Current Status Bill Number:3827 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19950321 Primary Sponsor:Cato All Sponsors:Cato Drafted Document Number:bmm\10025jm.95 Residing Body:House Current Committee:Labor, Commerce and Industry Committee 26 HLCI Subject:Motor vehicle insurance rates
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
House 19960507 Recommitted to Committee 26 HLCI
House 19960502 Recalled from Committee 26 HLCI
House 19960111 Recommitted to Committee, 26 HLCI
retaining its place on the Calendar
House 19950524 Debate adjourned until
Wednesday, 19950531
House 19950511 Debate adjourned until
Thursday, 19950518
House 19950425 Objection by Representative White
Inabinett
Askins
Lloyd
Neal
S. Whipper
McMahand
Cato
A. Young
Law
Howard
R. Smith
Limehouse
Robinson
House 19950404 Debate adjourned until
Tuesday, 19950425
House 19950329 Committee report: Favorable 26 HLCI
House 19950321 Introduced, read first time, 26 HLCI
referred to Committee
View additional legislative information at the LPITS web site.
Indicates Matter Stricken
Indicates New Matter
RECALLED
May 2, 1996
H. 3827
S. Printed 5/2/96--H.
Read the first time March 21, 1995.
TO AMEND SECTION 38-73-1425, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE FINAL RATE OR PREMIUM CHARGE FOR PRIVATE PASSENGER AUTOMOBILE INSURANCE RISK CEDED TO THE SOUTH CAROLINA REINSURANCE FACILITY, SO AS TO DELETE CERTAIN PROVISIONS, AND PROVIDE, AMONG OTHER THINGS, THAT BEGINNING JANUARY 1, 1996, AND ANNUALLY THEREAFTER, THE FINAL RATE OR PREMIUM CHARGE FOR A PRIVATE PASSENGER AUTOMOBILE INSURANCE RISK CEDED TO THE FACILITY MUST BE CALCULATED SO THAT THE PROJECTED COMBINED RATIO FOR RISKS SUBJECT TO THE FINAL RATE OR PREMIUM CHARGES IS NO MORE THAN ONE HUNDRED PERCENT; TO PROVIDE, AMONG OTHER THINGS, THAT THE PROVISIONS OF SECTION 38-73-1425 AS AMENDED BY THIS ACT, ARE EFFECTIVE ON JANUARY 1, 1996; TO AMEND SECTION 38-73-1420, RELATING TO THE REQUIREMENT THAT THE BOARD OF GOVERNORS OF REINSURANCE FACILITY FILE AN EXPENSE COMPONENT, SO AS TO DELETE CERTAIN LANGUAGE, AND PROVIDE, AMONG OTHER THINGS, THAT THE COST REDUCTIONS REALIZED IN OPERATING RESULTS OF THE REINSURANCE FACILITY MUST BE APPLIED EXCLUSIVELY TO REDUCE THE RECOUPMENT CHARGES ON ALL POLICIES OF PRIVATE PASSENGER AUTOMOBILE INSURANCE WRITTEN IN SOUTH CAROLINA; TO AMEND SECTION 38-73-455, AS AMENDED, RELATING TO AUTOMOBILE INSURANCE RATES, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT MEMBER COMPANIES OF AN AFFILIATED GROUP OF AUTOMOBILE INSURERS MAY UTILIZE DIFFERENT FILED RATES FOR AUTOMOBILE INSURANCE COVERAGES WHICH THEY ARE MANDATED BY LAW TO WRITE IN ACCORDANCE WITH RATING PLANS FILED WITH AND APPROVED BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE; TO AMEND SECTION 38-77-280, AS AMENDED, RELATING TO AUTOMOBILE INSURANCE AND COLLISION AND COMPREHENSIVE COVERAGES, SO AS TO DELETE CERTAIN LANGUAGE AND PROVISIONS, AND PROVIDE, AMONG OTHER THINGS, THAT THE DIRECTOR OF THE DEPARTMENT OF INSURANCE SHALL COMPILE A COMPARATIVE STATISTICAL ANALYSIS OF THE COMPLAINTS RECEIVED BY, OR FILED WITH, THE DEPARTMENT FROM PERSONS ALLEGING DISCRIMINATION WHEN THE PERSON IS DENIED PHYSICAL DAMAGE COVERAGES BY AN INSURER; TO AMEND THE 1976 CODE BY ADDING SECTION 38-77-596 SO AS TO PROVIDE THAT, NOTWITHSTANDING SECTION 38-77-590, UPON NOTIFICATION TO THE GOVERNING BOARD OF THE REINSURANCE FACILITY, DESIGNATED PRODUCERS MAY CONTRACT WITH A VOLUNTARY MARKET OUTLET FOR ANY TYPE OF AUTOMOBILE INSURANCE CEDEABLE TO THE FACILITY; TO AMEND SECTION 38-77-950, AS AMENDED, RELATING TO UNREASONABLE OR EXCESSIVE USE OF THE REINSURANCE FACILITY BY AN INSURER, SO AS TO DELETE CERTAIN PROVISIONS, PROVIDE THAT AN AUTOMOBILE INSURER OR A GROUP OF INSURERS UNDER THE SAME MANAGEMENT MAY CEDE UP TO, AND INCLUDING, ONE HUNDRED PERCENT OF TOTAL DIRECT CEDEABLE WRITTEN PREMIUMS ON SOUTH CAROLINA AUTOMOBILE INSURANCE AS REPORTED IN THE MOST RECENTLY FILED ANNUAL STATEMENT OF THE INSURER OR GROUP, PROVIDE THAT A PRIMA FACIE CASE OF EXCESSIVE OR UNREASONABLE UTILIZATION IS ESTABLISHED UPON A SHOWING THAT AN AUTOMOBILE INSURER OR A GROUP OF INSURERS UNDER THE SAME MANAGEMENT HAS CEDED OR IS ABOUT TO CEDE MORE THAN FIFTY PERCENT, RATHER THAN THIRTY-FIVE PERCENT, OF TOTAL DIRECT CEDEABLE WRITTEN PREMIUMS ON SOUTH CAROLINA AUTOMOBILE INSURANCE AS REPORTED IN THE MOST RECENTLY FILED ANNUAL STATEMENT OF THE INSURER OR GROUP, PROVIDE THAT A PRIMA FACIE CASE OF EXCESSIVE OR UNREASONABLE UTILIZATION OF THE FACILITY IS ESTABLISHED UPON A SHOWING THAT AN AUTOMOBILE INSURANCE INSURER OR A GROUP OF INSURERS UNDER THE SAME MANAGEMENT HAS CEDED OR IS ABOUT TO CEDE MORE THAN SIXTY-FIVE PERCENT, RATHER THAN THIRTY-FIVE PERCENT, OF TOTAL DIRECT CEDEABLE WRITTEN PREMIUMS ON SOUTH CAROLINA AUTOMOBILE INSURANCE AS REPORTED IN THE MOST RECENTLY FILED ANNUAL STATEMENT OF THE INSURER OR GROUP, PROVIDE THAT A PRIMA FACIE CASE OF EXCESSIVE OR UNREASONABLE UTILIZATION IS ESTABLISHED UPON A SHOWING THAT AN AUTOMOBILE INSURANCE INSURER OR A GROUP OF INSURERS UNDER THE SAME MANAGEMENT HAS CEDED OR IS ABOUT TO CEDE MORE THAN EIGHTY PERCENT, RATHER THAN THIRTY-FIVE PERCENT, OF TOTAL DIRECT CEDEABLE WRITTEN PREMIUMS ON SOUTH CAROLINA AUTOMOBILE INSURANCE AS REPORTED IN THE MOST RECENTLY FILED ANNUAL STATEMENT OF THE INSURER OR GROUP, AND PROVIDE FOR VARYING EFFECTIVE DATES FOR THE ABOVE CHANGES TO THE PROVISIONS OF SECTION 38-77-950; TO AMEND THE 1976 CODE BY ADDING SECTION 38-73-458 SO AS TO PROVIDE, AMONG OTHER THINGS THAT INSURERS OF PRIVATE PASSENGER AUTOMOBILE INSURANCE AND INDIVIDUAL MEMBERS OF RATING ORGANIZATIONS MAY ELECT TO FILE PRIVATE PASSENGER AUTOMOBILE INSURANCE RATES OR PREMIUM CHARGES UNDER THE "INDEX FILE AND USE" RATING METHODOLOGY; TO REQUIRE ALL INSURERS SUBJECT TO SECTION 38-77-280 TO SUBMIT RATE FILINGS TO THE DIRECTOR OF THE DEPARTMENT OF INSURANCE WITHIN TWELVE MONTHS FOLLOWING THE EFFECTIVE DATE OF THIS ACT, AND PROVIDE THAT THESE FILINGS MUST REFLECT THE RATE DECREASES, IF ANY, ATTRIBUTABLE TO THE PASSAGE OF THIS ACT; AND TO PROVIDE THAT IF ANY PROVISION OF THIS ACT OR THE APPLICATION THEREOF TO ANY PERSON OR CIRCUMSTANCE IS HELD TO BE UNCONSTITUTIONAL OR OTHERWISE INVALID, THE REMAINDER OF THIS ACT AND THE APPLICATION OF SUCH PROVISION TO OTHER PERSONS OR CIRCUMSTANCES ARE NOT AFFECTED, AND THAT IT IS TO BE CONCLUSIVELY PRESUMED THAT THE GENERAL ASSEMBLY WOULD HAVE ENACTED THE REMAINDER OF THIS ACT WITHOUT THE INVALID OR UNCONSTITUTIONAL PROVISION.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. (A) Section 38-73-1425 of the 1976 Code, as last amended by Section 783 of Act 181 of 1993, is further amended to read:
"Section 38-73-1425. Beginning January 1, 1996, and annually thereafter, The 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 must be calculated so that the projected combined ratio for risks subject to the final rate or premium charges is no more than one hundred percent. The final rate or premium charge must be filed by the Reinsurance Facility with the director for approval. Furthermore, in calculating the final rate or premium charge, it must be based upon the combined ratio of all insurers ceding private passenger automobile insurance risks to the facility."
(B) The provisions of Section 38-73-1425, as amended by Section 1(A) of this act, are effective on January 1, 1996. This rate adjustment to a projected combined ratio of one-hundred percent or less must occur evenly over a two-year period beginning on January 1, 1996. On January 1, 1996, the first year of the two-year period begins for the rate adjustment and the two equal portions of this rate adjustment shall be based upon the losses or combined ratios reported by the facility on or about October 1, 1995. On January 1, 1997, the beginning of the last year of the two-period, the final rate or premium charge for a private passenger automobile insurance risk ceded to the facility shall include the remaining portion of the rate adjustment along with, but not limited to, those adjustments, if any, for losses or combined ratios reported by the facility after October 1, 1995.
SECTION 2. Section 38-73-1420 of the 1976 Code, as added by Act 148 of 1989 and amended by Section 783 of Act 181 of 1993, is further amended to read:
"Section 38-73-1420. After June 30, 1989 1995, and annually thereafter, the Board of Governors of the South Carolina Reinsurance Facility shall authorize a licensed rating organization approved by the director to file with the director an expense component for private passenger automobile insurance rate or premium charges and after the rating organization with the largest number of members or subscribers has filed a pure loss component for private passenger automobile insurance written by those automobile insurers designated pursuant to Section 38-77-590(a), for risks written by them through producers designated pursuant to that same section with the director or his designee. Upon the approval of such component the components by the director or his designee, those automobile insurers designated pursuant to Section 38-77-590(A)(a), for risks written by them through producers designated pursuant to that same section, shall utilize these final rate or premium charges, provided that the final rate or premium charges must be discounted from the actuarially indicated rates so that the projected combined ratio for risks subject to the final rate or premium charges is one hundred fifteen percent. This rate adjustment must occur evenly over a four-year period. Pursuant to Section 38-77-610, Reinsurance Facility recoupment charges must be reduced to the extent of resulting reductions in facility operating losses. Automobile insurers designated pursuant to Section 38-77-590(A)(a) are not required to use those same final rates or premium charges for risks written through their agents not appointed pursuant to Section 38-77-590.
The cost reductions realized in operating results of the Reinsurance Facility attributable to Act 186 of 1993 must be applied exclusively to reduce the recoupment charges on all policies of private passenger automobile insurance written in the State of South Carolina."
SECTION 3. 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 in accordance with rating plans filed with and approved by the director. These rating plans may provide for different rates and rating plans among affiliated companies. The director shall approve the rating plans if the rates are not excessive, inadequate, or unfairly discriminatory. For the purpose of this section, an affiliated group of automobile insurers includes a group of automobile insurers under common ownership, management, or control. Each member of a group of affiliated insurers shall not be considered a separate insurer for purposes of compliance with the laws governing the writing, cancellation, or renewal of an automobile insurance policy. Therefore, if one company which is a member of a group of affiliated companies refuses to write, cancels, or refuses to renew a policy but, at the same time, offers to arrange insurance for the applicant or insured with another member of the same group, there has not been a refusal to write, a cancellation, or a refusal to renew by the first company. However, no insurer shall take such action unless it does so on the basis of underwriting guidelines filed with the director. The movement of a policy from one company to another within a group of affiliated companies resulting in a different rate for the insured may only occur on the renewal date of the policy. Those automobile insurers designated pursuant to Section 38-77-590(a), for automobile insurance risks written by them through producers designated by the facility governing board pursuant to that section, shall utilize the rates or premium charges developed under Section 38-73-1420 or the rates and premium charges 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, whichever is greater. However, those automobile insurers designated 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."
SECTION 4. Section 38-77-280 of the 1976 Code, as last amended by Section 810 of Act 181 of 1993, 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 may make collision coverage and either comprehensive or fire, theft, and combined additional coverage available to an insured or qualified applicant who requests the coverage.
If collision coverage is offered or provided, it 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.
If comprehensive coverage or fire, theft, and combined additional coverages are offered or provided, they 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 director or his designee. 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). 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. This 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) 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) No policy of insurance which provides automobile physical damage coverage only may be ceded to the facility.
(E) 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 with the department and approved by the director or his designee. 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) 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. In determining the premium rates to be charged on automobile insurance, it is unlawful to consider race, color, creed, religion, national origin, ancestry, residence, economic status, or income level. Nothing herein shall prevent the use of any territorial or county boundaries approved by the Department of Insurance. If the Director of the Department of Insurance, or his designee, finds that the insurer is participating in a pattern of discriminatory practices, the director, or his designee, may impose a fine on the insurer of up to two hundred thousand dollars.
(G) The Director of the Department of Insurance shall compile a comparative statistical analysis of the persons for whom physical damage coverages are written and of the persons for whom physical damage coverages are denied indicating the data for the following categories: race; sex; occupation; range of income levels; and geographical territory. This report must be furnished on an annual basis to the General Assembly. The comparative statistical analysis shall be applicable to new policies written or new requested policies by these persons and not applicable to renewal policies or policy changes.
(H) The Director of the Department of Insurance shall compile a comparative statistical analysis of the complaints received by, or filed with, the department from persons alleging discrimination when the person is denied physical damage coverages by an insurer. This report must be furnished on an annual basis to the General Assembly and it may include, but is not limited to, data for the following categories: race; sex; occupation; range of income levels; and geographical territory.
(I) For the purposes of this section, `single interest collision coverage' refers to an automobile insurance policy used in connection with an automobile sold on the installment plan or financed by a lender. It solely protects the outstanding balance due to the creditor or lender advancing money to the borrower to purchase the automobile."
SECTION 5. The 1976 Code is amended by adding:
"Section 38-77-596. Notwithstanding Section 38-77-590, upon notification to the governing board, designated producers may contract with a voluntary market outlet for any type of automobile insurance cedeable to the facility. Upon the effective date of such a contract, the designated producer may no longer write new business with a designated carrier. The producer is permitted to retain all existing policies in the facility until such time as these policies lapse, cancel, nonrenew, or cease to remain in effect for any reason. For the purposes of this section, vehicles written as an addition to a multi-car policy in the facility do not constitute `new business'."
SECTION 6. (A) Section 38-77-950 of the 1976 Code, as last amended by Act 104 of 1993 and by Section 828 of Act 181 of 1993, is further amended to read:
"Section 38-77-950. It is the intent of this chapter that the facility must not be excessively nor unreasonably utilized by automobile insurers for unfairly competitive purposes or for purposes of unfairly discriminating against certain classes or types of automobile insurance risks having the same or similar objective risk characteristics as other risks in the same class under the rating plan for the classification of risks promulgated by the department, nor for the purpose of discriminating against the risks or risks in certain rating territories. The director or his designee shall prohibit unreasonable or excessive utilization of the facility. A prima facie case of excessive or unreasonable utilization is established upon a showing that an automobile insurance insurer or a group of insurers under the same management has ceded or is about to cede more than thirty-five fifty percent of total direct cedeable written premiums on South Carolina automobile insurance as reported in the most recently filed annual statement of the insurer or group. Upon the written request of the policyholder, insurance companies doing business in this State shall give written notice to the policyholder informing him whether or not he and a driver under the policy is in the facility. Insurers shall give written notice to the policyholder of a risk ceded to the facility which does not qualify for the safe driver discount in Section 38-73-760(e).
Total direct cedeable written premiums as used in this section do not include premiums attributable to risks ceded to the facility that do not qualify for the safe driver discount in Section 38-73-760(e) for twenty-four months following October 1, 1993."
(B) The provisions of Section 38-77-950, as amended by Section 6(A) of this act, are effective on January 1, 1998.
SECTION 7. (A) Section 38-77-950 of the 1976 Code, as last amended by Act 104 of 1993 and by Section 828 of Act 181 of 1993, is further amended to read:
"Section 38-77-950. It is the intent of this chapter that the facility must not be excessively nor unreasonably utilized by automobile insurers for unfairly competitive purposes or for purposes of unfairly discriminating against certain classes or types of automobile insurance risks having the same or similar objective risk characteristics as other risks in the same class under the rating plan for the classification of risks promulgated by the department, nor for the purpose of discriminating against the risks or risks in certain rating territories. The director or his designee shall prohibit unreasonable or excessive utilization of the facility. A prima facie case of excessive or unreasonable utilization is established upon a showing that an automobile insurance insurer or a group of insurers under the same management has ceded or is about to cede more than thirty-five sixty-five percent of total direct cedeable written premiums on South Carolina automobile insurance as reported in the most recently filed annual statement of the insurer or group. Upon the written request of the policyholder, insurance companies doing business in this State shall give written notice to the policyholder informing him whether or not he and a driver under the policy is in the facility. Insurers shall give written notice to the policyholder of a risk ceded to the facility which does not qualify for the safe driver discount in Section 38-73-760(e).
Total direct cedeable written premiums as used in this section do not include premiums attributable to risks ceded to the facility that do not qualify for the safe driver discount in Section 38-73-760(e) for twenty-four months following October 1, 1993."
(B) The provisions of Section 38-77-950, as amended by Section 7(A) of this act, are effective on January 1, 1999.
SECTION 8. (A) Section 38-77-950 of the 1976 Code, as last amended by Act 104 of 1993 and by Section 828 of Act 181 of 1993, is further amended to read:
"Section 38-77-950. It is the intent of this chapter that the facility must not be excessively nor unreasonably utilized by automobile insurers for unfairly competitive purposes or for purposes of unfairly discriminating against certain classes or types of automobile insurance risks having the same or similar objective risk characteristics as other risks in the same class under the rating plan for the classification of risks promulgated by the department, nor for the purpose of discriminating against the risks or risks in certain rating territories. The director or his designee shall prohibit unreasonable or excessive utilization of the facility. A prima facie case of excessive or unreasonable utilization is established upon a showing that an automobile insurance insurer or a group of insurers under the same management has ceded or is about to cede more than thirty-five eighty percent of total direct cedeable written premiums on South Carolina automobile insurance as reported in the most recently filed annual statement of the insurer or group. Upon the written request of the policyholder, insurance companies doing business in this State shall give written notice to the policyholder informing him whether or not he and a driver under the policy is in the facility. Insurers shall give written notice to the policyholder of a risk ceded to the facility which does not qualify for the safe driver discount in Section 38-73-760(e).
Total direct cedeable written premiums as used in this section do not include premiums attributable to risks ceded to the facility that do not qualify for the safe driver discount in Section 38-73-760(e) for twenty-four months following October 1, 1993."
(B) The provisions of Section 38-77-950, as amended by Section 8(A) of this act, are effective on January 1, 2000.
SECTION 9. (A) Section 38-77-950 of the 1976 Code, as last amended by Act 104 of 1993 and by Section 828 of Act 181 of 1993, is further amended to read:
"Section 38-77-950. It is the intent of this chapter that the facility must not be excessively nor unreasonably utilized by automobile insurers for unfairly competitive purposes or for purposes of unfairly discriminating against certain classes or types of automobile insurance risks having the same or similar objective risk characteristics as other risks in the same class under the rating plan for the classification of risks promulgated by the department, nor for the purpose of discriminating against the risks or risks in certain rating territories. The director or his designee shall prohibit unreasonable or excessive utilization of the facility. A prima facie case of excessive or unreasonable utilization is established upon a showing that an automobile insurance insurer or a group of insurers under the same management has ceded or is about to cede more than thirty-five percent of total direct cedeable written premiums on South Carolina automobile insurance as reported in the most recently filed annual statement of the insurer or group. An automobile insurance insurer or a group of insurers under the same management may cede up to, and including, one hundred percent of total direct cedeable written premiums on South Carolina automobile insurance as reported in the most recently filed annual statement of the insurer or group. Upon the written request of the policyholder, insurance companies doing business in this State shall give written notice to the policyholder informing him whether or not he and a driver under the policy is in the facility. Insurers shall give written notice to the policyholder of a risk ceded to the facility which does not qualify for the safe driver discount in Section 38-73-760(e).
Total direct cedeable written premiums as used in this section do not include premiums attributable to risks ceded to the facility that do not qualify for the safe driver discount in Section 38-73-760(e) for twenty-four months following October 1, 1993."
(B) The provisions of Section 38-77-950, as amended by Section 9(A) of this act, are effective on January 1, 2001.
SECTION 10. The 1976 Code is amended by adding:
"Section 38-73-458. (A) Notwithstanding any other provision of law, insurers of private passenger automobile insurance and individual members of rating organizations may elect to file private passenger automobile insurance rates or premium charges under the `Index File and Use' rating methodology described in this section.
(B) At least sixty days before their effective dates insurers of private passenger automobile insurance shall file with the Director of the Department of Insurance, or his designee, and the Consumer Advocate proposed rates or premium charges and certify under oath that the average of the overall change in the proposed rates or premium charges for all classes, all territories, and all coverages is equal to or less than the average annual change, for the previous twelve-months, of the Consumer Price Index Medical Care published by the United States Department of Labor, Monthly Labor Review Gross Weekly Earnings published by the United States Department of Labor, and Producer Price Index Motor Vehicles and Equipment published by the United States Department of Labor. Included in each filing also must be exhibits showing what each change would be using the same twelve-months Consumer Price Index published by the United States Department of Labor. In addition, for each filing under this section, the insurer shall file the rate report, with investment income and expense exhibits, set forth in Section 38-73-465 of the 1976 Code.
(C) Filings meeting the requirements of this section are considered approved after being on file at the Department of Insurance for sixty days. However, insurers of private passenger automobile insurance may elect only to file under the `Index File and Use' rating methodology one time during a consecutive six-month period, and the medical, labor, and motor vehicles and equipment index in subsection (B) must be annualized appropriately.
(D) If the Director of the Department of Insurance, or his designee, finds that the filed proposed rates do not meet the requirements of this section he may hold an expedited hearing on the matter that need not meet the requirements of Chapter 23, Title 1, the Administrative Procedures Act. As a result of this hearing, the commissioner may order the return of the filings to insurers for failing to meet the requirements of this section.
(E) If the Director of the Department of Insurance, or his designee, finds that the rates considered approved produce excess profits described in Section 38-73-1100, he shall hold a hearing on the matter in accordance with Section 38-73-1020. As a result of this hearing, the Director of the Department of Insurance, or his designee, may order a reduction in the rates previously considered approved and order rebates as prescribed in Section 38-73-465 of the 1976 Code. However, the amount of rates subject to rebate must be no more than the difference between the filed rates as approved and what they would have been using only the Consumer Price Index referenced in this section."
SECTION 11. All insurers subject to the provisions of Section 38-77-280 of the 1976 Code shall submit rate filings to the Director of the Department of Insurance within twelve months following the effective date of this act. These filings must reflect the rate decreases, if any, attributable to the passage of this act.
SECTION 12. If any provision of the act or the application thereof to any person or circumstance is held to be unconstitutional or otherwise invalid, the remainder of this act and the application of such provision to other persons or circumstances are not affected thereby, and it is to be conclusively presumed that the legislature would have enacted the remainder of this act without such invalid or unconstitutional provision.
SECTION 13. Except as otherwise specifically provided herein, this act takes effect upon approval by the Governor.