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TO AMEND SECTION 38-39-80, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PERMISSIBLE ACTIVITIES OF AN INSURANCE PREMIUM SERVICE COMPANY, SO AS TO REQUIRE THAT THE REFUND OF PREMIUMS FOR A CANCELLED POLICY MUST BE ACCORDING TO A METHOD AT LEAST AS FAVORABLE TO THE BORROWER AS THE RULE OF 78s.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 38-39-80(e) of the 1976 Code is amended to read:
"(e) The service charge is at the rate of one percent
per each month computed on the remainder of the outstanding balance. However, in the event of cancellation by the if the borrower prior to maturity of cancels the contract before its maturity, the unearned service charge must be refunded on a short rate basis as determined by the department by a method at least as favorable to the borrower as the Rule of 78s. With respect to the service charge for a premium service agreement which that is for other than personal, family, or household purposes, the parties may contract for the payment by the debtor of a service charge at any rate , but no; except that the rate charged hereunder may not be unconscionable. 'Unconscionable' is defined as a rate substantially exceeding the usual and customary charge for financing insurance premiums."
SECTION 2. This act takes effect upon approval by the Governor.
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