S 0125 General Bill, By McConnell, Courtney, Hayes, Jackson, Matthews, 
Passailaigue, Patterson and Reese

Similar(S 254, H 3357)
 A BILL TO AMEND SECTION 56-9-20, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA,
 1976, RELATING TO THE MOTOR VEHICLE RESPONSIBILITY ACT AND DEFINITIONS, SO AS
 TO PROVIDE A DEFINITION FOR UNINSURED MOTORIST FUND.-SHORT TITLE

   01/14/97  Senate Introduced and read first time SJ-124
   01/14/97  Senate Referred to Committee on Banking and Insurance SJ-124

A BILL

TO AMEND SECTION 56-9-20, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE MOTOR VEHICLE FINANCIAL RESPONSIBILITY ACT AND DEFINITIONS, SO AS TO PROVIDE A DEFINITION FOR "UNINSURED MOTORIST FUND"; TO AMEND CHAPTER 10, TITLE 56, RELATING TO MOTOR VEHICLE REGISTRATION AND FINANCIAL SECURITY, BY ADDING ARTICLE 5 SO AS TO PROVIDE FOR THE ESTABLISHMENT OF AN UNINSURED MOTORIST FUND; TO AMEND SECTION 38-73-470, AS AMENDED, RELATING TO PROPERTY, CASUALTY, AND INLAND MARINE INSURANCE, SURETY RATES, RATE-MAKING ORGANIZATIONS, AND DISPOSITION OF THE UNINSURED MOTORIST PREMIUM, SO AS TO, AMONG OTHER THINGS, PROVIDE THAT ONE DOLLAR OF THE YEARLY PREMIUM BE PLACED ON DEPOSIT WITH THE STATE TREASURER IN THE "UNINSURED ENFORCEMENT FUND"; TO AMEND SECTION 38-73-910, AS AMENDED, RELATING TO INSURANCE, RATES, RATE-MAKING, RATE FILING, AND NOTICE OF HEARING AS A PREREQUISITE TO GRANTING OF RATE INCREASES AND EXCEPTIONS, SO AS TO, AMONG OTHER THINGS, DELETE "AUTOMOBILE INSURANCE" FROM THE LIST OF LINES OR TYPES OF INSURANCE FOR WHICH IT IS PROVIDED THAT NO INCREASE IN PREMIUM RATES MAY BE GRANTED UNDER CERTAIN CONDITIONS AND CIRCUMSTANCES, AND PROVIDE THAT, EXCEPT AS PROVIDED IN THIS SECTION, OVERALL AVERAGE RATE LEVEL INCREASES OR DECREASES FOR ALL COVERAGES COMBINED OF SEVEN PERCENT ABOVE OR BELOW THE INSURER'S RATES IN EFFECT MAY TAKE EFFECT WITHOUT PRIOR APPROVAL WITH RESPECT TO RATES FOR AUTOMOBILE INSURANCE POLICIES; BY ADDING SECTION 38-73-736 SO AS TO PROVIDE THAT ANY SCHEDULE OF RATES, RATE CLASSIFICATIONS, OR RATING PLANS FOR AUTOMOBILE INSURANCE AS DEFINED IN SECTION 38-77-30 FILED WITH THE DEPARTMENT OF INSURANCE MUST PROVIDE FOR AN APPROPRIATE REDUCTION IN PREMIUM CHARGES FOR THOSE INSURED PERSONS WHO ARE FIFTY-FIVE YEARS OF AGE AND OLDER AND WHO QUALIFY AS PROVIDED IN SECTION 38-73-737; TO AMEND SECTION 38-77-10, AS AMENDED, RELATING TO THE DECLARATION OF THE PURPOSE OF THE AUTOMOBILE INSURANCE LAW, SO AS TO DELETE CERTAIN PROVISIONS AND LANGUAGE, AND PROVIDE, AMONG OTHER THINGS, THAT ONE OF THE PURPOSES IS TO PROVIDE FOR AN ASSIGNED RISK PLAN KNOWN AS THE "SOUTH CAROLINA AUTOMOBILE INSURANCE PLAN" FOR CERTAIN PERSONS; TO AMEND SECTION 38-77-30, AS AMENDED, RELATING TO AUTOMOBILE INSURANCE AND DEFINITIONS, SO AS TO, AMONG OTHER THINGS, DELETE CERTAIN DEFINITIONS AND PROVIDE DEFINITIONS FOR "CANCELLATION", "FACILITY PHYSICAL DAMAGE RATE", "INSTITUTIONAL SOURCE", "INSURER SUPPORT ORGANIZATION", AND "POLICY OF AUTOMOBILE INSURANCE"; BY ADDING SECTION 38-77-596 SO AS TO PROVIDE THAT THE GOVERNING BOARD OF THE SOUTH CAROLINA REINSURANCE FACILITY ANNUALLY SHALL DEVELOP AND FILE PRIVATE PASSENGER AUTOMOBILE 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; TO AMEND SECTION 38-77-112, AS AMENDED, RELATING TO THE AUTOMOBILE INSURANCE LAW, THE REQUIREMENT THAT AN APPLICANT FOR, OR POLICYHOLDER OF, SUCH INSURANCE HAVE A DRIVER'S LICENSE AND EXCEPTIONS SO AS TO, AMONG OTHER THINGS, REQUIRE THAT AT THE TIME OF APPLICATION AN INSURER OR AN AGENT RETAIN FOR A PERIOD OF THREE YEARS THE DRIVER'S LICENSE NUMBERS FOR ALL APPLICANTS WHO WERE REFUSED COVERAGE AND FURNISH THIS INFORMATION TO THE DIRECTOR OF THE DEPARTMENT OF INSURANCE OR HIS DESIGNEE UPON REQUEST; TO AMEND SECTION 38-77-120, AS AMENDED, RELATING TO REQUIREMENTS FOR NOTICE OF CANCELLATION OF OR REFUSAL TO RENEW AN AUTOMOBILE INSURANCE POLICY, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT THE REQUIRED NOTICE MUST PROVIDE FOR THE NOTIFICATION REQUIRED BY SECTION 38-77-390(B) AND PROVIDE FOR CERTAIN EXCEPTIONS; TO AMEND THE 1976 CODE BY ADDING SECTION 38-77-121 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT ANY APPLICATION FOR THE ORIGINAL ISSUANCE OF A POLICY OF AUTOMOBILE INSURANCE COVERING LIABILITY ARISING OUT OF THE OWNERSHIP, MAINTENANCE, OR USE OF ANY MOTOR VEHICLE AS DEFINED IN SECTION 38-77-30 MUST HAVE A CERTAIN STATEMENT PRINTED ON OR ATTACHED TO THE FIRST PAGE OF THE APPLICATION FORM; BY ADDING SECTION 38-77-122 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT NO INSURER OR AGENT SHALL REFUSE TO ISSUE AN AUTOMOBILE INSURANCE POLICY AS DEFINED IN SECTION 38-77-30 BECAUSE OF THE APPLICANT'S AGE, SEX, LOCATION OF RESIDENCE IN SOUTH CAROLINA, RACE, COLOR, CREED, NATIONAL ORIGIN, ANCESTRY, MARITAL STATUS, INCOME LEVEL, PREVIOUS REFUSAL OF AUTOMOBILE INSURANCE BY ANOTHER INSURER, PRIOR PURCHASE OF INSURANCE THROUGH THE SOUTH CAROLINA AUTOMOBILE INSURANCE PLAN, OR LAWFUL OCCUPATION, INCLUDING MILITARY SERVICE; BY ADDING SECTION 38-77-123 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT NO INSURER SHALL REFUSE TO RENEW AN AUTOMOBILE INSURANCE POLICY BECAUSE OF CERTAIN SPECIFIED FACTORS AND THAT NOTHING IN THIS SECTION REQUIRES AN INSURER TO RENEW A POLICY OF AUTOMOBILE INSURANCE WHERE THE INSURED'S OCCUPATION HAS CHANGED SO AS TO MATERIALLY INCREASE THE RISK; BY ADDING SECTION 38-77-124 SO AS TO PROVIDE THAT NO INSURER OR AGENT SHALL REFUSE TO ISSUE OR FAIL TO RENEW A POLICY OF MOTOR VEHICLE LIABILITY INSURANCE SOLELY BECAUSE OF THE AGE OF THE MOTOR VEHICLE TO BE INSURED SO LONG AS THE MOTOR VEHICLE IS LICENSED; BY ADDING SECTION 38-77-141 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT NO NEW POLICY OR ORIGINAL PREMIUM NOTICE OF INSURANCE COVERING LIABILITY ARISING OUT OF THE OWNERSHIP, MAINTENANCE, OR USE OF A MOTOR VEHICLE MAY BE ISSUED OR DELIVERED UNLESS IT CONTAINS A CERTAIN STATEMENT PRINTED IN BOLDFACE TYPE OR UNLESS THAT STATEMENT IS ATTACHED TO THE FRONT OF OR IS ENCLOSED WITH THE POLICY OR PREMIUM NOTICE; BY ADDING SECTION 38-77-142 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT NO POLICY OR CONTRACT OF BODILY INJURED OR PROPERTY DAMAGE LIABILITY INSURANCE COVERING LIABILITY ARISING FROM THE OWNERSHIP, MAINTENANCE, OR USE OF A MOTOR VEHICLE MAY BE ISSUED OR DELIVERED IN SOUTH CAROLINA TO THE OWNER OF THE VEHICLE OR MAY BE ISSUED OR DELIVERED BY AN INSURER LICENSED IN SOUTH CAROLINA UPON A MOTOR VEHICLE THAT IS PRINCIPALLY GARAGED, DOCKED, OR USED IN THIS STATE UNLESS THE POLICY CONTAINS A PROVISION INSURING THE NAMED INSURED AND ANY OTHER PERSON USING OR RESPONSIBLE FOR THE USE OF THE MOTOR VEHICLE WITH THE EXPRESSED OR IMPLIED CONSENT OF THE NAMED INSURED AGAINST LIABILITY FOR DEATH OR INJURY SUSTAINED OR LOSS OR DAMAGE INCURRED WITHIN THE COVERAGE OF THE POLICY OR CONTRACT AS A RESULT OF NEGLIGENCE IN THE OPERATION OR USE OF THE VEHICLE BY THE NAMED INSURED OR BY ANY SUCH PERSON; BY ADDING SECTION 38-77-143 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT A POLICY OR CONTRACT OF BODILY INJURY OR PROPERTY DAMAGE LIABILITY INSURANCE RELATING TO THE OWNERSHIP, MAINTENANCE, OR USE OF A MOTOR VEHICLE EXCLUDES COVERAGE TO PERSONS OTHER THAN THE NAMED INSURED OR DIRECTORS, STOCKHOLDERS, PARTNERS, AGENTS, OR EMPLOYEES OF THE NAMED INSURED, OR RESIDENTS OF THE HOUSEHOLD OF EITHER OF THESE GROUPS WHILE THOSE PERSONS ARE EMPLOYED OR OTHERWISE ENGAGED IN THE BUSINESS OF SELLING, REPAIRING, SERVICING, STORING, OR PARKING MOTOR VEHICLES IF THERE IS ANY OTHER VALID OR COLLECTIBLE INSURANCE APPLICABLE TO THE SAME LOSS COVERING THE PERSONS UNDER A POLICY WITH LIMITS AT LEAST EQUAL TO THE FINANCIAL RESPONSIBILITY REQUIREMENTS SPECIFIED IN SECTION 38-77-140; BY ADDING SECTION 38-77-151 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT ALL FUNDS COLLECTED BY THE DIRECTOR OF THE DEPARTMENT OF REVENUE UNDER CHAPTER 10, TITLE 56 MUST BE PLACED ON DEPOSIT WITH THE STATE TREASURER AND HELD IN A SPECIAL FUND TO BE KNOWN AS THE "UNINSURED MOTORISTS FUND" TO BE DISBURSED AS PROVIDED BY LAW; BY ADDING SECTION 38-77-154 SO AS TO PROVIDE THAT THE UNINSURED MOTORISTS FUND SHALL BE UNDER THE SUPERVISION AND CONTROL OF THE DEPARTMENT OF INSURANCE, REQUIRE PAYMENTS FROM THIS FUND TO BE MADE ON WARRANTS OF THE COMPTROLLER GENERAL ISSUED ON VOUCHERS SIGNED BY A PERSON DESIGNATED BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE, AND SET FORTH THE PURPOSE OF THE FUND; BY ADDING SECTION 38-77-155 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT THE DIRECTOR OF THE DEPARTMENT OF INSURANCE SHALL DISTRIBUTE MONIES ANNUALLY FROM THE UNINSURED MOTORISTS FUND AMONG THE SEVERAL INSURERS WRITING MOTOR VEHICLE BODILY INJURY AND PROPERTY DAMAGE LIABILITY INSURANCE ON MOTOR VEHICLES REGISTERED IN SOUTH CAROLINA; TO AMEND SECTION 38-77-140, RELATING TO BODILY INJURY AND PROPERTY DAMAGE LIMITS UNDER THE AUTOMOBILE INSURANCE LAW, SO AS TO RAISE THE MINIMUM LIMITS OF COVERAGE FOR INJURY TO OR DESTRUCTION OF PROPERTY OF OTHERS IN ANY ONE ACCIDENT; TO AMEND SECTION 38-77-150, AS AMENDED, RELATING TO AUTOMOBILE INSURANCE, THE UNINSURED MOTORIST PROVISION, AND DEFENSE OF AN ACTION BY THE INSURER, SO AS TO PROVIDE FOR A MINIMUM OF TEN THOUSAND RATHER THAN FIVE THOUSAND DOLLARS COVERAGE FOR INJURY TO OR DESTRUCTION OF THE PROPERTY OF THE INSURED IN ANY ONE ACCIDENT, AND PROVIDE THAT BENEFITS PAID PURSUANT TO THIS SECTION ARE SUBJECT TO SUBROGATION AND ASSIGNMENT IF AN UNINSURED MOTORIST HAS SELECTED THE OPTION TO BE UNINSURED BY PAYING THE FEE PURSUANT TO SECTION 56-10-510; TO AMEND SECTION 38-77-280, AS AMENDED, RELATING TO THE PROVISIONS FOR COLLISION COVERAGE AND COMPREHENSIVE COVERAGE UNDER THE AUTOMOBILE INSURANCE LAW, SO AS TO DELETE CERTAIN PROVISIONS AND LANGUAGE, AND MAKE THE PROVISIONS OF THE SECTION APPLICABLE TO "ANY AUTOMOBILE INSURER", AND TO AMEND THE SAME SECTION FOR THE PERIOD JANUARY 1 TO SEPTEMBER 30, 1998, SO AS TO PROVIDE THAT ALL AUTOMOBILE INSURERS, INCLUDING THOSE WRITING PRIVATE PASSENGER PHYSICAL DAMAGE COVERAGES ONLY, 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, EXCEPT FOR REASONS SPECIFIED IN SECTION 38-77-123, AT THE RATES AND UNDER THE RULES AS HAVE BEEN APPROVED BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE; TO AMEND SECTION 38-77-350, AS AMENDED, RELATING TO AUTOMOBILE INSURANCE AND THE FORM REQUIRED TO BE USED IN THE OFFERING OF OPTIONAL COVERAGES, SO AS TO DELETE CERTAIN PROVISIONS, INCLUDING THE PROVISION REGARDING POLICIES OF INSURANCE OFFERED OR ISSUED BY A NEW SERVICING CARRIER FOR THE REINSURANCE FACILITY TO REPLACE POLICIES PREVIOUSLY ISSUED BY A FORMER SERVICING CARRIER AND CONTAINING THE SAME COVERAGE LIMITS AS THE FORMER POLICIES; BY ADDING SECTION 38-77-370 SO AS TO PROVIDE THAT IF AN INDIVIDUAL, AFTER PROPER IDENTIFICATION, SUBMITS A WRITTEN REQUEST TO AN INSURANCE-SUPPORT ORGANIZATION FOR ACCESS TO RECORDED PERSONAL INFORMATION ABOUT THE INDIVIDUAL THAT IS REASONABLY DESCRIBED BY THE INDIVIDUAL AND ABLE TO BE LOCATED AND RETRIEVED BY THE INSURANCE-SUPPORT ORGANIZATION, THE INSURANCE-SUPPORT ORGANIZATION, WITHIN THIRTY BUSINESS DAYS FROM THE DATE THE REQUEST IS RECEIVED, SHALL TAKE CERTAIN ACTION, AND PROVIDE FOR RELATED AND INCIDENTAL MATTERS; BY ADDING SECTION 38-77-390 SO AS TO PROVIDE THAT IN THE EVENT OF A CANCELLATION OR NONRENEWAL OF AN AUTOMOBILE INSURANCE POLICY, INCLUDING CANCELLATIONS OR NONRENEWALS THAT INVOLVE POLICIES REFERRED TO IN SECTION 38-77-120, THE INSURER OR AGENT RESPONSIBLE FOR THE CANCELLATION OR NONRENEWAL SHALL GIVE CERTAIN WRITTEN NOTICE IN A FORM APPROVED BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE TO THE APPLICANT, POLICYHOLDER, OR INDIVIDUAL PROPOSED FOR COVERAGE, AND PROVIDE FOR RELATED AND INCIDENTAL MATTERS; TO AMEND SECTION 38-77-530, AS AMENDED, RELATING TO THE PLAN OF OPERATION OF THE REINSURANCE FACILITY, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT THE PLAN MUST COMMENCE RECOUPMENT OF FACILITY ASSESSMENTS BY WAY OF A SURCHARGE ON PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE BUSINESS ISSUED BY A MEMBER OR THROUGH THE FACILITY, THAT THE SURCHARGE MUST BE A PERCENTAGE OF THE PREMIUM ADOPTED BY THE GOVERNING BOARD OF THE FACILITY, THAT THE CHARGES DETERMINED ON THE BASIS OF THE SURCHARGE MUST BE DISPLAYED AS A PART OF THE APPLICABLE PREMIUM CHARGES, AND THAT THE FACILITY SHALL CONVERT TO THE PERCENTAGE-OF-PREMIUM BASIS OF RECOUPMENT BY MARCH 1, 1998; TO AMEND SECTION 38-77-590, AS AMENDED, RELATING TO THE REINSURANCE FACILITY AND DESIGNATED PRODUCERS, SO AS TO DELETE CERTAIN PROVISIONS, AND PROVIDE THAT A PRODUCER DESIGNATED UNDER THIS SECTION MAY NOT WRITE NEW PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE INSURANCE BUSINESS TO BE PLACED IN THE FACILITY AFTER MARCH 1, 1998, AND THAT A POLICY WITH AN EFFECTIVE DATE AFTER MARCH 1, 2001 SHALL NOT BE ACCEPTED BY THE FACILITY; TO AMEND SECTION 38-77-595, RELATING TO THE SOUTH CAROLINA REINSURANCE FACILITY AND CONDITIONS FOR DESIGNATION OF AN OTHERWISE INELIGIBLE APPLICANT FOR "DESIGNATED PRODUCER", SO AS TO PROVIDE THAT A PRODUCER DESIGNATED UNDER THIS SECTION MAY NOT WRITE NEW PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE INSURANCE BUSINESS TO BE PLACED IN THE FACILITY AFTER MARCH 1, 1998, AND THAT A POLICY WITH AN EFFECTIVE DATE AFTER MARCH 1, 2001 SHALL NOT BE ACCEPTED BY THE FACILITY; TO AMEND CHAPTER 77, TITLE 38, RELATING TO AUTOMOBILE INSURANCE, BY ADDING ARTICLE 8 SO AS TO ENACT PROVISIONS OF LAW CONCERNING "ASSIGNMENT OF RISKS"; TO PROVIDE THAT BEGINNING MARCH 1, 1998, INSURERS MAY NONRENEW A POLICY OF INSURANCE THAT THEY HAVE CURRENTLY CEDED TO THE SOUTH CAROLINA REINSURANCE FACILITY, AND PROVIDE THAT THIS PROVISION DOES NOT APPLY TO BUSINESS WRITTEN THROUGH THE DESIGNATED PRODUCERS; TO REPEAL ARTICLE 5 CHAPTER 77, TITLE 38, RELATING TO THE SOUTH CAROLINA REINSURANCE FACILITY AND DESIGNATED PRODUCERS, EFFECTIVE JANUARY 1, 2005; TO REPEAL SECTION 38-73-450, RELATING TO THE FAIRNESS OF AUTOMOBILE INSURANCE RATES OR PREMIUM CHARGES AND BURDEN ON THE INSURER TO PROVE FAIRNESS, SECTION 38-73-455, RELATING TO AUTOMOBILE INSURANCE RATES, SECTION 38-73-457, RELATING TO THE REQUIREMENT UPON AUTOMOBILE INSURERS AND RATING ORGANIZATIONS TO FILE INFORMATION ON BASE RATES, SECTION 38-73-460, RELATING TO THE EFFECT OF GAINS AND LOSSES INCURRED BY MEMBER INSURERS OF THE REINSURANCE FACILITY ON RATES FOR AUTOMOBILE INSURANCE, SECTION 38-73-465, RELATING TO AUTOMOBILE INSURANCE AND UNFAIRLY DISCRIMINATORY, EXCESSIVE, OR UNREASONABLE PROFITS OR RATES, SECTION 38-73-720, RELATING TO INSURANCE, THE STATE RATING AND STATISTICAL DIVISION, AND THE POWER TO ESTABLISH RISK AND TERRITORIAL CLASSIFICATIONS, SECTION 38-73-730, RELATING TO INSURANCE, THE STATE RATING AND STATISTICAL DIVISION, AND RISK CLASSIFICATION PLANS, SECTION 38-73-731, RELATING TO INSURANCE, THE STATE RATING AND STATISTICAL DIVISION, REMOVAL FROM THE YOUTHFUL DRIVER CLASSIFICATION, AND REFUND OF EXCESS PREMIUM PAID, SECTION 38-73-735, RELATING TO INSURANCE, THE STATE RATING AND STATISTICAL DIVISION, AND THE PLAN FOR CREDITS AND DISCOUNTS, SECTION 38-73-750, RELATING TO THE REQUIREMENT THAT AUTOMOBILE INSURERS FILE WITH THE STATE RATING AND STATISTICAL DIVISION THEIR PLANS OR SYSTEMS FOR ALLOCATING EXPENSES AND PROFIT AS RESPECTS THE VARIOUS KINDS OR TYPES OF AUTOMOBILE INSURANCE RISKS AND THE CLASSES OF RISKS THEREUNDER, SECTION 38-73-760, RELATING TO INSURANCE, THE STATE-RATING AND STATISTICAL DIVISION, AND UNIFORM STATISTICAL PLANS, SECTION 38-73-770, RELATING TO INSURANCE AND THE REQUIREMENT THAT EVERY CLASSIFICATION PLAN PROMULGATED BY THE DEPARTMENT OF INSURANCE BE SO STRUCTURED AS TO PRODUCE RATES OR PREMIUM CHARGES WHICH ARE ADEQUATE, NOT EXCESSIVE, AND NOT UNFAIRLY DISCRIMINATORY, SECTION 38-73-775, RELATING TO THE ANNUAL FILING OF THE PHYSICAL DAMAGE LOSS COMPONENT BY THE SOUTH CAROLINA REINSURANCE FACILITY, SECTION 38-77-110, RELATING TO THE "MANDATE TO WRITE", AUTOMOBILE INSURANCE COVERAGE, THE REQUIREMENT UPON INSURERS TO INSURE, AND EXCEPTIONS, SECTION 38-77-111, RELATING TO AUTOMOBILE INSURANCE POLICIES WHICH MAY BE CEDED TO THE REINSURANCE FACILITY, SECTION 38-77-115, RELATING TO THE AUTOMOBILE INSURANCE LAW AND THE SIGNS REQUIRED IN AN AGENT'S PLACE OF BUSINESS, SECTION 38-77-145, RELATING TO THE AUTOMOBILE INSURANCE LAW AND THE PROVISION THAT PERSONAL INJURY PROTECTION COVERAGE IS NOT MANDATED, SECTION 38-77-285, RELATING TO THE REQUIREMENT THAT ALL AUTOMOBILE INSURANCE COVERAGES ARE TO BE IN ONE POLICY, SECTION 38-77-360, RELATING TO THE PROHIBITION AGAINST AN INCREASE IN AUTOMOBILE INSURANCE PREMIUMS AFTER CERTAIN FIRST-OFFENSE VIOLATIONS, SECTION 38-77-600, RELATING TO AUTOMOBILE INSURANCE AND THE REINSURANCE FACILITY RECOUPMENT CHARGE, SECTION 38-77-605, RELATING TO THE REQUIREMENT THAT THE REINSURANCE FACILITY RECOUPMENT CHARGE MUST BE DISPLAYED IN A CERTAIN MANNER IN INSURANCE PREMIUM NOTICES OR BILLS, SECTION 38-77-610, RELATING TO AUTOMOBILE INSURANCE AND THE FILING OF REINSURANCE FACILITY RECOUPMENT CHARGES, SECTION 38-77-620, RELATING TO AUTOMOBILE INSURANCE AND THE INCLUSION OF FACILITY RECOUPMENT CHARGES IN AUTOMOBILE INSURANCE RATES, SECTION 38-77-625, RELATING TO THE PROVISION THAT IF AN INSURED IS INVOLVED IN A MOTOR VEHICLE ACCIDENT WHERE HE IS NOT THE AT-FAULT DRIVER, HIS REINSURANCE FACILITY RECOUPMENT CHARGE MAY NOT BE INCREASED BY HIS INSURER BECAUSE OF THIS OCCURRENCE, AND ARTICLE 9, CHAPTER 77, TITLE 38, RELATING TO THE AUTOMOBILE INSURANCE LAW AND CERTAIN UNLAWFUL ACTS; AND TO PROVIDE THAT NONRENEWAL NOTICES MAY BE SENT BEFORE MARCH 1, 1998 FOR AUTOMOBILE INSURANCE POLICIES RENEWING ON OR AFTER THAT DATE.

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

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

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

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

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

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

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

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

(1) licensed in the State; or

(2) subject to registration in the State;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 4. Section 38-73-910 of the 1976 Code, as last amended by Acts 300, 360, and 378 of 1996, is further amended to read:

"Section 38-73-910. (A) No increase in the premium rates may be granted for automobile, workers' compensation, fire, allied lines, and homeowners' insurance, nor for any other line or type of insurance with respect to which the director or his designee has, by order, made a finding that (a) legal or other compulsion upon the part of the insured to purchase the insurance interferes with competition, or (b) under prevailing circumstances there does not exist substantial competition, unless notice is given in all newspapers of general, statewide circulation at least thirty days in advance of the insurer's proposed effective date of the increase in premium rates. The notice shall state the amount of increase, the type and line of coverage, and the proposed effective date and shall allow any insured or affected party to request within fifteen days a public hearing upon the propriety of the rate increase request before the Administrative Law Judge Division. A copy of the notice must be sent to the Consumer Advocate.

However, the requirements of public notices and public hearings in this section do not apply to applications for rate increases when the applicant insurer had earned premiums in this State in the previous calendar year of less than two million dollars for the line or type of insurance for which the rate increase is sought or, if the rate increase is sought by a rating organization, the earned premiums in this State for all members and subscribers of the organization for whom an increase is sought were less than two million dollars for the previous calendar year for the line or type of insurance for which the rate increase is sought. The two million dollars must be increased by a factor equal to the increase in the consumer price index, all items, every three years.

However, a private insurer licensed to underwrite essential property insurance as defined by Section 38-75-310(1), notwithstanding any limitations included within this title, may file and use, pursuant to the provisions of Section 38-73-1095, any rates which result in insurance premium rates of ninety percent, or less, of the insurance premium rates then approved for the South Carolina Wind and Hail Underwriting Association for use within the coastal area of South Carolina as defined by Section 38-75-310(5).

(B) Except as provided in subsection (C) of this section, overall average rate level increases or decreases, for all coverages combined, of seven percent above or below the insurer's rates in effect may take effect without prior approval with respect to rates for automobile insurance policies.

(C) Notwithstanding any other provisions of this chapter, for any policies governed by this section, filings that produce rate level changes within the limitation specified in subsection (B) of this section becomes effective without prior approval; provided, however, that (1) no more than one rate increase within the limitation specified in subsection (B) of this section may be implemented during any twelve-month period and (2) no rate increase within the limitation specified in subsection (B) of this section may be implemented until the onset of the new policy period and unless the insurer, at least thirty days in advance of the end of the policy period, mails or delivers to the named insured, at the address shown in the policy, a written notice of its intention to change the rate. The specific reason or reasons for the rate change must be stated in, or must accompany, the notice.

(D) The Director of the Department of Insurance or his designee shall promulgate regulations implementing the provisions of this section.

(E) On or before March 31, 2001, the Director of the Department of Insurance or his designee shall report to the General Assembly on the effectiveness of flexible rating for automobile insurance policies. The report must analyze the impact of flexible rating on:

(1) the extent and nature of competition;

(2) size and significance of coverage;

(3) level and range or rates and rate changes among insurers;

(4) extent of consumer complaints to the Department of Insurance;

(5) volume of cancellations and nonrenewals;

(6) changes in the number of policies by territory and by class, including age and sex, in each territory; and

(7) the number of new insured, nonrenewed insured and business written by each insurer.

(F) This section must cease to be of any force or effect after June 30, 2001."

SECTION 5. The 1976 Code is amended by adding:

"Section 38-73-736. Any schedule of rates, rate classifications, or rating plans for automobile insurance as defined in Section 38-77-30 filed with the Department of Insurance must provide for an appropriate reduction in premium charges for those insured persons who are fifty-five years of age and older and who qualify as provided in Section 38-73-737."

SECTION 6. Section 38-77-10 of the 1976 Code, as last amended by Act 326 of 1996, is further amended to read:

"Section 38-77-10. In order to effect a complete reform of automobile insurance and insurance practices in South Carolina, the purposes of this chapter are to provide:

(1) To provide that every automobile insurance risk which is insurable on the basis of the criteria established in this chapter is entitled to bodily injury liability and property damage liability automobile insurance from the automobile insurer of the applicant's choice on the basis of the same rates, policy forms, claims service, and other services provided by the insurer to all other applicants or insureds falling within the classification of risk and territory under the applicable risk and territorial classification plan promulgated by the department so long as all these applicants or insureds have satisfied the same objective standards as established in Sections 38-77-280 and 38-73-455;

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

(3) To provide prohibitions and penalties in respect to unfairly discriminatory or unfairly competitive practices having as their purpose or effect evasion of the statutory mandate of coverage provided in this chapter or imposing an undue or unfair burden upon other automobile insurers through excessive utilization of the Facility. of the coverages as provided in this chapter; and

(4) To provide medical, surgical, funeral, and disability insurance benefits without regard to fault to be offered under automobile insurance policies that provide bodily injury and property damage liability insurance, or other security, for motor vehicles registered in this State."

SECTION 7. Section 38-77-30 of the 1976 Code, as last amended by Act 326 of 1996, is further amended to read:

"Section 38-77-30. As used in this chapter, unless the context requires otherwise:

(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.

(2) 'Automobile insurer' means an insurer licensed to do business in South Carolina and authorized to issue automobile insurance policies.

(3) 'Bodily injury' includes death resulting therefrom.

(3.5) 'Cancellation' or 'to cancel' means a termination of a policy during the policy period.

(4) 'Damages' includes both actual and punitive damages.

(4.5) '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.

(5) 'Facility' means the unincorporated, nonprofit, legal entity created by this chapter to reinsure policies of automobile insurance known as the South Carolina Reinsurance Facility.

(5.5)(a) 'Individual private passenger automobile' means the following types of motor vehicles owned by or leased under a long-term contract by an individual or individuals:

(i) motor vehicles of the private passenger type or station wagon type;

(ii) panel trucks, delivery sedans, vehicles with a pickup body, vans, or similar motor vehicles designed for use on streets and highways and so licensed; and

(iii) motor homes, so long as the motor vehicles described in (ii) and (iii) are not used in the occupation, profession, or business of the insured other than farming and ranching.; and

(iv) motorcycles, motor-driven cycles, motor scooters, and mopeds.

(b) A motor vehicle is not considered 'owned by or leased under a long-term contract by an individual or individuals' if the motor vehicle is owned by a partnership or corporation, unless the motor vehicle is owned by a farm family copartnership or a farm family corporation and is garaged principally on a farm or ranch.

(c) A motor vehicle is not considered 'used in the occupation, profession, or business of the insured', because it is used in the course of driving to and from work.

(d) Individual private passenger automobile does not include:

(i) motor vehicles that are used for public or livery conveyance or rented to others without a driver;

(ii) fire department vehicles, police vehicles, ambulances, and rescue squad vehicles which are publicly owned;

(iii) motorcycles, motor-driven cycles, motor scooters, and mopeds;

(iv) dune buggies, all terrain vehicles, go carts, and snowmobiles;

(v)(iv) golf carts; and

(vi)(v) small commercial risks.

(6) 'Institutional source' means any person or governmental entity that provides information about an individual to an agent, insurer, or insurance-support organization other than:

(a) an agent;

(b) the individual who is the subject of the information; or

(c) a natural person acting in a personal capacity rather than in a business or professional capacity.

(7) 'Insured' means the named insured and, while resident of the same household, the spouse of any named insured and relatives of either, while in a motor vehicle or otherwise, and any person who uses with the consent, expressed or implied, of the named insured the motor vehicle to which the policy applies and a guest in the motor vehicle to which the policy applies or the personal representative of any of the above.

(8) 'Insurer-support organization' means any person who regularly engages, in whole or in part, in the practice of assembling or collecting information about natural persons for the primary purpose of providing the information to an insurer or agent for insurance transactions, including (i) the furnishing of consumer reports or investigative consumer reports to an insurer or agent for use in connection with an insurance transaction or (ii) the collection of personal information from insurers, agents, or other insurance-support organizations for the purpose of detecting or preventing fraud, material misrepresentation, or material nondisclosure in connection with insurance underwriting or insurance claim activity. However, the following persons shall not be considered insurance-support organizations for purposes of this chapter: agents, governmental institutions, insurers, rating organizations, medical care institutions, and medical professionals.

(7)(9) 'Motor vehicle' means every self-propelled vehicle which is designed for use upon a highway, including trailers and semitrailers designed for use with these vehicles but excepting traction engines, road rollers, farm trailers, tractor cranes, power shovels and well-drillers, and every vehicle which is propelled by electric power obtained from overhead wires but not operated upon rails. For purposes of this chapter, the term automobile has the same meaning as motor vehicle.

(8)(10) 'Nonpayment of premium' means failure of the named insured to pay when due any of his obligations in connection with the payment of premiums on a policy, or any installment of the premium, whether the premium is payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit, or failure to maintain membership in an organization if membership is a condition precedent to insurance coverage.

(10.5) 'Policy of automobile insurance' or 'policy' means a policy or contract for bodily injury or property damage liability insurance issued or delivered in this State covering liability arising from the ownership, maintenance, or use of any motor vehicle, insuring as the named insured one individual or husband and wife who are residents of the same household, and under which the insured vehicle designated in the policy is either:

(a) a motor vehicle of a private passenger, station wagon, or motorcycle type that is not used commercially, rented to others, or used as a public or livery conveyance where the terms 'public or livery conveyance' do not include car pools, or

(b) any other four-wheel motor vehicle which is not used in the occupation, profession, or business, other than farming, of the insured, or as a public or livery conveyance, or rented to others. The term 'policy of automobile insurance' or 'policy' does not include:

(i) any policy issued through the South Carolina Automobile Insurance Plan,

(ii) any policy covering the operation of a garage, sales agency, repair shop, service station, or public parking place,

(iii) any policy providing insurance only on an excess basis, or

(iv) any other contract providing insurance to the named insured even though the contract may incidentally provide insurance on motor vehicles.

(9)(11) 'Quota share reinsurance' means that form of reinsurance in which the reinsurer assumes a fixed percentage of the insured risk.

(10)(12) 'Renewal' or 'to renew' means the issuance and delivery by an insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer, the renewal policy to provide types and limits of coverage at least equal to those contained in the policy being superseded, or the issuance and delivery of a certificate or notice extending the terms of a policy beyond its policy period or term with types and limits of coverage at least equal to those contained in the policy being extended. However, any policy with a policy period or term of less than six months or any period with no fixed expiration date is considered as if written for successive policy periods or terms of six months.

(11)(13) 'Small commercial risk' means:

(a) Garage risks including nonmotor vehicle insurance when written in combination with automobile liability coverage.

(b) Ambulance risks.

(c) Commercial risks which have a load capacity less than ten thousand pounds and are not required to have a mandatory filing by a governmental authority other than an SR-22.

(d) Church buses used by a church to transport adults or children to and from services and in activities incidental to church functions, so long as a mandatory filing by any governmental authority other than an SR-22 is not required.

(e) Privately owned school buses used to carry school children and students, their parents or guardians, members of the faculty, school board members, nurses, doctors, and dentists, as well as guests in connection with any school activity and operations incidental thereto, including games, outings, and similar road trips, so long as a mandatory filing by any governmental authority other than an SR-22 is not required.

'Small commercial risk' does not include pulpwood trucks or dump trucks.

(12) 'Specialized insurer' means an insurer which specializes in certain types of business such as, but without limitation on the generality, commercial automobile business, and which may be relieved, with the approval of the director or his designee, of the obligation to write types of business inconsistent with this specialty, such as private passenger automobile business. However, no insurer may be approved as a specialized insurer or continue to be so approved unless it accepts all insurable risks falling within the types of business to which it confines its writings without distinctions among applicants or policyholders as to policy forms, terms, rates or services other than as the distinctions are reflected in the approved rating plan for the classification of risks. No insurer may be approved as a specialized insurer because it specializes in or purports to specialize in select or preferred risks. A specialized insurer may not cede risks to the Reinsurance Facility and thus does not recoup losses of the facility. Specialized insurers may be excused from using the merit rating plan and the uniform classification and territorial plans upon approval by the director or his designee.

(13)(14) 'Uninsured motor vehicle' means a motor vehicle as to which:

(a) there is not bodily injury liability insurance and property damage liability insurance both at least in the amounts specified in Section 38-77-140, or

(b) there is nominally that insurance, but the insurer writing the same successfully denies coverage thereunder, or

(c) there was that insurance, but the insurer who wrote the same is declared insolvent, or is in delinquency proceedings, suspension, or receivership, or is proven unable fully to respond to a judgment, and

(d) there is no bond or deposit of cash or securities in lieu of the bodily injury and property damage liability insurance.

(e) the owner of the motor vehicle has not qualified as a self-insurer in accordance with the applicable provisions of law.

A motor vehicle is considered uninsured if the owner or operator is unknown. However, recovery under the uninsured motorist provision is subject to the conditions set forth in this chapter.

Any motor vehicle owned by the State or any of its political subdivisions is considered an uninsured motor vehicle when the vehicle is operated by a person without proper authorization.

(14)(15) 'Underinsured motor vehicle' means a motor vehicle as to which there is bodily injury liability insurance or a bond applicable at the time of the accident in an amount of at least that specified in Section 38-77-140 and the amount of the insurance or bond is less than the amount of the insureds' damages."

SECTION 8. The 1976 Code is amended by adding:

"Section 38-77-596. (A) The governing board of the South Carolina Reinsurance Facility annually shall develop and file private passenger automobile 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 adopted by the facility. Nothing in this section precludes the governing board of the 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, difference in driving records.

(C) The governing board of the facility annually shall review the private passenger automobile loss components to determine if they are actuarially-sound and supported by the statistical evidence. If rate changes are required, the governing board shall submit appropriate filings for approval with the director. Rate increases must be capped at an overall ten percent increase each year. This cap does not apply on an individual insured basis. These rate filings are subject to public hearing pursuant to applicable provisions of the Administrative Procedures Act."

SECTION 9. Section 38-77-112 of the 1976 Code, as last amended by Act 148 of 1989, is further amended to read:

"Section 38-77-112. Notwithstanding Sections 38-77-110, 38-77-920, and Section 38-77-280, no automobile insurer is required to write coverage for automobile insurance as defined in Section 38-77-30 for any applicant or existing policyholder who does not at the time of application or renewal possess a valid South Carolina motor vehicle or special restricted driver's license. At the time of application, an insurer or an agent shall retain, for a period of three years, the driver's license numbers for all applicants who were refused coverage and shall furnish such information upon the request of the Director of the Department of Insurance or his designee. This section does not apply to an individual who is handicapped and who owns a vehicle in this State but who does not have a valid driver's license. If an automobile is principally garaged and operated in this State, the owner of the vehicle must can be offered coverage thereon regardless of whether or not he possesses a valid South Carolina driver's license if he designates to the insurer who the principal operator of the vehicle will be and this person has a valid South Carolina driver's license or otherwise meets the requirements of this section. This requirement does not apply to personnel of the Armed Forces of the United States on active duty and officially stationed in this State who possess a valid motor vehicle driver's license issued by another state or territory of the United States or the District of Columbia. This requirement is waived ninety days for individuals who move into South Carolina with the intent of making South Carolina their place of residence if they possess a valid driver's license issued by another state or territory of the United States or the District of Columbia."

SECTION 10. Section 38-77-120(a) of the 1976 Code, as last amended by Section 806 of Act 181 of 1993, is further amended to read:

"(a) No cancellation or refusal to renew by an insurer of a policy of automobile insurance is effective unless the insurer delivers or mails, to the named insured at the address shown in the policy, a written notice of the cancellation or refusal to renew. This notice:

(1) must be approved as to form by the director or his designee prior to before use;

(2) shall must state the date not less than fifteen days after the date of the mailing or delivering on which the cancellation or refusal to renew becomes effective;

(3) shall must state the specific reason or reasons of the insurer for cancellation or refusal to renew and provide for the notification required by subsection (B) of Section 38-77-390. However, those notification requirements must not apply when the policy is being canceled or not renewed for the reason set forth in Section 38-77-123(B),

(4) must inform the insured of his right to request in writing within fifteen days of the receipt of notice that the director review the action of the insurer. The notice of cancellation or refusal to renew must contain the following statement to inform the insured of such right:

Nothing in this subsection prohibits any insurer or agent from including in the notice of cancellation or refusal to renew, any additional disclosure statements required by state or federal laws, or any additional information relating to the availability of other insurance."

SECTION 11. The 1976 Code is amended by adding:

"Section 38-77-121. (A) Any application for the original issuance of a policy of insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle as defined in Section 38-77-30 must have the following statement printed on or attached to the first page of the application form, in boldface type: 'READ YOUR POLICY. THE POLICY OF INSURANCE FOR WHICH THIS APPLICATION IS BEING MADE, IF ISSUED, MAY BE CANCELED WITHOUT CAUSE AT THE OPTION OF THE INSURER AT ANY TIME IN THE FIRST 90 DAYS DURING WHICH IT IS IN EFFECT AND AT ANY TIME THEREAFTER FOR REASONS STATED IN THE POLICY.'

(B) Any application for the original issuance of a policy of insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle defined in Section 38-77-30 that requires the insured to disclose information as to any previous cancellation or refusal to renew must also permit the insured to offer or provide a full explanation of the reason for the cancellation or refusal to renew.

(C) The notice required by this section must be given by the insurer to any applicant within ten days of the application in the event the applicant is not provided a written copy of the application and the coverage has been bound by such insurer.

This section does not apply to the renewal of any policy of insurance.

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

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

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

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

(a) age;

(b) sex;

(c) location of residence in this State;

(d) race;

(e) color;

(f) creed;

(g) national origin;

(h) ancestry;

(i) marital status;

(j) income level;

(k) lawful occupation, including the military service;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 38-77-141. No new policy or original premium notice of insurance covering liability arising out of the ownership, maintenance, or use of a motor vehicle may be issued or delivered unless it contains the following statement printed in boldface type, or unless the statement is attached to the front of or is enclosed with the policy or premium notice:

IN ADDITION TO THE INSURANCE COVERAGE REQUIRED BY LAW TO PROTECT YOU AGAINST A LOSS CAUSED BY AN UNINSURED MOTORIST, IF YOU HAVE PURCHASED LIABILITY INSURANCE COVERAGE THAT IS HIGHER THAN THAT REQUIRED BY LAW TO PROTECT YOU AGAINST LIABILITY ARISING OUT OF THE OWNERSHIP, MAINTENANCE, OR USE OF THE MOTOR VEHICLES COVERED BY THIS POLICY, AND YOU HAVE NOT ALREADY PURCHASED UNINSURED MOTORIST INSURANCE COVERAGE EQUAL TO YOUR LIABILITY INSURANCE COVERAGE:

(1) YOUR UNINSURED AND UNDERINSURED MOTORIST INSURANCE COVERAGE HAS INCREASED TO THE LIMITS OF YOUR LIABILITY COVERAGE AND THIS INCREASE WILL COST YOU AN EXTRA PREMIUM CHARGE; AND

(2) YOUR TOTAL PREMIUM CHARGE FOR YOUR MOTOR VEHICLE INSURANCE COVERAGE WILL INCREASE IF YOU DO NOT NOTIFY YOUR AGENT OR INSURER OF YOUR DESIRE TO REDUCE COVERAGE WITHIN TWENTY DAYS OF THE MAILING OF THE POLICY OR THE PREMIUM NOTICE, AS THE CASE MAY BE;

(3) IF THIS IS A NEW POLICY AND YOU HAVE ALREADY SIGNED A WRITTEN REJECTION OF SUCH HIGHER LIMITS IN CONNECTION WITH IT, PARAGRAPHS (1) AND (2) OF THIS NOTICE DO NOT APPLY.'

After twenty days, the insurer is relieved of the obligation imposed by this subsection to attach or imprint the foregoing statement to any subsequently delivered renewal policy, extension certificate, other written statement of coverage continuance, or to any subsequently mailed premium notice.

Section 38-77-142. (A) No policy or contract of bodily injury or property damage liability insurance covering liability arising from the ownership, maintenance, or use of a motor vehicle may be issued or delivered in this State to the owner of the vehicle or may be issued or delivered by an insurer licensed in this State upon a motor vehicle that is principally garaged, docked, or used in this State unless the policy contains a provision insuring the named insured and any other person using or responsible for the use of the motor vehicle with the expressed or implied consent of the named insured against liability for death or injury sustained or loss or damage incurred within the coverage of the policy or contract as a result of negligence in the operation or use of the vehicle by the named insured or by any such person. Each policy or contract of liability insurance, or endorsement to the policy or contract, insuring private passenger automobiles principally garaged, docked, or used in this State, that has as the named insured an individual or husband and wife and that includes, with respect to any liability insurance provided by the policy, contract, or endorsement for use of a nonowned automobile a provision requiring permission or consent of the owner of the automobile for the insurance to apply, must be construed to include permission or consent of the custodian in the provision requiring permission or consent of the owner.

(B) No policy or contract of bodily injury or property damage liability insurance relating to the ownership, maintenance, or use of a motor vehicle may be issued or delivered in this State to the owner of a vehicle or may be issued or delivered by an insurer licensed in this State upon a motor vehicle principally garaged or used in this State without an endorsement or provision insuring the named insured, and any other person using or responsible for the use of the motor vehicle with the expressed or implied consent of the named insured, against liability for death or injury sustained, or loss or damage incurred within the coverage of the policy or contract as a result of negligence in the operation or use of the motor vehicle by the named insured or by any other person. This provision applies notwithstanding the failure or refusal of the named insured or other person to cooperate with the insurer under the terms of the policy. If the failure or refusal to cooperate prejudices the insurer in the defense of an action for damages arising from the operation or use of the insured motor vehicle, then the endorsement or provision is void. If an insurer has actual notice of a motion for judgment or complaint having been served on an insured, the mere failure of the insured to turn the motion or complaint over to the insurer may not be a defense to the insurer, nor void the endorsement or provision, nor in any way relieve the insurer of its obligations to the insured, provided the insured otherwise cooperates and in no way prejudices the insurer.

Where the insurer has elected to provide a defense to its insured under such circumstances and files responsive pleadings in the name of its insured, the insured is not subject to sanctions for failure to comply with discovery pursuant to the South Carolina Rules of Civil Procedure unless it can be shown that the suit papers actually reached the insured, and that the insurer has failed after exercising due diligence to locate its insured, and as long as the insurer provides such information in response to discovery as it can without the assistance of the insured.

(C) Any endorsement, provision, or rider attached to or included in any policy of insurance which purports or seeks to limit or reduce the coverage afforded by the provisions required by this section is void.

Section 38-77-143. A policy or contract of bodily injury or property damage liability insurance relating to the ownership, maintenance, or use of a motor vehicle excludes coverage to persons other than (i) the named insured, or (ii) directors, stockholders, partners, agents, or employees of the named insured, or (iii) residents of the household of either (i) or (ii), while those persons are employed or otherwise engaged in the business of selling, repairing, servicing, storing, or parking motor vehicles if there is any other valid or collectible insurance applicable to the same loss covering the persons under a policy with limits at least equal to the financial responsibility requirements specified in Section 38-77-140.

If the other valid and collectible insurance has limits less than the financial responsibility requirements specified in Section 38-77-140, then the coverage afforded a person other than the named insured while that person is employed or otherwise engaged in the business of selling, repairing, servicing, storing, or parking motor vehicles is applicable to the extent necessary to equal the financial responsibility requirements specified in Section 38-77-140.

If there is no other valid and collectible insurance available, the coverage afforded a person other than the named insured while that person is employed or otherwise engaged in the business of selling, repairing, servicing, storing, or parking motor vehicles must apply, but the amount recoverable must not exceed the financial responsibility requirements specified in Section 38-77-140.

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

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

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

SECTION 12. Section 38-77-140 of the 1976 Code is amended to read:

"Section 38-77-140. 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 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 ten 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."

SECTION 13. 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 damages from the owner or operator of an uninsured motor vehicle, within limits which may be no less than the requirements of Section 38-77-140. The uninsured motorist provision must also provide for no less than five ten 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. The director or his designee may prescribe the form to be used in providing uninsured motorist coverage and when prescribed and promulgated no other form may be used.

(B) 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.

(C) Benefits paid pursuant to this section are subject to subrogation and assignment if an uninsured motorist has selected the option to be uninsured by paying the fee pursuant to Section 56-10-510."

SECTION 14. A. Section 38-77-280 of the 1976 Code, as last amended by Act 326 of 1996, is further amended to read:

"Section 38-77-280. (A) All automobile insurers, including those insurance companies writing private passenger physical damage coverages only, Any automobile insurer may, at their its 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.

(B) 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 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. 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)(D) 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."

B. From January 1, 1998 to September 30, 1998, Section 38-77-280(A) of the 1976 Code, as last amended by Act 326 of 1996, is further amended to read:

"(A) All automobile insurers, including those insurance companies writing private passenger physical damage coverages only, 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, except for reasons specified in Section 38-77-123, 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."

SECTION 15. Section 38-77-350(C) of the 1976 Code, as last amended by Act 496 of 1994, is further amended to read:

"(C) An automobile insurer is not required to make a new offer of coverage on any automobile insurance policy which renews, extends, changes, supersedes, or replaces an existing policy. However, the first renewal notices for existing policies after December 1, 1989, must include the form provided in subsection (A). A policy of automobile insurance offered or issued by a new servicing carrier for the South Carolina Reinsurance Facility to replace a policy previously issued by a former servicing carrier and containing the same coverage limits as the former policy constitutes a valid replacement policy that does not require the new servicing carrier or agent to make a new offer of coverage or to obtain a new application from the insured."

SECTION 16. The 1976 Code is amended by adding:

"Section 38-77-370. (A) If an individual, after proper identification, submits a written request to an insurance-support organization for access to recorded personal information about the individual that is reasonably described by the individual and reasonably able to be located and retrieved by the insurance-support organization, the insurance-support organization, within thirty business days from the date the request is received shall:

(1) inform the individual of the nature and substance of the recorded personal information in writing, by telephone, or by other oral communication, whichever the insurance-support organization prefers;

(2) permit the individual to see and obtain a copy of the recorded personal information pertaining to him or to obtain a copy of the recorded personal information by mail, whichever the individual prefers, unless the recorded personal information is in coded form, in which case an accurate translation in plain language must be provided in writing;

(3) disclose to the individual the identity, if recorded, of those persons to whom the insurance-support organization has disclosed the personal information within two years before the request, and if the identity is not recorded, the names of those insurance-support organizations or other persons to whom the information is disclosed normally; and

(4) provide the individual with a summary of the procedures by which he may request correction, amendment, or deletion of recorded personal information.

(B) Any personal information provided pursuant to subsection (A) of this section must identify the source of the information if it is an institutional source.

(C) Medical record information supplied by a medical care institution or medical professional and requested under subsection (A) of this section, together with the identity of the medical professional or medical care institution that provided the information, must be supplied either directly to the individual or to a medical professional designated by the individual and licensed to provide medical care with respect to the condition to which the information relates, whichever the insurer, agent, or insurance-support organization prefers. If it elects to disclose the information to a medical professional designated by the individual, the insurer, agent, or insurance-support organization shall notify the individual, at the time of the disclosure, that it has provided the information to the medical professional.

(D) Except for personal information provided under this Section, an insurer, agent, or insurance-support organization may charge a reasonable fee to cover the costs incurred in providing a copy of recorded personal information to individuals.

(E) The obligations imposed by this section upon an insurer or agent may be satisfied by another insurer or agent authorized to act on its behalf. With respect to the copying and disclosure of recorded personal information pursuant to a request under subsection (A) of this section, an insurer, agent, or insurance-support organization may make arrangements with an insurance-support organization or a consumer reporting agency to copy and disclose recorded personal information on its behalf.

(F) The rights granted to individuals in this section must extend to all natural persons to the extent information about them is collected and maintained by an insurer, agent, or insurance-support organization in connection with an insurance transaction. The rights granted to all natural persons by this subsection must not extend to information about them that relates to and is collected in connection with or in reasonable anticipation of a claim or civil or criminal proceeding involving them.

(G) For purposes of this section, 'insurance-support organization' does not include 'consumer reporting agency'.

Section 38-77-390. (A) In the event of a cancellation or nonrenewal, including those that involve policies referred to in Section 38-77-120, the insurer or agent responsible for the cancellation or nonrenewal shall give a written notice in a form approved by the director that:

(1) either provides the applicant, policyholder, or individual proposed for coverage with the specific reason or reasons for the cancellation or nonrenewal in writing or advises the person that upon written request he may receive the specific reason or reasons in writing; and

(2) provides the applicant, policyholder, or individual proposed for coverage with a summary of the rights established under subsection (B) of this section and Section 38-77-380.

(B) Upon receipt of a written request within ninety business days from the date of the mailing of notice or other communication of a cancellation or nonrenewal to an applicant, policyholder, or individual proposed for coverage, the insurer or agent shall furnish to the person within twenty-one business days from the date of receipt of the written request:

(1) the specific reason or reasons for the cancellation or nonrenewal in writing, if that information was not furnished initially in writing pursuant to subsection (A)(1);

(2) the specific items of personal and privileged information that support those reasons; however:

(a) the insurer or agent shall not be required to furnish specific items of privileged information if it has a reasonable suspicion, based upon specific information available for review by the director, that the applicant, policyholder, or individual proposed for coverage has engaged in criminal activity, fraud, material misrepresentation, or material nondisclosure; and

(b) specific items of medical-record information supplied by a medical-care institution or medical professional must be disclosed either directly to the individual about whom the information relates or to a medical professional designated by the individual and licensed to provide medical care with respect to the condition to which the information relates, whichever the insurer or agent prefers; and

(3) the names and addresses of the institutional sources that supplied the specific items of information given pursuant to subsection (B)(2) of this section. However, the identity of any medical professional or medical-care institution must be disclosed either directly to the individual or to the designated medical professional, whichever the insurer or agent prefers.

(C) The obligations imposed by this section upon an insurer or agent may be satisfied by another insurer or agent authorized to act on its behalf. However, the insurer or agent making the cancellation or nonrenewal shall remain responsible for compliance with the obligations imposed by this section.

(D) When a cancellation or nonrenewal results solely from an oral request or inquiry, the explanation of reasons and summary of rights required by subsection (A) of this section may be given orally."

SECTION 17. Section 38-77-530 of the 1976 Code, as last amended by Section 818 of Act 181 of 1993, is further amended to read:

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

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

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

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

(1) Any recoupment charge paid by policyholders must be considered premium for the purpose of calculating premium taxes and commissions and is subject to normal policy cancellation procedures.

(2) Any net operating gains resulting from the operation of the facility must be retained by the facility, and the gains and any investment income derived from the gains must be used to offset future operating losses.

(3) The total funds recouped by all insurers less commission and premium tax expenses and time value of money considerations must be paid to the Reinsurance Facility in accordance with the plan of operation. The governing board shall redistribute the funds to the insurers based upon each insurer's share of the Reinsurance Facility losses. Recoupment must be used solely for the purpose of recovering past facility operating deficits. The plan of operation must provide that the amount ultimately received by an individual company is not more than the company's share of the Reinsurance Facility losses, plus the time value of money.

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

SECTION 18. Section 38-77-590 of the 1976 Code, as last amended by Sections 821-825 of Act 181 of 1993, is further amended to read:

"Section 38-77-590. (a) Not more than six months after July 9, 1974, or at an earlier time as the director or his designee considers necessary by reason of complaints regarding want of access to automobile insurance in particular areas or want of outlets for producers, the director or his designee shall survey the various areas of the State to ascertain if sufficient marketing outlets exist in all areas or are available to all producers. Upon a finding by the director or his designee that insufficient marketing outlets exist in particular areas or that certain producers have been deprived of a market for risks previously serviced by them, the director or his designee may, after consultation with the facility, designate one or more insurers to service the areas through agents appointed by them or may designate the producers as the agents of any insurer. The arrangements shall must include provision for one hundred percent quota share reinsurance through the facility of any automobile insurance policy marketed through the arrangements, at the option of the insurer, and the reinsurance is not subject to the statutory provisions or regulations regarding excessive utilization of the facility.

(b) After the effective date of this section, those producers previously designated by the director or his designee may continue to serve in that capacity under the jurisdiction and control of the governing board of the facility, except that any change in the rate of commissions allowed designated producers is subject to the approval of the director or his designee.

(c) A producer may be designated by the governing board of the facility upon application for designation and is eligible for designation upon a finding by the governing board that the applicant meets the following qualifications:

(1) The applicant has been, for ten continuous years, a licensed resident property and casualty insurance agent and agency owner or principal with authority from one or more licensed insurers to write liability and physical damage insurance on private passenger automobiles;

(2) At the time of application the applicant is servicing and owns the renewals on private passenger and commercial automobile insurance business, the net premiums on which exceeded seventy-five thousand dollars of potential cedeable automobile insurance during any one of the previous five calendar years preceding the application;

(3) Neither the applicant, nor any employee of the applicant or the applicant's corporate agency, nor any partner or shareholder in any related insurance agency, related premium service company, or related other business, has any direct or indirect connection with any voluntary market outlet for the purpose of writing any type of automobile insurance in this State except for motorcycle insurance and types not cedeable to the facility;

(4) The applicant has not contributed to his termination as agent by any insurer because of any illegal breach of agency agreement or other related, improper, or unethical conduct; and

(5) The books, records, and accounts of the insurance business of the applicant have been audited at the expense of the applicant and found by the governing board to be indicative of a financially sound operation.

(d) Prior to Before designation as a producer, the applicant shall furnish at his expense a bond in an amount of not less than fifty thousand dollars for the faithful performance of the duties as a producer, executed by the applicant as principal and a corporate surety licensed to do business in this State as surety, and shall also have effective errors and omissions insurance by an insurer licensed to do business in this State, with the bond and errors and omissions insurance being subject to approval by the governing board.

(e) The governing board shall assign a specific location to each producer designated. The governing board shall determine from the director or his designee the locations assigned by him to those producers whom the director or his designee has designated. Designated producers may not open or maintain any other locations without the written authorization of the governing board; provided, however, that an applicant maintaining multiple offices on June 4, 1987, is entitled to maintain two locations as a designated agent which he owned and operated at that time and through which premiums in at least the amount of seventy-five thousand dollars were written. The governing board shall terminate the designation, and the director or his designee shall revoke all agents' licenses of any producer who does not comply with this requirement upon demand by the governing board. Upon termination, the producer's expirations on designated business become the property of the facility.

(f) The designation of a producer by the director or his designee or the governing board is transferable to a spouse, child, parent, brother, or sister of the producer upon the designated producer's retirement, incapacity, or death. The duties of a designated producer may be performed by one or more qualified employees of the producer or the producer's corporate agency.

(g) Neither a designated producer, nor any employee of a designated producer or the producer's corporate agency, nor any partner or shareholder in any related insurance agency, related premium service company, or related other business, may have any direct or indirect connection with any voluntary market outlet for the purpose of writing any type of automobile insurance in this State except for motorcycle insurance and types not cedeable to the facility. The governing board shall terminate the designation of any producer, and the director or his designee shall revoke all licenses of the producer and of any other insurance agent and premium service company knowingly involved in this connection. Upon termination, the producer's expirations on designated business become the property of the facility.

(h) A designated carrier who fails a claims audit shall have no new designated producer assignments until the time it passes a re-audit within a reasonable time prescribed by the governing board. If this carrier fails two claims audits, including a re-audit, within any three-year period that carrier is disqualified for renewal of its contract with the facility upon expiration of its existing contract.

A producer designated under this section may not write new private passenger and commercial automobile insurance business to be placed in the facility after March 1, 1998. A policy with an effective date after March 1, 2001 shall not be accepted by the facility."

SECTION 19. Section 38-77-595 of the 1976 Code, as added by Act 524 of 1990, is amended by adding:

"A producer designated under this section may not write new private passenger and commercial automobile insurance business to be placed in the facility after March 1, 1998. A policy with an effective date after March 1, 2001 shall not be accepted by the facility."

SECTION 20. Title 38, Chapter 77 of the 1976 Code is amended by adding:

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

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

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

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

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

(1) refuse to assign an application;

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

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

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

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

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

(1) refusing to assign an application;

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

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

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

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

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

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

SECTION 21. Beginning March 1, 1998, insurers may nonrenew a policy that they have currently ceded to the South Carolina Reinsurance Facility. This provision does not apply to business written through the designated producers.

SECTION 22. Article 5 of Chapter 77, Title 38 of the 1976 Code is repealed effective January 1, 2005.

SECTION 23. Sections 38-73-450, 38-73-455, 38-73-457, 38-73-460, 38-73-465, 38-73-720, 38-73-730, 38-73-731, 38-73-735, 38-73-750, 38-73-760, 38-73-770, 38-73-775, 38-77-110, 38-77-111, 38-77-115, 38-77-145, 38-77-285, 38-77-360, 38-77-600, 38-77-605, 38-77-610, 38-77-620, and 38-77-625 and Article 9 of Chapter 77 of Title 38 of the 1976 Code are repealed.

SECTION 24. The provisions of this act take effect as follows: (a) Sections 1, 2, and 3 on February 1, 1998; (b) Sections 4 through 19 and Sections 21 and 23 on March 1, 1998; and (c) Sections 20 and 22 upon approval by the Governor, except as may be otherwise specifically provided in any of those sections.

Nonrenewal notices may be sent before March 1, 1998, for policies renewing on or after March 1, 1998.