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H. 4276
STATUS INFORMATION
General Bill
Sponsors: Rep. Cato
Document Path: l:\council\bills\dka\3472dw03.doc
Introduced in the House on May 22, 2003
Currently residing in the House Committee on Labor, Commerce and Industry
Summary: Property and Casualty Insurance Personal Lines Modernization Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
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5/22/2003 House Introduced and read first time HJ-34
5/22/2003 House Referred to Committee on Labor, Commerce and Industry
HJ-34
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 2 TO CHAPTER 73, TITLE 38 SO AS TO ENACT THE "PROPERTY AND CASUALTY INSURANCE PERSONAL LINES MODERNIZATION ACT"; TO AMEND SECTION 38-73-910, RELATING TO CONDITIONS UNDER WHICH INSURANCE PREMIUMS MAY BE RAISED, SO AS TO DELETE FIRE, ALLIED LINES, AND HOMEOWNERS' INSURANCE FROM THIS REQUIREMENT, AND TO DELETE A PROVISION AUTHORIZING A PRIVATE INSURER TO UNDERWRITE CERTAIN ESSENTIAL PROPERTY INSURANCE AND TO FILE FOR RATE INCREASE UNDER CERTAIN CIRCUMSTANCES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 73, Title 38 of the 1976 Code is amended by adding:
Section 38-73-210. This article is known as the Property and Casualty Insurance Personal Lines Modernization Act and applies only to personal lines insurance.
Section 38-73-220. (A) Except as provided in subsection (B), overall average rate level increases or decreases, for all coverages combined, of seven percent above or below the insurer's rates then in effect may take effect without prior approval on a file and use basis with respect to rates for fire, allied lines, and homeowners insurance policies. The seven percent cap does not apply on an individual insured basis.
(B) Notwithstanding any other provisions of this article, for any policies governed by this section, filings that produce rate level changes within the limitation specified in subsection (A) become effective without prior approval. No more than two rate increases within the limitation specified in subsection (A) may be implemented during any twelve-month period and the second rate increase filing in the twelve-month period is subject to prior approval.
(C) A rate increase or decrease falling within the limitation in subsection (B) may become effective not less than thirty days after the date of the filing with the director. The filing is considered to meet the requirements of this article. If the director finds that this filing is not in compliance with this article, he shall issue a written order specifying in detail the provisions with which the insurer has not complied and state a reasonable period in which the filing is considered no longer effective. An order by the director pursuant to this section that is issued more than thirty days from the date on which the director received the rate filing is on a prospective basis only and does not affect any contract issued or made before the effective date of the order.
(D) Rate filings falling outside the limitation specified in subsection (B) are subject to the prior approval of the director. The director shall approve or disapprove these filings in accordance with the provisions of Sections 38-73-960 and 38-73-990."
SECTION 2. Section 38-73-910(A) of the 1976 Code is amended to read:
"(A) No An increase in the premium rates may not be granted for workers' compensation, fire, allied lines, and homeowners' insurance, nor for any other line or type of insurance with respect to which the director or his designee has, by order, made a finding that (a) legal or other compulsion upon the part of the insured to purchase the insurance interferes with competition, or (b) under prevailing circumstances there does not exist substantial competition, unless notice is given in all newspapers of general, statewide circulation at least thirty days in advance of the insurer's proposed effective date of the increase in premium rates. The notice shall must state the amount of increase, the type and line of coverage, and the proposed effective date and shall must allow any insured or affected party to request within fifteen days a public hearing upon the propriety of the rate increase request before the Administrative Law Judge Division. A copy of the notice must be sent to the consumer advocate.
However, the requirements of public notices and public hearings in this section do not apply to applications for rate increases when the applicant insurer had earned premiums in this State in the previous calendar year of less than two million dollars for the line or type of insurance for which the rate increase is sought or, if the rate increase is sought by a rating organization, the earned premiums in this State for all members and subscribers of the organization for whom an increase is sought were less than two million dollars for the previous calendar year for the line or type of insurance for which the rate increase is sought. The two million dollars must be increased by a factor equal to the increase in the consumer price index, all items, every three years.
However, a private insurer licensed to underwrite essential property insurance as defined by Section 38-75-310(1), notwithstanding any limitations included within this title, may file and use, pursuant to the provisions of Section 38-73-1095, any rates which result in insurance premium rates of ninety percent, or less, of the insurance premium rates then approved for the South Carolina Wind and Hail Underwriting Association for use within the coastal area of South Carolina as defined by Section 38-75-310(5)."
SECTION 3. This act takes effect ninety days after approval by the Governor.
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