H 3421 Session 110 (1993-1994)
H 3421 General Bill, By Cato
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
38-77-355 so as to provide that in a claim or action for personal injury or
wrongful death arising out of the ownership, operation, use, or maintenance of
a motor vehicle, the court shall admit into evidence the total amount paid to
the claimant from collateral sources; to amend Section 38-77-280, as amended,
relating to automobile insurance and to collision and comprehensive coverage,
so as to delete the current provisions and provide that notwithstanding
certain Sections, after a certain date automobile insurers may refuse to write
or renew private passenger automobile physical damage insurance coverage; to
amend Section 38-77-30, as amended, relating to the definition of "damages"
under the automobile insurance laws, so as to provide that the term includes
actual damages only; to amend Section 38-77-140, relating to automobile
insurance and bodily injury and property damage limits, so as to, among other
things, provide that an insurer shall also offer the insured a rider or
endorsement for an additional premium to cover liability for punitive damages;
to amend Section 38-77-150, relating to automobile insurance, the uninsured
motorist provision, and defense of an action by the insurer, so as to, among
other things, provide that insurers shall offer, at the option of the insured,
higher limits of uninsured motorist coverage in accordance with Section
38-77-350; to amend Section 38-77-160, as amended, relating to additional
uninsured motorist coverage, and underinsured motorist coverage, so as to,
among other things, provide that automobile insurers shall offer on a form
prescribed by the Chief Insurance Commissioner, at the option of the insured
in accordance with Section 38-77-350 underinsured motorist coverage up to the
limits selected for the insured's liability coverage to provide coverage in
the event the insured becomes legally entitled to collect damages from the
owner or operator of an underinsured motor vehicle; to amend Section 56-9-350,
relating to security following motor vehicle accidents, verification of
insurance coverage form to be issued following certain accidents, effect of
failure to return the form, and uninvestigated accidents, so as to, among
other things, provide that within fifteen days after an accident a written
report of the accident must be forwarded to the Department of Highways and
Public Transportation on a form prescribed by the Department; to amend Section
56-10-10, relating to motor vehicle registration and financial security and
the security required on registered vehicles, so as to delete certain
provisions and provide, among other things, that security must be maintained
on every motor vehicle required to be registered in South Carolina where the
owners or other operators not excluded in accordance with Section 38-77-340
reside in the same household and are insureds under the same policy, if one of
the ow
02/04/93 House Introduced and read first time HJ-32
02/04/93 House Referred to Committee on Judiciary HJ-37
02/10/93 House Recalled from Committee on Judiciary HJ-21
02/10/93 House Committed to Committee on Labor, Commerce and
Industry HJ-21
04/22/93 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-5
05/06/93 House Debate adjourned until Tuesday, May 11, 1993 HJ-40
05/11/93 House Debate adjourned until Wednesday, May 12, 1993 HJ-15
05/12/93 House Objection by Rep. Cobb-Hunter, White, Breeland,
Scott, HJ-14
05/12/93 House Objection by Rep. Inabinett & Anderson HJ-14
06/03/93 House Objection withdrawn by Rep. Inabinett HJ-91
03/01/94 House Objection withdrawn by Rep. Scott HJ-49
03/01/94 House Objection by Rep. Cato HJ-49
03/01/94 House Objection withdrawn by Rep. Breeland HJ-55
03/01/94 House Objection by Rep. Simrill, Corning, Robinson &
Kelley HJ-55
05/18/94 House Objection withdrawn by Rep. Corning HJ-33
Indicates Matter Stricken
Indicates New Matter
COMMITTEE REPORT
April 22, 1993
H. 3421
Introduced by REP. Cato
S. Printed 4/22/93--H.
Read the first time February 4, 1993.
THE COMMITTEE ON LABOR, COMMERCE AND
INDUSTRY
To whom was referred a Bill (H. 3421), to amend the Code of Laws
of South Carolina, 1976, by adding Section 38-77-355 so as to provide
that in a claim or action for personal injury or wrongful death arising out
of the ownership, operation, use, or maintenance of a motor vehicle, etc.,
respectfully
REPORT:
That they have duly and carefully considered the same, and
recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking all after the enacting
words and inserting:
/SECTION 1. Chapter 77 of Title 38 of the 1976 Code is amended
by adding:
"ARTICLE 13
Non-Economic Loss
Section 38-77-1200. As used in this article, unless the context
otherwise requires:
(A) `Accidental bodily injury' means bodily injury, sickness, or
disease, or death resulting therefrom, arising out of the ownership,
operation, or use of a motor vehicle, or while occupying such vehicle,
which is accidental as to the person insured.
(B) `Economic loss' means actual pecuniary loss and actual monetary
expenses incurred by or on behalf of an injured person as the result of
an accidental bodily injury consisting only of medical expense, work
loss, replacement services loss, and death benefits.
(C) `Injured person' means a person who sustains accidental bodily
injury when eligible for benefits under a policy of automobile insurance.
The term also includes, where appropriate, the personal representative
of an estate.
(D) `Intentional misconduct' means conduct whereby harm is
intentionally caused or attempted to be caused by one who acts or fails
to act for the purpose of causing harm or with knowledge that harm is
substantially certain to follow when such conduct caused or substantially
contributed to the harm claimed for. A person does not intentionally
cause or attempt to cause harm (1) merely because his or her act or
failure to act is done with the realization that it creates a grave risk of
causing harm or (2) if the act or omission causing bodily harm is for the
purpose of averting bodily harm to oneself or another person.
(E) `Motor vehicle' is defined by Section 38-77-30(7).
(F) `Noneconomic loss' means any loss other than economic loss and
includes, but is not necessarily limited to, pain, suffering, inconvenience,
physical impairment, mental anguish, emotional pain and suffering,
hedonic damages, and loss of any of the following: earning capacity,
consortium, society, companionship, comfort, protection, marital care,
parental care, filial care, attention, advice, counsel, training, guidance,
or education. Noneconomic loss does not include economic loss caused
by pain and suffering or by physical impairment.
(G) `Occupying' means to be in or upon a motor vehicle or engaged
in the immediate act of entering into or alighting from the motor vehicle.
(H) `Operation or use' means operation or use of a motor vehicle as
a motor vehicle, including, incident to its operation or use as a vehicle,
occupying it. Operation or use of a motor vehicle does not cover
conduct within the course of a business of manufacturing, selling, or
maintaining a motor vehicle, including repairing, servicing, washing,
loading, or unloading, nor does it include such conduct not within the
course of such a business, unless such conduct occurs while occupying
a motor vehicle.
(I) `Owner' means the person or persons, other than a lienholder or
secured party, who owns or has title to a motor vehicle or is entitled to
the use and possession of a motor vehicle subject to a security interest
held by another person. Owner does not include (i) a lessee under a
lease not intended as security, or (ii) the United States of America or any
agency thereof, except with respect to motor vehicles for which it has
elected to provide insurance.
(J) `Permanent' means an injury whose effects cannot be eliminated
by further time for recovery or by further treatment and care, including
surgery.
(K) `Person' includes an organization, public or private.
(L) `Replacement services loss' means expenses reasonably incurred
in obtaining ordinary and necessary services from others, not members
of the injured person's household, in lieu of those the injured person
would have performed for the benefit of the household. Replacement
services loss does not include any loss incurred after the death of an
injured person, and the disability period shall not exceed two years from
the date of the accident.
(M) `Serious' means only an injury which has a substantial bearing
on the injured person's ability to resume substantially all of his normal
activities and lifestyle.
(N) `Serious bodily injury' means an accidental bodily injury which
results in death, serious and permanent loss of an important bodily
function, permanent and serious bodily injury determined objectively
within reasonable medical probability, or serious and permanent
disfigurement.
Section 38-77-1210. In any action of tort brought against the owner,
registrant, operator, or occupant of a motor vehicle with respect to which
a policy of automobile insurance as defined in Section 38-77-30(1) is
applicable, or against any person or organization legally responsible for
his acts or omissions, a plaintiff may recover damages in tort for pain,
suffering, mental anguish, and inconvenience because of bodily injury,
sickness, or disease arising out of the ownership, maintenance,
operation, or use of such motor vehicle only in the event that the injury
reaches one of the following thresholds:
(1) the injury or disease consists in whole or in part of permanent
and serious disfigurement;
(2) permanent and serious bodily injury, determined objectively,
within reasonable medical probability;
(3) permanent and serious loss of an important bodily function;
(4) the actual economic loss exceeds the policy limits of the at-fault party; or
(5) death.
Section 38-77-1220. The provisions of this article are not applicable
if the motor vehicle operator was driving under the influence of alcohol
or illegal drugs or is guilty of intentional misconduct.
Section 38-77-1230. In any action where the defendant contends
that the plaintiff's injury does not meet the standards set forth in Section
38-77-1210, either party may seek summary judgment on that issue. If
a motion is made, the court may determine at least thirty days before the
date set for trial whether there is a material issue of fact as to whether
the injury meets the standards of Section 38-77-1210 or if not, render
summary judgment in accordance with the undisputed facts. If the facts
regarding the nature of the injury are undisputed, the question as to
whether or not the facts render the injury as meeting the standards of
Section 38-77-1210 is a question of law to be decided by the court. In
any action to be tried before a jury where the defendant contends the
plaintiff's injury is not a serious and permanent injury but the defendant
concedes or the court determines that there is a material issue of fact as
to whether the plaintiff's injury meets the standards of Section 38-77-1210 then, upon motion of the defendant, that issue shall be separately
tried and no other evidence as to plaintiff's noneconomic loss shall be
received until that issue has been resolved. After resolution of that
issue, the amount of the plaintiff's noneconomic loss may be tried before
the same jury or a different jury, as the court may in its discretion
decide."
SECTION 2. Section 38-77-280 of the 1976 Code, as last amended
by Act 113 of 1991, is further amended to read:
"Section 38-77-280. (A) Except as provided in subsection
(B), all automobile insurers, including those insurance companies
writing private passenger physical damage coverages only, shall
may make collision coverage and either comprehensive or fire,
theft, and combined additional coverage available to an insured or
qualified applicant who requests the coverage.
If collision coverage is offered or provided, it must
have a mandatory deductible of two hundred fifty dollars, but an insured
or qualified applicant, at his option, may select an additional deductible
in appropriate increments up to one thousand dollars.
If comprehensive coverage or fire, theft, and combined
additional coverages is offered or provided, it must have a
mandatory deductible of two hundred fifty dollars, but an insured, at his
option, may select an additional deductible in appropriate increments up
to one thousand dollars. This deductible does not apply to auto safety
glass. It is an unfair trade practice, as described in Section 38-57-30 and
38-57-40, for an insurer or an agent to sell collision insurance,
comprehensive coverage, or fire, theft, and combined additional
coverages unless the insured is notified at the time of application of the
savings which may be realized if the applicant or the insured selects a
higher deductible. This notice is required only at the time of the initial
sale and must be in a form approved by the Chief Insurance
Commissioner. An insurer may offer insureds lower deductibles at the
insurer's option.
(B) Notwithstanding subsection (A) and Section 38-77-110 and
38-77-920, automobile insurers may refuse to write automobile physical
damage insurance coverage, including automobile comprehensive
physical damage, collision, fire, theft, and combined additional
coverage, for an applicant or existing policyholder, on renewal, for a
motor vehicle customarily operated by an individual, either the named
insured or another operator not excluded in accordance with Section 38-77-340 and who resides in the same household, where one or more of the
conditions or factors prescribed in Section 38-73-455 exist. In addition,
automobile insurers may refuse to write physical damage insurance
coverage to an applicant or existing policyholder, on renewal, who has
collected benefits provided under automobile insurance physical damage
coverage during the thirty six months immediately preceding the
effective date of coverage, for two or more total fire losses or two or
more total theft losses. Automobile insurers may refuse to write
for private passenger automobiles physical damage insurance
coverage, including automobile comprehensive physical damage,
collision, fire, theft, and combined additional coverage, for an applicant
or existing policyholder, on renewal, for a motor vehicle customarily
operated by an individual, either the named insured or another operator
not excluded in accordance with Section 38-77-340 and who resides in
the same household, which does not qualify for the safe driver discount
in Section 38-73-760e.
All insurers subject to the provisions of this section writing single
interest collision coverage shall provide an applicant for the insurance
at the time of his application a notice separate and apart from any other
form used in the application. The notice must be signed by the applicant
evidencing his acknowledgment of having read the notice. The notice
must contain the following language printed in bold face type:
`NOTICE: THE INSURANCE COVERAGE YOU ARE HEREBY
PURCHASING IS ONLY SINGLE INTEREST COLLISION
COVERAGE. THE AMOUNT OF INSURANCE DECREASES AS
YOU PAY OFF THE AMOUNT OF YOUR INDEBTEDNESS.
YOU MAY NOT RECEIVE ANY INSURANCE PROCEEDS OVER
AND ABOVE THE AMOUNT OF THE OUTSTANDING
BALANCE ON YOUR LOAN.'
(C) Notwithstanding Section 38-77-110, automobile physical damage
coverage in an automobile insurance policy may be canceled at any time
during the policy period by reason of the factors or conditions described
in Section 38-73-455(A) or Section 38-77-280(B) 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 may be ceded to the facility.
(E) Insurers of automobile insurance may charge a rate for physical
damage insurance coverages different than from those
provided for in Section 38-73-457 if the rates are filed and approved by
the Chief Insurance Commissioner. Any applicant or existing
policyholder, to be charged this different rate, must be denied the
coverage pursuant to subsection (B) at the rate provided in Section 38-73-457.
(F) A carrier may not cede collision coverage, comprehensive
coverage, or fire, theft, and combined additional coverages with a
deductible of less than two hundred fifty dollars. An insured or qualified
applicant may select an additional deductible in appropriate increments
up to one thousand dollars. However, the mandatory deductible does not
apply to safety glass.
In determining the premium rates to be charged on automobile
insurance, it is unlawful to consider race, color, creed, religion, national
origin, ancestry, location of residence, occupation, or economic
status.
(G) An insurer or agent shall provide written notice to the
insured of the reason or reasons the insured was not written at the base
rate.
(H) The Chief Insurance Commissioner shall compile a comparative
statistical analysis of the persons for whom physical damage coverages
are written and of the persons for whom physical damage coverages are
denied indicating the data for the following categories: race; sex;
occupation; income; and geographical territory. This report must be
furnished on an annual basis to the General Assembly."
SECTION 3. Section 38-73-1425 of the 1976 Code, as added by Act
113 of 1991, is amended to read:
"Section 38-73-1425. The final rate or premium charge for a
private passenger automobile insurance risk ceded to the facility
which does not qualify for the safe driver discount in Section 38-73-760(e) is the final rate or premium charge required by Section 38-73-1420 or the final rate or premium charge approved for use by the
insurer, whichever is greater, so that the facility may not be
unreasonably utilized by automobile insurers ceding business pursuant
to Section 38-77-950.
The establishing of a rate for all business ceded to the facility shall be
phased in over a two-year period so that no less than fifty percent of the
current differential of the company-filed rate and the current facility rate
shall be added on renewals or new business effective on or after October
1, 1993, and the remaining fifty percent differential between the
company-filed rate and the facility rate shall be added on renewals or
new business effective on or after October 1, 1994."
SECTION 4. Section 38-73-455 of the 1976 Code, as last amended
by Act 113 of 1991, is further amended to read:
"Section 38-73-455. (A) An automobile insurer
shall offer two four different rates for automobile
insurance, a base rate as defined in Section 38-73-457 and an
objective standards rate which is twenty-five percent above the base
rate liability coverages, uninsured motorist coverages, and
underinsured motorist coverages. Both All of these
rates are subject to all surcharges or discounts, if any, applicable under
any approved merit rating plan, credit, or discount plan
promulgated or approved by the commissioner.
(B) No later than July 1, 1994, insurers of automobile insurance
must file with the commissioner revised rates for private passenger
automobile insurance policies written by them. Each insurer must
file:
(1) a `preferred' rate by driver classification and territory, which
is a rate less than the standard rate defined herein. This rate applies to
private passenger automobile insurance risks which qualify for the safe
driver discount; and
(2) a `standard' rate which must be the approved base rate as
defined in Section 38-73-457, by driver classification and territory in
effect on July 1, 1994. This rate applies to private passenger automobile
insurance risks which qualify for the safe driver discount; and
(3) a `nonpreferred' rate by driver classification and territory,
which is a rate more than the standard rate but less than the rate by
driver classification and territory for the substandard rate and is
applicable to all private passenger automobile insurance risks; and
(4) a `substandard' rate by driver classification and territory,
which is a rate more than the nonpreferred rate but less than or equal to
the highest rate by driver classification and territory for the facility, and
is applicable to all private passenger automobile risks.
(C) The commissioner must approve the rates filed pursuant to
subsection (A). If the rates are approved, the rates shall become
effective for all policies of automobile insurance issued or renewed with
effective dates on or after October 1, 1994.
(D) Insurers may place any automobile insurance risk at any of the
four rate levels without restriction unless provided otherwise in this
chapter. An insurer or agent shall provide written notice to the insurer
of the tier at which coverage is being written for the insured and the
reasons the insured was written in that particular tier. However, the
Uniform Merit Rating Plan must continue to apply to all risks written by
them. (E) An applicant and all operators of the insured
automobile who have qualified for the safe driver discount for the last
five years and who reside in the same household, and the automobile or
the automobile it replaced has been insured for liability coverage for the
past twelve months must be written at the preferred or standard rate and
may not be ceded to the facility. A driver who is claimed as a dependent
for income tax purposes is not required to meet the five year requirement
as long as the dependent qualifies for the safe driver discount.
(F) An applicant and all operators of the insured automobile who
have qualified for the safe driver discount for the last ten years and who
reside in the same household and the automobile or the automobile it
replaced has been insured for liability coverage for the past twelve
months must be written at the preferred rate and may not be ceded to the
facility. A driver who is claimed as a dependent for income tax purposes
is not required to meet the ten year requirement as long as the dependent
qualifies for the safe driver discount.
(G) All policies of automobile insurance issued or renewed with
effective dates on or after October 1, 1994, that are written by
automobile insurers designated pursuant to Section 38-77-590(A), for
risks written by them through producers designated pursuant to that
same section, and all policies ceded to the facility by automobile
insurers must be written at the rates provided for in Section 38-77-1426.
However, the Uniform Merit Rating Plan must apply to all such
risks.
Applicants, or a current policyholder, seeking automobile
insurance with an insurer must be written at the base rate, unless one of
the conditions or factors in subitems (1) through (8) of item (A) is
present.
(A) The named insured or any operator who is not excluded in
accordance with Section 37-77-340 and who resides in the same
household or customarily operates an automobile insured under the same
policy, individually:
(1) has obtained a policy of automobile insurance or continuation
thereof through material misrepresentation within the preceding thirty-six months; or
(2) has had convictions for driving violations on three or more
separate occasions within the thirty-six months immediately preceding
the effective date of coverage as reflected by the motor vehicle record
of each insured driver as maintained by the Department of Highways
and Public Transportation; or
(3) has had two or more `chargeable' accidents within the thirty-six
months immediately preceding the effective date of coverage. A
`chargeable' accident is defined as one resulting in bodily injury to any
person in excess of three hundred dollars per person, death, or damage
to the property of the insured or other person in excess of seven hundred
fifty dollars. Accidents occurring under the circumstances enumerated
below are not considered chargeable.
(a) The automobile was lawfully parked. An automobile
rolling from a parked position is not considered as lawfully parked but
is considered as operated by the last operator.
(b) The applicant or other operator or owner was reimbursed
by or on behalf of a person responsible for the accident or has a
judgment against this person.
(c) The automobile of an applicant or other operator was struck
in the rear by another vehicle and the applicant or other operator has not
been convicted of a moving traffic violation in connection with the
accident.
(d) The operator of the other automobile involved in the
accident was convicted of a moving traffic violation and the applicant
or other operator was not convicted of a moving traffic violation in
connection therewith.
(e) An automobile operated by the applicant or other operator
is damaged as a result of contact with a `hit and run' driver, if the
applicant or other operator so reports the accident to the proper authority
within twenty-four hours or, if the person is injured, as soon as the
person is physically able to do so.
(f) Accidents involving damage by contact with animals or
fowl.
(g) Accidents involving physical damage, limited to an caused
by flying gravel, missiles, or falling objects.
(h) Accidents occurring as a result of the operation of any
automobile in response to an emergency if the operator at the time of the
accident was responding to a call of duty as a paid or volunteer member
of any police or fire department, first aid squad, or any law enforcement
agency. This exception does not include an accident occurring after the
emergency situation ceases or after the private passenger motor vehicle
ceases to be used in response to the emergency; or
(4) has had one `chargeable' accident and two convictions for
driving violations, all occurring on separate occasions, within the thirty-six months immediately preceding the effective date of coverage as
reflected by the motor vehicle record of each insured driver as
maintained by the Department of Highways and Public Transportation;
or
(5) has been convicted of or forfeited bail during the thirty-six
months immediately preceding the effective date of coverage for
operating a motor vehicle while in an intoxicated condition or while
under the influence of drugs; or
(6) has been convicted or forfeited bail during the thirty-six
months immediately preceding the effective date for:
(a) any felony involving the use of a motor vehicle,
(b) criminal negligence resulting in death, homicide, or assault
arising out of the operation of a motor vehicle,
(c) leaving the scene of an accident without stopping to report,
(d) theft or unlawful taking of a motor vehicle,
(e) operating during a period of revocation or suspension of
registration or license,
(f) Knowingly permitting an unlicensed person to drive,
(g) reckless driving,
(h) the making of material false statements in the application
for licenses or registration,
(i) impersonating an applicant for license or registration or
procuring a license or registration through impersonation, whether for
himself or another,
(j) filing of a false or fraudulent claim or knowingly aiding or
abetting another in the presentation of such a claim,
(k) failure to stop a motor vehicle when signaled by means or
a siren or flashing light by a law enforcement vehicle; or
(7) has for thirty or more consecutive days during the twelve
months immediately preceding the effective date of coverage, owned or
operated the automobile to be insured (or if newly acquired, the
automobile it replaces) without liability coverage in violation of the laws
of this State; or
(8) has used the insured automobile as follows or if the insured
automobile is:
(a) used in carrying passengers for hire or compensation,
except that the use of an automobile for a car pool must not be
considered use of an automobile for hire or compensation,
(b) used in the business of transportation of flammables or
explosives,
(c) used in illegal operation, or
(d) no longer principally used and garaged within the State, but
not to include students who are operating a motor vehicle registered in
this State while attending an institution located in another state.
(B) In the event that one or more of the conditions or factors
prescribed in items (1) through (8) of subsection (A) exist, the motor
vehicle customarily operated by that individual must be written at the
objective standards rate.
(C) (H) Member companies of an affiliated group of
automobile insurers may not utilize different filed rates for
automobile insurance coverages which they are mandated by law to
write. For the purpose of this section, an affiliated group of
automobile insurers includes a group of automobile insurers under
common ownership, management, or control. Those automobile
insurers designated pursuant to Section 38-77-590(a), for automobile
insurance risks written by them through producers designated by the
Facility governing board pursuant to that section, shall utilize the rates
or premium charges by coverage filed and authorized for use by the
rating organization licensed by the Commissioner pursuant to Article 11,
Chapter 73 of this title, which has the largest number of members or
subscribers for automobile insurance rates. However, those automobile
insurers designated pursuant to Section 38-77-590(a) are not required to
use those same rates or premium charges described in the preceding
sentence for risks written by them through their authorized agents not
appointed pursuant to Section 38-77-590.
(D) (I) An automobile insurance policy may be
endorsed at any time during the policy period to reflect the correct rate
or premium applicable by reason of the factors or conditions described
in subsection (A) which existed prior to the commencement of the policy
period in which the endorsement is made, regardless of whether the
factors or conditions were known or disclosed to the insurer at the
commencement of the policy period. However, no No
policy may be endorsed during a policy period to reflect factors or
conditions occurring during that policy period. A policy may be
endorsed during a policy period to recognize the addition or deletion of
an operator or vehicle.
(E)(J) For purposes of determining the applicable
rates to be charged an insured, an automobile insurer shall obtain and
review an applicant's motor vehicle record.
(K) In determining the premiums to be charged on automobile
insurance, it is unlawful to consider race, religion, national origin, or
economic status."
SECTION 5. The 1976 Code is amended by adding:
"Section 38-77-175. (A) When the operator or owner of an
individual private passenger automobile as defined in Section 38-77-30(5.5) is issued a traffic ticket for a moving violation by a law
enforcement officer, he must be furnished a written request form to be
completed by him and his insurance company or the agent issuing the
policy to verify liability insurance coverage. The form must be in a
manner prescribed by regulation of the Department of Highways and
Public Transportation.
(B) The completed and verified form must be returned by the
operator or owner to the local law enforcement agency issuing the traffic
ticket within fifteen days from the date he receives it. Failure to return
the form verified in the proper manner is prima facie evidence that the
vehicle was uninsured.
(C) The director of the motor vehicle division of the department shall
waive the reinstatement fee or per diem fine, or both, imposed upon the
owner or operator of the motor vehicle pursuant to this section for his
failure to complete and return the insurance verification form if he has
liability insurance coverage when determined to be uninsured by the
department. The director shall document his reasons for waiving the
fees or fines in the records of the department.
(D) No person knowingly may furnish or aid another in the
submission of false or misleading information in the completed and
verified form. A person who knowingly furnishes or aids another in
submitting false or misleading information regarding the verification of
liability insurance is subject to the penalties in Section 56-10-260.
(E) This section applies only to owners and operators of motor
vehicles registered under the laws of South Carolina.
(F) Motor vehicles determined to be uninsured under this section are
subject to Sections 56-10-240 and 56-10-245.
(G) The operator of the motor vehicle shall present the written
request form for verification of liability insurance coverage to the owner
of the vehicle. Failure by the operator to give the form to the owner is
prima facie evidence that the operator knowingly furnished false and
misleading information to the department.
However, the form must have the following sentence on its face in
bold type, all capitals, and large print:
`THE OWNER OR OPERATOR OF A MOTOR VEHICLE WHO
IS ISSUED THIS FORM SHALL COMPLETE AND RETURN
THE FORM TO THE ISSUING AGENCY WITHIN FIFTEEN
DAYS OR IS SUBJECT TO A TWO HUNDRED DOLLAR
REINSTATEMENT FEE AND FIVE DOLLAR A DAY FINE
PURSUANT TO SOUTH CAROLINA LAW. IF YOU ARE NOT
THE OWNER OF THE MOTOR VEHICLE, YOU SHALL
PRESENT THIS FORM TO THE OWNER OR YOU ARE
SUBJECT TO FINE AND IMPRISONMENT.'
The officer shall read aloud this sentence to the owner or operator of
the motor vehicle upon furnishing the written request form to verify
liability insurance coverage."
SECTION 6. The 1976 Code is amended by adding:
"Section 56-7-12. (A) When the operator or owner of an
individual private passenger automobile as defined in Section 38-77-30(5.5) is issued a traffic ticket for a moving violation by a law
enforcement officer, he must be furnished a written request form to be
completed by him and his insurance company or the agent issuing the
policy to verify liability insurance coverage. The form must be in a
manner prescribed by regulation of the Department of Highways and
Public Transportation.
(B) The completed and verified form must be returned by the
operator or owner to the local law enforcement agency issuing the traffic
ticket within fifteen days from the date he receives it. Failure to return
the form verified in the proper manner is prima facie evidence that the
vehicle was uninsured.
(C) The director of the motor vehicle division of the department shall
waive the reinstatement fee or per diem fine, or both, imposed upon the
owner or operator of the motor vehicle pursuant to this section for his
failure to complete and return the insurance verification form if he has
liability insurance coverage when determined to be uninsured by the
department. The director shall document his reasons for waiving the
fees or fines in the records of the department.
(D) No person knowingly may furnish or aid another in the
submission of false or misleading information in the completed and
verified form. A person who knowingly furnishes or aids another in
submitting false or misleading information regarding the verification of
liability insurance is subject to the penalties in Section 56-10-260.
(E) This section applies only to owners and operators of motor
vehicles registered under the laws of South Carolina.
(F) Motor vehicles determined to be uninsured under this section are
subject to Sections 56-10-240 and 56-10-245.
(G) The operator of the motor vehicle shall present the written
request form for verification of liability insurance coverage to the owner
of the vehicle. Failure by the operator to give the form to the owner is
prima facie evidence that the operator knowingly furnished false and
misleading information to the department.
However, the form must have the following sentence on its face in
bold type, all capitals, and large print:
`THE OWNER OR OPERATOR OF A MOTOR VEHICLE WHO
IS ISSUED THIS FORM SHALL COMPLETE AND RETURN
THE FORM TO THE ISSUING AGENCY WITHIN FIFTEEN
DAYS OR IS SUBJECT TO A TWO HUNDRED DOLLAR
REINSTATEMENT FEE AND FIVE DOLLAR A DAY FINE
PURSUANT TO SOUTH CAROLINA LAW. IF YOU ARE NOT
THE OWNER OF THE MOTOR VEHICLE, YOU SHALL
PRESENT THIS FORM TO THE OWNER OR YOU ARE
SUBJECT TO FINE AND IMPRISONMENT.'
The officer shall read aloud this sentence to the owner or operator of
the motor vehicle upon furnishing the written request form to verify
liability insurance coverage."
SECTION 7. Section 56-10-45 of the 1976 Code is amended to
read:
"Section 56-10-45. (A) For the purpose of
recovering motor vehicle registration plates as required by Section 56-10-40 of the 1976 Code, the department may must
contract with or make working arrangements with local law enforcement
agencies including sheriffs and municipal law enforcement departments
for them to confiscate these plates, upon a contract or working
arrangement being agreed to. The local law enforcement agencies are
authorized to confiscate these plates. The local law enforcement
agencies must be paid for this service in the manner agreed upon
between them and the executive director from funds of the department
which are to be used for this purpose.
(B) The department shall collect the reinstatement fee as
provided in Section 56-10-240 and the per diem fine as provided in
Section 56-10-245 upon the reinstatement of tags confiscated by local
law enforcement agencies pursuant to this section. The local city,
county, or municipal governing body of the local law enforcement
agency collecting the registration plate must be paid by the department
fifty percent of the reinstatement fee and fifty percent of the per diem
fine collected for each registration plate confiscated by the local agency.
(C) The Executive Director of the Department of Highways and
Public Transportation or his designee shall monthly provide information
to local law enforcement agencies, upon request of the local law
enforcement agency, on uninsured vehicles."
SECTION 8. The 1976 Code is amended by adding:
"Section 56-10-35. The department shall, on a daily basis,
select a computerized random sample of five hundred of the registered
vehicles in this State and mail to the owners a written request form to be
completed by them and their insurance company or the agent issuing the
policy to verify liability insurance coverage. The form must be in a
manner prescribed by regulation of the Department of Highways and
Public Transportation. The completed and verified form must be
returned by the owner to the department within fifteen days from the
date he receives it. Failure to return the form verified in the proper
manner is prima facie evidence that the vehicle was uninsured. Motor
vehicles determined to be uninsured under this section are subject to
Section 56-10-240 and 56-10-245."
SECTION 9. No later than October 1, 1994, all insurers shall submit
rate filings that must reflect the rate decreases, if any, attributable to
Section 6 of this act.
SECTION 10. Except as otherwise specifically provided herein,
this act takes effect October 1, 1993./
Amend title to conform.
THOMAS C. ALEXANDER, for Committee.
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING SECTION 38-77-355 SO AS TO PROVIDE THAT IN A
CLAIM OR ACTION FOR PERSONAL INJURY OR WRONGFUL
DEATH ARISING OUT OF THE OWNERSHIP, OPERATION, USE,
OR MAINTENANCE OF A MOTOR VEHICLE, THE COURT
SHALL ADMIT INTO EVIDENCE THE TOTAL AMOUNT PAID TO
THE CLAIMANT FROM COLLATERAL SOURCES; TO AMEND
SECTION 38-77-280, AS AMENDED, RELATING TO
AUTOMOBILE INSURANCE AND TO COLLISION AND
COMPREHENSIVE COVERAGE, SO AS TO DELETE THE
CURRENT PROVISIONS AND PROVIDE THAT
NOTWITHSTANDING CERTAIN SECTIONS, AFTER A CERTAIN
DATE AUTOMOBILE INSURERS MAY REFUSE TO WRITE OR
RENEW PRIVATE PASSENGER AUTOMOBILE PHYSICAL
DAMAGE INSURANCE COVERAGE; TO AMEND SECTION 38-77-30, AS AMENDED, RELATING TO THE DEFINITION OF
"DAMAGES" UNDER THE AUTOMOBILE INSURANCE
LAWS, SO AS TO PROVIDE THAT THE TERM INCLUDES
ACTUAL DAMAGES ONLY; TO AMEND SECTION 38-77-140,
RELATING TO AUTOMOBILE INSURANCE AND BODILY
INJURY AND PROPERTY DAMAGE LIMITS, SO AS TO, AMONG
OTHER THINGS, PROVIDE THAT AN INSURER SHALL ALSO
OFFER THE INSURED A RIDER OR ENDORSEMENT FOR AN
ADDITIONAL PREMIUM TO COVER LIABILITY FOR PUNITIVE
DAMAGES; TO AMEND SECTION 38-77-150, RELATING TO
AUTOMOBILE INSURANCE, THE UNINSURED MOTORIST
PROVISION, AND DEFENSE OF AN ACTION BY THE INSURER,
SO AS TO, AMONG OTHER THINGS, PROVIDE THAT INSURERS
SHALL OFFER, AT THE OPTION OF THE INSURED, HIGHER
LIMITS OF UNINSURED MOTORIST COVERAGE IN
ACCORDANCE WITH SECTION 38-77-350; TO AMEND SECTION
38-77-160, AS AMENDED, RELATING TO ADDITIONAL
UNINSURED MOTORIST COVERAGE, AND UNDERINSURED
MOTORIST COVERAGE, SO AS TO, AMONG OTHER THINGS,
PROVIDE THAT AUTOMOBILE INSURERS SHALL OFFER ON A
FORM PRESCRIBED BY THE CHIEF INSURANCE
COMMISSIONER, AT THE OPTION OF THE INSURED IN
ACCORDANCE WITH SECTION 38-77-350 UNDERINSURED
MOTORIST COVERAGE UP TO THE LIMITS SELECTED FOR THE
INSURED'S LIABILITY COVERAGE TO PROVIDE COVERAGE IN
THE EVENT THE INSURED BECOMES LEGALLY ENTITLED TO
COLLECT DAMAGES FROM THE OWNER OR OPERATOR OF AN
UNDERINSURED MOTOR VEHICLE; TO AMEND SECTION 56-9-350, RELATING TO SECURITY FOLLOWING MOTOR VEHICLE
ACCIDENTS, VERIFICATION OF INSURANCE COVERAGE
FORM TO BE ISSUED FOLLOWING CERTAIN ACCIDENTS,
EFFECT OF FAILURE TO RETURN THE FORM, AND
UNINVESTIGATED ACCIDENTS, SO AS TO, AMONG OTHER
THINGS, PROVIDE THAT WITHIN FIFTEEN DAYS AFTER AN
ACCIDENT A WRITTEN REPORT OF THE ACCIDENT MUST BE
FORWARDED TO THE DEPARTMENT OF HIGHWAYS AND
PUBLIC TRANSPORTATION ON A FORM PRESCRIBED BY THE
DEPARTMENT; TO AMEND SECTION 56-10-10, RELATING TO
MOTOR VEHICLE REGISTRATION AND FINANCIAL SECURITY
AND THE SECURITY REQUIRED ON REGISTERED VEHICLES,
SO AS TO DELETE CERTAIN PROVISIONS AND PROVIDE,
AMONG OTHER THINGS, THAT SECURITY MUST BE
MAINTAINED ON EVERY MOTOR VEHICLE REQUIRED TO BE
REGISTERED IN SOUTH CAROLINA WHERE THE OWNERS OR
OTHER OPERATORS NOT EXCLUDED IN ACCORDANCE WITH
SECTION 38-77-340 RESIDE IN THE SAME HOUSEHOLD AND
ARE INSUREDS UNDER THE SAME POLICY, IF ONE OF THE
OWNERS OR OTHER OPERATORS DO NOT QUALIFY FOR THE
SAFE DRIVER DISCOUNT; TO AMEND SECTION 56-10-220,
RELATING TO THE REQUIREMENT THAT A MOTOR VEHICLE
SOUGHT TO BE REGISTERED MUST BE INSURED AND PROOF
OF THE SAME, SO AS TO DESCRIBE THE PERSON APPLYING
FOR REGISTRATION AS ONE "REQUIRED TO PROVIDE
SECURITY ON A MOTOR VEHICLE AS PROVIDED IN SECTION
56-10-10"; TO AMEND SECTION 56-10-240, RELATING TO
THE REQUIREMENT THAT UPON THE LOSS OF AUTOMOBILE
INSURANCE THE INSURED MUST OBTAIN NEW INSURANCE
OR SURRENDER THE REGISTRATION AND LICENSE PLATES,
SO AS TO FURTHER DESCRIBE THE MOTOR VEHICLE WHICH
IS THE SUBJECT OF THIS SECTION AS ONE "FOR WHICH
SECURITY IS REQUIRED AS PROVIDED IN SECTION 56-10-10", DELETE CERTAIN LANGUAGE, AND DESCRIBE THE
RESIDENT FOR WHOM LAPSE OR TERMINATION OCCURS
AFTER THREE MONTHS AS ONE "WHO DOES NOT
QUALIFY FOR THE SAFE DRIVER DISCOUNT IN SECTION 38-73-760"; TO AMEND CHAPTER 10, TITLE 56, RELATING TO
MOTOR VEHICLE REGISTRATION AND FINANCIAL SECURITY,
BY ADDING ARTICLE 5 SO AS TO PROVIDE FOR THE
REGISTRATION AND LICENSING OF UNINSURED MOTOR
VEHICLES; TO AMEND SECTION 38-77-110, AS AMENDED,
RELATING TO THE PROVISION THAT AUTOMOBILE INSURERS
ARE REQUIRED TO INSURE AND EXCEPTIONS, SO AS TO,
AMONG OTHER THINGS, PROVIDE THAT NO INSURER IS
REQUIRED TO WRITE OR RENEW PRIVATE PASSENGER
AUTOMOBILE INSURANCE IF THE RISK DOES NOT QUALIFY
FOR THE SAFE DRIVER DISCOUNT, PROVIDE THAT NO
INSURER MAY REFUSE TO WRITE OR RENEW A POLICY,
COVERAGE, OR ENDORSEMENT OF AUTOMOBILE
INSURANCE BECAUSE OF THE RACE, COLOR, CREED,
NATIONAL ORIGIN, ANCESTRY, OR INCOME OF ANYONE
WHO SEEKS TO BECOME INSURED, AND PROVIDE THAT AN
APPLICANT DENIED COVERAGE MUST BE PROVIDED IN
WRITING BY THE DENYING INSURER THE REASON OR
REASONS FOR WHICH THE APPLICANT HAS BEEN REFUSED
INSURANCE BY THAT INSURER, AT THE TIME OF THE
DENIAL; TO AMEND THE 1976 CODE BY ADDING ARTICLE 13
TO CHAPTER 77 OF TITLE 38, SO AS TO ESTABLISH THE
SOUTH CAROLINA JOINT UNDERWRITING ASSOCIATION
(JUA), INCLUDING PROVISIONS FOR, AMONG OTHER THINGS,
THE ABOLITION OF THE SOUTH CAROLINA REINSURANCE
FACILITY; TO AMEND SECTION 38-73-455, AS AMENDED,
RELATING TO AUTOMOBILE INSURANCE RATES, SO AS TO,
AMONG OTHER THINGS, DELETE CERTAIN PROVISIONS,
PROVIDE THAT AN AUTOMOBILE INSURER SHALL OFFER
FOUR, RATHER THAN TWO, DIFFERENT RATES FOR
AUTOMOBILE INSURANCE, AND PROVIDE THAT, NO LATER
THAN NINETY DAYS AFTER THE PASSAGE OF THIS ACT,
INSURERS OF AUTOMOBILE INSURANCE MUST FILE WITH
THE CHIEF INSURANCE COMMISSIONER REVISED RATES FOR
ALL OTHER PRIVATE PASSENGER AUTOMOBILE INSURANCE
POLICIES WRITTEN BY THEM; TO AMEND SECTION 38-73-760,
AS AMENDED, RELATING TO THE STATE RATING AND
STATISTICAL DIVISION FOR INSURANCE PURPOSES AND
UNIFORM STATISTICAL PLANS, SO AS TO PROVIDE THAT NO
SURCHARGE MAY BE ASSESSED FOR THE FIRST CONVICTION
OF SPEEDING LESS THAN TWENTY-FIVE MILES PER HOUR IF
THE PERSON CONVICTED HAS MAINTAINED THE SAFE
DRIVER DISCOUNT FOR THE PREVIOUS THREE YEARS, AND
PROVIDE THAT NO SURCHARGE MAY BE ASSESSED FOR
CONVICTIONS OF CERTAIN VIOLATIONS OCCURRING ON OR
AFTER A CERTAIN DATE; TO AMEND SECTION 56-10-270,
RELATING TO THE OPERATION OF AN UNINSURED MOTOR
VEHICLE AND PENALTIES, SO AS TO, AMONG OTHER THINGS,
CHANGE THE PENALTIES, INCLUDING PROVIDING FOR THE
PERFORMANCE OF PUBLIC SERVICE HOURS; TO AMEND THE
1976 CODE BY ADDING SECTION 38-77-116 SO AS TO PROVIDE
THAT, UPON ISSUANCE OF A NEW PRIVATE PASSENGER
AUTOMOBILE INSURANCE POLICY, THE INSURANCE
COMPANY OR AGENT MUST REVIEW WITH THE NEW
APPLICANT A LIST OF DRIVING OFFENSES AND THE RELATED
FINE AND PUNISHMENT, AS WELL AS THE POSSIBLE
INCREASE IN THE INSURANCE RATES, THE EFFECT OF ANY
SURCHARGES, OR THE EFFECT OF THE LOSS OF THE SAFE
DRIVER DISCOUNT, AND PROVIDE THAT THE LIST MUST BE
ON A FORM APPROVED BY THE CHIEF INSURANCE
COMMISSIONER AND MUST ACCOMPANY THE POLICY; TO
PROVIDE THAT, AFTER A CERTAIN DATE, THE GOVERNING
BOARD OF THE JOINT UNDERWRITING ASSOCIATION SHALL
CONTRACT WITH ONE OR MORE INSURERS OR BUSINESS
ENTITIES TO SERVE AS THE DESIGNATED CARRIER AND
SHALL ESTABLISH A PROCEDURE FOR THE SELECTION OF
THE DESIGNATED CARRIER, PROVIDE THAT COMMISSIONS
PAID TO AGENTS FOR POLICIES CEDED TO OR PLACED IN
THE JUA SHALL BE SET BY THE JUA'S BOARD OF DIRECTORS,
AND PROVIDE FOR RELATED MATTERS; TO AMEND THE 1976
CODE BY ADDING SECTION 38-77-175 AND 56-7-12 SO AS TO
PROVIDE THAT, WHEN THE OPERATOR OR OWNER OF A
MOTOR VEHICLE IS ISSUED A TRAFFIC TICKET FOR A
MOVING VIOLATION BY A LAW ENFORCEMENT OFFICER, HE
MUST BE FURNISHED A WRITTEN REQUEST FORM TO
COMPLETE TO VERIFY LIABILITY INSURANCE COVERAGE,
PROVIDE FOR THE RETURN OF THE COMPLETED AND
VERIFIED FORM TO THE DEPARTMENT OF HIGHWAYS AND
PUBLIC TRANSPORTATION, PROVIDE FOR THE DEPOSIT OF
SUCH COLLECTED FINES, AND PROVIDE FOR RELATED
MATTERS; TO REPEAL ARTICLE 5, CHAPTER 77, TITLE 38,
RELATING TO THE SOUTH CAROLINA REINSURANCE
FACILITY AND DESIGNATED PRODUCERS, SECTION 38-73-1420, RELATING TO THE REQUIREMENT THAT THE BOARD OF
GOVERNORS OF THE REINSURANCE FACILITY SHALL FILE
AN EXPENSE COMPONENT FOR PRIVATE PASSENGER
AUTOMOBILE INSURANCE RATE OR PREMIUM CHARGES,
SECTION 38-73-1425, RELATING TO THE PROVISION THAT THE
FINAL RATE OR PREMIUM CHARGE FOR A PRIVATE
PASSENGER AUTOMOBILE INSURANCE RISK CEDED TO THE
REINSURANCE FACILITY WHICH DOES NOT QUALIFY FOR
THE SAFE DRIVER DISCOUNT IS THE FINAL RATE OR
PREMIUM CHARGE REQUIRED BY SECTION 38-73-1420 OR THE
FINAL RATE OR PREMIUM CHARGE APPROVED FOR USE BY
THE INSURER, WHICHEVER IS GREATER, SECTION 38-77-285,
RELATING TO THE REQUIREMENT THAT ALL AUTOMOBILE
INSURANCE COVERAGES MUST BE IN ONE POLICY AND
EXCEPTIONS, SECTION 38-77-920, RELATING TO THE
PROVISION THAT AUTOMOBILE INSURERS AND AGENTS MAY
NOT REFUSE ACCEPTANCE OF INSURANCE, PROPERTY
RIGHTS OF CERTAIN AGENTS, AND RESTRICTION OF
MAILINGS TO CERTAIN AREAS, SECTION 38-77-940, RELATING
TO THE AUTOMOBILE INSURANCE LAW, AVOIDING CERTAIN
CLASSES OR TYPES OF RISKS, EXCEPTIONS, AND CANCELING
AN AGENT'S REPRESENTATION, SECTION 38-77-950,
RELATING TO UNREASONABLE OR EXCESSIVE USE OF THE
REINSURANCE FACILITY BY AN INSURER AND NOTICE TO AN
AUTOMOBILE INSURANCE POLICYHOLDER THAT HIS POLICY
IS IN THE FACILITY, AND SECTION 38-77-960, RELATING TO
AUTOMOBILE INSURANCE AGENT'S BUSINESS; TO AMEND
SECTION 38-77-111, RELATING TO THE COVERAGES OF AN
AUTOMOBILE INSURANCE POLICY WHICH MAY BE CEDED TO
THE REINSURANCE FACILITY AND THOSE COVERAGES
WHICH CANNOT BE CEDED, SO AS TO DELETE THE
REFERENCE TO THE FACILITY, REPLACE IT WITH THE
"JOINT UNDERWRITING ASSOCIATION", AND
ALLOW A CESSION EXCEPTION, WITH RESPECT TO
COVERAGES UNDER A POLICY THAT AN AUTOMOBILE
INSURER IS NOT MANDATED BY LAW TO WRITE, FOR TORT
LIABILITY COVERAGE AND UNINSURED MOTORIST
COVERAGE FOR THOSE RISKS THAT DO NOT QUALIFY FOR
THE SAFE DRIVER DISCOUNT; AND TO PROVIDE A
SEVERABILITY CLAUSE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Article 3, Chapter 77, Title 38 of the 1976 Code is
amended by adding:
"Section 38-77-355. (A) In a claim or action for personal
injury or wrongful death arising out of the ownership, operation, use, or
maintenance of a motor vehicle, the court shall admit into evidence the
total amount paid to the claimant from collateral sources, and the court
shall instruct the jury to deduct from its verdict the value of all benefits
received by the claimant from collateral sources.
(B) For purposes of this section, `collateral sources' means payments
made to the claimant, or on his behalf, by or pursuant to:
(1) automobile liability, uninsured motorist, underinsured motorist,
or automobile accident insurance that provides health benefits or income
disability coverage;
(2) personal protection benefits paid or payable by law;
(3) payments made from a policy of automobile insurance by or on
behalf of a joint tortfeaser, either by way of settlement or judgment.
(C) No claimant may make claim or demand, no court may order
payment, and no insurer may pay by way of settlement, covenant not to
sue, or trust or loan agreement for an item of damages to the extent that
the claimant has already received, or will receive, reimbursement for that
item as a result of a collateral source payment as defined in this
section."
SECTION 2. Section 38-77-280 of the 1976 Code, as last amended by
Act 113 of 1991, is further amended to read:
"Section 38-77-280. (A) Except as provided in subsection
(B), all automobile insurers, including those insurance companies
writing private passenger physical damage coverages only, shall make
collision coverage and either comprehensive or fire, theft, and combined
additional coverage available to an insured or qualified applicant who
requests the coverage.
Collision coverage must have a mandatory deductible of two hundred
fifty dollars, but an insured or qualified applicant, as his option, may
select an additional deductible in appropriate increments up to one
thousand dollars.
Comprehensive coverage or fire, theft, and combined additional
coverages must have a mandatory deductible of two hundred fifty
dollars, but an insured, at his option, may select an additional deductible
in appropriate increments up to one thousand dollars. This deductible
does not apply to auto safety glass. It is an unfair trade practice, as
described in Sections 38-57-30 and 38-57-40, for an insurer or an agent
to sell collision insurance, comprehensive coverage, or fire, theft, and
combined additional coverages unless the insured is notified at the time
of application of the savings which may be realized if the applicant or
the insured selects a higher deductible. This notice is required only at
the time of the initial sale and must be in a form approved by the Chief
Insurance Commissioner. An insurer may offer insureds lower
deductibles at the insurer's option.
(B) Notwithstanding subsection (A) and Sections 38-77-110 and 38-77-920, automobile insurers may refuse to write automobile physical
damage insurance coverage, including automobile comprehensive
physical damage, collision, fire, theft, and combined additional
coverage, for an applicant or existing policyholder, on renewal, for a
motor vehicle customarily operated by an individual, either the named
insured or any other operator not excluded in accordance with Section
38-77-340 and who resides in the same household, where one or more
of the conditions or factors prescribed in Section 38-73-455 exist. In
addition, automobile insurers may refuse to write physical damage
insurance coverage to any applicant or existing policyholder, on
renewal, who has collected benefits provided under any automobile
insurance physical damage coverage during the thirty-six months
immediately preceding the effective date of coverage, for two or more
total fire losses or two or more total theft losses. Automobile insurers
may refuse to write for private passenger automobiles comprehensive
physical damage, collision, fire, theft, and combined additional
coverage, for an applicant or existing policyholder, on renewal, for a
motor vehicle customarily operated by an individual, either the named
insured or another operator not excluded in accordance with Section 38-77-340 and who resides in the same household, which does not qualify
for the safe driver discount in Section 38-73-760(e).
(C) Notwithstanding Section 38-77-110, automobile physical
damage coverage in an automobile insurance policy may be canceled at
any time during the policy period by reason of the factors or conditions
described in Section 38-73-455(A) or Section 38-77-280(B) 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 and approved by the Chief Insurance
Commissioner. Any applicant or existing policyholder, to be charged
this different rate, must be denied the coverage pursuant to subsection
(B) at the rate provided in Section 38-73-457.
(F) A carrier may not cede collision coverage, comprehensive
coverage, or fire, theft, and combined additional coverages with a
deductible of less than two hundred fifty dollars. An insured or qualified
applicant may select an additional deductible in appropriate increments
up to one thousand dollars. However, the mandatory deductible does not
apply to safety glass. Notwithstanding Sections 38-77-110 and
38-77-920, after September 30, 1994, automobile insurers may refuse to
write or renew private passenger automobile physical damage insurance
coverage, including automobile comprehensive physical damage,
collision, fire, theft, and combined additional coverage for an applicant
or existing policyholder. After September 30, 1994, no private
passenger automobile physical damage insurance coverage may be
ceded to the Facility."
SECTION 3. Section 38-77-30(4) of the 1976 Code is amended to
read:
"(4) `Damages' includes both actual and
punitive damages only."
SECTION 4. Section 38-77-140 of the 1976 Code is amended to read:
"Section 38-77-140. (A) No automobile insurance
policy may be issued or delivered in this State to the owner of a motor
vehicle or may be issued or delivered by an insurer licensed in this State
upon any motor vehicle then principally garaged or principally used in
this State, unless it contains a provision insuring the persons defined as
insured against loss from the liability imposed by law for actual
damages arising out of the ownership, maintenance, or use of these
motor vehicles within the United States or Canada, subject to limits
exclusive of interest and costs, with respect to each motor vehicle, as
follows: fifteen thousand dollars because of bodily injury to one person
in any one accident, and, subject to the limit for one person, thirty
thousand dollars because of bodily injury to two or more persons in any
one accident, and five thousand dollars because of injury to or
destruction of property of others in any one accident. Nothing in this
article prevents an insurer from issuing selling, or delivering a policy
providing liability coverage in excess of these requirements.
(B) An insurer shall also offer the insured, in accordance with
Section 38-77-350, a rider or endorsement for an additional premium to
cover such liability for punitive damages. The insured has the option of
accepting or refusing coverage for punitive damages.
As a result of passage of this section, all insurers offering bodily
injury liability coverage shall file with the Chief Insurance
Commissioner, not later than ninety days after the effective date of this
act, revised premium rates for bodily injury liability coverage to be
effective on automobile insurance policies issued or renewed with
effective dates on or after January 1, 1995. The revised rates must be
approved by the commissioner and reflect a reduction in the currently
approved premium rate for this coverage of at least one and one-half
percent. Insurers shall file with the commissioner not later than sixty
days after the effective date of this act premium charges for the punitive
damages loss coverage. The premium rate for this coverage shall
become effective for the automobile insurance policies issued or
renewed with effective dates on or after January 1, 1995, and may not
be approved if it is more, when combined with the reduced premium rate
for the new bodily injury liability coverage with limitations on the
recovery of punitive damages, than the bodily injury liability premium
rate for that insurer on the effective date of this act; however, after
December 31, 1995, an insurer may apply to the Chief Insurance
Commissioner for a rate adjustment for such coverage, based on its
actual experience."
SECTION 5. Section 38-77-150 of the 1976 Code is amended to read:
"Section 38-77-150. (A) No automobile insurance
policy or contract may be issued or delivered unless it contains a
provision by endorsement or otherwise, herein referred to as the
uninsured motorist provision, undertaking to pay the insured all sums
which he is legally entitled to recover as actual damages from
the owner or operator of an uninsured motor vehicle, within limits which
may be are no less than the requirements of Section 38-77-140 and no more than the insured's bodily injury and property
damage liability limits. The uninsured motorist provision shall
also provide for no less than five thousand dollars' coverage for injury
to or destruction of the property of the insured in any one accident but
may provide an exclusion of the first two hundred dollars of the loss or
damage.
(B) Automobile insurers shall offer, at the option of the insured
and in the manner hereinafter described, higher limits of uninsured
motorist coverage in accordance with Section 38-77-350. The offer of
higher limits must be made in connection with every initial application
for an automobile insurance policy by including a written explanation
of the coverage and inquiry of the applicant, in a form prescribed by the
Chief Insurance Commissioner, as to whether the applicant desires to
purchase uninsured motorist coverage with limits greater than the
mandatory coverages described in subsection (A). No such explanation
or inquiry need be made with respect to any renewal, replacement,
reinstatement, substitute, or modification of the policy. An insured may,
at any time and subject to the limits of this section, specifically request
in writing uninsured motorist coverage limits greater than that provided
on the current or any prior policy.
(C) Insurers shall offer on a form prescribed by the Chief
Insurance Commissioner `nonstackable' policies of uninsured motorist
coverage containing policy provisions establishing that if the insured
accepts this offer:
(1) Regardless of the number of vehicles involved, persons
covered, number of premiums paid, or vehicles or premiums shown on
the policy or policies under which the insured might otherwise be
entitled to benefits, the coverage provided as to two or more motor
vehicles under the same or different policies may not under any
circumstances be added together, combined with, or stacked to
determine the limit of insurance coverage available to an injured person
for any one accident, except as provided in item (3) of this subsection
(C).
(2) If at the time of the accident the injured person is occupying
a motor vehicle, the uninsured motorist coverage available to him is the
coverage available as to that motor vehicle.
(3) If the injured person is occupying a motor vehicle which is
not owned by him or by a family member residing with him, he is
entitled to the highest limits of uninsured motorist coverage afforded for
any one vehicle as to which he is named insured. Such coverage is
excess over the coverage on the vehicle he is occupying.
(4) The uninsured motorist coverage provided by the policy
does not apply to the named insured who is injured while occupying any
vehicle owned by the named insured for which uninsured motorist
coverage was not purchased.
(5) If at the time of the accident the injured person is not
occupying a motor vehicle, he is entitled to select any one limit of
uninsured motorist coverage for any one vehicle afforded by a policy
under which he is insured as a named insured.
(6) In connection with the offer authorized by this subsection,
insurers shall inform the named insured, applicant, or lessee, on a form
prescribed by the Chief Insurance Commissioner, of the limitations
imposed under this subsection and that such coverage is an alternative
to coverage without such limitations. If this form is signed by a named
insured, applicant, or lessee, it is conclusively presumed that there was
an informed, knowing acceptance of such limitations, and neither the
insurance company nor the insurance agent has any liability to the
insured for the insured's failure to purchase stackable coverage. When
the named insured, applicant, or lessee has initially accepted such
limitations, the acceptance applies to any policy which renews, extends,
changes, supersedes, reinstates or replaces an existing policy unless the
named insured requests deletion of the limitations and pays the
appropriate premium for the coverage. Any insurer who provides
coverage which includes the limitations provided in this subsection shall
file revised premium rates with the Department of Insurance for such
uninsured motorist coverage to take effect before initially providing such
coverage. The revised rates must reflect the anticipated reduction in loss
costs attributable to such limitations but, in any event, must reflect a
reduction in the uninsured motorist coverage premium of at least fifteen
percent for policies with such limitations. Insurers shall file within
ninety days after the effective date of this act, revised premium rates
with the Chief Insurance Commissioner to be effective on automobile
insurance policies issued or renewed with effective dates on or after
January 1, 1995.
(D) Premium rates made by insurers for uninsured motorist
coverage must be determined and regulated as premium rates for
automobile insurance generally are determined and regulated. The
Chief Insurance Commissioner may prescribe shall
approve the form to be used in providing uninsured motorist
coverage and when prescribed and promulgated no other form
may be used.
(E) No action may be brought under the uninsured motorist
provision unless copies of the pleadings in the action establishing
liability are served in the manner provided by law upon the insurer
writing the uninsured motorist provision. The insurer has the right to
appear and defend in the name of the uninsured motorist in any action
which may affect its liability and has thirty days after service of process
on it in which to appear. The evidence of service upon the insurer may
not be made a part of the record.
(F) Benefits paid pursuant to this section are subject to
subrogation and assignment."
SECTION 6. Section 38-77-160 of the 1976 Code, as last amended by
Act 148 of 1989, is further amended to read:
"Section 38-77-160. (A) Automobile insurance
carriers insurers shall offer on a form prescribed by the
Chief Insurance Commissioner, at the option of the insured in
accordance with Section 38-77-350 uninsured
underinsured motorist coverage up to the limits of the insured's
liability coverage in addition to the mandatory coverage prescribed by
Section 38-77-150. Such carriers shall also offer, at the option of the
insured, underinsured motorist coverage up to the limits of the insured
liability coverage to provide coverage in the event that damages are
sustained in excess of the liability limits carried by an at fault insured
or underinsured motorist. If, however, an insured or named insured is
protected by uninsured or underinsured motorist coverage in excess of
the basic limits, the policy shall provide that the insured or named
insured is protected only to the extent of the coverage he has on the
vehicle involved in the accident. If none of the insured's or named
insured's vehicles is involved in the accident, coverage is available only
to the extent of coverage on any one of the vehicles with the excess or
underinsured coverage. up to the limits selected for the
insured's liability coverage to provide coverage in the event the insured
becomes legally entitled to collect damages from the owner or operator
of an underinsured motor vehicle, as defined in Section 38-77-30(14).
The maximum liability of the insurer under the underinsured motorist
coverage provided is the lesser of: (1) the difference between the limit
of underinsured motorist coverage and the amount paid or payable to the
insured by or for any person or organization who is held legally liable
for the bodily injury or property damage, or (2) the amount of damages
sustained, but not recovered. In no event may the liability of the insurer
under such coverage be more than the limits of underinsured motorist
coverage provided.
(B) An insured entitled to benefits under an uninsured motorist
provision is not entitled to benefits under an underinsured motorist
provision. An insured entitled to benefits under an underinsured
motorist provision is not entitled to benefits under an uninsured motorist
provision.
(C) Insurers shall offer on a form prescribed by the Chief
Insurance Commissioner `nonstackable' policies of underinsured
motorist coverage containing policy provisions establishing that if the
insured accepts this offer:
(1) Regardless of the number of vehicles involved, persons
covered, number of premiums paid, or vehicles or premiums shown on
the policy or policies under which the insured might otherwise be
entitled to benefits, the coverage provided as to two or more motor
vehicles under the same or different policies may not under any
circumstances be added together, combined with, or stacked to
determine the limit of insurance coverage available to an injured person
for any one accident, except as provided in item (3) of this subsection
(C).
(2) If at the time of the accident the injured person is occupying
a motor vehicle, the underinsured motorist coverage available to him is
the coverage available as to that motor vehicle.
(3) If the injured person is occupying a motor vehicle which is not
owned by him or by a family member residing with him, he is entitled
to the highest limits of underinsured motorist coverage afforded for any
one vehicle as to which he is named insured. Such coverage is excess
over the coverage on the vehicle he is occupying.
(4) The underinsured motorist coverage provided by the policy
does not apply to the named insured who is injured while occupying any
vehicle owned by the named insured for which underinsured motorist
coverage was not purchased.
(5) If at the time of the accident the injured person is not
occupying a motor vehicle, he is entitled to select any one limit of
underinsured motorist coverage for any one vehicle afforded by a policy
under which he is insured as a named insured.
(6) In connection with the offer authorized by this subsection,
insurers shall inform the named insured, applicant, or lessee, on a form
prescribed by the chief insurance commissioner, of the limitations
imposed under this subsection and that such coverage is an alternative
to coverage without such limitations. If this form is signed by a named
insured, applicant, or lessee, it is conclusively presumed that there was
an informed, knowing acceptance of such limitations, and neither the
insurance company nor the insurance agent has any liability to the
insured for the insured's failure to purchase stackable coverage. When
the named insured, applicant, or lessee has initially accepted such
limitations, the acceptance applies to any policy which renews, extends,
changes, supersedes, reinstates or replaces an existing policy unless the
named insured requests deletion of the limitations and pays the
appropriate premium for the coverage.
(D) If an insured is entitled to uninsured motorist or
underinsured motorist coverage under more than one policy the
maximum amount the insured may recover may not exceed the highest
limit of such coverage provided for any one vehicle under any one
policy. If more than one policy applies, the following is the order of
priority: (1) a policy covering a motor vehicle occupied by the injured
person at the time of the accident; (2) a policy covering a motor vehicle
not involved in the accident under which the injured person is named
insured; (3) a policy covering a motor vehicle not involved in the
accident under which the injured person is an insured other than a named
insured. Coverage available under a lower priority policy applies only
to the extent it exceeds the coverage of a higher priority policy. The
underinsured motorist coverage does not apply to bodily injury,
sickness, or death of an insured while occupying a motor vehicle owned
by, furnished, or available for the regular use of the insured, a resident
spouse, or resident relative, if such motor vehicle is not described in the
policy under which a claim is made, or is not a newly acquired or
replacement vehicle covered under the terms of the policy.
(E) Underinsured motorist Benefits
benefits paid pursuant to this section are not subject to
subrogation and assignment.
(F) No action may be brought under the underinsured
motorist provision unless copies of the pleadings in the action
establishing liability are served in the manner provided by law upon the
insurer writing the underinsured motorist provision. The insurer has the
right to appear and defend in the name of the underinsured motorist in
any action which may affect its liability and has thirty days after service
of process on it in which to appear. The evidence of service upon the
insurer may not be made a part of the record. In the event the
automobile insurance insurer for the putative at-fault insured chooses to
settle in part the claims against its insured by payment of its applicable
liability limits on behalf of its insured, the underinsured motorist insurer
may assume control of the defense of action for its own benefit. No
underinsured motorist policy may contain a clause requiring the insurer's
consent to settlement with the at-fault party.
Insurers offering uninsured motorist coverage must file with the
commissioner no more than ninety days after the effective date of this
act revised premium rates for this coverage to be effective on all policies
of automobile insurance containing such coverage issued on or renewed
with effective dates on or after January 1, 1995. The revised rate must
be approved by the commissioner and reflect a reduction in the currently
approved premium rate for this coverage of at least eighteen percent;
provided, however, that after December 31, 1995, an insurer may apply
to the Chief Insurance Commissioner for a rate adjustment for such
coverage, based on its actual experience. In the first year following such
reductions, an insurer may apply to the Chief Insurance Commissioner
for a rate adjustment, based on its actual experience, and include
consideration of the time value of money."
SECTION 7. Section 56-9-350 of the 1976 Code is amended to read:
"Section 56-9-350. The operator or owner of a motor vehicle
involved in an accident resulting in property damage of four hundred
dollars or more or in bodily injury or death, must be furnished a
written request form at the time of the accident, or as soon after the
accident as possible, by the investigating officer for completion and
verification of liability insurance coverage, the form to be in a manner
prescribed by the Department.
The completed and verified form must be returned by the operator or
owner to the Department within fifteen days from the date the form was
delivered by the officer. Failure to return the form, verified in the proper
manner, is prima facie evidence that the vehicle was uninsured.
The operator or owner of a motor vehicle involved in an accident
resulting in property damage of four hundred dollars or more, or in
bodily injury or death, which was not investigated by a law enforcement
officer shall furnish to the Department a written report and verification
of liability insurance coverage, the proof to be in a manner prescribed by
the Department within fifteen days after the accident, shall
forward a written report of the accident to the department on a form
prescribed by the department. The report must contain information to
enable the department to determine whether the requirements for the
deposit of security under Section 56-9-351 are inapplicable by reason of
the existence of insurance or other exceptions specified in this title.
Failure to file the report, in the proper verified manner, is prima facie
evidence that the vehicle was not registered in compliance with this
title."
SECTION 8. Section 56-10-10 of the 1976 Code is amended to read:
"Section 56-10-10. Every owner of a motor vehicle
required to be registered in this State shall maintain the security required
by Section 56-10-20 with respect to each such motor vehicle owned by
him throughout the period the registration is in effect. Security
must be maintained on every motor vehicle required to be registered in
this State where the owners or other operators not excluded in
accordance with Section 38-77-340, reside in the same household and
are insureds under the same policy, if one of the owners or other
operators do not qualify for the safe driver discount in Section 38-73-760(E). Such security must be maintained with respect to each such
motor vehicle owned by him throughout the period the registration is in
effect. No certificate of registration may be issued or transferred to
an owner by the executive director unless the owner or prospective
owner produces satisfactory evidence that the security is in effect,
including the name of the owner's automobile liability insurer, the name
of the agent, the identification number of the insurance policy, and the
effective dates of the policy, except in cases where other security is
approved."
SECTION 9. Section 56-10-220 of the 1976 Code is amended to read:
"Section 56-10-220. Every person required to provide
security on a motor vehicle as provided in Section 56-10-10
applying for registration for a motor vehicle shall at the time of such
registration and licensing declare the vehicle to be an insured motor
vehicle under the penalty set forth in Section 56-10-260 and shall
execute and furnish to the department his certificate that such motor
vehicle is an insured motor vehicle and that he will maintain insurance
thereon during the registration period. The certificate must be in the
form prescribed by the department. The department may require any
registered owner or any applicant for registration and licensing of a
motor vehicle declared to be an insured motor vehicle to submit a
certificate of insurance executed by an authorized agent or representative
of an insurance company authorized to do business in this State. Such
certificate must also be in a form prescribed by the department."
SECTION 10. Section 56-10-240 of the 1976 Code is amended to
read:
"Section 56-10-240. If, during the period for which it is
licensed, a motor vehicle for which security is required as provided
in Section 56-10-10 is or becomes an uninsured motor vehicle, then
the vehicle owner immediately shall obtain insurance on the vehicle or
within five days after the effective date of cancellation or expiration of
his liability insurance policy surrender the motor vehicle license plates
and registration certificates issued for the motor vehicle. If five working
days after the last day to pay an automobile liability insurance premium,
whether it is the premium due date or a grace period that is granted
customarily or contractually a motor vehicle is an uninsured motor
vehicle, the insurer shall give written notice, or notice by magnetic or
electronic media in a manner considered satisfactory to the department,
within ten days after the five-day period ends, in addition to that notice
previously given in accordance with law, by delivery under United
States Post Office bulk certified mail, return receipt requested, to the
department of the cancellation or refusal to renew under the following
circumstances:
(1) the lapse or termination of such insurance or security occurs
within three months of issuance provided that this subsection only
applies to new policies, and not renewal or replacement policies; or
(2) the lapse or termination occurs after three months for a resident
who fails one or more of the objective standards prescribed in
Section 38-73-455 who does not qualify for the safe driver
discount in Section 38-73-760(E). The department may, in its
discretion, authorize insurers to utilize alternative methods of providing
notice of cancellation of or refusal to renew to the department. The
department may not reissue registration certificates and license plates for
that vehicle until satisfactory evidence has been filed by the owner or by
the insurer who gave the cancellation or refusal to renew notice to the
department that the vehicle is insured. Upon receiving information to the
effect that a policy is canceled or otherwise terminated on a motor
vehicle registered in South Carolina, the department shall suspend the
license plates and registration certificate and shall initiate action as
required within fifteen days of the notice of cancellation to pick up the
license plates and registration certificate. A person who has had his
license plates and registration certificate suspended by the department,
but who at the time of suspension possesses liability insurance coverage
sufficient to meet the financial responsibility requirements as set forth
in this chapter, has the right to appeal the suspension immediately to the
Chief Insurance Commissioner. If the commissioner determines that the
person has sufficient liability insurance coverage, he shall notify the
department, and the suspension is voided immediately. The department
shall give notice by first class mail of the cancellation or suspension of
registration privileges to the vehicle owner at his last known address.
However, when license plates are surrendered pursuant to this section,
they must be held at the department office in the county where the
person who surrenders the plates resides.
If the vehicle owner unlawfully refuses to surrender the suspended
items as required in this article, the department through its designated
agents or by request to a county or municipal law enforcement agency
may take possession of the suspended license plates and registration
certificate and may not reissue the registration until proper proof of
liability insurance coverage is provided and until the owner has paid a
reinstatement fee of two hundred dollars for the first refusal under this
section, and three hundred dollars for each subsequent refusal. A person
who voluntarily surrenders his license plates and registration certificate
before their suspension shall only be charged a reinstatement fee of five
dollars.
A person wilfully failing to return his motor vehicle license plates and
registration certificates as required in this section is guilty of a
misdemeanor and, upon conviction, must be punished as follows:
(1) for a first offense, fined not less than one hundred dollars nor
more than two hundred dollars or imprisoned for thirty days;
(2) for a second offense, fined two hundred dollars or imprisoned for
thirty days, or both;
(3) for a third and subsequent offense, imprisoned for not less than
forty-five days nor more than six months.
Only convictions which occurred within ten years including and
immediately preceding the date of the last conviction constitute prior
convictions within the meaning of this section."
SECTION 11. Chapter 10, Title 56 of the 1976 Code is amended by
adding:
"Article 5
Registration and Licensing of
Uninsured Motor Vehicles
Section 56-10-510. As used in this article:
(1) `Conviction' includes the entry of any plea of guilty or nolo
contendere and the forfeiture of any bail or collateral deposited to secure
a defendant's appearance.
(2) `Insured motor vehicle' is a motor vehicle as to which (a) there
is bodily injury liability insurance and property damage liability
insurance, both in the amounts specified in Section 38-77-140, issued by
an insurer authorized to do business in this State, (b) a bond has been
given or cash or securities delivered in lieu of the insurance, or (c) the
owner has qualified as a self-insurer in accordance with the provisions
of Section 56-9-60; and
(3) `Uninsured motor vehicle' is a motor vehicle required to be
registered as to which (a) there is no bodily injury liability insurance and
property damage liability insurance, (b) no bond has been given or cash
or securities delivered in lieu thereof, and (c) the owner has not qualified
as a self-insurer.
(4) `Department' is the South Carolina Department of Highways and
Public Transportation.
Section 56-10-520. In addition to any other fees prescribed by law,
every person registering and licensing an uninsured motor vehicle, as
defined in Section 56-10-510, in this State shall pay, at the time of
registering and licensing an uninsured motor vehicle, the sum of two
hundred and fifty dollars. Credit for payment made on a motor vehicle
subsequently transferred during the same licensing year must be applied
to any motor vehicle thereafter registered by the uninsured motorist
during the same licensing year. Every person knowingly operating an
uninsured motor vehicle pursuant to this section shall not be deemed in
violation of Section 56-10-270.
Section 56-10-530. The department of Highways and Public
Transportation may require that a person applying for licensing and
registration of a motor vehicle shall certify under the penalties set forth
in Section 56-10-260 whether or not each motor vehicle is an insured
motor vehicle as defined in Section 56-10-510 or the department may in
its discretion require that a person (a) produce as evidence of financial
responsibility a certificate on a form prescribed by the department of
insurance or self-insurance complying with the requirements of Section
56-9-60, (b) has given bond or delivered the cash or securities as
provided in Sections 56-9-570 and 56-9-580, respectively, or (c) pay the
fee prescribed in Section 56-10-520.
Section 56-10-560. All funds collected by the department under the
provisions of this article must be deposited to the credit of the State
Treasurer and monthly transferred to a special deposit fund to be known
as the `Uninsured Motorists Fund' to be disbursed as provided in Section
56-10-570 to 56-10-590.
Section 56-10-570. The fund is under the supervision and control of
the Chief Insurance Commissioner and must be paid out, on warrants of
the Comptroller General issued on vouchers signed by the commissioner
or persons he designates, for the purpose of defraying the costs of
administration of this article by the department and for reducing the
operating losses of the Reinsurance Facility as provided in Section 56-10-580. As determined by the commissioner, when the recoupment fee
is no longer necessary to pay for losses incurred by the facility as a
result of the phasing out of the facility as provided for by Section 38-77-1310, the fund must be paid out for financing of driver safety measurers
and for enforcing the uninsured motorist laws of the state as determined
by the General Assembly.
Section 56-10-580. The Chief Insurance Commissioner annually,
prior to September 30 of each year, shall make distribution from the
fund as follows:
(1) to the department, the amount certified by it as its administrative
costs and expenses for this article. These payments may be made on a
quarterly basis.
(2) to the Reinsurance Facility to reduce the operating losses of the
Facility for the twelve month period in which they are collected and to
reduce the recoupment charges prescribed in Section 38-77-1310
assessed to drivers with the safe driver discount.
(3) to finance driver safety measures and enforce the uninsured
motorist laws of the state as determined by the General Assembly, when
the recoupment fee is no longer necessary to pay for losses incurred by
the Facility, determined by the commissioner, as a result of the phasing
out of the Facility as provided for by Section 38-77-1310.
Section 56-10-590. The Chief Insurance Commissioner may
promulgate regulations necessary to implement the provisions of this
article.
Section 56-10-610. This article does not repeal any other provision
contained in this title, but is cumulative to such other provisions."
SECTION 12. Section 38-77-110(A) of the 1976 Code, as last
amended by Act 148 of 1989, is further amended to read:
"(A) Automobile insurers other than insurers designated and
approved as specialized insurers by the commissioner may not refuse to
write or renew automobile insurance policies for individual private
passenger automobiles if the risk qualifies for the safe driver
discount in Section 38-73-760(e) or small commercial risks. These
policies may not be canceled except for reasons which had they existed
or been known when the policy was written would have rendered the
risk not an insurable risk. Every automobile insurance risk constitutes
an insurable risk unless the operator's permit of the named insured has
been revoked or suspended and is at the time of application for insurance
so revoked or suspended. However, no insurer is required to write or
renew automobile insurance on any risk if there exists a valid and
enforceable outstanding judgment secured by an insurer, an agent, or
licensed premium service company on account of automobile insurance
premiums which the applicant or insured or any principal operator who
is a member of the named insured's household has failed or refused to
pay unless the applicant or insured pays in advance the entire premium
for the full term of the policy sought to be issued or renewed or the
annual premium, whichever is the lesser. No insurer is required to
write or renew private passenger automobile insurance if the risk does
not qualify for the safe driver discount in Section 38-73-760(e). An
insurer is not precluded from effecting cancellation of an automobile
insurance policy, either upon its own initiative or at the instance of an
agent or licensed premium service company, because of the failure of
any named insured or principal operator to pay when due any
automobile insurance premium or any installment payment. However,
notice of cancellation for nonpayment of premium notifies the person to
whom the notice is addressed that the notice is void and ineffective if
payment of the full amount of the premium or premium indebtedness,
whichever is the greater, is made to the insurer, agent, or licensed
premium service company named in the notice by the otherwise
effective date of cancellation. This notice of cancellation is not
considered ineffective for being conditional, ambiguous, or
indefinite."
SECTION 13. Section 38-77-110(C) of the 1976 Code, as added by
Act 148 of 1989, is amended to read:
"(C) With regard to any coverage not required to be
written by an insurer under the mandate to write, no No
insurer may refuse to write or renew such policy, coverage, or
endorsement of automobile insurance because of the race, color, creed,
national origin, or ancestry, or income of anyone who
seeks to become insured."
SECTION 14. Section 38-77-110 of the 1976 Code, as last amended
by Act 148 of 1989, is further amended by adding:
"(D) An applicant denied coverage must be provided in
writing by the denying insurer the reason or reasons for which the
applicant has been refused insurance by that insurer, at the time of the
denial."
SECTION 15. Chapter 77 of Title 38 of the 1976 Code is amended
by adding:
"Article 13
Joint Underwriting Association
Section 38-77-1310. (A) The Reinsurance Facility is abolished
effective October 1, 1994. There is created the South Carolina Joint
Underwriting Association. The administration of the phase out of the
Facility is transferred to the Joint Underwriting Association.
(B) As of July 1, 1996, the Facility recoupment charge must not be
included in the rate or premium charged by the insurers of private
passenger automobile insurance to drivers who qualify for the safe driver
discount. If any losses are incurred as a result of the operation of the
Facility, the losses attributable to the Facility must be distributed among
insured drivers as provided in subsection (C) until the commissioner
determines all of the losses have been accounted for, unless provided
otherwise.
(C) Consistent with subsection (B), the rate or premium charged by
insurers of private passenger automobile insurance must include a
recoupment charge, which must be added to the appropriate rate to
compensate for any remaining losses incurred by the Facility as a result
of its operation. The operating losses of the Facility for a twelve-month
period must be recouped in the subsequent twelve-month period.
(1) Prior to December first of each year, the governing board shall
calculate the recoupment amount, by coverage, by dividing the net
Facility operating loss, adjusted to reflect prudently incurred expenses,
consistent with the provisions of Section 38-73-465, and the time value
of money, by mandated coverage for the preceding Facility accounting
year, by the total number of earned car years in South Carolina, by
coverage, for the same period of time. .368 multiplied by the
recoupment is to be borne by risks having zero surcharge points under
the Uniform Merit Plan promulgated by the commissioner. The
remainder of the recoupment (.614 multiplied by the recoupment)
represents R in the formula P1X +2P2X +3P3X + 4P4X + 5P5X + 6P6X
+ 7P7X + 8P8X + 9P9X + 10P10X = R. In this formula to be utilized
in determining the Facility recoupment charge:
(a) P1 is the percentage of risks which have one surcharge
point under the Uniform Merit Rating Plan;
(b) P2 is the percentage of risks which have two surcharge
points under the Uniform Merit Rating Plan;
(c) P3 is the percentage of risks which are subject to a
surcharge of three points under the Uniform Merit Rating Plan;
(d) P4 is the percentage of risks which are subject to a
surcharge of four points under the Uniform Merit Rating Plan;
(e) P5 is the percentage of risks subject to a surcharge of five
points under the Uniform Merit Rating Plan;
(f) P6 is the percentage of risks subject to a surcharge of six
points under the Uniform Merit Rating Plan;
(g) P7 is the percentage of risks subject to a surcharge of seven
points under the Uniform Merit Rating Plan;
(h) P8 is the percentage of risks subject to a surcharge of eight
points under the Uniform Merit Rating Plan;
(i) P9 is the percentage of risks subject to a surcharge of nine
points under the Uniform Merit Rating Plan;
(j) P10 or more is the percentage of risks subject to a surcharge
of ten or more points under the Uniform Merit Rating Plan;
(k) X is the dollar amount by coverage, to be charged all risks
having one surcharge point under the Uniform Merit Rating Plan
promulgated by the commissioner. This dollar amount, by coverage, is
the Facility recoupment charge to be added to the rate for all risks which
have one surcharge point.
(2) The Facility recoupment charge by coverage to be added to
the rate for all risks which have one surcharge point under the Uniform
Merit Rating Plan is calculated by multiplying X by a factor of one.
(3) The Facility recoupment charge by coverage to be added to
the rate for all risks which have two surcharge points under the Uniform
Merit Rating Plan is calculated by multiplying X by a factor of two.
(4) The Facility recoupment charge by coverage to be added to
the rate for all risks which are subject to a surcharge of three points
under the Uniform Merit Rating Plan is calculated by multiplying X by
a factor of three.
(5) The Facility recoupment charge by coverage to be added to
the rate for all risks which are subject to a surcharge of four points under
the Uniform Merit Rating Plan is calculated by multiplying X by a factor
of four.
(6) The Facility recoupment charge by coverage to be added to
the rate for all risks which are subject to a surcharge of five points under
the Uniform Merit Rating Plan is calculated by multiplying X by a factor
of five.
(7) The Facility recoupment charge by coverage to be added to
the rate for all risks which are subject to a surcharge of six points under
the Uniform Merit Rating Plan is calculated by multiplying X by a factor
of six.
(8) The Facility recoupment charge by coverage to be added to
the rate for all risks which are subject to a surcharge of seven points
under the Uniform Merit Rating Plan is calculated by multiplying X by
a factor of seven.
(9) The Facility recoupment charge by coverage to be added to
the rate for all risks which are subject to a surcharge of eight points
under the Uniform Merit Rating Plan is calculated by multiplying X by
a factor of eight.
(10) The Facility recoupment charge by coverage to be added to
the rate for all risks which are subject to a surcharge of nine points under
the Uniform Merit Rating Plan is calculated by multiplying X by a factor
of nine.
(11) The Facility recoupment charge by coverage to be added to
the rate for all risks which are subject to a surcharge of ten or more
points under the Uniform Merit Rating Plan is calculated by multiplying
X by a factor of ten.
(12) In determining the number of surcharge points a risk has for
the purposes of this section, no surcharge points assigned under the
Uniform Merit Rating Plan because the principal operator of the
automobile has not been licensed in any state for at least one year
immediately preceding the writing of the risk or as a result of a failure
of any motor vehicle equipment requirement may be considered.
(13) This section applies to all private passenger automobile
insurance policies.
Section 38-77-1330. As used in this article:
(1) `Association' means the South Carolina Joint Underwriting
Association established pursuant to this article.
(2) `Net direct premiums' means gross direct premiums written on
automobile liability insurance as computed by the Chief Insurance
Commissioner less return premiums or the unused or unabsorbed
portions of premium deposits.
Section 38-77-1340. (A) A joint underwriting association is
created consisting of all automobile insurers licensed to write within this
State automobile insurance policies. Every such insurer is and must
remain a member of the association as a condition of its authority to
continue to transact this kind of insurance in this State.
(B) The purpose of the association is to provide automobile
insurance on a self-supporting basis to the fullest extent possible.
Section 38-77-1350. The association has the power on behalf of its
members to make agreements among themselves with respect to the
equitable apportionment among them of insurance which may be
afforded applicants who are in good faith entitled to or have lost their
safe driver discount, but are unable to procure such insurance through
ordinary methods, and such insurers may agree among themselves on the
use of reasonable rate modifications for such insurance. Such
agreements and rate modifications shall be subject to the approval of the
department.
Section 38-77-1360. (A) The department shall, after consultation
with the insurers licensed to write automobile liability insurance in this
State, adopt a reasonable plan or plans for the equitable apportionment
among such insurers of applicants for such insurance who are in good
faith entitled to or have lost their safe driver discount, but are unable to,
procure such insurance through ordinary methods, and, when such plan
has been adopted, all such insurers shall subscribe thereto and shall
participate therein. Such plan or plans shall include rules for
classification of risks and rates therefor by driver classification and
territory. Any insured placed with the plan shall be notified of the fact
that insurance coverage is being afforded through the plan and not
through the private market, and such notification shall be given in
writing within ten days of such placement. To assure that plan rates are
made adequate to pay claims and expenses, insurers shall develop a
means of obtaining loss and expense experience at least annually, and
the plan shall file such experience, when available, with the department
in sufficient detail to make a determination of rate adequacy.
(B) The plan of operation shall provide for economic, fair, and
nondiscriminatory administration and for the prompt and efficient
provision of insurance and may contain other provisions, including, but
not limited to, preliminary assessment of all members for initial
expenses necessary to commence operations, establishment of necessary
facilities, management of the association, assessment of the members to
defray losses and expenses, commission arrangements, reasonable and
objective underwriting standards, appointment of servicing carriers, and
procedures for determining amounts of insurance to be provided by the
association.
(C) Trend factors shall not be found to be inappropriate if not in
excess of trend factors normally used in the development of residual
market rates by the appropriate licensed rating organization. Each
application for coverage in the plan shall include, in boldfaced 12-point
type immediately preceding the applicant's signature, the following
statement:
`THIS INSURANCE IS BEING AFFORDED THROUGH THE
SOUTH CAROLINA JOINT UNDERWRITING ASSOCIATION AND
NOT THROUGH THE PRIVATE MARKET. PLEASE BE ADVISED
THAT COVERAGE WITH A PRIVATE INSURER MAY BE
AVAILABLE FROM ANOTHER AGENT AT A LOWER COST.
AGENT AND COMPANY LISTINGS ARE AVAILABLE IN THE
LOCAL YELLOW PAGES.'
(D) The plan of operation shall provide that any profit achieved by
the association must be added to the reserves of the association or
returned to the policyholders as a dividend but under no circumstances
whatsoever shall any profit be paid over to or received by an insurer
either in currency or any other benefit of any kind.
(E) Amendments to the plan of operation may be made by the
directors of the association with the approval of the commissioner or
must be made at the direction of the commissioner after proper notice
and public hearing.
(F) The association may not write private passenger automobile
insurance with higher limits of coverage than:
(1) two hundred fifty thousand dollars, for bodily injury liability
to one person in one accident,
(2) subject to the limit for one person, five hundred thousand
dollars because of bodily injury to two or more persons in one accident,
(3) one hundred thousand dollars because of injury to or
destruction of property of others in any one accident,
(4) five hundred thousand dollars, combined single limits for
either or both bodily injury and property damage.
(G) If a driver covered by the association has not been able to
purchase insurance on the voluntary market after five consecutive years
of maintaining a safe driver discount, the driver must be placed by the
association with an automobile insurance company doing business in the
voluntary market in this State. The company must be chosen based on
its percentage of automobile insurance business written in this State on
the voluntary market. The company must charge the driver the
company's preferred or standard rate according to driver classification
and territory. A driver assigned under this provision may not be refused
insurance until the driver fails to qualify for the safe driver discount.
This provision does not preclude the driver from seeking automobile
insurance coverage on the voluntary market at any other time.
Section 38-77-1370. The rates, rating plans, rating rules, rating
classifications, territories, and policy forms applicable to insurance
written by the association and the statistical and experience data relating
thereto are subject to this article and to those provisions of Chapter 73
of Title 38 which are not inconsistent with this article.
Section 38-77-1380. The commissioner shall obtain complete
statistical data in respect to automobile insurance losses and reparation
costs as well as all other costs or expenses which underlie or are related
to automobile insurance. The commissioner shall promulgate any
statistical plan he considers necessary for the purpose of gathering data
referable to loss and loss adjustment expense experience and other
expense experience. When the statistical plan is promulgated, the
association shall adopt and use it.
Section 38-77-1390. In structuring rates and determining the profit
or loss of the association in respect to such insurance, consideration
must be given by the commissioner to all investment income so that
investment income is a part of the ratemaking and ratesetting process.
Section 38-77-1395. No later than sixty days after the passage of
this act, the board must file with the commissioner rates for private
passenger automobile insurance liability coverages, uninsured motorist
coverages, and underinsured motorist coverages. All of these rates are
subject to surcharges or discounts, if any, applicable under any approved
Merit Rating Plan, credit, or discount plan promulgated or approved by
the commissioner. The board must file:
(1) a standard rate by driver classification and territory twenty
percent less than the substandard rate defined in (2). This rate applies
to all private passenger automobile insurance risks which qualify for the
safe driver discount and are insured directly by or ceded to the
association; and
(2) a `substandard' rate by driver classification and territory which
applies to all private passenger automobile insurance risks which do not
qualify for the safe driver discount and are insured directly by or ceded
to the association.
These two rates must be construed so that when the experience
generated by them is combined, the association is able to provide private
passenger automobile insurance on a self-supporting basis.
Upon the approval of these rates, they must be utilized for all private
passenger automobile insurance risks either ceded to or insured directly
by the association. No insurer or group of insurers under the same
management may cede more than thirty-five percent of total direct
cedeable written premiums on South Carolina automobile insurance as
reported in the most recently filed annual statement of the insurer or
group. The association must submit policy forms, rating plans, and
rating rules applicable to insurance to be written by the association to the
commissioner for his approval.
Section 38-77-1400. The premium rate charged for coverage must
be at rates established on an actuarially sound basis, including
consideration of trends in the frequency and severity of losses and must
be calculated to be self-supporting.
Section 38-77-1410. The association may provide a rate increase or
assessment subject to the commissioner's approval.
Section 38-77-1420. Any deficit sustained by the association in any
year must be recouped, pursuant to the plan of operation and the rating
plan then in effect by a rate increase applicable prospectively. The
commissioner has the authority to authorize and must approve any
recoupment under this section.
Section 38-77-1430. After the initial year of operation, rates, rating
plans, and rating rules and any provision for recoupment through
policyholder assessment or premium rate increase must be based upon
the association's loss and expense experience and investment income,
together with any other information based upon this experience and
income as the commissioner considers appropriate. The resultant
premium rates must be on an actuarially sound basis and must be
calculated to be self-supporting.
If sufficient funds are not available for the sound financial operation
of the association, pending recoupment as provided in Section 38-77-1420, all members, on a temporary basis, shall contribute to the financial
requirements of the association in the manner provided for in Section
38-77-1440. Any such contribution must be reimbursed to the members
following recoupment as provided in Section 38-77-1420.
Section 38-77-1440. All insurers which are members of the
association shall participate in its writings, expenses, and losses in the
proportion that the net direct premiums of each member, excluding that
portion of premiums attributable to the operation of the association,
written during the preceding calendar year bear to the aggregate net
direct premiums written in this State by all members of the association.
Each insurer's participation in the association must be determined
annually on the basis of the net direct premiums written during the
preceding calendar year, as reported in the annual statements and other
reports filed by the insurer with the commissioner. The assessment of
a member insurer may after hearing be ordered deferred in whole or in
part upon application by the insurer if, in the opinion of the
commissioner, payment of the assessment would render the insurer
insolvent or in danger of insolvency or would otherwise leave the insurer
in such condition that further transaction of the insurer's business would
be hazardous to its policyholders, creditors, members, subscribers,
stockholders, or the public. In the event that payment of an assessment
against a member insurer is deferred by order of the commissioner in
whole or in part, the amount by which the assessment is deferred must
be assessed against other member insurers in the same manner as
provided in this section. In its order of deferral, or in such subsequent
orders as may be necessary, the commissioner shall prescribe a plan by
which the assessment so deferred must be repaid to the association by
the impaired insurer with interest at the six-month treasury bill rate
adjusted semiannually. Any profits, dividends, or other funds of the
association to which the insurer is otherwise entitled may not be
distributed to the impaired insurer but must be applied toward repayment
of any assessment until the obligation has been satisfied. The
association shall distribute the repayments, including any interest
thereon, to the other member insurers on the basis at which assessments
were made.
Section 38-77-1450. Every member of the association is bound by
the approved plan of operation of the association and the rules of the
board of directors of the association.
Section 38-77-1460. (A) If the authority of an insurer to transact
automobile insurance in this State terminates for any reason, its
obligations as a member of the association continue until all its
obligations are fulfilled and the commissioner has so found and certified
to the board of directors.
(B) If a member insurer merges into or consolidates with another
insurer authorized to transact insurance in this State or another insurer
authorized to transact insurance in this State has reinsured the insurer's
entire automobile insurance business in this State, both the insurer and
its successor or assuming reinsurer, as the case may be, are liable for the
insurer's obligations to the association.
(C) Any unsatisfied net liability of any insolvent member of the
association must be assumed by and apportioned among the remaining
members in the same manner in which assessments or gain and loss are
apportioned and the association shall acquire and have all rights and
remedies allowed by law in behalf of the remaining members against the
estate or funds of the insolvent insurer for funds due the association.
Section 38-77-1470. The joint underwriting association is governed
by a board of seven directors, one of whom is appointed by the
Governor to represent the general public and four of whom are
appointed by the Governor and represent automobile insurers who are
members of the association. Two directors, appointed by the Governor,
are agents authorized to represent automobile insurers licensed to do
business in this State.
The approved plan of operation of the association may make
provision for combining insurers under common ownership or
management into groups for voting, assessment, and all other purposes
and may provide that not more than one of the officers or employees of
such a group may serve as a director at any one time. The board of
directors shall elect a chairman by majority vote and he, or his designee,
must preside at all meetings of the board.
Section 38-77-1480. Any applicant for insurance through the
association or any insurer adversely affected, or claiming to be adversely
affected, by any ruling, action, or decision by or on behalf of the
association, may appeal to the commissioner within thirty days after the
ruling, action, or decision.
Section 38-77-1490. The association shall file in the office of the
commissioner annually by March first a statement containing
information with respect to its transactions, condition, operations, and
affairs during the preceding year. The statement shall contain
information prescribed by the commissioner and must be in the form he
directs. The commissioner, at any reasonable time, may require the
association to furnish additional information concerning its transactions,
condition, or any matter connected therewith considered to be material
and of assistance in evaluating the scope, operations, and experience of
the association.
Section 38-77-1500. The commissioner shall make an examination
into the financial condition and affairs of the association at least
annually and shall file a report thereon with the Commission, the
Governor, and the General Assembly. The expenses of the examination
must be paid by the association."
SECTION 16. Section 38-73-455 of the 1976 Code, as last amended by
Act 113 of 1991, is further amended to read:
"Section 38-73-455. (A) An automobile insurer
shall offer two four different rates for automobile
insurance, a base rate as defined in Section 38-73-457 and an
objective standards rate which is twenty-five percent above the base
rate. Both All of these rates are subject to all
surcharges or discounts, if any, applicable under any approved merit
rating plan, credit, or discount plan promulgated or approved
by the commissioner.
(B) No later than ninety days after the passage of this act,
insurers of automobile insurance must file with the commissioner
revised rates for all other private passenger automobile insurance
policies written by them. Each insurer must file:
(1) a `preferred' rate by driver classification and territory, which
is a rate less than the standard rate defined herein. This rate applies to
private passenger automobile insurance risks which qualify for the safe
driver discount; and
(2) a `standard' rate which must be the approved base rate as
defined in Section 38-73-457, by driver classification and territory in
effect on July 1, 1994. This rate applies to private passenger automobile
insurance risks which qualify for the safe driver discount; and
(3) a `nonpreferred' rate by driver classification and territory,
which is a rate more than the standard rate but less than the rate by
driver classification and territory for the substandard rate and is
applicable to all private passenger automobile insurance risks; and
(4) a `substandard' rate by driver classification and territory,
which is a rate more than the nonpreferred rate but less than or equal to
the substandard rate by driver classification and territory for the South
Carolina Joint Underwriting Association, as provided for in Article 13
of Chapter 77 of Title 38, and is applicable to all private passenger
automobile risks.
(C) The commissioner must approve the rates filed pursuant to
subsection (A). If the rates are approved, the rates shall become
effective for all policies of automobile insurance issued or renewed with
effective dates on or after January 1, 1995.
(D) Insurers may place any automobile insurance risk at any of the
four rate levels without restriction unless provided otherwise in this
chapter. An insurer or agent shall provide written notice to the insurer
of the tier at which coverage is being written for the insured and the
reasons the insured was written in that particular tier. However, the
Uniform Merit Rating Plan must continue to apply to all risks written by
them.
(E) An applicant and all operators of the insured automobile who
have qualified for the safe driver discount for the last five years and who
reside in the same household, and the automobile or the automobile it
replaced has been insured for liability coverage for the past twelve
months must be written at the preferred or standard rate and may not be
ceded to the Joint Underwriting Association. A driver who is claimed
as a dependent for income tax purposes is not required to meet the five
year requirement as long as the dependent qualifies for the safe driver
discount.
(F) An applicant and all operators of the insured automobile who
have qualified for the safe driver discount for the last ten years and who
reside in the same household and the automobile or the automobile it
replaced has been insured for liability coverage for the past twelve
months must be written at the preferred rate and may not be ceded to the
Joint Underwriting Association. A driver who is claimed as a dependent
for income tax purposes is not required to meet the ten year requirement
as long as the dependent qualifies for the safe driver discount.
(G) All policies of automobile insurance issued or renewed with
effective dates on or after October 1, 1994, that are written by
automobile insurers designated pursuant to Section 38-77-590(A), for
risks written by them through producers designated pursuant to that
same section, and all policies ceded to the Joint Underwriting
Association by automobile insurers must be written at the rates provided
for in Section 38-77-1395. However, the Uniform Merit Rating Plan
must apply to all such risks.
(H) The Board of Directors of the association must file rates by
driver classification and territory for both liability coverages and
uninsured motorist coverage.
Applicants, or a current policyholder, seeking automobile
insurance with an insurer must be written at the base rate, unless one of
the conditions or factors in subitems (1) through (8) of item (A) is
present.
(A) The named insured or any operator who is not excluded in
accordance with Section 37-77-340 and who resides in the same
household or customarily operates an automobile insured under the same
policy, individually:
(1) has obtained a policy of automobile insurance or continuation
thereof through material misrepresentation within the preceding thirty-six months; or
(2) has had convictions for driving violations on three or more
separate occasions within the thirty-six months immediately preceding
the effective date of coverage as reflected by the motor vehicle record
of each insured driver as maintained by the Department of Highways
and Public Transportation; or
(3) has had two or more `chargeable' accidents within the thirty-six
months immediately preceding the effective date of coverage. A
`chargeable' accident is defined as one resulting in bodily injury to any
person in excess of three hundred dollars per person, death, or damage
to the property of the insured or other person in excess of seven hundred
fifty dollars. Accidents occurring under the circumstances enumerated
below are not considered chargeable.
(a) The automobile was lawfully parked. An automobile
rolling from a parked position is not considered as lawfully parked but
is considered as operated by the last operator.
(b) The applicant or other operator or owner was reimbursed
by or on behalf of a person responsible for the accident or has a
judgment against this person.
(c) The automobile of an applicant or other operator was struck
in the rear by another vehicle and the applicant or other operator has not
been convicted of a moving traffic violation in connection with the
accident.
(d) The operator of the other automobile involved in the
accident was convicted of a moving traffic violation and the applicant
or other operator was not convicted of a moving traffic violation in
connection therewith.
(e) An automobile operated by the applicant or other operator
is damaged as a result of contact with a `hit and run' driver, if the
applicant or other operator so reports the accident to the proper authority
within twenty-four hours or, if the person is injured, as soon as the
person is physically able to do so.
(f) Accidents involving damage by contact with animals or
fowl.
(g) Accidents involving physical damage, limited to an caused
by flying gravel, missiles, or falling objects.
(h) Accidents occurring as a result of the operation of any
automobile in response to an emergency if the operator at the time of the
accident was responding to a call of duty as a paid or volunteer member
of any police or fire department, first aid squad, or any law enforcement
agency. This exception does not include an accident occurring after the
emergency situation ceases or after the private passenger motor vehicle
ceases to be used in response to the emergency; or
(4) has had one `chargeable' accident and two convictions for
driving violations, all occurring on separate occasions, within the thirty-six months immediately preceding the effective date of coverage as
reflected by the motor vehicle record of each insured driver as
maintained by the Department of Highways and Public Transportation;
or
(5) has been convicted of or forfeited bail during the thirty-six
months immediately preceding the effective date of coverage for
operating a motor vehicle while in an intoxicated condition or while
under the influence of drugs; or
(6) has been convicted or forfeited bail during the thirty-six
months immediately preceding the effective date for:
(a) any felony involving the use of a motor vehicle,
(b) criminal negligence resulting in death, homicide, or assault
arising out of the operation of a motor vehicle,
(c) leaving the scene of an accident without stopping to report,
(d) theft or unlawful taking of a motor vehicle,
(e) operating during a period of revocation or suspension of
registration or license,
(f) Knowingly permitting an unlicensed person to drive,
(g) reckless driving,
(h) the making of material false statements in the application
for licenses or registration,
(i) impersonating an applicant for license or registration or
procuring a license or registration through impersonation, whether for
himself or another,
(j) filing of a false or fraudulent claim or knowingly aiding or
abetting another in the presentation of such a claim,
(k) failure to stop a motor vehicle when signaled by means or
a siren or flashing light by a law enforcement vehicle; or
(7) has for thirty or more consecutive days during the twelve
months immediately preceding the effective date of coverage, owned or
operated the automobile to be insured (or if newly acquired, the
automobile it replaces) without liability coverage in violation of the laws
of this State; or
(8) has used the insured automobile as follows or if the insured
automobile is:
(a) used in carrying passengers for hire or compensation,
except that the use of an automobile for a car pool must not be
considered use of an automobile for hire or compensation,
(b) used in the business of transportation of flammables or
explosives,
(c) used in illegal operation, or
(d) no longer principally used and garaged within the State, but
not to include students who are operating a motor vehicle registered in
this State while attending an institution located in another state.
(B) In the event that one or more of the conditions or factors
prescribed in items (1) through (8) of subsection (A) exist, the motor
vehicle customarily operated by that individual must be written at the
objective standards rate.
(C) (I) Member companies of an affiliated group of
automobile insurers may not utilize different filed rates for
automobile insurance coverages which they are mandated by law to
write. For the purpose of this section, an affiliated group of
automobile insurers includes a group of automobile insurers under
common ownership, management, or control. Those automobile
insurers designated pursuant to Section 38-77-590(a), for automobile
insurance risks written by them through producers designated by the
Facility governing board pursuant to that section, shall utilize the rates
or premium charges by coverage filed and authorized for use by the
rating organization licensed by the Commissioner pursuant to Article 11,
Chapter 73 of this title, which has the largest number of members or
subscribers for automobile insurance rates. However, those automobile
insurers designated pursuant to Section 38-77-590(a) are not required to
use those same rates or premium charges described in the preceding
sentence for risks written by them through their authorized agents not
appointed pursuant to Section 38-77-590.
(D) (J) An automobile insurance policy may be
endorsed at any time during the policy period to reflect the correct rate
or premium applicable by reason of the factors or conditions described
in subsection (A) which existed prior to the commencement of the policy
period in which the endorsement is made, regardless of whether the
factors or conditions were known or disclosed to the insurer at the
commencement of the policy period. However, no No
policy may be endorsed during a policy period to reflect factors or
conditions occurring during that policy period. A policy may be
endorsed during a policy period to recognize the addition or deletion of
an operator or vehicle.
(E) For purposes of determining the applicable rates to be charged
an insured, an automobile insurer shall obtain and review an applicant's
motor vehicle record."
SECTION 17. Section 38-73-760 of the 1976 Code, as last amended by
Act 148 of 1989, is further amended by adding:
"(g) No surcharge may be assessed for the first conviction of
speeding less than twenty miles per hour if the person convicted has
maintained the safe driver discount for the previous three years.
(h) No surcharge may be assessed for convictions of the following
violations occurring on or after January 1, 1995: failing to dim lights;
operating with improper lights; operating with improper brakes; or
operating a vehicle in unsafe condition." SECTION 18. Section
56-10-270 of the 1976 Code is amended to read:
"Section 56-10-270. (a) Any person knowingly operating an
uninsured motor vehicle subject to registration in this State or any
person knowingly allowing the operation of an uninsured motor vehicle
subject to registration in this State is guilty of a misdemeanor and, upon
conviction, must be punished as follows:
(1) for a first offense, fined not less than one
two hundred dollars nor more than two three
hundred dollars or imprisoned for thirty days or may be ordered to
perform up to fifty public service hours, or a combination of these,
and,
(2) upon conviction of a second offense, be fined
two three hundred dollars or imprisoned for thirty days
or perform up to one hundred public service hours, or a combination
of these, or both, and
(3) for a third and subsequent offenses must be
imprisoned for not less than forty-five days nor more than six months
and be fined up to four hundred dollars or serve up to two hundred
public service hours, or a combination of these. Only convictions
which occurred within five years including and immediately preceding
the date of the last conviction constitute prior convictions within the
meaning of this section. An uninsured motor vehicle includes an insured
vehicle with respect to which the operator has been excluded from
coverage pursuant to the provisions of Section 38-77-340.
(b) The department upon receipt of information to the effect that any
person has been convicted of violating subsection (a) of this section
shall suspend the driving privilege and all license plates and registration
certificates issued in the person's name for a period of thirty days for
a first offense, for a period of ninety days for a second offense, and for
a period of six months for a third and each subsequent offense.
and may not reinstate that The person's privileges
may not be reinstated until proof of financial responsibility has
been filed.
(c) Any person whose license plates and registration certificates
which are suspended as provided in this section, which are not
suspended for any other reason, may have them immediately restored,
if he files proof of financial responsibility with the department."
SECTION 19. The 1976 Code is amended by adding:
"Section 38-77-116. Upon issuance of a new private passenger
automobile insurance policy, the insurance company or agent must
review with the new applicant a list of driving offenses and the related
fine and punishment, as well as the possible increase in the rates, the
effect of any surcharges, or the effect of the loss of the safe driver
discount. This list must be on a form approved by the Chief Insurance
Commissioner and must accompany the policy."
SECTION 20. After September 30, 1994, the governing board of the
Joint Underwriting Association, enacted pursuant to Article 13 of
Chapter 77 of Title 38 of the 1976 Code as contained in this act, shall
contract with one or more insurers or business entities to serve as the
designated carrier and shall establish a procedure for the selection of the
designated carrier. In developing this procedure, the board must
establish criteria which will assure the designated carrier's ability to
adequately provide policy-writing and claims service. However, the
board may not require that the designated carrier be a licensed insurance
company. Designated carrier contracts must be for a period of three
years and must be awarded upon the terms and conditions for
competitive sealed bidding as provided in Section 11-35-1520 of the
1976 Code.
If the designated carrier fails two claims audits, including a re-audit,
within the contract term, the designated carrier is disqualified for
renewal of its contract with the Facility upon expiration of its existing
contract. Designated carrier contracts awarded pursuant to this section
must provide that the failure of two claims audits, including a re-audit,
during the contract term constitutes a material breach of the contract.
After July 1, 1994, the governing board of the association may not
designate any new producers.
Commissions paid to agents for policies ceded to or placed in the
Joint Underwriting Association shall be set by the association's board of
directors.
SECTION 21. The 1976 Code is amended by adding:
"Section 38-77-175. (A) When the operator or owner of a
motor vehicle is issued a traffic ticket for a moving violation by a law
enforcement officer, he must be furnished a written request form to
complete to verify liability insurance coverage. The form must be in a
manner prescribed by regulation of the Department of Highways and
Public Transportation.
(B) The completed and verified form must be returned by the
operator or owner to the department within fifteen days from the date he
receives it. Failure to return the form verified in the proper manner is
prima facie evidence that the vehicle was uninsured.
(C) Any fine collected for a violation of Section 56-10-270, relating
to driving uninsured, as a result of this section must be deposited in the
treasury of the municipality or the county employing the law
enforcement officer who issued the original ticket, if such law
enforcement officer is a municipal or county employee, or in the general
fund of the State, if the law enforcement officer who issued the original
ticket is an employee of a state agency or department."
SECTION 22. The 1976 Code is amended by adding:
"Section 56-7-12. (A) When the operator or owner of a motor
vehicle is issued a traffic ticket for a moving violation by a law
enforcement officer, he must be furnished a written request form to
complete to verify liability insurance coverage. The form must be in a
manner prescribed by regulation of the Department of Highways and
Public Transportation.
(B) The completed and verified form must be returned by the
operator or owner to the department within fifteen days from the date he
receives it. Failure to return the form verified in the proper manner is
prima facie evidence that the vehicle was uninsured.
(C) Any fine collected for a violation of Section 56-10-270, relating
to driving uninsured, as a result of this section must be deposited in the
treasury of the municipality or the county employing the law
enforcement officer who issued the original ticket, if such law
enforcement officer is a municipal or county employee, or in the general
fund of the State, if the law enforcement officer who issued the original
ticket is an employee of a state agency or department."
SECTION 23. Article 5 of Chapter 77 of Title 38 of the 1976 Code
and Sections 38-73-1420, 38-73-1425, 38-77-285, 38-77-920, 38-77-940, 38-77-950, and 38-77-960 are repealed on October 1, 1994.
SECTION 24. Section 38-77-111 of the 1976 Code, as added by Act
148 of 1989, is amended to read:
"Section 38-77-111. An automobile insurer may cede the
coverages of an automobile insurance policy that it is mandated to write
to the Reinsurance Facility Joint Underwriting
Association but it may not cede coverages under a policy that it is
not mandated by law to write except for tort liability coverage and
uninsured motorist coverage for those risks that do not qualify for the
safe driver discount. However, if an insurer cedes a coverage it is
mandated to write by law, it shall cede all coverages under that policy
that it is mandated to write."
SECTION 25. If any provision of the act or the application thereof to
any person or circumstance is held to be unconstitutional or otherwise
invalid, the remainder of this act and the application of such provision
to other persons or circumstances are not affected thereby, and it is to be
conclusively presumed that the legislature would have enacted the
remainder of this act without such invalid or unconstitutional provision.
SECTION 26. Except as otherwise specifically provided herein, this
act takes effect upon approval by the Governor.
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