CALCULATING THE FINAL RATE OR PREMIUM CHARGE,
IT MUST BE BASED UPON THE COMBINED RATIO OF ALL
INSURERS CEDING PRIVATE PASSENGER AUTOMOBILE
INSURANCE RISKS TO THE FACILITY; TO AMEND
SECTION 38-73-455, AS AMENDED, RELATING TO
AUTOMOBILE INSURANCE RATES, SO AS TO PROVIDE,
AMONG OTHER THINGS, THAT RATING PLANS MAY
PROVIDE FOR DIFFERENT RATES, RATING TIERS, AND
RATING PLANS AMONG AFFILIATED COMPANIES; TO
AMEND SECTION 38-77-950, AS AMENDED, RELATING TO
UNREASONABLE OR EXCESSIVE USE OF THE
REINSURANCE FACILITY BY AN INSURER, SO AS TO
DELETE A REFERENCE TO "AN AUTOMOBILE
INSURER"; TO AMEND THE 1976 CODE BY ADDING
SECTION 38-77-596 SO AS TO PROVIDE, AMONG OTHER
THINGS, THAT UPON NOTIFICATION TO THE GOVERNING
BOARD OF THE REINSURANCE FACILITY, DESIGNATED
PRODUCERS MAY CONTRACT WITH A VOLUNTARY
MARKET OUTLET FOR ANY TYPE OF AUTOMOBILE
INSURANCE CEDEABLE TO THE FACILITY; TO AMEND
SECTION 38-77-280, AS AMENDED, RELATING TO
AUTOMOBILE INSURANCE AND COLLISION AND
COMPREHENSIVE COVERAGES, SO AS TO DELETE
CERTAIN PROVISIONS AND LANGUAGE, AND PROVIDE,
AMONG OTHER THINGS, AUTOMOBILE INSURERS,
INCLUDING THOSE COMPANIES WRITING PRIVATE
PASSENGER PHYSICAL DAMAGE COVERAGES ONLY,
MAY, RATHER THAN "SHALL", MAKE
COLLISION COVERAGE AND EITHER COMPREHENSIVE OR
FIRE, THEFT, AND COMBINED ADDITIONAL COVERAGE
AVAILABLE TO AN INSURED OR QUALIFIED APPLICANT
WHO REQUESTS THE COVERAGE; TO AMEND SECTION
38-77-735, AS AMENDED, RELATING TO INSURANCE, THE
STATE RATING AND STATISTICAL DIVISION, AND THE
PLAN FOR CREDITS AND DISCOUNTS, SO AS TO DELETE
CERTAIN LANGUAGE, AND PROVIDE THAT IF AN
INSURANCE CREDIT OR DISCOUNT PLAN, OTHER THAN
THAT PROMULGATED BY THE DIRECTOR OF THE
DEPARTMENT OF INSURANCE OR HIS DESIGNEE, IS
GIVEN TO AN INSURED PURSUANT TO THIS SECTION,
THE POLICY MAY NOT BE CEDED TO THE REINSURANCE
FACILITY; AND TO PROVIDE THAT RECOUPMENT FEES
FOR PRIVATE PASSENGER AUTOMOBILE INSURANCE FOR
THE TWELVE MONTHS ENDING JUNE 30, 1996, SHALL NOT
EXCEED THE LEVEL CHARGED DURING THE
TWELVE-MONTH PERIOD ENDING JUNE 30, 1995, AND
THAT REINSURANCE FACILITY LOSSES UNRECOUPED
DUE TO THIS PROVISION SHALL BE RECOUPED EVENLY
DURING THE THREE-YEAR PERIOD BEGINNING JULY 1,
1996.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Section 38-73-455 of the 1976 Code, as last
amended by Act 181 of 1993, is further amended to read:
"Section 38-73-455. (A) An automobile insurer
shall offer two different rates for automobile insurance, a
base rate one or more rates as defined in Section
38-73-457 and an objective standards rate which is twenty-five
percent above the base rate. Both of these rates which
rates are subject to all surcharges or discounts, if any,
applicable under any approved merit rating plan, credit or discount
plan promulgated by the department or approved by the director or
his designee. Additionally, an automobile insurer shall offer the
applicable rates approved for policies ceded to the Reinsurance
Facility.
Applicants, or a current policyholder, seeking automobile
insurance with an insurer must be written at the base rate, unless
one of the conditions or factors in subitems (1) through (8) of item
(A) is present.
(A) The named insured or any operator who is not excluded in
accordance with Section 38-77-340 and who resides in the same
household or customarily operates an automobile insured under the
same policy, individually:
(1) has obtained a policy of automobile insurance or
continuation thereof through material misrepresentation within the
preceding thirty-six months; or
(2) has had convictions for driving violations on three or
more separate occasions within the thirty-six months immediately
preceding the effective date of coverage as reflected by the motor
vehicle record of each insured driver as maintained by the Motor
Vehicle Division of the Department of Revenue and Taxation; or
(3) has had two or more "chargeable" accidents
within the thirty-six months immediately preceding the effective
date of coverage. A "chargeable" accident is defined as
one resulting in bodily injury to any person in excess of three
hundred dollars per person, death, or damage to the property of the
insured or other person in excess of seven hundred fifty dollars.
Accidents occurring under the circumstances enumerated below are
not considered chargeable.
(a) The automobile was lawfully parked. An automobile
rolling from a parked position is not considered as lawfully parked
but is considered as operated by the last operator.
(b) The applicant or other operator or owner was
reimbursed by or on behalf of a person responsible for the accident
or has a judgment against this person.
(c) The automobile of an applicant or other operator was
struck in the rear by another vehicle and the applicant or other
operator has not been convicted of a moving traffic violation in
connection with the accident.
(d) The operator of the other automobile involved in the
accident was convicted of a moving traffic violation and the
applicant or other operator was not convicted of a moving traffic
violation in connection therewith.
(e) An automobile operated by the applicant or other
operator is damaged as a result of contact with a "hit and
run" driver, if the applicant or other operator so reports the
accident to the proper authority within twenty-four hours or, if the
person is injured, as soon as the person is physically able to do so.
(f) Accidents involving damage by contact with animals or
fowl.
(g) Accidents involving physical damage, limited to and
caused by flying gravel, missiles, or falling objects.
(h) Accidents occurring as a result of the operation of any
automobile in response to an emergency if the operator at the time
of the accident was responding to a call of duty as a paid or
volunteer member of any police or fire department, first aid squad,
or any law enforcement agency. This exception does not include an
accident occurring after the emergency situation ceases or after the
private passenger motor vehicle ceases to be used in response to the
emergency; or
(4) has had one "chargeable" accident and two
convictions for driving violations, all occurring on separate
occasions, within the thirty-six months immediately preceding the
effective date of coverage as reflected by the motor vehicle record
of each insured driver as maintained by the Motor Vehicle Division
of the South Carolina Department of Revenue and Taxation; or
(5) has been convicted of or forfeited bail during the
thirty-six months immediately preceding the effective date of
coverage for operating a motor vehicle while in an intoxicated
condition or while under the influence of drugs; or
(6) has been convicted or forfeited bail during the thirty-six
months immediately preceding the effective date for:
(a) any felony involving the use of a motor vehicle;
(b) criminal negligence resulting in death, homicide, or
assault arising out of the operation of a motor vehicle;
(c) leaving the scene of an accident without stopping to
report;
(d) theft or unlawful taking of a motor vehicle;
(e) operating during a period of revocation or suspension
of registration or license;
(f) knowingly permitting an unlicensed person to drive;
(g) reckless driving;
(h) the making of material false statements in the
application for licenses or registration;
(i) impersonating an applicant for license or registration or
procuring a license or registration through impersonation, whether
for himself or another;
(j) filing of a false or fraudulent claim or knowingly
aiding or abetting another in the presentation of such a claim;
(k) failure to stop a motor vehicle when signaled by means
of a siren or flashing light by a law enforcement vehicle; or
(7) has for thirty or more consecutive days during the twelve
months immediately preceding the effective date of coverage,
owned or operated the automobile to be insured (or if newly
acquired, the automobile it replaces) without liability coverage in
violation of the laws of this State; or
(8) has used the insured automobile as follows or if the
insured automobile is:
(a) used in carrying passengers for hire or compensation,
except that the use of an automobile for a car pool must not be
considered use of an automobile for hire or compensation;
(b) used in the business of transportation of flammables or
explosives;
(c) used in illegal operation; or
(d) no longer principally used and garaged within the state,
but not to include students who are operating a motor vehicle
registered in this State while attending an institution located in
another state.
(B) In the event that one or more of the conditions or factors
prescribed in items (1) through (8) of subsection (A) exist, the
motor vehicle customarily operated by that individual must be
written at the objective standards rate.
(C) (B) 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 in accordance with rating plans filed with and
approved by the director or his designee. These rating plans may
provide for different rates and rating plans among affiliated
companies. The director shall approve the rating plans if the rates
are not excessive, inadequate, or unfairly discriminatory. For
the purpose of this section, an affiliated group of automobile
insurers includes a group of automobile insurers under common
ownership, management, or control. Each member of a group of
affiliated insurers shall not be considered a separate insurer for
purposes of compliance with the laws governing the writing,
cancellation, or renewal of an automobile insurance policy.
Therefore, if one company which is a member of a group of
affiliated companies refuses to write, cancels, or refuses to renew a
policy but, at the same time, offers to arrange insurance for the
applicant or insured with another member of the same group, there
has not been a refusal to write, a cancellation, or a refusal to renew
by the first company. However, no insurer shall take such action
unless it does so on the basis of underwriting guidelines filed with
the director. These guidelines shall be treated by the director or his
designee as proprietary trade secrets and subject to disclosure only
to the director or his designee and the consumer advocate, who
shall protect and preserve their confidentiality. The movement of a
policy from one company to another within a group of affiliated
companies resulting in a different rate for the insured may only
occur on the renewal date of the policy. Those automobile
insurers designated contracted pursuant to Section
38-77-590(a), for automobile insurance risks written by them
through producers designated assigned by the
facility governing board pursuant to that section, shall utilize the
rates or premium charges by coverage filed and authorized for
use by the rating organization licensed by the director or his
designee pursuant to Article 11, Chapter 73 of this title, which has
the largest number of members or subscribers for automobile
insurance rates applicable for policies ceded to the
facility. However, those automobile insurers designated
contracted 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
authorized agents not appointed pursuant to Section 38-77-590
on policies not ceded to the facility.
(D)(C) An automobile insurance policy may
be endorsed at any time during the policy period to reflect the
correct rate or premium applicable by reason of the factors or
conditions described in subsection (A) which existed prior to the
commencement of the policy period in which the endorsement is
made, regardless of whether the factors or conditions were known
or disclosed to the insurer at the commencement of the policy
period. However, No policy may be endorsed during a policy
period to reflect factors or conditions occurring during that policy
period. A policy may be endorsed during a policy period to
recognize the addition or deletion of an operator or vehicle.
(E)(D) For purposes of determining the
applicable rates rate to be charged an insured, an
automobile insurer shall obtain and review an applicant's motor
vehicle record."
SECTION 2. Section 38-73-457 of the 1976 Code, as last
amended by Act 181 of 1993 is further amended to read:
"Section 38-73-457. Notwithstanding Sections 38-73-920
and 38-73-1210, every automobile insurer and rating organization
shall, prior to October 1, 1987, file with the department
a base rate one or more rates, which rates
are is defined as a rate by coverage calculated solely
upon the experience generated by the risk for each class and
territory retained by the insurer in its voluntary book of business
and which must not include experience generated by risks ceded or
assumed from the Reinsurance Facility. established
under Section 38-73-1030. An objective standards rate by coverage
must also be filed which is twenty-five percent above the base rate
previously described for each class and territory. The base rate
must be calculated by removing from the rate or premium charge,
then in effect for the automobile insurer, that portion of the rate or
premium charge attributable to the net gain or loss of the insurer as
a result of participation in the operating results of the facility as
required by Section 38-77-760. In determining the base rate and
objective standards rate, by coverage, the director or his designee,
in order that no extra premium revenue is generated by this section,
shall require that the insurer's average rate, by coverage, on
October 1, 1987, (computed as a weighted average of the base rate
and objective standards rate, by coverage, as determined by the
Commissioner), not exceed the insurer's average rate, by coverage,
prior to October 1, 1987, as determined by the director or his
designee. The provisions of the Administrative Procedures Act
apply to any appeal of a base rate or objective standards rate
brought thereunder before the Administrative Law Judge Division
as provided by law. The base rate or objective standards rate
approved by the director or his designee may be put into effect
under bond in a similar manner that a public utility may put a
proposed rate increase into effect under bond as provided by law.
No insurer may file a base rate for any class or territory which is
higher than the rate or premium charge, exclusive of that portion
required by Section 38-73-460, approved by the director or his
designee for use on October 1, 1987. As a result of this section, no
insured may receive an increase in rates for other than an increase
in coverage or due to the provisions of Section 38-77-280,
38-77-610, or 38-73-455, unless the insurer files additional rates in
accordance with this title.
The base rate and objective standards rate filed by each insurer of
automobile insurance are effective if they meet the requirements of
this section, on or after July 1, 1988, for all eligible applicants and
upon the renewal date, on or after July 1, 1988, for all eligible
existing policyholders. If the base rate and objective standards rate
filed by an automobile insurer do not meet the requirements of this
section, the director or his designee shall suspend the authority of
that insurer to write automobile insurance until the deficiencies are
corrected.
After July 1, 1988, No rate or premium charge, exclusive of
the facility recoupment charge approved or established pursuant to
Section 38-77-610 may be approved for an insurer of automobile
insurance unless that rate or premium charge is calculated in
accordance with this section and meets the other applicable
requirements of this title pertaining to the approval of rates or
premium charges.
The consumer advocate, upon request to the director or his
designee, must be provided by him with a copy of any base
rate rates filed with the director or his designee along
with any supporting materials, documents, or studies utilized to
support the filed base rate. In addition, every automobile
insurer and rating organization shall promptly respond to requests
for information and data requested by the consumer advocate
relating to the filed base rate. The consumer advocate must
be afforded an opportunity for a hearing before the director or his
designee on any filed base rate before it takes effect that he
believes does not meet the requirements of this section. After
January 1, 1996, but not before that date, final decisions of the
director or his designee regarding this hearing are subject to the
provisions of the State Administrative Procedures Act and may be
appealed to the Administrative Law Judge Division as provided by
law.
Effective January 1, 1996, the director or his designee shall
disallow the further use of the objective standards rate previously
filed in accordance with this section. However, concurrently with
the above effective date the director or his designee shall modify
the uniform merit rating plan to the extent that surcharges are
applied as a percent of the base rate, not as a flat dollar amount,
incorporating into these surcharges the prior objective standards rate
surcharge and criteria previously listed in Section 38-73-455 so that
the overall rate levels before and after the effective date are
generally the same.
Upon the effective date of this section, nothing herein shall be
construed to require a rating organization, its members or
subscribers, or an individual insurer to refile final rates or premium
charges previously approved by the director or his designee.
Members or subscribers of a rating organization or individual
insurers are authorized to continue to use rates approved before the
effective date of this section. Such continued use shall not require
review or other action pursuant to the Administrative Procedures
Act."
SECTION 3. Section 38-73-735 of the 1976 Code, as last
amended by Act 181 of 1993, is further amended to read:
"Section 38-73-735. In addition to risk and territorial
classification plans promulgated or approved under Section
38-73-730, the department may promulgate plans to afford credits
or discounts to automobile insureds, or he may approve the credit
or discount plans filed with him by insurers of automobile
insurance. No automobile insurance credit or discount plan may be
promulgated or approved by the director or his designee unless:
(1) the criteria for determining eligibility for credits or discounts
under the plan are objective, clear, and unequivocal;
(2) the criteria are based upon factually or statistically supported
data; and
(3) the credits or discounts provided under the plan will be
afforded by the insurer on a nondiscriminatory basis to all insureds
who are eligible therefor and not ceded to the facility. If
an insurance credit or discount plan is given to an insured pursuant
to this section, the policy may be ceded to the Reinsurance Facility
in accordance with the facility's plan of operation."
SECTION 4. The 1976 Code is amended by adding:
"Section 38-73-780. (A) The South Carolina Reinsurance
Facility Board of Governors annually shall develop and file a
liability loss component as defined in Section 38-73-1400(1) for
private passenger automobile insurance coverages based on the total
experience of all insurers in this State including risks ceded to the
facility. The Facility Board of Governors shall contract with
independent actuarial services to develop the loss component. To
expedite the implementation of this section, before January 1, 1997,
the filing shall not be subject to the Administrative Procedures Act.
Due consideration must be given to actual loss experience within
this State for the most recent three-year period for which such
information is available; to prospective loss experience within this
State; and to all other relevant factors within this State; provided,
however, that countrywide loss experience and other countrywide
data may be considered only where credible South Carolina
experience or data is not available.
The South Carolina Reinsurance Facility Board of Governors
annually shall develop and file a physical damage loss component
for private passenger automobile insurance coverages based on the
total experience of all insurers in this State including risks ceded to
the facility. The Facility Board of Governors shall contract with
independent actuarial services to develop the loss component. To
expedite the implementation of this section, before January 1, 1997,
the filing shall not be subject to the Administrative Procedures Act.
Due consideration must be given to actual loss experience within
this State for the most recent three-year period for which such
information is available; to prospective loss experience within this
State; and to all other relevant factors within this State; provided,
however, that countrywide loss experience and other countrywide
data may be considered only where credible South Carolina
experience or data is not available.
(B) The loss component developed under this section is
applicable to the risk and territorial classification plan promulgated
and approved by the director or his designee.
(C) The state rate and statistical division shall annually review
the loss components to determine if it is proper and supported by
statistical evidence and make appropriate filings for approval of
rates as required under this chapter."
SECTION 5. Section 38-73-1420 of the 1976 Code, as added by
Act 148 of 1989 and as last amended by Section 783 of Act 181 of
1993, is further amended to read:
"Section 38-73-1420. After June 30, 1989, the
Board of Governors of the South Carolina Reinsurance Facility
shall file an expense component as defined under Section
38-73-1400(2) for private passenger automobile insurance rate
or premium charges which must accurately reflect the actual
expenses of the South Carolina Reinsurance Facility and a zero
percent profit and contingency provision for use with after
the rating organization with the largest number of members or
subscribers has filed a the pure loss component for
private passenger automobile insurance coverage developed
under Section 38-73-780 with the director or his
designee. To expedite the implementation of this section,
before January 1, 1997, the filing shall not be subject to the
Administrative Procedures Act. Upon the approval of such
component by the director or his designee, those automobile
insurers designated contracted pursuant to Section
38-77-590(A), for risks written by them through producers
designated assigned pursuant to that same section,
and, subject to the provisions of Section 38-73-1425, all
insurers on all risks ceded to the facility, shall utilize these
final rate or premium charges as required under Section
38-77-540. Automobile insurers designated
contracted pursuant to Section 38-77-590(A) are not
required to use those same final rates or premium charges for risks
written through their agents not appointed assigned
pursuant to Section 38-77-590 on risks not ceded to the
facility."
SECTION 6. Section 38-73-1425 of the 1976 Code, as added by
Act 113 of 1991, and as last amended by Act 181 of 1993 is further
amended to read:
"Section 38-73-1425. Except as provided for in
subsections (A), (B), and (C), 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 38-77-540 or the
final rate or premium charge approved for use by the insurer,
whichever is greater.
(A) Insurers having company filed rates which are less than
the uniform rate shall implement the following transition program
for ceded risks insured by that insurer on January 1, 1996, and
having no merit rating points.
Twenty percent of the current differential of the lower company
filed rate shall be added on renewals effective on or after January 1,
1996, and forty percent of the current differential of the lower
company filed rate and the projected state uniform rate shall be
added on renewals effective on or after January 1, 1997, and sixty
percent of the current differential of the lower company filed rate
and the projected state uniform rate shall be added on renewals
effective on or after January 1, 1998, and eighty percent of the
current differential of the lower company filed rate and the
projected state uniform rate shall be added on renewals effective on
or after January 1, 1999, and on renewals effective on or after
January 1, 2000, such risks shall be ceded at the final rate or
premium charge required by Section 38-77-540. However, effective
January 1, 1997, physical damage coverages on renewals shall be
ceded at the facility physical damage rate as defined in Chapter 77,
for insurers using transitional facility rates, the department shall
promulgate a filing form and the director or his designee shall
approve the rate schedule without hearing if the rates are computed
in accordance with this section. Filings under this section shall not
be considered company rate increases under Section 38-73-920.
(B) For the one-year period beginning January 1, 1996, the rate
for risks, other than those risks under Section (A), having no merit
rating plan points and ceded by insurers having company filed rates
in effect on January 1, 1996, which are less than the projected state
uniform rate shall be the sum of the company filed rate and twenty
percent of the current differential of the lower company filed rate
and the state uniform rate. Effective January 1, 1997, all private
passenger automobile risks, other than those under Section (A),
shall be ceded at the final rate or premium charge required by
Section 38-77-540.
(C) For the one-year period beginning January 1, 1996, the rate
for private passenger automobile physical damage coverages ceded
to the facility on new and renewal risks having one or more merit
rating plan points shall be the facility physical damage rate, as
defined in Section 38-77-30(16).
SECTION 7. Section 38-77-10 of the 1976 Code, as amended
by Act 181 of 1993, is further amended to read:
"Section 38-77-10. In order to effect a complete reform
of automobile insurance and insurance practices in South Carolina,
the purposes of this chapter are:
(1) to provide that every automobile insurance risk which is
insurable on the basis of the criteria established in this chapter is
entitled to automobile insurance from the automobile insurer of the
applicant's choice on the basis of the same rates, policy forms,
claims service, and other services provided by the insurer to all
other applicants or insureds falling within the same
classification of risk and territory under the applicable risk and
territorial classification plan promulgated by the department so
long as all these applicants or insureds have satisfied the same
objective standards as established in Sections 38-77-280 and
38-73-455;
(2) to provide a Reinsurance Facility reinsurance
facility for automobile insurers in which all automobile insurers
must participate to the end that the operating expenses and net
profit or loss of the facility may be shared equitably by all the
insurers transacting automobile insurance business in this State
giving appropriate consideration to degrees of utilization of the
facility by the several insurers of automobile insurance and to
provide prohibitions or penalties in respect to excessive utilization
of the facility.; and
(3) to provide prohibitions and penalties in respect to unfairly
discriminatory or unfairly competitive practices having as their
purpose or effect evasion of the statutory mandate of coverage
provided in this chapter or imposing an undue or unfair burden
upon other automobile insurers through excessive utilization of the
facility.
(4) To provide medical, surgical, funeral, and disability
insurance benefits without regard to fault to be offered under
automobile insurance policies that provide bodily injury and
property damage liability insurance, or other security, for motor
vehicles registered in this State."
SECTION 8. Section 38-77-280 of the 1976 Code, as last
amended by Section 810 of Act 181 of 1993, is further amended to
read:
"Section 38-77-280. (A) Notwithstanding Sections
38-77-110 and 38-77-920, and except as provided in subsection
(B), all automobile insurers, including those insurance companies
writing private passenger physical damage coverages only,
shall may make collision coverage and either
comprehensive or fire, theft, and combined additional coverage
available to an insured or qualified applicant who requests the
coverage. Automobile insurers contracted pursuant to Section
38-77-590 for risks written by them through producers assigned by
the facility governing board pursuant to that section shall offer and
make available collision coverage and comprehensive or fire, theft,
and combined additional coverage to an insured or qualified
applicant who requests the coverage.
If collision coverage is offered or provided, it
must have a mandatory deductible of two hundred fifty dollars, but
an insured or qualified applicant, at his option, may select an
additional deductible in appropriate increments up to one thousand
dollars.
If comprehensive coverage or fire, theft, and combined
additional coverages are offered or provided, it must have a
mandatory deductible of two hundred fifty dollars, but an insured,
at his option, may select an additional deductible in appropriate
increments up to one thousand dollars. This deductible does not
apply to auto safety glass. It is an unfair trade practice, as
described in Sections 38-57-30 and 38-57-40, for an insurer or an
agent to sell collision insurance, comprehensive coverage, or fire,
theft, and combined additional coverages unless the insured is
notified at the time of application of the savings which may be
realized if the applicant or the insured selects a higher deductible.
This notice is required only at the time of the initial sale and must
be in a form approved by the director or his designee. An insurer
may offer insureds lower deductibles at the insurer's option.
(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 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, 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
an applicant or existing policyholder, on renewal, who has collected
benefits provided under 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 38-73-760c.
All insurers subject to the provisions of this section writing
single interest collision coverage shall provide an applicant for the
insurance at the time of his application a notice separate and apart
from any other form used in the application. The notice must be
signed by the applicant evidencing his acknowledgement of having
read the notice. The notice must contain the following language
printed in bold face type:
`NOTICE: THE INSURANCE COVERAGE YOU ARE
HEREBY PURCHASING IS SINGLE INTEREST COLLISION
COVERAGE. THE AMOUNT OF INSURANCE DECREASES
AS YOU PAY OFF THE AMOUNT OF YOUR INDEBTEDNESS.
YOU MAY NOT RECEIVE ANY INSURANCE PROCEEDS
OVER AND ABOVE THE AMOUNT OF THE OUTSTANDING
BALANCE ON YOUR LOAN.'
(C) Notwithstanding Section 38-77-110, automobile
physical damage coverage in an automobile insurance policy may
be canceled at any time during the policy period by reason of the
factors or conditions described in Section 38-73-455(A) or
Section 38-77-280(B) the uniform merit rating plan
which existed before the commencement of the policy period and
which were not disclosed to the insurer at the commencement of the
policy period.
(D) No policy of insurance which provides automobile physical
damage coverage only may be ceded to the facility.
(E) Insurers of automobile insurance may charge a rate for
physical damage insurance coverages different than
from those provided for in Section 38-73-457 if the rates
are filed with the department and approved by the director or his
designee. Any applicant or existing policyholder, to be charged
this different rate, must be denied the coverage pursuant to
subsection (B) at the rate provided in Section 38-73-457.
Notwithstanding Section 38-37-111, automobile physical
damage coverages may be ceded to the facility. However,
automobile physical damage coverages ceded to the facility by an
insurer or servicing carrier shall be at the rate provided for in
accordance with Section 38-77-540.
(F) A carrier may not cede collision coverage, comprehensive
coverage, or fire, theft, and combined additional coverages with a
deductible of less than two hundred fifty dollars. An insured or
qualified applicant my select an additional deductible in appropriate
increments up to one thousand dollars. However, the
mandatory deductible does not apply to safety glass. In
determining the premium rates to be charged on automobile
insurance, it is unlawful to consider race, color, creed, religion,
national origin, ancestry, location of residence, occupation, or
economic status. Nothing in this section shall prohibit use of
territorial plans and classifications approved by the director or his
designee. If the Director of Insurance makes a finding that the
insurer is participating in a pattern of discriminatory practices, the
director may impose a fine on the insurer of up to two hundred
thousand dollars."
SECTION 9. Section 38-77-30 of the 1976 Code is amended by
adding:
"(15) `State uniform rate' means the final rate or premium
charge for liability coverage which is to be established by adding
the liability loss component developed under Section 38-73-780 to
the expense component developed under Section 38-73-1420 and
applying to the resulting total a modification factor of 1.10 for the
two-year period beginning January 1, 1996; a modification factor of
1.125 for the two-year period beginning January 1, 1998; and a
modification factor of 1.15 on or after January 1, 2000.
(16) `Facility physical damage rate' means the final rate or
premium charge for physical damage coverage which is to be
established by adding the physical damage loss component
developed under Section 38-73-780 to the expense component
developed under Section 38-73-1420."
SECTION 10. Section 38-77-600 of the 1976 Code, as last
amended by Act 181 of 1993, is further amended to read:
"Section 38-77-600. The rate or premium charged by
insurers of private passenger automobile insurance must include a
facility recoupment charge, which must be added to the appropriate
base rate or objective standards rate prescribed in Sections
38-73-455 and 38-73-457. The operating losses of the facility for a
twelve-month period must be recouped in the subsequent
twelve-month period.
(1) Prior to Before December first of each year,
the governing board of the facility shall calculate the recoupment
amount, by coverage, by dividing the net facility operating loss,
adjusted to reflect prudently incurred expenses, consistent with the
provisions of Section 38-73-465, and the time value of money, by
mandated coverage for the preceding facility accounting year, by
the total number of earned car years in South Carolina, by
coverage, for the same period of time. .386 multiplied by the
recoupment is to be borne by risks having zero surcharge points
under the Uniform Merit Plan promulgated by the department. The
remainder of the recoupment (.614 multiplied by the recoupment)
represents R in the formula, P(1)X + 2P(2)X + 3P(3)X + 4P(4)X +
5P(5)X + 6P(6)X + 7P(7)X + 8P(8)X + 9P(9)X + 10P(1)+I0X = R.
In this formula to be utilized in determining the facility recoupment
charge:
(a) P(1) is the percentage of risks which have one surcharge
point under the Uniform Merit Rating Plan;
(b) P(2) is the percentage of risks which have two surcharge
points under the Uniform Merit Rating Plan;
(c) P(3) is the percentage of risks which are subject to a
surcharge of three points under the Uniform Merit Rating Plan;
(d) P(4) is the percentage of risks which are subject to a
surcharge of four points under the Uniform Merit Rating Plan;
(e) P(5) is the percentage of risks subject to a surcharge of
five points under the Uniform Merit Rating Plan;
(f) P(6) is the percentage of risks subject to a surcharge of
six points under the Uniform Merit Rating Plan;
(g) P(7) is the percentage of risks subject to a surcharge of
seven points under the Uniform Merit Rating Plan;
(h) P(8) is the percentage of risks subject to a surcharge of
eight points under the Uniform Merit Rating Plan;
(i) P(9) is the percentage of risks subject to a surcharge of
nine points under the Uniform Merit Rating Plan;
(j) P(1)+I0 or more is the percentage of risks subject to a
surcharge of ten or more points under the Uniform Merit Rating
Plan;
(k) X is the dollar amount by coverage, to be charged all
risks having one surcharge point under the Uniform Merit Rating
Plan promulgated by the department. This dollar amount, by
coverage, is the facility recoupment charge to be added to the base
rate or objective standards rate prescribed in Sections
38-73-455 and 38-73-457 for all risks which have one surcharge
point.
(2) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which
have one surcharge point under the Uniform Merit Rating Plan is
calculated by multiplying X by a factor of one.
(3) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which
have two surcharge points under the Uniform Merit Rating Plan is
calculated by multiplying X by a factor of two.
(4) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which
are subject to a surcharge of three points under the Uniform Merit
Rating Plan is calculated by multiplying X by a factor of three.
(5) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which
are subject to a surcharge of four points under the Uniform Merit
Rating Plan is calculated by multiplying X by a factor of four.
(6) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which
are subject to a surcharge of five points under the Uniform Merit
Rating Plan is calculated by multiplying X by a factor of five.
(7) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which
are subject to a surcharge of six points under the Uniform Merit
Rating Plan is calculated by multiplying X by a factor of six.
(8) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which
are subject to a surcharge of seven points under the Uniform Merit
Rating Plan is calculated by multiplying X by a factor of seven.
(9) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which
are subject to a surcharge of eight points under the Uniform Merit
Rating Plan is calculated by multiplying X by a factor of eight.
(10) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which
are subject to a surcharge of nine points under the Uniform Merit
Rating Plan is calculated by multiplying X by a factor of nine.
(11) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which
are subject to a surcharge of ten or more points under the Uniform
Merit Rating Plan is calculated by multiplying X by a factor of ten.
(12) In determining the number of surcharge points a risk has for
the purposes of this section, no surcharge points assigned under the
Uniform Merit Rating Plan because the principal operator of the
automobile has not been licensed in any state for at least one year
immediately preceding the writing of the risk or as a result of a
failure of any motor vehicle equipment requirement may be
considered.
(13) This section applies to all private passenger automobile
insurance policies issued or renewed after June 30, 1989. However,
insurers unable to comply with the provisions of this section and
renewal provisions required by law may comply with this section at
any time after June 30, 1989, but in no event later than October 1,
1989."
SECTION 11. Section 38-77-620 of the 1976 Code, as last
amended by Act 148 of 1989, is further amended to read:
"Section 38-77-620. The facility recoupment charges
approved or established pursuant to Section 38-77-610 must be
added to the approved base rate and objective standards rate
in effect for each automobile insurer. The combined rate or
premium charge is effective on July first of each year and the
recoupment charges must remain constant until July first of the
following year. The base rate and objective standards rate
may change in accordance with Section 38-73-457 and the other
applicable requirements of this title pertaining to the approval of
rates or premium charges. Facility recoupment charges must be
considered in accordance with:
(1) Any recoupment charge paid by policyholders must be
considered premium for the purpose of calculating premium taxes
and commissions and is subject to normal policy cancellation
procedures.
(2) Any net operating gains resulting from the operation of the
facility must be retained by the facility, and the gains and any
investment income derived from the gains must be used to offset
future operating losses.
(3) The total funds recouped by all insurers less commission
and premium tax expenses and time value of money considerations
must be paid to the Reinsurance reinsurance facility
in accordance with the plan of operation. The governing board
shall redistribute the funds to the insurers based upon each insurer's
share of the Reinsurance Facility reinsurance facility
losses. Recoupment must be used solely for the purpose of
recovering past facility operating deficits. The plan of operation
must provide that the amount ultimately received by an individual
company is not more than the company's share of the
Reinsurance Facility reinsurance facility losses, plus
the time value of money.
(4) In the making and approval of rates for small commercial
automobile risks, as defined in Section 38-77-30, consideration
must be given to the net gains or losses incurred by insurers as a
result of participation in the operating results and actual, prudently
incurred expenses, respectively, of the facility."
SECTION 12. Section 38-77-910 of the 1976 Code, as amended
by Act 181 of 1993, is further amended to read:
"Section 38-77-910. It is an act of unlawful discrimination
for an automobile insurer to make any distinction between
automobile insurance policyholders or applicants for automobile
insurance with respect to coverage, rates, claims, or other services
except as the distinctions are provided for in the rating plans for the
classification of risks and territories promulgated by the department
and the facility rate plans."
SECTION 13. Section 38-77-940 of the 1976 Code, as last
amended by Act 181 of 1993, is further amended to read:
"Section 38-77-940. No insurer of automobile insurance
shall directly or indirectly by offer or promise of reward or
imposition or threat of penalty or through any artifice or device
whatsoever, confer any benefit upon any agent or impose any
detriment upon any such agent for the purpose of avoiding any
class or type of automobile insurance risk which the insurer
considers it necessary to reinsure in the facility; nor shall any offer
or promise of reward or imposition or threat of penalty in
connection with any other line or type of insurance be so tied to
automobile insurance as to have a tendency to induce the agent to
avoid any such class or type of automobile insurance risk; nor
shall any insurer of automobile insurance provide to agents, directly
or indirectly, orally or in writing, any listing of classes or types of
automobile insurance risks which it considers necessary to reinsure
in the Facility; nor shall any insurer of automobile insurance
terminate its insurance business with any one agent over the writing
of certain classes or types of automobile insurance risks without
also pulling out of the entire State or terminating its similar
insurance business with all other agents in the State at the same
time for a period of time of at least 365 days, except that if the
insurer reinstates the agent within thirty days of the determination
that the termination was unlawful, then this provision shall not
apply; nor shall any insurer of automobile insurance do anything
unfair, or unfairly fail to do anything, which has the effect of, or
which results in, causing any ceded insurance business to have a
detrimental effect on any incentive bonuses paid by the insurer to
agents. Any act in violation of this section constitutes an act of
unlawful discrimination and unfair competition which, if wilful,
shall result in the suspension or revocation of the insurer's
certificate of authority for not less than twelve months. Any
agreement made in violation of this section shall be void.
Nothing in this section may be considered to preclude or impair
agreements between insurers and their agents or some of their
agents to pay contingency commissions or a profit-sharing bonus
based upon the quality of business; nor shall the insurers, in any
manner, use that business placed in the facility when determining
the quality bonus; nor may it be considered to preclude an
agreement between any agent and an insurer of automobile
insurance to exclude from any profit-sharing or contingency
arrangement automobile insurance business coming unsolicited to
the agent and written by him solely because of the mandate of
coverage provided in this chapter.
No insurer of automobile insurance shall cancel its representation
by an agent primarily because of the volume of automobile
insurance placed with it by the agent on account of the statutory
mandate of coverage nor because of the amount of the agent's
automobile insurance business which the insurer has considered it
necessary to reinsure in the facility."
SECTION 14. Section 38-77-950 of the 1976 Code, as last
amended by Act 104 of 1993 and Act 181 of 1993, is further
amended to read:
"Section 38-77-950. It is the intent of this chapter that the
facility 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 the risks or risks in
certain rating territories. The director or his designee 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 insurers
under the same management has ceded or is about to cede more
than thirty-five forty percent of total direct
cedeable written premiums on South Carolina automobile insurance
as reported in the most recently filed annual statement of the insurer
or group total cedeable car-year exposures, including
nonowner risk exposures, as stated in the most recent calendar year
report of the South Carolina Reinsurance Facility. Effective
January 1, 1997, this limitation shall be forty-five percent.
Effective January 1, 1998, this limitation shall be fifty percent.
Upon the written request of the policyholder, insurance companies
doing business in this State shall give written notice to the
policyholder informing him whether or not he and 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).
Total direct cedeable written premiums as used in this section
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 October 1, 1993
Total cedeable car-year exposures, including nonowner risk
exposures as used in this section, do not include such exposures
ceded to the facility which do not qualify for the safe driver
discount in Section 38-73-760(e)."
SECTION 15. Notwithstanding any other provision of law,
recoupment fees for private passenger automobile insurance for the
twelve months ending June 30, 1996, shall not exceed the level
charged during the twelve-month period ending June 30, 1995; and
facility losses unrecouped due to this section shall be recouped
evenly during the three-year period beginning July 1, 1996.
SECTION 16. Section 38-3-10 of the 1976 Code is amended to
read:
"Section 38-3-10. (A) Effective July 1,
1995, through June 30, 1996, There there is
established a separate and distinct department of this State, known
as the Department of Insurance. The department must be managed
and operated by a director appointed by the Governor upon the
advice and consent of the Senate. The director is subject to
removal by the Governor as provided in Section 1-3-240(B). The
director shall be selected with special reference to his training,
experience, technical knowledge of the insurance industry, and
demonstrated administrative ability. The director may appoint or
designate the person or persons who shall serve at the pleasure of
the director to carry out the objectives or duties of the department
as provided by law. Furthermore, the director may bestow upon his
designee or deputy director any duty or function required of him by
law in managing or supervising the Department of Insurance.
(B) Effective January 1, 1997, the department must be
operated under the management and direction of a statewide officer
designated as the Commissioner of Insurance. The office must be
elected for a four-year term beginning with the 1996 general
election. Candidates for the office of Commissioner of Insurance
shall file for election and be nominated in accordance with the
provisions applicable to the nomination and election of statewide
constitutional officers, mutatis mutandis."
SECTION 17. Section 38-77-590 of the 1976 Code, as last
amended by Section 823 of Act 181 of 1993, is further amended by
adding:
"(i) Notwithstanding any other provisions of this section
or of this article, the governing board of the facility shall determine
an average volume of business by designated producers using a
methodology designed to eliminate from the calculation extremes of
low and high volume that would skew the average. Where the
designated producers in an area of the State exceed this average
volume, the governing board shall add additional otherwise
qualified designated producers without regard to the criteria for
designation provided in this section. In making these additional
designations, the governing board shall survey the representation of
minorities among designated producers in each area of the State and
where minorities are underrepresented with respect to the population
of the area, shall use the designation of these additional producers
to make up for the disparity."
SECTION 18. The Joint Insurance Laws Study Committee shall
review the system of automobile insurers designated pursuant to
Section 38-77-590(a) of the 1976 Code. The committee shall
conduct public hearings and receive public comment, as appropriate,
and make a recommendation to the General Assembly regarding
action which should be taken to abolish the designated agents
system in this State in an orderly and appropriate manner. This
recommendation must be submitted to the Speaker of the House of
Representatives and to the President of the Senate not later than
December 1, 1995.
SECTION 19. The title of Section 38-77-540 of the 1976 Code
is amended to read:
"Duties of ceding insurer Facility rate
plans."
SECTION 20. SECTION 38-77-540 of the 1976 Code is
amended to read:
"Section 38-77-540. The ceding insurer shall transfer or
credit to the Facility on any policy of automobile insurance
reinsured by the Facility the pure loss component of its rate or
premium charge together with the profit and contingency
component of the rate or premium charge as determined under its
rating plan or system as filed with the Department. The ceding
insurer shall retain as and for its ceding commission the allocated
loss adjustment expense component as well as the underwriting and
administrative expense components of the rate or premium charge
under ceding insurer's rating plan or system as filed with the
Department. However, no ceding insurer may include in the
agents' commissions component of its underwriting expenses any
amount greater than it has actually paid its agent as commission on
the reinsured risk. The facility shall accept cessions on a
policy of private passenger automobile insurance at the option of an
insurer but only at the rate or premium charge as determined under
the rating plans established by the governing board and approved by
the director or his designee, subject, however, to Section 38-77-950
regarding reasonable utilization of the facility by company. The
rate plans for the facility are subject to the director's or his
designee's approval which may be granted only if the plan is
consistent with and provides for the following:
(A) The rate or premium charge for drivers of private
passenger automobiles shall be the state uniform rate as defined in
this chapter.
(B) Beginning on January 1, 1997, the rate or premium
charge for private passenger automobile physical damage coverages
shall be the facility physical damage rate as defined in this chapter.
(C) The rate plans of the facility shall use the applicable
risk and territorial classification plan promulgated by the director or
his designee including merit rating plan surcharges and discounts as
provided for in Section 38-77-760(e). The facility rate plans shall
not include discounts approved for individual insurers under Section
38-73-735.
The facility shall publish a uniform rate and rules manual as
required by this section. This manual shall include all applicable
classifications, discounts, rating rules and procedures to be utilized
in connection with facility business. This manual shall be subject
to annual approval by the director or his designee. The director
shall resolve all subsequently arising administrative issues by the
department bulletin.
(D) The ceding insurer shall transfer or credit to the
facility on any policy of automobile insurance reinsured by the
facility the pure loss component of the applicable uniform rate
together with the profit and contingency component of such rate.
The ceding insurer shall retain as and for its ceding commission its
allocated loss adjustment expense component as well as its
underwriting and administrative expense components of the
applicable uniform rate as specified in the plan of operation of the
South Carolina Reinsurance Facility. However, no ceding insurer
may include in the agents' commissions component of its
underwriting expenses any amount greater than it has actually paid
its agent as commission on the reinsured risk.
(E) The governing board shall assign a specific location
to each producer designated. The governing board shall determine
producers whom the director or his designee the locations assigned
by him to those producers whom the director or his designee has
designated. Except through the acquisition of an exiting designated
agency as permitted in paragraph (H) of this section, designated
producers may not open or maintain any other locations without the
written authorization of the governing board: provided, however,
that an applicant maintaining multiple offices on June 4, 1987, is
entitled to maintain two locations as a designated agent which he
owned and operated at that time and through which premiums in at
least the amount of seventy-five thousand dollars were written. The
governing board shall terminate the designation, and the director or
his designee shall revoke all agent's licenses of any producer who
does not comply with this requirement upon demand by the
governing board. Upon termination, the producer's expirations on
designated business become the property of the facility.
(F) The designation of a producer by the director or his
designee of the governing board is transferable to the Reinsurance
Facility for purposes of liquidation, or a spouse, child, parent,
brother, sister, employee or partner of five years, the producer upon
the designated producer's retirement, incapacity, or death. The
duties of a designated producer may be performed by one of more
qualified employees of the producer or the producer's corporate
agency.
(G) A designated producer may have any direct or
indirect connection or contract with any voluntary market outlet for
the purpose of writing any type of automobile insurance in this
State. Provided that the combined annual amount of net written
premiums for private passenger automobile liability insurance
coverages in all of the producers voluntary market outlets shall not
exceed sixty-five percent of the designated producers total annual
amount of net written premiums for private passenger automobile
liability insurance coverages. In the event the calculated percentage
exceeds sixty-five percent in eighteen months after notification
during which time an appropriate reduction in voluntary market
writings has not been accomplished the governing board shall
terminate the designation of the producer."
SECTION 21. This act takes effect upon approval by the
Governor.
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