South Carolina General Assembly
113th Session, 1999-2000

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Bill 437


Indicates Matter Stricken
Indicates New Matter


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

Indicates Matter Stricken

Indicates New Matter

AMENDED

April 19, 2000

S. 437

Introduced by Senators McConnell, Matthews, Courtney, Patterson, Reese, Hayes, Jackson and Passailaigue

S. Printed 4/19/00--H. [SEC 4/25/00 1:14 PM]

Read the first time February 22, 2000.

            

A BILL

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; 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.

Amend Title To Conform

Be it enacted by the General Assembly of the State of South Carolina:

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 shall 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 two sixteen representatives. from each of the following associations, groups, or categories:

(1) the Carolina's Association of Professional Insurance Agents;

(2) the Independent Insurance Agents of South Carolina;

(3) the South Carolina Association of Automobile Insurance Agents;

(4) the South Carolina Association of Life Underwriters;

(5) the Association of South Carolina Life Insurance Companies;

(6) the Direct Writers Insurance Companies;

(7) the Association of South Carolina Property and Casualty Insurance Companies; and

(8) insurers that are not members of national insurance trade associations. 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.

The advisory committee must also be comprised of one representative from the South Carolina Association of Health Underwriters.

Advisory committee members must be appointed by the director or his designee from recommendations made by the respective associations, groups, or categories to the director or his designee. 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."

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 appointing these persons, the director shall select two from a list of not less than five nominated by the American Insurance Association from the officers or employees of insurers licensed in South Carolina and which are members or subscribers of that organization; he shall select two from a list of not less than five persons nominated by the American Mutual Insurance Alliance from the officers or employees of insurers licensed in South Carolina and which are members or subscribers of that organization; he shall select two from a list of not less than five persons nominated by the National Association of Independent Insurers from the officers or employees of insurers licensed in South Carolina and which are members or subscribers of that organization; he shall select two persons, one of whom must be an officer or employee of a stock insurer licensed in South Carolina and not a member or subscriber of any of these organizations, and one of whom must be an officer or employee of a nonstock insurer licensed in South Carolina and not a member or subscriber of any of these organizations; 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 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 four six persons to represent producers, all of whom must be residents of South Carolina;. he shall select two such persons from a list of not less than five nominated by the stock agents' association and two from a list of not less than five persons nominated by the mutual agents' association. 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.

The director shall appoint two persons to represent the designated agents one of whom must be an officer of a premium service finance company and the other of whom must be a designated agent and both of whom must be residents of South Carolina. 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 one year 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."

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 act 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 will shall be a nonvoting board member. Association members will be chosen as follows:

One insurer which is a member of and selected by the American Insurance Association;

One insurer which is a member of and selected by the Alliance of American Insurers;

One insurer which is a member of and selected by the National Association of Independent Insurers;

One insurer which is not affiliated with the forgoing organizations and which is elected by such nonaffiliated insurers voting in person or by proxy;

One insurer which is a domestic appointed by the director regardless of affiliation. 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.

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