Current Status Introducing Body:Senate Bill Number:863 Primary Sponsor:Moore Committee Number:02 Type of Legislation:GB Subject:Improper insurance claims practices Residing Body:Senate Current Committee:Banking and Insurance Computer Document Number:863 Introduced Date:19940111 Last History Body:Senate Last History Date:19940111 Last History Type:Introduced, read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:Moore Courtney Holland Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
____ ______ ____________ ______________________________ ___ ____________
863 Senate 19940111 Introduced, read first time, 02
referred to Committee
863 Senate 19930927 Prefiled, referred to 02
Committee
View additional legislative information at the LPITS web site.
TO AMEND SECTION 38-59-20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DEFINITION OF IMPROPER INSURANCE CLAIMS PRACTICES, AND TO AMEND SECTION 38-59-30, RELATING TO FINES IMPOSED FOR IMPROPER CLAIMS PRACTICES, SO AS TO PROVIDE FOR MANDATORY FINES IMPOSED BY THE INSURANCE COMMISSIONER.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 38-59-20 of the 1976 Code is amended to read:
"Section 38-59-20. Any of the following acts by an insurer doing accident and health insurance, property insurance, casualty insurance, surety insurance, marine insurance, or title insurance business, if committed without just cause and performed with such frequency as to indicate a general business practice, constitutes an improper claim practices practices:
(1) Knowingly knowingly misrepresenting to insureds or third-party claimants pertinent facts or policy provisions relating to coverages at issue or providing deceptive or misleading information with respect to coverages. ;
(2) Failing failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies, including third-party claims arising under liability insurance policies. ;
(3) Failing failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims, including third-party liability claims, arising under its policies. ;
(4) Not not attempting in good faith to effect prompt, fair, and equitable settlement of claims, including third-party liability claims, submitted to it in which liability has become reasonably clear. ;
(5) Compelling compelling policyholders or claimants, including third-party claimants under liability policies, to institute suits to recover amounts reasonably due or payable with respect to claims arising under its policies by offering substantially less than the amounts ultimately recovered through suits brought by the claimants or through settlements with their attorneys employed as the result of the inability of the claimants to effect reasonable settlements with the insurers. ;
(6) Offering offering to settle claims, including third-party liability claims, for an amount less than the amount otherwise reasonably due or payable based upon the possibility or probability that the policyholder or claimant would be required to incur attorneys' fees to recover the amount reasonably due or payable. ;
(7) Invoking invoking or threatening to invoke policy defenses or to rescind the policy as of its inception, not in good faith and with a reasonable expectation of prevailing with respect to the policy defense or attempted rescission, but for the primary purpose of discouraging or reducing a claim, including a third-party liability claim. ; and
(8) Any any other practice which constitutes an unreasonable delay in paying or an unreasonable failure to pay or settle in full claims, including third-party liability claims, arising under coverages provided by its policies."
SECTION 2. Section 38-59-30 of the 1976 Code is amended to read:
"If, after due notice and hearing, the Commissioner commissioner 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 shall impose a penalty as provided in Section 38-2-10. If the penalty is imposed, the 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."
SECTION 3. This act takes effect upon approval by the Governor.