Current Status Bill Number:3267 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19970121 Primary Sponsor:Scott All Sponsors:Scott Drafted Document Number:bbm\10977jm.97 Residing Body:House Date Tabled:19970218 Current Committee:Labor, Commerce and Industry Committee 26 HLCI Subject:Homeowner's insurance policy, prohibited to cancel after mortgage loan approved; Property, Insurance
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
House 19970218 Tabled in Committee 26 HLCI
House 19970121 Introduced, read first time, 26 HLCI
referred to Committee
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TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 38-75-735 SO AS TO PROHIBIT AN INSURER FROM CANCELING A HOMEOWNER'S INSURANCE POLICY AFTER A MORTGAGE LOAN HAS BEEN APPROVED, WITH RESPECT TO THE PROPERTY THAT IS THE SUBJECT OF SUCH MORTGAGE LOAN, FOR A CERTAIN PERIOD, PROHIBIT AN INSURER FROM CANCELING ANY EXISTING HOMEOWNER'S INSURANCE POLICY ON PROPERTY ALREADY OWNED BY THE PERSON WHO HAS APPLIED FOR THE MORTGAGE LOAN WITH RESPECT TO NEWLY-ACQUIRED PROPERTY, PROVIDE FOR PENALTIES, AND PROVIDE THAT NOTHING IN THIS SECTION MAY BE CONSTRUED TO LIMIT OR SUPERSEDE THE RIGHT OF THE PROPERTY OWNER OR MORTGAGE LOAN APPLICANT TO BRING A CIVIL ACTION FOR DAMAGES AGAINST THE INSURER.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 38-75-735. Notwithstanding any other provision of law, no insurer authorized to do business in this State may cancel a homeowner's insurance policy after a mortgage loan has been approved, with respect to the property that is the subject of such mortgage loan, for a period of one year commencing from the date of the issuance of the policy unless the cancellation is requested by the homeowner; nor may such an insurer cancel any existing homeowner's insurance policy on property already owned by the person who has applied for the mortgage loan under this section with respect to newly-acquired property unless the cancellation is requested by the homeowner.
The license to do business in this State of an insurer who violates the provisions of this section must be suspended for a period of six months. The penalty provided for in this paragraph is in addition to, and not in lieu of, any other penalty provided by law for such action of the insurer, and nothing contained in this paragraph may be construed to limit or supersede the right of the property owner or mortgage loan applicant to bring a civil action for damages against the insurer."
SECTION 2. This act takes effect upon approval by the Governor.