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H. 4829

STATUS INFORMATION

General Bill
Sponsors: Reps. W.D. Smith, Cooper, Young, Merrill and Mitchell
Document Path: l:\council\bills\bbm\9332htc06.doc

Introduced in the House on March 15, 2006
Currently residing in the House Committee on Ways and Means

Summary: Insurance Services Consolidation and Efficiency Act

HISTORY OF LEGISLATIVE ACTIONS

     Date      Body   Action Description with journal page number
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   3/15/2006  House   Introduced and read first time HJ-101
   3/15/2006  House   Referred to Committee on Ways and Means HJ-102
    4/6/2006  House   Member(s) request name added as sponsor: Mitchell

View the latest legislative information at the LPITS web site

VERSIONS OF THIS BILL

3/15/2006

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, ENACTING THE INSURANCE SERVICES CONSOLIDATION AND EFFICIENCY ACT BY ADDING SECTION 1-11-150 SO AS TO ESTABLISH THE STATE ACCIDENT FUND WITHIN THE STATE BUDGET AND CONTROL BOARD; TO AMEND SECTIONS 42-7-10, 42-7-20, AND 42-7-30, ALL AS AMENDED, AND ALL RELATING TO THE ESTABLISHMENT, ADMINISTRATION, AND LEGAL REPRESENTATION OF THE STATE ACCIDENT FUND, SO AS TO CONFORM THOSE MATTERS TO ITS NEW STATUS UNDER THE STATE BUDGET AND CONTROL BOARD AND TO DELETE OBSOLETE PROVISIONS, TO DIRECT THE STATE BUDGET AND CONTROL BOARD TO COMPLETE A STUDY BEFORE JULY 1, 2007, TO DETERMINE IF THE BEST INTERESTS OF THE STATE ARE SERVED BY CONTRACTING OUT THE ADMINISTRATION OF THE STATE ACCIDENT FUND AND TO AUTHORIZE THAT PROCESS BY MEANS OF COMPETITIVE BIDDING IF THE STUDY REACHES THAT CONCLUSION, TO PROVIDE THAT THE TRANSFER OF THE STATE ACCIDENT FUND TO THE STATE BUDGET AND CONTROL BOARD TAKES EFFECT JULY 1, 2006, AND TO PROVIDE FOR THIS TRANSITION.

Whereas, the State of South Carolina is self-insured for a variety of risks and perils; and

Whereas, the vast majority of the State's insurance programs are administered by the State Budget and Control Board through the insurance professionals at the Office of Insurance Services; and

Whereas, the State Accident Fund is a separate state agency responsible for workers' compensation coverage and claims for more than 670 state, municipal, and county agencies and premiums in excess of seventy million dollars; and

Whereas, the efficiency, control, oversight, management, and economy of the State's insurance program, in general, and the State Accident Fund, in particular, can be improved by consolidating all the State's risks, perils, and claims within the State Budget and Control Board; and

Whereas, in the interest of efficiency, economy, and improved oversight and management of the State's self-insurance program the responsibilities and assets of the State Accident Fund, heretofore a separate and independent state agency, are transferred to the State Budget and Control Board. Now, therefore,

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

SECTION    1.    This act may be cited as the Insurance Services Consolidation and Efficiency Act.

SECTION    2.    Article 1, Chapter 11, Title 1 of the 1976 Code is amended by adding:

"Section 1-11-150.    There is established within the State Budget and Control Board and under its management and direction a separate and distinct administrative component to manage the operations of the State Accident Fund established pursuant to Article 1, Chapter 7 of Title 42."

SECTION    3.    Section 42-7-10 of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"Section 42-7-10.    (A)    There is established as a separate agency of state government within the State Budget and Control Board a separate fund to be known as the State Accident Fund, hereinafter which may be referred to as the 'fund' or 'state fund' in this article. This fund consists of annual premium charges, recoveries from the Second Injury Fund, recoveries by subrogation and, subject to subsection (B) of this section, of all income or revenue derived from investing these funds. Receipts for the credit of the fund and expenditures from the fund must be handled in the manner provided by law governing all state funds.

(B)    One-third of the investment income generated in Fiscal Year 1990-91 and two-thirds of the income generated in Fiscal Year 1991-92 must be credited to the state fund in those years respectively. Thereafter all such All investment income on the state fund must be credited to the state fund it except that the State Treasurer may charge the state fund, and credit to the general fund, the customary investment management fee."

SECTION    4.    Section 42-7-20 of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"Section 42-7-20.    The State Accident Fund shall be is administered by a director, who may be referred to as 'director' or 'fund director' in this article, appointed by the Governor for a term of six years with the advice and consent of the Senate executive director of the State Budget and Control Board. The administration, either by contract or directly, shall provide for employment of office and field personnel necessary for the proper conduct of the business of the fund, to the extent of appropriations therefor, including the determination of the amount of and the collection of annual charges, the issuance of certificates of compliance with this article, the investigation of claims, the adjustment and payment of claims and awards, the inspection of risks, study and investigation with respect to safety provisions with recommendations to employers as to means of preventing injuries, medical examination of employees, and the prosecution of subrogation rights against any third party. The director may inspect and audit records of employers for the purpose of determining or verifying the amount of annual charges against such employers."

SECTION    5.    Section 42-7-30 of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"Section 42-7-30.    Legal representation for the State Accident Fund shall must be provided by a chief counsel and such staff attorneys as are necessary appointed by the director of the fund with the approval of the Attorney General who shall serve under the Office of the General Counsel of the State Budget and Control Board. Any extra legal services that may be required must be performed by attorneys selected by the director also with the approval of the Attorney General. Fees and expenses for nonstaff attorneys must be approved by the director approved by the State Budget and Control Board."

SECTION    6.    A.    The State Budget and Control Board shall study the fiscal impact of contracting for all administrative services performed by the State Accident Fund. The study must be completed before July 1, 2007. If from the study the board determines that the best interests of the state are served by contracting out the administrative services for the State Accident Fund it shall then proceed to procure these services from a willing and qualified vendor by means of competitive bids pursuant to the provisions of Chapter 35 of Title 11 of the 1976 Code, the South Carolina Consolidated Procurement Code.

B.    Notwithstanding the general effective date provided in this act, this section takes effect upon the approval of this act by the Governor.

SECTION    7.    Except where otherwise provided, this act takes effect July 1, 2006. On that date:

(1)    all powers, duties, contracts, real and personal property, records, archives, employees, FTE's, authorized appropriations, assets, and liabilities of the State Accident Fund and any other matters relating to the administration of the agency, are transferred to and devolved upon the State Budget and Control Board;

(2)    regulations promulgated and procedures prescribed by the State Accident Fund are continued and considered to be promulgated or prescribed by the State Budget and Control Board;

(3)    any pending matter with respect to the agency, administrative, judicial, or otherwise, civil or criminal, is unaffected by this administrative transfer except that where appropriate, parties in interest may be substituted.

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