H 4593 Session 111 (1995-1996)
H 4593 General Bill, By Meacham, Allison, Bailey, H. Brown, B.D. Cain, Cato,
C.D. Chamblee, Cooper, Davenport, R.C. Fulmer, Gamble, H.M. Hallman,
H.G. Hutson, M.F. Jaskwhich, Kelley, Lanford, Law, L.H. Limbaugh, Littlejohn,
C.V. Marchbanks, Phillips, Rice, Riser, Robinson, Seithel, Sharpe, Simrill,
Spearman, Stille, Stuart, Townsend, Tripp, Trotter, D.C. Waldrop, C.C. Wells,
Whatley, Wilder, Witherspoon, S.S. Wofford and Young-Brickell
A Bill to amend Title 38, Code of Laws of South Carolina, 1976, relating to
insurance, by adding Chapter 78 so as to enact the "Consumer Freedom of Choice
in Motor Vehicle Insurance Act".-short title
02/13/96 House Introduced and read first time HJ-14
02/13/96 House Referred to Committee on Labor, Commerce and
Industry HJ-19
A BILL
TO AMEND TITLE 38, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO INSURANCE, BY ADDING
CHAPTER 78 SO AS TO ENACT THE "CONSUMER
FREEDOM OF CHOICE IN MOTOR VEHICLE INSURANCE
ACT"; TO AMEND THE 1976 CODE BY ADDING
SECTION 38-73-775 SO AS TO REQUIRE THE SOUTH
CAROLINA REINSURANCE FACILITY ANNUALLY TO
DEVELOP AND FILE PHYSICAL DAMAGE LOSS
COMPONENTS FOR AUTOMOBILE INSURANCE
COVERAGES; TO AMEND SECTIONS 37-2-202 AND 37-3-202,
BOTH AS AMENDED, RELATING TO ADDITIONAL
CHARGES A CREDITOR AND CONSUMER LENDER,
RESPECTIVELY, MAY CHARGE, SO AS TO REQUIRE THAT
WHEN SINGLE INTEREST COLLISION COVERAGE IS
WRITTEN IN CONNECTION WITH THE PURCHASE OF A
MOTOR VEHICLE, NOTICE MUST BE GIVEN THAT THE
COVERAGE IS FOR THE BENEFIT OF THE CREDITOR AND
OF OTHER OPTIONS AVAILABLE TO THE BUYER; TO
AMEND SECTION 38-77-10, AS AMENDED, RELATING TO
THE PURPOSES OF THE AUTOMOBILE INSURANCE
CHAPTER, SO AS TO CLARIFY THAT THE PURPOSES
APPLY TO THE BODILY INJURY LIABILITY AND
PROPERTY DAMAGE LIABILITY AUTOMOBILE
INSURANCE; TO AMEND SECTION 38-77-30, AS AMENDED,
RELATING TO AUTOMOBILE INSURANCE AND
DEFINITIONS, SO AS TO FURTHER DEFINE
"AUTOMOBILE INSURANCE" AND ADD THE
DEFINITION OF "FACILITY PHYSICAL DAMAGE
RATE"; TO AMEND SECTION 38-77-110, AS AMENDED,
RELATING TO THE REQUIREMENT TO WRITE
AUTOMOBILE INSURANCE, SO AS TO CLARIFY THAT THIS
REQUIREMENT APPLIES TO BODILY INJURY LIABILITY
AND PROPERTY DAMAGE LIABILITY COVERAGES AND
ADD A PROVISION THAT NO INSURER IS REQUIRED TO
WRITE PRIVATE PASSENGER AUTOMOBILE INSURANCE
WITH HIGHER LIMITS OF COVERAGE THAN TWO
HUNDRED FIFTY THOUSAND DOLLARS FOR ADDED
PERSONAL PROTECTION COVERAGE AS DEFINED IN
SECTION 38-78-30; TO AMEND THE 1976 CODE BY ADDING
SECTION 38-77-355 SO AS TO ADD PROVISIONS
REGARDING "COLLATERAL SOURCES"; TO
AMEND SECTION 38-77-280, AS AMENDED, RELATING TO
COLLISION AND COMPREHENSIVE COVERAGES, SO AS TO
DELETE CERTAIN COVERAGE REQUIREMENTS, TO
ALLOW RATHER THAN REQUIRE INSURERS TO MAKE
AVAILABLE COLLISION COVERAGE AND
COMPREHENSIVE OR FIRE, THEFT, AND COMBINED
ADDITIONAL COVERAGE, TO AUTHORIZE CEDING
PHYSICAL DAMAGE INSURANCE COVERAGE TO THE
FACILITY, TO PROHIBIT DISCRIMINATION ON CERTAIN
GROUNDS IN DETERMINING RATES OR WHETHER TO
WRITE OR RENEW COVERAGE, AND TO PROVIDE
PENALTIES; TO AMEND SECTION 38-77-30, AS AMENDED,
RELATING TO AUTOMOBILE INSURANCE AND
DEFINITIONS, SO AS TO PROVIDE THAT
"DAMAGES" INCLUDE ACTUAL DAMAGES
ONLY; TO AMEND SECTION 38-77-140, RELATING TO
AUTOMOBILE INSURANCE AND BODILY INJURY AND
PROPERTY DAMAGE LIMITS, SO AS TO PROVIDE, AMONG
OTHER THINGS, THAT AN INSURER SHALL ALSO OFFER
THE INSURED A RIDER OR ENDORSEMENT FOR AN
ADDITIONAL PREMIUM TO COVER LIABILITY FOR
PUNITIVE DAMAGES; TO AMEND SECTION 38-77-150, AS
AMENDED, RELATING TO AUTOMOBILE INSURANCE, THE
UNINSURED MOTORIST PROVISION, AND THE DEFENSE
OF AN ACTION BY THE INSURER, SO AS TO DELETE
CERTAIN LANGUAGE AND PROVISIONS AND PROVIDE,
AMONG OTHER THINGS, THAT INSURERS SHALL OFFER,
AT THE OPTION OF THE INSURED, HIGHER LIMITS OF
UNINSURED MOTORIST COVERAGE IN ACCORDANCE
WITH SECTION 38-77-350 AND THAT INSURERS SHALL
OFFER ON A FORM PRESCRIBED BY THE DIRECTOR OF
THE DEPARTMENT OF INSURANCE NONSTACKABLE
POLICIES OF UNINSURED MOTORIST COVERAGE
CONTAINING CERTAIN POLICY PROVISIONS; TO AMEND
SECTION 38-77-160, AS AMENDED, RELATING TO
ADDITIONAL UNINSURED MOTORIST COVERAGE AND TO
UNDERINSURED MOTORIST COVERAGE, SO AS TO
DELETE CERTAIN LANGUAGE AND PROVISIONS AND
PROVIDE, AMONG OTHER THINGS, THAT AUTOMOBILE
INSURERS SHALL OFFER ON A FORM PRESCRIBED BY
THE DIRECTOR OF THE DEPARTMENT OF INSURANCE, AT
THE OPTION OF THE INSURED, IN ACCORDANCE WITH
SECTION 38-77-350 UNDERINSURED MOTORIST COVERAGE
UP TO THE LIMITS SELECTED FOR THE INSURED'S
LIABILITY COVERAGE TO PROVIDE COVERAGE IN THE
EVENT THE INSURED BECOMES LEGALLY ENTITLED TO
COLLECT DAMAGES FROM THE OWNER OR OPERATOR OF
AN UNDERINSURED MOTOR VEHICLE AND THAT AN
INSURED ENTITLED TO BENEFITS UNDER AN UNINSURED
MOTORIST PROVISION IS NOT ENTITLED TO BENEFITS
UNDER AN UNDERINSURED MOTORIST PROVISION; TO
AMEND SECTION 56-9-350, RELATING TO THE
VERIFICATION OF INSURANCE COVERAGE FORM TO BE
ISSUED FOLLOWING CERTAIN ACCIDENTS, THE EFFECT
OF FAILURE TO RETURN THE FORM, AND
UNINVESTIGATED ACCIDENTS, SO AS TO DELETE
CERTAIN PROVISIONS, AND PROVIDE THAT THE
OPERATOR OR OWNER OF A MOTOR VEHICLE INVOLVED
IN AN ACCIDENT RESULTING IN PROPERTY DAMAGE OF
FOUR HUNDRED DOLLARS OR MORE OR IN BODILY
INJURY OR DEATH WITHIN FIFTEEN DAYS AFTER THE
ACCIDENT SHALL FORWARD A WRITTEN REPORT OF THE
ACCIDENT TO THE DEPARTMENT OF PUBLIC SAFETY ON
A FORM PRESCRIBED BY THAT DEPARTMENT, THAT THE
REPORT MUST CONTAIN CERTAIN INFORMATION, AND
THAT FAILURE TO FILE THE REPORT, IN THE PROPER
VERIFIED MANNER, IS PRIMA FACIE EVIDENCE THAT THE
VEHICLE WAS NOT PROPERLY REGISTERED; TO AMEND
SECTION 38-77-110, AS AMENDED, RELATING TO
AUTOMOBILE INSURERS, THE REQUIREMENT UPON
INSURERS TO INSURE, AND EXCEPTIONS, SO AS TO
PROVIDE FURTHER REASONS WHICH CANNOT BE USED
BY AN INSURER, AGENT, OR BROKER REFUSING TO
WRITE OR RENEW SUCH COVERAGE, WITH PENALTIES,
AND PROVIDE THAT AN APPLICANT DENIED COVERAGE
MUST BE PROVIDED IN WRITING BY THE DENYING
INSURER THE REASON OR REASONS FOR WHICH THE
APPLICANT HAS BEEN REFUSED INSURANCE BY THAT
INSURER AT THE TIME OF THE DENIAL; TO AMEND TITLE
38, CHAPTER 77, RELATING TO AUTOMOBILE INSURANCE,
BY ADDING ARTICLE 13 SO AS TO PROVIDE FOR A JOINT
UNDERWRITING ASSOCIATION AND PROVIDE, AMONG
OTHER THINGS, FOR THE ABOLISHMENT OF THE
REINSURANCE FACILITY; TO AMEND SECTION 38-73-455,
AS AMENDED, RELATING TO AUTOMOBILE INSURANCE
RATES, SO AS TO DELETE CERTAIN LANGUAGE AND
PROVISIONS, AND PROVIDE, AMONG OTHER THINGS,
THAT AN AUTOMOBILE INSURER SHALL OFFER FOUR,
RATHER THAN TWO, DIFFERENT RATES FOR
AUTOMOBILE INSURANCE, THAT INSURERS MUST FILE
RATES FOR PERSONAL PROTECTION POLICIES AS
DEFINED BY SECTION 38-78-30 AND REVISED RATES FOR
ALL OTHER PRIVATE PASSENGER AUTOMOBILE
INSURANCE POLICIES WRITTEN BY THEM, INCLUDING A
"PREFERRED" RATE, A "STANDARD"
RATE, A "NONPREFERRED" RATE, AND A
"SUBSTANDARD" RATE, AND THAT MEMBER
COMPANIES OF AN AFFILIATED GROUP OF AUTOMOBILE
INSURERS MAY UTILIZE DIFFERENT FILED RATES FOR
AUTOMOBILE INSURANCE COVERAGES; TO AMEND
SECTION 56-10-270, RELATING TO THE OPERATION OF AN
UNINSURED MOTOR VEHICLE AND PENALTIES, SO AS TO
CHANGE THE PENALTIES, INCLUDING PROVISIONS FOR,
AMONG OTHER THINGS, THE PERFORMANCE OF
VARYING AMOUNTS OF PUBIC SERVICE; TO AMEND THE
1976 CODE BY ADDING SECTION 38-77-116 SO AS TO
PROVIDE THAT UPON ISSUANCE OF A NEW PRIVATE
PASSENGER AUTOMOBILE INSURANCE POLICY, THE
INSURANCE COMPANY OR AGENT MUST REVIEW WITH
THE NEW APPLICANT A LIST OF DRIVING OFFENSES AND
THE RELATED FINE AND PUNISHMENT, AS WELL AS
POSSIBLE INCREASE IN RATES, EFFECT OF SURCHARGES,
OR THE EFFECT OF THE LOSS OF THE SAFE DRIVER
DISCOUNT, AND PROVIDE THAT THIS LIST MUST BE ON
AN APPROVED FORM AND MUST ACCOMPANY THE
POLICY; TO PROVIDE THAT THE GOVERNING BOARD OF
THE JOINT UNDERWRITING ASSOCIATION SHALL
CONTRACT WITH ONE OR MORE INSURERS OR BUSINESS
ENTITIES TO SERVE AS THE DESIGNATED CARRIER AND
SHALL ESTABLISH A PROCEDURE FOR THE SELECTION
OF THE DESIGNATED CARRIER, PROVIDE THAT
COMMISSIONS PAID TO AGENTS FOR POLICIES CEDED TO
OR PLACED IN THE JOINT UNDERWRITING ASSOCIATION
MUST BE SET BY THE ASSOCIATION'S BOARD OF
DIRECTORS, AND PROVIDE FOR RELATED MATTERS; TO
AMEND SECTION 38-77-920, AS AMENDED, RELATING TO
DUTIES AND RIGHTS OF INSURERS AND AGENTS, SO AS
TO CLARIFY THAT AUTOMOBILE INSURANCE REFERS TO
BODILY INJURY LIABILITY AND PROPERTY DAMAGE
LIABILITY; TO AMEND SECTION 56-10-270, RELATING TO
THE OPERATION OF AN UNINSURED MOTOR VEHICLE, SO
AS TO CHANGE THE PENALTIES THEREFOR; TO AMEND
SECTION 38-77-111, RELATING TO AUTOMOBILE
INSURANCE POLICIES WHICH MAY BE CEDED TO THE
REINSURANCE FACILITY, SO AS TO PROVIDE THAT AN
INSURER MAY CEDE THE COVERAGES OF AN
AUTOMOBILE INSURANCE POLICY THAT IT IS
MANDATED TO WRITE TO THE JOINT UNDERWRITING
ASSOCIATION, RATHER THAN THE REINSURANCE
FACILITY, BUT IT MAY NOT CEDE COVERAGES UNDER A
POLICY THAT IT IS NOT MANDATED BY LAW TO WRITE
EXCEPT FOR TORT LIABILITY AND PERSONAL
PROTECTION COVERAGES AND UNINSURED MOTORIST
COVERAGE FOR THOSE RISKS THAT DO NOT QUALIFY
FOR THE SAFE DRIVER DISCOUNT; TO REPEAL ARTICLE
5, CHAPTER 77, TITLE 38, RELATING TO THE SOUTH
CAROLINA REINSURANCE FACILITY AND DESIGNATED
PRODUCERS; TO REPEAL SECTIONS 38-73-1420, RELATING
TO THE FILING OF AN EXPENSE COMPONENT FOR
PRIVATE PASSENGER AUTOMOBILE INSURANCE RATE OR
PREMIUM CHARGES BY THE BOARD OF GOVERNORS OF
THE REINSURANCE FACILITY, 38-73-1425, RELATING TO
THE FINAL RATE OR PREMIUM CHARGE FOR PRIVATE
PASSENGER AUTOMOBILE INSURANCE RISK CEDED TO
THE REINSURANCE FACILITY, 38-77-285, RELATING TO
THE REQUIREMENT THAT ALL AUTOMOBILE INSURANCE
COVERAGES WRITTEN BY AN INSURER FOR AN
INSURED'S AUTOMOBILE MUST BE WRITTEN IN THE
SAME POLICY AND THE PROVISION THAT THIS SECTION
APPLIES ONLY TO INSURANCE POLICIES COVERING
VEHICLES ELIGIBLE TO BE CEDED TO THE REINSURANCE
FACILITY, 38-77-920, RELATING TO THE PROVISION THAT
AUTOMOBILE INSURERS AND AGENTS MAY NOT REFUSE
ACCEPTANCE OF INSURANCE, THE PROPERTY RIGHTS OF
CERTAIN AGENTS, AND RESTRICTION OF MAILINGS TO
CERTAIN AREAS, 38-77-940, RELATING TO AUTOMOBILE
INSURANCE, AVOIDING CERTAIN CLASSES OR TYPES OF
RISKS, EXCEPTIONS, AND CANCELING AN AGENT'S
REPRESENTATION, 38-77-950, RELATING TO
UNREASONABLE OR EXCESSIVE USE OF THE
REINSURANCE FACILITY BY AN INSURER AND NOTICE TO
A POLICYHOLDER THAT HIS POLICY IS IN THE FACILITY,
AND 38-77-960, RELATING TO AUTOMOBILE INSURANCE
AGENT'S BUSINESS; TO PROVIDE FOR THE SEVERABILITY
OF THE PROVISIONS OF THIS ACT, EXCEPT THAT IF
SECTION 38-78-110 OR SECTION 38-78-120 IS FOUND
UNCONSTITUTIONAL OR INVALID IT IS TO BE
CONCLUSIVELY PRESUMED THAT THE GENERAL
ASSEMBLY WOULD NOT HAVE ENACTED THE
REMAINDER OF THIS ACT WITHOUT SUCH LIMITATIONS
AND THE ENTIRE ACT IS INVALID; AND TO PROVIDE
THAT IF SECTION 38-78-110 IS FOUND TO BE
UNCONSTITUTIONAL OR INVALID, PERSONAL
PROTECTION INSURERS HAVE NO OBLIGATION TO PAY
PERSONAL PROTECTION BENEFITS WITH RESPECT TO
ACCIDENTS OCCURRING ON OR AFTER THE DATE OF THE
FINDING OF SUCH UNCONSTITUTIONALITY OR
INVALIDITY AND ARE SUBROGATED TO ALL OF THE
RIGHTS OF PERSONAL PROTECTION INSUREDS FOR ALL
PREVIOUS SUCH BENEFITS PAID.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Title 38 of the 1976 Code is amended by adding:
"CHAPTER 78
Consumer Freedom of Choice in
Motor Vehicle Insurance
Section 38-78-10. This chapter may be cited as the `Consumer
Freedom of Choice in Motor Vehicle Insurance Act'.
Section 38-78-20. (A) Under existing law, the ability of a
person to recover losses incurred as a result of a motor vehicle
accident is limited by factors over which the accident victim has no
control. The recovery is dependent on the conduct of the other
driver, the amount of liability insurance carried by the other driver,
and the financial resources of the other driver. Two individuals
who have received identical injuries may recover markedly different
amounts. Under existing law, many individuals receive little or no
compensation for their losses.
(B) This chapter gives motorists the right to choose the kinds of
personal protection available in case of an automobile accident and
the amount of financial protection they deem appropriate and
affordable. Instead of being forced to buy traditional fault liability
insurance to protect strangers, motorists will have the opportunity to
buy a new personal protection policy to protect themselves and their
family members regardless of fault in the event of a motor vehicle
accident. Motorists will also have the right to reject the provisions
of this chapter, and thus retain all rights to sue and be sued for both
economic and noneconomic loss based on fault, under the existing
fault liability insurance system.
(C) The interaction between traditional fault liability insurance
and the personal protection policy is as follows:
(1) Motorists who choose the traditional fault liability
insurance and who are involved in an accident with any other
motorist essentially will retain the system existing now where they
have the opportunity to claim and sue based on fault for both
economic and noneconomic damages. They will also remain
subject to being sued for such liability to others based on fault.
(2) Motorists who choose the new personal protection policy
system established by this chapter and who are involved in an
accident with a motorist who has chosen traditional fault liability
insurance will be promptly compensated for their own economic
losses regardless of fault. A personal protection insured can claim
against and sue the other motorist, based on fault, for economic
damages if the damages exceed their personal protection limits and
for noneconomic damages if their injury exceeds the verbal
threshold. They will also remain in this circumstance subject to
being sued for such liability to others based on fault.
(3) Two motorists who each choose the personal protection
policy and who are involved in an accident with each other will be
promptly compensated under their own policies for their own
economic losses regardless of fault. In this situation, the two
motorists who have chosen the personal protection policy do not
have the right to claim and sue for full damages based on fault
unless the injury exceeds the verbal threshold but if either suffers a
loss in excess of his or her policy's benefit levels, that person
retains the right to claim and sue for uncompensated economic loss
based on fault.
(4) If a motorist who has chosen fault liability insurance is
involved in an accident with an uninsured motorist, the policyholder
can be compensated for losses under the uninsured motorist
provisions of his or her own policy based on fault and has the right
to claim against and sue the uninsured motorist for full damages
based on fault. The uninsured motorist forfeits any right to claim
for property damage up to ten thousand dollars and for
noneconomic loss against the motorist who has chosen fault liability
insurance, except where the motorist choosing fault liability
insurance was driving under the influence of alcohol or illegal drugs
or committed intentional misconduct.
(5) If a motorist who has chosen the personal protection
policy is involved in an accident with an uninsured motorist, the
policyholder will be promptly compensated for economic losses
under his or her personal protection policy regardless of fault and
has the right to claim against and sue the uninsured motorist for
noneconomic damages based on fault if the injury exceeds the
verbal threshold. The uninsured motorist forfeits any right to claim
for the first ten thousand dollars of property damage and for
noneconomic loss against the motorist who has chosen the personal
protection policy, except where such motorist was driving under the
influence of alcohol or illegal drugs or committed intentional
misconduct.
(D) The initial rate to be charged by each automobile insurer for
the basic personal protection policy required by this act shall be at
least fifteen percent lower than the approved rate for the minimum
limits prescribed by Sections 38-77-140 and 38-77-150 by class and
territory for each automobile insurance risk in effect on September
30, 1996. The rate for the basic personal protection policy cannot
be increased for automobile insurance policies issued or renewed
with effective dates between October 1, 1996, through September
30, 1997.
(E) A motorist who purchases the personal protection policy will
have five thousand dollars of property damage liability insurance as
part of his mandatory coverage.
(F) To the extent the terms of Section 38-78-20 may differ from
the terms of Section 38-78-30, the terms of Section 38-78-30
govern.
Section 38-78-30. As used in this chapter, unless the context
otherwise requires:
(A) `Accidental bodily injury' means bodily injury, sickness, or
disease, or death resulting therefrom, arising out of the ownership,
operation, or use of a motor vehicle, or while occupying such
vehicle, which is accidental as to the person insured.
(B) `Added personal protection' means an optional policy, plan,
or coverage for personal protection which each insurer issuing
motor vehicle liability insurance in this State shall make available in
the limits set by Section 38-77-110(B)(5).
(C) `Basic personal protection' means a policy, plan, or
coverage for personal protection which provides benefits for net
loss resulting from accidental bodily injury resulting from a motor
vehicle accident and liability coverage in at least the amounts
prescribed by Section 38-77-140. Basic personal protection benefits
consist of the following, with an aggregate limit of fifteen thousand
dollars per person arising out of one motor vehicle accident:
(1) medical expenses;
(2) loss of income from work, up to two hundred dollars per
week;
(3) replacement services loss, up to one hundred dollars per
week;
(4) death benefits of five thousand dollars if the death of the
injured person occurs within one year after the date of a motor
vehicle accident and was a direct result of the accident.
Each basic personal protection insurer is permitted to incorporate
in added personal protection benefits coverage such terms,
conditions, and exclusions as may be consistent with the premiums
charged.
Motorcycles may not be covered by a personal protection policy.
(D) `Cause of action for injury' means a claim for accidental
bodily injury for economic or noneconomic loss, or both, caused by
the negligent conduct or intentional misconduct of another person,
and includes a claim by any person other than a person suffering
accidental bodily injury based on such injury including, but not
limited to, loss of consortium, companionship, or any derivative
claim.
(E) `Director' means the Director of the Department of
Insurance or his designee.
(F) `Dependent' means all persons related to another person by
blood, marriage, adoption, or otherwise who reside in the same
household at the time of the accidental bodily injury and receive
financial services or support for him or her.
(G) `Economic loss' means actual pecuniary loss and actual
monetary expenses incurred by or on behalf of an injured person as
the result of an accidental bodily injury consisting only of medical
expense, work loss, replacement services loss, and death benefits.
(H) `Governmental unit' means the United States government,
the government of the State of South Carolina, and any agency,
authority, board, department, division, commission, institution,
bureau, or like governmental entity of either such government, or
any local government in this State, and such units thereof including,
but not limited to, counties, cities, towns, and other regional
governments.
(I) `Injured person' means a person who sustains accidental
bodily injury when eligible for benefits under a policy providing
personal protection. The term also includes, where appropriate, the
personal representative of an estate.
(J) `Intentional misconduct' means conduct whereby harm is
intentionally caused or attempted to be caused by one who acts or
fails to act for the purpose of causing harm or with knowledge that
harm is substantially certain to follow when such conduct caused or
substantially contributed to the harm claimed for. A person does
not intentionally cause or attempt to cause harm
(1) merely because his or her act or failure to act is done with
the realization that it creates a grave risk of causing harm or
(2) if the act or omission causing bodily harm is for the
purpose of averting bodily harm to oneself or another person.
(K) `Loss of income from work' means eighty percent loss of
gross income from the work the injured person would have
continued to perform if he or she had not been injured, reduced by
any income from substitute work actually performed by him or her
or by income he or she would have earned in available appropriate
substitute work he or she was capable of performing but
unreasonably failed to undertake. In order to be eligible for these
benefits, the injured person must have been in an occupational
status, earning or producing income, immediately prior to the
accident. Loss of income from work does not include any loss after
the death of the injured person, and payment for the period of
disability shall not exceed two years from the date of the accident.
Loss of income from work may be excluded from an insured's
policy, at the policyholder's request, with an appropriate reduction
in the premium.
(L) `Medical expenses' means usual and customary amounts
incurred by an injured person for necessary medical, surgical,
radiological, dental, chiropractic, ambulance, hospital, medical
rehabilitation and professional nursing services, eyeglasses, hearing
aids, and prosthetic devices. Medical expense may include
nonmedical remedial treatment rendered in accordance with a
recognized religious method of healing. The words `incurred by'
include medical expenses incurred on behalf of an injured person by
a parent or guardian if the injured person is a minor or incompetent,
or by a surviving spouse if the injured person is deceased. Personal
protection insurers may review medical expenses to assure that the
expenses are reasonable and necessary according to generally
accepted standards of medical practice. Under basic personal
protection and added personal protection, medical expenses are
promptly payable to the injured person for covered expenses
incurred within two years after the date of the accident. `Medical
expenses' do not include:
(1) that portion of a charge for a room in a hospital, clinic, or
convalescent or nursing home, or any other institution engaged in
providing nursing care and related services, in excess of a
reasonable and customary charge for semi-private accommodations,
unless medically required; or
(2) treatments, services, products, or procedures that are
experimental in nature, or for research, or not primarily designed to
serve a medical purpose, or which are not commonly and
customarily recognized throughout the medical profession and
within the United States as appropriate treatment of the accidental
bodily injury, or which are not performed by a professional licensed
by the professional's licensing board pursuant to Title 40.
(M) `Medical rehabilitation' means rehabilitation services which
are reasonable and necessary to reduce the disability and help to
restore the pre-accident level of physical functioning of the injured
person.
(N) `Motor vehicle' is defined by Section 38-77-30(7).
(O) `Noneconomic loss' means any loss other than economic
loss and includes, but is not necessarily limited to, pain, suffering,
inconvenience, physical impairment, mental anguish, emotional pain
and suffering, hedonic damages, and loss of any of the following:
earning capacity, consortium, society, companionship, comfort,
protection, marital care, parental care, filial care, attention, advice,
counsel, training, guidance, or education. Noneconomic loss does
not include economic loss caused by pain and suffering or by
physical impairment.
(P) `Occupying' means to be in or upon a motor vehicle or
engaged in the immediate act of entering into or alighting from the
motor vehicle.
(Q) `Operation or use' means operation or use of a motor
vehicle as a motor vehicle including, incident to its operation or use
as a vehicle, occupying it. Operation or use of a motor vehicle
does not cover conduct within the course of a business of
manufacturing, selling, or maintaining a motor vehicle, including
repairing, servicing, washing, loading, or unloading, nor does it
include such conduct not within the course of such a business,
unless such conduct occurs while occupying a motor vehicle.
(R) `Owner' means the person or persons, other than a
lienholder or secured party, who owns or has title to a motor
vehicle or is entitled to the use and possession of a motor vehicle
subject to a security interest held by another person. Owner does
not include (i) a lessee under a lease not intended as security, or (ii)
the United States of America or any agency thereof, except with
respect to motor vehicles for which it has elected to provide
insurance.
(S) `Person' includes an organization, public or private.
(T) `Personal protection' means a policy, plan, or coverage
which provides basic or added personal protection benefits for loss
resulting from accidental bodily injury, regardless of fault.
(U) `Personal protection insured' means:
(1) a person identified by name as an insured in a contract
providing personal protection benefits;
(2) while residing in the same household with a named
insured, the following persons:
(a) a spouse or other relative of a named insured; or
(b) a minor in the custody of a named insured. A person
resides in the same household if he or she usually makes his or her
home in the same family unit, even though he or she temporarily
lives elsewhere;
(3) a person with respect to accidents within this State who
sustains accidental bodily injury while occupying or when struck as
a pedestrian by a motor vehicle insured for personal protection,
unless the person has rejected the coverage under Section
38-78-120.
(V) `Personal protection insurer' means an automobile insurer
providing personal protection benefits.
(W) `Replacement services loss' means expenses reasonably
incurred in obtaining ordinary and necessary services from others,
not members of the injured person's household, in lieu of those the
injured person would have performed for the benefit of the
household. Replacement services loss does not include any loss
incurred after the death of an injured person, and the disability
period shall not exceed two years from the date of the accident.
(X) `Resident relative' means a person related to the owner of a
motor vehicle by blood, marriage, adoption, or otherwise and
residing in the same household. A person resides in the same
household if he or she usually makes his or her home in the same
family unit, even though temporarily living elsewhere.
(Y) `Serious injury' means an accidental bodily injury which
results in death, serious and permanent loss of an important bodily
function, permanent and serious bodily injury determined
objectively within reasonable medical probability, or serious and
permanent disfigurement.
(Z) `Uncompensated economic loss' means that portion of
economic loss arising out of an accidental bodily injury of an
injured person which exceeds the benefits provided by a personal
protection insurer under a policy providing such benefits (except for
loss incurred by a deductible under such a policy) and collateral
sources.
(aa) `Uninsured motorist' means the owner or operator of a
motor vehicle uninsured for either basic personal protection or
liability insurance at the limits prescribed by this state's financial
responsibility laws or who otherwise fails to comply with the
financial responsibility laws of this State.
(bb) `Uninsured motor vehicle' means a motor vehicle required
to be registered as to which (i) there is no bodily injury liability
insurance and property damage liability insurance, (ii) no bond has
been given or cash or securities delivered in lieu thereof, (iii) the
owner has not qualified as a self-insurer, and (iv) there is no basic
or added personal protection insurance as defined in Section
38-78-30.
(cc) `Reasonable and necessary' means usual and customary
charges for necessary medical treatment.
(dd) `Permanent' means an injury whose effects cannot be
eliminated by further time for recovery or by further treatment and
care, including surgery.
(ee) `Prevailing party' means the insured deemed to be the
`prevailing party' for purposes of this section if the award is at least
the amount requested in writing of the insurer not less than ten days
prior to the trial. The insurer shall be deemed to be the prevailing
party if the award is no more than the amount offered by the
insurer in writing not less than ten days prior to the trial. There
shall be `no prevailing party' if the award is more than offered by
the insurer, but less than requested by the insured.
(ff) `Reasonable proof' means itemized medical bills or other
medical records necessary to determine specific patient information,
dates of treatment, a specific diagnosis, the specific services
rendered and the specific charges for each of the services rendered.
If an insurer requests information in addition to the proof
submitted, they must specifically identify the additional information
needed and why it is needed.
(gg) `Serious' means only an injury which has a substantial
bearing on the injured person's ability to resume substantially all of
his normal activities and lifestyle.
Section 38-78-40. Each motor vehicle required to be registered
in this State shall be insured for basic personal protection as defined
by Section 38-78-30(C) and security for payment of tort liabilities
as required by Section 38-77-140, unless the owner of the motor
vehicle exercises his or her right of rejection under Section
38-78-120. This insurance may be provided by a contract of
insurance or by qualifying as a self-insurer in compliance with
Section 56-9-60. An insurance policy written by a personal
protection insurer under this chapter to provide basic personal
protection is deemed to include all coverages required by this
chapter, including the minimum tort liability coverage. Coverage
under basic personal protection meets the requirements of this
state's financial responsibility laws.
Section 38-78-50. Every personal protection insured must be
offered uninsured motorist coverage as required by Section
38-77-150. Additional uninsured motorist coverage and
underinsured motorist coverage must be offered to the insured as
required by Section 38-77-160. All other provisions, rights, and
obligations in Sections 38-77-150 and 38-77-160 apply to the
personal protection insured and the insurer. A personal protection
insured may not recover under the uninsured motorist provision of
the personal protection policy if the personal protection insured was
at fault in the accident. Noneconomic damages may only be
recovered under this provision if the threshold as defined in Section
38-78-110 is reached.
Section 38-78-55. Regardless of the number of motor vehicles
involved, policies issued, persons covered, claims made, or
premiums paid, the liability limits for multiple coverages under one
or more automobile insurance policies must not be combined or
added together to determine the maximum limit of coverage
available to an injured person. Unless the insurance policy or
contract clearly provides otherwise, the policy or contract may
provide that if two or more policies, plans, or coverages apply
equally to the same accident, the highest limit of liability applicable
is the maximum amount available to an injured person under any
one of the policies, plans, or coverages.
Section 38-78-60. (A) A personal protection insurer shall pay
to a personal protection insured benefits for accidental bodily injury
sustained within the United States, its territories, or possessions or
Canada.
(B) A personal protection policy issued in this State contains
coverage such that it satisfies the liability insurance requirements of
the financial responsibility laws of any other state or Canadian
province in which the insured motor vehicle is operated.
Section 38-78-70. (A) A personal protection insurer has no
obligation to provide benefits to or on behalf of an injured person
who at the time of the accident:
(1) was involved in a motor vehicle accident while
committing a felony or while voluntarily occupying a motor vehicle
that he or she knew to be stolen. If the person dies as a result of
his or her own intentional misconduct, his or her survivors are not
entitled to personal protection for loss arising from the decedent's
injury or death;
(2) was driving under the influence of alcohol or illegal
drugs;
(3) was occupying an uninsured motor vehicle owned by the
person;
(4) was guilty of intentional misconduct. If the person dies
as a result of his or her own intentional misconduct, his or her
survivors are not entitled to personal protection for loss arising
from the decedent's injury or death;
(5) has rejected the limitation on his or her right to sue under
Section 38-78-120;
(6) was an uninsured motorist;
(7) was operating or occupying a motor vehicle with three or
fewer load-bearing wheels;
(8) was operating an insured vehicle without the express or
implied consent of the owner; or
(9) was injured while occupying a motor vehicle owned by,
or furnished or available for the regular use of the injured person or
the injured person's resident spouse or relative, if such motor
vehicle is not described in the policy under which a claim is made,
or is not a newly acquired or replacement motor vehicle covered
under the terms of the policy.
(B) A personal protection insurer may include in personal
protection coverage any person under subsection (A) if the insurer
states its intent to do so clearly on the policy.
Section 38-78-80. At the option of the personal protection
insurer, personal protection benefits are payable to any of the
following persons:
(1) the injured person;
(2) the parent or guardian of the injured person, if the injured
person is a minor or incompetent;
(3) a survivor, executor, or administrator of the injured person;
or
(4) any other person or organization rendering the services for
which payment is due.
Section 38-78-90. (A) Subject to Section 38-78-80, a person
who is entitled to receive personal protection benefits may claim the
benefits in the following order up to the limits of personal
protection in the listed category:
(1) personal protection covering the motor vehicle involved in
the accident, if the person injured was an occupant of or was struck
by the motor vehicle. If the personal protection insurer providing
such insurance disclaims coverage, the injured person shall be
entitled to benefits under any contract of personal protection
insurance under which he is a personal protection insured and the
insurer making such payments shall be entitled to contest the
disclaimer and seek full reimbursement from the insurer disclaiming
coverage;
(2) the personal protection under which the injured person is
or was an insured.
(B) If two or more insurers at the same priority level are
obligated to pay personal injury benefits, the insurer against whom
the claim is first made shall pay the claim and may thereafter,
recover pro rata contributions from any other insurer at the same
priority level for the cost of the payments and for processing the
claim. Disputes among insurers may be resolved only by
inter-company arbitration or inter-company agreement. For
purposes of this section, an unoccupied parked motor vehicle is not
a motor vehicle involved in an accident unless it is parked in such a
way as to cause an unreasonable risk of injury.
Section 38-78-100. (A) A personal protection insurer is
obligated to indemnify an injured person, except that benefits
payable for the same accidental bodily injury under state-mandated
disability coverage or workers' compensation or similar
occupational compensation act shall be subtracted from the personal
protection benefits payable to the injured person.
(B) A basic personal protection insurer must offer a deductible
to the named insured of a personal protection policy in the amounts
of two hundred fifty dollars, five hundred dollars, and one thousand
dollars to apply with respect to a claim by the named insured or a
person residing in the same household with the named insured. If
the named insured accepts such offer, the rate must be reduced for
such coverage in an amount filed by the insurer and approved by
the director. The named insured is not required to accept the offer
and may choose personal protection coverage without a deductible
other than for property damage caused by an uninsured motorist.
Section 38-78-110. (A) Any person who registers, operates,
maintains, or uses a motor vehicle on the public roadways of this
State and their resident relatives shall, as a condition of such
registration, operation, maintenance, or use of such motor vehicle
and use of the public roadways shall be conclusively presumed to
have accepted the limitations on his tort rights and liabilities in this
chapter unless he has filed a rejection under Section 38-78-120.
(B) Tort liability with respect to accidents occurring in this State
and arising out of the ownership, maintenance, or use of a motor
vehicle is abolished with respect to any person entitled to benefits
pursuant to Section 38-78-30(C) except to the extent such person
has sustained an injury as defined in subsection (C) of this section
or except to the extent such person has sustained actual economic
loss in excess of the limits of any applicable personal protection
policy. However, no person may recover noneconomic loss for
personal injury except as provided in subsection (C).
(C) In any action of tort brought against the owner, registrant,
operator, or occupant of a motor vehicle with respect to which
security has been provided as required in this chapter, or against
any person or organization legally responsible for his acts or
omissions, a plaintiff may recover damages in tort for pain,
suffering, mental anguish, and inconvenience because of bodily
injury, sickness, or disease arising out of the ownership,
maintenance, operation, or use of such motor vehicle only in the
event that the injury reaches one of the following thresholds:
(1) the injury or disease consists in whole or in part of
permanent and serious disfigurement;
(2) permanent and serious bodily injury, determined
objectively, within reasonable medical probability;
(3) permanent and serious loss of an important bodily
function; or
(4) death.
(D) In any action where the defendant contends that the
plaintiff's injury does not meet the standards set forth in subsection
(C), either party may seek summary judgment on that issue. If a
motion is made, the court may determine at least thirty days before
the date set for trial whether there is a material issue of fact as to
whether the injury meets the standards of subsection (C) or if not,
render summary judgment in accordance with the undisputed facts.
If the facts regarding the nature of the injury are undisputed, the
question as to whether or not the facts render the injury as meeting
the standards of subsection (C) is a question of law to be decided
by the court. In any action to be tried before a jury where the
defendant contends the plaintiff's injury is not a serious and
permanent injury but the defendant concedes or the court
determines that there is a material issue of fact as to whether the
plaintiff's injury meets the standards of subsection (C) then, upon
motion of the defendant, that issue shall be separately tried and no
other evidence as to plaintiff's noneconomic loss shall be received
until that issue has been resolved. After resolution of that issue, the
amount of the plaintiff's noneconomic loss may be tried before the
same jury or a different jury, as the court may in its discretion
decide.
Section 38-78-120. (A) Any person may refuse to consent to the
limitations on his tort rights and liabilities. To ensure preservation
of the right to choose to reject any limitations on tort rights and
liability contained in this chapter, any person may execute a form
approved by the director for rejecting such limitations. Within sixty
days after the enactment of this chapter, a temporary committee
composed of the director, the Consumer Advocate, two
representatives of the South Carolina Bar, (one specializing in the
defense of claims and one specializing in the prosecution of claims)
appointed by the Governor, a representative of an automobile
insurer appointed by the Consumer Advocate, a member of the
judiciary appointed by the Chief Justice of the Supreme Court, an
insurance agent appointed by the director, and one person
specializing in readability appointed by the Governor shall
formulate the rejection form to be used by all insurers in South
Carolina. The rejection forms for personal protection insurance
shall meet the readability index of no higher than the ninth grade
level on the Flesch Reading Ease Test. The committee shall also
develop a brochure at no higher than the ninth grade level that must
be enclosed with the policyholder's renewal notice the first time the
policy is renewed after the effective date of this chapter.
(B) The form shall establish the effective date of such a
rejection. Any rejection by a person who is under a legal disability
shall be made on behalf of such person by a parent, legal guardian,
conservator, or committee and shall remain in effect until revoked
or until the person is no longer under legal disability, whichever is
sooner. The failure of such guardian, parent, conservator, or
committee of a person under a legal disability to file a rejection,
within six months from the date that this chapter would otherwise
become applicable to such person, is deemed to be an affirmative
acceptance of the limitations on tort liability. Any person who at
the time of an accident does not have basic personal protection but
has not formally rejected such limitations and has in effect security
equivalent to that required by Section 38-77-140 is deemed to have
fully rejected the tort limitations for that accident only.
(C) A rejection of tort limitations must be immediately filed
with the insurance company or agent who provides the insurance
policy and is effective on the effective date of the policy. The
rejection applies to any motor vehicle accident occurring on or after
that date. The rejection remains effective until it is revoked in
writing on a form approved by the director at the time of renewal
or issuance of a new policy by the purchase of a tort policy. The
revocation of the rejection is effective until it is withdrawn in a
manner prescribed by the director. The rejection form must be
provided by the insurer or agent to the insured upon the written
request of the insured or the request of a person with the legal
capacity to ask for the insured.
(D) The director shall establish and maintain a program designed
to assure that all consumers are adequately informed about the
comparative cost of personal protection insurance and liability
insurance for those persons who choose to reject limitations on tort
rights and liabilities, as well as the benefits, rights, and
responsibilities of insureds under each type of insurance.
(E) A person who has personal protection coverage or who
rejects tort limitations on a form approved by the director is bound
by that choice and is precluded from claiming liability of any party
based on being inadequately informed as to the coverage or
rejection. This restriction also applies to relatives residing in the
same household who are covered by the same policy.
(F) Each motor vehicle insurer issuing motor vehicle liability
insurance in this State may require that all policies within a
household be either personal protection policies or liability policies
which satisfy the financial responsibility laws of this State.
However, policies purchased separately by members of the same
household may be different policies.
(G) To further insure preservation of the right to reject the
limitations on tort rights contained in this chapter, the director shall
establish procedures whereby any person who does not own a motor
vehicle and who is not a resident relative of such an owner may,
after sustaining accidental bodily injury, execute a form prescribed
by the director for rejecting such limitation within sixty days after
the date of the accident. If any personal protection benefits are paid
before the rejection is effective, the personal protection insurer has
a right of subrogation for any payments made through a tort
recovery.
Section 38-78-125. (A) A person may bring a cause of action
for injury against a person who caused him actual economic loss,
for any uncompensated economic loss.
(B) A person suffering accidental bodily injury while occupying
or when struck by a motor vehicle which is insured for personal
protection and who is not at the time of the accident covered by a
rejection of limitations on tort rights and liabilities under Section
38-78-120 and is not an uninsured motorist may receive personal
protection benefits applicable to the motor vehicle and has a right to
claim uncompensated economic loss against the personal protection
insured. A person who files a claim under this subsection has the
same rights and duties as a personal protection insured with respect
to a claim by that insured.
(C) An uninsured injured motorist may not claim in tort for
property damage except for such damage that exceeds ten thousand
dollars or for noneconomic damages, unless the motor vehicle
operator is driving under the influence of alcohol or illegal drugs or
is guilty of intentional misconduct. An uninsured motorist retains
fault liability with respect to others. A person driving under the
influence of alcohol or illegal drugs may not claim in tort for either
economic or noneconomic damages against a person who has
rejected tort limitations. A person who rejects tort limitations shall
not collect personal protection benefits unless he or she has revoked
his or her rejection under Section 38-78-120(C).
(D) A personal protection insured has a cause of action against
another personal protection insured for property damage to recover
any required deductible.
Section 38-78-140. (A) Personal protection benefits are payable
monthly as loss accrues. Loss accrues not when the injury occurs
but as work loss, replacement services loss, or medical expense is
incurred. The benefits are overdue if they are not paid within thirty
days after the personal protection insurer receives reasonable proof
of the fact and the amount of loss sustained, except that a personal
protection insurer may accumulate claims for a period not to exceed
thirty days, in which case benefits are not overdue if they are paid
within twenty days after the period of accumulation. If reasonable
proof is not supplied for the whole claim, the amount supported by
reasonable proof is overdue if it is not paid within thirty days after
the proof is received by the insurer. Any part or all of the
remainder of the claim that is later supported by reasonable proof is
overdue if it is not paid within thirty days after the proof is
received by the insurer. To determine the extent to which any
benefits are overdue, a payment is treated as made on the date a
draft or other valid instrument is mailed or, if not so posted, the
date of delivery. The personal protection insurer may pay personal
protection benefits directly to a person who supplies necessary
products, services, or accommodations to the injured person. All
overdue payments shall bear an annual eighteen percent interest
rate.
(B) In addition to the interest payments, if the insured has filed
suit to recover overdue payments, the insured shall be entitled to
reasonable attorney's fees and costs incurred in such suit. The
recovery set forth here is the exclusive remedy for an insurer's
failure to pay or delay in paying personal protection benefits for
conduct of an insurer arising out of the manner in which the insurer
denied or delayed payment. An attorney shall not charge a separate
fee to collect benefits except those incurred in connection with the
suit for overdue payments. In any action by or on behalf of an
insurer, a provider or an insured, attorney's fees shall be awarded
only to the prevailing party.
(C) An insurer who rejects a claim for basic personal protection
benefits shall give to the claimant prompt written notice of the
rejection, specifying the reason.
Section 38-78-150. (A) Personal protection benefits except
medical benefits are exempt from garnishment, attachment,
execution, or any other process or claim to the extent that wages or
earnings are exempt under any applicable law.
(B) An agreement for assignment of any right to personal
protection benefits payable in the future, except for medical
benefits, is unenforceable except to the extent that the benefits are
for the cost of products, services, or accommodations provided or to
be provided by the assignee or that the benefits are for loss of
income from work or replacement services and are assigned to
secure payment of alimony, maintenance, or child support.
Section 38-78-160. An insurer is allowed a reasonable attorney
fee for defending a claim for benefits that is fraudulent or so
excessive as to have no reasonable foundation. The fee may be
treated as an offset against benefits due or which thereafter accrue.
The insurer may recover from the claimant any part of the fee not
offset or otherwise paid.
Section 38-78-170. An insurer under a policy of personal
protection insurance may require written notice to be given as soon
as practicable after an accident involving a secured vehicle for
which it provides coverage.
Section 38-78-190. If no personal protection benefits have been
paid other than death benefits, a person may bring an action against
the personal protection insurer not later than two years after the
accidental bodily injury occurred. If personal protection benefits
have been paid, a person may bring an action to recover further
benefits not later than two years after the last payment of benefits
or four years after the date the accidental bodily injury occurred,
whichever is earlier.
Section 38-78-200. (A) If the mental or physical condition of an
injured person is material to any claim for past or future personal
protection benefits, the injured person shall submit to reasonable
mental or physical examinations by a physician or physicians
designated by the insurer, at the insurer's expense. The
examinations shall take place at a reasonably convenient time and
location. A personal protection insurer may include provisions of
this nature in a personal protection policy.
(B) If after a request by a personal protection insurer a person
refuses to submit to reasonable mental and physical examinations by
a physician or physicians designated by the insurer or refuses to
undergo mental or rehabilitation services payable by the insurer, the
insurer, on written notice, may deny benefits applicable to the
period during which the person refuses to submit to the
examination.
Section 38-78-210. (A) On request by a claimant or personal
protection insurer, an employer shall provide information on a form
approved by the director, including the work records and earnings,
regarding an employee who has filed a claim for personal protection
benefits. On request of the claimant or insurer the information
must cover the period specified by the claimant or insurer making
the request and may include a reasonable period before, and the
entire period after, the injury.
(B) The claimant, upon request by the insurer, must provide to
the insurer the names and addresses of the physicians and medical
facilities rendering diagnosis or treatment in regard to the injury or
to a relevant injury and the claimant shall authorize the insurer to
inspect and copy any relevant medical records.
(C) Every physician or other health care provider including, but
not limited to, a hospital, clinic, or other medical institution
providing, before or after an injury resulting from a motor vehicle
accident upon which a claim for personal protection benefits is
based, any products, services, or accommodations in relation to that
or any other injury, or in relation to a condition claimed to be
connected with that or any other injury shall, if requested to do so
by the personal protection insurer against whom the claim has been
made, furnish a written report of the history, condition, treatment,
and the dates and costs of such treatment, of the injured person.
Every such physician or other health care provider, hospital, clinic,
or other medical institution shall also promptly produce and permit
the inspection and copying of its records regarding such history,
condition, and treatment, and the dates and costs of treatment. A
physician providing such information to a personal protection
insurer shall be entitled to a fee of fifty cents per page for
providing copies of the medical record, provided a minimum fee of
ten dollars plus postage is authorized. Physicians may charge other
reasonable fees for the production of other reports or information
requested by the personal insurance carrier.
(D) No cause of action for violation of a physician-patient
privilege or invasion of the right of privacy is allowed against any
physician or other health care provider, hospital, clinic, or other
medical institution complying with the provisions of this section.
(E) The person requesting records and a sworn statement under
this section shall pay all reasonable costs connected therewith.
(F) A court may order or prohibit discovery of any records
under this section in case of any dispute as to the right of a
claimant or insurer to discover the information required to be
disclosed by this section.
Section 38-78-240. A physician or other health care provider
including, but not limited to, a hospital, clinic, or other health care
institution rendering treatment to an injured person, may charge
only a reasonable amount for the products, services, and
accommodations rendered. The charge shall not exceed the amount
the person or institution customarily charges for the products,
services, and accommodations in cases not involving automobile
insurance.
Section 38-78-260. The director shall adopt rules which
encourage personal protection insurers to institute incentives for
personal protection insureds to install, maintain, and make use of
injury-reducing devices such as seat and harness belts, air bags, and
child restraint systems.
Section 38-78-280. (A) Each insurer authorized to transact
business or transacting business in this State shall file with the
director a form approved by the director which states that any
contract of motor vehicle liability insurance, wherever issued,
covering the maintenance or use of a motor vehicle while the motor
vehicle is in this State, is deemed to satisfy Section 38-78-40 once
the vehicle has been continuously present in this State for thirty
days unless the named insured has rejected the limitations on tort
rights and liabilities under Section 38-78-120.
(B) If a person is entitled to personal protection benefits or their
equivalent under the requirements of more than one state, the
person shall elect to recover under the laws of one state. The
election represents the exclusive source of recovery of all personal
protection benefits, or their equivalent, paid or payable under the
financial responsibility requirements of that or any other state.
Section 38-78-290. All insurance coverages provided under this
chapter are subject to such terms, conditions, and exclusions which
have been approved by the director.
Section 38-78-325. The director may promulgate regulations for
effective administration which are fair, equitable, and consistent
with the purpose of this chapter."
SECTION 2. The 1976 Code is amended by adding:
"Section 38-73-775. (A) The governing board of the
South Carolina Reinsurance Facility annually shall develop and file
physical damage loss components for automobile insurance
coverages based on the total experience of all risks ceded to the
facility which are actuarially-sound and supported by statistical
evidence. The governing board shall contract with independent
actuarial services to develop the loss component. Due consideration
must be given to actual loss experience within the facility for the
most recent three-year period for which such information is
available.
(B) The loss component developed under this section is
applicable to the risk and territorial classification plan promulgated
and approved by the director or the director's designee. Nothing in
this section precludes the governing board of the South Carolina
Reinsurance Facility from filing for approval, or the Director of the
Department of Insurance from requiring the governing board to file
for approval, variations in loss components and rates which are
based upon differences in risk characteristics including, but not
limited to, differences in driving records.
(C) The governing board of the South Carolina Reinsurance
Facility annually shall review the automobile physical damage loss
components to determine if they are actuarially-sound and supported
by statistical evidence. If rate changes are required, the governing
board shall submit appropriate filings for approval with the director.
These rate filings are subject to public hearings pursuant to
applicable provisions of the Administrative Procedures Act."
SECTION 3. Section 37-2-202(2)(c) of the 1976 Code is
amended to read:
"(c) with respect to vendor's single interest insurance, but
only (i) to the extent that the insurer has no right of subrogation
against the consumer, and (ii) to the extent that the insurance does
not duplicate the coverage of other insurance under which loss is
payable to the creditor as his interest may appear, against loss of or
damage to property for which a separate charge is made to the
consumer pursuant to paragraph (a), and (iii) if a clear,
conspicuous, and specific statement in writing is furnished by the
creditor to the consumer setting forth the cost of the insurance if
obtained from or through the creditor and stating that the consumer
may choose the person through whom the insurance is to be
obtained, and (iv) upon application of the consumer for the
insurance or for a transaction in which this coverage may be offered
in connection with the purchase of a motor vehicle or with the
placement of a motor vehicle as collateral, the following notice
printed in no smaller than bold-face 13-point type:
`NOTICE: THE INSURANCE COVERAGE YOU ARE
PURCHASING IS FOR THE BENEFIT OF THE CREDITOR. IT
WILL NOT REIMBURSE YOU FOR DAMAGES TO YOUR
VEHICLE, BUT IT MAY PAY THE CREDITOR FOR THE
DAMAGES IF YOU CANNOT PAY. YOU HAVE THE RIGHT
TO PURCHASE INSURANCE THAT WILL REIMBURSE YOU
FOR DAMAGES TO YOUR VEHICLE EITHER THROUGH THE
CREDITOR IF OFFERED BY THE CREDITOR OR THROUGH
YOUR OWN AGENT.'
This notice must be signed by the applicant evidencing his
acknowledgement of having read the notice, and be separate and
apart from any other form used in the application."
SECTION 4. Section 37-3-202(2)(c) of the 1976 Code is
amended to read:
"(c) vendor's single interest insurance, but only:
(i) to the extent that the insurer has no right of
subrogation against the debtor;
(ii) to the extent that the insurance does not duplicate the
coverage of other insurance under which loss is payable to the
creditor as his interest may appear, against loss of or damage to
property for which a separate charge is made to the debtor pursuant
to paragraph (a); and
(iii) if a clear, conspicuous, and specific statement in
writing is furnished by the creditor to the debtor setting forth the
cost of the insurance if obtained from or through the creditor and
stating that the debtor may choose the person through whom the
insurance is to be obtained; and
(iv) upon application of the consumer for the insurance or
for a transaction in which this coverage may be offered in
connection with the purchase of a motor vehicle or with the
placement of a motor vehicle as collateral, the following notice
printed in no smaller than bold-face 13-point type:
`NOTICE: THE INSURANCE COVERAGE YOU ARE
PURCHASING IS FOR THE BENEFIT OF THE CREDITOR. IT
WILL NOT REIMBURSE YOU FOR DAMAGES TO YOUR
VEHICLE, BUT IT MAY PAY THE CREDITOR FOR THE
DAMAGES IF YOU CANNOT PAY. YOU HAVE THE RIGHT
TO PURCHASE INSURANCE THAT WILL REIMBURSE YOU
FOR DAMAGES TO YOUR VEHICLE EITHER THROUGH THE
CREDITOR IF OFFERED BY THE CREDITOR OR THROUGH
YOUR OWN AGENT.'
This notice must be signed by the applicant evidencing his
acknowledgement of having read the notice, and be separate and
apart from any other form used in the application;"
SECTION 5. Section 38-77-10(1) and (2) of the 1976 Code, as
last amended by Act 181 of 1993, is further amended to read:
"(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 bodily injury
liability and property damage liability 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."
SECTION 6. Section 38-77-30(1) of the 1976 Code, as last
amended by Act 443 of 1992, is further amended to read:
"(1) `Automobile insurance' means automobile bodily
injury and property damage liability insurance, including medical
payments and uninsured motorist coverage, and automobile physical
damage insurance such as automobile comprehensive physical
damage, collision, fire, theft, combined additional coverage, and
similar automobile physical damage insurance and economic loss
benefits as provided by this chapter written or offered by
automobile insurers. An automobile insurance policy includes a
motor vehicle liability policy as defined in item (7) of Section
56-9-20 and any nonowner automobile insurance policy which
covers an individual private passenger automobile not owned by the
insured, a family member of the insured, or a resident of the same
household as the insured, and also includes the personal
protection policy as defined in Section 38-78-30(C)."
SECTION 7. Section 38-77-30 of the 1976 Code, as last
amended by Act 181 of 1993, is further amended by adding an
appropriately numbered item to read:
"( ) `Facility physical damage rate' means the final rate
or premium charge for physical damage coverage which must be
established by adding the physical damage loss component
developed under Section 38-73-780 to the expense component
developed under Section 38-73-1420."
SECTION 8. Section 38-77-110(A) of the 1976 Code, as last
amended by Act 181 of 1993, is further amended to read:
"(A) Automobile insurers other than insurers designated
and approved as specialized insurers by the director or his designee
may not refuse to write or renew automobile insurance policies for
bodily injury liability and property damage liability coverage
for individual private passenger automobiles or small
commercial risks. These policies may not be canceled except for
reasons which had they existed or been known when the policy was
written would have rendered the risk not an insurable risk. Every
automobile insurance risk constitutes an insurable risk unless the
operator's permit of the named insured has been revoked or
suspended and is at the time of application for insurance so revoked
or suspended. However, no insurer is required to write or renew
automobile insurance on any risk if there exists a valid and
enforceable outstanding judgment secured by an insurer, an agent,
or licensed premium service company on account of automobile
insurance premiums which the applicant or insured or any principal
operator who is a member of the named insured's household has
failed or refused to pay unless the applicant or insured pays in
advance the entire premium for the full term of the policy sought to
be issued or renewed or the annual premium, whichever is the
lesser. An insurer is not precluded from effecting cancellation of
an automobile insurance policy, either upon its own initiative or at
the instance of an agent or licensed premium service company,
because of the failure of any named insured or principal operator to
pay when due any automobile insurance premium or any installment
payment. However, notice of cancellation for nonpayment of
premium notifies the person to whom the notice is addressed that
the notice is void and ineffective if payment of the full amount of
the premium or premium indebtedness, whichever is the greater, is
made to the insurer, agent, or licensed premium service company
named in the notice by the otherwise effective date of cancellation.
This notice of cancellation is not considered ineffective for being
conditional, ambiguous, or indefinite."
SECTION 9. Section 38-77-110(B) of the 1976 Code, as added
by Act 148 of 1989, is amended by adding the following:
"(5) two hundred fifty thousand dollars for added personal
protection coverage as defined in Section 38-78-30(B)."
SECTION 10. Article 3, Chapter 77, Title 38 of the 1976 Code
is amended by adding:
"Section 38-77-355. (A) In a claim or action for personal
injury or wrongful death arising out of the ownership, operation,
use, or maintenance of a motor vehicle, the court shall admit into
evidence the total amount paid to the claimant from collateral
sources, and the court shall instruct the jury to deduct from its
verdict the value of all benefits received by the claimant from
collateral sources.
(B) For purposes of this section, `collateral sources' means
payments made to the claimant, or on his behalf, by or pursuant to:
(1) automobile liability, uninsured motorist, underinsured
motorist, or automobile accident insurance that provides health
benefits or income disability coverage;
(2) personal protection benefits paid or payable by law;
(3) payments made from a policy of automobile insurance by
or on behalf of a joint tortfeaser, either by way of settlement or
judgment.
(C) No claimant may make claim or demand, no court may
order payment, and no insurer may pay by way of settlement,
covenant not to sue, or trust or loan agreement for an item of
damages to the extent that the claimant has already received, or will
receive, reimbursement for that item as a result of a collateral
source payment as defined in this section."
SECTION 11. Section 38-77-280 of the 1976 Code, as last
amended by Act 181 of 1993, is further amended to read:
"Section 38-77-280. (A) Except as provided in
subsection (B), All automobile insurers, including those
insurance companies writing private passenger physical damage
coverages only, shall may, at their own election,
make collision coverage and either comprehensive or fire, theft, and
combined additional coverage available to an insured or qualified
applicant who requests the coverage at such rates and under
such rules as have been approved by the director. Automobile
insurers contracted pursuant to Section 38-77-590 for risks written
by them through producers assigned by the facility governing board
pursuant to that section may make available collision coverage and
either comprehensive or fire, theft, and combined additional
coverage available to an insured or qualified applicant who requests
the coverage. Notwithstanding Section 38-77-590(g), a designated
producer may have one or more voluntary outlets for automobile
physical damage.
Collision coverage must have a mandatory deductible of two
hundred fifty dollars, but an insured or qualified applicant, at his
option, may select an additional deductible in appropriate
increments up to one thousand dollars.
Comprehensive coverage or fire, theft, and combined additional
coverages must have a mandatory deductible of two hundred fifty
dollars, but an insured, at his option, may select an additional
deductible in appropriate increments up to one thousand dollars.
This deductible does not apply to auto safety glass. It is an unfair
trade practice, as described in Sections 38-57-30 and 38-57-40, for
an insurer or an agent to sell collision insurance, comprehensive
coverage, or fire, theft, and combined additional coverages unless
the insured is notified at the time of application of the savings
which may be realized if the applicant or the insured selects a
higher deductible. This notice is required only at the time of the
initial sale and must be in a form approved by the director or his
designee. An insurer may offer insureds lower deductibles at the
insurer's option.
(B) Notwithstanding subsection (A) and Sections 38-77-110
and 38-77-920, automobile insurers may refuse to write automobile
physical damage insurance coverage, including automobile
comprehensive physical damage, collision, fire, theft, and combined
additional coverage, for an applicant or existing policyholder, on
renewal, for a motor vehicle customarily operated by an individual,
either the named insured or another operator not excluded in
accordance with Section 38-77-340 and who resides in the same
household, where one or more of the conditions or factors
prescribed in Section 38-73-455 exist. In addition, automobile
insurers may refuse to write physical damage insurance coverage to
an applicant or existing policyholder, on renewal, who has collected
benefits provided under automobile insurance physical damage
coverage during the thirty-six months immediately preceding the
effective date of coverage, for two or more total fire losses or two
or more total theft losses. Automobile insurers may refuse to write
for private passenger automobiles physical damage insurance
coverage, including automobile comprehensive physical damage,
collision, fire, theft, and combined additional coverage, for an
applicant or existing policyholder, on renewal, for a motor vehicle
customarily operated by an individual, either the named insured or
another operator not excluded in accordance with Section 38-77-340
and who resides in the same household, which does not qualify for
the safe driver discount in Section 38-73-760(e). Any
automobile physical damage insurance coverage deductible or policy
deductible does not apply to automobile safety glass.
(C) Notwithstanding Section 38-77-110, automobile physical
damage coverage in an automobile insurance policy may be
canceled at any time during the policy period by reason of the
factors or conditions described in Section 38-73-455(A) or
Section 38-77-280(B) the uniform merit rating plan
which existed before the commencement of the policy period and
which were not disclosed to the insurer at the commencement of the
policy period.
(D) No policy of insurance which provides automobile physical
damage coverage only may be ceded to the facility.
(E) Insurers of automobile insurance may charge a rate for
physical damage insurance coverages different than those provided
for in Section 38-73-457 if the rates are filed with the department
and approved by the director or his designee. Any applicant or
existing policyholder, to be charged this different rate, must be
denied the coverage pursuant to subsection (B) at the rate provided
in Section 38-73-457 Notwithstanding Section 38-77-111,
automobile physical damage insurance coverage may be ceded to
the facility. However, automobile physical damage coverages ceded
to the facility by an insurer or servicing carrier must be at the
facility physical damage rate as defined in Section 38-77-30.
(F) A carrier may not cede collision coverage,
comprehensive coverage, or fire, theft, and combined additional
coverages with a deductible of less than two hundred fifty dollars.
An insured or qualified applicant may select an additional
deductible in appropriate increments up to one thousand dollars.
However, the mandatory deductible does not apply to safety
glass. In determining the premium rates to be charged on
physical damage coverage or single interest collision coverage, it is
unlawful to consider race, color, creed, religion, national origin,
ancestry, location of residence in this State, economic status, or
income level. Nor may an insurer, agent, or broker refuse to write
or renew physical damage insurance coverage or single interest
collision coverage based upon race, color, creed, religion, national
origin, ancestry, location of residence in this State, economic status,
or income level. However, nothing in this subsection may preclude
the use of a territorial plan approved by the director. If the
Director of the Department of Insurance or the director's designee
finds that an insurer, agent, or broker is participating in a pattern of
unfair discrimination, the director or the director's designee may
impose a fine of up to two hundred thousand dollars. The director
or the director's designee at any time may examine an insurer,
agent, or broker to enforce this section. The expense of
examination must be paid by the insurer, agent, or
broker."
SECTION 12. Section 38-77-30(4) of the 1976 Code is amended
to read:
"(4) `Damages' includes both actual and
punitive damages only."
SECTION 13. Section 38-77-140 of the 1976 Code is amended
to read:
"Section 38-77-140. (A) No automobile
insurance policy may be issued or delivered in this State to the
owner of a motor vehicle or may be issued or delivered by an
insurer licensed in this State upon any motor vehicle then
principally garaged or principally used in this State, unless it
contains a provision insuring the persons defined as insured against
loss from the liability imposed by law for actual damages
arising out of the ownership, maintenance, or use of these motor
vehicles within the United States or Canada, subject to limits
exclusive of interest and costs, with respect to each motor vehicle,
as follows: fifteen thousand dollars because of bodily injury to one
person in any one accident and subject to the limit for one person,
thirty thousand dollars because of bodily injury to two or more
persons in any one accident, and five thousand dollars because of
injury to or destruction of property of others in any one accident.
Nothing in this article prevents an insurer from issuing, selling, or
delivering a policy providing liability coverage in excess of these
requirements.
(B) An insurer shall also offer the insured, in accordance
with Section 38-77-350, a rider or endorsement for an additional
premium to cover such liability for punitive damages. The insured
has the option of accepting or refusing coverage for punitive
damages.
As a result of passage of this section, all insurers offering
bodily injury liability coverage shall file with the director or his
designee, not later than ninety days after the effective date of this
act, revised premium rates for bodily injury liability coverage to be
effective on automobile insurance policies issued or renewed with
effective dates on or after October 1, 1996. The revised rates must
be approved by the director and reflect a reduction in the currently
approved premium rate for this coverage of at least one and
one-half percent. Insurers shall file with the director not later than
sixty days after the effective date of this act premium charges for
the punitive damages loss coverage. The premium rate for
this coverage shall become effective for the automobile insurance
policies issued or renewed with effective dates on or after October
1, 1996, and may not be approved if it is more, when combined
with the reduced premium rate for the new bodily injury liability
coverage with limitations on the recovery of punitive damages, than
the bodily injury liability premium rate for that insurer on the
effective date of this act; however, after September 30, 1996, an
insurer may apply to the director or his designee for a rate
adjustment for such coverage, based on its actual
experience."
SECTION 14. Section 38-77-150 of the 1976 Code, as last
amended by Section 807 of Act 181 of 1993, is further amended to
read:
"Section 38-77-150. (A) No automobile
insurance policy or contract may be issued or delivered unless it
contains a provision by endorsement or otherwise, herein referred to
as the uninsured motorist provision, undertaking to pay the insured
all sums which he is legally entitled to recover as actual
damages from the owner or operator of an uninsured motor vehicle,
within limits which may be are no less than the
requirements of Section 38-77-140 and no more than the
insured's bodily injury and property damage liability limits.
The uninsured motorist provision shall also provide for no less
than five thousand dollars' coverage for injury to or destruction of
the property of the insured in any one accident but may provide an
exclusion of the first two hundred dollars of the loss or damage.
(B) Automobile insurers shall offer, at the option of the
insured and in the manner hereinafter described, higher limits of
uninsured motorist coverage in accordance with Section 38-77-350.
The offer of higher limits must be made in connection with every
initial application for an automobile insurance policy by including a
written explanation of the coverage and inquiry of the applicant, in
a form prescribed by the director, as to whether the applicant
desires to purchase uninsured motorist coverage with limits greater
than the mandatory coverages described in subsection (A). No such
explanation or inquiry need be made with respect to any renewal,
replacement, reinstatement, substitute, or modification of the policy.
An insured may, at any time and subject to the limits of this
section, specifically request in writing uninsured motorist coverage
limits greater than that provided on the current or any prior
policy.
(C) Insurers shall offer on a form prescribed by the director
`nonstackable' policies of uninsured motorist coverage containing
policy provisions establishing that if the insured accepts this
offer:
(1) Regardless of the number of vehicles involved,
persons covered, number of premiums paid, or vehicles or
premiums shown on the policy or policies under which the insured
might otherwise be entitled to benefits, the coverage provided as to
two or more motor vehicles under the same or different policies
may not under any circumstances be added together, combined
with, or stacked to determine the limit of insurance coverage
available to an injured person for any one accident, except as
provided in item (3) of this subsection (C).
(2) If at the time of the accident the injured person is
occupying a motor vehicle, the uninsured motorist coverage
available to him is the coverage available as to that motor
vehicle.
(3) If the injured person is occupying a motor vehicle
which is not owned by him or by a family member residing with
him, he is entitled to the highest limits of uninsured motorist
coverage afforded for any one vehicle as to which he is named
insured. Such coverage is excess over the coverage on the vehicle
he is occupying.
(4) The uninsured motorist coverage provided by the
policy does not apply to the named insured who is injured while
occupying any vehicle owned by the named insured for which
uninsured motorist coverage was not purchased.
(5) If at the time of the accident the injured person is not
occupying a motor vehicle, he is entitled to select any one limit of
uninsured motorist coverage for any one vehicle afforded by a
policy under which he is insured as a named insured.
(6) In connection with the offer authorized by this
subsection, insurers shall inform the named insured, applicant, or
lessee, on a form prescribed by the director, of the limitations
imposed under this subsection and that such coverage is an
alternative to coverage without such limitations. If this form is
signed by a named insured, applicant, or lessee, it is conclusively
presumed that there was an informed, knowing acceptance of such
limitations, and neither the insurance company nor the insurance
agent has any liability to the insured for the insured's failure to
purchase stackable coverage. When the named insured, applicant,
or lessee has initially accepted such limitations, the acceptance
applies to any policy which renews, extends, changes, supersedes,
reinstates or replaces an existing policy unless the named insured
requests deletion of the limitations and pays the appropriate
premium for the coverage. Any insurer who provides coverage
which includes the limitations provided in this subsection shall file
revised premium rates with the Department of Insurance for such
uninsured motorist coverage to take effect before initially providing
such coverage. The revised rates must reflect the anticipated
reduction in loss costs attributable to such limitations but, in any
event, must reflect a reduction in the uninsured motorist coverage
premium of at least fifteen percent for policies with such
limitations. Insurers shall file within ninety days after the effective
date of this act, revised premium rates with the director or his
designee to be effective on automobile insurance policies issued or
renewed with effective dates on or after October 1, 1996.
(D) Premium rates made by insurers for uninsured motorist
coverage must be determined and regulated as premium rates for
automobile insurance generally are determined and regulated.
The director or his designee may prescribe shall
approve the form to be used in providing uninsured motorist
coverage and when prescribed and promulgated no other
form may be used.
(E) No action may be brought under the uninsured
motorist provision unless copies of the pleadings in the action
establishing liability are served in the manner provided by law upon
the insurer writing the uninsured motorist provision. The insurer
has the right to appear and defend in the name of the uninsured
motorist in any action which may affect its liability and has thirty
days after service of process on it in which to appear. The
evidence of service upon the insurer may not be made a part of the
record.
(F) Benefits paid pursuant to this section are subject to
subrogation and assignment."
SECTION 15. Section 38-77-160 of the 1976 Code, as last
amended by Act 461 of 1994, is further amended to read:
"Section 38-77-160. (A) Automobile
insurance carriers insurers shall offer on a form
prescribed by the director, at the option of the insured, in
accordance with Section 38-77-350 uninsured
underinsured motorist coverage up to the limits of the
insured's liability coverage in addition to the mandatory coverage
prescribed by Section 38-77-150. Such carriers shall also offer, at
the option of the insured, underinsured motorist coverage up to the
limits of the insured liability coverage to provide coverage in the
event that damages are sustained in excess of the liability limits
carried by an at fault insured or underinsured motorist or in excess
of any damages cap or limitation imposed by statute. If, however,
an insured or named insured is protected by uninsured or
underinsured motorist coverage in excess of the basic limits, the
policy shall provide that the insured or named insured is protected
only to the extent of the coverage he has on the vehicle involved in
the accident. If none of the insured's or named insured's vehicles
is involved in the accident, coverage is available only to the extent
of coverage on any one of the vehicles with the excess or
underinsured coverage. up to the limits selected for the
insured's liability coverage to provide coverage in the event the
insured becomes legally entitled to collect damages from the owner
or operator of an underinsured motor vehicle, as defined in Section
38-77-30(14). The maximum liability of the insurer under the
underinsured motorist coverage provided is the lesser of:
(1) the difference between the limit of underinsured motorist
coverage and the amount paid or payable to the insured by or for
any person or organization who is held legally liable for the bodily
injury or property damage, or
(2) the amount of damages sustained, but not recovered. In
no event may the liability of the insurer under such coverage be
more than the limits of underinsured motorist coverage
provided.
(B) An insured entitled to benefits under an uninsured
motorist provision is not entitled to benefits under an underinsured
motorist provision. An insured entitled to benefits under an
underinsured motorist provision is not entitled to benefits under an
uninsured motorist provision.
(C) Insurers shall offer on a form prescribed by the director
`nonstackable' policies of underinsured motorist coverage
containing policy provisions establishing that if the insured accepts
this offer:
(1) Regardless of the number of vehicles involved, persons
covered, number of premiums paid, or vehicles or premiums shown
on the policy or policies under which the insured might otherwise
be entitled to benefits, the coverage provided as to two or more
motor vehicles under the same or different policies may not under
any circumstances be added together, combined with, or stacked to
determine the limit of insurance coverage available to an injured
person for any one accident, except as provided in item (3) of this
subsection (C).
(2) If at the time of the accident the injured person is
occupying a motor vehicle, the underinsured motorist coverage
available to him is the coverage available as to that motor vehicle.
(3) If the injured person is occupying a motor vehicle which
is not owned by him or by a family member residing with him, he
is entitled to the highest limits of underinsured motorist coverage
afforded for any one vehicle as to which he is named insured. Such
coverage is excess over the coverage on the vehicle he is
occupying.
(4) The underinsured motorist coverage provided by the
policy does not apply to the named insured who is injured while
occupying any vehicle owned by the named insured for which
underinsured motorist coverage was not purchased.
(5) If at the time of the accident the injured person is not
occupying a motor vehicle, he is entitled to select any one limit of
underinsured motorist coverage for any one vehicle afforded by a
policy under which he is insured as a named insured.
(6) In connection with the offer authorized by this subsection,
insurers shall inform the named insured, applicant, or lessee, on a
form prescribed by the director, of the limitations imposed under
this subsection and that such coverage is an alternative to coverage
without such limitations. If this form is signed by a named insured,
applicant, or lessee, it is conclusively presumed that there was an
informed, knowing acceptance of such limitations, and neither the
insurance company nor the insurance agent has any liability to the
insured for the insured's failure to purchase stackable coverage.
When the named insured, applicant, or lessee has initially accepted
such limitations, the acceptance applies to any policy which renews,
extends, changes, supersedes, reinstates or replaces an existing
policy unless the named insured requests deletion of the limitations
and pays the appropriate premium for the coverage.
(D) If an insured is entitled to uninsured motorist or
underinsured motorist coverage under more than one policy the
maximum amount the insured may recover may not exceed the
highest limit of such coverage provided for any one vehicle under
any one policy. If more than one policy applies, the following is
the order of priority:
(1) a policy covering a motor vehicle occupied by the injured
person at the time of the accident;
(2) a policy covering a motor vehicle not involved in the
accident under which the injured person is named insured;
(3) a policy covering a motor vehicle not involved in the
accident under which the injured person is an insured other than a
named insured. Coverage available under a lower priority policy
applies only to the extent it exceeds the coverage of a higher
priority policy. The underinsured motorist coverage does not apply
to bodily injury, sickness, or death of an insured while occupying a
motor vehicle owned by, furnished, or available for the regular use
of the insured, a resident spouse, or resident relative, if such motor
vehicle is not described in the policy under which a claim is made,
or is not a newly acquired or replacement vehicle covered under the
terms of the policy.
(E) Underinsured motorist Benefits
benefits paid pursuant to this section are not subject
to subrogation and assignment.
(F) No action may be brought under the underinsured
motorist provision unless copies of the pleadings in the action
establishing liability are served in the manner provided by law upon
the insurer writing the underinsured motorist provision. The insurer
has the right to appear and defend in the name of the underinsured
motorist in any action which may affect its liability and has thirty
days after service of process on it in which to appear. The
evidence of service upon the insurer may not be made a part of the
record. In the event the automobile insurance insurer for the
putative at-fault insured chooses to settle in part the claims against
its insured by payment of its applicable liability limits on behalf of
its insured, the underinsured motorist insurer may assume control of
the defense of action for its own benefit. No underinsured motorist
policy may contain a clause requiring the insurer's consent to
settlement with the at-fault party.
Insurers offering uninsured motorist coverage must file with
the director or his designee no more than ninety days after the
effective date of this act revised premium rates for this coverage to
be effective on all policies of automobile insurance containing such
coverage issued on or renewed with effective dates on or after
October 1, 1996. The revised rate must be approved by the director
and reflect a reduction in the currently approved premium rate for
this coverage of at least eighteen percent; provided, however, that
after September 30, 1996, an insurer may apply to the director for a
rate adjustment for such coverage, based on its actual experience.
In the first year following such reductions, an insurer may apply to
the director for a rate adjustment, based on its actual experience,
and include consideration of the time value of money."
SECTION 16. Section 56-9-350 of the 1976 Code is amended to
read:
"Section 56-9-350. The operator or owner of a motor
vehicle involved in an accident resulting in property damage of four
hundred dollars or more or in bodily injury or death, must be
furnished a written request form at the time of the accident, or as
soon after the accident as possible, by the investigating officer for
completion and verification of liability insurance coverage, the form
to be in a manner prescribed by the Department.
The completed and verified form must be returned by the
operator or owner to the Department within fifteen days from the
date the form was delivered by the officer. Failure to return the
form, verified in the proper manner, is prima facie evidence that the
vehicle was uninsured.
The operator or owner of a motor vehicle involved in an accident
resulting in property damage of four hundred dollars or more, or in
bodily injury or death, which was not investigated by a law
enforcement officer shall furnish to the Department a written report
and verification of liability insurance coverage, the proof to be in a
manner prescribed by the Department within fifteen days
after the accident, shall forward a written report of the accident to
the department on a form prescribed by the department. The report
must contain information to enable the department to determine
whether the requirements for the deposit of security under Section
56-9-351 are inapplicable by reason of the existence of insurance or
other exceptions specified in this title. Failure to file the report, in
the proper verified manner, is prima facie evidence that the vehicle
was not registered in compliance with this title."
SECTION 17. Section 38-77-110(C) of the 1976 Code, as
amended by Act 148 of 1989, is further amended to read:
"(C) With regard to any coverage not required to be
written by an insurer under the mandate to write, no
No insurer, agent, or broker may refuse to write
or renew such policy, coverage, or endorsement of
automobile insurance because of the race, color, creed,
religion, national origin, or ancestry, location of
residence in this State, economic status, or income level of
anyone who seeks to become insured. However, nothing in this
subsection may preclude the use of a territorial plan approved by
the director. If the director of the Department of Insurance or the
director's designee may impose a fine up to two hundred thousand
dollars. The director or the director's designee at any time may
examine an insurer, agent, or broker to enforce this
subsection."
SECTION 18. Section 38-77-110 of the 1976 Code, as last
amended by Section 803 of Act 181 of 1993, is further amended by
adding:
"(D) An applicant denied coverage must be provided in
writing by the denying insurer the reason or reasons for which the
applicant has been refused insurance by that insurer, at the time of
the denial."
SECTION 19. Chapter 77 of Title 38 of the 1976 Code is
amended by adding:
"Article 13
Joint Underwriting Association
Section 38-77-1310. (A) The Reinsurance Facility is abolished
effective October 1, 1996. There is created the South Carolina
Joint Underwriting Association. The administration of the phase
out of the facility is transferred to the Joint Underwriting
Association.
(B) As of July 1, 1999, the facility recoupment charge must not
be included in the rate or premium charged by the insurers of
private passenger automobile insurance to drivers who qualify for
the safe driver discount. If any losses are incurred as a result of the
operation of the facility, the losses attributable to the facility must
be distributed among insured drivers as provided in subsection (C)
until the Director of the Department of Insurance determines all of
the losses have been accounted for, unless provided otherwise.
(C) Consistent with subsection (B), the rate or premium charged
by insurers of private passenger automobile insurance must include
a recoupment charge, which must be added to the appropriate rate
to compensate for any remaining losses incurred by the facility as a
result of its operation. The operating losses of the facility for a
twelve-month period must be recouped in the subsequent
twelve-month period.
(1) Prior to December first of each year, the governing board
shall calculate the recoupment amount, by coverage, by dividing the
net facility operating loss, adjusted to reflect prudently incurred
expenses, consistent with the provisions of Section 38-73-465, and
the time value of money, by mandated coverage for the preceding
facility accounting year, by the total number of earned car years in
South Carolina, by coverage, for the same period of time. .368
multiplied by the recoupment is to be borne by risks having zero
surcharge points under the Uniform Merit Plan promulgated by the
director. The remainder of the recoupment (.614 multiplied by the
recoupment) represents R in the formula P1X +2P2X +3P3X +
4P4X + 5P5X + 6P6X + 7P7X + 8P8X + 9P9X + 10P10X = R. In
this formula to be utilized in determining the facility recoupment
charge:
(a) P1 is the percentage of risks which have one surcharge
point under the Uniform Merit Rating Plan;
(b) P2 is the percentage of risks which have two surcharge
points under the Uniform Merit Rating Plan;
(c) P3 is the percentage of risks which are subject to a
surcharge of three points under the Uniform Merit Rating Plan;
(d) P4 is the percentage of risks which are subject to a
surcharge of four points under the Uniform Merit Rating Plan;
(e) P5 is the percentage of risks subject to a surcharge of
five points under the Uniform Merit Rating Plan;
(f) P6 is the percentage of risks subject to a surcharge of
six points under the Uniform Merit Rating Plan;
(g) P7 is the percentage of risks subject to a surcharge of
seven points under the Uniform Merit Rating Plan;
(h) P8 is the percentage of risks subject to a surcharge of
eight points under the Uniform Merit Rating Plan;
(i) P9 is the percentage of risks subject to a surcharge of
nine points under the Uniform Merit Rating Plan;
(j) P10 or more is the percentage of risks subject to a
surcharge of ten or more points under the Uniform Merit Rating
Plan;
(k) X is the dollar amount by coverage, to be charged all
risks having one surcharge point under the Uniform Merit Rating
Plan promulgated by the director. This dollar amount, by coverage,
is the facility recoupment charge to be added to the rate for all risks
which have one surcharge point.
(2) The facility recoupment charge by coverage to be added
to the rate for all risks which have one surcharge point under the
Uniform Merit Rating Plan is calculated by multiplying X by a
factor of one.
(3) The facility recoupment charge by coverage to be added
to the rate for all risks which have two surcharge points under the
Uniform Merit Rating Plan is calculated by multiplying X by a
factor of two.
(4) The facility recoupment charge by coverage to be added
to the rate for all risks which are subject to a surcharge of three
points under the Uniform Merit Rating Plan is calculated by
multiplying X by a factor of three.
(5) The facility recoupment charge by coverage to be added
to the rate for all risks which are subject to a surcharge of four
points under the Uniform Merit Rating Plan is calculated by
multiplying X by a factor of four.
(6) The facility recoupment charge by coverage to be added
to the rate for all risks which are subject to a surcharge of five
points under the Uniform Merit Rating Plan is calculated by
multiplying X by a factor of five.
(7) The facility recoupment charge by coverage to be added
to the rate for all risks which are subject to a surcharge of six
points under the Uniform Merit Rating Plan is calculated by
multiplying X by a factor of six.
(8) The facility recoupment charge by coverage to be added
to the rate for all risks which are subject to a surcharge of seven
points under the Uniform Merit Rating Plan is calculated by
multiplying X by a factor of seven.
(9) The facility recoupment charge by coverage to be added
to the rate for all risks which are subject to a surcharge of eight
points under the Uniform Merit Rating Plan is calculated by
multiplying X by a factor of eight.
(10) The facility recoupment charge by coverage to be added
to the rate for all risks which are subject to a surcharge of nine
points under the Uniform Merit Rating Plan is calculated by
multiplying X by a factor of nine.
(11) The facility recoupment charge by coverage to be added
to the rate for all risks which are subject to a surcharge of ten or
more points under the Uniform Merit Rating Plan is calculated by
multiplying X by a factor of ten.
(12) In determining the number of surcharge points a risk has
for the purposes of this section, no surcharge points assigned under
the Uniform Merit Rating Plan because the principal operator of the
automobile has not been licensed in any state for at least one year
immediately preceding the writing of the risk or as a result of a
failure of any motor vehicle equipment requirement may be
considered.
(13) This section applies to all private passenger automobile
insurance policies.
Section 38-77-1330. As used in this article:
(1) `Association' means the South Carolina Joint Underwriting
Association established pursuant to this article.
(2) `Net direct premiums' means gross direct premiums written
on automobile liability insurance as computed by the Director of the
Department of Insurance less return premiums or the unused or
unabsorbed portions of premium deposits.
Section 38-77-1340. (A) A joint underwriting association is
created consisting of all automobile insurers licensed to write within
this State automobile insurance policies. Every such insurer is and
must remain a member of the association as a condition of its
authority to continue to transact this kind of insurance in this State.
(B) The purpose of the association is to provide automobile
insurance on a self-supporting basis to the fullest extent possible.
Section 38-77-1350. The association has the power on behalf of
its members to make agreements among themselves with respect to
the equitable apportionment among them of insurance which may
be afforded applicants who are in good faith entitled to or have lost
their safe driver discount, but are unable to procure such insurance
through ordinary methods, and such insurers may agree among
themselves on the use of reasonable rate modifications for such
insurance. Such agreements and rate modifications shall be subject
to the approval of the department.
Section 38-77-1360. (A) The department shall, after
consultation with the insurers licensed to write automobile liability
insurance in this State, adopt a reasonable plan or plans for the
equitable apportionment among such insurers of applicants for such
insurance who are in good faith entitled to or have lost their safe
driver discount, but are unable to, procure such insurance through
ordinary methods, and, when such plan has been adopted, all such
insurers shall subscribe thereto and shall participate therein. Such
plan or plans shall include rules for classification of risks and rates
therefor by driver classification and territory. Any insured placed
with the plan shall be notified of the fact that insurance coverage is
being afforded through the plan and not through the private market,
and such notification shall be given in writing within ten days of
such placement. To assure that plan rates are made adequate to pay
claims and expenses, insurers shall develop a means of obtaining
loss and expense experience at least annually, and the plan shall file
such experience, when available, with the department in sufficient
detail to make a determination of rate adequacy.
(B) The plan of operation shall provide for economic, fair, and
nondiscriminatory administration and for the prompt and efficient
provision of insurance and may contain other provisions including,
but not limited to, preliminary assessment of all members for initial
expenses necessary to commence operations, establishment of
necessary facilities, management of the association, assessment of
the members to defray losses and expenses, commission
arrangements, reasonable and objective underwriting standards,
appointment of servicing carriers, and procedures for determining
amounts of insurance to be provided by the association.
(C) Trend factors shall not be found to be inappropriate if not in
excess of trend factors normally used in the development of residual
market rates by the appropriate licensed rating organization. Each
application for coverage in the plan shall include, in boldfaced
12-point type immediately preceding the applicant's signature, the
following statement:
`THIS INSURANCE IS BEING AFFORDED THROUGH THE
SOUTH CAROLINA JOINT UNDERWRITING ASSOCIATION
AND NOT THROUGH THE PRIVATE MARKET. PLEASE BE
ADVISED THAT COVERAGE WITH A PRIVATE INSURER
MAY BE AVAILABLE FROM ANOTHER AGENT AT A
LOWER COST. AGENT AND COMPANY LISTINGS ARE
AVAILABLE IN THE LOCAL YELLOW PAGES.'
(D) The plan of operation shall provide that any profit achieved
by the association must be added to the reserves of the association
or returned to the policyholders as a dividend but under no
circumstances whatsoever shall any profit be paid over to or
received by an insurer either in currency or any other benefit of any
kind.
(E) Amendments to the plan of operation may be made by the
directors of the association with the approval of the director or must
be made at the direction of the director after proper notice and
public hearing.
(F) The association may not write private passenger automobile
insurance with higher limits of coverage than:
(1) two hundred fifty thousand dollars, for bodily injury
liability to one person in one accident,
(2) subject to the limit for one person, five hundred thousand
dollars because of bodily injury to two or more persons in one
accident,
(3) one hundred thousand dollars because of injury to or
destruction of property of others in any one accident,
(4) five hundred thousand dollars, combined single limits for
either or both bodily injury and property damage,
(5) two hundred fifty thousand dollars of added personal
protection benefits or personal protection liability limits up to the
limits of the personal protection benefits.
(G) If a driver covered by the association has not been able to
purchase insurance on the voluntary market after five consecutive
years of maintaining a safe driver discount, the driver must be
placed by the association with an automobile insurance company
doing business in the voluntary market in this State. The company
must be chosen based on its percentage of automobile insurance
business written in this State on the voluntary market. The
company must charge the driver the company's preferred or
standard rate according to driver classification and territory. A
driver assigned under this provision may not be refused insurance
until the driver fails to qualify for the safe driver discount. This
provision does not preclude the driver from seeking automobile
insurance coverage on the voluntary market at any other time.
Section 38-77-1370. The rates, rating plans, rating rules, rating
classifications, territories, and policy forms applicable to insurance
written by the association and the statistical and experience data
relating thereto are subject to this article and to those provisions of
Chapter 73 of Title 38 which are not inconsistent with this article.
Section 38-77-1380. The director or his designee shall obtain
complete statistical data in respect to automobile insurance losses
and reparation costs as well as all other costs or expenses which
underlie or are related to automobile insurance. The director shall
promulgate any statistical plan he considers necessary for the
purpose of gathering data referable to loss and loss adjustment
expense experience and other expense experience. When the
statistical plan is promulgated, the association shall adopt and use it.
Section 38-77-1390. In structuring rates and determining the
profit or loss of the association in respect to such insurance,
consideration must be given by the director to all investment
income so that investment income is a part of the ratemaking and
ratesetting process.
Section 38-77-1395. No later than sixty days after the passage
of this act, the board must file with the director or his designee
rates for personal protection policies as defined by Section 38-78-30
and rates for private passenger automobile insurance liability
coverages, uninsured motorist coverages, and underinsured motorist
coverages. All of these rates are subject to surcharges or discounts,
if any, applicable under any approved Merit Rating Plan, credit, or
discount plan promulgated or approved by the director. The board
must file:
(1) a standard rate by driver classification and territory twenty
percent less than the substandard rate defined in (2). This rate
applies to all private passenger automobile insurance risks which
qualify for the safe driver discount and are insured directly by or
ceded to the association; and
(2) a `substandard' rate by driver classification and territory
which applies to all private passenger automobile insurance risks
which do not qualify for the safe driver discount and are insured
directly by or ceded to the association.
These two rates must be construed so that when the experience
generated by them is combined, the association is able to provide
private passenger automobile insurance on a self-supporting basis.
Upon the approval of these rates, they must be utilized for all
private passenger automobile insurance risks either ceded to or
insured directly by the association. No insurer or group of insurers
under the same management may cede more 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. The association must submit
policy forms, rating plans, and rating rules applicable to insurance
to be written by the association to the director for his approval.
Section 38-77-1400. The premium rate charged for coverage
must be at rates established on an actuarially sound basis, including
consideration of trends in the frequency and severity of losses and
must be calculated to be self-supporting.
Section 38-77-1410. The association may provide a rate
increase or assessment subject to the director's approval.
Section 38-77-1420. Any deficit sustained by the association in
any year must be recouped, pursuant to the plan of operation and
the rating plan then in effect by a rate increase applicable
prospectively. The director has the authority to authorize and must
approve any recoupment under this section.
Section 38-77-1430. After the initial year of operation, rates,
rating plans, and rating rules and any provision for recoupment
through policyholder assessment or premium rate increase must be
based upon the association's loss and expense experience and
investment income, together with any other information based upon
this experience and income as the commissioner considers
appropriate. The resultant premium rates must be on an actuarially
sound basis and must be calculated to be self-supporting.
If sufficient funds are not available for the sound financial
operation of the association, pending recoupment as provided in
Section 38-77-1420, all members, on a temporary basis, shall
contribute to the financial requirements of the association in the
manner provided for in Section 38-77-1440. Any such contribution
must be reimbursed to the members following recoupment as
provided in Section 38-77-1420.
Section 38-77-1440. All insurers which are members of the
association shall participate in its writings, expenses, and losses in
the proportion that the net direct premiums of each member,
excluding that portion of premiums attributable to the operation of
the association, written during the preceding calendar year bear to
the aggregate net direct premiums written in this State by all
members of the association. Each insurer's participation in the
association must be determined annually on the basis of the net
direct premiums written during the preceding calendar year, as
reported in the annual statements and other reports filed by the
insurer with the director or his designee. 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
director, 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 director 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 subsequent orders as may be necessary, the
director 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 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 insurers on the basis at which assessments were
made.
Section 38-77-1450. Every member of the association is bound
by the approved plan of operation of the association and the rules
of the board of directors of the association.
Section 38-77-1460. (A) If the authority of an insurer to
transact automobile insurance in this State terminates for any
reason, its obligations as a member of the association continue until
all its obligations are fulfilled and the director has so found and
certified to the board of directors.
(B) If a member insurer merges into or consolidates with
another insurer authorized to transact insurance in this State or
another insurer authorized to transact insurance in this State has
reinsured the insurer's entire automobile insurance business in this
State, both the insurer and its successor or assuming reinsurer, as
the case may be, are liable for the insurer's obligations to the
association.
(C) Any unsatisfied net liability of any insolvent member of the
association must be assumed by and apportioned among the
remaining members in the same manner in which assessments or
gain and loss are apportioned and the association shall acquire and
have all rights and remedies allowed by law in behalf of the
remaining members against the estate or funds of the insolvent
insurer for funds due the association.
Section 38-77-1470. The joint underwriting association is
governed by a board of seven directors, one of whom is appointed
by the Governor to represent the general public and four of whom
are appointed by the Governor and represent automobile insurers
who are members of the association. Two directors, appointed by
the Governor, must be agents authorized to represent automobile
insurers licensed to do business in this State.
The approved plan of operation of the association may make
provision for combining insurers under common ownership or
management into groups for voting, assessment, and all other
purposes and may provide that not more than one of the officers or
employees of such a group may serve as a director at any one time.
The board of directors shall elect a chairman by majority vote and
he, or his designee, must preside at all meetings of the board.
Section 38-77-1480. Any applicant for insurance through the
association or any insurer adversely affected, or claiming to be
adversely affected, by any ruling, action, or decision by or on
behalf of the association, may appeal to the Director of the
Department of Insurance within thirty days after the ruling, action,
or decision.
Section 38-77-1490. The association shall file with the director
or his designee annually by March first a statement containing
information with respect to its transactions, condition, operations,
and affairs during the preceding year. The statement shall contain
information prescribed by the director and must be in the form he
directs.
The director, at any reasonable time, may require the association
to furnish additional information concerning its transactions,
condition, or any matter connected therewith considered to be
material and of assistance in evaluating the scope, operations, and
experience of the association.
Section 38-77-1500. The Director of the Department of
Insurance or his designee shall make an examination into the
financial condition and affairs of the association at least annually
and shall file a report thereon with the Governor and the General
Assembly. The expenses of the examination must be paid by the
association."
SECTION 20. Section 38-73-455 of the 1976 Code, as last
amended by Act 128 of 1995, is further amended to read:
"Section 38-73-455. (A) An automobile insurer
shall offer two four different rates for automobile
insurance, a base rate as defined in Section 38-73-457 and an
objective standards rate which is twenty-five percent above the base
rate. Both All of these rates are subject to all
surcharges or discounts, if any, applicable under any approved merit
rating plan, credit, or discount plan promulgated by the
department or approved by the director or his designee.
(B) No later than ninety days after the passage of this act,
insurers of automobile insurance must file with the director or his
designee rates for personal protection policies as defined by Section
38-78-30 and revised rates for all other private passenger
automobile insurance policies written by them. Each insurer must
file:
(1) a `preferred' rate by driver classification and territory,
which is a rate less than the standard rate defined herein. This rate
applies to private passenger automobile insurance risks which
qualify for the safe driver discount; and
(2) a `standard' rate which must be the approved base rate
as defined in Section 38-73-457, by driver classification and
territory in effect on July 1, 1996. This rate applies to private
passenger automobile insurance risks which qualify for the safe
driver discount; and
(3) a `nonpreferred' rate by driver classification and
territory, which is a rate more than the standard rate but less than
the rate by driver classification and territory for the substandard rate
and is applicable to all private passenger automobile insurance risks;
and
(4) a `substandard' rate by driver classification and territory,
which is a rate more than the nonpreferred rate but less than or
equal to the substandard rate by driver classification and territory
for the South Carolina Joint Underwriting Association, as provided
for in Article 13 of Chapter 77 of Title 38, and is applicable to all
private passenger automobile risks.
(C) The director must approve the rates filed pursuant to
subsection (A). If the rates are approved, the rates shall become
effective for all policies of automobile insurance issued or renewed
with effective dates on or after October 1, 1996.
(D) Insurers may place any automobile insurance risk at any of
the four rate levels without restriction unless provided otherwise in
this chapter. An insurer or agent shall provide written notice to the
insurer of the tier at which coverage is being written for the insured
and the reasons the insured was written in that particular tier.
However, the Uniform Merit Rating Plan must continue to apply to
all risks written by them.
(E) An applicant and all operators of the insured automobile
who have qualified for the safe driver discount for the last five
years and who reside in the same household, and the automobile or
the automobile it replaced has been insured for liability or personal
protection coverage for the past twelve months must be written at
the preferred or standard rate and may not be ceded to the Joint
Underwriting Association. A driver who is claimed as a dependent
for income tax purposes is not required to meet the five-year
requirement as long as the dependent qualifies for the safe driver
discount.
(F) An applicant and all operators of the insured automobile
who have qualified for the safe driver discount for the last ten years
and who reside in the same household and the automobile or the
automobile it replaced has been insured for liability or personal
protection coverage for the past twelve months must be written at
the preferred rate and may not be ceded to the Joint Underwriting
Association. A driver who is claimed as a dependent for income
tax purposes is not required to meet the ten-year requirement as
long as the dependent qualifies for the safe driver discount.
(G) All policies of automobile insurance issued or renewed
with effective dates on or after October 1, 1996, that are written by
automobile insurers designated pursuant to Section 38-77-590(A),
for risks written by them through producers designated pursuant to
that same section, and all policies ceded to the Joint Underwriting
Association by automobile insurers must be written at the rates
provided for in Section 38-77-1395. However, the Uniform Merit
Rating Plan must apply to all such risks.
(H) The Board of Directors of the association must file rates
by driver classification and territory for both the personal protection
policies as defined by Section 38-78-30, liability coverages, and
uninsured motorist coverage.
Applicants, or a current policyholder, seeking automobile
insurance with an insurer must be written at the base rate, unless
one of the conditions or factors in subitems (1) through (8) of item
(A) is present.
(A) The named insured or any operator who is not excluded
in accordance with Section 37-77-340 and who resides in the same
household or customarily operates an automobile insured under the
same policy, individually:
(1) has obtained a policy of automobile insurance or
continuation thereof through material misrepresentation within the
preceding thirty-six months; or
(2) has had convictions for driving violations on three or
more separate occasions within the thirty-six months immediately
preceding the effective date of coverage as reflected by the motor
vehicle record of each insured driver as maintained by the Motor
Vehicle Division of the Department of Revenue and Taxation; or
(3) has had two or more `chargeable' accidents within the
thirty-six months immediately preceding the effective date of
coverage. A `chargeable' accident is defined as one resulting in
bodily injury to any person in excess of three hundred dollars per
person, death, or damage to the property of the insured or other
person in excess of seven hundred fifty dollars. Accidents
occurring under the circumstances enumerated below are not
considered chargeable.
(a) The automobile was lawfully parked. An automobile
rolling from a parked position is not considered as lawfully parked
but is considered as operated by the last operator.
(b) The applicant or other operator or owner was
reimbursed by or on behalf of a person responsible for the accident
or has a judgment against this person.
(c) The automobile of an applicant or other operator was
struck in the rear by another vehicle and the applicant or other
operator has not been convicted of a moving traffic violation in
connection with the accident.
(d) The operator of the other automobile involved in the
accident was convicted of a moving traffic violation and the
applicant or other operator was not convicted of a moving traffic
violation in connection therewith.
(e) An automobile operated by the applicant or other
operator is damaged as a result of contact with a `hit and run'
driver, if the applicant or other operator so reports the accident to
the proper authority within twenty-four hours or, if the person is
injured, as soon as the person is physically able to do so.
(f) Accidents involving damage by contact with animals or
fowl.
(g) Accidents involving physical damage, limited to an
caused by flying gravel, missiles, or falling objects.
(h) Accidents occurring as a result of the operation of any
automobile in response to an emergency if the operator at the time
of the accident was responding to a call of duty as a paid or
volunteer member of any police or fire department, first aid squad,
or any law enforcement agency. This exception does not include an
accident occurring after the emergency situation ceases or after the
private passenger motor vehicle ceases to be used in response to the
emergency; or
(4) has had one `chargeable' accident and two convictions for
driving violations, all occurring on separate occasions, within the
thirty-six months immediately preceding the effective date of
coverage as reflected by the motor vehicle record of each insured
driver as maintained by the Motor Vehicle Division of the S. C.
Department of Revenue and Taxation; or
(5) has been convicted of or forfeited bail during the
thirty-six months immediately preceding the effective date of
coverage for operating a motor vehicle while in an intoxicated
condition or while under the influence of drugs; or
(6) has been convicted or forfeited bail during the thirty-six
months immediately preceding the effective date for:
(a) any felony involving the use of a motor vehicle;
(b) criminal negligence resulting in death, homicide, or
assault arising out of the operation of a motor vehicle;
(c) leaving the scene of an accident without stopping to
report;
(d) theft or unlawful taking of a motor vehicle;
(e) operating during a period of revocation or suspension
of registration or license;
(f) Knowingly permitting an unlicensed person to drive;
(g) reckless driving;
(h) the making of material false statements in the
application for licenses or registration;
(i) impersonating an applicant for license or registration or
procuring a license or registration through impersonation, whether
for himself or another;
(j) filing of a false or fraudulent claim or knowingly
aiding or abetting another in the presentation of such a claim;
(k) failure to stop a motor vehicle when signaled by means
or a siren or flashing light by a law enforcement vehicle; or
(7) has for thirty or more consecutive days during the twelve
months immediately preceding the effective date of coverage,
owned or operated the automobile to be insured (or if newly
acquired, the automobile it replaces) without liability coverage in
violation of the laws of this State; or
(8) has used the insured automobile as follows or if the
insured automobile is:
(a) used in carrying passengers for hire or compensation,
except that the use of an automobile for a car pool must not be
considered use of an automobile for hire or compensation;
(b) used in the business of transportation of flammables or
explosives;
(c) used in illegal operation; or
(d) no longer principally used and garaged within the State,
but not to include students who are operating a motor vehicle
registered in this State while attending an institution located in
another state.
(B) In the event that one or more of the conditions or factors
prescribed in items (1) through (8) of subsection (A) exist, the
motor vehicle customarily operated by that individual must be
written at the objective standards rate.
(C) (I) Member companies of an affiliated group
of automobile insurers may not utilize different filed rates
for automobile insurance coverages which they are mandated by
law to write. For the purpose of this section, an affiliated
group of automobile insurers includes a group of automobile
insurers under common ownership, management, or control.
Those automobile insurers designated pursuant to Section
38-77-590(a), for automobile insurance risks written by them
through producers designated by the facility governing board
pursuant to that section, shall utilize the rates or premium charges
by coverage filed and authorized for use by the rating organization
licensed by the director or his designee pursuant to Article 11,
Chapter 73 of this title, which has the largest number of members
or subscribers for automobile insurance rates. However, those
automobile insurers designated pursuant to Section 38-77-590(a) are
not required to use those same rates or premium charges described
in the preceding sentence for risks written by them through their
authorized agents not appointed pursuant to Section 38-77-590.
(D) (J) An automobile insurance policy may
be endorsed at any time during the policy period to reflect the
correct rate or premium applicable by reason of the factors or
conditions described in subsection (A) which existed prior to the
commencement of the policy period in which the endorsement is
made, regardless of whether the factors or conditions were known
or disclosed to the insurer at the commencement of the policy
period. However, no No policy may be endorsed
during a policy period to reflect factors or conditions occurring
during that policy period. A policy may be endorsed during a
policy period to recognize the addition or deletion of an operator or
vehicle.
(E) For purposes of determining the applicable rates to be
charged an insured, an automobile insurer shall obtain and review
an applicant's motor vehicle record."
SECTION 21. Section 38-77-920 of the 1976 Code, as last
amended by Section 828 of Act 181 of 1993, is further amended to
read:
"Section 38-77-920. Except as provided for in Section
38-77-110 and as is specifically provided for otherwise by law, no
automobile insurer may refuse acceptance of bodily injury
liability and property damage liability automobile insurance for
an insurable risk from any applicant nor require that certain classes
or types of risks be placed through some particular agent or
employee. This section is not intended to preclude any insurer
from recognizing and giving effect to the property rights of agents
in expirations or renewals.
No agent who represents more than one insurer of bodily
injury liability and property damage liability automobile
insurance may refuse to accept in behalf of an insurer represented
by him bodily injury liability and property damage liability
automobile insurance for an insurable risk where the applicant for
insurance designates by name or description the insurer of his
choice. If the applicant relies upon the skill and judgment of the
agent to place the risk in any insurer represented by the agent, the
agent may place the risk in the insurer which he considers
appropriate. No insurer may agree, collude, or conspire with an
agent or give, offer, or promise an agent anything of value to place
any risk or any class or type of risk under such circumstances in
another insurer. Every such agreement is utterly void and every act
of collusion or conspiracy constitutes an act of unfair competition
by both the insurer and agent which, if proved, must result in the
suspension or revocation of the license of each for not less than one
year, in addition to any other penalties or liabilities applicable.
No automobile insurer authorized to transact bodily injury
liability and property damage liability automobile insurance in
this State which offers bodily injury liability and property
damage liability automobile insurance through the mails or uses
the mails in transacting bodily injury liability and property
damage liability automobile insurance on insurable risks situate
in this State may restrict its mailings or offerings to certain
counties, areas, or zip-code territories of this State. The director or
his designee is directed to examine an insurer's records at any time
the director or his designee considers it necessary to determine that
the insurer is not so restricting or limiting its offerings."
SECTION 22. Section 56-10-270 of the 1976 Code is amended
to read:
"Section 56-10-270. (a) Any person knowingly operating
an uninsured motor vehicle subject to registration in this State or
any person knowingly allowing the operation of an uninsured motor
vehicle subject to registration in this State is guilty of a
misdemeanor and, upon conviction, must be punished as
follows:
(1) for a first offense, fined not less than one
two hundred dollars nor more than two
three hundred dollars or imprisoned for thirty days or
may be ordered to perform up to fifty public service hours, or a
combination of these, and,
(2) upon conviction of a second offense, be fined
two three hundred dollars or imprisoned for thirty
days or perform up to one hundred public service hours, or a
combination of these, or both, and
(3) for a third and subsequent offenses must be
imprisoned for not less than forty-five days nor more than six
months and be fined up to four hundred dollars or serve up to
two hundred public service hours, or a combination of these.
Only convictions which occurred within five years including and
immediately preceding the date of the last conviction constitute
prior convictions within the meaning of this section. An uninsured
motor vehicle includes an insured vehicle with respect to which the
operator has been excluded from coverage pursuant to the
provisions of Section 38-77-340.
(b) The department upon receipt of information to the effect
that any person has been convicted of violating subsection (a) of
this section shall suspend the driving privilege and all license plates
and registration certificates issued in the person's name for a period
of thirty days for a first offense, for a period of ninety days for
a second offense, and for a period of six months for a third and
each subsequent offense. and may not reinstate that
The person's privileges may not be reinstated until
proof of financial responsibility has been filed.
(c) Any person whose license plates and registration
certificates which are suspended as provided in this section, which
are not suspended for any other reason, may have them immediately
restored, if he files proof of financial responsibility with the
department."
SECTION 23. The 1976 Code is amended by adding:
"Section 38-77-116. Upon issuance of a new private
passenger automobile insurance policy, the insurance company or
agent must review with the new applicant a list of driving offenses
and the related fine and punishment, as well as the possible increase
in the rates, the effect of any surcharges, or the effect of the loss of
the safe driver discount. This list must be on a form approved by
the Director of the Department of Insurance and must accompany
the policy."
SECTION 24. After September 30, 1996, the governing board of
the Joint Underwriting Association, enacted pursuant to Article 13
of Chapter 77 of Title 38 of the 1976 Code as contained in this act,
shall contract with one or more insurers or business entities to serve
as the designated carrier and shall establish a procedure for the
selection of the designated carrier. In developing this procedure,
the board must establish criteria which will assure the designated
carrier's ability to adequately provide policy-writing and claims
service. However, the board may not require that the designated
carrier be a licensed insurance company. Designated carrier
contracts must be for a period of three years and must be awarded
upon the terms and conditions for competitive sealed bidding as
provided in Section 11-35-1520 of the 1976 Code.
If the designated carrier fails two claims audits, including a
re-audit, within the contract term, the designated carrier is
disqualified for renewal of its contract with the facility upon
expiration of its existing contract. Designated carrier contracts
awarded pursuant to this section must provide that the failure of
two claims audits, including a re-audit, during the contract term
constitutes a material breach of the contract. After July 1, 1996,
the governing board of the association may not designate any new
producers.
Commissions paid to agents for policies ceded to or placed in the
Joint Underwriting Association must be set by the association's
board of directors.
SECTION 25. Section 38-77-111 of the 1976 Code, as added by
Act 148 of 1989, is amended to read:
"Section 38-77-111. An automobile insurer may cede the
coverages of an automobile insurance policy that it is mandated to
write to the Reinsurance Facility Joint Underwriting
Association but it may not cede coverages under a policy that it
is not mandated by law to write except for tort liability and
personal protection coverages and uninsured motorist coverage for
those risks that do not qualify for the safe driver discount.
However, if an insurer cedes a coverage it is mandated to write by
law, it shall cede all coverages under that policy that it is mandated
to write."
SECTION 26. Article 5 of Chapter 77 of Title 38 of the 1976
Code and Sections 38-73-1420, 38-73-1425, 38-77-285, 38-77-920,
38-77-940, 38-77-950, and 38-77-960 are repealed on October 1,
1996.
SECTION 27. If any provision of this act or the application
thereof to any person or circumstance is held to be unconstitutional
or otherwise invalid, the remainder of this act and the application of
such provision to other persons or circumstances are not affected
thereby, and it is to be conclusively presumed that the General
Assembly would have enacted the remainder of this act without
such invalid or unconstitutional provision, except that if Section
38-78-110 or Section 38-78-120 is found to be unconstitutional or
invalid it is to be conclusively presumed that the General Assembly
would not have enacted the remainder of this act without such
limitations, and the entire act is invalid. If Section 38-78-110 is
found to be unconstitutional or invalid, personal protection insurers
have no obligation to pay personal protection benefits with respect
to accidents occurring on or after the date of the finding of such
unconstitutionality or invalidity and, in addition, are subrogated to
all of the rights of personal protection insureds for all previous such
benefits paid.
SECTION 28. The development of the initial physical damage
loss components for automobile insurance coverages required by
Section 38-73-775 of the 1976 Code, as added by Section 2 of this
act, must be filed and approved by October 1, 1996, and this filing
is not required to comply with the otherwise applicable provisions
of the Administrative Procedures Act.
SECTION 29. Except as otherwise specifically provided herein,
this act takes effect upon approval by the Governor.
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