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South Carolina Code of Laws Unannotated

South Carolina Code of Laws Unannotated

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Conduct of an Insurance Business

General Provisions

Section 38-55-210. This title is the only way to make contracts.

Section 38-55-2. Insurance companies shall be able to do business under their names; combination policies are not allowed.

Each insurer must conduct its business in the State, and all policies and contracts of insurers issued by it must be headed by or entitled by its corporate or proper name. However, an insurer can use a trading name to conduct its business, provided that the insurer discloses its corporate or right name clearly on policies, contracts of insurers, and any other documents filed with the Department of Insurance. 

Section 38-55-23. Captive insurers are not subject to the section on risk limitation.

A loss of more than ten percent of the surplus insurance policyholders is not allowed by any insurer operating in this State. To determine the limit of risk, it must be subtracted any threat that has been reinsured. This section does not cover captive insurers.

 

HISTORY. Former 1976 Code Section 38-5-30 [1947 (45), 322; 1952 Code Section37-1204; 1962 Code Section37-1203; 1963 Code Section 37-1203, 1964 Code Section 2293] was rewritten as Section 38-5-30 by 1987 Act No. 155, Section 1. Former 1976 Code Section 38-9180 [1947 (45), 322; 1952 Code Section 7-1204; 1962 Code Section 37-1203; 1964 (53) 2293] was rewritten as Section 38-57-30 by the 1987 Act No. 155, Section 1. 1991 Act No. 13, Section 27; 2001 Act No. 13, Section 27; 2001 Act No.

Section 38-55-40. Some inducements might not be available.

This State is not permitted to issue or permit any insurer to issue agency stock, securities, or special bonds or contracts of any type promising returns or profits as an incentive to take out insurance. This State does not allow insurers to conduct business. A corporation or stock company acting as an agent for an insurer is not permitted to sell, give, offer, or suggest giving any stock, security, bond, or agreement promising returns or profits to induce the taking of insurance. The director or his designee will impose the penalty provisions in Section 38-2-10 if any insurer or agent violates this section. If the agents only write marine insurance, this section does not apply to them or their agents.

HISTORY. Former 1976 Code Section 38-5-40 [1947 (45), 322; 1952 Code Section37-1202; 1962 Code Section37-1204; 1964 (53) 2293] was rewritten as Section 38-5-40 by 1987 Act No. 155, Section 1. Former 1976 Code Section 38-9-60 (1947 (45), 322; 1952 Code Section 7-1202; 1962 Code Section 37-1204; 1964 (53) 2293] was rewritten as Section 38-57-40 by the 1987 Act No. 155, Section 1. 1988 Act No. 374, Section 1; 1988 Act No. 374, Section 25; 1993 Act No.

SECTION 38-555-50 Discrimination prohibited.

An insurance broker, agent, or insurer doing business in this State must not discriminate in favor of insureds from the same class or risk with the same hazards. This includes the number of premiums and rates charged for policies. An insurance broker, an insurer's agent, or its representative may not enter into an insurance contract. A broker, an agent, an officer of the insurer, or a solicitor representing it may not give, allow, give, offer to pay, give, or allow any rebate on the policy. An insurance broker, its representative, an agent, and any solicitor for the insurer cannot offer, pay, give, pay, allow or give any other incentives to take out insurance. The Department of Insurance has established administrative fees for uninsured motorist transactions. Fees for uninsured motorist transactions may only be charged to consumers with lapsed automobile coverage. These fees should be prominently displayed in the office of the broker or agent.

SECTION 38-556-60 Discrimination: Punishment and Revocation of License

Any officer or agent of an insurance company doing business in this State who violates Section38-55-50 is guilty of a misdemeanor. After determining that an insurer, its agent, or an insurance broker has violated Section 38-5550, the director or his designee shall impose the penalty outlined in Section 38-2-10.

SECTION 38-55-270. Lawfully secured loans

 

It is not illegal to offer or make loans to citizens of the State secured by mortgages of real estate or any other collateral security.

HISTORY. Former 1976 Code Section 38-5-70 [1962 Code Section37-1207; 1964 (53) 2293] was rewritten as Section 38-5-70 under 1987 Act No. 155, Section 1. Former 1976 Code Section 38-9110 [1947 (45), 322; 1952 Code Section 7-149; 1962 Code Section 47-149] was rewritten as Section 38-55 70 by 1987 Act No. Section 1.

Section 38-55-275. Department of Insurance will keep your information confidential.

The National Association of Insurance Commissioners, regulatory officials of any state or federal agency, and information classified as confidential by any other state or association may be sent to the Department of Insurance. If the State, association, federal agency, or foreign country agrees, the Department of Insurance can share confidential documents and information with the National Association of Insurance Commissioners. This section does not allow records or information to be subpoenaed or duces tecum in civil, criminal, and administrative proceedings.

HISTORY: 2001 Act No. 82, Section 19, effective July 20, 2001; 2006 Act No. 395, Section 2, effective June 14, 2006.

SECTION 38-55-280. Direct or officer loans

(A) Insurers doing business in this State may not lend to its officers or directors directly or in indirect ways, except as set out in this section. However, this section does NOT prohibit a life insurance company from lending policy money to its policy or contract for an amount not exceeding the contract's net reserve or cash value.

(B) The section does not prohibit an insurance company from making or accepting a mortgage loan to an officer for real property that is his residence. This section applies to mortgage loans and places that are created under this section. 

(C) Any officer or director of an insurance company who violates this section by participating or accepting a loan other than that authorized by this section is guilty of a misdemeanor.

(D) An insurer's loan to its officers, directors, or employees pays the same interest rate as loans made to the public by the insurer.

Section 38-55-290. Tontine policies are prohibited.

It is illegal for any life insurer, mutual aid organization, or fraternal benefits association to issue policies, contracts, or certificates to policyholders, members, or provide for the establishment of policyholders, members, into divisions or classes to provide for the payment or benefit from special funds to the oldest member of the members of the class whose policy was in force for the longest time after the death of a member.

HISTORY. Former 1976 Code Section 38-5-90 [1947(45) 322; 1952 Code Section37-1202; 1962 Code Section37-1209; 1964 (53) 2293] was rewritten as Section 38-5-90 by 1987 Act No. 155, Section 1. Former 1976 Code Section 38-9150 [1947 (45), 322; 1952 Code Section 7-1202; 1962 Code Section 37-1209; 1964 (53) 2293] was rewritten as Section 38-57-90 by 1987 Act No. 155, Section 1.

Section 38-55-2100. Tontine plans before May 12, 1947.

An existing life insurer, mutual benefit association, or fraternal benefits association that was operating before May 12, 1947, on a plan that is prohibited under Section 38-5590 in this State may continue to do so provided the life insurance, fraternal benefit organization, or mutual help association does not place its policyholders in other classes or divisions than those in this State which were actually in existence on May 12, 1947. In addition, a mutual aid association, fraternal benefits association, or life insurer cannot operate under an endowment plan without a minimum of fifty thousand dollars in capital stock.

HISTORY. Former 1976 Code Section 38-5-100 [1947(45) 322; 1952 Code Section37-1202; 1962 Code Section37-1210; 1964 (53) 2293] was rewritten as Section 38-5-100 under 1987 Act No. 155, Section 1. Former 1976 Code Section 38-9160 [1947 (45), 322; 1952 Code Section 7-1202; 1962 Code Section 37-1210; 1964 (53) 2293] was rewritten as Section 38-57-100 by the 1987 Act No. Section 1.

SECTION 38-55-2150. Accepting premiums and assessments from an insolvent insurer

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