H 4075 General Bill, By Sharpe, R. Smith and Altman
 A BILL TO AMEND SECTION 38-75-520, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO THE REQUIREMENT THAT INSURANCE CONTRACTS FOR LEGAL SERVICES MUST
 PROVIDE THE RIGHT OF AN ATTORNEY OF CHOICE, SO AS TO PROVIDE THAT ANY
 CONTRACTUAL OBLIGATION FOR REIMBURSEMENT OF LEGAL SERVICES SHALL CONTAIN A
 PROVISION PROVIDING THAT THE INSURED OR BENEFICIARY UNDER THE CONTRACT HAS THE
 RIGHT TO CHOOSE AN ATTORNEY TO PERFORM LEGAL SERVICES, AND TO PROVIDE THAT ANY
 CONTRACTUAL OBLIGATION FOR SPECIFIED LEGAL SERVICES UNDER A CLOSED PANEL PLAN
 ALSO MUST MAKE AVAILABLE SPECIFIED LEGAL COVERAGES UNDER A SEPARATE OPEN PANEL
 PLAN AND PROVIDE FOR RELATED MATTERS.

   05/11/99  House  Introduced and read first time HJ-25
   05/11/99  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-25

TO AMEND SECTION 38-75-520, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE REQUIREMENT THAT INSURANCE CONTRACTS FOR LEGAL SERVICES MUST PROVIDE THE RIGHT OF AN ATTORNEY OF CHOICE, SO AS TO PROVIDE THAT ANY CONTRACTUAL OBLIGATION FOR REIMBURSEMENT OF LEGAL SERVICES SHALL CONTAIN A PROVISION PROVIDING THAT THE INSURED OR BENEFICIARY UNDER THE CONTRACT HAS THE RIGHT TO CHOOSE AN ATTORNEY TO PERFORM LEGAL SERVICES, AND TO PROVIDE THAT ANY CONTRACTUAL OBLIGATION FOR SPECIFIED LEGAL SERVICES UNDER A CLOSED PANEL PLAN ALSO MUST MAKE AVAILABLE SPECIFIED LEGAL COVERAGES UNDER A SEPARATE OPEN PANEL PLAN AND PROVIDE FOR RELATED MATTERS.

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

SECTION 1. Section 38-75-520 of the 1976 Code is amended to read:

"Section 38-75-520. (A) Any A contractual obligation for reimbursement of legal services shall contain a provision providing that the insured or beneficiary under the contract has the right to choose an attorney to perform the legal services provided thereunder.

(B)(1) A contractual obligation for specified legal services under a closed panel plan also must make available specified legal coverages under a separate open panel plan, and such open panel plan may be based on a specified schedule of fees. Purchase of any prepaid legal insurance must not be made in connection with a loan transaction.

(2) There may be different changes between coverage in a closed panel plan and coverage in an open panel plan subject to approval by the director of the Department of Insurance.

(3) For purposes of subsection (B):

(a) 'Closed panel plan' means a plan that requires a covered person to obtain the specified legal services from an attorney or attorneys designated by the plan's sponsor.

(b) 'Open panel plan' means a plan that permits a covered person to obtain the specified legal services from an attorney or attorneys of choice."

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