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437Ratification Number: 300Act Number: 273Type of Legislation: General Bill GBIntroducing Body: SenateIntroduced Date: 19990203Primary Sponsor: McConnellAll Sponsors: McConnell, Matthews, Courtney, Patterson, Reese, Hayes, Jackson and PassailaigueDrafted Document Number: l:\council\bills\nbd\11118jm99.docDate Bill Passed both Bodies: 20000502Date of Last Amendment: 20000418Governor's Action: SDate of Governor's Action: 20000519Subject: Reinsurance Facility, Insurance, Motor vehicle; Joint Underwriting; advisory boards repealed, agents, educationHistory Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ ------ 20000606 Act No. A273 ------ 20000519 Signed by Governor ------ 20000516 Ratified R300 Senate 20000502 Concurred in House amendment, enrolled for ratification House 20000426 Read third time, returned to Senate with amendments House 20000425 Request for debate by Representative Knotts Whatley Koon Bales Frye ------ 20000425 Scrivener's error corrected House 20000419 Read second time House 20000418 Debate adjourned until Wednesday, 20000419 House 20000418 Amended ------ 20000417 Scrivener's error corrected House 20000412 Committee report: Favorable with 26 HLCI amendment House 20000222 Introduced, read first time, 26 HLCI referred to Committee Senate 20000217 Read third time, sent to House Senate 20000126 Read second time, notice of general amendments ------ 20000126 Scrivener's error corrected Senate 20000120 Committee report: Favorable 02 SBI Senate 19990203 Introduced, read first time, 02 SBI referred to Committee Versions of This Bill Revised on January 20, 2000 - Word format Revised on January 26, 2000 - Word format Revised on April 12, 2000 - Word format Revised on April 17, 2000 - Word format Revised on April 18, 2000 - Word format Revised on April 19, 2000 - Word format Revised on April 25, 2000 - Word format
(A273, R300, S437)
AN ACT TO AMEND SECTION 38-43-106, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CONTINUING EDUCATION REQUIREMENTS FOR INSURANCE AGENTS, SO AS TO PERMIT, RATHER THAN REQUIRE, THE DEPARTMENT OF INSURANCE TO PROMULGATE REGULATIONS PRESCRIBING THE PARAMETERS OF THE CONTINUING EDUCATION REQUIREMENTS, AND CHANGE THE COMPOSITION OF THE ADVISORY COMMITTEE; TO AMEND SECTION 38-77-580, AS AMENDED, RELATING TO THE SOUTH CAROLINA REINSURANCE FACILITY, SO AS TO CHANGE THE COMPOSITION OF THE FACILITY'S GOVERNING BOARD AND PROVIDE FOR RELATED MATTERS; TO PROVIDE THAT NOTHING INVOLVED IN THE AMENDMENT OF SECTION 38-77-580 IN THIS ACT SHALL BE CONSTRUED TO AFFECT OR CHANGE THE REPEAL OF THIS SECTION AS SCHEDULED FOR JANUARY 1, 2006; TO AMEND SECTION 38-91-130, RELATING TO THE ADVISORY BOARD FOR THE JOINT UNDERWRITING ASSOCIATION FOR PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE INSURANCE, SO AS TO CHANGE THE METHOD OF CHOOSING BOARD MEMBERS, AND PROVIDE FOR RELATED MATTERS; TO PROVIDE THAT NOTHING INVOLVED IN THE AMENDMENT OF SECTION 38-91-130 IN THIS ACT SHALL BE CONSTRUED TO AFFECT OR CHANGE (1) THE PROVISION IN SECTION 20(B) OF ACT 154 OF 1997 THAT STATES THAT CHAPTER 91 OF TITLE 38 SHALL CEASE TO BE OF ANY FORCE OR EFFECT AFTER FEBRUARY 28, 2003 OR (2) ANY OTHER PROVISION CONTAINED IN SECTION 20(B) OF ACT 154 OF 1997; AND TO REPEAL SECTION 38-77-585, RELATING TO ADDITIONAL GOVERNING BOARD MEMBERS OF THE REINSURANCE FACILITY, UPON THE EFFECTIVE DATE OF THIS ACT NOTWITHSTANDING THE PROVISIONS OF SECTION 30 OF ACT 154 OF 1997 REGARDING THE REPEAL OF ARTICLE 5, CHAPTER 77 OF TITLE 38 ON JANUARY 1, 2006.
Be it enacted by the General Assembly of the State of South Carolina:
Regulations authorized; advisory committee changed
SECTION 1. Section 38-43-106(C) of the 1976 Code, as added by Act 141 of 1991 and last amended by Act 374 of 1994, is further amended to read:
"(C) The director or his designee shall administer these continuing education requirements and shall approve courses of instruction which qualify for these purposes. In administering this program, the department, in its discretion, may promulgate regulations whereby agents provide to a continuing education administrator established within the Department of Insurance proof of compliance with continuing education requirements as a condition of license renewal or, in the alternative, contract with an outside service provider to provide recordkeeping services as the continuing education administrator. The costs of the continuing education administrator must be paid from the continuing insurance education fees paid by agents in the manner provided by this section, except that course approval responsibilities may not be designated to the continuing education administrator. The continuing education administrator shall compile and maintain, in conjunction with insurers and agents, records reflecting the continuing insurance education status of all licensed or qualified agents subject to the requirements of this section. The continuing education administrator shall furnish to the insurer, within ninety days of the agent's renewal date, as specified by regulation, a report of the continuing insurance education status of all of its agents. All licensed agents shall provide evidence of their continuing insurance education status to the continuing education administrator at least one hundred twenty days before the annual renewal date. Any continuing insurance education approved courses taken subsequent to one hundred twenty days before the renewal date must be applied to the following biennial continuing insurance education required period.
The department may promulgate regulations prescribing the overall parameters of continuing education requirements, and these regulations shall expressly authorize the director or his designee to recognize product-specific training offered by insurers, subject to those parameters and guidelines as are promulgated by the regulations. The director of the department shall appoint an advisory committee to make recommendations with respect to courses offered for approval, but the director or his designee shall retain authority with respect to course approvals, subject to those regulations as are promulgated. When the advisory committee is approved, it shall meet regularly as needed, but no less than semiannually, to review new course applications. Also, the advisory committee shall review modifications of courses previously approved and review previously promulgated regulations to make recommendations regarding any need for modifications, deletions, or new regulations. The advisory committee must be comprised of sixteen representatives. In making these appointments, the director may accept nominations for qualified individuals from the Carolina's Association of Professional Insurance Agents; the Independent Insurance Agents of South Carolina; the South Carolina Association of Automobile Insurance Agents; the South Carolina Association of Life Underwriters; the Association of South Carolina Life Insurance Companies; the Direct Writers Insurance Companies; insurers that are not members of any national insurance trade association; and any other individual, group, or trade or professional association.
Vacancies on the advisory committee must be published in newspapers of general, statewide circulation. Advisory committee members must be appointed for a term of two years each and shall serve until their successors are appointed and have qualified. Any vacancy must be filled for the unexpired term only."
Reinsurance Facility Governing Board, changed; etc.
SECTION 2. (A) Section 38-77-580 of the 1976 Code, as last amended by Section 820 of Act 181 of 1993, and as repealed effective January 1, 2006, by Act 154 of 1997, is further amended to read:
"Section 38-77-580. The operations and affairs of the facility are under the direction and control of a governing board of nineteen persons of whom four must be residents of South Carolina appointed by the Governor of South Carolina to represent consumers. The director shall appoint eight persons to represent the insurance industry. In making these appointments, the director may accept nominations for qualified individuals from the American Insurance Association, the National Association of Independent Insurers, The Alliance of American Insurers, and any other individual, group, or trade or professional association. However, of the eight persons appointed to represent the insurance industry, not less than five must be residents of South Carolina and those who are not residents of South Carolina must have job responsibilities that include the supervision over South Carolina operations; not less than two must be officers or employees of insurers licensed to transact automobile insurance in South Carolina and domiciled therein. The director shall appoint six persons to represent producers, all of whom must be residents of South Carolina. The state independent agents' association, the South Carolina Professional Auto Insurance Agents' Association, the state professional insurance agents' association, and any other individual, group, or insurance agent, trade, or professional association may nominate qualified candidates for appointment. Vacancies on the board must be published in newspapers of general, statewide circulation.
In addition, the Consumer Advocate is an ex-officio member of the governing board of the Reinsurance Facility. No person who is associated with any business within the meaning of Section 8-13-20, which is either subject to regulation by the Department of Insurance or which provides goods or services to the facility for compensation, is eligible for appointment to the board to represent consumers, except that any person serving on the board representing consumers on the effective date of this provision who would otherwise be disqualified from serving based on this provision may continue to serve for the remainder of his current term.
The director is chairman of the board, ex officio, but has no vote except in the case of a tie. The director, or his designated representative, shall preside over all meetings which must be held not less than quarterly in South Carolina at the times and places the director designates. However, upon the filing with the director of a request for a meeting signed by not fewer than five members of the board and specifying the subjects to be discussed at the proposed meeting, the director shall call a special meeting of the board to be held not less than fifteen nor more than thirty days after receipt of the request. Notice, in writing, of the special meeting must be provided to members of the board.
Members of the board shall serve two years or until their successors are appointed and have qualified. Any vacancy must be filled for the unexpired term only. The director may receive nominations from any individual, group, or insurance agent trade or professional association for any vacancy.
Amendment of the plan of operation may be made only at the annual meeting of the board or at a special meeting called by the director for that purpose and so specified in the notice of meeting. Amendments of the plan require the affirmative vote of two-thirds of all the board members and are subject to the approval of the director or his designee. The director or his designee may approve amendments only if they are consistent with the purposes of this chapter. If the consumer-representative members of the board unanimously dissent from a proposed amendment and specify their reasons for dissent in writing, the director or his designee may not approve the amendment until after a public hearing addressed to the reasons for the dissent. The director may make provision for voting by proxy at meetings.
The director or his designee, through the department, may propose to the board any amendment to or modification of the plan that the director or his designee considers to be necessary to render the plan reasonable or consistent with the purposes of this chapter, specifying in writing the reasons for any proposed amendment or modification. In the event that the board fails to adopt his proposed amendment or modification, the director or his designee may, after notice and public hearing addressed to the reasons for the proposed amendment or modification, promulgate the amendment or modification considered necessary to render the plan reasonable or consistent with the purposes of this chapter."
(B) Nothing contained in subsection (A) of this section shall be construed to affect or change the repeal of Section 38-77-580 of the 1976 Code as scheduled for January 1, 2006, pursuant to Act 154 of 1997.
SECTION 3. (A) Section 38-91-130(a) of the 1976 Code, as added by Section 20(A) of Act 154 of 1997, is amended to read:
"(a) Within ninety days after the effective date of this section, the director or his designee shall call the first or organizational meeting of the association and seat an advisory board (hereinafter referred to as the board).
The initial board shall consist of three individuals who are licensed agents or brokers and four consumer representatives to be appointed by the director or his designee, five association members, the Consumer Advocate or his designee, the director of Public Safety or his designee, and one member from the Department of Insurance. The representative from the Department of Insurance shall be a nonvoting board member. All board members, other than the director of the Department of Public Safety or his designee and the Consumer Advocate or his designee, must be appointed by the director or his designee.
The American Insurance Association, the Alliance of American Insurers, and the National Association of Independent Insurers and any individual, group, or insurance agent trade or professional association may nominate qualified individuals for consideration. Vacancies on the board must be published in newspapers of general, statewide circulation.
The terms of office for the initial and subsequent members of the board shall be as provided in the plan of operation. Members of the board must be appointed for the terms specified in the plan and shall serve until their successors are appointed and qualify. Any vacancy must be filled for the unexpired term only. Such plan shall provide for the appointment by the director of three individuals who are licensed as agents or brokers in this State. The board shall elect a chairperson who is not an insurer representative.
No more than one representative of a domestic insurer may serve on the board at any one time. No insurer may serve on the board if such insurer is a servicing carrier for the association or is a member of a group of insurers which has one insurer as a servicing carrier unless the carrier or group of carriers participates in the voluntary automobile market with a level at least twice the premium level for the Associated Auto Insurers Plan. If a servicing contract is awarded mid-term, then the affected representative must resign at the next board meeting."
(B) Nothing contained in subsection (A) of this section shall be construed to affect or change (1) the provision of Section 20(B) of Act 154 of 1997 that Chapter 91 of Title 38 of the 1976 Code shall "cease to be of any force or effect after February 28, 2003" or (2) any other provision contained in Section 20(B) of Act 154 of 1997.
SECTION 4. Notwithstanding the provisions of Section 30 of Act 154 of 1997 regarding the repeal of Article 5, Chapter 77 of Title 38 of the 1976 Code on January 1, 2006, Section 38-77-585 is repealed upon the effective date of this act.
SECTION 5 This act takes effect upon approval by the Governor.
Ratified the 16th day of May, 2000.
Approved the 19th day of May, 2000.
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