H*2601(Rat #0209, Act #0139 of 1985)  General Bill, By R. Schwartz, 
J.F. Anderson, W.S. Anderson, F.X. Archibald, W.D. Arthur, D. Blackwell, 
L. Blanding, Boan, J.D. Bradley, T.A. Brett, T.M. Burriss, Carnell, 
T.W. Edwards, P. Evatt, J.G. Felder, T. Ferguson, S.R. Foster, P. Freeman, 
C.L. Griffin, M.S. Gulledge, J.L. Harris, P.B. Harris, Harvin, D.O. Hawkins, 
J.C. Hearn, B.L. Hendricks, J.W. Johnson, H.H. Keyserling, Kirsh, J.R. Klapman, 
R.A. Kohn, Martin, J.G. McAbee, R.N. McLellan, Patterson, A.V. Rawl, 
R.L. Rigdon, T.F. Rogers, E.C. Stoddard, J.H. Toal, D.C. Waldrop, Wilkins, 
D.E. Winstead and R.R. Woods
 A Bill to amend Sections 34-29-160, 37-4-108, 37-4-202, 37-4-203, and
 38-51-110, Code of Laws of South Carolina, 1976, relating to consumer finance,
 the Consumer Protection Code, and insurance so as to regulate credit life
 insurance and to require lenders to have licensed agents to answer questions
 about credit life and credit accident and health insurance or credit property
 or any combination of them.-amended title

   03/14/85  House  Introduced and read first time HJ-1292
   03/14/85  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-1292
   05/08/85  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-3064
   05/14/85  House  Amended HJ-3154
   05/14/85  House  Read second time HJ-3154
   05/15/85  House  Read third time and sent to Senate HJ-3198
   05/16/85  Senate Introduced, read first time, placed on calendar
                     without reference SJ-2128
   05/22/85  Senate Read second time SJ-2203
   05/22/85  Senate Unanimous consent for third reading on next
                     legislative day SJ-2204
   05/23/85  Senate Read third time and enrolled SJ-2226
   06/03/85         Ratified R 209
   06/06/85         Signed By Governor
   06/06/85         Effective date 07/01/86
   06/06/85         Act No. 139
   06/19/85         Copies available

AN ACT TO AMEND SECTIONS 34-29-160, 37-4-108, 37-4-202, 37-4-203, AND 38-51-110, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CONSUMER FINANCE, THE CONSUMER PROTECTION CODE, AND INSURANCE SO AS TO REGULATE CREDIT LIFE INSURANCE AND TO REQUIRE LENDERS TO HAVE LICENSED AGENTS TO ANSWER QUESTIONS ABOUT CREDIT LIFE AND CREDIT ACCIDENT AND HEALTH INSURANCE OR CREDIT PROPERTY OR ANY COMBINATION OF THEM.

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

Refund

SECTION 1. Section 34-29-160 of the 1976 Code is amended by adding after the third paragraph:

"This section does not require a creditor to grant a refund or credit of a life insurance premium to the debtor if any refund or credit due to the debtor under this section is less than two dollars."

Credit life insurance premiums

SECTION 2. Section 34-29-160 of the 1976 Code is amended by adding at the end:

"Credit life insurance premiums for each one hundred dollars of indebtedness are considered reasonable and may be charged if they are not greater than the amounts given in the following table times the number of years, or fraction of a year, that the indebtedness is scheduled to continue, subject to a minimum charge of two dollars:

Decreasing Balance Level Balance

Individual $ .85 $1.70

Joint Insurance $1.42 $2.84".

Refund

SECTION 3. Subsection (2) of Section 37-4-108 of the 1976 Code is amended to read:

"(2) This chapter does not require a creditor to grant a refund or credit to the debtor if any refund or credit due to the debtor under this chapter amounts to less than two dollars, and except as provided in subsection (1) does not require the creditor to account to the debtor for any portion of a separate charge for insurance because:

(a) The insurance is terminated by performance of the insurer's obligation;

(b) The creditor pays or accounts for premiums to the insurer in amounts and at times determined by the agreement between them; or

(c) The creditor receives directly or indirectly under any policy of insurance a gain or advantage not prohibited by law."

Amount of insurance

SECTION 4. Item (a) of subsection (1) of Section 37-4-202 of the 1976 Code is amended to read:

"(a) In the case of consumer credit insurance providing life coverage, the amount of insurance may not initially exceed the debt and, if the debt is payable in installments, may not at any time exceed the greater of the scheduled or actual amount of the debt. In the case of a consumer lease contract, the residual value of the consumer credit lease may be included in the debt, however, the lessor shall not require the lessee to buy insurance covering the residual value of the leased item; or".

Premiums considered reasonable

SECTION 5. Section 37-4-203 of the 1976 Code is amended by adding at the end:

"(5) Credit life insurance premiums for each one hundred dollars of indebtedness are considered reasonable and may be charged if they are not greater than the amounts given in the following table times the number of years, or fraction of a year, that the indebtedness is scheduled to continue, subject to a minimum charge of two dollars:

Decreasing Balance Level Balance

Individual $ .85 $1.70

Joint Insurance $1.42 $2.84".

Application

SECTION 6. Section 38-51-110 of the 1976 Code is amended to read:

"Section 38-51-110. Before being issued a license to do business as an agent in this State for any insurance company, as defined in Section 38-1-20, each applicant shall make written application for the license upon forms to be furnished by the Chief Insurance Commissioner and all information on the form as required by the Chief Insurance Commissioner must be subscribed to by the applicant under oath. No business may be done by the applicant except following issuance of an agent's license and no such license may be issued until the Chief Insurance Commissioner has determined that the applicant is qualified as an insurance agent, generally, and is particularly qualified for the line of business in which the applicant proposes to engage. The Chief Insurance Commissioner shall promulgate regulations setting forth qualifying standards of agents as to all lines of business and shall require the local agent applicant to stand a written examination, but the Chief Insurance Commissioner may waive the examination with respect to applicants who have achieved the designations of Chartered Property and Casualty Underwriter (CPCU) or Chartered Life Underwriter (CLU); and the Chief Insurance Commissioner may, at his discretion, waive such examination, and issue temporary licenses for a period not to exceed ninety days, upon demonstrated need. No agent of a common carrier who sells only trip transportation ticket policies of accident and health insurance or baggage insurance on personal effects is required to stand a written examination. No person who is a salaried employee and acts as an agent for a bank, savings and loan association, savings bank, finance company, trust company, credit union, automobile dealer, or other company handling credit transactions operating in this State who writes credit life, credit accident and health insurance, credit property or any combination of them in connection with a loan or other credit transaction is required to stand a written examination. Any bank, finance company or other company handling credit transactions operating in this State and utilizing one or more credit life or accident and health or credit property agents in a particular geographical area who are licensed without having taken the written examination is required to have readily available at least one credit life or accident and health or credit property agent to answer customers' questions concerning credit life, credit accident and health insurance, or credit property, or any combination of them. The Chief Insurance Commissioner, subject to item (e) if he is assured of the honesty and trustworthiness of the applicant by the company which he shall represent, shall issue a nonrenewable temporary life insurance agent's license valid for ninety days without requiring the applicant to pass a written examination, as follows:

(a) A temporary life insurance agent's license to the executor or administrator of the estate of a deceased person who at the time of his death was a licensed life insurance agent.

(b) A temporary life insurance agent's license to a surviving next of kin of such a deceased person, if no administrator or executor has been appointed and qualified, but any license issued under this item must be revoked upon issuance of a license to an executor or administrator under item (a).

(c) A temporary life insurance agent's license to an applicant who has filed a written application for a license on forms furnished by the Commissioner where the applicant will actually collect the premiums on debit life and health insurance contracts during the period of the temporary license. The license shall, with respect to the applicant's solicitation and sales activities during the license period, authorize only the solicitation and sale of debit life and health insurance contracts; if the temporary license is not received from the Commissioner within fifteen days from the date the application was sent to the Commissioner, by certified or registered mail, the company may assume that the temporary license will be issued in due course. For the purpose of this subsection a debit life and health insurance contract means a contract for which the premiums are payable at monthly or more frequent intervals directly by the owner, or by a person representing the owner, to a representative of the company.

(d) A temporary credit life and accident and health or credit property insurance agent's license to an applicant who has filed a written application for a license on forms furnished by the Commissioner, where the applicant is applying for a credit life and credit accident and health or credit property insurance license. The license shall, with respect to the applicant's solicitation and sales activities during the license period, authorize only the solicitation and sale of credit life and accident and health or credit property insurance contracts. If the temporary license is not received from the Commissioner within fifteen days from the date the application was mailed to the Commissioner by certified or registered mail, the company may assume that the temporary agent's license will be issued in due course. For the purpose of this item, a credit insurance agent is one who represents an insurer with any financial institution, such as a bank, savings and loan association, savings bank, finance company, trust company, credit union, and automobile dealer or other company and who does not devote all of his time to the insurance business.

(e) If more than twenty-five percent of the temporary licensees of a company fail to receive a permanent license, not counting those who fail the written examination twice, in any twelve-month period it is prima facie evidence that the company is abusing the privilege of obtaining temporary licenses. Upon a determination of abuse being made, following a public hearing as provided by law, no temporary license may be issued for twenty-four months following the month of the determination of abuse on behalf of such a company."

Time effective

SECTION 7. This act shall take effect July 1, 1986.