H 4521 General Bill, By Martin, R.L. Altman, Bailey, B.O. Baker, H. Brown, 
D.M. Bruce, Cato, R.S. Corning, B. Council, Elliott, Fair, R.C. Fulmer, 
H.M. Hallman, P.B. Harris, Haskins, B.L. Hendricks, D.N. Holt, M.F. Jaskwhich, 
Keegan, H.H. Keyserling, Kirsh, J.R. Klapman, Koon, Lanford, Littlejohn, 
S.G. Manly, C.V. Marchbanks, McCraw, A.C. McGinnis, Meacham, Phillips, Quinn, 
J. Rama, Rhoad, Riser, Sharpe, J.S. Shissias, J.J. Snow, E.C. Stoddard, 
C.H. Stone, C.C. Wells, J.B. Wilder, D. Williams, S.S. Wofford, D.A. Wright and 
Young-Brickell
 A Bill to amend the Code of Laws of South Carolina, 1976, by adding Chapter 78
 to Title 38 so as to enact the "Consumer Freedom of Choice in Motor Vehicle
 Insurance Act"; to amend Section 38-77-30, as amended, relating to definitions
 under the automobile insurance Chapter of Title 38, so as to provide that
 "automobile insurance policy" also includes the personal protection policy as
 defined in Section 38-78-30; to amend Section 38-77-110, as amended, relating
 to automobile insurance, the requirement upon insurers to insure, and
 exceptions, so as to provide that no insurer is required to write private
 passenger automobile insurance with higher limits of coverage than two hundred
 fifty thousand dollars for added personal protection coverage as defined in
 Section 38-78-30; to amend the 1976 Code by adding Section 38-77-355 so as to
 provide that, in a claim or action for personal injury or wrongful death
 arising out of the ownership, operation, use, or maintenance of a motor
 vehicle, the court shall admit into evidence the total amount paid to the
 claimant from collateral sources and require an instruction to the jury to
 deduct from its verdict the value of all benefits received by the claimant
 from collateral sources; to amend Section 38-77-280, as amended, relating to
 collision coverage and comprehensive coverage under the provisions of law on
 automobile insurance, so as to delete the existing provisions of the Section
 and provide that after September 30, 1992, automobile insurers may refuse to
 write or renew private passenger automobile physical damage insurance coverage
 for an applicant or existing policyholder, and provide that after September
 30, 1992, no private passenger automobile physical damage insurance coverage
 may be ceded to the Reinsurance Facility; to amend Section 38-77-30, as
 amended, relating to automobile insurance and definitions, so as to exclude
 punitive damages from the definition of "damages'; to amend Section 38-77-140,
 relating to automobile insurance and bodily injury and property damage limits,
 so as to refer to "actual damages", and provide that an insurer shall offer
 the insured a rider or endorsement for an additional premium to cover
 liability for punitive damages, which coverage is optional with the insured;
 to amend Section 38-77-150, relating to the uninsured motorist provision and
 the defense of an action by the insurer, so as to refer to actual damages,
 increase the exclusion amount regarding loss or damage, require insurers to
 offer higher limits of uninsured motorist coverage, require insurers to offer
 on a form prescribed by the Chief Insurance Commissioner "nonstackable"
 policies of uninsured motorist coverage, provide that premium rates made by
 insurers for uninsured motorist coverage must be determined and regulated as
 premium rates for automobile insurance generally are determined and regulated,
 and provide that benefits paid pursuant to this Section are subject to
 subrogation and assignment; to amend Section 38-77-160, as amended, relating
 to underinsured motorist coverage and additional uninsured motorist coverage,
 so as to delete certain provisions, require the offering of underinsured
 motorist coverage up to the limits selected for the insured's liability
 coverage to provide coverage in the event the insured becomes legally entitled
 to collect damages from the owner or operator of an underinsured motor
 vehicle, provide that underinsured motorist benefits paid pursuant to this
 Section are subject to subrogation and assignment, and enact certain
 provisions for insurers offering uninsured motorist coverage; to amend Section
 56-9-350, relating to the requirement that the verification of automobile
 insurance coverage form be issued following certain accidents, so as to delete
 certain provisions, and provide that the operator or owner of a motor vehicle
 involved in an accident resulting in property damage of four hundred dollars
 or more or in bodily injury or death within fifteen days after the accident
 shall forward a written report of the accident to the Department of Highways
 and Public Transportation on a form prescribed by the Department; to amend
 Section 56-10-10, relating to vehicle financial security and the security
 required on registered vehicles, so as to delete certain provisions, and
 provide that security must be maintained on every motor vehicle required to be
 registered in South Carolina where the owner or other operator not excluded in
 accordance with Section 38-77-340 and who resides in the same household meets
 one of the conditions or factors specified in Section 38-73-455 for
 application of the objective standards rate; to amend Section 56-10-220,
 relating to the requirement that a vehicle sought to be registered in this
 State must be insured, so as to describe persons applying for registration as
 persons required to provide security on a motor vehicle as provided in Section
 56-10-10; to amend Section 56-10-240, relating to the requirement that, upon
 loss of automobile insurance, the insured shall obtain new insurance or
 surrender the vehicle's registration and plates, so as to describe the motor
 vehicles referenced in the Section as vehicles for which security is required
 as provided in Section 56-10-10; to amend the 1976 Code by adding Article 5 to
 Chapter 10 of Title 56 so as to provide for the registration and licensing of
 uninsured motor vehicles; to amend Section 38-77-110, as amended, relating to
 the requirement upon automobile insurers to insure and exceptions, so as to
 provide that automobile insurers may not refuse to write or renew automobile
 insurance policies for individual passenger automobiles if the risk qualifies
 for the safe driver discount in Section 38-73-760 or small commercial risks,
 provide that no insurer is required to write or renew private passenger
 automobile insurance if the risk does not qualify for the safe driver discount
 in Section 38-73-760, delete certain language, provide that no insurer may
 refuse to write or renew such policy, coverage or endorsement of automobile
 insurance because of the race, color, creed, or economic status of anyone who
 seeks to become insured, provide that an applicant who is denied coverage may
 request the denying insurer to provide in writing the reason or reasons for
 which the applicant has been refused insurance, and require the insurer to
 respond in writing within ten days of the request; to amend the 1976 Code by
 adding Article 13 to Chapter 77 of Title 38 so as to provide for the abolition
 of the South Carolina Reinsurance Facility and for the establishment of the
 South Carolina Joint Underwriting Association; to amend Section 38-73-455, as
 amended, relating to automobile insurance rates, so as to delete provisions of
 the Section, and provide, among other things, that an automobile insurer shall
 offer four, rather than two, different rates for automobile insurance, that
 insurers must file with the Chief Insurance Commissioner rates for personal
 protection policies and revised rates for all other private passenger
 automobile insurance policies written by them, and that insurers may place any
 automobile insurance risk at any of the four rate levels without restriction
 unless provided otherwise by law; to amend Section 38-73-760, as amended,
 relating to uniform statistical plans, by adding language which provides that
 no surcharge may be assessed for the first conviction of speeding less than
 twenty miles per hour if the person convicted has no chargeable accidents or
 driving convictions for the previous three years; to amend Section 38-57-130,
 relating to insurance, trade practices, and the prohibition on
 misrepresentations, special inducements, and rebates in all insurance
 contracts, so as to make an exception for a private passenger automobile
 insurance contract; to amend Section 56-10-270, relating to the operation of
 an uninsured motor vehicle and penalties, so as to increase certain of the
 penalties, authorize performance of public service as a penalty, provide for
 suspension of the driving privilege and all license plates and registration
 certificates issued in a person's name for second, third, and subsequent
 offense violations of the provisions of this Section, delete certain language,
 and provide that the convicted person's privileges may not be reinstated until
 proof of financial responsibility has been filed; to amend the 1976 Code by
 adding Section 38-77-116 so as to provide that, upon issuance of a new private
 passenger automobile insurance policy, the insurance company or agent must
 review with the new applicant a list of driving offenses and the related fine
 and punishment, as well as certain other things; to provide that after
 September 30, 1992, the governing board of the Joint Underwriting Association
 shall contract with one or more insurers or business entities to serve as the
 designated carrier and shall establish a procedure for the selection of the
 designated carrier, provide that if the designated carrier fails two claims
 audits, including a re-audit, within the contract term, the designated carrier
 is disqualified for renewal of its contract upon expiration of its existing
 contract, and provide that no designated producers may receive a commission
 higher than five percent on a policy ceded to the Joint Underwriting
 Association and that agents or producers other than designated producers may
 not receive a commission higher than five percent on a policy written directly
 by the Association; to amend the 1976 Code by adding Sections 38-77-175 and
 56-7-12 so as to provide that when the operator or owner of a motor vehicle is
 issued a traffic ticket for a moving violation by a law enforcement officer,
 he must be furnished a written request form to complete to verify liability
 insurance coverage, provide for the return of the form and the effect of
 failure to return the form to the Department of Highways and Public
 Transportation, and provide for the deposit of any fine collected for a
 violation of Section 56-10-270 as a result of these two new Sections; to
 repeal Article 5 of Chapter 77 of Title 38, relating to the South Carolina
 Reinsurance Facility and designated producers; and to provide for the
 severability and constitutionality of this Act and for certain obligations and
 subrogation of personal protection insurers under certain circumstances
 involving the unconstitutionality or invalidity of Section 38-78-110.

   03/04/92  House  Introduced and read first time HJ-49
   03/04/92  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-49
   04/07/92  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-7
   04/22/92  House  Debate interrupted HJ-40
   04/23/92  House  Objection by Rep. Beatty & M Martin HJ-19
   04/23/92  House  Debate adjourned until Tuesday, April 28, 1992 HJ-1
   04/28/92  House  Debate adjourned until Wednesday, April 29, 1992
   04/29/92  House  Objection by Rep. Farr, McElveen, Jennings,
                     Harrelson, Delleney, HJ-261
   04/29/92  House  Objection by Rep. J. Brown & Scott HJ-261
   04/30/92  House  Objection withdrawn by Rep. Farr HJ-26

COMMITTEE REPORT

April 7, 1992

H. 4521

Introduced by REPS. L. Martin, Hallman, Corning,

Wofford, Rama, H. Brown, Shissias, Haskins, Fulmer,

Littlejohn, Lanford, Meacham, Manly, D. Elliott,

Keyserling, Stone, Kirsh, D. Williams, McGinnis,

Cato, G. Bailey, Quinn, Marchbanks, Stoddard,

Rhoad, Jaskwhich, A. Young, Holt, Baker, Wright,

Hendricks, Keegan, Wells, Sharpe, Council, Fair,

Wilder, P. Harris, Riser, Snow, Koon, Phillips,

Altman, Bruce, McCraw and Klapman

S. Printed 4/7/92--H.

Read the first time March 4, 1992.

To whom was referred a Bill (H. 4521), to amend

the Code of Laws of South Carolina, 1976, by adding

Chapter 78 to Title 38 so as to enact the "Consumer

Freedom of Choice in Motor Vehicle Insurance Act",

etc., respectfully

That they have duly and carefully considered the

same, and recommend that the same do pass with

amendment:

Amend the bill, as and if amended, by striking

all after the enacting words and inserting:

/SECTION 1. Title 38 of the 1976 Code is

amended by adding:

Section 38-78-10. This chapter may be cited as

the `Consumer Freedom of Choice in Motor Vehicle

Insurance Act'.

<#PAGE> Section 38-78-20. (A) Under existing law, the

ability of a person to recover losses incurred as

a result of a motor vehicle accident is limited by

factors over which the accident victim has no

control. The recovery is dependent on the conduct

of the other driver, the amount of liability

insurance carried by the other driver, and the

financial resources of the other driver. Two

individuals who have received identical injuries

may recover markedly different amounts. Under

existing law, many individuals receive little or no

compensation for their losses.

(B) This chapter gives motorists the right to

choose the kinds of personal protection available

in case of an automobile accident and the amount of

financial protection they deem appropriate and

affordable. Instead of being forced to buy

traditional fault liability insurance to protect

strangers, motorists will have the opportunity to

buy a new personal protection policy to protect

themselves and their family members regardless of

fault in the event of a motor vehicle accident.

Motorists will also have the right to reject the

provisions of this chapter, and thus retain all

rights to sue and be sued for both economic and

noneconomic loss based on fault, under the existing

fault liability insurance system.

(C) The interaction between traditional fault

liability insurance and the personal protection

policy is as follows:

(1) Motorists who choose the traditional

fault liability insurance and who are involved in

an accident with any other motorist essentially

will retain the system existing now where they have

the opportunity to claim and sue based on fault for

both economic and noneconomic damages. They will

also remain subject to being sued for such

liability to others based on fault.

(2) Motorists who choose the new personal

protection policy system established by this

chapter and who are involved in an accident with a

motorist who has chosen traditional fault liability

insurance will be promptly compensated for their

own economic losses regardless of fault. A

<#PAGE>personal protection insured can claim against and

sue the other motorist, based on fault, for

economic damages if the damages exceed their

personal protection limits and for noneconomic

damages if their injury exceeds the verbal

threshold. They will also remain in this

circumstance subject to being sued for such

liability to others based on fault.

(3) Two motorists who each choose the

personal protection policy and who are involved in

an accident with each other will be promptly

compensated under their own policies for their own

economic losses regardless of fault. In this

situation, the two motorists who have chosen the

personal protection policy do not have the right to

claim and sue for full damages based on fault

unless the injury exceeds the verbal threshold but

if either suffers a loss in excess of his or her

policy's benefit levels, that person retains the

right to claim and sue for uncompensated economic

loss based on fault.

(4) If a motorist who has chosen fault

liability insurance is involved in an accident with

an uninsured motorist, the policyholder can be

compensated for losses under the uninsured motorist

provisions of his or her own policy based on fault

and has the right to claim against and sue the

uninsured motorist for full damages based on fault.

The uninsured motorist forfeits any right to claim

for property damage up to ten thousand dollars and

for noneconomic loss against the motorist who has

chosen fault liability insurance, except where the

motorist choosing fault liability insurance was

driving under the influence of alcohol or illegal

drugs or committed intentional misconduct.

(5) If a motorist who has chosen the personal

protection policy is involved in an accident with

an uninsured motorist, the policyholder will be

promptly compensated for economic losses under his

or her personal protection policy regardless of

fault and has the right to claim against and sue

the uninsured motorist for noneconomic damages

based on fault if the injury exceeds the verbal

threshold. The uninsured motorist forfeits any

<#PAGE>right to claim for the first ten thousand dollars

of property damage and for noneconomic loss against

the motorist who has chosen the personal protection

policy, except where such motorist was driving

under the influence of alcohol or illegal drugs or

committed intentional misconduct.

(D) The initial rate to be charged by each

automobile insurer for the basic personal

protection policy required by this act shall be at

least fifteen percent lower than the approved rate

for the minimum limits prescribed by Sections

38-77-140 and 38-77-150 by class and territory for

each automobile insurance risk in effect on

September 30, 1992. The rate for the basic

personal protection policy cannot be increased for

automobile insurance policies issued or renewed

with effective dates between January 1, 1993,

through December 31, 1993.

(E) A motorist who purchases the personal

protection policy will have five thousand dollars

of property damage liability insurance as part of

his mandatory coverage.

(F) To the extent the terms of Section 38-78-20

may differ from the terms of Section 38-78-30, the

terms of Section 38-78-30 govern.

Section 38-78-30. As used in this chapter,

unless the context otherwise requires:

(A) `Accidental bodily injury' means bodily

injury, sickness, or disease, or death resulting

therefrom, arising out of the ownership, operation,

or use of a motor vehicle, or while occupying such

vehicle, which is accidental as to the person

insured.

(B) `Added personal protection' means an

optional policy, plan, or coverage for personal

protection which each insurer issuing motor vehicle

liability insurance in this State shall make

available in the limits set by Section

38-77-110(B)(5).

(C) `Basic personal protection' means a

policy, plan, or coverage for personal protection

which provides benefits for net loss resulting from

accidental bodily injury resulting from a motor

vehicle accident and liability coverage in at least

<#PAGE>the amounts prescribed by Section 38-77-140. Basic

personal protection benefits consist of the

following, with an aggregate limit of fifteen

thousand dollars per person arising out of one

motor vehicle accident:

(1) medical expenses;

(2) loss of income from work, up to two

hundred dollars per week;

(3) replacement services loss, up to one

hundred dollars per week;

(4) death benefits of five thousand dollars

if the death of the injured person occurs within

one year after the date of a motor vehicle accident

and was a direct result of the accident.

Each basic personal protection insurer is

permitted to incorporate in added personal

protection benefits coverage such terms,

conditions, and exclusions as may be consistent

with the premiums charged.

Motorcycles may not be covered by a personal

protection policy.

(D) `Cause of action for injury' means a

claim for accidental bodily injury for economic or

noneconomic loss, or both, caused by the negligent

conduct or intentional misconduct of another

person, and includes a claim by any person other

than a person suffering accidental bodily injury

based on such injury, including, but not limited

to, loss of consortium, companionship, or any

derivative claim.

(E) `Commissioner' means the Chief Insurance

Commissioner.

(F) `Dependent' means all persons related to

another person by blood, marriage, adoption, or

otherwise who reside in the same household at the

time of the accidental bodily injury and receive

financial services or support for him or her.

(G) `Economic loss' means actual pecuniary

loss and actual monetary expenses incurred by or on

behalf of an injured person as the result of an

accidental bodily injury consisting only of medical

expense, work loss, replacement services loss, and

death benefits.

<#PAGE> (H) `Governmental unit' means the United

States government, the government of the State of

South Carolina, and any agency, authority, board,

department, division, commission, institution,

bureau, or like governmental entity of either such

government, or any local government in this State,

and such units thereof, including, but not limited

to, counties, cities, towns, and other regional

governments.

(I) `Injured person' means a person who

sustains accidental bodily injury when eligible for

benefits under a policy providing personal

protection. The term also includes, where

appropriate, the personal representative of an

estate.

(J) `Intentional misconduct' means conduct

whereby harm is intentionally caused or attempted

to be caused by one who acts or fails to act for

the purpose of causing harm or with knowledge that

harm is substantially certain to follow when such

conduct caused or substantially contributed to the

harm claimed for. A person does not intentionally

cause or attempt to cause harm (1) merely because

his or her act or failure to act is done with the

realization that it creates a grave risk of causing

harm or (2) if the act or omission causing bodily

harm is for the purpose of averting bodily harm to

oneself or another person.

(K) `Loss of income from work' means eighty

percent loss of gross income from the work the

injured person would have continued to perform if

he or she had not been injured, reduced by any

income from substitute work actually performed by

him or her or by income he or she would have earned

in available appropriate substitute work he or she

was capable of performing but unreasonably failed

to undertake. In order to be eligible for these

benefits, the injured person must have been in an

occupational status, earning or producing income,

immediately prior to the accident. Loss of income

from work does not include any loss after the death

of the injured person, and payment for the period

of disability shall not exceed two years from the

date of the accident.

<#PAGE> Loss of income from work may be excluded from an

insured's policy, at the policyholder's request,

with an appropriate reduction in the premium.

(L) `Medical expenses' means usual and

customary amounts incurred by an injured person for

necessary medical, surgical, radiological, dental,

chiropractic, ambulance, hospital, medical

rehabilitation and professional nursing services,

eyeglasses, hearing aids, and prosthetic devices.

Medical expense may include nonmedical remedial

treatment rendered in accordance with a recognized

religious method of healing. The words `incurred

by' include medical expenses incurred on behalf of

an injured person by a parent or guardian if the

injured person is a minor or incompetent, or by a

surviving spouse if the injured person is deceased.

Personal protection insurers may review medical

expenses to assure that the expenses are reasonable

and necessary according to generally accepted

standards of medical practice. Under basic

personal protection and added personal protection,

medical expenses are promptly payable to the

injured person for covered expenses incurred within

two years after the date of the accident. `Medical

expenses' do not include:

(1) that portion of a charge for a room in a

hospital, clinic, or convalescent or nursing home,

or any other institution engaged in providing

nursing care and related services, in excess of a

reasonable and customary charge for semi-private

accommodations, unless medically required; or

(2) treatments, services, products, or

procedures that are experimental in nature, or for

research, or not primarily designed to serve a

medical purpose, or which are not commonly and

customarily recognized throughout the medical

profession and within the United States as

appropriate treatment of the accidental bodily

injury, or which are not performed by a

professional licensed by the professional's

licensing board pursuant to Title 40.

(M) `Medical rehabilitation' means

rehabilitation services which are reasonable and

necessary to reduce the disability and help to

<#PAGE>restore the pre-accident level of physical

functioning of the injured person.

(N) `Motor vehicle' is defined by Section

38-77-30(7).

(O) `Noneconomic loss' means any loss other

than economic loss and includes, but is not

necessarily limited to, pain, suffering,

inconvenience, physical impairment, mental anguish,

emotional pain and suffering, hedonic damages, and

loss of any of the following: earning capacity,

consortium, society, companionship, comfort,

protection, marital care, parental care, filial

care, attention, advice, counsel, training,

guidance, or education. Noneconomic loss does not

include economic loss caused by pain and suffering

or by physical impairment.

(P) `Occupying' means to be in or upon a

motor vehicle or engaged in the immediate act of

entering into or alighting from the motor vehicle.

(Q) `Operation or use' means operation or use

of a motor vehicle as a motor vehicle, including,

incident to its operation or use as a vehicle,

occupying it. Operation or use of a motor vehicle

does not cover conduct within the course of a

business of manufacturing, selling, or maintaining

a motor vehicle, including repairing, servicing,

washing, loading, or unloading, nor does it include

such conduct not within the course of such a

business, unless such conduct occurs while

occupying a motor vehicle.

(R) `Owner' means the person or persons,

other than a lienholder or secured party, who owns

or has title to a motor vehicle or is entitled to

the use and possession of a motor vehicle subject

to a security interest held by another person.

Owner does not include (i) a lessee under a lease

not intended as security, or (ii) the United States

of America or any agency thereof, except with

respect to motor vehicles for which it has elected

to provide insurance.

(S) `Person' includes an organization, public

or private.

(T) `Personal protection' means a policy,

plan, or coverage which provides basic or added

<#PAGE>personal protection benefits for loss resulting

from accidental bodily injury, regardless of fault.

(U) `Personal protection insured' means:

(1) a person identified by name as an insured

in a contract providing personal protection

benefits;

(2) while residing in the same household with

a named insured, the following persons:

(a) a spouse or other relative of a named

insured; or

(b) a minor in the custody of a named

insured. A person resides in the same household if

he or she usually makes his or her home in the same

family unit, even though he or she temporarily

lives elsewhere;

(3) a person with respect to accidents within

this State who sustains accidental bodily injury

while occupying or when struck as a pedestrian by

a motor vehicle insured for personal protection,

unless the person has rejected the coverage under

Section 38-78-120.

(V) `Personal protection insurer' means an

automobile insurer providing personal protection

benefits.

(W) `Replacement services loss' means

expenses reasonably incurred in obtaining ordinary

and necessary services from others, not members of

the injured person's household, in lieu of those

the injured person would have performed for the

benefit of the household. Replacement services

loss does not include any loss incurred after the

death of an injured person, and the disability

period shall not exceed two years from the date of

the accident.

(X) `Resident relative' means a person

related to the owner of a motor vehicle by blood,

marriage, adoption, or otherwise and residing in

the same household. A person resides in the same

household if he or she usually makes his or her

home in the same family unit, even though

temporarily living elsewhere.

(Y) `Serious injury' means an accidental

bodily injury which results in death, serious and

permanent loss of an important bodily function,

<#PAGE>permanent and serious bodily injury determined

objectively within reasonable medical probability,

or serious and permanent disfigurement.

(Z) `Uncompensated economic loss' means that

portion of economic loss arising out of an

accidental bodily injury of an injured person which

exceeds the benefits provided by a personal

protection insurer under a policy providing such

benefits (except for loss incurred by a deductible

under such a policy) and collateral sources.

(aa) `Uninsured motorist' means the owner or

operator of a motor vehicle uninsured for either

basic personal protection or liability insurance at

the limits prescribed by this State's financial

responsibility laws or who otherwise fails to

comply with the financial responsibility laws of

this State.

(bb) `Uninsured motor vehicle' means a motor

vehicle required to be registered as to which (i)

there is no bodily injury liability insurance and

property damage liability insurance, (ii) no bond

has been given or cash or securities delivered in

lieu thereof, (iii) the owner has not qualified as

a self-insurer, and (iv) there is no basic or added

personal protection insurance as defined in Section

38-78-30.

(cc) `Reasonable and necessary' means usual

and customary charges for necessary medical

treatment.

(dd) `Permanent' means an injury whose effects

cannot be eliminated by further time for recovery

or by further treatment and care, including

surgery.

(ee) `Prevailing party' means the insured

deemed to be the `prevailing party' for purposes of

this section if the award is at least the amount

requested in writing of the insurer not less than

ten days prior to the trial. The insurer shall be

deemed to be the prevailing party if the award is

no more than the amount offered by the insurer in

writing not less than ten days prior to the trial.

There shall be `no prevailing party' if the award

is more than offered by the insurer, but less than

requested by the insured.

<#PAGE> (ff) `Reasonable proof' means itemized medical

bills or other medical records necessary to

determine specific patient information, dates of

treatment, a specific diagnosis, the specific

services rendered and the specific charges for each

of the services rendered. If an insurer requests

information in addition to the proof submitted,

they must specifically identify the additional

information needed and why it is needed.

(gg) `Serious' means only an injury which has

a substantial bearing on the injured person's

ability to resume substantially all of his normal

activities and lifestyle.

Section 38-78-40. Each motor vehicle required

to be registered in this State shall be insured for

basic personal protection as defined by Section

38-78-30(C) and security for payment of tort

liabilities as required by Section 38-77-140,

unless the owner of the motor vehicle exercises his

or her right of rejection under Section 38-78-120

or complies with Section 56-10-520 relating to the

right to drive without insurance. This insurance

may be provided by a contract of insurance or by

qualifying as a self-insurer in compliance with

Section 56-9-60.

An insurance policy written by a personal

protection insurer under this chapter to provide

basic personal protection is deemed to include all

coverages required by this chapter, including the

minimum tort liability coverage. Coverage under

basic personal protection meets the requirements of

this State's financial responsibility laws.

Section 38-78-50. Every personal protection

insured must be offered uninsured motorist coverage

as required by Section 38-77-150. Additional

uninsured motorist coverage and underinsured

motorist coverage must be offered to the insured as

required by Section 38-77-160. All other

provisions, rights, and obligations in Sections

38-77-150 and 38-77-160 apply to the personal

protection insured and the insurer. A personal

protection insured may not recover under the

uninsured motorist provision of the personal

protection policy if the personal protection

<#PAGE>insured was at fault in the accident. Noneconomic

damages may only be recovered under this provision

if the threshold as defined in Section 38-78-110 is

reached.

Section 38-78-55. Regardless of the number of

motor vehicles involved, policies issued, persons

covered, claims made, or premiums paid, the

liability limits for multiple coverages under one

or more automobile insurance policies must not be

combined or added together to determine the maximum

limit of coverage available to an injured person.

Unless the insurance policy or contract clearly

provides otherwise, the policy or contract may

provide that if two or more policies, plans, or

coverages apply equally to the same accident, the

highest limit of liability applicable is the

maximum amount available to an injured person under

any one of the policies, plans, or coverages.

Section 38-78-60. (A) A personal protection

insurer shall pay to a personal protection insured

benefits for accidental bodily injury sustained

within the United States, its territories, or

possessions or Canada.

(B) A personal protection policy issued in this

State contains coverage such that it satisfies the

liability insurance requirements of the financial

responsibility laws of any other state or Canadian

province in which the insured motor vehicle is

operated.

Section 38-78-70. (A) A personal protection

insurer has no obligation to provide benefits to or

on behalf of an injured person who at the time of

the accident:

(1) was involved in a motor vehicle accident

while committing a felony or while voluntarily

occupying a motor vehicle that he or she knew to be

stolen. If the person dies as a result of his or

her own intentional misconduct, his or her

survivors are not entitled to personal protection

for loss arising from the decedent's injury or

death;

(2) was driving under the influence of

alcohol or illegal drugs;

<#PAGE> (3) was occupying an uninsured motor vehicle

owned by the person;

(4) was guilty of intentional misconduct. If

the person dies as a result of his or her own

intentional misconduct, his or her survivors are

not entitled to personal protection for loss

arising from the decedent's injury or death;

(5) has rejected the limitation on his or her

right to sue under Section 38-78-120;

(6) was an uninsured motorist;

(7) was operating or occupying a motor

vehicle with three or fewer load bearing wheels;

(8) was operating an insured vehicle without

the express or implied consent of the owner; or

(9) was injured while occupying a motor

vehicle owned by, or furnished or available for the

regular use of, the injured person, or the injured

person's resident spouse or relative, if such motor

vehicle is not described in the policy under which

a claim is made, or is not a newly acquired or

replacement motor vehicle covered under the terms

of the policy.

(B) A personal protection insurer may include in

personal protection coverage any person under

subsection (A) if the insurer states its intent to

do so clearly on the policy.

Section 38-78-80. At the option of the personal

protection insurer, personal protection benefits

are payable to any of the following persons:

(1) the injured person;

(2) the parent or guardian of the injured

person, if the injured person is a minor or

incompetent;

(3) a survivor, executor, or administrator of

the injured person; or

(4) any other person or organization rendering

the services for which payment is due.

Section 38-78-90. (A) Subject to Section

38-78-80, a person who is entitled to receive

personal protection benefits may claim the benefits

in the following order up to the limits of personal

protection in the listed category:

(1) personal protection covering the motor

vehicle involved in the accident, if the person

<#PAGE>injured was an occupant of or was struck by the

motor vehicle. If the personal protection insurer

providing such insurance disclaims coverage, the

injured person shall be entitled to benefits under

any contract of personal protection insurance under

which he is a personal protection insured and the

insurer making such payments shall be entitled to

contest the disclaimer and seek full reimbursement

from the insurer disclaiming coverage;

(2) the personal protection under which the

injured person is or was an insured.

(B) If two or more insurers at the same priority

level are obligated to pay personal injury

benefits, the insurer against whom the claim is

first made shall pay the claim and may thereafter,

recover pro rata contributions from any other

insurer at the same priority level for the cost of

the payments and for processing the claim.

Disputes among insurers may be resolved only by

inter-company arbitration or inter-company

agreement. For purposes of this section, an

unoccupied parked motor vehicle is not a motor

vehicle involved in an accident unless it is parked

in such a way as to cause an unreasonable risk of

injury.

Section 38-78-100. (A) A personal protection

insurer is obligated to indemnify an injured

person, except that benefits payable for the same

accidental bodily injury under state-mandated

disability coverage or workers' compensation or

similar occupational compensation act shall be

subtracted from the personal protection benefits

payable to the injured person.

(B) A basic personal protection insurer must

offer a deductible to the named insured of a

personal protection policy in the amounts of two

hundred fifty dollars, five hundred dollars, and

one thousand dollars to apply with respect to a

claim by the named insured or a person residing in

the same household with the named insured. If the

named insured accepts such offer, the rate must be

reduced for such coverage in an amount filed by the

insurer and approved by the commissioner. The

named insured is not required to accept the offer

<#PAGE>and may choose personal protection coverage without

a deductible other than for property damage caused

by an uninsured motorist.

Section 38-78-110. (A) Any person who

registers, operates, maintains, or uses a motor

vehicle on the public roadways of this State and

their resident relatives shall, as a condition of

such registration, operation, maintenance, or use

of such motor vehicle and use of the public

roadways shall be conclusively presumed to have

accepted the limitations on his tort rights and

liabilities in this chapter unless he has filed a

rejection under Section 38-78-120.

(B) Tort liability with respect to accidents

occurring in this State and arising out of the

ownership, maintenance, or use of a motor vehicle

is abolished with respect to any person entitled to

benefits pursuant to Section 38-78-30(C) except to

the extent such person has sustained an injury as

defined in subsection (C) of this section or except

to the extent such person has sustained actual

economic loss in excess of the limits of any

applicable personal protection policy. Provided,

no person may recover noneconomic loss for personal

injury except as provided in subsection (C).

(C) In any action of tort brought against the

owner, registrant, operator, or occupant of a motor

vehicle with respect to which security has been

provided as required in this chapter, or against

any person or organization legally responsible for

his acts or omissions, a plaintiff may recover

damages in tort for pain, suffering, mental

anguish, and inconvenience because of bodily

injury, sickness, or disease arising out of the

ownership, maintenance, operation, or use of such

motor vehicle only in the event that the injury

reaches one of the following thresholds:

(1) the injury or disease consists in whole

or in part of permanent and serious disfigurement;

(2) permanent and serious bodily injury,

determined objectively, within reasonable medical

probability;

(3) permanent and serious loss of an

important bodily function; or

<#PAGE> (4) death.

(D) In any action where the defendant contends

that the plaintiff's injury does not meet the

standards set forth in section (C), either party

may seek summary judgment on that issue. If a

motion is made, the court may determine at least

thirty days before the date set for trial whether

there is a material issue of fact as to whether the

injury meets the standards of section (C) or if

not, render summary judgment in accordance with the

undisputed facts. If the facts regarding the

nature of the injury are undisputed, the question

as to whether or not the facts render the injury as

meeting the standards of section (C) is a question

of law to be decided by the court. In any action

to be tried before a jury where the defendant

contends the plaintiff's injury is not a serious

and permanent injury but the defendant concedes or

the court determines that there is a material issue

of fact as to whether the plaintiff's injury meets

the standards of section (C) then, upon motion of

the defendant, that issue shall be separately tried

and no other evidence as to plaintiff's noneconomic

loss shall be received until that issue has been

resolved. After resolution of that issue, the

amount of the plaintiff's noneconomic loss may be

tried before the same jury or a different jury, as

the court may in its discretion decide.

Section 38-78-120. (A) Any person may refuse to

consent to the limitations on his tort rights and

liabilities. To ensure preservation of the right

to choose to reject any limitations on tort rights

and liability contained in this chapter, any person

may execute a form approved by the commissioner for

rejecting such limitations. Within sixty days

after the enactment of this chapter, a temporary

committee composed of the commissioner, the

Consumer Advocate, two representatives of the South

Carolina Bar, (one specializing in the defense of

claims and one specializing in the prosecution of

claims) appointed by the Governor, a representative

of an automobile insurer appointed by the Consumer

Advocate, a member of the judiciary appointed by

the Chief Justice of the Supreme Court, an

<#PAGE>insurance agent appointed by the commissioner, and

one person specializing in readability appointed by

the Governor shall formulate the rejection form to

be used by all insurers in South Carolina. The

rejection forms for personal protection insurance

shall meet the readability index of no higher than

the ninth grade level on the Flesch Reading Ease

Test. The committee shall also develop a brochure

at no higher than the ninth grade level that must

be enclosed with the policyholder's renewal notice

the first time the policy is renewed after the

effective date of this chapter.

(B) The form shall establish the effective date

of such a rejection. Any rejection by a person who

is under a legal disability shall be made on behalf

of such person by a parent, legal guardian,

conservator, or committee and shall remain in

effect until revoked or until the person is no

longer under legal disability, whichever is sooner.

The failure of such guardian, parent, conservator,

or committee of a person under a legal disability

to file a rejection, within six months from the

date that this chapter would otherwise become

applicable to such person, is deemed to be an

affirmative acceptance of the limitations on tort

liability. Any person who at the time of an

accident does not have basic personal protection

but has not formally rejected such limitations and

has in effect security equivalent to that required

by Section 38-77-140 is deemed to have fully

rejected the tort limitations for that accident

only.

(C) A rejection of tort limitations must be

immediately filed with the insurance company or

agent who provides the insurance policy and is

effective on the effective date of the policy. The

rejection applies to any motor vehicle accident

occurring on or after that date. The rejection

remains effective until it is revoked in writing on

a form approved by the commissioner at the time of

renewal or issuance of a new policy by the purchase

of a tort policy. The revocation of the rejection

is effective until it is withdrawn in a manner

prescribed by the commissioner. The rejection form

<#PAGE>must be provided by the insurer or agent to the

insured upon the written request of the insured or

the request of a person with the legal capacity to

ask for the insured.

(D) The commissioner shall establish and

maintain a program designed to assure that all

consumers are adequately informed about the

comparative cost of personal protection insurance

and liability insurance for those persons who

choose to reject limitations on tort rights and

liabilities, as well as the benefits, rights and

responsibilities of insureds under each type of

insurance.

(E) A person who has personal protection

coverage or who rejects tort limitations on a form

approved by the commissioner is bound by that

choice and is precluded from claiming liability of

any party based on being inadequately informed as

to the coverage or rejection. This restriction

also applies to relatives residing in the same

household who are covered by the same policy.

(F) Each motor vehicle insurer issuing motor

vehicle liability insurance in this State may

require that all policies within a household be

either personal protection policies or liability

policies which satisfy the financial responsibility

laws of this State. However, policies purchased

separately by members of the same household may be

different policies.

(G) To further insure preservation of the right

to reject the limitations on tort rights contained

in this chapter, the commissioner shall establish

procedures whereby any person who does not own a

motor vehicle and who is not a resident relative of

such an owner may, after sustaining accidental

bodily injury, execute a form prescribed by the

commissioner for rejecting such limitation within

sixty days after the date of the accident. If any

personal protection benefits are paid before the

rejection is effective, the personal protection

insurer has a right of subrogation for any payments

made through a tort recovery.

Section 38-78-125. (A) A person may bring a

cause of action for injury against a person who

<#PAGE>caused him actual economic loss, for any

uncompensated economic loss.

(B) A person suffering accidental bodily injury

while occupying or when struck by a motor vehicle

which is insured for personal protection and who is

not at the time of the accident covered by a

rejection of limitations on tort rights and

liabilities under Section 38-78-120 and is not an

uninsured motorist may receive personal protection

benefits applicable to the motor vehicle and has a

right to claim uncompensated economic loss against

the personal protection insured. A person who

files a claim under this subsection has the same

rights and duties as a personal protection insured

with respect to a claim by that insured.

(C) An uninsured injured motorist may not claim

in tort for property damage except for such damage

that exceeds ten thousand dollars or for

noneconomic damages, unless the motor vehicle

operator is driving under the influence of alcohol

or illegal drugs or is guilty of intentional

misconduct. An uninsured motorist retains fault

liability with respect to others. A person driving

under the influence of alcohol or illegal drugs may

not claim in tort for either economic or

noneconomic damages against a person who has

rejected tort limitations. A person who rejects

tort limitations shall not collect personal

protection benefits unless he or she has revoked

his or her rejection under Section 38-78-120(C).

(D) A personal protection insured has a cause of

action against another personal protection insured

for property damage to recover any required

deductible.

Section 38-78-140. (A) Personal protection

benefits are payable monthly as loss accrues. Loss

accrues not when the injury occurs but as work

loss, replacement services loss, or medical expense

is incurred. The benefits are overdue if they are

not paid within thirty days after the personal

protection insurer receives reasonable proof of the

fact and the amount of loss sustained, except that

a personal protection insurer may accumulate claims

for a period not to exceed thirty days, in which

<#PAGE>case benefits are not overdue if they are paid

within twenty days after the period of

accumulation. If reasonable proof is not supplied

for the whole claim, the amount supported by

reasonable proof is overdue if it is not paid

within thirty days after the proof is received by

the insurer. Any part or all of the remainder of

the claim that is later supported by reasonable

proof is overdue if it is not paid within thirty

days after the proof is received by the insurer.

To determine the extent to which any benefits are

overdue, a payment is treated as made on the date

a draft or other valid instrument is mailed or, if

not so posted, the date of delivery. The personal

protection insurer may pay personal protection

benefits directly to a person who supplies

necessary products, services, or accommodations to

the injured person. All overdue payments shall

bear an annual eighteen percent interest rate.

(B) In addition to the interest payments, if the

insured has filed suit to recover overdue payments,

the insured shall be entitled to reasonable

attorney's fees and costs incurred in such suit.

The recovery set forth here is the exclusive remedy

for an insurer's failure to pay or delay in paying

personal protection benefits for conduct of an

insurer arising out of the manner in which the

insurer denied or delayed payment. An attorney

shall not charge a separate fee to collect benefits

except those incurred in connection with the suit

for overdue payments. In any action by or on

behalf of an insurer, a provider or an insured,

attorney's fees shall be awarded only to the

prevailing party.

(C) An insurer who rejects a claim for basic

personal protection benefits shall give to the

claimant prompt written notice of the rejection,

specifying the reason.

Section 38-78-150. (A) Personal protection

benefits, except medical benefits, are exempt from

garnishment, attachment, execution, or any other

process or claim to the extent that wages or

earnings are exempt under any applicable law.

<#PAGE> (B) An agreement for assignment of any right to

personal protection benefits payable in the future,

except for medical benefits, is unenforceable

except to the extent that the benefits are for the

cost of products, services, or accommodations

provided or to be provided by the assignee or that

the benefits are for loss of income from work or

replacement services and are assigned to secure

payment of alimony, maintenance, or child support.

Section 38-78-160. An insurer is allowed a

reasonable attorney fee for defending a claim for

benefits that is fraudulent or so excessive as to

have no reasonable foundation. The fee may be

treated as an offset against benefits due or which

thereafter accrue. The insurer may recover from

the claimant any part of the fee not offset or

otherwise paid.

Section 38-78-170. An insurer under a policy of

personal protection insurance may require written

notice to be given as soon as practicable after an

accident involving a secured vehicle for which it

provides coverage.

Section 38-78-190. If no personal protection

benefits have been paid other than death benefits,

a person may bring an action against the personal

protection insurer not later than two years after

the accidental bodily injury occurred. If personal

protection benefits have been paid, a person may

bring an action to recover further benefits not

later than two years after the last payment of

benefits or four years after the date the

accidental bodily injury occurred, whichever is

earlier.

Section 38-78-200. (A) If the mental or

physical condition of an injured person is material

to any claim for past or future personal protection

benefits, the injured person shall submit to

reasonable mental or physical examinations by a

physician or physicians designated by the insurer,

at the insurer's expense. The examinations shall

take place at a reasonably convenient time and

location. A personal protection insurer may

include provisions of this nature in a personal

protection policy.

<#PAGE> (B) If after a request by a personal protection

insurer a person refuses to submit to reasonable

mental and physical examinations by a physician or

physicians designated by the insurer or refuses to

undergo mental or rehabilitation services payable

by the insurer, the insurer, on written notice, may

deny benefits applicable to the period during which

the person refuses to submit to the examination.

Section 38-78-210. (A) On request by a claimant

or personal protection insurer, an employer shall

provide information on a form approved by the

commissioner, including the work records and

earnings, regarding an employee who has filed a

claim for personal protection benefits. On request

of the claimant or insurer the information must

cover the period specified by the claimant or

insurer making the request and may include a

reasonable period before, and the entire period

after, the injury.

(B) The claimant, upon request by the insurer,

must provide to the insurer the names and addresses

of the physicians and medical facilities rendering

diagnosis or treatment in regard to the injury or

to a relevant injury and the claimant shall

authorize the insurer to inspect and copy any

relevant medical records.

(C) Every physician or other health care

provider, including, but not limited to, a

hospital, clinic, or other medical institution

providing, before or after an injury resulting from

a motor vehicle accident upon which a claim for

personal protection benefits is based, any

products, services, or accommodations in relation

to that or any other injury, or in relation to a

condition claimed to be connected with that or any

other injury, shall, if requested to do so by the

personal protection insurer against whom the claim

has been made, furnish a written report of the

history, condition, treatment, and the dates and

costs of such treatment, of the injured person.

Every such physician or other health care provider,

hospital, clinic, or other medical institution

shall also promptly produce and permit the

inspection and copying of its records regarding

<#PAGE>such history, condition, and treatment, and the

dates and costs of treatment. A physician

providing such information to a personal protection

insurer shall be entitled to a fee of fifty cents

per page for providing copies of the medical

record, provided a minimum fee of ten dollars plus

postage is authorized. Physicians may charge other

reasonable fees for the production of other reports

or information requested by the personal insurance

carrier.

(D) No cause of action for violation of a

physician-patient privilege or invasion of the

right of privacy is allowed against any physician

or other health care provider, hospital, clinic, or

other medical institution complying with the

provisions of this section.

(E) The person requesting records and a sworn

statement under this section shall pay all

reasonable costs connected therewith.

(F) A court may order or prohibit discovery of

any records under this section in case of any

dispute as to the right of a claimant or insurer to

discover the information required to be disclosed

by this section.

Section 38-78-240. A physician or other health

care provider, including, but not limited to, a

hospital, clinic, or other health care institution

rendering treatment to an injured person, may

charge only a reasonable amount for the products,

services, and accommodations rendered. The charge

shall not exceed the amount the person or

institution customarily charges for the products,

services, and accommodations in cases not involving

automobile insurance.

Section 38-78-260. The commissioner shall adopt

rules which encourage personal protection insurers

to institute incentives for personal protection

insureds to install, maintain, and make use of

injury-reducing devices such as seat and harness

belts, air bags, and child restraint systems.

Section 38-78-280. (A) Each insurer authorized

to transact business or transacting business in

this State shall file with the commissioner a form

approved by the commissioner which states that any

<#PAGE>contract of motor vehicle liability insurance,

wherever issued, covering the maintenance or use of

a motor vehicle while the motor vehicle is in this

State, is deemed to satisfy Section 38-78-40 once

the vehicle has been continuously present in this

State for thirty days unless the named insured has

rejected the limitations on tort rights and

liabilities under Section 38-78-120.

(B) If a person is entitled to personal

protection benefits or their equivalent under the

requirements of more than one state, the person

shall elect to recover under the laws of one state.

The election represents the exclusive source of

recovery of all personal protection benefits, or

their equivalent, paid or payable under the

financial responsibility requirements of that or

any other state.

Section 38-78-290. All insurance coverages

provided under this chapter are subject to such

terms, conditions, and exclusions which have been

approved by the commissioner.

Section 38-78-325. The commissioner may

promulgate regulations for effective administration

which are fair, equitable, and consistent with the

purpose of this chapter."

SECTION 2. Section 38-77-30(1) of the 1976

Code is amended to read:

"(1) `Automobile insurance' means automobile

bodily injury and property damage liability

insurance, including medical payments and uninsured

motorist coverage, and automobile physical damage

insurance such as automobile comprehensive physical

damage, collision, fire, theft, combined additional

coverage, and similar automobile physical damage

insurance and economic loss benefits as provided by

this chapter written or offered by automobile

insurers. Automobile insurance policy includes a

motor vehicle liability policy as defined in item

(7) of Section 56-9-20 and includes the personal

protection policy as defined in Section

38-78-30(C)."

SECTION 3. Section 38-77-110(B) of the 1976

Code, as added by Act 148 of 1989, is amended by

adding the following:

<#PAGE> "(5) two hundred fifty thousand dollars for

added personal protection coverage as defined in

Section 38-78-30(B)."

SECTION 4. Article 3, Chapter 77, Title 38 of

the 1976 Code is amended by adding:

"Section 38-77-355. (A) In a claim or action

for personal injury or wrongful death arising out

of the ownership, operation, use, or maintenance of

a motor vehicle, the court shall admit into

evidence the total amount paid to the claimant from

collateral sources, and the court shall instruct

the jury to deduct from its verdict the value of

all benefits received by the claimant from

collateral sources.

(B) For purposes of this section, `collateral

sources' means payments made to the claimant, or on

his behalf, by or pursuant to:

(1) automobile liability, uninsured motorist,

underinsured motorist, or automobile accident

insurance that provides health benefits or income

disability coverage;

(2) personal protection benefits paid or

payable by law;

(3) payments made from a policy of automobile

insurance by or on behalf of a joint tortfeaser,

either by way of settlement or judgment.

(C) No claimant may make claim or demand, no

court may order payment, and no insurer may pay by

way of settlement, covenant not to sue, or trust or

loan agreement for an item of damages to the extent

that the claimant has already received, or will

receive, reimbursement for that item as a result of

a collateral source payment as defined in this

section."

SECTION 5. Section 38-77-280 of the 1976

Code, as last amended by Act 113 of 1991, is

further amended to read:

"Section 38-77-280. <STRK>(A) Except as provided in

subsection (B), all automobile insurers, including

those insurance companies writing private passenger

physical damage coverages only, shall make

collision coverage and either comprehensive or

fire, theft, and combined additional coverage

<#PAGE>available to an insured or qualified applicant who

requests the coverage.

Collision coverage must have a mandatory

deductible of two hundred fifty dollars, but an

insured or qualified applicant, as his option, may

select an additional deductible in appropriate

increments up to one thousand dollars.

Comprehensive coverage or fire, theft, and

combined additional coverages must have a mandatory

deductible of two hundred fifty dollars, but an

insured, at his option, may select an additional

deductible in appropriate increments up to one

thousand dollars. This deductible does not apply

to auto safety glass. It is an unfair trade

practice, as described in Sections 38-57-30 and

38-57-40, for an insurer or an agent to sell

collision insurance, comprehensive coverage, or

fire, theft, and combined additional coverages

unless the insured is notified at the time of

application of the savings which may be realized if

the applicant or the insured selects a higher

deductible. This notice is required only at the

time of the initial sale and must be in a form

approved by the Chief Insurance Commissioner. An

insurer may offer insureds lower deductibles at the

insurer's option.

(B) Notwithstanding subsection (A) and Sections

38-77-110 and 38-77-920, automobile insurers may

refuse to write automobile physical damage

insurance coverage, including automobile

comprehensive physical damage, collision, fire,

theft, and combined additional coverage, for an

applicant or existing policyholder, on renewal, for

a motor vehicle customarily operated by an

individual, either the named insured or any other

operator not excluded in accordance with Section

38-77-340 and who resides in the same household,

where one or more of the conditions or factors

prescribed in Section 38-73-455 exist. In

addition, automobile insurers may refuse to write

physical damage insurance coverage to any applicant

or existing policyholder, on renewal, who has

collected benefits provided under any automobile

insurance physical damage coverage during the

<#PAGE>thirty-six months immediately preceding the

effective date of coverage, for two or more total

fire losses or two or more total theft losses.

Automobile insurers may refuse to write for private

passenger automobiles comprehensive physical

damage, collision, fire, theft, and combined

additional coverage, for an applicant or existing

policyholder, on renewal, for a motor vehicle

customarily operated by an individual, either the

named insured or another operator not excluded in

accordance with Section 38-77-340 and who resides

in the same household, which does not qualify for

the safe driver discount in Section 38-73-760(e).

(C) Notwithstanding Section 38-77-110,

automobile physical damage coverage in an

automobile insurance policy may be canceled at any

time during the policy period by reason of the

factors or conditions described in Section

38-73-455(A) or Section 38-77-280(B) which existed

before the commencement of the policy period and

which were not disclosed to the insurer at the

commencement of the policy period.

(D) No policy of insurance which provides

automobile physical damage coverage only may be

ceded to the facility.

(E) Insurers of automobile insurance may charge

a rate for physical damage insurance coverages

different than those provided for in Section

38-73-457 if the rates are filed and approved by

the Chief Insurance Commissioner. Any applicant or

existing policyholder, to be charged this different

rate, must be denied the coverage pursuant to

subsection (B) at the rate provided in Section

38-73-457.

(F) A carrier may not cede collision coverage,

comprehensive coverage, or fire, theft, and

combined additional coverages with a deductible of

less than two hundred fifty dollars. An insured or

qualified applicant may select an additional

deductible in appropriate increments up to one

thousand dollars. However, the mandatory

deductible does not apply to safety glass.</STRK>

Notwithstanding Sections 38-77-110 and 38-77-920,

after September 30, 1992, automobile insurers may

<#PAGE>refuse to write or renew private passenger

automobile physical damage insurance coverage,

including automobile comprehensive physical damage,

collision, fire, theft, and combined additional

coverage for an applicant or existing policyholder.

After September 30, 1992, no private passenger

automobile physical damage insurance coverage may

be ceded to the Facility."

SECTION 6. Section 38-77-30(4) of the 1976

Code is amended to read:

"(4) `Damages' includes <STRK>both</STRK> actual <STRK>and

punitive</STRK> damages only."

SECTION 7. Section 38-77-140 of the 1976 Code

is amended to read:

"Section 38-77-140. (A) No automobile

insurance policy may be issued or delivered in this

State to the owner of a motor vehicle or may be

issued or delivered by an insurer licensed in this

State upon any motor vehicle then principally

garaged or principally used in this State, unless

it contains a provision insuring the persons

defined as insured against loss from the liability

imposed by law for actual damages arising out of

the ownership, maintenance, or use of these motor

vehicles within the United States or Canada,

subject to limits exclusive of interest and costs,

with respect to each motor vehicle, as follows:

fifteen thousand dollars because of bodily injury

to one person in any one accident, and, subject to

the limit for one person, thirty thousand dollars

because of bodily injury to two or more persons in

any one accident, and five thousand dollars because

of injury to or destruction of property of others

in any one accident. Nothing in this article

prevents an insurer from issuing selling, or

delivering a policy providing liability coverage in

excess of these requirements.

(B) An insurer shall also offer the insured, in

accordance with Section 38-77-350, a rider or

endorsement for an additional premium to cover such

liability for punitive damages. The insured has

the option of accepting or refusing coverage for

punitive damages.

<#PAGE> As a result of passage of this section, all

insurers offering bodily injury liability coverage

shall file with the Chief Insurance Commissioner,

not later than ninety days after the effective date

of this act, revised premium rates for bodily

injury liability coverage to be effective on

automobile insurance policies issued or renewed

with effective dates on or after January 1, 1993.

The revised rates must be approved by the

commissioner and reflect a reduction in the

currently approved premium rate for this coverage

of at least one and one-half percent. Insurers

shall file with the commissioner not later than

sixty days after the effective date of this act

premium charges for the punitive damages loss

coverage. The premium rate for this coverage shall

become effective for the automobile insurance

policies issued or renewed with effective dates on

or after January 1, 1993, and may not be approved

if it is more, when combined with the reduced

premium rate for the new bodily injury liability

coverage with limitations on the recovery of

punitive damages, than the bodily injury liability

premium rate for that insurer on the effective date

of this act; however, after December 31, 1993, an

insurer may apply to the Chief Insurance

Commissioner for a rate adjustment for such

coverage, based on its actual experience."

SECTION 8. Section 38-77-150 of the 1976 Code

is amended to read:

"Section 38-77-150. (A) No automobile

insurance policy or contract may be issued or

delivered unless it contains a provision by

endorsement or otherwise, herein referred to as the

uninsured motorist provision, undertaking to pay

the insured all sums which he is legally entitled

to recover as actual damages from the owner or

operator of an uninsured motor vehicle, within

limits which <STRK>may be</STRK> are no less than the

requirements of Section 38-77-140 and no more than

the insured's bodily injury and property damage

liability limits. <STRK>The uninsured motorist provision

shall also provide for no less than five thousand

dollars' coverage for injury to or destruction of

<#PAGE>the property of the insured in any one accident but

may provide an exclusion of the first two hundred

dollars of the loss or damage.</STRK>

(B) Automobile insurers shall offer, at the

option of the insured and in the manner hereinafter

described, higher limits of uninsured motorist

coverage in accordance with Section 38-77-350. The

offer of higher limits must be made in connection

with every initial application for an automobile

insurance policy by including a written explanation

of the coverage and inquiry of the applicant, in a

form prescribed by the Chief Insurance

Commissioner, as to whether the applicant desires

to purchase uninsured motorist coverage with limits

greater than the mandatory coverages described in

subsection (A). No such explanation or inquiry

need be made with respect to any renewal,

replacement, reinstatement, substitute, or

modification of the policy. An insured may, at any

time and subject to the limits of this section,

specifically request in writing uninsured motorist

coverage limits greater than that provided on the

current or any prior policy.

(C) Insurers shall offer on a form prescribed by

the Chief Insurance Commissioner `nonstackable'

policies of uninsured motorist coverage containing

policy provisions establishing that if the insured

accepts this offer:

(1) Regardless of the number of vehicles

involved, persons covered, number of premiums paid,

or vehicles or premiums shown on the policy or

policies under which the insured might otherwise be

entitled to benefits, the coverage provided as to

two or more motor vehicles under the same or

different policies may not under any circumstances

be added together, combined with, or stacked to

determine the limit of insurance coverage available

to an injured person for any one accident, except

as provided in item (3) of this subsection (C).

(2) If at the time of the accident the

injured person is occupying a motor vehicle, the

uninsured motorist coverage available to him is the

coverage available as to that motor vehicle.

<#PAGE> (3) If the injured person is occupying a

motor vehicle which is not owned by him or by a

family member residing with him, he is entitled to

the highest limits of uninsured motorist coverage

afforded for any one vehicle as to which he is

named insured. Such coverage is excess over the

coverage on the vehicle he is occupying.

(4) The uninsured motorist coverage provided

by the policy does not apply to the named insured

who is injured while occupying any vehicle owned by

the named insured for which uninsured motorist

coverage was not purchased.

(5) If at the time of the accident the

injured person is not occupying a motor vehicle, he

is entitled to select any one limit of uninsured

motorist coverage for any one vehicle afforded by

a policy under which he is insured as a named

insured.

(6) In connection with the offer authorized

by this subsection, insurers shall inform the named

insured, applicant, or lessee, on a form prescribed

by the Chief Insurance Commissioner, of the

limitations imposed under this subsection and that

such coverage is an alternative to coverage without

such limitations. If this form is signed by a

named insured, applicant, or lessee, it is

conclusively presumed that there was an informed,

knowing acceptance of such limitations, and neither

the insurance company nor the insurance agent has

any liability to the insured for the insured's

failure to purchase stackable coverage. When the

named insured, applicant, or lessee has initially

accepted such limitations, the acceptance applies

to any policy which renews, extends, changes,

supersedes, reinstates or replaces an existing

policy unless the named insured requests deletion

of the limitations and pays the appropriate premium

for the coverage. Any insurer who provides

coverage which includes the limitations provided in

this subsection shall file revised premium rates

with the Department of Insurance for such uninsured

motorist coverage to take effect before initially

providing such coverage. The revised rates must

reflect the anticipated reduction in loss costs

<#PAGE>attributable to such limitations but, in any event,

must reflect a reduction in the uninsured motorist

coverage premium of at least fifteen percent for

policies with such limitations. Insurers shall

file within ninety days after the effective date of

this act, revised premium rates with the Chief

Insurance Commissioner to be effective on

automobile insurance policies issued or renewed

with effective dates on or after January 1, 1993.

(D) Premium rates made by insurers for uninsured

motorist coverage must be determined and regulated

as premium rates for automobile insurance generally

are determined and regulated. The Chief Insurance

Commissioner <STRK>may prescribe</STRK> shall approve the form

to be used in providing uninsured motorist coverage

and <STRK>when prescribed and promulgated</STRK> no other form

may be used.

(E) No action may be brought under the uninsured

motorist provision unless copies of the pleadings

in the action establishing liability are served in

the manner provided by law upon the insurer writing

the uninsured motorist provision. The insurer has

the right to appear and defend in the name of the

uninsured motorist in any action which may affect

its liability and has thirty days after service of

process on it in which to appear. The evidence of

service upon the insurer may not be made a part of

the record.

(F) Benefits paid pursuant to this section are

subject to subrogation and assignment."

SECTION 9. Section 38-77-160 of the 1976

Code, as last amended by Act 148 of 1989, is

further amended to read:

"Section 38-77-160. (A) Automobile <STRK>insurance

carriers</STRK> insurers shall offer on a form prescribed

by the Chief Insurance Commissioner, at the option

of the insured in accordance with Section 38-77-350

<STRK>uninsured</STRK> underinsured motorist coverage <STRK>up to the

limits of the insured's liability coverage in

addition to the mandatory coverage prescribed by

Section 38-77-150. Such carriers shall also offer,

at the option of the insured, underinsured motorist

coverage up to the limits of the insured liability

coverage to provide coverage in the event that

<#PAGE>damages are sustained in excess of the liability

limits carried by an at fault insured or

underinsured motorist. If, however, an insured or

named insured is protected by uninsured or

underinsured motorist coverage in excess of the

basic limits, the policy shall provide that the

insured or named insured is protected only to the

extent of the coverage he has on the vehicle

involved in the accident. If none of the insured's

or named insured's vehicles is involved in the

accident, coverage is available only to the extent

of coverage on any one of the vehicles with the

excess or underinsured coverage.</STRK> up to the limits

selected for the insured's liability coverage to

provide coverage in the event the insured becomes

legally entitled to collect damages from the owner

or operator of an underinsured motor vehicle, as

defined in Section 38-77-30(14). The maximum

liability of the insurer under the underinsured

motorist coverage provided is the lesser of: (1)

the difference between the limit of underinsured

motorist coverage and the amount paid or payable to

the insured by or for any person or organization

who is held legally liable for the bodily injury or

property damage, or (2) the amount of damages

sustained, but not recovered. In no event may the

liability of the insurer under such coverage be

more than the limits of underinsured motorist

coverage provided.

(B) An insured entitled to benefits under an

uninsured motorist provision is not entitled to

benefits under an underinsured motorist provision.

An insured entitled to benefits under an

underinsured motorist provision is not entitled to

benefits under an uninsured motorist provision.

(C) Insurers shall offer on a form prescribed by

the Chief Insurance Commissioner `nonstackable'

policies of underinsured motorist coverage

containing policy provisions establishing that if

the insured accepts this offer:

(1) Regardless of the number of vehicles

involved, persons covered, number of premiums paid,

or vehicles or premiums shown on the policy or

policies under which the insured might otherwise be

<#PAGE>entitled to benefits, the coverage provided as to

two or more motor vehicles under the same or

different policies may not under any circumstances

be added together, combined with, or stacked to

determine the limit of insurance coverage available

to an injured person for any one accident, except

as provided in item (3) of this subsection (C).

(2) If at the time of the accident the

injured person is occupying a motor vehicle, the

underinsured motorist coverage available to him is

the coverage available as to that motor vehicle.

(3) If the injured person is occupying a

motor vehicle which is not owned by him or by a

family member residing with him, he is entitled to

the highest limits of underinsured motorist

coverage afforded for any one vehicle as to which

he is named insured. Such coverage is excess over

the coverage on the vehicle he is occupying.

(4) The underinsured motorist coverage

provided by the policy does not apply to the named

insured who is injured while occupying any vehicle

owned by the named insured for which underinsured

motorist coverage was not purchased.

(5) If at the time of the accident the

injured person is not occupying a motor vehicle, he

is entitled to select any one limit of underinsured

motorist coverage for any one vehicle afforded by

a policy under which he is insured as a named

insured.

(6) In connection with the offer authorized

by this subsection, insurers shall inform the named

insured, applicant, or lessee, on a form prescribed

by the chief insurance commissioner, of the

limitations imposed under this subsection and that

such coverage is an alternative to coverage without

such limitations. If this form is signed by a

named insured, applicant, or lessee, it is

conclusively presumed that there was an informed,

knowing acceptance of such limitations, and neither

the insurance company nor the insurance agent has

any liability to the insured for the insured's

failure to purchase stackable coverage. When the

named insured, applicant, or lessee has initially

accepted such limitations, the acceptance applies

<#PAGE>to any policy which renews, extends, changes,

supersedes, reinstates or replaces an existing

policy unless the named insured requests deletion

of the limitations and pays the appropriate premium

for the coverage.

(D) If an insured is entitled to uninsured

motorist or underinsured motorist coverage under

more than one policy the maximum amount the insured

may recover may not exceed the highest limit of

such coverage provided for any one vehicle under

any one policy. If more than one policy applies,

the following is the order of priority: (1) a

policy covering a motor vehicle occupied by the

injured person at the time of the accident; (2) a

policy covering a motor vehicle not involved in the

accident under which the injured person is named

insured; (3) a policy covering a motor vehicle not

involved in the accident under which the injured

person is an insured other than a named insured.

Coverage available under a lower priority policy

applies only to the extent it exceeds the coverage

of a higher priority policy. The underinsured

motorist coverage does not apply to bodily injury,

sickness, or death of an insured while occupying a

motor vehicle owned by, furnished, or available for

the regular use of the insured, a resident spouse,

or resident relative, if such motor vehicle is not

described in the policy under which a claim is

made, or is not a newly acquired or replacement

vehicle covered under the terms of the policy.

(E) Underinsured motorist <STRK>Benefits</STRK> benefits paid

pursuant to this section are <STRK>not</STRK> subject to

subrogation and assignment.

(F) No action may be brought under the

underinsured motorist provision unless copies of

the pleadings in the action establishing liability

are served in the manner provided by law upon the

insurer writing the underinsured motorist

provision. The insurer has the right to appear and

defend in the name of the underinsured motorist in

any action which may affect its liability and has

thirty days after service of process on it in which

to appear. The evidence of service upon the

insurer may not be made a part of the record. In

<#PAGE>the event the automobile insurance insurer for the

putative at-fault insured chooses to settle in part

the claims against its insured by payment of its

applicable liability limits on behalf of its

insured, the underinsured motorist insurer may

assume control of the defense of action for its own

benefit. No underinsured motorist policy may

contain a clause requiring the insurer's consent to

settlement with the at-fault party.

Insurers offering uninsured motorist coverage

must file with the commissioner no more than ninety

days after the effective date of this act revised

premium rates for this coverage to be effective on

all policies of automobile insurance containing

such coverage issued on or renewed with effective

dates on or after January 1, 1993. The revised

rate must be approved by the commissioner and

reflect a reduction in the currently approved

premium rate for this coverage of at least eighteen

percent; provided, however, that after December 31,

1993, an insurer may apply to the Chief Insurance

Commissioner for a rate adjustment for such

coverage, based on its actual experience. In the

first year following such reductions, an insurer

may apply to the Chief Insurance Commissioner for

a rate adjustment, based on its actual experience,

and include consideration of the time value of

money."

SECTION 10. Section 56-9-350 of the 1976 Code

is amended to read:

"Section 56-9-350. The operator or owner of a

motor vehicle involved in an accident resulting in

property damage of four hundred dollars or more or

in bodily injury or death<STRK>, must be furnished a

written request form at the time of the accident,

or as soon after the accident as possible, by the

investigating officer for completion and

verification of liability insurance coverage, the

form to be in a manner prescribed by the

Department.

The completed and verified form must be returned

by the operator or owner to the Department within

fifteen days from the date the form was delivered

by the officer. Failure to return the form,

<#PAGE>verified in the proper manner, is prima facie

evidence that the vehicle was uninsured.

The operator or owner of a motor vehicle

involved in an accident resulting in property

damage of four hundred dollars or more, or in

bodily injury or death, which was not investigated

by a law enforcement officer shall furnish to the

Department a written report and verification of

liability insurance coverage, the proof to be in a

manner prescribed by the Department</STRK> within fifteen

days after the accident, shall forward a written

report of the accident to the department on a form

prescribed by the department. The report must

contain information to enable the department to

determine whether the requirements for the deposit

of security under Section 56-9-351 are inapplicable

by reason of the existence of insurance or other

exceptions specified in this title. Failure to

file the report, in the proper verified manner, is

prima facie evidence that the vehicle was not

registered in compliance with this title."

SECTION 11. Section 56-10-10 of the 1976 Code

is amended to read:

"Section 56-10-10. <STRK>Every owner of a motor

vehicle required to be registered in this State

shall maintain the security required by Section

56-10-20 with respect to each such motor vehicle

owned by him throughout the period the registration

is in effect.</STRK> Security must be maintained on every

motor vehicle required to be registered in this

State where the owners or other operators not

excluded in accordance with Section 38-77-340,

reside in the same household and are insureds under

the same policy, if one of the owners or other

operators do not qualify for the safe driver

discount in Section 38-73-760(E). Such security

must be maintained with respect to each such motor

vehicle owned by him throughout the period the

registration is in effect. No certificate of

registration may be issued or transferred to an

owner by the executive director unless the owner or

prospective owner produces satisfactory evidence

that the security is in effect, including the name

of the owner's automobile liability insurer, the

<#PAGE>name of the agent, the identification number of the

insurance policy, and the effective dates of the

policy, except in cases where other security is

approved."

SECTION 12. Section 56-10-220 of the 1976 Code

is amended to read:

"Section 56-10-220. Every person required to

provide security on a motor vehicle as provided in

Section 56-10-10 applying for registration for a

motor vehicle shall at the time of such

registration and licensing declare the vehicle to

be an insured motor vehicle under the penalty set

forth in Section 56-10-260 and shall execute and

furnish to the department his certificate that such

motor vehicle is an insured motor vehicle and that

he will maintain insurance thereon during the

registration period. The certificate must be in

the form prescribed by the department. The

department may require any registered owner or any

applicant for registration and licensing of a motor

vehicle declared to be an insured motor vehicle to

submit a certificate of insurance executed by an

authorized agent or representative of an insurance

company authorized to do business in this State.

Such certificate must also be in a form prescribed

by the department."

SECTION 13. Section 56-10-240 of the 1976 Code

is amended to read:

"Section 56-10-240. If, during the period for

which it is licensed, a motor vehicle for which

security is required as provided in Section

56-10-10 is or becomes an uninsured motor vehicle,

then the vehicle owner immediately shall obtain

insurance on the vehicle or within five days after

the effective date of cancellation or expiration of

his liability insurance policy surrender the motor

vehicle license plates and registration

certificates issued for the motor vehicle. If five

working days after the last day to pay an

automobile liability insurance premium, whether it

is the premium due date or a grace period that is

granted customarily or contractually a motor

vehicle is an uninsured motor vehicle, the insurer

shall give written notice, or notice by magnetic or

<#PAGE>electronic media in a manner considered

satisfactory to the department, within ten days

after the five-day period ends, in addition to that

notice previously given in accordance with law, by

delivery under United States Post Office bulk

certified mail, return receipt requested, to the

department of the cancellation or refusal to renew

under the following circumstances:

(1) the lapse or termination of such insurance

or security occurs within three months of issuance

provided that this subsection only applies to new

policies, and not renewal or replacement policies;

or

(2) the lapse or termination occurs after three

months for a resident <STRK>who fails one or more of the

objective standards prescribed in Section 38-73-455</STRK>

who does not qualify for the safe driver discount

in Section 38-73-760(E). The department may, in

its discretion, authorize insurers to utilize

alternative methods of providing notice of

cancellation of or refusal to renew to the

department. The department may not reissue

registration certificates and license plates for

that vehicle until satisfactory evidence has been

filed by the owner or by the insurer who gave the

cancellation or refusal to renew notice to the

department that the vehicle is insured. Upon

receiving information to the effect that a policy

is canceled or otherwise terminated on a motor

vehicle registered in South Carolina, the

department shall suspend the license plates and

registration certificate and shall initiate action

as required within fifteen days of the notice of

cancellation to pick up the license plates and

registration certificate. A person who has had his

license plates and registration certificate

suspended by the department, but who at the time of

suspension possesses liability insurance coverage

sufficient to meet the financial responsibility

requirements as set forth in this chapter, has the

right to appeal the suspension immediately to the

Chief Insurance Commissioner. If the commissioner

determines that the person has sufficient liability

insurance coverage, he shall notify the department,

<#PAGE>and the suspension is voided immediately. The

department shall give notice by first class mail of

the cancellation or suspension of registration

privileges to the vehicle owner at his last known

address. However, when license plates are

surrendered pursuant to this section, they must be

held at the department office in the county where

the person who surrenders the plates resides.

If the vehicle owner unlawfully refuses to

surrender the suspended items as required in this

article, the department through its designated

agents or by request to a county or municipal law

enforcement agency may take possession of the

suspended license plates and registration

certificate and may not reissue the registration

until proper proof of liability insurance coverage

is provided and until the owner has paid a

reinstatement fee of two hundred dollars for the

first refusal under this section, and three hundred

dollars for each subsequent refusal. A person who

voluntarily surrenders his license plates and

registration certificate before their suspension

shall only be charged a reinstatement fee of five

dollars.

A person wilfully failing to return his motor

vehicle license plates and registration

certificates as required in this section is guilty

of a misdemeanor and, upon conviction, must be

punished as follows:

(1) for a first offense, fined not less than one

hundred dollars nor more than two hundred dollars

or imprisoned for thirty days;

(2) for a second offense, fined two hundred

dollars or imprisoned for thirty days, or both;

(3) for a third and subsequent offense,

imprisoned for not less than forty-five days nor

more than six months.

Only convictions which occurred within ten years

including and immediately preceding the date of the

last conviction constitute prior convictions within

the meaning of this section."

SECTION 14. Chapter 10, Title 56 of the 1976

Code is amended by adding:

<#PAGE>

Section 56-10-510. As used in this article:

(1) `Conviction' includes the entry of any plea

of guilty or nolo contendere and the forfeiture of

any bail or collateral deposited to secure a

defendant's appearance.

(2) `Insured motor vehicle' is a motor vehicle

as to which (a) there is bodily injury liability

insurance and property damage liability insurance,

both in the amounts specified in Section 38-77-140,

issued by an insurer authorized to do business in

this State, (b) a bond has been given or cash or

securities delivered in lieu of the insurance, (c)

the owner has qualified as a self-insurer in

accordance with the provisions of Section 56-9-60,

or (d) the owner has at least basic personal

protection insurance as defined in Section

38-78-30(C); and

(3) `Uninsured motor vehicle' is a motor vehicle

required to be registered as to which (a) there is

no bodily injury liability insurance and property

damage liability insurance, (b) no bond has been

given or cash or securities delivered in lieu

thereof, (c) the owner has not qualified as a

self-insurer, and (d) there is no basic or added

personal protection insurance as defined in Section

38-78-30.

(4) `Department' is the South Carolina

Department of Highways and Public Transportation.

Section 56-10-520. In addition to any other fees

prescribed by law, every person registering and

licensing an uninsured motor vehicle, as defined in

Section 56-10-510, in this State shall pay, at the

time of registering and licensing an uninsured

motor vehicle, the sum of two hundred and fifty

dollars. Credit for payment made on a motor

vehicle subsequently transferred during the same

licensing year must be applied to any motor vehicle

thereafter registered by the uninsured motorist

during the same licensing year. Every person

knowingly operating an uninsured motor vehicle

<#PAGE>pursuant to this section shall not be deemed in

violation of Section 56-10-270.

Section 56-10-530. The department of Highways

and Public Transportation may require that a person

applying for licensing and registration of a motor

vehicle shall certify under the penalties set forth

in Section 56-10-260 whether or not each motor

vehicle is an insured motor vehicle as defined in

Section 56-10-510 or the department may in its

discretion require that a person (a) produce as

evidence of financial responsibility a certificate

on a form prescribed by the department of insurance

or self-insurance complying with the requirements

of Section 56-9-60, (b) has given bond or delivered

the cash or securities as provided in Sections

56-9-570 and 56-9-580, respectively, or (c) pay the

fee prescribed in Section 56-10-520.

Section 56-10-560. All funds collected by the

department under the provisions of this article

must be deposited to the credit of the State

Treasurer and monthly transferred to a special

deposit fund to be known as the `Uninsured

Motorists Fund' to be disbursed as provided in

Section 56-10-570 to 56-10-590.

Section 56-10-570. The fund is under the

supervision and control of the Chief Insurance

Commissioner and must be paid out, on warrants of

the Comptroller General issued on vouchers signed

by the commissioner or persons he designates, for

the purpose of defraying the costs of

administration of this article by the department

and for reducing the operating losses of the

Reinsurance Facility as provided in Section

56-10-580. As determined by the commissioner, when

the recoupment fee is no longer necessary to pay

for losses incurred by the facility as a result of

the phasing out of the facility as provided for by

Section 38-77-1310, the fund must be paid out for

financing of driver safety measurers and for

enforcing the uninsured motorist laws of the state

as determined by the General Assembly.

Section 56-10-580. The Chief Insurance

Commissioner annually, prior to September 30 of

<#PAGE>each year, shall make distribution from the fund as

follows:

(1) to the department, the amount certified by

it as its administrative costs and expenses for

this article. These payments may be made on a

quarterly basis.

(2) to the Reinsurance Facility to reduce the

operating losses of the Facility for the twelve

month period in which they are collected and to

reduce the recoupment charges prescribed in Section

38-77-1310 assessed to drivers with the safe driver

discount.

(3) to finance driver safety measures and

enforce the uninsured motorist laws of the state as

determined by the General Assembly, when the

recoupment fee is no longer necessary to pay for

losses incurred by the Facility, determined by the

commissioner, as a result of the phasing out of the

Facility as provided for by Section 38-77-1310.

Section 56-10-590. The Chief Insurance

Commissioner may promulgate regulations necessary

to implement the provisions of this article.

Section 56-10-610. This article does not repeal

any other provision contained in this title, but is

cumulative to such other provisions."

SECTION 15. Section 38-77-110(A) of the 1976

Code, as last amended by Act 148 of 1989, is

further amended to read:

"(A) Automobile insurers other than insurers

designated and approved as specialized insurers by

the commissioner may not refuse to write or renew

automobile insurance policies for individual

private passenger automobiles if the risk qualifies

for the safe driver discount in Section

38-73-760(e) or small commercial risks. These

policies may not be canceled except for reasons

which had they existed or been known when the

policy was written would have rendered the risk not

an insurable risk. Every automobile insurance risk

constitutes an insurable risk unless the operator's

permit of the named insured has been revoked or

suspended and is at the time of application for

insurance so revoked or suspended. However, no

insurer is required to write or renew automobile

<#PAGE>insurance on any risk if there exists a valid and

enforceable outstanding judgment secured by an

insurer, an agent, or licensed premium service

company on account of automobile insurance premiums

which the applicant or insured or any principal

operator who is a member of the named insured's

household has failed or refused to pay unless the

applicant or insured pays in advance the entire

premium for the full term of the policy sought to

be issued or renewed or the annual premium,

whichever is the lesser. No insurer is required to

write or renew private passenger automobile

insurance if the risk does not qualify for the safe

driver discount in Section 38-73-760(e). An

insurer is not precluded from effecting

cancellation of an automobile insurance policy,

either upon its own initiative or at the instance

of an agent or licensed premium service company,

because of the failure of any named insured or

principal operator to pay when due any automobile

insurance premium or any installment payment.

However, notice of cancellation for nonpayment of

premium notifies the person to whom the notice is

addressed that the notice is void and ineffective

if payment of the full amount of the premium or

premium indebtedness, whichever is the greater, is

made to the insurer, agent, or licensed premium

service company named in the notice by the

otherwise effective date of cancellation. This

notice of cancellation is not considered

ineffective for being conditional, ambiguous, or

indefinite."

SECTION 16. Section 38-77-110(C) of the 1976

Code, as added by Act 148 of 1989, is amended to

read:

"(C) <STRK>With regard to any coverage not required

to be written by an insurer under the mandate to

write, no</STRK> No insurer may refuse to write or renew

such policy, coverage, or endorsement of automobile

insurance because of the race, color, creed,

national origin, <STRK>or</STRK> ancestry, or income of anyone

who seeks to become insured."

<#PAGE> SECTION 17. Section 38-77-110 of the 1976

Code, as last amended by Act 148 of 1989, is

further amended by adding:

"(D) An applicant denied coverage must be

provided in writing by the denying insurer the

reason or reasons for which the applicant has been

refused insurance by that insurer, at the time of

the denial."

SECTION 18. Chapter 77 of Title 38 of the 1976

Code is amended by adding:

Section 38-77-1310. (A) The Reinsurance

Facility is abolished effective October 1, 1992.

There is created the South Carolina Joint

Underwriting Association. The administration of

the phase out of the Facility is transferred to the

Joint Underwriting Association.

(B) As of July 1, 1994, the Facility recoupment

charge must not be included in the rate or premium

charged by the insurers of private passenger

automobile insurance to drivers who qualify for the

safe driver discount. If any losses are incurred

as a result of the operation of the Facility, the

losses attributable to the Facility must be

distributed among insured drivers as provided in

subsection (C) until the commissioner determines

all of the losses have been accounted for, unless

provided otherwise.

(C) Consistent with subsection (B), the rate or

premium charged by insurers of private passenger

automobile insurance must include a recoupment

charge, which must be added to the appropriate rate

to compensate for any remaining losses incurred by

the Facility as a result of its operation. The

operating losses of the Facility for a twelve-month

period must be recouped in the subsequent

twelve-month period.

(1) Prior to December first of each year, the

governing board 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,

<#PAGE>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. .368 multiplied by the recoupment

is to be 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) represents R in

the formula P1X +2P2X +3P3X + 4P4X + 5P5X + 6P6X +

7P7X + 8P8X + 9P9X + 10P10X = R. In this formula

to be utilized in determining the Facility

recoupment charge:

(a) P1 is the percentage of risks which

have one surcharge point under the Uniform Merit

Rating Plan;

(b) P2 is the percentage of risks which

have two surcharge points under the Uniform Merit

Rating Plan;

(c) P3 is the percentage of risks which are

subject to a surcharge of three points under the

Uniform Merit Rating Plan;

(d) P4 is the percentage of risks which are

subject to a surcharge of four points under the

Uniform Merit Rating Plan;

(e) P5 is the percentage of risks subject

to a surcharge of five points under the Uniform

Merit Rating Plan;

(f) P6 is the percentage of risks subject

to a surcharge of six points under the Uniform

Merit Rating Plan;

(g) P7 is the percentage of risks subject

to a surcharge of seven points under the Uniform

Merit Rating Plan;

(h) P8 is the percentage of risks subject

to a surcharge of eight points under the Uniform

Merit Rating Plan;

(i) P9 is the percentage of risks subject

to a surcharge of nine points under the Uniform

Merit Rating Plan;

(j) P10 or more is the percentage of risks

subject to a surcharge of ten or more points under

the Uniform Merit Rating Plan;

(k) X is the dollar amount by coverage, to

be charged all risks having one surcharge point

<#PAGE>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 rate for all risks which have one surcharge

point.

(2) The Facility recoupment charge by

coverage to be added to the rate for all risks

which have one surcharge point under the Uniform

Merit Rating Plan is calculated by multiplying X by

a factor of one.

(3) The Facility recoupment charge by

coverage to be added to the rate for all risks

which have two surcharge points under the Uniform

Merit Rating Plan is calculated by multiplying X by

a factor of two.

(4) The Facility recoupment charge by

coverage to be added to the rate for all risks

which are subject to a surcharge of three points

under the Uniform Merit Rating Plan is calculated

by multiplying X by a factor of three.

(5) The Facility recoupment charge by

coverage to be added to the rate for all risks

which are subject to a surcharge of four points

under the Uniform Merit Rating Plan is calculated

by multiplying X by a factor of four.

(6) The Facility recoupment charge by

coverage to be added to the rate for all risks

which are subject to a surcharge of five points

under the Uniform Merit Rating Plan is calculated

by multiplying X by a factor of five.

(7) The Facility recoupment charge by

coverage to be added to the rate for all risks

which are subject to a surcharge of six points

under the Uniform Merit Rating Plan is calculated

by multiplying X by a factor of six.

(8) The Facility recoupment charge by

coverage to be added to the rate for all risks

which are subject to a surcharge of seven points

under the Uniform Merit Rating Plan is calculated

by multiplying X by a factor of seven.

(9) The Facility recoupment charge by

coverage to be added to the rate for all risks

which are subject to a surcharge of eight points

<#PAGE>under the Uniform Merit Rating Plan is calculated

by multiplying X by a factor of eight.

(10) The Facility recoupment charge by

coverage to be added to the rate for all risks

which are subject to a surcharge of nine points

under the Uniform Merit Rating Plan is calculated

by multiplying X by a factor of nine.

(11) The Facility recoupment charge by

coverage to be added to the 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 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 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.

Section 38-77-1330. As used in this article:

(1) `Association' means the South Carolina Joint

Underwriting Association established pursuant to

this article.

(2) `Net direct premiums' means gross direct

premiums written on automobile liability insurance

as computed by the Chief Insurance Commissioner

less return premiums or the unused or unabsorbed

portions of premium deposits.

Section 38-77-1340. (A) A joint underwriting

association is created consisting of all automobile

insurers licensed to write within this State

automobile insurance policies. Every such insurer

is and must remain a member of the association as

a condition of its authority to continue to

transact this kind of insurance in this State.

(B) The purpose of the association is to provide

automobile insurance on a self-supporting basis to

the fullest extent possible.

Section 38-77-1350. The association has the

power on behalf of its members to make agreements

<#PAGE>among themselves with respect to the equitable

apportionment among them of insurance which may be

afforded applicants who are in good faith entitled

to or have lost their safe driver discount, but are

unable to procure such insurance through ordinary

methods, and such insurers may agree among

themselves on the use of reasonable rate

modifications for such insurance. Such agreements

and rate modifications shall be subject to the

approval of the department.

Section 38-77-1360. (A) The department shall,

after consultation with the insurers licensed to

write automobile liability insurance in this State,

adopt a reasonable plan or plans for the equitable

apportionment among such insurers of applicants for

such insurance who are in good faith entitled to or

have lost their safe driver discount, but are

unable to, procure such insurance through ordinary

methods, and, when such plan has been adopted, all

such insurers shall subscribe thereto and shall

participate therein. Such plan or plans shall

include rules for classification of risks and rates

therefor by driver classification and territory.

Any insured placed with the plan shall be notified

of the fact that insurance coverage is being

afforded through the plan and not through the

private market, and such notification shall be

given in writing within ten days of such placement.

To assure that plan rates are made adequate to pay

claims and expenses, insurers shall develop a means

of obtaining loss and expense experience at least

annually, and the plan shall file such experience,

when available, with the department in sufficient

detail to make a determination of rate adequacy.

(B) The plan of operation shall provide for

economic, fair, and nondiscriminatory

administration and for the prompt and efficient

provision of insurance and may contain other

provisions, including, but not limited to,

preliminary assessment of all members for initial

expenses necessary to commence operations,

establishment of necessary facilities, management

of the association, assessment of the members to

defray losses and expenses, commission

<#PAGE>arrangements, reasonable and objective underwriting

standards, appointment of servicing carriers, and

procedures for determining amounts of insurance to

be provided by the association.

(C) Trend factors shall not be found to be

inappropriate if not in excess of trend factors

normally used in the development of residual market

rates by the appropriate licensed rating

organization. Each application for coverage in the

plan shall include, in boldfaced 12-point type

immediately preceding the applicant's signature,

the following statement:

`THIS INSURANCE IS BEING AFFORDED THROUGH THE

SOUTH CAROLINA JOINT UNDERWRITING ASSOCIATION AND

NOT THROUGH THE PRIVATE MARKET. PLEASE BE ADVISED

THAT COVERAGE WITH A PRIVATE INSURER MAY BE

AVAILABLE FROM ANOTHER AGENT AT A LOWER COST.

AGENT AND COMPANY LISTINGS ARE AVAILABLE IN THE

LOCAL YELLOW PAGES.'

(D) The plan of operation shall provide that any

profit achieved by the association must be added to

the reserves of the association or returned to the

policyholders as a dividend but under no

circumstances whatsoever shall any profit be paid

over to or received by an insurer either in

currency or any other benefit of any kind.

(E) Amendments to the plan of operation may be

made by the directors of the association with the

approval of the commissioner or must be made at the

direction of the commissioner after proper notice

and public hearing.

(F) The association may not write private

passenger automobile insurance with higher limits

of coverage than:

(1) two hundred fifty thousand dollars, for

bodily injury liability to one person in one

accident,

(2) subject to the limit for one person, five

hundred thousand dollars because of bodily injury

to two or more persons in one accident,

(3) one hundred thousand dollars because of

injury to or destruction of property of others in

any one accident,

<#PAGE> (4) five hundred thousand dollars, combined

single limits for either or both bodily injury and

property damage,

(5) two hundred fifty thousand dollars of

added personal protection benefits or personal

protection liability limits up to the limits of the

personal protection benefits.

(G) If a driver covered by the association has

not been able to purchase insurance on the

voluntary market after five consecutive years of

maintaining a safe driver discount, the driver must

be placed by the association with an automobile

insurance company doing business in the voluntary

market in this State. The company must be chosen

based on its percentage of automobile insurance

business written in this State on the voluntary

market. The company must charge the driver the

company's preferred or standard rate according to

driver classification and territory. A driver

assigned under this provision may not be refused

insurance until the driver fails to qualify for the

safe driver discount. This provision does not

preclude the driver from seeking automobile

insurance coverage on the voluntary market at any

other time.

Section 38-77-1370. The rates, rating plans,

rating rules, rating classifications, territories,

and policy forms applicable to insurance written by

the association and the statistical and experience

data relating thereto are subject to this article

and to those provisions of Chapter 73 of Title 38

which are not inconsistent with this article.

Section 38-77-1380. The commissioner shall

obtain complete statistical data in respect to

automobile insurance losses and reparation costs as

well as all other costs or expenses which underlie

or are related to automobile insurance. The

commissioner shall promulgate any statistical plan

he considers necessary for the purpose of gathering

data referable to loss and loss adjustment expense

experience and other expense experience. When the

statistical plan is promulgated, the association

shall adopt and use it.

<#PAGE> Section 38-77-1390. In structuring rates and

determining the profit or loss of the association

in respect to such insurance, consideration must be

given by the commissioner to all investment income

so that investment income is a part of the

ratemaking and ratesetting process.

Section 38-77-1395. No later than sixty days

after the passage of this act, the board must file

with the commissioner rates for personal protection

policies as defined by Section 38-78-30 and rates

for private passenger automobile insurance

liability coverages, uninsured motorist coverages,

and underinsured motorist coverages. All of these

rates are subject to surcharges or discounts, if

any, applicable under any approved Merit Rating

Plan, credit, or discount plan promulgated or

approved by the commissioner. The board must file:

(1) a standard rate by driver classification and

territory twenty percent less than the substandard

rate defined in (2). This rate applies to all

private passenger automobile insurance risks which

qualify for the safe driver discount and are

insured directly by or ceded to the association;

and

(2) a `substandard' rate by driver

classification and territory which applies to all

private passenger automobile insurance risks which

do not qualify for the safe driver discount and are

insured directly by or ceded to the association.

These two rates must be construed so that when

the experience generated by them is combined, the

association is able to provide private passenger

automobile insurance on a self-supporting basis.

Upon the approval of these rates, they must be

utilized for all private passenger automobile

insurance risks either ceded to or insured directly

by the association. No insurer or group of

insurers under the same management may cede more

than thirty-five percent of total direct cedeable

written premiums on South Carolina automobile

insurance as reported in the most recently filed

annual statement of the insurer or group. The

association must submit policy forms, rating plans,

and rating rules applicable to insurance to be

<#PAGE>written by the association to the commissioner for

his approval.

Section 38-77-1400. The premium rate charged

for coverage must be at rates established on an

actuarially sound basis, including consideration of

trends in the frequency and severity of losses and

must be calculated to be self-supporting.

Section 38-77-1410. The association may provide

a rate increase or assessment subject to the

commissioner's approval.

Section 38-77-1420. Any deficit sustained by

the association in any year must be recouped,

pursuant to the plan of operation and the rating

plan then in effect by a rate increase applicable

prospectively. The commissioner has the authority

to authorize and must approve any recoupment under

this section.

Section 38-77-1430. After the initial year of

operation, rates, rating plans, and rating rules

and any provision for recoupment through

policyholder assessment or premium rate increase

must be based upon the association's loss and

expense experience and investment income, together

with any other information based upon this

experience and income as the commissioner considers

appropriate. The resultant premium rates must be

on an actuarially sound basis and must be

calculated to be self-supporting.

If sufficient funds are not available for the

sound financial operation of the association,

pending recoupment as provided in Section

38-77-1420, all members, on a temporary basis,

shall contribute to the financial requirements of

the association in the manner provided for in

Section 38-77-1440. Any such contribution must be

reimbursed to the members following recoupment as

provided in Section 38-77-1420.

Section 38-77-1440. All insurers which are

members of the association shall participate in its

writings, expenses, and losses in the proportion

that the net direct premiums of each member,

excluding that portion of premiums attributable to

the operation of the association, written during

the preceding calendar year bear to the aggregate

<#PAGE>net direct premiums written in this State by all

members of the association. Each insurer's

participation in the association must be determined

annually on the basis of the net direct premiums

written during the preceding calendar year, as

reported in the annual statements and other reports

filed by the insurer with the commissioner. The

assessment of a member insurer may after hearing be

ordered deferred in whole or in part upon

application by the insurer if, in the opinion of

the commissioner, payment of the assessment would

render the insurer insolvent or in danger of

insolvency or would otherwise leave the insurer in

such condition that further transaction of the

insurer's business would be hazardous to its

policyholders, creditors, members, subscribers,

stockholders, or the public. In the event that

payment of an assessment against a member insurer

is deferred by order of the commissioner in whole

or in part, the amount by which the assessment is

deferred must be assessed against other member

insurers in the same manner as provided in this

section. In its order of deferral, or in such

subsequent orders as may be necessary, the

commissioner shall prescribe a plan by which the

assessment so deferred must be repaid to the

association by the impaired insurer with interest

at the six-month treasury bill rate adjusted

semiannually. Any profits, dividends, or other

funds of the association to which the insurer is

otherwise entitled may not be distributed to the

impaired insurer but must be applied toward

repayment of any assessment until the obligation

has been satisfied. The association shall

distribute the repayments, including any interest

thereon, to the other member insurers on the basis

at which assessments were made.

Section 38-77-1450. Every member of the

association is bound by the approved plan of

operation of the association and the rules of the

board of directors of the association.

Section 38-77-1460. (A) If the authority of an

insurer to transact automobile insurance in this

State terminates for any reason, its obligations as

<#PAGE>a member of the association continue until all its

obligations are fulfilled and the commissioner has

so found and certified to the board of directors.

(B) If a member insurer merges into or

consolidates with another insurer authorized to

transact insurance in this State or another insurer

authorized to transact insurance in this State has

reinsured the insurer's entire automobile insurance

business in this State, both the insurer and its

successor or assuming reinsurer, as the case may

be, are liable for the insurer's obligations to the

association.

(C) Any unsatisfied net liability of any

insolvent member of the association must be assumed

by and apportioned among the remaining members in

the same manner in which assessments or gain and

loss are apportioned and the association shall

acquire and have all rights and remedies allowed by

law in behalf of the remaining members against the

estate or funds of the insolvent insurer for funds

due the association.

Section 38-77-1470. The joint underwriting

association is governed by a board of seven

directors, one of whom is appointed by the Governor

to represent the general public and four of whom

are appointed by the Governor and represent

automobile insurers who are members of the

association. Two directors, appointed by the

Governor, are agents authorized to represent

automobile insurers licensed to do business in this

State.

The approved plan of operation of the

association may make provision for combining

insurers under common ownership or management into

groups for voting, assessment, and all other

purposes and may provide that not more than one of

the officers or employees of such a group may serve

as a director at any one time. The board of

directors shall elect a chairman by majority vote

and he, or his designee, must preside at all

meetings of the board.

Section 38-77-1480. Any applicant for insurance

through the association or any insurer adversely

affected, or claiming to be adversely affected, by

<#PAGE>any ruling, action, or decision by or on behalf of

the association, may appeal to the commissioner

within thirty days after the ruling, action, or

decision.

Section 38-77-1490. The association shall file

in the office of the commissioner annually by March

first a statement containing information with

respect to its transactions, condition, operations,

and affairs during the preceding year. The

statement shall contain information prescribed by

the commissioner and must be in the form he

directs.

The commissioner, at any reasonable time, may

require the association to furnish additional

information concerning its transactions, condition,

or any matter connected therewith considered to be

material and of assistance in evaluating the scope,

operations, and experience of the association.

Section 38-77-1500. The commissioner shall make

an examination into the financial condition and

affairs of the association at least annually and

shall file a report thereon with the Commission,

the Governor, and the General Assembly. The

expenses of the examination must be paid by the

association."

SECTION 19. Section 38-73-455 of the 1976 Code,

as last amended by Act 113 of 1991, is further

amended to read:

"Section 38-73-455. (A) An automobile insurer

shall offer <STRK>two</STRK> four different rates for

automobile insurance<STRK>, a base rate as defined in

Section 38-73-457 and an objective standards rate

which is twenty-five percent above the base rate</STRK>.

<STRK>Both</STRK> All of these rates are subject to all

surcharges or discounts, if any, applicable under

any approved merit rating plan, credit, or discount

plan promulgated or approved by the commissioner.

(B) No later than ninety days after the passage

of this act, insurers of automobile insurance must

file with the commissioner rates for personal

protection policies as defined by Section 38-78-30

and revised rates for all other private passenger

automobile insurance policies written by them.

Each insurer must file:

<#PAGE> (1) a `preferred' rate by driver

classification and territory, which is a rate

less than the standard rate defined herein. This

rate applies to private passenger automobile

insurance risks which qualify for the safe driver

discount; and

(2) a `standard' rate which must be the

approved base rate as defined in Section 38-73-457,

by driver classification and territory in effect on

July 1, 1992. This rate applies to private

passenger automobile insurance risks which qualify

for the safe driver discount; and

(3) a `nonpreferred' rate by driver

classification and territory, which is a rate more

than the standard rate but less than the rate by

driver classification and territory for the

substandard rate and is applicable to all private

passenger automobile insurance risks; and

(4) a `substandard' rate by driver

classification and territory, which is a rate more

than the nonpreferred rate but less than or equal

to the substandard rate by driver classification

and territory for the South Carolina Joint

Underwriting Association, as provided for in

Article 13 of Chapter 77 of Title 38, and is

applicable to all private passenger automobile

risks.

(C) The commissioner must approve the rates

filed pursuant to subsection (A). If the rates are

approved, the rates shall become effective for all

policies of automobile insurance issued or renewed

with effective dates on or after January 1, 1993.

(D) Insurers may place any automobile insurance

risk at any of the four rate levels without

restriction unless provided otherwise in this

chapter. An insurer or agent shall provide written

notice to the insurer of the tier at which coverage

is being written for the insured and the reasons

the insured was written in that particular tier.

However, the Uniform Merit Rating Plan must

continue to apply to all risks written by them.

(E) An applicant and all operators of the

insured automobile who have qualified for the safe

driver discount for the last five years and who

<#PAGE>reside in the same household, and the automobile or

the automobile it replaced has been insured for

liability or personal protection coverage for the

past twelve months must be written at the preferred

or standard rate and may not be ceded to the Joint

Underwriting Association. A driver who is claimed

as a dependent for income tax purposes is not

required to meet the five year requirement as long

as the dependent qualifies for the safe driver

discount.

(F) An applicant and all operators of the

insured automobile who have qualified for the safe

driver discount for the last ten years and who

reside in the same household and the automobile or

the automobile it replaced has been insured for

liability or personal protection coverage for the

past twelve months must be written at the preferred

rate and may not be ceded to the Joint Underwriting

Association. A driver who is claimed as a

dependent for income tax purposes is not required

to meet the ten year requirement as long as the

dependent qualifies for the safe driver discount.

(G) All policies of automobile insurance issued

or renewed with effective dates on or after October

1, 1992, that are written by automobile insurers

designated pursuant to Section 38-77-590(A), for

risks written by them through producers designated

pursuant to that same section, and all policies

ceded to the Joint Underwriting Association by

automobile insurers must be written at the rates

provided for in Section 38-77-1395. However, the

Uniform Merit Rating Plan must apply to all such

risks.

(H) The Board of Directors of the association

must file rates by driver classification and

territory for both the personal protection policies

as defined by Section 38-78-30, liability

coverages, and uninsured motorist coverage.

<STRK>Applicants, or a current policyholder, seeking

automobile insurance with an insurer must be

written at the base rate, unless one of the

conditions or factors in subitems (1) through (8)

of item (A) is present.</STRK>

<#PAGE> <STRK>(A) The named insured or any operator who is

not excluded in accordance with Section 37-77-340

and who resides in the same household or

customarily operates an automobile insured under

the same policy, individually:

(1) has obtained a policy of automobile

insurance or continuation thereof through material

misrepresentation within the preceding thirty-six

months; or

(2) has had convictions for driving

violations on three or more separate occasions

within the thirty-six months immediately preceding

the effective date of coverage as reflected by the

motor vehicle record of each insured driver as

maintained by the Department of Highways and Public

Transportation; or

(3) has had two or more `chargeable'

accidents within the thirty-six months immediately

preceding the effective date of coverage. A

`chargeable' accident is defined as one resulting

in bodily injury to any person in excess of three

hundred dollars per person, death, or damage to the

property of the insured or other person in excess

of seven hundred fifty dollars. Accidents

occurring under the circumstances enumerated below

are not considered chargeable.

(a) The automobile was lawfully parked. An

automobile rolling from a parked position is not

considered as lawfully parked but is considered as

operated by the last operator.

(b) The applicant or other operator or

owner was reimbursed by or on behalf of a person

responsible for the accident or has a judgment

against this person.

(c) The automobile of an applicant or other

operator was struck in the rear by another vehicle

and the applicant or other operator has not been

convicted of a moving traffic violation in

connection with the accident.

(d) The operator of the other automobile

involved in the accident was convicted of a moving

traffic violation and the applicant or other

operator was not convicted of a moving traffic

violation in connection therewith.

<#PAGE> (e) An automobile operated by the applicant

or other operator is damaged as a result of contact

with a `hit and run' driver, if the applicant or

other operator so reports the accident to the

proper authority within twenty-four hours or, if

the person is injured, as soon as the person is

physically able to do so.

(f) Accidents involving damage by contact

with animals or fowl.

(g) Accidents involving physical damage,

limited to an caused by flying gravel, missiles, or

falling objects.

(h) Accidents occurring as a result of the

operation of any automobile in response to an

emergency if the operator at the time of the

accident was responding to a call of duty as a paid

or volunteer member of any police or fire

department, first aid squad, or any law enforcement

agency. This exception does not include an

accident occurring after the emergency situation

ceases or after the private passenger motor vehicle

ceases to be used in response to the emergency; or

(4) has had one `chargeable' accident and two

convictions for driving violations, all occurring

on separate occasions, within the thirty-six months

immediately preceding the effective date of

coverage as reflected by the motor vehicle record

of each insured driver as maintained by the

Department of Highways and Public Transportation;

or

(5) has been convicted of or forfeited bail

during the thirty-six months immediately preceding

the effective date of coverage for operating a

motor vehicle while in an intoxicated condition or

while under the influence of drugs; or

(6) has been convicted or forfeited bail

during the thirty-six months immediately preceding

the effective date for:

(a) any felony involving the use of a motor

vehicle,

(b) criminal negligence resulting in death,

homicide, or assault arising out of the operation

of a motor vehicle,

<#PAGE> (c) leaving the scene of an accident

without stopping to report,

(d) theft or unlawful taking of a motor

vehicle,

(e) operating during a period of revocation

or suspension of registration or license,

(f) Knowingly permitting an unlicensed

person to drive,

(g) reckless driving,

(h) the making of material false statements

in the application for licenses or registration,

(i) impersonating an applicant for license

or registration or procuring a license or

registration through impersonation, whether for

himself or another,

(j) filing of a false or fraudulent claim

or knowingly aiding or abetting another in the

presentation of such a claim,

(k) failure to stop a motor vehicle when

signaled by means or a siren or flashing light by

a law enforcement vehicle; or

(7) has for thirty or more consecutive days

during the twelve months immediately preceding the

effective date of coverage, owned or operated the

automobile to be insured (or if newly acquired, the

automobile it replaces) without liability coverage

in violation of the laws of this State; or

(8) has used the insured automobile as

follows or if the insured automobile is:

(a) used in carrying passengers for hire or

compensation, except that the use of an automobile

for a car pool must not be considered use of an

automobile for hire or compensation,

(b) used in the business of transportation

of flammables or explosives,

(c) used in illegal operation, or

(d) no longer principally used and garaged

within the State, but not to include students who

are operating a motor vehicle registered in this

State while attending an institution located in

another state.

(B) In the event that one or more of the

conditions or factors prescribed in items (1)

through (8) of subsection (A) exist, the motor

<#PAGE>vehicle customarily operated by that individual

must be written at the objective standards rate.

(C)</STRK> (I) Member companies of an affiliated group

of automobile insurers may <STRK>not</STRK> utilize different

filed rates for automobile insurance coverages

<STRK>which they are mandated by law to write</STRK>. For the

purpose of this section, an affiliated group of

automobile insurers includes a group of automobile

insurers under common ownership, management, or

control. <STRK>Those automobile insurers designated

pursuant to Section 38-77-590(a), for automobile

insurance risks written by them through producers

designated by the Facility governing board pursuant

to that section, shall utilize the rates or premium

charges by coverage filed and authorized for use by

the rating organization licensed by the

Commissioner pursuant to Article 11, Chapter 73 of

this title, which has the largest number of members

or subscribers for automobile insurance rates.

However, those automobile insurers designated

pursuant to Section 38-77-590(a) are not required

to use those same rates or premium charges

described in the preceding sentence for risks

written by them through their authorized agents not

appointed pursuant to Section 38-77-590.</STRK>

<STRK>(D)</STRK> (J) <STRK>An automobile insurance policy may be

endorsed at any time during the policy period to

reflect the correct rate or premium applicable by

reason of the factors or conditions described in

subsection (A) which existed prior to the

commencement of the policy period in which the

endorsement is made, regardless of whether the

factors or conditions were known or disclosed to

the insurer at the commencement of the policy

period. However, no</STRK> No policy may be endorsed

during a policy period to reflect factors or

conditions occurring during that policy period. A

policy may be endorsed during a policy period to

recognize the addition or deletion of an operator

or vehicle.

<STRK>(E) For purposes of determining the applicable

rates to be charged an insured, an automobile

insurer shall obtain and review an applicant's

motor vehicle record.</STRK>"

<#PAGE> SECTION 20. Section 38-73-760 of the 1976 Code,

as last amended by Act 148 of 1989, is further

amended by adding:

"(g) No surcharge may be assessed for the

first conviction of speeding less than twenty miles

per hour if the person convicted has maintained the

safe driver discount for the previous three years.

(h) No surcharge may be assessed for convictions

of the following violations occurring on or after

January 1, 1993: failing to dim lights; operating

with improper lights; operating with improper

brakes; or operating a vehicle in unsafe

condition."

SECTION 21. Section 56-10-270 of the 1976 Code

is amended to read:

"Section 56-10-270. (a) Any person knowingly

operating an uninsured motor vehicle subject to

registration in this State or any person knowingly

allowing the operation of an uninsured motor

vehicle subject to registration in this State is

guilty of a misdemeanor and, upon conviction, must

be punished as follows:

(1) for a first offense, fined not less than

<STRK>one</STRK> two hundred dollars nor more than <STRK>two</STRK> three

hundred dollars or imprisoned for thirty days or

may be ordered to perform up to fifty public

service hours, or a combination of these, and,

(2) upon conviction of a second offense, be

fined <STRK>two</STRK> three hundred dollars or imprisoned for

thirty days or perform up to one hundred public

service hours, or a combination of these, <STRK>or both,</STRK>

and

(3) for a third and subsequent offenses must

be imprisoned for not less than forty-five days nor

more than six months and be fined up to four

hundred dollars or serve up to two hundred public

service hours, or a combination of these. Only

convictions which occurred within five years

including and immediately preceding the date of the

last conviction constitute prior convictions within

the meaning of this section. An uninsured motor

vehicle includes an insured vehicle with respect to

which the operator has been excluded from coverage

pursuant to the provisions of Section 38-77-340.

<#PAGE> (b) The department upon receipt of information

to the effect that any person has been convicted of

violating subsection (a) of this section shall

suspend the driving privilege and all license

plates and registration certificates issued in the

person's name for a period of thirty days for a

first offense, for a period of ninety days for a

second offense, and for a period of six months for

a third and each subsequent offense. <STRK>and may not

reinstate that</STRK> The person's privileges may not be

reinstated until proof of financial responsibility

has been filed.

(c) Any person whose license plates and

registration certificates which are suspended as

provided in this section, which are not suspended

for any other reason, may have them immediately

restored, if he files proof of financial

responsibility with the department."

SECTION 22. The 1976 Code is amended by

adding:

"Section 38-77-116. Upon issuance of a new

private passenger automobile insurance policy, the

insurance company or agent must review with the new

applicant a list of driving offenses and the

related fine and punishment, as well as the

possible increase in the rates, the effect of any

surcharges, or the effect of the loss of the safe

driver discount. This list must be on a form

approved by the Chief Insurance Commissioner and

must accompany the policy."

SECTION 23. After September 30, 1992, the

governing board of the Joint Underwriting

Association, enacted pursuant to Article 13 of

Chapter 77 of Title 38 of the 1976 Code as

contained in this act, shall contract with one or

more insurers or business entities to serve as the

designated carrier and shall establish a procedure

for the selection of the designated carrier. In

developing this procedure, the board must establish

criteria which will assure the designated carrier's

ability to adequately provide policy-writing and

claims service. However, the board may not require

that the designated carrier be a licensed insurance

company. Designated carrier contracts must be for

<#PAGE>a period of three years and must be awarded upon

the terms and conditions for competitive sealed

bidding as provided in Section 11-35-1520 of the

1976 Code.

If the designated carrier fails two claims

audits, including a re-audit, within the contract

term, the designated carrier is disqualified for

renewal of its contract with the Facility upon

expiration of its existing contract. Designated

carrier contracts awarded pursuant to this section

must provide that the failure of two claims audits,

including a re-audit, during the contract term

constitutes a material breach of the contract.

After July 1, 1992, the governing board of the

association may not designate any new producers.

Commissions paid to agents for policies ceded to

or placed in the Joint Underwriting Association

shall be set by the association's board of

directors.

SECTION 24. The 1976 Code is amended by

adding:

"Section 38-77-175. (A) When the operator or

owner of a motor vehicle is issued a traffic ticket

for a moving violation by a law enforcement

officer, he must be furnished a written request

form to complete to verify liability insurance

coverage. The form must be in a manner prescribed

by regulation of the Department of Highways and

Public Transportation.

(B) The completed and verified form must be

returned by the operator or owner to the department

within fifteen days from the date he receives it.

Failure to return the form verified in the proper

manner is prima facie evidence that the vehicle was

uninsured.

(C) Any fine collected for a violation of

Section 56-10-270, relating to driving uninsured,

as a result of this section must be deposited in

the treasury of the municipality or the county

employing the law enforcement officer who issued

the original ticket, if such law enforcement

officer is a municipal or county employee, or in

the general fund of the State, if the law

<#PAGE>enforcement officer who issued the original ticket

is an employee of a state agency or department."

SECTION 25. The 1976 Code is amended by

adding:

"Section 56-7-12. (A) When the operator or

owner of a motor vehicle is issued a traffic ticket

for a moving violation by a law enforcement

officer, he must be furnished a written request

form to complete to verify liability insurance

coverage. The form must be in a manner prescribed

by regulation of the Department of Highways and

Public Transportation.

(B) The completed and verified form must be

returned by the operator or owner to the department

within fifteen days from the date he receives it.

Failure to return the form verified in the proper

manner is prima facie evidence that the vehicle was

uninsured.

(C) Any fine collected for a violation of

Section 56-10-270, relating to driving uninsured,

as a result of this section must be deposited in

the treasury of the municipality or the county

employing the law enforcement officer who issued

the original ticket, if such law enforcement

officer is a municipal or county employee, or in

the general fund of the State, if the law

enforcement officer who issued the original ticket

is an employee of a state agency or department."

SECTION 26. Article 5 of Chapter 77 of Title

38 of the 1976 Code and Sections 38-73-1420,

38-73-1425, 38-77-285, 38-77-920, 38-77-940,

38-77-950, and 38-77-960 are repealed on October 1,

1992.

SECTION 27. Section 38-77-930 is repealed.

SECTION 28. Section 38-77-111 of the 1976

Code, as added by Act 148 of 1989, is amended to

read:

"Section 38-77-111. An automobile insurer may

cede the coverages of an automobile insurance

policy that it is mandated to write to the

<STRK>Reinsurance Facility</STRK> Joint Underwriting Association

but it may not cede coverages under a policy that

it is not mandated by law to write except for tort

liability and personal protection coverages and

<#PAGE>uninsured motorist coverage for those risks that do

not qualify for the safe driver discount. However,

if an insurer cedes a coverage it is mandated to

write by law, it shall cede all coverages under

that policy that it is mandated to write."

SECTION 29. If any provision of the act or the

application thereof to any person or circumstance

is held to be unconstitutional or otherwise

invalid, the remainder of this act and the

application of such provision to other persons or

circumstances are not affected thereby, and it is

to be conclusively presumed that the legislature

would have enacted the remainder of this act

without such invalid or unconstitutional provision,

except that if Section 38-78-110 or Section

38-78-120 is found to be unconstitutional or

invalid it is to be conclusively presumed that the

legislature would not have enacted the remainder of

this act without such limitations, and the entire

act is invalid. If Section 38-78-110 is found to

be unconstitutional or invalid, personal protection

insurers have no obligation to pay personal

protection benefits with respect to accidents

occurring on or after the date of the finding of

such unconstitutionality or invalidity and, in

addition, are subrogated to all of the rights of

personal protection insureds for all previous such

benefits paid.

SECTION 30. Except as otherwise specifically

provided herein, this act takes effect upon

approval by the Governor./

Amend title to conform.

THOMAS C. ALEXANDER, for Committee.

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,

BY ADDING CHAPTER 78 TO TITLE 38 SO AS TO ENACT THE

"CONSUMER FREEDOM OF CHOICE IN MOTOR VEHICLE

INSURANCE ACT"; TO AMEND SECTION 38-77-30, AS

AMENDED, RELATING TO DEFINITIONS UNDER THE

AUTOMOBILE INSURANCE CHAPTER OF TITLE 38, SO AS TO

PROVIDE THAT "AUTOMOBILE INSURANCE POLICY" ALSO

INCLUDES THE PERSONAL PROTECTION POLICY AS DEFINED

IN SECTION 38-78-30; TO AMEND SECTION 38-77-110, AS

AMENDED, RELATING TO AUTOMOBILE INSURANCE, THE

REQUIREMENT UPON INSURERS TO INSURE, AND

EXCEPTIONS, SO AS TO PROVIDE THAT NO INSURER IS

REQUIRED TO WRITE PRIVATE PASSENGER AUTOMOBILE

INSURANCE WITH HIGHER LIMITS OF COVERAGE THAN TWO

HUNDRED FIFTY THOUSAND DOLLARS FOR ADDED PERSONAL

PROTECTION COVERAGE AS DEFINED IN SECTION 38-78-30;

TO AMEND THE 1976 CODE BY ADDING SECTION 38-77-355

SO AS TO PROVIDE THAT, IN A CLAIM OR ACTION FOR

PERSONAL INJURY OR WRONGFUL DEATH ARISING OUT OF

THE OWNERSHIP, OPERATION, USE, OR MAINTENANCE OF A

MOTOR VEHICLE, THE COURT SHALL ADMIT INTO EVIDENCE

THE TOTAL AMOUNT PAID TO THE CLAIMANT FROM

COLLATERAL SOURCES AND REQUIRE AN INSTRUCTION TO

THE JURY TO DEDUCT FROM ITS VERDICT THE VALUE OF

ALL BENEFITS RECEIVED BY THE CLAIMANT FROM

COLLATERAL SOURCES; TO AMEND SECTION 38-77-280, AS

AMENDED, RELATING TO COLLISION COVERAGE AND

COMPREHENSIVE COVERAGE UNDER THE PROVISIONS OF LAW

ON AUTOMOBILE INSURANCE, SO AS TO DELETE THE

EXISTING PROVISIONS OF THE SECTION AND PROVIDE THAT

AFTER SEPTEMBER 30, 1992, AUTOMOBILE INSURERS MAY

REFUSE TO WRITE OR RENEW PRIVATE PASSENGER

AUTOMOBILE PHYSICAL DAMAGE INSURANCE COVERAGE FOR

AN APPLICANT OR EXISTING POLICYHOLDER, AND PROVIDE

<#PAGE>THAT AFTER SEPTEMBER 30, 1992, NO PRIVATE PASSENGER

AUTOMOBILE PHYSICAL DAMAGE INSURANCE COVERAGE MAY

BE CEDED TO THE REINSURANCE FACILITY; TO AMEND

SECTION 38-77-30, AS AMENDED, RELATING TO

AUTOMOBILE INSURANCE AND DEFINITIONS, SO AS TO

EXCLUDE PUNITIVE DAMAGES FROM THE DEFINITION OF

"DAMAGES"; TO AMEND SECTION 38-77-140, RELATING TO

AUTOMOBILE INSURANCE AND BODILY INJURY AND PROPERTY

DAMAGE LIMITS, SO AS TO REFER TO "ACTUAL DAMAGES",

AND PROVIDE THAT AN INSURER SHALL OFFER THE INSURED

A RIDER OR ENDORSEMENT FOR AN ADDITIONAL PREMIUM TO

COVER LIABILITY FOR PUNITIVE DAMAGES, WHICH

COVERAGE IS OPTIONAL WITH THE INSURED; TO AMEND

SECTION 38-77-150, RELATING TO THE UNINSURED

MOTORIST PROVISION AND THE DEFENSE OF AN ACTION BY

THE INSURER, SO AS TO REFER TO ACTUAL DAMAGES,

INCREASE THE EXCLUSION AMOUNT REGARDING LOSS OR

DAMAGE, REQUIRE INSURERS TO OFFER HIGHER LIMITS OF

UNINSURED MOTORIST COVERAGE, REQUIRE INSURERS TO

OFFER ON A FORM PRESCRIBED BY THE CHIEF INSURANCE

COMMISSIONER "NONSTACKABLE" POLICIES OF UNINSURED

MOTORIST COVERAGE, PROVIDE THAT PREMIUM RATES MADE

BY INSURERS FOR UNINSURED MOTORIST COVERAGE MUST BE

DETERMINED AND REGULATED AS PREMIUM RATES FOR

AUTOMOBILE INSURANCE GENERALLY ARE DETERMINED AND

REGULATED, AND PROVIDE THAT BENEFITS PAID PURSUANT

TO THIS SECTION ARE SUBJECT TO SUBROGATION AND

ASSIGNMENT; TO AMEND SECTION 38-77-160, AS AMENDED,

RELATING TO UNDERINSURED MOTORIST COVERAGE AND

ADDITIONAL UNINSURED MOTORIST COVERAGE, SO AS TO

DELETE CERTAIN PROVISIONS, REQUIRE THE OFFERING OF

UNDERINSURED MOTORIST COVERAGE UP TO THE LIMITS

SELECTED FOR THE INSURED'S LIABILITY COVERAGE TO

PROVIDE COVERAGE IN THE EVENT THE INSURED BECOMES

LEGALLY ENTITLED TO COLLECT DAMAGES FROM THE OWNER

OR OPERATOR OF AN UNDERINSURED MOTOR VEHICLE,

PROVIDE THAT UNDERINSURED MOTORIST BENEFITS PAID

PURSUANT TO THIS SECTION ARE SUBJECT TO SUBROGATION

AND ASSIGNMENT, AND ENACT CERTAIN PROVISIONS FOR

INSURERS OFFERING UNINSURED MOTORIST COVERAGE; TO

AMEND SECTION 56-9-350, RELATING TO THE REQUIREMENT

THAT THE VERIFICATION OF AUTOMOBILE INSURANCE

COVERAGE FORM BE ISSUED FOLLOWING CERTAIN

ACCIDENTS, SO AS TO DELETE CERTAIN PROVISIONS, AND

<#PAGE>PROVIDE THAT THE OPERATOR OR OWNER OF A MOTOR

VEHICLE INVOLVED IN AN ACCIDENT RESULTING IN

PROPERTY DAMAGE OF FOUR HUNDRED DOLLARS OR MORE OR

IN BODILY INJURY OR DEATH WITHIN FIFTEEN DAYS AFTER

THE ACCIDENT SHALL FORWARD A WRITTEN REPORT OF THE

ACCIDENT TO THE DEPARTMENT OF HIGHWAYS AND PUBLIC

TRANSPORTATION ON A FORM PRESCRIBED BY THE

DEPARTMENT; TO AMEND SECTION 56-10-10, RELATING TO

VEHICLE FINANCIAL SECURITY AND THE SECURITY

REQUIRED ON REGISTERED VEHICLES, SO AS TO DELETE

CERTAIN PROVISIONS, AND PROVIDE THAT SECURITY MUST

BE MAINTAINED ON EVERY MOTOR VEHICLE REQUIRED TO BE

REGISTERED IN SOUTH CAROLINA WHERE THE OWNER OR

OTHER OPERATOR NOT EXCLUDED IN ACCORDANCE WITH

SECTION 38-77-340 AND WHO RESIDES IN THE SAME

HOUSEHOLD MEETS ONE OF THE CONDITIONS OR FACTORS

SPECIFIED IN SECTION 38-73-455 FOR APPLICATION OF

THE OBJECTIVE STANDARDS RATE; TO AMEND SECTION

56-10-220, RELATING TO THE REQUIREMENT THAT A

VEHICLE SOUGHT TO BE REGISTERED IN THIS STATE MUST

BE INSURED, SO AS TO DESCRIBE PERSONS APPLYING FOR

REGISTRATION AS PERSONS REQUIRED TO PROVIDE

SECURITY ON A MOTOR VEHICLE AS PROVIDED IN SECTION

56-10-10; TO AMEND SECTION 56-10-240; RELATING TO

THE REQUIREMENT THAT, UPON LOSS OF AUTOMOBILE

INSURANCE, THE INSURED SHALL OBTAIN NEW INSURANCE

OR SURRENDER THE VEHICLE'S REGISTRATION AND PLATES,

SO AS TO DESCRIBE THE MOTOR VEHICLES REFERENCED IN

THE SECTION AS VEHICLES FOR WHICH SECURITY IS

REQUIRED AS PROVIDED IN SECTION 56-10-10; TO AMEND

THE 1976 CODE BY ADDING ARTICLE 5 TO CHAPTER 10 OF

TITLE 56 SO AS TO PROVIDE FOR THE REGISTRATION AND

LICENSING OF UNINSURED MOTOR VEHICLES; TO AMEND

SECTION 38-77-110, AS AMENDED, RELATING TO THE

REQUIREMENT UPON AUTOMOBILE INSURERS TO INSURE AND

EXCEPTIONS, SO AS TO PROVIDE THAT AUTOMOBILE

INSURERS MAY NOT REFUSE TO WRITE OR RENEW

AUTOMOBILE INSURANCE POLICIES FOR INDIVIDUAL

PRIVATE PASSENGER AUTOMOBILES IF THE RISK QUALIFIES

FOR THE SAFE DRIVER DISCOUNT IN SECTION 38-73-760

OR SMALL COMMERCIAL RISKS, PROVIDE THAT NO INSURER

IS REQUIRED TO WRITE OR RENEW PRIVATE PASSENGER

AUTOMOBILE INSURANCE IF THE RISK DOES NOT QUALIFY

FOR THE SAFE DRIVER DISCOUNT IN SECTION 38-73-760,

<#PAGE>DELETE CERTAIN LANGUAGE, PROVIDE THAT NO INSURER

MAY REFUSE TO WRITE OR RENEW SUCH POLICY, COVERAGE,

OR ENDORSEMENT OF AUTOMOBILE INSURANCE BECAUSE OF

THE RACE, COLOR, CREED, OR ECONOMIC STATUS OF

ANYONE WHO SEEKS TO BECOME INSURED, PROVIDE THAT AN

APPLICANT WHO IS DENIED COVERAGE MAY REQUEST THE

DENYING INSURER TO PROVIDE IN WRITING THE REASON OR

REASONS FOR WHICH THE APPLICANT HAS BEEN REFUSED

INSURANCE, AND REQUIRE THE INSURER TO RESPOND IN

WRITING WITHIN TEN DAYS OF THE REQUEST; TO AMEND

THE 1976 CODE BY ADDING ARTICLE 13 TO CHAPTER 77 OF

TITLE 38 SO AS TO PROVIDE FOR THE ABOLITION OF THE

SOUTH CAROLINA REINSURANCE FACILITY AND FOR THE

ESTABLISHMENT OF THE SOUTH CAROLINA JOINT

UNDERWRITING ASSOCIATION; TO AMEND SECTION

38-73-455, AS AMENDED, RELATING TO AUTOMOBILE

INSURANCE RATES, SO AS TO DELETE PROVISIONS OF THE

SECTION, AND PROVIDE, AMONG OTHER THINGS, THAT AN

AUTOMOBILE INSURER SHALL OFFER FOUR, RATHER THAN

TWO, DIFFERENT RATES FOR AUTOMOBILE INSURANCE, THAT

INSURERS MUST FILE WITH THE CHIEF INSURANCE

COMMISSIONER RATES FOR PERSONAL PROTECTION POLICIES

AND REVISED RATES FOR ALL OTHER PRIVATE PASSENGER

AUTOMOBILE INSURANCE POLICIES WRITTEN BY THEM, AND

THAT INSURERS MAY PLACE ANY AUTOMOBILE INSURANCE

RISK AT ANY OF THE FOUR RATE LEVELS WITHOUT

RESTRICTION UNLESS PROVIDED OTHERWISE BY LAW; TO

AMEND SECTION 38-73-760, AS AMENDED, RELATING TO

UNIFORM STATISTICAL PLANS, BY ADDING LANGUAGE WHICH

PROVIDES THAT NO SURCHARGE MAY BE ASSESSED FOR THE

FIRST CONVICTION OF SPEEDING LESS THAN TWENTY MILES

PER HOUR IF THE PERSON CONVICTED HAS NO CHARGEABLE

ACCIDENTS OR DRIVING CONVICTIONS FOR THE PREVIOUS

THREE YEARS; TO AMEND SECTION 38-57-130, RELATING

TO INSURANCE, TRADE PRACTICES, AND THE PROHIBITION

ON MISREPRESENTATIONS, SPECIAL INDUCEMENTS, AND

REBATES IN ALL INSURANCE CONTRACTS, SO AS TO MAKE

AN EXCEPTION FOR A PRIVATE PASSENGER AUTOMOBILE

INSURANCE CONTRACT; TO AMEND SECTION 56-10-270,

RELATING TO THE OPERATION OF AN UNINSURED MOTOR

VEHICLE AND PENALTIES, SO AS TO INCREASE CERTAIN OF

THE PENALTIES, AUTHORIZE PERFORMANCE OF PUBLIC

SERVICE AS A PENALTY, PROVIDE FOR SUSPENSION OF THE

DRIVING PRIVILEGE AND ALL LICENSE PLATES AND

<#PAGE>REGISTRATION CERTIFICATES ISSUED IN A PERSON'S NAME

FOR SECOND, THIRD, AND SUBSEQUENT OFFENSE

VIOLATIONS OF THE PROVISIONS OF THIS SECTION,

DELETE CERTAIN LANGUAGE, AND PROVIDE THAT THE

CONVICTED PERSON'S PRIVILEGES MAY NOT BE REINSTATED

UNTIL PROOF OF FINANCIAL RESPONSIBILITY HAS BEEN

FILED; TO AMEND THE 1976 CODE BY ADDING SECTION

38-77-116 SO AS TO PROVIDE THAT, UPON ISSUANCE OF

A NEW PRIVATE PASSENGER AUTOMOBILE INSURANCE

POLICY, THE INSURANCE COMPANY OR AGENT MUST REVIEW

WITH THE NEW APPLICANT A LIST OF DRIVING OFFENSES

AND THE RELATED FINE AND PUNISHMENT, AS WELL AS

CERTAIN OTHER THINGS; TO PROVIDE THAT AFTER

SEPTEMBER 30, 1992, THE GOVERNING BOARD OF THE

JOINT UNDERWRITING ASSOCIATION SHALL CONTRACT WITH

ONE OR MORE INSURERS OR BUSINESS ENTITIES TO SERVE

AS THE DESIGNATED CARRIER AND SHALL ESTABLISH A

PROCEDURE FOR THE SELECTION OF THE DESIGNATED

CARRIER, PROVIDE THAT IF THE DESIGNATED CARRIER

FAILS TWO CLAIMS AUDITS, INCLUDING A RE-AUDIT,

WITHIN THE CONTRACT TERM, THE DESIGNATED CARRIER IS

DISQUALIFIED FOR RENEWAL OF ITS CONTRACT UPON

EXPIRATION OF ITS EXISTING CONTRACT, AND PROVIDE

THAT NO DESIGNATED PRODUCERS MAY RECEIVE A

COMMISSION HIGHER THAN FIVE PERCENT ON A POLICY

CEDED TO THE JOINT UNDERWRITING ASSOCIATION AND

THAT AGENTS OR PRODUCERS OTHER THAN DESIGNATED

PRODUCERS MAY NOT RECEIVE A COMMISSION HIGHER THAN

FIVE PERCENT ON A POLICY WRITTEN DIRECTLY BY THE

ASSOCIATION; TO AMEND THE 1976 CODE BY ADDING

SECTIONS 38-77-175 AND 56-7-12 SO AS TO PROVIDE

THAT WHEN THE OPERATOR OR OWNER OF A MOTOR VEHICLE

IS ISSUED A TRAFFIC TICKET FOR A MOVING VIOLATION

BY A LAW ENFORCEMENT OFFICER, HE MUST BE FURNISHED

A WRITTEN REQUEST FORM TO COMPLETE TO VERIFY

LIABILITY INSURANCE COVERAGE, PROVIDE FOR THE

RETURN OF THE FORM AND THE EFFECT OF FAILURE TO

RETURN THE FORM TO THE DEPARTMENT OF HIGHWAYS AND

PUBLIC TRANSPORTATION, AND PROVIDE FOR THE DEPOSIT

OF ANY FINE COLLECTED FOR A VIOLATION OF SECTION

56-10-270 AS A RESULT OF THESE TWO NEW SECTIONS; TO

REPEAL ARTICLE 5 OF CHAPTER 77 OF TITLE 38,

RELATING TO THE SOUTH CAROLINA REINSURANCE FACILITY

AND DESIGNATED PRODUCERS; AND TO PROVIDE FOR THE

<#PAGE>SEVERABILITY AND THE CONSTITUTIONALITY OF THIS ACT

AND FOR CERTAIN OBLIGATIONS AND SUBROGATION OF

PERSONAL PROTECTION INSURERS UNDER CERTAIN

CIRCUMSTANCES INVOLVING THE UNCONSTITUTIONALITY OR

INVALIDITY OF SECTION 38-78-110.

Be it enacted by the General Assembly of the State

of South Carolina:

SECTION 1. Title 38 of the 1976 Code is amended

by adding:

Section 38-78-10. This chapter may be cited as

the `Consumer Freedom of Choice in Motor Vehicle

Insurance Act'.

Section 38-78-20. (A) Under existing law, the

ability of a person to recover losses incurred as

a result of a motor vehicle accident is limited by

factors over which the accident victim has no

control. The recovery is dependent on the conduct

of the other driver, the amount of liability

insurance carried by the other driver, and the

financial resources of the other driver. Two

individuals who have received identical injuries

may recover markedly different amounts. Under

existing law, many individuals receive little or no

compensation for their losses.

(B) This chapter gives motorists the right to

choose the kinds of personal protection available

in case of an automobile accident and the amount of

financial protection they deem appropriate and

affordable. Instead of being forced to buy

traditional fault liability insurance to protect

strangers, motorists will have the opportunity to

buy a new personal protection policy to protect

themselves and their family members regardless of

fault in the event of a motor vehicle accident.

<#PAGE>Motorists will also have the right to reject the

provisions of this chapter, and thus retain all

rights to sue and be sued for both economic and

noneconomic loss based on fault, under the existing

fault liability insurance system.

(C) The interaction between traditional fault

liability insurance and the personal protection

policy is as follows:

(1) Motorists who choose the traditional

fault liability insurance and who are involved in

an accident with any other motorist essentially

will retain the system existing now where they have

the opportunity to claim and sue based on fault for

both economic and noneconomic damages. They will

also remain subject to being sued for such

liability to others based on fault.

(2) Motorists who choose the new personal

protection policy system established by this

chapter and who are involved in an accident with a

motorist who has chosen traditional fault liability

insurance will be promptly compensated for their

own economic losses regardless of fault. A

personal protection insured can claim against and

sue the other motorist, based on fault, for

economic damages if the damages exceed their

personal protection limits and for noneconomic

damages if their injury exceeds the verbal

threshold. They will also remain in this

circumstance subject to being sued for such

liability to others based on fault.

(3) Two motorists who each choose the

personal protection policy and who are involved in

an accident with each other will be promptly

compensated under their own policies for their own

economic losses regardless of fault. In this

situation, the two motorists who have chosen the

personal protection policy do not have the right to

claim and sue for full damages based on fault

unless the damages exceed a verbal threshold but if

either suffers a loss in excess of his or her

policy's benefit levels, that person retains the

right to claim and sue for uncompensated economic

loss based on fault.

<#PAGE> (4) If a motorist who has chosen fault

liability insurance is involved in an accident with

an uninsured motorist, the policyholder can be

compensated for losses under the uninsured motorist

provisions of his or her own policy based on fault

and has the right to claim against and sue the

uninsured motorist for full damages based on fault.

The uninsured motorist forfeits any right to claim

for property damage up to ten thousand dollars and

for noneconomic loss against the motorist who has

chosen fault liability insurance, except where the

motorist choosing fault liability insurance was

driving under the influence of alcohol or illegal

drugs or committed intentional misconduct.

(5) If a motorist who has chosen the personal

protection policy is involved in an accident with

an uninsured motorist, the policyholder will be

promptly compensated for economic losses under his

or her personal protection policy regardless of

fault and has the right to claim against and sue

the uninsured motorist for noneconomic damages

based on fault if the injury exceeds the verbal

threshold. The uninsured motorist forfeits any

right to claim for the first ten thousand dollars

of property damage and for noneconomic loss against

the motorist who has chosen the personal protection

policy, except where such motorist was driving

under the influence of alcohol or illegal drugs or

committed intentional misconduct.

(D) The rate to be charged by each automobile

insurer for the basic personal protection policy

required by this act shall be at least fifteen

percent lower than the approved rate for the

minimum limits prescribed by Sections 38-77-140 and

38-77-150 by class and territory for each

automobile insurance risk in effect on September

30, 1992. The rate for the basic personal

protection policy cannot be increased for

automobile insurance policies issued or renewed

with effective dates between January 1, 1993,

through December 31, 1993.

(E) A motorist who purchases the personal

protection policy will have five thousand dollars

of property damage insurance as part of his

<#PAGE>mandatory coverage. In order to keep the cost of

property damage liability insurance as low as

possible, collision insurers of persons who have

chosen personal protection policies are prohibited

from asserting subrogation claims against other

personal protection insureds except for the

deductible amount.

(F) To the extent the terms of Section 38-78-20

may differ from the terms of Section 38-78-30, the

terms of Section 38-78-30 govern.

Section 38-78-30. As used in this chapter,

unless the context otherwise requires:

(A) `Accidental bodily injury' means bodily

injury, sickness, or disease, or death resulting

therefrom, arising out of the ownership, operation,

or use of a motor vehicle, or while occupying such

vehicle, which is accidental as to the person

insured.

(B) `Added personal protection' means an

optional policy, plan, or coverage for personal

protection which each insurer issuing motor vehicle

liability insurance in this State shall make

available in the limits set by Section

38-77-110(B)(5).

(C) `Basic personal protection' means a

policy, plan, or coverage for personal protection

which provides benefits for net loss resulting from

accidental bodily injury resulting from a motor

vehicle accident and liability coverage in at least

the amounts prescribed by Section 38-77-140. Basic

personal protection benefits consist of the

following, with an aggregate limit of fifteen

thousand dollars per person arising out of one

motor vehicle accident:

(1) medical expenses;

(2) loss of income from work, up to two

hundred dollars per week;

(3) replacement services loss, up to one

hundred dollars per week;

(4) death benefits of five thousand dollars

if the death of the injured person occurs within

one year after the date of a motor vehicle accident

and was a direct result of the accident.

<#PAGE> Each basic personal protection insurer is

permitted to incorporate in added personal

protection benefits coverage such terms,

conditions, and exclusions as may be consistent

with the premiums charged.

Motorcycles may not be covered by a personal

protection policy.

(D) `Cause of action for injury' means a

claim for accidental bodily injury for economic or

noneconomic loss, or both, caused by the negligent

conduct or intentional misconduct of another

person, and includes a claim by any person other

than a person suffering accidental bodily injury

based on such injury, including, but not limited

to, loss of consortium, companionship, or any

derivative claim.

(E) `Collateral sources' means any benefit a

person receives or is entitled to receive from any

source, other than added personal protection

benefits, as reimbursement for loss resulting from

an accidental bodily injury. In calculating the

benefits payable to a personal protection insured,

no subtraction may be made for the amounts the

personal protection insured receives or is entitled

to receive:

(1) in discharge of familial obligations or

support;

(2) by reason of another person's death,

except that amounts so received from social

security or workers' compensation shall be

subtracted; or

(3) as gratuities. Any amount paid by an

employer to an employee or the survivors of the

employee is not a gratuity.

(F) `Commissioner' means the Chief Insurance

Commissioner.

(G) `Dependent' means all persons related to

another person by blood, marriage, adoption, or

otherwise who reside in the same household at the

time of the accidental bodily injury and receive

financial services or support for him or her.

(H) `Economic loss' means actual pecuniary

loss and actual monetary expenses incurred by or on

behalf of an injured person as the result of an

<#PAGE>accidental bodily injury consisting only of medical

expense, work loss, replacement services loss, and

death benefits.

(I) `Governmental unit' means the United

States government, the government of the State of

South Carolina, and any agency, authority, board,

department, division, commission, institution,

bureau, or like governmental entity of either such

government, or any local government in this State,

and such units thereof, including, but not limited

to, counties, cities, towns, and other regional

governments.

(J) `Injured person' means a person who

sustains accidental bodily injury when eligible for

benefits under a policy providing personal

protection. The term also includes, where

appropriate, the personal representative of an

estate.

(K) `Intentional misconduct' means conduct

whereby harm is intentionally caused or attempted

to be caused by one who acts or fails to act for

the purpose of causing harm or with knowledge that

harm is substantially certain to follow when such

conduct caused or substantially contributed to the

harm claimed for. A person does not intentionally

cause or attempt to cause harm (1) merely because

his or her act or failure to act is intentional or

done with the realization that it creates a grave

risk of causing harm or (2) if the act or omission

causing bodily harm is for the purpose of averting

bodily harm to oneself or another person.

(L) `Loss of income from work' means eighty

percent loss of gross income from the work the

injured person would have continued to perform if

he or she had not been injured, reduced by any

income from substitute work actually performed by

him or her or by income he or she would have earned

in available appropriate substitute work he or she

was capable of performing but unreasonably failed

to undertake. In order to be eligible for these

benefits, the injured person must have been in an

occupational status, earning or producing income,

immediately prior to the accident. Loss of income

from work does not include any loss after the death

<#PAGE>of the injured person, and payment for the period

of disability shall not exceed two years from the

date of the accident.

Loss of income from work may be excluded from an

insured's policy, at the policyholder's request,

with an appropriate reduction in the premium.

(M) `Medical expenses' means reasonable

amounts incurred by an injured person for necessary

medical, surgical, radiological, dental, ambulance,

hospital, medical rehabilitation and professional

nursing services, eyeglasses, hearing aids, and

prosthetic devices. Medical expense may include

nonmedical remedial treatment rendered in

accordance with a recognized religious method of

healing. The words `incurred by' include medical

expenses incurred on behalf of an injured person by

a parent or guardian if the injured person is a

minor or incompetent, or by a surviving spouse if

the injured person is deceased. Personal

protection insurers may review medical expenses to

assure that the expenses are reasonable and

necessary. Under basic personal protection and

added personal protection, medical expenses are

promptly payable to the injured person for covered

expenses incurred within two years after the date

of the accident. `Medical expenses' do not

include:

(1) that portion of a charge for a room in a

hospital, clinic, or convalescent or nursing home,

or any other institution engaged in providing

nursing care and related services, in excess of a

reasonable and customary charge for semi-private

accommodations, unless medically required; or

(2) treatments, services, products, or

procedures that are experimental in nature, or for

research, or not primarily designed to serve a

medical purpose, or which are not commonly and

customarily recognized throughout the medical

profession and within the United States as

appropriate treatment of the accidental bodily

injury, or which are not performed by a

professional licensed by the professional's

licensing board pursuant to Title 40.

<#PAGE> (N) `Medical rehabilitation' means

rehabilitation services which are reasonable and

necessary to reduce the disability and help to

restore the pre-accident level of physical

functioning of the injured person.

(O) `Motor vehicle' is defined by Section

38-77-30(7).

(P) `Noneconomic loss' means any loss other

than economic loss and includes, but is not

necessarily limited to, pain, suffering,

inconvenience, physical impairment, mental anguish,

emotional pain and suffering, hedonic damages, and

loss of any of the following: earning capacity,

consortium, society, companionship, comfort,

protection, marital care, parental care, filial

care, attention, advice, counsel, training,

guidance, or education. Noneconomic loss does not

include economic loss caused by pain and suffering

or by physical impairment.

(Q) `Occupying' means to be in or upon a

motor vehicle or engaged in the immediate act of

entering into or alighting from the motor vehicle.

(R) `Operation or use' means operation or use

of a motor vehicle as a motor vehicle, including,

incident to its operation or use as a vehicle,

occupying it. Operation or use of a motor vehicle

does not cover conduct within the course of a

business of manufacturing, selling, or maintaining

a motor vehicle, including repairing, servicing,

washing, loading, or unloading, nor does it include

such conduct not within the course of such a

business, unless such conduct occurs while

occupying a motor vehicle.

(S) `Owner' means the person or persons,

other than a lienholder or secured party, who owns

or has title to a motor vehicle or is entitled to

the use and possession of a motor vehicle subject

to a security interest held by another person.

Owner does not include (i) a lessee under a lease

not intended as security, or (ii) the United States

of America or any agency thereof, except with

respect to motor vehicles for which it has elected

to provide insurance.

<#PAGE> (T) `Person' includes an organization, public

or private.

(U) `Personal protection' means a policy,

plan, or coverage which provides basic or added

personal protection benefits for loss resulting

from accidental bodily injury, regardless of fault.

(V) `Personal protection insured' means:

(1) a person identified by name as an insured

in a contract providing personal protection

benefits;

(2) while residing in the same household with

a named insured, the following persons:

(a) a spouse or other relative of a named

insured; or

(b) a minor in the custody of a named

insured. A person resides in the same household if

he or she usually makes his or her home in the same

family unit, even though he or she temporarily

lives elsewhere;

(3) a person with respect to accidents within

this State who sustains accidental bodily injury

while occupying or when struck by a motor vehicle

insured for personal protection, unless the person

has rejected the coverage under Section 38-78-120.

(W) `Personal protection insurer' means an

automobile insurer.

(X) `Replacement services loss' means

expenses reasonably incurred in obtaining ordinary

and necessary services from others, not members of

the injured person's household, in lieu of those

the injured person would have performed for the

benefit of the household. Replacement services

loss does not include any loss incurred after the

death of an injured person, and the disability

period shall not exceed two years from the date of

the accident.

(Y) `Resident relative' means a person

related to the owner of a motor vehicle by blood,

marriage, adoption, or otherwise and residing in

the same household. A person resides in the same

household if he or she usually makes his or her

home in the same family unit, even though

temporarily living elsewhere.

<#PAGE> (Z) `Serious injury' means an accidental

bodily injury which results in death, serious and

permanent loss of an important bodily function,

permanent and serious bodily injury determined

objectively within reasonable medical probatility,

or serious and permanent disfigurement.

(aa) `Uncompensated economic loss' means that

portion of economic loss arising out of an

accidental bodily injury of an injured person which

exceeds the benefits provided by a personal

protection insurer under a policy providing such

benefits (except for loss incurred by a deductible

under such a policy) and collateral sources. Such

loss is payable under the same terms and

limitations as under added personal protection but

shall not be subject to the limit of liability of

such coverage.

(bb) `Uninsured motorist' means the owner of

a motor vehicle uninsured for either basic personal

protection or liability insurance at the limits

prescribed by this State's financial responsibility

laws or who otherwise fails to comply with the

financial responsibility laws of this State.

(cc) `Uninsured motor vehicle' means a motor

vehicle required to be registered as to which (i)

there is no bodily injury liability insurance and

property damage liability insurance, (ii) no bond

has been given or cash or securities delivered in

lieu thereof, (iii) the owner has not qualified as

a self-insurer, or (iv) there is no basic or added

personal protection insurance as defined in Section

38-78-30.

Section 38-78-40. Each motor vehicle required

to be registered in this State shall be insured for

basic personal protection as defined by Section

38-78-30(C) and security for payment of tort

liabilities as required by Section 38-77-140,

unless the owner of the motor vehicle exercises his

or her right of rejection under Section 38-78-120

or complies with Section 56-10-520 relating to the

right to drive without insurance. This insurance

may be provided by a contract of insurance or by

<#PAGE>qualifying as a self-insurer in compliance with

Section 56-9-60.

An insurance policy written by a personal

protection insurer under this chapter to provide

basic personal protection is deemed to include all

coverages required by this chapter, including the

minimum tort liability coverage. Coverage under

basic personal protection meets the requirements of

this State's financial responsibility laws.

Section 38-78-50. Every personal protection

insured must be offered uninsured motorist coverage

as required by Section 38-77-150. Additional

uninsured motorist coverage and underinsured

motorist coverage must be offered to the insured as

required by Section 38-77-160. All other

provisions, rights, and obligations in Sections

38-77-150 and 38-77-160 apply to the personal

protection insured and the insurer. A personal

protection insured may not recover under the

uninsured motorist provision of the personal

protection policy if the personal protection

insured was at fault in the accident. Noneconomic

damages may only be recovered under this provision

if the threshold as defined in Section 38-78-110 is

reached.

Section 38-78-55. Regardless of the number of

motor vehicles involved, policies issued, persons

covered, claims made, or premiums paid, the

liability limits for multiple coverages under one

or more automobile insurance policies must not be

combined or added together to determine the maximum

limit of coverage available to an injured person.

Unless the insurance policy or contract clearly

provides otherwise, the policy or contract may

provide that if two or more policies, plans, or

coverages apply equally to the same accident, the

highest limit of liability applicable is the

maximum amount available to an injured person under

any one of the policies, plans, or coverages.

Section 38-78-60. (A) A personal protection

insurer shall pay to a personal protection insured

<#PAGE>benefits for accidental bodily injury sustained

within the United States, its territories, or

possessions or Canada.

(B) A personal protection policy issued in this

State contains coverage such that it satisfies the

financial responsibility laws of any other state or

Canadian province in which the insured motor

vehicle is operated.

Section 38-78-70. (A) A personal protection

insurer has no obligation to provide benefits to or

on behalf of an injured person who at the time of

the accident:

(1) was involved in a motor vehicle accident

while committing a felony or while voluntarily

occupying a motor vehicle that he or she knew to be

stolen. If the person dies as a result of his or

her own intentional misconduct, his or her

survivors are not entitled to personal protection

for loss arising from the decedent's injury or

death;

(2) was driving under the influence of

alcohol or illegal drugs;

(3) was occupying an uninsured motor vehicle

owned by the person;

(4) was guilty of intentional misconduct. If

the person dies as a result of his or her own

intentional misconduct, his or her survivors are

not entitled to personal protection for loss

arising from the decedent's injury or death;

(5) has rejected the limitation on his or her

right to sue under Section 38-78-120;

(6) was an uninsured motorist;

(7) was operating or occupying a motor

vehicle with three or fewer load bearing wheels;

(8) was operating an insured vehicle without

the express or implied consent of the owner; or

(9) was injured while occupying a motor

vehicle owned by, or furnished or available for the

regular use of, the injured person, or the injured

person's resident spouse or relative, if such motor

vehicle is not described in the policy under which

a claim is made, or is not a newly acquired or

<#PAGE>replacement motor vehicle covered under the terms

of the policy.

(B) A personal protection insurer may include in

personal protection coverage any person under

subsection (A) if the insurer states its intent to

do so clearly on the policy.

Section 38-78-80. At the option of the personal

protection insurer, personal protection benefits

are payable to any of the following persons:

(1) the injured person;

(2) the parent or guardian of the injured

person, if the injured person is a minor or

incompetent;

(3) a survivor, executor, or administrator of

the injured person; or

(4) any other person or organization rendering

the services for which payment is due.

Section 38-78-90. Subject to Section 38-78-80,

a person who is entitled to receive personal

protection benefits may claim the benefits in the

following order up to the limits of personal

protection in the listed category:

(1) the personal protection covering a motor

vehicle involved in the accident, if the person

injured was an occupant of or was struck by the

motor vehicle. If the personal protection insurer

providing such insurance fails to make payment for

loss within thirty days after receipt of reasonable

proof of the fact and the amount of loss sustained,

the injured person shall be entitled to payment

under any contract of personal protection insurance

under which he is a personal protection insured and

the insurer making the payments shall be entitled

to full reimbursement from the insurer providing

the insurance covering the vehicle;

(2) the personal protection under which the

injured person is or was an insured.

Section 38-78-100. (A) A personal protection

insurer is obligated to indemnify an injured

person, except that benefits payable for the same

accidental bodily injury under state-mandated

<#PAGE>disability coverage or workers' compensation or

similar occupational compensation act shall be

subtracted from the personal protection benefits

payable to the injured person.

(B) A basic personal protection insurer must

offer a deductible to the named insured of a

personal protection policy in the amounts of two

hundred fifty dollars, five hundred dollars, and

one thousand dollars to apply with respect to a

claim by the named insured or a person residing in

the same household with the named insured. If the

named insured accepts such offer, the rate must be

reduced for such coverage in an amount filed by the

insurer and approved by the commissioner. The

named insured is not required to accept the offer

and may choose personal protection coverage without

a deductible other than for property damage caused

by an uninsured motorist.

Section 38-78-110. (A) Any person who

registers, operates, maintains, or uses a motor

vehicle on the public roadways of this State shall,

as a condition of such registration, operation,

maintenance, or use of such motor vehicle and use

of the public roadways, be deemed to have accepted

the provisions of this chapter, and in particular

those provisions which are contained in this

section.

(B) Tort liability with respect to accidents

occurring in this State and arising out of the

ownership, maintenance, or use of a motor vehicle

is abolished with respect to any person entitled to

benefits pursuant to Section 38-78-30(C) except to

the extent such person has sustained an injury as

defined in subsection (C) of this section and

except to the extent such person has sustained

actual economic loss in excess of the limits of any

applicable personal protection policy.

(C) In any action of tort brought against the

owner, registrant, operator, or occupant of a motor

vehicle with respect to which security has been

provided as required in this chapter, or against

any person or organization legally responsible for

his acts or omissions, a plaintiff may recover

<#PAGE>damages in tort for pain, suffering, mental

anguish, and inconvenience because of bodily

injury, sickness, or disease arising out of the

ownership, maintenance, operation, or use of such

motor vehicle only in the event that the injury

reaches one of the following thresholds:

(1) the injury or disease consists in whole

or in part of permanent and serious disfigurement;

(2) permanent and serious bodily injury,

determined objectively, within reasonable medical

probability;

(3) permanent and serious loss of an

important bodily function; or

(4) death.

Section 38-78-120. (A) Any person may refuse to

consent to the limitations on his tort rights and

liabilities. To ensure preservation of the right

to choose to reject any limitations on tort rights

and liability contained in this chapter, any person

may execute a form approved by the commissioner for

rejecting such limitations. Within sixty days

after the enactment of this chapter, a temporary

committee composed of the commissioner, the

Consumer Advocate, two representatives of the South

Carolina Bar, (one specializing in the defense of

claims and one specializing in the prosecution of

claims) appointed by the Governor, a representative

of an automobile insurer appointed by the Consumer

Advocate, a member of the judiciary appointed by

the Chief Justice of the Supreme Court, and an

insurance agent appointed by the commissioner shall

formulate the rejection form to be used by all

insurers in South Carolina.

(B) The form shall establish the effective date

of such a rejection. Any rejection by a person who

is under a legal disability shall be made on behalf

of such person by a parent, legal guardian,

conservator, or committee and shall remain in

effect until revoked or until the person is no

longer under legal disability, whichever is sooner.

The failure of such guardian, parent, conservator,

or committee of a person under a legal disability

to file a rejection, within six months from the

<#PAGE>date that this chapter would otherwise become

applicable to such person, is deemed to be an

affirmative acceptance of the limitations on tort

liability. Any person who at the time of an

accident does not have basic personal protection

but has not formally rejected such limitations and

has in effect security equivalent to that required

by Section 38-77-140 is deemed to have fully

rejected the tort limitations for that accident

only.

(C) A rejection of tort limitations must be

immediately filed with the insurance company or

agent who provides the insurance policy and is

effective on the date of its filing. The rejection

applies to any motor vehicle accident occurring

after that date. The rejection remains effective

until it is revoked in writing on a form approved

by the commissioner at the time of renewal or

issuance of a new policy by the purchase of a tort

policy. The revocation is effective upon its

filing with the insurance company or agent who

provides the insurance policy and remains effective

until it is withdrawn in a manner prescribed by the

commissioner. The rejection form is a matter of

public record.

(D) The commissioner shall establish and

maintain a program designed to assure that all

consumers are adequately informed about the

comparative cost of personal protection insurance

and liability insurance for those persons who

choose to reject limitations on tort rights and

liabilities, as well as the benefits, rights and

responsibilities of insureds under each type of

insurance.

(E) A person who selects personal protection

coverage or who rejects tort limitations on a form

approved by the commissioner is bound by that

choice and is precluded from claiming liability of

any party based on being inadequately informed as

to the coverage or rejection. This restriction

also applies to relatives residing in the same

household.

(F) Each motor vehicle insurer issuing motor

vehicle liability insurance in this State may

<#PAGE>require that all policies within a household be

either personal protection policies or liability

policies which satisfy the financial responsibility

laws of this State.

(G) To further insure preservation of the right

to reject the limitations on tort rights contained

in this chapter, the commissioner shall establish

procedures whereby any person who does not own a

motor vehicle and who is not a resident relative of

such an owner may, after sustaining accidental

bodily injury, execute a form prescribed by the

commissioner for rejecting such limitation within

sixty days after the date of the accident. If any

personal protection benefits are paid before the

rejection is effective, the personal protection

insurer has a right of subrogation for any payments

made through a tort recovery.

Section 38-78-125. (A) A person may bring a

cause of action for injury against a person who

caused him actual ec.onomic loss, for any

uncompensated economic loss.

(B) A person suffering accidental bodily injury

while occupying or when struck by a motor vehicle

which is insured for personal protection and who is

not at the time of the accident covered by a

rejection of limitations on tort rights and

liabilities under Section 38-78-120 and is not an

uninsured motorist may receive personal protection

benefits applicable to the motor vehicle and has a

right to claim uncompensated economic loss against

the personal protection insured. A person who

files a claim under this subsection has the same

rights and duties as a personal protection insured

with respect to a claim by that insured.

(C) An uninsured injured motorist may not claim

in tort for property damage except for such damage

that exceeds ten thousand dollars or for

noneconomic damages, unless the motor vehicle

operator is driving under the influence of alcohol

or illegal drugs or is guilty of intentional

misconduct. An uninsured motorist retains fault

liability with respect to others. A person driving

under the influence of alcohol or illegal drugs may

<#PAGE>not claim in tort for either economic or

noneconomic damages against a person who has

rejected tort limitations. A person who rejects

tort limitations shall not collect personal

protection benefits unless he or she has revoked

his or her rejection under Section 38-78-120(C).

(D) Personal protection benefits received shall

include reasonable expenses incurred by the person

in collecting the benefits and shall include

reasonable attorney fees. No part of the attorney

fees may be charged against benefits otherwise due

the claimant, and an attorney may not charge an

additional fee to collect the benefits. Part or

all of the attorney fees may be deducted from the

benefits otherwise owing if a significant part of

the claim was fraudulent. In an action brought by

a personal protection insurer, attorney fees shall

be awarded to the injured person only if the

injured person is the prevailing party.

(E) A personal protection insured has a cause of

action against another personal protection insured

for property damage only to the extent that the

property is not covered by collision insurance or

to recover any required deductible.

(F) A personal protection insured suffering

accidental bodily injury has no cause of action for

injury against a governmental unit or any

individual for whom a governmental unit is

vicariously liable if:

(1) the cause of action is based on something

other than the operation or use of the motor

vehicle, and

(2) within one hundred eighty days after the

accident or after the filing of the cause of

action, the governmental unit agrees in writing to

pay the personal protection insured added

protection benefits to cover any economic loss in

excess of any benefits paid by a personal

protection insurer, including attorney fees. A

personal protection insured may, however, reject

such offer to be paid added protection benefits and

pursue a cause of action for injury against any

such individual, but only if it can be proven

<#PAGE>beyond a reasonable doubt that such individual was

guilty of wanton or intentional misconduct.

Section 38-78-140. (A) Personal protection

benefits are payable monthly as loss accrues. Loss

accrues not when the injury occurs but as work

loss, replacement services loss, or medical expense

is incurred. The benefits are overdue if they are

not paid within thirty days after the personal

protection insurer receives reasonable proof of the

fact and the amount of loss sustained, except that

a personal protection insurer may accumulate claims

for a period not to exceed thirty days, in which

case benefits are not overdue if they are paid

within twenty days after the period of

accumulation. If reasonable proof is not supplied

for the whole claim, the amount supported by

reasonable proof is overdue if it is not paid

within thirty days after the proof is received by

the insurer. Any part or all of the remainder of

the claim that is later supported by reasonable

proof is overdue if it is not paid within thirty

days after the proof is received by the insurer.

To determine the extent to which any benefits are

overdue, a payment is treated as made on the date

a draft or other valid instrument is mailed or, if

not so posted, the date of delivery. The personal

protection insurer may pay personal protection

benefits directly to a person who supplies

necessary products, services, or accommodations to

the injured person. All overdue payments shall

bear interest at the rate of one hundred fifty

percent of the prime rate in effect at the time the

payments become overdue.

(B) If overdue benefits are recovered against a

personal protection insurer or are paid by a

personal protection insurer, the provisions of

Section 38-78-110(E) pertaining to expenses and

attorney fees apply. The remedy set forth in this

section is the exclusive remedy for an insurer's

failure to pay or delay in paying personal

protection benefits or for conduct of an insurer

arising out of the manner in which the insurer

denied or delayed payment.

<#PAGE> (C) An insurer who rejects a claim for basic

personal protection benefits shall give to the

claimant prompt written notice of the rejection,

specifying the reason.

Section 38-78-150. (A) Personal protection

benefits, except medical benefits, are exempt from

garnishment, attachment, execution, or any other

process or claim to the extent that wages or

earnings are exempt under any applicable law.

(B) An agreement for assignment of any right to

personal protection benefits payable in the future,

except for medical benefits, is unenforceable

except to the extent that the benefits are for the

cost of products, services, or accommodations

provided or to be provided by the assignee or that

the benefits are for loss of income from work or

replacement services and are assigned to secure

payment of alimony, maintenance, or child support.

Section 38-78-160. An insurer is allowed a

reasonable attorney fee for defending a claim for

benefits that is fraudulent or so excessive as to

have no reasonable foundation. The fee may be

treated as an offset against benefits due or which

thereafter accrue. The insurer may recover from

the claimant any part of the fee not offset or

otherwise paid.

Section 38-78-170. An insurer under a policy of

personal protection insurance may require written

notice to be given as soon as practicable after an

accident involving a secured vehicle for which it

provides coverage.

Section 38-78-190. If no personal protection

benefits have been paid other than death benefits,

a person may bring an action against the personal

protection insurer not later than two years after

the accidental bodily injury occurred. If personal

protection benefits have been paid, a person may

bring an action to recover further benefits not

later than two years after the last payment of

benefits.

<#PAGE> Section 38-78-200. (A) If the mental or

physical condition of an injured person is material

to any claim for past or future personal protection

benefits, the injured person shall submit to

reasonable mental or physical examinations by a

physician or physicians designated by the insurer,

at the insurer's expense. The examinations shall

take place at a reasonably convenient time and

location. A personal protection insurer may

include provisions of this nature in a personal

protection policy.

(B) If after a request by a personal protection

insurer a person refuses to submit to reasonable

mental and physical examinations by a physician or

physicians designated by the insurer or refuses to

undergo mental or rehabilitation services payable

by the insurer, the insurer, on written notice, may

suspend all future benefits until the person

complies with the request.

Section 38-78-210. (A) On request by a claimant

or personal protection insurer, an employer shall

provide information on a form approved by the

commissioner, including the work records and

earnings, regarding an employee who has filed a

claim for personal protection benefits. On request

of the claimant or insurer the information must

cover the period specified by the claimant or

insurer making the request and may include a

reasonable period before, and the entire period

after, the injury.

(B) The claimant, upon request by the insurer,

must provide to the insurer the names and addresses

of the physicians and medical facilities rendering

diagnosis or treatment in regard to the injury or

to a relevant injury and the claimant shall

authorize the insurer to inspect and copy any

relevant medical records.

(C) Every physician or other health care

provider, including, but not limited to, a

hospital, clinic, or other medical institution

providing, before or after an injury resulting from

a motor vehicle accident upon which a claim for

personal protection benefits is based, any

<#PAGE>products, services, or accommodations in relation

to that or any other injury, or in relation to a

condition claimed to be connected with that or any

other injury, shall, if requested to do so by the

personal protection insurer against whom the claim

has been made, furnish a written report of the

history, condition, treatment, and the dates and

costs of such treatment, of the injured person.

Such information shall be provided together with a

sworn statement that the treatment or services

rendered were reasonable and necessary with respect

to the injury sustained and identifying which

portion of the expenses for such treatment or

services were incurred as a result of such injury.

Every such physician or other health care provider,

hospital, clinic, or other medical institution

shall also promptly produce and permit the

inspection and copying of its records regarding

such history, condition, and treatment, and the

dates and costs of treatment. The sworn statement

required under this section shall read as follows:

`Under penalty of perjury I declare that I have

read the foregoing and the facts alleged are true,

to the best of my knowledge and belief.'

(D) No cause of action for violation of a

physician-patient privilege or invasion of the

right of privacy is allowed against any physician

or other health care provider, hospital, clinic, or

other medical institution complying with the

provisions of this section.

(E) The person requesting records and a sworn

statement under this section shall pay all

reasonable costs connected therewith.

(F) A court may order or prohibit discovery of

any records under this section in case of any

dispute as to the right of a claimant or insurer to

discover the information required to be disclosed

by this section.

Section 38-78-240. A physician or other health

care provider, including, but not limited to, a

hospital, clinic, or other health care institution

rendering treatment to an injured person, may

charge only a reasonable amount for the products,

<#PAGE>services, and accommodations rendered. The charge

shall not exceed the amount the person or

institution customarily charges for the products,

services, and accommodations in cases not involving

insurance.

Section 38-78-250. A personal protection

insurer, with the approval of the commissioner, may

use managed care systems, including, but not

limited to, health maintenance organizations and

preferred provider options, and may require an

injured person to obtain health care through a

managed care system designated by the personal

protection insurer if the injured person opts at

the time of purchase of personal protection

coverage to be subject to a managed care system at

an appropriately reduced premium.

Section 38-78-260. The commissioner shall adopt

rules which encourage personal protection insurers

to institute incentives for personal protection

insureds to install, maintain, and make use of

injury-reducing devices such as seat and harness

belts, air bags, and child restraint systems.

Section 38-78-280. (A) Each insurer authorized

to transact business or transacting business in

this State shall file with the commissioner a form

approved by the commissioner which states that any

contract of motor vehicle liability insurance,

wherever issued, covering the maintenance or use of

a motor vehicle while the motor vehicle is in this

State, is deemed to satisfy Section 38-78-40 once

the vehicle has been continuously present in this

State for thirty days unless the named insured has

rejected the limitations on tort rights and

liabilities under Section 38-78-120.

(B) If a person is entitled to personal

protection benefits or their equivalent under the

requirements of more than one state, the person

shall elect to recover under the laws of one state.

The election represents the exclusive source of

recovery of all personal protection benefits, or

their equivalent, paid or payable under the

<#PAGE>financial responsibility requirements of that or

any other state.

Section 38-78-290. All insurance coverages

provided under this chapter are subject to such

terms, conditions, and exclusions which have been

approved by the commissioner.

Section 38-78-325. The commissioner may adopt

additional regulations for effective administration

which are fair, equitable, and consistent with the

purpose of this chapter."

SECTION 2. Section 38-77-30(1) of the 1976 Code

is amended to read:

"(1) `Automobile insurance' means automobile

bodily injury and property damage liability

insurance, including medical payments and uninsured

motorist coverage, and automobile physical damage

insurance such as automobile comprehensive physical

damage, collision, fire, theft, combined additional

coverage, and similar automobile physical damage

insurance and economic loss benefits as provided by

this chapter written or offered by automobile

insurers. Automobile insurance policy includes a

motor vehicle liability policy as defined in item

(7) of Section 56-9-20 and includes the personal

protection policy as defined in Section

38-78-30(C)."

SECTION 3. Section 38-77-110(B) of the 1976

Code, as added by Act 148 of 1989, is amended by

adding the following:

"(5) two hundred fifty thousand dollars for

added personal protection coverage as defined in

Section 38-78-30(B)."

SECTION 4. Article 3, Chapter 77, Title 38 of

the 1976 Code is amended by adding:

"Section 38-77-355. (A) In a claim or action

for personal injury or wrongful death arising out

<#PAGE>of the ownership, operation, use, or maintenance of

a motor vehicle, the court shall admit into

evidence the total amount paid to the claimant from

collateral sources, and the court shall instruct

the jury to deduct from its verdict the value of

all benefits received by the claimant from

collateral sources.

(B) For purposes of this section, `collateral

sources' means payments made to the claimant, or on

his behalf, by or pursuant to:

(1) automobile liability, uninsured motorist,

underinsured motorist, or automobile accident

insurance that provides health benefits or income

disability coverage;

(2) personal protection benefits paid or

payable by law;

(3) payments made from a policy of automobile

insurance by or on behalf of a joint tortfeaser,

either by way of settlement or judgment.

(C) No claimant may make claim or demand, no

court may order payment, and no insurer may pay by

way of settlement, covenant not to sue, or trust or

loan agreement for an item of damages to the extent

that the claimant has already received, or will

receive, reimbursement for that item as a result of

a collateral source payment as defined in this

section."

SECTION 5. Section 38-77-280 of the 1976 Code,

as last amended by Act 113 of 1991, is further

amended to read:

"Section 38-77-280. <STRK>(A) Except as provided in

subsection (B), all automobile insurers, including

those insurance companies writing private passenger

physical damage coverages only, shall make

collision coverage and either comprehensive or

fire, theft, and combined additional coverage

available to an insured or qualified applicant who

requests the coverage.

Collision coverage must have a mandatory

deductible of two hundred fifty dollars, but an

insured or qualified applicant, as his option, may

<#PAGE>select an additional deductible in appropriate

increments up to one thousand dollars.

Comprehensive coverage or fire, theft, and

combined additional coverages must have a mandatory

deductible of two hundred fifty dollars, but an

insured, at his option, may select an additional

deductible in appropriate increments up to one

thousand dollars. This deductible does not apply

to auto safety glass. It is an unfair trade

practice, as described in Sections 38-57-30 and

38-57-40, for an insurer or an agent to sell

collision insurance, comprehensive coverage, or

fire, theft, and combined additional coverages

unless the insured is notified at the time of

application of the savings which may be realized if

the applicant or the insured selects a higher

deductible. This notice is required only at the

time of the initial sale and must be in a form

approved by the Chief Insurance Commissioner. An

insurer may offer insureds lower deductibles at the

insurer's option.

(B) Notwithstanding subsection (A) and Sections

38-77-110 and 38-77-920, automobile insurers may

refuse to write automobile physical damage

insurance coverage, including automobile

comprehensive physical damage, collision, fire,

theft, and combined additional coverage, for an

applicant or existing policyholder, on renewal, for

a motor vehicle customarily operated by an

individual, either the named insured or any other

operator not excluded in accordance with Section

38-77-340 and who resides in the same household,

where one or more of the conditions or factors

prescribed in Section 38-73-455 exist. In

addition, automobile insurers may refuse to write

physical damage insurance coverage to any applicant

or existing policyholder, on renewal, who has

collected benefits provided under any automobile

insurance physical damage coverage during the

thirty-six months immediately preceding the

effective date of coverage, for two or more total

fire losses or two or more total theft losses.

Automobile insurers may refuse to write for private

passenger automobiles comprehensive physical

<#PAGE>damage, collision, fire, theft, and combined

additional coverage, for an applicant or existing

policyholder, on renewal, for a motor vehicle

customarily operated by an individual, either the

named insured or another operator not excluded in

accordance with Section 38-77-340 and who resides

in the same household, which does not qualify for

the safe driver discount in Section 38-73-760(e).

(C) Notwithstanding Section 38-77-110,

automobile physical damage coverage in an

automobile insurance policy may be canceled at any

time during the policy period by reason of the

factors or conditions described in Section

38-73-455(A) or Section 38-77-280(B) which existed

before the commencement of the policy period and

which were not disclosed to the insurer at the

commencement of the policy period.

(D) No policy of insurance which provides

automobile physical damage coverage only may be

ceded to the facility.

(E) Insurers of automobile insurance may charge

a rate for physical damage insurance coverages

different than those provided for in Section

38-73-457 if the rates are filed and approved by

the Chief Insurance Commissioner. Any applicant or

existing policyholder, to be charged this different

rate, must be denied the coverage pursuant to

subsection (B) at the rate provided in Section

38-73-457.

(F) A carrier may not cede collision coverage,

comprehensive coverage, or fire, theft, and

combined additional coverages with a deductible of

less than two hundred fifty dollars. An insured or

qualified applicant may select an additional

deductible in appropriate increments up to one

thousand dollars. However, the mandatory

deductible does not apply to safety glass.</STRK>

Notwithstanding Sections 38-77-110 and 38-77-920,

after September 30, 1992, automobile insurers may

refuse to write or renew private passenger

automobile physical damage insurance coverage,

including automobile comprehensive physical damage,

collision, fire, theft, and combined additional

coverage for an applicant or existing policyholder.

<#PAGE>After September 30, 1992, no private passenger

automobile physical damage insurance coverage may

be ceded to the Facility."

SECTION 6. Section 38-77-30(4) of the 1976 Code

is amended to read:

"(4) `Damages' includes <STRK>both</STRK> actual <STRK>and

punitive</STRK> damages only."

SECTION 7. Section 38-77-140 of the 1976 Code

is amended to read:

"Section 38-77-140. (A) No automobile

insurance policy may be issued or delivered in this

State to the owner of a motor vehicle or may be

issued or delivered by an insurer licensed in this

State upon any motor vehicle then principally

garaged or principally used in this State, unless

it contains a provision insuring the persons

defined as insured against loss from the liability

imposed by law for actual damages arising out of

the ownership, maintenance, or use of these motor

vehicles within the United States or Canada,

subject to limits exclusive of interest and costs,

with respect to each motor vehicle, as follows:

fifteen thousand dollars because of bodily injury

to one person in any one accident, and, subject to

the limit for one person, thirty thousand dollars

because of bodily injury to two or more persons in

any one accident, and five thousand dollars because

of injury to or destruction of property of others

in any one accident. Nothing in this article

prevents an insurer from issuing selling, or

delivering a policy providing liability coverage in

excess of these requirements.

(B) An insurer shall also offer the insured, in

accordance with Section 38-77-350, a rider or

endorsement for an additional premium to cover such

liability for punitive damages. The insured has

the option of accepting or refusing coverage for

punitive damages.

As a result of passage of this section, all

insurers offering bodily injury liability coverage

<#PAGE>shall file with the Chief Insurance Commissioner,

not later than ninety days after the effective date

of this act, revised premium rates for bodily

injury liability coverage. The revised rates must

be approved by the commissioner and reflect a

reduction in the currently approved premium rate

for this coverage of at least one and one-half

percent. Insurers shall file with the commissioner

not later than sixty days after the effective date

of this act premium charges for the punitive

damages loss coverage. The premium rate for this

coverage shall become effective for the automobile

insurance policies issued or renewed with effective

dates on or after January 1, 1993, and may not be

approved if it is more, when combined with the

reduced premium rate for the new bodily injury

liability coverage with limitations on the recovery

of punitive damages, than the bodily injury

liability premium rate for that insurer on the

effective date of this act; however, after December

31, 1993, an insurer may apply to the Chief

Insurance Commissioner for a rate adjustment for

such coverage, based on its actual experience."

SECTION 8. Section 38-77-150 of the 1976 Code

is amended to read:

"Section 38-77-150. (A) No automobile

insurance policy or contract may be issued or

delivered unless it contains a provision by

endorsement or otherwise, herein referred to as the

uninsured motorist provision, undertaking to pay

the insured all sums which he is legally entitled

to recover as actual damages from the owner or

operator of an uninsured motor vehicle, within

limits which <STRK>may be</STRK> are no less than the

requirements of Section 38-77-140. The uninsured

motorist provision <STRK>shall</STRK> must also provide for no

less than five thousand dollars' coverage for

injury to or destruction of the property of the

insured in any one accident but may provide an

exclusion of the first two hundred fifty dollars of

the loss or damage.

<#PAGE> (B) Automobile insurers shall offer, at the

option of the insured and in the manner hereinafter

described, higher limits of uninsured motorist

coverage in accordance with Section 38-77-350. The

offer of higher limits must be made in connection

with every initial application for an automobile

insurance policy by including a written explanation

of the coverage and inquiry of the applicant, in a

form prescribed by the Chief Insurance

Commissioner, as to whether the applicant desires

to purchase uninsured motorist coverage with limits

greater than the mandatory coverages described in

subsection (A). No such explanation or inquiry

need be made with respect to any renewal,

replacement, reinstatement, substitute, or

modification of the policy. An insured may, at any

time and subject to the limits of this section,

specifically request in writing uninsured motorist

coverage limits greater than that provided on the

current or any prior policy.

(C) Insurers shall offer on a form prescribed by

the Chief Insurance Commissioner `nonstackable'

policies of uninsured motorist coverage containing

policy provisions establishing that if the insured

accepts this offer:

(1) Regardless of the number of vehicles

involved, persons covered, number of premiums paid,

or vehicles or premiums shown on the policy or

policies under which the insured might otherwise be

entitled to benefits, the coverage provided as to

two or more motor vehicles under the same or

different policies may not under any circumstances

be added together, combined with, or stacked to

determine the limit of insurance coverage available

to an injured person for any one accident, except

as provided in item (3) of this subsection (C).

(2) If at the time of the accident the

injured person is occupying a motor vehicle, the

uninsured motorist coverage available to him is the

coverage available as to that motor vehicle.

(3) If the injured person is occupying a

motor vehicle which is not owned by him or by a

family member residing with him, he is entitled to

the highest limits of uninsured motorist coverage

<#PAGE>afforded for any one vehicle as to which he is

named insured. Such coverage is excess over the

coverage on the vehicle he is occupying.

(4) The uninsured motorist coverage provided

by the policy does not apply to the named insured

who is injured while occupying any vehicle owned by

the named insured for which uninsured motorist

coverage was not purchased.

(5) If at the time of the accident the

injured person is not occupying a motor vehicle, he

is entitled to select any one limit of uninsured

motorist coverage for any one vehicle afforded by

a policy under which he is insured as a named

insured.

(6) In connection with the offer authorized

by this subsection, insurers shall inform the named

insured, applicant, or lessee, on a form prescribed

by the Chief Insurance Commissioner, of the

limitations imposed under this subsection and that

such coverage is an alternative to coverage without

such limitations. If this form is signed by a

named insured, applicant, or lessee, it is

conclusively presumed that there was an informed,

knowing acceptance of such limitations, and neither

the insurance company nor the insurance agent has

any liability to the insured for the insured's

failure to purchase stackable coverage. When the

named insured, applicant, or lessee has initially

accepted such limitations, the acceptance applies

to any policy which renews, extends, changes,

supersedes, reinstates or replaces an existing

policy unless the named insured requests deletion

of the limitations and pays the appropriate premium

for the coverage. Any insurer who provides

coverage which includes the limitations provided in

this subsection shall file revised premium rates

with the Department of Insurance for such uninsured

motorist coverage to take effect before initially

providing such coverage. The revised rates must

reflect the anticipated reduction in loss costs

attributable to such limitations but, in any event,

must reflect a reduction in the uninsured motorist

coverage premium of at least fifteen percent for

policies with such limitations. Insurers shall

<#PAGE>file within ninety days after the effective date of

this act, revised premium rates with the Chief

Insurance Commissioner to be effective on

automobile insurance policies issued or renewed

with effective dates on or after January 1, 1993.

(D) Premium rates made by insurers for uninsured

motorist coverage must be determined and regulated

as premium rates for automobile insurance generally

are determined and regulated. The Chief Insurance

Commissioner <STRK>may prescribe</STRK> shall promulgate the

form to be used in providing uninsured motorist

coverage and <STRK>when prescribed and promulgated</STRK> no

other form may be used.

(E) No action may be brought under the uninsured

motorist provision unless copies of the pleadings

in the action establishing liability are served in

the manner provided by law upon the insurer writing

the uninsured motorist provision. The insurer has

the right to appear and defend in the name of the

uninsured motorist in any action which may affect

its liability and has thirty days after service of

process on it in which to appear. The evidence of

service upon the insurer may not be made a part of

the record.

(F) Benefits paid pursuant to this section are

subject to subrogation and assignment."

SECTION 9. Section 38-77-160 of the 1976 Code,

as last amended by Act 148 of 1989, is further

amended to read:

"Section 38-77-160. (A) Automobile <STRK>insurance

carriers</STRK> insurers shall offer on a form prescribed

by the Chief Insurance Commissioner, at the option

of the insured in accordance with Section 38-77-350

<STRK>uninsured</STRK> underinsured motorist coverage <STRK>up to the

limits of the insured's liability coverage in

addition to the mandatory coverage prescribed by

Section 38-77-150. Such carriers shall also offer,

at the option of the insured, underinsured motorist

coverage up to the limits of the insured liability

coverage to provide coverage in the event that

damages are sustained in excess of the liability

limits carried by an at fault insured or

<#PAGE>underinsured motorist. If, however, an insured or

named insured is protected by uninsured or

underinsured motorist coverage in excess of the

basic limits, the policy shall provide that the

insured or named insured is protected only to the

extent of the coverage he has on the vehicle

involved in the accident. If none of the insured's

or named insured's vehicles is involved in the

accident, coverage is available only to the extent

of coverage on any one of the vehicles with the

excess or underinsured coverage.</STRK> up to the limits

selected for the insured's liability coverage to

provide coverage in the event the insured becomes

legally entitled to collect damages from the owner

or operator of an underinsured motor vehicle, as

defined in Section 38-77-30(14). The maximum

liability of the insurer under the underinsured

motorist coverage provided is the lesser of: (1)

the difference between the limit of underinsured

motorist coverage and the amount paid or payable to

the insured by or for any person or organization

who is held legally liable for the bodily injury or

property damage, or (2) the amount of damages

sustained, but not recovered. In no event may the

liability of the insurer under such coverage be

more than the limits of underinsured motorist

coverage provided.

(B) An insured entitled to benefits under an

uninsured motorist provision is not entitled to

benefits under an underinsured motorist provision;

and an insured entitled to benefits under an

uninsured motorist provision of the same policy

which includes the underinsured motorist provision.

(C) Regardless of the number of vehicles

involved, persons covered, claims made, number of

premiums paid, or vehicles or premiums shown on the

policy or policies under which the insured might

otherwise be entitled to benefits , in no event may

the limit of liability for underinsured motorist

coverage for two or more vehicles insured under the

same or different policies be added together,

combined with, or stacked to determine the limit of

insurance coverage available to an injured person

for any one accident.

<#PAGE> (D) If an insured is entitled to uninsured

motorist or underinsured motorist coverage under

more than one policy the maximum amount the insured

may recover may not exceed the highest limit of

such coverage provided for any one vehicle under

any one policy. If more than one policy applies:

(1) a policy covering a motor vehicle occupied by

the injured person at the time of the accident; (2)

a policy covering a motor vehicle not involved in

the accident under which the injured person is

named insured; (3) a policy covering a motor

vehicle not involved in the accident under which

the injured person is an insured other than a named

insured. Coverage available under a lower priority

policy applies only to the extent it exceeds the

coverage of a higher priority policy. The

underinsured motorist coverage does not apply to

bodily injury, sickness, or death of an insured

while occupying a motor vehicle owned by,

furnished, or available for the regular use of the

insured, a resident spouse, or resident relative,

if such motor vehicle is not described in the

policy under which a claim is made, or is not a

newly acquired or replacement vehicle covered under

the terms of the policy.

(E) Underinsured motorist <STRK>Benefits</STRK> benefits paid

pursuant to this section are <STRK>not</STRK> subject to

subrogation and assignment.

(F) No action may be brought under the

underinsured motorist provision unless copies of

the pleadings in the action establishing liability

are served in the manner provided by law upon the

insurer writing the underinsured motorist

provision. The insurer has the right to appear and

defend in the name of the underinsured motorist in

any action which may affect its liability and has

thirty days after service of process on it in which

to appear. The evidence of service upon the

insurer may not be made a part of the record. In

the event the automobile insurance insurer for the

putative at-fault insured chooses to settle in part

the claims against its insured by payment of its

applicable liability limits on behalf of its

insured, the underinsured motorist insurer may

<#PAGE>assume control of the defense of action for its own

benefit. No underinsured motorist policy may

contain a clause requiring the insurer's consent to

settlement with the at-fault party.

Insurers offering uninsured motorist coverage

must file with the commissioner no more than ninety

days after the effective date of this act revised

premium rates for this coverage to be effective on

all policies of automobile insurance containing

such coverage issued on or renewed with effective

dates on or after January 1, 1993. The revised

rate must be approved by the commissioner and

reflect a reduction in the currently approved

premium rate for this coverage of at least eighteen

percent; provided, however, that after December 31,

1993, an insurer may apply to the Chief Insurance

Commissioner for a rate adjustment for such

coverage, based on its actual experience. In the

first year following such reductions, an insurer

may apply to the Chief Insurance Commissioner for

a rate adjustment, based on its actual experience,

and include consideration of the time value of

money."

SECTION 10. Section 56-9-350 of the 1976 Code is

amended to read:

"Section 56-9-350. The operator or owner of a

motor vehicle involved in an accident resulting in

property damage of four hundred dollars or more or

in bodily injury or death<STRK>, must be furnished a

written request form at the time of the accident,

or as soon after the accident as possible, by the

investigating officer for completion and

verification of liability insurance coverage, the

form to be in a manner prescribed by the

Department.

The completed and verified form must be returned

by the operator or owner to the Department within

fifteen days from the date the form was delivered

by the officer. Failure to return the form,

verified in the proper manner, is prima facie

evidence that the vehicle was uninsured.

<#PAGE> The operator or owner of a motor vehicle

involved in an accident resulting in property

damage of four hundred dollars or more, or in

bodily injury or death, which was not investigated

by a law enforcement officer shall furnish to the

Department a written report and verification of

liability insurance coverage, the proof to be in a

manner prescribed by the Department</STRK> within fifteen

days after the accident, shall forward a written

report of the accident to the department on a form

prescribed by the department. The report must

contain information to enable the department to

determine whether the requirements for the deposit

of security under Section 56-9-351 are inapplicable

by reason of the existence of insurance or other

exceptions specified in this title. Failure to

return the form, in the proper verified manner, is

prima facie evidence that the vehicle was not

registered in compliance with this title."

SECTION 11. Section 56-10-10 of the 1976 Code is

amended to read:

"Section 56-10-10. <STRK>Every owner of a motor

vehicle required to be registered in this State

shall maintain the security required by Section

56-10-20 with respect to each such motor vehicle

owned by him throughout the period the registration

is in effect.</STRK> Security must be maintained on every

motor vehicle required to be registered in this

State where the owner or other operator not

excluded in accordance with Section 38-77-340 and

who resides in the same household meets one of the

conditions or factors specified in Section

38-73-455 for application of the objective

standards rate. Such security must be maintained

with respect to each such motor vehicle owned by

him throughout the period the registration is in

effect. No certificate of registration may be

issued or transferred to an owner by the executive

director unless the owner or prospective owner

produces satisfactory evidence that the security is

in effect, including the name of the owner's

automobile liability insurer, the name of the

<#PAGE>agent, the identification number of the insurance

policy, and the effective dates of the policy,

except in cases where other security is approved."

SECTION 12. Section 56-10-220 of the 1976 Code

is amended to read:

"Section 56-10-220. Every person required to

provide security on a motor vehicle as provided in

Section 56-10-10 applying for registration for a

motor vehicle shall at the time of such

registration and licensing declare the vehicle to

be an insured motor vehicle under the penalty set

forth in Section 56-10-260 and shall execute and

furnish to the department his certificate that such

motor vehicle is an insured motor vehicle and that

he will maintain insurance thereon during the

registration period. The certificate must be in

the form prescribed by the department. The

department may require any registered owner or any

applicant for registration and licensing of a motor

vehicle declared to be an insured motor vehicle to

submit a certificate of insurance executed by an

authorized agent or representative of an insurance

company authorized to do business in this State.

Such certificate must also be in a form prescribed

by the department."

SECTION 13. Section 56-10-240 of the 1976 Code

is amended to read:

"Section 56-10-240. If, during the period for

which it is licensed, a motor vehicle for which

security is required as provided in Section

56-10-10 is or becomes an uninsured motor vehicle,

then the vehicle owner immediately shall obtain

insurance on the vehicle or within five days after

the effective date of cancellation or expiration of

his liability insurance policy surrender the motor

vehicle license plates and registration

certificates issued for the motor vehicle. If five

working days after the last day to pay an

automobile liability insurance premium, whether it

is the premium due date or a grace period that is

<#PAGE>granted customarily or contractually a motor

vehicle is an uninsured motor vehicle, the insurer

shall give written notice, or notice by magnetic or

electronic media in a manner considered

satisfactory to the department, within ten days

after the five-day period ends, in addition to that

notice previously given in accordance with law, by

delivery under United States Post Office bulk

certified mail, return receipt requested, to the

department of the cancellation or refusal to renew

under the following circumstances:

(1) the lapse or termination of such insurance

or security occurs within three months of issuance

provided that this subsection only applies to new

policies, and not renewal or replacement policies;

or

(2) the lapse or termination occurs after three

months for a resident who fails one or more of the

objective standards prescribed in Section

38-73-455. The department may, in its discretion,

authorize insurers to utilize alternative methods

of providing notice of cancellation of or refusal

to renew to the department. The department may not

reissue registration certificates and license

plates for that vehicle until satisfactory evidence

has been filed by the owner or by the insurer who

gave the cancellation or refusal to renew notice to

the department that the vehicle is insured. Upon

receiving information to the effect that a policy

is canceled or otherwise terminated on a motor

vehicle registered in South Carolina, the

department shall suspend the license plates and

registration certificate and shall initiate action

as required within fifteen days of the notice of

cancellation to pick up the license plates and

registration certificate. A person who has had his

license plates and registration certificate

suspended by the department, but who at the time of

suspension possesses liability insurance coverage

sufficient to meet the financial responsibility

requirements as set forth in this chapter, has the

right to appeal the suspension immediately to the

Chief Insurance Commissioner. If the commissioner

determines that the person has sufficient liability

<#PAGE>insurance coverage, he shall notify the department,

and the suspension is voided immediately. The

department shall give notice by first class mail of

the cancellation or suspension of registration

privileges to the vehicle owner at his last known

address. However, when license plates are

surrendered pursuant to this section, they must be

held at the department office in the county where

the person who surrenders the plates resides.

If the vehicle owner unlawfully refuses to

surrender the suspended items as required in this

article, the department through its designated

agents or by request to a county or municipal law

enforcement agency may take possession of the

suspended license plates and registration

certificate and may not reissue the registration

until proper proof of liability insurance coverage

is provided and until the owner has paid a

reinstatement fee of two hundred dollars for the

first refusal under this section, and three hundred

dollars for each subsequent refusal. A person who

voluntarily surrenders his license plates and

registration certificate before their suspension

shall only be charged a reinstatement fee of five

dollars.

A person wilfully failing to return his motor

vehicle license plates and registration

certificates as required in this section is guilty

of a misdemeanor and, upon conviction, must be

punished as follows:

(1) for a first offense, fined not less than one

hundred dollars nor more than two hundred dollars

or imprisoned for thirty days;

(2) for a second offense, fined two hundred

dollars or imprisoned for thirty days, or both;

(3) for a third and subsequent offense,

imprisoned for not less than forty-five days nor

more than six months.

Only convictions which occurred within ten years

including and immediately preceding the date of the

last conviction constitute prior convictions within

the meaning of this section."

<#PAGE>SECTION 14. Chapter 10, Title 56 of the 1976

Code is amended by adding:

Section 56-10-510. As used in this chapter:

(1) `Conviction' includes the entry of any plea

of guilty or nolo contendere and the forfeiture of

any bail or collateral deposited to secure a

defendant's appearance.

(2) `Insured motor vehicle' is a motor vehicle

as to which (a) there is bodily injury liability

insurance and property damage liability insurance,

both in the amounts specified in Section 38-77-140,

issued by an insurer authorized to do business in

this State, (b) a bond has been given or cash or

securities delivered in lieu of the insurance, (c)

the owner has qualified as a self-insurer in

accordance with the provisions of Section 56-9-60,

or (d) the owner has at least basic personal

protection insurance as defined in Section

38-78-30(C); and

(3) `Uninsured motor vehicle' is a motor vehicle

required to be registered as to which (a) there is

no bodily injury liability insurance and property

damage liability insurance, (b) no bond has been

given or cash or securities delivered in lieu

thereof, (c) the owner has not qualified as a

self-insurer, or (d) there is no basic or added

personal protection insurance as defined in Section

38-78-30.

Section 56-10-520. In addition to any other fees

prescribed by law, every person registering and

licensing an uninsured motor vehicle, as defined in

Section 56-10-510, in this State shall pay, at the

time of registering and licensing an uninsured

motor vehicle, the sum of two hundred and fifty

dollars. Credit for payment made on a motor

vehicle subsequently transferred during the same

licensing year must be applied to any motor vehicle

<#PAGE>thereafter registered by the uninsured motorist

during the same licensing year. Every person

knowingly operating an uninsured motor vehicle

pursuant to this section shall not be deemed in

violation of Section 56-10-270.

Section 56-10-530. The department of Highways

and Public Transportation may require that a person

applying for licensing and registration of a motor

vehicle shall certify under the penalties set forth

in Section 56-10-610 whether or not each motor

vehicle is an insured motor vehicle as defined in

Section 56-10-510 or the department may in its

discretion require that a person (a) produce as

evidence of financial responsibility a certificate

on a form prescribed by the department of insurance

or self-insurance complying with the requirements

of Section 56-9-60, (b) has given bond or delivered

the cash or securities as provided in Sections

56-9-570 and 56-9-580, respectively, or (c) pay the

fee prescribed in Section 56-10-520.

Section 56-10-560. All funds collected by the

department under the provisions of this chapter

must be deposited to the credit of the State

Treasurer and monthly transferred to a special

deposit fund to be known as the `Uninsured

Motorists Fund' to be disbursed as provided in

Section 56-10-570 to 56-10-590.

Section 56-10-570. The fund is under the

supervision and control of the Chief Insurance

Commissioner and must be paid out, on warrants of

the Comptroller General issued on vouchers signed

by the commissioner or persons he designates, for

the purpose of defraying the costs of

administration of this article by the department

and for reducing the operating losses of the

Reinsurance Facility as provided in Section

56-10-580.

Section 56-10-580. The Chief Insurance

Commissioner annually, prior to September 30 of

<#PAGE>each year, shall make distribution from the fund as

follows:

(1) to the department, the amount certified by

it as its administrative costs and expenses for

this article. These payments may be made on a

quarterly basis.

(2) to the Reinsurance Facility to reduce the

operating losses of the Facility for the twelve

month period in which they are collected and to

reduce the recoupment charges prescribed in Section

38-77-1310 assessed to drivers with the safe driver

discount.

(3) to finance driver safety measures as

determined by the General Assembly, when the

recoupment fee is no longer necessary to pay for

losses incurred by the Facility as a result of the

phasing out of the Facility as provided for by

Section 38-77-1310.

Section 56-10-590. The Chief Insurance

Commissioner may promulgate regulations necessary

to implement the provisions of this chapter.

Section 56-10-600. A person who knowingly makes

a false certificate as to whether a motor vehicle

is an insured motor vehicle or gives to the

department false evidence that any motor vehicle

sought to be registered is insured is guilty of a

misdemeanor and, upon conviction, must be fined not

less than five hundred dollars or imprisoned for

ninety days. The department shall deny, for six

months, registration of any motor vehicle for which

a false certificate or false evidence is presented

to the effect that the vehicle is insured and shall

revoke, and may not thereafter reissue for six

months, the driver's license of a person making a

false certificate or offering false evidence as

specified in this section.

Section 56-10-610. This article does not repeal

any other provision contained in this title, but is

cumulative to such other provisions."

<#PAGE>SECTION 15. Section 38-77-110(A) of the 1976

Code, as last amended by Act 148 of 1989, is

further amended to read:

"(A) Automobile insurers other than insurers

designated and approved as specialized insurers by

the commissioner may not refuse to write or renew

automobile insurance policies for individual

private passenger automobiles if the risk qualifies

for the safe driver discount in Section

38-73-760(e) or small commercial risks. These

policies may not be canceled except for reasons

which had they existed or been known when the

policy was written would have rendered the risk not

an insurable risk. Every automobile insurance risk

constitutes an insurable risk unless the operator's

permit of the named insured has been revoked or

suspended and is at the time of application for

insurance so revoked or suspended. However, no

insurer is required to write or renew automobile

insurance on any risk if there exists a valid and

enforceable outstanding judgment secured by an

insurer, an agent, or licensed premium service

company on account of automobile insurance premiums

which the applicant or insured or any principal

operator who is a member of the named insured's

household has failed or refused to pay unless the

applicant or insured pays in advance the entire

premium for the full term of the policy sought to

be issued or renewed or the annual premium,

whichever is the lesser. No insurer is required to

write or renew private passenger automobile

insurance if the risk does not qualify for the safe

driver discount in Section 38-73-760(e). An

insurer is not precluded from effecting

cancellation of an automobile insurance policy,

either upon its own initiative or at the instance

of an agent or licensed premium service company,

because of the failure of any named insured or

principal operator to pay when due any automobile

insurance premium or any installment payment.

However, notice of cancellation for nonpayment of

premium notifies the person to whom the notice is

addressed that the notice is void and ineffective

<#PAGE>if payment of the full amount of the premium or

premium indebtedness, whichever is the greater, is

made to the insurer, agent, or licensed premium

service company named in the notice by the

otherwise effective date of cancellation. This

notice of cancellation is not considered

ineffective for being conditional, ambiguous, or

indefinite."

SECTION 16. Section 38-77-110(C) of the 1976

Code, as added by Act 148 of 1989, is amended to

read:

"(C) <STRK>With regard to any coverage not required

to be written by an insurer under the mandate to

write, no</STRK> No insurer may refuse to write or renew

such policy, coverage, or endorsement of automobile

insurance because of the race, color, creed,

national origin, <STRK>or</STRK> ancestry, or economic status of

anyone who seeks to become insured."

SECTION 17. Section 38-77-110 of the 1976 Code,

as last amended by Act 148 of 1989, is further

amended by adding:

"(D) An applicant denied coverage may request

the denying insurer to provide in writing the

reason or reasons for which the applicant has been

refused insurance by that insurer. An insurer must

respond in writing within ten days of the request."

SECTION 18. Chapter 77 of Title 38 of the 1976

Code is amended by adding:

Section 38-77-1310. (A) The Reinsurance

Facility is abolished effective October 1, 1992.

There is created the South Carolina Joint

Underwriting Association. The administration of

the phase out of the Facility is transferred to the

Joint Underwriting Association.

<#PAGE> (B) As of July 1, 1994, the Facility recoupment

charge must not be included in the rate or premium

charged by the insurers of private passenger

automobile insurance to drivers who qualify for the

safe driver discount. If any losses are incurred

as a result of the operation of the Facility, the

losses attributable to the Facility must be

distributed among insured drivers as provided in

subsection (C) until the commissioner determines

all of the losses have been accounted for, unless

provided otherwise.

(C) Consistent with subsection (B), the rate or

premium charged by insurers of private passenger

automobile insurance must include a recoupment

charge, which must be added to the appropriate rate

prescribed in Section 38-73-455 to compensate for

any remaining losses incurred by the Facility as a

result of its operation up to the effective date of

this article. The operating losses of the Facility

for a twelve-month period must be recouped in the

subsequent twelve-month period.

(1) Prior to 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. .368 multiplied by

the recoupment is to be 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)

represents R in the formula P1X +2P2X +3P3X + 4P4X

+ 5P5X + 6P6X + 7P7X + 8P8X + 9P9X + 10P10X = R.

In this formula to be utilized in determining the

Facility recoupment charge:

(a) P1 is the percentage of risks which

have one surcharge point under the Uniform Merit

Rating Plan;

<#PAGE> (b) P2 is the percentage of risks which

have two surcharge points under the Uniform Merit

Rating Plan;

(c) P3 is the percentage of risks which are

subject to a surcharge of three points under the

Uniform Merit Rating Plan;

(d) P4 is the percentage of risks which are

subject to a surcharge of four points under the

Uniform Merit Rating Plan;

(e) P5 is the percentage of risks subject

to a surcharge of five points under the Uniform

Merit Rating Plan;

(f) P6 is the percentage of risks subject

to a surcharge of six points under the Uniform

Merit Rating Plan;

(g) P7 is the percentage of risks subject

to a surcharge of seven points under the Uniform

Merit Rating Plan;

(h) P8 is the percentage of risks subject

to a surcharge of eight points under the Uniform

Merit Rating Plan;

(i) P9 is the percentage of risks subject

to a surcharge of nine points under the Uniform

Merit Rating Plan;

(j) P10 or more is the percentage of risks

subject to a surcharge of ten or more points under

the Uniform Merit Rating Plan;

(k) X 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.

(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 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

<#PAGE>Plan is calculated by multiplying X 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 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 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 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 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 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 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 by a

factor of nine.

<#PAGE> (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 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 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, 1992. However, insurers

unable to comply with the provisions of this

section and renewal provisions required by law may

comply with the provisions of this section at any

time after June 30, 1992, but in no event later

than October 1, 1992.

Section 38-77-1330. As used in this article:

(1) `Association' means the South Carolina Joint

Underwriting Association established pursuant to

this article.

(2) `Net direct premiums' means gross direct

premiums written on automobile liability insurance

as computed by the Chief Insurance Commissioner

less return premiums or the unused or unabsorbed

portions of premium deposits.

Section 38-77-1340. (A) A joint underwriting

association is created consisting of all automobile

insurers licensed to write within this State

automobile insurance policies. Every such insurer

is and must remain a member of the association as

a condition of its authority to continue to

transact this kind of insurance in this State.

(B) The purpose of the association is to provide

automobile insurance on a self-supporting basis to

the fullest extent possible.

<#PAGE> Section 38-77-1350. The association has the

power on behalf of its members to make agreements

among themselves with respect to the equitable

apportionment among them of insurance which may be

afforded applicants who are in good faith entitled

to or have lost their safe driver discount, but are

unable to procure such insurance through ordinary

methods, and such insurers may agree among

themselves on the use of reasonable rate

modifications for such insurance. Such agreements

and rate modifications shall be subject to the

approval of the department.

Section 38-77-1360. (A) The department shall,

after consultation with the insurers licensed to

write automobile liability insurance in this State,

adopt a reasonable plan or plans for the equitable

apportionment among such insurers of applicants for

such insurance who are in good faith entitled to or

have lost their safe driver discount, but are

unable to, procure such insurance through ordinary

methods, and, when such plan has been adopted, all

such insurers shall subscribe thereto and shall

participate therein. Such plan or plans shall

include rules for classification of risks and rates

therefor by driver classification and territory.

Any insured placed with the plan shall be notified

of the fact that insurance coverage is being

afforded through the plan and not through the

private market, and such notification shall be

given in writing within ten days of such placement.

To assure that plan rates are made adequate to pay

claims and expenses, insurers shall develop a means

of obtaining loss and expense experience at least

annually, and the plan shall file such experience,

when available, with the department in sufficient

detail to make a determination of rate adequacy.

(B) The plan of operation shall provide for

economic, fair, and nondiscriminatory

administration and for the prompt and efficient

provision of insurance and may contain other

provisions, including, but not limited to,

preliminary assessment of all members for initial

expenses necessary to commence operations,

<#PAGE>establishment of necessary facilities, management

of the association, assessment of the members to

defray losses and expenses, commission

arrangements, reasonable and objective underwriting

standards, appointment of servicing carriers, and

procedures for determining amounts of insurance to

be provided by the association.

(C) Trend factors shall not be found to be

inappropriate if not in excess of trend factors

normally used in the development of residual market

rates by the appropriate licensed rating

organization. Each application for coverage in the

plan shall include, in boldfaced 12-point type

immediately preceding the applicant's signature,

the following statement:

`THIS INSURANCE IS BEING AFFORDED THROUGH THE

SOUTH CAROLINA JOINT UNDERWRITING ASSOCIATION AND

NOT THROUGH THE PRIVATE MARKET. PLEASE BE ADVISED

THAT COVERAGE WITH A PRIVATE INSURER MAY BE

AVAILABLE FROM ANOTHER AGENT AT A LOWER COST.

AGENT AND COMPANY LISTINGS ARE AVAILABLE IN THE

LOCAL YELLOW PAGES.'

(D) The plan of operation shall provide that any

profit achieved by the association must be added to

the reserves of the association or returned to the

policyholders as a dividend but under no

circumstances whatsoever shall any profit be paid

over to or received by an insurer either in

currency or any other benefit of any kind.

(E) Amendments to the plan of operation may be

made by the directors of the association with the

approval of the commissioner or must be made at the

direction of the commissioner after proper notice

and public hearing.

(F) The association may not write private

passenger automobile insurance with higher limits

of coverage than:

(1) two hundred fifty thousand dollars, for

bodily injury liability to one person in one

accident,

<#PAGE> (2) subject to the limit for one person, five

hundred thousand dollars because of bodily injury

to two or more persons in one accident,

(3) fifty thousand dollars because of injury

to or destruction of property of others in any one

accident,

(4) five hundred thousand dollars, combined

single limits for either or both bodily injury and

property damage,

(5) two hundred fifty thousand dollars of

added personal protection benefits or personal

protection liability limits up to the limits of the

personal protection benefits.

(G) If a driver covered by the association

maintains a driving record without a chargeable

accident or driving conviction for three

consecutive years while they are covered by the

association, the association must attempt to place

the driver with an insurer in the voluntary market.

This provision does not preclude the driver from

seeking automobile insurance coverage on the

voluntary market at any other time. If a driver

has not been able to purchase insurance on the

voluntary market after seven consecutive years of

maintaining a driving record with no chargeable

accidents or driving convictions the driver must be

placed by the association with an automobile

insurance company doing business in the voluntary

market in this State. The company must be chosen

based on its percentage of automobile insurance

business written in this State on the voluntary

market. The company may charge the driver any one

of the company's four rates according to driver

classification and territory. A driver assigned

under this provision may not be refused insurance

until the driver fails to qualify for the safe

driver discount.

Section 38-77-1370. The rates, rating plans,

rating rules, rating classifications, territories,

and policy forms applicable to insurance written by

the association and the statistical and experience

data relating thereto are subject to this chapter

<#PAGE>and to those provisions of Chapter 73 of Title 38

which are not inconsistent with this chapter.

Section 38-77-1380. The commissioner shall

obtain complete statistical data in respect to

automobile insurance losses and reparation costs as

well as all other costs or expenses which underlie

or are related to automobile insurance. The

commissioner shall promulgate any statistical plan

he considers necessary for the purpose of gathering

data referable to loss and loss adjustment expense

experience and other expense experience. When the

statistical plan is promulgated, the association

shall adopt and use it.

Section 38-77-1390. In structuring rates and

determining the profit or loss of the association

in respect to such insurance, consideration must be

given by the commissioner to all investment income

so that investment income is a part of the

ratemaking and ratesetting process.

Section 38-77-1395. No later than sixty days

after the passage of this act, the board must file

with the commissioner rates for personal protection

policies as defined by Section 38-78-30 and rates

for private passenger automobile insurance

liability coverages, uninsured motorist coverages,

and underinsured motorist coverages. All of these

rates are subject to surcharges or discounts, if

any, applicable under any approved Merit Rating

Plan, credit, or discount plan promulgated or

approved by the commissioner. The board must file:

(1) a standard rate by driver classification and

territory twenty percent less than the substandard

rate defined in (2). This rate applies to all

private passenger automobile insurance risks which

qualify for the safe driver discount and are

insured directly by or ceded to the association;

and

(2) a `substandard' rate by driver

classification and territory which applies to all

private passenger automobile insurance risks which

<#PAGE>do not qualify for the safe driver discount and are

insured directly by or ceded to the association.

These two rates must be construed so that when

the experience generated by them is combined, the

association is able to provide private passenger

automobile insurance on a self-supporting basis.

Upon the approval of these rates, they must be

utilized for all private passenger automobile

insurance risks either ceded to or insured directly

by the association. The association must submit

policy forms, rating plans, and rating rules

applicable to insurance to be written by the

association to the commissioner for his approval.

Section 38-77-1400. The premium rate charged

for coverage must be at rates established on an

actuarially sound basis, including consideration of

trends in the frequency and severity of losses and

must be calculated to be self-supporting.

Section 38-77-1410. The association may provide

a rate increase or assessment subject to the

commissioner's approval.

Section 38-77-1420. Any deficit sustained by

the association in any year must be recouped,

pursuant to the plan of operation and the rating

plan then in effect, by one or both of the

following procedures:

(1) an assessment upon the policyholders, which

may not exceed one additional annual premium at the

then current rate;

(2) a rate increase applicable prospectively.

Section 38-77-1430. After the initial year of

operation, rates, rating plans, and rating rules

and any provision for recoupment through

policyholder assessment or premium rate increase

must be based upon the association's loss and

expense experience and investment income, together

with any other information based upon this

experience and income as the commissioner considers

appropriate. The resultant premium rates must be

<#PAGE>on an actuarially sound basis and must be

calculated to be self-supporting.

If sufficient funds are not available for the

sound financial operation of the association,

pending recoupment as provided in Section

38-77-1420, all members, on a temporary basis,

shall contribute to the financial requirements of

the association in the manner provided for in

Section 38-77-1440. Any such contribution must be

reimbursed to the members following recoupment as

provided in Section 38-77-1420.

Section 38-77-1440. All insurers which are

members of the association shall participate in its

writings, expenses, and losses in the proportion

that the net direct premiums of each member,

excluding that portion of premiums attributable to

the operation of the association, written during

the preceding calendar year bear to the aggregate

net direct premiums written in this State by all

members of the association. Each insurer's

participation in the association must be determined

annually on the basis of the net direct premiums

written during the preceding calendar year, as

reported in the annual statements and other reports

filed by the insurer with the commissioner. No

member may be obligated in any one year to

reimburse the association because of its

proportionate share in the deficit from operations

of the association in that year in excess of one

percent of its surplus to policyholders and the

aggregate amount not so reimbursed must be

reallocated among the remaining members in

accordance with the method of determining

participation prescribed in this section after

excluding from the computation the total net direct

premiums of all members not sharing in the excess

deficit. If the deficit from operations allocated

to all members of the association in any calendar

year exceeds one percent of their respective

surplus to policyholders, the amount of the deficit

must be allocated to each member in accordance with

the method of determining participation prescribed

in this section.

<#PAGE> Section 38-77-1450. Every member of the

association is bound by the approved plan of

operation of the association and the rules of the

board of directors of the association.

Section 38-77-1460. (A) If the authority of an

insurer to transact automobile insurance in this

State terminates for any reason, its obligations as

a member of the association continue until all its

obligations are fulfilled and the commissioner has

so found and certified to the board of directors.

(B) If a member insurer merges into or

consolidates with another insurer authorized to

transact insurance in this State or another insurer

authorized to transact insurance in this State has

reinsured the insurer's entire automobile insurance

business in this State, both the insurer and its

successor or assuming reinsurer, as the case may

be, are liable for the insurer's obligations to the

association.

(C) Any unsatisfied net liability of any

insolvent member of the association must be assumed

by and apportioned among the remaining members in

the same manner in which assessments or gain and

loss are apportioned and the association shall

acquire and have all rights and remedies allowed by

law in behalf of the remaining members against the

estate or funds of the insolvent insurer for funds

due the association.

Section 38-77-1470. The joint underwriting

association is governed by a board of seven

directors, one of whom is appointed by the Governor

to represent the general public and four of whom

are appointed by the Governor and represent

automobile insurers who are members of the

association. Two directors, appointed by the

Governor, are agents authorized to represent

automobile insurers licensed to do business in this

State.

The approved plan of operation of the

association may make provision for combining

insurers under common ownership or management into

groups for voting, assessment, and all other

<#PAGE>purposes and may provide that not more than one of

the officers or employees of such a group may serve

as a director at any one time. The board of

directors shall elect a chairman by majority vote

and he, or his designee, must preside at all

meetings of the board.

Section 38-77-1480. Any applicant for insurance

through the association or any insurer adversely

affected, or claiming to be adversely affected, by

any ruling, action, or decision by or on behalf of

the association, may appeal to the commissioner

within thirty days after the ruling, action, or

decision.

Section 38-77-1490. The association shall file

in the office of the commissioner annually by March

first a statement containing information with

respect to its transactions, condition, operations,

and affairs during the preceding year. The

statement shall contain information prescribed by

the commissioner and must be in the form he

directs.

The commissioner, at any reasonable time, may

require the association to furnish additional

information concerning its transactions, condition,

or any matter connected therewith considered to be

material and of assistance in evaluating the scope,

operations, and experience of the association.

Section 38-77-1500. The commissioner shall make

an examination into the financial condition and

affairs of the association at least annually and

shall file a report thereon with the Commission,

the Governor, and the General Assembly. The

expenses of the examination must be paid by the

association."

SECTION 19. Section 38-73-455 of the 1976 Code, as

last amended by Act 113 of 1991, is further amended

to read:

"Section 38-73-455. (A) An automobile insurer

shall offer <STRK>two</STRK> four different rates for

<#PAGE>automobile insurance<STRK>, a base rate as defined in

Section 38-73-457 and an objective standards rate

which is twenty-five percent above the base rate</STRK>.

<STRK>Both</STRK> All of these rates are subject to all

surcharges or discounts, if any, applicable under

any approved merit rating plan, credit, or discount

plan promulgated or approved by the commissioner.

(B) No later than ninety days after the passage

of this act, insurers of automobile insurance must

file with the commissioner rates for personal

protection policies as defined by Section 38-78-30

and revised rates for all other private passenger

automobile insurance policies written by them.

Each insurer must file:

(1) a `preferred' rate by driver

classification and territory, which is a rate

less than the standard rate defined herein. This

rate applies to all private passenger automobile

insurance risks which qualify for the safe driver

discount; and

(2) a `standard' rate which must be the

approved base rate as defined in Section 38-73-457,

by driver classification and territory in effect on

July 1, 1992. This rate applies to all private

passenger automobile insurance risks which qualify

for the safe driver discount; and

(3) a `nonpreferred' rate by driver

classification and territory, which is a rate more

than the standard rate but less than the rate by

driver classification and territory for the

substandard rate and is applicable to private

passenger automobile insurance risks which do not

qualify for the safe driver discount and which do

qualify for the safe driver discount; and

(4) a `substandard' rate by driver

classification and territory, which is a rate more

than the nonpreferred rate but less than or equal

to the substandard rate by driver classification

and territory for the South Carolina Joint

Underwriting Association, as provided for in

Article 13 of Chapter 77 of Title 38, and is

applicable to private passenger automobile risks

which do not qualify for the safe driver discount

and which do qualify for the safe driver discount.

<#PAGE> (C) The commissioner must approve the rates

filed pursuant to subsection (A). If the rates are

approved, the rates shall become effective for all

policies of automobile insurance issued or renewed

with effective dates on or after January 1, 1993.

(D) Insurers may place any automobile insurance

risk at any of the four rate levels without

restriction unless provided otherwise in this

chapter. However, the Uniform Merit Rating Plan

must continue to apply to all risks written by

them.

(E) An applicant and all operators of the

insured automobile who qualify for the safe driver

discount and who reside in the same household that

have had no chargeable accidents or driving

convictions in the last seven years, and the

automobile or the automobile it replaced has been

insured for liability or personal protection

coverage for the past twelve months must be written

at the preferred rate and may not be ceded to the

Joint Underwriting Association.

(F) All policies of automobile insurance issued

or renewed with effective dates on or after January

1, 1993, that are written by automobile insurers

designated pursuant to Section 38-77-590(A), for

risks written by them through producers designated

pursuant to that same section, and all policies

ceded to the Facility by automobile insurers must

be written at the rates provided for in Section

38-77-1395. However, the Uniform Merit Rating Plan

must apply to all such risks.

(G) The Board of Directors of the association

must file rates by driver classification and

territory for both the personal protection policies

as defined by Section 38-78-30, liability

coverages, and uninsured motorist coverage.

<STRK>Applicants, or a current policyholder, seeking

automobile insurance with an insurer must be

written at the base rate, unless one of the

conditions or factors in subitems (1) through (8)

of item (A) is present.</STRK>

<STRK>(A) The named insured or any operator who is

not excluded in accordance with Section 37-77-340

and who resides in the same household or

<#PAGE>customarily operates an automobile insured under

the same policy, individually:

(1) has obtained a policy of automobile

insurance or continuation thereof through material

misrepresentation within the preceding thirty-six

months; or

(2) has had convictions for driving

violations on three or more separate occasions

within the thirty-six months immediately preceding

the effective date of coverage as reflected by the

motor vehicle record of each insured driver as

maintained by the Department of Highways and Public

Transportation; or

(3) has had two or more `chargeable'

accidents within the thirty-six months immediately

preceding the effective date of coverage. A

`chargeable' accident is defined as one resulting

in bodily injury to any person in excess of three

hundred dollars per person, death, or damage to the

property of the insured or other person in excess

of seven hundred fifty dollars. Accidents

occurring under the circumstances enumerated below

are not considered chargeable.

(a) The automobile was lawfully parked. An

automobile rolling from a parked position is not

considered as lawfully parked but is considered as

operated by the last operator.

(b) The applicant or other operator or

owner was reimbursed by or on behalf of a person

responsible for the accident or has a judgment

against this person.

(c) The automobile of an applicant or other

operator was struck in the rear by another vehicle

and the applicant or other operator has not been

convicted of a moving traffic violation in

connection with the accident.

(d) The operator of the other automobile

involved in the accident was convicted of a moving

traffic violation and the applicant or other

operator was not convicted of a moving traffic

violation in connection therewith.

(e) An automobile operated by the applicant

or other operator is damaged as a result of contact

with a `hit and run' driver, if the applicant or

<#PAGE>other operator so reports the accident to the

proper authority within twenty-four hours or, if

the person is injured, as soon as the person is

physically able to do so.

(f) Accidents involving damage by contact

with animals or fowl.

(g) Accidents involving physical damage,

limited to an caused by flying gravel, missiles, or

falling objects.

(h) Accidents occurring as a result of the

operation of any automobile in response to an

emergency if the operator at the time of the

accident was responding to a call of duty as a paid

or volunteer member of any police or fire

department, first aid squad, or any law enforcement

agency. This exception does not include an

accident occurring after the emergency situation

ceases or after the private passenger motor vehicle

ceases to be used in response to the emergency; or

(4) has had one `chargeable' accident and two

convictions for driving violations, all occurring

on separate occasions, within the thirty-six months

immediately preceding the effective date of

coverage as reflected by the motor vehicle record

of each insured driver as maintained by the

Department of Highways and Public Transportation;

or

(5) has been convicted of or forfeited bail

during the thirty-six months immediately preceding

the effective date of coverage for operating a

motor vehicle while in an intoxicated condition or

while under the influence of drugs; or

(6) has been convicted or forfeited bail

during the thirty-six months immediately preceding

the effective date for:

(a) any felony involving the use of a motor

vehicle,

(b) criminal negligence resulting in death,

homicide, or assault arising out of the operation

of a motor vehicle,

(c) leaving the scene of an accident

without stopping to report,

(d) theft or unlawful taking of a motor

vehicle,

<#PAGE> (e) operating during a period of revocation

or suspension of registration or license,

(f) Knowingly permitting an unlicensed

person to drive,

(g) reckless driving,

(h) the making of material false statements

in the application for licenses or registration,

(i) impersonating an applicant for license

or registration or procuring a license or

registration through impersonation, whether for

himself or another,

(j) filing of a false or fraudulent claim

or knowingly aiding or abetting another in the

presentation of such a claim,

(k) failure to stop a motor vehicle when

signaled by means or a siren or flashing light by

a law enforcement vehicle; or

(7) has for thirty or more consecutive days

during the twelve months immediately preceding the

effective date of coverage, owned or operated the

automobile to be insured (or if newly acquired, the

automobile it replaces) without liability coverage

in violation of the laws of this State; or

(8) has used the insured automobile as

follows or if the insured automobile is:

(a) used in carrying passengers for hire or

compensation, except that the use of an automobile

for a car pool must not be considered use of an

automobile for hire or compensation,

(b) used in the business of transportation

of flammables or explosives,

(c) used in illegal operation, or

(d) no longer principally used and garaged

within the State, but not to include students who

are operating a motor vehicle registered in this

State while attending an institution located in

another state.

(B) In the event that one or more of the

conditions or factors prescribed in items (1)

through (8) of subsection (A) exist, the motor

vehicle customarily operated by that individual

must be written at the objective standards rate.

(C)</STRK> (H) Member companies of an affiliated group

of automobile insurers may <STRK>not</STRK> utilize different

<#PAGE>filed rates for automobile insurance coverages

<STRK>which they are mandated by law to write</STRK>. For the

purpose of this section, an affiliated group of

automobile insurers includes a group of automobile

insurers under common ownership, management, or

control. <STRK>Those automobile insurers designated

pursuant to Section 38-77-590(a), for automobile

insurance risks written by them through producers

designated by the Facility governing board pursuant

to that section, shall utilize the rates or premium

charges by coverage filed and authorized for use by

the rating organization licensed by the

Commissioner pursuant to Article 11, Chapter 73 of

this title, which has the largest number of members

or subscribers for automobile insurance rates.

However, those automobile insurers designated

pursuant to Section 38-77-590(a) are not required

to use those same rates or premium charges

described in the preceding sentence for risks

written by them through their authorized agents not

appointed pursuant to Section 38-77-590.</STRK>

<STRK>(D)</STRK> (I) <STRK>An automobile insurance policy may be

endorsed at any time during the policy period to

reflect the correct rate or premium applicable by

reason of the factors or conditions described in

subsection (A) which existed prior to the

commencement of the policy period in which the

endorsement is made, regardless of whether the

factors or conditions were known or disclosed to

the insurer at the commencement of the policy

period. However, no</STRK> No policy may be endorsed

during a policy period to reflect factors or

conditions occurring during that policy period. A

policy may be endorsed during a policy period to

recognize the addition or deletion of an operator

or vehicle.

<STRK>(E) For purposes of determining the applicable

rates to be charged an insured, an automobile

insurer shall obtain and review an applicant's

motor vehicle record.</STRK>"

SECTION 20. Section 38-73-760 of the 1976 Code, as

last amended by Act 148 of 1989, is further amended

by adding:

<#PAGE> "(g) No surcharge may be assessed for the

first conviction of speeding less than twenty miles

per hour if the person convicted has no chargeable

accidents or driving convictions for the previous

thee years."

SECTION 21. Section 38-57-130 of the 1976 Code is

amended to read:

"Section 38-57-130. (1) No person may make,

issue, circulate, or cause to be made, issued, or

circulated any estimate, illustration, circular

statement misrepresenting the terms of any policy

issued or to be issued, the benefits or advantages

promised thereby, or the dividends or share of the

surplus to be received thereon.

(2) No person may make any false or misleading

statement as to the dividends or share of surplus

previously paid on similar policies.

(3) No person may pay, allow or give or offer to

pay, allow or give, directly or indirectly, as

inducement to the purchase or the renewal of an

insurance contract except for a private passenger

automobile insurance contract, any rebate or

premiums payable on the contract, any special favor

or advantage in any benefits payable thereon, or

any valuable consideration or inducement that is

not specified in the contract."

SECTION 22. Section 56-10-270 of the 1976 Code is

amended to read:

"Section 56-10-270. (a) Any person knowingly

operating an uninsured motor vehicle subject to

registration in this State or any person knowingly

allowing the operation of an uninsured motor

vehicle subject to registration in this State is

guilty of a misdemeanor and, upon conviction, must

be punished as follows:

(1) for a first offense, fined not less than

<STRK>one</STRK> two hundred dollars nor more than <STRK>two</STRK> three

hundred dollars or imprisoned for thirty days or

may be ordered to perform up to fifty public

service hours, or a combination of these, and,

<#PAGE> (2) upon conviction of a second offense, be

fined <STRK>two</STRK> three hundred dollars or imprisoned for

thirty days or perform up to one hundred public

service hours, or a combination of these, <STRK>or both,</STRK>

and

(3) for a third and subsequent offenses must

be imprisoned for not less than forty-five days nor

more than six months and be fined up to four

hundred dollars or serve up to two hundred public

service hours, or a combination of these. Only

convictions which occurred within five years

including and immediately preceding the date of the

last conviction constitute prior convictions within

the meaning of this section. An uninsured motor

vehicle includes an insured vehicle with respect to

which the operator has been excluded from coverage

pursuant to the provisions of Section 38-77-340.

(b) The department upon receipt of information

to the effect that any person has been convicted of

violating subsection (a) of this section shall

suspend the driving privilege and all license

plates and registration certificates issued in the

person's name for a period of thirty days for a

first offense, for a period of ninety days for a

second offense, and for a period of six months for

a third and each subsequent offense. <STRK>and may not

reinstate that</STRK> The person's privileges may not be

reinstated until proof of financial responsibility

has been filed.

(c) Any person whose license plates and

registration certificates which are suspended as

provided in this section, which are not suspended

for any other reason, may have them immediately

restored, if he files proof of financial

responsibility with the department."

SECTION 23. The 1976 Code is amended by adding:

"Section 38-77-116. Upon issuance of a new

private passenger automobile insurance policy, the

insurance company or agent must review with the new

applicant a list of driving offenses and the

related fine and punishment, as well as the

possible increase in the base rate, the effect of

<#PAGE>any surcharges, or the effect of the loss of the

safe driver discount. This list must be on a form

approved by the Chief Insurance Commissioner and

must accompany the policy."

SECTION 24. After September 30, 1992, the

governing board of the Joint Underwriting

Association, enacted pursuant to Article 13 of

Chapter 77 of Title 38 of the 1976 Code as

contained in this act, shall contract with one or

more insurers or business entities to serve as the

designated carrier and shall establish a procedure

for the selection of the designated carrier. In

developing this procedure, the board must establish

criteria which will assure the designated carrier's

ability to adequately provide policy-writing and

claims service. However, the board may not require

that the designated carrier be a licensed insurance

company. Designated carrier contracts must be for

a period of three years and must be awarded upon

the terms and conditions for competitive sealed

bidding as provided in Section 11-35-1520 of the

1976 Code.

If the designated carrier fails two claims

audits, including a re-audit, within the contract

term, the designated carrier is disqualified for

renewal of its contract with the Facility upon

expiration of its existing contract. Designated

carrier contracts awarded pursuant to this section

must provide that the failure of two claims audits,

including a re-audit, during the contract term

constitutes a material breach of the contract.

After July 1, 1992, the governing board of the

association may not designate any new producers.

No designated producer may receive a commission

higher than five percent on a policy ceded to the

association. Agents or producers other than

designated producers may not receive a commission

higher than five percent on a policy written

directly by the association.

SECTION 25. The 1976 Code is amended by adding:

<#PAGE> "Section 38-77-175. (A) When the operator or

owner of a motor vehicle is issued a traffic ticket

for a moving violation by a law enforcement

officer, he must be furnished a written request

form to complete to verify liability insurance

coverage. The form must be in a manner prescribed

by regulation of the Department of Highways and

Public Transportation.

(B) The completed and verified form must be

returned by the operator or owner to the department

within fifteen days from the date he receives it.

Failure to return the form verified in the proper

manner is prima facie evidence that the vehicle was

uninsured.

(C) Any fine collected for a violation of

Section 56-10-270, relating to driving uninsured,

as a result of this section must be deposited in

the treasury of the municipality or the county

employing the law enforcement officer who issued

the original ticket, if such law enforcement

officer is a municipal or county employee, or in

the general fund of the State, if the law

enforcement officer who issued the original ticket

is an employee of a state agency or department."

SECTION 26. The 1976 Code is amended by adding:

"Section 56-7-12. (A) When the operator or

owner of a motor vehicle is issued a traffic ticket

for a moving violation by a law enforcement

officer, he must be furnished a written request

form to complete to verify liability insurance

coverage. The form must be in a manner prescribed

by regulation of the Department of Highways and

Public Transportation.

(B) The completed and verified form must be

returned by the operator or owner to the department

within fifteen days from the date he receives it.

Failure to return the form verified in the proper

manner is prima facie evidence that the vehicle was

uninsured.

(C) Any fine collected for a violation of

Section 56-10-270, relating to driving uninsured,

as a result of this section must be deposited in

<#PAGE>the treasury of the municipality or the county

employing the law enforcement officer who issued

the original ticket, if such law enforcement

officer is a municipal or county employee, or in

the general fund of the State, if the law

enforcement officer who issued the original ticket

is an employee of a state agency or department."

SECTION 27. Article 5 of Chapter 77 of Title 38

of the 1976 Code is repealed.

SECTION 28. If any provision of the act or the

application thereof to any person or circumstance

is held to be unconstitutional or otherwise

invalid, the remainder of this act and the

application of such provision to other persons or

circumstances are not affected thereby, and it is

to be conclusively presumed that the legislature

would have enacted the remainder of this act

without such invalid or unconstitutional provision,

except that if Section 38-78-110 or Section

38-78-120 is found to be unconstitutional or

invalid it is to be conclusively presumed that the

legislature would not have enacted the remainder of

this act without such limitations, and the entire

act is invalid. If Section 38-78-110 is found to

be unconstitutional or invalid, personal protection

insurers have no obligation to pay personal

protection benefits with respect to accidents

occurring on or after the date of the finding of

such unconstitutionality or invalidity and, in

addition, are subrogated to all of the rights of

personal protection insureds for all previous such

benefits paid.

SECTION 29. Except as otherwise specifically

provided herein, this act takes effect upon

approval by the Governor.