H*4137(Rat #0385, Act #0342 of 1992)  General Bill, By J.J. Bailey, 
R.S. Corning, J.T. McElveen, Quinn and Scott
 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.

   01/14/92  House  Introduced and read first time HJ-192
   01/14/92  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-193
   02/19/92  House  Committee report: Favorable Labor, Commerce and
                     Industry HJ-5
   02/20/92  House  Read second time HJ-18
   02/25/92  House  Read third time and sent to Senate HJ-17
   02/26/92  Senate Introduced and read first time SJ-6
   02/26/92  Senate Referred to Committee on Banking and Insurance
   03/26/92  Senate Committee report: Favorable Banking and Insurance SJ-18
   03/31/92  Senate Read second time SJ-46
   04/06/92  Senate Read third time and enrolled SJ-19
   04/28/92         Ratified R 385
   05/04/92         Signed By Governor
   05/04/92         Effective date 05/04/92
   05/04/92         Act No. 342
   05/26/92         Copies available

AN ACT 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:

Payments of assessments or interest by member companies to the Windstorm and Hail Underwriting Association; penalties

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."

Determination of participation in profits and losses; credit for essential property voluntarily written in the coastal area

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 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 required and which the department is authorized to obtain from 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. An insurer authorized to write and engage in writing insurance, the writing of which requires the insurer to be a member of the association pursuant to Section 38-75-330, 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 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 a condition so that further transaction of the insurer's business would be hazardous to its policyholders, creditors, members, subscribers, stockholders, or the public. 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 necessary subsequent orders, 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. Profits, dividends, or other funds of the association to which the insurer is otherwise entitled must not be distributed to the impaired insurer but must be applied toward repayment of an assessment until the obligation has been satisfied. The association shall distribute the repayments, including interest, to the other member insurers on the basis at which assessments were made."

Appeals

SECTION 3. Section 38-75-410 of the 1976 Code is amended to read:

"Section 38-75-410. (A) A person insured pursuant to this article or his representative or a member company who is aggrieved by an act, ruling, or decision of the association:

(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) Hearings held by the commissioner pursuant to this section must be in accordance with the procedures set forth in Chapter 3, Title 38 and Article 3, Chapter 23, Title 1, `Administrative Procedures'."

Time effective

SECTION 4. This act takes effect upon approval by the Governor.

Approved the 4th day of May, 1992.