S 0345 General Bill, By Cleary, Bryant and Knotts
 A BILL TO AMEND SECTION 38-75-330 OF THE 1976 CODE, RELATING TO THE WIND AND
 HAIL UNDERWRITING ASSOCIATION, TO PROVIDE THAT THE ASSOCIATION IS AN INTEGRAL
 PART OF THIS STATE AND NEEDS THE MAXIMUM FINANCIAL RESOURCES TO PAY CLAIMS
 FOLLOWING A CATASTROPHIC HURRICANE, AND TO PROVIDE THAT DEPARTMENT OF
 INSURANCE SHALL PROMULGATE RULES AND REGULATIONS SO THAT THE INCOME OF THE
 ASSOCIATION MAY BE EXEMPT FROM FEDERAL TAXATION.

   01/25/07  Senate Introduced and read first time SJ-10
   01/25/07  Senate Referred to Committee on Banking and Insurance SJ-10

TO AMEND SECTION 38-75-330 OF THE 1976 CODE, RELATING TO THE WIND AND HAIL UNDERWRITING ASSOCIATION, TO PROVIDE THAT THE ASSOCIATION IS AN INTEGRAL PART OF THIS STATE AND NEEDS THE MAXIMUM FINANCIAL RESOURCES TO PAY CLAIMS FOLLOWING A CATASTROPHIC HURRICANE, AND TO PROVIDE THAT DEPARTMENT OF INSURANCE SHALL PROMULGATE RULES AND REGULATIONS SO THAT THE INCOME OF THE ASSOCIATION MAY BE EXEMPT FROM FEDERAL TAXATION.

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

SECTION    1.    Section 38-75-330 of the 1976 Code is amended to read:

"Section 38-75-330.    There is created the South Carolina Wind and Hail Underwriting Association, an unincorporated nonprofit association whose responsibilities, liability, and regulations are governed and defined by this article, consisting of all private insurers authorized to write and engage in writing property insurance within this State on a direct and statewide basis, but excluding insurers whose writings are limited to property wholly owned by parent, subsidiary, or allied organizations, or insurers whose writings are limited to property wholly owned by religious organizations, provided, however, as a condition of exemption from membership such insurers providing property insurance for insurable property in the coastal area as defined by this article shall also provide essential property insurance for such risks. Every such insurer must be a member of the association and must remain a member of the association so long as the association is in existence as a condition of its authority to continue to transact the business of insurance in this State.

The General Assembly finds that by providing essential insurance to property owners that would otherwise be unable to obtain insurance, the association is an integral part of this State. Because it is essential for the association to have the maximum financial resources to pay claims following a catastrophic hurricane, it is the intent of the General Assembly that the income of the corporation be exempt from federal income taxation and that interest on the debt obligations issued by the association be exempt from federal income taxation. The department may adopt rules and promulgate regulations necessary to obtain tax-exempt status."

SECTION    2.    This act takes effect upon approval by the Governor.