S 1156 Session 109 (1991-1992)
S 1156 General Bill, By Saleeby, Land, McConnell, M.F. Mullinax and T.H. Pope
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
38-75-375 so as to provide for payments of assessments or interest by member
companies to the Windstorm and Hail Underwriting Association and for
penalties; to amend Section 38-75-370, relating to duties of association
members and limitation on liability, so as to authorize the Association to
rely on a member company's annual statement in determining participation in
profits and losses and provide requirements to receive credit for essential
property voluntarily written in the coastal area; and to amend Section
38-75-410, relating to appeals from acts, rulings, or decisions of the
Association, so as to provide for the time of appeals for certain acts.
01/15/92 Senate Introduced and read first time SJ-163
01/15/92 Senate Referred to Committee on Banking and Insurance SJ-16
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING SECTION 38-75-375 SO AS TO PROVIDE FOR
PAYMENTS OF ASSESSMENTS OR INTEREST BY MEMBER
COMPANIES TO THE WINDSTORM AND HAIL UNDERWRITING
ASSOCIATION AND FOR PENALTIES; TO AMEND SECTION
38-75-370, RELATING TO DUTIES OF ASSOCIATION MEMBERS
AND LIMITATION ON LIABILITY, SO AS TO AUTHORIZE THE
ASSOCIATION TO RELY ON A MEMBER COMPANY'S ANNUAL
STATEMENT IN DETERMINING PARTICIPATION IN PROFITS
AND LOSSES AND PROVIDE REQUIREMENTS TO RECEIVE
CREDIT FOR ESSENTIAL PROPERTY VOLUNTARILY WRITTEN
IN THE COASTAL AREA; AND TO AMEND SECTION 38-75-410,
RELATING TO APPEALS FROM ACTS, RULINGS, OR DECISIONS
OF THE ASSOCIATION, SO AS TO PROVIDE FOR THE TIME OF
APPEALS FOR CERTAIN ACTS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 38-75-375. (A) If a member company perceives an
assessment or interest levied by the association to be unjust or illegal,
the company shall pay the assessment or interest under protest in writing
within thirty days of the assessment or interest charge. Upon receiving
this payment, the association shall pay the money collected into the
association account and designate the money as having been paid under
protest.
(B) A member company paying an assessment or interest under
protest shall appeal to the association within thirty days after making the
payment. If it is determined in that appeal that the assessment or interest
was collected unjustly or illegally, the association shall refund the
assessment or interest to the payor.
(C) If a member company fails to pay an assessment or interest
within thirty days of the assessment or interest charge by the association,
the company is subject to disciplinary procedures pursuant to Section
38-5-120 or 38-5-130."
SECTION 2. Section 38-75-370 of the 1976 Code is amended to
read:
"Section 38-75-370. All members of the association shall
participate in its writings, expenses, profits, and losses in the proportion
that the net direct premium of such the member written
in this State during the preceding calendar year bears to the aggregate
net direct premiums written in this State by all members of the
association, as certified to the association by the department after review
of annual statements, other reports, and other statistics which the
department considers necessary to provide the information
herein required and which the department is hereby
authorized to obtain from any a member of the
association. After certification by the department, the association
may rely on the member company's annual statement in determining the
company's participation in profits and losses for each year.
Each member's participation in the association must be determined
annually in the same manner as the initial determination. Any
An insurer authorized to write and engage in writing
any insurance, the writing of which requires the insurer to be a
member of the association pursuant to the provisions of Section
38-75-330, shall become becomes a member of the
association on January first immediately following the authorization.
The determination of the insurer's participation in the association must
be made as of the date of the membership in the same manner as for all
other members of the association. Member insurers shall receive credit
annually for essential property insurance voluntarily written in the
coastal area and their participation in the writings of the association must
be reduced accordingly. The board of directors shall authorize the
method of determining the credit. In order to receive credit for
essential property voluntarily written in the coastal area, each member
company shall submit its requests by March thirty-first of the year for
which credit is sought.
The assessment of a member insurer may after hearing
may be ordered deferred in whole or in part upon application
by the insurer if, in the opinion of the commissioner, payment of the
assessment would render the insurer insolvent or in danger of insolvency
or would otherwise leave the insurer in such a condition
so that further transaction of the insurer's business would be
hazardous to its policyholders, creditors, members, subscribers,
stockholders, or the public. In the event that If payment
of an assessment against a member insurer is deferred by order of the
commissioner in whole or in part, the amount by which the assessment
is deferred must be assessed against other member insurers in the same
manner as provided in this section. In its order of deferral, or in
such necessary subsequent orders as may be
necessary, the commissioner shall prescribe a plan by which the
assessment so deferred must be repaid to the association by the impaired
insurer with interest at the six-month treasury bill rate adjusted
semiannually. Any Profits, dividends, or other funds of the
association to which the insurer is otherwise entitled may
must not be distributed to the impaired insurer but must be
applied toward repayment of any an assessment until
the obligation has been satisfied. The association shall distribute the
repayments, including any interest thereon, to the other
member insurers on the basis at which assessments were made."
SECTION 3. Section 38-75-410 of the 1976 Code is amended to
read:
"Section 38-75-410. (A) Any A
person insured pursuant to this article or his representative or any
affected insurer, a member company who may be
is aggrieved by an act, ruling, or decision of the association,
may, within thirty days after the ruling,:
(1) regarding rates, classification of risks, assessments,
voluntary credits, cancellation or termination of policies, or underwriting
shall appeal to the commissioner within sixty days after the act,
ruling, or decision;
(2) other than those specified in item (1), may appeal to the
commissioner within thirty days after the act, ruling, or decision.
(B) Any Hearings held by the commissioner
pursuant to the appeal this section must be in
accordance with the procedure procedures set forth in
Chapter 3, of Title 38 and Article 3, of
Chapter 23, of Title 1, (`Administrative
Procedures')."
SECTION 4. This act takes effect upon approval by the Governor.
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