Current Status Introducing Body:House Bill Number:3246 Primary Sponsor:H. Brown Type of Legislation:GB Subject:Motor vehicle insurance Residing Body:House Companion Bill Number:244 Computer Document Number:BBM/10109JM.93 Introduced Date:19930121 Last History Body:House Last History Date:19940127 Last History Type:Recalled from Committee Scope of Legislation:Statewide All Sponsors:H. Brown Trotter Allison Hutson Stuart Fair Meacham Chamblee Koon Kelley G. Bailey Hallman A. Young Fulmer Keegan Law Townsend Sturkie Jaskwhich Rhoad Holt Corning Sharpe Wofford Stone Wells Shissias Marchbanks Williams Riser Stille Gamble J. Wilder Cato Witherspoon Klauber P. Harris Stoddard Spearman Snow Baker Phillips J. Harris Robinson Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
---- ------ ------------ ------------------------------ --- ------------
3246 House 19940127 Recalled from Committee 25
3246 House 19940120 Committed to Committee 25
3246 House 19930603 Objection withdrawn by Inabinett
Representative
3246 House 19930428 Objection by Representative Harrelson
Anderson
Cobb-Hunter
Inabinett
Simrill
Hines
Kennedy
Keyserling
Breeland
Whipper
Scott
Meacham
Vaughn
A. Young
Neal
J. Brown
Byrd
J. Bailey
Richardson
D. Wilder
R. Smith
3246 House 19930421 Committee Report: Favorable 26
with amendment
3246 House 19930121 Introduced, read first time, 26
referred to Committee
View additional legislative information at the LPITS web site.
Indicates Matter Stricken
Indicates New Matter
RECALLED
January 27, 1994
H. 3246
Introduced by REPS. H. Brown, Trotter, Allison, Hutson, Stuart, Fair, Meacham, Chamblee, Koon, Kelley, G. Bailey, Hallman, A. Young, Fulmer, Keegan, Law, Townsend, Sturkie, Jaskwhich, Rhoad, Holt, Corning, Sharpe, Wofford, Stone, Wells, Shissias, Marchbanks, Williams, Riser, Stille, Gamble, J. Wilder, Cato, Witherspoon, Klauber, P. Harris, Stoddard, Spearman, Snow, Baker, Phillips, J. Harris and Robinson
S. Printed 2/22/94--H.
Read the first time January 21, 1993.
TO AMEND TITLE 38, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO INSURANCE, BY ADDING CHAPTER 78 SO AS TO ENACT THE "CONSUMER FREEDOM OF CHOICE IN MOTOR VEHICLE INSURANCE ACT"; TO AMEND THE 1976 CODE BY ADDING SECTION 38-73-1075 SO AS TO PROHIBIT AN INSURER FROM INCREASING THE PREMIUM ON AN AUTOMOBILE LIABILITY INSURANCE POLICY SOLELY AS A RESULT OF A CLAIM FOR AN AUTOMOBILE ACCIDENT FILED BY AN INSURED IF THE INSURED WAS NOT AT FAULT NOR CONTRIBUTORILY NEGLIGENT; TO AMEND SECTION 38-77-30, AS AMENDED, RELATING TO THE DEFINITION OF "AUTOMOBILE INSURANCE", SO AS TO PROVIDE FOR THE INCLUSION OF THE PERSONAL PROTECTION POLICY AS DEFINED IN SECTION 38-78-30(C); TO AMEND SECTION 38-77-110, AS AMENDED, RELATING TO THE AUTOMOBILE INSURANCE LAW, THE REQUIREMENT ON INSURERS TO INSURE, AND EXCEPTIONS, SO AS TO EXPAND THE EXCEPTIONS WITH RESPECT TO ADDED PERSONAL PROTECTION COVERAGE AS DEFINED IN SECTION 38-78-30(B); TO AMEND THE 1976 CODE BY ADDING SECTION 38-77-355 SO AS TO PROVIDE THAT, IN A CLAIM OR ACTION FOR PERSONAL INJURY OR WRONGFUL DEATH ARISING OUT OF THE OWNERSHIP, OPERATION, USE, OR MAINTENANCE OF A MOTOR VEHICLE, THE COURT SHALL ADMIT INTO EVIDENCE THE TOTAL AMOUNT PAID TO THE CLAIMANT FROM COLLATERAL SOURCES AND SHALL INSTRUCT THE JURY TO DEDUCT FROM ITS VERDICT THE VALUE OF ALL BENEFITS RECEIVED BY THE CLAIMANT FROM COLLATERAL SOURCES; TO AMEND SECTION 38-77-280, AS AMENDED, RELATING TO COLLISION AND COMPREHENSIVE INSURANCE COVERAGE, SO AS TO DELETE THE PROVISIONS OF THAT SECTION AND PROVIDE THAT AFTER A CERTAIN DATE AUTOMOBILE INSURERS MAY REFUSE TO WRITE OR RENEW PRIVATE PASSENGER AUTOMOBILE PHYSICAL DAMAGE INSURANCE COVERAGE, INCLUDING COMPREHENSIVE PHYSICAL DAMAGE, COLLISION, FIRE, THEFT, AND COMBINED ADDITIONAL COVERAGE FOR AN APPLICANT OR EXISTING POLICYHOLDER AND THAT NO PRIVATE PASSENGER AUTOMOBILE PHYSICAL DAMAGE INSURANCE COVERAGE MAY BE CEDED TO THE REINSURANCE FACILITY; TO AMEND SECTION 38-77-30, AS AMENDED, RELATING TO AUTOMOBILE INSURANCE AND THE DEFINITION OF "DAMAGES", SO AS TO PROVIDE THAT THE TERM INCLUDES ACTUAL DAMAGES ONLY; TO AMEND SECTION 38-77-140, RELATING TO AUTOMOBILE INSURANCE AND BODILY INJURY AND PROPERTY DAMAGE LIMITS, SO AS TO QUALIFY "DAMAGES" AS "ACTUAL DAMAGES" AND REQUIRE AN INSURER TO OFFER AN INSURED A RIDER OR ENDORSEMENT FOR AN ADDITIONAL PREMIUM TO COVER LIABILITY FOR PUNITIVE DAMAGES; TO AMEND SECTION 38-77-150, RELATING TO AUTOMOBILE INSURANCE, THE UNINSURED MOTORIST PROVISION, AND DEFENSE OF AN ACTION BY THE INSURER, SO AS TO, AMONG OTHER THINGS, DELETE CERTAIN LANGUAGE, REQUIRE INSURERS TO OFFER HIGHER LIMITS OF UNINSURED MOTORIST COVERAGE, AND PROVIDE THAT BENEFITS PAID PURSUANT TO THIS SECTION ARE SUBJECT TO SUBROGATION AND ASSIGNMENT; TO AMEND SECTION 38-77-160, AS AMENDED, RELATING TO ADDITIONAL UNINSURED MOTORIST COVERAGE AND UNDERINSURED MOTORIST COVERAGE, SO AS TO, AMONG OTHER THINGS, DELETE CERTAIN LANGUAGE, PROVIDE THAT IF AN INSURED IS ENTITLED TO UNINSURED MOTORIST OR UNDERINSURED MOTORIST COVERAGE UNDER MORE THAN ONE POLICY, THE MAXIMUM AMOUNT THE INSURED MAY RECOVER MAY NOT EXCEED THE HIGHEST LIMIT OF SUCH COVERAGE PROVIDED FOR ANY ONE VEHICLE UNDER ANY ONE POLICY, AND PROVIDE THAT UNDERINSURED MOTORIST BENEFITS PAID PURSUANT TO THIS SECTION ARE SUBJECT TO SUBROGATION AND ASSIGNMENT; TO AMEND SECTION 56-9-350, RELATING TO SECURITY FOLLOWING MOTOR VEHICLE ACCIDENTS, VERIFICATION OF INSURANCE COVERAGE FORM TO BE ISSUED FOLLOWING CERTAIN ACCIDENTS, EFFECT OF FAILURE TO RETURN THE FORM, AND UNINVESTIGATED ACCIDENTS, SO AS TO DELETE CERTAIN LANGUAGE AND PROVIDE THAT THE OPERATOR OR OWNER OF A MOTOR VEHICLE INVOLVED IN AN ACCIDENT RESULTING IN PROPERTY DAMAGE OF FOUR HUNDRED DOLLARS OR MORE OR IN BODILY INJURY OR DEATH WITHIN FIFTEEN DAYS AFTER THE ACCIDENT SHALL FORWARD A WRITTEN REPORT OF THE ACCIDENT ON A PRESCRIBED FORM; TO AMEND SECTION 56-10-10, RELATING TO VEHICLE FINANCIAL SECURITY AND OTHER MATTERS AND SECURITY REQUIRED ON REGISTERED VEHICLES, SO AS TO DELETE CERTAIN LANGUAGE AND REQUIRE THAT SECURITY BE MAINTAINED ON EVERY MOTOR VEHICLE REQUIRED TO BE REGISTERED IN SOUTH CAROLINA WHERE THE OWNERS OR OTHER OPERATORS NOT EXCLUDED IN ACCORDANCE WITH SECTION 38-77-340 RESIDE IN THE SAME HOUSEHOLD AND ARE INSUREDS UNDER THE SAME POLICY, IF ONE OF THE OWNERS OR OTHER OPERATORS DOES NOT QUALIFY FOR THE SAFE DRIVER DISCOUNT IN SECTION 38-73-760; TO AMEND SECTION 56-10-220, RELATING TO THE REQUIREMENT THAT A VEHICLE SOUGHT TO BE REGISTERED BE INSURED, SO AS TO DEFINE PERSONS APPLYING FOR REGISTRATION AS PERSONS REQUIRED TO PROVIDE SECURITY ON A MOTOR VEHICLE AS PROVIDED IN SECTION 56-10-10; TO AMEND SECTION 56-10-240, RELATING TO THE REQUIREMENT THAT, UPON THE LOSS OF INSURANCE, THE INSURED OBTAIN NEW INSURANCE OR SURRENDER VEHICLE REGISTRATION AND PLATES, WRITTEN NOTICE BY THE INSURER, SUSPENSION OF REGISTRATION AND PLATES, APPEAL OF SUSPENSION, ENFORCEMENT, AND PENALTIES, SO AS TO DELETE CERTAIN LANGUAGE, FURTHER DESCRIBE AND QUALIFY A MOTOR VEHICLE WHICH IS OR BECOMES AN UNINSURED MOTOR VEHICLE, AND DEFINE THE RESIDENT FOR WHOM THE LAPS OR TERMINATION OCCURS AFTER THREE MONTHS AS ONE WHO DOES NOT QUALIFY FOR THE SAFE DRIVER DISCOUNT UNDER SECTION 38-73-760; TO AMEND CHAPTER 10 OF TITLE 56, RELATING TO MOTOR VEHICLE REGISTRATION, AND FINANCIAL SECURITY, BY ADDING AN ARTICLE 5 SO AS TO ENACT PROVISIONS FOR THE REGISTRATION AND LICENSING OF UNINSURED MOTOR VEHICLES; TO AMEND SECTION 38-77-110, AS AMENDED, RELATING TO AUTOMOBILE INSURANCE, THE REQUIREMENT UPON INSURERS TO INSURE, AND EXCEPTIONS, SO AS TO PROVIDE THAT INSURERS OTHER THAN THOSE DESIGNATED AND APPROVED AS SPECIALIZED INSURERS BY THE CHIEF INSURANCE COMMISSIONER MAY NOT REFUSE TO WRITE OR RENEW AUTOMOBILE INSURANCE POLICIES FOR INDIVIDUAL PRIVATE PASSENGER AUTOMOBILES, IF THE RISK QUALIFIES FOR THE SAFE DRIVER DISCOUNT IN SECTION 38-73-760, OR SMALL COMMERCIAL RISKS, PROVIDE THAT NO INSURER IS REQUIRED TO WRITE OR RENEW PRIVATE PASSENGER AUTOMOBILE INSURANCE IF THE RISK DOES NOT QUALIFY FOR THE SAFE DRIVER DISCOUNT, DELETE CERTAIN LANGUAGE, PROVIDE THAT NO INSURER MAY REFUSE TO WRITE OR RENEW A POLICY, COVERAGE, OR ENDORSEMENT OF AUTOMOBILE INSURANCE BECAUSE OF THE RACE, COLOR, CREED, NATIONAL ORIGIN, ANCESTRY, OR INCOME OF ANYONE WHO SEEKS TO BECOME INSURED, AND PROVIDE THAT AN APPLICANT DENIED COVERAGE MUST BE PROVIDED IN WRITING BY THE DENYING INSURER THE REASON OR REASONS FOR WHICH THE APPLICANT HAS BEEN REFUSED INSURANCE BY THAT INSURER, AT THE TIME OF THE DENIAL; TO AMEND CHAPTER 77 OF TITLE 38, RELATING TO AUTOMOBILE INSURANCE, BY ADDING AN ARTICLE 13 SO AS TO PROVIDE FOR A JOINT UNDERWRITING ASSOCIATION AND PROVIDE, AMONG OTHER THINGS, FOR THE ABOLITION OF THE REINSURANCE FACILITY UPON A CERTAIN DATE, THAT THE ADMINISTRATION OF THE PHASE OUT OF THE FACILITY IS TRANSFERRED TO THE ASSOCIATION, AND THAT, AS OF A CERTAIN DATE, THE FACILITY RECOUPMENT CHARGE MUST NOT BE INCLUDED IN THE RATE OR PREMIUM CHARGED BY THE INSURERS OF PRIVATE PASSENGER AUTOMOBILE INSURANCE TO DRIVERS WHO QUALIFY FOR THE SAFE DRIVER DISCOUNT; TO AMEND SECTION 38-73-455, AS AMENDED, RELATING TO AUTOMOBILE INSURANCE RATES, SO AS TO, AMONG OTHER THINGS, DELETE CERTAIN LANGUAGE, REQUIRE AN AUTOMOBILE INSURER TO OFFER FOUR, RATHER THAN TWO, DIFFERENT RATES FOR AUTOMOBILE INSURANCE, AND PROVIDE THAT, NO LATER THAN NINETY DAYS AFTER THE PASSAGE OF THIS ACT, INSURERS OF AUTOMOBILE INSURANCE MUST FILE WITH THE CHIEF INSURANCE COMMISSIONER RATES FOR PERSONAL PROTECTION POLICIES AS DEFINED BY SECTION 38-78-30 AND REVISED RATES FOR ALL OTHER PRIVATE PASSENGER AUTOMOBILE INSURANCE POLICIES WRITTEN BY THEM; TO AMEND SECTION 38-73-760, AS AMENDED, RELATING TO THE STATE RATING AND STATISTICAL DIVISION AND UNIFORM STATISTICAL PLANS, SO AS TO PROVIDE THAT NO SURCHARGE MAY BE ASSESSED FOR THE FIRST CONVICTION OF SPEEDING LESS THAN TWENTY MILES PER HOUR IF THE PERSON CONVICTED HAS MAINTAINED THE SAFE DRIVER DISCOUNT FOR THE PREVIOUS THREE YEARS, AND PROVIDE THAT NO SURCHARGE MAY BE ASSESSED FOR CERTAIN CONVICTIONS OCCURRING ON OR AFTER JANUARY 1, 1995; TO AMEND SECTION 56-10-270, RELATING TO THE OPERATION OF AN UNINSURED VEHICLE AND PENALTIES, SO AS TO, AMONG OTHER THINGS, INCREASE THE PENALTIES, INCLUDING PROVISIONS FOR THE PERFORMANCE OF PUBLIC SERVICE HOURS; TO AMEND THE 1976 CODE BY ADDING SECTION 38-77-116 SO AS TO PROVIDE THAT, UPON ISSUANCE OF A NEW PRIVATE PASSENGER AUTOMOBILE INSURANCE POLICY, THE INSURANCE COMPANY OR AGENT MUST REVIEW WITH THE NEW APPLICANT A LIST OF DRIVING OFFENSES AND THE RELATED FINE AND PUNISHMENT, AMONG OTHER THINGS; TO PROVIDE THAT, AFTER SEPTEMBER 30, 1994, THE GOVERNING BOARD OF THE JOINT UNDERWRITING ASSOCIATION SHALL CONTRACT WITH ONE OR MORE INSURERS OR BUSINESS ENTITIES TO SERVE AS THE DESIGNATED CARRIER AND SHALL ESTABLISH A PROCEDURE FOR THE SELECTION OF THE DESIGNATED CARRIER, AND PROVIDE THAT COMMISSIONS PAID TO AGENTS FOR POLICIES CEDED TO OR PLACED IN THE ASSOCIATION SHALL BE SET BY THE ASSOCIATION'S BOARD OF DIRECTORS; TO AMEND THE 1976 CODE BY ADDING SECTIONS 38-77-175 AND 56-7-12 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT WHEN THE OPERATOR OR OWNER OF A MOTOR VEHICLE IS ISSUED A TRAFFIC TICKET FOR A MOVING VIOLATION BY A LAW ENFORCEMENT OFFICER, HE MUST BE FURNISHED A WRITTEN REQUEST FORM TO COMPLETE TO VERIFY LIABILITY INSURANCE COVERAGE AND THAT THE FORM MUST BE AS PRESCRIBED BY REGULATION OF THE DEPARTMENT OF HIGHWAYS AND PUBLIC TRANSPORTATION; TO REPEAL ARTICLE 5 OF CHAPTER 77 OF TITLE 38, RELATING TO THE REINSURANCE FACILITY AND DESIGNATED PRODUCERS, SECTION 38-73-1420, RELATING TO THE REQUIREMENT UPON THE BOARD OF GOVERNORS OF THE REINSURANCE FACILITY TO FILE AND EXPENSE COMPONENT AND USE OF THE COMPONENT AFTER APPROVAL, SECTION 38-73-1425, RELATING TO THE FINAL RATE OR PREMIUM CHARGE FOR PRIVATE PASSENGER AUTOMOBILE INSURANCE RISK CEDED TO THE REINSURANCE FACILITY, SECTION 38-77-285, RELATING TO THE REQUIREMENT THAT ALL AUTOMOBILE INSURANCE COVERAGES WRITTEN BY AN INSURER FOR AN INSURED'S AUTOMOBILE MUST BE WRITTEN IN THE SAME POLICY, WITH EXCEPTIONS AND QUALIFICATIONS, SECTION 38-77-920, RELATING TO THE PROVISION THAT INSURERS AND AGENTS MAY NOT REFUSE THE ACCEPTANCE OF AUTOMOBILE INSURANCE, PROPERTY RIGHTS OF CERTAIN AGENTS, AND RESTRICTION OF MAILINGS TO CERTAIN AREAS, SECTION 38-77-940, RELATING TO AUTOMOBILE INSURANCE, AVOIDING CERTAIN CLASSES OR TYPES OF RISKS, EXCEPTIONS, AND CANCELING AN AGENT'S REPRESENTATION, SECTION 38-77-950, RELATING TO UNREASONABLE OR EXCESSIVE USE OF THE REINSURANCE FACILITY BY AN INSURER AND NOTICE TO A POLICYHOLDER THAT HIS POLICY IS IN THE FACILITY, AND SECTION 38-77-960, RELATING TO AUTOMOBILE INSURANCE AGENT'S BUSINESS; TO AMEND SECTION 38-77-111, RELATING TO THE COVERAGES OF AN AUTOMOBILE INSURANCE POLICY WHICH MAY BE CEDED TO THE REINSURANCE FACILITY, SO AS TO SUBSTITUTE THE JOINT UNDERWRITING ASSOCIATION FOR THE REINSURANCE FACILITY AND PROVIDE THAT AN INSURER MAY NOT CEDE COVERAGES UNDER A POLICY THAT IT IS NOT MANDATED BY LAW TO WRITE EXCEPT FOR TORT LIABILITY AND PERSONAL PROTECTION COVERAGES AND UNINSURED MOTORIST COVERAGE FOR THOSE RISKS THAT DO NOT QUALIFY FOR THE SAFE DRIVER DISCOUNT; AND TO PROVIDE FOR A SEVERABILITY CLAUSE, INCLUDING, AMONG OTHER THINGS, A PROVISION THAT IF SECTION 38-78-110 IS FOUND TO BE UNCONSTITUTIONAL OR INVALID, PERSONAL PROTECTION INSURERS HAVE NO OBLIGATION TO PAY PERSONAL PROTECTION BENEFITS WITH RESPECT TO ACCIDENTS OCCURRING ON OR AFTER THE DATE OF THE FINDING OF SUCH UNCONSTITUTIONALITY OR INVALIDITY AND, IN ADDITION, ARE SUBROGATED TO ALL OF THE RIGHTS OF PERSONAL PROTECTION INSUREDS FOR ALL PREVIOUS SUCH BENEFITS PAID.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 38 of the 1976 Code is amended by adding:
Section 38-78-10. This chapter may be cited as the `Consumer Freedom of Choice in Motor Vehicle Insurance Act'.
Section 38-78-20. (A) Under existing law, the ability of a person to recover losses incurred as a result of a motor vehicle accident is limited by factors over which the accident victim has no control. The recovery is dependent on the conduct of the other driver, the amount of liability insurance carried by the other driver, and the financial resources of the other driver. Two individuals who have received identical injuries may recover markedly different amounts. Under existing law, many individuals receive little or no compensation for their losses.
(B) This chapter gives motorists the right to choose the kinds of personal protection available in case of an automobile accident and the amount of financial protection they deem appropriate and affordable. Instead of being forced to buy traditional fault liability insurance to protect strangers, motorists will have the opportunity to buy a new personal protection policy to protect themselves and their family members regardless of fault in the event of a motor vehicle accident. Motorists will also have the right to reject the provisions of this chapter, and thus retain all rights to sue and be sued for both economic and noneconomic loss based on fault, under the existing fault liability insurance system.
(C) The interaction between traditional fault liability insurance and the personal protection policy is as follows:
(1) Tort vs. no-fault:
Motorists who choose the traditional fault liability insurance and who are involved in an accident with any other motorist essentially will retain the system existing now where they have the opportunity to claim and sue based on fault for both economic and noneconomic damages. They will also remain subject to being sued for such liability to others based on fault.
(2) No fault vs. Tort:
Motorists who choose the new personal protection policy system and who are involved in an accident with a motorist who has chosen traditional fault liability insurance will be promptly compensated for their own economic losses regardless of fault. A personal protection insured can claim against and sue the other at fault motorist for economic damages if the damages exceed their personal protection limits and for noneconomic damages if their injury exceeds the verbal threshold. A no-fault driver will also remain subject to being sued for liability to others if the no-fault driver is at fault. This is why no-fault coverage also includes traditional tort liability coverage in at least the minimum limits.
(3) No fault vs. no-fault:
Two motorists who each choose the personal protection policy and who are involved in an accident with each other will be promptly compensated under their own policies for their own economic losses regardless of fault. In this situation, the two motorists who have chosen the personal protection policy do not have the right to claim and sue for noneconomic damages based on fault unless the damages exceed a verbal threshold. If either motorist suffers a loss in excess of his or her policy's benefit levels, that person retains the right to claim and sue for uncompensated economic loss based on fault.
(4) Tort vs. uninsured:
If a motorist who has chosen fault liability insurance is involved in an accident with an uninsured motorist, the policyholder can be compensated for losses under the uninsured motorist provisions of his or her own policy based on fault and has the right to claim against and sue the uninsured motorist for full damages based on fault. The uninsured motorist forfeits any right to claim for property damage up to ten thousand dollars and for noneconomic loss against the motorist who has chosen fault liability insurance except where the motorist choosing fault liability insurance was driving under the influence of alcohol or illegal drugs or committed intentional misconduct and was at fault in the accident. An uninsured motorist may claim against the motorist who has chosen fault liability insurance for economic losses based on fault.
(5) No-fault vs. uninsured:
If a motorist who has chosen the personal protection policy is involved in an accident with an uninsured motorist, the policyholder will be promptly compensated for economic losses under his or her personal protection policy regardless of fault and has the right to claim against and sue the uninsured motorist for noneconomic damages based on fault if the injury exceeds the verbal threshold. The uninsured motorist forfeits any right to claim for the first ten thousand dollars of property damage and for noneconomic loss against the motorist who has chosen the personal protection policy, except where such motorist was driving under the influence of alcohol or illegal drugs or committed intentional misconduct and was at fault in the accident. An uninsured motorist may claim against the motorist who has chosen the personal protection policy for economic losses based on fault.
(D) The initial rate to be charged by each automobile insurer for the basic personal protection policy required by this act and for policies with personal protection and/or uninsured motorist coverage in excess of the basic limits shall be at least fifteen percent lower than the approved rate for the same limits by class and territory for each automobile insurance risk in effect on September 30, 1993. The rate for the basic personal protection policy cannot be increased for automobile insurance policies issued or renewed with effective dates between January 1, 1994, through December 31, 1994.
(E) A motorist who purchases the personal protection policy will have five thousand dollars of property damage liability insurance as part of his mandatory coverage.
(F) To the extent the terms of Section 38-78-20 may differ from the terms of Section 38-78-30, the terms of Section 38-78-30 govern.
Section 38-78-30. As used in this chapter, unless the context otherwise requires:
(A) `Accidental bodily injury' means bodily injury, sickness, or disease, or death resulting therefrom, arising out of the ownership, operation, or use of a motor vehicle, or while occupying such vehicle, which is accidental as to the person insured.
(B) `Added personal protection' means an optional policy, plan, or coverage for personal protection which each insurer issuing motor vehicle liability insurance in this State shall make available in the limits set by Section 38-77-110(B)(5).
(C) `Basic personal protection' means a policy, plan, or coverage for personal protection which provides benefits for net loss resulting from accidental bodily injury resulting from a motor vehicle accident and liability coverage in at least the amounts prescribed by Section 38-77-140. Basic personal protection benefits consist of the following, with an aggregate limit of fifteen thousand dollars per person arising out of one motor vehicle accident:
(1) medical expenses;
(2) loss of income from work, up to two hundred dollars per week;
(3) replacement services loss, up to one hundred dollars per week;
(4) death benefits of five thousand dollars if the death of the injured person occurs within one year after the date of a motor vehicle accident and was a direct result of the accident.
Each basic personal protection insurer is permitted to incorporate in added personal protection benefits coverage such terms, conditions, and exclusions as may be consistent with the premiums charged.
Motorcycles may not be covered by a personal protection policy.
(D) `Cause of action for injury' means a claim for accidental bodily injury for economic or noneconomic loss, or both, caused by the negligent conduct or intentional misconduct of another person, and includes a claim by any person other than a person suffering accidental bodily injury based on such injury, including, but not limited to, loss of consortium, companionship, or any derivative claim.
(E) `Commissioner' means the Chief Insurance Commissioner.
(F) `Dependent' means all persons related to another person by blood, marriage, adoption, or otherwise who reside in the same household at the time of the accidental bodily injury and receive financial services or support for him or her.
(G) `Economic loss' means actual pecuniary loss and actual monetary expenses incurred by or on behalf of an injured person as the result of an accidental bodily injury consisting only of medical expense, work loss, replacement services loss, and death benefits.
(H) `Governmental unit' means the United States government, the government of the State of South Carolina, and any agency, authority, board, department, division, commission, institution, bureau, or like governmental entity of either such government, or any local government in this State, and such units thereof, including, but not limited to, counties, cities, towns, and other regional governments.
(I) `Injured person' means a person who sustains accidental bodily injury when eligible for benefits under a policy providing personal protection. The term also includes, where appropriate, the personal representative of an estate.
(J) `Intentional misconduct' means conduct whereby harm is intentionally caused or attempted to be caused by one who acts or fails to act for the purpose of causing harm or with knowledge that harm is substantially certain to follow when such conduct caused or substantially contributed to the harm claimed for. A person does not intentionally cause or attempt to cause harm (1) merely because his or her act or failure to act is done with the realization that it creates a grave risk of causing harm or (2) if the act or omission causing bodily harm is for the purpose of averting bodily harm to oneself or another person.
(K) `Loss of income from work' means eighty percent loss of gross income from the work the injured person would have continued to perform if he or she had not been injured, reduced by any income from substitute work actually performed by him or her or by income he or she would have earned in available appropriate substitute work he or she was capable of performing but unreasonably failed to undertake. In order to be eligible for these benefits, the injured person must have been in an occupational status, earning or producing income, immediately prior to the accident. Loss of income from work does not include any loss after the death of the injured person, and payment for the period of disability shall not exceed two years from the date of the accident.
Loss of income from work may be excluded from an insured's policy, at the policyholder's request, with an appropriate reduction in the premium.
(L) `Medical expenses' means usual and customary amounts incurred by an injured person for necessary medical, surgical, radiological, dental, chiropractic, ambulance, hospital, medical rehabilitation and professional nursing services, eyeglasses, hearing aids, and prosthetic devices. Medical expense may include nonmedical remedial treatment rendered in accordance with a recognized religious method of healing. The words `incurred by' include medical expenses incurred on behalf of an injured person by a parent or guardian if the injured person is a minor or incompetent, or by a surviving spouse if the injured person is deceased. Personal protection insurers may review medical expenses to assure that the expenses are reasonable and necessary according to generally accepted standards of medical practice. Under basic personal protection and added personal protection, medical expenses are promptly payable to the injured person for covered expenses incurred within two years after the date of the accident. `Medical expenses' do not include:
(1) that portion of a charge for a room in a hospital, clinic, or convalescent or nursing home, or any other institution engaged in providing nursing care and related services, in excess of a reasonable and customary charge for semi-private accommodations, unless medically required; or
(2) treatments, services, products, or procedures that are experimental in nature, or for research, or not primarily designed to serve a medical purpose, or which are not commonly and customarily recognized throughout the medical profession and within the United States as appropriate treatment of the accidental bodily injury, or which are not performed by a professional licensed by the professional's licensing board pursuant to Title 40.
(M) `Medical rehabilitation' means rehabilitation services which are reasonable and necessary to reduce the disability and help to restore the pre-accident level of physical functioning of the injured person.
(N) `Motor vehicle' is defined by Section 38-77-30(7).
(O) `Noneconomic loss' means any loss other than economic loss and includes, but is not necessarily limited to, pain, suffering, inconvenience, physical impairment, mental anguish, emotional pain and suffering, hedonic damages, and loss of any of the following: earning capacity, consortium, society, companionship, comfort, protection, marital care, parental care, filial care, attention, advice, counsel, training, guidance, or education. Noneconomic loss does not include economic loss caused by pain and suffering or by physical impairment.
(P) `Occupying' means to be in or upon a motor vehicle or engaged in the immediate act of entering into or alighting from the motor vehicle.
(Q) `Operation or use' means operation or use of a motor vehicle as a motor vehicle, including, incident to its operation or use as a vehicle, occupying it. Operation or use of a motor vehicle does not cover conduct within the course of a business of manufacturing, selling, or maintaining a motor vehicle, including repairing, servicing, washing, loading, or unloading, nor does it include such conduct not within the course of such a business, unless such conduct occurs while occupying a motor vehicle.
(R) `Owner' means the person or persons, other than a lienholder or secured party, who owns or has title to a motor vehicle or is entitled to the use and possession of a motor vehicle subject to a security interest held by another person. Owner does not include (i) a lessee under a lease not intended as security, or (ii) the United States of America or any agency thereof, except with respect to motor vehicles for which it has elected to provide insurance.
(S) `Person' includes an organization, public or private.
(T) `Personal protection' means a policy, plan, or coverage which provides basic or added personal protection benefits for loss resulting from accidental bodily injury, regardless of fault.
(U) `Personal protection insured' means:
(1) a person identified by name as an insured in a contract providing personal protection benefits;
(2) while residing in the same household with a named insured, the following persons:
(a) a spouse or other relative of a named insured; or
(b) a minor in the custody of a named insured. A person resides in the same household if he or she usually makes his or her home in the same family unit, even though he or she temporarily lives elsewhere;
(3) a person with respect to accidents within this State who sustains accidental bodily injury while occupying or when struck as a pedestrian by a motor vehicle insured for personal protection, unless the person has rejected the coverage under Section 38-78-120.
(V) `Personal protection insurer' means an automobile insurer providing personal protection benefits.
(W) `Replacement services loss' means expenses reasonably incurred in obtaining ordinary and necessary services from others, not members of the injured person's household, in lieu of those the injured person would have performed for the benefit of the household. Replacement services loss does not include any loss incurred after the death of an injured person, and the disability period shall not exceed two years from the date of the accident.
(X) `Resident relative' means a person related to the owner of a motor vehicle by blood, marriage, adoption, or otherwise and residing in the same household. A person resides in the same household if he or she usually makes his or her home in the same family unit, even though temporarily living elsewhere.
(Y) `Serious injury' means an accidental bodily injury which results in death, serious and permanent loss of an important bodily function, permanent and serious bodily injury determined objectively within reasonable medical probability, or serious and permanent disfigurement.
(Z) `Uncompensated economic loss' means that portion of economic loss arising out of an accidental bodily injury of an injured person which exceeds the benefits provided by a personal protection insurer under a policy providing such benefits (except for loss incurred by a deductible under such a policy) and collateral sources.
(aa) `Uninsured motorist' means the owner or operator of a motor vehicle uninsured for either basic personal protection or liability insurance at the limits prescribed by this State's financial responsibility laws or who otherwise fails to comply with the financial responsibility laws of this State.
(bb) `Uninsured motor vehicle' means a motor vehicle required to be registered as to which (i) there is no bodily injury liability insurance and property damage liability insurance, (ii) no bond has been given or cash or securities delivered in lieu thereof, (iii) the owner has not qualified as a self-insurer, and (iv) there is no basic or added personal protection insurance as defined in Section 38-78-30.
(cc) `Reasonable and necessary' means usual and customary charges for necessary medical treatment.
(dd) `Permanent' means an injury whose effects cannot be eliminated by further time for recovery or by further treatment and care, including surgery.
(ee) `Prevailing party' means the insured deemed to be the `prevailing party' for purposes of this section if the award is at least the amount requested in writing of the insurer not less than ten days prior to the trial. The insurer shall be deemed to be the prevailing party if the award is no more than the amount offered by the insurer in writing not less than ten days prior to the trial. There shall be `no prevailing party' if the award is more than offered by the insurer, but less than requested by the insured.
(ff) `Reasonable proof' means itemized medical bills or other medical records necessary to determine specific patient information, dates of treatment, a specific diagnosis, the specific services rendered and the specific charges for each of the services rendered. If an insurer requests information in addition to the proof submitted, they must specifically identify the additional information needed and why it is needed.
(gg) `Serious' means only an injury which has a substantial bearing on the injured person's ability to resume substantially all of his normal activities and lifestyle.
Section 38-78-40. Each motor vehicle required to be registered in this State shall be insured for basic personal protection as defined by Section 38-78-30(C) and security for payment of tort liabilities as required by Section 38-77-140, unless the owner of the motor vehicle exercises his or her right of rejection under Section 38-78-120 or complies with Section 56-10-520 relating to the right to drive without insurance. This insurance may be provided by a contract of insurance or by qualifying as a self-insurer in compliance with Section 56-9-60.
An insurance policy written by a personal protection insurer under this chapter to provide basic personal protection is deemed to include all coverages required by this chapter, including the minimum tort liability coverage. Coverage under basic personal protection meets the requirements of this State's financial responsibility laws.
Section 38-78-50. Every personal protection insured must be offered uninsured motorist coverage as required by Section 38-77-150. Additional uninsured motorist coverage and underinsured motorist coverage must be offered to the insured as required by Section 38-77-160. All other provisions, rights, and obligations in Sections 38-77-150 and 38-77-160 apply to the personal protection insured and the insurer. A personal protection insured may not recover under the uninsured motorist provision of the personal protection policy if the personal protection insured was at fault in the accident. Noneconomic damages may only be recovered under this provision if the threshold as defined in Section 38-78-110 is reached.
Section 38-78-55. Regardless of the number of motor vehicles involved, policies issued, persons covered, claims made, or premiums paid, the liability limits for multiple coverages under one or more automobile insurance policies must not be combined or added together to determine the maximum limit of coverage available to an injured person. Unless the insurance policy or contract clearly provides otherwise, the policy or contract may provide that if two or more policies, plans, or coverages apply equally to the same accident, the highest limit of liability applicable is the maximum amount available to an injured person under any one of the policies, plans, or coverages.
Section 38-78-60. (A) A personal protection insurer shall pay to a personal protection insured benefits for accidental bodily injury sustained within the United States, its territories, or possessions or Canada.
(B) A personal protection policy issued in this State contains coverage such that it satisfies the liability insurance requirements of the financial responsibility laws of any other state or Canadian province in which the insured motor vehicle is operated.
Section 38-78-70. (A) A personal protection insurer has no obligation to provide benefits to or on behalf of an injured person who at the time of the accident:
(1) was involved in a motor vehicle accident while committing a felony or while voluntarily occupying a motor vehicle that he or she knew to be stolen. If the person dies as a result of his or her own intentional misconduct, his or her survivors are not entitled to personal protection for loss arising from the decedent's injury or death;
(2) was driving under the influence of alcohol or illegal drugs;
(3) was occupying an uninsured motor vehicle owned by the person;
(4) was guilty of intentional misconduct. If the person dies as a result of his or her own intentional misconduct, his or her survivors are not entitled to personal protection for loss arising from the decedent's injury or death;
(5) has rejected the limitation on his or her right to sue under Section 38-78-120;
(6) was an uninsured motorist;
(7) was operating or occupying a motor vehicle with three or fewer load bearing wheels;
(8) was operating an insured vehicle without the express or implied consent of the owner; or
(9) was injured while occupying a motor vehicle owned by, or furnished or available for the regular use of, the injured person, or the injured person's resident spouse or relative, if such motor vehicle is not described in the policy under which a claim is made, or is not a newly acquired or replacement motor vehicle covered under the terms of the policy.
(B) A personal protection insurer may include in personal protection coverage any person under subsection (A) if the insurer states its intent to do so clearly on the policy.
Section 38-78-80. At the option of the personal protection insurer, personal protection benefits are payable to any of the following persons:
(1) the injured person;
(2) the parent or guardian of the injured person, if the injured person is a minor or incompetent;
(3) a survivor, executor, or administrator of the injured person; or
(4) any other person or organization rendering the services for which payment is due.
Section 38-78-90. (A) Subject to Section 38-78-80, a person who is entitled to receive personal protection benefits may claim the benefits in the following order up to the limits of personal protection in the listed category:
(1) personal protection covering the motor vehicle involved in the accident, if the person injured was an occupant of or was struck by the motor vehicle. If the personal protection insurer providing such insurance disclaims coverage, the injured person shall be entitled to benefits under any contract of personal protection insurance under which he is a personal protection insured and the insurer making such payments shall be entitled to contest the disclaimer and seek full reimbursement from the insurer disclaiming coverage;
(2) the personal protection under which the injured person is or was an insured.
(B) If two or more insurers at the same priority level are obligated to pay personal injury benefits, the insurer against whom the claim is first made shall pay the claim and may thereafter, recover pro rata contributions from any other insurer at the same priority level for the cost of the payments and for processing the claim. Disputes among insurers may be resolved only by inter-company arbitration or inter-company agreement. For purposes of this section, an unoccupied parked motor vehicle is not a motor vehicle involved in an accident unless it is parked in such a way as to cause an unreasonable risk of injury.
Section 38-78-100. (A) A personal protection insurer is obligated to indemnify an injured person, except that benefits payable for the same accidental bodily injury under state-mandated disability coverage or workers' compensation or similar occupational compensation act shall be subtracted from the personal protection benefits payable to the injured person.
(B) A basic personal protection insurer must offer a deductible to the named insured of a personal protection policy in the amounts of two hundred fifty dollars, five hundred dollars, and one thousand dollars to apply with respect to a claim by the named insured or a person residing in the same household with the named insured. If the named insured accepts such offer, the rate must be reduced for such coverage in an amount filed by the insurer and approved by the commissioner. The named insured is not required to accept the offer and may choose personal protection coverage without a deductible other than for property damage caused by an uninsured motorist.
Section 38-78-110. (A) Any person who registers, operates, maintains, or uses a motor vehicle on the public roadways of this State and their resident relatives shall, as a condition of such registration, operation, maintenance, or use of such motor vehicle and use of the public roadways shall be conclusively presumed to have accepted the limitations on his tort rights and liabilities in this chapter unless he has filed a rejection under Section 38-78-120.
(B) Tort liability with respect to accidents occurring in this State and arising out of the ownership, maintenance, or use of a motor vehicle is abolished with respect to any person entitled to benefits pursuant to Section 38-78-30(C) except to the extent such person has sustained an injury as defined in subsection (C) of this section or except to the extent such person has sustained actual economic loss in excess of the limits of any applicable personal protection policy. Provided, no person may recover noneconomic loss for personal injury except as provided in subsection (C).
(C) In any action of tort brought against the owner, registrant, operator, or occupant of a motor vehicle with respect to which security has been provided as required in this chapter, or against any person or organization legally responsible for his acts or omissions, a plaintiff may recover damages in tort for pain, suffering, mental anguish, and inconvenience because of bodily injury, sickness, or disease arising out of the ownership, maintenance, operation, or use of such motor vehicle only in the event that the injury reaches one of the following thresholds:
(1) the injury or disease consists in whole or in part of permanent and serious disfigurement;
(2) permanent and serious bodily injury, determined objectively, within reasonable medical probability;
(3) permanent and serious loss of an important bodily function; or
(4) death.
(D) In any action where the defendant contends that the plaintiff's injury does not meet the standards set forth in section (C), either party may seek summary judgment on that issue. If a motion is made, the court may determine at least thirty days before the date set for trial whether there is a material issue of fact as to whether the injury meets the standards of section (C) or if not, render summary judgment in accordance with the undisputed facts. If the facts regarding the nature of the injury are undisputed, the question as to whether or not the facts render the injury as meeting the standards of section (C) is a question of law to be decided by the court. In any action to be tried before a jury where the defendant contends the plaintiff's injury is not a serious and permanent injury but the defendant concedes or the court determines that there is a material issue of fact as to whether the plaintiff's injury meets the standards of section (C) then, upon motion of the defendant, that issue shall be separately tried and no other evidence as to plaintiff's noneconomic loss shall be received until that issue has been resolved. After resolution of that issue, the amount of the plaintiff's noneconomic loss may be tried before the same jury or a different jury, as the court may in its discretion decide.
Section 38-78-120. (A) Any person may refuse to consent to the limitations on his tort rights and liabilities. To ensure preservation of the right to choose to reject any limitations on tort rights and liability contained in this chapter, any person may execute a form approved by the commissioner for rejecting such limitations. Within sixty days after the enactment of this chapter, a temporary committee composed of the commissioner, the Consumer Advocate, two representatives of the South Carolina Bar, (one specializing in the defense of claims and one specializing in the prosecution of claims) appointed by the Governor, a representative of an automobile insurer appointed by the Consumer Advocate, a member of the judiciary appointed by the Chief Justice of the Supreme Court, an insurance agent appointed by the commissioner, and one person specializing in readability appointed by the Governor shall formulate the rejection form to be used by all insurers in South Carolina. The rejection forms for personal protection insurance shall meet the readability index of no higher than the ninth grade level on the Flesch Reading Ease Test. The committee shall also develop a brochure at no higher than the ninth grade level that must be enclosed with the policyholder's renewal notice the first time the policy is renewed after the effective date of this chapter.
(B) The form shall establish the effective date of such a rejection. Any rejection by a person who is under a legal disability shall be made on behalf of such person by a parent, legal guardian, conservator, or committee and shall remain in effect until revoked or until the person is no longer under legal disability, whichever is sooner. The failure of such guardian, parent, conservator, or committee of a person under a legal disability to file a rejection, within six months from the date that this chapter would otherwise become applicable to such person, is deemed to be an affirmative acceptance of the limitations on tort liability. Any person who at the time of an accident does not have basic personal protection but has not formally rejected such limitations and has in effect security equivalent to that required by Section 38-77-140 is deemed to have fully rejected the tort limitations for that accident only.
(C) A rejection of tort limitations must be immediately filed with the insurance company or agent who provides the insurance policy and is effective on the effective date of the policy. The rejection applies to any motor vehicle accident occurring on or after that date. The rejection remains effective until it is revoked in writing on a form approved by the commissioner at the time of renewal or issuance of a new policy by the purchase of a tort policy. The revocation of the rejection is effective until it is withdrawn in a manner prescribed by the commissioner. The rejection form must be provided by the insurer or agent to the insured upon the written request of the insured or the request of a person with the legal capacity to ask for the insured.
(D) The commissioner shall establish and maintain a program designed to assure that all consumers are adequately informed about the comparative cost of personal protection insurance and liability insurance for those persons who choose to reject limitations on tort rights and liabilities, as well as the benefits, rights and responsibilities of insureds under each type of insurance.
(E) A person who has personal protection coverage or who rejects tort limitations on a form approved by the commissioner is bound by that choice and is precluded from claiming liability of any party based on being inadequately informed as to the coverage or rejection. This restriction also applies to relatives residing in the same household who are covered by the same policy.
(F) Each motor vehicle insurer issuing motor vehicle liability insurance in this State may require that all policies within a household be either personal protection policies or liability policies which satisfy the financial responsibility laws of this State. However, policies purchased separately by members of the same household may be different policies.
(G) To further insure preservation of the right to reject the limitations on tort rights contained in this chapter, the commissioner shall establish procedures whereby any person who does not own a motor vehicle and who is not a resident relative of such an owner may, after sustaining accidental bodily injury, execute a form prescribed by the commissioner for rejecting such limitation within sixty days after the date of the accident. If any personal protection benefits are paid before the rejection is effective, the personal protection insurer has a right of subrogation for any payments made through a tort recovery.
Section 38-78-125. (A) A person may bring a cause of action for injury against a person who caused him actual economic loss, for any uncompensated economic loss.
(B) A person suffering accidental bodily injury while occupying or when struck by a motor vehicle which is insured for personal protection and who is not at the time of the accident covered by a rejection of limitations on tort rights and liabilities under Section 38-78-120 and is not an uninsured motorist may receive personal protection benefits applicable to the motor vehicle and has a right to claim uncompensated economic loss against the personal protection insured. A person who files a claim under this subsection has the same rights and duties as a personal protection insured with respect to a claim by that insured.
(C) An uninsured injured motorist may not claim in tort for property damage except for such damage that exceeds ten thousand dollars or for noneconomic damages, unless the motor vehicle operator is driving under the influence of alcohol or illegal drugs or is guilty of intentional misconduct. An uninsured motorist retains fault liability with respect to others. A person driving under the influence of alcohol or illegal drugs may not claim in tort for either economic or noneconomic damages against a person who has rejected tort limitations. A person who rejects tort limitations shall not collect personal protection benefits unless he or she has revoked his or her rejection under Section 38-78-120(C).
(D) A personal protection insured has a cause of action against another personal protection insured for property damage to recover any required deductible.
Section 38-78-140. (A) Personal protection benefits are payable monthly as loss accrues. Loss accrues not when the injury occurs but as work loss, replacement services loss, or medical expense is incurred. The benefits are overdue if they are not paid within thirty days after the personal protection insurer receives reasonable proof of the fact and the amount of loss sustained, except that a personal protection insurer may accumulate claims for a period not to exceed thirty days, in which case benefits are not overdue if they are paid within twenty days after the period of accumulation. If reasonable proof is not supplied for the whole claim, the amount supported by reasonable proof is overdue if it is not paid within thirty days after the proof is received by the insurer. Any part or all of the remainder of the claim that is later supported by reasonable proof is overdue if it is not paid within thirty days after the proof is received by the insurer. To determine the extent to which any benefits are overdue, a payment is treated as made on the date a draft or other valid instrument is mailed or, if not so posted, the date of delivery. The personal protection insurer may pay personal protection benefits directly to a person who supplies necessary products, services, or accommodations to the injured person. All overdue payments shall bear an annual eighteen percent interest rate.
(B) In addition to the interest payments, if the insured has filed suit to recover overdue payments, the insured shall be entitled to reasonable attorney's fees and costs incurred in such suit. The recovery set forth here is the exclusive remedy for an insurer's failure to pay or delay in paying personal protection benefits for conduct of an insurer arising out of the manner in which the insurer denied or delayed payment. An attorney shall not charge a separate fee to collect benefits except those incurred in connection with the suit for overdue payments. In any action by or on behalf of an insurer, a provider or an insured, attorney's fees shall be awarded only to the prevailing party.
(C) An insurer who rejects a claim for basic personal protection benefits shall give to the claimant prompt written notice of the rejection, specifying the reason.
Section 38-78-150. (A) Personal protection benefits, except medical benefits, are exempt from garnishment, attachment, execution, or any other process or claim to the extent that wages or earnings are exempt under any applicable law.
(B) An agreement for assignment of any right to personal protection benefits payable in the future, except for medical benefits, is unenforceable except to the extent that the benefits are for the cost of products, services, or accommodations provided or to be provided by the assignee or that the benefits are for loss of income from work or replacement services and are assigned to secure payment of alimony, maintenance, or child support.
Section 38-78-160. An insurer is allowed a reasonable attorney fee for defending a claim for benefits that is fraudulent or so excessive as to have no reasonable foundation. The fee may be treated as an offset against benefits due or which thereafter accrue. The insurer may recover from the claimant any part of the fee not offset or otherwise paid.
Section 38-78-170. An insurer under a policy of personal protection insurance may require written notice to be given as soon as practicable after an accident involving a secured vehicle for which it provides coverage.
Section 38-78-190. If no personal protection benefits have been paid other than death benefits, a person may bring an action against the personal protection insurer not later than two years after the accidental bodily injury occurred. If personal protection benefits have been paid, a person may bring an action to recover further benefits not later than two years after the last payment of benefits or four years after the date the accidental bodily injury occurred, whichever is earlier.
Section 38-78-200. (A) If the mental or physical condition of an injured person is material to any claim for past or future personal protection benefits, the injured person shall submit to reasonable mental or physical examinations by a physician or physicians designated by the insurer, at the insurer's expense. The examinations shall take place at a reasonably convenient time and location. A personal protection insurer may include provisions of this nature in a personal protection policy.
(B) If after a request by a personal protection insurer a person refuses to submit to reasonable mental and physical examinations by a physician or physicians designated by the insurer or refuses to undergo mental or rehabilitation services payable by the insurer, the insurer, on written notice, may deny benefits applicable to the period during which the person refuses to submit to the examination.
Section 38-78-210. (A) On request by a claimant or personal protection insurer, an employer shall provide information on a form approved by the commissioner, including the work records and earnings, regarding an employee who has filed a claim for personal protection benefits. On request of the claimant or insurer the information must cover the period specified by the claimant or insurer making the request and may include a reasonable period before, and the entire period after, the injury.
(B) The claimant, upon request by the insurer, must provide to the insurer the names and addresses of the physicians and medical facilities rendering diagnosis or treatment in regard to the injury or to a relevant injury and the claimant shall authorize the insurer to inspect and copy any relevant medical records.
(C) Every physician or other health care provider, including, but not limited to, a hospital, clinic, or other medical institution providing, before or after an injury resulting from a motor vehicle accident upon which a claim for personal protection benefits is based, any products, services, or accommodations in relation to that or any other injury, or in relation to a condition claimed to be connected with that or any other injury, shall, if requested to do so by the personal protection insurer against whom the claim has been made, furnish a written report of the history, condition, treatment, and the dates and costs of such treatment, of the injured person. Every such physician or other health care provider, hospital, clinic, or other medical institution shall also promptly produce and permit the inspection and copying of its records regarding such history, condition, and treatment, and the dates and costs of treatment. A physician providing such information to a personal protection insurer shall be entitled to a fee of fifty cents per page for providing copies of the medical record, provided a minimum fee of ten dollars plus postage is authorized. Physicians may charge other reasonable fees for the production of other reports or information requested by the personal insurance carrier.
(D) No cause of action for violation of a physician-patient privilege or invasion of the right of privacy is allowed against any physician or other health care provider, hospital, clinic, or other medical institution complying with the provisions of this section.
(E) The person requesting records and a sworn statement under this section shall pay all reasonable costs connected therewith.
(F) A court may order or prohibit discovery of any records under this section in case of any dispute as to the right of a claimant or insurer to discover the information required to be disclosed by this section.
Section 38-78-240. A physician or other health care provider, including, but not limited to, a hospital, clinic, or other health care institution rendering treatment to an injured person, may charge only a reasonable amount for the products, services, and accommodations rendered. The charge shall not exceed the amount the person or institution customarily charges for the products, services, and accommodations in cases not involving automobile insurance.
Section 38-78-260. The commissioner shall adopt rules which encourage personal protection insurers to institute incentives for personal protection insureds to install, maintain, and make use of injury-reducing devices such as seat and harness belts, air bags, and child restraint systems.
Section 38-78-280. (A) Each insurer authorized to transact business or transacting business in this State shall file with the commissioner a form approved by the commissioner which states that any contract of motor vehicle liability insurance, wherever issued, covering the maintenance or use of a motor vehicle while the motor vehicle is in this State, is deemed to satisfy Section 38-78-40 once the vehicle has been continuously present in this State for thirty days unless the named insured has rejected the limitations on tort rights and liabilities under Section 38-78-120.
(B) If a person is entitled to personal protection benefits or their equivalent under the requirements of more than one state, the person shall elect to recover under the laws of one state. The election represents the exclusive source of recovery of all personal protection benefits, or their equivalent, paid or payable under the financial responsibility requirements of that or any other state.
Section 38-78-290. All insurance coverages provided under this chapter are subject to such terms, conditions, and exclusions which have been approved by the commissioner.
Section 38-78-325. The commissioner may promulgate regulations for effective administration which are fair, equitable, and consistent with the purpose of this chapter."
SECTION 2. The 1976 Code is amended by adding:
"Section 38-73-1075. No insurer shall increase the premium on an automobile liability insurance policy solely as a result of a claim for an automobile accident filed by an insured if the insured was not at fault nor contributorily negligent.
An insured may notify in writing the commissioner if the insured believes that an insurer has increased his premium in violation of this section. The commissioner shall investigate the complaint, take appropriate action, and send written notice of his actions to the insured."
SECTION 3. Section 38-77-30(1) of the 1976 Code, as last amended by Act 443 of 1992, is further amended to read:
"(1) `Automobile insurance' means automobile bodily injury and property damage liability insurance, including medical payments and uninsured motorist coverage, and automobile physical damage insurance such as automobile comprehensive physical damage, collision, fire, theft, combined additional coverage, and similar automobile physical damage insurance and economic loss benefits as provided by this chapter written or offered by automobile insurers. An automobile insurance policy includes a motor vehicle liability policy as defined in item (7) of Section 56-9-20 and any nonowner automobile insurance policy which covers an individual private passenger automobile not owned by the insured, a family member of the insured, or a resident of the same household as the insured and includes the personal protection policy as defined in Section 38-78-30(C)."
SECTION 4. Section 38-77-110(B) of the 1976 Code, as added by Act 148 of 1989, is amended by adding the following:
"(5) two hundred fifty thousand dollars for added personal protection coverage as defined in Section 38-78-30(B), which may, at the request of the applicant or insured, for an additional charge, include more than two hundred dollars per week for loss of income and more than one hundred dollars per week for replacement services loss."
SECTION 5. Article 3, Chapter 77, Title 38 of the 1976 Code is amended by adding:
"Section 38-77-355. (A) In a claim or action for personal injury or wrongful death arising out of the ownership, operation, use, or maintenance of a motor vehicle, the court shall admit into evidence the total amount paid to the claimant from collateral sources, and the court shall instruct the jury to deduct from its verdict the value of all benefits received by the claimant from collateral sources.
(B) For purposes of this section, `collateral sources' means payments made to the claimant, or on his behalf, by or pursuant to:
(1) automobile liability, uninsured motorist, underinsured motorist, or automobile accident insurance that provides health benefits or income disability coverage;
(2) personal protection benefits paid or payable by law;
(3) payments made from a policy of automobile insurance by or on behalf of a joint tortfeaser, either by way of settlement or judgment.
(C) No claimant may make claim or demand, no court may order payment, and no insurer may pay by way of settlement, covenant not to sue, or trust or loan agreement for an item of damages to the extent that the claimant has already received, or will receive, reimbursement for that item as a result of a collateral source payment as defined in this section."
SECTION 6. Section 38-77-280 of the 1976 Code, as last amended by Act 113 of 1991, is further amended to read:
"Section 38-77-280. (A) Except as provided in subsection (B), all automobile insurers, including those insurance companies writing private passenger physical damage coverages only, shall make collision coverage and either comprehensive or fire, theft, and combined additional coverage available to an insured or qualified applicant who requests the coverage.
Collision coverage must have a mandatory deductible of two hundred fifty dollars, but an insured or qualified applicant, as his option, may select an additional deductible in appropriate increments up to one thousand dollars.
Comprehensive coverage or fire, theft, and combined additional coverages must have a mandatory deductible of two hundred fifty dollars, but an insured, at his option, may select an additional deductible in appropriate increments up to one thousand dollars. This deductible does not apply to auto safety glass. It is an unfair trade practice, as described in Sections 38-57-30 and 38-57-40, for an insurer or an agent to sell collision insurance, comprehensive coverage, or fire, theft, and combined additional coverages unless the insured is notified at the time of application of the savings which may be realized if the applicant or the insured selects a higher deductible. This notice is required only at the time of the initial sale and must be in a form approved by the Chief Insurance Commissioner. An insurer may offer insureds lower deductibles at the insurer's option.
(B) Notwithstanding subsection (A) and Sections 38-77-110 and 38-77-920, automobile insurers may refuse to write automobile physical damage insurance coverage, including automobile comprehensive physical damage, collision, fire, theft, and combined additional coverage, for an applicant or existing policyholder, on renewal, for a motor vehicle customarily operated by an individual, either the named insured or any other operator not excluded in accordance with Section 38-77-340 and who resides in the same household, where one or more of the conditions or factors prescribed in Section 38-73-455 exist. In addition, automobile insurers may refuse to write physical damage insurance coverage to any applicant or existing policyholder, on renewal, who has collected benefits provided under any automobile insurance physical damage coverage during the thirty-six months immediately preceding the effective date of coverage, for two or more total fire losses or two or more total theft losses. Automobile insurers may refuse to write for private passenger automobiles comprehensive physical damage, collision, fire, theft, and combined additional coverage, for an applicant or existing policyholder, on renewal, for a motor vehicle customarily operated by an individual, either the named insured or another operator not excluded in accordance with Section 38-77-340 and who resides in the same household, which does not qualify for the safe driver discount in Section 38-73-760(e).
(C) Notwithstanding Section 38-77-110, automobile physical damage coverage in an automobile insurance policy may be canceled at any time during the policy period by reason of the factors or conditions described in Section 38-73-455(A) or Section 38-77-280(B) which existed before the commencement of the policy period and which were not disclosed to the insurer at the commencement of the policy period.
(D) No policy of insurance which provides automobile physical damage coverage only may be ceded to the facility.
(E) Insurers of automobile insurance may charge a rate for physical damage insurance coverages different than those provided for in Section 38-73-457 if the rates are filed and approved by the Chief Insurance Commissioner. Any applicant or existing policyholder, to be charged this different rate, must be denied the coverage pursuant to subsection (B) at the rate provided in Section 38-73-457.
(F) A carrier may not cede collision coverage, comprehensive coverage, or fire, theft, and combined additional coverages with a deductible of less than two hundred fifty dollars. An insured or qualified applicant may select an additional deductible in appropriate increments up to one thousand dollars. However, the mandatory deductible does not apply to safety glass. Notwithstanding Sections 38-77-110 and 38-77-920, after September 30, 1996, automobile insurers may refuse to write or renew private passenger automobile physical damage insurance coverage, including automobile comprehensive physical damage, collision, fire, theft, and combined additional coverage for an applicant or existing policyholder. After September 30, 1996, no private passenger automobile physical damage insurance coverage may be ceded to the Facility."
SECTION 7. Section 38-77-30(4) of the 1976 Code is amended to read:
"(4) `Damages' includes both actual and punitive damages only."
SECTION 8. Section 38-77-140 of the 1976 Code is amended to read:
"Section 38-77-140. (A) No automobile insurance policy may be issued or delivered in this State to the owner of a motor vehicle or may be issued or delivered by an insurer licensed in this State upon any motor vehicle then principally garaged or principally used in this State, unless it contains a provision insuring the persons defined as insured against loss from the liability imposed by law for actual damages arising out of the ownership, maintenance, or use of these motor vehicles within the United States or Canada, subject to limits exclusive of interest and costs, with respect to each motor vehicle, as follows: fifteen thousand dollars because of bodily injury to one person in any one accident, and, subject to the limit for one person, thirty thousand dollars because of bodily injury to two or more persons in any one accident, and five thousand dollars because of injury to or destruction of property of others in any one accident. Nothing in this article prevents an insurer from issuing, selling, or delivering a policy providing liability coverage in excess of these requirements.
(B) An insurer shall also offer the insured, in accordance with Section 38-77-350, a rider or endorsement for an additional premium to cover such liability for punitive damages. The insured has the option of accepting or refusing coverage for punitive damages.
As a result of passage of this section, all insurers offering bodily injury liability coverage shall file with the Chief Insurance Commissioner, not later than ninety days after the effective date of this act, revised premium rates for bodily injury liability coverage to be effective on automobile insurance policies issued or renewed with effective dates on or after January 1, 1995. The revised rates must be approved by the commissioner and reflect a reduction in the currently approved premium rate for this coverage of at least one and one-half percent. Insurers shall file with the commissioner not later than sixty days after the effective date of this act premium charges for the punitive damages loss coverage. The premium rate for this coverage shall become effective for the automobile insurance policies issued or renewed with effective dates on or after January 1, 1995, and may not be approved if it is more, when combined with the reduced premium rate for the new bodily injury liability coverage with limitations on the recovery of punitive damages, than the bodily injury liability premium rate for that insurer on the effective date of this act; however, after December 31, 1995, an insurer may apply to the Chief Insurance Commissioner for a rate adjustment for such coverage, based on its actual experience."
SECTION 9. Section 38-77-150 of the 1976 Code is amended to read:
"Section 38-77-150. (A) No automobile insurance policy or contract may be issued or delivered unless it contains a provision by endorsement or otherwise, herein referred to as the uninsured motorist provision, undertaking to pay the insured all sums which he is legally entitled to recover as actual damages from the owner or operator of an uninsured motor vehicle, within limits which may be are no less than the requirements of Section 38-77-140 and no more than the insured's bodily injury and property damage liability limits. The uninsured motorist provision shall also provide for no less than five thousand dollars' coverage for injury to or destruction of the property of the insured in any one accident but may provide an exclusion of the first two hundred dollars of the loss or damage.
(B) Automobile insurers shall offer, at the option of the insured and in the manner hereinafter described, higher limits of uninsured motorist coverage in accordance with Section 38-77-350. The offer of higher limits must be made in connection with every initial application for an automobile insurance policy by including a written explanation of the coverage and inquiry of the applicant, in a form prescribed by the Chief Insurance Commissioner, as to whether the applicant desires to purchase uninsured motorist coverage with limits greater than the mandatory coverages described in subsection (A). No such explanation or inquiry need be made with respect to any renewal, replacement, reinstatement, substitute, or modification of the policy. An insured may, at any time and subject to the limits of this section, specifically request in writing uninsured motorist coverage limits greater than that provided on the current or any prior policy.
(C) Insurers shall offer on a form prescribed by the Chief Insurance Commissioner `nonstackable' policies of uninsured motorist coverage containing policy provisions establishing that if the insured accepts this offer:
(1) Regardless of the number of vehicles involved, persons covered, number of premiums paid, or vehicles or premiums shown on the policy or policies under which the insured might otherwise be entitled to benefits, the coverage provided as to two or more motor vehicles under the same or different policies may not under any circumstances be added together, combined with, or stacked to determine the limit of insurance coverage available to an injured person for any one accident, except as provided in item (3) of this subsection (C).
(2) If at the time of the accident the injured person is occupying a motor vehicle, the uninsured motorist coverage available to him is the coverage available as to that motor vehicle.
(3) If the injured person is occupying a motor vehicle which is not owned by him or by a family member residing with him, he is entitled to the highest limits of uninsured motorist coverage afforded for any one vehicle as to which he is named insured. Such coverage is excess over the coverage on the vehicle he is occupying.
(4) The uninsured motorist coverage provided by the policy does not apply to the named insured who is injured while occupying any vehicle owned by the named insured for which uninsured motorist coverage was not purchased.
(5) If at the time of the accident the injured person is not occupying a motor vehicle, he is entitled to select any one limit of uninsured motorist coverage for any one vehicle afforded by a policy under which he is insured as a named insured.
(6) In connection with the offer authorized by this subsection, insurers shall inform the named insured, applicant, or lessee, on a form prescribed by the Chief Insurance Commissioner, of the limitations imposed under this subsection and that such coverage is an alternative to coverage without such limitations. If this form is signed by a named insured, applicant, or lessee, it is conclusively presumed that there was an informed, knowing acceptance of such limitations, and neither the insurance company nor the insurance agent has any liability to the insured for the insured's failure to purchase stackable coverage. When the named insured, applicant, or lessee has initially accepted such limitations, the acceptance applies to any policy which renews, extends, changes, supersedes, reinstates or replaces an existing policy unless the named insured requests deletion of the limitations and pays the appropriate premium for the coverage. Any insurer who provides coverage which includes the limitations provided in this subsection shall file revised premium rates with the Department of Insurance for such uninsured motorist coverage to take effect before initially providing such coverage. The revised rates must reflect the anticipated reduction in loss costs attributable to such limitations but, in any event, must reflect a reduction in the uninsured motorist coverage premium of at least fifteen percent for policies with such limitations. Insurers shall file within ninety days after the effective date of this act, revised premium rates with the Chief Insurance Commissioner to be effective on automobile insurance policies issued or renewed with effective dates on or after January 1, 1995.
(D) Premium rates made by insurers for uninsured motorist coverage must be determined and regulated as premium rates for automobile insurance generally are determined and regulated. The Chief Insurance Commissioner may prescribe shall approve the form to be used in providing uninsured motorist coverage and when prescribed and promulgated no other form may be used.
(E) No action may be brought under the uninsured motorist provision unless copies of the pleadings in the action establishing liability are served in the manner provided by law upon the insurer writing the uninsured motorist provision. The insurer has the right to appear and defend in the name of the uninsured motorist in any action which may affect its liability and has thirty days after service of process on it in which to appear. The evidence of service upon the insurer may not be made a part of the record.
(F) Benefits paid pursuant to this section are subject to subrogation and assignment."
SECTION 10. Section 38-77-160 of the 1976 Code, as last amended by Act 148 of 1989, is further amended to read:
"Section 38-77-160. (A) Automobile insurance carriers insurers shall offer on a form prescribed by the Chief Insurance Commissioner, at the option of the insured in accordance with Section 38-77-350 uninsured underinsured motorist coverage up to the limits of the insured's liability coverage in addition to the mandatory coverage prescribed by Section 38-77-150. Such carriers shall also offer, at the option of the insured, underinsured motorist coverage up to the limits of the insured liability coverage to provide coverage in the event that damages are sustained in excess of the liability limits carried by an at fault insured or underinsured motorist. If, however, an insured or named insured is protected by uninsured or underinsured motorist coverage in excess of the basic limits, the policy shall provide that the insured or named insured is protected only to the extent of the coverage he has on the vehicle involved in the accident. If none of the insured's or named insured's vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with the excess or underinsured coverage. up to the limits selected for the insured's liability coverage to provide coverage in the event the insured becomes legally entitled to collect damages from the owner or operator of an underinsured motor vehicle, as defined in Section 38-77-30(14). The maximum liability of the insurer under the underinsured motorist coverage provided is the lesser of: (1) the difference between the limit of underinsured motorist coverage and the amount paid or payable to the insured by or for any person or organization who is held legally liable for the bodily injury or property damage, or (2) the amount of damages sustained, but not recovered. In no event may the liability of the insurer under such coverage be more than the limits of underinsured motorist coverage provided.
(B) An insured entitled to benefits under an uninsured motorist provision is not entitled to benefits under an underinsured motorist provision. An insured entitled to benefits under an underinsured motorist provision is not entitled to benefits under an uninsured motorist provision.
(C) Insurers shall offer on a form prescribed by the Chief Insurance Commissioner `nonstackable' policies of underinsured motorist coverage containing policy provisions establishing that if the insured accepts this offer:
(1) Regardless of the number of vehicles involved, persons covered, number of premiums paid, or vehicles or premiums shown on the policy or policies under which the insured might otherwise be entitled to benefits, the coverage provided as to two or more motor vehicles under the same or different policies may not under any circumstances be added together, combined with, or stacked to determine the limit of insurance coverage available to an injured person for any one accident, except as provided in item (3) of this subsection (C).
(2) If at the time of the accident the injured person is occupying a motor vehicle, the underinsured motorist coverage available to him is the coverage available as to that motor vehicle.
(3) If the injured person is occupying a motor vehicle which is not owned by him or by a family member residing with him, he is entitled to the highest limits of underinsured motorist coverage afforded for any one vehicle as to which he is named insured. Such coverage is excess over the coverage on the vehicle he is occupying.
(4) The underinsured motorist coverage provided by the policy does not apply to the named insured who is injured while occupying any vehicle owned by the named insured for which underinsured motorist coverage was not purchased.
(5) If at the time of the accident the injured person is not occupying a motor vehicle, he is entitled to select any one limit of underinsured motorist coverage for any one vehicle afforded by a policy under which he is insured as a named insured.
(6) In connection with the offer authorized by this subsection, insurers shall inform the named insured, applicant, or lessee, on a form prescribed by the chief insurance commissioner, of the limitations imposed under this subsection and that such coverage is an alternative to coverage without such limitations. If this form is signed by a named insured, applicant, or lessee, it is conclusively presumed that there was an informed, knowing acceptance of such limitations, and neither the insurance company nor the insurance agent has any liability to the insured for the insured's failure to purchase stackable coverage. When the named insured, applicant, or lessee has initially accepted such limitations, the acceptance applies to any policy which renews, extends, changes, supersedes, reinstates or replaces an existing policy unless the named insured requests deletion of the limitations and pays the appropriate premium for the coverage.
(D) If an insured is entitled to uninsured motorist or underinsured motorist coverage under more than one policy the maximum amount the insured may recover may not exceed the highest limit of such coverage provided for any one vehicle under any one policy. If more than one policy applies, the following is the order of priority: (1) a policy covering a motor vehicle occupied by the injured person at the time of the accident; (2) a policy covering a motor vehicle not involved in the accident under which the injured person is named insured; (3) a policy covering a motor vehicle not involved in the accident under which the injured person is an insured other than a named insured. Coverage available under a lower priority policy applies only to the extent it exceeds the coverage of a higher priority policy. The underinsured motorist coverage does not apply to bodily injury, sickness, or death of an insured while occupying a motor vehicle owned by, furnished, or available for the regular use of the insured, a resident spouse, or resident relative, if such motor vehicle is not described in the policy under which a claim is made, or is not a newly acquired or replacement vehicle covered under the terms of the policy.
(E) Underinsured motorist Benefits benefits paid pursuant to this section are not subject to subrogation and assignment.
(F) No action may be brought under the underinsured motorist provision unless copies of the pleadings in the action establishing liability are served in the manner provided by law upon the insurer writing the underinsured motorist provision. The insurer has the right to appear and defend in the name of the underinsured motorist in any action which may affect its liability and has thirty days after service of process on it in which to appear. The evidence of service upon the insurer may not be made a part of the record. In the event the automobile insurance insurer for the putative at-fault insured chooses to settle in part the claims against its insured by payment of its applicable liability limits on behalf of its insured, the underinsured motorist insurer may assume control of the defense of action for its own benefit. No underinsured motorist policy may contain a clause requiring the insurer's consent to settlement with the at-fault party.
Insurers offering uninsured motorist coverage must file with the commissioner no more than ninety days after the effective date of this act revised premium rates for this coverage to be effective on all policies of automobile insurance containing such coverage issued on or renewed with effective dates on or after January 1, 1995. The revised rate must be approved by the commissioner and reflect a reduction in the currently approved premium rate for this coverage of at least eighteen percent; provided, however, that after December 31, 1995, an insurer may apply to the Chief Insurance Commissioner for a rate adjustment for such coverage, based on its actual experience. In the first year following such reductions, an insurer may apply to the Chief Insurance Commissioner for a rate adjustment, based on its actual experience, and include consideration of the time value of money."
SECTION 11. Section 56-9-350 of the 1976 Code is amended to read:
"Section 56-9-350. The operator or owner of a motor vehicle involved in an accident resulting in property damage of four hundred dollars or more or in bodily injury or death, must be furnished a written request form at the time of the accident, or as soon after the accident as possible, by the investigating officer for completion and verification of liability insurance coverage, the form to be in a manner prescribed by the Department.
The completed and verified form must be returned by the operator or owner to the Department within fifteen days from the date the form was delivered by the officer. Failure to return the form, verified in the proper manner, is prima facie evidence that the vehicle was uninsured.
The operator or owner of a motor vehicle involved in an accident resulting in property damage of four hundred dollars or more, or in bodily injury or death, which was not investigated by a law enforcement officer shall furnish to the Department a written report and verification of liability insurance coverage, the proof to be in a manner prescribed by the Department within fifteen days after the accident shall forward a written report of the accident to the department on a form prescribed by the department. The report must contain information to enable the department to determine whether the requirements for the deposit of security under Section 56-9-351 are inapplicable by reason of the existence of insurance or other exceptions specified in this title. Failure to file the report, in the proper verified manner, is prima facie evidence that the vehicle was not registered in compliance with this title."
SECTION 12. Section 56-10-10 of the 1976 Code is amended to read:
"Section 56-10-10. Every owner of a motor vehicle required to be registered in this State shall maintain the security required by Section 56-10-20 with respect to each such motor vehicle owned by him throughout the period the registration is in effect. Security must be maintained on every motor vehicle required to be registered in this State where the owners or other operators not excluded in accordance with Section 38-77-340 reside in the same household and are insureds under the same policy, if one of the owners or other operators does not qualify for the safe driver discount in Section 38-73-760(E). Such security must be maintained with respect to each such motor vehicle owned by him throughout the period the registration is in effect. No certificate of registration may be issued or transferred to an owner by the executive director unless the owner or prospective owner produces satisfactory evidence that the security is in effect, including the name of the owner's automobile liability insurer, the name of the agent, the identification number of the insurance policy, and the effective dates of the policy, except in cases where other security is approved."
SECTION 13. Section 56-10-220 of the 1976 Code is amended to read:
"Section 56-10-220. Every person required to provide security on a motor vehicle as provided in Section 56-10-10 applying for registration for a motor vehicle shall at the time of such registration and licensing declare the vehicle to be an insured motor vehicle under the penalty set forth in Section 56-10-260 and shall execute and furnish to the department his certificate that such motor vehicle is an insured motor vehicle and that he will maintain insurance thereon during the registration period. The certificate must be in the form prescribed by the department. The department may require any registered owner or any applicant for registration and licensing of a motor vehicle declared to be an insured motor vehicle to submit a certificate of insurance executed by an authorized agent or representative of an insurance company authorized to do business in this State. Such certificate must also be in a form prescribed by the department."
SECTION 14. Section 56-10-240 of the 1976 Code is amended to read:
"Section 56-10-240. If, during the period for which it is licensed, a motor vehicle for which security is required as provided in Section 56-10-10 is or becomes an uninsured motor vehicle, then the vehicle owner immediately shall obtain insurance on the vehicle or within five days after the effective date of cancellation or expiration of his liability insurance policy surrender the motor vehicle license plates and registration certificates issued for the motor vehicle. If five working days after the last day to pay an automobile liability insurance premium, whether it is the premium due date or a grace period that is granted customarily or contractually a motor vehicle is an uninsured motor vehicle, the insurer shall give written notice, or notice by magnetic or electronic media in a manner considered satisfactory to the department, within ten days after the five-day period ends, in addition to that notice previously given in accordance with law, by delivery under United States Post Office bulk certified mail, return receipt requested, to the department of the cancellation or refusal to renew under the following circumstances:
(1) the lapse or termination of such insurance or security occurs within three months of issuance provided that this subsection only applies to new policies, and not renewal or replacement policies; or
(2) the lapse or termination occurs after three months for a resident who fails one or more of the objective standards prescribed in Section 38-73-455 who does not qualify for the safe driver discount in Section 38-73-760(E). The department may, in its discretion, authorize insurers to utilize alternative methods of providing notice of cancellation of or refusal to renew to the department. The department may not reissue registration certificates and license plates for that vehicle until satisfactory evidence has been filed by the owner or by the insurer who gave the cancellation or refusal to renew notice to the department that the vehicle is insured. Upon receiving information to the effect that a policy is canceled or otherwise terminated on a motor vehicle registered in South Carolina, the department shall suspend the license plates and registration certificate and shall initiate action as required within fifteen days of the notice of cancellation to pick up the license plates and registration certificate. A person who has had his license plates and registration certificate suspended by the department, but who at the time of suspension possesses liability insurance coverage sufficient to meet the financial responsibility requirements as set forth in this chapter, has the right to appeal the suspension immediately to the Chief Insurance Commissioner. If the commissioner determines that the person has sufficient liability insurance coverage, he shall notify the department, and the suspension is voided immediately. The department shall give notice by first class mail of the cancellation or suspension of registration privileges to the vehicle owner at his last known address. However, when license plates are surrendered pursuant to this section, they must be held at the department office in the county where the person who surrenders the plates resides.
If the vehicle owner unlawfully refuses to surrender the suspended items as required in this article, the department through its designated agents or by request to a county or municipal law enforcement agency may take possession of the suspended license plates and registration certificate and may not reissue the registration until proper proof of liability insurance coverage is provided and until the owner has paid a reinstatement fee of two hundred dollars for the first refusal under this section, and three hundred dollars for each subsequent refusal. A person who voluntarily surrenders his license plates and registration certificate before their suspension shall only be charged a reinstatement fee of five dollars.
A person wilfully failing to return his motor vehicle license plates and registration certificates as required in this section is guilty of a misdemeanor and, upon conviction, must be punished as follows:
(1) for a first offense, fined not less than one hundred dollars nor more than two hundred dollars or imprisoned for thirty days;
(2) for a second offense, fined two hundred dollars or imprisoned for thirty days, or both;
(3) for a third and subsequent offense, imprisoned for not less than forty-five days nor more than six months.
Only convictions which occurred within ten years including and immediately preceding the date of the last conviction constitute prior convictions within the meaning of this section."
SECTION 15. Chapter 10, Title 56 of the 1976 Code is amended by adding:
Section 56-10-510. As used in this article:
(1) `Conviction' includes the entry of any plea of guilty or nolo contendere and the forfeiture of any bail or collateral deposited to secure a defendant's appearance.
(2) `Insured motor vehicle' is a motor vehicle as to which (a) there is bodily injury liability insurance and property damage liability insurance, both in the amounts specified in Section 38-77-140, issued by an insurer authorized to do business in this State, (b) a bond has been given or cash or securities delivered in lieu of the insurance, (c) the owner has qualified as a self-insurer in accordance with the provisions of Section 56-9-60, or (d) the owner has at least basic personal protection insurance as defined in Section 38-78-30(C); and
(3) `Uninsured motor vehicle' is a motor vehicle required to be registered as to which (a) there is no bodily injury liability insurance and property damage liability insurance, (b) no bond has been given or cash or securities delivered in lieu thereof, (c) the owner has not qualified as a self-insurer, and (d) there is no basic or added personal protection insurance as defined in Section 38-78-30.
(4) `Department' is the South Carolina Department of Highways and Public Transportation.
Section 56-10-520. In addition to any other fees prescribed by law, every person registering and licensing an uninsured motor vehicle, as defined in Section 56-10-510, in this State shall pay, at the time of registering and licensing an uninsured motor vehicle, the sum of two hundred and fifty dollars. Credit for payment made on a motor vehicle subsequently transferred during the same licensing year must be applied to any motor vehicle thereafter registered by the uninsured motorist during the same licensing year. Every person knowingly operating an uninsured motor vehicle pursuant to this section shall not be deemed in violation of Section 56-10-270.
Section 56-10-530. The department of Highways and Public Transportation may require that a person applying for licensing and registration of a motor vehicle shall certify under the penalties set forth in Section 56-10-260 whether or not each motor vehicle is an insured motor vehicle as defined in Section 56-10-510 or the department may in its discretion require that a person (a) produce as evidence of financial responsibility a certificate on a form prescribed by the department of insurance or self-insurance complying with the requirements of Section 56-9-60, (b) has given bond or delivered the cash or securities as provided in Sections 56-9-570 and 56-9-580, respectively, or (c) pay the fee prescribed in Section 56-10-520.
Section 56-10-560. All funds collected by the department under the provisions of this article must be deposited to the credit of the State Treasurer and monthly transferred to a special deposit fund to be known as the `Uninsured Motorists Fund' to be disbursed as provided in Section 56-10-570 to 56-10-590.
Section 56-10-570. The fund is under the supervision and control of the Chief Insurance Commissioner and must be paid out, on warrants of the Comptroller General issued on vouchers signed by the commissioner or persons he designates, for the purpose of defraying the costs of administration of this article by the department and for reducing the operating losses of the Reinsurance Facility as provided in Section 56-10-580. As determined by the commissioner, when the recoupment fee is no longer necessary to pay for losses incurred by the facility as a result of the phasing out of the facility as provided for by Section 38-77-1310, the fund must be paid out for financing of driver safety measurers and for enforcing the uninsured motorist laws of the State as determined by the General Assembly.
Section 56-10-580. The Chief Insurance Commissioner annually, prior to September 30 of each year, shall make distribution from the fund as follows:
(1) to the department, the amount certified by it as its administrative costs and expenses for this article. These payments may be made on a quarterly basis.
(2) to the Reinsurance Facility to reduce the operating losses of the Facility for the twelve month period in which they are collected and to reduce the recoupment charges prescribed in Section 38-77-1310 assessed to drivers with the safe driver discount.
(3) to finance driver safety measures and enforce the uninsured motorist laws of the State as determined by the General Assembly, when the recoupment fee is no longer necessary to pay for losses incurred by the Facility, determined by the commissioner, as a result of the phasing out of the Facility as provided for by Section 38-77-1310.
Section 56-10-590. The Chief Insurance Commissioner may promulgate regulations necessary to implement the provisions of this article.
Section 56-10-610. This article does not repeal any other provision contained in this title, but is cumulative to such other provisions."
SECTION 16. Section 38-77-110(A) of the 1976 Code, as last amended by Act 148 of 1989, is further amended to read:
"(A) Automobile insurers other than insurers designated and approved as specialized insurers by the commissioner may not refuse to write or renew automobile insurance policies for individual private passenger automobiles if the risk qualifies for the safe driver discount in Section 38-73-760(e) or small commercial risks. These policies may not be canceled except for reasons which had they existed or been known when the policy was written would have rendered the risk not an insurable risk. Every automobile insurance risk constitutes an insurable risk unless the operator's permit of the named insured has been revoked or suspended and is at the time of application for insurance so revoked or suspended. However, no insurer is required to write or renew automobile insurance on any risk if there exists a valid and enforceable outstanding judgment secured by an insurer, an agent, or licensed premium service company on account of automobile insurance premiums which the applicant or insured or any principal operator who is a member of the named insured's household has failed or refused to pay unless the applicant or insured pays in advance the entire premium for the full term of the policy sought to be issued or renewed or the annual premium, whichever is the lesser. No insurer is required to write or renew private passenger automobile insurance if the risk does not qualify for the safe driver discount in Section 38-73-760(e). An insurer is not precluded from effecting cancellation of an automobile insurance policy, either upon its own initiative or at the instance of an agent or licensed premium service company, because of the failure of any named insured or principal operator to pay when due any automobile insurance premium or any installment payment. However, notice of cancellation for nonpayment of premium notifies the person to whom the notice is addressed that the notice is void and ineffective if payment of the full amount of the premium or premium indebtedness, whichever is the greater, is made to the insurer, agent, or licensed premium service company named in the notice by the otherwise effective date of cancellation. This notice of cancellation is not considered ineffective for being conditional, ambiguous, or indefinite."
SECTION 17. Section 38-77-110(C) of the 1976 Code, as added by Act 148 of 1989, is amended to read:
"(C) With regard to any coverage not required to be written by an insurer under the mandate to write, no No insurer may refuse to write or renew such policy, coverage, or endorsement of automobile insurance because of the race, color, creed, national origin, or ancestry, or income of anyone who seeks to become insured."
SECTION 18. Section 38-77-110 of the 1976 Code, as last amended by Act 148 of 1989, is further amended by adding:
"(D) An applicant denied coverage must be provided in writing by the denying insurer the reason or reasons for which the applicant has been refused insurance by that insurer, at the time of the denial."
SECTION 19. Chapter 77 of Title 38 of the 1976 Code is amended by adding:
Section 38-77-1310. (A) The Reinsurance Facility is abolished effective October 1, 1994. There is created the South Carolina Joint Underwriting Association. The administration of the phase out of the Facility is transferred to the Joint Underwriting Association.
(B) As of July 1, 1997, the Facility recoupment charge must not be included in the rate or premium charged by the insurers of private passenger automobile insurance to drivers who qualify for the safe driver discount. If any losses are incurred as a result of the operation of the Facility, the losses attributable to the Facility must be distributed among insured drivers as provided in subsection (C) until the commissioner determines all of the losses have been accounted for, unless provided otherwise.
(C) Consistent with subsection (B), the rate or premium charged by insurers of private passenger automobile insurance must include a recoupment charge, which must be added to the appropriate rate prescribed in Section 38-73-455 to compensate for any remaining losses incurred by the Facility as a result of its operation up to the effective date of this article. The operating losses of the Facility for a twelve-month period must be recouped in the subsequent twelve-month period.
(1) Prior to 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. .368 multiplied by the recoupment is to be 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) represents R in the formula P1X +2P2X +3P3X + 4P4X + 5P5X + 6P6X + 7P7X + 8P8X + 9P9X + 10P10X = R. In this formula to be utilized in determining the Facility recoupment charge:
(a) P1 is the percentage of risks which have one surcharge point under the Uniform Merit Rating Plan;
(b) P2 is the percentage of risks which have two surcharge points under the Uniform Merit Rating Plan;
(c) P3 is the percentage of risks which are subject to a surcharge of three points under the Uniform Merit Rating Plan;
(d) P4 is the percentage of risks which are subject to a surcharge of four points under the Uniform Merit Rating Plan;
(e) P5 is the percentage of risks subject to a surcharge of five points under the Uniform Merit Rating Plan;
(f) P6 is the percentage of risks subject to a surcharge of six points under the Uniform Merit Rating Plan;
(g) P7 is the percentage of risks subject to a surcharge of seven points under the Uniform Merit Rating Plan;
(h) P8 is the percentage of risks subject to a surcharge of eight points under the Uniform Merit Rating Plan;
(i) P9 is the percentage of risks subject to a surcharge of nine points under the Uniform Merit Rating Plan;
(j) P10 or more is the percentage of risks subject to a surcharge of ten or more points under the Uniform Merit Rating Plan;
(k) X 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.
(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 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 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 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 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 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 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 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 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 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 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 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, 1995. However, insurers unable to comply with the provisions of this section and renewal provisions required by law may comply with the provisions of this section at any time after June 30, 1995, but in no event later than October 1, 1995.
Section 38-77-1330. As used in this article:
(1) `Association' means the South Carolina Joint Underwriting Association established pursuant to this article.
(2) `Net direct premiums' means gross direct premiums written on automobile liability insurance as computed by the Chief Insurance Commissioner less return premiums or the unused or unabsorbed portions of premium deposits.
Section 38-77-1340. (A) A joint underwriting association is created consisting of all automobile insurers licensed to write within this State automobile insurance policies. Every such insurer is and must remain a member of the association as a condition of its authority to continue to transact this kind of insurance in this State.
(B) The purpose of the association is to provide automobile insurance on a self-supporting basis to the fullest extent possible for private passenger, small commercial, and motorcycle risks.
Section 38-77-1350. The association has the power on behalf of its members to make agreements among themselves with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to or have lost their safe driver discount, but are unable to procure such insurance through ordinary methods, and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance. Such agreements and rate modifications shall be subject to the approval of the department.
Section 38-77-1360. (A) The department shall, after consultation with the insurers licensed to write automobile liability insurance in this State, adopt a reasonable plan or plans for the equitable apportionment among such insurers of applicants for such insurance who are in good faith entitled to or have lost their safe driver discount, but are unable to, procure such insurance through ordinary methods, and, when such plan has been adopted, all such insurers shall subscribe thereto and shall participate therein. Such plan or plans shall include rules for classification of risks and rates therefor by driver classification and territory. Any insured placed with the plan shall be notified of the fact that insurance coverage is being afforded through the plan and not through the private market, and such notification shall be given in writing within ten days of such placement. To assure that plan rates are made adequate to pay claims and expenses, insurers shall develop a means of obtaining loss and expense experience at least annually, and the plan shall file such experience, when available, with the department in sufficient detail to make a determination of rate adequacy.
(B) The plan of operation shall provide for economic, fair, and nondiscriminatory administration and for the prompt and efficient provision of insurance and may contain other provisions, including, but not limited to, preliminary assessment of all members for initial expenses necessary to commence operations, establishment of necessary facilities, management of the association, assessment of the members to defray losses and expenses, commission arrangements, reasonable and objective underwriting standards, appointment of servicing carriers, and procedures for determining amounts of insurance to be provided by the association.
(C) Trend factors shall not be found to be inappropriate if not in excess of trend factors normally used in the development of residual market rates by the appropriate licensed rating organization. Each application for coverage in the plan shall include, in boldfaced 12-point type immediately preceding the applicant's signature, the following statement:
`THIS INSURANCE IS BEING AFFORDED THROUGH THE SOUTH CAROLINA JOINT UNDERWRITING ASSOCIATION AND NOT THROUGH THE PRIVATE MARKET. PLEASE BE ADVISED THAT COVERAGE WITH A PRIVATE INSURER MAY BE AVAILABLE FROM ANOTHER AGENT AT A LOWER COST. AGENT AND COMPANY LISTINGS ARE AVAILABLE IN THE LOCAL YELLOW PAGES.'
(D) The plan of operation shall provide that any profit achieved by the association must be added to the reserves of the association or returned to the policyholders as a dividend but under no circumstances whatsoever shall any profit be paid over to or received by an insurer either in currency or any other benefit of any kind.
(E) Amendments to the plan of operation may be made by the directors of the association with the approval of the commissioner or must be made at the direction of the commissioner after proper notice and public hearing.
(F) The association may not write private passenger automobile insurance with higher limits of coverage than:
(1) two hundred fifty thousand dollars, for bodily injury liability to one person in one accident,
(2) subject to the limit for one person, five hundred thousand dollars because of bodily injury to two or more persons in one accident,
(3) fifty thousand dollars because of injury to or destruction of property of others in any one accident,
(4) five hundred thousand dollars, combined single limits for either or both bodily injury and property damage,
(5) two hundred fifty thousand dollars of added personal protection benefits or personal protection liability limits up to the limits of the personal protection benefits.
(G) If a driver covered by the association maintains a driving record without a chargeable accident or driving conviction for three consecutive years while they are covered by the association, the association must attempt to place the driver with an insurer in the voluntary market. This provision does not preclude the driver from seeking automobile insurance coverage on the voluntary market at any other time. If a driver has not been able to purchase insurance on the voluntary market after seven consecutive years of maintaining a driving record with no chargeable accidents or driving convictions the driver must be placed by the association with an automobile insurance company doing business in the voluntary market in this State. The company must be chosen based on its percentage of automobile insurance business written in this State on the voluntary market. The company may charge the driver any one of the company's four rates according to driver classification and territory. A driver assigned under this provision may not be refused insurance until the driver fails to qualify for the safe driver discount.
Section 38-77-1370. The rates, rating plans, rating rules, rating classifications, territories, and policy forms applicable to insurance written by the association and the statistical and experience data relating thereto are subject to this chapter and to those provisions of Chapter 73 of Title 38 which are not inconsistent with this chapter.
Section 38-77-1380. The commissioner shall obtain complete statistical data in respect to automobile insurance losses and reparation costs as well as all other costs or expenses which underlie or are related to automobile insurance. The commissioner shall promulgate any statistical plan he considers necessary for the purpose of gathering data referable to loss and loss adjustment expense experience and other expense experience. When the statistical plan is promulgated, the association shall adopt and use it.
Section 38-77-1390. In structuring rates and determining the profit or loss of the association in respect to such insurance, consideration must be given by the commissioner to all investment income so that investment income is a part of the ratemaking and ratesetting process.
Section 38-77-1395. No later than sixty days after the passage of this act, the board must file with the commissioner rates for personal protection policies as may be defined by law and rates for private passenger automobile insurance liability coverages, uninsured motorist coverages, and underinsured motorist coverages. All of these rates are subject to surcharges or discounts, if any, applicable under any approved Merit Rating Plan, credit, or discount plan promulgated or approved by the commissioner. The board must file:
(1) a standard rate by driver classification and territory fifteen percent less than the rate defined in (2). This rate applies to all private passenger automobile insurance risks which qualify for the safe driver discount and are insured directly by or ceded to the association; and
(2) a rate by driver classification and territory less than the rate defined in (3) which applies to all private passenger automobile insurance risks which have between one and three merit surcharge points and are insured directly by or ceded to the association; and
(3) a rate by driver classification and territory less than the rate defined in (4) which applies to all private passenger automobile insurance risks which have between four and ten merit surcharge points and are insured directly by or ceded to the association; and
(4) a rate by driver classification and territory which applies to all private passenger automobile insurance risks which have more than ten merit surcharge points and are insured directly by or ceded to the association.
These four rates must be construed so that when the experience generated by them is combined, the association is able to provide private passenger automobile insurance on a self-supporting basis.
Upon the approval of these rates, they must be utilized for all private passenger automobile insurance risks either ceded to or insured directly by the association. The association must submit policy forms, rating plans, and rating rules applicable to insurance to be written by the association to the commissioner for his approval.
Section 38-77-1400. The premium rate charged for coverage must be at rates established on an actuarially sound basis, including consideration of trends in the frequency and severity of losses and must be calculated to be self-supporting.
Section 38-77-1410. The association may provide a rate increase or assessment subject to the commissioner's approval.
Section 38-77-1420. Any deficit sustained by the association in any year must be recouped, pursuant to the plan of operation and the rating plan then in effect, by one or both of the following procedures:
(1) an assessment upon the policyholders, which may not exceed one additional annual premium at the then current rate;
(2) a rate increase applicable prospectively.
Section 38-77-1430. After the initial year of operation, rates, rating plans, and rating rules and any provision for recoupment through policyholder assessment or premium rate increase must be based upon the association's loss and expense experience and investment income, together with any other information based upon this experience and income as the commissioner considers appropriate. The resultant premium rates must be on an actuarially sound basis and must be calculated to be self-supporting.
If sufficient funds are not available for the sound financial operation of the association, pending recoupment as provided in Section 38-77-1420, all members, on a temporary basis, shall contribute to the financial requirements of the association in the manner provided for in Section 38-77-1440. Any such contribution must be reimbursed to the members following recoupment as provided in Section 38-77-1420.
Section 38-77-1440. All insurers which are members of the association shall participate in its writings, expenses, and losses in the proportion that the net direct premiums of each member, excluding that portion of premiums attributable to the operation of the association, written during the preceding calendar year bear to the aggregate net direct premiums written in this State by all members of the association. Each insurer's participation in the association must be determined annually on the basis of the net direct premiums written during the preceding calendar year, as reported in the annual statements and other reports filed by the insurer with the commissioner. No member may be obligated in any one year to reimburse the association because of its proportionate share in the deficit from operations of the association in that year in excess of one percent of its surplus to policyholders and the aggregate amount not so reimbursed must be reallocated among the remaining members in accordance with the method of determining participation prescribed in this section after excluding from the computation the total net direct premiums of all members not sharing in the excess deficit. If the deficit from operations allocated to all members of the association in any calendar year exceeds one percent of their respective surplus to policyholders, the amount of the deficit must be allocated to each member in accordance with the method of determining participation prescribed in this section.
Section 38-77-1450. Every member of the association is bound by the approved plan of operation of the association and the rules of the board of directors of the association.
Section 38-77-1460. (A) If the authority of an insurer to transact automobile insurance in this State terminates for any reason, its obligations as a member of the association continue until all its obligations are fulfilled and the commissioner has so found and certified to the board of directors.
(B) If a member insurer merges into or consolidates with another insurer authorized to transact insurance in this State or another insurer authorized to transact insurance in this State has reinsured the insurer's entire automobile insurance business in this State, both the insurer and its successor or assuming reinsurer, as the case may be, are liable for the insurer's obligations to the association.
(C) Any unsatisfied net liability of any insolvent member of the association must be assumed by and apportioned among the remaining members in the same manner in which assessments or gain and loss are apportioned and the association shall acquire and have all rights and remedies allowed by law in behalf of the remaining members against the estate or funds of the insolvent insurer for funds due the association.
Section 38-77-1470. The joint underwriting association is governed by a board of seven directors, one of whom is appointed by the Governor to represent the general public and four of whom are appointed by the Governor and represent automobile insurers who are members of the association. Two directors, appointed by the Governor, are agents authorized to represent automobile insurers licensed to do business in this State.
The approved plan of operation of the association may make provision for combining insurers under common ownership or management into groups for voting, assessment, and all other purposes and may provide that not more than one of the officers or employees of such a group may serve as a director at any one time. The board of directors shall elect a chairman by majority vote and he, or his designee, must preside at all meetings of the board.
Section 38-77-1480. Any applicant for insurance through the association or any insurer adversely affected, or claiming to be adversely affected, by any ruling, action, or decision by or on behalf of the association, may appeal to the commissioner within thirty days after the ruling, action, or decision.
Section 38-77-1490. The association shall file in the office of the commissioner annually by March first a statement containing information with respect to its transactions, condition, operations, and affairs during the preceding year. The statement shall contain information prescribed by the commissioner and must be in the form he directs.
The commissioner, at any reasonable time, may require the association to furnish additional information concerning its transactions, condition, or any matter connected therewith considered to be material and of assistance in evaluating the scope, operations, and experience of the association.
Section 38-77-1500. The commissioner shall make an examination into the financial condition and affairs of the association at least annually and shall file a report thereon with the Commission, the Governor, and the General Assembly. The expenses of the examination must be paid by the association."
SECTION 20. Section 38-73-455 of the 1976 Code, as last amended by Act 113 of 1991, is further amended to read:
"Section 38-73-455. (A) An automobile insurer shall offer two four different rates for automobile insurance, a base rate as defined in Section 38-73-457 and an objective standards rate which is twenty-five percent above the base rate. Both All of these rates are subject to all surcharges or discounts, if any, applicable under any approved merit rating plan, credit, or discount plan promulgated or approved by the commissioner.
(B) No later than ninety days after the passage of this act, insurers of automobile insurance must file with the commissioner rates for personal protection policies as defined by Section 38-78-30 and revised rates for all other private passenger automobile insurance policies written by them. Each insurer must file:
(1) a `preferred' rate by driver classification and territory, which is a rate less than the standard rate defined herein. This rate applies to private passenger automobile insurance risks which qualify for the safe driver discount; and
(2) a `standard' rate which must be the approved base rate as defined in Section 38-73-457, by driver classification and territory in effect on July 1, 1994. This rate applies to private passenger automobile insurance risks which qualify for the safe driver discount; and
(3) a `nonpreferred' rate by driver classification and territory, which is a rate more than the standard rate but less than the rate by driver classification and territory for the substandard rate and is applicable to all private passenger automobile insurance risks; and
(4) a `substandard' rate by driver classification and territory, which is a rate more than the nonpreferred rate but less than or equal to the substandard rate by driver classification and territory for the South Carolina Joint Underwriting Association, as provided for in Article 13 of Chapter 77 of Title 38, and is applicable to all private passenger automobile risks.
(C) The commissioner must approve the rates filed pursuant to subsection (A). If the rates are approved, the rates shall become effective for all policies of automobile insurance issued or renewed with effective dates on or after January 1, 1997.
(D) Insurers may place any automobile insurance risk at any of the four rate levels without restriction unless provided otherwise in this chapter. An insurer or agent shall provide written notice to the insurer of the tier at which coverage is being written for the insured and the reasons the insured was written in that particular tier. However, the Uniform Merit Rating Plan must continue to apply to all risks written by them.
(E) An applicant and all operators of the insured automobile who have qualified for the safe driver discount for the last five years and who reside in the same household, and the automobile or the automobile it replaced has been insured for liability or personal protection coverage for the past twelve months must be written at the preferred or standard rate and may not be ceded to the Joint Underwriting Association. A driver who is claimed as a dependent for income tax purposes is not required to meet the five year requirement as long as the dependent qualifies for the safe driver discount.
(F) An applicant and all operators of the insured automobile who have qualified for the safe driver discount for the last ten years and who reside in the same household and the automobile or the automobile it replaced has been insured for liability or personal protection coverage for the past twelve months must be written at the preferred rate and may not be ceded to the Joint Underwriting Association. A driver who is claimed as a dependent for income tax purposes is not required to meet the ten year requirement as long as the dependent qualifies for the safe driver discount.
(G) All policies of automobile insurance issued or renewed with effective dates on or after October 1, 1996, that are written by automobile insurers designated pursuant to Section 38-77-590(A), for risks written by them through producers designated pursuant to that same section, and all policies ceded to the Joint Underwriting Association by automobile insurers must be written at the rates provided for in Section 38-77-1395. However, the Uniform Merit Rating Plan must apply to all such risks.
(H) The Board of Directors of the association must file rates by driver classification and territory for both the personal protection policies as defined by Section 38-78-30, liability coverages, and uninsured motorist coverage.
Applicants, or a current policyholder, seeking automobile insurance with an insurer must be written at the base rate, unless one of the conditions or factors in subitems (1) through (8) of item (A) is present.
(A) The named insured or any operator who is not excluded in accordance with Section 37-77-340 and who resides in the same household or customarily operates an automobile insured under the same policy, individually:
(1) has obtained a policy of automobile insurance or continuation thereof through material misrepresentation within the preceding thirty-six months; or
(2) has had convictions for driving violations on three or more separate occasions within the thirty-six months immediately preceding the effective date of coverage as reflected by the motor vehicle record of each insured driver as maintained by the Department of Highways and Public Transportation; or
(3) has had two or more `chargeable' accidents within the thirty-six months immediately preceding the effective date of coverage. A `chargeable' accident is defined as one resulting in bodily injury to any person in excess of three hundred dollars per person, death, or damage to the property of the insured or other person in excess of seven hundred fifty dollars. Accidents occurring under the circumstances enumerated below are not considered chargeable.
(a) The automobile was lawfully parked. An automobile rolling from a parked position is not considered as lawfully parked but is considered as operated by the last operator.
(b) The applicant or other operator or owner was reimbursed by or on behalf of a person responsible for the accident or has a judgment against this person.
(c) The automobile of an applicant or other operator was struck in the rear by another vehicle and the applicant or other operator has not been convicted of a moving traffic violation in connection with the accident.
(d) The operator of the other automobile involved in the accident was convicted of a moving traffic violation and the applicant or other operator was not convicted of a moving traffic violation in connection therewith.
(e) An automobile operated by the applicant or other operator is damaged as a result of contact with a `hit and run' driver, if the applicant or other operator so reports the accident to the proper authority within twenty-four hours or, if the person is injured, as soon as the person is physically able to do so.
(f) Accidents involving damage by contact with animals or fowl.
(g) Accidents involving physical damage, limited to an caused by flying gravel, missiles, or falling objects.
(h) Accidents occurring as a result of the operation of any automobile in response to an emergency if the operator at the time of the accident was responding to a call of duty as a paid or volunteer member of any police or fire department, first aid squad, or any law enforcement agency. This exception does not include an accident occurring after the emergency situation ceases or after the private passenger motor vehicle ceases to be used in response to the emergency; or
(4) has had one `chargeable' accident and two convictions for driving violations, all occurring on separate occasions, within the thirty-six months immediately preceding the effective date of coverage as reflected by the motor vehicle record of each insured driver as maintained by the Department of Highways and Public Transportation; or
(5) has been convicted of or forfeited bail during the thirty-six months immediately preceding the effective date of coverage for operating a motor vehicle while in an intoxicated condition or while under the influence of drugs; or
(6) has been convicted or forfeited bail during the thirty-six months immediately preceding the effective date for:
(a) any felony involving the use of a motor vehicle,
(b) criminal negligence resulting in death, homicide, or assault arising out of the operation of a motor vehicle,
(c) leaving the scene of an accident without stopping to report,
(d) theft or unlawful taking of a motor vehicle,
(e) operating during a period of revocation or suspension of registration or license,
(f) Knowingly permitting an unlicensed person to drive,
(g) reckless driving,
(h) the making of material false statements in the application for licenses or registration,
(i) impersonating an applicant for license or registration or procuring a license or registration through impersonation, whether for himself or another,
(j) filing of a false or fraudulent claim or knowingly aiding or abetting another in the presentation of such a claim,
(k) failure to stop a motor vehicle when signaled by means or a siren or flashing light by a law enforcement vehicle; or
(7) has for thirty or more consecutive days during the twelve months immediately preceding the effective date of coverage, owned or operated the automobile to be insured (or if newly acquired, the automobile it replaces) without liability coverage in violation of the laws of this State; or
(8) has used the insured automobile as follows or if the insured automobile is:
(a) used in carrying passengers for hire or compensation, except that the use of an automobile for a car pool must not be considered use of an automobile for hire or compensation,
(b) used in the business of transportation of flammables or explosives,
(c) used in illegal operation, or
(d) no longer principally used and garaged within the State, but not to include students who are operating a motor vehicle registered in this State while attending an institution located in another state.
(B) In the event that one or more of the conditions or factors prescribed in items (1) through (8) of subsection (A) exist, the motor vehicle customarily operated by that individual must be written at the objective standards rate.
(C) (I) Member companies of an affiliated group of automobile insurers may not utilize different filed rates for automobile insurance coverages which they are mandated by law to write. For the purpose of this section, an affiliated group of automobile insurers includes a group of automobile insurers under common ownership, management, or control. Those automobile insurers designated pursuant to Section 38-77-590(a), for automobile insurance risks written by them through producers designated by the Facility governing board pursuant to that section, shall utilize the rates or premium charges by coverage filed and authorized for use by the rating organization licensed by the Commissioner pursuant to Article 11, Chapter 73 of this title, which has the largest number of members or subscribers for automobile insurance rates. However, those automobile insurers designated pursuant to Section 38-77-590(a) are not required to use those same rates or premium charges described in the preceding sentence for risks written by them through their authorized agents not appointed pursuant to Section 38-77-590.
(D) (J) An automobile insurance policy may be endorsed at any time during the policy period to reflect the correct rate or premium applicable by reason of the factors or conditions described in subsection (A) which existed prior to the commencement of the policy period in which the endorsement is made, regardless of whether the factors or conditions were known or disclosed to the insurer at the commencement of the policy period. However, no No policy may be endorsed during a policy period to reflect factors or conditions occurring during that policy period. A policy may be endorsed during a policy period to recognize the addition or deletion of an operator or vehicle.
(E) For purposes of determining the applicable rates to be charged an insured, an automobile insurer shall obtain and review an applicant's motor vehicle record."
SECTION 21. Section 38-73-760 of the 1976 Code, as last amended by Act 148 of 1989, is further amended by adding:
"(g) No surcharge may be assessed for the first conviction of speeding less than twenty miles per hour if the person convicted has maintained the safe driver discount for the previous three years.
(h) No surcharge may be assessed for convictions of the following violations occurring on or after January 1, 1995: failing to dim lights; operating with improper lights; operating with improper brakes; or operating a vehicle in unsafe condition."
SECTION 22. Section 56-10-270 of the 1976 Code is amended to read:
"Section 56-10-270. (a) Any person knowingly operating an uninsured motor vehicle subject to registration in this State or any person knowingly allowing the operation of an uninsured motor vehicle subject to registration in this State is guilty of a misdemeanor and, upon conviction, must be punished as follows:
(1) for a first offense, fined not less than one two hundred dollars nor more than two three hundred dollars or imprisoned for thirty days or may be ordered to perform up to fifty public service hours, or a combination of these, and,
(2) upon conviction of a second offense, be fined two three hundred dollars or imprisoned for thirty days or perform up to one hundred public service hours, or a combination of these, or both, and
(3) for a third and subsequent offenses must be imprisoned for not less than forty-five days nor more than six months and be fined four hundred dollars or serve up to two hundred public service hours, or a combination of these. Only convictions which occurred within five years including and immediately preceding the date of the last conviction constitute prior convictions within the meaning of this section. An uninsured motor vehicle includes an insured vehicle with respect to which the operator has been excluded from coverage pursuant to the provisions of Section 38-77-340.
(b) The department upon receipt of information to the effect that any person has been convicted of violating subsection (a) of this section shall suspend the driving privilege and all license plates and registration certificates issued in the person's name for a period of thirty days for a first offense, for a period of ninety days for a second offense, and for a period of six months for a third and each subsequent offense. and may not reinstate that The person's privileges may not be reinstated until proof of financial responsibility has been filed.
(c) Any person whose license plates and registration certificates which are suspended as provided in this section, which are not suspended for any other reason, may have them immediately restored, if he files proof of financial responsibility with the department."
SECTION 23. The 1976 Code is amended by adding:
"Section 38-77-116. Upon issuance of a new private passenger automobile insurance policy, the insurance company or agent must review with the new applicant a list of driving offenses and the related fine and punishment, as well as the possible increase in the rates, the effect of any surcharges, or the effect of the loss of the safe driver discount. This list must be on a form approved by the Chief Insurance Commissioner and must accompany the policy."
SECTION 24. After September 30, 1994, the governing board of the Joint Underwriting Association, enacted pursuant to Article 13 of Chapter 77 of Title 38 of the 1976 Code as contained in this act, shall contract with one or more insurers or business entities to serve as the designated carrier and shall establish a procedure for the selection of the designated carrier. In developing this procedure, the board must establish criteria which will assure the designated carrier's ability to adequately provide policy-writing and claims service. However, the board may not require that the designated carrier be a licensed insurance company. Designated carrier contracts must be for a period of three years and must be awarded upon the terms and conditions for competitive sealed bidding as provided in Section 11-35-1520 of the 1976 Code.
If the designated carrier fails two claims audits, including a re-audit, within the contract term, the designated carrier is disqualified for renewal of its contract with the Facility upon expiration of its existing contract. Designated carrier contracts awarded pursuant to this section must provide that the failure of two claims audits, including a re-audit, during the contract term constitutes a material breach of the contract. After July 1, 1994, the governing board of the association may not designate any new producers.
Commissions paid to agents for policies ceded to or placed in the Joint Underwriting Association shall be set by the association's board of directors.
SECTION 25. The 1976 Code is amended by adding:
"Section 38-77-175. (A) When the operator or owner of a motor vehicle is issued a traffic ticket for a moving violation by a law enforcement officer, he must be furnished a written request form to complete to verify liability insurance coverage. The form must be in a manner prescribed by regulation of the Department of Highways and Public Transportation.
(B) The completed and verified form must be returned by the operator or owner to the department within fifteen days from the date he receives it. Failure to return the form verified in the proper manner is prima facie evidence that the vehicle was uninsured.
(C) Any fine collected for a violation of Section 56-10-270, relating to driving uninsured, as a result of this section must be deposited in the treasury of the municipality or the county employing the law enforcement officer who issued the original ticket, if such law enforcement officer is a municipal or county employee, or in the general fund of the State, if the law enforcement officer who issued the original ticket is an employee of a state agency or department."
SECTION 26. The 1976 Code is amended by adding:
"Section 56-7-12. (A) When the operator or owner of a motor vehicle is issued a traffic ticket for a moving violation by a law enforcement officer, he must be furnished a written request form to complete to verify liability insurance coverage. The form must be in a manner prescribed by regulation of the Department of Highways and Public Transportation.
(B) The completed and verified form must be returned by the operator or owner to the department within fifteen days from the date he receives it. Failure to return the form verified in the proper manner is prima facie evidence that the vehicle was uninsured.
(C) Any fine collected for a violation of Section 56-10-270, relating to driving uninsured, as a result of this section must be deposited in the treasury of the municipality or the county employing the law enforcement officer who issued the original ticket, if such law enforcement officer is a municipal or county employee, or in the general fund of the State, if the law enforcement officer who issued the original ticket is an employee of a state agency or department."
SECTION 27. Article 5 of Chapter 77 of Title 38 of the 1976 Code and Sections 38-73-1420, 38-73-1425, 38-77-285, 38-77-920, 38-77-940, 38-77-950, and 38-77-960 are repealed on October 1, 1994.
SECTION 28. Section 38-77-111 of the 1976 Code, as added by Act 148 of 1989, is amended to read:
"Section 38-77-111. An automobile insurer may cede the coverages of an automobile insurance policy that it is mandated to write to the Reinsurance Facility Joint Underwriting Association but it may not cede coverages under a policy that it is not mandated by law to write except for tort liability and personal protection coverages and uninsured motorist coverage for those risks that do not qualify for the safe driver discount. However, if an insurer cedes a coverage it is mandated to write by law, it shall cede all coverages under that policy that it is mandated to write."
SECTION 29. If any provision of the act or the application thereof to any person or circumstance is held to be unconstitutional or otherwise invalid, the remainder of this act and the application of such provision to other persons or circumstances are not affected thereby, and it is to be conclusively presumed that the legislature would have enacted the remainder of this act without such invalid or unconstitutional provision, except that if Section 38-78-110 or Section 38-78-120 is found to be unconstitutional or invalid it is to be conclusively presumed that the legislature would not have enacted the remainder of this act without such limitations, and the entire act is invalid. If Section 38-78-110 is found to be unconstitutional or invalid, personal protection insurers have no obligation to pay personal protection benefits with respect to accidents occurring on or after the date of the finding of such unconstitutionality or invalidity and, in addition, are subrogated to all of the rights of personal protection insureds for all previous such benefits paid.
SECTION 30. Except as otherwise specifically provided herein, this act takes effect upon approval by the Governor.