Current Status Introducing Body:House Bill Number:3496 Primary Sponsor:Klauber Committee Number:26 Type of Legislation:GB Subject:Joint Underwriting Association Residing Body:House Current Committee:Labor, Commerce and Industry Computer Document Number:BBM/9049JM.93 Introduced Date:19930216 Last History Body:House Last History Date:19930216 Last History Type:Introduced, read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:Klauber Simrill Stone Moody-Lawrence Jaskwhich Stille Meacham Davenport Baker A. Young Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
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3496 House 19930216 Introduced, read first time, 26
referred to Committee
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TO AMEND CHAPTER 77, TITLE 38, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO AUTOMOBILE INSURANCE, BY ADDING ARTICLE 13 SO AS TO ESTABLISH AND PROVIDE FOR A JOINT UNDERWRITING ASSOCIATION, INCLUDING PROVISIONS FOR THE ABOLITION OF THE SOUTH CAROLINA REINSURANCE FACILITY EFFECTIVE OCTOBER 1, 1993, AND FOR THE TRANSFER OF THE ADMINISTRATION OF THE PHASE-OUT OF THE FACILITY TO THE ASSOCIATION; 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 LAW AND REVISED RATES FOR ALL OTHER PRIVATE PASSENGER AUTOMOBILE INSURANCE POLICIES WRITTEN BY THEM; AND TO REPEAL ARTICLE 5, CHAPTER 77, TITLE 38, RELATING TO THE REINSURANCE FACILITY AND DESIGNATED PRODUCERS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. 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, 1993. 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, 1993. 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, 1993, but in no event later than October 1, 1993.
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.
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 2. 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 3. Article 5 of Chapter 77 of Title 38 of the 1976 Code is repealed.
SECTION 4. Except as otherwise specifically provided herein, this act takes effect upon approval by the Governor.