Indicates Matter Stricken

Indicates New Matter

 

Committee Report

March 5, 2026

 

H. 4817

 

Introduced by Reps. Brewer, Herbkersman, Anderson, Bailey, Gatch, Gagnon, Guffey, Hager, Hixon, J. L. Johnson, Kirby, Oremus, Schuessler, C. Mitchell, Pope, M. M. Smith, Ligon, Sessions and White

 

S. Printed 3/5/26--H.

Read the first time January 13, 2026

 

________

 

The committee on House Labor, Commerce and Industry

To whom was referred a Bill (H. 4817) to amend the South Carolina Code of Laws so as to enact the "Insurance Rate Reduction and Policyholder Protection Act;" by amending Section 38-3-110, relating to, etc., respectfully

Report:

That they have duly and carefully considered the same, and recommend that the same do pass with amendment:

 

    Amend the bill, as and if amended, SECTION 3, by striking Section 38-55-172(A)(1) and inserting:

(1) A licensed residential builder or a registered residential specialty contractorlicensee or registrant with either the Residential Builders Commission or the Contractor's Licensing Board within the South Carolina Department of Labor, Licensing and Regulation shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of residential real estate on any insurance claim in connection with the repair or replacement of a roofing system.

Amend the bill further, SECTION 3, by striking Section 38-55-172(B), (C), and (D) and inserting:

    (B) A builder or contractorlicensee or registrant with either the Residential Builders Commission or the Contractor's Licensing Board shall not advertise or promise to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services. As used in this subsection, the term "promise to pay or rebate" means:

       (1) granting any allowance or offering any discount against the fees to be charged including, but not limited to, an allowance or discount in return for displaying a sign or other advertisement at the insured's premises;

       (2) paying the insured or any person directly or indirectly associated with the property any form of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value for any reason; or

       (3) advertising an activity prohibited in this section.

    (C) A person who violates a provision of subsection (A), (B), or both is guilty of a misdemeanor and may be imprisoned not more than one year, fined not more than five hundred dollars, or both. The violation is also grounds for disciplinary action by the Residential Builders Commission or the Contractor's Licensing Board. Disciplinary action may include, but is not limited to, suspension or revocation of licenses or registrations by the Residential Builders Commission or the Contractor's Licensing Board. In addition, a violation of a provision of subsection (A) or (B) also constitutes misconduct pursuant to Section 40-59-110.

    (D) The Insurance Fraud Division of the Department of Insurance may investigate and prosecute claims of fraudulent activity relating to the performance of goods or services for a roofing system pursuant to a written contract. If the investigation yields findings concerning persons or firms that providea licensee or registrant with either the Residential Builders Commission or the Contractor's Licensing Board that provides goods or services related to a roofing system and to whom the provisions of Section 40-59-25 apply, the Insurance Fraud Division shall refer the findings to the Department of Labor, Licensing and RegulationResidential Builders Commission or the Contractor's Licensing Board for use in any action against the person or firmthat licensee or registrant. For purposes of this section, such persons or firms include:

       (1) a person who also is a licensed residential builder or a registered residential specialty contractor; or

       (2) a person or firm who engages or offers to engage in the business of residential building or residential specialty contracting without first having registered with the commission or procured a license from the commission.

Amend the bill further, SECTION 5, Section 38-55-530, by adding a subsection to read:

    (F) "Undeserved economic benefit or advantage" includes, but is not limited to, a favorable insurance premium, payment schedule, insurance award, or insurance settlement.

Amend the bill further, SECTION 10, by striking Section 38-73-1095(C) and inserting:

    (C) Any insurer required to submit rates and rating plans to the director or his designee shall provide an actuarially justified discount, credit, rate differential, adjustment in deductible, or any other adjustment to reduce the insurance premium to insureds who build or retrofit a structure to comply with the requirements of the SC Uniform Construction Code or the fortified home or fortified commercial standards created by the Insurance Institute for Business and Home Safety.

Amend the bill further, SECTION 10, by striking Section 38-73-1095(F)(10) and inserting:

       (9)(10) other applicable factors requested by the insurer or rating organization or selectedestablished by order of the director involving the risk or hazard. An order issued pursuant to this section must comply with the requirements of Section 1-23-140.

        The director or his designee may conduct a study or otherwise review data concerning mitigation discounts and credits offered in the State. The department may by regulation or order: (1) establish minimum benchmark values for discounts or credits to be offered for specific mitigation measures, or (2) define how the implementation of these factors qualifyqualifies for credits or discounts based on the data or study findings. The regulation or order must specify what evidence or proof the policyholder or applicant shall present to obtain the credit or discount. An insurer applying a discount or credit that differs from the benchmark values determined by the department is required to provide relevant actuarial justification for the deviation. This section applies to policies issued or renewed after December 31, 2007.

Amend the bill further, by deleting SECTION 16 from the bill.

Amend the bill further, SECTION 17, by striking Section 38-77-280(B) and inserting:

    (B)(1) Through December 31, 2026, Anyany automobile physical damage insurance coverage deductible or policy deductible does not apply to automobile safety glass.

       (2) EveryBeginning January 1, 2027, every automobile insurer offering automobile physical damage insurance coverage mustmay offer a zero dollar deductible option for automobile safety glass.

Amend the bill further, SECTION 23, by striking Section 40-11-125 and inserting:

    Section 40-11-125. Notwithstanding another provision of this chapter, the Department of Insurance has the exclusive authority to enforce any violations related to insurance or insurance fraud arising from roofing systems contracts or the delivery of goods or services related to roofing systems as provided in Article 5, Chapter 55, Title 38. The Department of Insurance shall refer any findings of violations related to insurance fraud arising from roofing contracts or the delivery of goods or services related to roofing systems to the South Carolia Residential Builders Commission or the South Carolina Contractor's Licensing Board, whichever is appropriate, for use in any action against a licensee or registrant who is licensed or registered with either the Residential Builders Commission or the Contractor's Licensing Board.

Amend the bill further, SECTION 25, by striking Section 40-59-27 and inserting:

    Section 40-59-27.  Notwithstanding another provision of this chapter, the Department of Insurance has the exclusive authority to enforce any violations related to insurance or insurance fraud arising from roofing systems contracts or the delivery of goods or services related to roofing systems as provided in Article 5, Chapter 55, Title 38. The Department of Insurance shall refer any findings of violations related to insurance fraud arising from roofing contracts or the delivery of goods or services related to roofing systems to the South Carolina Residential Builders Commission or the South Carolina Contractor's Licensing Board, whichever is appropriate, for use in any action against the licensee or registrant.

Amend the bill further, by adding appropriately numbered SECTIONS to read:

SECTION X. Section 38-55-540 of the S.C. Code is amended to read:

 

    Section 38-55-540. (A) A person who knowingly makes a false statement or misrepresentation, and any other person knowingly, with an intent to injure, defraud, or deceive, or who assists, abets, solicits, or conspires with a person to make a false statement or misrepresentation, is guilty of a:

       (1) misdemeanor, for a first offense violation, if the amount of the economic advantage or benefit received or attempted to be received is less than onetwo thousand dollars. Upon conviction, the person must be fined not less than one hundred nor more than five hundred dollars or imprisoned not more than thirty days;

       (2) misdemeanor, for a first offense violation, if the amount of the economic advantage or benefit received or attempted to be received is onetwo thousand dollars or more but less than ten thousand dollars. Upon conviction, the person must be fined not less than two thousand nor more than ten thousand dollars or imprisoned not more than three years, or both;

       (3) felony, for a first offense violation, if the amount of the economic advantage or benefit received or attempted to be received is ten thousand dollars or more but less than fifty thousand dollars. Upon conviction, the person must be fined not less than ten thousand nor more than fifty thousand dollars or imprisoned not more than five years, or both;

       (4) felony, for a first offense violation, if the amount of the economic advantage or benefit received or attempted to be received is fifty thousand dollars or more. Upon conviction, the person must be fined not less than twenty thousand nor more than one hundred thousand dollars or imprisoned not more than ten years, or both;

       (5) felony, for a second or subsequent violation, regardless of the amount of the economic advantage or benefit received or attempted to be received. Upon conviction, the person must be fined not less than twenty thousand nor more than one hundred thousand dollars or imprisoned not more than ten years, or both.

    (B) In addition to the criminal penalties set forth in subsection (A), a person convicted pursuant to the provisions of this section must be ordered by the court to make full restitution to a victim for any economic advantage or benefit which has been obtained by the person as a result of that violation, and to pay the difference between any taxes owed and any taxes the person paid, if applicable.

 

SECTION X. Article 1, Chapter 55, Title 38 of the S.C. Code is amended by adding:

 

    Section 38-55-171.    (A)(1) A person shall be guilty of a felony known as "staging a motor vehicle collision" when such person, with intent to defraud:

           (a) causes, attempts to cause, or in any way participates in a motor vehicle collision, or any other motor vehicle accident, for the purpose of presenting any false or fraudulent claim or to obtain anything of value;

           (b) provides information in connection with a motor vehicle collision, knowing that the collision was intentionally caused, for the purpose of presenting any false or fraudulent claim or to obtain anything of value;

           (c) provides false information in connection with a motor vehicle collision that did not occur for the purpose of presenting any false or fraudulent claim or to obtain anything of value; or

           (d) attempts, assists, abets, solicits, or conspires with another to commit any of the actions described in this item.

       (2) A person who is convicted of violating the provisions of item (1) is subject to the following penalties:

           (a) for a first offense, by imprisonment for not more than ten years, fined not more than ten thousand dollars, or both;

           (b) for a second offense, by imprisonment for not less than two years nor more than ten years, fined not more than fifteen thousand dollars, or both;

           (c) for a third or subsequent offense, by imprisonment for not less than five years nor more than fifteen years, fined not more than fifteen thousand dollars, or both.

    (B) A person shall be guilty of a felony known as "aggravated staging a motor vehicle collision" when such person violates a provision in subsection (A) and the staged motor vehicle collision, directly or indirectly, results in bodily injury or death to any person.

       (1)(a) A person who is convicted of a violation of this subsection which results in moderate bodily injury, as defined by Section 16-3-600(A)(2), to any person shall be punished by imprisonment of not less than ninety days nor more than ten years, fined not more than ten thousand dollars, or both.

           (b) A person who is convicted of this item and has previously been convicted of this item or of subsection (A), must be punished by imprisonment of not less than two years nor more than fifteen years, fined not more than fifteen thousand dollars, or both.

       (2) A person who is convicted of a violation of this subsection which results in great bodily injury, as defined in Section 16-3-600(A)(1), to any person must be punished by imprisonment of not less than two years nor more than fifteen years, fined not more than fifteen thousand dollars, or both.

       (3) A person who is convicted of this subsection which results in the death of any person must be punished by imprisonment of not less than two years nor more than thirty years, fined not less than ten thousand dollars nor more than thirty thousand dollars, or both.

    (C) When restitution is requested by the State, the trial court shall hold a hearing, waivable by the defendant, to determine the amount of restitution to which each victim is entitled. After such hearing is either held or waived, the trial court shall order full restitution to all victims of the staged motor vehicle collision, including innocent drivers, innocent passengers, innocent pedestrians, insurance carriers, emergency responder agencies, and any other affected third parties.

 

SECTION X. Section 14-7-1630(A) of the S.C. Code is amended to read:

 

    (A) The jurisdiction of a state grand jury impaneled pursuant to this article extends throughout the State. The subject matter jurisdiction of a state grand jury in all cases is limited to the following offenses:

       (1) a crime involving narcotics, dangerous drugs, or controlled substances, or a crime arising out of or in connection with a crime involving narcotics, dangerous drugs, or controlled substances, including, but not limited to, money laundering as specified in Section 44-53-475, obstruction of justice, perjury or subornation of perjury, or any attempt, aiding, abetting, solicitation, or conspiracy to commit one of the aforementioned crimes, if the crime is of a multi-county nature or has transpired or is transpiring or has significance in more than one county of this State;

       (2) a crime involving criminal gang activity or a pattern of criminal gang activity pursuant to Article 3, Chapter 8, Title 16;

       (3) a crime, statutory, common law or other, involving public corruption as defined in Section 14-7-1615, a crime, statutory, common law or other, arising out of or in connection with a crime involving public corruption as defined in Section 14-7-1615, and any attempt, aiding, abetting, solicitation, or conspiracy to commit a crime, statutory, common law or other, involving public corruption as defined in Section 14-7-1615;

       (4) a crime involving the election laws, including, but not limited to, those named offenses specified in Title 7, or a common law crime involving the election laws if not superseded, or a crime arising out of or in connection with the election laws, or any attempt, aiding, abetting, solicitation, or conspiracy to commit a crime involving the election laws;

       (5) a crime involving computer crimes, pursuant to Chapter 16, Title 16, or a conspiracy or solicitation to commit a crime involving computer crimes;

       (6) a crime involving terrorism, or a conspiracy or solicitation to commit a crime involving terrorism. Terrorism includes an activity that:

           (a) involves an act dangerous to human life that is a violation of the criminal laws of this State;

           (b) appears to be intended to:

               (i) intimidate or coerce a civilian population;

               (ii) influence the policy of a government by intimidation or coercion;  or

               (iii) affect the conduct of a government by mass destruction, assassination, or kidnapping;  and

           (c) occurs primarily within the territorial jurisdiction of this State;

       (7) a crime involving a violation of Chapter 1, Title 35 of the Uniform Securities Act, or a crime related to securities fraud or a violation of the securities laws;

       (8) a crime involving obscenity, including, but not limited to, a crime as provided in Article 3, Chapter 15, Title 16, or any attempt, aiding, abetting, solicitation, or conspiracy to commit a crime involving obscenity;

       (9) a crime involving the knowing and wilful making of, aiding and abetting in the making of, or soliciting or conspiring to make a false, fictitious, or fraudulent statement or representation in an affidavit regarding an alien's lawful presence in the United States, as defined by law, if the number of violations exceeds twenty or if the public benefit received by a person from a violation or combination of violations exceeds twenty thousand dollars;

       (10) a crime involving financial identity fraud or identity fraud involving the false, fictitious, or fraudulent creation or use of documents used in an immigration matter as defined in Section 16-13-525, if the number of violations exceeds twenty, or if the value of the ascertainable loss of money or property suffered by a person or persons from a violation or combination of violations exceeds twenty thousand dollars;

       (11) a crime involving the knowing and wilful making of, aiding or abetting in the making of, or soliciting or conspiring to make a false, fictitious, or fraudulent statement or representation in a document prepared or executed as part of the provision of immigration assistance services in an immigration matter, as defined by law, if the number of violations exceeds twenty, or if a benefit received by a person from a violation or combination of violations exceeds twenty thousand dollars;

       (12) a knowing and wilful crime involving actual and substantial harm to the water, ambient air, soil or land, or both soil and land. This crime includes a knowing and wilful violation of the Pollution Control Act, the Atomic Energy and Radiation Control Act, the State Underground Petroleum Environmental Response Bank Act, the State Safe Drinking Water Act, the Hazardous Waste Management Act, the Infectious Waste Management Act, the Solid Waste Policy and Management Act, the Erosion and Sediment Control Act, the South Carolina Mining Act, and the Coastal Zone Management Act, or a knowing and wilful crime arising out of or in connection with environmental laws, or any attempt, aiding, abetting, solicitation, or conspiracy to commit a knowing and wilful crime involving the environment if the anticipated actual damages, including, but not limited to, the cost of remediation, is two million dollars or more, as certified by an independent environmental engineer who must be contracted by the Department of Health and Environmental ControlEnvironmental Services. If the knowing and wilful crime is a violation of federal law, a conviction or an acquittal pursuant to federal law for the same act is a bar to the impaneling of a state grand jury pursuant to this section;

       (13) a crime involving or relating to the offense of trafficking in persons, as defined in Section 16-3-2020, when a victim is trafficked in more than one county or a trafficker commits the offense of trafficking in persons in more than one county;  and

       (14) a crime involving a violation of the South Carolina Anti-Money Laundering Act as set forth in Chapter 11, Title 35, or a crime related to a violation of the Anti-Money Laundering Act; and

       (15) a crime involving insurance fraud including, but not limited to, a violation of the statutes under the South Carolina Omnibus Insurance Fraud and Reporting Immunity Act or a crime arising out of or in connection with insurance fraud.

 

SECTION X. Section 17-25-45(C)(2)(b) of the S.C. Code is amended to read:

 

    (C) As used in this section:

   

       (2) "Serious offense" means:

          

           (b) those felonies enumerated as follows:

		16-3-220	Lynching, Second degree
		16-3-210(C)	Assault and battery by mob, Second degree
		16-3-600(B)	Assault and battery of a high and aggravated nature
		16-3-810	Engaging child for sexual performance
		16-9-220	Acceptance of bribes by officers
		16-9-290	Accepting bribes for purpose of procuring public office
		16-11-110(B)	Arson, Second degree
		16-11-312(B)	Burglary, Second degree
		16-11-380(B)	Theft of a person using an automated teller machine
		16-13-210(1)	Embezzlement of public funds
		16-13-230(B)(3)	Breach of trust with fraudulent intent
		16-13-240(1)	Obtaining signature or property by false pretenses
		16-25-20(B)	Domestic violence, First degree
		16-25-65	Domestic violence of a high and aggravated nature
		38-55-170(1)	Presenting false claims for payment
		38-55-171(A)	Staging a motor vehicle collision
		38-55-171(B)	Aggravated staging a motor vehicle collision
		38-55-540(3), (4)&(5)	Insurance fraud
		44-53-370(e)	Trafficking in controlled substances
		44-53-375(C)	Trafficking in ice, crank, or crack cocaine
		44-53-445(B)(1)&(2)	Distribute, sell, manufacture, or possess with intent to distribute controlled substances within proximity of school
		56-5-2945	Causing death by operating vehicle while under influence of drugs or alcohol;  and

 

SECTION X. Section 40-59-110 of the S.C. Code is amended to read:

 

    Section 40-59-110. In addition to the grounds provided for in Section 40-1-110, the commission, upon a majority vote, may revoke, suspend, or restrict the license or registration of a licensee or registrant who the commission finds has committed fraud or deceit in obtaining a license or registration under this chapter or has engaged in misconduct in the practice of residential building or residential specialty contracting. For purposes of this section, misconduct includes a violation of Section 40-59-25, a violation of Section 38-55-172, or a pattern of repeated failure by a residential builder or residential specialty contractor to pay labor or material bills. For purposes of disciplinary matters, or otherwise, compliance with the construction standards adopted by the commission is prima facie evidence of compliance with applicable professional standards.

Renumber sections to conform.

Amend title to conform.

 

WILLIAM HERBKERSMAN for Committee.

 

 

statement of estimated fiscal impact

Explanation of Fiscal Impact

State Expenditure

This bill enacts the Insurance Rate Reduction and Policy Holder Protection Act and increases the fraud oversight, investigation, and enforcement the responsibilities of DOI. This includes transferring certain responsibilities from the AG and SLED to DOI. Also, the bill makes a number of changes to the protections for insurance policy holders, makes changes to the SC Safe Home Program, and increases the amount of insurance premiums taxes that will be credited to the program. Lastly, this bill makes changes to several sales and income tax provisions.

 

Department of Insurance. DOI anticipates that this bill will increase the agency's expenses to accomplish the increased fraud oversight responsibilities. In its FY 2026-27 budget request, the agency requested additional FTEs and funding to expand its Insurance Fraud Division, which would allow the agency to accomplish the responsibilities in the bill. DOI requested $1,119,745 in salary and fringe benefits for 6.0 new FTEs: 1.0 Attorney IV, 1.0 Attorney III, 1.0 Attorney II, 1.0 Paralegal, and 2.0 Program Coordinators. DOI additionally anticipates increasing the total number of SLED FTEs under contract with the agency to handle investigations for the Insurance Fraud Division. DOI expects to add an additional 1.0 SLED Lieutenant and 9.0 SLED agents at a total contract cost of $1,765,000 per year. Other recurring operating costs include satellite offices in Greenville and Charleston; outreach, advertising, and other operating costs; and software and technical infrastructure for a combined cost of $1,050,250. In total, the agency requested additional General Fund appropriations of $3,934,995 to fund these expenditures beginning in FY 2026-27. Additionally, DOI indicates that while the budget proposal covers the expected impact and increase in responsibilities as a result of this legislation, it is possible that DOI may request up to 2.0 FTEs to comply with the additional reporting requirements of this bill in future years.

 

South Carolina Law Enforcement Division. SLED anticipates that this bill will have no expenditure impact, as the provisions that transfer certain responsibilities from SLED to DOI codify the existing Memorandum of Understanding between the two agencies.

 

Office of the Attorney General. The AG indicates that this bill essentially codifies an existing Memorandum of Understanding between the AG and DOI for the investigation and prosecution of insurance fraud. Therefore, the AG anticipates that this bill will have no impact on expenditures.

 

Judicial. This bill creates a new misdemeanor for violations of provisions that restrict residential builders and contractors from certain actions related to a property owner's insurance claims. The bill also makes changes to an individual's ability to seek a court order for a subpoena related to insurance fraud investigations and makes changes to provisions on noneconomic damages in certain cases. Judicial anticipates that these changes may increase the number of civil or criminal cases that are filed, but the number of new cases that will be filed is unknown. Judicial anticipates handing any increase in court cases within existing appropriations. However, if this bill has an unanticipated significant impact on court cases, Judicial will request an increase in General Fund appropriations.

 

Department of Labor, Licensing and Regulation. LLR indicates that this bill may impact the number of referrals from DOI to regulatory boards under LLR for disciplinary actions arising from the bill. However, the potential increase in the number of referrals is unknown. We anticipate that the changes will be managed within existing appropriations. However, if the bill results in a significant increase in workload, it may impact the agency's expenses.

 

Department of Revenue. This bill will result in a minimal expenditure impact in order to update forms, the department website, perform system changes, and comply with reporting requirements. DOR indicates that the changes can be administered within existing appropriations.

 

State Revenue

SC Safe Home Insurance Premium Tax (Section 13)

Section 13 of the bill increases the insurance premiums tax amount distributed to the SC Safe Home Program from 1 percent to 5 percent. Currently, the SC Safe Home program receives premium taxes specifically from the South Carolina Wind and Hail Underwriting Association and 1 percent of insurance premium taxes. In FY 2024-25, DOI reports that the total distribution was $2,985,064, of which $706,334 was from premium taxes specifically from the South Carolina Wind and Hail Underwriting Association and $2,350,117 was from 1 percent of total insurance premiums tax collections.

Based on current insurance premiums tax growth estimates by the SC Board of Economic Advisors, we estimate that increasing the amount of insurance premium taxes that must be credited to the SC Safe Home program from 1 percent to 5 percent will transfer an additional $10,316,000 in insurance premium tax revenue from the General Fund to the SC Safe Home Program beginning in FY 2026-27.

 

Catastrophe Savings Account Income Tax Deduction (Section 18)

Section 18 of the bill amends the Catastrophe Savings Account individual income tax deduction in Section 12-6-1620(B) by expanding the allowable uses of the funds in a Catastrophe Savings Account.  The bill allows taxpayers to use the account for SC Safe Home or Insurance Institute for Business and Home Safety approved retrofits of insured residences to make them resilient to hurricanes or other wind-related damage. The bill is effective upon signature of the Governor. For the purposes of this analysis, we assume the changes will take effect in tax year 2026.

DOI reports that there were a total of 352 SC Safe Home grants for residence retrofits approved in 2023, 349 approved in 2024, and 673 approved in 2025. Based on these data, the average number of approved residential retrofits is equal to approximately 460 per year. Also, the cost of the retrofit to make a house resilient to hurricanes or other wind-related damage depends on its size as well as the number of windows and doors. Based on historical data from 2024-2025, DOI indicates that the cost of a residential retrofit varies between approximately $5,600 and $19,600 depending on the scope of the retrofit, with the average cost being approximately $15,600. Using the average number of 460 expected residential retrofits and the average cost of $15,600 per retrofit, we estimate that the total deduction amount that taxpayers may claim for SC Safe Home or Insurance Institute for Business and Home Safety approved retrofits will equal approximately $7,176,000 starting in tax year 2026. Applying an average individual income tax rate of approximately 5.21 percent for tax year 2026, this section of the bill will reduce General Fund individual income tax revenue by approximately $374,000 beginning in FY 2026-27.

 

Residential Retrofit Income Tax Credit (Section 19)

Section 19 of the bill increases the maximum amount of residence retrofit tax credit in Section 12-6-3660 from $1,000 to $2,000.  Currently, individual income taxpayers are allowed to claim a credit for costs incurred to retrofit the taxpayer's legal residence to make it more resistant to loss due to hurricane, rising floodwater, or other catastrophic windstorm events. The credit for any taxable year must not exceed the lesser of 25 percent of the cost incurred or $1,000. The bill raises the limit to $2,000. The bill is effective upon signature of the Governor, and for the purposes of this analysis, we assume the changes will take effect in tax year 2026.

In addition, taxpayers are currently allowed to also claim a tax credit for the sales taxes paid on purchases of tangible personal property to retrofit a taxpayer's legal residence pursuant to Section 12-6-3665. The income tax credit for sales taxes paid is limited to $1,500 per year. The total credit amount of up to $2,5000 for these two provisions is reported together by taxpayers to DOR.

The history of tax credits claimed and the total amount for FY 2019-20 to FY 2024-23 as reported in DOR's Annual Reports are listed below. Based on these figures, an average of 550 taxpayers claimed approximately $733,000 in tax credits per year, or an average of approximately $1,333 per return.

 

Residential Retrofit Income Tax Credit History

Fiscal Year	Returns	Total Amount	Amount Per Return
FY 2019-20	760	$923,705	$1,215
FY 2020-21	667	$811,105	$1,216
FY 2021-22	499	$661,767	$1,326
FY 2022-24	391	$576,813	$1,475
FY 2023-24	432	$692,142	$1,602
Annual Average	550	$733,106	$1,333

Source: SC Department of Revenue Annual Report

Note: Amounts include tax credits claimed for both the costs for retrofitting a residence and the sales taxes paid (Sections 12-6-3660 and 12-6-3665) reported on form TC-43.

As noted above, the current average claimed for these credits is less than the $2,500 maximum for the combined claims for retrofit costs and sales taxes associated with those costs. Based on tax returns for tax year 2023 and 2024, approximately 28 returns, or only about 5 percent, claim the maximum per year. Given that most taxpayers are not currently claiming the maximum tax credit, we anticipate that the increase in the maximum credit for costs for retrofitting a residence will be limited. Additionally, not all taxpayers will have sufficient tax liability to claim the full increase of $1,000 if earned. Based on recalculating these same tax returns, approximately 68 percent of the $1,000 increase would be used if all taxpayers currently claiming the maximum $2,500 credit claimed the full increased amount of $1,000. Therefore, we estimate that the increase in the limit for the income tax credit for residential retrofits would decrease General Fund individual income tax revenue by up to approximately $19,000 beginning in FY 2026-27.

 

Excess Insurance Premium Income Tax Credit (Section 21)

Section 21 of the bill increases the maximum individual income tax credit for excess insurance premiums paid for property and casualty insurance on a taxpayer's legal residence in Section 12-6-3670 from $1,250 to $3,000. The credit is calculated as the amount by which the premium paid exceeds 5 percent of the taxpayer's adjusted gross income. Currently, the amount earned may not exceed $1,250 in a taxable year. If the total credit exceeds the taxpayer's liability in the tax year, the credit may be carried forward for 5 succeeding tax years. This bill increases the maximum to $3,000 and is effective upon signature of the Governor. For the purposes of this analysis, we assume the increase will take effect in tax year 2026.

The following table provides a recent history of the number of returns claiming the credit and the amounts claimed by tax year.

 

Excess Insurance Premium Tax Credit History

Fiscal Year	Returns	Total Amount	Amount Per Return
FY 2019-20	2,365	$2,387,107	$1,009
FY 2020-21	2,229	$2,153,791	$966
FY 2021-22	2,152	$2,546,378	$1,183
FY 2022-24	2,079	$2,172,126	$1,045
FY 2023-24	2,074	$2,231,083	$1,076
Annual Average	2,180	$2,298,097	$1,054

Source: SC Department of Revenue Annual Report

 

DOR previously provided us with a sample of twenty tax forms for this tax credit filed with 2021 tax returns. The sample also included taxpayers with no tax liability who were not able to claim the credit, and taxpayers with carryforward credits only. Based on the sample, about 65 percent of total credits earned in a year are not claimed in the tax year due to a lack of income tax liability but are carried forward instead. Increasing the annual credit limit from $1,250 to $3,000 would allow taxpayers to earn a larger credit and claim more in the year earned if they have a sufficient tax liability. 

Based on the sample of returns, increasing the maximum tax credit per year from $1,250 to $3,000 would increase usage of the tax credit by an estimated 42 percent per year including carryforward credits. Multiplying the annual average total credits reported currently of approximately $2,298,000 by 42 percent yields an estimated increase of $965,000 in tax credits used annually, increasing the average per return from $1,054 to approximately $1,497. Although this utilization rate is higher than the average across all tax returns for a similar credit level, we anticipate that the returns claiming this credit may be different from the average taxpayer based on the nature of the credit and have used this sample to estimate the impact given that it is based on actual return data. Therefore, increasing the maximum annual excess insurance premium tax credit that can be claimed from $1,250 to $3,000 would reduce General Fund individual income tax revenue by an estimated $965,000 beginning in FY 2026-27. Any unused credit may be carried forward for five tax years, which may increase this amount in future years.

 

Sales Tax - Section 20

Section 20 of this bill establishes an annual Disaster Preparedness Sales Tax Holiday to initially be held from Friday May 2, 2026, through Sunday, May 4, 2026. In subsequent years, the sales tax holiday would be held from Friday through Sunday on the last full weekend in April. The bill specifies that emergency supply items listed in the bill that sell for $60 or less are exempt from sales tax. These items include a variety of supplies such as batteries, phone chargers, radios, and other items. In addition, portable generators and power cords are exempt from sales tax up to the first $1,000 of the sales price. The bill specifies that items normally sold in pairs or packages may not be separated to qualify for the exemption.

In order to estimate the impact of the sales tax holiday, RFA reviewed the impact of a similar sales tax holiday in Alabama. Based on the 2024 Alabama Tax Expenditures Report, published by the Alabama Legislative Services Agency, the same items exempt from a 4 percent sales tax reduced Alabama sales tax revenue by approximately $3,247,000 during the state's Severe Weather Preparedness Sales Tax Holiday, which is held from Friday through Sunday during the last full weekend in February.0F[1] Using these figures, gross sales for these tax-exempt items totaled approximately $81,175,000.

The sales tax holiday in Alabama includes different sale price limits than the limits in this bill. Items subject to the $60 price limit in this bill are subject to a $94 price limit in Alabama, and portable generators and power cords are subject to a price limit of $1,564 or less in Alabama. Overall, the price limits are approximately 64 percent of the prices allowed in Alabama. In addition, South Carolina's population is approximately 1.06 times the size of the population of Alabama. Adjusting the estimated $81,175,000 in gross sales to account for the 64 percent difference in the price limits and the population difference results in an estimated $55,087,000 in gross sales that would potentially be exempted in South Carolina in 2024. After applying growth based on inflation from 2024 to 2026, we estimate gross sales of exempt items will be approximately $59,554,000 in FY 2026-27. Applying the 6 percent sales tax rate to the fiscal year total yields approximately $3,574,000 in exempt state sales tax revenue in FY 2026-27. Of the exempt state sales tax revenue, General Fund revenue would be reduced by $2,382,000, EIA revenue would be reduced by $596,000, and HEX revenue would be reduced by $596,000 in FY 2026-27.

 

State Revenue Summary

In summary, this bill will reduce total General Fund revenue by $14,056,000, EIA revenue by $596,000, and HEX revenue by $596,000 beginning in FY 2026-27. The insurance premium tax revenue transferred from the General Fund to the SC Safe Home program would increase the Other Funds of the program by a corresponding $10,316,000 beginning in FY 2026-27. These figures are detailed below by section.

Total State Revenue Impact by Fund - FY 2026-27

	General Fund	EIA Fund	HEX Fund	Other Funds
SC Safe Home Insurance Tax (Section 13)	($10,316,000)	$0	0	$10,316,000
Individual Income Tax - Total	($1,358,000)	$0	$0	$0
Catastrophe Savings Account Deduction (Section 18)	($374,000)	$0	$0	$0
Residential Retrofit Credit (Section 19)	($19,000)	$0	$0	$0
Excess Insurance Premium Tax Credit (Section 21)	($965,000)	$0	$0	$0
Sales Tax Holiday (Section 20)	($2,382,000)	($596,000)	($596,000)	$0
Total State Revenue Impact	($14,056,000)	($596,000)	($596,000)	$10,316,000

 

Further, the bill may impact total premiums tax revenue if the provisions result in a change in the insurance premiums that are charged. However, the potential change may occur over time as insurance companies adjust to the changes in the bill. Therefore, the overall impact on premiums tax revenue is undetermined. 

Lastly, Judicial anticipates that the bill may increase the number of civil or criminal cases that are filed, which may result in a change to court fines and fees. Court fines and fees are distributed to the General Fund, Other Funds, and local funds. Therefore, this bill may result in an increase to the General Fund and Other Funds, depending upon the increase in the number of new cases filed and corresponding increase in court fines and fees.

 

 

Frank A. Rainwater, Executive Director

Revenue and Fiscal Affairs Office

 

_______

 

 

 

 

 

 

 

 

A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS SO AS TO ENACT THE "INSURANCE RATE REDUCTION AND POLICYHOLDER PROTECTION ACT;" BY AMENDING SECTION 38-3-110, RELATING TO DUTIES OF THE DIRECTOR OF THE DEPARTMENT OF INSURANCE, SO AS TO EXPAND THOSE DUTIES; BY ADDING SECTION 38-55-172 SO AS TO PROHIBIT RESIDENTIAL BUILDERS AND REGISTERED RESIDENTIAL SPECIALTY CONTRACTORS FROM CERTAIN ACTIONS MADE ON BEHALF OF OWNERS OR POSSESSORS OF RESIDENTIAL REAL ESTATE ON INSURANCE CLAIMS IN CONNECTION WITH ROOFING SYSTEM REPAIRS OR REPLACEMENTS TO PROHIBIT RESIDENTIAL BUILDERS AND REGISTERED RESIDENTIAL SPECIALTY CONTRACTORS FROM ADVERTISING OR PROMISING TO PAY OR REBATE AN INSURANCE DEDUCTIBLE AS AN INDUCEMENT TO THE SALE OF GOODS OR SERVICES, TO PROVIDE PENALTIES FOR VIOLATIONS, TO PROVIDE THE INSURANCE FRAUD DIVISION OF THE DEPARTMENT OF INSURANCE MAY INVESTIGATE CLAIMS OF FRAUDULENT ACTIVITY RELATING TO THE PERFORMANCE OF GOODS OR SERVICES FOR A ROOFING SYSTEM PURSUANT TO A WRITTEN CONTRACT AND REFER CERTAIN FINDINGS TO THE DEPARTMENT OF LABOR, LICENSING AND REGULATION; BY AMENDING SECTION 38-55-520, RELATING TO THE PURPOSE OF THE ARTICLE, SO AS TO MAKE A TECHNICAL CHANGE; BY AMENDING SECTION 38-55-530, RELATING TO DEFINITIONS, SO AS TO AMEND THE DEFINITIONS OF "AUTHORIZED AGENCY" AND "FALSE STATEMENT OR MISREPRESENTATIONS"; BY AMENDING SECTION 38-55-550, RELATING TO CIVIL PENALTIES, SO AS TO PRESCRIBE DUTIES OF THE DIRECTOR OF THE DEPARTMENT OF INSURANCE; BY AMENDING SECTION 38-55-560, RELATING TO THE INSURANCE FRAUD DIVISION, SO AS TO ESTABLISH THE INSURANCE FRAUD DIVISION IN THE DEPARTMENT OF INSURANCE AND TO PROVIDE THE DUTIES FOR THE DIVISION, THE ATTORNEY GENERAL, AND THE STATE LAW ENFORCEMENT DIVISION; BY AMENDING SECTION 38-55-570, RELATING TO NOTIFICATION OF FALSE STATEMENTS OR MISREPRESENTATIONS AND ABILITY TO SHARE INFORMATION, SO AS TO REQUIRE THE INSURANCE FRAUD DIVISION TO PROSECUTE CRIMINAL VIOLATIONS OF TITLE 38 AND ANY OTHER CRIMES RELATED TO INSURANCE, AS WELL AS DIVISION STAFF REQUIREMENTS, AND TO PROVIDE FOR INVESTIGATIVE DUTIES OF THE ATTORNEY GENERAL AND THE STATE LAW ENFORCEMENT DIVISION; BY AMENDING SECTION 38-55-590, RELATING TO ANNUAL REPORTS BY THE DIRECTOR OF THE INSURANCE FRAUD DIVISION, SO AS TO MAKE A CONFORMING CHANGE; BY AMENDING SECTION 38-73-1095, RELATING TO ESSENTIAL PROPERTY INSURANCE AND RATING PLAN FACTORS, SO AS TO PROVIDE ADDITIONAL REQUIREMENTS FOR ANY INSURER REQUIRED TO SUBMIT RATES AND RATING PLANS TO THE DEPARTMENT OF INSURANCE RELATED TO ADJUSTMENTS TO REDUCE PREMIUMS AND FOR OWNERS OF INSURABLE PROPERTY CLAIMING A CREDIT OR DISCOUNT; BY AMENDING SECTION 38-75-470, RELATING TO MEMBERSHIP OF THE ADVISORY COMMITTEE FOR THE DIRECTOR OF INSURANCE, SO AS TO PROVIDE MITIGATION OF PROPERTY LOSSES DUE TO WILDFIRE AMONG THE ISSUES TO BE CONSIDERED AND TO PROVIDE FOR TERMS OF SERVICE FOR ADVISORY COMMITTEE MEMBERS; BY AMENDING SECTION 38-75-480, RELATING TO THE LOSS MITIGATION GRANT PROGRAM, SO AS TO PROVIDE FOR WHEN GRANTS MAY BE GIVEN TO LOCAL GOVERNMENTS; BY AMENDING SECTION 38-75-485, RELATING TO THE SOUTH CAROLINA HURRICANE DAMAGE MITIGATION PROGRAM, SO AS ESTABLISH THE "SC SAFE HOME PROGRAM" AND TO ESTABLISH REQUIREMENTS; BY AMENDING SECTION 38-77-122, RELATING TO PROHIBITED FACTORS FOR ISSUING AUTOMOBILE INSURANCE POLICIES OR PREMIUM RATES, SO AS TO ADD UNINSURED AND UNDERINSURED MOTORIST CLAIMS; BY AMENDING SECTION 38-77-123, RELATING TO PROHIBITED FACTORS FOR AUTOMOBILE INSURANCE POLICY RENEWALS OR CANCELLATIONS, SO AS TO ADD UNINSURED AND UNDERINSURED MOTORIST CLAIMS; BY ADDING SECTION 38-77-145 SO AS TO PROHIBIT NONECONOMIC DAMAGES FOR PERSONS OPERATING A MOTOR VEHICLE WHILE KNOWINGLY NOT IN COMPLIANCE WITH AUTOMOBILE INSURANCE REQUIREMENTS AND TO PROVIDE EXCEPTIONS; BY AMENDING SECTION 38-77-280, RELATING TO AUTOMOBILE COLLISION AND COMPREHENSIVE INSURANCE, SO AS TO REQUIRE INSURERS TO OFFER A ZERO DOLLAR DEDUCTIBLE FOR AUTOMOBILE SAFETY GLASS AND TO PROHIBIT INSURERS FROM CONSIDERING UNINSURED OR UNDERINSURED MOTORISTS CLAIMS FOR CERTAIN INSURANCE POLICY DECISIONS; BY AMENDING SECTION 12-6-1620, RELATED TO CATASTROPHE SAVINGS ACCOUNTS, SO AS TO INCLUDE CERTAIN APPROVED RETROFITS TO PRIMARY RESIDENCES FOR HURRICANE OR WIND DAMAGE RESILIENCE, AND FOR THE DEPARTMENT OF REVENUE TO PROVIDE AN ANNUAL REPORT TO THE GENERAL ASSEMBLY; BY AMENDING SECTION 12-6-3660, RELATING TO TAX CREDITS FOR HURRICANE RESISTANT RETROFITS TO RESIDENCES, SO AS TO INCREASE THE TAX CREDIT OPTION FROM ONE THOUSAND TO TWO THOUSAND DOLLARS; BY ADDING SECTION 12-6-3662 SO AS TO ESTABLISH A "DISASTER PREPAREDNESS SALES TAX HOLIDAY" AND TO PROVIDE FOR ITS REQUIREMENTS; BY AMENDING SECTION 12-6-3670, RELATED TO TAX CREDITS FOR EXCESS PAID FOR PROPERTY AND CASUALTY INSURANCE, SO AS TO INCREASE THE CREDIT AMOUNT TO THREE THOUSAND DOLLARS; BY AMENDING SECTION 42-9-440, RELATING TO SUSPECTED FALSE STATEMENTS OR MISREPRESENTATIONS REQUIRED TO BE REPORTED TO THE INSURANCE FRAUD DIVISION, SO AS TO MAKE CONFORMING CHANGES; BY ADDING SECTION 40-11-125 SO AS TO PROVIDE THE DEPARTMENT OF INSURANCE HAS THE EXCLUSIVE AUTHORITY TO ENFORCE ANY VIOLATIONS RELATED TO INSURANCE OR INSURANCE FRAUD ARISING FROM ROOFING SYSTEMS CONTRACTS OR THE DELIVERY OF GOODS OR SERVICES RELATED TO ROOFING SYSTEMS INVOLVING LICENSEES OF THE SOUTH CAROLINA CONTRACTOR'S LICENSING BOARD; BY AMENDING SECTION 40-59-25, RELATING TO ROOFING CONTRACT CANCELLATIONS FOR INSURANCE COVERAGE DENIALS, SO AS TO REMOVE CERTAIN PROVISIONS TRANSFERRED TO THE DEPARTMENT OF INSURANCE AND TO REVISE THE PROVISIONS; BY ADDING SECTION 40-59-27 SO AS TO PROVIDE THE DEPARTMENT OF INSURANCE AS THE EXCLUSIVE AUTHORITY TO ENFORCE ANY VIOLATIONS RELATED TO INSURANCE OR INSURANCE FRAUD ARISING FROM ROOFING SYSTEMS CONTRACTS OR THE DELIVERY OF GOODS OR SERVICES RELATED TO ROOFING SYSTEMS INVOLVING LICENSEES AND REGISTRANTS OF THE SOUTH CAROLINA RESIDENTIAL BUILDERS COMMISSION; TO REQUIRE THE DIRECTOR OF THE DEPARTMENT OF INSURANCE TO SUBMIT AN ANNUAL REPORT TO THE GENERAL ASSEMBLY REGARDING THE IMPACT ON INSURANCE RATES AND REQUIRE ANNUAL TESTIMONY BEFORE THE HOUSE LABOR, COMMERCE AND INDUSTRY COMMITTEE AND THE SENATE BANKING AND INSURANCE COMMITTEE; AND TO MAKE CONFORMING OR TECHNICAL CHANGES.

 

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

 

SECTION 1.  This act may be cited as the "Insurance Rate Reduction and Policyholder Protection Act".

 

SECTION 2.  Section 38-3-110 of the S.C. Code is amended to read:

 

    Section 38-3-110.  The director or his designee has the following duties:

    (1) supervise and regulate the rates and service of every insurer in this State and fix just and reasonable standards, classifications, regulations, practices, and measurements of service to be observed and followed by every insurer doing business in this State. Nothing contained in this title authorizes or requires a review by the department or the director of any order of the director's designee or the deputy director under the Administrative Procedures Act. This item does not grant any additional authority to the director or his designee with regard to insurance rates other than the ratemaking authority specifically granted to the director or his designee, or the Department of Insurance for certain kinds of insurance in other provisions of this title;

    (2) see that all laws of this State governing insurers or relating to the business of insurance are faithfully executed and make regulations to carry out this title and all other insurance laws of this State, the enforcement or administration of which is not otherwise specifically provided for;

    (3) report to the Attorney General or other appropriate law enforcement officials criminal violations of the laws relative to the business of insurance or the provisions of this title which he considers necessary to report;

    (4) institute civil actions, either through his office or through the Attorney General, relative to the business of insurance or the provisions of this title which he considers necessary to institute.;

    (5) make legislative recommendations to the Governor and the South Carolina General Assembly based on data and market analytics on changes necessary to protect South Carolina consumers and to promote and maintain competitive and solvent insurance markets; and

    (6) recruit insurance companies to do business in this State in a manner which will promote and maintain competitive and solvent insurance markets for the citizens of this State.

    (5)(7)(a) The director may hold a public hearing at a location within the seacoast area, as defined in Section 38-75-310(7), to provide the public with information and an opportunity to discuss and offer input concerning the rates, territory, and other pertinent issues regarding the South Carolina Wind and Hail Underwriting Association. The director must provide publicized notice of the hearing at least thirty days before the date of the public hearing.

       (b) The director must engage in efforts to provide market assistance and promote consumer outreach and education to South Carolina residential property insurance consumers. These efforts may include, but are not limited to:

           (i) posting on its website information to assist consumers in understanding the general provisions of homeowners insurance policies;

           (ii) providing information on the mitigation discounts and credits available pursuant to Section 38-73-1095(C) and other provisions of Title 38, including a summary of those offered by the twenty largest homeowners property insurance issuers by premium volume;

           (iii) providing information regarding the factors that can affect premium rates;

           (iv) providing information to assist consumers in identifying insurers writing property insurance coverage in their area;

           (v) providing a listing of licensed property and casualty producers in their area; and

           (vi) providing information on catastrophe savings accounts available pursuant to Article 11, Chapter 6, Title 12.

       (c) The director must submit a report to the President of the Senate, the Speaker of the House of Representatives, the Chairman of the Senate Banking and Insurance Committee, and the Chairman of the House Labor, Commerce and Industry Committee by January thirty-first of each year regarding the status of the coastal property insurance market. The report shall be posted in an electronic format on the department's website within five days of its submission. The report shall include, but not be limited to, the following:

           (i) status of the South Carolina Wind and Hail Underwriting Association, including any recommended modifications to statutory or regulatory law regarding the operation of the South Carolina Wind and Hail Underwriting Association and its territory;

           (ii) status of operations and grants issued under the South Carolina Hurricane Damage Mitigation Program as provided for in Section 38-75-485;

           (iii) availability and affordability of coverage in the coastal area as defined in Section 38-75-310(5), including any portion of the area as it may be expanded pursuant to Section 38-75-460;

           (iv) consumer outreach and education efforts relating to coastal property insurance issues, including, but not limited to:

               (a) summary of the annual meeting as required pursuant to item (5)(7)(a); and

               (b) specific projects and efforts undertaken pursuant to item (5)(7)(b).

 

SECTION 3.  Article 1, Chapter 55, Title 38 of the S.C. Code is amended by adding:

 

    Section 38-55-172. (A)(1) A licensed residential builder or a registered residential specialty contractor shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of residential real estate on any insurance claim in connection with the repair or replacement of a roofing system.

       (2) Notwithstanding item (1) or another provision of state law, an owner is not prevented from consulting with a builder, contractor, or other person of his choice to provide an evaluation of the condition of his roofing system and using the evaluation to negotiate the repair or replacement of his roofing system.

    (B) A builder or contractor shall not advertise or promise to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services. As used in this subsection, the term "promise to pay or rebate" means:

       (1) granting any allowance or offering any discount against the fees to be charged including, but not limited to, an allowance or discount in return for displaying a sign or other advertisement at the insured's premises;

       (2) paying the insured or any person directly or indirectly associated with the property any form of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value for any reason; or

       (3) advertising an activity prohibited in this section.

    (C) A person who violates a provision of subsection (A), (B), or both is guilty of a misdemeanor. The violation is grounds for suspension or revocation of licenses or registrations by the Residential Builders Commission.

    (D) The Insurance Fraud Division of the Department of Insurance may investigate claims of fraudulent activity relating to the performance of goods or services for a roofing system pursuant to a written contract. If the investigation yields findings concerning persons or firms that provide goods or services related to a roofing system and to whom the provisions of Section 40-59-25 apply, the Insurance Fraud Division shall refer the findings to the Department of Labor, Licensing and Regulation for use in any action against the person or firm. For purposes of this section, such persons or firms include:

       (1) a person who also is a licensed residential builder or a registered residential specialty contractor; or

       (2) a person or firm who engages or offers to engage in the business of residential building or residential specialty contracting without first having registered with the commission or procured a license from the commission.

 

SECTION 4.  Section 38-55-520 of the S.C. Code is amended to read:

 

    Section 38-55-520. The purpose of this article is to confront aggressively the problem of insurance fraud in South Carolina by facilitating the detection of insurance fraud; to allow reporting of suspected insurance fraud; to grant immunity for reporting suspected insurance fraud; to prescribe penalties for insurance fraud; to require restitution for victims of insurance fraud; to establish a division within the Office of the Attorney General Department of Insurance to prosecute insurance fraud; and to require the investigation of alleged insurance fraud by State Law Enforcement Division.

SECTION 5.  Section 38-55-530 of the S.C. Code is amended to read:

 

    Section 38-55-530. As used in this article:

    (A) "Authorized agency" means any duly constituted criminal investigative department or agency of the United States or of this State; another state; the Department of Insurance; the Department of Revenue; the Department of Public Safety; the Department of Motor Vehicles; the Workers' Compensation Commission; the State Accident Fund; the Second Injury Fund; the Department of Employment and Workforce; the Department of Consumer Affairs; the Human Affairs Commission; the Department of Health and Environmental ControlPublic Health; the Department of Environmental Services; the Department of Social Services; the Department of Health and Human Services; the Department of Labor, Licensing and Regulation; all other state boards, commissions, and agencies; the Office of the Attorney General of South Carolina; or the prosecuting attorney of any judicial circuit, county, municipality, or political subdivision of this State or of the United States, and their respective employees or personnel acting in their official capacity.

    (B) "Insurer" shall have the meaning set forth in Section 38-1-20(25) and includes any authorized insurer, self-insurer, reinsurer, broker, producer, or any agent thereof.

    (C) "Person" means any natural person, company, corporation, unincorporated association, partnership, professional corporation, or other legal entity and includes any applicant, policyholder, claimant, medical providers, vocational rehabilitation provider, attorney, agent, insurer, fund, or advisory organization.

    (D) "False statement or misrepresentation" means a statement or representation made by a person that is false, material, made with the person's knowledge of the falsity of the statement and made with the intent of obtaining or causing another to obtain or attempting to obtain or causing another to obtain an undeserved economic advantage or benefit or made with the intent to deny or cause another to deny any benefit or payment in connection with an insurance transaction, and such shall constitute fraud. "False statement or misrepresentation" specifically includes, but is not limited to, an intentional:

       (1) false report of business activities;

       (2) miscount or misclassification by an employer of its employees;

       (3) failure to timely reduce reserves;

       (4) failure to account for Second Injury Fund reimbursements or subrogation reimbursements; or

       (5) failure to provide verifiable information to public or private rating bureaus and the Department of Insurance.;

       (6) false information on an application for insurance; or

       (7) false information regarding an insurance claim.

    An undeserved economic benefit or advantage includes, but is not limited to, a favorable insurance premium, payment schedule, insurance award, or insurance settlement.

    (E) "Immune" means that neither a civil action nor a criminal prosecution may arise from any action taken pursuant to this article unless actual malice on the part of the reporting person or gross negligence or reckless disregard for the rights of the reported person is present.

 

SECTION 6.  Section 38-55-550 of the S.C. Code is amended to read:

 

    Section 38-55-550. (A) In addition to any criminal liability, any person who is found by a court of competent jurisdiction to have violated any provision of this article, including Section 38-55-170 and Section 38-55-540, is subject to a civil penalty, to be levied by the Director of the Department of Insurance or his designee, for each violation as follows:

       (1) for a first offense, a fine not to exceed five thousand dollars;

       (2) for a second offense, a fine of not less than five thousand dollars but not to exceed ten thousand dollars;

       (3) for a third and subsequent offense, a fine of not less than ten thousand dollars but not to exceed fifteen thousand dollars.

    (B) The civil penalty must be paid to the director of the Insurance Fraud Division to be used in accordance with subsection (D) of this section. The court may also award court costs and reasonable attorneys' fees to the directorDepartment of Insurance. When requested by the director of the Department of Insurance or his designee, the Attorney General may assign one or more deputies attorneys general to assist the bureau in any civil court proceedings against the person.

    (C) Nothing in subsections (A) and (B) shall be construed to prohibit the director of the Insurance Fraud Division and the person alleged to be guilty of a violation of this article from entering into a written agreement in which the person does not admit or deny the charges but consents to payment of the civil penalty. A consent agreement may not be used in a subsequent civil or criminal proceeding relating to any violation of this article.

    (D) All revenues from the civil penalties imposed pursuant to this section must be used to provide funds for the costs of enforcing and administering the provisions of this article.

 

SECTION 7.  Section 38-55-560 of the S.C. Code is amended to read:

 

    Section 38-55-560. (A) There is established in the Office of the Attorney GeneralDepartment of Insurance a division to be known as the Insurance Fraud Division, which must prosecute criminal violations of Sections 38-55-170 and 38-55-540 and related criminal insurance activityTitle 38 and any other crimes related to insurance.  Upon receipt of any claims or allegations of violations of Section 38-55-170 and 38-55-540 and related criminal insurance activity, the Attorney General shall forward the information to the State Law Enforcement Division for investigation.To fulfill this purpose, the Attorney General shall appoint certain attorneys, employed by the Department of Insurance in the Insurance Fraud Division, including the Director of the Insurance Fraud Division, as assistant attorneys general pursuant to Sections 1-7-30 and 1-7-160. The Office of the Attorney General shall cooperate and work with the Insurance Fraud Division by providing access to and use of the Attorney General's criminal justice and prosecution resources including, but not limited to, criminal history record information and insurance claim history using systems such as Criminal Justice Information Services (CJIS), National Crime Information Center (NCIC), National Law Enforcement Telecommunications System (NLETS), Insurance Services Office (ISO), or Verisk ClaimSearch or similar government or private databases. Employees of the Insurance Fraud Division granted such access shall be subject to the same requirements and policies as employees of the Office of the Attorney General for the use of these resources. The Department of Insurance must reimburse the Office of the Attorney General for any additional costs required to access these systems for the Insurance Fraud Division.

    (B) The Attorney GeneralInsurance Fraud Division, upon receipt of any claims or allegations of violations of Sections 38-55-170 and 38-55-540 and related criminal insurance activity, or at any other time, is empowered to:

       (1) refer the matter for investigation to the State Law Enforcement Division;

       (2) present the matter to the Office of the Attorney General for review and approval of the indictment;

       (2)(3) prosecute persons determined to be in violation of Sections 38-55-170 and 38-55-540 and related criminal insurance activity in a court of competent jurisdiction;  and

       (4) resolve the matter through consent agreements in accordance with Section 38-55-550;

       (3)(5) collect fines and restitution ordered by the court. Where considered appropriate, the Attorney GeneralDepartment of Insurance may use the Setoff Debt Collection Act and any other legal means available to state agencies to collect fines and restitution ordered as a result of actions brought pursuant to Sections 38-55-170, and 38-55-540, and 38-55-550.;

       (6) refer the matter to the Attorney General for prosecution;

       (7) refer the matter to another authorized agency;

       (8) refer the matter to any affected insurer; and

       (9) enter into agreements with the Office of the Attorney General or other state, local, or federal agencies related to the deterrence, detection, investigation, and prosecution of insurance fraud.

Nothing in this section shall be interpreted to affect or undermine the criminal jurisdiction, investigative authority, or prosecutorial authority of the Office of the Attorney General or other law enforcement agencies. Subject to availability of resources and funds, the Department of Insurance shall provide State Law Enforcement Division personnel assigned to the Insurance Fraud Division secure office space within the Department of Insurance for daily use, as well as office supplies, office equipment, and furnishings. Also subject to the availability of resources and funds, the Department of Insurance shall reimburse the State Law Enforcement Division for investigative services rendered pursuant to this section. The State Law Enforcement Division shall quarterly submit an itemized bill to the Department of Insurance for the actual payroll, fringe, overtime, fuel, travel, training, and equipment for all investigators assigned to the Insurance Fraud Division pursuant to this section. The department is not liable for reimbursement for time or expenses for the performance of other duties not related to the investigation or prevention of insurance fraud. The State Law Enforcement Division may bill the Department of Insurance for initial nonrecurring expenses for additional employees hired to perform and support the work of the Insurance Fraud Division, and the department may reimburse the State Law Enforcement Division, subject to the availability of funds and approval of the department.

    (C) The State Law Enforcement Division shall investigate thoroughly review all claims or allegations of violations of Sections 38-55-170 and 38-55-540 and related criminal insurance activity received from the Attorney GeneralInsurance Fraud Division pursuant to this section and investigate such matters as deemed appropriate.

    (D) The Insurance Fraud Division of the Office of Attorney General Department of Insurance and the investigative services of the State lawLaw Enforcement Division as provided by this section must be funded by an annual appropriation of not less than two hundred thousand dollars annually sufficient to fully fund the costs of operating the division based on the positions needed to effectively investigate, prosecute, and prevent insurance fraud from the general revenues of the State. derived from the insurance premium taxes collected by the Department of Insurance and/or from fines assessed under Sections 38-55-170 and 38-55-540 which must be deposited in the general revenue fund to the credit of the Office of the Attorney General and the State Law Enforcement Division to offset the costs of this program;  provided, that the funds generated from these fines, to be utilized by either the Office of the Attorney General or the State Law Enforcement Division shall not total more than five hundred thousand dollars.  These monies must be shared equally on a fifty-fifty basis by the Office of the Attorney General and the State Law Enforcement Division, and the balance must go to the general fund of the State.Additionally, the Department of Insurance may use any fines assessed pursuant to Sections 38-55-170, 38-55-540, and 38-55-550 to offset the costs of the Insurance Fraud Division.

    (E) The Office of the Attorney General is authorized to hire, employ, and reasonably equip one forensic accountant, and this forensic accountant must be assigned to the Insurance Fraud Division of the Office of the Attorney General. A person is not qualified to be hired and the Insurance Fraud Division may not hire a forensic accountant unless he possesses and maintains a current license to engage in the practice of accounting pursuant to the provisions of Chapter 2, Title 40.The Insurance Fraud Division shall be managed by a director who must be eligible to serve as an assistant attorney general. The director of the division and attorneys hired to prosecute insurance fraud are subject to the approval of the Office of the Attorney General in accordance with Sections 1-7-30 and 1-7-160. The director of the division or his designee is authorized to employ the staff members deemed necessary and appropriate by the Director of the Department of Insurance in accordance with state budget procedures.

 

SECTION 8.  Section 38-55-570 of the S.C. Code is amended to read:

 

    Section 38-55-570. (A) Any person, insurer, or authorized agency having reason to believe that another has made a false statement or misrepresentation or has knowledge of a suspected false statement or misrepresentation shall, for purposes of reporting and investigation, notify the Insurance Fraud Division of the Office of the Attorney GeneralDepartment of Insurance of the knowledge or belief and provide any additional information within his possession relative thereto. Failure to comply with the provisions of this subsection shall be subject to the penalties described in Section 38-2-10.

    (B) Upon request by the Insurance Fraud Division and subject to the penalties described in Section 38-2-10, any person, insurer, or authorized agency shall release to the Insurance Fraud Division any or all information relating to any suspected false statement or misrepresentation including, but not limited to:

       (1) insurance policy information relevant to the investigation, including any application for such a politypolicy;

       (2) policy premium payment records, audits, or other documents which are available;

       (3) history of previous claims, payments, fees, commission, service bills, or other documents which are available; and

       (4) other information relating to the investigation of the suspected false statement or misrepresentation.

    (C) Any authorized agency provided with or obtaining information relating to a suspected false statement or misrepresentation as provided for above may release or provide the information to any other authorized agency. The Department of Insurance, the Department of Revenue, the Department of Public Safety, and the Department of Motor Vehicles shall report, but not adjudicate, all cases of suspected or reported false statement or misrepresentation to the Insurance Fraud Division of the Office of Attorney General of South CarolinaDepartment of Insurance for appropriate investigation or prosecution, or both. The Workers' Compensation Commission mayshall refer such cases as provided in Section 42-9-440.

    (D) Except as otherwise provided by law, any information furnished pursuant to this section, or any information or documentation arising out of or in connection with information furnished pursuant to this section, is privileged and shall not be part of any public record. Any information or evidence furnished to an authorized agency pursuant to this section is not subject to subpoena or subpoena duces tecum in any civil or criminal proceeding unless, after reasonable notice to any person, insurer, or authorized agency which has an interest in the information and after a subsequent hearing, a court of competent jurisdiction determines that the public interest and any ongoing investigation will not be jeopardized by obedience of the subpoena or subpoena duces tecum. The Department of Insurance may receive and must maintain as confidential any documents or information furnished to it by the National Association of Insurance Commissioners or insurance departments of other states which is classified as confidential by that association or state. The Department of Insurance may share documents or information, including confidential documents or information, with the National Association of Insurance Commissioners or insurance departments of other states, if the association or other state agrees to maintain the same level of confidentiality as is provided under South Carolina law in accordance with Section 38-55-75.  If the documents or information received by the Department of Insurance from the National Association of Insurance Commissioners or the insurance departments of other states involve allegations of insurance fraud, the documents or information must be forwarded by the Department of Insurance to the Insurance Fraud Division of the Office of the Attorney General.

 

SECTION 9.  Section 38-55-590 of the S.C. Code is amended to read:

 

    Section 38-55-590. The Director of the Insurance Fraud Division in the Office of the Attorney GeneralDepartment of Insurance shall annually report to the General Assembly regarding:

    (A) the status of matters reported to the division, if not privileged information by law;

    (B) the number of allegations or reports received;

    (C) the number of matters referred to the State Law Enforcement Division for investigation;

    (D) the outcome of all investigations and prosecutions under this article, if not privileged by law;

    (E) the total amount of fines levied by the court and paid to or deposited by the division; and

    (F) patterns and practices of fraudulent insurance transactions identified in the course of performing its duties. The director shall also periodically report this information to insurers transacting business in this State, health maintenance organizations transacting business in this State, and other persons, including the State of South Carolina, which provide benefits for health care in this State, whether these benefits are administered directly or through a third person.

 

SECTION 10. Section 38-73-1095 of the S.C. Code is amended to read:

 

    Section 38-73-1095.  (A) Any 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 any rates for the coverages detailed within Section 38-75-310(1) 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). Filings for these insurance premium rates must be made upon forms prescribed by the director or his designee and must apply only to essential property insurance premium rates for the coastal area. Within thirty days after the filing of the rates, the director or his designee must notify the insurer or rating organization filing the rates of his approval or his disapproval of those rates. If the rates are disapproved, then the director or his designee must notify the insurer or the rating organization of the specific reason for disapproval. The director or his designee may extend for up to an additional thirty days the period within which he must approve or disapprove the rates. Any rates received, which are neither approved nor disapproved by the director, must be deemed approved at the expiration of the thirty-day period or, if that period has been extended, at the expiration of the extended period. However, no insurer or rating organization may use rates considered approved under the provisions of this section unless and until the insurer or rating organization has filed a written notice of its intent to use the rates. The notice must be filed with the director or his designee at least ten days before the insurer's or rating organization's use of the deemed rates.

    (B) In considering any rate filing for insurance premium rates for essential property insurance in the coastal area or in the seacoast area, the director or his designee, in addition to other factors considered under this title, may consider past and prospective expenses and recoveries associated with catastrophe reinsurance and past and prospective loss experience including windstorm catastrophe models and simulations.

    (C) Any insurer required to submit rates and rating plans to the director or his designee shall provide an actuarially justified discount, credit, rate differential, adjustment in deductible, or any other adjustment to reduce the insurance premium to insureds who build or retrofit a structure to comply with the requirements of the SC Uniform Construction Code or the fortified home or fortified commercial standards created by the Insurance Institute for Business and Home Safety.

    (D) Any insurer required to submit rates and rating plans to the director or his designee shall provide an actuarially justified discount, credit, rate differential, adjustment in deductible, or any other adjustment to reduce the insurance premium to insureds who install mitigation improvements or retrofit their property utilizing construction techniques demonstrated to reduce the amount of loss from a windstorm or hurricane. The mitigation improvements or construction techniques shall include, but not be limited to, roof deck attachments; secondary water barriers; roof coverings; brace gable ends; construction techniques which enhance or reinforce roof strength; roof-covering performance; roof-to-wall strength, wall-to-floor-to-foundation strength; opening protection; and window, door, and skylight strength.

    (E)(1) Any insurer required to submit rating plans to the director or his designee shall provide an actuarially justified discount, credit, rate differential, adjustment in deductible, or any other adjustment to reduce the insurance premium charged to any insured who builds or retrofits a structure to comply with the requirements of the fortified home and fortified commercial standards created by the Insurance Institute for Business and Home Safety.

       (2) To obtain a credit or discount provided in this subsection, an insurable property located in this State shall be certified as constructed in accordance with the fortified home or fortified commercial standards provided by the Insurance Institute for Business and Home Safety or other standard designated by the director or his designee via order of the director.

       (3) An insurable property shall be certified as in conformance with the fortified home or fortified commercial standards only after inspection and certification by an Insurance Institute for Business and Home Safety or other certified inspector.

       (4) An owner of insurable property claiming a credit or discount shall maintain and provide certification records and construction records, including certification of compliance with the Insurance Institute for Business and Home Safety standards or other applicable standard, for which the owner seeks a discount. Such documents may include, but are not limited to, receipts for contractors, receipts for materials, and records from local building officials.

       (5) An owner of insurable property claiming a credit or discount shall maintain the Insurance Institute for Business and Home Safety certification documents, which shall be considered evidence of compliance with the fortified home or fortified commercial standards. The certification shall be presented to the insurer or potential insurer of a property owner before the adjustment becomes effective for the insurable property along with any other necessary records.

       (6) The credit or discount shall apply only to policies that provide wind coverage and may apply to the portion of the premium for wind coverage or to the total premium, if the insurer does not separate out the premium for wind coverage in the rate filing. The adjustment shall apply exclusively to the premium designated for the improved insurable property. The adjustment is not required to be in addition to other mitigation adjustments provided by the insurer and shall be in lieu of those other adjustments, if they are deemed to be duplicated.

       (7) The records required by this subsection shall be subject to audit by the director or his designee.

       (8) Nothing in this section shall prohibit insurers from offering additional adjustments in deductible, other credit rate differentials, or a combination thereof. These adjustments shall be available under the terms specified in this section to any owner who builds or locates a new insurable property in this State to resist loss due to hurricane, tornado, or other catastrophic windstorm events.

    (C)(F) Rating plans for essential property insurance in the coastal area or in the seacoast area, shall include discounts and credits or surcharges and debits calculated upon the following rating factors:

       (1) use of storm shutters;

       (2) use of roof tie downs;

       (3) construction standards;

       (4) building codes;

       (5) distance from water;

       (6) elevation;

       (7) flood insurance;

       (8) Insurance Institute for Business and Home Safety FORTIFIED ROOF;

       (8)(9) policy deductibles; and

       (9)(10) other applicable factors requested by the insurer or rating organization or selectedestablished by order of the director involving the risk or hazard. An order issued pursuant to this section must comply with the requirements of Section 1-23-140.

        The director or his designee may conduct a study or otherwise review data concerning mitigation discounts and credits offered in the State. The department may by regulation or order: (1) establish minimum discounts or credits to be offered for specific mitigation measures, or (2) define how the implementation of these factors qualify for credits or discounts based on the data or study findings. The regulation must specify what evidence or proof the policyholder or applicant shall present to obtain the credit or discount. This section applies to policies issued or renewed after December 31, 2007.

    (D)(G) This section does not preclude any insurer from using consent-to-rate pursuant to Section 38-73-1060 for any essential property insurance risk in the coastal area or the seacoast area of this State.

 

SECTION 11. Section 38-75-470 of the S.C. Code is amended to read:

 

    Section 38-75-470. (A) The Director of Insurance shall appoint an advisory committee to the director to study issues associated with the development of strategies for reducing loss of life and to address the mitigation of property losses due to hurricane, earthquake, flood, wildfire, and fire. The advisory committee also shall consider the associated costs to individual property owners. The advisory committee is composed of:

       (1) the director or his designee;

       (2) the Chairman of the Building Codes Council or his designee;

       (3) a representative from Clemson University involved with wind engineering;

       (4) a representative from an academic institution involved with the study of earthquakes;

       (5) a representative from an insurer writing property insurance in South Carolina;

       (6) a representative from the Department of Commerce;

       (7) a representative from the South Carolina's Municipal Association;

       (8) a representative from the South Carolina Association of Counties;

       (9) a representative from the Homebuilders Association;

       (10) a representative from the Manufactured Housing Institute of South Carolina;

       (11) a representative from the State Fire Marshal's office;

       (12) a representative from the South Carolina Emergency Management Division;

       (13) a representative from the State Flood Mitigation Program;

       (14) two at-large members appointed by the director;

       (15) two at-large members appointed by the Governor;

       (16) a general contractor;

       (17) a representative from the South Carolina Association of Realtors; and

       (18) a structural engineer.

    (B) Members shall serve for terms of two years and shall receive no per diem, mileage, or subsistence be appointed by the Director of Insurance and shall serve at the pleasure of the director. The term for a member is for four years and may be reappointed by the director; however, in no event shall any member serve more than three consecutive four-year terms. Members shall not receive per diem, mileage, or subsistence. Vacancies must be filled in the same manner as the original appointment.

    (C) Within thirty days after its appointment, the advisory committee shall meet at the call of the Director of Insurance. The advisory committee shall elect from its members a chairmanchair and a secretary and shall adopt rules not inconsistent with this chapter. Meetings may be called by the chairmanchair on his own initiative and must be called at the request of three or more members of the advisory committee. All members must be notified by the chairmanchair of the time and place of the meeting at least seven days in advance of the meeting. All meetings must be open to the public. At least two-thirds vote of those members in attendance at the meeting shall constitute an official decision of the advisory committee. Implementation of this program and continued existence of this program is subject to the availability of funding through legislative appropriations or alternative funding sources.

 

SECTION 12. Section 38-75-480 of the S.C. Code is amended to read:

 

    Section 38-75-480. (A) There is established within the Department of Insurance a loss mitigation grant program to aid local governments in the development of mitigation strategies to reduce certain losses. Funds may be appropriated to the grant program, and any funds appropriated must be used for the purpose of making grants to local governments or for the study and development of strategies for reducing loss of life and mitigating property losses due to hurricane, flood, earthquake, and fire. Grants to local governments must be for the following purposes:

       (1) mitigating losses for eligible residential properties within the local jurisdiction in accordance with the guidelines established by the director or his designee; and

       (2) providing technical assistance to and acting as an information resource for local governments in the development of proactive hazard mitigation strategies as they relate to reducing the loss of life and mitigating property losses due to natural hazards to include hurricane, flood, earthquake, and fire.

    (B) Funds may be appropriated for a particular grant only after a majority affirmative vote on each grant by the advisory committee and submission of a resolution approved by a majority of the members of the relevant local governing body approving the application for grant funds local government project following approval by the director or his designee.

    (C) The Department of Insurance may make application and enter into contracts for and accept grants in aid from federal and state government and private sources for the purposes of:

       (1) mitigating losses for eligible residential properties in accordance with the guidelines established by the director or his designee; and

       (2) conducting loss mitigation studies for the development of strategies or measures aimed at reducing loss of life and mitigating property losses due to hurricane, flood, earthquake, and fire; or

       (3) any other purposes consistent with this article.

 

SECTION 13. Section 38-75-485 of the S.C. Code is amended to read:

 

    Section 38-75-485. (A) There is established within the Department of Insurance, the South Carolina Hurricane Damage Mitigation Program to aid eligible homeowners in retrofitting insurable property to reduce losses due to hurricane, tornado, or other catastrophic windstorm events. This program shall be known as the "SC Safe Home Program." The advisory committee, established pursuant to Section 38-75-470, shall provide advice and assistance to the program administrator with regard to his administration of the program.

    (B) This section does not create an entitlement for property owners or obligate the State in any way to fund the inspection or retrofitting of residential property in this State. Implementation of this program is subject to the availability of funds through annual legislative appropriations, receipt of federal grants or funds, or funding from other sources.

    (C) The program shall develop and implement a comprehensive and coordinated approach for hurricane damage mitigation that includes the following:

       (1) The program may award matching or nonmatching grants based upon the availability of funds. The program administrator also shall apply for financial grants to be used to assist single-family, site-built or manufactured or modular, owner-occupied, residential property owners to retrofit their primary legal residence to make them less vulnerable to hurricane damage.

           (a) To be eligible for a matching grant, a residential property must:

               (i) be the applicant's primary legal residence;

               (ii) be actually owned and occupied by the applicant;

               (iii) be the owner's legal residence as described in Section 12-43-220(c);

               (iv) be a single-family, site-built, manufactured, or modular, owner-occupied residential property;

               (v) be a residential property covered by a current homeowners or dwelling insurance policy that:

                  (A) is issued by an insurer licensed in this State or a surplus lines insurer, where the policy is lawfully placed by a broker authorized to do business in this State; and

                  (B) provides insurance coverage of the residential property equal to or greater than the fair market value of the residential property as defined in Section 12-37-3135(a)(2) and reflected in the county records;

               (vi) have undergone an acceptable wind certification and hurricane mitigation inspection in accordance with program requirements.

           (b) All matching grants must be matched on a dollar-for-dollar basis up to the maximum allowed depending on the type of retrofit. Grants will be awarded based on the following requirements:

               (i) a Resilient Mitigation Award will be awarded for roof retrofits meeting SC Safe Homes Retrofit Guidelines and Insurance Institute for Business and Home Safety Fortified RoofFORTIFIED ROOF Retrofit Guidelines for a residential property and may not exceed seven thousand five hundred dollars the dollar amount outlined in the annual allocation bulletin published by the Department of Insurance for nonmatching grant awards or six thousand dollars for matching grants; and

               (ii) a Sustainable Mitigation Award will be awarded for roof retrofits meeting SC Safe Home Retrofit Guidelines only or for Window Replacement and Opening Protection Retrofits meeting SC Safe Home Opening Protection Guidelines for residential property and mayshall not exceed five thousand dollars for nonmatching grants awards or four thousand dollars the dollar amount outlined in the annual allocation bulletin published by the Department of Insurance for matching grants.  For Hurricane Shuttering and Protective Barrier Systems only meetingmust meet SC Safe Home Opening Protection Guidelines, grants may not exceed three thousand dollars and must not exceed the dollar amount outlined in the annual allocation bulletin published by the Department of Insurance for both matching and nonmatching grants.

           (c) The program must create a process in which mitigation contractors agree to participate and seek reimbursement from the State and homeowners. selected Homeowners may select the contractor of their choice from a list of participating contractors provided on the SC Safe Home Program webpage under Participating Contractors and Inspectors.  All mitigation projects must be based upon the securing of To be eligible for a mitigation grant, all required local permits and inspections must be secured and the property must have successfully completed a SC Safe Home Program inspection. Mitigation projects are subject to random reinspection. The program may reinspect up to ten percent of all projects in any fiscal year.

           (d) Matching fund grants also must be made available to local governments and nonprofit entities, on a first-come, first-served basis, for projects that reduce hurricane damage to single-family, site-built or manufactured or modular owner-occupied, residential property, provided that:

               (i) no matching grant for any one local government or nonprofit entity may exceed fifty thousand dollars the dollar amount outlined in the annual allocation bulletin published by the Department of Insurance in any fiscal year;

               (ii) the total amount of matching grants awarded to all local governments and nonprofit entities combined may not exceed two hundred fifty thousand dollarsthe dollar amount outlined in the annual allocation bulletin published by the Department of Insurance in any fiscal year;  and

               (iii) the difference between two hundred fifty thousand dollars and the total amount of grants awarded to all local governments and nonprofit entities combined in any fiscal year may be applied to grants to individual homeowners who meet the qualifications for a grant described in subitems (a) through (d) or in subitem (g).subject to the availability of funds and a disaster declaration by the Governor, the director may award additional loss mitigation grants for SC Safe Home Program eligible residential properties within ninety days following a wind or hail related catastrophic event that do not exceed the dollar amount outlined in the annual allocation bulletin published by the Department of Insurance; and

               (iv) grants awarded by the SC Safe Home Program must be used for approved mitigation projects to retrofit an insurable property to resist losses due to hurricane, tornado, or other catastrophic windstorm events if permitted under the SC Safe Home Program operating rules and procedures. Any nonprofit must administer the grant in accordance with SC Safe Home Program standards, operating rules, and procedures. The nonprofit entity must prepare and maintain documentation required by the SC Safe Home Program and produce that documentation immediately upon the request of the director or his designee.

           (e) Grants may be used for the following improvements:

               (i) roof deck attachment;

               (ii) secondary water barrier;

               (iii) roof covering;

               (iv) brace gable ends;

               (v) reinforce roof-to-wall connections;

               (vi) opening protection;

               (vii) exterior doors, including garage doors;

               (viii) tie downs;

               (ix) problems associated with weakened trusses, studs, and other structural components;

               (x) inspection and repair or replacement of manufactured home piers, anchors, and tiedown straps; and

               (xi) any other mitigation techniques approved by the advisory committee.

           (f) To be eligible for a nonmatching grant, a residential property must comply with the requirements set forth in subsection (C)(1)(a), (c), and (e).

               (i) For nonmatching grants, applicants who otherwise meet the requirements of subitems (a), (c), and (e) may be eligible for a grant of up to seven thousand five hundred dollars for a Resilient Mitigation Grant Award and may not be required to provide a matching amount to receive a Resilient Mitigation Grant Award, up to five thousand dollars for a Sustainable Mitigation Grant Award or up to three thousand dollars for a Sustainable Mitigation Hurricane Shutters and Protective Barrier Systems Award.  These grants must be used to retrofit single-family, site-built or manufactured or modular, owner-occupied, residential properties in order to make them less vulnerable to hurricane damage. The grant must be used for the retrofitting measures set forth in Section 38-75-485(C)(1)(e).

               (ii) Nonmatching grant award amounts will be determined based on the cost of the mitigation project and a percentage of the total adjusted household income of the applicant according to the most recent federal income tax return. Those applicants with a total annual adjusted gross household income of which does not exceed eighty percent of the median annual adjusted gross income for households within the county in which the person or family resides may be eligible for the maximum grant award amount. Applicants with a higher total annual adjusted household income may be awarded a lower amount. The director or his designee shall issue a bulletin annually that sets forth the maximum grant award amounts based on the total annual adjusted gross household income of the applicant adjusted for family size relative to the county area median income or the state median family income, whichever is higher, as published annually by the United States Department of Housing and Urban Development. If the cost of the mitigation project exceeds the amount of the grant award, the remaining cost is the applicant's responsibility.

       (2) The department shall define by order or regulation the details of the mitigation measures necessary to qualify for the grants described in this section.

       (3) Multimedia public education, awareness, and advertising efforts designed to specifically address mitigation techniques must be employed, as well as a component to support ongoing consumer resources and referral services. Additionally, the SC Safe Home Program shall support ongoing consumer education resources and referral services.

       (4) The department shall use its best efforts to obtain grants or funds from the federal government to supplement the financial resources of the program. In addition to state appropriations, if any, this program must be implemented by the department through the use of the premium taxes due to this State by the South Carolina Wind and Hail Underwriting Association, and onefive percent of the premium taxes collected annually and remitted to the Department of Insurance.

       (5) Mitigation grants for insurable residential properties are subject to the availability of funds and must meet the eligibility criteria established by the SC Safe Home Program. Grant funding shall be allocated as follows:

           (a) mitigation grants in the seacoast area, as defined by Section 38-75-310, of the State shall be funded by the premium taxes collected by the South Carolina Wind and Hail Joint Underwriting Association; and

           (b) of the five percent of additional premium taxes collected pursuant to item (4):

               (i) fifty percent shall be allocated to residential and loss mitigation grants in the seacoast area, as defined by Section 38-75-310, of the State; and

               (ii) fifty percent shall be allocated to retrofitting eligible insurable residential properties on a first-come, first-served basis and to local loss mitigation grants in other parts of the State.

       (5)(6) The director or his designee may promulgate regulations or issue orders necessary to implement the provisions of this article.

 

SECTION 14. Section 38-77-122 of the S.C. Code is amended to read:

 

    Section 38-77-122. (A) No insurer or agent shall refuse to issue an automobile insurance policy as defined in Section 38-77-30 because of any one or more of the following factors: the age, sex, location of residence in this State, race, color, creed, national origin, ancestry, marital status, or income level, or the existence of uninsured or underinsured motorist claims. No insurer or agent shall refuse to issue an automobile insurance policy as defined in Section 38-77-30 solely because of any one of the following factors: the previous refusal of automobile insurance by another insurer, prior purchase of insurance through the Associated Auto Insurers Plan, or lawful occupation, including the military service, of the person seeking the coverage. Nothing in this section prohibits any insurer from limiting the issuance of motor vehicle insurance policies only to persons engaging in or who have engaged in a particular profession or occupation, or who are members of a particular religious sect.

    Nothing in this section prohibits any insurer from setting rates in accordance with relevant actuarial data.

    (B) In determining the premium rates to be charged for an automobile insurance policy as defined in Section 38-77-30, it is unlawful to consider race, color, creed, religion, national origin, ancestry, location of residence in this State, economic status, or income level, or the existence of uninsured or underinsured motorist claims. The existence of uninsured or underinsured motorist claims shall not be considered when determining an insured's eligibility for premium discounts. Nor may an insurer, agent, or broker refuse to write or renew an automobile insurance policy as defined in Section 38-77-30 based upon age, sex, race, color, creed, religion, national origin, ancestry, location of residence in this State, economic status, or income level, or the existence of uninsured or underinsured motorist claims. However, nothing in this subsection may preclude the use of a territorial plan approved by the director. Any insurer or agent who violates this section shall be subject to the penalties as provided in Section 38-2-10. If the director of the Department of Insurance or his designee finds that an insurer or agent is participating in a pattern of unfair discrimination, the director or his designee may impose a fine of up to two hundred thousand dollars. Provided, however, if the unfair discrimination is required by an insurer, only the insurer is subject to the penalty as long as the agent of the insurer has reported the pattern of unfair discrimination to the department. The director or his designee at any time may examine an insurer or agent to enforce this section. The expense of examination must be paid by the insurer, agent, or broker.

SECTION 15. Section 38-77-123(A) of the S.C. Code is amended to read:

 

    (A)(1) No insurer shall refuse to renew an automobile insurance policy because of any one or more of the following factors:

           (a) age;

           (b) sex;

           (c) location of residence in this State;

           (d) race;

           (e) color;

           (f) creed;

           (g) national origin;

           (h) ancestry;

           (i) marital status;

           (j) income level.

       (2) No insurer shall refuse to renew an automobile insurance policy solely because of any one of the following factors:

           (a) lawful occupation, including the military service;

           (b) lack of driving experience or number of years of driving experience;

           (c) lack of supporting business or lack of the potential for acquiring such business;

           (d) one or more accidents or violations that occurred more than thirty-six months immediately preceding the upcoming anniversary date;

           (e) one or more claims submitted under the uninsured motorists coverage or the underinsured motorists coverage of the policy where the uninsured motorist is known or there is physical evidence of contact;

           (f) single claim by a single insured submitted under the medical payments coverage or medical expense coverage due to an accident for which the insured was neither wholly nor partially at fault;

           (g) one or more claims submitted under the comprehensive or towing coverages. However, nothing in this section prohibits an insurer from modifying or refusing to renew the comprehensive or towing coverages at the time of renewal of the policy on the basis of one or more claims submitted by an insured under those coverages, provided that the insurer mails or delivers to the insured at the address shown in the policy, written notice of the change in coverage at least thirty days before the renewal;

           (h) two or fewer motor vehicle accidents within a three-year period unless the accident was caused either wholly or partially by the named insured, a resident of the same household, or other customary operator; or

           (i) an insured who uses his personal automobile for volunteer emergency services and who provides a copy of the policy promulgated by the chief of his department to his insurer on request.

       (3) Nothing contained in subsection (A)(1)(f), (g), and (h) prohibits an insurer from refusing to renew a policy where a claim is false or fraudulent. Nothing in this section prohibits an insurer from setting rates in accordance with relevant actuarial data except that no insurer may set rates based in whole or in part on race, color, creed, religion, national origin, ancestry, location of residence in this State, economic status, or income level, or the existence of uninsured or underinsured motorist claims. The existence of uninsured or underinsured motorist claims shall not be considered when determining an insured's eligibility for premium discounts. However, nothing in this subsection may preclude the use of a territorial plan approved by the director.

 

SECTION 16. Article 3, Chapter 77, Title 38 of the S.C. Code is amended by adding:

 

    Section 38-77-145. (A) A person who suffers personal injury or death may not recover noneconomic damages if the injury or death occurred while the person was operating a motor vehicle and that person knew that he was not in compliance with the automobile insurance policy requirements pursuant to Section 38-77-140, except as otherwise provided in subsection (B). For purposes of this section only, "noneconomic damages" has the same meaning as in Section 15-32-210(9).

    (B) The prohibition against the recovery of noneconomic damages shall not apply if the person who is liable for the personal injury or wrongful death:

       (1) was driving a motor vehicle in this State while under the influence of alcohol, drugs, or a combination of alcohol and drugs;

       (2) acted intentionally, recklessly, or with gross negligence;

       (3) fled from the scene of the accident; or

       (4) was acting in furtherance of an offense or in immediate flight from an offense that constitutes a crime for which a sentence of imprisonment for a term of more than one year is authorized.

 

SECTION 17. Section 38-77-280 of the S.C. Code is amended to read:

 

    Section 38-77-280. (A) Any automobile insurer may, at its own election, make collision coverage and either comprehensive or fire, theft, and combined additional coverage available to an insured or qualified applicant who requests the coverage at such rates and under such rules as have been approved by the director.  Automobile insurers contracted pursuant to Section 38-77-590 for risks written by them through producers assigned by the facility governing board pursuant to that section may make available collision coverage and either comprehensive or fire, theft, and combined additional coverage available to an insured or qualified applicant who requests the coverage.  Notwithstanding Section 38-77-590(g), a designated producer may have one or more voluntary outlets for automobile physical damage.

    (B) Any automobile physical damage insurance coverage deductible or policy deductible does not apply to automobile safety glass.Every automobile insurer offering automobile physical damage insurance coverage must offer a zero dollar deductible option for automobile safety glass.

    (C) Notwithstanding Section 38-77-111, automobile physical damage insurance coverage may be ceded to the facility.  However, automobile physical damage coverages ceded to the facility by an insurer or servicing carrier must be at the facility physical damage rate as defined in Section 38-77-30.

    (D)(C) In determining the premium rates to be charged on physical damage coverage or single interest collision coverage, it is unlawful to consider race, color, creed, religion, national origin, ancestry, location of residence in this State, economic status, or income level, or the existence of uninsured or underinsured motorist claims. The existence of uninsured or underinsured motorist claims shall not be considered when determining an insured's eligibility for premium discounts. Nor may an insurer, agent, or broker refuse to write or renew physical damage insurance coverage or single interest collision coverage based upon race, color, creed, religion, national origin, ancestry, location of residence in this State, economic status, or income level, or the existence of uninsured or underinsured motorist claims. However, nothing in this subsection may preclude the use of a territorial plan approved by the director. If the director of the Department of Insurance or the director's designee finds that an insurer, agent, or broker is participating in a pattern of unfair discrimination, the director or the director's designee may impose a fine of up to two hundred thousand dollars. The director or the director's designee at any time may examine an insurer, agent, or broker to enforce this section. The expense of examination must be paid by the insurer, agent, or broker.

    (D) No insurer may increase an automobile insurance premium, cancel, or refuse to renew an automobile insurance policy for a named insured as a result of a motor vehicle accident unless it is determined that the accident was caused, in whole or in part, by an insured or a permissive user of the insured vehicle.

 

SECTION 18. Section 12-6-1620(B) of the S.C. Code is amended to read:

 

    (B)(1) As used in this article, "Catastrophe Savings Account" means a regular savings account or money market account established by an insurance policyholder for residential property in this State to cover: (a) SC Safe Home or Insurance Institute for Business and Home Safety approved retrofits for the insured property owner's primary residence to make the property resilient to hurricane or other wind-related damage; or (b) an insurance deductible under an insurance policy for the taxpayer's legal residence property that covers hurricane, rising floodwaters, or other catastrophic windstorm event damage or by an individual to cover self-insured losses for the taxpayer's legal residence from a hurricane, rising floodwaters, or other catastrophic windstorm event. The account must be labeled as a Catastrophe Savings Account in order to qualify as a Catastrophe Savings Account as defined in this article. A taxpayer shall establish only one Catastrophe Savings Account and shall specify that the purpose of the account is to cover the amount of retrofits, insurance deductibles and other uninsured portions of risks of loss from hurricane, rising floodwater, or other catastrophic windstorm event.

       (2) A Catastrophe Savings Account is not subject to attachment, levy, garnishment, or legal process in this State.

       (3) The total amount that may be contributed to a Catastrophe Savings Account must not exceed:

           (a) in the case of an individual whose qualified deductible is less than or equal to one thousand dollars, two thousand dollars;

           (b) in the case of an individual whose qualified deductible is greater than one thousand dollars, the amount equal to the lesser of fifteen thousand dollars or twice the amount of the taxpayer's qualified deductible; or

           (c) in the case of a self-insured individual who chooses not to obtain insurance on his legal residence, two hundred fifty thousand dollars, but shall not exceed the value of the individual taxpayer's legal residence.

       (4) If a taxpayer contributes in excess of the limits provided in item (3), the taxpayer shall withdraw the amount of the excess contributions and include that amount in South Carolina income for purposes of Section 12-6-510 in the year of withdrawal.

       (5) The South Carolina Department of Revenue shall provide an annual report to the South Carolina General Assembly on the number of exemptions or the total amount of tax credits that have been claimed by South Carolina taxpayers for mitigation or retrofitting measures.

 

SECTION 19. Section 12-6-3660(D) of the S.C. Code is amended to read:

 

    (D) The tax credit allowed pursuant to this section for any taxable year must not exceed the lesser of:

       (1) twenty-five percent of the cost incurred; or

       (2) onetwo thousand dollars.

 

SECTION 20. Chapter 6, Title 12 of the S.C. Code is amended by adding:

 

    Section 12-6-3662. (A) There is established an annual "Disaster Preparedness Sales Tax Holiday." The initial tax holiday shall begin at 12:01 a.m. on Friday, May 2, 2026, and end at 11:59 p.m. on Sunday, May 4, 2026, with subsequent years beginning at 12:01 a.m. on the Friday of the last full weekend in April and ending at 11:59 p.m. the immediately following Sunday. This section describes the items eligible for tax exemption during the Disaster Preparedness Sales Tax Holiday.

    (B) The following emergency supply items which sell for sixty dollars or less per item shall be tax exempt during the Disaster Preparedness Sales Tax Holiday:

       (1) any package of AAA-cell, AA-cell, C-cell, D-cell, 6-volt, or 9-volt batteries, but excludes coin batteries, automobile batteries, and boat batteries;

       (2) any cellular phone battery or cellular phone charger;

       (3) any portable self-powered or battery-powered radio, two-way radio, weather band radio, or NOAA weather radio;

       (4) any portable self-powered light source, including battery-powered flashlights, lanterns, or emergency glow sticks;

       (5) any tarpaulin, plastic sheeting, plastic drop cloths, or other flexible, waterproof sheeting;

       (6) any ground anchor system including, but not limited to, bungee cords, rope, or tie-down kits;

       (7) any duct tape;

       (8) any plywood, window film, or other materials specifically designed to protect window openings;

       (9) any nonelectric food storage cooler or water storage container;

       (10) any nonelectric can opener;

       (11) any artificial ice, blue ice, ice packs, or reusable ice;

       (12) any self-contained first-aid kit;

       (13) any fire extinguisher, smoke detector, or carbon monoxide detector;

       (14) any gas or diesel fuel tank or container that can hold five gallons or less.

    (C) In addition, portable generators and power cords that may be used to provide light, communications, or preserve food in the event of a power outage, are exempt from sales tax up to the first one thousand dollars of the sales price.

    (D) Items normally sold in pairs or packages shall not be separated to qualify for the exemption provided for in this section.

 

SECTION 21. Section 12-6-3670 of the S.C. Code is amended to read:

 

    Section 12-6-3670. (A) An individual taxpayer may claim a credit against the income tax imposed pursuant to Section 12-6-510 for excess premium paid during the applicable tax year for property and casualty insurance, as defined in Articles 1, 3, and 5 of Chapter 75, Title 38, providing coverage on the taxpayer's legal residence pursuant to Section 12-43-220(c).

    (B) For the purposes of computing the credit allowed by this section, excess premium paid is the amount by which the premium paid exceeds five percent of the taxpayer's adjusted gross income.

    (C)(1) The credit allowed pursuant to this section for any taxable year may not exceed one thousand two hundred fifty three thousand dollars.

       (2) If the credit allowed under this section exceeds the state income tax liability for the taxable year, any unused credit may be carried forward for five succeeding taxable years.

 

SECTION 22. Section 42-9-440 of the S.C. Code is amended to read:

 

    Section 42-9-440.  The commission shall report all cases of suspected false statement or misrepresentation, as defined in Section 38-55-530(D), to the Insurance Fraud Division of the Office of the Attorney GeneralDepartment of Insurance for investigation and prosecution, if warranted, pursuant to the Omnibus Insurance Fraud and Reporting Immunity Act.

 

SECTION 23. Chapter 11, Title 40 of the S.C. Code is amended by adding:

 

    Section 40-11-125. Notwithstanding another provision of this chapter, the Department of Insurance has the exclusive authority to enforce any violations related to insurance or insurance fraud arising from roofing systems contracts or the delivery of goods or services related to roofing systems as provided in Article 5, Chapter 55, Title 38.

 

SECTION 24. Section 40-59-25 of the S.C. Code is amended to read:

 

    Section 40-59-25.  (A)(1) A person who enters into a written contract for goods or services related to a roofing system with a party who will be paid from proceeds of a property and casualty insurance policy and who subsequently receives written notice from the insurer that all or part of the claim or contract is not a covered loss under the policy may cancel the contract prior to midnight on the fifth business day after the insured has received the written notice of the denial of coverage.

       (2) This section applies to the following persons performing goods or services related to a roofing system:

           (a) a licensed residential builder;

           (b) a registered residential specialty contractor; and

           (c) a person or firm who engages or offers to engage in the business of residential building or residential specialty contracting without first having registered with the commission or procured a license from the commission.

       (3) Cancellation must be evidenced by the insured giving written notice of cancellation to the builder or contractor at the address provided in the contract. Notice of cancellation, if given by mail, must be effective upon deposit into the United States mail, postage prepaid and properly addressed to the builder or contractor. Notice of cancellation need not take a particular form and shall be sufficient if it indicates, by any form of written expression, the intention of the insured not to be bound by the contract.

       (4) For purposes of this subsection, "roof system" means a roof covering, roof sheathing, roof weatherproofing, roof framing, roof ventilation system, or insulation.

    (B) Before entering a contract as provided in subsection (A), the builder or contractor shall:

       (1) provide the insured a statement in boldface type of a minimum size of ten points, in substantially the following form:

    "You may cancel this contract at any time before midnight on the fifth business day after you have received written notification from your insurer that all or any part of this claim or contract is not a covered loss under the insurance policy. This right to cancel is in addition to any other rights of cancellation which may be found in state or federal law or regulation. See attached notice of cancellation form for an explanation of this right"; and

       (2) provide each insured a fully completed form, in duplicate, prominently captioned "NOTICE OF CANCELLATION", which must be attached to the contract but easily detachable, and which must contain in boldface type of a minimum size of ten points the following statement:

    "NOTICE OF CANCELLATION

    If you are notified by your insurer that all or any part of the claim or contract is not a covered loss under the insurance policy, you may cancel the contract by mailing or delivering a signed and dated copy of this cancellation notice or any other written notice to (insert name of contractor) at (insert address of contractor's place of business) any time prior to midnight on the fifth business day after you have received such notices from your insurer.

    I HEREBY CANCEL THIS TRANSACTION

    ______________________________________

    DATE

    ______________________________________

    SIGNATURE OF INSURED"

    (C) In circumstances in which payment may be made from the proceeds of a property and casualty insurance policy, a builder or contractor shall not require any payments from an insured until the five-day cancellation period has expired. If, however, the builder or contractor has performed any emergency services, acknowledged by the insured in writing to be necessary to prevent damage to the premises, the builder or contractor must be entitled to collect the amount due for the emergency services at the time they are rendered. A provision in a contract as provided in subsection (A) that requires payment of any fee for anything except emergency services must not be enforceable against an insured who has canceled a contract under this section.

    (D)(1) A builder or contractor shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of residential real estate on any insurance claim in connection with the repair or replacement of roof systems.

       (2) Notwithstanding item (1), or any other provision of state law, an owner is not prevented from consulting with a builder, contractor, or other person of his choice to provide an evaluation of the condition of his roof system and using the evaluation he receives in the negotiation for the repair or replacement of his roof system.

    (E)(1) A builder or contractor shall not advertise or promise to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services.

       (2) A person who violates a provision of this subsection is guilty of a misdemeanor. The violation is grounds for suspension or revocation of licenses issued pursuant to this chapter.

       (3) As used in this subsection, the term "promise to pay or rebate" means:

           (a) granting any allowance or offering any discount against the fees to be charged, including, but not limited to, an allowance or discount in return for displaying a sign or other advertisement at the insured's premises;  or

           (b) paying the insured or any person directly or indirectly associated with the property any form of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value for any reason.

 

SECTION 25. Article 1, Chapter 59, Title 40 of the S.C. Code is amended by adding:

 

    Section 40-59-27.  Notwithstanding another provision of this chapter, the Department of Insurance has the exclusive authority to enforce any violations related to insurance or insurance fraud arising from roofing systems contracts or the delivery of goods or services related to roofing systems as provided in Article 5, Chapter 55, Title 38.

 

SECTION 26. No later than January 31, the director of the Department of Insurance shall submit an annual report to the General Assembly that provides data illustrating the impact this act has had on insurance rates for South Carolina policyholders. This annual report must also include information regarding South Carolina's insurance rates in this State for the preceding five years. Additionally, the director or his designee shall provide annual testimony before the House Labor, Commerce and Industry Committee and the Senate Banking and Insurance Committee regarding the status of the insurance market and the performance of that market during the previous year.

 

SECTION 27. The General Assembly finds that the sections presented in this act constitute one subject as required by Section 17, Article III of the South Carolina Constitution, in particular finding that each change and each topic relates directly to or in conjunction with other sections to the subject of insurance rates and policyholder protection as clearly enumerated in the title. The General Assembly further finds that a common purpose or relationship exists among the sections, representing a potential plurality but not disunity of topics, notwithstanding that reasonable minds might differ in identifying more than one topic contained in the act.

 

SECTION 28. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

 

SECTION 29. This act takes effect upon approval by the Governor.

----XX----