Current Status Introducing Body:House Bill Number:3888 Primary Sponsor:R. Smith Committee Number:26 Type of Legislation:GB Subject:Premium service companies, insurance Residing Body:House Current Committee:Labor, Commerce and Industry Computer Document Number:BBM/10422JM.93 Introduced Date:19930407 Last History Body:House Last History Date:19930407 Last History Type:Introduced, read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:R. Smith J. Bailey Stone G. Bailey Hutson Elliott Huff McLeod Cato Delleney Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
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3888 House 19930407 Introduced, read first time, 26
referred to Committee
View additional legislative information at the LPITS web site.
TO AMEND SECTION 38-77-110, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE AUTOMOBILE INSURANCE LAW AND THE REQUIREMENT UPON INSURERS TO INSURE AND EXCEPTIONS, SO AS TO PROVIDE THAT, WITH RESPECT TO THE NOTICE OF CANCELLATION FOR NONPAYMENT OF PREMIUM, IN CIRCUMSTANCES OF NONPAYMENT OF THE PREMIUM, OR PAYMENT AS PART OF AN INSTALLMENT OR PREMIUM FINANCE PLAN, MADE TO THE INSURER, AGENT, OR PREMIUM SERVICE COMPANY WHERE THE INSURER, AGENT, OR PREMIUM SERVICE COMPANY HAS NOTIFIED THE PERSON BY FIRST CLASS, CERTIFIED MAIL OF ITS INABILITY TO COLLECT SAID PREMIUM OR PAYMENT UTILIZING THE FINANCIAL INSTRUMENT PROVIDED BY THE PERSON, THE NOTICE OF CANCELLATION NOTIFIES THE PERSON THAT THE POLICY AND COVERAGE ARE CANCELED AT THE DATE AND TIME SUCH PREMIUM OR PAYMENT WAS DUE; TO AMEND SECTION 38-39-90, RELATING TO CANCELLATION OF INSURANCE CONTRACTS BY A PREMIUM SERVICE COMPANY, SO AS TO PROVIDE FOR A REFUND OF ANY EXCESS TO THE INSURED VIA THE INSURANCE AGENT, AGENCY, OR BROKER PLACING THE INSURANCE FOR THE ACCOUNT OF THE INSURED; TO AMEND SECTION 38-43-410, RELATING TO THE ADVANCING OF PREMIUMS BY INSURANCE AGENTS, SERVICE CHARGE, AND THE PROVISION THAT AN UNPAID BALANCE AND SERVICE CHARGE CONSTITUTE A LIEN ON UNEARNED PREMIUMS, SO AS TO PROVIDE FOR THE ADVANCEMENT OF ALL OR ANY PART OF A PREMIUM FOR AN INSURANCE POLICY TO A PREMIUM SERVICE COMPANY, AND PROVIDE THAT THE AGENT OR AGENCY HAS A LIEN EQUAL TO THE AMOUNT OF THE UNPAID BALANCE AND SERVICE CHARGES UPON ANY SURPLUS OVER THE AMOUNT DUE FROM AN INSURED HELD BY A PREMIUM SERVICE COMPANY; AND TO AMEND SECTION 38-43-450, RELATING TO THE ADVANCING OF PREMIUMS BY INSURANCE AGENTS AND THE REQUIREMENT THAT THE EXCESS OF A RETURN PREMIUM OVER AN UNPAID BALANCE AND CHARGES MUST BE HELD IN TRUST, SO AS TO DELETE CERTAIN PROVISIONS AND LANGUAGE, AND PROVIDE FOR PAYMENT OF EXCESS OF RETURN PREMIUM BY A PREMIUM SERVICE COMPANY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 38-77-110(A) of the 1976 Code, as last amended by Act 148 of 1989, is further amended to read:
"(A) Automobile insurers other than insurers designated and approved as specialized insurers by the commissioner may not refuse to write or renew automobile insurance policies for individual private passenger automobiles or small commercial risks. These policies may not be canceled except for reasons which had they existed or been known when the policy was written would have rendered the risk not an insurable risk. Every automobile insurance risk constitutes an insurable risk unless the operator's permit of the named insured has been revoked or suspended and is at the time of application for insurance so revoked or suspended. However, no insurer is required to write or renew automobile insurance on any risk if there exists a valid and enforceable outstanding judgment secured by an insurer, an agent, or licensed premium service company on account of automobile insurance premiums which the applicant or insured or any principal operator who is a member of the named insured's household has failed or refused to pay unless the applicant or insured pays in advance the entire premium for the full term of the policy sought to be issued or renewed or the annual premium, whichever is the lesser. An insurer is not precluded from effecting cancellation of an automobile insurance policy, either upon its own initiative or at the instance of an agent or licensed premium service company, because of the failure of any named insured or principal operator to pay when due any automobile insurance premium or any installment payment. However, notice of cancellation for nonpayment of premium notifies the person to whom the notice is addressed that the notice is void and ineffective if payment of the full amount of the premium or premium indebtedness, whichever is the greater, is made to the insurer, agent, or licensed premium service company named in the notice by the otherwise effective date of cancellation, except that in circumstances of nonpayment of the premium, or payment as part of an installment or premium finance plan, made to the insurer, agent, or premium service company where the insurer, agent, or premium service company has notified the person by first class, certified mail of its inability to collect said premium or payment utilizing the financial instrument provided by the person, the notice of cancellation notifies the person by reason of the above that the policy and coverage are canceled at the date and time such premium or payment was due. This notice of cancellation is not considered ineffective for being conditional, ambiguous, or indefinite."
SECTION 2. Section 38-39-90(f) of the 1976 Code is amended to read:
"(f) If the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium service company shall hold the surplus in a fiduciary capacity and promptly refund the excess to the insured via the agent, agency, or broker placing the insurance for the account of the insured. No refund is required if it amounts to less than three dollars."
SECTION 3. Section 38-43-410 of the 1976 Code is amended to read:
"Section 38-43-410. When, pursuant to the written or oral request of an insured or applicant for insurance, an insurance agent or agency advances all or any part of the premium for an insurance policy to the insurer or premium service company in behalf of the insured or applicant for insurance, the agent or agency is entitled to recover from the insured or applicant for insurance, in addition to the amount advanced, a service charge equal to the greater of one and one-half percent or one dollar and fifty cents a month on any unpaid balance. The agent or agency has a lien equal to the amount of the unpaid balance and service charges upon any unearned premium on the policy held by the insurer and subject to refund by the insurer under the policy, and upon any surplus over the amount due from an insured held by a premium service company."
SECTION 4. Section 38-43-450 of the 1976 Code is amended to read:
"Section 38-43-450. Any excess of return premium paid by the insurer or premium service company to an agent, agency, or producer in discharge of the lien provided by this article over the amount of unpaid balance and accrued service charges must be held by the agent, agency, or producer of record in his or its fiduciary capacity and the excess must be paid to the insured within a reasonable time and in no event later than thirty days after receipt by the agent, agency, or producer of the return premium refunded by from the insurer or premium service company."
SECTION 5. This act takes effect upon approval by the Governor.