South Carolina General Assembly
109th Session, 1991-1992

Bill 705


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Introducing Body:               Senate
Bill Number:                    705
Primary Sponsor:                Committee (02)
Type of Legislation:            GB
Subject:                        Reinsurance facility, recoupment
                                charge
Computer Document Number:       NO5/7276.BD
Introduced Date:                Feb 26, 1991
Last History Body:              Senate
Last History Date:              Feb 26, 1991
Last History Type:              Introduced, read first time, placed
                                on Calendar without reference
Scope of Legislation:           Statewide
Sponsor Committee:              Banking and Insurance
Sponsor Committee Number:       02
Type of Legislation:            General Bill



History


 Bill  Body    Date          Action Description              CMN
 ----  ------  ------------  ------------------------------  ---
 705   Senate  Feb 26, 1991  Introduced, read first time,
                             placed on Calendar without
                             reference

View additional legislative information at the LPITS web site.


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

Indicates Matter Stricken
Indicates New Matter

INTRODUCED

February 26, 1991

S. 705

Introduced by Banking and Insurance Committee

S. Printed 2/26/91--S.

Read the first time February 26, 1991.

A BILL

TO AMEND SECTION 38-77-600, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE REINSURANCE FACILITY RECOUPMENT CHARGE, SO AS TO REVISE THE CALCULATION FOR THE RECOUPMENT AMOUNT; AND TO REPEAL SECTION 38-77-605, RELATING TO THE REQUIREMENT THAT THE RECOUPMENT CHARGE BE DISPLAYED ON PREMIUM NOTICES AND BILLS FOR PRIVATE PASSENGER AUTOMOBILE INSURANCE.

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

SECTION 1. Section 38-77-600 of the 1976 Code, as last amended by Act 148 of 1989, is further amended to read:

"Section 38-77-600. The rate or premium charged by insurers of private passenger automobile insurance must include a facility recoupment charge, which must be added to the appropriate base rate or objective standards rate prescribed in Sections 38-73-455 and 38-73-457. The operating losses of the facility for a twelve-month period must be recouped in the subsequent twelve-month period.

(1) Prior to Before December first of each year, the governing board of the facility shall calculate the recoupment amount, by coverage, by dividing the net facility operating loss, adjusted to reflect prudently incurred expenses, consistent with the provisions of Section 38-73-465, and the time value of money, by mandated coverage for the preceding facility accounting year, by the total number of earned car years in South Carolina, by coverage, for the same period of time. .386 multiplied by the recoupment is to be bourne borne by risks having zero surcharge points under the Uniform Merit Plan promulgated by the commissioner. The remainder of the recoupment (.614 multiplied by the recoupment) rate by coverage for risks which have one surcharge point represents R in the formula, P(1)X + 2P(2)X + 3P(3)X + 4P(4)X + 5P(5)X + 6P(6)X + 7P(7)X + 8P(8)X + 9P(9)X + 10P(1)+10X = R. In this formula to be utilized in determining the facility recoupment charge:

(a) P(1) is the percentage number of risks which have one surcharge point under the Uniform Merit Rating Plan;

(b) P(2) is the percentage number of risks which have two surcharge points under the Uniform Merit Rating Plan;

(c) P(3) is the percentage number of risks which are subject to a surcharge of three points under the Uniform Merit Rating Plan;

(d) P(4) is the percentage number of risks which are subject to a surcharge of four points under the Uniform Merit Rating Plan;

(e) P(5) is the percentage number of risks subject to a surcharge of five points under the Uniform Merit Rating Plan;

(f) P(6) is the percentage number of risks subject to a surcharge of six points under the Uniform Merit Rating Plan;

(g) P(7) is the percentage number of risks subject to a surcharge of seven points under the Uniform Merit Rating Plan;

(h) P(8) is the percentage number of risks subject to a surcharge of eight points under the Uniform Merit Rating Plan;

(i) P(9) is the percentage number of risks subject to a surcharge of nine points under the Uniform Merit Rating Plan;

(j) P(1)+10 or more is the percentage number of risks subject to a surcharge of ten or more points under the Uniform Merit Rating Plan;

(k) X R is the dollar amount by coverage, to be charged all risks having one surcharge point under the Uniform Merit Rating Plan promulgated by the commissioner. This dollar amount, by coverage, is the facility recoupment charge to be added to the base rate or objective standards rate prescribed in Sections 38-73-455 and 38-73-457 for all risks which have one surcharge point.

(l) X is the recoupment dollar amount by coverage to be collected form risks having one or more surcharge points under the Uniform Merit Rating Plan. X is calculated by taking the total recoupment amount by coverage and subtracting the product of the earned coverages for zero point risks times the safe driver recoupment amount.

(2) The facility recoupment charge by coverage to be added to the base rate or objective standards rate for all risks which have one surcharge point under the Uniform Merit Rating Plan is calculated by multiplying X R by a factor of one.

(3) The facility recoupment charge by coverage to be added to the base rate or objective standards rate for all risks which have two surcharge points under the Uniform Merit Rating Plan is calculated by multiplying X R by a factor of two.

(4) The facility recoupment charge by coverage to be added to the base rate or objective standards rate for all risks which are subject to a surcharge of three points under the Uniform Merit Rating Plan is calculated by multiplying X R by a factor of three.

(5) The facility recoupment charge by coverage to be added to the base rate or objective standards rate for all risks which are subject to a surcharge of four points under the Uniform Merit Rating Plan is calculated by multiplying X R by a factor of four.

(6) The facility recoupment charge by coverage to be added to the base rate or objective standards rate for all risks which are subject to a surcharge of five points under the Uniform Merit Rating Plan is calculated by multiplying X R by a factor of five.

(7) The facility recoupment charge by coverage to be added to the base rate or objective standards rate for all risks which are subject to a surcharge of six points under the Uniform Merit Rating Plan is calculated by multiplying X R by a factor of six.

(8) The facility recoupment charge by coverage to be added to the base rate or objective standards rate for all risks which are subject to a surcharge of seven points under the Uniform Merit Rating Plan is calculated by multiplying X R by a factor of seven.

(9) The facility recoupment charge by coverage to be added to the base rate or objective standards rate for all risks which are subject to a surcharge of eight points under the Uniform Merit Rating Plan is calculated by multiplying X R by a factor of eight.

(10) The facility recoupment charge by coverage to be added to the base rate or objective standards rate for all risks which are subject to a surcharge of nine points under the Uniform Merit Rating Plan is calculated by multiplying X R by a factor of nine.

(11) The facility recoupment charge by coverage to be added to the base rate or objective standards rate for all risks which are subject to a surcharge of ten or more points under the Uniform Merit Rating Plan is calculated by multiplying X R by a factor of ten.

(12) In determining the number of surcharge points a risk has for the purposes of this section, no surcharge points assigned under the Uniform Merit Rating Plan because the principal operator of the automobile has not been licensed in any a state for at least one year immediately preceding the writing of the risk or as a result of a failure of any motor vehicle equipment requirement may be considered.

(13) This section applies to all private passenger automobile insurance policies issued or renewed after June 30, 1989. However, insurers unable to comply with the provisions of this section and renewal provisions required by law may comply with this section at any time after June 30, 1989, but in no event not later than October 1, 1989."

SECTION 2. Section 38-77-605 of the 1976 Code is repealed.

SECTION 3. This act takes effect upon approval by the Governor.

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