Bill 3792

                    Current Status

Bill Number:               3792
Ratification Number:       494
Act Number:                444
Introducing Body:          House
Subject:                   Relating to the conditions under which
                           insurance may be sold to and required of a
                           borrower for insuring personal property
                           securing a loan

(A444, R494, H3792)

AN ACT TO AMEND SECTION 34-29-160, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE CONDITIONS UNDER WHICH INSURANCE MAY BE SOLD TO AND REQUIRED OF A BORROWER FOR INSURING PERSONAL PROPERTY SECURING A LOAN, SO AS TO ADD UNEMPLOYMENT INSURANCE TO THAT INSURANCE AUTHORIZED TO PROVIDE PERIODIC BENEFITS WHICH MAY NOT EXCEED AN AMOUNT WHICH EQUALS THE AMOUNT OF EACH PERIODIC INSTALLMENT PAYMENT MADE UNDER THE LOAN CONTRACT, AND TO AMEND SECTION 37-3-202 RELATING TO THE ADDITIONAL CHARGES THAT A LENDER MAY CONTRACT FOR AND RECEIVE IN CONNECTION WITH A CONSUMER LOAN, SO AS TO AUTHORIZE UNEMPLOYMENT INSURANCE TO BE PROVIDED A DEBTOR.

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

Life insurance

SECTION 1. The third paragraph of Section 34-29-160 of the 1976 Code is amended to read:

"Life insurance must be in an amount not to exceed the approximate amount of the loan and for a term not exceeding the approximate term of the loan contract. Accident and health insurance and unemployment insurance, or both must provide periodic benefits which may not exceed an amount which approximately equals the amount of each periodic installment payment to be made under the loan contract. However, when a loan is discharged, or a new policy or policies of insurance are issued, the life, property, or accident and health insurance or all three on the prior obligation must be cancelled and the unearned portion of the insurance premium or premiums, or identifiable charge, must be refunded to the borrower. However, the method of refunding the premiums on the policies must be pursuant to the Rule of 78 or the Sum of the Digits Method; the insurance company shall calculate its reserves on the policies in the same manner, or in the case of credit life insurance, in accordance with a mortality table and interest assumption used for ordinary life policies. Notwithstanding this requirement, if the property insurance policy or policies cover the insurable interest of the borrower as well as the lender, the policy or policies may be continued in force at the request of the borrower."

Insurance in connection with loans

SECTION 2. Item (b) of subsection (2) of Section 37-3-202 of the 1976 Code is amended to read:

"(b) with respect to consumer credit insurance providing life, accident and health, or unemployment insurance coverage, if the insurance coverage is not required by the lender, and this fact is clearly and conspicuously disclosed in writing to the debtor, and if, in order to obtain the insurance in connection with the loan, the debtor gives specific, dated, and separately signed affirmative written indication of his desire to do so after written disclosure to him of the cost of it; and".

Time effective

SECTION 3. This act shall take effect upon approval by the Governor.