H 3906 General Bill, By Fleming, Clyburn and Inabinett
 A BILL TO AMEND SECTION 56-9-20, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA,
 1976, RELATING TO MOTOR VEHICLE FINANCIAL RESPONSIBILITY ACT AND DEFINITIONS
 SO AS TO PROVIDE A DEFINITION FOR "UNINSURED MOTORIST FUND"; TO AMEND CHAPTER
 10, TITLE 56, RELATING TO MOTOR VEHICLE REGISTRATION AND FINANCIAL SECURITY,
 BY ADDING ARTICLE 5 SO AS TO PROVIDE FOR THE ESTABLISHMENT OF AN UNINSURED
 MOTORIST FUND.-SHORT TITLE

   04/10/97  House  Introduced and read first time HJ-63
   04/10/97  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-68

TO AMEND SECTION 56-9-20, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE MOTOR VEHICLE FINANCIAL RESPONSIBILITY ACT AND DEFINITIONS, SO AS TO PROVIDE A DEFINITION FOR "UNINSURED MOTORIST FUND"; TO AMEND CHAPTER 10, TITLE 56, RELATING TO MOTOR VEHICLE REGISTRATION AND FINANCIAL SECURITY, BY ADDING ARTICLE 5 SO AS TO PROVIDE FOR THE ESTABLISHMENT OF AN UNINSURED MOTORIST FUND; TO AMEND SECTION 38-73-470, AS AMENDED, RELATING TO PROPERTY, CASUALTY, AND INLAND MARINE INSURANCE, SURETY RATES, RATE-MAKING ORGANIZATIONS, AND DISPOSITION OF THE UNINSURED MOTORIST PREMIUM, SO AS TO, AMONG OTHER THINGS, PROVIDE THAT ONE DOLLAR OF THE YEARLY PREMIUM BE PLACED ON DEPOSIT WITH THE STATE TREASURER IN THE "UNINSURED ENFORCEMENT FUND"; TO AMEND SECTION 38-77-10, AS AMENDED, RELATING TO THE DECLARATION OF THE PURPOSE OF THE AUTOMOBILE INSURANCE LAW, SO AS TO DELETE CERTAIN PROVISIONS AND LANGUAGE, AND PROVIDE, AMONG OTHER THINGS, THAT ONE OF THE PURPOSES IS TO PROVIDE FOR AN ASSIGNED RISK PLAN KNOWN AS THE "SOUTH CAROLINA AUTOMOBILE INSURANCE PLAN" FOR CERTAIN PERSONS; BY ADDING SECTION 38-77-122 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT NO INSURER OR AGENT SHALL REFUSE TO ISSUE AN AUTOMOBILE INSURANCE POLICY AS DEFINED IN SECTION 38-77-30 BECAUSE OF THE APPLICANT'S AGE, SEX, LOCATION OF RESIDENCE IN SOUTH CAROLINA, RACE, COLOR, CREED, NATIONAL ORIGIN, ANCESTRY, MARITAL STATUS, INCOME LEVEL, PREVIOUS REFUSAL OF AUTOMOBILE INSURANCE BY ANOTHER INSURER, PRIOR PURCHASE OF INSURANCE THROUGH THE SOUTH CAROLINA AUTOMOBILE INSURANCE PLAN, OR LAWFUL OCCUPATION, INCLUDING MILITARY SERVICE; BY ADDING SECTION 38-77-123 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT NO INSURER SHALL REFUSE TO RENEW AN AUTOMOBILE INSURANCE POLICY BECAUSE OF CERTAIN SPECIFIED FACTORS AND THAT NOTHING IN THIS SECTION REQUIRES AN INSURER TO RENEW A POLICY OF AUTOMOBILE INSURANCE WHERE THE INSURED'S OCCUPATION HAS CHANGED SO AS TO MATERIALLY INCREASE THE RISK; BY ADDING SECTION 38-77-124 SO AS TO PROVIDE THAT NO INSURER OR AGENT SHALL REFUSE TO ISSUE OR FAIL TO RENEW A POLICY OF MOTOR VEHICLE LIABILITY INSURANCE SOLELY BECAUSE OF THE AGE OF THE MOTOR VEHICLE TO BE INSURED SO LONG AS THE MOTOR VEHICLE IS LICENSED; BY ADDING SECTION 38-77-151 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT ALL FUNDS COLLECTED BY THE DIRECTOR OF THE DEPARTMENT OF REVENUE UNDER CHAPTER 10, TITLE 56 MUST BE PLACED ON DEPOSIT WITH THE STATE TREASURER AND HELD IN A SPECIAL FUND TO BE KNOWN AS THE "UNINSURED MOTORISTS FUND" TO BE DISBURSED AS PROVIDED BY LAW; BY ADDING SECTION 38-77-154 SO AS TO PROVIDE THAT THE UNINSURED MOTORISTS FUND SHALL BE UNDER THE SUPERVISION AND CONTROL OF THE DEPARTMENT OF INSURANCE, REQUIRE PAYMENTS FROM THIS FUND TO BE MADE ON WARRANTS OF THE COMPTROLLER GENERAL ISSUED ON VOUCHERS SIGNED BY A PERSON DESIGNATED BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE, AND SET FORTH THE PURPOSE OF THE FUND; BY ADDING SECTION 38-77-155 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT THE DIRECTOR OF THE DEPARTMENT OF INSURANCE SHALL DISTRIBUTE MONIES ANNUALLY FROM THE UNINSURED MOTORISTS FUND AMONG THE SEVERAL INSURERS WRITING MOTOR VEHICLE BODILY INJURY AND PROPERTY DAMAGE LIABILITY INSURANCE ON MOTOR VEHICLES REGISTERED IN SOUTH CAROLINA; TO AMEND SECTION 38-77-530, AS AMENDED, RELATING TO THE PLAN OF OPERATION OF THE REINSURANCE FACILITY, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT THE PLAN MUST COMMENCE RECOUPMENT OF FACILITY ASSESSMENTS BY WAY OF A SURCHARGE ON PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE BUSINESS ISSUED BY A MEMBER OR THROUGH THE FACILITY, THAT THE SURCHARGE MUST BE A PERCENTAGE OF THE PREMIUM ADOPTED BY THE GOVERNING BOARD OF THE FACILITY, THAT THE CHARGES DETERMINED ON THE BASIS OF THE SURCHARGE MUST BE DISPLAYED AS A PART OF THE APPLICABLE PREMIUM CHARGES, AND THAT THE FACILITY SHALL CONVERT TO THE PERCENTAGE-OF-PREMIUM BASIS OF RECOUPMENT BY MARCH 1, 1998; TO AMEND CHAPTER 77, TITLE 38, RELATING TO AUTOMOBILE INSURANCE, BY ADDING ARTICLE 8 SO AS TO ENACT PROVISIONS OF LAW CONCERNING "ASSIGNMENT OF RISKS"; TO PROHIBIT PLACING AN INSURED IN THE SOUTH CAROLINA REINSURANCE FACILITY BASED ON, OR BECAUSE OF, CERTAIN CRITERIA SO LONG AS THE FACILITY REMAINS OPERATIONAL IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT; TO AMEND THE 1976 CODE BY ADDING SECTION 56-10-285 SO AS TO PROVIDE FOR THE ISSUANCE AND USE OF MOTOR VEHICLE STICKERS OR DECALS INDICATING THAT A VEHICLE IS AN INSURED VEHICLE, PROVIDE FOR THE PROMULGATION OF REGULATIONS, ESTABLISH A MISDEMEANOR OFFENSE AND PENALTIES, AND PROVIDE FOR RELATED MATTERS; TO REPEAL ARTICLE 5 CHAPTER 77, TITLE 38, RELATING TO THE SOUTH CAROLINA REINSURANCE FACILITY AND DESIGNATED PRODUCERS, EFFECTIVE JANUARY 1, 2005; AND TO REPEAL SECTION 38-73-450, RELATING TO THE FAIRNESS OF AUTOMOBILE INSURANCE RATES OR PREMIUM CHARGES AND BURDEN ON THE INSURER TO PROVE FAIRNESS, SECTION 38-73-455, RELATING TO AUTOMOBILE INSURANCE RATES, SECTION 38-73-457, RELATING TO THE REQUIREMENT UPON AUTOMOBILE INSURERS AND RATING ORGANIZATIONS TO FILE INFORMATION ON BASE RATES, SECTION 38-73-460, RELATING TO THE EFFECT OF GAINS AND LOSSES INCURRED BY MEMBER INSURERS OF THE REINSURANCE FACILITY ON RATES FOR AUTOMOBILE INSURANCE, SECTION 38-73-465, RELATING TO AUTOMOBILE INSURANCE AND UNFAIRLY DISCRIMINATORY, EXCESSIVE, OR UNREASONABLE PROFITS OR RATES, SECTION 38-73-720, RELATING TO INSURANCE, THE STATE RATING AND STATISTICAL DIVISION, AND THE POWER TO ESTABLISH RISK AND TERRITORIAL CLASSIFICATIONS, SECTION 38-73-730, RELATING TO INSURANCE, THE STATE RATING AND STATISTICAL DIVISION, AND RISK CLASSIFICATION PLANS, SECTION 38-73-731, RELATING TO INSURANCE, THE STATE RATING AND STATISTICAL DIVISION, REMOVAL FROM THE YOUTHFUL DRIVER CLASSIFICATION, AND REFUND OF EXCESS PREMIUM PAID, SECTION 38-73-735, RELATING TO INSURANCE, THE STATE RATING AND STATISTICAL DIVISION, AND THE PLAN FOR CREDITS AND DISCOUNTS, SECTION 38-73-750, RELATING TO THE REQUIREMENT THAT AUTOMOBILE INSURERS FILE WITH THE STATE RATING AND STATISTICAL DIVISION THEIR PLANS OR SYSTEMS FOR ALLOCATING EXPENSES AND PROFIT AS RESPECTS THE VARIOUS KINDS OR TYPES OF AUTOMOBILE INSURANCE RISKS AND THE CLASSES OF RISKS THEREUNDER, SECTION 38-73-760, RELATING TO INSURANCE, THE STATE-RATING AND STATISTICAL DIVISION, AND UNIFORM STATISTICAL PLANS, SECTION 38-73-770, RELATING TO INSURANCE AND THE REQUIREMENT THAT EVERY CLASSIFICATION PLAN PROMULGATED BY THE DEPARTMENT OF INSURANCE BE SO STRUCTURED AS TO PRODUCE RATES OR PREMIUM CHARGES WHICH ARE ADEQUATE, NOT EXCESSIVE, AND NOT UNFAIRLY DISCRIMINATORY, SECTION 38-73-775, RELATING TO THE ANNUAL FILING OF THE PHYSICAL DAMAGE LOSS COMPONENT BY THE SOUTH CAROLINA REINSURANCE FACILITY, SECTION 38-77-110, RELATING TO THE "MANDATE TO WRITE", AUTOMOBILE INSURANCE COVERAGE, THE REQUIREMENT UPON INSURERS TO INSURE, AND EXCEPTIONS, SECTION 38-77-111, RELATING TO AUTOMOBILE INSURANCE POLICIES WHICH MAY BE CEDED TO THE REINSURANCE FACILITY, SECTION 38-77-115, RELATING TO THE AUTOMOBILE INSURANCE LAW AND THE SIGNS REQUIRED IN AN AGENT'S PLACE OF BUSINESS, SECTION 38-77-145, RELATING TO THE AUTOMOBILE INSURANCE LAW AND THE PROVISION THAT PERSONAL INJURY PROTECTION COVERAGE IS NOT MANDATED, SECTION 38-77-285, RELATING TO THE REQUIREMENT THAT ALL AUTOMOBILE INSURANCE COVERAGES ARE TO BE IN ONE POLICY, SECTION 38-77-360, RELATING TO THE PROHIBITION AGAINST AN INCREASE IN AUTOMOBILE INSURANCE PREMIUMS AFTER CERTAIN FIRST-OFFENSE VIOLATIONS, SECTION 38-77-600, RELATING TO AUTOMOBILE INSURANCE AND THE REINSURANCE FACILITY RECOUPMENT CHARGE, SECTION 38-77-605, RELATING TO THE REQUIREMENT THAT THE REINSURANCE FACILITY RECOUPMENT CHARGE MUST BE DISPLAYED IN A CERTAIN MANNER IN INSURANCE PREMIUM NOTICES OR BILLS, SECTION 38-77-610, RELATING TO AUTOMOBILE INSURANCE AND THE FILING OF REINSURANCE FACILITY RECOUPMENT CHARGES, SECTION 38-77-620, RELATING TO AUTOMOBILE INSURANCE AND THE INCLUSION OF FACILITY RECOUPMENT CHARGES IN AUTOMOBILE INSURANCE RATES, SECTION 38-77-625, RELATING TO THE PROVISION THAT IF AN INSURED IS INVOLVED IN A MOTOR VEHICLE ACCIDENT WHERE HE IS NOT THE AT-FAULT DRIVER, HIS REINSURANCE FACILITY RECOUPMENT CHARGE MAY NOT BE INCREASED BY HIS INSURER BECAUSE OF THIS OCCURRENCE, AND ARTICLE 9, CHAPTER 77, TITLE 38, RELATING TO THE AUTOMOBILE INSURANCE LAW AND CERTAIN UNLAWFUL ACTS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 56-9-20 of the 1976 Code, as last amended by Act 459 of 1996, is further amended by adding the following appropriately-numbered item:

"( ) 'Uninsured Motorist Fund' means a fund established for fees collected by the Director of the Department of Revenue from registration of uninsured vehicles."

SECTION 2. Chapter 10 of Title 56 of the 1976 Code is amended by adding:

Section 56-10-510. In addition to any other fees prescribed by law, every person registering an uninsured motor vehicle, as defined in Section 56-9-20, at the time of registering or reregistering the uninsured vehicle, shall pay a fee of five hundred dollars. However, if the uninsured motor vehicle is being registered for a period of less than a full year, the uninsured motor vehicle fee must be prorated to conform to the registration period. Every person applying for registration of a motor vehicle and declaring it to be an insured motor vehicle, under the penalties set forth in Section 56-10-520, shall execute and furnish to the director his certificate that the motor vehicle is an insured motor vehicle as defined by the laws of this State, or that the director has issued to its owner, in accordance with Section 56-9-60, a certificate of self-insurance applicable to the vehicle sought to be registered. The director, or his designee, may require any registered owner of a motor vehicle declared to be insured or any applicant for registration of a motor vehicle to be an insured to submit a certificate of insurance on a form prescribed by the director. The director must forward the certificate of insurance or bond to the insurance company or surety company, whichever is applicable, for verification as to whether the policy or bond named in the certificate is currently in force. At that time, and not later than thirty days following receipt of the certificate of insurance, the insurance company or surety company must cause to be filed with the director a written notice if the policy or bond was not applicable as to the named insured. The director must prescribe the manner in which the written notice must be made. The refusal or neglect of any owner within thirty days to submit the certificate of insurance when required by the director or his designee or the notification by the insurance company or surety company that the policy or bond named in the certificate of insurance is not in effect, must require the director to suspend any driver's license and all registration certificates and license plates issued to the owner of the motor vehicle until the person:

(1) has paid to the Director of the Department of Revenue a fee of three hundred dollars to be disposed of as provided for in Sections 56-10-550 and 56-10-552 with respect to the motor vehicle determined to be uninsured; and

(2) furnishes proof of financial responsibility for the future in the manner prescribed in Section 56-10-10, et seq. of this chapter. An order of suspension required by this section is not effective until the director has offered the person an opportunity for an administrative hearing to show cause why the order should not be enforced. Notice of the opportunity for an administrative hearing may be included in the order of suspension. When three years have elapsed from the effective date of the suspension required in this section, the director may relieve the person of the requirement of furnishing proof of future financial responsibility. If the director determines that the fee applicable to the registration of an uninsured motor vehicle has been paid on the vehicle in question on or before the date that the insurance certificate was requested, no suspension action must be taken. The director shall suspend the driver's license and all registration certificates and license plates of any person on receiving a record of his conviction of a violation of any provisions of Section 56-10-520, but the director shall dispense with the suspension when the person is convicted for a violation of Section 56-10-520 and the department's records show conclusively that the motor vehicle was insured or that the fee applicable to the registration of an uninsured motor vehicle has been paid by the owner before the date and time of the alleged offense.

Section 56-10-520. A person who owns an uninsured motor vehicle:

(1) licensed in the State; or

(2) subject to registration in the State;

who operates or permits the operation of that motor vehicle without first having paid to the director the uninsured motor vehicle fee required by Section 56-10-510, to be disposed of as provided by Section 56-10-550, shall be guilty of a misdemeanor.

A person who is the operator of such an uninsured motor vehicle and not the titled owner, who knows that the required fee has not been paid to the director, shall be guilty of a misdemeanor.

The director or his designee, having reason to believe that a motor vehicle is being operated or has been operated on any specified date, may require the owner of such motor vehicle to submit the certificate of insurance provided for by Section 56-10-510. The refusal or neglect of the owner who has not, before the date of operation, paid the uninsured motor vehicle fee required by Section 56-10-510 as to such motor vehicle, to furnish such certificate must be prima facie evidence that the motor vehicle was an uninsured motor vehicle at the time of such operation. A person who presents or causes to be presented to the director a false certificate that a motor vehicle is an insured motor vehicle or false evidence that a motor vehicle sought to be registered is an insured motor vehicle, is guilty of a misdemeanor.

However, the foregoing portions of this section must not be applicable if it is established that the owner had good cause to believe and did believe that such motor vehicle was an insured motor vehicle, in which event the provisions of Section 56-10-245 must be applicable.

Abstracts of records of conviction, as defined in this title, of any violation of any of the provisions of this section must be forwarded to the director as prescribed by Section 56-9-330. The director shall suspend the driver's license and all registration certificates and license plates of any titled owner of an uninsured motor vehicle upon receiving a record of his conviction of a violation of any provisions of this section, and he shall not thereafter reissue the driver's license and the registration certificates and license plates issued in the name of such person until such person pays the fee applicable to the registration of an uninsured motor vehicle as prescribed in Section 56-10-510 and furnishes proof of future financial responsibility as prescribed by Section 56-10-520, et seq. of this chapter. However, when three years have elapsed from the date of the suspension herein required, the director may relieve such person of the requirement of furnishing proof of future financial responsibility. When such suspension results from a conviction for presenting or causing to be presented to the director a false certificate as to whether a motor vehicle is an insured motor vehicle or false evidence that any motor vehicle sought to be registered is insured, then the director shall not thereafter reissue the driver's license and the registration certificates and license plates issued in the name of such person so convicted for a period of one hundred eighty days from the date of such order of suspension, and only then when all other provisions of law have been complied with by such person. The director shall suspend the driver's license of any person who is the operator but not the titled owner of a motor vehicle upon receiving a record of his conviction of a violation of any provisions of this section and he shall not thereafter reissue the driver's license until thirty days from the date of such order of suspension.

Section 56-10-530. When it appears to the director from the records of his office that an uninsured motor vehicle as defined in Section 56-9-20, subject to registration in the State, is involved in a reportable accident in the State resulting in death, injury, or property damage with respect to which motor vehicle the owner thereof has not paid the uninsured motor vehicle fee as prescribed in Section 56-10-510, the director shall, in addition to enforcing the applicable provisions of Section 56-10-10, et seq. of this chapter, suspend such owner's driver's license and all of his license plates and registration certificates until such person has complied with those provisions of law and has paid to the Director of the Department of Revenue a reinstatement fee as provided by Section 56-10-510, to be disposed of as provided by Section 56-10-550, with respect to the motor vehicle involved in the accident and furnishes proof of future financial responsibility in the manner prescribed in Section 56-9-350, et seq.. However, no order of suspension required by this section must become effective until the director has offered the person an opportunity for an administrative hearing to show cause why the order should not be enforced. Notice of the opportunity for an administrative hearing may be included in the order of suspension. However, when three years have elapsed from the effective date of the suspension herein required, the director may relieve such person of the requirement of furnishing proof of future financial responsibility. The presentation by a person subject to the provisions of this section of a certificate of insurance, executed by an agent or representative of an insurance company qualified to do business in this State, showing that on the date and at the time of the accident the vehicle was an insured motor vehicle as herein defined or, presentation by such person of evidence that the additional fee applicable to the registration of an uninsured motor vehicle had been paid to the department before the date and time of the accident, must be sufficient bar to the suspension provided for in this section.

Section 56-10-535. The director, upon receiving notice that a titled owner of a motor vehicle has been convicted of one of the following violations: disobedience of any official traffic device, failure to stop for law enforcement officer when signaled, disobedience to any officer directing traffic, failure to stop for a school bus, leaving the scene of an accident where injury to person or damage to property results, theft or unlawful taking of a vehicle, racing on public highways, driving under the influence of intoxicating liquor or narcotic drugs or where injury to a person of over three hundred dollars per person or damage to property of the insured or other person of over seven hundred fifty dollars results, reckless driving where injury to a person of over three hundred dollars per person or damage to property of the insured or other person of over seven hundred fifty dollars results, homicide or assault arising out of the operation of a motor vehicle, any felony involving the use of a motor vehicle, the transporting of illegal whiskey or unlawful drugs or other controlled or narcotic substances, reckless homicide, wilful making of false statements in the application for license or registration, impersonating an applicant for license or registration, or procuring a license or registration through impersonation whether for himself or another; then shall require the owner to furnish proof of financial responsibility in the manner prescriber in Section 56-9-350, et seq.

However, when three years have elapsed from the effective date of any conviction for the above offenses, the director may relieve such person of the requirement of furnishing proof of future financial responsibility as required in Section 56-9-35, et seq.

Section 56-10-540. Whenever any proof of financial responsibility filed by any person as required by this chapter no longer fulfills the purpose for which required, the director shall require other proof of financial responsibility as required by this chapter and shall suspend such person's driver's license, registration, certificates, and license plates and decals pending the furnishing of proof as required.

A person whose driver's license or registration certificates, or license plates and decals have been suspended as provided in this chapter and have not been reinstated shall immediately return every such license, registration certificate, and set of license plates and decals held by him to the director. A person failing to comply with this requirement shall be guilty of a traffic infraction and, upon conviction, shall be punished as provided in Section 56-9-310, et seq.

Section 56-10-550. Except as provided in Section 56-10-552, funds collected by the Director of the Department of Revenue under the provisions of this chapter must be placed on deposit with the State Treasurer and held in a special fund to be known as the 'Uninsured Motorists Fund' to be disbursed as provided by law. The Director of the Department of Insurance as provided in Sections 38-77-151 and 38-77-154 may expend monies from such funds for the administration of Title 38.

Section 56-10-551. When any insurance policy certified under this chapter is canceled or terminated, the insurer shall report the fact to the director within fifteen days after the cancellation on a form prescribed by the director.

Section 56-10-552. (A) All funds collected as provided in Section 38-73-470 must be directed to the Director of the Department of Public Safety for the establishment and maintenance of a special fund, to be known as the 'Uninsured Enforcement Fund', to be used by the Department of Public Safety for the purpose of enforcement as required by this chapter.

(B) Fifty percent of the reinstatement fee as provided by Section 56-10-510(1) must be transferred by the Department of Revenue to the Department of Public Safety and recorded to the Uninsured Enforcement Fund to be used by the Department of Public Safety as provided by subsection (A) of this section. The remaining fifty percent of the reinstatement fee as provided by Section 56-10-510 must be retained in the Uninsured Motorist Fund to be used as provided in Sections 56-10-550, 38-77-151, and 38-77-154.

Section 56-10-553. (A) The Department of Public Safety shall collect data and maintain statistics on the total number of vehicles registered in the State as of June thirtieth of each year, the number of motorists who voluntarily paid the five hundred dollar fee at the time of registration during the fiscal year, the number of motorists who paid the penalty fee after being detected by the Department of Public Safety as being uninsured during the fiscal year, the number of certificates of insurance filed during the fiscal year, the net revenue collections for these fees by the fiscal year, the net funds available in the Uninsured Motorist Fund, and the net funds received from the Department of Insurance from the uninsured motorist fee during fiscal year.

(B) The Department of Public Safety shall implement programs designed to ensure full compliance with the financial responsibility laws. These programs must include random sampling of licensed drivers with moving violations requesting proof of insurance. Other programs may be added.

(C) The Department of Public Safety shall provide an annual report to the General Assembly containing the information required in subsections (A) and (B) of this section."

SECTION 3. Section 38-73-470 of the 1976 Code, as last amended by Section 783 of Act 181 of 1993, is further amended to read:

"Section 38-73-470. One dollar of the yearly premium for uninsured motorist coverage must be transferred is directed to be paid to the South Carolina Department of Public Safety to be placed on deposit with the State Treasurer in the 'Uninsured Enforcement Fund', payable on a quarterly basis, to provide funds for the costs of enforcing and administering the provisions of Article 3, Chapter 10, Title 56. Interest earned by the 'Uninsured Fund' must be retained by that fund."

SECTION 4. Section 38-77-10 of the 1976 Code, as last amended by Act 326 of 1996, 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 to provide:

(1) To provide that every automobile insurance risk which is insurable on the basis of the criteria established in this chapter is entitled to bodily injury liability and property damage liability 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 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 for automobile insurers in which all automobile insurers which provide bodily injury liability insurance, property damage liability insurance, or both, 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 bodily injury liability and property damage liability automobile insurance business in this State giving appropriate consideration to degrees of utilization of the facility by the several insurers of bodily injury liability and property damage liability automobile insurance and to provide prohibitions or penalties in respect to excessive utilization of the facility. for an assigned risk plan, known as the South Carolina Automobile Insurance Plan, for every person who is legally entitled to automobile insurance but has not been able to obtain a motor vehicle liability policy to apply to the Director of the Department of Insurance to have his risk assigned to an insurance carrier licensed to write and writing motor vehicle liability insurance in the State who shall issue a motor vehicle liability policy which will meet at least the minimum requirements for establishing financial responsibility in this chapter;

(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. of the coverages as provided in this chapter; and

(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 5. The 1976 Code is amended by adding:

"Section 38-77-122. (A) No insurer or agent shall refuse to issue an automobile insurance policy as defined in Section 38-77-30, or shall increase insurance rates or premiums, because of any one or more of the following factors: the age, sex, location of residence in this State, race, color, creed, national origin, ancestry, marital status, income level, previous refusal of automobile insurance by another insurer, prior purchase of insurance through the South Carolina Automobile Insurance Plan, or lawful occupation, including the military service, of the person seeking the coverage. Nor shall any insurer increase insurance rates or premiums because a person has received one citation for a moving violation or has been involved in one traffic accident during the three-year period. Nothing in this section prohibits any insurer from limiting the issuance of motor vehicle insurance policies to those who are residents of this State nor does this section prohibit any insurer from limiting the issuance of motor vehicle insurance policies only to persons engaging in or who have engaged in a particular profession or occupation, or who are members of a particular religious sect.

Nothing in this section prohibits any insurer from setting rates in accordance with relevant actuarial data.

(B) Any insurer or agent who violates this section shall be subject to the penalties as provided in Section 38-2-10. If the Director of the Department of Insurance or his designee finds that an insurer or agent is participating in a pattern of unfair discrimination, the director or his designee may impose a fine of up to two hundred thousand dollars. The director or his designee at any time may examine an insurer or agent to enforce this section.

Section 38-77-123. (A)(1) No insurer shall refuse to renew an automobile insurance policy because of any one or more of the following factors:

(a) age;

(b) sex;

(c) location of residence in this State;

(d) race;

(e) color;

(f) creed;

(g) national origin;

(h) ancestry;

(i) marital status;

(j) income level;

(k) lawful occupation, including the military service;

(l) lack of driving experience, or number of years of driving experience;

(m) lack of supporting business or lack of the potential for acquiring such business;

(n) one or more accidents or violations that occurred more than thirty-six months immediately preceding the upcoming anniversary date;

(o) one or more claims submitted under the uninsured motorists coverage of the policy where the uninsured motorist is known or there is physical evidence of contact;

(p) single claim by a single insured submitted under the medical payments coverage or medical expense coverage due to an accident for which the insured was neither wholly nor partially at fault;

(q) one or more claims submitted under the comprehensive or towing coverages. However, nothing in this section prohibits an insurer from modifying or refusing to renew the comprehensive or towing coverages at the time of renewal of the policy on the basis of one or more claims submitted by an insured under those coverages, provided that the insurer mails or delivers to the insured at the address shown in the policy written, notice of the change in coverage at least forty-five days before the renewal; or

(r) two or fewer motor vehicle accidents within a three-year period unless the accident was caused either wholly or partially by the named insured, a resident of the same household, or other customary operator.

(2) Nothing in this section requires an insurer to renew a policy for an insured where the insured's occupation has changed so as to materially increase the risk. Nothing contained in subsection (A)(1)(p), (q), and (r) of this subsection prohibits an insurer from refusing to renew a policy where a claim is false or fraudulent. Nothing in this section prohibits an insurer from setting rates in accordance with relevant actuarial data except that no insurer may set rates based in whole or in part on race, color, creed, national origin, ancestry, income level, or place of residence at any level smaller than a county.

(B) No insurer shall cancel a policy except for one or more of the following reasons:

(1) The named insured or any other operator who either resides in the same household or customarily operates a motor vehicle insured under the policy has had his driver's license suspended or revoked during the policy period or, if the policy is a renewal, during its policy period or the ninety days immediately preceding the last anniversary of the effective date.

(2) The named insured fails to pay the premium for the policy or any installment of the premium, whether payable to the insurer or its agent either directly or indirectly under any premium finance plan or extension of credit.

(C) There shall be no liability on the part of and no cause of action of any nature shall arise against the director or his designees; any insurer, its authorized representatives, its agents, or its employees; or any person furnishing to the insurer information as to reasons for cancellation or refusal to renew, for any statement made by any of them in complying with this section or for providing information pertaining to the cancellation or refusal to renew. For the purposes of this section, no insurer shall be required to furnish a notice of cancellation or refusal to renew to anyone other than the named insured, any person designated by the named insured, any other person to whom such notice is required to be given by the terms of the policy and the director.

(D) Within fifteen days of receipt of the notice of cancellation or refusal to renew, any insured or his attorney shall be entitled to request in writing to the director that he review the action of the insurer in canceling or refusing to renew the policy of the insured. Upon receipt of the request, the director shall promptly begin a review to determine whether the insurer's cancellation or refusal to renew complies with the requirements of this section and of Section 38-77-120 if the notice was sent by mail. The policy must remain in full force and effect during the pendency of the review by the director except where the cancellation or refusal to renew is for the reason set forth in subitem (2) of subsection (B) of this section, in which case the policy terminates as of the effective date stated in the notice. Where the director finds from the review that the cancellation or refusal to renew has not complied with the requirements of this section or of Section 38-77-120, he shall immediately notify the insurer, the insured, and any other person to whom such notice was required to be given by the terms of the policy that the cancellation or refusal to renew is not effective. Nothing in this section authorizes the director to substitute his judgment as to underwriting for that of the insurer.

(E) Each insurer shall maintain for at least three years, records of cancellation and refusal to renew and copies of every notice or statement referred to in Section 38-77-120 of this section that it sends to any of its insureds.

(F) The provisions of this section do not apply to any insurer that limits the issuance of policies of motor vehicle liability insurance to one class or group of persons engaged in any one particular profession, trade, occupation, or business. Nothing in this section requires an insurer to renew a policy of automobile insurance if the insured does not conform to the occupational or membership requirements of an insurer who limits its writings to an occupation or membership of an organization. No insurer is required to renew a policy if the insured becomes a nonresident of South Carolina.

(G) Any insurer who violates this section shall be subject to the penalties as provided in Section 38-2-10. If the Director of the Department of Insurance or his designee finds that an insurer, agent, or broker is participating in a pattern of unfair discrimination, the director or his designee may impose a fine of up to two hundred thousand dollars. The director or his designee at any time may examine an insurer, agent, or broker to enforce this section.

Section 38-77-124. No insurer or agent shall refuse to issue or fail to renew a policy of motor vehicle liability insurance solely because of the age of the motor vehicle to be insured, provided the motor vehicle is licensed.

Section 38-77-151. All funds collected by the Director of the Department of Revenue under the provisions of Chapter 10 of Title 56 must be placed on deposit with the State Treasurer and held in a special fund to be known as the 'Uninsured Motorists Fund' to be disbursed as provided by law. Interest earned by the 'Uninsured Motorists Fund' must be retained by that fund. The Director of the Department of Insurance, as provided in Sections 38-77-154 and 38-77-155, may expend such funds, for the administration of this chapter; provided, however, that the Department of Insurance shall retain ten percent of the Uninsured Motorists Fund to be used by the Department of Insurance to enforce the provisions of Title 38, including Sections 38-77-112, 38-77-122, and 38-77-123, to publish for consumers an automobile insurance buyer's guide, a brochure comparing automobile insurance premiums with a section comparing automobile insurance premiums, and to provide for a public awareness campaign.

Section 38-77-154. The Uninsured Motorists Fund shall be under the supervision and control of the Department of Insurance. Payments from the Uninsured Motorists Fund shall be made on warrants of the Comptroller General issued on vouchers signed by a person designated by the director. The purpose of the Uninsured Motorists Fund is to reduce the cost of the insurance required by Section 38-77-150 and to protect and educate consumers as provided by Section 38-77-151.

Section 38-77-155. The director shall distribute monies annually from the Uninsured Motorists Fund among the several insurers writing motor vehicle bodily injury and property damage liability insurance on motor vehicles registered in this State. Monies must be distributed in the proportion that each insurer's premium income for the basic uninsured motorists limits coverage bears to the total premium income for basic uninsured motorists limits coverage written in this State during the preceding year. Premium income must be gross premiums less cancellation and return premiums for coverage required by Section 38-77-150. Only insurers that maintain records satisfactory to the director shall receive any payment from the Uninsured Motorists Fund. Records must be considered satisfactory if they adequately disclose the loss experience for the coverage."

SECTION 6. Section 38-77-530 of the 1976 Code, as last amended by Section 818 of Act 181 of 1993, is further amended to read:

"Section 38-77-530. The plan of operation of the facility is subject to the approval of the director or his designee which may be granted only if the plan provides for equitable apportionment of the operating expenses and profits or losses among the members. The plan may, if the director or his designee considers it feasible and equitable, make provision for separate apportionments between private passenger automobile insurance business and commercial automobile insurance business, or, alternatively or in addition to that division, the plan may make provision for separate apportionments between automobile liability insurance business, including medical payments and uninsured motorist insurance, and automobile physical damage insurance business. Any such apportionments shall must give consideration to a comparison between the writings or car-year exposures of each insurer of automobile insurance and the total writings or car-year exposures of all automobile insurers or, in the case of any separate apportionments approved by the director or his designee, a comparison between the writings or car-year exposures of each insurer within the applicable category of automobile insurance and the writings or car-year exposures of all insurers within that category.

In connection with his approval of the plan, the director or his designee may require that the plan make provision for such comparisons for a one-year period or for a longer period not to exceed five years and may provide for weighing the experience so as to attach a greater weight to the more recent experience.

In connection with the approval of the plan's provisions respecting equitable apportionment of the operating expenses or gains or losses of the facility, the director or his designee may require that the plan make provision for a comparison between each insurer's percentage of the aggregate written premiums or car-year exposures respecting automobile insurance or any such category thereof and the insurer's percentage of total cessions to the facility of such insurance or category thereof so as to provide that the insurer's portion of the operating expenses or gains or losses must be the average of the two percentages; or the director or his designee may approve or require any other similar or comparable provision for the apportionment of the expenses or gains or losses of the facility which relates insurers' shares to their respective utilization of the facility.

The plan of operation, provided that insurers writing liability and physical damage coverages to include nonowners, must commence recoupment of facility assessments by way of a surcharge on private passenger and commercial automobile business issued by a member or through the facility. Such surcharge must be a percentage of the premium adopted by the governing board of the facility; and the charges determined on the basis of the surcharge must be displayed as a part of the applicable premium charges. The surcharge for recoupment must be shown as a separate charge.

(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 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 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 losses, plus the time value of money.

(4) The Reinsurance Facility shall convert to the percentage-of-premium basis of recoupment by March 1, 1998."

SECTION 7. Title 38, Chapter 77 of the 1976 Code is amended by adding:

Section 38-77-810. The director may promulgate reasonable standards for the assignment of risks to insurance carriers and servicing carriers, and an assigned risk plan must be established by March 1, 1998. More than one assigned risk plan may be established. The director may make reasonable regulations for the assignment of risks to insurance carriers. He shall establish rate classifications, rating schedules, rates, and regulations to be used by insurance carriers issuing assigned risk, policies of motor vehicle liability, physical damage, and underinsured and uninsured motorist insurance in accordance with this chapter as appear to it to be proper in the establishment of rate classifications, rating schedules, rates, and regulations, it shall be guided by the principles and practices which have been established under its statutory authority to regulate motor vehicle liability, physical damage, and medical payments insurance rates and it may act in conformity with its statutory discretionary authority in such matters.

The servicing carriers for the assigned risk plan may be competitively bid as provided for in this section. If the assigned risk plan is competitively bid, then the director or his designee shall appoint a committee or committees of individuals as he considers qualified to establish standards and procedures for the consideration and evaluation of bids. Insurers, or other vendors in conjunction with a licensed automobile insurer, may submit bids. The committee or committees shall evaluate and award contracts pursuant to the bidding process established by the committee or committees, subject to the final approval of the director or his designee. The director may require a bid fee to cover the expenses of implementing this section.

Section 38-77-820. Every person who has been unable to obtain a motor vehicle liability policy shall have the right to apply to the director to have his risk assigned to an insurance carrier licensed to write and writing motor vehicle liability insurance in the State and the insurance carrier, whether a stock or mutual company, reciprocal, or interinsurance exchange, or other type or form of insurance organization, as provided in this chapter shall issue a motor vehicle liability policy which will meet at least the minimum requirements for establishing financial responsibility as provided in this chapter, and in addition shall provide, at the option of the insured, reasonable motor vehicle physical damage and medical payments coverages, (both as defined in Chapter 77, Title 38) in the same policy. Every person who has otherwise obtained a motor vehicle liability insurance policy, or who has been afforded motor vehicle liability insurance under the laws of this State, but who was not afforded motor vehicle medical payments insurance or motor vehicle physical damage insurance in the same policy, or who was not afforded such coverages under the provisions of that section, shall have the right to apply to the director to have his risk assigned to an insurance carrier, as provided above, licensed to write and writing either or both coverages, and the insurance carrier shall issue a policy providing the coverage or coverages applied for.

Section 38-77-830. Insurance carriers may satisfy their assigned risk plan obligations by joining with other insurers to establish an Assigned Risk Pool whereby one or more insurers accepts the assignments of other insurers and in return, the other insurers agree to be responsible for any assessment necessary to pay losses associated with the servicing carrier's pool policies. These agreements are subject to approval by the director.

Section 38-77-840. The director may in its discretion, after reviewing all information pertaining to the applicant or policyholder available from its records, the records of the department, or from other sources:

(1) refuse to assign an application;

(2) approve the rejection of an application by an insurance carrier;

(3) approve the cancellation of a policy of motor vehicle liability, physical damage, and medical payments insurance by an insurance carrier; or

(4) refuse to approve the renewal or the reassignment of an expiring policy.

Section 38-77-850. Any information filed with the director by an insurance carrier in connection with an assigned risk must be confidential and solely for the information of the director and its staff and must not be disclosed to any person, including an applicant, policyholder, and any other insurance carrier.

Section 38-77-860. (A) The director is not required to disclose to any person, including the applicant or policyholder, its reasons for:

(1) refusing to assign an application;

(2) approving the rejection of an application by an insurance carrier;

(3) approving the cancellation of a policy of motor vehicle liability, physical damage, and medical payments insurance by an insurance carrier; or

(4) refusing to approve the renewal or the reassignment of an expiring policy.

(B) The director or anyone acting for him is not held liable for any act or omission in connection with the administration of the duties imposed upon it by the provisions of this chapter, except upon proof of actual malfeasance.

Section 38-77-870. The provisions of this chapter relevant to assignment of risks must be available to nonresidents who are unable to obtain a policy of motor vehicle liability, physical damage, and medical payments insurance with respect only to motor vehicles registered and used in the State.

Section 38-77-880. Notwithstanding any other provision of law, the provisions of this chapter relating to assignment of risks must be available to carriers by motor vehicle who are required by law to carry public liability and property damage insurance for the protection of the public."

SECTION 8. Notwithstanding any other provision of this act or other law of this State, so long as the South Carolina Reinsurance Facility remains operational, in accordance with the provisions of this act, no insured's policy of automobile insurance may be ceded to the facility because of (1) the insured's age, (2) the type of motor vehicle insured by the policy of insurance, or (3) the fact that the insured has been involved in one traffic accident or received one citation for a moving violation in a three-year period.

SECTION 9. The 1976 Code is amended by adding:

"Section 56-10-285. (A) The Department of Insurance shall issue motor vehicle stickers or decals which indicate that the vehicle for which such a sticker or decal has been issued is an insured vehicle in accordance with the laws of this State. Each sticker or decal must be issued to the insurer of the vehicle, and the insurer shall forward the sticker or decal to the owner of the vehicle. The owner shall affix the sticker or decal to the interior of the front windshield, driver's side. The sticker or decal shall clearly indicate the period of time, by beginning and ending dates, covered by the insurance policy for the particular vehicle. On the ending date shown on the sticker or decal, the sticker or decal must be removed by the owner and discarded. If the vehicle is transferred by the owner to another person while the insurance coverage is in effect, the sticker or decal must be removed and discarded by the transferor, and the new owner shall obtain a new sticker or decal in his own name to be affixed by him to the vehicle in accordance with the section.

(B) The Director of the Department of Insurance shall promulgate regulations for the administration of the provisions of this section.

(C) It is lawful to operate any motor vehicle which (1) does not have properly displayed the sticker or decal provided for in this section or (2) which displays an expired sticker or decal. A person who acts in violation of this subsection is guilty of a misdemeanor and, upon conviction, must be punished by a fine not to exceed five hundred dollars or by imprisonment not to exceed sixty days, or both.

(D) The penalties provided for in subsection (C) are in addition to, and not in lieu of, any other penalty whether criminal, civil, or administrative, provided by law for operating an uninsured motor vehicle."

SECTION 10. Article 5 of Chapter 77, Title 38 of the 1976 Code is repealed effective January 1, 2005.

SECTION 11. Sections 38-73-450, 38-73-455, 38-73-457, 38-73-460, 38-73-465, 38-73-720, 38-73-730, 38-73-731, 38-73-735, 38-73-750, 38-73-760, 38-73-770, 38-73-775, 38-77-110, 38-77-111, 38-77-115, 38-77-145, 38-77-285, 38-77-360, 38-77-600, 38-77-605, 38-77-610, 38-77-620, and 38-77-625 and Article 9 of Chapter 77 of Title 38 of the 1976 Code are repealed.

SECTION 12. Except as may be otherwise specifically provided in this act, this act takes effect July 1, 1998.