South Carolina General Assembly
110th Session, 1993-1994

Bill 3546

... part 9 of 22

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SECTION 694. Section 38-53-150 of the 1976 Code is amended to read:

"Section 38-53-150. (a) The director or his designee may deny, suspend, revoke, or refuse to renew any license issued under this chapter for any of the following causes: (1) for any cause sufficient to deny issuance of the original license; (2) violation of any laws of this State relating to bail in the course of dealings under the license issued him by the director or his designee; (3) material misstatement, misrepresentation, or fraud in obtaining the license; (4) misappropriation, conversion, or unlawful withholding of monies belonging to insurers or others and received in the conduct of business under the license; (5) fraudulent or dishonest practices in the conduct of business under the license; (6) conviction of a felony within the last ten years regardless of whether the conviction resulted from conduct in or related to the bail bond business; (7) failure to comply with or violation of the provisions of this chapter or of any order of the director or his designee or regulation of the department; (8) when in the judgment of the director or his designee the licensee has in the conduct of his affairs under the license demonstrated incompetency or untrustworthiness, that he is no longer in good faith carrying on the bail bond business, or that he is guilty of rebating, offering to rebate, or offering to divide the premiums received for the bond; (9) for failing to pay any judgment or decree rendered on any forfeited undertaking in any court of competent jurisdiction; (10) for charging or receiving as premium or compensation for the making of any deposit or bail bond any sum in excess of that permitted by this chapter; (11) for requiring as a condition of his executing a bail bond that the principal agree to engage the services of a specified attorney. (b) The director or his designee, in lieu of revoking or suspending a license in accordance with the provisions of this chapter, in any one proceeding, by order, may require the licensee to pay to the director or his designee to be deposited in the general fund of the state a monetary penalty as provided in Section 38-2-10(2) for each offense. Upon failure of the licensee to pay the penalty within twenty days after the mailing of the order, postage prepaid, registered, and addressed to the last known place of business of the licensee, unless the order is stayed by an order of a court of competent jurisdiction, the director or his designee may revoke the license of the licensee or may suspend the license for a period as he determines."

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SECTION 695. Section 38-53-160 of the 1976 Code is amended to read:

"Section 38-53-160. No license may be refused, suspended, or revoked, or renewal refused, except on reasonable notice and opportunity to be heard afforded the person licensed or seeking renewal of the license. Any applicant for a license as a bail bondsman or runner whose application has been denied or whose license has been suspended or revoked, or renewal of the license denied, has the right of appeal from the final order of the director or his designee to the Administrative Law Judge Division as provided by law."

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SECTION 696. Section 38-53-170(f) of the 1976 Code is amended to read:

"(f) solicit business in any of the courts or on the premises of any of the courts of this State, in the office of any magistrate, or in or about any place where prisoners are confined. Law enforcement officers and jailers shall report any violations of this provision to the court. Any action taken pursuant to this provision resulting in a conviction, guilty plea, or plea of nolo contendere pursuant to Section 38-53-340 must be reported to the director or his designee by the court within thirty days;"

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SECTION 697. Section 38-53-200 of the 1976 Code is amended to read:

"Section 38-53-200. A bail bondsman may not sign or countersign blank bail bonds, nor may he give a power of attorney to, or otherwise authorize, anyone to countersign his name to bonds unless the person so authorized is a licensed bondsman or runner directly employed by the bondsman giving power of attorney. Copies of all the powers of attorney and revocations of the powers of attorney must be filed immediately with the department and the clerk of the circuit court of the county in the state where the bondsman giving the power of attorney is currently writing or is obligated on bail bonds."

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SECTION 698. Section 38-53-210 of the 1976 Code is amended to read:

"Section 38-53-210. Every insurer shall annually, prior to July first, furnish the clerk of court a list of all surety bondsmen appointed by it to write bail bonds on its behalf. Every insurer who subsequently appoints a surety bondsman in the state shall give notice of the appointment to the director or his designee and clerk of court of any county where the bondsman is doing business. All appointments are subject to the issuance of the proper insurance agent's license to the appointee. An insurer terminating the appointment of a surety bondsman shall file written notice of the termination with the department, together with a statement that it has given or mailed notice to the surety bondsman and to the clerks of the Circuit Courts of the counties in the state where the insurer has been obligated on bail bonds through the agent within the past three years. Notice filed with the department shall state the reasons, if any, for termination. Information so furnished the director or his designee is privileged and may not be used as evidence in, or as the basis for, any action against the insurer or any of its representatives."

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SECTION 699. Section 38-53-220 of the 1976 Code is amended to read:

"Section 38-53-220. Any bail bondsman who discontinues writing bail bonds during the period for which he is licensed shall notify the clerks of the Circuit Courts with whom he is registered and return his license to the director or his designee for cancellation within thirty days after discontinuance."

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SECTION 700. Section 38-53-230 of the 1976 Code is amended to read:

"Section 38-53-230. Every person licensed as a bail bondsman may appoint as runner any person who has been issued a runner's license. Each bail bondsman shall before July second of each year furnish to the clerk of court of each county where he is doing business and the director or his designee a list of all runners appointed by him. Each bail bondsman who, subsequent to the filing of this list, appoints additional persons as runners shall file written notice with the clerk of court of each county where he is doing business and the director or his designee of the appointment. A bail bondsman terminating the appointment of a runner shall file written notice of the termination with the clerk of court and the director or his designee together with a statement that he has given or mailed notice to the runner. Notice filed with the clerk of court and the director or his designee shall state the reasons, if any, for termination. Information so furnished the director or his designee is privileged and may not be used as evidence in any action against the bail bondsman."

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SECTION 701. Section 38-53-310 of the 1976 Code is amended to read:

"Section 38-53-310. Each professional bail bondsman shall file with the clerk of court of the county of his principal place of business and any other county where he is doing business a written report in a form prescribed by the director or his designee regarding all bail bonds on which he is liable as of the first day of each month showing: (a) each individual bonded; (b) the date the bond was given; (c) the principal sum of the bond; (d) the state or local official to whom given; (e) the fee charged for the bonding service in each instance. The report must be filed before the sixteenth day of each month."

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SECTION 702. Section 38-53-320 of the 1976 Code is amended to read:

"Section 38-53-320. Whenever the director or his designee considers it necessary he shall visit and examine or cause to be visited and examined by some competent person appointed by him for that purpose any professional bail bondsman subject to the provisions of this chapter. For this purpose the director or his designee or person making the examination has free access to all books and papers of the bondsman that relate to his business and to the books and papers kept by any of his agents or runners."

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SECTION 703. Section 38-55-20 of the 1976 Code is amended to read:

"Section 38-55-20. Every insurer shall conduct its business in the state in, and the policies and contracts of insurance issued by it must be headed or entitled only by, its proper or corporate name. Two or more authorized insurers may, with the approval of the director or his designee, issue a combination policy which shall contain provisions substantially as follows: (1) That the insurers executing the policy are severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof aggregating the full amount of insurance under the policy; and (2) That service of process or of any notice or proof of loss required by the policy upon any of the insurers executing the policy constitutes service upon all the insurers."

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SECTION 704. Section 38-55-40 of the 1976 Code is amended to read:

"Section 38-55-40. No insurer may issue in this State, nor permit its agents, officers, and employees to issue in this State, agency company stock or other stock or securities or any special or advisory bond or other contract of any kind promising returns and profits, as an inducement to the taking of insurance. No insurer is authorized to do business in this State which issues or permits its agents, officers, or employees to issue in any state or territory agency company stock or securities or any special or advisory bond or other contract of any kind, promising returns and profits as an inducement to the taking of insurance. No corporation or stock company, acting as agent of an insurer, nor any of its agents, officers, and employees, is permitted to sell or give, agree to sell or give, or offer to sell or give, directly or indirectly, in any manner whatsoever, any share of stock, security, bond, or agreement of any form or nature promising returns and profits as an inducement to the taking of insurance or in connection therewith. The director or his designee, upon being satisfied that any insurer or its agent has violated this section, shall impose the penalties provided in Section 38-2-10. This section does not apply to marine insurers or their agents if the agents write only marine insurance."

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SECTION 705. Section 38-55-60 of the 1976 Code is amended to read:

"Section 38-55-60. Every officer or agent of an insurer doing business in this State who violates Section 38-55-50 is guilty of a misdemeanor. The director or his designee, upon being satisfied that the insurer, its agent, or an insurance broker has violated Section 38-55-50, shall impose the penalties provided in Section 38-2-10."

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SECTION 706. Section 38-55-80 of the 1976 Code is amended to read:

"Section 38-55-80. An insurer doing business in this State may not make a loan to any of its directors or officers, either directly or indirectly, in any manner, except as provided in this section, and its director or officer may not accept any loan, directly or indirectly. The insurer may not make an advance to any of its directors or officers for future services to be performed beyond a period of one year from the date of making the advance. Nothing contained in this section prohibits a life insurer from making a policy loan upon its policy or contract in an amount not exceeding the net reserve or cash value of the policy or contract. This section does not prohibit an insurer in connection with the relocation of the place of employment of an officer, including any relocation in connection with the initial employment of the officer, from (a) making, or the officer from accepting, a mortgage loan to the officer on real property owned by the officer which is to serve as his residence or (b) acquiring, or the officer from selling to it, at not more than the fair market value, the residence of the officer. Mortgage loans made or residences acquired under this section are subject to the limitations imposed on investments by Section 38-11-50. In addition, this section does not prohibit an insurer from making a loan to its directors or officers if the loan is first approved in writing by the director or his designee. An officer or director of an insurer who violates this section, either by participating in making the loan or by the accepting of a loan except as authorized in this section, is guilty of a misdemeanor. Any loan made by an insurer to its officers, directors, or employees shall bear the same rate of interest as is available to the public on loans from the insurer."

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SECTION 707. Section 38-55-120 of the 1976 Code is amended to read:

"Section 38-55-120. If an insurer fails to pay a final judgment rendered against it within fifteen days after the judgment becomes final, upon written application of the holder of the judgment the director or his designee shall give fifteen days' written notice to the insurer to pay the judgment and, upon the insurer's failure to pay the judgment within the time, shall revoke the license of the insurer to do business in this State and impound its bond or securities required to be deposited under Sections 38-9-80 through 38-9-140 or Section 38-15-30. In the event the director or his designee revokes the license of the insurer, he shall take any steps he considers necessary for the protection of the insurer's policyholders in this State. A judgment creditor may proceed with the collection of his judgment out of the securities in the possession of the director or his designee or the bond filed with him."

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SECTION 708. Section 38-55-140 of the 1976 Code is amended to read:

"Section 38-55-140. When an insurer has surrendered its charter or when its charter has been revoked or canceled for any reason, it is still subject to suit under the laws of this State until all outstanding claims and demands against it have been settled. The director or his designee is designated the agent upon whom service of process may be had."

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SECTION 709. Section 38-55-180 of the 1976 Code is amended to read:

"Section 38-55-180. No agent, collector, solicitor, or other employee or representative of an insurer issuing contracts providing for sick, accident, or death benefits and operating on the weekly or monthly industrial plan is considered the owner of any part of the weekly or monthly debit collected by him or that may be under his charge, care, control, or supervision. The debit is considered wholly the property of the insurer in whose name the policies, contracts, or obligations were written or assumed. No former agent, collector, solicitor, superintendent, or other employee or representative of the insurer, within a period of ninety days after the termination of his employment with the insurer, may barter, sell, give, or in any manner transfer to any person or insurer any part of any debit of the insurer or any policies or contracts of the insurer, without the written consent of the insurer formerly employing him. The director or his designee shall revoke the license of any person violating this section."

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SECTION 710. Section 38-57-150(2) of the 1976 Code is amended to read:

"(2) Subsection (1) does not prohibit a licensed agent who is registered under Chapter 1 of Title 35 from offering to sell shares of or interests in mutual funds in connection with or as reference to a policy or annuity contract if the agent, at the time of the offer, gives the prospective buyer a written prospectus which has been filed with and approved by the director or his designee and the Securities Commissioner."

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SECTION 711. Section 38-57-200 of the 1976 Code is amended to read:

"Section 38-57-200. If, after a hearing, the director or his designee determines that a method of competition or an act or practice is unfair or deceptive as defined in this title and that the person complained of has engaged in the method of competition, act, or practice in violation of this title, he shall reduce his finding to writing and shall issue and cause to be served upon the person charged with the violation: (1) an order requiring the person to cease and desist from engaging in the method of competition, act, or practice; and (2) an order imposing penalties provided in Section 38-2-10."

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SECTION 712. Section 38-57-210 of the 1976 Code is amended to read:

"Section 38-57-210. Upon good cause shown, the director or his designee shall permit any person to intervene, appear, and be heard at the hearing by counsel or in person. If the report of the director or his designee does not charge a violation of this chapter, then any intervenor in the proceedings may, within thirty days after the service of the report, cause a petition to be filed in the Circuit Court of Richland County for a review of the report. Upon review the court has authority to issue appropriate orders and decrees in connection therewith, including, if the court finds that it is to the interest of the public, orders enjoining and restraining the continuance of any method of competition, act, or practice which it finds, notwithstanding the report of the director or his designee, constitutes a violation of this chapter."

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SECTION 713. Section 38-57-220 of the 1976 Code is amended to read:

"Section 38-57-220. If any person asks to be excused from attending and testifying or from producing any books, papers, records, correspondence, or other documents at any hearing on the ground that the testimony or evidence required of him may tend to incriminate him or subject him to any penalty or forfeiture and is, notwithstanding, directed to give the testimony or produce the evidence, he shall comply with the direction, but he may not thereafter be prosecuted or subjected to a penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he may testify or produce evidence pursuant thereto. No testimony so given or evidence produced may be received against him upon any criminal action, investigation, or proceeding. The individual so testifying is not exempt from prosecution or punishment for any perjury committed by him while so testifying, and the testimony or evidence so given or produced is admissible against him upon any criminal action, investigation, or proceeding concerning the perjury, nor is he exempt from the refusal, revocation, or suspension of any license, permission, or authority conferred or to be conferred pursuant to this title. The individual may execute, acknowledge, and file in the office of the department a statement expressly waiving his immunity or privilege in respect to any transaction, matter, or thing specified in the statement and thereupon the testimony of the person or the evidence in relation to the transaction, matter, or thing may be received or produced before any judge or justice, court, tribunal, grand jury, or otherwise, and, if so received or produced, the individual is not entitled to any immunity or privilege on account of any testimony he may so give or evidence so produced."

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SECTION 714. Section 38-57-230 of the 1976 Code is amended to read:

"Section 38-57-230. Any person who contemptuously violates a cease and desist order of any practice issued by the director or his designee shall, upon due notice, receive a hearing before the director or his designee. Upon the determination of the director or his designee that the contemptuous violation has been committed, the director or his designee shall issue his order to the effect that the person is in contempt of his order to cease and desist. Any person who contemptuously violates a cease and desist order of the director or his designee shall pay a fine set by the director or his designee but not to exceed fifty dollars for each day of violation. However, if the violation is wilful, the fine may be assessed in an amount not to exceed one hundred dollars per day of violation."

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SECTION 715. Section 38-57-240 of the 1976 Code is amended to read:

"Section 38-57-240. If upon completion of the hearing the director or his designee has elected to levy a fine on the person involved, that person must be so notified in writing by certified mail and of the amount of the fine. The notice shall state that, if the fine is not paid within thirty days from the date of receipt of the notice, further action to effect collection under this chapter will be initiated, together with revocation of the person's license or certificate of authority."

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SECTION 716. Section 38-57-250 of the 1976 Code is amended to read:

"Section 38-57-250. When the time for appeal has expired and no appeal has been perfected by the person fined, the director or his designee shall file with the clerk of court of the county in which the person fined resides and for any other county in which he may own personal or real property, or an interest therein, a copy of the order. The clerk shall enter in the judgment roll, in the column for judgment debtors, the name of the person fined and in appropriate columns the amount of the fine and costs for which the order calls and the date when the copy was filed and shall index the order upon the judgment roll index. The order has the full effect of a civil judgment including rights of the judgment creditor to issue execution and accrue interest at the legal rate until the time as it is satisfied."

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SECTION 717. Section 38-57-260 of the 1976 Code is amended to read:

"Section 38-57-260. If the fine remains unpaid after filing the order, the director or his designee shall levy on the real or personal property or any interest he may have therein, by issuing execution to the sheriff of the county of residence of the person fined. The sheriff shall proceed upon the execution with like effect and in the same manner prescribed by law with respect to executions issued against property upon judgments of a court of record. The sheriff is entitled to a fee equivalent to five percent of the total amount of the warrant for service in executing the order and the clerk of court is entitled to the same fees for recording the order as one prescribed by law in respect to executions issued against property upon judgments of a court of record. These fees are to be added to and collected with the total amount of the order."

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SECTION 718. Section 38-57-270 of the 1976 Code is amended to read:

"Section 38-57-270. If an order is returned not satisfied in full, the director or his designee has the same remedies to enforce the claim for the fine and costs against the person fined as if the people of the state had recovered judgment against the person fined for the amount of the fine and costs."

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SECTION 719. Section 38-57-280 of the 1976 Code is amended to read:

"Section 38-57-280. When the director or his designee levies a fine against a person and takes action to effect collection of the fine under this chapter, that person may pay the fine under written protest if he considers the fine to be unjust or illegal. Upon the protested payment being made, the director or his designee shall pay the fine into the state treasury, giving the State Treasurer notice at that time that the payment was made under protest."

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SECTION 720. Section 38-57-290 of the 1976 Code is amended to read:

"Section 38-57-290. Any person paying a fine levied by the director or his designee, under protest, may at any time within thirty days after payment, but not afterwards, bring an action against the director or his designee for the recovery thereof in the court of common pleas of the county in which the fine was payable. If it is determined in that action that the fine was wrongfully or illegally levied and collected, for any reason going to the merits, the court before whom the case is tried shall certify of record that the fine was wrongfully collected and should be refunded and thereupon the Comptroller General shall issue his warrant for the refunding of the fine so paid."

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SECTION 721. Section 38-57-300 of the 1976 Code is amended to read:

"Section 38-57-300. The Attorney General shall defend any suit or proceeding against the director or his designee for the recovery of fines allegedly illegally or unjustly paid under this title. Any judgment against the director or his designee must be paid in the manner prescribed in Section 38-57-290."

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SECTION 722. Section 38-57-310 of the 1976 Code is amended to read:

"Section 38-57-310. In any action or proceeding against the director or his designee for the purpose of recovering a fine allegedly illegally or unjustly collected, the amount received in the suit may not exceed the amount of the fine paid under protest, together with costs arising from the service of process and procuring the attendance of witnesses."

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SECTION 723. Section 38-59-30 of the 1976 Code is amended to read:

"Section 38-59-30. If, after due notice and hearing, the director or his designee determines that the insurer has engaged in any of the improper claim practices defined in Section 38-59-20, he shall order the insurer to cease and desist from the practice and may impose a penalty as provided in Section 38-2-10. If the penalty is imposed, the penalty may not be considered a cost of the insurer for purposes of determining whether or not the rates of the insurer warrant adjustment."

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SECTION 724. Chapter 61, Title 38 of the 1976 Code is amended to read:

"CHAPTER 61

Insurance Contracts Generally

Section 38-61-10. All contracts of insurance on property, lives, or interests in this State are considered to be made in the state and all contracts of insurance the applications for which are taken within the state are considered to have been made within this State and are subject to the laws of this State.

Section 38-61-20. (A) It is unlawful for an insurer doing business in this State to issue or sell in this State any policy, contract, or certificate until it has been filed with and approved by the director or his designee. The director or his designee may disapprove the form if it (1) does not meet the requirements of law, (2) contains any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. However, this subsection does not apply to surety contracts or fidelity bonds, except as required in Section 38-15-10, or to insurance contracts, riders, or endorsements prepared to meet special, unusual, peculiar, or extraordinary conditions applying to an individual risk. (B) At any time after having given written approval, and after an opportunity for a hearing for which at least thirty days' written notice has been given, the director or his designee may withdraw approval if he finds that the forms (1) do not meet the requirements of law, (2) contain any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) are being solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. (C) The director or his designee may exempt from the requirements of subsection (A) as long as he considers proper any type of insurance policy, contract, or certificate to which in his opinion subsection (A) practically must not be applied, or the filing and approval of which, in his opinion, is not necessary for the protection of the public. However, every insurer at least annually shall list the types and form numbers of all policies it issues or sells in this State which the director or his designee has exempted from being filed and approved, and the president or chief executive officer of the insurer shall certify that all of these policies comply fully with the laws of this State. If a policy, contract, or certificate is certified to be in compliance with the laws of this State and the director or his designee finds it violates a law of this State, he may disqualify that insurer from certifying policies, contracts, or certificates allowed under this subsection.

Section 38-61-30. The department shall promulgate regulations which establish minimum standards for the readability of each homeowners, dwelling fire, automobile, accident and health, life, and all other forms of personal insurance, excluding commercial, fleet vehicle, and group insurance, which must be complied with by all insurers authorized to do business in this State. The standards shall include, but are not limited to, standards on an index of policy provisions, general organization of text, text readability, type size, type style, type spacing, and general appearance of the insurance contract.

Section 38-61-40. All insurers licensed to transact insurance business in this State shall comply with the standards prescribed by regulation of the department. The director or his designee is empowered to recall all existing policies of commonly purchased insurance that do not comply with Section 38-61-30.

Section 38-61-50. The director or his designee shall consult with and call upon the expertise of other state agencies, as may be necessary, to determine the standards to be promulgated and, after promulgation, the effectiveness of these standards. This consultation shall include, but is not limited to, the State Department of Education or its successor entity."

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SECTION 725. Section 38-63-220(n) of the 1976 Code is amended to read:

"(n) a provision that is in accordance with Article 5 of Chapter 63 of Title 38, Standard Nonforfeiture Law for Life Insurance. The director or his designee may approve policies with provisions which vary from the provisions required in this section if the provisions are more favorable to the insured or if the provisions are not applicable because of the nature of the product."

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SECTION 726. Section 38-63-250(a) of the 1976 Code is amended to read:

"(a) In the alternative life insurers may issue policies that permit an adjustable maximum interest rate established from time to time by the life insurer as permitted by law. These adjustable maximum interest rates may not exceed the higher of the following: (1) The Published Monthly Average for the calendar month ending two months before the date on which the rate is determined; or (2) The rate used to compute the cash surrender values under the policy during the applicable period plus one percent per annum. `Published Monthly Average' means Moody's Corporate Bond Yield Average - Monthly Average Corporates as published by Moody's Investors Service, Inc., or any successor thereto or, if Moody's Corporate Bond Yield Average - Monthly Average Corporates is no longer published, a substantially similar average, established by regulation issued by the department."

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SECTION 727. Section 38-63-520 of the 1976 Code is amended to read:

"Section 38-63-520. No policy of life insurance, except as stated in Section 38-63-640, may be delivered or issued for delivery in this State unless it contains in substance the following provisions or corresponding provisions which, in the opinion of the director or his designee, are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements hereinafter specified and are essentially in compliance with Section 38-63-630: (1) In the event of default in any premium payment, the insurer shall grant, upon proper request not later than sixty days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be hereinafter specified. In lieu of the stipulated paid-up nonforfeiture benefit, the insurer may substitute, upon proper request not later than sixty days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits. (2) Upon surrender of the policy within sixty days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance or five full years in the case of industrial insurance, the insurer shall pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be specified in this article. (3) A specified paid-up nonforfeiture benefit becomes effective as specified in the policy unless the person entitled to make the election elects another available option not later than sixty days after the due date of the premium in default. (4) If the policy has become paid up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the insurer shall pay, upon surrender of the policy within thirty days after any policy anniversary, a cash surrender value of such amount as may be specified in this article. (5) In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefits, if any, available under the policy on each policy anniversary either during the first twenty policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy. (6) A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of the state in which the policy is delivered; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that the method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered. Any of the foregoing provisions or portions thereof not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The insurer shall reserve the right to defer the payment of any cash surrender value for a period of six months after demand therefor with surrender of the policy."

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SECTION 728. Section 38-63-580 of the 1976 Code is amended to read:

"Section 38-63-580. This section does not apply to industrial policies issued on or after the operative date of Section 38-63-600 as defined therein. All adjusted premiums and present values referred to in this article must, for policies of industrial insurance issued prior to January 1, 1968, be calculated on the basis of either the 1941 Standard Industrial Mortality Table or the Commissioners' 1961 Standard Industrial Mortality Table as may be elected by the insurer and approved by the director or his designee. However, adjusted premiums and present values for all policies of industrial insurance issued on or after January 1, 1968, must be calculated on the basis of the latter table. All calculations must be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits so long as the rate of interest does not exceed three and one-half percent per annum, except that a rate of interest not exceeding four percent per annum may be used for policies issued on or after January 3, 1976, and prior to January 1, 1979, and a rate of interest not exceeding five and one-half percent per annum may be used for policies issued on or after January 1, 1979, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding six and one-half percent per annum may be used. However, in calculating the present value of any paid-up term insurance with the accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than one hundred thirty percent of the rates of mortality according to the 1941 Standard Industrial Mortality Table, if this table is used for calculating adjusted premiums and present values, or more than those shown in the Commissioners' 1961 Industrial Extended Term Insurance Table, if the Commissioners' 1961 Standard Industrial Mortality Table is used for calculating adjusted premiums and present values. For insurance issued on a substandard basis, the calculation of adjusted premiums and present values may be based on any other table of mortality as may be specified by the insurer and approved by the director or his designee."

Name changed

SECTION 729. Section 38-63-590 of the 1976 Code is amended to read:

"Section 38-63-590. This section does not apply to ordinary policies issued on or after the operative date of Section 38-63-600 as defined therein. In case of ordinary policies, all adjusted premiums and present values referred to in this article must be calculated on the basis of the Commissioners' 1958 Standard Ordinary Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits so long as the rate of interest does not exceed three and one-half percent per annum, except that a rate of interest not exceeding four percent per annum may be used for policies issued on or after January 3, 1976, and prior to January 1, 1979, and a rate of interest not exceeding five and one-half percent per annum may be used for policies issued on or after January 1, 1979, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding six and one-half percent per annum may be used, and, for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six years younger than the actual age of the insured. In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners' 1958 Extended Term Insurance Table, and, for insurance issued on a substandard basis, the calculation of the adjusted premiums and present values may be based on any other table of mortality as may be specified by the insurer and approved by the director or his designee."

Name changed

SECTION 730. Section 38-63-600(8) of the 1976 Code is amended to read:

"(8) All adjusted premiums and present values referred to in this article: (A) must for all policies of ordinary insurance be calculated on the basis of (i) the Commissioners' 1980 Standard Ordinary Mortality Table or (ii) at the election of the insurer for any one or more specified plans of life insurance, the Commissioners' 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; (B) must for all policies of industrial insurance be calculated on the basis of the Commissioners' 1961 Standard Industrial Mortality Table; and (C) must for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this section for policies issued in that calendar year. However: (a) At the option of the insurer, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this section, for policies issued in the immediately preceding calendar year. (b) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by Section 38-63-520, must be calculated on the basis of the mortality table and rate of interest used in determining the amount of the paid-up nonforfeiture benefit and paid-up dividend additions, if any. (c) An insurer may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values. (d) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners' 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners' 1961 Industrial Extended Term Insurance Table for policies of industrial insurance. (e) For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables. (f) Any ordinary mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the department for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners' 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners' 1980 Extended Term Insurance Table. (g) Any industrial mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the department for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners' 1961 Standard Industrial Mortality Table or the Commissioners' 1961 Industrial Extended Term Insurance Table."

Name changed

SECTION 731. Section 38-63-600(11) of the 1976 Code is amended to read:

"(11) After the effective date of this section, any insurer may file with the department a written notice of its election to comply with the provisions of this section after a specified date before January 1, 1989, which shall be the operative date of this section for that insurer. If an insurer does not make that election, the operative date of this section for that insurer is January 1, 1989.

Name changed

SECTION 732. Section 38-63-610 of the 1976 Code is amended to read:

"Section 38-63-610. In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience or, in the case of any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in Sections 38-63-520 to 38-63-600, then: (a) The director or his designee must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by Sections 38-63-520 to 38-63-600. (b) The director or his designee must be satisfied that the benefits and the pattern of premiums of that plan are not misleading to prospective policyholders or insureds. (c) The cash surrender values and paid-up nonforfeiture benefits provided by the plan may not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this article, as determined by regulations promulgated by the department."

Name changed

SECTION 733. Section 38-63-650 of the 1976 Code is amended to read:

"Section 38-63-650. An insurer may file with the department a written notice of its election to comply with the provisions of this article after a specified date before January 1, 1966. After the filing of the notice, then upon the specified date, which shall be the operative date for that insurer, this article becomes operative with respect to the policies thereafter issued by the insurer. If an insurer makes no election, the operative date of this article for that insurer is January 1, 1966."

Name changed

SECTION 734. Section 38-65-60 of the 1976 Code is amended to read:

"Section 38-65-60. (1) No life insurance coverage may be extended to residents of this State under a policy of group insurance issued outside this State which does not provide in substance the provisions of Section 38-65-210 unless the director or his designee determines that certain provisions are not appropriate for the coverage provided. (2) Any insurer extending life insurance under a group policy issued outside this State to residents of this State shall comply with the requirements of this State relating to advertising and to claims settlement practices with respect to the insurance. (3) Upon request of the director or his designee, copies of policies and certificates under a policy of group life insurance issued outside this State and covering residents of this State must be made available on an informational basis only. However, mass-marketed life insurance policies and certificates shall have prior approval of the director or his designee before they can be offered for sale to residents of this State."

Name changed

SECTION 735. Section 38-65-210 of the 1976 Code is amended to read:

"Section 38-65-210. No policy of group life insurance may be delivered in this State unless it contains in substance the following provisions or provisions which in the opinion of the director or his designee are more favorable to the persons insured or at least as favorable to the persons insured and more favorable to the policyholder. However, (a) items (6) to (11), inclusive, do not apply to policies issued to a creditor, (b) the standard provisions required for individual life insurance policies do not apply to group life insurance policies, and (c) if the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision which in the opinion of the director or his designee is equitable to the insured persons and to the policyholder, but nothing may be construed in this section to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies: (1) A provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except the first, during which grace period the death benefit coverage continues in force, unless the policyholder has given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder is liable to the insurer for the payment of a pro rata premium for the time the policy was in force during the grace period. (2) A provision that the validity of the policy may not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue and that no statement made by any person insured under the policy relating to his insurability may be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force before the contest for a period of two years during the person's lifetime nor unless it is contained in a written instrument signed by him. (3) A provision that a copy of the application, if any, of the policyholder must be attached to the policy when issued, that all statements made by the policyholder or by the persons insured are considered representations and not warranties and that no statement made by any person insured may be used in any contest unless a copy of the instrument containing the statement is or has been furnished to the person or his beneficiary. (4) A provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of his coverage. (5) A provision specifying an equitable adjustment of premiums or of benefits, or of both, to be made in the event the age or sex of a person insured has been misstated. The provision shall contain a clear statement of the method of adjustment to be used. (6) A provision that any sum becoming due by reason of the death of the person insured is payable to the beneficiary designated by the person insured, subject to the provisions of the policy in the event there is no designated beneficiary, as to all or any part of the sum, living at the death of the person insured and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of the sum not exceeding two thousand dollars to any person appearing to the insurer to be entitled equitably thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured. (7) A provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which he is entitled, to whom the insurance benefits are payable and the rights and conditions set forth in items (8), (9), and (10) of this section. (8) A provision that if the insurance or any portion of it on a person covered under the policy ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy that person is entitled to have issued to him by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits so long as application for the individual policy is made and the first premium paid to the insurer within thirty-one days after the termination and so long as the following conditions are met: (a) The individual policy is, at the option of the individual, on any one of the forms, except term insurance, then customarily issued by the insurer at the age and for the amount applied for. (b) The individual policy is in an amount not in excess of the amount of life insurance which ceases because of the termination, less, in the case of a person whose membership in the class or classes eligible for coverage terminates but who continues in employment in another class, the amount of any life insurance for which the person is or becomes eligible under any other group policy within thirty-one days after the termination. Any amount of insurance which has matured on or before the date of the termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of an annuity, is not, for the purposes of this provision, included in the amount which is considered to cease because of the termination. (c) The premium on the individual policy is at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which the person then belongs, and to his age attained on the effective date of the individual policy. (9) A provision that if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured thereunder at the date of the termination whose insurance terminates and who has been so insured for at least five years before the termination date is entitled to have issued to him by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by item (8) of this section, except that the group policy may provide that the amount of the individual policy may not exceed the smaller of (a) the amount of the person's life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which he is or becomes eligible under any group policy issued or reinstated by the same or another insurer within thirty-one days after the termination and (b) ten thousand dollars. (10) A provision that if a person insured under the group policy dies during the period within which he would have been entitled to have an individual policy issued to him in accordance with item (8) or (9) of this section and before the individual policy has become effective the amount of life insurance which he would have been entitled to have issued to him under the individual policy is payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made. (11) Where active employment is a condition of insurance, a provision that an insured may continue coverage during the insured's total disability by timely payment to the policyholder of that portion, if any, of the premium that would have been required from the insured had total disability not occurred. Unless otherwise provided by law, the continuation must be on a premium-paying basis for a period of six months from the date on which the total disability started, but not beyond the earlier of (a) approval by the insurer of continuation of the coverage under any disability provision which the group insurance policy may contain or (b) the discontinuance of the group insurance policy. (12) In the case of a policy issued to a creditor, a provision that the insurer will furnish to the policyholder for delivery to each debtor insured under the policy a certificate of insurance describing the coverage and specifying that the death benefit first must be applied to reduce or extinguish the indebtedness."

Name changed

SECTION 736. Section 38-67-10(c) of the 1976 Code is amended to read:

"(c) Except with the approval of the director or his designee and under the conditions as to investments and other matters as he may prescribe, which shall recognize the guaranteed nature of the benefits provided, reserves for (i) benefits guaranteed as to dollar amount and duration and (ii) funds guaranteed as to principal amount or stated rate of interest may not be maintained in a separate account."

Name changed

SECTION 737. Section 38-67-10(d) of the 1976 Code is amended to read:

"(d) Unless otherwise approved by the director or his designee, assets allocated to a separate account must be valued at their market value on the date of valuation or, if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to the separate account. However, unless otherwise approved by the director or his designee, the portion of any of the assets of the separate account equal to the insurer's reserve liability with regard to the guaranteed benefits and funds referred to in item (c) of this section must be valued in accordance with the rules otherwise applicable to the insurer's assets."

Name changed

SECTION 738. Section 38-67-10(f) of the 1976 Code is amended to read:

"(f) No sale, exchange, or other transfer of assets may be made by an insurer between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made and unless the transfer, whether into or from a separate account, is made (i) by a transfer of cash, or (ii) by a transfer of securities having a readily determinable market value and the transfer of securities is approved by the director or his designee. The director or his designee may approve other transfers among such accounts if, in his opinion, the transfers would not be inequitable."

Name changed

SECTION 739. Section 38-67-30 of the 1976 Code is amended to read:

"Section 38-67-30. No company may deliver or issue for delivery within this State variable contracts unless it is licensed and organized to do a life insurance or annuity business in this State, and the director or his designee is satisfied that its condition or method of operation in connection with the issuance of variable contracts will not render its operation hazardous to the public or its policyholders in this State. In this connection, the director or his designee shall consider among other things: (a) The history and financial condition of the insurer; (b) The character, responsibility, and fitness of the officers and directors of the insurer; and (c) The law and regulation under which the insurer is authorized in the state of domicile to issue variable contracts. The state of entry of an alien insurer is considered its place of domicile for this purpose. If the insurer is a subsidiary of an admitted life insurer, or affiliated with an admitted life insurer through common management or ownership, it may be considered by the director or his designee to have met the provisions of this section if either it or the parent or the affiliated insurer meets the requirements hereof."

Name changed; department's authority to issue regulations

SECTION 740. Section 38-67-40 of the 1976 Code is amended to read:

"Section 38-67-40. Notwithstanding any other provision of law, the director or his designee has sole authority to regulate the issuance and sale of variable contracts, and the department has the sole authority to issue any regulations as may be appropriate to carry out the purposes and provisions of this chapter."

Name changed

SECTION 741. Section 38-69-120(11) of the 1976 Code is amended to read:

"(11) a provision that is in accordance with Article 5, Chapter 69, Title 38, Standard Nonforfeiture Law for Individual Deferred Annuities. The director or his designee may approve contracts with provisions which vary from the provisions required in this section if the provisions are more favorable to the insured. Any of the provisions not applicable to single premium annuities, flexible premium annuities, or single premium pure endowment contracts need not be incorporated to that extent in the contract. This section does not apply to contracts for annuities included in or upon the lives of beneficiaries under life insurance contracts."

Name changed

SECTION 742. Section 38-69-230 of the 1976 Code is amended to read:

"Section 38-69-230. In the case of contracts issued on or after the operative date of this article as defined in Section 38-69-320, no contract of annuity, except as stated in Section 38-69-220, may be delivered or issued for delivery in this State unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the director or his designee are at least as favorable to the contractholder, upon cessation of payment of considerations under the contract: (a) That upon cessation of payment of considerations under a contract, the insurer shall grant a paid-up annuity benefit on a plan stipulated in the contract of such value as is specified in Sections 38-69-250, 38-69-260, 38-69-270, 38-69-280, and 38-69-300. (b) If a contract provides for a lump sum settlement at maturity, or at any other time, that, upon surrender of the contract at or prior to the commencement of any annuity payments, the insurer will pay in lieu of any paid-up annuity benefit a cash surrender benefit of the amount as is specified in Sections 38-69-250, 38-69-260, 38-69-270, 38-69-280, and 38-69-300. The insurer shall reserve the right to defer the payment of the cash surrender benefit for a period of six months after demand therefor with surrender of the contract. (c) A statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender, or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of these benefits. (d) A statement that any paid-up annuity, cash surrender, or death benefits that may be available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered and an explanation of the manner in which the benefits are altered by the existence of any additional amounts credited by the insurer to the contract, any indebtedness to the insurer on the contract, or any prior withdrawals from or partial surrenders of the contract. Notwithstanding the requirements of this section, any deferred annuity contract may provide that, if no considerations have been received under a contract for a period of two full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from considerations paid prior to that period would be less than twenty dollars monthly, the insurer may at its option terminate the contract by payment in cash of the then present value of that portion of the paid-up annuity benefit, calculated on the basis of the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit. This payment relieves the insurer of any further obligation under the contract."

Name changed

SECTION 743. Section 38-69-320 of the 1976 Code is amended to read:

"Section 38-69-320. After May 31, 1978, an insurer may file with the department a written notice of its election to comply with the provisions of this article after a specified date before May 31, 1980. After the filing of the notice, upon the specified date, which is the operative date of this article for the insurer, this article becomes operative with respect to annuity contracts thereafter issued by the insurer. If an insurer makes no election, the operative date of this article for the insurer is May 31, 1980."

Name changed, defined; appointment of designee or deputy director, etc.

SECTION 744. Section 38-70-10(4) of the 1976 Code is amended to read:

"(4) `Director or his designee' means the director or his designee of the South Carolina Department of Insurance. The director may appoint a designee or deputy director to assist in the management and operation of the department. If the director does not appoint a designee or deputy director, the term `director or his designee' shall be construed to refer to the director of the department."

Name changed

SECTION 745. Section 38-70-10(5) of the 1976 Code is amended to read:

"(5) `Certificate' means a renewable certificate of registration granted by the director or his designee to a private review agent, authorizing the agent to perform utilization review activities in this State for two years. This certificate is not transferable."

Name changed; provisions deleted

SECTION 746. Section 38-70-20 of the 1976 Code is amended to read:

"Section 38-70-20. (A) No private review agent may conduct utilization reviews in this State unless the director or his designee has granted the private review agent a certificate to perform these activities. The director or his designee, in his discretion, may approve or deny certificate applications. (B) An applicant for a certificate shall pay the director or his designee the application fee as provided in Section 38-70-50 and shall submit an application to the director or his designee on forms and with any supporting documentation that the director or his designee requires. The application must contain information regarding the utilization review programs to be conducted by the applicant which must meet the requirements contained in subsection (C) below. (C) A utilization review program of the applicant must meet the following minimum standards: (1) Notification of an adverse decision by the utilization review agent must be provided to the insured or other party designated by the insured within five business days. (2) All utilization review agents shall maintain a procedure by which insured or providers may seek reconsideration of appeal of determinations of the utilization review agent. (3) A representative of the utilization review agent must be accessible by telephone to insureds or providers in South Carolina, at least forty hours each week during normal business hours. (4) The type and qualification of the personnel either employed or under contract to perform the utilization reviews must be included in the utilization review program information submitted to the director or his designee. (5) A copy of the materials designed to inform applicable patients of the requirements of the utilization plan and the responsibilities and rights of patients under the plan must be provided interested parties upon request; and (6) An acknowledgment that all applicable state and federal laws to protect the confidentiality of individual medical records are followed."

Name changed

SECTION 747. Section 38-70-30 of the 1976 Code is amended to read:

"Section 38-70-30. A certificate must be renewed on the second anniversary of its effective date and is considered to be approved upon payment of the fee unless the director or his designee takes action to withdraw or cancel the certificate."

Name changed; appeals to Administrative Law Judge Division

SECTION 748. Section 38-70-40 of the 1976 Code is amended to read:

"Section 38-70-40. (A) The director or his designee may conduct periodic reviews of the operations of private review agents in this State to ensure that they continue to meet the specifications outlined in this chapter and any applicable regulations which may be promulgated by the department. The director or his designee may perform periodic telephone audits of private review agents authorized to conduct business in this State, to determine if the agents are reasonably accessible. (B) Within ninety days upon receipt of a complaint from a licensed health care provider, the director or his designee may investigate the complaint, including holding hearings and taking testimony or other appropriate actions, and shall present a written response to the complainant and the private review agent named. This response must include the following: (1) a statement of the original complaint; (2) a determination of findings of the director or his designee; (3) corrective actions, if any, on the part of the private review agent which the director or his designee finds appropriate; and (4) a time frame in which any corrective actions are to be completed. (C) The director or his designee is authorized to take appropriate action against a private review agent who fails to meet the standards of this chapter or of any applicable regulations promulgated by the department, or who fails to respond in a timely fashion to corrective actions ordered by the director or his designee. The director or his designee may impose an administrative fine not to exceed one thousand dollars for each violation or may deny, suspend, or revoke the certificate of the private review agent. (D) The director or his designee may also deny, suspend, or revoke a certificate if, upon review, the director or his designee finds that the private review agent does not: (1) have a utilization review program that meets the requirements of subsection (C) of Section 38-70-20; (2) have available the services of sufficient numbers of registered nurses, medical records technicians, or similarly qualified persons supported and supervised by appropriate physicians to carry out its utilization review activities; (3) meet any applicable regulations the department promulgates under this chapter relating to the qualifications of private review agents or the performance of utilization review; (4) remain accessible to patients and providers. (E) Before taking the actions authorized by this section to deny, suspend, or revoke the certificate of a private review agent, the director or his designee shall provide the private review agent with reasonable time to supply additional information demonstrating compliance with the requirements of this chapter and the opportunity to request a hearing. If a private review agent requests a hearing, the director or his designee shall send a hearing notice to the involved parties by certified mail, return receipt requested, at least thirty days before the hearing. The director or his designee shall hold the hearing in accordance with the provisions of Chapter 3 of this title, and the State Administrative Procedures Act. Any action or decision of the director or his designee pursuant to the administrative hearing may be appealed to the Administrative Law Judge Division as provided by law by the private review agent."

Name changed

SECTION 749. Section 38-70-50 of the 1976 Code is amended to read:

"Section 38-70-50. (A) Every private review agent, before transacting business in this State, shall pay an application fee of not more than four hundred dollars and a registration fee of not more than eight hundred dollars to the department by July first each even-numbered year. The certificate year runs July first to the following June thirtieth. (B) The department shall promulgate regulations necessary to establish these registration and application fees."

Name changed

SECTION 750. Section 38-70-60 of the 1976 Code is amended to read:

"Section 38-70-60. The department, after consultation with payers, providers, utilization review agents, the Department of Health and Environmental Control and other interested parties, shall promulgate regulations to implement and enforce the requirements of this chapter in accordance with the State Administrative Procedures Act."

Name changed

SECTION 751. Section 38-71-70 of the 1976 Code is amended to read:

"Section 38-71-70. Any foreign insurer authorized to do business in this State may, with the approval of the director or his designee, insert in any policy covered by this chapter so issued or delivered any provision required by the laws of any state or country in which the insurer is licensed, if the provision is not substantially in conflict with any law of this State. A domestic insurer may insert in any policy covered by this chapter issued for delivery in another state or foreign country and governed by the laws thereof any provision required by the laws of the other state or country applicable to the policy."

Name changed; appeals to Administrative Law Judge Division

SECTION 752. Section 38-71-190 of the 1976 Code is amended to read:

"Section 38-71-190. Any policy or contract of accident and health insurance issued in this State may include provision for subrogation by the insurer to the insured's right of recovery against a liable third party for not more than the amount of insurance benefits that the insurer has paid previously in relation to the insured's injury by the liable third party. If the director or his designee, upon being petitioned by the insured, determines that the exercise of subrogation by an insurer is inequitable and commits an injustice to the insured, subrogation is not allowed. Attorneys' fees and costs must be paid by the insurer from the amounts recovered. This determination by the director or his designee may be appealed to the Administrative Law Judge Division as provided by law in accordance with Section 38-3-210."

Name changed; appeals to Administrative Law Judge Division; etc.

SECTION 753. Section 38-71-310 of the 1976 Code is amended to read:

"Section 38-71-310. (A) No policy or certificate of accident, health, or accident and health insurance may be issued or delivered in this State, nor may any application, endorsement, or rider which becomes a part of the policy be used, until a copy of its form has been filed with and approved by the director or his designee except as exempted by regulation of the department as permitted by Section 38-61-20. The director or his designee may disapprove the form if the form (1) does not meet the requirements of law, (2) contains any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. The director or his designee shall notify in writing, as soon as is practicable, the insurer which has filed the form of his approval or disapproval. In the event of disapproval, the notice must contain the reasons for disapproval, and the insurer is entitled to a public hearing thereon. If no action has been taken to approve or disapprove a policy or certificate, application, endorsement, or rider after the documents have been filed for ninety days, they are deemed to be approved. (B) No premium rates applicable to accident policies, health policies, or combined accident and health policies or certificates for individual or family protection may be used unless they have been filed with the department and approved by the director or his designee. The director or his designee may disapprove premium rates if he determines that the benefits provided in the policies or certificates are unreasonable in relation to the premiums charged. The director or his designee shall notify in writing the insurer, as soon as is practicable, which has filed the premium rates of his approval or disapproval with the department. In the event of disapproval, the notice must contain the reasons for disapproval, and the insurer is entitled to appeal the decision or determination of disapproval before the Administrative Law Judge Division as provided by law. If no action has been taken to approve or disapprove the premium rates after they have been filed for ninety days, they are deemed to be approved. (C) At any time the director or his designee, after a public hearing of which at least thirty days' written notice has been given, may withdraw approval of forms or rates previously approved under subsections (A) and (B) if he determines that the forms or rates no longer meet the standards for approval specified in subsections (A) and (B). (D) The provisions of this section do not apply to policies issued in connection with loans made under the Small Loan Act of 1966. (E) For major medical expense coverage individual accident and health insurance policies, as defined by regulation of the department, the benefits are deemed reasonable in relation to the premium charged if the insurer has filed a loss ratio guarantee with the department. This guaranteed loss ratio must be equivalent to, or greater than, the most recent loss ratios detailed within the National Association of Insurance Commissioners' `Guidelines for Filing of Rates for Individual Health Insurance Forms.' This loss ratio guarantee must be in writing and must contain at least the following: (1) A recitation of the anticipated (target) loss ratio standards contained in the original actuarial memorandum filed with the policy form when it was originally approved. (2) A guarantee that the actual South Carolina loss ratios for the calendar year in which the new rates take effect, and for each year thereafter until new rates are filed will meet or exceed the loss ratio standards referred to in item (1) above. (3) A guarantee that the actual South Carolina loss ratio results for the year at issue will be independently audited at the insurer's expense. This audit must be done in the second quarter of the next year and the audited results must be reported to the department not later than the date for filing the applicable Accident and Health Policy Experience Exhibit. (4) A guarantee that affected South Carolina policyholders will be issued a proportional refund (based on premium paid) of the amount necessary to bring the actual aggregate loss ratio up to the anticipated loss ratio standards referred to in item (1) above. The refund must be made to all South Carolina policyholders insured under the applicable policy form as of the last day of the year at issue if the refund would equal five dollars or more. The refund must include statutory interest from the end of the year at issue until the date of payment. Payments must be made during the third quarter of the next year. (5) As used herein, the term `loss ratio' means the ratio of incurred losses to earned premium by number of years of policy duration, for all combined durations. (6) The reference in item (1) of this subsection to the `anticipated (target) loss ratio standards contained in the original actuarial memorandum filed with the policy form when it was originally approved' may not be considered or construed as evidence of legislative intent that the use of, or adherence to, such `anticipated (target) loss ratio standards' is approved or disapproved in any application for a rate increase for any policy form approved prior to the effective date of these amendments to Section 38-71-310."

Name changed

SECTION 754. Section 38-71-315 of the 1976 Code is amended to read:

"Section 38-71-315. Any insurer of individual accident and health insurance may at any time, except when required by law or order of the director or his designee, voluntarily decrease its premium charge for any approved policy form without the prior approval of the director or his designee. However, the insurer must notify the director or his designee and the consumer advocate for information thirty days prior to the use of the revised premium charge. Notwithstanding any other provision of law, any time within one year after using such revised premium charge, the insurer may return its premium charge back to the previously approved level by informing the director or his designee and the consumer advocate of the revision thirty days prior to the effective date. The director or his designee may not disapprove such revision."

Name changed

SECTION 755. Section 38-71-320 of the 1976 Code is amended to read:

"Section 38-71-320. If a policy is issued by an insurer domiciled in this State for delivery to a person residing in another state and if the official having responsibility for the administration of the insurance laws of the other state has advised the director or his designee that the policy is not subject to approval or disapproval by the official, the director or his designee may by ruling require that the policy meet the standards set forth in Sections 38-71-330, 38-71-340, and 38-71-370."

Name changed

SECTION 756. Section 38-71-325 of the 1976 Code is amended to read:

"Section 38-71-325. On January 1, 1992, in addition to any other requirements of law, no new individual major medical expense coverage policy, as defined in regulations promulgated by the department, may be approved unless: (1) Premium rates, after appropriate allowance for the actuarial value of the difference in benefits, for any such policy form first approved for use by the insurer in South Carolina within the two-year period immediately prior to the effective date of this section and any such policy form first approved for use after the effective date of this section do not exceed the premium rates for any other such policy form first approved for use during this period by more than thirty percent. (2) The actuarial value of the difference in benefits set out in such policy forms of the insurer, as specified in an opinion by a qualified actuary or other qualified person acceptable to the director or his designee,is reported not less often than once a year to the director or his designee and used in demonstrating compliance with item (1) above. (3) The anticipated (target) loss ratio for the combined experience for all the policy forms specified in item (1) must be equivalent to or greater than the most recent loss ratios detailed within the National Association of Insurance Commissioner's `Guidelines for Filing of Rates for Individual Health Insurance Forms' or successor publications. The anticipated (target) loss ratio for the combined experience is defined as the average anticipated (target) loss ratio for all these policy forms included in the combined experience weighted by premium volume. With respect to the policy form, the insurer shall have the right to file a loss ratio guarantee in accordance with the procedures specified in Section 38-71-310(E) or to request approval of any rate change before the use thereof, but the anticipated loss ratios of each policy form whether or not a loss ratio guarantee has been filed must be combined as provided in the preceding item (3). The initial policy form proposed to be used by a domestic insurer after its organization under the laws of this State and the initial policy form proposed to be used by a foreign insurer after authorization by the director or his designee to do business in this State may be disapproved by the director or his designee if he determines that the rates proposed to be used with the policy form are set at a level substantially less than rates charged by other insurers in this State offering comparable coverage. Nothing contained in this section may be construed to prevent the use of age, sex, area, industry, occupational, and avocational factors or to prevent the use of different rates for smokers and nonsmokers or for any other habit or habits of an insured person which have a statistically proven effect on the health of the person and are approved by the director or his designee. Also, nothing contained in this section shall preclude the establishment of a substandard classification based upon the health condition of the insured, but the initial classification may not be changed adversely to the applicant after initial issue. The director or his designee has the right, upon application by any insurer, to grant relief, for good cause shown, from any requirement of this section."

Name changed

SECTION 757. Section 38-71-330(7) of the 1976 Code is amended to read:

"(7) It contains no provision purporting to make any portion of the charter, rules, constitution, or bylaws of the insurer a part of the policy unless that portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks or short-rate table filed with the department."

Name changed

SECTION 758. Section 38-71-335(B) of the 1976 Code is amended to read:

"(B) Individual or family accident, health, or accident and health insurance policies may not be written on an optionally renewable basis. `Optionally renewable' means a contract of insurance in which the insurer reserves the right to terminate the coverage at the policy anniversary date. Optionally renewable does not include the following categories of policies as defined by the department by regulation: (1) `nonrenewable for stated reasons only' and (2) `conditionally renewable'. Term insurance is not considered insurance written on an optionally renewable basis."

Name changed

SECTION 759. Section 38-71-340 of the 1976 Code is amended to read:

"Section 38-71-340. Except as provided in Section 38-71-410, each accident, health, or accident and health policy delivered or issued for delivery to an individual in this State must contain the provisions specified in this section, in the words in which they appear in this section. The insurer, at its option, may substitute for one or more of these provisions corresponding provisions of different wording approved by the director or his designee which are in each instance not less favorable in any respect to the insured or the beneficiary. These provisions must be preceded individually by the caption appearing in this section or, at the option of the insurer, by appropriate individual or group caption or subcaptions approved by the director or his designee. (1) A provision as follows: ENTIRE CONTRACT; CHANGES: This policy, with the application and attached papers, if any, is the entire contract between the insured and the company. No change in this policy is effective until approved by a company officer. This approval must be noted on or attached to this policy. No agent may change this policy or waive any of its provisions. (2) A provision as follows: TIME LIMIT ON CERTAIN DEFENSES: After two years from the issue date only fraudulent misstatements in the application may be used to void the policy or deny any claim for loss incurred or disability that starts after the two-year period. A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium (a) until at least age fifty or (b) in the case of a policy issued after age forty-four, for at least five years from its date of issue, may contain in lieu of the foregoing the following provision (from which the clause in parenthesis may be omitted at the insurer's option) `INCONTESTABLE': (a) Misstatements in the application: After this policy has been in force for two years during the insured's lifetime (excluding any period during which the insured is disabled), the company cannot contest the statements contained in the application. (b) Preexisting conditions: No claim for loss incurred or disability that starts after two years from the issue date will be reduced or denied because a sickness or physical condition not excluded by name or specific description before the date of loss had existed before the effective date of coverage. (3) A provision as follows: GRACE PERIOD: This policy has a ______ day grace period. This means that if a renewal premium is not paid on or before the date it is due, it may be paid during the following ______ days. During the grace period the policy will stay in force. [Note: Insert a number not less than `seven' for weekly premium policies, `ten' for monthly premium policies, and `thirty-one' for all other policies.] (4) A provision as follows: REINSTATEMENT: If the renewal premium is not paid before the grace period ends the policy will lapse. Later acceptance of the premium by the company or by an agent authorized to accept payment without requiring an application for reinstatement will reinstate the policy. If the company or its agent requires an application, the insured will be given a conditional receipt for the premium. If the application is approved, the policy will be reinstated as of the approval date. Lacking such approval, the policy will be reinstated on the forty-fifth day after the date of the conditional receipt unless the company has previously written the insured of its disapproval. The reinstated policy will cover only loss that results from an injury sustained after the date of reinstatement or sickness that starts more than ten days after such date. In all other respects the rights of the insured and the company will remain the same, subject to any provisions noted on or attached to the reinstated policy. Any premiums the company accepts for reinstatement will be applied to a period for which premiums have not been paid. No premiums will be applied to any period more than sixty days before the reinstatement date. [The last sentence of the above provision may be omitted from any policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums (a) until at least age fifty or (b) in the case of a policy issued after age forty-four, for at least five years from its date of issue.] (5) A provision as follows: NOTICE OF CLAIM: Written notice of claim must be given within twenty days after a covered loss starts or as soon as reasonably possible. The notice may be given to the company at its home office or to the company's agent. Notice should include the name of the insured and the policy number. Optional paragraph: If the insured has a disability for which benefits may be payable for at least two years, at least once every six months after the insured has given notice of claim, the insured shall give the company notice that the disability has continued. The insured need not do this if legally incapacitated. The first six months after any filing of proof by the insured or any payment or denial of a claim by the company will not be counted in applying this provision. If the insured delays in giving this notice, the insured's right to any benefits for the six months before the date when the insured gives notice will not be impaired. (6) A provision as follows: CLAIM FORMS: When the company receives notice of claim, it will send the claimant forms for filing proof of loss. If these forms are not given to the claimant within fifteen days the claimant will meet the proof of loss requirements by giving the company a written statement of the nature and extent of the loss within the time limits stated in the Proofs of Loss section. (7) A provision as follows: PROOFS OF LOSS: If the policy provides for periodic payment for a continuing loss, written proof of loss must be given the company within ninety days after the end of each period for which the company is liable. For any other loss, written proof must be given within ninety days after such loss. If it was not reasonably possible to give written proof in the time required, the company may not reduce or deny the claim for this reason if the proof is filed as soon as reasonably possible. The proof required must be given no later than one year from the time specified unless the claimant was legally incapacitated. (8) A provision as follows: TIME OF PAYMENT OF CLAIMS: After receiving written proof of loss, the Company will pay ______ [insert period for payment which may not be less frequently than monthly] all benefits then due for ______ [insert applicable term for type of benefits]. (9) A provision as follows: PAYMENT OF CLAIMS: Benefits will be paid to the insured. Loss of life benefits are payable in accordance with the beneficiary designation in effect at the time of payment. If none is then in effect, the benefits will be paid to the insured's estate. Any other benefits unpaid at death may be paid, at the company's option, either to the insured's beneficiary or estate. Optional paragraph: If benefits are payable to the insured's estate or a beneficiary who cannot execute a valid release, the company can pay benefits up to one thousand dollars to someone related to the insured or beneficiary by blood or marriage whom the company considers to be entitled to the benefits. The company will be discharged to the extent of any such payment made in good faith. Optional paragraph: The company may pay all or a portion of any indemnities provided for health care services to the provider, unless the insured directs otherwise in writing by the time proofs of loss are filed. The company cannot require that the services be rendered by a particular provider. (10) A provision as follows: PHYSICAL EXAMINATIONS AND AUTOPSY: The company at its own expense may have the insured examined as often as reasonably necessary while a claim is pending and in cases of death of the insured the insurer at its own expense also may have an autopsy performed during the period of contestability unless prohibited by law. The autopsy must be performed in South Carolina. (11) A provision as follows: LEGAL ACTIONS: No legal action may be brought to recover on this policy within sixty days after written proof of loss has been given as required by this policy. No such action may be brought after six years from the time written proof of loss is required to be given. (12) A provision as follows: CHANGE OF BENEFICIARY: The insured can change the beneficiary at any time by giving the company written notice. The beneficiary's consent is not required for this or any other change in the policy, unless the designation of the beneficiary is irrevocable. (13) A provision as follows: CONFORMITY WITH STATE STATUTES: Any provision of this policy which, on its effective date, is in conflict with the laws of the state in which the insured resides on that date is amended to conform to the minimum requirements of such laws."

Name changed

SECTION 760. Section 38-71-370 of the 1976 Code is amended to read:

"Section 38-71-370. Except as provided in Section 38-71-410, no individual accident, health, or accident and health policy delivered or issued for delivery to any person in this State may contain provisions respecting the matters set forth below unless the provisions are in the words in which they appear in this section. However, the insurer may, at its option, use in lieu of these provisions a corresponding provision of different wording approved by the director or his designee which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the appropriate caption appearing in this section, or, at the option of the insurer, by appropriate individual or group captions or subcaptions approved by the director or his designee. (1) A provision as follows: CHANGE OF OCCUPATION: If the insured be injured or contract sickness after having changed his occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only such portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes his occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation, will reduce the premium rate accordingly and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but if such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in such state prior to the occurrence of the loss or prior to the date of proof of change in occupation. (2) A provision as follows: MISSTATEMENT OF AGE: If the insured's age has been misstated, the benefits will be those the premium paid would have purchased at the correct age. (3) A provision as follows: OTHER INSURANCE IN THIS INSURER: If the insured has more than one policy ______ [insert designation for limitation such as policy form-type-form], only one policy chosen by the insured will be effective. The company shall refund all premiums paid for all the other policies. Optional paragraph: If the insured has more than one policy with this company providing a total indemnity for _______ [insert type of coverage or coverages] of more than _______ [insert maximum limit of indemnity or indemnities] the excess insurance is void. The premiums paid for the excess must be returned to the insured. Or, in lieu thereof: Insurance effective at one time on the insured under a like policy or policies in this insurer is limited to the one such policy elected by the insured, his beneficiary, or his estate, as the case may be, and the insurer will return all premiums paid for all other such policies. On every application for insurance the insurer shall ask for the amount of insurance which the applicant currently has in force with such insurer. If the insurer fails to ascertain the amount of insurance which an applicant has in force, all policies issued by the insurer to the applicant remain in force and the insurer is liable for all benefits payable thereunder, unless the applicant has misrepresented the amount of existing coverage on the application. In all cases where the applicant indicates that other life, accident, and health insurance is in force with the insurer or the insurer's company, the insurer shall provide the applicant with the total amount of existing coverage with the insurer or insurer's company within sixty days. (4) A provision as follows: INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on a provision-of-service basis or on an expense-incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense-incurred coverage of this policy shall be for such proportion of the loss as the amount which would otherwise have been payable hereunder plus the total of the like amounts under all such other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for such loss and for the return of such portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision-of-service basis, the `like amount' of such other coverage shall be taken as the amount which the services rendered would have cost in the absence of such coverage. [If the foregoing policy provision is included in a policy which also contains the policy provision set out in item (5) of this section, there shall be added to the caption of the foregoing provision the phrase `EXPENSE-INCURRED BENEFITS'. The insurer may, at its option, include in this provision a definition of `other valid coverage', approved as to form by the director or his designee, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada and by hospital or medical service organizations and to any other coverage the inclusion of which may be approved by the director or his designee. In the absence of such definition such term shall not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, whether provided by a governmental agency or otherwise shall in all cases be deemed to be `other valid coverage' of which the insurer has had notice. In applying the foregoing policy provision no third-party liability coverage shall be included as `other valid coverage'.] (5) A provision as follows: INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense-incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss and for the return of such portion of the premium paid as shall exceed the pro ratio portion for the indemnities thus determined. [If the foregoing policy provision is included in a policy which also contains the policy provision set out in item (4) of this section, there shall be added to the caption of the foregoing provision the phrase `OTHER BENEFITS'. The insurer may, at its option, include in this provision a definition of `other valid coverage' approved as to form by the director or his designee, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and to any other coverage the inclusion of which may be approved by the director or his designee. In the absence of such definition such term shall not include group insurance or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, whether provided by a governmental agency or otherwise shall in all cases be deemed to be `other valid coverage' of which the insurer has had notice. In applying the foregoing policy provision no third-party liability coverage shall be included as `other valid coverage'.] (6) A provision as follows: RELATION OF EARNINGS TO INSURANCE: If the total monthly amount of loss-of-time benefits promised for the same loss under all valid loss-of-time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or his average monthly earnings for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings or such average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such two years as shall exceed the pro ratio amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of two hundred dollars or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time. [The foregoing policy provision may be inserted only in a policy which the insured has the right to continue in force subject to its terms by the timely payment of the premiums (a) until at least age fifty or (b) in the case of a policy issued after age forty-four, for at least five years from its date of issue. The insurer may, at its option, include in this provision a definition of `valid loss-of-time coverage', approved as to form by the director or his designee, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada or to any other coverage the inclusion of which may be approved by the director or his designee or any combination of such coverages. In the absence of such definition such term shall not include any coverage provided for such insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, or benefits provided by union welfare plans or by employer or employee benefit organization.] (7) A provision as follows: UNPAID PREMIUM: When a claim is paid, any premium due and unpaid may be deducted from the claim payment. (8) A provision as follows: ILLEGAL OCCUPATION: The company is not liable for any loss which results from the insured committing or attempting to commit a felony or from the insured engaging in an illegal occupation. (9) A provision as follows: INTOXICANTS AND NARCOTICS: The company is not liable for any loss resulting from the insured being drunk or under the influence of any narcotic unless taken on the advice of a physician."

Name changed

SECTION 761. Section 38-71-410 of the 1976 Code is amended to read:

"Section 38-71-410. If any provision of Sections 38-71-340 and 38-71-370 is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the director or his designee, shall omit from the policy any inapplicable provision or part of a provision and shall modify any inconsistent provision or part of the provision in a manner as to make the provision as contained in the policy consistent with the coverage provided by the policy."

Hearing before director or his designee; appeals to Administrative Law Judge Division

SECTION 762. Section 38-71-510 of the 1976 Code is amended to read:

"Section 38-71-510. The purpose of this subarticle is to provide reasonable standardization and simplification of terms and coverages of individual accident and health insurance policies or subscriber contracts of nonprofit hospital, medical, and dental service associations in order to facilitate public understanding and comparison, to eliminate provisions contained in individual accident and health insurance policies or subscriber contracts of nonprofit hospital, medical, and dental service associations which may be misleading or unreasonably confusing in connection with the purchase of the coverage or with the settlement of claims, to provide for full disclosure in the sale of accident and health coverages, and to provide for the termination of approval, after due notice and hearing before the director or his designee, of policy forms which do not comply with the minimum standards. Any decision or determination by the director or his designee to terminate approval pursuant to the administrative hearing may be appealed to the Administrative Law Judge Division as provided in accordance with Section 38-3-210."

Name changed

SECTION 763. Section 38-71-530 of the 1976 Code is amended to read:

"Section 38-71-530. (a) The department shall promulgate regulations to establish specific standards, including standards of full and fair disclosure, that set forth the manner, content, and required disclosure for the sale of individual policies of accident and health insurance or subscriber contracts of nonprofit hospital, medical, and dental service associations which must be in addition to and in accordance with applicable laws of this State and which may cover, but are not limited to, the following: (1) Terms of renewability. (2) Initial and subsequent conditions of eligibility. (3) Nonduplication of coverage provisions. (4) Coverage of dependents. (5) Preexisting conditions. (6) Termination of insurance. (7) Probationary periods. (8) Limitations. (9) Exceptions. (10) Reductions. (11) Elimination periods. (12) Requirements for replacement. (13) Recurrent conditions. (14) The definition of terms including, but not limited to, the following: (i) Hospital. (ii) Accident. (iii) Sickness. (iv) Injury. (v) Physician. (vi) Accidental means. (vii) Total disability. (viii) Partial disability. (ix) Nervous disorder. (x) Guaranteed renewable. (xi) Noncancelable. (b) The department may promulgate regulations that specify prohibited policy provisions not otherwise specifically authorized by law which in the opinion of the director or his designee are unjust, unfair, or unfairly discriminatory to the policyholder, any person insured under the policy, or beneficiary."

Name changed

SECTION 764. Section 38-71-540 of the 1976 Code is amended to read:

"Section 38-71-540. (a) The department shall promulgate regulations to establish minimum standards for benefits under each of the following categories of coverage in individual policies of accident and health insurance or subscriber contracts of nonprofit hospital, medical, and dental service associations, other than conversion policies issued pursuant to a contractual conversion privilege under a group policy: (1) basic hospital expense coverage; (2) basic medical-surgical expense coverage; (3) hospital confinement indemnity coverage; (4) major medical expense coverage; (5) disability income protection coverage; (6) accident-only coverage; and (7) specified disease or specified accident coverage. (b) This section does not preclude the issuance of any policy or contract which combines two or more of the categories of coverage enumerated in items (1) through (6) of subsection (a) of this section. (c) No policy or contract may be delivered or issued for delivery in this State which does not meet the prescribed minimum standards for the categories of coverage listed in items (1) through (7) of subsection (a) of this section which are contained within the policy or contract unless the director or his designee finds the policy or contract will be in the public interest and the policy or contract meets the requirements set forth in Section 38-71-310. (d) The department shall by regulation prescribe the method of identification of policies and contracts based upon coverages provided."

Name changed

SECTION 765. Section 38-71-550(b) of the 1976 Code is amended to read:

"(b) The department shall by regulation prescribe the format and content of the outline of coverage required by subsection (a) of this section. For purposes of this subsection (b), `format' means style, arrangement, and overall appearance, including such items as the size, color, and prominence of type and the arrangement of text and captions. The outline of coverage shall include: (1) A statement identifying the applicable category or categories of coverage provided by the policy or contract as prescribed in Section 38-71-540. (2) A description of the principal benefits and coverage provided in the policy or contract. (3) A statement of the exceptions, reductions, and limitations contained in the policy or contract. (4) A statement of the renewal provisions, including any reservation by the insurer of a right to change premiums. (5) A statement that the outline is a summary of the policy or contract issued or applied for and that the policy or contract should be consulted to determine governing contractual provisions."

Name changed; appeals to Administrative Law Judge Division; etc.

SECTION 766. Section 38-71-720 of the 1976 Code is amended to read:

"Section 38-71-720. No policy or contract of group accident, group health, or group accident and health insurance may be issued or delivered in this State, nor may any application, endorsement, or rider which becomes a part of the policy be used, until a copy of the form thereof has been filed with and approved by the director or his designee except as exempted by regulation of the department as permitted by Section 38-61-20. The director or his designee may disapprove the form if the form (1) does not meet the requirements of law, (2) contains any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. However, if no action has been taken to approve or disapprove a policy, contract, certificate, application, endorsement, or rider after the documents have been filed for ninety days, they may be issued and delivered until or unless subsequently disapproved by the director or his designee. This time period may be extended thirty days if the director or his designee gives written notice to the filer that he needs additional time to review the filing. The director or his designee shall, as soon as is practicable, notify in writing the insurer which has filed the form of his approval or disapproval. In the event of disapproval the notice must contain the reasons for disapproval and the insurer is entitled to a public hearing thereon. At any time after having given written approval thereof the director or his designee may, after a public hearing of which at least thirty days' written notice has been given, withdraw approval if he finds that the forms (1) do not meet the requirements of law, (2) contain any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory, or (3) are being solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading. The withdrawal of approval must be effected by written notice to the insurer and the insurer is entitled to a public hearing thereon. Any action or decision of the director or his designee to withdraw approval may be appealed to the Administrative Law Judge Division in accordance with Section 38-3-210."

Name changed

SECTION 767. Section 38-71-730(6) of the 1976 Code is amended to read:

"(6) A group policy or subscriber contract of accident and health insurance which is advertised, marketed, or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical, or surgical expenses of persons eligible for Medicare must equal, and may exceed, the minimum standards for Medicare supplement policies as contained in the regulations promulgated by the department."

Name changed

SECTION 768. Section 38-71-735 of the 1976 Code is amended to read:

"Section 38-71-735. No policy of group accident, group health, or group accident and health insurance may be delivered in this State unless it contains in substance the following provisions, or provisions which in the opinion of the director or his designee are more favorable to the persons insured, or at least as favorable to the persons insured, and more favorable to the policyholder. However, (1) items (f) and (k) do not apply to policies issued to a creditor; (2) the standard provisions required for individual policies do not apply to group policies; and (3) if any provision of this section is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the director or his designee, shall omit from the policy any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of the provision in a manner as to make the provision contained in the policy consistent with the coverage provided by the policy: (a) A provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except the first, during which grace period the policy continues in force, unless the policyholder has given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder is liable to the insurer for the payment of a pro ratio premium for the time the policy was in force during the grace period. (b) A provision that the validity of the policy may not be contested after it has been in force for two years from its date of issue and that no statement, except fraudulent misstatements, made by any person covered under the policy relating to insurability may be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of two years during the person's lifetime nor unless it is contained in a written instrument signed by the person making the statement. The provision does not preclude the assertion at any time of defenses based upon the person's ineligibility for coverage under the policy or upon other provisions in the policy. (c) A provision that a copy of the application, if any, of the policyholder must be attached to the policy when issued, that all statements made by the policyholder or by the persons insured are considered representations and not warranties, and that no statement made by any person insured may be used in any contest unless a copy of the instrument containing the statement is or has been furnished to the person or, in the event of the death or incapacity of the insured person, to the individual's beneficiary or personal representative. (d) A provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of the individual's coverage. (e) If the premiums or benefits vary by age, there must be a provision specifying an equitable adjustment of premiums or of benefits, or both, to be made in the event the age of a covered person has been misstated. The provision must contain a clear statement of the method of adjustment to be used. (f) A provision that the insurer will issue to the policyholder for delivery to each person insured a certificate setting forth a statement as to the insurance protection to which that person is entitled, to whom the insurance benefits are payable, and a statement as to any family member's or dependent's coverage. (g) A provision that written notice of claim must be given to the insurer within twenty days after the occurrence or commencement of any loss covered by the policy. Failure to give notice within the time does not invalidate nor reduce any claim if it can be shown not to have been reasonably possible to give the notice and that notice was given as soon as was reasonably possible. (h) A provision that the insurer will furnish to the person making claim, or to the policyholder for delivery to such person, such forms as are usually furnished by it for filing proof of loss. If the forms are not furnished before the expiration of fifteen days after the insurer received notice of any claim under the policy, the person making the claim is considered to have complied with the requirements of the policy as to proof of loss upon submitting within the time fixed in the policy for filing proof of loss, written proof covering the occurrence, character, and extent of the loss for which claim is made. (i) A provision that in the case of claim for loss of time for disability, written proof of the loss must be furnished to the insurer within ninety days after the commencement of the period for which the insurer is liable, and that subsequent written proofs of the continuance of the disability must be furnished to the insurer at intervals the insurer may reasonably require, and that in the case of claim for any other loss, written proof of the loss must be furnished to the insurer within ninety days after the date of the loss. Failure to furnish proof within the time does not invalidate nor reduce any claim if it was not reasonably possible to furnish the proof within that time so long as the proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity of the claimant, later than one year from the time proof is otherwise required. (j) A provision that all benefits payable under the policy other than benefits for loss of time will be paid not more than sixty days after receipt of proof of the loss. Subject to proof of loss, all accrued benefits payable under the policy for loss of time will be paid not less frequently than monthly during the continuance of the period for which the insurer is liable, and that any balance remaining unpaid at the termination of liability will be paid as soon as possible after receipt of the proof. (k) A provision that benefits for loss of life of the person insured are payable to the beneficiary designated by the person insured. If the policy contains conditions pertaining to family status the beneficiary may be the family member specified by the policy terms. In either case, payment of these benefits is subject to the provisions of law of this State if no such designated or specified beneficiary is living at the death of the person insured. All other benefits of the policy are payable to the person insured. The policy also may provide that if any benefit is payable to the estate of a person or to a person who is a minor or otherwise not competent to give a valid release, the insurer may pay the benefit, up to an amount not exceeding five thousand dollars, to any relative by blood or connection by marriage of the person who is considered by the insurer to be equitably entitled to the benefit. (l) A provision that the insurer at its own expense may examine the person of the individual for whom claim is made as often as reasonably necessary while a claim is pending and in cases of death of the insured the insurer at its own expense also may have an autopsy performed during the period of contestability unless prohibited by law. The autopsy must be performed in this State. (m) A provision that no action at law or in equity may be brought to recover on the policy before the expiration of sixty days after written proof of loss has been filed in accordance with the requirements of the policy and that no such action may be brought at all unless brought within six years after the time written proof of loss is required to be furnished. (n) In the case of a policy issued to a creditor, a provision that the insurer will furnish the policyholder for delivery to each debtor insured under the policy a certificate of insurance describing the coverage and specifying that the benefits payable first must be applied to reduce or extinguish the indebtedness."

Name changed

SECTION 769. Section 38-71-750 of the 1976 Code is amended to read:

"Section 38-71-750. (1) No group accident, group health, or group accident and health insurance coverage may be extended to residents of this State under a policy issued outside this State which does not provide in substance the provisions of this article unless the director or his designee determines that certain provisions are not appropriate for the coverage provided. (2) Any insurer extending blanket or group accident, health, or accident and health insurance under a policy issued outside this State to residents of this State shall comply with the requirements of this State relating to advertising and to claims settlement practices with respect to the insurance. (3) Upon request of the director or his designee, copies of policies and certificates under a policy of group accident, group health, or group accident and health insurance issued outside this State and covering residents of this State must be made available on an informational basis only. However, mass-marketed accident, health, or accident and health insurance policies and certificates shall receive prior approval of the director or his designee before they can be offered for sale to residents of this State."

Name changed; defined; powers of director

SECTION 770. Section 38-71-920(6) of the 1976 Code is amended to read:

"(6) `Director' means the person who is appointed by the Governor upon the advice and consent of the Senate and who is responsible for the operation and management of the Department of Insurance, including all of its divisions. The director may appoint or designate the person or persons who shall serve at the pleasure of the director to carry out the objectives or duties of the department as provided by law. Furthermore, the director may bestow upon his designee or deputy director any duty or function required of him by law in managing or supervising the Insurance Department."

Name changed

SECTION 771. Section 38-71-920(11)(c) of the 1976 Code is amended to read:

"(c) The director or his designee may approve the establishment of additional distinct groupings upon application to the director or his designee and a finding by the director or his designee that action would enhance the efficiency and fairness of the small employer insurance marketplace."

Name changed

SECTION 772. Section 38-71-920(12) of the 1976 Code is amended to read:

"(12) `Actuarial certification' means a written statement by a member of the American Academy of Actuaries or other individual acceptable to the director or his designee that a small employer insurer is in compliance with the provisions of Section 38-71-940, based upon the person's examination, including a review of the appropriate records and of the actuarial assumptions and methods utilized by the insurer in establishing premium rates for applicable health insurance plans."

Name changed

SECTION 773. Section 38-71-950(B) of the 1976 Code is amended to read:

"(B) A small employer insurer may cease to renew all plans under a form within a class of business or may cease to renew all plans under a class of business. In either case the insurer shall provide notice to all affected health insurance plans and to the commissioner in each state in which an affected insured individual is known to reside at least ninety days before termination of coverage. An insurer which exercises its right to cease to renew all plans under a form within a class of business may not transfer or otherwise provide coverage to any of the employers from the nonrenewed form or class of business unless the insurer offers to transfer or provide coverage to all affected employers and eligible employees and dependents without regard to case characteristics, claim experience, health status, or duration of coverage. In addition, any insurer which exercises its right to cease to renew all plans within a class of business may not establish a new class of business for five years after the nonrenewal of the plans without prior approval of the director or his designee."

Name changed

SECTION 774. Section 38-71-970 of the 1976 Code is amended to read:

"Section 38-71-970. (A) A small employer insurer shall maintain at its principal place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation which demonstrate that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles. (B) Each small employer insurer shall file each March first with the department an actuarial certification certifying that the insurer is in compliance with this section and that the rating methods of the insurer are actuarially sound. A copy of the certification must be retained by the insurer at its principal place of business. (C) A small employer insurer shall make the information and documentation described in subsection (A) available to the director or his designee upon request. The information must be considered proprietary and trade secret information and is not subject to disclosure by the director or his designee to persons outside of the department except as agreed to by the insurer or as ordered by a court of competent jurisdiction."

Name changed

SECTION 775. Section 38-71-980 of the 1976 Code is amended to read:

"Section 38-71-980. The director or his designee may suspend all or any part of Section 38-71-940 as to the premium rates applicable to one or more small employers for one or more rating periods upon a filing by the small employer insurer and a finding by the director or his designee that either the suspension is reasonable in light of the financial condition of the insurer or that the suspension would enhance the efficiency and fairness of the marketplace for small employer health insurance."

Name changed

SECTION 776. Section 38-71-1010(6) of the 1976 Code is amended to read:

"(6) under a policy or contract issued to any other similar group which, in the discretion of the director or his designee, may be eligible for issuance of a blanket accident and health policy or contract either under special circumstances, exceptional hazards, or for short periods of duration."

Name changed

SECTION 777. Section 38-71-1020 of the 1976 Code is amended to read:

"Section 38-71-1020. All blanket accident and health insurance policies are subject to the provisions of Articles 1 and 3 of this chapter. However, no policy is required to contain any of the required policy provisions set forth in Section 38-71-340. However, no policy may contain any provision relative to notice of claim, proofs of loss or time of payment of claims, or the time within which suit may be brought upon the policy which, in the opinion of the director or his designee, is less favorable to the insured than would be permitted by the required policy provisions."

Name changed; etc.

SECTION 778. Section 38-71-1110 of the 1976 Code is amended to read:

"Section 38-71-1110. `Accident and health insurance on a franchise plan' is that form of accident and health insurance issued to (1) three or more employees of any corporation, copartnership, or individual employer or any governmental corporation, agency, or department or (2) ten or more members of any trade or professional association, labor union, or any other association having had an active existence for at least two years when the association or union has a constitution or bylaws and is formed in good faith for purposes other than that of obtaining insurance, when (a) the insureds, with or without their dependents, are issued the same form of an individual policy varying only as to amounts and kinds of coverage applied for by the insureds and (b) the employer, union, or association has approved and endorsed the policy being sold to its employees or members. Accident and health insurance on a franchise plan may be written under rates less than the usual rates for the insurance, but all premium rates and discounts the insurer proposes to use must be filed with the department and approved by the director or his designee as required by Section 38-71-310."

Name changed; defined; powers of director

SECTION 779. Section 38-72-40 of the 1976 Code is amended to read:

"Section 38-72-40. Unless the context requires otherwise, as used in this chapter: (1) `Long term care insurance' means an insurance policy or a rider advertised, marketed, offered, or designed to provide benefits for not less than twelve consecutive months for each covered person on an expense incurred, indemnity, prepaid, or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital. The term includes group and individual annuities and life insurance policies or riders which provide directly or which supplement long term care insurance. It also includes a policy or rider which provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. Long term care insurance may be issued by insurers, fraternal benefit societies, nonprofit health, hospital, and medical service corporations, prepaid health plans, health maintenance organizations, or a similar organization to the extent they otherwise are authorized to issue life or health insurance. Long term care insurance does not include an insurance policy offered primarily to provide basic medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage. (2) `Applicant' means: (a) in the case of an individual long term care insurance policy the person who seeks to contract for benefits; and (b) in the case of a group long term care insurance policy, the proposed certificate holder. (3) `Certificate' means any certificate issued under a group long term care insurance policy, which policy has been delivered or issued for delivery in this State. (4) `Director' means the person who is appointed by the Governor upon the advice and consent of the Senate and who is responsible for the operation and management of the Department of Insurance, including all of its divisions. The director may appoint or designate the person or persons who shall serve at the pleasure of the director to carry out the objectives or duties of the department as provided by law. Furthermore, the director may bestow upon his designee or deputy director any duty or function required of him by law in managing or supervising the insurance department. (5) `Group long term care insurance' means a long term care insurance policy which is delivered or issued for delivery in this State and issued to: (a) one or more employers or labor organizations, or to a trust or to the trustees of a fund established by one or more employers or labor organizations or a combination thereof, for employees or former employees or a combination thereof, or for members or former members or a combination thereof of the labor organizations; or (b) any professional, trade, or occupational association for its members or former or retired members or combination thereof if such association: (i) is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation; and (ii) has been maintained in good faith for purposes other than obtaining insurance; or (c) an association or to a trust or to the trustee of a fund established, created, or maintained for the benefit of members of one or more associations. Prior to advertising, marketing, or offering the policy within this State, the association or the insurer of the association shall file evidence with the department that the association has at the outset a minimum of one hundred persons and has been organized and maintained in good faith for purposes other than that of obtaining insurance, has been in active existence for at least one year, and has a constitution and bylaws which provide that the association holds regular meetings not less than annually to further the purposes of its members, except for credit unions, the association collects dues or solicits contributions from members, and the members have voting privileges and representation on the governing board and committees. Ninety days after the filing, the association is considered to have satisfied the organizational requirements unless the director or his designee makes a finding that the association does not satisfy those organizational requirements. (d) a group other than as described in items (5)(a), (5)(b), and (5)(c), subject to a finding by the director or his designee that the issuance of the group policy is not contrary to the best interest of the public, the issuance of the group policy would result in economies of acquisition or administration, and the benefits are reasonable in relation to the premiums charged. (6) `Policy' means any policy, contract, subscriber agreement, rider, or endorsement delivered or issued for delivery in this State by an insurer, fraternal benefit society, nonprofit health, hospital, or medical service corporation, prepaid health plan, health maintenance organization, or any similar organization."

Name changed

SECTION 780. Section 38-72-60(A) of the 1976 Code is amended to read:

"(A) The director or his designee shall submit to the General Assembly for approval regulations to carry out the purposes of this chapter."

Name changed

SECTION 781. Section 38-72-60(C)(3) of the 1976 Code is amended to read:

"(3) The director or his designee may extend the limitation periods set forth in items (1) and (2) of this subsection as to specific age group categories in specific policy forms upon findings that the extension is in the best interest of the public."

Name changed

SECTION 782. Section 38-72-60(F)(1)(a) of the 1976 Code is amended to read:

"(a) The director or his designee shall prescribe a standard format, including style, arrangement, and overall appearance, and the content of an outline of coverage."

Name changed; duties, powers transferred to Administrative Law Judge Division; language deleted; etc.

SECTION 783. Chapter 73, Title 38 of the 1976 Code is amended to read:

"CHAPTER 73

Property, Casualty, Inland Marine, and Surety Rates and Rate-making Organizations

Article 1

General Provisions

Section 38-73-10. (a) The purposes of this chapter are to: (1) promote the public welfare by regulating insurance rates to the end that they may not be excessive, inadequate, or unfairly discriminatory and to authorize and regulate cooperative action among insurers in rate making and in other matters within the scope of this chapter; (2) empower the director or his designee to fix, establish, and promulgate any uniform statistical plan necessary or appropriate to obtain all automobile insurance loss and loss adjustment expense experience, other expense experience, and all other appropriate statistical and financial data from insurers, rating organizations, and advisory organizations engaged in an automobile insurance business in this state to the end that the department shall promulgate the risk classification and territorial plans to be used by all insurers of automobile insurance in this state and in order that the director or his designee may test the risk and territorial differentials previously established against the most recently available loss experience; (3) provide that investment income accruing to automobile insurers is taken into consideration in the approval of rates or premium charges and in the determination of any net loss incurred by the South Carolina Reinsurance Facility and to make provision for the securing by the department of all necessary or appropriate financial data for purposes of ascertaining and determining the investment income and the profits from realized and unrealized capital gains of each automobile insurer doing business in this State. Nothing in this chapter is intended to prohibit or discourage reasonable competition. (b) This chapter must be liberally interpreted to carry into effect the purposes of this chapter.

Section 38-73-20. (a) This chapter applies to (1) fire and allied lines and inland marine insurance, as defined in Section 38-73-310 and (2) casualty insurance, including fidelity, surety, and guaranty bonds, and to all other forms of automobile insurance, in either case on risks located or operations in this State. However, Article 3 and Article 5 of this chapter apply only to the respective classes of insurance as stated in Sections 38-73-310 and 38-73-410. (b) This chapter does not apply to: (1) reinsurance, other than joint reinsurance to the extent stated in Article 15 of this chapter; (2) insurance of vessels or craft or their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine, insurance policies; (3) accident and health insurance; (4) insurance against loss of or damage to aircraft or against liability arising out of the ownership, maintenance, or use of aircraft; or (5) life insurance.

Section 38-73-30. If any kind of insurance, subdivision, or combination thereof or type of coverage subject to this chapter is also subject to regulation by another rate regulatory act of this State or other law of this State, an insurer to which the other act or law and this chapter are otherwise applicable shall file with the department a designation as to which rate regulatory chapter or act or law is applicable to it with respect to that kind of insurance, subdivision, or combination thereof or type of coverage.

Section 38-73-40. The department may promulgate statistical plans, reasonably adapted to each of the rating systems on file with the department, which may be modified from time to time and which must be used thereafter by each insurer in the recording and reporting of its loss and countrywide expense experience, in order that the experience of all insurers may be made available at least annually in such form and detail as may be necessary to aid him in determining whether rating systems comply with the standards set forth in Sections 38-73-330 and 38-73-430, as the case may be. The plans may also provide for the recording and reporting of expense experience items which are specially applicable to this State and are not susceptible of determination by a prorating of countrywide expense experience. In promulgating these plans, the department shall give due consideration to the rating systems on file with it and, in order that such plans may be as uniform as is practicable among the several states, to the form of the plans used for rating systems in other states. The department may designate one or more rating organizations or other agencies to assist him in gathering the experience and making compilations thereof. These compilations must be made available, subject to plans promulgated by the department, to insurers and rating organizations.

Section 38-73-50. Reasonable regulations and plans may be promulgated by the department for the interchange of data necessary for the application of rating plans.

Section 38-73-60. In order to further uniform administration of rate regulatory laws, the director or his designee and every insurer and rating organization may exchange information and experience data with insurance supervisory officials, insurers, and rating organizations in other states and may consult with them with respect to rate making and the application of rating systems.

Section 38-73-70. The department may make reasonable regulations necessary to effect the purposes of this chapter.

Section 38-73-80. No person or organization may wilfully withhold information from or knowingly give false or misleading information to the director or his designee, any statistical agency designated by the director or his designee, any rating organization, or any insurer which will affect the rates or premiums chargeable under this chapter. A violation of this section subjects the one guilty of the violation to the penalties provided in Chapter 2 of this title.

Section 38-73-90. The director or his designee shall, at least once in five years, make or cause to be made an examination of each rating organization licensed in this State as provided in Section 38-73-1230. The director or his designee may, as often as he considers advisable, make or cause to be made an examination of each advisory organization referred to in Section 38-73-1510 and of each group, association, or other organization referred to in Section 38-73-1710. The reasonable costs of the examination must be paid by the rating organization, advisory organization, or group, association, or other organization examined upon presentation to it of a detailed account of the costs. The officers, manager, agents, and employees of these rating organizations, advisory organizations, or groups, associations, or other organizations may be examined at any time under oath and shall exhibit all books, records, accounts, documents or agreements governing their method of operation. These examinations are subject to the provisions of Sections 38-13-40 to 38-13-60. In lieu of an examination the director or his designee may accept the report of an examination made by the insurance supervisory official of another state pursuant to the laws of that state.

Section 38-73-110. The director or his designee may suspend the license of any rating organization or insurer which fails to comply with an order of the director or his designee within the time limited by the order or any extension thereof which the director or his designee may grant. The director or his designee may not suspend the license of any rating organization or insurer for failure to comply with an order until the time prescribed for an appeal therefrom has expired or, if an appeal has been taken, until the order has been affirmed. The director or his designee may determine when a suspension of license becomes effective and it remains in effect for the period fixed by him unless he modifies or rescinds the suspension or until the order upon which the suspension is based is modified, rescinded, or reversed.

Section 38-73-120. No penalty may be imposed and no license may be suspended or revoked except upon a written order of the director or his designee, stating his findings, made after a hearing held upon not less than thirty days' written notice to the person or organization specifying the alleged violation.

Section 38-73-130. Any insurer or rating organization aggrieved by any order or decision of the director or his designee made without a hearing may, within thirty days after notice of the order to the insurer or organization, make written request to the Administrative Law Judge Division for a hearing. The Administrative Law Judge Division shall hear the party or parties within twenty days after receipt of the request and shall give not less than ten days' written notice of the time and place of the hearing. Within fifteen days after the hearing the Administrative Law Judge Division shall affirm, reverse, or modify the previous action, specifying his reasons therefor. Pending the hearing and decision thereon the director or his designee may suspend or postpone the effective date of his previous action.

Article 3

Wind and Hail Insurance

Section 38-73-310. This article applies only to fire and allied lines and inland marine insurance, on risks located in this State. Inland marine insurance includes insurance (a) defined by statute or by interpretation thereof, (b) if not so defined or interpreted, defined by ruling of the director or his designee, or (c) as established by general custom of the business as inland marine insurance. This article does not apply to automobile insurance nor to insurance against liability arising out of the ownership, maintenance, or use of motor vehicles.

Section 38-73-320. If any kind of insurance, subdivision, or combination thereof or type of coverage subject to this article is also subject to regulation under Article 5 of this chapter, an insurer to which both articles are otherwise applicable shall file with the department a designation as to which regulatory article shall be applicable to it with respect to that kind of insurance, subdivision, or combination thereof or type of coverage.

Section 38-73-330. Rates must be made in accordance with the following provisions: (1) Manual, minimum, and class rates, rating schedules, or rating plans must be made and adopted, except in the case of specific inland marine rates on risks specially rated. (2) Rates may not be excessive, inadequate, or unfairly discriminatory. Due consideration must be given for installation and maintenance of nationally recognized hazard reducing systems. (3) Due consideration must be given to past and prospective loss experience within and outside this State, to the conflagration and catastrophe hazards, to a reasonable margin for underwriting profit and contingencies, to dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers, to past and prospective expenses, both countrywide and those specially applicable to this State, and to all other relevant factors within and outside this State, and in the case of fire insurance rates consideration must be given to the experience of the fire insurance business during a period of not less than the most recent five-year period for which the experience is available. Except to the extent necessary to meet the provisions of item (2) of this section, uniformity among insurers in any matters within the scope of this section is neither required nor prohibited. Rates made in accordance with this section may be used subject to the provisions of this chapter.

Section 38-73-340. Every insurer shall file with the department, except as to inland marine risks which by general custom of the business are not written according to manual rates or rating plans, every manual, minimum, or class rate, rating schedule, or rating plan, and every other rating rule and every modification of any of the foregoing which it proposes to use. Every filing shall state the proposed effective date thereof and shall indicate the character and extent of coverage contemplated. Specific inland marine rates on risks specially rated, made by a rating organization, must be filed with the department.

Article 5

Casualty and Surety Rates

Section 38-73-410. This article applies only to casualty insurance, including fidelity, surety, and guaranty bonds, and to all other forms of automobile insurance, on risks or operations in this State.

Section 38-73-420. If any kind of insurance, subdivision, or combination thereof or type of coverage subject to this article is also subject to regulation under Article 3 of this chapter, an insurer to which both articles are otherwise applicable shall file with the department a designation as to which regulatory article shall be applicable to it with respect to that kind of insurance, subdivision, or combination thereof or type of coverage.

Section 38-73-430. Rates must be made in accordance with the following provisions: (1) Due consideration must be given to past and prospective loss experience within and outside this State, to catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies, to dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers, to past and prospective expenses, both countrywide and those specially applicable to this State, and to all other relevant factors within and outside of this State. (2) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of the insurer or group with respect to any kind of insurance or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable. (3) Risks may be grouped by classifications for the establishment of rates and minimum premiums, and classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring any variations in hazards or expense provisions, or both, that can be demonstrated to have a probable effect upon losses or expenses. (4) Rates may not be excessive, inadequate, or unfairly discriminatory. Except to the extent necessary to meet the provisions of item (4) of this section, uniformity among insurers in any matters within the scope of this section is neither required nor prohibited.

Section 38-73-440. In determining the premium rates to be charged on automobile insurance, it is unlawful to consider race, religion, national origin, or economic status.

Section 38-73-450. (a) Every final rate or premium charge proposed to be used by an automobile insurer may not be used unless it has first been filed with the department and approved by the director or his designee as being adequate, not excessive, and not unfairly discriminatory. In connection with any hearing, action, suit, proceeding, or judicial review respecting the approval or disapproval of these rates or premium charges, the burden of persuasion falls upon the affected insurer or insurers to establish that the challenged rates or premium charges are adequate, not excessive, and not unfairly discriminatory. (b) In the approval of automobile insurance rates and in determining whether the final rates or premium charges for automobile insurance are adequate, not excessive, and not unfairly discriminatory, the director or his designee shall take into account investment income from unearned premium and loss reserves as well as profits from investment income. Every insurer writing automobile insurance in this State shall file with the department, in a form the director or his designee orders, complete financial records showing the amount of profit on every line of automobile insurance during the previous year and shall also file records showing profits or losses from such investment income, which records shall include investment income or profit on net realized and unrealized capital gains. However, unrealized capital gains or losses may not be considered in the rate-making process.

Section 38-73-455. An automobile insurer shall offer two 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 of these rates are subject to all surcharges or discounts, if any, applicable under any approved merit rating plan, credit or discount plan promulgated by the department or approved by the director or his designee. 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 38-77-340 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 Motor Vehicle Division of the Department of Revenue and Taxation; 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 and 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 Motor Vehicle Division of the South Carolina Department of Revenue and Taxation; 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 of 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) 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 director or his designee 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) 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 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 38-73-456. An insurer may not increase premiums on or add surcharges to automobile insurance of a person charged with a driving violation unless he is convicted of the violation. The Motor Vehicle Division of the Department of Revenue and Taxation may not report an alleged violation to insurers until the person charged is convicted and when reporting must also report the conviction date.

Section 38-73-457. Notwithstanding Sections 38-73-920 and 38-73-1210, every automobile insurer and rating organization shall, prior to October 1, 1987, file with the department a base rate, which is defined as a rate by coverage calculated solely upon the experience generated by the risk for each class and territory retained by the insurer in its voluntary book of business and which must not include experience generated by risks ceded or assumed from the Reinsurance Facility established under Section 38-73-1030. An objective standards rate by coverage must also be filed which is twenty-five percent above the base rate previously described for each class and territory. The base rate must be calculated by removing from the rate or premium charge, then in effect for the automobile insurer, that portion of the rate or premium charge attributable to the net gain or loss of the insurer as a result of participation in the operating results of the facility as required by Section 38-77-760. In determining the base rate and objective standards rate, by coverage, the director or his designee, in order that no extra premium revenue is generated by this section, shall require that the insurer's average rate, by coverage, on October 1, 1987, (computed as a weighted average of the base rate and objective standards rate, by coverage, as determined by the Commissioner), not exceed the insurer's average rate, by coverage, prior to October 1, 1987, as determined by the director or his designee. The provisions of the Administrative Procedures Act apply to any appeal of a base rate or objective standards rate brought thereunder before the Administrative Law Judge Division as provided by law. The base rate or objective standards rate approved by the director or his designee may be put into effect under bond in a similar manner that a public utility may put a proposed rate increase into effect under bond as provided by law. No insurer may file a base rate for any class or territory which is higher than the rate or premium charge, exclusive of that portion required by Section 38-73-460, approved by the director or his designee for use on October 1, 1987. As a result of this section, no insured may receive an increase in rates for other than an increase in coverage or due to the provisions of Section 38-77-280, 38-77-610, or 38-73-455, unless the insurer files additional rates in accordance with this title. The base rate and objective standards rate filed by each insurer of automobile insurance are effective if they meet the requirements of this section, on or after July 1, 1988, for all eligible applicants and upon the renewal date, on or after July 1, 1988, for all eligible existing policyholders. If the base rate and objective standards rate filed by an automobile insurer do not meet the requirements of this section, the director or his designee shall suspend the authority of that insurer to write automobile insurance until the deficiencies are corrected. After July 1, 1988, no rate or premium charge, exclusive of the facility recoupment charge approved or established pursuant to Section 38-77-610 may be approved for an insurer of automobile insurance unless that rate or premium charge is calculated in accordance with this section and meets the other applicable requirements of this title pertaining to the approval of rates or premium charges. The Consumer Advocate, upon request to the director or his designee, must be provided by him with a copy of any base rate filed with the director or his designee along with any supporting materials, documents, or studies utilized to support the filed base rate. In addition, every automobile insurer and rating organization shall promptly respond to requests for information and data requested by the Consumer Advocate relating to the filed base rate. The Consumer Advocate must be afforded an opportunity for a hearing before the director or his designee on any filed base rate before it takes effect that he believes does not meet the requirements of this section. Final decisions of the director or his designee regarding this hearing are subject to the provisions of the State Administrative Procedures Act and may be appealed to the Administrative Law Judge Division as provided by law.

Section 38-73-460. In the making and approval of rates for automobile insurance, consideration must be given to the net gains or losses incurred by insurers as a result of participation in the operating results and expenses, respectively, of the South Carolina Reinsurance Facility.

Section 38-73-465. (A) In considering any rate filing or in reviewing any rate in effect for automobile insurance, or upon complaint or petition by the Consumer Advocate, or any other interested party, the director or his designee shall review the rate experience. If the insurer has realized an unfairly discriminatory, excessive, or unreasonable profit, in the opinion of the director or his designee, the director or his designee shall order the same removed and require that the individual insurer promulgate a rate which is not unfairly discriminatory, excessive, or unreasonable and order a pro ratio rebate of any unfairly discriminatory, excessive, or unreasonable amount charged together with interest at the rate of twelve percent per annum either in the form of a cash refund or as a credit toward the future premiums. The director or his designee shall rescind the order of rebate only upon a showing that compliance would cause an insolvency. (B) In making the determination that a rate is unfairly discriminatory, excessive, or unreasonable, the insurance department, in accordance with generally accepted and reasonable actuarial techniques, shall include consideration of the following factors: 1. past and prospective loss experience within and without this State; 2. past and prospective expenses; 3. the degree of competition among insurers for the risk insured; 4. investment income. Investment income also must be given effect in all other property or casualty insurance rates and the director or his designee may order the use of similar instructions and exhibits by replacement of that company's insurance data for other lines instead of the private passenger data referenced in this subitem. Companies shall supply the information requested in this item regardless of whether or not the references to the Annual Statements change. Exhibit 1. Expected Underwriting Results with Unchanged Premium: This exhibit must display the following data and calculations: i. total limits premium at current level; ii. forecasted losses; iii. forecasted loss adjustment expenses; iv. other underwriting expense; v. underwriting result (profit or loss); which must be calculated as total limits premium at current level by coverage, less losses, less loss adjustment expenses, less other underwriting expenses; and vi. underwriting result (profit or loss) as a percent of premium, which must be calculated as the ratio of underwriting result to earned premium at current levels. Exhibit 2. Analysis of Earnings Requirements: This exhibit must display the following information: i. the amount of surplus allocated to each coverage for South Carolina private-passenger automobile insurance as calculated in investment income Exhibit 4, Line 4; ii. the target rate of return on surplus which the filer believes is appropriate for the coverage in question. Testimony and evidence in support of this target rate of return must accompany the filing; iii. the required dollar return on surplus to produce the target rate of return; iv. the ratio of investment income to premium earned as calculated on Investment Income Exhibit 4, Line 11; v. forecasted South Carolina premium earned by coverage; vi. the expected dollar return from investment calculated by multiplying the ratio of investment income to premium earned by forecasted premium earned; vii. required underwriting return calculated as the required return on surplus less the dollar return from investment; and viii. the ratio of the required underwriting return to forecasted premium earned.

EXHIBIT 1. EXPECTED UNDERWRITING RESULTS WITH UNCHANGED PREMIUM BODILY PROPERTY COMPRE- COLLISION INJURY DAMAGE HENSIVE 1. Earned Premium at Current Level $____ $____ $____ $____ 2. Forecasted Loss $____ $____ $____ $____ 3. Forecasted Loss BODILY PROPERTY COMPRE- COLLISION INJURY DAMAGE HENSIVE Adjustment$____ $____ $____ $____ 4. Other Underwriting Expenses $____ $____ $____ $____ 5. Underwriting Result$____$____ $____ $____ 6. Underwriting Result as a Percent of Premium_____% _____% _____% ____%

EXHIBIT 2. ANALYSIS OF EARNINGS REQUIREMENTS BODILY PROPERTY COMPRE- COLLISION INJURY DAMAGE HENSIVE

1. Surplus by Line, Inv. Inc, Exhibit 4, Line 4$_______ $________ $________ $________ 2. Target Rate of Return on Surplus______% ______% ______% ______% 3. Required on Surplus (1) x (2)$________ $________ $_______ $________ 4. Ratio of Investment Income to Premium Earned Inv. Inc. Exhibit 4, Line 11__________________ _________ _________ 5. Forecasted Premium Earned $________ $________ $________ $________ 6. Return from Investment (4) x (5) $________ $________ $________ $________ 7. Required Underwriting Return (3)-(6)$________ $________ $________ $________ 8. Ratio, Required Underwriting to Premium Earned (7)/(5) ______% ______% ______% ______%

Instructions for Completing Investment Income Exhibits (A) Each filer shall provide the following exhibits pertaining to investment income associated with private passenger automobile insurance in the formats specified by Investment Income Exhibits 1, 2, 3, and 4. 1. Investment Income Exhibit 1: The filer shall provide the following information according to the format specified in Investment Income Exhibit 1, Investment Income from Loss and Loss Expense Reserves: i.Net investment gain, from the filer's most recent annual statement, page 4, line 9a; ii.cash and invested assets, from the filer's most recent annual statement, page 2, line 8A, for the two most recent years and mean cash and invested assets calculated for those two years; iii.rate of return on investments calculated as the ratio of net investment gain to mean cash and invested assets; iv.South Carolina loss reserves (Incl. IBNR) by coverage as of December thirty-first of the two most recent calendar years; v.South Carolina loss adjustment expense reserves (Incl. IBNR) as of December thirty-first of the two most recent calendar years; vi.mean loss and loss adjustment expense reserves for the period; vii.premium earned by coverage; viii.the ratio of loss and loss expense reserves to premium earned; and ix.investment income from reserves as a percent of premium earned. 2. Investment Income Exhibit 2: The filer shall provide the following information according to the format specified in Investment Income Exhibit 2, Investment Income from Unearned Premium Reserves: i. South Carolina unearned premium reserves by coverage as of December thirty-first of the two most recent calendar years and the mean unearned premium reserve calculated for that period; ii. premium earned by coverage; iii. the ratio of unearned premium reserve to earned premium, by coverage; iv. rate of return on investments; and v. investment income as a percent of premium earned, by coverage. 3. Investment Income Exhibit 3: Each filer shall provide the following information according to the format specified in Investment Income Exhibit 3, Companywide Reserves, Surplus, and Invested Assets. The references on the exhibit pertain to the filer's most recent annual statement: i. loss reserves for the most recent calendar year; ii. loss adjustment expenses reserves for the most recent calendar year and the ratio of unpaid loss adjustment expenses to unpaid losses; iii. unearned premium reserves for the most recent calendar year; iv. total reserves; v. cash and invested assets as of December thirty-first of the most recent calendar year; vi. surplus as of December thirty-first of the most recent calendar year; vii. the percent of surplus invested, calculated as cash and invested assets less reserves divided by surplus; and viii.the ratio of surplus to reserves. 4. Investment Income Exhibit 4: The filer shall provide the following information according to the format specified in Investment Income Exhibit 4, Investment Income as a percent of premium: i. items 1 through 3 on the exhibit mean South Carolina premium, loss, and loss adjustment reserves, and the sum of these three components of reserves, by coverage; ii. item 4 of the exhibit means the dollar amount of South Carolina surplus by coverage, calculated by multiplying total South Carolina reserves by coverage times the ratio of surplus to reserves; iii. items 5 and 6 of the exhibit mean the dollar amount of invested South Carolina surplus by coverage, calculated as the product of South Carolina surplus times the percent of surplus invested; iv. items 7 through 9 of the exhibit mean the sum of South Carolina reserves and surplus and the dollar amount of investment income earned on these reserves and surplus; v. items 10 and 11 of the exhibit mean investment income as a percent of premium earned by coverage.

Charts To Follow INVESTMENT INCOME EXHIBIT 1. INVESTMENT INCOME FROM LOSS AND LOSS EXPENSE RESERVES, SOUTH CAROLINA 1. Net Investment Gain, Annual Statement P-4, Line 9a $________ 2. Cash Invested Assets, Annual Statement P-2, Line 9a a. As of * $________ t. As of ** $________ Mean Cash & Invested Assets $________ 3. Rate of Return on Investments (1./2c.) ______%

BODILYPROPERTYCOMPRE-COLLISION INJURY DAMAGE HENSIVE 4. S.C. Loss Reserves a. As of * $________ $________ $________ $________ b. As of **$________ $________ $________ $________

5. S.C. Loss Adjustment Expense Reserves a. As of * $________ $________ $________ $________ b. As of **$________ $________ $________ $________

6. Mean Loss & LAX Reserves ((4a. + 4b.)/2) + ((5a. + 5b.)/2)$________ $________ $________ $________

7. Premium Earned * $________ $________ $________ $________

8. Ratio Loss & LAX Reserves to Earned Premium (6./7.) ______% ______% ______% ______%

9. Investment Income as a Percent of Premium (3. X 8.) ______% ______% ______% ______%

* Current Calendar Year Available ** Previous Calendar Year Available

INVESTMENT INCOME EXHIBIT 2. INVESTMENT INCOME FROM UNEARNED PREMIUM RESERVE, SOUTH CAROLINA BODILY PROPERTY COMPRE- COLLISION INJURY DAMAGE HENSIVE 1. S.C. Unearned Premium Reserves a. As of *$________ $________ $________ $________ b. As of ** $________ $________ $________ $________ c. Mean Premium Reserve (1a. + 1b.)/2$ $

2. Premium Earned *$________ $________ $________ $________

3. Ratio, Unearned Premium Reserves to Earned Premium (1c./2.)______% ______% ______% ______%

4. Rate of Return on Investments Investment Income Exhibit 1, Line 3______% ______% ______% ______%

5. Investment Income as a Percent of Premium (3) X (4) ______% ______% ______% ______%

* Current Calendar Year Available ** Previous Calendar Year Available

INVESTMENT INCOME EXHIBIT 3. COMPANYWIDE RESERVES, SURPLUS AND INVESTED ASSETS ITEM AMOUNT ANNUAL REFERENCE STATEMENT 1. Loss Reserve * Page 10, Part 3A. $________ Line 32, Col. 5 2. Loss Adjustment Page 10, Part 3A, Reserve * $________ Line 32, Col. 6 3. Unearned Premium* Page 7, Part 2, $________ Line 31, Col. 3 4. Total Reserves (1 +2 +3) $________ 5. Cash and Invested Page 2, Line 8A, Assets * $________ Col. 1 6. Surplus* Page 4, Line 32, $________ Col. 1 7. Percent of Surplus Invested ((5 - 4)/6) ________% 8. Rate of Surplus to Reserves ________% (6/4) __________ *Current Calendar Year Available

INVESTMENT INCOME EXHIBIT 4. INVESTMENT INCOME AS A PERCENT OF PREMIUM, SOUTH CAROLINA BODILY PROPERTY COMPRE- COLLISION INJURY DAMAGE HENSIVE 1. Mean S.C. Premium Reserve Investment Income Exhibit 2, Line 1c. $_______ $_______ $_______ $_______ 2. Mean S.C. Loss & Loss Adj. Reserve Investment Income Exhibit 1, Line 6 $_______ $_______ $_______ $_______ 3. Total S.C. Reserves $_______ $_______ $_______ $_______ 4. S.C. Surplus, (3) X Inv. Inc. Exhibit 3, Line 8 $_______ $_______ $_______ $_______ 5. Percent of Surplus Invested Investment Income Exhibit 3, Line 7 _____% _____% _____% _____% (4)X(5) $_______ $_______ $_______ $_______ 7. Sum, Reserves, and Invested Surplus (3)+(6) $_______ $_______ $_______ $_______ 8. Rate of Return on Investments Investment Income Exhibit 1, Line 3 ______% ______% ______% ______% 9. Investment Income Earned on Reserves and Invested Surplus (7)X(8) $_______ $_______ $_______ $_______ 10. Premium Earned Investment Income Exhibit 1, Line 7 $_______ $_______ $_______ $_______ 11. Investment Income as a % of Premium Earned (9)/(10) ______% ______% ______% ______%

The director or his designee may reward an insurer actually achieving less than the maximum expense level allowable in rates after the initial three-year period by allowing a higher underwriting profit than would otherwise result from use of the instructions and exhibits set forth in this item. However, this reward may not exceed the difference between the insurer's actual expense level achieved and the maximum level allowable in rates in a given year. 5. the reasonableness of the judgment reflected in the filing; 6. a reasonable margin for underwriting profit and contingencies which may be a negative margin; 7. other relevant factors such as those which impact upon the frequency or severity of claims or upon expenses or profits, percentage of surplus relative to earned premium, as well as additional factors to be considered as a result of the enactment of the Automobile Insurance Reform Act of 1989. [See Editor's Note below.] 8.(a)In making a determination that an insurance rate is unfairly discriminatory, excessive, or unreasonable, the insurance department, in accordance with generally accepted and reasonable actuarial techniques, shall include consideration of expenses. Effective after June 30, 1989, expenses must be given effect in all private passenger automobile insurance rates by inclusion in rates of a level of expenses approximating an efficient company for the appropriate category in which each insurer qualifies. Insurers must be categorized by the marketing mechanism utilized, either as a nonagency insurer, captive agency insurer, or independent agency insurer. Nonagency insurers are those who market the automobile insurance policy primarily through the mail. Captive agency insurers are those who market the automobile insurance policy primarily through agents, compensated by salary or commission or both, but who are restricted by contract with the insurer from contracting with other insurers for marketing of automobile insurance. Independent agency insurers are those who market the automobile insurance policy primarily through agents who are not restricted by contract from marketing automobile insurance with other insurers. (b) For purposes of this item, the maximum allowable expense level for each respective category is the weighted average for the past three years for which data is reported of the average expenses by insurer category for the top ten most efficient insurers in that category writing automobile insurance in this State. If there are not ten insurers in any given category, then the expense level is the weighted average for all the insurers in that category. The director or his designee may reward an insurer actually achieving less than the maximum expense level allowable by allowing a higher underwriting profit than would otherwise result. However, this reward may not exceed the difference between the insurer's actual expense level achieved and the maximum level allowable in rates in a given year. (c) The director or his designee may extend the provisions of this item to other lines of property and casualty insurance, by order, after public hearing, when the determination is made that to do so is in the public interest.' (C) In reviewing a rate filing, the department may require the insurer to provide at the insurer's expense all information necessary to evaluate the condition of the company and the reasonableness of the filing according to the criteria enumerated in this section and including statutorily-required notice provisions relative to rate filings. (D) As a result of the enactment of the Automobile Insurance Reform Act of 1989, automobile insurance rates must be decreased on the policy anniversary date of each insured after September 30, 1989, by five percent after elimination of the appropriate amount of the recoupment charge. After the first year following the reductions, an insurer may apply to the director or his designee for a rate adjustment, based on its actual experience, and include consideration of the time value of money. In every filing following the effective date of this section for an increase in automobile insurance rates, every insurer shall include in that filing a rate report under this methodology. Every rate filing, after that time, is effective only after prior approval of the director or his designee, consistent with provisions of Chapter 23 of Title 1.

Section 38-73-470.One dollar of the yearly premium for uninsured motorist coverage must be transferred to the South Carolina Department of Public Safety, payable on a quarterly basis, to provide funds for the costs of enforcing and administering the provisions of Article 3, Chapter 10, Title 56.

Section 38-73-480.An automobile insurance contract sold on the basis of a group plan or contract pursuant to Section 38-77-130 shall have a rate not less than five percent less than the individual rate for which the insurer markets a substantially similar policy.

Section 38-73-490.To secure fair, reasonable, adequate, and nondiscriminatory rates for workers' compensation insurance the director or his designee shall approve the rate for each classification under which workers' compensation insurance is written, which rate and classification must be the same for all insurers. The director or his designee shall, in approving the rates, make use of the experience data which may be available and any other helpful information that may be obtainable. A proceeding under this section is considered a proceeding to fix or alter rates for consumer services in relation to the duties of the Division of Consumer Advocacy.

Section 38-73-495.At any time, the director or his designee may: (1) disapprove a previously approved rate for any classification for workers' compensation insurance upon a finding that the rate for that classification is excessive, inadequate, or unfairly discriminatory; (2) require the division of a particular classification into separate classifications, or the joining of separate classifications into one classification, upon a finding that such action is in the public interest; (3) direct that a particular risk be classified in a particular classification upon a finding that a risk is classified incorrectly; (4) disapprove an experience modification rate for workers' compensation insurance upon a finding that the rate is excessive, inadequate, or unfairly discriminatory.

Section 38-73-500.For the purpose of uniformity and equality the director or his designee shall approve a system of merit rating for use in the writing of workers' compensation insurance. No system of merit rating except the one so approved may be used.

Section 38-73-510.Every workers' compensation insurer, including the parties to any mutual insurance association, must be a member of a nonpartisan rating bureau. The stock and nonstock insurers which are members of the bureau must be represented in the bureau management and on all committees of the bureau. One-half of the members of each committee must be chosen by the stock companies and one-half by the nonstock companies. In a case of a tie vote on any committee the director or his designee shall cast the deciding vote.

Section 38-73-520.Every insurer shall file with the department every manual of classifications, rules, and rates, every rating plan, and every modification of any of the foregoing which it proposes to use. Every filing shall state the proposed effective date thereof and shall indicate the character and extent of the coverage contemplated.

Section 38-73-530.The director or his designee may, upon the filing with him of an affidavit setting forth information required by him, grant permission to a licensed insurer to make a rate competing with any nonlicensed insurer in any specific risk.

Section 38-73-540.(A)Agreements may be made among insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but who are unable to procure, insurance through ordinary methods, and the insurers may agree among themselves on the use of reasonable rate modifications for this insurance. These agreements and rate modifications are subject to the approval of the director or his designee. However, regardless of any provision of this section or this article to the contrary, assigned risk pools shall accept a policy of workers' compensation insurance on the basis that it provides coverage to a vendor who provides logging services to a named insured or on the basis that the policy provides coverage to an association of these vendors. (B)(1)Notwithstanding the provisions of subsection (A), no insurer may act as a servicing carrier for any assigned risk pool for workers' compensation insurance authorized pursuant to subsection (A) unless such insurer participates in the voluntary market for workers' compensation insurance in this State. (2) The provisions of this subsection (B) do not apply to servicing carrier contracts entered into before the effective date of this subsection (B). No servicing carrier contract in existence on the effective date of this subsection (B) may be renewed unless there is compliance with part (1) of this subsection.

Article 7

State Rating and Statistical Division

Section 38-73-710.There is established within the department a State Rating and Statistical Division which is under the administrative direction of the Director of the Department of Insurance. Nothing precludes the appointment by the director of a deputy director of any person who is now or may hereafter be an employee of the department, in addition to or substitution for his other duties or responsibilities.

Section 38-73-720.The director or his designee may, through order, fix, establish, and promulgate fair and reasonable risk classifications and territories for automobile insurance risks in accordance with the criteria and standards mentioned in Section 38-73-730 and consistent with the purposes of this chapter and Chapter 77 of this title. The classification plan when utilized by insurers of automobile insurance must be introduced actuarially on-balance so that no increase in income level is produced by the filed classification plans. Decreases for income levels are encouraged. The classification plan must be consistent with the classification plans approved for use on a countrywide basis by the rating organization having the largest number of members or subscribers in South Carolina. In addition, the director or his designee shall not permit within the revised risk classification plan a distinction in bodily injury liability premiums charged or property damage liability premiums charged because of the type of private passenger automobile insured.

Section 38-73-730.No distinctions are permitted nor may be made between policyholders or applicants for automobile insurance as respects coverages, policy terms, rates, premium payment arrangements, claim services, or other services provided by the insurer directly or through its agents or employees except as the distinctions are relevant to and reflected in insurers' rating classifications under risk and territorial classification plans promulgated by the department. No risk classification plan may be promulgated unless the criteria used for classifying risks are objective, clear, and unequivocal and based upon factually or statistically supported data, nor unless the classifications in the rating plan are calculated to render possible the compilation of credible statistical data both for purposes of determining premiums and losses and for comparing the relative relationships between the loss or expense experience or both of the respective classes. The legislative intent is to make it possible for the director or his designee to determine the total profit or loss and expense operating results of the entire line of automobile insurance and each component thereof and of each automobile insurer transacting insurance within the line and each component and to make price comparisons between the rates and premium charges of the various insurers. It is further the policy of this chapter to render possible the evaluation by the director or his designee of the performance of the total insurance market and to enable him thereby to assist automobile insurance consumers in making appropriate consumer decisions.

Section 38-73-735.In addition to risk and territorial classification plans promulgated or approved under Section 38-73-730, the department may promulgate plans to afford credits or discounts to automobile insureds, or he may approve the credit or discount plans filed with him by insurers of automobile insurance. No automobile insurance credit or discount plan may be promulgated or approved by the director or his designee unless: (1) the criteria for determining eligibility for credits or discounts under the plan are objective, clear, and unequivocal; (2) the criteria are based upon factually or statistically supported data; and (3) the credits or discounts provided under the plan will be afforded by the insurer on a nondiscriminatory basis to all insureds who are eligible therefor. If an insurance credit or discount plan is given to an insured pursuant to this section, the policy may be ceded to the Reinsurance Facility in accordance with the facility's plan of operation.

Section 38-73-740.All information, including investigative and credit reports used in determining the classification or premium rates of any person applying for automobile insurance, must be kept on file by the insurer for at least three years from the date the application was made. Upon request of the applicant, the contents of the file must be made available for inspection by the applicant and copies of the documents must be furnished the applicant if he pays the cost of reproducing the copies.

Section 38-73-750.Automobile insurers shall file with the State Rating and Statistical Division their plans or systems for allocating expenses and profit as respects the various kinds or types of automobile insurance risks and the classes of risks thereunder. However, no plan or system may be filed which is inconsistent with the classification of risks promulgated by the department. No plan or system may be filed or approved if the purpose or effect is to discriminate unfairly or unreasonably in respect to the allocation of expenses or profit between classes of risks or if the purpose or effect is to impose a burden or detriment upon the South Carolina Reinsurance Facility or to secure to the insurer using the plan or system an unfair or unreasonable competitive advantage to the detriment of the South Carolina Reinsurance Facility or other insurers. The director or his designee after due notice and hearing, shall disapprove and disallow the further use of an inconsistent, discriminatory, burdensome, or competitively unfair plan or system for the allocation of expenses and profit.

Section 38-73-760.(a)The director or his designee, through the State Rating and Statistical Division, shall fix, establish, and promulgate any uniform statistical plan that may be necessary or appropriate for the gathering and compilation of statistical data from insurers, rating organizations, or advisory organizations transacting or otherwise engaged in the automobile insurance business in the state. In promulgating any uniform statistical plan consideration may be given to the extent reasonable or practicable to the rules and forms of the plans used for rating systems in other states. Upon the promulgation of any statistical plan for automobile insurance in this State, the same must be adopted and used by every automobile insurer in this State and every automobile insurer shall constitute the State Rating and Statistical Division its statistical agent for automobile insurance in this State. (b) The statistical plan may be promulgated so as to provide for any and all statistical and financial data necessary or appropriate to the implementation of the policy of this chapter or Chapter 77 of this title or to yield statistical data reasonably and fairly related to any of the purposes of this article, including, but not limited to, the fixing, establishing, and promulgating of risk and territorial classification plans for automobile insurance; determining the pure loss rate level indications for automobile insurance in South Carolina based upon all South Carolina loss experience and assisting in the translating of this information into usable form for insurance consumers in terms of the final rates or premium charges of each insurer of automobile insurance, determining the reasonability of loss adjustment expenses, other expenses and profit factors applied by insurers to their pure loss components in arriving at their final rates or premium charges for automobile insurance both for purposes of ensuring that the final rates or premium charges are adequate, not excessive, and not unfairly discriminatory and for ensuring that improper and undue burdens are not imposed upon the South Carolina Reinsurance Facility by way of excessive ceding commissions to ceding insurers; determining the amount, validity, and propriety of class and territorial differentials applied to the general pure loss rate levels and testing not less than annually the appropriateness of the existing differentials in the light of the most recent available loss experience data; determining the amount, validity, and propriety of surcharges and discounts referable to any uniform merit rating plan or system which may have been promulgated by the department or which may be under consideration for promulgation, the appropriateness of the surcharges and discounts in the light of the most recent available loss experience data; determining the propriety or validity of any plan for the classification of risks which may be in effect or under consideration based upon the propensities of motor vehicles or classes or types of motor vehicles or their equipment to shield occupants from death or serious injury as a result of crash or based upon the relative invulnerability of the motor vehicles or classes or types of motor vehicles to extensive damage as a result of crash or their repairability at modest expense; or obtaining data relevant to studies being made or to be made by the State Rating and Statistical Division in connection with any of the foregoing or in connection with means and methods for providing appropriate rates for insurance consumers or fostering and encouraging competition among insurers. (c) The functions and responsibilities of the State Rating and Statistical Division acting as statistical agent for automobile insurers may not be delegated, except that the director may, as the result of competitive bidding, make an agreement with some suitable person, firm, corporation, or other organization for the gathering, compilation, recordation, or computerization of the statistical data. However, these functions are always subject to the supervision, direction, and control of the director and the examination and oversight of insurers in respect to their obligations to furnish statistical data to him remain the direct responsibility of the director or his designee and may never be delegated other than to the State Rating and Statistical Division. (d) Any merit rating plan or system promulgated by the department pursuant to the authority contained in subsection (b) likewise extends to and includes automobile collision insurance. However, nothing contained in this subsection (d) requires that the same percentage or dollar amounts for discounts or surcharges apply to collision coverage nor does it require that surcharges already assessed in respect to the liability coverages of the policy again be assessed in respect to the collision coverage afforded by the same policy. (e) The director or his designee shall require all insurers transacting automobile insurance business in this State to assess surcharges and grant safe driver discounts of no less than twenty percent. (f) All policies of automobile insurance issued in South Carolina must show on the initial policy or on an attachment to the initial policy and on all premium invoices or attached to all premium invoices, in a form to be approved by the director or his designee, the amount of any surcharge (including loss of safe driver discount) that may be applicable to the policy as a result of any merit rating plan or system promulgated by the department. Also to be included, presented in a fashion that is readily understandable, is the reason for the applicable surcharge or the loss of safe driver discount. The amount of the applicable safe driver discount also must be shown.

Section 38-73-770.Every classification plan promulgated by the department must be so structured as to produce rates or premium charges which are adequate, not excessive, and not unfairly discriminatory.

Article 9

Rates and Rate Making and Rate Filing Generally

Section 38-73-910.No increase in the premium rates may be granted for automobile, workers' compensation, fire, allied lines, and homeowners insurance, nor for any other line or type of insurance with respect to which the director or his designee has, by order, made a finding that (a) legal or other compulsion upon the part of the insured to purchase the insurance interferes with competition, or (b) under prevailing circumstances there does not exist substantial competition, unless notice is given in all newspapers of general, statewide circulation at least thirty days in advance of any hearing to consider the increase in premium rates. The notice shall state the time and place of the hearing and the rates that will be considered to be increased. However, the requirements of public notices and public hearings in this section do not apply to applications for rate increases when the applicant insurer had earned premiums in this State in the previous calendar year of less than five hundred thousand dollars for the line or type of insurance for which the rate increase is sought or, if the rate increase is sought by a rating organization, the earned premiums in this State for all members and subscribers of the organization for whom an increase is sought were less than five hundred thousand dollars for the previous calendar year for the line or type of insurance for which the rate increase is sought.

Section 38-73-915.(A)The director or his designee in reviewing rate filings may take into consideration recently passed legislation or recently rendered court decisions which will have an effect on insurance rates. The director or his designee may use such information to reduce or increase the rate level of the insurer or the rating organization. (B) The director or his designee may order an insurer or rating organization to reduce or increase its current rate levels as a result of recently passed legislation or recently rendered court decisions. The director or his designee shall give the insurer or rating organization and the Consumer Advocate thirty days notice of his intention to order a reduction or increase in an insurer's or rating organization's rate level. The insurer or rating organization or the Consumer Advocate may request a hearing before the director or his designee under the Administrative Procedures Act to contest the proposed order. The Consumer Advocate may participate as a party in any such hearings.

Section 38-73-920.No insurer may make or issue a contract or policy except in accordance with the filings which are in effect for the insurer as provided in this chapter or in accordance with Section 38-73-1060. Notwithstanding Section 38-73-10, item (2) of Section 38-73-330, and item (4) of Section 38-73-430, filings for property and casualty rate increases may not be approved for any insurer or rating organization for any line, sub-line, or otherwise identifiable property and casualty insurance coverage for which a rate increase has previously been granted within the immediately preceding twelve months. However, if satisfactory evidence is presented to the director or his designee by an insurer or rating organization that the continued use of the previously approved rates for the line, sub-line, or otherwise identifiable property and casualty insurance coverage may result in the insolvency of an insurer, more frequent rate increases may be approved. This section does not apply to contracts or policies for inland marine risks as to which filings are not required.

Section 38-73-930.The department shall, when it is considered appropriate, issue by regulation specific mandatory guidelines and formats for filing with the department so as to promote uniformity and consistency and facilitate meaningful comparisons. Any guidelines and formats issued shall include requirements for detailed breakdowns on the total expense component of any filing.

Section 38-73-935.No rate filing for private passenger automobile insurance may include or be based upon actual or projected loss or expense data which includes payments made on policies, wherein the amount of the settlement, judgment, or other payment by the insurer was in excess of the policy limits, exclusive of interest and costs. No rate filing for private passenger automobile insurance may include or be based upon actual or projected loss or expense data which includes payments made as a result of the insurer's tortious breach of it's duty of good faith and fair dealing.

Section 38-73-940.The information furnished in support of a filing under Sections 38-73-340 or 38-73-520 may include: (1) the experience or judgment of the insurer or rating organization making the filing; (2) its interpretation of any statistical data it relies upon; (3) the experience of other insurers or rating organizations; and (4) any other relevant factors. A filing and any supporting information are open to public inspection after the filing becomes effective.

Section 38-73-950. When a filing is not accompanied by the information upon which the insurer supports the filing and the director or his designee does not have sufficient information to determine whether the filing meets the requirements of this chapter, he shall require the insurer to furnish the information upon which it supports the filing, and in this event the waiting period commences as of the date the information is furnished.

Section 38-73-960. The director or his designee shall review filings as soon as reasonably possible after they have been made in order to determine whether they meet the requirements of this chapter. Subject to the exceptions specified in Sections 38-73-970 and 38-73-980, each filing must be on file for a waiting period of sixty days before it becomes effective. This period may be extended by the director or his designee for an additional period not to exceed sixty days if he gives written notice within the waiting period to the insurer or rating organization which made the filing that he needs additional time for the consideration of the filing. Upon written application by the insurer or rating organization, the director or his designee may authorize a filing which he has reviewed to become effective before the expiration of the waiting period or any extension thereof. A filing meets the requirements of this chapter unless disapproved by the director or his designee within the waiting period or any extension thereof.

Section 38-73-970. Specific inland marine rates on risks specially rated by a rating organization become effective when filed and are considered to meet the requirements of this chapter until the time the director or his designee reviews the filing and so long thereafter as the filing remains in effect.

Section 38-73-980. Any special filing with respect to a surety or guaranty bond required by law, or by court or executive order, or by order or regulation of a public body, not covered by a previous filing, becomes effective when filed and is considered to meet the requirements of this chapter until the time the director or his designee reviews the filing and so long thereafter as the filing remains in effect.

Section 38-73-990. If within the waiting period or any extension thereof as provided in Section 38-73-960 the director or his designee finds that a filing or a part of a filing does not meet the requirements of this chapter, he shall send to the insurer or rating organization which made the filing written notice of disapproval of the filing or part of a filing specifying therein in what respects he finds the filing or part thereof fails to meet the requirements of this chapter and stating that the filing or the part may not become effective.

Section 38-73-1000. If, within thirty days after a specific inland marine rate on a risk specially rated by a rating organization subject to Section 38-73-970 has become effective, the director or his designee finds that the filing does not meet the requirements of this chapter, he shall send to the rating organization which made the filing written notice of disapproval of the filing specifying therein in what respects he finds that the filing fails to meet the requirements of this chapter and stating when, within a reasonable period thereafter, the filing is no longer effective. This disapproval does not affect any contract made or issued prior to the expiration of the period set forth in the notice.

Section 38-73-1010. If, within thirty days after a special surety or guaranty filing subject to Section 38-73-980 has become effective, the director or his designee finds that the filing does not meet the requirements of this chapter, he shall send to the insurer or rating organization which made the filing written notice of disapproval of the filing specifying therein in what respects he finds that the filing fails to meet the requirements of this chapter and stating when, within a reasonable period thereafter, the filing is considered no longer effective. This disapproval does not affect any contract made or issued prior to the expiration of the period set forth in the notice.

Section 38-73-1020. If at any time after the applicable review period provided for in Sections 38-73-990 to 38-73-1010 the director or his designee finds that a filing does not meet the requirements of this chapter, he shall, after a hearing held upon not less than thirty days' written notice to every insurer and rating organization which made the filing, specifying the matters to be considered at the hearing, issue an order specifying in what respects he finds that the filing fails to meet the requirements of this chapter and stating when, within a reasonable period thereafter, the filing is considered no longer effective. Copies of the order must be sent to every insurer and rating organization which made the filing. The order does not affect any contract or policy made or issued prior to the expiration of the period set forth in the order.

Section 38-73-1030. Any person or organization aggrieved with respect to any filing which is in effect may make written application to the director or his designee for a hearing thereon, except that the insurer or rating organization that made the filing may not proceed under this section. The application shall specify the grounds to be relied upon by the applicant. If, within thirty days after receipt of the application, the director or his designee finds that the application is made in good faith, that the applicant would be so aggrieved if his grounds are established, and that the grounds otherwise justify holding a hearing, he shall hold a hearing upon not less than thirty days' written notice to the applicant and to every insurer and rating organization which made the filing. If, after the hearing, the director or his designee finds that the filing does not meet the requirements of this chapter, he shall issue an order specifying in what respects he finds that the filing fails to meet the requirements of this chapter and stating when, within a reasonable period thereafter, the filing is considered no longer effective. Copies of the order must be sent to the applicant and to every insurer and rating organization which made the filing. The order does not affect any contract or policy made or issued prior to the expiration of the period set forth in the order.

Section 38-73-1040. No manual, minimum, or class rate, rating schedule, rating plan, or rating rule of or with respect to fire and allied lines or inland marine insurance, or any modification of the foregoing, which has been filed pursuant to the requirements of Section 38-73-340 may be disapproved if the rates thereby produced meet the requirements of this chapter.

Section 38-73-1050. No manual of classifications, rules, rating plans, or any modification of any of the foregoing for casualty insurance or automobile insurance which establishes standards for measuring variations in hazards or expense provisions, or both, and which has been filed pursuant to the requirements of Section 38-73-520 may be disapproved if the rates thereby produced meet the requirements of this chapter.

Section 38-73-1060. Upon the written application of the insured, stating his reasons therefor, filed with the Department and approved by the director or his designee, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risk.

Section 38-73-1070. Under regulations the department promulgates, the director or his designee may, by written order, suspend or modify the requirements of filing as to any kind of insurance, subdivision, or combination thereof or as to classes of risks, the rates for which cannot practicably be filed before they are used. These orders and regulations must be made known to insurers and rating organizations affected thereby. The director or his designee may make any examination he considers advisable to ascertain whether any rates affected by the order meet the standards set forth in item (2) of Section 38-73-330 or item (4) of Section 38-73-430, as the case may be.

Section 38-73-1080. Every rating organization and every insurer which makes its own rates shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by it or to the authorized representative of the insured all pertinent information as to the rate. Every rating organization and every insurer which makes its own rates shall provide within this State reasonable means whereby any person aggrieved by the application of its rating system may be heard, in person or by his authorized representative, on his written request to review the manner in which the rating system has been applied in connection with the insurance afforded him. If the rating organization or insurer fails to grant or reject the request within thirty days after it is made, the applicant may proceed in the same manner as if his application had been rejected. Any party affected by the action of the rating organization or the insurer on the request may, within thirty days after written notice of the action, appeal to the director or his designee, who, after a hearing held upon not less than thirty days' written notice to the appellant and to the rating organization or insurer, may affirm or reverse the action.

Section 38-73-1085. The director or his designee shall no less than annually cause to have published and make available a representative sample of the private passenger premiums being charged by at least the twenty insurance companies having the largest market share in each territory to facilitate price comparisons by insureds and prospective insureds who are seeking new coverage.

Section 38-73-1090. The director or his designee, upon his own motion, or upon written complaint, has the power in the first instance to determine whether or not any rate fixed by any individual, bureau, or insurer is unfairly discriminatory. If he concludes, after careful and diligent inquiry and a full hearing and investigation, that there is unfair discrimination, he shall order the discrimination removed and require the individual rate maker, bureau, or insurer to promulgate a rate which is not unfairly discriminatory.

Section 38-73-1100. If at any time it appears to the director or his designee that rates charged for property, casualty, surety, marine, title, or allied lines of insurance in this State are excessive or unreasonable, in that the results of the business of the insurer in this State during the five years immediately preceding the year in which the investigation is made, as indicated by the insurer's annual statements and any supplements to them, show an aggregate operating profit in excess of a reasonable amount, then the director or his designee may order a general reduction in rates which will reduce the operating profit to a reasonable amount. Any reduction ordered by the director or his designee must be applied to the class or classes of risks as the insurer or rating bureau may elect, and they may not be compelled to reduce rates on classes which have not produced a reasonable operating profit for the five-year period. In addition to ordering a general reduction in rates, the director or his designee may also order a pro rata refund of any excessive or unreasonable profits found to have been realized by the insurer, together with interest. The director or his designee shall determine the rate of interest which must be the insurer's average rate of return for the five-year period. Any refund which is ordered must be equitably apportioned among the policyholders entitled to it, and may be given either in the form of a cash refund or as a credit toward future premiums or a combination of these two methods. In determining the question of a reasonable operating profit under this section, the director or his designee as a protection to policyholders shall give proper and reasonable consideration to conflagration liabilities, both within and without this State.

Section 38-73-1105. The definition of `underinsured motor vehicle' contained in item (14) of Section 38-77-30 may not be used by an insurer unless the insurer reduces his rate for underinsured motorist coverage by an amount determined appropriate by the director or his designee and refunds any such premium that the director or his designee determines is necessary to correspond with the new definition. An insurer may not use the definition in its settlement negotiations unless the insurer has filed and the director or his designee has approved an endorsement to its contract. If an insurer uses the new definition in its negotiations with a person before having the contract endorsed it is an unfair claims practice and, in addition, is bad faith entitling the injured person to reasonable attorney fees, punitive damages, and all actual damages.

Section 38-73-1110. In order to assure fair implementation of Section 38-73-1100, the department shall promulgate a regulation concerning the calculation and refunding of excess profits. The regulation shall include consideration of: (1) the total operating profits of each insurer in this State for the lines of insurance enumerated in Section 38-73-1100; (2) the margin by which any insurer's operating results differ from the insurance industry's total results; (3) the amount of excessive profits earned after the effective date of the refund provision of Section 38-73-1100; (4) the insurers that operate in this State as affiliates of a group; and (5) the development period used to determine if unpaid losses are fairly estimated.

Section 38-73-1120. (A) No automobile insurer or representative of any automobile insurer may wilfully include in a private passenger automobile insurance rate filing any expense or loss which was generated in whole or part by either another line of insurance or general expenses or overhead applicable to all lines, unless the insurer has allocated properly the expense or loss among all its lines of insurance. The insurer's compliance with generally accepted accounting and actuarial principles constitutes a complete defense to an action brought under this section. No insurer may adopt a different method or usage of allocating or treating expenses or losses for purposes of rate filings in South Carolina from that which it uses in other states for similar lines of insurance, unless different treatment is required by statute or regulation. (B) The director or his designee, at least once every four years, shall make or cause to be made, for each insurer which writes more than one percent of the private passenger market in South Carolina, an examination of each insurer's books, records, and accounts to ensure that the expenses are being allocated or treated properly. In lieu of an independent examination, the director or his designee may request a sworn affidavit from the insurer's controller, accountant, or actuary that the companies' expenses are being allocated and treated properly and that private passenger automobile insureds are not being charged an inequitable or unfair share of the insurer's expenses, acquisition costs, overhead, or other expenses. The director or his designee shall survey for the companies at appropriate intervals a comparison of the acquisition cost of private passenger business in South Carolina versus other similar states in which the companies do business. (C) An insurer violating the provisions of this section is subject to a civil penalty of not less than twenty-five thousand dollars. A person who violates the provisions of this section is guilty of a felony and, upon conviction, must be imprisoned for not more than ten years or fined not less than ten thousand dollars, or both.

Article 11 Rating Organizations

Section 38-73-1210. An insurer may satisfy its obligation to make required filings by becoming a member of, or a subscriber to, a licensed rating organization which makes filings and by authorizing the director or his designee to accept the filings on its behalf. However, notwithstanding any other provisions of this article, no member or subscriber may, within twelve months after its membership or subscribership, adopt any rate approved for use for the rating organization, if the rate is more than the rate in use by the member or subscriber prior to its membership or subscribership in the rating organization. Further, notwithstanding the provisions of Sections 38-73-1300, 38-73-1310, and 38-73-1320, no member or subscriber within twelve months after its membership or subscribership, may be granted an upward deviation from its rate in use when becoming a member or subscriber. However, if a rate increase for the rating organization is approved within twelve months after an insurer becomes a member or subscriber, the member or subscriber may increase its rates by the same percentage of increase granted the rating organization. Nothing contained in this chapter may be construed as requiring any insurer to become a member of or a subscriber to any rating organization.

Section 38-73-1220. A corporation, an unincorporated association, a partnership, or an individual, whether located within or outside this State, may make application to the director or his designee for a license as a rating organization for the kinds of insurance or subdivisions thereof or, in the case of insurance to which Article 3 of this chapter is applicable, classes of risk or parts or combinations thereof as are specified in its application and shall file therewith: (1) A copy of its constitution, its articles of agreement or association or certificate of incorporation, and its bylaws, rules, and regulations governing the conduct of its business. (2) A list of its members and subscribers. (3) The name and address of a resident of this State upon whom notices or orders of the director or his designee or process affecting the rating organization may be served. (4) A statement of its qualification as a rating organization.

Section 38-73-1230. If the director or his designee finds that the applicant is competent, trustworthy, and otherwise qualified to act as a rating organization and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules, and regulations governing the conduct of its business conform to the requirements of law, he shall issue a license specifying the kinds of insurance or subdivision or class of risk or part or combination thereof for which the applicant is authorized to act as a rating organization. Every application must be granted or denied in whole or in part by the director or his designee within sixty days of the date of its filing with him. Licenses issued pursuant to this section remain in effect for an indefinite term unless sooner suspended or revoked by the director or his designee. The fee for the license is two hundred dollars owed and payable annually by March first.

Section 38-73-1240. Licenses issued pursuant to Section 38-73-1230 may be suspended or revoked by the director or his designee, after hearing upon notice, in the event the rating organization ceases to meet the requirements of this article.

Section 38-73-1250. Every rating organization shall notify the director or his designee promptly of every change in: (1) Its constitution, its articles of agreement or association or certificate of incorporation, or its bylaws, rules, and regulations governing the conduct of its business. (2) Its lists of members and subscribers. (3) The name and address of the resident of this State designated by it upon whom notices or orders of the director or his designee or process affecting the rating organization may be served.

Section 38-73-1260. Subject to rules and regulations which have been approved by the department as reasonable, each rating organization shall permit any insurer, not a member, to be a subscriber to its rating services for any kind of insurance, subdivision, or class of risk or part or combination thereof for which it is authorized to act as a rating organization. If the rating organization refuses to admit an insurer as a subscriber or fails to grant or reject an insurer's application for subscribership within thirty days after it was made, the insurer may request a review by the director or his designee. Upon review the failure to act must be treated as a rejection of the application. If the director or his designee finds at a hearing, held upon at least thirty days' written notice to the rating organization, that the insurer has been refused admittance to the rating organization as a subscriber without justification, he shall order the rating organization to admit the insurer as a subscriber. If he finds that the action of the rating organization was justified, the director or his designee shall make an order affirming its action. Each rating organization shall furnish its rating services without discrimination to its members and subscribers.

Section 38-73-1270. Notice of proposed changes in the rules and regulations referred to in Section 38-73-1260 must be given to subscribers. The reasonableness of any rule or regulation in its application to subscribers must, at the request of any subscriber or any insurer, be reviewed by the director or his designee at a hearing held upon at least thirty days' written notice to the rating organization and to the subscriber or insurer. If the director or his designee finds that the rule or regulation is unreasonable in its application to subscribers, he shall order that the rule or regulation is not applicable to subscribers.

Section 38-73-1280. No rating organization may adopt any rule the effect of which would be to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers.

Section 38-73-1290. Every member of or subscriber to a rating organization shall adhere to the filings made on its behalf by the organization, except as provided in Sections 38-73-1300 and 38-73-1310.

Section 38-73-1300. Any member of or subscriber to a rating organization to whom the provisions of Article 3 of this chapter are applicable may make written application to the director or his designee for permission to file a deviation from the class rates, schedules, rating plans, or rules respecting any kind of insurance or class of risk within a kind of insurance or any combination thereof. The application shall specify the basis for the modification. A copy of the application must be sent simultaneously to the rating organization.

Section 38-73-1310. Any member of or subscriber to a rating organization to whom the provisions of Article 5 of this chapter are applicable may make written application to the department for permission to file a uniform percentage decrease or increase to be applied to the premiums produced by the rating system so filed for a kind of insurance or for a class of insurance which is found by the director or his designee to be a proper rating unit for the application of such uniform percentage decrease or increase or for a subdivision of a kind of insurance (a) comprised of a group of manual classifications which is treated as a separate unit for rate-making purposes or (b) for which separate expense provisions are included in the filings of the rating organization. The application shall specify the basis for the modification and must be accompanied by the data upon which the applicant relies. A copy of the application and data must be sent simultaneously to the rating organization.

Section 38-73-1320. Upon the filing of an application under either Section 38-73-1300 or 38-73-1310 the director or his designee shall set a time and place for a hearing at which the insurer and the rating organization may be heard and shall give them not less than thirty days' written notice thereof. In the event the director or his designee is advised by the rating organization that it does not desire a hearing he may, upon the consent of the applicant, waive the hearing. In considering an application under Section 38-73-1300 for permission to file a deviation the director or his designee shall give consideration to the available statistics and the principles for rate making as provided in Section 38-73-330. The director or his designee shall issue an order permitting the deviation or modification for the insurer to be filed if he finds it to be justified. Upon issuance of the order the deviation or modification becomes effective. The director or his designee shall issue an order denying the application if he finds that the resulting premiums would be excessive, inadequate, or unfairly discriminatory or, in the case of an application filed under Section 38-73-1310, if he finds the modification requested is not justified. Each deviation permitted to be filed, which, when approved, would result in a uniform percentage decrease, remains effective until disapproved by the director or his designee. Each deviation permitted to be filed, which, when approved, would result in a uniform percentage increase, is effective for a period of one year from the date of the permission unless terminated sooner with the approval of the director or his designee.

Section 38-73-1330. Any rating organization acting for insurers to whom the provisions of Article 3 of this chapter are applicable may provide with respect to such insurers for the examination of policies, daily reports, binders, renewal certificates, endorsements, or other evidences of insurance, or the cancellation thereof, and may make reasonable rules governing their submission. The rules shall contain a provision that, in the event an insurer does not within sixty days furnish satisfactory evidence to the rating organization of the correction of any error or omission previously called to its attention by the rating organization, the rating organization shall notify the director or his designee thereof. All information so submitted for examination is confidential.

Section 38-73-1340. Any member of or subscriber to a rating organization may appeal to the Administrative Law Judge Division from the action or decision of the rating organization in approving or rejecting any proposed change in or addition to the filings of the rating organization. The Administrative Law Judge Division shall, after a hearing held before it upon not less than thirty days' written notice to the appellant and to the rating organization, issue an order approving the action or decision of the rating organization or directing it to give further consideration to the proposal, or, if the appeal is from the action or decision of the rating organization in rejecting a proposed addition to its filings, Administrative Law Judge Division may, in the event it finds that the action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings on behalf of its members and subscribers in a manner consistent with its findings, within a reasonable time after the issuance of the order. If the appeal in the case of an insurer to whom the provisions of Article 5 of this chapter are applicable is based upon the failure of the rating organization to make a filing on behalf of the member or subscriber which is based on a system of expense provisions which differs, in accordance with the right granted in item (2) of Section 38-73-430, from the system of expense provisions included in a filing made by the rating organization, the Administrative Law Judge Division shall, if it grants the appeal, order the rating organization to make the requested filing for use by the appellant. In deciding the appeal the Administrative Law Judge Division shall apply the standards set forth in Section 38-73-430. The actual cost to the Administrative Law Judge Division, and the Department of Insurance provided it participates in the hearing, in connection with the appeal may be charged by the Administrative Law Judge Division to the parties making the appeal in any proportion he considers proper and must be immediately paid by the respective parties.

Section 38-73-1350. Notwithstanding the provisions of Sections 38-73-1370, 38-73-1380, 38-73-1400, 38-73-1410, 38-73-1420, and 38-73-1430, after public hearing the director or his designee may prohibit cooperation among or within property/casualty rating or advisory organizations by insurers or among or within these rating or advisory organizations and insurers in rate making or in other matters within the scope of this chapter, except to the extent that these organizations may compile and disseminate only historic loss data with no mathematical trending or analytical methodologies, upon a finding by the director or his designee that the anti-competitive effects of this cooperation outweigh practical constraints of prohibitions. All property/casualty filings are subject to prior approval by the director or his designee. The provisions of Title 1, Chapter 23 (Administrative Procedures Act) apply to all property/casualty rate filings.

Section 38-73-1360. Any rating organization serving insurers to which the provisions of Article 3 of this chapter apply may subscribe for or purchase actuarial, technical, or other services and these services must be available to all insurers who are members and subscribers of the organization without discrimination.

Section 38-73-1370. After June 30, 1989, no rating organization may file a rate increase with the department for any previously approved final rate or premium charge for any private passenger automobile insurance coverage. A rating organization may file the pure loss component of the rate or premium charge for any private passenger automobile insurance coverage, by class and territory, for the approval of the director or his designee. After a public hearing, the director or his designee may approve the pure loss component of the rate or premium charge for use by the members or subscribers of the rating organization. No member or subscriber may use the approved pure loss component of the rate or premium charge unless and until the expense component of the rate or premium charge has also been filed with the department and approved by the director or his designee pursuant to Section 38-73-1380.

Section 38-73-1380. After June 30, 1989, no member or subscriber of a rating organization may utilize a rate or premium charge for any private passenger automobile insurance coverage unless and until the final rate or premium charge has been filed with the Division and approved by the director or his designee. After the effective date of this section, the final rate or premium charge is the pure loss component filed and approved by a rating organization on behalf of its members or subscribers added to the expense component of the rate or premium charge, filed with the department and approved by the director or his designee, by each member or subscriber of a rating organization independently. No expense component filed by a member or subscriber of a rating organization may be approved by the director or his designee unless it has been the subject of a public hearing, if that member's or subscriber's total written private passenger automobile insurance premium during the previous calendar year equaled or exceeded one percent of the total written private passenger automobile insurance premium in this State during the previous calendar year. For other lines of insurance the requirements of this section are not activated unless the members' or subscribers' total written premium during the previous calendar year equaled or exceeded three percent of the total written insurance premium for that specific line of insurance in this State during the previous calendar year.

Section 38-73-1400. (1) After June 30, 1989, the `pure loss component' of the final rate or premium charge for private passenger automobile insurance is that portion of the final rate or premium charge applicable to calendar/accident year incurred losses (the sum of paid losses plus loss reserves including incurred but not reported loss reserves) and loss adjustment expense (those expenses directly related to the payment of claims) in this State, trended to include both the past and prospective loss experience. If the insurer writes one percent or more of the written premium for automobile insurance during the previous calendar year, that insurer must file its own trending methodology as independently derived. (2) The `expense component' of the final rate or premium charge for private passenger automobile insurance is that portion of the final rate or premium charge applicable to production costs (including commissions and other acquisition expenses), underwriting costs, administrative costs (including the actual costs of taxes, licenses and fees), and profit margin in this State. (3) The `final rate or premium charge' is the approved pure loss component added to the approved expense component. In the determination of whether the pure loss component should be approved and in the determination of whether the expense component should be approved, neither may be inadequate, excessive, nor unfairly discriminatory and the director or his designee shall take into account investment income from unearned premium and loss reserves, surplus and realized capital gains.

Section 38-73-1410. After June 30, 1989, upon the effective date of this section, nothing herein should be construed to require a rating organization or its members or subscribers to immediately refile final rates or premium charges previously approved by the director or his designee for private passenger automobile insurance coverages. Members or subscribers of a rating organization are authorized to continue to use automobile insurance rates or premium charges, approved before the effective date of this section, or decreases from those rates or premium charges filed by ]the rating organization and, subsequently, approved after the effective date of this section.

Section 38-73-1420. After June 30, 1989, the Board of Governors of the South Carolina Reinsurance Facility shall file an expense component for private passenger automobile insurance rate or premium charges after the rating organization with the largest number of members or subscribers has filed a pure loss component for private passenger automobile insurance with the director or his designee. Upon the approval of such component by the director or his designee, those automobile insurers designated pursuant to Section 38-77-590(A), for risks written by them through producers designated pursuant to that same section, shall utilize these final rate or premium charges. Automobile insurers designated pursuant to Section 38-77-590(A) are not required to use those same final rates or premium charges for risks written through their agents not appointed pursuant to Section 38-77-590.

Section 38-73-1425. The final rate or premium charge for a private passenger automobile insurance risk ceded to the facility which does not qualify for the safe driver discount in Section 38-73-760(e) is the final rate or premium charge required by Section 38-73-1420 or the final rate or premium charge approved for use by the insurer, whichever is greater.

Section 38-73-1430. After June 30, 1989, the director or his designee may extend the provisions of Sections 38-73-1370, 38-73-1380, 38-73-1400, and 38-73-1410 to other lines of property and casualty insurance, by order, after public hearing, when the determination is made that to do so is in the public interest.

Article 13

Advisory Organizations

Section 38-73-1510. Every group, association, or other organization of insurers, whether located within or outside this State, which assists insurers which make their own filings or rating organizations in rate making by the collection and furnishing of loss or expense statistics or by the submission of recommendations, but which does not make filings under this chapter, is known as an `advisory organization'.

Section 38-73-1520. Every advisory organization shall file with the department: (1) A copy of its constitution, its articles of agreement or association or certificate of incorporation, and its bylaws, rules, and regulations governing its activities. (2) A list of its members. (3) The name and address of a resident of this State upon whom notices or orders of the director or his designee or process issued at his discretion may be served. (4) An agreement that the director or his designee may examine the advisory organization in accordance with the provisions of Section 38-73-90.

Section 38-73-1530. If, after a hearing, the director or his designee finds that the furnishing of information or assistance involves any act or practice which is unfair, unreasonable, or otherwise inconsistent with the provisions of this chapter, he may issue a written order specifying in what respects the act or practice is unfair, unreasonable, or otherwise inconsistent with the provisions of this chapter and requiring the discontinuance of the act or practice.

Section 38-73-1540. No insurer which makes its own filings nor any rating organization may support its filings by statistics or adopt rate-making recommendations furnished to it by an advisory organization which has not complied with this article or with an order of the director or his designee involving statistics or recommendations issued under Section 38-73-1530. If the director or his designee finds an insurer or rating organization to be in violation of this section, he may issue an order requiring the discontinuance of the violation.

Article 15

Joint Underwriting or Joint Reinsurance

Section 38-73-1710. Every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance is subject to regulation with respect thereto as herein provided, subject, however, with respect to joint underwriting, to all other provisions of this chapter, and, with respect to joint reinsurance, to Sections 38-73-90 to 38-73-130.

Section 38-73-1720. If, after a hearing, the director or his designee finds that any activity or practice of any such group, association, or other organization is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, he may issue a written order specifying in what respects the activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter and requiring the discontinuance of the activity or practice."

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