Bill 1264

                    Current Status

Introducing Body:               Senate
Bill Number:                    1264
Ratification Number:            293
Act Number:                     277
Primary Sponsor:                Committee (02)
Type of Legislation:            GB
Subject:                        Insurers, certificates of
                                authority
Companion Bill Number:          1146 4143
Date Bill Passed both Bodies:   Feb 28, 1992
Computer Document Number:       BBM/9711.BD
Governor's Action:              S
Date of Governor's Action:      Mar 10, 1992
Introduced Date:                Feb 04, 1992
Last History Body:              ------
Last History Date:              Mar 10, 1992
Last History Type:              Act No. 277
Scope of Legislation:           Statewide
Sponsor Committee:              Banking and Insurance
Sponsor Committee Number:       02
Type of Legislation:            General Bill

 Bill  Body    Date          Action Description              CMN
 ----  ------  ------------  ------------------------------  ---
 1264  ------  Mar 10, 1992  Act No. 277
 1264  ------  Mar 10, 1992  Signed by Governor
 1264  ------  Mar 04, 1992  Ratified R 293
 1264  House   Feb 28, 1992  Read third time, enrolled for
                             ratification
 1264  House   Feb 27, 1992  Unanimous consent for third
                             reading on next Legislative
                             day
 1264  House   Feb 27, 1992  Read second time
 1264  House   Feb 26, 1992  Committee Report: Favorable     26
 1264  House   Feb 11, 1992  Introduced, read first time,    26
                             referred to Committee
 1264  Senate  Feb 06, 1992  Read third time, sent to House
 1264  Senate  Feb 05, 1992  Read second time, unanimous
                             consent for third reading on
                             Thursday, February 6, 1992
 1264  Senate  Feb 04, 1992  Introduced, read first time,
                             placed on Calendar without
                             reference

(A277, R293, S1264)

AN ACT TO AMEND SECTION 38-5-120, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO REVOCATION AND SUSPENSION OF CERTIFICATES OF AUTHORITY GRANTED TO INSURERS, SO AS TO REVISE THE CONDITIONS UNDER WHICH THE COMMISSIONER MAY ISSUE CERTAIN ORDERS WHEN AN INSURER IS IN AN UNSOUND OR HAZARDOUS CONDITION.

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

Conditions under which the Insurance Commissioner may issue orders

SECTION 1. Section 38-5-120(C) of the 1976 Code, as added by Act 13 of 1991, is amended to read:

"(C) Notwithstanding the provisions of subsection (A), if the commissioner determines that an insurer is in an unsound condition or in a hazardous condition provided in subsection (A)(1) and (3), he may issue an order requiring the insurer to:

(1) reduce the total amount of present and potential liability for policy benefits by reinsurance;

(2) reduce, suspend, or limit the volume of business being accepted or renewed;

(3) reduce general insurance and commission expenses by specified methods;

(4) increase the insurer's capital and surplus;

(5) suspend or limit the declaration and payment of dividends by an insurer to its stockholders or to its policyholders;

(6) file reports in a form acceptable to the commissioner concerning the market value of an insurer's assets;

(7) limit or withdraw from certain investments or discontinue certain investment practices to the extent the commissioner considers necessary;

(8) document the adequacy of premium rates in relation to the risks insured;

(9) file, in addition to regular annual statements, interim financial reports on the form adopted by the National Association of Insurance Commissioners or on a format approved by the commissioner;

(10) disregard credit or an amount receivable resulting from transactions with a reinsurer which is insolvent, impaired, or otherwise subject to a delinquency proceeding;

(11) make appropriate adjustments to asset values attributable to investments in or transactions with parents, subsidiaries, or affiliates;

(12) refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor;

(13) increase the insurer's liability in an amount equal to a contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next twelve months; or

(14) take other action he considers appropriate."

Time effective

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

Approved the 10th day of March, 1992.