S 1142 Session 111 (1995-1996)
S 1142 General Bill, By Senate Banking and Insurance
Similar(S 990)
A Bill to amend Section 56-9-20, as amended, Code of Laws of South Carolina,
1976, relating to the Motor Vehicle Financial Responsibility Act and
definitions, so as to add a definition for "uninsured motorist fund".-short
title
02/14/96 Senate Introduced, read first time, placed on calendar
without reference SJ-11
03/14/96 Senate Special order SJ-17
05/29/96 Senate Read second time SJ-80
05/29/96 Senate Ordered to third reading with notice of
amendments SJ-80
Indicates Matter Stricken
Indicates New Matter
INTRODUCED
February 14, 1996
S. 1142
Introduced by Banking and Insurance Committee
S. Printed 2/14/96--S.
Read the first time February 14, 1996.
A BILL
TO AMEND SECTION 56-9-20, AS AMENDED, CODE OF
LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE
MOTOR VEHICLE FINANCIAL RESPONSIBILITY ACT AND
DEFINITIONS, SO AS TO ADD A DEFINITION FOR
"UNINSURED MOTORIST FUND"; TO AMEND
CHAPTER 10, TITLE 56, RELATING TO MOTOR VEHICLE
REGISTRATION AND FINANCIAL SECURITY, BY ADDING
ARTICLE 5 SO AS TO PROVIDE FOR THE ESTABLISHMENT
OF AN UNINSURED MOTORIST FUND; TO AMEND SECTION
38-73-470, AS AMENDED, RELATING TO THE DISPOSITION
OF THE UNINSURED MOTORIST PREMIUM, SO AS TO
PROVIDE THAT ONE DOLLAR OF THIS YEARLY PREMIUM
IS DIRECTED TO BE PAID TO THE DEPARTMENT OF
PUBLIC SAFETY FOR THE ESTABLISHMENT OF THE
"UNINSURED ENFORCEMENT FUND"; TO AMEND
SECTION 38-73-910, AS AMENDED, RELATING TO NOTICE
OF HEARING AS A PREREQUISITE TO GRANTING OF RATE
INCREASES FOR AUTOMOBILE INSURANCE AND CERTAIN
OTHER TYPES OF INSURANCE, SO AS TO PROVIDE THAT
THE REQUIREMENT OF THIS SECTION IS ABATED UNTIL
JANUARY 1, 1998; TO AMEND THE 1976 CODE BY ADDING
SECTION 38-73-736 SO AS TO PROVIDE THAT ANY
SCHEDULE OF RATES, RATE CLASSIFICATIONS, OR
RATING PLANS FOR AUTOMOBILE INSURANCE SHALL
PROVIDE FOR AN APPROPRIATE REDUCTION IN PREMIUM
CHARGES FOR INSURED PERSONS WHO ARE FIFTY-FIVE
YEARS OF AGE AND OLDER AND WHO QUALIFY UNDER
SECTION 38-73-737; TO AMEND SECTION 38-77-10, AS
AMENDED, RELATING TO THE PURPOSES OF CHAPTER 77,
TITLE 38, ON AUTOMOBILE INSURANCE, SO AS TO,
AMONG OTHER THINGS, DELETE CERTAIN LANGUAGE
AND PROVISIONS, AND PROVIDE THAT THERE SHALL BE
AN ASSIGNED RISK PLAN, KNOWN AS THE "SOUTH
CAROLINA AUTOMOBILE INSURANCE PLAN"; TO
AMEND SECTION 38-77-30, AS AMENDED, RELATING TO
AUTOMOBILE INSURANCE AND DEFINITIONS, SO AS TO,
AMONG OTHER THINGS, DELETE CERTAIN LANGUAGE
AND PROVISIONS, AND PROVIDE A DEFINITION FOR
"CANCELLATION" OR "TO CANCEL"
AND FOR "INSTITUTIONAL SOURCE",
"INSURER-SUPPORT ORGANIZATION", AND
"POLICY OF AUTOMOBILE INSURANCE" OR
"POLICY"; TO AMEND SECTION 38-77-110, AS
AMENDED, FROM JANUARY, 1997, TO SEPTEMBER 30,
1997, RELATING TO THE REQUIREMENT THAT
AUTOMOBILE INSURERS MUST INSURE AND EXCEPTIONS,
SO AS TO PROVIDE, AMONG OTHER THINGS, THAT
AUTOMOBILE INSURERS OTHER THAN INSURERS
DESIGNATED AND APPROVED AS SPECIALIZED INSURERS
BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE
OR HIS DESIGNEE MAY NOT REFUSE TO RENEW
AUTOMOBILE INSURANCE POLICIES FOR INDIVIDUAL
PRIVATE PASSENGER AUTOMOBILES OR SMALL
COMMERCIAL RISKS EXCEPT FOR REASONS SPECIFIED IN
SECTION 38-77-123, AND TO PROVIDE THAT, AFTER
SEPTEMBER 30, 1997, SECTION 38-77-110 IS REPEALED; TO
AMEND SECTION 38-77-112, AS AMENDED, RELATING TO
AUTOMOBILE INSURANCE AND THE REQUIREMENT THAT
AN INSURANCE APPLICANT OR POLICYHOLDER MUST
HAVE A DRIVER'S LICENSE AND EXCEPTIONS, SO AS TO,
AMONG OTHER THINGS, DELETE REFERENCES TO
CERTAIN CODE SECTIONS AND PROVIDE THAT, AT THE
TIME OF APPLICATION, AN INSURER OR AN AGENT
SHALL RETAIN FOR THREE YEARS THE DRIVER'S
LICENSE NUMBERS FOR ALL APPLICANTS WHO WERE
REFUSED COVERAGE AND SHALL FURNISH THIS
INFORMATION UPON THE REQUEST OF THE DIRECTOR OF
THE DEPARTMENT OF INSURANCE OR HIS DESIGNEE; TO
AMEND SECTION 38-77-120, AS AMENDED, RELATING TO
THE REQUIREMENTS FOR NOTICE OF CANCELLATION OF
OR REFUSAL TO RENEW AN AUTOMOBILE INSURANCE
POLICY, SO AS TO PROVIDE, AMONG OTHER THINGS,
THAT THE NOTICE SHALL PROVIDE FOR THE
NOTIFICATION REQUIRED BY SECTION 38-77-390(b), THAT
THOSE NOTIFICATION REQUIREMENTS DO NOT APPLY
WHEN THE POLICY IS BEING CANCELED OR NOT
RENEWED FOR THE REASON SET FORTH IN SECTION
38-77-123(b), AND THAT THE NOTICE SHALL INFORM THE
INSURED OF HIS RIGHT TO REQUEST IN WRITING WITHIN
FIFTEEN DAYS OF THE RECEIPT OF THE NOTICE THAT
THE DIRECTOR OF THE DEPARTMENT OF INSURANCE
REVIEW THE ACTION OF THE INSURER; TO AMEND THE
1976 CODE BY ADDING SECTIONS 38-77-121, 38-77-122,
38-77-123, 38-77-124, 38-77-141, 38-77-142, 38-77-143,
38-77-151, 38-77-154, AND 38-77-155 SO AS TO ENACT
PROVISIONS PROVIDING, AMONG OTHER THINGS, THAT
ANY APPLICATION FOR THE ORIGINAL ISSUANCE OF A
POLICY OF AUTOMOBILE INSURANCE COVERING
LIABILITY ARISING OUT OF THE OWNERSHIP,
MAINTENANCE, OR USE OF A MOTOR VEHICLE DEFINED
IN SECTION 38-77-30 THAT REQUIRES THE INSURED TO
DISCLOSE INFORMATION AS TO ANY PREVIOUS
CANCELLATION OR REFUSAL TO RENEW SHALL ALSO
PERMIT THE INSURED TO OFFER OR PROVIDE A FULL
EXPLANATION OF THE REASON FOR THE CANCELLATION
OR REFUSAL TO RENEW, THAT NO INSURER OR AGENT
SHALL REFUSE TO ISSUE AN AUTOMOBILE INSURANCE
POLICY AS DEFINED IN SECTION 38-77-30 SOLELY
BECAUSE OF CERTAIN SPECIFIED FACTORS, THAT NO
INSURER OR AGENT SHALL REFUSE TO ISSUE, OR FAIL
TO RENEW, A POLICY OF MOTOR VEHICLE LIABILITY
INSURANCE SOLELY BECAUSE OF THE AGE OF THE
MOTOR VEHICLE TO BE INSURED SO LONG AS THE
VEHICLE IS LICENSED, AND THAT MONIES DISTRIBUTED
ANNUALLY FROM THE UNINSURED MOTORIST FUND
MUST BE DISTRIBUTED IN THE PROPORTION THAT EACH
INSURER'S PREMIUM INCOME FOR THE BASIC
UNINSURED MOTORISTS LIMITS COVERAGE BEARS TO
THE TOTAL PREMIUM INCOME FOR BASIC UNINSURED
MOTORISTS LIMITS COVERAGE WRITTEN IN THIS STATE
DURING THE PRECEDING YEAR; TO AMEND SECTION
38-77-140, RELATING TO AUTOMOBILE INSURANCE AND
BODILY INJURY AND PROPERTY DAMAGE LIMITS, SO AS
TO INCREASE THE MINIMUM PROPERTY DAMAGE
COVERAGE; TO AMEND SECTION 38-77-150, AS AMENDED,
RELATING TO AUTOMOBILE INSURANCE, THE
UNINSURED MOTORIST PROVISION, AND THE DEFENSE
OF AN ACTION BY AN INSURER, SO AS TO INCREASE THE
MINIMUM AMOUNT OF UNINSURED MOTORIST
COVERAGE, AND PROVIDE THAT BENEFITS PAID
PURSUANT TO THIS SECTION ARE SUBJECT TO
SUBROGATION AND ASSIGNMENT IF AN UNINSURED
MOTORIST HAS SELECTED THE "FIVE HUNDRED
DOLLAR OPTION"; TO AMEND SECTION 38-77-280, AS
AMENDED, RELATING TO AUTOMOBILE INSURANCE AND
COLLISION AND COMPREHENSIVE COVERAGES, SO AS TO
DELETE CERTAIN LANGUAGE AND PROVISIONS, AND
PROVIDE THAT ANY AUTOMOBILE INSURER MAY MAKE
COLLISION COVERAGE AND EITHER COMPREHENSIVE OR
FIRE, THEFT, AND COMBINED ADDITIONAL COVERAGE
AVAILABLE TO AN INSURED OR QUALIFIED APPLICANT
WHO REQUESTS THE COVERAGE, AND TO AMEND THE
CODE SECTION FOR THE PERIOD FROM JANUARY 1, 1997,
TO SEPTEMBER 30, 1997, BY PROVIDING AN EXCEPTION
WITH RESPECT TO THE REASONS SPECIFIED IN SECTION
38-77-123; TO AMEND SECTION 38-77-350, AS AMENDED,
RELATING TO THE FORM TO BE USED WHEN OPTIONAL
AUTOMOBILE INSURANCE COVERAGES ARE OFFERED, SO
AS TO DELETE CERTAIN PROVISIONS, INCLUDING THE
PROVISION THAT A POLICY OF AUTOMOBILE OFFERED
OR ISSUED BY A NEW SERVICING CARRIER FOR THE
SOUTH CAROLINA REINSURANCE FACILITY TO REPLACE
A POLICY PREVIOUSLY ISSUED BY A FORMER SERVICING
CARRIER AND CONTAINING THE SAME COVERAGE
LIMITS AS THE FORMER POLICY CONSTITUTES A VALID
REPLACEMENT POLICY THAT DOES NOT REQUIRE THE
NEW SERVICING CARRIER OR AGENT TO MAKE A NEW
OFFER OF COVERAGE OR TO OBTAIN A NEW
APPLICATION FROM THE INSURED; TO AMEND THE 1976
CODE BY ADDING SECTIONS 38-77-370, 38-77-380, AND
38-77-390 SO AS TO ENACT PROVISIONS PROVIDING,
AMONG OTHER THINGS, THAT, IF AN INDIVIDUAL
SUBMITS A WRITTEN REQUEST TO AN INSURER, AGENT,
OR INSURANCE-SUPPORT ORGANIZATION FOR ACCESS TO
CERTAIN RECORDED PERSONAL INFORMATION ABOUT
THE INDIVIDUAL, THE INSURER, AGENT, OR
INSURANCE-SUPPORT ORGANIZATION SHALL DO
CERTAIN SPECIFIED THINGS WITHIN THIRTY BUSINESS
DAYS FROM THE DATE THE REQUEST IS RECEIVED, THAT
AN INSURER, AGENT, OR INSURANCE-SUPPORT
ORGANIZATION SHALL DO CERTAIN SPECIFIED THINGS
WITHIN THIRTY BUSINESS DAYS FROM THE DATE OF
RECEIPT OF A WRITTEN REQUEST FROM AN INDIVIDUAL
TO CORRECT, AMEND, OR DELETE ANY RECORDED
PERSONAL INFORMATION ABOUT THE INDIVIDUAL
WITHIN ITS POSSESSION, AND THAT, IN THE EVENT OF
AN ADVERSE UNDERWRITING DECISION, THE INSURER
OR AGENT RESPONSIBLE FOR THE DECISION SHALL GIVE
A WRITTEN NOTICE IN A FORM APPROVED BY THE
DIRECTOR OF THE DEPARTMENT OF INSURANCE THAT
PROVIDES THE APPLICANT, POLICYHOLDER, OR
INDIVIDUAL PROPOSED FOR COVERAGE CERTAIN
INFORMATION; TO AMEND SECTION 38-77-530, AS
AMENDED, RELATING TO THE PLAN OF OPERATION OF
THE REINSURANCE FACILITY, SO AS TO ADD PROVISIONS
PROVIDING, AMONG OTHER THINGS, THAT THE PLAN OF
OPERATION SHALL COMMENCE RECOUPMENT OF
FACILITY ASSESSMENTS BY WAY OF A SURCHARGE ON
PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE
BUSINESS ISSUED BY A MEMBER OR THROUGH THE
FACILITY; TO AMEND SECTION 38-77-590, AS AMENDED,
RELATING TO THE REINSURANCE FACILITY AND
DESIGNATED PRODUCERS, SO AS TO DELETE CERTAIN
PROVISIONS AND TO PROVIDE THAT A PRODUCER
DESIGNATED UNDER THIS SECTION MAY NOT WRITE
NEW PRIVATE PASSENGER AND COMMERCIAL
AUTOMOBILE INSURANCE BUSINESS AFTER JANUARY 1,
1997, AND MUST NOT RENEW PRIVATE PASSENGER AND
COMMERCIAL AUTOMOBILE BUSINESS AFTER
SEPTEMBER 30, 1977, AND THAT NO POLICIES WITH AN
EFFECTIVE DATE AFTER SEPTEMBER 30, 1997, SHALL BE
ACCEPTED BY THE REINSURANCE FACILITY; TO AMEND
SECTION 38-77-595, RELATING TO CONDITIONS FOR
DESIGNATION AS A DESIGNATED PRODUCER OF AN
OTHERWISE INELIGIBLE APPLICANT, SO AS TO PROVIDE
THAT A PRODUCER DESIGNATED UNDER THIS SECTION
MAY NOT WRITE NEW PRIVATE PASSENGER AND
COMMERCIAL AUTOMOBILE INSURANCE BUSINESS
AFTER JANUARY 1, 1997, AND MUST NOT RENEW
PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE
BUSINESS AFTER SEPTEMBER 30, 1997, AND THAT NO
POLICIES WITH AN EFFECTIVE DATE AFTER SEPTEMBER
30, 1997, SHALL BE ACCEPTED BY THE REINSURANCE
FACILITY; TO AMEND CHAPTER 77, TITLE 38 OF THE 1976
CODE, RELATING TO AUTOMOBILE INSURANCE, BY
ADDING ARTICLE 8 SO AS TO ENACT PROVISIONS FOR
THE ASSIGNMENT OF RISKS; AND TO REPEAL SECTIONS
38-73-455, RELATING TO AUTOMOBILE INSURANCE
RATES, 38-73-456, RELATING TO THE PROHIBITION
AGAINST AN INCREASE IN AUTOMOBILE INSURANCE
PREMIUMS OR ADDITIONAL SURCHARGES FOR DRIVING
VIOLATIONS UNTIL THERE HAS BEEN A CONVICTION,
38-73-457, RELATING TO FILING INFORMATION ON BASE
RATES FOR AUTOMOBILE INSURANCE PURPOSES,
38-73-460, RELATING TO THE EFFECT OF GAINS AND
LOSSES INCURRED BY MEMBERS OF THE REINSURANCE
FACILITY ON AUTOMOBILE INSURANCE RATES, 38-73-465,
RELATING TO AUTOMOBILE INSURANCE AND UNFAIRLY
DISCRIMINATORY, EXCESSIVE, OR UNREASONABLE
PROFITS OR RATES, REVIEW OF RATES, AND RATE
EXPERIENCE, 38-73-720, RELATING TO THE STATE RATING
AND STATISTICAL DIVISION AND THE POWER TO
ESTABLISH RISK AND TERRITORIAL CLASSIFICATIONS,
38-73-730, RELATING TO RISK CLASSIFICATION PLANS
FOR AUTOMOBILE INSURANCE PURPOSES, 38-73-731,
RELATING TO REMOVAL FROM THE YOUTHFUL DRIVER
CLASSIFICATION, 38-73-735, RELATING TO PLANS FOR
CREDITS AND DISCOUNTS FOR AUTOMOBILE INSUREDS,
38-73-750, RELATING TO THE REQUIREMENT THAT
AUTOMOBILE INSURERS MUST FILE THEIR PLANS OR
SYSTEMS FOR ALLOCATING EXPENSES AND PROFIT AS
RESPECTS THE VARIOUS KINDS OR TYPES OF
AUTOMOBILE INSURANCE RISKS AND THE CLASSES OF
RISKS THEREUNDER, 38-73-760, RELATING TO UNIFORM
STATISTICAL PLANS FOR AUTOMOBILE INSURANCE
PURPOSES, 38-73-770, RELATING TO THE REQUIREMENT
THAT EVERY CLASSIFICATION PLAN PROMULGATED BY
THE DEPARTMENT OF INSURANCE MUST BE SO
STRUCTURED AS TO PRODUCE AUTOMOBILE INSURANCE
RATES OR PREMIUM CHARGES WHICH ARE ADEQUATE,
NOT EXCESSIVE, AND NOT UNFAIRLY DISCRIMINATORY,
38-77-111, RELATING TO AUTOMOBILE INSURANCE
POLICIES WHICH MAY BE CEDED TO THE REINSURANCE
FACILITY, 38-77-115, RELATING TO THE PROVISION THAT
CERTAIN SIGNS ARE REQUIRED IN AN INSURANCE
AGENT'S PLACE OF BUSINESS, 38-77-145, RELATING TO
THE PROVISION THAT PERSONAL INJURY PROTECTION
COVERAGE IS NOT MANDATED UNDER THE AUTOMOBILE
INSURANCE LAWS OF THIS STATE, 38-77-285, RELATING
TO THE REQUIREMENT THAT ALL AUTOMOBILE
INSURANCE COVERAGES MUST BE IN ONE POLICY,
38-77-360, RELATING TO THE PROVISION THAT THERE BE
NO INCREASE IN AUTOMOBILE INSURANCE PREMIUMS
AFTER CERTAIN FIRST OFFENSE VIOLATIONS, 38-77-600,
RELATING TO THE REINSURANCE FACILITY
RECOUPMENT CHARGE, 38-77-605, RELATING TO THE
REQUIREMENT THAT THE FACILITY RECOUPMENT
CHARGE BE DISPLAYED ON THE PREMIUM NOTICE OR
BILL, 38-77-610, RELATING TO THE FILING OF
RECOUPMENT CHARGES, 38-77-620, RELATING TO THE
REQUIREMENT THAT THE FACILITY RECOUPMENT
CHARGES APPROVED OR ESTABLISHED PURSUANT TO
SECTION 38-77-610 MUST BE ADDED TO THE APPROVED
BASE RATE AND OBJECTIVE STANDARDS RATE IN
EFFECT FOR EACH AUTOMOBILE INSURER, 38-77-625,
RELATING TO THE PROVISION THAT IF AN INSURED IS
INVOLVED IN A MOTOR VEHICLE ACCIDENT WHERE HE
IS NOT THE AT-FAULT DRIVER, HIS FACILITY
RECOUPMENT CHARGE MAY NOT BE INCREASED BY HIS
INSURER BECAUSE OF THIS OCCURRENCE, AND ARTICLE
9 OF CHAPTER 77, TITLE 38, RELATING TO THE STATE'S
AUTOMOBILE INSURANCE LAWS AND UNLAWFUL ACTS.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1.Section 56-9-20 of the 1976 Code, as last amended
by Section 1472 of Act 181 of 1993, is further amended by adding:
"(17) `Uninsured Motorist Fund' means a fund established
to collect fees from registration of uninsured vehicles."
SECTION 2. Chapter 10 of Title 56 of the 1976 Code is
amended by adding:
"Article 5
Establishment of Uninsured Motorist Fund
Section 56-10-510. In addition to any other fees prescribed by
law, every person registering an uninsured motor vehicle, as defined
in Section 56-9-20, at the time of registering or reregistering the
uninsured vehicle, shall pay a fee of five hundred dollars.
However, if the uninsured motor vehicle is being registered for a
period of less than a full year, the uninsured motor vehicle fee shall
be prorated to conform to the registration period. Every person
applying for registration of a motor vehicle and declaring it to be an
insured motor vehicle shall, under the penalties set forth in Section
56-10-520, execute and furnish to the director his certificate that the
motor vehicle is an insured motor vehicle as defined by the laws of
this State, or that the director has issued to its owner, in accordance
with Section 56-9-60, a certificate of self-insurance applicable to
the vehicle sought to be registered. The director, or his designee,
may require any registered owner of a motor vehicle declared to be
insured or any applicant for registration of a motor vehicle to be an
insured to submit a certificate of insurance on a form prescribed by
the director. The director shall forward the certificate of insurance
or bond to the insurance company or surety company, whichever is
applicable, for verification as to whether the policy or bond named
in the certificate is currently in force. At that time, and not later
than thirty days following receipt of the certificate of insurance, the
insurance company or surety company shall cause to be filed with
the director a written notice if the policy or bond was not applicable
as to the named insured. The director shall prescribe the manner in
which the written notice shall be made. The refusal or neglect of
any owner within thirty days to submit the certificate of insurance
when required by the director or his designee or the notification by
the insurance company or surety company that the policy or bond
named in the certificate of insurance is not in effect, shall require
the director to suspend any driver's license and all registration
certificates and license plates issued to the owner of the motor
vehicle until the person:
(1) has paid to the Director of the Department of Revenue and
Taxation a fee of three hundred dollars to be disposed of as
provided for in Sections 56-10-550 and 56-10-552 with respect to
the motor vehicle determined to be uninsured; and
(2) furnishes proof of financial responsibility for the future in
the manner prescribed in Section 56-10-10 et seq. of this chapter.
No order of suspension required by this section shall become
effective until the director has offered the person an opportunity for
an administrative hearing to show cause why the order should not
be enforced. Notice of the opportunity for an administrative
hearing may be included in the order of suspension. When three
years have elapsed from the effective date of the suspension
required in this section, the director may relieve the person of the
requirement of furnishing proof of future financial responsibility. If
the director determines that the fee applicable to the registration of
an uninsured motor vehicle has been paid on the vehicle in question
on or before the date that the insurance certificate was requested, no
suspension action shall be taken. The director shall suspend the
driver's license and all registration certificates and license plates of
any person on receiving a record of his conviction of a violation of
any provisions of Section 56-10-520, but the director shall dispense
with the suspension when the person is convicted for a violation of
Section 56-10-520 and the department's records show conclusively
that the motor vehicle was insured or that the fee applicable to the
registration of an uninsured motor vehicle has been paid by the
owner before the date and time of the alleged offense.
Section 56-10-520. A person who owns an uninsured motor
vehicle:
(1) licensed in the State; or
(2) subject to registration in the State;
who operates or permits the operation of that motor vehicle without
first having paid to the director the uninsured motor vehicle fee
required by Section 56-10-510, to be disposed of as provided by
Section 56-10-550, shall be guilty of a misdemeanor.
A person who is the operator of such an uninsured motor vehicle
and not the titled owner, who knows that the required fee has not
been paid to the director, shall be guilty of a misdemeanor.
The director or his designee, having reason to believe that a motor
vehicle is being operated or has been operated on any specified
date, may require the owner of such motor vehicle to submit the
certificate of insurance provided for by Section 56-10-510. The
refusal or neglect of the owner who has not, before the date of
operation, paid the uninsured motor vehicle fee required by Section
56-10-510 as to such motor vehicle, to furnish such certificate shall
be prima facie evidence that the motor vehicle was an uninsured
motor vehicle at the time of such operation. A person who presents
or causes to be presented to the director a false certificate that a
motor vehicle is an insured motor vehicle or false evidence that a
motor vehicle sought to be registered is an insured motor vehicle,
shall be guilty of a misdemeanor.
However, the foregoing portions of this section shall not be
applicable if it is established that the owner had good cause to
believe and did believe that such motor vehicle was an insured
motor vehicle, in which event the provisions of Section 56-10-245
shall be applicable.
Abstracts of records of conviction, as defined in this title, of any
violation of any of the provisions of this section shall be forwarded
to the director as prescribed by Section 56-9-330. The director
shall suspend the driver's license and all registration certificates and
license plates of any titled owner of an uninsured motor vehicle
upon receiving a record of his conviction of a violation of any
provisions of this section, and he shall not thereafter reissue the
driver's license and the registration certificates and license plates
issued in the name of such person until such person pays the fee
applicable to the registration of an uninsured motor vehicle as
prescribed in Section 56-10-510 and furnishes proof of future
financial responsibility as prescribed by Section 56-10-520 et seq.
of this chapter. However, when three years have elapsed from the
date of the suspension herein required, the director may relieve such
person of the requirement of furnishing proof of future financial
responsibility. When such suspension results from a conviction for
presenting or causing to be presented to the director a false
certificate as to whether a motor vehicle is an insured motor vehicle
or false evidence that any motor vehicle sought to be registered is
insured, then the director shall not thereafter reissue the driver's
license and the registration certificates and license plates issued in
the name of such person so convicted for a period of one hundred
eighty days from the date of such order of suspension, and only
then when all other provisions of law have been complied with by
such person. The director shall suspend the driver's license of any
person who is the operator but not the titled owner of a motor
vehicle upon receiving a record of his conviction of a violation of
any provisions of this section and he shall not thereafter reissue the
driver's license until thirty days from the date of such order of
suspension.
Section 56-10-530. When it appears to the director from the
records of his office that an uninsured motor vehicle as defined in
Section 56-9-20, subject to registration in the State, is involved in a
reportable accident in the State resulting in death, injury, or
property damage with respect to which motor vehicle the owner
thereof has not paid the uninsured motor vehicle fee as prescribed
in Section 56-10-510, the director shall, in addition to enforcing the
applicable provisions of Section 56-10-10 et seq. of this chapter,
suspend such owner's driver's license and all of his license plates
and registration certificates until such person has complied with
those provisions of law and has paid to the Director of the
Department of Revenue and Taxation a reinstatement fee as
provided by Section 56-10-510, to be disposed of as provided by
Section 56-10-550, with respect to the motor vehicle involved in the
accident and furnishes proof of future financial responsibility in the
manner prescribed in Section 56-9-350 et seq.. However, no order
of suspension required by this section shall become effective until
the director has offered the person an opportunity for an
administrative hearing to show cause why the order should not be
enforced. Notice of the opportunity for an administrative hearing
may be included in the order of suspension. However, when three
years have elapsed from the effective date of the suspension herein
required, the director may relieve such person of the requirement of
furnishing proof of future financial responsibility. The presentation
by a person subject to the provisions of this section of a certificate
of insurance, executed by an agent or representative of an insurance
company qualified to do business in this State, showing that on the
date and at the time of the accident the vehicle was an insured
motor vehicle as herein defined, or, presentation by such person of
evidence that the additional fee applicable to the registration of an
uninsured motor vehicle had been paid to the department before the
date and time of the accident, shall be sufficient bar to the
suspension provided for in this section.
Section 56-10-535. The director, upon receiving notice that a
titled owner of a motor vehicle has been convicted of one of the
following violations: disobedience of any official traffic device,
failure to stop for law enforcement officer when signaled,
disobedience to any officer directing traffic, failure to stop for a
school bus, leaving the scene of an accident where injury to person
or damage to property results, theft or unlawful taking of a vehicle,
racing on public highways, driving under the influence of
intoxicating liquor or narcotic drugs or where injury to a person of
over three hundred dollars each person or damage to property of the
insured or other person of over seven hundred fifty dollars results,
reckless driving where injury to a person of over three hundred
dollars each person or damage to property of the insured or other
person of over seven hundred fifty dollars results, homicide or
assault arising out of the operation of a motor vehicle, any felony
involving the use of a motor vehicle, the transporting of illegal
whiskey or unlawful drugs or other controlled or narcotic
substances, reckless homicide, wilful making of false statements in
the application for license or registration, impersonating an
applicant for license or registration, or procuring a license or
registration through impersonation whether for himself or another;
then shall require the owner to furnish proof of financial
responsibility in the manner prescriber in Section 56-9-350, et seq.
However, when three years have elapsed from the effective date
of any conviction for the above offenses, the director may relieve
such person of the requirement of furnishing proof of future
financial responsibility as required in Section 56-9-35, et seq.
Section 56-10-540. Whenever any proof of financial
responsibility filed by any person as required by this chapter no
longer fulfills the purpose for which required, the director shall
require other proof of financial responsibility as required by this
chapter and shall suspend such person's driver's license,
registration, certificates, and license plates and decals pending the
furnishing of proof as required.
A person whose driver's license or registration certificates, or
license plates and decals have been suspended as provided in this
chapter and have not been reinstated shall immediately return every
such license, registration certificate, and set of license plates and
decals held by him to the director. A person failing to comply with
this requirement shall be guilty of a traffic infraction and, upon
conviction, shall be punished as provided in Section 56-9-310, et
seq.
Section 56-10-550. Except as provided in Section 56-10-552,
funds collected by the Director of the Department of Revenue and
Taxation under the provisions of this chapter shall be paid into the
State Treasury and held in a special fund to be known as the
`Uninsured Motorists Fund' to be disbursed as provided by law.
The Director of the Department of Insurance as provided in
Sections 38-77-151 and 38-77-154 may expend monies from such
funds, for the administration of Title 38.
Section 56-10-551. When any insurance policy certified under
this chapter is canceled or terminated, the insurer shall report the
fact to the director within fifteen days after the cancellation on a
form prescribed by the director.
Section 56-10-552. (A) All funds collected as provided in
Section 38-73-470 shall be directed to the Director of the
Department of Public Safety for the establishment and maintenance
of a special fund, to be known as the `Uninsured Enforcement
Fund', to be used by the Department of Public Safety for the
purpose of enforcement as required by this chapter.
(B) Fifty percent of the reinstatement fee as provided by Section
56-10-510(1) shall be directed to the Department of Public Safety
and deposited into the Uninsured Enforcement Fund to be used by
the Department of Public Safety as provided by subsection (A) of
this section. The remaining fifty percent of the reinstatement fee as
provided by Section 56-10-510 shall be directed to the Uninsured
Motorist Fund to be used as provided in Sections 56-10-550,
38-77-151, and 38-77-154.
Section 56-10-553. The Department of Public Safety shall collect
data and maintain statistics on the total number of vehicles
registered in the state as of June thirtieth of each year, the number
of motorists who voluntarily paid the five hundred dollar fee at the
time of registration during the fiscal year, the number of motorists
who paid the penalty fee after being detected by the Department of
Public Safety as being uninsured during the fiscal year, the number
of certificates of insurance filed during the fiscal year, the net
revenue collections for these fees by the fiscal year, the net funds
available in the Uninsured Motorist Fund, and the net funds
received from the Department of Insurance from the uninsured
motorist fee during fiscal year."
SECTION 3. Section 38-73-470 of the 1976 Code, as last
amended by Section 787 of Act 181 of 1993, is further amended to
read:
"Section 38-73-470. One dollar of the yearly premium for
uninsured motorist coverage must be transferred is
directed to be paid to the South Carolina Department of Public
Safety for the establishment of the `Uninsured Enforcement
Fund', payable on a quarterly basis, to provide funds
for the costs of enforcing and administering the provisions of
Article 3, Chapter 10, Title 56."
SECTION 4. Section 38-73-910 of the 1976 Code, as last
amended by Section 783 of Act 181 of 1993, is further amended to
read:
"Section 38-73-910. No increase in the premium rates may
be granted for automobile, workers' compensation, fire, allied lines,
and homeowners insurance, nor for any other line or type of
insurance with respect to which the director or his designee has, by
order, made a finding that (a) legal or other compulsion upon the
part of the insured to purchase the insurance interferes with
competition, or (b) under prevailing circumstances there does not
exist substantial competition, unless notice is given in all
newspapers of general, statewide circulation at least thirty days in
advance of any hearing to consider the increase in premium rates.
The notice shall state the time and place of the hearing and the rates
that will be considered to be increased.
However, the requirements of public notices and public hearings
in this section do not apply to applications for rate increases when
the applicant insurer had earned premiums in this State in the
previous calendar year of less than five hundred thousand dollars
for the line or type of insurance for which the rate increase is
sought or, if the rate increase is sought by a rating organization, the
earned premiums in this State for all members and subscribers of
the organization for whom an increase is sought were less than five
hundred thousand dollars for the previous calendar year for the line
or type of insurance for which the rate increase is sought.
The requirement of this section is abated until January 1,
1998.
SECTION 5. The 1976 Code is amended by adding:
"Section 38-73-736. Any schedule of rates, rate
classifications, or rating plans for automobile insurance as defined
in Section 38-77-30 filed with the Department of Insurance shall
provide for an appropriate reduction in premium charges for those
insured persons who are fifty-five years of age and older and who
qualify as provided in Section 38-73-737."
SECTION 6. Section 38-77-10 of the 1976 Code, as last
amended by Section 801 of Act 181 of 1993, is further amended to
read:
"Section 38-77-10. In order to effect a complete reform
of automobile insurance and insurance practices in South Carolina,
the purposes of this chapter are to provide:
(1) To provide that every automobile insurance risk
which is insurable on the basis of the criteria established in this
chapter is entitled to automobile insurance from the automobile
insurer of the applicant's choice on the basis of the same rates,
policy forms, claims service, and other services provided by the
insurer to all other applicants or insureds falling within the
classification of risk and territory under the applicable risk and
territorial classification plan promulgated by the department so long
as all these applicants or insureds have satisfied the same objective
standards as established in Sections 38-77-280 and 38-73-455;
(2) To provide a Reinsurance Facility for automobile
insurers in which all automobile insurers must participate to the end
that the operating expenses and net profit or loss of the Facility
may be shared equitably by all the insurers transacting automobile
insurance business in this State giving appropriate consideration to
degrees of utilization of the Facility by the several insurers of
automobile insurance and to provide prohibitions or penalties in
respect to excessive utilization of the Facility. for an
assigned risk plan, known as the South Carolina Automobile
Insurance Plan, for every person who is legally entitled to
automobile insurance but has not been able to obtain a motor
vehicle liability policy to apply to the Director of the Department of
Insurance to have his risk assigned to an insurance carrier licensed
to write and writing motor vehicle liability insurance in the State
who shall issue a motor vehicle liability policy which will meet at
least the minimum requirements for establishing financial
responsibility in this chapter;
(3) To provide prohibitions and penalties in respect to
unfairly discriminatory or unfairly competitive practices having as
their purpose or effect evasion of the statutory mandate of
coverage provided in this chapter or imposing an undue or unfair
burden upon other automobile insurers through excessive utilization
of the Facility. of the coverages as provided in this chapter;
and
(4) To provide medical, surgical, funeral, and disability
insurance benefits without regard to fault to be offered under
automobile insurance policies that provide bodily injury and
property damage liability insurance, or other security, for motor
vehicles registered in this State."
SECTION 7. Section 38-77-30 of the 1976 Code, as last
amended by Section 802 of Act 181 of 1993, is further amended to
read:
"Section 38-77-30. As used in this chapter, unless the
context requires otherwise:
(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. An automobile insurance policy includes a motor vehicle
liability policy as defined in item (7) of Section 56-9-20 and any
nonowner automobile insurance policy which covers an individual
private passenger automobile not owned by the insured, a family
member of the insured, or a resident of the same household as the
insured.
(2) `Automobile insurer' means an insurer licensed to do
business in South Carolina and authorized to issue automobile
insurance policies.
(3) `Bodily injury' includes death resulting therefrom.
(3.5) `Cancellation' or `to cancel' means a termination of a
policy during the policy period.
(4) `Damages' includes both actual and punitive damages.
(5) `Facility' means the unincorporated, nonprofit, legal entity
created by this chapter to reinsure policies of automobile insurance
known as the South Carolina Reinsurance Facility.
(5.5)(a) `Individual private passenger automobile' means the
following types of motor vehicles owned by or leased under a
long-term contract by an individual or individuals:
(i) motor vehicles of the private passenger type or station
wagon type;
(ii) panel trucks, delivery sedans, vehicles with a pickup
body, vans, or similar motor vehicles designed for use on streets
and highways and so licensed; and
(iii) motor homes, so long as the motor vehicles described
in (ii) and (iii) are not used in the occupation, profession, or
business of the insured other than farming and ranching.;
and
(iv) motorcycles, motor-driven cycles, motor scooters, and
mopeds.
(b) A motor vehicle is not considered `owned by or leased
under a long-term contract by an individual or individuals' if the
motor vehicle is owned by a partnership or corporation, unless the
motor vehicle is owned by a farm family copartnership or a farm
family corporation and is garaged principally on a farm or ranch.
(c) A motor vehicle is not considered `used in the occupation,
profession, or business of the insured', because it is used in the
course of driving to and from work.
(d) Individual private passenger automobile does not include:
(i) motor vehicles that are used for public or livery
conveyance or rented to others without a driver;
(ii) fire department vehicles, police vehicles, ambulances,
and rescue squad vehicles which are publicly owned;
(iii) motorcycles, motor-driven cycles, motor
scooters, and mopeds;
(iv) dune buggies, all terrain vehicles, go carts, and
snowmobiles;
(v)(iii) golf carts; and
(vi)(iv) small commercial risks.
(6) `Institutional source' means any person or governmental
entity that provides information about an individual to an agent,
insurer, or insurance-support organization other than:
(a) an agent;
(b) the individual who is the subject of the information; or
(c) a natural person acting in a personal capacity rather than
in a business or professional capacity.
(7) `Insured' means the named insured and, while
resident of the same household, the spouse of any named insured
and relatives of either, while in a motor vehicle or otherwise, and
any person who uses with the consent, expressed or implied, of the
named insured the motor vehicle to which the policy applies and a
guest in the motor vehicle to which the policy applies or the
personal representative of any of the above.
(8) `Insurer-support organization' means any person who
regularly engages, in whole or in part, in the practice of assembling
or collecting information about natural persons for the primary
purpose of providing the information to an insurer or agent for
insurance transactions, including (i) the furnishing of consumer
reports or investigative consumer reports to an insurer or agent for
use in connection with an insurance transaction or (ii) the collection
of personal information from insurers, agents, or other
insurance-support organizations for the purpose of detecting or
preventing fraud, material misrepresentation, or material
nondisclosure in connection with insurance underwriting or
insurance claim activity. However, the following persons shall not
be considered insurance-support organizations for purposes of this
chapter: agents, governmental institutions, insurers, rating
organizations, medical care institutions, and medical
professionals.
(7)(9) `Motor vehicle' means every
self-propelled vehicle which is designed for use upon a highway,
including trailers and semitrailers designed for use with these
vehicles but excepting traction engines, road rollers, farm trailers,
tractor cranes, power shovels and well-drillers, and every vehicle
which is propelled by electric power obtained from overhead wires
but not operated upon rails. For purposes of this chapter, the term
automobile has the same meaning as motor vehicle.
(8)(10) `Nonpayment of premium' means failure
of the named insured to pay when due any of his obligations in
connection with the payment of premiums on a policy, or any
installment of the premium, whether the premium is payable
directly to the insurer or its agent or indirectly under any premium
finance plan or extension of credit, or failure to maintain
membership in an organization if membership is a condition
precedent to insurance coverage.
(10.5) `Policy of automobile insurance' or `policy' means a
policy or contract for bodily injury or property damage liability
insurance issued or delivered in this State covering liability arising
from the ownership, maintenance, or use of any motor vehicle,
insuring as the named insured one individual or husband and wife
who are residents of the same household, and under which the
insured vehicle designated in the policy is either:
(a) a motor vehicle of a private passenger, station wagon, or
motorcycle type that is not used commercially, rented to others, or
used as a public or livery conveyance where the terms `public or
livery conveyance' do not include car pools, or
(b) any other four-wheel motor vehicle which is not used in
the occupation, profession, or business, other than farming, of the
insured, or as a public or livery conveyance, or rented to others.
The term `policy of automobile insurance' or `policy' does not
include:
(i) any policy issued through the South Carolina
Automobile Insurance Plan,
(ii) any policy covering the operation of a garage, sales
agency, repair shop, service station, or public parking place,
(iii) any policy providing insurance only on an excess basis,
or
(iv) any other contract providing insurance to the named
insured even though the contract may incidentally provide insurance
on motor vehicles.
(9)(11) `Quota share reinsurance' means that
form of reinsurance in which the reinsurer assumes a fixed
percentage of the insured risk.
(10)(12) `Renewal' or `to renew' means the
issuance and delivery by an insurer of a policy superseding at the
end of the policy period a policy previously issued and delivered by
the same insurer, the renewal policy to provide types and limits of
coverage at least equal to those contained in the policy being
superseded, or the issuance and delivery of a certificate or notice
extending the terms of a policy beyond its policy period or term
with types and limits of coverage at least equal to those contained
in the policy being extended. However, any policy with a policy
period or term of less than six months or any period with no fixed
expiration date is considered as if written for successive policy
periods or terms of six months.
(11)(13) `Small commercial risk' means:
(a) Garage risks including nonmotor vehicle insurance when
written in combination with automobile liability coverage.
(b) Ambulance risks.
(c) Commercial risks which have a load capacity less than ten
thousand pounds and are not required to have a mandatory filing by
a governmental authority other than an SR-22.
(d) Church buses used by a church to transport adults or
children to and from services and in activities incidental to church
functions, so long as a mandatory filing by any governmental
authority other than an SR-22 is not required.
(e) Privately owned school buses used to carry school
children and students, their parents or guardians, members of the
faculty, school board members, nurses, doctors, and dentists, as well
as guests in connection with any school activity and operations
incidental thereto, including games, outings, and similar road trips,
so long as a mandatory filing by any governmental authority other
than an SR-22 is not required.
`Small commercial risk' does not include pulpwood trucks or
dump trucks.
(12) `Specialized insurer' means an insurer which
specializes in certain types of business such as, but without
limitation on the generality, commercial automobile business, and
which may be relieved, with the approval of the director or his
designee, of the obligation to write types of business inconsistent
with this specialty, such as private passenger automobile business.
However, no insurer may be approved as a specialized insurer or
continue to be so approved unless it accepts all insurable risks
falling within the types of business to which it confines its writings
without distinctions among applicants or policyholders as to policy
forms, terms, rates or services other than as the distinctions are
reflected in the approved rating plan for the classification of risks.
No insurer may be approved as a specialized insurer because it
specializes in or purports to specialize in select or preferred risks.
A specialized insurer may not cede risks to the Reinsurance Facility
and thus does not recoup losses of the facility. Specialized insurers
may be excused from using the merit rating plan and the uniform
classification and territorial plans upon approval by the director or
his designee.
(13)(14) `Uninsured motor vehicle' means a
motor vehicle as to which:
(a) there is not bodily injury liability insurance and property
damage liability insurance both at least in the amounts specified in
Section 38-77-140, or
(b) there is nominally that insurance, but the insurer writing
the same successfully denies coverage thereunder, or
(c) there was that insurance, but the insurer who wrote the
same is declared insolvent, or is in delinquency proceedings,
suspension, or receivership, or is proven unable fully to respond to
a judgment, and
(d) there is no bond or deposit of cash or securities in lieu of
the bodily injury and property damage liability insurance.
(e) the owner of the motor vehicle has not qualified as a
self-insurer in accordance with the applicable provisions of
law.
A motor vehicle is considered uninsured if the owner or operator
is unknown. However, recovery under the uninsured motorist
provision is subject to the conditions set forth in this chapter.
Any motor vehicle owned by the State or any of its political
subdivisions is considered an uninsured motor vehicle when the
vehicle is operated by a person without proper authorization.
(14)(15) `Underinsured motor vehicle' means a
motor vehicle as to which there is bodily injury liability insurance
or a bond applicable at the time of the accident in an amount of at
least that specified in Section 38-77-140 and the amount of the
insurance or bond is less than the amount of the insureds'
damages."
SECTION 8. From January 1, 1997 to September 30, 1997,
Section 38-77-110 of the 1976 Code, as last amended by Section
803 of Act 181 of 1993, is further amended to read:
"Section 38-77-110. (A) Automobile insurers other than
insurers designated and approved as specialized insurers by the
director or his designee may not refuse to write or renew
automobile insurance policies for individual private passenger
automobiles or small commercial risks except for reasons
specified in Section 38-77-123. 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. 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.
(B) Notwithstanding subsection (A) of this section, no insurer is
required to 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) 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, if any 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, has one or more
of the conditions or factors prescribed in Section 38-73-455(A)
existing and if an insurer, at its option, writes such a policy, the
policy may not be ceded to the Reinsurance Facility.
(C) With regard to any coverage not required to be written by
an insurer under the mandate to write, no insurer may refuse to
write such policy, coverage, or endorsement of automobile
insurance because of the race, color, creed, national origin, or
ancestry of anyone who seeks to become insured.
After September 30, 1997, Section 38-77-110 is
repealed."
SECTION 9. Section 38-77-112 of the 1976 Code, as last
amended by Act 148 of 1989, is further amended to read:
"Section 38-77-112. Notwithstanding Sections
38-77-110, 38-77-920, and Section 38-77-280, no
automobile insurer is required to write coverage for automobile
insurance as defined in Section 38-77-30 for any applicant or
existing policyholder who does not at the time of application or
renewal possess a valid South Carolina motor vehicle or special
restricted driver's license. At the time of application, an insurer
or an agent shall retain, for a period of three years, the driver's
license numbers for all applicants who were refused coverage and
shall furnish such information upon the request of the Director of
the Department of Insurance or his designee. This section does
not apply to an individual who is handicapped and who owns a
vehicle in this State but who does not have a valid driver's license.
If an automobile is principally garaged and operated in this State,
the owner of the vehicle must can be offered
coverage thereon regardless of whether or not he possesses a valid
South Carolina driver's license if he designates to the insurer who
the principal operator of the vehicle will be and this person has a
valid South Carolina driver's license or otherwise meets the
requirements of this section. This requirement does not apply to
personnel of the Armed Forces of the United States on active duty
and officially stationed in this State who possess a valid motor
vehicle driver's license issued by another state or territory of the
United States or the District of Columbia. This requirement is
waived ninety days for individuals who move into South Carolina
with the intent of making South Carolina their place of residence if
they possess a valid driver's license issued by another state or
territory of the United States or the District of Columbia."
SECTION 10. Section 38-77-120(a) of the 1976 Code, as last
amended by Section 806 of Act 181 of 1993, is further amended to
read:
"(a) No cancellation or refusal to renew by an insurer of
a policy of automobile insurance is effective unless the insurer
delivers or mails, to the named insured at the address shown
in the policy, a written notice of the cancellation or refusal
to renew. This notice:
(1) must be approved as to form by the director or his
designee prior to use;
(2) shall state the date not less than fifteen days after the date
of the mailing or delivering on which the cancellation or refusal to
renew becomes effective;
(3) shall state the specific reason or reasons of the
insurer for cancellation or refusal to renew and provide for the
notification required by subsection (B) of Section 38-77-390.
However, those notification requirements shall not apply when the
policy is being canceled or not renewed for the reason set forth in
Section 38-77-123(B),
(4) shall inform the insured of his right to request in writing
within fifteen days of the receipt of notice that the director review
the action of the insurer. The notice of cancellation or refusal to
renew shall contain the following statement to inform the insured of
such right:
`IMPORTANT NOTICE
Within fifteen days of receiving this notice, you or your attorney
may request in writing that the director review this action to
determine whether the insurer has complied with South Carolina
laws in canceling or nonrenewing your policy. If this insurer has
failed to comply with the cancellation or nonrenewal laws, the
director may require that your policy be reinstated. However, the
director is prohibited from making underwriting judgments. If this
insurer has complied with the cancellation or nonrenewal laws, the
director does not have the authority to overturn this action.'
(5) shall inform the insured of the possible availability of
other insurance which may be obtained through his agent, through
another insurer, or through the South Carolina Automobile
Insurance Plan.
Nothing in this subsection prohibits any insurer or agent from
including in the notice of cancellation or refusal to renew, any
additional disclosure statements required by state or federal laws, or
any additional information relating to the availability of other
insurance."
SECTION 11. The 1976 Code is amended by adding:
"Section 38-77-121. (A) Any application for the original
issuance of a policy of insurance covering liability arising out of the
ownership, maintenance, or use of any motor vehicle as defined in
Section 38-77-30 shall have the following statement printed on or
attached to the first page of the application form, in boldface type:
READ YOUR POLICY. THE POLICY OF INSURANCE FOR
WHICH THIS APPLICATION IS BEING MADE, IF ISSUED,
MAY BE CANCELED WITHOUT CAUSE AT THE OPTION OF
THE INSURER AT ANY TIME IN THE FIRST 60 DAYS
DURING WHICH IT IS IN EFFECT AND AT ANY TIME
THEREAFTER FOR REASONS STATED IN THE POLICY.'
(B) Any application for the original issuance of a policy of
insurance covering liability arising out of the ownership,
maintenance, or use of any motor vehicle defined in Section
38-77-30 that requires the insured to disclose information as to any
previous cancellation or refusal to renew shall also permit the
insured to offer or provide a full explanation of the reason for the
cancellation or refusal to renew.
(C) The notice required by this section shall be given by the
insurer to any applicant within ten days of the application in the
event the applicant is not provided a written copy of the application
and the coverage has been bound by such insurer.
This section shall not apply to the renewal of any policy of
insurance.
Section 38-77-122. (A) No insurer or agent shall refuse to issue
an automobile insurance policy as defined in Section 38-77-30
solely because of any one or more of the following factors: the age,
sex, location of residence in this State, race, color, creed, national
origin, ancestry, marital status, income level, previous refusal of
automobile insurance by another insurer, prior purchase of
insurance through the South Carolina Automobile Insurance Plan or
lawful occupation, including the military service, of the person
seeking the coverage. Nothing in this section prohibits any insurer
from limiting the issuance of motor vehicle insurance policies to
those who are residents of this State nor does this section prohibit
any insurer from limiting the issuance of motor vehicle insurance
policies only to persons engaging in or who have engaged in a
particular profession or occupation, or who are members of a
particular religious sect.
Nothing in this section prohibits any insurer from setting rates in
accordance with relevant actuarial data.
(E) Any insurer or agent who violates this section shall be
subject to the penalties as provided in Section 38-2-10. If the
Director of the Department of Insurance or his designee finds that
an insurer or agent is participating in a pattern of unfair
discrimination, the director or his designee may impose a fine of up
to two hundred thousand dollars. The director or his designee at
any time may examine an insurer or agent to enforce this section.
Section 38-77-123. (A)(1) No insurer shall refuse to renew an
automobile insurance policy solely because of any one or more of
the following factors:
(a) age;
(b) sex;
(c) location of residence in this State;
(d) race;
(e) color;
(f) creed;
(g) national origin;
(h) ancestry;
(i) marital status;
(j) income level;
(k) lawful occupation, including the military service;
(l) lack of driving experience, or number of years driving
experience;
(m) lack of supporting business or lack of the potential for
acquiring such business;
(n) one or more accidents or violations that occurred more
than thirty-six months immediately preceding the upcoming
anniversary date;
(o) one or more claims submitted under the uninsured
motorists coverage of the policy where the uninsured motorist is
known or there is physical evidence of contact;
(p) single claim by a single insured submitted under the
medical payments coverage or medical expense coverage due to an
accident for which the insured was neither wholly nor partially at
fault;
(q) one or more claims submitted under the comprehensive
or towing coverages. However, nothing in this section shall
prohibit an insurer from modifying or refusing to renew the
comprehensive or towing coverages at the time of renewal of the
policy on the basis of one or more claims submitted by an insured
under those coverages, provided that the insurer shall mail or
deliver to the insured at the address shown in the policy written
notice of any such change in coverage at least forty-five days prior
to the renewal; or
(r) two or fewer motor vehicle accidents within a
three-year period unless the accident was caused either wholly or
partially by the named insured, a resident of the same household, or
other customary operator.
(2) Nothing in this section shall require any insurer to renew
a policy for an insured where the insured's occupation has changed
so as to materially increase the risk. Nothing contained in
subsection (A)(1)(p), (q), and (r) of this subsection shall prohibit an
insurer from refusing to renew a policy where a claim is false or
fraudulent. Nothing in this section prohibits any insurer from
setting rates in accordance with relevant actuarial data except that
no insurer may set rates based in whole or in part on race, color,
creed, national origin, ancestry, income level, or place of residence
at any level smaller than a county.
(B) No insurer shall cancel a policy except for one or more of
the following reasons:
(1) the named insured or any other operator who either
resides in the same household or customarily operates a motor
vehicle insured under the policy has had his driver's license
suspended or revoked during the policy period or, if the policy is a
renewal, during its policy period or the ninety days immediately
preceding the last anniversary of the effective date.
(2) The named insured fails to pay the premium for the
policy or any installment of the premium, whether payable to the
insurer or its agent either directly or indirectly under any premium
finance plan or extension of credit.
(C) There shall be no liability on the part of and no cause of
action of any nature shall arise against the director or his designees;
any insurer, its authorized representatives, its agents, or its
employees; or any person furnishing to the insurer information as to
reasons for cancellation or refusal to renew, for any statement made
by any of them in complying with this section or for providing
information pertaining to the cancellation or refusal to renew. For
the purposes of this section, no insurer shall be required to furnish
a notice of cancellation or refusal to renew to anyone other than the
named insured, any person designated by the named insured, any
other person to whom such notice is required to be given by the
terms of the policy and the director.
(D) Within fifteen days of receipt of the notice of cancellation or
refusal to renew, any insured or his attorney shall be entitled to
request in writing to the director that he review the action of the
insurer in canceling or refusing to renew the policy of the insured.
Upon receipt of the request, the director shall promptly begin a
review to determine whether the insurer's cancellation or refusal to
renew complies with the requirements of this section and of Section
38-77-120 if the notice was sent by mail. The policy shall remain
in full force and effect during the pendency of the review by the
director except where the cancellation or refusal to renew is for the
reason set forth in subitem (2) of subsection (B) of this section, in
which case the policy shall terminate as of the effective date stated
in the notice. Where the director finds from the review that the
cancellation or refusal to renew has not complied with the
requirements of this section or of Section 38-77-120, he shall
immediately notify the insurer, the insured, and any other person to
whom such notice was required to be given by the terms of the
policy that the cancellation or refusal to renew is not effective.
Nothing in this section authorizes the director to substitute his
judgment as to underwriting for that of the insurer. (E) Each
insurer shall maintain for at least three years, records of cancellation
and refusal to renew and copies of every notice or statement
referred to in Section 38-77-120 of this section that it sends to any
of its insureds.
(F) The provisions of this section shall not apply to any insurer
that limits the issuance of policies of motor vehicle liability
insurance to one class or group of persons engaged in any one
particular profession, trade, occupation, or business. Nothing in this
section requires an insurer to renew a policy of automobile
insurance if the insured does not conform to the occupational or
membership requirements of an insurer who limits its writings to an
occupation or membership of an organization. No insurer is
required to renew a policy if the insured becomes a nonresident of
South Carolina.
(G) Any insurer who violates this section shall be subject to the
penalties as provided in Section 38-2-10. If the Director of the
Department of Insurance or his designee finds that an insurer, agent,
or broker is participating in a pattern of unfair discrimination, the
director or his designee may impose a fine of up to two hundred
thousand dollars. The director or his designee at any time may
examine an insurer, agent, or broker to enforce this section.
Section 38-77-124. No insurer or agent shall refuse to issue or
fail to renew a policy of motor vehicle liability insurance solely
because of the age of the motor vehicle to be insured, provided the
motor vehicle is licensed.
Section 38-77-141. No new policy or original premium notice of
insurance covering liability arising out of the ownership,
maintenance, or use of a motor vehicle may be issued or delivered
unless it contains the following statement printed in boldface type,
or unless the statement is attached to the front of or is enclosed
with the policy or premium notice:
`IMPORTANT NOTICE
IN ADDITION TO THE INSURANCE COVERAGE
REQUIRED BY LAW TO PROTECT YOU AGAINST A LOSS
CAUSED BY AN UNINSURED MOTORIST, IF YOU HAVE
PURCHASED LIABILITY INSURANCE COVERAGE THAT IS
HIGHER THAN THAT REQUIRED BY LAW TO PROTECT
YOU AGAINST LIABILITY ARISING OUT OF THE
OWNERSHIP, MAINTENANCE, OR USE OF THE MOTOR
VEHICLES COVERED BY THIS POLICY, AND YOU HAVE
NOT ALREADY PURCHASED UNINSURED MOTORIST
INSURANCE COVERAGE EQUAL TO YOUR LIABILITY
INSURANCE COVERAGE:
(1) YOUR UNINSURED AND UNDERINSURED MOTORIST
INSURANCE COVERAGE HAS INCREASED TO THE LIMITS
OF YOUR LIABILITY COVERAGE AND THIS INCREASE
WILL COST YOU AN EXTRA PREMIUM CHARGE; AND
(2) YOUR TOTAL PREMIUM CHARGE FOR YOUR
MOTOR VEHICLE INSURANCE COVERAGE WILL INCREASE
IF YOU DO NOT NOTIFY YOUR AGENT OR INSURER OF
YOUR DESIRE TO REDUCE COVERAGE WITHIN TWENTY
DAYS OF THE MAILING OF THE POLICY OR THE PREMIUM
NOTICE, AS THE CASE MAY BE;
(3) IF THIS IS A NEW POLICY AND YOU HAVE
ALREADY SIGNED A WRITTEN REJECTION OF SUCH
HIGHER LIMITS IN CONNECTION WITH IT, PARAGRAPHS
(1) AND (2) OF THIS NOTICE DO NOT APPLY.'
After twenty days, the insurer is relieved of the obligation
imposed by this subsection to attach or imprint the foregoing
statement to any subsequently delivered renewal policy, extension
certificate, other written statement of coverage continuance, or to
any subsequently mailed premium notice.
Section 38-77-142. (A) No policy or contract of bodily injury or
property damage liability insurance covering liability arising from
the ownership, maintenance, or use of a motor vehicle may be
issued or delivered in this State to the owner of the vehicle or may
be issued or delivered by an insurer licensed in this State upon a
motor vehicle, that is principally garaged, docked, or used in this
State, unless the policy contains a provision insuring the named
insured, and any other person using or responsible for the use of the
motor vehicle with the expressed or implied consent of the named
insured, against liability for death or injury sustained, or loss or
damage incurred within the coverage of the policy or contract as a
result of negligence in the operation or use of the vehicle by the
named insured or by any such person. Each policy or contract of
liability insurance, or endorsement to the policy or contract,
insuring private passenger automobiles principally garaged, docked,
or used in this State, that has as the named insured an individual or
husband and wife and that includes, with respect to any liability
insurance provided by the policy, contract, or endorsement for use
of a nonowned automobile a provision requiring permission or
consent of the owner of the automobile for the insurance to apply,
shall be construed to include permission or consent of the custodian
in the provision requiring permission or consent of the owner.
(B) No policy or contract of bodily injury or property damage
liability insurance relating to the ownership, maintenance, or use of
a motor vehicle may be issued or delivered in this State to the
owner of a vehicle or may be issued or delivered by an insurer
licensed in this State upon a motor vehicle principally garaged or
used in this State without an endorsement or provision insuring the
named insured, and any other person using or responsible for the
use of the motor vehicle with the expressed or implied consent of
the named insured, against liability for death or injury sustained, or
loss or damage incurred within the coverage of the policy or
contract as a result of negligence in the operation or use of the
motor vehicle by the named insured or by any other person. This
provision applies notwithstanding the failure or refusal of the named
insured or other person to cooperate with the insurer under the
terms of the policy. If the failure or refusal to cooperate prejudices
the insurer in the defense of an action for damages arising from the
operation or use of the insured motor vehicle, then the endorsement
or provision is void. If an insurer has actual notice of a motion for
judgment or complaint having been served on an insured, the mere
failure of the insured to turn the motion or complaint over to the
insurer may not be a defense to the insurer, nor void the
endorsement or provision, nor in any way relieve the insurer of its
obligations to the insured, provided the insured otherwise cooperates
and in no way prejudices the insurer.
Where the insurer has elected to provide a defense to its insured
under such circumstances and files responsive pleadings in the name
of its insured, the insured is not subject to sanctions for failure to
comply with discovery pursuant to the South Carolina Rules of
Civil Procedure unless it can be shown that the suit papers actually
reached the insured, and that the insurer has failed after exercising
due diligence to locate its insured, and as long as the insurer
provides such information in response to discovery as it can without
the assistance of the insured.
(C) Any endorsement, provision, or rider attached to or included
in any policy of insurance which purports or seeks to limit or
reduce the coverage afforded by the provisions required by this
section is void.
Section 38-77-143. (A)(1) Each policy or contract of bodily
injury or property damage liability insurance which provides
insurance to a named insured in connection with the business of
selling, leasing, repairing, servicing, storing, or parking motor
vehicles, against liability arising from the ownership, maintenance,
or use of a motor vehicle incident thereto shall contain a provision
that the insurance coverage applicable to those motor vehicles are
not applicable to a person other than the named insured and his
employees in the course of their employment if there is any other
valid and collectible insurance applicable to the same loss covering
the other person under a policy with limits at least equal to the
financial responsibility requirements specified in Section 38-77-140.
The provision applies to motor vehicles which are either for the
purpose of demonstrating to the other person as a prospective
purchaser, or which are loaned or leased to the other person as a
convenience during the repairing or servicing of a motor vehicle for
the other person, or leased to the other person for six months or
more.
(2) If the other valid and collectible insurance has limits less
than the financial responsibility requirements specified in Section
38-77-140, then the coverage afforded a person other than the
named insured and his employees in the course of their employment
is applicable to the extent necessary to equal the financial
responsibility requirements specified in Section 38-77-140.
(3) If there is no other valid and collectible insurance
available, the coverage under the policy afforded a person, other
than the named insured and his employees in the course of their
employment, is applicable, but the amount recoverable in such case
may not exceed the financial responsibility requirements specified
in Section 38-77-140. If there is no other valid and collectible
collision or upset insurance available and if the policy provides
insurance to the named insured for collision or upset, it shall
include any other person as an additional insured, unless in the case
of a leased vehicle the other persons receives a conspicuous written
disclosure at the commencement of the lease, warning the person
that he is not an additional insured under the owner's policy for
collision or upset coverage.
(B)(1) A policy or contract of bodily injury or property damage
liability insurance relating to the ownership, maintenance, or use of
a motor vehicle excludes coverage to persons other than (i) the
named insured, or (ii) directors, stockholders, partners, agents, or
employees of the named insured, or (iii) residents of the household
of either (i) or (ii), while those persons are employed or otherwise
engaged in the business of selling, repairing, servicing, storing, or
parking motor vehicles if there is any other valid or collectible
insurance applicable to the same loss covering the persons under a
policy with limits at least equal to the financial responsibility
requirements specified in Section 38-77-140.
(2) If the other valid and collectible insurance has limits less
than the financial responsibility requirements specified in Section
38-77-140, then the coverage afforded a person other than the
named insured while that person is employed or otherwise engaged
in the business of selling, repairing, servicing, storing, or parking
motor vehicles is applicable to the extent necessary to equal the
financial responsibility requirements specified in Section 38-77-140.
(3) If there is no other valid and collectible insurance
available, the coverage afforded a person other than the named
insured while that person is employed or otherwise engaged in the
business of selling, repairing, servicing, storing, or parking motor
vehicles shall apply, but the amount recoverable shall not exceed
the financial responsibility requirements specified in Section
38-77-140.
Section 38-77-151. All funds collected by the Director of the
Department of Revenue and Taxation under the provisions of
Chapter 10 of Title 56 shall be paid into the State Treasury and
held in a special fund to be known as the `Uninsured Motorists
Fund' to be disbursed as provided by law. The Director of the
Department of Insurance, as provided in Sections 38-77-154 and
38-77-155, may expend such funds, for the administration of this
chapter; provided, however, that the Department of Insurance shall
retain ten percent of the Uninsured Motorists Fund to be used by
the Department of Insurance to enforce the provisions of Title 38,
including Sections 38-77-112, 38-77-122, and 38-77-123, to publish
for consumers an automobile insurance buyer's guide, a brochure
comparing automobile insurance premiums with a section
comparing automobile insurance premiums, and to provide for a
public awareness campaign.
Section 38-77-154. The Uninsured Motorists Fund shall be under
the supervision and control of the Department of Insurance.
Payments from the Uninsured Motorists Fund shall be made on
warrants of the Comptroller General issued on vouchers signed by a
person designated by the director. The purpose of the Uninsured
Motorists Fund is to reduce the cost of the insurance required by
Section 38-77-150 and to protect and educate consumers as
provided by Section 38-77-151.
Section 38-77-155. The director shall distribute monies annually
from the Uninsured Motorists Fund among the several insurers
writing motor vehicle bodily injury and property damage liability
insurance on motor vehicles registered in this State. Monies shall
be distributed in the proportion that each insurer's premium income
for the basic uninsured motorists limits coverage bears to the total
premium income for basic uninsured motorists limits coverage
written in this State during the preceding year. Premium income
shall be gross premiums less cancellation and return premiums for
coverage required by Section 38-77-150. Only insurers that
maintain records satisfactory to the director shall receive any
payment from the Uninsured Motorists Fund. Records shall be
considered satisfactory if they adequately disclose the loss
experience for the coverage."
SECTION 12. Section 38-77-140 of the 1976 Code, is amended
to read:
"Section 38-77-140. 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
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 ten 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."
SECTION 13. Section 38-77-150 of the 1976 Code, as last
amended by Section 807 of Act 181 of 1993, is further 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 damages from the
owner or operator of an uninsured motor vehicle, within limits
which may be no less than the requirements of Section 38-77-140.
The uninsured motorist provision shall also provide for no less than
five ten 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 dollars of the
loss or damage. The director or his designee may prescribe the
form to be used in providing uninsured motorist coverage and when
prescribed and promulgated no other form may be used.
(B) 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.
(C) Benefits paid pursuant to this section are subject to
subrogation and assignment if an uninsured motorist has selected
the five hundred dollar option."
SECTION 14. A. Section 38-77-280 of the 1976 Code, as last
amended by Section 810 of Act 181 of 1993, is further amended to
read:
"Section 38-77-280. (A) Except as provided in
subsection (B), all automobile insurers, including those insurance
companies writing private passenger physical damage coverages
only, shall Any automobile insurer may 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, at 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 director or his
designee. 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 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).
(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 with the department
and approved by the director or his designee. 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."
B. From January 1, 1997 to September 30, 1997, Section
38-77-280 of the 1976 Code, as last amended by Section 810 of
Act 181 of 1993, is further amended to read:
"Section 38-77-280. (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 except for reasons specified
in Section 38-77-123.
Collision coverage must have a mandatory deductible of two
hundred fifty dollars, but an insured or qualified applicant, at 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 director or his
designee. 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 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).
(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 with the department
and approved by the director or his designee. 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."
SECTION 15. Section 38-77-350(C) of the 1976 Code, as added
by Act 148 of 1989 and last amended by Act 496 of 1994, is
further amended to read:
"(C) An automobile insurer is not required to make a new
offer of coverage on any automobile insurance policy which
renews, extends, changes, supersedes, or replaces an existing policy.
However, the first renewal notices for existing policies after
December 1, 1989, must include the form provided in subsection
(A). A policy of automobile insurance offered or issued by a new
servicing carrier for the South Carolina Reinsurance Facility to
replace a policy previously issued by a former servicing carrier and
containing the same coverage limits as the former policy constitutes
a valid replacement policy that does not require the new servicing
carrier or agent to make a new offer of coverage or to obtain a new
application from the insured."
SECTION 16. The 1976 Code is amended by adding:
"Section 38-77-370. (A) If an individual, after proper
identification, submits a written request to an insurer, agent, or
insurance-support organization for access to recorded personal
information about the individual that is reasonably described by the
individual and reasonably able to be located and retrieved by the
insurer, agent, or insurance-support organization, the insurer, agent,
or insurance-support organization, within thirty business days from
the date the request is received shall:
(1) inform the individual of the nature and substance of the
recorded personal information in writing, by telephone, or by other
oral communication, whichever the insurer, agent or
insurance-support organization prefers;
(2) permit the individual to see and obtain a copy of the
recorded personal information pertaining to him or to obtain a copy
of the recorded personal information by mail, whichever the
individual prefers, unless the recorded personal information is in
coded form, in which case an accurate translation in plain language
must be provided in writing;
(3) disclose to the individual the identity, if recorded, of
those persons to whom the insurer, agent, or insurance-support
organization has disclosed the personal information within two
years before the request, and if the identity is not recorded, the
names of those insurers, agents, insurance-support organizations, or
other persons to whom the information is disclosed normally; and
(4) provide the individual with a summary of the procedures
by which he may request correction, amendment, or deletion of
recorded personal information.
(B) Any personal information provided pursuant to subsection
(A) of this section shall identify the source of the information if it
is an institutional source.
(C) Medical record information supplied by a medical care
institutions or medical professional and requested under subsection
(A) of this section, together with the identity of the medical
professional or medical care institution that provided the
information, must be supplied either directly to the individual or to
a medical professional designated by the individual and licensed to
provide medical care with respect to the condition to which the
information relates, whichever the insurer, agent, or
insurance-support organization prefers. If it elects to disclose the
information to a medical professional designated by the individual,
the insurer, agent, or insurance-support organization shall notify the
individual, at the time of the disclosure, that it has provided the
information to the medical professional.
(D) Except for personal information provided under this Section,
an insurer, agent, or insurance-support organization may charge a
reasonable fee to cover the costs incurred in providing a copy of
recorded personal information to individuals.
(E) The obligations imposed by this section upon an insurer or
agent may be satisfied by another insurer or agent authorized to act
on its behalf. With respect to the copying and disclosure of
recorded personal information pursuant to a request under
subsection (A) of this section, an insurer, agent, or
insurance-support organization may make arrangements with an
insurance-support organization or a consumer reporting agency to
copy and disclose recorded personal information on its behalf.
(F) The rights granted to individuals in this section shall extend
to all natural persons to the extent information about them is
collected and maintained by an insurer, agent, or insurance-support
organization in connection with an insurance transaction. The rights
granted to all natural persons by this subsection shall not extend to
information about them that relates to and is collected in connection
with or in reasonable anticipation of a claim or civil or criminal
proceeding involving them.
(G) For purposes of this section, `insurance-support
organization' does not include `consumer reporting agency'.
Section 38-77-380. (A) Within thirty business days from the
date of receipt of a written request from an individual to correct,
amend, or delete any recorded personal information about the
individual within its possession, an insurer, agent, or
insurance-support organization shall either:
(1) correct, amend, or delete the portion of the recorded
personal information in dispute; or
(2) notify the individual of:
(a) its refusal to make the correction, amendment, or
deletion;
(b) the reasons for the refusal; and
(c) the individual's right to file a statement as provided in
subsection (C).
(B) If the insurer, agent, or insurance-support organization
corrects, amends, or deletes recorded personal information in
accordance with item (1) of subsection (A) of this section, the
insurer, agent, or insurance-support organization shall notify the
individual in writing and furnish the correction, amendment, or fact
of deletion to:
(1) any person specifically designated by the individual who,
within the preceding two years, may have received the recorded
personal information;
(2) any insurance-support organization whose primary source
of personal information is insurers if the insurance-support
organization has received systematically the recorded personal
information from the insurer within the preceding seven yeas. The
correction, amendment, or fact of deletion need not be furnished if
the insurance-support organization no longer maintains recorded
personal information about the individual; and
(3) any insurance-support organization that furnished the
personal information that has been corrected, amended, or deleted.
(C) Whenever an individual disagrees with an insurer's agent's
or insurance-support organization's refusal to correct, amend, or
delete recorded personal information, the individual is permitted to
file with the insurer, agent, or insurance-support organization:
(1) a concise statement setting forth what the individual
thinks is the correct, relevant, or fair information; and
(2) a concise statement of the reasons why the individual
disagrees with the insurer's, agent's, or insurance-support
organization's refusal to correct, amend, or delete recorded personal
information.
(D) If an individual files either statement as described in
subsection (C), the insurer, agent, or support organization shall:
(1) file the statement with the disputed personal information
and provide a means by which anyone reviewing the disputed
personal information will be made aware of the individual's
statement and have access to it; and
(2) in a subsequent disclosure by the insurer, agent, or
support organization of the recorded personal information that is the
subject of disagreement, clearly identify the matter or matters in
dispute and provide the individual's statement along with the
recorded personal information being disclosed; and
(3) furnish the statement to the persons and in the manner
specified in subsection (B).
(E) The rights granted to individuals in this section extend to all
natural persons to the extent information about them is collected
and maintained by an insurer, agent, or insurance-support
organization in connection with an insurance transaction. The rights
granted to all natural persons by this subsection do not extend to
information about them that relates to and is collected in connection
with or in reasonable anticipation of a claim or civil or criminal
proceeding involving them.
(F) For purposes of this section, `insurance-support
organization' does not include `consumer reporting agency'.
Section 38-77-390. (A) In the event of an adverse underwriting
decision, including those that involve policies referred to in Section
38-77-120, the insurer or agent responsible for the decision shall
give a written notice in a form approved by the director that:
(1) either provides the applicant, policyholder, or individual
proposed for coverage with the specific reason or reasons for the
adverse underwriting decision in writing or advises the person that
upon written request he may receive the specific reason or reasons
in writing; and
(2) provides the applicant, policyholder, or individual
proposed for coverage with a summary of the rights established
under subsection (B) of this section and Sections 38-77-380.
(B) Upon receipt of a written request within ninety business
days from the date of the mailing of notice or other communication
of an adverse underwriting decision to an applicant, policyholder, or
individual proposed for coverage, the insurer or agent shall furnish
to the person within twenty-one business days from the date of
receipt of the written request:
(1) the specific reason or reasons for the adverse underwriting
decision, in writing, if that information was not furnished initially
in writing pursuant to subsection (A)(1);
(2) the specific items of personal and privileged information
that support those reasons; however:
(a) the insurer or agent shall not be required to furnish
specific items of privileged information if it has a reasonable
suspicion, based upon specific information available for review by
the director, that the applicant, policyholder, or individual proposed
for coverage has engaged in criminal activity, fraud, material
misrepresentation, or material nondisclosure; and
(b) specific items of medical-record information supplied
by a medical-care institution or medical professional must be
disclosed either directly to the individual about whom the
information relates or to a medical professional designated by the
individual and licensed to provide medical care with respect to the
condition to which the information relates, whichever the insurer or
agent prefers; and
(3) the names and addresses of the institutional sources that
supplied the specific items of information given pursuant to
subsection (B)(2) of this section. However, the identity of any
medical professional or medical-care institution must be disclosed
either directly to the individual or to the designated medical
professional, whichever the insurer or agent prefers.
(C) The obligations imposed by this section upon an insurer or
agent may be satisfied by another insurer or agent authorized to act
on its behalf. However, the insurer or agent making an adverse
underwriting decision shall remain responsible for compliance with
the obligations imposed by this section.
(D) When an adverse underwriting decision results solely from
an oral request or inquiry, the explanation of reasons and summary
of rights required by subsection (A) of this section may be given
orally."
SECTION 17. Section 38-77-530 of the 1976 Code, as last
amended by Section 818 of Act 181 of 1993, is further amended to
read:
"Section 38-77-530. The plan of operation of the facility is
subject to the approval of the director or his designee which may be
granted only if the plan provides for equitable apportionment of the
operating expenses and profits or losses among the members. The
plan may, if the director or his designee considers it feasible and
equitable, make provision for separate apportionments between
private passenger automobile insurance business and commercial
automobile insurance business, or, alternatively or in addition to
that division, the plan may make provision for separate
apportionments between automobile liability insurance business,
including medical payments and uninsured motorist insurance, and
automobile physical damage insurance business. Any such
apportionments shall give consideration to a comparison between
the writings or car-year exposures of each insurer of automobile
insurance and the total writings or car-year exposures of all
automobile insurers or, in the case of any separate apportionments
approved by the director or his designee, a comparison between the
writings or car-year exposures of each insurer within the applicable
category of automobile insurance and the writings or car-year
exposures of all insurers within that category.
In connection with his approval of the plan, the director or his
designee may require that the plan make provision for such
comparisons for a one-year period or for a longer period not to
exceed five years and may provide for weighing the experience so
as to attach a greater weight to the more recent experience.
In connection with the approval of the plan's provisions
respecting equitable apportionment of the operating expenses or
gains or losses of the facility, the director or his designee may
require that the plan make provision for a comparison between each
insurer's percentage of the aggregate written premiums or car-year
exposures respecting automobile insurance or any such category
thereof and the insurer's percentage of total cessions to the facility
of such insurance or category thereof so as to provide that the
insurer's portion of the operating expenses or gains or losses must
be the average of the two percentages; or the director or his
designee may approve or require any other similar or comparable
provision for the apportionment of the expenses or gains or losses
of the facility which relates insurers' shares to their respective
utilization of the facility.
The plan of operation, provided that insurers writing liability
and physical damage coverages to include nonowners, shall
commence recoupment of facility assessments by way of a
surcharge on private passenger and commercial automobile business
issued by a member or through the facility. Such surcharge shall be
a percentage of the premium adopted by the governing board of the
facility; and the charges determined on the basis of the surcharge
shall be displayed as a part of the applicable premium charges. The
surcharge for recoupment shall be shown as a separate charge.
(1) Any recoupment charge paid by policyholders must be
considered premium for the purpose of calculating premium taxes
and commissions and is subject to normal policy cancellation
procedures.
(2) Any net operating gains resulting from the operation of the
facility must be retained by the facility, and the gains and any
investment income derived from the gains must be used to offset
future operating losses.
(3) The total funds recouped by all insurers less commission
and premium tax expenses and time value of money considerations
must be paid to the Reinsurance Facility in accordance with the
plan of operation. The governing board shall redistribute the funds
to the insurers based upon each insurer's share of the Reinsurance
Facility losses. Recoupment must be used solely for the purpose of
recovering past facility operating deficits. The plan of operation
must provide that the amount ultimately received by an individual
company is not more than the company's share of the Reinsurance
Facility losses, plus the time value of money."
SECTION 18. Section 38-77-590 of the 1976 Code, as last
amended by Sections 821-825 of Act 181 of 1993, is amended to
read:
"Section 38-77-590. (a) Not more than six months after
July 9, 1974, or at an earlier time as the director or his designee
considers necessary by reason of complaints regarding want of
access to automobile insurance in particular areas or want of outlets
for producers, the director or his designee shall survey the various
areas of the State to ascertain if sufficient marketing outlets exist in
all areas or are available to all producers. Upon a finding by the
director or his designee that insufficient marketing outlets exist in
particular areas or that certain producers have been deprived of a
market for risks previously serviced by them, the director or his
designee may, after consultation with the facility, designate one or
more insurers to service the areas through agents appointed by them
or may designate the producers as the agents of any insurer. The
arrangements shall include provision for one hundred percent quota
share reinsurance through the facility of any automobile insurance
policy marketed through the arrangements, at the option of the
insurer, and the reinsurance is not subject to the statutory provisions
or regulations regarding excessive utilization of the facility.
(b) After the effective date of this section, those producers
previously designated by the director or his designee may continue
to serve in that capacity under the jurisdiction and control of the
governing board of the facility, except that any change in the rate
of commissions allowed designated producers is subject to the
approval of the director or his designee.
(c) A producer may be designated by the governing board of
the facility upon application for designation and is eligible for
designation upon a finding by the governing board that the
applicant meets the following qualifications:
(1) The applicant has been, for ten continuous years, a
licensed resident property and casualty insurance agent and agency
owner or principal with authority from one or more licensed
insurers to write liability and physical damage insurance on private
passenger automobiles;
(2) At the time of application the applicant is servicing and
owns the renewals on private passenger and commercial automobile
insurance business, the net premiums on which exceeded
seventy-five thousand dollars of potential cedeable automobile
insurance during any one of the previous five calendar years
preceding the application;
(3) Neither the applicant, nor any employee of the applicant
or the applicant's corporate agency, nor any partner or shareholder
in any related insurance agency, related premium service company,
or related other business, has any direct or indirect connection with
any voluntary market outlet for the purpose of writing any type of
automobile insurance in this State except for motorcycle insurance
and types not cedeable to the facility;
(4) The applicant has not contributed to his termination as
agent by any insurer because of any illegal breach of agency
agreement or other related, improper, or unethical conduct; and
(5) The books, records, and accounts of the insurance
business of the applicant have been audited at the expense of the
applicant and found by the governing board to be indicative of a
financially sound operation.
(d) Prior to designation as a producer, the applicant shall furnish
at his expense a bond in an amount of not less than fifty thousand
dollars for the faithful performance of the duties as a producer,
executed by the applicant as principal and a corporate surety
licensed to do business in this State as surety, and shall also have
effective errors and omissions insurance by an insurer licensed to
do business in this State, with the bond and errors and omissions
insurance being subject to approval by the governing board.
(e) The governing board shall assign a specific location to each
producer designated. The governing board shall determine from the
director or his designee the locations assigned by him to those
producers whom the director or his designee has designated.
Designated producers may not open or maintain any other locations
without the written authorization of the governing board; provided,
however, that an applicant maintaining multiple offices on June 4,
1987, is entitled to maintain two locations as a designated agent
which he owned and operated at that time and through which
premiums in at least the amount of seventy-five thousand dollars
were written. The governing board shall terminate the designation,
and the director or his designee shall revoke all agents' licenses of
any producer who does not comply with this requirement upon
demand by the governing board. Upon termination, the producer's
expirations on designated business become the property of the
facility.
(f) The designation of a producer by the director or his
designee or the governing board is transferable to a spouse, child,
parent, brother, or sister of the producer upon the designated
producer's retirement, incapacity, or death. The duties of a
designated producer may be performed by one or more qualified
employees of the producer or the producer's corporate agency.
(g) Neither a designated producer, nor any employee of a
designated producer or the producer's corporate agency, nor any
partner or shareholder in any related insurance agency, related
premium service company, or related other business, may have any
direct or indirect connection with any voluntary market outlet for
the purpose of writing any type of automobile insurance in this
State except for motorcycle insurance and types not cedable to the
facility. The governing board shall terminate the designation of any
producer, and the director or his designee shall revoke all licenses
of the producer and of any other insurance agent and premium
service company knowingly involved in this connection. Upon
termination, the producer's expirations on designated business
become the property of the facility.
(h) A designated carrier who fails a claims audit shall
have no new designated producer assignments until the time it
passes a re-audit within a reasonable time prescribed by the
governing board. If this carrier fails two claims audits, including a
re-audit, within any three-year period that carrier is disqualified for
renewal of its contract with the facility upon expiration of its
existing contract.
A producer designated under this section may not write new
private passenger and commercial automobile insurance business
after January 1, 1997, and must not renew private passenger and
commercial automobile business after September 30, 1997. No
policies with an effective date after September 30, 1997, shall be
accepted by the facility."
SECTION 19. Section 38-77-595 of the 1976 Code, as added by
Act 524 of 1990, is amended by adding:
"A producer designated under this section may not write
new private passenger and commercial automobile insurance
business after January 1, 1997, and must not renew private
passenger and commercial automobile business after September 30,
1997. No policies with an effective date after September 30, 1997,
shall be accepted by the facility."
SECTION 20. Title 38, Chapter 77 of the 1976 Code is amended
by adding:
"Article 8
Assignment of Risks
Section 38-77-810. The director may make reasonable regulations
for the assignment of risks to insurance carriers. He shall establish
rate classifications, rating schedules, rates, and regulations to be
used by insurance carriers issuing assigned risk, policies of motor
vehicle liability, physical damage, and medical payments insurance
in accordance with this chapter as appear to it to be proper in the
establishment of rate classifications, rating schedules, rates, and
regulations, it shall be guided by the principles and practices which
have been established under its statutory authority to regulate motor
vehicle liability, physical damage, and medical payments insurance
rates and it may act in conformity with its statutory discretionary
authority in such matters.
Section 38-77-820. Every person who has been unable to obtain
a motor vehicle liability policy shall have the right to apply to the
director to have his risk assigned to an insurance carrier licensed to
write and writing motor vehicle liability insurance in the State and
the insurance carrier, whether a stock or mutual company,
reciprocal, or interinsurance exchange, or other type or form of
insurance organization, as provided in this chapter shall issue a
motor vehicle liability policy which will meet at least the minimum
requirements for establishing financial responsibility as provided in
this chapter, and in addition shall provide, at the option of the
insured, reasonable motor vehicle physical damage and medical
payments coverages, (both as defined in Chapter 77, Title 38) in the
same policy. Every person who has otherwise obtained a motor
vehicle liability insurance policy, or who has been afforded motor
vehicle liability insurance under the laws of this State, but who was
not afforded motor vehicle medical payments insurance or motor
vehicle physical damage insurance in the same policy, or who was
not afforded such coverages under the provisions of that section,
shall have the right to apply to the director to have his risk assigned
to an insurance carrier, as provided above, licensed to write and
writing either or both coverages, and the insurance carrier shall
issue a policy providing the coverage or coverages applied for.
Section 38-77-840. The director may in its discretion, after
reviewing all information pertaining to the applicant or policyholder
available from its records, the records of the department, or from
other sources:
(1) refuse to assign an application;
(2) approve the rejection of an application by an insurance
carrier;
(3) approve the cancellation of a policy of motor vehicle
liability, physical damage, and medical payments insurance by an
insurance carrier; or
(4) refuse to approve the renewal or the reassignment of an
expiring policy.
Section 38-77-850. Any information filed with the director by an
insurance carrier in connection with an assigned risk shall be
confidential and solely for the information of the director and its
staff and shall not be disclosed to any person, including an
applicant, policyholder, and any other insurance carrier.
Section 38-77-860. (A) The director shall not be required to
disclose to any person, including the applicant or policyholder, its
reasons for:
(1) refusing to assign an application;
(2) approving the rejection of an application by an insurance
carrier;
(3) approving the cancellation of a policy of motor vehicle
liability, physical damage, and medical payments insurance by an
insurance carrier; or
(4) refusing to approve the renewal or the reassignment of an
expiring policy.
(B) The director or anyone acting for it shall not be held liable
for any act or omission in connection with the administration of the
duties imposed upon it by the provisions of this chapter, except
upon proof of actual malfeasance.
Section 38-77-870. The provisions of this chapter relevant to
assignment of risks shall be available to nonresidents who are
unable to obtain a policy of motor vehicle liability, physical
damage, and medical payments insurance with respect only to motor
vehicles registered and used in the State.
Section 38-77-880. Notwithstanding any other provision of law,
the provisions of this chapter relating to assignment of risks shall be
available to carriers by motor vehicle who are required by law to
carry public liability and property damage insurance for the
protection of the public."
SECTION 21. Sections 38-73-455, 38-73-456, 38-73-457,
38-73-460, 38-73-465, 38-73-720, 38-73-730, 38-73-731,
38-73-735, 38-73-750, 38-73-760, 38-73-770, 38-77-111,
38-77-115, 38-77-145, 38-77-285, 38-77-360, 38-77-600,
38-77-605, 38-77-610, 38-77-620, and 38-77-625 and Article 9 of
Chapter 77 of Title 38 of the 1976 Code are repealed.
SECTION 22. Except as may be otherwise specifically provided
in this act, this act takes effect January 1, 1997.
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