Current Status Introducing Body:Senate Bill Number:802 Ratification Number:179 Act Number:187 Primary Sponsor:Committee (02) Type of Legislation:JR Subject:Reinsurance facility, audit of Date Bill Passed both Bodies:19930602 Computer Document Number:802 Governor's Action:S Date of Governor's Action:19930614 Introduced Date:19930526 Date of Last Amendment:19930601 Last History Body:------ Last History Date:19930614 Last History Type:Act No. 187 Scope of Legislation:Statewide Sponsor Committee:Banking and Insurance Sponsor Committee Number:02 Type of Legislation:Joint Resolution
Bill Body Date Action Description CMN Leg Involved
---- ------ ------------ ------------------------------ --- ------------
802 ------ 19930614 Act No. 187
802 ------ 19930614 Signed by Governor
802 ------ 19930610 Ratified R 179
802 Senate 19930602 Concurred in House amendment,
enrolled for ratification
802 House 19930602 Read third time, returned to
Senate with amendment
802 House 19930601 Amended, read second time
802 House 19930531 Introduced, read first time,
placed on Calendar without
reference
802 Senate 19930528 Read third time, sent to House
802 Senate 19930527 Read second time, unanimous
consent for third reading on
Friday, 19930528
802 Senate 19930526 Introduced, read first time,
placed on Calendar without
reference
View additional legislative information at the LPITS web site.
(A187, R179, S802)
A JOINT RESOLUTION TO PROVIDE THAT THE CHIEF INSURANCE COMMISSIONER IS DIRECTED TO ISSUE AN INVITATION FOR BIDS NO LATER THAN JULY 1, 1994, FOR ANY AND ALL SERVICES WHICH ARE CURRENTLY PAID BY, OR PROVIDED TO, THE SOUTH CAROLINA REINSURANCE FACILITY BY DESIGNATED CARRIERS, NONPROFIT SERVICE ASSOCIATION OF INSURANCE COMPANIES, OR OTHER COMPANIES NOT OTHERWISE EXCLUDED FROM PROVISIONS OF THIS JOINT RESOLUTION, TO REQUIRE THAT THE SOLICITATION MUST BE CONDUCTED IN STRICT ACCORDANCE WITH THE PROVISIONS OF CHAPTER 35 OF TITLE 11 GENERALLY, AND SPECIFICALLY WITH RESPECT TO THE PROVISIONS GOVERNING COMPETITIVE SEALED BIDDING, TO PROVIDE THAT THE FACILITY BUSINESS TO BE BID MUST BE SPLIT INTO NOT LESS THAN THREE BLOCKS OF BUSINESS, TO BE AWARDED TO NOT LESS THAN THREE DIFFERENT PROVIDERS, AND THE CONTRACT MUST BE FIVE YEARS, TO PROVIDE THAT ANY CONTRACT OR AGREEMENT CURRENTLY IN FORCE FOR THE PROVISION OF SERVICES TO THE FACILITY BY A DESIGNATED CARRIER, NONPROFIT SERVICE ASSOCIATION OF INSURANCE COMPANIES, OR OTHER COMPANIES NOT OTHERWISE EXCLUDED FROM THE PROVISIONS OF THIS JOINT RESOLUTION IS TERMINATED NOT LATER THAN SEPTEMBER 30, 1994, OR THE SPECIFIED TERMINATION DATE, WHICHEVER COMES LATER, TO REQUIRE THE CHIEF INSURANCE COMMISSIONER TO PERFORM AN AUDIT OF THE RECORDS OF THE SOUTH CAROLINA REINSURANCE FACILITY FOR THE PURPOSE OF PROVIDING THE GENERAL ASSEMBLY A COMPREHENSIVE REPORT, TO PROVIDE WHAT MUST BE INCLUDED IN THE REPORT AND THAT IT BE COMPLETED BY JANUARY 1, 1994, TO REQUIRE THE COMMISSIONER TO OBTAIN FROM EACH MEMBER INSURER A COMPLETE AUDITED FINANCIAL STATEMENT FROM AND A RECORD OF ALL TRANSACTIONS BETWEEN EACH OF THE MEMBER INSURERS AND ANY COMPANY, ORGANIZATION, BUSINESS, ENTERPRISE, OR OTHER ENTITY WITH WHICH A MEMBER INSURER CONTRACTS OR HAS A BUSINESS RELATIONSHIP, TO PROVIDE THAT THE PROVISIONS OF THIS JOINT RESOLUTION DO NOT APPLY TO CONTRACTS UTILIZED TO ENFORCE INSURANCE POLICY SALES BETWEEN PRODUCER AGENTS AND INSUREDS AND THE MEMBER INSURERS, CONTRACTS FOR LEASING OR MAINTENANCE OF OFFICE EQUIPMENT FOR FURNITURE, TELEPHONE SERVICES, OFFICE SUPPLIES, POSTAL SERVICES, LEGAL SERVICES, OR OTHER NONINSURANCE RELATED CONTRACTS UTILIZED IN THE ORDINARY COURSE OF EVERY DAY BUSINESS OPERATION, TO PROVIDE THAT THE RESULTS OF AUDITS, REVIEWS, AND FINANCIAL STATEMENTS REQUIRED IN THIS JOINT RESOLUTION MUST BE COLLECTED AND COMPILED BY THE COMMISSIONER AND INCLUDED IN THE REPORT TO THE GENERAL ASSEMBLY ALONG WITH THOSE OF THE DESIGNATED CARRIERS SPECIFIED IN A JOINT RESOLUTION OF 1993 BEARING RATIFICATION NUMBER 136, THE CONTENTS OF WHICH OR WORK PRODUCTS INCIDENTAL TO IT MUST NOT BE DISCLOSED TO ANY SOURCE BY THE COMMISSIONER PRIOR TO OR OUTSIDE OF THE REPORT, TO PROVIDE THAT ANY PRESENT MEMBER INSURER WHICH HAS A CONTRACT OR BUSINESS RELATIONSHIP WITH ANY OTHER COMPANY, ORGANIZATION, BUSINESS, ENTERPRISE, OR OTHER ENTITY SUBJECT TO THE PROVISIONS OF THIS JOINT RESOLUTION WHICH REFUSES OR FAILS TO PRESENT THE AUDITED FINANCIAL STATEMENTS REQUIRED IS INELIGIBLE TO BE CONSIDERED IN THE BIDDING PROCESS PROVIDED FOR IN THIS JOINT RESOLUTION; AND TO REPEAL ACT 186 OF 1993.
Be it enacted by the General Assembly of the State of South Carolina:
Invitation for bids required
SECTION 1. No later than July 1, 1994, the Chief Insurance Commissioner is directed and required to issue an invitation for bids for any and all services which are currently paid by, or provided to, the South Carolina Reinsurance facility by designated carriers, nonprofit service association of insurance companies, or other company not otherwise excluded in Section 4. The solicitation shall be conducted in strict accordance with the provisions of Chapter 35 of Title 11 generally, and specifically with respect to the provisions governing competitive sealed bidding. The facility business to be bid under this section must be split into not less than three blocks of business to be awarded to not less than three different providers, and the contracts must be for five years.
Termination of contract or agreement
SECTION 2. Any contract or agreement currently in force for the provision of services to the South Carolina Reinsurance Facility by a designated carrier, nonprofit service association of insurance companies, or other company not otherwise excluded by Section 4 is terminated not later than September 30, 1994, or the specified termination date, whichever comes later.
Audit to be performed
SECTION 3. (A) The Chief Insurance Commissioner is directed and required to perform an audit of the records of the South Carolina Reinsurance Facility for the purpose of providing the General Assembly a comprehensive report. The report must be completed by January 1, 1994, and must include:
(1) comparative audited financial statements, including all applicable comparative schedules and footnote disclosures from each member insurer of the facility and any company, organization, business enterprise, or other entity with which a member insurer, or the facility, contracts or has or has had a business relationship since 1987. This audit report must be prepared by an independent certified public accountant and must include all financial statements and footnote disclosures required under generally accepted accounting procedures. The commissioner must also include in the report the results of a review performed by the Department of Insurance of the books, records, and papers of any company, organization, business, enterprise, or other entity subject to licensure by the Department of Insurance which contracts with or has or has had a business relationship with a member insurer since 1987;
(2) supplemental comparative schedules to be included in the report are:
(a) a detailed schedule of profit or loss incurred by each of the member insurers on business ceded to the facility;
(b) a listing of all shareholders who own more than a five percent interest and their annual compensation;
(c) a listing of all shareholders who own more than a five percent interest in any entity, corporation, or partnership with related business contracts or interest to the member insurer;
(d) an annual analysis of any distribution of profits to shareholders or partners who have an ownership of five percent or more;
(e) the amount of reserves held by each member insurer for facility business and the income from the investment of such reserves;
(f) a detailed listing by item and amount of all expenses each member insurer is reimbursed by the facility; and
(g) a comparative analysis of loss ratios;
(3) a detailed listing of all expenses incurred by the facility.
(B) The commissioner must obtain from each member insurer a complete audited financial statement from and a record of all transactions between each of the member insurers and any company, organization, business, enterprise, or other entity with which a member insurer contracts or has a business relationship.
Provisions not to apply
SECTION 4. The provisions of this joint resolution requiring the solicitation of bids for services mandating audit and disclosure do not apply to contracts utilized to enforce insurance policy sales between producer agents and insureds and the member insurers, contracts for leasing or maintenance of office equipment or furniture, telephone services, office supplies, postal services, legal services, or other noninsurance related contracts utilized in the ordinary course of everyday business operation.
Results of audits, reviews, and financial statements
SECTION 5. The results of audits, reviews, and financial statements required herein must be collected and compiled by the commissioner and included in the report to the General Assembly, along with those of the designated carriers specified in Act 186 of 1993, the contents of which or work products incidental thereto must not be disclosed to any source by the commissioner prior to or outside of the report. Any present member insurer which has a contract or business relationship with any other company, organization, business, enterprise, or other entity subject to the provisions herein which refuses or fails to present the audited financial statements required herein is ineligible to be considered in the bidding process provided for in Section 1.
Repealed
SECTION 6. Act 186 of 1993, is repealed by this joint resolution; provided that all sections required by Act 186 of 1993 before the effective date of this joint resolution must be met.
Time effective
SECTION 7. This joint resolution takes effect upon approval by the Governor.
Approved the 14th day of June, 1993.