Current Status Bill Number:3792 Ratification Number:329 Act Number:291 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19970401 Primary Sponsor:Cato All Sponsors:Cato and Walker Drafted Document Number:bbm\9253jm.97 Companion Bill Number:755 Date Bill Passed both Bodies:19980402 Date of Last Amendment:19980324 Governor's Action:S Date of Governor's Action:19980420 Subject:Insurance casualty and surety rates, assigned risks; voluntary market; Property, inland marine, rating organizations
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
------ 19980423 Act No. A291
------ 19980420 Signed by Governor
------ 19980414 Ratified R329
House 19980402 Concurred in Senate amendment,
enrolled for ratification
Senate 19980331 Read third time, returned to House
with amendment
Senate 19980324 Read second time, ordered to
third reading with notice of
general amendments
Senate 19980324 Committee amendment adopted
Senate 19980319 Committee report: Favorable with 02 SBI
amendment
Senate 19980224 Introduced, read first time, 02 SBI
referred to Committee
House 19980220 Read third time, sent to Senate
House 19980219 Request for debate withdrawn
by Representative Loftis
House 19980219 Read second time, unanimous consent
for third reading on the next
Legislative day
House 19980219 Amended
House 19980219 Request for debate withdrawn
by Representative Kelley
Kennedy
Moody-
Lawrence
Stuart
Carnell
Stoddard
Rodgers
Koon
House 19980218 Committee report: Favorable with 26 HLCI
amendment
House 19980115 Recommitted to Committee 26 HLCI
House 19980114 Debate interrupted by adjournment
House 19970528 Debate adjourned until
Tuesday, 19970603
House 19970521 Request for debate by Representative Spearman
Koon
Carnell
Moody-
Lawrence
Kennedy
Stuart
Rodgers
Kelley
Loftis
Stoddard
House 19970515 Committee report: Favorable with 26 HLCI
amendment
House 19970401 Introduced, read first time, 26 HLCI
referred to Committee
View additional legislative information at the LPITS web site.
(A291, R329, H3792)
AN ACT TO AMEND SECTION 38-73-540, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CASUALTY AND SURETY INSURANCE RATES AND ASSIGNED RISK, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT INSURERS PARTICIPATING IN THE VOLUNTARY MARKET SHALL PARTICIPATE IN CERTAIN MECHANISMS AND SHALL PAY THEIR ASSESSMENTS AND THAT THE ASSIGNED RISK PLAN ADMINISTRATOR SHALL MAINTAIN NECESSARY RATE-MAKING DATA IN ORDER TO PERMIT THE ACTUARIAL DETERMINATION OF RATES AND RATING PLANS APPROPRIATE FOR THE BUSINESS INSURED THROUGH THE PLAN; TO AMEND SECTION 38-73-1210, AS AMENDED, RELATING TO PROPERTY, CASUALTY, INLAND MARINE, AND SURETY INSURANCE RATES, RATING ORGANIZATIONS, AND THE PROVISION THAT MEMBERS OF A RATING ORGANIZATION ARE NOT REQUIRED TO FILE INDIVIDUALLY, SO AS TO AUTHORIZE A RATING ORGANIZATION TO COLLECT, COMPILE, AND DISSEMINATE TO INSURERS COMPILATIONS OF PAST AND CURRENT PREMIUMS OF INSURERS; AND TO PROVIDE THAT NOTHING CONTAINED IN THIS ACT APPLIES TO SELF-INSURERS.
Be it enacted by the General Assembly of the State of South Carolina:
Participation in voluntary market; payment offers; etc.
SECTION 1. Section 38-73-540 of the 1976 Code, as last amended by Act 451 of 1996, is further amended to read:
Section 38-73-540. (A)(1) Assigned risk agreements may be made among insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but who are unable to procure, insurance through ordinary methods, and the insurers may agree among themselves on the use of reasonable rate modifications for this insurance. Such residual market agreement and any mechanism designed to implement such agreement, and any amendments thereto, must be submitted in writing to the director or his designee for approval prior to use, together with such additional information as the director or his designee may reasonably require. Insurers that participate in the voluntary market shall participate in these mechanisms and shall pay their assessments, if any.
(2) If, after a hearing, the director or his designee finds that any activity or practice of insurers participating in the residual market mechanism is unfair, unreasonable, or otherwise inconsistent with the provisions of this title, the director or his designee must issue a written order specifying in what respects such activity or practice is unfair, unreasonable, or otherwise inconsistent with the provisions of this title and require the discontinuance of such activity or practice. The director or his designee may establish, by written order, an assigned risk plan or mechanism if he finds that insurers have failed to agree pursuant to subsection (A)(1), or to implement assigned risk agreements if the director or his designee finds that the existing residual market mechanism is unfair, unreasonable, or inconsistent with the provisions of this chapter.
(3) The servicing carriers for the workers' compensation assigned risk pool may be competitively bid as provided for in this subsection. If the workers' compensation assigned risk pool is competitively bid, then the director or his designee must appoint a committee or committees of individuals as he considers qualified to establish standards and procedures for the consideration and evaluation of bids. Insurers, or other vendors in conjunction with a licensed workers' compensation insurer, may submit bids. The committee or committees must evaluate and award contracts pursuant to the bidding process established by the committee or committees, subject to the final approval of the director or his designee. The director may require a bid fee to cover the expenses of implementing this section.
(4) Notwithstanding any other provision of this section or of this article, assigned risk pools must accept a policy of workers' compensation insurance on the basis that it provides coverage to a vendor who provides logging services to a named insured or on the basis that the policy provides coverage to an association of these vendors.
(B) Notwithstanding the provisions of subsection (A), no insurer may act as a servicing carrier for any assigned risk pool for workers' compensation insurance authorized pursuant to subsection (A) unless such insurer participates in the voluntary market for workers' compensation insurance in this State.
(C) It is essential for maintaining the viability of the assigned risk plan to establish and maintain rates at a level which permits the plan to operate as a self-funded mechanism. The plan administrator shall maintain necessary rate making data in order to permit the actuarial determination of rates and rating plans appropriate for the business insured through the plan. All assigned carriers shall report their experience on business written under the plan to the plan administrator in a format prescribed by the plan administrator. The plan administrator shall monitor rate adequacy and plan results and shall notify the director of the Department of Insurance in the event that excessive losses are indicated so as to enable the director to take corrective action.
Dissemination of past, current premiums
SECTION 2. Section 38-73-1210 of the 1976 Code, as last amended by Section 783 of Act 181 of 1993, is further amended to read:
"Section 38-73-1210. (A) An insurer may satisfy its obligation to make required filings by becoming a member of, or a subscriber to, a licensed rating organization which makes filings and by authorizing the director or his designee to accept the filings on its behalf. However, notwithstanding any other provisions of this article, no member or subscriber may, within twelve months after its membership or subscribership, adopt any rate approved for use for the rating organization if the rate is more than the rate in use by the member or subscriber prior to its membership or subscribership in the rating organization. Further, notwithstanding the provisions of Sections 38-73-1300, 38-73-1310, and 38-73-1320, no member or subscriber within twelve months after its membership or subscribership may be granted an upward deviation from its rate in use when becoming a member or subscriber. However, if a rate increase for the rating organization is approved within twelve months after an insurer becomes a member or subscriber, the member or subscriber may increase its rates by the same percentage of increase granted the rating organization. Nothing contained in this chapter may be construed as requiring any insurer to become a member of or a subscriber to any rating organization.
(B) In addition to other activities not prohibited by this chapter, a rating organization may collect, compile, and disseminate to insurers compilations of past and current premiums of insurers."
Act does not apply to self-insurers
SECTION 3. Nothing contained in this act applies to self-insurers.
Time effective
SECTION 4. The provisions of Section 38-73-540(A)(1) and (2), as amended by and contained in SECTION 1 of this act, take effect for insurance policies written or renewed on or after January 1, 2000. Section 38-73-540(C), as added by SECTION 1 of this act, and SECTION 2 of this act take effect no later than December 31, 1999.
Approved the 20th day of April, 1998.