H 3900 Session 112 (1997-1998)
H 3900 General Bill, By Kirsh
A BILL TO AMEND SECTION 38-27-610, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA,
1976, RELATING TO THE INSURERS' REHABILITATION AND LIQUIDATION ACT, FORMAL
PROCEEDINGS, AND PRIORITY OF DISTRIBUTION, SO AS TO REORDER THE PRIORITY OF
DISTRIBUTION OF CLAIMS FROM AN INSURER'S ESTATE WITH RESPECT TO CLASSES OF
CLAIMS, AND PROVIDE FOR A NEW CLASS COVERING THE "CLAIMS OF INSURERS AND
REINSURERS" AND ESTABLISH THIS CLASS AS "CLASS 3" IN THE PRIORITY ORDER OF
DISTRIBUTION.
04/10/97 House Introduced and read first time HJ-60
04/10/97 House Referred to Committee on Labor, Commerce and
Industry HJ-60
03/24/98 House Tabled in committee Labor, Commerce and Industry
A BILL
TO AMEND SECTION 38-27-610, AS AMENDED, CODE OF
LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE
INSURERS' REHABILITATION AND LIQUIDATION ACT,
FORMAL PROCEEDINGS, AND PRIORITY OF DISTRIBUTION,
SO AS TO REORDER THE PRIORITY OF DISTRIBUTION OF
CLAIMS FROM AN INSURER'S ESTATE WITH RESPECT TO
CLASSES OF CLAIMS, AND PROVIDE FOR A NEW CLASS
COVERING THE "CLAIMS OF INSURERS AND REINSURERS"
AND ESTABLISH THIS CLASS AS "CLASS 3" IN THE
PRIORITY ORDER OF DISTRIBUTION.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Section 38-27-610 of the 1976 Code, as last amended
by Act 13 of 1991, is further amended to read:
"Section 38-27-610. The priority of distribution of claims from the
insurer's estate must be in accordance with the order in which each
class of claims is set forth in this section. Every claim in each class
must be paid in full or adequate funds retained for the payment before
the members of the next class receive any payment. No subclasses
may be established within any class. The order of distribution of
claims is:
(1) Class 1. The costs and expenses of administration,
including, but not limited to:
(a) the actual and necessary costs of preserving or recovering
the assets of the insurer;
(b) compensation for services rendered by the receiver in the
amount of five percent of the total assets of the insurer coming into
the possession of the receiver;
(c) any necessary filing fees;
(d) the fees and mileage payable to witnesses;
(e) compensation of the special deputies, attorneys, and other
persons as appointed by the receiver for the efficient conduct of the
receivership, rehabilitation, or liquidation;
(f) the reasonable expenses of a guaranty association or foreign
guaranty association in handling claims.
(2) Class 2. Debts due to employees for services performed to
the extent that they do not exceed one thousand dollars and represent
payment for services performed within one year before the filing of
the petition for liquidation. Officers and directors are not entitled to
the benefit of this priority. This priority is in lieu of any other similar
priority authorized by law as to wages or compensation of
employees.
(3) Class 3. Claims under policies, including
claims of federal, state, and local governments, for losses incurred,
loss claims, including third party claims, claims against the insurer
for liability for bodily injury or for injury to or destruction of tangible
property which are not under policies, and claims of a guaranty
association or foreign guaranty association. Claims under life
insurance and annuity policies, whether for death proceeds, annuity
proceeds, or investment values, must be treated as loss claims. That
portion of a loss, indemnification for which is provided by other
benefits or advantages recovered by the claimant, must not be
included in this class, other than benefits or advantages recovered or
recoverable in discharge of familial obligations of support or by way
of succession at death, or as proceeds of life insurance or as
gratuities. No payment by an employer to his employee may be
treated as a gratuity.
(3) Class 3. Claims of insurers and reinsurers.
(4) Class 4. Claims under nonassessable policies for
unearned premium or other premium refunds and claims of general
creditors.
(5) Class 5.(4) Class 4. Claims of federal,
state, and local governments, except those under item
(3)(2). Claims, including those of a governmental
body for a penalty or forfeiture, are allowed in this class only to the
extent of the pecuniary loss sustained from the act, transaction, or
proceeding out of which the penalty or forfeiture arose, with
reasonable and actual costs. The remainder of the claims are
postponed to the class of claims under item (9)(10).
(5) Class 5. Debts due to employees for services performed
to the extent that they do not exceed one thousand dollars and
represent payment for services performed within one year before the
filing of the petition for liquidation. Officers and directors are not
entitled to the benefit of this priority. This priority is in lieu of any
other similar priority authorized by law as to wages or compensation
of employees.
(6) Class 6. Claims under nonassessable policies for unearned
premium or other premium refunds and claims of general creditors.
(6) Class 6.(7) Class 7. Claims filed late or
any other claims other than claims under items (7), (8), and
(9) (8), (9), and (10) of this section.
(7) Class 7.(8) Class 8. Surplus or
contribution notes, or similar obligations, and premium refunds on
assessable policies.
(8) Class 8.(9) Class 9. Payments to
members of domestic mutual insurance companies are limited in
accordance with law.
(9) Class 9.(10) Class 10. The claims of
shareholders or other owners."
SECTION 2. This act takes effect upon approval by the Governor.
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