S*1102 Session 107 (1987-1988)
S*1102(Rat #0423, Act #0394 of 1988) General Bill, By
Senate Banking and Insurance
A Bill to amend Section 38-71-190, Code of Laws of South Carolina, 1976,
relating to the insurer's right of subrogation in policies of accident and
health insurance, so as to allow the chief insurance commissioner to disallow
subrogation if, after petition by the insured, he determines the subrogation
to be inequitable; to amend the 1976 Code by adding Section 38-71-335 so as to
prohibit the writing of individual or family accident, health, or accident and
health insurance policies which allow the insurer to cancel the policy on a
date other than the anniversary or premium due date and policies which are
optionally renewable and to require thirty-one days' written notice of
nonrenewal; to amend Section 38-71-340, relating to mandatory provisions in
accident, health, or accident and health insurance policies, so as to revise
the required provisions; to amend Section 38-71-370, relating to optional
provisions in life insurance policies, so as to revise the required
provisions; to amend Section 38-71-610, relating to notice of premiums due for
accident or health insurance policies, so as to revise a term; to amend the
1976 Code by adding Section 38-71-735 so as to provide mandatory provisions
for group accident, group health, or group accident and health insurance
policies; to amend Section 38-71-810, relating to readjustment of premiums for
group accident, group health, or group accident and health insurance policies,
so as to clarify terms; to amend Section 38-71-1010, relating to the
definition of blanket accident and health insurance, so as to expand the
definition; to amend Section 38-71-1110, relating to the definition of
accident and health insurance in a franchise plan, so as to revise the
definition; to amend Sections 38-55-50 and 38-71-200, relating to the
prohibition on discrimination between insureds of the same class or hazard, so
as to allow statutory exceptions; to amend the 1976 Code by adding Section
38-55-180 so as to provide for the safeguarding of premiums of industrial
insurance; and to repeal Sections 38-71-130, 38-71-180, 38-71-380, 38-71-390,
38-71-400, 38-71-820, and Article 7, Chapter 71 of Title 38 relating to
accident and health insurance.-amended title
01/26/88 Senate Introduced, read first time, placed on calendar
without reference SJ-19
01/28/88 Senate Read second time SJ-38
01/28/88 Senate Ordered to third reading with notice of
amendments SJ-38
02/02/88 Senate Amended SJ-36
02/02/88 Senate Reconsidered SJ-38
02/03/88 Senate Amended SJ-26
02/16/88 Senate Read third time and sent to House SJ-13
02/17/88 House Introduced and read first time HJ-1231
02/17/88 House Referred to Committee on Labor, Commerce and
Industry HJ-1232
02/24/88 House Committee report: Favorable Labor, Commerce and
Industry HJ-1419
03/01/88 House Read second time HJ-1563
03/02/88 House Read third time and enrolled HJ-1603
03/15/88 Ratified R 423
03/21/88 Signed By Governor
03/21/88 Effective date 12/01/88
03/21/88 Act No. 394
03/29/88 Copies available
(A394, R423, S1102)
AN ACT TO AMEND SECTION 38-71-190, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO THE INSURER'S RIGHT OF SUBROGATION IN POLICIES OF ACCIDENT AND HEALTH
INSURANCE, SO AS TO ALLOW THE CHIEF INSURANCE COMMISSIONER TO DISALLOW
SUBROGATION IF, AFTER PETITION BY THE INSURED, HE DETERMINES THE SUBROGATION TO
BE INEQUITABLE; TO AMEND THE 1976 CODE BY ADDING SECTION 38-71-335 SO AS TO
PROHIBIT THE WRITING OF INDIVIDUAL OR FAMILY ACCIDENT, HEALTH, OR ACCIDENT AND
HEALTH INSURANCE POLICIES WHICH ALLOW THE INSURER TO CANCEL THE POLICY ON A DATE
OTHER THAN THE ANNIVERSARY OR PREMIUM DUE DATE AND POLICIES WHICH ARE OPTIONALLY
RENEWABLE AND TO REQUIRE THIRTY-ONE DAYS' WRITTEN NOTICE OF NONRENEWAL; TO AMEND
SECTION 38-71-340, RELATING TO MANDATORY PROVISIONS IN ACCIDENT, HEALTH, OR
ACCIDENT AND HEALTH INSURANCE POLICIES, SO AS TO REVISE THE REQUIRED PROVISIONS;
TO AMEND SECTION 38-71-370, RELATING TO OPTIONAL PROVISIONS IN LIFE INSURANCE
POLICIES, SO AS TO REVISE THE REQUIRED PROVISIONS; TO AMEND SECTION 38-71-610,
RELATING TO NOTICE OF PREMIUMS DUE FOR ACCIDENT OR HEALTH INSURANCE POLICIES, SO
AS TO REVISE A TERM; TO AMEND THE 1976 CODE BY ADDING SECTION 38-71-735 SO AS TO
PROVIDE MANDATORY PROVISIONS FOR GROUP ACCIDENT, GROUP HEALTH, OR GROUP ACCIDENT
AND HEALTH INSURANCE POLICIES; TO AMEND SECTION 38-71-810, RELATING TO
READJUSTMENT OF PREMIUMS FOR GROUP ACCIDENT, GROUP HEALTH, OR GROUP ACCIDENT AND
HEALTH INSURANCE POLICIES, SO AS TO CLARIFY TERMS; TO AMEND SECTION 38-71-1010,
RELATING TO THE DEFINITION OF BLANKET ACCIDENT AND HEALTH INSURANCE, SO AS TO
EXPAND THE DEFINITION; TO AMEND SECTION 38-71-1110, RELATING TO THE DEFINITION
OF ACCIDENT AND HEALTH INSURANCE IN A FRANCHISE PLAN, SO AS TO REVISE THE
DEFINITION; TO AMEND SECTIONS 38-55-50 AND 38-71-200, RELATING TO THE PROHIBITION
ON DISCRIMINATION BETWEEN INSUREDS OF THE SAME CLASS OR HAZARD, SO AS TO ALLOW
STATUTORY EXCEPTIONS; TO AMEND THE 1976 CODE BY ADDING SECTION 38-55-180 SO AS
TO PROVIDE FOR THE SAFEGUARDING OF PREMIUMS OF INDUSTRIAL INSURANCE; AND TO
REPEAL SECTIONS 38-71-130, 38-71-180, 38-71-380, 38-71-390, 38-71-400, 38-71-820,
AND ARTICLE 7, CHAPTER 71 OF TITLE 38 RELATING TO ACCIDENT AND HEALTH INSURANCE.
Be it enacted by the General Assembly of the State of South Carolina:
Subrogation
SECTION 1. Section 38-71-190 of the 1976 Code is amended to read:
"Section 38-71-190. Any policy or contract of accident and health
insurance issued in this State may include provision for subrogation by the
insurer to the insured's right of recovery against a liable third party for not
more than the amount of insurance benefits that the insurer has paid previously
in relation to the insured's injury by the liable third party. If the
Commissioner, upon being petitioned by the insured, determines that the exercise
of subrogation by an insurer is inequitable and commits an injustice to the
insured, subrogation is not allowed. Attorneys' fees and costs must be paid by
the insurer from the amounts recovered."
Cancellation
SECTION 2. Subarticle 1, Article 3, Chapter 71, Title 38 of the 1976 Code is
amended by adding:
"Section 38-71-335. (A) No individual or family accident, health, or
accident and health insurance policy may contain a provision which gives the
insurer the right to cancel the policy. 'To cancel' means to terminate a policy
at a date other than the policy anniversary date or the premium due date.
(B) Individual or family accident, health, or accident and health insurance
policies may not be written on an optionally renewable basis. 'Optionally
renewable' means a contract of insurance in which the insurer reserves the right
to terminate the coverage at the policy anniversary date. Optionally renewable
does not include the following categories of policies as defined by the
Commissioner by regulation: (1) 'nonrenewable for stated reasons only' and (2)
'conditionally renewable'. Term insurance is not considered insurance written on
an optionally renewable basis.
(C) An individual or family accident, health, or accident and health insurance
policy which may be nonrenewed, may be nonrenewed at the policy anniversary date
or premium due date. The insurer shall give the insured at least thirty-one days'
written notice of nonrenewal. Nonrenewal by the insurer is without prejudice to
any claims originating before the effective date of nonrenewal."
Required provisions
SECTION 3. Section 38-71-340 of the 1976 Code is amended to read:
"Section 38-71-340. Except as provided in Section 38-71-410, each
accident, health, or accident and health policy delivered or issued for delivery
to an individual in this State must contain the provisions specified in this
section, in the words in which they appear in this section. The insurer, at its
option, may substitute for one or more of these provisions corresponding
provisions of different wording approved by the Commissioner which are in each
instance not less favorable in any respect to the insured or the beneficiary.
These provisions must be preceded individually by the caption appearing in this
section or, at the option of the insurer, by appropriate individual or group
caption or subcaptions approved by the Commissioner.
(1) A provision as follows:
ENTIRE CONTRACT; CHANCES: This policy, with the application and attached papers,
if any, is the entire contract between the insured and the company.
No change in this policy is effective until approved by a company officer. This
approval must be noted on or attached to this policy. No agent may change this
policy or waive any of its provisions.
(2) A provision as follows:
TIME LIMIT ON CERTAIN DEFENSES: After two years from the issue date only
fraudulent misstatements in the application may be used to void the policy or
deny any claim for loss incurred or disability that starts after the two-year
period.
A policy which the insured has the right to continue in force subject to its
terms by the timely payment of premium (a) until at least age fifty or (b) in the
case of a policy issued after age forty-four, for at least five years from its
date Or issue, may contain in lieu of the foregoing the following provision (from
which the clause in parenthesis may be omitted at the insurer's option):
INCONTESTABLE:
(a) Misstatements in the application:
After this policy has been in force for two years during the insured's lifetime
(excluding any period during which the insured is disabled), the company cannot
contest the statements contained in the application.
(b) Preexisting conditions:
No claim for loss incurred or disability that starts after two years from the
issue date will be reduced or denied because a sickness or physical condition not
excluded by name or specific description before the date of loss had existed
before the effective date of coverage.
(3) A provision as follows:
GRACE PERIOD: This policy has a _____ day grace period. This means that if a
renewal premium is not paid on or before the date it is due, it may be paid
during the following days. During the grace period the policy will stay in force.
[Note: Insert a number not less than 'seven' for weekly premium policies, 'ten'
for monthly premium policies, and 'thirty-one' for all other policies.]
(4) A provision as follows:
REINSTATEMENT: If the renewal premium is not paid before the grace period ends
the policy will lapse. Later acceptance of the premium by the company or by an
agent authorized to accept payment without requiring an application for
reinstatement will reinstate the policy. If the company or its agent requires an
application, the insured will be given a conditional receipt for the premium. If
the application is approved, the policy will be reinstated as of the approval
date. Lacking such approval, the policy will be reinstated on the forty-fifth day
after the date of the conditional receipt unless the company has previously
written the insured of its disapproval. The reinstated policy will cover only
loss that results from an injury sustained after the date of reinstatement or
sickness that starts more than ten days after such date.
In all other respects the rights of the insured and the company will remain the
same, subject to any provisions noted on or attached to the reinstated policy.
Any premiums the company accepts for reinstatement will be applied to a period
for which premiums have not been paid. No premiums will be applied to any period
more than sixty days before the reinstatement date.
[The last sentence of the above provision may be omitted from any policy which
the insured has the right to continue in force subject to its terms by the timely
payment of premiums (a) until at least age fifty or (b) in the case of a policy
issued after age forty-four, for at least five years from its date of issue.]
(5) A provision as follows:
NOTICE OF CLAIM: Written notice of claim must be given within twenty days after
a covered loss starts or as soon as reasonably possible. The notice may be given
to the company at its home office or to the company's agent. Notice should
include the name of the insured and the policy number.
Optional paragraph: If the insured has a disability for which benefits may be
payable for at least two years, at least once every six months after the insured
has given notice of claim, the insured shall give the company notice that the
disability has continued. The insured need not do this if legally incapacitated.
The first six months after any filing of proof by the insured or any payment or
denial of a claim by the company will not be counted in applying this provision.
If the insured delays in giving this notice, the insured's right to any
benefits for the six months before the date when the insured gives notice will
not be impaired.
(6) A provision as follows:
CLAIM FORMS: When the company receives notice of claim, it will send the
claimant forms for filing proof of loss. If these forms are not given to the
claimant within fifteen days the claimant will meet the proof of loss
requirements by giving the company a written statement of the nature and extent
of the loss within the time limits stated in the Proofs of
Loss section.
(7) A provision as follows:
PROOFS OF LOSS: If the policy provides for periodic payment for a continuing
loss, written proof of loss must be given the company within ninety days after
the end of each period for which the company is liable. For any other loss,
written proof must be given within ninety days after such loss. If it was not
reasonably possible to give written proof in the time required, the company may
not reduce or deny the claim for this reason if the proof is filed as soon as
reasonably possible. The proof required must be given no later than one year from
the time specified unless the claimant was legally incapacitated.
(8) a provision as follows:
TIME OF PAYMENT OF CLAIMS: After receiving written proof of loss, the company
will pay _____ [insert period for payment which may not be less frequently than
monthly] all benefits then due for _____ [insert applicable term for type of
benefits].
(9) A provision as follows:
PAYMENT OF CLAIMS: Benefits will be paid to the insured. Loss of life benefits
are payable in accordance with the beneficiary designation in effect at the time
of payment. If none is then in effect, the benefits will be paid to the insured's
estate. Any other benefits unpaid at death may be paid, at the company's option,
either to the insured's beneficiary or estate.
Optional paragraph: If benefits are payable to the insured's estate or a
beneficiary who cannot execute a valid release, the company can pay benefits up
to one thousand dollars to someone related to the insured or beneficiary by blood
or marriage whom the company considers to be entitled to the benefits. The
company will be discharged to the extent of any such payment made in good faith.
Optional paragraph: The company may pay all or a portion of any indemnities
provided for health care services to the provider, unless the insured directs
otherwise in writing by the time proofs of loss are filed. The company cannot
require that the services be rendered by a particular provider.
(10) A provision as follows:
PHYSICAL EXAMINATIONS AND AUTOPSY: The company at its own expense may have the
insured examined as often as reasonably necessary while a claim is pending and
in cases of death of the insured the insurer at its own expense also may have an
autopsy performed during the period of contestability unless prohibited by law.
The autopsy must be performed in South Carolina.
(11) A provision as follows:
LEGAL ACTIONS: No legal action may be brought to recover on this policy within
sixty days after written proof of loss has been given as required by this policy.
No such action may be brought after six years from the time written proof of loss
is required to be given.
(12) A provision as follows:
CHANGE OF BENEFICIARY: The insured can change the beneficiary at any time by
giving the company written notice. The beneficiary's consent is not required for
this or any other change in the policy, unless the designation of the beneficiary
is irrevocable.
(13) A provision as follows:
CONFORMITY WITH STATE STATUTES: Any provision of this policy which, on its
effective date, is in conflict with the laws of the state in which the insured
resides on that date is amended to conform to the minimum requirements of such
laws."
Misstatement of age
SECTION 4. Section 38-71-370(2) of the 1976 Code is amended to read:
"(2) A provision as follows:
MISSTATEMENT OF AGE: If the insured's age has been misstated, the benefits will
be those the premium paid would have purchased at the correct age."
Required provision
SECTION 5. Section 38-71-370(3) of the 1976 Code is amended to read:
"(3) A provision as follows:
OTHER INSURANCE IN THIS INSURER:
If the insured has more than one policy ________ [insert designation for
limitation such as policy form-type-form], only one policy chosen by the insured
will be effective. The company shall refund all premiums paid for all the other
policies.
Optional paragraph: If the insured has more than one policy with this company
providing a total indemnity for_____ [insert type of coverage or coverages] of
more than $_________ [insert maximum limit of indemnity or indemnities] the
excess insurance is void. The premiums paid for the excess must be returned to
the insured.
On every application for insurance the insurer shall ask for the amount of
insurance which the applicant currently has in force with such insurer. If the
insurer fails to ascertain the amount of insurance which an applicant has in
force, all policies issued by the insurer to the applicant remain in force an the
insurer is liable for all benefits payable thereunder, unless the applicant has
misrepresented the amount of existing coverage on the application.
In all cases where the applicant indicates that other life, accident, and
health insurance is in force with the insurer or the insurer's company, the
insurer shall provide the applicant with the total amount of existing coverage
with the insurer or insurer's company within sixty days."
Unpaid premiums
SECTION 6. Section 38-71-370(7) of the 1976 Code is amended to read:
"(7) A provision as follows:
UNPAID PREMIUM: When a claim is paid, any premium due and unpaid may be deducted
from the claim payment."
Illegal occupation
SECTION 7. Section 38-71-370(8) of the 1976 Code is amended to read:
"(8) A provision as follows:
ILLEGAL OCCUPATION: The company is not liable for any loss which results from
the insured committing or attempting to commit a felony or from the insured
engaging in an illegal occupation."
Intoxicants and narcotics
SECTION 8. Section 38-71-370(9) of the 1976 Code is amended to read:
"(9) A provision as follows:
INTOXICANTS AND NARCOTICS: The company is not liable for any loss resulting from
the insured being drunk or under the influence of any narcotic unless taken on
the advice of a physician."
Required provision
SECTION 9. Section 38-71-610(2) of the 1976 Code is amended to read:
"(2) This section may not be construed to relieve any policyholder from
paying any premium or portion thereof, nor may it be construed so as to prevent
termination for any other valid reason."
Group policy
SECTION 10. Article 5, Chapter 71, Title 38 of the 1976 Code is amended by
adding:
"Section 38-71-735. No policy of group accident, group health, or group
accident and health insurance may be delivered in this State unless it contains
in substance the following provisions, or provisions which in the opinion of the
Commissioner are more favorable to the persons insured, or at least as favorable
to the persons insured, and more favorable to the policyholder. However, (1)
items (f) and (k) do not apply to policies issued to a creditor; (2) the standard
provisions required for individual policies do not apply to group policies; and
(3) if any provision of this section is in whole or in part inapplicable to or
inconsistent with the coverage provided by a particular form of policy, the
insurer, with the approval of the Commissioner, shall omit from the policy any
inapplicable provision or part of a provision, and shall modify any inconsistent
provision or part of the provision in a manner as to make the provision contained
in the policy consistent with coverage provided by the policy.
(a) A provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except the first, during which grace
period the policy continues in force, unless the policyholder has given the
insurer written notice of discontinuance in advance of the date of discontinuance
and in accordance with the terms of the policy. The policy may provide that the
policyholder is liable to the insurer for the payment of a pro rata premium for
the time the policy was in force during the grace period.
(b) A provision that the validity of the policy may not be contested after it
has been in force for two years from its date of issue and that no statement,
except fraudulent misstatements, made by any person covered under the policy
relating to insurability may be used in contesting the validity of the insurance
with respect to which the statement was made after the insurance has been in
force prior to the contest for a period of two years during the person's lifetime
nor unless it is contained in a written instrument signed by the person making
the statement. The provision does not preclude the assertion at any time of
defenses based upon the person's ineligibility for coverage under the policy or
upon other provisions in the policy.
(c) A provision that a copy of the application, if any, of the policyholder
must be attached to the policy when issued, that all statements made by the
policyholder or by the persons insured are considered representations and not
warranties, and that no statement made by any person insured may be used in any
contest unless a copy of the instrument containing the statement is or has been
furnished to the person or, in the event of the death or incapacity of the
insured person, to the individual's beneficiary or personal representative.
(d) A provision setting forth the conditions if any, under which the insurer
reserves the right to require a person eligible for insurance to furnish evidence
of individual insurability satisfactory to the insurer as a condition to part or
all of the individual's coverage.
(e) If the premiums or benefits vary by age, there must be a provision
specifying an equitable adjustment of premiums or of benefits, or both, to be
made in the event the age of a covered person has been misstated. The provision
must contain a clear statement of the method of adjustment to be used.
(f) A provision that the insurer will issue to the policyholder for delivery
to each person insured a certificate setting forth a statement as to the
insurance protection to which that person is entitled, to whom the insurance
benefits are payable, and a statement as to any family member's or dependent's
coverage.
(g) A provision that written notice of claim must be given to the insurer
within twenty days after the occurrence or commencement of any loss covered by
the policy. Failure to give notice within the time does not invalidate nor reduce
any claim if it can be shown not to have been reasonably possible to give the
notice and that notice was given as soon as was reasonably possible.
(h) A provision that the insurer will furnish to the person making claim, or
to the policyholder for delivery to such person, such forms as are usually
furnished by it for filing proof of loss. If the forms are not furnished before
the expiration of fifteen days after the insurer received notice of any claim
under the policy, the person making the claim is considered to have complied with
the requirements of the policy as to proof of loss upon submitting within the
time fixed in the policy for filing proof of loss, written proof covering the
occurrence, character, and extent of the loss for which claim is made.
(i) A provision that in the case of claim for loss of time for disability,
written proof of the loss must be furnished to the insurer within ninety days
after the commencement of the period for which the insurer is liable, and that
subsequent written proofs of the continuance of the disability must be furnished
to the insurer at intervals the insurer may reasonably require, and that in the
case of claim for any other loss, written proof of the loss must be furnished to
the insurer within ninety days after the date of the loss. Failure to furnish
proof within the time does not invalidate nor reduce any claim if it was not
reasonably possible to furnish the proof within that time so long as the proof
is furnished as soon as reasonably possible and in no event, except in the
absence of legal capacity of the claimant, later than one year from the time
proof is otherwise required.
(j) A provision that all benefits payable under the policy other than benefits
for loss of time will be paid not more than sixty days after receipt of proof of
the loss. Subject to proof of loss, all accrued benefits payable under the policy
for loss of time will be paid not less frequently than monthly during the
continuance of the period for which the insurer is liable, and that any balance
remaining unpaid at the termination of liability will be paid as soon as possible
after receipt of the proof.
(k) A provision that benefits for loss of life of the person insured are
payable to the beneficiary designated by the person insured. If the policy
contains conditions pertaining to family status the beneficiary may be the family
member specified by the policy terms. In either case, payment of these benefits
is subject to the provisions of law of this State if no such designated or
specified beneficiary is living at the death of the person insured. All other
benefits of the policy are payable to the person insured. The policy also may
provide that if any benefit is payable to the estate of a person or to a person
who is a minor or otherwise not competent to give a valid release, the insurer
may pay the benefit, up to an amount not exceeding five thousand dollars, to any
relative by blood or connection by marriage of the person who is considered by
the insurer to be equitably entitled to the benefit.
(l) A provision that the insurer at its own expense may examine the person of
the individual for whom claim is made as often as reasonably necessary while a
claim is pending and in cases of death of the insured the insurer at its own
expense also may have an autopsy performed during the period of contestability
unless prohibited by law. The autopsy must be performed in this State.
(m) A provision that no action at law or in equity may be brought to recover
on the policy before the expiration of sixty days after written proof of loss has
been filed in accordance with the requirements of the policy and that no such
action may be brought at all unless brought within six years after the time
written proof of loss is required to be furnished.
(n) In the case of a policy issued to a creditor, a provision that the insurer
will furnish the policyholder for delivery to each debtor insured under the
policy a certificate of insurance describing the coverage and specifying that the
benefits payable first must be applied to reduce or extinguish the
indebtedness."
Group policy
SECTION 11. Section 38-71-810 of the 1976 Code is amended to read:
"Section 38-71-810. Any policy or contract of group accident, group
health, or group accident and health insurance may provide for readjustment of
the rate of premium based on experience thereunder at the end of the first year
or of any subsequent year of insurance thereunder. The readjustment may be
retroactive only for that policy year. Any refund under any plan for readjustment
of the rate of premium based on the experience under group policies and any
dividend paid under these policies may be used to reduce the policyholder's
contribution to group insurance for the insureds of the policyholder and the
excess over the contribution by the employer must be applied by the policyholder
for the sole benefit of the insureds."
Blanket policy
SECTION 12. Section 38-71-1010 of the 1976 Code is amended to read:
"Section 38-71-1010. 'Blanket accident and health insurance' is defined
to be that form of accident and health insurance covering special groups of
individuals as enumerated in one of the following items:
(1) under a policy or contract issued to any common carrier, which must be
considered the policyholder, covering a group defined as all individuals who may
become passengers on the common carrier;
(2) under a policy or contract issued to an employer, who must be considered
the policyholder, covering any group of employees defined by reference to
exceptional hazards incident to the employment;
(3) under a policy or contract issued to an employer, who is considered the
policyholder, covering employees or independent contractors, or both, under
contract to the employer while traveling to and from and while attending meetings
at a common location as a group or in groups incident to their employment or
contractual arrangement;
(4) under a policy or contract issued to a college, school, or other
institution of learning or to the head or principal thereof, which or who must
be considered the policyholder, covering students or teachers;
(5) under a policy or contract issued in the name of any volunteer fire
department, first aid, or other such volunteer group, which must be considered
the policyholder, covering all of the members of the department or group;
(6) under a policy or contract issued to any other similar group which, in the
discretion of the Commissioner, may be eligible for issuance of a blanket
accident and health policy or contract either under special circumstances,
exceptional hazards, or for short periods of duration."
Franchise plan
SECTION 13. Section 38-71-1110 of the 1976 Code is amended to read:
"Section 38-71-1110. 'Accident and health insurance on a franchise plan'
is that form of accident and health insurance issued to (1) three or more
employees of any corporation, copartnership, or individual employer or any
governmental corporation, agency, or department or (2) ten or more members of any
trade or professional association, labor union, or any other association having
had an active existence for at least two years when the association or union has
a constitution or bylaws and is formed in good faith for purposes other than that
of obtaining insurance, when (a) the insureds, with or without their dependents,
are issued the same form of an individual policy varying only as to amounts and
kinds of coverage applied for by the insureds and (b) the employer, union, or
association has approved and endorsed the policy being sold to its employees or
members. Accident and health insurance on a franchise plan may be written under
rates less than the usual rates for the insurance, but all premium rates and
discounts the insurer proposes to use must be filed with and approved by the
Commissioner as required by Section 38-71-310."
Discrimination
SECTION 14. Section 38-55-50 of the 1976 Code is amended to read:
"Section 38-55-50. An insurer, its agent, or an insurance broker doing
business in this State may not make or permit any discrimination in favor of
individuals between insureds of the same class and risk involving the same
hazards in the amount of the payment of premiums or rates charged for policies
of insurance except as provided in Sections 38-57-140, 38-65-310, and 38-71-1110,
in the dividends or other benefits payable, or in any other of the terms and
conditions of the contracts it makes. An insurer, its agent, or an insurance
broker may not make a contract of insurance or agreement as to a contract other
than as plainly expressed in the policy issued. An insurer or its officer, agent,
solicitor, or representative or an insurance broker may not pay, allow, or give
or offer to pay, allow, or give, directly or indirectly, as inducement to the
taking of insurance any rebate of premium payable on the policy, any special
favor or advantage in the dividends or other benefits to accrue from the policy,
any paid employment or contract for services of any kind, or any valuable
consideration or inducement not specified in the policy contract of insurance,
or give, sell, or purchase or offer to give, sell, or purchase, as inducement to
the taking of insurance or in connection therewith, any stocks, bonds, or other
securities of an insurer or other corporation, association, or partnership, any
dividends or profits to accrue from them, or anything of value not specified in
the policy."
Discrimination
SECTION 15. Section 38-71-200 of the 1976 Code is amended to read:
"Section 38-71-200. Discrimination between individuals of the same class
in the amount of premiums or rates charged for any policy of insurance covered
by this chapter, in the benefits payable thereon, in any of the terms or
conditions of the policy, or in any other manner whatsoever is prohibited except
as provided in Sections 38-57-140 and 38-71-1110. Whenever any policy of
insurance governed by this chapter provides for payment or reimbursement for any
service which is within the scope of practice of a licensed podiatrist, licensed
oral surgeon, or licensed optometrist, the insured or other person entitled to
benefits under the policy is entitled to payment or reimbursement in accordance
with the usual and customary fee for the services whether the services are
performed by a licensed physician or a licensed podiatrist, a licensed oral
surgeon, or a licensed optometrist, notwithstanding any provision contained in
the policy, and the policyholder, insured, or beneficiary has the right to choose
the provider of the services."
Owner
SECTION 16. Article 1, Chapter 55, Title 38 of the 1976 Code is amended by
adding:
"Section 38-55-180. No agent, collector, solicitor, or other employee or
representative of an insurer issuing contracts providing for sick, accident, or
death benefits and operating on the weekly or monthly industrial plan is
considered the owner of any part of the weekly or monthly debit collected by him
or that may be under his charge, care, control, or supervision. The debit is
considered wholly the property of the insurer in whose name the policies,
contracts, or obligations were written or assumed. No former agent, collector,
solicitor, superintendent, or other employee or representative of the insurer,
within a period of ninety days after the termination of his employment with the
insurer, may barter, sell, give, or in any manner transfer to any person or
insurer any part of any debit of the insurer or any policies or contracts of the
insurer, without the written consent of the insurer formerly employing him. The
Commissioner shall revoke the license of any person violating this section."
Repeal
SECTION 17. Sections 38-71-130, 38-71-180 38-71-380, 38-71-390, 38-71-400,
38-71-820, and Article 7, Chapter 71 of Title 38 of the 1976 Code are repealed.
Time effective
SECTION 18. This act takes effect December 1, 1988. |