Bill 3313

                    Current Status

Bill Number:               3313
Ratification Number:       347
Act Number                 386
Introducing Body:          House
Subject:                   Authority to write certain bonds;
                           Governor deleted

(A386, R347, H3313)

AN ACT TO AMEND SECTIONS 38-15-10 AND 38-15-20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SURETY INSURERS AND THE SPECIAL AUTHORITY REQUIRED FOR WRITING CERTAIN BONDS, FORMS OF THE BONDS, AND THE WITHDRAWAL OF THE SPECIAL AUTHORITY, SO AS TO DELETE THE GOVERNOR FROM THE LIST OF STATE OFFICIALS AUTHORIZED TO ACT UNDER THESE PROVISIONS; TO AMEND SECTION 38-15-40, RELATING TO THE EFFECT OF REDUCTION IN THE VALUE OF BONDS DEPOSITED BY A SURETY INSURER, SO AS TO PROVIDE THAT WHEN THE BONDS REQUIRED OF AN INSURER IN SECTION 38-15-30 ARE REDUCED BELOW THE VALUE OF ONE HUNDRED THOUSAND, RATHER THAN FIFTY THOUSAND, DOLLARS, EXCEPT BY UNEXPECTED FLUCTUATION IN VALUE, THE RIGHT OF THAT INSURER TO DO BUSINESS MAY BE REVOKED OR SUSPENDED; AND TO AMEND SECTION 38-15-50, RELATING TO THE DEPOSIT OF CASH IN TRUST BY A SURETY INSURER IN LIEU OF GIVING BOND OR DEPOSITING SECURITIES, SO AS TO PROVIDE THAT IN LIEU OF DEPOSITING BONDS WITH A MARKET VALUE OF ONE HUNDRED THOUSAND, RATHER THAN FIFTY THOUSAND DOLLARS, AN INSURER MAY SATISFY SECTION 38-15-30 BY DEPOSITING ONE HUNDRED THOUSAND, RATHER THAN FIFTY THOUSAND, DOLLARS IN CASH IN THE NAME OF THE CHIEF INSURANCE COMMISSIONER WITH THE TRUST DEPARTMENT OF A NATIONAL OR STATE BANK OF THIS STATE APPROVED BY THE CHIEF INSURANCE COMMISSIONER.

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

Authority to write certain bonds; Governor deleted

SECTION 1. Section 38-15-10 of the 1976 Code is amended to read:

"Section 38-15-10. No surety insurer authorized to transact business in this State may execute a fidelity or surety bond for an officer or employee of this State or of a county, municipality, or other subdivision of this State or for an officer or employee of a bank, trust company, or other fiduciary corporation organized under the laws of this State except upon the assumption of risk and upon the forms prescribed by law or approved by the Commissioner and the Attorney General. The insurer also shall procure special authority from the Commissioner and the Attorney General for the writing of the fidelity or surety bonds."

Withdrawal of authority to write certain bonds; Governor deleted

SECTION 2. Section 38-15-20 of the 1976 Code is amended to read:

"Section 38-15-20. The Commissioner and the Attorney General shall remove from the list of surety insurers whose bonds are acceptable under Section 38-15-10 the names of insurers who in their judgment fail or refuse to carry out promptly their obligations in good faith."

Effect of reduction in value of bonds; amount of value changed

Section 3. Section 38-15-40 of the 1976 Code is amended to read:

"Section 38-15-40. When the bonds required to be deposited by an insurer in Section 38-15-30 are reduced below the value of one hundred thousand dollars, except by unexpected fluctuation in value, the right of that insurer to do business in this State may be revoked or suspended."

Cash in lieu of bond or securities; amounts and value changed

Section 4. Section 38-15-50 of the 1976 Code is amended to read:

"Section 38-15-50. In lieu of depositing bonds with a market value of one hundred thousand dollars, an insurer may satisfy Section 38-15-30 by depositing one hundred thousand dollars in cash in the name of the Commissioner with the trust department of a national or state bank of this State approved by the Commissioner. The Commissioner shall give the insurer a receipt for the deposit. When the insurer ceases to do business in this State, has settled all claims against it, and has been released from all the bonds upon which it has been taken as surety, the cash deposit must be delivered to the proper party upon presentation of the Commissioner's receipt. While the cash is deposited, its owner is entitled to collect the interest. The cash deposit is liable to the same extent as securities deposited with the Commissioner and subject to like procedure in case of default or insolvency."

Time effective

Section 5. This act takes effect upon approval by the Governor.