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Bill Number: 421 Ratification Number: 444 Act Number 411 Introducing Body: Senate Subject: Notice to insurer; notice by insurer; penalty; duties of Workers' Compensation Commission; notice to employees; etc.
(A411, R444, S421)
AN ACT TO AMEND SECTION 42-1-390, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE WITHDRAWAL OF WAIVER OF EXEMPTION BY AN EMPLOYER UNDER TITLE 42 (THE WORKERS' COMPENSATION LAW), SO AS TO PROVIDE THAT AN EMPLOYER DESIRING TO WITHDRAW FROM UNDER THE TERMS OF TITLE 42 MAY GIVE NOTICE IN WRITING EITHER TO THE WORKERS' COMPENSATION COMMISSION OR TO HIS INSURER WHO SHALL GIVE NOTICE IN WRITING TO THE COMMISSION, TO PROVIDE FOR A MONETARY PENALTY IF THE INSURER DOES NOT GIVE THE NOTICE TO THE COMMISSION, TO PROVIDE FOR THE USE OF THE PENALTY COLLECTED BY THE COMMISSION, TO PROVIDE THAT WHERE THE EMPLOYER GIVES THE NOTICE TO THE COMMISSION, THE COMMISSION SHALL, WITHIN THIRTY DAYS OF RECEIPT OF THE NOTICE, INFORM THE EMPLOYER THAT HE MUST PROVIDE WRITTEN NOTIFICATION BY A DATE CERTAIN TO HIS EMPLOYEES OF THE WITHDRAWAL, TO PROVIDE THAT NO EMPLOYER IS REQUIRED TO SO NOTIFY HIS EMPLOYEES UNLESS THE COMMISSION INFORMS HIM HE MUST DO SO, AND TO PROVIDE THAT AT THE EXPIRATION OF SIXTY DAYS FROM THE DATE OF WRITTEN NOTICE TO THE COMMISSION, THE EMPLOYER NO LONGER IS LIABLE UNDER THE TERMS OF TITLE 42 AND MAY BE PERMITTED TO SET UP ANY DEFENSE, AS ADVISED, TO ANY ACTION BROUGHT AGAINST HIM FOR PERSONAL INJURY OR DEATH BY ACCIDENT TO ANY EMPLOYEE; AND TO AMEND SECTION 42-5-80, RELATING TO THE LIABILITY OF THE INSURER UNDER THE WORKERS' COMPENSATION LAW, SO AS TO PROVIDE THAT THE OBLIGATION OF THE INSURER TO MAKE PAYMENTS IS NOT AFFECTED BY ANY DEFAULT OF THE INSURED, RATHER THAN "BY ANY DEFAULT OF THE INSURED AFTER THE INJURY", AND TO PROVIDE THAT ANY INSURER WHO ISSUES A POLICY OF COMPENSATION INSURANCE TO AN EMPLOYER NOT SUBJECT TO TITLE 42 MAY NOT PLEAD AS A DEFENSE THAT THE EMPLOYER IS NOT SUBJECT TO TITLE 42 AND IS ESTOPPED TO DENY COVERAGE.
Be it enacted by the General Assembly of the State of South Carolina:
Notice to insurer; notice by insurer; penalty; duties of commission; notice to employees; etc.
SECTION 1. Section 42-1-390 of the 1976 Code is amended to read:
"Section 42-1-390. Any employer who, having elected to come under this title, being at that time exempt from this title, and subsequently desiring to withdraw from under its terms, may give notice in writing either to the Commission that he no longer is under the terms of this title or to his insurer who shall give notice in writing to the Commission that the employer is no longer under the terms of this title. If the insurer does not give the notice to the Commission as required by this section, the insurer shall pay a penalty of one thousand dollars to the Commission which shall be used by the Commission to offset the costs of administering the provisions of Title 42. In the case where the employer gives the notice to the Commission that he no longer is under the terms of this title, the Commission shall, in turn, within thirty days of receipt of the employer's notice, inform the employer, in writing, that he must provide written notification by a date certain to his employees of his withdrawal from the terms of this title; however, no employer is required to so notify his employees unless the Commission informs him he must do so, as required by this section. At the expiration of sixty days from the date of written notice to the Commission the employer no longer is liable under the terms of this title and may be permitted to set up any defense as he may be advised to any action brought against him for personal injury or death by accident to any employee."
Language deleted; insurer may not plead defense, deny coverage
SECTION 2. Section 42-5-80 of the 1976 Code is amended to read:
"Section 42-5-80. (A) No policy of insurance against liability arising under this title may be issued unless it contains the agreement of the insurer that it will promptly pay to the person entitled thereto all benefits conferred by this title, and all installments of the compensation that may be awarded or agreed upon, and that the obligation shall not be affected by any default of the insured or by any default in giving notice required by such policy or otherwise.
(B) Such agreement must be construed to be a direct promise by the insurer to the person entitled to compensation enforceable in his name.
(C) Any insurer who issues a policy of compensation insurance to an employer not subject to this title may not plead as a defense that the employer is not subject to this title and is estopped to deny coverage."
SECTION 3. This act takes effect upon approval by the Governor.