South Carolina General Assembly
107th Session, 1987-1988

Bill 1102


                    Current Status

Bill Number:               1102
Ratification Number:       423
Act Number                 394
Introducing Body:          Senate
Subject:                   Subrogation 
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(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(A394, R423, S1102)

AN ACT TO AMEND SECTION 38-71-190, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE INSURER'S RIGHT OF SUBROGATION IN POLICIES OF ACCIDENT AND HEALTH INSURANCE, SO AS TO ALLOW THE CHIEF INSURANCE COMMISSIONER TO DISALLOW SUBROGATION IF, AFTER PETITION BY THE INSURED, HE DETERMINES THE SUBROGATION TO BE INEQUITABLE; TO AMEND THE 1976 CODE BY ADDING SECTION 38-71-335 SO AS TO PROHIBIT THE WRITING OF INDIVIDUAL OR FAMILY ACCIDENT, HEALTH, OR ACCIDENT AND HEALTH INSURANCE POLICIES WHICH ALLOW THE INSURER TO CANCEL THE POLICY ON A DATE OTHER THAN THE ANNIVERSARY OR PREMIUM DUE DATE AND POLICIES WHICH ARE OPTIONALLY RENEWABLE AND TO REQUIRE THIRTY-ONE DAYS' WRITTEN NOTICE OF NONRENEWAL; TO AMEND SECTION 38-71-340, RELATING TO MANDATORY PROVISIONS IN ACCIDENT, HEALTH, OR ACCIDENT AND HEALTH INSURANCE POLICIES, SO AS TO REVISE THE REQUIRED PROVISIONS; TO AMEND SECTION 38-71-370, RELATING TO OPTIONAL PROVISIONS IN LIFE INSURANCE POLICIES, SO AS TO REVISE THE REQUIRED PROVISIONS; TO AMEND SECTION 38-71-610, RELATING TO NOTICE OF PREMIUMS DUE FOR ACCIDENT OR HEALTH INSURANCE POLICIES, SO AS TO REVISE A TERM; TO AMEND THE 1976 CODE BY ADDING SECTION 38-71-735 SO AS TO PROVIDE MANDATORY PROVISIONS FOR GROUP ACCIDENT, GROUP HEALTH, OR GROUP ACCIDENT AND HEALTH INSURANCE POLICIES; TO AMEND SECTION 38-71-810, RELATING TO READJUSTMENT OF PREMIUMS FOR GROUP ACCIDENT, GROUP HEALTH, OR GROUP ACCIDENT AND HEALTH INSURANCE POLICIES, SO AS TO CLARIFY TERMS; TO AMEND SECTION 38-71-1010, RELATING TO THE DEFINITION OF BLANKET ACCIDENT AND HEALTH INSURANCE, SO AS TO EXPAND THE DEFINITION; TO AMEND SECTION 38-71-1110, RELATING TO THE DEFINITION OF ACCIDENT AND HEALTH INSURANCE IN A FRANCHISE PLAN, SO AS TO REVISE THE DEFINITION; TO AMEND SECTIONS 38-55-50 AND 38-71-200, RELATING TO THE PROHIBITION ON DISCRIMINATION BETWEEN INSUREDS OF THE SAME CLASS OR HAZARD, SO AS TO ALLOW STATUTORY EXCEPTIONS; TO AMEND THE 1976 CODE BY ADDING SECTION 38-55-180 SO AS TO PROVIDE FOR THE SAFEGUARDING OF PREMIUMS OF INDUSTRIAL INSURANCE; AND TO REPEAL SECTIONS 38-71-130, 38-71-180, 38-71-380, 38-71-390, 38-71-400, 38-71-820, AND ARTICLE 7, CHAPTER 71 OF TITLE 38 RELATING TO ACCIDENT AND HEALTH INSURANCE.

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

Subrogation

SECTION 1. Section 38-71-190 of the 1976 Code is amended to read:

"Section 38-71-190. Any policy or contract of accident and health insurance issued in this State may include provision for subrogation by the insurer to the insured's right of recovery against a liable third party for not more than the amount of insurance benefits that the insurer has paid previously in relation to the insured's injury by the liable third party. If the Commissioner, upon being petitioned by the insured, determines that the exercise of subrogation by an insurer is inequitable and commits an injustice to the insured, subrogation is not allowed. Attorneys' fees and costs must be paid by the insurer from the amounts recovered."

Cancellation

SECTION 2. Subarticle 1, Article 3, Chapter 71, Title 38 of the 1976 Code is amended by adding:

"Section 38-71-335. (A) No individual or family accident, health, or accident and health insurance policy may contain a provision which gives the insurer the right to cancel the policy. 'To cancel' means to terminate a policy at a date other than the policy anniversary date or the premium due date.

(B) Individual or family accident, health, or accident and health insurance policies may not be written on an optionally renewable basis. 'Optionally renewable' means a contract of insurance in which the insurer reserves the right to terminate the coverage at the policy anniversary date. Optionally renewable does not include the following categories of policies as defined by the Commissioner by regulation: (1) 'nonrenewable for stated reasons only' and (2) 'conditionally renewable'. Term insurance is not considered insurance written on an optionally renewable basis.

(C) An individual or family accident, health, or accident and health insurance policy which may be nonrenewed, may be nonrenewed at the policy anniversary date or premium due date. The insurer shall give the insured at least thirty-one days' written notice of nonrenewal. Nonrenewal by the insurer is without prejudice to any claims originating before the effective date of nonrenewal."

Required provisions

SECTION 3. Section 38-71-340 of the 1976 Code is amended to read:

"Section 38-71-340. Except as provided in Section 38-71-410, each accident, health, or accident and health policy delivered or issued for delivery to an individual in this State must contain the provisions specified in this section, in the words in which they appear in this section. The insurer, at its option, may substitute for one or more of these provisions corresponding provisions of different wording approved by the Commissioner which are in each instance not less favorable in any respect to the insured or the beneficiary. These provisions must be preceded individually by the caption appearing in this section or, at the option of the insurer, by appropriate individual or group caption or subcaptions approved by the Commissioner.

(1) A provision as follows:

ENTIRE CONTRACT; CHANCES: This policy, with the application and attached papers, if any, is the entire contract between the insured and the company.

No change in this policy is effective until approved by a company officer. This approval must be noted on or attached to this policy. No agent may change this policy or waive any of its provisions.

(2) A provision as follows:

TIME LIMIT ON CERTAIN DEFENSES: After two years from the issue date only fraudulent misstatements in the application may be used to void the policy or deny any claim for loss incurred or disability that starts after the two-year period.

A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium (a) until at least age fifty or (b) in the case of a policy issued after age forty-four, for at least five years from its date Or issue, may contain in lieu of the foregoing the following provision (from which the clause in parenthesis may be omitted at the insurer's option):

INCONTESTABLE:

(a) Misstatements in the application:

After this policy has been in force for two years during the insured's lifetime (excluding any period during which the insured is disabled), the company cannot contest the statements contained in the application.

(b) Preexisting conditions:

No claim for loss incurred or disability that starts after two years from the issue date will be reduced or denied because a sickness or physical condition not excluded by name or specific description before the date of loss had existed before the effective date of coverage.

(3) A provision as follows:

GRACE PERIOD: This policy has a _____ day grace period. This means that if a renewal premium is not paid on or before the date it is due, it may be paid during the following days. During the grace period the policy will stay in force. [Note: Insert a number not less than 'seven' for weekly premium policies, 'ten' for monthly premium policies, and 'thirty-one' for all other policies.]

(4) A provision as follows:

REINSTATEMENT: If the renewal premium is not paid before the grace period ends the policy will lapse. Later acceptance of the premium by the company or by an agent authorized to accept payment without requiring an application for reinstatement will reinstate the policy. If the company or its agent requires an application, the insured will be given a conditional receipt for the premium. If the application is approved, the policy will be reinstated as of the approval date. Lacking such approval, the policy will be reinstated on the forty-fifth day after the date of the conditional receipt unless the company has previously written the insured of its disapproval. The reinstated policy will cover only loss that results from an injury sustained after the date of reinstatement or sickness that starts more than ten days after such date.

In all other respects the rights of the insured and the company will remain the same, subject to any provisions noted on or attached to the reinstated policy. Any premiums the company accepts for reinstatement will be applied to a period for which premiums have not been paid. No premiums will be applied to any period more than sixty days before the reinstatement date.

[The last sentence of the above provision may be omitted from any policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums (a) until at least age fifty or (b) in the case of a policy issued after age forty-four, for at least five years from its date of issue.]

(5) A provision as follows:

NOTICE OF CLAIM: Written notice of claim must be given within twenty days after a covered loss starts or as soon as reasonably possible. The notice may be given to the company at its home office or to the company's agent. Notice should include the name of the insured and the policy number.

Optional paragraph: If the insured has a disability for which benefits may be payable for at least two years, at least once every six months after the insured has given notice of claim, the insured shall give the company notice that the disability has continued. The insured need not do this if legally incapacitated. The first six months after any filing of proof by the insured or any payment or denial of a claim by the company will not be counted in applying this provision.

If the insured delays in giving this notice, the insured's right to any benefits for the six months before the date when the insured gives notice will not be impaired.

(6) A provision as follows:

CLAIM FORMS: When the company receives notice of claim, it will send the claimant forms for filing proof of loss. If these forms are not given to the claimant within fifteen days the claimant will meet the proof of loss requirements by giving the company a written statement of the nature and extent of the loss within the time limits stated in the Proofs of

Loss section.

(7) A provision as follows:

PROOFS OF LOSS: If the policy provides for periodic payment for a continuing loss, written proof of loss must be given the company within ninety days after the end of each period for which the company is liable. For any other loss, written proof must be given within ninety days after such loss. If it was not reasonably possible to give written proof in the time required, the company may not reduce or deny the claim for this reason if the proof is filed as soon as reasonably possible. The proof required must be given no later than one year from the time specified unless the claimant was legally incapacitated.

(8) a provision as follows:

TIME OF PAYMENT OF CLAIMS: After receiving written proof of loss, the company will pay _____ [insert period for payment which may not be less frequently than monthly] all benefits then due for _____ [insert applicable term for type of benefits].

(9) A provision as follows:

PAYMENT OF CLAIMS: Benefits will be paid to the insured. Loss of life benefits are payable in accordance with the beneficiary designation in effect at the time of payment. If none is then in effect, the benefits will be paid to the insured's estate. Any other benefits unpaid at death may be paid, at the company's option, either to the insured's beneficiary or estate.

Optional paragraph: If benefits are payable to the insured's estate or a beneficiary who cannot execute a valid release, the company can pay benefits up to one thousand dollars to someone related to the insured or beneficiary by blood or marriage whom the company considers to be entitled to the benefits. The company will be discharged to the extent of any such payment made in good faith.

Optional paragraph: The company may pay all or a portion of any indemnities provided for health care services to the provider, unless the insured directs otherwise in writing by the time proofs of loss are filed. The company cannot require that the services be rendered by a particular provider.

(10) A provision as follows:

PHYSICAL EXAMINATIONS AND AUTOPSY: The company at its own expense may have the insured examined as often as reasonably necessary while a claim is pending and in cases of death of the insured the insurer at its own expense also may have an autopsy performed during the period of contestability unless prohibited by law. The autopsy must be performed in South Carolina.

(11) A provision as follows:

LEGAL ACTIONS: No legal action may be brought to recover on this policy within sixty days after written proof of loss has been given as required by this policy. No such action may be brought after six years from the time written proof of loss is required to be given.

(12) A provision as follows:

CHANGE OF BENEFICIARY: The insured can change the beneficiary at any time by giving the company written notice. The beneficiary's consent is not required for this or any other change in the policy, unless the designation of the beneficiary is irrevocable.

(13) A provision as follows:

CONFORMITY WITH STATE STATUTES: Any provision of this policy which, on its effective date, is in conflict with the laws of the state in which the insured resides on that date is amended to conform to the minimum requirements of such laws."

Misstatement of age

SECTION 4. Section 38-71-370(2) of the 1976 Code is amended to read:

"(2) A provision as follows:

MISSTATEMENT OF AGE: If the insured's age has been misstated, the benefits will be those the premium paid would have purchased at the correct age."

Required provision

SECTION 5. Section 38-71-370(3) of the 1976 Code is amended to read:

"(3) A provision as follows:

OTHER INSURANCE IN THIS INSURER:

If the insured has more than one policy ________ [insert designation for limitation such as policy form-type-form], only one policy chosen by the insured will be effective. The company shall refund all premiums paid for all the other policies.

Optional paragraph: If the insured has more than one policy with this company providing a total indemnity for_____ [insert type of coverage or coverages] of more than $_________ [insert maximum limit of indemnity or indemnities] the excess insurance is void. The premiums paid for the excess must be returned to the insured.

On every application for insurance the insurer shall ask for the amount of insurance which the applicant currently has in force with such insurer. If the insurer fails to ascertain the amount of insurance which an applicant has in force, all policies issued by the insurer to the applicant remain in force an the insurer is liable for all benefits payable thereunder, unless the applicant has misrepresented the amount of existing coverage on the application.

In all cases where the applicant indicates that other life, accident, and health insurance is in force with the insurer or the insurer's company, the insurer shall provide the applicant with the total amount of existing coverage with the insurer or insurer's company within sixty days."

Unpaid premiums

SECTION 6. Section 38-71-370(7) of the 1976 Code is amended to read:

"(7) A provision as follows:

UNPAID PREMIUM: When a claim is paid, any premium due and unpaid may be deducted from the claim payment."

Illegal occupation

SECTION 7. Section 38-71-370(8) of the 1976 Code is amended to read:

"(8) A provision as follows:

ILLEGAL OCCUPATION: The company is not liable for any loss which results from the insured committing or attempting to commit a felony or from the insured engaging in an illegal occupation."

Intoxicants and narcotics

SECTION 8. Section 38-71-370(9) of the 1976 Code is amended to read:

"(9) A provision as follows:

INTOXICANTS AND NARCOTICS: The company is not liable for any loss resulting from the insured being drunk or under the influence of any narcotic unless taken on the advice of a physician."

Required provision

SECTION 9. Section 38-71-610(2) of the 1976 Code is amended to read:

"(2) This section may not be construed to relieve any policyholder from paying any premium or portion thereof, nor may it be construed so as to prevent termination for any other valid reason."

Group policy

SECTION 10. Article 5, Chapter 71, Title 38 of the 1976 Code is amended by adding:

"Section 38-71-735. No policy of group accident, group health, or group accident and health insurance may be delivered in this State unless it contains in substance the following provisions, or provisions which in the opinion of the Commissioner are more favorable to the persons insured, or at least as favorable to the persons insured, and more favorable to the policyholder. However, (1) items (f) and (k) do not apply to policies issued to a creditor; (2) the standard provisions required for individual policies do not apply to group policies; and (3) if any provision of this section is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the Commissioner, shall omit from the policy any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of the provision in a manner as to make the provision contained in the policy consistent with coverage provided by the policy.

(a) A provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except the first, during which grace period the policy continues in force, unless the policyholder has given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder is liable to the insurer for the payment of a pro rata premium for the time the policy was in force during the grace period.

(b) A provision that the validity of the policy may not be contested after it has been in force for two years from its date of issue and that no statement, except fraudulent misstatements, made by any person covered under the policy relating to insurability may be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of two years during the person's lifetime nor unless it is contained in a written instrument signed by the person making the statement. The provision does not preclude the assertion at any time of defenses based upon the person's ineligibility for coverage under the policy or upon other provisions in the policy.

(c) A provision that a copy of the application, if any, of the policyholder must be attached to the policy when issued, that all statements made by the policyholder or by the persons insured are considered representations and not warranties, and that no statement made by any person insured may be used in any contest unless a copy of the instrument containing the statement is or has been furnished to the person or, in the event of the death or incapacity of the insured person, to the individual's beneficiary or personal representative.

(d) A provision setting forth the conditions if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of the individual's coverage.

(e) If the premiums or benefits vary by age, there must be a provision specifying an equitable adjustment of premiums or of benefits, or both, to be made in the event the age of a covered person has been misstated. The provision must contain a clear statement of the method of adjustment to be used.

(f) A provision that the insurer will issue to the policyholder for delivery to each person insured a certificate setting forth a statement as to the insurance protection to which that person is entitled, to whom the insurance benefits are payable, and a statement as to any family member's or dependent's coverage.

(g) A provision that written notice of claim must be given to the insurer within twenty days after the occurrence or commencement of any loss covered by the policy. Failure to give notice within the time does not invalidate nor reduce any claim if it can be shown not to have been reasonably possible to give the notice and that notice was given as soon as was reasonably possible.

(h) A provision that the insurer will furnish to the person making claim, or to the policyholder for delivery to such person, such forms as are usually furnished by it for filing proof of loss. If the forms are not furnished before the expiration of fifteen days after the insurer received notice of any claim under the policy, the person making the claim is considered to have complied with the requirements of the policy as to proof of loss upon submitting within the time fixed in the policy for filing proof of loss, written proof covering the occurrence, character, and extent of the loss for which claim is made.

(i) A provision that in the case of claim for loss of time for disability, written proof of the loss must be furnished to the insurer within ninety days after the commencement of the period for which the insurer is liable, and that subsequent written proofs of the continuance of the disability must be furnished to the insurer at intervals the insurer may reasonably require, and that in the case of claim for any other loss, written proof of the loss must be furnished to the insurer within ninety days after the date of the loss. Failure to furnish proof within the time does not invalidate nor reduce any claim if it was not reasonably possible to furnish the proof within that time so long as the proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity of the claimant, later than one year from the time proof is otherwise required.

(j) A provision that all benefits payable under the policy other than benefits for loss of time will be paid not more than sixty days after receipt of proof of the loss. Subject to proof of loss, all accrued benefits payable under the policy for loss of time will be paid not less frequently than monthly during the continuance of the period for which the insurer is liable, and that any balance remaining unpaid at the termination of liability will be paid as soon as possible after receipt of the proof.

(k) A provision that benefits for loss of life of the person insured are payable to the beneficiary designated by the person insured. If the policy contains conditions pertaining to family status the beneficiary may be the family member specified by the policy terms. In either case, payment of these benefits is subject to the provisions of law of this State if no such designated or specified beneficiary is living at the death of the person insured. All other benefits of the policy are payable to the person insured. The policy also may provide that if any benefit is payable to the estate of a person or to a person who is a minor or otherwise not competent to give a valid release, the insurer may pay the benefit, up to an amount not exceeding five thousand dollars, to any relative by blood or connection by marriage of the person who is considered by the insurer to be equitably entitled to the benefit.

(l) A provision that the insurer at its own expense may examine the person of the individual for whom claim is made as often as reasonably necessary while a claim is pending and in cases of death of the insured the insurer at its own expense also may have an autopsy performed during the period of contestability unless prohibited by law. The autopsy must be performed in this State.

(m) A provision that no action at law or in equity may be brought to recover on the policy before the expiration of sixty days after written proof of loss has been filed in accordance with the requirements of the policy and that no such action may be brought at all unless brought within six years after the time written proof of loss is required to be furnished.

(n) In the case of a policy issued to a creditor, a provision that the insurer will furnish the policyholder for delivery to each debtor insured under the policy a certificate of insurance describing the coverage and specifying that the benefits payable first must be applied to reduce or extinguish the indebtedness."

Group policy

SECTION 11. Section 38-71-810 of the 1976 Code is amended to read:

"Section 38-71-810. Any policy or contract of group accident, group health, or group accident and health insurance may provide for readjustment of the rate of premium based on experience thereunder at the end of the first year or of any subsequent year of insurance thereunder. The readjustment may be retroactive only for that policy year. Any refund under any plan for readjustment of the rate of premium based on the experience under group policies and any dividend paid under these policies may be used to reduce the policyholder's contribution to group insurance for the insureds of the policyholder and the excess over the contribution by the employer must be applied by the policyholder for the sole benefit of the insureds."

Blanket policy

SECTION 12. Section 38-71-1010 of the 1976 Code is amended to read:

"Section 38-71-1010. 'Blanket accident and health insurance' is defined to be that form of accident and health insurance covering special groups of individuals as enumerated in one of the following items:

(1) under a policy or contract issued to any common carrier, which must be considered the policyholder, covering a group defined as all individuals who may become passengers on the common carrier;

(2) under a policy or contract issued to an employer, who must be considered the policyholder, covering any group of employees defined by reference to exceptional hazards incident to the employment;

(3) under a policy or contract issued to an employer, who is considered the policyholder, covering employees or independent contractors, or both, under contract to the employer while traveling to and from and while attending meetings at a common location as a group or in groups incident to their employment or contractual arrangement;

(4) under a policy or contract issued to a college, school, or other institution of learning or to the head or principal thereof, which or who must be considered the policyholder, covering students or teachers;

(5) under a policy or contract issued in the name of any volunteer fire department, first aid, or other such volunteer group, which must be considered the policyholder, covering all of the members of the department or group;

(6) under a policy or contract issued to any other similar group which, in the discretion of the Commissioner, may be eligible for issuance of a blanket accident and health policy or contract either under special circumstances, exceptional hazards, or for short periods of duration."

Franchise plan

SECTION 13. Section 38-71-1110 of the 1976 Code is amended to read:

"Section 38-71-1110. 'Accident and health insurance on a franchise plan' is that form of accident and health insurance issued to (1) three or more employees of any corporation, copartnership, or individual employer or any governmental corporation, agency, or department or (2) ten or more members of any trade or professional association, labor union, or any other association having had an active existence for at least two years when the association or union has a constitution or bylaws and is formed in good faith for purposes other than that of obtaining insurance, when (a) the insureds, with or without their dependents, are issued the same form of an individual policy varying only as to amounts and kinds of coverage applied for by the insureds and (b) the employer, union, or association has approved and endorsed the policy being sold to its employees or members. Accident and health insurance on a franchise plan may be written under rates less than the usual rates for the insurance, but all premium rates and discounts the insurer proposes to use must be filed with and approved by the Commissioner as required by Section 38-71-310."

Discrimination

SECTION 14. Section 38-55-50 of the 1976 Code is amended to read:

"Section 38-55-50. An insurer, its agent, or an insurance broker doing business in this State may not make or permit any discrimination in favor of individuals between insureds of the same class and risk involving the same hazards in the amount of the payment of premiums or rates charged for policies of insurance except as provided in Sections 38-57-140, 38-65-310, and 38-71-1110, in the dividends or other benefits payable, or in any other of the terms and conditions of the contracts it makes. An insurer, its agent, or an insurance broker may not make a contract of insurance or agreement as to a contract other than as plainly expressed in the policy issued. An insurer or its officer, agent, solicitor, or representative or an insurance broker may not pay, allow, or give or offer to pay, allow, or give, directly or indirectly, as inducement to the taking of insurance any rebate of premium payable on the policy, any special favor or advantage in the dividends or other benefits to accrue from the policy, any paid employment or contract for services of any kind, or any valuable consideration or inducement not specified in the policy contract of insurance, or give, sell, or purchase or offer to give, sell, or purchase, as inducement to the taking of insurance or in connection therewith, any stocks, bonds, or other securities of an insurer or other corporation, association, or partnership, any dividends or profits to accrue from them, or anything of value not specified in the policy."

Discrimination

SECTION 15. Section 38-71-200 of the 1976 Code is amended to read:

"Section 38-71-200. Discrimination between individuals of the same class in the amount of premiums or rates charged for any policy of insurance covered by this chapter, in the benefits payable thereon, in any of the terms or conditions of the policy, or in any other manner whatsoever is prohibited except as provided in Sections 38-57-140 and 38-71-1110. Whenever any policy of insurance governed by this chapter provides for payment or reimbursement for any service which is within the scope of practice of a licensed podiatrist, licensed oral surgeon, or licensed optometrist, the insured or other person entitled to benefits under the policy is entitled to payment or reimbursement in accordance with the usual and customary fee for the services whether the services are performed by a licensed physician or a licensed podiatrist, a licensed oral surgeon, or a licensed optometrist, notwithstanding any provision contained in the policy, and the policyholder, insured, or beneficiary has the right to choose the provider of the services."

Owner

SECTION 16. Article 1, Chapter 55, Title 38 of the 1976 Code is amended by adding:

"Section 38-55-180. No agent, collector, solicitor, or other employee or representative of an insurer issuing contracts providing for sick, accident, or death benefits and operating on the weekly or monthly industrial plan is considered the owner of any part of the weekly or monthly debit collected by him or that may be under his charge, care, control, or supervision. The debit is considered wholly the property of the insurer in whose name the policies, contracts, or obligations were written or assumed. No former agent, collector, solicitor, superintendent, or other employee or representative of the insurer, within a period of ninety days after the termination of his employment with the insurer, may barter, sell, give, or in any manner transfer to any person or insurer any part of any debit of the insurer or any policies or contracts of the insurer, without the written consent of the insurer formerly employing him. The Commissioner shall revoke the license of any person violating this section."

Repeal

SECTION 17. Sections 38-71-130, 38-71-180 38-71-380, 38-71-390, 38-71-400, 38-71-820, and Article 7, Chapter 71 of Title 38 of the 1976 Code are repealed.

Time effective

SECTION 18. This act takes effect December 1, 1988.