South Carolina General Assembly
103rd Session, 1979-1980

Bill 879

                    Current Status

Bill Number:               879
Ratification Number:       579
Act Number                 477
Introducing Body:          Senate
Subject:                   Relating to company loans to officers
                           and directors of insurance companies
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(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(A477, R579, S879)

AN ACT TO AMEND SECTION 38-9-140, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO COMPANY LOANS TO OFFICERS AND DIRECTORS OF INSURANCE COMPANIES, SO AS TO AUTHORIZE CERTAIN LOANS IN CONNECTION WITH THE RELOCATION OF THE PLACE OF EMPLOYMENT OF COMPANY OFFICERS AND PROVIDE FOR THE PURCHASE OF AN OFFICER'S PLACE OF RESIDENCE BY THE COMPANY UNDER CERTAIN CONDITIONS.

Be it enacted by the General Assembly of the St~te of South Carolina:

Certain loans authorized

Section 1. Section 38-9-140 of the 1976 Code is amended to read:

"Section 38-9-140. No insurance company doing business in this State shall make any loan to any director or officer of such insurance company, either directly or indirectly, in any manner whatsoever, except as provided in this section, nor shall any such director or officer accept any such loan, directly or indirectly. No such insurance company shall make any advance to any of its directors or officers for future services to be performed beyond a period of one year from the date of making such advance. Nothing contained in this section shall prohibit a life insurance company from making a policy loan upon its policy or contract in an amount not exceeding the net reserve or cash value of the policy or contract.

The provisions of this section shall not prohibit an insurance company in connection with the relocation of the place of employment of an officer including any relocation in connection with the initial employment of such officer, from (a) making, or such officer from accepting therefrom, a mortgage loan to such officer on real property owned by the officer which is to serve as his residence or (b) acquiring or such officer from selling to him, at not more than the fair market value thereof, the residence of such officer. Mortgage loans made or residences acquired under the provisions of this section shall be subject to the limitations imposed on investments by the provisions of Section 38-5-1050. In addition, nothing in this section shall prohibit an insurance company from making any other loan to any such director or officer if the loan is first approved in writing by the Commissioner.

The violation of the provisions of this section by an insurance company shall be grounds for the revocation of the license of the company to do business in this State. Any officer or director of such company who violates the provisions of this section, either by participating in making such loans or by the accepting of such loans except as authorized in this section, shall be deemed guilty of a misdemeanor and upon conviction shall be punished by a fine of not more than one thousand dollars or imprisonment for one year, or both, in the discretion of the court.

Provided, any loan made by an insurance company to an officer, director or employee of such company shall bear the same rate of interest as is available to the public on loans from such company."

Time effective

Section 2. This act shall take effect upon approval by the Governor.