S*0157(Rat #0025, Act #0012 of 1983)  General Bill, By 
Senate Banking and Insurance

Similar(S 69, H 2203)
 A Bill to amend Section 38-39-70, Code of Laws of South Carolina, 1976,
 relating to the duties of members of the South Carolina Windstorm and Hail
 Underwriting Association and the limitation on liability, so as to delete the
 provision that no insurer shall be liable for loss arising out of any one
 catastrophe in an amount in excess of five percent of its surplus to
 policyholders, the provisions regarding the determination of this limitation
 for each insurer, and the provisions regarding determination of the initial
 limitation for a foreign insurer newly authorized to do business in the State;
 and to provide for deferral, in whole or in part, of an impaired member
 insurer's assessment by the Insurance Commission.-amended title.

   01/25/83  Senate Introduced, read first time, placed on calendar
                     without reference SJ-246
   01/26/83  Senate Read second time SJ-262
   01/27/83  Senate Read third time and sent to House SJ-284
   02/01/83  House  Introduced and read first time HJ-567
   02/01/83  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-567
   02/24/83  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-1170
   03/03/83  House  Debate adjourned until Tuesday, March 8, 1983 HJ-1319
   03/09/83  House  Amended HJ-1415
   03/09/83  House  Read second time HJ-1416
   03/10/83  House   Read third time HJ-1452
   03/10/83  House  Returned HJ-1452
   03/10/83  Senate Concurred in House amendment and enrolled SJ-680
   03/24/83         Ratified R 25
   03/25/83         Signed By Governor
   03/25/83         Effective date 03/25/83
   03/25/83         Act No. 12
   04/08/83         Copies available

AN ACT TO AMEND SECTION 38-39-70, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DUTIES OF MEMBERS OF THE SOUTH CAROLINA WINDSTORM AND HAIL UNDERWRITING ASSOCIATION AND THE LIMITATION ON LIABILITY, SO AS TO DELETE THE PROVISION THAT NO INSURER SHALL BE LIABLE FOR LOSS ARISING OUT OF ANY ONE CATASTROPHE IN AN AMOUNT IN EXCESS OF FIVE PERCENT OF ITS SURPLUS TO POLICYHOLDERS, THE PROVISIONS REGARDING THE DETERMINATION OF THIS LIMITATION FOR EACH INSURER, AND THE PROVISIONS REGARDING DETERMINATION OF THE INITIAL LIMITATION FOR A FOREIGN INSURER NEWLY AUTHORIZED TO DO BUSINESS IN THE STATE; AND TO PROVIDE FOR DEFERRAL, IN WHOLE OR IN PART, OF AN IMPAIRED MEMBER INSURER'S ASSESSMENT BY THE INSURANCE COMMISSION.

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

Duties of members of association

SECTION 1. Section 38-39-70 of the 1976 Code is amended to read:

"Section 38-39-70. All members of the Association shall participate in its writings, expenses, profits, and losses in the proportion that the net direct premium of such 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 Commission after review of annual statements, other reports, and other statistics which the Commission deems necessary to provide the information herein required and which the Commission is hereby authorized to obtain from any member of the Association.

Each member's participation in the Association shall be determined annually in the same manner as the initial determination. Any insurer authorized to write and engage in writing any insurance, the writing of which requires such insurer to be a member of the Association pursuant to the provisions of Section 38-39-30, who becomes authorized to engage in writing such insurance after June 17, 1971, shall become a member of the Association on January one immediately following such authorization and the determination of such insurer's participation in the Association shall be made as of the date of such membership in the same manner as for all other members of the Association. Member companies shall receive credit annually for essential property insurance voluntarily written in the coastal area as defined in Section 38-39-10, item (6) and their participation in the writings of the Association shall be reduced accordingly. The method of determination of such credit shall be as authorized by the board of directors.

The assessment of a member insurer may after hearing be ordered deferred in whole or in part upon application by the insurer if, in the opinion of the Commission, payment of the assessment would render the insurer insolvent or in danger of insolvency, or would otherwise leave the insurer in such condition 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 payment of an assessment against a member insurer is deferred by order of the Commission in whole or in part, the amount by which such 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 subsequent orders as may be necessary, the Commission must 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 semi-annually. Any profits, dividends, or other funds of the Association to which the insurer is otherwise entitled may not be distributed to the impaired insurer, but must be applied toward repayment of any assessment until the obligation has been satisfied. The Association shall distribute the repayments including any interest thereon to the other member companies on the basis at which assessments were made."

Time effective

SECTION 2. This act shall take effect upon approval by the Governor.