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310Type of Legislation: General Bill GBIntroducing Body: SenateIntroduced Date: 19990114Primary Sponsor: SaleebyAll Sponsors: Saleeby, McConnell, PassailaigueDrafted Document Number: l:\council\bills\nbd\11000jm99.docResiding Body: SenateCurrent Committee: Banking and Insurance Committee 02 SBISubject: Insurance agents, brokers; resident and countersignature provisions revisedHistory Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ Senate 19990114 Introduced, read first time, 02 SBI referred to Committee Versions of This Bill
TO AMEND SECTION 38-43-60, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO RESIDENT INSURANCE AGENTS, COUNTERSIGNATURE REQUIREMENT, AND EXCEPTIONS, SO AS TO PROVIDE THAT BUSINESS DONE IN THIS STATE BY INSURERS MUST BE TRANSACTED BY THEIR REGULARLY AUTHORIZED AGENTS LICENSED IN THIS STATE AND TO ELIMINATE THE REQUIREMENT THAT THE AGENTS ACTUALLY RESIDE IN SOUTH CAROLINA, DELETE THE REQUIREMENTS PROVIDING THAT ALL INSURANCE POLICIES, EXCEPT HEALTH AND ACCIDENT AND LIFE INSURANCE POLICIES AND CERTIFICATES ISSUED UNDER GROUP INSURANCE POLICIES, MUST BE PERSONALLY OR MECHANICALLY COUNTERSIGNED ON BEHALF OF THE AGENT, AND DELETE THE PROVISION THAT AN INSURER MAY AMEND OR REPLACE ITS OUTSTANDING POLICIES WITH A NEWLY REVISED POLICY FORM OR NECESSARY ENDORSEMENTS WITHOUT COMPLYING WITH THE COUNTERSIGNATURE REQUIREMENT; TO AMEND SECTION 38-45-30, AS AMENDED, RELATING TO THE REQUIREMENTS FOR A NONRESIDENT TO BE LICENSED AS AN INSURANCE BROKER, SO AS TO DELETE THE REQUIREMENT OF PERSONAL COUNTERSIGNATURE BY A LICENSED RESIDENT AGENT OF THE SURETY, WITH RESPECT TO THE REQUIRED FILING OF A BOND EXECUTED BY A CORPORATE SURETY LICENSED TO TRANSACT SURETY INSURANCE IN SOUTH CAROLINA; AND TO REPEAL SECTION 38-87-60 RELATING TO REGULATION AND TAXATION OF RISK RETENTION GROUPS AND PURCHASING GROUPS UNDER THE SOUTH CAROLINA INSURANCE LAWS AND THE PROVISION THAT A POLICY OF INSURANCE ISSUED TO A RISK RETENTION GROUP OR ANY MEMBER OF THAT GROUP IS NOT REQUIRED TO BE COUNTERSIGNED AS OTHERWISE PROVIDED IN SECTION 38-43-60.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 38-43-60 of the 1976 Code is amended to read:
"Section 38-43-60. All business done in this State by insurers doing the business of insurance as defined in this title must be transacted by their regularly authorized agents
residing licensed in this State or through applications of the agents , and all policies, except health and accident and life insurance policies and certificates issued under group insurance policies, must be personally or mechanically countersigned on behalf of the agent. Except as provided in Section 38-43-70, it is unlawful for a salaried officer, manager, or other representative of an insurer to transact for his company any of the business of a licensed agent for which the licensed agent received a commission, unless he himself is a bona fide resident licensed agent. No provision of this section applies to direct insurance covering the rolling stock of railroad corporations or property in transit while in possession and custody of railroad corporations or other common carriers or applies to bid bonds issued by a surety insurer in connection with any public or private contract. An insurer may amend or replace its outstanding policies with a newly revised policy form or necessary endorsements without complying with the countersignature requirement."
SECTION 2. Section 38-45-30 of the 1976 Code, as last amended by Section 672 of Act 181 of 1993, is further amended to read:
"Section 38-45-30. A nonresident may be licensed as an insurance broker by the director or his designee if the following requirements are met:
(1) filing an application on a form prescribed by the director or his designee;
(2) filing an affidavit stating he will not during the period of the license place, directly or indirectly, insurance on a risk located in this State except through licensed agents of insurers licensed to do business in this State;
(3) filing an affidavit stating he is a licensed broker in another state;
(4) paying a biennial license fee of two hundred dollars fully earned when received, not refundable;
(5) filing of a bond with the department in a form approved by the Attorney General in favor of South Carolina of ten thousand dollars executed by a corporate surety licensed to transact surety insurance in this State
and personally countersigned by a licensed resident agent of the surety. The bond must be conditioned to pay a person insured or seeking insurance through the broker who sustains loss as a result of:
(a) the broker's violation of or failure to comply with an insurance law or regulation of this State;
(b) the broker's failure to transmit properly a payment received by him, cash or credit, for transmission to an insurer or an insured; or
(c) an act of fraud committed by the broker in connection with an insurance transaction. In lieu of a bond, the broker may file with the department certificates of deposit of ten thousand dollars of building and loan associations or federal savings and loan associations located within the State in which deposits are guaranteed by the Federal Savings and Loan Insurance Corporation, not to exceed the amount of insurance, or of banks located within the State in which deposits are guaranteed by the Federal Deposit Insurance Corporation, not to exceed the amount of insurance. An aggrieved person may institute an action in the county of his residence against the broker or his surety or both to recover on the bond or against the broker to recover from the certificates of deposit, and a copy of the summons and complaint in the action must be served on the director, who is not required to be made a party to the action;
(6) paying the department, within thirty days after March thirty-first, June thirtieth, September thirtieth, and December thirty-first each year, a broker's premium tax of four percent upon the premiums approved for policies of insurers not licensed in this State. Credit may be given for tax on policies canceled flat within forty-five days of the date of approval as long as the broker certifies to the director or his designee that the business was placed in good faith and the policy was canceled at the request of the insured."
SECTION 3. Section 38-87-60 of the 1976 Code is repealed.
SECTION 4. This act takes effect upon approval by the Governor.
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