S*0707(Rat #0179, Act #0113 of 1991)  General Bill, By 
Senate Banking and Insurance
 A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
 38-73-1425 so as to provide for the final rate or premium charge for a private
 passenger automobile insurance risk ceded to the Reinsurance Facility; to
 amend Section 38-73-455, relating to automobile insurance rates, so as to
 limit the prohibition on member companies of an affiliated group of automobile
 insurers in utilizing different filed rates; to amend Section 38-77-280, as
 amended, relating to automobile collision and comprehensive coverage, so as to
 authorize the refusal to write certain coverage; and to amend Section
 38-77-950, as amended, relating to use of the Reinsurance Facility by an
 insurer, so as to require notice to policyholders of certain risks ceded to
 the Facility.

   02/26/91  Senate Introduced, read first time, placed on calendar
                     without reference SJ-6
   03/28/91  Senate Read second time SJ-15
   03/28/91  Senate Ordered to third reading with notice of
                     amendments SJ-15
   04/03/91  Senate Read third time and sent to House SJ-14
   04/04/91  House  Introduced and read first time HJ-7
   04/04/91  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-7
   05/01/91  House  Committee report: Favorable Labor, Commerce and
                     Industry HJ-8
   05/09/91  House  Debate adjourned until Wednesday, May 15, 1991 HJ-5
   05/15/91  House  Amended HJ-21
   05/15/91  House  Objection by Rep. Gentry & Beatty HJ-23
   05/15/91  House  Read second time HJ-23
   05/16/91  House  Objection by Rep. Kempe HJ-5
   05/16/91  House  Reconsider vote whereby read second time HJ-6
   05/16/91  House  Objection by Rep. Rogers & White HJ-13
   05/16/91  House  Objection withdrawn by Rep. White HJ-13
   05/16/91  House  Objection by Rep. D. Martin & Keyserling HJ-13
   05/22/91  House  Objection withdrawn by Rep. Gentry, Rogers &
                     Keyserlin HJ-140
   05/22/91  House  Objection by Rep. Whipper HJ-158
   05/22/91  House   Amendment reconsidered and tabled HJ-158
   05/22/91  House  Objection by Rep. J. Brown & Scott HJ-158
   05/23/91  House  Special order, set for Thursday, May 23, 1991 at
                     10:30 a.m. (Under H 4023) HJ-26
   05/23/91  House  Read second time HJ-27
   05/28/91  House  Read third time and enrolled HJ-25
   05/30/91         Ratified R 179
   06/05/91         Signed By Governor
   06/05/91         Effective date 10/01/91
   06/05/91         Act No. 113
   06/05/91         See act for exception to or explanation of
                     effective date
   07/18/91         Copies available

(R179, S707)

AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 38-73-1425 SO AS TO PROVIDE FOR THE FINAL RATE OR PREMIUM CHARGE FOR A PRIVATE PASSENGER AUTOMOBILE INSURANCE RISK CEDED TO THE REINSURANCE FACILITY; TO AMEND SECTION 38-73-455, RELATING TO AUTOMOBILE INSURANCE RATES, SO AS TO LIMIT THE PROHIBITION ON MEMBER COMPANIES OF AN AFFILIATED GROUP OF AUTOMOBILE INSURERS IN UTILIZING DIFFERENT FILED RATES; TO AMEND SECTION 38-77-280, AS AMENDED, RELATING TO AUTOMOBILE COLLISION AND COMPREHENSIVE COVERAGE, SO AS TO AUTHORIZE THE REFUSAL TO WRITE CERTAIN COVERAGE; AND TO AMEND SECTION 38-77-950, AS AMENDED, RELATING TO USE OF THE REINSURANCE FACILITY BY AN INSURER, SO AS TO REQUIRE NOTICE TO POLICYHOLDERS OF CERTAIN RISKS CEDED TO THE FACILITY.

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

Final rate or premium charge for private passenger automobile insurance risk ceded to reinsurance facility

SECTION 1. The 1976 Code is amended by adding:

"Section 38-73-1425. The final rate or premium charge for a private passenger automobile insurance risk ceded to the facility which does not qualify for the safe driver discount in Section 38-73-760(e) is the final rate or premium charge required by Section 38-73-1420 or the final rate or premium charge approved for use by the insurer, whichever is greater."

Limitation of prohibition on member insurance companies in utilizing different filed rates

SECTION 2. Section 38-73-455(C) of the 1976 Code is amended to read:

"(C) Member companies of an affiliated group of automobile insurers may not utilize different filed rates for automobile insurance coverages which they are mandated by law to write. For the purpose of this section, an affiliated group of automobile insurers includes a group of automobile insurers under common ownership, management, or control. 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."

Refusal to write certain automobile insurance coverage

SECTION 3. Section 38-77-280(B) of the 1976 Code, as last amended by Act 148 of 1989, is further amended to read:

"(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 another 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 an applicant or existing policyholder, on renewal, who has collected benefits provided under 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 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 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)."

Notice to the policyholder of a risk ceded to the reinsurance facility which does not qualify for the safe driver discount

SECTION 4. Section 38-77-950 of the 1976 Code, as last amended by Act 148 of 1989, is further amended to read:

"Section 38-77-950. It is the intent of this chapter that the facility must not be excessively nor unreasonably utilized by automobile insurers for unfairly competitive purposes or for purposes of unfairly discriminating against certain classes or types of automobile insurance risks having the same or similar objective risk characteristics as other risks in the same class under the rating plan for the classification of risks promulgated by the department, nor for the purpose of discriminating against the risks or risks in certain rating territories. The commissioner shall prohibit unreasonable or excessive utilization of the facility.

A prima facie case of excessive or unreasonable utilization is established upon a showing that an automobile insurance insurer or a group of insurers under the same management has ceded or is about to 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.

Upon the written request of the policyholder, insurance companies doing business in this State shall give written notice to the policyholder informing him whether or not he and a driver under the policy is in the facility. Insurers shall give written notice to the policyholder of a risk ceded to the facility which does not qualify for the safe driver discount in Section 38-73-760(e)."

Total direct cedeable written premiums do not include premiums attributable to risks ceded to the reinsurance facility that do not qualify for the safe driver discount for twenty-four months after effective date of act

SECTION 5. Total direct cedeable written premiums as used in Section 38-77-950 of the 1976 Code, amended in this act, do not include premiums attributable to risks ceded to the facility that do not qualify for the safe driver discount in Section 38-73-760(e) for twenty-four months following the effective date of this act.

Time effective

SECTION 6. Upon approval by the Governor, this act takes effect October 1, 1991, except the amendment to Section 38-77-280(B) of the 1976 Code, in Section 3, which takes effect October 1, 1992. However, insurers may file rates with the Chief Insurance Commissioner before October 1, 1991, as necessary to conform to the provisions of this act.

In the Senate House May 30, 1991.

Nick A. Theodore,

President of the Senate

Robert J. Sheheen,

Speaker of the House of

Representatives

Approved the 5th day of June, 1991.

Carroll A. Campbell, Jr.,

Governor

Printer's Date -- December 10, 1997 -- S.