H 3428 General Bill, By J.G. Felder
 A Bill to amend Section 38-77-950, as amended, Code of Laws of South Carolina,
 1976, relating to unreasonable or excessive use of the South Carolina
 Reinsurance Facility by an automobile insurer and notice to a policy holder
 that his policy is in the Facility, so as to provide that a prima facie case
 of excessive or unreasonable utilization of the Facility is established upon a
 showing that an automobile insurer or a group of insurers under the same
 management has ceded or is about to cede more than twenty percent, rather than
 thirty-five percent, of total direct cedeable written premiums on South
 Carolina automobile insurance as reported in the most recently filed annual
 statement of the insurer or group.

   01/31/95  House  Introduced and read first time HJ-8
   01/31/95  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-8

A BILL

TO AMEND SECTION 38-77-950, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO UNREASONABLE OR EXCESSIVE USE OF THE SOUTH CAROLINA REINSURANCE FACILITY BY AN AUTOMOBILE INSURER AND NOTICE TO A POLICYHOLDER THAT HIS POLICY IS IN THE FACILITY, SO AS TO PROVIDE THAT A PRIMA FACIE CASE OF EXCESSIVE OR UNREASONABLE UTILIZATION OF THE FACILITY IS ESTABLISHED UPON A SHOWING THAT AN AUTOMOBILE INSURER OR A GROUP OF INSURERS UNDER THE SAME MANAGEMENT HAS CEDED OR IS ABOUT TO CEDE MORE THAN TWENTY PERCENT, RATHER THAN THIRTY-FIVE PERCENT, OF TOTAL DIRECT CEDEABLE WRITTEN PREMIUMS ON SOUTH CAROLINA AUTOMOBILE INSURANCE AS REPORTED IN THE MOST RECENTLY FILED ANNUAL STATEMENT OF THE INSURER OR GROUP.

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

SECTION 1. Section 38-77-950 of the 1976 Code, as last amended by Act 104 of 1993 and by Section 828 of Act 181 of 1993, is further amended to read:

"Section 38-77-950. It is the intent of this chapter that the facility must not be excessively nor unreasonably utilized by automobile insurers for unfairly competitive purposes or for purposes of unfairly discriminating against certain classes or types of automobile insurance risks having the same or similar objective risk characteristics as other risks in the same class under the rating plan for the classification of risks promulgated by the department, nor for the purpose of discriminating against the risks or risks in certain rating territories. The director or his designee shall prohibit unreasonable or excessive utilization of the facility. A prima facie case of excessive or unreasonable utilization is established upon a showing that an automobile insurance insurer or a group of insurers under the same management has ceded or is about to cede more than thirty-five twenty percent of total direct cedeable written premiums on South Carolina automobile insurance as reported in the most recently filed annual statement of the insurer or group. Upon the written request of the policyholder, insurance companies doing business in this State shall give written notice to the policyholder informing him whether or not he and a driver under the policy is in the facility. Insurers shall give written notice to the policyholder of a risk ceded to the facility which does not qualify for the safe driver discount in Section 38-73-760(e).

Total direct cedeable written premiums as used in this section do not include premiums attributable to risks ceded to the facility that do not qualify for the safe driver discount in Section 38-73-760(e) for twenty-four months following October 1, 1993."

SECTION 2. This act takes effect upon approval by the Governor.