Current Status Introducing Body:House Bill Number:3709 Primary Sponsor:J. Bailey Committee Number:26 Type of Legislation:GB Subject:Workers' compensation, provisions Residing Body:House Current Committee:Labor, Commerce and Industry Companion Bill Number:540 Computer Document Number:BBM/10349JM.93 Introduced Date:19930315 Last History Body:House Last History Date:19930315 Last History Type:Introduced, read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:J. Bailey McElveen Corning Quinn Scott Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
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3709 House 19930315 Introduced, read first time, 26
referred to Committee
View additional legislative information at the LPITS web site.
TO AMEND SECTION 42-1-40, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DEFINITION OF "AVERAGE WEEKLY WAGES" UNDER THE WORKERS' COMPENSATION LAW, SO AS TO DELETE CERTAIN LANGUAGE AND PROVISIONS AND PROVIDE THAT AVERAGE WEEKLY WAGE IS CALCULATED BY TAKING THE TOTAL WAGES PAID FOR THE LAST FOUR QUARTERS IMMEDIATELY PRECEDING THE QUARTER IN WHICH THE INJURY OCCURRED DIVIDED BY FIFTY-TWO OR BY THE ACTUAL NUMBER OF WEEKS FOR WHICH WAGES WERE PAID, WHICHEVER IS LESS; TO AMEND SECTION 42-1-160, RELATING TO THE DEFINITIONS OF "INJURY" AND "PERSONAL INJURY" FOR PURPOSES OF THE WORKERS' COMPENSATION LAW, SO AS TO ADD PROVISIONS RELATING TO WORK-RELATED STRESS; TO AMEND SECTION 42-1-310, RELATING TO THE PRESUMPTION OF ACCEPTANCE OF THE PROVISIONS OF TITLE 42 (WORKERS' COMPENSATION), SO AS TO DELETE CERTAIN LANGUAGE AND TO DEFINE "EMPLOYMENT" AND "IMPROVEMENT OR MODIFICATION OF REAL PROPERTY"; TO AMEND THE 1976 CODE BY ADDING SECTION 42-1-315 SO AS TO PROVIDE THAT OFFICERS OF A CORPORATION ARE EMPLOYEES UNDER TITLE 42 AND MAY REJECT COVERAGE BY GIVING CERTAIN NOTICE; TO AMEND SECTION 42-1-320, RELATING TO THE PROVISION THAT PUBLIC ENTITIES AND THEIR EMPLOYEES CANNOT EXEMPT THEMSELVES FROM TITLE 42 (WORKERS' COMPENSATION), SO AS TO DELETE PROVISIONS AND PROVIDE THAT THE STATE, ITS MUNICIPAL CORPORATIONS AND POLITICAL SUBDIVISIONS THEREOF, AND SUCH EMPLOYEES, ARE SUBJECT TO TITLE 42; TO AMEND SECTION 42-1-330, RELATING TO WAIVER OF EXEMPTION UNDER THE WORKERS' COMPENSATION LAW, SO AS TO, AMONG OTHER THINGS, INCLUDE OFFICER OF A CORPORATION UNDER THE PROVISIONS OF THIS SECTION; TO AMEND THE 1976 CODE BY ADDING SECTION 42-1-335 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT AN EMPLOYER WHO IS EXEMPT FROM TITLE 42 ELECTS TO ADOPT THE TITLE BY OBTAINING WORKERS' COMPENSATION INSURANCE OR BY OPERATING UNDER AN APPROVED SELF-INSURANCE PROGRAM; TO AMEND SECTION 42-1-340, RELATING TO THE EFFECTIVE DATE OF AND THE MANNER OF GIVING NOTICE OF NONACCEPTANCE OR WAIVER WITH RESPECT TO TITLE 42 (WORKERS' COMPENSATION), SO AS TO DELETE CERTAIN LANGUAGE AND TO REFERENCE SECTION 42-1-315; TO AMEND SECTION 42-1-510, RELATING TO DEFENSES WHICH ARE NOT AVAILABLE TO AN EMPLOYER WHO IS NOT UNDER TITLE 42 (WORKERS' COMPENSATION), SO AS TO PROVIDE THAT COMPARATIVE NEGLIGENCE DOES NOT APPLY, AND FURTHER DEFINE "EMPLOYER" FOR PURPOSES OF DEFENDING AN ACTION AT LAW; TO AMEND SECTION 42-1-520, RELATING TO DEFENSES WHICH ARE AVAILABLE TO AN EMPLOYER OPERATING UNDER TITLE 42 (WORKERS' COMPENSATION) WHEN THE EMPLOYEE IS NOT SO OPERATING, SO AS TO DELETE REFERENCES TO "EMPLOYEE" AND SUBSTITUTE THEREFOR "OFFICER OF A CORPORATION"; TO AMEND THE 1976 CODE BY ADDING SECTION 42-3-195 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT THE WORKERS' COMPENSATION COMMISSION SHALL COOPERATE WITH AND PROVIDE INFORMATION AND STATISTICS TO ANY AGENCY OF THE STATE OR OF THE UNITED STATES CHARGED WITH THE DUTY OF ENFORCING ANY LAW SECURING SAFETY AGAINST INJURY IN ANY EMPLOYMENT COVERED BY TITLE 42 OR WITH ANY STATE OR FEDERAL AGENCY ENGAGED IN ENFORCING ANY LAWS TO ASSURE SAFETY FOR EMPLOYEES; TO AMEND SECTION 42-5-40, RELATING TO THE PENALTY FOR FAILURE TO SECURE PAYMENT OF WORKERS' COMPENSATION, SO AS TO DELETE CERTAIN LANGUAGE AND PROVIDE A SEPARATE PENALTY FOR WILFUL OR REPEATED VIOLATIONS; TO AMEND SECTION 42-7-200, AS AMENDED, RELATING TO THE WORKERS' COMPENSATION UNINSURED EMPLOYERS' FUND, SO AS TO PROVIDE THAT THE REMEDY PROVIDED IN THIS SECTION SHALL NOT APPLY UNTIL ALL AVAILABLE ADMINISTRATIVE REMEDIES UNDER TITLE 42 AGAINST ANY INSURED STATUTORY EMPLOYER HAVE BEEN EXHAUSTED; TO AMEND SECTION 42-9-220, RELATING TO THE MANNER IN WHICH WORKERS' COMPENSATION SHALL BE PAID, SO AS TO PROVIDE THAT COMPENSATION MUST BE PAID BY A CHECK AND NOT A DRAFT; TO AMEND SECTION 42-9-360, RELATING TO ASSIGNMENTS OF WORKERS' COMPENSATION AND EXEMPTIONS FROM CLAIMS OF CREDITORS AND TAXES, SO AS TO ADD CERTAIN PROVISIONS, INCLUDING A PROVISION THAT IT SHALL BE UNLAWFUL FOR AN AUTHORIZED HEALTH CARE PROVIDER TO DEMAND OF OR CAUSE A DEMAND TO BE MADE ON A WORKERS' COMPENSATION CLAIMANT PRIOR TO THE FINAL ADJUDICATION OF HIS CLAIM, AND PROVIDE FOR CERTAIN MONETARY PENALTIES TO BE PAID TO THE WORKERS' COMPENSATION CLAIMANT; TO AMEND THE 1976 CODE BY ADDING SECTION 42-9-395 SO AS TO ADD PROVISIONS RELATING TO SETTLEMENT AGREEMENTS PROVIDING FOR STRUCTURED SETTLEMENTS IN WORKERS' COMPENSATION CASES; TO AMEND SECTION 42-17-90, RELATING TO REVIEW OF A WORKERS' COMPENSATION AWARD ON A CHANGE OF CONDITION, SO AS TO PROVIDE FOR THE ENTERING OF AN ORDER RATHER THAN THE MAKING OF AN AWARD, AND ADD CERTAIN PROVISIONS, INCLUDING A PROVISION THAT THE WORKERS' COMPENSATION COMMISSION SHALL PROVIDE BY REGULATION THE METHOD AND PROCEDURE BY WHICH AN AWARD OR ORDER COMMENCING TEMPORARY COMPENSATION AND ENTERED WITHOUT AN EVIDENTIARY HEARING MAY BE SET ASIDE FOR FRAUD; TO AMEND SECTION 42-19-10, AS AMENDED, RELATING TO EMPLOYERS' RECORDS AND REPORTS OF INJURIES UNDER THE WORKERS' COMPENSATION LAW, SO AS TO DELETE THE PROVISIONS OF THE SECTION AND ADD PROVISIONS, INCLUDING A PROVISION DETAILING THE CIRCUMSTANCES UNDER WHICH AN EMPLOYER IS NOT REQUIRED TO MAKE A WRITTEN REPORT; TO AMEND CHAPTER 55 OF TITLE 38, RELATING TO CONDUCT OF INSURANCE BUSINESS, BY ADDING ARTICLE 5 SO AS TO ENACT THE "OMNIBUS INSURANCE FRAUD AND REPORTING IMMUNITY ACT", INCLUDING PROVISIONS FOR, AMONG OTHER THINGS, THE ESTABLISHMENT IN THE OFFICE OF THE ATTORNEY GENERAL OF AN INSURANCE FRAUD DIVISION AND THE CREATION OF A FELONY OFFENSE AND THE PROVISION OF PENALTIES THEREFOR; TO AMEND THE 1976 CODE BY ADDING SECTION 42-9-440 SO AS TO PROVIDE THAT THE WORKERS' COMPENSATION COMMISSION MAY REFER ALL CASES OF SUSPECTED FRAUD TO THE INSURANCE FRAUD DIVISION OF THE OFFICE OF THE ATTORNEY GENERAL FOR INVESTIGATION AND PROSECUTION, IF WARRANTED, PURSUANT TO THE OMNIBUS INSURANCE FRAUD AND REPORTING IMMUNITY ACT; TO AMEND SECTION 16-1-10, AS AMENDED, RELATING TO CRIMES CLASSIFIED AS FELONIES, SO AS TO INCLUDE THE OFFENSE IN SECTION 38-55-540; AND TO REPEAL SECTION 42-1-380, RELATING TO THE WAIVER OF EXEMPTION BY EMPLOYER WITH RESPECT TO THE MANDATORY PROVISIONS OF TITLE 42 (WORKERS' COMPENSATION) AND SECTION 42-1-530, RELATING TO DEFENSES WHICH ARE NOT AVAILABLE TO AN EMPLOYER WHEN NEITHER HE NOR THE EMPLOYEE IS UNDER TITLE 42.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The first paragraph of Section 42-1-40 of the 1976 Code is amended to read:
"`Average weekly wages' means the earnings of the injured employee in the employment in which he was working at the time of the injury during the period of fifty-two weeks immediately preceding the date of the injury, including the subsistence allowance paid to veteran trainees by the United States Government if the amount of such allowance is reported monthly by such trainee to his employer, divided by fifty-two Average weekly wage is calculated by taking the total wages paid for the last four quarters immediately preceding the quarter in which the injury occurred as reported on the Employment Security Commission's Employer Contribution Reports divided by fifty-two or by the actual number of weeks for which wages were paid, whichever is less. If the injured employee lost more than seven consecutive calendar days at one or more times during such period, although not in the same week, then the earnings for the remainder of such fifty-two weeks shall be divided by the number of weeks remaining after the time so lost has been deducted. When the employment prior to the injury extended over a period of less than fifty-two weeks, the method of dividing the earnings during that period by the number of weeks and parts thereof during which the employee earned wages shall be followed, so long as results fair and just to both parties will be obtained. Where, by reason of a shortness of time during which the employee has been in the employment of his employer or the casual nature or terms of his employment, it is impracticable to compute the average weekly wages as defined in this section, regard is to be had to the average weekly amount which during the fifty-two weeks previous to the injury was being earned by a person of the same grade and character employed in the same class of employment in the same locality or community."
SECTION 2. Section 42-1-160 of the 1976 Code is amended by adding:
"Work-related stress unaccompanied by physical injury and resulting in mental illness or injury is not a personal injury unless it is established that the stressful employment conditions causing the mental injury were extraordinary and unusual in comparison to the normal conditions of the employment.
Work-related stress unaccompanied by physical injury is not considered compensable if it results from any event which is incidental to normal employer/employee relations including, but not limited to, personnel actions by the employer such as disciplinary actions, work evaluations, transfers, promotions, demotions, salary reviews, or terminations, except when such actions are taken in an extraordinary and unusual manner."
SECTION 3. Section 42-1-310 of the 1976 Code is amended to read:
"Section 42-1-310. (A) Every employer and employee, except as stated in this chapter, shall be presumed to have accepted the provisions of this title respectively to pay and accept compensation for personal injury or death by accident arising out of and in the course of the employment and shall be bound thereby, unless he shall have given, prior to any accident resulting in injury or death, notice to the contrary in the manner provided in S 42-1-340.
(B) `Employment' subject to the provisions of this title means any service performed by an employee for the person employing him.
(1) Employment includes all employments in which four or more employees are employed by the same employer or, with respect to improvement or modification of real property, all employment in which one or more direct or indirect employees are employed by the same employer.
(2) `Improvement or modification of real property' means for-profit activities involved in the carrying out of any construction, building, renovation, alteration, moving, clearing, filling, excavation, or substantial improvement in the size or use of any structure or the appearance of any land. When appropriate to the context, `improvement or modification of real property' refers to the act of construction or the result of construction. However `improvement or modification of real property' shall not mean a landowner's act of construction or the result of construction upon his own premises, provided such premises are not intended to be sold or resold.
(3) With respect to employment as referenced in subsection (B)(2), the employer shall maintain proof of workers' compensation coverage for its direct and indirect employees. Proof of coverage is a contract of workers' compensation insurance issued to the employer for coverage for the employer's direct and indirect employees."
SECTION 4. The 1976 Code is amended by adding:
"Section 42-1-315. Officers of a corporation are employees under this title and may reject coverage under this title by giving notice as prescribed by the commission."
SECTION 5. Section 42-1-320 of the 1976 Code is amended to read:
"Section 42-1-320. Neither the State nor any municipal corporation, nor any political subdivision thereof, nor any employee of the State or of any such corporation or subdivision may reject the provisions of this Title relative to payment and acceptance of compensation and the provisions of SS 42-1-330, 42-1-340, 42-1-380, 42-1-390 and 42-1-460 to 42-1-530 shall not apply to them. The State, its municipal corporations and political subdivisions thereof, and the employees of the State or its municipal corporations and political subdivisions are subject to this title."
SECTION 6. Section 42-1-330 of the 1976 Code is amended to read:
"Section 42-1-330. Either an An employer or employee officer of a corporation who has exempted himself by proper notice from the operation of this title may at any time waive such exemption and thereby accept the provisions of this title by giving notice as provided in Section 42-1-340 prescribed by the commission."
SECTION 7. The 1976 Code is amended by adding:
"Section 42-1-335. An employer who is exempt from this title elects to adopt the title by obtaining workers' compensation insurance or by operating under an approved self-insurance program. If an employer exempt from this title adopts this title, the employer is deemed to continue to operate under this title until a notice to the contrary is filed in accordance with Section 42-1-390."
SECTION 8. Section 42-1-340 of the 1976 Code is amended to read:
"Section 42-1-340. The notices referred to in Sections 42-1-310 42-1-315 and 42-1-330 shall not be effective as to any accident resulting in injury or death that occurs within thirty days after the giving of any such notice; provided, that if any such accident occurs less than thirty days after the date of employment, notice of such exemption given at the time of employment shall be effective as to such accident. Any such notice shall be in writing or print, in substantially the form prescribed by the commission, and shall be given by the employer by posting it in a conspicuous place in the shop, plant, office, room or place in which the employee is employed or by serving it personally upon him and shall be given by the employee by sending it in registered letter, addressed to the employer at his last-known residence or place of business, or by giving it personally to the employer or any of his agents upon whom summons in a civil action may be served under the laws of the State.
A copy of the notice in the prescribed form shall be filed with the commission. In any suit by an employer or an employee who has exempted himself by proper notice from the application of this title a copy of such notice duly certified by the commission shall be admissible in evidence as proof of such exemption."
SECTION 9. Section 42-1-510 of the 1976 Code is amended to read:
"Section 42-1-510. An employer who elects not to operate under is not exempt from this title and who fails to insure his workers' compensation liabilities shall not, in any suit at law instituted by an employee subject to this title to recover damages for personal injury or death by accident, be permitted to defend any such suit at law upon any or all of the following grounds:
(1) that the employee was negligent; nor shall comparative negligence apply;
(2) that the injury was caused by the negligence of a fellow employee; or
(3) that the employee had assumed the risk of the injury."
SECTION 10. Section 42-1-520 of the 1976 Code is amended to read:
"Section 42-1-520. An officer of a corporation employee who elects not to operate under this title, shall, in any action to recover damages for personal injury or death brought against an employer accepting the compensation provisions of this title, proceed at common law and the employer may avail himself of the defenses of contributory negligence, negligence of a fellow servant, and assumption of risk, as such defenses exist at common law."
SECTION 11. The 1976 Code is amended by adding:
"Section 42-3-195. (A) The commission shall cooperate with and provide information and statistics to any agency of this State or of the United States charged with the duty of enforcing any law securing safety against injury in any employment covered by this title or with any state or federal agency engaged in enforcing any laws to assure safety for employees.
(B) Upon trial of any action other than a workers' compensation claim, such information shall not be placed in evidence or be permitted to be argued to the court or the jury."
SECTION 12. The first paragraph of Section 42-5-40 of the 1976 code is amended to read:
"Any employer required to secure the payment of compensation under this title who refuses or neglects to secure such compensation shall be punished by a fine of ten cents for each employee at the time of the insurance becoming due, but not less than one dollar nor more than fifty dollars for each day of such refusal or neglect, or, in cases of wilful or repeated violations, one hundred dollars for each day the employer fails to secure the necessary coverage, and until the same ceases, and he shall be liable during continuance of such refusal or neglect to an employee either for compensation under this title or at law in an action instituted by the employee or his personal representative against such employer to recover damages for personal injury or death by accident and in any such action such employer shall not be permitted to defend upon any of the grounds mentioned in Section 42-1-510."
SECTION 13. The second paragraph of Section 42-7-200(A) of the 1976 Code, as last amended by Act 589 of 1990, is further amended to read:
"When an employee makes a claim for benefits pursuant to Title 42 and the State Workers' Compensation Commission determines that the employer is subject to Title 42 and is operating without insurance or as an unqualified self-insurer, the commission shall notify the fund of the claim. The fund shall pay or defend the claim as it considers necessary in accordance with the provisions of Title 42. The remedy provided in this section shall not apply until all available administrative remedies under this title against any insured statutory employer have been exhausted."
SECTION 14. Section 42-9-220 of the 1976 Code is amended to read:
"Section 42-9-220. (A) Compensation under this title shall be paid periodically, promptly, and directly to the person entitled thereto, unless otherwise specifically provided.
(B) Compensation must be paid by a check and not a draft."
SECTION 15. Section 42-9-360 of the 1976 Code is amended to read:
"Section 42-9-360. (A) No claim for compensation under this title shall be assignable and all compensation and claims therefor shall be exempt from all claims of creditors and from taxes.
(B) It shall be unlawful for an authorized health care provider to demand of or cause a demand to be made on a workers' compensation claimant prior to the final adjudication of his claim. Nothing in this section shall be construed to prohibit the collection from and demand for collection from a workers' compensation insurance carrier or self-insured employer. Violation of this section shall result in a penalty of five hundred dollars payable to the workers' compensation claimant.
(C) It shall be unlawful for an authorized health care provider to demand of or cause a demand to be made on a workers' compensation claimant for charges in excess of the fee provided by the commission's applicable fee schedule or to charge any fee in excess of the fee provided by such schedule. Violation of this section shall result in a penalty of one thousand dollars payable to the workers' compensation claimant.
(D) Payment to an authorized health care provider for services shall be made timely but no later than thirty days from the date the authorized health care provider tenders request for payment to the employer's representative, unless the commission has received a request to review the medical bill."
SECTION 16. The 1976 Code is amended by adding:
"Section 42-9-395. If a settlement agreement provides for a structured settlement to be paid by a party other than the self-insured employer or the insurer, then the agreement shall contain a provision that the self-insured employer or insurer will be liable for the agreement in the event of the default or failure of that third party to pay."
SECTION 17. Section 42-17-90 of the 1976 Code is amended to read:
"Section 42-17-90. (A) Upon its own motion or upon the application of any party in interest on the ground of a change in condition, the commission may review any award and on such review may enter an order make an award ending, diminishing, or increasing the compensation previously awarded, subject to the maximum or minimum provided in this title, and shall immediately send to the parties a copy of the order changing the award. No such review shall affect such award as regards any monies paid and no such review shall be made after twelve months from the date of the last payment of compensation pursuant to an award under this title.
(B) The commission shall provide by regulation the method and procedure by which an award or order commencing temporary compensation and entered without an evidentiary hearing may be set aside for fraud but such regulation must provide for an evidentiary hearing. Further, the commission may not entertain any application to set aside for fraud an award or order commencing temporary compensation and entered without an evidentiary hearing unless and until the employer or carrier is current with all payments due.
(C) The filing required by this section may be made by certified mail, return receipt requested, in which case the date of filing is the date of mailing as shown by the return receipt and the same shall constitute filing within the time period set forth in this section."
SECTION 18. Section 42-19-10 of the 1976 Code, as last amended by Section 15, Part II, of Act 612 of 1990, is further amended to read:
"Section 42-19-10. Every employer shall keep a record of all injuries, fatal or otherwise, received by his employees in the course of their employment on blanks approved by the commission. Within ten days after the occurrence and knowledge of it, as provided in Section 42-15-20, of an injury to an employee requiring medical or surgical attention, a report of the injury must be made in writing and mailed to the commission on blanks approved by it for this purpose. However, for the injury of a South Carolina National Guard member as provided for in Section 42-7-67, the ten days must be counted from the date the employer, the South Carolina National Guard, has knowledge that the federal government has denied benefits to the injured guard member or that benefits or additional benefits may be due under the provisions for South Carolina Workers' Compensation.
Such report shall contain the name, nature and location of the business of the employer and the name, age, sex, wages and occupation of the injured employee and shall state the date and hour of the accident causing injury, the nature and cause of the injury and such other information as may be required by the Commission.
An injury for which there is no compensable lost time or permanency and the medical treatment does not exceed an amount specified by regulation of the Workers' Compensation Commission may be filed in summary on a form and at a time prescribed by the commission. Provided, however, this form may not be used to report an injury to the back.
Every employer shall keep a record of all injuries, fatal or otherwise, received by his employees in the course of their employment on forms approved by the commission.
If the injury requires minimal medical attention at a cost not to exceed an amount specified by regulation of the Workers' Compensation Commission, does not cause more than one lost workday or permanency, the employer is not required to make a written report to the commission or their insurance carrier, provided the employer maintains a record as prescribed by the commission and pays directly the incurred cost of the resulting medical attention.
All other injuries must be reported in writing to the commission according to the following guidelines:
(1) An injury for which there is no compensable lost time or permanency and the medical treatment does not exceed an amount specified by regulation of the Workers' Compensation Commission must be reported annually on a form and at a time prescribed by the commission.
(2) An injury involving compensable lost time, medical attention in excess of the limit established by commission regulation in (1) above, or the possibility of permanency must be reported within ten business days after the occurrence and knowledge of it, as provided in Section 42-15-20, on a form or in an electronic format prescribed by the commission.
However, for the injury of a South Carolina National Guard member as provided for in Section 42-7-67, the reporting periods must be counted from the date the employer, the South Carolina National Guard, has knowledge that the federal government has denied benefits to the injured guard member or that benefits or additional benefits may be due under the provisions of Title 42."
SECTION 19. A. Chapter 55 of Title 38 of the 1976 Code is amended by adding:
Section 38-55-510. This article is known and may be cited as the `Omnibus Insurance Fraud and Reporting Immunity Act'.
Section 38-55-520. The purpose of this article is to define what constitutes insurance fraud; to facilitate the detection of insurance fraud; to allow reporting of suspected insurance fraud; to grant immunity for reporting suspected insurance fraud; to prescribe penalties for insurance fraud; to require restitution for victims of insurance fraud; and to establish a division within the Office of the Attorney General to prosecute insurance fraud.
Section 38-55-530. As used in this article:
(a) `Authorized agency' means any duly constituted criminal investigative department or agency of the United States or of this State; the Department of Insurance; the Department of Highways and Public Transportation; the Workers' Compensation Commission; the Office of the Attorney General of this State; or the prosecuting attorney of any judicial circuit, county, municipality, or political subdivision of this State or of the United States, and their respective employees or personnel acting in their official capacity.
(b) `Insurer' shall have the meaning set forth in Section 38-1-20(25) and includes any authorized insurer, self-insurer, reinsurer, broker, producer, or any agent thereof.
(c) `Person' means any natural person, company, corporation, unincorporated association, partnership, professional corporation, or other legal entity and includes any applicant, policyholder, claimant, medical provider, vocational rehabilitation provider, attorney, agent, insurer, fund, or advisory organization.
(d) `Insurance fraud' means any fraudulent conduct, act, or omission committed by any person in connection with an insurance transaction which is designed to obtain and results in an undeserved economic advantage or benefit if such conduct, act, or omission is done knowingly or with an intent to injure, defraud, or deceive.
Section 38-55-540. Any person or insurer who commits an insurance fraud, and any other person knowingly, with an intent to injure, defraud or deceive, wo assists, abets, solicits, or conspires with such person or insurer to commit an insurance fraud, shall be guilty of a felony and, upon conviction thereof, shall be punished by a fine not to exceed fifty thousand dollars or by imprisonment for a term not to exceed five years, or by both such fine and imprisonment.
When appropriate, any person or insurer convicted of an insurance fraud may be required to make full restitution of any economic benefit or advantage which has been obtained through insurance fraud.
Section 38-55-550. (a) The Attorney General, upon receipt of any allegation of insurance fraud, is empowered to:
(1) perform investigations;
(2) prosecute persons determined to be in violation of Section 38-55-540 in a court of appropriate jurisdiction; and
(3) collect fines and restitution ordered by such courts.
(b) There is established in the office of the Attorney General a division to be known as the Insurance Fraud Division, which shall prosecute insurance fraud. The Insurance Fraud Division of the Office of Attorney General must be funded by an appropriation of not less than two hundred thousand dollars annually from the general revenues of the State derived from the insurance premium taxes collected by the Department of Insurance and/or from fines assessed under Section 38-55-540 which shall be deposited in the general revenue fund to the credit of the Office of the Attorney General to offset the costs of this program.
(c) Where deemed appropriate, the Attorney General may use the Setoff Debt Collection Act to collect fines and restitution ordered as a result of actions brought pursuant to Section 38-55-540.
Section 38-55-560. (a) Any person or insurer having reason to believe that another has committed an insurance fraud or has knowledge of a suspected insurance fraud shall, for purposes of reporting and investigation, notify an authorized agency of the knowledge or belief and provide any additional information within his possession relative thereto.
(b) Upon request by an authorized agency, any person or insurer may release to such authorized agency any or all information relating to any suspected insurance fraud, including, but not limited to:
(1) insurance policy information relevant to the investigation, including any application for such a policy;
(2) policy premium payment records, audits, or other documents which are available;
(3) history of previous claims, payments, fees, commissions, service bills, or other documents which are available; and
(4) other information relating to the investigation of the suspected insurance fraud.
(c) Any authorized agency provided with or obtaining information relating to a suspected insurance fraud as provided for above may release or provide the information to any other authorized agency. The Department of Insurance, the Department of Highways and Public Transportation, and the Workers' Compensation Commission shall refer, but not adjudicate, all cases of suspected or reported insurance fraud to the Insurance Fraud Division of the Office of Attorney General for appropriate investigation or prosecution, or both.
(d) Except as otherwise provided by law, any information furnished pursuant to this section shall be privileged and shall not be part of any public record. Any information or evidence furnished to an authorized agency pursuant to this section shall not be subject to subpoena or subpoena duces tecum in any civil or criminal proceeding unless, after reasonable notice to any person, insurer, or authorized agency which has an interest in the information and after a subsequent hearing, a court of competent jurisdiction determines that the public interest and any ongoing investigation will not be jeopardized by obeyance of the subpoena or subpoena duces tecum.
Section 38-55-570. (a) No person, insurer, or authorized agency, when acting without malice or in good faith, shall be subject to any civil or criminal liability by virtue of filing reports, cooperating with investigations by any authorized agency, or furnishing other information, whether written or oral, and whether in response to a request by an authorized agency or upon their own initiative, concerning any suspected, anticipated, or completed insurance fraud, when such reports or information are provided to or received by any authorized agency.
(b) Nothing herein abrogates or modifies in any way common law or statutory privilege or immunity heretofore enjoyed by any person, insurer, or authorized agency.
(c) Nothing herein limits the liability of any person or insurer who, with malice or in bad faith, makes a report of suspected fraud under the provisions of this article."
B. The 1976 Code is amended by adding:
"Section 42-9-440. The commission may refer all cases of suspected fraud to the Insurance Fraud Division of the Office of the Attorney General for investigation and prosecution, if warranted, pursuant to the Omnibus Insurance Fraud and Reporting Immunity Act."
SECTION 20. The felony created by Section 38-55-540 of the 1976 Code, as contained in Section 19 of this act, is added to the list of crimes classified as felonies pursuant to Section 16-1-10 of the 1976 Code.
SECTION 21. Section 42-1-380 and 42-1-530 of the 1976 Code are repealed.
SECTION 22. Except as may otherwise be provided in this act, this act takes effect upon approval by the Governor.