Current Status Introducing Body:House Bill Number:4972 Primary Sponsor:Felder Type of Legislation:GB Subject:Motor vehicle insurance, reinsurance facility; provisions Residing Body:House Date Tabled:19940601 Computer Document Number:BBM/9045JM.94 Introduced Date:19940324 Last History Body:House Last History Date:19940601 Last History Type:Tabled Scope of Legislation:Statewide All Sponsors:Felder Wells Beatty Allison Littlejohn Townsend Walker Cobb-Hunter R. Smith Cato G. Brown McLeod Waldrop G. Bailey Klauber Quinn Harvin Houck Richardson Govan McKay Elliott Robinson McElveen Davenport Gamble Tucker Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
____ ______ ____________ ______________________________ ___ ____________
4972 House 19940601 Tabled
4972 House 19940524 Debate adjourned until
Wednesday, June 1, 1994
4972 House 19940504 Committee Report: Favorable 26
with amendment
4972 House 19940324 Introduced, read first time, 26
referred to Committee
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Indicates Matter Stricken
Indicates New Matter
COMMITTEE REPORT
May 4, 1994
H. 4972
Introduced by REPS. Felder, Wells, Beatty, Allison, Littlejohn, Townsend, Walker, Cobb-Hunter, R. Smith, Cato, G. Brown, McLeod, Waldrop, G. Bailey, Klauber, Quinn, Harvin, Houck, Richardson, Govan, McKay, Elliott, Robinson, McElveen, Davenport, Gamble and Tucker
S. Printed 5/4/94--H.
Read the first time March 24, 1994.
To whom was referred a Bill (H. 4972), to change the title of Article 5, Chapter 77, Title 38 of the Code of Laws of South Carolina, 1976, from "Reinsurance Facility and Designated Producers", etc., respectfully
That they have duly and carefully considered the same, and recommend that the same do pass with amendment:
Amend the bill, as and if amended, page 4, by striking Section 38-77-590(b), as contained in SECTION 3, and inserting:
/(b) After the effective date of this section, those producers previously designated by the Commissioner may continue to serve in that capacity under the jurisdiction and control of the governing board of the Facility, except that After June 1, 1994, producers previously designated by the commissioner or the governing board may continue to serve in the capacity of a servicing agent for the Reinsurance Facility and shall not be required to requalify or reapply for assignment under the provisions of subsection (c). Producers assigned to a servicing carrier in accordance with this section and producers previously designated to a servicing carrier by the commissioner or the governing board of the Reinsurance Facility must remain assigned to that servicing carrier until and unless, after October 1, 1995, the producer's written request to change the assignment is received by the governing board of the Reinsurance Facility or until the assignment is transferred to another carrier by the governing board upon nonrenewal or termination of that servicing carrier's contract. Any change in the rate of commissions allowed designated the producers is subject to the commissioner's approval. Policies ceded to the facility by an agent representing a voluntary market can only be `new business' to such agent. New business is defined as business not currently written or renewed through any voluntary carrier of the agent./
Amend further, pages 4 and 5, by striking Section 38-77-590(c), as contained in SECTION 3, and inserting:
/(c) A producer may apply to the governing board for assignment to a servicing carrier and is eligible for assignment be designated by the governing board of the Facility upon application for designation and is eligible for designation upon a finding by the governing board that the applicant meets the following qualifications:
(1) The applicant has been, for ten five continuous years, a licensed resident property and casualty insurance agent and is at the time of application an agency owner or principal associated with an agency in South Carolina which has been actively in business for five years with authority from one or more licensed insurers to write liability and physical damage insurance on private passenger automobiles;
(2) At the time of application the applicant is servicing and owns the renewals on South Carolina private passenger and commercial automobile insurance business, the net premiums on which exceeded seventy-five one hundred thousand dollars of potential cedeable automobile insurance during any one of the previous five calendar years preceding the application;
(3) Neither the applicant, nor any employee of the applicant or the applicant's corporate agency, nor any partner or shareholder in any related insurance agency, related premium service company, or related other business, has any direct or indirect connection with any voluntary market outlet for the purpose of writing any type of automobile insurance in this State except for motorcycle insurance and types not cedeable to the facility;
(4) The applicant has not contributed to his termination as agent by any insurer because of any illegal breach of agency agreement or other related, improper, or unethical conduct; and
(5)(4) The books, records, and accounts of the insurance business of the applicant have been audited at the expense of the applicant and found by the governing board to be indicative of a financially sound operation./
Amend further, page 9, by striking SECTION 6 and inserting:
/SECTION 6. Section 38-73-1425 of the 1976 Code, as added by Act 113 of 1991, is amended to read:
"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.
The establishing of a facility rate for risks ceded to the facility before June 1, 1994, by insurers having company-filed rates less than the facility final rate or premium charge developed under Section 38-73-1420 must be accomplished by increasing the company-filed rate not more than ten percent at each successive policy renewal effective on or after October 1, 1994."/
Amend title to conform.
THOMAS C. ALEXANDER, for Committee.
TO CHANGE THE TITLE OF ARTICLE 5, CHAPTER 77, TITLE 38 OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976, FROM "REINSURANCE FACILITY AND DESIGNATED PRODUCERS" TO "REINSURANCE FACILITY, SERVICING CARRIERS AND PRODUCERS"; TO CHANGE THE TITLE OF SECTION 38-77-590 FROM "DESIGNATED PRODUCERS" TO "SERVICING CARRIERS AND PRODUCERS"; TO AMEND SECTION 38-77-590, AS AMENDED, RELATING TO AUTOMOBILE INSURANCE, THE REINSURANCE FACILITY, AND DESIGNATED PRODUCERS, SO AS TO DELETE CERTAIN LANGUAGE AND PROVISIONS AND PROVIDE, AMONG OTHER THINGS, THAT THE CHIEF INSURANCE COMMISSIONER, AFTER CONSULTATION WITH THE GOVERNING BOARD OF THE REINSURANCE FACILITY, SHALL DIRECT THE GOVERNING BOARD TO CONTRACT WITH ONE OR MORE INSURERS MEETING ELIGIBILITY REQUIREMENTS PROMULGATED BY THE GOVERNING BOARD TO ACT AS SERVICING CARRIERS FOR THE WRITING OF AUTOMOBILE INSURANCE THROUGH PRODUCERS ASSIGNED TO THE SERVICING CARRIER BY THE GOVERNING BOARD, THAT THE CONTRACT SHALL INCLUDE PROVISIONS FOR ONE HUNDRED PERCENT QUOTA SHARE REINSURANCE THROUGH THE FACILITY OF ANY AUTOMOBILE INSURANCE POLICY CEDED TO THE FACILITY, AND THAT THE GOVERNING BOARD MAY ESTABLISH REASONABLE NONDISCRIMINATORY STANDARDS WHICH ALL SERVICING CARRIERS MUST MEET FOR CONTRACT RENEWAL; TO AMEND SECTION 38-73-455, AS AMENDED, RELATING TO AUTOMOBILE INSURANCE RATES, SO AS TO DELETE CERTAIN LANGUAGE AND PROVISIONS, INCLUDING REFERENCES TO DESIGNATED PRODUCERS, PROVIDE, AMONG OTHER THINGS, THAT MEMBER COMPANIES OF AN AFFILIATED GROUP OF AUTOMOBILE INSURERS MAY UTILIZE DIFFERENT FILED RATES FOR CERTAIN AUTOMOBILE INSURANCE COVERAGES, AND ADD REFERENCES TO INSURERS CONTRACTED PURSUANT TO SECTION 38-77-590 AND REFERENCES TO "ASSIGNED PRODUCERS"; TO AMEND SECTION 38-73-1420, RELATING TO THE REQUIREMENT THAT THE BOARD OF GOVERNORS OF THE REINSURANCE FACILITY FILE AN EXPENSE COMPONENT FOR PRIVATE PASSENGER AUTOMOBILE INSURANCE RATE OR PREMIUM CHARGES AND THE USE OF THE COMPONENT AFTER APPROVAL, SO AS TO DELETE CERTAIN LANGUAGE AND PROVISIONS AND PROVIDE, AMONG OTHER THINGS, THAT THE BOARD OF GOVERNORS OF THE FACILITY SHALL FILE AN EXPENSE COMPONENT FOR PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE INSURANCE RATE OR PREMIUM CHARGES FOR USE WITH THE PURE LOSS COMPONENTS FOR PRIVATE PASSENGER AUTOMOBILE INSURANCE AND SMALL COMMERCIAL RISKS FILED WITH THE CHIEF INSURANCE COMMISSIONER BY THE RATING ORGANIZATION WITH THE LARGEST NUMBER OF MEMBERS OR SUBSCRIBERS; TO AMEND SECTION 38-73-1425, RELATING TO THE FINAL RATE OR PREMIUM CHARGE FOR PRIVATE PASSENGER AUTOMOBILE INSURANCE RISK CEDED TO THE REINSURANCE FACILITY, SO AS TO DELETE CERTAIN LANGUAGE AND PROVIDE, AMONG OTHER THINGS, THAT PREMIUMS ATTRIBUTABLE TO RISKS CEDED AT A COMPANY FILED RATE WHICH IS GREATER THAN THE REINSURANCE FACILITY RATE SHALL NOT BE INCLUDED WHEN DETERMINING TOTAL DIRECT CEDEABLE WRITTEN PREMIUMS UNDER SECTION 38-77-950; TO AMEND SECTION 38-77-280, AS AMENDED, RELATING TO COLLISION COVERAGE AND COMPREHENSIVE COVERAGE UNDER THE AUTOMOBILE INSURANCE LAWS, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT AN INSURER IS NOT REQUIRED TO WRITE PRIVATE PASSENGER PHYSICAL DAMAGE COVERAGE FOR CLASSIC CARS, ANTIQUE CARS, ANY AUTOMOBILE WITH ANY MODIFICATION TO THE CHASSIS OR WHEEL BASE, ANY AUTOMOBILE WITH A WHEEL BASE OF NINETY-NINE AND ONE-HALF INCHES OR LESS, INCLUDING UTILITY VEHICLES, OR ANY AUTOMOBILE WITHIN THE "SPORTS GROUP" OR "SPORTS PREMIUM GROUP"; AND TO AMEND SECTION 38-77-350, RELATING TO AUTOMOBILE INSURANCE AND THE FORM TO BE USED WHEN OPTIONAL COVERAGES ARE OFFERED, SO AS TO PROVIDE THAT A POLICY OF AUTOMOBILE INSURANCE OFFERED OR ISSUED BY A NEW SERVICING CARRIER FOR THE REINSURANCE FACILITY TO REPLACE A POLICY PREVIOUSLY ISSUED BY A FORMER SERVICING CARRIER AND CONTAINING THE SAME COVERAGE LIMITS AS THE FORMER POLICY CONSTITUTES A VALID REPLACEMENT POLICY THAT DOES NOT REQUIRE THE NEW SERVICING CARRIER OR AGENT TO MAKE A NEW OFFER OF COVERAGE OR TO OBTAIN A NEW APPLICATION FROM THE INSURED.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The title of Article 5, Chapter 77, Title 38 of the 1976 Code is amended to read:
SECTION 2. The title of Section 38-77-590 of the 1976 Code is amended to read:
SECTION 3. Section 38-77-590 of the 1976 Code, as last amended by Act 524 of 1990, is further amended to read:
"Section 38-77-590. (a) Not more than six months after July 9, 1974, or at an earlier time as the Commissioner considers necessary by reason of complaints regarding want of access to automobile insurance in particular areas or want of outlets for producers, the Commissioner shall survey the various areas of the State to ascertain if sufficient marketing outlets exist in all areas or are available to all producers. Upon a finding by the Commissioner that insufficient marketing outlets exist in particular areas or that certain producers have been deprived of a market for risks previously serviced by them, the Commissioner may, after consultation with the Facility, designate one or more insurers to service the areas through agents appointed by them or may designate the producers as the agents of any insurer. The arrangements shall include provision for one hundred percent quota share reinsurance through the Facility of any automobile insurance policy marketed through the arrangements, at the option of the insurer, and the reinsurance is not subject to the statutory provisions or regulations regarding excessive utilization of the Facility. The commissioner, after consultation with the governing board of the Reinsurance Facility, shall direct the governing board to contract with one or more insurers meeting eligibility requirements promulgated by the governing board to act as servicing carriers for the writing of automobile insurance through producers assigned to the servicing carrier by the governing board. The contract shall include provisions for one hundred percent quota share reinsurance through the facility of any automobile insurance policy ceded to the facility. The governing board may establish reasonable nondiscriminatory standards which all servicing carriers must meet for contract renewal. The servicing carriers shall not be subject to the statutory provisions or regulations regarding excessive utilization of the Reinsurance Facility for policies produced by its assigned servicing agents. The servicing carrier shall cede the risk on every policy of automobile insurance produced by its assigned servicing agents for the reinsurance facility.
(b) After the effective date of this section, those producers previously designated by the Commissioner may continue to serve in that capacity under the jurisdiction and control of the governing board of the Facility, except that After June 1, 1994, producers previously designated by the commissioner or the governing board may continue to serve in the capacity of a servicing agent for the Reinsurance Facility and shall not be required to requalify or reapply for assignment under the provisions of subsection (c). Producers assigned to a servicing carrier in accordance with this section and producers previously designated to a servicing carrier by the commissioner or the governing board of the Reinsurance Facility must remain assigned to that servicing carrier until and unless, after October 1, 1995, the producer's written request to change the assignment is received by the governing board of the Reinsurance Facility or until the assignment is transferred to another carrier by the governing board upon nonrenewal or termination of that servicing carrier's contract. Any change in the rate of commissions allowed designated the producers is subject to the commissioner's approval.
(c) A producer may apply to the governing board for assignment to a servicing carrier and is eligible for assignment be designated by the governing board of the Facility upon application for designation and is eligible for designation upon a finding by the governing board that the applicant meets the following qualifications:
(1) The applicant has been, for ten five continuous years, a licensed resident property and casualty insurance agent and is at the time of application an agency owner or principal associated with an agency in South Carolina which has been actively in business for five years with authority from one or more licensed insurers to write liability and physical damage insurance on private passenger automobiles; and
(2) At the time of application the applicant is servicing and owns the renewals on South Carolina private passenger and commercial automobile insurance business, the net premiums on which exceeded seventy-five one hundred thousand dollars of potential cedeable automobile insurance during any one of the previous five calendar years preceding the application; and
(3) Neither the applicant, nor any employee of the applicant or the applicant's corporate agency, nor any partner or shareholder in any related insurance agency, related premium service company, or related other business, has any direct or indirect connection with any voluntary market outlet for the purpose of writing any type of automobile insurance in this State except for motorcycle insurance and types not cedeable to the facility;
(4) The applicant has not contributed to his termination as agent by any insurer because of any illegal breach of agency agreement or other related, improper, or unethical conduct; and
(5) The books, records, and accounts of the insurance business of the applicant have been audited at the expense of the applicant and found by the governing board to be indicative of a financially sound operation.
(d) Prior to Before designation the assignment as a producer, the applicant shall furnish at his expense a bond in an amount of not less than fifty thousand dollars for the faithful performance of the duties as a producer, executed by the applicant as principal and a corporate surety licensed to do business in this State as surety, and shall also have effective errors and omissions insurance by an insurer licensed to do business in this State, with the bond and errors and omissions insurance being subject to approval by the governing board.
(e) The governing board shall assign a specific location to each producer designated. The governing board shall determine from the commissioner the locations assigned by him to those producers whom the commissioner has designated. Designated producers may not open or maintain any other locations without the written authorization of the governing board; provided, however, that an applicant maintaining multiple offices on June 4, 1987, is entitled to maintain two locations as a designated agent which he owned and operated at that time and through which premiums in at least the amount of seventy-five thousand dollars were written. The governing board shall terminate the designation, and the commissioner shall revoke all agents' licenses of any producer who does not comply with this requirement upon demand by the governing board. Upon termination, the producer's expirations on designated business become the property of the facility. A producer assigned to a servicing carrier may not open or maintain more than one location at which the solicitation or transaction of any automobile insurance business is conducted and may not change such location without the written authorization of the governing board. The governing board shall terminate the assignment of any servicing agent who does not comply with this requirement upon demand by the governing board. Applicants maintaining multiple offices on January 1, 1994, are entitled to maintain two locations as a producer which the agent owned and operated at that time and through which automobile insurance premiums in at least the amount of one hundred thousand dollars were written by the agent at each of the two locations.
(f) The designation of a producer by the Commissioner or the governing board is transferable to a spouse, child, parent, brother, or sister of the producer upon the designated producer's retirement, incapacity, or death. The duties of a designated producer may be performed by one or more qualified employees of the producer or the producer's corporate agency. The assignment of a producer to a servicing carrier by the governing board is transferable to a spouse, child, parent, brother, or sister of the producer upon the producer's retirement, incapacity, or death. The assignment at any time may, at the election of the producer by written notice thereof to the governing board, be irrevocably transferred to a corporation authorized to transact business in South Carolina by the Secretary of State and licensed by the insurance commissioner as an insurance agency. The duties of an individual or corporate producer may be performed by one or more qualified employees of the producer.
(g) Neither a designated producer, nor any employee of a designated producer or the producer's corporate agency, nor any partner or shareholder in any related insurance agency, related premium service company, or related other business, may have any direct or indirect connection with any voluntary market outlet for the purpose of writing any type of automobile insurance in this State except for motorcycle insurance and types not cedable to the Facility. The governing board shall terminate the designation of any producer, and the Commissioner shall revoke all licenses of the producer and of any other insurance agent and premium service company knowingly involved in this connection. Upon termination, the producer's expirations on designated business become the property of the Facility.
(h) A designated servicing carrier who fails a claims audit shall have no new designated producer servicing agent assignments until the time it passes a re-audit within a reasonable time prescribed by the governing board. If this carrier fails two claims audits, including a re-audit, within any three-year period that carrier is disqualified for renewal of its contract with the facility upon expiration of its existing contract.
(h) The governing board of the Reinsurance Facility shall not contract with an insurer to act as a servicing carrier solely for the insurer's own authorized and voluntarily contracted agents. Servicing carriers shall accept assignments of servicing agents on an equitable, nondiscriminatory basis promulgated by the governing board.
(i) Upon the change of assignment of a producer to another servicing carrier, the producer's former servicing carrier shall not be subject to the requirements of Sections 38-75-740 and 38-77-120 for the existing policies of that producer which policies shall expire at the policy renewal dates beginning one hundred twenty days from the receipt of the notice of the change of assignment by the former carrier from the governing board of the Reinsurance Facility. The former servicing carrier shall give written notice to each such policyholder not less than thirty days before the policy expiration date stating:
(1) that the policy will expire on the policy expiration date and that coverage will not be continued by the former servicing carrier after that date; and
(2) that a renewal policy will be offered to the policyholder by the new servicing carrier effective at the expiration date and time of the existing policy; and
(3) the name, address, and phone number of the producer. The former servicing carrier shall provide in a timely manner current individual policy information sufficient to allow the new servicing carrier to issue renewal policies replacing the expiring policies of the producer's transferred business with like coverages and premiums. However, the original application for insurance and endorsements on expiring policies of the producer's transferred business shall be applicable to the renewal policy issued by the new servicing carrier and may take precedence over the information otherwise provided to the new servicing carrier. The producer's existing policyholders shall not be required to execute a new application for insurance. As a condition of acceptance of a producer's change of assignment the new servicing carrier must agree to compensate the former servicing carrier in a manner and amount determined by the governing board to reimburse the former servicing carrier costs to be incurred by its transfer of information and documents to the new servicing carrier based upon the producer's volume of business. Nothing in this section shall be construed to in any way change, assign, or terminate the property rights held by the producer which pertain to the producer's ownership of policy expirations."
SECTION 4. Section 38-73-455(C) of the 1976 Code, as last amended by Act 113 of 1991, is further amended to read:
"(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 contracted pursuant to Section 38-77-590(a), for automobile insurance risks written by them through producers designated assigned by the facility governing board pursuant to that section and, subject to the provisions of Section 38-73-1425, all insurers on all risks ceded to the facility, shall utilize the rates or premium charges developed under Section 38-73-1420 by coverage filed and authorized for use by the rating organization licensed by the commissioner pursuant to Article 11, Chapter 73 of this title, which has the largest number of members or subscribers for automobile insurance rates. However, those automobile insurers designated contracted 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 on risks not ceded to the facility."
SECTION 5. Section 38-73-1420 of the 1976 Code, as added by Act 148 of 1989, is amended to read:
"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 and commercial automobile insurance rate or premium charges for use with after the rating organization with the largest number of members or subscribers has filed a the pure loss component components for private passenger automobile insurance and small commercial risks filed with the commissioner by the rating organization with the largest number of members or subscribers. Upon the approval of such component components, those automobile insurers designated contracted pursuant to Section 38-77-590(a), for risks written by them through producers designated assigned pursuant to that same section, and, subject to the provisions of Section 38-73-1425, all insurers on all risks ceded to the facility, shall utilize these final rate or premium charges. Automobile insurers designated contracted 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 assigned pursuant to Section 38-77-590 on risks not ceded to the facility."
SECTION 6. Section 38-73-1425 of the 1976 Code, as added by Act 113 of 1991, is amended to read:
"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. Premiums attributable to risks ceded at a company filed rate which is greater than the facility rate shall not be included when determining total direct cedeable written premiums under Section 38-77-950.
The establishing of a facility rate for all business ceded to the facility must be phased in over a three-year period such that one-third of the current differential of the company-filed rate and the current facility rate shall be added on renewals effective on or after October 1, 1994, an additional one-third shall be added on renewals effective on or after October 1, 1995, and the remaining one-third balance of the differential between the company filed rate and the facility rate shall be added on renewals effective on or after October 1, 1996."
SECTION 7. Section 38-77-280 of the 1976 Code, as last amended by Act 113 of 1991, is further amended to read:
"Section 38-77-280. (A) Except as provided in subsection (B), all automobile insurers, including those insurance companies writing private passenger physical damage coverages only, shall make collision coverage and either comprehensive or fire, theft, and combined additional coverage available to an insured or qualified applicant who requests the coverage.
Collision coverage must have a mandatory deductible of two hundred fifty dollars, but an insured or qualified applicant, at his option, may select an additional deductible in appropriate increments up to one thousand dollars.
Comprehensive coverage or fire, theft, and combined additional coverages must have a mandatory deductible of two hundred fifty dollars, but an insured, at his option, may select an additional deductible in appropriate increments up to one thousand dollars. This deductible does not apply to auto safety glass. It is an unfair trade practice, as described in Sections 38-57-30 and 38-57-40, for an insurer or an agent to sell collision insurance, comprehensive coverage, or fire, theft, and combined additional coverages unless the insured is notified at the time of application of the savings which may be realized if the applicant or the insured selects a higher deductible. This notice is required only at the time of the initial sale and must be in a form approved by the Chief Insurance Commissioner. An insurer may offer insureds lower deductibles at the insurer's option.
(B) Notwithstanding subsection (A) and Sections 38-77-110 and 38-77-920, automobile insurers may refuse to write automobile physical damage insurance coverage, including automobile comprehensive physical damage, collision, fire, theft, and combined additional coverage, for an applicant or existing policyholder, on renewal, for a motor vehicle customarily operated by an individual, either the named insured or another operator not excluded in accordance with Section 38-77-340 and who resides in the same household, where one or more of the conditions or factors prescribed in Section 38-73-455 exist. In addition, automobile insurers may refuse to write physical damage insurance coverage to an applicant or existing policyholder, on renewal, who has collected benefits provided under automobile insurance physical damage coverage during the thirty-six months immediately preceding the effective date of coverage, for two or more total fire losses or two or more total theft losses. Automobile insurers may refuse to write for private passenger automobiles physical damage insurance coverage, including automobile comprehensive physical damage, collision, fire, theft, and combined additional coverage, for an applicant or existing policyholder, on renewal, for a motor vehicle customarily operated by an individual, either the named insured or another operator not excluded in accordance with Section 38-77-340 and who resides in the same household, which does not qualify for the safe driver discount in Section 38-73-760(e).
Notwithstanding the provisions of this section, and any other provision of law, an insurer is not required to write private passenger physical damage coverage for the following types of vehicles:
(1) classic cars, meaning an automobile whose monetary value exceeds the original purchase price which has appreciated in value by maintaining the original parts;
(2) antique cars, meaning an automobile over twenty-five years of age;
(3) any automobile with any modification to the chassis or wheel base;
(4) any automobile with a wheel base of ninety-nine and one-half inches or less, including utility vehicles;
(5) any automobile within the `Sports Group' or `Sports Premium Group'. For the purposes of this provision `Sports Group' means a two-passenger body type automobile with a net weight to horsepower ratio between 20:1 and 30:1. `Sports Premium Group' means a two-passenger body type automobile with a net weight to horsepower ratio between 20:1 or less.
(C) All insurers subject to the provisions of this section writing single interest collision coverage shall provide an applicant for the insurance at the time of his application a notice separate and apart from any other form used in the application. The notice must be signed by the applicant evidencing his acknowledgment of having read the notice. The notice must contain the following language printed in bold face type: `NOTICE: The insurance coverage you are hereby purchasing is only single interest collision coverage. The amount of insurance decreases as you pay off the amount of your indebtedness. You may not receive any insurance proceeds over and above the amount of the outstanding balance on your loan.'
(C) (D) Notwithstanding Section 38-77-110, automobile physical damage coverage in an automobile insurance policy may be canceled at any time during the policy period by reason of the factors or conditions described in Section 38-73-455(A) or Section 38-77-280(B) which existed before the commencement of the policy period and which were not disclosed to the insurer at the commencement of the policy period.
(D) (E) No policy of insurance which provides automobile physical damage coverage only may be ceded to the facility.
(E) (F) Insurers of automobile insurance may charge a rate for physical damage insurance coverages different than from those provided for in Section 38-73-457 if the rates are filed and approved by the Chief Insurance Commissioner. Any applicant or existing policyholder, to be charged this different rate, must be denied the coverage pursuant to subsection (B) at the rate provided in Section 38-73-457.
(F) (G) A carrier may not cede collision coverage, comprehensive coverage, or fire, theft, and combined additional coverages with a deductible of less than two hundred fifty dollars. An insured or qualified applicant may select an additional deductible in appropriate increments up to one thousand dollars. However, the mandatory deductible does not apply to safety glass."
SECTION 8. Section 38-77-350(C) of the 1976 Code, as added by Act 148 of 1989, is amended to read:
"(C) An automobile insurer is not required to make a new offer of coverage on any automobile insurance policy which renews, extends, changes, supersedes, or replaces an existing policy. However, the first renewal notices for existing policies after December 1, 1989, must include the form provided in subsection (A). A policy of automobile insurance offered or issued by a new servicing carrier for the South Carolina Reinsurance Facility to replace a policy previously issued by a former servicing carrier and containing the same coverage limits as the former policy constitutes a valid replacement policy that does not require the new servicing carrier or agent to make a new offer of coverage or to obtain a new application from the insured."
SECTION 9. This act takes effect June 1, 1994.