H*3330 Session 107 (1987-1988)
H*3330(Rat #0398, Act #0374 of 1988) General Bill, By J.D. Bradley, Boan and
J.W. McLeod
Similar(S 899)
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Chapter 2
in Title 38, relating to insurance, so as to provide civil and criminal
penalties for violations of the insurance law; to amend Section 38-25-320,
relating to the fine for conducting unauthorized insurance business in this
State, so as to increase the maximum fine from ten to fifty thousand dollars;
to amend Section 38-5-120, relating to acts which result in the revocation or
suspension of an insurer's certificate of authority, so as to include failure
to comply with a lawful order of the Commission; to amend Section 38-43-130,
relating to the Commissioner's authority to revoke or suspend agents'
licenses, so as to delete wilfulness as an element of a violation, to increase
from one to two years the maximum period of a license suspension, and to
reference the general penalty provisions added by this Act; to amend Sections
38-5-130, 38-7-80, 38-13-90, 38-13-150, 38-17-170, 38-25-330, 38-27-420,
38-29-100, 38-31-80, 38-37-930, 38-39-20, 38-39-40, 38-43-160, 38-43-190,
38-45-140, 38-45-150, 38-47-60, 38-47-70, 38-53-150, 38-53-340, 38-55-40,
38-55-60, 38-55-80, 38-55-340, 38-57-200, 38-59-30, 38-59-50, 38-63-10,
38-63-20, 38-65-10, 38-65-20, 38-69-10, 38-69-20, 38-71-90, 38-71-220, and
38-73-80, all relating to the insurance law and containing separate penalty
provisions, so as to delete the existing penalty provisions and add references
to the general penalty provisions added by this Act; and to repeal Sections
38-25-340, 38-25-350, 38-37-950, 38-37-960, 38-43-140, 38-43-150, 38-61-60,
and 38-73-100 relating to the insurance law.
10/19/87 House Prefiled
10/19/87 House Referred to Committee on Labor, Commerce and Industry
01/12/88 House Introduced and read first time HJ-250
01/12/88 House Referred to Committee on Labor, Commerce and
Industry HJ-251
01/20/88 House Committee report: Favorable Labor, Commerce and
Industry HJ-413
01/26/88 House Read second time HJ-549
01/28/88 House Read third time and sent to Senate HJ-723
02/02/88 Senate Introduced, read first time, placed on calendar
without reference SJ-9
02/04/88 Senate Amended SJ-38
02/04/88 Senate Read second time SJ-38
02/04/88 Senate Unanimous consent for third reading on next
legislative day SJ-38
02/05/88 Senate Read third time SJ-2
02/05/88 Senate Returned SJ-2
02/10/88 House Debate adjourned on amendments HJ-1052
02/11/88 House Non-concurrence in Senate amendment HJ-1139
02/11/88 Senate Recedes from amendments SJ-26
02/16/88 House Ordered enrolled for ratification HJ-1175
03/08/88 Ratified R 398
03/14/88 Signed By Governor
03/14/88 Effective date 03/14/88
03/14/88 Act No. 374
03/22/88 Copies available
(A374, R398, H3330)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 2
IN TITLE 38, RELATING TO INSURANCE, SO AS TO PROVIDE CIVIL AND CRIMINAL PENALTIES
FOR VIOLATIONS OF THE INSURANCE LAW; TO AMEND SECTION 38-25-320, RELATING TO THE
FINE FOR CONDUCTING UNAUTHORIZED INSURANCE BUSINESS IN THIS STATE, SO AS TO
INCREASE THE MAXIMUM FINE FROM TEN TO FIFTY THOUSAND DOLLARS; TO AMEND SECTION
38-5-120, RELATING TO ACTS WHICH RESULT IN THE REVOCATION OR SUSPENSION OF AN
INSURER'S CERTIFICATE OF AUTHORITY, SO AS TO INCLUDE FAILURE TO COMPLY WITH A
LAWFUL ORDER OF THE COMMISSION; TO AMEND SECTION 38-43- 130, RELATING TO THE
COMMISSIONER'S AUTHORITY TO REVOKE OR SUSPEND AGENTS' LICENSES, SO AS TO DELETE
WILFULNESS AS AN ELEMENT OF A VIOLATION, TO INCREASE FROM ONE TO TWO YEARS THE
MAXIMUM PERIOD OF A LICENSE SUSPENSION, AND TO REFERENCE THE GENERAL PENALTY
PROVISIONS ADDED BY THIS ACT; TO AMEND SECTIONS 38-5-130, 38-7-80, 38- 13-90,
38-13-150, 38-17-170, 38-25-330, 38-27-420, 38-29-100 38-31-80, 38-37-930,
38-39-20, 38-39-40, 38-43-160, 38-43-190, 38-45-140, 38-45-150, 38-47-60,
38-47-70, 38-53-150, 38-53-340, 38-55-40, 38-55-60, 38-55-80, 38-55-340
38-57-200, 38-59-30, 38-59-50, 38-63- 10 38-63-20, 38-65-10, 38-65-20, 38-69-10,
38-69-20, 38-71 -90, 38-71-220, AND 38-73-80, ALL RELATING TO THE INSURANCE LAW
AND CONTAINING SEPARATE PENALTY PROVISIONS, SO AS TO DELETE THE EXISTING PENALTY
PROVISIONS AND MAKE THE PROVISIONS OF THESE SECTIONS SUBJECT TO THE GENERAL
PENALTY PROVISIONS ADDED BY THIS ACT; AND TO REPEAL SECTIONS 38-25-340,
38-25-350, 38-37-950, 38-37-960, 38-43- 140, 38-43- 150, 38-61-60, AND 38-73-100
RELATING TO THE INSURANCE LAW.
Be it enacted by the General Assembly Or the State of South Carolina:
New chapter added
SECTION 1. Title 38 of the 1976 Code is amended by adding:
"CHAPTER 2
Penalties
Section 38-2-10. Unless otherwise specifically provided by law, the following
administrative penalties apply for each violation of the insurance laws of this
State:
(1) If the violator is an insurer or a health maintenance organization licensed
in this State, the Commissioner shall (a) fine the violator in an amount not to
exceed fifteen thousand dollars, or (b) suspend or revoke the violator's
authority to do business in this State, or both. If the violation is wilful, the
Commissioner shall (a) fine the violator in an amount not to exceed thirty
thousand dollars, or (b) suspend or revoke the violator's authority to do
business in this State, or both
(2) If the violator is a person, other than an insurer or a health maintenance
organization, licensed by the Commissioner in this State, the Commissioner shall
(a) fine the person in an amount not to exceed two thousand five hundred dollars,
or (b) suspend or revoke the license Or the person, or both. If the violation is
wilful, the Commissioner shall (a) fine the person in an amount not to exceed
five thousand dollars, or (b) suspend or revoke the license of the person, or
both.
The penalties in items (1) and (2) are in addition to any criminal penalties
provided by law or any other remedies provided by law. The administrative
proceedings in items ( ) a do not preclude civil or criminal proceedings from
taking place before, during, or after the administrative proceeding.
Section 38-2-20. Any person convicted of a misdemeanor defined in this title must
be punished by a fine of not more than two thousand five hundred dollars or by
imprisonment for not more than two years, or both, unless another penalty is
specifically provided by law
Section 38-2-30. Any person who performs an act without a license required by
this title is guilty of a misdemeanor and, upon conviction, must be fined not
more than ten thousand dollars or imprisoned for two years, or both."
Fine increased
SECTION 2. Section 38-25-320 of the 1976 Code is amended to read:
"Section 38-25-320. An unauthorized insurer who transacts any unauthorized
act of an insurance business as set forth in Article 3 of this chapter may be
fined not more than fifty thousand dollars."
License revoked
SECTION 3. Section 38-5-120 of the 1976 Code is amended to read:
"Section 38-5-120. If the Commissioner is of the opinion upon examination
or other evidence that:
(a) an insurer is in an unsound condition, or
(b) an insurer has failed to comply with the law or with the provisions of its
charter, or
(c) the insurer's condition is such as to render its proceedings hazardous to
the public or its policyholders, or
(d) the true value of the insurer's assets, if it is a life insurer, is less
than its liabilities, exclusive of its capital, or
(e) the officers or agents of an insurer refuse to submit to examination or to
perform any legal obligation relative to an examination, or
(f) an insurer has failed to comply with a lawful order of the Commissioner,
the Commissioner shall revoke or suspend all certificates of authority granted
to the insurer, its officers, or agents and shall cause notice thereof to be
published in a newspaper of general circulation in this State. No new business
may be done thereafter by the insurer or its agents in this State while the
default or disability continues nor until its authority to transact business is
restored by the Commissioner."
Penalty
Section 4. Section 38-5-130 of the 1976 Code is amended to read-
"Section 38-5-130. The Commissioner may, in lieu of license revocation or
suspension as provided by Section 38-5-120, impose a monetary penalty as provided
in Section 38-2-10 for each violation or failure of compliance or refusal to
submit or perform as prescribed therein. Series of acts by an insurer which
merely implement a basic violation and are not separate and distinct violations
of an independent nature are considered to be part of the basic violation and
only one penalty may be imposed thereon."
Penalty
SECTION 5. Section 38-7-80 of the 1976 Code is amended to read:
"Section 38-7-80. Every fire insurer shall keep accurate books of account
of all business done by it on fire insurance required to be reported under the
provisions of Section 38-7-70. If it is apparent the return is fraudulent or
dishonest, the Commissioner shall investigate the return and collect the amount
he finds due.
Every fire insurer which neglects to keep books of account as required by this
section, neglects or fails to report or pay any of the money due on premiums as
required by Section 38-7-40 or 38-7-70, or is found upon examination to have made
a false return of business done by it shall for each offense be subject to the
penalty provisions of Section 38-2-10, to be applied to the purposes prescribed
in Section 23-9-410. "
Penalty
SECTION 6. Section 38-13-90 of the 1976 Code is amended to read:
"Section 38- 13-90. No insurer may publish a statement of its assets and
liabilities unless it shows both its assets and liabilities with equal
conspicuousness. The statement shall reflect the assets and liabilities as were
shown on the last annual statement or subsequent report of examination accepted
by the Commissioner unless the Commissioner has given prior written approval to
the publishing of a statement as of another date. Any publication purporting to
show the capital of the insurer shall exhibit only the amount of capital actually
paid in. An insurer or agent violating this section is subJect to the penalties
provided in Section 38-2-10. "
Penalty
SECTION 7. Section 38-13-150 of the 1976 Code is amended to read-
"Section 38-13-150. Every insurer shall file a return, on a form and at
times prescribed by the Commissioner, showing all reinsurance or cessions of risk
or liability contracted for or effected by it, whether by issue of policy, entry,
or bordereau, general participation agreement, excess loss reinsurance, or in any
manner whatsoever, upon property located in this State or covering, whether
specified or otherwise, any risk or liability upon property so located. The
return must be certified by the oath of its president and secretary, if a company
of the United States, and, if a company of a foreign country, by the oath of its
managers in the United States as to reinsurance or cessions effected through its
branch office in the United States and by the oath of its president and secretary
or by officers corresponding thereto, at its home office, wherever located, as
to reinsurance or cessions contracted for or effected through the foreign office.
The refusal of an insurer to file the required return is presumptive evidence
that it is guilty of violating the provisions of Section 38-9-190."
Permit
SECTION 8. Section 38-17-170 of the 1976 Code is amended to read:
"Section 38-17-170. Any attorney who exchanges any contract for indemnity
specified in this chapter or directly or indirectly solicits or negotiates any
applications for this contract without first complying with this chapter is
guilty of a misdemeanor. The Commissioner, in his discretion and on terms he may
prescribe, may issue a permit for organization purposes which must continue in
force or be canceled at his pleasure."
Penalty
SECTION 9. Section 38-25-330 Or the 1976 Code is amended to read-
"Section 38-25-330. Any person violating this chapter is guilty of a
misdemeanor."
Penalty
SECTION 10. Section 38-27-420(b) of the 1976 Code is amended to read-
"(b) Any agent failing to give notice or file a report of compliance as
required in subsection (a) of this section is subject to the penalty provisions
of Section 38-2-10. "
Penalty
SECTION 11. Section 38-29-100(2) of the 1976 Code is amended to read:
"(2) The Commissioner may suspend or revoke, after notice and hearing, the
certificate of authority to transact insurance in this State of any member
insurer which fails to pay an assessment when due or fails to comply with the
plan of operation. As an alternative, the Commissioner may impose the penalties
provided in Section 38-2-10."
Penalty
SECTION 12. Section 38-31-80(2)(b) of the 1976 Code is amended to read:
"(b) Suspend or revoke, after notice and hearing, the certificate of
authority to transact insurance in this State of any member insurer which fails
to pay an assessment when due or which fails to comply with the plan of
operation. As an alternative, the Commissioner may impose the penalties provided
in Section 38-2-10."
False statement
SECTION 13. Section 38-37-930 of the 1976 Code is amended to read:
"Section 38-37-930. Any person, officer, member, or examining physician
of a fraternal benefit association who knowingly or wilfully makes any false or
fraudulent statement or representation in or with reference to any application
for membership or for the purpose of obtaining money from or benefit in any
association transacting business under this chapter is guilty of a
misdemeanor."
License required
SECTION 14. Section 38-39-20(a) is amended to read:
"(a) No person may engage in the business of servicing insurance premiums
in this State without first obtaining a license from the Commissioner. any person
who engages in the business of servicing insurance premiums in this State without
obtaining a license is guilty of a misdemeanor. Each transaction constitutes a
separate offense."
Penalty
SECTION 15. Section 38-39-40(b) of the 1976 Code is amended to read:
"(b) Before the Commissioner revokes, suspends, or refuses to renew the
license of a premium service company, he shall give the person an opportunity to
be fully heard and to introduce evidence in his behalf. In lieu of revoking or
suspending the license for any of the causes enumerated in this section, after
a hearing, the Commissioner may subject the company to a monetary penalty as
provided for in Section 38-Z-10 for each offense when in his judgment he finds
that the public interest would not be harmed by the continued operation of the
company. The penalty must be paid to the Commissioner and must be deposited by
him in the state treasury."
Penalty
SECTION 16. Section 38-43-130 of the 1976 Code is amended to read:
"Section 38-43-130. The Commissioner may revoke or suspend an agent's
license after ten days' notice or refuse to reissue a license when it appears
that an agent has been convicted of a crime involving moral turpitude, has
violated this title or any regulation promulgated by the Commissioner, or has
wilfully deceived or dealt unjustly with the citizens of this State.
For purposes of this section, 'convicted' includes a plea of guilty or a plea
of nolo contendere, and the record of conviction, or a copy of it, certified by
the clerk of court or by the judge in whose court the conviction occurred is
conclusive evidence of the conviction.
The words 'deceived or dealt unjustly with the citizens of this State' include,
but are not limited to, action or inaction by the agent as follows:
(1) misstating the facts in an application for insurance or aiding in the
misstatement of the facts;
(2) failing to inform promptly the customer or insured of the correct premium
or informing him of an incorrect premium based on the information furnished the
agent by the customer or insured;
(3) failing to transmit promptly or pay all or a portion of the amount of an
insurance premium when the agent or one of his employees has received payment
from a customer or insured or someone on his behalf or when it has been financed
by the agent;
(4) issuing his check covering all or a portion of an insurance premium which
is not accepted by the bank on which it is written when it is initially submitted
to the bank;
(5) failing to deliver promptly a policy, endorsement, or rider to any insured;
(6) failing to notify promptly the customer or insured if the agent has been
unable to obtain the requested insurance for him;
(7) failing to maintain adequate records regarding insurance sought or obtained
from or through the agent which can be examined by the Commissioner or one of his
representatives for and on behalf of a citizen of this State.
When upon investigation the Commissioner finds that an agent has obtained a
license by fraud or misrepresentation, he may suspend immediately the license.
The Commissioner, in an order suspending a license, shall specify the period
during which the suspension is to be in effect. The period may not exceed two
years.
No licensee whose license has been revoked or an applicant who has been refused
a license by the Commissioner has the right to apply for another license within
two years from the effective date of the revocation or refusal or if Judicial
review of the revocation or refusal is sought, within two years from the date of
final court order or decree affirming the revocation or suspension.
If, after notice of a hearing or notice of an opportunity for hearing, the
Commissioner finds that one or more grounds exist for the revocation or
suspension of, or the refusal to issue or reissue a license, the Commissioner,
in his discretion, in lieu of revocation, suspension, or refusal, may impose upon
the agent or applicant an administrative penalty as provided in Section 38-2-10
for each offense or ground.
The Commissioner may allow the agent or applicant a reasonable period, not to
exceed thirty days, within which to pay to the Commissioner the amount of the
penalty imposed. If the agent or applicant fails to pay the penalty in its
entirety to the Commissioner at his office in Columbia within the period allowed,
the license or application stands revoked, suspended, or renewal refused, as the
case may be, upon expiration of the period and without any further
proceedings." Misdemeanor
SECTION 17. Section 38-43-160 of the 1976 Code is amended to read:
"Section 38-43-160. If any person unlawfully solicits, negotiates for
collects, or transmits a premium for a contract of insurance or acts in any way
in the negotiation or transaction of any insurance with an insurer not licensed
to do business in this State, he is guilty of a misdemeanor."
Misdemeanor
SECTION 18. Section 38-43-190 of the Code is amended to read:
"Section 38-43- 190. An insurance agent who acts for a person other than
himself in negotiating a contract of insurance is for the purpose of receiving
the premium the insurer's agent, whatever conditions or stipulations may be
contained in the policy or contract. Such agent knowingly procuring by fraudulent
representations payment, or the obligation for the payment, of a premium of
insurance is guilty of a misdemeanor."
Penalty
SECTION 19. Section 38-45-140 of the 1976 Code is amended to read:
"Section 38-45-140. When the Commissioner determines after investigation
that a broker has violated this title, he may, upon ten days' notice, impose the
penalties Provided in Section 38-2- 10."
Misdemeanor
SECTION 20. Section 38-45-150 of the 1976 Code is amended to read:
"Section 38-45-150. Any person violating this chapter is guilty of a
misdemeanor. Each risk written in violation of this chapter is considered a
separate offense."
Misdemeanor
SECTION 21. Section 38-47-60 of the 1976 Code is amended to read:
"Section 38-47-60. If any person acts as adjuster on a contract made
otherwise than as authorized by the laws of this State or by an insurer or other
person not regularly licensed to do business in the State or adjusts or aids in
the adjustment, either directly or indirectly, of a claim arising under a
contract of insurance not authorized by the laws of the State, he is guilty of
a misdemeanor."
Penalty
SECTION 22. Section 38-47-70 of the 1976 Code is amended to read:
"Section 38-47-70. When the Commissioner determines after investigation
that there has been a violation of this title by an adjuster, upon ten days'
notice, he may impose the penalties provided in Section 38-2-10."
Penalty
SECTION 23. Section 38-53-150(b) of the 1976 Code is amended to read:
"(b) The Commissioner, in lieu of revoking or suspending a license in
accordance with the provisions of this chapter, in any one proceeding, by order,
may require the licensee to pay to the Commissioner to be deposited in the
general fund of the State a monetary penalty as provided in Section 38-2-10(2)
for each offense. Upon failure of the licensee to pay the penalty within twenty
days after the mailing of the order, postage prepaid, registered, and addressed
to the last known place of business of the licensee, unless the order is stayed
by an order of a court of competent jurisdiction, the Commissioner may revoke the
license of the licensee or may suspend the license for a period as he
determines."
Misdemeanor
SECTION 24. Section 38-53-340 of the 1976 Code is amended to read:
"Section 38-53-340. Any person violating any of the provisions of this
chapter is guilty of a misdemeanor."
Penalty
SECTION 25. Section 38-55-40 of the 1976 Code is amended to read:
"Section 38-55-40. No insurer may issue in this State, nor permit its
agents, officers, and employees to issue in this State, agency company stock or
other stock or securities or any special or advisory bond or other contract of
any kind promising returns and profits, as an inducement to the taking of
insurance. No insurer is authorized to do business in this State which issues or
permits its agents, officers, or employees to issue in any state or territory
agency company stock or securities or any special or advisory bond or other
contract of any kind, promising returns and profits as an inducement to the
taking of insurance. No corporation or stock company, acting as agent of an
insurer, nor any of its agents, officers, and employees, is permitted to sell or
give, agree to sell or give, or offer to sell or give, directly or indirectly,
in any manner whatsoever, any share of stock, security, bond, or agreement of any
form or nature promising returns and profits as an inducement to the taking of
insurance or in connection therewith. The Commissioner, upon being satisfied that
any insurer or its agent has violated this section, shall impose the penalties
provided in Section 38-2-10. This section does not apply to marine insurers or
their agents if the agents write only marine insurance."
Penalty
SECTION 26. Section 38-55-60 of the 1976 Code is amended to read:
"Section 38-55-60. Every officer or agent of an insurer doing business in
this State who violates Section 38-55-50 is guilty of a misdemeanor. The
Commissioner, upon being satisfied that the insurer, its agent, or an insurance
broker has violated Section 38-55-50, shall impose the penalties provided in
Section 38-2-10. "
Misdemeanor
SECTION 27. Section 38-55-80 of the 1976 Code is amended to read:
"Section 38-55-80. An insurer doing business in this State may not make
a loan to any of its directors or officers, either directly or indirectly, in any
manner, except as provided in this section, and its director or officer may not
accept any loan, directly or indirectly. The insurer may not make an advance to
any of its directors or officers for future services to be performed beyond a
period of one year from the date of making the advance. Nothing contained in this
section prohibits a life insurer from making a policy loan upon its policy or
contract in an amount not exceeding the net reserve or cash value of the policy
or contract.
This section does not prohibit an insurer in connection with the relocation of
the place of employment of an officer, including any relocation in connection
with the initial employment of the officer, from (a) making, or the officer from
accepting, a mortgage loan to the officer on real property owned by the officer
which is to serve as his residence or
(b) acquiring, or the officer from selling to it, at not more than the fair
market value, the residence of the officer. Mortgage loans made or residences
acquired under this section are subject to the limitations imposed on investments
by Section 38- 11-50. In addition, this section does not prohibit an insurer from
making a loan to its directors or officers if the loan is first approved in
writing by the Commissioner.
An officer or director of an insurer who violates this section, either by
participating in making the loan or by the accepting of a loan except as
authorized in this section, is guilty of a misdemeanor.
Any loan made by an insurer to its officers, directors, or employees shall bear
the same rate of interest as is available to the public on loans from the
insurer."
Misdemeanor
SECTION 28. Section 38-55-340 of the 1976 Code is amended to read:
"Section 38-55-340. Any person violating this article is guilty of a
misdemeanor. Each violation of this article is a separate offense."
Penalty
SECTION 29. Section 38-57-200 of the 1976 Code is amended to read:
"Section 38-57-200. If, after a hearing, the Commissioner determines that
a method of competition or an act or practice is unfair or deceptive as defined
in this title and that the person complained of has engaged in the method of
competition, act, or practice in violation of this title, he shall reduce his
finding to writing and shall issue and cause to be served upon the person charged
with the violation:
(1) an order requiring the person to cease and desist from engaging in the
method of competition, act, or practice; and
(2) an order imposing penalties provided in Section 38-2-10."
Penalty
SECTION 30. Section 38-59-30 of the 1976 Code is amended to read:
"Section 38-59-30. If, after due notice and hearing, the Commissioner
determines that the insurer has engaged in any of the improper claim practices
defined in Section 38-59-20, he shall order the insurer to cease and desist from
the practice and may impose a penalty as provided in Section 38-2-10. If the
penalty is imposed, the penalty may not be considered a cost of the insurer for
purposes of determining whether or not the rates of the insurer warrant
adjustment." Misdemeanor
SECTION 31. Section 38-59-50 of the 1976 Code is amended to read:
"Section 38-59-50. Except as otherwise expressly provided in this title,
it is unlawful for an insurer to make payment or settlement of benefits arising
under life, endowment, accident, health, or hospitalization policies written by
the insurer in merchandise or services rendered or agreed to be rendered or to
issue a policy which provides for settlement in merchandise or services rendered
or to be rendered. An insurer violating this section shall pay a penalty of ten
times the amount of the policy, certificate, or other evidence of insurance to
be collected in a suit by the policyholder or his legal representatives or
beneficiary. An officer, agent, or servant of an insurer violating this section
is guilty of a misdemeanor."
Penalty
SECTION 32. Section 38-63-10 of the 1976 Code is amended to read:
"Section 38-63-10. No life insurer doing business in this State and no
officer, director, or agent of it may issue or circulate or cause or permit to
be issued or circulated any estimate, illustration, circular, or statement of any
sort misrepresenting the terms of any policy issued by it, the benefits or
advantages promised thereby, or the dividends or shares of surplus to be received
thereon or may use any name or title of any policy or class of policies
misrepresenting the true nature thereof. Violation of this section by an agent
or officer of an insurer is a misdemeanor. If an insurer violates or participates
in the violation of this section, the insurer is subject to the penalty
provisions of Section 38-2-10."
Misleading statements
SECTION 33. Section 38-63-20 of the 1976 Code is amended to read:
"Section 38-63-20. No insurer, or its employee or agent, may make any
misleading representations or incomplete or fraudulent comparisons of any life
insurance policies or insurers for the purpose of inducing, or which may tend to
induce, any person to lapse, forfeit, surrender, terminate, return, or convert
any life insurance policy."
Penalty
SECTION 34. Section 38-65-10 of the 1976 Code is amended to read:
"Section 38-65-10. No life insurer doing business in this State and no
officer, director, or agent of it may issue or circulate or cause or permit to
be issued or circulated any estimate, illustration, circular, or statement of any
sort misrepresenting the terms of any policy issued by it, the benefits or
advantages promised thereby, or the dividends or shares of surplus to be received
thereon or may use any name or title of any policy or class of policies
misrepresenting the true nature thereof. Violation of this section by an agent
or officer of an insurer is a misdemeanor. If an insurer violates or participates
in the violation of this section, the insurer is subject to the penalty
provisions of Section 38-2-10."
Misleading statements
SECTION 35. Section 38-65-20 of the 1976 Code is amended to read:
"Section 38-65-20. No insurer, or its employee or agent, may make any
misleading representations or incomplete or fraudulent comparisons of any life
insurance policies or insurers for the purpose of inducing, or which may tend to
induce, any person to lapse, forfeit, surrender, terminate, or return any life
insurance policy."
Penalty
SECTION 36. Section 38-69-10 of the 1976 Code is amended to read:
"Section 38-69- 10. No insurer doing business in this State and no
officer, director, or agent of it may issue or circulate or cause or permit to
be issued or circulated any estimate, illustration, circular, or statement of any
sort misrepresenting the terms of any annuity issued by it, the benefits or
advantages promised thereby, or the dividends or shares of surplus to be received
thereon or may use any name or title of any annuity or class of annuities
misrepresenting the true nature thereof. Violation of this section by an agent
or officer of an insurer is a misdemeanor. If an insurer violates or participates
in the violation of this section, the insurer is subject to the penalty
provisions of Section 38-2-10. "
Misleading statements
SECTION 37. Section 38-69-20 of the 1976 Code is amended to read:
"Section 38-69-20. No insurer, or its employee or agent, may make any
misleading representations or incomplete or fraudulent comparisons of any annuity
contracts or insurers for the purpose of inducing, or which may tend to induce,
any person to lapse, forfeit, surrender, terminate, return, or convert any
annuity."
Penalty
SECTION 38. Section 38-71 -go of the 1976 Code is amended to read:
"Section 38-71-90. An insurer or its officer or agent that issues or
delivers to any person in this State any policy in wilful violation of any of the
provisions of this chapter is subject to the provisions of Section 38-2-10 for
each offense."
Misleading statements
SECTION 39. Section 38-71-220 of the 1976 Code is amended to read:
"Section 38-71-220. No insurer, or its employee or agent, may make any
misleading representations or incomplete or fraudulent comparisons of any
disability insurance policies or insurers for the purpose of inducing, or which
may tend to induce, any person to lapse, forfeit, surrender, terminate, return,
or convert any disability insurance policy."
Penalty
SECTION 40. Section 38-73-80 of the 1976 Code is amended to read:
"Section 38-73-80. No person or organization may wilfully withhold
information from or knowingly give false or misleading information to the
Commissioner, any statistical agency designated by the Commissioner, any rating
organization, or any insurer which will affect the rates or premiums chargeable
under this chapter. A violation of this section subjects the one guilty of the
violation to the penalties provided in Chapter 2 of this title."
Repeal
SECTION 41. Sections 38-25-340, 38-25-350, 38-37-950, 38-37-960, 38-43-140,
38-43-150, 38-61-60, and 38-73-100 are repealed.
Time effective
SECTION 42. This act takes effect upon approval by the Governor. |