S 705 Session 109 (1991-1992)
S 0705 General Bill, By Senate Banking and Insurance
A Bill to amend Section 38-77-600, as amended, Code of Laws of South Carolina,
1976, relating to the Reinsurance Facility recoupment charge, so as to revise
the calculation for the recoupment amount; and to repeal Section 38-77-605,
relating to the requirement that the recoupment charge be displayed on premium
notices and bills for private passenger automobile insurance.
02/26/91 Senate Introduced, read first time, placed on calendar
without reference SJ-6
Indicates Matter Stricken
Indicates New Matter
INTRODUCED
February 26, 1991
S. 705
Introduced by Banking and Insurance Committee
S. Printed 2/26/91--S.
Read the first time February 26, 1991.
A BILL
TO AMEND SECTION 38-77-600, AS AMENDED, CODE OF LAWS
OF SOUTH CAROLINA, 1976, RELATING TO THE REINSURANCE
FACILITY RECOUPMENT CHARGE, SO AS TO REVISE THE
CALCULATION FOR THE RECOUPMENT AMOUNT; AND TO
REPEAL SECTION 38-77-605, RELATING TO THE
REQUIREMENT THAT THE RECOUPMENT CHARGE BE
DISPLAYED ON PREMIUM NOTICES AND BILLS FOR PRIVATE
PASSENGER AUTOMOBILE INSURANCE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 38-77-600 of the 1976 Code, as last amended
by Act 148 of 1989, is further amended to read:
"Section 38-77-600. The rate or premium charged by insurers
of private passenger automobile insurance must include a facility
recoupment charge, which must be added to the appropriate base rate or
objective standards rate prescribed in Sections 38-73-455 and
38-73-457. The operating losses of the facility for a twelve-month
period must be recouped in the subsequent twelve-month period.
(1) Prior to Before December first of each
year, the governing board of the facility 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. .386 multiplied by the recoupment is to be bourne
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) rate by
coverage for risks which have one surcharge point represents R in
the formula, P(1)X + 2P(2)X + 3P(3)X + 4P(4)X + 5P(5)X + 6P(6)X +
7P(7)X + 8P(8)X + 9P(9)X + 10P(1)+10X = R. In this formula to be
utilized in determining the facility recoupment charge:
(a) P(1) is the percentage number of risks which
have one surcharge point under the Uniform Merit Rating Plan;
(b) P(2) is the percentage number of risks which
have two surcharge points under the Uniform Merit Rating Plan;
(c) P(3) is the percentage number of risks which
are subject to a surcharge of three points under the Uniform Merit
Rating Plan;
(d) P(4) is the percentage number of risks which
are subject to a surcharge of four points under the Uniform Merit Rating
Plan;
(e) P(5) is the percentage number of risks subject
to a surcharge of five points under the Uniform Merit Rating Plan;
(f) P(6) is the percentage number of risks subject
to a surcharge of six points under the Uniform Merit Rating Plan;
(g) P(7) is the percentage number of risks subject
to a surcharge of seven points under the Uniform Merit Rating Plan;
(h) P(8) is the percentage number of risks subject
to a surcharge of eight points under the Uniform Merit Rating Plan;
(i) P(9) is the percentage number of risks subject
to a surcharge of nine points under the Uniform Merit Rating Plan;
(j) P(1)+10 or more is the percentage number of
risks subject to a surcharge of ten or more points under the Uniform
Merit Rating Plan;
(k) X R 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 base rate or objective standards rate prescribed in Sections
38-73-455 and 38-73-457 for all risks which have one surcharge
point.
(l) X is the recoupment dollar amount by coverage to be
collected form risks having one or more surcharge points under the
Uniform Merit Rating Plan. X is calculated by taking the total
recoupment amount by coverage and subtracting the product of the
earned coverages for zero point risks times the safe driver recoupment
amount.
(2) The facility recoupment charge by coverage to be added to
the base rate or objective standards rate for all risks which have
one surcharge point under the Uniform Merit Rating Plan is calculated
by multiplying X R by a factor of one.
(3) The facility recoupment charge by coverage to be added to the
base rate or objective standards rate for all risks which have two
surcharge points under the Uniform Merit Rating Plan is calculated by
multiplying X R by a factor of two.
(4) The facility recoupment charge by coverage to be added to the
base rate or objective standards rate for all risks which are
subject to a surcharge of three points under the Uniform Merit Rating
Plan is calculated by multiplying X R by a factor of
three.
(5) The facility recoupment charge by coverage to be added to the
base rate or objective standards rate for all risks which are
subject to a surcharge of four points under the Uniform Merit Rating
Plan is calculated by multiplying X R by a factor of
four.
(6) The facility recoupment charge by coverage to be added to the
base rate or objective standards rate for all risks which are
subject to a surcharge of five points under the Uniform Merit Rating
Plan is calculated by multiplying X R by a factor of
five.
(7) The facility recoupment charge by coverage to be added to the
base rate or objective standards rate for all risks which are
subject to a surcharge of six points under the Uniform Merit Rating Plan
is calculated by multiplying X R by a factor of six.
(8) The facility recoupment charge by coverage to be added to the
base rate or objective standards rate for all risks which are
subject to a surcharge of seven points under the Uniform Merit Rating
Plan is calculated by multiplying X R by a factor of
seven.
(9) The facility recoupment charge by coverage to be added to the
base rate or objective standards rate for all risks which are
subject to a surcharge of eight points under the Uniform Merit Rating
Plan is calculated by multiplying X R by a factor of
eight.
(10) The facility recoupment charge by coverage to be added to the
base rate or objective standards rate for all risks which are
subject to a surcharge of nine points under the Uniform Merit Rating
Plan is calculated by multiplying X R by a factor of
nine.
(11) The facility recoupment charge by coverage to be added to the
base rate or objective standards 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 R 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 a 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 issued or renewed after June 30, 1989. However,
insurers unable to comply with the provisions of this section and
renewal provisions required by law may comply with this section at
any time after June 30, 1989, but in no event
not later than October 1, 1989."
SECTION 2. Section 38-77-605 of the 1976 Code is repealed.
SECTION 3. This act takes effect upon approval by the Governor.
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