S*1082(Rat #0327, Act #0316 of 1988)  General Bill, By 
Senate Banking and Insurance

Similar(S 956, H 3436)
 A Bill to amend Sections 38-61-20, 38-71-310, and 38-71-720, Code of Laws of
 South Carolina, 1976, relating to approval of insurance policy contract forms
 generally by the Chief Insurance Commissioner, so as to provide standards for
 form approval, and to provide for exemption from form approval.

   01/26/88  Senate Introduced, read first time, placed on calendar
                     without reference SJ-9
   01/28/88  Senate Read second time SJ-33
   01/28/88  Senate Ordered to third reading with notice of
                     amendments SJ-33
   02/02/88  Senate Read third time and sent to House SJ-18
   02/03/88  House  Introduced, read first time, placed on calendar
                     without reference HJ-906
   02/10/88  House  Debate adjourned until Thursday, February 11,
                     1988 HJ-1091
   02/11/88  House  Read second time HJ-1109
   02/11/88  House  Unanimous consent for third reading on next
                     legislative day HJ-1112
   02/12/88  House  Read third time and enrolled HJ-1167
   02/18/88         Ratified R 327
   02/24/88         Signed By Governor
   02/24/88         Effective date 02/24/88
   02/24/88         Act No. 316
   03/08/88         Copies available

AN ACT TO AMEND SECTIONS 38-61-20, 38-71-310, AND 38-71-720, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO APPROVAL OF INSURANCE POLICY CONTRACT FORMS GENERALLY BY THE CHIEF INSURANCE COMMISSIONER, SO AS TO PROVIDE STANDARDS FOR FORM APPROVAL, AND TO PROVIDE FOR EXEMPTION FROM FORM APPROVAL.

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

Forms approved

SECTION 1. Section 38-61-20 of the 1976 Code is amended to read:

"Section 38-61-20. (A) It is unlawful for an insurer doing business in this State to issue or sell in this State any policy, contract, or certificate until it has been filed with and approved by the Commissioner. The Commissioner may disapprove the form if it (1) does not meet the requirements of law, (2) contains any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. However, this subsection does not apply to surety contracts or fidelity bonds, except as required in Section 38-15-10, or to insurance contracts, riders, or endorsements prepared to meet special, unusual, peculiar, or extraordinary conditions applying to an individual risk.

(B) At any time after having given written approval, and after an opportunity for a hearing for which at least thirty days' written notice has been given, the Commissioner may withdraw approval if he finds that the forms (1) do not meet the requirements of law, (2) contain any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) are being solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading.

(C) The Commissioner may, by regulation, exempt from the requirements of subsection (A) for as long as he considers proper, any type of insurance policy, contract, or certificate to which in his opinion subsection (A) may not practically be applied, or the filing and approval of which is, in his opinion, not necessary for the protection of the public. However, every insurer at least annually shall list the types and form numbers of all policies which it issues or sells in this State which the Commissioner has exempted from being filed and approved and the president or chief executive officer of the insurer shall certify that all such policies comply fully with the laws of this State. If a policy, contract, or certificate is certified to be in compliance with the laws of this State and the Commissioner finds that it violates any law of this State, he may disqualify that insurer from certifying any policies, contracts, or certificates as allowed under this subsection."

Forms approved

SECTION 2. Section 38-71-310 of the 1976 Code is amended to read:

"Section 38-71-310. No policy or certificate of accident, health, or accident and health insurance may be issued or delivered in this State, nor may any application, endorsement, or rider which becomes a part of the policy be used, until a copy of its form has been filed with and approved by the Commissioner except as exempted by regulation as permitted by Section 38-61-20. The Commissioner may disapprove the form if the form (1) does not meet the requirements of law, (2) contains any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. However, if no action has been taken to approve or disapprove a policy or certificate, application, endorsement, or rider after the documents have been filed for ninety days, they may be issued and delivered until or unless subsequently disapproved by the Commissioner. The Commissioner shall, as soon as is practicable, notify in writing the insurer which has filed the form of his approval or disapproval. In the event of disapproval, the notice must contain the reasons for disapproval, and the insurer is entitled to a public hearing thereon. At any time after having given written approval, the Commissioner may, after a public hearing of which at least thirty days' written notice has been given, withdraw approval if he finds that the forms (1) do not meet the requirements of law, (2) contain any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) are being solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. In the case of accident policies, health policies, or combined accident and health policies or certificates for individual or family protection, the Commissioner may disapprove or withdraw approval of filed forms of policies or certificates if he determines the benefits provided in the policies or certificates are unreasonable in relation to the premiums charged. Withdrawal of approval must be effected by written notice to the insurer, and the insurer is entitled to a public hearing thereon. The provisions of this section do not apply to policies issued in connection with loans made under the Small Loan Act of 1966."

Forms approved

SECTION 3. Section 38-71-720 of the 1976 Code is amended to read:

"Section 38-71-720. No policy or contract of group accident, group health, or group accident and health insurance may be issued or delivered in this State, nor may any application, endorsement, or rider which becomes a part of the policy be used, until a copy of the form thereof has been filed with and approved by the Commissioner except as exempted by regulation as permitted by Section 38-61-20. The Commissioner may disapprove the form if the form (1) does not meet the requirements of law, (2) contains any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. However, if no action has been taken to approve or disapprove a policy, contract, certificate, application, endorsement, or rider after the documents have been filed for ninety days, they may be issued and delivered until or unless subsequently disapproved by the Commissioner. This time period may be extended thirty days if the Commissioner gives written notice to the filer that he needs additional time to review the filing. The Commissioner shall, as soon as is practicable, notify in writing the insurer which has filed the form of his approval or disapproval. In the event of disapproval the notice must contain the reasons for disapproval and the insurer is entitled to a public hearing thereon. At any time after having given written approval thereof the Commissioner may, after a public hearing of which at least thirty days' written notice has been given, withdraw approval if he finds that the forms (1) do not meet the requirements of law, (2) contain any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) are being solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. The withdrawal of approval must be effected by written notice to the insurer and the insurer is entitled to a public hearing thereon."

Time effective

SECTION 4. This act takes effect upon approval by the Governor.